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.

SA 779. Mr. DOMENICI (for himself, Mr. Thune, Mr. Harkin, Mr. Lugar,
Mr. Dorgan, Mr. Frist, Mr. Obama, Mr. Grassley, Mr. Bayh, Mr. Bond, Mr.
Nelson of Nebraska, Mr. Brownback, Mr. Johnson, Mr. Hagel, Mr. Conrad,
Mr. DeWine, Mr. Dayton, Mr. Talent, Ms. Stabenow, Mr. Coleman, Mr.
Salazar, and Mr. Durbin) proposed an amendment to the bill H.R. 6,
Reserved; as follows:

Beginning on page 135, strike line 10 and all that follows
through page 159, line 23, and insert the following:

Subtitle B--Reliable Fuels

SEC. 205. 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,
sugarcane, sugar beets, sugar components, tobacco, potatoes,
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
noncontiguous States or territories), on an annual average
basis, contains the applicable volume of renewable fuel
determined in accordance with subparagraph (B).
``(ii) Noncontiguous state opt-in.--

``(I) In general.--On the petition of a noncontiguous State
or territory, the Administrator may allow the renewable fuel
program established under this subsection to apply in the
noncontiguous State or territory at the same time or any time
after the Administrator promulgates regulations under this
subparagraph.
``(II) Other actions.--In carrying out this clause, the
Administrator may--

``(aa) issue or revise regulations under this paragraph;
``(bb) establish applicable percentages under paragraph
(3);
``(cc) provide for the generation of credits under
paragraph (5); and
``(dd) take such other actions as are necessary to allow
for the application of the renewable fuels program in a
noncontiguous State or territory.
``(iii) 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 renewable fuel
may be used; or
``(bb) impose any per-gallon obligation for the use of
renewable fuel.
``(iv) 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 3.2 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:

Applicable volume of renewable fuel
``Calendar year:                              (in billions of gallons):
2006..........................................................4.0....

2007..........................................................4.7....

2008..........................................................5.4....

2009..........................................................6.1....

2010..........................................................6.8....

2011..........................................................7.4....

2012.........................................................8.0.....

``(ii) Calendar year 2013 and thereafter.--Subject to
clauses (iii) and (iv), for the purposes of subparagraph (A),
the applicable volume for calendar year 2013 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 2006
through 2012, including a review of--

``(I) the impact of the use of renewable fuels on the
environment, air quality, energy security, job creation, and
rural economic development; and
``(II) the expected annual rate of future production of
renewable fuels, including cellulosic ethanol.

``(iii) Minimum quantity derived from cellulosic biomass.--
For calendar year 2013 and each calendar year thereafter--

``(I) the applicable volume referred to in clause (ii)
shall contain a minimum of 250,000,000 gallons that are
derived from cellulosic biomass; and
``(II) the 2.5-to-1 ratio referred to in paragraph (4)
shall not apply.

``(iv) Minimum applicable volume.--For the purpose of
subparagraph (A), the applicable volume for calendar year
2013 and each calendar year thereafter shall be not less than
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

[[Page S6581]]

``(II) the ratio that--

``(aa) 8,000,000,000 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, with respect to
the following calendar year, of the volumes of gasoline
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 2005 through 2012, 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 sold or introduced into commerce in the United
States; 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 2.5 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 for the calendar
year in which the credit was generated.
``(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).
``(F) State exemption from seasonality requirements.--
Notwithstanding any other provision of law, the seasonality
requirement relating to renewable fuel use established by
this paragraph shall not apply to any State that has received
a waiver under section 209(b).
``(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.
``(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

[[Page S6582]]

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. 206. 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)  Cellulosic Biomass Ethanol And Municipal Solid Waste
Loan Guarantee Program.--
``(1) In general.--Funds may be provided 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 commercial demonstration
projects for celluosic biomass and sucrose-derived ethanol.
``(2) Demonstration projects.--
``(A) In general.--The Secretary shall issue loan
guarantees under this section to carry out not more than 4
projects to commercially demonstrate the feasibility and
viability of producing cellulosic biomass ethanol or sucrose-
derived ethanol, including at least 1 project that uses
cereal straw as a feedstock and 1 project that uses municipal
solid waste as a feedstock.
``(B) Design capacity.--Each project shall have a design
capacity to produce at least 30,000,000 gallons of cellulosic
biomass 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.

[[Page S6583]]

``(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 Mississippi State
University and the Oklahoma State University, $4,000,000 for
each of fiscal years 2005 through 2007.
``(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. 207. 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.''.

Subtitle C--Federal Reformulated Fuels

SEC. 209. SHORT TITLE.

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

SEC. 210. 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--
``(A) $50,000,000 for fiscal year 2005; and
``(B) $30,000,000 for fiscal years 2006 through 2010.''.
(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. 211. 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;

[[Page S6584]]

(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. 212. 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 2001 and 2002 (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 2001 and 2002.
``(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 2001 and 2002; 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

[[Page S6585]]

reduction of the average annual aggregate emissions of toxic
air pollutants in the PADD in calendar years 2001 and 2002,
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 2001 and 2002;
(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 2001 and 2002; 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 211(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 2001 and 2002 in the
average annual aggregate emissions of toxic air pollutants
from reformulated gasoline produced or distributed by the
refiner or importer.

SEC. 213. 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. 214. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

Section 211 of the Clean Air Act (42 U.S.C. 7545) (as
amended by section 205(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 section,
not later than 4 years after the date of enactment of this
paragraph, the Administrator shall develop and finalize an
emissions model that reflects, to the maximum extent
practicable, the effects of gasoline characteristics or
components on emissions from vehicles in the motor vehicle
fleet during calendar year 2007.
``(3) Permeation effects study.--
``(A) In general.--Not later than 1 year after the date of
enactment of this paragraph, the Administrator shall conduct
a study, and report to Congress the results of the study, on
the effects of ethanol content in gasoline on permeation, the
process by which fuel molecules migrate through the
elastomeric materials (rubber and plastic parts) that make up
the fuel and fuel vapor systems of a motor vehicle.
``(B) Evaporative emissions.--The study shall include
estimates of the increase in total evaporative emissions
likely to result from the use of gasoline with ethanol
content in a motor vehicle, and the fleet of motor vehicles,
due to permeation.''.

SEC. 215. 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)

[[Page S6586]]

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. 216. 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. 217. 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.

SEC. 218. ADVANCED BIOFUEL TECHNOLOGIES PROGRAM.

(a) In General.--Subject to the availability of
appropriations under subsection (d), the Administrator of the
Environmental Protection Agency shall, in consultation with
the Secretary of Agriculture and the Biomass Research and
Development Technical Advisory Committee established under
section 306 of the Biomass Research and Development Act of
2000 (Public Law 106-224; 7 U.S.C. 8101 note), establish a
program, to be known as the ``Advanced Biofuel Technologies
Program'', to demonstrate advanced technologies for the
production of alternative transportation fuels.
(b) Priority.--In carrying out the program under subsection
(a), the Administrator shall give priority to projects that
enhance the geographical diversity of alternative fuels
production and utilize feedstocks that represent 10 percent
or less of ethanol or biodiesel fuel production in the United
States during the previous fiscal year.
(c) Demonstration Projects.--
(1) In general.--As part of the program under subsection
(a), the Administrator shall fund demonstration projects--
(A) to develop not less than 4 different conversion
technologies for producing cellulosic biomass ethanol; and
(B) to develop not less than 5 technologies for coproducing
value-added bioproducts (such as fertilizers, herbicides, and
pesticides) resulting from the production of biodiesel fuel.
(2) Administration.--Demonstration projects under this
subsection shall be--
(A) conducted based on a merit-reviewed, competitive
process; and
(B) subject to the cost-sharing requirements of section
1002.
(d) Authorization of appropriations.--There are authorized
to be appropriated to carry out this section $110,000,000 for
each of fiscal years 2005 through 2009.

SEC. 219. SUGAR CANE ETHANOL PROGRAM.

(a) Definition of Program.--In this section, the term
``program'' means the Sugar Cane Ethanol Program established
by subsection (b).
(b) Establishment.--There is established within the
Environmental Protection Agency a program to be known as the
``Sugar Cane Ethanol Program''.
(c) Project.--
(1) In general.--Subject to the availability of
appropriations under subsection (d), in carrying out the
program, the Administrator of the Environmental Protection
Agency shall establish a project that is--
(A) carried out in multiple States--
(i) in each of which is produced cane sugar that is
eligible for loans under section 156 of the Federal
Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
7272), or a similar subsequent authority; and
(ii) at the option of each such State, that have an
incentive program that requires the use of ethanol in the
State; and
(B) designed to study the production of ethanol from cane
sugar, sugarcane, and sugarcane byproducts.
(2) Requirements.--A project described in paragraph (1)
shall--
(A) be limited to the production of ethanol in the States
of Florida, Louisiana, Texas, and Hawaii in a way similar to
the existing program for the processing of corn for ethanol
to demonstrate that the process may be applicable to cane
sugar, sugarcane, and sugarcane byproducts;
(B) include information on the ways in which the scale of
production may be replicated once the sugar cane industry has
located sites for, and constructed, ethanol production
facilities; and
(C) not last more than 3 years.
(d) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $36,000,000, to
remain available until expended.
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