II 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Cleaner, Secure, and 

5 Affordable Thermal Energy Act’’. 


tjames on DSK5CLS3C1PROD with BILLS
2 

•S 1643 IS

1 SEC. 2. CREDIT FOR CONVERSION OF HOME HEATING 

2 USING OIL FUEL TO USING NATURAL GAS OR 

3 BIOMASS FEEDSTOCKS. 

4 (a) IN GENERAL.—Subsection (a) of section 25C of 

5 the Internal Revenue Code of 1986 (relating to nonbusi6 ness energy property) is amended by striking ‘‘and’’ at 

7 the end of paragraph (1), by striking the period at the 

8 end of paragraph (2) and inserting ‘‘, and’’, and by adding 

9 at the end the following new paragraph: 

10 ‘‘(3) the amount of the residential energy prop11 erty expenditures paid or incurred by the taxpayer 

12 during such taxable in a qualifying heating conver13 sion.’’. 

14 (b) DOLLAR LIMITATION.— 

15 (1) IN GENERAL.—Subsection (b) of section 

16 25C of the Internal Revenue Code of 1986 is 

17 amended to read as follows: 

18 ‘‘(b) LIMITATIONS.— 

19 ‘‘(1) GENERAL LIMITATION.—The aggregate 

20 amount of the credits allowed under this section by 

21 reason of paragraphs (1) and (2) of subsection (a) 

22 for taxable years beginning in 2009 and 2010 with 

23 respect to any taxpayer shall not exceed $1,500. 

24 ‘‘(2) QUALIFYING HEATING CONVERSIONS.— 

25 The aggregate amount of the credits allowed under 

26 this section by reason of paragraph (3) of subsection 


tjames on DSK5CLS3C1PROD with BILLS
3 

•S 1643 IS

1 (a) for taxable years beginning in 2009, 2010, and 

2 2011 with respect to any taxpayer shall not exceed 

3 $3,500 ($4,000 in the case of any qualifying heating 

4 conversion using biomass heating appliances de5 scribed in subsection (d)(3)(E)).’’. 

6 (2) NO DOUBLE COUNTING.—Section 25C(e) of 

7 such Code (relating to special rules) is amended by 

8 adding at the end the following new paragraph: 

9 ‘‘(3) NO DOUBLE COUNTING.—No amount 

10 taken into account for purposes of determining a 

11 credit under this section by reason of paragraph (3) 

12 of subsection (a) shall be taken into account for pur13 poses of determining a credit under this section by 

14 reason of paragraphs (1) and (2) of subsection (a).’’. 

15 (c) QUALIFYING HEATING CONVERSION.—Section 

16 25C(d) of the Internal Revenue Code of 1986 (relating 

17 to residential energy property expenditures) is amended 

18 by adding at the end the following new paragraph: 

19 ‘‘(7) QUALIFYING HEATING CONVERSION.— 

20 ‘‘(A) IN GENERAL.—The term ‘qualifying 

21 heating conversion’ means the use of qualified 

22 energy property described in subparagraph (C) 

23 to eliminate the reliance on fuel oil for a heat24 ing system and the removal of the fuel oil 

25 equipment (including any storage tank). 


tjames on DSK5CLS3C1PROD with BILLS
4 

•S 1643 IS

1 ‘‘(B) TREATMENT OF CERTAIN EXPENDI2 TURES.—For purposes of a qualifying heating 

3 conversion, the term ‘residential energy prop4 erty expenditures’ includes fuel service connec5 tion installation costs specifically related to fuel 

6 service to the qualified energy property used in 

7 such conversion, but does not include expendi8 tures for soil cleanup. 

9 ‘‘(C) QUALIFIED ENERGY PROPERTY.—For 

10 purposes of subparagraph (A), qualified energy 

11 property is described in this subparagraph if 

12 such property is— 

13 ‘‘(i) a qualified natural gas hot water 

14 boiler as defined in paragraph (4)(B) by 

15 substituting ‘85 percent’ for ‘90 percent’, 

16 ‘‘(ii) a qualified natural gas furnace 

17 as defined in paragraph (4)(A) by sub18 stituting ‘92 percent’ for ‘95 percent’, or 

19 ‘‘(iii) a biomass heating appliance de20 scribed in paragraph (3)(E).’’. 

21 (d) BIOMASS HEATING APPLIANCE.—Subparagraph 

22 (E) of section 25C(d)(3) of the Internal Revenue Code of 

23 1986 (defining energy-efficient building property) is 

24 amended to read as follows: 


tjames on DSK5CLS3C1PROD with BILLS
5 

•S 1643 IS

1 ‘‘(E) a biomass heating appliance, includ2 ing a stove, boiler, or furnace, which uses the 

3 burning of biomass fuel to heat a unit or to 

4 heat water for use in such unit, and which has 

5 a thermal efficiency rating of at least 75 per6 cent, as measured using a lower heating 

7 value.’’. 

8 (e) APPLICATION OF CREDIT.—Subsection (g) of sec9 tion 25C of the Internal Revenue Code of 1986 (relating 

10 to termination) is amended to read as follows: 

11 ‘‘(g) TERMINATION.—This section shall not apply 

12 with respect to any property placed in service— 

13 ‘‘(1) except as provided in paragraph (2), after 

14 December 31, 2010, and 

15 ‘‘(2) with respect to any qualifying heating con16 version, after December 31, 2011.’’. 

17 (f) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to property placed in service after 

19 the date of the enactment of this Act. 

20 SEC. 3. BONUS DEPRECIATION FOR QUALIFYING HEATING 

21 CONVERSION PROPERTY. 

22 (a) IN GENERAL.—Section 168 of the Internal Rev23 enue Code of 1986 (relating to accelerated cost recovery 

24 system) is amended by adding at the end the following 

25 new subsection: 


tjames on DSK5CLS3C1PROD with BILLS
6 

•S 1643 IS

1 ‘‘(o) SPECIAL ALLOWANCE FOR QUALIFYING HEAT2 ING CONVERSION PROPERTY.— 

3 ‘‘(1) IN GENERAL.—In the case of any quali4 fying heating conversion property— 

5 ‘‘(A) the depreciation deduction provided 

6 by section 167(a) for the taxable year in which 

7 such property is placed in service shall include 

8 an allowance equal to 50 percent of the ad9 justed basis of the qualifying heating conversion 

10 property, and 

11 ‘‘(B) the adjusted basis of the qualifying 

12 heating conversion property shall be reduced by 

13 the amount of such deduction before computing 

14 the amount otherwise allowable as a deprecia15 tion deduction under this chapter for such tax16 able year and any subsequent taxable year. 

17 ‘‘(2) QUALIFYING HEATING CONVERSION PROP18 ERTY.—For purposes of this subsection, the term 

19 ‘qualifying heating conversion property’ means any 

20 property placed in service before January 1, 2012, 

21 which is used in a qualifying heating conversion (as 

22 defined in section 25C(d)(7), except that such con23 version includes the use of a commercial natural gas 

24 hot water boiler or commercial natural gas furnace 

25 whose efficiency is not measured based on an annual 


tjames on DSK5CLS3C1PROD with BILLS
7 

•S 1643 IS

1 fuel utilization efficiency rate but which has a com2 bustion efficiency comparable to the efficiency rate 

3 specified under clause (i) or (ii) of section 

4 25C(d)(7)(C) as the Secretary shall determine (in 

5 consultation with the Department of Energy)).’’. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 this section shall apply to property placed in service after 

8 the date of the enactment of this Act. 

9 SEC. 4. QUALIFIED ENERGY CONSERVATION BONDS FOR 

10 QUALIFYING HEATING CONVERSIONS. 

11 (a) IN GENERAL.—Clause (i) of section 54D(f)(1)(A) 

12 of the Internal Revenue Code of 1986 (defining qualified 

13 conservation purpose) is amended by inserting ‘‘or reduc14 ing reliance on oil for heating systems in publicly-owned 

15 buildings by implementing qualifying heating conversions 

16 (as defined in section 25C(d)(7), except that such a con17 version includes the use of a commercial natural gas hot 

18 water boiler or commercial natural gas furnace whose effi19 ciency is not measured based on an annual fuel utilization 

20 efficiency rate but which has a combustion efficiency com21 parable to the efficiency rate specified under clause (i) or 

22 (ii) of section 25C(d)(7)(C) as the Secretary shall deter23 mine (in consultation with the Department of Energy))’’ 

24 after ‘‘20 percent’’. 


tjames on DSK5CLS3C1PROD with BILLS
8 

•S 1643 IS

1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to obligations issued after the date 

3 of the enactment of this Act. 

4 SEC. 5. EXTENSION OF REDUCED DEPRECIATION PERIOD 

5 FOR NATURAL GAS DISTRIBUTION FACILI6 TIES. 

7 (a) IN GENERAL.—Clause (viii) of section 

8 168(e)(3)(E) of the Internal Revenue Code of 1986 (defin9 ing 15-year property) is amended to read as follows: 

10 ‘‘(viii) any natural gas distribution fa11 cility the original use of which commences 

12 with the taxpayer after April 11, 2005, 

13 and which is placed in service before Janu14 ary 1, 2013, and’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 this section shall take effect as if included in the amend17 ments made section 1325(a) of the Energy Tax Incentives 

18 Act of 2005. 

Æ 


tjames on DSK5CLS3C1PROD with BILLS