I 
110TH CONGRESS 
2D SESSION 
H. R. 7060 
To amend the Internal Revenue Code of 1986 to provide incentives for 
energy production and conservation, to extend certain expiring provisions, 
to provide individual income tax relief, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 25, 2008 
Mr. RANGEL 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 
incentives for energy production and conservation, to ex-
tend certain expiring provisions, to provide individual 
income tax relief, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Renewable Energy and Job Creation Tax Act of 2008’’. 
(b) REFERENCE.—Except as otherwise expressly pro-
vided, whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a 
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section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the In-
ternal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title, etc. 
TITLE I—ENERGY TAX INCENTIVES 
Subtitle A—Energy Production Incentives 
PART 1—RENEWABLE ENERGY INCENTIVES 
Sec. 101. Renewable energy credit. 
Sec. 102. Production credit for electricity produced from marine renewables. 
Sec. 103. Energy credit. 
Sec. 104. Credit for residential energy efficient property. 
Sec. 105. Special rule to implement FERC and State electric restructuring pol-
icy. 
PART 2—CARBON MITIGATION PROVISIONS 
Sec. 111. Expansion and modification of advanced coal project investment cred-
it. 
Sec. 112. Expansion and modification of coal gasification investment credit. 
Sec. 113. Temporary increase in coal excise tax. 
Sec. 114. Special rules for refund of the coal excise tax to certain coal pro-
ducers and exporters. 
Sec. 115. Carbon audit of the tax code. 
Subtitle B—Transportation and Domestic Fuel Security Provisions 
Sec. 121. Inclusion of cellulosic biofuel in bonus depreciation for biomass eth-
anol plant property. 
Sec. 122. Credits for biodiesel and renewable diesel. 
Sec. 123. Clarification that credits for fuel are designed to provide an incentive 
for United States production. 
Sec. 124. Credit for new qualified plug-in electric drive motor vehicles. 
Sec. 125. Exclusion from heavy truck tax for idling reduction units and ad-
vanced insulation. 
Sec. 126. Transportation fringe benefit to bicycle commuters. 
Sec. 127. Alternative fuel vehicle refueling property credit. 
Sec. 128. Certain income and gains relating to alcohol fuels and mixtures, bio-
diesel fuels and mixtures, and alternative fuels and mixtures 
treated as qualifying income for publicly traded partnerships. 
Subtitle C—Energy Conservation and Efficiency Provisions 
Sec. 131. Credit for nonbusiness energy property. 
Sec. 132. Energy efficient commercial buildings deduction. 
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Sec. 133. Modifications of energy efficient appliance credit for appliances pro-
duced after 2007. 
Sec. 134. Accelerated recovery period for depreciation of smart meters and 
smart grid systems. 
Sec. 135. Qualified green building and sustainable design projects. 
TITLE II—EXTENSION OF TEMPORARY PROVISIONS 
Subtitle A—Extensions Primarily Affecting Individuals 
Sec. 201. Deduction for State and local sales taxes. 
Sec. 202. Deduction of qualified tuition and related expenses. 
Sec. 203. Treatment of certain dividends of regulated investment companies. 
Sec. 204. Tax-free distributions from individual retirement plans for charitable 
purposes. 
Sec. 205. Deduction for certain expenses of elementary and secondary school 
teachers. 
Sec. 206. Stock in RIC for purposes of determining estates of nonresidents not 
citizens. 
Sec. 207. Qualified investment entities. 
Sec. 208. Real property tax standard deduction. 
Subtitle B—Extensions Primarily Affecting Businesses 
Sec. 221. Research credit. 
Sec. 222. Indian employment credit. 
Sec. 223. New markets tax credit. 
Sec. 224. Railroad track maintenance. 
Sec. 225. Fifteen-year straight-line cost recovery for qualified leasehold im-
provements and qualified restaurant property. 
Sec. 226. Seven-year cost recovery period for motorsports racing track facility. 
Sec. 227. Accelerated depreciation for business property on Indian reservation. 
Sec. 228. Expensing of environmental remediation costs. 
Sec. 229. Deduction allowable with respect to income attributable to domestic 
production activities in Puerto Rico. 
Sec. 230. Modification of tax treatment of certain payments to controlling ex-
empt organizations. 
Sec. 231. Qualified zone academy bonds. 
Sec. 232. Tax incentives for investment in the District of Columbia. 
Sec. 233. Economic development credit for American Samoa. 
Sec. 234. Enhanced charitable deduction for contributions of food inventory. 
Sec. 235. Enhanced charitable deduction for contributions of book inventory to 
public schools. 
Sec. 236. Enhanced deduction for qualified computer contributions. 
Sec. 237. Basis adjustment to stock of S corporations making charitable con-
tributions of property. 
Sec. 238. Work opportunity tax credit for Hurricane Katrina employees. 
Sec. 239. Subpart F exception for active financing income. 
Sec. 240. Look-thru rule for related controlled foreign corporations. 
Sec. 241. Expensing for certain qualified film and television productions. 
Subtitle C—Other Extensions 
Sec. 251. Authority to disclose information related to terrorist activities made 
permanent. 
Sec. 252. Authority for undercover operations made permanent. 
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Sec. 253. Increase in limit on cover over of rum excise tax to Puerto Rico and 
the Virgin Islands. 
TITLE III—ADDITIONAL TAX RELIEF AND OTHER PROVISIONS 
Sec. 301. Refundable child credit. 
Sec. 302. Provisions related to film and television productions. 
Sec. 303. Exemption from excise tax for certain arrows designed for use by 
children. 
Sec. 304. Modification of penalty on understatement of taxpayer’s liability by 
tax return preparer. 
TITLE IV—REVENUE PROVISIONS 
Sec. 401. Limitation of deduction for income attributable to domestic produc-
tion of oil, gas, or primary products thereof. 
Sec. 402. Elimination of the different treatment of foreign oil and gas extrac-
tion income and foreign oil related income for purposes of the 
foreign tax credit. 
Sec. 403. Broker reporting of customer’s basis in securities transactions. 
Sec. 404. 0.2 percent FUTA surtax. 
Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax. 
Sec. 406. Nonqualified deferred compensation from certain tax indifferent par-
ties. 
Sec. 407. Delay in application of worldwide allocation of interest. 
Sec. 408. Time for payment of corporate estimated taxes. 
TITLE I—ENERGY TAX 
INCENTIVES 
Subtitle A—Energy Production 
Incentives 
PART 1—RENEWABLE ENERGY INCENTIVES 
SEC. 101. RENEWABLE ENERGY CREDIT. 
(a) EXTENSION OF CREDIT.— 
(1) WIND FACILITIES.—Paragraph (1) of sec-
tion 45(d) is amended by striking ‘‘January 1, 
2009’’ and inserting ‘‘January 1, 2010’’. 
(2) OTHER FACILITIES.—Each of the following 
provisions of section 45(d) is amended by striking 
‘‘January 1, 2009’’ and inserting ‘‘October 1, 
2011’’: 
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(A) Clauses (i) and (ii) of paragraph 
(2)(A). 
(B) Clauses (i)(I) and (ii) of paragraph 
(3)(A). 
(C) Paragraph (4). 
(D) Paragraph (5). 
(E) Paragraph (6). 
(F) Paragraph (7). 
(G) Subparagraphs (A) and (B) of para-
graph (9). 
(b) MODIFICATION OF CREDIT PHASEOUT.— 
(1) REPEAL OF PHASEOUT.—Subsection (b) of 
section 45 is amended— 
(A) by striking paragraph (1), and 
(B) by striking ‘‘the 8 cent amount in 
paragraph (1),’’ in paragraph (2) thereof. 
(2) LIMITATION BASED ON INVESTMENT IN FA-
CILITY.—Subsection (b) of section 45 is amended by 
inserting before paragraph (2) the following new 
paragraph: 
‘‘(1) LIMITATION
BASED
ON
INVESTMENT
IN 
FACILITY.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified facility originally placed in service 
after December 31, 2009, the amount of the 
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credit determined under subsection (a) for any 
taxable year with respect to electricity produced 
at such facility shall not exceed the product 
of— 
‘‘(i) the applicable percentage with re-
spect to such facility, multiplied by 
‘‘(ii) the eligible basis of such facility. 
‘‘(B) CARRYFORWARD OF UNUSED LIMITA-
TION AND EXCESS CREDIT.— 
‘‘(i) UNUSED
LIMITATION.—If the 
limitation imposed under subparagraph (A) 
with respect to any facility for any taxable 
year exceeds the prelimitation credit for 
such facility for such taxable year, the lim-
itation imposed under subparagraph (A) 
with respect to such facility for the suc-
ceeding taxable year shall be increased by 
the amount of such excess. 
‘‘(ii) 
EXCESS
CREDIT.—If 
the 
prelimitation credit with respect to any fa-
cility for any taxable year exceeds the limi-
tation imposed under subparagraph (A) 
with respect to such facility for such tax-
able year, the credit determined under sub-
section (a) with respect to such facility for 
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the succeeding taxable year (determined 
before the application of subparagraph (A) 
for such succeeding taxable year) shall be 
increased by the amount of such excess. 
With respect to any facility, no amount 
may be carried forward under this clause 
to any taxable year beginning after the 10- 
year 
period 
described 
in 
subsection 
(a)(2)(A)(ii) with respect to such facility. 
‘‘(iii) PRELIMITATION
CREDIT.—The 
term ‘prelimitation credit’ with respect to 
any facility for a taxable year means the 
credit determined under subsection (a) 
with respect to such facility for such tax-
able year, determined without regard to 
subparagraph (A) and after taking into ac-
count any increase for such taxable year 
under clause (ii). 
‘‘(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-
scribed by the Secretary for the month in 
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which such facility is originally placed in 
service. 
‘‘(ii) METHOD
OF
PRESCRIBING
AP-
PLICABLE
PERCENTAGE.—The applicable 
percentage prescribed by the Secretary for 
any month under clause (i) shall be the 
percentage which yields over a 10-year pe-
riod amounts of limitation under subpara-
graph (A) which have a present value 
equal to 35 percent of the eligible 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 greater of 110 percent of 
the Federal long-term rate as in effect 
under section 1274(d) for the month 
preceding the month for which the ap-
plicable percentage is being pre-
scribed, or 4.5 percent, and 
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‘‘(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— 
‘‘(i) IN GENERAL.—The term ‘eligible 
basis’ means, with respect to any facility, 
the sum of— 
‘‘(I) the basis of such facility de-
termined as of the time that such fa-
cility is originally placed in service, 
and 
‘‘(II) the portion of the basis of 
any shared qualified property which is 
properly allocable to such facility 
under clause (ii). 
‘‘(ii) RULES FOR ALLOCATION.—For 
purposes of subclause (II) of clause (i), the 
basis of shared qualified property shall be 
allocated among all qualified facilities 
which are projected to be placed in service 
and which require utilization of such prop-
erty in proportion to projected generation 
from such facilities. 
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‘‘(iii) 
SHARED
QUALIFIED
PROP-
ERTY.—For purposes of this paragraph, 
the term ‘shared qualified property’ means, 
with respect to any facility, any property 
described in section 168(e)(3)(B)(vi)— 
‘‘(I) which a qualified facility will 
require for utilization of such facility, 
and 
‘‘(II) which is not a qualified fa-
cility. 
‘‘(iv) SPECIAL
RULE
RELATING
TO 
GEOTHERMAL FACILITIES.—In the case of 
any qualified facility using geothermal en-
ergy to produce electricity, the basis of 
such facility for purposes of this paragraph 
shall be determined as though intangible 
drilling and development costs described in 
section 263(c) were capitalized rather than 
expensed. 
‘‘(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 
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(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. 
‘‘(F) ELECTION TO TREAT ALL FACILITIES 
PLACED IN SERVICE IN A YEAR AS 1 FACIL-
ITY.—At the election of the taxpayer, all quali-
fied facilities which are part of the same project 
and which are originally placed in service dur-
ing the same calendar year shall be treated for 
purposes of this section as 1 facility which is 
originally placed in service at the mid-point of 
such year or the first day of the following cal-
endar year.’’. 
(c) TRASH FACILITY CLARIFICATION.—Paragraph 
(7) of section 45(d) is amended— 
(1) by striking ‘‘facility which burns’’ and in-
serting ‘‘facility (other than a facility described in 
paragraph (6)) which uses’’, and 
(2) by striking ‘‘COMBUSTION’’. 
(d) EXPANSION OF BIOMASS FACILITIES.— 
(1) OPEN-LOOP
BIOMASS
FACILITIES.—Para-
graph (3) of section 45(d) is amended by redesig-
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nating subparagraph (B) as subparagraph (C) and 
by inserting after subparagraph (A) the following 
new subparagraph: 
‘‘(B) EXPANSION
OF
FACILITY.—Such 
term shall include a new unit placed in service 
after the date of the enactment of this subpara-
graph in connection with a facility described in 
subparagraph (A), but only to the extent of the 
increased amount of electricity produced at the 
facility by reason of such new unit.’’. 
(2) CLOSED-LOOP BIOMASS FACILITIES.—Para-
graph (2) of section 45(d) is amended by redesig-
nating subparagraph (B) as subparagraph (C) and 
inserting after subparagraph (A) the following new 
subparagraph: 
‘‘(B) EXPANSION
OF
FACILITY.—Such 
term shall include a new unit placed in service 
after the date of the enactment of this subpara-
graph in connection with a facility described in 
subparagraph (A)(i), but only to the extent of 
the increased amount of electricity produced at 
the facility by reason of such new unit.’’. 
(e) MODIFICATION
OF RULES
FOR HYDROPOWER 
PRODUCTION.—Subparagraph (C) of section 45(c)(8) is 
amended to read as follows: 
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‘‘(C) NONHYDROELECTRIC DAM.—For pur-
poses of subparagraph (A), a facility is de-
scribed in this subparagraph if— 
‘‘(i) the hydroelectric project installed 
on the nonhydroelectric dam is licensed by 
the Federal Energy Regulatory Commis-
sion and meets all other applicable environ-
mental, licensing, and regulatory require-
ments, 
‘‘(ii) the nonhydroelectric dam was 
placed in service before the date of the en-
actment of this paragraph and operated 
for flood control, navigation, or water sup-
ply purposes and did not produce hydro-
electric power on the date of the enactment 
of this paragraph, and 
‘‘(iii) the hydroelectric project is oper-
ated so that the water surface elevation at 
any given location and time that would 
have occurred in the absence of the hydro-
electric project is maintained, subject to 
any license requirements imposed under 
applicable law that change the water sur-
face elevation for the purpose of improving 
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environmental quality of the affected wa-
terway. 
The Secretary, in consultation with the Federal 
Energy Regulatory Commission, shall certify if 
a hydroelectric project licensed at a nonhydro-
electric dam meets the criteria in clause (iii). 
Nothing in this section shall affect the stand-
ards under which the Federal Energy Regu-
latory Commission issues licenses for and regu-
lates hydropower projects under part I of the 
Federal Power Act.’’. 
(f) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, 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. 
(3) LIMITATION BASED ON INVESTMENT IN FA-
CILITY.—The amendment made by subsection (b)(2) 
shall apply to property originally placed in service 
after December 31, 2009. 
(4) TRASH
FACILITY
CLARIFICATION.—The 
amendments made by subsection (c) shall apply to 
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electricity produced and sold after the date of the 
enactment of this Act. 
(5) EXPANSION OF BIOMASS FACILITIES.—The 
amendments made by subsection (d) shall apply to 
property placed in service after the date of the en-
actment of this Act. 
SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRO-
DUCED FROM MARINE RENEWABLES. 
(a) IN GENERAL.—Paragraph (1) of section 45(c) 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, 
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‘‘(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 
purposes, or 
‘‘(iv) differentials in ocean tempera-
ture (ocean thermal energy conversion). 
‘‘(B) EXCEPTIONS.—Such term shall not 
include any energy which is derived from any 
source which utilizes a dam, diversionary struc-
ture (except as provided in subparagraph 
(A)(iii)), or impoundment for electric power 
production purposes.’’. 
(c) DEFINITION
OF FACILITY.—Subsection (d) of 
section 45 is amended by adding at the end the following 
new paragraph: 
‘‘(11) MARINE
AND
HYDROKINETIC
RENEW-
ABLE ENERGY FACILITIES.—In the case of a facility 
producing electricity from marine and hydrokinetic 
renewable energy, the term ‘qualified facility’ means 
any facility owned by the taxpayer— 
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‘‘(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 October 1, 2011.’’. 
(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 
section 101, is amended by striking ‘‘October 1, 2011’’ 
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 the date of the enactment of this Act, in taxable 
years ending after such date. 
SEC. 103. ENERGY CREDIT. 
(a) EXTENSION OF CREDIT.— 
(1) SOLAR
ENERGY
PROPERTY.—Paragraphs 
(2)(A)(i)(II) and (3)(A)(ii) of section 48(a) are each 
amended by striking ‘‘January 1, 2009’’ and insert-
ing ‘‘January 1, 2017’’. 
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(2) FUEL CELL PROPERTY.—Subparagraph (E) 
of section 48(c)(1) is amended by striking ‘‘Decem-
ber 31, 2008’’ and inserting ‘‘December 31, 2016’’. 
(3) MICROTURBINE PROPERTY.—Subparagraph 
(E) of section 48(c)(2) is amended by striking ‘‘De-
cember 31, 2008’’ and inserting ‘‘December 31, 
2016’’. 
(b) ALLOWANCE OF ENERGY CREDIT AGAINST AL-
TERNATIVE MINIMUM TAX.— 
(1) IN GENERAL.—Subparagraph (B) of section 
38(c)(4) is amended by redesignating clause (vi) as 
clause (vii), by striking ‘‘and’’ at the end of clause 
(v), and by inserting after clause (v) the following 
new clause: 
‘‘(vi) the credit determined under sec-
tion 46 to the extent that such credit is at-
tributable to the energy credit determined 
under section 48, and’’. 
(2) TECHNICAL
AMENDMENT.—Clause (v) of 
section 38(c)(4)(B) is amended by striking ‘‘section 
47 to the extent attributable to’’ and inserting ‘‘sec-
tion 46 to the extent that such credit is attributable 
to the rehabilitation credit under section 47, but 
only with respect to’’. 
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(c) ENERGY CREDIT
FOR COMBINED HEAT
AND 
POWER SYSTEM PROPERTY.— 
(1) IN
GENERAL.—Section 48(a)(3)(A) is 
amended by striking ‘‘or’’ at the end of clause (iii), 
by inserting ‘‘or’’ at the end of clause (iv), and by 
adding at the end the following new clause: 
‘‘(v) combined heat and power system 
property,’’. 
(2) COMBINED
HEAT
AND
POWER
SYSTEM 
PROPERTY.—Subsection (c) of section 48 is amend-
ed— 
(A) by striking ‘‘QUALIFIED FUEL CELL 
PROPERTY; QUALIFIED MICROTURBINE PROP-
ERTY’’ in the heading and inserting ‘‘DEFINI-
TIONS’’, and 
(B) by adding at the end the following new 
paragraph: 
‘‘(3) COMBINED
HEAT
AND
POWER
SYSTEM 
PROPERTY.— 
‘‘(A) COMBINED HEAT AND POWER SYS-
TEM PROPERTY.—The term ‘combined heat and 
power system property’ means property com-
prising a system— 
‘‘(i) which uses the same energy 
source for the simultaneous or sequential 
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generation of electrical power, mechanical 
shaft power, or both, in combination with 
the generation of steam or other forms of 
useful thermal energy (including heating 
and cooling applications), 
‘‘(ii) which produces— 
‘‘(I) at least 20 percent of its 
total useful energy in the form of 
thermal energy which is not used to 
produce electrical or mechanical power 
(or combination thereof), and 
‘‘(II) at least 20 percent of its 
total useful energy in the form of elec-
trical or mechanical power (or com-
bination thereof), 
‘‘(iii) the energy efficiency percentage 
of which exceeds 60 percent, and 
‘‘(iv) which is placed in service before 
January 1, 2017. 
‘‘(B) LIMITATION.— 
‘‘(i) IN
GENERAL.—In the case of 
combined heat and power system property 
with an electrical capacity in excess of the 
applicable capacity placed in service during 
the taxable year, the credit under sub-
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section (a)(1) (determined without regard 
to this paragraph) for such year shall be 
equal to the amount which bears the same 
ratio to such credit as the applicable ca-
pacity bears to the capacity of such prop-
erty. 
‘‘(ii) 
APPLICABLE
CAPACITY.—For 
purposes of clause (i), the term ‘applicable 
capacity’ means 15 megawatts or a me-
chanical energy capacity of more than 
20,000 horsepower or an equivalent com-
bination of electrical and mechanical en-
ergy capacities. 
‘‘(iii) MAXIMUM CAPACITY.—The term 
‘combined heat and power system property’ 
shall not include any property comprising a 
system if such system has a capacity in ex-
cess of 50 megawatts or a mechanical en-
ergy capacity in excess of 67,000 horse-
power or an equivalent combination of elec-
trical and mechanical energy capacities. 
‘‘(C) SPECIAL RULES.— 
‘‘(i) ENERGY
EFFICIENCY
PERCENT-
AGE.—For purposes of this paragraph, the 
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energy efficiency percentage of a system is 
the fraction— 
‘‘(I) the numerator of which is 
the total useful electrical, thermal, 
and mechanical power produced by 
the system at normal operating rates, 
and expected to be consumed in its 
normal application, and 
‘‘(II) the denominator of which is 
the lower heating value of the fuel 
sources for the system. 
‘‘(ii) DETERMINATIONS MADE ON BTU 
BASIS.—The energy efficiency percentage 
and the percentages under subparagraph 
(A)(ii) shall be determined on a Btu basis. 
‘‘(iii) INPUT AND OUTPUT PROPERTY 
NOT INCLUDED.—The term ‘combined heat 
and power system property’ does not in-
clude property used to transport the en-
ergy source to the facility or to distribute 
energy produced by the facility. 
‘‘(D) SYSTEMS USING BIOMASS.—If a sys-
tem is designed to use biomass (within the 
meaning of paragraphs (2) and (3) of section 
45(c) without regard to the last sentence of 
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paragraph (3)(A)) for at least 90 percent of the 
energy source— 
‘‘(i) subparagraph (A)(iii) shall not 
apply, but 
‘‘(ii) the amount of credit determined 
under subsection (a) with respect to such 
system shall not exceed the amount which 
bears the same ratio to such amount of 
credit (determined without regard to this 
subparagraph) as the energy efficiency per-
centage of such system bears to 60 per-
cent.’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
48(a)(1) is amended by striking ‘‘paragraphs (1)(B) 
and (2)(B)’’ and inserting ‘‘paragraphs (1)(B), 
(2)(B), and (3)(B)’’. 
(d) INCREASE OF CREDIT LIMITATION FOR FUEL 
CELL PROPERTY.—Subparagraph (B) of section 48(c)(1) 
is amended by striking ‘‘$500’’ and inserting ‘‘$1,500’’. 
(e) PUBLIC UTILITY PROPERTY TAKEN INTO AC-
COUNT.— 
(1) IN
GENERAL.—Paragraph (3) of section 
48(a) is amended by striking the second sentence 
thereof. 
(2) CONFORMING AMENDMENTS.— 
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(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). 
(f) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall take effect on the date of the en-
actment of this Act. 
(2) ALLOWANCE AGAINST ALTERNATIVE MIN-
IMUM TAX.—The amendments made by subsection 
(b) shall apply to credits determined under section 
46 of the Internal Revenue Code of 1986 in taxable 
years beginning after the date of the enactment of 
this Act and to carrybacks of such credits. 
(3) COMBINED HEAT AND POWER AND FUEL 
CELL PROPERTY.—The amendments made by sub-
sections (c) and (d) shall apply to periods after the 
date of the enactment of this Act, in taxable years 
ending after such date, under rules similar to the 
rules of section 48(m) of the Internal Revenue Code 
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of 1986 (as in effect on the day before the date of 
the enactment of the Revenue Reconciliation Act of 
1990). 
(4) PUBLIC UTILITY PROPERTY.—The amend-
ments made by subsection (e) shall apply to periods 
after February 13, 2008, in taxable years ending 
after such date, under rules similar to the rules of 
section 48(m) of the Internal Revenue Code of 1986 
(as in effect on the day before the date of the enact-
ment of the Revenue Reconciliation Act of 1990). 
SEC. 104. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT 
PROPERTY. 
(a) EXTENSION.—Section 25D(g) is amended by 
striking ‘‘December 31, 2008’’ and inserting ‘‘December 
31, 2016’’. 
(b) REMOVAL OF LIMITATION FOR SOLAR ELECTRIC 
PROPERTY.— 
(1) 
IN
GENERAL.—Section 
25D(b)(1), 
as 
amended by subsections (c) and (d), is amended— 
(A) by striking subparagraph (A), and 
(B) by redesignating subparagraphs (B) 
through (E) as subparagraphs (A) through and 
(D), respectively. 
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(2) 
CONFORMING
AMENDMENT.—Section 
25D(e)(4)(A), as amended by subsections (c) and 
(d), is amended— 
(A) by striking clause (i), and 
(B) by redesignating clauses (ii) through 
(v) as clauses (i) and (iv), respectively. 
(c) CREDIT FOR RESIDENTIAL WIND PROPERTY.— 
(1) IN GENERAL.—Section 25D(a) is amended 
by striking ‘‘and’’ at the end of paragraph (2), by 
striking the period at the end of paragraph (3) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(4) 30 percent of the qualified small wind en-
ergy property expenditures made by the taxpayer 
during such year.’’. 
(2) LIMITATION.—Section 25D(b)(1) is amend-
ed by striking ‘‘and’’ at the end of subparagraph 
(B), by striking the period at the end of subpara-
graph (C) and inserting ‘‘, and’’, and by adding at 
the end the following new subparagraph: 
‘‘(D) $500 with respect to each half kilo-
watt of capacity (not to exceed $4,000) of wind 
turbines for which qualified small wind energy 
property expenditures are made.’’. 
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