SECTION 3. DEFINITIONS, ETC.

.01 Definitions . The following definitions apply for purposes of this notice:

(1) Qualified fuel cell property . Qualified fuel cell property is a fuel cell power plant that satisfies the following conditions:

(a) The plant has a nameplate capacity of at least 0.5 kilowatt of electricity using an electrochemical process.

(b) The plant has an electricity-only generation efficiency greater than 30 percent.

(c) The plant is within the credit period as determined under section 3.03 of this notice.

(2) Qualified fuel cell energy property . Qualified fuel cell energy property is qual

ified fuel cell property that satisfies the requirements of section 3.02 of this notice.

(3) Qualified microturbine property . Qualified microturbine property is a stationary microturbine power plant that satisfies the following conditions:

(a) The plant has a nameplate capacity of less than 2,000 kilowatts.

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

(c) The plant is within the credit period as determined under section 3.03 of this notice.

(4) Qualified microturbine energy prop- erty . Qualified microturbine energy property is qualified microturbine property that satisfies the requirements of section 3.02 of this notice.

(5) Fuel cell power plant . A fuel cell power plant is 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.

(6) Stationary microturbine power plant . A stationary microturbine power plant is 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 that converts a fuel into electricity and thermal energy. A stationary microturbine power plant 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.

(7) Nameplate capacity . Nameplate capacity is the maximum electrical output of a generator as rated by the manufacturer. In the case of a fuel cell power plant, nameplate capacity is determined at the normal operating conditions designated by the manufacturer. In the case of a stationary microturbine power plant, nameplate capacity is determined at ISO conditions.

.02 Qualification as Energy Property . Qualified fuel cell property and qualified microturbine property are energy property for which an energy credit is allowable

only if the following conditions are satisfied:

(1) Depreciation (or amortization in lieu of depreciation) is allowable to the taxpayer with respect to the property.

(2) The construction, reconstruction, or erection of the property is completed by the taxpayer or the property is acquired by and its original use begins with the taxpayer.

(3) The property meets all applicable quality and performance standards in regulations prescribed under § 48 after consultation with the Secretary of Energy. Any such standard will not apply to property acquired before the date on which the standard is published in the Federal Register.

(4) Except as otherwise provided in this section 3.02(4), the property is not public utility property (as defined in § 46(f)(5) as in effect on November 4, 1990). This condition does not apply to qualified fuel cell property or qualified microturbine property that is used predominantly in the trade or business of the furnishing or sale of telephone service or telegraph service (other than international telegraph service) and such property may qualify for the energy credit even if it is public utility property,

.03 Credit period . The credit period for purposes of sections 3.01(1) and 3.01(3) of this notice is the period after December 31, 2005, and before January 1, 2009. The extent to which a fuel cell power plant or a stationary microturbine power plant is within the credit period is determined under the rules of § 48(m) as in effect on November 4, 1990.

.04 Cross References to Applicable Regulations . The following provisions of the Income Tax Regulations (26 CFR Part

1. apply for purposes of this notice: (1) Original use . Whether the original use of property begins with the taxpayer is determined under the principles of § 1.48–2.

(2) Depreciation . Whether depreciation (or amortization in lieu of depreciation) is allowable to the taxpayer with respect to property is determined under the principles of § 1.48–1(b).

(3) Placed in service . The year in which property is placed in service is determined under the principles of § 1.46–3(d).

2008–34 I.R.B. 418 August 25, 2008

keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe. The books and records required by § 6001 must be kept at all times available for inspection by authorized internal revenue officers or employees, and must be retained so long as the contents thereof may become material in the administration of any internal revenue law. In order to satisfy the recordkeeping requirements of § 6001 and the regulations thereunder, a taxpayer that claims the fuel cell credit or the microturbine credit must retain adequate books and records so that, for any taxable year, it can be verified from those books and records that the property with respect to which the credit is claimed satisfies the applicable requirements of § 48 and this notice.