April 15,1999

Roth Reintroduces Legislation to Promote Poultry Power

WASHINGTON -- Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today introduced legislation, the Poultry Electric Energy Power Act, known as the "PEEP" Act, that would allow a tax credit for electricity produced by the burning of poultry manure. Congressmen Wayne Gilchrest (R-MD) and David Minge (D-MN) are introducing a companion bill in the House today.

This legislation would amend Section 45 of the tax code which allows a tax break for the production of electricity from environmentally friendly methods. Electricity produced from either wind power or "closed-loop" biomass qualifies for a 1.7 cent per kilowatt-hour tax credit. "Closed-loop" means a crop has to be specifically grown for use as an energy source. This proposal would expand this credit to include electicity produced from poultry litter. It would also extend the expiration date for the credit from June 30, 1999 to June 30, 2005.

The text of Senator Roth's statement from the Senate floor follows:

"I rise today to reintroduce legislation that would amend section 45 of the Internal Revenue Code to provide a tax credit to biomass energy facilities that use poultry litter as a fuel for generating electricity.

"I am pleased to report that my bill has received even more co-sponsors than when it was introduced in the 105th Congress. Fourteen of my colleagues are joining me as original cosponsors: Senators Jeffords, Coverdell, Helms, Robb, Mikulski, Biden, Sessions, Hutchinson, Sarbanes, Leahy, Grams, Shelby, McConnell, and Harkin.

"Mr. President, I am bullish on poultry's future in America. It is hard not to be with world-wide poultry consumption growing at double-digit rates. In the United States, poultry production has tripled since 1975. We now produce almost 8 billion chickens a year to feed the growing world-wide demand.

"In particular, Delaware, Maryland and Virginia produce some of the world's finest poultry. Just last year Delmarva poultry farmers produced over 600 million chickens. Our poultry farmers are among the most productive and efficient in the world.

"As the amount of chickens we produce as a nation has grown, so too has the need to find creative means for disposing of poultry manure. Due to environmental pressures, spreading manure on land is no longer an option in some areas for our rapidly growing poultry industry. In those areas, the nutrient run-off from the manure has been identified as a contributing factor in surface and groundwater pollution.

"Addressing these water quality problems will require a range of innovative approaches. One part of the solution may be to use poultry manure to generate electricity. The United Kingdom has two utility plants that use poultry manure to generate electricity. These two poultry power plants will, when combined with a third scheduled to open soon, burn 50 percent of the UK's total volume of chicken manure.

"The electricity generated by these plants will supply enough power for 37,000 homes. These plants have the support of both the poultry industry and the international environmental community.

"The way this system works is simple. Power stations buy poultry manure from surrounding poultry farmers and transport it to the power station. At the station the manure is burned in a furnace at high temperatures, heating water in a boiler to produce steam which drives a turbine linked to a generator. The electricity is then transferred to the local electricity grid for use by commercial and residential customers. There are no waste products created through this process. Instead, a valuable by product emerges in the form of a nitrogen-free ash, which is marketed as an environmentally friendly fertilizer.

"The legislation I am introducing today will provide a tax credit to energy facilities that use poultry manure as a fuel to generate electricity. It will build on concepts in the tax code that provide incentives for innovative alternative energy production.

"This legislation will provide incentives for electricity generation that will not only help dispose of poultry manure, but will also supply our nation's farmers with a clean fertilizer free of nitrates. It is important for future generations that we continue to explore innovative alternative technologies that will help protect our environment."