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S 748

112th CONGRESS
1st Session

S. 748

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

April 6 (legislative day, April 5), 2011

Mr. NELSON of Florida (for himself, Mr. BINGAMAN, and Mr. KERRY) 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 2011'.

SEC. 2. ALGAE TREATED AS A QUALIFIED FEEDSTOCK FOR PURPOSES OF THE CELLULOSIC BIOFUEL PRODUCER CREDIT, ETC.

    (a) In General- Subclause (I) of section 40(b)(6)(E)(i) of the Internal Revenue Code of 1986 is amended to read as follows:

            `(I) is derived solely by, or from, qualified feedstocks, and'.

    (b) Qualified Feedstock; Special Rules for Algae- Paragraph (6) of section 40(b) of the Internal Revenue Code of 1986 is amended by redesignating subparagraphs (F), (G), and (H) as subparagraphs (H), (I), and (J), respectively, and by inserting after subparagraph (E) the following new subparagraphs:

        `(F) QUALIFIED FEEDSTOCK- For purposes of this paragraph, the term `qualified feedstock' means--

          `(i) any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis, and

          `(ii) any cultivated algae, cyanobacteria, or lemna.

        `(G) SPECIAL RULES FOR ALGAE- In the case of fuel which is derived by, or from, feedstock described in subparagraph (F)(ii) and which is sold by the taxpayer to another person for refining by such other person into a fuel which meets the requirements of subparagraph (E)(i)(II)--

          `(i) such sale shall be treated as described in subparagraph (C)(i),

          `(ii) such fuel shall be treated as meeting the requirements of subparagraph (E)(i)(II) in the hands of such taxpayer, and

          `(iii) except as provided in this subparagraph, such fuel (and any fuel derived from such fuel) shall not be taken into account under subparagraph (C) with respect to the taxpayer or any other person.'.

    (c) Algae Treated as a Qualified Feedstock for Purposes of Bonus Depreciation for Biofuel Plant Property-

      (1) IN GENERAL- Subparagraph (A) of section 168(l)(2) of the Internal Revenue Code of 1986 is amended by striking `solely to produce cellulosic biofuel' and inserting `solely to produce second generation biofuel (as defined in section 40(b)(6)(E))'.

      (2) CONFORMING AMENDMENTS- Subsection (l) of section 168 of such Code is amended--

        (A) by striking `cellulosic biofuel' each place it appears in the text thereof and inserting `second generation biofuel',

        (B) by striking paragraph (3) and redesignating paragraphs (4) through (8) as paragraphs (3) through (7), respectively,

        (C) by striking `Cellulosic' in the heading of such subsection and inserting `Second Generation', and

        (D) by striking `CELLULOSIC' in the heading of paragraph (2) and inserting `SECOND GENERATION'.

    (d) Conforming Amendments-

      (1) Section 40 of the Internal Revenue Code of 1986, as amended by subsection (b), is amended--

        (A) by striking `cellulosic biofuel' each place it appears in the text thereof and inserting `second generation biofuel',

        (B) by striking `CELLULOSIC' in the headings of subsections (b)(6), (b)(6)(E), and (d)(3)(D) and inserting `SECOND GENERATION', and

        (C) by striking `CELLULOSIC' in the headings of subsections (b)(6)(C), (b)(6)(D), (b)(6)(H), (d)(6), and (e)(3) and inserting `SECOND GENERATION'.

      (2) Clause (ii) of section 40(b)(6)(E) of such Code is amended by striking `Such term shall not' and inserting `The term `second generation biofuel' shall not'.

      (3) Paragraph (1) of section 4101(a) of such Code is amended by striking `cellulosic biofuel' and inserting `second generation biofuel'.

    (e) Effective Date-

      (1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to fuels sold or used after the date of the enactment of this Act.

      (2) APPLICATION TO BONUS DEPRECIATION- The amendments made by subsection (c) shall apply to property placed in service after the date of the enactment of this Act.

END