[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1618 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1618

To amend the Internal Revenue Code of 1986 to provide a credit for the 
                  production of a cellulosic biofuel.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 14, 2007

  Mr. Salazar (for himself, Mrs. Lincoln, Mr. Smith, Mr. Allard, Ms. 
Stabenow, Ms. Cantwell, Mr. Craig, Mr. Wyden, Mr. Conrad, Mr. Nelson of 
Nebraska, and Mr. Kerry) 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 credit for the 
                  production of a cellulosic biofuel.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CREDIT FOR PRODUCTION OF CELLULOSIC BIOFUEL.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 30D. CELLULOSIC BIOFUEL PRODUCTION.

    ``(a) General Rule.--There shall be allowed as a credit against the 
tax imposed by this chapter for the taxable year an amount equal to 
$1.28 for each gallon of qualified cellulosic biofuel production.
    ``(b) Qualified Cellulosic Biofuel Production.--For purposes of 
this section, the term `qualified cellulosic biofuel production' means 
any cellulosic biofuel which is produced in the United States by the 
taxpayer and which during the taxable year--
            ``(1) is sold by the taxpayer to another person--
                    ``(A) for use by such other person in the 
                production of a qualified cellulosic biofuel mixture in 
                such other person's trade or business (other than 
                casual off-farm production),
                    ``(B) for use by such other person as a fuel in a 
                trade or business, or
                    ``(C) who sells such cellulosic biofuel at retail 
                to another person and places such cellulosic biofuel in 
                the fuel tank of such other person, or
            ``(2) is used or sold by the taxpayer for any purpose 
        described in paragraph (1).
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Cellulosic biofuel.--The term `cellulosic biofuel' 
        means any liquid transportation fuel derived from any 
        lignocellulosic or hemicellulosic mater (other than food 
        starch) that is available on a renewable or recurring basis.
            ``(2) Qualified cellulosic biofuel mixture.--The term 
        `qualified cellulosic biofuel mixture' means a mixture of 
        cellulosic biofuel and gasoline which--
                    ``(A) is sold by the person producing such mixture 
                to any person for use as a fuel, or
                    ``(B) is used as a fuel by the person producing 
                such mixture.
            ``(3) Cellulosic biofuel not used as a fuel.--If any credit 
        is allowed under subsection (a) and any person does not use 
        such cellulosic biofuel for a purpose described in subsection 
        (b), then there is hereby imposed on such person a tax equal to 
        $1.28 for each gallon of such cellulosic biofuel.
            ``(4) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
            ``(5) Denial of double benefit.--No credit shall be allowed 
        under this section to any taxpayer with respect to any 
        cellulosic biofuel if a credit or payment is allowed with 
        respect to such fuel to such taxpayer under section 40, 40A, 
        6426, or 6427(e).
    ``(d) Limitation Based on Amount of Tax.--The credit allowed under 
subsection (a) for any taxable year shall not exceed the excess of--
            ``(1) the sum of the regular tax liability (as defined in 
        section 26(b)) plus the tax imposed by section 55, over
            ``(2) the sum of the credits allowable under subpart A and 
        sections 27, 30, 30B, and 30C.
    ``(e) Carryforward and Carryback of Unused Credit.--
            ``(1) In general.--If the credit allowable under subsection 
        (a) exceeds the limitation imposed by subsection (d) for such 
        taxable year (hereinafter in this section referred to as the 
        `unused credit year') reduced by the sum of the credits 
        allowable under subpart A, such excess shall be--
                    ``(A) carried back to the taxable year preceding 
                the unused credit year, and
                    ``(B) carried forward to each of the 20 taxable 
                years following the unused credit year.
            ``(2) Transition rule.--The credit under subsection (a) may 
        not be carried to a taxable year beginning before the date of 
        the enactment of this section.
    ``(f) Application of Section.--This section shall apply with 
respect to qualified cellulosic biofuel production--
            ``(1) after the date of the enactment of this section, and
            ``(2) before the date on which the Secretary of Energy 
        certifies that 1,000,000,000 gallons of cellulosic biofuels 
        have been produced in the United States after such date.''.
    (b) Deduction Allowed for Unused Credit.--Section 196(c) of such 
Code is amended by adding at the end the following new subsection:
    ``(d) Deduction Allowed for Cellulosic Biofuel Production Credit.--
            ``(1) In general.--If any portion of the credit allowed 
        under section 30D for any taxable year has not, after the 
        application of section 30D(d), been allowed to the taxpayer as 
        a credit under such section for any taxable year, an amount 
        equal to such credit not so allowed shall be allowed to the 
        taxpayer as a deduction for the first taxable year following 
        the last taxable year for which such credit could, under 
        section 30D(e), have been allowed as a credit.
            ``(2) Taxpayer's dying or ceasing to exist.--If a taxpayer 
        dies or ceases to exist before the first taxable year following 
        the last taxable year for which the credit could, under section 
        30D(e), have been allowed as a credit, the amount described in 
        paragraph (1) (or the proper portion thereof) shall, under 
        regulations prescribed by the Secretary, be allowed to the 
        taxpayer as a deduction for the taxable year in which such 
        death or cessation occurs.''.
    (c) Conforming Amendments.--
            (1)(A) Section 87 of the Internal Revenue Code of 1986 is 
        amended by striking ``and'' at the end of paragraph (1), by 
        striking the period at the end of paragraph (2) and inserting 
        ``, and'', and by adding at the end the following new 
        paragraph:
            ``(3) the cellulosic biofuel production credit determined 
        with respect to the taxpayer under section 30D(a).''.
            (B) The heading of section 87 of such Code is amended by 
        striking ``and biodiesel fuels credits'' and inserting ``, 
        biodiesel fuels, and cellulosic biofuels credits''.
            (C) The item relating to section 87 is the table of 
        sections for part II of subchapter B of chapter 1 of such Code 
        is amended by striking ``and biodiesel fuels credits'' and 
        inserting ``, biodiesel fuels, and cellulosic biofuels 
        credits''.
            (2) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 40A the following new item:

``Sec. 30D. Cellulosic biofuel production.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to fuel produced after the date of the enactment of this Act.
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