S.Amdt. 4696

SA 4696. Mr. BUNNING submitted, under authority of the order of the Senate of May 2, 2008, an amendment intended to be proposed to amendment SA 4585 proposed by Mr. Rockefeller (for himself, Mr. Inouye, Mr. Baucus, and Mr. Grassley) to the bill H.R. 2881, to amend title 49, United States Code, to authorize appropriations for the Federal Aviation Administration for fiscal years 2008 through 2011, to improve aviation safety and capacity, to provide stable funding for the national aviation system, and for other purposes; which was ordered to lie on the table; as follows:

Strike section 603 and insert the following:

SEC. 603. AVIATION FUEL PRODUCED FROM CLEAN COAL AND ALTERNATIVE AND UNCONVENTIONAL DOMESTIC FEEDSTOCKS FOR CIVILIAN AND MILITARY AIRCRAFT.

(a) Establishment of Alternative Jet Fuel Program.--From amounts made available under section 48102(a) of title 49, United States Code, the Secretary of Transportation, in consultation with the Secretary of the Air Force, shall establish a program related to developing jet fuel produced from clean coal and from alternative and unconventional domestic feedstocks. The program shall include participation by educational and research institutions that have existing facilities and experience in the development and deployment of technology that process coal and alternative and unconventional domestic feedstocks into aviation fuel.

(b) Program Requirements.--Any alternative jet fuel program established by a Federal agency, including the program established under subsection (a) and the Department of the Air Force alternative jet fuel program, may include grants, reimbursable agreements, long-term contracts, and other instruments authorized under section 106(l)(6) of title 49, United States Code. Such program may include long-term contracts or agreements for the acquisition of alternative jet fuel, but only if such contracts or agreements are--

(1) for a term of not more than 25 years;

(2) at a price that is competitive, throughout the term of the contract or agreement, with the market price of petroleum-derived aviation fuel of similar quality; and

(3) for a fuel that has lower lifecycle greenhouse gas emissions as compared to the lifecycle greenhouse gas emissions of the petroleum-based aviation fuel that was displaced.

(c) Clarification.--In the case of a Federal agency agreement for alternative jet fuel, the lifecycle greenhouse gas emissions associated with the production and combustion of the fuel supplied under the contract shall be considered to be less than such emissions from the equivalent conventional fuel produced from conventional petroleum sources if such emissions are determined to be lower--

(1) by peer-reviewed research conducted or reviewed by a National Laboratory; or

(2) by the head of the Federal agency, based on available research and testing.

(d) Designation of Institution as a Center of Excellence.--Not later than 180 days after the date of enactment of this Act, the Administrator of the Federal Aviation Administration shall designate an institution described in subsection (a) as a Center for Excellence for Coal-to-Jet-Fuel Research.

(e) Tax Credit for Alternative and Unconventional Aviation Fuel Mixture.--

(1) In general.--Section 6426 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

“(i) Alternative and Unconventional Aviation Fuel Mixture.--

“(1) In general.--For purposes of this section, the alternative and unconventional aviation fuel mixture credit is the product of 50 cents and the number of gallons of alternative and unconventional aviation fuel used by the taxpayer in producing any alternative and unconventional aviation fuel mixture for sale or use in a trade or business of the taxpayer.

“(2) Alternative and unconventional aviation fuel mixture.--For purposes of this subsection, the term ‘alternative and unconventional aviation fuel mixture' means a mixture of alternative and unconventional aviation fuel and aviation-grade kerosene which--

“(A) is sold by the taxpayer producing such mixture to any person for use as a fuel, or

“(B) is used as a fuel by the taxpayer producing such mixture.

“(3) Alternative and unconventional aviation fuel.--For purposes of this subsection, the term ‘alternative and unconventional aviation fuel' means aviation fuel that is produced from unconventional resources (including coal, natural gas, biomass, ethanol, butanol, and hydrogen) and is determined, through peer-reviewed research conducted or reviewed by a National Laboratory, or by the head of a Federal agency, would produce lower lifecycle greenhouse gas emissions, as compared to the lifecycle greenhouse gas emissions of the displaced aviation fuel.

“(4) Termination.--This subsection shall not apply to any sale or use for any period after December 31, 2016.”.

(2) Conforming amendment.--Section 6426(a)(1) of the Internal Revenue Code of 1986 is amended by striking “and (e)” and inserting “(e), and (i)”.

(3) Effective date.--The amendments made by this subsection shall apply to any sale or use after the date of the enactment of this Act.

(f) Sense of the Senate.--It is the sense of the Senate that the Department of Transportation, Federal Aviation Administration, Department of the Air Force, and other Federal agencies should continue research, testing, evaluation, and use of alternative fuels as defined in this section with the goals of--

(1) reducing emissions;

(2) lowering the cost of aviation fuel; and

(3) increasing the performance, reliability, and security of aviation fuel production and supply.