; (2) by striking the period at the end of paragraph (5) and inserting , and ; and (3) by adding at the end the following new paragraph: (6) 30 percent of the qualified biomass fuel property expenditures made by the taxpayer during such year. . (b) Qualified biomass fuel property expenditures Subsection (d) of section 25D of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (6) Qualified biomass fuel property expenditure (A) In general The term qualified biomass fuel property expenditure means an expenditure for property— (i) which uses the burning of biomass fuel to heat a dwelling unit located in the United States and used as a residence by the taxpayer, or to heat water for use in such a dwelling unit, and (ii) which has a thermal efficiency rating of at least 75 percent (measured by the higher heating value of the fuel). (B) Biomass fuel For purposes of this section, the term biomass fuel means any plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues, plants (including aquatic plants), grasses, residues, and fibers. Such term includes densified biomass fuels such as wood pellets. . (c) Application of termination date Subsection (h) of section 25D of the Internal Revenue Code of 1986 is amended by striking and qualified solar water heating property expenditures and inserting , qualified solar water heating property expenditures, and qualified biomass fuel property expenditures . (d) Effective date The amendments made by this section shall apply to expenditures paid or incurred in taxable years beginning after December 31, 2016. 3. Investment tax credit for biomass heating property (a) In general Subparagraph (A) of section 48(a)(3) of the Internal Revenue Code of 1986 is amended— (1) at the end of clause (vi) by striking or ; (2) at the end of clause (vii) by inserting or