Energy Policy Act – Vehicles and Fuels

Energy Policy Act – Vehicles and Fuels

According to our government the Energy Policy Act of 2005 has given new tax incentives for Your Car. A synopsis of the incentives are below, with the actual policy act for vehicles below that.Starting in 2006, hybrid-car buyers and advanced lean-burn technology vehicles will be eligible for tax credit’s ranging from $1,700-$3,000; this credit is tied with two components: hybrids that save the most fuel compared with 2002 models, and the vehicles estimated lifetime fuel savings.

The amount of credit for the purchase of a fuel cell vehicle is determined by a base credit amount that depends up on the weight class of the vehicle and in the case of automobiles or light trucks, an additional credit amount that depends upon the rated fuel economy of the vehicle compared to a base fuel economy.

For fuel-cell-powered vehicles weighing less than 8,500 pounds, for instance, the base credit will be $8,000 – heavier vehicles will get bigger credit’s. Credit’s are offered for cars and light trucks that are more fuel-efficient than 2002 models. (A tax credit gives the taxpayer a dollar-for-dollar reduction in his or her taxes.)

A provision permit’s taxpayers to claim a 30% credit for the cost of installing clean-fuel vehicle refueling property to be used in a trade or business of the taxpayer or installed at the principal residence of the taxpayer.

Under the provision, clean fuels are considered any fuel at least 85% of the volume of which consists of ethanol, natural gas, compressed natural gas, liquefied petroleum gas, and hydrogen and any mixture of diesel fuel and biodiesel containing at least 20% biodiesel (Provision is effective for property placed in service 12/31/2005 and before 01/01/2010).

TITLE VII”VEHICLES AND FUELS

Subtitle A”Existing Programs

SECTION 701. USE OF ALTERNATIVE FUELS BY DUAL FUELED VEHICLES.

Section 400AA(a)(3)(E) of the Energy Policy and Conservation Act (42 U.S.C. 6374(a)(3)(E)) is amended to read as follows:

(E)(i) Dual fueled vehicles acquired pursuant to this section shall be operated on alternative fuels unless the Secretary determines that an agency qualifies for a waiver of such requirement for vehicles operated by the agency in a particular geographic area in which”

(I) the alternative fuel otherwise required to be used in the vehicle is not reasonably available to retail purchasers of the fuel, as certified to the Secretary by the head of the agency; or

(II) the cost of the alternative fuel otherwise required to be used in the vehicle is unreasonably more expensive compared to gasoline, as certified to the Secretary by the head of the agency.

(ii) The Secretary shall monitor compliance with this subparagraph by all such fleets and shall report annually to Congress on the extent to which the requirements of this subparagraph are being achieved. The report shall include information on annual reductions achieved from the use of petroleum-based fuels and the problems, if any, encountered in acquiring alternative fuels.

SEC. 704. INCREMENTAL COST ALLOCATION.

Section 303(c) of the Energy Policy Act of 1992 (42 U.S.C. 13212(c)) is amended by striking “may” and inserting “shall”. SEC. 705. LEASE CONDENSATES.

(a) LEASE CONDENSATE FUELS.”Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) is amended”

(1) in paragraph (2), by inserting “mixtures containing 50 percent or more by volume of lease condensate or fuels extracted from lease condensate;” after “liquefied petroleum gas;”;

(2) in paragraph (13), by striking “and” at the end;

(3) in paragraph (14)”

(a) by inserting “mixtures containing 50 percent or more by volume of lease condensate or fuels extracted from lease condensate,” after “liquefied petroleum gas,”; and

(b) by striking the period and inserting “;and”;

(4) by adding at the end the following:

(15) the term lease condensate means a mixture, primarily of pentanes and heavier hydrocarbons, that is recovered as a liquid from natural gas in lease separation facilities.

(b) LEASE CONDENSATE USE CREDITS.”

(1) IN GENERAL.”Title III of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.) is amended by adding at the end the following:

SEC. 313. LEASE CONDENSATE USE CREDITS.

(a) IN GENERAL.”Subject to subsection (d), the Secretary shall allocate 1 credit under this section to a fleet or covered person for each qualifying volume of the lease condensate component of fuel containing at least 50 percent lease condensate, or fuels extracted from lease condensate, after the date of enactment of this section for use by the fleet or covered person in vehicles owned or operated by the fleet or covered person that weigh more than 8,500 pounds gross vehicle weight rating.

(b) REQUIREMENTS.”A credit allocated under this section”

(1) shall be subject to the same exceptions, authority, documentation, and use of credit’s that are specified for qualifying volumes of biodiesel in section 312; and

(2) shall not be considered a credit under section 508.

(c) REGULATION.”

(1) IN GENERAL.”Subject to subsection (d), not later than January 1, 2006, after the collection of appropriate information and data that consider usage options, uses in other industries, products, or processes, potential volume capacities, costs, air emissions, and fuel efficiencies, the Secretary shall issue a regulation establishing requirements and procedures for the implementation of this section.

(2) QUALIFYING VOLUME.”The regulation shall include a determination of an appropriate qualifying volume for lease condensate, except that in no case shall the Secretary determine that the qualifying volume for lease condensate is less than 1,125 gallons.

(d) APPLICABILITY.”This section applies unless the Secretary finds that the use of lease condensate as an alternative fuel would adversely affect public health or safety or ambient air quality or the environment.

(2) TABLE OF CONTENTS AMENDMENT.”The table of contents of the Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is amended by adding at the end of the items relating to title III the following:

Sec. 313. Lease condensate use credit’s.

(c) EMERGENCY EXEMPTION.”Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) is amended in paragraph (9)(E) by inserting before the semicolon at the end “, including vehicles directly used in the emergency repair of transmission lines and in the restoration of electricity service following power outages, as deter10 mined by the Secretary”.

SEC. 706. REVIEW OF ENERGY POLICY ACT OF 1992 PROGRAMS.

(a) IN GENERAL.”Not later than 180 days after the date of enactment of this section, the Secretary of Energy shall complete a study to determine the effect that titles III, IV, and V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.) have had on”

(1) the development of alternative fueled vehicle technology;

(2) the availability of that technology in the market; and

(3) the cost of alternative fueled vehicles.

(b) TOPICS.”As part of the study under subsection

(a), the Secretary shall specifically identify”

(1) the number of alternative fueled vehicles acquired by fleets or covered persons required to acquire alternative fueled vehicles;

(2) the quantity, by type, of alternative fuel actually used in alternative fueled vehicles acquired by fleets or covered persons;

(3) the quantity of petroleum displaced by the use of alternative fuels in alternative fueled vehicles acquired by fleets or covered persons;

(4) the direct and indirect costs of compliance with requirements under titles III, IV, and V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.), including”

(a) vehicle acquisition requirements imposed on fleets or covered persons;

(b) administrative and recordkeeping expenses;

(C) fuel and fuel infrastructure costs;

(D) associated training and employee expenses; and

(E) any other factors or expenses the Secretary determines to be necessary to compile reliable estimates of the overall costs and benefit’s of complying with programs under those titles for fleets, covered persons, and the national economy;

(5) the existence of obstacles preventing compliance with vehicle acquisition requirements and increased use of alternative fuel in alternative fueled vehicles acquired by fleets or covered persons; and

(6) the projected impact of amendments to the Energy Policy Act of 1992 made by this title.

(c) REPORT.”Upon completion of the study under this section, the Secretary shall submit to Congress a report that describes the results of the study and includes any recommendations of the Secretary for legislative or administrative changes concerning the alternative fueled vehicle requirements under titles III, IV and V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.). SEC. 707. REPORT CONCERNING COMPLIANCE WITH ALTERNATIVE FUELED VEHICLE PURCHASING REQUIREMENTS.

Section 310(b)(1) of the Energy Policy Act of 1992

(42 U.S.C. 13218(b)(1)) is amended by striking “1 year after the date of enactment of this subsection” and inserting “February 15, 2006”. Subtitle B”Hybrid Vehicles, Advanced Vehicles, and Fuel Cell Buses

PART 1”HYBRID VEHICLES

SEC. 711. HYBRID VEHICLES.

The Secretary of Energy shall accelerate efforts directed toward the improvement of batteries and other rechargeable energy storage systems, power electronics, hybrid systems integration, and other technologies for use in hybrid vehicles.

SEC. 712. HYBRID RETROFIT AND ELECTRIC CONVERSION PROGRAM.

(a) ESTABLISHMENT.”The Administrator of the Environmental Protection Agency, in consultation with the Secretary, shall establish a program for awarding grants on a competitive basis to entities for the installation of hybrid retrofit and electric conversion technologies for combustion engine vehicles.

(b) ELIGIBLE RECIPIENTS.”A grant shall be awarded under this section only”

(1) to a local or State governmental entity;

(2) to a for-profit or nonprofit corporation or other person; or (3) to 1 or more contracting entities that service combustion engine vehicles for an entity described in paragraph (1) or (2).

(c) AWARDS.”

(1) IN GENERAL.”The Administrator shall seek, to the maximum extent practicable, to ensure a broad geographic distribution of grants under this section.

(2) PREFERENCES.”In making awards of grants under this section, the Administrator shall give preference to proposals that”

(a) will achieve the greatest reductions in emissions per proposal or per vehicle; or

(b) involve the use of emissions control retrofit or conversion technology. (d) CONDITIONS OF GRANT.”A grant shall be provided under this section on the conditions that”

(1) combustion engine vehicles on which hybrid retrofit or conversion technology are to be demonstrated”

(a) with the retrofit or conversion technology applied will achieve low-emission standards consistent with the Voluntary National Low Emission Vehicle Program for Light-Duty Vehicles and Light-Duty Trucks (40 CFR Part 86) without model year restrictions; and

(b) will be used for a minimum of years;

(2) grant funds will be used for the purchase of hybrid retrofit or conversion technology, including State taxes and contract fees; and

(3) grant recipients will provide at least 15 percent of the total cost of the retrofit or conversion, including the purchase of hybrid retrofit or conversion technology and all necessary labor for installation of the retrofit or conversion.

(e) VERIFICATION.”Not later than 90 days after the date of enactment of this Act, the Administrator shall publish in the Federal Register procedures to verify”

(1) the hybrid retrofit or conversion technology to be demonstrated; and

(2) that grants are administered in accordance with this section.

(f) AUTHORIZATION OF APPROPRIATIONS.”There are authorized to be appropriated to the Administrator to carry out this section, to remain available until expended”

(1) $20,000,000 for fiscal year 2005;

(2) $35,000,000 for fiscal year 2006;

(3) $45,000,000 for fiscal year 2007; and

(4) such sums as are necessary for each of fiscal years 2008 and 2009.

PART 2”ADVANCED VEHICLES

SEC. 721. DEFINITIONS.

In this part:

(1) ALTERNATIVE FUELED VEHICLE.”

(a) IN GENERAL.”The term “alternative fueled vehicle” means a vehicle propelled solely on an alternative fuel (as defined in section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211)).

(b) EXCLUSION.”The term “alternative fueled vehicle” does not include a vehicle that the Secretary determines, by regulation, does not yield substantial environmental benefit’s over a vehicle operating solely on gasoline or diesel derived from fossil fuels.

(2) FUEL CELL VEHICLE.”The term “fuel cell vehicle” means a vehicle propelled by an electric motor powered by a fuel cell system that converts chemical energy into electricity by combining oxygen (from air) with hydrogen fuel that is stored on the vehicle or is produced onboard by reformation of a hydrocarbon fuel. Such fuel cell system may or may not include the use of auxiliary energy storage systems to enhance vehicle performance.

(3) HYBRID VEHICLE.”The term “hybrid vehicle” means a medium or heavy duty vehicle propelled by an internal combustion engine or heat engine using any combustible fuel and an onboard rechargeable energy storage device.

(4) NEIGHBORHOOD ELECTRIC VEHICLE.”The term “neighborhood electric vehicle” means a motor vehicle that”

(a) meets the definition of a low-speed vehicle (as defined in part 571 of title 49, Code of Federal Regulations);

(b) meets the definition of a zero-emission vehicle (as defined in section 86.1702“99 of title 40, Code of Federal Regulations);

(C) meets the requirements of Federal Motor Vehicle Safety Standard No. 500; and

(D) has a maximum speed of not greater than 25 miles per hour.

(5) PILOT PROGRAM.”The term “pilot program” means the competitive grant program established under section 722.

(6) SECRETARY.”The term “Secretary” means the Secretary of Energy.

ULTRA-LOW SULFUR 1 DIESEL VEHICLE.”

The term “ultra-low sulfur diesel vehicle” means a vehicle manufactured in any of model years 2004 through 2006 powered by a heavy-duty diesel engine that”

(a) is fueled by diesel fuel that contains sulfur at not more than 15 parts per million; and

(b) emit’s not more than the lesser of”

(i) for vehicles manufactured in model years 2004 through 2006, 2.5 grams per brake horsepower-hour of nonmethane hydrocarbons and oxides of nitrogen and .01 grams per brake horsepower-hour of particulate matter; or

(ii) the quantity of emissions of nonmethane hydrocarbons, oxides of nitrogen, and particulate matter of the best-performing technology of ultra-low sulfur diesel vehicles of the same class and application that are commercially available. SEC. 722. PILOT PROGRAM.

(a) ESTABLISHMENT.”The Secretary, in consultation with the Secretary of Transportation, shall establish a competitive grant pilot program, to be administered through the Clean Cities Program of the Department of Energy, to provide not more than 15 geographically dispersed project grants to State governments, local governments, or metropolitan transportation authorities to carry out a project or projects for the purposes described in subsection

(b).

(b) GRANT PURPOSES.”A grant under this section may be used for the following purposes:

(1) The acquisition of alternative fueled vehicles or fuel cell vehicles, including”

(a) passenger vehicles (including neighborhood electric vehicles); and

(b) motorized 2-wheel bicycles, scooters, or other vehicles for use by law enforcement personnel or other State or local government or metropolitan transportation authority employees.

(2) The acquisition of alternative fueled vehicles, hybrid vehicles, or fuel cell vehicles, including”

(a) buses used for public transportation or transportation to and from schools;

(b) delivery vehicles for goods or services; and

(C) ground support vehicles at public airports (including vehicles to carry baggage or push or pull airplanes toward or away from terminal gates).

(3) The acquisition of ultra-low sulfur diesel vehicles.

(4) Installation or acquisition of infrastructure necessary to directly support an alternative fueled vehicle, fuel cell vehicle, or hybrid vehicle project funded by the grant, including fueling and other support equipment.

(5) Operation and maintenance of vehicles, infrastructure, and equipment acquired as part of a project funded by the grant.

(c) APPLICATIONS.”

(1) REQUIREMENTS.”

(a) IN GENERAL.”The Secretary shall issue requirements for applying for grants under the pilot program.

(b) MINIMUM REQUIREMENTS.”At a minimum, the Secretary shall require that an application for a grant”

(i) be submitted by the head of a State or local government or a metropolitan transportation authority, or any combination thereof, and a registered participant in the Clean Cities Program of the Department of Energy; and

(ii) include”

(I) a description of the project proposed in the application, including how the project meets the requirements of this part;

(II) an estimate of the ridership or degree of use of the project;

(III) an estimate of the air pollution emissions reduced and fossil fuel displaced as a result of the project, and a plan to collect and disseminate environmental data, related to the project to be funded under the grant, over the life of the project;

(IV) a description of how the project will be sustainable withoutFederal assistance after the completion of the term of the grant;

(V) a complete description of the costs of the project, including acquisition, construction, operation, and maintenance costs over the expected life of the project;

(VI) a description of which costs of the project will be supported by Federal assistance under this part; and

(VII) documentation to the satis6 faction of the Secretary that diesel fuel containing sulfur at not more than 15 parts per million is available for carrying out the project, and a commitment by the applicant to use such fuel in carrying out the project.

(2) PARTNERS.”An applicant under paragraph

(1) may carry out a project under the pilot program in partnership with public and private entities.

(d) SELECTION CRITERIA.”In evaluating applications under the pilot program, the Secretary shall”

(1) consider each applicants previous experience with similar projects; and

(2) give priority consideration to applications that”

(a) are most likely to maximize protection of the environment;

(b) demonstrate the greatest commitment on the part of the applicant to ensure funding for the proposed project and the greatest likelihood that the project will be maintained or ex panded after Federal assistance under this part is completed; and

(C) exceed the minimum requirements of subsection (c)(1)(b)(ii).

(e) PILOT PROJECT REQUIREMENTS.”

(1) MAXIMUM AMOUNT.”The Secretary shall ot provide more than $20,000,000 in Federal assistance under the pilot program to any applicant.

(2) COST SHARING.”The Secretary shall not provide more than 50 percent of the cost, incurred during the period of the grant, of any project under the pilot program.

(3) MAXIMUM PERIOD OF GRANTS.”The Secretary shall not fund any applicant under the pilot program for more than 5 years.

(4) DEPLOYMENT AND DISTRIBUTION.”The Secretary shall seek to the maximum extent practicable to ensure a broad geographic distribution of project sites.

(5) TRANSFER OF INFORMATION AND KNOWL22 EDGE.”The Secretary shall establish mechanisms to ensure that the information and knowledge gained by participants in the pilot program are transferred among the pilot program participants and to other interested parties, including other applicants that submitted applications.

(f) SCHEDULE.”

(1) PUBLICATION.”Not later than 90 days after the date of enactment of this Act, the Secretary shall publish in the Federal Register, Commerce Business Daily, and elsewhere as appropriate, a request for applications to undertake projects under the pilot program. Applications shall be due not later than 180 days after the date of publication of the notice.

(2) SELECTION.”Not later than 180 days after the date by which applications for grants are due, the Secretary shall select by competitive, peer reviewed proposal, all applications for projects to be awarded a grant under the pilot program.

(g) LIMIT ON FUNDING.”The Secretary shall provide not less than 20 nor more than 25 percent of the grant funding made available under this section for the acquisition of ultra-low sulfur diesel vehicles. SEC. 723. REPORTS TO CONGRESS.

(a) INITIAL REPORT.”Not later than 60 days after the date on which grants are awarded under this part, the Secretary shall submit to Congress a report containing” an identification of the grant recipients and a description of the projects to be funded;

(2) an identification of other applicants that submitted applications for the pilot program; and

(3) a description of the mechanisms used by the Secretary to ensure that the information and knowledge gained by participants in the pilot program are transferred among the pilot program participants and to other interested parties, including other applicants that submitted applications.

(b) EVALUATION.”Not later than 3 years after the date of enactment of this Act, and annually thereafter until the pilot program ends, the Secretary shall submit to Congress a report containing an evaluation of the effectiveness of the pilot program, including”

(1) an assessment of the benefit’s to the environment derived from the projects included in the pilot program; and

(2) an estimate of the potential benefit’s to the environment to be derived from widespread application of alternative fueled vehicles and ultra-low sulfur diesel vehicles.

SEC. 724. AUTHORIZATION OF APPROPRIATIONS. There are authorized to be appropriated to the Secretary to carry out this part $200,000,000, to remain available until expended.

PART 3”FUEL CELL BUSES

SEC. 731. FUEL CELL TRANSIT BUS DEMONSTRATION.

(a) IN GENERAL.”The Secretary of Energy, in consultation with the Secretary of Transportation, shall establish a transit bus demonstration program to make competitive, merit-based awards for 5-year projects to demonstrate not more than 25 fuel cell transit buses (and necessary infrastructure) in 5 geographically dispersed localities.

(b) PREFERENCE.”In selecting projects under this section, the Secretary of Energy shall give preference to projects that are most likely to mitigate congestion and improve air quality.

(c) AUTHORIZATION OF APPROPRIATIONS.”There are authorized to be appropriated to the Secretary of Energy to carry out this section $10,000,000 for each of fiscal years 2006 through 2010. Subtitle C”Clean School Buses

SEC. 741. DEFINITIONS.

In this subtitle:

(1) ADMINISTRATOR.”The term “Administrator” means the Administrator of the Environmental Protection Agency.

(2) ALTERNATIVE FUEL.”The term “alternative fuel” means liquefied natural gas, compressed natural gas, liquefied petroleum gas, hydrogen, propane, or methanol or ethanol at no less than 85 percent by volume.

(3) ALTERNATIVE FUEL SCHOOL BUS.”The term “alternative fuel school bus” means a school bus that meets all of the requirements of this subtitle and is operated solely on an alternative fuel.

(4) EMISSIONS CONTROL RETROFIT TECHNOLOGY.”The term “emissions control retrofit technology” means a particulate filter or other emissions control equipment that is verified or certified by the Administrator or the California Air Resources Board as an effective emission reduction technology when installed on an existing school bus.

(5) IDLING.”The term “idling” means operating an engine while remaining stationary for more than approximately 15 minutes, except that the term does not apply to routine stoppages associated with traffic movement or congestion.

(6) SECRETARY.”The term “Secretary” means the Secretary of Energy.

(7) ULTRA-LOW SULFUR DIESEL FUEL.”The term “ultra-low sulfur diesel fuel” means diesel fuel that contains sulfur at not more than 15 parts per million.

(8) ULTRA-LOW SULFUR DIESEL FUEL SCHOOL BUS.”The term “ultra-low sulfur diesel fuel school bus” means a school bus that meets all of the requirements of this subtitle and is operated solely on ultra-low sulfur diesel fuel.

SEC. 742. PROGRAM FOR REPLACEMENT OF CERTAIN SCHOOL BUSES WITH CLEAN SCHOOL BUSES.

(a) ESTABLISHMENT.”The Administrator, in consultation with the Secretary and other appropriate Federal departments and agencies, shall establish a program for awarding grants on a competitive basis to eligible entities for the replacement of existing school buses manufactured before model year 1991 with alternative fuel school buses and ultra-low sulfur diesel fuel school buses.

(b) REQUIREMENTS.”

(1) IN GENERAL.”Not later than 90 days after the date of enactment of this Act, the Administrator shall establish and publish in the Federal Register grant requirements on eligibility for assistance, and on implementation of the program established under subsection

(a), including instructions for the submission of grant applications and certification requirements to ensure compliance with this subtitle.

(2) APPLICATION DEADLINES.”The requirements established under paragraph

(1) shall require submission of grant applications not later than”

(a) in the case of the first year of program implementation, the date that is 180 days after the publication of the requirements in the Federal Register; and

(b) in the case of each subsequent year, June 1 of the year.

(c) ELIGIBLE RECIPIENTS.”A grant shall be awarded under this section only”

(1) to 1 or more local or State governmental entities responsible for providing school bus service to 1 or more public school systems or responsible for the purchase of school buses;

(2) to 1 or more contracting entities that provide school bus service to 1 or more public school systems, if the grant application is submitted jointly with the 1 or more school systems to be served by the buses, except that the application may provide that buses purchased using funds awarded shall be owned, operated, and maintained exclusively by the 1 or more contracting entities; or

(3) to a nonprofit school transportation association representing private contracting entities, if the association has notified and received approval from the 1 or more school systems to be served by the buses.

(d) AWARD DEADLINES.”

(1) IN GENERAL.”Subject to paragraph

(2), the Administrator shall award a grant made to a qualified applicant for a fiscal year”

(a) in the case of the first fiscal year of program implementation, not later than the date that is 90 days after the application deadline established under subsection

(b)

(2); and

(b) in the case of each subsequent fiscal year, not later than August 1 of the fiscal year.

(2) INSUFFICIENT NUMBER OF QUALIFIED GRANT APPLICATIONS.”If the Administrator does not receive a sufficient number of qualified grant applications to meet the requirements of subsection (i)(1) for a fiscal year, the Administrator shall award a grant made to a qualified applicant under subsection (i)

(2) not later than September 30 of the fiscal year.

(e) TYPES OF 1 GRANTS.”

(1) IN GENERAL.”A grant under this section shall be used for the replacement of school buses manufactured before model year 1991 with alternative fuel school buses and ultra-low sulfur diesel fuel school buses.

(2) NO ECONOMIC BENEFIT.”Other than the receipt of the grant, a recipient of a grant under this section may not receive any economic benefit in connection with the receipt of the grant.

(3) PRIORITY OF GRANT APPLICATIONS.”The Administrator shall give priority to applicants that propose to replace school buses manufactured before model year 1977. (f) CONDITIONS OF GRANT.”A grant provided under this section shall include the following conditions:

(1) SCHOOL BUS FLEET.”All buses acquired with funds provided under the grant shall be operated as part of the school bus fleet for which the grant was made for a minimum of 5 years.

(2) USE OF FUNDS.”Funds provided under the grant may only be used”

(a) to pay the cost, except as provided in paragraph

(3), of new alternative fuel school buses or ultra-low sulfur diesel fuel school buses, including State taxes and contract fees associated with the acquisition of such buses; and(b) to provide”

(i) up to 20 percent of the price of the alternative fuel school buses acquired, for necessary alternative fuel infrastructure if the infrastructure will only be available to the grant recipient; and

(ii) up to 25 percent of the price of the alternative fuel school buses acquired, for necessary alternative fuel infrastructure if the infrastructure will be available to the grant recipient and to other bus fleets.

(3) GRANT RECIPIENT FUNDS.”The grant recipient shall be required to provide at least”

(a) in the case of a grant recipient described in paragraph (1) or (3) of subsection

(c), the lesser of”

(i) an amount equal to 15 percent of the total cost of each bus received; or (ii) $15,000 per bus; and

(b) in the case of a grant recipient described in subsection (c)(2), the lesser of (i) an amount equal to 20 percent of the total cost of each bus received; or (ii) $20,000 per bus.

(4) ULTRA-LOW SULFUR DIESEL FUEL.”In the case of a grant recipient receiving a grant for ultralow sulfur diesel fuel school buses, the grant recipient shall be required to provide documentation to the satisfaction of the Administrator that diesel fuel containing sulfur at not more than 15 parts per million is available for carrying out the purposes of the grant, and a commitment by the applicant to use such fuel in carrying out the purposes of the grant.

(5) TIMING.”All alternative fuel school buses, ultra-low sulfur diesel fuel school buses, or alternative fuel infrastructure acquired under a grant awarded under this section shall be purchased and placed in service as soon as practicable. (g) BUSES.”

(1) IN GENERAL.”Except as provided in paragraph

(2), funding under a grant made under this section for the acquisition of new alternative fuel school buses or ultra-low sulfur diesel fuel school buses shall only be used to acquire school buses”

(a) with a gross vehicle weight of greater than 14,000 pounds;

(b) that are powered by a heavy duty engine;

(C) in the case of alternative fuel school buses manufactured in model years 2004 through 2006, that emit not more than 1.8 grams per brake horsepower-hour of nonmethane hydrocarbons and oxides of nitrogen and .01 grams per brake horsepower-hour of particulate matter; and

(D) in the case of ultra-low sulfur diesel fuel school buses manufactured in model years 2004 through 2006, that emit not more than 2.5 grams per brake horsepower-hour of nonmethane hydrocarbons and oxides of nitrogen and .01 grams per brake horsepower-hour of particulate matter.

(2) LIMITATIONS.”A bus shall not be acquired under this section that emit’s nonmethane hydrocarbons, oxides of nitrogen, or particulate matter at a rate greater than the best performing technology of the same class of ultra-low sulfur diesel fuel school buses commercially available at the time the grant is made.

(h) DEPLOYMENT AND DISTRIBUTION.”The Administrator shall

(1) seek, to the maximum extent practicable, to achieve nationwide deployment of alternative fuel school buses and ultra-low sulfur diesel fuel school buses through the program under this section; and

(2) ensure a broad geographic distribution of grant awards, with a goal of no State receiving more than 10 percent of the grant funding made available under this section for a fiscal year.

(i) ALLOCATION OF FUNDS.”

(1) IN GENERAL.”Subject to paragraph (2), of the amount of grant funding made available to carry out this section for any fiscal year, the Administrator shall use”

(a) 70 percent for the acquisition of alternative fuel school buses or supporting infrastructure; and

(b) 30 percent for the acquisition of ultralow sulfur diesel fuel school buses.

(2) INSUFFICIENT NUMBER OF QUALIFIED GRANT APPLICATIONS.”After the first fiscal year in which this program is in effect, if the Administrator does not receive a sufficient number of qualified grant applications to meet the requirements of subparagraph (a) or (b) of paragraph (1) for a fiscal year, effective beginning on August 1 of the fiscal year, the Administrator shall make the remaining funds available to other qualified grant applicants under this section.

(j) REDUCTION OF SCHOOL BUS IDLING.”Each local educational agency (as defined in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801)) that receives Federal funds under the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.) is encouraged to develop a policy, consistent with the health, safety, and welfare of students and the proper operation and maintenance of school buses, to reduce the incidence of unnecessary school bus idling at schools when picking up and unloading students.

(k) ANNUAL REPORT.”

(1) IN GENERAL.”Not later than January 31 of each year, the Administrator shall transmit to Congress a report evaluating implementation of the programs under this section and section 743.

(2) COMPONENTS.”The reports shall include a description of”

(a) the total number of grant applications received;

(b) the number and types of alternative fuel school buses, ultra-low sulfur diesel fuel school buses, and retrofitted buses requested in grant applications;

(C) grants awarded and the criteria used to select the grant recipients;

(D) certified engine emission levels of all buses purchased or retrofitted under the programs under this section and section 743;

(E) an evaluation of the in-use emission level of buses purchased or retrofitted under the programs under this section and section 743; and

(F) any other information the Administrator considers appropriate.

(l) AUTHORIZATION OF APPROPRIATIONS.”There are authorized to be appropriated to the Administrator to carry out this section, to remain available until expended”

(1) $45,000,000 for fiscal year 2005;

(2) $65,000,000 for fiscal year 2006;

(3) $90,000,000 for fiscal year 2007; and

(4) such sums as are necessary for each of fiscal years 2008 and 2009. SEC. 743. DIESEL RETROFIT PROGRAM.

(a) ESTABLISHMENT.”The Administrator, in consultation with the Secretary, shall establish a program for awarding grants on a competitive basis to entities for the installation of retrofit technologies for diesel school buses.

(b) ELIGIBLE RECIPIENTS.”A grant shall be awarded under this section only”

(1) to a local or State governmental entity responsible for providing school bus service to 1 or more public school systems;

(2) to 1 or more contracting entities that provide school bus service to 1 or more public school systems, if the grant application is submitted jointly with the 1 or more school systems that the buses will serve, except that the application may provide that buses purchased using funds awarded shall be owned, operated, and maintained exclusively by the 1 or more contracting entities; or

(3) to a nonprofit school transportation association representing private contracting entities, if the association has notified and received approval from the 1 or more school systems to be served by the buses. (c) AWARDS.”

(1) IN GENERAL.”The Administrator shall seek, to the maximum extent practicable, to ensure a broad geographic distribution of grants under this section.

(2) PREFERENCES.”In making awards of grants under this section, the Administrator shall give preference to proposals that”

(a) will achieve the greatest reductions in emissions of nonmethane hydrocarbons, oxides of nitrogen, or particulate matter per proposal or per bus; or

(b) involve the use of emissions control retrofit technology on diesel school buses that operate solely on ultra-low sulfur diesel fuel.

(d) CONDITIONS OF GRANT.”A grant shall be provided under this section on the conditions that”

(1) buses on which retrofit emissions-control technology are to be demonstrated”

(a) will operate on ultra-low sulfur diesel fuel where such fuel is reasonably available or required for sale by State or local law or regulation;

(b) were manufactured in model year 1991 or later; and (C) will be used for the transportation of school children to and from school for a min23 imum of 5 years;

(2) grant funds will be used for the purchase of emission control retrofit technology, including State taxes and contract fees; and

(3) grant recipients will provide at least 15 percent of the total cost of the retrofit, including the purchase of emission control retrofit technology and all necessary labor for installation of the retrofit.

(e) VERIFICATION.”Not later than 90 days after the date of enactment of this Act, the Administrator shall publish in the Federal Register procedures to verify”

(1) the retrofit emissions-control technology to be demonstrated;

(2) that buses powered by ultra-low sulfur diesel fuel on which retrofit emissions-control technology are to be demonstrated will operate on diesel fuel containing not more than 15 parts per million of sulfur; and

(3) that grants are administered in accordance with this section.

(f) AUTHORIZATION OF APPROPRIATIONS.”There are authorized to be appropriated to the Administrator to carry out this section, to remain available until expended”

(1) $20,000,000 for fiscal year 2005;

(2) $35,000,000 for fiscal year 2006;

(3) $45,000,000 for fiscal year 2007; and

(4) such sums as are necessary for each of fiscal years 2008 and 2009.

SEC. 744. FUEL CELL SCHOOL BUSES.

(a) ESTABLISHMENT.”The Secretary shall establish a program for entering into cooperative agreements”

(1) with private sector fuel cell bus developers for the development of fuel cell-powered school buses; and

(2) subsequently, with not less than 2 unit’s of local government using natural gas-powered school buses and such private sector fuel cell bus developers to demonstrate the use of fuel cell-powered school buses.

(b) COST SHARING.”The non-Federal contribution for activities funded under this section shall be not less than”

(1) 20 percent for fuel infrastructure development activities; and

(2) 50 percent for demonstration activities and for development activities not described in paragraph

(1). (c) REPORTS TO CONGRESS.”Not later than 3 years after the date of enactment of this Act, the Secretary shall transmit to Congress a report that”

(1) evaluates the process of converting natural gas infrastructure to accommodate fuel cell-powered school buses; and

(2) assesses the results of the development and demonstration program under this section. (d) AUTHORIZATION OF APPROPRIATIONS.”There are authorized to be appropriated to the Secretary to carry out this section $25,000,000 for the period of fiscal years 2005 through 2007. Subtitle D”Miscellaneous SEC. 751. RAILROAD EFFICIENCY.

(a) ESTABLISHMENT.”The Secretary of Energy shall, in cooperation with the Secretary of Transportation and the Administrator of the Environmental Protection Agency, establish a cost-shared, public-private research partnership involving the Federal Government, railroad carriers, locomotive manufacturers and equipment suppliers, and the Association of American Railroads, to develop and demonstrate railroad locomotive technologies that increase fuel economy, reduce emissions, and lower costs of operation.

(b) AUTHORIZATION OF APPROPRIATIONS.”There are authorized to be appropriated to the Secretary of Energy to carry out this section”

(1) $25,000,000 for fiscal year 2006;

(2) $35,000,000 for fiscal year 2007; and

(3) $50,000,000 for fiscal year 2008.

SEC. 752. MOBILE EMISSION REDUCTIONS TRADING AND CREDITING.

(a) IN GENERAL.”Not later than 180 days after the date of enactment of this Act, the Administrator of the Environmental Protection Agency shall submit to Congress a report on the experience of the Administrator with the trading of mobile source emission reduction credit’s for use by owners and operators of stationary source emission sources to meet emission offset requirements within a nonattainment area.

(b) CONTENTS.”The report shall describe”

(1) projects approved by the Administrator that include the trading of mobile source emission reduction credit’s for use by stationary sources in complying with offset requirements, including a description of”

(a) project and stationary sources location;

(b) volumes of emissions offset and traded; (C) the sources of mobile emission reduction credit’s; and (D) if available, the cost of the credit’s;

(2) the significant issues identified by the Administrator in consideration and approval of trading in the projects;

(3) the requirements for monitoring and assessing the air quality benefit’s of any approved project;

(4) the statutory authority on which the Administrator has based approval of the projects; (5) an evaluation of how the resolution of issues in approved projects could be used in other projects; and (6) any other issues that the Administrator considers relevant to the trading and generation of mobile source emission reduction credit’s for use by stationary sources or for other purposes.

SEC. 753. AVIATION FUEL CONSERVATION AND EMISSIONS.

(a) IN GENERAL.”Not later than 60 days after the date of enactment of this Act, the Administrator of the Federal Aviation Administration and the Administrator of the Environmental Protection Agency shall jointly initiate a study to identify”

(1) the impact of aircraft emissions on air quality in nonattainment areas; and

(2) ways to promote fuel conservation measures for aviation to”

(a) enhance fuel efficiency; and

(b) reduce emissions.

(b) FOCUS.”The study under subsection

(a) shall focus on how air traffic management inefficiencies, such as aircraft idling at airports, result in unnecessary fuel burn and air emissions. (c) REPORT.”Not later than 1 year after the date of the initiation of the study under subsection

(a), the Administrator of the Federal Aviation Administration and the Administrator of the Environmental Protection Agency shall jointly submit to the Committee on Energy and Commerce and the Committee on Transportation and Infrastructure of the House of Representatives and the Committee on Environment and Public Works and the Committee on Commerce, Science, and Transportation of the Senate a report that”

(1) describes the results of the study; and

(2) includes any recommendations on ways in which unnecessary fuel use and emissions affecting air quality may be reduced”

(a) without adversely affecting safety and security and increasing individual aircraft noise; and

(b) while taking into account all aircraft emissions and the impact of the emissions on human health.

SEC. 754. DIESEL FUELED VEHICLES.

(a) DEFINITION OF TIER 2 EMISSION STANDARDS.” In this section, the term “tier 2 emission standards” means the motor vehicle emission standards that apply to passenger cars, light trucks, and larger passenger vehicles manufactured after the 2003 model year, as issued on February 10, 2000, by the Administrator of the Environmental Protection Agency under sections 202 and 211 of the Clean Air Act (42 U.S.C. 7521, 7545).

(b) DIESEL COMBUSTION AND AFTER-TREATMENT TECHNOLOGIES.”The Secretary of Energy shall accelerate efforts to improve diesel combustion and after-treatment technologies for use in diesel fueled motor vehicles. (c) GOALS.”The Secretary shall carry out subsection

(b) with a view toward achieving the following goals:

(1) Developing and demonstrating diesel technologies that, not later than 2010, meet the following standards:

(a) Tier 2 emission standards.

(b) The heavy-duty emissions standards of 2007 that are applicable to heavy-duty vehicles under regulations issued by the Administrator of the Environmental Protection Agency as of the date of enactment of this Act.

(2) Developing the next generation of low-emission, high efficiency diesel engine technologies, including homogeneous charge compression ignition technology.

SEC. 757. BIODIESEL ENGINE TESTING PROGRAM.

(a) IN GENERAL.”Not later that 180 days after the date of enactment of this Act, the Secretary shall initiate a partnership with diesel engine, diesel fuel injection system, and diesel vehicle manufacturers and diesel and biodiesel fuel providers, to include biodiesel testing in advanced diesel engine and fuel system technology.

(b) SCOPE.”The program shall provide for testing to determine the impact of biodiesel from different sources on current and future emission control technologies, with emphasis on”

(1) the impact of biodiesel on emissions warranty, in-use liability, and antitampering provisions;

(2) the impact of long-term use of biodiesel on engine operations;

(3) the options for optimizing these technologies for both emissions and performance when switching between biodiesel and diesel fuel; and

(4) the impact of using biodiesel in these fueling systems and engines when used as a blend with 2006 Environmental Protection Agency-mandated diesel fuel containing a maximum of 15-parts-per million sulfur content.

(c) REPORT.”Not later than 2 years after the date of enactment of this Act, the Secretary shall provide an interim report to Congress on the findings of the program, including a comprehensive analysis of impacts from biodiesel on engine operation for both existing and expected future diesel technologies, and recommendations for ensuring optimal emissions reductions and engine performance with biodiesel.

(d) AUTHORIZATION OF APPROPRIATIONS.”There are authorized to be appropriated $5,000,000 for each of fiscal years 2006 through 2010 to carry out this section.

(e) DEFINITION.”For purposes of this section, the term “biodiesel” means a diesel fuel substitute produced from nonpetroleum renewable resources that meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under

section 211 of the Clean Air Act (42 U.S.C. 7545) and that meets the American Society for Testing and Materials D6751“02a Standard Specification for Biodiesel Fuel (B100) Blend Stock for Distillate Fuels. SEC. 758. HIGH OCCUPANCY VEHICLE EXCEPTION. Notwithstanding section 102

(a) of title 23, United States Code, a State may permit a vehicle with fewer than 2 occupants to operate in high occupancy vehicle lanes if the vehicle”

(1) is a dedicated vehicle (as defined in section 01 of the Energy Policy Act of 1992 (42 U.S. 13211)); or

(2) is a hybrid vehicle (as defined by the State for the purpose of this section). Subtitle E”Automobile Efficiency SEC. 771. AUTHORIZATION OF APPROPRIATIONS FOR IMPLEMENTATION AND ENFORCEMENT OF FUEL ECONOMY STANDARDS. In addition to any other funds authorized by law, there are authorized to be appropriated to the National Highway Traffic Safety Administration to carry out it’s obligations with respect to average fuel economy standards $2,000,000 for each of fiscal years 2006 through 2010.

SEC. 772. REVISED CONSIDERATIONS FOR DECISIONS ON MAXIMUM FEASIBLE AVERAGE FUEL ECONOMY. Section 32902(f) of title 49, United States Code, is amended to read as follows:

“(f) CONSIDERATIONS FOR DECISIONS ON MAXIMUM FEASIBLE AVERAGE FUEL ECONOMY.”When deciding maximum feasible average fuel economy under this section, the Secretary of Transportation shall consider the following matters:

(1) Technological feasibility. “

(2) Economic practicability. “

(3) The effect of other motor vehicle standards of the Government on fuel economy. “

(4) The need of the United States to conserve energy. “(5) The effects of fuel economy standards on passenger automobiles, nonpassenger automobiles, and occupant safety. “(6) The effects of compliance with average fuel economy standards on levels of automobile industry employment in the United States.”. SEC. 773. EXTENSION OF MAXIMUM FUEL ECONOMY INCREASE FOR ALTERNATIVE FUELED VEHICLES.

(a) MANUFACTURING INCENTIVES.”Section 32905 of title 49, United States Code, is amended”

(1) in each of subsections

(b) and (d), by striking “1993“2004” and inserting “1993“2010”;

(2) in subsection (f), by striking “2001” and inserting “2007”; and

(3) in subsection (f)

(1), by striking “2004” and inserting “2010”.

(b) MAXIMUM FUEL ECONOMY INCREASE.”Subsection

(a)

(1) of section 32906 of title 49, United States Code, is amended”

(1) in subparagraph

(a), by striking “the model years 1993“2004” and inserting “model years 1993“2010”; and

(2) in subparagraph

(b), by striking “the model years 2005“2008” and inserting “model years 2011“2014”.

SEC. 774. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE OF FUEL FOR AUTOMOBILES.

(a) IN GENERAL.”Not later than 30 days after the date of the enactment of this Act, the Administrator of the National Highway Traffic Safety Administration shall initiate a study of the feasibility and effects of reducing by model year 2014, by a significant percentage, the amount of fuel consumed by automobiles.

(b) SUBJECTS OF STUDY.”The study under this section shall include”

(1) examination of, and recommendation of alternatives to, the policy under current Federal law of establishing average fuel economy standards for automobiles and requiring each automobile manufacturer to comply with average fuel economy standards that apply to the automobiles it manufactures;

(2) examination of how automobile manufacturers could contribute toward achieving the reduction referred to in subsection

(a);

(3) examination of the potential of fuel cell technology in motor vehicles in order to determine the extent to which such technology may contribute to achieving the reduction referred to in subsection

(a); and

(4) examination of the effects of the reduction referred to in subsection

(a) on”

(a) gasoline supplies;

(b) the automobile industry, including sales of automobiles manufactured in the United States;

(C) motor vehicle safety; and

(D) air quality.

(c) REPORT.”The Administrator shall submit to Congress a report on the findings, conclusion, and recommendations of the study under this section by not later than 1 year after the date of the enactment of this Act.

About the Author:

Lou Ann Hammond is the CEO of Carlist and Driving the Nation. She is the co-host of Real Wheels Washington Post carchat every Friday morning and is the Automotive, energy correspondent for The John Batchelor Show and a Contributor to Automotive Electronics magazine headquartered in Korea. Hammond is a member of the North American Car and Truck of the Year (NACTOY), Women's World Car of the Year (WWCOTY), and the Concept Car of the Year.

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