text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Biobased Energy Incentive Act of 
  2002''.
  
  SEC. 2. PRODUCTION OF BIOBASED ENERGY PRODUCTS.
  
      The Biomass Research and Development Act of 2000 (7 U.S.C. 7624 
  note; Public Law 106-224) is amended--
              (1) by redesignating section 310 as section 311; and
              (2) by inserting after section 309 the following:
  
  ``SEC. 310. PRODUCTION OF BIOBASED ENERGY PRODUCTS.
  
      ``(a) Definitions.--In this section:
              ``(1) Biobased energy product.--The term `biobased energy 
          product' means biodiesel or ethanol fuel.
              ``(2) Biodiesel.--The term `biodiesel' means a monoalkyl 
          ester that meets the requirements of ASTM D6751.
              ``(3) Eligible commodity.--The term `eligible commodity' 
          means wheat, corn, grain sorghum, barley, oats, rice, soybeans, 
          sunflower seed, rapeseed, canola, safflower, flaxseed, mustard, 
          crambe, sesame seed, cottonseed, and cellulosic commodities 
          (such as hybrid poplars and switch grass).
              ``(4) Eligible producer.--The term `eligible producer' 
          means a producer that--
                      ``(A) uses an eligible commodity to produce a 
                  biobased energy product; and
                      ``(B) enters into a contract with the Secretary 
                  under subsection (b)(2).
              ``(5) New producer.--The term `new producer' means an 
          eligible producer that has not used an eligible commodity to 
          produce a biobased energy product during the preceding fiscal 
          year.
      ``(b) Biobased Energy Incentive Program.--
              ``(1) Establishment.--The Secretary shall establish a 
          biobased energy incentive program under which the Secretary 
          shall make payments to eligible producers to promote the use of 
          eligible commodities to produce biobased energy products.
              ``(2) Contracts.--
                      ``(A) In general.--To be eligible to receive a 
                  payment, an eligible producer shall enter into a 
                  contract with the Secretary under which the producer 
                  shall agree to increase the use of eligible commodities 
                  to produce biobased energy products during 1 or more 
                  fiscal years.
                      ``(B) Quarterly payments.--Under a contract--
                              ``(i) the eligible producer shall agree to 
                          increase the use of eligible commodities to 
                          produce biobased energy products during each 
                          fiscal year covered by the contract; and
                              ``(ii) the Secretary shall make payments to 
                          the eligible producer for each quarter of the 
                          fiscal year.
              ``(3) Amount.--Subject to paragraphs (6) through (8), the 
          amount of a payment made to an eligible producer for a fiscal 
          year under this subsection shall be determined by multiplying--
                      ``(A) the payment quantity for the fiscal year 
                  determined under paragraph (4); by
                      ``(B) the payment rate determined under paragraph 
                  (5).
              ``(4) Payment quantity.--
                      ``(A) In general.--Subject to subparagraph (B), the 
                  payment quantity for payments made to an eligible 
                  producer for a fiscal year under this subsection shall 
                  equal the difference between--
                              ``(i) the quantity of eligible commodities 
                          that the eligible producer agrees to use, under 
                          the contract entered into with the Secretary, 
                          to produce biobased energy products during the 
                          fiscal year; and
                              ``(ii) the quantity of eligible commodities 
                          that the eligible producer used to produce 
                          biobased energy products during the preceding 
                          fiscal year.
                      ``(B) New producers.--The payment quantity for 
                  payments made to a new producer for the first fiscal 
                  year of a contract under this subsection shall equal 25 
                  percent of the quantity of eligible commodities that 
                  the eligible producer uses to produce biobased energy 
                  products during the fiscal year.
              ``(5) Payment rate.--
                      ``(A) In general.--Subject to subparagraph (B), the 
                  payment rate for payments made to an eligible producer 
                  under this subsection for the use of an eligible 
                  commodity shall be determined by the Secretary to 
                  compensate the eligible producer for the local value 
                  of--
                              ``(i) in the case of corn, 1 bushel of corn 
                          for each 3 bushels of additional corn that is 
                          used to produce a biobased energy product; and
                              ``(ii) in the case of each other eligible 
                          commodity, an equivalent quantity determined by 
                          the Secretary.
                      ``(B) Small-scale producers.--The payment rate for 
                  payments made to an eligible producer that has an 
                  annual capacity of less than 60,000,000 gallons of 
                  biobased energy products shall be at least 25 percent 
                  higher than the payment rate for other eligible 
                  producers, as determined by the Secretary.
              ``(6) Proration.--If the amount made available for a fiscal 
          year under subsection (d)(2)(A) is insufficient to allow the 
          payment of the amount of the payments that eligible producers 
          (that apply for the payments) otherwise would have a right to 
          receive under this subsection, the Secretary shall prorate the 
          amount of the funds among all such eligible producers.
              ``(7) Overpayments.--If the total amount of payments that 
          an eligible producer receives for a fiscal year under this 
          section exceeds the amount the eligible producer should have 
          received under this subsection, the producer shall repay the 
          amount of the overpayment to the Secretary, plus interest (as 
          determined by the Secretary).
              ``(8) Limitation.--No eligible producer shall receive more 
          than 7 percent of the total amount made available for a fiscal 
          year under subsection (d)(2)(A).
              ``(9) Recordkeeping and monitoring.--To be eligible to 
          receive a payment under this subsection, an eligible producer 
          shall--
                      ``(A) maintain for at least 3 years records 
                  relating to the production of biobased energy products; 
                  and
                      ``(B) make the records available to the Secretary 
                  to verify eligibility for the payments.
              ``(10) Other requirements.--To be eligible to receive a 
          payment under this subsection, an eligible producer shall meet 
          other requirements of Federal law (including regulations) 
          applicable to the production of biodiesel or ethanol fuel.
      ``(c) Availability of Biobased Energy Products.--The Secretary 
  shall establish a program to encourage wider availability of biobased 
  energy products to consumers of gasoline and diesel fuels.
      ``(d) Funding.--
              ``(1) In general.--Subject to paragraph (2), the Secretary 
          shall use the funds, facilities, and authorities of the 
          Commodity Credit Corporation to carry out this section.
              ``(2) Fiscal year limitations.--The amount of funds of the 
          Commodity Credit Corporation used to carry out this section 
          shall not exceed--
                      ``(A) in the case of subsection (b), $150,000,000 
                  for fiscal year 2003 and each subsequent fiscal year; 
                  and
                      ``(B) in the case of subsection (c), $10,000,000 
                  for fiscal year 2003 and each subsequent fiscal 
                  year.''.
target: Biobased Energy Incentive Act of 2002 - Amends the Biomass Research and Development Act of 2000 to direct the Secretary of Agriculture to establish: (1) a biobased energy incentive program of payments to eligible producers to promote the use of commodities to produce biobased energy products (biodiesel or ethanol fuel); and (2) a program to encourage wider availability of biobased energy products to consumers of gasoline and diesel fuel.
feat_title: A bill to amend the Biomass Research and Development Act of 2000 to encourage production of biobased energy products, and for other purposes.