VOLUMETRIC EXCISE TAX CREDIT FOR ALTERNATIVE FUELS.

SEC. 11113. VOLUMETRIC EXCISE TAX CREDIT FOR ALTERNATIVE FUELS.(a) Imposition of Tax.—(1) In general.—Section 4041(a)(2)(B) (relating to rate of tax) is amended—(A) by adding “and” at the end of clause (i),(B) by striking clauses (ii) and (iii),(C) by striking the last sentence, and(D) by adding after clause (i) the following new clause:“(ii) in the case of liquefied natural gas, any liquid fuel (other than ethanol and methanol) derived from coal (including peat), and liquid hydrocarbons derived from biomass (as defined in section 29(c)(3)), 24.3 cents per gallon.”.(2) Treatment of compressed natural gas.—Section 4041(a)(3) (relating to compressed natural gas) is amended—(A) by striking “48.54 cents per MCF (determined at standard temperature and pressure)” in subparagraph (A) and inserting “18.3 cents per energy equivalent of a gallon of gasoline”, and(B) by striking “MCF” in subparagraph (C) and inserting “energy equivalent of a gallon of gasoline”.(3) New reference.—The heading for paragraph (2) of section 4041(a) is amended by striking “Special motor fuels” and inserting “Alternative fuels”.119 STAT. 1947(b) Credit for Alternative Fuel and Alternative Fuel Mixtures.—(1) In general.—Section 6426(a) (relating to allowance of credits) is amended to read as follows:“(a) Allowance of Credits.—There shall be allowed as a credit—“(1) against the tax imposed by section 4081 an amount equal to the sum of the credits described in subsections (b), (c), and (e), and“(2) against the tax imposed by section 4041 an amount equal to the sum of the credits described in subsection (d).No credit shall be allowed in the case of the credits described in subsections (d) and (e) unless the taxpayer is registered under section 4101.”.(2) Alternative fuel and alternative fuel mixture credit.—Section 6426 (relating to credit for alcohol fuel and biodiesel mixtures) is amended by redesignating subsections (d) and (e) as subsections (f) and (g) and by inserting after subsection (c) the following new subsections:“(d) Alternative Fuel Credit.—“(1) In general.—For purposes of this section, the alternative fuel credit is the product of 50 cents and the number of gallons of an alternative fuel or gasoline gallon equivalents of a nonliquid alternative fuel sold by the taxpayer for use as a fuel in a motor vehicle or motorboat, or so used by the taxpayer.“(2) Alternative fuel.—For purposes of this section, the term ‘alternative fuel’ means—“(A) liquefied petroleum gas,“(B) P Series Fuels (as defined by the Secretary of Energy under section 13211(2) of title 42, United States Code),“(C) compressed or liquefied natural gas,“(D) liquefied hydrogen,“(E) any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, and“(F) liquid hydrocarbons derived from biomass (as defined in section 29(c)(3)).Such term does not include ethanol, methanol, or biodiesel.“(3) Gasoline gallon equivalent.—For purposes of this subsection, the term ‘gasoline gallon equivalent’ means, with respect to any nonliquid alternative fuel, the amount of such fuel having a Btu content of 124,800 (higher heating value).“(4) Termination.—This subsection shall not apply to any sale or use for any period after September 30, 2009 (September 30, 2014, in the case of any sale or use involving liquefied hydrogen).“(e) Alternative Fuel Mixture Credit.—“(1) In general.—For purposes of this section, the alternative fuel mixture credit is the product of 50 cents and the number of gallons of alternative fuel used by the taxpayer in producing any alternative fuel mixture for sale or use in a trade or business of the taxpayer.“(2) Alternative fuel mixture.—For purposes of this section, the term ‘alternative fuel mixture’ means a mixture of alternative fuel and taxable fuel (as defined in subparagraph (A), (B), or (C) of section 4083(a)(1)) which—119 STAT. 1948“(A) is sold by the taxpayer producing such mixture to any person for use as fuel, or“(B) is used as a fuel by the taxpayer producing such mixture.“(3) Termination.—This subsection shall not apply to any sale or use for any period after September 30, 2009 (September 30, 2014, in the case of any sale or use involving liquefied hydrogen).”.(3) Conforming amendments.—(A) The section heading for section 6426 is amended by striking “alcohol fuel and biodiesel” and inserting “alcohol fuel, biodiesel, and alternative fuel”.(B) The table of sections for subchapter B of chapter 65 is amended by striking “alcohol fuel and biodiesel” in the item relating to section 6426 and inserting “alcohol fuel, biodiesel, and alternative fuel”.(C) Section 6427(e) is amended—(i) by inserting “or the alternative fuel mixture credit” after “biodiesel mixture credit” in paragraph (1),(ii) by redesignating paragraph (2) as paragraph (3) and paragraph (4) as paragraph (5),(iii) by inserting after paragraph (1) the following new paragraph:“(2) Alternative fuel.—If any person sells or uses an alternative fuel (as defined in section 6426(d)(2)) for a purpose described in section 6426(d)(1) in such person’s trade or business, the Secretary shall pay (without interest) to such person an amount equal to the alternative fuel credit with respect to such fuel.”,(iv) by striking “under paragraph (1) with respect to any mixture” in paragraph (3) (as redesignated by clause (ii)) and inserting “under paragraph (1) or (2) with respect to any mixture or alternative fuel”,(v) by inserting after paragraph (3) (as so redesignated) the following new paragraph:“(4) Registration requirement for alternative fuels.—The Secretary shall not make any payment under this subsection to any person with respect to any alternative fuel credit or alternative fuel mixture credit unless the person is registered under section 4101.”,(vi) by striking “and” at the end of paragraph (5)(A) (as redesignated by clause (ii)),(vii) by striking the period at the end of paragraph (5)(B) (as so redesignated) and inserting a comma,(viii) by adding at the end of paragraph (5) (as so redesignated) the following new subparagraphs:“(C) except as provided in subparagraph (D), any alternative fuel or alternative fuel mixture (as defined in subsection (d)(2) or (e)(3) of section 6426) sold or used after September 30, 2009, and“(D) any alternative fuel or alternative fuel mixture (as so defined) involving liquefied hydrogen sold or used after September 30, 2014.”, and(ix) by striking “or Biodiesel Used to Produce Alcohol Fuel and Biodiesel Mixtures” in the 119 STAT. 1949 heading and inserting “, Biodiesel, or Alternative Fuel”.(c) Additional Registration Requirements.—Section 4101(a)(1) (relating to registration) is amended by striking “4041(a)(1)” and inserting “4041(a)”.(d) Effective Date.—The amendments made by this section shall apply to any sale or use for any period after September 30, 2006.