EXTENSION AND MODIFICATION OF TAX BENEFITS FOR ALCOHOL FUELS.

SEC. 9003. EXTENSION AND MODIFICATION OF TAX BENEFITS FOR ALCOHOL FUELS. (a) Extension of Tax Benefits.— (1) Extension.— The following provisions are each amended by striking “2000” each place it appears and inserting “2007”: (A) Section 4041(b)(2)(C) (relating to termination of reduction in tax for qualified methanol and ethanol fuel). 112 STAT. 502 (B) Section 4041(k)(3) (relating to termination of rates relating to fuels containing alcohol). (C) Section 4081(c)(8) (relating to termination of special rate for taxable fuels mixed with alcohol). (D) Section 4091(c)(5) (relating to termination of reducedrate of tax for aviation fuel in alcohol mixture, etc.). (2) Extension of refund authority.— Paragraph (4) of section 6427(f) (relating to refund for gasoline, diesel fuel, and aviation fuel used to produce certain alcohol fuels), as amended by the Taxpayer Relief Act of 1997, is amended by striking “1999” and inserting “2007”. (3) Credit for alcohol used as a fuel.— Paragraph (1) of section 40(e) (relating to termination of credit for alcohol used as a fuel) is amended— (A) by striking “December 31, 2000” in subparagraph (A) and inserting “December 31, 2007”, and (B) by striking “January 1, 2001” and inserting “January 1, 2008”. (4) Tariff schedule.— Headings 9901.00.50 and 9901.00.52 of the Harmonized Tariff Schedule of the United States (19 U.S.C. 3007) are each amended in the effective period column by striking “10/1/2000” each place it appears and inserting “10/1/2007”. (b) Modification.— (1) In general.— Subsection (h) of section 40 (relating to alcohol used as fuel) is amended to read as follows: “(h) Reduced Credit for Ethanol Blenders.— “(1) In general.— In the case of any alcohol mixture credit or alcohol credit with respect to any sale or use of alcohol which is ethanol during calendar years 2001 through 2007— “(A) subsections (b)(1)(A) and (b)(20(A) shall be applied by substituting ‘the blender amount’ for ‘60 cents’, “(B) subsection (b)(3) shall be applied by substituting ‘the low-proof blender amount’ for ‘45 cents’ and ‘the blender amount’ for ‘60 cents’, and “(C) subparagraphs (A) and (B) of subsection (d)(3) shall be applied by substituting ‘the blender amount’ for ‘60 cents’ and ‘the low-proof blender amount’ for ‘45 cents’. (2) Amounts.— For purposes of paragraph (1), the blender amount and the low-proof blender amount shall be determined in accordance with the following table: In the case of any sale or use during calendar year The blender amount is: The low-proof blender amount is: 2001 or 2002 53 cents 39.26 cents 2003 or 2004 52 cents 38.52 cents 2005, 2006, or 2007 51 cents 37.78 cents”. (2) Conforming amendments.— (A) Section 4041(b)(2) is amended— (i) in subparagraph (A)(i), by striking “5.4 cents”and inserting “the applicable blender rate”, and (ii) by redesignating subparagraph (C), as amended by subsection (a)(1)(A), as subparagraph (D) and by inserting after subparagraph (B) the following: “(C) Applicable blender rate.— For purposes of subparagraph (A)(i), the applicable blender rate is— 112 STAT. 503 “(i) except as provided in clause (ii), 5.4 cents, and “(ii) for sales or uses during calendar years 2001 through 2007, ⅟₁₀ of the blender amount applicable under section 40(h)(2) for the calendar year in which the sale or use occurs.”. (B) Subparagraph (A) of section 4081(c)(4) is amended to read as follows: “(A) General rules.— “(i) Mixtures containing ethanol.— Except as provided in clause (ii), in the case of a qualified alcohol mixture which contains gasoline, the alcohol mixture rate is the excess of the rate which would (but for this paragraph) be determined under subsection (a) over— “(I) in the case of 10 percent gasohol, the applicable blender rate (as defined in section 4041(b)(2)(C)) per gallon, “(II) in the case of 7.7 percent gasohol, the number of cents per gallon equal to 77 percent of such applicable blender rate, and “(III) in the case of 5.7 percent gasohol, the number of cents per gallon equal to 57 percent of such applicable blender rate. “(ii) Mixtures not containing ethanol.— In the case of a qualified alcohol mixture which contains gasoline and none of the alcohol in which consists of ethanol, the alcohol mixture rate is the excess of the rate which would (but for this paragraph) be determined under subsection (a) over— “(I) in the case of 10 percent gasohol, 6 cents per gallon, “(II) in the case of 7.7 percent gasohol, 4.62 cents per gallon, and “(III) in the case of 5.7 percent gasohol, 3.42 cents per gallon.”. (C) Section 4081(c)(5) is amended by striking “5.4 cents” and inserting “the applicable blender rate (as defined in section 4041(b)(2)(C))”. (D) Section 4091(c)(1) is amended by striking “13.4 cents” each place it appears and inserting “the applicable blender amount” and by adding at the end the following:“For purposes of this paragraph, the term ‘applicable blender amount’ means 13.3 cents in the case of any sale or use during 2001 or 2002, 13.2 cents in the case of any sale or use during 2003 or 2004, 13.1 cents in the case of any sale or use during 2005, 2006, or 2007, and13.4 cents in the case of any sale or use during 2008or thereafter.”. (3) Effective date.— The amendments made by this subsection shall take effect on January 1, 2001.