I
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 Min-
nesota) 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 bio-
mass, 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.
This Act may be cited as the ‘‘Biomass Energy Eq-
uity Act of 2001’’.
SEC. 2. CREDIT FOR ELECTRICITY PRODUCED FROM BIO-
MASS.
(a) EXTENSION AND MODIFICATION OF PLACED-IN-
SERVICE RULES.—Paragraph (3) of section 45(c) of the
Internal Revenue Code of 1986 is amended—
(1) by striking subparagraph (B) and inserting
the following new subparagraph:
‘‘(B) CLOSED-LOOP BIOMASS FACILITY.—
In the case of a facility using closed-loop bio-
mass to produce electricity, the term ‘qualified
facility’ means any facility—
‘‘(i) owned by the taxpayer which is
originally placed in service after December
31, 1992, and before January 1, 2007, or
‘‘(ii) owned by the taxpayer which is
originally placed in service on or before
December 31, 1992, and modified to use
closed-loop biomass to co-fire with coal be-
fore January 1, 2007.’’,
(2) by striking ‘‘2002’’ in subparagraph (C)
and inserting ‘‘2007’’, and
(3) by adding at the end the following new sub-
paragraphs:
‘‘(D) BIOMASS FACILITIES.—In the case of
a facility using biomass (other than closed-loop
biomass) to produce electricity, the term ‘quali-
fied facility’ means any facility owned by the
taxpayer which is originally placed in service be-
fore January 1, 2007.
‘‘(E) SPECIAL RULES.—In the case of a
qualified facility described in subparagraph
(B)(ii) or (D)—
‘‘(i) the 10-year period referred to in
subsection (a) shall be treated as beginning
no earlier than the date of the enactment
of this paragraph,
‘‘(ii) subsection (b)(3) shall not apply
to any such facility originally placed in
service before January 1, 1997, and
‘‘(iii) if such a facility is leased and
the operator thereof is the lessee, such les-
see (and not the owner) shall be treated
for purposes of this section as owning such
facility.’’
(b) BIOMASS FACILITIES.—
(1) IN GENERAL.—Section 45(c)(1) of the In-
ternal Revenue Code of 1986 (defining qualified en-
ergy resources) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (B),
(B) by striking the period at the end of
subparagraph (C) and inserting ‘‘, and’’, and
(C) by adding at the end the following new
subparagraph:
‘‘(D) biomass (other than closed-loop bio-
mass).’’.
(2) BIOMASS DEFINED.—Section 45(c) of such
Code (relating to definitions) is amended by adding
at the end the following new paragraph:
‘‘(5) BIOMASS.—The term ‘biomass’ means any
solid, nonhazardous, cellulosic waste material which
is segregated from other waste materials and which
is derived from—
‘‘(A) any of the following forest-related re-
sources: mill residues, precommercial thinnings,
slash, and brush, but not including old-growth
timber,
‘‘(B) solid wood waste materials, including
waste pallets, crates, dunnage, manufacturing
and construction wood wastes (other than pres-
sure-treated, 
chemically-treated, 
or 
painted
wood wastes), and landscape or right-of-way
tree trimmings, but not including municipal
solid waste (garbage), gas derived from the bio-
degradation of solid waste, or paper that is
commonly recycled, or
‘‘(C) agriculture sources, including orchard
tree crops, vineyard, grain, legumes, sugar, and
other crop by-products or residues.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to electricity sold after the date
of the enactment of this Act.
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