I 
111TH CONGRESS 
1ST SESSION 
H. R. 907 
To amend the Internal Revenue Code of 1986 to provide for a livestock 
energy investment credit. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 4, 2009 
Mr. TERRY introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
for a livestock energy investment credit. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. LIVESTOCK ENERGY INVESTMENT CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 40A the fol-
lowing new section: 
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‘‘SEC. 40B. RENEWABLE ENERGY PRODUCED FROM LIVE-
STOCK WASTE USING EPA-VERIFIED TECH-
NOLOGIES FOR THE COMPREHENSIVE ENVI-
RONMENTAL 
TREATMENT 
OF 
LIVESTOCK 
WASTE. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
livestock-derived renewable energy production credit for 
any taxable year is an amount equal to the product of— 
‘‘(1) $5.56, and 
‘‘(2) 
each 
million 
British 
thermal 
units 
(mmBtu) of livestock-derived renewable energy— 
‘‘(A) produced by the taxpayer— 
‘‘(i) from qualified energy feedstock, 
‘‘(ii) at a qualified facility during the 
7-year period beginning on the date the fa-
cility was originally placed in service, and 
‘‘(iii) using an EPA-verified tech-
nology that provides comprehensive live-
stock waste treatment addressing signifi-
cant reductions to nitrogen and phos-
phorus nutrient discharges, odor and air 
emissions including greenhouse gases and 
ammonia, methane, hydrogen sulfide and 
volatile organic compounds, and 
‘‘(B) either— 
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‘‘(i) sold by the taxpayer to an unre-
lated person during the taxable year, or 
‘‘(ii) used by the taxpayer during the 
taxable year. 
‘‘(b) DEFINITIONS.—For purposes of this section— 
‘‘(1) LIVESTOCK-DERIVED
RENEWABLE
EN-
ERGY.—The term ‘livestock-derived renewable en-
ergy’ means fuel which is derived by processing 
qualified energy feedstock. 
‘‘(2) QUALIFIED ENERGY FEEDSTOCK.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
energy feedstock’ means— 
‘‘(i) manure of livestock (including 
any litter, wood shavings, straw, rice hulls, 
bedding material, and other materials inci-
dentally collected with the manure), 
‘‘(ii) any nonhazardous, organic agri-
cultural or food industry byproduct or 
waste material (cellulosic or otherwise) de-
rived from— 
‘‘(I) renewable biomass, 
‘‘(II) harvesting residue, 
‘‘(III) any waste or byproduct 
from fermentation processes, ethanol 
production, 
biodiesel 
production, 
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slaughter of livestock, food produc-
tion, food processing, or food service, 
or 
‘‘(IV) other organic wastes, by-
products, or sources, 
‘‘(iii) solid wood waste materials, in-
cluding waste pallets, crates, dunnage, 
manufacturing 
and 
construction 
wood 
wastes, and tree trimmings, or 
‘‘(iv) agricultural or forestry crops. 
‘‘(B) RENEWABLE
BIOMASS.—The term 
‘renewable biomass’ means materials from pre- 
commercial thinning or invasive species from 
National Forest System land and public lands 
(as defined in section 103 of the Federal Land 
Policy and Management Act of 1976 (43 U.S.C. 
1702)) that— 
‘‘(i)(I) are byproducts of preventive 
treatments that are removed— 
‘‘(aa) to reduce or contain dis-
ease or insect infestation, or 
‘‘(bb) 
to 
restore 
ecosystem 
health, 
‘‘(II) would not otherwise be used for 
higher-value products, and 
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‘‘(III) are harvested in accordance 
with applicable law and land management 
plans and the requirements for— 
‘‘(aa) old-growth maintenance, 
restoration, and management direc-
tion of paragraphs (2), (3), and (4) of 
subsection (e) of section 102 of the 
Healthy Forests Restoration Act of 
2003 (16 U.S.C. 6512), and 
‘‘(bb) large tree retention of sub-
section (f) of that section, or 
‘‘(ii) any organic matter that is avail-
able on a renewable or recurring basis 
from non-Federal land or land belonging to 
an Indian or Indian tribe that is held in 
trust by the United States or subject to a 
restriction against alienation imposed by 
the United States, including— 
‘‘(I) renewable plant material 
(such as feed grains, other agricul-
tural commodities, other plants and 
trees, and algae), and 
‘‘(II) waste material (such as 
crop residue, other vegetative waste 
material (including wood waste and 
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wood residues), animal waste and by-
products (including fats, oils, greases, 
and manure), food waste, and yard 
waste). 
‘‘(C) LIVESTOCK.—The term ‘livestock’ in-
cludes poultry, cattle, sheep, swine, goats, 
horses, mules, and other equines. 
‘‘(3) QUALIFIED FACILITY.—The term ‘quali-
fied facility’ means a facility— 
‘‘(A) which is owned by the taxpayer, 
‘‘(B) which is located in the United States, 
‘‘(C) which is originally placed in service 
before January 1, 2018, and 
‘‘(D) the livestock-derived renewable en-
ergy output of which is— 
‘‘(i) marketed through interconnection 
with a gas distribution or transmission 
pipeline, or 
‘‘(ii) used on-site or off-site in a quan-
tity that is sufficient to offset the con-
sumption of at least 50,000 mmBtu annu-
ally of commercially marketed fuel derived 
from coal, crude oil, natural gas, propane, 
or other fossil fuel. 
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‘‘(4) EPA-VERIFIED TECHNOLOGY.—The term 
‘EPA-verified technology’ means any technology the 
performance of which is verified by the Environ-
mental Technology Verification Program of the En-
vironmental Protection Agency. 
‘‘(c) REDUCTION OF CREDIT BASED ON MARKET 
PRICE OF BTUS.— 
‘‘(1) IN
GENERAL.—If the market price per 
mmBtu’s exceeds $11, the amount otherwise appli-
cable under subsection (a)(1) for the taxable year 
(without regard to paragraph (1)) shall be reduced 
(but not below zero) by the amount which bears the 
same ratio to the amount otherwise so applicable as 
such excess bears to $5. 
‘‘(2) ROUNDING.—Any reduction determined 
under subparagraph (A) which is not a multiple of 
10 cents shall be rounded to the nearest multiple of 
10 cents. 
‘‘(3) MARKET
PRICE.—For purposes of this 
paragraph, the market price per mmBtu for any tax-
able year shall be the daily average market price per 
mmBtu on the Chicago exchange during the 3- 
month period ending at the close of the preceding 
taxable year. 
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‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) PRODUCTION ATTRIBUTABLE TO THE TAX-
PAYER.—In the case of a facility in which more than 
1 person has an ownership interest, except to the ex-
tent provided in regulations prescribed by the Sec-
retary, production from the qualified facility shall be 
allocated among such persons in proportion to their 
respective ownership interests in the gross sales 
from such qualified facility. 
‘‘(2) RELATED
PERSONS.—Persons shall be 
treated as related to each other if such persons 
would be treated as a single employer under the reg-
ulations prescribed under section 52(b). In the case 
of a corporation which is a member of an affiliated 
group of corporations filing a consolidated return, 
such corporation shall be treated as selling livestock- 
derived renewable energy to an unrelated person if 
such biogas is sold to such a person by another 
member of such group. 
‘‘(3) PASS-THRU IN THE CASE OF ESTATES AND 
TRUSTS.—Under regulations prescribed by the Sec-
retary, rules similar to the rules of subsection (d) of 
section 52 shall apply. 
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‘‘(4) COORDINATION WITH CREDIT FROM PRO-
DUCING
FUEL
FROM
A
NONCONVENTIONAL 
SOURCE.—The amount of livestock-derived renew-
able energy produced and sold or used by the tax-
payer during any taxable year which is taken into 
account under this section shall be reduced by the 
amount of livestock-derived renewable energy pro-
duced and sold by the taxpayer in such taxable year 
which is taken into account under section 45K. 
‘‘(5) CREDIT ELIGIBILITY IN THE CASE OF GOV-
ERNMENT-OWNED
FACILITIES
USING
POULTRY 
WASTE.—In the case of a facility using poultry 
waste to produce livestock-derived renewable energy 
and owned by a governmental unit, subparagraph 
(B) of subsection (b)(3) shall be applied by sub-
stituting ‘is leased or operated by the taxpayer’ for 
‘is owned by the taxpayer’. 
‘‘(e) TRANSFERABILITY OF CREDIT.— 
‘‘(1) IN GENERAL.—A taxpayer may transfer 
the credit under this section through an assignment 
to any person. Such transfer may be revoked only 
with the consent of the Secretary. 
‘‘(2) REGULATIONS.—The Secretary shall pre-
scribe such regulations as necessary to ensure that 
any credit transferred under paragraph (1) is 
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claimed once and not reassigned by such other per-
son. 
‘‘(f) ADJUSTMENT BASED ON INFLATION.— 
‘‘(1) IN GENERAL.—The $5.56 amount in sub-
section (a)(1) and the $11 amount in subsection 
(c)(2)(A) shall each be adjusted by multiplying such 
amount by the inflation adjustment factor for the 
calendar year in which the sale occurs. If any 
amount as increased under the preceding sentence is 
not a multiple of 0.1 cent, such amount shall be 
rounded to the nearest multiple of 0.1 cent. 
‘‘(2) COMPUTATION
OF
INFLATION
ADJUST-
MENT FACTOR.— 
‘‘(A) IN GENERAL.—The Secretary shall, 
not later than April 1 of each calendar year, de-
termine and publish in the Federal Register the 
inflation adjustment factor in accordance with 
this paragraph. 
‘‘(B) INFLATION ADJUSTMENT FACTOR.— 
The term ‘inflation adjustment factor’ means, 
with respect to a calendar year, a fraction the 
numerator of which is the GDP implicit price 
deflator for the preceding calendar year and the 
denominator of which is the GDP implicit price 
deflator for calendar year 2007. The term 
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‘GDP implicit price deflator’ means the most 
recent revision of the implicit price deflator for 
the gross domestic product as computed and 
published by the Department of Commerce be-
fore March 15 of the calendar year.’’. 
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) of such Code is amended by striking ‘‘plus’’ 
at the end of paragraph (30), by striking the period at 
the end of paragraph (31) and inserting ‘‘, plus’’, and by 
adding at the end the following new paragraph: 
‘‘(32) the livestock-derived renewable energy 
production credit under section 40B(a).’’. 
(c) CREDIT
ALLOWED
AGAINST
AMT.—Section 
38(c)(4)(B) of such Code is amended by striking ‘‘and’’ 
at the end of clause (i), by striking the period at the end 
of clause (ii)(II) and inserting ‘‘, and’’, and by adding at 
the end the following new clause: 
‘‘(iii) the credit determined under sec-
tion 40B.’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 40A the following new item: 
‘‘Sec. 40B. Renewable energy produced from livestock waste using EPA-verified 
technologies for the comprehensive environmental treatment of 
livestock waste.’’. 
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(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to energy produced, and sold or 
used, in taxable years beginning after the date of the en-
actment of this Act. 
Æ 
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