,,ii  #aac? ,,congress  #b;d ,session   
,s4 #bjba  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,febru>y #ab1 #bjad    
,ms4 ,cantwell 7= h]self & ,mr4         
,grassley7 introduc$ ! foll[+ bill2 :i* 
0 read twice & ref]r$ to ! ,committee on
 ,f9ance  ,a ,,bill  ,to am5d ! ,int]nal
 ,rev5ue ,code ( #aihf to modify !      
inc5tives = ! production ( biodiesel4   
#a4 ,%ort title ,?is ,act may be cit$ z 
! ,biodiesel ,tax ,inc5tive ,re=m &     
,ext5sion ,act ( #bjad4  #b4 ,re=m (    
biodiesel income tax inc5tives  7a7 ,9  
g5]al ,section #dj;,a ( ! ,int]nal      
,rev5ue ,code ( #aihf is am5d$ to read z
 foll[s3  #dj;,a4 ,biodiesel production 
7a7 ,9 g5]al ,= purposes ( section #ch1 
! biodiesel fuels cr$it det]m9$ "u ?is  
section = ! taxable ye> is #a4jj = ea*  
gallon ( biodiesel produc$ by ! taxpay] 
:i* dur+ ! taxable ye>--  7#a7 is sold  
by su* produc] to ano!r p]son--  7,a7 = 
use by su* o!r p]son's trade or bus9ess 
7o!r ?an casual (f-f>m production71     
7,b7 = use by su* o!r p]son z a fuel 9 a

 trade or bus9ess1 or  7,c7 :o sells su*
 biodiesel at retail to ano!r p]son &   
places su* biodiesel 9 ! fuel tank ( su*
 o!r p]son1 or  7#b7 is us$ or sold by  
su* produc] = any purpose describ$ 9    
p>agraph 7#a74  7b7 ,increas$ cr$it =   
small produc]s  7#a7 ,9 g5]al ,9 ! case 
( any eligible small biodiesel produc]1 
subsection 7a7 %all be appli$ by        
increas+ ! doll> am\nt conta9$ !re9 by  
#aj c5ts4  7#b7 ,limitation ,p>agraph   
7#a7 %all only apply ) respect to ! fir/
 #ae1jjj1jjj gallons ( biodiesel produc$
 by any eligible small biodiesel produc]
 dur+ any taxable ye>4  7c7 ,coord9ation
 ) cr$it aga9/ excise tax ,! am\nt ( !  
cr$it det]m9$ "u ?is section ) respect  
to any biodiesel %all be r$uc$ to take  
into acc\nt any b5efit provid$ ) respect
 to su* biodiesel solely by reason ( !  
application ( section #fdbf or          
#fdbg7;e74  7d7 ,def9itions & special   
rules ,= purposes ( ?is section--  7#a7 
,biodiesel ,! t]m biodiesel means liquid
 fuel d]iv$ f biomass :i* meets--  7,a7 

! regi/ration requirem5ts = fuels & fuel
 additives e/abli%$ by ! ,environm5tal  
,protection ,ag5cy "u section #baa ( !  
,clean ,air ,act 7#db ,u4,s4,c4 #gede71 
&  7,b7 ! requirem5ts ( ! ,am]ican      
,society = ,te/+ & ,mat]ials ,d#fgea4   
,su* t]m %all n include any liquid )    
respect to :i* a cr$it may be det]m9$ "u
 section #dj4  7#b7 ,biodiesel n us$ = a
 qualifi$ purpose ,if--  7,a7 any cr$it 
0 det]m9$ ) respect to any biodiesel "u 
?is section1 &  7,b7 any p]son does n   
use su* biodiesel = ! purpose describ$ 9
 subsection 7a71  !n !re is h]eby impos$
 on su* p]son a tax equal to ! product (
 ! rate applicable "u subsection 7a7 & !
 numb] ( gallons ( su* biodiesel4  7#c7 
,pass-?ru 9 ! case ( e/ates & tru/s ,"u 
regulations prescrib$ by ! ,secret>y1   
rules simil> to ! rules ( subsection 7d7
 ( section #eb %all apply4  7#d7        
,limitation to biodiesel produc$ 9 !    
,unit$ ,/ates ,no cr$it %all be det]m9$ 
"u ?is section ) respect to any         
biodiesel unless su* biodiesel is       

produc$ 9 ! ,unit$ ,/ates f raw fe$/ock4
 ,= purposes ( ?is p>agraph1 ! t]m      
,unit$ ,/ates includes any possession ( 
! ,unit$ ,/ates4  7#e7 ,biodiesel       
transf]s f an ,,irs regi/]$ biodiesel   
production facility to an ,,irs regi/]$ 
t]m9al or ref9]y ,! cr$it all[$ "u      
subsection 7a7 %all be all[$ to ! t]m9al
 or ref9]y ref]r$ to 9 section          
#djha7;a77#a77;,b77i7 9 in/ances :]e    
section #djha7;a77#a77;,b77iii7 is      
applicable4 ,! cr$it all[$ "u subsection
 7a7 _c be claim$ by a t]m9al or ref9]y 
on fuel ^u :i* ! cr$it 0 previ\sly      
claim$ by a biodiesel produc]4  7e7     
,def9itions & special rules = small     
biodiesel produc]s  7#a7 ,eligible small
 biodiesel produc] ,! t]m eligible small
 biodiesel produc] means a p]son :o at  
all times dur+ ! taxable ye> has a      
productive capacity = biodiesel n 9     
excess ( #fj1jjj1jjj gallons4  7#b7     
,aggregation rule ,= purposes ( !       
#ae1jjj1jjj gallon limitation "u        
subsection 7b77#b7 & ! #fj1jjj1jjj      

gallon limitation "u p>agraph 7#a71 all 
memb]s ( ! same controll$ gr\p (        
corporations 7)9 ! mean+ ( section      
#bfg7;f77 & all p]sons "u common control
 7)9 ! mean+ ( section #eb7;b7 b det]m9$
 by treat+ an int]e/ ( m ?an #ej p]c5t z
 a controll+ int]e/7 %all be treat$ z #a
 p]son4  7#c7 ,p>tn]%ip1 s corporation1 
& o!r pass-?ru entities ,9 ! case ( a   
p>tn]%ip1 tru/1 ,s corporation1 or o!r  
pass-?ru entity1 ! limitations conta9$ 9
 subsection 7b77#b7 & p>agraph 7#a7 %all
 be appli$ at ! entity level & at !     
p>tn] or simil> level4  7#d7 ,allocation
 ,= purposes ( ?is subsection1 9 ! case 
( a facility 9 :i* m ?an #a p]son has an
 int]e/1 productive capacity %all be    
allocat$ among su* p]sons 9 su* mann] z 
! ,secret>y may prescribe4  7#e7        
,regulations ,! ,secret>y may prescribe 
su* regulations z may be necess>y--     
7,a7 to prev5t ! cr$it provid$ = 9      
subsection 7b7 f directly or indirectly 
b5efitt+ any p]son ) a direct or        
indirect productive capacity ( m ?an    

#fj1jjj1jjj gallons ( biodiesel dur+ !  
taxable ye>1 or  7,b7 to prev5t any     
p]son f directly or indirectly b5efitt+ 
) respect to m ?an #ae1jjj1jjj gallons  
dur+ ! taxable ye>4  7#f7 ,allocation ( 
small biodiesel cr$it to patrons (      
coop]ative  7,a7 ,election to allocate  
7i7 ,9 g5]al ,9 ! case ( a coop]ative   
organization describ$ 9 section         
#acha7;a71 any portion ( ! increase     
det]m9$ "u subsection 7b7 = ! taxable   
ye> may1 at ! election ( ! organization1
 be apportion$ pro rata among patrons ( 
! organization on ! basis ( ! quantity  
or value ( bus9ess done ) or = su*      
patrons = ! taxable ye>4  7ii7 ,=m &    
effect ( election ,an election "u clause
 7i7 = any taxable ye> %all be made on a
 timely fil$ return = su* ye>4 ,su*     
election1 once made1 %all be irrevocable
 = su* taxable ye>4 ,su* election %all n
 take effect unless ! organization      
designates ! apportionm5t z su* 9 a     
writt5 notice mail$ to its patrons dur+ 
! paym5t p]iod describ$ 9 section       

#achb7;d74  7,b7 ,treatm5t (            
organizations & patrons  7i7            
,organizations ,! am\nt ( ! cr$it n     
apportion$ to patrons pursuant to       
subp>agraph 7,a7 %all be includ$ 9 !    
am\nt det]m9$ "u subsection 7b7 = !     
taxable ye> ( ! organization4  7ii7     
,patrons ,! am\nt ( ! cr$it apportion$  
to patrons pursuant to subp>agraph 7,a7 
%all be includ$ 9 ! am\nt det]m9$ "u su*
 subsection = ! fir/ taxable ye> ( ea*  
patron end+ on or aft] ! la/ day ( !    
paym5t p]iod 7z def9$ 9 section         
#achb7;d77 = ! taxable ye> ( !          
organization or1 if e>li]1 = ! taxable  
ye> ( ea* patron end+ on or aft] ! date 
on :i* ! patron receives notice f !     
coop]ative ( ! apportionm5t4  7iii7     
,special rules = decrease 9 cr$its =    
taxable ye> ,if ! am\nt ( ! cr$it ( !   
organization det]m9$ "u su* subsection =
 a taxable ye> is less ?an ! am\nt ( su*
 cr$it %[n on ! return ( ! organization 
= su* ye>1 an am\nt equal to ! excess   
(--  7,i7 su* r$uction1 ov]  7,,ii7 !   

am\nt n apportion$ to su* patrons "u    
subp>agraph 7,a7 = ! taxable ye>1 %all  
be treat$ z an increase 9 tax impos$ by 
?is *apt] on ! organization4  ,su*      
increase %all n be treat$ z tax impos$  
by ?is *apt] = purposes ( det]m9+ !     
am\nt ( any cr$it "u ?is *apt] or =     
purposes ( section #ee4  7f7 ,r5ewable  
diesel ,= purposes ( ?is title--  7#a7  
,treatm5t 9 ! same mann] z biodiesel    
,r5ewable diesel %all be treat$ 9 ! same
 mann] z biodiesel4  7#b7 ,r5ewable     
diesel def9$ ,! t]m r5ewable diesel     
means liquid fuel d]iv$ f biomass :i*   
meets--  7,a7 ! regi/ration requirem5ts 
= fuels & fuel additives e/abli%$ by !  
,environm5tal ,protection ,ag5cy "u     
section #baa ( ! ,clean ,air ,act 7#db  
,u4,s4,c4 #gede71 &  7,b7 ! requirem5ts 
( ! ,am]ican ,society = ,te/+ &         
,mat]ials ,d#ige or ,d#cif1 or o!r      
equival5t /&>d approv$ by ! ,secret>y4  
,su* t]m %all n include any liquid )    
respect to :i* a cr$it may be det]m9$ "u
 section #dj4 ,su* t]m does n include   

any fuel d]iv$ f coprocess+ biomass ) a 
fe$/ock :i* is n biomass4 ,= purposes ( 
?is p>agraph1 ! t]m biomass has ! mean+ 
giv5 su* t]m by section #de,k7c77#c74   
7#c7 ,c]ta9 aviation fuel ,except z     
provid$ 9 ! la/ #c s5t5ces ( p>agraph   
7#b71 ! t]m r5ewable diesel %all include
 fuel d]iv$ f biomass :i* meets !       
requirem5ts ( a ,dep>tm5t ( ,def5se     
specification = milit>y jet fuel or an  
,am]ican ,society = ,te/+ & ,mat]ials   
specification = aviation turb9e fuel4   
7g7 ,t]m9ation ,?is section %all n apply
 to any sale or use aft] ,decemb] #ca1  
#bjag4  4  7b7 ,cl]ical am5dm5t ,! table
 ( sections = subp>t ,d ( "p ,,iv (     
sub*apt] ,a ( *apt] #a ( ! ,int]nal     
,rev5ue ,code ( #aihf is am5d$ by /rik+ 
! item relat+ to section #dj;,a & ins]t+
 ! foll[+ new item3  ,sec4 #dj;,a4      
,biodiesel production4  4  7c7          
,effective date ,! am5dm5ts made by ?is 
section %all apply to biodiesel sold or 
us$ aft] ,decemb] #ca1 #bjac4  #c4 ,re=m
 ( biodiesel excise tax inc5tives  7a7  

,9 g5]al ,subsection 7c7 ( section #fdbf
 ( ! ,int]nal ,rev5ue ,code ( #aihf is  
am5d$ to read z foll[s3  7c7 ,biodiesel 
cr$it  7#a7 ,9 g5]al ,= purposes ( ?is  
section1 ! biodiesel cr$it is #a4jj =   
ea* gallon ( biodiesel produc$ by !     
taxpay] & :i*--  7,a7 is sold by su*    
produc] to ano!r p]son--  7i7 = use by  
su* o!r p]son's trade or bus9ess 7o!r   
?an casual (f-f>m production71  7ii7 =  
use by su* o!r p]son z a fuel 9 a trade 
or bus9ess1 or  7iii7 :o sells su*      
biodiesel at retail to ano!r p]son &    
places su* biodiesel 9 ! fuel tank ( su*
 o!r p]son1 or  7,b7 is us$ or sold by  
su* produc] = any purpose describ$ 9    
subp>agraph 7,a74  7#b7 ,def9itions ,any
 t]m us$ 9 ?is subsection :i* is also   
us$ 9 section #dj;,a %all h ! mean+ giv5
 su* t]m by section #dj;,a4  7#c7       
,biodiesel transf]s f an ,,irs regi/]$  
biodiesel production facility to an     
,,irs regi/]$ t]m9al ,! cr$it all[$ "u  
?is subsection c be claim$ by a regi/]$ 
t]m9al or ref9]y 9 in/ances :]e section 

#djha7;a77#a77;,b77iii7 is applicable4  
,! cr$it all[$ "u ?is subsection _c be  
claim$ by a t]m9al or ref9]y on fuel ^u 
:i* ! cr$it 0 previ\sly claim$ by a     
biodiesel produc]4  7#d7 ,t]m9ation ,?is
 subsection %all n apply to any sale1   
use1 or removal = any p]iod aft]        
,decemb] #ca1 #bjag4  4  7b7 ,paym5t (  
cr$it ,subsection 7e7 ( section #fdbg ( 
! ,int]nal ,rev5ue ,code ( #aihf is     
am5d$--  7#a7 by /rik+ or ! biodiesel   
mixture cr$it 9 p>agraph 7#a71  7#b7 by 
r$esignat+ p>agraphs 7#c7 ?r\gh 7#f7 z  
p>agraphs 7#d7 ?r\gh 7#g71 respectively1
 & by ins]t+ aft] p>agraph 7#b7 ! foll[+
 new p>agraph3  7#c7 ,biodiesel cr$it   
,if any p]son produces biodiesel & sells
 or uses su* biodiesel z provid$ 9      
section #fdbf7;c71 ! ,secret>y %all pay 
7)\t int]e/7 to su* p]son an am\nt equal
 to ! biodiesel cr$it ) respect to su*  
biodiesel4  1  7#c7 by /rik+ p>agraph   
7#a7 or 7#b7 ea* place x appe>s 9       
p>agraphs 7#d7 & 7#f71 z r$esignat$ by  
p>agraph 7#b71 & ins]t+ p>agraph 7#a71  

7#b71 or 7#c71  7#d7 by /rik+ alt]native
 fuel ea* place x appe>s 9 p>agraphs    
7#d7 & 7#f71 z r$esignat$ by p>agraph   
7#b71 & ins]t+ fuel1  7#e7 by /rik+     
biodiesel mixture 7z def9$ 9 section    
#fdbf7;c77#c77 9 p>agraph 7#g77;,b71 z s
 r$esignat$1 & ins]t+ biodiesel 7)9 !   
mean+ ( section #dj;,a71 &  7#f7 by     
/rik+ #bjac 9 p>agraph 7#g77;,b71 z s   
r$esignat$1 & ins]t+ #bjag4  7c7        
,exemption = biodiesel transf]r$ f a    
regi/]$ produc] to a regi/]$ t]m9al     
,subp>agraph 7,b7 ( section             
#djha7;a77#a7 ( ! ,int]nal ,rev5ue ,code
 ( #aihf is am5d$--  7#a7 by /rik+      
clause 7ii7 9 clause 7i7 & ins]t+       
clauses 7ii7 & 7iii71 &  7#b7 by add+ at
 ! end ! foll[+ new clause3  7iii7      
,exemptions = biodiesel transf]r$ f a   
regi/]$ produc] to a regi/]$ t]m9al ,!  
tax impos$ by ?is p>agraph %all n apply 
to any removal or entry ( biodiesel 7z  
def9$ 9 section #dj;,a7d77#a77 transf]r$
 9 bulk 7)\t reg>d to ! mann] ( su*     
transf]7 to a t]m9al or ref9]y if--     

7,i7 su* biodiesel 0 produc$ by a p]son 
:o is regi/]$ "u section #daja z a      
produc] ( biodiesel & :o provides       
report+ "u ! ,ex,stars fuel report+     
sy/em ( ! ,int]nal ,rev5ue ,s]vice1 &   
7,,ii7 ! op]ator ( su* t]m9al or ref9]y 
is regi/]$ "u section #daja4  4  7d7    
,produc] regi/ration requirem5t         
,subsection 7a7 ( section #fdbf ( !     
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by /rik+ subsections 7d7 & 7e7 9 ! flu% 
s5t5ce at ! end & ins]t+ subsections    
7c71 7d71 & 7e74  7e7 ,recapture        
,subsection 7f7 ( section #fdbf ( !     
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
to read z foll[s3  7f7 ,recapture  7#a7 
,alcohol fuel mixtures ,if--  7,a7 any  
cr$it 0 det]m9$ "u ?is section ) respect
 to alcohol us$ 9 ! production ( any    
alcohol fuel mixture1 &  7,b7 any       
p]son--  7i7 sep>ates ! alcohol f !     
mixture1 or  7ii7 )\t sep>ation1 uses ! 
mixture o!r ?an z a fuel1  !n !re is    
h]eby impos$ on su* p]son a tax equal to
 ! product ( ! applicable am\nt & !     

numb] ( gallons ( su* alcohol4  7#b7    
,biodiesel ,if any cr$it 0 det]m9$ "u   
?is section ) respect to ! production ( 
any biodiesel & any p]son does n use su*
 biodiesel = a purpose describ$ 9       
subsection 7c77#a71 !n !re is h]eby     
impos$ on su* p]son a tax equal to #a = 
ea* gallon ( su* biodiesel4  7#c7       
,applicable laws ,all provisions ( law1 
includ+ p5alties1 %all1 ins(> z         
applicable & n inconsi/5t ) ?is section1
 apply 9 respect ( any tax impos$ "u    
p>agraph 7#a7 or 7#b7 z if su* tax 7    
impos$ by section #djha & n by ?is      
section4  4  7f7 ,cl]ical am5dm5ts  7#a7
 ,! head+ ( section #fdbf ( ! ,int]nal  
,rev5ue ,code ( #aihf is am5d$ by /rik+ 
alcohol fuel1 biodiesel1 & alt]native   
fuel mixtures & ins]t+ alcohol fuel     
mixtures1 biodiesel production1 &       
alt]native fuel mixtures4  7#b7 ,! item 
relat+ to section #fdbf 9 ! table (     
sections = sub*apt] ,b ( *apt] #fe ( su*
 ,code is am5d$ by /rik+ alcohol fuel1  
biodiesel1 & alt]native fuel mixtures & 

ins]t+ alcohol fuel mixtures1 biodiesel 
production1 & alt]native fuel mixtures4 
7g7 ,effective date ,! am5dm5ts made by 
?is section %all apply to biodiesel sold
 or us$ aft] ,decemb] #ca1 #bjac4  #d4  
,biodiesel treat$ z taxable fuel  7a7   
,biodiesel treat$ z taxable fuel ,clause
 7i7 ( section #djhc7;a77#c77;,a7 ( !   
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by ins]t+ 1 includ+ biodiesel 7z def9$ 9
 section #fdbf7;c77#c771 aft] 7o!r ?an  
gasol9e74  7b7 ,effective date ,!       
am5dm5t made by ?is section %all apply  
to biodiesel remov$1 ent]$1 or sold aft]
 ! date :i* is #f mon?s aft] ! date ( ! 
enactm5t ( ?is ,act4