A bill to promote renewable fuel and energy security of the United States, and for other purposes.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Biofuels Security 
Act of 2006''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                        TITLE I--RENEWABLE FUELS

Sec. 101. Renewable fuel program.
Sec. 102. Installation of E-85 fuel pumps by major oil companies at 
                            owned stations and branded stations.
Sec. 103. Minimum Federal fleet requirement.
Sec. 104. Application of Gasohol Competition Act of 1980.
                   TITLE II--DUAL FUELED AUTOMOBILES

Sec. 201. Requirement to manufacture dual fueled automobiles.
Sec. 202. Manufacturing incentives for dual fueled automobiles.

                        TITLE I--RENEWABLE FUELS

SEC. 101. RENEWABLE FUEL PROGRAM.

    Section 211(o)(2) of the Clean Air Act (42 U.S.C. 7545(o)(2)) is 
amended by striking subparagraph (B) and inserting the following:
                    ``(B) Applicable volume.--
                            ``(i) In general.--For the purpose of 
                        subparagraph (A), the applicable volume for 
                        calendar year 2010 and each calendar year 
                        thereafter shall be determined, by rule, by the 
                        Administrator, in consultation with the 
                        Secretary of Agriculture and the Secretary of 
                        Energy, in a manner that ensures that--
                                    ``(I) the requirements described in 
                                clause (ii) for specified calendar 
                                years are met; and
                                    ``(II) the applicable volume for 
                                each calendar year not specified in 
                                clause (ii) is determined on an annual 
                                basis.
                            ``(ii) Requirements.--The requirements 
                        referred to in clause (i) are--
                                    ``(I) for calendar year 2010, at 
                                least 10,000,000,000 gallons of 
                                renewable fuel;
                                    ``(II) for calendar year 2020, at 
                                least 30,000,000,000 gallons of 
                                renewable fuel; and
                                    ``(III) for calendar year 2030, at 
                                least 60,000,000,000 gallons of 
                                renewable fuel.''.

SEC. 102. INSTALLATION OF E-85 FUEL PUMPS BY MAJOR OIL COMPANIES AT 
              OWNED STATIONS AND BRANDED STATIONS.

    Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is amended 
by adding at the end the following:
            ``(11) Installation of e-85 fuel pumps by major oil 
        companies at owned stations and branded stations.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) E-85 fuel.--The term `E-85 fuel' 
                        means a blend of gasoline approximately 85 
                        percent of the content of which is derived from 
                        ethanol produced in the United States.
                            ``(ii) Major oil company.--The term `major 
                        oil company' means any person that, 
                        individually or together with any other person 
                        with respect to which the person has an 
                        affiliate relationship or significant ownership 
                        interest, has not less than 4,500 retail 
                        station outlets according to the latest 
                        publication of the Petroleum News Annual 
                        Factbook.
                            ``(iii) Secretary.--The term `Secretary' 
                        means the Secretary of Energy, acting in 
                        consultation with the Administrator of the 
                        Environmental Protection Agency and the 
                        Secretary of Agriculture.
                    ``(B) Regulations.--The Secretary shall promulgate 
                regulations to ensure that each major oil company that 
                sells or introduces gasoline into commerce in the 
                United States through wholly-owned stations or branded 
                stations installs or otherwise makes available 1 or 
                more pumps that dispense E-85 fuel (including any other 
                equipment necessary, such as including tanks, to ensure 
                that the pumps function properly) at not less than the 
                applicable percentage of the wholly-owned stations and 
                the branded stations of the major oil company specified 
                in subparagraph (C).
                    ``(C) Applicable percentage.--For the purpose of 
                subparagraph (B), the applicable percentage of the 
                wholly-owned stations and the branded stations shall be 
                determined in accordance with the following table:

                                               Applicable percentage of
                                                  wholly-owned stations
                                                   and branded stations
``Calendar year:                                             (percent):
    2007..........................................                   5 
    2008..........................................                  10 
    2009..........................................                  15 
    2010..........................................                  20 
    2011..........................................                  25 
    2012..........................................                  30 
    2013..........................................                  35 
    2014..........................................                  40 
    2015..........................................                  45 
    2016 and each calendar year thereafter........                  50.
                    ``(D) Geographic distribution.--
                            ``(i) In general.--Subject to clause (ii), 
                        in promulgating regulations under subparagraph 
                        (B), the Secretary shall ensure that each major 
                        oil company described in subparagraph (B) 
                        installs or otherwise makes available 1 or more 
                        pumps that dispense E-85 fuel at not less than 
                        a minimum percentage (specified in the 
                        regulations) of the wholly-owned stations and 
                        the branded stations of the major oil company 
                        in each State.
                            ``(ii) Requirement.--In specifying the 
                        minimum percentage under clause (i), the 
                        Secretary shall ensure that each major oil 
                        company installs or otherwise makes available 1 
                        or more pumps described in that clause in each 
                        State in which the major oil company operates.
                    ``(E) Financial responsibility.--In promulgating 
                regulations under subparagraph (B), the Secretary shall 
                ensure that each major oil company described in that 
                subparagraph assumes full financial responsibility for 
                the costs of installing or otherwise making available 
                the pumps described in that subparagraph and any other 
                equipment necessary (including tanks) to ensure that 
                the pumps function properly.
                    ``(F) Production credits for exceeding e-85 fuel 
                pumps installation requirement.--
                            ``(i) Earning and period for applying 
                        credits.--If the percentage of the wholly-owned 
                        stations and the branded stations of a major 
                        oil company at which the major oil company 
                        installs E-85 fuel pumps in a particular 
                        calendar year exceeds the percentage required 
                        under subparagraph (C), the major oil company 
                        earns credits under this paragraph, which may 
                        be applied to any of the 3 consecutive calendar 
                        years immediately after the calendar year for 
                        which the credits are earned.
                            ``(ii) Trading credits.--Subject to clause 
                        (iii), a major oil company that has earned 
                        credits under clause (i) may sell credits to 
                        another major oil company to enable the 
                        purchaser to meet the requirement under 
                        subparagraph (C).
                            ``(iii) Exception.--A major oil company may 
                        not use credits purchased under clause (ii) to 
                        fulfill the geographic distribution requirement 
                        in subparagraph (D).''.

SEC. 103. MINIMUM FEDERAL FLEET REQUIREMENT.

    Section 303(b)(1) of the Energy Policy Act of 1992 (42 U.S.C. 
13212(b)(1)) is amended--
            (1) in subparagraph (C), by striking ``and'' after the 
        semicolon;
            (2) in subparagraph (D), by striking ``fiscal year 1999 and 
        thereafter'' and inserting ``each of fiscal years 1999 through 
        2006; and''; and
            (3) by inserting after subparagraph (D) the following:
                    ``(E) 100 percent in fiscal year 2007 and 
                thereafter,''.

SEC. 104. 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 subsection (d);
            (2) by inserting after subsection (b) the following:
    ``(c) For purposes of subsection (a), restricting the right of a 
franchisee to install on the premises of that franchisee a renewable 
fuel pump, such as one that dispenses E-85, shall be considered an 
unlawful restriction.''; and
            (3) in subsection (d) (as redesignated by paragraph (1))--
                    (A) by striking ``section,'' 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.''.

                   TITLE II--DUAL FUELED AUTOMOBILES

SEC. 201. 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:
``Sec. 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 such automobiles, manufactured in any model year after 
model year 2006 and distributed in commerce for sale in the United 
States, which are dual fueled automobiles is equal to not less than the 
applicable percentage set forth in the following table:

                                                 The percentage of dual
                                                     fueled automobiles
For each of the following model                      manufactured shall
years:                                                be not less than:
    2007..........................................                  10 
    2008..........................................                  20 
    2009..........................................                  30 
    2010..........................................                  40 
    2011..........................................                  50 
    2012..........................................                  60 
    2013..........................................                  70 
    2014..........................................                  80 
    2015..........................................                  90 
    2016 and beyond...............................                 100.
    ``(b) Production Credits for Exceeding Flexible 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 model year exceeds the number 
        required under subsection (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 purchaser 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) Activities to Promote the Use of Certain Alternative Fuels.--
The Secretary of Transportation shall carry out activities to promote 
the use of fuel mixtures containing gasoline or diesel fuel and 1 or 
more alternative fuels, including a mixture containing at least 85 
percent of methanol, denatured ethanol, and other alcohols by volume 
with gasoline or other fuels, to power automobiles in the United 
States.

SEC. 202. MANUFACTURING INCENTIVES FOR DUAL FUELED AUTOMOBILES.

    Section 32905(b) of title 49, United States Code, is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively;
            (2) by inserting ``(1)'' before ``Except'';
            (3) by striking ``model years 1993-2010'' and inserting 
        ``model year 1993 through the first model year beginning not 
        less than 18 months after the date of enactment of the Biofuels 
        Security Act of 2006''; and
            (4) by adding at the end the following:
            ``(2) Except as provided in paragraph (5) of this 
        subsection, subsection (d) of this section, or section 
        32904(a)(2) of this title, the Administrator shall measure the 
        fuel economy for each model of dual fueled automobiles 
        manufactured by a manufacturer in the first model year 
        beginning not less than 30 months after the date of enactment 
        of the Biofuels Security Act of 2006 by dividing 1.0 by the sum 
        of--
                    ``(A) 0.7 divided by the fuel economy measured 
                under section 32904(c) of this title when operating the 
                model on gasoline or diesel fuel; and
                    ``(B) 0.3 divided by the fuel economy measured 
                under subsection (a) when operating the model on 
                alternative fuel.
            ``(3) Except as provided in paragraph (5) of this 
        subsection, subsection (d) of this section, or section 
        32904(a)(2) of this title, the Administrator shall measure the 
        fuel economy for each model of dual fueled automobiles 
        manufactured by a manufacturer in the first model year 
        beginning not less than 42 months after the date of enactment 
        of the Biofuels Security Act of 2006 by dividing 1.0 by the sum 
        of--
                    ``(A) 0.9 divided by the fuel economy measured 
                under section 32904(c) of this title when operating the 
                model on gasoline or diesel fuel; and
                    ``(B) 0.1 divided by the fuel economy measured 
                under subsection (a) when operating the model on 
                alternative fuel.
            ``(4) Except as provided in subsection (d) of this section, 
        or section 32904(a)(2) of this title, the Administrator shall 
        measure the fuel economy for each model of dual fueled 
        automobiles manufactured by a manufacturer in each model year 
        beginning not less than 54 months after the date of enactment 
        of the Biofuels Security Act of 2006 in accordance with section 
        32904(c) of this title.
            ``(5) Notwithstanding paragraphs (2) through (4) of this 
        subsection, the fuel economy for all dual fueled automobiles 
        manufactured to comply with the requirements under section 
        32902A(a) of this title, including automobiles for which dual 
        fueled automobile credits have been used or traded under 
        section 32902A(b) of this title, shall be measured in 
        accordance with section 32904(c) of this title.''.

Summary: Biofuels Security Act of 2006 - Amends the Clean Air Act to replace provisions prescribing the volume of renewable fuel that gasoline sold in the United States must contain with provisions that require the Administrator of the Environmental Protection Agency (EPA) to determine the applicable volume for 2010 and beyond. Requires such volume to be at least 10 billion gallons in 2010, 30 billion gallons in 2020, and 60 billion gallons in 2030.

Requires the Secretary of Energy to promulgate regulations to ensure that each major oil company that sells gasoline in the United States through wholly-owned or branded stations provides pumps that dispense E-85 fuel (a blend approximately 85% of the content of which is derived from ethanol produced in the United States) at not less than: (1) a specified percentage of all of its stations (increasing from 5% in 2007 to 50% in 2016); and (2) a minimum percentage of its stations in each state. Allows a company to earn and sell production credits when it exceeds the percentage required. Prohibits companies from using credits purchased to fulfill geographic distribution requirements.

Amends the Energy Policy Act of 1992 to increase to 100% the proportion of vehicles acquired by a federal fleet in and after 2007 that must be light duty alternative fueled vehicles.

Amends the Clayton Act to: (1) prohibit restricting the right of a franchisee to install a renewable fuel pump; and (2) define "gasohol" as any blend of ethanol and gasoline.

Requires makers of new automobiles capable of operating on gasoline or diesel fuel to ensure that a specified percentage of automobiles manufactured in any model year after 2006 for sale in the United States (increasing from 10% in 2007 to 100% in 2016) are dual fueled automobiles. Allows the manufacturer to earn and sell production credits if it exceeds the number required.

Requires the Secretary of Transportation to promote the use of fuel mixtures containing gasoline or diesel fuel and one or more alternative fuels.

Prescribes formulas to be used by the Administrator to measure the fuel economy of dual fueled automobiles manufactured in model years beginning 18, 30, 42, and 54 months after enactment of this Act.