109th CONGRESS
2d Session
S. 2446
To promote the national security and stability of the economy of
the United States by reducing the dependence of the United States on oil
through the use of alternative fuels and new technology, and for other purposes.
IN THE SENATE OF THE UNITED STATES
March 16 (legislative day, MARCH 15), 2006
Mr. OBAMA (for himself and Mr. LUGAR) introduced the following bill; which
was read twice and referred to the Committee on Finance
A BILL
To promote the national security and stability of the economy of
the United States by reducing the dependence of the United States on oil
through the use of alternative fuels and new technology, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `American Fuels Act of 2006'.
SEC. 2. OFFICE OF ENERGY SECURITY.
(a) Definitions- In this section:
(1) DIRECTOR- The term `Director' means the Director of Energy Security
appointed under subsection (c)(1).
(2) OFFICE- The term `Office' means the Office of Energy Security established
by subsection (b).
(b) Establishment- There is established in the Executive Office of the President
the Office of Energy Security.
(1) IN GENERAL- The Office shall be headed by a Director, who shall be
appointed by the President, by and with the advice and consent of the
Senate.
(2) RATE OF PAY- The Director shall be paid at a rate of pay equal to
level I of the Executive Schedule under section 5312 of title 5, United
States Code.
(1) IN GENERAL- The Office, acting through the Director, shall be responsible
for overseeing all Federal energy security programs, including the coordination
of efforts of Federal agencies to assist the United States in achieving
full energy independence.
(2) SPECIFIC RESPONSIBILITIES- In carrying out paragraph (1), the Director
shall--
(A) serve as head of the energy community;
(B) act as the principal advisor to the President, the National Security
Council, the National Economic Council, the Domestic Policy Council,
and the Homeland Security Council with respect to intelligence matters
relating to energy security;
(C) with request to budget requests and appropriations for Federal programs
relating to energy security--
(i) consult with the President and the Director of the Office of Management
and Budget with respect to each major Federal budgetary decision relating
to energy security of the United States;
(ii) based on priorities established by the President, provide to
the heads of departments containing agencies or organizations within
the energy community, and to the heads of such agencies and organizations,
guidance for use in developing the budget for Federal programs relating
to energy security;
(iii) based on budget proposals provided to the Director by the heads
of agencies and organizations described in clause (ii), develop and
determine an annual consolidated budget for Federal programs relating
to energy security; and
(iv) present the consolidated budget, together with any recommendations
of the Director and any heads of agencies and organizations described
in clause (ii), to the President for approval;
(D) establish and meet regularly with a council of business and labor
leaders to develop and provide to the President and Congress recommendations
relating to the impact of energy supply and prices on economic growth;
(E) submit to Congress an annual report that describes the progress
of the United States toward the goal of achieving full energy independence;
and
(F) carry out such other responsibilities as the President may assign.
(1) IN GENERAL- The Director may, without regard to the civil service
laws (including regulations), appoint and terminate such personnel as
are necessary to enable the Director to carry out the responsibilities
of the Director under this section.
(A) IN GENERAL- Except as provided in subparagraph (B), the Director
may fix the compensation of personnel without regard to the provisions
of chapter 51 and subchapter III of chapter 53 of title 5, United States
Code, relating to classification of positions and General Schedule pay
rates.
(B) MAXIMUM RATE OF PAY- The rate of pay for the personnel appointed
by the Director shall not exceed the rate payable for level V of the
Executive Schedule under section 5316 of title 5, United States Code.
(f) Authorization of Appropriations- There are authorized to be appropriated
such sums as are necessary to carry out this section.
SEC. 3. CREDIT FOR PRODUCTION OF QUALIFIED FLEXIBLE FUEL MOTOR VEHICLES.
(a) In General- Subpart D of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end the following
new section:
`SEC. 45N. PRODUCTION OF QUALIFIED FLEXIBLE FUEL MOTOR VEHICLES.
`(a) Allowance of Credit- For purposes of section 38, the qualified flexible
fuel motor vehicle production credit determined under this section for any
taxable year is an amount equal to $100 for each qualified flexible fuel
motor vehicle produced in the United States by the manufacturer during the
taxable year.
`(b) Qualified Flexible Fuel Motor Vehicle- For purposes of this section,
the term `qualified flexible fuel motor vehicle' means a flexible fuel motor
vehicle--
`(1) the production of which is not required for the manufacturer to meet--
`(A) the maximum credit allowable for vehicles described in paragraph
(2) in determining the fleet average fuel economy requirements (as determined
under section 32904 of title 49, United States Code) of the manufacturer
for the model year ending in the taxable year, or
`(B) the requirements of any other provision of Federal law, and
`(2) which is designed so that the vehicle is propelled by an engine which
can use as a fuel a gasoline mixture of which 85 percent (or another percentage
of not less than 70 percent, as the Secretary may determine, by rule,
to provide for requirements relating to cold start, safety, or vehicle
functions) of the volume of consists of ethanol.
`(c) Other Definitions and Special Rules- For purposes of this section--
`(1) MOTOR VEHICLE- The term `motor vehicle' has the meaning given such
term by section 30(c)(2).
`(2) MANUFACTURER- The term `manufacturer' has the meaning given such
term in regulations prescribed by the Administrator of the Environmental
Protection Agency for purposes of the administration of title II of the
Clean Air Act (42 U.S.C. 7521 et seq.).
`(3) REDUCTION IN BASIS- For purposes of this subtitle, if a credit is
allowed under this section for any expenditure with respect to any property,
the increase in the basis of such property which would (but for this paragraph)
result from such expenditure shall be reduced by the amount of the credit
so allowed.
`(4) NO DOUBLE BENEFIT- The amount of any deduction or credit allowable
under this chapter (other than the credits allowable under this section
and section 30B) shall be reduced by the amount of credit allowed under
subsection (a) for such vehicle for the taxable year.
`(5) ELECTION NOT TO TAKE CREDIT- No credit shall be allowed under subsection
(a) for any vehicle if the taxpayer elects to not have this section apply
to such vehicle.
`(6) TERMINATION- This section shall not apply to any vehicle produced
after December 31, 2010.
`(7) CROSS REFERENCE- For an election to claim certain minimum tax credits
in lieu of the credit determined under this section, see section 53(e).'.
(b) Credit Allowed Against the Alternative Minimum Tax- Section 38(c)(4)(B)
of the Internal Revenue Code of 1986 (defining specified credits) is amended
by striking the period at the end of clause (ii)(II) and inserting `, and',
and by adding at the end the following new clause:
`(iii) the credit determined under section 45N.'.
(c) Election to Use Additional AMT Credit- Section 53 of the Internal Revenue
Code of 1986 (relating to credit for prior year minimum tax liability) is
amended by adding at the end the following new subsection:
`(e) Additional Credit in Lieu of Flexible Fuel Motor Vehicle Credit-
`(1) IN GENERAL- In the case of a taxpayer making an election under this
subsection for a taxable year, the amount otherwise determined under subsection
(c) shall be increased by any amount of the credit determined under section
45N for such taxable year which the taxpayer elects not to claim pursuant
to such election.
`(2) ELECTION- A taxpayer may make an election for any taxable year not
to claim any amount of the credit allowable under section 45N with respect
to property produced by the taxpayer during such taxable year. An election
under this subsection may only be revoked with the consent of the Secretary.
`(3) CREDIT REFUNDABLE- The aggregate increase in the credit allowed by
this section for any taxable year by reason of this subsection shall for
purposes of this title (other than subsection (b)(2) of this section)
be treated as a credit allowed to the taxpayer under subpart C.'.
(d) Conforming Amendments- Section 38(b) of the Internal Revenue Code of
1986 is amended by striking `and' at the end of paragraph (29), by striking
the period at the end of paragraph (30) and inserting a comma, and by adding
at the end the following new paragraph:
`(31) the qualified flexible fuel motor vehicle production credit determined
under section 45N, plus'.
(e) 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 adding at the end the following new item:
`Sec. 45N. Production of qualified flexible fuel motor vehicles.'.
(f) Effective Date- The amendments made by this section shall apply to motor
vehicles produced in model years ending after the date of the enactment
of this Act.
SEC. 4. INCENTIVES FOR THE RETAIL SALE OF ALTERNATIVE FUELS AS MOTOR VEHICLE
FUEL.
(a) In General- Subpart D of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to business related credits) is
amended by inserting after section 40A the following new section:
`SEC. 40B. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS MOTOR VEHICLE
FUEL.
`(a) General Rule- The alternative fuel retail sales credit for any taxable
year is the applicable amount for each gallon of alternative fuel sold at
retail by the taxpayer during such year.
`(b) Applicable Amount- For purposes of this section, the applicable amount
shall be determined in accordance with the following table:
`In the case of
The applicable amount
any sale:
for each gallon is:
Before 2009
35 cents
During 2009 or 2010
20 cents
During 2011
10 cents.
`(c) Definitions- For purposes of this section--
`(1) ALTERNATIVE FUEL- The term `alternative fuel' means any fuel at least
85 percent (or another percentage of not less than 70 percent, as the
Secretary may determine, by rule, to provide for requirements relating
to cold start, safety, or vehicle functions) of the volume of which consists
of ethanol.
`(A) IN GENERAL- The term `sold at retail' means the sale, for a purpose
other than resale, after manufacture, production, or importation.
`(B) USE TREATED AS SALE- If any person uses alternative fuel (including
any use after importation) as a fuel to propel any qualified alternative
fuel motor vehicle (as defined in this section) before such fuel is
sold at retail, then such use shall be treated in the same manner 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, 2011.'.
(b) Credit Treated as Business Credit- Section 38(b) of the Internal Revenue
Code of 1986 (relating to current year business credit) (as amended by section
3(d)) is amended by adding at the end the following new paragraph:
`(32) the alternative fuel retail sales credit determined 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 inserting 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. 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;
(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
Energy Policy Act (Public Law 109-58; 119 Stat. 594); and
(3)(A) the renewable fuel program under section 211(o) of the Clean Air
Act requires a small percentage of the gasoline motor pool, totaling nearly
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 Diesel 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 blending components derived from
alternative fuel (provided that only the alternative fuel portion of
any such blending component shall be considered to be part of the applicable
volume under the alternative diesel fuel program established by this
subsection).
`(B) INCLUSIONS- The term `alternative diesel fuel' includes a diesel
fuel substitute produced from--
`(iii) recycled yellow grease;
`(iv) thermal depolymerization;
`(v) thermochemical conversion;
`(vi) the coal-to-liquid process (including the Fischer-Tropsch process);
or
`(vii) a diesel-ethanol blend of not less than 7 percent ethanol.
`(2) ALTERNATIVE DIESEL FUEL PROGRAM-
`(i) IN GENERAL- Not later than 1 year after the date of enactment
of this subsection, the Administrator shall promulgate 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 alternative 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 provisions applicable to refineries,
blenders, distributors, and importers, as appropriate, to ensure
that the requirements of this paragraph are met; but
`(aa) restrict geographic areas in which alternative diesel fuel
may be used; or
`(bb) impose any per-gallon obligation for the use of alternative
diesel fuel.
`(iii) REQUIREMENT IN CASE OF FAILURE TO PROMULGATE REGULATIONS- If
the Administrator fails to promulgate regulations under clause (i),
the percentage of alternative diesel fuel in the diesel motor pool
sold or dispensed to consumers in the United States, on a volume basis,
shall be 0.6 percent for calendar year 2008.
`(i) CALENDAR YEARS 2008 THROUGH 2015- For the purpose of subparagraph
(A), the applicable volume for any of calendar years 2008 through
2015 shall be determined in accordance with the following table:
`Applicable volume of Alternative diesel fuel in diesel motor pool
(in millions of gallons):
Calendar year:
250
2008
500
2009
750
2010
1,000
2011
1,250
2012
1,500
2013
1,750
2014
2,000
2015.
`(ii) CALENDAR YEAR 2016 AND THEREAFTER- The applicable volume for
calendar year 2016 and each calendar year thereafter shall be determined
by the Administrator, in coordination with the Secretary of Agriculture
and the Secretary of Energy, based on a review of the implementation
of the program during calendar years 2008 through 2015, including
a review of--
`(I) the impact of the use of alternative diesel fuels on the environment,
air quality, energy security, job creation, and rural economic development;
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 VOLUME- For the purpose of subparagraph
(A), the applicable volume for calendar year 2016 and each calendar
year thereafter shall be equal to the product obtained by multiplying--
`(I) the number of gallons of diesel that the Administrator estimates
will be sold or introduced into commerce during the calendar year;
and
`(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 2015.
`(3) APPLICABLE PERCENTAGES-
`(A) PROVISION OF ESTIMATE OF VOLUMES OF DIESEL SALES- Not later than
October 31 of each of calendar years 2007 through 2015, the Administrator
of the Energy Information Administration shall provide to the Administrator
an estimate, with respect to the following calendar year, of the volumes
of diesel projected to be sold or introduced into commerce in the United
States.
`(B) DETERMINATION OF APPLICABLE PERCENTAGES-
`(i) IN GENERAL- Not later than November 30 of each of calendar years
2008 through 2015, based on the estimate provided under subparagraph
(A), the Administrator shall determine and publish in the Federal
Register, with respect to the following calendar year, the alternative
diesel fuel obligation that ensures that the requirements of paragraph
(2) are met.
`(ii) REQUIRED ELEMENTS- The alternative diesel fuel obligation determined
for a calendar year under clause (i) shall--
`(I) be applicable to refineries, blenders, and importers, as appropriate;
`(II) be expressed in terms of a volume percentage of diesel sold
or introduced into commerce in the United States; and
`(III) subject to subparagraph (C), consist of a single applicable
percentage that applies to all categories of persons described in
subclause (I).
`(C) ADJUSTMENTS- In determining the applicable percentage for a calendar
year, the Administrator shall make adjustments to prevent the imposition
of redundant obligations on any person described in subparagraph (B)(ii)(I).
`(A) IN GENERAL- The regulations promulgated pursuant to paragraph (2)(A)
shall provide for the generation of an appropriate amount of credits
by any person that refines, blends, or imports diesel that contains
a quantity of alternative diesel fuel that is greater than the quantity
required under paragraph (2).
`(B) USE OF CREDITS- A person that generates a credit under subparagraph
(A) may use the credit, or transfer all or a portion of the credit to
another person, for the purpose of complying with regulations promulgated
pursuant to paragraph (2).
`(C) DURATION OF CREDITS- A credit generated under this paragraph shall
be valid during the 1-year period beginning on the date on which the
credit is generated.
`(D) INABILITY TO GENERATE OR PURCHASE SUFFICIENT CREDITS- The regulations
promulgated pursuant to paragraph (2)(A) shall include provisions allowing
any person that is unable to generate or purchase sufficient credits
under subparagraph (A) to meet the requirements of paragraph (2) by
carrying forward a credit generated during a previous year on the condition
that the person, during the calendar year following the year in which
the alternative diesel fuel deficit is created--
`(i) achieves compliance with the alternative diesel fuel requirement
under paragraph (2); and
`(ii) generates or purchases additional credits under subparagraph
(A) to offset the deficit of the previous year.
`(A) IN GENERAL- The Administrator, in consultation with the Secretary
of Agriculture and the Secretary of Energy, may waive the requirements
of paragraph (2) in whole or in part on receipt of a petition of 1 or
more States by reducing the national quantity of alternative diesel
fuel for the diesel motor pool required under paragraph (2) based on
a determination by the Administrator, after public notice and opportunity
for comment, that--
`(i) implementation of the requirement would severely harm the economy
or environment of a State, a region, or the United States; or
`(ii) there is an inadequate domestic supply of alternative diesel
fuel.
`(B) PETITIONS FOR WAIVERS- Not later than 90 days after the date on
which the Administrator receives a petition under subparagraph (A),
the Administrator, in consultation with the Secretary of Agriculture
and the Secretary of Energy, shall approve or disapprove the petition.
`(C) TERMINATION OF WAIVERS-
`(i) IN GENERAL- Except as provided in clause (ii), a waiver under
subparagraph (A) shall terminate on the date that is 1 year after
the date on which the waiver is provided.
`(ii) EXCEPTION- The Administrator, in consultation with the Secretary
of Agriculture and the Secretary of Energy, may extend a waiver under
subparagraph (A), as the Administrator determines to be appropriate.'.
(c) Penalties and Enforcement- Section 211(d) of the Clean Air Act (42 U.S.C.
7545(d)) is amended--
(1) in paragraph (1), by striking `or (o)' each place it appears and inserting
`(o), or (p)'; and
(2) in paragraph (2), by striking `and (o)' each place it appears and
inserting `(o), and (p)'.
(d) Technical Amendments- Section 211 of the Clean Air Act (42 U.S.C. 7545)
is amended--
(1) in subsection (i)(4), by striking `section 324' each place it appears
and inserting `section 325';
(2) in subsection (k)(10), by indenting subparagraphs (E) and (F) appropriately;
(3) in subsection (n), by striking `section 219(2)' and inserting `section
216(2)';
(4) by redesignating the second subsection (r) and subsection (s) as subsections
(s) and (t), respectively; and
(5) in subsection (t)(1) (as redesignated by paragraph (4)), by striking
`this subtitle' and inserting `this part'.
SEC. 6. EXCISE TAX CREDIT FOR CELLULOSIC BIOMASS ETHANOL.
(a) In General- Paragraph (2) of section 6426(b) of the Internal Revenue
Code of 1986 (relating to alcohol fuel mixture credit) is amended by adding
at the end the following new subparagraph:
`(C) CELLULOSIC BIOMASS ETHANOL- In the case of an alcohol fuel mixture
consisting of cellulosic biomass ethanol (as defined in section 211(o)(1)(A)
of the Clean Air Act), the applicable amount is equal to the product
of--
`(i) the amount specified in subparagraph (A), times
`(ii) the equivalent number of gallons of renewable fuel specified
in section 211(o)(4) of such Act.'.
(b) Conforming Amendment- Section 6426(b)(2)(A) of such Code is amended
by striking `subparagraph (B)' and inserting `subparagraphs (B) and (C)'.
(c) Effective Date- The amendments made by this section shall apply to fuel
sold or used after the date of the enactment of this Act.
SEC. 7. INCENTIVE FOR FEDERAL AND STATE FLEETS FOR MEDIUM AND HEAVY DUTY
HYBRIDS.
Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) is amended--
(1) in paragraph (3), by striking `or a dual fueled vehicle' and inserting
`, a dual fueled vehicle, or a medium or heavy duty vehicle that is a
hybrid vehicle';
(2) by redesignating paragraphs (11), (12), (13), and (14) as paragraphs
(12), (14), (15), and (16), respectively;
(3) by inserting after paragraph (10) the following:
`(11) the term `hybrid vehicle' means a vehicle powered both by a diesel
or gasoline engine and an electric motor that is recharged as the vehicle
operates;'; and
(4) by inserting after paragraph (12) (as redesignated by paragraph (2))
the following:
`(13) the term `medium or heavy duty vehicle' means a vehicle that--
`(A) in the case of a medium duty vehicle, has a gross vehicle weight
rating of more than 8,500 pounds but not more than 14,000 pounds; and
`(B) in the case of a heavy duty vehicle, has a gross vehicle weight
rating of more than 14,000 pounds;'.
SEC. 8. PUBLIC ACCESS TO FEDERAL ALTERNATIVE REFUELING STATIONS.
(a) Definitions- In this section:
(1) ALTERNATIVE FUEL REFUELING STATION- The term `alternative fuel refueling
station' has the meaning given the term `qualified alternative fuel vehicle
refueling property' in section 30C(c)(1) of the Internal Revenue Code
of 1986.
(2) SECRETARY- The term `Secretary' means the Secretary of Energy.
(b) Access to Federal Alternative Refueling Stations- Not later than 18
months after the date of enactment of this Act--
(1) except as provided in subsection (d)(1), any Federal property that
includes at least 1 fuel refueling station shall include at least 1 alternative
fuel refueling station; and
(2) except as provided in subsection (d)(2), any alternative fuel refueling
station located on property owned by the Federal government shall permit
full public access for the purpose of refueling using alternative fuel.
(c) Duration- The requirements described in subsection (b) shall remain
in effect until the sooner of--
(1) the date that is 7 years after the date of enactment of this Act;
or
(2) the date on which the Secretary determines that not less than 5 percent
of the commercial refueling infrastructure in the United States offers
alternative fuels to the general public.
(1) WAIVER- Subsection (b)(1) shall not apply to any Federal property
under the jurisdiction of a Federal agency if the Secretary determines
that alternative fuel is not reasonably available to retail purchasers
of the fuel, as certified by the head of the agency to the Secretary.
(2) NATIONAL SECURITY EXEMPTION- Subsection (b)(2) does not apply to property
of the Federal government that the Secretary, in consultation with the
Secretary of Defense, has certified must be exempt for national security
reasons.
(e) Verification of Compliance- The Secretary shall--
(1) monitor compliance with this section by all Federal agencies; and
(2) annually submit to Congress a report describing the extent of compliance
with this section.
SEC. 9. PURCHASE OF CLEAN FUEL BUSES.
(a) In General- Chapter 53 of title 49, United States Code, is amended by
inserting after section 5325 the following:
`Sec. 5326. Purchase of clean fuel buses.
`(a) Definition of Clean Fuel Bus- In this section, the term `clean fuel
bus' means a vehicle that--
`(1) is capable of being powered by--
`(A) compressed natural gas;
`(B) liquefied natural gas;
`(C) 1 or more batteries;
`(D) a fuel that is composed of at least 85 percent ethanol (or another
percentage of not less than 70 percent, as the Secretary may determine,
by rule, to provide for requirements relating to cold start, safety,
or vehicle functions);
`(E) electricity (including a hybrid electric or plug-in hybrid electric
vehicle);
`(G) ultra-low sulfur diesel; and
`(2) has been certified by the Administrator of the Environmental Protection
Agency to significantly reduce harmful emissions, particularly in a nonattainment
area (as defined in section 171 of the Clean Air Act (42 U.S.C. 7501)).
`(b) Purchase of Buses- A bus purchased using funds made available from
the Mass Transit Account of the Highway Trust Fund shall be a clean fuel
bus.'.
(b) Conforming Amendment- The analysis for chapter 53 is amended by inserting
after the item relating to section 5325 the following:
`5326. Clean fuel buses.'.
SEC. 10. DOMESTIC FUELS INFRASTRUCTURE FOR THE DEPARTMENT OF DEFENSE.
(a) Program Required- The Secretary of Defense shall carry out a program
to evaluate the commercial and technical viability of advanced technologies
for the production of alternative transportation fuels having applications
for the Department of Defense. The program shall include the construction
and operation of testing facilities in accordance with subsection (d).
(b) Alternative Transportation Fuels Defined- For purposes of this section,
the term `alternative transportation fuels' means--
(1) denatured ethanol and other alcohols;
(2) mixtures containing at least 85 percent (or another percentage of
not less than 70 percent, as the Secretary may determine, by rule, to
provide for requirements relating to cold start, safety, or vehicle functions)
by volume of denatured ethanol, particularly ethanols derived from cellulosic
biomass;
(3) coal-derived liquid fuels, including Fischer-Tropsch fuels;
(4) fuels (other than alcohol) derived from biological materials, including
fuels derived from vegetable oils, animal fats, thermal depolymerization,
or thermalchemical conversion; and
(5) any other fuel the Secretary determines, by rule, is substantially
not petroleum and would yield substantial energy security benefits and
substantial environmental benefits.
(c) Coordination of Efforts-
(1) IN GENERAL- The Secretary of Defense shall carry out the program required
by this section through the Under Secretary of Defense for Acquisition,
Technology, and Logistics and in consultation with the Director of Defense
Research and Engineering, the Advanced Systems and Concepts Office, the
Secretary of Agriculture, and the Secretary of Energy.
(2) ROLE OF BIOMASS RESEARCH AND DEVELOPMENT TECHNOLOGIC ADVISORY COMMITTEE-
The consultations under paragraph (1) shall include the participation
of the Biomass Research and Development Technical Advisory Committee established
under section 306 of the Biomass Research and Development Act of 2000
(title III of Public Law 106-224; 7 U.S.C. 8101 note).
(d) Facilities for Evaluating Production of Alternative Transportation Fuels-
(1) IN GENERAL- In carrying out the program required by this section,
the Secretary of Defense shall provide for the construction or capital
modification of--
(A) not more than 3 facilities for the purposes of evaluating the production
from cellulosic biomass of alternative transportation fuels having applications
for the Department of Defense; and
(B) not more than 3 facilities for the purposes of evaluating the production
from coal of alternative transportation fuels having applications for
the Department of Defense, with not less than one of such facilities
utilizing coal resources with a ranking by the American Society for
Testing and Materials of high volatile bituminous B and C.
(2) LOCATION OF FACILITIES- The facilities constructed under paragraph
(1) for the purposes of cellulosic biomass shall--
(A) afford the efficient use of a diverse range of fuel sources; and
(B) give initial preference to existing domestic facilities with current
or potential capacity for cellulose or coal conversion.
(3) CAPACITY OF FACILITIES- Each facility constructed under paragraph
(1) shall have the flexibility for producing commercial volumes of alternative
transportation fuels such that when the facility demonstrates economic
viability of the process it can provide commercial production for the
region in which it is located.
(4) AUTHORITY TO ENTER INTO TRANSACTIONS FOR FACILITY CONSTRUCTION- The
Secretary of Defense shall seek to construct the facilities required by
paragraph (1) at the lowest cost practicable. The Secretary may make grants,
enter into agreements, and provide loans or loan guarantees to corporations,
cooperatives, and consortia of such entities for such purposes.
(5) EVALUATIONS AT FACILITIES- Not later than 5 years after the date of
enactment of this Act, the Secretary of Defense shall begin at the facilities
described in paragraph (1) evaluations of the technical and commercial
viability of different processes of producing alternative transportation
fuels having Department of Defense applications from cellulosic biomass
or coal.
(e) Program Milestones- In carrying out the program required by this section,
the Secretary of Defense shall meet the following milestones:
(1) SELECTION OF TESTING PROCESSES- Not later than 180 days after the
date of enactment of this Act, the Secretary shall select processes for
evaluating the technical and commercial viability of producing alternative
fuels from cellulosic biomass or coal.
(2) INITIATION OF WORK AT EXISTING FACILITIES- Not later than one year
after the date of enactment of this Act, the Secretary shall enter into
agreements to carry out testing under this section at existing facilities.
(3) CONSTRUCTION AGREEMENTS- Not later than one year after the date of
enactment of this Act, the Secretary shall enter into agreements for the
capital modification or construction of facilities under subsection (d)(1).
(4) COMPLETION OF ENGINEERING AND DESIGN WORK- Not later than three years
after the date of enactment of this Act, the Secretary shall complete
capital modifications of existing facilities and the engineering and design
work necessary for the construction of new facilities under this section.
(f) Report on Program- Not later than 18 months after the date of enactment
of this Act, and annually thereafter for the next 5 years, the Secretary
of Defense shall, in consultation with the Under Secretary of Defense for
Acquisition, Technology, and Logistics, submit a report on the implementation
and results of the program required by this section to--
(1) the Committees on Armed Services, Energy and Natural Resources, Agriculture,
and Appropriations of the Senate; and
(2) the Committees on Armed Services, Energy and Commerce, Agriculture,
and Appropriations of the House of Representatives.
(1) IN GENERAL- Of the amounts authorized to be appropriated under this
section, $250,000,000 may be available for the program required by this
section for fiscal years 2007 through 2012.
(2) AVAILABILITY- Amounts available under paragraph (1) shall remain available
until expended.
END
