second generation biofuel
(6) Second generation biofuel producer credit (A) In general The second generation biofuel producer credit of any taxpayer is an amount equal to the applicable amount for each gallon of qualified second generation biofuel production. (B) Applicable amount For purposes of subparagraph (A), the applicable amount means $1.01, except that such amount shall, in the case of second generation biofuel which is alcohol, be reduced by the sum of— (i) the amount of the credit in effect for such alcohol under subsection (b)(1) (without regard to subsection (b)(3)) at the time of the qualified second generation biofuel production, plus (ii) in the case of ethanol, the amount of the credit in effect under subsection (b)(4) at the time of such production. (C) Qualified second generation biofuel production For purposes of this section, the term “qualified second generation biofuel production” means any second generation biofuel which is produced by the taxpayer, and which during the taxable year— (i) is sold by the taxpayer to another person— (I) for use by such other person in the production of a qualified second generation biofuel mixture in 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 second generation biofuel at retail to another person and places such second generation biofuel in the fuel tank of such other person, or (ii) is used or sold by the taxpayer for any purpose described in clause (i). The qualified second generation 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. (D) Qualified second generation biofuel mixture For purposes of this paragraph, the term “qualified second generation biofuel mixture” means a mixture of second generation biofuel and gasoline or of second generation biofuel and a special fuel which— (i) is sold by the person producing such mixture to any person for use as a fuel, or (ii) is used as a fuel by the person producing such mixture. (E) Second generation biofuel For purposes of this paragraph— (i) In general The term “second generation biofuel” means any liquid fuel which— (I) is derived by, or from, qualified feedstocks, and (II) meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act ( 42 U.S.C. 7545 ). (ii) Exclusion of low-proof alcohol The term “second generation biofuel” shall not include any alcohol with a proof of less than 150. The determination of the proof of any alcohol shall be made without regard to any added denaturants. (iii) Exclusion of certain fuels The term “second generation biofuel” shall not include any fuel if— (I) more than 4 percent of such fuel (determined by weight) is any combination of water and sediment, (II) the ash content of such fuel is more than 1 percent (determined by weight), or (III) such fuel has an acid number greater than 25. (F) Qualified feedstock For purposes 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, feedstock 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) and the refined fuel is not excluded under subparagraph (E)(iii)— (i) such sale shall be treated as described in subparagraph (C)(i), (ii) such fuel shall be treated as meeting the requirements of subparagraph (E)(i)(II) and as not being excluded under subparagraph (E)(iii) in the hands of such taxpayer, and (iii) except as provided in this subparagraph, such fuel (and any fuel derived from such fuel) shall not be taken into account under subparagraph (C) with respect to the taxpayer or any other person. (H) Allocation of second generation biofuel producer credit to patrons of cooperative Rules similar to the rules under subsection (g)(6) shall apply for purposes of this paragraph. (I) Registration requirement No credit shall be determined under this paragraph with respect to any taxpayer unless such taxpayer is registered with the Secretary as a producer of second generation biofuel under section 4101. (J) Application of paragraph (i) In general This paragraph shall apply with respect to qualified second generation biofuel production after December 31, 2008 , and before January 1, 2025 . (ii) No carryover to certain years after expiration If this paragraph ceases to apply for any period by reason of clause (i), rules similar to the rules of subsection (e)(2) shall apply.