HR 6 EAS1S/PP
enactment of this Act, in taxable years ending after such
1
date.
2
SEC. 1902. CREDIT FOR ELECTRICITY PRODUCED FROM BIO-
3
MASS.
4
(a) E
XTENSION AND
M
ODIFICATION OF
P
LACED
-I
N
-
5
S
ERVICE
R
ULES
.—Paragraph (3) of section 45(c) is
6
amended—
7
(1) by striking subparagraph (B) and inserting
8
the following new subparagraph:
9
‘‘(B) C
LOSED
-
LOOP BIOMASS FACILITY
.—
10
‘‘(i) I
N GENERAL
.—In the case of a fa-
11
cility using closed-loop biomass to produce
12
electricity, the term ‘qualified facility’
13
means any facility—
14
‘‘(I) owned by the taxpayer which
15
is originally placed in service after De-
16
cember 31, 1992, and before January
17
1, 2007, or
18
‘‘(II) owned by the taxpayer
19
which is originally placed in service
20
before January 1, 1993, and modified
21
to use closed-loop biomass to co-fire
22
with coal before January 1, 2007, as
23
approved under the Biomass Power for
24
Rural Development Programs or under
25
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HR 6 EAS1S/PP
a pilot project of the Commodity Cred-
1
it Corporation as described in 65 Fed.
2
Reg. 63052.
3
‘‘(ii) S
PECIAL RULES
.—In the case of a
4
qualified
facility
described
in
clause
5
(i)(II)—
6
‘‘(I) the 10-year period referred to
7
in subsection (a) shall be treated as be-
8
ginning no earlier than the date of the
9
enactment of this subclause, and
10
‘‘(II) if the owner of such facility
11
is not the producer of the electricity,
12
the person eligible for the credit allow-
13
able under subsection (a) is the lessee
14
or the operator of such facility.’’, and
15
(2) by adding at the end the following new sub-
16
paragraph:
17
‘‘(D) B
IOMASS FACILITY
.—
18
‘‘(i) I
N GENERAL
.—In the case of a fa-
19
cility using biomass (other than closed-loop
20
biomass) to produce electricity, the term
21
‘qualified facility’ means any facility owned
22
by the taxpayer which is originally placed
23
in service before January 1, 2005.
24
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HR 6 EAS1S/PP
‘‘(ii)
S
PECIAL
RULE
FOR
1
POSTEFFECTIVE DATE FACILITIES
.—In the
2
case of any facility described in clause (i)
3
which is placed in service after the date of
4
the enactment of this clause, the 3-year pe-
5
riod beginning on the date the facility is
6
originally placed in service shall be sub-
7
stituted for the 10-year period in subsection
8
(a)(2)(A)(ii).
9
‘‘(iii)
S
PECIAL
RULES
FOR
10
PREEFFECTIVE
DATE
FACILITIES
.—In the
11
case of any facility described in clause (i)
12
which is placed in service before the date of
13
the enactment of this clause—
14
‘‘(I) subsection (a)(1) shall be ap-
15
plied by substituting ‘1.0 cents’ for ‘1.5
16
cents’, and
17
‘‘(II) the 3-year period beginning
18
after December 31, 2002, shall be sub-
19
stituted for the 10-year period in sub-
20
section (a)(2)(A)(ii).
21
‘‘(iv) C
REDIT
ELIGIBILITY
.—In the
22
case of any facility described in clause (i),
23
if the owner of such facility is not the pro-
24
ducer of the electricity, the person eligible
25
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HR 6 EAS1S/PP
for the credit allowable under subsection (a)
1
is the lessee or the operator of such facil-
2
ity.’’.
3
(b) D
EFINITION OF
B
IOMASS
.—
4
(1) I
N
GENERAL
.—Section 45(c)(1) (defining
5
qualified energy resources) is amended—
6
(A) by striking ‘‘and’’ at the end of sub-
7
paragraph (B),
8
(B) by striking the period at the end of sub-
9
paragraph (C) and inserting ‘‘, and’’, and
10
(C) by adding at the end the following new
11
subparagraph:
12
‘‘(D) biomass (other than closed-loop bio-
13
mass).’’.
14
(2) B
IOMASS DEFINED
.—Section 45(c) (relating
15
to definitions) is amended by adding at the end the
16
following new paragraph:
17
‘‘(5) B
IOMASS
.—The term ‘biomass’ means any
18
solid, nonhazardous, cellulosic waste material which
19
is segregated from other waste materials and which is
20
derived from—
21
‘‘(A) any of the following forest-related re-
22
sources: mill residues, precommercial thinnings,
23
slash, and brush, but not including old-growth
24
timber (other than old-growth timber which has
25
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HR 6 EAS1S/PP
been permitted or contracted for removal by any
1
appropriate Federal authority through the Na-
2
tional Environmental Policy Act or by any ap-
3
propriate State authority),
4
‘‘(B) solid wood waste materials, including
5
waste pallets, crates, dunnage, manufacturing
6
and construction wood wastes (other than pres-
7
sure-treated, chemically-treated, or painted wood
8
wastes), and landscape or right-of-way tree trim-
9
mings, but not including municipal solid waste
10
(garbage), gas derived from the biodegradation of
11
solid waste, or paper that is commonly recycled,
12
or
13
‘‘(C) agriculture sources, including orchard
14
tree crops, vineyard, grain, legumes, sugar, and
15
other crop by-products or residues.’’.
16
(c) C
OORDINATION
W
ITH
S
ECTION
29.—Section 45(c)
17
(relating to definitions) is amended by adding at the end
18
the following new paragraph:
19
‘‘(6) C
OORDINATION
WITH
SECTION
29
.—The
20
term ‘qualified facility’ shall not include any facility
21
the production from which is taken into account in
22
determining any credit under section 29 for the tax-
23
able year or any prior taxable year.’’.
24
(d) C
LERICAL
A
MENDMENTS
.—
25
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HR 6 EAS1S/PP
(1) The heading for subsection (c) of section 45
1
is amended by inserting ‘‘
AND
S
PECIAL
R
ULES
’’ after
2
‘‘D
EFINITIONS
’’.
3
(2) The heading for subsection (d) of section 45
4
is amended by inserting ‘‘A
DDITIONAL
’’ before ‘‘D
EFI
-
5
NITIONS
’’.
6
(e) E
FFECTIVE
D
ATES
.—
7
(1) I
N GENERAL
.—Except as provided in para-
8
graph (2), the amendments made by this section shall
9
apply to electricity sold after the date of the enact-
10
ment of this Act.
11
(2) C
ERTAIN BIOMASS FACILITIES
.—With respect
12
to any facility described in section 45(c)(3)(D)(i) of
13
the Internal Revenue Code of 1986, as added by this
14
section, which is placed in service before the date of
15
the enactment of this Act, the amendments made by
16
this section shall apply to electricity sold after Decem-
17
ber 31, 2002.
18
SEC. 1903. CREDIT FOR ELECTRICITY PRODUCED FROM
19
SWINE AND BOVINE WASTE NUTRIENTS, GEO-
20
THERMAL ENERGY, AND SOLAR ENERGY.
21
(a)
E
XPANSION
OF
Q
UALIFIED
E
NERGY
R
E
-
22
SOURCES
.—
23
(1) I
N
GENERAL
.—Section 45(c)(1) (defining
24
qualified energy resources), as amended by this Act,
25
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HR 6 EAS1S/PP
is amended by striking ‘‘and’’ at the end of subpara-
1
graph (C), by striking the period at the end of sub-
2
paragraph (D) and inserting a comma, and by add-
3
ing at the end the following new subparagraphs:
4
‘‘(E) swine and bovine waste nutrients,
5
‘‘(F) geothermal energy, and
6
‘‘(G) solar energy.’’.
7
(2) D
EFINITIONS
.—Section 45(c) (relating to
8
definitions and special rules), as amended by this
9
Act, is amended by redesignating paragraph (6) as
10
paragraph (8) and by inserting after paragraph (5)
11
the following new paragraphs:
12
‘‘(6) S
WINE AND BOVINE WASTE NUTRIENTS
.—
13
The term ‘swine and bovine waste nutrients’ means
14
swine and bovine manure and litter, including bed-
15
ding material for the disposition of manure.
16
‘‘(7) G
EOTHERMAL
ENERGY
.—The term ‘geo-
17
thermal energy’ means energy derived from a geo-
18
thermal deposit (within the meaning of section
19
613(e)(2)).’’.
20
(b) E
XTENSION AND
M
ODIFICATION OF
P
LACED
-
21
I
N
-S
ERVICE
R
ULES
.—Section 45(c)(3) (relating to
22
qualified facility), as amended by this Act, is amend-
23
ed by adding at the end the following new subpara-
24
graphs:
25
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HR 6 EAS1S/PP
‘‘(E) S
WINE AND BOVINE WASTE NUTRIENTS
1
FACILITY
.—In the case of a facility using swine
2
and bovine waste nutrients to produce electricity,
3
the term ‘qualified facility’ means any facility
4
owned by the taxpayer which is originally placed
5
in service after the date of the enactment of this
6
subparagraph and before January 1, 2007.
7
‘‘(F) G
EOTHERMAL OR SOLAR ENERGY FA
-
8
CILITY
.—
9
‘‘(i) I
N GENERAL
.—In the case of a fa-
10
cility using geothermal or solar energy to
11
produce electricity, the term ‘qualified facil-
12
ity’ means any facility owned by the tax-
13
payer which is originally placed in service
14
after the date of the enactment of this clause
15
and before January 1, 2007.
16
‘‘(ii) S
PECIAL RULE
.—In the case of
17
any facility described in clause (i), the 5-
18
year period beginning on the date the facil-
19
ity was originally placed in service shall be
20
substituted for the 10-year period in sub-
21
section (a)(2)(A)(ii).’’.
22
(d) E
FFECTIVE
D
ATE
.—The amendments made by this
23
section shall apply to electricity sold after the date of the
24
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HR 6 EAS1S/PP
enactment of this Act, in taxable years ending after such
1
date.
2
SEC. 1904. TREATMENT OF PERSONS NOT ABLE TO USE EN-
3
TIRE CREDIT.
4
(a) I
N
G
ENERAL
.—Section 45(d) (relating to addi-
5
tional definitions and special rules), as amended by this
6
Act, is amended by adding at the end the following new
7
paragraph:
8
‘‘(8) T
REATMENT OF PERSONS NOT ABLE TO USE
9
ENTIRE CREDIT
.—
10
‘‘(A) A
LLOWANCE OF CREDIT
.—
11
‘‘(i) I
N GENERAL
.—Except as otherwise
12
provided in this subsection—
13
‘‘(I) any credit allowable under
14
subsection (a) with respect to a quali-
15
fied facility owned by a person de-
16
scribed in clause (ii) may be trans-
17
ferred or used as provided in this
18
paragraph, and
19
‘‘(II) the determination as to
20
whether the credit is allowable shall be
21
made without regard to the tax-exempt
22
status of the person.
23
‘‘(ii) P
ERSONS DESCRIBED
.—A person
24
is described in this clause if the person is—
25
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HR 6 EAS1S/PP
‘‘(I) an organization described in
1
section 501(c)(12)(C) and exempt from
2
tax under section 501(a),
3
‘‘(II) an organization described in
4
section 1381(a)(2)(C),
5
‘‘(III) a public utility (as defined
6
in section 136(c)(2)(B)), which is ex-
7
empt from income tax under this sub-
8
title,
9
‘‘(IV) any State or political sub-
10
division thereof, the District of Colum-
11
bia, any possession of the United
12
States, or any agency or instrumen-
13
tality of any of the foregoing, or
14
‘‘(V) any Indian tribal govern-
15
ment (within the meaning of section
16
7871) or any agency or instrumen-
17
tality thereof.
18
‘‘(B) T
RANSFER OF CREDIT
.—
19
‘‘(i) I
N GENERAL
.—A person described
20
in subparagraph (A)(ii) may transfer any
21
credit to which subparagraph (A)(i) applies
22
through an assignment to any other person
23
not described in subparagraph (A)(ii). Such
24
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HR 6 EAS1S/PP
transfer may be revoked only with the con-
1
sent of the Secretary.
2
‘‘(ii) R
EGULATIONS
.—The Secretary
3
shall prescribe such regulations as necessary
4
to ensure that any credit described in clause
5
(i) is claimed once and not reassigned by
6
such other person.
7
‘‘(iii) T
RANSFER PROCEEDS TREATED
8
AS ARISING FROM ESSENTIAL GOVERNMENT
9
FUNCTION
.—Any proceeds derived by a per-
10
son described in subclause (III), (IV), or (V)
11
of subparagraph (A)(ii) from the transfer of
12
any credit under clause (i) shall be treated
13
as arising from the exercise of an essential
14
government function.
15
‘‘(C) U
SE OF CREDIT AS AN OFFSET
.—Not-
16
withstanding any other provision of law, in the
17
case of a person described in subclause (I), (II),
18
or (V) of subparagraph (A)(ii), any credit to
19
which subparagraph (A)(i) applies may be ap-
20
plied by such person, to the extent provided by
21
the Secretary of Agriculture, as a prepayment of
22
any loan, debt, or other obligation the entity has
23
incurred under subchapter I of chapter 31 of title
24
7 of the Rural Electrification Act of 1936 (7
25
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