I

106TH CONGRESS

2D SESSION H. R. 5339

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

income tax for certain energy-efficient property.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 28, 2000

Mrs. JOHNSON of Connecticut (for herself, Mr. MCNULTY, Mr. BOEHLERT,

Mr. LARSON, and Mr. HUNTER) 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.

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

3 SECTION 1. CREDIT FOR CERTAIN ENERGY-EFFICIENT

4 PROPERTY.

5 (a) BUSINESS PROPERTY.—

6 (1) IN GENERAL.—Subparagraph (A) of section

7 48(a)(3) of the Internal Revenue Code of 1986 (de8 fining energy property) is amended by striking ‘‘or’’

9 at the end of clause (i), by adding ‘‘or’’ at the end
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1 of clause (ii), and by inserting after clause (ii) the

2 following new clause:

3 ‘‘(iii) energy-efficient building prop4 erty,’’.

5 (2) ENERGY-EFFICIENT BUILDING PROP6 ERTY.—Subsection (a) of section 48 of such Code is

7 amended by redesignating paragraphs (4) and (5) as

8 paragraphs (5) and (6), respectively, and by insert9 ing after paragraph (3) the following new para10 graph:

11 ‘‘(4) ENERGY-EFFICIENT BUILDING PROP12 ERTY.—For purposes of this subsection—

13 ‘‘(A) IN GENERAL.—The term ‘energy-effi14 cient building property’ means a fuel cell power

15 plant that—

16 ‘‘(i) generates electricity using an

17 electrochemical process,

18 ‘‘(ii) has an electricity-only generation

19 efficiency greater than 30 percent, and

20 ‘‘(iii) has a minimum generating ca21 pacity of 5 kilowatts.

22 ‘‘(B) LIMITATION.—In the case of energy23 efficient building property placed in service dur24 ing the taxable year, the credit under sub-
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1 section (a) for such year may not exceed $500

2 for each kilowatt of capacity.

3 ‘‘(C) FUEL CELL POWER PLANT.—The

4 term ‘fuel cell power plant’ means an integrated

5 system comprised of a fuel cell stack assembly,

6 a fuel processing unit, and associated balance of

7 plant components that converts a fuel into elec8 tricity using electrochemical means.

9 ‘‘(D) TERMINATION.—Such term shall not

10 include any property placed in service after De11 cember 31, 2005.’’

12 (3) EFFECTIVE DATE.—The amendments made

13 by this subsection shall apply to property placed in

14 service after December 31, 2000, under rules similar

15 to the rules of section 48(m) of the Internal Revenue

16 Code of 1986 (as in effect on the day before the

17 date of the enactment of the Revenue Reconciliation

18 Act of 1990).

19 (b) NONBUSINESS PROPERTY.—

20 (1) IN GENERAL.—Subpart A of part IV of sub21 chapter A of chapter 1 of such Code (relating to

22 nonrefundable personal credits) is amended by in23 serting after section 25A the following new section:
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1 ‘‘SEC. 25B. NONBUSINESS ENERGY-EFFICIENT BUILDING

2 PROPERTY.

3 ‘‘(a) IN GENERAL.—In the case of an individual,

4 there shall be allowed as a credit against the tax imposed

5 by this chapter for the taxable year an amount equal to

6 the nonbusiness energy-efficient building property expend7 itures which are paid or incurred during such year.

8 ‘‘(b) NONBUSINESS ENERGY-EFFICIENT BUILDING

9 PROPERTY EXPENDITURES.—For purposes of this

10 section—

11 ‘‘(1) IN GENERAL.—The term ‘nonbusiness en12 ergy-efficient building property expenditures’ means

13 expenditures made by the taxpayer for nonbusiness

14 energy-efficient building property installed on or in

15 connection with a dwelling unit—

16 ‘‘(A) which is located in the United States,

17 and

18 ‘‘(B) which is used by the taxpayer as a

19 residence.

20 Such term includes expenditures for labor costs

21 properly allocable to the onsite preparation, assem22 bly, or original installation of the property.

23 ‘‘(2) NONBUSINESS ENERGY-EFFICIENT BUILD24 ING PROPERTY.—The term ‘nonbusiness energy-effi25 cient building property’ means energy-efficient build26 ing property (as defined in section 48(a)(4)) if—
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1 ‘‘(A) the original use of such property com2 mences with the taxpayer, and

3 ‘‘(B) such property meets the standards (if

4 any) applicable to such property under section

5 48(a)(3).

6 ‘‘(c) SPECIAL RULES.—

7 ‘‘(1) TENANT-STOCKHOLDER IN COOPERATIVE

8 HOUSING CORPORATION.—In the case of an indi9 vidual who is a tenant-stockholder (as defined in sec10 tion 216) in a cooperative housing corporation (as

11 defined in such section), such individual shall be

12 treated as having made his tenant-stockholder’s pro13 portionate share (as defined in section 216(b)(3)) of

14 any expenditures of such corporation.

15 ‘‘(2) CONDOMINIUMS.—

16 ‘‘(A) IN GENERAL.—In the case of an indi17 vidual who is a member of a condominium man18 agement association with respect to a condo19 minium which he owns, such individual shall be

20 treated as having made his proportionate share

21 of any expenditures of such association.

22 ‘‘(B) CONDOMINIUM MANAGEMENT ASSO23 CIATION.—For purposes of this paragraph, the

24 term ‘condominium management association’

25 means an organization which meets the require-
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1 ments of paragraph (1) of section 528(c) (other

2 than subparagraph (E) thereof) with respect to

3 a condominium project substantially all of the

4 units of which are used as residences.

5 ‘‘(3) ALLOCATION IN CERTAIN CASES.—If less

6 than 80 percent of the use of an item is for nonbusi7 ness purposes, only that portion of the expenditures

8 for such item which is properly allocable to use for

9 nonbusiness purposes shall be taken into account.

10 ‘‘(4) WHEN EXPENDITURE MADE; AMOUNT OF

11 EXPENDITURE.—

12 ‘‘(A) IN GENERAL.—Except as provided in

13 subparagraph (B), an expenditure with respect

14 to an item shall be treated as made when the

15 original installation of the item is completed.

16 ‘‘(B) EXPENDITURES PART OF BUILDING

17 CONSTRUCTION.—In the case of an expenditure

18 in connection with the construction or recon19 struction of a structure, such expenditure shall

20 be treated as made when the original use of the

21 constructed or reconstructed structure by the

22 taxpayer begins.

23 ‘‘(C) AMOUNT.—The amount of any ex24 penditure shall be the cost thereof.
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1 ‘‘(5) PROPERTY FINANCED BY SUBSIDIZED EN2 ERGY FINANCING.—For purposes of determining the

3 amount of nonbusiness energy-efficient building

4 property expenditures made by any individual with

5 respect to any dwelling unit, there shall not be taken

6 in to account expenditures which are made from

7 subsidized energy financing (as defined in section

8 48(a)(4)(A)).

9 ‘‘(d) BASIS ADJUSTMENTS.—For purposes of this

10 subtitle, if a credit is allowed under this section for any

11 expenditure with respect to any property, the increase in

12 the basis of such property which would (but for this sub13 section) result from such expenditure shall be reduced by

14 the amount of the credit so allowed.

15 ‘‘(e) TERMINATION.—This section shall not apply to

16 any expenditure made after December 31, 2005.’’

17 (2) CONFORMING AMENDMENTS.—

18 (A) Subsection (a) of section 1016 of such

19 Code is amended by striking ‘‘and’’ at the end

20 of paragraph (26), by striking the period at the

21 end of paragraph (27) and inserting ‘‘; and’’,

22 and by adding at the end the following new

23 paragraph:
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1 ‘‘(28) to the extent provided in section 25B(d),

2 in the case of amounts with respect to which a credit

3 has been allowed under section 25B.’’.

4 (B) The table of sections for subpart A of

5 part IV of subchapter A of chapter 1 of such

6 Code is amended by inserting after the item re7 lating to section 25A the following new item:

‘‘Sec. 25B. Nonbusiness energy-efficient building property.’’.

8 (3) EFFECTIVE DATE.—The amendments made

9 by this subsection shall apply to expenditures made

10 after December 31, 2000.

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