II 

110TH CONGRESS 

1ST SESSION S. 1618 

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

production of a cellulosic biofuel. 

IN THE SENATE OF THE UNITED STATES 

JUNE 14, 2007 

Mr. SALAZAR (for himself, Mrs. LINCOLN, Mr. SMITH, Mr. ALLARD, Ms. 

STABENOW, Ms. CANTWELL, Mr. CRAIG, Mr. WYDEN, Mr. CONRAD, Mr. 

NELSON of Nebraska, and Mr. KERRY) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a credit for the production of a cellulosic biofuel. 

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

3 SECTION 1. CREDIT FOR PRODUCTION OF CELLULOSIC 

4 BIOFUEL. 

5 (a) IN GENERAL.—Subpart B of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of 

7 1986 is amended by adding at the end the following new 

8 section: 

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1 ‘‘SEC. 30D. CELLULOSIC BIOFUEL PRODUCTION. 

2 ‘‘(a) GENERAL RULE.—There shall be allowed as a 

3 credit against the tax imposed by this chapter for the tax4 able year an amount equal to $1.28 for each gallon of 

5 qualified cellulosic biofuel production. 

6 ‘‘(b) QUALIFIED CELLULOSIC BIOFUEL PRODUC7 TION.—For purposes of this section, the term ‘qualified 

8 cellulosic biofuel production’ means any cellulosic biofuel 

9 which is produced in the United States by the taxpayer 

10 and which during the taxable year— 

11 ‘‘(1) is sold by the taxpayer to another per12 son— 

13 ‘‘(A) for use by such other person in the 

14 production of a qualified cellulosic biofuel mix15 ture in such other person’s trade or business 

16 (other than casual off-farm production), 

17 ‘‘(B) for use by such other person as a fuel 

18 in a trade or business, or 

19 ‘‘(C) who sells such cellulosic biofuel at re20 tail to another person and places such cellulosic 

21 biofuel in the fuel tank of such other person, or 

22 ‘‘(2) is used or sold by the taxpayer for any 

23 purpose described in paragraph (1). 

24 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur25 poses of this section— 

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1 ‘‘(1) CELLULOSIC BIOFUEL.—The term ‘cel2 lulosic biofuel’ means any liquid transportation fuel 

3 derived from any lignocellulosic or hemicellulosic 

4 mater (other than food starch) that is available on 

5 a renewable or recurring basis. 

6 ‘‘(2) QUALIFIED CELLULOSIC BIOFUEL MIX7 TURE.—The term ‘qualified cellulosic biofuel mix8 ture’ means a mixture of cellulosic biofuel and gaso9 line which— 

10 ‘‘(A) is sold by the person producing such 

11 mixture to any person for use as a fuel, or 

12 ‘‘(B) is used as a fuel by the person pro13 ducing such mixture. 

14 ‘‘(3) CELLULOSIC BIOFUEL NOT USED AS A

15 FUEL.—If any credit is allowed under subsection (a) 

16 and any person does not use such cellulosic biofuel 

17 for a purpose described in subsection (b), then there 

18 is hereby imposed on such person a tax equal to 

19 $1.28 for each gallon of such cellulosic biofuel. 

20 ‘‘(4) PASS-THRU IN THE CASE OF ESTATES AND

21 TRUSTS.—Under regulations prescribed by the Sec22 retary, rules similar to the rules of subsection (d) of 

23 section 52 shall apply. 

24 ‘‘(5) DENIAL OF DOUBLE BENEFIT.—No credit 

25 shall be allowed under this section to any taxpayer 

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1 with respect to any cellulosic biofuel if a credit or 

2 payment is allowed with respect to such fuel to such 

3 taxpayer under section 40, 40A, 6426, or 6427(e). 

4 ‘‘(d) LIMITATION BASED ON AMOUNT OF TAX.—The 

5 credit allowed under subsection (a) for any taxable year 

6 shall not exceed the excess of— 

7 ‘‘(1) the sum of the regular tax liability (as de8 fined in section 26(b)) plus the tax imposed by sec9 tion 55, over 

10 ‘‘(2) the sum of the credits allowable under sub11 part A and sections 27, 30, 30B, and 30C. 

12 ‘‘(e) CARRYFORWARD AND CARRYBACK OF UNUSED

13 CREDIT.— 

14 ‘‘(1) IN GENERAL.—If the credit allowable 

15 under subsection (a) exceeds the limitation imposed 

16 by subsection (d) for such taxable year (hereinafter 

17 in this section referred to as the ‘unused credit 

18 year’) reduced by the sum of the credits allowable 

19 under subpart A, such excess shall be— 

20 ‘‘(A) carried back to the taxable year pre21 ceding the unused credit year, and 

22 ‘‘(B) carried forward to each of the 20 tax23 able years following the unused credit year. 

24 ‘‘(2) TRANSITION RULE.—The credit under 

25 subsection (a) may not be carried to a taxable year 

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1 beginning before the date of the enactment of this 

2 section. 

3 ‘‘(f) APPLICATION OF SECTION.—This section shall 

4 apply with respect to qualified cellulosic biofuel produc5 tion— 

6 ‘‘(1) after the date of the enactment of this sec7 tion, and 

8 ‘‘(2) before the date on which the Secretary of 

9 Energy certifies that 1,000,000,000 gallons of cel10 lulosic biofuels have been produced in the United 

11 States after such date.’’. 

12 (b) DEDUCTION ALLOWED FOR UNUSED CREDIT.— 

13 Section 196(c) of such Code is amended by adding at the 

14 end the following new subsection: 

15 ‘‘(d) DEDUCTION ALLOWED FOR CELLULOSIC

16 BIOFUEL PRODUCTION CREDIT.— 

17 ‘‘(1) IN GENERAL.—If any portion of the credit 

18 allowed under section 30D for any taxable year has 

19 not, after the application of section 30D(d), been al20 lowed to the taxpayer as a credit under such section 

21 for any taxable year, an amount equal to such credit 

22 not so allowed shall be allowed to the taxpayer as a 

23 deduction for the first taxable year following the last 

24 taxable year for which such credit could, under sec25 tion 30D(e), have been allowed as a credit. 

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1 ‘‘(2) TAXPAYER’S DYING OR CEASING TO

2 EXIST.—If a taxpayer dies or ceases to exist before 

3 the first taxable year following the last taxable year 

4 for which the credit could, under section 30D(e), 

5 have been allowed as a credit, the amount described 

6 in paragraph (1) (or the proper portion thereof) 

7 shall, under regulations prescribed by the Secretary, 

8 be allowed to the taxpayer as a deduction for the 

9 taxable year in which such death or cessation oc10 curs.’’. 

11 (c) CONFORMING AMENDMENTS.— 

12 (1)(A) Section 87 of the Internal Revenue Code 

13 of 1986 is amended by striking ‘‘and’’ at the end of 

14 paragraph (1), by striking the period at the end of 

15 paragraph (2) and inserting ‘‘, and’’, and by adding 

16 at the end the following new paragraph: 

17 ‘‘(3) the cellulosic biofuel production credit de18 termined with respect to the taxpayer under section 

19 30D(a).’’. 

20 (B) The heading of section 87 of such Code is 

21 amended by striking ‘‘AND BIODIESEL FUELS

22 CREDITS’’ and inserting ‘‘, BIODIESEL FUELS, 

23 AND CELLULOSIC BIOFUELS CREDITS’’. 

24 (C) The item relating to section 87 is the table 

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

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1 of such Code is amended by striking ‘‘and biodiesel 

2 fuels credits’’ and inserting ‘‘, biodiesel fuels, and 

3 cellulosic biofuels credits’’. 

4 (2) The table of sections for subpart B of part 

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

6 amended by inserting after the item relating to sec7 tion 40A the following new item: 

‘‘Sec. 30D. Cellulosic biofuel production.’’. 

8 (d) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to fuel produced after the date of 

10 the enactment of this Act. 

Æ 

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