I
107TH CONGRESS
1ST SESSION
H. R. 2000
To encourage the use of agricultural products in producing renewable energy.
IN THE HOUSE OF REPRESENTATIVES
MAY 24, 2001
Mr. NUSSLE introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committees on Agri-
culture and Government Reform, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To encourage the use of agricultural products in producing
renewable energy.
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 ‘‘Renewable Energy
from Agricultural Products (REAP) Act’’.
fied facility’ means any facility owned by the
taxpayer which is originally placed in service be-
fore January 1, 2007.
‘‘(E) SPECIAL RULES.—In the case of a
qualified facility described in subparagraph
(B)(ii) or (D)—
‘‘(i) the 10-year period referred to in
subsection (a) shall be treated as beginning
no earlier than the date of the enactment
of this subparagraph,
‘‘(ii) subsection (b)(3) shall not apply
to any such facility originally placed in
service before January 1, 1997, and
‘‘(iii) if such a facility is leased and
the operator thereof is the lessee, such les-
see (and not the owner) shall be treated
for purposes of this section as owning such
facility.’’.
(b) BIOMASS FACILITIES.—
(1) IN GENERAL.—Section 45(c)(1) of such Act
(defining qualified energy resources) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (B),
(B) by striking the period at the end of
subparagraph (C) and inserting ‘‘, and’’, and
(C) by adding at the end the following new
subparagraph:
‘‘(D) biomass (other than closed-loop bio-
mass).’’.
(2) BIOMASS DEFINED.—Section 45(c) of such
Code (relating to definitions) is amended by adding
at the end the following new paragraph:
‘‘(5) BIOMASS.—The term ‘biomass’ means any
solid, nonhazardous, cellulosic waste material which
is segregated from other waste materials and which
is derived from—
‘‘(A) any of the following forest-related re-
sources: mill residues, precommercial thinnings,
slash, and brush, but not including old-growth
timber,
‘‘(B) solid wood waste materials, including
waste pallets, crates, dunnage, manufacturing
and construction wood wastes (other than pres-
sure-treated, chemically treated, or painted
wood wastes), and landscape or right-of-way
tree trimmings, but not including municipal
solid waste (garbage), gas derived from the bio-
degradation of solid waste, or paper that is
commonly recycled, or
‘‘(C) agriculture sources, including orchard
tree crops, vineyard, grain, legumes, sugar, and
other crop by-products or residues.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to electricity sold after the date
of the enactment of this Act.
SEC. 3. CREDIT FOR ELECTRICITY PRODUCED FROM AGRI-
CULTURAL AND ANIMAL WASTE.
(a) IN GENERAL.—Paragraph (1) of section 45(c) of
the Internal Revenue Code of 1986, as amended by section
2, is amended by striking ‘‘and’’ at the end of subpara-
graph (C), by striking the period at the end of subpara-
graph (D) and inserting ‘‘, and’’, and by adding at the
end the following new subparagraph:
‘‘(E) agricultural and animal waste.’’.
(b) AGRICULTURAL AND ANIMAL WASTE.—Section
45(c) of such Code (relating to definitions) is amended
by adding at the end the following new paragraph:
‘‘(6) AGRICULTURAL
AND
ANIMAL
WASTE.—
The term ‘agricultural and animal waste’ means all
waste heat, steam, and fuels produced from the con-
version of agricultural and animal wastes, including
byproducts, packaging, and any materials associated
with the processing, feeding, selling, transporting,
and disposal of agricultural and animal products or
wastes, including wood shavings, straw, rice hulls,
and other bedding for the disposition of manure.’’.
(c) AGRICULTURAL
AND ANIMAL WASTE FACILI-
TIES.—Paragraph (3) of section 45(c) of such Code is
amended by adding at the end the following new subpara-
graph:
‘‘(F) AGRICULTURAL AND ANIMAL WASTE
FACILITIES.—In the case of a facility using ag-
ricultural and animal waste to produce elec-
tricity, the term ‘qualified facility’ means any
facility owned by the taxpayer which is origi-
nally placed in service after December 31,
1992, and before January 1, 2005.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to electricity sold after the date
of the enactment of this Act.
SEC. 4. REDUCTION OF MOTOR FUEL EXCISE TAX ON BIO-
DIESEL MIXTURES.
(a) IN GENERAL.—Section 4081 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the
following new subsection:
‘‘(f) BIODIESEL MIXTURES.—Under regulations pre-
scribed by the Secretary—
‘‘(1) IN GENERAL.—The rate of tax under sub-
section (a) shall be 3 cents per gallon less than the
otherwise applicable rate in the case of the removal
or entry of a qualified biodiesel mixture.
‘‘(2) TAX PRIOR TO MIXING.—In the case of the
removal or entry of diesel fuel for use in producing
at the time of such removal or entry a qualified bio-
diesel mixture, the rate of tax under subsection (a)
shall be the 3.06 cents per gallon less than the oth-
erwise applicable rate.
‘‘(3) QUALIFIED
BIODIESEL
MIXTURE.—For
purposes of this subsection, the term ‘qualified bio-
diesel mixture’ means any mixture of diesel fuel and
biodiesel (as defined in section 312(f) of the Energy
Policy Act of 1992) if at least 2 percent of such
mixture is biodiesel (as so defined).
‘‘(5) CERTAIN RULES TO APPLY.—Rules similar
to the rules of paragraphs (6) and (7) of subsection
(c) shall apply for purposes of this subsection.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 4041 of such Code is amended by
adding at the end the following new subsection:
‘‘(n) BIODIESEL MIXTURES.—Under regulations pre-
scribed by the Secretary, in the case of the sale or use
of a qualified biodiesel mixture (as defined in section
4081(f)), the rates under paragraphs (1) and (2) of sub-
section (a) shall be 3 cents per gallon less than the other-
wise applicable rates.’’.
(2) Section 6427 of such Code is amended by
redesignating subsection (p) as subsection (q) and
by inserting after subsection (o) the following new
subsection:
‘‘(p) BIODIESEL MIXTURES.—Except as provided in
subsection (k), if any diesel fuel on which tax was imposed
by section 4081 at a rate not determined under section
4081(f) is used by any person in producing a qualified
biodiesel mixture (as defined in section 4081(f)) which is
sold or used in such person’s trade or business, the Sec-
retary shall pay (without interest) to such person an
amount equal to 3.06 cents per gallon with respect to such
fuel.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 2002.
(d) HIGHWAY TRUST FUND HELD HARMLESS.—
There are hereby transferred (from time to time) from the
funds of the Commodity Credit Corporation amounts
equivalent to the reductions that would occur (but for this
subsection) in the receipts of the Highway Trust Fund
by reason of the amendments made by this section.