Renewable Natural Gas Incentive Act of 2023

Federal

Source: Congress.gov · 1,584 words in original text

What This Bill Does

This bill changes tax laws to provide a credit (money back from taxes) to people and businesses that sell or use renewable natural gas as fuel. Renewable natural gas is gas made from biomass (organic material like waste) that can power vehicles, boats and airplanes. The bill aims to encourage more use of this fuel type. ##

Who It Affects

- Businesses that produce renewable natural gas - Businesses that sell renewable natural gas as fuel - People who use renewable natural gas to power vehicles, boats or aircraft - The federal government (which will pay out tax credits) - Producers who must register with the government to participate ##

Key Provisions

- Taxpayers get a tax credit of $1.00 for each gallon of renewable natural gas or gasoline gallon equivalent they sell or use as fuel in motor vehicles, motorboats or aircraft (Sec. 2(a)) - Renewable natural gas must be made by a registered producer and include required paperwork (certification) to qualify for the credit (Sec. 2(a)) - Blended renewable natural gas (mixed with regular natural gas) qualifies for the credit only if there is a written contract before blending, and the amount claimed cannot exceed what the producer certifies was included (Sec. 2(a)) - The Secretary of the Treasury will pay out the tax credit to eligible sellers and users without charging interest (Sec. 2(c)) - Producers of renewable natural gas must register with the government (Sec. 2(d)) ##

What Changes

The Internal Revenue Code will now include a new renewable natural gas fuel credit system. Businesses that currently pay taxes can claim this new credit. The government will begin making payments to eligible renewable natural gas producers and sellers. Registration requirements now apply to renewable natural gas producers. ##

Important Definitions

- **Renewable natural gas**: Compressed or liquefied gas made from biomass, produced by a registered person with required certification - **Gasoline gallon equivalent**: The amount of nonliquid renewable natural gas with a heat value of 124,800 BTU (a measurement of energy content) - **Blended renewable natural gas**: Compressed or liquefied natural gas that contains both renewable natural gas and regular natural gas mixed together - **Biomass**: Not defined in this bill; defined elsewhere in tax law ##

Effective Date

The credits apply to fuel sold or used after December 31, 2023, and expire after December 31, 2033 (Sec. 2(a) and (e)).

I 118TH CONGRESS 1ST SESSION H. R. 2448 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. IN THE HOUSE OF REPRESENTATIVES MARCH 30, 2023 Ms. SA´NCHEZ (for herself and Mr. FITZPATRICK) introduced the following bill; which was referred to the Committee on Ways and Means A BILL 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 transpor- tation-related emissions that contribute to poor air qual- ity, and to increase job creation and economic oppor- tunity throughout the United States. 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 ‘‘Renewable Natural 4 Gas Incentive Act of 2023’’. 5 VerDate Sep 11 2014 22:08 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2448.IH H2448 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 2448 IH SEC. 2. INCREASED CREDIT FOR RENEWABLE NATURAL 1 GAS. 2 (a) IN GENERAL.—Section 6426 of the Internal Rev- 3 enue Code of 1986 is amended— 4 (1) in subsection (a)(2), by inserting ‘‘and (l)’’ 5 after ‘‘subsection (d)’’, and 6 (2) by adding at the end the following new sub- 7 section: 8 ‘‘(l) RENEWABLE NATURAL GAS FUEL CREDIT.— 9 ‘‘(1) IN GENERAL.—For purposes of this sec- 10 tion, the renewable natural gas fuel credit is the 11 product of $1.00 and the number of gallons of re- 12 newable natural gas or gasoline gallon equivalents of 13 a nonliquid renewable natural gas sold by the tax- 14 payer for use as a fuel in a motor vehicle or motor- 15 boat, sold by the taxpayer for use as a fuel in avia- 16 tion, or so used by the taxpayer. 17 ‘‘(2) RENEWABLE NATURAL GAS.—For pur- 18 poses of this section, the term ‘renewable natural 19 gas’ means compressed or liquefied gas derived from 20 biomass (as defined in section 45K(c)(3))— 21 ‘‘(A) which produced by a person reg- 22 istered under section 4101(a), and 23 ‘‘(B) with respect to which the producer 24 has made a certification described in paragraph 25 (4). 26 VerDate Sep 11 2014 22:08 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2448.IH H2448 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 2448 IH ‘‘(3) TREATMENT OF BLENDED RENEWABLE 1 NATURAL GAS.— 2 ‘‘(A) IN GENERAL.—Under regulations 3 prescribed by the Secretary, a sale of blended 4 renewable natural gas shall be treated as a sale 5 of renewable natural gas fuel if— 6 ‘‘(i) at the time the renewable natural 7 gas was blended with other compressed or 8 liquefied natural gas, the taxpayer had a 9 contract with the registered producer of 10 such renewable natural gas for the sale of 11 such gas for use as a fuel in a motor vehi- 12 cle or motorboat, or for use as a fuel in 13 aviation, 14 ‘‘(ii) such contract was entered into 15 before the sale of the blended renewable 16 natural gas and specifies the number of 17 gallons of renewable natural gas provided 18 for such purposes and the period for which 19 such contract is in effect, and 20 ‘‘(iii) the registered producer of such 21 fuel provides to the taxpayer the certifi- 22 cation described in paragraph (4). 23 ‘‘(B) LIMITATION.—The amount of blend- 24 ed renewable natural gas treated as renewable 25 VerDate Sep 11 2014 22:08 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2448.IH H2448 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 2448 IH natural gas under subparagraph (A) for any pe- 1 riod shall not exceed the number of gallons of 2 renewable natural gas specified under subpara- 3 graph (A)(ii) and certified by the producer 4 under paragraph (4) for such period. 5 ‘‘(C) BLENDED RENEWABLE NATURAL 6 GAS.—For purposes of this subsection, the term 7 ‘blended renewable natural gas’ means com- 8 pressed or liquefied natural gas which consists 9 of both renewable natural gas and other com- 10 pressed or liquefied natural gas. 11 ‘‘(4) CERTIFICATION.—A certification is de- 12 scribed in this subparagraph if such certification— 13 ‘‘(A) identifies the product produced and 14 the gallon equivalent of fuel acquired by the 15 taxpayer for a purpose described in paragraph 16 (1), and 17 ‘‘(B) is provided such form and manner as 18 prescribed by the Secretary. 19 ‘‘(5) GASOLINE GALLON EQUIVALENT.—For 20 purposes of this subsection, the term ‘gasoline gallon 21 equivalent’ means, with respect to any nonliquid re- 22 newable natural gas, the amount of such fuel having 23 a Btu content of 124,800 (higher heating value). 24 VerDate Sep 11 2014 22:08 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2448.IH H2448 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 2448 IH ‘‘(6) TERMINATION.—This subsection shall not 1 apply to any sale or use for any period after Decem- 2 ber 31, 2033.’’. 3 (b) APPLICATION OF OTHER RULES.— 4 (1) REGISTRATION.—The last sentence of sec- 5 tion 6426(a) of the Internal Revenue Code of 1986 6 is amended by striking ‘‘subsections (d) and (e)’’ 7 and inserting ‘‘subsections (d), (e), and (l)’’. 8 (2) DENIAL OF DOUBLE BENEFIT.—Section 9 6426(h) of such Code is amended by striking ‘‘sub- 10 section (d) or (e)’’ and inserting ‘‘subsection (d), (e), 11 or (l)’’. 12 (3) FUEL MUST BE CONNECTED TO THE 13 UNITED STATES.—Section 6426(i) of such Code is 14 amended by inserting after paragraph (2) the fol- 15 lowing new paragraph: 16 ‘‘(3) RENEWABLE NATURAL GAS.—No credit 17 shall be determined under this section with respect 18 to any renewable natural gas which is produced out- 19 side the United States for use as a fuel outside the 20 United States.’’. 21 (4) ENERGY EQUIVALENCY.—Section 6426(j) of 22 such Code is amended— 23 (A) by inserting ‘‘or renewable natural 24 gas,’’ after ‘‘alternative fuel’’, and 25 VerDate Sep 11 2014 22:08 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2448.IH H2448 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 2448 IH (B) by inserting ‘‘or gas’’ after ‘‘such a 1 fuel’’. 2 (c) PAYMENTS.— 3 (1) IN GENERAL.—Section 6427(e) of the Inter- 4 nal Revenue Code of 1986 is amended by redesig- 5 nating paragraphs (3) through (6) as paragraphs 6 (4) through (7), respectively, and by inserting after 7 paragraph (2) the following new paragraph: 8 ‘‘(3) RENEWABLE NATURAL GAS.—If any per- 9 son sells or uses renewable natural gas (as defined 10 in section 6426(k)(2)) for a purpose described in 11 section 6426(k)(1) in such person’s trade or busi- 12 ness, the Secretary shall pay (without interest) to 13 such person an amount equal to the renewable nat- 14 ural gas fuel credit with respect to such fuel.’’. 15 (2) TERMINATION.—Section 6427(e)(7) of such 16 Code, as redesignated by paragraph (1), is amended 17 by striking ‘‘and’’ at the end of subparagraph (D), 18 by striking the period at the end of subparagraph 19 (E) and inserting ‘‘, and’’, and by adding at the end 20 the following new subparagraph: 21 ‘‘(F) any renewable natural gas (as defined 22 in section 6426(k)(2)) sold or used after De- 23 cember 31, 2033.’’. 24 (3) CONFORMING AMENDMENTS.— 25 VerDate Sep 11 2014 22:08 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2448.IH H2448 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 2448 IH (A) Section 6427(e)(4) of such Code, as 1 redesignated by paragraph (1), is amended— 2 (i) by striking ‘‘paragraph (1) or (2)’’ 3 and inserting ‘‘paragraph (1), (2), or (3)’’, 4 and 5 (ii) by striking ‘‘any mixture or alter- 6 native fuel’’ and inserting ‘‘any mixture, 7 alternative fuel, or renewable natural gas’’. 8 (B) Section 6427(e)(6) of such Code, as 9 redesignated by paragraph (1), is amended by 10 striking ‘‘alternative fuel credit or alternative 11 fuel mixture credit’’ and inserting ‘‘alternative 12 fuel credit, alternative fuel mixture credit, or 13 renewable natural gas fuel credit’’. 14 (C) Section 6427(e)(6) of such Code, as 15 redesignated by paragraph (1), is amended— 16 (i) by striking ‘‘paragraph (1) or (2)’’ 17 and inserting ‘‘paragraph (1), (2), or (3)’’, 18 and 19 (ii) by striking ‘‘any mixture or alter- 20 native fuel’’ and inserting ‘‘any mixture, 21 alternative fuel, or renewable natural gas’’. 22 (d) REGISTRATION.—Section 4101(a) of such Code 23 is amended— 24 VerDate Sep 11 2014 22:08 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2448.IH H2448 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 2448 IH (1) by striking ‘‘and’’ before ‘‘every person pro- 1 ducing second generation biofuel’’, and 2 (2) by inserting ‘‘, and every person producing 3 renewable natural gas (as defined in section 4 6426(k)(2))’’ after ‘‘(as defined in section 5 40(b)(6)(E))’’. 6 (e) EFFECTIVE DATE.—The amendments made by 7 this section shall apply to fuel sold or used after December 8 31, 2023. 9 Æ VerDate Sep 11 2014 22:08 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H2448.IH H2448 pbinns on DSKJLVW7X2PROD with $$_JOB

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