I 
109TH CONGRESS 
2D SESSION 
H. R. 5372 
To promote the increased utilization of domestically produced, renewable, 
biobased motor vehicle fuel supplies and the increased manufacture of 
flexible-fuel vehicles in the United States, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 11, 2006 
Ms. HERSETH (for herself, Mr. ETHERIDGE, Ms. PELOSI, Mr. PETERSON of 
Minnesota, Mr. DELAHUNT, Ms. KAPTUR, Mr. INSLEE, Mr. POMEROY, 
Mr. HOLDEN, Mr. FORD, Mr. SALAZAR, Mr. KIND, Ms. DELAURO, and 
Ms. MCCOLLUM of Minnesota) introduced the following bill; which was 
referred to the Committee on Energy and Commerce, and in addition to 
the Committees on Agriculture, Science, and Ways and Means, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To promote the increased utilization of domestically pro-
duced, renewable, biobased motor vehicle fuel supplies 
and the increased manufacture of flexible-fuel vehicles 
in the United States, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Bioenergy Innovation, 
Optional 
Fuel 
Utilization, 
and 
Energy 
Legacy 
(BIOFUEL) Act of 2006’’. 
SEC. 2. DEFINITIONS. 
For purposes of this Act— 
(1) the term ‘‘B–20 fuel’’ means diesel fuel con-
taining 20 percent biodiesel; 
(2) the term ‘‘dual fueled automobile’’ has the 
meaning given such term in section 32901(a)(8) of 
title 49, United States Code; 
(3) the term ‘‘E–85 fuel’’ means automotive 
fuel containing gasoline and 85 percent ethanol; and 
(4) the term ‘‘flexible-fuel vehicle’’ means a ve-
hicle capable of operating on gasoline and on any 
mixture containing gasoline and up to 85 percent 
ethanol. 
TITLE I—BIOFUELS PROGRAMS 
SEC. 101. VOLUME OF RENEWABLE FUELS. 
(a) 
RENEWABLE
FUELS
SCHEDULE.—Section 
211(o)(2)(B) of the Clean Air Act (42 U.S.C. 
7545((o)(2)(B)) is amended to read as follows: 
‘‘(B) APPLICABLE VOLUME.— 
‘‘(i) CALENDAR YEARS 2006 THROUGH 
2008.—For the purpose of subparagraph 
(A), the applicable volume for any of cal-
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endar years 2006 through 2008 shall be 
determined in accordance with the fol-
lowing table: 
Applicable volume 
of renewable fuel 
‘‘Calendar Year: 
(in billions of gallons): 
2006 .........................................................................................
4.0
2007 .........................................................................................
4.7
2008 .........................................................................................
5.4. 
‘‘(ii) CALENDAR YEARS 2009 THROUGH 
2015 AND THEREAFTER.—For the purpose 
of subparagraph (A), the applicable volume 
for any of calendar years 2009 through 
2015 and thereafter shall be determined in 
accordance with the following table where 
the applicable volume is a percentage of 
the total number of gallons of light duty 
motor vehicle fuel (other than diesel fuel) 
sold or introduced into commerce, as esti-
mated by the Administrator in cooperation 
with the Secretary of Energy: 
Applicable volume of 
‘‘Calendar year: 
renewable fuel: 
2009 .........................................................................................
6%
2010 .........................................................................................
7%
2011 .........................................................................................
9%
2012 .........................................................................................
11%
2013 .........................................................................................
14%
2014 .........................................................................................
17%
2015 and thereafter .................................................................
20%. 
‘‘(iii) MINIMUM
QUANTITY
DERIVED 
FROM
CELLULOSIC
BIOMASS.—For cal-
endar year 2009 and each calendar year 
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thereafter through 2015, the 2.5-to-1 ratio 
referred to in paragraph (4) shall not 
apply and of the applicable volume of re-
newable fuel referred to in clause (i) a por-
tion shall consist of renewable fuel created 
from cellulosic feedstocks as specified in 
the following table. The percentages in the 
table refer to a percentage of the total of 
the applicable volume of renewable fuel re-
quired under clause (ii). 
Portion of applicable 
volume consisting of 
‘‘Calendar year: 
cellulosic biomass 
2009 .........................................................................................
4%
2010 .........................................................................................
6%
2011 .........................................................................................
9%
2012 .........................................................................................
13%
2013 .........................................................................................
18%
2014 .........................................................................................
24%
2015 and thereafter .................................................................
30%’’. 
(b) BIODIESEL PROGRAM.— 
(1) BIODIESEL FUEL PROGRAM.—Section 211 
of the Clean Air Act (42 U.S.C. 7545) is amended 
by inserting after subsection (o) the following: 
‘‘(p) BIODIESEL PROGRAM.— 
‘‘(1) DEFINITION OF BIODIESEL.—In this sub-
section, the term ‘biodiesel’ means biodiesel (as de-
fined in section 312(f) of the Energy Policy Act of 
1992 (42 U.S.C. 13220(f))). 
‘‘(2) BIODIESEL 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 biodiesel 
fuel determined in accordance with sub-
paragraph (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 restrict geographic 
areas in which biodiesel fuel may be 
used or impose any per-gallon obliga-
tion for the use of biodiesel fuel. 
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‘‘(B) APPLICABLE VOLUME IN CALENDAR 
YEARS AFTER 2008.—For the purpose of sub-
paragraph (A), the applicable volume for each 
calendar year after 2008 shall be a percentage 
of the total volume of diesel fuel sold or intro-
duced into commerce in that calendar year, de-
termined in accordance with the following table: 
Applicable volume of 
biodiesel as a 
percentage of total 
‘‘Calendar year: 
diesel fuel: 
2009 .........................................................................................
1%
2010 .........................................................................................
2%
2011 .........................................................................................
3%
2012 .........................................................................................
5%
2013 .........................................................................................
7%
2014 .........................................................................................
10%
2015 and thereafter .................................................................
15%. 
‘‘(3) 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 biodiesel 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 
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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 
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 bio-
diesel fuel deficit is created— 
‘‘(i) achieves compliance with the bio-
diesel fuel requirement under paragraph 
(2); and 
‘‘(ii) generates or purchases additional 
credits under subparagraph (A) to offset 
the deficit of the previous year.’’. 
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SEC. 102. REQUIREMENT TO MANUFACTURE DUAL FUELED 
AUTOMOBILES. 
(a) REQUIREMENT.— 
(1) IN
GENERAL.—Chapter 329 of title 49, 
United States Code, is amended by inserting after 
section 32902 the following: 
‘‘§ 32902A. Requirement to manufacture dual fueled 
automobiles 
‘‘(a) REQUIREMENT.—Each manufacturer of new 
automobiles that are capable of operating on gasoline or 
diesel fuel shall ensure that the percentage of the total 
of such automobiles, manufactured and distributed in 
commerce for sale in the United States, which are dual 
fueled automobiles (as defined in this chapter) is equal 
to not less than the applicable percentage for each applica-
ble model year set forth in the following table: 
The percentage of dual 
fueled automobiles 
‘‘For each of the following 
manufactured shall be 
model years: 
not less than: 
2008 .........................................................................................
2009 .........................................................................................
2010 .........................................................................................
2011 .........................................................................................
2012 .........................................................................................
2013 .........................................................................................
75.
‘‘(b) PRODUCTION CREDITS FOR EXCEEDING FLEXI-
BLE FUEL AUTOMOBILE PRODUCTION REQUIREMENT.— 
‘‘(1) EARNING
AND
PERIOD
FOR
APPLYING 
CREDITS.—If the number of dual fueled automobiles 
manufactured by a manufacturer in a particular 
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model year exceeds the number required under sub-
section (a), the manufacturer earns credits under 
this section, which may be applied to any of the 3 
consecutive model years immediately after the model 
year for which the credits are earned. 
‘‘(2) TRADING CREDITS.—A manufacturer that 
has earned credits under paragraph (1) may sell 
credits to another manufacturer to enable the pur-
chaser to meet the requirement under subsection 
(a).’’. 
(2) TECHNICAL
AMENDMENT.—The table of 
sections for chapter 329 of title 49, United States 
Code, is amended by inserting after the item relating 
to section 32902 the following: 
‘‘32902A. Requirement to manufacture dual fueled automobiles.’’. 
(b) EDUCATION PROGRAM.—The Secretary of En-
ergy shall carry out an education program to inform peo-
ple about which automobiles are dual fueled automobiles 
and how to exercise their opportunity to choose alternative 
fuels. The Secretary is authorized to obtain from the auto-
mobile manufacturers their recall databases and other ap-
propriate databases to identify the owners of dual fueled 
automobiles for purposes of notifying them of where alter-
native fuels are sold in their area. 
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SEC. 103. E–85 FUEL PUMPS. 
(a) MARKET PENETRATION REPORTS.—After pro-
viding public notice and an opportunity for public com-
ment, the Secretary of Energy, in consultation with the 
Secretary of Transportation, shall determine and report 
to Congress annually on the market penetration for flexi-
ble-fuel vehicles in use within geographic regions to be es-
tablished by the Secretary for this purpose. Regions estab-
lished by the Secretary under this subsection shall not be 
smaller than 1 entire State or larger than 5. 
(b) REQUIREMENT.—When flexible-fuel vehicle mar-
ket penetration reaches 15 percent of light-duty motor ve-
hicles in a region, as determined by the Secretary of En-
ergy under subsection (a), the Secretary shall require 
motor fuel retailers in that region to install an E–85 fuel 
pump or pumps at their retail fuel facilities on a schedule 
and priority to be determined by the Secretary. In imple-
menting this subsection, the Secretary shall— 
(1) consider retail fuel companies’ fuel sales vol-
ume and the physical capacity of individual retail lo-
cations when determining the mandate priority; 
(2) require E–85 fuel pump installation con-
sistent with flexible-fuel vehicle market penetration 
in that region; and 
(3) consider the commercial availability of E–85 
fuel in the region. 
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(c) PROHIBITION.—No oil company shall, through a 
franchise or sales agreement or otherwise, prohibit a 
motor fuel retailer from making E–85 or other biofuels 
available for sale. 
(d) CREDITS.—The Secretary of Energy may estab-
lish a system to allow retail motor fuel facilities within 
a region that have installed E–85 fuel pumps and that 
are not subject to the requirements established under sub-
section (b), including pumps installed before the date of 
enactment of this Act, to sell credits to covered retail fuel 
facilities to meet the requirements of such subsection, on 
a pump for pump basis. 
(e) CIVIL PENALTY.—A person who violates this sec-
tion or the requirements established by the Secretary of 
Energy under this section shall be liable to the Secretary 
for a civil penalty in the amount of $1000 for each day 
of such violation. 
(f) STUDY AND REPORT.—Not later than 1 year after 
the date of enactment of this Act, the Secretary of Energy 
shall conduct a study and report to Congress on the feasi-
bility and expense of converting existing gasoline and die-
sel fuel infrastructure to transport and dispense E–85 fuel 
and biodiesel. 
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SEC. 104. ALTERNATIVE FUEL INFRASTRUCTURE FUND 
AND GRANT PROGRAM. 
(a) ESTABLISHMENT OF FUND.— 
(1) IN GENERAL.—There is established in the 
Treasury a Alternative Fuel Infrastructure Fund 
(hereinafter in this Act referred to as the ‘‘Fund’’) 
consisting of amounts transferred to the Fund under 
paragraph (2) and amounts credited to the Fund 
under paragraph (3). 
(2) TRANSFER OF AMOUNTS.—For fiscal year 
2007, and each fiscal year thereafter, the Secretary 
of the Treasury shall transfer to the Fund an 
amount determined by the Secretary to be equal to 
the total amount deposited in the general fund of 
the Treasury in the preceding fiscal year from fines, 
penalties, and other moneys obtained through en-
forcement actions conducted pursuant to section 
32912 of title 49, United States Code, including 
moneys obtained under consent decrees. 
(3) INVESTMENT OF AMOUNTS.—The Secretary 
of the Treasury shall invest in interest-bearing obli-
gations of the United States such portion of the 
Fund as is not, in the Secretary’s judgment, re-
quired to meet current withdrawals. Such obligations 
shall be acquired and sold and interest on, and the 
proceeds from the sale or redemption of, such obliga-
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tions shall be credited to the Fund in accordance 
with the requirements of section 9602 of the Inter-
nal Revenue Code of 1986. 
(4) USE OF AMOUNTS IN THE FUND.—Amounts 
in the Fund shall be made available without further 
appropriation to the Secretary of Energy to carry 
out the grant program described in subsection (b). 
(b) ALTERNATIVE FUEL INFRASTRUCTURE GRANT 
PROGRAM.— 
(1) IN
GENERAL.—The Secretary of Energy 
shall establish and carry out a grant program to as-
sist retail gasoline service stations make required 
conversions or installations to infrastructure nec-
essary for the dispensing of alternative fuels to in-
crease the availability to consumers of alternative 
fuels. 
(2) ELIGIBILITY.—Any entity that dispenses 
automobile fuel at retail may be eligible for a grant 
under this section. 
(3) USE OF GRANT FUNDS.—Grants provided 
under this section shall be used for the construction 
or expansion of infrastructure necessary for the dis-
pensing of alternative fuels (as defined in section 
32901(a)(1) of title 49, United States Code). Not 
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more than 3 percent of grant funds may be used for 
administrative costs. 
SEC. 105. STRATEGIC FEEDSTOCK RESERVE. 
(a) PROGRAM.—The Secretary of Agriculture shall 
establish and administer a renewable energy reserve pro-
gram to purchase agricultural commodities from pro-
ducers and to store such agricultural commodities with 
such producers. 
(b) PURCHASES.— 
(1) IN GENERAL.—The Secretary of Agriculture 
shall purchase agricultural commodities at commer-
cial rates in order to establish, maintain, or enhance 
the renewable energy reserve when— 
(A) such commodities are in abundant sup-
ply; 
(B) there is need for adequate carryover 
stocks to ensure a reliable supply of the com-
modities to meet renewable energy demands; 
(C) the average price of an agricultural 
commodity in a county is less than 100 percent 
of the applicable loan rate for a nonrecourse 
marketing assistance loan; and 
(D) it is necessary to ensure adequate sup-
plies of renewable fuels in the marketplace. 
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(2) LIMITATION.—Purchases by the Secretary 
of Agriculture under paragraph (1) shall be limited 
to— 
(A) the type and quantity of commodities 
necessary to provide for not more than one year 
of estimated utilization for renewable energy 
purposes; and 
(B) quantities of commodities for research 
and development of renewable fuels. 
(c) SALE OF STOCKS.—A commodity shall not be sold 
from the renewable energy reserve unless— 
(1) the average market price of the commodity 
in the United States is greater than or equal to the 
applicable loan rate for a nonrecourse marketing as-
sistance loan; and 
(2) such commodity will be used to produce re-
newable energy. 
(d) STORAGE PAYMENTS.—Payments made by the 
Secretary of Agriculture for the storage of commodities 
shall reflect local commercial storage rates. 
SEC. 106. DEPARTMENT OF AGRICULTURE BIOENERGY 
PROGRAM. 
(a) DEFINITION OF BIOENERGY.—Subsection (a)(1) 
of section 9010 of the Farm Security and Rural Invest-
ment Act of 2002 (7 U.S.C. 8108) is amended by striking 
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subparagraph (B) and inserting the following new sub-
paragraph: 
‘‘(B) ethanol derived from cellulosic feed-
stocks.’’. 
(b) REAUTHORIZATION.—Subsection (c) of such sec-
tion is amended by striking paragraph (2) and inserting 
the following new paragraph: 
‘‘(2) such sums as may be necessary for each 
of fiscal years 2007 through 2016.’’. 
SEC. 107. FARM-BASED ENERGY FINANCING PROGRAM. 
(a) IN GENERAL.—Subtitle A of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1921–1936a) 
is amended by adding at the end the following: 
‘‘SEC. 310H. FARM-BASED ENERGY FINANCING PROGRAM. 
‘‘(a) IN GENERAL.—The Secretary may make loans 
to eligible farmers and ranchers in the United States, and 
to eligible farm cooperatives and private domestic corpora-
tions, partnerships, joint operations, trusts, and limited li-
ability companies that are controlled by farmers and 
ranchers, to enable such entities to create or expand facili-
ties designed to convert agricultural commodities (includ-
ing the capture of wind, solar energy, and methane) into 
fuel. 
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‘‘(b) ELIGIBILITY.—Paragraphs (1) and (3) of the 
2nd sentence of section 302 shall apply in determining the 
eligibility of applicants for a loan under this section. 
‘‘(c) LOAN TERMS.— 
‘‘(1) 
MAXIMUM
PRINCIPAL
AMOUNT.—The 
amount of a loan under this section shall not exceed 
$25,000,000. 
‘‘(2) INTEREST RATE.—The Secretary set the 
rate at which loans under this section shall bear in-
terest, except that the rate shall not exceed the cur-
rent market yield for outstanding municipal obliga-
tions with remaining periods to maturity comparable 
to the average maturity for the loans, and shall be 
adjusted to the nearest 1⁄8 of 1 percent. 
‘‘(3) MAXIMUM REPAYMENT PERIOD.—The pe-
riod for repayment of a loan under this section shall 
not exceed 20 years. 
‘‘(d) LIMITATIONS ON AUTHORIZATION OF APPRO-
PRIATIONS.—For loans under this section, there are au-
thorized to be appropriated to the Secretary not more than 
$250,000,000 for each fiscal year.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on October 1, 2006. 
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SEC. 108. AUTHORITY OF BANKS FOR COOPERATIVES TO FI-
NANCE RENEWABLE FUEL MANUFACTURING 
BY AGRICULTURAL COOPERATIVES. 
Section 3.8(b)(1) of the Farm Credit Act of 1971 (12 
U.S.C. 2129(b)(1)) is amended by adding at the end the 
following: 
‘‘(E) Any association of farmers or of pro-
ducers or harvesters of aquatic products, or any 
federation of such associations which— 
‘‘(i) has producer and investor classes 
of membership, but only if— 
‘‘(I) at least 50 percent of the 
voting control of the association is 
held by farmers or producers or har-
vesters of aquatic products; and 
‘‘(II) the producer class, if treat-
ed as a separate entity, operates on a 
cooperative basis; and 
‘‘(ii) is engaged in processing, pre-
paring for market, handling, or marketing 
biofuels, ethanol, or other renewable en-
ergy products.’’. 
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SEC. 109. BAN ON CONDITIONING BUSINESS AND INDUSTRY 
LOAN GUARANTEE ON LENDER OBTAINING 
UNSUBORDINATED INTEREST IN FARMING 
OR RANCHING OPERATION OF BORROWER. 
Section 310B(g)(2) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1932(g)(2)) is amended 
by adding at the end the following: 
‘‘(D) LIMITATION.—The Secretary may 
not require, as a condition of providing a guar-
antee under this paragraph, that the lender ob-
tain an unsubordinated interest in the farming 
or ranching operation of the farmer or ranch-
er.’’. 
SEC. 110. RESEARCH, DEVELOPMENT, AND DEMONSTRA-
TION. 
(a) SECRETARY OF ENERGY.—The Secretary of En-
ergy, in consultation with the Secretary of Agriculture, 
shall establish a program of research, development, and 
demonstration with the goals of— 
(1) improving the efficiency and cost-effective-
ness of ethanol production; 
(2) developing new processes to extract energy 
from biological sources, including wood chips and pe-
rennial grasses; 
(3) advancing biomass gasification; 
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(4) promoting the development of new vehicle 
efficiency technologies, including flexible fuel vehi-
cles, hybrid vehicles, and plug-in hybrid vehicles; and 
(5) improving the operational characteristics of 
automobile engines operating on biofuels. 
(b) SECRETARY OF AGRICULTURE.—The Secretary 
of Agriculture, in consultation with the Secretary of En-
ergy, shall establish a program of research, development, 
and demonstration for developing new feedstocks and 
processes to extract energy from biological sources, includ-
ing wood chips and perennial grasses. 
(c) SUN GRANT INITIATIVE.—Section 9011(j)(1)(C) 
of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 8109(j)(1)(C); also known as the ‘‘Sun Grant 
Research Initiative Act of 2003’’) is amended by striking 
‘‘2010’’ and inserting ‘‘2012’’. 
(d) CLEARINGHOUSE.—The Secretary of Energy 
shall establish a clearinghouse to facilitate the availability 
of the information, technologies, and processes generated 
under this section. 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated— 
(1) to the Secretary of Energy $50,000,000 for 
each of the fiscal years 2007 through 2016, for car-
rying out subsections (a) and (d); and 
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(2) to the Secretary of Agriculture $50,000,000 
for each of the fiscal years 2007 through 2016, for 
carrying out subsection (b). 
SEC. 111. BIOFUELS PRODUCTION FACILITY GRANT PRO-
GRAM. 
(a) ESTABLISHMENT.—The Secretary of Energy 
shall establish a grant program to provide up to 25 per-
cent of the cost of financing a biofuels production facility 
capable of producing biofuels with at least 20 Btus of en-
ergy output for every Btu of hydrocarbon input. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary of En-
ergy $10,000,000 for each of the fiscal years 2007 
through 2016, for carrying this section. 
SEC. 112. CARBON TRADING. 
(a) FINDINGS.—The Congress finds that— 
(1) American farmers today deserve credit for 
creating the most prolific and abundant crop produc-
tion in human history; 
(2) the increased use of renewable biofuels fuels 
in the United States will encourage an even greater 
level of production of bioenergy feedstocks by United 
States agriculture; 
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(3) crops grown by American farmers have pro-
vided, and continue to provide, significant carbon se-
questration and greenhouse gas reduction effects; 
(4) this increased bioenergy crop feedstock pro-
duction will amplify carbon capture benefits that em-
anate from United States agricultural production; 
(5) this increased biofuels production will offset 
considerable amounts of greenhouse gas emissions 
that would otherwise be created by using petroleum; 
(6) farmers have never been compensated by 
the marketplace for the significant amounts of car-
bon that they have sequestered through their activi-
ties; and 
(7) this sequestration activity mitigates global 
warming and provides significant benefits to the 
United States and to the world. 
(b) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) Congress should consider and enact policies 
that fairly but effectively reduce greenhouse gas 
emissions in the United States and around the 
world; and 
(2) Congress should enact policies that encour-
age the development of systems that compensate 
American agricultural producers for the beneficial 
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role that they play in reducing greenhouse gases and 
sequestering carbon from the atmosphere. 
TITLE II—TAX INCENTIVES 
SEC. 201. EXTENSION OF CREDITS FOR ETHANOL AND BIO-
DIESEL. 
(a) ETHANOL.—Paragraph (1) of section 40(e) of the 
Internal Revenue Code of 1986 (relating to termination) 
is amended— 
(1) in subparagraph (A) by striking ‘‘December 
31, 2010’’ and inserting ‘‘December 31, 2015’’, and 
(2) in subparagraph (B) by striking ‘‘January 
1, 2011’’ and inserting ‘‘January 1, 2016’’. 
(b) BIODIESEL.—Subsection (g) of section 40A (re-
lating to termination) is amended by striking ‘‘December 
31, 2008’’ and inserting ‘‘December 31, 2015’’. 
SEC. 202. INCREASE IN INCENTIVES FOR REFUELING PROP-
ERTY FOR ETHANOL AND BIODIESEL. 
(a) CREDIT AMOUNT.—Subsection (a) of section 30C 
of the Internal Revenue Code of 1986 (relating to credit 
allowed) is amended by inserting ‘‘(50 percent in the case 
of fuel which is ethanol or biodiesel, described in sub-
section (c)(1))’’ after ‘‘30 percent’’. 
(b) LIMITATION.—Paragraph (1) of section 30C(b) 
of such Code (relating to limitation) is amended by insert-
ing ‘‘($60,000 in the case that such property is with re-
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spect to fuel which is ethanol or biodiesel, described in 
subsection (c)(1))’’ before the comma at the end. 
(c) EXTENSION OF CREDIT.—Subsection (g) of sec-
tion 30C of such Code (relating to termination) is amend-
ed by striking ‘‘and’’ at the end of paragraph (1), by re-
designating paragraph (2) as paragraph (3), and by in-
serting after paragraph (2) the following new paragraph: 
‘‘(2) in the case of property relating to ethanol 
or biodiesel, after December 31, 2015, and’’. 
(d) 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 end-
ing after such date. 
SEC. 203. SMALL ETHANOL PRODUCER CREDIT. 
(a) INCREASE IN LIMITATION.—Subparagraph (C) of 
section 40(b)(4) of the Internal Revenue Code of 1986 (re-
lating to limitation) is amended by striking ‘‘15,000,000’’ 
and inserting ‘‘30,000,000’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to alcohol produced, sold, or 
used after the date of the enactment of this Act in taxable 
years ending after such date. 
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SEC. 204. INFRASTRUCTURE BONDS FOR FACILITIES PRO-
DUCING MOTOR VEHICLE FUEL FROM BIO-
MASS. 
(a) QUALIFIED FACILITY.—Subparagraph (A) of sec-
tion 54(d)(2) of the Internal Revenue Code of 1986 (defin-
ing qualified project) is amended to read as follows: 
‘‘(A) QUALIFIED
PROJECT.—The term 
‘qualified project’ means— 
‘‘(i) 
FACILITY
PRODUCING
ELEC-
TRICITY
FROM
QUALIFIED
ENERGY
RE-
SOURCES.—Any qualified facility (as deter-
mined under section 45(d) without regard 
to paragraph (10) and to any placed in 
service date) owned by a qualified bor-
rower. 
‘‘(ii) FACILITY
PRODUCING
MOTOR 
VEHICLE FUEL FROM BIOMASS.—Any facil-
ity using closed-loop or open-loop biomass 
(as defined in section 45(c)) to produce a 
fuel for use in a motor vehicle (as defined 
in section 30(c)(2)).’’. 
(b) NATIONAL CLEAN RENEWABLE ENERGY BOND 
LIMITATION.—Subsection (f) of section 54 of such Code 
is amended to read as follows: 
‘‘(f) LIMITATION
ON AMOUNT
OF BONDS DES-
IGNATED.— 
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‘‘(1) NATIONAL LIMITATION.—There is a na-
tional clean renewable energy bond limitation for 
each calendar year of— 
‘‘(A) $800,000,000 in the case of projects 
described in subsection (d)(2)(A)(i), and 
‘‘(B) $800,000,000 in the case of projects 
described in subsection (d)(2)(A)(ii). 
‘‘(2) ALLOCATION
BY
SECRETARY.—The Sec-
retary shall allocate the amounts described in para-
graph (1) among qualified projects in such manner 
as the Secretary determines appropriate, except that 
the 
Secretary 
may 
not 
allocate 
more 
than 
$500,000,000 of the national clean renewable energy 
bond limitation for any calendar year to finance 
qualified projects of qualified borrowers which are 
governmental bodies.’’. 
(c) EXTENSION OF CREDIT.—Subsection (m) of sec-
tion 54 of such Code (relating to termination) is amended 
by striking ‘‘December 31, 2007’’ and inserting ‘‘Decem-
ber 31, 2012’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after the date of 
the enactment of this Act. 
Æ 
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