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. 
‘‘(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, 2012.’’. 
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(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 striking ‘‘plus’’ at the end of para-
graph (31), by striking the period at the end of paragraph 
(32) and inserting ‘‘, plus’’, and by adding at the end the 
following new paragraph: 
‘‘(33) 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. FREEDOM FOR FUEL FRANCHISERS. 
(a) PROHIBITION ON RESTRICTION OF INSTALLA-
TION OF ALTERNATIVE FUEL PUMPS.— 
(1) IN
GENERAL.—Title I of the Petroleum 
Marketing Practices Act (15 U.S.C. 2801 et seq.) is 
amended by adding at the end the following: 
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‘‘SEC. 107. PROHIBITION ON RESTRICTION OF INSTALLA-
TION OF ALTERNATIVE FUEL PUMPS. 
‘‘(a) DEFINITION.—In this section: 
‘‘(1) ALTERNATIVE
FUEL.—The term ‘alter-
native fuel’ means any fuel— 
‘‘(A) at least 85 percent of the volume of 
which consists of ethanol, natural gas, com-
pressed natural gas, liquefied natural gas, lique-
fied petroleum gas, hydrogen, or any combina-
tion of those fuels; or 
‘‘(B) any mixture of biodiesel (as defined 
in section 40A(d)(1) of the Internal Revenue 
Code of 1986) and diesel fuel (as defined in 
section 4083(a)(3) of the Internal Revenue 
Code of 1986), determined without regard to 
any use of kerosene and containing at least 20 
percent biodiesel. 
‘‘(2) FRANCHISE-RELATED
DOCUMENT.—The 
term ‘franchise-related document’ means— 
‘‘(A) a franchise under this Act; and 
‘‘(B) any other contract or directive of a 
franchisor relating to terms or conditions of the 
sale of fuel by a franchisee. 
‘‘(b) PROHIBITIONS.— 
‘‘(1) IN GENERAL.—Notwithstanding any provi-
sion of a franchise-related document in effect on the 
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date of enactment of this section, no franchisee or 
affiliate of a franchisee shall be restricted from— 
‘‘(A) installing on the marketing premises 
of the franchisee an alternative fuel pump; 
‘‘(B) converting an existing tank and 
pump on the marketing premises of the 
franchisee for alternative fuel use; 
‘‘(C) advertising (including through the 
use of signage or logos) the sale of any alter-
native fuel; or 
‘‘(D) selling alternative fuel in any speci-
fied area on the marketing premises of the 
franchisee (including any area in which a name 
or logo of a franchisor or any other entity ap-
pears). 
‘‘(2) 
ENFORCEMENT.—Any 
restriction 
de-
scribed in paragraph (1) that is contained in a fran-
chise-related document and in effect on the date of 
enactment of this section— 
‘‘(A) shall be considered to be null and 
void as of that date; and 
‘‘(B) shall not be enforced under section 
105. 
‘‘(c) EXCEPTION TO 3-GRADE REQUIREMENT.—No 
franchise-related document that requires that 3 grades of 
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gasoline be sold by the applicable franchisee shall prevent 
the franchisee from selling an alternative fuel in lieu of 
1 grade of gasoline.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) IN GENERAL.—Section 101(13) of the 
Petroleum Marketing Practices Act (15 U.S.C. 
2801(13)) is amended by adjusting the indenta-
tion of subparagraph (C) appropriately. 
(B) TABLE OF CONTENTS.—The table of 
contents of the Petroleum Marketing Practices 
Act (15 U.S.C. 2801 note) is amended— 
(i) by inserting after the item relating 
to section 106 the following: 
‘‘Sec. 107. Prohibition on restriction of installation of alternative fuel pumps.’’; 
and 
(ii) by striking the item relating to 
section 202 and inserting the following: 
‘‘Sec. 202. Automotive fuel rating testing and disclosure requirements.’’. 
(b) APPLICATION OF GASOHOL COMPETITION ACT 
OF 1980.—Section 26 of the Clayton Act (15 U.S.C. 26a) 
is amended— 
(1) by redesignating subsection (c) as sub-
section (d); 
(2) by inserting after subsection (b) the fol-
lowing: 
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‘‘(c) RESTRICTION PROHIBITED.—For purposes of 
subsection (a), restricting the right of a franchisee to in-
stall on the premises of that franchisee qualified alter-
native fuel vehicle refueling property (as defined in section 
30C(c) of the Internal Revenue Code of 1986) shall be 
considered an unlawful restriction.’’; and 
(3) in subsection (d) (as redesignated by para-
graph (1))— 
(A) by striking ‘‘(d) As used in this sec-
tion,’’ and inserting the following: ‘‘ ‘section— 
‘(1) the term’ ’’; 
(B) by striking the period at the end and 
inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(2) the term ‘gasohol’ includes any blend of 
ethanol and gasoline such as E–85.’’. 
SEC. 6. ALTERNATIVE DIESEL FUEL CONTENT OF DIESEL. 
(a) FINDINGS.—Congress finds that— 
(1) section 211(o) of the Clean Air Act (42 
U.S.C. 7535(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; 
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(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 (Public Law 109–58; 119 Stat. 
594); 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.— 
‘‘(1) DEFINITION
OF
ALTERNATIVE
DIESEL 
FUEL.— 
‘‘(A) IN GENERAL.—In this subsection, the 
term ‘alternative diesel fuel’ means biodiesel (as 
defined in section 312(f) of the Energy Policy 
Act of 1992 (42 U.S.C. 13220(f))) and any 
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blending components derived from alternative 
fuel (provided that only the alternative 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) plant oil; 
‘‘(iii) recycled yellow grease; 
‘‘(iv) single-cell or microbial oil; 
‘‘(v) thermal depolymerization; 
‘‘(vi) thermochemical conversion; 
‘‘(vii) a coal-to-liquid process (includ-
ing the Fischer-Tropsch process) that pro-
vides for the sequestration of carbon emis-
sions; 
‘‘(viii) a diesel-ethanol blend of not 
less than 7 percent ethanol; or 
‘‘(ix) sugar, starch, or cellulosic bio-
mass. 
‘‘(2) ALTERNATIVE DIESEL FUEL PROGRAM.— 
‘‘(A) REGULATIONS.— 
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‘‘(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 2009. 
‘‘(B) APPLICABLE VOLUME.— 
‘‘(i) CALENDAR YEARS 2009 THROUGH 
2016.—For the purpose of subparagraph 
(A), the applicable volume for any of cal-
endar years 2009 through 2016 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 .....................................................................................................
2009 
500 .....................................................................................................
2010 
750 .....................................................................................................
2011 
1,000 ..................................................................................................
2012 
1,250 ..................................................................................................
2013 
1,500 ..................................................................................................
2014 
1,750 ..................................................................................................
2015 
2,000 ..................................................................................................
2016 
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‘‘(ii) CALENDAR
YEAR
2017
AND 
THEREAFTER.—The applicable volume for 
calendar year 2017 and each calendar year 
thereafter shall be determined by the Ad-
ministrator, in coordination with the Sec-
retary of Agriculture and the Secretary of 
Energy, based on a review of the imple-
mentation of the program during calendar 
years 2009 through 2016, including a re-
view 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 2017 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 
2016. 
‘‘(3) APPLICABLE PERCENTAGES.— 
‘‘(A) PROVISION
OF
ESTIMATE
OF
VOL-
UMES OF DIESEL SALES.—Not later than Octo-
ber 31 of each of calendar years 2008 through 
2016, 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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