uary 1, 1987 (whether or not amended or
restated after that date).
‘‘(B) 
EXCEPTION.—Subparagraph 
(A)
shall not apply if—
‘‘(i) the prices for energy and capacity
from such facility are established pursuant
to an amendment to the contract referred
to in subparagraph (A)(ii);
‘‘(ii) such amendment provides that
the prices set forth in the contract which
exceed avoided cost prices determined at
the time of delivery shall apply only to an-
nual quantities of electricity (prorated for
partial years) which do not exceed the
greater of—
‘‘(I) the average annual quantity
of electricity sold to the utility under
the contract during calendar years
1994, 1995, 1996, 1997, and 1998,
or
‘‘(II) the estimate of the annual
electricity production set forth in the
contract, or, if there is no such esti-
mate, the greatest annual quantity of
electricity sold to the utility under the
contract in any of the calendar years
1996, 1997, or 1998; and
‘‘(iii) such amendment provides that
energy and capacity in excess of the limita-
tion in clause (ii) may be—
‘‘(I) sold to the utility only at
prices that do not exceed avoided cost
prices determined at the time of deliv-
ery, or
‘‘(II) sold to a third party subject
to a mutually agreed upon advance
notice to the utility.
For purposes of this subparagraph, avoid-
ed cost prices shall be determined as pro-
vided for in 18 CFR 292.304(d)(1) or any
successor regulation.’’.
(c) QUALIFIED FACILITIES INCLUDE ALL BIOMASS
FACILITIES.—
(1) IN GENERAL.—Subparagraph (B) of section
45(c)(1) of such Code (defining qualified energy re-
sources) is amended to read as follows:
‘‘(B) biomass.’’.
(2) BIOMASS DEFINED.—Paragraph (2) of sec-
tion 45(c) of such Code (relating to definitions) is
amended to read as follows:
‘‘(2) BIOMASS.—The term ‘biomass’ means—
‘‘(A) any organic material from a plant
which is planted exclusively for purposes of
being used at a qualified facility to produce
electricity, or
‘‘(B) any solid, nonhazardous, cellulosic
waste material which is segregated from other
waste materials and which is derived from—
‘‘(i) any of the following forest-related
resources: mill residues, precommercial
thinnings, slash, and brush, but not includ-
ing old-growth timber,
‘‘(ii) poultry waste,
‘‘(iii) urban sources, including waste
pallets, crates, and dunnage, manufac-
turing and construction wood wastes, and
landscape or right-of-way trimmings, but
not including unsegregated municipal solid
waste (garbage) or paper that is commonly
recycled, or
‘‘(iv) agriculture sources, including or-
chard tree crops, vineyard, grain, legumes,
sugar, and other crop by-products or resi-
dues.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to electricity produced after the
date of the enactment of this Act.
SEC. 902. CERTAIN AMOUNTS RECEIVED BY ELECTRIC EN-
ERGY, GAS, OR STEAM UTILITIES EXCLUDED
FROM GROSS INCOME AS CONTRIBUTIONS TO
CAPITAL.
(a) Subsection (c) of section 118 of the Internal Rev-
enue Code of 1986 (relating to special rules for water and
sewerage disposal utilities) is amended—
(1) in the heading, by striking, ‘‘WATER AND
SEWERAGE DISPOSAL’’ and inserting ‘‘CER-
TAIN’’,
(2) in paragraph (1)—
(A) in the matter preceding paragraph (1),
by striking ‘‘water or’’ and inserting ‘‘electric
energy, gas (through a local distribution system
or transportation by pipeline), steam, water,
or’’ and
(B) in subparagraph (B), by striking
‘‘water or’’ and inserting ‘‘electric energy, gas,
steam, water, or’’,
(3) in paragraph (2)(A)(ii), by striking ‘‘water
or’’ and inserting ‘‘electric energy, gas, steam,
water, or’’, and
(4) in paragraph (3)—
(A) in subparagraph (A), by inserting
‘‘such term shall include amounts paid as cus-
tomer connection fees (including amounts paid
to connect the customer’s line to an electric
line, a gas main, a steam line, or a main water
or sewer line) and’’ after ‘‘except that’’, and
(B) in subparagraph (C), by striking
‘‘water or’’ and inserting ‘‘electric energy, gas,
steam, water, or’’.
(b) The amendments made by subsection (a) shall
apply to amounts received after the date of the enactment
of this Act.
SEC. 903. EXTENSION OF CREDIT FOR ELECTRICITY PRO-
DUCED FROM STEEL COGENERATION.
(a) EXTENSION OF CREDIT FOR COKE PRODUCTION
AND
STEEL
MANUFACTURING
FACILITIES.—Section
45(c)(1) of the Internal Revenue Code of 1986 (defining
qualified energy resources) is amended by striking ‘‘and’’
at the end of the next to last subparagraph, by striking
the period at the end of the last subparagraph and insert-
ing ‘‘, and’’, and by adding at the end the following new
subparagraph:
‘‘(D) steel cogeneration.’’
(b) STEEL COGENERATION.—Section 45(c) of such
Code is amended by adding at the end the following:
‘‘(5) STEEL COGENERATION.—The term ‘steel
cogeneration’ means the production of steam or
other form of thermal energy of at least 20 percent
of total production and the production of electricity
or mechanical energy (or both) of at least 20 percent
of total production (meaning production from all
waste sources in subparagraphs (A), (B), and (C)
from the entire facility that produces coke, iron ore,
iron, or steel), provided that the cogeneration meets
any regulatory energy-efficiency standards estab-
lished by the Secretary, and only to the extent that
such energy is produced from—
‘‘(A) gases or heat generated during the
production of coke,
‘‘(B) blast furnace gases or heat generated
during the production of iron ore or iron, or
‘‘(C) waste gases or heat generated from
the manufacture of steel that uses at least 20
percent recycled material.’’.
(c) MODIFICATION
OF PLACED
IN SERVICE
RULES FOR STEEL COGENERATION FACILITIES.—
Section 45(c)(3) of such Code (defining qualified fa-
cility) is amended by adding at the end the fol-
lowing:
(D) STEEL COGENERATION FACILITIES.—
In the case of a facility using steel cogeneration
to produce electricity, the term ‘qualified facil-
ity’ means any facility permitted to operate
under the environmental requirements of the
Clean Air Act Amendments of 1990 which is
owned by the taxpayer and originally placed in
service after December 31, 1999, and before
January 1, 2005. Such a facility may be treated
as originally placed in service when such facility
was last upgraded to increase efficiency or gen-
eration capability. However, no facility shall be
allowed a credit for more than 10 years of pro-
duction.’’.
(d) CONFORMING AMENDMENTS.—
(1) The heading for section 45 of such Code is
amended by inserting ‘‘and waste energy’’ after ‘‘re-
newable’’.
(2) The item relating to section 45 in the table
of sections subpart D of part IV of subchapter A of
chapter 1 of such Code is amended by inserting
‘‘and waste energy’’ after ‘‘renewable’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall take effect for taxable years beginning
after December 31, 2001, and before January 1, 2005.
SEC. 904. FULL EXPENSING OF HOME HEATING OIL STOR-
AGE FACILITIES.
(a) IN GENERAL.—Section 179(b) of the Internal
Revenue Code of 1986 (relating to limitations) is amended
by adding at the end of the following:
‘‘(5) FULL EXPENSING OF HOME HEATING OIL
STORAGE FACILITIES.—Paragraphs (1) and (2) shall
not apply to section 179 property which is any stor-
age facility (not including a building or its structural
components) used in connection with the distribution
of home heating oil.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to property placed in service in
taxable years beginning after the date of the enactment
of this Act.’’
SEC. 905. RESIDENTIAL SOLAR ENERGY TAX CREDIT.
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to nonrefundable personal credits) is
amended by inserting after section 25A the following new
section:
‘‘SEC. 25B. RESIDENTIAL SOLAR ENERGY PROPERTY.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount
equal to the sum of—
‘‘(1) 15 percent of the qualified photovoltaic
property expenditures made by the taxpayer during
such year, and
‘‘(2) 15 percent of the qualified solar water
heating property expenditures made by the taxpayer
during the taxable year.
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM
CREDIT.—The credit allowed
under subsection (a)(2) shall not exceed $2,000 for
each system of solar energy property.
‘‘(2) TYPE OF PROPERTY.—No expenditure may
be taken into account under this section unless such
expenditure is made by the taxpayer for property in-
stalled on or in connection with a dwelling unit
which is located in the United States and which is
used as a residence.
‘‘(3) SAFETY CERTIFICATIONS.—No credit shall
be allowed under this section for an item of property
unless—
‘‘(A) in the case of solar water heating
equipment, such equipment is certified for per-
formance and safety by the non-profit Solar
Rating Certification Corporation or a com-
parable entity endorsed by the government of
the State in which such property is installed,
and
‘‘(B) in the case of a photovoltaic system,
such system meets appropriate fire and electric
code requirements.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED SOLAR WATER HEATING PROP-
ERTY
EXPENDITURE.—The term ‘qualified solar
water heating property expenditure’ means an ex-
penditure for property that uses solar energy to heat
water for use in a dwelling unit with respect to
which a majority of the energy is derived from the
sun.
‘‘(2) QUALIFIED PHOTOVOLTAIC PROPERTY EX-
PENDITURE.—The term ‘qualified photovoltaic prop-
erty expenditure’ means an expenditure for property
that uses solar energy to generate electricity for use
in a dwelling unit.
‘‘(3) SOLAR PANELS.—No expenditure relating
to a solar panel or other property installed as a roof
(or portion thereof) shall fail to be treated as prop-
erty described in paragraph (1) or (2) solely because
it constitutes a structural component of the struc-
ture on which it is installed.
‘‘(4) LABOR
COSTS.—Expenditures for labor
costs properly allocable to the onsite preparation, as-
sembly, or original installation of the property de-
scribed in paragraph (1) or (2) and for piping or
wiring to interconnect such property to the dwelling
unit shall be taken into account for purposes of this
section.
‘‘(5) SWIMMING POOLS, ETC., USED AS STOR-
AGE MEDIUM.—Expenditures which are properly al-
locable to a swimming pool, hot tub, or any other
energy storage medium which has a function other
than the function of such storage shall not be taken
into account for purposes of this section.
‘‘(d) SPECIAL
RULES.—For purposes of this
section—
‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OC-
CUPANCY.—In the case of any dwelling unit which is
jointly occupied and used during any calendar year
as a residence by 2 or more individuals the following
shall apply—
‘‘(A) The amount of the credit allowable
under subsection (a) by reason of expenditures
(as the case may be) made during such cal-
endar year by any of such individuals with re-
spect to such dwelling unit shall be determined
by treating all of such individuals as 1 taxpayer
whose taxable year is such calendar year.
‘‘(B) There shall be allowable with respect
to such expenditures to each of such individ-
uals, a credit under subsection (a) for the tax-
able year in which such calendar year ends in
an amount which bears the same ratio to the
amount determined under subparagraph (A) as
the amount of such expenditures made by such
individual during such calendar year bears to
the aggregate of such expenditures made by all
of such individuals during such calendar year.
‘‘(2) TENANT-STOCKHOLDER IN COOPERATIVE
HOUSING CORPORATION.—In the case of an indi-
vidual who is a tenant-stockholder (as defined in sec-
tion 216) in a cooperative housing corporation (as
defined in such section), such individual shall be
treated as having made his tenant-stockholder’s pro-
portionate share (as defined in section 216(b)(3)) of
any expenditures of such corporation.
‘‘(3) CONDOMINIUMS.—
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who is a member of a condominium man-
agement association with respect to a condo-
minium which he owns, such individual shall be
treated as having made his proportionate share
of any expenditures of such association.
‘‘(B) CONDOMINIUM
MANAGEMENT
ASSO-
CIATION.—For purposes of this paragraph, the
term ‘condominium management association’
means an organization which meets the require-
ments of paragraph (1) of section 528(c) (other
than subparagraph (E) thereof) with respect to
a condominium project substantially all of the
units of which are used as residences.
‘‘(4) JOINT OWNERSHIP OF ITEMS OF SOLAR
ENERGY PROPERTY.—
‘‘(A) IN GENERAL.—Any expenditure oth-
erwise qualifying as an expenditure described in
paragraph (1) or (2) of subsection (c) shall not
be treated as failing to so qualify merely be-
cause such expenditure was made with respect
to 2 or more dwelling units.
‘‘(B) LIMITS
APPLIED
SEPARATELY.—In
the case of any expenditure described in sub-
paragraph (A), the amount of the credit allow-
able under subsection (a) shall (subject to para-
graph (1)) be computed separately with respect