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SEC. 1543. SMALL AGRI-BIODIESEL PRODUCER CREDIT.
(a) IN GENERAL.—Subsection (a) of section 40A (re-
lating to biodiesel used as a fuel) is amended to read as
follows:
‘‘(a) GENERAL RULE.—For purposes of section 38, the
biodiesel fuels credit determined under this section for the
taxable year is an amount equal to the sum of—
‘‘(1) the biodiesel mixture credit, plus
‘‘(2) the biodiesel credit, plus
‘‘(3) in the case of an eligible small agri-biodiesel
producer, the small agri-biodiesel producer credit.’’.
(b) SMALL AGRI-BIODIESEL PRODUCER CREDIT DE-
FINED.—Section 40A(b) (relating to definition of biodiesel
mixture credit and biodiesel credit) is amended by adding
at the end the following new paragraph:
‘‘(5) SMALL AGRI-BIODIESEL PRODUCER CRED-
IT.—
‘‘(A) IN GENERAL.—The small agri-biodiesel
producer credit of any eligible small agri-bio-
diesel producer for any taxable year is 10 cents
for each gallon of qualified agri-biodiesel produc-
tion of such producer.
‘‘(B) QUALIFIED AGRI-BIODIESEL PRODUC-
TION.—For purposes of this paragraph, the term
‘qualified agri-biodiesel production’ means any
agri-biodiesel which is produced by an eligible
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small agri-biodiesel producer, and which during
the taxable year—
‘‘(i) is sold by such producer to another
person—
‘‘(I) for use by such other person
in the production of a qualified bio-
diesel mixture in such other person’s
trade or business (other than casual
off-farm production),
‘‘(II) for use by such other person
as a fuel in a trade or business, or
‘‘(III) who sells such agri-biodiesel
at retail to another person and places
such agri-biodiesel in the fuel tank of
such other person, or
‘‘(ii) is used or sold by such producer
for any purpose described in clause (i).
‘‘(C) LIMITATION.—The qualified agri-bio-
diesel production of any producer for any tax-
able year shall not exceed 15,000,000 gallons.’’.
(c) DEFINITIONS AND SPECIAL RULES.—Section 40A
is amended by redesignating subsection (e) as subsection (f)
and by inserting after subsection (d) the following new sub-
section:
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‘‘(e) DEFINITIONS AND SPECIAL RULES FOR SMALL
AGRI-BIODIESEL PRODUCER CREDIT.—For purposes of this
section—
‘‘(1) ELIGIBLE
SMALL
AGRI-BIODIESEL
PRO-
DUCER.—The term ‘eligible small agri-biodiesel pro-
ducer’ means a person who, at all times during the
taxable year, has a productive capacity for agri-bio-
diesel not in excess of 60,000,000 gallons.
‘‘(2) AGGREGATION RULE.—For purposes of the
15,000,000 
gallon 
limitation 
under 
subsection
(b)(5)(C) and the 60,000,000 gallon limitation under
paragraph (1), all members of the same controlled
group of corporations (within the meaning of section
267(f)) and all persons under common control (within
the meaning of section 52(b) but determined by treat-
ing an interest of more than 50 percent as a control-
ling interest) shall be treated as 1 person.
‘‘(3) PARTNERSHIP, S CORPORATION, AND OTHER
PASS-THRU ENTITIES.—In the case of a partnership,
trust, S corporation, or other pass-thru entity, the
limitations contained in subsection (b)(5)(C) and
paragraph (1) shall be applied at the entity level and
at the partner or similar level.
‘‘(4) ALLOCATION.—For purposes of this sub-
section, in the case of a facility in which more than
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1 person has an interest, productive capacity shall be
allocated among such persons in such manner as the
Secretary may prescribe.
‘‘(5) REGULATIONS.—The Secretary may pre-
scribe such regulations as may be necessary—
‘‘(A) to prevent the credit provided for in
subsection (a)(3) from directly or indirectly ben-
efiting any person with a direct or indirect pro-
ductive capacity of more than 60,000,000 gallons
of agri-biodiesel during the taxable year, or
‘‘(B) to prevent any person from directly or
indirectly benefiting with respect to more than
15,000,000 gallons during the taxable year.
‘‘(6) ALLOCATION
OF
SMALL
AGRI-BIODIESEL
CREDIT TO PATRONS OF COOPERATIVE.—
‘‘(A) ELECTION TO ALLOCATE.—
‘‘(i) IN GENERAL.—In the case of a co-
operative organization described in section
1381(a), any portion of the credit deter-
mined under subsection (a)(3) for the tax-
able year may, at the election of the organi-
zation, be apportioned pro rata among pa-
trons of the organization on the basis of the
quantity or value of business done with or
for such patrons for the taxable year.
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‘‘(ii) FORM
AND
EFFECT
OF
ELEC-
TION.—An election under clause (i) for any
taxable year shall be made on a timely filed
return for such year. Such election, once
made, shall be irrevocable for such taxable
year. Such election shall not take effect un-
less the organization designates the appor-
tionment as such in a written notice mailed
to its patrons during the payment period
described in section 1382(d).
‘‘(B) TREATMENT OF ORGANIZATIONS AND
PATRONS.—
‘‘(i) ORGANIZATIONS.—The amount of
the credit not apportioned to patrons pursu-
ant to subparagraph (A) shall be included
in the amount determined under subsection
(a)(3) for the taxable year of the organiza-
tion.
‘‘(ii) PATRONS.—The amount of the
credit apportioned to patrons pursuant to
subparagraph (A) shall be included in the
amount determined under such subsection
for the first taxable year of each patron end-
ing on or after the last day of the payment
period (as defined in section 1382(d)) for
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the taxable year of the organization or, if
earlier, for the taxable year of each patron
ending on or after the date on which the pa-
tron receives notice from the cooperative of
the apportionment.
‘‘(iii) SPECIAL RULES FOR DECREASE
IN
CREDITS
FOR
TAXABLE
YEAR.—If the
amount of the credit of the organization de-
termined under such subsection for a tax-
able year is less than the amount of such
credit shown on the return of the organiza-
tion for such year, an amount equal to the
excess of—
‘‘(I) such reduction, over
‘‘(II) the amount not apportioned
to such patrons under subparagraph
(A) for the taxable year,
shall be treated as an increase in tax im-
posed by this chapter on the organization.
Such increase shall not be treated as tax
imposed by this chapter for purposes of de-
termining the amount of any credit under
this chapter or for purposes of section 55.’’.
(d) CONFORMING AMENDMENTS.—
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(1) Paragraph (4) of section 40A(b) is amended
by striking ‘‘this section’’ and inserting ‘‘paragraph
(1) or (2) of subsection (a)’’.
(2) The heading of subsection (b) of section 40A
is amended by striking ‘‘AND BIODIESEL CREDIT’’
and inserting ‘‘, BIODIESEL CREDIT, AND SMALL
AGRI-BIODIESEL PRODUCER CREDIT’’.
(3) Paragraph (3) of section 40A(d) is amended
by redesignating subparagraph (C) as subparagraph
(D) and by inserting after subparagraph (B) the fol-
lowing new subparagraph:
‘‘(C) PRODUCER CREDIT.—If—
‘‘(i) any credit was determined under
subsection (a)(3), and
‘‘(ii) any person does not use such fuel
for a purpose described in subsection
(b)(5)(B),
then there is hereby imposed on such person a
tax equal to 10 cents a gallon for each gallon of
such agri-biodiesel.’’.
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years ending after the date
of the enactment of this Act.
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SEC. 1544. IMPROVEMENTS TO SMALL ETHANOL PRODUCER
CREDIT.
(a) DEFINITION OF SMALL ETHANOL PRODUCER.—
Section 40(g) (relating to definitions and special rules for
eligible small ethanol producer credit) is amended by strik-
ing ‘‘30,000,000’’ each place it appears and inserting
‘‘60,000,000’’.
(b) WRITTEN NOTICE OF ELECTION TO ALLOCATE
CREDIT TO PATRONS.—Section 40(g)(6)(A)(ii) (relating to
form and effect of election) is amended by adding at the
end the following new sentence: ‘‘Such election shall not take
effect unless the organization designates the apportionment
as such in a written notice mailed to its patrons during
the payment period described in section 1382(d).’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years ending after the date
of the enactment of this Act.
SEC. 1545. CREDIT FOR EQUIPMENT FOR PROCESSING OR
SORTING MATERIALS GATHERED THROUGH
RECYCLING.
(a) IN GENERAL.—Subpart D of part IV of subchapter
A of chapter 1 (relating to business-related credits), as
amended by this Act, is amended by adding at the end the
following new section:
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‘‘SEC. 45M. CREDIT FOR QUALIFIED RECYCLING EQUIP-
MENT.
‘‘(a) ALLOWANCE OF CREDIT.—For purposes of section
38, the qualified recycling equipment credit determined
under this section for the taxable year is an amount equal
to the amount paid or incurred during the taxable year for
the cost of qualified recycling equipment placed in service
or leased by the taxpayer.
‘‘(b) LIMITATION.—The amount allowable as a credit
under subsection (a) with respect to any qualified recycling
equipment shall not exceed—
‘‘(1) in the case of such equipment described in
subsection (c)(1)(A)(i), 15 percent of the cost of such
equipment, and
‘‘(2) in the case of such equipment described in
subsection (c)(1)(A)(ii), 15 percent of so much of the
cost of each piece of equipment as exceeds $400,000.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED RECYCLING EQUIPMENT.—
‘‘(A) IN GENERAL.—The term ‘qualified re-
cycling equipment’ means equipment, including
connecting piping—
‘‘(i) employed in sorting or processing
residential and commercial qualified recy-
clable materials described in paragraph
(2)(A) for the purpose of converting such
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materials for use in manufacturing tangible
consumer products, including packaging, or
‘‘(ii) the primary purpose of which is
the shredding and processing of qualified re-
cyclable materials described in paragraph
(2)(B).
‘‘(B) EQUIPMENT AT COMMERCIAL OR PUB-
LIC VENUES INCLUDED.—For purposes of sub-
paragraph (A)(i), such term includes equipment
which is utilized at commercial or public venues,
including recycling collection centers, where the
equipment is utilized to sort or process qualified
recyclable materials for such purpose.
‘‘(C) EXCLUSION.—Such term does not in-
clude rolling stock or other equipment used to
transport recyclable materials.
‘‘(2) QUALIFIED RECYCLABLE MATERIALS.—The
term ‘qualified recyclable materials’ means—
‘‘(A) any packaging or printed material
which is glass, paper, plastic, steel, or alu-
minum, and
‘‘(B) any electronic waste (including any
cathode ray tube, flat panel screen, or similar
video display device with a screen size greater