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

Bill Number

H.R. 8137

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Taxation

Status

Introduced

Latest Action

2026-03-27: Referred to the House Committee on Ways and Means.

Last Updated

2026-05-21T08:08:32Z

AI-Generated Summary

H.R. 8137: Renewable Materials Tax Credits

Purpose

To encourage the production and investment in non-fuel, non-food renewable materials derived from biomass (plant or waste-based organic matter) by creating two new tax credits under the Internal Revenue Code (IRC), promoting domestic manufacturing of biobased products like chemicals.

Key Provisions

Renewable Materials Production Credit (New IRC Section 45BB)

• Provides 10 cents per pound for the biobased carbon content (measured by ASTM D6866 standard) of qualified renewable material produced at a U.S. or U.S. possession facility.
• Qualified material must be:
• Produced from biomass using biological, thermal, catalytic, or chemical conversion.
• Sold to an unrelated party or used in the producer's trade or business.
• Exclusions: Fuels for vehicles/vessels/aircraft, heat/electricity generators, food/feed, non-U.S. biomass, or coprocessed with non-biomass.
• Applies for a 10-year period per facility, starting from placement in service, major modifications, or enactment.
• Limits: $10 million max per facility per year; reduced if tax-exempt bonds used.
• Credit goes to producer but can be elected to buyer; transferable; part of general business credit.

Renewable Materials Investment Credit (New IRC Section 48F)

• Provides 30% credit on the cost (basis) of new depreciable equipment or property integral to a qualified facility producing renewable materials.
• No overlap: Facilities claiming production credit cannot claim investment credit, and vice versa.
• Applies to property placed in service after enactment; reduced if tax-exempt bonds used; allows progress payments.

General Rules

• Coordinates with clean fuel production credit (excludes overlap).
• Treasury Secretary (with Agriculture Secretary) must issue regulations within 180 days of enactment.
• Effective: Production credit for material after enactment; investment credit for property after enactment.

Significant Changes to Existing Law

• Adds new IRC sections 45BB (production credit) and 48F (investment credit) to business and investment tax credit subparts.
• Makes credits transferable under IRC Section 6418 (allows sale to third parties).
• Updates general business credit list (Section 38), at-risk rules (Section 49), and others for consistency.
• No changes to fuel/food biomass credits; explicitly excludes them.

Potential Impacts

• Government agencies: IRS/Treasury gains administrative burden (regulations, claims); potential revenue loss from credits but promotes bioeconomy jobs/revenue.
• Citizens/businesses: Lowers costs for building/operating U.S. biobased chemical/materials plants, spurring investment and production.
• International relations: Favors U.S./possession-sourced biomass, potentially boosting domestic agriculture/bioindustry over imports.

Main Stakeholders Affected

• Producers/investors: Companies manufacturing biobased chemicals/products (e.g., bioplastics, non-fuel solvents).
• Biomass suppliers: U.S. farmers, forestry, waste processors.
• Taxpayers: Eligible for credits or buyers via transfer.
• Government: IRS (enforcement), Treasury/Department of Agriculture (guidance).

Notable Legal, Constitutional, or Political Implications

• Legal: Relies on existing IRC framework (e.g., general business credits); first-claim rule prevents double-claiming in supply chains; cap limits abuse.
• Constitutional: Standard tax incentive under Congress's taxing power; no apparent federalism issues as facilities must be domestic.
• Political: Supports "renewable materials" (non-energy biomass uses), differentiating from fuel subsidies; bipartisan sponsors signal cross-aisle appeal for ag/bio-manufacturing.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Fischbach, Michelle [R-MN-7]

Cosponsors (4)

Rep. Budzinski, Nikki [D-IL-13], Rep. Baird, James R. [R-IN-4], Rep. Miller-Meeks, Mariannette [R-IA-1], Rep. Hinson, Ashley [R-IA-2]

Recent Actions

• 2026-03-27: Referred to the House Committee on Ways and Means.
• 2026-03-27: Introduced in House
• 2026-03-27: Introduced in House

Bill Versions

• To amend the Internal Revenue Code of 1986 to establish tax credits for the production of, and investment in, certain renewable materials. — issued 2026-03-27 — PDF (13 pages)