ENERGY CREDIT.

SEC. 103. ENERGY CREDIT.(a) Extension of Credit.—(1) Solar energy property.—Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) are each amended by striking “January 1, 2009” and inserting “January 1, 2017”.(2) Fuel cell property.—Subparagraph (E) of section 48(c)(1) is amended by striking “December 31, 2008” and inserting “December 31, 2016”.(3) Microturbine property.—Subparagraph (E) of section 48(c)(2) is amended by striking “December 31, 2008” and inserting “December 31, 2016”.(b) Allowance of Energy Credit Against Alternative Minimum Tax.—(1) In general.—Subparagraph (B) of section 38(c)(4), as amended by the Housing Assistance Tax Act of 2008, is amended by redesignating clause (vi) as clause (vi) and (vii), respectively, and by inserting after clause (iv) the following new clause:“(v) the credit determined under section 46 to the extent that such credit is attributable to the energy credit determined under section 48,”.(2) Technical amendment.—Clause (vi) of section 38(c)(4)(B), as redesignated by paragraph (1), is amended by striking “section 47 to the extent attributable to” and inserting “section 46 to the extent that such credit is attributable to the rehabilitation credit under section 47, but only with respect to”.(c) Energy Credit for Combined Heat and Power System Property.—(1) In general.—Section 48(a)(3)(A) is amended by striking “or” at the end of clause (iii), by inserting “or” at the end of clause (iv), and by adding at the end the following new clause:“(v) combined heat and power system property,”.(2) Combined heat and power system property.—Subsection (c) of section 48 is amended—(A) by striking “Qualified Fuel Cell Property; Qualified Microturbine Property” in the heading and inserting “Definitions”, and(B) by adding at the end the following new paragraph:“(3) Combined heat and power system property.—“(A) Combined heat and power system property.—The term ‘combined heat and power system property’ means property comprising a system—“(i) which uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications),“(ii) which produces—122 STAT. 3812“(I) at least 20 percent of its total useful energy in the form of thermal energy which is not used to produce electrical or mechanical power (or combination thereof), and“(II) at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof),“(iii) the energy efficiency percentage of which exceeds 60 percent, and“(iv) which is placed in service before January 1, 2017.“(B) Limitation.—“(i) In general.—In the case of combined heat and power system property with an electrical capacity in excess of the applicable capacity placed in service during the taxable year, the credit under subsection (a)(1) (determined without regard to this paragraph) for such year shall be equal to the amount which bears the same ratio to such credit as the applicable capacity bears to the capacity of such property.“(ii) Applicable capacity.—For purposes of clause (i), the term ‘applicable capacity’ means 15 megawatts or a mechanical energy capacity of more than 20,000 horsepower or an equivalent combination of electrical and mechanical energy capacities.“(iii) Maximum capacity.—The term ‘combined heat and power system property’ shall not include any property comprising a system if such system has a capacity in excess of 50 megawatts or a mechanical energy capacity in excess of 67,000 horsepower or an equivalent combination of electrical and mechanical energy capacities.“(C) Special rules.—“(i) Energy efficiency percentage.—For purposes of this paragraph, the energy efficiency percentage of a system is the fraction—“(I) the numerator of which is the total useful electrical, thermal, and mechanical power produced by the system at normal operating rates, and expected to be consumed in its normal application, and“(II) the denominator of which is the lower heating value of the fuel sources for the system.“(ii) Determinations made on btu basis.—The energy efficiency percentage and the percentages under subparagraph (A)(ii) shall be determined on a Btu basis.“(iii) Input and output property not included.—The term ‘combined heat and power system property’ does not include property used to transport the energy source to the facility or to distribute energy produced by the facility.“(D) Systems using biomass.—If a system is designed to use biomass (within the meaning of paragraphs (2) and (3) of section 45(c) without regard to the last sentence of paragraph (3)(A)) for at least 90 percent of the energy source—122 STAT. 3813“(i) subparagraph (A)(iii) shall not apply, but“(ii) the amount of credit determined under subsection (a) with respect to such system shall not exceed the amount which bears the same ratio to such amount of credit (determined without regard to this subparagraph) as the energy efficiency percentage of such system bears to 60 percent.”.(3) Conforming amendment.—Section 48(a)(1) is amended by striking “paragraphs (1)(B) and (2)(B)” and inserting “paragraphs (1)(B), (2)(B), and (3)(B)”.(d) Increase of Credit Limitation for Fuel Cell Property.—Subparagraph (B) of section 48(c)(1) is amended by striking “$500” and inserting “$1,500”.(e) Public Utility Property Taken Into Account.—(1) In general.—Paragraph (3) of section 48(a) is amended by striking the second sentence thereof.(2) Conforming amendments.—(A) Paragraph (1) of section 48(c) is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).(B) Paragraph (2) of section 48(c) is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).(f) Effective Date.—(1) In general.—Except as otherwise provided in this subsection, the amendments made by this section shall take effect on the date of the enactment of this Act.(2) Allowance against alternative minimum tax.—The amendments made by subsection (b) shall apply to credits determined under section 46 of the Internal Revenue Code of 1986 in taxable years beginning after the date of the enactment of this Act and to carrybacks of such credits.(3) Combined heat and power and fuel cell property.—The amendments made by subsections (c) and (d) shall apply to periods after the date of the enactment of this Act, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).(4) Public utility property.—The amendments made by subsection (e) shall apply to periods after February 13, 2008, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).