(2) QUALIFIED FACILITY.—Section 45(d)(2) of 
such Code is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) GREENHOUSE
GAS
EMISSIONS.—In 
the case of a facility placed in service after De-
cember 31, 2015, such term shall not include 
any facility unless, with respect to the facility, 
the taxpayer annually during the 10-year period 
described in subsection (a) demonstrates to the 
satisfaction of the Secretary that such facility’s 
use of closed-loop biomass will result in a 50- 
percent reduction in greenhouse gas emissions 
compared to a similar facility using natural gas 
combined-cycle generation.’’. 
(c) MODIFICATION OF OPEN-LOOP BIOMASS DEFINI-
TION.—The second sentence of section 45(c)(3)(A) of such 
Code is amended— 
(1) by striking ‘‘or biomass’’ and inserting ‘‘, 
biomass’’, and 
(2) by inserting before the period at the end the 
following: ‘‘, any biomass which is primarily a food 
crop, or biomass derived from any crop that dis-
places any forest existing on the date of the enact-
ment of the Clean Energy Victory Bond Act of 
2015’’. 
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(d) MODIFICATION OF BIOFUEL AS QUALIFIED EN-
ERGY RESOURCE.— 
(1) IN
GENERAL.—Section 45(c)(1) of such 
Code is amended by striking ‘‘and’’ at the end of 
subparagraph (H), by striking the period at the end 
of subparagraph (I) and inserting ‘‘, and’’, and by 
adding at the end the following new subparagraph: 
‘‘(J) second generation biomass.’’. 
(2) SECOND GENERATION BIOMASS DEFINED.— 
Section 45(c) of such Code is amended by adding at 
the end the following new paragraph: 
‘‘(11) SECOND
GENERATION
BIOMASS.—The 
term ‘second generation biomass’ means any bio-
mass which is composed of lignocellulosic or 
hemicellulosic matter that is available on a renew-
able or recurring basis and that does not replace for-
ested land (other than any fuel described in section 
40(b)(6)(E)(iii)).’’. 
(3) QUALIFIED
FACILITY.—Section 45(d) of 
such Code is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(12) SECOND GENERATION BIOMASS.—In the 
case of a facility producing electricity from second 
generation biomass, the term ‘qualified facility’ 
means any facility owned by the taxpayer which is 
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originally placed in service on or after the date of 
the enactment of this paragraph and before January 
1, 2024.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
the date of the enactment of this Act. 
SEC. 204. EXTENSION OF CREDIT FOR NONBUSINESS EN-
ERGY PROPERTY. 
(a) IN GENERAL.—Section 25C(g)(2) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘December 
31, 2014’’ and inserting ‘‘December 31, 2023’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to property placed in service after 
December 31, 2014. 
SEC. 205. PERFORMANCE BASED HOME ENERGY IMPROVE-
MENTS. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 
25E. 
PERFORMANCE 
BASED 
ENERGY 
IMPROVE-
MENTS. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a credit against the tax imposed 
by this chapter for the taxable year for a qualified whole 
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home energy efficiency retrofit an amount determined 
under subsection (b). 
‘‘(b) AMOUNT DETERMINED.— 
‘‘(1) IN GENERAL.—Subject to paragraph (4), 
the amount determined under this subsection is 
equal to— 
‘‘(A) the base amount under paragraph 
(2), increased by 
‘‘(B) the amount determined under para-
graph (3). 
‘‘(2) BASE
AMOUNT.—For purposes of para-
graph (1)(A), the base amount is $2,000, but only 
if the energy use for the residence is reduced by at 
least 20 percent below the baseline energy use for 
such residence as calculated according to paragraph 
(5). 
‘‘(3) INCREASE
AMOUNT.—For purposes of 
paragraph (1)(B), the amount determined under this 
paragraph is $500 for each additional 5 percentage 
point reduction in energy use. 
‘‘(4) LIMITATION.—In no event shall the 
amount determined under this subsection exceed the 
lesser of— 
‘‘(A) $5,000 with respect to any residence, 
or 
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‘‘(B) 30 percent of the qualified home en-
ergy efficiency expenditures paid or incurred by 
the taxpayer under subsection (c) with respect 
to such residence. 
‘‘(5) DETERMINATION OF ENERGY USE REDUC-
TION.—For purposes of this subsection— 
‘‘(A) IN GENERAL.—The reduction in en-
ergy use for any residence shall be determined 
by modeling the annual predicted percentage re-
duction in total energy costs for heating, cool-
ing, hot water, and permanent lighting. It shall 
be modeled using computer modeling software 
approved under subsection (d)(2) and a baseline 
energy use calculated according to subsection 
(d)(1)(C). 
‘‘(B) ENERGY
COSTS.—For purposes of 
subparagraph (A), the energy cost per unit of 
fuel for each fuel type shall be determined by 
dividing the total actual energy bill for the resi-
dence for that fuel type for the most recent 
available 12-month period by the total energy 
units of that fuel type used over the same pe-
riod. 
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‘‘(c) QUALIFIED HOME ENERGY EFFICIENCY EX-
PENDITURES.—For purposes of this section, the term 
‘qualified home energy efficiency expenditures’— 
‘‘(1) means any amount paid or incurred by the 
taxpayer during the taxable year for a qualified 
whole home energy efficiency retrofit, including the 
cost of diagnostic procedures, labor, and modeling, 
‘‘(2) includes only measures that have an aver-
age estimated life of 5 years or more as determined 
by the Secretary, after consultation with the Sec-
retary of Energy, 
‘‘(3) does not include any amount which is paid 
or incurred in connection with any expansion of the 
building envelope of the residence, and 
‘‘(4) does not include improvements to swim-
ming pools or hot tubs or any other expenditure spe-
cifically excluded by the Secretary, after consultation 
with the Secretary of Energy. 
‘‘(d) QUALIFIED WHOLE HOME ENERGY EFFI-
CIENCY RETROFIT.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified whole 
home energy efficiency retrofit’ means the implemen-
tation of measures placed in service during the tax-
able year intended to reduce the energy use of the 
principal residence of the taxpayer which is located 
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