40. Such term does not include any fuel derived 
from coprocessing biomass with a feedstock which is 
not biomass. For purposes of this paragraph, the 
term ‘biomass’ has the meaning given such term by 
section 45K(c)(3). 
‘‘(4) CERTAIN AVIATION FUEL.—Except as pro-
vided in the last 3 sentences of paragraph (3), the 
term ‘renewable diesel’ shall include fuel derived 
from biomass which meets the requirements of a De-
partment of Defense specification for military jet 
fuel or an American Society of Testing and Mate-
rials specification for aviation turbine fuel. 
‘‘(g) TERMINATION.—This section shall not apply to 
any sale or use after December 31, 2014.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by striking the item relating to 
section 40A and inserting the following new item: 
‘‘Sec. 40A. Biodiesel production.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to biodiesel sold or used after De-
cember 31, 2011. 
SEC. 2. REFORM OF BIODIESEL EXCISE TAX INCENTIVES. 
(a) IN GENERAL.—Subsection (c) of section 6426 of 
the Internal Revenue Code of 1986 is amended to read 
as follows: 
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‘‘(c) BIODIESEL CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the biodiesel credit is $1.00 for each gallon of 
biodiesel produced by the taxpayer and which— 
‘‘(A) is sold by such producer to another 
person— 
‘‘(i) for use by 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 biodiesel at retail 
to another person and places such biodiesel 
in the fuel tank of such other person, or 
‘‘(B) is used or sold by such producer for 
any purpose described in subparagraph (A). 
‘‘(2) DEFINITIONS.—Any term used in this sub-
section which is also used in section 40A shall have 
the meaning given such term by section 40A. 
‘‘(3) BIODIESEL TRANSFERS FROM AN IRS REG-
ISTERED BIODIESEL PRODUCTION FACILITY TO AN 
IRS REGISTERED TERMINAL.—Credit allowed under 
this subsection can be claimed by a registered ter-
minal or refinery in instances where section 
4081(a)(1)(B) is applicable. Credit allowed under 
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this subsection cannot be claimed by a terminal or 
refinery on fuel upon which the credit was previously 
claimed by a biodiesel producer. 
‘‘(4) TERMINATION.—This subsection shall not 
apply to any sale, use, or removal for any period 
after December 31, 2014.’’. 
(b) PAYMENT OF CREDIT.—Subsection (e) of section 
6427 of such Code is amended— 
(1) by striking ‘‘or the biodiesel mixture credit’’ 
in paragraph (1), 
(2) by redesignating paragraphs (3) through 
(6) as paragraphs (4) through (7), respectively, and 
by inserting after paragraph (2) the following new 
paragraph: 
‘‘(3) BIODIESEL CREDIT.—If any person pro-
duces biodiesel and sells or uses such biodiesel as 
provided in section 6426(c), the Secretary shall pay 
(without interest) to such person an amount equal to 
the biodiesel credit with respect to such biodiesel.’’, 
(3) by striking ‘‘paragraph (1) or (2)’’ each 
place it appears in paragraphs (4) and (6), as redes-
ignated by paragraph (2), and inserting ‘‘paragraph 
(1), (2), or (3)’’, 
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(4) by striking ‘‘alternative fuel’’ each place it 
appears in paragraphs (4) and (6), as redesignated 
by paragraph (2), and inserting ‘‘fuel’’, and 
(5) by amending subparagraph (B) of para-
graph (7), as so redesignated to read as follows: 
‘‘(B) any biodiesel (within the meaning of 
section 40A) sold or used after December 31, 
2014,’’. 
(c) EXEMPTION FOR TRANSFERS BETWEEN REG-
ISTERED
FACILITIES.—Subparagraph (B) of section 
4081(a)(1) of such Code is amended by adding at the end 
the following new clause: 
‘‘(iii) The tax imposed by this para-
graph shall not apply to biodiesel that is 
removed from a registered IRS biodiesel 
plant and is transferred to a IRS reg-
istered terminal or refinery.’’. 
(d) PRODUCER
REGISTRATION
REQUIREMENT.— 
Subsection (a) of section 6426 of such Code is amended 
by striking ‘‘subsections (d) and (e)’’ in the flush sentence 
at the end and inserting ‘‘subsections (c), (d), and (e)’’. 
(e) RECAPTURE.—Subsection (f) of section 6426 of 
such Code is amended to read as follows: 
‘‘(f) RECAPTURE.— 
‘‘(1) ALCOHOL FUEL MIXTURES.—If— 
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‘‘(A) any credit was determined under this 
section with respect to alcohol used in the pro-
duction of any alcohol fuel mixture, and 
‘‘(B) any person— 
‘‘(i) separates the alcohol from the 
mixture, or 
‘‘(ii) without separation, uses the mix-
ture other than as a fuel, 
then there is hereby imposed on such person a tax 
equal to the product of the applicable amount and 
the number of gallons of such alcohol. 
‘‘(2) BIODIESEL.—If any credit was determined 
under this section with respect to the production of 
any biodiesel and any person does not use such bio-
diesel for a purpose described in subsection (c)(1), 
then there is hereby imposed on such person a tax 
equal to $1 for each gallon of such biodiesel. 
‘‘(3) APPLICABLE LAWS.—All provisions of law, 
including penalties, shall, insofar as applicable and 
not inconsistent with this section, apply in respect of 
any tax imposed under paragraph (1) or (2) as if 
such tax were imposed by section 4081 and not by 
this section.’’. 
(f) CLERICAL AMENDMENT.—The heading of section 
6426 of such Code (and the item relating to such section 
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in the table of sections for subchapter B of chapter 65 
of such Code) is amended by striking ‘‘alcohol fuel, bio-
diesel, and alternative fuel mixtures’’ and inserting ‘‘alco-
hol fuel mixtures, biodiesel production, and alternative fuel 
mixtures’’. 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to biodiesel sold or used after De-
cember 31, 2011. 
SEC. 3. BIODIESEL TREATED AS TAXABLE FUEL. 
(a) BIODIESEL TREATED
AS TAXABLE FUEL.— 
Clause (i) of section 4083(a)(3)(A) of such Code is amend-
ed by inserting ‘‘, including biodiesel (as defined in section 
6426(c)(3)),’’ after ‘‘(other than gasoline)’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to biodiesel removed, entered, or 
sold after the date which is 6 months after the date of 
the enactment of this Act. 
SEC. 4. COMPREHENSIVE STUDY OF ENERGY TAX PREF-
ERENCES FOR RENEWABLE ENERGY AND 
FOSSIL FUELS. 
Not later than June 30, 2015, the Comptroller Gen-
eral of the United States (in consultation with the Sec-
retary of Treasury, the Secretary of Agriculture, the Sec-
retary of Energy, and the Administrator of the Environ-
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