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.

This section establishes a renewable materials production credit equal to 10 cents per pound of qualified renewable material—defined as the biobased carbon content (per ASTM D6866) of non-fuel, non-food, non-heat/electricity products produced from U.S.- or possession-sourced biomass via biological, thermal, catalytic, chemical, or combined conversions—produced at a qualified U.S. facility and sold to an unrelated party or used in the taxpayer's trade or business. The credit applies during a 10-year period beginning with the later of the facility's original placement in service, qualifying modifications, or enactment; is allowable to the producer or, by election, the buyer; is part of the general business credit; is transferable; is coordinated with (and excluded from) the clean fuel production credit; cannot overlap with a section 48F investment credit; is reduced for tax-exempt bond financing; and is capped at $10 million annually per facility. The section directs the Secretary of the Treasury, in consultation with the Secretary of Agriculture, to issue implementing regulations within 180 days of enactment and applies to qualified renewable material produced after enactment.

This section establishes a new renewable materials investment credit under new IRC §48F equal to 30% of the qualified investment (i.e., basis) for qualified property placed in service after enactment. Qualified property includes new depreciable tangible personal property (or integral other tangible property, excluding buildings and structural components) used in a qualified facility to produce qualified renewable material, where a qualified facility is a renewable material production facility as defined in IRC §45BB(b)(3) but excludes any facility eligible for the renewable materials production credit under §45BB. The credit is included in the general business credit under §46; its basis is ineligible for the rehabilitation credit under §47 and subject to basis reduction under §49(a)(1)(C)(ix); and it is subject to progress expenditure rules similar to prior §46 rules, reduction for tax-exempt bond-financed property similar to §45(b)(3), and reduced credit rules under §50(a)(2)(E). This section also coordinates the credit with the clean fuel production credit under §45Z(d)(4)(B)(v); makes the credit transferable under §6418; and directs the Secretary of the Treasury, in consultation with the Secretary of Agriculture, to issue implementing regulations within 180 days of enactment.