Sen. Max Baucus, from Montana has taken the wraps off a tax package that is designed to help biodiesel and ethanol.

This story from Ethanol Producer Magazine says Baucus’s bill would add enough money to put the total incentive $9 billion above the 2007 Farm Bill’s baseline levels… but part of that money would come from taking away from existing biofuels tax incentives:

One of the provisions of the bill would decrease the 51 cents per gallon ethanol blenders tax credit to 46 cents per gallon. Language in the bill indicates that the change would come into effect in 2009. Although the blenders tax credit would be reduced, the 54 cents per gallon ethanol tariff would remain in place through 2010 if the provisions are enacted.

Another biofuels provision in the bill is a new ethanol tax credit for cellulosic ethanol producers. The 50 cents per gallon credit would be added to the 51 cents per gallon under the ethanol blenders tax credit and the 10 cents per gallon small producer credit and is applicable for up to 60 million gallons per year.

The bill also calls for a two-year extension through 2010 of the $1 per gallon and 50 cents per gallon biodiesel tax credit. In addition, small biodiesel producers would see a four-year extension of the 10 cents per gallon tax credit.