Agriculture Environmental Stewardship Act of 2021
Bill: S.2461 | Sponsor: Sen. Brown, Sherrod (D-OH)
Policy area: Taxation

Summary:
Agriculture Environmental Stewardship Act of 2021
This bill allows energy tax credits through 2023 for investments in (1) qualified biogas property, or (2) qualified manure resource recovery property.
Qualified biogas property comprises a system that (1) uses anaerobic digesters or other specified processes to convert biomass into a gas which is at least 52% methane, and (2) captures the gas for use as a fuel. The term includes property that cleans and conditions the gas for use as a fuel.
Qualified manure resource recovery property comprises a system that uses specified processes to recover the nutrients nitrogen and phosphorus from a non-treated digestate or animal manure by reducing or separating at least 50% of the nutrients, excluding any reductions during the incineration, storage, composting, or field application of the non-treated digestate or animal manure. The term also includes certain processing equipment.
The Department of the Treasury must enter into an agreement with the National Renewable Energy Laboratory for a study of biogas and report to Congress on the study.

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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Agriculture Environmental 
Stewardship Act of 2021''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Incentives and encouragement for the conservation and 
        appropriate handling of nutrients contained in organic matter 
        are necessary.
            (2) Biogas systems will save Federal, State, and local 
        taxpayers money by converting waste into useful 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 recovering 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 PROPERTY AND QUALIFIED 
              MANURE RESOURCE RECOVERY PROPERTY.

    (a) In General.--Section 48(a)(3)(A) of the Internal 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 recovery 
                        property,''.
    (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 subclauses:
                                    ``(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 paragraphs:
            ``(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.
                    ``(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 physical, biological, chemical, 
                thermal, or mechanical processes to recover the 
                nutrients nitrogen and phosphorus from a non-treated 
                digestate or animal manure by reducing or separating at 
                least 50 percent of the concentration of such 
                nutrients, excluding any reductions during the 
                incineration, storage, composting, or field application 
                of the non-treated digestate or animal manure.
                    ``(B) Inclusion of certain processing equipment.--
                Such term shall include--
                            ``(i) any property which is used to recover 
                        the nutrients referred to in subparagraph (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, gasification, or ozonation, 
                                and
                            ``(ii) any thermal drier which treats the 
                        nutrients recovered by the processes referred 
                        to in subparagraph (A).
                    ``(C) Termination.--No credit shall be determined 
                under this section with respect to any qualified manure 
                resource recovery property for any period after 
                December 31, 2023.''.
    (d) Denial of Double Benefit for Qualified Biogas Property.--
Section 45(e) of such Code is amended by adding at the end the 
following new paragraph:
            ``(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 taxable 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. 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 comparison of biogas 
        to natural gas and the identification of any components of 
        biogas which make biogas unsuitable for injection into existing 
        natural gas pipelines.
            (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 extent 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 recovered 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 subsection (a).
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