Biodiesel, Renewable Diesel, and Alternative Fuels Extension Act of 2021
Bill: H.R.3272 | Sponsor: Rep. Costa, Jim (D-CA)
Policy area: Taxation

Summary:
Biodiesel, Renewable Diesel, and Alternative Fuels Extension Act of 2021
This bill extends and modifies the tax credits for biodiesel, renewable diesel, and alternative fuels.
The bill extends through 2025 (1) the income tax credit for biodiesel and renewable diesel used as fuel, (2) the excise tax credit for biodiesel mixtures, (3) the excise tax credit for alternative fuels, (4) the excise tax credit for alternative fuel mixtures, and (5) the payments that are equivalent to the excise tax credits for biodiesel mixtures and alternative fuels.
Beginning in 2023, the bill phases down the credits for biodiesel, biodiesel mixtures, alternative fuels, and alternative fuel mixtures by reducing the credits by specified amounts.

To amend the Internal Revenue Code of 1986 to extend biodiesel and 
          renewable diesel incentives, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Biodiesel, Renewable Diesel, and 
Alternative Fuels Extension Act of 2021''.

SEC. 2. EXTENSION OF BIODIESEL AND RENEWABLE DIESEL INCENTIVES.

    (a) Income Tax Credit.--
            (1) Extension.--Subsection (g) of section 40A of the 
        Internal Revenue Code of 1986 is amended by striking ``December 
        31, 2022'' and inserting ``December 31, 2025''.
            (2) Phasedown.--Subsection (b) of section 40A of such Code 
        is amended by adding at the end the following:
            ``(5) Phasedown.--In the case of taxable years beginning 
        after 2022, paragraphs (1)(A) and (2)(A) shall each be applied 
        by substituting for `$1.00' the following:
                    ``(A) `$0.75' for taxable years beginning in 2023, 
                and
                    ``(B) `$0.50' for taxable years beginning after 
                2023.''.
    (b) Excise Tax Incentives.--
            (1) Credit.--Paragraph (6) of section 6426(c) of such Code 
        is amended by striking ``December 31, 2022'' and inserting 
        ``December 31, 2025''.
            (2) Payments.--Subparagraph (B) of section 6427(e)(6) of 
        such Code is amended by striking ``December 31, 2022'' and 
        inserting ``December 31, 2025''.
            (3) Phasedown.--Paragraph (2) of section 6426(c) of such 
        Code is amended by inserting before the period at the end the 
        following: ``($0.75 for fuel sold or used in 2023 and $0.50 for 
        fuel sold or used after 2023)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to fuel sold or used after December 31, 2021.

SEC. 3. EXTENSION OF EXCISE TAX CREDITS RELATING TO ALTERNATIVE FUELS.

    (a) Extension of Alternative Fuels Excise Tax Credits.--
            (1) In general.--Paragraph (5) of section 6426(d) and 
        paragraph (3) of section 6426(e) of the Internal Revenue Code 
        of 1986 are each amended by striking ``December 31, 2021'' and 
        inserting ``December 31, 2025''.
            (2) Outlay payments for alternative fuels.--Subparagraph 
        (C) of section 6427(e)(6) of such Code is amended by striking 
        ``December 31, 2021'' and inserting ``December 31, 2025''.
            (3) Phasedown.--
                    (A) Alternative fuel credit.--Paragraph (1) of 
                section 6426(d) of such Code is amended by inserting 
                ``(37.5 cents for fuel sold or used in 2023 and 25 
                cents for fuel sold or used after 2023)'' after ``50 
                cents''.
                    (B) Alternative fuel mixture credit.--Paragraph (1) 
                of section 6426(e) of such Code is amended by inserting 
                ``(37.5 cents for fuel sold or used in 2023 and 25 
                cents for fuel sold or used after 2023)'' after ``50 
                cents''.
    (b) Effective Date.--The amendments made by this section shall 
apply to fuel sold or used after December 31, 2021.
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