[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1250 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1250

To amend the Internal Revenue Code of 1986 to expand the definition of 
 cellulosic biofuel to include algae-based biofuel for purposes of the 
   cellulosic biofuel producer credit and the special allowance for 
                   cellulosic biofuel plant property.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 11, 2009

   Mr. Nelson of Florida (for himself, Mr. Crapo, Mr. Bingaman, Mr. 
  Bennet, Mr. Martinez, Mr. Cardin, and Mr. Brownback) 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 expand the definition of 
 cellulosic biofuel to include algae-based biofuel for purposes of the 
   cellulosic biofuel producer credit and the special allowance for 
                   cellulosic biofuel plant property.

    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 ``Algae-based Renewable Fuel Promotion 
Act of 2009''.

SEC. 2. 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 the Internal Revenue Code of 1986 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 December 31, 2008,
                    ``(C) which is acquired by the taxpayer by purchase 
                (as defined in section 179(d)) after December 31, 2008, 
                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, 2013.
            ``(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 
        December 31, 2008.
            (2) Special allowance for cellulosic biofuel plant 
        property.--The amendments made by subsection (b) shall apply to 
        property purchased and placed in service after December 31, 
        2008.
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