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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1643 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1643

 To amend the Internal Revenue Code of 1986 to allow a credit for the 
 conversion of heating using oil fuel to using natural gas or biomass 
                  feedstocks, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             August 6, 2009

Ms. Snowe (for herself and Mr. Bingaman) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To amend the Internal Revenue Code of 1986 to allow a credit for the 
 conversion of heating using oil fuel to using natural gas or biomass 
                  feedstocks, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Cleaner, Secure, and Affordable 
Thermal Energy Act''.

SEC. 2. CREDIT FOR CONVERSION OF HOME HEATING USING OIL FUEL TO USING 
              NATURAL GAS OR BIOMASS FEEDSTOCKS.

    (a) In General.--Subsection (a) of section 25C of the Internal 
Revenue Code of 1986 (relating to nonbusiness energy property) is 
amended by striking ``and'' at the end of paragraph (1), by striking 
the period at the end of paragraph (2) and inserting ``, and'', and by 
adding at the end the following new paragraph:
            ``(3) the amount of the residential energy property 
        expenditures paid or incurred by the taxpayer during such 
        taxable in a qualifying heating conversion.''.
    (b) Dollar Limitation.--
            (1) In general.--Subsection (b) of section 25C of the 
        Internal Revenue Code of 1986 is amended to read as follows:
    ``(b) Limitations.--
            ``(1) General limitation.--The aggregate amount of the 
        credits allowed under this section by reason of paragraphs (1) 
        and (2) of subsection (a) for taxable years beginning in 2009 
        and 2010 with respect to any taxpayer shall not exceed $1,500.
            ``(2) Qualifying heating conversions.--The aggregate amount 
        of the credits allowed under this section by reason of 
        paragraph (3) of subsection (a) for taxable years beginning in 
        2009, 2010, and 2011 with respect to any taxpayer shall not 
        exceed $3,500 ($4,000 in the case of any qualifying heating 
        conversion using biomass heating appliances described in 
        subsection (d)(3)(E)).''.
            (2) No double counting.--Section 25C(e) of such Code 
        (relating to special rules) is amended by adding at the end the 
        following new paragraph:
            ``(3) No double counting.--No amount taken into account for 
        purposes of determining a credit under this section by reason 
        of paragraph (3) of subsection (a) shall be taken into account 
        for purposes of determining a credit under this section by 
        reason of paragraphs (1) and (2) of subsection (a).''.
    (c) Qualifying Heating Conversion.--Section 25C(d) of the Internal 
Revenue Code of 1986 (relating to residential energy property 
expenditures) is amended by adding at the end the following new 
paragraph:
            ``(7) Qualifying heating conversion.--
                    ``(A) In general.--The term `qualifying heating 
                conversion' means the use of qualified energy property 
                described in subparagraph (C) to eliminate the reliance 
                on fuel oil for a heating system and the removal of the 
                fuel oil equipment (including any storage tank).
                    ``(B) Treatment of certain expenditures.--For 
                purposes of a qualifying heating conversion, the term 
                `residential energy property expenditures' includes 
                fuel service connection installation costs specifically 
                related to fuel service to the qualified energy 
                property used in such conversion, but does not include 
                expenditures for soil cleanup.
                    ``(C) Qualified energy property.--For purposes of 
                subparagraph (A), qualified energy property is 
                described in this subparagraph if such property is--
                            ``(i) a qualified natural gas hot water 
                        boiler as defined in paragraph (4)(B) by 
                        substituting `85 percent' for `90 percent',
                            ``(ii) a qualified natural gas furnace as 
                        defined in paragraph (4)(A) by substituting `92 
                        percent' for `95 percent', or
                            ``(iii) a biomass heating appliance 
                        described in paragraph (3)(E).''.
    (d) Biomass Heating Appliance.--Subparagraph (E) of section 
25C(d)(3) of the Internal Revenue Code of 1986 (defining energy-
efficient building property) is amended to read as follows:
                    ``(E) a biomass heating appliance, including a 
                stove, boiler, or furnace, which uses the burning of 
                biomass fuel to heat a unit or to heat water for use in 
                such unit, and which has a thermal efficiency rating of 
                at least 75 percent, as measured using a lower heating 
                value.''.
    (e) Application of Credit.--Subsection (g) of section 25C of the 
Internal Revenue Code of 1986 (relating to termination) is amended to 
read as follows:
    ``(g) Termination.--This section shall not apply with respect to 
any property placed in service--
            ``(1) except as provided in paragraph (2), after December 
        31, 2010, and
            ``(2) with respect to any qualifying heating conversion, 
        after December 31, 2011.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 3. BONUS DEPRECIATION FOR QUALIFYING HEATING CONVERSION PROPERTY.

    (a) In General.--Section 168 of the Internal Revenue Code of 1986 
(relating to accelerated cost recovery system) is amended by adding at 
the end the following new subsection:
    ``(o) Special Allowance for Qualifying Heating Conversion 
Property.--
            ``(1) In general.--In the case of any qualifying heating 
        conversion property--
                    ``(A) the depreciation deduction provided by 
                section 167(a) for the taxable year in which such 
                property is placed in service shall include an 
                allowance equal to 50 percent of the adjusted basis of 
                the qualifying heating conversion property, and
                    ``(B) the adjusted basis of the qualifying heating 
                conversion property shall be reduced by the amount of 
                such deduction before computing the amount otherwise 
                allowable as a depreciation deduction under this 
                chapter for such taxable year and any subsequent 
                taxable year.
            ``(2) Qualifying heating conversion property.--For purposes 
        of this subsection, the term `qualifying heating conversion 
        property' means any property placed in service before January 
        1, 2012, which is used in a qualifying heating conversion (as 
        defined in section 25C(d)(7), except that such conversion 
        includes the use of a commercial natural gas hot water boiler 
        or commercial natural gas furnace whose efficiency is not 
        measured based on an annual fuel utilization efficiency rate 
        but which has a combustion efficiency comparable to the 
        efficiency rate specified under clause (i) or (ii) of section 
        25C(d)(7)(C) as the Secretary shall determine (in consultation 
        with the Department of Energy)).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after the date of the enactment of this 
Act.

SEC. 4. QUALIFIED ENERGY CONSERVATION BONDS FOR QUALIFYING HEATING 
              CONVERSIONS.

    (a) In General.--Clause (i) of section 54D(f)(1)(A) of the Internal 
Revenue Code of 1986 (defining qualified conservation purpose) is 
amended by inserting ``or reducing reliance on oil for heating systems 
in publicly-owned buildings by implementing qualifying heating 
conversions (as defined in section 25C(d)(7), except that such a 
conversion includes the use of a commercial natural gas hot water 
boiler or commercial natural gas furnace whose efficiency is not 
measured based on an annual fuel utilization efficiency rate but which 
has a combustion efficiency comparable to the efficiency rate specified 
under clause (i) or (ii) of section 25C(d)(7)(C) as the Secretary shall 
determine (in consultation with the Department of Energy))'' after ``20 
percent''.
    (b) Effective Date.--The amendment made by this section shall apply 
to obligations issued after the date of the enactment of this Act.

SEC. 5. EXTENSION OF REDUCED DEPRECIATION PERIOD FOR NATURAL GAS 
              DISTRIBUTION FACILITIES.

    (a) In General.--Clause (viii) of section 168(e)(3)(E) of the 
Internal Revenue Code of 1986 (defining 15-year property) is amended to 
read as follows:
                            ``(viii) any natural gas distribution 
                        facility the original use of which commences 
                        with the taxpayer after April 11, 2005, and 
                        which is placed in service before January 1, 
                        2013, and''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the amendments made section 1325(a) of the 
Energy Tax Incentives Act of 2005.
                                 <all>
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