I 
109TH CONGRESS 
2D SESSION 
H. R. 6223 
To promote the national security and stability of the economy of the United 
States by reducing the dependence of the United States on oil through 
the use of alternative fuels and new technology, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 27, 2006 
Mr. VISCLOSKY 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, Transportation and Infrastructure, Armed Services, 
and Government Reform, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned 
A BILL 
To promote the national security and stability of the economy 
of the United States by reducing the dependence of the 
United States on oil through the use of alternative fuels 
and new technology, and for other purposes. 
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 ‘‘American Fuels Act 
of 2006’’. 
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SEC. 2. OFFICE OF ENERGY SECURITY. 
(a) DEFINITIONS.—In this section: 
(1) DIRECTOR.—The term ‘‘Director’’ means 
the Director of Energy Security appointed under 
subsection (c)(1). 
(2) OFFICE.—The term ‘‘Office’’ means the Of-
fice of Energy Security established by subsection 
(b). 
(b) ESTABLISHMENT.—There is established in the 
Executive Office of the President the Office of Energy Se-
curity. 
(c) DIRECTOR.— 
(1) IN GENERAL.—The Office shall be headed 
by a Director, who shall be appointed by the Presi-
dent, by and with the advice and consent of the Sen-
ate. 
(2) RATE OF PAY.—The Director shall be paid 
at a rate of pay equal to level I of the Executive 
Schedule under section 5312 of title 5, United 
States Code. 
(d) RESPONSIBILITIES.— 
(1) IN GENERAL.—The Office, acting through 
the Director, shall be responsible for overseeing all 
Federal energy security programs, including the co-
ordination of efforts of Federal agencies to assist the 
United States in achieving full energy independence. 
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(2) SPECIFIC RESPONSIBILITIES.—In carrying 
out paragraph (1), the Director shall— 
(A) serve as head of the energy commu-
nity; 
(B) act as the principal advisor to the 
President, the National Security Council, the 
National Economic Council, the Domestic Pol-
icy Council, and the Homeland Security Council 
with respect to intelligence matters relating to 
energy security; 
(C) with respect to budget requests and 
appropriations for Federal programs relating to 
energy security— 
(i) consult with the President and the 
Director of the Office of Management and 
Budget with respect to each major Federal 
budgetary decision relating to energy secu-
rity of the United States; 
(ii) based on priorities established by 
the President, provide to the heads of de-
partments containing agencies or organiza-
tions within the energy community, and to 
the heads of such agencies and organiza-
tions, guidance for use in developing the 
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budget for Federal programs relating to 
energy security; 
(iii) based on budget proposals pro-
vided to the Director by the heads of agen-
cies and organizations described in clause 
(ii), develop and determine an annual con-
solidated budget for Federal programs re-
lating to energy security; and 
(iv) present the consolidated budget, 
together with any recommendations of the 
Director and any heads of agencies and or-
ganizations described in clause (ii), to the 
President for approval; 
(D) establish and meet regularly with a 
council of business and labor leaders to develop 
and provide to the President and Congress rec-
ommendations relating to the impact of energy 
supply and prices on economic growth; 
(E) submit to Congress an annual report 
that describes the progress of the United States 
toward the goal of achieving full energy inde-
pendence; and 
(F) carry out such other responsibilities as 
the President may assign. 
(e) STAFF.— 
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(1) IN GENERAL.—The Director may, without 
regard to the civil service laws (including regula-
tions), appoint and terminate such personnel as are 
necessary to enable the Director to carry out the re-
sponsibilities of the Director under this section. 
(2) COMPENSATION.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the Director may fix the 
compensation of personnel without regard to 
the provisions of chapter 51 and subchapter III 
of chapter 53 of title 5, United States Code, re-
lating to classification of positions and General 
Schedule pay rates. 
(B) MAXIMUM RATE OF PAY.—The rate of 
pay for the personnel appointed by the Director 
shall not exceed the rate payable for level V of 
the Executive Schedule under section 5316 of 
title 5, United States Code. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
SEC. 3. CREDIT FOR PRODUCTION OF QUALIFIED FLEXIBLE 
FUEL MOTOR VEHICLES. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45N. PRODUCTION OF QUALIFIED FLEXIBLE FUEL 
MOTOR VEHICLES. 
‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec-
tion 38, the qualified flexible fuel motor vehicle production 
credit determined under this section for any taxable year 
is an amount equal to $100 for each qualified flexible fuel 
motor vehicle produced in the United States by the manu-
facturer during the taxable year. 
‘‘(b) QUALIFIED FLEXIBLE FUEL MOTOR VEHI-
CLE.—For purposes of this section, the term ‘qualified 
flexible fuel motor vehicle’ means a flexible fuel motor ve-
hicle— 
‘‘(1) the production of which is not required for 
the manufacturer to meet— 
‘‘(A) the maximum credit allowable for ve-
hicles described in paragraph (2) in determining 
the fleet average fuel economy requirements (as 
determined under section 32904 of title 49, 
United States Code) of the manufacturer for 
the model year ending in the taxable year, or 
‘‘(B) the requirements of any other provi-
sion of Federal law, and 
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‘‘(2) which is designed so that the vehicle is 
propelled by an engine which can use as a fuel a 
gasoline mixture of which 85 percent (or another 
percentage of not less than 70 percent, as the Sec-
retary may determine, by rule, to provide for re-
quirements relating to cold start, safety, or vehicle 
functions) of the volume of consists of ethanol. 
‘‘(c) OTHER DEFINITIONS AND SPECIAL RULES.— 
For purposes of this section— 
‘‘(1) MOTOR VEHICLE.—The term ‘motor vehi-
cle’ has the meaning given such term by section 
30(c)(2). 
‘‘(2) MANUFACTURER.—The term ‘manufac-
turer’ has the meaning given such term in regula-
tions prescribed by the Administrator of the Envi-
ronmental Protection Agency for purposes of the ad-
ministration of title II of the Clean Air Act (42 
U.S.C. 7521 et seq.). 
‘‘(3) REDUCTION IN BASIS.—For purposes of 
this subtitle, if a credit is allowed under this section 
for any expenditure with respect to any property, the 
increase in the basis of such property which would 
(but for this paragraph) result from such expendi-
ture shall be reduced by the amount of the credit so 
allowed. 
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‘‘(4) NO
DOUBLE
BENEFIT.—The amount of 
any deduction or credit allowable under this chapter 
(other than the credits allowable under this section 
and section 30B) shall be reduced by the amount of 
credit allowed under subsection (a) for such vehicle 
for the taxable year. 
‘‘(5) ELECTION
NOT
TO
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
vehicle if the taxpayer elects to not have this section 
apply to such vehicle. 
‘‘(6) TERMINATION.—This section shall not 
apply to any vehicle produced after December 31, 
2010. 
‘‘(7) CROSS REFERENCE.—For an election to 
claim certain minimum tax credits in lieu of the 
credit determined under this section, see section 
53(e).’’. 
(b) CREDIT ALLOWED AGAINST THE ALTERNATIVE 
MINIMUM TAX.—Section 38(c)(4)(B) of the Internal Rev-
enue Code of 1986 (defining specified credits) is amended 
by striking ‘‘and’’ at the end of clause (i), by striking the 
period at the end of clause (ii)(II) and inserting ‘‘, and’’, 
and by adding at the end the following new clause: 
‘‘(iii) the credit determined under sec-
tion 45N.’’. 
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(c) ELECTION TO USE ADDITIONAL AMT CREDIT.— 
Section 53 of the Internal Revenue Code of 1986 (relating 
to credit for prior year minimum tax liability) is amended 
by adding at the end the following new subsection: 
‘‘(e) ADDITIONAL CREDIT IN LIEU OF FLEXIBLE 
FUEL MOTOR VEHICLE CREDIT.— 
‘‘(1) IN GENERAL.—In the case of a taxpayer 
making an election under this subsection for a tax-
able year, the amount otherwise determined under 
subsection (c) shall be increased by any amount of 
the credit determined under section 45N for such 
taxable year which the taxpayer elects not to claim 
pursuant to such election. 
‘‘(2) ELECTION.—A taxpayer may make an 
election for any taxable year not to claim any 
amount of the credit allowable under section 45N 
with respect to property produced by the taxpayer 
during such taxable year. An election under this sub-
section may only be revoked with the consent of the 
Secretary. 
‘‘(3) CREDIT REFUNDABLE.—The aggregate in-
crease in the credit allowed by this section for any 
taxable year by reason of this subsection shall for 
purposes of this title (other than subsection (b)(2) 
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of this section) be treated as a credit allowed to the 
taxpayer under subpart C.’’. 
(d) CONFORMING AMENDMENTS.—Section 38(b) of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘and’’ at the end of paragraph (29), by striking the period 
at the end of paragraph (30) and inserting a comma, and 
by adding at the end the following new paragraph: 
‘‘(31) the qualified flexible fuel motor vehicle 
production credit determined under section 45N, 
plus’’. 
(e) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by add-
ing at the end the following new item: 
‘‘Sec. 45N. Production of qualified flexible fuel motor vehicles.’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to motor vehicles produced in 
model years ending after the date of the enactment of this 
Act. 
SEC. 4. INCENTIVES FOR THE RETAIL SALE OF ALTER-
NATIVE FUELS AS MOTOR VEHICLE FUEL. 
(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 
inserting after section 40A the following new section: 
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‘‘SEC. 40B. CREDIT FOR RETAIL SALE OF ALTERNATIVE 
FUELS AS MOTOR VEHICLE FUEL. 
‘‘(a) GENERAL RULE.—The alternative fuel retail 
sales credit for any taxable year is the applicable amount 
for each gallon of alternative fuel sold at retail by the tax-
payer during such year. 
‘‘(b) APPLICABLE AMOUNT.—For purposes of this 
section, the applicable amount shall be determined in ac-
cordance with the following table: 
‘‘In the case of 
The applicable amount 
any sale: 
for each gallon is: 
Before 2009 ...................................
35 cents
During 2009 or 2010 ....................
20 cents
During 2011 ..................................
10 cents. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) ALTERNATIVE
FUEL.—The term ‘alter-
native fuel’ means any fuel at least 85 percent (or 
another percentage of not less than 70 percent, as 
the Secretary may determine, by rule, to provide for 
requirements relating to cold start, safety, or vehicle 
functions) of the volume of which consists of eth-
anol. 
‘‘(2) SOLD AT RETAIL.— 
‘‘(A) IN GENERAL.—The term ‘sold at re-
tail’ means the sale, for a purpose other than 
resale, after manufacture, production, or impor-
tation. 
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‘‘(B) USE TREATED AS SALE.—If any per-
son uses alternative fuel (including any use 
after importation) as a fuel to propel any quali-
fied alternative fuel motor vehicle (as defined in 
this section) before such fuel is sold at retail, 
then such use shall be treated in the same man-
ner as if such fuel were sold at retail as a fuel 
to propel such a vehicle by such person. 
‘‘(3) QUALIFIED
ALTERNATIVE
FUEL
MOTOR 
VEHICLE.—The term ‘new qualified alternative fuel 
motor vehicle’ means any motor vehicle— 
‘‘(A) which is capable of operating on an 
alternative fuel, 
‘‘(B) the original use of which commences 
with the taxpayer, 
‘‘(C) which is acquired by the taxpayer for 
use or lease, but not for resale, and 
‘‘(D) which is made by a manufacturer. 
‘‘(d) ELECTION TO PASS CREDIT.—A person which 
sells alternative fuel at retail may elect to pass the credit 
allowable under this section to the purchaser of such fuel 
or, in the event the purchaser is a tax-exempt entity or 
otherwise declines to accept such credit, to the person 
which supplied such fuel, under rules established by the 
Secretary. 
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‘‘(e) PASS-THRU IN THE CASE OF ESTATES AND 
TRUSTS.—Under regulations prescribed by the Secretary, 
rules similar to the rules of subsection (d) of section 52 
shall apply. 
‘‘(f) TERMINATION.—This section shall not apply to 
any fuel sold at retail after December 31, 2011.’’. 
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) of the Internal Revenue Code of 1986 (relating 
to current year business credit) (as amended by section 
3(d)) is amended by adding at the end the following new 
paragraph: 
‘‘(32) the alternative fuel retail sales credit de-
termined under section 40B(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by in-
serting after the item relating to section 40A the following 
new item: 
‘‘Sec. 40B. Credit for retail sale of alternative fuels as motor vehicle fuel.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to fuel sold at retail after the date 
of enactment of this Act, in taxable years ending after 
such date. 
SEC. 5. ALTERNATIVE DIESEL FUEL CONTENT OF DIESEL. 
(a) FINDINGS.—Congress finds that— 
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(1) section 211(o) of the Clean Air Act (42 
U.S.C. 7545(o)) (as amended by section 1501 of the 
Energy Policy Act of 2005 (Public Law 109–58)) 
established a renewable fuel program under which 
entities in the petroleum sector are required to blend 
renewable fuels into motor vehicle fuel based on the 
gasoline motor pool; 
(2) the need for energy diversification is greater 
as of the date of enactment of this Act than it was 
only months before the date of enactment of the En-
ergy Policy Act of 2005 (Public Law 109–58); and 
(3)(A) the renewable fuel program under sec-
tion 211(o) of the Clean Air Act requires a small 
percentage of the gasoline motor pool, totaling near-
ly 140,000,000,000 gallons, to contain a renewable 
fuel; and 
(B) the small percentage requirement described 
in 
subparagraph 
(A) 
does 
not 
include 
the 
40,000,000,000-gallon diesel motor pool. 
(b) ALTERNATIVE DIESEL FUEL PROGRAM FOR DIE-
SEL MOTOR POOL.—Section 211 of the Clean Air Act (42 
U.S.C. 7545) is amended by inserting after subsection (o) 
the following: 
‘‘(p) ALTERNATIVE DIESEL FUEL PROGRAM
FOR 
DIESEL MOTOR POOL.— 
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‘‘(1) DEFINITION
OF
ALTERNATIVE
DIESEL 
FUEL.—In this subsection: 
‘‘(A) IN GENERAL.—The term ‘alternative 
diesel fuel’ means biodiesel (as defined in sec-
tion 312(f) of the Energy Policy Act of 1992 
(42 U.S.C. 13220(f))) and any blending compo-
nents derived from alternative diesel fuel (pro-
vided that only the alternative diesel fuel por-
tion of any such blending component shall be 
considered to be part of the applicable volume 
under the alternative diesel fuel program estab-
lished by this subsection). 
‘‘(B) INCLUSIONS.—The term ‘alternative 
diesel fuel’ includes a diesel fuel substitute pro-
duced from— 
‘‘(i) animal fat; 
‘‘(ii) vegetable oil; 
‘‘(iii) recycled yellow grease; 
‘‘(iv) thermal depolymerization; 
‘‘(v) thermochemical conversion; 
‘‘(vi) the coal-to-liquid process (includ-
ing the Fischer-Tropsch process); or 
‘‘(vii) a diesel-ethanol blend of not less 
than 7 percent ethanol. 
‘‘(2) ALTERNATIVE DIESEL FUEL PROGRAM.— 
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‘‘(A) REGULATIONS.— 
‘‘(i) IN GENERAL.—Not later than 1 
year after the date of enactment of this 
subsection, the Administrator shall promul-
gate regulations to ensure that diesel sold 
or introduced into commerce in the United 
States (except in noncontiguous States or 
territories), on an annual average basis, 
contains the applicable volume of alter-
native diesel fuel determined in accordance 
with subparagraph (B). 
‘‘(ii) PROVISIONS OF REGULATIONS.— 
Regardless of the date of promulgation, 
the regulations promulgated under clause 
(i)— 
‘‘(I) shall contain compliance pro-
visions applicable to refineries, blend-
ers, distributors, and importers, as 
appropriate, to ensure that the re-
quirements of this paragraph are met; 
but 
‘‘(II) shall not— 
‘‘(aa) 
restrict 
geographic 
areas in which alternative diesel 
fuel may be used; or 
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‘‘(bb) impose any per-gallon 
obligation for the use of alter-
native diesel fuel. 
‘‘(iii) REQUIREMENT
IN
CASE
OF 
FAILURE
TO
PROMULGATE
REGULA-
TIONS.—If the Administrator fails to pro-
mulgate regulations under clause (i), the 
percentage of alternative diesel fuel in the 
diesel motor pool sold or dispensed to con-
sumers in the United States, on a volume 
basis, shall be 0.6 percent for calendar 
year 2008. 
‘‘(B) APPLICABLE VOLUME.— 
‘‘(i) CALENDAR YEARS 2008 THROUGH 
2015.—For the purpose of subparagraph 
(A), the applicable volume for any of cal-
endar years 2008 through 2015 shall be 
determined in accordance with the fol-
lowing table: 
‘‘Applicable volume of alternative 
diesel fuel in diesel motor pool 
(in millions of gallons): 
Calendar year: 
250 .....................................................................................................
2008
500 .....................................................................................................
2009
750 .....................................................................................................
2010
1,000 ..................................................................................................
2011
1,250 ..................................................................................................
2012
1,500 ..................................................................................................
2013
1,750 ..................................................................................................
2014
2,000 ..................................................................................................
2015. 
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‘‘(ii) CALENDAR
YEAR
2016
AND 
THEREAFTER.—Subject to clause (iii), for 
the purpose of subparagraph (A), the ap-
plicable volume for calendar year 2016 and 
each calendar year thereafter shall be de-
termined by the Administrator, in coordi-
nation with the Secretary of Agriculture 
and the Secretary of Energy, based on a 
review of the implementation of the pro-
gram during calendar years 2008 through 
2015, including a review of— 
‘‘(I) the impact of the use of al-
ternative diesel fuels on the environ-
ment, air quality, energy security, job 
creation, and rural economic develop-
ment; and 
‘‘(II) the expected annual rate of 
future production of alternative diesel 
fuels to be used as a blend component 
or replacement to the diesel motor 
pool. 
‘‘(iii) MINIMUM
APPLICABLE
VOL-
UME.—For the purpose of subparagraph 
(A), the applicable volume for calendar 
year 2016 and each calendar year there-
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after shall be equal to the product obtained 
by multiplying— 
‘‘(I) the number of gallons of die-
sel that the Administrator estimates 
will be sold or introduced into com-
merce during the calendar year; and 
‘‘(II) the ratio that— 
‘‘(aa) 2,000,000,000 gallons 
of alternative diesel fuel; bears to 
‘‘(bb) the number of gallons 
of diesel sold or introduced into 
commerce during calendar year 
2015. 
‘‘(3) APPLICABLE PERCENTAGES.— 
‘‘(A) PROVISION
OF
ESTIMATE
OF
VOL-
UMES OF DIESEL SALES.—Not later than Octo-
ber 31 of each of calendar years 2007 through 
2015, the Administrator of the Energy Infor-
mation Administration shall provide to the Ad-
ministrator an estimate, with respect to the fol-
lowing calendar year, of the volumes of diesel 
projected to be sold or introduced into com-
merce in the United States. 
‘‘(B) DETERMINATION
OF
APPLICABLE 
PERCENTAGES.— 
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‘‘(i) IN
GENERAL.—Not later than 
November 30 of each of calendar years 
2008 through 2015, based on the estimate 
provided under subparagraph (A), the Ad-
ministrator shall determine and publish in 
the Federal Register, with respect to the 
following calendar year, the alternative die-
sel fuel obligation that ensures that the re-
quirements of paragraph (2) are met. 
‘‘(ii) REQUIRED ELEMENTS.—The al-
ternative diesel fuel obligation determined 
for a calendar year under clause (i) shall— 
‘‘(I) be applicable to refineries, 
blenders, and importers, as appro-
priate; 
‘‘(II) be expressed in terms of a 
volume percentage of diesel sold or in-
troduced into commerce in the United 
States; and 
‘‘(III) subject to subparagraph 
(C), consist of a single applicable per-
centage that applies to all categories 
of persons described in subclause (I). 
‘‘(C) ADJUSTMENTS.—In determining the 
applicable percentage for a calendar year, the 
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Administrator shall make adjustments to pre-
vent the imposition of redundant obligations on 
any 
person 
described 
in 
subparagraph 
(B)(ii)(I). 
‘‘(4) CREDIT PROGRAM.— 
‘‘(A) IN GENERAL.—The regulations pro-
mulgated pursuant to paragraph (2)(A) shall 
provide for the generation of an appropriate 
amount of credits by any person that refines, 
blends, or imports diesel that contains a quan-
tity of alternative diesel fuel that is greater 
than the quantity required under paragraph 
(2). 
‘‘(B) USE
OF
CREDITS.—A person that 
generates a credit under subparagraph (A) may 
use the credit, or transfer all or a portion of the 
credit to another person, for the purpose of 
complying with regulations promulgated pursu-
ant to paragraph (2). 
‘‘(C) DURATION
OF
CREDITS.—A credit 
generated under this paragraph shall be valid 
during the 1-year period beginning on the date 
on which the credit is generated. 
‘‘(D) INABILITY
TO
GENERATE
OR
PUR-
CHASE SUFFICIENT CREDITS.—The regulations 
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promulgated pursuant to paragraph (2)(A) 
shall include provisions allowing any person 
that is unable to generate or purchase sufficient 
credits under subparagraph (A) to meet the re-
quirements of paragraph (2) by carrying for-
ward a credit generated during a previous year 
on the condition that the person, during the cal-
endar year following the year in which the al-
ternative diesel fuel deficit is created— 
‘‘(i) achieves compliance with the al-
ternative diesel fuel requirement under 
paragraph (2); and 
‘‘(ii) generates or purchases additional 
credits under subparagraph (A) to offset 
the deficit of the previous year. 
‘‘(5) WAIVERS.— 
‘‘(A) IN GENERAL.—The Administrator, in 
consultation with the Secretary of Agriculture 
and the Secretary of Energy, may waive the re-
quirements of paragraph (2) in whole or in part 
on receipt of a petition of 1 or more States by 
reducing the national quantity of alternative 
diesel fuel for the diesel motor pool required 
under paragraph (2) based on a determination 
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by the Administrator, after public notice and 
opportunity for comment, that— 
‘‘(i) implementation of the require-
ment would severely harm the economy or 
environment of a State, a region, or the 
United States; or 
‘‘(ii) there is an inadequate domestic 
supply of alternative diesel fuel. 
‘‘(B) PETITIONS FOR WAIVERS.—Not later 
than 90 days after the date on which the Ad-
ministrator receives a petition under subpara-
graph (A), the Administrator, in consultation 
with the Secretary of Agriculture and the Sec-
retary of Energy, shall approve or disapprove 
the petition. 
‘‘(C) TERMINATION OF WAIVERS.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), a waiver under sub-
paragraph (A) shall terminate on the date 
that is 1 year after the date on which the 
waiver is provided. 
‘‘(ii) 
EXCEPTION.—The 
Adminis-
trator, in consultation with the Secretary 
of Agriculture and the Secretary of En-
ergy, may extend a waiver under subpara-
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graph (A), as the Administrator deter-
mines to be appropriate.’’. 
(c) 
PENALTIES
AND
ENFORCEMENT.—Section 
211(d) of the Clean Air Act (42 U.S.C. 7545(d)) is 
amended— 
(1) in paragraph (1), by striking ‘‘or (o)’’ each 
place it appears and inserting ‘‘(o), or (p)’’; and 
(2) in paragraph (2), by striking ‘‘and (o)’’ 
each place it appears and inserting ‘‘(o), and (p)’’. 
(d) TECHNICAL AMENDMENTS.—Section 211 of the 
Clean Air Act (42 U.S.C. 7545) is amended— 
(1) in subsection (i)(4), by striking ‘‘section 
324’’ each place it appears and inserting ‘‘section 
325’’; 
(2) in subsection (k)(10), by indenting subpara-
graphs (E) and (F) appropriately; 
(3) in subsection (n), by striking ‘‘section 
219(2)’’ and inserting ‘‘section 216(2)’’; 
(4) by redesignating the second subsection (r) 
and subsection (s) as subsections (s) and (t), respec-
tively; and 
(5) in subsection (t)(1) (as redesignated by 
paragraph (4)), by striking ‘‘this subtitle’’ and in-
serting ‘‘this part’’. 
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SEC. 6. EXCISE TAX CREDIT FOR CELLULOSIC BIOMASS 
ETHANOL. 
(a) IN GENERAL.—Paragraph (2) of section 6426(b) 
of the Internal Revenue Code of 1986 (relating to alcohol 
fuel mixture credit) is amended by adding at the end the 
following new subparagraph: 
‘‘(C) CELLULOSIC BIOMASS ETHANOL.—In 
the case of an alcohol fuel mixture consisting of 
cellulosic biomass ethanol (as defined in section 
211(o)(1)(A) of the Clean Air Act), the applica-
ble amount is equal to the product of— 
‘‘(i) the amount specified in subpara-
graph (A), times 
‘‘(ii) the equivalent number of gallons 
of renewable fuel specified in section 
211(o)(4) of such Act.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
6426(b)(2)(A) of such Code is amended by striking ‘‘sub-
paragraph (B)’’ and inserting ‘‘subparagraphs (B) and 
(C)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to fuel sold or used after the date 
of the enactment of this Act. 
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SEC. 7. INCENTIVE FOR FEDERAL AND STATE FLEETS FOR 
MEDIUM AND HEAVY DUTY HYBRIDS. 
Section 301 of the Energy Policy Act of 1992 (42 
U.S.C. 13211) is amended— 
(1) in paragraph (3), by striking ‘‘or a dual 
fueled vehicle’’ and inserting ‘‘, a dual fueled vehicle, 
or a medium or heavy duty vehicle that is a hybrid 
vehicle’’; 
(2) by redesignating paragraphs (11), (12), 
(13), and (14) as paragraphs (12), (14), (15), and 
(16), respectively; 
(3) by inserting after paragraph (10) the fol-
lowing: 
‘‘(11) the term ‘hybrid vehicle’ means a vehicle 
powered both by a diesel or gasoline engine and an 
electric motor that is recharged as the vehicle oper-
ates;’’; and 
(4) by inserting after paragraph (12) (as redes-
ignated by paragraph (2)) the following: 
‘‘(13) the term ‘medium or heavy duty vehicle’ 
means a vehicle that— 
‘‘(A) in the case of a medium duty vehicle, 
has a gross vehicle weight rating of more than 
8,500 pounds but not more than 14,000 
pounds; and 
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‘‘(B) in the case of a heavy duty vehicle, 
has a gross vehicle weight rating of more than 
14,000 pounds;’’. 
SEC. 8. PUBLIC ACCESS TO FEDERAL ALTERNATIVE RE-
FUELING STATIONS. 
(a) DEFINITIONS.—In this section: 
(1) ALTERNATIVE
FUEL
REFUELING
STA-
TION.—The term ‘‘alternative fuel refueling station’’ 
has the meaning given the term ‘‘qualified alter-
native fuel vehicle refueling property’’ in section 
30C(c)(1) of the Internal Revenue Code of 1986. 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy. 
(b) ACCESS TO FEDERAL ALTERNATIVE REFUELING 
STATIONS.—Not later than 18 months after the date of 
enactment of this Act— 
(1) except as provided in subsection (d)(1), any 
Federal property that includes at least 1 fuel refuel-
ing station shall include at least 1 alternative fuel 
refueling station; and 
(2) except as provided in subsection (d)(2), any 
alternative fuel refueling station located on property 
owned by the Federal government shall permit full 
public access for the purpose of refueling using al-
ternative fuel. 
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(c) DURATION.—The requirements described in sub-
section (b) shall remain in effect until the sooner of— 
(1) the date that is 7 years after the date of en-
actment of this Act; or 
(2) the date on which the Secretary determines 
that not less than 5 percent of the commercial re-
fueling infrastructure in the United States offers al-
ternative fuels to the general public. 
(d) EXCEPTIONS.— 
(1) WAIVER.—Subsection (b)(1) shall not apply 
to any Federal property under the jurisdiction of a 
Federal agency if the Secretary determines that al-
ternative fuel is not reasonably available to retail 
purchasers of the fuel, as certified by the head of 
the agency to the Secretary. 
(2) NATIONAL
SECURITY
EXEMPTION.—Sub-
section (b)(2) does not apply to property of the Fed-
eral government that the Secretary, in consultation 
with the Secretary of Defense, has certified must be 
exempt for national security reasons. 
(e) VERIFICATION OF COMPLIANCE.—The Secretary 
shall— 
(1) monitor compliance with this section by all 
Federal agencies; and 
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(2) annually submit to Congress a report de-
scribing the extent of compliance with this section. 
SEC. 9. PURCHASE OF CLEAN FUEL BUSES. 
(a) IN GENERAL.—Chapter 53 of title 49, United 
States Code, is amended by inserting after section 5325 
the following: 
‘‘§ 5326. Purchase of clean fuel buses 
‘‘(a) DEFINITION OF CLEAN FUEL BUS.—In this sec-
tion, the term ‘clean fuel bus’ means a vehicle that— 
‘‘(1) is capable of being powered by— 
‘‘(A) compressed natural gas; 
‘‘(B) liquefied natural gas; 
‘‘(C) 1 or more batteries; 
‘‘(D) a fuel that is composed of at least 85 
percent ethanol (or another percentage of not 
less than 70 percent, as the Secretary may de-
termine, by rule, to provide for requirements re-
lating to cold start, safety, or vehicle functions); 
‘‘(E) electricity (including a hybrid electric 
or plug-in hybrid electric vehicle); 
‘‘(F) a fuel cell; or 
‘‘(G) ultra-low sulfur diesel; and 
‘‘(2) has been certified by the Administrator of 
the Environmental Protection Agency to signifi-
cantly reduce harmful emissions, particularly in a 
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nonattainment area (as defined in section 171 of the 
Clean Air Act (42 U.S.C. 7501)). 
‘‘(b) PURCHASE OF BUSES.—A bus purchased using 
funds made available from the Mass Transit Account of 
the Highway Trust Fund shall be a clean fuel bus.’’. 
(b) CONFORMING AMENDMENT.—The analysis for 
such chapter 53 is amended by inserting after the item 
relating to section 5325 the following: 
‘‘5326. Purchase of clean fuel buses.’’. 
SEC. 10. DOMESTIC FUELS INFRASTRUCTURE FOR THE DE-
PARTMENT OF DEFENSE. 
(a) PROGRAM REQUIRED.—The Secretary of Defense 
shall carry out a program to evaluate the commercial and 
technical viability of advanced technologies for the produc-
tion of alternative transportation fuels having applications 
for the Department of Defense. The program shall include 
the construction and operation of testing facilities in ac-
cordance with subsection (d). 
(b) ALTERNATIVE TRANSPORTATION FUELS DE-
FINED.—For purposes of this section, the term ‘‘alter-
native transportation fuels’’ means— 
(1) denatured ethanol and other alcohols; 
(2) mixtures containing at least 85 percent (or 
another percentage of not less than 70 percent, as 
the Secretary may determine, by rule, to provide for 
requirements relating to cold start, safety, or vehicle 
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functions) by volume of denatured ethanol, particu-
larly ethanols derived from cellulosic biomass (or 
such other percentage greater than or equal to 70 
percent, as determined by the Secretary, by rule, to 
provide for requirements relating to cold start, safe-
ty, or vehicle functions); 
(3) coal-derived liquid fuels, including Fischer- 
Tropsch fuels; 
(4) fuels (other than alcohol) derived from bio-
logical materials, including fuels derived from vege-
table oils, animal fats, thermal depolymerization, or 
thermalchemical conversion; and 
(5) any other fuel the Secretary determines, by 
regulation, is substantially not petroleum and would 
yield substantial energy security benefits and sub-
stantial environmental benefits. 
(c) COORDINATION OF EFFORTS.— 
(1) IN
GENERAL.—The Secretary of Defense 
shall carry out the program required by this section 
through the Under Secretary of Defense for Acquisi-
tion, Technology, and Logistics and in consultation 
with the Director of Defense Research and Engi-
neering, the Advanced Systems and Concepts Office, 
the Secretary of Agriculture, and the Secretary of 
Energy. 
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(2) ROLE OF BIOMASS RESEARCH AND DEVEL-
OPMENT
TECHNOLOGIC
ADVISORY
COMMITTEE.— 
The consultations under paragraph (1) shall include 
the participation of the Biomass Research and De-
velopment Technical Advisory Committee established 
under section 306 of the Biomass Research and De-
velopment Act of 2000 (title III of Public Law 106– 
224; 7 U.S.C. 8101 note). 
(d) FACILITIES FOR EVALUATING PRODUCTION OF 
ALTERNATIVE TRANSPORTATION FUELS.— 
(1) IN GENERAL.—In carrying out the program 
required by this section, the Secretary of Defense 
shall provide for the construction or capital modi-
fication of— 
(A) not more than 3 facilities for the pur-
poses of evaluating the production from cel-
lulosic biomass of alternative transportation 
fuels having applications for the Department of 
Defense; and 
(B) not more than 3 facilities for the pur-
poses of evaluating the production from coal of 
alternative transportation fuels having applica-
tions for the Department of Defense, with not 
less than one of such facilities utilizing coal re-
sources with a ranking by the American Society 
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for Testing and Materials of high volatile bitu-
minous B and C. 
(2) LOCATION
OF
FACILITIES.—The facilities 
constructed under paragraph (1) for the purposes of 
cellulosic biomass shall— 
(A) afford the efficient use of a diverse 
range of fuel sources; and 
(B) give initial preference to existing do-
mestic facilities with current or potential capac-
ity for cellulose or coal conversion. 
(3) CAPACITY
OF
FACILITIES.—Each facility 
constructed under paragraph (1) shall have the flexi-
bility for producing commercial volumes of alter-
native transportation fuels such that when the facil-
ity demonstrates economic viability of the process it 
can provide commercial production for the region in 
which it is located. 
(4) AUTHORITY TO ENTER INTO TRANSACTIONS 
FOR
FACILITY
CONSTRUCTION.—The Secretary of 
Defense shall seek to construct the facilities required 
by paragraph (1) at the lowest cost practicable. The 
Secretary may make grants, enter into agreements, 
and provide loans or loan guarantees to corpora-
tions, cooperatives, and consortia of such entities for 
such purposes. 
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(5) EVALUATIONS
AT
FACILITIES.—Not later 
than 5 years after the date of enactment of this Act, 
the Secretary of Defense shall begin at the facilities 
described in paragraph (1) evaluations of the tech-
nical and commercial viability of different processes 
of producing alternative transportation fuels having 
Department of Defense applications from cellulosic 
biomass or coal. 
(e) PROGRAM MILESTONES.—In carrying out the 
program required by this section, the Secretary of Defense 
shall meet the following milestones: 
(1) SELECTION OF TESTING PROCESSES.—Not 
later than 180 days after the date of enactment of 
this Act, the Secretary shall select processes for 
evaluating the technical and commercial viability of 
producing alternative fuels from cellulosic biomass or 
coal. 
(2) INITIATION OF WORK AT EXISTING FACILI-
TIES.—Not later than one year after the date of en-
actment of this Act, the Secretary shall enter into 
agreements to carry out testing under this section at 
existing facilities. 
(3) CONSTRUCTION
AGREEMENTS.—Not later 
than one year after the date of enactment of this 
Act, the Secretary shall enter into agreements for 
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the capital modification or construction of facilities 
under subsection (d)(1). 
(4) COMPLETION OF ENGINEERING AND DESIGN 
WORK.—Not later than three years after the date of 
enactment of this Act, the Secretary shall complete 
capital modifications of existing facilities and the en-
gineering and design work necessary for the con-
struction of new facilities under this section. 
(f) REPORT
ON PROGRAM.—Not later than 18 
months after the date of enactment of this Act, and annu-
ally thereafter for the next 5 years, the Secretary of De-
fense shall, in consultation with the Under Secretary of 
Defense for Acquisition, Technology, and Logistics, sub-
mit a report on the implementation and results of the pro-
gram required by this section to— 
(1) the Committees on Armed Services, Energy 
and Natural Resources, Agriculture, and Appropria-
tions of the Senate; and 
(2) the Committees on Armed Services, Energy 
and Commerce, Agriculture, and Appropriations of 
the House of Representatives. 
(g) FUNDING.— 
(1) IN GENERAL.—Of the amounts authorized 
to be appropriated under this section, $250,000,000 
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may be available for the program required by this 
section for fiscal years 2007 through 2012. 
(2) AVAILABILITY.—Amounts available under 
paragraph (1) shall remain available until expended. 
Æ 
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