BTU Act of 2019

II 116TH CONGRESS 1ST SESSION S. 628 To amend the Internal Revenue Code of 1986 to include biomass heating appliances for tax credits available for energy-efficient building property and energy property. IN THE SENATE OF THE UNITED STATES FEBRUARY 28, 2019 Mr. KING (for himself and Ms. COLLINS) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to include biomass heating appliances for tax credits available for energy-efficient building property and energy property. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Biomass Thermal Uti- 4 lization Act of 2019’’ or the ‘‘BTU Act of 2019’’. 5 VerDate Sep 11 2014 23:00 Mar 07, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S628.IS S628 kjohnson on DSK79L0C42 with BILLS 2 •S 628 IS SEC. 2. RESIDENTIAL ENERGY-EFFICIENT PROPERTY 1 CREDIT FOR BIOMASS FUEL PROPERTY EX- 2 PENDITURES. 3 (a) ALLOWANCE OF CREDIT.—Section 25D(a) of the 4 Internal Revenue Code of 1986 is amended— 5 (1) in paragraph (4), by striking ‘‘and’’ at the 6 end, 7 (2) in paragraph (5), by adding ‘‘and’’ at the 8 end, and 9 (3) by inserting after paragraph (5) the fol- 10 lowing: 11 ‘‘(6) the qualified biomass fuel property expend- 12 itures,’’. 13 (b) QUALIFIED BIOMASS FUEL PROPERTY EXPENDI- 14 TURES.—Section 25D(d) of such Code is amended by add- 15 ing at the end the following new paragraph: 16 ‘‘(6) QUALIFIED BIOMASS FUEL PROPERTY EX- 17 PENDITURE.— 18 ‘‘(A) IN GENERAL.—The term ‘qualified 19 biomass fuel property expenditure’ means an 20 expenditure for property— 21 ‘‘(i) which uses the burning of bio- 22 mass fuel to heat a dwelling unit located in 23 the United States and used as a residence 24 by the taxpayer, or to heat water for use 25 in such a dwelling unit, and 26 VerDate Sep 11 2014 23:00 Mar 07, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S628.IS S628 kjohnson on DSK79L0C42 with BILLS 3 •S 628 IS ‘‘(ii) which has a thermal efficiency 1 rating of at least 75 percent (measured by 2 the higher heating value of the fuel). 3 ‘‘(B) BIOMASS FUEL.—For purposes of 4 this section, the term ‘biomass fuel’ means any 5 plant-derived fuel available on a renewable or 6 recurring basis, including agricultural crops and 7 trees, wood and wood waste and residues, 8 plants (including aquatic plants), grasses, resi- 9 dues, and fibers. Such term includes densified 10 biomass fuels such as wood pellets.’’. 11 (c) APPLICABLE PERCENTAGE.—Subsection (g) of 12 section 25D of such Code is amended— 13 (1) by redesignating paragraphs (1), (2), and 14 (3) as subparagraphs (A), (B), and (C), respectively, 15 and by moving such subparagraphs (as so redesig- 16 nated) 2 ems to the right, 17 (2) by striking ‘‘For purposes of’’ and inserting 18 the following: 19 ‘‘(1) IN GENERAL.—Except as provided under 20 paragraph (2), for purposes of’’, and 21 (3) by adding at the end the following: 22 ‘‘(2) APPLICABLE PERCENTAGE FOR QUALIFIED 23 BIOMASS FUEL PROPERTY EXPENDITURES.—In the 24 case of any qualified biomass fuel property expendi- 25 VerDate Sep 11 2014 23:00 Mar 07, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S628.IS S628 kjohnson on DSK79L0C42 with BILLS 4 •S 628 IS tures made by the taxpayer during the taxable year, 1 the applicable percentage shall be 30 percent.’’. 2 (d) TERMINATION.—Subsection (h) of section 25D of 3 such Code is amended to read as follows: 4 ‘‘(h) TERMINATION.— 5 ‘‘(1) IN GENERAL.—Except as provided under 6 paragraph (2), the credit allowed under this section 7 shall not apply to property placed in service after 8 December 31, 2021. 9 ‘‘(2) APPLICATION TO QUALIFIED BIOMASS 10 FUEL PROPERTY.—In the case of property described 11 in subsection (d)(6), the credit allowed under this 12 section shall not apply to property placed in service 13 after December 31, 2023.’’. 14 (e) EFFECTIVE DATE.—The amendments made by 15 this section shall apply to expenditures paid or incurred 16 in taxable years beginning after December 31, 2018. 17 SEC. 3. INVESTMENT TAX CREDIT FOR BIOMASS HEATING 18 PROPERTY. 19 (a) IN GENERAL.—Section 48(a)(3)(A) of the Inter- 20 nal Revenue Code of 1986 is amended— 21 (1) by striking ‘‘or’’ at the end of clause (vi), 22 (2) by adding ‘‘or’’ at the end of clause (vii), 23 and 24 VerDate Sep 11 2014 23:00 Mar 07, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S628.IS S628 kjohnson on DSK79L0C42 with BILLS 5 •S 628 IS (3) and by inserting after clause (vii) the fol- 1 lowing new clause: 2 ‘‘(viii) open-loop biomass (within the 3 meaning of section 45(c)(3)) heating prop- 4 erty, including boilers or furnaces that op- 5 erate at thermal output efficiencies of not 6 less than 65 percent (measured by the 7 higher heating value of the fuel) and that 8 provide thermal energy in the form of heat, 9 hot water, or steam for space heating, air 10 conditioning, domestic hot water, or indus- 11 trial process heat,’’. 12 (b) 30 PERCENT AND 15 PERCENT CREDITS.— 13 (1) ENERGY PERCENTAGE.— 14 (A) IN GENERAL.—Section 48(a)(2)(A) of 15 such Code is amended— 16 (i) by striking ‘‘and’’ at the end of 17 clause (i)(IV), 18 (ii) by redesignating clause (ii) as 19 clause (iii), and 20 (iii) by inserting after clause (i) the 21 following new clause: 22 ‘‘(ii) in the case of energy property 23 described in paragraph (3)(A)(viii) the 24 construction of which begins before Janu- 25 VerDate Sep 11 2014 23:00 Mar 07, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S628.IS S628 kjohnson on DSK79L0C42 with BILLS 6 •S 628 IS ary 1, 2024, 15 percent (30 percent in the 1 case of any such property which operates 2 at a thermal output efficiency of not less 3 than 80 percent (measured by the higher 4 heating value of the fuel)), and’’. 5 (B) CONFORMING AMENDMENT.—Section 6 48(a)(2)(A)(iii) of such Code, as so redesig- 7 nated, is amended by inserting ‘‘or (ii)’’ after 8 ‘‘clause (i)’’. 9 (c) EFFECTIVE DATE.—The amendments made by 10 this section shall apply to periods after December 31, 11 2018, in taxable years ending after such date, under rules 12 similar to the rules of section 48(m) of the Internal Rev- 13 enue Code of 1986 (as in effect on the day before the date 14 of the enactment of the Revenue Reconciliation Act of 15 1990). 16 Æ VerDate Sep 11 2014 23:00 Mar 07, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S628.IS S628 kjohnson on DSK79L0C42 with BILLS