(11) The benefits of biofuels are as follows: 
(A) ENERGY SECURITY.— 
(i) Biofuels hold potential to address 
our dependence on foreign energy sources 
immediately. With agricultural surpluses, 
commodity prices have reached record 
lows; concurrently world petroleum prices 
have reached record highs and are ex-
pected to continue rising as global petro-
leum reserves are drawn down over the 
next 25 years. It also is clear that eco-
nomic conditions are favorable to utilize 
domestic surpluses of biobased oils to en-
hance the Nation’s energy security. 
(ii) In the short term, biofuels can 
supply at least one-fifth of current United 
States fuel demand using existing tech-
nologies and capabilities. Additional plant 
research, newer processing and distribution 
technologies, and placing additional acres 
under cultivation can yield even greater re-
sults. 
(iii) Biofuels can be used with existing 
petroleum infrastructure and conventional 
equipment.
(B) ECONOMIC SECURITY.— 
(i) Continued dependence upon im-
ported sources of oil means our Nation is 
strategically vulnerable to disruptions in 
our oil supply. 
(ii) Renewable biofuels domestically 
produced directly replace imported oil. 
(iii) 
Increased 
use 
of 
renewable 
biofuels would result in significant eco-
nomic benefits to rural and urban areas 
and also reduce the trade deficit. 
(iv) According to the Department of 
Agriculture, a sustained annual market of 
100,000,000 gallons of biodiesel alone 
would result in $170,000,000 in increased 
income to farmers. 
(v) Farmer-owned biofuels production 
has already resulted in improved income 
for farmers, as evidenced by the experience 
with State-supported rural development ef-
forts in Minnesota where prices to corn 
producers have been increased by $1.00 
per bushel. With the Department of Agri-
culture having forecast prices of $2.10 per 
bushel of corn for the 2004–2005 mar-
keting year, the portion of the corn crop 
that goes for ethanol has a farm value of 
$2,100,000,000. 
(C) ENVIRONMENTAL SECURITY.— 
(i) The use of grain-based ethanol re-
duces greenhouse gas emissions from 35 to 
46 percent compared with conventional 
gasoline. Biomass ethanol provides an even 
greater reduction. 
(ii) The American Lung Association 
of Metropolitan Chicago credits ethanol- 
blended reformulated gasoline with reduc-
ing smog-forming emissions by 25 percent 
since 1990. 
(iii) Ethanol reduces tailpipe carbon 
monoxide emissions by as much as 30 per-
cent. 
(iv) Ethanol reduces exhaust volatile 
organic compounds emissions by 12 per-
cent. 
(v) Ethanol reduces toxic emissions by 
30 percent. 
(vi) Ethanol reduces particulate emis-
sions, especially fine-particulates that pose
a health threat to children, senior citizens, 
and those with respiratory ailments. 
(vii) Biodiesel contains no sulfur or 
aromatics associated with air pollution. 
(viii) The use of biodiesel provides a 
78.5 percent reduction in CO2 emissions 
compared to petroleum diesel and when 
burned in a conventional engine provides a 
substantial reduction of unburned hydro-
carbons, carbon monoxide, and particulate 
matter. 
TITLE I—NATIONAL BIOFUELS 
DEVELOPMENT 
SEC. 101. LOANS AND LOAN GUARANTEES. 
(a) IN GENERAL.—The Secretary of Agriculture (in 
this section referred to as the ‘‘Secretary’’) may make and 
guarantee loans for the production, distribution, develop-
ment, and storage of biofuels. 
(b) ELIGIBILITY.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), an applicant for a loan or loan guarantee 
under this section shall be eligible to receive such a 
loan or loan guarantee if— 
(A) the applicant is a farmer, member of 
an association of farmers, member of a farm co-
operative, municipal entity, nonprofit corpora-
tion, State, or Territory; and 
(B) the applicant is unable to obtain suffi-
cient credit elsewhere to finance the actual 
needs of the applicant at reasonable rates and 
terms, taking into consideration prevailing pri-
vate and cooperative rates and terms in the 
community in or near which the applicant re-
sides for loans for similar purposes and periods 
of time. 
(2) LOAN GUARANTEE ELIGIBILITY PRECLUDES 
LOAN ELIGIBILITY.—An applicant who is eligible for 
a loan guarantee under this section shall not be eli-
gible for a loan under this section. 
(c) LOAN TERMS.— 
(1) INTEREST RATE.—Interest shall be payable 
on a loan under this section at the rate at which in-
terest is payable on obligations issued by United 
States for a similar period of time. 
(2) REPAYMENT PERIOD.—A loan under this 
section shall be repayable in not less than 5 years 
and not more than 20 years. 
(d) REVOLVING FUND.—