To amend the Internal Revenue Code of 1986 to provide for a small agri-biodiesel producer credit and to improve the small ethanol producer credit.

Amends the Internal Revenue Code to revise the tax credit for biodiesel used as fuel to include a credit for the production of agri-biodiesel fuel equal to 10 cents for each gallon produced. Limits: (1) the amount of qualified agri-biodiesel production of a producer to 15 million gallons for any taxable year; and (2) eligible producers to those with a productive capacity not exceeding 60 million gallons.

Revises the small ethanol producer tax credit to: (1) expand the eligibility of small ethanol producers for the credit; (2) exclude the credit from the definition of passive activity credit; and (3) exclude credit amounts from inclusion in gross income.