[Congressional Record Volume 148, Number 15 (Friday, February 15, 2002)]
[Senate]
[Pages S900-S901]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HARKIN (for himself, Mr. fitzgerald, and Mr. Johnson):
  S. 1960. A bill to amend the Biomass Research and Development Act of 
2000 to encourage production of biobased energy products, and for other 
purposes; to the Committee on Agriculture, Nutrition, and Forestry.
 Mr. HARKIN. Mr. President, I am introducing today the Biobased 
Energy Incentives Act of 2002. I am pleased to be joined by Senators 
Fitzgerald and Johnson. This legislation amends the Biomass Research 
and Development Act of 2000 and establishes a biobased energy incentive 
program within the Department of Agriculture.
  The program provides payments to eligible biofuels producers through 
the Commodity Credit Corporation for using certain commodities to 
produce ethanol and biodiesel. All ethanol and biodiesel producers will 
be eligible to participate in the program. However, payment levels will 
be a little higher for smaller producers, giving them a better chance 
to compete with their larger counterparts. Payments to any one producer 
will be capped at 7 percent of the total funds made available for a 
fiscal year.
  This legislation comes at the right time. The Department of 
Agriculture has run a bioenergy program on a pilot basis for the past 
two years. It has shown very promising initial results. In Iowa, for 
instance, the program has helped bring down the price of soy diesel. 
Cedar Rapids now has dozens of vehicles that run on a blend of soy and 
regular diesel. Over the same time that this program has operated, the 
U.S. ethanol industry has established production records almost every 
month. Nearly 20 new ethanol plants began construction last year, 
assuring continued expansion of the industry.
  Yet there is no guarantee the Department will continue the program. A 
continuation is not in the Administration's budget proposal for fiscal 
year 2003. We can't afford to see this type of initiative flounder or, 
worse yet, end.

[[Page S901]]

 Our bill, if passed, will require the Department of Agriculture to run 
a bioenergy program indefinitely with secure funding.
  The benefits of this legislation are obvious. Increased renewable 
fuel production lessens our dependence on foreign oil, provides 
environmental and public health gains, bolsters farm income, creates 
jobs and boosts economic growth, especially in rural areas. This also 
contributes to a sound homeland security strategy. The Nation must 
become energy independent, and domestically produced renewable fuels, 
along with other forms of renewable energy like wind power and biomass, 
play an important part in this endeavor.
  I want to thank Senator Fitzgerald and Senator Johnson for co-
sponsoring this legislation with me. Their leadership in this area will 
be essential in moving the bill forward. I am hopeful we can pass this 
bill quickly to help secure a brighter future for our nation's farmers 
and fellow citizens.
  I ask that the text of the bill be printed in the Record.
  The bill follows.

                                S. 1960

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Biobased Energy Incentive 
     Act of 2002''.

     SEC. 2. PRODUCTION OF BIOBASED ENERGY PRODUCTS.

       The Biomass Research and Development Act of 2000 (7 U.S.C. 
     7624 note; Public Law 106-224) is amended--
       (1) by redesignating section 310 as section 311; and
       (2) by inserting after section 309 the following:

     ``SEC. 310. PRODUCTION OF BIOBASED ENERGY PRODUCTS.

       ``(a) Definitions.--In this section:
       ``(1) Biobased energy product.--The term `biobased energy 
     product' means biodiesel or ethanol fuel.
       ``(2) Biodiesel.--The term `biodiesel' means a monoalkyl 
     ester that meets the requirements of ASTM D6751.
       ``(3) Eligible commodity.--The term `eligible commodity' 
     means wheat, corn, grain sorghum, barley, oats, rice, 
     soybeans, sunflower seed, rapeseed, canola, safflower, 
     flaxseed, mustard, crambe, sesame seed, cottonseed, and 
     cellulosic commodities (such as hybrid poplars and switch 
     grass).
       ``(4) Eligible producer.--The term `eligible producer' 
     means a producer that--
       ``(A) uses an eligible commodity to produce a biobased 
     energy product; and
       ``(B) enters into a contract with the Secretary under 
     subsection (b)(2).
       ``(5) New producer.--The term `new producer' means an 
     eligible producer that has not used an eligible commodity to 
     produce a biobased energy product during the preceding fiscal 
     year.
       ``(b) Biobased Energy Incentive Program.--
       ``(1) Establishment.--The Secretary shall establish a 
     biobased energy incentive program under which the Secretary 
     shall make payments to eligible producers to promote the use 
     of eligible commodities to produce biobased energy products.
       ``(2) Contracts.--
       ``(A) In general.--To be eligible to receive a payment, an 
     eligible producer shall enter into a contract with the 
     Secretary under which the producer shall agree to increase 
     the use of eligible commodities to produce biobased energy 
     products during 1 or more fiscal years.
       ``(B) Quarterly payments.--Under a contract--
       ``(i) the eligible producer shall agree to increase the use 
     of eligible commodities to produce biobased energy products 
     during each fiscal year covered by the contract; and
       ``(ii) the Secretary shall make payments to the eligible 
     producer for each quarter of the fiscal year.
       ``(3) Amount.--Subject to paragraphs (6) through (8), the 
     amount of a payment made to an eligible producer for a fiscal 
     year under this subsection shall be determined by 
     multiplying--
       ``(A) the payment quantity for the fiscal year determined 
     under paragraph (4); by
       ``(B) the payment rate determined under paragraph (5).
       ``(4) Payment quantity.--
       ``(A) In general.--Subject to subparagraph (B), the payment 
     quantity for payments made to an eligible producer for a 
     fiscal year under this subsection shall equal the difference 
     between--
       ``(i) the quantity of eligible commodities that the 
     eligible producer agrees to use, under the contract entered 
     into with the Secretary, to produce biobased energy products 
     during the fiscal year; and
       ``(ii) the quantity of eligible commodities that the 
     eligible producer used to produce biobased energy products 
     during the preceding fiscal year.
       ``(B) New producers.--The payment quantity for payments 
     made to a new producer for the first fiscal year of a 
     contract under this subsection shall equal 25 percent of the 
     quantity of eligible commodities that the eligible producer 
     uses to produce biobased energy products during the fiscal 
     year.
       ``(5) Payment rate.--
       ``(A) In general.--Subject to subparagraph (B), the payment 
     rate for payments made to an eligible producer under this 
     subsection for the use of an eligible commodity shall be 
     determined by the Secretary to compensate the eligible 
     producer for the local value of--
       ``(i) in the case of corn, 1 bushel of corn for each 3 
     bushels of additional corn that is used to produce a biobased 
     energy product; and
       ``(ii) in the case of each other eligible commodity, an 
     equivalent quantity determined by the Secretary.
       ``(B) Small-scale producers.--The payment rate for payments 
     made to an eligible producer that has an annual capacity of 
     less than 60,000,000 gallons of biobased energy products 
     shall be at least 25 percent higher than the payment rate for 
     other eligible producers, as determined by the Secretary.
       ``(6) Proration.--If the amount made available for a fiscal 
     year under subsection (d)(2)(A) is insufficient to allow the 
     payment of the amount of the payments that eligible producers 
     (that apply for the payments) otherwise would have a right to 
     receive under this subsection, the Secretary shall prorate 
     the amount of the funds among all such eligible producers.
       ``(7) Overpayments.--If the total amount of payments that 
     an eligible producer receives for a fiscal year under this 
     section exceeds the amount the eligible producer should have 
     received under this subsection, the producer shall repay the 
     amount of the overpayment to the Secretary, plus interest (as 
     determined by the Secretary).
       ``(8) Limitation.--No eligible producer shall receive more 
     than 7 percent of the total amount made available for a 
     fiscal year under subsection (d)(2)(A).
       ``(9) Recordkeeping and monitoring.--To be eligible to 
     receive a payment under this subsection, an eligible producer 
     shall--
       ``(A) maintain for at least 3 years records relating to the 
     production of biobased energy products; and
       ``(B) make the records available to the Secretary to verify 
     eligibility for the payments.
       ``(10) Other requirements.--To be eligible to receive a 
     payment under this subsection, an eligible producer shall 
     meet other requirements of Federal law (including 
     regulations) applicable to the production of biodiesel or 
     ethanol fuel.
       ``(c) Availability of Biobased Energy Products.--The 
     Secretary shall establish a program to encourage wider 
     availability of biobased energy products to consumers of 
     gasoline and diesel fuels.
       ``(d) Funding.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall use the funds, facilities, and authorities of the 
     Commodity Credit Corporation to carry out this section.
       ``(2) Fiscal year limitations.--The amount of funds of the 
     Commodity Credit Corporation used to carry out this section 
     shall not exceed--
       ``(A) in the case of subsection (b), $150,000,000 for 
     fiscal year 2003 and each subsequent fiscal year; and
       ``(B) in the case of subsection (c), $10,000,000 for fiscal 
     year 2003 and each subsequent fiscal year.''.
                                 ______