,,ii  #aai? ,,congress  #a/ ,session    
,s4 #ceca  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,decemb] #ag1          
#bjbe,mrs4 ,blackburn introduc$ ! foll[+
 bill2 :i* 0 read twice & ref]r$ to !   
,committee on ,f9ance  ,a ,,bill  ,to   
am5d ! ,int]nal ,rev5ue ,code ( #aihf to
 e/abli% a tax cr$it = qualifi$ comb9$  
heat & p[] sy/em prop]ty1 & = o!r       
purposes4  #a4 ,tax cr$it = qualifi$    
comb9$ heat & p[] sy/em prop]ty  7a7    
,e/abli%m5t ( cr$it  7#a7 ,9 g5]al      
,subp>t ,e ( "p ,,iv ( sub*apt] ,a (    
*apt] #a ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$ by ins]t+ aft] section   
#dh;,e ! foll[+ new section3  #dh;,f4   
,cr$it = qualifi$ comb9$ heat & p[]     
sy/em prop]ty  7a7 ,cr$it = qualifi$    
comb9$ heat & p[] sy/em prop]ty  7#a7 ,9
 g5]al ,= purposes ( section #df1 except
 z provid$ 9 subsection 7c77#a77;,b71 ! 
cr$it = qualifi$ comb9$ heat & p[] sy/em
 prop]ty = any taxable ye> is an am\nt  
equal to #aj p]c5t ( ! basis ( ea*      
qualifi$ comb9$ heat & p[] sy/em prop]ty

 plac$ 9 s]vice dur+ su* taxable ye>4   
7#b7 ,coord9ation ) rehabilitation cr$it
 ,! p]c5tage specifi$ 9 p>agraph 7#a7   
%all n apply to t portion ( ! basis (   
any prop]ty :i* is attributable to      
qualifi$ rehabilitation exp5ditures 7z  
def9$ 9 section #dg7;c77#b774  7#c7     
,qualifi$ comb9$ heat & p[] sy/em       
prop]ty ,= purposes ( ?is section1 ! t]m
 qualifi$ comb9$ heat & p[] sy/em       
prop]ty means any prop]ty-- 7,a7 :i* is 
comb9$ heat & p[] sy/em prop]ty1  7,b7  
7i7 ! con/ruction1 recon/ruction1 or    
erection ( :i* is complet$ by ! taxpay]1
 or  7ii7 :i* is acquir$ by ! taxpay] if
 ! orig9al use ( su* prop]ty comm5ces ) 
! taxpay]1  7,c7 ) respect to :i*       
depreciation 7or amortization 9 lieu (  
depreciation7 is all[able1 &  7,d7 :i*  
meets ! p]=mance & quality /&>ds 7if    
any7 :i*-- 7i7 h be5 prescrib$ by !     
,secret>y by regulations 7aft]          
consultation ) ! ,secret>y ( ,en]gy71 & 
7ii7 are 9 effect at ! "t ( !           
acquisition ( ! prop]ty4  ,su* t]m %all 

n include any prop]ty :i* is "p ( a     
facility ! production f :i* is all[$ z a
 cr$it "u section #de = ! taxable ye> or
 any prior taxable ye>4  7#d7 ,special  
rule = prop]ty f9anc$ by tax-exempt     
bonds ,rules simil> to ! rule "u section
 #de7;b77#c7 %all apply = purposes ( ?is
 section4  7#e7 ,dome/ic cont5t bonus   
cr$it am\nt  7,a7 ,9 g5]al ,9 ! case (  
any en]gy project :i* satisfies !       
requirem5t "u subp>agraph 7,b71 =       
purposes ( apply+ p>agraph 7#a7 )       
respect to qualifi$ comb9$ heat & p[]   
sy/em prop]ty t is "p ( su* project1 !  
p]c5tage specifi$ 9 p>agraph 7#a7 %all  
be increas$ by #aj p]c5tage po9ts4  7,b7
 ,requirem5t ,rules simil> to ! rules ( 
section #de7;b77#i77;,b7 %all apply4    
7#f7 ,increase 9 cr$it rate = en]gy     
communities ,9 ! case ( any en]gy       
project t is plac$ 9 s]vice )9 an en]gy 
community 7z def9$ 9 section            
#de7;b77#aa77;,b71 z appli$ by sub/itut+
 en]gy project = qualifi$ facility ea*  
place x appe>s71 = purposes ( apply+    

p>agraph 7#a7 ) respect to qualifi$     
comb9$ heat & p[] sy/em prop]ty :i* is  
"p ( su* project1 ! p]c5tage specifi$ 9 
p>agraph 7#a7 %all be increas$ by #aj   
p]c5tage po9ts4  7#g7 ,regulations &    
guidance ,! ,secret>y %all issue su*    
regulations or o!r guidance z !         
,secret>y det]m9es necess>y to c>ry out 
! purposes ( ?is subsection1 includ+    
regulations or o!r guidance :i* provides
 = requirem5ts = recordkeep+ or         
in=mation report+ = purposes ( adm9i/]+ 
! requirem5ts ( ?is subsection4  7b7    
,c]ta9 progress exp5diture rules made   
applicable ,rules simil> to ! rules (   
subsections 7c77#d7 & 7d7 ( section #df 
7z 9 effect on ! day be=e ! date ( !    
enactm5t ( ! ,rev5ue ,reconciliation    
,act ( #aiij7 %all apply = purposes (   
subsection 7a74  7c7 ,def9itions ,=     
purposes ( ?is section-- 7#a7 ,comb9$   
heat & p[] sy/em prop]ty  7,a7 ,comb9$  
heat & p[] sy/em prop]ty ,! t]m comb9$  
heat & p[] sy/em prop]ty means prop]ty  
compris+ a sy/em-- 7i7 :i* uses ! same  

en]gy s\rce = ! simultane\s or sequ5tial
 g5]ation ( electrical p[]1 me*anical   
%aft p[]1 or bo?1 9 comb9ation ) !      
g5]ation ( /eam or o!r =ms ( useful     
!rmal en]gy 7includ+ heat+ & cool+      
applications71  7ii7 :i* produces-- 7,i7
 at lea/ #bj p]c5t ( its total useful   
en]gy 9 ! =m ( !rmal en]gy :i* is n us$ 
to produce electrical or me*anical p[]  
7or comb9ation !re(71 &  7,,ii7 at lea/ 
#bj p]c5t ( its total useful en]gy 9 !  
=m ( electrical or me*anical p[] 7or    
comb9ation !re(71  7iii7 ! en]gy        
effici5cy p]c5tage ( :i* exce$s #fj     
p]c5t1 &  7iv7 ! con/ruction ( :i* beg9s
 on or aft] ,janu>y #a1 #bjbe4  7,b7    
,limitation  7i7 ,9 g5]al ,9 ! case (   
comb9$ heat & p[] sy/em prop]ty ) an    
electrical capacity 9 excess ( !        
applicable capacity plac$ 9 s]vice dur+ 
! taxable ye>1 ! cr$it "u subsection    
7a77#a7 7det]m9$ )\t reg>d to ?is       
p>agraph7 = su* ye> %all be equal to !  
am\nt :i* be>s ! same ratio to su* cr$it
 z ! applicable capacity be>s to !      

capacity ( su* prop]ty4  7ii7           
,applicable capacity ,= purposes (      
clause 7i71 ! t]m applicable capacity   
means #be megawatts or a me*anical en]gy
 capacity ( m ?an #cc1ejj horsep[]1 or  
an equival5t comb9ation ( electrical &  
me*anical en]gy capacities4  7iii7      
,maximum capacity ,! t]m comb9$ heat &  
p[] sy/em prop]ty %all n include any    
prop]ty compris+ a sy/em if su* sy/em   
has a capacity 9 excess ( #ej megawatts 
or a me*anical en]gy capacity 9 excess (
 #fg1jjj horsep[]1 or an equival5t      
comb9ation ( electrical & me*anical     
en]gy capacities4  7iv7 ,cl>ification   
reg>d+ capacity det]m9ations ,= purposes
 ( ?is subp>agraph1 ! det]m9ation ( !   
electrical or me*anical en]gy capacity (
 any sy/em %all be bas$ on ! normal     
op]at+ rates ( su* sy/em4  7,c7 ,special
 rules  7i7 ,en]gy effici5cy p]c5tage ,=
 purposes ( ?is p>agraph1 ! en]gy       
effici5cy p]c5tage ( a sy/em is !       
fraction-- 7,i7 ! num]ator ( :i* is !   
total useful electrical1 !rmal1 &       

me*anical p[] produc$ by ! sy/em at     
normal op]at+ rates1 & expect$ to be    
consum$ 9 its normal application1 &     
7,,ii7 ! d5om9ator ( :i* is ! l[] heat+ 
value ( ! fuel s\rces = ! sy/em4  7ii7  
,det]m9ations made on ,btu basis ,!     
en]gy effici5cy p]c5tage & ! p]c5tages  
"u subp>agraph 7,a77ii7 %all be det]m9$ 
on a ,btu basis4  7iii7 ,input & output 
prop]ty n includ$ ,! t]m comb9$ heat &  
p[] sy/em prop]ty does n include prop]ty
 us$ to transport ! en]gy s\rce to !    
facility or to di/ribute en]gy produc$  
by ! facility4  7,d7 ,sy/ems us+ biomass
 ,if a sy/em is design$ to use biomass  
7)9 ! mean+ ( p>agraphs 7#b7 & 7#c7 (   
section #de7;c7 )\t reg>d to ! la/      
s5t5ce ( p>agraph 7#c77;,a77 = at lea/  
#ij p]c5t ( ! en]gy s\rce-- 7i7         
subp>agraph 7,a77iii7 %all n apply1 b   
7ii7 ! am\nt ( cr$it det]m9$ "u         
subsection 7a7 ) respect to su* sy/em   
%all n exce$ ! am\nt :i* be>s ! same    
ratio to su* am\nt ( cr$it 7det]m9$ )\t 
reg>d to ?is subp>agraph7 z ! en]gy     

effici5cy p]c5tage ( su* sy/em be>s to  
#fj p]c5t4  7#b7 ,en]gy project ,! t]m  
en]gy project means a project consi/+ ( 
"o or m qualifi$ comb9$ heat & p[] sy/em
 prop]ties t are "p ( a s+le project4  4
  7#b7 ,cl]ical am5dm5t ,! table (      
sections = subp>t ,e ( "p ,,iv (        
sub*apt] ,a ( *apt] #a ( su* ,code is   
am5d$ by ins]t+ aft] ! item relat+ to   
section #dh;,e ! foll[+ new item3       
#dh;,f4 ,cr$it = qualifi$ comb9$ heat & 
p[] sy/em prop]ty4  4  7b7 ,coord9ation 
) en]gy cr$it ,section #dh7;c77#c77;,b7 
( su* ,code is am5d$ by add+ at ! end ! 
foll[+ new clause3  7iv7 ,cl>ification  
reg>d+ capacity det]m9ations ,= purposes
 ( ?is subp>agraph1 ! det]m9ation ( !   
electrical or me*anical en]gy capacity (
 any sy/em %all be bas$ on ! normal     
op]at+ rates ( su* sy/em4  4  7c7       
,con=m+ am5dm5ts  7#a7 ,section         
#ch7;c77#d77;,b77x7 ( su* ,code is am5d$
 by ins]t+ or ! cr$it = qualifi$ comb9$ 
heat & p[] sy/em prop]ty det]m9$ "u     
section #dh;,f aft] section #dh4  7#b7  

,section #de,l7f7 ( su* ,code is am5d$  
by /rik+ #dg or #dh7;a7 & ins]t+ #dg1   
#dh7;a71 or #dh;,f7a74  7#c7 ,section   
#df ( su* ,code is am5d$ by /rik+ & at !
 end ( p>agraph 7#f71 by /rik+ ! p]iod  
at ! end ( p>agraph 7#g7 & ins]t+ 1 &1 &
 by add+ at ! end ! foll[+ new p>agraph3
  7#h7 ! cr$it = qualifi$ comb9$ heat & 
p[] sy/em prop]ty4  4  7#d7 ,section    
#dh;,c7f7 ( su* ,code is am5d$ by ins]t+
 #dh;,f1 aft] #dh;,e14  7#e7 ,section   
#ej7;a77#b77;,e7 ( su* ,code is am5d$ by
 /rik+ or #dh;,e7e7 & ins]t+ #dh;,e7e71 
or #dh;,f7b74  7#f7 ,section            
#ei;,a7b77#c77;,c7 ( su* ,code is am5d$ 
by ins]t+ or ! cr$it = qualifi$ comb9$  
heat & p[] sy/em prop]ty det]m9$ "u     
section #dh;,f aft] section #dh4  7d7   
,effective date  7#a7 ,9 g5]al ,except z
 o!rwise provid$ 9 ?is subsection1 !    
am5dm5ts made by ?is section %all apply 
to prop]ty ! con/ruction ( :i* beg9s    
aft] ,decemb] #ca1 #bjbd4  7#b7         
,coord9ation ) en]gy cr$it  7,a7 ,9     
g5]al ,! am5dm5t made by subsection 7b7 

%all apply to prop]ty-- 7i7 !           
con/ruction ( :i* beg9s be=e ,janu>y #a1
 #bjbe1 &  7ii7 :i* is plac$ 9 s]vice   
dur+ taxable ye>s beg9n+ aft] ,decemb]  
#ca1 #bjbd4  7,b7 ,no inf]5ce ,! am5dm5t
 made by subsection 7b7 %all n be       
con/ru$ to create any inf]5ce ) respect 
to ! prop] application ( section        
#dh7;c77#c77;,b7 ( ! ,int]nal ,rev5ue   
,code ( #aihf ) respect to taxable ye>s 
beg9n+ be=e ,janu>y #a1 #bjbe4