I 

111TH CONGRESS 

1ST SESSION H. R. 3460 

To amend the Clean Air Act to include algae-based biofuel in the renewable 

fuel program and amend the Internal Revenue Code of 1986 to include 

algae-based biofuel in the cellulosic biofuel producer credit. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 31, 2009 

Mr. BILBRAY (for himself, Mr. INSLEE, Mr. DREIER, Mr. HUNTER, Mrs. 

DAVIS of California, Mr. CALVERT, Mrs. BONO MACK, Mr. ISSA, and Mr. 

TEAGUE) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy 

and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Clean Air Act to include algae-based biofuel 

in the renewable fuel program and amend the Internal 

Revenue Code of 1986 to include algae-based biofuel 

in the cellulosic biofuel producer credit. 

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

3 SECTION 1. INCLUSION OF ALGAE-BASED BIOFUEL IN RE4 NEWABLE FUEL PROGRAM. 

5 Section 211(o)(1) of the Clean Air Act (42 U.S.C. 

6 7545(o)(1)) is amended— 


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1 (1) in subparagraph (E) by adding at the end 

2 the following ‘‘The term ‘cellulosic biofuel’ also in3 cludes algae-based biofuel.’’, and 

4 (2) by adding the following new subparagraph 

5 at the end thereof: 

6 ‘‘(M) ALGAE-BASED BIOFUEL.—The term 

7 ‘algae-based biofuel’ means liquid fuel— 

8 ‘‘(i) derived from the biomass of 

9 single- or multi-cellular organisms which 

10 are inherently aquatic and classified as 

11 non-vascular plants (including microalgae, 

12 blue-green algae (cyanobacteria), and 

13 macroalgae (seaweeds)); and 

14 ‘‘(ii) that has lifecycle greenhouse gas 

15 emissions, as determined by the Adminis16 trator, that are at least 60 percent less 

17 than the baseline lifecycle greenhouse gas 

18 emissions.’’. 

19 SEC. 2. INCLUSION OF ALGAE-BASED BIOFUEL IN DEFINI20 TION OF CELLULOSIC BIOFUEL. 

21 (a) CELLULOSIC BIOFUEL PRODUCER CREDIT.— 

22 (1) GENERAL RULE.—Paragraph (4) of section 

23 40(a) of the Internal Revenue Code of 1986 is 

24 amended by inserting ‘‘and algae-based’’ after ‘‘cel25 lulosic’’. 


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1 (2) DEFINITIONS.—Paragraph (6) of section 

2 40(b) of such Code is amended— 

3 (A) by inserting ‘‘AND ALGAE-BASED’’ 

4 after ‘‘CELLULOSIC’’ in the heading, 

5 (B) by striking subparagraph (A) and in6 serting the following: 

7 ‘‘(A) IN GENERAL.—The cellulosic and 

8 algae-based biofuel producer credit of any tax9 payer is an amount equal to the applicable 

10 amount for each gallon of— 

11 ‘‘(i) qualified cellulosic biofuel produc12 tion, and 

13 ‘‘(ii) qualified algae-based biofuel pro14 duction.’’, 

15 (C) by redesignating subparagraphs (F), 

16 (G), and (H) as subparagraphs (I), (J), and 

17 (K), respectively, 

18 (D) by inserting ‘‘AND ALGAE-BASED’’ 

19 after ‘‘CELLULOSIC’’ in the heading of subpara20 graph (I), as so redesignated, 

21 (E) by inserting ‘‘or algae-based biofuel, 

22 whichever is appropriate,’’ after ‘‘cellulosic 

23 biofuel’’ in subparagraph (J), as so redesig24 nated, 


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1 (F) by inserting ‘‘and qualified algae-based 

2 biofuel production’’ after ‘‘qualified cellulosic 

3 biofuel production’’ in subparagraph (K), as so 

4 redesignated, and 

5 (G) by inserting after subparagraph (E) 

6 the following new subparagraphs: 

7 ‘‘(F) QUALIFIED ALGAE-BASED BIOFUEL

8 PRODUCTION.—For purposes of this section, 

9 the term ‘qualified algae-based biofuel produc10 tion’ means any algae-based biofuel which is 

11 produced by the taxpayer, and which during the 

12 taxable year— 

13 ‘‘(i) is sold by the taxpayer to another 

14 person— 

15 ‘‘(I) for use by such other person 

16 in the production of a qualified algae17 based biofuel mixture in such other 

18 person’s trade or business (other than 

19 casual off-farm production), 

20 ‘‘(II) for use by such other per21 son as a fuel in a trade or business, 

22 or 

23 ‘‘(III) who sells such algae-based 

24 biofuel at retail to another person and 


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1 places such algae-based biofuel in the 

2 fuel tank of such other person, or 

3 ‘‘(ii) is used or sold by the taxpayer 

4 for any purpose described in clause (i). 

5 The qualified algae-based biofuel production of 

6 any taxpayer for any taxable year shall not in7 clude any alcohol which is purchased by the 

8 taxpayer and with respect to which such pro9 ducer increases the proof of the alcohol by addi10 tional distillation. 

11 ‘‘(G) QUALIFIED ALGAE-BASED BIOFUEL

12 MIXTURE.—For purposes of this paragraph, the 

13 term ‘qualified algae-based biofuel mixture’ 

14 means a mixture of algae-based biofuel and gas15 oline or of algae-based biofuel and a special fuel 

16 which— 

17 ‘‘(i) is sold by the person producing 

18 such mixture to any person for use as a 

19 fuel, or 

20 ‘‘(ii) is used as a fuel by the person 

21 producing such mixture. 

22 ‘‘(H) ALGAE-BASED BIOFUEL.—For pur23 poses of this paragraph— 

24 ‘‘(i) IN GENERAL.—The term ‘algae25 based biofuel’ means any liquid fuel, inVerDate Nov 24 2008 00:24 Aug 04, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3460.IH H3460

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1 cluding gasoline, diesel, aviation fuel, and 

2 ethanol, which— 

3 ‘‘(I) is produced from the bio4 mass of algal organisms, and 

5 ‘‘(II) meets the registration re6 quirements for fuels and fuel additives 

7 established by the Environmental Pro8 tection Agency under section 211 of 

9 the Clean Air Act (42 U.S.C. 7545). 

10 ‘‘(ii) ALGAL ORGANISM.—The term 

11 ‘algal organism’ means a single- or multi12 cellular organism which is primarily aquat13 ic and classified as a non-vascular plant, 

14 including microalgae, blue-green algae 

15 (cyanobacteria), and macroalgae (sea16 weeds). 

17 ‘‘(iii) EXCLUSION OF LOW-PROOF AL18 COHOL.—Such term shall not include any 

19 alcohol with a proof of less than 150. The 

20 determination of the proof of any alcohol 

21 shall be made without regard to any added 

22 denaturants.’’. 

23 (3) CONFORMING AMENDMENTS.— 

24 (A) Subparagraph (D) of section 40(d)(3) 

25 of such Code is amended— 


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1 (i) by inserting ‘‘AND ALGAE-BASED’’ 

2 after ‘‘CELLULOSIC’’ in the heading, 

3 (ii) by inserting ‘‘or (b)(6)(F)’’ after 

4 ‘‘(b)(6)(C)’’ in clause (ii), and 

5 (iii) by inserting ‘‘or algae-based’’ 

6 after ‘‘such cellulosic’’. 

7 (B) Paragraph (6) of section 40(d) of such 

8 Code is amended— 

9 (i) by inserting ‘‘AND ALGAE-BASED’’ 

10 after ‘‘CELLULOSIC’’ in the heading, and 

11 (ii) by striking the first sentence and 

12 inserting ‘‘No cellulosic and algae-based 

13 biofuel producer credit shall be determined 

14 under subsection (a) with respect to any 

15 cellulosic or algae-based biofuel unless such 

16 cellulosic or algae-based biofuel is produced 

17 in the United States and used as a fuel in 

18 the United States.’’. 

19 (C) Paragraph (3) of section 40(e) of such 

20 Code is amended by inserting ‘‘AND ALGAE21 BASED’’ after ‘‘CELLULOSIC’’ in the heading. 

22 (D) Paragraph (1) of section 4101(a) of 

23 such Code is amended— 

24 (i) by inserting ‘‘or algae-based’’ after 

25 ‘‘cellulosic’’, and 


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1 (ii) by inserting ‘‘and 40(b)(6)(H), re2 spectively’’ after ‘‘section 40(b)(6)(E)’’. 

3 (b) SPECIAL ALLOWANCE FOR CELLULOSIC BIOFUEL

4 PLANT PROPERTY.—Subsection (l) of section 168 of the 

5 Internal Revenue Code of 1986 is amended— 

6 (1) by inserting ‘‘AND ALGAE-BASED’’ after 

7 ‘‘CELLULOSIC’’ in the heading, 

8 (2) by inserting ‘‘and any qualified algae-based 

9 biofuel plant property’’ after ‘‘qualified cellulosic 

10 biofuel plant property’’ in paragraph (1), 

11 (3) by redesignating paragraphs (4) through 

12 (8) as paragraphs (6) through (10), respectively, 

13 (4) by inserting ‘‘or qualified algae-based 

14 biofuel plant property’’ after ‘‘cellulosic biofuel plant 

15 property’’ in paragraph (7)(C), as so redesignated, 

16 (5) by striking ‘‘with respect to’’ and all that 

17 follows in paragraph (9), as so redesignated, and in18 serting ‘‘with respect to any qualified cellulosic 

19 biofuel plant property and any qualified algae-based 

20 biofuel plant property which ceases to be such quali21 fied property.’’, 

22 (6) by inserting ‘‘or qualified algae-based 

23 biofuel plant property’’ after ‘‘cellulosic biofuel plant 

24 property’’ in paragraph (10), as so redesignated, and 


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1 (7) by inserting after paragraph (3) the fol2 lowing new paragraphs: 

3 ‘‘(4) QUALIFIED ALGAE-BASED BIOFUEL PLANT

4 PROPERTY.—The term ‘qualified algae-based biofuel 

5 plant property’ means property of a character sub6 ject to the allowance for depreciation— 

7 ‘‘(A) which is used in the United States 

8 solely to produce algae-based biofuel, 

9 ‘‘(B) the original use of which commences 

10 with the taxpayer after December 31, 2008, 

11 ‘‘(C) which is acquired by the taxpayer by 

12 purchase (as defined in section 179(d)) after 

13 December 31, 2008, but only if no written bind14 ing contract for the acquisition was in effect on 

15 or before such date, and 

16 ‘‘(D) which is placed in service by the tax17 payer before January 1, 2013. 

18 ‘‘(5) ALGAE-BASED BIOFUEL.— 

19 ‘‘(A) IN GENERAL.—The term ‘algae-based 

20 biofuel’ means any liquid fuel which is produced 

21 from the biomass of algal organisms. 

22 ‘‘(B) ALGAL ORGANISM.—The term ‘algal 

23 organism’ means a single- or multi-cellular or24 ganism which is primarily aquatic and classified 

25 as a non-vascular plant, including microalgae, 


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1 blue-green algae (cyanobacteria), and 

2 macroalgae (seaweeds).’’. 

3 (c) EFFECTIVE DATES.— 

4 (1) CELLULOSIC BIOFUEL PRODUCER CRED5 IT.—The amendments made by subsection (a) shall 

6 apply to fuel produced after December 31, 2008. 

7 (2) SPECIAL ALLOWANCE FOR CELLULOSIC

8 BIOFUEL PLANT PROPERTY.—The amendments 

9 made by subsection (b) shall apply to property pur10 chased and placed in service after December 31, 

11 2008. 

Æ 


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