I 

108TH CONGRESS 

1ST SESSION H. R. 804

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 

FEBRUARY 13, 2003

Mr. HERGER (for himself, Mr. MATSUI, Mr. MCCRERY, Mr. OSE, Mr. KENNEDY of Minnesota, and Mr. HUNTER) 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 2003’’. 
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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, 2008, 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, 2008.’’, 

20 (2) by striking ‘‘2004’’ in subparagraph (C) 

21 and inserting ‘‘2008’’, 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, 2008. 

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 (other than old-growth timber which has 

18 been permitted or contracted for removal by 

19 any appropriate Federal authority through the 

20 National Environmental Policy Act or by any 

21 appropriate State authority), 

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

23 waste pallets, crates, dunnage, manufacturing 

24 and construction wood wastes (other than pres25 sure-treated, chemically-treated, or painted 
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1 wood wastes), and landscape or right-of-way 

2 tree trimmings, but not including municipal 

3 solid waste (garbage), gas derived from the bio4 degradation of solid waste, or paper that is 

5 commonly recycled, or 

6 ‘‘(C) agriculture sources, including orchard 

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

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

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

10 this section shall apply to electricity sold after the date 

11 of the enactment of this Act.

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