I 

108TH CONGRESS 

1ST SESSION H. R. 3119

To amend the Internal Revenue Code of 1986 to allow a credit against 

income tax for biodiesel used as a fuel. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 17, 2003

Mr. HULSHOF (for himself, Mr. POMEROY, Mr. NUSSLE, Mr. YOUNG of Alaska, Mr. OBERSTAR, Mr. STENHOLM, Mrs. EMERSON, Mr. GRAVES, Mr. 

SKELTON, Mr. AKIN, and Mr. BOEHNER) introduced the following bill; 

which was referred to the Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to allow a 

credit against income tax for biodiesel used as a fuel.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Renewable Fuels and 

5 Transportation Infrastructure Enhancement Act of 

6 2003’’. 
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1 SEC. 2. ALCOHOL FUEL AND BIODIESEL MIXTURES EXCISE 

2 TAX CREDIT. 

3 (a) IN GENERAL.—Subchapter B of chapter 65 of the 

4 Internal Revenue Code of 1986 (relating to rules of special 

5 application) is amended by inserting after section 6425 

6 the following new section: 

7 ‘‘SEC. 6426. CREDIT FOR ALCOHOL FUEL AND BIODIESEL 

8 MIXTURES. 

9 ‘‘(a) ALLOWANCE OF CREDITS.—There shall be al10 lowed as a credit against the tax imposed by section 4081 

11 an amount equal to the sum of—

12 ‘‘(1) the alcohol fuel mixture credit, plus 

13 ‘‘(2) the biodiesel mixture credit. 

14 ‘‘(b) ALCOHOL FUEL MIXTURE CREDIT.—

15 ‘‘(1) IN GENERAL.—For purposes of this sec16 tion, the alcohol fuel mixture credit is the product 

17 of the applicable amount and the number of gallons 

18 of alcohol used by the taxpayer in producing any al19 cohol fuel mixture. 

20 ‘‘(2) APPLICABLE AMOUNT.—For purposes of 

21 this subsection—

22 ‘‘(A) IN GENERAL.—Except as provided in 

23 subparagraph (B), the applicable amount is 52 

24 cents (51 cents in the case of any sale or use 

25 after 2004). 
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1 ‘‘(B) MIXTURES NOT CONTAINING ETH2 ANOL.—In the case of an alcohol fuel mixture 

3 in which none of the alcohol consists of ethanol, 

4 the applicable amount is 60 cents. 

5 ‘‘(3) ALCOHOL FUEL MIXTURE.—For purposes 

6 of this subsection, the term ‘alcohol fuel mixture’ 

7 means a mixture of alcohol and a taxable fuel 

8 which—

9 ‘‘(A) is sold by the taxpayer producing 

10 such mixture to any person for use as a fuel, 

11 ‘‘(B) is used as a fuel by the taxpayer pro12 ducing such mixture, or 

13 ‘‘(C) is removed from the refinery by a 

14 person producing such mixture. 

15 ‘‘(4) OTHER DEFINITIONS.—For purposes of 

16 this subsection—

17 ‘‘(A) ALCOHOL.—The term ‘alcohol’ in18 cludes methanol and ethanol but does not in19 clude—

20 ‘‘(i) alcohol produced from petroleum, 

21 natural gas, or coal (including peat), or

22 ‘‘(ii) alcohol with a proof of less than 

23 190 (determined without regard to any 

24 added denaturants). 
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1 Such term also includes an alcohol gallon equiv2 alent of ethyl tertiary butyl ether or other 

3 ethers produced from such alcohol. 

4 ‘‘(B) TAXABLE FUEL.—The term ‘taxable 

5 fuel’ has the meaning given such term by sec6 tion 4083(a)(1). 

7 ‘‘(5) TERMINATION.—This subsection shall not 

8 apply to any sale or use for any period after Decem9 ber 31, 2010. 

10 ‘‘(c) BIODIESEL MIXTURE CREDIT.—

11 ‘‘(1) IN GENERAL.—For purposes of this sec12 tion, the biodiesel mixture credit is the product of 

13 the applicable amount and the number of gallons of 

14 biodiesel used by the taxpayer in producing any 

15 qualified biodiesel mixture. 

16 ‘‘(2) APPLICABLE AMOUNT.—For purposes of 

17 this subsection—

18 ‘‘(A) IN GENERAL.—Except as provided in 

19 subparagraph (B), the applicable amount is 50 

20 cents. 

21 ‘‘(B) AMOUNT FOR AGRI-BIODIESEL.—

22 ‘‘(i) IN GENERAL.—Subject to clause 

23 (ii), in the case of any biodiesel which is 

24 agri-biodiesel, the applicable amount is 

25 $1.00. 
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1 ‘‘(ii) CERTIFICATION FOR AGRI-BIO2 DIESEL.—Clause (i) shall apply only if the 

3 taxpayer described in paragraph (1) ob4 tains a certification (in such form and 

5 manner as prescribed by the Secretary) 

6 from the producer of the agri-biodiesel 

7 which identifies the product produced. 

8 ‘‘(3) DEFINITIONS.—Any term used in this sub9 section which is also used in section 40A shall have 

10 the meaning given such term by section 40A. 

11 ‘‘(4) TERMINATION.—This subsection shall not 

12 apply to any sale or use for any period after Decem13 ber 31, 2005. 

14 ‘‘(d) MIXTURE NOT USED AS A FUEL, ETC.—

15 ‘‘(1) IMPOSITION OF TAX.—If—

16 ‘‘(A) any credit was determined under this 

17 section with respect to alcohol or biodiesel used 

18 in the production of any alcohol fuel mixture or 

19 qualified biodiesel mixture, respectively, and 

20 ‘‘(B) any person— 

21 ‘‘(i) separates such alcohol or biodiesel 

22 from the mixture, or

23 ‘‘(ii) without separation, uses the mix24 ture other than as a fuel,
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1 then there is hereby imposed on such person a 

2 tax equal to the product of the applicable 

3 amount and the number of gallons of such alco4 hol or biodiesel. 

5 ‘‘(2) APPLICABLE LAWS.—All provisions of law, 

6 including penalties, shall, insofar as applicable and 

7 not inconsistent with this section, apply in respect of 

8 any tax imposed under paragraph (1) as if such tax 

9 were imposed by section 4081 and not by this sec10 tion.’’. 

11 (b) REGISTRATION REQUIREMENT.—Section 4101(a) 

12 of such Code (relating to registration) is amended by in13 serting ‘‘and every person producing biodiesel (as defined 

14 in section 40A(d)(1)) or alcohol (as defined in section 

15 6426(b)(4)(A))’’ after ‘‘4091’’. 

16 (c) CONFORMING AMENDMENTS.—

17 (1) Section 40(c) of such Code is amended by 

18 striking ‘‘section 4081(c), or section 4091(c)’’ and 

19 inserting ‘‘section 4091(c), section 6426, section 

20 6427(e), or section 6427(f)’’. 

21 (2) Section 40(d)(4)(B) of such Code is amend22 ed by striking ‘‘or 4081(c)’’. 

23 (3) Section 40(e)(1) of such Code is amended—

24 (A) by striking ‘‘2007’’ in subparagraph 

25 (A) and inserting ‘‘2010’’, and 
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1 (B) by striking ‘‘2008’’ in subparagraph 

2 (B) and inserting ‘‘2011’’. 

3 (4) Section 40(h) of such Code is amended—

4 (A) by striking ‘‘2007’’ in paragraph (1) 

5 and inserting ‘‘2010’’, and 

6 (B) by striking ‘‘, 2006, or 2007’’ in the 

7 table contained in paragraph (2) and inserting 

8 ‘‘through 2010’’. 

9 (5) Section 4041(b)(2)(B) of such Code is 

10 amended by striking ‘‘a substance other than petro11 leum or natural gas’’ and inserting ‘‘coal (including 

12 peat)’’. 

13 (6) Paragraph (1) of section 4041(k) of such 

14 Code is amended to read as follows: 

15 ‘‘(1) IN GENERAL.—Under regulations pre16 scribed by the Secretary, in the case of the sale or 

17 use of any liquid at least 10 percent of which con18 sists of alcohol (as defined in section 

19 6426(b)(4)(A)), the rate of the tax imposed by sub20 section (c)(1) shall be the comparable rate under 

21 section 4091(c).’’. 

22 (7) Section 4081 of such Code is amended by 

23 striking subsection (c). 

24 (8) Paragraph (2) of section 4083(a) of such 

25 Code is amended to read as follows: 
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1 ‘‘(2) GASOLINE.—The term ‘gasoline’—

2 ‘‘(A) includes any gasoline blend, other 

3 than qualified methanol or ethanol fuel (as de4 fined in section 4041(b)(2)(B)) or a denaturant 

5 of alcohol (as defined in section 6426(b)(4)(A)), 

6 and 

7 ‘‘(B) includes, to the extent prescribed in 

8 regulations—

9 ‘‘(i) any gasoline blend stock, and 

10 ‘‘(ii) any product commonly used as 

11 an additive in gasoline. 

12 For purposes of subparagraph (B)(i), the term ‘gas13 oline blend stock’ means any petroleum product 

14 component of gasoline.’’. 

15 (9) Section 6427 of such Code is amended by 

16 inserting after subsection (d) the following new sub17 section: 

18 ‘‘(e) ALCOHOL OR BIODIESEL USED TO PRODUCE

19 ALCOHOL FUEL AND BIODIESEL MIXTURES OR USED AS

20 FUELS.—Except as provided in subsection (k)—

21 ‘‘(1) USED TO PRODUCE A MIXTURE.—If any 

22 person produces a mixture described in section 6426 

23 in such person’s trade or business, the Secretary 

24 shall pay (without interest) to such person an 

25 amount equal to the alcohol fuel mixture credit or 
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1 the biodiesel mixture credit with respect to such mix2 ture. 

3 ‘‘(2) USED AS FUEL.—If alcohol (as defined in 

4 section 40(d)(1)) or biodiesel (as defined in section 

5 40A(d)(1)) or agri-biodiesel (as defined in section 

6 40A(d)(2)) which is not in a mixture with a taxable 

7 fuel (as defined in section 4083(a)(1))—

8 ‘‘(A) is used by any person as a fuel in a 

9 trade or business, or 

10 ‘‘(B) is sold by any person at retail to an11 other person and placed in the fuel tank of such 

12 person’s vehicle, 

13 the Secretary shall pay (without interest) to such 

14 person an amount equal to the alcohol credit (as de15 termined under section 40(b)(2)) or the biodiesel 

16 credit (as determined under section 40A(b)(2)) with 

17 respect to such fuel. 

18 ‘‘(3) COORDINATION WITH OTHER REPAYMENT

19 PROVISIONS.—No amount shall be payable for any 

20 period under paragraph (1) with respect to any mix21 ture with respect to which an amount may be 

22 claimed by such person as a credit under section 

23 6426 for such period. 

24 ‘‘(4) TERMINATION.—This subsection shall not 

25 apply with respect to—
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1 ‘‘(A) any alcohol fuel mixture (as defined 

2 in section 6426(b)(3)) or alcohol (as so defined) 

3 sold or used after December 31, 2010, and 

4 ‘‘(B) any qualified biodiesel mixture (with5 in the meaning of section 6426(c)(1)) or bio6 diesel (as so defined) or agri-biodiesel (as so de7 fined) sold or used after December 31, 2005.’’. 

8 (10) Subsection (f) of section 6427 of such 

9 Code is amended to read as follows: 

10 ‘‘(f) AVIATION FUEL USED TO PRODUCE CERTAIN

11 ALCOHOL FUELS.—

12 ‘‘(1) IN GENERAL.—Except as provided in sub13 section (k), if any aviation fuel on which tax was im14 posed by section 4091 at the regular tax rate is used 

15 by any person in producing a mixture described in 

16 section 4091(c)(1)(A) which is sold or used in such 

17 person’s trade or business, the Secretary shall pay 

18 (without interest) to such person an amount equal to 

19 the excess of the regular tax rate over the incentive 

20 tax rate with respect to such fuel. 

21 ‘‘(2) DEFINITIONS.—For purposes of paragraph 

22 (1)—

23 ‘‘(A) REGULAR TAX RATE.—The term ‘reg24 ular tax rate’ means the aggregate rate of tax
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1 imposed by section 4091 determined without re2 gard to subsection (c) thereof. 

3 ‘‘(B) INCENTIVE TAX RATE.—The term 

4 ‘incentive tax rate’ means the aggregate rate of 

5 tax imposed by section 4091 with respect to 

6 fuel described in subsection (c)(2) thereof. 

7 ‘‘(3) COORDINATION WITH OTHER REPAYMENT

8 PROVISIONS.—No amount shall be payable under 

9 paragraph (1) with respect to any aviation fuel with 

10 respect to which an amount is payable under sub11 section (d) or (l). 

12 ‘‘(4) TERMINATION.—This subsection shall not 

13 apply with respect to any mixture sold or used after 

14 September 30, 2007.’’. 

15 (11) Paragraphs (1) and (2) of section 6427(i) 

16 of such Code are amended by inserting ‘‘(f),’’ after 

17 ‘‘(d),’’. 

18 (12) Section 6427(i)(3) of such Code is amend19 ed—

20 (A) by striking ‘‘subsection (f)’’ both 

21 places it appears in subparagraph (A) and in22 serting ‘‘subsection (e)(1)’’, 

23 (B) by striking ‘‘gasoline, diesel fuel, or 

24 kerosene used to produce a qualified alcohol 

25 mixture (as defined in section 4081(c)(3))’’ in 
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1 subparagraph (A) and inserting ‘‘a mixture de2 scribed in section 6426’’, 

3 (C) by striking ‘‘subsection (f)(1)’’ in sub4 paragraph (B) and inserting ‘‘subsection 

5 (e)(1)’’, 

6 (D) by striking ‘‘20 days of the date of the 

7 filing of such claim’’ in subparagraph (B) and 

8 inserting ‘‘45 days of the date of the filing of 

9 such claim (20 days in the case of an electronic 

10 claim)’’, and 

11 (E) by striking ‘‘ALCOHOL MIXTURE’’ in 

12 the heading and inserting ‘‘ALCOHOL FUEL AND

13 BIODIESEL MIXTURE’’. 

14 (13) Section 6427(o) of such Code is amend15 ed—

16 (A) by striking paragraph (1) and insert17 ing the following new paragraph: 

18 ‘‘(1) any tax is imposed by section 4081, and’’, 

19 (B) by striking ‘‘such gasohol’’ in para20 graph (2) and inserting ‘‘the alcohol fuel mix21 ture (as defined in section 6426(b)(3))’’, 

22 (C) by striking ‘‘gasohol’’ both places it 

23 appears in the matter following paragraph (2) 

24 and inserting ‘‘alcohol fuel mixture’’, and 
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1 (D) by striking ‘‘GASOHOL’’ in the heading 

2 and inserting ‘‘ALCOHOL FUEL MIXTURE’’. 

3 (14) Section 9503(b)(1) of such Code is amend4 ed by adding at the end the following new flush sen5 tence: 

6 ‘‘For purposes of this paragraph, taxes received 

7 under sections 4041 and 4081 shall be determined 

8 without reduction for credits under section 6426.’’. 

9 (15) Section 9503(b)(4) of such Code is amend10 ed—

11 (A) by adding ‘‘or’’ at the end of subpara12 graph (C), 

13 (B) by striking the comma at the end of 

14 subparagraph (D)(iii) and inserting a period, 

15 and 

16 (C) by striking subparagraphs (E) and 

17 (F). 

18 (16) Section 9503(c)(2)(A)(i)(III) of such Code 

19 is amended by inserting ‘‘(other than subsection (e) 

20 thereof)’’ after ‘‘section 6427’’. 

21 (17) Section 9503(e)(2) of such Code is amend22 ed by striking subparagraph (B) and by redesig23 nating subparagraphs (C), (D), and (E) as subpara24 graphs (B), (C), and (D), respectively. 
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1 (18) The table of sections for subchapter B of 

2 chapter 65 of such Code is amended by inserting 

3 after the item relating to section 6425 the following 

4 new item:

‘‘Sec. 6426. Credit for alcohol fuel and biodiesel mixtures.’’.

5 (d) EFFECTIVE DATES.—

6 (1) IN GENERAL.—Except as provided in para7 graph (2), the amendments made by this section 

8 shall apply to fuel sold or used after December 31, 

9 2003. 

10 (2) REPEAL OF GENERAL FUND RETENTION OF

11 CERTAIN ALCOHOL FUELS TAXES.—The amend12 ments made by subsection (c)(15) shall apply to fuel 

13 sold or used after September 30, 2003. 

14 (e) FORMAT FOR FILING.—The Secretary of the 

15 Treasury shall describe the electronic format for filing 

16 claims described in section 6427(i)(3)(B) of the Internal 

17 Revenue Code of 1986 (as amended by subsection 

18 (b)(12)(C)) not later than October 31, 2003. 

19 SEC. 3. INCENTIVES FOR BIODIESEL. 

20 (a) IN GENERAL.—Subpart D of part IV of sub21 chapter A of chapter 1 of the Internal Revenue Code of 

22 1986 (relating to business related credits) is amended by 

23 inserting after section 40 the following new section:
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1 ‘‘SEC. 40A. BIODIESEL USED AS FUEL. 

2 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

3 the biodiesel fuels credit determined under this section for 

4 the taxable year is an amount equal to the sum of—

5 ‘‘(1) the biodiesel mixture credit, plus 

6 ‘‘(2) the biodiesel credit. 

7 ‘‘(b) DEFINITION OF BIODIESEL MIXTURE CREDIT

8 AND BIODIESEL CREDIT.—For purposes of this section—

9 ‘‘(1) BIODIESEL MIXTURE CREDIT.—

10 ‘‘(A) IN GENERAL.—The biodiesel mixture 

11 credit of any taxpayer for any taxable year is 

12 50 cents for each gallon of biodiesel used by the 

13 taxpayer in the production of a qualified bio14 diesel mixture. 

15 ‘‘(B) QUALIFIED BIODIESEL MIXTURE.—

16 The term ‘qualified biodiesel mixture’ means a 

17 mixture of biodiesel and diesel fuel which—

18 ‘‘(i) is sold by the taxpayer producing 

19 such mixture to any person for use as a 

20 fuel, 

21 ‘‘(ii) is used as a fuel by the taxpayer 

22 producing such mixture, or 

23 ‘‘(iii) is removed from the refinery by 

24 a person producing such mixture. 

25 ‘‘(C) SALE OR USE MUST BE IN TRADE OR

26 BUSINESS, ETC.—Biodiesel used in the produc-
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1 tion of a qualified biodiesel mixture shall be 

2 taken into account—

3 ‘‘(i) only if the sale or use described 

4 in subparagraph (B) is in a trade or busi5 ness of the taxpayer, and 

6 ‘‘(ii) for the taxable year in which 

7 such sale or use occurs. 

8 ‘‘(D) CASUAL OFF-FARM PRODUCTION NOT

9 ELIGIBLE.—No credit shall be allowed under 

10 this section with respect to any casual off-farm 

11 production of a qualified biodiesel mixture. 

12 ‘‘(2) BIODIESEL CREDIT.—

13 ‘‘(A) IN GENERAL.—The biodiesel credit of 

14 any taxpayer for any taxable year is 50 cents 

15 for each gallon of biodiesel which is not in a 

16 mixture with diesel fuel and which during the 

17 taxable year—

18 ‘‘(i) is used by the taxpayer as a fuel 

19 in a trade or business, or 

20 ‘‘(ii) is sold by the taxpayer at retail 

21 to a person and placed in the fuel tank of 

22 such person’s vehicle. 

23 ‘‘(B) USER CREDIT NOT TO APPLY TO BIO24 DIESEL SOLD AT RETAIL.—No credit shall be 

25 allowed under subparagraph (A)(i) with respect 
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1 to any biodiesel which was sold in a retail sale 

2 described in subparagraph (A)(ii). 

3 ‘‘(3) CREDIT FOR AGRI-BIODIESEL.—

4 ‘‘(A) IN GENERAL.—Subject to subpara5 graph (B), in the case of any biodiesel which is 

6 agri-biodiesel, paragraphs (1)(A) and (2)(A) 

7 shall be applied by substituting ‘$1.00’ for ‘50 

8 cents’. 

9 ‘‘(B) CERTIFICATION FOR AGRI-BIO10 DIESEL.—Subparagraph (A) shall apply only if 

11 the taxpayer described in paragraph (1)(A) or 

12 (2)(A) obtains a certification (in such form and 

13 manner as prescribed by the Secretary) from 

14 the producer of the agri-biodiesel which identi15 fies the product produced. 

16 ‘‘(c) COORDINATION WITH CREDIT AGAINST EXCISE

17 TAX.—The amount of the credit determined under this 

18 section with respect to any agri-biodiesel shall, under regu19 lations prescribed by the Secretary, be properly reduced 

20 to take into account any benefit provided with respect to 

21 such agri-biodiesel solely by reason of the application of 

22 section 6426 or 6427(e). 

23 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur24 poses of this section—
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1 ‘‘(1) BIODIESEL.—The term ‘biodiesel’ means 

2 the monoalkyl esters of long chain fatty acids de3 rived from plant or animal matter which meet—

4 ‘‘(A) the registration requirements for 

5 fuels and fuel additives established by the Envi6 ronmental Protection Agency under section 211 

7 of the Clean Air Act (42 U.S.C. 7545), and 

8 ‘‘(B) the requirements of the American So9 ciety of Testing and Materials D6751. 

10 ‘‘(2) AGRI-BIODIESEL.—The term ‘agri-bio11 diesel’ means biodiesel derived solely from virgin oils. 

12 Such term shall include esters derived from vege13 table oils from soybeans, corn, sunflower seeds, cot14 tonseeds, canola, crambe, rapeseeds, safflowers, 

15 flaxseeds, rice bran, and mustard seeds, and from 

16 animal fats.

17 ‘‘(3) MIXTURE OR BIODIESEL NOT USED AS A

18 FUEL, ETC.—

19 ‘‘(A) MIXTURES.—If—

20 ‘‘(i) any credit was determined under 

21 this section with respect to biodiesel used 

22 in the production of any qualified biodiesel 

23 mixture, and 

24 ‘‘(ii) any person—
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1 ‘‘(I) separates such biodiesel 

2 from the mixture, or

3 ‘‘(II) without separation, uses the 

4 mixture other than as a fuel, 

5 then there is hereby imposed on such person a 

6 tax equal to the product of the rate applicable 

7 under subsection (b)(1)(A) and the number of 

8 gallons of the mixture. 

9 ‘‘(B) BIODIESEL.—If—

10 ‘‘(i) any credit was determined under 

11 this section with respect to the retail sale 

12 of any biodiesel, and 

13 ‘‘(ii) any person mixes such biodiesel 

14 or uses such biodiesel other than as a fuel, 

15 then there is hereby imposed on such person a 

16 tax equal to the product of the rate applicable 

17 under subsection (b)(1)(A) and the number of 

18 gallons of such biodiesel. 

19 ‘‘(C) APPLICABLE LAWS.—All provisions of 

20 law, including penalties, shall, insofar as appli21 cable and not inconsistent with this section, 

22 apply in respect of any tax imposed under sub23 paragraph (A) as if such tax were imposed by 

24 section 4081 and not by this chapter. 
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1 ‘‘(4) PASS-THRU IN THE CASE OF ESTATES AND

2 TRUSTS.—Under regulations prescribed by the Sec3 retary, rules similar to the rules of subsection (d) of 

4 section 52 shall apply. 

5 ‘‘(e) TERMINATION.—This section shall not apply to 

6 any fuel sold after December 31, 2005.’’. 

7 (b) CREDIT TREATED AS PART OF GENERAL BUSI8 NESS CREDIT.—Section 38(b) of such Code (relating to 

9 current year business credit) is amended by striking 

10 ‘‘plus’’ at the end of paragraph (14), by striking the period 

11 at the end of paragraph (15) and inserting ‘‘, plus’’, and 

12 by adding at the end the following new paragraph: 

13 ‘‘(16) the biodiesel fuels credit determined 

14 under section 40A(a).’’. 

15 (c) CONFORMING AMENDMENTS.—

16 (1) Section 39(d) of such Code is amended by 

17 adding at the end the following new paragraph: 

18 ‘‘(11) NO CARRYBACK OF BIODIESEL FUELS

19 CREDIT BEFORE EFFECTIVE DATE.—No portion of 

20 the unused business credit for any taxable year 

21 which is attributable to the biodiesel fuels credit de22 termined under section 40A may be carried back to 

23 a taxable year ending on or before December 31, 

24 2003.’’. 
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1 (2)(A) Section 87 is of such Code amended to 

2 read as follows: 

3 ‘‘SEC. 87. ALCOHOL AND BIODIESEL FUELS CREDITS. 

4 ‘‘Gross income includes—

5 ‘‘(1) the amount of the alcohol fuel credit deter6 mined with respect to the taxpayer for the taxable 

7 year under section 40(a), and 

8 ‘‘(2) the biodiesel fuels credit determined with 

9 respect to the taxpayer for the taxable year under 

10 section 40A(a).’’. 

11 (B) The item relating to section 87 in the table 

12 of sections for part II of subchapter B of chapter 1 

13 of such Code is amended by striking ‘‘fuel credit’’ 

14 and inserting ‘‘and biodiesel fuels credits’’. 

15 (3) Section 196(c) of such Code is amended by 

16 striking ‘‘and’’ at the end of paragraph (9), by strik17 ing the period at the end of paragraph (10) and in18 serting ‘‘, and’’, and by adding at the end the fol19 lowing new paragraph: 

20 ‘‘(11) the biodiesel fuels credit determined 

21 under section 40A(a).’’. 

22 (4) The table of sections for subpart D of part 

23 IV of subchapter A of chapter 1 of such Code is 

24 amended by adding after the item relating to section 

25 40 the following new item:

‘‘Sec. 40A. Biodiesel used as fuel.’’.
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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to fuel sold after December 31, 

3 2003, in taxable years ending after such date.

Æ