[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2380 Introduced in House (IH)]
106th CONGRESS
1st Session
H. R. 2380
To amend the Internal Revenue Code of 1986 to provide incentives to
reduce energy consumption.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 29, 1999
Mr. Matsui (for himself, Mr. Neal of Massachusetts, Mr. Lewis of
Georgia, Mr. Becerra, Mrs. Thurman, Mr. Waxman, Ms. DeLauro, Mr.
Pallone, Mr. Brown of Ohio, Mr. Minge, Mr. Frost, Mr. Filner, Ms.
Lofgren, Mrs. Lowey, Ms. Lee, Mr. Hinchey, Mr. Kucinich, Mr. Vento, Mr.
LaFalce, and Mr. Berman) introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide incentives to
reduce energy consumption.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Energy Efficient Technology Tax
Act''.
SEC. 2. CREDIT FOR CERTAIN ENERGY-EFFICIENT PROPERTY USED IN BUSINESS.
(a) In General.--Subpart E of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 48 the following new section:
``SEC. 48A. ENERGY CREDIT.
``(a) In General.--For purposes of section 46, the energy credit
for any taxable year is the sum of--
``(1) the amount equal to the energy percentage of the
basis of each energy property placed in service during such
taxable year, and
``(2) the credit amount for each qualified hybrid vehicle
placed in service during the taxable year.
``(b) Energy Percentage.--
``(1) In general.--The energy percentage shall be
determined in accordance with the following table:
----------------------------------------------------------------------------------------------------------------
``Column A--Description Column B-- Energy Percentage Column C--Period
----------------------------------------------------------------------------------------------------------------
For the period:
In the case of: The energy percentage is: ---------------------------------------------
Beginning on: Ending on:
----------------------------------------------------------------------------------------------------------------
Solar energy property (other than 10 percent 1/1/2000 no end date
elected solar hot water property
and photovoltaic property) and
geothermal energy property.........
Elected solar hot water property.... 15 percent 1/1/2000 12/31/2004
Photovoltaic property............... 15 percent 1/1/2000 12/31/2006
20 percent energy-efficient building 20 percent 1/1/2000 12/31/2003
property...........................
10 percent energy-efficient building 10 percent 1/1/2000 12/31/2001
property...........................
Combined heat and power system 8 percent 1/1/2000 12/31/2002.
property...........................
----------------------------------------------------------------------------------------------------------------
``(2) Periods for which percentage not specified.--In the
case of any energy property, the energy percentage shall be
zero for any period for which an energy percentage is not
specified for such property under paragraph (1).
``(3) Coordination with rehabilitation.--The energy
percentage shall not apply to that portion of the basis of any
property which is attributable to qualified rehabilitation
expenditures.
``(4) Transitional rules.--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 for purposes of this subsection.
``(c) Maximum Credit for Certain Property.--In the case of property
described in the following table, the amount of the current year
business credit under subsection (a) for the taxable year for each item
of such property with respect to a building shall not exceed the amount
specified for such property in such table:
------------------------------------------------------------------------
Description of property: Maximum allowable credit amount is:
------------------------------------------------------------------------
Elected solar hot water property.. $1,000.
Photovoltaic property with respect $2,000.
to which the energy percentage is
greater than 10 percent.
20 percent energy-efficient ....................................
building property:
fuel cell described in $ 500 per each kw/hr of
subsection (e)(3)(A). capacity.
natural gas heat pump described $1,000.
in subsection (e)(3)(D).
20 percent energy-efficient $500.
building property (other than a
fuel cell and a natural gas heat
pump)
10 percent energy-efficient $ 250.
building property.
------------------------------------------------------------------------
``(d) Energy Property Defined.--
``(1) In general.--For purposes of this subpart, the term
`energy property' means any property--
``(A) which is--
``(i) solar energy property,
``(ii) geothermal energy property,
``(iii) 20 percent energy-efficient
building property,
``(iv) 10 percent energy-efficient building
property, or
``(v) combined heat and power system
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), and the certification requirements
(if any), which--
``(i) have been prescribed by the Secretary
by regulations (after consultation with the
Secretary of Energy or the Administrator of the
Environmental Protection Agency, as
appropriate), and
``(ii) are in effect at the time of the
acquisition of the property.
``(2) Exception.--Such term 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). The
preceding sentence shall not apply to combined heat and power
system property.
``(e) Definitions Relating to Types of Energy Property.--For
purposes of this section--
``(1) Solar energy property.--
``(A) In general.--The term `solar energy property'
means equipment which uses solar energy--
``(i) to generate electricity,
``(ii) to heat or cool (or provide hot
water for use in) a structure, or
``(iii) to provide solar process heat.
``(B) Elected solar water heating property.--
``(i) In general.--The term `elected solar
water heating property' means property which is
solar energy property by reason of subparagraph
(A)(ii) and for which an election under this
subparagraph is in effect.
``(ii) Election.--For purposes of clause
(i) and the energy percentage specified in the
table in subsection (b)(1), a taxpayer may
elect to treat property described in clause (i)
as elected solar water heating property.
``(C) Photovoltaic property.--The term
`photovoltaic property' means solar energy property
which uses a solar photovoltaic process to generate
electricity.
``(D) Swimming pools, etc., used as storage
medium.--The term `solar energy property' shall not
include a swimming pool, hot tub, or any other energy
storage medium which has a function other than the
function of such storage.
``(E) Solar panels.--No solar panel or other
property installed as a roof (or portion thereof) shall
fail to be treated as solar energy property solely
because it constitutes a structural component of the
structure on which it is installed.
``(2) Geothermal energy property.--The term `geothermal
energy property' means 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.
``(3) 20 percent energy-efficient building property.--The
term `20 percent energy-efficient building property' means--
``(A) a fuel cell that--
``(i) generates electricity and heat using
an electrochemical process,
``(ii) has an electricity-only generation
efficiency greater than 35 percent, and
``(iii) has a minimum generating capacity
of 5 kilowatts,
``(B) an electric heat pump hot water heater that
yields an energy factor of 1.7 or greater,
``(C) an electric heat pump that has a heating
system performance factor (HSPF) of 9 or greater and a
cooling seasonal energy efficiency ratio (SEER) of 15
or greater,
``(D) a natural gas heat pump that has a
coefficient of performance of not less than 1.25 for
heating and not less than 0.70 for cooling,
``(E) a central air conditioner that has a cooling
seasonal energy efficiency ratio (SEER) of 15 or
greater, and
``(F) an advanced natural gas water heater that has
an energy factor of at least 0.80.
``(4) 10 percent energy-efficient building property.--The
term `10 percent energy-efficient building property' means--
``(A) an electric heat pump that has a heating
system performance factor (HSPF) of 7.5 or greater and
a cooling seasonal energy efficiency ratio (SEER) of
13.5 or greater,
``(B) a central air conditioner that has a cooling
seasonal energy efficiency ratio (SEER) of 13.5 or
greater, and
``(C) an advanced natural gas water heater that has
an energy factor of at least 0.65.
``(5) Combined heat and power system property.--
``(A) In general.--The term `combined heat and
power system property' means property comprising a
system--
``(i) which uses the same energy source for
the simultaneous or sequential generation of
electrical power, mechanical shaft power, or
both, in combination with the generation of
steam or other forms of useful thermal energy
(including heating and cooling applications),
``(ii) which has an electrical capacity of
more than 50 kilowatts or a mechanical energy
capacity of more than 67 horsepower or an
equivalent combination of electrical and
mechanical energy capacities,
``(iii) which produces--
``(I) at least 20 percent of its
total useful energy in the form of
thermal energy, and
``(II) at least 20 percent of its
total useful energy in the form of
electrical or mechanical power (or a
combination thereof), and
``(iv) the energy efficiency percentage of
which exceeds 60 percent (70 percent in the
case of a system with an electrical capacity in
excess of 50 megawatts or a mechanical energy
capacity in excess of 67,000 horsepower, or an
equivalent combination of electrical and
mechanical energy capacities).
``(B) Special rules.--
``(i) Energy efficiency percentage.--For
purposes of subparagraph (A)(iv), the energy
efficiency percentage of a system is the
fraction--
``(I) the numerator of which is the
total useful electrical, thermal, and
mechanical power produced by the system
at normal operating rates, and
``(II) the denominator of which is
the lower heating value of the primary
fuel source for the system.
``(ii) Determinations made on btu basis.--
The energy efficiency percentage and the
percentages under subparagraph (A)(iii) shall
be determined on a Btu basis.
``(iii) Input and output property not
included.--The term `combined heat and power
system property' does not include property used
to transport the energy source to the facility
or to distribute energy produced by the
facility.
``(iv) Accounting rule for public utility
property.--In the case that combined heat and
power system property 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), the taxpayer may only claim the credit
under subsection (a)(1) if, with respect to
such property, the taxpayer uses a
normalization method of accounting.
``(v) Depreciation.--No credit shall be
allowed for any combined heat and power system
property unless the taxpayer elects to treat
such property for purposes of section 168 as
having a class life of not less than 22 years.
``(f) Qualified Hybrid Vehicles.--For purposes of subsection
(a)(2)--
``(1) Credit amount.--
``(A) In general.--The credit amount for each
qualified hybrid vehicle with a rechargeable energy
storage system that provides the applicable percentage
of the maximum available power shall be the amount
specified in the following table:
------------------------------------------------------------------------
``Applicable percentage
------------------------------------------------------ Credit amount is:
Greater than or equal to-- Less than--
------------------------------------------------------------------------
5 percent......................... 10 percent $ 500
10 percent........................ 20 percent $1,000
20 percent........................ 30 percent $1,500
30 percent........................ $2,000
------------------------------------------------------------------------
``(B) Increase in credit amount for regenerative
braking system.--In the case of a qualified hybrid
vehicle that actively employs a regenerative braking
system which supplies to the rechargeable energy
storage system the applicable percentage of the energy
available from braking in a typical 60 miles per hour
to 0 miles per hour braking event, the credit amount
determined under subparagraph (A) shall be increased by
the amount specified in the following table:
------------------------------------------------------------------------
``Applicable percentage
------------------------------------------------------ Credit amount
Greater than or equal to-- Less than-- increase is:
------------------------------------------------------------------------
20 percent........................ 40 percent $ 250
40 percent........................ 60 percent $ 500
60 percent........................ $1,000
------------------------------------------------------------------------
``(2) Qualified hybrid vehicle.--The term `qualified hybrid
vehicle means an automobile that meets all applicable
regulatory requirements and that can draw propulsion energy
from both of the following on-board sources of stored energy:
``(A) A consumable fuel.
``(B) A rechargeable energy storage system.
``(3) Maximum available power.--The term `maximum available
power' means the maximum value of the sum of the heat engine
and electric drive system power or other non-heat energy
conversion devices available for a driver's command for maximum
acceleration at vehicle speeds under 75 miles per hour.
``(4) Automobile.--The term `automobile' has the meaning
given such term by section 4064(b)(1) (without regard to
subparagraphs (B) and (C) thereof). A vehicle shall not fail to
be treated as an automobile solely by reason of weight if such
vehicle is rated at 8,500 pounds gross vehicle weight rating or
less.
``(5) Double benefit; property used outside united states,
etc., not qualified.--No credit shall be allowed under
subsection (a)(2) with respect to--
``(A) any property for which a credit is allowed
under section 25B or 30,
``(B) any property referred to in section 50(b),
and
``(C) the portion of the cost of any property taken
into account under section 179 or 179A.
``(6) Regulations.--
``(A) Treasury.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry
out the purposes of this subsection.
``(B) Environmental protection agency.--
``(A) Treasury.--The Administrator of the
Environmental Protection Agency shall prescribe such
regulations as may be necessary or appropriate to
specify the testing and calculation procedures that
would be used to determine whether a vehicle meets the
qualifications for a credit under this subsection.
``(7) Termination.--Paragraph (2) shall not apply with
respect to any vehicle placed in service during a calendar year
ending before January 1, 2003, or after December 31, 2006.
``(g) Special Rules.--For purposes of this section--
``(1) 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.
``(2) Business use.--The rule similar to the rule of
section 25(B)(d)(5)(B) shall apply for purposes of determining
the business use of a vehicle.
``(3) 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 this section.
``(4) Double benefit.--Property which would, but for this
paragraph, be eligible for credit under more than one provision
of this section shall be eligible only under one such
provision, the provision specified by the taxpayer.''.
(b) Conforming Amendments.--
(1) Section 48 of such Code is amended to read as follows:
``SEC. 48. REFORESTATION CREDIT.
``(a) In General.--For purposes of section 46, the reforestation
credit for any taxable year is 10 percent of the portion of the
amortizable basis of any qualified timber property which was acquired
during such taxable year and which is taken into account under section
194 (after the application of section 194(b)(1)).
``(b) Definitions.--For purposes of this subpart, the terms
`amortizable basis' and `qualified timber property' have the respective
meanings given to such terms by section 194.''.
(2) Subsection (d) of section 39 of such Code is amended by
adding at the end the following new paragraph:
``(9) No carryback of energy credit before effective
date.--No portion of the unused business credit for any taxable
year which is attributable to the energy credit determined
under section 48A may be carried back to a taxable year ending
before the date of the enactment of section 48A.''.
(3) Paragraph (3) of section 50(c) of such Code is amended
by adding at the end the following flush sentence:
``In the case of the energy credit, the preceding sentence
shall apply only to so much of such credit as relates to solar
energy property and geothermal property (as such terms are
defined in section 48A(e)).''.
(4) Subclause (III) of section 29(b)(3)(A)(i) of such Code
is amended by striking ``section 48(a)(4)(C)'' and inserting
``section 48A(g)(1)(C)''.
(5) Subparagraph (E) of section 50(a)(2) of such Code is
amended by striking ``section 48(a)(5)'' and inserting
``section 48A(g)(3)''.
(6) Subparagraph (B) of section 168(e)(3) of such Code is
amended--
(A) in clause (vi)(I)--
(i) by striking ``section 48(a)(3)'' and
inserting ``paragraphs (1) and (2) of section
48A(e)'', and
(ii) by striking ``clause (i)'' and
inserting ``paragraph (1)(A)'', and
(B) in the last sentence by striking ``section
48(a)(3)'' and inserting ``section 48A(d)(2)''.
(7) Subparagraph (E) of section 168(e)(3) of such Code is
amended by striking ``and'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
``, and'', and by inserting after clause (iii) the following
new clause:
``(iv) any combined heat and power system
property (as defined in section 48A(e)(5)) for
which a credit is allowed under section 48A and
which, but for this clause, would have a
recovery period of less than 15 years.''.
(8) The table contained in subparagraph (B) of section
168(g)(3) of such Code is amended by adding at the end the
following:
``(E)(iv)...................................... 22''.
(c) Clerical Amendment.--The table of sections for subpart E of
part IV of subchapter A of chapter 1 of such Code is amended by
striking the item relating to section 48 and inserting the following
new items:
``Sec. 48. Reforestation credit.
``Sec. 48A. Energy credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 1999, 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).
SEC. 3. EXTENSION OF CREDIT FOR QUALIFIED ELECTRIC VEHICLES.
(a) Extension of Credit for Qualified Electric Vehicles.--
Subsection (f) of section 30 of such Code (relating to termination) is
amended by striking ``December 31, 2004'' and inserting ``December 31,
2006''.
(b) Repeal of Phaseout.--Subsection (b) of section 30 of such Code
(relating to limitations) is amended by striking paragraph (2) and
redesignating paragraph (3) as paragraph (2).
(c) No Double Benefit.--
(1) Subsection (d) of section 30 of such Code (relating to
special rules) is amended by adding at the end the following
new paragraph:
``(5) No credit shall be allowed under subsection (a) with
respect to any vehicle if the taxpayer claims a credit for such
vehicle under section 25B(a)(1)(B) or 48A(f).''.
(2) Paragraph (3) of section 30(d) of such Code (relating
to property used outside United States, etc., not qualified) is
amended by striking ``section 50(b)'' and inserting ``section
25B, 48A, or 50(b)''.
(3) Paragraph (5) of section 179A(e) of such Code (relating
to property used outside United States, etc., not qualified) is
amended by striking ``section 50(b)'' and inserting ``section
25B, 48A, or 50(b)''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act.
SEC. 4. MODIFICATIONS TO CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN
RENEWABLE RESOURCES.
(a) Extension.--Paragraph (3) of section 45(c) of the Internal
Revenue Code of 1986 (relating to qualified facility) is amended by
striking ``July 1, 1999'' and inserting ``July 1, 2004''.
(b) Qualified Facilities Include All Biomass Facilities.--
(1) In general.--Paragraph (1) of section 45(c) of such
Code (relating to definition of qualified energy resources) is
amended by striking ``and'' at the end of subparagraph (A), by
striking the period at the end of subparagraph (B), and by
inserting after subparagraph (B) the following:
``(C) biomass (other than closed-loop biomass).''.
(2) Biomass defined.--Paragraph (2) of section 45(c) of
such Code is amended to read as follows:
``(2) Biomass.--
``(A) In general.--The term `biomass' means--
``(i) closed-loop biomass, and
``(ii) any solid, nonhazardous, cellulosic
waste material, which is segregated from other
waste materials, and which is derived from--
``(I) any of the following forest-
related resources: mill residues,
precommercial thinnings, slash, and
brush, but not including old-growth
timber,
``(II) waste pallets, crates, and
dunnage, and landscape or right-of-way
tree trimmings, but not including
unsegregated municipal solid waste
(garbage) and post-consumer wastepaper,
or
``(III) agriculture sources,
including orchard tree crops, vineyard,
grain, legumes, sugar, and other crop
by-products or residues.
``(B) Closed-loop biomass.--The term `closed-loop
biomass' means any organic material from a plant which
is planted exclusively for purposes of being used at a
qualified facility to produce electricity.''.
(c) Electricity Produced From Biomass Co-fired in Coal Plants.--
(1) Credit amount.--Paragraph (1) of section 45(a) of such
Code (relating to general rule) is amended by inserting ``(1.0
cents in the case of electricity produced from biomass co-fired
in a facility which produces electricity from coal) after ``1.5
cents''.
(2) Qualified facility.--Paragraph (3) of section 45(c) of
such Code (relating to definitions) is amended by striking the
period at the end and inserting the following: ``, and any
facility using biomass other than closed loop biomass to
produce electricity which is owned by the taxpayer and which is
originally placed in service after June 30, 1999.''.
(3) Adjustment for inflation.--
(A) In general.--Paragraph (2) of section 45(b) of
such Code (relating to credit and phaseout adjustment
based on inflation) is amended by striking ``1.5 cent
amount'' and inserting ``1.5 and 1.0 cent amounts''.
(B) Base year for inflation adjustment factor.--
Subparagraph (B) of section 45(d)(2) of such Code
(relating to inflation adjustment factor) is amended by
adding at the end the following new sentence: ``In the
case of the 1.0 cents amount in subsection (a), the
first sentence of this subparagraph shall be applied by
substituting `1999' for `1992'.''.
(d) Credit Not To Apply to Electricity Sold to Utilities Under
Certain Contracts.--Subsection (b) of section 45 of such Code (relating
to limitations and adjustments) is amended by adding at the end the
following new paragraph:
``(4) Credit not to apply to electricity sold to utilities
under certain contracts.--
``(A) In general.--The credit determined under
subsection (a) shall not apply to electricity--
``(i) produced at a qualified facility
placed in service by the taxpayer after June
30, 1999, and
``(ii) sold to a utility pursuant to a
contract originally entered into before January
1, 1987 (whether or not amended or restated
after that date).
``(B) Exception.--Subparagraph (A) shall not apply
if--
``(i) the prices for energy and capacity
from such facility are established pursuant to
an amendment to the contract referred to in
subparagraph (A)(ii),
``(ii) such amendment provides that the
prices set forth in the contract which exceed
avoided cost prices determined at the time of
delivery shall apply only to annual quantities
of electricity (prorated for partial years)
which do not exceed the greater of--
``(I) the average annual quantity
of electricity sold to the utility
under the contract during calendar
years 1994, 1995, 1996, 1997, and 1998,
or
``(II) the estimate of the annual
electricity production set forth in the
contract, or, if there is no such
estimate, the greatest annual quantity
of electricity sold to the utility
under the contract in any of the
calendar years 1996, 1997, or 1998, and
``(iii) such amendment provides that energy
and capacity in excess of the limitation in
clause (ii) may be--
``(I) sold to the utility only at
prices that do not exceed avoided cost
prices determined at the time of
delivery, or
``(II) sold to a third party
subject to a mutually agreed upon
advance notice to the utility.
For purposes of this subparagraph, avoided cost prices
shall be determined as provided for in section
292.304(d)(1) of title 18, Code of Federal Regulations,
or any successor regulation.''.
(e) Effective Date.--
(1) In general.--Except as provided by paragraph (2), the
amendments made by this section shall apply to taxable years
ending after June 30, 1999.
(2) Adjustment for inflation.--The amendments made by
subsection (c)(3) shall apply to taxable years ending after
December 31, 1999.
SEC. 5. CREDIT FOR CERTAIN NONBUSINESS ENERGY PROPERTY.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to nonrefundable
personal credits) is amended by inserting after section 25A the
following new section:
``SEC. 25B. NONBUSINESS ENERGY PROPERTY.
``(a) Allowance of Credit.--
``(1) In general.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the sum of--
``(A) the applicable percentage of residential
energy property expenditures made by the taxpayer
during such year,
``(B) the credit amount (determined under section
48A(f)) for each vehicle purchased during the taxable
year which is a qualified hybrid vehicle (as defined in
section 48A(f)(2)), and
``(C) the credit amount specified in the following
table for a new, highly energy-efficient principal
residence:
``New, Highly Energy-Efficient Credit Amount:
Principal Residence:
30 percent property.................................... $1,000.
40 percent property.................................... $1,500.
50 percent property.................................... $2,000.
``(2) Applicable percentage.--
``(A) In general.--The applicable percentage shall
be determined in accordance with the following table:
----------------------------------------------------------------------------------------------------------------
``Column A--Description Column B-- Applicable Column C--Period
------------------------------------- Percentage ---------------------------------------------
------------------------------ For the period:
In the case of: The applicable percentage ---------------------------------------------
is: Beginning on: Ending on:
----------------------------------------------------------------------------------------------------------------
20 percent energy-efficient building 20 percent 1/1/2000 12/31/2003
property...........................
10 percent energy-efficient building 10 percent 1/1/2000 12/31/2001
property...........................
Solar water heating property........ 15 percent 1/1/2000 12/31/2006
Photovoltaic property............... 15 percent 1/1/2000 12/31/2006.
----------------------------------------------------------------------------------------------------------------
``(B) Periods for which percentage not specified.--
In the case of any residential energy property, the
applicable percentage shall be zero for any period for
which an applicable percentage is not specified for
such property under subparagraph (A).
``(b) Maximum Credit.--
``(1) In general.--In the case of property described in the
following table, the amount of the credit allowed under
subsection (a)(1)(A) for the taxable year for each item of such
property with respect to a dwelling unit shall not exceed the
amount specified for such property in such table:
------------------------------------------------------------------------
``Description of property item: Maximum allowable credit amount is:
------------------------------------------------------------------------
20 percent energy-efficient $500.
building property (other than a
fuel cell or natural gas heat
pump).
20 percent energy-efficient ....................................
building property:
fuel cell described in section $ 500 per each kw/hr of
48A(e)(3)(A). capacity.
natural gas heat pump described $1,000.
in section 48A(e)(3)(D).
10 percent energy-efficient $ 250.
building property.
Solar water heating property...... $1,000.
Photovoltaic property............. $2,000.
------------------------------------------------------------------------
``(2) Coordination of limitations.--If a credit is allowed
to the taxpayer for any taxable year by reason of an
acquisition of a new, highly energy-efficient principal
residence, no other credit shall be allowed under subsection
(a)(1)(A) with respect to such residence during the 1-taxable
year period beginning with such taxable year.
``(c) Definitions.--For purposes of this section--
``(1) Residential Energy Property Expenditures.--The term
`residential energy property expenditures' means expenditures
made by the taxpayer for qualified energy property installed on
or in connection with a dwelling unit which--
``(A) is located in the United States, and
``(B) is used by the taxpayer as a residence.
Such term includes expenditures for labor costs properly
allocable to the onsite preparation, assembly, or original
installation of the property.
``(2) Qualified energy property.--
``(A) In general.--The term `qualified energy
property' means--
``(i) energy-efficient building property,
``(ii) solar water heating property, and
``(iii) photovoltaic property.
``(B) Swimming pool, etc., used as storage medium;
solar panels.--For purposes of this paragraph, the
provisions of subparagraphs (D) and (E) section
48A(e)(1) shall apply.
``(3) Energy-efficient building property.--The term
`energy-efficient building property' has the meaning given to
such term by paragraphs (3) and (4) of section 48A(e).
``(4) Solar water heating property.--The term `solar water
heating property' means property which, when installed in
connection with a structure, uses solar energy for the purpose
of providing hot water for use within such structure.
``(5) Photovoltaic property.--The term `photovoltaic
property' has the meaning given to such term by section
48A(e)(1)(C).
``(6) New, highly energy-efficient principal residence.--
``(A) In general.--Property is a new, highly
energy-efficient principal residence if--
``(i) such property is located in the
United States,
``(ii) the original use of such property
commences with the taxpayer and is, at the time
of such use, the principal residence of the
taxpayer, and
``(iii) such property is certified before
such use commences as being 50 percent
property, 40 percent property, or 30 percent
property.
``(B) 50, 40, or 30 percent property.--
``(i) In general.--For purposes of
subparagraph (A), property is 50 percent
property, 40 percent property, or 30 percent
property if the projected energy usage of such
property is reduced by 50 percent, 40 percent,
or 30 percent, respectively, compared to the
energy usage of a reference house that complies
with minimum standard practice, such as the
1998 International Energy Conservation Code of
the International Code Council, as determined
according to the requirements specified in
clause (ii).
``(ii) Procedures.--
``(I) In general.--For purposes of
clause (i), energy usage shall be
demonstrated either by a component-
based approach or a performance-based
approach.
``(II) Component approach.--
Compliance by the component approach is
achieved when all of the components of
the house comply with the requirements
of prescriptive packages established by
the Secretary of Energy, in
consultation with the Administrator of
the Environmental Protection Agency,
such that they are equivalent to the
results of using the performance-based
approach of subclause (III) to achieve
the required reduction in energy usage.
``(III) Performance-based
approach.--Performance-based compliance
shall be demonstrated in terms of the
required percentage reductions in
projected energy use. Computer software
used in support of performance-based
compliance must meet all of the
procedures and methods for calculating
energy savings reductions that are
promulgated by the Secretary of Energy.
Such regulations on the specifications
for software shall be based in the 1998
California Residential Alternative
Calculation Method Approval Manual,
except that the calculation procedures
shall be developed such that the same
energy efficiency measures qualify a
home for tax credits regardless of
whether the home uses a gas or oil
furnace or boiler, or an electric heat
pump.
``(IV) Approval of software
submissions.--The Secretary of Energy
shall approve software submissions that
comply with the calculation
requirements of subclause (III).
``(C) Determinations of compliance.--A
determination of compliance made for the purposes of
this paragraph shall be filed with the Secretary of
Energy within 1 year of the date of such determination
and shall include the TIN of the certifier, the address
of the building in compliance, and the identity of the
person for whom such determination was performed.
Determinations of compliance filed with the Secretary
of Energy shall be available for inspection by the
Secretary.
``(D) Compliance.--
``(i) In general.--The Secretary of Energy
in consultation with the Secretary of the
Treasury shall establish requirements for
certification and compliance procedures after
examining the requirements for energy
consultants and home energy ratings providers
specified by the Mortgage Industry National
Accreditation Procedures for Home Energy Rating
Systems.
``(ii) Individuals qualified to determine
compliance.--Individuals qualified to determine
compliance shall be only those individuals who
are recognized by an organization certified by
the Secretary of Energy for such purposes.
``(D) Principal residence.--The term `principal
residence' has the same meaning as when used in section
121, except that the period for which a building is
treated as the principal residence of the taxpayer
shall also include the 60-day period ending on the 1st
day on which it would (but for this subparagraph) first
be treated as his principal residence.
``(d) Special Rules.--For purposes of this section--
``(1) Dollar amounts in case of joint occupancy.--In the
case of any dwelling unit which if jointly occupied and used
during any calendar year as a residence by 2 or more
individuals the following shall apply:
``(A) The amount of the credit allowable under
subsection (a) by reason of expenditures made during
such calendar year by any of such individuals with
respect to such dwelling unit shall be determined by
treating all of such individuals as 1 taxpayer whose
taxable year is such calendar year.
``(B) There shall be allowable with respect to such
expenditures to each of such individuals, a credit
under subsection (a) for the taxable year in which such
calendar year ends in an amount which bears the same
ratio to the amount determined under subparagraph (A)
as the amount of such expenditures made by such
individual during such calendar year bears to the
aggregate of such expenditures made by all of such
individuals during such calendar year.
``(2) Tenant-stockholder in cooperative housing
corporation.--In the case of an individual who is a tenant-
stockholder (as defined in section 216) in a cooperative
housing corporation (as defined in such section), such
individual shall be treated as having made his tenant-
stockholder's proportionate share (as defined in section
216(b)(3)) of any expenditures of such corporation.
``(3) Condominiums.--
``(A) In general.--In the case of an individual who
is a member of a condominium management association
with respect to a condominium which he owns, such
individual shall be treated as having made his
proportionate share of any expenditures of such
association.
``(B) Condominium management association.--For
purposes of this paragraph, the term `condominium
management association' means an organization which
meets the requirements of paragraph (1) of section
528(c) (other than subparagraph (E) thereof) with
respect to a condominium project substantially all of
the units of which are used as residences.
``(4) Joint ownership of energy items.--
``(A) In general.--Any expenditure otherwise
qualifying as a residential energy property expenditure
shall not be treated as failing to so qualify merely
because such expenditure was made with respect to 2 or
more dwelling units.
``(B) Limits applied separately.--In the case of
any expenditure described in subparagraph (A), the
amount of the credit allowable under subsection (a)
shall (subject to paragraph (1)) be computed separately
with respect to the amount of the expenditure made for
each dwelling unit.
``(5) Allocation in certain cases.--
``(A) In general.--Except as provided in
subparagraph (B), if less than 80 percent of the use of
an item is for nonbusiness purposes, only that portion
of the expenditures for such item which is properly
allocable to use for nonbusiness purposes shall be
taken into account. For purposes of this paragraph, use
for a swimming pool shall be treated as use which is
not for nonbusiness purposes.
``(B) Special rule for vehicles.--For purposes of
this section and section 48A, a vehicle shall be
treated as used entirely for business or nonbusiness
purposes if the majority of the use of such vehicle is
for business or nonbusiness purposes, as the case may
be.
``(6) Double benefit; property used outside United States,
etc., not qualified.--No credit shall be allowed under
subsection (a)(1)(B) with respect to--
``(A) any property for which a credit is allowed
under section 30 or 48A,
``(B) any property referred to in section 50(b),
and
``(C) the portion of the cost of any property taken
into account under section 179 or 179A.
``(7) When expenditure made; amount of expenditure.--
``(A) In general.--Except as provided in
subparagraph (B), an expenditure with respect to an
item shall be treated as made when the original
installation of the item is completed.
``(B) Expenditures part of building construction.--
In the case of an expenditure in connection with the
construction of a structure, such expenditure shall be
treated as made when the original use of the
constructed structure by the taxpayer begins.
``(C) Amount.--The amount of any expenditure shall
be the cost thereof.
``(8) Property financed by subsidized energy financing.--
``(A) Reduction of expenditures.--For purposes of
determining the amount of residential energy property
expenditures made by any individual with respect to any
dwelling unit, there shall not be taken in to account
expenditures which are made from subsidized energy
financing (as defined in section 48A(g)(1)).
``(B) Dollar limits reduced.--The dollar amounts in
the table contained in subsection (b)(1) with respect
to each property purchased for such dwelling unit for
any taxable year of such taxpayer shall be reduced
proportionately by an amount equal to the sum of--
``(i) the amount of the expenditures made
by the taxpayer during such taxable year with
respect to such dwelling unit and not taken
into account by reason of subparagraph (A), and
``(ii) the amount of any Federal, State, or
local grant received by the taxpayer during
such taxable year which is used to make
residential energy property expenditures with
respect to the dwelling unit and is not
included in the gross income of such taxpayer.
``(e) Basis Adjustments.--For purposes of this subtitle, if a
credit is allowed under this section for any expenditure with respect
to any property, the increase in the basis of such property which would
(but for this subsection) result from such expenditure shall be reduced
by the amount of the credit so allowed.''.
(b) Conforming Amendments.--
(1) Subsection (a) of section 1016 of such Code is amended
by striking ``and'' at the end of paragraph (26), by striking
the period at the end of paragraph (27) and inserting ``;
and'', and by adding at the end the following new paragraph:
``(28) to the extent provided in section 25B(e), in the
case of amounts with respect to which a credit has been allowed
under section 25B.''.
(2) The table of sections for subpart A of part IV of
subchapter A of chapter 1 of such Code is amended by inserting
after the item relating to section 25A the following new item:
``Sec. 25B. Nonbusiness energy
property.''.
(c) Effective Date.--The amendments made by this section shall
apply to expenditures after December 31, 1999.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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