[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 944 Introduced in Senate (IS)]
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115th CONGRESS
1st Session
S. 944
To amend the Internal Revenue Code of 1986 to reform and extend the
incentives for biodiesel.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 26, 2017
Mr. Grassley (for himself, Ms. Cantwell, Mr. Roberts, Ms. Hirono, Mr.
Blunt, Mr. Whitehouse, Mrs. Ernst, Ms. Heitkamp, Mr. Thune, Mr. Udall,
Mr. Heinrich, Mrs. Shaheen, Ms. Klobuchar, Mr. Franken, Mr. Donnelly,
and Mrs. Murray) 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 reform and extend the
incentives for biodiesel.
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 ``American Renewable Fuel and Job
Creation Act of 2017''.
SEC. 2. REFORM AND EXTENSION OF BIODIESEL TAX INCENTIVES.
(a) Income Tax Credit.--
(1) In general.--So much of section 40A of the Internal
Revenue Code 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 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 for 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, 2020''.
(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) Excise Tax Credit.--
(1) Reform.--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, 2020.''.
(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.--
(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) 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, 2020''.
(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 section.
(e) Effective Date.--The amendments made by this section shall
apply to fuel sold or used after December 31, 2016.
(f) Special Rule for 2017.--Notwithstanding any other provision of
law, in the case of any biodiesel mixture credit properly determined
under section 6426(c) of the Internal Revenue Code of 1986 for period
beginning after December 31, 2016, and ending before the date of the
enactment of this Act, such credit shall be allowed, and any refund or
payment attributable to such credit (including any payment under
section 6427(e) of such Code) shall be made, only in such manner as the
Secretary of the Treasury (or the Secretary's delegate) shall provide.
Such Secretary shall issue guidance within 30 days after the date of
the enactment of this Act providing for a one- time submission of
claims covering periods described in the preceding sentence. Such
guidance shall provide for a 180-day period for the submission of such
claims (in such manner as prescribed by such Secretary) to begin not
later than 30 days after such guidance is issued. Such claims shall be
paid by such Secretary not later than 60 days after receipt. If such
Secretary has not paid pursuant to a claim filed under this subsection
within 60 days after the date of the filing of such claim, the claim
shall be paid with interest from such date determined by using the
overpayment rate and method under section 6621 of such Code.
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