[Congressional Record Volume 162, Number 55 (Tuesday, April 12, 2016)]
[Senate]
[Pages S1921-S1922]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 3655. Mr. GRASSLEY (for himself, Ms. Cantwell, Mr. Blunt, Ms.
Heitkamp, Mrs. Ernst, Mr. Donnelly, Mr. Franken, and Mr. Whitehouse)
submitted an amendment intended to be proposed to amendment SA 3464
submitted by Mr. Thune (for himself and Mr. Nelson) to the bill H.R.
636, to amend the Internal Revenue Code of 1986 to permanently extend
increased expensing limitations, and for other purposes; which was
ordered to lie on the table; as follows:
At the appropriate place, insert the following:
SEC. ___. REFORM OF BIODIESEL TAX INCENTIVES.
(a) Income Tax Credit.--
(1) In general.--So much of section 40A of the Internal
Revenue Code of 1986 as precedes subsection (c) is amended to
read as follows:
``SEC. 40A. BIODIESEL FUELS CREDIT.
``(a) In General.--For purposes of section 38, the
biodiesel fuels credit determined under this section for the
taxable year is $1.00 for each gallon of biodiesel produced
by the taxpayer which during the taxable year--
``(1) is sold by the taxpayer to another person--
``(A) for use by such other person's trade or business as a
fuel or in the production of a qualified biodiesel mixture
(other than casual off-farm production), or
``(B) who sells such biodiesel at retail to another person
and places such biodiesel in the fuel tank of such other
person, or
``(2) is used by such taxpayer for any purpose described in
paragraph (1).
``(b) Increased Credit for Small Producers.--
``(1) In general.--In the case of any eligible small
biodiesel producer, subsection (a) shall be applied by
increasing the dollar amount contained therein by 10 cents.
``(2) Limitation.--Paragraph (1) shall only apply with
respect to the first 15,000,000 gallons of biodiesel produced
by any eligible small biodiesel producer during any taxable
year.''.
(2) Definitions and special rules.--Section 40A(d) of such
Code is amended by striking all that follows paragraph (1)
and inserting the following:
``(2) Qualified biodiesel mixture; biodiesel mixture.--
``(A) Qualified biodiesel mixture.--
``(i) In general.--The term `qualified biodiesel mixture'
means a biodiesel mixture which is--
``(I) sold by the producer of such mixture to any person
for use as a fuel, or
``(II) used by the producer of such mixture as a fuel.
``(ii) Sale or use must be in trade or business, etc.--A
biodiesel mixture shall not be treated as a qualified
biodiesel mixture unless the sale or use described in clause
(i) is in a trade or business of the person producing the
biodiesel mixture.
``(B) Biodiesel mixture.--The term `biodiesel mixture'
means a mixture which consists of biodiesel and diesel fuel
(as defined in section 4083(a)(3)), determined without regard
to any use of kerosene.
``(3) Biodiesel not used for a qualified purpose.--If--
``(A) any credit was determined with respect to any
biodiesel under this section, and
``(B) any person uses such biodiesel for a purpose not
described in subsection (a),
then there is hereby imposed on such person a tax equal to
the product of the rate applicable under subsection (a) and
the number of gallons of such biodiesel.
``(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) Limitation to biodiesel with connection to the united
states.--
``(A) In general.--No credit shall be determined under
subsection (a) with respect to biodiesel unless such
biodiesel is produced in the United States from qualified
feedstocks. For purposes of this paragraph, the term `United
States' includes any possession of the United States.
``(B) Qualified feedstocks.--For purposes of subparagraph
(A), the term `qualified feedstock' means any feedstock which
is allowable for a fuel that is assigned a D-Code of 4 under
table 1 of section 80.1426(f) of title 40, Code of Federal
Regulations.''.
(3) Rules for small biodiesel producers.--
(A) In general.--Section 40A(e) of such Code is amended--
(i) by striking ``agri-biodiesel'' each place it appears in
paragraphs (1) and (5)(A) and inserting ``biodiesel'',
(ii) by striking ``subsection (b)(4)(C)'' each place it
appears in paragraphs (2) and (3) and inserting ``subsection
(b)(2)'', and
(iii) by striking ``subsection (a)(3)'' each place it
appears in paragraphs (5)(A), (6)(A)(i), and (6)(B)(i) and
inserting ``subsection (b)''.
(B) The heading for subsection (e) of section 40A of such
Code is amended by striking ``Agri-biodiesel'' and inserting
``Biodiesel''.
(C) The headings for paragraphs (1) and (6) of section
40A(e) of such Code are each amended by striking ``agri-
biodiesel'' and inserting ``biodiesel''.
(4) Renewable diesel.--
(A) In general.--Paragraph (3) of section 40A(f) of such
Code is amended to read as follows:
``(3) Renewable diesel defined.--
``(A) In general.--The term `renewable diesel' means liquid
fuel derived from biomass which--
``(i) is not a mono-alkyl ester,
``(ii) can be used in engines designed to operate on
conventional diesel fuel, and
``(iii) meets the requirements for any Grade No. 1-D fuel
or Grade No. 2-D fuel covered under the American Society for
Testing and Materials specification D-975-13a.
``(B) Exceptions.--Such term shall not include--
``(i) any liquid with respect to which a credit may be
determined under section 40,
``(ii) any fuel derived from coprocessing biomass with a
feedstock which is not biomass, or
``(iii) any fuel that is not chemically equivalent to
petroleum diesel fuels that can meet fuel quality
specifications applicable to diesel fuel, gasoline, or
aviation fuel.
``(C) Biomass.--For purposes of this paragraph, the term
`biomass' has the meaning given such term by section
45K(c)(3).''.
(B) Conforming amendments.--Section 40A(f) of such Code is
amended--
(i) by striking ``Subsection (b)(4)'' in paragraph (2) and
inserting ``Subsection (b)'', and
(ii) by striking paragraph (4) and inserting the following:
``(4) Certain aviation fuel.--Except as provided paragraph
(3)(B), the term `renewable diesel' shall include fuel
derived from biomass which meets the requirements of a
Department of Defense specification for military jet fuel or
an American Society of Testing and Materials specification
for aviation turbine fuel.''.
(5) Extension.--Subsection (g) of section 40A of such Code
is amended by striking ``December 31, 2016'' and inserting
``December 31, 2019''.
(6) Clerical amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of such Code is
amended by striking the item relating to section 40A and
inserting the following new item:
``Sec. 40A. Biodiesel fuels credit.''.
(b) Reform of Excise Tax Credit.--
(1) In general.--Subsection (c) of section 6426 of the
Internal Revenue Code of 1986 is amended to read as follows:
``(c) Biodiesel Production Credit.--
``(1) In general.--For purposes of this section, the
biodiesel production credit is $1.00 for each gallon of
biodiesel produced by the taxpayer and which--
``(A) is sold by such taxpayer to another person--
``(i) for use by such other person's trade or business as a
fuel or in the production of a qualified biodiesel mixture
(other than casual off-farm production), or
``(ii) who sells such biodiesel at retail to another person
and places such biodiesel in the fuel tank of such other
person, or
``(B) is used by such taxpayer for any purpose described in
subparagraph (A).
``(2) Definitions.--Any term used in this subsection which
is also used in section 40A shall have the meaning given such
term by section 40A.
``(3) Termination.--This subsection shall not apply to any
sale, use, or removal after December 31, 2019.''.
(2) Producer registration requirement.--Subsection (a) of
section 6426 of such Code is amended by striking
``subsections (d) and (e)'' in the flush sentence at the end
and inserting ``subsections (c), (d), and (e)''.
(3) Recapture.--
(A) In general.--Subsection (f) of section 6426 of such
Code is amended--
(i) by striking ``or biodiesel'' each place it appears in
subparagraphs (A) and (B)(i) of paragraph (1),
(ii) by striking ``or biodiesel mixture'' in paragraph
(1)(A), and
(iii) by redesignating paragraph (2) as paragraph (3) and
by inserting after paragraph (1) the following new paragraph:
``(2) Biodiesel.--If any credit was determined under this
section or paid pursuant to section 6427(e) with respect to
the production of any biodiesel and any person uses such
biodiesel for a purpose not described in subsection (c)(1),
then there is hereby imposed on such person a tax equal to $1
for each gallon of such biodiesel.''.
(B) Conforming amendments.--
[[Page S1922]]
(i) Paragraph (3) of section 6426(f) of such Code, as
redesignated by subparagraph (A)(iii), is amended by
inserting ``or (2)'' after ``paragraph (1)''.
(ii) The heading for paragraph (1) of section 6426(f) of
such Code is amended by striking ``Imposition of tax'' and
inserting ``In general''.
(4) Limitation.--Section 6426(i) of such Code is amended--
(A) in paragraph (2)--
(i) by striking ``biodiesel or'', and
(ii) by striking ``Biodiesel and'' in the heading, and
(B) by inserting after paragraph (2) the following new
paragraph:
``(3) Biodiesel.--No credit shall be determined under
subsection (a) with respect to biodiesel unless such
biodiesel is produced in the United States from qualified
feedstocks (as defined in section 40A(d)(5)(B)).''.
(5) Clerical amendments.--
(A) The heading of section 6426 of such Code is amended by
striking ``alcohol fuel, biodiesel, and alternative fuel
mixtures'' and inserting ``alcohol fuel mixtures, biodiesel
production, and alternative fuel mixtures''.
(B) The item relating to section 6426 in the table of
sections for subchapter B of chapter 65 of such Code is
amended by striking ``alcohol fuel, biodiesel, and
alternative fuel mixtures'' and inserting ``alcohol fuel
mixtures, biodiesel production, and alternative fuel
mixtures''.
(c) Reform of Excise Payments.--Subsection (e) of section
6427 of the Internal Revenue Code of 1986 is amended--
(1) by striking ``or the biodiesel mixture credit'' in
paragraph (1),
(2) by redesignating paragraphs (3) through (6) as
paragraphs (4) through (7), respectively, and by inserting
after paragraph (2) the following new paragraph:
``(3) Biodiesel production credit.--If any person produces
biodiesel and sells or uses such biodiesel as provided in
section 6426(c)(1), the Secretary shall pay (without
interest) to such person an amount equal to the biodiesel
production credit with respect to such biodiesel.'',
(3) by striking ``paragraph (1) or (2)'' each place it
appears in paragraphs (4) and (6), as redesignated by
paragraph (2), and inserting ``paragraph (1), (2), or (3)'',
(4) by striking ``alternative fuel'' each place it appears
in paragraphs (4) and (6), as redesignated by paragraph (2),
and inserting ``fuel'', and
(5) in paragraph (7)(B), as redesignated by paragraph (2)--
(A) by striking ``biodiesel mixture (as defined in section
6426(c)(3))'' and inserting ``biodiesel (within the meaning
of section 40A)'', and
(B) by striking ``December 31, 2016'' and inserting
``December 31, 2019''.
(d) Guidance.--Not later than 30 days after the date of the
enactment of this Act, the Secretary of the Treasury, or the
Secretary's delegate, shall issue preliminary guidance with
respect to the amendments made by this subsection.
(e) Effective Date.--The amendments made by this section
shall apply to fuel sold or used after December 31, 2016.
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