by certain public entities (1) In general If, with respect to a credit under subsection (a) for any taxable year— (A) a qualified public entity would be the taxpayer (but for this paragraph), and (B) such entity elects the application of this paragraph for such taxable year with respect to all (or any portion specified in such election) of such credit, the eligible project partner specified in such election, and not the qualified public entity, shall be treated as the taxpayer for purposes of this title with respect to such credit (or such portion thereof). (2) Definitions For purposes of this subsection— (A) Qualified public entity The term qualified public entity means— (i) a Federal, State, or local government entity, or any political subdivision, agency, or instrumentality thereof, (ii) a mutual or cooperative electric company described in section 501(c)(12) or 1381(a)(2), or (iii) a not-for-profit electric utility which had or has received a loan or loan guarantee under the Rural Electrification Act of 1936. (B) Eligible project partner The term eligible project partner means any person who— (i) is responsible for, or participates in, the design or construction of the qualified production facility to which the credit under subsection (a) relates, (ii) is a financial institution providing financing for the construction or operation of such facility, or (iii) has an ownership interest in such facility. (3) Special rules (A) Application to partnerships In the case of a credit under subsection (a) which is determined at the partnership level— (i) for purposes of paragraph (1)(A), a qualified public entity shall be treated as the taxpayer with respect to such entity’s distributive share of such credit, and (ii) the term eligible project partner shall include any partner of the partnership. (B) Taxable year in which credit taken into account In the case of any credit (or portion thereof) with respect to which an election is made under paragraph (1), such credit shall be taken into account in the first taxable