Biomass Thermal Utilization Act of 2017

Summary: Biomass Thermal Utilization Act of 2017 or the BTU Act of 2017 This bill amends the Internal Revenue Code to include 30% of qualified biomass fuel property expenditures for property placed in service before 2022 in the residential energy efficient property tax credit. A &quot;qualified biomass fuel property expenditure&quot; is an expenditure for property which uses the burning of biomass fuel (a plant-derived fuel available on a renewable or recurring basis) to heat a dwelling used as a residence, or to heat water for use in such dwelling, and which has a thermal efficiency rating of at least 75%. The bill also allows: (1) a 15% energy tax credit until 2022 for investment in open-loop biomass heating property, including boilers or furnaces that operate at thermal output efficiencies of at least 65% and provide thermal energy in the form of heat, hot water, or steam for space heating, air conditioning, domestic hot water, or industrial process heat; and (2) a 30% credit until 2022 for investment in such property that operates at a thermal output efficiency of at least 80%. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Biomass Thermal Utilization Act of 
2017'' or the ``BTU Act of 2017''.

SEC. 2. RESIDENTIAL ENERGY-EFFICIENT PROPERTY CREDIT FOR BIOMASS FUEL 
              PROPERTY EXPENDITURES.

    (a) Allowance of Credit.--Subsection (a) of section 25D of the 
Internal Revenue Code of 1986 is amended--
            (1) by striking ``and'' at the end of paragraph (4);
            (2) by striking the period at the end of paragraph (5) and 
        inserting ``, and''; and
            (3) by adding at the end the following new paragraph:
            ``(6) 30 percent of the qualified biomass fuel property 
        expenditures made by the taxpayer during such year.''.
    (b) Qualified Biomass Fuel Property Expenditures.--Subsection (d) 
of section 25D of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new paragraph:
            ``(6) Qualified biomass fuel property expenditure.--
                    ``(A) In general.--The term `qualified biomass fuel 
                property expenditure' means an expenditure for 
                property--
                            ``(i) which uses the burning of biomass 
                        fuel to heat a dwelling unit located in the 
                        United States and used as a residence by the 
                        taxpayer, or to heat water for use in such a 
                        dwelling unit, and
                            ``(ii) which has a thermal efficiency 
                        rating of at least 75 percent (measured by the 
                        higher heating value of the fuel).
                    ``(B) Biomass fuel.--For purposes of this section, 
                the term `biomass fuel' means any plant-derived fuel 
                available on a renewable or recurring basis, including 
                agricultural crops and trees, wood and wood waste and 
                residues, plants (including aquatic plants), grasses, 
                residues, and fibers. Such term includes densified 
                biomass fuels such as wood pellets.''.
    (c) Application of Termination Date.--Subsection (h) of section 25D 
of the Internal Revenue Code of 1986 is amended by striking ``and 
qualified solar water heating property expenditures'' and inserting ``, 
qualified solar water heating property expenditures, and qualified 
biomass fuel property expenditures''.
    (d) Effective Date.--The amendments made by this section shall 
apply to expenditures paid or incurred in taxable years beginning after 
December 31, 2016.

SEC. 3. INVESTMENT TAX CREDIT FOR BIOMASS HEATING PROPERTY.

    (a) In General.--Subparagraph (A) of section 48(a)(3) of the 
Internal Revenue Code of 1986 is amended--
            (1) at the end of clause (vi) by striking ``or'';
            (2) at the end of clause (vii) by inserting ``or''; and
            (3) by inserting after clause (vii) the following new 
        clause:
                            ``(viii) open-loop biomass (within the 
                        meaning of section 45(c)(3)) heating property, 
                        including boilers or furnaces that operate at 
                        thermal output efficiencies of not less than 65 
                        percent (measured by the higher heating value 
                        of the fuel) and that provide thermal energy in 
                        the form of heat, hot water, or steam for space 
                        heating, air conditioning, domestic hot water, 
                        or industrial process heat,''.
    (b) 30-Percent and 15-Percent Credits.--
            (1) Energy percentage.--
                    (A) In general.--Subparagraph (A) of section 
                48(a)(2) of the Internal Revenue Code of 1986 is 
                amended by redesignating clause (ii) as clause (iii) 
                and by inserting after clause (i) the following new 
                clause:
                            ``(ii) except as provided in clause (i)(V), 
                        15 percent in the case of energy property 
                        described in paragraph (3)(A)(viii), but only 
                        with respect to property the construction of 
                        which begins before January 1, 2022, and''.
                    (B) Conforming amendment.--Clause (iii) of section 
                48(a)(2)(A) of such Code, as so redesignated, is 
                amended by inserting ``or (ii)'' after ``clause (i)''.
            (2) Increased credit for greater efficiency.--Clause (i) of 
        section 48(a)(2)(A) of such Code is amended by striking ``and'' 
        at the end of subclause (III) and by inserting after subclause 
        (IV) the following new subclause:
                                    ``(V) energy property described in 
                                paragraph (3)(A)(viii) which operates 
                                at a thermal output efficiency of not 
                                less than 80 percent (measured by the 
                                higher heating value of the fuel), but 
                                only with respect to property the 
                                construction of which begins before 
                                January 1, 2022,''.
    (c) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 2016, in taxable years ending after 
such date, under rules similar to the rules of section 48(m) of the 
Internal Revenue Code of 1986 (as in effect on the day before the date 
of the enactment of the Revenue Reconciliation Act of 1990).