[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2482 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 2482
To amend the Internal Revenue Code of 1986 to provide tax credits for
microgrid property.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 13, 2021
Mr. Panetta introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide tax credits for
microgrid property.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Making Imperiled Communities
Resistant to Outages with Generation that is Resilient, Islandable, and
Distributed Act'' or as the ``MICROGRID Act''.
SEC. 2. TAX CREDITS FOR MICROGRID PROPERTY.
(a) In General.--Subpart E of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 48C the following new section:
``SEC. 48D. MICROGRID PROPERTY.
``(a) In General.--For purposes of section 46, the microgrid
property credit for any taxable year is an amount equal to the
applicable percentage of the basis of the qualified microgrid property
placed in service by the taxpayer during such taxable year.
``(b) Applicable Percentage.--For purposes of this section--
``(1) In general.--The term `applicable percentage' means,
with respect to qualified microgrid property which is part of
any qualified microgrid, the percentage determined in
accordance with the following table determined with respect to
the calendar year in which construction of such qualified
microgrid begins:
``In the case of calendar year: The applicable percentage is:
2025 or any prior calendar year...... 30 percent
2026................................. 26 percent
2027................................. 22 percent
2028................................. 10 percent.
``(2) Treatment of conversions.--In the case of any system
which is converted into a qualified microgrid, the construction
of such microgrid shall be treated for purposes of this
subsection as beginning on the date on which such conversion
begins.
``(c) Qualified Microgrid Property.--For purposes of this section--
``(1) In general.--The term `qualified microgrid property'
means any qualified property--
``(A) which is part of a qualified microgrid,
``(B) either--
``(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,
``(C) which is not part of a bulk-power system (as
defined in section 215 of the Federal Power Act (16
U.S.C. 824o)), and
``(D) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable.
``(2) Qualified microgrid.--The term `qualified microgrid'
means an electrical system which--
``(A) incorporates a microgrid controller,
``(B) includes equipment which is capable of
generating not less than 4 kilowatts and not greater
than 50 megawatts of electricity,
``(C) is capable of operating in connection with
the electrical grid and as a single controllable entity
with respect to such grid, and
``(D) is capable of operating independently (and
disconnected) from such grid.
``(3) Qualified property.--
``(A) In general.--The term `qualified property'
means--
``(i) microgrid controllers, and
``(ii) electric distribution and switchgear
property.
``(B) Additional considerations.--Upon consultation
with the Secretary of Energy, the Secretary may
determine that a qualified property under this section
includes property connected to the bulk power system
(as defined in section 215 of the Federal Power Act (16
U.S.C. 824o)).
``(4) Microgrid controller.--The term `microgrid
controller' means, with respect to operation and islanding of a
qualified microgrid, the equipment which is necessary to
monitor and control the energy resources and loads on such
microgrid to maintain acceptable frequency, voltage, or
economic dispatch. Such term includes any software and
networking hardware necessary to the operation of such
equipment.
``(5) Electric distribution and switchgear property.--The
term `electric distribution and switchgear property' means,
with respect to operation and islanding of a qualified
microgrid, the equipment which is necessary to deliver electric
power from energy resources on such microgrid to loads on the
same such microgrid. Such term includes breakers, fuses, wires,
switchgear cabinets and bussing, paralleling switchgear,
transformers, power quality correction equipment, transfer
switches, disconnects, protective relays, metering equipment,
and wired and wireless communications equipment necessary to
the operation of such microgrid.
``(6) Treatment of spare parts.--Any qualified property
which is held by the taxpayer as a spare part for possible
replacement of qualified property which is part of a qualified
microgrid shall not fail to be treated as part of such
microgrid for purposes of this section.
``(d) Special Rules.--
``(1) Certain progress expenditure 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 date of the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of this section.
``(2) Denial of double benefit.--No credit shall be
determined under this section with respect to the basis of any
property if a credit is determined under any other section of
this title with respect to such basis.
``(e) Allowance of Personal Credit for Residential Microgrids.--In
the case of a qualified microgrid placed in service by any individual
in the residence of such individual--
``(1) this section shall be applied without regard to
subparagraph (C) of subsection (c)(1), and
``(2) the microgrid property credit determined under this
section for any taxable year with respect to qualified
microgrid property (determined after application of paragraph
(1)) which is part of such qualified microgrid shall be taken
into account as an increase in the amount of the credit
otherwise allowable to the taxpayer under section 25D for such
taxable year.
``(f) Termination.--No credit shall be determined under this
section with respect to any property placed in service after December
31, 2028.''.
(b) Elective Payment of Credit.--Subchapter B of chapter 65 of such
Code is amended by adding at the end the following new section:
``SEC. 6431. ELECTIVE PAYMENT OF MICROGRID PROPERTY CREDIT.
``(a) Energy Property.--In the case of an eligible person making an
election (at such time and in such manner as the Secretary may provide)
under this section with respect to any portion of the credit determined
under section 48D (determined without regard to subsection (d) of this
section) or any portion of the credit allowed under section 25D by
reason of section 48D(e) (as so determined), such eligible person shall
be treated as making a payment against the tax imposed by subtitle A
for the taxable year equal to the portion to which such election
applies.
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Eligible person.--The term `eligible person' means--
``(A) any organization exempt from tax under
section 501(a),
``(B) any State or local government, or a political
subdivision thereof, or any agency, authority, or
instrumentality of any one or more of the foregoing, or
any corporation which is wholly owned, directly or
indirectly, by any one or more of the foregoing,
``(C) any Indian tribal government,
``(D) any organization described in section
1381(a)(2), and
``(E) any not-for-profit electric utility which had
or has received a loan or loan guarantee under the
Rural Electrification Act of 1936.
``(2) Indian tribal government.--The term `Indian tribal
government' shall have the meaning given such term by section
139E.
``(3) Determination of credits.--The amount of any credit
described in subsection (a) which is treated as allowed to any
eligible person shall be determined for purposes of such
subsection in the same manner as though such eligible person
were subject to the tax imposed under chapter 1.
``(4) Timing.--The payment described in subsection (a)
shall be treated as made on--
``(A) in the case of any government, or political
subdivision, to which paragraph (1) applies and for
which no return is required under section 6011 or
6033(a), the later of the date that a return would be
due under section 6033(a) if such government or
subdivision were described in that section or the date
on which such government or subdivision submits a claim
for credit or refund (at such time and in such manner
as the Secretary shall provide), and
``(B) in any other case, the later of the due date
of the return of tax for the taxable year or the date
on which such return is filed.
``(5) Waiver of special rules.--In the case of an election
under this section, the determination of any applicable credit
shall be without regard to paragraphs (3) and (4)(A)(i) of
section 50(b).
``(6) Governmental entities treated as taxpayers.--In the
case of an election under this section--
``(A) any State or local government, or a political
subdivision thereof, or
``(B) any Indian tribal government,
shall, to the extent not a taxpayer as defined under section
7701(a)(14), be treated as a taxpayer for purposes of this
section and determining any applicable credit.
``(c) Exclusion From Gross Income.--Gross income of the taxpayer
shall be determined without regard to this section.
``(d) Denial of Double Benefit.--The credit otherwise determined
under section 45D (and the credit otherwise allowed under section 25D
by reason of section 48D(e)), determined without regard to this
subsection, shall be reduced by the amount of the portion of such
credits with respect to which the taxpayer makes the election under
subsection (a).''.
(c) Conforming Amendments.--
(1) Section 46 of such Code is amended by striking ``and''
at the end of paragraph (5), by striking the period at the end
of paragraph (6) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(7) the microgrid property credit.''.
(2) Section 49(a)(1)(C) of such Code is amended by striking
``and'' at the end of clause (iv), by striking the period at
the end of clause (v) and inserting a comma, and by adding at
the end the following new clause:
``(vi) the basis of any qualified microgrid
property under section 48D.''.
(3) Section 50(a)(2)(E) of such Code is amended by striking
``or 48C(b)(2)'' and inserting ``48C(b)(2), or 48D(d)(1)''.
(4) The table of sections for subpart E of part IV of
subchapter A of chapter 1 of such Code is amended by inserting
after the item relating to section 48C the following new item:
``Sec. 48D. Microgrid property.''.
(5) The table of sections for subchapter B of chapter 65 of
such Code is amended by adding at the end the following new
item:
``Sec. 6431. Elective payment of microgrid property credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 2020, 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).
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