I 
111TH CONGRESS 
2D SESSION 
H. R. 4455 
To amend the Internal Revenue Code of 1986 to improve and extend certain 
energy-related tax provisions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 13, 2010 
Mr. THOMPSON of California (for himself and Mr. LINDER) 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 improve 
and extend certain energy-related tax provisions, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; 
TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Expanding Industrial Energy Efficiency Incentives Act 
of 2009’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
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to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; amendment of 1986 Code; table of contents. 
Sec. 2. Modifications in credit for combined heat and power system property. 
Sec. 3. Motor energy efficiency improvement tax credit. 
Sec. 4. Credit for replacement of CFC refrigerant chiller. 
Sec. 5. Qualifying efficient industrial process water use project credit. 
SEC. 2. MODIFICATIONS IN CREDIT FOR COMBINED HEAT 
AND POWER SYSTEM PROPERTY. 
(a) MODIFICATION OF CERTAIN CAPACITY LIMITA-
TIONS.—Subparagraph (B) of section 48(c)(3) is amend-
ed— 
(1) by striking ‘‘15 megawatts’’ in clause (ii) 
and inserting ‘‘25 megawatts’’, 
(2) by striking ‘‘20,000 horsepower’’ in clause 
(ii) and inserting ‘‘34,000 horsepower’’, and 
(3) by striking clause (iii). 
(b) NONAPPLICATION
OF CERTAIN RULES.—Sub-
paragraph (C) of section 48(c)(3) is amended by adding 
at the end the following new clause: 
‘‘(iv) NONAPPLICATION
OF
CERTAIN 
RULES.—For purposes of determining if 
the term ‘combined heat and power system 
property’ includes technologies which gen-
erate electricity or mechanical power using 
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back-pressure steam turbines in place of 
existing pressure-reducing valves or which 
make use of waste heat from industrial 
processes 
such 
as 
by 
using 
organic 
rankine, stirling, or kalina heat engine sys-
tems, subparagraph (A) shall be applied 
without regard to clause (ii).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after the date of the 
enactment of this Act, under rules similar to the rules of 
section 48(m) of the Internal Revenue Code of 1986 (as 
in effect on the day before the date of the enactment of 
the Revenue Reconciliation Act of 1990). 
SEC. 3. MOTOR ENERGY EFFICIENCY IMPROVEMENT TAX 
CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 is amended by adding at the end 
the following new section: 
‘‘SEC. 45R. MOTOR ENERGY EFFICIENCY IMPROVEMENT 
TAX CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
motor energy efficiency improvement tax credit deter-
mined under this section for the taxable year is an amount 
equal to $120 multiplied by the motor horsepower of an 
appliance, machine, or equipment— 
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‘‘(1) manufactured in such taxable year by a 
manufacturer which incorporates an advanced motor 
system into a newly designed appliance, machine, or 
equipment or into a redesigned appliance, machine, 
or equipment which did not previously make use of 
the advanced motor system, or 
‘‘(2) placed back into service in such taxable 
year by an end user which upgrades an existing ap-
pliance, machine, or equipment with an advanced 
motor system. 
For any advanced motor system with a total horsepower 
of less than 10, such motor energy efficiency improvement 
tax credit is an amount which bears the same ratio to 
$120 as 1 horsepower bears to such total horsepower. 
‘‘(b) ADVANCED MOTOR SYSTEM.—For purposes of 
this section, the term ‘advanced motor system’ means a 
motor and any required associated electronic control 
which— 
‘‘(1) offers variable or multiple speed operation, 
and 
‘‘(2) uses permanent magnet technology, elec-
tronically commutated motor technology, switched 
reluctance motor technology, or such other motor 
systems technologies as determined by the Secretary 
of Energy. 
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‘‘(c) AGGREGATE PER TAXPAYER LIMITATION.— 
‘‘(1) IN GENERAL.—The amount of the credit 
determined under this section for any taxpayer for 
any taxable year shall not exceed the excess (if any) 
of $2,000,000 over the aggregate credits allowed 
under this section with respect to such taxpayer for 
all prior taxable years. 
‘‘(2) AGGREGATION RULES.—For purposes of 
this section, all persons treated as a single employer 
under subsections (a) and (b) of section 52 shall be 
treated as 1 taxpayer. 
‘‘(d) SPECIAL RULES.— 
‘‘(1) BASIS REDUCTION.—For purposes of this 
subtitle, the basis of any property for which a credit 
is allowable under subsection (a) shall be reduced by 
the amount of such credit so allowed. 
‘‘(2) NO DOUBLE BENEFIT.—No other credit 
shall be allowable under this chapter for property 
with respect to which a credit is allowed under this 
section. 
‘‘(3) PROPERTY USED OUTSIDE UNITED STATES 
NOT QUALIFIED.—No credit shall be allowable under 
subsection (a) with respect to any property referred 
to in section 50(b)(1). 
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‘‘(e) APPLICATION.—This section shall not apply to 
property manufactured or placed back into service before 
the date which is 6 months after the date of the enactment 
of this section or after December 31, 2013.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b) is amended by striking ‘‘plus’’ 
at the end of paragraph (34), by striking the period 
at the end of paragraph (35) and inserting ‘‘, plus’’, 
and by adding at the end the following new para-
graph: 
‘‘(36) the motor energy efficiency improvement 
tax credit determined under section 45R.’’. 
(2) Section 1016(a) is amended by striking 
‘‘and’’ at the end of paragraph (36), by striking the 
period at the end of paragraph (37) and inserting ‘‘, 
and’’, and by adding at the end the following new 
paragraph: 
‘‘(38) to the extent provided in section 
45R(d)(1).’’. 
(3) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 is amended by add-
ing at the end the following new item: 
‘‘Sec. 45R. Motor energy efficiency improvement tax credit.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property manufactured or 
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placed back into service after the date which is 6 months 
after the date of the enactment of this Act. 
SEC. 4. CREDIT FOR REPLACEMENT OF CFC REFRIGERANT 
CHILLER. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1, as amended by this Act, is amend-
ed by adding at the end the following new section: 
‘‘SEC. 45S. CFC CHILLER REPLACEMENT CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
CFC chiller replacement credit determined under this sec-
tion for the taxable year is an amount equal to— 
‘‘(1) $150 multiplied by the tonnage rating of 
a CFC chiller replaced with a new efficient chiller 
that is placed in service by the taxpayer during the 
taxable year, plus 
‘‘(2) if all chilled water distribution pumps con-
nected to the new efficient chiller include variable 
frequency drives, $100 multiplied by any tonnage 
downsizing. 
‘‘(b) CFC CHILLER.—For purposes of this section, 
the term ‘CFC chiller’ includes property which— 
‘‘(1) was installed after 1980 and before 1993, 
‘‘(2) utilizes chlorofluorocarbon refrigerant, and 
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‘‘(3) until replaced by a new efficient chiller, 
has remained in operation and utilized for cooling a 
commercial building. 
‘‘(c) NEW EFFICIENT CHILLER.—For purposes of 
this section, the term ‘new efficient chiller’ includes a 
water-cooled chiller which is certified to meet efficiency 
standards effective on January 1, 2010, as defined in table 
6.8.1c in Addendum M to Standard 90.1–2007 of the 
American Society of Heating, Refrigerating, and Air Con-
ditioning Engineers. 
‘‘(d) TONNAGE DOWNSIZING.—For purposes of this 
section, the term ‘tonnage downsizing’ means the amount 
by which the tonnage rating of the CFC chiller exceeds 
the tonnage rating of the new efficient chiller. 
‘‘(e) ENERGY AUDIT.—As a condition of receiving a 
tax credit under this section, an energy audit shall be per-
formed on the building prior to installation of the new effi-
cient chiller, identifying cost-effective energy-saving meas-
ures, particularly measures that could contribute to chiller 
downsizing. The audit shall satisfy criteria that shall be 
issued by the Secretary of Energy. 
‘‘(f) PROPERTY USED BY TAX-EXEMPT ENTITY.—In 
the case of a CFC chiller replaced by a new efficient chiller 
the use of which is described in paragraph (3) or (4) of 
section 50(b), the person who sold such new efficient chill-
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‘‘(C) 
infrastructure 
associated 
with 
sourcing or water discharge. 
‘‘(3) CERTAIN QUALIFIED PROGRESS EXPENDI-
TURES RULES MADE APPLICABLE.—Rules similar to 
the rules of subsections (c)(4) and (d) of section 46 
(as in effect on the day before the enactment of the 
Revenue Reconciliation Act of 1990) shall apply for 
purposes of this section. 
‘‘(4) SPECIAL RULE FOR SUBSIDIZED ENERGY 
FINANCING.—Rules similar to the rules of section 
48(a)(4) (without regard to subparagraph (D) there-
of) shall apply for purposes of this section. 
‘‘(5) LIMITATION.—The amount which is treat-
ed for all taxable years with respect to any quali-
fying efficient industrial process water use project 
with 
respect 
to 
any 
site 
shall 
not 
exceed 
$10,000,000. 
‘‘(c) DEFINITIONS.— 
‘‘(1) 
QUALIFYING
EFFICIENT
INDUSTRIAL 
PROCESS WATER USE PROJECT.—The term ‘quali-
fying efficient industrial process water use project’ 
means, with respect to any site, a project— 
‘‘(A) which replaces or modifies a system 
for the use of water or steam in the production 
of goods in the trade or business of manufac-
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turing (including any system for the use of 
water derived from blow-down from cooling tow-
ers and steam systems in the generation of elec-
tric power at a site also used for the production 
of goods in the trade or business of manufac-
turing), and 
‘‘(B) which is designed to achieve— 
‘‘(i) a reduction of not less than 20 
percent in water withdrawal and a reduc-
tion of not less than 10 percent of water 
discharge when compared to the existing 
water use at the site, or 
‘‘(ii) a reduction of not less than 10 
percent in water withdrawal and a reduc-
tion of not less than 20 percent of water 
discharge when compared to the existing 
water use at the site. 
‘‘(2) ELIGIBLE PROPERTY.—The term ‘eligible 
property’ means any property— 
‘‘(A) which is part of a qualifying efficient 
industrial process water use project and which 
is necessary for the reduction in withdrawals or 
discharge described in paragraph (1)(B), 
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‘‘(B)(i) the construction, reconstruction, or 
erection of which is completed by the taxpayer, 
or 
‘‘(ii) which is acquired by the taxpayer if 
the original use of such property commences 
with the taxpayer, and 
‘‘(C) with respect to which depreciation (or 
amortization in lieu of depreciation) is allow-
able. 
‘‘(3) NET ENERGY CONSUMPTION.—The term 
‘net energy consumption’ means the energy con-
sumed, both on-site and off-site, with respect to the 
water described in paragraph (1)(A). Net energy 
consumption shall be normalized per unit of indus-
trial output and measured under rules and proce-
dures established by the Secretary, in consultation 
with the Administrator of the Environmental Protec-
tion Agency. 
‘‘(4) WATER DISCHARGE.—The term ‘water dis-
charge’ means all water leaving the site via per-
mitted or unpermitted surface water discharges, dis-
charges to publicly owned treatment works, and 
shallow- or deep-injection (whether on-site or off- 
site). 
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‘‘(5) WATER WITHDRAWAL.—The term ‘water 
withdrawal’ means all water taken for use at the site 
from on-site ground and surface water sources to-
gether with any water supplied to the site by a pub-
lic water system. 
‘‘(d) TERMINATION.—This section shall not apply to 
periods after December 31, 2014, under rules similar to 
the rules of section 48(m) (as in effect on the day before 
the date of the enactment of the Revenue Reconciliation 
Act of 1990).’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 49(a)(1)(C) is amended by striking 
‘‘and’’ at the end of clause (iv), by striking the pe-
riod at the end of clause (v) and inserting ‘‘, and’’, 
and by adding after clause (v) the following new 
clause: 
‘‘(vi) the basis of any property which 
is part of a qualifying efficient industrial 
use water project under section 48D.’’. 
(2) The table of sections for subpart E of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 48B the fol-
lowing new item: 
‘‘Sec. 48D. Qualifying efficient industrial process water use project credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after January 1, 2011, 
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under rules similar to the rules of section 48(m) of the 
Internal Revenue Code of 1986 (as in effect on the day 
before the date of the enactment of the Revenue Reconcili-
ation Act of 1990). 
Æ 
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