[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3840 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 3840

 To amend the Internal Revenue Code of 1986 to provide a tax incentive 
to produce ethanol in high-consumption, low-production States, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 5, 2006

  Mr. Schumer introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide a tax incentive 
to produce ethanol in high-consumption, low-production States, and for 
                            other purposes.

    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 ``Ethanol Stimulus Act of 2006''.

SEC. 2. ETHANOL PRODUCTION TAX INCENTIVES IN HIGH-CONSUMPTION, LOW-
              PRODUCTION STATES.

    (a) In General.--Section 40(b)(4) of the Internal Revenue Code of 
1986 (relating to small ethanol producer credit) is amended by adding 
at the end the following new subparagraph:
                    ``(E) Credit for ethanol production in two-two 
                states.--
                            ``(i) In general.--In the case of qualified 
                        ethanol production by any eligible small 
                        ethanol producer in all eligible ethanol 
                        production facilities of such producer--
                                    ``(I) subparagraph (A) shall be 
                                applied by substituting `20 cents' for 
                                `10 cents', and
                                    ``(II) subparagraph (C) shall be 
                                applied by substituting `50,000,000 
                                gallons' for `15,000,000 gallons'.
                            ``(ii) 5-year per facility limitation on 
                        credit amount.--With respect to each eligible 
                        ethanol production facility, the credit 
                        determined under this section by reason of this 
                        subparagraph shall apply to production from 
                        such facility for the period--
                                    ``(I) beginning with the taxable 
                                year during which production from such 
                                facility begins, and
                                    ``(II) ending on the last day of 
                                the fourth taxable year following the 
                                taxable year described in subclause 
                                (I).
                            ``(iii) Eligible ethanol production 
                        facility.--For purposes of this subparagraph, 
                        the term `eligible ethanol production facility' 
                        means any ethanol production facility the 
                        original use of which commences with the 
                        taxpayer and--
                                    ``(I) which is acquired by purchase 
                                (as defined in section 179(d)(2)) by 
                                the taxpayer after August 8, 2005, and 
                                before August 9, 2010, but only if no 
                                written binding contract for the 
                                acquisition was in effect before August 
                                9, 2005,
                                    ``(II) which is acquired by the 
                                taxpayer pursuant to a written binding 
                                contract which was entered into after 
                                August 8, 2005, and before August 9, 
                                2010, or
                                    ``(III) in the case of a taxpayer 
                                constructing property for the 
                                taxpayer's own use, the construction of 
                                which begins after August 8, 2005, and 
                                before August 9, 2010,
                        in a State which is a two-two State on the date 
                        of such purchase under subclause (I), of such 
                        written binding contract under subclause (II), 
                        or the beginning of such construction under 
                        subclause (III).
                            ``(iv) Two-two state.--For purposes of this 
                        subparagraph, the term `two-two State' means 
                        for any period any State (as determined by the 
                        Energy Information Administration) within 
                        which--
                                    ``(I) is consumed more than 2 
                                percent of the aggregate amount of 
                                gasoline consumed in all States during 
                                such period, and
                                    ``(II) is produced less than 2 
                                percent of the aggregate amount of 
                                ethanol produced in all States during 
                                such period.''.
    (b) Eligible Small Ethanol Producer.--Section 40(g)(1) of the 
Internal Revenue Code of 1986 (defining eligible small ethanol 
producer) is amended by inserting ``(150,000,000 gallons in the case of 
such productive capacity in all two-two States (as defined in 
subsection (b)(4)(E)(iv))'' after ``60,000,000 gallons''.
    (c) Conforming Amendment.--Section 40(g)(2) of the Internal Revenue 
Code of 1986 is amended by striking ``For purposes of the 15,000,000 
gallon limitation under subsection (b)(4)(C) and the 60,000,000 gallon 
limitation under paragraph (1)'' and inserting ``For purposes of each 
gallon limitation under subsection (b)(4) and paragraph (1)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to ethanol produced in taxable years ending after the date of the 
enactment of this Act.
                                 <all>