I 111th CONGRESS 1st Session H. R. 4389 IN THE HOUSE OF REPRESENTATIVES December 16, 2009 Mr. Murphy of New York 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 a credit against income tax to taxpayers using energy derived from biomass to power domestic paper, pulp and paperboard manufacturing process facilities.

1.

Short title

This Act may be cited as the Green Energy Paper Manufacturing Act of 2009.

2.

Credit for using energy derived from biomass to power domestic paper, pulp and paperboard manufacturing process facilities

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business-related credits) is amended by inserting after section 45Q the following new section:

45R.

Energy derived from biomass to power domestic paper, pulp and paperboard manufacturing process facilities

(a)

General rule

For purposes of section 38, the renewable green-energy pulp, paper or paperboard manufacturing credit for any taxable year is an amount equal to the product of— (1)$4, multiplied by (2)the number of million Btus of steam and electricity— (A)produced by the taxpayer— (i)from biomass fuels, and (ii)at a qualified paper product facility (or at an energy production facility which is located in the United States and which is under contract to provide steam or electricity to any qualified paper product facility) during the 10-year period beginning on the later of the date of the enactment of this section or the date the facility was originally placed in service, and (B)used by the taxpayer at, or provided by the taxpayer to, any pulp, paper or paperboard manufacturing facility located in the United States. (b)

Maximum annual credit per facility

(1)

In general

The credit determined under this section for energy used during the taxable year at any qualified paper product facility shall not exceed $25,000,000. (2)

Coordination with advance payments

The dollar amount in paragraph (1) shall be reduced for any taxable year by the aggregate of the claims made under section 6429 for periods during such year with respect to such facility. (c)

Denial of double benefit

Btus may not be taken into account under subsection (a)(2) if any credit is allowed under section 40, 40A, 45, or 6426 for the electricity generation, the feedstock, or for the blending of the feedstock associated with the Btus. (d)

Definitions

For purposes of this section— (1)

Biomass fuels

(A)

In general

The term biomass fuels means any liquid, solid, or gaseous fuel derived from biomass (as defined in section 45K(c)(3)) or from biomass process residuals from recycled and other paper facilities. (B)

Cofiring with fossil fuels

In the case of fossil fuel burned in conjunction with any biomass fuel, only the Btus attributable to biomass fuel may be taken into account under subsection (a). (2)

Qualified paper product facility

The term qualified paper product facility means any pulp, paper, or paperboard manufacturing facility— (A)which is originally placed in service before the close of the 5-year period beginning on the date of the enactment of this section, and (B)which is located in the United States. (e)

Reinvestment requirement

(1)

In general

The tax imposed by this chapter for any taxable year shall be increased by the recapture amount (if any) for the 3rd preceding taxable year. (2)

Recapture amount

For purposes of paragraph (1), the term recapture amount means, with respect to any taxable year, the excess (if any) of— (A)50 percent of the sum of— (i)the credit determined under this section for the taxable year, and (ii)the aggregate payments made under section 6429 to the taxpayer for steam and electricity produced during such year, over (B)the aggregate qualified reinvestment made by the taxpayer during such year and the 3 succeeding taxable years (reduced by the qualified reinvestment taken into account in determining the recapture amount for any prior taxable year). (3)

Qualified reinvestment

(A)

In general

For purposes of paragraph (2), the term qualified reinvestment means the basis of renewable energy projects, energy efficiency projects and other environmental improvements at facilities owned by the taxpayer and located in the United States. (B)

Reduction for federal benefits

The basis otherwise taken into account under subparagraph (A) shall be reduced by the aggregate of— (i)the credits under this chapter, and (ii)Federal grants, allowed or received on account of the investment.(4)

When reinvestments taken into account

(A)

In general

Qualified reinvestment shall be taken into account when the property is placed in service. (B)

Election

At the election of the taxpayer with respect to any qualified reinvestment which is constructed by the taxpayer— (i)the estimated amount of such investment shall be treated as made when the physical work of such construction begins, and (ii)proper adjustments shall be made to such amount in the taxable year in which such investment is placed in service in any case where such estimate is greater or less than the proper amount. (f)

Multiple facility owners

If more than 1 person has an ownership interest in a qualified paper product facility, the dollar limitation in subsection (b) shall be allocated among such persons under regulations prescribed by the Secretary.

. (b)

Credit made part of general business credit and allowable against minimum tax

(1)

In general

Subsection (b) of section 38 of such Code (relating to current year business credit) is amended by striking plus at the end of paragraph (34), by striking the period at the end of paragraph (35) and inserting , plus, and by adding at the end the following new paragraph: (36)the renewable green-energy pulp, paper or paperboard manufacturing credit determined under section 45R. . (2)

Credit allowable against minimum tax

Subparagraph (B) of section 38(c)(4) of such Code (relating to specified credits) is amended by striking and at the end of clause (vii), by striking the period at the end of clause (viii) and inserting , and, and by adding at the end the following new clause: (ix)the credit determined under section 45R. . (c)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 45Q the following new item: Sec. 45R. Energy derived from biomass to power domestic paper, pulp and paperboard manufacturing process facilities.. (d)

Effective date

The amendments made by this section shall apply to energy produced after December 31, 2009, in taxable years ending after such date.

3.

Advance payments for liquid biomass used as a fuel at paper product facilities

(a)

In general

Subchapter B of chapter 65 of the Internal Revenue Code of 1986 (relating to abatements, credits, and refunds) is amended by striking section 6429 and inserting the following new section:

6429.

Advance payments for liquid biomass used as a fuel at paper product facilities

(a)

In general

If any person uses any qualified biomass liquid as a fuel to produce steam or electricity for use at any pulp, paper or paperboard manufacturing facility located in the United States, the Secretary shall pay (without interest) to such person an amount equal to— (1)$4, multiplied by (2)the number of million Btus of steam and electricity so produced. (b)

Maximum annual payments per facility

The amount paid by the Secretary under this section for energy used during any taxable year at any qualified paper product facility shall not exceed $25,000,000. (c)

Qualified biomass liquid

For purposes of this section, the term qualified biomass liquid means any liquid— (1)which is derived from— (A)biomass (as defined in section 45K(c)(3)), or (B)biomass process residuals from recycled and other paper facilities if such residuals meet the test of liquids set forth in ASTM D4359–90, and (2)which is produced by such person at a qualified paper product facility (as defined in section 45R(d)(2)) during the 10-year period beginning on the later of the date of the enactment of this section or the date the facility was originally placed in service. (d)

Time for filing claims; period covered

(1)

In general

A claim may be filed under this section by any person for any period— (A)for which $200 or more is payable, and (B)which is not less than 1 week. In the case of an electronic claim, this paragraph shall be applied without regard to subparagraph (A).(2)

Payment of claim

Notwithstanding subsection (a), if the Secretary has not paid pursuant to a claim filed under this section within 45 days of the date of the filing of such claim (20 days in the case of an electronic claim), the claim shall be paid with interest from such date determined by using the overpayment rate and method under section 6621. (3)

Time for filing claim

No claim filed under this subsection shall be allowed unless filed on or before the last day of the first quarter following the earliest quarter included in the claim. (e)

Cofiring with fossil fuels

In the case of fossil fuel burned in conjunction with any qualified biomass liquid, only the Btus attributable to the qualified biomass liquid may be taken into account under subsection (a).

. (b)

Conforming amendments

(1)The table of sections for such subchapter B is amended by striking the item relating to section 6429 and inserting the following new item: Sec. 6429. Advance payments for liquid biomass used as a fuel at paper product facilities.. (2)Section 1324(b)(2) of title 31, United States Code, is amended by inserting 6429, after 6428,. (c)

Effective date

The amendments made by this section shall apply to energy produced after December 31, 2009, in taxable years ending after such date.