[Congressional Record Volume 153, Number 1 (Thursday, January 4, 2007)]
[Senate]
[Pages S127-S133]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. OBAMA (for himself, Mr. Lugar, and Mr. Harkin):
S. 133. A bill to promote the national security and stability of the
economy of the United States by reducing the dependence of the United
States on oil through the use of alternative fuels and new technology,
and for other purposes; to the Committee on Finance.
Mr. OBAMA. Mr. President, in 2005, Congress enacted the Renewable
Fuels Standard, RFS, as part of the Energy Policy Act. The RFS is a
commitment by the United States government that, henceforth, ethanol
must comprise a substantial part of the national vehicle fuel supply,
with a goal of 7.5 billion gallons of ethanol in our gasoline by 2012.
Ethanol production has responded vigorously to this national policy.
In fact, in only two years, ethanol production has boomed to where it
now far exceeds the RFS target for this year. It is
[[Page S128]]
widely anticipated that ethanol production will surpass the target for
the year 2012 by the end of this year, five years early.
Clearly, it is time to increase the RFS targets. I am pleased to be
an original cosponsor of the bill introduced today by my colleagues,
Senator Harkin and Senator Lugar, that will increase those targets to
30 billion gallons by the year 2020 and 60 billion gallons by the year
2030. I hope my colleagues will support the provisions of that bill.
But for an expanded RFS to be successful, we must lay further
groundwork. We cannot meet the targets and deadlines of an expanded RFS
without a robust package of policies that set the stage for the next
decade.
So far, we've met our biofuels goals by producing ethanol made from
sugars that come from corn. This approach, by itself, has been
profoundly successful in many rural communities but will eventually
reach its maximum capacity. While that day is still several years away,
we must begin preparations now. We must build upon our current path. We
must continue our pursuit in cracking the code for corn cellulosics. We
must pour the foundation for the next generation of biofuels made from
the broadest range of agriculture feedstocks. Our vocabulary must
expand to cellulosics and biobut- anols, manure and miscanthus.
The American Fuels Act, which I introduce today, breathes life into
an expanded RFS. The American Fuels Act is the heart, the centerpiece,
the key to ensuring that an expanded RFS is successful. That's why I am
pleased to be joined today by my esteemed colleagues, Senator Lugar and
Senator Harkin, in the introduction of this bill.
The premise of the American Fuels Act is to create a ``Biofuels
Triangle'' that focuses on (1). production, (2). distribution, and (3)
consumption.
To expand production, we create an ``Alternative Diesel Standard''
for diesels that complements the RFS for gasoline. The Alternative
Diesel Standard requires 2 billion gallons of alternative diesels into
the 40 billion gallon domestic diesel supply by the year 2016,
encouraging greater use of biofuel feedstocks like vegetable oils,
animal fats, coal-to-liquids, manure, and municipal waste. We call for
the establishment of a cellulosic biomass fuels credit of an additional
76.5 cents per gallon so that first-generation cellulosic plants can be
built to meet the 250 million gallon production goals by 2012.
To expand distribution, the American Fuels Act provides a tax credit
for ethanol producers to invest in on-site blending equipment,
bypassing oil refineries so that E-85 can be transported directly to
the pump at your local gas station. Our bill also provides freedom for
fuel franchisers by making it illegal for oil companies to stop their
branded franchises from selling biofuels should these local businessmen
wish to respond to their customer's request for biofuels. This bill
also gives franchisers the power to sue oil companies for imposing any
restrictions.
And to expand consumption, the American Fuels Act encourages the
manufacture of more vehicles that can function on higher ethanol blends
like E-85 so that more passenger cars to be flexible fuel vehicles. We
provide a $100 tax credit to automakers for each ethanol-capable
vehicle produced beyond the CAFE credit or any other government
requirement. We require that 100 percent of the Federal fleet must be
ethanol-capable or hybrids in the next 7 years. And we require that any
public transit agency that uses Federal dollars to upgrade bus fleets
must purchase an alternative fuel bus, or pledge to use alternative
fuels in those buses.
To oversee these efforts, we create a Director of Energy Security in
the Office of the President to ensure that our massive investment in
domestically produced fuels get the national security leadership and
coordination it requires.
Our dependence on oil is hurting our economy and jeopardizing our
national security by keeping us tied to the world's most dangerous and
unstable regimes. It's the fossil fuels we insist on burning--
particularly oil--that are the single greatest cause of climate change
and the damaging weather patterns that have been its result. Never has
the failure to take on a single challenge so detrimentally affected
nearly every aspect of our well-being as Nation. And never have the
possible solutions had the potential to do so much good for so many
generations to come.
That's why I urge my colleagues to join us in cosponsoring the
American Fuels Act. I ask for their support, and for the swift
enactment of this bill. I ask unanimous consent that the text of the
American Fuels Act be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 133
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 ``American
Fuels Act of 2007''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Office of Energy Security.
Sec. 3. Credit for production of qualified flexible fuel motor
vehicles.
Sec. 4. Incentives for the retail sale of alternative fuels as motor
vehicle fuel.
Sec. 5. Freedom for fuel franchisers.
Sec. 6. Alternative diesel fuel content of diesel.
Sec. 7. Excise tax credit for production of cellulosic biomass ethanol.
Sec. 8. Incentive for Federal and State fleets for medium and heavy
duty hybrids.
Sec. 9. Credit for qualifying ethanol blending and processing
equipment.
Sec. 10. Public access to Federal alternative refueling stations.
Sec. 11. Purchase of clean fuel buses.
Sec. 12. Domestic fuel production volumes to meet Department of Defense
needs.
Sec. 13. Federal fleet energy conservation improvement.
SEC. 2. OFFICE OF ENERGY SECURITY.
(a) Definitions.--In this section:
(1) Director.--The term ``Director'' means the Director of
Energy Security appointed under subsection (c)(1).
(2) Office.--The term ``Office'' means the Office of Energy
Security established by subsection (b).
(b) Establishment.--There is established in the Executive
Office of the President the Office of Energy Security.
(c) Director.--
(1) In general.--The Office shall be headed by a Director,
who shall be appointed by the President, by and with the
advice and consent of the Senate.
(2) Rate of pay.--The Director shall be paid at a rate of
pay equal to level I of the Executive Schedule under section
5312 of title 5, United States Code.
(d) Responsibilities.--
(1) In general.--The Office, acting through the Director,
shall be responsible for overseeing all Federal energy
security programs, including the coordination of efforts of
Federal agencies to assist the United States in achieving
full energy independence.
(2) Specific responsibilities.--In carrying out paragraph
(1), the Director shall--
(A) serve as head of the energy community;
(B) act as the principal advisor to the President, the
National Security Council, the National Economic Council, the
Domestic Policy Council, and the Homeland Security Council
with respect to intelligence matters relating to energy
security;
(C) with request to budget requests and appropriations for
Federal programs relating to energy security--
(i) consult with the President and the Director of the
Office of Management and Budget with respect to each major
Federal budgetary decision relating to energy security of the
United States;
(ii) based on priorities established by the President,
provide to the heads of departments containing agencies or
organizations within the energy community, and to the heads
of such agencies and organizations, guidance for use in
developing the budget for Federal programs relating to energy
security;
(iii) based on budget proposals provided to the Director by
the heads of agencies and organizations described in clause
(ii), develop and determine an annual consolidated budget for
Federal programs relating to energy security; and
(iv) present the consolidated budget, together with any
recommendations of the Director and any heads of agencies and
organizations described in clause (ii), to the President for
approval;
(D) establish and meet regularly with a council of business
and labor leaders to develop and provide to the President and
Congress recommendations relating to the impact of energy
supply and prices on economic growth;
(E) submit to Congress an annual report that describes the
progress of the United States toward the goal of achieving
full energy independence; and
(F) carry out such other responsibilities as the President
may assign.
(e) Staff.--
(1) In general.--The Director may, without regard to the
civil service laws (including regulations), appoint and
terminate such personnel as are necessary to enable the
Director to carry out the responsibilities of the Director
under this section.
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(2) Compensation.--
(A) In general.--Except as provided in subparagraph (B),
the Director may fix the compensation of personnel without
regard to the provisions of chapter 51 and subchapter III of
chapter 53 of title 5, United States Code, relating to
classification of positions and General Schedule pay rates.
(B) Maximum rate of pay.--The rate of pay for the personnel
appointed by the Director shall not exceed the rate payable
for level V of the Executive Schedule under section 5316 of
title 5, United States Code.
(f) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this section.
SEC. 3. CREDIT FOR PRODUCTION OF QUALIFIED FLEXIBLE FUEL
MOTOR VEHICLES.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:
``SEC. 45O. PRODUCTION OF QUALIFIED FLEXIBLE FUEL MOTOR
VEHICLES.
``(a) Allowance of Credit.--For purposes of section 38, in
the case of a manufacturer, the qualified flexible fuel motor
vehicle production credit determined under this section for
any taxable year is an amount equal to the incremental
flexible fuel motor vehicle cost for each qualified flexible
fuel motor vehicle produced in the United States by the
manufacturer during the taxable year.
``(b) Incremental Flexible Fuel Motor Vehicle Cost.--With
respect to any qualified flexible fuel motor vehicle, the
incremental flexible fuel motor vehicle cost is an amount
equal to the lesser of--
``(1) the excess of--
``(A) the cost of producing such qualified flexible fuel
motor vehicle, over
``(B) the cost of producing such motor vehicle if such
motor vehicle was not a qualified flexible fuel motor
vehicle, or
``(2) $100.
``(c) Qualified Flexible Fuel Motor Vehicle.--For purposes
of this section, the term `qualified flexible fuel motor
vehicle' means a flexible fuel motor vehicle--
``(1) the production of which is not required for the
manufacturer to meet--
``(A) the maximum credit allowable for vehicles described
in paragraph (2) in determining the fleet average fuel
economy requirements (as determined under section 32904 of
title 49, United States Code) of the manufacturer for the
model year ending in the taxable year, or
``(B) the requirements of any other provision of Federal
law, and
``(2) which is designed so that the vehicle is propelled by
an engine which can use as a fuel a gasoline mixture of which
85 percent (or another percentage of not less than 70
percent, as the Secretary may determine, by rule, to provide
for requirements relating to cold start, safety, or vehicle
functions) of the volume of consists of ethanol.
``(d) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Motor vehicle.--The term `motor vehicle' has the
meaning given such term by section 30(c)(2).
``(2) Manufacturer.--The term `manufacturer' has the
meaning given such term in regulations prescribed by the
Administrator of the Environmental Protection Agency for
purposes of the administration of title II of the Clean Air
Act (42 U.S.C. 7521 et seq.).
``(3) Reduction in basis.--For purposes of this subtitle,
if a credit is allowed under this section for any expenditure
with respect to any property, the increase in the basis of
such property which would (but for this paragraph) result
from such expenditure shall be reduced by the amount of the
credit so allowed.
``(4) No double benefit.--The amount of any deduction or
credit allowable under this chapter (other than the credits
allowable under this section and section 30B) shall be
reduced by the amount of credit allowed under subsection (a)
for such vehicle for the taxable year.
``(5) Election not to take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects to not have this section apply to such vehicle.
``(6) Termination.--This section shall not apply to any
vehicle produced after December 31, 2011.
``(7) Cross reference.--For an election to claim certain
minimum tax credits in lieu of the credit determined under
this section, see section 53(e).''.
(b) Credit Allowed Against the Alternative Minimum Tax.--
Section 38(c)(4)(B) of the Internal Revenue Code of 1986
(defining specified credits) is amended by striking the
period at the end of clause (ii)(II) and inserting ``, and'',
and by adding at the end the following new clause:
``(iii) the credit determined under section 45O.''.
(c) Election to Use Additional AMT Credit.--Section 53 of
the Internal Revenue Code of 1986 (relating to credit for
prior year minimum tax liability) is amended by adding at the
end the following new subsection:
``(e) Additional Credit in Lieu of Flexible Fuel Motor
Vehicle Credit.--
``(1) In general.--In the case of a taxpayer making an
election under this subsection for a taxable year, the amount
otherwise determined under subsection (c) shall be increased
by any amount of the credit determined under section 45O for
such taxable year which the taxpayer elects not to claim
pursuant to such election.
``(2) Election.--A taxpayer may make an election for any
taxable year not to claim any amount of the credit allowable
under section 45O with respect to property produced by the
taxpayer during such taxable year. An election under this
subsection may only be revoked with the consent of the
Secretary.
``(3) Credit refundable.--The aggregate increase in the
credit allowed by this section for any taxable year by reason
of this subsection shall for purposes of this title (other
than subsection (b)(2) of this section) be treated as a
credit allowed to the taxpayer under subpart C.''.
(d) Conforming Amendments.--Section 38(b) of the Internal
Revenue Code of 1986 is amended by striking ``plus'' at the
end of paragraph (30), by striking the period at the end of
paragraph (31) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(32) the qualified flexible fuel motor vehicle production
credit determined under section 45N, plus''.
(e) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new item:
``Sec. 45O. Production of qualified flexible fuel motor vehicles.''.
(f) Effective Date.--The amendments made by this section
shall apply to motor vehicles produced in model years ending
after the date of the enactment of this Act.
SEC. 4. INCENTIVES FOR THE RETAIL SALE OF ALTERNATIVE FUELS
AS MOTOR VEHICLE FUEL.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business related credits) is amended by inserting after
section 40A the following new section:
``SEC. 40B. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS
MOTOR VEHICLE FUEL.
``(a) General Rule.--The alternative fuel retail sales
credit for any taxable year is the applicable amount for each
gallon of alternative fuel sold at retail by the taxpayer
during such year.
``(b) Applicable Amount.--For purposes of this section, the
applicable amount shall be determined in accordance with the
following table:
``In the case of any sale: The applicable amount
for each gallon is:
Before 2010...................................................35 cents
During 2010 or 2011...........................................20 cents
During 2012...................................................10 cents.
``(c) Definitions.--For purposes of this section--
``(1) Alternative fuel.--The term `alternative fuel' means
any fuel at least 85 percent (or another percentage of not
less than 70 percent, as the Secretary may determine, by
rule, to provide for requirements relating to cold start,
safety, or vehicle functions) of the volume of which consists
of ethanol.
``(2) Sold at retail.--
``(A) In general.--The term `sold at retail' means the
sale, for a purpose other than resale, after manufacture,
production, or importation.
``(B) Use treated as sale.--If any person uses alternative
fuel (including any use after importation) as a fuel to
propel any qualified alternative fuel motor vehicle (as
defined in this section) before such fuel is sold at retail,
then such use shall be treated in the same manner as if such
fuel were sold at retail as a fuel to propel such a vehicle
by such person.
``(3) Qualified alternative fuel motor vehicle.--The term
`new qualified alternative fuel motor vehicle' means any
motor vehicle--
``(A) which is capable of operating on an alternative fuel,
``(B) the original use of which commences with the
taxpayer,
``(C) which is acquired by the taxpayer for use or lease,
but not for resale, and
``(D) which is made by a manufacturer.
``(d) Election To Pass Credit.--A person which sells
alternative fuel at retail may elect to pass the credit
allowable under this section to the purchaser of such fuel
or, in the event the purchaser is a tax-exempt entity or
otherwise declines to accept such credit, to the person which
supplied such fuel, under rules established by the Secretary.
``(e) Pass-Thru in the Case of Estates and Trusts.--Under
regulations prescribed by the Secretary, rules similar to the
rules of subsection (d) of section 52 shall apply.
``(f) Termination.--This section shall not apply to any
fuel sold at retail after December 31, 2012.''.
(b) Credit Treated as Business Credit.--Section 38(b) of
the Internal Revenue Code of 1986 (relating to current year
business credit), as amended by section 4(d), is amended by
striking ``plus'' at the end of paragraph (31), by striking
the period at the end of paragraph (32) and inserting ``,
plus'', and by adding at the end the following new paragraph:
``(33) the alternative fuel retail sales credit determined
under section 40B(a).''.
(c) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by inserting after the item
relating to section 40A the following new item:
``Sec. 40B. Credit for retail sale of alternative fuels as motor
vehicle fuel.''.
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(d) Effective Date.--The amendments made by this section
shall apply to fuel sold at retail after the date of
enactment of this Act, in taxable years ending after such
date.
SEC. 5. FREEDOM FOR FUEL FRANCHISERS.
(a) Prohibition on Restriction of Installation of
Alternative Fuel Pumps.--
(1) In general.--Title I of the Petroleum Marketing
Practices Act (15 U.S.C. 2801 et seq.) is amended by adding
at the end the following:
``SEC. 107. PROHIBITION ON RESTRICTION OF INSTALLATION OF
ALTERNATIVE FUEL PUMPS.
``(a) Definition.--In this section:
``(1) Alternative fuel.--The term `alternative fuel' means
any fuel--
``(A) at least 85 percent of the volume of which consists
of ethanol, natural gas, compressed natural gas, liquefied
natural gas, liquefied petroleum gas, hydrogen, or any
combination of those fuels; or
``(B) any mixture of biodiesel (as defined in section
40A(d)(1) of the Internal Revenue Code of 1986) and diesel
fuel (as defined in section 4083(a)(3) of the Internal
Revenue Code of 1986), determined without regard to any use
of kerosene and containing at least 20 percent biodiesel.
``(2) Franchise-related document.--The term `franchise-
related document' means--
``(A) a franchise under this Act; and
``(B) any other contract or directive of a franchisor
relating to terms or conditions of the sale of fuel by a
franchisee.
``(b) Prohibitions.--
``(1) In general.--Notwithstanding any provision of a
franchise-related document in effect on the date of enactment
of this section, no franchisee or affiliate of a franchisee
shall be restricted from--
``(A) installing on the marketing premises of the
franchisee an alternative fuel pump;
``(B) converting an existing tank and pump on the marketing
premises of the franchisee for alternative fuel use;
``(C) advertising (including through the use of signage or
logos) the sale of any alternative fuel; or
``(D) selling alternative fuel in any specified area on the
marketing premises of the franchisee (including any area in
which a name or logo of a franchisor or any other entity
appears).
``(2) Enforcement.--Any restriction described in paragraph
(1) that is contained in a franchise-related document and in
effect on the date of enactment of this section--
``(A) shall be considered to be null and void as of that
date; and
``(B) shall not be enforced under section 105.
``(c) Exception to 3-Grade Requirement.--No franchise-
related document that requires that 3 grades of gasoline be
sold by the applicable franchisee shall prevent the
franchisee from selling an alternative fuel in lieu of 1
grade of gasoline.''.
(2) Conforming amendments.--
(A) In general.--Section 101(13) of the Petroleum Marketing
Practices Act (15 U.S.C. 2801(13)) is amended by adjusting
the indentation of subparagraph (C) appropriately.
(B) Table of contents.--The table of contents of the
Petroleum Marketing Practices Act (15 U.S.C. 2801 note) is
amended--
(i) by inserting after the item relating to section 106 the
following:
``Sec. 107. Prohibition on restriction of installation of alternative
fuel pumps.'';
and
(ii) by striking the item relating to section 202 and
inserting the following:
``Sec. 202. Automotive fuel rating testing and disclosure
requirements.''.
(b) Application of Gasohol Competition Act of 1980.--
Section 26 of the Clayton Act (15 U.S.C. 26a) is amended--
(1) by redesignating subsection (c) as subsection (d);
(2) by inserting after subsection (b) the following:
``(c) Restriction Prohibited.--For purposes of subsection
(a), restricting the right of a franchisee to install on the
premises of that franchisee qualified alternative fuel
vehicle refueling property (as defined in section 30C(c) of
the Internal Revenue Code of 1986) shall be considered an
unlawful restriction.''; and
(3) in subsection (d) (as redesignated by paragraph (1)),
by striking ``(d) As used in this section,'' and inserting
the following:
SEC. 6. ALTERNATIVE DIESEL FUEL CONTENT OF DIESEL.
(a) Findings.--Congress finds that--
(1) section 211(o) of the Clean Air Act (42 U.S.C. 7535(o))
(as amended by section 1501 of the Energy Policy Act of 2005
(Public Law 109-58)) established a renewable fuel program
under which entities in the petroleum sector are required to
blend renewable fuels into motor vehicle fuel based on the
gasoline motor pool;
(2) the need for energy diversification is greater as of
the date of enactment of this Act than it was only months
before the date of enactment of the Energy Policy Act (Public
Law 109-58; 119 Stat. 594); and
(3)(A) the renewable fuel program under section 211(o) of
the Clean Air Act requires a small percentage of the gasoline
motor pool, totaling nearly 140,000,000,000 gallons, to
contain a renewable fuel; and
(B) the small percentage requirement described in
subparagraph (A) does not include the 40,000,000,000-gallon
diesel motor pool.
(b) Alternative Diesel Fuel Program for Diesel Motor
Pool.--Section 211 of the Clean Air Act (42 U.S.C. 7545) is
amended by inserting after subsection (o) the following:
``(p) Alternative Diesel Fuel Program for Diesel Motor
Pool.--
``(1) Definition of alternative diesel fuel.--
``(A) In general.--In this subsection, the term
`alternative diesel fuel' means biodiesel (as defined in
section 312(f) of the Energy Policy Act of 1992 (42 U.S.C.
13220(f))) and any blending components derived from
alternative fuel (provided that only the alternative fuel
portion of any such blending component shall be considered to
be part of the applicable volume under the alternative diesel
fuel program established by this subsection).
``(B) Inclusions.--The term `alternative diesel fuel'
includes a diesel fuel substitute produced from--
``(i) animal fat;
``(ii) plant oil;
``(iii) recycled yellow grease;
``(iv) single-cell or microbial oil;
``(v) thermal depolymerization;
``(vi) thermochemical conversion;
``(vii) a coal-to-liquid process (including the Fischer-
Tropsch process) that provides for the sequestration of
carbon emissions;
``(viii) a diesel-ethanol blend of not less than 7 percent
ethanol; or
``(ix) sugar, starch, or cellulosic biomass.
``(2) Alternative diesel fuel program.--
``(A) Regulations.--
``(i) In general.--Not later than 1 year after the date of
enactment of this subsection, the Administrator shall
promulgate regulations to ensure that diesel sold or
introduced into commerce in the United States (except in
noncontiguous States or territories), on an annual average
basis, contains the applicable volume of alternative diesel
fuel determined in accordance with subparagraph (B).
``(ii) Provisions of regulations.--Regardless of the date
of promulgation, the regulations promulgated under clause
(i)--
``(I) shall contain compliance provisions applicable to
refineries, blenders, distributors, and importers, as
appropriate, to ensure that the requirements of this
paragraph are met; but
``(II) shall not--
``(aa) restrict geographic areas in which alternative
diesel fuel may be used; or
``(bb) impose any per-gallon obligation for the use of
alternative diesel fuel.
``(iii) Requirement in case of failure to promulgate
regulations.--If the Administrator fails to promulgate
regulations under clause (i), the percentage of alternative
diesel fuel in the diesel motor pool sold or dispensed to
consumers in the United States, on a volume basis, shall be
0.6 percent for calendar year 2009.
``(B) Applicable volume.--
``(i) Calendar years 2009 through 2016.--For the purpose of
subparagraph (A), the applicable volume for any of calendar
years 2009 through 2016 shall be determined in accordance
with the following table:
``Applicable volume of Alternative diesel fuel in diesel motor pool (in
millions of gallons): Calendar year:
250..............................................................2009
500..............................................................2010
750..............................................................2011
1,000............................................................2012
1,250............................................................2013
1,500............................................................2014
1,750............................................................2015
2,000............................................................2016
``(ii) Calendar year 2017 and thereafter.--The applicable
volume for calendar year 2017 and each calendar year
thereafter shall be determined by the Administrator, in
coordination with the Secretary of Agriculture and the
Secretary of Energy, based on a review of the implementation
of the program during calendar years 2009 through 2016,
including a review of--
``(I) the impact of the use of alternative diesel fuels on
the environment, air quality, energy security, job creation,
and rural economic development; and
``(II) the expected annual rate of future production of
alternative diesel fuels to be used as a blend component or
replacement to the diesel motor pool.
``(iii) Minimum applicable volume.--For the purpose of
subparagraph (A), the applicable volume for calendar year
2017 and each calendar year thereafter shall be equal to the
product obtained by multiplying--
``(I) the number of gallons of diesel that the
Administrator estimates will be sold or introduced into
commerce during the calendar year; and
``(II) the ratio that--
``(aa) 2,000,000,000 gallons of alternative diesel fuel;
bears to
``(bb) the number of gallons of diesel sold or introduced
into commerce during calendar year 2016.
``(3) Applicable percentages.--
``(A) Provision of estimate of volumes of diesel sales.--
Not later than October 31 of each of calendar years 2008
through 2016, the Administrator of the Energy Information
Administration shall provide to the Administrator an
estimate, with respect to the following calendar year, of the
volumes of diesel projected to be sold or introduced into
commerce in the United States.
``(B) Determination of applicable percentages.--
``(i) In general.--Not later than November 30 of each of
calendar years 2009 through 2016,
[[Page S131]]
based on the estimate provided under subparagraph (A), the
Administrator shall determine and publish in the Federal
Register, with respect to the following calendar year, the
alternative diesel fuel obligation that ensures that the
requirements of paragraph (2) are met.
``(ii) Required elements.--The alternative diesel fuel
obligation determined for a calendar year under clause (i)
shall--
``(I) be applicable to refineries, blenders, and importers,
as appropriate;
``(II) be expressed in terms of a volume percentage of
diesel sold or introduced into commerce in the United States;
and
``(III) subject to subparagraph (C), consist of a single
applicable percentage that applies to all categories of
persons described in subclause (I).
``(C) Adjustments.--In determining the applicable
percentage for a calendar year, the Administrator shall make
adjustments to prevent the imposition of redundant
obligations on any person described in subparagraph
(B)(ii)(I).
``(4) Credit program.--
``(A) In general.--The regulations promulgated pursuant to
paragraph (2)(A) shall provide for the generation of an
appropriate amount of credits by any person that refines,
blends, or imports diesel that contains a quantity of
alternative diesel fuel that is greater than the quantity
required under paragraph (2).
``(B) Use of credits.--A person that generates a credit
under subparagraph (A) may use the credit, or transfer all or
a portion of the credit to another person, for the purpose of
complying with regulations promulgated pursuant to paragraph
(2).
``(C) Duration of credits.--A credit generated under this
paragraph shall be valid during the 1-year period beginning
on the date on which the credit is generated.
``(D) Inability to generate or purchase sufficient
credits.--The regulations promulgated pursuant to paragraph
(2)(A) shall include provisions allowing any person that is
unable to generate or purchase sufficient credits under
subparagraph (A) to meet the requirements of paragraph (2) by
carrying forward a credit generated during a previous year on
the condition that the person, during the calendar year
following the year in which the alternative diesel fuel
deficit is created--
``(i) achieves compliance with the alternative diesel fuel
requirement under paragraph (2); and
``(ii) generates or purchases additional credits under
subparagraph (A) to offset the deficit of the previous year.
``(5) 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 receipt of a petition of 1 or more States by reducing the
national quantity of alternative diesel fuel for the diesel
motor pool required under paragraph (2) based on a
determination by the Administrator, after public notice and
opportunity for comment, that--
``(i) implementation of the requirement would severely harm
the economy or environment of a State, a region, or the
United States; or
``(ii) there is an inadequate domestic supply of
alternative diesel fuel.
``(B) Petitions for waivers.--Not later than 90 days after
the date on which the Administrator receives a petition under
subparagraph (A), the Administrator, in consultation with the
Secretary of Agriculture and the Secretary of Energy, shall
approve or disapprove the petition.
``(C) Termination of waivers.--
``(i) In general.--Except as provided in clause (ii), a
waiver under subparagraph (A) shall terminate on the date
that is 1 year after the date on which the waiver is
provided.
``(ii) Exception.--The Administrator, in consultation with
the Secretary of Agriculture and the Secretary of Energy, may
extend a waiver under subparagraph (A), as the Administrator
determines to be appropriate.''.
(c) Penalties and Enforcement.--Section 211(d) of the Clean
Air Act (42 U.S.C. 7545(d)) is amended--
(1) in paragraph (1), by striking ``or (o)'' each place it
appears and inserting ``(o), or (p)''; and
(2) in paragraph (2), by striking ``and (o)'' each place it
appears and inserting ``(o), and (p)''.
(d) Technical Amendments.--Section 211 of the Clean Air Act
(42 U.S.C. 7545) is amended--
(1) in subsection (i)(4), by striking ``section 324'' each
place it appears and inserting ``section 325'';
(2) in subsection (k)(10), by indenting subparagraphs (E)
and (F) appropriately;
(3) in subsection (n), by striking ``section 219(2)'' and
inserting ``section 216(2)'';
(4) by redesignating the second subsection (r) and
subsection (s) as subsections (s) and (t), respectively; and
(5) in subsection (t)(1) (as redesignated by paragraph
(4)), by striking ``this subtitle'' and inserting ``this
part''.
SEC. 7. EXCISE TAX CREDIT FOR PRODUCTION OF CELLULOSIC
BIOMASS ETHANOL.
(a) Allowance of Excise Tax Credit.--
(1) In general.--Section 6426 of the Internal Revenue Code
of 1986 (relating to credit for alcohol fuel, biodiesel, and
alternative fuel mixtures) is amended by redesignating
subsections (f) and (g) as subsections (g) and (h),
respectively, and by inserting after subsection (e) the
following new subsection:
``(f) Cellulosic Biomass Ethanol Credit.--
``(1) In general.--For purposes of this section, in the
case of a cellulosic biomass ethanol producer, the cellulosic
biomass ethanol credit is the product of--
``(A) the product of 51 cents times the equivalent number
of gallons of renewable fuel specified in section 211(o)(4)
of the Clean Air Act, times
``(B) the number of gallons of qualified cellulosic biomass
ethanol fuel production of such producer.
``(2) Definitions.--
``(A) Cellulosic biomass ethanol.--The term `cellulosic
biomass ethanol' has the meaning given such term under
section 211(o)(1)(A) of the Clean Air Act.
``(B) Qualified cellulosic biomass ethanol fuel
production.--The term `qualified cellulosic biomass ethanol
fuel production' means any alcohol which is cellulosic
biomass ethanol which during the taxable year--
``(i) is sold by the producer to another person --
``(I) for use by such other person in the production of an
alcohol fuel mixture in such other person's trade or business
(other than casual off-farm production),
``(II) for use by such other person as a fuel in a trade or
business, or
``(III) who sells such cellulosic biomass ethanol at retail
to another person and places such ethanol in the fuel tank of
such other person, or
``(ii) is used or sold by the producer for any purpose
described in clause (i).
``(3) Denial of double benefit.--No credit shall be allowed
under subsection (b) or (c) to any taxpayer with respect to
any fuel to the extent that a credit has been allowed with
respect to such fuel to any taxpayer under this subsection or
a payment has been made with respect to such fuel under
section 6427(e).
``(4) Termination.--This section shall not apply to any
sale or use for any period after December 31, 2008.''.
(2) Conforming amendments.--
(A) Section 6426(a) of such Code is amended--
(i) by striking ``subsection (d)'' in paragraph (2) and
inserting ``subsections (d) and (f)'', and
(ii) by striking ``and (e)'' in the last sentence and
inserting ``, (e), and (f)''.
(B) The heading for section 6426 of such Code is amended to
read as follows:
``SEC. 6426. CREDIT FOR CERTAIN FUELS AND FUEL MIXTURES.''.
(C) The table of section for subchapter B of chapter 65 of
such Code is amended by striking the item relating to section
6426 and inserting the following new item:
``Sec. 6426. Credit for certain fuels and fuel mixtures.''.
(b) Cellulosic Biomass Ethanol Not Used for a Taxable
Purpose.--
(1) In general.--Section 6427(e) of the Internal Revenue
Code of 1986 is amended by redesignating paragraphs (3)
through (5) as paragraphs (4) through (6), respectively, and
by inserting after paragraph (2) the following new paragraph:
``(3) Cellulosic biomass ethanol.--If any person sells or
uses cellulosic biomass ethanol (as defined in section
6426(f)(2)(A)) for a purpose described in section
6426(f)(2)(B) in such person's trade or business, the
Secretary shall pay (without interest) to such person an
amount equal to the cellulosic biomass ethanol credit with
respect to such fuel.''.
(2) Denial of double benefit.--Paragraph (4) of section
6427(e) of such Code, as redesignated by paragraph (1), is
amended to read as follows:
``(4) Coordination with other repayment provisions.--
``(A) In general.--No amount shall be payable under
paragraph (1), (2), or (3) with respect to any mixture,
alternative fuel, or cellulosic biomass ethanol with respect
to which an amount is allowed as a credit under section 6426.
``(B) Cellulosic biomass ethanol.--No amount shall be
payable under paragraph (1) or (2) with respect to any
cellulosic biomass ethanol if a payment has been made with
respect to such ethanol under paragraph (3).''.
(3) Termination.--Paragraph (6) of section 6427(e) of such
Code, as redesignated by paragraph (1), is amended by
striking ``and'' at the end of subparagraph (C), by striking
the period at the end of subparagraph (D) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(E) any cellulosic biomass ethanol credit (as defined in
section 6426(f)(2)(A)) sold or used after December 31,
2008.''.
(4) Conforming amendment.--Paragraph (5) of section 6427(e)
of such Code, as redesignated by paragraph (1), is amended by
striking ``or alternative fuel mixture credit'' and inserting
``, alternative fuel mixture credit, or cellulosic biomass
ethanol credit''.
(c) Effective Date.--The amendments made by this section
shall apply to fuel sold or used after the date of the
enactment of this Act.
SEC. 8. INCENTIVE FOR FEDERAL AND STATE FLEETS FOR MEDIUM AND
HEAVY DUTY HYBRIDS.
Section 301 of the Energy Policy Act of 1992 (42 U.S.C.
13211) is amended--
(1) in paragraph (3), by striking ``or a dual fueled
vehicle'' and inserting ``, a dual fueled vehicle, or a
medium or heavy duty vehicle that is a hybrid vehicle'';
[[Page S132]]
(2) by redesignating paragraphs (11), (12), (13), and (14)
as paragraphs (12), (14), (15), and (16), respectively;
(3) by inserting after paragraph (10) the following:
``(11) the term `hybrid vehicle' means a vehicle powered
both by a diesel or gasoline engine and an electric motor
that is recharged as the vehicle operates;''; and
(4) by inserting after paragraph (12) (as redesignated by
paragraph (2)) the following:
``(13) the term `medium or heavy duty vehicle' means a
vehicle that--
``(A) in the case of a medium duty vehicle, has a gross
vehicle weight rating of more than 8,500 pounds but not more
than 14,000 pounds; and
``(B) in the case of a heavy duty vehicle, has a gross
vehicle weight rating of more than 14,000 pounds;''.
SEC. 9. CREDIT FOR QUALIFYING ETHANOL BLENDING AND PROCESSING
EQUIPMENT.
(a) Allowance of Qualifying Ethanol Blending and Processing
Equipment Credit.--Section 46 of the Internal Revenue Code of
1986 (relating to amount of credit) is amended by striking
``and'' at the end of paragraph (3), by striking the period
at the end of paragraph (4) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(5) the qualifying ethanol blending and processing
equipment credit.''.
(b) Amount of Qualifying Ethanol Blending and Processing
Equipment Credit.--Subpart E of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
rules for computing investment credit) is amended by
inserting after section 48B the following new section:
``SEC. 48C. QUALIFYING ETHANOL BLENDING AND PROCESSING
EQUIPMENT.
``(a) In General.--For purposes of section 46, the
qualifying ethanol blending and processing equipment credit
for any taxable year is an amount equal to 50 percent of the
basis of the qualifying ethanol blending and processing
equipment placed in service at a qualifying facility during
such taxable year.
``(b) Limitation.--The credit allowed under subsection (a)
for qualifying ethanol blending and processing equipment
placed in service at any 1 qualifying facility during any
taxable year shall not exceed $2,000,000.
``(c) Qualifying Ethanol Blending and Processing
Equipment.--For purposes of this section, the term
`qualifying ethanol blending and processing equipment' means
any technology installed in or on a qualifying facility for
blending ethanol with petroleum fuels for the purpose of
direct retail sale, including in-line blending equipment,
storage tanks, pumps and piping for denaturants, and load-out
equipment.
``(d) Qualifying Facility.--For purposes of this section,
the term `qualifying facility' means any facility which
produces not less than 1,000,000 gallons of ethanol during
the taxable year.
``(e) Special Rule for Certain Subsidized Property.--Rules
similar to section 48(a)(4) shall apply for purposes of this
section.
``(f) Certain Qualified Progress Expenditures Rules Made
Applicable.--Rules similar to the rules of subsections (c)(4)
and (d) of section 46 (as in effect on the day before the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of this subsection.
``(g) Termination.--This section shall not apply to
property placed in service after December 31, 2014.''.
(c) Recapture of Credit Where Emissions Reduction Offset Is
Sold.--Paragraph (1) of section 50(a) of the Internal Revenue
Code of 1986 is amended by redesignating subparagraph (B) as
subparagraph (C) and by inserting after subparagraph (A) the
following new subparagraph:
``(B) Special rule for qualifying ethanol blending and
processing equipment.--For purposes of subparagraph (A), any
investment property which is qualifying ethanol blending and
processing equipment (as defined in section 48C(c)) shall
cease to be investment credit property with respect to a
taxpayer if such taxpayer receives a payment in exchange for
a credit for emission reductions attributable to such
qualifying pollution control equipment for purposes of an
offset requirement under part D of title I of the Clean Air
Act.''.
(d) Special Rule for Basis Reduction; Recapture of
Credit.--Paragraph (3) of section 50(c) of the Internal
Revenue Code of 1986 (relating to basis adjustment to
investment credit property) is amended by inserting ``or
qualifying ethanol blending and processing equipment credit''
after ``energy credit''.
(e) Certain Nonrecourse Financing Excluded From Credit
Base.--Section 49(a)(1)(C) of the Internal Revenue Code of
1986 (defining credit base) is amended by striking ``and'' at
the end of clause (iii), by striking the period at the end of
clause (iv) and inserting ``, and'', and by adding at the end
the following new clause:
``(v) the basis of any property which is part of any
qualifying ethanol blending and processing equipment under
section 48C.''.
(f) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2007, in taxable years ending after such date, under rules
similar to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).
SEC. 10. PUBLIC ACCESS TO FEDERAL ALTERNATIVE REFUELING
STATIONS.
(a) Definitions.--In this section:
(1) Alternative fuel refueling station.--The term
``alternative fuel refueling station'' has the meaning given
the term ``qualified alternative fuel vehicle refueling
property'' in section 30C(c)(1) of the Internal Revenue Code
of 1986.
(2) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(b) Access to Federal Alternative Refueling Stations.--Not
later than 18 months after the date of enactment of this
Act--
(1) except as provided in subsection (d)(1), any Federal
property that includes at least 1 fuel refueling station
shall include at least 1 alternative fuel refueling station;
and
(2) except as provided in subsection (d)(2), any
alternative fuel refueling station located on property owned
by the Federal government shall permit full public access for
the purpose of refueling using alternative fuel.
(c) Duration.--The requirements described in subsection (b)
shall remain in effect until the sooner of--
(1) the date that is 7 years after the date of enactment of
this Act; or
(2) the date on which the Secretary determines that not
less than 5 percent of the commercial refueling
infrastructure in the United States offers alternative fuels
to the general public.
(d) Exceptions.--
(1) Waiver.--Subsection (b)(1) shall not apply to any
Federal property under the jurisdiction of a Federal agency
if the Secretary determines that alternative fuel is not
reasonably available to retail purchasers of the fuel, as
certified by the head of the agency to the Secretary.
(2) National security exemption.--Subsection (b)(2) does
not apply to property of the Federal government that the
Secretary, in consultation with the Secretary of Defense, has
certified must be exempt for national security reasons.
(e) Report.--Not later than October 31 of each year
beginning after the date of enactment of this Act, the
President shall submit to Congress a report that describes
the progress of the agencies of the Federal Government
(including the Executive Office of the President) in
complying with--
(1) the Energy Policy Act of 1992 (42 U.S.C. 13201 et
seq.);
(2) Executive Order 13149 (65 Fed. Reg. 24595; relating to
greening the government through Federal fleet and
transportation efficiency); and
(3) the fueling center requirements of this section.
SEC. 11. PURCHASE OF CLEAN FUEL BUSES.
(a) In General.--Chapter 53 of title 49, United States
Code, is amended by inserting after section 5325 the
following:
``Sec. 5326. Purchase of clean fuel buses
``(a) Definitions.--In this section:
``(1) Alternative diesel fuel.--
``(A) In general.--The term `alternative diesel fuel'
means--
``(i) biodiesel (as defined in section 312(f) of the Energy
Policy Act of 1992 (42 U.S.C. 13220(f))); and
``(ii) any blending components derived from alternative
fuel.
``(B) Inclusions.--The term `alternative diesel fuel'
includes a diesel fuel substitute produced from--
``(i) animal fat;
``(ii) plant oil;
``(iii) recycled yellow grease;
``(iv) single-cell or microbial oil;
``(v) thermal depolymerization;
``(vi) thermochemical conversion;
``(vii) a coal-to-liquid process (including the Fischer-
Tropsch process) that provides for the sequestration of
carbon emissions; or
``(viii) a diesel-ethanol blend of not less than 7 percent
ethanol.
``(2) 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--
``(A) dedicated energy crops and trees;
``(B) wood and wood residues;
``(C) plants;
``(D) grasses;
``(E) agricultural residues;
``(F) fibers;
``(G) animal wastes and other waste materials; and
``(H) municipal solid waste.
``(3) Clean fuel bus.--The term `clean fuel bus' means a
vehicle that--
``(A) is capable of being powered by--
``(i) compressed natural gas;
``(ii) liquefied natural gas;
``(iii) 1 or more batteries;
``(iv) a fuel that is composed of at least 85 percent
ethanol (or another percentage of not less than 70 percent,
as the Secretary may determine, by rule, to provide for
requirements relating to cold start, safety, or vehicle
functions);
``(v) electricity (including a hybrid electric or plug-in
hybrid electric vehicle);
``(vi) a fuel cell;
``(vii) a fuel that is composed of at least 22 percent
biodiesel (as defined in section 312(f) of the Energy Policy
Act of 1992 (42 U.S.C. 13220(f)) (or another percentage of
not less than 10 percent, as the Secretary may determine, by
rule, to provide for requirements relating to cold start,
safety, or vehicle functions);
``(viii) ultra-low sulfur diesel; or
``(ix) liquid fuel manufactured with a coal feedstock; and
``(B) has been certified by the Administrator of the
Environmental Protection
[[Page S133]]
Agency to significantly reduce harmful emissions,
particularly in a nonattainment area (as defined in section
171 of the Clean Air Act (42 U.S.C. 7501)).
``(4) Qualified alternative fuel producer.--The term
`qualified alternative fuel producer' means a producer of
qualified fuels that, during the applicable taxable year--
``(A) are sold by the producer to another person--
``(i) for use by the person in the production of a mixture
of qualified fuels in the trade or business of the person
(other than casual off-farm production);
``(ii) for use by the other person as a fuel in a trade or
business; or
``(iii) that--
``(I) sells to another person the qualified fuel at retail;
and
``(II) places the qualified fuel in the fuel tank of the
person that purchased the qualified fuel; or
``(B) are used or sold by the producer for any purpose
described in subparagraph (A).
``(5) Qualified fuel.--The term `qualified fuel' includes--
``(A) cellulosic biomass ethanol;
``(B) ethanol produced in facilities in which animal waste
or other waste materials are digested or otherwise used to
displace at least 90 percent of the fossil fuels that would
otherwise be used in the production of ethanol;
``(C) renewable fuels;
``(D) alternative diesel fuels;
``(E) sugar, starch, or cellulosic biomass; and
``(F) any other fuel that is not substantially petroleum.
``(6) Renewable fuel.--The term `renewable fuel' means
fuel, at least 85 percent of the volume of which--
``(A)(i) is produced from grain, starch, oilseeds,
vegetable, animal, or fish materials including fats, greases,
and oils, sugarcane, sugar beets, sugar components, tobacco,
potatoes, or other biomass; or
``(ii) is natural gas produced from a biogas source,
including a landfill, sewage waste treatment plant, feedlot,
or other place in which decaying organic material is found;
and
``(B) is used to substantially replace or reduce the
quantity of fossil fuel present in a fuel mixture used to
operate a motor vehicle.
``(b) Purchase of Buses.--Subject to subsections (c) and
(d), beginning on the date that is 2 years after the date of
enactment of this section, a bus purchased using funds made
available from the Mass Transit Account of the Highway Trust
Fund shall be a clean fuel bus.
``(c) Ultra-Low Sulfur Diesel.--
``(1) In general.--Except as provided in paragraph (2), not
more than 20 percent of the amount of the funds provided to a
recipient to purchase buses under this section may be used by
the recipient to purchase clean fuel buses that are capable
of being powered by a fuel described in clause (iv), (vii),
(viii), or (ix) of subsection (a)(3)(A).
``(2) Exception.--Paragraph (1) shall not apply if the
recipient enters into a 3-year purchase agreement with a
qualified alternative fuel producer to acquire qualified
fuels in a volume sufficient to power the clean fuel buses
purchased using amounts made available under this section.
``(d) Use of Certain Alternative Fuels.--
``(1) In general.--To be eligible to receive funds under
subsection (c)(2) for the purchase of a clean fuel bus that
is capable of being powered by a fuel described in clause
(iv), (vii), or (ix) of subsection (a)(3)(A), an applicant or
recipient shall submit to the Secretary--
``(A) a certification that the applicant will operate the
clean fuel bus only with the fuel at all times in accordance
with the fuel capacity and use of the fuel recommended by the
manufacturer of the clean fuel bus; and
``(B) not later than 180 days after the purchase of the
clean fuel bus and every 180 days thereafter, a report that
documents that the fuel was used in accordance with
subparagraph (A) during the 180-day period ending on the date
of the report.
``(2) Noncompliance.--Failure of an applicant or recipient
of funds to provide the certification or documentation
required under paragraph (1) shall--
``(A) be considered a violation of the agreement to receive
the funds; and
``(B) require the applicant or recipient to reimburse the
Secretary the full amount of the funds not later than 90 days
after the Secretary has determined that a violation has
occurred.''.
(b) Conforming Amendment.--The analysis for chapter 53 is
amended by inserting after the item relating to section 5325
the following:
``5326. Clean fuel buses''.
SEC. 12. DOMESTIC FUEL PRODUCTION VOLUMES TO MEET DEPARTMENT
OF DEFENSE NEEDS.
Section 2922d of title 10, United States Code is amended--
(1) in the heading, by striking ``and tar sands'' and
inserting ``tar sands, and other sources'';
(2) in subsection (a), by striking ``fuel produced, in
whole or in part, from coal, oil shale, and tar sands
(referred to in this section as a `covered fuel') that are
extracted by either mining or in-situ methods and refined or
otherwise processed in the United States'' and inserting
``fuel produced, in whole or in part, from coal, oil shale,
and tar sands that are extracted by either mining or in-situ
methods and refined or otherwise processed in the United
States and fuel produced in the United States using starch,
sugar, cellulosic biomass, plant or animal oils, or thermal
chemical conversion, thermal depolymerization, or thermal
conversion processes (referred to in this section as a
`covered fuel')'';
(3) in subsection (d), by striking ``1 or more years'' and
inserting ``up to 5 years'';
(4) in subsection (e), by striking the period at the end
and inserting the following: ``, with consideration given to
military installations closed or realigned under a round of
defense base closure and realignment.''; and
(5) by adding at the end the following new subsection:
``(f) Production Facilities for Covered Fuels.--The
Secretary of Defense may enter into contracts or other
agreements with private companies or other entities to
develop and operate production facilities for covered fuels,
and may provide for the construction or capital modification
of production facilities for covered fuels.''.
SEC. 13. FEDERAL FLEET ENERGY CONSERVATION IMPROVEMENT.
(a) Definitions.--Section 301 of the Energy Policy Act of
1992 (42 U.S.C. 13211) is amended--
(1) in paragraph (3), by inserting before the semicolon at
the end the following: ``, including a vehicle that is
propelled by electric drive transportation technology, engine
dominant hybrid electric technology, or plug-in hybrid
technology'';
(2) in paragraph (13), by striking ``and'' after the
semicolon at the end;
(3) in paragraph (14), by striking the period at the end
and inserting a semicolon; and
(4) by adding at the end the following:
``(15) the term `electric drive transportation technology'
means--
``(A) technology that uses an electric motor for all or
part of the motive power of a vehicle (regardless of whether
off-board electricity is used), including--
``(i) a battery electric vehicle;
``(ii) a fuel cell vehicle;
``(iii) an engine dominant hybrid electric vehicle;
``(iv) a plug-in hybrid electric vehicle;
``(v) a plug-in hybrid fuel cell vehicle; and
``(vi) an electric rail vehicle; or
``(B) technology that uses equipment for transportation
(including transportation involving any mobile source of air
pollution) that uses an electric motor to replace an internal
combustion engine for all or part of the work of the
equipment, including corded electric equipment that is linked
to transportation or a mobile source of air pollution;
``(16) the term `engine dominant hybrid electric vehicle'
means an on-road or nonroad vehicle that--
``(A) is propelled by an internal combustion engine or heat
engine using--
``(i) any combustible fuel; and
``(ii) an on-board, rechargeable storage device; and
``(B) has no means of using an off-board source of
electricity; and
``(17) the term `plug-in hybrid electric vehicle' means an
on-road or nonroad vehicle that is propelled by an internal
combustion engine or heat engine using--
``(A) any combustible fuel;
``(B) an on-board, rechargeable storage device; and
``(C) a means of using an off-board source of
electricity.''.
(b) Minimum Federal Fleet Requirement.--Section 303(b)(1)
of the Energy Policy Act of 1992 (42 U.S.C. 13212(b)(1)) is
amended--
(1) in subparagraph (C), by striking ``and'' after the
semicolon;
(2) in subparagraph (D), by striking ``fiscal year 1999 and
thereafter,'' and inserting ``each of fiscal years 1999
through 2013; and''; and
(3) by inserting after subparagraph (D) the following:
``(E) 100 percent in fiscal year 2014 and thereafter,''.
______