I 

111TH CONGRESS 

1ST SESSION H. R. 3918 

To amend the Internal Revenue Code of 1986 to provide a tax credit for 

qualified distributed thermal energy storage property, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 22, 2009 

Mr. THOMPSON of California (for himself, Mr. HERGER, Mr. POMEROY, Mr. 

LARSON of Connecticut, Mr. MICHAUD, and Ms. PINGREE of Maine) introduced the following bill; which was referred to the Committee on Ways 

and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a tax credit for qualified distributed thermal energy storage property, 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 ‘‘Thermal Energy Cool5 ing and Heating Act of 2009’’. 


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1 SEC. 2. CREDIT FOR QUALIFIED DISTRIBUTED THERMAL 

2 STORAGE PROPERTY INSTALLED IN A PRIN3 CIPAL RESIDENCE. 

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

5 the Internal Revenue Code of 1986 is amended by striking 

6 ‘‘and’’ at the end of paragraph (4), by striking the period 

7 at the end of paragraph (5) and inserting ‘‘, and’’, and 

8 by adding at the end the following new paragraph: 

9 ‘‘(6) 30 percent of the qualified distributed 

10 thermal energy storage property expenditures made 

11 by the taxpayer during such year.’’. 

12 (b) QUALIFIED DISTRIBUTED THERMAL ENERGY

13 STORAGE PROPERTY EXPENDITURE.—Section 25D(d) of 

14 such Code is amended by adding at the end the following 

15 new paragraph: 

16 ‘‘(6) QUALIFIED DISTRIBUTED THERMAL EN17 ERGY STORAGE PROPERTY EXPENDITURE.—The 

18 term ‘qualified distributed thermal energy storage 

19 property expenditure’ means an expenditure for 

20 qualified distributed thermal energy storage property 

21 (as defined in section 48(e)) installed on or in con22 nection with a dwelling unit located in the United 

23 States and used as a principal residence (within the 

24 meaning of section 121) by the taxpayer.’’. 

25 (c) MODIFICATION OF MAXIMUM CREDIT.— 


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1 (1) IN GENERAL.—Paragraph (1) of section 

2 25D(b) of such Code is amended by striking ‘‘and’’ 

3 at the end of subparagraph (B), by striking the pe4 riod at the end of subparagraph (C), and by adding 

5 at the end the following new subparagraphs: 

6 ‘‘(D) $500 with respect to each half kilo7 watt of peak demand reduction (as defined in 

8 section 48(e)(3)) by cooling systems which are 

9 qualified distributed thermal energy storage 

10 property (as defined in section 48(e)) for which 

11 qualified distributed thermal energy storage 

12 property expenditures are made, and 

13 ‘‘(E) $150 for each nameplate kilowatt 

14 input of thermal heat storage by heating sys15 tems which are qualified distributed thermal en16 ergy storage property (as defined in section 

17 48(e)) for which qualified distributed thermal 

18 energy storage property expenditures are 

19 made.’’. 

20 (2) CONFORMING AMENDMENTS.—Paragraph 

21 (4) of section 25D(e) of such Code is amended— 

22 (A) by amending so much of such para23 graph as precedes subparagraph (B) to read as 

24 follows: 


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1 ‘‘(4) LIMITATIONS IN CASE OF JOINT OCCU2 PANCY.—In the case of any dwelling unit which is 

3 jointly occupied and used during any calendar year 

4 as a residence by two or more individuals the fol5 lowing rules shall apply: 

6 ‘‘(A) MAXIMUM EXPENDITURES.—The 

7 maximum amount of expenditures which may 

8 be taken into account under subsection (a) by 

9 all such individuals with respect to such dwell10 ing unit during such calendar year shall be— 

11 ‘‘(i) $1,667 in the case of each half 

12 kilowatt of capacity of qualified fuel cell 

13 property (as defined in section 48(c)(1)) 

14 for which qualified fuel cell property ex15 penditures are made, 

16 ‘‘(ii) $1,667 in case of each half kilo17 watt of peak demand reduction (as defined 

18 in section 48(e)(3)) by cooling systems 

19 which are qualified distributed thermal en20 ergy storage property (as defined in section 

21 48(e)) for which qualified distributed ther22 mal energy storage property expenditures 

23 are made, and 

24 ‘‘(iii) $333 in the case of each name25 plate kilowatt input of thermal heat storVerDate Nov 24 2008 03:34 Oct 23, 2009 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3918.IH H3918

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1 age by heating systems which are qualified 

2 distributed thermal energy storage prop3 erty (as defined in section 48(e)) for which 

4 qualified distributed thermal energy stor5 age property expenditures are made.’’, and 

6 (B) by adding at the end of subparagraph 

7 (B) the following: 

8 ‘‘This subparagraph shall be applied separately 

9 with respect to qualified fuel cell property ex10 penditures, qualified distributed thermal energy 

11 storage property expenditures with respect cool12 ing systems, and qualified distributed thermal 

13 energy storage property with respect to heating 

14 systems.’’. 

15 (d) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to taxable years beginning after 

17 the date of the enactment of this Act. 

18 SEC. 3. BUSINESS CREDIT FOR QUALIFIED DISTRIBUTED 

19 THERMAL ENERGY STORAGE PROPERTY. 

20 (a) IN GENERAL.—Subparagraph (A) of section 

21 48(a)(3) of the Internal Revenue Code of 1986 is amended 

22 by deleting ‘‘or’’ at the end of clause (vi), by inserting 

23 ‘‘or’’ at the end of clause (vii), and by inserting clause 

24 (vii) the following new clause: 


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1 ‘‘(viii) qualified distributed thermal 

2 energy storage property but only with re3 spect to periods ending before January 1, 

4 2017,’’. 

5 (b) 30 PERCENT CREDIT.—Clause (i) of section 

6 48(a)(2)(A) of such Code is amended by striking ‘‘and’’ 

7 at the end of subclause (III) and by inserting after sub8 clause (IV) the following new subclause: 

9 ‘‘(V) qualified distributed ther10 mal energy storage property, and’’. 

11 (c) QUALIFIED DISTRIBUTED THERMAL ENERGY

12 STORAGE PROPERTY.—Section 48 of such Code is amend13 ed by adding at the end the following new subsection: 

14 ‘‘(e) QUALIFIED DISTRIBUTED THERMAL ENERGY

15 STORAGE PROPERTY.—For the purposes of this section: 

16 ‘‘(1) IN GENERAL.—The term ‘qualified distrib17 uted thermal energy storage property’ means a heat18 ing or cooling system which— 

19 ‘‘(A) consists of mechanical thermal heat 

20 storage or cooling storage components which 

21 are designed to create, store, and supply off 

22 peak or renewable electric distributed thermal 

23 energy or to reduce or avoid peak electrical de24 mand of conventional mechanical cooling or 

25 heating equipment, 


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1 ‘‘(B) has a nameplate operational capa2 bility to deliver a minimum of 29,000 Btu per 

3 hour of cooling capacity or a minimum of in4 stalled nameplate thermal heat storage capacity 

5 of 85,000 Btu, 

6 ‘‘(C) is designed to deliver such cooling ca7 pacity for a minimum continuous period of 3 

8 hours, available daily from May 1 through Sep9 tember 30, or a minimum of 15,000 Btu per 

10 hour of heating capacity for a minimum contin11 uous period of 3 hours, available daily from Oc12 tober 1 through April 30, coincident with day13 time peak load periods, 

14 ‘‘(D) is designed so as to utilize off-peak or 

15 renewable electricity or reduce peak kilowatt de16 mand by 90 percent for the heating and cooling 

17 load served, and 

18 ‘‘(E) is certified by the manufacturer as 

19 designed so as not to exceed the energy con20 sumption of conventional HVAC equipment by 

21 more than 10 percent. 

22 ‘‘(2) INCLUSION OF RELATED EQUIPMENT.— 

23 Such term shall include any secondary components 

24 which integrate the distributed thermal energy stor25 age system described in paragraph (1) with the conVerDate Nov 24 2008 03:34 Oct 23, 2009 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3918.IH H3918

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1 ventional heating or cooling system, including equip2 ment and controls for measuring and reporting oper3 ation and performance, but shall not include any 

4 portion of the conventional heating or cooling sys5 tem. 

6 ‘‘(3) LIMITATION.— 

7 ‘‘(A) IN GENERAL.—In case of qualified 

8 distributed thermal energy storage property 

9 placed in service during the taxable year, the 

10 credit otherwise determined under this section 

11 for such year with respect to such property 

12 shall not exceed an amount equal to $500 for 

13 each 0.5 kilowatt of peak demand reduction for 

14 property placed in service for cooling or $150 

15 for each nameplate kilowatt input for property 

16 placed in service for heating. 

17 ‘‘(B) PEAK DEMAND REDUCTION.—For 

18 purposes of this subsection, the term ‘peak de19 mand reduction’ means the removal or avoid20 ance of electrical demand (kW) on the utility 

21 grid system during the daily time period of high 

22 electrical demand. The peak demand reduction 

23 for air conditioning property shall be deter24 mined based on Energy Efficiency Ratio (EER) 

25 standards for residential and commercial air 


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1 conditioning equipment, established under the 

2 Energy Policy and Conservation Act of 1975.’’. 

3 (d) EFFECTIVE DATE.—The amendments made by 

4 this Act shall apply to taxable years beginning after the 

5 date of the enactment of this Act. 

6 SEC. 4. QUALIFIED DISTRIBUTED THERMAL ENERGY STOR7 AGE PROPERTY MADE ELIGIBLE FOR NEW 

8 CLEAN RENEWABLE ENERGY BONDS. 

9 (a) IN GENERAL.—Paragraph (1) of section 54C(d) 

10 of the Internal Revenue Code of 1986 is amended to read 

11 as follows: 

12 ‘‘(1) QUALIFIED RENEWABLE ENERGY FACIL13 ITY.—The term ‘qualified renewable energy facility’ 

14 means— 

15 ‘‘(A) any qualified facility (as determined 

16 under section 45(d) without regard to para17 graphs (8) and (10) thereof and to any placed 

18 in service date), and 

19 ‘‘(B) any qualified distributed thermal en20 ergy storage property (as defined in section 

21 48(e)), 

22 owned by a public power provider, a governmental 

23 body, or a cooperative electric company.’’. 


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

2 this section shall apply to obligations issued after the date 

3 of the enactment of this Act. 

Æ 


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