I 111th CONGRESS 2d Session H. R. 4751 IN THE HOUSE OF REPRESENTATIVES March 3, 2010 Mr. Tonko (for himself, Mr. Davis of Illinois, and Ms. Berkley) 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 encourage the deployment of highly efficient combined heat and power property, and for other purposes.

1.

Short title

This Act may be cited as the Innovative Energy Systems Act of 2010.

2.

Investment tax credit for highly efficient combined heat and power system property

(a)

In general

Clause (i) of section 48(a)(2)(A) of the Internal Revenue Code of 1986 is amended by striking and at the end of subclause (III), by redesignating subclause (IV) as subclause (V), and by inserting after subclause (III) the following new subclause: (IV)energy property described in paragraph (3)(A)(viii), and. (b)

Treated as energy property

Subparagraph (A) of section 48(a)(3) of such Code is amended by striking or at the end of clause (vi), by inserting or at the end of clause (vii), and by adding at the end the following new clause: (viii)highly efficient combined heat and power system property,. (c)

Highly efficient combined heat and power system property

Subsection (c) of section 48 of such Code is amended by adding at the end the following new paragraph: (5)

Highly efficient combined heat and power system property

(A)

Highly efficient combined heat and power system property

The term highly efficient combined heat and power system property means property at an industrial, commercial, or institutional facility comprising a system which— (i) (I)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), (II)has a system design that provides an energy efficiency percentage of at least 70 percent, and (III)is placed in service before January 1, 2017, or (ii) (I)recovers waste energy from which electricity is generated through the modification of an existing facility or addition of a new facility, and (II)is placed in service before January 1, 2017. (B)

Limitation

(i)

In general

In the case of highly efficient combined heat and power system property with an electrical capacity in excess of the applicable capacity, the credit under subsection (a)(1) (determined without regard to this paragraph) with respect to such property for the taxable year in which such property was placed in service shall not exceed the amount which bears the same ratio to such credit as the applicable capacity bears to the capacity of such property. (ii)

Applicable capacity

For purposes of clause (i), the term applicable capacity means 25 megawatts or a mechanical energy capacity of more than 34,000 horsepower or an equivalent combination of electrical and mechanical capacities. (C)

Institutional facility

The term institutional facility means a hospital or a facility of an educational organization described in section 170(b)(1)(A)(ii). (D)

Commercial facility

The term commercial facility shall not include any facility of a utility. . (d)

Effective date

The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.