II 

111TH CONGRESS 

1ST SESSION S. 1094 

To amend the Internal Revenue Code of 1986 to provide for an energy 

carrier production tax credit, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 20, 2009 

Mr. WYDEN 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 provide 

for an energy carrier production tax credit, 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 ‘‘Renewable Energy Al5 ternative Production Act’’ or the ‘‘REAP Act’’. 

6 SEC. 2. CREDIT FOR PRODUCTION OF RENEWABLE EN7 ERGY. 

8 (a) IN GENERAL.—Section 45 of the Internal Rev9 enue Code of 1986 is amended by adding at the end the 

10 following new subsection: 


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1 ‘‘(f) CREDIT ALLOWED FOR PRODUCTION OF NON2 ELECTRIC ENERGY.— 

3 ‘‘(1) IN GENERAL.—The credit allowed under 

4 subsection (a) shall be increased by an amount equal 

5 to the product of— 

6 ‘‘(A) the dollar amount determined under 

7 paragraph (2), and 

8 ‘‘(B) each million British thermal units 

9 (mmBtu) of qualified fuel which is— 

10 ‘‘(i) produced by the taxpayer— 

11 ‘‘(I) from qualified energy re12 sources, and 

13 ‘‘(II) at any facility during the 

14 10-year period beginning on the date 

15 such facility was placed in service, 

16 ‘‘(ii) not used for the production of 

17 electricity, and 

18 ‘‘(iii) sold by the taxpayer to an unre19 lated person during the taxable year. 

20 ‘‘(2) DOLLAR AMOUNT.—The dollar amount de21 termined under this paragraph shall be the amount 

22 determined by the Secretary to be the equivalent, ex23 pressed in British thermal units, of the credit al24 lowed under subsection (a) for 1 kilowatt hour of 

25 electricity. 


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1 ‘‘(3) REDUCTION FOR GRANTS, TAX EXEMPT

2 BONDS, SUBSIDIZED ENERGY FINANCING, AND

3 OTHER CREDITS.—Rules similar to the rules of sub4 section (b)(3) shall apply for purposes of paragraph 

5 (1). 

6 ‘‘(4) DEFINITIONS AND SPECIAL RULES.—For 

7 purposes of this subsection— 

8 ‘‘(A) QUALIFIED FUEL.—The term ‘quali9 fied fuel’ means an energy product which is 

10 produced, extracted, converted, or synthesized 

11 from a qualified energy resource through a con12 trolled process, including pyrolysis, electrolysis, 

13 and anaerobic digestion, which results in a 

14 product consisting of methane, synthesis gas, 

15 hydrogen, steam, manufactured cellulosic fuels, 

16 or any other form of energy provided under reg17 ulations by the Secretary and which is used 

18 solely as a source of energy. 

19 ‘‘(B) ALLOCATION OF CREDIT TO PATRONS

20 OF AGRICULTURAL COOPERATIVES.—Rules 

21 similar to the rules of subsection (e)(11) shall 

22 apply for purposes of paragraph (1).’’. 

23 (b) CONFORMING AMENDMENTS.— 


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1 (1) The heading for section 45 of the Internal 

2 Revenue Code of 1986 is amended by striking 

3 ‘‘ELECTRICITY’’ and inserting ‘‘ENERGY’’. 

4 (2) The table of sections for subpart D of part 

5 IV of subchapter A of chapter 1 of such Code is 

6 amended by striking ‘‘Electricity’’ in the item relat7 ing to section 45 and inserting ‘‘Energy’’. 

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

9 this section shall apply to taxable years beginning after 

10 the date of the enactment of this Act. 

11 SEC. 3. ENERGY CREDIT FOR ONSITE RENEWABLE NON12 ELECTRIC ENERGY PRODUCTION FACILITIES. 

13 (a) CREDIT ALLOWED.—Clause (i) of section 

14 48(a)(2)(A) of the Internal Revenue Code of 1986 is 

15 amended— 

16 (1) by striking ‘‘and’’ at the end of subclause 

17 (III), and 

18 (2) by adding at the end the following new sub19 clause: 

20 ‘‘(V) qualified onsite renewable 

21 non-electric energy production prop22 erty,’’. 

23 (b) QUALIFIED ONSITE RENEWABLE NON-ELECTRIC

24 ENERGY PRODUCTION PROPERTY.—Subsection (c) of secVerDate Nov 24 2008 03:00 May 22, 2009 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1094.IS S1094

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1 tion 48 of the Internal Revenue Code of 1986 is amended 

2 by adding at the end the following new paragraph: 

3 ‘‘(5) QUALIFIED ONSITE RENEWABLE NON4 ELECTRIC ENERGY PRODUCTION PROPERTY.— 

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

6 onsite renewable non-electric energy production 

7 property’ means property which produces quali8 fied fuel— 

9 ‘‘(i) from qualified energy resources, 

10 ‘‘(ii) not used for the production of 

11 electricity, and 

12 ‘‘(iii) used primarily on the same site 

13 where the production is located to replace 

14 an equivalent amount of non-renewable 

15 fuel (determined based on the number of 

16 British thermal units of non-renewable fuel 

17 consumed by the taxpayer in the prior tax18 able year) or to provide energy primarily 

19 on such site for a use that did not exist 

20 prior to the later of the date of the enact21 ment of this paragraph or the date such 

22 property was placed in service. 

23 ‘‘(B) DEFINITIONS.—For purposes of this 

24 paragraph— 


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1 ‘‘(i) QUALIFIED FUEL.—The term 

2 ‘qualified fuel’ means an energy product 

3 which is produced, extracted, converted, or 

4 synthesized from a qualified energy re5 source through a controlled process, in6 cluding pyrolysis, electrolysis, and anaer7 obic digestion, which results in a product 

8 consisting of methane, synthesis gas, hy9 drogen, steam, manufactured cellulosic 

10 fuels, or any other form of energy provided 

11 under regulations by the Secretary and 

12 which is used solely as a source of energy. 

13 ‘‘(ii) QUALIFIED ENERGY RE14 SOURCES.—The term ‘qualified energy re15 sources’ has the meaning given such term 

16 by paragraph (1) of section 45(c). 

17 ‘‘(iii) TERMINATION.—The term 

18 ‘qualified onsite renewable non-electric en19 ergy production property’ shall not include 

20 any property for any period after the date 

21 which is 10 years after the date of the en22 actment of the Renewable Energy Alter23 native Production Act.’’. 

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

25 this section shall apply to periods after the date of the 


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1 enactment of this Act, under rules similar to the rules of 

2 section 48(m) of the Internal Revenue Code of 1986 (as 

3 in effect on the day before the date of the enactment of 

4 the Revenue Reconciliation Act of 1990). 

5 SEC. 4. RENEWABLE NON-ELECTRIC ENERGY PRODUCTION 

6 FACILITIES ELIGIBLE FOR NEW CLEAN RE7 NEWABLE ENERGY BONDS. 

8 (a) IN GENERAL.—Paragraph (1) of section 54C(d) 

9 of the Internal Revenue Code of 1986 is amended to read 

10 as follows: 

11 ‘‘(1) QUALIFIED RENEWABLE ENERGY FACIL12 ITY.—The term ‘qualified renewable energy facility’ 

13 means a facility which is— 

14 ‘‘(A)(i) a qualified facility (as determined 

15 under section 45(d) without regard to para16 graphs (8) and (10) thereof and to any placed 

17 in service date), or 

18 ‘‘(ii) a facility which produces qualified 

19 fuel (as defined in section 45(f)(4)(A)) which is 

20 derived from qualified energy resources (within 

21 the meaning of section 45(f)(4)(B)) and not 

22 used for the production of electricity, and 

23 ‘‘(B) owned by a public power provider, a 

24 governmental body, or a cooperative electric 

25 company.’’. 


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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. 

Æ 


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