I 

117TH CONGRESS 

1ST SESSION H. R. 3251 

To amend the Internal Revenue Code of 1986 to include biomass heating 

appliances in the energy credit and to extent the credit for residential 

energy efficient property. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 14, 2021 

Ms. KUSTER (for herself, Mr. KELLY of Pennsylvania, Mr. WELCH, Ms. PINGREE, Mr. GARAMENDI, and Mr. PAPPAS) 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 include 

biomass heating appliances in the energy credit and to 

extent the credit for residential energy efficient property. 

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 Thermal Uti5 lization Act of 2021’’ or the ‘‘BTU Act of 2021’’. 

6 SEC. 2. INVESTMENT TAX CREDIT FOR BIOMASS HEATING 

7 PROPERTY. 

8 (a) IN GENERAL.—Section 48(a)(3)(A) of the Inter9 nal Revenue Code of 1986 is amended— 


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1 (1) by striking ‘‘or’’ at the end of clause (vii), 

2 (2) by adding ‘‘or’’ at the end of clause (viii), 

3 and 

4 (3) and by inserting after clause (viii) the fol5 lowing new clause: 

6 ‘‘(ix) open-loop biomass heating prop7 erty (within the meaning of section 

8 45(c)(3)) heating property, including boil9 ers or furnaces that operate at thermal 

10 output efficiencies of not less than 75 per11 cent (measured by the lower heating value 

12 of the fuel at nominal output), that are in13 stalled indoors, and that provide thermal 

14 energy in the form of heat, hot water, or 

15 steam for space heating, air conditioning, 

16 domestic hot water, or industrial process 

17 heat,’’. 

18 (b) OPEN-LOOP BIOMASS HEATING PROPERTY DE19 FINED.—Section 48(c) of the Internal Revenue Code of 

20 1986 is amended by adding at the end the following new 

21 paragraph: 

22 ‘‘(6) OPEN-LOOP BIOMASS HEATING PROP23 ERTY.— 


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1 ‘‘(A) IN GENERAL.—The term ‘open-loop 

2 biomass heating property’ means any property 

3 which— 

4 ‘‘(i) uses open-loop biomass (as de5 fined in section 45(c)(3)) to produce ther6 mal energy in the form of heat, hot water, 

7 hot air, or steam, and 

8 ‘‘(ii) is used for space heating, air 

9 conditioning, domestic hot water, industrial 

10 process heat, or any combination of the 

11 foregoing. 

12 ‘‘(B) REQUIREMENTS FOR BOILERS AND

13 FURNACES.—Such term shall not include any 

14 boiler or furnace unless such boiler or fur15 nace— 

16 ‘‘(i) operates at thermal output effi17 ciencies of not less than 75 percent (meas18 ured by the lower heating value of the fuel 

19 at nominal output), and 

20 ‘‘(ii) is installed indoors.’’. 

21 (c) ENERGY PERCENTAGE.—Section 48(a)(2)(A)(i) 

22 of such Code is amended— 

23 (1) by striking ‘‘and’’ at the end of subclause 

24 (IV), and 


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1 (2) by adding at the end the following new sub2 clause: 

3 ‘‘(VI) open-loop biomass heating 

4 property, but only with respect to 

5 property the construction of which be6 gins before January 1, 2029, and’’. 

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

8 this section shall apply to periods after December 31, 

9 2020, in taxable years ending after such date, under rules 

10 similar to the rules of section 48(m) of the Internal Rev11 enue Code of 1986 (as in effect on the day before the date 

12 of the enactment of the Revenue Reconciliation Act of 

13 1990). 

14 SEC. 3. EXTENSION OF RESIDENTIAL ENERGY EFFICIENT 

15 PROPERTY CREDIT. 

16 (a) IN GENERAL.—Section 25D(h) of the Internal 

17 Revenue Code of 1986 is amended by striking ‘‘December 

18 31, 2023’’ and inserting ‘‘December 31, 2028’’. 

19 (b) APPLICATION OF PHASEOUT.—Section 25D(g) of 

20 such Code is amended— 

21 (1) by striking ‘‘before January 1, 2023’’ in 

22 paragraph (2) and inserting ‘‘before January 1, 

23 2022’’, 

24 (2) by striking ‘‘and’’ at the end of paragraph 

25 (2), 


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1 (3) by redesignating paragraph (3) as para2 graph (5) and by inserting after paragraph (2) the 

3 following new paragraphs: 

4 ‘‘(3) in the case of property placed in service 

5 after December 31, 2021, and before January 1, 

6 2027, 30 percent, 

7 ‘‘(4) in the case of property placed in service 

8 after December 31, 2026, and before January 1, 

9 2028, 26 percent, and’’, and 

10 (4) by striking ‘‘December 31, 2022, and before 

11 January 1, 2024’’ in paragraph (5) (as so redesig12 nated) and inserting ‘‘December 31, 2027, and be13 fore January 1, 2029’’. 

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

15 this section shall apply to expenditures made after the 

16 date of the enactment of this Act. 

Æ 


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