July 30, 2009Client Alert

Applications Now Being Accepted for USDA Biomass Crop Assistance Program

Over the past several months much attention has been focused on energy financing opportunities in the federal American Recovery and Reinvestment Act. However, there are still numerous opportunities for financing renewable energy projects contained in other previously passed Acts. For example, the Food, Conservation and Energy Act of 2008 ("the Farm Bill") provided numerous new funding opportunities in the renewable energy sector. On Wednesday, July 29, 2009, the U.S. Department of Agriculture (“USDA”) Farm Service Agency (“FSA”) announced it is now accepting applications from biomass conversion facilities (“BCF”) under the new Biomass Crop Assistance Program (“BCAP”) aimed at increasing production of renewable energy. ( )

Biomass Crop Assistance Program

BCAP was created to support the production of eligible crops for the conversion to advanced biofuels or bioenergy. Under BCAP, the USDA will provide financial assistance to biomass producers who sell their crops to qualified BCF’s for up to 75% of the cost of establishing and planting eligible biomass crops within a BCAP project area. The USDA will also provide annual payments to help compensate for lost opportunity costs until the crops are established. In addition, the USDA will provide further financial assistance for the collection, harvest, storage, and transportation (“CHST”) of biomass crops by matching the amounts paid to producers by the BCF, up to $45 per dry ton. The purpose of the matching payments is to assist biomass producers with the CHST cost of delivering biomass to a qualified BCF. As outlined in the program, BCF’s are those facilities that convert eligible material into heat, power, biobased products, advanced biofuels, or any combination of these. BCF’s may become “qualified” by submitting a Memorandum of Understanding (“MOU”) to the FSA state offices. Once an agreement is signed between the FSA and a BCF, and funding through the program is provided, the BCF can begin accepting materials. After the produce is delivered, a producer must provide FSA with documentation of product quantity, quality and payment rate.

This client alert is one of a series designed to provide summaries of and information and guidance regarding opportunities and relief made available through the Farm Bill. All of our Farm Bill client alerts are available on Michael Best's Renewable Energy publications page. For additional information on this program and to learn more about the application process, guidelines and other considerations, please feel free to contact one of the authors of this alert or your Michael Best attorney.

If you are interested in learning about other provisions included in the Farm Bill, the Michael Best Renewable Energy Team is prepared to assist you in understanding the implications and in developing and implementing a strategy to secure the benefits of this legislation. Specifically, we will assist you to identify opportunities, prepare appropriate proposals and make targeted contacts to secure funds. We will also work with you to ensure that your applications are tailored to meet your needs and that your funded projects proceed in compliance with award requirements and applicable laws.

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