text: SECTION 1. RENEWABLE LIQUID FUELS EXCISE TAX CREDIT.
  
      (a) In General.--Subchapter B of chapter 65 of the Internal Revenue 
  Code of 1986 (relating to rules of special application) is amended by 
  inserting after section 6426 the following new section:
  
  ``SEC. 6426A. CREDIT FOR RENEWABLE LIQUID FUELS.
  
      ``(a) Allowance of Credits.--There shall be allowed as a credit 
  against the tax imposed by section 4081 an amount equal to the 
  renewable liquid mixture credit.
      ``(b) Renewable Liquid Mixture Credit.--
              ``(1) In general.--For purposes of this section, the 
          renewable liquid mixture credit is the product of the 
          applicable amount and the number of gallons of renewable liquid 
          used by the taxpayer in producing any renewable liquid mixture 
          for sale or use in a trade or business of the taxpayer.
              ``(2) Applicable amount.--For purposes of this section, the 
          applicable amount is $1.00.
              ``(3) Renewable liquid mixture.--For purposes of this 
          section, the term `renewable liquid mixture' means a mixture of 
          renewable liquid and taxable fuel which--
                      ``(A) is sold by the taxpayer producing such 
                  mixture to any person for use as a fuel or feedstock, 
                  or
                      ``(B) is used as a fuel or feedstock by the 
                  taxpayer producing such mixture.
          For purposes of subparagraph (A), a mixture produced by any 
          person at a refinery prior to a taxable event which includes 
          renewable liquid shall be treated as sold at the time of its 
          removal from the refinery (and only at such time) or sold to 
          another person for use as a fuel or feedstock.
      ``(c) Other Definitions.--For purposes of this subsection:
              ``(1) Renewable liquid.--The term `renewable liquid' means 
          liquid hydrocarbons derived from waste and byproduct streams 
          including: agricultural byproducts and wastes, aqua-culture 
          products produced from waste streams, food processing plant 
          byproducts, municipal solid and semi-solid waste streams, 
          industrial waste streams, automotive scrap waste streams, and 
          as further provided by regulations.
              ``(2) Taxable fuel.--The term `taxable fuel' has the 
          meaning given such term by section 4083(a)(1).
              ``(3) Feedstock.--The term `feedstock' means any precursor 
          material subject to further processing to make a petrochemical, 
          solvent, or other hydrocarbon which has the effect of 
          displacing conventional crude oil, or products produced from 
          conventional crude oil.
              ``(4) Additional definitions.--Any term used in this 
          section which is also used in section 40B shall have the 
          meaning given such term by section 40B.
      ``(d) Certification for Renewable Liquid Fuel.--No credit shall be 
  allowed under this section unless the taxpayer obtains a certification 
  (in such form and manner as prescribed by the Secretary) from the 
  producer of the renewable liquid fuel, which identifies the product 
  produced.
      ``(e) Mixture Not Used as Fuel, Etc.--
              ``(1) Imposition of tax.--If--
                      ``(A) any credit was determined under this section 
                  with respect to renewable liquid used in the production 
                  of any renewable liquid mixture, and
                      ``(B) any person--
                              ``(i) separates the renewable liquid from 
                          the mixture, or
                              ``(ii) without separation, uses the mixture 
                          other than as a fuel,
                  then there is hereby imposed on such person a tax equal 
                  to the product of the applicable amount and the number 
                  of gallons of such renewable liquid.
              ``(2) Applicable laws.--All provisions of law, including 
          penalties, shall, insofar as applicable and not inconsistent 
          with this section, apply in respect of any tax imposed under 
          paragraph (1) as if such tax were imposed by section 4081 and 
          not by this section.
      ``(f) Coordination With Exemption From Excise Tax.--Rules similar 
  to the rules under section 40(c) shall apply for purposes of this 
  section.
      ``(g) Termination.--This section shall not apply to any sale, use, 
  or removal for any period after December 31, 2010.''.
      (b) Registration Requirement.--Section 4101(a)(1) of the Internal 
  Revenue Code of 1986 (relating to registration) is amended by inserting 
  ``and every person producing or importing renewable liquid as defined 
  in section 6426A(c)(1)'' before ``shall register with the Secretary''.
      (c) Payments.--Section 6427 of the Internal Revenue Code of 1986 is 
  amended by inserting after subsection (f) the following new subsection:
      ``(g) Renewable Liquid Used to Produce Mixture.--
              ``(1) Used to produce a mixture.--If any person produces a 
          mixture described in section 6426A in such person's trade or 
          business, the Secretary shall pay (without interest) to such 
          person an amount equal to the renewable liquid mixture credit 
          with respect to such mixture.
              ``(2) Coordination with other repayment provisions.--No 
          amount shall be payable under paragraph (1) with respect to any 
          mixture with respect to which an amount is allowed as a credit 
          under section 6426A.
              ``(3) Termination.--This subsection shall not apply with 
          respect to any renewable liquid fuel mixture (as defined in 
          section 6426A(b)(3) sold or used after December 31, 2010).''.
      (d) Conforming Amendment.--The last sentence of section 9503(b)(1) 
  is amended by striking ``section 6426'' and inserting ``sections 6426 
  and 6426A''.
      (e) Clerical Amendment.--The table of sections for subchapter B of 
  chapter 65 of the Internal Revenue Code of 1986 is amended by inserting 
  after the item relating to section 6426 the following new item:
  
          ``Sec. 6426A. Credit for renewable liquid fuels.''.
      (f) Effective Dates.--
              (1) In general.--Except as otherwise provided in this 
          subsection, the amendments made by this section shall apply to 
          fuel sold or used after December 31, 2005.
              (2) Registration requirement.--The amendment made by 
          subsection (b) shall take effect on January 1, 2006.
  
  SEC. 2. RENEWABLE LIQUID INCOME TAX CREDIT.
  
      (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
  of the Internal Revenue Code of 1986 (relating to business related 
  credits) is amended by inserting after section 40A the following new 
  section:
  
  ``SEC. 40B. RENEWABLE LIQUID USED AS FUEL.
  
      ``(a) General Rule.--For purposes of section 38, the renewable 
  liquid credit determined under this section for the taxable year is an 
  amount equal to the sum of--
              ``(1) the renewable liquid mixture credit, plus
              ``(2) the renewable liquid credit.
      ``(b) Definition of Renewable Liquid Mixture Credit and Renewable 
  Liquid Credit.--For purposes of this section--
              ``(1) Renewable liquid mixture credit.--
                      ``(A) In general.--The renewable liquid mixture 
                  credit of any taxpayer for any taxable year is $1.00 
                  for each gallon of renewable liquid fuel used by the 
                  taxpayer in the production of a qualified renewable 
                  liquid fuel mixture.
                      ``(B) Qualified renewable liquid mixture.--The term 
                  `qualified renewable liquid mixture' means a mixture of 
                  renewable liquid and taxable fuel (as defined in 
                  section 4083(a)(1)), which--
                              ``(i) is sold by the taxpayer producing 
                          such a mixture to any person for use as a fuel 
                          or feedstock, or
                              ``(ii) is used as a fuel or feedstock by 
                          the taxpayer producing such mixture.
                      ``(C) Sale or use must be in trade or business, 
                  etc.--Renewable liquid used in the production of a 
                  qualified renewable liquid fuel mixture shall be taken 
                  into account--
                              ``(i) only if the sale or use described in 
                          subparagraph (B) is in a trade or business of 
                          the taxpayer, and
                              ``(ii) for the taxable year in which such 
                          sale or use occurs.
              ``(2) Renewable liquid credit.--
                      ``(A) In general.--The renewable liquid credit of 
                  any taxpayer for any taxable year is $1.00 for each 
                  gallon of renewable liquid which is not in a mixture 
                  with taxable fuel and which during the taxable year--
                              ``(i) is used by the taxpayer as a fuel or 
                          feedstock in a trade or business, or
                              ``(ii) is sold by the taxpayer at retail to 
                          a person and placed in the fuel tank of such 
                          person's vehicle.
                      ``(B) User credit not to apply to renewable liquid 
                  sold at retail.--No credit shall be allowed under 
                  subparagraph (A)(i) with respect to any renewable 
                  liquid which was sold in a retail sale described in 
                  subparagraph (A)(ii).
      ``(c) Certification for Renewable Liquid.--No credit shall be 
  allowed under this section unless the taxpayer obtains a certification 
  (in such form and manner as prescribed by the Secretary) from the 
  producer or importer of the renewable liquid fuel which identifies the 
  product produced and percentage of renewable liquid fuel in the 
  product.
      ``(d) Coordination With Credit Against Excise Tax.--The amount of 
  the credit determined under this section with respect to any renewable 
  liquid fuel shall be properly reduced to take into account any benefit 
  provided with respect to such renewable liquid fuel solely by reason of 
  the application of section 6426A or 6427(g).
      ``(e) Definitions and Special Rules.--For purposes of this section, 
  the term `renewable liquid' means liquid hydrocarbons derived from 
  waste and byproduct streams including: agricultural byproducts and 
  wastes, agriculture materials produced from waste streams, food 
  processing plant byproducts, municipal solid and semi-solid waste 
  streams, industrial waste streams, automotive scrap waste streams, as 
  further provided by regulations.
      ``(f) Mixture or Renewable Liquid Not Used as a Fuel, Etc.--
              ``(1) Mixtures.--If--
                      ``(A) any credit was determined under this section 
                  with respect to renewable liquid used in the production 
                  of any qualified renewable liquid mixture, and
                      ``(B) any person--
                              ``(i) separates the renewable liquid from 
                          the mixture, or
                              ``(ii) without separation, uses the mixture 
                          other than as a fuel,
                          then there is hereby imposed on such person a 
                          tax equal to the product of the rate applicable 
                          under subsection (b)(1)(A) and the number of 
                          gallons of such renewable liquid in such 
                          mixture.
              ``(2) Renewable liquid.--If--
                      ``(A) any credit was determined under this section 
                  with respect to the retail sale of any renewable 
                  liquid, and
                      ``(B) any person mixes such renewable liquid or 
                  uses such renewable liquid other than as a fuel, then 
                  there is hereby imposed on such person a tax equal to 
                  the product of the rate applicable under subsection 
                  (b)(2)(A) and the number of gallons of such renewable 
                  liquid.
              ``(3) Applicable laws.--All provisions of law, including 
          penalties, shall, insofar as applicable and not inconsistent 
          with this section, apply in respect of any tax imposed under 
          subparagraph (A) or (B) as if such tax were imposed by section 
          4081 and not by this chapter.
      ``(g) 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.
      ``(h) Termination.--This section shall not apply to any sale or use 
  after December 31, 2010.''.
      (b) Credit Treated as Part of General Business Credit.--Section 
  38(b) of the Internal Revenue Code of 1986 (relating to current year 
  business credit), is amended by striking ``plus'' at the end of 
  paragraph (18), by striking the period at the end of paragraph (17), 
  and inserting ``, plus'', and by inserting after paragraph (19) the 
  following new paragraph:
              ``(20) The renewable liquid credit determined under section 
          40B.''.
      (c) Clerical Amendment.--The table of sections for subpart D of 
  part IV of subchapter A of chapter I of the Internal Revenue Code of 
  1986 is amended by inserting after the item relating to section 40A the 
  following new item:
  
          ``Sec. 40B. Renewable liquid used as fuel.''.
      (d) Effective Date.--The amendments made by this section shall 
  apply to fuel produced, and sold as used, after December 31, 2005.
target: Amends the Internal Revenue Code to allow: (1) a tax credit against the gasoline excise tax for renewable liquid fuels; and (2) a business tax credit for renewable liquid used as fuel. Defines "renewable liquid" as liquid hydrocarbons derived from certain waste and byproduct streams. Terminates such credits after 2010.
feat_title: A bill to amend the Internal Revenue Code of 1986 to provide a renewable liquid fuels tax credit, and for other purposes.