II 

109TH CONGRESS 

1ST SESSION S. 1987 

To amend the Internal Revenue Code of 1986 to provide a refundable tax 

credit for residential energy cost assistance and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 9, 2005 

Mr. REED introduced the following bill; which was read twice and referred to 

the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a refundable tax credit for residential energy cost assistance and for other purposes. 

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 ‘‘Low-Income Home En5 ergy Security Tax Act’’. 

6 SEC. 2. REFUNDABLE TAX CREDIT FOR RESIDENTIAL EN7 ERGY COST ASSISTANCE. 

8 (a) IN GENERAL.—Subpart C of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 

10 1986 (relating to refundable credits) is amended by redes-
2 

•S 1987 IS

1 ignating section 36 as section 37 and by inserting after 

2 section 35 the following new section: 

3 ‘‘SEC. 36. CREDIT FOR RESIDENTIAL ENERGY COST ASSIST4 ANCE. 

5 ‘‘(a) GENERAL RULE.—In the case of an individual, 

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

7 by this subtitle for the taxable year an amount equal to 

8 the lesser of— 

9 ‘‘(1) 33 percent of the amount paid or incurred 

10 for residential energy costs by the taxpayer for each 

11 month such individual is an individual during such 

12 taxable year, or 

13 ‘‘(2) $300. 

14 ‘‘(b) INCOME LIMITATION.— 

15 ‘‘(1) IN GENERAL.—The amount allowable as a 

16 credit under subsection (a) for any taxable year (de17 termined without regard to subsection (e)) shall be 

18 reduced (but not below zero) by an amount which 

19 bears the same ratio to the amount so allowable (de20 termined without regard to this paragraph) as— 

21 ‘‘(A) the amount (if any) by which the tax22 payer’s adjusted gross income exceeds $35,000 

23 ($70,000 in the case of a joint return), bears to 

24 ‘‘(B) $10,000. 
3 

•S 1987 IS

1 ‘‘(2) DETERMINATION OF ADJUSTED GROSS IN2 COME.—For purposes of paragraph (1), adjusted 

3 gross income shall be determined without regard to 

4 sections 911, 931, and 933. 

5 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur6 poses of this section— 

7 ‘‘(1) RESIDENTIAL ENERGY COSTS.—The term 

8 ‘residential energy costs’ means, with respect to any 

9 principal residence of the taxpayer located in the 

10 United States for any month, the sum of— 

11 ‘‘(A) the cost of any energy utility, plus 

12 ‘‘(B) the cost of the purchase of any home 

13 energy fuel. 

14 ‘‘(2) REDUCTION FOR GRANTS.—The amount of 

15 residential energy costs which may be taken into ac16 count with respect to any month shall be reduced by 

17 any amount received by the taxpayer for such month 

18 for any residential energy cost under the Low-In19 come Home Energy Assistance program under title 

20 XXVI of the Omnibus Budget Reconciliation Act of 

21 1981 (42 U.S.C. 8621 et seq.). 

22 ‘‘(3) PRINCIPAL RESIDENCE.—The term ‘prin23 cipal residence’ has the same meaning as in section 

24 121, except that— 
4 

•S 1987 IS

1 ‘‘(A) no ownership requirement shall be 

2 imposed, and 

3 ‘‘(B) the principal residence must be used 

4 by the taxpayer as the taxpayer’s residence dur5 ing the taxable year. 

6 ‘‘(4) HOMEOWNERS ASSOCIATIONS.—The appli7 cation of this section to homeowners associations (as 

8 defined in section 528(c)(1)) or members of such as9 sociations, and tenant-stockholders in cooperative 

10 housing corporations (as defined in section 216), 

11 shall be allowed by allocation, apportionment, or oth12 erwise, to the individuals paying, directly or indi13 rectly, for the residential energy cost so incurred. 

14 ‘‘(d) INFLATION ADJUSTMENT.— 

15 ‘‘(1) IN GENERAL.—In the case of any taxable 

16 year beginning after 2005, each of the dollar 

17 amounts contained in subsections (a)(2) and 

18 (b)(1)(A) shall be increased by an amount equal 

19 to— 

20 ‘‘(A) such dollar amount, multiplied by 

21 ‘‘(B) in the case of— 

22 ‘‘(i) the dollar amount contained in 

23 subsection (a)(2), the fuel price inflation 

24 adjustment for the calendar year in which 

25 the taxable year begins, and 
5 

•S 1987 IS

1 ‘‘(ii) the dollar amounts contained in 

2 subsection (b)(1)(A), the cost-of-living ad3 justment determined under section 1(f)(3) 

4 for the calendar year in which the taxable 

5 year begins by substituting ‘calendar year 

6 2004’ for ‘calendar year 1992’ in subpara7 graph (B) thereof. 

8 ‘‘(2) FUEL PRICE INFLATION ADJUSTMENT.— 

9 For purposes of paragraph (1)(B)(i)— 

10 ‘‘(A) IN GENERAL.—The fuel price infla11 tion adjustment for any calendar year is the 

12 percentage (if any) by which— 

13 ‘‘(i) the CPI fuel component for Octo14 ber of the preceding calendar year, exceeds 

15 ‘‘(ii) the CPI fuel component for Oc16 tober of 2004. 

17 ‘‘(B) CPI FUEL COMPONENT.—The term 

18 ‘CPI fuel component’ means the fuel component 

19 of the Consumer Price Index for All Urban 

20 Consumers published by the Department of 

21 Labor. 

22 ‘‘(3) ROUNDING.— 

23 ‘‘(A) CREDIT AMOUNT.—If the dollar 

24 amount in subsection (a)(2) (after being in25 creased under paragraph (1)), is not a multiple 
6 

•S 1987 IS

1 of $10, such dollar amount shall be rounded to 

2 the nearest multiple of $10. 

3 ‘‘(B) INCOME THRESHOLD.—If any dollar 

4 amount in subsection (b)(1)(A) (after being in5 creased under paragraph (1)), is not a multiple 

6 of $50, such dollar amount shall be rounded to 

7 the next lowest multiple of $50. 

8 ‘‘(e) COORDINATION WITH ADVANCE PAYMENTS OF

9 CREDIT.—With respect to any taxable year, the amount 

10 which would (but for this subsection) be allowed as a cred11 it to the taxpayer under subsection (a) shall be reduced 

12 (but not below zero) by the aggregate amount paid on be13 half of such taxpayer under section 7529 for months be14 ginning in such taxable year. 

15 ‘‘(f) REGULATIONS.—The Secretary may prescribe 

16 such regulations and other guidance as may be necessary 

17 or appropriate to carry out this section, section 6050U, 

18 and section 7529. 

19 ‘‘(g) APPLICABILITY OF SECTION.—This section shall 

20 apply to residential energy costs paid or incurred after the 

21 date of the enactment of this section, in taxable years end22 ing after such date and before January 1, 2008.’’. 

23 (b) ADVANCE PAYMENT OF CREDIT.—Chapter 77 of 

24 the Internal Revenue Code of 1986 (relating to miscella-
7 

•S 1987 IS

1 neous provisions) is amended by adding at the end the 

2 following new section: 

3 ‘‘SEC. 7529. ADVANCE PAYMENT OF CREDIT FOR RESIDEN4 TIAL ENERGY COSTS. 

5 ‘‘(a) GENERAL RULE.—The Secretary shall establish 

6 a program for making payments on behalf of certified indi7 viduals to providers of residential energy (within the 

8 meaning of section 36(c)(1)) for such individuals. 

9 ‘‘(b) LIMITATION ON ADVANCE PAYMENTS DURING

10 ANY TAXABLE YEAR.—The Secretary may make pay11 ments under subsection (a) only to the extent that the 

12 total amount of such payments made on behalf of any indi13 vidual during the taxable year does not exceed the amount 

14 of the credit allowable to such individual under section 36 

15 for the taxable year. 

16 ‘‘(c) CERTIFIED INDIVIDUAL.—For purposes of this 

17 section, the term ‘certified individual’ means any indi18 vidual for whom a qualified residential energy costs credit 

19 eligibility certificate is in effect. 

20 ‘‘(d) QUALIFIED RESIDENTIAL ENERGY COSTS

21 CREDIT ELIGIBILITY CERTIFICATE.—For purposes of this 

22 section, the term ‘qualified residential energy costs credit 

23 eligibility certificate’ means any written statement if such 

24 statement provides such information as the Secretary may 

25 require for purposes of this section and is certified by the 
8 

•S 1987 IS

1 Low-Income Home Energy Assistance program official of 

2 the State in which such individual resides.’’. 

3 (c) INFORMATION RETURNS.—Subpart B of part III 

4 of subchapter A of chapter 61 of the Internal Revenue 

5 Code of 1986 (relating to information concerning trans6 actions with other persons) is amended by adding at the 

7 end the following new section: 

8 ‘‘SEC. 6050U. RETURNS RELATING TO CREDIT FOR RESI9 DENTIAL ENERGY COSTS. 

10 ‘‘(a) REQUIREMENT OF REPORTING.—Every person 

11 who is entitled to receive payments for any month of any 

12 calendar year under section 7529 (relating to advance pay13 ment of credit for residential energy costs) with respect 

14 to any certified individual (as defined in section 7529(c)) 

15 shall, at such time as the Secretary may prescribe, make 

16 the return described in subsection (b) with respect to each 

17 such individual. 

18 ‘‘(b) FORM AND MANNER OF RETURNS.—A return 

19 is described in this subsection if such return— 

20 ‘‘(1) is in such form as the Secretary may pre21 scribe, and 

22 ‘‘(2) contains— 

23 ‘‘(A) the name, address, and TIN of each 

24 individual referred to in subsection (a), 
9 

•S 1987 IS

1 ‘‘(B) the number of months for which 

2 amounts were entitled to be received with re3 spect to such individual under section 7529 (re4 lating to advance payment of credit for residen5 tial energy costs), 

6 ‘‘(3) the amount entitled to be received for each 

7 such month, and 

8 ‘‘(4) such other information as the Secretary 

9 may prescribe. 

10 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID11 UALS WITH RESPECT TO WHOM INFORMATION IS RE12 QUIRED.—Every person required to make a return under 

13 subsection (a) shall furnish to each individual whose name 

14 is required to be set forth in such return a written state15 ment showing— 

16 ‘‘(1) the name and address of the person re17 quired to make such return and the phone number 

18 of the information contact for such person, and 

19 ‘‘(2) the information required to be shown on 

20 the return with respect to such individual. 

21 The written statement required under the preceding sen22 tence shall be furnished on or before January 31 of the 

23 year following the calendar year for which the return 

24 under subsection (a) is required to be made.’’. 

25 (d) CONFORMING AMENDMENTS.— 
10 

•S 1987 IS

1 (1) Section 1324(b)(2) of title 31, United 

2 States Code, is amended by striking ‘‘or’’ before 

3 ‘‘enacted’’ and by inserting before the period at the 

4 end ‘‘, or from section 36 of such Code’’. 

5 (2) Section 6103(l) of the Internal Revenue 

6 Code of 1986 is amended by adding at the end the 

7 following new paragraph: 

8 ‘‘(21) DISCLOSURE OF RETURN INFORMATION

9 FOR PURPOSES OF CARRYING OUT A PROGRAM FOR

10 ADVANCE PAYMENT OF CREDIT FOR RESIDENTIAL

11 ENERGY COSTS.—The Secretary may disclose to pro12 viders of residential energy for any certified indi13 vidual (as defined in section 7529(c)) return infor14 mation with respect to such certified individual only 

15 to the extent necessary to carry out the program es16 tablished by section 7529 (relating to advance pay17 ment of credit for residential energy costs).’’. 

18 (e) CLERICAL AMENDMENTS.— 

19 (1) The table of sections for subpart C of part 

20 IV of subchapter A of chapter 1 of the Internal Rev21 enue Code of 1986 is amended by striking the item 

22 relating to section 35 and by adding at the end the 

23 following new items: 

‘‘Sec. 36. Credit for residential energy cost assistance. 

‘‘Sec. 37. Overpayments of tax.’’. 
11 

•S 1987 IS

1 (2) The table of sections for chapter 77 of such 

2 Code is amended by adding at the end the following 

3 new item: 

‘‘Sec. 7529. Advance payment of credit for residential energy costs.’’. 

4 (3) The table of sections for subpart B of part 

5 III of subchapter A of chapter 61 of such Code is 

6 amended by adding at the end the following new 

7 item: 

‘‘Sec. 6050U. Returns relating to credit for residential energy costs.’’. 

Æ