S.Amdt. 2659

SA 2659. Ms. ERNST submitted an amendment intended to be proposed to
amendment SA 2360 proposed by Mr. Thune (for Mr. Graham) to the bill
H.R. 1, to provide for reconciliation pursuant to title II of H. Con.
Res. 14; which was ordered to lie on the table; as follows:

Strike section 70521 and insert the following:

SEC. 70521. EXTENSION AND MODIFICATION OF CLEAN FUEL
PRODUCTION CREDIT.

(a) Prohibition on Foreign Feedstocks.--
(1) In general.--Section 45Z(f)(1)(A) is amended--
(A) in clause (i)(II)(bb), by striking ``and'' at the end,
(B) in clause (ii), by striking the period at the end and
inserting ``, and'', and
(C) by adding at the end the following new clause:
``(iii) such fuel is exclusively derived from a feedstock
which was produced or grown in the United States, Mexico, or
Canada.''.
(2) Effective date.--The amendments made by this subsection
shall apply to transportation fuel produced after December
31, 2025.
(b) Prohibition on Negative Emission Rates.--
(1) In general.--Section 45Z(b)(1) is amended--
(A) by striking subparagraph (C) and inserting the
following:
``(C) Rounding of emissions rate.--The Secretary may round
the emissions rates under subparagraph (B) to the nearest
multiple of 5 kilograms of CO2e per mmBTU.'', and
(B) by adding at the end the following new subparagraph:
``(E) Prohibition on negative emission rates.--For purposes
of this section, the emissions rate for a transportation fuel
may not be less than zero.''.
(2) Effective date.--The amendments made by this subsection
shall apply to emissions rates published for transportation
fuel produced after December 31, 2025.
(c) Determination of Emissions Rate.--
(1) In general.--Section 45Z(b)(1)(B) is amended by adding
at the end the following new clauses:
``(iv) Exclusion of indirect land use changes.--
Notwithstanding clauses (i), (ii), and (iii), the emissions
rate shall be adjusted as necessary to exclude any emissions
attributed to indirect land use change. Any such adjustment
shall be based on regulations or methodologies determined by
the Secretary.
``(v) Animal manures.--With respect to any transportation
fuel which is derived from animal manure, the Secretary--

``(I) shall provide a distinct emissions rate with respect
to such fuel based on the specific animal manure feedstock,
which may include dairy manure, swine manure, poultry manure,
or any other sources as are determined appropriate by the
Secretary, and
``(II) notwithstanding subparagraph (E), may provide an
emissions rate that is less than zero.''.

(2) Conforming amendment.--Section 45Z(b)(1)(B)(i) is
amended by striking ``clauses (ii) and (iii)'' and inserting
``clauses (ii), (iii), (iv), and (v)''.
(3) Effective date.--The amendments made by this subsection
shall apply to emissions rates published for transportation
fuel produced after December 31, 2025.
(d) Extension of Clean Fuel Production Credit.--Section
45Z(g) is amended by striking ``December 31, 2027'' and
inserting ``December 31, 2029''.
(e) Preventing Double Credit.--Section 45Z(d)(5) is
amended--
(1) in subparagraph (A)--
(A) in clause (ii), by striking ``and'' at the end,
(B) in clause (iii), by striking the period at the end and
inserting ``, and'', and
(C) by adding at the end the following new clause:
``(iv) except as provided under subsection (f)(8), is not
produced from a fuel for which a credit under this section is
allowable.'', and
(2) by adding at the end the following new subparagraph:
``(C) Regulations and guidance.--The Secretary shall issue
such regulations or other guidance as the Secretary
determines necessary to carry out the purposes of
subparagraph (A)(iv).''.
(f) Sales to Unrelated Persons.--Section 45Z(f)(3) is
amended by adding at the end the following: ``The Secretary
may prescribe additional related person rules similar to the
rule described in the preceding sentence for entities which
are not described in such sentence, including rules for
related persons with respect to which the taxpayer has reason
to believe will sell fuel to an unrelated person in a manner
described in subsection (a)(4).''.
(g) Treatment of Sustainable Aviation Fuel.--
(1) Coordination of credits.--
(A) In general.--Section 45Z(a)(3) is amended--
(i) in the heading, by striking ``Special'' and inserting
``Adjusted'', and
(ii) by adding at the end the following new subparagraph:
``(C) Coordination of credits.--In the case of a
transportation fuel which is sustainable aviation fuel which
is sold before October 1, 2025, the amount of the credit
determined under paragraph (1) with respect to any gallon of
such fuel shall be reduced by an amount equal to the amount
of the sustainable aviation fuel credit allowable under
section 6426(k)(1).''.
(B) Effective date.--The amendments made by this paragraph
shall apply to fuel sold after December 31, 2024.
(2) Special rule for ethanol and sustainable aviation fuel
production.--
(A) In general.--Section 45Z(f) is amended by adding at the
end the following new paragraph:
``(8) Special rule for ethanol and sustainable aviation
fuel production.--
``(A) In general.--In the case of sustainable aviation fuel
produced using alcohol-to-jet processes where the ethanol
feedstock is produced by a taxpayer at a qualified facility,
both--
``(i) the taxpayer producing the ethanol feedstock, and
``(ii) the taxpayer producing the sustainable aviation
fuel,
may claim the clean fuel production credit under this section
with respect to their respective production activities,
provided that each taxpayer meets the requirements of this
section, including registration under section 4101 and
certification requirements under subsection (f)(4).
``(B) Different feedstocks and products.--For purposes of
this paragraph, ethanol and sustainable aviation fuel shall
be treated as distinct products derived from distinct
production processes, and the credit allowed under this
section shall not be denied to either taxpayer solely because
the other taxpayer claims a credit for their respective
production.
``(C) Coordination to prevent duplication.--The Secretary
shall prescribe regulations to ensure that the credits
claimed under this paragraph are not duplicative and that the
emissions factors and lifecycle greenhouse gas emissions
calculations appropriately reflect the contributions of each
taxpayer.''.
(B) Definition.--Section 45Z(d) is amended by adding at the
end the following new paragraph:
``(6) Alcohol-to-jet processes.--The term `alcohol-to-jet
processes' means processes for producing sustainable aviation
fuel in which ethanol or other alcohols are used as the
primary feedstock, as determined by the Secretary in
accordance with applicable standards, including ASTM
International Standard D7566.''.
(C) Guidance.--Section 45Z(e) is amended by adding at the
end the following: ``The Secretary shall issue additional
guidance, as necessary, for the implementation and
application of credits determined under this section for
ethanol and sustainable aviation fuel producers under
subsection (f)(8).''
(D) Effective date.--The amendments made by this paragraph
shall apply to fuel produced and sold after December 31,
2024.
(h) Sustainable Aviation Fuel Credit.--Section 6426(k) is
amended by adding at the end the following new paragraph:
``(4) Termination.--This subsection shall not apply to any
sale or use for any period after September 30, 2025.''.
(i) Registration of Producers of Fuel Eligible for Clean
Fuel Production Credit.--
(1) In general.--Section 13704(b)(5) of Public Law 117-169
is amended by striking ``after `section 6426(k)(3)),' '' and
inserting ``after `section 40B),' ''.
(2) Effective date.--The amendment made by this subsection
shall apply to transportation fuel produced after December
31, 2024.
(j) Extension and Modification of Small Agri-biodiesel
Producer Credit.--
(1) In general.--Section 40A is amended--
(A) in subsection (b)(4)--
(i) in subparagraph (A), by striking ``10 cents'' and
inserting ``20 cents'',
(ii) in subparagraph (B), by inserting ``in a manner which
complies with the requirements under section
45Z(f)(1)(A)(iii)'' after ``produced by an eligible small
agri-biodiesel producer'', and
(iii) by adding at the end the following new subparagraph:
``(D) Coordination with clean fuel production credit.--The
credit determined under this paragraph with respect to any
gallon of fuel shall be in addition to any credit determined
under section 45Z with respect to such gallon of fuel.'', and
(B) in subsection (g), by inserting ``(or, in the case of
the small agri-biodiesel producer

[[Page S4092]]

credit, any sale or use after December 31, 2026)'' after
``December 31, 2024''.
(2) Transfer of credit.--Section 6418(f)(1)(A) is amended
by adding at the end the following new clause:
``(xii) So much of the biodiesel fuels credit determined
under section 40A which consists of the small agri-biodiesel
producer credit determined under subsection (b)(4) of such
section.''.
(3) Effective date.--The amendments made by this subsection
shall apply to fuel sold or used after June 30, 2025.
(k) Restrictions Relating to Prohibited Foreign Entities.--
(1) In general.--Section 45Z(f), as amended by preceding
provisions of this Act, is amended by adding at the end the
following new paragraph:
``(9) Restrictions relating to prohibited foreign
entities.--
``(A) In general.--No credit shall be determined under
subsection (a) for any taxable year beginning after the date
of enactment of this paragraph if the taxpayer is a specified
foreign entity (as defined in section 7701(a)(51)(B)).
``(B) Other prohibited foreign entities.--No credit shall
be determined under subsection (a) for any taxable year
beginning after the date which is 2 years after the date of
enactment of this paragraph if the taxpayer is a foreign-
influenced entity (as defined in section 7701(a)(51)(D),
without regard to clause (i)(II) thereof).''.
(2) Effective date.--The amendment made by this subsection
shall apply to taxable years beginning after the date of
enactment of this Act.
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