II
111th CONGRESS
1st Session
S. 1643
IN THE SENATE OF THE UNITED STATES
August 6, 2009
Ms. Snowe (for herself and Mr. Bingaman) 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 allow a credit for the conversion of heating using oil fuel to using natural gas or biomass feedstocks, and for other purposes.
Short title
This Act may be cited as
the Cleaner, Secure, and Affordable
Thermal Energy Act
.
Credit for conversion of home heating using oil fuel to using natural gas or biomass feedstocks
In general
Subsection (a) of section 25C of the Internal Revenue
Code of 1986 (relating to nonbusiness energy property) is amended by striking
and
at the end of paragraph (1), by striking the period at the
end of paragraph (2) and inserting , and
, and by adding at the
end the following new paragraph:
the amount of the residential energy property expenditures paid or incurred by the taxpayer during such taxable in a qualifying heating conversion.
.
Dollar limitation
In general
Subsection (b) of section 25C of the Internal Revenue Code of 1986 is amended to read as follows:
Limitations
General limitation
The aggregate amount of the credits allowed under this section by reason of paragraphs (1) and (2) of subsection (a) for taxable years beginning in 2009 and 2010 with respect to any taxpayer shall not exceed $1,500.
Qualifying heating conversions
The aggregate amount of the credits allowed under this section by reason of paragraph (3) of subsection (a) for taxable years beginning in 2009, 2010, and 2011 with respect to any taxpayer shall not exceed $3,500 ($4,000 in the case of any qualifying heating conversion using biomass heating appliances described in subsection (d)(3)(E)).
.
No double counting
Section 25C(e) of such Code (relating to special rules) is amended by adding at the end the following new paragraph:
No double counting
No amount taken into account for purposes of determining a credit under this section by reason of paragraph (3) of subsection (a) shall be taken into account for purposes of determining a credit under this section by reason of paragraphs (1) and (2) of subsection (a).
.
Qualifying heating conversion
Section 25C(d) of the Internal Revenue Code of 1986 (relating to residential energy property expenditures) is amended by adding at the end the following new paragraph:
Qualifying heating conversion
In general
The term qualifying heating conversion means the use of qualified energy property described in subparagraph (C) to eliminate the reliance on fuel oil for a heating system and the removal of the fuel oil equipment (including any storage tank).
Treatment of certain expenditures
For purposes of a qualifying heating conversion, the term residential energy property expenditures includes fuel service connection installation costs specifically related to fuel service to the qualified energy property used in such conversion, but does not include expenditures for soil cleanup.
Qualified energy property
For purposes of subparagraph (A), qualified energy property is described in this subparagraph if such property is—
a
qualified natural gas hot water boiler as defined in paragraph (4)(B) by
substituting 85 percent
for 90 percent
,
a qualified
natural gas furnace as defined in paragraph (4)(A) by substituting 92
percent
for 95 percent
, or
a biomass heating appliance described in paragraph (3)(E).
.
Biomass heating appliance
Subparagraph (E) of section 25C(d)(3) of the Internal Revenue Code of 1986 (defining energy-efficient building property) is amended to read as follows:
a biomass heating appliance, including a stove, boiler, or furnace, which uses the burning of biomass fuel to heat a unit or to heat water for use in such unit, and which has a thermal efficiency rating of at least 75 percent, as measured using a lower heating value.
.
Application of credit
Subsection (g) of section 25C of the Internal Revenue Code of 1986 (relating to termination) is amended to read as follows:
Termination
This section shall not apply with respect to any property placed in service—
except as provided in paragraph (2), after December 31, 2010, and
with respect to any qualifying heating conversion, after December 31, 2011.
.
Effective date
The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.
Bonus depreciation for qualifying heating conversion property
In general
Section 168 of the Internal Revenue Code of 1986 (relating to accelerated cost recovery system) is amended by adding at the end the following new subsection:
Special allowance for qualifying heating conversion property
In general
In the case of any qualifying heating conversion property—
the depreciation deduction provided by section 167(a) for the taxable year in which such property is placed in service shall include an allowance equal to 50 percent of the adjusted basis of the qualifying heating conversion property, and
the adjusted basis of the qualifying heating conversion property shall be reduced by the amount of such deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for such taxable year and any subsequent taxable year.
Qualifying heating conversion property
For purposes of this subsection, the term qualifying heating conversion property means any property placed in service before January 1, 2012, which is used in a qualifying heating conversion (as defined in section 25C(d)(7), except that such conversion includes the use of a commercial natural gas hot water boiler or commercial natural gas furnace whose efficiency is not measured based on an annual fuel utilization efficiency rate but which has a combustion efficiency comparable to the efficiency rate specified under clause (i) or (ii) of section 25C(d)(7)(C) as the Secretary shall determine (in consultation with the Department of Energy)).
.
Effective date
The amendment made by this section shall apply to property placed in service after the date of the enactment of this Act.
Qualified energy conservation bonds for qualifying heating conversions
In general
Clause (i) of section 54D(f)(1)(A) of the Internal
Revenue Code of 1986 (defining qualified conservation purpose) is amended by
inserting or reducing reliance on oil for heating systems in
publicly-owned buildings by implementing qualifying heating conversions (as
defined in section 25C(d)(7), except that such a conversion includes the use of
a commercial natural gas hot water boiler or commercial natural gas furnace
whose efficiency is not measured based on an annual fuel utilization efficiency
rate but which has a combustion efficiency comparable to the efficiency rate
specified under clause (i) or (ii) of section 25C(d)(7)(C) as the Secretary
shall determine (in consultation with the Department of Energy))
after
20 percent
.
Effective date
The amendment made by this section shall apply to obligations issued after the date of the enactment of this Act.
Extension of reduced depreciation period for natural gas distribution facilities
In general
Clause (viii) of section 168(e)(3)(E) of the Internal Revenue Code of 1986 (defining 15-year property) is amended to read as follows:
any natural gas distribution facility the original use of which commences with the taxpayer after April 11, 2005, and which is placed in service before January 1, 2013, and
.
Effective date
The amendment made by this section shall take effect as if included in the amendments made section 1325(a) of the Energy Tax Incentives Act of 2005.