110 HR 2001 IH: Industrial Cogeneration Act of U.S. House of Representatives 2007-04-23 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 110th CONGRESS 1st Session H. R. 2001 IN THE HOUSE OF REPRESENTATIVES April 23, 2007 Mr. Inslee (for himself, Mr. Terry, Mr. Gilchrest, Mr. Higgins, Ms. McCollum of Minnesota, Ms. Berkley, Mr. Delahunt, Mr. Pitts, Mr. Cohen, Ms. Schakowsky, and Mr. McDermott) 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 apply the energy credit to combined heat and power system property.

1.

Short title

This Act may be cited as the Industrial Cogeneration Act of 2007.

2.

Energy Credit for Combined Heat and Power System Property

(a)

In General

Section 48(a)(3)(A) (defining energy property) is by striking or at the end of clause (iii), by inserting or at the end of clause (iv), and by adding at the end the following new clause: (v)combined heat and power system property, . (b)

Combined Heat and Power System Property

Section 48 is amended by adding at the end the following new subsection: (d)

Combined Heat and Power System Property

For purposes of subsection (a)(3)(A)(v)— (1)

Combined heat and power system property

The term combined heat and power system property means property comprising a system— (A)which uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications), (B)which has an electrical capacity of not more than 50 megawatts or a mechanical energy capacity of not more than 67,000 horsepower or an equivalent combination of electrical and mechanical energy capacities, (C)which produces— (i)at least 20 percent of its total useful energy in the form of thermal energy which is not used to produce electrical or mechanical power (or combination thereof), and (ii)at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof), (D)the energy efficiency percentage of which exceeds 60 percent, and (E)which is placed in service before January 1, 2011. (2)

Special rules

(A)

Energy efficiency percentage

For purposes of this subsection, the energy efficiency percentage of a system is the fraction— (i)the numerator of which is the total useful electrical, thermal, and mechanical power produced by the system at normal operating rates, and expected to be consumed in its normal application, and (ii)the denominator of which is the higher heating value of the primary fuel sources for the system. (B)

Determinations made on btu basis

The energy efficiency percentage and the percentages under paragraph (1)(C) shall be determined on a Btu basis. (C)

Input and output property not included

The term combined heat and power system property does not include property used to transport the energy source to the facility or to distribute energy produced by the facility. (D)

Certain exception not to apply

The first sentence of the matter in subsection (a)(3) which follows subparagraph (D) thereof shall not apply to combined heat and power system property. (3)

Systems using bagasse

If a system is designed to use bagasse for at least 90 percent of the energy source— (A)paragraph (1)(D) shall not apply, but (B)the amount of credit determined under subsection (a) with respect to such system shall not exceed the amount which bears the same ratio to such amount of credit (determined without regard to this subparagraph) as the energy efficiency percentage of such system bears to 60 percent. (4)

Nonapplication of certain rules

For purposes of determining if the term combined heat and power system property includes technologies which generate electricity or mechanical power using back-pressure steam turbines in place of existing pressure-reducing valves or which make use of waste heat from industrial processes such as by using organic rankine, stirling, or kalina heat engine systems, paragraph (1) shall be applied without regard to subparagraphs (C) and (D) thereof. . (c)

Effective Date

The amendments made by this section shall apply to periods after December 31, 2007, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).