Internal Revenue Code:Sec. 48. Energy credit

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Contents


Location in Internal Revenue Code


     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter A - Determination of Tax Liability
         PART IV - CREDITS AGAINST TAX
          Subpart E - Rules for Computing Investment Credit
        

Statute

    Sec. 48. Energy credit
 
    (a) Energy credit
      (1) In general
        For purposes of section 46, except as provided in paragraph 
       (1)(B) or (2)(B) of subsection (c), the energy credit for any
       taxable year is the energy percentage of the basis of each energy
       property placed in service during such taxable year.
      (2) Energy percentage
        (A) ) IN GENERAL- The energy percentage is--
          (i) 30 percent in the case of--
             (I) qualified fuel cell property,
            (II) energy property described in paragraph (3)(A)(i) but
              only with respect to periods ending before January 1, 2009,
              and
           (III) energy property described in paragraph (3)(A)(ii), and
         (ii) in the case of any energy property to which clause (i) does
            not apply, 10 percent.
        (B) Coordination with rehabilitation credit
          The energy percentage shall not apply to that portion of the
        basis of any property which is attributable to qualified
        rehabilitation expenditures.
      (3) Energy property
        For 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,or
           (ii) equipment which uses solar energy to illuminate
          the inside of a structure using fiber-optic distributed
          sunlight but only with respect to periods ending before
          January 1, 2009, or 
          (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, or
           (iv) qualified fuel cell property or qualified microturbine property,
          (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,
          (C) with respect to which depreciation (or amortization in
        lieu of depreciation) is allowable, and
          (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.
      The term ''energy property'' shall not include any property which
      is public utility property (as defined in section 46(f)(5) as in
      effect on the day before the date of the enactment of the Revenue
      Reconciliation Act of 1990).  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 subsidized energy
          financing or industrial development bonds
        (A) Reduction of basis
          For purposes of applying the energy percentage to any
        property, if such property is financed in whole or in part by -
            (i) subsidized energy financing, or
            (ii) the proceeds of a private activity bond (within the
          meaning of section 141) the interest on which is exempt from
          tax under section 103,
        the amount taken into account as the basis of such property
        shall not exceed the amount which (but for this subparagraph)
        would be so taken into account multiplied by the fraction
        determined under subparagraph (B).
        (B) Determination of fraction
          For purposes of subparagraph (A), the fraction determined
        under this subparagraph is 1 reduced by a fraction -
            (i) the numerator of which is that portion of the basis of
          the property which is allocable to such financing or
          proceeds, and
            (ii) the denominator of which is the basis of the property.
        (C) Subsidized energy financing
          For purposes of subparagraph (A), the term ''subsidized
        energy financing'' means financing provided under a Federal,
        State, or local program a principal purpose of which is to
        provide subsidized financing for projects designed to conserve
        or produce energy.
    (b) Certain progress expenditure rules made applicable
        Rules similar to the rules of subsections (c)(4) and (d) of
      section 46 (as in effect on the day before the date of the
      enactment of the Revenue Reconciliation Act of 1990) shall apply
      for purposes of subsection (a).
    (c) Qualified Fuel Cell Property; Qualified Microturbine Property- 
      For purposes of this section--
      (1) QUALIFIED FUEL CELL PROPERTY-
       (A) IN GENERAL- The term `qualified fuel cell property' means a
          fuel cell power plant which--
        (i) has a nameplate capacity of at least 0.5 kilowatt of electricity
          using an electrochemical process, and
       (ii) has an electricity-only generation efficiency greater than
         30 percent.
       (B) LIMITATION- In the case of qualified fuel cell property placed
         in service during the taxable year, the credit otherwise determined
         under subsection (a) for such year with respect to such property 
         shall not exceed an amount equal to $500 for each 0.5 kilowatt of
         capacity of such property.
      (C) FUEL CELL POWER PLANT- The term `fuel cell power plant' means 
         an integrated system comprised of a fuel cell stack assembly and 
         associated balance of plant components which converts a fuel into 
         electricity using electrochemical means.
      (D) SPECIAL RULE- The first sentence of the matter in subsection (a)(3)
         which follows subparagraph (D) thereof shall not apply to qualified 
         fuel cell property which is used predominantly in the trade or 
         business of the furnishing or sale of telephone service, telegraph 
         service by means of domestic telegraph operations, or other telegraph
         services (other than international telegraph services).
      (E) TERMINATION- The term `qualified fuel cell property' shall not
         include any property for any period after December 31, 2008.
     (2) QUALIFIED MICROTURBINE PROPERTY-
      (A) IN GENERAL- The 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- In the case of qualified microturbine property placed 
         in service during the taxable year, the credit otherwise determined
         under subsection (a) for such year with respect to such property shall
         not exceed an amount equal $200 for each kilowatt of capacity of such
         property.
      (C) STATIONARY MICROTURBINE POWER PLANT- The term `stationary microturbine
         power plant' means an integrated system comprised of a gas turbine 
         engine, a combustor, a recuperator or regenerator, a generator or 
         alternator, and associated balance of plant components which converts
         a fuel into electricity and thermal energy. Such term also includes 
         all secondary components located between the existing infrastructure 
         for fuel delivery and the existing infrastructure for power distribution,
         including equipment and controls for meeting relevant power standards,
         such as voltage, frequency, and power factors.
      (D) SPECIAL RULE- The first sentence of the matter in subsection (a)(3)
         which follows subparagraph (D) thereof shall not apply to qualified 
         microturbine property which is used predominantly in the trade or 
         business of the furnishing or sale of telephone service, telegraph 
         service by means of domestic telegraph operations, or other telegraph 
         services (other than international telegraph services).
      (E) TERMINATION- The term `qualified microturbine property' shall not 
         include any property for any period after December 31, 2008.

     

Sources

    (Added Pub. L. 87-834, Sec. 2(b), Oct. 16, 1962, 76 Stat. 967;
    amended Pub. L. 88-272, title II, Sec. 203(a)(1), (3)(A), (b), (c),
    Feb. 26, 1964, 78 Stat. 33, 34; Pub. L. 89-800, Sec. 1 Nov. 8,
    1966, 80 Stat. 1508; Pub. L. 89-809, title II, Sec. 201(a), Nov.
    13, 1966, 80 Stat. 1575; Pub. L. 90-26, Sec. 1, 2(a), 3, June 13,
    1967, 81 Stat. 57, 58; Pub. L. 91-172, title I, Sec. 121(d)(2)(A),
    title IV, Sec. 401(e)(2)-(4), Dec. 30, 1969, 83 Stat. 547, 603;
    Pub. L. 92-178, title I, Sec. 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, Sec. 301(c)(1), 302(c)(3), title VI, Sec.
    604(a), Mar. 29, 1975, 89 Stat. 38, 44, 65; Pub. L. 94-455, title
    VIII, Sec. 802(b)(6), 804(a), title X, Sec. 1051(h)(1), title XIX,
    Sec. 1901(a)(5), (b)(11)(A), 1906(b)(13)(A), title XXI, Sec.
    2112(a)(1), Oct. 4, 1976, 90 Stat. 1583, 1591, 1647, 1764, 1795,
    1834, 1905; Pub. L. 95-473, Sec. 2(a)(2)(A), Oct. 17, 1978, 92
    Stat. 1464; Pub. L. 95-600, title I, Sec. 141(b), title III, Sec.
    312(c)(1)-(3), 314(a), (b), 315(a)-(c), title VII, Sec. 703(a)(3),
    (4), Nov. 6, 1978, 92 Stat. 2791, 2826-2829, 2939; Pub. L. 95-618,
    title III, Sec. 301(b), (d)(1), (2), Nov. 9, 1978, 92 Stat. 3195,
    3199, 3200; Pub. L. 96-222, title I, Sec. 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, Sec.
    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, Sec. 302(a), Oct. 14,
    1980, 94 Stat. 1991; Pub. L. 96-605, title I, Sec. 109(a), title
    II, Sec. 223(a), Dec. 28, 1980, 94 Stat. 3525, 3528; Pub. L. 97-34,
    title II, Sec. 211(a)(2), (c), (e)(3), (4), (h), 212(a)(3), (b),
    (c), (d)(2)(A), 213(a), 214(a), (b), title III, Sec. 332(b), Aug.
    13, 1981, 95 Stat. 227-229, 235, 236, 239, 240, 296; Pub. L.
    97-248, title II, Sec. 205(a)(1), (4), (5)(A), 209(c), Sept. 3,
    1982, 96 Stat. 427, 429, 447; Pub. L. 97-354, Sec. 3(d), 5(a)(7),
    (8), Oct. 19, 1982, 96 Stat. 1689, 1692; Pub. L. 97-362, title I,
    Sec. 104(a), Oct. 25, 1982, 96 Stat. 1729; Pub. L. 97-424, title V,
    Sec. 546(a), Jan. 6, 1983, 96 Stat. 2198; Pub. L. 97-448, title I,
    Sec. 102(e)(2)(A), (f)(2), (3), (6), title II, Sec. 202(c), title
    III, Sec. 306(a)(3), Jan. 12, 1983, 96 Stat. 2371, 2372, 2396,
    2400; Pub. L. 98-369, div.  A, title I, Sec. 11, 31(b), (c),
    111(e)(8), 113(a)(1), (b)(3), (4), 114(a), title IV, Sec. 431(c),
    474(o)(10)-(18), title VII, Sec. 712(b), 721(x)(1), 735(c)(1),
    title X, Sec. 1043(a), July 18, 1984, 98 Stat. 503, 517, 518, 633,
    635, 637, 638, 808, 836, 837, 946, 971, 981, 1044; Pub. L. 99-121,
    title I, Sec. 103(b)(5), Oct. 11, 1985, 99 Stat. 510; Pub. L.
    99-514, title II, Sec. 251(b), (c), title VII, Sec. 701(e)(4)(C),
    title VIII, Sec. 803(b)(2)(B), title XII, Sec. 1272(d)(5),
    1275(c)(5), title XV, Sec. 1511(c)(3), title XVIII, Sec.
    1802(a)(4)(C), (5)(B), (9)(A), (B), 1809(d)(2), (e), 1847(b)(6),
    1879(j)(1), Oct. 22, 1986, 100 Stat. 2184, 2186, 2343, 2355, 2594,
    2599, 2745, 2788, 2789, 2821, 2856, 2908; Pub. L. 100-647, title I,
    Sec. 1002(a)(14), (16)(A), (20), (29), (30), 1013(a)(41), Nov. 10,
    1988, 102 Stat. 3355-3357, 3544; Pub. L. 101-508, title XI, Sec.
    11801(c)(6)(A), 11813(a), Nov. 5, 1990, 104 Stat. 1388-523,
    1388-541; Pub. L. 102-227, title I, Sec. 106, Dec. 11, 1991, 105
    Stat. 1687; Pub. L. 102-486, title XIX, Sec. 1916(a), Oct. 24,
    1992, 106 Stat. 3024.)
 

References in Text

                             REFERENCES IN TEXT
      The date of the enactment of the Revenue Reconciliation Act of
    1990, referred to in subsec. (a)(3), (5), is the date of enactment
    of Pub. L. 101-508, which was approved Nov. 5, 1990.
 

Miscellaneous

                                 AMENDMENTS
     2005 - Sec.1336(a), Energy Policy Act of 2005, amended Sec.48
     (a)(3)(A)(defining energy property) by adding a new clause
     (iii) "qualified fuel cell property or qualified microturbine
      property; Sec.1336(b)amended Sec. 48 by adding a new
     sub-section (c)"Qualified Fuel Cell Property; Qualified
     Microturbine Property"; and Sec. 1337(a) amended Sec.48(a)(2)
    (A) (relating to energy percentage). Sec1337(b)(c) amended
     Sec.48(a)(3)(A) by adding and redesignating subclauses.
     2004 - Subsec.710(e),Pub.L.108-357, amended Sec.48(a)(3)
     by adding at the end the following new sentence: 
   ``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.''.

     2004 - Pub. L. 108-357, Sec. 322(d)(2).  Section 48 is amended--
     by striking subsection (b), by striking ``this subsection'' in 
     paragraph (5) of subsection (a) and inserting ``subsection (a)'',
     and by redesignating such paragraph (5) as subsection (b), and
     the heading for section 48 is amended by striking
     ``; reforestation credit''.

      1992 - Subsec. (a)(2). Pub. L. 102-486 substituted ''The'' for
    ''Except as provided in subparagraph (B), the'' in subpar. (A),
    redesignated subpar. (C) as (B), and struck out former subpar. (B)
    which read as follows: ''(B) Termination. - Effective with respect
    to periods after June 30, 1992, the energy percentage is zero.  For
    purposes of the preceding sentence, rules similar to the rules of
    section 48(m) (as in effect on the day before the date of the
    enactment of the Revenue Reconciliation Act of 1990) shall apply.''
      1991 - Subsec. (a)(2)(B). Pub. L. 102-227 substituted ''June 30,
    1992'' for ''December 31, 1991''.
      1990 - Pub. L. 101-508, Sec. 11813(a), amended section generally,
    substituting section catchline for one which read: ''Definitions;
    special rules'' and in text substituting present provisions for
    provisions defining section 38 property, new section 38 property,
    used section 38 property, provisions relating to certain leased
    property, estates and trusts, special rules for qualified
    rehabilitated buildings, credit for movie and television films,
    treatment of energy property, application of certain transitional
    rules, definitions of certain credits, definition of single purpose
    agricultural or horticultural structure, basis adjustment to
    section 38 property, certain section 501(d) organizations, special
    rules relating to sound recordings, and a cross reference to
    section 381 of this title.
      Subsec. (a)(8). Pub. L. 101-508, Sec. 11801(c)(6)(A), struck out
    par. (8) ''Amortized property'' which read as follows: ''Any
    property with respect to which an election under section 167(k),
    184, or 188 applies shall not be treated as section 38 property.''
      1988 - Subsec. (a)(1). Pub. L. 100-647, Sec. 1002(a)(29), which
    directed amendment of par. (1) by substituting ''property to which
    section 168 applies'' for ''recovery property (within the meaning
    of section 168)'' in penultimate sentence, was executed by making
    the substitution for ''recovery property (within the meaning of
    section 168'', which results in retaining remaining parenthetical
    material and closing parenthesis.
      Subsec. (a)(5)(A)(ii). Pub. L. 100-647, Sec. 1002(a)(14)(A)-(C),
    substituted ''168(h)(2)(C)'' for ''168(j)(4)(C)'',
    ''168(h)(2)(A)(iii)'' for ''168(j)(4)(A)(iii)'', and
    ''168(h)(2)(B)'' for ''168(j)(4)(B)''.
      Subsec. (a)(5)(B)(i). Pub. L. 100-647, Sec. 1002(a)(14)(D),
    substituted ''168(i)(3)'' for ''168(j)(6)''.
      Subsec. (a)(5)(B)(ii). Pub. L. 100-647, Sec. 1002(a)(14)(E),
    substituted ''168(h)(1)(C)(ii)'' for ''168(j)(3)(C)(ii)''.
      Subsec. (a)(5)(D). Pub. L. 100-647, Sec. 1002(a)(14)(F),
    substituted ''paragraphs (5) and (6) of section 168(h)'' for
    ''paragraphs (8) and (9) of section 168(j)''.
      Subsec. (a)(5)(E). Pub. L. 100-647, Sec. 1002(a)(14)(G), amended
    subpar. (E) generally, substituting ''provision'' for
    ''provisions'' and ''168(h)'' for ''168(j)''.
      Subsec. (l)(2)(C). Pub. L. 100-647, Sec. 1002(a)(30), substituted
    ''to which section 168 applies'' for ''which is recovery property
    (within the meaning of section 168)''.
      Subsec. (l)(11)(A)(ii). Pub. L. 100-647, Sec. 1013(a)(41),
    substituted ''a private activity bond (within the meaning of
    section 141)'' for ''an industrial development bond (within the
    meaning of section 103(b)(2))''.
      Subsec. (s). Pub. L. 100-647, Sec. 1002(a)(20), redesignated
    subsec. (s), relating to cross reference, as (t).
      Subsec. (s)(9). Pub. L. 100-647, Sec. 1002(a)(16)(A), added par.
    (9).
      Subsec. (t). Pub. L. 100-647, Sec. 1002(a)(20), redesignated
    subsec. (s), relating to cross reference, as (t).
      1986 - Subsec. (a)(2)(B)(vii). Pub. L. 99-514, Sec. 1272(d)(5),
    1275(c)(5), struck out ''932,'' after ''931,'' and ''or which is
    entitled to the benefits of section 934(b)'' after ''in effect
    under section 936'', and substituted ''or 933'' for '', 933, or
    934(c)''.
      Subsec. (a)(4). Pub. L. 99-514, Sec. 1802(a)(9)(A), substituted
    ''514(b)'' for ''514(c)'' and ''514(a)'' for ''514(b)''.
      Subsec. (a)(5)(B)(iii). Pub. L. 99-514, Sec. 1802(a)(5)(B),
    struck out cl. (iii) which provided that (I) in the case of any
    aircraft used under a qualifying lease (as defined in section
    47(a)(7)(C)) and which is leased to a foreign person or entity
    before January 1, 1990, clause (i) shall be applied by substituting
    ''3 years'' for ''6 months'' and that (II) for purposes of applying
    section 47(a)(1) and (5)(B) there shall not be taken into account
    any period of a lease to which subclause (I) applies.
      Subsec. (a)(5)(D), (E). Pub. L. 99-514, Sec. 1802(a)(4)(C), added
    subpar. (D) and redesignated former subpar. (D) as (E).
      Subsec. (b)(1). Pub. L. 99-514, Sec. 1809(e)(1), inserted ''Such
    term includes any section 38 property the reconstruction of which
    is completed by the taxpayer, but only with respect to that portion
    of the basis which is properly attributable to such
    reconstruction.''
      Subsec. (b)(2). Pub. L. 99-514, Sec. 1809(e)(2), in introductory
    provisions substituted ''the first sentence of paragraph (1)'' for
    ''paragraph (1)'', in subpar. (B) substituted ''3 months after''
    for ''3 months of'', in closing provisions substituted ''used under
    the leaseback (or lease) referred to in subparagraph (B)'' for
    ''used under the lease'' and inserted ''The preceding sentence
    shall not apply to any property if the lessee and lessor of such
    property make an election under this sentence.  Such an election,
    once made, may be revoked only with the consent of the Secretary.''
      Subsec. (d)(4)(D). Pub. L. 99-514, Sec. 701(e)(4)(C), inserted
    ''(as in effect on the day before the date of the enactment of the
    Tax Reform Act of 1986)''.
      Subsec. (d)(6)(C)(ii). Pub. L. 99-514, Sec. 1511(c)(3),
    substituted ''the underpayment rate'' for ''the rate'' in closing
    provisions.
      Subsec. (g)(1). Pub. L. 99-514, Sec. 251(b), amended par. (1)
    generally, restating in subpars. (A) to (D) provisions relating to
    qualified rehabilitated buildings which had in subpar. (A) provided
    general definition of qualified rehabilitated building, in subpar.
    (B) directed that 30 years must have elapsed since construction, in
    subpar. (C) provided general definition of substantially
    rehabilitated with special rule for phased rehabilitation and
    application of provision to lessees, and in subpar. (D) provided
    that rehabilitation included reconstruction, and striking out
    former subpar. (E) which had provided an alternative test for
    definition of qualified rehabilitated building.
      Subsec. (g)(2). Pub. L. 99-514, Sec. 251(b), amended par. (2)
    generally, in subpar. (A) striking out reference to amounts
    ''incurred after December 31, 1981'' in introductory provision, and
    in cl. (i) substituting subcls. (I) to (IV) for ''for real property
    (or additions or improvements to real property) which have a
    recovery period (within the meaning of section 168) of 19 (15 years
    in the case of low-income housing) years,'', in subpar. (B), in cl.
    (i), substituting provision relating to use of straight line
    depreciation for provision relating to use of accelerated methods
    of depreciation, redesignating former cl. (vi) as (v) and
    substituting ''section 168(h)'' for ''section 168(j)'',
    redesignating former cl. (v) as (vi) and substituting ''less than
    the recovery period determined under section 168(c)'' for ''less
    than 19 years (15 years in the case of low-income housing'',
    restating subpar. (C) without change, and in subpar. (D)
    substituting provisions defining nonresidential real property,
    residential rental property and class life for provisions defining
    low-income housing.
      Subsec. (g)(2)(B)(vi)(I). Pub. L. 99-514, Sec. 1802(a)(9)(B),
    substituted ''section 168(j)'' for ''section 168(j)(3)''.
      Subsec. (g)(3). Pub. L. 99-514, Sec. 251(b), in amending par. (3)
    generally, inserted introductory phrase ''For purposes of this
    subsection - ''.
      Subsec. (g)(4). Pub. L. 99-514, Sec. 251(b), in amending subsec.
    (g) generally, reenacted par. (4) without change.
      Subsec. (l)(5). Pub. L. 99-514, Sec. 1847(b)(6), substituted
    ''section 23(c)'' for ''section 44C(c)'' and ''section
    23(c)(4)(A)(viii)'' for ''section 44C(c)(4)(A)(viii)''.
      Subsec. (q)(3). Pub. L. 99-514, Sec. 251(c), struck out ''other
    than a certified historic structure'' after ''qualified
    rehabilitated building''.
      Subsec. (q)(7). Pub. L. 99-514, Sec. 1809(d)(2), renumbered par.
    (6), relating to special rule for qualified films, as (7).
      Subsec. (r). Pub. L. 99-514, Sec. 1879(j)(1), added subsec. (r).
    Former subsec. (r) redesignated (s).
      Subsec. (s). Pub. L. 99-514, Sec. 1879(j)(1), redesignated former
    subsec. (r) as (s).
      Subsec. (s)(5). Pub. L. 99-514, Sec. 803(b)(2)(B), which directed
    the general amendment of par. (5) of subsec. (r), was executed by
    amending par. (5) of subsec. (s) to reflect the probable intent of
    Congress and the intervening redesignation of subsec. (r) as (s) by
    Pub. L. 99-514, Sec. 1879(j)(1), see note above.  Prior to
    amendment, par. (5) read as follows: ''For purposes of this
    subsection, the term ''sound recording'' means any sound recording
    described in section 280(c)(2).''
      1985 - Subsec. (g)(2)(A)(i), (B)(v). Pub. L. 99-121 substituted
    ''19'' for ''18''.
      1984 - Subsec. (a)(5). Pub. L. 98-369, Sec. 31(b), amended par.
    (5) generally, to extend its scope to encompass property used by
    foreign persons or entities and to create an exception for
    short-term leases by substituting provisions covered by subpars.
    (A) to (D) for former provisions which had directed that property
    used by the United States, any State or political subdivision
    thereof, any international organization, or any agency or
    instrumentality of any of the foregoing not be treated as section
    38 property, that for purposes of that prohibition the
    International Telecommunications Satellite Consortium, the
    International Maritime Satellite Organization, and any successor
    organization of such Consortium or Organization not be treated as
    an international organization, and that if any qualified
    rehabilitated building were used by the governmental unit pursuant
    to a lease, this paragraph would not apply to that portion of the
    basis of such building attributable to qualified rehabilitation
    expenditures.
      Subsec. (b). Pub. L. 98-369, Sec. 114(a), amended subsec. (b)
    generally, substituting a general definition of ''new section 38
    property'' for definitions which made reference to property
    constructed, reconstructed or erected after December 31, 1961, and
    adding pars. (2) and (3).
      Subsec. (c)(2)(A). Pub. L. 98-369, Sec. 11(a), substituted
    ''$125,000 ($150,000 for taxable years beginning after 1987)'' for
    ''$150,000 ($125,000 for taxable years beginning in 1981, 1982,
    1983, or 1984)'' in first sentence, and ''$125,000 (or $150,000''
    for ''$150,000 (or $125,000'' in two places in second sentence.
      Subsec. (c)(2)(B). Pub. L. 98-369, Sec. 11(b), substituted
    ''$62,500 ($75,000 for taxable years beginning after 1987)'' for
    ''$75,000 ($62,500 for taxable years beginning in 1981, 1982, 1983,
    or 1984)''.
      Subsec. (c)(3)(B). Pub. L. 98-369, Sec. 474(o)(10), substituted
    ''section 39'' for ''section 46(b)''.
      Subsec. (d)(1)(B). Pub. L. 98-369, Sec. 474(o)(11), substituted
    ''section 38(c)(3)(B)'' for ''section 46(a)(6)''.
      Subsec. (d)(6). Pub. L. 98-369, Sec. 431(c), added par. (6).
      Subsec. (f)(3). Pub. L. 98-369, Sec. 474(o)(12), struck out par.
    (3) which provided that the $25,000 amount specified under
    subparagraphs (A) and (B) of section 46(a)(3) applicable to an
    estate or trust be reduced to an amount which bore the same ratio
    to $25,000 as the amount of the qualified investment allocated to
    the estate or trust under paragraph (1) to the entire amount of the
    qualified investment.
      Subsec. (g)(1)(E). Pub. L. 98-369, Sec. 1043(a), added subpar.
    (E).
      Subsec. (g)(2)(A)(i). Pub. L. 98-369, Sec. 111(e)(8)(A), (B),
    substituted ''real property'' for ''property'' in two places, and
    ''18 (15 years in the case of low-income housing)'' for ''15''.
      Subsec. (g)(2)(B)(i). Pub. L. 98-369, Sec. 31(c)(2), inserted
    ''The preceding sentence shall not apply to any expenditure to the
    extent subsection (f)(12) or (j) of section 168 applies to such
    expenditure.''
      Subsec. (g)(2)(B)(v). Pub. L. 98-369, Sec. 111(e)(8)(C),
    substituted ''18 years (15 years in the case of low-income
    housing)'' for ''15 years''.
      Subsec. (g)(2)(B)(vi). Pub. L. 98-369, Sec. 31(c)(1), added cl.
    (vi).
      Subsec. (g)(2)(D). Pub. L. 98-369, Sec. 111(e)(8)(D), added
    subpar. (D).
      Subsec. (k)(4). Pub. L. 98-369, Sec. 113(b)(3)(B), inserted ''or
    at-risk rules'' after ''test'' in heading.
      Subsec. (k)(4)(A). Pub. L. 98-369, Sec. 113(b)(3)(A), inserted
    '', section 46(c)(8), or section 46(c)(9)''.
      Subsec. (k)(4)(B). Pub. L. 98-369, Sec. 113(b)(3)(C), substituted
    ''used'' for ''issued''.
      Subsec. (k)(5)(D)(i). Pub. L. 98-369, Sec. 721(x)(1), substituted
    ''S corporation'' for ''electing small business corporation''.
      Subsec. (l)(1). Pub. L. 98-369, Sec. 474(o)(13), substituted
    ''section 46(b)(2)'' for ''section 46(a)(2)(C)''.
      Subsec. (l)(16)(B)(i). Pub. L. 98-369, Sec. 735(c)(1),
    substituted ''the chassis of which is an automobile bus chassis and
    the body of which is an automobile bus body'' for ''the chassis and
    body of which is exempt under section 4063(a)(6) from the tax
    imposed by section 4061(a)''.
      Subsec. (m). Pub. L. 98-369, Sec. 474(o)(14), substituted
    ''subsection (b)'' for ''subsection (a)(2)''.
      Subsec. (n). Pub. L. 98-369, Sec. 474(o)(15), repealed subsec.
    (n). For continuing applicability of par. (4) of subsec. (n), see
    section 474(o)(15) of Pub. L. 98-369, set out in Effective Date of
    1984 Amendment note below.
      Subsec. (o)(3) to (8). Pub. L. 98-369, Sec. 474(o)(16),
    redesignated par. (8) as (3) and struck out former pars. (3) to (7)
    which defined ''employee plan credit'', ''basic employee plan
    credit'', ''matching employee plan credit'', ''basic employee plan
    percentage'', and ''matching employee plan percentage'',
    respectively.
      Subsec. (q)(1), (3). Pub. L. 98-369, Sec. 474(o)(17)(A),
    substituted ''section 46(a)'' for ''section 46(a)(2)''.
      Subsec. (q)(4)(A)(i). Pub. L. 98-369, Sec. 474(o)(17),
    substituted ''section 46(a)'' for ''section 46(a)(2)'' and
    ''section 46(b)(1)'' for ''section 46(a)(2)(B)''.
      Subsec. (q)(4)(B)(ii). Pub. L. 98-369, Sec. 474(o)(17)(B),
    substituted ''section 46(b)(1)'' for ''section 46(a)(2)(B)''.
      Subsec. (q)(6). Pub. L. 98-369, Sec. 712(b), added par. (6)
    relating to adjustment in basis of interest in partnership or S
    corporation.
      Pub. L. 98-369, Sec. 113(b)(4), added par. (6) relating to
    special rule for qualified films.
      Subsec. (r). Pub. L. 98-369, Sec. 113(a)(1), added subsec. (r).
    Former subsec. (r) redesignated (s).
      Pub. L. 98-369, Sec. 474(o)(18), substituted ''section
    381(c)(26)'' for ''section 381(c)(23)''.
      Subsec. (s). Pub. L. 98-369, Sec. 113(a)(1), redesignated former
    subsec. (r) as (s).
      1983 - Subsec. (a)(1)(G). Pub. L. 97-448, Sec. 102(e)(2)(A),
    inserted ''(not including a building and its structural components)
    used in connection'' after ''storage facility''.
      Subsec. (a)(10). Pub. L. 97-448, Sec. 202(c), amended directory
    language of Pub. L. 96-223, Sec. 223(a)(1), to correct an error,
    and did not involve any change in text.  See 1980 Amendment note
    below.
      Subsec. (g)(1)(C)(i). Pub. L. 97-448, Sec. 102(f)(2), (6),
    substituted ''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'' for ''the 24-month period ending on the
    last day of the taxable year'' in provisions preceding subcl. (I),
    substituted ''adjusted basis of such building (and its structural
    components)'' for ''adjusted basis of such property'' both in
    subcl. (I) and in provision following subcl. (II), and, in
    provisions following subcl. (II), substituted ''holding period of
    the building'' for ''holding period of the property'' and inserted
    provision that, 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.
      Subsec. (g)(5)(A). Pub. L. 97-448, Sec. 102(f)(3), substituted
    ''a credit is determined under section 46(a)(2)'' for ''a credit is
    allowed under this section'' and ''the credit so determined'' for
    ''the credit so allowed''.  See 1982 Amendment note for subsec.
    (g)(5) below and see Effective Date of 1982 and 1983 Amendment
    notes set out under sections 1 and 196 of this title.
      Subsec. (l)(5). Pub. L. 97-424, Sec. 546(a)(3), substituted
    reference to subpar. (N) for reference to subpar. (M) in provision
    following subparagraphs.
      Subsec. (l)(5)(M), (N). Pub. L. 97-424, Sec. 546(a)(1), (2),
    added subpar. (M) and redesignated former subpar. (M) as (N).
      Subsec. (q)(3). Pub. L. 97-448, Sec. 306(a)(3), substituted
    ''paragraphs (1) and (2) of this subsection and paragraph (5) of
    subsection (d)'' for ''paragraphs (1) and (2)''.
      1982 - Subsec. (b). Pub. L. 97-248, Sec. 209(c), inserted
    provision that for purposes of determining whether section 38
    property subject to a lease is new section 38 property, such
    property shall be treated as originally placed in service not
    earlier than the date such property is used under the lease, but
    only if such property is leased within 3 months after such property
    is placed in service.
      Subsec. (c)(2)(D). Pub. L. 97-354 substituted ''Partnerships and
    S corporations'' for ''Partnerships'' in subpar. heading, and
    inserted ''A similar rule shall apply in the case of an S
    corporation and its shareholders''.
      Subsec. (d)(5). Pub. L. 97-248, Sec. 205(a)(4), added par. (5).
      Subsec. (e). Pub. L. 97-354, Sec. 5(a)(7), struck out subsec. (e)
    relating to apportionment among shareholders of qualified
    investments by an electing small business corporation.
      Subsec. (g)(5). Pub. L. 97-248, Sec. 205(a)(5)(A), struck out
    par. (5) which, as amended by Sec. 102(f)(3) of Pub. L. 97-448, had
    provided that for purposes of this subtitle, if a credit were
    determined under section 46(a)(2) for any qualified rehabilitation
    expenditure in connection with a qualified rehabilitated building
    other than a certified historic structure, the increase in basis of
    such property which would (but for this paragraph) have resulted
    from such expenditure had to be reduced by the amount of the credit
    so determined, that if during any taxable year there was a
    recapture amount determined with respect to any qualified
    rehabilitated building the basis of which was reduced under subpar.
    (A), the basis of such building (immediately before the event
    resulting in such recapture), had to be increased by an amount
    equal to such recapture amount, and that for purposes of this
    paragraph ''recapture amount'' was defined as any increase in tax
    (or adjustment in carrybacks or carryovers) determined under
    section 47(a)(5). See 1983 Amendment note for subsec. (g)(5) above
    and see Effective Date of 1982 and 1983 Amendment notes set out
    under sections 1 and 196 of this title.
      Subsec. (k)(5)(D)(i). Pub. L. 97-354, Sec. 5(a)(8), substituted
    ''an S corporation'' for ''an electing small business corporation
    (within the meaning of section 1371)''.
      Subsec. (l)(7). Pub. L. 97-362, Sec. 104(a), temporarily
    substituted the qualification that such term does not include
    equipment for hydrogenation, refining, or other process subsequent
    to retorting other than hydrogenation or other process which is
    applied in the vicinity of the property from which the shale was
    extracted and which is applied to bring the shale oil to a grade
    and quality suitable for transportation to and processing in a
    refinery, for the qualification that such equipment did not include
    equipment for hydrogenation, refining, or other processes
    subsequent to retorting.  See Effective and Termination Dates of
    1982 Amendment note below.
      Subsecs. (q), (r). Pub. L. 97-248, Sec. 205(a)(1), added subsec.
    (q) and redesignated former subsec. (q) as (r).
      1981 - Subsec. (a)(1). Pub. L. 97-34, Sec. 211(e)(4), in
    provisions following subpar. (G), substituted ''Such term includes
    only recovery property (within the meaning of section 168 without
    regard to any useful life) and any other property'' for ''Such term
    includes only property''.
      Subsec. (a)(1)(G). Pub. L. 97-34, Sec. 211(c), added subpar. (G).
      Subsec. (a)(2)(B)(ii). Pub. L. 97-34, Sec. 211(h), designated
    existing provisions as subcl. (I) and added subcl. (II).
      Subsec. (a)(3)(D). Pub. L. 97-34, Sec. 212(c), added subpar. (D).
      Subsec. (a)(4). Pub. L. 97-34, Sec. 214(a), inserted provision
    that, if any qualified rehabilitated building is used by the
    tax-exempt organization pursuant to a lease, this paragraph shall
    not apply to that portion of the basis of such building which is
    attributable to qualified rehabilitation expenditures.
      Subsec. (a)(5). Pub. L. 97-34, Sec. 214(b), inserted provision
    that, if any qualified rehabilitated building is used by the
    governmental unit pursuant to a lease, this paragraph shall not
    apply to that portion of the basis of such building which is
    attributable to qualified rehabilitation expenditures.
      Subsec. (a)(8). Pub. L. 97-34, Sec. 212(d)(2)(A), substituted
    ''or 188'' for ''188, or 191''.
      Subsec. (a)(9). Pub. L. 97-34, Sec. 211(a)(2), struck out par.
    (9) which set out a special rule for the depreciation of railroad
    track.
      Subsec. (c)(2)(A) to (C). Pub. L. 97-34, Sec. 213(a), amended
    subpars. (A) to (C) generally raising in subpar. (A) the existing
    $100,000 dollar limitation to $125,000 in 1981 and to $150,000 in
    1985 and in subpar. (B) the existing $50,000 dollar limitation to
    $62,500 in 1981 and to $75,000 in 1985.
      Subsec. (g). Pub. L. 97-34, Sec. 212(b), in amending subsec. (c)
    generally incorporated the concept of ''substantial
    rehabilitation'' into par. (1)(A), substituted ''30 years'' for
    ''20 years'' as the requisite period in par. (1)(B), substituted a
    definition of ''substantially rehabilitated'' for former provisions
    that a major portion could be treated as a separate building in
    certain cases in par. (1)(C), reenacted par. (1)(D) without change,
    substituted ''December 31, 1981'' for ''October 31, 1978'' in
    provisions of par. (2)(A) preceding cl. (i), substituted provisions
    for a recovery period of 15 years for provisions that had provided
    for a useful life of 5 years or more in cl. (i) of par. (2)(A),
    reenacted cl. (ii) without change, substituted provisions that
    accelerated methods of depreciation may not be used for provisions
    relating to property otherwise section 38 property in cl. (i) of
    par. (2)(B), reenacted cls. (ii) and (iii) without change, revised
    the provisions of cl. (iv) relating to certified historic
    structures, and added cl. (v) relating to expenditures of lessees,
    added par. (3), redesignated former par. (3) as (4), and added par.
    (5).
      Subsec. (l)(2)(C). Pub. L. 97-34, Sec. 211(e)(3), inserted ''or
    which is recovery property (within the meaning of section 168)''
    after ''3 years or more''.
      Subsec. (n)(1)(A)(i). Pub. L. 97-34, Sec. 332(b), substituted
    ''which does not exceed'' for ''equal to''.
      Subsec. (o)(8). Pub. L. 97-34, Sec. 212(a)(3), added par. (8).
      1980 - Subsec. (a)(1). Pub. L. 96-451 added subpar. (F) and
    provision for treatment of the useful life of subpar. (F) property
    as its normal growing period.
      Subsec. (a)(2)(B)(xi). Pub. L. 96-223, Sec. 222(i)(2), added cl.
    (xi).
      Subsec. (a)(5). Pub. L. 96-605, Sec. 109(a), included the
    International Maritime Satellite Organization or any successor
    organization within organizations not to be treated as
    international organizations.
      Subsec. (a)(7)(B). Pub. L. 95-600, Sec. 312(c)(2), as amended by
    Pub. L. 96-222, Sec. 103(a)(2)(A), substituted '' 'described in
    section 50 (as in effect before its repeal by the Revenue Act of
    1978' '' for '' 'described in section 50' ''.
      Subsec. (a)(10)(A). Pub. L. 96-223, Sec. 223(a)(1), as amended by
    Pub. L. 97-448, Sec. 202(c), provided that ''petroleum or petroleum
    products'' does not include petroleum coke or petroleum pitch.
      Subsec. (a)(10)(B). Pub. L. 96-222, Sec. 108(c)(6), substituted
    ''5'' for ''51''.
      Subsec. (g)(2)(B)(i). Pub. L. 96-222, Sec. 103(a)(4)(B),
    substituted ''subsections (a)(1)(E) and (l)'' for ''subsection
    (a)(1)(E)''.
      Subsec. (l)(1). Pub. L. 96-223, Sec. 221(b)(1), substituted ''For
    any period for which the energy percentage determined under section
    46(a)(2)(C) for any energy property is greater than zero'' for
    ''For the period beginning on October 1, 1978, and ending on
    December 31, 1982'' in provisions preceding subpar. (A) and, in
    subpars. (A) and (B), substituted ''such energy property'' and
    ''such property'' for ''any energy property''.
      Subsec. (l)(2)(A). Pub. L. 96-223, Sec. 222(a), added cls. (vii),
    (viii), and (ix).
      Subsec. (l)(3)(A). Pub. L. 96-223, Sec. 222(b), (g)(2), struck
    out ''(other than coke or coke gas)'' after ''solid fuel'' in cl.
    (iii) and, in cl. (v), substituted provisions relating to equipment
    which converts coal into a substitute for a petroleum or natural
    gas derived feedstock for the manufacture of chemicals or other
    products and equipment which converts coal into methanol, ammonia,
    or hydroprocessed coal liquid or solid for provisions which had
    related simply to equipment which used coal as feedstock for the
    manufacture of chemicals or other products other than coke or coke
    gas, added cl. (ix), and, following cl. (ix), inserted provision
    that the equipment described in cl. (vii) includes equipment used
    for the storage of fuel derived from garbage at the site at which
    such fuel was produced from garbage.
      Subsec. (l)(3)(B). Pub. L. 96-223, Sec. 222(i)(1)(A),
    redesignated subpar. (C) as (B). Former subpar. (B), which excluded
    public utility property from the terms ''alternative energy
    property'', ''solar or wind energy property'', or ''recycling
    equipment'', was struck out.
      Subsec. (l)(3)(C), (D). Pub. L. 96-223, Sec. 222(i)(1)(A), (3),
    redesignated subpar. (D) as (C) and inserted following cl. (ii)
    provision that, for the purposes of the preceding sentence, in the
    case of property which is alternative energy property solely by
    reason of the amendments made by section 222(b) of the Crude Oil
    Windfall Profit Tax Act of 1980, ''January 1, 1980'' was to be
    substituted for ''October 1, 1978''. Former subpar. (C)
    redesignated (B).
      Subsec. (l)(4)(C). Pub. L. 96-223, Sec. 222(c), added subpar.
    (C).
      Subsec. (l)(5). Pub. L. 96-223, Sec. 222(d), added subpar. (L),
    redesignated former subpar. (L) as (M), and inserted provision that
    the Secretary shall not specify any property under subpar. (M)
    unless he determines that such specification meets the requirements
    of par. (9) of section 44C(c) for specification of items under
    section 44C(c)(4)(A)(viii).
      Subsec. (l)(11). Pub. L. 96-223, Sec. 221(b)(2), substituted
    ''one-half of the energy percentage determined under section
    46(a)(2)(C)'' for ''5 percent''.
      Pub. L. 96-223, Sec. 223(c)(1), completely revised par. (11) to
    incorporate property financed by subsidized energy financing,
    effective with regard to periods after Dec. 31, 1982. Prior to the
    revision par. (11) read as follows: ''In the case of property which
    is financed in whole or in part by the proceeds of an industrial
    development bond (within the meaning of section 103(b)(2)) the
    interest on which is exempt from tax under section 103, the energy
    percentage shall be one-half of the energy percentage determined
    under section 46(a)(2)(C).''
      Subsec. (l)(13). Pub. L. 96-223, Sec. 222(e)(1), added par. (13).
      Subsec. (l)(14). Pub. L. 96-223, Sec. 222(f), added par. (14).
      Subsec. (l)(15). Pub. L. 96-223, Sec. 222(g)(1), added par. (15).
      Subsec. (l)(16). Pub. L. 96-223, Sec. 222(h), added par. (16).
      Subsec. (l)(17). Pub. L. 96-223, Sec. 222(i)(1)(B), added par.
    (17).
      Subsec. (n). Pub. L. 96-222, Sec. 101(a)(7)(G), (H),
    (L)(i)(I)-(IV), (ii)(III)-(VI), (iii)(II), (v)(II)-(IV), (M)(ii),
    amended subsec. (n) generally to reflect the renaming of an
    investment tax credit ESOP to a tax credit employee stock ownership
    plan and a leveraged employee stock ownership plan (commonly
    referred to as an ESOP) to an employee stock ownership plan.
      Subsec. (n)(6)(B)(i). Pub. L. 96-605, Sec. 223(a), substituted
    ''the date on which the securities are contributed to the plan''
    for ''the due date for filing the return for the taxable year
    (determined with regard to extensions)''.
      Subsec. (o). Pub. L. 96-222, Sec. 101(a)(7)(L)(iii)(III),
    (v)(IV), (V), (M)(iii), substituted ''employee plan'' for ''ESOP''
    wherever appearing and inserted ''percentage'' after ''attributable
    to the matching employee plan'' in par. (5).
      1978 - Subsec. (a)(1)(A). Pub. L. 95-618, Sec. 301(d)(1),
    inserted ''(other than an air conditioning or heating unit)'' after
    ''personal property''.
      Subsec. (a)(1)(D). Pub. L. 95-600, Sec. 314(a), added par. (D).
      Subsec. (a)(1)(E). Pub. L. 95-600, Sec. 315(a), added par. (E).
      Subsec. (a)(2)(B)(ii). Pub. L. 95-473, Sec. 2(a)(2)(A),
    substituted ''providing transportation subject to subchapter I of
    chapter 105 of title 49'' for ''subject to part I of the Interstate
    Commerce Act''.
      Subsec. (a)(7)(A). Pub. L. 95-600, Sec. 312(c)(3), struck out
    ''(other than pretermination property)'' after ''Property''.
      Subsec. (a)(7)(B). Pub. L. 95-600, Sec. 312(c)(2), struck out
    ''described in section 50'' after ''with respect to property''.
    See 1980 Amendment note above.
      Subsec. (a)(8). Pub. L. 95-600, Sec. 315(c), substituted ''188,
    or 191'' for ''or 188''.
      Subsec. (a)(10). Pub. L. 95-618, Sec. 301(d)(2), added par. (10).
      Subsec. (d)(1)(B). Pub. L. 95-600, Sec. 703(a)(3), substituted
    ''section 46(a)(6)'' for ''section 46(a)(5)''.
      Subsec. (d)(4)(D). Pub. L. 95-600, Sec. 703(a)(4), substituted
    ''section 57(c)(1)(B)'' for ''section 57(c)(2)''.
      Subsec. (g). Pub. L. 95-600, Sec. 315(b), added subsec. (g).
      Subsec. (h). Pub. L. 95-600, Sec. 312(c)(1), struck out subsec.
    (h) which related to suspension of investment credit.
      Subsec. (i). Pub. L. 95-600, Sec. 312(c)(1), struck out subsec.
    (i) which related to an exemption from suspension of $20,000 of
    investment.
      Subsec. (j). Pub. L. 95-600, Sec. 312(c)(1), struck out subsec.
    (j) which defined ''suspension period''.
      Subsecs. (l), (m). Pub. L. 95-618, Sec. 301(b), added subsecs.
    (l) and (m) and redesignated former subsec. (l) as (n).
      Subsec. (n). Pub. L. 95-618, Sec. 301(b), redesignated former
    subsec. (l) as (n).
      Pub. L. 95-600, Sec. 141(b), added subsec. (n). Former subsec.
    (n) redesignated (p).
      Subsec. (o). Pub. L. 95-600, Sec. 141(b), added subsec. (o).
      Subsecs. (p), (q). Pub. L. 95-600, Sec. 141(b), 314(b), added
    subsec. (p). Former subsec. (n) redesignated (p) and subsequently
    as (q).
      1976 - Subsec. (a)(2)(B)(vi). Pub. L. 94-455, Sec. 1901(a)(5)(A),
    substituted ''(43 U.S.C. 1331))'' for ''; 43 U.S.C., sec. 1331)''.
      Subsec. (a)(2)(B)(vii). Pub. L. 94-455, Sec. 1051(h)(1),
    substituted ''(other than a corporation which has an election in
    effect under section 936 or which is entitled to the benefits of
    section 934(b))'' for ''(other than a corporation entitled to the
    benefits of section 931 or 934(b))''.
      Subsec. (a)(2)(B)(viii). Pub. L. 94-455, Sec. 1901(a)(5)(B),
    substituted ''47 U.S.C. 702'' for ''47 U.S.C., sec. 702''.
      Subsec. (a)(8). Pub. L. 94-455, Sec. 1901(b)(11)(A), 2112(a)(1),
    struck out ''169,'' after ''section 167(k),'', ''187,'' before ''or
    188 applies'', and provisions relating to the limitation of the
    applicability of this paragraph on property to which section 169
    applies.
      Subsecs. (c)(2)(A), (d)(1), (2)(A). Pub. L. 94-455, Sec.
    1906(b)(13)(A), struck out ''or his delegate'' after ''Secretary''.
      Subsec. (f). Pub. L. 94-455, Sec. 802(b)(6), substituted
    ''section 46(a)(3)'' for ''section 46(a)(2)''.
      Subsec. (i)(2). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out
    ''or his delegate'' after ''Secretary''.
      Subsecs. (k), (l). Pub. L. 94-455, Sec. 804(a), added subsec. (k)
    and redesignated former subsec. (k) as subsec. (l).
      1975 - Subsec. (a)(2)(B). Pub. L. 94-12, Sec. 604(a), substituted
    ''territorial waters within the northern portion of the Western
    Hemisphere'' for ''territorial waters'' in cl. (x) and inserted
    definition of ''northern portion of the Western Hemisphere''
    following cl. (x).
      Subsec. (c)(2)(A). Pub. L. 94-12 Sec. 301(c)(1)(A), substituted
    ''$100,000'' for ''$50,000''.
      Subsec. (c)(2)(B). Pub. L. 94-12, Sec. 301(c)(1)(A), (B),
    substituted ''$50,000'' for ''$25,000'' and ''$100,000'' for
    ''$50,000''.
      Subsec. (c)(2)(C). Pub. L. 94-12, Sec. 301(c)(1)(A), substituted
    ''$100,000'' for ''$50,000''.
      Subsec. (d)(1), (2)(A). Pub. L. 94-12, Sec. 302(c)(3),
    substituted ''section 46(e)(1)'' for ''section 46(d)(1)''.
      1971 - Subsec. (a)(1). Pub. L. 92-178, Sec. 102(a)(2),
    substituted ''3 years'' for ''4 years'' in second sentence.
      Subsec. (a)(1)(B)(ii), (iii). Pub. L. 92-178, Sec. 104(a)(1),
    substituted ''research facility'' for ''research or storage
    facility'' in cl. (ii) and added cl. (iii).
      Subsec. (a)(2)(B). Pub. L. 92-178, Sec. 104(c)(2), (3), (d),
    added cls. (viii) to (x), respectively.
      Subsec. (a)(3)(C). Pub. L. 92-178, Sec. 104(b), added subpar.
    (C).
      Subsec. (a)(5). Pub. L. 92-178, Sec. 104(c)(1), inserted ''(other
    than the International Telecommunications Satellite Consortium or
    any successor organization)'' after ''international organization''.
      Subsec. (a)(6). Pub. L. 92-178, Sec. 104(e), substituted
    provisions for treatment of livestock (other than horses) acquired
    by the taxpayer as section 38 property, with exception provision
    for reduction of acquisition cost by amount equal to amount
    realized on sale or other disposition under certain circumstances,
    and for nontreatment of horses as section 38 property for former
    provision that livestock shall not be treated as section 38
    property.
      Subsec. (a)(7) to (9). Pub. L. 92-178, Sec. 103, 104(f)(1), (g),
    added pars. (7) to (9), respectively.
      Subsec. (d). Pub. L. 92-178, Sec. 108(b) and (c), substituted
    ''section 46(d)(1)'' for ''section 46(d)''; and designated as par.
    (1) the present first sentence, redesignated as subpars. (A) and
    (B) provisions formerly designated cls. (1) and (2), again
    substituted ''section 46(d)(1)'' for ''section 46(d)'' in par. (1)
    and inserted ''(other than property described in paragraph (4))''
    in par. (1), added pars. (2) and (4), incorporated provisions of
    former second, third, and fourth sentences in provisions designated
    as par. (3), substituted in par. (3) ''the lessee shall be treated
    for all purposes of this subpart as having acquired a fractional
    portion of such property equal to the fraction determined under
    paragraph (2)(B) with respect to such property'' for ''the lessee
    shall be treated for all purposes of this subpart as having
    acquired such property'', and struck out former fifth and sixth
    sentences respecting election regarding treatment of leases of
    suspension period property and section 38 property.  See Effective
    Date of 1971 Amendment note below.
      1969 - Subsec. (a)(4). Pub. L. 91-172, Sec. 121(d)(2)(A),
    inserted provision relating to the percentage of the basis or cost
    of debt-financed property that may be considered in computing
    qualified investment under section 46(c) of this title.
      Subsec. (c)(2)(C). Pub. L. 91-172, Sec. 401(e)(2), reenacted
    subpar. (C) with minor changes and substituted reference to
    controlled group for reference to affiliated group.
      Subsec. (c)(3)(C). Pub. L. 91-172, Sec. 401(e)(3), substituted
    definition of controlled group for definition of affiliated group.
      Subsec. (d)(2). Pub. L. 91-172, Sec. 401(e)(4), substituted
    reference to a component member of a controlled group for reference
    to a member of an affiliated group.
      1967 - Subsec. (a)(2)(B)(i). Pub. L. 90-26, Sec. 3, inserted ''or
    is operated under contract with the United States'' after ''the
    United States''.
      Subsec. (h)(2). Pub. L. 90-26, Sec. 2(a), limited definition of
    suspension period property to section 38 property where the
    physical construction, reconstruction or erection was begun before
    May 24, 1967, pursuant to an order placed during the suspension
    period, subject to the proviso that in applying the definition to
    property the physical construction, reconstruction or erection of
    which was begun before May 24, 1967, only that portion of the basis
    properly attributable to construction, reconstruction or erection
    before May 24, 1967 be taken into account.
      Subsec. (j). Pub. L. 90-26, Sec. 1, substituted ''March 9, 1967''
    for ''December 31, 1967''.
      1966 - Subsec. (a)(2)(B). Pub. L. 89-809 added cl. (vii).
      Subsec. (d). Pub. L. 89-800, Sec. 1(b), inserted provisions
    covering the treatment of suspension period property, and the
    elections to be deemed made in connection therewith.
      Subsecs. (h) to (k). Pub. L. 89-800, Sec. 1(a), added subsecs.
    (h) to (j) and redesignated former subsec. (h) as (k).
      1964 - Subsec. (a)(1)(C). Pub. L. 88-272, Sec. 203(c)(2), added
    subpar. (C).
      Subsec. (d). Pub. L. 88-272, Sec. 203(a)(3)(A), (b), substituted
    ''except as provided in paragraph (2)'' for ''if such property was
    constructed by the lessor (or by a corporation which controls or is
    controlled by the lessor within the meaning of section 368(c))'' in
    par. (1), ''if such property is leased by a corporation which is a
    member of an affiliated group (within the meaning of section
    46(a)(5) to another corporation which is a member of the same
    affiliated group'' for ''if paragraph (1) does not apply'' in par.
    (2), and deleted provisions which stated that if a lessor made an
    election under this subsection, subsec. (g) would not apply with
    respect to such property, and deductions otherwise allowable under
    section 162 to the lessee for amounts paid the lessor would be
    adjusted consistent with subsec. (g).
      Subsec. (g). Pub. L. 88-272, Sec. 203(a)(1), repealed subsec. (g)
    which required that the basis of section 38 property be reduced by
    7 percent of the qualified investment.
                      EFFECTIVE DATE OF 2005 AMENDMENT
      Amendments by Energy Policy Act 2005, Sec.1336 and 1337,
      shall apply to periods after December 31, 2005, in taxable
      years ending after such date, under rules similar to the
      rules of section 48(m) of the Internal Revenue Code of 1986
     (as in effect on the day before the date of the enactment of
      the Revenue Reconciliation Act of 1990).              
                      EFFECTIVE DATE OF 1992 AMENDMENT
      Section 1916(b) of Pub. L. 102-486 provided that: ''The
    amendments made by this section (amending this section) shall take
    effect on June 30, 1992.''
                      EFFECTIVE DATE OF 1990 AMENDMENT
      Amendment by section 11813(a) of Pub. L. 101-508 applicable to
    property placed in service after Dec. 31, 1990, but not applicable
    to any transition property (as defined in section 49(e) of this
    title), any property with respect to which qualified progress
    expenditures were previously taken into account under section 46(d)
    of this title, and any property described in section 46(b)(2)(C) of
    this title, as such sections were in effect on Nov. 4, 1990, see
    section 11813(c) of Pub. L. 101-508, set out as a note under
    section 29 of this title.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-647 effective, except as otherwise
    provided, as if included in the provision of the Tax Reform Act of
    1986, Pub. L. 99-514, to which such amendment relates, see section
    1019(a) of Pub. L. 100-647, set out as a note under section 1 of
    this title.
                      EFFECTIVE DATE OF 1986 AMENDMENT
      If any interest costs incurred after Dec. 31, 1986, are
    attributable to costs incurred before Jan. 1, 1987, the amendment
    by section 803(b)(2)(B) of Pub. L. 99-514 is applicable to such
    interest costs only to the extent such interest costs are
    attributable to costs which were required to be capitalized under
    section 263 of the Internal Revenue Code of 1954 and which would
    have been taken into account in applying section 189 of the
    Internal Revenue Code of 1954 (as in effect before its repeal by
    section 803 of Pub. L. 99-514) or, if applicable, section 266 of
    such Code, see section 7831(d)(2) of Pub. L. 101-239, set out as an
    Effective Date note under section 263A of this title.
      Amendment by section 251(b), (c) of Pub. L. 99-514 applicable to
    property placed in service after Dec. 31, 1986, in taxable years
    ending after such date, except as otherwise provided for certain
    rehabilitations, see section 251(d) of Pub. L. 99-514, set out as a
    note under section 46 of this title.
      Amendment by section 701(e)(4)(C) of Pub. L. 99-514 applicable to
    taxable years beginning after Dec. 31, 1986, with certain
    exceptions and qualifications, see section 701(f) of Pub. L.
    99-514, set out as an Effective Date note under section 55 of this
    title.
      Amendment by section 803(b)(2)(B) of Pub. L. 99-514 applicable to
    costs incurred after Dec. 31, 1986, in taxable years ending after
    such date, except as otherwise provided, see section 803(d) of Pub.
    L. 99-514, set out as an Effective Date note under section 263A of
    this title.
      Amendment by sections 1272(d)(5) and 1275(c)(5) of Pub. L. 99-514
    applicable to taxable years beginning after Dec. 31, 1986, with
    certain exceptions and qualifications, see section 1277 of Pub. L.
    99-514, set out as a note under section 931 of this title.
      Amendment by section 1511(c)(3) of Pub. L. 99-514 applicable for
    purposes of determining interest for periods after Dec. 31, 1986,
    see section 1511(d) of Pub. L. 99-514, set out as a note under
    section 47 of this title.
      Section 1879(j)(2) of Pub. L. 99-514 provided that: ''The
    amendments made by this subsection (amending this section) shall
    apply to periods after December 31, 1978 (under rules similar to
    the rules of section 48(m) of the Internal Revenue Code of 1954
    (now 1986)), in taxable years ending after such date.''
      Section 1881 of title XVIII of Pub. L. 99-514 provided that:
    ''Except as otherwise provided in this subtitle, any amendment made
    by this subtitle (subtitle A (Sec. 1801-1881) of title XVIII of
    Pub. L. 99-514, see Tables for classification) shall take effect as
    if included in the provision of the Tax Reform Act of 1984 (Pub. L.
    98-369, div.  A) to which such amendment relates.''
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-121 applicable with respect to property
    placed in service by the taxpayer after May 8, 1985, with specified
    exceptions, but amendment of subsec. (g)(2)(B)(v) not applicable to
    leases entered into before May 22, 1985, if the lessee signed the
    lease before May 17, 1985, see section 105(b)(1), (5) of Pub. L.
    99-121, set out as a note under section 168 of this title.
                      EFFECTIVE DATE OF 1984 AMENDMENT
      Section 18 of Pub. L. 98-369 provided that:
      ''(a) General Rule. - The amendments made by this part (part I
    (Sec. 11-18) of subtitle A of title I of div.  A of Pub. L. 98-369,
    amending this section and sections 41, 46, 57, 128, 168, 179, 265,
    415, 854, 857, and 911 of this title, enacting provisions set out
    as a note under section 168 of this title, and amending provisions
    set out as notes under sections 128 and 168 of this title) shall
    apply to taxable years ending after December 31, 1983.
      ''(b) Special Rule for Section 14. - The amendment made by
    section 14 (amending section 41 of this title) shall not apply in
    the case of a tax credit employee stock ownership plan if -
        ''(1) such plan was favorably approved on September 23, 1983,
      by employees, and
        ''(2) not later than January 11, 1984, the employer of such
      employees was 100 percent owned by such plan.''
      Amendment by section 31(b), (c)(1) of Pub. L. 98-369 effective,
    except as otherwise provided in section 31(g) of Pub. L. 98-369, as
    to property placed in service by the taxpayer after May 23, 1983,
    in taxable years ending after such date and to property placed in
    service by the taxpayer on or before May 23, 1983, if the lease to
    the tax-exempt entity is entered into after May 23, 1983, and
    amendment by section 31(c)(2) of Pub. L. 98-369, to the extent it
    relates to section 168(f)(12) of this title, effective as if it had
    been included in the amendments to section 168 of this title by
    section 216(a) of Pub. L. 97-248, see section 31(g)(1), (12) of
    Pub. L. 98-369, set out as a note under section 168 of this title.
      Amendment by section 111(e)(8) of Pub. L. 98-369 applicable with
    respect to property placed in service by the taxpayer after Mar.
    15, 1984, subject to certain exceptions, see section 111(g) of Pub.
    L. 98-369, set out as a note under section 168 of this title.
      Amendment by section 113(b)(3) of Pub. L. 98-369 applicable as if
    included in the amendments made by sections 201(a), 211(a)(1), and
    211(f)(1) of Pub. L. 97-34, which enacted section 168 and amended
    section 46 of this title, see section 113(c)(2)(B) of Pub. L.
    98-369, set out as a note under section 168 of this title.
      Amendment by section 113(b)(4) of Pub. L. 98-369 applicable as if
    included in the amendments made by section 205(a)(1) of Pub. L.
    97-248, see section 113(c)(2)(C) of Pub. L. 98-369, set out as a
    note under section 168 of this title.
      Section 113(c)(1) of Pub. L. 98-369 provided that: ''The
    amendments made by subsection (a) (amending this section and
    section 168 of this title) shall apply to property placed in
    service after March 15, 1984, in taxable years ending after such
    date.''
      Section 114(b) of Pub. L. 98-369 provided that: ''The amendment
    made by this section (amending this section) shall apply to
    property originally placed in service after April 11, 1984
    (determined without regard to such amendment).''
      Amendment by section 431(c) of Pub. L. 98-369 applicable to
    property placed in service after July 18, 1984, in taxable years
    ending after such date, but not applicable to property to which
    sections 46(c)(8), (9) and 47(d) of this title, as enacted by
    section 211(f) of Pub. L. 97-34, do not apply, with the taxpayer
    having an option to elect retroactive application of amendment by
    Pub. L. 98-369, see section 431(e) of Pub. L. 98-369, set out as a
    note under section 46 of this title.
      Amendment by section 474(o)(10)-(18) of Pub. L. 98-369 applicable
    to taxable years beginning after Dec. 31, 1983, and to carrybacks
    from such years, see section 475(a) of Pub. L. 98-369, set out as a
    note under section 21 of this title.
      Section 474(o)(15) of Pub. L. 98-369, as amended by Pub. L.
    99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
    ''Subsection (n) of section 48 (relating to requirements for
    allowance of employee plan percentage) is hereby repealed; except
    that paragraph (4) of section 48(n) of the Internal Revenue Code of
    1986 (formerly I.R.C. 1954) (as in effect before its repeal by this
    paragraph) shall continue to apply in the case of any recapture
    under section 47(f) of such Code of a credit allowable for a
    taxable year beginning before January 1, 1984.''
      Amendment by section 712(b) of Pub. L. 98-369 effective as if
    included in the provision of the Tax Equity and Fiscal
    Responsibility Act of 1982, Pub. L. 97-248, to which such amendment
    relates, see section 715 of Pub. L. 98-369, set out as a note under
    section 31 of this title.
      Amendment by section 721(x)(1) of Pub. L. 98-369 effective as if
    included in the Subchapter S Revision Act of 1982, Pub. L. 97-354,
    see section 721(y)(1) of Pub. L. 98-369, set out as a note under
    section 1361 of this title.
      Amendment by section 735(c)(1) of Pub. L. 98-369 effective,
    except as otherwise provided, as if included in the provisions of
    the Highway Revenue Act of 1982, title V of Pub. L. 97-424, to
    which such amendment relates, see section 736 of Pub. L. 98-369,
    set out as a note under section 4051 of this title.
      Section 1043(b) of Pub. L. 98-369 provided that: ''The amendments
    made by this section (amending this section) shall apply to
    expenditures incurred after December 31, 1983, in taxable years
    ending after such date.''
                      EFFECTIVE DATE OF 1983 AMENDMENT
      Amendment by title I of Pub. L. 97-448 effective, except as
    otherwise provided, as if it had been included in the provision of
    the Economic Recovery Tax Act of 1981, Pub. L. 97-34, to which such
    amendment relates, see section 109 of Pub. L. 97-448, set out as a
    note under section 1 of this title.
      Amendment by section 202(c) of Pub. L. 97-448 effective, except
    as otherwise provided, as if it had been included in the provision
    of the Crude Oil Windfall Profit Tax Act of 1980, Pub. L. 96-223 to
    which such amendment relates, see section 203(a) of Pub. L. 97-448,
    set out as a note under section 6652 of this title.
      Amendment by section 306(a)(3) of Pub. L. 97-448 effective as if
    included in the provisions of the Tax Equity and Fiscal
    Responsibility Act of 1982, Pub. L. 97-248, to which such amendment
    relates, see section 311(d) of Pub. L. 97-448, set out as a note
    under section 31 of this title.
             EFFECTIVE AND TERMINATION DATES OF 1982 AMENDMENTS
      Section 104(b) of Pub. L. 97-362, as amended by Pub. L. 99-514,
    Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
    amendment made by this section (amending this section) shall apply
    to periods beginning after December 31, 1980, and before January 1,
    1983, under rules similar to the rules of section 48(m) of the
    Internal Revenue Code of 1986 (formerly I.R.C. 1954).''
      Amendment by Pub. L. 97-354 applicable to taxable years beginning
    after Dec. 31, 1982, see section 6(a) of Pub. L. 97-354, set out as
    an Effective Date note under section 1361 of this title.
      Amendment by section 205(a)(1), (4), (5)(A) of Pub. L. 97-248,
    applicable to periods after Dec. 31, 1982, under rules similar to
    the rules of subsec. (m) of this section, with certain exceptions
    and qualifications, see section 205(c)(1) of Pub. L. 97-248, set
    out as an Effective Date note under section 196 of this title.
      Amendment by section 209(c) of Pub. L. 97-248 applicable to
    property placed in service after Dec. 31, 1983, but not to
    qualified leased property described in section 168(f)(8)(D)(v) of
    this title which is placed in service before Jan. 1, 1988, or is
    placed in service after such date pursuant to a binding contract or
    commitment entered into before April 1, 1983, and solely because of
    conditions which, as determined by the Secretary of the Treasury or
    his delegate, are not within the control of the lessor or lessee,
    see sections 208(d)(5) and 209(d)(2) of Pub. L. 97-248, set out as
    notes under section 168 of this title.
                      EFFECTIVE DATE OF 1981 AMENDMENT
      Section 213(b) of Pub. L. 97-34, as amended by Pub. L. 97-448,
    title I, Sec. 102(g), Jan. 12, 1983, 96 Stat. 2372, provided that:
    ''The amendment made by this section (amending this section) shall
    apply to taxable years beginning after December 31, 1980.''
      Section 214(c) of Pub. L. 97-34 provided that: ''The amendments
    made by this section (amending this section) shall apply to uses
    after July 29, 1980, in taxable years ending after such date.''
      Section 332(c)(2) of Pub. L. 97-34 provided that: ''The amendment
    made by subsection (b) (amending this section) shall apply to
    qualified investments made after December 31, 1981.''
      Amendment by section 211(a)(2), (e)(3), (4) of Pub. L. 97-34
    applicable to property placed in service after Dec. 31, 1980, see
    section 211(i)(1) of Pub. L. 97-34, set out as a note under section
    46 of this title.
      Amendment by section 211(c) of Pub. L. 97-34 applicable to
    periods after Dec. 31, 1980, under rules similar to the rules under
    subsec. (m) of this section, see section 211(i)(3) of Pub. L.
    97-34, set out as a note under section 46 of this title.
      Amendment by section 211(h) of Pub. L. 97-34 applicable to
    taxable years beginning after Dec. 31, 1980, see section 211(i)(6)
    of Pub. L. 97-34, set out as a note under section 46 of this title.
      Amendment by section 212(a)(3), (b), (c), (d)(2)(A) of Pub. L.
    97-34 applicable to expenditures incurred after Dec. 31, 1981, in
    taxable years ending after such date, see section 212(e) of Pub. L.
    97-34, set out as a note under section 46 of this title.
                     EFFECTIVE DATE OF 1980 AMENDMENTS
      Section 109(b) of Pub. L. 96-605 provided that: ''The amendment
    made by subsection (a) (amending this section) shall apply to
    taxable years beginning after December 31, 1979.''
      Section 223(b) of Pub. L. 96-605 provided that: ''The amendments
    made by subsection (a) (amending this section) shall apply with
    respect to taxable years beginning after December 31, 1980.''
      Section 302(b) of Pub. L. 96-451 provided that: ''The amendments
    made by this section (amending this section) shall apply with
    respect to additions to capital account made after December 31,
    1979.''
      Section 222(j) of Pub. L. 96-223, as amended by Pub. L. 99-514,
    Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
      ''(1) In general. - Except as provided in paragraph (2), the
    amendments made by this section (amending this section and section
    46 of this title) shall apply to periods after December 31, 1979,
    under rules similar to the rules of section 48(m) of the Internal
    Revenue Code of 1986 (formerly I.R.C. 1954).
      ''(2) Alumina electrolytic cells. - The amendments made by
    subsection (d)(1) (amending this section) shall apply to periods
    after September 30, 1978, under rules similar to the rules of
    section 48(m) of such Code.''
      Section 223(a)(2) of Pub. L. 96-223, as amended by Pub. L.
    99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
    amendment made by paragraph (1) (amending this section) shall apply
    to periods after December 31, 1979, under rules similar to the
    rules of section 48(m) of the Internal Revenue Code of 1986
    (formerly I.R.C. 1954).''
      Section 223(c)(2) of Pub. L. 96-223, as amended by Pub. L.
    99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
      ''(A) In general. - Except as provided in subparagraph (B), the
    amendment made by paragraph (1) (amending this section) shall apply
    to periods after December 31, 1982, under rules similar to the
    rules of section 48(m) of the Internal Revenue Code of 1986
    (formerly I.R.C. 1954).''
      ''(B) Earlier application for certain property. - In the case of
    property which is -
        ''(i) qualified hydroelectric generating property (described in
      section 48(l)(2)(A)(vii) of such Code),
        ''(ii) cogeneration equipment (described in section
      48(l)(2)(A)(viii) of such Code),
        ''(iii) qualified intercity buses (described in section
      48(l)(2)(A)(ix) of such Code),
        ''(iv) ocean thermal property (described in section
      48(l)(3)(A)(ix) of such Code), or
        ''(v) expanded energy credit property,
    the amendment made by paragraph (1) shall apply to periods after
    December 31, 1979, under rules similar to the rules of section
    48(m) of the Internal Revenue Code of 1986.
      ''(C) Expanded energy credit property. - For purposes of
    subparagraph (B), the term 'expanded energy credit property' means
    -
        ''(i) property to which section 48(l)(3)(A) of such Code
      applies because of the amendments made by paragraphs (1) and (2)
      of section 222(b) (amending this section),
        ''(ii) property described in section 48(l)(4)(C) of such Code
      (relating to solar process heat),
        ''(iii) property described in section 48(l)(5)(L) of such Code
      (relating to alumina electrolytic cells), and
        ''(iv) property described in the last sentence of section
      48(l)(3)(A) of such Code (relating to storage equipment for
      refuse-derived fuel).
      ''(D) Financing taken into account. - For the purpose of applying
    the provisions of section 48(l)(11) of such Code in the case of
    property financed in whole or in part by subsidized energy
    financing (within the meaning of section 48(l)(11)(C) of such
    Code), no financing made before January 1, 1980, shall be taken
    into account.  The preceding sentence shall not apply to financing
    provided from the proceeds of any tax exempt industrial development
    bond (within the meaning of section 103(b)(2) of such Code).''
      Amendment by Pub. L. 96-222 effective, except as otherwise
    provided, as if it had been included in the provisions of the
    Revenue Act of 1978, Pub. L. 95-600, to which such amendment
    relates, see section 201 of Pub. L. 96-222, set out as a note under
    section 32 of this title.
      Section 108(c)(7) of Pub. L. 96-222 provided that: ''Any
    amendment made by this subsection (amending sections 4071, 4221,
    6416, and 6421 of this title) shall take effect as if included in
    the provision of the Energy Tax Act of 1978 (See Short Title of
    1978 Amendment note set out under section 1 of this title) to which
    such amendment relates; except that the amendment made by paragraph
    (6) (amending this section) shall take effect on the first day of
    the first calendar month which begins more than 10 days after the
    date of the enactment of this Act (Apr. 1, 1980).''
                     EFFECTIVE DATE OF 1978 AMENDMENTS
      Section 301(d)(4) of Pub. L. 95-618 provided that:
      ''(A) In general. - The amendments made by this subsection
    (amending this section and section 167 of this title) shall apply
    to property which is placed in service after September 30, 1978.
      ''(B) Binding contracts. - The amendments made by this subsection
    (amending this section and section 167 of this title) shall not
    apply to property which is constructed, reconstructed, erected, or
    acquired pursuant to a contract which, on October 1, 1978, and at
    all times thereafter, was binding on the taxpayer.''
      Amendment by section 141(b) of Pub. L. 95-600 effective with
    respect to qualified investment for taxable years beginning after
    Dec. 31, 1978, see section 141(g)(1) of Pub. L. 95-600, set out as
    an Effective Date note under section 409 of this title.
      Amendment by section 312(c)(1), (2), (3) of Pub. L. 95-600
    applicable to taxable years ending after Dec. 31, 1978, see section
    312(d) of Pub. L. 95-600, set out as a note under section 46 of
    this title.
      Section 314(c) of Pub. L. 95-600 provided that: ''The amendments
    made by subsections (a) and (b) (amending this section) shall apply
    to taxable years ending after August 15, 1971.''
      Section 315(d) of Pub. L. 95-600 provided that: ''The amendments
    made by this section (amending this section) shall apply to taxable
    years ending after October 31, 1978; except that the amendment made
    by subsection (c) shall only apply with respect to property placed
    in service after such date.''
      Amendment by section 703(a)(3), (4) of Pub. L. 95-600 effective
    on Oct. 4, 1976, see section 703(r) of Pub. L. 95-600, set out as a
    note under section 46 of this title.
                      EFFECTIVE DATE OF 1976 AMENDMENT
      Amendment by section 802(b)(6) of Pub. L. 94-455 applicable to
    taxable years beginning after Dec. 31, 1975, see section 802(c) of
    Pub. L. 94-455, set out as a note under section 46 of this title.
      Section 804(e) of Pub. L. 94-455, as amended by Pub. L. 99-514,
    Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
        ''(1) In general. - The amendments made by subsections (a) and
      (b) (amending this section and section 47 of this title) shall
      apply to taxable years beginning after December 31, 1974.
        ''(2) Election may also apply to property described in section
      50(a). - At the election of the taxpayer, made within 1 year
      after the date of the enactment of this Act (Oct. 4, 1976) in
      such manner as the Secretary of the Treasury or his delegate may
      by regulations prescribe, the amendments made by subsections (a)
      and (b) shall also apply to property which is property described
      in section 50(a) of the Internal Revenue Code of 1986 (formerly
      I.R.C. 1954) and which is placed in service in taxable years
      beginning before January 1, 1975.''
      Amendment by section 1051(h)(1) of Pub. L. 94-455 applicable to
    taxable years beginning after Dec. 31, 1975 with certain
    exceptions, see section 1051(i) of Pub. L. 94-455, set out as a
    note under section 27 of this title.
      Amendment by section 1901(a)(5), (b)(11)(A) of Pub. L. 94-455
    applicable with respect to taxable years beginning after Dec. 31,
    1976, see section 1901(d) of Pub. L. 94-455, set out as a note
    under section 2 of this title.
      Amendment by section 2112(a) of Pub. L. 94-455 applicable to
    property acquired by the taxpayer after Dec. 31, 1976, and
    property, the construction, reconstruction, or erection of which
    was completed by the taxpayer after Dec. 31, 1976, (but only to the
    extent of the basis thereof attributable to construction,
    reconstruction, or erection after such date), in taxable years
    beginning after such date, see section 2112(d)(1) of Pub. L.
    94-455, set out as a note under section 46 of this title.
             EFFECTIVE AND TERMINATION DATES OF 1975 AMENDMENT
      Section 301(c)(2) of Pub. L. 94-12, as amended by Pub. L. 94-455,
    title VIII, Sec. 801, Oct. 4, 1976, 90 Stat. 1580; Pub. L. 95-600,
    title III, Sec. 311(b), Nov. 6, 1978, 92 Stat. 2824, provided that:
    ''The amendments made by paragraph (1) (amending this section)
    shall apply only to taxable years beginning after December 31,
    1974.''
      Amendment by section 302(c)(3) of Pub. L. 94-12 applicable to
    taxable years ending after Dec. 31, 1974, see section 305(a) of
    Pub. L. 94-12, set out as an Effective Date of 1975 Amendment note
    under section 46 of this title.
      Section 604(b) of Pub. L. 94-12, as amended by Pub. L. 99-514,
    Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
        ''(1) In general. - The amendments made by subsection (a)
      (amending this section) shall apply to property, the
      construction, reconstruction, or erection of which was completed
      after March 18, 1975, or the acquisition of which by the taxpayer
      occurred after such date.
        ''(2) Binding contract. - The amendments made by subsection (a)
      (amending this section) shall not apply to property constructed,
      reconstructed, erected, or acquired pursuant to a contract which
      was on April 1, 1974, and at all times thereafter, binding on the
      taxpayer.
        ''(3) Certain lease-back transactions, etc. - Where a person
      who is a party to a binding contract described in paragraph (2)
      transfers rights in such contract (or in the property to which
      such contract relates) to another person but a party to such
      contract retains a right to use the property under a lease with
      such other person, then to the extent of the transferred rights
      such other person shall, for purposes of paragraph (2), succeed
      to the position of the transferor with respect to such binding
      contract and such property.  The preceding sentence shall apply,
      in any case in which the lessor does not make an election under
      section 48(d) of the Internal Revenue Code of 1986 (formerly
      I.R.C. 1954), only if a party to such contract retains a right to
      use the property under a long-term lease.''
                      EFFECTIVE DATE OF 1971 AMENDMENT
      Section 104(h) of Pub. L. 92-178, as amended by Pub. L. 99-514,
    Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
    amendments made by this section (amending this section and sections
    169 and 1245 of this title) (other than by subsections (c)(1),
    (c)(2), and (g) (amending this section)) shall apply to property
    described in section 50 of the Internal Revenue Code of 1986
    (formerly I.R.C. 1954). The amendments made by subsections (c)(1),
    (c)(2), and (g) (amending this section) shall apply to taxable
    years ending after December 31, 1961.''
      Amendment by section 108(b), (c) of Pub. L. 92-178, applicable to
    leases entered into after Sept. 22, 1971, and after Nov. 8, 1971,
    respectively, see section 108(d) of Pub. L. 92-178, set out as a
    note under section 46 of this title.
                      EFFECTIVE DATE OF 1969 AMENDMENT
      Amendment by section 121(d)(2)(A) of Pub. L. 91-172 applicable to
    taxable years beginning after Dec. 31, 1969, see section 121(g) of
    Pub. L. 91-172, set out as a note under section 511 of this title.
      Amendment by section 401(e)(2)-(4) of Pub. L. 91-172 applicable
    with respect to taxable years ending on or after Dec. 31, 1970, see
    section 401(h)(3) of Pub. L. 91-172, set out as a note under
    section 1561 of this title.
                      EFFECTIVE DATE OF 1967 AMENDMENT
      Section 4 of Pub. L. 90-26 provided that: ''The amendments made
    by the first three sections of this Act (amending this section and
    section 167 of this title) shall apply to taxable years ending
    after March 9, 1967.''
                     EFFECTIVE DATE OF 1966 AMENDMENTS
      Section 201(b) of Pub. L. 89-809, as amended by Pub. L. 99-514,
    Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
    amendments made by subsection (a) (amending this section) shall
    apply to taxable years ending after December 31, 1965, but only
    with respect to property placed in service after such date.  In
    applying section 46(b) of the Internal Revenue Code of 1986
    (formerly I.R.C. 1954) (relating to carryback and carryover of
    unused credits), the amount of any investment credit carryback to
    any taxable year ending on or before December 31, 1965, shall be
    determined without regard to the amendments made by this section.''
      Amendment by Pub. L. 89-800 applicable to taxable years ending
    after Oct. 9, 1966, see section 4 of Pub. L. 89-800, set out as a
    note under section 46 of this title.
                      EFFECTIVE DATE OF 1964 AMENDMENT
      Section 203(a)(4) of Pub. L. 88-272 provided that: ''Paragraphs
    (1) (amending this section) and (3) (amending this section and
    section 1016 of this title and repealing section 181 of this title)
    of this subsection shall apply -
        ''(A) in the case of property placed in service after December
      31, 1963, with respect to taxable years ending after such date,
      and
        ''(B) in the case of property placed in service before January
      1, 1964, with respect to taxable years beginning after December
      31, 1963.''
      Section 203(f) of Pub. L. 88-272 provided that:
      ''(1) The amendments made by subsection (b) (amending this
    section) shall apply with respect to property possession of which
    is transferred to a lessee on or after the date of enactment of
    this Act (Feb. 26, 1964).
      ''(2) The amendments made by subsection (c) (amending this
    section) shall apply with respect to taxable years ending after
    June 30, 1963.
      ''(3) The amendments made by subsection (d) (amending section
    1245 of this title) shall apply with respect to dispositions after
    December 31, 1963, in taxable years ending after such date.''
                               EFFECTIVE DATE
      Section applicable with respect to taxable years ending after
    Dec. 31, 1961, see section 2(h) of Pub. L. 87-834, set out as a
    note under section 46 of this title.
                             SAVINGS PROVISION
      For provisions that nothing in amendment by Pub. L. 101-508 be
    construed to affect treatment of certain transactions occurring,
    property acquired, or items of income, loss, deduction, or credit
    taken into account prior to Nov. 5, 1990, for purposes of
    determining liability for tax for periods ending after Nov. 5,
    1990, see section 11821(b) of Pub. L. 101-508, set out as a note
    under section 29 of this title.
 

Transfer of Functions.

                           TRANSFER OF FUNCTIONS
      Functions, powers, and duties of Federal Aviation Agency and of
    Administrator and other offices and officers thereof transferred by
    Pub. L. 89-670, Oct. 15, 1966, 80 Stat. 931, to Secretary of
    Transportation, with functions, powers, and duties of Secretary of
    Transportation pertaining to aviation safety to be exercised by
    Federal Aviation Administrator in Department of Transportation, see
    section 106 of Title 49, Transportation.
 

Miscellaneous

             PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
      For provisions directing that if any amendments made by subtitle
    A or subtitle C of title XI (Sec. 1101-1147 and 1171-1177) or title
    XVIII (Sec. 1800-1899A) of Pub. L. 99-514 require an amendment to
    any plan, such plan amendment shall not be required to be made
    before the first plan year beginning on or after Jan. 1, 1989, see
    section 1140 of Pub. L. 99-514, as amended, set out as a note under
    section 401 of this title.
     APPLICABILITY OF CERTAIN AMENDMENTS BY PUB. L. 99-514 IN RELATION
                   TO TREATY OBLIGATIONS OF UNITED STATES
      For applicability of amendment by section 701(e)(4)(C) of Pub. L.
    99-514 notwithstanding any treaty obligation of the United States
    in effect on Oct. 22, 1986, with provision that for such purposes
    any amendment by title I of Pub. L. 100-647 be treated as if it had
    been included in the provision of Pub. L. 99-514 to which such
    amendment relates, see section 1012(aa)(2), (4) of Pub. L. 100-647,
    set out as a note under section 861 of this title.
                                SPECIAL RULE
      Section 1879(j)(3) of Pub. L. 99-514 provided that: ''If refund
    or credit of any overpayment of tax resulting from the application
    of this subsection (amending this section) is prevented at any time
    before the close of the date which is 1 year after the date of the
    enactment of this Act (Oct. 22, 1986) by operation of any law or
    rule of law (including res judicata), refund or credit of such
    overpayment (to the extent attributable to the application of the
    amendments made by this subsection (amending this section)) may,
    nevertheless, be made or allowed if claim therefor is filed before
    the close of such 1-year period.''
     CLARIFICATION OF EFFECT OF 1984 AMENDMENT ON INVESTMENT TAX CREDIT
      For provision that nothing in the amendments made by section
    474(o) of Pub. L. 98-369, which amended this section, be construed
    as reducing the investment tax credit in taxable years beginning
    before Jan. 1, 1984, see section 475(c) of Pub. L. 98-369, set out
    as a note under section 46 of this title.
          ALTERNATIVE METHODS OF COMPUTING CREDIT FOR PAST PERIODS
      Section 804(c) of Pub. L. 94-455, as amended by Pub. L. 99-514,
    Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
        ''(1) General rule for determining useful life, predominant
      foreign use, etc. - In the case of a qualified film (within the
      meaning of section 48(k)(1)(B) of the Internal Revenue Code of
      1986 (formerly I.R.C. 1954)) placed in service in a taxable year
      beginning before January 1, 1975, with respect to which neither
      an election under paragraph (2) of this subsection nor an
      election under subsection (e)(2) applies -
          ''(A) the applicable percentage under section 46(c)(2) of
        such Code shall be determined as if the useful life of the film
        would have expired at the close of the first taxable year by
        the close of which the aggregate amount allowable as a
        deduction under section 167 of such Code would equal or exceed
        90 percent of the basis of such property (adjusted for any
        partial dispositions),
          ''(B) for purposes of section 46(c)(1) of such Code, the
        basis of the property shall be determined by taking into
        account the total production costs (within the meaning of
        section 48(k)(5)(B) of such Code),
          ''(C) for purposes of section 48(a)(2) of such Code, such
        film shall be considered to be used predominantly outside the
        United States in the first taxable year for which 50 percent or
        more of the gross revenues received or accrued during the
        taxable year from showing the film were received or accrued
        from showing the film outside the United States, and
          ''(D) Section 47(a)(7) of such Code shall apply.
        ''(2) Election of 40-percent method. -
          ''(A) In general. - A taxpayer may elect to have this
        paragraph apply to all qualified films placed in service during
        taxable years beginning before January 1, 1975 (other than
        films to which an election under subsection (e)(2) of this
        section applies).
          ''(B) Effect of election. - If the taxpayer makes an election
        under this paragraph, then section 48(k) of the Internal
        Revenue Code of 1986 shall apply to all qualified films
        described in subparagraph (A) with the following modifications:
            ''(i) subparagraph (B) of paragraph (4) shall not apply,
          but in determining qualified investment under section
          46(c)(1) of such Code there shall be used (in lieu of the
          basis of such property) an amount equal to 40 percent of the
          aggregate production costs (within the meaning of paragraph
          (5)(B) of such section 48(k)),
            ''(ii) paragraph (2) shall be applied by substituting '100
          percent' for '66 2/3 percent', and
            ''(iii) paragraph (3) and paragraph (5) (other than
          subparagraph (B)) shall not apply.
          ''(C) Rules relating to elections. - An election under this
        paragraph shall be made not later than the day which is 6
        months after the date of the enactment of this Act (Oct. 4,
        1976) and shall be made in such manner as the Secretary of the
        Treasury or his delegate shall by regulations prescribe.  Such
        an election may be revoked only with the consent of the
        Secretary of the Treasury or his delegate.
          ''(D) The taxpayer must consent to join in certain
        proceedings. - No election may be made under this paragraph or
        subsection (e)(2) by any taxpayer unless he consents, under
        regulations prescribed by the Secretary of the Treasury or his
        delegate, to treat the determination of the investment credit
        allowable on each film subject to an election as a separate
        cause of action, and to join in any judicial proceeding for
        determining the person entitled to, and the amount of, the
        credit allowable under section 38 of the Internal Revenue Code
        of 1986 with respect to any film covered by such election.
        ''(3) Election to have credit determined in accordance with
      previous litigation. -
          ''(A) In general. - A taxpayer described in subparagraph (B)
        may elect to have this paragraph apply to all films (whether or
        not qualified) placed in service in taxable years beginning
        before January 1, 1975, and with respect to which an election
        under subsection (e)(2) is not made.
          ''(B) Who may elect. - A taxpayer may make an election under
        this paragraph if he has filed an action in any court of
        competent jurisdiction, before January 1, 1976, for a
        determination of such taxpayer's rights to the allowance of a
        credit against tax under section 38 of the Internal Revenue
        Code of 1986 for any taxable year beginning before January 1,
        1975, with respect to any film.
          ''(C) Effect of election. - If the taxpayer makes an election
        under this paragraph -
            ''(i) paragraphs (1) and (2) of this subsection, and
          subsection (d) shall not apply to any film placed in service
          by the taxpayer, and
            ''(ii) subsection 48(k) of the Internal Revenue Code of
          1986 shall not apply to any film placed in service by the
          taxpayer in any taxable year beginning before January 1,
          1975, and with respect to which an election under subsection
          (e)(2) is not made,
     and the right of the taxpayer to the allowance of a credit against
        tax under section 38 of such Code with respect to any film
        placed in service in any taxable year beginning before January
        1, 1975, and as to which an election under subsection (e)(2) is
        not made, shall be determined as though this section (other
        than this paragraph) has not been enacted.
          ''(D) Rules relating to elections. - An election under this
        paragraph shall be made not later than the day which is 90 days
        after the date of the enactment of this Act (Oct. 4, 1976), by
        filing a notification of such election with the national office
        of the Internal Revenue Service. Such an election, once made,
        shall be irrevocable.''
                           ENTITLEMENT TO CREDIT
      Section 804(d) of Pub. L. 94-455, as amended by Pub. L. 99-514,
    Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''Paragraph
    (1) of section 48(k) of the Internal Revenue Code of 1986 (formerly
    I.R.C. 1954) (relating to entitlement to credit) shall apply to any
    motion picture film or video tape placed in service in any taxable
    year beginning before January 1, 1975.''
     INCREASE IN BASIS OF PROPERTY PLACED IN SERVICE BEFORE JANUARY 1,
                                    1964
      Section 203(a)(2) of Pub. L. 88-272, as amended by Pub. L.
    99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
      ''(A) The basis of any section 38 property (as defined in section
    48(a) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954))
    placed in service before January 1, 1964, shall be increased, under
    regulations prescribed by the Secretary of the Treasury or his
    delegate, by an amount equal to 7 percent of the qualified
    investment with respect to such property under section 46(c) of the
    Internal Revenue Code of 1986. If there has been any increase with
    respect to such property under section 48(g)(2) of such Code, the
    increase under the preceding sentence shall be appropriately
    reduced therefor.
      ''(B) If a lessor made the election provided by section 48(d) of
    the Internal Revenue Code of 1986 with respect to property placed
    in service before January 1, 1964 -
        ''(i) subparagraph (A) shall not apply with respect to such
      property, but
        ''(ii) under regulations prescribed by the Secretary of the
      Treasury or his delegate, the deductions otherwise allowable
      under section 162 of such Code to the lessee for amounts paid to
      the lessor under the lease (or, if such lessee has purchased such
      property, the basis of such property) shall be adjusted in a
      manner consistent with subparagraph (A).
      ''(C) The adjustments under this paragraph shall be made as of
    the first day of the taxpayer's first taxable year which begins
    after December 31, 1963.''
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 29, 50, 168, 409, 1274A
    of this title.
 

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