Agriculture Environmental Stewardship Act of 2019

II 116TH CONGRESS 1ST SESSION S. 2542 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. IN THE SENATE OF THE UNITED STATES SEPTEMBER 24, 2019 Mr. BROWN (for himself and Mr. ROBERTS) 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 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Agriculture Environ- 4 mental Stewardship Act of 2019’’. 5 SEC. 2. FINDINGS. 6 Congress finds the following: 7 VerDate Sep 11 2014 23:06 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2542.IS S2542 kjohnson on DSK79L0C42 with BILLS 2 •S 2542 IS (1) Incentives and encouragement for the con- 1 servation and appropriate handling of nutrients con- 2 tained in organic matter are necessary. 3 (2) Biogas systems will save Federal, State, and 4 local taxpayers money by converting waste into use- 5 ful products, such as fuel, fertilizer, thermal heat, 6 feedstock for hydrogen fuel cells, and renewable 7 chemicals. 8 (3) Manure resource recovery systems will save 9 Federal, State, and local taxpayers money by recov- 10 ering the nutrients contained in organic matter from 11 their source, rather than recovering the nutrients 12 after they have entered landfills or waterways. 13 SEC. 3. ENERGY CREDIT FOR QUALIFIED BIOGAS PROP- 14 ERTY AND QUALIFIED MANURE RESOURCE 15 RECOVERY PROPERTY. 16 (a) IN GENERAL.—Section 48(a)(3)(A) of the Inter- 17 nal Revenue Code of 1986 is amended by striking ‘‘or’’ 18 at the end of clause (vi) and by adding at the end the 19 following new clauses: 20 ‘‘(viii) qualified biogas property, or 21 ‘‘(ix) qualified manure resource recov- 22 ery property,’’. 23 (b) 30-PERCENT CREDIT.—Section 48(a)(2)(A)(i) of 24 such Code is amended by striking ‘‘and’’ at the end of 25 VerDate Sep 11 2014 23:06 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2542.IS S2542 kjohnson on DSK79L0C42 with BILLS 3 •S 2542 IS subclause (III), by striking ‘‘and’’ at the end of subclause 1 (IV), and by adding at the end the following new sub- 2 clauses: 3 ‘‘(V) qualified biogas property, 4 and 5 ‘‘(VI) qualified manure resource 6 recovery property, and’’. 7 (c) DEFINITIONS.—Section 48(c) of such Code is 8 amended by adding at the end the following new para- 9 graphs: 10 ‘‘(5) QUALIFIED BIOGAS PROPERTY.— 11 ‘‘(A) IN GENERAL.—The term ‘qualified 12 biogas property’ means property comprising a 13 system which— 14 ‘‘(i) uses anaerobic digesters, or other 15 biological, chemical, thermal, or mechanical 16 processes (alone or in combination), to 17 convert biomass (as defined in section 18 45K(c)(3)) into a gas which consists of not 19 less than 52 percent methane, and 20 ‘‘(ii) captures such gas for use as a 21 fuel. 22 ‘‘(B) INCLUSION OF CERTAIN CLEANING 23 AND CONDITIONING EQUIPMENT.—Such term 24 shall include any property which cleans and 25 VerDate Sep 11 2014 23:06 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2542.IS S2542 kjohnson on DSK79L0C42 with BILLS 4 •S 2542 IS conditions the gas referred to in subparagraph 1 (A) for use as a fuel. 2 ‘‘(C) TERMINATION.—No credit shall be 3 determined under this section with respect to 4 any qualified biogas property for any period 5 after December 31, 2021. 6 ‘‘(6) QUALIFIED MANURE RESOURCE RECOVERY 7 PROPERTY.— 8 ‘‘(A) IN GENERAL.—The term ‘qualified 9 manure resource recovery property’ means 10 property comprising a system which uses phys- 11 ical, biological, chemical, thermal, or mechanical 12 processes to recover the nutrients nitrogen and 13 phosphorus from a non-treated digestate or ani- 14 mal manure by reducing or separating at least 15 50 percent of the concentration of such nutri- 16 ents, excluding any reductions during the incin- 17 eration, storage, composting, or field application 18 of the non-treated digestate or animal manure. 19 ‘‘(B) INCLUSION OF CERTAIN PROCESSING 20 EQUIPMENT.—Such term shall include— 21 ‘‘(i) any property which is used to re- 22 cover the nutrients referred to in subpara- 23 graph (A), such as— 24 ‘‘(I) biological reactors, 25 VerDate Sep 11 2014 23:06 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2542.IS S2542 kjohnson on DSK79L0C42 with BILLS 5 •S 2542 IS ‘‘(II) crystallizers, 1 ‘‘(III) reverse osmosis mem- 2 branes and other water purifiers, 3 ‘‘(IV) evaporators, 4 ‘‘(V) distillers, 5 ‘‘(VI) decanter centrifuges, and 6 ‘‘(VII) equipment that facilitates 7 the process of dissolved air flotation, 8 ammonia stripping, gasification, or 9 ozonation, and 10 ‘‘(ii) any thermal drier which treats 11 the nutrients recovered by the processes re- 12 ferred to in subparagraph (A). 13 ‘‘(C) TERMINATION.—No credit shall be 14 determined under this section with respect to 15 any qualified manure resource recovery prop- 16 erty for any period after December 31, 2021.’’. 17 (d) DENIAL OF DOUBLE BENEFIT FOR QUALIFIED 18 BIOGAS PROPERTY.—Section 45(e) of such Code is 19 amended by adding at the end the following new para- 20 graph: 21 ‘‘(12) COORDINATION WITH ENERGY CREDIT 22 FOR QUALIFIED BIOGAS PROPERTY.—The term 23 ‘qualified facility’ shall not include any facility which 24 produces electricity from gas produced by qualified 25 VerDate Sep 11 2014 23:06 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2542.IS S2542 kjohnson on DSK79L0C42 with BILLS 6 •S 2542 IS biogas property (as defined in section 48(c)(5)) if a 1 credit is determined under section 48 with respect to 2 such property for the taxable year or any prior tax- 3 able year.’’. 4 (e) EFFECTIVE DATE.—The amendments made by 5 this section shall apply to periods after December 31, 6 2018, in taxable years ending after such date, under rules 7 similar to the rules of section 48(m) of such Code (as in 8 effect on the day before the date of the enactment of the 9 Revenue Reconciliation Act of 1990). 10 SEC. 4. STUDY OF BIOGAS AND NUTRIENT REUSE. 11 (a) IN GENERAL.—The Secretary of the Treasury 12 shall enter into an agreement with the National Renewable 13 Energy Laboratory to undertake a study of biogas that 14 addresses the following: 15 (1) The quality of biogas, including a compari- 16 son of biogas to natural gas and the identification 17 of any components of biogas which make biogas un- 18 suitable for injection into existing natural gas pipe- 19 lines. 20 (2) Methods for obtaining the highest energy 21 content in biogas, including the use of co-digestion 22 and identifying the optimal feed mixture. 23 (3) Recommendations for the expansion of 24 biogas production, including an analysis of the ex- 25 VerDate Sep 11 2014 23:06 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2542.IS S2542 kjohnson on DSK79L0C42 with BILLS 7 •S 2542 IS tent to which increasing the methane content of 1 biogas would result in the greater use of biogas and 2 an analysis of how the expanded use of biogas could 3 help meet the growing energy needs of the United 4 States. 5 (4) Methods for productive use of nutrients re- 6 covered from qualified manure resource recovery 7 property that benefits the agricultural economy. 8 (b) REPORT.—Not later than 2 years after the date 9 of the enactment of this Act, the Secretary shall submit 10 to Congress a report on the study conducted under sub- 11 section (a). 12 Æ VerDate Sep 11 2014 23:06 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S2542.IS S2542 kjohnson on DSK79L0C42 with BILLS