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power) that eventually can increase the feasibility of
fuel production in a biorefinery, including—
‘‘(A) 
catalytic 
processing, 
including
thermochemical fuel production;
‘‘(B) metabolic engineering, enzyme engi-
neering, and fermentation systems for biological
production of desired products or cogeneration of
power;
‘‘(C) product recovery;
‘‘(D) power production technologies; and
‘‘(E) integration into existing biomass proc-
essing facilities, including starch ethanol plants,
paper mills, and power plants; and
‘‘(4) analysis that provides strategic guidance for
the application of biomass technologies in accordance
with realization of improved sustainability and envi-
ronmental quality, cost effectiveness, security, and
rural economic development, usually featuring sys-
tem-wide approaches.
‘‘(e) ADDITIONAL CONSIDERATIONS.—Within the tech-
nical areas described in subsection (d), and in addition to
advancing the purposes described in subsection (c) and the
objectives described in subsection (b), the Secretaries shall
support research and development—
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‘‘(1) to create continuously expanding opportuni-
ties for participants in existing biofuels production by
seeking synergies and continuity with current tech-
nologies and practices, such as the use of dried dis-
tillers grains as a bridge feedstock;
‘‘(2) to maximize the environmental, economic,
and social benefits of production of biobased fuels and
biobased products on a large scale through life-cycle
economic and environmental analysis and other
means; and
‘‘(3) to assess the potential of Federal land and
land management programs as feedstock resources for
biobased fuels and biobased products, consistent with
the integrity of soil and water resources and with
other environmental considerations.
‘‘(f) ELIGIBLE ENTITIES.—To be eligible for a grant,
contract, or assistance under this section, an applicant shall
be—
‘‘(1) an institution of higher education;
‘‘(2) a national laboratory;
‘‘(3) a Federal research agency;
‘‘(4) a State research agency;
‘‘(5) a private sector entity;
‘‘(6) a nonprofit organization; or
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‘‘(7) a consortium of 2 of more entities described
in paragraphs (1) through (6).
‘‘(g) ADMINISTRATION.—
‘‘(1) IN GENERAL.—After consultation with the
Board, the points of contact shall—
‘‘(A) publish annually 1 or more joint re-
quests for proposals for grants, contracts, and as-
sistance under this section;
‘‘(B) require that grants, contracts, and as-
sistance under this section be awarded competi-
tively, on the basis of merit, after the establish-
ment of procedures that provide for scientific
peer review by an independent panel of scientific
and technical peers; and
‘‘(C) give some preference to applications
that—
‘‘(i) involve a consortia of experts from
multiple institutions;
‘‘(ii) encourage the integration of dis-
ciplines and application of the best tech-
nical resources; and
‘‘(iii) increase the geographic diversity
of demonstration projects.
‘‘(2) DISTRIBUTION OF FUNDING BY TECHNICAL
AREA.—Of the funds authorized to be appropriated
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for activities described in this section, funds shall be
distributed for each of fiscal years 2006 through 2010
so as to achieve an approximate distribution of—
‘‘(A) 20 percent of the funds to carry out
activities for feedstock production under sub-
section (d)(1);
‘‘(B) 45 percent of the funds to carry out
activities for overcoming recalcitrance of cel-
lulosic biomass under subsection (d)(2);
‘‘(C) 30 percent of the funds to carry out
activities for product diversification under sub-
section (d)(3); and
‘‘(D) 5 percent of the funds to carry out ac-
tivities for strategic guidance under subsection
(d)(4).
‘‘(3) DISTRIBUTION OF FUNDING WITHIN EACH
TECHNICAL AREA.—Within each technical area de-
scribed in paragraphs (1) through (3) of subsection
(d), funds shall be distributed for each of fiscal years
2006 through 2010 so as to achieve an approximate
distribution of—
‘‘(A) 15 percent of the funds for applied
fundamentals;
‘‘(B) 35 percent of the funds for innovation;
and
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‘‘(C) 50 percent of the funds for demonstra-
tion.
‘‘(4) MATCHING FUNDS.—
‘‘(A) IN GENERAL.—A minimum 20 percent
funding match shall be required for demonstra-
tion projects under this title.
‘‘(B) COMMERCIAL APPLICATIONS.—A min-
imum of 50 percent funding match shall be re-
quired for commercial application projects under
this title.
‘‘(5) TECHNOLOGY AND INFORMATION TRANSFER
TO AGRICULTURAL USERS.—The Administrator of the
Cooperative State Research, Education, and Exten-
sion Service and the Chief of the Natural Resources
Conservation Service shall ensure that applicable re-
search results and technologies from the Initiative are
adapted, made available, and disseminated through
those services, as appropriate.’’.
(f) ANNUAL REPORTS.—Section 309 of the Biomass
Research and Development Act of 2000 (Public Law 106–
224; 7 U.S.C. 8101 note) is amended—
(1) in subsection (b)—
(A) in paragraph (1)—
(i) in subparagraph (A), by striking
‘‘purposes described in section 307(b)’’ and
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inserting ‘‘objectives, purposes, and addi-
tional considerations described in sub-
sections (b) through (e) of section 307’’;
(ii) in subparagraph (B), by striking
‘‘and’’ at the end;
(iii) by redesignating subparagraph
(C) as subparagraph (D); and
(iv) by inserting after subparagraph
(B) the following:
‘‘(C) achieves the distribution of funds de-
scribed in paragraphs (2) and (3) of section
307(g); and’’; and
(B) in paragraph (2), by striking ‘‘indus-
trial products’’ and inserting ‘‘fuels and biobased
products’’; and
(2) by adding at the end the following:
‘‘(c) UPDATES.—The Secretary and the Secretary of
Energy shall update the Vision and Roadmap documents
prepared for Federal biomass research and development ac-
tivities.’’.
(g) AUTHORIZATION
OF APPROPRIATIONS.—Section
310(b) of the Biomass Research and Development Act of
2000 (Public Law 106–224; 7 U.S.C. 8101 note) is amended
by striking ‘‘title $54,000,000 for each of fiscal years 2002
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through 2007’’ and inserting ‘‘title $200,000,000 for fiscal
year 2006 and each fiscal year thereafter’’.
(h) HYDROGEN INTERMEDIATE FUELS RESEARCH
PROGRAM.—
(1) IN GENERAL.—The Secretary shall conduct a
research, development, and demonstration program fo-
cused on the economic production and use of hydrogen
from biofuels, with emphasis on the rural electrical
generation sectors.
(2) ELECTRICAL
GENERATION
SECTOR
OBJEC-
TIVES.—The objectives of the program conducted
under paragraph (1) in the rural electrical generation
sector shall be to—
(A) design, develop, and test low-cost gasifi-
cation equipment to convert biomass to hydrogen
at regional rural cooperatives, or at businesses
owned by farmers, close to agricultural oper-
ations to minimize the cost of biomass transpor-
tation to large central gasification plants;
(B) demonstrate low-cost electrical genera-
tion at such rural cooperatives or farmer-owned
businesses, using renewable hydrogen derived
from biomass in either fuel cell generators, or, as
an interim cost reduction option, in conven-
tional internal combustion engine gensets;
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(C) determine the economic return to co-
operatives or other businesses owned by farmers
of producing hydrogen from biomass and selling
electricity compared to agricultural economic re-
turns from producing and selling conventional
crops alone;
(D) evaluate the crop yield and long-term
soil sustainability of growing and harvesting of
feedstocks for biomass gasification, and
(E) demonstrate the use of a portion of the
biomass-derived hydrogen in various agricultural
vehicles to reduce—
(i) dependence on imported fossil fuel;
and
(ii) environmental impacts.
(3) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated to carry out
this subsection $5,000,000.
SEC. 938. PRODUCTION INCENTIVES FOR CELLULOSIC
BIOFUELS.
(a) PURPOSE.—The purpose of this section is to—
(1) accelerate deployment and commercialization
of biofuels;
(2) deliver the first 1,000,000,000 gallons in an-
nual cellulosic biofuels production by 2015;
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(3) ensure biofuels produced after 2015 are cost
competitive with gasoline and diesel; and
(4) ensure that small feedstock producers and
rural small businesses are full participants in the de-
velopment of the cellulosic biofuels industry.
(b) DEFINITIONS.—In this section:
(1) CELLULOSIC
BIOFUELS.—The term ‘‘cel-
lulosic biofuels’’ means any fuel that is produced from
cellulosic feedstocks.
(2) ELIGIBLE ENTITY.—The term ‘‘eligible enti-
ty’’ means a producer of fuel from cellulosic biofuels
the production facility of which—
(A) is located in the United States;
(B) meets all applicable Federal and State
permitting requirements; and
(C) meets any financial criteria established
by the Secretary.
(c) PROGRAM.—
(1) ESTABLISHMENT.—The Secretary, in con-
sultation with the Secretary of Agriculture, the Sec-
retary of Defense, and the Administrator of the Envi-
ronmental Protection Agency, shall establish an in-
centive program for the production of cellulosic
biofuels.
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(2) BASIS OF INCENTIVES.—Under the program,
the Secretary shall award production incentives on a
per gallon basis of cellulosic biofuels from eligible en-
tities, through—
(A) set payments per gallon of cellulosic
biofuels produced in an amount determined by
the Secretary, until initiation of the first reverse
auction; and
(B) reverse auction thereafter.
(3) FIRST REVERSE AUCTION.—The first reverse
auction shall be held on the earlier of—
(A) not later than 1 year after the first year
of annual production in the United States of
100,000,000 gallons of cellulosic biofuels, as de-
termined by the Secretary; or
(B) not later than 3 years after the date of
enactment of this Act.
(4) REVERSE AUCTION PROCEDURE.—
(A) IN GENERAL.—On initiation of the first
reverse auction, and each year thereafter until
the earlier of the first year of annual production
in the United States of 1,000,000,000 gallons of
cellulosic biofuels, as determined by the Sec-
retary, or 10 years after the date of enactment
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of this Act, the Secretary shall conduct a reverse
auction at which—
(i) the Secretary shall solicit bids from
eligible entities;
(ii) eligible entities shall submit—
(I) a desired level of production
incentive on a per gallon basis; and
(II) an estimated annual produc-
tion amount in gallons; and
(iii) the Secretary shall issue awards
for the production amount submitted, begin-
ning with the eligible entity submitting the
bid for the lowest level of production incen-
tive on a per gallon basis and meeting such
other criteria as are established by the Sec-
retary, until the amount of funds available
for the reverse auction is committed.
(B) AMOUNT OF INCENTIVE RECEIVED.—An
eligible entity selected by the Secretary through
a reverse auction shall receive the amount of per-
formance incentive requested in the auction for
each gallon produced and sold by the entity dur-
ing the first 6 years of operation.
(C) COMMENCEMENT
OF
PRODUCTION
OF
CELLULOSIC BIOFUELS.—As a condition of the
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receipt of an award under this section, an eligi-
ble entity shall enter into an agreement with the
Secretary under which the eligible entity agrees
to begin production of cellulosic biofuels not later
than 3 years after the date of the reverse auction
in which the eligible entity participates.
(d) LIMITATIONS.—Awards under this section shall be
limited to—
(1) a per gallon amount determined by the Sec-
retary during the first 4 years of the program;
(2) a declining per gallon cap over the remain-
ing lifetime of the program, to be established by the
Secretary so that cellulosic biofuels produced after the
first year of annual cellulosic biofuels production in
the United States in excess of 1,000,000,000 gallons
are cost competitive with gasoline and diesel;
(3) not more than 25 percent of the funds com-
mitted within each reverse auction to any 1 project;
(4) not more than $100,000,000 in any 1 year;
and
(5) not more than $1,000,000,000 over the life-
time of the program.
(e) PRIORITY.—In selecting a project under the pro-
gram, the Secretary shall give priority to projects that—
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(1) demonstrate outstanding potential for local
and regional economic development;
(2) include agricultural producers or coopera-
tives of agricultural producers as equity partners in
the ventures; and
(3) have a strategic agreement in place to fairly
reward feedstock suppliers.
(f) AUTHORIZATIONS OF APPROPRIATIONS.—There is
authorized to be appropriated to carry out this section
$250,000,000.
SEC. 939. PROCUREMENT OF BIOBASED PRODUCTS.
(a) FEDERAL PROCUREMENT.—
(1) DEFINITION OF PROCURING AGENCY.—Sec-
tion 9001 of the Farm Security and Rural Invest-
ment Act of 2002 (7 U.S.C. 8101) is amended—
(A) by redesignating paragraphs (4), (5),
and (6) as paragraphs (5), (6), and (7), respec-
tively; and
(B) by inserting after paragraph (3) the fol-
lowing:
‘‘(4) PROCURING AGENCY.—The term ‘procuring
agency’ means—
‘‘(A) any Federal agency that is using Fed-
eral funds for procurement; or
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‘‘(B) any person contracting with any Fed-
eral agency with respect to work performed
under the contract.’’.
(2) PROCUREMENT.—Section 9002 of the Farm
Security and Rural Investment Act of 2002 (7 U.S.C.
8102) is amended—
(A) by striking ‘‘Federal agency’’ each place
it appears (other than in subsections (f) and (g))
and inserting ‘‘procuring agency’’;
(B) in subsection (c)(2)—
(i) by striking ‘‘(2)’’ and all that fol-
lows through ‘‘Notwithstanding’’ and insert-
ing the following:
‘‘(2) FLEXIBILITY.—Notwithstanding’’;
(ii) by striking ‘‘an agency’’ and in-
serting ‘‘a procuring agency’’; and
(iii) by striking ‘‘the agency’’ and in-
serting ‘‘the procuring agency’’;
(C) in subsection (d), by striking ‘‘procured
by Federal agencies’’ and inserting ‘‘procured by
procuring agencies’’; and
(D) in subsection (f), by striking ‘‘Federal
agencies’’ and inserting ‘‘procuring agencies’’ .
(b) CAPITOL COMPLEX PROCUREMENT.—Section 9002
of the Farm Security and Rural Investment Act of 2002
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(7 U.S.C. 8102) (as amended by subsection (a)(2)) is
amended—
(1) by redesignating subsection (j) as subsection
(k); and
(2) by inserting after subsection (i) the following:
‘‘(j) INCLUSION.—Not later than 90 days after the date
of enactment of the Energy Policy Act of 2005, the Architect
of the Capitol, the Sergeant at Arms of the Senate, and the
Chief Administrative Officer of the House of Representa-
tives shall establish procedures that apply the requirements
of this section to procurement for the Capitol Complex.’’.
(c) EDUCATION.—
(1) IN GENERAL.—The Architect of the Capitol
shall establish in the Capitol Complex a program of
public education regarding use by the Architect of the
Capitol of biobased products.
(2) PURPOSES.—The purposes of the program
shall be—
(A) to establish the Capitol Complex as a
showcase for the existence and benefits of
biobased products; and
(B) to provide access to further information
on biobased products to occupants and visitors.
(d) PROCEDURE.—Requirements issued under the
amendments made by subsection (b) shall be made in ac-