[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1639 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1639

   To amend the Internal Revenue Code of 1986 to improve and extend 
     certain energy-related tax provisions, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 6, 2009

 Mr. Bingaman (for himself, Ms. Snowe, and Mrs. Feinstein) 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 improve and extend 
     certain energy-related tax provisions, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Expanding 
Industrial Energy Efficiency Incentives Act of 2009''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Modifications in credit for combined heat and power system 
                            property.
Sec. 3. Motor energy efficiency improvement tax credit.
Sec. 4. Credit for replacement of CFC refrigerant chiller.
Sec. 5. Qualifying efficient industrial process water use project 
                            credit.

SEC. 2. MODIFICATIONS IN CREDIT FOR COMBINED HEAT AND POWER SYSTEM 
              PROPERTY.

    (a) Modification of Certain Capacity Limitations.--Section 
48(c)(3)(B) is amended--
            (1) by striking ``15 megawatts'' in clause (ii) and 
        inserting ``25 megawatts'',
            (2) by striking ``20,000 horsepower'' in clause (ii) and 
        inserting ``34,000 horsepower'', and
            (3) by striking clause (iii).
    (b) Nonapplication of Certain Rules.--Section 48(c)(3)(C) is 
amended by adding at the end the following new clause:
                            ``(iv) 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, subparagraph (A) shall be 
                        applied without regard to clause (ii).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to periods after the date of the enactment of this Act, 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).

SEC. 3. MOTOR ENERGY EFFICIENCY IMPROVEMENT TAX CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new section:

``SEC. 45R. MOTOR ENERGY EFFICIENCY IMPROVEMENT TAX CREDIT.

    ``(a) In General.--For purposes of section 38, the motor energy 
efficiency improvement tax credit determined under this section for the 
taxable year is an amount equal to $120 multiplied by the motor 
horsepower of an appliance, machine, or equipment--
            ``(1) manufactured in such taxable year by a manufacturer 
        which incorporates an advanced motor system into a newly 
        designed appliance, machine, or equipment or into a redesigned 
        appliance, machine, or equipment which did not previously make 
        use of the advanced motor system, or
            ``(2) placed back into service in such taxable year by an 
        end user which upgrades an existing appliance, machine, or 
        equipment with an advanced motor system.
For any advanced motor system with a total horsepower of less than 10, 
such motor energy efficiency improvement tax credit is an amount which 
bears the same ratio to $120 as 1 horsepower bears to such total 
horsepower.
    ``(b) Advanced Motor System.--For purposes of this section, the 
term `advanced motor system' means a motor and any required associated 
electronic control which--
            ``(1) offers variable or multiple speed operation, and
            ``(2) uses permanent magnet technology, electronically 
        commutated motor technology, switched reluctance motor 
        technology, or such other motor systems technologies as 
        determined by the Secretary of Energy.
    ``(c) Aggregate Per Taxpayer Limitation.--
            ``(1) In general.--The amount of the credit determined 
        under this section for any taxpayer for any taxable year shall 
        not exceed the excess (if any) of $2,000,000 over the aggregate 
        credits allowed under this section with respect to such 
        taxpayer for all prior taxable years.
            ``(2) Aggregation rules.--For purposes of this section, all 
        persons treated as a single employer under subsections (a) and 
        (b) of section 52 shall be treated as 1 taxpayer.
    ``(d) Special Rules.--
            ``(1) Basis reduction.--For purposes of this subtitle, the 
        basis of any property for which a credit is allowable under 
        subsection (a) shall be reduced by the amount of such credit so 
        allowed.
            ``(2) No double benefit.--No other credit shall be 
        allowable under this chapter for property with respect to which 
        a credit is allowed under this section.
            ``(3) Property used outside united states not qualified.--
        No credit shall be allowable under subsection (a) with respect 
        to any property referred to in section 50(b)(1).
    ``(e) Application.--This section shall not apply to property 
manufactured or placed back into service before the date which is 6 
months after the date of the enactment of this section or after 
December 31, 2013.''.
    (b) Conforming Amendments.--
            (1) Section 38(b) 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 motor energy efficiency improvement tax credit 
        determined under section 45R.''.
            (2) Section 1016(a) is amended by striking ``and'' at the 
        end of paragraph (36), by striking the period at the end of 
        paragraph (37) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(38) to the extent provided in section 45R(d)(1).''.
            (3) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 is amended by adding at the end the 
        following new item:

``Sec. 45R. Motor energy efficiency improvement tax credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property manufactured or placed back into service after the 
date which is 6 months after the date of the enactment of this Act.

SEC. 4. CREDIT FOR REPLACEMENT OF CFC REFRIGERANT CHILLER.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1, 
as amended by this Act, is amended by adding at the end the following 
new section:

``SEC. 45S. CFC CHILLER REPLACEMENT CREDIT.

    ``(a) In General.--For purposes of section 38, the CFC chiller 
replacement credit determined under this section for the taxable year 
is an amount equal to--
            ``(1) $150 multiplied by the tonnage rating of a CFC 
        chiller replaced with a new efficient chiller that is placed in 
        service by the taxpayer during the taxable year, plus
            ``(2) if all chilled water distribution pumps connected to 
        the new efficient chiller include variable frequency drives, 
        $100 multiplied by any tonnage downsizing.
    ``(b) CFC Chiller.--For purposes of this section, the term `CFC 
chiller' includes property which--
            ``(1) was installed after 1980 and before 1993,
            ``(2) utilizes chlorofluorocarbon refrigerant, and
            ``(3) until replaced by a new efficient chiller, has 
        remained in operation and utilized for cooling a commercial 
        building.
    ``(c) New Efficient Chiller.--For purposes of this section, the 
term `new efficient chiller' includes a water-cooled chiller which is 
certified to meet efficiency standards effective on January 1, 2010, as 
defined in table 6.8.1c in Addendum M to Standard 90.1-2007 of the 
American Society of Heating, Refrigerating, and Air Conditioning 
Engineers.
    ``(d) Tonnage Downsizing.--For purposes of this section, the term 
`tonnage downsizing' means the amount by which the tonnage rating of 
the CFC chiller exceeds the tonnage rating of the new efficient 
chiller.
    ``(e) Energy Audit.--As a condition of receiving a tax credit under 
this section, an energy audit shall be performed on the building prior 
to installation of the new efficient chiller, identifying cost-
effective energy-saving measures, particularly measures that could 
contribute to chiller downsizing. The audit shall satisfy criteria that 
shall be issued by the Secretary of Energy.
    ``(f) Property Used by Tax-exempt Entity.--In the case of a CFC 
chiller replaced by a new efficient chiller the use of which is 
described in paragraph (3) or (4) of section 50(b), the person who sold 
such new efficient chiller to the entity shall be treated as the 
taxpayer that placed in service the new efficient chiller that replaced 
the CFC chiller, but only if such person clearly discloses to such 
entity in a document the amount of any credit allowable under 
subsection (a) and the person certifies to the Secretary that the 
person reduced the price the entity paid for such new efficient chiller 
by the entire amount of such credit.
    ``(g) Termination.--This section shall not apply to replacements 
made after December 31, 2012.''.
    (b) Conforming Amendments.--
            (1) Section 38(b), as amended by this Act, is amended by 
        striking ``plus'' at the end of paragraph (35), by striking the 
        period at the end of paragraph (36) and inserting ``, plus'', 
        and by adding at the end the following new paragraph:
            ``(37) the CFC chiller replacement credit determined under 
        section 45S.''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1, as amended by this Act, is amended 
        by adding at the end the following new item:

``Sec. 45S. CFC chiller replacement credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to replacements made after the date of the enactment of this Act.

SEC. 5. QUALIFYING EFFICIENT INDUSTRIAL PROCESS WATER USE PROJECT 
              CREDIT.

    (a) In General.--Section 46 is amended by striking ``and'' at the 
end of paragraph (4), by striking the period at the end of paragraph 
(5), and by adding at the end the following new paragraph:
            ``(6) the qualifying efficient industrial process water use 
        project credit.''.
    (b) Amount of Credit.--Subpart E of part IV of subchapter A of 
chapter 1 is amended by inserting after section 48C the following new 
section:

``SEC. 48D. QUALIFYING EFFICIENT INDUSTRIAL PROCESS WATER USE PROJECT 
              CREDIT.

    ``(a) In General.--
            ``(1) Allowance of credit.--For purposes of section 46, the 
        qualifying efficient industrial process water use project 
        credit for any taxable year is an amount equal to the 
        applicable percentage of the qualified investment for such 
        taxable year with respect to any qualifying efficient 
        industrial process water use project of the taxpayer.
            ``(2) Applicable percentage.--For purposes of subsection 
        (a), the applicable percentage is--
                    ``(A) 10 percent in the case of a qualifying 
                efficient industrial process water use project which 
                achieves a net energy consumption of less than 3,000 
                kilowatt hours per million gallons of water, and is 
                placed in service before January 1, 2013,
                    ``(B) 20 percent in the case of a qualifying 
                efficient industrial process water use project which 
                achieves a net energy consumption of less than 2,000 
                kilowatt hours per million gallons of water, and
                    ``(C) 30 percent in the case of a qualifying 
                efficient industrial process water use project which 
                achieves a net energy consumption of less than 1,000 
                kilowatt hours per million gallons of water.
    ``(b) Qualified Investment.--
            ``(1) In general.--For purposes of subsection (a), the 
        qualified investment for any taxable year is the basis of 
        eligible property placed in service by the taxpayer during such 
        taxable year which is part of a qualifying efficient industrial 
        process water use project.
            ``(2) Exceptions.--Such term shall not include any portion 
        of the basis related to--
                    ``(A) permitting,
                    ``(B) land acquisition, or
                    ``(C) infrastructure associated with sourcing or 
                water discharge.
            ``(3) Certain qualified progress expenditures rules made 
        applicable.--Rules similar to the rules of subsections (c)(4) 
        and (d) of section 46 (as in effect on the day before the 
        enactment of the Revenue Reconciliation Act of 1990) shall 
        apply for purposes of this section.
            ``(4) Special rule for subsidized energy financing.--Rules 
        similar to the rules of section 48(a)(4) (without regard to 
        subparagraph (D) thereof) shall apply for purposes of this 
        section.
            ``(5) Limitation.--The amount which is treated for all 
        taxable years with respect to any qualifying efficient 
        industrial process water use project with respect to any site 
        shall not exceed $10,000,000.
    ``(c) Definitions.--
            ``(1) Qualifying efficient industrial process water use 
        project.--The term `qualifying efficient industrial process 
        water use project' means, with respect to any site, a project--
                    ``(A) which replaces or modifies a system for the 
                use of water or steam in the production of goods in the 
                trade or business of manufacturing (including any 
                system for the use of water derived from blow-down from 
                cooling towers and steam systems in the generation of 
                electric power at a site also used for the production 
                of goods in the trade or business of manufacturing), 
                and
                    ``(B) which is designed to achieve--
                            ``(i) a reduction of not less than 20 
                        percent in water withdrawal and a reduction of 
                        not less than 10 percent of water discharge 
                        when compared to the existing water use at the 
                        site, or
                            ``(ii) a reduction of not less than 10 
                        percent in water withdrawal and a reduction of 
                        not less than 20 percent of water discharge 
                        when compared to the existing water use at the 
                        site.
            ``(2) Eligible property.--The term `eligible property' 
        means any property--
                    ``(A) which is part of a qualifying efficient 
                industrial process water use project and which is 
                necessary for the reduction in withdrawals or discharge 
                described in paragraph (1)(B),
                    ``(B)(i) the construction, reconstruction, or 
                erection of which is completed by the taxpayer, or
                    ``(ii) which is acquired by the taxpayer if the 
                original use of such property commences with the 
                taxpayer, and
                    ``(C) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable.
            ``(3) Net energy consumption.--The term `net energy 
        consumption' means the energy consumed, both on-site and off-
        site, with respect to the water described in paragraph (1)(A). 
        Net energy consumption shall be normalized per unit of 
        industrial output and measured under rules and procedures 
        established by the Secretary, in consultation with the 
        Administrator of the Environmental Protection Agency.
            ``(4) Water discharge.--The term `water discharge' means 
        all water leaving the site via permitted or unpermitted surface 
        water discharges, discharges to publicly owned treatment works, 
        and shallow- or deep-injection (whether on-site or off-site).
            ``(5) Water withdrawal.--The term `water withdrawal' means 
        all water taken for use at the site from on-site ground and 
        surface water sources together with any water supplied to the 
        site by a public water system.
    ``(d) Termination.--This section shall not apply to periods after 
December 31, 2014, under rules similar to the rules of section 48(m) 
(as in effect on the day before the date of the enactment of the 
Revenue Reconciliation Act of 1990).''.
    (c) Conforming Amendments.--
            (1) Section 49(a)(1)(C) is amended by striking ``and'' at 
        the end of clause (iv), by striking the period at the end of 
        clause (v) and inserting ``, and'', and by adding after clause 
        (v) the following new clause:
                            ``(vi) the basis of any property which is 
                        part of a qualifying efficient industrial use 
                        water project under section 48D.''.
            (2) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 48B the following new item:

``Sec. 48D. Qualifying efficient industrial process water use project 
                            credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods after January 1, 2011, 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).
                                 <all>