Short title

This Act may be cited as the

Transforming Energy Now Act of 2006

Findings

Congress finds that— (1)the United States is dangerously dependent on foreign oil; (2)as of April 2006, the United States imported nearly 60 percent of the oil used in the United States, and that percentage is expected to increase to almost 70 percent by 2025 unless the United States takes decisive action; (3)approximately 2,500,000 barrels of oil per day are imported from countries in the Persian Gulf region; (4)oil imports comprise nearly 30 percent of the dangerously high trade deficit of the United States; (5)it is feasible to dramatically reduce the dependence of the United States on foreign oil by increasing production and commercialization of alternative liquid fuels; (6)as of April 2006, only 4 percent of the total gasoline sold was derived from renewable fuel, including 4,000,000,000 gallons of ethanol production; (7)at the current rate of renewable fuel production growth, the United States will increase its production of ethanol by approximately 1,000,000,000 gallons a year, resulting in the annual production of 14,000,000,000 gallons of ethanol in the United States by 2016; (8)at the current increase of renewable fuel production capacity, the United States will produce 10,000,000,000 gallons of ethanol by 2012, easily surpassing the current renewable fuels mandate required by the Energy Policy Act of 2005; (9)an aggressive schedule of renewable fuels production will lessen the United States dependence on foreign oil; (10)10 percent of the Nation’s motor vehicle fuel supply should be renewable by 2016; and (11)setting a goal of 19,000,000,000 gallons of ethanol by 2016 would require an aggressive increase in renewable fuels production without requiring significant ethanol imports.

Ethanol and biodiesel fuel requirements

(a)

In general

Section 211(o)(2)(B) of the Clean Air Act (42 U.S.C. 7545 (o)(2)(B)) is amended to read as follows:

(B)

Minimum percentage

Motor vehicle fuel sold or introduced into commerce in the United States (except in noncontiguous States or territories) after December 31, 2015, shall contain, in the aggregate, not less than 10 percent renewable fuel, by volume.

(b)

Rulemaking

Not later than 1 year after the date of the enactment of this Act, the Administrator shall promulgate regulations to carry out the amendment made by subsection (a).

Increase in alternative fuel vehicle refueling property credit

(a)

In general

Section 30C(a) of the Internal Revenue Code of 1986 is amended by striking 30 percent and inserting 50 percent. (b)

Effective date

The amendment made by subsection (a) shall apply to property placed in service after December 31, 2005, in taxable years ending after such date.

Use of CAFE penalties to build alternative fueling infrastructure

Section 32912 of title 49, United States Code, is amended by adding at the end the following:

(e)

Alternative fueling infrastructure grant program

(1)

Trust fund

(A)

Establishment

There is established in the Treasury of the United States a trust fund, to be known as the Alternative Fueling Infrastructure Trust Fund (referred to in this subsection as the Trust Fund), consisting of such amounts as are deposited into the Trust Fund under subparagraph (B) and any interest earned on investment of amounts in the Trust Fund. (B)

Transfers of civil penalties

The Secretary of Transportation shall remit 90 percent of the amount collected in civil penalties under this section to the Trust Fund. (2)

Establishment of grant program

The Secretary of Energy shall obligate such sums as are available in the Trust Fund to establish a grant program to increase the number of locations at which consumers may purchase alternative transportation fuels. (3)

Grant recipients

(A)

In general

The Secretary of Energy may award grants under this paragraph, to— (i)individual fueling stations in an amount not greater than $150,000 per site or $500,000 per entity; and (ii)corporations (including nonprofit corporations) with demonstrated experience in the administration of grant funding for the purpose of alternative fueling infrastructure. (B)

Priority

In awarding grants under this paragraph, the Secretary of Energy shall— (i)give priority to recognized non-profit corporations that have proven experience and demonstrated technical expertise in the establishment of alternative fueling infrastructure; (ii)consider the number of vehicles produced for sale in the preceding production year capable of using each specific type of alternative fuel; and (iii)identify 1 primary group per alternative fuel. (4)

Use of funds

(A)

In general

Grant funds received under this subsection may be used to— (i)construct new facilities to dispense alternative fuels; (ii)purchase equipment to upgrade, expand, or otherwise improve existing alternative fuel facilities; or (iii)purchase equipment or pay for specific turnkey fueling services by alternative fuel providers. (B)

Matching requirement

The Secretary of Energy may not award a grant under this paragraph unless the grant recipient agrees to provide $1 of non-Federal contributions for every $3 of grant funds received under this paragraph. In no case may administrative expenses exceed 10 percent of any total award that may be provided. (5)

Selection of alternative fuel stations

Each grant recipient shall select the locations for each alternative fuel station to be constructed with grant funds received under this paragraph on a formal, open, and competitive basis, based on— (A)the public demand for each alternative fuel in a particular county based on state registration records showing the number of vehicles that can be operated with alternative fuel; and (B)the opportunity to create or expand corridors of alternative fuel stations along interstate or State highways. (6)

Operation of alternative fuel stations

Facilities constructed or upgraded with grant funds received under this subsection shall— (A)provide alternative fuel available to the public for a period of not less than 4 years; (B)establish a marketing plan to advance the sale and use of alternative fuels; (C)prominently display the price of alternative fuel on the marquee and in the station; (D)provide point of sale materials on alternative fuel; (E)clearly label the dispenser with consistent materials; (F)price the alternative fuel at the same margin that is received for unleaded gasoline; and (G)support and use all available tax incentives to reduce the cost of the alternative fuel to the lowest possible retail price. (7)

Notification requirements

(A)

Opening

Not later than the date on which each alternative fuel station begins to offer alternative fuel to the public, the grant recipient that used grant funds to construct such station shall notify the Secretary of Energy of such opening. The Secretary of Energy shall add each new alternative fuel station to the alternative fuel station locator on its Website when it receives notification under this subparagraph. (B)

Semi-annual report

Not later than 6 months after the receipt of a grant award under this subsection, and every 6 months thereafter, each grant recipient shall submit a report to the Secretary of Energy that describes— (i)the status of each alternative fuel station constructed with grant funds received under this subsection; (ii)the amount of alternative fuel dispensed at each station during the preceding 6-month period; and (iii)the average price per gallon of the alternative fuel sold at each station during the preceding 6-month period. (8)

Alternative fuel defined

For the purposes of this subsection, the term alternative fuel means— (A)any fuel of which at least 85 percent (or such percentage, but not less than 70 percent, as determined by the Secretary, by rule, to provide for requirements relating to cold start, safety, or vehicle functions) of the volume consists of ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen; or (B)any mixture of biodiesel and diesel fuel determined without regard to any use of kerosene that contains at least 20 percent biodiesel.

Low-interest loan and grant program for retail delivery of E–85 fuel

(a)

Purposes of loans

Section 312(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1942(a)) is amended— (1)in paragraph (9)(B)(ii), by striking or at the end; (2)in paragraph (10), by striking the period at the end and inserting ; or; and (3)by adding at the end the following:

(11)building infrastructure, including pump stations, for the retail delivery to consumers of any fuel that contains not less than 85 percent ethanol, by volume.

(b)

Program

Subtitle B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941 et seq.) is amended by adding at the end the following:

320.

Low-interest loan and grant program for retail delivery of E–85 fuel

(a)

In general

The Secretary shall establish a low-interest loan and grant program to assist farmer-owned ethanol producers (including cooperatives and limited liability corporations) to develop and build infrastructure, including pump stations, that is directly related to the retail delivery to consumers of any fuel that contains not less than 85 percent ethanol, by volume. (b)

Loan terms

(1)

Amortization

The repayment of a loan received under this section shall be amortized over the expected life of the infrastructure project that is being financed with the proceeds of the loan. (2)

Interest rate

The annual interest rate of a loan received under this section shall be fixed at not more than 5 percent. (c)

Authorization of appropriations

There are authorized to be appropriated such sums as are necessary to carry out this section.

(c)

Regulations

As soon as practicable after the date of the enactment of this Act, the Secretary of Agriculture shall promulgate such regulations as are necessary to carry out the amendments made by this section.