II 

115TH CONGRESS 

1ST SESSION S. 230 

To amend the Internal Revenue Code of 1986 to allow a credit against 

income tax for facilities using a qualified methane conversion technology 

to provide transportation fuels and chemicals. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 24, 2017 

Mr. CASSIDY introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to allow a 

credit against income tax for facilities using a qualified 

methane conversion technology to provide transportation 

fuels and chemicals. 

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 ‘‘Capitalizing on Amer5 ican Methane Act of 2017’’. 


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1 SEC. 2. INCENTIVES FOR INNOVATIVE FUEL PRODUCTION 

2 THROUGH QUALIFIED METHANE CONVER3 SION TECHNOLOGY. 

4 (a) INCLUSION OF QUALIFIED METHANE CONVER5 SION TECHNOLOGY IN GASIFICATION PROJECT CREDIT.— 

6 (1) IN GENERAL.—Paragraph (2) of section 

7 48B(c) of the Internal Revenue Code of 1986 is 

8 amended to read as follows: 

9 ‘‘(2) GASIFICATION TECHNOLOGY.—The term 

10 ‘gasification technology’ means— 

11 ‘‘(A) any process which converts a solid or 

12 liquid product from coal, petroleum residue, 

13 biomass, or other materials which are recovered 

14 for their energy or feedstock value into a syn15 thesis gas composed primarily of carbon mon16 oxide and hydrogen for direct use or subsequent 

17 chemical or physical conversion, and 

18 ‘‘(B) any qualified methane conversion 

19 technology.’’. 

20 (2) QUALIFIED METHANE CONVERSION TECH21 NOLOGY.—Subsection (c) of section 48B of such 

22 Code is amended by adding at the end the following 

23 new paragraph: 

24 ‘‘(9) QUALIFIED METHANE CONVERSION TECH25 NOLOGY.— 


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

2 methane conversion technology’ means a proc3 ess consisting of the molecular conversion of a 

4 fuel consisting principally of methane into hy5 drocarbons, and the subsequent use of such hy6 drocarbons, if such hydrocarbons are principally 

7 intended to be used— 

8 ‘‘(i) to replace or reduce the quantity 

9 of petroleum present in a fuel used in 

10 motor vehicles, motor vehicle engines, 

11 nonroad vehicles, nonroad engines, or air12 craft if— 

13 ‘‘(I) the lifecycle greenhouse gas 

14 emissions associated with the produc15 tion and combustion is, on an ongoing 

16 basis, not more than such emissions 

17 from the equivalent conventional fuel 

18 produced from conventional petroleum 

19 sources, 

20 ‘‘(II) the sulfur concentration is 

21 not more than 2 parts per million, 

22 and 

23 ‘‘(III) such production is at a fa24 cility which, during the taxable year, 

25 has an annual total production capacVerDate Sep 11 2014 00:18 Feb 02, 2017 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S230.IS S230

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1 ity of not more than 150,000,000 gal2 lons of liquid transportation fuel, or 

3 ‘‘(ii) for the production of chemicals 

4 (within the meaning of paragraph (7)(A)). 

5 ‘‘(B) PRIMARY PURPOSE OF FACILITY.—If 

6 a facility uses qualified methane conversion 

7 technology to produce both fuels and chemicals, 

8 the requirements described in subparagraph 

9 (A)(i) shall apply only if the primary use of the 

10 facility is to produce fuels. 

11 ‘‘(C) EXCLUSION.—The term ‘qualified 

12 methane conversion technology’ does not include 

13 technology that is part of a facility the con14 struction of which begins after September 30, 

15 2027.’’. 

16 (3) INCREASE IN CREDIT AVAILABLE FOR

17 METHANE CONVERSION PROJECTS.— 

18 (A) IN GENERAL.—Paragraph (1) of sec19 tion 48B(d) of such Code is amended by strik20 ing ‘‘plus’’ at the end of subparagraph (A), by 

21 striking the period at the end of subparagraph 

22 (B) and inserting ‘‘, plus’’, and by adding at 

23 the end the following new subparagraph: 


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1 ‘‘(C) $500,000,000 for qualifying gasifi2 cation projects that rely primarily on qualified 

3 methane conversion technology. 

4 No qualifying gasification project shall receive more 

5 than $100,000,000 under the program.’’. 

6 (B) PERIOD OF ISSUANCE.—Paragraph (2) 

7 of section 48B(d) of such Code is amended to 

8 read as follows: 

9 ‘‘(2) PERIOD OF ISSUANCE.— 

10 ‘‘(A) IN GENERAL.—A certificate of eligi11 bility under subparagraphs (A) and (B) of 

12 paragraph (1) may be issued only before Octo13 ber 1, 2027. 

14 ‘‘(B) QUALIFIED METHANE CONVERSION

15 TECHNOLOGY.—A certificate of eligibility under 

16 subparagraph (C) of paragraph (1) may be 

17 issued only during the 10-fiscal-year period be18 ginning on the first October 1 which is on or 

19 after the date of the enactment of this para20 graph.’’. 

21 (C) SELECTION PRIORITIES.—Paragraph 

22 (4) of section 48B(d) of such Code is amended 

23 to read as follows: 

24 ‘‘(4) SELECTION PRIORITIES.— 


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1 ‘‘(A) IN GENERAL.—In determining which 

2 qualifying gasification projects, other than 

3 projects using qualified methane conversion 

4 technology, to certify under this section, the 

5 Secretary shall— 

6 ‘‘(i) give highest priority to projects 

7 with the greatest separation and sequestra8 tion percentage of total carbon dioxide 

9 emissions, and 

10 ‘‘(ii) give high priority to applicant 

11 participants who have a research partner12 ship with an eligible educational institution 

13 (as defined in section 529(e)(5)). 

14 ‘‘(B) CHEMICALS PROJECTS USING QUALI15 FIED METHANE CONVERSION TECHNOLOGY.—In 

16 determining which qualifying gasification 

17 projects that produce chemicals using qualified 

18 methane conversion technology to certify under 

19 this section, the Secretary shall give priority to 

20 projects involving a production process that has 

21 significant environmental benefits over the pro22 duction of the same chemical from petroleum 

23 products.’’. 

24 (b) INCLUSION OF QUALIFIED METHANE CONVER25 SION TECHNOLOGY IN ALTERNATIVE FUEL CREDIT.— 


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1 Paragraph (2) of section 6426(d) of the Internal Revenue 

2 Code of 1986 is amended by striking ‘‘and’’ at the end 

3 of subparagraph (F), by striking the period at the end 

4 of subparagraph (G) and inserting ‘‘, and’’, and by adding 

5 at the end the following new subparagraph: 

6 ‘‘(H) liquid fuel produced through qualified 

7 methane conversion technology (as defined in 

8 section 48B(c)(9)(A)) at a facility the construc9 tion of which begins before October 1, 2027.’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall take effect on the date of the enactment 

12 of this Act. 

Æ 


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