America's First Fuels Act
America's First Fuels Act
Plain Language Summary
# America's First Fuels Act Summary **What the Bill Does:** This bill would increase financial incentives for using biomass heating systems (wood stoves and boilers that burn wood and agricultural waste). It raises the tax credit for homeowners installing these systems from the current $2,000 annual limit to $10,000, and creates a new business tax credit covering 30% of the cost for commercial or industrial biomass heating systems. These tax credits reduce what people owe in federal taxes when they invest in this type of heating. **Who It Affects:** Homeowners considering biomass heating upgrades would benefit from the larger tax credit, making these systems more affordable. Businesses and farms using biomass for heat or hot water production would also gain access to new tax credits.
The bill is sponsored by Senator Angus King, an Independent from Maine, a state where wood heating is common. **Current Status:** The bill is currently in committee (S. 1345 in the 119th Congress), meaning it hasn't yet been voted on by the full Senate. It remains in the early stages of the legislative process.
CRS Official Summary
America's First Fuels ActThis bill increases the federal energy efficient home improvement tax credit amount allowed for installing a biomass stove or biomass boiler in a principal residence. The bill also establishes a new federal tax credit (as part of the general business tax credit) for investments in open-loop biomass heating property.Specifically, the bill increases to $10,000 the annual maximum amount of the energy efficient home improvement tax credit allowed for installing a biomass stove or biomass boiler in a principal residence. (Under current law, taxpayers may claim a tax credit of 30% of the cost, up to an annual maximum of $2,000, to install a biomass stove, a biomass boiler, or certain other energy-efficient property in a principal residence.)The bill also establishes a new business tax credit for 30% of the cost of any property which (1) uses open-loop biomass to produce thermal energy in the form of heat, hot water, hot air, or steam; and (2) is used for space heating, air conditioning, domestic hot water, or industrial process heat (or any combination of such uses). (Conditions apply.)However, the tax credit is reduced for open-loop biomass heating property financed with tax-exempt bonds.Finally, under the bill, businesses may elect to claim the tax credit for qualified open-loop biomass heating property progress expenses (expenses incurred in advance of placing such property in service) if the normal construction period for such property is two years or more and certain other conditions are met.
Latest Action
Read twice and referred to the Committee on Finance.