110 HR 2261 IH: Rural America Energy Act of 2007 U.S. House of Representatives 2007-05-10 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 110th CONGRESS 1st Session H. R. 2261 IN THE HOUSE OF REPRESENTATIVES May 10, 2007 Mr. Lucas introduced the following bill; which was referred to the Committee on Agriculture, and in addition to the Committees on Ways and Means, Financial Services, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To increase the diversity and independence of the United States energy supply by providing encouragement of energy sources from rural America, including biofuels and wind energy, and for other purposes.

1.

Short title

This Act may be cited as the Rural America Energy Act of 2007.

2.

Adjustments to the bioenergy program

Section 9010 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8108) is amended— (1)in subsection (a)— (A)in paragraph (1)— (i)in subparagraph (A), by striking and; (ii)in subparagraph (B), by striking the final period and inserting a semicolon; and (iii)by adding at the end the following new subparagraphs: (C)cellulosic cogeneration; (D)biomass gasification; and (E)hydrogen made from cellulosic commodities for fuel cells.; (B)by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively; (C)by inserting after paragraph (2) the following new paragraph: (3)

Cellulosic cogeneration

The term cellulosic cogeneration means combined heat and electrical power produced from cellulose, hemicellulose, and lignin found in plant cell walls.; and (D)in subparagraph (A) of paragraph (4), as redesignated by subparagraph (B), by striking corn,; and (2)by striking subsection (f) and inserting the following: (f)

Funding

Of the funds of the Commodity Credit Corporation, the Secretary shall use to carry out this section $25,000,000 for each of fiscal years 2008 through 2012..

3.

Increased funding for the renewable energy program and adjusting the program to benefit smaller projects

Section 9006 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8106) is amended by striking subsection (f) and inserting the following new subsections: (f)

Small projects

The Secretary shall use not less than 15 percent of the funds available under this section to provide grants for projects that have a total cost $50,000 or less. (g)

Funding

Of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section $50,000,000 for each of fiscal years 2008 through 2012..

4.

5-year extension of credit for electricity produced from certain renewable resources

Section 45(d) of the Internal Revenue Code of 1986 (relating to qualified facilities) is amended by striking 2009 each place it appears and inserting 2014.

5.

Dedicated ethanol pipeline feasibility studies

(a)

In general

The Secretary of Energy, in coordination with the Secretary of Agriculture and the Secretary of Transportation, shall spend up to $1,000,000 to fund feasibility studies for the construction of dedicated ethanol pipelines. (b)

Conduct of studies

(1)

In general

The Secretary of Energy shall— (A)through a competitive solicitation process, select 1 or more firms having capabilities in the planning, development, and construction of dedicated ethanol pipelines to carry out the feasibility studies described in subsection (a); or (B)carry out the feasibility studies in conjunction with such firms. (2)

Timing

(A)

In general

If the Secretary elects to select 1 or more firms under paragraph (1)(A), the Secretary shall award funding under this section not later than 120 days after the date of enactment of this Act. (B)

Studies

As a condition of receiving funds under this section, a recipient of funding shall agree to submit to the Secretary a completed feasibility study not later than 360 days after the date of enactment of this Act. (c)

Study Factors

Feasibility studies funded under this section shall include consideration of— (1)existing or potential barriers to dedicated ethanol pipelines, including technical, siting, financing, and regulatory barriers; (2)potential evolutionary pathways for the development of an ethanol pipeline transport system, such as starting with localized gathering networks as compared to major interstate ethanol pipelines to carry larger volumes from the Midwest to the East or West coast; (3)market risk, including throughput risk, and ways of mitigating the risk; (4)regulatory, financing, and siting options that would mitigate risk in these areas and help ensure the construction of dedicated ethanol pipelines; (5)financial incentives that may be necessary for the construction of dedicated ethanol pipelines, including the return on equity that sponsors of the first dedicated ethanol pipelines will require to invest in the pipelines; (6)ethanol production of 20,000,000,000, 30,000,000,000, and 40,000,000,000 gallons per year by 2020; and (7)such other factors that the Secretary considers to be appropriate. (d)

Confidentiality

If a recipient of funding under this section requests confidential treatment for critical energy infrastructure information or commercially-sensitive data contained in a feasibility study submitted by the recipient under subsection (b)(2)(B), the Secretary shall offer to enter into a confidentiality agreement with the recipient to maintain the confidentiality of the submitted information. (e)

Review; report

The Secretary of Energy shall— (1)review the feasibility studies submitted under subsection (b)(2)(B) or carried out under subsection (b)(1)(B); and (2)not later than 15 months after the date of enactment of this Act, submit to Congress a report that includes— (A)information about the potential benefits of constructing dedicated ethanol pipelines; and (B)recommendations for legislation that could help provide for the construction of dedicated ethanol pipelines. (f)

Funding

There are authorized to be appropriated to the Secretary of Energy to carry out this section $1,000,000 for fiscal year 2008, to remain available until expended.

6.

Conservation reserve program adjustments to protect the most environmentally sensitive acres and promote production of biofuels crops

(a)

Reauthorization

Section 1231(a) of the Food Security Act of 1985 (16 U.S.C. 3831(a)) is amended by striking Through the 2007 calendar year and inserting the following: (1)

Program required

Through the 2012 calendar year. (b)

Maximum enrollment

Section 1231(d) of the Food Security Act of 1985 (16 U.S.C. 3831(d)) is amended— (1)by striking 39,200,000 acres and inserting 40,000,000 acres; and (2)by striking by striking 2007 and inserting 2012. (c)

Priority for protection of most environmentally sensitive acres

Section 1231(a) of the Food Security Act of 1985 (16 U.S.C. 3831(a)), as amended by subsection (a), is amended by adding at the end the following new paragraph: (2)

Priority for protection of most environmentally sensitive acres

In applying subsection (b) and other provisions of this subchapter for the enrollment of land in the conservation reserve program, the Secretary shall ensure that, as contracts expire and lands are taken out of the program, the lands are replaced with the most environmentally sensitive acres, so that the program continues to protect highly erodible lands while increasing the acreage outside of the program that is available for the production of crops to accommodate biofuel production..

7.

Transitional assistance for farmers who plant dedicated energy crops for a local cellulosic refinery

(a)

In general

The Secretary shall make transitional assistance payments to an agricultural producer during the 1st year in which the producer devotes land to the production of a qualified cellulosic crop. (b)

Definitions

In this section: (1)

Cellulosic crop

The term cellulosic crop means a tree or grass that is grown specifically to provide raw materials (feedstocks) for conversion to liquid transportation fuels or chemicals through biochemical or thermochemical processes, or for energy generation through combustion, pyrolysis, or co-firing. (2)

Cellulosic refiner

The term cellulosic refiner means the owner or operator of a cellulosic refinery. (3)

Cellulosic refinery

The term cellulosic refinery means a refinery that processes a cellulosic crop. (4)

Qualifed cellulosic crop

The term qualified cellulosic crop means, with respect to an agricultural producer, a cellulosic crop which is— (A)the subject of a contract (or memorandum of understanding) between the producer and a cellulosic refiner, under which the producer is obligated to sell the crop to the refiner at a certain date in the future; and (B)produced not more than 70 miles from a cellulosic refinery owned or operated by the refiner. (5)

Secretary

The term Secretary means the Secretary of Agriculture. (c)

Amount of payment

(1)

Determined by formula

The Secretary shall devise a formula to be used to calculate the amounts of the payments to be made to an agricultural producer under this section, which shall be based on the opportunity costs incurred by the producer during the 1st year in which the producer devotes land to the production of the qualified cellulosic crop, subject to paragraph (2) of this subsection. The Secretary shall prescribe a standard to be used to determine opportunity costs using land rental rates and other costs determined by the Secretary. (2)

Limitation

The total of the amounts paid to a single producer under this section shall not exceed 25 percent of the funds made available under subsection (e) for the fiscal year in which the amounts are so paid. (d)

Regulations

The Secretary shall prescribe such regulations as may be necessary to carry out this section. (e)

Limitations on authorization of appropriations

(1)

In general

To carry out this section, there are authorized to be appropriated to the Secretary not more than $4,088,000 for each of fiscal years 2008 through 2012. (2)

Availability of funds

The amounts made available under paragraph (1) are authorized to remain available until expended.

8.

Credit for installation of wind energy property including by rural homeowners, farmers, ranchers, and small businesses

(a)

In general

Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

30D.

Wind energy property

(a)

Allowance of credit

There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to $1,500 with respect to each half kilowatt of capacity of qualified wind energy property placed in service or installed by the taxpayer during such taxable year. (b)

Limitation

No credit shall be allowed under subsection (a) unless at least 50 percent of the energy produced annually by the qualified wind energy property is consumed on the site on which the property is placed in service or installed. (c)

Qualified wind energy property

For purposes of this section, the term qualified wind energy property means a wind turbine of 100 kilowatts of rated capacity or less if— (1)such turbine is placed in service or installed on or in connection with property located in the United States, (2)in the case of an individual, the property on or in connection with which such turbine is installed is a dwelling unit, (3)the original use of such turbine commences with the taxpayer, and (4)such turbine carries at least a 5-year limited warranty covering defects in design, material, or workmanship, and, for property that is not installed by the taxpayer, at least a 5-year limited warranty covering defects in installation. (d)

Limitation based on amount of tax

(1)

In general

The credit allowed under subsection (a) for any taxable year shall not exceed the excess of— (A)the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over (B)the sum of the credits allowable under this part (other than under this section and subpart C thereof, relating to refundable credits) and section 1397E. (2)

Carryover of unused credit

If the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year. (e)

Special rules

For purposes of this section— (1)

Tenant-stockholder in cooperative housing corporation

In the case of an individual who is a tenant-stockholder (as defined in section 216(b)(2)) in a cooperative housing corporation (as defined in section 216(b)(1)), such individual shall be treated as having paid his tenant-stockholder’s proportionate share (as defined in section 216(b)(3)) of any expenditures paid or incurred for qualified wind energy property by such corporation, and such credit shall be allocated appropriately to such individual. (2)

Condominiums

(A)

In general

In the case of an individual who is a member of a condominium management association with respect to a condominium which he owns, such individual shall be treated as having paid his proportionate share of expenditures paid or incurred for qualified wind energy property by such association, and such credit shall be allocated appropriately to such individual. (B)

Condominium management association

For purposes of this paragraph, the term condominium management association means an organization which meets the requirements of section 528(c)(2) with respect to a condominium project of which substantially all of the units are used by individuals as dwelling units. (f)

Basis adjustment

For purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to a dwelling unit or other property, the increase in the basis of such dwelling unit or other property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed. (g)

Application of credit

The credit allowed under this section shall apply to property placed in service or installed after December 31, 2006, and before January 1, 2012.

. (b)

Conforming amendment

Subsection (a) of section 1016 of the Internal Revenue Code of 1986 (relating to general rule for adjustments to basis) is amended by striking and at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting , and, and by adding at the end the following new paragraph: (38)in the case of a dwelling unit or other property with respect to which a credit was allowed under section 30D, to the extent provided in section 30D(f).. (c)

Clerical amendment

The table of sections for subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 30C the following new item: Sec. 30D. Wind energy property.. (d)

Effective date

The amendments made by this section shall apply to taxable years ending after December 31, 2006.

9.

Modification of accounting practices

Within 18 months after the date of enactment of this Act, the Securities and Exchange Commission shall revise the accounting practices to be followed in the preparation of accounts by persons engaged, in whole or in part, in the production of crude oil or natural gas in the United States that were developed pursuant to section 503 of the Energy Policy Conservation Act (42 U.S.C. 6383) to establish a renewable reserves classification and disclosure system. Such classification and disclosure system shall treat contracted biomass crops for a cellulosic biorefinery as renewable reserves.