[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 3352 Introduced in Senate (IS)]
112th CONGRESS
2d Session
S. 3352
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
June 28, 2012
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 and Water Efficiency Incentives Act of 2012''.
(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. 6. Investment tax credit for biomass heating property.
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 and drive 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 and drive 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 and drive system.
For any advanced motor and drive 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 such total horsepower
bears to 1 horsepower.
``(b) Advanced Motor and Drive System.--For purposes of this
section, the term `advanced motor and drive 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, synchronous reluctance, or such other motor and
drive 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, 2015.''.
(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, 2015.''.
(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)--
``(A) In general.--The applicable percentage is--
``(i) 10 percent in the case of a
qualifying efficient industrial process water
use project which achieves a 25 percent or
greater (but less than 50 percent) reduction in
water use for industrial purposes,
``(ii) 20 percent in the case of a
qualifying efficient industrial process water
use project which achieves a 50 percent or
greater (but less than 75 percent) reduction in
water use for industrial purposes, and
``(iii) 30 percent in the case of a
qualifying efficient industrial process water
use project which achieves a 75 percent or
greater reduction in water use for industrial
purposes.
``(B) Water use.--For purposes of subparagraph
(A)--
``(i) Measurement of reduction in water
use.--
``(I) In general.--The taxpayer
shall elect one of the methods
specified in clause (ii) for measuring
the reduction in water use achieved by
a qualifying efficient industrial
process water use project.
``(II) Irrevocable election.--An
election under subclause (I), once made
with respect to a qualifying efficient
industrial process water use project,
shall apply to the taxable year for
which made and all subsequent taxable
years, and may not be revoked.
``(III) Projected savings.--The
credit under subsection (a) may be
claimed on the basis of a reduction in
water use which is projected, by a
registered professional engineer who is
not a related person (within the
meaning of section 144(a)(3)(A)) to the
taxpayer or the installer of eligible
property, to be achieved by a
qualifying efficient industrial process
water use project. Such projection, if
used as a basis for determining the
credit under subsection (a), shall be
included with the return of tax.
``(ii) Methods specified.--The methods
specified in this clause are--
``(I) a measurement of the
percentage reduction in water use per
unit of product manufactured by the
taxpayer, and
``(II) a measurement of the
percentage reduction in water use per
pound of product manufactured by the
taxpayer.
``(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 not directly associated with
the implementation of the technology or process
improvements of the qualifying efficient industrial
process water use project.
``(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.--For purposes of this section--
``(1) Qualifying efficient industrial process water use
project.--
``(A) In general.--The term `qualifying efficient
industrial process water use project' means, with
respect to any site, a project which retrofits or
expands an existing facility to implement technology or
process improvements which are designed to reduce water
use for systems that use any form of water in the
production of goods in the manufacturing sector (as
defined in North American Industrial Classification
System codes 31, 32, and 33), including any system that
uses water for heating, cooling, or energy production
for the production of goods in the trade or business of
manufacturing. Such term shall not include a project
which alters an existing facility to change the type of
goods produced by such facility.
``(B) Systems.--For purposes of subparagraph (A),
the term `system' does not include any system which
does not encompass 1 or more complete processes.
``(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 water use described in
paragraph (1),
``(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) Water use.--
``(A) In general.--The term `water use' means all
water taken for use at the site directly from ground
and surface water sources together with any water
supplied to the site by a regulated water system.
``(B) Regulated water system.--The term `regulated
water system' means a system that supplies water that
has been treated to potable standards.
``(d) Termination.--This section shall not apply to periods after
December 31, 2016, 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, 2013, 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. 6. INVESTMENT TAX CREDIT FOR BIOMASS HEATING PROPERTY.
(a) In General.--Subparagraph (A) of section 48(a)(3) is amended by
striking ``or'' at the end of clause (vi), by inserting ``or'' at the
end of clause (vii), and by inserting after clause (vii) the following
new clause:
``(viii) open-loop biomass (within the
meaning of section 45(c)(3)) heating property,
including boilers or furnaces which operate at
output efficiencies of not less than 65 percent
(measured by the higher heating value of the
fuel) and which provide thermal energy in the
form of heat, hot water, or steam for space
heating, air conditioning, domestic hot water,
or industrial process heat, but only with
respect to periods ending before January 1,
2016,''.
(b) 30 Percent and 15 Percent Credits.--
(1) In general.--Subparagraph (A) of section 48(a)(2) is
amended--
(A) by redesignating clause (ii) as clause (iii),
(B) by inserting after clause (i) the following new
clause:
``(ii) except as provided in clause (i)(V),
15 percent in the case of energy property
described in paragraph (3)(A)(viii), and'', and
(C) by inserting ``or (ii)'' after ``clause (i)''
in clause (iii), as so redesignated.
(2) Increased credit for greater efficiency.--Clause (i) of
section 48(a)(2)(A) is amended by striking ``and'' at the end
of subclause (III) and by inserting after subclause (IV) the
following new subclause:
``(V) energy property described in
paragraph (3)(A)(viii) which operates
at an output efficiency of not less
than 80 percent (measured by the higher
heating value of the fuel),''.
(c) Effective Date.--The amendments made by this section shall
apply to periods after the date of the enactment of this Act, 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).
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