ALCOHOL AND BIODIESEL EXCISE TAX CREDIT AND EXTENSION OF ALCOHOL FUELS INCOME TAX CREDIT.

SEC. 301. ALCOHOL AND BIODIESEL EXCISE TAX CREDIT AND EXTENSION OF ALCOHOL FUELS INCOME TAX CREDIT.(a) In General.—Subchapter B of chapter 65 (relating to rules of special application) is amended by inserting after section 6425 the following new section:“SEC. 6426. CREDIT FOR ALCOHOL FUEL AND BIODIESEL MIXTURES.“(a) Allowance of Credits.—There shall be allowed as a credit against the tax imposed by section 4081 an amount equal to the sum of—“(1) the alcohol fuel mixture credit, plus“(2) the biodiesel mixture credit.“(b) Alcohol Fuel Mixture Credit.—“(1) In general.—For purposes of this section, the alcohol fuel mixture credit is the product of the applicable amount and the number of gallons of alcohol used by the taxpayer in producing any alcohol fuel mixture for sale or use in a trade or business of the taxpayer.“(2) Applicable amount.—For purposes of this subsection—“(A) In general.—Except as provided in subparagraph (B), the applicable amount is 51 cents.“(B) Mixtures not containing ethanol.—In the case of an alcohol fuel mixture in which none of the alcohol consists of ethanol, the applicable amount is 60 cents.“(3) Alcohol fuel mixture.—For purposes of this subsection, the term ‘alcohol fuel mixture’ means a mixture of alcohol and a taxable fuel which—“(A) is sold by the taxpayer producing such mixture to any person for use as a fuel, or “(B) is used as a fuel by the taxpayer producing such mixture.118 STAT. 1460 For purposes of subparagraph (A), a mixture produced by any person at a refinery prior to a taxable event which includes ethyl tertiary butyl ether or other ethers produced from alcohol shall be treated as sold at the time of its removal from the refinery (and only at such time) to another person for use as a fuel.“(4) Other definitions.—For purposes of this subsection—“(A) Alcohol.—The term ‘alcohol’ includes methanol and ethanol but does not include—“(i) alcohol produced from petroleum, natural gas, or coal (including peat), or“(ii) alcohol with a proof of less than 190 (determined without regard to any added denaturants).Such term also includes an alcohol gallon equivalent of ethyl tertiary butyl ether or other ethers produced from such alcohol.“(B) Taxable fuel.—The term ‘taxable fuel’ has the meaning given such term by section 4083(a)(1).“(5) Termination.—This subsection shall not apply to any sale, use, or removal for any period after December 31, 2010.“(c) Biodiesel Mixture Credit.—“(1) In general.—For purposes of this section, the biodiesel mixture credit is the product of the applicable amount and the number of gallons of biodiesel used by the taxpayer in producing any biodiesel mixture for sale or use in a trade or business of the taxpayer.“(2) Applicable amount.—For purposes of this subsection—“(A) In general.—Except as provided in subparagraph (B), the applicable amount is 50 cents.“(B) Amount for agri-biodiesel.—In the case of any biodiesel which is agri-biodiesel, the applicable amount is $1.00.“(3) Biodiesel mixture.—For purposes of this section, the term ‘biodiesel mixture’ means a mixture of biodiesel and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of kerosene, which—“(A) is sold by the taxpayer producing such mixture to any person for use as a fuel, or “(B) is used as a fuel by the taxpayer producing such mixture.“(4) Certification for biodiesel.—No credit shall be allowed under this subsection unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer of the biodiesel which identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product.“(5) Other definitions.—Any term used in this subsection which is also used in section 40A shall have the meaning given such term by section 40A.“(6) Termination.—This subsection shall not apply to any sale, use, or removal for any period after December 31, 2006.“(d) Mixture Not Used As a Fuel, Etc.—“(1) Imposition of tax.—If—“(A) any credit was determined under this section with respect to alcohol or biodiesel used in the production of 118 STAT. 1461 any alcohol fuel mixture or biodiesel mixture, respectively, and “(B) any person—“(i) separates the alcohol or 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 applicable amount and the number of gallons of such alcohol or biodiesel.“(2) 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 paragraph (1) as if such tax were imposed by section 4081 and not by this section.“(e) Coordination With Exemption From Excise Tax.—Rules similar to the rules under section 40(c) shall apply for purposes of this section.”.(b) Registration Requirement.—Section 4101(a)(1) (relating to registration), as amended by section 861, is amended by inserting “and every person producing or importing biodiesel (as defined in section 40A(d)(1)) or alcohol (as defined in section 6426(b)(4)(A))” before “shall register with the Secretary”.(c) Additional Amendments.—(1) Section 40(c) is amended by striking “subsection (b)(2), (k), or (m) of section 4041, section 4081(c), or section 4091(c)” and inserting “section 4041(b)(2), section 6426, or section 6427(e)”.(2) Paragraph (4) of section 40(d) is amended to read as follows:“(4) Volume of alcohol.—For purposes of determining under subsection (a) the number of gallons of alcohol with respect to which a credit is allowable under subsection (a), the volume of alcohol shall include the volume of any denaturant (including gasoline) which is added under any formulas approved by the Secretary to the extent that such denaturants do not exceed 5 percent of the volume of such alcohol (including denaturants).”.(3) Section 40(e)(1) is amended—(A) by striking “2007” in subparagraph (A) and inserting “2010”, and(B) by striking “2008” in subparagraph (B) and inserting “2011”.(4) Section 40(h) is amended—(A) by striking “2007” in paragraph (1) and inserting “2010”, and(B) by striking “, 2006, or 2007” in the table contained in paragraph (2) and inserting “through 2010”.(5) Section 4041(b)(2)(B) is amended by striking “a substance other than petroleum or natural gas” and inserting “coal (including peat)”.(6) Section 4041 is amended by striking subsection (k).(7) Section 4081 is amended by striking subsection (c).(8) Paragraph (2) of section 4083(a) is amended to read as follows:“(2) Gasoline.—The term ‘gasoline’—118 STAT. 1462“(A) includes any gasoline blend, other than qualified methanol or ethanol fuel (as defined in section 4041(b)(2)(B)), partially exempt methanol or ethanol fuel (as defined in section 4041(m)(2)), or a denatured alcohol, and“(B) includes, to the extent prescribed in regulations—“(i) any gasoline blend stock, and“(ii) any product commonly used as an additive in gasoline (other than alcohol).For purposes of subparagraph (B)(i), the term ‘gasoline blend stock’ means any petroleum product component of gasoline.”. (9) Section 6427 is amended by inserting after subsection (d) the following new subsection:“(e) Alcohol or Biodiesel Used To Produce Alcohol Fuel and Biodiesel Mixtures.—Except as provided in subsection (k)—“(1) Used to produce a mixture.—If any person produces a mixture described in section 6426 in such person’s trade or business, the Secretary shall pay (without interest) to such person an amount equal to the alcohol fuel mixture credit or the biodiesel mixture credit with respect to such mixture.“(2) Coordination with other repayment provisions.—No amount shall be payable under paragraph (1) with respect to any mixture with respect to which an amount is allowed as a credit under section 6426.“(3) Termination.—This subsection shall not apply with respect to—“(A) any alcohol fuel mixture (as defined in section 6426(b)(3)) sold or used after December 31, 2010, and“(B) any biodiesel mixture (as defined in section 6426(c)(3)) sold or used after December 31, 2006.”.(10) Section 6427(i)(3) is amended—(A) by striking “subsection (f)” both places it appears in subparagraph (A) and inserting “subsection (e)(1)”, (B) by striking “gasoline, diesel fuel, or kerosene used to produce a qualified alcohol mixture (as defined in section 4081(c)(3))” in subparagraph (A) and inserting “a mixture described in section 6426”,(C) by adding at the end of subparagraph (A) the following new flush sentence:“In the case of an electronic claim, this subparagraph shall be applied without regard to clause (i).”,(D) by striking “subsection (f)(1)” in subparagraph (B) and inserting “subsection (e)(1)”, (E) by striking “20 days of the date of the filing of such claim” in subparagraph (B) and inserting “45 days of the date of the filing of such claim (20 days in the case of an electronic claim)”, and(F) by striking “alcohol mixture” in the heading and inserting “alcohol fuel and biodiesel mixture”.(11) Section 9503(b)(1) is amended by adding at the end the following new flush sentence:“For purposes of this paragraph, taxes received under sections 4041 and 4081 shall be determined without reduction for credits under section 6426.”. (12) Section 9503(b)(4) is amended—(A) by adding “or” at the end of subparagraph (C),118 STAT. 1463(B) by striking the comma at the end of subparagraph (D)(iii) and inserting a period, and(C) by striking subparagraphs (E) and (F).(13) Section 9503(c)(2)(A) is amended by adding at the end the following: “Clauses (i)(III) and (ii) shall not apply to claims under section 6427(e).”.(14) The table of sections for subchapter B of chapter 65 is amended by inserting after the item relating to section 6425 the following new item: “Sec. 6426. Credit for alcohol fuel and biodiesel mixtures.”. (d) Effective Dates.—(1) In general.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to fuel sold or used after December 31, 2004.(2) Registration requirement.—The amendment made by subsection (b) shall take effect on April 1, 2005.(3) Extension of alcohol fuels credit.—The amendments made by paragraphs (3), (4), and (14) of subsection (c) shall take effect on the date of the enactment of this Act.(4) Repeal of general fund retention of certain alcohol fuels taxes.—The amendments made by subsection (c)(12) shall apply to fuel sold or used after September 30, 2004.(e) Format for Filing.—The Secretary of the Treasury shall describe the electronic format for filing claims described in section 6427(i)(3)(B) of the Internal Revenue Code of 1986 (as amended by subsection (c)(10)(C)) not later than December 31, 2004.