[Congressional Record Volume 149, Number 116 (Thursday, July 31, 2003)]
[Senate]
[Pages S10680-S10683]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Baucus, Mr. Frist, Mr. Daschle, 
        Mr. Domenici, Mr. Bingaman, Mr. Inhofe, Mr. Jeffords, Mr. 
        Thomas, Mr. Voinovich, Mr. Conrad, Mrs. Lincoln, Mr. Coleman, 
        Mr. Dorgan, Mr. Bond, Mr. Harkin, Mr. Dayton, Mr. Durbin, Mr. 
        Talent, Mr. Nelson of Nebraska, and Mr. Brownback):
  S. 1548. A bill to amend the Internal Revenue Code of 1986 to provide 
incentives for the production of renewable fuels and to simplify the 
administration of the Highway Trust Fund fuel excise taxes, and for 
other purposes; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, as Members of the this Senate are well 
aware, I have worked for many years on the development of renewable 
fuels in the marketplace. Twenty-five years ago we created an alcohol 
fuels tax incentive to promote the use of ethanol. Today, I am 
introducing legislation that will simplify the excise tax collection 
system for all transportation and renewable fuels.
  This legislation reforms the alcohol fuels tax credit and creates a 
new ``Volumetric Ethanol Excise Tax Credit'' (VEETC). In addition to 
streamlining the alcohol fuels tax credit, this legislation creates a 
new tax credit for biodiesel.
  Under the VEETC we accomplish three objectives: First, improve the 
tax collection system for renewable fuels; second, increase the revenue 
source for the Highway Trust Fund.
  This is because the full amount of user excise taxes levied will be 
collected and remitted to the Highway Trust Fund (HTF). In simplifying 
the tax collection system, all user excise taxes levied on both 
gasoline and ethanol blended fuels would be collected at 18.4 cents per 
gallon; and all excise taxes levied on diesel and biodiesel blended 
fuels would be collected at 24.4 cents per gallon.
  On average, the proposal would generate more than $2 billion per year 
in additional HTF revenue, which would improve the ability of the 
federal government to address the nation's transportation 
infrastructure needs; and third, we will enhance the delivery of 
renewable fuels in the marketplace.
  The federal government's tax collection system will work in concert 
with the petroleum industry's and independent terminal's fuel delivery 
system.
  The Grassley/Baucus amendment provides tremendous new flexibility to 
gasoline refiners, marketers, and ethanol producers.
  It eliminates the restrictive blend levels, 5.7 percent, 7.7 percent 
and 10 percent dictated by the Tax Code to reflect obsolete Clean Air 
Act requirements, providing significant flexibility to oil companies to 
blend as much or as little ethanol or biodiesel to meet their octane or 
volume needs.
  It streamlines the tax collection system to avoid the potential for 
fraud while accelerating the refund mechanism.
  It provides new market opportunities for ethanol and biodiesel in 
off-road uses, E-85 and ETBE, and, of course, it resolves a 
longstanding issue with regard to the Highway Trust Fund.
  The ``Volumetric Ethanol Excise Tax Credit Act of 2003'' is a 
forward-thinking piece of legislation that deserves universal support 
and it will address a number of tax issues that have created roadblocks 
for the renewable industry for a number of years.
  Specifically, the tax amendment will do the following: eliminate the 
negative impact of the ethanol tax incentive on the Highway Trust Fund; 
eliminate the waste, fraud and abuse of the excise tax collection 
system, which means that 18.4 cents per gallon of each gallon of 
ethanol-blend fuel will be remitted to the U.S. Treasury; streamline 
the delivery of renewable fuels to petroleum blenders at the terminal 
rack because fuel mixtures will not be based on the Clean Air Act 
requirements of 5.7, 7.7 or 10 percent blends--the tax credit is 
allowed for any blend of ethanol and gasoline; streamline the tax 
refund system for below the rack blenders to allow a tax refund of 52 
cents per gallon on each gallon of ethanol blended with gasoline to be 
paid within 20 days of blending gasoline with ethanol; Eliminate the 
need of the alcohol fuels income tax credit that is subject to the 
alternative minimum tax; any taxpayer eligible for the alcohol fuels 
tax credit will be able to use the volume ethanol excise tax credit 
system, which means they will be able to file for a refund for every 
gallon of ethanol used in the marketplace without regard to the income 
of the taxpayer or whether the ethanol is used in a taxed fuel or tax 
exempt fuel.

  Create a new tax credit for biodiesel--$1.00 per gallon for biodiesel 
made from virgin oils derived from agricultural products and animal 
fats; and $.50 per gallon for biodiesel made from agricultural products 
and animal fats.

  Allow the credit to be claimed in both taxable and nontaxable 
markets; tax exempt fleet fuel programs; off road diesel markets (died 
diesel).
  Streamline the use of biodiesel at the terminal rack--the tax 
structure and credit will encourage petroleum blenders to blend 
biodiesel as far upstream as possible, which under the RFS and 
Minnesota's 2 percent volume requirement will allow more biodiesel to 
be used in the marketplace.
  Streamline the tax refund system for below the rack blenders to allow 
a tax refund of the biodiesel tax credit on each gallon of biodiesel 
blended with diesel, dyed and undyed, to be paid within 20 days of 
blending.
  The alternative minimum tax (AMT) will not be an issue for biodiesel; 
any taxpayer eligible for the biodiesel tax credit will be able use the 
volume biodiesel excise tax credit system, which means they will be 
able to file for a refund for every gallon of biodiesel used in the 
marketplace regard to the income of the taxpayer or whether the ethanol 
is used in a taxed fuel or tax exempt fuel.

[[Page S10681]]

  No affect on the Highway Trust Fund--the biodiesel tax credit will be 
paid for out of the ``General fund'' not the ``Highway Trust Fund.''
  Eliminate the E85 AMT issue: any taxpayer eligible for the alcohol 
fuels tax credit will be able use the volume ethanol excise tax credit 
system, which means they will be able to file for a refund for every 
gallon of ethanol used in the marketplace without regard to the income 
of the taxpayer or whether the ethanol is used in a taxed fuel or tax 
exempt fuel.
  Allow the alcohol fuels tax credit to be claimed in both taxable and 
nontaxable markets;
  Streamline the tax refund system for below the rack blenders to allow 
a tax refund of the alcohol fuels credit on each gallon of ethanol 
blended with gasoline to be paid within 20 days of blending.
  I feel strongly about the legislation because it eliminates the tax 
infrastructure, and fuel delivery impediments that have been 
problematic throughout the history of the renewable duels industry and 
encourage you to join us in working to enact this legislation during 
this Congress.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1548

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

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Volumetric 
     Ethanol Excise Tax Credit (VEETC) Act of 2003''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.

     SEC. 2. INCENTIVES FOR BIODIESEL.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits), as amended 
     by this Act, is amended by inserting after section 40A the 
     following new section:

     ``SEC. 40B. BIODIESEL USED AS FUEL.

       ``(a) General Rule.--For purposes of section 38, the 
     biodiesel fuels credit determined under this section for the 
     taxable year is an amount equal to the sum of--
       ``(1) the biodiesel mixture credit, plus
       ``(2) the biodiesel credit.
       ``(b) Definition of Biodiesel Mixture Credit and Biodiesel 
     Credit.--For purposes of this section--
       ``(1) Biodiesel mixture credit.--
       ``(A) In general.--The biodiesel mixture credit of any 
     taxpayer for any taxable year is 50 cents for each gallon of 
     biodiesel used by the taxpayer in the production of a 
     qualified biodiesel mixture.
       ``(B) Qualified biodiesel mixture.--The term `qualified 
     biodiesel mixture' means a mixture of biodiesel and diesel 
     fuel which--
       ``(i) is sold by the taxpayer producing such mixture to any 
     person for use as a fuel, or
       ``(ii) is used as a fuel by the taxpayer producing such 
     mixture.
       ``(C) Sale or use must be in trade or business, etc.--
     Biodiesel used in the production of a qualified biodiesel 
     mixture shall be taken into account--
       ``(i) only if the sale or use described in subparagraph (B) 
     is in a trade or business of the taxpayer, and
       ``(ii) for the taxable year in which such sale or use 
     occurs.
       ``(D) Casual off-farm production not eligible.--No credit 
     shall be allowed under this section with respect to any 
     casual off-farm production of a qualified biodiesel mixture.
       ``(2) Biodiesel credit.--
       ``(A) In general.--The biodiesel credit of any taxpayer for 
     any taxable year is 50 cents for each gallon of biodiesel 
     which is not in a mixture with diesel fuel and which during 
     the taxable year--
       ``(i) is used by the taxpayer as a fuel in a trade or 
     business, or
       ``(ii) is sold by the taxpayer at retail to a person and 
     placed in the fuel tank of such person's vehicle.
       ``(B) User credit not to apply to biodiesel sold at 
     retail.--No credit shall be allowed under subparagraph (A)(i) 
     with respect to any biodiesel which was sold in a retail sale 
     described in subparagraph (A)(ii).
       ``(3) Credit for agri-biodiesel.--
       ``(A) In general.--Subject to subparagraph (B), in the case 
     of any biodiesel which is agri-biodiesel, paragraphs (1)(A) 
     and (2)(A) shall be applied by substituting `$1.00' for `50 
     cents'.
       ``(B) Certification for agri-biodiesel.--Subparagraph (A) 
     shall apply only if the taxpayer described in paragraph 
     (1)(A) or (2)(A) obtains a certification (in such form and 
     manner as prescribed by the Secretary) from the producer of 
     the agri-biodiesel which identifies the product produced.
       ``(c) Coordination With Credit Against Excise Tax.--The 
     amount of the credit determined under this section with 
     respect to any agri-biodiesel shall, under regulations 
     prescribed by the Secretary, be properly reduced to take into 
     account any benefit provided with respect to such agri-
     biodiesel solely by reason of the application of section 6426 
     or 6427(e).
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Biodiesel.--The term `biodiesel' means the monoalkyl 
     esters of long chain fatty acids derived from plant or animal 
     matter for use in diesel-powered engines which meet--
       ``(A) 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), and
       ``(B) the requirements of the American Society of Testing 
     and Materials D6751.
       ``(2) Agri-biodiesel.--The term `agri-biodiesel' means 
     biodiesel derived solely from virgin oils. Such term shall 
     include esters derived from vegetable oils from corn, 
     soybeans, sunflower seeds, cottonseeds, canola, crambe, 
     rapeseeds, safflowers, flaxseeds, rice bran, and mustard 
     seeds, and from animal fats.
       ``(3) Biodiesel mixture not used as a fuel, etc.--
       ``(A) Imposition of tax.--If--
       ``(i) any credit was determined under this section with 
     respect to biodiesel used in the production of any qualified 
     biodiesel mixture, and
       ``(ii) any person--

       ``(I) separates such biodiesel from the mixture, or

       ``(II) without separation, uses the mixture other than as a 
     fuel,

     then there is hereby imposed on such person a tax equal to 
     the product of the rate applicable under subsection (b)(1)(A) 
     and the number of gallons of the mixture.
       ``(B) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     subparagraph (A) as if such tax were imposed by section 4081 
     and not by this chapter.
       ``(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.
       ``(e) Termination.--This section shall not apply to any 
     fuel sold after December 31, 2005.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) (relating to current year business credit), as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (15), by striking the period at the end of 
     paragraph (16) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(17) the biodiesel fuels credit determined under section 
     40B(a).''.
       (c) Conforming Amendments.--
       (1) Section 39(d), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(12) No carryback of biodiesel fuels credit before 
     effective date.--No portion of the unused business credit for 
     any taxable year which is attributable to the biodiesel fuels 
     credit determined under section 40B may be carried back to a 
     taxable year ending on or before the date of the enactment of 
     section 40B.''.
       (2)(A) Section 87, as amended by this Act, is amended--
       (i) by striking ``and'' at the end of paragraph (1),
       (ii) by striking the period at the end of paragraph (2) and 
     inserting ``, and'',
       (iii) by adding at the end the following new paragraph:
       ``(3) the biodiesel fuels credit determined with respect to 
     the taxpayer for the taxable year under section 40B(a).'', 
     and
       (iv) by striking ``FUEL CREDIT'' in the heading and 
     inserting ``AND BIODIESEL FUELS CREDITS''.
       (B) The item relating to section 87 in the table of 
     sections for part II of subchapter B of chapter 1 is amended 
     by striking ``fuel credit'' and inserting ``and biodiesel 
     fuels credits''.
       (3) Section 196(c) is amended by striking ``and'' at the 
     end of paragraph (9), by striking the period at the end of 
     paragraph (10) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(11) the biodiesel fuels credit determined under section 
     40B(a).''.
       (4) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by adding after the item relating to section 40A the 
     following new item:

``Sec. 40B. Biodiesel used as fuel.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel sold after the date of the enactment of 
     this Act, in taxable years ending after such date.

     SEC. 3. ALCOHOL FUEL AND BIODIESEL MIXTURES EXCISE TAX 
                   CREDIT.

       (a) In General.--Subchapter B of chapter 65 (relating to 
     rules of special application) is amended by inserting after 
     section 6425 the following new section:

     ``SEC. 6426. CREDIT FOR ALCOHOL FUEL AND BIODIESEL MIXTURES.

       ``(a) Allowance of Credits.--There shall be allowed as a 
     credit against the tax imposed by section 4081 an amount 
     equal to the sum of--
       ``(1) the alcohol fuel mixture credit, plus
       ``(2) the biodiesel mixture credit.
       ``(b) Alcohol Fuel Mixture Credit.--
       ``(1) In general.--For purposes of this section, the 
     alcohol fuel mixture credit is the

[[Page S10682]]

     applicable amount for each gallon of alcohol used by the 
     taxpayer in producing an alcohol fuel mixture.
       ``(2) Applicable amount.--For purposes of this subsection--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the applicable amount is 52 cents (51 cents in the case of 
     any sale or use after 2004).
       ``(B) Mixtures not containing ethanol.--In the case of an 
     alcohol fuel mixture in which none of the alcohol consists of 
     ethanol, the applicable amount is 60 cents.
       ``(3) Alcohol fuel mixture.--For purposes of this 
     subsection, the term `alcohol fuel mixture' is a mixture 
     which--
       ``(A) consists of alcohol and a taxable fuel, and
       ``(B) is sold for use or used as a fuel by the taxpayer 
     producing the mixture.
       ``(4) Other definitions.--For purposes of this subsection--
       ``(A) Alcohol.--The term `alcohol' includes methanol and 
     ethanol but does not include--
       ``(i) alcohol produced from petroleum, natural gas, or coal 
     (including peat), or
       ``(ii) alcohol with a proof of less than 190 (determined 
     without regard to any added denaturants).

     Such term also includes an alcohol gallon equivalent of ethyl 
     tertiary butyl ether or other ethers produced from such 
     alcohol.
       ``(B) Taxable fuel.--The term `taxable fuel' has the 
     meaning given such term by section 4083(a)(1).
       ``(5) Termination.--This subsection shall not apply to any 
     sale or use for any period after December 31, 2010.
       ``(c) Biodiesel Mixture Credit.--
       ``(1) In general.--For purposes of this section, the 
     biodiesel mixture credit is the product of the applicable 
     amount and the number of gallons of biodiesel used by the 
     taxpayer in producing any qualified biodiesel mixture.
       ``(2) Applicable amount.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the applicable amount is 50 cents.
       ``(B) Amount for agri-biodiesel.--
       ``(i) In general.--Subject to clause (ii), in the case of 
     any biodiesel which is agri-biodiesel, the applicable amount 
     is $1.00.
       ``(ii) Certification for agri-biodiesel.--Clause (i) shall 
     apply only if the taxpayer described in paragraph (1) obtains 
     a certification (in such form and manner as prescribed by the 
     Secretary) from the producer of the agri-biodiesel which 
     identifies the product produced.
       ``(3) Definitions.--Any term used in this subsection which 
     is also used in section 40B shall have the meaning given such 
     term by section 40B.
       ``(4) Termination.--This subsection shall not apply to any 
     sale or use for any period after December 31, 2005.
       ``(d) Mixture Not Used As a Fuel, Etc.--
       ``(1) Imposition of tax.--If--
       ``(A) any credit was determined under this section with 
     respect to alcohol or biodiesel used in the production of any 
     alcohol fuel mixture or qualified biodiesel mixture, 
     respectively, and
       ``(B) any person--
       ``(i) separates such alcohol or biodiesel from the mixture, 
     or
       ``(ii) without separation, uses the mixture other than as a 
     fuel,

     then there is hereby imposed on such person a tax equal to 
     the product of the applicable amount and the number of 
     gallons of such alcohol or biodiesel.
       ``(2) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     paragraph (1) as if such tax were imposed by section 4081 and 
     not by this section.''.
       (b) Registration Requirement.--Section 4101(a) (relating to 
     registration) is amended by inserting ``and every person 
     producing biodiesel (as defined in section 40B(d)(1)) or 
     alcohol (as defined in section 6426(b)(4)(A))'' after 
     ``4091''.
       (c) Conforming Amendments.--
       (1) Section 40(c) is amended by striking ``section 4081(c), 
     or section 4091(c)'' and inserting ``section 4091(c), section 
     6426, section 6427(e), or section 6427(f)''.
       (2) Section 40(d)(4)(B) is amended by striking ``or 
     4081(c)''.
       (3) Section 40(e)(1) is amended--
       (A) by striking ``2007'' in subparagraph (A) and inserting 
     ``2010'', and
       (B) by striking ``2008'' in subparagraph (B) and inserting 
     ``2011''.
       (4) Section 40(h) is amended--
       (A) by striking ``2007'' in paragraph (1) and inserting 
     ``2010'', and
       (B) by striking ``, 2006, or 2007'' in the table contained 
     in paragraph (2) and inserting ``through 2010''.
       (5) Section 4041(b)(2)(B) is amended by striking ``a 
     substance other than petroleum or natural gas'' and inserting 
     ``coal (including peat)''.
       (6) Paragraph (1) of section 4041(k) is amended to read as 
     follows:
       ``(1) In general.--Under regulations prescribed by the 
     Secretary, in the case of the sale or use of any liquid at 
     least 10 percent of which consists of alcohol (as defined in 
     section 6426(b)(4)(A)), the rate of the tax imposed by 
     subsection (c)(1) shall be the comparable rate under section 
     4091(c).''.
       (7) Section 4081 is amended by striking subsection (c).
       (8) Paragraph (2) of section 4083(a) is amended to read as 
     follows:
       ``(2) Gasoline.--The term `gasoline'--
       ``(A) includes any gasoline blend, other than qualified 
     methanol or ethanol fuel (as defined in section 
     4041(b)(2)(B)) or a denaturant of alcohol (as defined in 
     section 6426(b)(4)(A)), and
       ``(B) includes, to the extent prescribed in regulations--
       ``(i) any gasoline blend stock, and
       ``(ii) any product commonly used as an additive in 
     gasoline.
     For purposes of subparagraph (B)(i), the term `gasoline blend 
     stock' means any petroleum product component of gasoline.''.
       (9) Section 6427 is amended by inserting after subsection 
     (d) the following new subsection:
       ``(e) Alcohol or Biodiesel Used To Produce Alcohol Fuel and 
     Biodiesel Mixtures or Used as Fuels.--Except as provided in 
     subsection (k)--
       ``(1) Used to produce a mixture.--If any person produces a 
     mixture described in section 6426 in such person's trade or 
     business, the Secretary shall pay (without interest) to such 
     person an amount equal to the alcohol fuel mixture credit or 
     the biodiesel mixture credit with respect to such mixture.
       ``(2) Used as fuel.--If alcohol (as defined in section 
     40(d)(1)) or biodiesel (as defined in section 40B(d)(1)) or 
     agri-biodiesel (as defined in section 40B(d)(2)) which is not 
     in a mixture with a taxable fuel (as defined in section 
     4083(a)(1))--
       ``(A) is used by any person as a fuel in a trade or 
     business, or
       ``(B) is sold by any person at retail to another person and 
     placed in the fuel tank of such person's vehicle,

     the Secretary shall pay (without interest) to such person an 
     amount equal to the alcohol credit (as determined under 
     section 40(b)(2)) or the biodiesel credit (as determined 
     under section 40B(b)(2)) with respect to such fuel.
       ``(3) Coordination with other repayment provisions.--No 
     amount shall be payable under paragraph (1) with respect to 
     any mixture with respect to which an amount is allowed as a 
     credit under section 6426.
       ``(4) Termination.--This subsection shall not apply with 
     respect to--
       ``(A) any alcohol fuel mixture (as defined in section 
     6426(b)(3)) or alcohol (as so defined) sold or used after 
     December 31, 2010, and
       ``(B) any qualified biodiesel mixture (within the meaning 
     of section 6426(c)(1)) or biodiesel (as so defined) or agri-
     biodiesel (as so defined) sold or used after December 31, 
     2005.''.
       (10) Subsection (f) of section 6427 is amended to read as 
     follows:
       ``(f) Aviation Fuel Used To Produce Certain Alcohol 
     Fuels.--
       ``(1) In general.--Except as provided in subsection (k), if 
     any aviation fuel on which tax was imposed by section 4091 at 
     the regular tax rate is used by any person in producing a 
     mixture described in section 4091(c)(1)(A) which is sold or 
     used in such person's trade or business, the Secretary shall 
     pay (without interest) to such person an amount equal to the 
     excess of the regular tax rate over the incentive tax rate 
     with respect to such fuel.
       ``(2) Definitions.--For purposes of paragraph (1)--
       ``(A) Regular tax rate.--The term `regular tax rate' means 
     the aggregate rate of tax imposed by section 4091 determined 
     without regard to subsection (c) thereof.
       ``(B) Incentive tax rate.--The term `incentive tax rate' 
     means the aggregate rate of tax imposed by section 4091 with 
     respect to fuel described in subsection (c)(2) thereof.
       ``(3) Coordination with other repayment provisions.--No 
     amount shall be payable under paragraph (1) with respect to 
     any aviation fuel with respect to which an amount is payable 
     under subsection (d) or (l).
       ``(4) Termination.--This subsection shall not apply with 
     respect to any mixture sold or used after September 30, 
     2007.''.
       (11) Paragraphs (1) and (2) of section 6427(i) are amended 
     by inserting ``(f),'' after ``(d),''.
       (12) Section 6427(i)(3) is amended--
       (A) by striking ``subsection (f)'' both places it appears 
     in subparagraph (A) and inserting ``subsection (e)(1)'',
       (B) by striking ``gasoline, diesel fuel, or kerosene used 
     to produce a qualified alcohol mixture (as defined in section 
     4081(c)(3))'' in subparagraph (A) and inserting ``a mixture 
     described in section 6426'',
       (C) by striking ``subsection (f)(1)'' in subparagraph (B) 
     and inserting ``subsection (e)(1)'',
       (D) by striking ``20 days of the date of the filing of such 
     claim'' in subparagraph (B) and inserting ``45 days of the 
     date of the filing of such claim (20 days in the case of an 
     electronic claim)'', and
       (E) by striking ``alcohol mixture'' in the heading and 
     inserting ``alcohol fuel and biodiesel mixture''.
       (13) Section 6427(o) is amended--
       (A) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) any tax is imposed by section 4081, and'',
       (B) by striking ``such gasohol'' in paragraph (2) and 
     inserting ``the alcohol fuel mixture (as defined in section 
     6426(b)(3))'',
       (C) by striking ``gasohol'' both places it appears in the 
     matter following paragraph (2) and inserting ``alcohol fuel 
     mixture'', and
       (D) by striking ``Gasohol'' in the heading and inserting 
     ``Alcohol Fuel Mixture''.
       (14) Section 9503(b)(1) is amended by adding at the end the 
     following new flush sentence:
     ``For purposes of this paragraph, taxes received under 
     sections 4041 and 4081 shall be

[[Page S10683]]

     determined without reduction for credits under section 
     6426.''.
       (15) Section 9503(b)(4) is amended--
       (A) by adding ``or'' at the end of subparagraph (C),
       (B) by striking the comma at the end of subparagraph 
     (D)(iii) and inserting a period, and
       (C) by striking subparagraphs (E) and (F).
       (16) Section 9503(c)(2)(A)(i)(III) is amended by inserting 
     ``(other than subsection (e) thereof)'' after ``section 
     6427''.
       (17) Section 9503(e)(2) is amended by striking subparagraph 
     (B) and by redesignating subparagraphs (C), (D), and (E) as 
     subparagraphs (B), (C), and (D), respectively.
       (18) The table of sections for subchapter B of chapter 65 
     is amended by inserting after the item relating to section 
     6425 the following new item:

``Sec. 6426. Credit for alcohol fuel and biodiesel mixtures.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel sold or used after September 30, 2003.
       (e) Format for Filing.--The Secretary of the Treasury shall 
     describe the electronic format for filing claims described in 
     section 6427(i)(3)(B) of the Internal Revenue Code of 1986 
     (as amended by subsection (b)(12)(D)) not later than 
     September 30, 2003.
                                 ______