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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. CREDIT FOR INVESTMENT IN FACILITIES PRO-
DUCING ELECTRICITY FROM WOODY BIO-
MASS. 
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to rules for computing investment credit) 
is amended by inserting after section 48 the following new 
section:
‘‘SEC. 48A. FACILITIES PRODUCING ELECTRICITY FROM 
WOODY BIOMASS. 
‘‘(a) IN GENERAL.—For purposes of section 46, the 
woody biomass technology credit for any taxable year is 
an amount equal to 20 percent of the basis of qualified 
woody biomass energy property placed in service during 
such year. 
‘‘(b) QUALIFIED WOODY BIOMASS ENERGY PROP-
ERTY.—For purposes of this section, the term ‘qualified 
woody biomass energy property’ means section 1245 prop-
erty—
‘‘(1) which is used to produce electricity from 
woody biomass, 
‘‘(2) which is placed in service after the date of 
the enactment of this section, and before January 1, 
2010, 
‘‘(3) the original use of which commences with 
the taxpayer, and 
‘‘(4) which has a useful life of not less than 5 
years. 
‘‘(c) WOODY BIOMASS.—For purposes of this section, 
the term ‘woody biomass’ means trees and woody plants, 
including bark, limbs, tops, needles, leaves, stumps, roots 
and other woody parts and debris, that are by-products 
of restoration and hazardous fuel reduction treatments, 
disease and insect infestation management activities, or
other management activities that involve removal, manipu-
lation, or silvicultural treatment of forests, trees, and 
woody plants. 
‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion—
‘‘(1) CERTAIN PROGRESS EXPENDITURE 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 date of the enactment of the 
Revenue Reconciliation Act of 1990) shall apply for 
purposes of this section. 
‘‘(2) PROPERTY FINANCED BY SUBSIDIZED FI-
NANCING OR INDUSTRIAL DEVELOPMENT BONDS.—
Rules similar to the rules of section 45(b)(3) shall 
apply for purposes of this section. 
‘‘(3) 
NONCOMPLIANCE
WITH
POLLUTION 
LAWS.—The term ‘qualified woody biomass energy 
property’ shall not include any property which is not 
in compliance with the applicable Federal pollution 
prevention, control, and permit requirements at any 
time during the 5-year period beginning on the date 
such property is placed in service. 
‘‘(4) DENIAL OF CREDIT FOR PROPERTY RE-
CEIVING CERTAIN OTHER FEDERAL ASSISTANCE.—
The term ‘qualified woody biomass energy property’
shall not include any property if, at any time during 
the 5-year period beginning on the date such prop-
erty is placed in service, any funding is provided 
with respect to such property under any provision of 
Federal law. 
‘‘(5) COORDINATION WITH OTHER CREDITS.—
This section shall not apply to any property with re-
spect to which the rehabilitation credit under section 
47, the energy credit under section 48, or any credit 
under section 45 is allowable unless the taxpayer 
elects to waive the application of such credit to such 
property.’’. 
(b) TECHNICAL AMENDMENTS.—
(1) Section 46 of such Code (relating to amount 
of credit) is amended by striking ‘‘and’’ at the end 
of paragraph (2), by striking the period at the end 
of paragraph (3) and inserting ‘‘, and’’, and by add-
ing at the end the following new paragraph: 
‘‘(4) the woody biomass technology credit.’’. 
(2) Section 49(a)(1)(C) of such Code is amend-
ed by striking ‘‘and’’ at the end of clause (ii), by 
striking the period at the end of clause (iii) and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing new clause:
‘‘(iv) the portion of the basis of any 
qualified woody biomass energy property 
(as defined by section 48A(b)).’’. 
(3) The table of sections for subpart E of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the item relating to sec-
tion 48 the following new item:
‘‘Sec. 48A. Facilities producing electricity from woody biomass.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after December 31, 
2004, 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 Rec-
onciliation Act of 1990).
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