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.
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.
{"src": "billsum_test", "title": "To amend the Internal Revenue Code of 1986 to provide for a livestock energy investment credit."}