[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5950 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 5950
To repeal certain tax subsidies enacted by the Energy Policy Act of
2005 for oil and gas, to allow a credit against income tax for farm
diesel expenses, and to allow a credit to farmers who produce biodiesel
and agri-biodiesel.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 27, 2006
Mr. Udall of New Mexico introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To repeal certain tax subsidies enacted by the Energy Policy Act of
2005 for oil and gas, to allow a credit against income tax for farm
diesel expenses, and to allow a credit to farmers who produce biodiesel
and agri-biodiesel.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Family Farm Energy Relief Act of
2006''.
SEC. 2. REPEAL OF TAX SUBSIDIES ENACTED BY THE ENERGY POLICY ACT OF
2005 FOR OIL AND GAS.
(a) Repeal.--The following provisions, and amendments made by such
provisions, of the Energy Policy Act of 2005 are hereby repealed:
(1) Section 1323 (relating to temporary expensing for
equipment used in refining of liquid fuels).
(2) Section 1324 (relating to pass through to owners of
deduction for capital costs incurred by small refiner
cooperatives in complying with Environmental Protection Agency
sulfur regulations).
(3) Section 1325 (relating to natural gas distribution
lines treated as 15-year property).
(4) Section 1326 (relating to natural gas gathering lines
treated as 7-year property).
(5) Section 1328 (relating to determination of small
refiner exception to oil depletion deduction).
(6) Section 1329 (relating to amortization of geological
and geophysical expenditures).
(b) Administration of Internal Revenue Code of 1986.--The Internal
Revenue Code of 1986 shall be applied and administered as if the
provisions, and amendments, specified in subsection (a) had never been
enacted.
SEC. 3. FARM DIESEL PURCHASES CREDIT.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to nonrefundable
personal credits) is amended by inserting after section 25D the
following new section:
``SEC. 25E. FARM DIESEL EXPENSES CREDIT.
``(a) Allowance of Credit.--In the case of a qualified farmer,
there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to 10 percent of the farm
diesel expenses paid or incurred by the qualified farmer during the
taxable year.
``(b) Qualified Farmer.--For purposes of this section, with respect
to a taxable year, the term `qualified farmer' means an individual--
``(1) who is actively engaged in farming,
``(2) whose contributions to a farming operation during the
taxable year are at least commensurate with the individual's
claimed share of the profits or losses of the farming
operation, and
``(3) whose gross income from farming for the taxable year
is at least 75 percent of the individual's total gross income
from all sources for the taxable year.
``(c) Farm Diesel Expenses.--For purposes of this section, the term
`farm diesel expenses' means amounts paid or incurred for the purchase
of diesel fuel that is described in section 4082(a) and is intended to
be used for farming purposes.
``(d) Termination.--This section shall not apply with respect to
farm diesel expenses paid or incurred in taxable years beginning after
December 31, 2009.''.
(b) Clerical Amendment.--The table of items for subpart A of part
IV of subchapter A of chapter 1 of such Code is amended by inserting
after the item relating to section 25D the following new item:
``Sec. 25E. Farm diesel expenses credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to farm diesel expenses paid or incurred in taxable years
beginning after the date of the enactment of this Act.
SEC. 4. INCREASE IN SMALL AGRI-BIODIESEL PRODUCER CREDIT FOR QUALIFIED
FARMERS.
(a) In General.--Paragraph (5) of section 40A(b) of the Internal
Revenue Code of 1986 (relating to small agri-biodiesel producer credit)
is amended by adding at the end the following new subparagraph:
``(D) Increase for qualified farmers.--In the case
of an eligible small agri-biodiesel producer who is a
qualified farmer, subparagraph (A) shall be applied by
substituting `20 cents' for `10 cents'.''.
(b) Qualified Farmer.--Subsection (e) of section 40A of such Code
(relating to definitions and special rules for small agri-biodiesel
producer credit) is amended by adding at the end the following new
paragraph:
``(7) Qualified farmer.--With respect to a taxable year,
the term `qualified farmer' means an individual--
``(A) who is actively engaged in farming,
``(B) whose contributions to a farming operation
during the taxable year are at least commensurate with
the individual's claimed share of the profits or losses
of the farming operation, and
``(C) whose gross income from farming for the
taxable year is at least 75 percent of the individual's
total gross income from all sources for the taxable
year.''.
(c) Effective Date.--The amendments by this section shall apply to
qualified agri-biodiesel production after December 31, 2006, in taxable
years beginning after such date.
SEC. 5. ALLOWANCE OF SMALL BIODIESEL PRODUCER CREDIT FOR QUALIFIED
FARMERS.
(a) In General.--Section 40A of the Internal Revenue Code of 1986
(relating to biodiesel and renewable diesel used as fuel) is amended--
(1) in subsection (a), by striking the period at the end of
paragraph (3) and inserting ``, plus'' and by adding at the end
the following new paragraph:
``(4) in the case of an eligible small biodiesel producer,
the small biodiesel producer credit.'',
(2) in subsection (b), by adding at the end the following
new paragraph:
``(6) Small biodiesel producer credit.--
``(A) In general.--The small biodiesel producer
credit of any eligible small biodiesel producer for any
taxable year is 10 cents for each gallon of qualified
biodiesel production of such producer.
``(B) Qualified biodiesel production.--For purposes
of this paragraph, the term ``qualified biodiesel
production'' means any biodiesel which is produced by
an eligible small biodiesel producer, and which during
the taxable year--
``(i) is sold by such producer to another
person--
``(I) for use by such other person
in the production of a qualified
biodiesel mixture in such other
person's trade or business (other than
casual off-farm production),
``(II) for use by such other person
as a fuel in a trade or business, or
``(III) who sells such biodiesel at
retail to another person and places
such biodiesel in the fuel tank of such
other person, or
``(ii) is used or sold by such producer for
any purpose described in clause (i).
``(C) Limitation.--The qualified biodiesel
production of any producer for any taxable year shall
not exceed 15,000,000 gallons.'', and
(3) by redesignating subsections (f) and (g) as subsections
(g) and (h), respectively, and by inserting after subsection
(e) the following new subsection:
``(f) Definitions and Special Rules for Small Biodiesel Producer
Credit.--For purposes of this section--
``(1) Eligible small biodiesel producer.--
``(A) In general.--The term ``eligible small
biodiesel producer'' means a qualified farmer who, at
all times during the taxable year, has a productive
capacity for biodiesel not in excess of 60,000,000
gallons.
``(B) Qualified farmer.--With respect to a taxable
year, the term `qualified farmer' means an individual--
``(i) who is actively engaged in farming,
``(ii) whose contributions to a farming
operation during the taxable year are at least
commensurate with the individual's claimed
share of the profits or losses of the farming
operation, and
``(iii) whose gross income from farming for
the taxable year is at least 75 percent of the
individual's total gross income from all
sources for the taxable year.
``(2) Special rules.--Rules similar to the rules of
paragraphs (2), (3), (4), (5), and (6) of subsection (e) shall
apply to the small biodiesel producer credit.''.
(b) Effective Date.--The amendments made by this section shall
apply qualified biodiesel production beginning after December 31, 2006,
in taxable years beginning after such date.
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