S.Amdt. 2698

1. Adds SEC. __. CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE RESOURCES TO INCLUDE OPEN-LOOP BIOMASS FACILITIES at the end of the bill

   Adds a section

   In S. 1637 · Reported to Senate

   (b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2003.

   Inserted: SEC. __. CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE RESOURCES TO INCLUDE OPEN-LOOP BIOMASS FACILITIES.

   Inserted: (a) In General.--Section 45(c)(1) (defining qualified energy resources) is amended by striking "and" at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting ", and", and by adding at the end the following new subparagraph:

   Inserted: "(D) open-loop biomass.".

   Inserted: (b) Facilities Described.--Section 45(c)(3) (defining qualified facility) is amended by adding at the end the following new subparagraph:

   Inserted: "(D) Open-loop biomass facility.--

   Inserted: "(i) In general.--In the case of a facility using open-loop biomass to produce electricity, the term 'qualified facility' means any facility owned by the taxpayer which is originally placed in service before January 1, 2006.

   Inserted: "(ii) Special rules for preeffective date facilities.--In the case of any facility described in clause (i) which is placed in service before the date of the enactment of this subparagraph--

   Inserted: "(I) subsection (a)(1) shall be applied by substituting '1 cent' for '1.5 cents', and

   Inserted: "(II) the 5-year period beginning on such date of enactment shall be substituted for the 10-year period in subsection (a)(2)(A)(ii).

   Inserted: "(iii) Credit eligibility.--In the case of any facility described in clause (i), if the owner of such facility is not the producer of the electricity, the person eligible for the credit allowable under subsection (a) shall be the lessee or the operator of such facility.

   Inserted: "(iv) Limit on reductions for tax-exempt bond financing, etc.--If the amount of the credit determined under subsection (a) with respect to any facility described in clause (i) is required to be reduced under paragraph (3) of subsection (b), the fraction under such paragraph shall in no event be greater than \1/2\.".

   Inserted: (c) Open-Loop Biomass Defined.--Section 45(c) (relating to definitions) is amended by adding at the end the following new paragraph:

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   Inserted: "(5) Open-loop biomass.--

   Inserted: "(A) In general.--The term 'open-loop biomass' means any solid, nonhazardous, cellulosic waste material which is segregated from other waste materials and which is derived from--

   Inserted: "(i) any of the following forest-related resources: mill and harvesting residues, precommercial thinnings, slash, and brush,

   Inserted: "(ii) solid wood waste materials, including waste pallets, crates, dunnage, manufacturing and construction wood wastes (other than pressure-treated, chemically-treated, or painted wood wastes), and landscape or right-of-way tree trimmings, but not including municipal solid waste, gas derived from the biodegradation of solid waste, or paper which is commonly recycled, or

   Inserted: "(iii) agriculture sources, including orchard tree crops, vineyard, grain, legumes, sugar, and other crop by-products or residues.

   Inserted: "(B) Exceptions.--Such term does not include--

   Inserted: "(i) closed-loop biomass, or

   Inserted: "(ii) any agricultural livestock waste nutrients.".

   Inserted: (d) Effective Date.--The amendments made by this section shall apply to electricity produced and sold after the date of the enactment of this Act, in taxable years ending after such date.

   Original wording

   At the end add the following:

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