Title: Capitalizing on American Methane Act of 2017
Policy area: Taxation

Summary:
Capitalizing on American Methane Act of 2017
This bill amends the Internal Revenue Code to: (1) include in the tax credit for investment in a qualifying gasification project any qualified methane conversion technology, and (2) allow an alternative fuel excise tax credit for liquid fuel produced through qualified methane conversion technology at a facility the construction of which begins before October 1, 2027. The bill defines "qualified methane conversion technology" as a process for the molecular conversion of a fuel consisting principally of methane into hydrocarbons and the use of such hydrocarbons to replace or reduce the quantity of petroleum present in motor vehicle fuel and for the production of chemicals.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 230 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                 S. 230

 To amend the Internal Revenue Code of 1986 to allow a credit against 
    income tax for facilities using a qualified methane conversion 
       technology to provide transportation fuels and chemicals.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 24, 2017

  Mr. Cassidy introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow a credit against 
    income tax for facilities using a qualified methane conversion 
       technology to provide transportation fuels and chemicals.

    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 ``Capitalizing on American Methane Act 
of 2017''.

SEC. 2. INCENTIVES FOR INNOVATIVE FUEL PRODUCTION THROUGH QUALIFIED 
              METHANE CONVERSION TECHNOLOGY.

    (a) Inclusion of Qualified Methane Conversion Technology in 
Gasification Project Credit.--
            (1) In general.--Paragraph (2) of section 48B(c) of the 
        Internal Revenue Code of 1986 is amended to read as follows:
            ``(2) Gasification technology.--The term `gasification 
        technology' means--
                    ``(A) any process which converts a solid or liquid 
                product from coal, petroleum residue, biomass, or other 
                materials which are recovered for their energy or 
                feedstock value into a synthesis gas composed primarily 
                of carbon monoxide and hydrogen for direct use or 
                subsequent chemical or physical conversion, and
                    ``(B) any qualified methane conversion 
                technology.''.
            (2) Qualified methane conversion technology.--Subsection 
        (c) of section 48B of such Code is amended by adding at the end 
        the following new paragraph:
            ``(9) Qualified methane conversion technology.--
                    ``(A) In general.--The term `qualified methane 
                conversion technology' means a process consisting of 
                the molecular conversion of a fuel consisting 
                principally of methane into hydrocarbons, and the 
                subsequent use of such hydrocarbons, if such 
                hydrocarbons are principally intended to be used--
                            ``(i) to replace or reduce the quantity of 
                        petroleum present in a fuel used in motor 
                        vehicles, motor vehicle engines, nonroad 
                        vehicles, nonroad engines, or aircraft if--
                                    ``(I) the lifecycle greenhouse gas 
                                emissions associated with the 
                                production and combustion is, on an 
                                ongoing basis, not more than such 
                                emissions from the equivalent 
                                conventional fuel produced from 
                                conventional petroleum sources,
                                    ``(II) the sulfur concentration is 
                                not more than 2 parts per million, and
                                    ``(III) such production is at a 
                                facility which, during the taxable 
                                year, has an annual total production 
                                capacity of not more than 150,000,000 
                                gallons of liquid transportation fuel, 
                                or
                            ``(ii) for the production of chemicals 
                        (within the meaning of paragraph (7)(A)).
                    ``(B) Primary purpose of facility.--If a facility 
                uses qualified methane conversion technology to produce 
                both fuels and chemicals, the requirements described in 
                subparagraph (A)(i) shall apply only if the primary use 
                of the facility is to produce fuels.
                    ``(C) Exclusion.--The term `qualified methane 
                conversion technology' does not include technology that 
                is part of a facility the construction of which begins 
                after September 30, 2027.''.
            (3) Increase in credit available for methane conversion 
        projects.--
                    (A) In general.--Paragraph (1) of section 48B(d) of 
                such Code is amended by striking ``plus'' at the end of 
                subparagraph (A), by striking the period at the end of 
                subparagraph (B) and inserting ``, plus'', and by 
                adding at the end the following new subparagraph:
                    ``(C) $500,000,000 for qualifying gasification 
                projects that rely primarily on qualified methane 
                conversion technology.
        No qualifying gasification project shall receive more than 
        $100,000,000 under the program.''.
                    (B) Period of issuance.--Paragraph (2) of section 
                48B(d) of such Code is amended to read as follows:
            ``(2) Period of issuance.--
                    ``(A) In general.--A certificate of eligibility 
                under subparagraphs (A) and (B) of paragraph (1) may be 
                issued only before October 1, 2027.
                    ``(B) Qualified methane conversion technology.--A 
                certificate of eligibility under subparagraph (C) of 
                paragraph (1) may be issued only during the 10-fiscal-
                year period beginning on the first October 1 which is 
                on or after the date of the enactment of this 
                paragraph.''.
                    (C) Selection priorities.--Paragraph (4) of section 
                48B(d) of such Code is amended to read as follows:
            ``(4) Selection priorities.--
                    ``(A) In general.--In determining which qualifying 
                gasification projects, other than projects using 
                qualified methane conversion technology, to certify 
                under this section, the Secretary shall--
                            ``(i) give highest priority to projects 
                        with the greatest separation and sequestration 
                        percentage of total carbon dioxide emissions, 
                        and
                            ``(ii) give high priority to applicant 
                        participants who have a research partnership 
                        with an eligible educational institution (as 
                        defined in section 529(e)(5)).
                    ``(B) Chemicals projects using qualified methane 
                conversion technology.--In determining which qualifying 
                gasification projects that produce chemicals using 
                qualified methane conversion technology to certify 
                under this section, the Secretary shall give priority 
                to projects involving a production process that has 
                significant environmental benefits over the production 
                of the same chemical from petroleum products.''.
    (b) Inclusion of Qualified Methane Conversion Technology in 
Alternative Fuel Credit.--Paragraph (2) of section 6426(d) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of subparagraph (F), by striking the period at the end of subparagraph 
(G) and inserting ``, and'', and by adding at the end the following new 
subparagraph:
                    ``(H) liquid fuel produced through qualified 
                methane conversion technology (as defined in section 
                48B(c)(9)(A)) at a facility the construction of which 
                begins before October 1, 2027.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
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