I 
112TH CONGRESS 
1ST SESSION H. R. 2231 
To amend the Internal Revenue Code of 1986 to terminate the ethanol 
tax credits, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 16, 2011 
Mrs. NOEM (for herself, Mr. BERG, and Mr. SCHOCK) introduced the following 
bill; which was referred to the Committee on Ways and Means, and in 
addition to the Committee on the Budget, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to terminate 
the ethanol tax credits, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Ethanol Modernization 
and Deficit Reduction Act’’. 
SEC. 2. TERMINATION OF ETHANOL TAX CREDITS. 
(a) EXCISE TAX CREDIT AND DIRECT PAYMENTS.— 
Sections 6426(b)(6) and 6427(e)(6)(A) of the Internal 
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Revenue Code of 1986 are each amended by striking ‘‘De-
cember 31, 2011’’ and inserting ‘‘June 30, 2011’’. 
(b) INCOME TAX CREDIT.—Paragraph (1) of section 
40(e) of such Code is amended— 
(1) by striking ‘‘December 31, 2011’’ in sub-
paragraph (A) and inserting ‘‘June 30, 2011’’, and 
(2) by striking ‘‘January 1, 2012’’ in subpara-
graph (B) and inserting ‘‘July 1, 2011’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to any sale, use, or removal for 
any period after June 30, 2011. 
SEC. 3. EXTENSION AND MODIFICATION OF ALTERNATIVE 
FUEL VEHICLE REFUELING PROPERTY CRED-
IT. 
(a) EXTENSION.—Subsection (g) of section 30C of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘placed in service—’’ and all that follows and inserting 
‘‘placed in service after the earlier of December 31, 2016, 
or the date on which the Secretary certifies that at least 
53,000 qualified alternative fuel refueling properties 
(other than properties described in subsection (c)(2)(C)) 
have been placed in service.’’. 
(b) ONLY CERTAIN ETHANOL BLENDS ELIGIBLE 
FOR CREDIT.—Subparagraph (A) of section 30C(c)(2) of 
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the Internal Revenue Code of 1986 is amended to read 
as follows: 
‘‘(A) Any fuel— 
‘‘(i) at least 85 percent of the volume 
of which consists of one or more of the fol-
lowing: natural gas, compressed natural 
gas, liquified natural gas, liquefied petro-
leum gas, or hydrogen, or 
‘‘(ii) at least 85 percent of the volume 
of which consists of— 
‘‘(I) ethanol, or 
‘‘(II) ethanol and gasoline or one 
or more of the fuels described in 
clause (i), but only if at least 15 per-
cent and not more than 85 percent of 
the volume of such fuel consists of 
ethanol.’’. 
(c) CREDIT
FOR
DUAL-USE
REFUELING
PROP-
ERTY.—Subsection (e) of section 30C of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new paragraph: 
‘‘(6) DUAL-USE REFUELING PROPERTY.— 
‘‘(A) IN
GENERAL.—In the case of any 
dual-use refueling property, 100 percent of the 
cost of such property shall be treated as quali-
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fied alternative fuel refueling property if the 
taxpayer certifies, in such time and manner as 
the Secretary shall prescribe, that such prop-
erty will be used in more than a de minimis ca-
pacity for the purposes described in section 
179A(d)(3)(A) (applied as specified in sub-
section (c)(2)). 
‘‘(B) RECAPTURE.—If at any time within 
5 years after the date of the certification under 
subparagraph (A) the dual-use refueling prop-
erty ceases to be used as required under such 
subparagraph, 100 percent of the cost of such 
property shall be subject to recapture under 
paragraph (5). 
‘‘(C) DUAL-USE REFUELING PROPERTY.— 
For purposes of this paragraph, the term ‘dual- 
use refueling property’ means property that is 
both qualified alternative fuel vehicle refueling 
property and property used— 
‘‘(i) to store or dispense fuels not de-
scribed in subsection (c)(2), or 
‘‘(ii) to store fuels described in sub-
section (c)(2) for any purpose other than 
delivery of such fuel into the fuel tank of 
a motor vehicle.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
June 30, 2011. 
SEC. 4. EXTENSION OF CELLULOSIC BIOFUEL PRODUCER 
CREDIT THROUGH 2014. 
Subparagraph (H) of section 40(b)(6) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘January 
1, 2013’’ and inserting ‘‘January 1, 2015’’. 
SEC. 5. EXTENSION OF SPECIAL DEPRECIATION ALLOW-
ANCE 
FOR 
CELLULOSIC 
BIOFUEL 
PLANT 
PROPERTY. 
Subparagraph (D) of section 168(l)(2) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘January 
1, 2013’’ and inserting ‘‘January 1, 2015’’. 
SEC. 6. ALGAE TREATED AS A QUALIFIED FEEDSTOCK FOR 
PURPOSES OF THE CELLULOSIC BIOFUEL 
PRODUCER CREDIT, ETC. 
(a) 
IN
GENERAL.—Subclause 
(I) 
of 
section 
40(b)(6)(E)(i) of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(I) is derived solely by, or from, 
qualified feedstocks, and’’. 
(b) QUALIFIED FEEDSTOCK; SPECIAL RULES FOR 
ALGAE.—Paragraph (6) of section 40(b) of the Internal 
Revenue Code of 1986, as amended by this Act, is amend-
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ed by redesignating subparagraphs (F) and (G) as sub-
paragraphs (H) and (I), respectively, and by inserting 
after subparagraph (E) the following new subparagraphs: 
‘‘(F) QUALIFIED
FEEDSTOCK.—For pur-
poses of this paragraph, the term ‘qualified 
feedstock’ means— 
‘‘(i) 
any 
lignocellulosic 
or 
hemicellulosic matter that is available on a 
renewable or recurring basis, and 
‘‘(ii) 
any 
cultivated 
algae, 
cyanobacteria, or lemna. 
‘‘(G) SPECIAL RULES FOR ALGAE.—In the 
case of fuel which is derived by, or from, feed-
stock described in subparagraph (F)(ii) and 
which is sold by the taxpayer to another person 
for refining by such other person into a fuel 
which meets the requirements of subparagraph 
(E)(i)(II)— 
‘‘(i) such sale shall be treated as de-
scribed in subparagraph (C)(i), 
‘‘(ii) such fuel shall be treated as 
meeting the requirements of subparagraph 
(E)(i)(II) in the hands of such taxpayer, 
and 
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‘‘(iii) except as provided in this sub-
paragraph, such fuel (and any fuel derived 
from such fuel) shall not be taken into ac-
count under subparagraph (C) with respect 
to the taxpayer or any other person.’’. 
(c) ALGAE TREATED AS A QUALIFIED FEEDSTOCK 
FOR PURPOSES OF BONUS DEPRECIATION FOR BIOFUEL 
PLANT PROPERTY.— 
(1) IN GENERAL.—Subparagraph (A) of section 
168(l)(2) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘solely to produce cellulosic 
biofuel’’ and inserting ‘‘solely to produce second gen-
eration biofuel (as defined in section 40(b)(6)(E))’’. 
(2) CONFORMING
AMENDMENTS.—Subsection 
(l) of section 168 of such Code, as amended by this 
Act, is amended— 
(A) by striking ‘‘cellulosic biofuel’’ each 
place it appears in the text thereof and insert-
ing ‘‘second generation biofuel’’, 
(B) by striking paragraph (3) and redesig-
nating paragraphs (4) through (8) as para-
graphs (3) through (7), respectively, 
(C) by striking ‘‘CELLULOSIC’’ in the 
heading of such subsection and inserting ‘‘SEC-
OND GENERATION’’, and 
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(D) by striking ‘‘CELLULOSIC’’ in the head-
ing of paragraph (2) and inserting ‘‘SECOND 
GENERATION’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 40 of the Internal Revenue Code of 
1986, as amended by this Act, is amended— 
(A) by striking ‘‘cellulosic biofuel’’ each 
place it appears in the text thereof and insert-
ing ‘‘second generation biofuel’’, 
(B) by striking ‘‘CELLULOSIC’’ in the 
headings of subsections (b)(6), (b)(6)(E), and 
(d)(3)(D) and inserting ‘‘SECOND
GENERA-
TION’’, and 
(C) by striking ‘‘CELLULOSIC’’ in the head-
ings 
of 
subsections 
(b)(6)(C), 
(b)(6)(D), 
(b)(6)(H), (d)(6), and (e)(3) and inserting 
‘‘SECOND GENERATION’’. 
(2) Clause (ii) of section 40(b)(6)(E) of such 
Code is amended by striking ‘‘Such term shall not’’ 
and inserting ‘‘The term ‘second generation biofuel’ 
shall not’’. 
(3) Paragraph (1) of section 4101(a) of such 
Code is amended by striking ‘‘cellulosic biofuel’’ and 
inserting ‘‘second generation biofuel’’. 
(e) EFFECTIVE DATE.— 
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(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to fuels sold or used after the date of the 
enactment of this Act. 
(2) APPLICATION TO BONUS DEPRECIATION.— 
The amendments made by subsection (c) shall apply 
to property placed in service after the date of the en-
actment of this Act. 
SEC. 7. BUDGETARY EFFECTS. 
(a) PAYGO SCORECARD.—The budgetary effects of 
this Act (and the amendments made by this Act) shall not 
be entered on either PAYGO scorecard maintained pursu-
ant to section 4(d) of the Statutory Pay-As-You-Go Act 
of 2010. 
(b) SENATE PAYGO SCORECARD.—The budgetary 
effects of this Act (and the amendments made by this Act) 
shall not be recorded on any PAYGO scorecard main-
tained for purposes of section 201 of S. Con. Res. 21 
(110th Congress). 
Æ 
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