‘‘(i) any area throughout which such 
utility provided at all times during the 
testing 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 
located if such area is not also served by 
another utility providing natural gas or 
electricity 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 
section 141(c) (providing exceptions to the private loan fi-
nancing test) is amended by striking ‘‘or’’ at the end of 
subparagraph (A), by striking the period at the end of 
subparagraph (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 
amended by adding at the end the following new para-
graph: 
‘‘(7) EXCEPTION
FOR
QUALIFIED
ELECTRIC 
AND NATURAL GAS SUPPLY CONTRACTS.—The term 
‘nongovernmental output property’ shall not include 
any contract for the prepayment of electricity or nat-
ural gas which is not investment property under sec-
tion 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 
taxpayer or 1 or more related persons engages in the 
refining 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 pur-
poses of this paragraph, the average daily refinery 
runs for any taxable year shall be determined by di-
viding 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 sub-
chapter A of chapter 1 (relating to nonrefundable personal 
credits) is amended by inserting after section 25B the fol-
lowing new section: 
‘‘SEC. 25C. RESIDENTIAL ENERGY EFFICIENT 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 solar water 
heating property expenditures made by the taxpayer 
during 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 prop-
erty 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 determining the amount of the credit allowed 
to a taxpayer with respect to any dwelling unit 
under this section, the dollar amounts under 
clauses (i) and (ii) of subparagraph (A) with re-
spect to each type of property described in such 
clauses shall be reduced by the credit allowed to
the taxpayer under this section with respect to 
such type of property for all preceding taxable 
years with respect to such dwelling unit. 
‘‘(2) PROPERTY STANDARDS.—No credit shall 
be allowed under this section for an item of property 
unless—
‘‘(A) the original use of such property com-
mences with the taxpayer, 
‘‘(B) such property can be reasonably ex-
pected to remain in use for at least 5 years, 
‘‘(C) such property is installed on or in 
connection with a dwelling unit located in the 
United States and used as a residence by the 
taxpayer, 
‘‘(D) in the case of solar water heating 
property, such property is certified for perform-
ance by the non-profit Solar Rating and Certifi-
cation Corporation or a comparable entity en-
dorsed by the government of the State in which 
such property is installed, and 
‘‘(E) in the case of fuel cell property, such 
property meets the performance and quality 
standards (if any) which have been prescribed 
by the Secretary by regulations (after consulta-
tion with the Secretary of Energy).