II 

109TH CONGRESS 

2D SESSION S. 3997 

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

tax proportional to the number of million British thermal units of natural 

gas produced by a high Btu fuel facility. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 29, 2006 

Mr. SANTORUM 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 

a credit against tax proportional to the number of million 

British thermal units of natural gas produced by a high 

Btu fuel facility. 

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 ‘‘Landfill Gas Act of 

5 2006’’. 

6 SEC. 2. CREDIT FOR PRODUCTION OF NATURAL GAS. 

7 (a) ALLOWANCE OF CREDIT.—Subpart D of part IV 

8 of subchapter A of chapter 1 of the Internal Revenue Code 


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1 of 1986 (relating to business related credits) is amended 

2 by inserting after section 45M the following new section: 

3 ‘‘SEC. 45N. CREDIT FOR PRODUCTION OF NATURAL GAS. 

4 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

5 the case of a taxpayer, the amount of the natural gas pro6 duction credit determined under this section for a taxable 

7 year is equal to the product of— 

8 ‘‘(1) $2, multiplied by 

9 ‘‘(2) each 1,000,000 British thermal units of 

10 natural gas produced by the taxpayer at a high Btu 

11 fuel facility during the taxable year. 

12 ‘‘(b) REDUCTION IN CREDIT AMOUNT AS NATURAL

13 GAS PRICES INCREASE.—For purposes of this section, in 

14 the case of natural gas produced after the first day of a 

15 production month following the date on which the spot 

16 price of natural gas delivered at Henry Hub, Louisiana, 

17 on average, exceeds $6 per million British thermal units 

18 for 30 consecutive trading days, the $2 amount under sub19 section (a) shall be reduced (but not below zero) by an 

20 amount which is equal to the amount by which such spot 

21 price exceeds $6 per million British thermal units. 

22 ‘‘(c) HIGH BTU FUEL FACILITY.—For purposes of 

23 this section— 

24 ‘‘(1) IN GENERAL.—The term ‘high Btu fuel fa25 cility’ means a facility that produces high Btu bioVerDate Aug 31 2005 02:54 Oct 04, 2006 Jkt 049196 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3997.IS S3997

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1 mass fuel and which is placed in service after the 

2 date of the enactment of this section and before 

3 January 1, 2012. 

4 ‘‘(2) HIGH BTU BIOMASS FUEL.—The term 

5 ‘high Btu biomass fuel’ means fuel produced from 

6 biomass (as defined in section 45K(c)(3)) that— 

7 ‘‘(A) contains no more than 7 pounds of 

8 water per million standard cubic feet, 

9 ‘‘(B) contains not less than 95 percent 

10 methane per volume, and 

11 ‘‘(C) has a Btu content of at least 950 per 

12 square cubic feet. 

13 ‘‘(d) OTHER RULES TO APPLY.—Rules similar to the 

14 rules of paragraphs (1), (3), (4), and (5) of section 45(e) 

15 shall apply for purposes of this section. 

16 ‘‘(e) DENIAL OF DOUBLE BENEFIT.—No credit shall 

17 be allowed under subsection (a) for natural gas produced 

18 by the taxpayer if a credit is allowed to the taxpayer with 

19 respect to such gas under section 45, 45I, or 45K. 

20 ‘‘(f) APPLICATION OF SECTION.—This section shall 

21 not apply to natural gas produced at any facility after the 

22 date which is 10 years after the date such facility is placed 

23 in service.’’. 

24 (b) CREDIT TO BE PART OF GENERAL BUSINESS

25 CREDIT.—Subsection (b) of section 38 of such Code (reVerDate Aug 31 2005 02:54 Oct 04, 2006 Jkt 049196 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3997.IS S3997

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1 lating to general business credit) is amended by striking 

2 ‘‘and’’ at the end of paragraph (29), by striking the period 

3 at the end of paragraph (30) and inserting ‘‘, and’’, and 

4 by adding at the end the following new paragraph: 

5 ‘‘(31) the natural gas production credit deter6 mined under section 45N(a).’’. 

7 (c) CONFORMING AMENDMENT.—The table of sec8 tions for subpart D of part IV of subchapter A of chapter 

9 1 of such Code is amended by inserting after the item 

10 relating to section 45M the following new item: 

‘‘Sec. 45N. Credit for production of natural gas.’’. 

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

12 this section shall apply to natural gas produced after De13 cember 31, 2006, in taxable years ending after such date. 

Æ 


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