S 884

112th CONGRESS
1st Session

S. 884

To amend the Internal Revenue Code of 1986 to provide for a variable VEETC rate based on the price of crude oil, and for other purposes.

IN THE SENATE OF THE UNITED STATES

May 4, 2011

Mr. GRASSLEY (for himself, Mr. CONRAD, Mr. JOHANNS, Ms. KLOBUCHAR, Mr. FRANKEN, Mr. JOHNSON of South Dakota, Mr. HARKIN, and Mr. NELSON of Nebraska) 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 provide for a variable VEETC rate based on the price of crude oil, and for other purposes.

    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 `Domestic Energy Promotion Act of 2011'.

SEC. 2. VARIABLE VEETC RATE BASED ON PRICE OF CRUDE OIL.

    (a) Excise Tax Credit-

      (1) IN GENERAL- Subparagraph (A) of section 6426(b)(2) of the Internal Revenue Code of 1986 is amended--

        (A) by striking `and' at the end of clause (i),

        (B) by inserting `and before 2012' after `2008' in clause (ii),

        (C) by striking the period at the end of clause (ii) and inserting `, and', and

        (D) by adding at the end the following new clauses:

          `(iii) in the case of calendar year 2012, 20 cents,

          `(iv) in the case of calendar year 2013, 15 cents, and

          `(v) in the case of calendar quarters beginning after 2013, the applicable rate determined in accordance with the following table:

`If the average price of crude oil

The applicable rate for

during the preceding calendar quarter is:

the calendar quarter is:

Not more than $50/barrel

--30 cents

More than $50 but not more than $60/barrel

--24 cents

More than $60 but not more than $70/barrel

--18 cents

More than $70 but not more than $80/barrel

--12 cents

More than $80 but not more than $90/barrel

--6 cents

More than $90/barrel

--0 cents.

          For purposes of the preceding table, the average price of crude oil for any calendar quarter shall be the average 3-month futures price on the New York Mercantile Exchange for light sweet crude oil for such calendar quarter.'.

      (2) EXTENSION OF TAX CREDIT OR PAYMENT- Sections 6426(b)(6) and 6427(e)(6)(A) of such Code are each amended by striking `2011' and inserting `2016'.

    (b) Income Tax Credit-

      (1) IN GENERAL- The table contained in section 40(h)(2) of the Internal Revenue Code of 1986 is amended--

        (A) by striking `calendar year' in the heading for the first column,

        (B) by inserting `Calendar year' before `2001',

        (C) by inserting `Calendar year' before `2003',

        (D) by inserting `Calendar year' before `2005',

        (E) by inserting `Calendar years' before `2009',

        (F) by striking the period at the end of the table, and

        (G) by adding at the end the following:
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`Calendar year 2012                                                   20 cents             14.8 cents 
Calendar year 2013                                                    15 cents             11.1 cents 
Any calendar quarter beginning after 2013 and before 2017  1st applicable rate  2d applicable rate.'. 
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      (2) APPLICABLE RATES- Paragraph (3) of section 40(h) of such Code is amended to read as follows:

      `(3) APPLICABLE RATES- For purposes of this subsection, the 1st applicable rate and the 2d applicable rate shall be determined in accordance with the following table:
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`If the average price of crude oil during the preceding calendar quarter is: The 1st applicable rate for the calendar quarter is: The 2d applicable rate for the calendar quarter is: 
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Not more than $50/barrel                                                                                                 30 cents                                         22.20 cents 
More than $50 but not more than $60/barrel                                                                               24 cents                                         17.76 cents 
More than $60 but not more than $70/barrel                                                                               18 cents                                         13.33 cents 
More than $70 but not more than $80/barrel                                                                               12 cents                                          8.88 cents 
More than $80 but not more than $90/barrel                                                                                6 cents                                          4.44 cents 
More than $90/barrel                                                                                                      0 cents                                            0 cents. 
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      For purposes of the preceding table, the average price of crude oil for any calendar quarter shall be the average 3-month futures price on the New York Mercantile Exchange for light sweet crude oil for such calendar quarter.'.

      (3) EXTENSION OF TAX CREDIT- Section 40 of such Code is amended--

        (A) by striking `2011' in subsection (e)(1)(A) and inserting `2016',

        (B) by striking `2012' in subsection (e)(1)(B) and inserting `2017', and

        (C) by striking `2011' in subsection (h)(1) and inserting `2016'.

    (c) Repeal of Deadwood- Section 6426(b)(2) of the Internal Revenue Code of 1986 is amended by striking subparagraph (C).

    (d) Effective Date- The amendments made by this section shall apply to any sale, use, or removal for any period after the date of the enactment of the Act.

SEC. 3. EXTENSION OF CELLULOSIC BIOFUEL PRODUCER CREDIT THROUGH 2016.

    (a) In General- Section 40(b)(6) of the Internal Revenue Code of 1986 is amended by striking subparagraph (H).

    (b) Conforming Amendment- Section 40(e) of the Internal Revenue Code of 1986 is amended by striking paragraph (3).

SEC. 4. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

    (a) Extension for Ethanol Refueling Property- Subsection (g) of section 30C of the Internal Revenue Code of 1986 is amended--

      (1) by striking `and' at the end of paragraph (1),

      (2) by striking the second period at the end of paragraph (2),

      (3) by redesignating paragraph (2) as paragraph (3), and

      (4) by inserting after paragraph (1) the following new paragraph:

      `(2) in the case of property relating to fuel described in subsection (c)(2)(A)(ii), after December 31, 2016, and'.

    (b) Only Certain Ethanol Blends Eligible for Credit- Subparagraph (A) of section 30C(c)(2) of the Internal Revenue Code of 1986 is amended to read as follows:

        `(A) Any fuel--

          `(i) at least 85 percent of the volume of which consists of one or more of the following: natural gas, compressed natural gas, liquified natural gas, liquefied petroleum gas, or hydrogen, or

          `(ii) at least 85 percent of the volume of which consists of--

            `(I) ethanol, or

            `(II) ethanol and one or more of the fuels described in clause (i), but only if at least 20 percent and not more than 85 percent of the volume of such fuel consists of ethanol.'.

    (c) Credit for Dual-Use Refueling Property- Subsection (e) of section 30C of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

      `(6) DUAL-USE REFUELING PROPERTY-

        `(A) IN GENERAL- In the case of any dual-use refueling property, 100 percent of the cost of such property shall be treated as qualified alternative fuel refueling property if the taxpayer certifies, in such time and manner as the Secretary shall prescribe, that such property will be used in more than a de minimis capacity for the purposes described in section 179A(d)(3)(A) (applied as specified in subsection (c)(2)).

        `(B) RECAPTURE- If at any time within 5 years after the date of the certification under subparagraph (A) the dual-use refueling property ceases to be used as required under such subparagraph, 100 percent of the cost of such property shall be subject to recapture under paragraph (5).

        `(C) DUAL-USE REFUELING PROPERTY- For purposes of this paragraph, the term `dual-use refueling property' means property that is both qualified alternative fuel vehicle refueling property and property used--

          `(i) to store or dispense fuels not described in subsection (c)(2), or

          `(ii) to store fuels described in subsection (c)(2) for any purpose other than delivery of such fuel into the fuel tank of a motor vehicle.'.

    (d) Effective Date- The amendments made by this section shall apply to property placed in service after December 31, 2011.

SEC. 5. EXTENSION OF SPECIAL DEPRECIATION ALLOWANCE FOR CELLULOSIC BIOFUEL PLANT PROPERTY.

    Subparagraph (D) of section 168(l)(2) of the Internal Revenue Code of 1986 is amended by striking `January 1, 2013' and inserting `January 1, 2017'.

SEC. 6. STAGED REDUCTION OF ETHANOL TARIFF.

    (a) Calendar Year 2012-

      (1) IN GENERAL- Heading 9901.00.50 of the Harmonized Tariff Schedule of the United States is amended--

        (A) by striking `14.27' and inserting `5.28' in the column 1 general rate of duty and in the column 2 rate of duty; and

        (B) by striking `Before 1/1/2012' and inserting `Before 1/1/2013'.

      (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall take effect on January 1, 2012.

    (b) Calendar Years 2013 Through 2016-

      (1) IN GENERAL- Heading 9901.00.50 of the Harmonized Tariff Schedule of the United States is amended--

        (A) by striking `5.28' and inserting `3.96' in the column 1 general rate of duty and in the column 2 rate of duty; and

        (B) by striking `Before 1/1/2013' and inserting `Before 1/1/2017'.

      (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall take effect on January 1, 2013.

END