I 

108TH CONGRESS 

2D SESSION H. R. 5266

To amend the Internal Revenue Code of 1986 to encourage investment in 

facilities which use woody biomass to produce electricity. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 7, 2004

Mr. MCINNIS 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 encourage 

investment in facilities which use woody biomass to 

produce electricity.

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

3 SECTION 1. CREDIT FOR INVESTMENT IN FACILITIES PRO4 DUCING ELECTRICITY FROM WOODY BIO5 MASS. 

6 (a) IN GENERAL.—Subpart E of part IV of sub7 chapter A of chapter 1 of the Internal Revenue Code of 

8 1986 (relating to rules for computing investment credit) 

9 is amended by inserting after section 48 the following new 

10 section: 
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1 ‘‘SEC. 48A. FACILITIES PRODUCING ELECTRICITY FROM 

2 WOODY BIOMASS. 

3 ‘‘(a) IN GENERAL.—For purposes of section 46, the 

4 woody biomass technology credit for any taxable year is 

5 an amount equal to 20 percent of the basis of qualified 

6 woody biomass energy property placed in service during 

7 such year. 

8 ‘‘(b) QUALIFIED WOODY BIOMASS ENERGY PROP9 ERTY.—For purposes of this section, the term ‘qualified 

10 woody biomass energy property’ means section 1245 prop11 erty—

12 ‘‘(1) which is used to produce electricity from 

13 woody biomass, 

14 ‘‘(2) which is placed in service after the date of 

15 the enactment of this section, and before January 1, 

16 2010, 

17 ‘‘(3) the original use of which commences with 

18 the taxpayer, and 

19 ‘‘(4) which has a useful life of not less than 5 

20 years. 

21 ‘‘(c) WOODY BIOMASS.—For purposes of this section, 

22 the term ‘woody biomass’ means trees and woody plants, 

23 including bark, limbs, tops, needles, leaves, stumps, roots 

24 and other woody parts and debris, that are by-products 

25 of restoration and hazardous fuel reduction treatments, 

26 disease and insect infestation management activities, or 
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1 other management activities that involve removal, manipu2 lation, or silvicultural treatment of forests, trees, and 

3 woody plants. 

4 ‘‘(d) SPECIAL RULES.—For purposes of this sec5 tion—

6 ‘‘(1) CERTAIN PROGRESS EXPENDITURE RULES

7 MADE APPLICABLE.—Rules similar to the rules of 

8 subsections (c)(4) and (d) of section 46 (as in effect 

9 on the day before the date of the enactment of the 

10 Revenue Reconciliation Act of 1990) shall apply for 

11 purposes of this section. 

12 ‘‘(2) PROPERTY FINANCED BY SUBSIDIZED FI13 NANCING OR INDUSTRIAL DEVELOPMENT BONDS.—

14 Rules similar to the rules of section 45(b)(3) shall 

15 apply for purposes of this section. 

16 ‘‘(3) NONCOMPLIANCE WITH POLLUTION

17 LAWS.—The term ‘qualified woody biomass energy 

18 property’ shall not include any property which is not 

19 in compliance with the applicable Federal pollution 

20 prevention, control, and permit requirements at any 

21 time during the 5-year period beginning on the date 

22 such property is placed in service. 

23 ‘‘(4) DENIAL OF CREDIT FOR PROPERTY RE24 CEIVING CERTAIN OTHER FEDERAL ASSISTANCE.—

25 The term ‘qualified woody biomass energy property’ 
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1 shall not include any property if, at any time during 

2 the 5-year period beginning on the date such prop3 erty is placed in service, any funding is provided 

4 with respect to such property under any provision of 

5 Federal law. 

6 ‘‘(5) COORDINATION WITH OTHER CREDITS.—

7 This section shall not apply to any property with re8 spect to which the rehabilitation credit under section 

9 47, the energy credit under section 48, or any credit 

10 under section 45 is allowable unless the taxpayer 

11 elects to waive the application of such credit to such 

12 property.’’. 

13 (b) TECHNICAL AMENDMENTS.—

14 (1) Section 46 of such Code (relating to amount 

15 of credit) is amended by striking ‘‘and’’ at the end 

16 of paragraph (2), by striking the period at the end 

17 of paragraph (3) and inserting ‘‘, and’’, and by add18 ing at the end the following new paragraph: 

19 ‘‘(4) the woody biomass technology credit.’’. 

20 (2) Section 49(a)(1)(C) of such Code is amend21 ed by striking ‘‘and’’ at the end of clause (ii), by 

22 striking the period at the end of clause (iii) and in23 serting ‘‘, and’’, and by adding at the end the fol24 lowing new clause: 
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1 ‘‘(iv) the portion of the basis of any 

2 qualified woody biomass energy property 

3 (as defined by section 48A(b)).’’. 

4 (3) The table of sections for subpart E of part 

5 IV of subchapter A of chapter 1 of such Code is 

6 amended by inserting after the item relating to sec7 tion 48 the following new item:

‘‘Sec. 48A. Facilities producing electricity from woody biomass.’’.

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

9 this section shall apply to periods after December 31, 

10 2004, under rules similar to the rules of section 48(m) 

11 of the Internal Revenue Code of 1986 (as in effect on the 

12 day before the date of the enactment of the Revenue Rec13 onciliation Act of 1990).

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