Section 1 Short title
This Act may be cited as the “Biomass Thermal Utilization Act of 2021” or the “BTU Act of 2021”.
Biomass Thermal Utilization Act of 2021
A BILL
To amend the Internal Revenue Code of 1986 to include biomass heating appliances in the energy credit and to extend the credit for residential energy efficient property.
Sec. 2 Investment tax credit for biomass heating property
by striking “or” at the end of clause (vii),
by adding “or” at the end of clause (viii), and
and by inserting after clause (viii) the following new clause:
“(ix) open-loop biomass heating property (within the meaning of section 45(c)(3)) heating property, including boilers or furnaces that operate at thermal output efficiencies of not less than 75 percent (measured by the lower heating value of the fuel at nominal output), that are installed indoors, and that provide thermal energy in the form of heat, hot water, or steam for space heating, air conditioning, domestic hot water, or industrial process heat,”
Open-Loop biomass heating property defined— Section 48(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(6) Open-loop biomass heating property
“(A) In general—The term open-loop biomass heating property means any property which—
“(i) uses open-loop biomass (as defined in section 45(c)(3)) to produce thermal energy in the form of heat, hot water, hot air, or steam, and
“(ii) is used for space heating, air conditioning, domestic hot water, industrial process heat, or any combination of the foregoing.
“(B) Requirements for boilers and furnaces—Such term shall not include any boiler or furnace unless such boiler or furnace—
“(i) operates at thermal output efficiencies of not less than 75 percent (measured by the lower heating value of the fuel at nominal output), and
“(ii) is installed indoors.”
Energy percentage— Section 48(a)(2)(A)(i) of such Code is amended—
by striking “and” at the end of subclause (IV), and
by adding at the end the following new subclause:
“(VI) open-loop biomass heating property, but only with respect to property the construction of which begins before January 1, 2029, and”
Effective date— The amendments made by this section shall apply to periods after December 31, 2020, 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).
Sec. 3 Extension of residential energy efficient property credit
In general— Section 25D(h) of the Internal Revenue Code of 1986 is amended by striking “December 31, 2023” and inserting “December 31, 2028”.
Application of phaseout— Section 25D(g) of such Code is amended—
by striking “before January 1, 2023” in paragraph (2) and inserting “before January 1, 2022”,
by striking “and” at the end of paragraph (2),
by redesignating paragraph (3) as paragraph (5) and by inserting after paragraph (2) the following new paragraphs:
“(3) in the case of property placed in service after December 31, 2021, and before January 1, 2027, 30 percent,
“(4) in the case of property placed in service after December 31, 2026, and before January 1, 2028, 26 percent, and”
by striking “December 31, 2022, and before January 1, 2024” in paragraph (5) (as so redesignated) and inserting “December 31, 2027, and before January 1, 2029”.
Effective date— The amendments made by this section shall apply to expenditures made after the date of the enactment of this Act.