I 
117TH CONGRESS 
1ST SESSION H. R. 3939 
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 renewable energy bonds to finance 
qualified biogas property, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 16, 2021 
Mr. KIND (for himself and Mr. REED) 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 subse-
quently 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 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, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Agriculture Environ-
mental Stewardship Act of 2021’’. 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
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 (vii) and by adding at the end the 
following new clauses: 
‘‘(ix) qualified biogas property, or 
‘‘(x) qualified manure resource recov-
ery property,’’. 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
(b) 30-PERCENT CREDIT.—Section 48(a)(2)(A)(i) of 
such Code is amended by striking ‘‘and’’ at the end of 
subclause (IV), by striking ‘‘and’’ at the end of subclause 
(V), and by adding at the end the following new sub-
clauses: 
‘‘(VI) qualified biogas property, 
and 
‘‘(VII) 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: 
‘‘(6) 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 
‘‘(ii) captures such gas for use as a 
fuel. 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
‘‘(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, 2023. 
‘‘(7) 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. 
‘‘(B) INCLUSION OF CERTAIN PROCESSING 
EQUIPMENT.—Such term shall include— 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
‘‘(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) water filtration membrane 
systems and other water purifiers, 
‘‘(IV) evaporators, 
‘‘(V) distillers, 
‘‘(VI) decanter centrifuges, and 
‘‘(VII) equipment that facilitates 
the 
process 
of 
removing 
and 
dewatering suspended and dissolved 
solids, 
ammonia 
stripping, 
gasifi-
cation, 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, 2023.’’. 
(d) DENIAL OF DOUBLE BENEFIT FOR QUALIFIED 
BIOGAS PROPERTY.—Section 45(e) of such Code is 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
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)(6)) 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, 
2020, 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. RENEWABLE ENERGY BONDS RELATING TO BIOGAS 
PROPERTY AND MANURE RESOURCE RECOV-
ERY PROPERTY. 
(a) IN GENERAL.—Part IV of subchapter A of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by adding at the end the following: 
‘‘Subpart H—Nonrefundable Credit to Holders of 
Certain Bonds 
‘‘Sec. 54. Credit to holders of qualified renewable energy bonds. 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6211
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
‘‘SEC. 54. CREDIT TO HOLDERS OF QUALIFIED RENEWABLE 
ENERGY BONDS. 
‘‘(a) ALLOWANCE OF CREDIT.—If a taxpayer holds 
a qualified renewable energy bond on one or more credit 
allowance dates of the bond during any taxable year, there 
shall be allowed as a credit against the tax imposed by 
this chapter for the taxable year an amount equal to 70 
percent of the sum of the credits determined under sub-
section (b) with respect to such dates. 
‘‘(b) AMOUNT OF CREDIT.— 
‘‘(1) IN GENERAL.—The amount of the credit 
determined under this subsection with respect to any 
credit allowance date for a qualified renewable en-
ergy bond is 25 percent of the annual credit deter-
mined with respect to such bond. 
‘‘(2) ANNUAL CREDIT.—The annual credit de-
termined with respect to any qualified renewable en-
ergy bond is the product of— 
‘‘(A) the applicable credit rate, multiplied 
by 
‘‘(B) the outstanding face amount of the 
bond. 
‘‘(3) APPLICABLE CREDIT RATE.—For purposes 
of paragraph (2), the applicable credit rate is the 
rate which the Secretary estimates will permit the 
issuance of qualified renewable energy bonds with a 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
specified maturity or redemption date without dis-
count and without interest cost to the qualified 
issuer. The applicable credit rate with respect to any 
qualified renewable energy bond shall be determined 
as of the first day on which there is a binding, writ-
ten contract for the sale or exchange of the bond. 
‘‘(4) SPECIAL RULE FOR ISSUANCE AND RE-
DEMPTION.—In the case of a bond which is issued 
during the 3-month period ending on a credit allow-
ance date, the amount of the credit determined 
under this subsection with respect to such credit al-
lowance date shall be a ratable portion of the credit 
otherwise determined based on the portion of the 3- 
month period during which the bond is outstanding. 
A similar rule shall apply when the bond is redeemed 
or matures. 
‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.— 
‘‘(1) IN GENERAL.—The credit allowed under 
subsection (a) for any taxable year shall not exceed 
the excess of— 
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
‘‘(B) the sum of the credits allowable 
under this part (other than subpart C and this 
subpart). 
‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) exceeds the 
limitation imposed by paragraph (1) for such taxable 
year, such excess shall be carried to the succeeding 
taxable year and added to the credit allowable under 
subsection (a) for such taxable year (determined be-
fore the application of paragraph (1) for such suc-
ceeding taxable year). 
‘‘(d) QUALIFIED RENEWABLE ENERGY BONDS.—For 
purposes of this subpart— 
‘‘(1) IN GENERAL.—The term ‘qualified renew-
able energy bonds’ means any bond issued as part 
of an issue if— 
‘‘(A) the bond is issued by a qualified 
issuer pursuant to an allocation by the Sec-
retary to such issuer of a portion of the na-
tional renewable energy bond limitation under 
paragraph (2), 
‘‘(B) 100 percent of the available project 
proceeds of such issue are to be used for capital 
expenditures incurred by a governmental body, 
public power provider, or cooperative electric 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
‘‘(ii) ALLOCATION
AMONG
GOVERN-
MENTAL BODIES AND COOPERATIVE ELEC-
TRIC
COMPANIES.—The Secretary shall 
make allocations of the amount of the na-
tional renewable energy bond limitation de-
scribed in subparagraphs (B)(ii) and 
(B)(iii) among projects of governmental 
bodies and cooperative electric companies, 
respectively, in such manner as the Sec-
retary determines appropriate. 
‘‘(e) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED ISSUER.—The term ‘qualified 
issuer’ means a public power provider, a cooperative 
electric company, a governmental body, a renewable 
energy bond lender, or a not-for-profit electric utility 
which has received a loan or loan guarantee under 
the Rural Electrification Act. 
‘‘(2) PUBLIC
POWER
PROVIDER.—The term 
‘public power provider’ means a State utility with a 
service obligation, as such terms are defined in sec-
tion 217 of the Federal Power Act (as in effect on 
the date of the enactment of this paragraph). 
‘‘(3) GOVERNMENTAL BODY.—The term ‘gov-
ernmental body’ means any State or Indian tribal 
government, or any political subdivision thereof. 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
‘‘(4) COOPERATIVE ELECTRIC COMPANY.—The 
term ‘cooperative electric company’ means a mutual 
or cooperative electric company described in section 
501(c)(12) or section 1381(a)(2)(C). 
‘‘(5) RENEWABLE
ENERGY
BOND
LENDER.— 
The term ‘renewable energy bond lender’ means a 
lender which is a cooperative which is owned by, or 
has outstanding loans to, 100 or more cooperative 
electric companies and is in existence on February 
1, 2002, and shall include any affiliated entity which 
is controlled by such lender. 
‘‘(f) OTHER DEFINITIONS.—For purposes of this 
subchapter— 
‘‘(1) CREDIT
ALLOWANCE
DATE.—The term 
‘credit allowance date’ means— 
‘‘(A) March 15, 
‘‘(B) June 15, 
‘‘(C) September 15, and 
‘‘(D) December 15. 
Such term includes the last day on which the bond 
is outstanding. 
‘‘(2) BOND.—The term ‘bond’ includes any ob-
ligation. 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
‘‘(3) STATE.—The term ‘State’ includes the 
District of Columbia and any possession of the 
United States. 
‘‘(4) AVAILABLE
PROJECT
PROCEEDS.—The 
term ‘available project proceeds’ means— 
‘‘(A) the excess of— 
‘‘(i) the proceeds from the sale of an 
issue, over 
‘‘(ii) the issuance costs financed by 
the issue (to the extent that such costs do 
not exceed 2 percent of such proceeds), 
and 
‘‘(B) the proceeds from any investment of 
the excess described in subparagraph (A). 
‘‘(g) CREDIT TREATED AS INTEREST.—For purposes 
of this subtitle, the credit determined under subsection (a) 
shall be treated as interest which is includible in gross in-
come. 
‘‘(h) S CORPORATIONS AND PARTNERSHIPS.—In the 
case of a renewable energy bond held by an S corporation 
or partnership, the allocation of the credit allowed by this 
section to the shareholders of such corporation or partners 
of such partnership shall be treated as a distribution. 
‘‘(i) BONDS HELD BY REAL ESTATE INVESTMENT 
TRUSTS.—If any qualified renewable energy bond is held 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
by a real estate investment trust, the credit determined 
under subsection (a) shall be allowed to beneficiaries of 
such trust (and any gross income included under sub-
section (f) with respect to such credit shall be distributed 
to such beneficiaries) under procedures prescribed by the 
Secretary. 
‘‘(j) CREDITS MAY BE STRIPPED.—Under regula-
tions prescribed by the Secretary— 
‘‘(1) IN GENERAL.—There may be a separation 
(including at issuance) of the ownership of a quali-
fied renewable energy bond and the entitlement to 
the credit under this section with respect to such 
bond. In case of any such separation, the credit 
under this section shall be allowed to the person who 
on the credit allowance date holds the instrument ev-
idencing the entitlement to the credit and not to the 
holder of the bond. 
‘‘(2) CERTAIN RULES TO APPLY.—In the case 
of a separation described in paragraph (1), the rules 
of section 1286 shall apply to the qualified renew-
able energy bond as if it were a stripped bond and 
to the credit under this section as if it were a 
stripped coupon.’’. 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
(b) PAYMENTS TO ISSUERS.—Subchapter B of chap-
ter 65 of such Code is amended by adding at the end the 
following: 
‘‘SEC. 6431. CREDIT FOR QUALIFIED RENEWABLE ENERGY 
BONDS ALLOWED TO ISSUER. 
‘‘(a) IN GENERAL.—The issuer of a qualified renew-
able energy bond (as defined in section 54(d)) shall be al-
lowed a credit with respect to each interest payment under 
such bond which shall be payable by the Secretary as pro-
vided in subsection (b). 
‘‘(b) PAYMENT OF CREDIT.—The Secretary shall pay 
(contemporaneously with each interest payment date 
under such bond) to the issuer of such bond (or to any 
person who makes such interest payments on behalf of the 
issuer) 35 percent of the interest payable under such bond 
on such date. 
‘‘(c) APPLICATION OF ARBITRAGE RULES.—For pur-
poses of section 148, the yield on such bonds shall be re-
duced by the credit allowed under this section. 
‘‘(d) INTEREST PAYMENT DATE.—For purposes of 
this subsection, the term ‘interest payment date’ means 
each date on which interest is payable by the issuer under 
the terms of the bond.’’. 
(c) CONFORMING AMENDMENTS.— 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
(1) The table of subparts for part IV of sub-
chapter A of chapter 1 of such Code is amended by 
adding at the end the following new item: 
‘‘SUBPART H. NONREFUNDABLE CREDIT TO HOLDERS OF CERTAIN BONDS’’. 
(2) The table of sections for subchapter B of 
chapter 65 of such Code is amended by adding at 
the end the following new item: 
‘‘Sec. 6431. Credit for qualified renewable energy bonds allowed to issuer.’’. 
(3) Section 6211(b)(4)(A) of such Code is 
amended by inserting ‘‘6431,’’ after ‘‘6428B,’’. 
(4) Section 6401(b)(1) of such Code is amend-
ed by striking ‘‘and G’’ and inserting ‘‘G, and H’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after the date of 
the enactment of this Act. 
SEC. 5. STUDY OF BIOGAS AND NUTRIENT REUSE. 
(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. 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS
(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. 
(4) Methods for productive use of nutrients re-
covered from qualified manure resource recovery 
property that benefits the agricultural economy. 
(b) REPORT.—Not later than 2 years after the date 
of the enactment of this Act, the Secretary shall submit 
to Congress a report on the study conducted under sub-
section (a). 
Æ 
VerDate Sep 11 2014 
22:28 Jul 12, 2021
Jkt 019200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6301
E:\BILLS\H3939.IH
H3939
khammond on DSKJM1Z7X2PROD with BILLS