‘‘(ii) the amount of natural gas used to 
transport such natural gas to the utility. 
‘‘(H) TESTING
PERIOD.—For purposes of 
this paragraph, the term ‘testing period’ means, 
with respect to an issue, the most recent 5 cal-
endar years ending before the date of issuance of 
the issue. 
‘‘(I) SERVICE AREA.—For purposes of this 
paragraph, the service area of a utility owned by 
a governmental unit shall be comprised of—
‘‘(i) any area throughout which such 
utility provided at all times during the test-
ing period—
‘‘(I) in the case of a natural gas 
utility, natural gas transmission or 
distribution services, and 
‘‘(II) in the case of an electric 
utility, electricity distribution services, 
‘‘(ii) any area within a county contig-
uous to the area described in clause (i) in 
which retail customers of such utility are lo-
cated if such area is not also served by an-
other utility providing natural gas or elec-
tricity services, as the case may be, and
‘‘(iii) any area recognized as the serv-
ice area of such utility under State or Fed-
eral law.’’. 
(b) PRIVATE LOAN FINANCING TEST NOT TO APPLY TO 
PREPAYMENTS FOR NATURAL GAS.—Paragraph (2) of sec-
tion 141(c) (providing exceptions to the private loan financ-
ing test) is amended by striking ‘‘or’’ at the end of subpara-
graph (A), by striking the period at the end of subpara-
graph (B) and inserting ‘‘, or’’, and by adding at the end 
the following new subparagraph: 
‘‘(C) is a qualified natural gas supply con-
tract (as defined in section 148(b)(4)).’’. 
(c) EXCEPTION FOR QUALIFIED ELECTRIC AND NAT-
URAL GAS SUPPLY CONTRACTS.—Section 141(d) is amend-
ed by adding at the end the following new paragraph: 
‘‘(7) EXCEPTION FOR QUALIFIED ELECTRIC AND 
NATURAL GAS SUPPLY CONTRACTS.—The term ‘non-
governmental output property’ shall not include any 
contract for the prepayment of electricity or natural 
gas which is not investment property under section 
148(b)(2).’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to obligations issued after the date of 
the enactment of this Act.
SEC. 108. DETERMINATION OF SMALL REFINER EXCEPTION 
TO OIL DEPLETION DEDUCTION. 
(a) IN GENERAL.—Paragraph (4) of section 613A(d) 
(relating to limitations on application of subsection (c)) is 
amended to read as follows: 
‘‘(4) CERTAIN REFINERS EXCLUDED.—If the tax-
payer or 1 or more related persons engages in the re-
fining of crude oil, subsection (c) shall not apply to 
the taxpayer for a taxable year if the average daily 
refinery runs of the taxpayer and such persons for the 
taxable year exceed 75,000 barrels. For purposes of 
this paragraph, the average daily refinery runs for 
any taxable year shall be determined by dividing the 
aggregate refinery runs for the taxable year by the 
number of days in the taxable year.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years ending after the date 
of the enactment of this Act. 
TITLE II—MISCELLANEOUS 
ENERGY TAX INCENTIVES 
SEC. 201. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT 
PROPERTY. 
(a) IN GENERAL.—Subpart A of part IV of subchapter 
A of chapter 1 (relating to nonrefundable personal credits) 
is amended by inserting after section 25B the following new 
section:
‘‘SEC. 25C. RESIDENTIAL ENERGY EFFICIENT PROPERTY. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an indi-
vidual, 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 solar water heat-
ing property expenditures made by the taxpayer dur-
ing such year, 
‘‘(2) 15 percent of the qualified photovoltaic 
property expenditures made by the taxpayer during 
such year, and 
‘‘(3) 15 percent of the qualified fuel cell property 
expenditures made by the taxpayer during such year. 
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM CREDIT.—
‘‘(A) IN
GENERAL.—The credit allowed 
under subsection (a) shall not exceed—
‘‘(i) $2,000 for solar water heating 
property described in subsection (c)(1), 
‘‘(ii) $2,000 for photovoltaic property 
described in subsection (c)(2), and 
‘‘(iii) $500 for each 0.5 kilowatt of ca-
pacity of property described in subsection 
(c)(3). 
‘‘(B) PRIOR EXPENDITURES BY TAXPAYER 
ON SAME RESIDENCE TAKEN INTO ACCOUNT.—In