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H.R. 2231House112th Congress (2011-2013)In Committee

Ethanol Modernization and Deficit Reduction Act

Sponsored by Kristi L. NoemRep. Kristi L. Noem (R-SD)
Introduced June 16, 2011

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Referred to the Committee on Ways and Means, and in addition to the Committee on the Budget, 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.

Ways and Means Committee

June 16, 2011

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HouseIntro Referral

Introduced in House

June 16, 2011

HouseIntro Referral

Referred to the Committee on Ways and Means, and in addition to the Committee on the Budget, 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.

Ways and Means Committee

June 16, 2011

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Introduced in HouseIssued June 16, 2011

I

112th CONGRESS

1st Session

H. R. 2231

IN THE HOUSE OF REPRESENTATIVES

June 16, 2011

Mrs. Noem (for herself, Mr. Berg, and Mr. Schock) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on the Budget, 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 terminate the ethanol tax credits, and for other purposes.

1.

Short title

This Act may be cited as the Ethanol Modernization and Deficit Reduction Act.

2.

Termination of ethanol tax credits

(a)

Excise tax credit and direct payments

Sections 6426(b)(6) and 6427(e)(6)(A) of the Internal Revenue Code of 1986 are each amended by striking December 31, 2011 and inserting June 30, 2011.

(b)

Income tax credit

Paragraph (1) of section 40(e) of such Code is amended—

(1)

by striking December 31, 2011 in subparagraph (A) and inserting June 30, 2011, and

(2)

by striking January 1, 2012 in subparagraph (B) and inserting July 1, 2011.

(c)

Effective Date

The amendments made by this section shall apply to any sale, use, or removal for any period after June 30, 2011.

3.

Extension and modification of alternative fuel vehicle refueling property credit

(a)

Extension

Subsection (g) of section 30C of the Internal Revenue Code of 1986 is amended by striking placed in service— and all that follows and inserting placed in service after the earlier of December 31, 2016, or the date on which the Secretary certifies that at least 53,000 qualified alternative fuel refueling properties (other than properties described in subsection (c)(2)(C)) have been placed in service..

(b)

Only certain ethanol blends eligible for credit

Subparagraph (A) of section 30C(c)(2) of the Internal Revenue Code of 1986 is amended to read as follows:

(A)

Any fuel—

(i)

at least 85 percent of the volume of which consists of one or more of the following: natural gas, compressed natural gas, liquified natural gas, liquefied petroleum gas, or hydrogen, or

(ii)

at least 85 percent of the volume of which consists of—

(I)

ethanol, or

(II)

ethanol and gasoline or one or more of the fuels described in clause (i), but only if at least 15 percent and not more than 85 percent of the volume of such fuel consists of ethanol.

.

(c)

Credit for dual-Use refueling property

Subsection (e) of section 30C of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(6)

Dual-use refueling property

(A)

In general

In the case of any dual-use refueling property, 100 percent of the cost of such property shall be treated as qualified alternative fuel refueling property if the taxpayer certifies, in such time and manner as the Secretary shall prescribe, that such property will be used in more than a de minimis capacity for the purposes described in section 179A(d)(3)(A) (applied as specified in subsection (c)(2)).

(B)

Recapture

If at any time within 5 years after the date of the certification under subparagraph (A) the dual-use refueling property ceases to be used as required under such subparagraph, 100 percent of the cost of such property shall be subject to recapture under paragraph (5).

(C)

Dual-use refueling property

For purposes of this paragraph, the term dual-use refueling property means property that is both qualified alternative fuel vehicle refueling property and property used—

(i)

to store or dispense fuels not described in subsection (c)(2), or

(ii)

to store fuels described in subsection (c)(2) for any purpose other than delivery of such fuel into the fuel tank of a motor vehicle.

.

(d)

Effective date

The amendments made by this section shall apply to property placed in service after June 30, 2011.

4.

Extension of cellulosic biofuel producer credit through 2014

Subparagraph (H) of section 40(b)(6) of the Internal Revenue Code of 1986 is amended by striking January 1, 2013 and inserting January 1, 2015.

5.

Extension of special depreciation allowance for cellulosic biofuel plant property

Subparagraph (D) of section 168(l)(2) of the Internal Revenue Code of 1986 is amended by striking January 1, 2013 and inserting January 1, 2015.

6.

Algae treated as a qualified feedstock for purposes of the cellulosic biofuel producer credit, etc

(a)

In general

Subclause (I) of section 40(b)(6)(E)(i) of the Internal Revenue Code of 1986 is amended to read as follows:

(I)

is derived solely by, or from, qualified feedstocks, and

.

(b)

Qualified feedstock; special rules for algae

Paragraph (6) of section 40(b) of the Internal Revenue Code of 1986, as amended by this Act, is amended by redesignating subparagraphs (F) and (G) as subparagraphs (H) and (I), respectively, and by inserting after subparagraph (E) the following new subparagraphs:

(F)

Qualified feedstock

For purposes of this paragraph, the term qualified feedstock means—

(i)

any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis, and

(ii)

any cultivated algae, cyanobacteria, or lemna.

(G)

Special rules for algae

In the case of fuel which is derived by, or from, feedstock described in subparagraph (F)(ii) and which is sold by the taxpayer to another person for refining by such other person into a fuel which meets the requirements of subparagraph (E)(i)(II)—

(i)

such sale shall be treated as described in subparagraph (C)(i),

(ii)

such fuel shall be treated as meeting the requirements of subparagraph (E)(i)(II) in the hands of such taxpayer, and

(iii)

except as provided in this subparagraph, such fuel (and any fuel derived from such fuel) shall not be taken into account under subparagraph (C) with respect to the taxpayer or any other person.

.

(c)

Algae treated as a qualified feedstock for purposes of bonus depreciation for biofuel plant property

(1)

In general

Subparagraph (A) of section 168(l)(2) of the Internal Revenue Code of 1986 is amended by striking solely to produce cellulosic biofuel and inserting solely to produce second generation biofuel (as defined in section 40(b)(6)(E)).

(2)

Conforming amendments

Subsection (l) of section 168 of such Code, as amended by this Act, is amended—

(A)

by striking cellulosic biofuel each place it appears in the text thereof and inserting second generation biofuel,

(B)

by striking paragraph (3) and redesignating paragraphs (4) through (8) as paragraphs (3) through (7), respectively,

(C)

by striking Cellulosic in the heading of such subsection and inserting Second Generation, and

(D)

by striking cellulosic in the heading of paragraph (2) and inserting second generation.

(d)

Conforming amendments

(1)

Section 40 of the Internal Revenue Code of 1986, as amended by this Act, is amended—

(A)

by striking cellulosic biofuel each place it appears in the text thereof and inserting second generation biofuel,

(B)

by striking Cellulosic in the headings of subsections (b)(6), (b)(6)(E), and (d)(3)(D) and inserting Second generation, and

(C)

by striking cellulosic in the headings of subsections (b)(6)(C), (b)(6)(D), (b)(6)(H), (d)(6), and (e)(3) and inserting second generation.

(2)

Clause (ii) of section 40(b)(6)(E) of such Code is amended by striking Such term shall not and inserting The term second generation biofuel shall not.

(3)

Paragraph (1) of section 4101(a) of such Code is amended by striking cellulosic biofuel and inserting second generation biofuel.

(e)

Effective date

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall apply to fuels sold or used after the date of the enactment of this Act.

(2)

Application to bonus depreciation

The amendments made by subsection (c) shall apply to property placed in service after the date of the enactment of this Act.

7.

Budgetary effects

(a)

PAYGO scorecard

The budgetary effects of this Act (and the amendments made by this Act) shall not be entered on either PAYGO scorecard maintained pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 2010.

(b)

Senate PAYGO scorecard

The budgetary effects of this Act (and the amendments made by this Act) shall not be recorded on any PAYGO scorecard maintained for purposes of section 201 of S. Con. Res. 21 (110th Congress).