To amend the Internal Revenue Code to provide for a refundable tax credit for heating fuels and to create a grant program for States to provide individuals with loans to weatherize their homes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Home Heating Fuels Cost Relief Act 
of 2008''.

SEC. 2. REFUNDABLE CREDIT FOR CERTAIN INDIVIDUALS USING HOME HEATING 
              FUELS.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. USE OF HOME HEATING FUELS IN HOMES.

    ``(a) Allowance of Credit.--In the case of an eligible individual, 
there shall be allowed to the taxpayer as a credit against the tax 
imposed by this chapter for the taxable year an amount equal to amounts 
paid or incurred by the taxpayer during the taxable year for heating 
oil, natural gas, and propane to heat the principal place of abode of 
the taxpayer.
    ``(b) Limitations.--
            ``(1) Limitation based on dollar amount.--The amount 
        allowed as a credit under subsection (a) for a taxable year 
        shall not exceed $1,000 ($2,000 in the case of a joint return).
            ``(2) Limitation based on adjusted gross income.--No amount 
        shall be allowed as a credit under subsection (a) for a taxable 
        year in the case of a taxpayer whose adjusted gross income 
        exceeds $100,000 ($200,000 in the case of a joint return).
    ``(c) Eligible Individual.--
            ``(1) In general.--For purposes of this section, the term 
        `eligible individual' means any individual whose principal 
        place of abode is in the United States.
            ``(2) Exception.--Except as provided in paragraph (3), such 
        term shall not include any individual--
                    ``(A) who is not a citizen or lawful permanent 
                resident of the United States, or
                    ``(B) with respect to whom a deduction under 
                section 151 is allowed to another taxpayer for a 
                taxable year beginning in the calendar year in which 
                such individual's taxable year begins.
            ``(3) Special rule for married individuals.--In the case of 
        persons married to each other, if one spouse is an eligible 
        individual, the other spouse shall be treated as an eligible 
        individual for purposes of this subsection.
    ``(d) Denial of Double Benefit.--For purposes of this section, no 
credit shall be allowed under subsection (a) for any expense for which 
a deduction or credit is allowed under any other provision of this 
chapter.
    ``(e) Termination.--This section shall not apply to any taxable 
year beginning after December 31, 2009.''.
    (b) Conforming Amendment.--Paragraph (2) of section 1324(b) of 
title 31, United States Code, is amended by inserting ``36,'' after 
``35,''.
    (c) Clerical Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by striking the item relating to section 36 and 
inserting the following new items:

``Sec. 36. Use of home heating fuels in homes.
``Sec. 37. Overpayments of tax.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

SEC. 3. GRANTS TO STATES TO CREATE HOME WEATHERIZATION LOAN PROGRAMS.

    (a) In General.--The Secretary shall carry out a program to make 
grants to States in accordance with this section to create revolving 
loan funds to provide eligible individuals with loans to purchase 
weatherization materials for the purpose of weatherizing the principal 
place of abode of the individual.
    (b) Establishment of Fund.--To be eligible to receive a grant under 
this section, a State shall establish a weatherization revolving loan 
fund (referred to in this section as the ``State loan fund'') and 
comply with the other requirements of this section. Each grant to a 
State under this section shall be deposited in the State loan fund 
established by the State.
    (c) Applications.--
            (1) In general.--The Secretary shall issue requirements for 
        applying for grants under this section.
            (2) Determination of grant amounts.--In determining the 
        amount of the grant awarded to a State, the Secretary shall 
        consider--
                    (A) the incidence of extreme winter or summer 
                temperatures within the State;
                    (B) the average age of homes within the State; and
                    (C) such other factors as the Secretary determines 
                are appropriate.
    (d) Program Requirements.--
            (1) Use of funds.--
                    (A) In general.--Amounts deposited in a State loan 
                fund, including loan repayments and interest earned on 
                such amounts, shall be used only for providing loans to 
                eligible individuals to purchase weatherization 
                materials for the purpose of weatherizing the principal 
                place of abode of the individual.
                    (B) Loan amount limitations.--
                            (i) Individuals.--Subject to clause (ii), 
                        the total amount of all loans made from the 
                        State loan fund to an eligible individual 
                        during a calendar year may not exceed $5,000.
                            (ii) Dwelling.--The combined amount of all 
                        loans made from the State loan fund to eligible 
                        individuals living within a single dwelling 
                        during a calendar year may not exceed $10,000.
                    (C) Income limitation and interest rates.--
                            (i) For an eligible individual with 
                        adjusted gross income for the previous taxable 
                        year of $100,000 or less, the annual interest 
                        rate for each loan shall be 1 percent.
                            (ii) For an eligible individual with 
                        adjusted gross income for the previous taxable 
                        year of more than $100,000 but no more than 
                        $200,000, the annual interest rate for each 
                        loan shall be 2 percent.
                            (iii) An eligible individual making more 
                        than $200,000 is not eligible for a loan made 
                        from the State loan fund.
                    (D) Loan repayment.--In order to receive a loan 
                from a State loan fund, an eligible individual must 
                enter into an agreement with the State to repay the 
                full amount of the loan, plus interest, not more than 2 
                years after the date on which the individual receives 
                the loan funds.
            (2) Annual report.--Each State receiving a grant under this 
        section shall submit an annual report to the Secretary 
        detailing the use of funds from the State loan fund.
    (e) Report to Congress.--The Secretary shall submit an annual 
report to the Congress detailing the distribution of grant funds, 
including a copy of each report submitted to the Secretary pursuant to 
subsection (d)(2).
    (f) Definitions.--For purposes of this section:
            (1) Eligible individual.--The term ``eligible individual'' 
        means an individual--
                    (A) whose principal place of abode is in the United 
                States;
                    (B) who is a citizen or lawful permanent resident 
                of the United States; and
                    (C) with respect to whom a deduction under section 
                151 is not allowed to another taxpayer for a taxable 
                year beginning in the calendar year in which such 
                individual's taxable year begins.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (3) Weatherization materials.--The term ``weatherization 
        materials'' means--
                    (A) caulking and weatherstripping of doors and 
                windows;
                    (B) furnace efficiency modifications, including, 
                but not limited to--
                            (i) replacement burners, furnaces, or 
                        boilers or any combination thereof;
                            (ii) devices for minimizing energy loss 
                        through heating system, chimney, or venting 
                        devices; and
                            (iii) electrical or mechanical furnace 
                        ignition systems which replace standing gas 
                        pilot lights;
                    (C) clock thermostats;
                    (D) ceiling, attic, wall, floor, and duct 
                insulation;
                    (E) water heater insulation;
                    (F) storm windows and doors, multiglazed windows 
                and doors, heat-absorbing or heat-reflective window and 
                door materials;
                    (G) cooling efficiency modifications, including, 
                but not limited to, replacement air-conditioners, 
                ventilation equipment, screening, window films, and 
                shading devices;
                    (H) solar thermal water heaters;
                    (I) wood-heating appliances; and
                    (J) such other insulating or energy conserving 
                devices or technologies as the Secretary may determine, 
                after consulting with the Secretary of Housing and 
                Urban Development, the Secretary of Agriculture, and 
                the Director of the Community Services Administration.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as may be necessary to carry 
out this section.

Summary: Home Heating Fuels Cost Relief Act of 2008 - Amends the Internal Revenue Code to allow an income-based refundable tax credit for up to $1,000 of the cost of heating oil, natural gas, and propane to heat a principal residence. Terminates such credit after 2009. Directs the Secretary of the Treasury to make grants to states to create revolving loan funds for home weatherization loans.