I 

114TH CONGRESS 

2D SESSION H. R. 5489 

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 new clean renewable energy bonds to 

finance qualified biogas property, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 15, 2016 

Mr. KIND (for himself, Mr. REED, Mr. WALZ, Mr. RIBBLE, Mr. WELCH, Mr. 

POCAN, Mr. SIMPSON, Ms. STEFANIK, Mr. VALADAO, Mr. MOOLENAAR, 

Ms. DELBENE, Mr. COURTNEY, Mr. GIBBS, and Mr. NEWHOUSE) 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 new clean renewable energy bonds to finance 

qualified biogas property, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Agriculture Environ3 mental Stewardship Act of 2016’’. 

4 SEC. 2. FINDINGS. 

5 Congress finds the following: 

6 (1) Incentives and encouragement for the con7 servation and appropriate handling of nutrients con8 tained in organic matter are necessary. 

9 (2) Biogas systems will save Federal, State, and 

10 local taxpayers money by converting waste into use11 ful products, such as fuel, fertilizer, thermal heat, 

12 feedstock for hydrogen fuel cells, and renewable 

13 chemicals. 

14 (3) Manure resource recovery systems will save 

15 Federal, State, and local taxpayers money by recov16 ering the nutrients contained in organic matter from 

17 their source, rather than recovering the nutrients 

18 after they have entered landfills or waterways. 

19 SEC. 3. ENERGY CREDIT FOR QUALIFIED BIOGAS PROP20 ERTY AND QUALIFIED MANURE RESOURCE 

21 RECOVERY PROPERTY. 

22 (a) IN GENERAL.—Section 48(a)(3)(A) of the Inter23 nal Revenue Code of 1986 is amended by striking ‘‘or’’ 

24 at the end of clause (vi) and by adding at the end the 

25 following new clauses: 

26 ‘‘(viii) qualified biogas property, or 


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1 ‘‘(ix) qualified manure resource recov2 ery property,’’. 

3 (b) 30-PERCENT CREDIT.—Section 48(a)(2)(A)(i) of 

4 such Code is amended by striking ‘‘and’’ at the end of 

5 subclause (III), by striking ‘‘and’’ at the end of subclause 

6 (IV), and by adding at the end the following new sub7 clauses: 

8 ‘‘(V) qualified biogas property, 

9 and 

10 ‘‘(VI) qualified manure resource 

11 recovery property, and’’. 

12 (c) DEFINITIONS.—Section 48(c) of such Code is 

13 amended by adding at the end the following new para14 graphs: 

15 ‘‘(5) QUALIFIED BIOGAS PROPERTY.— 

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

17 biogas property’ means property comprising a 

18 system which— 

19 ‘‘(i) uses anaerobic digesters, or other 

20 biological, chemical, thermal, or mechanical 

21 processes (alone or in combination), to 

22 convert biomass (as defined in section 

23 45K(c)(3)) into a gas which consists of not 

24 less than 52 percent methane, and 


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1 ‘‘(ii) captures such gas for use as a 

2 fuel. 

3 ‘‘(B) INCLUSION OF CERTAIN CLEANING

4 AND CONDITIONING EQUIPMENT.—Such term 

5 shall include any property which cleans and 

6 conditions the gas referred to in subparagraph 

7 (A) for use as a fuel. 

8 ‘‘(C) TERMINATION.—No credit shall be 

9 determined under this section with respect to 

10 any qualified biogas property for any period 

11 after December 31, 2020. 

12 ‘‘(6) QUALIFIED MANURE RESOURCE RECOVERY

13 PROPERTY.— 

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

15 manure resource recovery property’ means 

16 property comprising a system which uses phys17 ical, biological, chemical, thermal, or mechanical 

18 processes to recover the nutrients nitrogen and 

19 phosphorus from a non-treated digestate or ani20 mal manure by reducing or separating at least 

21 50 percent of the concentration of such nutri22 ents, excluding any reductions during the incin23 eration, storage, composting, or field application 

24 of the non-treated digestate or animal manure. 


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1 ‘‘(B) INCLUSION OF CERTAIN PROCESSING

2 EQUIPMENT.—Such term shall include— 

3 ‘‘(i) any property which is used to re4 cover the nutrients referred to in subpara5 graph (A), such as— 

6 ‘‘(I) biological reactors, 

7 ‘‘(II) crystallizers, 

8 ‘‘(III) reverse osmosis mem9 branes and other water purifiers, 

10 ‘‘(IV) evaporators, 

11 ‘‘(V) distillers, 

12 ‘‘(VI) decanter centrifuges, and 

13 ‘‘(VII) equipment that facilitates 

14 the process of dissolved air flotation, 

15 ammonia stripping, gasification, or 

16 ozonation, and 

17 ‘‘(ii) any thermal drier which treats 

18 the nutrients recovered by the processes re19 ferred to in subparagraph (A). 

20 ‘‘(C) TERMINATION.—No credit shall be 

21 determined under this section with respect to 

22 any qualified manure resource recovery prop23 erty for any period after December 31, 2020.’’. 

24 (d) DENIAL OF DOUBLE BENEFIT FOR QUALIFIED

25 BIOGAS PROPERTY.—Section 45(e) of such Code is 


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1 amended by adding at the end the following new para2 graph: 

3 ‘‘(12) COORDINATION WITH ENERGY CREDIT

4 FOR QUALIFIED BIOGAS PROPERTY.—The term 

5 ‘qualified facility’ shall not include any facility which 

6 produces electricity from gas produced by qualified 

7 biogas property (as defined in section 48(c)(5)) if a 

8 credit is determined under section 48 with respect to 

9 such property for the taxable year or any prior tax10 able year.’’. 

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

12 this section shall apply to periods after December 31, 

13 2015, in taxable years ending after such date, under rules 

14 similar to the rules of section 48(m) of such Code (as in 

15 effect on the day before the date of the enactment of the 

16 Revenue Reconciliation Act of 1990). 

17 SEC. 4. NEW CLEAN RENEWABLE ENERGY BONDS FOR 

18 QUALIFIED BIOGAS PROPERTY AND QUALI19 FIED MANURE RESOURCE RECOVERY PROP20 ERTY. 

21 (a) IN GENERAL.—Section 54C(d)(1) of the Internal 

22 Revenue Code of 1986 is amended by inserting ‘‘, a quali23 fied biogas property (as defined in section 48(c)(5)), or 

24 a qualified manure resource recovery property (as defined 

25 in section 48(c)(6))’’ before ‘‘owned by’’. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to obligations issued after the date 

3 of the enactment of this Act. 

4 SEC. 5. STUDY OF BIOGAS. 

5 (a) IN GENERAL.—The Secretary of the Treasury 

6 shall enter into an agreement with the National Renewable 

7 Energy Laboratory to undertake a study of biogas that 

8 addresses the following: 

9 (1) The quality of biogas, including a compari10 son of biogas to natural gas and the identification 

11 of any components of biogas which make biogas un12 suitable for injection into existing natural gas pipe13 lines. 

14 (2) Methods for obtaining the highest energy 

15 content in biogas, including the use of co-digestion 

16 and identifying the optimal feed mixture. 

17 (3) Recommendations for the expansion of 

18 biogas production, including an analysis of the ex19 tent to which increasing the methane content of 

20 biogas would result in the greater use of biogas and 

21 an analysis of how the expanded use of biogas could 

22 help meet the growing energy needs of the United 

23 States. 

24 (b) REPORT.—Not later than 2 years after the date 

25 of the enactment of this Act, the Secretary shall submit 


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1 to Congress a report on the study conducted under sub2 section (a). 

Æ 


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