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and Defense, the Environmental Protection Agency,
the National Science Foundation, and the National
Aeronautics and Space Administration with the auto-
motive industry for the purpose of developing a new
generation of vehicles with capabilities resulting in
significantly improved fuel efficiency together with
low emissions without compromising the safety, per-
formance, affordability, or utility of the vehicles.
(2) FREEDOM CAR PROGRAM.—The term ‘‘Free-
dom Car program’’ means a cooperative research pro-
gram engaged in by the Department of Energy with
the United States Council on Automotive Research as
a follow-on to the PNGV program.
SEC. 810. BUS REPLACEMENT.
(a) REQUIREMENT
FOR STUDY.—The Secretary of
Transportation shall carry out a study to determine how
best to provide for converting the composition of the fleets
of buses in metropolitan areas and school systems from
buses utilizing current diesel technology to—
(1) buses that draw propulsion from onboard fuel
cells;
(2) buses that are hybrid electric vehicles;
(3) buses that are fueled by clean-burning fuels,
such as renewable fuels (including agriculture-based
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biodiesel fuels), natural gas, and ultra-low sulphur
diesel;
(4) buses that are powered by clean diesel en-
gines: or
(5) an assortment of buses described in para-
graphs (1), (2), (3), and (4).
(b) REPORT.—
(1) REQUIREMENT.—The Secretary of Transpor-
tation shall submit a report on the results of the study
on bus fleet conversions under subsection (a) to Con-
gress.
(2) CONTENT.—The report on bus fleet conver-
sions shall include the following:
(A) An assessment of effectuating conver-
sions by the following means:
(i) Replacement of buses.
(ii) Replacement of power and propul-
sion systems in buses utilizing current die-
sel technology.
(iii) Other means.
(B) Feasible schedules for carrying out the
conversions.
(C) Estimated costs of carrying out the con-
versions.
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(D) An assessment of the benefits of the con-
versions in terms of emissions control and reduc-
tion of fuel consumption.
SEC. 811. AVERAGE FUEL ECONOMY STANDARDS FOR PICK-
UP TRUCKS.
(a) IN GENERAL.—Section 32902(a) of title 49, United
States Code, is amended—
(1) by inserting ‘‘(1)’’ after the after ‘‘AUTO-
MOBILES.—’’; and
(2) by adding at the end the following new para-
graph:
‘‘(2) The average fuel economy standard for pickup
trucks manufactured by a manufacturer in a model year
after model year 2004 shall be no higher than 20.7 miles
per gallon. No average fuel economy standard prescribed
under another provision of this section shall apply to pick-
up trucks.’’.
(b) 
DEFINITION
OF
PICKUP
TRUCK.—Section
32901(a) of such title is amended by adding at the end the
following new paragraph:
‘‘(17) ‘pickup truck’ has the meaning given that
term in regulations prescribed by the Secretary for
the administration of this chapter, as in effect on
January 1, 2002, except that such term shall also in-
clude any additional vehicle that the Secretary de-
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fines as a pickup truck in regulations prescribed for
the administration of this chapter after such date.’’.
SEC. 812. EXCEPTION TO HOV PASSENGER REQUIREMENTS
FOR ALTERNATIVE FUEL VEHICLES.
Section 102(a)(1) of title 23, United States Code, is
amended by inserting after ‘‘required’’ the following: ‘‘(un-
less, in the discretion of the State transportation depart-
ment, the vehicle is being operated on, or is being fueled
by, an alternative fuel (as defined in section 301(2) of the
Energy Policy Act of 1992 (42 U.S.C. 13211(2)))’’.
SEC. 813. DATA COLLECTION.
Section 205 of the Department of Energy Organization
Act (42 U.S.C. 7135) is amended by adding at the end the
following:
‘‘(m) In order to improve the ability to evaluate the
effectiveness of the Nation’s renewable fuels mandate, the
Administrator shall conduct and publish the results of a
survey of renewable fuels consumption in the motor vehicle
fuels market in the United States monthly, and in a man-
ner designed to protect the confidentiality of individual re-
sponses. In conducting the survey, the Administrator shall
collect information retrospectively to 1998, both on a na-
tional basis and a regional basis, including—
(1) the quantity of renewable fuels produced;
(2) the cost of production;
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(3) the cost of blending and marketing;
(4) the quantity of renewable fuels blended;
(5) the quantity of renewable fuels imported; and
(6) market price data.
SEC. 814. GREEN SCHOOL BUS PILOT PROGRAM.
(a) ESTABLISHMENT.—The Secretary of Energy and
the Secretary of Transportation shall jointly establish a
pilot program for awarding grants on a competitive basis
to eligible entities for the demonstration and commercial
application of alternative fuel school buses and ultra-low
sulfur diesel school buses.
(b) REQUIREMENTS.—Not later than 3 months after
the date of the enactment of this Act, the Secretary shall
establish and publish in the Federal Register grant require-
ments on eligibility for assistance, and on implementation
of the program established under subsection (a), including
certification requirements to ensure compliance with this
subtitle.
(c) SOLICITATION.—Not later than 6 months after the
date of the enactment of this Act, the Secretary shall solicit
proposals for grants under this section.
(d) ELIGIBLE RECIPIENTS.—A grant shall be awarded
under this section only—
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(1) to a local governmental entity responsible for
providing school bus service for one or more public
school systems; or
(2) jointly to an entity described in paragraph
(1) and a contracting entity that provides school bus
service to the public school system or systems.
(e) TYPES OF GRANTS.—
(1) IN
GENERAL.—Grants under this section
shall be for the demonstration and commercial appli-
cation of technologies to facilitate the use of alter-
native fuel school buses and ultra-low sulfur diesel
school buses instead of buses manufactured before
model year 1977 and diesel-powered buses manufac-
tured before model year 1991.
(2) NO ECONOMIC BENEFIT.—Other than the re-
ceipt of the grant, a recipient of a grant under this
section may not receive any economic benefit in con-
nection with the receipt of the grant.
(3) PRIORITY
OF
GRANT
APPLICATIONS.—The
Secretary shall give priority to awarding grants to
applicants who can demonstrate the use of alternative
fuel buses and ultra-low sulfur diesel school buses in-
stead of buses manufactured before model year 1977.
(f) CONDITIONS OF GRANT.—A grant provided under
this section shall include the following conditions:
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(1) All buses acquired with funds provided under
the grant shall be operated as part of the school bus
fleet for which the grant was made for a minimum
of 5 years.
(2) Funds provided under the grant may only be
used—
(A) to pay the cost, except as provided in
paragraph (3), of new alternative fuel school
buses or ultra-low sulfur diesel school buses, in-
cluding State taxes and contract fees; and
(B) to provide—
(i) up to 10 percent of the price of the
alternative fuel buses acquired, for necessary
alternative fuel infrastructure if the infra-
structure will only be available to the grant
recipient; and
(ii) up to 15 percent of the price of the
alternative fuel buses acquired, for necessary
alternative fuel infrastructure if the infra-
structure will be available to the grant re-
cipient and to other bus fleets.
(3) The grant recipient shall be required to pro-
vide at least the lesser of 15 percent of the total cost
of each bus received or $15,000 per bus.
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(4) In the case of a grant recipient receiving a
grant to demonstrate ultra-low sulfur diesel school
buses, the grant recipient shall be required to provide
documentation to the satisfaction of the Secretary
that diesel fuel containing sulfur at not more than 15
parts per million is available for carrying out the
purposes of the grant, and a commitment by the ap-
plicant to use such fuel in carrying out the purposes
of the grant.
(g) BUSES.—Funding under a grant made under this
section may only be used to demonstrate the use of new al-
ternative fuel school buses or ultra-low sulfur diesel school
buses that—
(1) have a gross vehicle weight greater than
14,000 pounds;
(2) are powered by a heavy duty engine;
(3) in the case of alternative fuel school buses,
emit not more than—
(A) for buses manufactured in model year
2002, 2.5 grams per brake horsepower-hour of
nonmethane hydrocarbons and oxides of nitrogen
and .01 grams per brake horsepower-hour of par-
ticulate matter; and
(B) for buses manufactured in model years
2003 through 2006, 1.8 grams per brake horse-
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power-hour of nonmethane hydrocarbons and ox-
ides of nitrogen and .01 grams per brake horse-
power-hour of particulate matter; and
(4) in the case of ultra-low sulfur diesel school
buses, emit not more than the lesser of—
(A) the emissions of nonmethane hydro-
carbons, oxides of nitrogen, and particulate mat-
ter of the best performing technology of the same
class of ultra-low sulfur diesel school buses com-
mercially available at the time the grant is
made; or
(B) the applicable following amounts—
(i) for buses manufactured in model
year 2002 or 2003, 3.0 grams per brake
horsepower-hour of oxides of nitrogen and
.01 grams per brake horsepower-hour of
particulate matter; and
(ii) for buses manufactured in model
years 2004 through 2006, 2.5 grams per
brake horsepower-hour of nonmethane hy-
drocarbons and oxides of nitrogen and .01
grams per brake horsepower-hour of partic-
ulate matter.
(h) DEPLOYMENT AND DISTRIBUTION.—The Secretary
shall seek to the maximum extent practicable to achieve na-
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tionwide deployment of alternative fuel school buses through
the program under this section, and shall ensure a broad
geographic distribution of grant awards, with a goal of no
State receiving more than 10 percent of the grant funding
made available under this section for a fiscal year.
(i) LIMIT ON FUNDING.—The Secretary shall provide
not less than 20 percent and not more than 25 percent of
the grant funding made available under this section for any
fiscal year for the acquisition of ultra-low sulfur diesel
school buses.
(j) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘alternative fuel school bus’’ means
a bus powered substantially by electricity (including
electricity supplied by a fuel cell), or by liquefied nat-
ural gas, compressed natural gas, liquefied petroleum
gas, hydrogen, propane, or methanol or ethanol at no
less than 85 percent by volume;
(2) the term ‘‘idling’’ means not turning off an
engine while remaining stationary for more than ap-
proximately 3 minutes; and
(3) the term ‘‘ultra-low sulfur diesel school bus’’
means a school bus powered by diesel fuel which con-
tains sulfur at not more than 15 parts per million.
(k) REDUCTION OF SCHOOL BUS IDLING.—Each local
educational agency (as defined in section 9101 of the Ele-
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mentary and Secondary Education Act of 1965 (20 U.S.C.
7801)) that receives Federal funds under the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 6301 et
seq.) is encouraged to develop a policy to reduce the inci-
dence of school buses idling at schools when picking up and
unloading students.
SEC. 815. FUEL CELL BUS DEVELOPMENT AND DEMONSTRA-
TION PROGRAM.
(a) ESTABLISHMENT
OF PROGRAM.—The Secretary
shall establish a program for entering into cooperative
agreements with private sector fuel cell bus developers for
the development of fuel cell-powered school buses, and subse-
quently with not less than two units of local government
using natural gas-powered school buses and such private
sector fuel cell bus developers to demonstrate the use of fuel
cell-powered school buses.
(b) COST SHARING.—The non-Federal contribution for
activities funded under this section shall be not less than—
(1) 20 percent for fuel infrastructure develop-
ment activities; and
(2) 50 percent for demonstration activities and
for development activities not described in paragraph
(1).
(c) FUNDING.—No more than $25,000,000 of the
amounts authorized under section 815 may be used for car-
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rying out this section for the period encompassing fiscal
years 2003 through 2006.
(d) REPORTS TO CONGRESS.—Not later than 3 years
after the date of the enactment of this Act, and not later
than October 1, 2006, the Secretary shall transmit to the
appropriate congressional committees a report that—
(1) evaluates the process of converting natural
gas infrastructure to accommodate fuel cell-powered
school buses; and
(2) assesses the results of the development and
demonstration program under this section.
SEC. 816. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Sec-
retary of Energy for carrying out sections 814 and 815,
to remain available until expended—
(1) $50,000,000 for fiscal year 2003;
(2) $60,000,000 for fiscal year 2004;
(3) $70,000,000 for fiscal year 2005; and
(4) $80,000,000 for fiscal year 2006.
SEC. 817. TEMPORARY BIODIESEL CREDIT EXPANSION.
(a) BIODIESEL CREDIT EXPANSION.—Section 312(b)
of the Energy Policy Act of 1992 (42 U.S.C. 13220(b)) is
amended by striking paragraph (2) and inserting the fol-
lowing:
‘‘(2) USE.—
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‘‘(A) IN
GENERAL.—A fleet or covered
person—
‘‘(i) may use credits allocated under
subsection (a) to satisfy more than 50 per-
cent of the alternative fueled vehicle require-
ments of a fleet or covered person under this
title, title IV, and title V; but
‘‘(ii) may use credits allocated under
subsection (a) to satisfy 100 percent of the
alternative fueled vehicle requirements of a
fleet or covered person under title V for 1 or
more of model years 2002 through 2005.
‘‘(B) APPLICABILITY.—Subparagraph (A)
does not apply to a fleet or covered person that
is a biodiesel alternative fuel provider described
in section 501(a)(2)(A).’’.
(b) TREATMENT AS SECTION 508 CREDITS.—Section
312(c) of the Energy Policy Act of 1992 (42 U.S.C.
13220(c)) is amended—
(1) in the subsection heading, by striking
‘‘CREDIT NOT’’ and inserting ‘‘TREATMENT AS’’; and
(2) by striking ‘‘shall not be considered’’ and in-
serting ‘‘shall be treated as’’.
(c) ALTERNATIVE FUELED VEHICLE STUDY AND RE-
PORT.—
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(1) DEFINITIONS.—In this subsection:
(A) ALTERNATIVE FUEL.—The term ‘‘alter-
native fuel’’ has the meaning given the term in
section 301 of the Energy Policy Act of 1992 (42
U.S.C. 13211).
(B) ALTERNATIVE FUELED VEHICLE.—The
term ‘‘alternative fueled vehicle’’ has the mean-
ing given the term in section 301 of the Energy
Policy Act of 1992 (42 U.S.C. 13211).
(C) LIGHT
DUTY
MOTOR
VEHICLE.—The
term ‘‘light duty motor vehicle’’ has the meaning
given the term in section 301 of the Energy Pol-
icy Act of 1992 (42 U.S.C. 13211).
(D) SECRETARY.—The term ‘‘Secretary’’
means the Secretary of Energy.
(2) BIODIESEL CREDIT EXTENSION STUDY.—As
soon as practicable after the date of enactment of this
Act, the Secretary shall conduct a study—
(A) to determine the availability and cost of
light duty motor vehicles that qualify as alter-
native fueled vehicles under title V of the Energy
Policy Act of 1992 (42 U.S.C. 13251 et seq.);
and
(B) to compare—
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(i) the availability and cost of bio-
diesel; with
(ii) the availability and cost of fuels
that qualify as alternative fuels under title
V of the Energy Policy Act of 1992 (42
U.S.C. 13251 et seq.).
(3) REPORT.—Not later than 1 year after the
date of enactment of this Act, the Secretary shall sub-
mit to Congress a report that—
(A) describes the results of the study con-
ducted under paragraph (2); and
(B) includes any recommendations of the
Secretary for legislation to extend the temporary
credit provided under subsection (a) beyond
model year 2005.
SEC. 818. NEIGHBORHOOD ELECTRIC VEHICLES.
Section 301 of the Energy Policy Act of 1992 (42
U.S.C. 13211) is amended—
(1) by striking ‘‘or a dual fueled vehicle’’ and in-
serting ‘‘, a dual fueled vehicle, or a neighborhood
electric vehicle’’;
(2) by striking ‘‘and’’ at the end of paragraph
(13);
(3) by striking the period at the end of subpara-
graph (14) and inserting ‘‘; and’’; and
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(4) by adding at the end the following:
‘‘(15) the term ‘neighborhood electric vehicle’
means a motor vehicle that qualifies as both—
‘‘(A) a low-speed vehicle, as such term is de-
fined in section 571.3(b) of title 49, Code of Fed-
eral Regulations; and
‘‘(B) a zero-emission vehicle, as such term is
defined in section 86.1703–99 of title 40, Code of
Federal Regulations.’’.
SEC. 819. CREDIT FOR HYBRID VEHICLES, DEDICATED AL-
TERNATIVE FUEL VEHICLES, AND INFRA-
STRUCTURE.
Section 507 of the Energy Policy Act of 1992 (42
U.S.C. 13258) is amended by adding at the end the fol-
lowing:
‘‘(p) CREDITS FOR NEW QUALIFIED HYBRID MOTOR
VEHICLES.—
‘‘(1) DEFINITIONS.—In this subsection:
‘‘(A) 2000 MODEL YEAR CITY FUEL EFFI-
CIENCY.—The term ‘2000 model year city fuel ef-
ficiency’, with respect to a motor vehicle, means
fuel efficiency determined in accordance with the
following tables:
‘‘(i) In the case of a passenger auto-
mobile:
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The 2000 model year city
‘‘If vehicle inertia weight class is:
fuel efficiency is:
1,500 or 1,750 lbs ..........................................................................
43.7 mpg
2,000 lbs ..........................................................................................
38.3 mpg
2,250 lbs ..........................................................................................
34.1 mpg
2,500 lbs ..........................................................................................
30.7 mpg
2,750 lbs ..........................................................................................
27.9 mpg
3,000 lbs ..........................................................................................
25.6 mpg
3,500 lbs ..........................................................................................
22.0 mpg
4,000 lbs ..........................................................................................
19.3 mpg
4,500 lbs ..........................................................................................
17.2 mpg
5,000 lbs ..........................................................................................
15.5 mpg
5,500 lbs ..........................................................................................
14.1 mpg
6,000 lbs ..........................................................................................
12.9 mpg
6,500 lbs ..........................................................................................
11.9 mpg
7,000 to 8,500 lbs ...........................................................................
11.1 mpg.
‘‘(ii) In the case of a light truck:
The 2000 model year city
‘‘If vehicle inertia weight class is:
fuel efficiency is:
1,500 or 1,750 lbs ..........................................................................
37.6 mpg
2,000 lbs ..........................................................................................
33.7 mpg
2,250 lbs ..........................................................................................
30.6 mpg
2,500 lbs ..........................................................................................
28.0 mpg
2,750 lbs ..........................................................................................
25.9 mpg
3,000 lbs ..........................................................................................
24.1 mpg
3,500 lbs ..........................................................................................
21.3 mpg
4,000 lbs ..........................................................................................
19.0 mpg
4,500 lbs ..........................................................................................
17.3 mpg
5,000 lbs ..........................................................................................
15.8 mpg
5,500 lbs ..........................................................................................
14.6 mpg
6,000 lbs ..........................................................................................
13.6 mpg
6,500 lbs ..........................................................................................
12.8 mpg
7,000 to 8,500 lbs ...........................................................................
12.0 mpg.
‘‘(B) ADMINISTRATOR.—The term ‘Adminis-
trator’ means the Administrator of the Environ-
mental Protection Agency.
‘‘(C) ENERGY STORAGE DEVICE.—The term
‘energy storage device’ means an onboard re-
chargeable energy storage system or similar stor-
age device.
‘‘(D) FUEL EFFICIENCY.—The term ‘fuel ef-
ficiency’ means the percentage increased fuel effi-
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ciency specified in table 1 in paragraph (2)(C)
over the average 2000 model year city fuel effi-
ciency of vehicles in the same weight class.
‘‘(E) MAXIMUM
AVAILABLE
POWER.—The
term ‘maximum available power’, with respect to
a new qualified hybrid motor vehicle that is a
passenger vehicle or light truck, means the
quotient obtained by dividing—
‘‘(i) the maximum power available
from the electrical storage device of the new
qualified hybrid motor vehicle, during a
standard 10-second pulse power or equiva-
lent test; by
‘‘(ii) the sum of—
‘‘(I) the maximum power de-
scribed in clause (i); and
‘‘(II) the net power of the internal
combustion or heat engine, as deter-
mined in accordance with standards
established by the Society of Auto-
mobile Engineers.
‘‘(F) MOTOR
VEHICLE.—The term ‘motor
vehicle’ has the meaning given the term in sec-
tion 216 of the Clean Air Act (42 U.S.C. 7550).
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‘‘(G) NEW QUALIFIED HYBRID MOTOR VEHI-
CLE.—The term ‘new qualified hybrid motor ve-
hicle’ means a motor vehicle that—
‘‘(i) draws propulsion energy from
both—
‘‘(I) an internal combustion en-
gine (or heat engine that uses combus-
tible fuel); and
‘‘(II) an energy storage device;
‘‘(ii) in the case of a passenger auto-
mobile or light truck—
‘‘(I) in the case of a 2001 or later
model vehicle, receives a certificate of
conformity under the Clean Air Act
(42 U.S.C. 7401 et seq.) and produces
emissions at a level that is at or below
the applicable qualifying California
low emissions vehicle standards estab-
lished 
under 
authority 
of 
section
243(e)(2) of the Clean Air Act (42
U.S.C. 7583(e)(2)) for that make and
model year; and
‘‘(II) in the case of a 2004 or
later model vehicle, is certified by the
Administrator as producing emissions
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at a level that is at or below the level
established for Bin 5 vehicles in the
Tier 2 regulations promulgated by the
Administrator under section 202(i) of
the Clean Air Act (42 U.S.C. 7521(i))
for that make and model year vehicle;
and
‘‘(iii) employs a vehicle braking system
that recovers waste energy to charge an en-
ergy storage device.
‘‘(H) VEHICLE INERTIA WEIGHT CLASS.—
The term ‘vehicle inertia weight class’ has the
meaning given the term in regulations promul-
gated by the Administrator for purposes of the
administration of title II of the Clean Air Act
(42 U.S.C. 7521 et seq.).
‘‘(2) ALLOCATION.—
‘‘(A) IN GENERAL.—The Secretary shall al-
locate a partial credit to a fleet or covered person
under this title if the fleet or person acquires a
new qualified hybrid motor vehicle that is eligi-
ble to receive a credit under each of the tables in
subparagraph (C).
‘‘(B) AMOUNT.—The amount of a partial
credit allocated under subparagraph (A) for a
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vehicle described in that subparagraph shall be
equal to the sum of—
‘‘(i) the partial credits determined
under table 1 in subparagraph (C); and
‘‘(ii) the partial credits determined
under table 2 in subparagraph (C).
‘‘(C) TABLES.—The tables referred to in
subparagraphs (A) and (B) are as follows:
‘‘Table 1
Amount of
‘‘Partial credit for increased fuel efficiency:
credit:
At least 125% but less than 150% of 2000 model year city
fuel efficiency ......................................................................
0.14
At least 150% but less than 175% of 2000 model year city
fuel efficiency ......................................................................
0.21
At least 175% but less than 200% of 2000 model year city
fuel efficiency ......................................................................
0.28
At least 200% but less than 225% of 2000 model year city
fuel efficiency ......................................................................
0.35
At least 225% but less than 250% of 2000 model year city
fuel efficiency ......................................................................
0.50.
‘‘Table 2
Amount of
‘‘Partial credit for ‘Maximum Available Power’:
credit:
At least 5% but less than 10% ..............................................
0.125
At least 10% but less than 20% ............................................
0.250
At least 20% but less than 30% ............................................
0.375
At least 30% or more .............................................................
0.500.
‘‘(D) USE OF CREDITS.—At the request of a
fleet or covered person allocated a credit under
this subsection, the Secretary shall, for the year
in which the acquisition of the qualified hybrid
motor vehicle is made, treat that credit as the ac-
quisition of 1 alternative fueled vehicle that the
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fleet or covered person is required to acquire
under this title.
‘‘(3) REGULATIONS.—The Secretary shall pro-
mulgate regulations under which any Federal fleet
that acquires a new qualified hybrid motor vehicle
will receive partial credits determined under the ta-
bles contained in paragraph (2)(C) for purposes of
meeting the requirements of section 303.
‘‘(q) CREDIT FOR SUBSTANTIAL CONTRIBUTION TO-
WARDS USE OF DEDICATED VEHICLES IN NONCOVERED
FLEETS.—
‘‘(1) DEFINITIONS.—In this subsection:
‘‘(A) 
DEDICATED
VEHICLE.—The 
term
‘dedicated vehicle’ includes—
‘‘(i) a light, medium, or heavy duty ve-
hicle; and
‘‘(ii) a neighborhood electric vehicle.
‘‘(B) MEDIUM OR HEAVY DUTY VEHICLE.—
The term ‘medium or heavy duty vehicle’ in-
cludes a vehicle that—
‘‘(i) operates solely on alternative fuel;
and
‘‘(ii)(I) in the case of a medium duty
vehicle, has a gross vehicle weight rating of
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more than 8,500 pounds but not more than
14,000 pounds; or
‘‘(II) in the case of a heavy duty vehi-
cle, has a gross vehicle weight rating of
more than 14,000 pounds.
‘‘(C) 
SUBSTANTIAL
CONTRIBUTION.—The
term ‘substantial contribution’ (equal to 1 full
credit) means not less than $15,000 in cash or
in kind services, as determined by the Secretary.
‘‘(2) ISSUANCE
OF
CREDITS.—The Secretary
shall issue a credit to a fleet or covered person under
this title if the fleet or person makes a substantial
contribution toward the acquisition and use of dedi-
cated vehicles by a person that owns, operates, leases,
or otherwise controls a fleet that is not covered by this
title.
‘‘(3) MULTIPLE
CREDITS
FOR
MEDIUM
AND
HEAVY DUTY DEDICATED VEHICLES.—The Secretary
shall issue 2 full credits to a fleet or covered person
under this title if the fleet or person acquires a me-
dium or heavy duty dedicated vehicle.
‘‘(4) USE OF CREDITS.—At the request of a fleet
or covered person allocated a credit under this sub-
section, the Secretary shall, for the year in which the
acquisition of the dedicated vehicle is made, treat that
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credit as the acquisition of 1 alternative fueled vehicle
that the fleet or covered person is required to acquire
under this title.
‘‘(5) LIMITATION.—Per vehicle credits acquired
under this subsection shall not exceed the per vehicle
credits allowed under this section to a fleet for quali-
fying vehicles in each of the weight categories (light,
medium, or heavy duty).
‘‘(r) CREDIT FOR SUBSTANTIAL INVESTMENT IN AL-
TERNATIVE FUEL INFRASTRUCTURE.—
‘‘(1) DEFINITIONS.—In this section, the term
‘qualifying infrastructure’ means—
‘‘(A) equipment required to refuel or re-
charge alternative fueled vehicles;
‘‘(B) facilities or equipment required to
maintain, repair, or operate alternative fueled
vehicles;
‘‘(C) training programs, educational mate-
rials, or other activities necessary to provide in-
formation regarding the operation, maintenance,
or benefits associated with alternative fueled ve-
hicles; and
‘‘(D) such other activities the Secretary con-
siders to constitute an appropriate expenditure
in support of the operation, maintenance, or fur-
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ther widespread adoption of or utilization of al-
ternative fueled vehicles.
‘‘(2) ISSUANCE
OF
CREDITS.—The Secretary
shall issue a credit to a fleet or covered person under
this title for investment in qualifying infrastructure
if the qualifying infrastructure is open to the general
public during regular business hours.
‘‘(3) AMOUNT.—For the purposes of credits
under this subsection—
‘‘(A) 1 credit shall be equal to a minimum
investment of $25,000 in cash or in kind serv-
ices, as determined by the Secretary; and
‘‘(B) except in the case of a Federal or State
fleet, no part of the investment may be provided
by Federal or State funds.
‘‘(4) USE OF CREDITS.—At the request of a fleet
or covered person allocated a credit under this sub-
section, the Secretary shall, for the year in which the
investment is made, treat that credit as the acquisi-
tion of 1 alternative fueled vehicle that the fleet or
covered person is required to acquire under this
title.’’.
SEC. 820. RENEWABLE CONTENT OF MOTOR VEHICLE FUEL.
(a) IN GENERAL.—Section 211 of the Clean Air Act
(42 U.S.C. 7545) is amended—
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(1) by redesignating subsection (o) as subsection
(q); and
(2) by inserting after subsection (n) the fol-
lowing:
‘‘(o) RENEWABLE FUEL PPROGRAM.—
‘‘(1) DEFINITIONS.—In this section:
‘‘(A) CELLULOSIC BIOMASS ETHANOL.—The
term ‘cellulosic biomass ethanol’ means ethanol
derived from any lignocellulosic or hemicellulosic
matter that is available on a renewable or recur-
ring basis, including—
‘‘(i) dedicated energy crops and trees;
‘‘(ii) wood and wood residues;
‘‘(iii) plants;
‘‘(iv) grasses;
‘‘(v) agricultural residues;
‘‘(vi) fibers;
‘‘(vii) animal wastes and other waste
materials; and
‘‘(viii) municipal solid waste.
‘‘(B) RENEWABLE FUEL.—
‘‘(i) IN GENERAL.—The term ‘renew-
able fuel’ means motor vehicle fuel that—
‘‘(I)(aa) is produced from grain,
starch, oilseeds, or other biomass; or
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‘‘(bb) is natural gas produced
from a biogas source, including a land-
fill, sewage waste treatment plant,
feedlot, or other place where decaying
organic material is found; and
‘‘(II) is used to replace or reduce
the quantity of fossil fuel present in a
fuel mixture used to operate a motor
vehicle.
‘‘(ii) INCLUSION.—The term ‘renewable
fuel’ includes cellulosic biomass ethanol and
biodiesel (as defined in section 312(f) of the
Energy Policy Act of 1992 (42 U.S.C.
13220(f)).
‘‘(C) SMALL
REFINERY.—The term ‘small
refinery’ means a refinery for which average ag-
gregate daily crude oil throughput for the cal-
endar year (as determined by dividing the aggre-
gate throughput for the calendar year by the
number of days in the calendar year) does not
exceed 75,000 barrels.
‘‘(2) RENEWABLE FUEL PROGRAM.—
‘‘(A) IN GENERAL.—Not later than 1 year
from enactment of this provision, the Adminis-
trator shall promulgate regulations ensuring that
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gasoline sold or dispensed to consumers in the
United States, on an annual average basis, con-
tains the applicable volume of renewable fuel as
specified in subparagraph (B). Regardless of the
date of promulgation, such regulations shall con-
tain compliance provisions for refiners, blenders,
and importers, as appropriate, to ensure that the
requirements of this section are met, but shall
not restrict where renewables can be used, or im-
pose any per-gallon obligation for the use of re-
newables. If the Administrator does not promul-
gate such regulations, the applicable percentage,
on a volume percentage of gasoline basis, shall be
1.62 in 2004.
‘‘(B) APPLICABLE VOLUME.—
(i) CALENDAR
YEARS
2004
THROUGH
2012.—For the purpose of subparagraph (A),
the applicable volume for any of calendar
years 2004 through 2012 shall be deter-
mined in accordance with the following
table:
Applicable volume of renewable fuel
‘‘Calendar year:
(In billions of gallons)
2004 ............................................................................................
2.3
2005 ............................................................................................
2.6
2006 ............................................................................................
2.9
2007 ............................................................................................
3.2
2008 ............................................................................................
3.5
2009 ............................................................................................
3.9
2010 ............................................................................................
4.3
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‘‘Calendar year:
(In billions of gallons)
2011 ............................................................................................
4.7
2012 ............................................................................................
5.0.
‘‘(ii) 
CALENDAR
YEAR
2013
AND
THEREAFTER.—For the purpose of subpara-
graph (A), the applicable volume for cal-
endar year 2013 and each calendar year
thereafter shall be equal to the product ob-
tained by multiplying—
‘‘(I) the number of gallons of gaso-
line that the Administrator estimates
will be sold or introduced into com-
merce in the calendar year; and
‘‘(II) the ratio that—
‘‘(aa) 5.0 billion gallons of
renewable fuels; bears to
‘‘(bb) the number of gallons
of gasoline sold or introduced into
commerce in calendar year 2012.
‘‘(3) 
APPLICABLE
PERCENTAGES.—Not 
later
than October 31 of each calendar year, through 2011,
the Administrator of the Energy Information Admin-
istration shall provide the Administrator an estimate
of the volumes of gasoline sales in the United States
for the coming calendar year. Based on such esti-
mates, the Administrator shall by November 30 of
each calendar year, through 2011, determine and pub-
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lish in the Federal Register, the renewable fuel obliga-
tion, on a volume percentage of gasoline basis, appli-
cable to refiners, blenders, distributors and importers,
as appropriate, for the coming calendar year, to en-
sure that the requirements of paragraph (2) are met.
For each calendar year, the Administrator shall es-
tablish a single applicable percentage that applies to
all parties, and make provision to avoid redundant
obligations. In determining the applicable percent-
ages, the Administrator shall make adjustments to ac-
count for the use of renewable fuels by exempt small
refineries during the previous year.
‘‘(4) CELLULOSIC BIOMASS ETHANOL.—For the
purpose of paragraph (2), 1 gallon of cellulosic bio-
mass ethanol shall be considered to be the equivalent
of 1.5 gallon of renewable fuel.
‘‘(5) CREDIT PROGRAM.—
‘‘(A) IN
GENERAL.—The regulations pro-
mulgated to carry out this subsection shall pro-
vide for the generation of an appropriate
amount of credits by any person that refines,
blends, or imports gasoline that contains a quan-
tity of renewable fuel that is greater than the
quantity required under paragraph (2). Such
regulations shall provide for the generation of an
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appropriate amount of credits for biodiesel fuel.
If a small refinery notifies the Administrator
that it waives the exemption provided by this
Act, the regulations shall provide for the genera-
tion of credits by the small refinery beginning in
the year following such notification.
‘‘(B) USE OF CREDITS.—A person that gen-
erates credits under subparagraph (A) may use
the credits, or transfer all or a portion of the
credits to another person, for the purpose of com-
plying with paragraph (2).
‘‘(C) LIFE OF CREDITS.—A credit generated
under this paragraph shall be valid to show com-
pliance:
(i) in the calendar year in which the
credit was generated or the next calendar
year, or
(ii) in the calendar year in which the
credit was generated or next two consecutive
calendar years if the Administrator promul-
gates regulations under paragraph (6).
‘‘(D) INABILITY TO PURCHASE SUFFICIENT
CREDITS.—The regulations promulgated to carry
out this subsection shall include provisions al-
lowing any person that is unable to generate or
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purchase sufficient credits to meet the require-
ments under paragraph (2) to carry forward a
renewables deficit provided that, in the calendar
year following the year in which the renewables
deficit is created, such person shall achieve com-
pliance with the renewables requirement under
paragraph (2), and shall generate or purchase
additional renewables credits to offset the renew-
ables deficit of the previous year.
‘‘(6) SEASONAL
VARIATIONS
IN
RENEWABLE
FUEL USE.—
‘‘(A) STUDY.—For each of calendar years
2004 through 2012, the Administrator of the En-
ergy Information Administration, shall conduct
a study of renewable fuels blending to determine
whether there are excessive seasonal variations in
the use of renewable fuels.
‘‘(B) REGULATION OF EXCESSIVE SEASONAL
VARIATIONS.—If, for any calendar year, the Ad-
ministrator of the Energy Information Adminis-
tration, based on the study under subparagraph
(A), makes the determinations specified in sub-
paragraph (C), the Administrator shall promul-
gate regulations to ensure that 35 percent or
more of the quantity of renewable fuels necessary
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to meet the requirement of paragraph (2) is used
during each of the periods specified in subpara-
graph (D) of each subsequent calendar year.
‘‘(C) DETERMINATIONS.—The determina-
tions referred to in subparagraph (B) are that—
‘‘(i) less than 35 percent of the quan-
tity of renewable fuels necessary to meet the
requirement of paragraph (2) has been used
during one of the periods specified in sub-
paragraph (D) of the calendar year; and
‘‘(ii) a pattern of excessive seasonal
variation described in clause (i) will con-
tinue in subsequent calendar years.
‘‘(D) PERIODS.—The two periods referred to
in this paragraph are—
‘‘(i) April through September; and
‘‘(ii) January through March and Oc-
tober through December.
‘‘(E) EXCLUSIONS.—Renewable fuels blend-
ed or consumed in 2004 in a state which has re-
ceived a waiver under section 209(b) shall not be
included in the study in subparagraph (A).
‘‘(7) WAIVERS.—
‘‘(A) IN GENERAL.—The Administrator, in
consultation with the Secretary of Agriculture
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and the Secretary of Energy, may waive the re-
quirement of paragraph (2) in whole or in part
on petition by one or more States by reducing
the national quantity of renewable fuel required
under this subsection—
‘‘(i) based on a determination by the
Administrator, after public notice and op-
portunity for comment, that implementa-
tion of the requirement would severely harm
the economy or environment of a State, a
region, or the United States; or
‘‘(ii) based on a determination by the
Administrator, after public notice and op-
portunity for comment, that there is an in-
adequate domestic supply or distribution
capacity to meet the requirement.
‘‘(B) PETITIONS
FOR
WAIVERS.—The Ad-
ministrator, in consultation with the Secretary
of Agriculture and the Secretary of Energy, shall
approve or disapprove a State petition for a
waiver of the requirement of paragraph (2) with-
in 90 days after the date on which the petition
is received by the Administrator.
‘‘(C) TERMINATION OF WAIVERS.—A waiver
granted under subparagraph (A) shall terminate
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after 1 year, but may be renewed by the Admin-
istrator after consultation with the Secretary of
Agriculture and the Secretary of Energy.
‘‘(8) STUDY AND WAIVER FOR INITIAL YEAR OF
PROGRAM.—Not later than 180 days from enactment,
the Secretary of Energy shall complete for the Admin-
istrator a study assessing whether the renewable fuels
requirement under paragraph (2) will likely result in
significant adverse consumer impacts in 2004, on a
national, regional or state basis. Such study shall
evaluate renewable fuel supplies and prices, blendstock
supplies, and supply and distribution system capa-
bilities. Based on such study, the Secretary shall
make specific recommendations to the Administrator
regarding waiver of the requirements of paragraph
(2), in whole or in part, to avoid any such adverse
impacts. Within 270 days from enactment, the Ad-
ministrator shall, consistent with the recommenda-
tions of the Secretary waive, in whole or in part, the
renewable fuels requirement under paragraph (2) by
reducing the national quantity of renewable fuel re-
quired under this subsection in 2004. This provision
shall not be interpreted as limiting the Administra-
tor’s authority to waive the requirements of para-
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graph (2) in whole, or in part, under paragraph (7),
pertaining to waivers.
‘‘(9) SMALL REFINERIES.—
‘‘(A) IN
GENERAL.—The requirement of
paragraph (2) shall not apply to small refineries
until January 1, 2008. Not later than December
31, 2006, the Secretary of Energy shall complete
for the Administrator a study to determine
whether the requirement of paragraph (2) would
impose a disproportionate economic hardship on
small refineries. For any small refinery that the
Secretary of Energy determines would experience
a disproportionate economic hardship, the Ad-
ministrator shall extend the small refinery ex-
emption for such small refinery for no less than
two additional years.
‘‘(B) ECONOMIC HARDSHIP.—
‘‘(i) EXTENSION
OF
EXEMPTION.—A
small refinery may at any time petition the
Administrator for an extension of the ex-
emption from the requirement of paragraph
(2) for the reason of disproportionate eco-
nomic hardship. In evaluating a hardship
petition, the Administrator, in consultation
with the Secretary of Energy, shall consider
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the findings of the study in addition to
other economic factors.
‘‘(ii) DEADLINE FOR ACTION ON PETI-
TIONS.—The Administrator shall act on
any petition submitted by a small refinery
for a hardship exemption not later than 90
days after the receipt of the petition.
‘‘(C) CREDIT PROGRAM.—If a small refin-
ery notifies the Administrator that it waives the
exemption provided by this Act, the regulations
shall provide for the generation of credits by the
small refinery beginning in the year following
such notification.
‘‘(D) OPT-IN
FOR
SMALL
REFINERS.—A
small refinery shall be subject to the require-
ments of this section if it notifies the Adminis-
trator that it waives the exemption under sub-
paragraph (A).
(b) PENALTIES AND ENFORCEMENT.—Section 211(d)
of the Clean Air Act (42 U.S.C. 7545(d)) is amended—
(1) in paragraph (1)—
(A) in the first sentence, by striking ‘‘or
(n)’’ each place it appears and inserting ‘‘(n) or
(o)’’; and
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(B) in the second sentence, by striking ‘‘or
(m)’’ and inserting ‘‘(m), or (o)’’; and
(2) in the first sentence of paragraph (2), by
striking ‘‘and (n)’’ each place it appears and insert-
ing ‘‘(n), and (o)’’.
(c) EXCLUSION FROM ETHANOL WAIVER.—Section
211(h) of the Clean Air Act (42 U.S.C. 7545(h)) is
amended—
(1) by redesignating paragraph (5) as para-
graph (6); and
(2) by inserting after paragraph (4) the fol-
lowing:
‘‘(5) EXCLUSION FROM ETHANOL WAIVER.—
‘‘(A) PROMULGATION
OF
REGULATIONS.—
Upon notification, accompanied by supporting
documentation, from the Governor of a State
that the Reid vapor pressure limitation estab-
lished by paragraph (4) will increase emissions
that contribute to air pollution in any area in
the State, the Administrator shall, by regulation,
apply, in lieu of the Reid vapor pressure limita-
tion established by paragraph (4), the Reid
vapor pressure limitation established by para-
graph (1) to all fuel blends containing gasoline
and 10 percent denatured anhydrous ethanol
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that are sold, offered for sale, dispensed, sup-
plied, offered for supply, transported or intro-
duced into commerce in the area during the high
ozone season.
‘‘(B) DEADLINE FOR PROMULGATION.—The
Administrator 
shall 
promulgate 
regulations
under subparagraph (A) not later than 90 days
after the date of receipt of a notification from a
Governor under that subparagraph.
‘‘(C) EFFECTIVE DATE.—
‘‘(i) IN GENERAL.—With respect to an
area in a State for which the Governor sub-
mits a notification under subparagraph
(A), the regulations under that subpara-
graph shall take effect on the later of—
‘‘(I) the first day of the first high
ozone season for the area that begins
after the date of receipt of the notifica-
tion; or
‘‘(II) 1 year after the date of re-
ceipt of the notification.
‘‘(ii) EXTENSION OF EFFECTIVE DATE
BASED
ON
DETERMINATION
OF
INSUFFI-
CIENT SUPPLY.—
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‘‘(I) IN
GENERAL.—If, after re-
ceipt of a notification with respect to
an area from a Governor of a State
under subparagraph (A), the Adminis-
trator determines, on the Administra-
tor’s own motion or on petition of any
person and after consultation with the
Secretary of Energy, that the promul-
gation of regulations described in sub-
paragraph (A) would result in an in-
sufficient supply of gasoline in the
State, 
the 
Administrator, 
by
regulation—
‘‘(aa) shall extend the effec-
tive date of the regulations under
clause (i) with respect to the area
for not more than 1 year; and
‘‘(bb) may renew the exten-
sion under item (aa) for two ad-
ditional periods, each of which
shall not exceed 1 year.
‘‘(II) DEADLINE FOR ACTION ON
PETITIONS.—The Administrator shall
act on any petition submitted under
subclause (I) not later than 180 days
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after the date of receipt of the peti-
tion.’’.
(d) SURVEY OF RENEWABLE FUEL MARKET.—
(1) SURVEY AND REPORT.—Not later than De-
cember 1, 2005, and annually thereafter, the Admin-
istrator shall—
(A) conduct, with respect to each conven-
tional gasoline use area and each reformulated
gasoline use area in each State, a survey to de-
termine the market shares of—
(i) conventional gasoline containing
ethanol;
(ii) reformulated gasoline containing
ethanol;
(iii) conventional gasoline containing
renewable fuel; and
(iv) reformulated gasoline containing
renewable fuel; and
(B) submit to Congress, and make publicly
available, a report on the results of the survey
under subparagraph (A).
(2) RECORDKEEPING AND REPORTING REQUIRE-
MENTS.—The Administrator may require any refiner,
blender, or importer to keep such records and make
such reports as are necessary to ensure that the survey
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conducted under paragraph (1) is accurate. The Ad-
ministrator shall rely, to the extent practicable, on ex-
isting reporting and recordkeeping requirements to
avoid duplicative requirements.
(3) APPLICABLE
LAW.—Activities carried out
under this subsection shall be conducted in a manner
designed to protect confidentiality of individual re-
sponses.
(e) RENEWABLE FUELS SAFE HARBOR.—
(1) IN
GENERAL.—Notwithstanding any other
provision of federal or state law, no renewable fuel, as
defined by this Act, used or intended to be used as a
motor vehicle fuel, nor any motor vehicle fuel con-
taining such renewable fuel, shall be deemed defective
in design or manufacture by virtue of the fact that it
is, or contains, such a renewable fuel, if it does not
violate a control or prohibition imposed by the Ad-
ministrator under section 211 of the Clean Air Act,
as amended by this Act, and the manufacturer is in
compliance with all requests for information under
section 211(b) of the Clean Air Act, as amended by
this Act. In the event that the safe harbor under this
section does not apply, the existence of a design defect
or manufacturing defect shall be determined under
otherwise applicable law.
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(2) EXCEPTIONS.—This subsection shall not
apply to ethers.
(3) EFFECTIVE DATE.—This subsection shall be
effective as of the date of enactment and shall apply
with respect to all claims filed on or after that date.
SEC. 820A. FEDERAL AGENCY ETHANOL-BLENDED GASO-
LINE AND BIODIESEL PURCHASING REQUIRE-
MENT.
Title III of the Energy Policy Act of 1992 is amended
by striking section 306 (42 U.S.C. 13215) and inserting the
following:
‘‘SEC. 306. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE
AND BIODIESEL PURCHASING REQUIREMENT.
‘‘(a) ETHANOL-BLENDED GASOLINE.—The head of
each Federal agency shall ensure that, in areas in which
ethanol-blended gasoline is reasonably available at a gen-
erally competitive price, the Federal agency purchases eth-
anol-blended gasoline containing at least 10 percent ethanol
rather than nonethanol-blended gasoline, for use in vehicles
used by the agency that use gasoline.
‘‘(b) BIODIESEL.—
‘‘(1) DEFINITION OF BIODIESEL.—In this sub-
section, the term ‘biodiesel’ has the meaning given the
term in section 312(f).
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‘‘(2) REQUIREMENT.—The head of each Federal
agency shall ensure that the Federal agency pur-
chases, for use in fueling fleet vehicles that use diesel
fuel used by the Federal agency at the location at
which fleet vehicles of the Federal agency are centrally
fueled, in areas in which the biodiesel-blended diesel
fuel described in paragraphs (A) and (B) is available
at a generally competitive price—
‘‘(A) as of the date that is 5 years after the
date of enactment of this paragraph, biodiesel-
blended diesel fuel that contains at least 2 per-
cent biodiesel, rather than nonbiodiesel-blended
diesel fuel; and
‘‘(B) as of the date that is 10 years after the
date of enactment of this paragraph, biodiesel-
blended diesel fuel that contains at least 20 per-
cent biodiesel, rather than nonbiodiesel-blended
diesel fuel.
‘‘(3) REQUIREMENT
OF FEDERAL LAW.—The
provisions of this subsection shall not be considered a
requirement of Federal law for the purposes of section
312.
‘‘(c) EXEMPTION.—This section does not apply to fuel
used in vehicles excluded from the definition of ‘fleet’ by
subparagraphs (A) through (H) of section 301(9).’’.
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SEC. 820B. COMMERCIAL BYPRODUCTS FROM MUNICIPAL
SOLID WASTE LOAN GUARANTEE PROGRAM.
(a) DEFINITION OF MUNICIPAL SOLID WASTE.—In
this section, the term ‘‘municipal solid waste’’ has the
meaning given the term ‘‘solid waste’’ in section 1004 of
the Solid Waste Disposal Act (42 U.S.C. 6903).
(b) ESTABLISHMENT OF PROGRAM.—The Secretary of
Energy shall establish a program to provide guarantees of
loans by private institutions for the construction of facili-
ties for the processing and conversion of municipal solid
waste into fuel ethanol and other commercial byproducts.
(c) REQUIREMENTS.—The Secretary may provide a
loan guarantee under subsection (b) to an applicant if—
(1) without a loan guarantee, credit is not avail-
able to the applicant under reasonable terms or condi-
tions sufficient to finance the construction of a facil-
ity described in subsection (b);
(2) the prospective earning power of the appli-
cant and the character and value of the security
pledged provide a reasonable assurance of repayment
of the loan to be guaranteed in accordance with the
terms of the loan; and
(3) the loan bears interest at a rate determined
by the Secretary to be reasonable, taking into account
the current average yield on outstanding obligations