Provides for transfers of funds from the Commodity Credit Corporation to the Highway Trust Fund in amounts equivalent to the reductions that would occur but for this Act.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1279 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 1279
To amend the Internal Revenue Code of 1986 to provide tax incentives
for the use of biodiesel as a fuel.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 13, 2003
Mr. Hulshof (for himself, Mr. Pomeroy, Mr. Lewis of Kentucky, Mr.
Kennedy of Minnesota, Mr. Weller, Mr. Lipinski, Mrs. Emerson, Mr.
Skelton, Mr. Shimkus, Mr. Berry, Mr. Ryun of Kansas, Mr. McIntyre, Mr.
Johnson of Illinois, Mr. Payne, Mr. Rehberg, Mr. Costello, Mr.
Hostettler, Mr. Peterson of Minnesota, Mr. LaHood, Mr. Ross, Mr. Leach,
Mr. Andrews, Mr. Bereuter, Mr. Gilchrest, and Mr. Etheridge) introduced
the following bill; which was referred to the Committee on Ways and
Means, and in addition to the Committee on Agriculture, for a period to
be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide tax incentives
for the use of biodiesel as a fuel.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. INCENTIVES FOR BIODIESEL.
(a) Credit for Biodiesel Used as a Fuel.--
(1) In general.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (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 an amount equal to
the biodiesel mixture rate for each gallon of biodiesel
used by the taxpayer in the production of a qualified
biodiesel mixture.
``(B) Biodiesel mixture rate.--For purposes of
subparagraph (A), the biodiesel mixture rate is 1 cent
for each whole percentage point (not exceeding 20
percentage points) of biodiesel in the mixture.
``(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.--
``(i) In general.--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.
``(ii) Certification for biodiesel.--
Biodiesel used in the production of a qualified
biodiesel mixture shall be taken into account
only if the taxpayer described in subparagraph
(A) obtains a certification from the producer
of the biodiesel which identifies the product
produced.
``(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.--The term `biodiesel' means the
monoalkyl esters of long chain fatty acids derived solely from
virgin 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,
rice bran, and mustard seeds.
``(2) Registration requirements.--The term `biodiesel'
shall only include a biodiesel which meets--
``(A) 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), and
``(B) the requirements of the American Society of
Testing and Materials D6751.
``(3) 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 such 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.
``(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.
``(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).''
(2) Credit treated as part of general business credit.--
Section 38(b) of such Code is amended by redesignating
paragraphs (4) through (15) as paragraphs (5) through (16),
respectively, and by inserting after paragraph (3) the
following new paragraph:
``(4) the biodiesel fuels credit determined under section
40A(a),''.
(3) Conforming amendments.--
(A) Section 39(d) of such Code is amended by adding
at the end the following new paragraph:
``(11) No carryback of biodiesel fuels credit before
january 1, 2004.--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, 2004.''.
(B) Section 196(c) of such Code is amended by
redesignating paragraphs (4) through (10) as paragraphs
(5) through (11), respectively, and by inserting after
paragraph (3) the following new paragraph:
``(4) the biodiesel fuels credit determined under section
40A(a),''.
(C) Section 6501(m) of such Code is amended by
inserting ``40A(e),'' after ``40(f),''.
(D) The table of sections for subpart D of part IV
of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 40 the
following new item:
``Sec. 40A. Biodiesel used as fuel.''.
(4) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 2003.
(b) Reduction of Motor Fuel Excise Taxes on Biodiesel Mixtures.--
(1) In general.--Section 4081 of such Code (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.--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 rate determined under
paragraph (1), 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.''.
(2) Conforming amendments.--
(A) Section 4041 of such Code 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)).''.
(B) Section 6427 of such Code 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.''.
(3) Effective date.--The amendments made by this subsection
shall apply to any fuel sold after December 31, 2003.
(c) Highway Trust Fund Held Harmless.--There are hereby transferred
(from time to time) from the funds of the Commodity Credit Corporation
amounts determined by the Secretary of the Treasury to be equivalent to
the reductions that would occur (but for this subsection) in the
receipts of the Highway Trust Fund by reason of the amendments made by
this section.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Department Operations, Oversight, Nutrition and Forestry.
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