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HR 4306 IH

To amend the Clean Air Act and the Internal Revenue Code of 1986 to increase the use of ethanol and bio-diesel, and for other purposes.

December 6, 2007

Mr. KING of Iowa (for himself and Mr. LATHAM) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To amend the Clean Air Act and the Internal Revenue Code of 1986 to increase the use of ethanol and bio-diesel, and for other purposes.

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

TITLE I--USE OF ETHANOL AND BIO-DIESEL

SEC. 101. DEFINITIONS.

Section 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1)) is amended to read as follows:

`(1) DEFINITIONS- In this section:

`(A) RENEWABLE FUEL- The term `renewable fuel' means ethanol produced from renewable biomass.

`(B) BIO-DIESEL- The term `bio-diesel' means bio-diesel as defined in section 312(f) of the Energy Policy Act of 1992 (42 U.S.C. 13220(f)), but only if such fuel contains methyl or ethyl esters.

`(C) RENEWABLE BIOMASS- The term `renewable biomass' means each of the following:

`(i) Planted crops and crop residue harvested--

`(I) from agricultural land cleared or cultivated at any time prior to the enactment of this sentence that is either actively managed or fallow and nonforested; and

`(II) in compliance with a conservation plan that meets the standards, guidelines and restrictions provided for by Subtitles B and C of title XII of the Food Security Act of 1985.

`(ii) Planted trees and tree residue from actively managed tree plantations on non-federal land cleared at any time prior to enactment of this sentence.

`(iii) Animal waste material and animal byproducts.

`(iv) Slash and pre-commercial thinnings from Federal and non-federal forestlands other than ecological communities with a global or state ranking of critically imperiled, imperiled, or rare pursuant to a State Natural Heritage Program, old growth forest, or late successional forest.

`(v) Biomass obtained from the immediate vicinity of buildings and other areas regularly occupied by people, or of public infrastructure, at risk from wildfire.

`(vi) Algae.

`(vii) Separated food waste or yard waste.

`(D) 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.'.

SEC. 102. ETHANOL AND BIO-DIESEL STANDARDS.

(a) Renewable Fuel Program- Paragraph (2) of section 211(o) (42 U.S.C. 7545(o)(2)) of the Clean Air Act is amended as follows:

(1) REGULATIONS- Clause (i) of subparagraph (A) is amended to read as follows: `Not later than 1 year after the date of enactment of this sentence, the Administrator shall promulgate regulations under this paragraph to ensure that fuel sold or introduced into commerce in the United States (except in noncontiguous States or territories) for use in motor vehicles, on an annual average basis, contains at least the applicable volume of renewable fuel and bio-diesel, determined in accordance with subparagraph (B).'

(2) APPLICABLE VOLUMES- Subparagraph (B) is amended by striking out clause (iv) and by amending so much of subparagraph (B) as precedes clause (iii) to read as follows:

`(B) APPLICABLE VOLUMES-

`(i) CALENDAR YEARS AFTER 2005-

`(I) RENEWABLE FUEL- For the purpose of subparagraph (A), the applicable volume of renewable fuel for the calendar years 2006 through 2022 shall be determined in accordance with the following table:

2006

--4.0

2007

--4.7

2008

--9.5

2009

--11

2010

--12.0

2011

--12.6

2012

--13.2

2013

--13.8

2014

--14.4

2015

--15.0

2016

--18.0

2017

--21.0

2018

--24.0

2019

--27.0

2020

--30.0

2021

--33.0

2022

--36.0

`(II) BIOMASS-BASED DIESEL- For the purpose of subparagraph (A), the applicable volume of bio-diesel for the calendar years 2008 through 2012 shall be determined in accordance with the following table:

2008

--450

2009

--650

2010

--875

2011

--1,125

2012

--1,300

`(ii) OTHER CALENDAR YEARS- For the purposes of subparagraph (A), the applicable volumes of each fuel specified in the tables in clause (i) for calendar years after the calendar years specified in the tables shall be determined by the Administrator, in coordination with the Secretary of Energy and the Secretary of Agriculture, with a review of the implementation of the program during calendar years specified in the tables, and an analysis of--

`(I) the impact of the production and use of renewable fuels on the environment, air quality, biomass-based diesel, job creation, and rural economic development; and

`(II) the expected annual rate of future production of renewable fuels and biomass-based diesel);'.

(b) Applicable Percentages- Paragraph (3) of section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)(3)) is amended as follows:

(1) In subparagraph (A), strike `2011' and insert `2022'.

(2) In subparagraph (A), strike `gasoline' and insert `fuel for motor vehicles'.

(3) In subparagraph (B), strike `2012' and insert `2023' and insert `distributors' after `refineries' in clause (ii)(I).

(4) In subparagraph (B), strike `gasoline' and insert `fuel for motor vehicles' in clause (ii)(II).

SEC. 103. EFFECTIVE DATE.

This title takes effect January 1, 2008.

TITLE II--AVAILABILITY OF ETHANOL BLENDS AND BIO-DIESEL

SEC. 201. ETHANOL-BLEND FUEL INFRASTRUCTURE.

Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is amended by adding at the end the following:

`(11) INSTALLATION OF ETHANOL-BLEND AND BIO-DIESEL FUEL PUMPS BY COVERED OWNERS AT STATIONS-

`(A) DEFINITIONS- In this paragraph:

`(i) COVERED OWNER- The term `covered owner' means any person that, individually or together with any other person with respect to which the person has an affiliate relationship or significant ownership interest, owns 1 or more retail station outlets, as determined by the Secretary.

`(ii) ETHANOL-BLEND FUEL- The term `ethanol-blend fuel' means a blend of gasoline at least 30 percent of the content of which is derived from renewable fuel.

`(iii) BIO-DIESEL BLEND FUEL- The term `bio-diesel blend fuel' means a blend of diesel at least 5 percent of the content of which is derived from bio-diesel.

`(iv) SECRETARY- The term `Secretary' means the Secretary of Energy, acting in consultation with the Administrator and the Secretary of Agriculture.

`(B) REGULATIONS- The Secretary shall promulgate regulations to ensure that by 2009 each covered owner installs or otherwise makes available 1 or more pumps that dispense ethanol-blend fuel and one or more pumps that dispense bio-diesel blend fuel (including any other equipment necessary, such as tanks, to ensure that the pumps function properly) at retail station outlets of the covered owner.

`(C) FINANCIAL RESPONSIBILITY- In promulgating regulations under subparagraph (C), the Secretary shall ensure that each covered owner described in that subparagraph assumes full financial responsibility for the costs of installing or otherwise making available the pumps described in that subparagraph and any other equipment necessary (including tanks) to ensure that the pumps function properly.'.

SEC. 202. 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 ETHANOL BLEND AND BIO-DIESEL FUEL PUMPS.

`(a) Definition- In this section:

`(1) ALTERNATIVE FUEL- The term `alternative blend fuel' means any fuel--

`(A) at least 30 percent of the volume of which consists of ethanol; or

`(B) any mixture of bio-diesel (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 5 percent bio-diesel.

`(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 blend fuel pump;

`(B) converting an existing tank and pump on the marketing premises of the franchisee for alternative blend fuel use;

`(C) advertising (including through the use of signage or logos) the sale of any alternative blend fuel; or

`(D) selling alternative blend 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 blend 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 ethanol blend and bio-diesel 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 ethanol blend or bio-diesel blend fuel pumps (within the meaning of section 107 of the Petroleum Marketing Practices Act (15 U.S.C. 2801 et seq.)) shall be considered an unlawful restriction.'; and

(3) in subsection (d) (as redesignated by paragraph (1))--

(A) by striking `(d) As used in this section,' and inserting the following: `section--

`(1) the term';

(B) by striking the period at the end and inserting `; and'; and

(C) by adding at the end the following:

`(2) the term `gasohol' includes any blend of ethanol and gasoline.'.

(c) Effective Date- The amendments made by this section shall take effect on January 1, 2009.

SEC. 203. CERTIFICATION OF ETHANOL AND BIO-DIESEL BLEND FUELS.

The Administrator of the Environmental Protection Agency shall, as promptly as practicable but not later than January 1, 2009, promulgate such regulations and take such other actions as may be necessary under section 211of the Clean Air Act to provide for the certification of motor vehicle fuels containing at least 30 percent ethanol and motor vehicle fuels containing at least 5 percent bio-diesel, notwithstanding section 221(f) or (h) of such Act or any other provision of law.

TITLE III--TAX PROVISIONS

SEC. 301. EXTENSION OF CREDIT FOR ALCOHOL USED AS FUEL.

(a) In General-

(1) CREDIT AGAINST INCOME TAX-

(A) TERMINATION GENERALLY- Paragraph (1) of section 40(e) of the Internal Revenue Code of 1986 (relating to termination) is amended--

(i) by striking `December 31, 2010' in subparagraph (A) and inserting `December 31, 2012', and

(ii) by striking `January 1, 2011' in subparagraph (B) and inserting `January 1, 2013'.

(B) REDUCED RATE FOR ETHANOL BLENDERS- Subsection (h) of section 40 of such Code (relating to reduced credit for ethanol blenders) is amended--

(i) by striking `2010' in paragraph (1) and inserting `2012', and

(ii) by striking `2010' in the table in paragraph (2) and inserting `2012'.

(2) CREDIT AGAINST EXCISE TAX- Paragraph (5) of section 6426(b) of such Code (relating to termination) is amended by striking `December 31, 2010' and inserting `December 31, 2012'.

(3) PAYMENTS FOR FUEL USED IN TRADE OR BUSINESS- Subparagraph (A) of section 6427(e)(5) of such Code (relating to termination) is amended by striking `December 31, 2010' and inserting `December 31, 2012'.

(b) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act.

SEC. 302. EXTENSION OF BIO-DIESEL AND RENEWABLE DIESEL CREDIT.

(a) In General-

(1) CREDIT AGAINST INCOME TAX- Subsection (g) of section 40A of the Internal Revenue Code of 1986 (relating to termination) is amended by striking `December 31, 2008' and inserting `December 31, 2012'.

(2) CREDIT AGAINST EXCISE TAX- Paragraph (6) of section 6426(c) of such Code is amended by striking `December 31, 2010' and inserting `December 31, 2012'.

(3) PAYMENTS FOR FUEL USED IN TRADE OR BUSINESS- Subparagraph (B) of section 6427(e)(5) of such Code is amended by striking `December 31, 2008' and inserting `December 31, 2012'.

(b) Effective Date- The amendment made by this section shall take effect on the date of the enactment of this Act.