H.R. 8137

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8137 Introduced in House (IH)]

<DOC>

119th CONGRESS
2d Session
H. R. 8137

To amend the Internal Revenue Code of 1986 to establish tax credits for 
the production of, and investment in, certain renewable materials.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

March 27, 2026

Mrs. Fischbach (for herself and Ms. Budzinski) 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 establish tax credits for 
the production of, and investment in, certain renewable materials.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CREDIT FOR RENEWABLE MATERIALS PRODUCTION.

(a) In General.--Subpart D 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:

``SEC. 45BB. RENEWABLE MATERIALS PRODUCTION CREDIT.

``(a) Allowance of Credit.--For purposes of section 38, the 
renewable materials production credit for any taxable year is an amount 
equal to the product of--
``(1) 10 cents, multiplied by
``(2) the number of pounds of qualified renewable material 
which is--
``(A) produced by the taxpayer during such taxable 
year at a renewable material production facility, and
``(B) either--
``(i) sold by the taxpayer to an unrelated 
person, or
``(ii) used by the taxpayer producing such 
qualified renewable material,
only if such sale or use is in a trade or business of 
the taxpayer during the taxable year.
``(b) Definitions.--For purposes of this section--
``(1) Qualified renewable material.--
``(A) In general.--The term `qualified renewable 
material' means the biobased carbon content portion of 
any product, including a chemical, produced using 
biological conversion, thermal conversion, catalytic 
conversion, chemical conversion, or a combination 
thereof, from biomass.
``(B) Exclusions.--The term `qualified renewable 
material' shall not include any product--
``(i) which is suitable for use as a fuel 
in any vehicle (whether or not the vehicle is 
manufactured primarily for use on public 
streets, roads, and highways), marine vessel, 
watercraft, or aircraft,
``(ii) used to generate heat or 
electricity,
``(iii) which is suitable for use as food 
or feed,
``(iv) produced from biomass which was not 
manufactured, produced, grown, or extracted in 
whole or in significant part within--
``(I) the United States (within the 
meaning of section 638(1)), or
``(II) a possession of the United 
States (within the meaning of section 
638(2)), or
``(v) which is derived from coprocessing 
biomass with a feedstock which is not biomass.
``(C) First sale or use to qualify.--In the case 
where multiple points in a supply chain may be eligible 
under this section, the qualified renewable material 
that first meets the requirements of this section will 
be the only qualified renewable material eligible.
``(2) Biobased carbon content portion.--The term `biobased 
carbon content portion' means the biobased carbon content as 
determined pursuant to ASTM D6866.
``(3) Biomass.--The term `biomass' has the same meaning 
given such term in section 45K(c)(3), except `biomass' does not 
include any qualified renewable material.
``(4) Renewable material production facility.--The term 
`renewable material production facility' means any facility--
``(A) that produces qualified renewable material 
during a qualifying credit period, and
``(B) located in the United States or a possession 
of the United States (within the meaning of section 
638(2)).
``(5) Qualifying credit period.--
``(A) In general.--The term `qualifying credit 
period' means the 10-year period beginning on the later 
of--
``(i) the date the renewable material 
production facility was originally placed in 
service,
``(ii) the date the modifications described 
in subparagraph (B) were placed in service, or
``(iii) the date of enactment of this 
section.
``(B) Modifications.--The modifications described 
in this subparagraph are substantial modifications to 
an existing facility which allow such facility to 
produce qualified renewable material.
``(c) Special Rules.--
``(1) Credit attributable to taxpayer.--
``(A) In general.--Except as otherwise provided in 
subparagraph (B) or in any regulations prescribed by 
the Secretary, any credit under this section shall be 
attributable to the person that sells or uses the 
qualified renewable material.
``(B) Election.--If the person described in 
subparagraph (A) makes an election under this 
subparagraph in such time and manner as the Secretary 
may prescribe by regulations, the credit under this 
section--
``(i) shall be allowable to the person to 
whom the qualified renewable material is sold, 
and
``(ii) shall not be allowable to the person 
described in subparagraph (A).
``(2) Coordination with investment credit.--The term 
`renewable material production facility' shall not include any 
facility for which a renewable materials investment credit 
determined under section 48F is allowed under section 38 for 
the taxable year or any prior taxable year.
``(3) Credit reduced for tax-exempt bonds.--Rules similar 
to the rules of section 45(b)(3) shall apply.
``(4) Limitation.--The amount of the credit determined 
under subsection (a) with respect to any facility for any 
taxable year (determined after the application of paragraph 
(3)) shall not exceed $10,000,000.''.
(b) Coordination With Clean Fuel Production Credit.--Section 
45Z(d)(4)(B) is amended by adding at the end the following:
``(iv) The renewable materials production 
credit under section 45BB.''.
(c) Credit Made Transferable.--Section 6418(f)(1) is amended--
(1) in subparagraph (A) by adding at the end the following:
``(xii) The renewable materials production 
credit determined under section 45BB.'', and
(2) in subparagraph (B), by striking ``or (vii)'' and 
inserting ``(vii), or (xii)''.
(d) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 of such Code is amended by striking ``plus'' at the end of 
paragraph (40), by striking the period at the end of paragraph (41) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
``(42) the renewable materials production credit determined 
under section 45BB.''.
(e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following:

``Sec. 45BB. Renewable materials production credit.''.
(f) Regulations.--The Secretary, in consultation with the Secretary 
of Agriculture, shall establish regulations or other guidance for 
implementing the credit established under this section within 180 days 
of the date of enactment.
(g) Effective Date.--The amendments made by this section shall 
apply to qualified renewable material produced on or after the date of 
enactment.

SEC. 2. CREDIT FOR RENEWABLE MATERIALS INVESTMENT.

(a) In General.--Subpart E 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:

``SEC. 48F. RENEWABLE MATERIALS INVESTMENT CREDIT.

``(a) Allowance of Credit.--For purposes of section 46, the 
renewable materials investment credit for any taxable year is an amount 
equal to 30 percent of the qualified investment for the taxable year 
with respect to any qualified facility.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the 
qualified investment for any taxable year with respect to any 
qualified facility is the basis of any qualified property 
placed in service by the taxpayer during such taxable year 
which--
``(A) is used in the production of qualified 
renewable material, and
``(B) is part of a qualified facility.
``(2) Qualified property.--For purposes of this section, 
the term `qualified property' means property--
``(A) which is--
``(i) tangible personal property, or
``(ii) other tangible property (not 
including a building or its structural 
components), but only if such property is used 
as an integral part of the qualified facility,
``(B) with respect to which depreciation (or 
amortization in lieu of depreciation) is allowable,
``(C) which is constructed, reconstructed, erected, 
or acquired by the taxpayer, and
``(D) the original use of which commences with the 
taxpayer.
``(3) Qualified facility.--
``(A) In general.--The term `qualified facility' 
means a renewable material production facility within 
the meaning of section 45BB(b)(3).
``(B) Exclusion.--The term `qualified facility' 
shall not include any facility for which a renewable 
materials production credit determined under section 
45BB is allowed under section 38 for the taxable year 
or any prior taxable year.
``(4) Coordination with rehabilitation credit.--The 
qualified investment with respect to any qualified facility for 
any taxable year shall not include that portion of the basis of 
any property which is attributable to qualified rehabilitation 
expenditures (as defined in section 47(c)(2)).
``(c) Special Rules.--
``(1) Certain progress expenditure rules made applicable.--
Rules similar to the rules of subsections (c)(4) and (d) of 
section 46 (as in effect on the day before the date of the 
enactment of the Revenue Reconciliation Act of 1990) shall 
apply for purposes of subsection (a).
``(2) Credit reduced for tax-exempt bonds.--Rules similar 
to the rules of section 45(b)(3) shall apply.''.
(b) Coordination With Clean Fuel Production Credit.--Section 
45Z(d)(4)(B), as amended by section 1, is amended by adding at the end 
the following:
``(v) The credit determined under section 
46 to the extent that such credit is 
attributable to the renewable materials 
investment credit.''.
(c) Credit Made Transferable.--Section 6418, as amended by section 
1, is amended--
(1) in subsection (f)(1)(A) by adding at the end the 
following:
``(xiii) The renewable materials investment 
credit determined under section 48F.'', and
(2) in paragraph (g)(3) by striking ``(xi)'' and inserting 
``(xi), or (xiii),''.
(d) Conforming Amendments.--
(1) Section 46 of such Code is amended--
(A) in paragraph (6) by striking ``and'' at the 
end,
(B) in paragraph (7) by striking the period at the 
end and inserting ``, and'', and
(C) by adding at the end the following:
``(8) the renewable materials investment credit.''.
(2) Section 49(a)(1)(C) of such Code is amended--
(A) by striking ``and'' at the end of clause (vii),
(B) by striking the period at the end of clause 
(viii) and inserting ``, and'', and
(C) by adding at the end the following new clause:
``(ix) the basis of any qualified property 
which is part of a qualified facility under 
section 48F.''.
(3) Section 50(a)(2)(E) of such Code is amended by striking 
``or 48E(e)'' and inserting ``48E(e), or 48F(c)(1)''.
(4) The table of sections for subpart E of part IV of 
subchapter A of chapter 1 of such Code is amended by inserting 
after the item relating to section 48E the following new item:

``Sec. 48F. Renewable materials investment credit.''.
(e) Regulations.--The Secretary, in consultation with the Secretary 
of Agriculture, shall establish regulations or other guidance for 
implementing the credit established under this section within 180 days 
of the date of enactment.
(f) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of enactment.
<all>