SA 3768. Mr. SALAZAR submitted an amendment intended to be proposed by him to the bill H.R. 2419, to provide for the continuation of agricultural programs through fiscal year 2012, and for other purposes; which was ordered to lie on the table; as follows:

Beginning on page 1472, line 1, strike all through page 1480, line 3, and insert the following:

PART II--ALCOHOL AND OTHER FUELS
SEC. 12311. EXPANSION OF SPECIAL ALLOWANCE TO CELLULOSIC BIOFUEL PLANT PROPERTY.
(a) In General.--Paragraph (3) of section 168(l) (relating to special allowance for cellulosic biomass ethanol plant property) is amended to read as follows:
``(3) CELLULOSIC BIOFUEL.--For purposes of this subsection, the term `cellulosic biofuel' means any liquid transportation fuel derived from any lignocellulosic or hemicellulosic matter (other than food starch) that is available on a renewable or recurring basis.''.
(b) Conforming Amendments.--
(1) Subsection (l) of section 168 is amended by striking ``cellulosic biomass ethanol'' each place it appears and inserting ``cellulosic biofuel''.
(2) The heading of section 168(l) is amended by striking ``Cellulosic Biomass Ethanol'' and inserting ``Cellulosic Biofuel''.
(3) The heading of paragraph (2) of section 168(l) is amended by striking ``CELLULOSIC BIOMASS ETHANOL'' and inserting ``CELLULOSIC BIOFUEL''.
(c) Effective Date.--The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.
SEC. 12312. CREDIT FOR PRODUCTION OF CELLULOSIC BIOFUEL.
(a) In General.--Subpart B of part IV of subchapter A of chapter 1 is amended by adding at the end the following new section:
``SEC. 30D. CELLULOSIC BIOFUEL PRODUCTION.
``(a) General Rule.--There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to $1.28 for each gallon of qualified cellulosic biofuel production.
``(b) Qualified Cellulosic Biofuel Production.--For purposes of this section, the term `qualified cellulosic biofuel production' means any cellulosic biofuel which is produced in the United States by the taxpayer and which during the taxable year--
``(1) is sold by the taxpayer to another person--
``(A) for use by such other person in the production of a qualified cellulosic biofuel mixture in such other person's trade or business (other than casual off-farm production),
``(B) for use by such other person as a fuel in a trade or business, or
``(C) who sells such cellulosic biofuel at retail to another person and places such cellulosic biofuel in the fuel tank of such other person, or
``(2) is used or sold by the taxpayer for any purpose described in paragraph (1).
``(c) Definitions and Special Rules.--For purposes of this section--
``(1) CELLULOSIC BIOFUEL.--The term `cellulosic biofuel' means any liquid transportation fuel derived from any lignocellulosic or hemicellulosic mater (other than food starch) that is available on a renewable or recurring basis.
``(2) QUALIFIED CELLULOSIC BIOFUEL MIXTURE.--The term `qualified cellulosic biofuel mixture' means a mixture of cellulosic biofuel and any petroleum fuel product which--
``(A) is sold by the person producing such mixture to any person for use as a fuel, or
``(B) is used as a fuel by the person producing such mixture.
``(3) ADDITIONAL DISTILLATION EXCLUDED.--The qualified cellulosic biofuel production of any taxpayer for any taxable year shall not include any alcohol which is purchased by the taxpayer and with respect to which such producer increases the proof of the alcohol by additional distillation.
``(4) UNITED STATES PRODUCTION ONLY.--No credit shall be determined under subsection (a) with respect to any biofuel unless such biofuel is produced in the United States.
``(5) CELLULOSIC BIOFUEL NOT USED AS A FUEL.--If any credit is allowed under subsection (a) and any person does not use such cellulosic biofuel for a purpose described in subsection (b), then there is hereby imposed on such person a tax equal to $1.28 for each gallon of such cellulosic biofuel.
``(6) PASS-THRU IN THE CASE OF ESTATES AND TRUSTS.--Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.
``(7) ALLOCATION OF CREDIT TO PATRONS OF COOPERATIVE.--Rules similar to the rules under section 40(g)(6) shall apply for purposes of this section.
``(8) DENIAL OF DOUBLE BENEFIT.--No credit shall be allowed under this section to any taxpayer with respect to any cellulosic biofuel if a credit or payment is allowed with respect to such fuel to such taxpayer under section 40, 40A, 6426, or 6427(e).
``(d) Limitation Based on Amount of Tax.--The credit allowed under subsection (a) for any taxable year shall not exceed the excess of--
``(1) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over
``(2) the sum of the credits allowable under subpart A and sections 27, 30, 30B, and 30C.
``(e) Carryforward and Carryback of Unused Credit.--
``(1) IN GENERAL.--If the credit allowable under subsection (a) exceeds the limitation imposed by subsection (d) for such taxable year (hereinafter in this section referred to as the `unused credit year') reduced by the sum of the credits allowable under subpart A, such excess shall be--
``(A) carried back to the taxable year preceding the unused credit year, and
``(B) carried forward to each of the 20 taxable years following the unused credit year.
``(2) TRANSITION RULE.--The credit under subsection (a) may not be carried to a taxable year beginning before January 1, 2008.
``(f) Application of Section.--This section shall apply with respect to qualified cellulosic biofuel production--
``(1) after December 31, 2007, and
``(2) before the later of--
``(A) the date on which the Secretary of Energy certifies that 1,000,000,000 gallons of cellulosic biofuels have been produced in the United States after December 31, 2007, and
``(B) April 1, 2015.''.
(b) Deduction Allowed for Unused Credit.--Section 196(c) is amended by adding at the end the following new subsection:
``(d) Deduction Allowed for Cellulosic Biofuel Production Credit.--
``(1) IN GENERAL.--If any portion of the credit allowed under section 30D for any taxable year has not, after the application of section 30D(d), been allowed to the taxpayer as a credit under such section for any taxable year, an amount equal to such credit not so allowed shall be allowed to the taxpayer as a deduction for the first taxable year following the last taxable year for which such credit could, under section 30D(e), have been allowed as a credit.
``(2) TAXPAYER'
S DYING OR CEASING TO EXIST.--If a taxpayer dies or ceases to exist before the first taxable year following the last taxable year for which the credit could, under section 30D(e), have been allowed as a credit, the amount described in paragraph (1) (or the proper portion thereof) shall, under regulations prescribed by the Secretary, be allowed to the taxpayer as a deduction for the taxable year in which such death or cessation occurs.''.

(c) Conforming Amendments.--
(1)(A) Section 87 is amended by striking ``and'' at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting ``, and'', and by adding at the end the following new paragraph:
``(3) the cellulosic biofuel production credit determined with respect to the taxpayer under section 30D(a).''.
(B) The heading of section 87 of such Code is amended by striking ``
AND BIODIESEL FUELS CREDITS'' and inserting ``

, BIODIESEL FUELS, and CELLULOSIC BIOFUELS CREDITS''.

(C) The item relating to section 87 is the table of sections for part II of subchapter B of chapter 1 of such Code is amended by striking ``and biodiesel fuels credits'' and inserting ``, biodiesel fuels, and cellulosic biofuels credits''.
(2) The table of sections for subpart B of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 40A the following new item:

``Sec..30D..Cellulosic biofuel production.''.

(d) Effective Date.--The amendments made by this section shall apply to fuel produced after December 31, 2007.


(As printed in the Congressional Record for the Senate on Nov 15, 2007.)