Text: S.1250 — 111th Congress (2009-2010)All Information (Except Text)

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Introduced in Senate (06/11/2009)


111th CONGRESS
1st Session
S. 1250


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

June 11, 2009

Mr. Nelson of Florida (for himself, Mr. Crapo, Mr. Bingaman, Mr. Bennet, Mr. Martinez, Mr. Cardin, and Mr. Brownback) 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 2009”.

SEC. 2. Inclusion of algae-based biofuel in definition of cellulosic biofuel.

(a) Cellulosic biofuel producer credit.—

(1) GENERAL RULE.—Paragraph (4) of section 40(a) of the Internal Revenue Code of 1986 is amended by inserting “and algae-based” after “cellulosic”.

(2) DEFINITIONS.—Paragraph (6) of section 40(b) of such Code is amended—

(A) by inserting “and algae-based” after “Cellulosic” in the heading,

(B) by striking subparagraph (A) and inserting the following:

“(A) IN GENERAL.—The cellulosic and algae-based biofuel producer credit of any taxpayer is an amount equal to the applicable amount for each gallon of—

“(i) qualified cellulosic biofuel production, and

“(ii) qualified algae-based biofuel production.”,

(C) by redesignating subparagraphs (F), (G), and (H) as subparagraphs (I), (J), and (K), respectively,

(D) by inserting “and algae-based” after “cellulosic” in the heading of subparagraph (I), as so redesignated,

(E) by inserting “or algae-based biofuel, whichever is appropriate,” after “cellulosic biofuel” in subparagraph (J), as so redesignated,

(F) by inserting “and qualified algae-based biofuel production” after “qualified cellulosic biofuel production” in subparagraph (K), as so redesignated, and

(G) by inserting after subparagraph (E) the following new subparagraphs:

“(F) QUALIFIED ALGAE-BASED BIOFUEL PRODUCTION.—For purposes of this section, the term ‘qualified algae-based biofuel production’ means any algae-based biofuel which is produced by the taxpayer, and which during the taxable year—

“(i) is sold by the taxpayer to another person—

“(I) for use by such other person in the production of a qualified algae-based biofuel mixture in such other person's trade or business (other than casual off-farm production),

“(II) for use by such other person as a fuel in a trade or business, or

“(III) who sells such algae-based biofuel at retail to another person and places such algae-based biofuel in the fuel tank of such other person, or

“(ii) is used or sold by the taxpayer for any purpose described in clause (i).

The qualified algae-based biofuel production of any taxpayer for any taxable year shall not include any alcohol which is purchased by the taxpayer and with respect to which such producer increases the proof of the alcohol by additional distillation.

“(G) QUALIFIED ALGAE-BASED BIOFUEL MIXTURE.—For purposes of this paragraph, the term ‘qualified algae-based biofuel mixture’ means a mixture of algae-based biofuel and gasoline or of algae-based biofuel and a special fuel which—

“(i) is sold by the person producing such mixture to any person for use as a fuel, or

“(ii) is used as a fuel by the person producing such mixture.

“(H) ALGAE-BASED BIOFUEL.—For purposes of this paragraph—

“(i) IN GENERAL.—The term ‘algae-based biofuel’ means any liquid fuel, including gasoline, diesel, aviation fuel, and ethanol, which—

“(I) is produced from the biomass of algal organisms, and

“(II) 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).

“(ii) ALGAL ORGANISM.—The term ‘algal organism’ means a single- or multi-cellular organism which is primarily aquatic and classified as a non-vascular plant, including microalgae, blue-green algae (cyanobacteria), and macroalgae (seaweeds).

“(iii) EXCLUSION OF LOW-PROOF ALCOHOL.—Such term shall not include any alcohol with a proof of less than 150. The determination of the proof of any alcohol shall be made without regard to any added denaturants.”.

(3) CONFORMING AMENDMENTS.—

(A) Subparagraph (D) of section 40(d)(3) of such Code is amended—

(i) by inserting “and algae-based” after “cellulosic” in the heading,

(ii) by inserting “or (b)(6)(F)” after “(b)(6)(C)” in clause (ii), and

(iii) by inserting “or algae-based” after “such cellulosic”.

(B) Paragraph (6) of section 40(d) of such Code is amended—

(i) by inserting “and algae-based” after “cellulosic” in the heading, and

(ii) by striking the first sentence and inserting “No cellulosic and algae-based biofuel producer credit shall be determined under subsection (a) with respect to any cellulosic or algae-based biofuel unless such cellulosic or algae-based biofuel is produced in the United States and used as a fuel in the United States.”

(C) Paragraph (3) of section 40(e) of such Code is amended by inserting “and algae-based” after “cellulosic” in the heading.

(D) Paragraph (1) of section 4101(a) of such Code is amended—

(i) by inserting “or algae-based” after “cellulosic”, and

(ii) by inserting “and 40(b)(6)(H), respectively” after “section 40(b)(6)(E)”.

(b) Special allowance for cellulosic biofuel plant property.—Subsection (l) of section 168 of the Internal Revenue Code of 1986 is amended—

(1) by inserting “and algae-based” after “cellulosic” in the heading,

(2) by inserting “and any qualified algae-based biofuel plant property” after “qualified cellulosic biofuel plant property” in paragraph (1),

(3) by redesignating paragraphs (4) through (8) as paragraphs (6) through (10), respectively,

(4) by inserting “or qualified algae-based biofuel plant property” after “cellulosic biofuel plant property” in paragraph (7)(C), as so redesignated,

(5) by striking “with respect to” and all that follows in paragraph (9), as so redesignated, and inserting “with respect to any qualified cellulosic biofuel plant property and any qualified algae-based biofuel plant property which ceases to be such qualified property.”,

(6) by inserting “or qualified algae-based biofuel plant property” after “cellulosic biofuel plant property” in paragraph (10), as so redesignated, and

(7) by inserting after paragraph (3) the following new paragraphs:

“(4) QUALIFIED ALGAE-BASED BIOFUEL PLANT PROPERTY.—The term ‘qualified algae-based biofuel plant property’ means property of a character subject to the allowance for depreciation—

“(A) which is used in the United States solely to produce algae-based biofuel,

“(B) the original use of which commences with the taxpayer after December 31, 2008,

“(C) which is acquired by the taxpayer by purchase (as defined in section 179(d)) after December 31, 2008, but only if no written binding contract for the acquisition was in effect on or before such date, and

“(D) which is placed in service by the taxpayer before January 1, 2013.

“(5) ALGAE-BASED BIOFUEL.—

“(A) IN GENERAL.—The term ‘algae-based biofuel’ means any liquid fuel which is produced from the biomass of algal organisms.

“(B) ALGAL ORGANISM.—The term ‘algal organism’ means a single- or multi-cellular organism which is primarily aquatic and classified as a non-vascular plant, including microalgae, blue-green algae (cyanobacteria), and macroalgae (seaweeds).”.

(c) Effective dates.—

(1) CELLULOSIC BIOFUEL PRODUCER CREDIT.—The amendments made by subsection (a) shall apply to fuel produced after December 31, 2008.

(2) SPECIAL ALLOWANCE FOR CELLULOSIC BIOFUEL PLANT PROPERTY.—The amendments made by subsection (b) shall apply to property purchased and placed in service after December 31, 2008.