I 
110TH CONGRESS 
1ST SESSION H. R. 3118 
To promote the production and use of ethanol. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 19, 2007 
Mr. TERRY introduced the following bill; which was referred to the Committee 
on Energy and Commerce, and in addition to the Committees on Ways 
and Means and Science and Technology, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To promote the production and use of ethanol. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. PROHIBITION ON FRANCHISE AGREEMENT RE-
STRICTIONS RELATED TO RENEWABLE FUEL 
INFRASTRUCTURE. 
(a) IN GENERAL.—Title I of the Petroleum Mar-
keting Practices Act (15 U.S.C. 2801 et seq.) is amended 
by adding at the end the following: 
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS
‘‘SEC. 107. PROHIBITION ON RESTRICTION OF INSTALLA-
TION OF RENEWABLE FUEL PUMPS. 
‘‘(a) DEFINITION.—In this section: 
‘‘(1) RENEWABLE FUEL.—The term ‘renewable 
fuel’ means any fuel— 
‘‘(A) at least 85 percent of the volume of 
which consists of ethanol; or 
‘‘(B) any mixture of biodiesel or renewable 
diesel (as defined in regulations adopted pursu-
ant to section 211(o) of the Clean Air Act (40 
C.F.R., Part 80)) and diesel fuel, determined 
without regard to any use of kerosene and con-
taining at least 10 percent biodiesel or renew-
able diesel. 
‘‘(2) FRANCHISE-RELATED
DOCUMENT.—The 
term ‘franchise-related document’ means— 
‘‘(A) a franchise under this Act; and 
‘‘(B) any other contract or directive of a 
franchisor relating to terms or conditions of the 
sale of fuel by a franchisee. 
‘‘(b) PROHIBITIONS.— 
‘‘(1) IN GENERAL.—Notwithstanding any provi-
sion of a franchise-related document in effect on the 
date of enactment of this section, no franchisee or 
affiliate of a franchisee shall be restricted by its 
franchisor from— 
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS
‘‘(A) installing on the marketing premises 
of the franchisee a renewable fuel pump or 
tank, except that the franchisee’s franchisor 
may restrict the installation of a tank on leased 
marketing premises of such franchisor; 
‘‘(B) converting an existing tank or pump 
on the marketing premises of the franchisee for 
renewable fuel use, so long as such tank or 
pump and the piping connecting them are ei-
ther warranted by the manufacturer or certified 
by a recognized standards setting organization 
to be suitable for use with such renewable fuel; 
‘‘(C) advertising (including through the 
use of signage) the sale of any renewable fuel; 
‘‘(D) selling renewable fuel in any specified 
area on the marketing premises of the 
franchisee (including any area in which a name 
or logo of a franchisor or any other entity ap-
pears); 
‘‘(E) purchasing renewable fuel from 
sources other than the franchisor if the 
franchisor does not offer its own renewable fuel 
for sale by the franchisee; 
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS
‘‘(F) listing renewable fuel availability or 
prices, including on service station signs, fuel 
dispensers, or light poles; or 
‘‘(G) allowing for payment of renewable 
fuel with a credit card, 
so long as such activities do not constitute willful 
adulteration, mislabeling, or misbranding of motor 
fuels or other trademark violations by the franchisee. 
‘‘(2) EFFECT OF PROVISION.—Any restriction 
described in paragraph (1) that is contained in a 
franchise-related document and in effect on the date 
of enactment of this section shall be considered to be 
null and void as of that date. 
‘‘(c) EXCEPTION TO 3-GRADE REQUIREMENT.—No 
franchise-related document that requires that 3 grades of 
gasoline be sold by the applicable franchisee shall prevent 
the franchisee from selling an renewable fuel in lieu of 
1, and only 1, grade of gasoline.’’. 
(b) ENFORCEMENT.—Section 105 of the Petroleum 
Marketing Practices Act (15 U.S.C. 2805) is amended by 
striking ‘‘102 or 103’’ each place it appears and inserting 
‘‘102, 103, or 107’’. 
(c) CONFORMING AMENDMENTS.— 
(1) IN GENERAL.—Section 101(13) of the Pe-
troleum Marketing Practices Act (15 U.S.C. 
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS
2801(13)) is amended by adjusting the indentation 
of subparagraph (C) appropriately. 
(2) TABLE OF CONTENTS.—The table of con-
tents of the Petroleum Marketing Practices Act (15 
U.S.C. 2801 note) is amended— 
(A) by inserting after the item relating to 
section 106 the following: 
‘‘Sec. 107. Prohibition on restriction of installation of renewable fuel pumps.’’; 
and 
(B) by striking the item relating to section 
202 and inserting the following: 
‘‘Sec. 202. Automotive fuel rating testing and disclosure requirements.’’. 
SEC. 2. SUPPLEMENTING CORN AS AN ETHANOL FEED-
STOCK. 
(a) RESEARCH AND DEVELOPMENT PROGRAM.—The 
Secretary of Energy shall establish a program to make 
grants of not to exceed $1,000,000 each to no more than 
10 universities for a 3-year program of demonstration of 
supplementing corn as an ethanol feedstock with sweet 
sorghum. 
(b) PROGRAM GOALS.—The goals of the program 
under this section shall be to— 
(1) enhance agronomic efficiency of the crop on 
marginal lands by— 
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS
(A) developing best management practices 
for maintaining high sorghum yields while using 
less water and nitrogen than corn; 
(B) identifying and selecting plants with a 
high sugar content; and 
(C) developing cold tolerant sweet sorghum 
varieties to enable two crops to be grown per 
season; 
(2) enhance ethanol processing potential in the 
crop by— 
(A) developing a robust technology for cen-
tralized and ethanol production facilities that 
pair high-performing sweet sorghum lines with 
different yeasts to produce the best process for 
converting sweet sorghum juice into ethanol; 
(B) conducting process and chemical anal-
yses of sweet sorghum sap fermentation; 
(C) introducing cellulosic hydrolyzing en-
zymes into sweet sorghum to promote biomass 
conversion; and 
(D) performing life-cycle analysis of sweet 
sorghum-ethanol, including energy yield, effi-
ciency, and greenhouse gas reduction; 
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS
(3) establish a sweet sorghum production sys-
tem optimized for the region of the university con-
ducting the research; 
(4) improve sweet sorghum lines with higher 
sugar production and performance with minimal ag-
ricultural inputs; 
(5) optimize sugar fermentation using selected 
yeast strains; 
(6) develop sweet sorghum lines with improved 
cold tolerance and cellulosic degradation; and 
(7) develop agricultural models for predicting 
agricultural performance and ethanol yield under 
various growing conditions. 
(c) AWARD CRITERIA.—The Secretary shall award 
grants under this section only to universities that— 
(1) have access to multiple lines of sweet sor-
ghum for research; and 
(2) are located in a State where sweet sorghum 
is anticipated to grow well on marginal lands. 
(d) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary for car-
rying out this section $10,000,000. 
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS
SEC. 3. CLOSED LOOP ETHANOL PROJECT LOAN GUARAN-
TEES. 
(a) CLEAN AIR ACT AMENDMENTS.—Section 212 of 
the Clean Air Act (42 U.S.C. 7546) is amended— 
(1) in subsection (a)— 
(A) 
by 
redesignating 
paragraphs 
(1) 
through (3) as paragraphs (2) through (4), re-
spectively; and 
(B) by inserting before paragraph (2), as 
so redesignated by subparagraph (A) of this 
paragraph, the following new paragraph: 
‘‘(1) CLOSED
LOOP
ETHANOL.—The term 
‘closed loop ethanol’ means a facility in which— 
‘‘(A) solid and liquid waste is collected 
from agricultural animals in a concentrated lo-
cation together with cellulosic and other bio 
mass from agricultural crops; 
‘‘(B) such waste is used to generate fuel; 
‘‘(C) such fuel is used to produce ethanol 
at the same location; and 
‘‘(D) the need for fossil fuel in the produc-
tion of ethanol and the drying of distillers 
grains is reasonably expected to be at least 90 
percent less than in a comparably sized tradi-
tional ethanol facility powered by fossil fuel.’’; 
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS
(2) in subsection (b)(1), by inserting ‘‘, includ-
ing closed loop ethanol projects’’ after ‘‘sucrose-de-
rived ethanol’’; 
(3) in subsection (b)(2)(A), by striking ‘‘not 
more than 4’’; and 
(4) in subsection (b)(5), by inserting ‘‘, or at 
least 10 percent in the case of closed loop ethanol 
facilities’’ after ‘‘total project cost’’. 
(b) LOAN GUARANTEE PROGRAM AMENDMENTS.— 
Section 1510 of the Energy Policy Act of 2005 (42 U.S.C. 
16501) is amended— 
(1) in subsection (b), by striking ‘‘for the con-
struction of facilities’’ and inserting ‘‘, and Federal, 
State, and locally issued industrial revenue bonds in 
the case of closed loop ethanol facilities, for the con-
struction of facilities, including closed loop ethanol 
facilities,’’; and 
(2) in subsection (e), by inserting ‘‘, or not 
more than 30 years in the case of closed loop eth-
anol facilities’’ after ‘‘20 years’’. 
SEC. 4. MODIFICATION OF ALTERNATIVE FUEL VEHICLE 
REFUELING PROPERTY CREDIT. 
(a) INCREASE IN CREDIT AMOUNT.—Section 30C of 
the Internal Revenue Code of 1986 (relating to alternative 
fuel vehicle refueling property credit) is amended— 
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS
(1) by striking ‘‘30 percent’’ in subsection (a) 
and inserting ‘‘50 percent’’, and 
(2) by striking ‘‘$30,000’’ in subsection (b)(1) 
and inserting ‘‘$50,000’’. 
(b) EXTENSION OF CREDIT.—Subsection (g) section 
30C of such Code (relating to termination) is amended 
to read as follows: 
‘‘(g) TERMINATION OF AVAILABILITY OF CREDIT.— 
This section shall not apply to property placed in service 
after December 31, 2014.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
the date of the enactment of this Act, in taxable years 
ending after such date. 
SEC. 5. REFUELING PROPERTY FOR BIODIESEL AND RE-
NEWABLE BIODIESEL. 
(a) IN GENERAL.—Paragraph (1) of section 179A(e) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘and’’ at the end of subparagraph (E), by striking 
the period at the end of subparagraph (F) and inserting 
‘‘, and’’, and by inserting after subparagraph (F) the fol-
lowing new subparagraph: 
‘‘(G) any mixture of diesel fuel (as defined 
in section 4083(a)(3)), determined without re-
gard to any use of kerosene, at least 20 percent 
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS
of which is 1 or more of the following: biodiesel 
or renewable biodiesel, as such terms are de-
fined in section 40A.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
the date of the enactment of this Act, in taxable years 
ending after such date. 
SEC. 6. INCREASE IN CREDIT FOR RESEARCH RELATING TO 
ALTERNATIVE 
AND 
RENEWABLE 
ENERGY 
PROCESSES. 
(a) IN GENERAL.—Section 41 of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection 
(h) as subsection (i) and by inserting after subsection (g) 
the following new subsection: 
‘‘(h) INCREASE IN CREDIT AMOUNT FOR RESEARCH 
RELATING TO ALTERNATIVE AND RENEWABLE ENERGY 
PROCESSES.— 
‘‘(1) IN GENERAL.—In the case of any expense 
or payment relating to a qualified resource— 
‘‘(A) subsection (a) shall be applied by 
substituting ‘40 percent’ for ‘10 percent’ each 
place it occurs, 
‘‘(B) subsection (c)(4) shall be applied by 
substituting ‘6 percent’ for ‘3 percent’ in sub-
paragraph (A)(i), ‘8 percent’ for ‘4 percent’ in 
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS
subparagraph (A)(ii), and ‘10 percent’ for ‘5 
percent’ in subparagraph (A)(iii), 
‘‘(C) subsection (c)(5) shall be applied by 
substituting ‘24 percent’ for ‘12 percent’ in 
subparagraph (A) and ‘12 percent’ for ‘6 per-
cent’ in subparagraph (B)(ii), and 
‘‘(D) such expense or payment shall be 
taken into account for purposes of this section 
after taking into account expenses and pay-
ments which do not relate to a qualified re-
source. 
‘‘(2) QUALIFIED RESOURCE.—For purposes of 
paragraph (1), the term ‘qualified resource’ means— 
‘‘(A) any clean-burning fuel (as defined in 
section 179A(e)(1), other than diesel fuel), and 
‘‘(B) any closed-loop system, including any 
anaerobic digester.’’. 
(b) ALLOWANCE AGAINST ALTERNATIVE MINIMUM 
TAX.—Subparagraph (B) of section 38(c)(4) of such Code 
is amended by striking ‘‘and’’ at the end of clause (i), by 
striking the period at the end of clause (ii) and inserting 
‘‘, and’’, and by inserting after clause (ii) the following 
new clause: 
‘‘(iii) the credit determined under sec-
tion 41 to the extent that such credit is at-
VerDate Aug 31 2005 
04:25 Jul 20, 2007
Jkt 059200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H3118.IH
H3118
ccoleman on PROD1PC69 with BILLS