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of clause (ii), and by inserting after clause (ii) the following
new clause:
‘‘(iii) qualified fuel cell property or
qualified microturbine property,’’.
(b) QUALIFIED FUEL CELL PROPERTY; QUALIFIED
MICROTURBINE PROPERTY.—Subsection (a) of section 48
is amended by redesignating paragraphs (4) and (5) as
paragraphs (5) and (6), respectively, and by inserting after
paragraph (3) the following new paragraph:
‘‘(4) QUALIFIED FUEL CELL PROPERTY; QUALI-
FIED
MICROTURBINE
PROPERTY.—For purposes of
this subsection—
‘‘(A) QUALIFIED FUEL CELL PROPERTY.—
‘‘(i) IN GENERAL.—The term ‘qualified
fuel cell property’ means a fuel cell power
plant that—
‘‘(I) generates at least 0.5 kilowatt
of electricity using an electrochemical
process, and
‘‘(II) has an electricity-only gen-
eration efficiency greater than 30 per-
cent.
‘‘(ii) LIMITATION.—In the case of
qualified fuel cell property placed in service
during the taxable year, the credit deter-
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mined under paragraph (1) for such year
with respect to such property shall not ex-
ceed an amount equal to the lesser of—
‘‘(I) 30 percent of the basis of such
property, or
‘‘(II) $500 for each 0.5 kilowatt of
capacity of such property.
‘‘(iii) FUEL CELL POWER PLANT.—The
term ‘fuel cell power plant’ means an inte-
grated system comprised of a fuel cell stack
assembly and associated balance of plant
components that converts a fuel into elec-
tricity using electrochemical means.
‘‘(iv) TERMINATION.—Such term shall
not include any property placed in service
after December 31, 2007.
‘‘(B) 
QUALIFIED
MICROTURBINE
PROP-
ERTY.—
‘‘(i) IN GENERAL.—The term ‘‘quali-
fied microturbine property’ means a sta-
tionary microturbine power plant which
has an electricity-only generation efficiency
not less than 26 percent at International
Standard Organization conditions.
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‘‘(ii) LIMITATION.—In the case of
qualified microturbine property placed in
service during the taxable year, the credit
determined under paragraph (1) for such
year with respect to such property shall not
exceed an amount equal to the lesser of—
‘‘(I) 10 percent of the basis of such
property, or
‘‘(II) $200 for each kilowatt of ca-
pacity of such property.
‘‘(iii) 
STATIONARY
MICROTURBINE
POWER
PLANT.—The 
term 
‘stationary
microturbine power plant means a system
comprising of a rotary engine which is ac-
tuated by the aerodynamic reaction or im-
pulse or both on radial or axial curved full-
circumferential-admission airfoils on a cen-
tral axial rotating spindle. Such system—
‘‘(I) commonly includes an air
compressor, combustor, gas pathways
which lead compressed air to the com-
bustor and which lead hot combusted
gases from the combustor to 1 or more
rotating turbine spools, which in turn
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drive the compressor and power output
shaft,
‘‘(II) includes a fuel compressor,
recuperator/regenerator, generator or
alternator, integrated combined cycle
equipment, cooling-heating-and-power
equipment, sound attenuation appa-
ratus, and power conditioning equip-
ment, and
‘‘(III) includes all secondary com-
ponents located between the existing in-
frastructure for fuel delivery and the
existing infrastructure for power dis-
tribution, including equipment and
controls for meeting relevant power
standards, such as voltage, frequency,
and power factors.
‘‘(iv) TERMINATION.—Such term shall
not include any property placed in service
after December 31, 2006.’’.
(c) LIMITATION.—Section 48(a)(2)(A) (relating to en-
ergy percentage) is amended to read as follows:
‘‘(A) IN GENERAL.—The energy percentage
is—
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‘‘(i) in the case of qualified fuel cell
property, 30 percent, and
‘‘(ii) in the case of any other energy
property, 10 percent.’’.
(d) CONFORMING AMENDMENTS.—
(A) Section 29(b)(3)(A)(i)(III) is amended
by striking ‘‘section 48(a)(4)(C)’’ and inserting
‘‘section 48(a)(5)(C)’’.
(B) Section 48(a)(1) is amended by insert-
ing ‘‘except as provided in subparagraph (A)(ii)
or (B)(ii) of paragraph (4),’’ before ‘‘the energy’’.
(e) EFFECTIVE DATE.—The amendments made by this
subsection shall apply to property placed in service after
December 31, 2002, under rules similar to the rules of sec-
tion 48(m) of the Internal Revenue Code of 1986 (as in
effect on the day before the date of the enactment of the Rev-
enue Reconciliation Act of 1990).
SEC. 2105. ENERGY EFFICIENT COMMERCIAL BUILDINGS
DEDUCTION.
(a) IN GENERAL.—Part VI of subchapter B of chapter
1 is amended by inserting after section 179A the following
new section:
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‘‘SEC. 179B. ENERGY EFFICIENT COMMERCIAL BUILDINGS
DEDUCTION.
‘‘(a) IN GENERAL.—There shall be allowed as a deduc-
tion for the taxable year an amount equal to the energy
efficient commercial building property expenditures made
by a taxpayer for the taxable year.
‘‘(b) MAXIMUM AMOUNT OF DEDUCTION.—The amount
of energy efficient commercial building property expendi-
tures taken into account under subsection (a) shall not ex-
ceed an amount equal to the product of—
‘‘(1) $2.25, and
‘‘(2) the square footage of the building with re-
spect to which the expenditures are made.
‘‘(c) YEAR DEDUCTION ALLOWED.—The deduction
under subsection (a) shall be allowed in the taxable year
in which the construction of the building is completed.
‘‘(d) ENERGY
EFFICIENT
COMMERCIAL
BUILDING
PROPERTY EXPENDITURES.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘energy efficient
commercial building property expenditures’ means an
amount paid or incurred for energy efficient commer-
cial building property installed on or in connection
with new construction or reconstruction of property—
‘‘(A) for which depreciation is allowable
under section 167,