Investment tax credit for qualified advanced biofuel production property

(a)

In general

Subparagraph (A) of section 48(a)(3) of the Internal Revenue Code of 1986 (defining energy property) is amended by striking or at the end of clause (vi), by inserting or at the end of clause (vii), and by inserting after clause (vii) the following new clause:

(viii)qualified advanced biofuel production property,

(b)

30 percent credit

Clause (i) of section 48(a)(2)(A) of the Internal Revenue Code of 1986 is amended by striking and at the end of subclause (III) and by inserting after subclause (IV) the following new subclause:

(V)qualified advanced biofuel production property, and

(c)

Definitions

Subsection (c) of section 48 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(5)

Qualified advanced biofuel production property

(A)

In general

The term qualified advanced biofuel production property means property used in an advanced biofuel project. (B)

Advanced biofuel project

(i)

In general

The term advanced biofuel project means a project certified by the Secretary of Energy as meeting the following requirements: (I)The sole and exclusive purpose of the project is to produce advanced biofuels for sale to unrelated persons (within the meaning of section 45(e)(4)). (II)The advanced biofuels produced will meet the requirements of section 211(o)(1)(B) of the Clean Air Act (42 U.S.C. 7545(o)(1)(B)). (III)The project will rely primarily on new or significantly improved technologies as compared to commercial technologies currently in service in the United States and used to produce advanced biofuels. (IV)Such other requirements as the Secretary of Energy by rule or regulation deems necessary to carry out the objectives of this section, including encouraging private investment in projects which provide the greatest net impact in avoiding or reducing air pollutants or anthropogenic emissions of greenhouse gases, have the greatest readiness for commercial employment, replication, and further commercial use in the United States, and will introduce new technologies and fuel production processes in the commercial market. (ii)

Rule or regulation

Rules or regulations issued by the Secretary of Energy under this subparagraph shall be issued not later than 120 days after the date of the enactment of this section. (C)

Termination

The term qualified advanced biofuel production property shall not include any property placed in service after December 31, 2014.

(d)

Grants in lieu of tax credit

(1)

In general

Section 1603(d) of the American Recovery and Reinvestment Tax Act of 2009 is amended by inserting after paragraph (8) the following new paragraph:

(9)

Qualified advanced biofuel production property

Any property described in clause (viii) of section 48(a)(3)(A).

(2)

Applicable percentage

Section 1603(b)(2)(A) of such Act is amended by inserting and (9) after through (4). (3)

Reinvestment of grant

Section 1603 of such Act is amended by redesignating subsections (i) and (j) as subsections (j) and (k), respectively, and by inserting after subsection (h) the following new subsection:

(i)

Reinvestment of certain grants

No grant for specified energy property described in subsection (d)(9) shall be made under subsection (a) unless the grant applicant certifies in the application that such payment shall be reinvested in such property not later than 12 months after the date of such payment.

(e)

Grant includible in income

Section 48(d)(3) of the Internal Revenue Code of 1986 is amended by striking Any such grant and inserting Except for a grant for specified energy property described in subsection (d)(9) of such section 1603, any such grant. (f)

Effective date

The amendments made by this section shall apply to periods after the date of the enactment of this Act, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).