1.Renewable liquid fuels excise
tax credit
(a)Subchapter B of chapter 65 of the Internal Revenue Code
of 1986 (relating to rules of special application) is amended by inserting
after section 6426 the following new section:
6426A.Credit for
renewable liquid fuels
(a)There shall be allowed as a credit against the tax
imposed by section 4081 an amount equal to the renewable liquid mixture
credit.
(b)Renewable
liquid mixture credit
(1)For purposes of this section, the renewable liquid
mixture credit is the product of the applicable amount and the number of
gallons of renewable liquid used by the taxpayer in producing any renewable
liquid mixture for sale or use in a trade or business of the taxpayer.
(2)For purposes of this section, the applicable amount is
$1.00.
(3)For purposes of this section, the term
renewable liquid mixture means a mixture of renewable liquid and
taxable fuel which—
(A)is sold by the
taxpayer producing such mixture to any person for use as a fuel or feedstock,
or
(B)is used as a fuel
or feedstock by the taxpayer producing such mixture.
For
purposes of subparagraph (A), a mixture produced by any person at a refinery
prior to a taxable event which includes renewable liquid shall be treated as
sold at the time of its removal from the refinery (and only at such time) or
sold to another person for use as a fuel or feedstock.(c)For purposes of this subsection:
(1)The term renewable liquid means liquid
hydrocarbons derived from waste and byproduct streams including: agricultural
byproducts and wastes, aqua-culture products produced from waste streams, food
processing plant byproducts, municipal solid and semi-solid waste streams,
industrial waste streams, automotive scrap waste streams, and as further
provided by regulations.
(2)The term taxable fuel has the meaning given
such term by section 4083(a)(1).
(3)The
term feedstock means any precursor material subject to further
processing to make a petrochemical, solvent, or other hydrocarbon which has the
effect of displacing conventional crude oil, or products produced from
conventional crude oil.
(4)Any term used in this section which is also used in
section 40B shall have the meaning given such term by section 40B.
(d)Certification
for renewable liquid fuelNo credit shall be allowed under this
section unless the taxpayer obtains a certification (in such form and manner as
prescribed by the Secretary) from the producer of the renewable liquid fuel,
which identifies the product produced.
(e)Mixture not
used as fuel, etc
(1)If—
(A)any credit was
determined under this section with respect to renewable liquid used in the
production of any renewable liquid mixture, and
(B)any
person—
(i)separates the
renewable liquid from the mixture, or
(ii)without
separation, uses the mixture other than as a fuel,
then
there is hereby imposed on such person a tax equal to the product of the
applicable amount and the number of gallons of such renewable liquid.(2)All provisions of law, including penalties, shall, insofar
as applicable and not inconsistent with this section, apply in respect of any
tax imposed under paragraph (1) as if such tax were imposed by section 4081 and
not by this section.
(f)Coordination
with exemption from excise taxRules similar to the rules under
section 40(c) shall apply for purposes of this section.
(g)This
section shall not apply to any sale, use, or removal for any period after
December 31,
2010.
.
(b)Section 4101(a)(1) of the Internal Revenue Code of
1986 (relating to registration) is amended by inserting and every person
producing or importing renewable liquid as defined in section
6426A(c)(1)
before shall register with the
Secretary
.
(c)Section
6427 of the Internal Revenue Code of 1986 is amended by inserting after
subsection (f) the following new subsection:
(g)Renewable
liquid used to produce mixture
(1)Used to produce
a mixtureIf any person produces a mixture described in section
6426A in such person’s trade or business, the Secretary shall pay (without
interest) to such person an amount equal to the renewable liquid mixture credit
with respect to such mixture.
(2)Coordination
with other repayment provisionsNo amount shall be payable under
paragraph (1) with respect to any mixture with respect to which an amount is
allowed as a credit under section 6426A.
(3)This
subsection shall not apply with respect to any renewable liquid fuel mixture
(as defined in section 6426A(b)(3) sold or used after December 31,
2010).
.
(d)The last sentence of section 9503(b)(1) is amended by
striking section 6426
and inserting sections 6426 and
6426A
.
(e)The table of sections for subchapter B of chapter 65 of
the Internal Revenue Code of 1986 is amended by inserting after the item
relating to section 6426 the following new item:
Sec. 6426A. Credit for renewable liquid
fuels.
.
(f)
(1)Except as otherwise provided in this subsection, the
amendments made by this section shall apply to fuel sold or used after December
31, 2005.
(2)The amendment made by subsection (b) shall take
effect on January 1, 2006.
2.Renewable liquid
income tax credit
(a)Subpart D of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to business related credits) is amended
by inserting after section 40A the following new section:
40B.Renewable
liquid used as fuel
(a)For purposes of section 38, the renewable liquid credit
determined under this section for the taxable year is an amount equal to the
sum of—
(1)the renewable
liquid mixture credit, plus
(2)the renewable
liquid credit.
(b)Definition of
renewable liquid mixture credit and renewable liquid creditFor
purposes of this section—
(1)Renewable
liquid mixture credit
(A)The renewable liquid mixture credit of any taxpayer for
any taxable year is $1.00 for each gallon of renewable liquid fuel used by the
taxpayer in the production of a qualified renewable liquid fuel mixture.
(B)Qualified
renewable liquid mixtureThe term qualified renewable
liquid mixture means a mixture of renewable liquid and taxable fuel (as
defined in section 4083(a)(1)), which—
(i)is sold by the
taxpayer producing such a mixture to any person for use as a fuel or feedstock,
or
(ii)is used as a
fuel or feedstock by the taxpayer producing such mixture.
(C)Sale or use
must be in trade or business, etcRenewable liquid used in the
production of a qualified renewable liquid fuel mixture shall be taken into
account—
(i)only if the sale
or use described in subparagraph (B) is in a trade or business of the taxpayer,
and
(ii)for the taxable
year in which such sale or use occurs.
(2)
(A)The renewable liquid credit of any taxpayer for any
taxable year is $1.00 for each gallon of renewable liquid which is not in a
mixture with taxable fuel and which during the taxable year—
(i)is used by the
taxpayer as a fuel or feedstock in a trade or business, or
(ii)is sold by the
taxpayer at retail to a person and placed in the fuel tank of such person’s
vehicle.
(B)User credit not
to apply to renewable liquid sold at retailNo credit shall be
allowed under subparagraph (A)(i) with respect to any renewable liquid which
was sold in a retail sale described in subparagraph (A)(ii).
(c)Certification
for renewable liquidNo credit shall be allowed under this
section unless the taxpayer obtains a certification (in such form and manner as
prescribed by the Secretary) from the producer or importer of the renewable
liquid fuel which identifies the product produced and percentage of renewable
liquid fuel in the product.
(d)Coordination
with credit against excise taxThe amount of the credit
determined under this section with respect to any renewable liquid fuel shall
be properly reduced to take into account any benefit provided with respect to
such renewable liquid fuel solely by reason of the application of section 6426A
or 6427(g).
(e)Definitions and
special rulesFor purposes of this section, the term
renewable liquid means liquid hydrocarbons derived from waste and
byproduct streams including: agricultural byproducts and wastes, agriculture
materials produced from waste streams, food processing plant byproducts,
municipal solid and semi-solid waste streams, industrial waste streams,
automotive scrap waste streams, as further provided by regulations.
(f)Mixture or
renewable liquid not used as a fuel, etc
(1)If—
(A)any credit was
determined under this section with respect to renewable liquid used in the
production of any qualified renewable liquid mixture, and
(B)any
person—
(i)separates the
renewable liquid from the mixture, or
(ii)without
separation, uses the mixture other than as a fuel,
then there is
hereby imposed on such person a tax equal to the product of the rate applicable
under subsection (b)(1)(A) and the number of gallons of such renewable liquid
in such mixture.(2)If—
(A)any credit was
determined under this section with respect to the retail sale of any renewable
liquid, and
(B)any person mixes
such renewable liquid or uses such renewable liquid other than as a fuel, then
there is hereby imposed on such person a tax equal to the product of the rate
applicable under subsection (b)(2)(A) and the number of gallons of such
renewable liquid.
(3)All provisions of law, including penalties, shall, insofar
as applicable and not inconsistent with this section, apply in respect of any
tax imposed under subparagraph (A) or (B) as if such tax were imposed by
section 4081 and not by this chapter.
(g)Pass-Thru in
the case of estates and trustsUnder regulations prescribed by
the Secretary, rules similar to the rules of subsection (d) of section 52 shall
apply.
(h)This
section shall not apply to any sale or use after December 31,
2010.
.
(b)Credit treated
as part of general business creditSection 38(b) of the Internal
Revenue Code of 1986 (relating to current year business credit), is amended by
striking plus
at the end of paragraph (18), by striking the
period at the end of paragraph (17), and inserting , plus
, and
by inserting after paragraph (19) the following new paragraph:
(20)The renewable
liquid credit determined under section
40B.
.
(c)The table of sections for subpart D of part IV of
subchapter A of chapter I of the Internal Revenue Code of 1986 is amended by
inserting after the item relating to section 40A the following new item:
Sec. 40B. Renewable liquid used as
fuel.
.
(d)The amendments made by this section shall apply to fuel
produced, and sold as used, after December 31, 2005.