H.R.536 - Agricultural Environmental Stewardship Act of 2025 (119th Congress)
Summary
H.R. 536, the Agricultural Environmental Stewardship Act of 2025, proposes an amendment to the Internal Revenue Code of 1986. The amendment aims to extend the energy credit for qualified biogas property by one year, moving the expiration date from December 31, 2024, to December 31, 2025. This extension would apply to biogas property construction beginning after December 31, 2024.
The bill was introduced in the House of Representatives on January 16, 2025, by Ms. Scholten and Mr. Valadao, and was referred to the Committee on Ways and Means. The purpose of the bill is to promote agricultural environmental stewardship through the extension of energy credits for biogas property.
Biogas is produced from the anaerobic digestion of organic matter, such as agricultural waste, and can be used as a renewable energy source.
Expected Effects
The primary effect of this bill would be to incentivize the continued development and construction of qualified biogas property through a one-year extension of the existing energy credit. This could lead to increased investment in biogas production facilities. It may also encourage farmers and other agricultural entities to adopt biogas technology, potentially reducing reliance on fossil fuels and promoting sustainable waste management practices.
Extending the energy credit could provide financial benefits to businesses involved in biogas production, making projects more economically viable. This could lead to an increase in the number of biogas facilities being built and operated. The extension may also support job creation in the renewable energy sector and related industries.
Ultimately, the bill aims to support environmentally friendly agricultural practices and contribute to the broader goal of transitioning to a more sustainable energy economy.
Potential Benefits
- Increased Renewable Energy Production: Encourages the production of biogas, a renewable energy source, reducing reliance on fossil fuels.
- Support for Agricultural Sector: Provides financial incentives for farmers and agricultural businesses to adopt sustainable practices.
- Environmental Benefits: Promotes the use of agricultural waste for energy production, reducing methane emissions and improving waste management.
- Job Creation: Could lead to new jobs in the construction, operation, and maintenance of biogas facilities.
- Economic Development: Stimulates investment in renewable energy infrastructure and technology.
Potential Disadvantages
- Limited Scope: The one-year extension may not provide sufficient long-term certainty for investors, potentially limiting the impact.
- Potential Cost to Taxpayers: The energy credit could reduce government tax revenue, potentially increasing the budget deficit.
- Administrative Complexity: Implementing and monitoring the energy credit may create additional administrative burdens for the IRS.
- Dependence on Subsidies: Reliance on tax credits may hinder the long-term sustainability of the biogas industry if the credits are not extended further.
- Uncertain Environmental Impact: The actual environmental benefits of biogas production depend on factors such as feedstock sourcing and facility efficiency.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution, as it aims to promote sustainable energy practices and support the agricultural sector. The Constitution grants Congress the power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1).
By providing tax credits for biogas property, the bill exercises this power to incentivize activities that are deemed beneficial to the environment and the economy. There are no apparent conflicts with specific constitutional rights or limitations, such as those outlined in the Bill of Rights.
However, the extent to which such tax credits are effective in achieving their intended goals is a matter of policy debate and economic analysis, rather than constitutional law.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).