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107TH CONGRESS

1ST SESSION H. R. 1657

To amend the Internal Revenue Code of 1986 to extend and modify the

credit for electricity produced from biomass, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 1, 2001

Mr. HERGER (for himself, Mr. MATSUI, Mr. FOLEY, Mr. RAMSTAD, Mrs.

THURMAN, Mr. JONES of North Carolina, and Mr. PETERSON of Minnesota) 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 extend

and modify the credit for electricity produced from biomass, 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 ‘‘Biomass Energy Eq5 uity Act of 2001’’.
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1 SEC. 2. CREDIT FOR ELECTRICITY PRODUCED FROM BIO2 MASS.

3 (a) EXTENSION AND MODIFICATION OF PLACED-IN4 SERVICE RULES.—Paragraph (3) of section 45(c) of the

5 Internal Revenue Code of 1986 is amended—

6 (1) by striking subparagraph (B) and inserting

7 the following new subparagraph:

8 ‘‘(B) CLOSED-LOOP BIOMASS FACILITY.—

9 In the case of a facility using closed-loop bio10 mass to produce electricity, the term ‘qualified

11 facility’ means any facility—

12 ‘‘(i) owned by the taxpayer which is

13 originally placed in service after December

14 31, 1992, and before January 1, 2007, or

15 ‘‘(ii) owned by the taxpayer which is

16 originally placed in service on or before

17 December 31, 1992, and modified to use

18 closed-loop biomass to co-fire with coal be19 fore January 1, 2007.’’,

20 (2) by striking ‘‘2002’’ in subparagraph (C)

21 and inserting ‘‘2007’’, and

22 (3) by adding at the end the following new sub23 paragraphs:

24 ‘‘(D) BIOMASS FACILITIES.—In the case of

25 a facility using biomass (other than closed-loop

26 biomass) to produce electricity, the term ‘quali-
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1 fied facility’ means any facility owned by the

2 taxpayer which is originally placed in service be3 fore January 1, 2007.

4 ‘‘(E) SPECIAL RULES.—In the case of a

5 qualified facility described in subparagraph

6 (B)(ii) or (D)—

7 ‘‘(i) the 10-year period referred to in

8 subsection (a) shall be treated as beginning

9 no earlier than the date of the enactment

10 of this paragraph,

11 ‘‘(ii) subsection (b)(3) shall not apply

12 to any such facility originally placed in

13 service before January 1, 1997, and

14 ‘‘(iii) if such a facility is leased and

15 the operator thereof is the lessee, such les16 see (and not the owner) shall be treated

17 for purposes of this section as owning such

18 facility.’’

19 (b) BIOMASS FACILITIES.—

20 (1) IN GENERAL.—Section 45(c)(1) of the In21 ternal Revenue Code of 1986 (defining qualified en22 ergy resources) is amended—

23 (A) by striking ‘‘and’’ at the end of sub24 paragraph (B),
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1 (B) by striking the period at the end of

2 subparagraph (C) and inserting ‘‘, and’’, and

3 (C) by adding at the end the following new

4 subparagraph:

5 ‘‘(D) biomass (other than closed-loop bio6 mass).’’.

7 (2) BIOMASS DEFINED.—Section 45(c) of such

8 Code (relating to definitions) is amended by adding

9 at the end the following new paragraph:

10 ‘‘(5) BIOMASS.—The term ‘biomass’ means any

11 solid, nonhazardous, cellulosic waste material which

12 is segregated from other waste materials and which

13 is derived from—

14 ‘‘(A) any of the following forest-related re15 sources: mill residues, precommercial thinnings,

16 slash, and brush, but not including old-growth

17 timber,

18 ‘‘(B) solid wood waste materials, including

19 waste pallets, crates, dunnage, manufacturing

20 and construction wood wastes (other than pres21 sure-treated, chemically-treated, or painted

22 wood wastes), and landscape or right-of-way

23 tree trimmings, but not including municipal

24 solid waste (garbage), gas derived from the bio-
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1 degradation of solid waste, or paper that is

2 commonly recycled, or

3 ‘‘(C) agriculture sources, including orchard

4 tree crops, vineyard, grain, legumes, sugar, and

5 other crop by-products or residues.’’.

6 (c) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to electricity sold after the date

8 of the enactment of this Act.

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