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) intro-
duced 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 juris-
diction 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Agriculture Environ-
mental Stewardship Act of 2016’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Incentives and encouragement for the con-
servation and appropriate handling of nutrients con-
tained in organic matter are necessary. 
(2) Biogas systems will save Federal, State, and 
local taxpayers money by converting waste into use-
ful products, such as fuel, fertilizer, thermal heat, 
feedstock for hydrogen fuel cells, and renewable 
chemicals. 
(3) Manure resource recovery systems will save 
Federal, State, and local taxpayers money by recov-
ering the nutrients contained in organic matter from 
their source, rather than recovering the nutrients 
after they have entered landfills or waterways. 
SEC. 3. ENERGY CREDIT FOR QUALIFIED BIOGAS PROP-
ERTY AND QUALIFIED MANURE RESOURCE 
RECOVERY PROPERTY. 
(a) IN GENERAL.—Section 48(a)(3)(A) of the Inter-
nal Revenue Code of 1986 is amended by striking ‘‘or’’ 
at the end of clause (vi) and by adding at the end the 
following new clauses: 
‘‘(viii) qualified biogas property, or 
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‘‘(ix) qualified manure resource recov-
ery property,’’. 
(b) 30-PERCENT CREDIT.—Section 48(a)(2)(A)(i) of 
such Code is amended by striking ‘‘and’’ at the end of 
subclause (III), by striking ‘‘and’’ at the end of subclause 
(IV), and by adding at the end the following new sub-
clauses: 
‘‘(V) qualified biogas property, 
and 
‘‘(VI) qualified manure resource 
recovery property, and’’. 
(c) DEFINITIONS.—Section 48(c) of such Code is 
amended by adding at the end the following new para-
graphs: 
‘‘(5) QUALIFIED BIOGAS PROPERTY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
biogas property’ means property comprising a 
system which— 
‘‘(i) uses anaerobic digesters, or other 
biological, chemical, thermal, or mechanical 
processes (alone or in combination), to 
convert biomass (as defined in section 
45K(c)(3)) into a gas which consists of not 
less than 52 percent methane, and 
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‘‘(ii) captures such gas for use as a 
fuel. 
‘‘(B) INCLUSION
OF
CERTAIN
CLEANING 
AND
CONDITIONING
EQUIPMENT.—Such term 
shall include any property which cleans and 
conditions the gas referred to in subparagraph 
(A) for use as a fuel. 
‘‘(C) TERMINATION.—No credit shall be 
determined under this section with respect to 
any qualified biogas property for any period 
after December 31, 2020. 
‘‘(6) QUALIFIED MANURE RESOURCE RECOVERY 
PROPERTY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
manure resource recovery property’ means 
property comprising a system which uses phys-
ical, biological, chemical, thermal, or mechanical 
processes to recover the nutrients nitrogen and 
phosphorus from a non-treated digestate or ani-
mal manure by reducing or separating at least 
50 percent of the concentration of such nutri-
ents, excluding any reductions during the incin-
eration, storage, composting, or field application 
of the non-treated digestate or animal manure. 
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‘‘(B) INCLUSION OF CERTAIN PROCESSING 
EQUIPMENT.—Such term shall include— 
‘‘(i) any property which is used to re-
cover the nutrients referred to in subpara-
graph (A), such as— 
‘‘(I) biological reactors, 
‘‘(II) crystallizers, 
‘‘(III) 
reverse 
osmosis 
mem-
branes and other water purifiers, 
‘‘(IV) evaporators, 
‘‘(V) distillers, 
‘‘(VI) decanter centrifuges, and 
‘‘(VII) equipment that facilitates 
the process of dissolved air flotation, 
ammonia stripping, gasification, or 
ozonation, and 
‘‘(ii) any thermal drier which treats 
the nutrients recovered by the processes re-
ferred to in subparagraph (A). 
‘‘(C) TERMINATION.—No credit shall be 
determined under this section with respect to 
any qualified manure resource recovery prop-
erty for any period after December 31, 2020.’’. 
(d) DENIAL OF DOUBLE BENEFIT FOR QUALIFIED 
BIOGAS PROPERTY.—Section 45(e) of such Code is 
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amended by adding at the end the following new para-
graph: 
‘‘(12) COORDINATION
WITH
ENERGY
CREDIT 
FOR
QUALIFIED
BIOGAS
PROPERTY.—The term 
‘qualified facility’ shall not include any facility which 
produces electricity from gas produced by qualified 
biogas property (as defined in section 48(c)(5)) if a 
credit is determined under section 48 with respect to 
such property for the taxable year or any prior tax-
able year.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after December 31, 
2015, in taxable years ending after such date, under rules 
similar to the rules of section 48(m) of such Code (as in 
effect on the day before the date of the enactment of the 
Revenue Reconciliation Act of 1990). 
SEC. 4. NEW CLEAN RENEWABLE ENERGY BONDS FOR 
QUALIFIED BIOGAS PROPERTY AND QUALI-
FIED MANURE RESOURCE RECOVERY PROP-
ERTY. 
(a) IN GENERAL.—Section 54C(d)(1) of the Internal 
Revenue Code of 1986 is amended by inserting ‘‘, a quali-
fied biogas property (as defined in section 48(c)(5)), or 
a qualified manure resource recovery property (as defined 
in section 48(c)(6))’’ before ‘‘owned by’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
SEC. 5. STUDY OF BIOGAS. 
(a) IN GENERAL.—The Secretary of the Treasury 
shall enter into an agreement with the National Renewable 
Energy Laboratory to undertake a study of biogas that 
addresses the following: 
(1) The quality of biogas, including a compari-
son of biogas to natural gas and the identification 
of any components of biogas which make biogas un-
suitable for injection into existing natural gas pipe-
lines. 
(2) Methods for obtaining the highest energy 
content in biogas, including the use of co-digestion 
and identifying the optimal feed mixture. 
(3) Recommendations for the expansion of 
biogas production, including an analysis of the ex-
tent to which increasing the methane content of 
biogas would result in the greater use of biogas and 
an analysis of how the expanded use of biogas could 
help meet the growing energy needs of the United 
States. 
(b) REPORT.—Not later than 2 years after the date 
of the enactment of this Act, the Secretary shall submit 
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to Congress a report on the study conducted under sub-
section (a). 
Æ 
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