S.Amdt. 3380

SA 3380. Mr. NELSON of Florida (for himself and Mr. Crapo) submitted
an amendment intended to be proposed to amendment SA 3336 proposed by
Mr. Baucus to the bill H.R. 4213, to amend the Internal Revenue Code of
1986 to extend certain expiring provisions, and for other purposes;
which was ordered to lie on the table; as follows:

On page 268, between lines 11 and 12, insert the following:

SEC. __. 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 the date of the enactment of this paragraph,
``(C) which is acquired by the taxpayer by purchase (as
defined in section 179(d)) after the date of the enactment of
this paragraph, 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 the
date of the enactment of this Act.
(2) Special allowance for cellulosic biofuel plant
property.--The amendments made by subsection (b) shall apply
to property purchased and placed in service after the date of
the enactment of this Act.
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