S. 3997 (109th): Landfill Gas Act of 2006

109th Congress, 2005–2006. Text as of Sep 29, 2006 (Introduced).

Status & Summary | PDF | Source: GPO

II

109th CONGRESS

2d Session

S. 3997

IN THE SENATE OF THE UNITED STATES

September 29, 2006

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 provide a credit against tax proportional to the number of million British thermal units of natural gas produced by a high Btu fuel facility.

1.

Short title

This Act may be cited as the Landfill Gas Act of 2006.

2.

Credit for production of natural gas

(a)

Allowance of credit

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by inserting after section 45M the following new section:

45N.

Credit for production of natural gas

(a)

In general

For purposes of section 38, in the case of a taxpayer, the amount of the natural gas production credit determined under this section for a taxable year is equal to the product of—

(1)

$2, multiplied by

(2)

each 1,000,000 British thermal units of natural gas produced by the taxpayer at a high Btu fuel facility during the taxable year.

(b)

Reduction in credit amount as natural gas prices increase

For purposes of this section, in the case of natural gas produced after the first day of a production month following the date on which the spot price of natural gas delivered at Henry Hub, Louisiana, on average, exceeds $6 per million British thermal units for 30 consecutive trading days, the $2 amount under subsection (a) shall be reduced (but not below zero) by an amount which is equal to the amount by which such spot price exceeds $6 per million British thermal units.

(c)

High Btu fuel facility

For purposes of this section—

(1)

In general

The term high Btu fuel facility means a facility that produces high Btu biomass fuel and which is placed in service after the date of the enactment of this section and before January 1, 2012.

(2)

High Btu biomass fuel

The term high Btu biomass fuel means fuel produced from biomass (as defined in section 45K(c)(3)) that—

(A)

contains no more than 7 pounds of water per million standard cubic feet,

(B)

contains not less than 95 percent methane per volume, and

(C)

has a Btu content of at least 950 per square cubic feet.

(d)

Other rules To apply

Rules similar to the rules of paragraphs (1), (3), (4), and (5) of section 45(e) shall apply for purposes of this section.

(e)

Denial of double benefit

No credit shall be allowed under subsection (a) for natural gas produced by the taxpayer if a credit is allowed to the taxpayer with respect to such gas under section 45, 45I, or 45K.

(f)

Application of section

This section shall not apply to natural gas produced at any facility after the date which is 10 years after the date such facility is placed in service.

.

(b)

Credit To be part of general business credit

Subsection (b) of section 38 of such Code (relating to general business credit) is amended by striking and at the end of paragraph (29), by striking the period at the end of paragraph (30) and inserting , and, and by adding at the end the following new paragraph:

(31)

the natural gas production credit determined under section 45N(a).

.

(c)

Conforming 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 45M the following new item:

Sec. 45N. Credit for production of natural gas.

.

(d)

Effective date

The amendments made by this section shall apply to natural gas produced after December 31, 2006, in taxable years ending after such date.