text: SECTION 1. LIVESTOCK ENERGY INVESTMENT CREDIT.
  
      (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
  of the Internal Revenue Code of 1986 is amended by inserting after 
  section 40A the following new section:
  
  ``SEC. 40B. RENEWABLE ENERGY PRODUCED FROM LIVESTOCK WASTE USING EPA-
                VERIFIED TECHNOLOGIES FOR THE COMPREHENSIVE ENVIRONMENTAL 
                TREATMENT OF LIVESTOCK WASTE.
  
      ``(a) In General.--For purposes of section 38, the livestock-
  derived renewable energy production credit for any taxable year is an 
  amount equal to the product of--
              ``(1) $5.56, and
              ``(2) each million British thermal units (mmBtu) of 
          livestock-derived renewable energy--
                      ``(A) produced by the taxpayer--
                              ``(i) from qualified energy feedstock,
                              ``(ii) at a qualified facility during the 
                          7-year period beginning on the date the 
                          facility was originally placed in service, and
                              ``(iii) using an EPA-verified technology 
                          that provides comprehensive livestock waste 
                          treatment addressing significant reductions to 
                          nitrogen and phosphorus nutrient discharges, 
                          odor and air emissions including greenhouse 
                          gases and ammonia, methane, hydrogen sulfide 
                          and volatile organic compounds, and
                      ``(B) either--
                              ``(i) sold by the taxpayer to an unrelated 
                          person during the taxable year, or
                              ``(ii) used by the taxpayer during the 
                          taxable year.
      ``(b) Definitions.--For purposes of this section--
              ``(1) Livestock-derived renewable energy.--The term 
          `livestock-derived renewable energy' means fuel which is 
          derived by processing qualified energy feedstock.
              ``(2) Qualified energy feedstock.--
                      ``(A) In general.--The term `qualified energy 
                  feedstock' means--
                              ``(i) manure of livestock (including any 
                          litter, wood shavings, straw, rice hulls, 
                          bedding material, and other materials 
                          incidentally collected with the manure),
                              ``(ii) any nonhazardous, organic 
                          agricultural or food industry byproduct or 
                          waste material (cellulosic or otherwise) 
                          derived from--
                                      ``(I) renewable biomass,
                                      ``(II) harvesting residue,
                                      ``(III) any waste or byproduct from 
                                  fermentation processes, ethanol 
                                  production, biodiesel production, 
                                  slaughter of livestock, food 
                                  production, food processing, or food 
                                  service, or
                                      ``(IV) other organic wastes, 
                                  byproducts, or sources,
                              ``(iii) solid wood waste materials, 
                          including waste pallets, crates, dunnage, 
                          manufacturing and construction wood wastes, and 
                          tree trimmings, or
                              ``(iv) agricultural or forestry crops.
                      ``(B) Renewable biomass.--The term `renewable 
                  biomass' means materials from pre-commercial thinning 
                  or invasive species from National Forest System land 
                  and public lands (as defined in section 103 of the 
                  Federal Land Policy and Management Act of 1976 (43 
                  U.S.C. 1702)) that--
                              ``(i)(I) are byproducts of preventive 
                          treatments that are removed--
                                      ``(aa) to reduce or contain disease 
                                  or insect infestation, or
                                      ``(bb) to restore ecosystem health,
                              ``(II) would not otherwise be used for 
                          higher-value products, and
                              ``(III) are harvested in accordance with 
                          applicable law and land management plans and 
                          the requirements for--
                                      ``(aa) old-growth maintenance, 
                                  restoration, and management direction 
                                  of paragraphs (2), (3), and (4) of 
                                  subsection (e) of section 102 of the 
                                  Healthy Forests Restoration Act of 2003 
                                  (16 U.S.C. 6512), and
                                      ``(bb) large tree retention of 
                                  subsection (f) of that section, or
                              ``(ii) any organic matter that is available 
                          on a renewable or recurring basis from non-
                          Federal land or land belonging to an Indian or 
                          Indian tribe that is held in trust by the 
                          United States or subject to a restriction 
                          against alienation imposed by the United 
                          States, including--
                                      ``(I) renewable plant material 
                                  (such as feed grains, other 
                                  agricultural commodities, other plants 
                                  and trees, and algae), and
                                      ``(II) waste material (such as crop 
                                  residue, other vegetative waste 
                                  material (including wood waste and wood 
                                  residues), animal waste and byproducts 
                                  (including fats, oils, greases, and 
                                  manure), food waste, and yard waste).
                      ``(C) Livestock.--The term `livestock' includes 
                  poultry, cattle, sheep, swine, goats, horses, mules, 
                  and other equines.
              ``(3) Qualified facility.--The term `qualified facility' 
          means a facility--
                      ``(A) which is owned by the taxpayer,
                      ``(B) which is located in the United States,
                      ``(C) which is originally placed in service before 
                  January 1, 2018, and
                      ``(D) the livestock-derived renewable energy output 
                  of which is--
                              ``(i) marketed through interconnection with 
                          a gas distribution or transmission pipeline, or
                              ``(ii) used on-site or off-site in a 
                          quantity that is sufficient to offset the 
                          consumption of at least 50,000 mmBtu annually 
                          of commercially marketed fuel derived from 
                          coal, crude oil, natural gas, propane, or other 
                          fossil fuel.
              ``(4) EPA-verified technology.--The term `EPA-verified 
          technology' means any technology the performance of which is 
          verified by the Environmental Technology Verification Program 
          of the Environmental Protection Agency.
      ``(c) Reduction of Credit Based on Market Price of Btus.--
              ``(1) In general.--If the market price per mmBtu's exceeds 
          $11, the amount otherwise applicable under subsection (a)(1) 
          for the taxable year (without regard to paragraph (1)) shall be 
          reduced (but not below zero) by the amount which bears the same 
          ratio to the amount otherwise so applicable as such excess 
          bears to $5.
              ``(2) Rounding.--Any reduction determined under 
          subparagraph (A) which is not a multiple of 10 cents shall be 
          rounded to the nearest multiple of 10 cents.
              ``(3) Market price.--For purposes of this paragraph, the 
          market price per mmBtu for any taxable year shall be the daily 
          average market price per mmBtu on the Chicago exchange during 
          the 3-month period ending at the close of the preceding taxable 
          year.
      ``(d) Special Rules.--For purposes of this section--
              ``(1) Production attributable to the taxpayer.--In the case 
          of a facility in which more than 1 person has an ownership 
          interest, except to the extent provided in regulations 
          prescribed by the Secretary, production from the qualified 
          facility shall be allocated among such persons in proportion to 
          their respective ownership interests in the gross sales from 
          such qualified facility.
              ``(2) Related persons.--Persons shall be treated as related 
          to each other if such persons would be treated as a single 
          employer under the regulations prescribed under section 52(b). 
          In the case of a corporation which is a member of an affiliated 
          group of corporations filing a consolidated return, such 
          corporation shall be treated as selling livestock-derived 
          renewable energy to an unrelated person if such biogas is sold 
          to such a person by another member of such group.
              ``(3) Pass-thru in the case of estates and trusts.--Under 
          regulations prescribed by the Secretary, rules similar to the 
          rules of subsection (d) of section 52 shall apply.
              ``(4) Coordination with credit from producing fuel from a 
          nonconventional source.--The amount of livestock-derived 
          renewable energy produced and sold or used by the taxpayer 
          during any taxable year which is taken into account under this 
          section shall be reduced by the amount of livestock-derived 
          renewable energy produced and sold by the taxpayer in such 
          taxable year which is taken into account under section 45K.
              ``(5) Credit eligibility in the case of government-owned 
          facilities using poultry waste.--In the case of a facility 
          using poultry waste to produce livestock-derived renewable 
          energy and owned by a governmental unit, subparagraph (B) of 
          subsection (b)(3) shall be applied by substituting `is leased 
          or operated by the taxpayer' for `is owned by the taxpayer'.
      ``(e) Transferability of Credit.--
              ``(1) In general.--A taxpayer may transfer the credit under 
          this section through an assignment to any person. Such transfer 
          may be revoked only with the consent of the Secretary.
              ``(2) Regulations.--The Secretary shall prescribe such 
          regulations as necessary to ensure that any credit transferred 
          under paragraph (1) is claimed once and not reassigned by such 
          other person.
      ``(f) Adjustment Based on Inflation.--
              ``(1) In general.--The $5.56 amount in subsection (a)(1) 
          and the $11 amount in subsection (c)(2)(A) shall each be 
          adjusted by multiplying such amount by the inflation adjustment 
          factor for the calendar year in which the sale occurs. If any 
          amount as increased under the preceding sentence is not a 
          multiple of 0.1 cent, such amount shall be rounded to the 
          nearest multiple of 0.1 cent.
              ``(2) Computation of inflation adjustment factor.--
                      ``(A) In general.--The Secretary shall, not later 
                  than April 1 of each calendar year, determine and 
                  publish in the Federal Register the inflation 
                  adjustment factor in accordance with this paragraph.
                      ``(B) Inflation adjustment factor.--The term 
                  `inflation adjustment factor' means, with respect to a 
                  calendar year, a fraction the numerator of which is the 
                  GDP implicit price deflator for the preceding calendar 
                  year and the denominator of which is the GDP implicit 
                  price deflator for calendar year 2007. The term `GDP 
                  implicit price deflator' means the most recent revision 
                  of the implicit price deflator for the gross domestic 
                  product as computed and published by the Department of 
                  Commerce before March 15 of the calendar year.''.
      (b) Credit Treated as Business Credit.--Section 38(b) of such Code 
  is amended by striking ``plus'' at the end of paragraph (30), by 
  striking the period at the end of paragraph (31) and inserting ``, 
  plus'', and by adding at the end the following new paragraph:
              ``(32) the livestock-derived renewable energy production 
          credit under section 40B(a).''.
      (c) Credit Allowed Against Amt.--Section 38(c)(4)(B) of such Code 
  is amended by striking ``and'' at the end of clause (i), by striking 
  the period at the end of clause (ii)(II) and inserting ``, and'', and 
  by adding at the end the following new clause:
                              ``(iii) the credit determined under section 
                          40B.''.
      (d) Clerical Amendment.--The table of sections for subpart D of 
  part IV of subchapter A of chapter 1 of such Code is amended by 
  inserting after the item relating to section 40A the following new 
  item:
  
  ``Sec. 40B. Renewable energy produced from livestock waste using EPA-
                              verified technologies for the comprehensive 
                              environmental treatment of livestock 
                              waste.''.
      (e) Effective Date.--The amendments made by this section shall 
  apply to energy produced, and sold or used, in taxable years beginning 
  after the date of the enactment of this Act.
target: Amends the Internal Revenue Code to allow a business-related tax credit for: (1) the production of renewable energy from qualified energy feedstock using a technology verified by the Environmental Protection Agency (EPA); and (2) the sale or use of such energy. Defines "qualified energy feedstock" to include manure of livestock, any nonhazardous, organic agricultural or food industry byproduct or waste material derived from renewable biomass, solid wood waste materials, or agricultural or forestry crops. Allows such credit to offset alternative minimum tax (AMT) liability.
feat_title: To amend the Internal Revenue Code of 1986 to provide for a livestock energy investment credit.