[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 606 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                 S. 606

  To amend the Clean Air Act to eliminate methyl tertiary butyl ether 
 from the United States fuel supply, to increase production and use of 
 renewable fuel, and to increase the Nation's energy independence, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 11, 2005

   Mr. Thune (for himself, Mr. Inhofe, Mr. Voinovich, and Mr. Bond) 
introduced the following bill; which was read twice and referred to the 
               Committee on Environment and Public Works

_______________________________________________________________________

                                 A BILL


 
  To amend the Clean Air Act to eliminate methyl tertiary butyl ether 
 from the United States fuel supply, to increase production and use of 
 renewable fuel, and to increase the Nation's energy independence, 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; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
                      TITLE I--GENERAL PROVISIONS

Sec. 101. Renewable content of gasoline.
Sec. 102. Renewable fuel.
Sec. 103. Survey of renewable fuels consumption.
                  TITLE II--FEDERAL REFORMULATED FUELS

Sec. 201. Short title.
Sec. 202. Leaking underground storage tanks.
Sec. 203. Restrictions on the use of MTBE.
Sec. 204. Elimination of oxygen content requirement for reformulated 
                            gasoline.
Sec. 205. Public health and environmental impacts of fuels and fuel 
                            additives.
Sec. 206. Analyses of motor vehicle fuel changes.
Sec. 207. Additional opt-in areas under reformulated gasoline program.
Sec. 208. Federal enforcement of State fuels requirements.
Sec. 209. Fuel system requirements harmonization study.

                      TITLE I--GENERAL PROVISIONS

SEC. 101. RENEWABLE CONTENT OF GASOLINE.

    (a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545) 
is amended--
            (1) by redesignating subsection (o) as subsection (r); and
            (2) by inserting after subsection (n) the following:
    ``(o) Renewable Fuel Program.--
            ``(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 recurring 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 `renewable 
                        fuel' means motor vehicle fuel that--
                                    ``(I)(aa) is produced from grain, 
                                starch, oilseeds, or other biomass; or
                                    ``(bb) is natural gas produced from 
                                a biogas source, including a landfill, 
                                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--
                                    ``(I) cellulosic biomass ethanol; 
                                and
                                    ``(II) 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 the average aggregate daily 
                crude oil throughput for a calendar year (as determined 
                by dividing the aggregate 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) Regulations.--
                            ``(i) In general.--Not later than 1 year 
                        after the date of enactment of this paragraph, 
                        the Administrator shall promulgate regulations 
                        to ensure that gasoline sold or introduced into 
                        commerce in the United States (except in Alaska 
                        and Hawaii), on an annual average basis, 
                        contains the applicable volume of renewable 
                        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
                                    ``(II) shall not--
                                            ``(aa) restrict cases in 
                                        which renewable fuel may be 
                                        used; or
                                            ``(bb) impose any per-
                                        gallon obligation for the use 
                                        of renewable fuel.
                            ``(iii) Requirement in case of failure to 
                        promulgate regulations.--If the Administrator 
                        does not promulgate regulations under clause 
                        (i), the percentage of renewable fuel in 
                        gasoline sold or dispensed to consumers in the 
                        United States, on a volume basis, shall be 1.8 
                        percent for calendar year 2006.
                    ``(B) Applicable volume.--
                            ``(i) Calendar years 2006 through 2012.--
                        For the purpose of subparagraph (A), the 
                        applicable volume for any of calendar years 
                        2006 through 2012 shall be determined in 
                        accordance with the following table:

Calendar year:                     Applicable volume of renewable fuel
                                    (in billions of gallons):
  2006...........................  3.8
  2007...........................  4.1
  2008...........................  4.5
  2009...........................  4.9
  2010...........................  5.3
  2011...........................  5.7
  2012...........................  6.0

                            ``(ii) Calendar year 2013 and thereafter.--
                        For the purpose of subparagraph (A), the 
                        applicable volume for calendar year 2013 and 
                        each calendar year thereafter shall be equal to 
                        the product obtained by multiplying--
                                    ``(I) the number of gallons of 
                                gasoline that the Administrator 
                                estimates will be sold or introduced 
                                into commerce in the calendar year; and
                                    ``(II) the ratio that--
                                            ``(aa) 5,000,000,000 
                                        gallons of renewable fuel; 
                                        bears to
                                            ``(bb) the number of 
                                        gallons of gasoline sold or 
                                        introduced into commerce in 
                                        calendar year 2012.
            ``(3) Applicable percentages.--
                    ``(A) Provision of estimate of volumes of gasoline 
                sales.--Not later than October 31 of each of calendar 
                years 2005 through 2011, the Administrator of the 
                Energy Information Administration shall provide to the 
                Administrator of the Environmental Protection Agency an 
                estimate of the volumes of gasoline sold or introduced 
                into commerce in the United States during the following 
                calendar year.
                    ``(B) Determination of applicable percentages.--
                            ``(i) In general.--Not later than November 
                        30 of each of calendar years 2005 through 2011, 
                        based on the estimate provided under 
                        subparagraph (A), the Administrator of the 
                        Environmental Protection Agency shall determine 
                        and publish in the Federal Register, with 
                        respect to the following calendar year, the 
                        renewable fuel obligation that ensures that the 
                        requirements of paragraph (2) are met.
                            ``(ii) Required elements.--The renewable 
                        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 gasoline; and
                                    ``(III) subject to subparagraph 
                                (C)(i), consist of a single applicable 
                                percentage that applies to all 
                                categories of persons specified in 
                                subclause (I).
                    ``(C) Adjustments.--In determining the applicable 
                percentage for a calendar year, the Administrator shall 
                make adjustments--
                            ``(i) to prevent the imposition of 
                        redundant obligations on any person specified 
                        in subparagraph (B)(ii)(I); and
                            ``(ii) to account for the use of renewable 
                        fuel during the previous calendar year by small 
                        refineries that are exempt under paragraph (9).
            ``(4) Cellulosic biomass ethanol.--For the purpose of 
        paragraph (2), 1 gallon of cellulosic biomass ethanol shall be 
        considered to be the equivalent of 1.5 gallons of renewable 
        fuel.
            ``(5) Credit program.--
                    ``(A) In general.--The regulations promulgated 
                under paragraph (2)(A) shall provide--
                            ``(i) for the generation of an appropriate 
                        amount of credits by any person that refines, 
                        blends, or imports gasoline that contains a 
                        quantity of renewable fuel that is greater than 
                        the quantity required under paragraph (2);
                            ``(ii) for the generation of an appropriate 
                        amount of credits for biodiesel; and
                            ``(iii) for the generation of credits by 
                        small refineries in accordance with paragraph 
                        (9)(C).
                    ``(B) Use of credits.--A person that generates 
                credits under subparagraph (A) may use the credits, or 
                transfer all or a portion of the credits to another 
                person, for the purpose of complying with paragraph 
                (2).
                    ``(C) Duration of credits.--A credit generated 
                under this paragraph shall be valid to show 
                compliance--
                            ``(i) subject to clause (ii), for the 
                        calendar year in which the credit was generated 
                        or the following calendar year; or
                            ``(ii) if the Administrator promulgates 
                        regulations under paragraph (6), for the 
                        calendar year in which the credit was generated 
                        or any of the following 2 calendar years.
                    ``(D) Inability to generate or purchase sufficient 
                credits.--The regulations promulgated under paragraph 
                (2)(A) shall include provisions allowing any person 
                that is unable to generate or purchase sufficient 
                credits to meet the requirements of paragraph (2) to 
                carry forward a renewable fuel deficit on condition 
                that the person, in the calendar year following the 
                year in which the renewable fuel deficit is created--
                            ``(i) achieves compliance with the 
                        renewable fuel requirement under paragraph (2); 
                        and
                            ``(ii) generates or purchases additional 
                        renewable fuel credits to offset the renewable 
                        fuel deficit of the previous year.
            ``(6) Seasonal variations in renewable fuel use.--
                    ``(A) Study.--For each of calendar years 2006 
                through 2012, the Administrator of the Energy 
                Information Administration shall conduct a study of 
                renewable fuel blending to determine whether there are 
                excessive seasonal variations in the use of renewable 
                fuel.
                    ``(B) Regulation of excessive seasonal 
                variations.--If, for any calendar year, the 
                Administrator of the Energy Information Administration, 
                based on the study under subparagraph (A), makes the 
                determinations specified in subparagraph (C), the 
                Administrator of the Environmental Protection Agency 
                shall promulgate regulations to ensure that 35 percent 
                or more of the quantity of renewable fuel necessary to 
                meet the requirements of paragraph (2) is used during 
                each of the 2 periods specified in subparagraph (D) of 
                each subsequent calendar year.
                    ``(C) Determinations.--The determinations referred 
                to in subparagraph (B) are that--
                            ``(i) less than 35 percent of the quantity 
                        of renewable fuel necessary to meet the 
                        requirements of paragraph (2) has been used 
                        during 1 of the 2 periods specified in 
                        subparagraph (D) of the calendar year; and
                            ``(ii) a pattern of excessive seasonal 
                        variation described in clause (i) will continue 
                        in subsequent calendar years.
                    ``(D) Periods.--The 2 periods referred to in this 
                paragraph are--
                            ``(i) April through September; and
                            ``(ii) January through March and October 
                        through December.
                    ``(E) Exclusion.--Renewable fuel blended or 
                consumed in calendar year 2006 in a State that has 
                received a waiver under section 209(b) shall not be 
                included in the study under subparagraph (A).
            ``(7) Waivers.--
                    ``(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 petition by 1 or 
                more States by reducing the national quantity of 
                renewable fuel required under paragraph (2)--
                            ``(i) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that implementation 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 
                        opportunity for comment, that there is an 
                        inadequate domestic supply or distribution 
                        capacity to meet the requirement.
                    ``(B) Petitions for waivers.--The Administrator, in 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy, shall approve or disapprove a 
                State petition for a waiver of the requirements of 
                paragraph (2) within 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 after 1 year, 
                but may be renewed by the Administrator after 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy.
            ``(8) Study and waiver for initial year of program.--
                    ``(A) In general.--Not later than 180 days after 
                the date of enactment of this paragraph, the Secretary 
                of Energy shall conduct for the Administrator a study 
                assessing whether the renewable fuel requirement under 
                paragraph (2) will likely result in significant adverse 
                impacts on consumers in 2006, on a national, regional, 
                or State basis.
                    ``(B) Required evaluations.--The study shall 
                evaluate renewable fuel--
                            ``(i) supplies and prices;
                            ``(ii) blendstock supplies; and
                            ``(iii) supply and distribution system 
                        capabilities.
                    ``(C) Recommendations by the secretary.--Based on 
                the results of the study, the Secretary of Energy shall 
                make specific recommendations to the Administrator 
                concerning waiver of the requirements of paragraph (2), 
                in whole or in part, to prevent any adverse impacts 
                described in subparagraph (A).
                    ``(D) Waiver.--
                            ``(i) In general.--Not later than 270 days 
                        after the date of enactment of this paragraph, 
                        the Administrator shall, if and to the extent 
                        recommended by the Secretary of Energy under 
                        subparagraph (C), waive, in whole or in part, 
                        the renewable fuel requirement under paragraph 
                        (2) by reducing the national quantity of 
                        renewable fuel required under paragraph (2) in 
                        calendar year 2006.
                            ``(ii) No effect on waiver authority.--
                        Clause (i) does not limit the authority of the 
                        Administrator to waive the requirements of 
                        paragraph (2) in whole, or in part, under 
                        paragraph (7).
            ``(9) Small refineries.--
                    ``(A) Temporary exemption.--
                            ``(i) In general.--The requirements of 
                        paragraph (2) shall not apply to small 
                        refineries until calendar year 2011.
                            ``(ii) Extension of exemption.--
                                    ``(I) Study by secretary of 
                                energy.--Not later than December 31, 
                                2008, the Secretary of Energy shall 
                                conduct for the Administrator a study 
                                to determine whether compliance with 
                                the requirements of paragraph (2) would 
                                impose a disproportionate economic 
                                hardship on small refineries.
                                    ``(II) Extension of exemption.--In 
                                the case of a small refinery that the 
                                Secretary of Energy determines under 
                                subclause (I) would be subject to a 
                                disproportionate economic hardship if 
                                required to comply with paragraph (2), 
                                the Administrator shall extend the 
                                exemption under clause (i) for the 
                                small refinery for a period of not less 
                                than 2 additional years.
                    ``(B) Petitions based on disproportionate economic 
                hardship.--
                            ``(i) Extension of exemption.--A small 
                        refinery may at any time petition the 
                        Administrator for an extension of the exemption 
                        under subparagraph (A) for the reason of 
                        disproportionate economic hardship.
                            ``(ii) Evaluation of petitions.--In 
                        evaluating a petition under clause (i), the 
                        Administrator, in consultation with the 
                        Secretary of Energy, shall consider the 
                        findings of the study under subparagraph 
                        (A)(ii) and other economic factors.
                            ``(iii) Deadline for action on petitions.--
                        The Administrator shall act on any petition 
                        submitted by a small refinery for a hardship 
                        exemption not later than 90 days after the date 
                        of receipt of the petition.
                    ``(C) Credit program.--If a small refinery notifies 
                the Administrator that the small refinery waives the 
                exemption under subparagraph (A), the regulations 
                promulgated under paragraph (2)(A) shall provide for 
                the generation of credits by the small refinery under 
                paragraph (5) beginning in the calendar year following 
                the date of notification.
                    ``(D) Opt-in for small refineries.--A small 
                refinery shall be subject to the requirements of 
                paragraph (2) if the small refinery notifies the 
                Administrator that the small refinery waives the 
                exemption under subparagraph (A).
            ``(10) Ethanol market concentration analysis.--
                    ``(A) Analysis.--
                            ``(i) In general.--Not later than 180 days 
                        after the date of enactment of this paragraph, 
                        and annually thereafter, the Federal Trade 
                        Commission shall perform a market concentration 
                        analysis of the ethanol production industry 
                        using the Herfindahl-Hirschman Index to 
                        determine whether there is sufficient 
                        competition among industry participants to 
                        avoid price-setting and other anticompetitive 
                        behavior.
                            ``(ii) Scoring.--For the purpose of scoring 
                        under clause (i) using the Herfindahl-Hirschman 
                        Index, all marketing arrangements among 
                        industry participants shall be considered.
                    ``(B) Report.--Not later than December 1, 2005, and 
                annually thereafter, the Federal Trade Commission shall 
                submit to Congress and the Administrator a report on 
                the results of the market concentration analysis 
                performed under subparagraph (A)(i).
    ``(p) Renewable Fuel Safe Harbor.--
            ``(1) In general.--
                    ``(A) Safe harbor.--Notwithstanding any other 
                provision of Federal or State law, no renewable fuel 
                (as defined in subsection (o)(1)) used or intended to 
                be used as a motor vehicle fuel, nor any motor vehicle 
                fuel containing renewable fuel, shall be deemed to be 
                defective in design or manufacture by reason of the 
                fact that the fuel is, or contains, renewable fuel, 
                if--
                            ``(i) the fuel does not violate a control 
                        or prohibition imposed by the Administrator 
                        under this section; and
                            ``(ii) the manufacturer of the fuel is in 
                        compliance with all requests for information 
                        under subsection (b).
                    ``(B) Safe harbor not applicable.--In any case in 
                which subparagraph (A) does not apply to a quantity of 
                fuel, the existence of a design defect or manufacturing 
                defect with respect to the fuel shall be determined 
                under otherwise applicable law.
            ``(2) Exception.--This subsection does not apply to ethers.
            ``(3) Applicability.--This subsection applies with respect 
        to all claims filed on or after the date of enactment of this 
        subsection.''.
    (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
                    (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 inserting ``(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 paragraph (6); and
            (2) by inserting after paragraph (4) the following:
            ``(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 established 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 
                limitation established by paragraph (4), the Reid vapor 
                pressure limitation established by paragraph (1) to all 
                fuel blends containing gasoline and 10 percent 
                denatured anhydrous ethanol that are sold, offered for 
                sale, dispensed, supplied, offered for supply, 
                transported, or introduced 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 submits a 
                        notification under subparagraph (A), the 
                        regulations under that subparagraph 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 
                                notification; or
                                    ``(II) 1 year after the date of 
                                receipt of the notification.
                            ``(ii) Extension of effective date based on 
                        determination of insufficient supply.--
                                    ``(I) In general.--If, after 
                                receipt of a notification with respect 
                                to an area from a Governor of a State 
                                under subparagraph (A), the 
                                Administrator determines, on the 
                                Administrator's own motion or on 
                                petition of any person and after 
                                consultation with the Secretary of 
                                Energy, that the promulgation of 
                                regulations described in subparagraph 
                                (A) would result in an insufficient 
                                supply of gasoline in the State, the 
                                Administrator, by regulation--
                                            ``(aa) shall extend the 
                                        effective date of the 
                                        regulations under clause (i) 
                                        with respect to the area for 
                                        not more than 1 year; and
                                            ``(bb) may renew the 
                                        extension under item (aa) for 2 
                                        additional 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 
                                after the date of receipt of the 
                                petition.''.

SEC. 102. RENEWABLE FUEL.

    (a) In General.--The Clean Air Act is amended by inserting after 
section 211 (42 U.S.C. 7411) the following:

``SEC. 212. RENEWABLE FUEL.

    ``(a) Definitions.--In this section:
            ``(1) Municipal solid waste.--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).
            ``(2) RFG state.--The term `RFG State' means a State in 
        which is located 1 or more covered areas (as defined in section 
        211(k)(10)(D)).
            ``(3) Secretary.--The term `Secretary' means the Secretary 
        of Energy.
    ``(b) Survey of Renewable Fuel Market.--
            ``(1) Survey and report.--Not later than December 1, 2006, 
        and annually thereafter, the Administrator shall--
                    ``(A) conduct, with respect to each conventional 
                gasoline use area and each reformulated gasoline use 
                area in each State, a survey to determine 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 requirements.--
                    ``(A) In general.--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 conducted under paragraph (1) is accurate.
                    ``(B) Reliance on existing requirements.--To avoid 
                duplicative requirements, in carrying out subparagraph 
                (A), the Administrator shall rely, to the maximum 
                extent practicable, on reporting and recordkeeping 
                requirements in effect on the date of enactment of this 
                section.
            ``(3) Confidentiality.--Activities carried out under this 
        subsection shall be conducted in a manner designed to protect 
        confidentiality of individual responses.
    ``(c) Commercial Byproducts From Municipal Solid Waste Loan 
Guarantee Program.--
            ``(1) In general.--In addition to amounts appropriated or 
        otherwise made available by this Act or any other Act, $____ 
        shall be provided until expended for the cost (as defined in 
        the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.)) 
        of loan guarantees issued under section 19 of the Federal 
        Nonnuclear Energy Research and Development Act of 1974 (42 
        U.S.C. 5919) to carry out celluosic biomass commercial 
        demonstration projects.
            ``(2) Demonstration projects.--
                    ``(A) In general.--The Secretary shall issue loan 
                guarantees under this section to carry out not more 
                than 3 projects to commercially demonstrate the 
                feasibility and viability of converting celluosic 
                biomass derived from agricultural residue such as corn 
                stover or straw (including at least 1 project that uses 
                cereal straw as a feedstock or municipal solid waste) 
                into ethanol.
                    ``(B) Design capacity.--Each project shall have a 
                design capacity to produce at least 30,000,000 gallons 
                of cellulose ethanol each year.
            ``(3) Applicant assurances.--An applicant for a loan 
        guarantee under this section shall provide assurances, 
        satisfactory to the Secretary, that--
                    ``(A) the project design has been validated through 
                the operation of a continuous process facility with a 
                cumulative output of at least 50,000 gallons of 
                ethanol;
                    ``(B) the project has been subject to a full 
                technical review;
                    ``(C) the project is covered by adequate project 
                performance guarantees;
                    ``(D) the project, with the loan guarantee, is 
                economically viable; and
                    ``(E) there is a reasonable assurance of repayment 
                of the guaranteed loan.
            ``(4) Limitations.--
                    ``(A) Maximum guarantee.--Except as provided in 
                subparagraph (B), notwithstanding section 19(c)(2)(A) 
                of the Federal Nonnuclear Energy Research and 
                Development Act of 1974 (42 U.S.C. 5919(c)(2)(A)), a 
                loan guarantee under this section may be issued for up 
                to 80 percent of the estimated cost of a project, but 
                may not exceed $250,000,000 for a project.
                    ``(B) Additional guarantees.--
                            ``(i) In general.--The Secretary may issue 
                        additional loan guarantees for a project to 
                        cover up to 80 percent of the excess of actual 
                        project cost over estimated project cost but 
                        not to exceed 15 percent of the amount of the 
                        original guarantee.
                            ``(ii) Principal and interest.--Subject to 
                        subparagraph (A), the Secretary shall guarantee 
                        100 percent of the principal and interest of a 
                        loan made under subparagraph (A).
            ``(5) Equity contributions.--To be eligible for a loan 
        guarantee under this section, an applicant for the loan 
        guarantee shall have binding commitments from equity investors 
        to provide an initial equity contribution of at least 20 
        percent of the total project cost.
            ``(6) Effect of other laws.--The following provisions are 
        inapplicable to a loan guarantee made under this section:
                    ``(A) Subsections (m) and (p) of section 19 of the 
                Federal Nonnuclear Energy Research and Development Act 
                of 1974 (42 U.S.C. 5919).
                    ``(B) The first, third, and fourth sentences of 
                section 19(g)(4) of that Act.
            ``(7) Insufficient amounts.--If the amount made available 
        to carry out this section is insufficient to allow the 
        Secretary to make loan guarantees for 3 projects described in 
        subsection (b), the Secretary shall issue loan guarantees for 1 
        or more qualifying projects under this section in the order in 
        which the applications for the projects are received by the 
        Secretary.
            ``(8) Approval.--An application for a loan guarantee under 
        this section shall be approved or disapproved by the Secretary 
        not later than 90 days after the application is received by the 
        Secretary.
    ``(d) Authorization of Appropriations for Resource Center.--There 
is authorized to be appropriated, for a resource center to further 
develop bioconversion technology using low-cost biomass for the 
production of ethanol at the Center for Biomass-Based Energy at the 
University of Mississippi and the University of Oklahoma, $4,000,000 
for each of fiscal years 2004 through 2006.
    ``(e) Renewable Fuel Production Research and Development Grants.--
            ``(1) In general.--The Administrator shall provide grants 
        for the research into, and development and implementation of, 
        renewable fuel production technologies in RFG States with low 
        rates of ethanol production, including low rates of production 
        of cellulosic biomass ethanol.
            ``(2) Eligibility.--
                    ``(A) In general.--The entities eligible to receive 
                a grant under this subsection are academic institutions 
                in RFG States, and consortia made up of combinations of 
                academic institutions, industry, State government 
                agencies, or local government agencies in RFG States, 
                that have proven experience and capabilities with 
                relevant technologies.
                    ``(B) Application.--To be eligible to receive a 
                grant under this subsection, an eligible entity shall 
                submit to the Administrator an application in such 
                manner and form, and accompanied by such information, 
                as the Administrator may specify.
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $25,000,000 for 
        each of fiscal years 2006 through 2010.
    ``(f) Cellulosic Biomass Ethanol Conversion Assistance.--
            ``(1) In general.--The Secretary may provide grants to 
        merchant producers of cellulosic biomass ethanol in the United 
        States to assist the producers in building eligible production 
        facilities described in paragraph (2) for the production of 
        cellulosic biomass ethanol.
            ``(2) Eligible production facilities.--A production 
        facility shall be eligible to receive a grant under this 
        subsection if the production facility--
                    ``(A) is located in the United States; and
                    ``(B) uses cellulosic biomass feedstocks derived 
                from agricultural residues or municipal solid waste.
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection--
                    ``(A) $250,000,000 for fiscal year 2005; and
                    ``(B) $400,000,000 for fiscal year 2006.''.
    (b) Conforming Amendment.--The table of contents for the Clean Air 
Act (42 U.S.C. 7401 prec.) is amended by inserting after the item 
relating to section 211 the following:

``Sec. 212. Renewable fuels''.

SEC. 103. SURVEY OF RENEWABLE FUELS CONSUMPTION.

    Section 205 of the Department of Energy Organization Act (42 U.S.C. 
7135) is amended by adding at the end the following:
    ``(m) Survey of Renewable Fuels Consumption.--
            ``(1) In general.--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 
        manner designed to protect the confidentiality of individual 
        responses.
            ``(2) Elements of survey.--In conducting the survey, the 
        Administrator shall collect information retrospectively to 
        1998, on a national basis and a regional basis, including--
                    ``(A) the quantity of renewable fuels produced;
                    ``(B) the cost of production;
                    ``(C) the cost of blending and marketing;
                    ``(D) the quantity of renewable fuels blended;
                    ``(E) the quantity of renewable fuels imported; and
                    ``(F) market price data.''.

                  TITLE II--FEDERAL REFORMULATED FUELS

SEC. 201. SHORT TITLE.

    This subtitle may be cited as the ``Federal Reformulated Fuels Act 
of 2005''.

SEC. 202. LEAKING UNDERGROUND STORAGE TANKS.

    (a) Use of LUST Funds for Remediation of Contamination From Ether 
Fuel Additives.--Section 9003(h) of the Solid Waste Disposal Act (42 
U.S.C. 6991b(h)) is amended--
            (1) in paragraph (7)(A)--
                    (A) by striking ``paragraphs (1) and (2) of this 
                subsection'' and inserting ``paragraphs (1), (2), and 
                (12)''; and
                    (B) by inserting ``and section 9010'' before 
                ``if''; and
            (2) by adding at the end the following:
            ``(12) Remediation of contamination from ether fuel 
        additives.--
                    ``(A) In general.--The Administrator and the States 
                may use funds made available under section 9013(1) to 
                carry out corrective actions with respect to a release 
                of methyl tertiary butyl ether or other ether fuel 
                additive that presents a threat to human health, 
                welfare, or the environment.
                    ``(B) Applicable authority.--Subparagraph (A) shall 
                be carried out--
                            ``(i) in accordance with paragraph (2), 
                        except that a release with respect to which a 
                        corrective action is carried out under 
                        subparagraph (A) shall not be required to be 
                        from an underground storage tank; and
                            ``(ii) in the case of a State, in 
                        accordance with a cooperative agreement entered 
                        into by the Administrator and the State under 
                        paragraph (7).''.
    (b) Release Prevention and Compliance.--Subtitle I of the Solid 
Waste Disposal Act (42 U.S.C. 6991 et seq.) is amended by striking 
section 9010 and inserting the following:

``SEC. 9010. RELEASE PREVENTION AND COMPLIANCE.

    ``Funds made available under section 9013(2) from the Leaking 
Underground Storage Tank Trust Fund may be used for conducting 
inspections, or for issuing orders or bringing actions under this 
subtitle--
            ``(1) by a State (pursuant to section 9003(h)(7)) acting 
        under--
                    ``(A) a program approved under section 9004; or
                    ``(B) State requirements regulating underground 
                storage tanks that are similar or identical to this 
                subtitle, as determined by the Administrator; and
            ``(2) by the Administrator, acting under this subtitle or a 
        State program approved under section 9004.

``SEC. 9011. AUTHORIZATION OF APPROPRIATIONS.

    ``In addition to amounts made available under section 2007(f), 
there are authorized to be appropriated from the Leaking Underground 
Storage Tank Trust Fund, notwithstanding section 9508(c)(1) of the 
Internal Revenue Code of 1986--
            ``(1) to carry out section 9003(h)(12), $200,000,000 for 
        fiscal year 2005, to remain available until expended; and
            ``(2) to carry out section 9010, $30,000,000 for each of 
        fiscal years 2005 through 2009.''.
    (c) Technical Amendments.--
            (1) Section 1001 of the Solid Waste Disposal Act (42 U.S.C. 
        prec. 6901) is amended by striking the item relating to section 
        9010 and inserting the following:

``Sec. 9010. Release prevention and compliance.
``Sec. 9011. Authorization of appropriations.''.
            (2) Section 9001(3)(A) of the Solid Waste Disposal Act (42 
        U.S.C. 6991(3)(A)) is amended by striking ``sustances'' and 
        inserting ``substances''.
            (3) Section 9003(f)(1) of the Solid Waste Disposal Act (42 
        U.S.C. 6991b(f)(1)) is amended by striking ``subsection (c) and 
        (d) of this section'' and inserting ``subsections (c) and 
        (d)''.
            (4) Section 9004(a) of the Solid Waste Disposal Act (42 
        U.S.C. 6991c(a)) is amended in the second sentence by striking 
        ``referred to'' and all that follows and inserting ``referred 
        to in subparagraph (A) or (B), or both, of section 9001(2).''.
            (5) Section 9005 of the Solid Waste Disposal Act (42 U.S.C. 
        6991d) is amended--
                    (A) in subsection (a), by striking ``study taking'' 
                and inserting ``study, taking'';
                    (B) in subsection (b)(1), by striking ``relevent'' 
                and inserting ``relevant''; and
                    (C) in subsection (b)(4), by striking 
                ``Evironmental'' and inserting ``Environmental''.

SEC. 203. RESTRICTIONS ON THE USE OF MTBE.

    (a) Findings.--Congress finds that--
            (1) since 1979, methyl tertiary butyl ether (referred to in 
        this section as ``MTBE'') has been used nationwide at low 
        levels in gasoline to replace lead as an octane booster or 
        anti-knocking agent;
            (2) Public Law 101-549 (commonly known as the ``Clean Air 
        Act Amendments of 1990'') (42 U.S.C. 7401 et seq.) established 
        a fuel oxygenate standard under which reformulated gasoline 
        must contain at least 2 percent oxygen by weight;
            (3) at the time of the adoption of the fuel oxygenate 
        standard, Congress was aware that--
                    (A) significant use of MTBE could result from the 
                adoption of that standard; and
                    (B) the use of MTBE would likely be important to 
                the cost-effective implementation of that standard;
            (4) Congress is aware that gasoline and its component 
        additives have leaked from storage tanks, with consequences for 
        water quality;
            (5) the fuel industry responded to the fuel oxygenate 
        standard established by Public Law 101-549 by making 
        substantial investments in--
                    (A) MTBE production capacity; and
                    (B) systems to deliver MTBE-containing gasoline to 
                the marketplace;
            (6) when leaked or spilled into the environment, MTBE may 
        cause serious problems of drinking water quality;
            (7) in recent years, MTBE has been detected in water 
        sources throughout the United States;
            (8) MTBE can be detected by smell and taste at low 
        concentrations;
            (9) while small quantities of MTBE can render water 
        supplies unpalatable, the precise human health effects of MTBE 
        consumption at low levels are yet unknown as of the date of 
        enactment of this Act;
            (10) in the report entitled ``Achieving Clean Air and Clean 
        Water: The Report of the Blue Ribbon Panel on Oxygenates in 
        Gasoline'' and dated September 1999, Congress was urged--
                    (A) to eliminate the fuel oxygenate standard;
                    (B) to greatly reduce use of MTBE; and
                    (C) to maintain the environmental performance of 
                reformulated gasoline;
            (11) Congress has--
                    (A) reconsidered the relative value of MTBE in 
                gasoline; and
                    (B) decided to eliminate use of MTBE as a fuel 
                additive;
            (12) the timeline for elimination of use of MTBE as a fuel 
        additive must be established in a manner that achieves an 
        appropriate balance among the goals of--
                    (A) environmental protection;
                    (B) adequate energy supply; and
                    (C) reasonable fuel prices; and
            (13) it is appropriate for Congress to provide some limited 
        transition assistance--
                    (A) to merchant producers of MTBE who produced MTBE 
                in response to a market created by the oxygenate 
                requirement contained in the Clean Air Act (42 U.S.C. 
                7401 et seq.); and
                    (B) for the purpose of mitigating any fuel supply 
                problems that may result from elimination of a widely-
                used fuel additive.
    (b) Purposes.--The purposes of this section are--
            (1) to eliminate use of MTBE as a fuel oxygenate; and
            (2) to provide assistance to merchant producers of MTBE in 
        making the transition from producing MTBE to producing other 
        fuel additives.
    (c) Authority for Water Quality Protection From Fuels.--Section 
211(c) of the Clean Air Act (42 U.S.C. 7545(c)) is amended--
            (1) in paragraph (1)(A)--
                    (A) by inserting ``fuel or fuel additive or'' after 
                ``Administrator any''; and
                    (B) by striking ``air pollution which'' and 
                inserting ``air pollution, or water pollution, that'';
            (2) in paragraph (4)(B), by inserting ``or water quality 
        protection,'' after ``emission control,''; and
            (3) by adding at the end the following:
            ``(5) Restrictions on use of mtbe.--
                    ``(A) In general.--Subject to subparagraph (E), not 
                later than 4 years after the date of enactment of this 
                paragraph, the use of methyl tertiary butyl ether in 
                motor vehicle fuel in any State other than a State 
                described in subparagraph (C) is prohibited.
                    ``(B) Regulations.--The Administrator shall 
                promulgate regulations to effect the prohibition in 
                subparagraph (A).
                    ``(C) States that authorize use.--A State described 
                in this subparagraph is a State that submits to the 
                Administrator a notice that the State authorizes use of 
                methyl tertiary butyl ether in motor vehicle fuel sold 
                or used in the State.
                    ``(D) Publication of notice.--The Administrator 
                shall publish in the Federal Register each notice 
                submitted by a State under subparagraph (C).
                    ``(E) Trace quantities.--In carrying out 
                subparagraph (A), the Administrator may allow trace 
                quantities of methyl tertiary butyl ether, not to 
                exceed 0.5 percent by volume, to be present in motor 
                vehicle fuel in cases that the Administrator determines 
                to be appropriate.
            ``(6) MTBE merchant producer conversion assistance.--
                    ``(A) In general.--
                            ``(i) Grants.--The Secretary of Energy, in 
                        consultation with the Administrator, may make 
                        grants to merchant producers of methyl tertiary 
                        butyl ether in the United States to assist the 
                        producers in the conversion of eligible 
                        production facilities described in subparagraph 
                        (C) to the production of--
                                    ``(I) iso-octane or alkylates, 
                                unless the Administrator, in 
                                consultation with the Secretary of 
                                Energy, determines that transition 
                                assistance for the production of iso-
                                octane or alkylates is inconsistent 
                                with the criteria specified in 
                                subparagraph (B); and
                                    ``(II) any other fuel additive that 
                                meets the criteria specified in 
                                subparagraph (B).
                    ``(B) Criteria.--The criteria referred to in 
                subparagraph (A) are that--
                            ``(i) use of the fuel additive is 
                        consistent with this subsection;
                            ``(ii) the Administrator has not determined 
                        that the fuel additive may reasonably be 
                        anticipated to endanger public health or the 
                        environment;
                            ``(iii) the fuel additive has been 
                        registered and tested, or is being tested, in 
                        accordance with the requirements of this 
                        section; and
                            ``(iv) the fuel additive will contribute to 
                        replacing quantities of motor vehicle fuel 
                        rendered unavailable as a result of paragraph 
                        (5).
                    ``(C) Eligible production facilities.--A production 
                facility shall be eligible to receive a grant under 
                this paragraph if the production facility--
                            ``(i) is located in the United States; and
                            ``(ii) produced methyl tertiary butyl ether 
                        for consumption in nonattainment areas during 
                        the period--
                                    ``(I) beginning on the date of 
                                enactment of this paragraph; and
                                    ``(II) ending on the effective date 
                                of the prohibition on the use of methyl 
                                tertiary butyl ether under paragraph 
                                (5).
                    ``(D) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $250,000,000 for each of fiscal years 2005 
                through 2008.''.
    (d) No Effect on Law Concerning State Authority.--The amendments 
made by subsection (c) have no effect on the law in effect on the day 
before the date of enactment of this Act concerning the authority of 
States to limit the use of methyl tertiary butyl ether in motor vehicle 
fuel.

SEC. 204. ELIMINATION OF OXYGEN CONTENT REQUIREMENT FOR REFORMULATED 
              GASOLINE.

    (a) Elimination.--
            (1) In general.--Section 211(k) of the Clean Air Act (42 
        U.S.C. 7545(k)) is amended--
                    (A) in paragraph (2)--
                            (i) in the second sentence of subparagraph 
                        (A), by striking ``(including the oxygen 
                        content requirement contained in subparagraph 
                        (B))'';
                            (ii) by striking subparagraph (B); and
                            (iii) by redesignating subparagraphs (C) 
                        and (D) as subparagraphs (B) and (C), 
                        respectively;
                    (B) in paragraph (3)(A), by striking clause (v); 
                and
                    (C) in paragraph (7)--
                            (i) in subparagraph (A)--
                                    (I) by striking clause (i); and
                                    (II) by redesignating clauses (ii) 
                                and (iii) as clauses (i) and (ii), 
                                respectively; and
                            (ii) in subparagraph (C)--
                                    (I) by striking clause (ii); and
                                    (II) by redesignating clause (iii) 
                                as clause (ii).
            (2) Applicability.--The amendments made by paragraph (1) 
        apply--
                    (A) in the case of a State that has received a 
                waiver under section 209(b) of the Clean Air Act (42 
                U.S.C. 7543(b)), beginning on the date of enactment of 
                this Act; and
                    (B) in the case of any other State, beginning 270 
                days after the date of enactment of this Act.
    (b) Maintenance of Toxic Air Pollutant Emission Reductions.--
Section 211(k)(1) of the Clean Air Act (42 U.S.C. 7545(k)(1)) is 
amended--
            (1) by striking ``Within 1 year after the enactment of the 
        Clean Air Act Amendments of 1990,'' and inserting the 
        following:
                    ``(A) In general.--Not later than November 15, 
                1991,''; and
            (2) by adding at the end the following:
                    ``(B) Maintenance of toxic air pollutant emissions 
                reductions from reformulated gasoline.--
                            ``(i) Definition of padd.--In this 
                        subparagraph the term `PADD' means a Petroleum 
                        Administration for Defense District.
                            ``(ii) Regulations concerning emissions of 
                        toxic air pollutants.--Not later than 270 days 
                        after the date of enactment of this 
                        subparagraph, the Administrator shall establish 
                        by regulation, for each refinery or importer 
                        (other than a refiner or importer in a State 
                        that has received a waiver under section 209(b) 
                        with respect to gasoline produced for use in 
                        that State), standards for toxic air pollutants 
                        from use of the reformulated gasoline produced 
                        or distributed by the refiner or importer that 
                        maintain the reduction of the average annual 
                        aggregate emissions of toxic air pollutants for 
                        reformulated gasoline produced or distributed 
                        by the refiner or importer during calendar 
                        years 1999 and 2000 (as determined on the basis 
                        of data collected by the Administrator with 
                        respect to the refiner or importer).
                            ``(iii) Standards applicable to specific 
                        refineries or importers.--
                                    ``(I) Applicability of standards.--
                                For any calendar year, the standards 
                                applicable to a refiner or importer 
                                under clause (ii) shall apply to the 
                                quantity of gasoline produced or 
                                distributed by the refiner or importer 
                                in the calendar year only to the extent 
                                that the quantity is less than or equal 
                                to the average annual quantity of 
                                reformulated gasoline produced or 
                                distributed by the refiner or importer 
                                during calendar years 1999 and 2000.
                                    ``(II) Applicability of other 
                                standards.--For any calendar year, the 
                                quantity of gasoline produced or 
                                distributed by a refiner or importer 
                                that is in excess of the quantity 
                                subject to subclause (I) shall be 
                                subject to standards for emissions of 
                                toxic air pollutants promulgated under 
                                subparagraph (A) and paragraph (3)(B).
                            ``(iv) Credit program.--The Administrator 
                        shall provide for the granting and use of 
                        credits for emissions of toxic air pollutants 
                        in the same manner as provided in paragraph 
                        (7).
                            ``(v) Regional protection of toxics 
                        reduction baselines.--
                                    ``(I) In general.--Not later than 
                                60 days after the date of enactment of 
                                this subparagraph, and not later than 
                                April 1 of each calendar year that 
                                begins after that date of enactment, 
                                the Administrator shall publish in the 
                                Federal Register a report that 
                                specifies, with respect to the previous 
                                calendar year--
                                            ``(aa) the quantity of 
                                        reformulated gasoline produced 
                                        that is in excess of the 
                                        average annual quantity of 
                                        reformulated gasoline produced 
                                        in 1999 and 2000; and
                                            ``(bb) the reduction of the 
                                        average annual aggregate 
                                        emissions of toxic air 
                                        pollutants in each PADD, based 
                                        on retail survey data or data 
                                        from other appropriate sources.
                                    ``(II) Effect of failure to 
                                maintain aggregate toxics reductions.--
                                If, in any calendar year, the reduction 
                                of the average annual aggregate 
                                emissions of toxic air pollutants in a 
                                PADD fails to meet or exceed the 
                                reduction of the average annual 
                                aggregate emissions of toxic air 
                                pollutants in the PADD in calendar 
                                years 1999 and 2000, the Administrator, 
                                not later than 90 days after the date 
                                of publication of the report for the 
                                calendar year under subclause (I), 
                                shall--
                                            ``(aa) identify, to the 
                                        maximum extent practicable, the 
                                        reasons for the failure, 
                                        including the sources, volumes, 
                                        and characteristics of 
                                        reformulated gasoline that 
                                        contributed to the failure; and
                                            ``(bb) promulgate revisions 
                                        to the regulations promulgated 
                                        under clause (ii), to take 
                                        effect not earlier than 180 
                                        days but not later than 270 
                                        days after the date of 
                                        promulgation, to provide that, 
                                        notwithstanding clause 
                                        (iii)(II), all reformulated 
                                        gasoline produced or 
                                        distributed at each refiner or 
                                        importer shall meet the 
                                        standards applicable under 
                                        clause (iii)(I) beginning not 
                                        later than April 1 of the 
                                        calendar year following 
                                        publication of the report under 
                                        subclause (I) and in each 
                                        calendar year thereafter.
                            ``(vi) Regulations to control hazardous air 
                        pollutants from motor vehicles and motor 
                        vehicle fuels.--Not later than July 1, 2005, 
                        the Administrator shall promulgate final 
                        regulations to control hazardous air pollutants 
                        from motor vehicles and motor vehicle fuels, as 
                        provided for in section 80.1045 of title 40, 
                        Code of Federal Regulations (as in effect on 
                        the date of enactment of this subparagraph).''.
    (c) Commingling.--
            (1) In general.--Section 211(k) of the Clean Air Act (42 
        U.S.C. 7545(k)) is amended by adding at the end the following:
            ``(11) Commingling.--The regulations under paragraph (1) 
        shall permit the commingling at a retail station of 
        reformulated gasoline containing ethanol and reformulated 
        gasoline that does not contain ethanol if, each time such 
        commingling occurs--
                    ``(A) the retailer notifies the Administrator 
                before the commingling, identifying the exact location 
                of the retail station and the specific tank in which 
                the commingling will take place; and
                    ``(B) the retailer certifies that the reformulated 
                gasoline resulting from the commingling will meet all 
                applicable requirements for reformulated gasoline, 
                including content and emission performance 
                standards.''.
    (d) Consolidation in Reformulated Gasoline Regulations.--Not later 
than 180 days after the date of enactment of this Act, the 
Administrator of the Environmental Protection Agency shall revise the 
reformulated gasoline regulations under subpart D of part 80 of title 
40, Code of Federal Regulations, to consolidate the regulations 
applicable to VOC-Control Regions 1 and 2 under section 80.41 of that 
title by eliminating the less stringent requirements applicable to 
gasoline designated for VOC-Control Region 2 and instead applying the 
more stringent requirements applicable to gasoline designated for VOC-
Control Region 1.
    (e) Savings Clause.--
            (1) In general.--Nothing in this section or any amendment 
        made by this section affects or prejudices any legal claim or 
        action with respect to regulations promulgated by the 
        Administrator before the date of enactment of this Act 
        regarding--
                    (A) emissions of toxic air pollutants from motor 
                vehicles; or
                    (B) the adjustment of standards applicable to a 
                specific refinery or importer made under those 
                regulations.
            (2) Adjustment of standards.--
                    (A) Applicability.--The Administrator may apply any 
                adjustments to the standards applicable to a refinery 
                or importer under subparagraph (B)(iii)(I) of section 
                211(k)(1) of the Clean Air Act (as added by subsection 
                (b)(2)), except that--
                            (i) the Administrator shall revise the 
                        adjustments to be based only on calendar years 
                        1999 and 2000;
                            (ii) any such adjustment shall not be made 
                        at a level below the average percentage of 
                        reductions of emissions of toxic air pollutants 
                        for reformulated gasoline supplied to PADD I 
                        during calendar years 1999 and 2000; and
                            (iii) in the case of an adjustment based on 
                        toxic air pollutant emissions from reformulated 
                        gasoline significantly below the national 
                        annual average emissions of toxic air 
                        pollutants from all reformulated gasoline--
                                    (I) the Administrator may revise 
                                the adjustment to take account of the 
                                scope of the prohibition on methyl 
                                tertiary butyl ether imposed by 
                                paragraph (5) of section 211(c) of the 
                                Clean Air Act (as added by section 
                                203(c)); and
                                    (II) any such adjustment shall 
                                require the refiner or importer, to the 
                                maximum extent practicable, to maintain 
                                the reduction achieved during calendar 
                                years 1999 and 2000 in the average 
                                annual aggregate emissions of toxic air 
                                pollutants from reformulated gasoline 
                                produced or distributed by the refiner 
                                or importer.

SEC. 205. PUBLIC HEALTH AND ENVIRONMENTAL IMPACTS OF FUELS AND FUEL 
              ADDITIVES.

    Section 211(b) of the Clean Air Act (42 U.S.C. 7545(b)) is 
amended--
            (1) in paragraph (2)--
                    (A) by striking ``may also'' and inserting ``shall, 
                on a regular basis,''; and
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) to conduct tests to determine potential 
                public health and environmental effects of the fuel or 
                additive (including carcinogenic, teratogenic, or 
                mutagenic effects); and''; and
            (2) by adding at the end the following:
            ``(4) Study on certain fuel additives and blendstocks.--
                    ``(A) In general.--Not later than 2 years after the 
                date of enactment of this paragraph, the Administrator 
                shall--
                            ``(i) conduct a study on the effects on 
                        public health (including the effects on 
                        children, pregnant women, minority or low-
                        income communities, and other sensitive 
                        populations), air quality, and water resources 
                        of increased use of, and the feasibility of 
                        using as substitutes for methyl tertiary butyl 
                        ether in gasoline--
                                    ``(I) ethyl tertiary butyl ether;
                                    ``(II) tertiary amyl methyl ether;
                                    ``(III) di-isopropyl ether;
                                    ``(IV) tertiary butyl alcohol;
                                    ``(V) other ethers and heavy 
                                alcohols, as determined by then 
                                Administrator;
                                    ``(VI) ethanol;
                                    ``(VII) iso-octane; and
                                    ``(VIII) alkylates; and
                            ``(ii) conduct a study on the effects on 
                        public health (including the effects on 
                        children, pregnant women, minority or low-
                        income communities, and other sensitive 
                        populations), air quality, and water resources 
                        of the adjustment for ethanol-blended 
                        reformulated gasoline to the volatile organic 
                        compounds performance requirements that are 
                        applicable under paragraphs (1) and (3) of 
                        section 211(k); and
                            ``(iii) submit to the Committee on 
                        Environment and Public Works of the Senate and 
                        the Committee on Energy and Commerce of the 
                        House of Representatives a report describing 
                        the results of the studies under clauses (i) 
                        and (ii).
                    ``(B) Contracts for study.--In carrying out this 
                paragraph, the Administrator may enter into 1 or more 
                contracts with nongovernmental entities such as--
                            ``(i) the national energy laboratories; and
                            ``(ii) institutions of higher education (as 
                        defined in section 101 of the Higher Education 
                        Act of 1965 (20 U.S.C. 1001)).''.

SEC. 206. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

    Section 211 of the Clean Air Act (42 U.S.C. 7545) (as amended by 
section 101(a)) is amended by inserting after subsection (p) the 
following:
    ``(q) Analyses of Motor Vehicle Fuel Changes and Emissions Model.--
            ``(1) Anti-backsliding analysis.--
                    ``(A) Draft analysis.--Not later than 4 years after 
                the date of enactment of this paragraph, the 
                Administrator shall publish for public comment a draft 
                analysis of the changes in emissions of air pollutants 
                and air quality due to the use of motor vehicle fuel 
                and fuel additives resulting from implementation of the 
                amendments made by the Federal Reformulated Fuels Act 
                of 2005.
                    ``(B) Final analysis.--After providing a reasonable 
                opportunity for comment but not later than 5 years 
                after the date of enactment of this paragraph, the 
                Administrator shall publish the analysis in final form.
            ``(2) Emissions model.--For the purposes of this 
        subsection, as soon as the necessary data are available, the 
        Administrator shall develop and finalize an emissions model 
        that reasonably reflects the effects of gasoline 
        characteristics or components on emissions from vehicles in the 
        motor vehicle fleet during calendar year 2007.''.

SEC. 207. ADDITIONAL OPT-IN AREAS UNDER REFORMULATED GASOLINE PROGRAM.

    Section 211(k)(6) of the Clean Air Act (42 U.S.C. 7545(k)(6)) is 
amended--
            (1) by striking ``(6) opt-in areas.--(A) Upon'' and 
        inserting the following:
            ``(6) Opt-in areas.--
                    ``(A) Classified areas.--
                            ``(i) In general.--Upon'';
            (2) in subparagraph (B), by striking ``(B) If'' and 
        inserting the following:
                            ``(ii) Effect of insufficient domestic 
                        capacity to produce reformulated gasoline.--
                        If'';
            (3) in subparagraph (A)(ii) (as redesignated by paragraph 
        (2))--
                    (A) in the first sentence, by striking 
                ``subparagraph (A)'' and inserting ``clause (i)''; and
                    (B) in the second sentence, by striking ``this 
                paragraph'' and inserting ``this subparagraph''; and
            (4) by adding at the end the following:
                    ``(B) Ozone transport region.--
                            ``(i) Application of prohibition.--
                                    ``(I) In general.--On application 
                                of the Governor of a State in the ozone 
                                transport region established by section 
                                184(a), the Administrator, not later 
                                than 180 days after the date of receipt 
                                of the application, shall apply the 
                                prohibition specified in paragraph (5) 
                                to any area in the State (other than an 
                                area classified as a marginal, 
                                moderate, serious, or severe ozone 
                                nonattainment area under subpart 2 of 
                                part D of title I) unless the 
                                Administrator determines under clause 
                                (iii) that there is insufficient 
                                capacity to supply reformulated 
                                gasoline.
                                    ``(II) Publication of 
                                application.--As soon as practicable 
                                after the date of receipt of an 
                                application under subclause (I), the 
                                Administrator shall publish the 
                                application in the Federal Register.
                            ``(ii) Period of applicability.--Under 
                        clause (i), the prohibition specified in 
                        paragraph (5) shall apply in a State--
                                    ``(I) commencing as soon as 
                                practicable but not later than 2 years 
                                after the date of approval by the 
                                Administrator of the application of the 
                                Governor of the State; and
                                    ``(II) ending not earlier than 4 
                                years after the commencement date 
                                determined under subclause (I).
                            ``(iii) Extension of commencement date 
                        based on insufficient capacity.--
                                    ``(I) In general.--If, after 
                                receipt of an application from a 
                                Governor of a State under clause (i), 
                                the Administrator determines, on the 
                                Administrator's own motion or on 
                                petition of any person, after 
                                consultation with the Secretary of 
                                Energy, that there is insufficient 
                                capacity to supply reformulated 
                                gasoline, the Administrator, by 
                                regulation--
                                            ``(aa) shall extend the 
                                        commencement date with respect 
                                        to the State under clause 
                                        (ii)(I) for not more than 1 
                                        year; and
                                            ``(bb) may renew the 
                                        extension under item (aa) for 2 
                                        additional 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 
                                after the date of receipt of the 
                                petition.''.

SEC. 208. FEDERAL ENFORCEMENT OF STATE FUELS REQUIREMENTS.

    Section 211(c)(4)(C) of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)) 
is amended--
            (1) by striking ``(C) A State'' and inserting the 
        following:
                    ``(C) Authority of state to control fuels and fuel 
                additives for reasons of necessity.--
                            ``(i) In general.--A State''; and
            (2) by adding at the end the following:
                            ``(ii) Enforcement by the administrator.--
                        In any case in which a State prescribes and 
                        enforces a control or prohibition under clause 
                        (i), the Administrator, at the request of the 
                        State, shall enforce the control or prohibition 
                        as if the control or prohibition had been 
                        adopted under the other provisions of this 
                        section.''.

SEC. 209. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.

    (a) Study.--
            (1) In general.--The Administrator of the Environmental 
        Protection Agency and the Secretary of Energy shall jointly 
        conduct a study of Federal, State, and local requirements 
        concerning motor vehicle fuels, including--
                    (A) requirements relating to reformulated gasoline, 
                volatility (measured in Reid vapor pressure), 
                oxygenated fuel, and diesel fuel; and
                    (B) other requirements that vary from State to 
                State, region to region, or locality to locality.
            (2) Required elements.--The study shall assess--
                    (A) the effect of the variety of requirements 
                described in paragraph (1) on the supply, quality, and 
                price of motor vehicle fuels available to the consumer;
                    (B) the effect of the requirements described in 
                paragraph (1) on achievement of--
                            (i) national, regional, and local air 
                        quality standards and goals; and
                            (ii) related environmental and public 
                        health protection standards and goals 
                        (including the protection of children, pregnant 
                        women, minority or low-income communities, and 
                        other sensitive populations);
                    (C) the effect of Federal, State, and local motor 
                vehicle fuel regulations, including multiple motor 
                vehicle fuel requirements, on--
                            (i) domestic refiners;
                            (ii) the fuel distribution system; and
                            (iii) industry investment in new capacity;
                    (D) the effect of the requirements described in 
                paragraph (1) on emissions from vehicles, refiners, and 
                fuel handling facilities;
                    (E) the feasibility of developing national or 
                regional motor vehicle fuel slates for the 48 
                contiguous States that, while protecting and improving 
                air quality at the national, regional, and local 
                levels, could--
                            (i) enhance flexibility in the fuel 
                        distribution infrastructure and improve fuel 
                        fungibility;
                            (ii) reduce price volatility and costs to 
                        consumers and producers;
                            (iii) provide increased liquidity to the 
                        gasoline market; and
                            (iv) enhance fuel quality, consistency, and 
                        supply; and
                    (F) the feasibility of providing incentives, and 
                the need for the development of national standards 
                necessary, to promote cleaner burning motor vehicle 
                fuel.
    (b) Report.--
            (1) In general.--Not later than June 1, 2008, the 
        Administrator of the Environmental Protection Agency and the 
        Secretary of Energy shall submit to Congress a report on the 
        results of the study conducted under subsection (a).
            (2) Recommendations.--
                    (A) In general.--The report shall contain 
                recommendations for legislative and administrative 
                actions that may be taken--
                            (i) to improve air quality;
                            (ii) to reduce costs to consumers and 
                        producers; and
                            (iii) to increase supply liquidity.
                    (B) Required considerations.--The recommendations 
                under subparagraph (A) shall take into account the need 
                to provide advance notice of required modifications to 
                refinery and fuel distribution systems in order to 
                ensure an adequate supply of motor vehicle fuel in all 
                States.
            (3) Consultation.--In developing the report, the 
        Administrator of the Environmental Protection Agency and the 
        Secretary of Energy shall consult with--
                    (A) the Governors of the States;
                    (B) automobile manufacturers;
                    (C) State and local air pollution control 
                regulators;
                    (D) public health experts;
                    (E) motor vehicle fuel producers and distributors; 
                and
                    (F) the public.
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