value equal to 35 percent of the eligible 
basis of the facility. 
‘‘(iii) METHOD OF DISCOUNTING.—The 
present value under clause (ii) shall be de-
termined— 
‘‘(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 
‘‘(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 facility 
is originally placed in service. 
‘‘(E) SPECIAL RULE FOR FIRST AND LAST 
YEAR OF CREDIT PERIOD.—In the case of any 
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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 reduced 
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. 
(2) 
REPEAL
OF
CREDIT
PHASEOUT.—The 
amendments made by subsection (b)(1) shall apply to 
taxable years ending after December 31, 2008. 
SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRO-
DUCED FROM MARINE RENEWABLES. 
(a) IN GENERAL.—Paragraph (1) of section 45(c) (re-
lating 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: 
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‘‘(I) marine and hydrokinetic renewable en-
ergy.’’. 
(b) MARINE RENEWABLES.—Subsection (c) of section 
45 is amended by adding at the end the following new para-
graph: 
‘‘(10) MARINE AND HYDROKINETIC RENEWABLE 
ENERGY.— 
‘‘(A) IN GENERAL.—The term ‘marine and 
hydrokinetic renewable energy’ means energy de-
rived from— 
‘‘(i) waves, tides, and currents in 
oceans, estuaries, and tidal areas, 
‘‘(ii) free flowing water in rivers, lakes, 
and streams, 
‘‘(iii) free flowing water in an irriga-
tion system, canal, or other man-made 
channel, including projects that utilize non-
mechanical structures to accelerate the flow 
of water for electric power production pur-
poses, or 
‘‘(iv) differentials in ocean temperature 
(ocean thermal energy conversion). 
‘‘(B) EXCEPTIONS.—Such term shall not in-
clude any energy which is derived from any 
source which utilizes a dam, diversionary struc-
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ture (except as provided in subparagraph 
(A)(iii)), or impoundment for electric power pro-
duction purposes.’’. 
(c) DEFINITION OF FACILITY.—Subsection (d) of sec-
tion 45 is amended by adding at the end the following new 
paragraph: 
‘‘(11) MARINE AND HYDROKINETIC RENEWABLE 
ENERGY FACILITIES.—In the case of a facility pro-
ducing electricity from marine and hydrokinetic re-
newable energy, the term ‘qualified facility’ means 
any facility owned by the taxpayer— 
‘‘(A) which has a nameplate capacity rat-
ing of at least 150 kilowatts, and 
‘‘(B) which is originally placed in service 
on or after the date of the enactment of this 
paragraph and before January 1, 2013.’’. 
(d) CREDIT RATE.—Subparagraph (A) of section 
45(b)(4) is amended by striking ‘‘or (9)’’ and inserting ‘‘(9), 
or (11)’’. 
(e) 
COORDINATION
WITH
SMALL
IRRIGATION 
POWER.—Paragraph (5) of section 45(d), as amended by 
this Act, is amended by striking ‘‘January 1, 2013’’ and 
inserting ‘‘the date of the enactment of paragraph (11)’’. 
(f) EFFECTIVE DATE.—The amendments made by this 
section shall apply to electricity produced and sold after 
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the date of the enactment of this Act, in taxable years end-
ing after such date. 
SEC. 103. EXTENSION AND MODIFICATION OF ENERGY 
CREDIT. 
(a) EXTENSION OF CREDIT.— 
(1) SOLAR
ENERGY
PROPERTY.—Paragraphs 
(2)(A)(i)(II) and (3)(A)(ii) of section 48(a) (relating 
to energy credit) are each amended by striking ‘‘Jan-
uary 1, 2009’’ and inserting ‘‘January 1, 2017’’. 
(2) FUEL CELL PROPERTY.—Subparagraph (E) 
of section 48(c)(1) (relating to qualified fuel cell prop-
erty) is amended by striking ‘‘December 31, 2008’’ 
and inserting ‘‘December 31, 2016’’. 
(b) ALLOWANCE OF ENERGY CREDIT AGAINST ALTER-
NATIVE MINIMUM TAX.—Subparagraph (B) of section 
38(c)(4) (relating to specified credits) is amended by strik-
ing ‘‘and’’ at the end of clause (iii), by striking the period 
at the end of clause (iv) and inserting ‘‘, and’’, and by add-
ing at the end the following new clause: 
‘‘(v) the credit determined under sec-
tion 46 to the extent that such credit is at-
tributable to the energy credit determined 
under section 48.’’. 
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(c) INCREASE OF CREDIT LIMITATION FOR FUEL CELL 
PROPERTY.—Subparagraph (B) of section 48(c)(1) is 
amended by striking ‘‘$500’’ and inserting ‘‘$1,500’’. 
(d) PUBLIC ELECTRIC UTILITY PROPERTY TAKEN 
INTO ACCOUNT.— 
(1) IN
GENERAL.—Paragraph (3) of section 
48(a) is amended by striking the second sentence 
thereof. 
(2) CONFORMING AMENDMENTS.— 
(A) Paragraph (1) of section 48(c) is 
amended by striking subparagraph (D) and re-
designating subparagraph (E) as subparagraph 
(D). 
(B) Paragraph (2) of section 48(c) is 
amended by striking subparagraph (D) and re-
designating subparagraph (E) as subparagraph 
(D). 
(e) CLERICAL AMENDMENTS.—Paragraphs (1)(B) and 
(2)(B) of section 48(c) are each amended by striking ‘‘para-
graph (1)’’ and inserting ‘‘subsection (a)’’. 
(f) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
tion shall take effect on the date of the enactment of 
this Act. 
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