I 

111TH CONGRESS 

1ST SESSION H. R. 1158 

To promote biogas production, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 24, 2009 

Mr. HIGGINS (for himself, Mr. NUNES, Mr. KAGEN, Ms. KAPTUR, Mr. 

ROSKAM, Mr. KIND, Mr. GENE GREEN of Texas, Mr. TERRY, Mr. 

BOCCIERI, Mr. MCGOVERN, and Mr. DAVIS of Alabama) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL 

To promote biogas production, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Biogas Production In5 centive Act of 2009’’. 

6 SEC. 2. CREDIT FOR PRODUCTION OF BIOGAS FROM CER7 TAIN RENEWABLE FEEDSTOCK. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 

10 1986 is amended by inserting after section 45Q the fol11 lowing new section: 


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1 ‘‘SEC. 45R. BIOGAS PRODUCED FROM CERTAIN RENEWABLE 

2 FEEDSTOCK. 

3 ‘‘(a) AMOUNT OF CREDIT.—For purposes of section 

4 38, the qualified biogas production credit for any taxable 

5 year is an amount equal to the product of— 

6 ‘‘(1) $4.27, and 

7 ‘‘(2) each million British thermal units 

8 (mmBtu) of biogas— 

9 ‘‘(A) produced by the taxpayer— 

10 ‘‘(i) from qualified energy feedstock, 

11 and 

12 ‘‘(ii) at a qualified facility during the 

13 10-year period beginning on the date the 

14 facility was originally placed in service, and 

15 ‘‘(B)(i) sold by the taxpayer to an unre16 lated person during the taxable year, or 

17 ‘‘(ii) used by the taxpayer as a fuel during 

18 the taxable year. 

19 ‘‘(b) DEFINITIONS.—For purposes of this section— 

20 ‘‘(1) BIOGAS.—The term ‘biogas’ means a gas 

21 which— 

22 ‘‘(A) is derived by processing a qualified 

23 energy feedstock, and 

24 ‘‘(B) contains— 

25 ‘‘(i) at least 52 percent methane, and 

26 ‘‘(ii) carbon dioxide and trace gases. 


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1 ‘‘(2) QUALIFIED ENERGY FEEDSTOCK.— 

2 ‘‘(A) IN GENERAL.—The term ‘qualified 

3 energy feedstock’ means— 

4 ‘‘(i) manure of livestock (including 

5 any litter, wood shavings, straw, rice hulls, 

6 bedding material, and other materials inci7 dentally collected with the manure), 

8 ‘‘(ii) any nonhazardous, organic agri9 cultural or food industry byproduct or 

10 waste material (cellulosic or otherwise) de11 rived from— 

12 ‘‘(I) renewable biomass, 

13 ‘‘(II) harvesting residue, 

14 ‘‘(III) any waste or byproduct 

15 from fermentation processes, ethanol 

16 production, biodiesel production, 

17 slaughter of livestock, food produc18 tion, food processing, or food service, 

19 or 

20 ‘‘(IV) other organic wastes, by21 products, or sources, 

22 ‘‘(iii) solid wood waste materials, in23 cluding waste pallets, crates, dunnage, 

24 manufacturing and construction wood 

25 wastes, and tree trimmings, 


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1 ‘‘(iv) agricultural or forestry crops, or 

2 ‘‘(v) landfill waste, sewage waste 

3 treatment materials, or other decaying or4 ganic materials. 

5 ‘‘(B) RENEWABLE BIOMASS.—The term 

6 ‘renewable biomass’ means materials from pre7 commercial thinning or invasive species from 

8 National Forest System land and public lands 

9 (as defined in section 103 of the Federal Land 

10 Policy and Management Act of 1976 (43 U.S.C. 

11 1702)) that— 

12 ‘‘(i) are byproducts of preventive 

13 treatments that are removed— 

14 ‘‘(I) to reduce or contain disease 

15 or insect infestation, or 

16 ‘‘(II) to restore ecosystem health, 

17 ‘‘(ii) would not otherwise be used for 

18 higher-value products, and 

19 ‘‘(iii) are harvested in accordance with 

20 applicable law and land management plans 

21 and the requirements for— 

22 ‘‘(I) old-growth maintenance, res23 toration, and management direction of 

24 paragraphs (2), (3), and (4) of sub25 section (e) of section 102 of the 


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1 Healthy Forests Restoration Act of 

2 2003 (16 U.S.C. 6512), and 

3 ‘‘(II) large tree retention of sub4 section (f) of that section, or 

5 ‘‘(iv) any organic matter that is avail6 able on a renewable or recurring basis 

7 from non-Federal land or land belonging to 

8 an Indian or Indian tribe that is held in 

9 trust by the United States or subject to a 

10 restriction against alienation imposed by 

11 the United States, including— 

12 ‘‘(I) renewable plant material 

13 (such as feed grains, other agricul14 tural commodities, other plants and 

15 trees, and algae), and 

16 ‘‘(II) waste material (such as 

17 crop residue, other vegetative waste 

18 material (including wood waste and 

19 wood residues), animal waste and by20 products (including fats, oils, greases, 

21 and manure), food waste, and yard 

22 waste). 

23 ‘‘(C) LIVESTOCK.—The term ‘livestock’ in24 cludes poultry, cattle, sheep, swine, goats, 

25 horses, mules, and other equines. 


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1 ‘‘(3) QUALIFIED FACILITY.—The term ‘quali2 fied facility’ means a facility that— 

3 ‘‘(A) uses anaerobic digesters or other bio4 logical, chemical, or thermal processes to con5 vert qualified energy feedstock into biogas, 

6 ‘‘(B) is owned by the taxpayer, 

7 ‘‘(C) is located in the United States, 

8 ‘‘(D) is originally placed in service after 

9 the date of the enactment of this section and 

10 before January 1, 2016, and 

11 ‘‘(E) the biogas output of which is— 

12 ‘‘(i) marketed through interconnection 

13 with a gas distribution or transmission 

14 pipeline, 

15 ‘‘(ii) marketed as a gaseous or liquid 

16 fuel such as hydrogen or natural gas and 

17 then used as a fuel, or 

18 ‘‘(iii) reasonably expected to be used 

19 in a quantity sufficient to offset the con20 sumption of at least 5,000 mmBtu annu21 ally of commercially-marketed fuel derived 

22 from coal, crude oil, natural gas, propane, 

23 or other fossil fuel. 

24 ‘‘(c) SPECIAL RULES.—For purposes of this sec25 tion— 


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1 ‘‘(1) INCREASED CREDIT FOR QUALIFIED CEL2 LULOSIC ENERGY FEEDSTOCK.— 

3 ‘‘(A) IN GENERAL.—In the case of biogas 

4 is produced from qualified cellulosic energy 

5 feedstock, subsection (a) shall be applied by 

6 substituting the dollar amount in effect for the 

7 taxable year under subsection (a)(1) with an 

8 amount equal to 125 percent of such dollar 

9 amount. 

10 ‘‘(B) QUALIFIED CELLULOSIC ENERGY

11 FEEDSTOCK.—For purposes of subparagraph 

12 (A), the term ‘qualified cellulosic energy feed13 stock’ means an qualified energy feedstock that 

14 is composed of any lignocellulosic or 

15 hemicellulosic matter. 

16 ‘‘(2) PRODUCTION ATTRIBUTABLE TO THE TAX17 PAYER.—In the case of a facility in which more than 

18 1 person has an ownership interest, except to the ex19 tent provided in regulations prescribed by the Sec20 retary, production from the qualified facility shall be 

21 allocated among such persons in proportion to their 

22 respective ownership interests in the gross sales 

23 from such qualified facility. 

24 ‘‘(3) RELATED PERSONS.—Persons shall be 

25 treated as related to each other if such persons 


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1 would be treated as a single employer under the reg2 ulations prescribed under section 52(b). In the case 

3 of a corporation which is a member of an affiliated 

4 group of corporations filing a consolidated return, 

5 such corporation shall be treated as selling biogas to 

6 an unrelated person if such biogas is sold to such a 

7 person by another member of such group. 

8 ‘‘(4) PASS-THRU IN THE CASE OF ESTATES AND

9 TRUSTS.—Under regulations prescribed by the Sec10 retary, rules similar to the rules of subsection (d) of 

11 section 52 shall apply. 

12 ‘‘(5) COORDINATION WITH CREDIT FROM PRO13 DUCING FUEL FROM A NONCONVENTIONAL

14 SOURCE.—The amount of biogas produced and sold 

15 or used by the taxpayer during any taxable year 

16 which is taken into account under this section shall 

17 be reduced by the amount of biogas produced and 

18 sold by the taxpayer in such taxable year which is 

19 taken into account under section 45K. 

20 ‘‘(6) COORDINATION WITH CREDIT FROM PRO21 DUCING ELECTRICITY FROM RENEWABLE RE22 SOURCES.—The amount of biogas produced and sold 

23 or used by the taxpayer during any taxable year 

24 which is taken into account under this section shall 

25 be reduced by the amount of biogas produced and 


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1 sold by the taxpayer in such taxable year which is 

2 taken into account under section 45. 

3 ‘‘(7) CREDIT ELIGIBILITY IN THE CASE OF GOV4 ERNMENT-OWNED FACILITIES.—In the case of any 

5 facility producing biogas and that is owned by a gov6 ernmental unit, subparagraph (B) of subsection 

7 (b)(3) shall be applied by substituting ‘is leased or 

8 operated by the taxpayer’ for ‘is owned by the tax9 payer’. 

10 ‘‘(d) TRANSFERABILITY OF CREDIT.— 

11 ‘‘(1) IN GENERAL.—A taxpayer may transfer 

12 the credit under this section through an assignment 

13 to any person. Such transfer may be revoked only 

14 with the consent of the Secretary. 

15 ‘‘(2) REGULATIONS.—The Secretary shall pre16 scribe such regulations as necessary to ensure that 

17 any credit transferred under paragraph (1) is 

18 claimed once and not reassigned by such other per19 son. 

20 ‘‘(e) ADJUSTMENT BASED ON INFLATION.— 

21 ‘‘(1) IN GENERAL.—The dollar amount under 

22 subsection (a)(1) shall be adjusted by multiplying 

23 such amount by the inflation adjustment factor for 

24 the calendar year in which the sale occurs. If any 

25 amount as increased under the preceding sentence is 


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1 not a multiple of 1 cent, such amount shall be 

2 rounded to the nearest multiple of 1 cent. 

3 ‘‘(2) COMPUTATION OF INFLATION ADJUST4 MENT FACTOR.— 

5 ‘‘(A) IN GENERAL.—The Secretary shall, 

6 not later than April 1 of each calendar year, de7 termine and publish in the Federal Register the 

8 inflation adjustment factor in accordance with 

9 this paragraph. 

10 ‘‘(B) INFLATION ADJUSTMENT FACTOR.— 

11 The term ‘inflation adjustment factor’ means, 

12 with respect to a calendar year, a fraction the 

13 numerator of which is the GDP implicit price 

14 deflator for the preceding calendar year and the 

15 denominator of which is the GDP implicit price 

16 deflator for calendar year 2007. The term 

17 ‘GDP implicit price deflator’ means the most 

18 recent revision of the implicit price deflator for 

19 the gross domestic product as computed and 

20 published by the Department of Commerce be21 fore March 15 of the calendar year.’’. 

22 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec23 tion 38(b) of the Internal Revenue Code of 1986 is amend24 ed by striking ‘‘plus’’ at the end of paragraph (34), by 

25 striking the period at the end of paragraph (35) and inVerDate Nov 24 2008 06:51 Feb 25, 2009 Jkt 079200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1158.IH H1158

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1 serting ‘‘, plus’’, and by adding at the end the following 

2 new paragraph: 

3 ‘‘(36) the qualified biogas production credit 

4 under section 45R(a).’’. 

5 (c) CREDIT ALLOWED AGAINST AMT.—Section 

6 38(c)(4)(B) of the Internal Revenue Code of 1986 is 

7 amended by striking ‘‘and’’ at the end of clause (vii), by 

8 striking the period at the end of clause (viii) and inserting 

9 ‘‘, and’’, and by adding at the end the following new 

10 clause: 

11 ‘‘(ix) the credit determined under section 45R.’’. 

12 (d) CLERICAL AMENDMENT.—The table of sections 

13 for subpart D of part IV of subchapter A of chapter 1 

14 of the Internal Revenue Code of 1986 is amended by add15 ing at the end the following new item: 

‘‘Sec. 45R. Biogas produced from certain renewable feedstock.’’. 

16 (e) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to biogas produced and sold (or 

18 used) in taxable years beginning after the date of the en19 actment of this Act. 

Æ 


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