A bill to amend the Internal Revenue Code of 1954 with respect to the application of the credit for producing fuel from a nonconventional fuel to solid fuel pellets made from biomass.

Amends the Internal Revenue Code to extend the nonconventional source fuel production income tax credit to any solid fuel in pellet form produced from biomass (other than wood or wood products) which has a Btu content per unit of volume or weight, determined without regard to any nonbiomass elements, which is at least 40 percent greater per unit of volume or weight than the Btu content of the biomass from which it is produced. Requires the taxpayer to elect whether to determine Btu content by volume or by weight. Limits application of such credit to pellets: (1) produced in a facility placed in service between January 1, 1980, and September 31, 1983, or for the construction of which the taxpayer was obligated under a binding contract on September 30, 1983; and (2) sold before January 1, 1990.