To amend the Internal Revenue Code of 1986 to provide an elective payment for specified energy property.

Summary: Renewable Energy Expansion Act of 2010 - Amends the Internal Revenue Code to: (1) allow taxpayers an election to receive a direct payment for investing in or producing specified energy property in lieu of existing energy tax credits; and (2) extend eligibility for such payments until January 1, 2013.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Renewable Energy Expansion Act of 
2010''.

SEC. 2. ELECTIVE PAYMENT FOR SPECIFIED ENERGY PROPERTY.

    (a) In General.--Chapter 65 of the Internal Revenue Code of 1986 
(relating to abatements, credits, and refunds) is amended by adding at 
the end the following new subchapter:

               ``Subchapter C--Direct Payment Provisions

``Sec. 6451. Elective payment for specified energy property.

``SEC. 6451. ELECTIVE PAYMENT FOR SPECIFIED ENERGY PROPERTY.

    ``(a) In General.--Any person making an election under this section 
with respect to any specified energy property originally placed in 
service by such person during the taxable year shall be treated as 
making a payment, against the tax imposed by subtitle A for the taxable 
year, equal to the applicable percentage of the basis of such property. 
Such payment shall be treated as made on the later of the due date of 
the return of such tax or the date on which such return is filed.
    ``(b) Applicable Percentage.--For purposes of this section, the 
term `applicable percentage' means--
            ``(1) 30 percent in the case of any property described in 
        paragraph (2)(A)(i) or (5) of section 48(a), and
            ``(2) 10 percent in the case of any other property.
    ``(c) Dollar Limitations.--In the case of property described in 
paragraph (1), (2), or (3) of section 48(c), the payment otherwise 
treated as made under subsection (a) with respect to such property 
shall not exceed the limitation applicable to such property under such 
paragraph.
    ``(d) Specified Energy Property.--For purposes of this section--
            ``(1) In general.--The term `specified energy property' 
        means energy property (within the meaning of section 48) 
        which--
                    ``(A) is originally placed in service before 
                January 1, 2013, or
                    ``(B) is originally placed in service on or after 
                such date and before the credit termination date with 
                respect to such property, but only if the construction 
                of such property began before January 1, 2013.
            ``(2) Credit termination date.--The term `credit 
        termination date' means--
                    ``(A) in the case of any energy property which is 
                part of a facility described in paragraph (1) of 
                section 45(d), January 1, 2013,
                    ``(B) in the case of any energy property which is 
                part of a facility described in paragraph (2), (3), 
                (4), (6), (7), (9), or (11) of section 45(d), January 
                1, 2014, and
                    ``(C) in the case of any energy property described 
                in section 48(a)(3), January 1, 2017.
        In the case of any property which is described in subparagraph 
        (C) and also in another subparagraph of this paragraph, 
        subparagraph (C) shall apply with respect to such property.
    ``(e) Special Rules for Certain Non-Taxpayers.--
            ``(1) Denial of payment.--Subsection (a) shall not apply 
        with respect to any property originally placed in service by--
                    ``(A) any governmental entity,
                    ``(B) any organization described in section 501(c) 
                or 401(a) and exempt from tax under section 501(a), or
                    ``(C) any entity referred to in paragraph (4) of 
                section 54(j).
            ``(2) Exception for property used in unrelated trade or 
        business.--Paragraph (1) shall not apply with respect to any 
        property originally placed in service by an entity described in 
        section 511(a)(2) if substantially all of the income derived 
        from such property by such entity is unrelated business taxable 
        income (as defined in section 512).
            ``(3) Special rules for partnerships and s corporations.--
        In the case of property originally placed in service by a 
        partnership or an S corporation--
                    ``(A) the election under subsection (a) may be made 
                only by such partnership or S corporation,
                    ``(B) such partnership or S corporation shall be 
                treated as making the payment referred to in subsection 
                (a) only to the extent of the proportionate share of 
                such partnership or S corporation as is owned by 
                persons who would be treated as making such payment if 
                the property were originally placed in service by such 
                persons, and
                    ``(C) the return required to be made by such 
                partnership or S corporation under section 6031 or 6037 
                (as the case may be) shall be treated as a return of 
                tax for purposes of subsection (a).
For purposes of subparagraph (B), rules similar to the rules of section 
168(h)(6) (other than subparagraph (F) thereof) shall apply.
    ``(f) Coordination With Production and Investment Credits.--In the 
case of any property with respect to which an election is made under 
this section--
            ``(1) Denial of production and investment credits.--No 
        credit shall be determined under section 45 or 48 with respect 
        to such property for the taxable year in which such property is 
        originally placed in service or any subsequent taxable year.
            ``(2) Reduction of payment by progress expenditures already 
        taken into account.--The amount of the payment treated as made 
        under subsection (a) with respect to such property shall be 
        reduced by the aggregate amount of credits determined under 
        section 48 with respect to such property for all taxable years 
        preceding the taxable year in which such property is originally 
        placed in service.
    ``(g) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Other definitions.--Terms used in this section which 
        are also used in section 45 or 48 shall have the same meaning 
        for purposes of this section as when used in such sections.
            ``(2) Application of recapture rules, etc.--Except as 
        otherwise provided by the Secretary--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, rules similar to the rules of section 
                50 shall apply.
                    ``(B) Exception to limitation on real estate 
                investment trusts, etc.--Paragraph (1) of section 50(d) 
                shall not apply.
                    ``(C) Application of normalization rules.--
                Paragraph (2) of section 50(d) shall not apply with 
                respect to property placed in service by a person in 
                the trade or business of furnishing or selling 
                electrical energy if any law or regulation requires 
                that not less than a certain amount of the electrical 
                energy so furnished or sold by such person be derived 
                from one or more renewable resources.
            ``(3) Provision of information.--A person shall not be 
        treated as having elected the application of this section 
        unless the taxpayer provides such information as the Secretary 
        (in consultation with the Secretary of Energy) may require for 
        purposes of verifying the proper amount to be treated as a 
        payment under subsection (a) and evaluating the effectiveness 
        of this section.
            ``(4) Exclusion from gross income.--Any credit or refund 
        allowed or made by reason of this section shall not be 
        includible in gross income or alternative minimum taxable 
        income.
            ``(5) Coordination with grant program.--If a grant under 
        section 1603 of the American Recovery and Reinvestment Tax Act 
        of 2009 is made with respect to any specified energy property--
                    ``(A) no election may be made under subsection (a) 
                with respect to such property on or after the date of 
                such grant, and
                    ``(B) if such grant is made after such election, 
                such property shall be treated as having ceased to be 
                specified energy property immediately after such 
                property was originally placed in service.''.
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 6211(b)(4)(A) of such Code 
        is amended by inserting ``and subchapter C of chapter 65 
        (including any payment treated as made under such subchapter)'' 
        after ``6431''.
            (2) Subparagraph (B) of section 6425(c)(1) of such Code is 
        amended--
                    (A) by striking ``the credits'' and inserting ``the 
                sum of--
                            ``(i) the credits'',
                    (B) by striking the period at the end of clause (i) 
                thereof (as amended by this paragraph) and inserting 
                ``, plus'', and
                    (C) by adding at the end the following new clause:
                            ``(ii) the payments treated as made under 
                        subchapter C of chapter 65.''.
            (3) Paragraph (3) of section 6654(f) of such Code is 
        amended--
                    (A) by striking ``the credits'' and inserting ``the 
                sum of--
                    ``(A) the credits'',
                    (B) by striking the period at the end of 
                subparagraph (A) thereof (as amended by this paragraph) 
                and inserting ``, and'', and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(B) the payments treated as made under subchapter 
                C of chapter 65.''.
            (4) Subparagraph (B) of section 6655(g)(1) of such Code is 
        amended--
                    (A) by striking ``the credits'' and inserting ``the 
                sum of--
                            ``(i) the credits'',
                    (B) by striking the period at the end of clause (i) 
                thereof (as amended by this paragraph) and inserting 
                ``, plus'', and
                    (C) by adding at the end the following new clause:
                            ``(ii) the payments treated as made under 
                        subchapter C of chapter 65.''.
            (5) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``, or from the provisions 
        of subchapter C of chapter 65 of such Code'' before the period 
        at the end.
            (6) The table of subchapters for chapter 65 of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following new item:

              ``subchapter c. direct payment provisions.''

    (c) Effective Date.--The amendments made by this section shall 
apply to property originally placed in service after the date of the 
enactment of this Act.