SEC. 2. CREDIT TO FARMERS TO OFFSET HIGH ENERGY 
COSTS, ENCOURAGE USE OF RENEWABLE EN-
ERGY, 
AND 
REDUCED 
PRICES 
TO 
CON-
SUMERS. 
(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 adding at the end the following new 
section: 
‘‘SEC. 45Q. FARMER’S RENEWABLE ENERGY CREDIT. 
‘‘(a) DETERMINATION OF CREDITS FOR 2008.— 
‘‘(1) IN
GENERAL.—In the case of the tax-
payer’s taxable year which includes December 31, 
2008, the farmer’s renewable energy credit deter-
mined under this section is an amount equal to the 
excessive fuel cost paid or incurred by the taxpayer 
during such taxable year for any creditable fuel used 
by the taxpayer in the trade or business of farming. 
‘‘(2) EXCESSIVE FUEL COST.—For purposes of 
this subsection— 
‘‘(A) IN
GENERAL.—The term ‘excessive 
fuel cost’ means, with respect to any creditable 
fuel, the excess (if any) of— 
‘‘(i) the amount paid or incurred by 
the taxpayer for such fuel, over 
‘‘(ii) the adjusted base price for such 
fuel. 
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‘‘(B) ADJUSTED BASE PRICE.—The term 
‘adjusted base price’ means, with respect to any 
creditable fuel, the average price for such fuel 
on September 6, 2004, for the region in which 
the taxpayer purchased such fuel (as deter-
mined by Secretary using data of the Energy 
Information Agency of the Department of En-
ergy). 
‘‘(b) DETERMINATION OF CREDITS AFTER 2008.— 
In the case of any taxable year of the taxpayer beginning 
after December 31, 2008— 
‘‘(1) IN GENERAL.—In the case of an eligible 
taxpayer, the farmer’s renewable energy credit deter-
mined under this section is an amount equal to the 
product of— 
‘‘(A) the annual fuel reduction amount, 
multiplied by 
‘‘(B) the average fuel price. 
‘‘(2) CREDIT
ELIGIBILITY
CONDITIONED
ON 
USE OF PRIOR YEAR CREDIT.—No credit shall be al-
lowed to any taxpayer under this subsection, unless 
the taxpayer demonstrates to the satisfaction of the 
Secretary that such taxpayer has used the credit al-
lowed to the taxpayer under this section for the pre-
ceding taxable year as follows: 
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‘‘(A) 50 percent of the amount of such 
credit has been used to reduce the prices to 
consumers of the agricultural commodities pro-
duced by the taxpayer in the trade or business 
of farming. 
‘‘(B) In the case of any creditable fuel 
other than electricity, 50 percent of the amount 
of such credit has been used to substitute re-
newable energy for the fossil fuels used by the 
taxpayer in the trade or business of farming. 
‘‘(C) In the case of electricity, 50 percent 
of the amount of such credit has been used to 
either— 
‘‘(i) substitute electricity produced by 
the taxpayer from renewable resources for 
the electricity purchased from the grid and 
used by the taxpayer in the trade or busi-
ness of farming, or 
‘‘(ii) decrease the amount of electricity 
used by the taxpayer in the trade or busi-
ness of farming by increasing efficiency. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) 
ANNUAL
FUEL
REDUCTION 
AMOUNT.—The term ‘annual fuel reduction 
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amount’ means, with respect to any creditable 
fuel for any taxable year, the excess of— 
‘‘(i) the amount of such creditable fuel 
used by the taxpayer in the trade or busi-
ness of farming during the preceding tax-
able year, over 
‘‘(ii) the amount of such creditable 
fuel used by the taxpayer in the trade or 
business of farming during the taxable 
year for which credit is being determined. 
‘‘(B) AVERAGE
FUEL
PRICE.—The term 
‘average fuel price’ means, with respect to any 
creditable fuel for any taxable year, the average 
price of such fuel during the calendar year pre-
ceding the calendar year in which the taxable 
year begins for the region in which the taxpayer 
purchased such fuel (as determined by Sec-
retary using data of the Energy Information 
Agency of the Department of Energy). 
‘‘(4) ELIGIBLE TAXPAYER.—The term ‘eligible 
taxpayer’ means, with respect to any taxable year, 
any taxpayer who— 
‘‘(A) was allowed a credit under this sec-
tion for the preceding taxable year, or 
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‘‘(B) was not engaged in the trade or busi-
ness of farming for any preceding taxable year 
which ended on or after December 31, 2008. 
‘‘(c) CREDITABLE FUEL.—For purposes of this sec-
tion, the term ‘creditable fuel’ means any fossil fuel and 
electricity. This section shall be applied separately with re-
spect to electricity and with respect to each type of fossil 
fuel. 
‘‘(d) TERMINATION.—No credit shall be allowed 
under this section for any taxable year beginning after De-
cember 31, 2013.’’. 
(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of such Code is 
amended by striking ‘‘plus’’ at the end of paragraph (31), 
by striking the period at the end of paragraph (32) and 
inserting ‘‘, plus’’, and by adding at the end the following 
new paragraph: 
‘‘(33) the farmer’s renewable energy credit de-
termined under section 45Q.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 45Q. Farmer’s renewable energy credit.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending on or after 
December 31, 2008. 
Æ 
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