Bill would alter tax credit for open-loop biomass, MSW facilities

By Erin Voegele | October 01, 2014

Sen. Robert Menendez, D-N.J., recently introduced legislation that aims to alter the Section 45 tax credit for renewable energy produced from certain open-loop biomass and trash facilities. The bill, S. 2856, was introduced on Sept. 18 and referred to the Senate Committee on Finance. To date, Sens. Benjamin Cardin, D-Md., and Susan Collins, R-Maine, have signed on to cosponsor the measure.

According to a copy of the legislation provided to Biomass Magazine by Menendez’s office, the bill would add a provision to the current tax code allowing certain open-loop biomass and trash-to-energy facilities to alter how the tax credit is calculated.

Under current U.S. code, the renewable electricity production credit for a taxable year is determined by multiplying 1.5 cents by the kilowatt hours of electricity produced by the taxpayer from qualified resources at a qualified facility during the 10-year period beginning on the date the facility was originally placed into service and sold by the taxpayer to an unrelated person during the taxable year. S. 2856 includes a provision that would allow the taxpayer to elect to substitute the portion of the equation that reads “the 10-year period beginning on the data the facility was originally placed in service,” with “the period beginning after December 1, 2013, and ending before January 1, 2016.” Certain limitations would apply.

The provision would apply to open-loop biomass facilities and trash facilities. Trash facilities are defined as those that use municipal solid waste to produce electricity. Additional information on the bill is available on the Library of Congress Thomas website.