APPORTIONMENT OF SMALL ETHANOL PRODUCER CREDIT.

SEC. 313. APPORTIONMENT OF SMALL ETHANOL PRODUCER CREDIT.(a) Allocation of Alcohol Fuels Credit to Patrons of a Cooperative.—Section 40(g) (relating to definitions and special rules for eligible small ethanol producer credit) is amended by adding at the end the following new paragraph:“(6) Allocation of small ethanol producer credit to patrons of cooperative.—“(A) Election to allocate.—118 STAT. 1468“(i) In general.—In the case of a cooperative organization described in section 1381(a), any portion of the credit determined under subsection (a)(3) for the taxable year may, at the election of the organization, be apportioned pro rata among patrons of the organization on the basis of the quantity or value of business done with or for such patrons for the taxable year. “(ii) Form and effect of election.—An election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year.“(B) Treatment of organizations and patrons.—“(i) Organizations.—The amount of the credit not apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under subsection (a)(3) for the taxable year of the organization.“(ii) Patrons.—The amount of the credit apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under such subsection for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment.“(iii) Special rules for decrease in credits for taxable year.—If the amount of the credit of the organization determined under such subsection for a taxable year is less than the amount of such credit shown on the return of the organization for such year, an amount equal to the excess of—“(I) such reduction, over “(II) the amount not apportioned to such patrons under subparagraph (A) for the taxable year,shall be treated as an increase in tax imposed by this chapter on the organization. Such increase shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.”.(b) Effective Date.—The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act.