,i #aagth ,,congress #ast ,session ,h4 ,r4 #cici ,,in ,,the ,,house ,,of ,,representatives ,june #af1 #bjba,mr4 ,kind 7for himself and ,mr4 ,reed7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means1 and in addition to the ,committee on ,science1 ,space1 and ,technology1 for a period to be subsequently determined by the ,speaker1 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 #aihf 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 property1 and for other purposes4 #a4 ,short ,title ,this ,act may be cited as the ,agriculture ,environmental ,stewardship ,act of #bjba4 #b4 ,findings ,congress finds the following3 7#a7 ,incentives and encouragement for the conservation and appropriate handling of nutrients contained in organic matter are necessary4 7#b7 ,biogas systems will save ,federal1 ,state1 and local taxpayers money by converting waste into useful products1 such as fuel1 fertilizer1 thermal heat1 feedstock for hydrogen fuel cells1 and renewable chemicals4 7#c7 ,manure resource recovery systems will save ,federal1 ,state1 and local taxpayers money by recovering the nutrients contained in organic matter from their source1 rather than recovering the nutrients after they have entered landfills or waterways4 #c4 ,energy ,credit for ,qualified ,biogas ,property and ,qualified ,manure ,resource ,recovery ,property 7a7 ,in ,general ,section #dh7;a77#c77;,a7 of the ,internal ,revenue ,code of #aihf is amended by striking or at the end of clause 7vii7 and by adding at the end the following new clauses3 7ix7 qualified biogas property1 or 7x7 qualified manure resource recovery property1 4 7b7 #cj-,percent ,credit ,section #dh7;a77#b77;,a77i7 of such ,code is amended by striking and at the end of subclause 7,,iv71 by striking and at the end of subclause 7,v71 and by adding at the end the following new subclauses3 7,,vi7 qualified biogas property1 and 7,,vii7 qualified manure resource recovery property1 and 4 7c7 ,definitions ,section #dh7;c7 of such ,code is amended by adding at the end the following new paragraphs3 7#f7 ,qualified biogas property 7,a7 ,in general ,the term qualified biogas property means property comprising a system which-- 7i7 uses anaerobic digesters1 or other biological1 chemical1 thermal1 or mechanical processes 7alone or in combination71 to convert biomass 7as defined in section #de,k7c77#c77 into a gas which consists of not less than #eb percent methane1 and 7ii7 captures such gas for use as a fuel4 7,b7 ,inclusion of certain cleaning and conditioning equipment ,such term shall include any property which cleans and conditions the gas referred to in subparagraph 7,a7 for use as a fuel4 7,c7 ,termination ,no credit shall be determined under this section with respect to any qualified biogas property for any period after ,december #ca1 #bjbc4 7#g7 ,qualified manure resource recovery property 7,a7 ,in general ,the term qualified manure resource recovery property means property comprising a system which uses physical1 biological1 chemical1 thermal1 or mechanical processes to recover the nutrients nitrogen and phosphorus from a non-treated digestate or animal manure by reducing or separating at least #ej percent of the concentration of such nutrients1 excluding any reductions during the incineration1 storage1 composting1 or field application of the non-treated digestate or animal manure4 7,b7 ,inclusion of certain processing equipment ,such term shall include-- 7i7 any property which is used to recover the nutrients referred to in subparagraph 7,a71 such as-- 7,i7 biological reactors1 7,,ii7 crystallizers1 7,,iii7 water filtration membrane systems and other water purifiers1 7,,iv7 evaporators1 7,v7 distillers1 7,,vi7 decanter centrifuges1 and 7,,vii7 equipment that facilitates the process of removing and dewatering suspended and dissolved solids1 ammonia stripping1 gasification1 or ozonation1 and 7ii7 any thermal drier which treats the nutrients recovered by the processes referred to in subparagraph 7,a74 7,c7 ,termination ,no credit shall be determined under this section with respect to any qualified manure resource recovery property for any period after ,december #ca1 #bjbc4 4 7d7 ,denial of ,double ,benefit for ,qualified ,biogas ,property ,section #de7;e7 of such ,code is amended by adding at the end the following new paragraph3 7#ab7 ,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 7as defined in section #dh7;c77#f77 if a credit is determined under section #dh with respect to such property for the taxable year or any prior taxable year4 4 7e7 ,effective ,date ,the amendments made by this section shall apply to periods after ,december #ca1 #bjbj1 in taxable years ending after such date1 under rules similar to the rules of section #dh7m7 of such ,code 7as in effect on the day before the date of the enactment of the ,revenue ,reconciliation ,act of #aiij74 #d4 ,renewable energy bonds relating to biogas property and manure resource recovery property 7a7 ,in ,general ,part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 ,h ,nonrefundable credit to holders of certain bonds ,sec4 #ed4 ,credit to holders of qualified renewable energy bonds4 #ed4 ,credit to holders of qualified renewable energy bonds 7a7 ,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 year1 there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to #gj percent of the sum of the credits determined under subsection 7b7 with respect to such dates4 7b7 ,amount of ,credit 7#a7 ,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 #be percent of the annual credit determined with respect to such bond4 7#b7 ,annual credit ,the annual credit determined with respect to any qualified renewable energy bond is the product of-- 7,a7 the applicable credit rate1 multiplied by 7,b7 the outstanding face amount of the bond4 7#c7 ,applicable credit rate ,for purposes of paragraph 7#b71 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 issuer4 ,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 binding1 written contract for the sale or exchange of the bond4 7#d7 ,special rule for issuance and redemption ,in the case of a bond which is issued during the #c-month period ending on a credit allowance date1 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 #c-month period during which the bond is outstanding4 ,a similar rule shall apply when the bond is redeemed or matures4 7c7 ,limitation based on amount of tax 7#a7 ,in general ,the credit allowed under subsection 7a7 for any taxable year shall not exceed the excess of-- 7,a7 the sum of the regular tax liability 7as defined in section #bf7;b77 plus the tax imposed by section #ee1 over 7,b7 the sum of the credits allowable under this part 7other than subpart ,c and this subpart74 7#b7 ,carryover of unused credit ,if the credit allowable under subsection 7a7 exceeds the limitation imposed by paragraph 7#a7 for such taxable year1 such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection 7a7 for such taxable year 7determined before the application of paragraph 7#a7 for such succeeding taxable year74 7d7 ,qualified renewable energy bonds ,for purposes of this subpart-- 7#a7 ,in general ,the term qualified renewable energy bonds means any bond issued as part of an issue if-- 7,a7 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 7#b71 7,b7 #ajj percent of the available project proceeds of such issue are to be used for capital expenditures incurred by a governmental body1 public power provider1 or cooperative electric company for property owned by the public power provider1 a governmental body1 or a cooperative electric company1 as the case may be1 that is-- 7i7 qualified biogas property 7as defined in section #dh7;c77#f771 or 7ii7 a qualified manure resource recovery property 7as defined in section #dh7;c77#g771 7,c7 the qualified issuer designates such bond for purposes of this section1 and 7,d7 the issue meets the requirements of this section4 7#b7 ,limitation on amount of bonds designated 7,a7 ,in general ,the maximum aggregate face amount of bonds which may be designated under paragraph 7#a77;,c7 by any issuer shall not exceed the limitation amount allocated under this paragraph to such issuer4 7,b7 ,national limitation on amount of bonds designated ,there is a national renewable energy bond limitation of #hjj1jjj1jjj which shall be allocated by the ,secretary as provided in subparagraph 7,c71 except that-- 7i7 not more than #cca_/c percent thereof may be allocated to projects of public power providers1 7ii7 not more than #cca_/c percent thereof may be allocated to projects of governmental bodies1 and 7iii7 not more than #cca_/c percent thereof may be allocated to projects of cooperative electric companies4 7,c7 ,method of allocation 7i7 ,allocation among public power providers4 ,after the ,secretary determines the projects of public power providers which are appropriate for receiving an allocation of the national renewable energy bond limitation1 the ,secretary shall1 to the maximum extent practicable1 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 7,b77i7 bears to the cost of all such projects4 7ii7 ,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 7,b77ii7 and 7,b77iii7 among projects of governmental bodies and cooperative electric companies1 respectively1 in such manner as the ,secretary determines appropriate4 7e7 ,definitions ,for purposes of this section-- 7#a7 ,qualified issuer ,the term qualified issuer means a public power provider1 a cooperative electric company1 a governmental body1 a renewable energy bond lender1 or a not-for-profit electric utility which has received a loan or loan guarantee under the ,rural ,electrification ,act4 7#b7 ,public power provider ,the term public power provider means a ,state utility with a service obligation1 as such terms are defined in section #bag of the ,federal ,power ,act 7as in effect on the date of the enactment of this paragraph74 7#c7 ,governmental body ,the term governmental body means any ,state or ,indian tribal government1 or any political subdivision thereof4 7#d7 ,cooperative electric company ,the term cooperative electric company means a mutual or cooperative electric company described in section #eja7;c77#ab7 or section #acha7;a77#b77;,c74 7#e7 ,renewable energy bond lender ,the term renewable energy bond lender means a lender which is a cooperative which is owned by1 or has outstanding loans to1 #ajj or more cooperative electric companies and is in existence on ,february #a1 #bjjb1 and shall include any affiliated entity which is controlled by such lender4 7f7 ,other ,definitions ,for purposes of this subchapter-- 7#a7 ,credit allowance date ,the term credit allowance date means-- 7,a7 ,march #ae1 7,b7 ,june #ae1 7,c7 ,september #ae1 and 7,d7 ,december #ae4 ,such term includes the last day on which the bond is outstanding4 7#b7 ,bond ,the term bond includes any obligation4 7#c7 ,state ,the term ,state includes the ,district of ,columbia and any possession of the ,united ,states4 7#d7 ,available project proceeds ,the term available project proceeds means-- 7,a7 the excess of-- 7i7 the proceeds from the sale of an issue1 over 7ii7 the issuance costs financed by the issue 7to the extent that such costs do not exceed #b percent of such proceeds71 and 7,b7 the proceeds from any investment of the excess described in subparagraph 7,a74 7g7 ,credit ,treated as ,interest ,for purposes of this subtitle1 the credit determined under subsection 7a7 shall be treated as interest which is includible in gross income4 7h7 ,s ,corporations and ,partnerships ,in the case of a renewable energy bond held by an ,s corporation or partnership1 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 distribution4 7i7 ,bonds ,held by ,real ,estate ,investment ,trusts ,if any qualified renewable energy bond is held by a real estate investment trust1 the credit determined under subsection 7a7 shall be allowed to beneficiaries of such trust 7and any gross income included under subsection 7f7 with respect to such credit shall be distributed to such beneficiaries7 under procedures prescribed by the ,secretary4 7j7 ,credits ,may be ,stripped ,under regulations prescribed by the ,secretary-- 7#a7 ,in general ,there may be a separation 7including at issuance7 of the ownership of a qualified renewable energy bond and the entitlement to the credit under this section with respect to such bond4 ,in case of any such separation1 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 bond4 7#b7 ,certain rules to apply ,in the case of a separation described in paragraph 7#a71 the rules of section #abhf 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 coupon4 4 7b7 ,payments to issuers ,subchapter ,b of chapter #fe of such ,code is amended by adding at the end the following3 #fdca4 ,credit for qualified renewable energy bonds allowed to issuer 7a7 ,in general ,the issuer of a qualified renewable energy bond 7as defined in section #ed7;d77 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 7b74 7b7 ,payment of credit ,the ,secretary shall pay 7contemporaneously with each interest payment date under such bond7 to the issuer of such bond 7or to any person who makes such interest payments on behalf of the issuer7 #ce percent of the interest payable under such bond on such date4 7c7 ,application of arbitrage rules ,for purposes of section #adh1 the yield on such bonds shall be reduced by the credit allowed under this section4 7d7 ,interest payment date ,for purposes of this subsection1 the term interest payment date means each date on which interest is payable by the issuer under the terms of the bond4 4 7c7 ,conforming amendments 7#a7 ,the table of subparts for part ,,iv of subchapter ,a of chapter #a of such ,code is amended by adding at the end the following new item3 ,subpart ,h4 ,nonrefundable credit to holders of certain bonds 4 7#b7 ,the table of sections for subchapter ,b of chapter #fe of such ,code is amended by adding at the end the following new item3 ,sec4 #fdca4 ,credit for qualified renewable energy bonds allowed to issuer4 4 7#c7 ,section #fbaa7;b77#d77;,a7 of such ,code is amended by inserting #fdca1 after #fdbh;,b14 7#d7 ,section #fdja7;b77#a7 of such ,code is amended by striking #8#8and ,g'' and inserting #8#8,g1 and ,h''4 7d7 ,effective ,date ,the amendments made by this section shall apply to bonds issued after the date of the enactment of this ,act4 #e4 ,study of ,biogas and ,nutrient ,reuse 7a7 ,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 following3 7#a7 ,the quality of biogas1 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 pipelines4 7#b7 ,methods for obtaining the highest energy content in biogas1 including the use of co-digestion and identifying the optimal feed mixture4 7#c7 ,recommendations for the expansion of biogas production1 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 ,states4 7#d7 ,methods for productive use of nutrients recovered from qualified manure resource recovery property that benefits the agricultural economy4 7b7 ,report ,not later than #b years after the date of the enactment of this ,act1 the ,secretary shall submit to ,congress a report on the study conducted under subsection 7a74