791 
taxable year shall be increased by the 
amount of such excess. 
‘‘(ii) EXCESS CREDIT.—If the credit 
determined under subsection (a) (deter-
mined without regard to this paragraph) 
with respect to any facility for any taxable 
year exceeds the limitation imposed under 
subparagraph (A) with respect to such fa-
cility for such taxable year, the credit de-
termined under subsection (a) with respect 
to such facility for the succeeding taxable 
year (determined before the application of 
subparagraph (A) for such succeeding tax-
able year) shall be increased by the 
amount of such excess. With respect to any 
facility, no amount may carried forward 
under this clause to any taxable year be-
ginning after the 10-year period described 
in subsection (a)(2)(A)(ii) with respect to 
such facility. 
‘‘(C) 
APPLICABLE
PERCENTAGE.—For 
purposes of this paragraph— 
‘‘(i) IN GENERAL.—The term ‘applica-
ble percentage’ means, with respect to any 
facility, the appropriate percentage pre-
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792 
scribed by the Secretary for the month in 
which such facility is originally placed in 
service. 
‘‘(ii) METHOD OF PRESCRIBING PER-
CENTAGES.—The percentages prescribed 
by the Secretary for any month under 
clause (i) shall be percentages which yield 
over a 10-year period amounts of limita-
tion under subparagraph (A) which have a 
present value equal to 35 percent of the el-
igible basis of the facility. 
‘‘(iii) METHOD
OF
DISCOUNTING.— 
The present value under clause (ii) shall be 
determined— 
‘‘(I) as of the last day of the 1st 
year of the 10-year period referred to 
in clause (ii), 
‘‘(II) by using a discount rate 
equal to the average annual interest 
rate of tax-exempt obligations having 
a term of 10 years or more which are 
issued during the month preceding the 
month for which the percentage is 
being prescribed, and 
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793 
‘‘(III) by taking into account the 
limitation under subparagraph (A) for 
any year on the last day of such year. 
‘‘(D) ELIGIBLE
BASIS.—For purposes of 
this paragraph, the term ‘eligible basis’ means, 
with respect to any facility, the basis of such fa-
cility determined as of the time that such facil-
ity is originally placed in service. 
‘‘(E) SPECIAL RULE FOR FIRST AND LAST 
YEAR OF CREDIT PERIOD.—In the case of any 
taxable year any portion of which is not within 
the 10-year period described in subsection 
(a)(2)(A)(ii) with respect to any facility, the 
amount of the limitation under subparagraph 
(A) with respect to such facility shall be re-
duced by an amount which bears the same ratio 
to the amount of such limitation (determined 
without regard to this subparagraph) as such 
portion of the taxable year which is not within 
such period bears to the entire taxable year.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to property originally placed in service 
after December 31, 2008. 
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794 
(2) REPEAL
OF
CREDIT
PHASEOUT.—The 
amendments made by subsection (b)(1) shall apply 
to taxable years ending after December 31, 2008. 
SEC. 10002. PRODUCTION CREDIT FOR ELECTRICITY PRO-
DUCED FROM MARINE RENEWABLES. 
(a) IN GENERAL.—Paragraph (1) of section 45(c) 
(relating to resources) is amended by striking ‘‘and’’ at 
the end of subparagraph (G), by striking the period at 
the end of subparagraph (H) and inserting ‘‘, and’’, and 
by adding at the end the following new subparagraph: 
‘‘(I) marine and hydrokinetic renewable en-
ergy.’’. 
(b) MARINE RENEWABLES.—Subsection (c) of sec-
tion 45 is amended by adding at the end the following 
new paragraph: 
‘‘(10) MARINE
AND
HYDROKINETIC
RENEW-
ABLE ENERGY.— 
‘‘(A) IN GENERAL.—The term ‘marine and 
hydrokinetic renewable energy’ means energy 
derived from— 
‘‘(i) waves, tides, and currents in 
oceans, estuaries, and tidal areas, 
‘‘(ii) free flowing water in rivers, 
lakes, and streams, 
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