To amend the Internal Revenue Code of 1986 to allow allocation of small ethanol producer credit to patrons of cooperative, and for other purposes.

Amends the Internal Revenue Code respecting the small ethanol producer credit to: (1) authorize credit allocation among a cooperative's patrons; (2) increase the gallon capacity for eligible producers; (3) make the credit a non-passive income credit; and (4) remove the credit from the alcohol fuel credit gross income inclusion.