Extension and modification of renewable energy production tax credit

(a)

Extension of Credit

Each of the following provisions of section 45(d) of the Internal Revenue Code of 1986 (relating to qualified facilities) is amended by striking January 1, 2009 and inserting January 1, 2019: (1)Paragraph (1). (2)Clauses (i) and (ii) of paragraph (2)(A). (3)Clauses (i)(I) and (ii) of paragraph (3)(A). (4)Paragraph (4). (5)Paragraph (5). (6)Paragraph (6). (7)Paragraph (7). (8)Paragraph (8). (9)Subparagraphs (A) and (B) of paragraph (9). (b)

Production Credit for Electricity Produced From Marine Renewables

(1)

In general

Paragraph (1) of section 45(c) of such Code (relating to resources) is amended by striking and at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting , and, and by adding at the end the following new subparagraph:

(I)marine and hydrokinetic renewable energy.

(2)

Marine renewables

Subsection (c) of section 45 of such Code is amended by adding at the end the following new paragraph:

(10)

Marine and hydrokinetic renewable energy

(A)

In general

The term marine and hydrokinetic renewable energy means energy derived from— (i)waves, tides, and currents in oceans, estuaries, and tidal areas, (ii)free flowing water in rivers, lakes, and streams, (iii)free flowing water in an irrigation system, canal, or other man-made channel, including projects that utilize nonmechanical structures to accelerate the flow of water for electric power production purposes, or (iv)differentials in ocean temperature (ocean thermal energy conversion). (B)

Exceptions

Such term shall not include any energy which is derived from any source which utilizes a dam, diversionary structure (except as provided in subparagraph (A)(iii)), or impoundment for electric power production purposes.

(3)

Definition of facility

Subsection (d) of section 45 of such Code is amended by adding at the end the following new paragraph:

(11)

Marine and hydrokinetic renewable energy facilities

In the case of a facility producing electricity from marine and hydrokinetic renewable energy, the term qualified facility means any facility owned by the taxpayer— (A)which has a nameplate capacity rating of at least 150 kilowatts, and (B)which is originally placed in service on or after the date of the enactment of this paragraph and before January 1, 2010.

(4)

Credit rate

Subparagraph (A) of section 45(b)(4) of such Code is amended by striking or (9) and inserting (9), or (11). (5)

Coordination with small irrigation power

Paragraph (5) of section 45(d) of such Code, as amended by subsection (a), is amended by striking January 1, 2019 and inserting the date of the enactment of paragraph (11). (c)

Sales of Electricity to Regulated Public Utilities Treated as Sales to Unrelated Persons

Section 45(e)(4) of such Code (relating to related persons) is amended by adding at the end the following new sentence: A taxpayer shall be treated as selling electricity to an unrelated person if such electricity is sold to a regulated public utility (as defined in section 7701(a)(33).. (d)

Trash Facility Clarification

Paragraph (7) of section 45(d) of such Code is amended— (1)by striking facility which burns and inserting facility (other than a facility described in paragraph (6)) which uses, and (2)by striking

combustion

. (e)

Effective Dates

(1)

Extension

The amendments made by subsection (a) shall apply to property originally placed in service after December 31, 2008. (2)

Modifications

The amendments made by subsections (b) and (c) shall apply to electricity produced and sold after the date of the enactment of this Act, in taxable years ending after such date. (3)

Trash facility clarification

The amendments made by subsection (d) shall apply to electricity produced and sold before, on, or after December 31, 2007.

Extension and modification of solar energy and fuel cell investment tax credit

(a)

Extension of Credit

(1)

Solar energy property

Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) of the Internal Revenue Code of 1986 (relating to energy credit) are each amended by striking January 1, 2009 and inserting January 1, 2019. (2)

Fuel cell property

Subparagraph (E) of section 48(c)(1) of such Code (relating to qualified fuel cell property) is amended by striking December 31, 2008 and inserting December 31, 2018. (3)

Qualified microturbine property

Subparagraph (E) of section 48(c)(2) of such Code (relating to qualified microturbine property) is amended by striking December 31, 2008 and inserting December 31, 2018. (b)

Allowance of Energy Credit Against Alternative Minimum Tax

Subparagraph (B) of section 38(c)(4) of such Code (relating to specified credits) is amended by striking and at the end of clause (iii), by striking the period at the end of clause (iv) and inserting , and, and by adding at the end 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.

(c)

Repeal of Dollar Per Kilowatt Limitation for Fuel Cell Property

(1)

In general

Section 48(c)(1) of such Code (relating to qualified fuel cell), as amended by subsection (a)(2), is amended by striking subparagraph (B) and by redesignating subparagraphs (C), (D), and (E) as subparagraphs (B), (C), and (D), respectively. (2)

Conforming amendment

Section 48(a)(1) of such Code is amended by striking paragraphs (1)(B) and (2)(B) of subsection (c) and inserting subsection (c)(2)(B). (d)

Public Electric Utility Property Taken Into Account

(1)

In general

Paragraph (3) of section 48(a) of such Code is amended by striking the second sentence thereof. (2)

Conforming amendments

(A)Paragraph (1) of section 48(c) of such Code, as amended by this section, is amended by striking subparagraph (C) and redesignating subparagraph (D) as subparagraph (C). (B)Paragraph (2) of section 48(c) of such Code, as amended by subsection (a)(3), is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D). (e)

Effective Dates

(1)

Extension

The amendments made by subsection (a) 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)

Fuel cell property and public electric utility 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).

Extension and modification of residential energy efficient property credit

(a)

Extension

Subsection (g) of section 25D of the Internal Revenue Code of 1986 (relating to termination) is amended by striking December 31, 2008 and inserting December 31, 2018. (b)

No Dollar Limitation for Credit for Solar Electric Property

(1)

In general

Section 25D(b)(1) of such Code (relating to maximum credit) is amended by striking subparagraph (A) and by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively. (2)

Conforming amendments

Section 25D(e)(4) of such Code is amended— (A)by striking clause (i) in subparagraph (A), (B)by redesignating clauses (ii) and (iii) in subparagraph (A) as clauses (i) and (ii), respectively, and (C)by striking , (2), in subparagraph (C). (c)

Credit Allowed Against Alternative Minimum Tax

(1)

In general

Subsection (c) of section 25D of such Code is amended to read as follows:

(c)

Limitation Based on Amount of Tax; Carryforward of Unused Credit

(1)

Limitation based on amount of tax

In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for the taxable year shall not exceed the excess of— (A)the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over (B)the sum of the credits allowable under this subpart (other than this section) and section 27 for the taxable year. (2)

Carryforward of unused credit

(A)

Rule for years in which all personal credits allowed against regular and alternative minimum tax

In the case of a taxable year to which section 26(a)(2) applies, if the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a)(2) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year. (B)

Rule for other years

In the case of a taxable year to which section 26(a)(2) does not apply, if the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.

(2)

Conforming amendments

(A)Section 23(b)(4)(B) of such Code is amended by inserting and section 25D after this section. (B)Section 24(b)(3)(B) of such Code is amended by striking and 25B and inserting , 25B, and 25D. (C)Section 25B(g)(2) of such Code is amended by striking section 23 and inserting sections 23 and 25D. (D)Section 26(a)(1) of such Code is amended by striking and 25B and inserting 25B, and 25D. (d)

Effective Date

(1)

In general

The amendments made by this section shall apply to taxable years beginning after December 31, 2007. (2)

Application of egtrra sunset

The amendments made by subparagraphs (A) and (B) of subsection (c)(2) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the provisions of such Act to which such amendments relate.