text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Ethanol Stimulus Act of 2006''.
  
  SEC. 2. ETHANOL PRODUCTION TAX INCENTIVES IN HIGH-CONSUMPTION, LOW-
                PRODUCTION STATES.
  
      (a) In General.--Section 40(b)(4) of the Internal Revenue Code of 
  1986 (relating to small ethanol producer credit) is amended by adding 
  at the end the following new subparagraph:
                      ``(E) Credit for ethanol production in two-two 
                  states.--
                              ``(i) In general.--In the case of qualified 
                          ethanol production by any eligible small 
                          ethanol producer in all eligible ethanol 
                          production facilities of such producer--
                                      ``(I) subparagraph (A) shall be 
                                  applied by substituting `20 cents' for 
                                  `10 cents', and
                                      ``(II) subparagraph (C) shall be 
                                  applied by substituting `50,000,000 
                                  gallons' for `15,000,000 gallons'.
                              ``(ii) 5-year per facility limitation on 
                          credit amount.--With respect to each eligible 
                          ethanol production facility, the credit 
                          determined under this section by reason of this 
                          subparagraph shall apply to production from 
                          such facility for the period--
                                      ``(I) beginning with the taxable 
                                  year during which production from such 
                                  facility begins, and
                                      ``(II) ending on the last day of 
                                  the fourth taxable year following the 
                                  taxable year described in subclause 
                                  (I).
                              ``(iii) Eligible ethanol production 
                          facility.--For purposes of this subparagraph, 
                          the term `eligible ethanol production facility' 
                          means any ethanol production facility the 
                          original use of which commences with the 
                          taxpayer and--
                                      ``(I) which is acquired by purchase 
                                  (as defined in section 179(d)(2)) by 
                                  the taxpayer after August 8, 2005, and 
                                  before August 9, 2010, but only if no 
                                  written binding contract for the 
                                  acquisition was in effect before August 
                                  9, 2005,
                                      ``(II) which is acquired by the 
                                  taxpayer pursuant to a written binding 
                                  contract which was entered into after 
                                  August 8, 2005, and before August 9, 
                                  2010, or
                                      ``(III) in the case of a taxpayer 
                                  constructing property for the 
                                  taxpayer's own use, the construction of 
                                  which begins after August 8, 2005, and 
                                  before August 9, 2010,
                          in a State which is a two-two State on the date 
                          of such purchase under subclause (I), of such 
                          written binding contract under subclause (II), 
                          or the beginning of such construction under 
                          subclause (III).
                              ``(iv) Two-two state.--For purposes of this 
                          subparagraph, the term `two-two State' means 
                          for any period any State (as determined by the 
                          Energy Information Administration) within 
                          which--
                                      ``(I) is consumed more than 2 
                                  percent of the aggregate amount of 
                                  gasoline consumed in all States during 
                                  such period, and
                                      ``(II) is produced less than 2 
                                  percent of the aggregate amount of 
                                  ethanol produced in all States during 
                                  such period.''.
      (b) Eligible Small Ethanol Producer.--Section 40(g)(1) of the 
  Internal Revenue Code of 1986 (defining eligible small ethanol 
  producer) is amended by inserting ``(150,000,000 gallons in the case of 
  such productive capacity in all two-two States (as defined in 
  subsection (b)(4)(E)(iv))'' after ``60,000,000 gallons''.
      (c) Conforming Amendment.--Section 40(g)(2) of the Internal Revenue 
  Code of 1986 is amended by striking ``For purposes of the 15,000,000 
  gallon limitation under subsection (b)(4)(C) and the 60,000,000 gallon 
  limitation under paragraph (1)'' and inserting ``For purposes of each 
  gallon limitation under subsection (b)(4) and paragraph (1)''.
      (d) Effective Date.--The amendments made by this section shall 
  apply to ethanol produced in taxable years ending after the date of the 
  enactment of this Act.
target: Ethanol Stimulus Act of 2006 - Amends the Internal Revenue Code to provide for an increased small ethanol producer tax credit for ethanol production in states which have a gasoline consumption rate of more than 2% of aggregate nationwide consumption and which produce less than 2% of the aggregate nationwide amount of ethanol (two-two states).
feat_title: To amend the Internal Revenue Code of 1986 to provide a tax incentive to produce ethanol in high-consumption, low-production States, and for other purposes.