I 
110TH CONGRESS 
1ST SESSION H. R. 2296 
To reduce the Nation’s oil dependence and enhance the Nation’s ability 
to produce alternative fuels. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 14, 2007 
Mr. GERLACH introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committees on 
Ways and Means and Transportation and Infrastructure, for a period to 
be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To reduce the Nation’s oil dependence and enhance the 
Nation’s ability to produce alternative fuels. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Future Fuels Act’’. 
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TITLE 
I—ADVANCED 
TECH-
NOLOGY MOTOR VEHICLE IN-
VESTMENT CREDIT 
SEC. 101. ADVANCED TECHNOLOGY MOTOR VEHICLE IN-
VESTMENT CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business related credits) is amended by 
adding at the end the following new section: 
‘‘SEC. 45N. ADVANCED TECHNOLOGY MOTOR VEHICLE IN-
VESTMENT CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 38, in 
the case of an eligible manufacturer, the advanced tech-
nology motor vehicle investment credit determined under 
this section for any taxable year is an amount equal to 
33 percent of the qualified investment of the taxpayer for 
such taxable year. 
‘‘(b) LIMITATION.—The amount of the credit deter-
mined under this section for any taxable year shall not 
exceed $200,000,000. 
‘‘(c) ELIGIBLE MANUFACTURER.—For purposes of 
this section— 
‘‘(1) IN GENERAL.—The term ‘eligible manufac-
turer’ means any taxpayer if more than 25 percent 
of the taxpayer’s gross receipts for the taxable year 
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are derived from the manufacture of motor vehicles 
and component parts of such vehicles. 
‘‘(2) REQUIREMENT OF IMPROVEMENT IN AV-
ERAGE FUEL ECONOMY.—Such term shall not in-
clude any manufacturer of motor vehicles for any 
taxable year unless the average fuel economy of the 
manufacturer for light duty vehicles (other than ve-
hicles produced with property described in sub-
section (d) which was taken into account for pur-
poses of determining a credit under this section) for 
the most recent model year for which data is avail-
able (determined as of the first day of such taxable 
year) is not less than such average fuel economy for 
model year 2002. Terms used in this paragraph 
which are also used in section 30B shall have the 
same meaning as when used in such section. 
‘‘(d) QUALIFIED INVESTMENT.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—The term ‘qualified invest-
ment’ means amounts paid or incurred by the tax-
payer during the taxable year— 
‘‘(A) to re-equip or expand an existing 
manufacturing facility of the eligible manufac-
turer to produce advanced technology motor ve-
hicles or to produce eligible components, and 
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‘‘(B) for qualified engineering integration. 
‘‘(2) ATTRIBUTION RULE.—In the event a facil-
ity of the taxpayer produces both advanced tech-
nology motor vehicles and other property, or eligible 
components and other property, only the qualified 
investment attributable to production of advanced 
technology motor vehicles and eligible components 
shall be taken into account for purposes of this sec-
tion. 
‘‘(3) 
PROPERTY
USED
OUTSIDE
UNITED 
STATES, ETC., NOT QUALIFIED.—An amount shall 
not be treated as a qualified investment if such 
amount is paid or incurred for property referred to 
in section 50(b) or to the extent such amount is 
taken into account under section 179. 
‘‘(4) ELECTION.—An amount shall not be treat-
ed as a qualified investment if the taxpayer elects 
that such amount not be so treated. 
‘‘(e) ADVANCED TECHNOLOGY MOTOR VEHICLES.— 
For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘advanced tech-
nology motor vehicle’ means— 
‘‘(A) any new advanced lean burn tech-
nology motor vehicle (as defined in section 
30B(c)(3), determined without regard to sub-
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paragraph (A)(iv)(II) thereof and without re-
gard to the weight limitation under subpara-
graph (A)(iv)(I) thereof), and 
‘‘(B) any new qualified hybrid motor vehi-
cle (as defined in section section 30B(d)(3)(A), 
determined without regard to clause (ii)(II) 
thereof and without regard to the weight limita-
tion under subparagraph (ii)(I) thereof) that 
achieves at least 140 percent of the 2002 model 
year city fuel economy (as defined in section 
30B(b)(2)(B)). 
‘‘(2) EPA 
EMISSION
STANDARD
REQUIRE-
MENTS.—The term ‘advanced technology motor vehi-
cle’ shall not include any vehicle unless such vehicle 
is in compliance with any Environmental Protection 
Agency emission standard for fine particulate matter 
for the applicable make and model year of the vehi-
cle. 
‘‘(f) ELIGIBLE COMPONENTS.—For purposes of this 
section, the term ‘eligible component’ means any compo-
nent specially designed for an advanced technology motor 
vehicle and installed for the purpose of meeting the per-
formance requirements for such vehicle, including— 
‘‘(1) with respect to any gasoline-electric new 
qualified hybrid motor vehicle (as so defined), an 
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electric motor or generator, power split device, power 
control unit, power controls, integrated starter gen-
erator, or battery, 
‘‘(2) with respect to any advanced lean burn 
technology motor vehicle (as so defined), a diesel en-
gine, turbocharger, fuel injection system, or after- 
treatment system such as a particle filter or NOX 
absorber, and 
‘‘(3) any other component identified by the Sec-
retary as an eligible component. 
‘‘(g) QUALIFIED ENGINEERING INTEGRATION.—For 
purposes of this section, the term ‘qualified engineering 
integration’ engineering tasks performed prior to the mar-
ket introduction of an advanced technology vehicle which 
are related to— 
‘‘(1) incorporating eligible components into the 
design of such vehicle, or 
‘‘(2) designing new tooling and equipment for 
facilities to manufacture such vehicle or eligible com-
ponents for such vehicle. 
‘‘(h) DENIAL OF DOUBLE BENEFIT.—In the case of 
the amount of the credit determined under this section— 
‘‘(1) no deduction or credit shall be allowed for 
such amount under any other provision of this chap-
ter, and 
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‘‘(2) no increase in the adjusted basis of any 
property shall result from such amount. 
‘‘(i) AGGREGATION AND ALLOCATION RULES.—For 
purposes of this section, rules similar to the rules of para-
graphs (1) and (2) of section 41(f) shall apply. 
‘‘(j) RECAPTURE.—The Secretary shall, by regula-
tions, provide for recapturing any credit allowed under 
this section with respect to any qualified investment which 
ceases to be a qualified investment. 
‘‘(k) TERMINATION.—No credit shall be allowed 
under this section with respect to any amount paid or in-
curred after December 31, 2017.’’. 
(b) CREDIT ALLOWED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b) of such Code is amended 
by striking ‘‘plus’’ at the end of paragraph (25), by strik-
ing the period at the end of paragraph (26) and inserting 
‘‘, plus’’, and by adding at the end the following new para-
graph: 
‘‘(27) in the case of an eligible manufacturer 
(as defined in section 45N(c)), the advanced tech-
nology motor vehicle investment credit determined 
under section 45N(a).’’. 
(c) CREDIT ALLOWED AGAINST NET INCOME TAX.— 
Section 38(c) of such Code is amended by redesignating 
paragraphs (2) through (5) as paragraph (3) through (6), 
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respectively, and by inserting after paragraph (1) the fol-
lowing new paragraph: 
‘‘(2) SPECIAL
RULES
FOR
ADVANCED
TECH-
NOLOGY MOTOR VEHICLE INVESTMENT CREDIT.—In 
the case of the advanced technology motor vehicle 
investment 
credit 
determined 
under 
section 
45N(a)— 
‘‘(A) this section and section 39 shall be 
applied separately with respect to such credit, 
and 
‘‘(B) in applying paragraph (1) to such 
credit— 
‘‘(i) the amounts described in sub-
paragraphs (A) and (B) of such paragraph 
shall be treated as being zero, and 
‘‘(ii) the limitation under paragraph 
(1) (as modified by clause (i)) shall be re-
duced by the credit allowed under sub-
section (a) for the taxable year (other than 
the advanced technology motor vehicle in-
vestment credit determined under section 
45N(a), the empowerment zone employ-
ment employment credit, the New York 
Liberty Zone business employee credit, or 
the specified credits).’’. 
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(d) CLERICAL AMENDMENTS.— 
(1) Section 1016(a) of such Code is amended 
by striking ‘‘and’’ at the end of paragraph (36), by 
striking the period and the end of paragraph (37) 
and inserting ‘‘, and’’, and by adding at the end the 
following new paragraph: 
‘‘(38) to the extent provided in section 
45N(h)(2).’’. 
(2) Section 6501(m) of such Code is amended 
by inserting ‘‘45N(d)(4),’’ after ‘‘45C(d)(4),’’. 
(3) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 of such Code is 
amended by adding at the end the following new 
item: 
‘‘Sec. 45N. Advanced technology motor vehicle investment credit.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred after 
December 31, 2006. 
TITLE II—FUEL CHOICE 
SEC. 201. FUEL ECONOMY CREDITS PROPORTIONAL TO AL-
TERNATIVE FUEL USED IN DUAL FUEL VEHI-
CLES. 
(a) FUEL ECONOMY CALCULATIONS
FOR ALTER-
NATIVE FUEL VEHICLES.—Section 32905 of title 49, 
United States Code, is amended— 
(1) in subsections (b) and (d)— 
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(A) by amending paragraph (1) of each 
such subsection to read as follows: 
‘‘(1) the number determined by— 
‘‘(A) subtracting from 1.0 the alternative 
fuel use factor; and 
‘‘(B) dividing the number calculated under 
subparagraph (A) by the fuel economy meas-
ured under section 32904(c) when operating the 
model on gasoline or diesel fuel; and’’; and 
(B) by amending paragraph (2) of each 
such subsection to read as follows: 
‘‘(2) the number determined by dividing the al-
ternative fuel use factor by the fuel economy meas-
ured under subsection (a) when operating the model 
on alternative fuel.’’. 
(2) by adding at the end the following: 
‘‘(h) DETERMINATION OF ALTERNATIVE FUEL USE 
FACTOR.— 
‘‘(1) DEFINITION.—For purposes of subsections 
(b) and (d), the term ‘alternative fuel use factor’ 
means the factor determined by the Administrator 
under paragraph (3). 
‘‘(2) AGGREGATE AMOUNT OF FUEL.—At the 
beginning of each calendar year, the Secretary of 
Transportation shall estimate the aggregate amount 
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of fuel and the aggregate amount of alternative fuel 
used to operate all dual fuel automobiles during the 
most recent 12-month period. 
‘‘(3) DETERMINATION OF ALTERNATIVE FUEL 
USE FACTOR.—The Administrator shall determine, 
by regulation, the alternative fuel use factor for dual 
fueled automobiles, on an energy equivalent basis, by 
calculating the ratio that the amount of alternative 
fuel used by each model bears to the total amount 
of fuel used by such model.’’. 
(b) APPLICABILITY OF EXISTING STANDARD.—The 
amendments made by this section shall not affect the ap-
plication of section 32901 of title 49, United States Code, 
to automobiles manufactured before model year 2007. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2007. 
SEC. 202. FLEXIBLE FUEL VEHICLE STANDARDS. 
(a) DEFINITIONS.—In this section: 
(1) ALTERNATIVE FUEL; ALTERNATIVE FUELED 
AUTOMOBILE; 
AUTOMOBILE.—The terms ‘‘alter-
native fuel’’, ‘‘alternative fueled automobile’’, and 
‘‘automobile’’ have the meanings given such terms in 
section 32901 of title 49, United States Code. 
(2) FLEXIBLE
FUEL
VEHICLES.—The term 
‘‘flexible fuel vehicle’’ means a light duty motor vehi-
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cle warranted by the manufacturer to operate using 
gasoline and 1 or more alternative fuels, including 
ethanol and methanol in blends up to 85 percent al-
ternative fuel by volume. 
(b) INCREASING PERCENTAGE
OF ALTERNATIVE 
FUELED
AUTOMOBILES
OR
FLEXIBLE
FUEL
VEHI-
CLES.— 
(1) IN GENERAL.—Of the new automobiles sold 
by a manufacturer in the United States— 
(A) not less than 10 percent manufactured 
by that manufacturer for model year 2009 shall 
be alternative fueled automobiles or flexible fuel 
vehicles; 
(B) not less than 20 percent manufactured 
by that manufacturer for model year 2010 shall 
be alternative fueled automobiles or flexible fuel 
vehicles; 
(C) not less than 35 percent manufactured 
by that manufacturer for model year 2011 shall 
be alternative fueled automobiles or flexible fuel 
vehicles; and 
(D) not less than 50 percent manufactured 
by that manufacturer for model year 2012, and 
each year thereafter, shall be alternative fueled 
automobiles or flexible fuel vehicles. 
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(2) RULEMAKING.—Not later than 1 year after 
the date of enactment of this Act, the Secretary of 
Transportation shall issue regulations to carry out 
this subsection. 
(c) ALTERNATIVE FUEL RETAIL OUTLETS.— 
(1) REQUIREMENT.—Beginning in the first 
year in which 10 percent or more of the registered 
vehicles in a county are capable of using an alter-
native fuel, each retail motor fuel outlet in that 
county with 10 or more vehicle fuel pumps shall 
offer such alternative fuel at not less than 10 per-
cent of such pumps. 
(2) CREDITS.—A retail motor fuel outlet shall 
be in compliance with the requirement under para-
graph (1) if a sufficient number of credits have been 
purchased for it from another retail motor fuel out-
let that operates more than the minimum required 
number of alternative fuel pumps, and is within 20 
miles of the purchasing retail motor fuel outlet. 
(3) PROJECTIONS.—Not later than July 1st of 
each year, the Secretary of Energy shall— 
(A) identify the counties in which at least 
10 percent of the registered vehicles are ex-
pected to be capable of using a designated alter-
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native fuel within the following 18-month pe-
riod; 
(B) notify owners and operators of retail 
motor fuel outlets in the counties identified 
under subparagraph (A) of the alternative fuel 
pump requirement under this subsection; and 
(C) grant counties an exemption to the re-
quirement in paragraph (1) if they demonstrate 
to the Secretary that there is not an adequate 
alternative fuel supply to meet the requirement. 
(4) RULEMAKING.—The Secretary of Energy 
shall issue regulations to carry out this subsection. 
TITLE III—FUEL EFFICIENCY 
SEC. 301. OIL SAVINGS STUDIES. 
(a) IN GENERAL.—The Secretary of Transportation 
shall develop and implement pilot projects the purpose of 
which is to reduce vehicle miles traveled. 
(b) HIGHWAY CONGESTION TOLLING EVALUATION 
STUDY.—The Secretary shall carry out evaluation projects 
in no less than 6 metropolitan areas selected by the Sec-
retary to determine how technology can best be applied 
to assess mileage-based road user charges on major high-
ways at peak-commuting times for the purposes of— 
(1) reducing oil usage; 
(2) lessening highway congestion; and 
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(3) expanding travel alternatives. 
(c) PARKING CASH-OUT EVALUATION PROJECT.— 
(1) IN
GENERAL.—The Secretary shall carry 
out a national evaluation pilot project to assess how 
offering commuters the option to receive the cash 
value of their workplace parking place, if any, in-
stead of free parking can— 
(A) reduce oil usage; 
(B) lessen highway congestion; and 
(C) expand travel alternatives. 
(2) EMPLOYER
REQUIREMENT.—Under the 
evaluation pilot project, any employer that is partici-
pating in the pilot project and offers free-of-charge 
commuter parking to the employees of the employer 
must also offer a cashout alternative to employees. 
(d) REPORT.—The Secretary shall submit to Con-
gress every 2 years after the date of the enactment of this 
Act, a report on the progress and results of pilot projects 
under this section. The report shall provide an analysis 
and summary of project implementation, changes in oil 
usage and travel demand, and other matters as deemed 
appropriate by the Secretary. 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out subsection 
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(b) $4,000,000, and to carry out subsection (c) 
$4,000,000, for each of fiscal years 2007 through 2016. 
SEC. 302. INSURANCE SAVINGS INCENTIVE PROGRAM. 
(a) PER-MILE INSURANCE.—The Secretary of Trans-
portation shall establish a program to provide incentives 
to insurance providers to sell automobile insurance policies 
on a per-mile basis. 
(b) INCENTIVES.— 
(1) START-UP COSTS.—Under the program, the 
Secretary of Transportation shall assist automobile 
insurance providers with the development and start-
up costs necessary to offer customers of such pro-
viders the option of purchasing automobile insurance 
at a per-mile-driven rate. 
(2) PER-MILE COMPENSATION.—Under the pro-
gram, the Secretary of Transportation shall com-
pensate an insurance provider at the rate of one cent 
per mile driven by each passenger vehicle for which 
the insurance premiums are determined by the in-
surance provider to be the multiplicative product of 
a per-mile-driven rate and a variable number of 
miles driven. Such per-mile-driven rate may reflect 
both traditional underwriting factors and the cov-
erages selected. An insurance provider may only re-
ceive incentive payments for an insurance policy 
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under this section if the per-mile-driven premium 
charges on such policy apply to all vehicles of a 
household insured by such provider and account for 
at least 70 percent of the total premium charge for 
liability and collision coverages of each vehicle in-
sured by such provider. 
(c) AUTHORIZATION OF APPROPRIATIONS.— 
(1) ADMINISTRATIVE COSTS.—There is author-
ized to be appropriated for the administrative costs 
of the program established under subsection (a) 
$10,000,000. 
(2) START-UP COSTS.—There is authorized to 
be appropriated to fund start-up costs under sub-
section (b)(1) $20,000,000. 
(3) PER-MILE
COMPENSATION.—There is au-
thorized to be appropriated to fund incentives under 
subsection (b)(2) $220,000,000. 
(4) AVAILABILITY.—Funds appropriated under 
this subsection shall remain available until expended. 
SEC. 303. TRANSIT-ORIENTED DEVELOPMENT CORRIDORS. 
(a) DEFINITIONS.—In this section the following defi-
nitions apply: 
(1) DEFINITIONS
FROM
TITLE
49, UNITED 
STATES CODE.—The terms ‘‘capital project’’, ‘‘local 
governmental authority’’, ‘‘mass transportation’’, 
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