THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY RAPP, CAUSER, PICKETT, PYLE, BOBACK, CALTAGIRONE, DALEY, DAY, EVERETT, FARRY, GEIST, GIBBONS, GINGRICH, GROVE, KAUFFMAN, M. K. KELLER, KNOWLES, MAJOR, MURT, ROCK, ROSS, SWANGER AND THOMAS, JUNE 17, 2011

REFERRED TO COMMITTEE ON COMMERCE, JUNE 17, 2011  

AN ACT

Establishing the Biomass Energy Program; providing for the

powers and duties of the Department of Community and Economic

Development; establishing the Biomass Energy Loan Fund; and

providing for interfund transfers.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Biomass

Energy Program Act.

Section 2.  Legislative findings.

The General Assembly finds and declares as follows:

(1)  Biomass heating is a proven technology and

Pennsylvania is home to a prosperous and vibrant biomass

industry. Increased use of biomass as a fuel source can

contribute to Pennsylvania's energy security through a more

diversified mix of energy sources.

(2)  Utilizing one ton of wood for heat displaces

approximately 79 gallons of fuel oil that would have

otherwise been used.

(3)  Biomass has been recognized as a cost-efficient fuel

and can significantly reduce expenditures associated with

energy needs.

(4)  The economic value of biomass use is significant.

Studies have indicated that 90% of the funds used to produce

and utilize biomass energy remain in local economies, whereas

only about 10% of the funds used to produce and utilize

fossil fuels remain locally.

(5)  Biomass as a fuel source is a beneficial use for

underutilized low-grade timber, resulting in healthier and

more productive forests, and creates additional forestry and

agricultural jobs for Pennsylvania residents.

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Biomass energy."  The generation of heat or electricity by

using or converting:

(1)  the cellulosic products and by-products of forestry

operations, wood manufacturing processes and pulp and paper

manufacturing processes; 

(2)  organic material from a plant that is grown for the

purpose of being used for fuel or is protected by the Federal

Conservation Reserve Program, provided that if the plant is

grown on Conservation Reserve Program lands, the production

of the plant does not prevent achievement of the water

quality protection, soil erosion prevention or wildlife

enhancement purposes for which the land was primarily set

aside; or

(3)  any solid nonhazardous, cellulosic waste material

that is segregated from other waste materials, including, but

not limited to, waste pallets, crates and landscape or right-

of-way tree trimmings or agricultural sources, including, but

not limited to, orchard tree crops, vineyards, grain,

legumes, sugar and other crop by-products or residues.

"Biomass system."  A space heating, water heating,

cogeneration or distributed generation system that uses biomass

energy as its primary fuel source.

"Cogeneration system."  A system that uses a heat engine or

power station to simultaneously generate space or water heat as

well as electricity.

"Department."  The Department of Community and Economic

Development of the Commonwealth.

"Eligible costs."  The specific expense of a biomass system

to be installed, including, but not limited to, the costs of

necessary equipment, a chimney, air quality technology,

additional square footage necessary to house the heating unit

and fuel, equipment for fuel storage and delivery and equipment

to deliver heat to adjoining buildings. The term does not

include the costs of staff, fuel delivery and other ancillary

costs as determined by the department.

"Entity."  A school, institutional, community, public or

agricultural facility in this Commonwealth.

"Fund."  The Biomass Energy Loan Fund established by this

act.

"Program."  The Biomass Energy Program established by this

act.

"Secretary."  The Secretary of Community and Economic

Development of the Commonwealth.

"School."  A public or nonpublic prekindergarten,

kindergarten, elementary school or secondary school in this

Commonwealth at which the compulsory attendance requirements of

the Commonwealth may be met and which meets the applicable

requirements of Title VI of the Civil Rights Act of 1964 (Public

Law 88-352, 78 Stat. 241). The term includes a postsecondary

institution of higher education in this Commonwealth.

Section 4.  Biomass Energy Program.

The Biomass Energy Program is established in the department.

The purpose of the program is to aid entities in converting

traditional heating systems to use biomass energy as a primary

fuel source.

Section 5.  Biomass Energy loans.

The department shall issue loans to entities for up to 50% of

the incremental costs associated with the installation of a

space heating, water heating, cogeneration or distributed

generation system that uses biomass energy as the primary fuel

source, not to exceed $300,000 of the approved eligible costs.

Entities applying for loans under this act and receiving loan

funding under this act must conform to any and all regulations

pertaining to facility improvements and construction.

Section 6.  Standards.

The department shall establish minimum standards relating to

design, efficiency, performance and emissions for biomass energy

heating and cogeneration systems receiving funding under this

act.

Section 7.  Application.

On or before May 1 of each year following the effective date

of this section, entities interested in applying for a loan

under section 5 must submit an application to the department.

The application shall be on a form provided by the department

and shall include all of the following:

(1)  The name of the entity and building in which a

biomass system is to be used.

(2)  Demonstrated cost effectiveness, including a

detailed cost analysis of the proposed biomass system

outlining fuel costs and savings over time, as well as other

operating costs, and balancing the net savings against the

cost of installing the biomass system in relation to current

fuel and energy costs.

(3)  A description of the biomass system to be installed.

(4)  A description of the project's costs including the

amount the applicant intends to spend on the project and the

amount of assistance sought as a match under this act.

(5)  Such other information as the department may

require.

Section 8.  Department review.

The department shall review all applications received and

shall determine the applicants eligible for funding under this

act. If the department is satisfied that an applicant has met

all requirements, it shall approve the application and award the

loan. The department shall forward copies of all applications

received to a Statewide energy-use collaboration identified by

the department as the primary organization aimed at promoting

the use of local wood and biomass resources to provide reliable

energy for schools and businesses in this Commonwealth. The

group shall review the applications and provide its

recommendations for use by the department in awarding the loans. 

Section 9.  Biomass Energy Loan Fund.

(a)  Establishment.--The Biomass Energy Loan Fund is

established as a revolving loan fund in the State Treasury. The

moneys of the fund are appropriated on a continuing basis to the

department for the purposes of this act.

(b)  Funding.--All payments received by the department

pursuant to this act shall be deposited in the fund. Any unused

moneys in the fund shall remain in the fund and any interest

earned by the fund shall remain in the fund.

Section 10.  Report and recommendations.

The department shall make a report of this program listing:

(1)  The entities funded under this act.

(2)  A brief description of the nature of the projects

and the amount of funding each entity received.

(3)  Recommendations for improving the program.

Within one year of awarding the first loans under this act, and

each subsequent year thereafter, the department shall submit the

report to the President pro tempore of the Senate, the Minority

Leader of the Senate, the Speaker of the House of

Representatives and the Minority Leader of the House of

Representatives. The department shall also make the report

available on its publicly accessible Internet website.

Section 11.  Interfund transfers.

The Secretary of the Budget shall transfer the following sums

from the General Fund to the Biomass Energy Loan Fund to issue

loans made under section 5:

(1)  On July 1, 2011, the sum of $2,000,000.

(2)  On July 1, 2012, the sum of $2,000,000.

(3)  On July 1, 2013, the sum of $1,000,000.

Section 12.  Effective date.

This act shall take effect immediately.