E. Cooper Brown Ocean Clean Energy Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 5375 To amend the Internal Revenue Code of 1986 to allow the energy credit for certain ocean thermal energy equipment. IN THE HOUSE OF REPRESENTATIVES DECEMBER 10, 2019 Ms. GABBARD (for herself and Mr. CASE) 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 allow the energy credit for certain ocean thermal energy equipment. 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; FINDINGS. 3 (a) SHORT TITLE.—This Act may be cited as the ‘‘E. 4 Cooper Brown Ocean Clean Energy Act of 2019’’. 5 (b) FINDINGS RELATED TO OCEAN THERMAL EN- 6 ERGY CONVERSION.—Congress finds the following with re- 7 spect to ocean thermal energy conversion (OTEC): 8 VerDate Sep 11 2014 02:39 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5375.IH H5375 kjohnson on DSK79L0C42 with BILLS 2 •HR 5375 IH (1) OTEC is a clean energy technology that 1 produces energy by using temperature differentials 2 between cooler deep and warm surface seawaters. 3 (2) OTEC technology has the potential to 4 produce massive levels of clean energy to generate 5 electricity. 6 (3) Deployment of OTEC technology will reduce 7 greenhouse gases and reliance on fossil fuels. 8 (4) In tropical and subtropical remote locations, 9 electricity is expensive to generate. Power generated 10 from OTEC technology will be inexpensive when 11 compared to the unit cost of power from a tradi- 12 tional oil based electrical generation system. 13 (5) OTEC generated energy would reduce oper- 14 ational costs for remote military bases such as Kwaj- 15 alein and Diego Garcia;. 16 (6) The United States became involved in 17 OTEC research in 1974 with the establishment of 18 the Natural Energy Laboratory of Hawaii Authority. 19 The laboratory is one of the world’s leading test fa- 20 cilities for OTEC technology. The United States 21 Navy supported the development of a 105 kW dem- 22 onstration OTEC plant at the laboratory site. This 23 facility became operational in 2015 and supplies 24 electricity to the local electricity grid. 25 VerDate Sep 11 2014 02:39 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5375.IH H5375 kjohnson on DSK79L0C42 with BILLS 3 •HR 5375 IH (7) In certain regions, onshore OTEC plants 1 are also feasible and they can be configured to sup- 2 port seawater or lake water air conditioning (SWAC/ 3 LWAC) systems for refrigeration and cooling, agri- 4 culture, and desalination systems for water purifi- 5 cation. 6 (8) Economic benefits of OTEC include reduced 7 fuel imports, stable utilities pricing, reduced capital 8 expense to power companies and governments, and 9 significant energy costs savings. 10 (9) Social benefits of OTEC include and an 11 ability to produce freshwater and promotion of aqua- 12 culture. 13 (c) FINDINGS RELATED TO SEAWATER AIR CONDI- 14 TIONING.—Congress finds the following with respect to 15 seawater air conditioning (SWAC): 16 (1) SWAC is an alternate-energy system that 17 uses the cold water from the deep ocean (and in 18 some cases a deep lake) to cool buildings. 19 (2) SWAC was developed as a secondary benefit 20 in the development of ocean thermal energy conver- 21 sion (OTEC) and can be used in conjunction with an 22 OTEC system or as a standalone alternate energy 23 system. 24 VerDate Sep 11 2014 02:39 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5375.IH H5375 kjohnson on DSK79L0C42 with BILLS 4 •HR 5375 IH (3) The basic process involves water that is 1 pumped from a deep cold-water source (ocean or 2 lake) and then passed through a heat exchanger. A 3 closed-loop freshwater water distribution system is 4 pumped through a heat exchanger cooling the water 5 and the cooled water is distributed throughout a 6 building or group of buildings (i.e., a district cooling 7 system). 8 (4) The SWAC technology has been proven suc- 9 cessful with large systems at Cornell University, To- 10 ronto, Canada, and the Natural Energy Authority of 11 Hawaii (NELHA). 12 (5) Environmental benefits of SWAC include 13 being a clean, renewable source of energy, decreased 14 reliance on fossil fuels for cooling, and reduction in 15 greenhouse gas emissions. 16 (6) Economic benefits of SWAC include stable 17 long-term energy costs and independence from mar- 18 ket trends, reduced operating costs (including lower 19 costs in fuel, freshwater, equipment, and equipment 20 maintenance), and being a cost-effective and attrac- 21 tive energy technology investment. 22 VerDate Sep 11 2014 02:39 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5375.IH H5375 kjohnson on DSK79L0C42 with BILLS 5 •HR 5375 IH SEC. 2. ENERGY CREDIT FOR CERTAIN OCEAN THERMAL 1 ENERGY PROPERTY. 2 (a) IN GENERAL.—Section 48(a)(3)(A) of the Inter- 3 nal Revenue Code of 1986 is amended by striking ‘‘or’’ 4 at the end of clause (vi), by adding ‘‘or’’ at the end of 5 clause (vii), and by adding at the end the following new 6 clause: 7 ‘‘(viii) equipment which converts 8 ocean thermal energy to usable energy or 9 which uses ocean water as a thermal en- 10 ergy sink to cool a structure,’’. 11 (b) 15-PERCENT CREDIT.—Section 48(a)(2)(A) of 12 such Code is amended— 13 (1) by striking ‘‘and’’ at the end of clause 14 (i)(IV); 15 (2) by redesignating clause (ii) as clause (iii); 16 (3) by striking ‘‘any energy property to which 17 clause (i) does not apply’’ in clause (iii) (as so redes- 18 ignated) and inserting ‘‘any other energy property’’; 19 and 20 (4) by inserting after clause (i) the following 21 new clause: 22 ‘‘(ii) 15 percent in the case of any en- 23 ergy property described in paragraph 24 (3)(A)(viii), and’’. 25 VerDate Sep 11 2014 02:39 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5375.IH H5375 kjohnson on DSK79L0C42 with BILLS 6 •HR 5375 IH (c) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to periods after December 31, 2 2019, under rules similar to the rules of section 48(m) 3 of the Internal Revenue Code of 1986 (as in effect on the 4 day before the date of the enactment of the Revenue Rec- 5 onciliation Act of 1990). 6 Æ VerDate Sep 11 2014 02:39 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H5375.IH H5375 kjohnson on DSK79L0C42 with BILLS