I 

111TH CONGRESS 

1ST SESSION H. R. 3985 

To amend the Internal Revenue Code of 1986 to provide for a second 

generation biofuel producer credit, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 2, 2009 

Mr. VAN HOLLEN 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 provide 

for a second generation biofuel producer credit, and for 

other purposes. 

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 ‘‘Second Generation 

5 Biofuel Producer Tax Credit Act of 2009’’. 

6 SEC. 2. SECOND GENERATION BIOFUEL PRODUCER CRED7 IT. 

8 (a) CREDIT AMOUNT DETERMINED BASED ON BTU 

9 CONTENT OF FUEL.—Subparagraph (B) of section 


tjames on DSKG8SOYB1PROD with BILLS
2 

•HR 3985 IH

1 40(b)(6) of the Internal Revenue Code of 1986 is amended 

2 to read as follows: 

3 ‘‘(B) APPLICABLE AMOUNT.—For purposes 

4 of this paragraph— 

5 ‘‘(i) IN GENERAL.—The term ‘applica6 ble amount’ means, with respect to any 

7 type of second generation biofuel, the dol8 lar amount which bears the same ratio to 

9 $1.01 as the BTU content of such type of 

10 fuel bears to the BTU content of ethanol. 

11 For purposes of the preceding sentence, 

12 the types of second generation biofuel and 

13 the BTU content of such types shall be de14 termined in accordance with the table pre15 scribed under clause (ii). 

16 ‘‘(ii) BTU CONTENT DETERMINED BY

17 SECRETARY.—The Secretary, after con18 sultation with the Secretary of Energy, 

19 shall prescribe a table which lists the types 

20 of second generation biofuel and the BTU 

21 content of each such type. 

22 ‘‘(iii) COORDINATION WITH ALCOHOL

23 CREDITS.—In the case of second genera24 tion biofuel which is alcohol, the applicable 


tjames on DSKG8SOYB1PROD with BILLS
3 

•HR 3985 IH

1 amount determined under clause (i) shall 

2 be reduced by the sum of— 

3 ‘‘(I) the amount of the credit in 

4 effect for such alcohol under sub5 section (b)(1) (without regard to sub6 section (b)(3)) at the time of the 

7 qualified second generation biofuel 

8 production, plus 

9 ‘‘(II) in the case of ethanol, the 

10 amount of the credit in effect under 

11 subsection (b)(4) at the time of such 

12 production.’’. 

13 (b) EXPANSION OF QUALIFIED FUELS.— 

14 (1) IN GENERAL.—Subclause (I) of section 

15 40(b)(6)(E)(i) of such Code is amended to read as 

16 follows: 

17 ‘‘(I) is derived solely from quali18 fied feedstocks, and’’. 

19 (2) QUALIFIED FEEDSTOCK.—Paragraph (6) of 

20 section 40(b) of such Code is amended by redesig21 nating subparagraphs (F), (G), and (H) as subpara22 graphs (G), (H), and (I), respectively, and by insert23 ing after subparagraph (E) the following new sub24 paragraph: 


tjames on DSKG8SOYB1PROD with BILLS
4 

•HR 3985 IH

1 ‘‘(F) QUALIFIED FEEDSTOCK.—For pur2 poses of this paragraph, the term ‘qualified 

3 feedstock’ means— 

4 ‘‘(i) any lignocellulosic or 

5 hemicellulosic matter that is available on a 

6 renewable or recurring basis, and 

7 ‘‘(ii) any cultivated algae, 

8 cyanobacteria, or lemna.’’. 

9 (3) CONFORMING AMENDMENTS.— 

10 (A) Section 40 of such Code is amended— 

11 (i) by striking ‘‘cellulosic biofuel’’ each 

12 place it appears in the text thereof and in13 serting ‘‘second generation biofuel’’, 

14 (ii) by striking ‘‘CELLULOSIC’’ in the 

15 headings of subsections (b)(6), (b)(6)(E), 

16 and (d)(3)(D) and inserting ‘‘SECOND

17 GENERATION’’, and 

18 (iii) by striking ‘‘CELLULOSIC’’ in the 

19 headings of subsections (b)(6)(C), 

20 (b)(6)(D), (b)(6)(F), (d)(6), and (e)(3) 

21 and inserting ‘‘SECOND GENERATION’’. 

22 (B) Clause (iii) of section 40(b)(6)(E) of 

23 such Code, as redesignated by paragraph (2), is 

24 amended by striking ‘‘Such term shall not’’ and 


tjames on DSKG8SOYB1PROD with BILLS
5 

•HR 3985 IH

1 inserting ‘‘The term ‘second generation biofuel’ 

2 shall not’’. 

3 (C) Paragraph (1) of section 4101(a) of 

4 such Code is amended by striking ‘‘cellulosic 

5 biofuel’’ and inserting ‘‘second generation 

6 biofuel’’. 

7 (c) EXCLUSION OF FUELS PRODUCED FROM CO8 PROCESSING WITH NONQUALIFIED FEEDSTOCKS.—Sub9 paragraph (E) of section 40(b)(6) of such Code is amend10 ed by adding at the end the following new clause: 

11 ‘‘(iii) EXCLUSION OF FUELS PRO12 DUCED FROM COPROCESSING WITH NON13 QUALIFIED FEEDSTOCKS.—The term ‘sec14 ond generation biofuel’ shall not include 

15 any fuel derived from coprocessing a quali16 fied feedstock with any feedstock which is 

17 not a qualified feedstock.’’. 

18 (d) EXCLUSION OF UNPROCESSED FUELS.—Sub19 paragraph (E) of section 40(b)(6) of such Code, as amend20 ed by subsection (c), is amended by adding at the end the 

21 following new clause: 

22 ‘‘(iv) EXCLUSION OF UNPROCESSED

23 FUELS.—The term ‘second generation 

24 biofuel’ shall not include any fuel if— 


tjames on DSKG8SOYB1PROD with BILLS
6 

•HR 3985 IH

1 ‘‘(I) more than 4 percent of such 

2 fuel (determined by weight) is any 

3 combination of water and sediment, or 

4 ‘‘(II) the ash content of such fuel 

5 is more than 1 percent (determined by 

6 weight).’’. 

7 (e) LIQUID FUEL DEFINED.— 

8 (1) IN GENERAL.—Paragraph (6) of section 

9 40(b) of such Code, as amended by subsection (b), 

10 is amended by redesignating subparagraphs (G), 

11 (H), and (I) as subparagraphs (H), (I), and (J), re12 spectively, and by inserting after subparagraph (F) 

13 the following new subparagraph: 

14 ‘‘(G) LIQUID FUEL.—The term ‘liquid fuel’ 

15 shall not include any fuel unless such fuel 

16 would be a liquid at room temperature after ex17 traction of all water from the fuel.’’. 

18 (2) APPLICATION TO ALCOHOL MIXTURE CRED19 IT.—Paragraph (2) of section 40(d) of such Code is 

20 amended by inserting ‘‘, within the meaning of sub21 section (b)(6)(G),’’ after ‘‘liquid fuel (other than 

22 gasoline)’’. 

23 (3) APPLICATION TO RENEWABLE DIESEL.— 

24 Paragraph (3) of section 40A(f) of such Code is 


tjames on DSKG8SOYB1PROD with BILLS
7 

•HR 3985 IH

1 amended by inserting ‘‘(within the meaning of sec2 tion 40(b)(6)(G))’’ after ‘‘liquid fuel’’. 

3 (f) REGISTRATION OF FUELS.—Subparagraph (I) of 

4 section 40(b)(6) of such Code, as redesignated by sub5 sections (b) and (e), is amended to read as follows: 

6 ‘‘(I) REGISTRATION REQUIREMENTS.—No 

7 credit shall be determined under this paragraph 

8 with respect to any second generation biofuel 

9 produced by the taxpayer unless— 

10 ‘‘(i) such taxpayer is registered with 

11 the Secretary as a producer of second gen12 eration biofuel under section 4101, and 

13 ‘‘(ii) such taxpayer provides the Sec14 retary such information with respect to 

15 such second generation biofuel as the Sec16 retary may (after consultation with the 

17 Secretary of Energy and the Administrator 

18 of the Environmental Protection Agency) 

19 require, including— 

20 ‘‘(I) the type of such second gen21 eration biofuel, 

22 ‘‘(II) the feedstocks from which 

23 such second generation biofuel is de24 rived, and 


tjames on DSKG8SOYB1PROD with BILLS
8 

•HR 3985 IH

1 ‘‘(III) the BTU content of such 

2 second generation biofuel.’’. 

3 (g) APPLICATION OF BIOFUEL REFORMS TO BONUS

4 DEPRECIATION FOR BIOFUEL PLANT PROPERTY.— 

5 (1) IN GENERAL.—Subparagraph (A) of section 

6 168(l)(2) of such Code is amended by striking ‘‘sole7 ly to produce cellulosic biofuel’’ and inserting ‘‘solely 

8 to produce second generation biofuel (as defined in 

9 section 40(b)(6)(E)’’. 

10 (2) CONFORMING AMENDMENTS.—Subsection 

11 (l) of section 168 of such Code is amended— 

12 (A) by striking ‘‘cellulosic biofuel’’ each 

13 place it appears in the text thereof and insert14 ing ‘‘second generation biofuel’’, 

15 (B) by striking paragraph (3) and redesig16 nating paragraphs (4) through (8) as para17 graphs (3) through (7), respectively, 

18 (C) by striking ‘‘CELLULOSIC’’ in the 

19 heading of such subsection and inserting ‘‘SEC20 OND GENERATION’’, and 

21 (D) by striking ‘‘CELLULOSIC’’ in the head22 ing of paragraph (2) and inserting ‘‘SECOND

23 GENERATION’’. 

24 (h) EFFECTIVE DATE.— 


tjames on DSKG8SOYB1PROD with BILLS
9 

•HR 3985 IH

1 (1) IN GENERAL.—Except as provided in para2 graph (2), the amendments made by this section 

3 shall apply to fuels sold or used after the date of the 

4 enactment of this Act. 

5 (2) APPLICATION TO BONUS DEPRECIATION.— 

6 The amendments made by subsection (g) shall apply 

7 to property placed in service after the date of the en8 actment of this Act. 

9 (3) TEMPORARY RULE FOR DETERMINING

10 CREDIT AMOUNT BASED ON BTU CONTENT OF

11 FUEL.—With respect to any fuel sold or used after 

12 the date of the enactment of this Act and before the 

13 date on which the Secretary prescribes the table de14 scribed in clause (ii) of section 40(b)(6)(B) of the 

15 Internal Revenue Code of 1986 (as amended by this 

16 Act), clause (i) of such section shall be applied by 

17 treating all second generation biofuel as though it 

18 were ethanol. 

Æ 


tjames on DSKG8SOYB1PROD with BILLS