CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE SOURCES.

SEC. 1914. CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE SOURCES. (a) In General.— Subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end thereof the following new section: 106 STAT. 3021 “SEC. 45. ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE RESOURCES. “(a) General Rule.— For purposes of section 38, the renewable electricity production credit for any taxable year is an amount equal to the product of— “(1) 1.5 cents, multiplied by “(2) the kilowatt hours of electricity— “(A) produced by the taxpayer— “(i) from qualified energy resources, and “(ii) at a qualified facility during the 10-year period beginning on the date the facility was originally placed in service, and “(B) sold by the taxpayer to an unrelated person during the taxable year. “(b) Limitations and Adjustments.— “(1) Phaseout of credit.— The amount of the credit determined under subsection (a) shall be reduced by an amount which bears the same ratio to the amount of the credit (determined without regard to this paragraph) as— “(A) the amount by which the reference price for the calendar year in which the sale occurs exceeds 8 cents, bears to “(B) 3 cents. “(2) Credit and phaseout adjustment based on inflation.— The 1.5 cent amount in subsection (a) and the 8 cent amount in paragraph (1) shall each be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale occurs. If any amount as increased under the preceding sentence is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent. “(3) Credit reduced for grants, tax-exempt bonds, subsidized energy financing, and other credits.— The amount of the credit determined under subsection (a) with respect to any project for any taxable year (determined after the application of paragraphs (1) and (2)) shall be reduced by the amount which is the product of the amount so determined for such year and a fraction— “(A) the numerator of which is the sum, for the taxable year and all prior taxable years, of— “(i) grants provided by the United States, a State, or a political subdivision of a State for use in connection with the project, “(ii) proceeds of an issue of State or local government obligations used to provide financing for the project the interest on which is exempt from tax under section 103, “(iii) the aggregate amount of subsidized energy financing provided (directly or indirectly) under a Federal, State, or local program provided in connection with the project, and “(iv) the amount of any other credit allowable with respect to any property which is part of the project, and “(B) the denominator of which is the aggregate amount of additions to the capital account for the project for the taxable year and all poor taxable years. 106 STAT. 3022 The amounts under the preceding sentence for any taxable year shall be determined as of the close of the taxable year. “(c) Definitions.— For purposes of this section— “(1) Qualified energy resources.— The term ‘qualified energy resources’ means— “(A) wind, and “(B) closed-loop biomass. “(2) Closed-loop biomass.— The term ‘closed-loop biomass’ means any organic material from a plant which is planted exclusively for purposes of being used at a qualified facility to produce electricity. “(3) Qualified facility.— The term ‘Qualified facility’ means any facility owned by the taxpayer which is originally placed in service after December 31, 1993 (December 31, 1992, in the case of a facility using closed-loop biomass to produce electricity), and before July 1, 1999. “(d) Definitions and Special Rules.— For purposes of this section— “(1) Only production in the united states taken into account.— Sales shall be taken into account under this section only with respect to electricity the production of which is within— “(A) the United States (within the meaning of section 638(1)), or “(B) a possession of the United States (within the meaning of section 638(2)). “(2) Computation of inflation adjustment factor and reference price.— “(A) In general.— The Secretary shall, not later than April 1 of each calendar year, determine and publish in the Federal Register the inflation adjustment factor and the reference price for such calendar year in accordance with this paragraph. “(B) Inflation adjustment factor.— The term ‘inflation adjustment factor’ means, with respect to a calendar year, a fraction the numerator of which is the GDP implicit price deflator for the preceding calendar year and the denominator of which is the GDP implicit price deflator for the calendar year 1992. The term ’GDP implicit price deflator’ means the most recent revision of the implicit price deflator for the gross domestic product as computed and published by the Department of Commerce before March 15 of the calendar year. “(C) Reference price.— The term ‘reference price’ means, with respect to a calendar year, the Secretary’s determination of the annual average contract price per kilowatt hour of electricity generated from the same qualified energy resource and sold in the previous year in the United States. For purposes of the preceding sentence, only contracts entered into after December 31, 1989, shall be taken into account. “(3) Production attributable to the taxpayer.— In the case of a facility in which more than 1 person has an ownership interest, except to the extent provided in regulations prescribed by the Secretary, production from the facility shall be allocated among such persons in proportion to their respective ownership interests in the gross sales from such facility. 106 STAT. 3023 “(4) Related persons.— Persons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(B). In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling electricity to an unrelated person if such electricity is sold to such a person by another member of such group. “(5) Pass-thru in the case of estates and trusts.— Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.” (b) Credit To Be Part of General Business Credit.— Subsection (b) of section 38 is amended by striking “plus” at the end of paragraph (6), by striking the period at the end of paragraph (7) and inserting “, plus”, and by adding at the end thereof the following new paragraph: “(8) the renewable electricity production credit under section 45(a).” (c) Limitation on Carryback.— Subsection (d) of section 39 is amended by redesignating the paragraph added by section 11511(b)(2) of the Revenue Reconciliation Act of 1990 as paragraph (1), by redesignating the paragraph added by section 11611(b)(2) of such Act as paragraph (2), and by adding at the end thereof the following new paragraph: “(3) No carryback of renewable electricity production credit before effective date.— No portion of the unused business credit for any taxable year which is attributable to the credit determined under section 45 (relating to electricity produced from certain renewable resources) may be carried back to any taxable year ending before January 1, 1993 (before January 1, 1994, to the extent such credit is attributable to wind as a qualified energy resource).” (d) Clerical Amendment.— The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end thereof the following new item: “Sec. 46. Electricity produced from certain renewable resources.” (e) Effective Date.— The amendments made by this section shall apply to taxable years ending after December 31, 1992.