Renewable Natural Gas Incentive Act of 2022
Bill: S.4568 | Sponsor: Sen. Burr, Richard (R-NC)
Policy area: Taxation

Summary:
Renewable Natural Gas Incentive Act of 2022
This bill allows a tax credit through 2032 equal to $1 times the number of gallons of renewable natural gas or gasoline gallon equivalent of nonliquid renewable natural gas for use as a fuel in a motor vehicle or motorboat or for use as a fuel in aviation.

To amend the Internal Revenue Code of 1986 to promote the increased use 
of renewable natural gas, to reduce greenhouse gas emissions and other 
 harmful transportation-related emissions that contribute to poor air 
    quality, and to increase job creation and economic opportunity 
                     throughout the United States.

    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 ``Renewable Natural Gas Incentive Act 
of 2022''.

SEC. 2. INCREASED CREDIT FOR RENEWABLE NATURAL GAS.

    (a) In General.--Section 6426 of the Internal Revenue Code of 1986 
is amended--
            (1) in subsection (a)(2), by inserting ``and (k)'', and
            (2) by adding at the end the following new subsection:
    ``(k) Renewable Natural Gas Fuel Credit.--
            ``(1) In general.--For purposes of this section, the 
        renewable natural gas fuel credit is the product of $1.00 and 
        the number of gallons of renewable natural gas or gasoline 
        gallon equivalents of a nonliquid renewable natural gas sold by 
        the taxpayer for use as a fuel in a motor vehicle or motorboat, 
        sold by the taxpayer for use as a fuel in aviation, or so used 
        by the taxpayer.
            ``(2) Renewable natural gas.--For purposes of this section, 
        the term `renewable natural gas' means compressed or liquefied 
        gas derived from biomass (as defined in section 45K(c)(3))--
                    ``(A) which produced by a person registered under 
                section 4101(a), and
                    ``(B) with respect to which the producer has made a 
                certification described in paragraph (4).
            ``(3) Treatment of blended renewable natural gas.--
                    ``(A) In general.--Under regulations prescribed by 
                the Secretary, a sale of blended renewable natural gas 
                shall be treated as a sale of renewable natural gas 
                fuel if--
                            ``(i) at the time the renewable natural gas 
                        was blended with other compressed or liquefied 
                        natural gas, the taxpayer had a contract with 
                        the registered producer of such renewable 
                        natural gas for the sale of such gas for use as 
                        a fuel in a motor vehicle or motorboat, or for 
                        use as a fuel in aviation,
                            ``(ii) such contract was entered into 
                        before the sale of the blended renewable 
                        natural gas and specifies the number of gallons 
                        of renewable natural gas provided for such 
                        purposes and the period for which such contract 
                        is in effect, and
                            ``(iii) the registered producer of such 
                        fuel provides to the taxpayer the certification 
                        described in paragraph (4).
                    ``(B) Limitation.--The amount of blended renewable 
                natural gas treated as renewable natural gas under 
                subparagraph (A) for any period shall not exceed the 
                number of gallons of renewable natural gas specified 
                under subparagraph (A)(ii) and certified by the 
                producer under paragraph (4) for such period.
                    ``(C) Blended renewable natural gas.--For purposes 
                of this subsection, the term `blended renewable natural 
                gas' means compressed or liquefied natural gas which 
                consists of both renewable natural gas and other 
                compressed or liquefied natural gas.
            ``(4) Certification.--A certification is described in this 
        subparagraph if such certification--
                    ``(A) identifies the product produced and the 
                gallon equivalent of fuel acquired by the taxpayer for 
                a purpose described in paragraph (1), and
                    ``(B) is provided such form and manner as 
                prescribed by the Secretary.
            ``(5) Gasoline gallon equivalent.--For purposes of this 
        subsection, the term `gasoline gallon equivalent' means, with 
        respect to any nonliquid renewable natural gas, the amount of 
        such fuel having a Btu content of 124,800 (higher heating 
        value).
            ``(6) Termination.--This subsection shall not apply to any 
        sale or use for any period after December 31, 2032.''.
    (b) Application of Other Rules.--
            (1) Registration.--The last sentence of section 6426(a) of 
        the Internal Revenue Code of 1986 is amended by striking 
        ``subsections (d) and (e)'' and inserting ``subsections (d), 
        (e), and (k)''.
            (2) Denial of double benefit.--Section 6426(h) of such Code 
        is amended by striking ``subsection (d) or (e)'' and inserting 
        ``subsection (d), (e), or (k)''.
            (3) Fuel must be connected to the united states.--Section 
        6426(i) of such Code is amended by inserting after paragraph 
        (2) the following new paragraph:
            ``(3) Renewable natural gas.--No credit shall be determined 
        under this section with respect to any renewable natural gas 
        which is produced outside the United States for use as a fuel 
        outside the United States.''.
            (4) Energy equivalency.--Section 6426(j) of such Code is 
        amended--
                    (A) by inserting ``or renewable natural gas,'' 
                after ``alternative fuel'', and
                    (B) by inserting ``or gas'' after ``such a fuel''.
    (c) Payments.--
            (1) In general.--Section 6427(e) of the Internal Revenue 
        Code of 1986 is amended by redesignating paragraphs (3) through 
        (6) as paragraphs (4) through (7), respectively, and by 
        inserting after paragraph (2) the following new paragraph:
            ``(3) Renewable natural gas.--If any person sells or uses 
        renewable natural gas (as defined in section 6426(k)(2)) for a 
        purpose described in section 6426(k)(1) in such person's trade 
        or business, the Secretary shall pay (without interest) to such 
        person an amount equal to the renewable natural gas fuel credit 
        with respect to such fuel.''.
            (2) Termination.--Paragraph (7) of section 6427(e) of such 
        Code, as redesignated by paragraph (1), is amended by striking 
        ``and'' at the end of subparagraph (C), by striking the period 
        at the end of subparagraph (D) and inserting ``, and'', and by 
        adding at the end the following new subparagraph:
                    ``(E) any renewable natural gas (as defined in 
                section 6426(k)(2)) sold or used after December 31, 
                2032.''.
            (3) Conforming amendments.--
                    (A) Paragraph (4) of section 6427(e) of such Code, 
                as redesignated by paragraph (1), is amended--
                            (i) by striking ``paragraph (1) or (2)'' 
                        and inserting ``paragraph (1), (2), or (3)'', 
                        and
                            (ii) by striking ``any mixture or 
                        alternative fuel'' and inserting ``any mixture, 
                        alternative fuel, or renewable natural gas''.
                    (B) Paragraph (5) of section 6427(e) of such Code, 
                as redesignated by paragraph (1), is amended by 
                striking ``alternative fuel credit or alternative fuel 
                mixture credit'' and inserting ``alternative fuel 
                credit, alternative fuel mixture credit, or renewable 
                natural gas fuel credit''.
                    (C) Paragraph (6) of section 6427(e) of such Code, 
                as redesignated by paragraph (1), is amended--
                            (i) by striking ``paragraph (1) or (2)'' 
                        and inserting ``paragraph (1), (2), or (3)'', 
                        and
                            (ii) by striking ``any mixture or 
                        alternative fuel'' and inserting ``any mixture, 
                        alternative fuel, or renewable natural gas''.
    (d) Registration.--Section 4101(a) of such Code is amended--
            (1) by striking ``and'' before ``every person producing 
        second generation biofuel'', and
            (2) by inserting ``, and every person producing renewable 
        natural gas (as defined in section 6426(k)(2)'' after ``(as 
        defined in section 40(b)(6)(E))''.
    (e) Effective Date.--The amendments made by this section shall 
apply to fuel sold or used after December 31, 2022.
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