[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5142 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 5142

To amend the Internal Revenue Code of 1986 to provide for an investment 
       tax credit for biofuel facilities, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 26, 2010

Ms. Schwartz (for herself, Mr. Schauer, and Mr. Bilbray) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide for an investment 
       tax credit for biofuel facilities, 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 ``Grow a Renewable Energy Economy 
Now--Jumpstart Other Biofuels Act of 2010''.

SEC. 2. ALLOWANCE OF INVESTMENT TAX CREDIT FOR CERTAIN CELLULOSIC AND 
              ALGAE-BASED BIOFUEL FACILITIES.

    (a) In General.--Subsection (a) of section 48 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(6) Election to treat qualified cellulosic and algae-
        based biofuel facility as energy property.--
                    ``(A) In general.--In the case of any qualified 
                property which is part of a qualified cellulosic and 
                algae-based biofuel facility--
                            ``(i) such property shall be treated as 
                        energy property for purposes of this section, 
                        and
                            ``(ii) the energy percentage with respect 
                        to such property shall be 30 percent.
                    ``(B) Denial of production credit.--No credit shall 
                be allowed under section 40 for any taxable year with 
                respect to any qualified investment credit cellulosic 
                and algae-based biofuel facility.
                    ``(C) Qualified investment credit cellulosic and 
                algae-based biofuel facility.--For purposes of this 
                paragraph, the term `qualified cellulosic and algae-
                based biofuel facility' means a facility constructed 
                with the primary purpose of the production of 
                transportation-grade qualified cellulosic biofuel 
                production (as defined in subparagraph (C) of section 
                40(b)(6)) or qualified algae-based biofuel production 
                (as defined in section (F) of such section) if no 
                credit has been allowed under section 40 with respect 
                to such facility and the taxpayer makes an irrevocable 
                election to have this paragraph apply to such facility.
                    ``(D) Termination.--No election may be made under 
                subparagraph (C) after December 31, 2016.''.
    (b) Special Allowance for Cellulosic Biofuel Plant Property.--
            (1) Extension of.--Paragraphs (2)(D) and (5)(B) of section 
        168(l) of such Code are each amended by striking ``January 1, 
        2013'' and inserting ``January 1, 2017''.
            (2) Coordination with credit.--Section 168(l)(8) of such 
        Code is amended by inserting ``or under section 48(a)(6)(C) 
        (relating to election to treat qualified cellulosic and algae-
        based biofuel facility as energy property)'' before the period 
        at the end.
    (c) Conforming Amendment.--Section 48(a)(3) of such Code is amended 
by striking ``section 45'' and inserting ``section 40 or 45''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 3. INCLUSION OF ALGAE-BASED BIOFUEL IN DEFINITION OF CELLULOSIC 
              BIOFUEL.

    (a) Cellulosic Biofuel Producer Credit.--
            (1) General rule.--Paragraph (4) of section 40(a) of the 
        Internal Revenue Code of 1986 is amended by inserting ``and 
        algae-based'' after ``cellulosic''.
            (2) Definitions.--Paragraph (6) of section 40(b) of such 
        Code is amended--
                    (A) by inserting ``and algae-based'' after 
                ``Cellulosic'' in the heading,
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) In general.--The cellulosic and algae-based 
                biofuel producer credit of any taxpayer is an amount 
                equal to the applicable amount for each gallon of--
                            ``(i) qualified cellulosic biofuel 
                        production, and
                            ``(ii) qualified algae-based biofuel 
                        production.'',
                    (C) by redesignating subparagraphs (F), (G), and 
                (H) as subparagraphs (I), (J), and (K), respectively,
                    (D) by inserting ``and algae-based'' after 
                ``cellulosic'' in the heading of subparagraph (I), as 
                so redesignated,
                    (E) by inserting ``or algae-based biofuel, 
                whichever is appropriate,'' after ``cellulosic 
                biofuel'' in subparagraph (J), as so redesignated,
                    (F) by inserting ``and qualified algae-based 
                biofuel production'' after ``qualified cellulosic 
                biofuel production'' in subparagraph (K), as so 
                redesignated, and
                    (G) by inserting after subparagraph (E) the 
                following new subparagraphs:
                    ``(F) Qualified algae-based biofuel production.--
                For purposes of this section, the term `qualified 
                algae-based biofuel production' means any algae-based 
                biofuel which is produced by the taxpayer, and which 
                during the taxable year--
                            ``(i) is sold by the taxpayer to another 
                        person--
                                    ``(I) for use by such other person 
                                in the production of a qualified algae-
                                based biofuel 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 algae-based 
                                biofuel at retail to another person and 
                                places such algae-based biofuel in the 
                                fuel tank of such other person, or
                            ``(ii) is used or sold by the taxpayer for 
                        any purpose described in clause (i).
                The qualified algae-based biofuel production of any 
                taxpayer for any taxable year shall not include any 
                alcohol which is purchased by the taxpayer and with 
                respect to which such producer increases the proof of 
                the alcohol by additional distillation.
                    ``(G) Qualified algae-based biofuel mixture.--For 
                purposes of this paragraph, the term `qualified algae-
                based biofuel mixture' means a mixture of algae-based 
                biofuel and gasoline or of algae-based biofuel and a 
                special fuel which--
                            ``(i) is sold by the person producing such 
                        mixture to any person for use as a fuel, or
                            ``(ii) is used as a fuel by the person 
                        producing such mixture.
                    ``(H) Algae-based biofuel.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `algae-based 
                        biofuel' means any liquid fuel, including 
                        gasoline, diesel, aviation fuel, and ethanol, 
                        which--
                                    ``(I) is produced from the biomass 
                                of algal organisms, and
                                    ``(II) meets the registration 
                                requirements for fuels and fuel 
                                additives established by the 
                                Environmental Protection Agency under 
                                section 211 of the Clean Air Act (42 
                                U.S.C. 7545).
                            ``(ii) Algal organism.--The term `algal 
                        organism' means a single- or multi-cellular 
                        organism which is primarily aquatic and 
                        classified as a non-vascular plant, including 
                        microalgae, blue-green algae (cyanobacteria), 
                        and macroalgae (seaweeds).
                            ``(iii) Exclusion of low-proof alcohol.--
                        Such term shall not include any alcohol with a 
                        proof of less than 150. The determination of 
                        the proof of any alcohol shall be made without 
                        regard to any added denaturants.''.
            (3) Conforming amendments.--
                    (A) Subparagraph (D) of section 40(d)(3) of such 
                Code is amended--
                            (i) by inserting ``and algae-based'' after 
                        ``cellulosic'' in the heading,
                            (ii) by inserting ``or (b)(6)(F)'' after 
                        ``(b)(6)(C)'' in clause (ii), and
                            (iii) by inserting ``or algae-based'' after 
                        ``such cellulosic''.
                    (B) Paragraph (6) of section 40(d) of such Code is 
                amended--
                            (i) by inserting ``and algae-based'' after 
                        ``cellulosic'' in the heading, and
                            (ii) by striking the first sentence and 
                        inserting ``No cellulosic and algae-based 
                        biofuel producer credit shall be determined 
                        under subsection (a) with respect to any 
                        cellulosic or algae-based biofuel unless such 
                        cellulosic or algae-based biofuel is produced 
                        in the United States and used as a fuel in the 
                        United States.''.
                    (C) Paragraph (3) of section 40(e) of such Code is 
                amended by inserting ``and algae-based'' after 
                ``cellulosic'' in the heading.
                    (D) Paragraph (1) of section 4101(a) of such Code 
                is amended--
                            (i) by inserting ``or algae-based'' after 
                        ``cellulosic'', and
                            (ii) by inserting ``and 40(b)(6)(H), 
                        respectively'' after ``section 40(b)(6)(E)''.
    (b) Special Allowance for Cellulosic Biofuel Plant Property.--
Subsection (l) of section 168 of such Code is amended--
            (1) by inserting ``and Algae-based'' after ``Cellulosic'' 
        in the heading,
            (2) by inserting ``and any qualified algae-based biofuel 
        plant property'' after ``qualified cellulosic biofuel plant 
        property'' in paragraph (1),
            (3) by redesignating paragraphs (4) through (8) as 
        paragraphs (6) through (10), respectively,
            (4) by inserting ``or qualified algae-based biofuel plant 
        property'' after ``cellulosic biofuel plant property'' in 
        paragraph (7)(C), as so redesignated,
            (5) by striking ``with respect to'' and all that follows in 
        paragraph (9), as so redesignated, and inserting ``with respect 
        to any qualified cellulosic biofuel plant property and any 
        qualified algae-based biofuel plant property which ceases to be 
        such qualified property.'',
            (6) by inserting ``or qualified algae-based biofuel plant 
        property'' after ``cellulosic biofuel plant property'' in 
        paragraph (10), as so redesignated, and
            (7) by inserting after paragraph (3) the following new 
        paragraphs:
            ``(4) Qualified algae-based biofuel plant property.--The 
        term `qualified algae-based biofuel plant property' means 
        property of a character subject to the allowance for 
        depreciation--
                    ``(A) which is used in the United States solely to 
                produce algae-based biofuel,
                    ``(B) the original use of which commences with the 
                taxpayer after the date of the enactment of this 
                paragraph,
                    ``(C) which is acquired by the taxpayer by purchase 
                (as defined in section 179(d)) after the date of the 
                enactment of this paragraph, but only if no written 
                binding contract for the acquisition was in effect on 
                or before such date, and
                    ``(D) which is placed in service by the taxpayer 
                before January 1, 2017.
            ``(5) Algae-based biofuel.--
                    ``(A) In general.--The term `algae-based biofuel' 
                means any liquid fuel which is produced from the 
                biomass of algal organisms.
                    ``(B) Algal organism.--The term `algal organism' 
                means a single- or multi-cellular organism which is 
                primarily aquatic and classified as a non-vascular 
                plant, including microalgae, blue-green algae 
                (cyanobacteria), and macroalgae (seaweeds).''.
    (c) Effective Dates.--
            (1) Cellulosic biofuel producer credit.--The amendments 
        made by subsection (a) shall apply to fuel produced after the 
        date of the enactment of this Act.
            (2) Special allowance for cellulosic biofuel plant 
        property.--The amendments made by subsection (b) shall apply to 
        property purchased and placed in service after the date of the 
        enactment of this Act.

SEC. 4. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC AND ALGAE-BASED 
              BIOFUEL PRODUCER CREDIT.

    (a) In General.--Paragraph (6) of section 40(b) of the Internal 
Revenue Code of 1986 is amended by redesignating subparagraphs (I), 
(J), and (K), as designated by section 3(a)(2)(C) of this Act, as 
subparagraphs (J), (K), and (L), respectively, and by inserting after 
subparagraph (H) the following new subparagraph:
                    ``(I) Exclusion of certain processed fuels with a 
                high acid content.--The terms `cellulosic biofuel' and 
                `algae-based biofuel' shall not include any processed 
                fuel with an acid number greater than 25. For purposes 
                of the preceding sentence, the term `processed fuel' 
                means any fuel other than a fuel--
                            ``(i) more than 4 percent of which 
                        (determined by weight) is any combination of 
                        water and sediment, or
                            ``(ii) the ash content of which is more 
                        than 1 percent (determined by weight).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to fuels sold or used on or after the date of the enactment of this 
Act.

SEC. 5. EXTENSION OF CELLULOSIC AND ALGAE-BASED BIOFUEL PRODUCER 
              CREDIT.

    Subparagraph (L) of section 40(b)(6) of the Internal Revenue Code 
of 1986, as amended by sections 3 and 4 of this Act, is amended by 
striking ``January 1, 2013'' and inserting ``January 1, 2017''.

SEC. 6. ELECTIVE PAYMENT FOR CELLULOSIC AND ALGAE-BASED BIOFUEL 
              FACILITY PROPERTY.

    (a) In General.--Chapter 65 of the Internal Revenue Code of 1986 
(relating to abatements, credits, and refunds) is amended by adding at 
the end the following new subchapter:

               ``Subchapter C--Direct Payment Provisions

``Sec. 6451. Elective payment for cellulosic and algae-based biofuel 
                            facility property.

``SEC. 6451. ELECTIVE PAYMENT FOR CELLULOSIC AND ALGAE-BASED BIOFUEL 
              FACILITY PROPERTY.

    ``(a) In General.--Any person making an election under this section 
with respect to any specified cellulosic and algae-based biofuel 
facility property originally placed in service by such person during 
the taxable year shall be treated as making a payment, against the tax 
imposed by subtitle A for the taxable year equal to 30 percent of the 
basis of such property. Such payment shall be treated as made on the 
later of the due date of the return of such tax or the date on which 
such return is filed.
    ``(b) Specified Cellulosic and Algae-Based Biofuel Facility 
Property.--For purposes of this section, the term `specified cellulosic 
and algae-based biofuel facility property' means a qualified cellulosic 
and algae-based biofuel facility (as defined by section 48(a)(6)(C) 
which--
            ``(1) is property of a character subject to an allowance 
        for depreciation, and
            ``(2) is originally placed in service before January 1, 
        2017.
    ``(c) Special Rules for Certain Non-Taxpayers.--
            ``(1) Denial of payment.--Subsection (a) shall not apply 
        with respect to any property originally placed in service by--
                    ``(A) any governmental entity,
                    ``(B) any organization described in section 501(c) 
                or 401(a) and exempt from tax under section 501(a), or
                    ``(C) any entity referred to in paragraph (4) of 
                section 54(j), or
                    ``(D) any partnership or other pass-thru entity any 
                partner (or other holder of an equity or profits 
                interest) of which is described in paragraph (1), (2), 
                or (3).
            ``(2) Exception for property used in unrelated trade or 
        business.--Paragraph (1) shall not apply with respect to any 
        property originally placed in service by an entity described in 
        section 511(a)(2) if substantially all of the income derived 
        from such property by such entity is unrelated business taxable 
        income (as defined in section 512).
            ``(3) Special rules for partnerships and s corporations.--
        In the case of property originally placed in service by a 
        partnership or an S corporation--
                    ``(A) the election under subsection (a) may be made 
                only by such partnership or S corporation,
                    ``(B) such partnership or S corporation shall be 
                treated as making the payment referred to in subsection 
                (a) only to the extent of the proportionate share of 
                such partnership or S corporation as is owned by 
                persons who would be treated as making such payment if 
                the property were originally placed in service by such 
                persons, and
                    ``(C) the return required to be made by such 
                partnership or S corporation under section 6031 or 6037 
                (as the case may be) shall be treated as a return of 
                tax for purposes of subsection (a).
        For purposes of subparagraph (B), rules similar to the rules of 
        section 168(h)(6) (other than subparagraph (F) thereof) shall 
        apply.
    ``(d) Coordination With Production and Investment Credits.--In the 
case of any property with respect to which an election is made under 
this section--
            ``(1) Denial of production and investment credits.--No 
        credit shall be determined under section 40 or 48 with respect 
        to such property for the taxable year in which such property is 
        originally placed in service or any subsequent taxable year.
            ``(2) Reduction of payment by progress expenditures already 
        taken into account.--The amount of the payment treated as made 
        under subsection (a) with respect to such property shall be 
        reduced by the aggregate amount of credits determined under 
        section 48 with respect to such property for all taxable years 
        preceding the taxable year in which such property is originally 
        placed in service.
    ``(e) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Other definitions.--Terms used in this section which 
        are also used in section 48 shall have the same meaning for 
        purposes of this section as when used in such section.
            ``(2) Application of recapture rules, etc.--Except as 
        otherwise provided by the Secretary--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, rules similar to the rules of section 
                50 shall apply.
                    ``(B) Exception to limitation on real estate 
                investment trusts, etc.--Paragraph (1) of section 50(d) 
                shall not apply.
            ``(3) Provision of information.--A person shall not be 
        treated as having elected the application of this section 
        unless the taxpayer provides such information as the Secretary 
        (in consultation with the Secretary of Energy) may require for 
        purposes of verifying the proper amount to be treated as a 
        payment under subsection (a) and evaluating the effectiveness 
        of this section.
            ``(4) Exclusion from gross income.--Any credit or refund 
        allowed or made by reason of this section shall not be 
        includible in gross income or alternative minimum taxable 
        income.''.
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 6211(b)(4)(A) of such Code 
        is amended by inserting ``and subchapter C of chapter 65 
        (including any payment treated as made under such subchapter)'' 
        after ``6431''.
            (2) Subparagraph (B) of section 6425(c)(1) of such Code is 
        amended--
                    (A) by striking ``the credits'' and inserting ``the 
                sum of--
                            ``(i) the credits'',
                    (B) by striking the period at the end of clause (i) 
                thereof (as amended by this paragraph) and inserting 
                ``, plus'', and
                    (C) by adding at the end the following new clause:
                            ``(ii) the payments treated as made under 
                        subchapter C of chapter 65.''.
            (3) Paragraph (4) of section 6654(f) of such Code is 
        amended--
                    (A) by striking ``the credits'' and inserting ``the 
                sum of--
                    ``(A) the credits'',
                    (B) by striking the period at the end of 
                subparagraph (A) thereof (as amended by this paragraph) 
                and inserting ``, and'', and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(B) the payments treated as made under subchapter 
                C of chapter 65.''.
            (4) Subparagraph (B) of section 6655(g)(1) of such Code is 
        amended--
                    (A) by striking ``the credits'' and inserting ``the 
                sum of--
                            ``(i) the credits'',
                    (B) by striking the period at the end of clause (i) 
                thereof (as amended by this paragraph) and inserting 
                ``, plus'', and
                    (C) by adding at the end the following new clause:
                            ``(ii) the payments treated as made under 
                        subchapter C of chapter 65.''.
            (5) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``, or from the provisions 
        of subchapter C of chapter 65 of such Code'' before the period 
        at the end.
            (6) The table of subchapters for chapter 65 of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following new item:

             ``subchapter c. direct payment provisions.''.

    (c) Effective Date.--The amendments made by this section shall 
apply to property originally placed in service after the date of the 
enactment of this Act.
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