Agriculture Environmental Stewardship Act of 2019
This bill allows energy tax credits through 2021 for investments in (1) qualified biogas property, or (2) qualified manure resource recovery property. The bill also permits new clean renewable energy bonds to be used for such properties.
"Qualified biogas property" comprises a system that (1) uses anaerobic digesters or other specified processes to convert biomass into a gas which is at least 52% methane, and (2) captures the gas for use as a fuel. The term includes property that cleans and conditions the gas for use as a fuel.
"Qualified manure resource recovery property" comprises a system that uses specified processes to recover the nutrients nitrogen and phosphorus from a non-treated digestate or animal manure by reducing or separating at least 50% of the nutrients, excluding any reductions during the incineration, storage, composting, or field application of the non-treated digestate or animal manure. The term also includes certain processing equipment.
The Department of the Treasury must enter into an agreement with the National Renewable Energy Laboratory for a study of biogas and report to Congress on the study.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3744 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 3744
To amend the Internal Revenue Code of 1986 to make qualified biogas
property and qualified manure resource recovery property eligible for
the energy credit and to permit renewable energy bonds to finance
qualified biogas property, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 12, 2019
Mr. Kind (for himself, Mr. Reed, Mr. Pocan, Mrs. Walorski, Mr. Welch,
Mr. Gallagher, Mr. Peters, Mr. Simpson, and Mr. Collins of New York)
introduced the following bill; which was referred to the Committee on
Ways and Means, and in addition to the Committee on Science, Space, and
Technology, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to make qualified biogas
property and qualified manure resource recovery property eligible for
the energy credit and to permit renewable energy bonds to finance
qualified biogas property, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Agriculture Environmental
Stewardship Act of 2019''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Incentives and encouragement for the conservation and
appropriate handling of nutrients contained in organic matter
are necessary.
(2) Biogas systems will save Federal, State, and local
taxpayers money by converting waste into useful products, such
as fuel, fertilizer, thermal heat, feedstock for hydrogen fuel
cells, and renewable chemicals.
(3) Manure resource recovery systems will save Federal,
State, and local taxpayers money by recovering the nutrients
contained in organic matter from their source, rather than
recovering the nutrients after they have entered landfills or
waterways.
SEC. 3. ENERGY CREDIT FOR QUALIFIED BIOGAS PROPERTY AND QUALIFIED
MANURE RESOURCE RECOVERY PROPERTY.
(a) In General.--Section 48(a)(3)(A) of the Internal Revenue Code
of 1986 is amended by striking ``or'' at the end of clause (vi) and by
adding at the end the following new clauses:
``(viii) qualified biogas property, or
``(ix) qualified manure resource recovery
property,''.
(b) 30-Percent Credit.--Section 48(a)(2)(A)(i) of such Code is
amended by striking ``and'' at the end of subclause (III), by striking
``and'' at the end of subclause (IV), and by adding at the end the
following new subclauses:
``(V) qualified biogas property,
and
``(VI) qualified manure resource
recovery property, and''.
(c) Definitions.--Section 48(c) of such Code is amended by adding
at the end the following new paragraphs:
``(5) Qualified biogas property.--
``(A) In general.--The term `qualified biogas
property' means property comprising a system which--
``(i) uses anaerobic digesters, or other
biological, chemical, thermal, or mechanical
processes (alone or in combination), to convert
biomass (as defined in section 45K(c)(3)) into
a gas which consists of not less than 52
percent methane, and
``(ii) captures such gas for use as a fuel.
``(B) Inclusion of certain cleaning and
conditioning equipment.--Such term shall include any
property which cleans and conditions the gas referred
to in subparagraph (A) for use as a fuel.
``(C) Termination.--No credit shall be determined
under this section with respect to any qualified biogas
property for any period after December 31, 2021.
``(6) Qualified manure resource recovery property.--
``(A) In general.--The term `qualified manure
resource recovery property' means property comprising a
system which uses physical, biological, chemical,
thermal, or mechanical processes to recover the
nutrients nitrogen and phosphorus from a non-treated
digestate or animal manure by reducing or separating at
least 50 percent of the concentration of such
nutrients, excluding any reductions during the
incineration, storage, composting, or field application
of the non-treated digestate or animal manure.
``(B) Inclusion of certain processing equipment.--
Such term shall include--
``(i) any property which is used to recover
the nutrients referred to in subparagraph (A),
such as--
``(I) biological reactors,
``(II) crystallizers,
``(III) reverse osmosis membranes
and other water purifiers,
``(IV) evaporators,
``(V) distillers,
``(VI) decanter centrifuges, and
``(VII) equipment that facilitates
the process of dissolved air flotation,
ammonia stripping, gasification, or
ozonation, and
``(ii) any thermal drier which treats the
nutrients recovered by the processes referred
to in subparagraph (A).
``(C) Termination.--No credit shall be determined
under this section with respect to any qualified manure
resource recovery property for any period after
December 31, 2021.''.
(d) Denial of Double Benefit for Qualified Biogas Property.--
Section 45(e) of such Code is amended by adding at the end the
following new paragraph:
``(12) Coordination with energy credit for qualified biogas
property.--The term `qualified facility' shall not include any
facility which produces electricity from gas produced by
qualified biogas property (as defined in section 48(c)(5)) if a
credit is determined under section 48 with respect to such
property for the taxable year or any prior taxable year.''.
(e) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 2018, in taxable years ending after
such date, under rules similar to the rules of section 48(m) of such
Code (as in effect on the day before the date of the enactment of the
Revenue Reconciliation Act of 1990).
SEC. 4. RENEWABLE ENERGY BONDS RELATING TO BIOGAS PROPERTY AND MANURE
RESOURCE RECOVERY PROPERTY.
(a) In General.--Part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following:
``Subpart H--Nonrefundable Credit to Holders of Certain Bonds
``Sec. 54. Credit to holders of qualified renewable energy bonds.
``SEC. 54. CREDIT TO HOLDERS OF QUALIFIED RENEWABLE ENERGY BONDS.
``(a) Allowance of Credit.--If a taxpayer holds a qualified
renewable energy bond on one or more credit allowance dates of the bond
during any taxable year, there shall be allowed as a credit against the
tax imposed by this chapter for the taxable year an amount equal to 70
percent of the sum of the credits determined under subsection (b) with
respect to such dates.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance date
for a qualified renewable energy bond is 25 percent of the
annual credit determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any qualified renewable energy bond is the product
of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Applicable credit rate.--For purposes of paragraph
(2), the applicable credit rate is the rate which the Secretary
estimates will permit the issuance of qualified renewable
energy bonds with a specified maturity or redemption date
without discount and without interest cost to the qualified
issuer. The applicable credit rate with respect to any
qualified renewable energy bond shall be determined as of the
first day on which there is a binding, written contract for the
sale or exchange of the bond.
``(4) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period ending
on a credit allowance date, the amount of the credit determined
under this subsection with respect to such credit allowance
date shall be a ratable portion of the credit otherwise
determined based on the portion of the 3-month period during
which the bond is outstanding. A similar rule shall apply when
the bond is redeemed or matures.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under this
part (other than subpart C and this subpart).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the credit
allowable under subsection (a) for such taxable year
(determined before the application of paragraph (1) for such
succeeding taxable year).
``(d) Qualified Renewable Energy Bonds.--For purposes of this
subpart--
``(1) In general.--The term `qualified renewable energy
bonds' means any bond issued as part of an issue if--
``(A) the bond is issued by a qualified issuer
pursuant to an allocation by the Secretary to such
issuer of a portion of the national renewable energy
bond limitation under paragraph (2),
``(B) 100 percent of the available project proceeds
of such issue are to be used for capital expenditures
incurred by a governmental body, public power provider,
or cooperative electric company for property owned by
the public power provider, a governmental body, or a
cooperative electric company, as the case may be, that
is--
``(i) qualified biogas property (as defined
in section 48(c)(5)), or
``(ii) a qualified manure resource recovery
property (as defined in section 48(c)(6)),
``(C) the qualified issuer designates such bond for
purposes of this section, and
``(D) the issue meets the requirements of this
section.
``(2) Limitation on amount of bonds designated.--
``(A) In general.--The maximum aggregate face
amount of bonds which may be designated under paragraph
(1)(C) by any issuer shall not exceed the limitation
amount allocated under this paragraph to such issuer.
``(B) National limitation on amount of bonds
designated.--There is a national renewable energy bond
limitation of $800,000,000 which shall be allocated by
the Secretary as provided in subparagraph (C), except
that--
``(i) not more than 33\1/3\ percent thereof
may be allocated to projects of public power
providers,
``(ii) not more than 33\1/3\ percent
thereof may be allocated to projects of
governmental bodies, and
``(iii) not more than 33\1/3\ percent
thereof may be allocated to projects of
cooperative electric companies.
``(C) Method of allocation.--
``(i) Allocation among public power
providers.--After the Secretary determines the
projects of public power providers which are
appropriate for receiving an allocation of the
national renewable energy bond limitation, the
Secretary shall, to the maximum extent
practicable, make allocations among such
projects in such manner that the amount
allocated to each such project bears the same
ratio to the cost of such project as the
limitation under subparagraph (B)(i) bears to
the cost of all such projects.
``(ii) Allocation among governmental bodies
and cooperative electric companies.--The
Secretary shall make allocations of the amount
of the national renewable energy bond
limitation described in subparagraphs (B)(ii)
and (B)(iii) among projects of governmental
bodies and cooperative electric companies,
respectively, in such manner as the Secretary
determines appropriate.
``(e) Definitions.--For purposes of this section--
``(1) Qualified issuer.--The term `qualified issuer' means
a public power provider, a cooperative electric company, a
governmental body, a renewable energy bond lender, or a not-
for-profit electric utility which has received a loan or loan
guarantee under the Rural Electrification Act.
``(2) Public power provider.--The term `public power
provider' means a State utility with a service obligation, as
such terms are defined in section 217 of the Federal Power Act
(as in effect on the date of the enactment of this paragraph).
``(3) Governmental body.--The term `governmental body'
means any State or Indian tribal government, or any political
subdivision thereof.
``(4) Cooperative electric company.--The term `cooperative
electric company' means a mutual or cooperative electric
company described in section 501(c)(12) or section
1381(a)(2)(C).
``(5) Renewable energy bond lender.--The term `renewable
energy bond lender' means a lender which is a cooperative which
is owned by, or has outstanding loans to, 100 or more
cooperative electric companies and is in existence on February
1, 2002, and shall include any affiliated entity which is
controlled by such lender.
``(f) Other Definitions.--For purposes of this subchapter--
``(1) Credit allowance date.--The term `credit allowance
date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term includes the last day on which the bond is
outstanding.
``(2) Bond.--The term `bond' includes any obligation.
``(3) State.--The term `State' includes the District of
Columbia and any possession of the United States.
``(4) Available project proceeds.--The term `available
project proceeds' means--
``(A) the excess of--
``(i) the proceeds from the sale of an
issue, over
``(ii) the issuance costs financed by the
issue (to the extent that such costs do not
exceed 2 percent of such proceeds), and
``(B) the proceeds from any investment of the
excess described in subparagraph (A).
``(g) Credit Treated as Interest.--For purposes of this subtitle,
the credit determined under subsection (a) shall be treated as interest
which is includible in gross income.
``(h) S Corporations and Partnerships.--In the case of a renewable
energy bond held by an S corporation or partnership, the allocation of
the credit allowed by this section to the shareholders of such
corporation or partners of such partnership shall be treated as a
distribution.
``(i) Bonds Held by Real Estate Investment Trusts.--If any
qualified renewable energy bond is held by a real estate investment
trust, the credit determined under subsection (a) shall be allowed to
beneficiaries of such trust (and any gross income included under
subsection (f) with respect to such credit shall be distributed to such
beneficiaries) under procedures prescribed by the Secretary.
``(j) Credits May Be Stripped.--Under regulations prescribed by the
Secretary--
``(1) In general.--There may be a separation (including at
issuance) of the ownership of a qualified renewable energy bond
and the entitlement to the credit under this section with
respect to such bond. In case of any such separation, the
credit under this section shall be allowed to the person who on
the credit allowance date holds the instrument evidencing the
entitlement to the credit and not to the holder of the bond.
``(2) Certain rules to apply.--In the case of a separation
described in paragraph (1), the rules of section 1286 shall
apply to the qualified renewable energy bond as if it were a
stripped bond and to the credit under this section as if it
were a stripped coupon.''.
(b) Payments to Issuers.--Subchapter B of chapter 65 of such Code
is amended by adding at the end the following:
``SEC. 6431. CREDIT FOR QUALIFIED RENEWABLE ENERGY BONDS ALLOWED TO
ISSUER.
``(a) In General.--The issuer of a qualified renewable energy bond
(as defined in section 54(d)) shall be allowed a credit with respect to
each interest payment under such bond which shall be payable by the
Secretary as provided in subsection (b).
``(b) Payment of Credit.--The Secretary shall pay
(contemporaneously with each interest payment date under such bond) to
the issuer of such bond (or to any person who makes such interest
payments on behalf of the issuer) 35 percent of the interest payable
under such bond on such date.
``(c) Application of Arbitrage Rules.--For purposes of section 148,
the yield on such bonds shall be reduced by the credit allowed under
this section.
``(d) Interest Payment Date.--For purposes of this subsection, the
term `interest payment date' means each date on which interest is
payable by the issuer under the terms of the bond.''.
(c) Conforming Amendments.--
(1) The table of subparts for part IV of subchapter A of
chapter 1 of such Code is amended by adding at the end the
following new item:
``subpart h. nonrefundable credit to holders of certain bonds.''.
(2) The table of sections for subchapter B of chapter 65 of
such Code is amended by adding at the end the following new
item:
``Sec. 6431. Credit for qualified renewable energy bonds allowed to
issuer.''.
(3) Section 6211(b)(4)(A) of such Code is amended by
striking ``and 36B, 168(k)(4)'' and inserting ``36B, 168(k)(4),
and 6431''.
(4) Section 6401(b)(1) of such Code is amended by striking
``and G'' and inserting ``G, and H''.
(d) Effective Date.--The amendments made by this section shall
apply to bonds issued after the date of the enactment of this Act.
SEC. 5. STUDY OF BIOGAS AND NUTRIENT REUSE.
(a) In General.--The Secretary of the Treasury shall enter into an
agreement with the National Renewable Energy Laboratory to undertake a
study of biogas that addresses the following:
(1) The quality of biogas, including a comparison of biogas
to natural gas and the identification of any components of
biogas which make biogas unsuitable for injection into existing
natural gas pipelines.
(2) Methods for obtaining the highest energy content in
biogas, including the use of co-digestion and identifying the
optimal feed mixture.
(3) Recommendations for the expansion of biogas production,
including an analysis of the extent to which increasing the
methane content of biogas would result in the greater use of
biogas and an analysis of how the expanded use of biogas could
help meet the growing energy needs of the United States.
(4) Methods for productive use of nutrients recovered from
qualified manure resource recovery property that benefits the
agricultural economy.
(b) Report.--Not later than 2 years after the date of the enactment
of this Act, the Secretary shall submit to Congress a report on the
study conducted under subsection (a).
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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