I 

115TH CONGRESS 

2D SESSION H. R. 7196 

To amend the Internal Revenue Code of 1986 to provide investment and 

production tax credits for emerging energy technologies, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 29, 2018 

Mr. REED (for himself, Mr. LAHOOD, and Mr. PAULSEN) 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 

investment and production tax credits for emerging energy technologies, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Energy Sector Innova5 tion Credit Act of 2018’’. 

6 SEC. 2. INVESTMENT CREDIT FOR EMERGING ENERGY 

7 TECHNOLOGY. 

8 (a) IN GENERAL.—Subpart E of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by inserting after section 48C the fol2 lowing new section: 

3 ‘‘SEC. 48D. EMERGING ENERGY TECHNOLOGY CREDIT. 

4 ‘‘(a) IN GENERAL.—For purposes of section 46, the 

5 emerging energy technology credit for any taxable year is 

6 an amount equal to 30 percent of the basis of any qualified 

7 emerging energy property placed in service by the taxpayer 

8 during such taxable year. 

9 ‘‘(b) QUALIFIED EMERGING ENERGY PROPERTY.— 

10 For purposes of this section— 

11 ‘‘(1) IN GENERAL.—The term ‘qualified emerg12 ing energy property’ means property which is con13 structed, reconstructed, erected, or acquired by the 

14 taxpayer, the original use of which commences with 

15 the taxpayer, and which is— 

16 ‘‘(A) a qualified production facility (as de17 fined in section 45T(d), determined without re18 gard to paragraph (2) thereof) which is a tier 

19 1 facility (as defined in section 45T(b)(2)(A)), 

20 or 

21 ‘‘(B) property which is placed in service at 

22 and used in connection with an existing electric 

23 generating facility which is a point source of air 

24 pollutants to retrofit such facility and which, 

25 with respect to such facility— 


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1 ‘‘(i) improves conversion efficiency (as 

2 defined in section 45T(e)(2)) or energy ef3 ficiency (as defined in section 45T(e)(3)) 

4 by at least 50 percent, 

5 ‘‘(ii) decreases water consumption, in 

6 the case of a type of facility which has sig7 nificant water consumption, by at least 75 

8 percent, or 

9 ‘‘(iii) as recognized by the Environ10 mental Protection Agency pursuant to its 

11 enforcement of the Clean Air Act (42 

12 U.S.C. 7401 et seq.) or by administrative 

13 action, reduces, sequesters, or controls by 

14 at least 50 percent the emission of air pol15 lutants which can be reasonably antici16 pated to endanger public health or welfare. 

17 ‘‘(2) DENIAL OF DOUBLE BENEFIT.—Such 

18 term shall not include— 

19 ‘‘(A) any property which, 

20 ‘‘(B) property any portion of which, or 

21 ‘‘(C) property placed in service at and used 

22 in connection with a facility which, 

23 has been treated as a qualified facility for purposes 

24 of section 45(d), as an advanced nuclear power facil25 ity for purposes of section 45J, as a qualified facility 


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1 for purposes of section 45Q, as a qualified produc2 tion facility for purposes of section 45T, as energy 

3 property for purposes of section 48, or as a qualified 

4 investment for purposes of section 48A, 48B, or 

5 48C, for any taxable year. 

6 ‘‘(3) POINT SOURCE.—For purposes of para7 graph (1)(B), the term ‘point source’ means a large, 

8 stationary and non-mobile, identifiable source of 

9 emissions that releases pollutants into the atmos10 phere. 

11 ‘‘(c) FIRST OF ITS KIND TECHNOLOGY.— 

12 ‘‘(1) IN GENERAL.—In the case of any qualified 

13 emerging energy property which is the first of its 

14 kind, subsection (a) shall be applied by substituting 

15 ‘40 percent’ for ‘30 percent’. 

16 ‘‘(2) FIRST OF ITS KIND.—Property shall be 

17 treated as the first of its kind if such property is 1 

18 of the first 3 original demonstrations in the United 

19 States of an engineering design for megawatt-scale 

20 electric power generation which generates revenue 

21 from sales of electric power. 

22 ‘‘(3) DETERMINATION.— 

23 ‘‘(A) IN GENERAL.—The Secretary, in con24 sultation with the Secretary of Energy, shall de25 velop a process to determine whether qualified 


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1 emerging energy property is first of its kind. 

2 Such process shall include a certification, at the 

3 request of the taxpayer before the commence4 ment of construction, that the property will be 

5 treated as first of its kind. Such process shall 

6 be designed to make a determination not later 

7 than 90 days after the submission of an appli8 cation for determination. 

9 ‘‘(B) TERMINATION IF CONSTRUCTION

10 DOES NOT PROCEED.—Except as otherwise pro11 vided by the Secretary, a certification of any 

12 qualified emerging energy property under sub13 paragraph (A) shall cease to have any force or 

14 effect if construction of such property does not 

15 begin before the date which is 5 years after the 

16 date of such certification or if the Secretary 

17 makes a determination that such construction 

18 has been suspended indefinitely. 

19 ‘‘(d) CERTAIN QUALIFIED PROGRESS EXPENDITURE

20 RULES MADE APPLICABLE.—Rules similar to the rules of 

21 subsections (c)(4) and (d) of section 46 (as in effect on 

22 the day before the enactment of the Revenue Reconcili23 ation Act of 1990) shall apply for purposes of this section. 

24 ‘‘(e) TRANSFER OF CREDIT BY CERTAIN PUBLIC EN25 TITIES.— 


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1 ‘‘(1) IN GENERAL.—If, with respect to a credit 

2 under subsection (a) for any taxable year— 

3 ‘‘(A) a qualified public entity would be the 

4 taxpayer (but for this paragraph), and 

5 ‘‘(B) such entity elects the application of 

6 this paragraph for such taxable year with re7 spect to all (or any portion specified in such 

8 election) of such credit, the eligible project part9 ner specified in such election, and not the quali10 fied public entity, shall be treated as the tax11 payer for purposes of this title with respect to 

12 such credit (or such portion thereof). 

13 ‘‘(2) DEFINITIONS.—For purposes of this sub14 section— 

15 ‘‘(A) QUALIFIED PUBLIC ENTITY.—The 

16 term ‘qualified public entity’ means— 

17 ‘‘(i) a Federal, State, or local govern18 ment entity, or any political subdivision, 

19 agency, or instrumentality thereof, 

20 ‘‘(ii) a mutual or cooperative electric 

21 company described in section 501(c)(12) or 

22 1381(a)(2), or 

23 ‘‘(iii) a not-for-profit electric utility 

24 which had or has received a loan or loan 


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1 guarantee under the Rural Electrification 

2 Act of 1936. 

3 ‘‘(B) ELIGIBLE PROJECT PARTNER.—The 

4 term ‘eligible project partner’ means any person 

5 who— 

6 ‘‘(i) is responsible for, or participates 

7 in, the design or construction of the quali8 fied emerging energy property to which the 

9 credit under subsection (a) relates, 

10 ‘‘(ii) is a financial institution pro11 viding financing for the construction or op12 eration of such property, or 

13 ‘‘(iii) has an ownership interest in 

14 such property. 

15 ‘‘(3) SPECIAL RULES.— 

16 ‘‘(A) APPLICATION TO PARTNERSHIPS.—In 

17 the case of a credit under subsection (a) which 

18 is determined at the partnership level— 

19 ‘‘(i) for purposes of paragraph (1)(A), 

20 a qualified public entity shall be treated as 

21 the taxpayer with respect to such entity’s 

22 distributive share of such credit, and 

23 ‘‘(ii) the term ‘eligible project partner’ 

24 shall include any partner of the partner25 ship. 


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1 ‘‘(B) TAXABLE YEAR IN WHICH CREDIT

2 TAKEN INTO ACCOUNT.—In the case of any 

3 credit (or portion thereof) with respect to which 

4 an election is made under paragraph (1), such 

5 credit shall be taken into account in the first 

6 taxable year of the eligible project partner end7 ing with, or after, the qualified public entity’s 

8 taxable year with respect to which the credit 

9 was determined. 

10 ‘‘(C) TREATMENT OF TRANSFER UNDER

11 PRIVATE USE RULES.—For purposes of section 

12 141(b)(1), any benefit derived by an eligible 

13 project partner in connection with an election 

14 under this subsection shall not be taken into ac15 count as a private business use.’’. 

16 (b) CREDIT MADE PART OF INVESTMENT CREDIT.— 

17 Section 46 of such Code is amended by striking ‘‘and’’ 

18 at the end of paragraph (5), by striking the period at the 

19 end of paragraph (6) and inserting ‘‘, and’’, and by adding 

20 at the end the following new paragraph: 

21 ‘‘(7) the emerging energy technology credit.’’. 

22 (c) CONFORMING AMENDMENTS.— 

23 (1) Section 49(a)(1)(C) of such Code is amend24 ed by striking ‘‘and’’ at the end of clause (iv), by 

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1 serting ‘‘, and’’, and by adding at the end the fol2 lowing new clause: 

3 ‘‘(vi) the basis of any qualified emerg4 ing energy property (as defined in section 

5 48D(b)).’’. 

6 (2) The table of sections for subpart E of part 

7 IV of subchapter A of chapter 1 of such Code is 

8 amended by inserting after the item relating to sec9 tion 48D the following new item: 

‘‘Sec. 48D. Emerging energy technology credit.’’. 

10 (d) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to property placed in service in 

12 taxable years beginning after the date of the enactment 

13 of this Act, under rules similar to the rules of section 

14 48(m) of the Internal Revenue Code of 1986 (as in effect 

15 on the day before the date of the enactment of the Rev16 enue Reconciliation Act of 1990). 

17 SEC. 3. PRODUCTION CREDIT FOR EMERGING ENERGY 

18 TECHNOLOGY. 

19 (a) IN GENERAL.—Subpart D of part IV of sub20 chapter A of chapter 1 of the Internal Revenue Code of 

21 1986 is amended by adding at the end the following new 

22 section: 


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1 ‘‘SEC. 45T. EMERGING ENERGY TECHNOLOGY PRODUCTION 

2 CREDIT. 

3 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

4 emerging energy technology production credit determined 

5 under this section for any taxable year beginning in the 

6 credit period with respect to a qualified production facility 

7 of the taxpayer is an amount equal to the applicable per8 centage of the lesser of— 

9 ‘‘(1) the annual gross receipts of the taxpayer 

10 from the sale of electricity generated at the qualified 

11 production facility to an unrelated person during 

12 such taxable year, or 

13 ‘‘(2) the product of— 

14 ‘‘(A) the national average wholesale price 

15 of a kilowatt hour of electricity in the taxable 

16 year, as determined by the Secretary in con17 sultation with the Administrator of the Energy 

18 Information Administration, multiplied by 

19 ‘‘(B) the number of kilowatt hours of elec20 tricity produced at the qualified production fa21 cility and sold to an unrelated person during 

22 the taxable year. 

23 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

24 this section— 

25 ‘‘(1) IN GENERAL.—The applicable percentage 

26 is— 


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1 ‘‘(A) in the case of a tier 1 facility, 60 per2 cent, 

3 ‘‘(B) in the case of a tier 2 facility, 45 per4 cent, 

5 ‘‘(C) in the case of a tier 3 facility, 30 per6 cent, 

7 ‘‘(D) in the case of a tier 4 facility, 15 per8 cent, and 

9 ‘‘(E) in the case of any other facility, zero 

10 percent. 

11 ‘‘(2) FACILITY TIERS.— 

12 ‘‘(A) TIER 1 FACILITY.—The term ‘tier 1 

13 facility’ means, with respect to any taxable 

14 year, an electric generating facility using a type 

15 of technology which accounts for less than .5 

16 percent of annual domestic electricity produc17 tion in the preceding taxable year, as deter18 mined by the Secretary on the basis of data re19 ported by the Energy Information Administra20 tion. 

21 ‘‘(B) TIER 2 FACILITY.—The term ‘tier 2 

22 facility’ means, with respect to any taxable 

23 year, an electric generating facility using a type 

24 of technology which accounts for at least .5 per25 cent but less than 1 percent of annual domestic 


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1 electricity production in the preceding taxable 

2 year, as determined by the Secretary on the 

3 basis of data reported by the Energy Informa4 tion Administration. 

5 ‘‘(C) TIER 3 FACILITY.—The term ‘tier 3 

6 facility’ means, with respect to any taxable 

7 year, an electric generating facility using a type 

8 of technology which accounts for at least 1 per9 cent but less than 1.5 percent of annual domes10 tic electricity production in the preceding tax11 able year, as determined by the Secretary on 

12 the basis of data reported by the Energy Infor13 mation Administration. 

14 ‘‘(D) TIER 4 FACILITY.—The term ‘tier 4 

15 facility’ means, with respect to any taxable 

16 year, an electric generating facility using a type 

17 of technology which accounts for at least 1.5 

18 percent but less than 2 percent of annual do19 mestic electricity production in the preceding 

20 taxable year, as determined by the Secretary on 

21 the basis of data reported by the Energy Infor22 mation Administration. 

23 ‘‘(c) CREDIT PERIOD.—For purposes of this section, 

24 the credit period with respect to any qualified production 


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1 facility is the 10-year period beginning with the date the 

2 facility was originally placed in service. 

3 ‘‘(d) QUALIFIED PRODUCTION FACILITY.—For pur4 poses of this section— 

5 ‘‘(1) IN GENERAL.—The term ‘qualified produc6 tion facility’ means any facility which— 

7 ‘‘(A) was originally placed in service after 

8 the date of the enactment of this Act, 

9 ‘‘(B) generates electricity, 

10 ‘‘(C) is located in the United States or a 

11 possession of the United States (as such terms 

12 are used in section 638), 

13 ‘‘(D) utilizes emerging technology, and 

14 ‘‘(E) is certified by the Secretary, after 

15 consultation with the Secretary of Energy, as a 

16 qualified production facility for purposes of this 

17 section. 

18 ‘‘(2) DENIAL OF DOUBLE BENEFIT.—Such 

19 term shall not include any facility which has been 

20 treated as a qualified facility for purposes of section 

21 45(d), as an advanced nuclear power facility for pur22 poses of section 45J, as a qualified facility for pur23 poses of section 45Q, as energy property for pur24 poses of section 48, as a qualified investment for 

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1 fied emerging energy property for purposes of sec2 tion 48D, for any taxable year. 

3 ‘‘(e) EMERGING TECHNOLOGY.—For purposes of this 

4 section— 

5 ‘‘(1) IN GENERAL.—The term ‘emerging tech6 nology’ means— 

7 ‘‘(A) any new or improved power conver8 sion fuel-based technology— 

9 ‘‘(i) which— 

10 ‘‘(I) reduces emission of air pol11 lutants that can be reasonably antici12 pated to endanger public health or 

13 welfare to below the volume or rate 

14 required by the Clean Air Act, in the 

15 case of a type of facility which has 

16 significant emission of air pollutants, 

17 or 

18 ‘‘(II) yields at least a 50 percent 

19 improvement in energy efficiency, as 

20 compared to existing fuel-based elec21 tric generating commercial technology, 

22 and 

23 ‘‘(ii) which operates with a capacity 

24 factor of at least 50 percent, 


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1 ‘‘(B) any new or improved reactor design 

2 licensed by the Nuclear Regulatory Commission 

3 which produces electricity through nuclear fis4 sion or a fusion chain reaction and which (when 

5 compared to existing nuclear commercial tech6 nologies)— 

7 ‘‘(i) reduces the high-level radioactive 

8 waste or spent nuclear fuel per unit of en9 ergy yield, 

10 ‘‘(ii) improves fuel utilization, 

11 ‘‘(iii) decreases core damage frequency 

12 or large early release frequency by at least 

13 a factor of 10, or 

14 ‘‘(iv) increases thermal efficiency, 

15 ‘‘(C) any new technology or new improve16 ment to technology which generates electricity 

17 from renewable energy (as defined in section 

18 203(b)(2) of the Energy Policy Act of 2005) 

19 and which generates at least a 25 percent in20 crease in the conversion efficiency of the facility 

21 as compared with the commercial technology of 

22 the same type as such technology which is con23 sidered to be the best of its type in commercial 

24 use, or 


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1 ‘‘(D) technology which the Secretary, in 

2 consultation with the Secretary of Energy, de3 termines would improve energy efficiency or 

4 conversion efficiency of electric generating com5 mercial technology by not less than 15 percent. 

6 ‘‘(2) CONVERSION EFFICIENCY.—The term 

7 ‘conversion efficiency’ means the fraction— 

8 ‘‘(A) the numerator of which is the total 

9 useful electrical or thermal power produced by 

10 an electric generating facility at normal oper11 ating rates, and expected to be consumed in its 

12 normal application, and 

13 ‘‘(B) the denominator of which is the inci14 dent energy, whether mechanical, radiation, or 

15 thermal energy, which is measurable at the 

16 input of the electric generating facility. 

17 ‘‘(3) ENERGY EFFICIENCY.—The term ‘energy 

18 efficiency’ means the fraction— 

19 ‘‘(A) the numerator of which is the total 

20 useful electrical, thermal, and mechanical power 

21 which is produced by the facility at normal op22 erating rates and expected to be consumed in 

23 its normal operation, and 


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1 ‘‘(B) the denominator of which is the lower 

2 heating value of the energy sources for the fa3 cility. 

4 ‘‘(4) EFFICIENCY BASELINE.—Not less fre5 quently than every 10 years, the Secretary, in con6 sultation with the Secretary of Energy, shall estab7 lish baseline levels with respect to the types of elec8 tric generating facilities and the measures of effi9 ciency described in paragraph (1) which a facility 

10 must exceed in order to meet the requirements of 

11 such paragraph. 

12 ‘‘(5) COMMERCIAL TECHNOLOGY.—The term 

13 ‘commercial technology’ means a design that has 

14 been installed in and is being used in 3 or more 

15 projects in the United States marketplace in the 

16 same general application as in the electric gener17 ating facility, and has been in such use in at least 

18 1 of such projects for a period of at least 5 years. 

19 ‘‘(6) CORE DAMAGE FREQUENCY.—The term 

20 ‘core damage frequency’ means the likelihood that, 

21 given the way a reactor is designed and operated, an 

22 accident could cause the fuel in the reactor to be 

23 damaged. 

24 ‘‘(7) LARGE EARLY RELEASE FREQUENCY.— 

25 The term ‘large early release frequency’ means the 


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1 likelihood of a release into the environment of a suf2 ficiently large quantity of fission products in an 

3 early enough time frame to have the potential for a 

4 prompt fatality. 

5 ‘‘(f) TRANSFER OF CREDIT BY CERTAIN PUBLIC EN6 TITIES.— 

7 ‘‘(1) IN GENERAL.—If, with respect to a credit 

8 under subsection (a) for any taxable year— 

9 ‘‘(A) a qualified public entity would be the 

10 taxpayer (but for this paragraph), and 

11 ‘‘(B) such entity elects the application of 

12 this paragraph for such taxable year with re13 spect to all (or any portion specified in such 

14 election) of such credit, the eligible project part15 ner specified in such election, and not the quali16 fied public entity, shall be treated as the tax17 payer for purposes of this title with respect to 

18 such credit (or such portion thereof). 

19 ‘‘(2) DEFINITIONS.—For purposes of this sub20 section— 

21 ‘‘(A) QUALIFIED PUBLIC ENTITY.—The 

22 term ‘qualified public entity’ means— 

23 ‘‘(i) a Federal, State, or local govern24 ment entity, or any political subdivision, 

25 agency, or instrumentality thereof, 


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1 ‘‘(ii) a mutual or cooperative electric 

2 company described in section 501(c)(12) or 

3 1381(a)(2), or 

4 ‘‘(iii) a not-for-profit electric utility 

5 which had or has received a loan or loan 

6 guarantee under the Rural Electrification 

7 Act of 1936. 

8 ‘‘(B) ELIGIBLE PROJECT PARTNER.—The 

9 term ‘eligible project partner’ means any person 

10 who— 

11 ‘‘(i) is responsible for, or participates 

12 in, the design or construction of the quali13 fied production facility to which the credit 

14 under subsection (a) relates, 

15 ‘‘(ii) is a financial institution pro16 viding financing for the construction or op17 eration of such facility, or 

18 ‘‘(iii) has an ownership interest in 

19 such facility. 

20 ‘‘(3) SPECIAL RULES.— 

21 ‘‘(A) APPLICATION TO PARTNERSHIPS.—In 

22 the case of a credit under subsection (a) which 

23 is determined at the partnership level— 

24 ‘‘(i) for purposes of paragraph (1)(A), 

25 a qualified public entity shall be treated as 


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1 the taxpayer with respect to such entity’s 

2 distributive share of such credit, and 

3 ‘‘(ii) the term ‘eligible project partner’ 

4 shall include any partner of the partner5 ship. 

6 ‘‘(B) TAXABLE YEAR IN WHICH CREDIT

7 TAKEN INTO ACCOUNT.—In the case of any 

8 credit (or portion thereof) with respect to which 

9 an election is made under paragraph (1), such 

10 credit shall be taken into account in the first 

11 taxable year of the eligible project partner end12 ing with, or after, the qualified public entity’s 

13 taxable year with respect to which the credit 

14 was determined. 

15 ‘‘(C) TREATMENT OF TRANSFER UNDER

16 PRIVATE USE RULES.—For purposes of section 

17 141(b)(1), any benefit derived by an eligible 

18 project partner in connection with an election 

19 under this subsection shall not be taken into ac20 count as a private business use. 

21 ‘‘(g) REGULATIONS.—Not later than 1 year after the 

22 date of the enactment of this section, the Secretary shall 

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1 lations shall include a process for making eligibility certifi2 cations described in subsection (d)(1)(E).’’. 

3 (b) CREDIT ALLOWED AS PART OF GENERAL BUSI4 NESS CREDIT.—Section 38(b) of such Code is amended 

5 by striking ‘‘plus’’ at the end of paragraph (31), by strik6 ing the period at the end of paragraph (32) and inserting 

7 ‘‘, plus’’, and by adding at the end the following new para8 graph: 

9 ‘‘(33) the emerging energy technology produc10 tion credit determined under section 45T(a).’’. 

11 (c) CLERICAL AMENDMENT.—The table of sections 

12 for subpart D of part IV of subchapter A of chapter 1 

13 of such Code is amended by adding at the end the fol14 lowing new item: 

‘‘Sec. 45T. Emerging energy technology production credit.’’. 

15 (d) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to electricity produced and sold 

17 after the date of the enactment of this Act. 

18 SEC. 4. MODIFICATION OF ENERGY CREDIT. 

19 (a) ENERGY CREDIT FOR ENERGY STORAGE TECH20 NOLOGIES.— 

21 (1) IN GENERAL.—Section 48(a)(3)(A) of the 

22 Internal Revenue Code of 1986 is amended by strik23 ing ‘‘or’’ at the end of clause (vi), by adding ‘‘or’’ 

24 at the end of clause (vii), and by adding at the end 

25 the following new clause: 


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1 ‘‘(viii) equipment which— 

2 ‘‘(I) receives, stores, and delivers 

3 energy using batteries, compressed 

4 air, pumped hydropower, hydrogen 

5 storage (including hydrolysis), thermal 

6 energy storage, regenerative fuel cells, 

7 flywheels, capacitors, superconducting 

8 magnets, or other technologies identi9 fied by the Secretary in consultation 

10 with the Secretary of Energy, 

11 ‘‘(II) has a capacity of not less 

12 than 5 kilowatt hours, and 

13 ‘‘(III) receives an allocation of 

14 national megawatt capacity from the 

15 Secretary under paragraph (8) equal 

16 to the capacity of such equipment.’’. 

17 (2) 30-PERCENT CREDIT.—Section 

18 48(a)(2)(A)(i)(II) of such Code is amended by strik19 ing ‘‘paragraph (3)(A)(i)’’ and inserting ‘‘clause (i) 

20 or (viii) of paragraph (3)(A)’’. 

21 (3) NATIONAL LIMITATION RELATING TO EN22 ERGY STORAGE PROPERTY.—Section 48(a) of such 

23 Code is amended by adding at the end the following 

24 new paragraph: 


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1 ‘‘(8) NATIONAL LIMITATION RELATING TO EN2 ERGY STORAGE PROPERTY.— 

3 ‘‘(A) IN GENERAL.—The aggregate 

4 amount of national megawatt capacity limita5 tion allocated by the Secretary to equipment de6 scribed in paragraph (3)(A)(viii) shall not ex7 ceed 10,000 megawatts. 

8 ‘‘(B) ALLOCATION OF LIMITATION.—The 

9 Secretary shall allocate the national megawatt 

10 capacity limitation in such manner as the Sec11 retary may prescribe, with a focus on diversity 

12 of technological design. 

13 ‘‘(C) REGULATIONS.—Not later than 6 

14 months after the date of the enactment of this 

15 paragraph, the Secretary shall prescribe such 

16 regulations as may be necessary or appropriate 

17 to carry out the purposes of this paragraph. 

18 Such regulations shall provide a process under 

19 which the Secretary, after consultation with the 

20 Secretary of Energy, shall allocate the national 

21 megawatt capacity limitation.’’. 

22 (b) TRANSFER OF ENERGY CREDIT BY CERTAIN

23 PUBLIC ENTITIES.—Section 48 of such Code is amended 

24 by adding at the end the following new subsection: 


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1 ‘‘(f) TRANSFER OF CREDIT BY CERTAIN PUBLIC EN2 TITIES.— 

3 ‘‘(1) IN GENERAL.—If, with respect to a credit 

4 under subsection (a) for any taxable year— 

5 ‘‘(A) a qualified public entity would be the 

6 taxpayer (but for this paragraph), and 

7 ‘‘(B) such entity elects the application of 

8 this paragraph for such taxable year with re9 spect to all (or any portion specified in such 

10 election) of such credit, the eligible project part11 ner specified in such election, and not the quali12 fied public entity, shall be treated as the tax13 payer for purposes of this title with respect to 

14 such credit (or such portion thereof). 

15 ‘‘(2) DEFINITIONS.—For purposes of this sub16 section— 

17 ‘‘(A) QUALIFIED PUBLIC ENTITY.—The 

18 term ‘qualified public entity’ means— 

19 ‘‘(i) a Federal, State, or local govern20 ment entity, or any political subdivision, 

21 agency, or instrumentality thereof, 

22 ‘‘(ii) a mutual or cooperative electric 

23 company described in section 501(c)(12) or 

24 1381(a)(2), or 


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1 ‘‘(iii) a not-for-profit electric utility 

2 which had or has received a loan or loan 

3 guarantee under the Rural Electrification 

4 Act of 1936. 

5 ‘‘(B) ELIGIBLE PROJECT PARTNER.—The 

6 term ‘eligible project partner’ means any person 

7 who— 

8 ‘‘(i) is responsible for, or participates 

9 in, the design or construction of the energy 

10 property to which the credit under sub11 section (a) relates, 

12 ‘‘(ii) is a financial institution pro13 viding financing for the construction or op14 eration of such property, or 

15 ‘‘(iii) has an ownership interest in 

16 such property. 

17 ‘‘(3) SPECIAL RULES.— 

18 ‘‘(A) APPLICATION TO PARTNERSHIPS.—In 

19 the case of a credit under subsection (a) which 

20 is determined at the partnership level— 

21 ‘‘(i) for purposes of paragraph (1)(A), 

22 a qualified public entity shall be treated as 

23 the taxpayer with respect to such entity’s 

24 distributive share of such credit, and 


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•HR 7196 IH

1 ‘‘(ii) the term ‘eligible project partner’ 

2 shall include any partner of the partner3 ship. 

4 ‘‘(B) TAXABLE YEAR IN WHICH CREDIT

5 TAKEN INTO ACCOUNT.—In the case of any 

6 credit (or portion thereof) with respect to which 

7 an election is made under paragraph (1), such 

8 credit shall be taken into account in the first 

9 taxable year of the eligible project partner end10 ing with, or after, the qualified public entity’s 

11 taxable year with respect to which the credit 

12 was determined. 

13 ‘‘(C) TREATMENT OF TRANSFER UNDER

14 PRIVATE USE RULES.—For purposes of section 

15 141(b)(1), any benefit derived by an eligible 

16 project partner in connection with an election 

17 under this subsection shall not be taken into ac18 count as a private business use.’’. 

19 (c) EFFECTIVE DATE.— 

20 (1) IN GENERAL.—Except as otherwise pro21 vided in this subsection, the amendments made by 

22 this section shall apply to periods after the date of 

23 the enactment of this Act, in taxable years ending 

24 after such date, under rules similar to the rules of 

25 section 48(m) of the Internal Revenue Code of 1986 


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•HR 7196 IH

1 (as in effect on the day before the date of the enact2 ment of the Revenue Reconciliation Act of 1990). 

3 (2) TRANSFER OF ENERGY CREDIT BY CERTAIN

4 PUBLIC ENTITIES.—The amendment made by sub5 section (b) shall apply to credits arising in taxable 

6 years ending after the date of the enactment of this 

7 Act. 

Æ 


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