To provide emergency disaster assistance to agricultural producers, to impose tariff-rate quotas on certain casein and milk protein concentrates, and to amend the Internal Revenue Code ...

108th CONGRESS
1st Session

S. 154

To provide emergency disaster assistance to agricultural producers, to impose tariff-rate quotas on certain casein and milk protein concentrates, and to amend the Internal Revenue Code of 1986 to provide tax relief for farmers and the producers of biodiesel, and for other purposes.

IN THE SENATE OF THE UNITED STATES

January 14, 2003

Mr. DAYTON introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

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

SECTION 1. TABLE OF CONTENTS.

The table of contents of this Act is as follows:

Sec. 1. Table of contents.

TITLE I--EMERGENCY AGRICULTURAL DISASTER ASSISTANCE

Sec. 101. Short title.

Sec. 102. Crop disaster assistance.

Sec. 103. Livestock assistance program.

Sec. 104. Funding.

Sec. 105. Regulations.

Sec. 106. Emergency designation.

Sec. 107. Budgetary treatment.

TITLE II--CASEIN AND MILK PROTEIN CONCENTRATES

Sec. 201. Imposition of tariff-rate quotas on certain casein and milk concentrates.

Sec. 202. Compensation authority.

TITLE III--BIODIESEL RENEWABLE FUEL

Sec. 301. Short title; etc.

Sec. 302. Credit for biodiesel used as fuel.

Sec. 303. Reduction of motor fuel excise taxes on biodiesel mixtures.

Sec. 304. Highway Trust Fund held harmless.

Sec. 305. Federal agency ethanol-blended gasoline and biodiesel purchasing requirement.

TITLE I--EMERGENCY AGRICULTURAL DISASTER ASSISTANCE

SECTION 101. SHORT TITLE.

This title may be cited as the `Emergency Agricultural Disaster Assistance Act of 2003'.

SEC. 102. CROP DISASTER ASSISTANCE.

(a) IN GENERAL- The Secretary of Agriculture (referred to in this title as the `Secretary') shall use such sums as are necessary of funds of the Commodity Credit Corporation to make emergency financial assistance authorized under this section available to producers on a farm that have incurred qualifying crop losses for the 2001 or 2002 crop, or both, due to damaging weather or related condition, as determined by the Secretary.

(b) ADMINISTRATION- The Secretary shall make assistance available under this section in the same manner as provided under section 815 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (Public Law 106-387; 114 Stat. 1549A-55), including using the same loss thresholds for the quantity and quality losses as were used in administering that section.

(c) CROP INSURANCE- In carrying out this section, the Secretary shall not discriminate against or penalize producers on a farm that have purchased crop insurance under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).

SEC. 103. LIVESTOCK ASSISTANCE PROGRAM.

(a) IN GENERAL- The Secretary shall use such sums as are necessary of funds of the Commodity Credit Corporation as are necessary to make and administer payments for livestock losses to producers for 2001 or 2002 losses, or both, in a county that has received a corresponding emergency designation by the President or the Secretary, of which an amount determined by the Secretary shall be made available for the American Indian livestock program under section 806 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (Public Law 106-387; 114 Stat. 1549, 1549A-51).

(b) ADMINISTRATION- The Secretary shall make assistance available under this section in the same manner as provided under section 806 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (Public Law 106-387; 114 Stat. 1549, 1549A-51).

SEC. 104. FUNDING.

Of the funds of the Commodity Credit Corporation, the Secretary shall use such sums as are necessary to carry out this title, to remain available until expended.

SEC. 105. REGULATIONS.

(a) IN GENERAL- The Secretary may promulgate such regulations as are necessary to implement this title.

(b) PROCEDURE- The promulgation of the regulations and administration of this title shall be made without regard to--

(1) the notice and comment provisions of section 553 of title 5, United States Code;

(2) the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking; and

(3) chapter 35 of title 44, United States Code (commonly known as the `Paperwork Reduction Act').

(c) CONGRESSIONAL REVIEW OF AGENCY RULEMAKING- In carrying out this section, the Secretary shall use the authority provided under section 808 of title 5, United States Code.

SEC. 106. EMERGENCY DESIGNATION.

(a) IN GENERAL- The entire amount made available under this title shall be available only to the extent that the President submits to Congress an official budget request for a specific dollar amount that includes designation of the entire amount of the request as an emergency requirement for the purposes of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 900 et seq.).

(b) DESIGNATION- The entire amount made available under this section is designated by Congress as an emergency requirement under sections 251(b)(2)(A) and 252(e) of that Act (2 U.S.C. 901(b)(2)(A), 902(e)).

SEC. 107. BUDGETARY TREATMENT.

Notwithstanding Rule 3 of the Budget Scorekeeping Guidelines set forth in the Joint Explanatory Statement of the Committee of Conference accompanying Conference Report No. 105-217, the provisions of this title that would have been estimated by the Office of Management and Budget as changing direct spending or receipts under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 902) were it included in an Act other than an appropriation Act shall be treated

as direct spending or receipts legislation, as appropriate, under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 902).

TITLE II--CASEIN AND MILK PROTEIN CONCENTRATES

SEC. 201. IMPOSITION OF TARIFF-RATE QUOTAS ON CERTAIN CASEIN AND MILK CONCENTRATES.

(a) CASEIN AND CASEIN PRODUCTS-

(1) IN GENERAL- The Additional U.S. notes to chapter 35 of the Harmonized Tariff Schedule of the United States are amended--

(A) in note 1, by striking `subheading 3501.10.10' and inserting `subheadings 3501.10.05, 3501.10.15, and 3501.10.20'; and

(B) by adding at the end the following new note:

`2. The aggregate quantity of casein, caseinates, milk protein concentrate, and other casein derivatives entered under subheadings 3501.10.15, 3501.10.65, and 3501.90.65 in any calendar year shall not exceed 54,051,000 kilograms. Articles the product of Mexico shall not be permitted or included under this quantitative limitation and no such article shall be classifiable therein.'.

(2) RATES FOR CERTAIN CASEINS, CASEINATES, AND OTHER DERIVATIVES AND GLUES- Chapter 35 of the Harmonized Tariff Schedule of the United States is amended by striking subheadings 3501.10 through 3501.90.60, inclusive, and inserting the following new subheadings with article descriptions for subheadings 3501.10 and 3501.90 having the same degree of indentation as the article description for subheading 3502.20.00:

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` 3501.90.70 Other                                                                                                             $2.16/kg Free (MX)                   $2.81/kg  '.

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(b) MILK PROTEIN CONCENTRATES-

(1) IN GENERAL- The Additional U.S. notes to chapter 4 of the Harmonized Tariff Schedule of the United States are amended--

(A) in note 13, by striking `subheading 0404.90.10' and inserting `subheadings 0404.90.05, 0404.90.15, and 0404.90.20'; and

(B) by adding at the end the following new note:

`27. The aggregate quantity of milk protein concentrates entered under subheading 0404.90.15 in any calendar year shall not exceed 15,818,000 kilograms. Articles the product of Mexico shall not be permitted or included under this quantitative limitation and no such article shall be classifiable therein.'.

(2) RATES FOR CERTAIN MILK PROTEIN CONCENTRATES- Chapter 4 of the Harmonized Tariff Schedule of the United States is amended by striking subheading 0404.90 through 0404.90.10, inclusive, and inserting the following new subheadings with the article description for subheading 0404.90 having the same degree of indentation as the article description for subheading 0405.10 and the article description for subheadings 0404.90.05, 0404.90.15, and 0404.90.20 having the same degree of indentation as the article description for subheading 0405.20.40:

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` 0404.90.20 Other                                                                                       $1.56/kg Free (MX)                   $2.02/kg  '.

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(c) EFFECTIVE DATE- The amendments made by this section apply to goods entered, or withdrawn from warehouse for consumption, on or after the first day of the first month after the date that is 15 days after the date of enactment of this Act.

SEC. 202. COMPENSATION AUTHORITY.

(a) IN GENERAL- If the provisions of section 1 require, the President--

(1) may enter into a trade agreement with any foreign country or instrumentality for the purpose of granting new concessions as compensation in order to maintain the general level of reciprocal and mutually advantageous concessions; and

(2) may proclaim such modification or continuance of any existing duty, or such continuance of existing duty-free or excise treatment, as the President determines to be required or appropriate to carry out any such agreement.

(b) LIMITATIONS-

(1) IN GENERAL- No proclamation shall be made pursuant to subsection (a) decreasing any rate of duty to a rate which is less than 70 percent of the existing rate of duty.

(2) SPECIAL RULE FOR CERTAIN DUTY REDUCTIONS- If the rate of duty in effect at any time is an intermediate stage under section 2103(a) of the Bipartisan Trade Promotion Authority Act of 2002, the proclamation made pursuant to subsection (a) may provide for the reduction of each rate of duty at each such stage proclaimed under section 2103(a) by not more than 30 percent of such rate of duty, and may provide for a final rate of duty which is not less than the 70 percent of the rate of duty proclaimed as the final stage under section 2103(a).

(3) ROUNDING- If the President determines that such action will simplify the computation of the amount of duty computed with respect to an article, the President may exceed the limitations provided in paragraphs (1) and (2) by not more than the lesser of--

(A) the difference between such limitation and the next lower whole number, or

(B) one-half of one percent ad valorem.

TITLE III--BIODIESEL RENEWABLE FUEL

SEC. 301. SHORT TITLE; ETC.

(a) SHORT TITLE- This TITLE may be cited as the `Biodiesel Renewable Fuels Act'.

(b) AMENDMENT OF 1986 CODE- Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to or a 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. 302. CREDIT FOR BIODIESEL USED AS FUEL.

(a) IN GENERAL- Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits) is amended by inserting after section 40 the following new section:

`SEC. 40A. 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 biodiesel mixture credit.

`(b) DEFINITION OF BIODIESEL MIXTURE 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 the sum of the products of the biodiesel mixture rate for each blend of qualified biodiesel mixture and the number of gallons of the blend of the taxpayer for the taxable year.

`(B) BIODIESEL MIXTURE RATE- For purposes of subparagraph (A), the biodiesel mixture rate shall be--

`(i) the applicable amount for a B-1 blend,

`(ii) 3.0 cents for a B-2 blend, and

`(iii) 20.0 cents for a B-20 blend.

`(C) BLENDS- For purposes of this paragraph--

`(i) B-1 blend- The term `B-1 blend' means a qualified biodiesel mixture if at least 0.5 percent but less than 2.0 percent of the mixture is biodiesel.

`(ii) B-2 blend- The term `B-2 blend' means a qualified biodiesel mixture if at least 2.0 percent but less than 20 percent of the mixture is biodiesel.

`(iii) B-20 blend- The term `B-20 blend' means a qualified biodiesel mixture if at least 20 percent of the mixture is biodiesel.

`(D) APPLICABLE AMOUNT- For purposes of this paragraph, the term `applicable amount' means, in the case of a B-1 blend, the amount equal to 1.5 cents multiplied by a fraction the numerator of which is the percentage of biodiesel in the B-1 blend and the denominator of which is 1 percent.

`(2) QUALIFIED BIODIESEL MIXTURE-

`(A) IN GENERAL- The term `qualified biodiesel mixture' means a mixture of diesel and biodiesel 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.

`(B) 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 (A) is in a trade or business of the taxpayer; and

`(ii) for the taxable year in which such sale or use occurs.

`(C) 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.

`(c) COORDINATION WITH EXEMPTION FROM EXCISE TAX- The amount of the credit determined under this section with respect to any biodiesel shall, under regulations prescribed by the Secretary, be properly reduced to take into account any benefit provided with respect to such biodiesel solely by reason of the application of section 4041(n) or section 4081(f).

`(d) DEFINITIONS AND SPECIAL RULES- For purposes of this section--

`(1) BIODIESEL DEFINED-

`(A) IN GENERAL- The term `biodiesel' means the monoalkyl esters of long chain fatty acids derived from vegetable oils for use in compressional-ignition (diesel) engines. Such term shall include esters derived from vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, and mustard seeds.

`(B) REGISTRATION REQUIREMENTS- Such term shall only include a biodiesel which meets 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).

`(2) 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 the 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 biodiesel mixture rate applicable under subsection (b)(1)(B) 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.

`(3) 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) ELECTION TO HAVE BIODIESEL FUELS CREDIT NOT APPLY-

`(1) IN GENERAL- A taxpayer may elect to have this section not apply for any taxable year.

`(2) TIME FOR MAKING ELECTION- An election under paragraph (1) for any taxable year may be made (or revoked) at any time before the expiration of the 3-year period beginning on the last date prescribed by law for filing the return for such taxable year (determined without regard to extensions).

`(3) MANNER OF MAKING ELECTION- An election under paragraph (1) (or revocation thereof) shall be made in such manner as the Secretary may by regulations prescribe.'.

(b) CREDIT TREATED AS PART OF GENERAL BUSINESS CREDIT- Section 38(b) is amended by striking `plus' at the end of paragraph (14), by striking the period at the end of paragraph (15) and inserting `, plus', and by adding at the end the following:

`(16) the biodiesel fuels credit determined under section 40A.'.

(1) Section 39(d) is amended by adding at the end the following:

`(11) NO CARRYBACK OF BIODIESEL FUELS CREDIT BEFORE JANUARY 1, 2003- No portion of the unused business credit for any taxable year which is attributable to the biodiesel fuels credit determined under section 40A may be carried back to a taxable year beginning before January 1, 2003.'.

(2) 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:

`(11) the biodiesel fuels credit determined under section 40A.'.

(3) Section 6501(m) is amended by inserting `40A(e),' after `40(f),'.

(4) The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding after the item relating to section 40 the following new item:

`Sec. 40A. Biodiesel used as fuel.'.

(d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2002.

SEC. 303. REDUCTION OF MOTOR FUEL EXCISE TAXES ON BIODIESEL MIXTURES.

(a) IN GENERAL- Section 4081 (relating to manufacturers tax on petroleum products) is amended by adding at the end the following new subsection:

`(f) BIODIESEL MIXTURES- Under regulations prescribed by the Secretary--

`(1) IN GENERAL- In the case of the removal or entry of a qualified biodiesel mixture, the rate of tax under subsection (a) shall be the otherwise applicable rate reduced by the biodiesel mixture rate (if any) applicable to the mixture.

`(2) TAX PRIOR TO MIXING-

`(A) IN GENERAL- In the case of the removal or entry of diesel fuel for use in producing at the time of such removal or entry a qualified biodiesel mixture, the rate of tax under subsection (a) shall be the otherwise applicable rate, reduced by the amount determined under subparagraph (B).

`(B) APPLICABLE REDUCTION- For purposes of subparagraph (A), the amount determined under this subparagraph is an amount equal to the biodiesel mixture rate for the qualified biodiesel mixture to be produced from the diesel fuel, divided by a percentage equal to 100 percent minus the percentage of biodiesel which will be in the mixture.

`(3) DEFINITIONS- For purposes of this subsection, any term used in this subsection which is also used in section 40A shall have the meaning given such term by section 40A.

`(4) CERTAIN RULES TO APPLY- Rules similar to the rules of paragraphs (6) and (7) of subsection (c) shall apply for purposes of this subsection.'.

(b) CONFORMING AMENDMENTS-

(1) Section 4041 is amended by adding at the end the following new subsection:

`(n) BIODIESEL MIXTURES- Under regulations prescribed by the Secretary, in the case of the sale or use of a qualified biodiesel mixture (as defined in section 40A(b)(2)), the rates under paragraphs (1) and (2) of subsection (a) shall be the otherwise applicable rates, reduced by any applicable biodiesel mixture rate (as defined in section 40A(b)(1)(B)).'.

(2) Section 6427 is amended by redesignating subsection (p) as subsection (q) and by inserting after subsection (o) the following new subsection:

`(p) BIODIESEL MIXTURES- Except as provided in subsection (k), if any diesel fuel on which tax was imposed by section 4081 at a rate not determined under section 4081(f) is used by any person in producing a qualified biodiesel mixture (as defined in section 40A(b)(2)) 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 per gallon applicable biodiesel mixture rate (as defined in section 40A(b)(1)(B)) with respect to such fuel.'.

SEC. 304. HIGHWAY TRUST FUND HELD HARMLESS.

There are hereby transferred (from time to time) from the funds of the Commodity Credit Corporation amounts equivalent to the reductions that would occur (but for this section) in the receipts of the Highway Trust Fund by reason of the amendments made by this title. Such transfers shall be made on the basis of estimates made by the Secretary of the Treasury and adjustments shall be made to subsequent transfers to reflect any errors in the estimates.

SEC. 305. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE AND BIODIESEL PURCHASING REQUIREMENT.

Title III of the Energy Policy Act of 1992 is amended by striking section 306 (42 U.S.C. 13215) and inserting the following:

`SEC. 306. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE AND BIODIESEL PURCHASING REQUIREMENT.

`(a) ETHANOL-BLENDED GASOLINE- The head of each Federal agency (except the Secretary of Defense) shall ensure that, in areas in which ethanol-blended gasoline is available, the Federal agency purchases ethanol-blended gasoline containing at least 10 percent ethanol (or the highest available percentage of ethanol), rather than nonethanol-blended gasoline, for use in vehicles used by the agency.

`(b) BIODIESEL-

`(1) DEFINITION OF BIODIESEL- In this subsection, the term `biodiesel' has the meaning given the term in section 312(f).

`(2) REQUIREMENT- The head of each Federal agency (except the Secretary of Defense) shall ensure that the Federal agency purchases, for use in fueling fleet vehicles used by the Federal agency at the location at which fleet vehicles of the Federal agency are centrally fueled--

`(A) as of the date that is 5 years after the date of enactment of this paragraph, biodiesel-blended diesel fuel that contains at least 2 percent biodiesel, rather than nonbiodiesel-blended diesel fuel; and

`(B) as of the date that is 10 years after the date of enactment of this paragraph, biodiesel-blended diesel fuel that contains at least 20 percent biodiesel, rather than nonbiodiesel-blended diesel fuel.'.

END