H.R. 5027 – Landfill Gas Act of 2006

109th CONGRESS

2d Session

H. R. 5027

IN THE HOUSE OF REPRESENTATIVES

March 28, 2006

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

Short title

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

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)

the million 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, on the first day of the 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.

(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.

(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 the production of natural gas in taxable years beginning after December 31, 2006.

Landfill Gas Act of 2006

Legislative Activity

Bill Text