42 U.S.C. § 16251: Production incentives for cellulosic biofuels

accelerate deployment and commercialization of biofuels; deliver the first 1,000,000,000 gallons in annual cellulosic biofuels production by 2015; ensure biofuels produced after 2015 are cost competitive with gasoline and diesel; and ensure that small feedstock producers and rural small businesses are full participants in the development of the cellulosic biofuels industry. The term “cellulosic biofuels” means any fuel that is produced from cellulosic feedstocks. is located in the United States; meets all applicable Federal and State permitting requirements; and meets any financial criteria established by the Secretary. The Secretary, in consultation with the Secretary of Agriculture, the Secretary of Defense, and the Administrator of the Environmental Protection Agency, shall establish an incentive program for the production of cellulosic biofuels. set payments per gallon of cellulosic biofuels produced in an amount determined by the Secretary, until initiation of the first reverse auction; and reverse auction thereafter. not later than 1 year after the first year of annual production in the United States of 100,000,000 gallons of cellulosic biofuels, as determined by the Secretary; or not later than 3 years after August 8, 2005 . the Secretary shall solicit bids from eligible entities; a desired level of production incentive on a per gallon basis; and an estimated annual production amount in gallons; and the Secretary shall issue awards for the production amount submitted, beginning with the eligible entity submitting the bid for the lowest level of production incentive on a per gallon basis and meeting such other criteria as are established by the Secretary, until the amount of funds available for the reverse auction is committed. An eligible entity selected by the Secretary through a reverse auction shall receive the amount of performance incentive requested in the auction for each gallon produced and sold by the entity during the first 6 years of operation. As a condition of the receipt of an award under this section, an eligible entity shall enter into an agreement with the Secretary under which the eligible entity agrees to begin production of cellulosic biofuels not later than 3 years after the date of the reverse auction in which the eligible entity participates. a per gallon amount determined by the Secretary during the first 4 years of the program; a declining per gallon cap over the remaining lifetime of the program, to be established by the Secretary so that cellulosic biofuels produced after the first year of annual cellulosic biofuels production in the United States in excess of 1,000,000,000 gallons are cost competitive with gasoline and diesel; not more than 25 percent of the funds committed within each reverse auction to any 1 project; not more than $100,000,000 in any 1 year; and not more than $1,000,000,000 over the lifetime of the program. demonstrate outstanding potential for local and regional economic development; include agricultural producers or cooperatives of agricultural producers as equity partners in the ventures; and have a strategic agreement in place to fairly reward feedstock suppliers. There is authorized to be appropriated to carry out this section $250,000,000.