,,ii #aahth ,,congress #b;d ,session ,s4 #eceb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,november #bj1 #bjbd,mr4 ,welch 7for himself and ,mr4 ,van ,hollen7 introduced the following bill2 which was read twice and referred to the ,committee on ,energy and ,natural ,resources ,a ,,bill ,to amend title ,,vi of the ,public ,utility ,regulatory ,policies ,act of #aigh to establish a ,federal renewable electricity standard for retail electricity suppliers1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,american ,renewable ,energy ,act of #bjbd4 #b4 ,findings ,congress finds that-- 7#a7 the ,federal renewable electricity standard established by section #faj of the ,public ,utility ,regulatory ,policies ,act of #aigh 7as added by this ,act7 establishes a market-based policy to create ongoing competition among renewable electricity generators across the ,united ,states and provide the greatest quantity of clean electricity for the lowest price2 and 7#b7 the ,united ,states has vast wind1 solar1 hydropower1 and geothermal resources that-- 7,a7 are renewable2 7,b7 are dispersed widely across different regions of the ,united ,states2 7,c7 can be harnessed to generate a significant share of electricity in the ,united ,states2 and 7,d7 when deployed1 will significantly reduce and eliminate the emission of harmful greenhouse gases and criteria pollutants1 which have historically been concentrated in underserved communities and communities of color1 contributing to disproportionate burdens and environmental injustices4 #c4 ,federal renewable electricity standard 7a7 ,in general ,title ,,vi of the ,public ,utility ,regulatory ,policies ,act of #aigh 7,public ,law #ie-fag2 #ib ,stat4 #cafd7 is amended by adding at the end the following3 #faj4 ,federal renewable electricity standard 7a7 ,definitions ,in this section3 7#a7 ,base quantity of electricity ,the term base quantity of electricity means the total quantity of electricity1 expressed in megawatt hours1 sold by a retail electricity supplier to electric consumers during the relevant calendar year1 excluding electricity generated by a hydroelectric facility 7other than qualified hydropower74 7#b7 ,criteria air pollutant ,the term criteria air pollutant means an air pollutant for which a national ambient air quality standard has been promulgated under section #aji of the ,clean ,air ,act 7#db ,u4,s4,c4 #gdji74 7#c7 ,distributed generation ,the term distributed generation means a noncentralized renewable energy resource installation1 or interconnected series of installations1 that generates electricity near the point of use with a total generating capacity of #a megawatt or less4 7#d7 ,environmental justice community 7,a7 ,in general ,the term environmental justice community means a low-income or low-wealth community that is impacted by environmental injustice4 7,b7 ,inclusions ,the term environmental justice community includes any community that-- 7i7 is located nearest to an existing area of significant environmental pollution and degradation2 7ii7 bears a burden of negative public health effects from pollution2 7iii7 includes #a or more sites of-- 7,i7 a facility that is a part of a polluting industry2 7,,ii7 a waste dump2 or 7,,iii7 a facility for fossil resource extraction2 7iv7 experiences a high incidence of climate change impacts and disasters2 7v7 has been excluded or harmed by racist or discriminatory policies that have resulted in disproportionate burdens of environmental pollution and related health and socioeconomic disparities2 7vi7 has a land-based or food subsistence culture that is experiencing ecosystem disruption and devastation2 7vii7 faces relocation and resettlement resulting from-- 7,i7 climate change2 or 7,,ii7 impacts to the environment and ecosystems2 or 7viii7 is an ,indigenous community4 7#e7 ,federal renewable electricity credit ,the term ,federal renewable electricity credit means a credit that-- 7,a7 represents1 for purposes of compliance with this section1 #a megawatt hour of renewable electricity2 and 7,b7 is issued pursuant to subsection 7e74 7#f7 ,impacted community 7,a7 ,in general ,the term impacted community means a community that is harmed by environmental1 economic1 or socioeconomic injustice4 7,b7 ,inclusions ,the term impacted community includes-- 7i7 an environmental justice community2 and 7ii7 a community that-- 7,i7 has a high concentration of low-income and low-wealth households1 including households composed primarily of members of groups that have historically experienced discrimination on the basis of race1 gender1 national origin1 or ethnicity 7including ,black1 ,indigenous1 ,latinx1 ,arab1 ,asian1 and ,pacific ,islander communities72 7,,ii7 has experienced or is experiencing economic transition1 deindustrialization1 historic underinvestment1 and poverty2 or 7,,iii7 has high unemployment due to-- 7aa7 a significant decline in coal mining activity2 or 7bb7 the closure of a coal-fired power plant4 7#g7 ,indian ,tribe ,the term ,indian ,tribe means any ,indian ,tribe1 band1 nation1 or other organized group or community 7including any ,native village1 ,regional ,corporation1 or ,village ,corporation 7as those terms are defined in section #c of the ,alaska ,native ,claims ,settlement ,act 7#dc ,u4,s4,c4 #afjb777 that is recognized as eligible for the special programs and services provided by the ,united ,states to ,indians because of their status as ,indians4 7#h7 ,qualified hydropower ,the term qualified hydropower means energy produced from generating capacity added to a dam on or after ,january #a1 #bjja1 if the ,commission certifies that-- 7,a7 the dam-- 7i7 was placed in service before the date of enactment of this section2 7ii7 was operated for flood control1 navigation1 or water supply purposes2 and 7iii7 was not producing hydroelectric power prior to the addition of the capacity2 and 7,b7 the hydroelectric project installed on the dam-- 7i7 is licensed or is exempt from licensing by the ,commission2 7ii7 is in compliance with-- 7,i7 the terms and conditions of the license or exemption2 and 7,,ii7 other applicable legal requirements for the protection of environmental quality1 including applicable fish passage requirements2 and 7iii7 is operated so that the water surface elevation at any given location and time that would have occurred in the absence of the hydroelectric project is maintained1 subject to any license or exemption requirements that require changes in water surface elevation for the purpose of improving the environmental quality of the affected waterway4 7#i7 ,renewable electricity ,the term renewable electricity means electricity generated 7including by means of a fuel cell7 from a renewable energy resource4 7#aj7 ,renewable energy resource ,the term renewable energy resource means each of the following3 7,a7 ,wind energy4 7,b7 ,solar energy4 7,c7 ,geothermal energy4 7,d7 ,biogas derived from-- 7i7 anaerobic digestion at wastewater treatment facilities2 or 7ii7 farm anaerobic digestion4 7,e7 ,qualified hydropower4 7,f7 ,marine energy 7as defined in section #fcb of the ,energy ,independence and ,security ,act of #bjjg 7#db ,u4,s4,c4 #agbaa774 7#aa7 ,retail electricity supplier 7,a7 ,in general ,the term retail electricity supplier means1 for any calendar year1 an electric utility that sells not fewer than #a1jjj1jjj megawatt hours of electricity to electric consumers during the preceding calendar year4 7,b7 ,inclusions and limitations ,for purposes of determining whether an electric utility qualifies as a retail electricity supplier under subparagraph 7,a7-- 7i7 the sales made by any affiliate of the electric utility to electric consumers1 other than sales to lessees or tenants of the affiliate1 shall be considered to be sales made by the electric utility2 and 7ii7 sales made by the electric utility to an affiliate1 lessee1 or tenant of the electric utility shall not be treated as sales to electric consumers4 7,c7 ,affiliate ,in this paragraph1 the term affiliate1 when used in relation to an electric utility1 means any person that directly or indirectly owns or controls1 is owned or controlled by1 or is under common ownership or control with1 that electric utility1 as determined under regulations promulgated by the ,commission4 7#ab7 ,retire and retirement ,the terms retire and retirement1 with respect to a ,federal renewable electricity credit1 mean to disqualify the credit for any subsequent use under this section1 regardless of whether the use is a sale1 transfer1 exchange1 or submission in satisfaction of a compliance obligation4 7b7 ,annual compliance obligation 7#a7 ,in general ,except as otherwise provided in subsection 7f71 for each of calendar years #bjbe through #bjcd1 not later than ,march #ca of the following calendar year1 each retail electricity supplier shall submit to the ,commission a quantity of ,federal renewable electricity credits that represents a quantity of megawatt hours of renewable electricity that is at least equal to the annual target of the retail electricity supplier under subsection 7d74 7#b7 ,equity requirements 7,a7 ,distributed generation ,the ,commission shall require that1 of the quantity of ,federal renewable electricity credits required to be submitted by a retail electricity supplier to comply with paragraph 7#a7-- 7i7 for the period of calendar years #bjbe through #bjbh1 at least #ae percent of those ,federal renewable electricity credits represent megawatt hours of renewable electricity generated by distributed generation2 and 7ii7 for the period of calendar years #bjbi through #bjcd1 at least #bj percent of those ,federal renewable electricity credits represent megawatt hours of renewable electricity generated by distributed generation4 7,b7 ,impacted communities ,the ,commission shall require that1 of the quantity of ,federal renewable electricity credits required to be submitted by a retail electricity supplier to comply with paragraph 7#a7-- 7i7 for the period of calendar years #bjbe through #bjbh1 at least #ae percent of those ,federal renewable electricity credits represent megawatt hours of renewable electricity generated in impacted communities2 and 7ii7 for the period of calendar years #bjbi through #bjcd1 at least #bj percent of those ,federal renewable electricity credits represent megawatt hours of renewable electricity generated in impacted communities4 7,c7 ,distributed generation occurring in an impacted community ,for any calendar year1 distributed generation that occurs in an impacted community may be used for purposes of complying with both subparagraph 7,a7 and subparagraph 7,b74 7c7 ,regulations 7#a7 ,in general ,not later than ,january #a1 #bjbf1 the ,commission shall promulgate regulations to implement and enforce the requirements of this section4 7#b7 ,considerations ,in promulgating regulations under paragraph 7#a71 the ,commission shall1 to the maximum extent practicable-- 7,a7 preserve the integrity and incorporate best practices of existing ,state and ,tribal renewable electricity programs2 7,b7 preserve the integrity of voluntary renewable energy markets2 7,c7 design and implement those regulations in a manner that seeks to be equitable and just2 7,d7 identify and prioritize measures to maximize reductions of emissions of greenhouse gases and criteria air pollutants in impacted communities2 7,e7 ensure that activities undertaken to comply with those regulations result in a net decrease in emissions of criteria air pollutants in impacted communities2 7,f7 ensure that the deployment of any new renewable electricity generation provides economic1 health1 and resiliency benefits to the communities and areas in which the applicable generation facility or resource is built or installed1 including through the use of community benefit agreements or equivalent means as determined appropriate by the ,commission2 7,g7 prioritize measures that will incentivize or allow for distributed1 community1 and public ownership over renewable energy projects2 7,h7 establish and delegate to an appropriate entity the administration of a national ,federal renewable electricity credit trading market for the issuance and trade of ,federal renewable electricity credits1 relying on existing and emerging ,state1 ,tribal1 or regional tracking systems that issue and track non-,federal renewable electricity credits2 7,i7 establish and delegate to appropriate entities the administration of not fewer than #f regional1 geographically-based1 ,federal renewable electricity credit trading markets1 and determine the optimal levels of credit trading allowed within and between regions to maximize deployment of new renewable electricity generation within each region2 7,j7 cooperate with ,states and ,indian ,tribes-- 7i7 to facilitate coordination between ,state1 ,tribal1 and ,federal renewable electricity programs2 and 7ii7 to minimize administrative burdens and costs to retail electricity suppliers2 and 7,k7 encourage strategic deployment of distributed generation to maximize system benefits that can lower costs for all customers1 including siting generation resources in grid-constrained areas and colocation of renewable energy resources with energy storage4 7d7 ,annual compliance requirement 7#a7 ,annual targets ,for each calendar year1 the annual target of a retail electricity supplier shall be equal to the number of megawatt hours that is equal to the product obtained by multiplying-- 7,a7 the required annual percentage for that calendar year under paragraph 7#b7 or 7#c71 as applicable2 and 7,b7 the base quantity of electricity of that retail electricity supplier for that calendar year4 7#b7 ,required annual percentage for calendar years #bjbe through #bjcd ,for each of calendar years #bjbe through #bjcd1 the required annual percentage shall be as follows3 ,required annual,year3percentage3#bjbebj4jbjbfbd4e bjbgbi4jbjbhcd4jbjbici4jbjcjde4jbjcaea4j bjcbeg4jbjccfc4ebjcdgj4j4 7#c7 ,required annual percentage for subsequent calendar years 7,a7 ,calendar years #bjce through #bjdd ,not later than ,december #ca1 #bjcd1 the ,commission shall promulgate regulations establishing required annual percentages for each of calendar years #bjce through #bjdd4 7,b7 ,increase ,except at provided in subparagraph 7,c71 for each of calendar years #bjce through #bjdd1 the required annual percentage shall be equal to the sum obtained by adding-- 7i7 the required annual percentage for the previous calendar year2 and 7ii7 #c percentage points4 7,c7 ,feasibility 7i7 ,adjustment ,subject to clause 7ii71 for any of calendar years #bjce through #bjdd1 the ,commission may increase or decrease the #c percentage point increase required under subparagraph 7,b7 if the ,commission determines necessary based on technical and economic feasibility studies or other equivalent means4 7ii7 ,requirement ,for each of calendar years #bjce through #bjdd1 the percentage point increase required under this paragraph for the required annual percentage shall be greater than zero4 7,d7 ,minimum percentage ,in no case shall the required annual percentage for any calendar year after calendar year #bjce be less than the required annual percentage for calendar year #bjce4 7e7 ,federal renewable electricity credits 7#a7 ,in general 7,a7 ,issuance2 tracking2 verification ,the regulations promulgated under this section shall include provisions governing the issuance1 tracking1 and verification of ,federal renewable electricity credits4 7,b7 ,credit ratio ,except as provided in paragraphs 7#b7 through 7#e71 the ,commission shall issue to each generator of renewable electricity #a ,federal renewable electricity credit for each megawatt hour of renewable electricity generated by the generator after ,december #ca1 #bjbd4 7,c7 ,serial number ,the ,commission shall assign a unique serial number to each ,federal renewable electricity credit4 7#b7 ,generation from certain ,state renewable electricity programs 7,a7 ,in general ,if renewable electricity is generated with the support of payments from a retail electricity supplier pursuant to a ,state renewable electricity program 7whether through ,state alternative compliance payments or through payments to a ,state renewable electricity procurement fund or entity7-- 7i7 the ,commission shall issue ,federal renewable electricity credits to the retail electricity supplier for the portion of the relevant renewable electricity generation that is attributable to the payments made by the retail electricity supplier1 as determined pursuant to regulations promulgated by the ,commission2 and 7ii7 for any remaining portion of the relevant renewable electricity generation1 the ,commission shall issue ,federal renewable electricity credits to the generator1 as provided in paragraph 7#a71 subject to the condition that not more than #a ,federal renewable electricity credit shall be issued for any #a megawatt hour of electricity4 7,b7 ,state guidance ,in determining how ,federal renewable electricity credits will be apportioned among retail electricity suppliers and generators under this paragraph1 the ,commission shall consider information and guidance issued by the applicable #a or more ,states4 7#c7 ,certain power sales contracts ,except as otherwise provided in paragraph 7#b71 if a generator has sold renewable electricity to a retail electricity supplier under a contract for power from a facility placed in service before the date of enactment of this section1 and the contract does not provide for the determination of ownership of the ,federal renewable electricity credits associated with the generation1 the ,commission shall issue the ,federal renewable electricity credits to the retail electricity supplier for the duration of the contract4 7#d7 ,credits based on qualified hydropower ,for purposes of this subsection1 the number of megawatt hours of renewable electricity generation from qualified hydropower shall be calculated-- 7,a7 based solely on the increase in average annual generation directly resulting from the capacity additions described in subsection 7a77#h72 and 7,b7 using the same water flow information used to determine a historic average annual generation baseline for the applicable hydroelectric facility1 as certified by the ,commission4 7#e7 ,credits based on farm anaerobic digestion ,for any calendar year1 a generator may only receive ,federal renewable electricity credits for renewable electricity generated from biogas that is derived from farm anaerobic digestion if-- 7,a7 any manure used for that anaerobic digestion is from a farm that only provides its manure for anaerobic digestion to #a anaerobic digester system2 7,b7 the anaerobic digester system used by that generator has a capacity of less than1 or equal to1 #a megawatt2 and 7,c7 during that calendar year1 the total renewable electricity produced from biogas derived from farm anaerobic digestion in the applicable ,state represents not more than #aj percent of the total electricity usage in the ,state4 7#f7 ,generation from mixed renewable and nonrenewable resources ,if electricity is generated using both a renewable energy resource and an energy resource that is not a renewable energy resource1 the ,commission shall issue ,federal renewable electricity credits based on the proportion that-- 7,a7 the electricity generated that is attributable to the renewable energy resource2 bears to 7,b7 the total electricity generated4 7#g7 ,prohibition against double-counting ,the ,commission shall ensure that-- 7,a7 no ,federal renewable electricity credit is used more than once for compliance with this section2 and 7,b7 not more than #a ,federal renewable electricity credit is issued for any megawatt hour of renewable electricity generated4 7#h7 ,trading ,the lawful holder of a ,federal renewable electricity credit may-- 7,a7 sell1 exchange1 or transfer the credit2 7,b7 submit the credit for compliance under subsection 7b72 or 7,c7 submit the credit for retirement by the ,commission4 7#i7 ,banking 7,a7 ,in general ,a ,federal renewable electricity credit may be submitted in satisfaction of the compliance obligation under subsection 7b7 for-- 7i7 the compliance year for which the credit was issued2 or 7ii7 the first or second compliance year thereafter4 7,b7 ,retirement ,the ,commission shall retire any ,federal renewable electricity credit that has not been retired by ,april #b of the calendar year that is #b years after the calendar year during which the credit was issued4 7#aj7 ,retirement ,the ,commission shall retire a ,federal renewable electricity credit immediately upon submission by the lawful holder of the credit1 whether in satisfaction of a compliance obligation under subsection 7b7 or for another reason4 7f7 ,alternative compliance payments 7#a7 ,in general ,a retail electricity supplier may satisfy the requirements of subsection 7b7 in whole or in part by submitting1 in accordance with this subsection1 in lieu of a ,federal renewable electricity credit that would otherwise be submitted1 an alternative compliance payment equal to #ej1 adjusted for inflation on ,january #a of each year after calendar year #bjbd1 in accordance with regulations promulgated by the ,commission4 7#b7 ,payment to ,state funds 7,a7 ,in general ,except as provided in subparagraph 7,b71 payments made under this subsection shall be made directly to the #a or more ,states in which the applicable retail electricity supplier sells electricity1 subject to the conditions that-- 7i7 the amount of each payment shall be based on the proportion that-- 7,i7 the portion of the base quantity of electricity of the retail electricity supplier that is sold within the applicable ,state2 bears to 7,,ii7 the base quantity of electricity of the retail electricity supplier2 7ii7 the payments are deposited directly into a fund of the ,state treasury established for that purpose2 and 7iii7 the ,state uses the funds in accordance with paragraphs 7#c7 and 7#d74 7,b7 ,noncompliance ,if the ,commission determines that a ,state is in substantial noncompliance with paragraph 7#c7 or 7#d71 the ,commission shall direct that any future alternative compliance payments that would otherwise be paid to the ,state under this subsection shall instead be paid to the ,commission and deposited in the ,treasury4 7#c7 ,state use of funds ,as a condition of receipt of alternative compliance payments pursuant to this subsection1 a ,state shall-- 7,a7 use the payments exclusively for-- 7i7 deploying technologies that generate electricity from renewable energy resources2 7ii7 deploying technologies that store electricity for use at a later time2 or 7iii7 implementing cost-effective energy efficiency programs to achieve energy savings2 and 7,b7 invest or use the payments in a manner designed to ensure that impacted communities receive1 or directly benefit from1 at least #ej percent of the funds4 7#d7 ,reporting 7,a7 ,in general ,as a condition of receipt of alternative compliance payments pursuant to this subsection1 a ,state shall submit to the ,commission an annual report1 in accordance with regulations promulgated by the ,commission1 containing a full accounting of the use of the payments1 including a detailed description of the activities funded by the payments1 and demonstrating compliance with the requirements of this subsection4 7,b7 ,deadline ,a ,state shall submit a report under subparagraph 7,a7-- 7i7 not later than #a year after the date on which the first alternative compliance payment is received2 and 7ii7 every year thereafter until all alternative compliance payments are expended4 7g7 ,information collection ,the ,commission may require any retail electricity supplier1 renewable electricity generator1 or other entity that the ,commission determines appropriate1 to provide any information the ,commission determines appropriate to carry out this section4 7h7 ,enforcement and judicial review 7#a7 ,failure to submit credits 7,a7 ,in general ,if any person fails to comply with the requirements of subsection 7b7 or 7f7 for a calendar year1 the person shall be liable to pay to the ,commission a civil penalty equal to the product obtained by multiplying-- 7i7 double the alternative compliance payment calculated under subsection 7f77#a7 for that calendar year2 and 7ii7 the aggregate quantity of ,federal renewable electricity credits or equivalent alternative compliance payments that the person failed to submit in violation of the requirements of subsections 7b7 and 7f7 for that calendar year4 7,b7 ,enforcement ,the ,commission shall assess a civil penalty under subparagraph 7,a7 in accordance with the procedures described in section #ca7;d7 of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbc;b7d774 7#b7 ,violation of other requirements 7,a7 ,in general ,any person who violates or fails or refuses to comply with any requirement of this section 7including any regulation promulgated or order issued under this section71 other than a requirement of subsection 7b7 or 7f71 shall be subject to a civil penalty under section #caf;,a7b7 of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbeo-#a7;b774 7,b7 ,assessment ,the penalty under subparagraph 7,a7 shall be assessed by the ,commission in the same manner as in the case of a violation referred to in section #caf;,a7b7 of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbeo-#a7;b774 7#c7 ,judicial review 7,a7 ,in general ,any person aggrieved by a final action taken by the ,commission under this section1 other than the assessment of a civil penalty under paragraph 7#a7 or 7#b71 may use the procedures for review described in section #cac of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbel74 7,b7 ,reference ,for purposes of this paragraph1 references to an order in section #cac of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbel7 shall be considered to refer also to all other final actions of the ,commission under this section other than the assessment of a civil penalty under paragraph 7#a7 or 7#b74 7i7 ,administration ,nothing in this section-- 7#a7 diminishes or qualifies any authority of a ,state1 a political subdivision of a ,state1 or an ,indian ,tribe-- 7,a7 to adopt or enforce any law 7including regulations7 respecting renewable electricity1 including any law establishing requirements that are more stringent than those established by this section1 subject to the condition that no such law may relieve any person of any requirement otherwise applicable under this section2 or 7,b7 to regulate the acquisition and disposition of ,federal renewable electricity credits by retail electricity suppliers within the jurisdiction of the ,state1 political subdivision1 or ,indian ,tribe1 including the authority to require a retail electricity supplier to acquire and submit to the ,commission for retirement ,federal renewable electricity credits in excess of those submitted under this section2 or 7#b7 affects the application of1 or the responsibility for1 compliance with any other provision of law 7including regulations74 4 7b7 ,conforming amendment ,the table of contents in section #a7;b7 of the ,public ,utility ,regulatory ,policies ,act of #aigh 7,public ,law #ie-fag2 #ib ,stat4 #caah7 is amended by adding at the end of the items relating to title ,,vi the following3 ,sec4 #fji4 ,rural and remote communities electrification grants4 ,sec4 #faj4 ,federal renewable electricity standard4 4 #d4 ,clarifying ,state authority to adopt renewable energy incentives ,section #baj of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #hbd;a-#c7 is amended by adding at the end the following3 7o7 ,clarification of ,state authority ,to adopt renewable energy incentives 7#a7 ,definition of ,state-approved production incentive program ,in this subsection1 the term ,state-approved production incentive program means a requirement imposed pursuant to ,state law1 or by a ,state regulatory authority acting within its authority under ,state law1 that an electric utility purchase renewable energy 7as defined in section #fji7;a77 at a specified rate4 7#b7 ,state authority to adopt renewable energy incentives ,notwithstanding any other provision of this ,act or the ,federal ,power ,act 7#af ,u4,s4,c4 #gia;a et seq471 a ,state law or ,state regulatory authority may set the rates for a sale of electricity by a facility generating renewable energy 7as defined in section #fji7;a77 pursuant to a ,state-approved production incentive program under which the facility voluntarily participates in the ,state-approved production incentive program4 4