I 

108TH CONGRESS 

1ST SESSION H. R. 2113

To amend the Internal Revenue Code of 1986 to allow a credit against 

income tax for certain energy efficient property placed in service or 

installed in an existing principal residence or property used by businesses. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 15, 2003

Mr. TERRY (for himself, Mr. ENGEL, Mr. GRAVES, Ms. KILPATRICK, Mr. 

BILIRAKIS, Mr. SANDERS, and Mr. TOWNS) 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 allow a 

credit against income tax for certain energy efficient 

property placed in service or installed in an existing 

principal residence or property used by businesses.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Energy Efficiency In5 vestment Act of 2003’’. 
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1 SEC. 2. CREDIT FOR CERTAIN ENERGY EFFICIENT PROP2 ERTY IN RESIDENCES AND BUSINESSES. 

3 (a) IN GENERAL.—Subpart B of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 is amended by inserting after section 30A the fol6 lowing new section: 

7 ‘‘SEC. 30B. CERTAIN ENERGY EFFICIENT PROPERTY IN 

8 RESIDENCES AND BUSINESSES. 

9 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al10 lowed as a credit against the tax imposed by this chapter 

11 for the taxable year an amount equal to 25 percent of the 

12 amount paid or incurred by the taxpayer for qualified en13 ergy property placed in service or installed by the taxpayer 

14 during such taxable year. 

15 ‘‘(b) QUALIFIED ENERGY PROPERTY.—For purposes 

16 of this section, the term ‘qualified energy property’ means 

17 any property—

18 ‘‘(1) which is—

19 ‘‘(A) an energy efficient building envelope 

20 component which is Energy Star qualified, and 

21 ‘‘(B) any energy efficient heating or cool22 ing equipment (including boilers) which is En23 ergy Star qualified, 

24 ‘‘(2) which, in the case of an individual, is in25 stalled in or on an existing residence—

26 ‘‘(A) located in the United States, and 
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1 ‘‘(B) owned and used by the taxpayer as 

2 the taxpayer’s principal residence at the time 

3 the property is placed in service or installed, 

4 ‘‘(3) the original use of which commences with 

5 the taxpayer, and 

6 ‘‘(4) which has a useful life of at least 5 years. 

7 ‘‘(c) OTHER DEFINITIONS.—For purposes of this 

8 section—

9 ‘‘(1) BUILDING ENVELOPE COMPONENT.—The 

10 term ‘building envelope component’ shall have the 

11 same meaning as set forth in section 434.201 of title 

12 10 of the Code of Federal Regulations. 

13 ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin14 cipal residence’ shall have the same meaning as 

15 when used in section 121. 

16 ‘‘(3) ENERGY STAR QUALIFIED.—The term 

17 ‘Energy Star qualified’ means property which—

18 ‘‘(A) meets the guidelines, specifications, 

19 and performance levels of the Energy Star pro20 gram jointly managed by the Environmental 

21 Protection Agency and the Department of En22 ergy, including guidelines, specifications, and 

23 performance levels for the climate region in 

24 which a residence is located, and
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1 ‘‘(B) displays the Energy Star label at the 

2 time the property is placed in service or in3 stalled. 

4 ‘‘(d) LIMITATION BASED ON AMOUNT OF TAX.—

5 ‘‘(1) IN GENERAL.—The credit allowed under 

6 subsection (a) for any taxable year shall not exceed 

7 the excess of—

8 ‘‘(A) the sum of the regular tax liability

9 (as defined in section 26(b)) plus the tax im10 posed by section 55, over 

11 ‘‘(B) the sum of the credits allowable 

12 under this part (other than under this section 

13 and subpart C thereof, relating to refundable 

14 credits) and section 1397E. 

15 ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 

16 credit allowable under subsection (a) exceeds the 

17 limitation imposed by paragraph (1) for such taxable 

18 year, such excess shall be carried to the succeeding 

19 taxable year and added to the credit allowable under 

20 subsection (a) for such taxable year. 

21 ‘‘(e) SPECIAL RULES.—For purposes of this section: 

22 ‘‘(1) TENANT-STOCKHOLDER IN COOPERATIVE

23 HOUSING CORPORATION.—In the case of an indi24 vidual who is a tenant-stockholder (as defined in sec25 tion 216(b)(2)) in a cooperative housing corporation 
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1 (as defined in section 216(b)(1)), such individual 

2 shall be treated as having paid his tenant-stock3 holder’s proportionate share (as defined in section 

4 216(b)(3)) of any expenditures paid or incurred for 

5 qualified energy property by such corporation, and 

6 such credit shall be allocated appropriately to such 

7 individual. 

8 ‘‘(2) CONDOMINIUMS.—

9 ‘‘(A) IN GENERAL.—In the case of an indi10 vidual who is a member of a condominium man11 agement association with respect to a condo12 minium which he owns, such individual shall be 

13 treated as having paid his proportionate share 

14 of expenditures paid or incurred for qualified 

15 energy property by such association, and such 

16 credit shall be allocated appropriately to such 

17 individual. 

18 ‘‘(B) CONDOMINIUM MANAGEMENT ASSO19 CIATION.—For purposes of this paragraph, the 

20 term ‘condominium management association’ 

21 means an organization which meets the require22 ments of section 528(c)(2) with respect to a 

23 condominium project of which substantially all 

24 of the units are used by individuals as resi25 dences. 
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1 ‘‘(3) EXPENDITURES FOR LABOR INCLUDED.—

2 For purposes of this section, the amount paid or in3 curred by the taxpayer for qualified energy property 

4 shall also include expenditures for labor costs prop5 erly allocable to the onsite preparation, assembly, 

6 and installation of such property. 

7 ‘‘(4) ALLOCATION TO NONBUSINESS USE IN

8 CERTAIN CASES.—In the case of an individual, if 

9 less than 80 percent of the use of qualified energy 

10 property placed in service or installed is for nonbusi11 ness purposes, only that portion of the expenditure 

12 paid or incurred for such property which is properly 

13 allocable to use for nonbusiness purposes shall be el14 igible for the credit provided by this section. 

15 ‘‘(f) BASIS ADJUSTMENT.—For purposes of this sub16 title, if a credit is allowed under this section for any ex17 penditure with respect to a residence or other property, 

18 the basis of such residence or other property shall be re19 duced by the amount of the credit so allowed. 

20 ‘‘(g) APPLICABILITY.—Subsection (a) shall apply to 

21 qualified energy property placed in service or installed on 

22 or after January 1, 2004.’’. 

23 (b) CONFORMING AMENDMENT.—Subsection (a) of 

24 section 1016 of such Code (relating to general rule for 

25 adjustments to basis) is amended by striking ‘‘and’’ at the 
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1 end of paragraph (26), by striking the period at the end 

2 of paragraph (27) and inserting ‘‘, and’’, and by adding 

3 at the end the following new paragraph: 

4 ‘‘(28) in the case of a residence or other prop5 erty with respect to which a credit was allowed 

6 under section 30B, to the extent provided in section 

7 30B(f).’’. 

8 (c) CLERICAL AMENDMENT.—The table of sections 

9 for subpart B of part IV of subchapter A of chapter 1 

10 of such Code is amended by inserting after the item relat11 ing to section 30A the following new item:

‘‘Sec. 30B. Certain energy efficient property in residences and 

businesses.’’.

12 (d) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to taxable years ending after De14 cember 31, 2003.

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