26 USC 48 - Energy credit

Collapse to view only § 48. Energy credit

§ 46. Amount of credit
§ 47. Rehabilitation credit
§ 48. Energy credit
§ 48A. Qualifying advanced coal project credit
§ 48B. Qualifying gasification project credit
§ 48C. Qualifying advanced energy project credit
§ 48D. Advanced manufacturing investment credit
§ 48E. Clean electricity investment credit
§ 49. At-risk rules
§ 50. Other special rules
[§§ 50A, 50B. Repealed.

§ 46. Amount of credit

For purposes of section 38, the amount of the investment credit determined under this section for any taxable year shall be the sum of—

(1) the rehabilitation credit,

(2) the energy credit,

(3) the qualifying advanced coal project credit,

(4) the qualifying gasification project credit,

(5) the qualifying advanced energy project credit, and

(6) the advanced manufacturing investment credit.

(Added Pub. L. 87–834, § 2(b), Oct. 16, 1962, 76 Stat. 963; amended Pub. L. 88–272, title II, § 201(d)(4), Feb. 26, 1964, 78 Stat. 32; Pub. L. 89–384, § 1(c)(1), Apr. 8, 1966, 80 Stat. 102; Pub. L. 89–389, § 2(b)(5), Apr. 14, 1966, 80 Stat. 114; Pub. L. 89–800, § 3, Nov. 8, 1966, 80 Stat. 1514; Pub. L. 90–225, § 2(a), Dec. 27, 1967, 81 Stat. 731; Pub. L. 91–172, title III, § 301(b)(4), title IV, § 401(e)(1), title VII, § 703(b), Dec. 30, 1969, 83 Stat. 585, 603, 666; Pub. L. 92–178, title I, §§ 102(a)(1), (b), 105(a)–(c), 106(a)–(c), 107(a)(1), 108(a), Dec. 10, 1971, 85 Stat. 499, 503, 506, 507; Pub. L. 93–406, title II, §§ 2001(g)(2)(B), 2002(g)(2), 2005(c)(4), Sept. 2, 1974, 88 Stat. 957, 968, 991; Pub. L. 94–12, title III, § 301(a), (b)(1)–(3), 302(a), (b)(1), Mar. 29, 1975, 89 Stat. 36, 37, 40, 43; Pub. L. 94–455, title V, § 503(b)(4), title VIII, §§ 802(a), (b)(1)–(5), 803(a), (b)(1), 805(a), title XVI, § 1607(b)(1)(B), title XVII, §§ 1701(b), 1703, title XIX, §§ 1901(a)(4), (b)(1)(C), 1906(b)(13)(A), title XXI, § 2112(a)(2), Oct. 4, 1976, 90 Stat. 1562, 1580–1583, 1596, 1756, 1759, 1761, 1764, 1790, 1834, 1905; Pub. L. 95–600, title I, § 141(e), (f)(2), title III, §§ 311(a), (c), 312(a), (b), (c)(2), 313(a), 316(a), (b)(1), (2), title VII, § 703(a)(1), (2), (j)(9), Nov. 6, 1978, 92 Stat. 2794, 2795, 2824–2826, 2829, 2939, 2941; Pub. L. 95–618, title II, § 241(a), title III, § 301(a), (c)(1), Nov. 9, 1978, 92 Stat. 3192, 3194, 3199; Pub. L. 96–222, title I, §§ 101(a)(7)(A), (L)(iii)(I), (v)(I), (M)(i), 103(a)(2)(A), (B)(i)–(iii), (3), (4)(A), 107(a)(3)(A), Apr. 1, 1980, 94 Stat. 197, 200, 201, 208, 209, 223; Pub. L. 96–223, title II, §§ 221(a), 222(e)(2), 223(b)(1), Apr. 2, 1980, 94 Stat. 260, 263, 266; Pub. L. 97–34, title II, §§ 207(c)(1), 211(a)(1), (b), (d), (e)(1), (2), (f)(1), 212(a)(1), (2), title III, §§ 302(c)(3), (d)(1), 332(a), Aug. 13, 1981, 95 Stat. 225, 227–229, 235, 236, 272, 274, 296; Pub. L. 97–248, title II, § 201(d)(8)(A), formerly § 201(c)(8)(A), §§ 205(b), 265(b)(2)(A)(i), Sept. 3, 1982, 96 Stat. 420, 430, 547, renumbered § 201(d)(8)(A), Pub. L. 97–448, title III, § 306(a)(1)(A)(i), Jan. 12, 1983, 96 Stat. 2400; Pub. L. 97–354, § 5(a)(4)–(6), Oct. 19, 1982, 96 Stat. 1692; Pub. L. 97–424, title V, §§ 541(b), 546(b), Jan. 6, 1983, 96 Stat. 2192, 2199; Pub. L. 97–448, title I, § 102(e)(1), (f)(5), title II, § 202(f), Jan. 12, 1983, 96 Stat. 2370, 2372, 2396; Pub. L. 98–21, title I, § 122(c)(1), Apr. 20, 1983, 97 Stat. 87; Pub. L. 98–369, div. A, title I, §§ 16(a), 31(f), 113(b)(2)(B), title IV, §§ 431(a), (b)(1), (d)(1)–(3), 474(o)(1)–(7), title VII, § 713(c)(1)(C), July 18, 1984, 98 Stat. 505, 521, 637, 805, 807, 810, 834–836, 957; Pub. L. 99–514, title II, §§ 201(d)(7)(B), 251(a), title IV, § 421(a), (b), title XVIII, §§ 1802(a)(6), (8), 1844(a), (b)(3), (5), 1847(b)(11), 1848(a), Oct. 22, 1986, 100 Stat. 2141, 2183, 2229, 2789, 2855, 2857; Pub. L. 100–647, title I, §§ 1002(a)(4), (15), (17), (25), 1009(a)(1), 1013(a)(44), title IV, § 4006, Nov. 10, 1988, 102 Stat. 3353, 3355, 3356, 3445, 3545, 3652; Pub. L. 101–239, title VII, §§ 7106, 7814(d), Dec. 19, 1989, 103 Stat. 2306, 2413; Pub. L. 101–508, title XI, §§ 11406, 11813(a), Nov. 5, 1990, 104 Stat. 1388–474, 1388–536; Pub. L. 108–357, title III, § 322(d)(1), Oct. 22, 2004, 118 Stat. 1475; Pub. L. 109–58, title XIII, § 1307(a), Aug. 8, 2005, 119 Stat. 999; Pub. L. 111–5, div. B, title I, § 1302(a), Feb. 17, 2009, 123 Stat. 345; Pub. L. 111–148, title IX, § 9023(b), Mar. 23, 2010, 124 Stat. 880; Pub. L. 113–295, div. A, title II, § 220(c), Dec. 19, 2014, 128 Stat. 4035; Pub. L. 117–167, div. A, § 107(d)(1), Aug. 9, 2022, 136 Stat. 1398; Pub. L. 117–169, title I, § 13702(b)(1), Aug. 16, 2022, 136 Stat. 1996.)

§ 47. Rehabilitation credit

(a) General rule

(1) In general

(2) Ratable share

(b) When expenditures taken into account

(1) In general

(2) Coordination with subsection (d)

(1) Qualified rehabilitated building

(A) In generalThe term “qualified rehabilitated building” means any building (and its structural components) if—

(i) such building has been substantially rehabilitated,

(ii) such building was placed in service before the beginning of the rehabilitation,

(iii) such building is a certified historic structure, and

(iv) depreciation (or amortization in lieu of depreciation) is allowable with respect to such building.

(B) Substantially rehabilitated defined

(i) In generalFor purposes of subparagraph (A)(i), a building shall be treated as having been substantially rehabilitated only if the qualified rehabilitation expenditures during the 24-month period selected by the taxpayer (at the time and in the manner prescribed by regulation) and ending with or within the taxable year exceed the greater of—(I) the adjusted basis of such building (and its structural components), or(II) $5,000.

The adjusted basis of the building (and its structural components) shall be determined as of the beginning of the 1st day of such 24-month period, or of the holding period of the building, whichever is later. For purposes of the preceding sentence, the determination of the beginning of the holding period shall be made without regard to any reconstruction by the taxpayer in connection with the rehabilitation.

(ii) Special rule for phased rehabilitation

(iii) Lessees

(2) Qualified rehabilitation expenditure defined

(A) In generalThe term “qualified rehabilitation expenditure” means any amount properly chargeable to capital account—

(i) for property for which depreciation is allowable under section 168 and which is—(I) nonresidential real property,(II) residential rental property,(III) real property which has a class life of more than 12.5 years, or(IV) an addition or improvement to property described in subclause (I), (II), or (III), and

(ii) in connection with the rehabilitation of a qualified rehabilitated building.

(B) Certain expenditures not includedThe term “qualified rehabilitation expenditure” does not include—

(i) Straight line depreciation must be used

(ii) Cost of acquisition

(iii) Enlargements

(iv) Certified historic structure

(v) Tax-exempt use property(I) In general(II) Clause not to apply for purposes of paragraph (1)(C)

(vi) Expenditures of lessee

(D) Nonresidential real property; residential rental property; class life

(3) Certified historic structure defined

(A) In generalThe term “certified historic structure” means any building (and its structural components) which—

(i) is listed in the National Register, or

(ii) is located in a registered historic district and is certified by the Secretary of the Interior to the Secretary as being of historic significance to the district.

(B) Registered historic districtThe term “registered historic district” means—

(i) any district listed in the National Register, and

(ii) any district—(I) which is designated under a statute of the appropriate State or local government, if such statute is certified by the Secretary of the Interior to the Secretary as containing criteria which will substantially achieve the purpose of preserving and rehabilitating buildings of historic significance to the district, and(II) which is certified by the Secretary of the Interior to the Secretary as meeting substantially all of the requirements for the listing of districts in the National Register.

(d) Progress expenditures

(1) In generalIn the case of any building to which this subsection applies, except as provided in paragraph (3)—

(A) if such building is self-rehabilitated property, any qualified rehabilitation expenditure with respect to such building shall be taken into account for the taxable year for which such expenditure is properly chargeable to capital account with respect to such building, and

(B) if such building is not self-rehabilitated property, any qualified rehabilitation expenditure with respect to such building shall be taken into account for the taxable year in which paid.

(2) Property to which subsection applies

(A) In generalThis subsection shall apply to any building which is being rehabilitated by or for the taxpayer if—

(i) the normal rehabilitation period for such building is 2 years or more, and

(ii) it is reasonable to expect that such building will be a qualified rehabilitated building in the hands of the taxpayer when it is placed in service.

Clauses (i) and (ii) shall be applied on the basis of facts known as of the close of the taxable year of the taxpayer in which the rehabilitation begins (or, if later, at the close of the first taxable year to which an election under this subsection applies).

(B) Normal rehabilitation periodFor purposes of subparagraph (A), the term “normal rehabilitation period” means the period reasonably expected to be required for the rehabilitation of the building—

(i) beginning with the date on which physical work on the rehabilitation begins (or, if later, the first day of the first taxable year to which an election under this subsection applies), and

(ii) ending on the date on which it is expected that the property will be available for placing in service.

(3) Special rules for applying paragraph (1)For purposes of paragraph (1)—

(A) Component parts, etc.Property which is to be a component part of, or is otherwise to be included in, any building to which this subsection applies shall be taken into account—

(i) at a time not earlier than the time at which it becomes irrevocably devoted to use in the building, and

(ii) as if (at the time referred to in clause (i)) the taxpayer had expended an amount equal to that portion of the cost to the taxpayer of such component or other property which, for purposes of this subpart, is properly chargeable (during such taxable year) to capital account with respect to such building.

(B) Certain borrowing disregarded

(i) In general

(ii) Carryover of certain amountsIn the case of a building which is not a self-rehabilitated building, if for the taxable year—(I) the amount which (but for clause (i)) would have been taken into account under paragraph (1)(B) exceeds the limitation of clause (i), then the amount of such excess shall be taken into account under paragraph (1)(B) for the succeeding taxable year, or(II) the limitation of clause (i) exceeds the amount taken into account under paragraph (1)(B), then the amount of such excess shall increase the limitation of clause (i) for the succeeding taxable year.

(D) Determination of percentage of completion

(E) No progress expenditures for certain prior periods

(F) No progress expenditures for property for year it is placed in service, etc.In the case of any building, no qualified rehabilitation expenditures shall be taken into account under this subsection for the earlier of—

(i) the taxable year in which the building is placed in service, or

(ii) the first taxable year for which recapture is required under section 50(a)(2) with respect to such property,

or for any taxable year thereafter.

(4) Self-rehabilitated building

(5) Election

(Added Pub. L. 87–834, § 2(b), Oct. 16, 1962, 76 Stat. 966; amended Pub. L. 91–172, title VII, § 703(c), Dec. 30, 1969, 83 Stat. 666; Pub. L. 91–676, § 1, Jan. 12, 1971, 84 Stat. 2060; Pub. L. 92–178, title I, §§ 102(c), 107(a)(1), (b)(1), Dec. 10, 1971, 85 Stat. 500, 507; Mar. 29, 1975, Pub. L. 94–12, title III, § 302(b)(2)(A), (c)(1), (2), 89 Stat. 43, 44; Pub. L. 94–455, title VIII, § 804(b), title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1594, 1834; Pub. L. 95–600, title III, § 317(a), Nov. 6, 1978, 92 Stat. 2830; Pub. L. 95–618, title II, § 241(b), Nov. 9, 1978, 92 Stat. 3193; Pub. L. 97–34, title II, § 211(f)(2), (g), Aug. 13, 1981, 95 Stat. 231, 233; Pub. L. 97–248, title II, § 208(a)(2)(B), Sept. 3, 1982, 96 Stat. 435; Pub. L. 97–448, title I, § 102(e)(3), Jan. 12, 1983, 96 Stat. 2371; Pub. L. 98–369, div. A, title IV, §§ 421(b)(7), 431(b)(2), (d)(4), (5), 474(o)(8), (9), July 18, 1984, 98 Stat. 794, 807, 810, 836; Pub. L. 98–443, § 9(p), Oct. 4, 1984, 98 Stat. 1708; Pub. L. 99–121, title I, § 103(b)(6), Oct. 11, 1985, 99 Stat. 510; Pub. L. 99–514, title XV, § 1511(c)(2), title XVIII, §§ 1802(a)(5)(A), 1844(b)(1), (2), (4), Oct. 22, 1986, 100 Stat. 2744, 2788, 2855; Pub. L. 100–647, title I, §§ 1002(a)(18), (26)–(28), 1007(g)(3)(A), Nov. 10, 1988, 102 Stat. 3356, 3357, 3435; Pub. L. 101–508, title XI, § 11801(c)(8)(A), 11813(a), Nov. 5, 1990, 104 Stat. 1388–524, 1388–536; Pub. L. 110–289, div. C, title I, § 3025(a), July 30, 2008, 122 Stat. 2897; Pub. L. 115–97, title I, § 13402(a), (b)(1), Dec. 22, 2017, 131 Stat. 2134.)

§ 48. Energy credit

(a) Energy credit

(1) In general

(2) Energy percentage

(A) In generalExcept as provided in paragraphs (6) and (7), the energy percentage is—

(i) 6 percent in the case of—(I) qualified fuel cell property,(II) energy property described in clause (i) or (iii) of paragraph (3)(A) but only with respect to property the construction of which begins before January 1, 2025,(III) energy property described in paragraph (3)(A)(ii),(IV) qualified small wind energy property,(V) waste energy recovery property,(VI) energy storage technology,(VII) qualified biogas property,(VIII) microgrid controllers, and(IX) energy property described in clauses (v) and (vii) of paragraph (3)(A), and

(ii) in the case of any energy property to which clause (i) does not apply, 2 percent.

(B) Coordination with rehabilitation credit

(3) Energy propertyFor purposes of this subpart, the term “energy property” means any property—

(A) which is—

(i) equipment which uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat, excepting property used to generate energy for the purposes of heating a swimming pool,

(ii) equipment which uses solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, or electrochromic glass which uses electricity to change its light transmittance properties in order to heat or cool a structure, but only with respect to property the construction of which begins before January 1, 2025,

(iii) equipment used to produce, distribute, or use energy derived from a geothermal deposit (within the meaning of section 613(e)(2)), but only, in the case of electricity generated by geothermal power, up to (but not including) the electrical transmission stage,

(iv) qualified fuel cell property or qualified microturbine property,

(v) combined heat and power system property,

(vi) qualified small wind energy property,

(vii) equipment which uses the ground or ground water as a thermal energy source to heat a structure or as a thermal energy sink to cool a structure, but only with respect to property the construction of which begins before January 1, 2035,

(viii) waste energy recovery property,

(ix) energy storage technology,

(x) qualified biogas property, or

(xi) microgrid controllers,

(B)

(i) the construction, reconstruction, or erection of which is completed by the taxpayer, or

(ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer,

(D) which meets the performance and quality standards (if any) which—

(i) have been prescribed by the Secretary by regulations (after consultation with the Secretary of Energy), and

(ii) are in effect at the time of the acquisition of the property.

Such term shall not include any property which is part of a facility the production from which is allowed as a credit under section 45 for the taxable year or any prior taxable year.

(4) Special rule for property financed by tax-exempt bonds

(5) Election to treat qualified facilities as energy property

(A) In generalIn the case of any qualified property which is part of a qualified investment credit facility—

(i) such property shall be treated as energy property for purposes of this section, and

(ii) the energy percentage with respect to such property shall be 6 percent.

(B) Denial of production credit

(C) Qualified investment credit facilityFor purposes of this paragraph, the term “qualified investment credit facility” means any facility—

(i) which is a qualified facility (within the meaning of section 45) described in paragraph (1), (2), (3), (4), (6), (7), (9), or (11) of section 45(d),

(ii) which is placed in service after 2008 and the construction of which begins before January 1, 2025, and

(iii) with respect to which—(I) no credit has been allowed under section 45, and(II) the taxpayer makes an irrevocable election to have this paragraph apply.

(D) Qualified propertyFor purposes of this paragraph, the term “qualified property” means property—

(i) which is—(I) tangible personal property, or(II) other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified investment credit facility,

(ii) with respect to which depreciation (or amortization in lieu of depreciation) is allowable,

(iii) which is constructed, reconstructed, erected, or acquired by the taxpayer, and

(iv) the original use of which commences with the taxpayer.

(E) Phaseout of credit for wind facilitiesIn the case of any facility using wind to produce electricity which is placed in service before January 1, 2022, and treated as energy property by reason of this paragraph, the amount of the credit determined under this section (determined after the application of paragraphs (1) and (2) and without regard to this subparagraph) shall be reduced by—

(i) in the case of any facility the construction of which begins after December 31, 2016, and before January 1, 2018, 20 percent,

(ii) in the case of any facility the construction of which begins after December 31, 2017, and before January 1, 2019, 40 percent,

(iii) in the case of any facility the construction of which begins after December 31, 2018, and before January 1, 2020, 60 percent, and

(iv) in the case of any facility the construction of which begins after December 31, 2019, and before January 1, 2022, 40 percent.

(F) Qualified offshore wind facilities

(i) In general

(ii) Qualified offshore wind facility

(6) Phaseout for certain energy property

(7) Phaseout for certain energy propertyIn the case of any energy property described in clause (vii) of paragraph (3)(A), the energy percentage determined under paragraph (2) shall be equal to—

(A) in the case of any property the construction of which begins before January 1, 2033, and which is placed in service after December 31, 2021, 6 percent,

(B) in the case of any property the construction of which begins after December 31, 2032, and before January 1, 2034, 5.2 percent, and

(C) in the case of any property the construction of which begins after December 31, 2033, and before January 1, 2035, 4.4 percent.

(8) Interconnection property

(A) In general

(B) Qualified interconnection propertyThe term “qualified interconnection property” means, with respect to an energy project which is not a microgrid controller, any tangible property—

(i) which is part of an addition, modification, or upgrade to a transmission or distribution system which is required at or beyond the point at which the energy project interconnects to such transmission or distribution system in order to accommodate such interconnection,

(ii) either—(I) which is constructed, reconstructed, or erected by the taxpayer, or(II) for which the cost with respect to the construction, reconstruction, or erection of such property is paid or incurred by such taxpayer, and

(iii) the original use of which, pursuant to an interconnection agreement, commences with a utility.

(D) Utility

(E) Special rule for interconnection property

(9) Increased credit amount for energy projects

(A) In general

(i) Rule

(ii) Energy project defined

(B) Project requirementsA project meets the requirements of this subparagraph if it is one of the following:

(i) A project with a maximum net output of less than 1 megawatt of electrical (as measured in alternating current) or thermal energy.

(ii) A project the construction of which begins before the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (10)(A) and (11).

(iii) A project which satisfies the requirements of paragraphs (10)(A) and (11).

(10) Prevailing wage requirements

(A) In generalThe requirements described in this subparagraph with respect to any energy project are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in—

(i) the construction of such energy project, and

(ii) for the 5-year period beginning on the date such project is originally placed in service, the alteration or repair of such project,

shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such project is located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code. Subject to subparagraph (C), for purposes of any determination under paragraph (9)(A)(i) for the taxable year in which the energy project is placed in service, the taxpayer shall be deemed to satisfy the requirement under clause (ii) at the time such project is placed in service.

(B) Correction and penalty related to failure to satisfy wage requirements

(11) Apprenticeship requirements

(12) Domestic span bonus credit amount

(A) In general

(B) Requirement

(i) in the case of an energy project which does not satisfy the requirements of paragraph (9)(B), 2 percentage points, and

(ii) in the case of an energy project which satisfies the requirements of paragraph (9)(B), 10 percentage points.

(13) Phaseout for elective payment

(14) Increase in credit rate for energy communities

(A) In general

(B) Applicable credit rate increaseFor purposes of subparagraph (A), the applicable credit rate increase shall be equal to—

(i) in the case of any energy project which does not satisfy the requirements of paragraph (9)(B), 2 percentage points, and

(ii) in the case of any energy project which satisfies the requirements of paragraph (9)(B), 10 percentage points.

(15) Election to treat clean hydrogen production facilities as energy property

(A) In generalIn the case of any qualified property (as defined in paragraph (5)(D)) which is part of a specified clean hydrogen production facility—

(i) such property shall be treated as energy property for purposes of this section, and

(ii) the energy percentage with respect to such property is—(I) in the case of a facility which is designed and reasonably expected to produce qualified clean hydrogen which is described in a subparagraph (A) of section 45V(b)(2), 1.2 percent,(II) in the case of a facility which is designed and reasonably expected to produce qualified clean hydrogen which is described in a subparagraph (B) of such section, 1.5 percent,(III) in the case of a facility which is designed and reasonably expected to produce qualified clean hydrogen which is described in a subparagraph (C) of such section, 2 percent, and(IV) in the case of a facility which is designed and reasonably expected to produce qualified clean hydrogen which is described in subparagraph (D) of such section, 6 percent.

(B) Denial of production credit

(C) Specified clean hydrogen production facilityFor purposes of this paragraph, the term “specified clean hydrogen production facility” means any qualified clean hydrogen production facility (as defined in section 45V(c)(3))—

(i) which is placed in service after December 31, 2022,

(ii) with respect to which—(I) no credit has been allowed under section 45V or 45Q, and(II) the taxpayer makes an irrevocable election to have this paragraph apply, and

(iii) for which an unrelated third party has verified (in such form or manner as the Secretary may prescribe) that such facility produces hydrogen through a process which results in lifecycle greenhouse gas emissions which are consistent with the hydrogen that such facility was designed and expected to produce under subparagraph (A)(ii).

(D) Qualified clean hydrogen

(E) Regulations

(16) Regulations and guidance

(b) Certain progress expenditure rules made applicable

(1) Qualified fuel cell property

(A) In generalThe term “qualified fuel cell property” means a fuel cell power plant which—

(i) has a nameplate capacity of at least 0.5 kilowatt (1 kilowatt in the case of a fuel cell power plant with a linear generator assembly) of electricity using an electrochemical or electromechanical process, and

(ii) has an electricity-only generation efficiency greater than 30 percent.

(B) Limitation

(D) Linear generator assembly

(E) Termination

(2) Qualified microturbine property

(A) In generalThe term “qualified microturbine property” means a stationary microturbine power plant which—

(i) has a nameplate capacity of less than 2,000 kilowatts, and

(ii) has an electricity-only generation efficiency of not less than 26 percent at International Standard Organization conditions.

(B) Limitation

(D) Termination

(3) Combined heat and power system property

(A) Combined heat and power system propertyThe 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—(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) the construction of which begins before January 1, 2025.

(B) Limitation

(i) In general

(ii) Applicable capacity

(iii) Maximum capacity

(i) Energy efficiency percentageFor 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

(iii) Input and output property not included

(D) Systems using biomassIf 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—

(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.

(4) Qualified small wind energy property

(A) In general

(B) Qualifying small wind turbine

(5) Waste energy recovery property

(A) In general

(B) Capacity limitation

(D) Termination

(6) Energy storage technology

(A) In generalThe term “energy storage technology” means—

(i) property (other than property primarily used in the transportation of goods or individuals and not for the production of electricity) which receives, stores, and delivers energy for conversion to electricity (or, in the case of hydrogen, which stores energy), and has a nameplate capacity of not less than 5 kilowatt hours, and

(ii) thermal energy storage property.

(B) Modifications of certain propertyIn the case of any property which either—

(i) was placed in service before the date of enactment of this section 1

1 See References in Text note below.

and would be described in subparagraph (A)(i), except that such property has a capacity of less than 5 kilowatt hours and is modified in a manner that such property (after such modification) has a nameplate capacity of not less than 5 kilowatt hours, or

(ii) is described in subparagraph (A)(i) and is modified in a manner that such property (after such modification) has an increase in nameplate capacity of not less than 5 kilowatt hours,

such property shall be treated as described in subparagraph (A)(i) except that the basis of any existing property prior to such modification shall not be taken into account for purposes of this section. In the case of any property to which this subparagraph applies, subparagraph (D) shall be applied by substituting “modification” for “construction”.

(i) In generalSubject to clause (ii), for purposes of this paragraph, the term “thermal energy storage property” means property comprising a system which—(I) is directly connected to a heating, ventilation, or air conditioning system,(II) removes heat from, or adds heat to, a storage medium for subsequent use, and(III) provides energy for the heating or cooling of the interior of a residential or commercial building.

(ii) ExclusionThe term “thermal energy storage property” shall not include—(I) a swimming pool,(II) combined heat and power system property, or(III) a building or its structural components.

(D) Termination

(7) Qualified biogas property

(A) In generalThe term “qualified biogas property” means property comprising a system which—

(i) converts biomass (as defined in section 45K(c)(3), as in effect on the date of enactment of this paragraph) into a gas which—(I) consists of not less than 52 percent methane by volume, or(II) is concentrated by such system into a gas which consists of not less than 52 percent methane, and

(ii) captures such gas for sale or productive use, and not for disposal via combustion.

(B) Inclusion of cleaning and conditioning property

(8) Microgrid controller

(A) In generalThe term “microgrid controller” means equipment which is—

(i) part of a qualified microgrid, and

(ii) designed and used to monitor and control the energy resources and loads on such microgrid.

(B) Qualified microgridThe term “qualified microgrid” means an electrical system which—

(i) includes equipment which is capable of generating not less than 4 kilowatts and not greater than 20 megawatts of electricity,

(ii) is capable of operating—(I) in connection with the electrical grid and as a single controllable entity with respect to such grid, and(II) independently (and disconnected) from such grid, and

(iii) is not part of a bulk-power system (as defined in section 215 of the Federal Power Act (16 U.S.C. 824o)).

(d) Coordination with Department of Treasury grantsIn the case of any property with respect to which the Secretary makes a grant under section 1603 of the American Recovery and Reinvestment Tax Act of 2009—

(1) Denial of production and investment credits

(2) Recapture of credits for progress expenditures made before grantIf a credit was determined under this section with respect to such property for any taxable year ending before such grant is made—

(A) the tax imposed under subtitle A on the taxpayer for the taxable year in which such grant is made shall be increased by so much of such credit as was allowed under section 38,

(B) the general business carryforwards under section 39 shall be adjusted so as to recapture the portion of such credit which was not so allowed, and

(C) the amount of such grant shall be determined without regard to any reduction in the basis of such property by reason of such credit.

(3) Treatment of grantsAny such grant—

(A) shall not be includible in the gross income or alternative minimum taxable income of the taxpayer, but

(B) shall be taken into account in determining the basis of the property to which such grant relates, except that the basis of such property shall be reduced under section 50(c) in the same manner as a credit allowed under subsection (a).

(e) Special rules for certain solar and wind facilities placed in service in connection with low-income communities

(1) In generalIn the case of any qualified solar and wind facility with respect to which the Secretary makes an allocation of environmental justice solar and wind capacity limitation under paragraph (4)—

(A) the energy percentage otherwise determined under paragraph (2) or (5) of subsection (a) with respect to any eligible property which is part of such facility shall be increased by—

(i) in the case of a facility described in subclause (I) of paragraph (2)(A)(iii) and not described in subclause (II) of such paragraph, 10 percentage points, and

(ii) in the case of a facility described in subclause (II) of paragraph (2)(A)(iii), 20 percentage points, and

(B) the increase in the credit determined under subsection (a) by reason of this subsection for any taxable year with respect to all property which is part of such facility shall not exceed the amount which bears the same ratio to the amount of such increase (determined without regard to this subparagraph) as—

(i) the environmental justice solar and wind capacity limitation allocated to such facility, bears to

(ii) the total megawatt nameplate capacity of such facility, as measured in direct current.

(2) Qualified solar and wind facilityFor purposes of this subsection—

(A) In generalThe term “qualified solar and wind facility” means any facility—

(i) which generates electricity solely from property described in section 45(d)(1) or in clause (i) or (vi) of subsection (a)(3)(A),

(ii) which has a maximum net output of less than 5 megawatts (as measured in alternating current), and

(iii) which—(I) is located in a low-income community (as defined in section 45D(e)) or on Indian land (as defined in section 2601(2) of the Energy Policy Act of 1992 (25 U.S.C. 3501(2))), or(II) is part of a qualified low-income residential building project or a qualified low-income economic benefit project.

(B) Qualified low-income residential building projectA facility shall be treated as part of a qualified low-income residential building project if—

(i) such facility is installed on a residential rental building which participates in a covered housing program (as defined in section 41411(a) of the Violence Against Women Act of 1994 (34 U.S.C. 12491(a)(3)),2

2 So in original. Another closing parenthesis probably should precede the comma.

a housing assistance program administered by the Department of Agriculture under title V of the Housing Act of 1949, a housing program administered by a tribally designated housing entity (as defined in section 4(22) of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4103(22))) or such other affordable housing programs as the Secretary may provide, and

(ii) the financial benefits of the electricity produced by such facility are allocated equitably among the occupants of the dwelling units of such building.

(C) Qualified low-income economic benefit projectA facility shall be treated as part of a qualified low-income economic benefit project if at least 50 percent of the financial benefits of the electricity produced by such facility are provided to households with income of—

(i) less than 200 percent of the poverty line (as defined in section 36B(d)(3)(A)) applicable to a family of the size involved, or

(ii) less than 80 percent of area median gross income (as determined under section 142(d)(2)(B)).

(D) Financial benefit

(3) Eligible propertyFor purposes of this section, the term “eligible property” means energy property which—

(A) is part of a facility described in section 45(d)(1) for which an election was made under subsection (a)(5), or

(B) is described in clause (i) or (vi) of subsection (a)(3)(A),

including energy storage technology (as described in subsection (a)(3)(A)(ix)) installed in connection with such energy property.

(4) Allocations

(A) In general

(B) Limitation

(D) Carryover of unused limitation

(E) Placed in service deadline

(i) In general

(ii) Application of carryover

(5) Recapture

(Added Pub. L. 87–834, § 2(b), Oct. 16, 1962, 76 Stat. 967; amended Pub. L. 88–272, title II, § 203(a)(1), (3)(A), (b), (c), Feb. 26, 1964, 78 Stat. 33, 34; Pub. L. 89–800, § 1 Nov. 8, 1966, 80 Stat. 1508; Pub. L. 89–809, title II, § 201(a), Nov. 13, 1966, 80 Stat. 1575; Pub. L. 90–26, §§ 1, 2(a), 3, June 13, 1967, 81 Stat. 57, 58; Pub. L. 91–172, title I, § 121(d)(2)(A), title IV, § 401(e)(2)–(4), Dec. 30, 1969, 83 Stat. 547, 603; Pub. L. 92–178, title I, §§ 102(a)(2), 103, 104(a)(1), (b)–(f)(1), (g), 108(b), (c), Dec. 10, 1971, 85 Stat. 499–502, 507; Pub. L. 94–12, title III, §§ 301(c)(1), 302(c)(3), title VI, § 604(a), Mar. 29, 1975, 89 Stat. 38, 44, 65; Pub. L. 94–455, title VIII, §§ 802(b)(6), 804(a), title X, § 1051(h)(1), title XIX, §§ 1901(a)(5), (b)(11)(A), 1906(b)(13)(A), title XXI, § 2112(a)(1), Oct. 4, 1976, 90 Stat. 1583, 1591, 1647, 1764, 1795, 1834, 1905; Pub. L. 95–473, § 2(a)(2)(A), Oct. 17, 1978, 92 Stat. 1464; Pub. L. 95–600, title I, § 141(b), title III, §§ 312(c)(1)–(3), 314(a), (b), 315(a)–(c), title VII, § 703(a)(3), (4), Nov. 6, 1978, 92 Stat. 2791, 2826–2829, 2939; Pub. L. 95–618, title III, § 301(b), (d)(1), (2), Nov. 9, 1978, 92 Stat. 3195, 3199, 3200; Pub. L. 96–222, title I, §§ 101(a)(7)(G), (H), (L)(i)(I)–(IV), (ii)(III)–(VI), (iii)(II), (III), (v)(II)–(V), (M)(ii), (iii), 103(a)(2)(A), (4)(B), 108(c)(6), Apr. 1, 1980, 94 Stat. 198–201, 208, 209, 228; Pub. L. 96–223, title II, §§ 221(b), 222(a)–(e)(1), (f)–(i), 223(a)(1), (c)(1), Apr. 2, 1980, 94 Stat. 261–266; Pub. L. 96–451, title III, § 302(a),

§ 48A. Qualifying advanced coal project credit

(a) In generalFor purposes of section 46, the qualifying advanced coal project credit for any taxable year is an amount equal to—

(1) 20 percent of the qualified investment for such taxable year in the case of projects described in subsection (d)(3)(B)(i),

(2) 15 percent of the qualified investment for such taxable year in the case of projects described in subsection (d)(3)(B)(ii), and

(3) 30 percent of the qualified investment for such taxable year in the case of projects described in clause (iii) of subsection (d)(3)(B).

(span) Qualified investment

(1) In generalFor purposes of subsection (a), the qualified investment for any taxable year is the basis of eligible property placed in service by the taxpayer during such taxable year which is part of a qualifying advanced coal project—

(A)

(i) the construction, reconstruction, or erection of which is completed by the taxpayer, or

(ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer, and

(B) with respect to which depreciation (or amortization in lieu of depreciation) is allowable.

(2) Special rule for certain subsidized property

(3) Certain qualified progress expenditures rules made applicable

(1) Qualifying advanced coal project

(2) Advanced coal-based generation technology

(3) Eligible propertyThe term “eligible property” means—

(A) in the case of any qualifying advanced coal project using an integrated gasification combined cycle, any property which is a part of such project and is necessary for the gasification of coal, including any coal handling and gas separation equipment, and

(B) in the case of any other qualifying advanced coal project, any property which is a part of such project.

(4) Coal

(5) Greenhouse gas capture capability

(6) Electric generation unit

(7) Integrated gasification combined cycle

(d) Qualifying advanced coal project program

(1) Establishment

(2) Certification

(A) Application periodEach applicant for certification under this paragraph shall submit an application meeting the requirements of subparagraph (B). An applicant may only submit an application—

(i) for an allocation from the dollar amount specified in clause (i) or (ii) of paragraph (3)(B) during the 3-year period beginning on the date the Secretary establishes the program under paragraph (1), and

(ii) for an allocation from the dollar amount specified in paragraph (3)(B)(iii) during the 3-year period beginning at the earlier of the termination of the period described in clause (i) or the date prescribed by the Secretary.

(B) Requirements for applications for certification

(D) Time to meet criteria for certification

(E) Period of issuance

(3) Aggregate credits

(A) In general

(B) Particular projectsOf the dollar amount in subparagraph (A), the Secretary is authorized to certify—

(i) $800,000,000 for integrated gasification combined cycle projects the application for which is submitted during the period described in paragraph (2)(A)(i),

(ii) $500,000,000 for projects which use other advanced coal-based generation technologies the application for which is submitted during the period described in paragraph (2)(A)(i), and

(iii) $1,250,000,000 for advanced coal-based generation technology projects the application for which is submitted during the period described in paragraph (2)(A)(ii).

(4) Review and redistribution

(A) Review

(B) RedistributionThe Secretary may reallocate credits available under clauses (i) and (ii) of paragraph (3)(B) if the Secretary determines that—

(i) there is an insufficient quantity of qualifying applications for certification pending at the time of the review, or

(ii) any certification made pursuant to paragraph (2) has been revoked pursuant to paragraph (2)(D) because the project subject to the certification has been delayed as a result of third party opposition or litigation to the proposed project.

(5) Disclosure of allocations

(e) Qualifying advanced coal projects

(1) RequirementsFor purposes of subsection (c)(1), a project shall be considered a qualifying advanced coal project that the Secretary may certify under subsection (d)(2) if the Secretary determines that, at a minimum—

(A) the project uses an advanced coal-based generation technology—

(i) to power a new electric generation unit; or

(ii) to retrofit or repower an existing electric generation unit (including an existing natural gas-fired combined cycle unit);

(B) the fuel input for the project, when completed, is at least 75 percent coal;

(C) the project, consisting of one or more electric generation units at one site, will have a total nameplate generating capacity of at least 400 megawatts;

(D) the applicant provides evidence that a majority of the output of the project is reasonably expected to be acquired or utilized;

(E) the applicant provides evidence of ownership or control of a site of sufficient size to allow the proposed project to be constructed and to operate on a long-term basis;

(F) the project will be located in the United States; and

(G) in the case of any project the application for which is submitted during the period described in subsection (d)(2)(A)(ii), the project includes equipment which separates and sequesters at least 65 percent (70 percent in the case of an application for reallocated credits under subsection (d)(4)) of such project’s total carbon dioxide emissions.

(2) Requirements for certificationFor the purpose of subsection (d)(2)(D), a project shall be eligible for certification only if the Secretary determines that—

(A) the applicant for certification has received all Federal and State environmental authorizations or reviews necessary to commence construction of the project; and

(B) the applicant for certification, except in the case of a retrofit or repower of an existing electric generation unit, has purchased or entered into a binding contract for the purchase of the main steam turbine or turbines for the project, except that such contract may be contingent upon receipt of a certification under subsection (d)(2).

(3) Priority for certain projectsIn determining which qualifying advanced coal projects to certify under subsection (d)(2), the Secretary shall—

(A) certify capacity, in accordance with the procedures set forth in subsection (d), in relatively equal amounts to—

(i) projects using bituminous coal as a primary feedstock,

(ii) projects using subbituminous coal as a primary feedstock, and

(iii) projects using lignite as a primary feedstock,

(B) give high priority to projects which include, as determined by the Secretary—

(i) greenhouse gas capture capability,

(ii) increased by-product utilization,

(iii) applicant participants who have a research partnership with an eligible educational institution (as defined in section 529(e)(5)), and

(iv) other benefits, and

(C) give highest priority to projects with the greatest separation and sequestration percentage of total carbon dioxide emissions.

(f) Advanced coal-based generation technology

(1) In generalFor the purpose of this section, an electric generation unit uses advanced coal-based generation technology if—

(A) the unit—

(i) uses integrated gasification combined cycle technology, or

(ii) except as provided in paragraph (3), has a design net heat rate of 8530 Btu/kWh (40 percent efficiency), and

(B) the unit is designed to meet the performance requirements in the following table:

Performance characteristic:	Design level for project:
SO2 (percent removal)	99 percent
NOx (emissions)	0.07 lbs/MMBTU

For purposes of the performance requirement specified for the removal of SO2 in the table contained in subparagraph (B), the SO2 removal design level in the case of a unit designed for the use of feedstock substantially all of which is subbituminous coal shall be 99 percent SO2 removal or the achievement of an emission level of 0.04 pounds or less of SO2 per million Btu, determined on a 30-day average.

(2) Design net heat rateFor purposes of this subsection, design net heat rate with respect to an electric generation unit shall—

(A) be measured in Btu per kilowatt hour (higher heating value),

(B) be based on the design annual heat input to the unit and the rated net electrical power, fuels, and chemicals output of the unit (determined without regard to the cogeneration of steam by the unit),

(i) if the heat span is less than 13,500 Btu per pound, but greater than 7,000 Btu per pound, according to the following formula: design net heat rate = unit net heat rate x [1–[((13,500-design coal heat span, Btu per pound)/1,000)* 0.013]], and

(ii) if the heat span is less than or equal to 7,000 Btu per pound, according to the following formula: design net heat rate = unit net heat rate x [1–[((13,500-design coal heat span, Btu per pound)/1,000)* 0.018]], and

(D) be corrected for the site reference conditions of—

(i) elevation above sea level of 500 feet,

(ii) air pressure of 14.4 pounds per square inch absolute,

(iii) temperature, dry bulspan of 63°F,

(iv) temperature, wet bulspan of 54°F, and

(v) relative humidity of 55 percent.

(3) Existing unitsIn the case of any electric generation unit in existence on the date of the enactment of this section, such unit uses advanced coal-based generation technology if, in lieu of the requirements under paragraph (1)(A)(ii), such unit achieves a minimum efficiency of 35 percent and an overall thermal design efficiency improvement, compared to the efficiency of the unit as operated, of not less than—

(A) 7 percentage points for coal of more than 9,000 Btu,

(B) 6 percentage points for coal of 7,000 to 9,000 Btu, or

(g) ApplicabilityNo use of technology (or level of emission reduction solely by reason of the use of the technology), and no achievement of any emission reduction by the demonstration of any technology or performance level, by or at one or more facilities with respect to which a credit is allowed under this section, shall be considered to indicate that the technology or performance level is—

(1) adequately demonstrated for purposes of section 111 of the Clean Air Act (42 U.S.C. 7411);

(2) achievable for purposes of section 169 of that Act (42 U.S.C. 7479); or

(3) achievable in practice for purposes of section 171 of such Act (42 U.S.C. 7501).

(h) Competitive certification awards modification authorityIn implementing this section or section 48B, the Secretary is directed to modify the terms of any competitive certification award and any associated closing agreement where such modification—

(1) is consistent with the objectives of such section,

(2) is requested by the recipient of the competitive certification award, and

(3) involves moving the project site to improve the potential to capture and sequester carbon dioxide emissions, reduce costs of transporting feedstock, and serve a broader customer base,

unless the Secretary determines that the dollar amount of tax credits available to the taxpayer under such section would increase as a result of the modification or such modification would result in such project not being originally certified. In considering any such modification, the Secretary shall consult with other relevant Federal agencies, including the Department of Energy.

(i) Recapture of credit for failure to sequester

(Added Puspan. L. 109–58, title XIII, § 1307(span), Aug. 8, 2005, 119 Stat. 999; amended Puspan. L. 109–432, div. A, title II, § 203(a), Dec. 20, 2006, 120 Stat. 2945; Puspan. L. 110–172, § 11(a)(10), Dec. 29, 2007, 121 Stat. 2485; Puspan. L. 110–234, title XV, § 15346(a), May 22, 2008, 122 Stat. 1523; Puspan. L. 110–246, § 4(a), title XV, § 15346(a), June 18, 2008, 122 Stat. 1664, 2285; Puspan. L. 110–343, div. B, title I, § 111(a)–(d), Oct. 3, 2008, 122 Stat. 3822, 3823; Puspan. L. 111–5, div. B, title I, § 1103(span)(2)(C), Fespan. 17, 2009, 123 Stat. 321.)

§ 48B. Qualifying gasification project credit

(a) In general

(b) Qualified investment

(1) In general

For purposes of subsection (a), the qualified investment for any taxable year is the basis of eligible property placed in service by the taxpayer during such taxable year which is part of a qualifying gasification project—

(A)

(i) the construction, reconstruction, or erection of which is completed by the taxpayer, or

(ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer, and

(B) with respect to which depreciation (or amortization in lieu of depreciation) is allowable.

(2) Special rule for certain subsidized property

(3) Certain qualified progress expenditures rules made applicable

For purposes of this section—

(1) Qualifying gasification project

The term “qualifying gasification project” means any project which—

(A) employs gasification technology,

(B) will be carried out by an eligible entity, and

(C) any portion of the qualified investment of which is certified under the qualifying gasification program as eligible for credit under this section in an amount (not to exceed $650,000,000) determined by the Secretary.

(2) Gasification technology

(3) Eligible property

(4) Biomass

(A) In general

The term “biomass” means any—

(i) agricultural or plant waste,

(ii) byproduct of wood or paper mill operations, including lignin in spent pulping liquors, and

(iii) other products of forestry maintenance.

(B) Exclusion

(5) Carbon capture capability

(6) Coal

(7) Eligible entity

The term “eligible entity” means any person whose application for certification is principally intended for use in a domestic project which employs domestic gasification applications related to—

(A) chemicals,

(B) fertilizers,

(D) steel,

(E) petroleum residues,

(F) forest products,

(G) agriculture, including feedlots and dairy operations, and

(H) transportation grade liquid fuels.

(8) Petroleum residue

(d) Qualifying gasification project program

(1) In general

Not later than 180 days after the date of the enactment of this section, the Secretary, in consultation with the Secretary of Energy, shall establish a qualifying gasification project program to consider and award certifications for qualified investment eligible for credits under this section to qualifying gasification project sponsors under this section. The total amounts of credit that may be allocated under the program shall not exceed—

(A) $350,000,000, plus

(B) $250,000,000 for qualifying gasification projects that include equipment which separates and sequesters at least 75 percent of such project’s total carbon dioxide emissions.

(2) Period of issuance

(3) Selection criteria

The Secretary shall not make a competitive certification award for qualified investment for credit eligibility under this section unless the recipient has documented to the satisfaction of the Secretary that—

(A) the award recipient is financially viable without the receipt of additional Federal funding associated with the proposed project,

(B) the recipient will provide sufficient information to the Secretary for the Secretary to ensure that the qualified investment is spent efficiently and effectively,

(C) a market exists for the products of the proposed project as evidenced by contracts or written statements of intent from potential customers,

(D) the fuels identified with respect to the gasification technology for such project will comprise at least 90 percent of the fuels required by the project for the production of chemical feedstocks, liquid transportation fuels, or coproduction of electricity,

(E) the award recipient’s project team is competent in the construction and operation of the gasification technology proposed, with preference given to those recipients with experience which demonstrates successful and reliable operations of the technology on domestic fuels so identified, and

(F) the award recipient has met other criteria established and published by the Secretary.

(4) Selection priorities

In determining which qualifying gasification projects to certify under this section, the Secretary shall—

(A) give highest priority to projects with the greatest separation and sequestration percentage of total carbon dioxide emissions, and

(B) give high priority to applicant participants who have a research partnership with an eligible educational institution (as defined in section 529(e)(5)).

(e) Denial of double benefit

(f) Recapture of credit for failure to sequester

(Added Pub. L. 109–58, title XIII, § 1307(b), Aug. 8, 2005, 119 Stat. 1004; amended Pub. L. 110–343, div. B, title I, § 112(a)–(e), Oct. 3, 2008, 122 Stat. 3824; Pub. L. 111–5, div. B, title I, § 1103(b)(2)(D), Feb. 17, 2009, 123 Stat. 321.)

§ 48C. Qualifying advanced energy project credit

(a) In general

(b) Qualified investment

(1) In general

(2) Certain qualified progress expenditures rules made applicable

(3) Limitation

(1) Qualifying advanced energy project

(A) In generalThe term “qualifying advanced energy project” means a project, any portion of the qualified investment of which is certified by the Secretary under subsection (e) as eligible for a credit under this section—

(i) which re-equips, expands, or establishes an industrial or manufacturing facility for the production or recycling of—(I) property designed to be used to produce energy from the sun, water, wind, geothermal deposits (within the meaning of section 613(e)(2)), or other renewable resources,(II) fuel cells, microturbines, or energy storage systems and components,(III) electric grid modernization equipment or components,(IV) property designed to capture, remove, use, or sequester carbon oxide emissions,(V) equipment designed to refine, electrolyze, or blend any fuel, chemical, or product which is—(aa) renewable, or(bb) low-carbon and low-emission,(VI) property designed to produce energy conservation technologies (including residential, commercial, and industrial applications),(VII) light-, medium-, or heavy-duty electric or fuel cell vehicles, as well as—(aa) technologies, components, or materials for such vehicles, and(bb) associated charging or refueling infrastructure,(VIII) hybrid vehicles with a gross vehicle weight rating of not less than 14,000 pounds, as well as technologies, components, or materials for such vehicles, or(IX) other advanced energy property designed to reduce greenhouse gas emissions as may be determined by the Secretary,

(ii) which re-equips an industrial or manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least 20 percent through the installation of—(I) low- or zero-carbon process heat systems,(II) carbon capture, transport, utilization and storage systems,(III) energy efficiency and reduction in waste from industrial processes, or(IV) any other industrial technology designed to reduce greenhouse gas emissions, as determined by the Secretary, or

(iii) which re-equips, expands, or establishes an industrial facility for the processing, refining, or recycling of critical materials (as defined in section 7002(a) of the Energy Act of 2020 (30 U.S.C. 1606(a)) 1

1 So in original. Probably should be followed by a closing parenthesis.

(B) Exception

(2) Eligible propertyThe term “eligible property” means any property—

(A) which is necessary for—

(i) the production or recycling of property described in clause (i) of paragraph (1)(A),

(ii) re-equipping an industrial or manufacturing facility described in clause (ii) of such paragraph, or

(iii) re-equipping, expanding, or establishing an industrial facility described in clause (iii) of such paragraph,

(B) which is—

(i) tangible personal property, or

(ii) other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified investment credit facility, and

(d) Qualifying advanced energy project program

(1) Establishment

(A) In general

(B) Limitation

(2) Certification

(A) Application period

(B) Time to meet criteria for certification

(3) Selection criteriaIn determining which qualifying advanced energy projects to certify under this section, the Secretary—

(A) shall take into consideration only those projects where there is a reasonable expectation of commercial viability, and

(B) shall take into consideration which projects—

(i) will provide the greatest domestic job creation (both direct and indirect) during the credit period,

(ii) will provide the greatest net impact in avoiding or reducing air pollutants or anthropogenic emissions of greenhouse gases,

(iii) have the greatest potential for technological innovation and commercial deployment,

(iv) have the lowest levelized cost of generated or stored energy, or of measured reduction in energy consumption or greenhouse gas emission (based on costs of the full supply chain), and

(v) have the shortest project time from certification to completion.

(4) Review and redistribution

(A) Review

(B) Redistribution

(i) there is an insufficient quantity of qualifying applications for certification pending at the time of the review, or

(ii) any certification made pursuant to paragraph (2) has been revoked pursuant to paragraph (2)(B) because the project subject to the certification has been delayed as a result of third party opposition or litigation to the proposed project.

(5) Disclosure of allocations

(e) Additional allocations

(1) In general

(2) LimitationThe total amount of credits which may be allocated under the program established under paragraph (1) shall not exceed $10,000,000,000, of which not greater than $6,000,000,000 may be allocated to qualified investments which are not located within a census tract which—

(A) is described in clause (iii) of section 45(b)(11)(B), and

(B) prior to the date of enactment of this subsection, had no project which received a certification and allocation of credits under subsection (d).

(3) Certifications

(A) Application requirement

(B) Time to meet criteria for certification

(D) Location of project

(4) Credit rate conditioned upon wage and apprenticeship requirements

(A) Base rate

(B) Alternative rate

(5) Prevailing wage requirements

(A) In general

(B) Correction and penalty related to failure to satisfy wage requirements

(6) Apprenticeship requirements

(7) Disclosure of allocations

(f) Denial of double benefit

(Added Pub. L. 111–5, div. B, title I, § 1302(b), Feb. 17, 2009, 123 Stat. 345; amended Pub. L. 113–295, div. A, title II, §§ 209(g), 221(a)(2)(C), Dec. 19, 2014, 128 Stat. 4029, 4037; Pub. L. 117–169, title I, § 13501(a)–(d), Aug. 16, 2022, 136 Stat. 1969–1971.)

§ 48D. Advanced manufacturing investment credit

(a) Establishment of credit

(b) Qualified investment

(1) In general

(2) Qualified property

(A) In generalFor purposes of this subsection, the term “qualified property” means property—

(i) which is tangible property,

(ii) with respect to which depreciation (or amortization in lieu of depreciation) is allowable,

(iii) which is—(I) constructed, reconstructed, or erected by the taxpayer, or(II) acquired by the taxpayer if the original use of such property commences with the taxpayer, and

(iv) which is integral to the operation of the advanced manufacturing facility.

(B) Buildings and structural components

(i) In general

(ii) Exception

(3) Advanced manufacturing facility

(4) Coordination with rehabilitation credit

(5) Certain progress expenditure rules made applicable

(1) is not a foreign entity of concern (as defined in section 9901(6) 1

1 See References in Text note below.

of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021), and

(2) has not made an applicable transaction (as defined in section 50(a)) during the taxable year.

(d) Elective payment

(1) In general

(2) Special rulesFor purposes of this subsection—

(A) Application to partnerships and s corporations

(i) In generalIn the case of the credit determined under subsection (a) with respect to any property held directly by a partnership or S corporation, any election under paragraph (1) shall be made by such partnership or S corporation. If such partnership or S corporation makes an election under such paragraph (in such manner as the Secretary may provide) with respect to such credit—(I) the Secretary shall make a payment to such partnership or S corporation equal to the amount of such credit,(II) paragraph (3) shall be applied with respect to such credit before determining any partner’s distributive share, or shareholder’s pro rata share, of such credit,(III) any amount with respect to which the election in paragraph (1) is made shall be treated as tax exempt income for purposes of sections 705 and 1366, and(IV) a partner’s distributive share of such tax exempt income shall be based on such partner’s distributive share of the otherwise applicable credit for each taxable year.

(ii) Coordination with application at partner or shareholder level

(B) Elections

(D) Treatment of payments to partnerships and s corporations

(E) Additional information

(F) Excessive payment

(i) In generalIn the case of any amount treated as a payment which is made by the taxpayer under paragraph (1), or any payment made pursuant to subparagraph (A), which the Secretary determines constitutes an excessive payment, the tax imposed on such taxpayer by chapter 1 for the taxable year in which such determination is made shall be increased by an amount equal to the sum of—(I) the amount of such excessive payment, plus(II) an amount equal to 20 percent of such excessive payment.

(ii) Reasonable cause

(iii) Excessive payment definedFor purposes of this subparagraph, the term “excessive payment” means, with respect to property for which an election is made under this subsection for any taxable year, an amount equal to the excess of—(I) the amount treated as a payment which is made by the taxpayer under paragraph (1), or the amount of the payment made pursuant to subparagraph (A), with respect to such property for such taxable year, over(II) the amount of the credit which, without application of this subsection, would be otherwise allowable (determined without regard to section 38(c)) under subsection (a) with respect to such property for such taxable year.

(3) Denial of double benefit

(4) Mirror code possessions

(5) Basis reduction and recaptureRules similar to the rules of subsections (a) and (c) of section 50 shall apply with respect to—

(A) any amount treated as a payment which is made by the taxpayer under paragraph (1), and

(B) any payment made pursuant to paragraph (2)(A).

(6) RegulationsThe Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this subsection, including—

(A) regulations or other guidance providing rules for determining a partner’s distributive share of the tax exempt income described in paragraph (2)(A)(i)(III), and

(B) guidance to ensure that the amount of the payment or deemed payment made under this subsection is commensurate with the amount of the credit that would be otherwise allowable (determined without regard to section 38(c)).

(e) Termination of credit

(Added Pub. L. 117–167, div. A, § 107(a), Aug. 9, 2022, 136 Stat. 1393.)

§ 48E. Clean electricity investment credit

(a) Investment credit for qualified property

(1) In generalFor purposes of section 46, the clean electricity investment credit for any taxable year is an amount equal to the applicable percentage of the qualified investment for such taxable year with respect to—

(A) any qualified facility, and

(B) any energy storage technology.

(2) Applicable percentage

(A) Qualified facilitiesSubject to paragraph (3)—

(i) Base rate

(ii) Alternative rateIn the case of any qualified facility—(I) with a maximum net output of less than 1 megawatt (as measured in alternating current),(II) the construction of which begins prior to the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (3) and (4) of subsection (d), or(III) which—(aa) satisfies the requirements of subsection (d)(3), and(bb) with respect to the construction of such facility, satisfies the requirements of subsection (d)(4),

the applicable percentage shall be 30 percent.

(B) Energy storage technologySubject to paragraph (3)—

(i) Base rate

(ii) Alternative rateIn the case of any energy storage technology—(I) with a capacity of less than 1 megawatt,(II) the construction of which begins prior to the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (3) and (4) of subsection (d), or(III) which—(aa) satisfies the requirements of subsection (d)(3), and(bb) with respect to the construction of such property, satisfies the requirements of subsection (d)(4),

the applicable percentage shall be 30 percent.

(3) Increase in credit rate in certain cases

(A) Energy communities

(i) In general

(ii) Applicable credit rate increaseFor purposes of clause (i), the applicable credit rate increase shall be an amount equal to—(I) in the case of any qualified investment with respect to a qualified facility described in paragraph (2)(A)(i) or with respect to energy storage technology described in paragraph (2)(B)(i), 2 percentage points, and(II) in the case of any qualified investment with respect to a qualified facility described in paragraph (2)(A)(ii) or with respect to energy storage technology described in paragraph (2)(B)(ii), 10 percentage points.

(B) Domestic span

(b) Qualified investment with respect to a qualified facility

(1) In generalFor purposes of subsection (a), the qualified investment with respect to any qualified facility for any taxable year is the sum of—

(A) the basis of any qualified property placed in service by the taxpayer during such taxable year which is part of a qualified facility, plus

(B) the amount of any expenditures which are—

(i) paid or incurred by the taxpayer for qualified interconnection property—(I) in connection with a qualified facility which has a maximum net output of not greater than 5 megawatts (as measured in alternating current), and(II) placed in service during the taxable year of the taxpayer, and

(ii) properly chargeable to capital account of the taxpayer.

(2) Qualified propertyFor purposes of this section, the term “qualified property” means property—

(A) which is—

(i) tangible personal property, or

(ii) other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified facility,

(B) with respect to which depreciation (or amortization in lieu of depreciation) is allowable, and

(C)

(i) the construction, reconstruction, or erection of which is completed by the taxpayer, or

(ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer.

(3) Qualified facility

(A) In generalFor purposes of this section, the term “qualified facility” means a facility—

(i) which is used for the generation of electricity,

(ii) which is placed in service after December 31, 2024, and

(iii) for which the anticipated greenhouse gas emissions rate (as determined under subparagraph (B)(ii)) is not greater than zero.

(B) Additional rules

(i) Expansion of facility; incremental production

(ii) Greenhouse gas emissions rate

(i) a renewable electricity production credit determined under section 45,

(ii) an advanced nuclear power facility production credit determined under section 45J,

(iii) a carbon oxide sequestration credit determined under section 45Q,

(iv) a zero-emission nuclear power production credit determined under section 45U,

(v) a clean electricity production credit determined under section 45Y,

(vi) an energy credit determined under section 48, or

(vii) a qualifying advanced coal project credit under section 48A,

is allowed under section 38 for the taxable year or any prior taxable year.

(4) Qualified interconnection property

(5) Coordination with rehabilitation credit

(6) Definitions

(1) Qualified investment

(2) Energy storage technology

(d) Special rules

(1) Certain progress expenditure rules made applicable

(2) Special rule for property financed by subsidized energy financing or private activity bonds

(3) Prevailing wage requirements

(4) Apprenticeship requirements

(5) Domestic span requirement for elective payment

(e) Credit phase-out

(1) In generalThe amount of the clean electricity investment credit under subsection (a) for any qualified investment with respect to any qualified facility or energy storage technology the construction of which begins during a calendar year described in paragraph (2) shall be equal to the product of—

(A) the amount of the credit determined under subsection (a) without regard to this subsection, multiplied by

(B) the phase-out percentage under paragraph (2).

(2) Phase-out percentageThe phase-out percentage under this paragraph is equal to—

(A) for any qualified investment with respect to any qualified facility or energy storage technology the construction of which begins during the first calendar year following the applicable year, 100 percent,

(B) for any qualified investment with respect to any qualified facility or energy storage technology the construction of which begins during the second calendar year following the applicable year, 75 percent,

(C) for any qualified investment with respect to any qualified facility or energy storage technology the construction of which begins during the third calendar year following the applicable year, 50 percent, and

(D) for any qualified investment with respect to any qualified facility or energy storage technology the construction of which begins during any calendar year subsequent to the calendar year described in subparagraph (C), 0 percent.

(3) Applicable year

(f) Greenhouse gas

(g) Recapture of credit

(h) Special rules for certain facilities placed in service in connection with low-income communities

(1) In generalIn the case of any applicable facility with respect to which the Secretary makes an allocation of environmental justice capacity limitation under paragraph (4)—

(A) the applicable percentage otherwise determined under subsection (a)(2) with respect to any eligible property which is part of such facility shall be increased by—

(i) in the case of a facility described in subclause (I) of paragraph (2)(A)(iii) and not described in subclause (II) of such paragraph, 10 percentage points, and

(ii) in the case of a facility described in subclause (II) of paragraph (2)(A)(iii), 20 percentage points, and

(i) the environmental justice capacity limitation allocated to such facility, bears to

(ii) the total megawatt nameplate capacity of such facility, as measured in direct current.

(2) Applicable facilityFor purposes of this subsection—

(A) In generalThe term “applicable facility” means any qualified facility—

(i) which is not described in section 45Y(b)(2)(B),

(ii) which has a maximum net output of less than 5 megawatts (as measured in alternating current), and

(B) Qualified low-income residential building projectA facility shall be treated as part of a qualified low-income residential building project if—

1 So in original. Another closing parenthesis probably should precede the comma.

(ii) the financial benefits of the electricity produced by such facility are allocated equitably among the occupants of the dwelling units of such building.

(i) less than 200 percent of the poverty line (as defined in section 36B(d)(3)(A)) applicable to a family of the size involved, or

(ii) less than 80 percent of area median gross income (as determined under section 142(d)(2)(B)).

(D) Financial benefit

(3) Eligible property

(4) Allocations

(A) In general

(B) Limitation

(D) Carryover of unused limitation

(i) In general

(ii) Carryover from section 48 for calendar year 2025

(E) Placed in service deadline

(i) In general

(ii) Application of carryover

(5) Recapture

(i) Guidance

(Added Pub. L. 117–169, title I, § 13702(a), Aug. 16, 2022, 136 Stat. 1990.)

§ 49. At-risk rules

(a) General rule

(1) Certain nonrecourse financing excluded from credit base

(A) Limitation

(B) Property to which paragraph applies

This paragraph applies to any property which—

(i) is placed in service during the taxable year by a taxpayer described in section 465(a)(1), and

(ii) is used in connection with an activity with respect to which any loss is subject to limitation under section 465.

For purposes of this paragraph, the term “credit base” means—

(i) the portion of the basis of any qualified rehabilitated building attributable to qualified rehabilitation expenditures,

(ii) the basis of any energy property,

(iii) the basis of any property which is part of a qualifying advanced coal project under section 48A,

(iv) the basis of any property which is part of a qualifying gasification project under section 48B,

(v) the basis of any property which is part of a qualifying advanced energy project under section 48C, and

(vi) the basis of any qualified property (as defined in subsection (b)(2) of section 48D) which is part of an advanced manufacturing facility (as defined in subsection (b)(3) of such section).

(D) Nonqualified nonrecourse financing

(i) In general

(ii) Qualified commercial financing

For purposes of this paragraph, the term “qualified commercial financing” means any financing with respect to any property if—

(I) such property is acquired by the taxpayer from a person who is not a related person,(II) the amount of the nonrecourse financing with respect to such property does not exceed 80 percent of the credit base of such property, and(III) such financing is borrowed from a qualified person or represents a loan from any Federal, State, or local government or instrumentality thereof, or is guaranteed by any Federal, State, or local government.

Such term shall not include any convertible debt.

(iii) Nonrecourse financing

For purposes of this subparagraph, the term “nonrecourse financing” includes—

(I) any amount with respect to which the taxpayer is protected against loss through guarantees, stop-loss agreements, or other similar arrangements, and(II) except to the extent provided in regulations, any amount borrowed from a person who has an interest (other than as a creditor) in the activity in which the property is used or from a related person to a person (other than the taxpayer) having such an interest.

In the case of amounts borrowed by a corporation from a shareholder, subclause (II) shall not apply to an interest as a shareholder.

(iv) Qualified person

For purposes of this paragraph, the term “qualified person” means any person which is actively and regularly engaged in the business of lending money and which is not—

(I) a related person with respect to the taxpayer,(II) a person from which the taxpayer acquired the property (or a related person to such person), or(III) a person who receives a fee with respect to the taxpayer’s investment in the property (or a related person to such person).

(v) Related person

(E) Application to partnerships and S corporations

For purposes of this paragraph and paragraph (2)—

(i) In general

(ii) Special rule for certain recourse financing of S corporation

A shareholder of an S corporation shall be treated as liable for his allocable share of any financing provided by a qualified person to such corporation if—

(I) such financing is recourse financing (determined at the corporate level), and(II) such financing is provided with respect to qualified business property of such corporation.

(iii) Qualified business property

For purposes of clause (ii), the term “qualified business property” means any property if—

(I) such property is used by the corporation in the active conduct of a trade or business,(II) during the entire 12-month period ending on the last day of the taxable year, such corporation had at least 3 full-time employees who were not owner-employees (as defined in section 465(c)(7)(E)(i)) and substantially all the services of whom were services directly related to such trade or business, and(III) during the entire 12-month period ending on the last day of such taxable year, such corporation had at least 1 full-time employee substantially all of the services of whom were in the active management of the trade or business.

(iv) Determination of allocable share

(F) Special rules for energy property

(2) Subsequent decreases in nonqualified nonrecourse financing with respect to the property

(A) In general

(B) Certain transactions not taken into account

(i) Credit determined by reference to taxable year property placed in service

(ii) Credit allowed for year of decrease in nonqualified nonrecourse financing

(b) Increases in nonqualified nonrecourse financing

(1) In general

(2) Transfers of debt more than 1 year after initial borrowing not treated as increasing nonqualified nonrecourse financing

(3) Special rules for certain energy property

(4) Special rule

(Added Pub. L. 99–514, title II, § 211(a), Oct. 22, 1986, 100 Stat. 2166; amended Pub. L. 100–647, title I, § 1002(e)(1)–(3), (8)(B), Nov. 10, 1988, 102 Stat. 3367, 3369; Pub. L. 101–508, title XI, § 11813(a), Nov. 5, 1990, 104 Stat. 1388–543; Pub. L. 105–206, title VI, § 6004(g)(6), July 22, 1998, 112 Stat. 796; Pub. L. 109–58, title XIII, § 1307(c)(1), Aug. 8, 2005, 119 Stat. 1006; Pub. L. 111–5, div. B, title I, § 1302(c)(1), Feb. 17, 2009, 123 Stat. 347; Pub. L. 111–148, title IX, § 9023(c)(1), Mar. 23, 2010, 124 Stat. 880; Pub. L. 115–141, div. U, title IV, § 401(a)(24), (d)(3)(B)(i), Mar. 23, 2018, 132 Stat. 1185, 1209; Pub. L. 117–167, div. A, § 107(d)(2), Aug. 9, 2022, 136 Stat. 1398; Pub. L. 117–169, title I, § 13702(b)(2), Aug. 16, 2022, 136 Stat. 1997.)

§ 50. Other special rules

(a) Recapture in case of dispositions, etc.Under regulations prescribed by the Secretary—

(1) Early disposition, etc.

(A) General rule

(B) Recapture percentage

(2) Property ceases to qualify for progress expenditures

(A) In general

(B) Certain excess credit recaptured

(D) Coordination with paragraph (1)

(E) Special rules

(3) Certain expansions in connection with advanced manufacturing facilities

(A) In general

(B) Exception

(4) Carrybacks and carryovers adjusted

(5) Subsection not to apply in certain casesParagraphs (1) and (2) shall not apply to—

(A) a transfer by reason of death, or

(B) a transaction to which section 381(a) applies.

For purposes of this subsection, property shall not be treated as ceasing to be investment credit property with respect to the taxpayer by reason of a mere change in the form of conducting the trade or business so long as the property is retained in such trade or business as investment credit property and the taxpayer retains a substantial interest in such trade or business.

(6) Definitions and special rules

(A) Investment credit property

(B) Transfer between spouses or incident to divorceIn the case of any transfer described in subsection (a) of section 1041—

(i) the foregoing provisions of this subsection shall not apply, and

(ii) the same tax treatment under this subsection with respect to the transferred property shall apply to the transferee as would have applied to the transferor.

(D) Applicable transactionFor purposes of this subsection—

(i) In general

(ii) Exception

(E) Applicable taxpayer

(b) Certain property not eligibleNo credit shall be determined under this subpart with respect to—

(1) Property used outside United States

(A) In general

(B) Exceptions

(2)No credit shall be determined under this subpart with respect to any property which is used predominantly to furnish lodging or in connection with the furnishing of lodging. The preceding sentence shall not apply to—

(A) nonlodging commercial facilities which are available to persons not using the lodging facilities on the same basis as they are available to persons using the lodging facilities;

(B) property used by a hotel or motel in connection with the trade or business of furnishing lodging where the predominant portion of the accommodations is used by transients;

(C) a certified historic structure to the extent of that portion of the basis which is attributable to qualified rehabilitation expenditures; and

(D) any energy property.

(3) Property used by certain tax-exempt organization

(4) Property used by governmental units or foreign persons or entities

(A) In generalNo credit shall be determined under this subpart with respect to any property used—

(i) by the United States, any State or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing, or

(ii) by any foreign person or entity (as defined in section 168(h)(2)(C)), but only with respect to property to which section 168(h)(2)(A)(iii) applies (determined after the application of section 168(h)(2)(B)).

(B) Exception for short-term leases

(D) Special rules for partnerships, etc.

(E) Cross reference

(1) In general

(2) Certain dispositions

(3) Special ruleIn the case of any energy credit—

(A) only 50 percent of such credit shall be taken into account under paragraph (1),

(B) only 50 percent of any recapture amount attributable to such credit shall be taken into account under paragraph (2), and

(4) Recapture of reductions

(A) In general

(B) Special rule for section 1250

(5) Adjustment in basis of interest in partnership or S corporationThe adjusted basis of—

(A) a partner’s interest in a partnership, and

(B) stock in an S corporation,

shall be appropriately adjusted to take into account adjustments made under this subsection in the basis of property held by the partnership or S corporation (as the case may be).

(d) Certain rules made applicableFor purposes of this subpart, rules similar to the rules of the following provisions (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply:

(1) Section 46(e) (relating to limitations with respect to certain persons).

(2) Section 46(f) (relating to limitation in case of certain regulated companies). At the election of a taxpayer, this paragraph shall not apply to any energy storage technology (as defined in section 48(c)(6)), provided—

(A) no election under this paragraph shall be permitted if the making of such election is prohibited by a State or political subdivision thereof, by any agency or instrumentality of the United States, or by a public service or public utility commission or other similar body of any State or political subdivision that regulates public utilities as described in section 7701(a)(33)(A),

(B) an election under this paragraph shall be made separately with respect to each energy storage technology by the due date (including extensions) of the Federal tax return for the taxable year in which the energy storage technology is placed in service by the taxpayer, and once made, may be revoked only with the consent of the Secretary, and

(C) an election shall not apply with respect to any energy storage technology if such energy storage technology has a maximum capacity equal to or less than 500 kilowatt hours.

(3) Section 46(h) (relating to special rules for cooperatives).

(4) Paragraphs (2) and (3) of section 48(b) (relating to special rule for sale-leasebacks).

(5) Section 48(d) (relating to certain leased property).

(6) Section 48(f) (relating to estates and trusts).

(7) Section 48(r) (relating to certain 501(d) organizations).

Paragraphs (1)(A), (2)(A), and (4) of the section 46(e) referred to in paragraph (1) of this subsection shall not apply to any taxable year beginning after December 31, 1995. In the case of a real estate investment trust making an election under section 6418, paragraphs (1)(B) and (2)(B) of the section 46(e) referred to in paragraph (1) of this subsection shall not apply to any investment credit property of such real estate investment trust to which such election applies.

(Added Pub. L. 101–508, title XI, § 11813(a), Nov. 5, 1990, 104 Stat. 1388–546; amended Pub. L. 104–188, title I, §§ 1616(b)(1), 1702(h)(11), 1704(t)(29), Aug. 20, 1996, 110 Stat. 1856, 1874, 1889; Pub. L. 105–206, title VI, § 6004(g)(7), July 22, 1998, 112 Stat. 796; Pub. L. 108–357, title III, § 322(d)(2)(D), Oct. 22, 2004, 118 Stat. 1475; Pub. L. 109–135, title IV, § 412(o), Dec. 21, 2005, 119 Stat. 2638; Pub. L. 113–295, div. A, title II, § 220(d), Dec. 19, 2014, 128 Stat. 4036; Pub. L. 115–141, div. U, title IV, § 401(a)(25), (d)(3)(B)(ii), Mar. 23, 2018, 132 Stat. 1185, 1209; Pub. L. 117–167, div. A, § 107(b)(1)–(3)(B), (d)(3), Aug. 9, 2022, 136 Stat. 1397–1399; Pub. L. 117–169, title I, §§ 13102(f)(5), (i), 13702(b)(3), (4), 13801(c), Aug. 16, 2022, 136 Stat. 1917, 1997, 2012.)

[§§ 50A, 50B. Repealed. Pub. L. 98–369, div. A, title IV, § 474(m)(2), July 18, 1984, 98 Stat. 833]