II 

109TH CONGRESS 

1ST SESSION S. 2105 

To amend the Internal Revenue Code of 1986 to modify the credit for 

nonbusiness energy property so that the amount of the credit is determined based on the amount of energy savings achieved by the taxpayer. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 15, 2005 

Mr. COLEMAN 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 modify 

the credit for nonbusiness energy property so that the 

amount of the credit is determined based on the amount 

of energy savings achieved by the taxpayer. 

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 ‘‘Home Energy Savings 

5 Incentives Act of 2005’’. 
2 

•S 2105 IS

1 SEC. 2. MODIFICATION OF CREDIT FOR CERTAIN NONBUSI2 NESS ENERGY PROPERTY. 

3 (a) IN GENERAL.—Section 25C of the Internal Rev4 enue Code of 1986 is amended to read as follows: 

5 ‘‘SEC. 25C. NONBUSINESS ENERGY PROPERTY. 

6 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in7 dividual, there shall be allowed as a credit against the tax 

8 imposed by this chapter for the taxable year an amount 

9 equal to the sum of— 

10 ‘‘(1) $10 for each therm of certified natural gas 

11 savings attributable to qualified energy efficiency ex12 penditures made during the taxable year, and 

13 ‘‘(2) $0.65 for each kilowatt hour of certified 

14 electricity savings attributable to qualified energy ef15 ficiency expenditures made during the taxable year. 

16 ‘‘(b) LIFETIME LIMITATION.—The credit allowed 

17 under this section with respect to any taxpayer for any 

18 taxable year shall not exceed the excess (if any) of $5,000 

19 over the aggregate credits allowed under this section with 

20 respect to such taxpayer for all prior taxable years. 

21 ‘‘(c) QUALIFIED ENERGY EFFICIENCY EXPENDI22 TURES.—For purposes of this section— 

23 ‘‘(1) IN GENERAL.—The term ‘qualified energy 

24 efficiency expenditures’ means expenditures made by 

25 the taxpayer, after consultation with a qualified indi26 vidual described in subsection (d)(2)(C), for the im-
3 

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1 provement of a dwelling unit of the taxpayer located 

2 in the United States and used by the taxpayer as 

3 the taxpayer’s principal residence. 

4 ‘‘(2) NO DOUBLE BENEFIT FOR CERTAIN EX5 PENDITURES.—The term ‘qualified energy efficiency 

6 expenditures’ shall not include any expenditure for 

7 which a deduction or credit is otherwise allowed 

8 under this chapter. 

9 ‘‘(3) PRINCIPAL RESIDENCE.— 

10 ‘‘(A) IN GENERAL.—The term ‘principal 

11 residence’ has the same meaning as when used 

12 in section 121, except that— 

13 ‘‘(i) no ownership requirement shall 

14 be imposed, and 

15 ‘‘(ii) the period for which a building is 

16 treated as used as a principal residence 

17 shall also include the 60-day period ending 

18 on the 1st day on which it would (but for 

19 this subparagraph) first be treated as used 

20 as a principal residence. 

21 ‘‘(B) MANUFACTURED HOUSING.—The 

22 term ‘residence’ shall include a dwelling unit 

23 which is a manufactured home conforming to 

24 Federal Manufactured Home Construction and 

25 Safety Standards (24 C.F.R. 3280). 
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1 ‘‘(d) CERTIFIED NATURAL GAS SAVINGS; CERTIFIED

2 ELECTRICITY SAVINGS.— 

3 ‘‘(1) IN GENERAL.— 

4 ‘‘(A) CERTIFIED NATURAL GAS SAVINGS.— 

5 The term ‘certified natural gas savings’ means, 

6 with respect to any taxable year, the amount, 

7 measured in therms on an average annual 

8 basis, which is equal to the excess of— 

9 ‘‘(i) 85 percent of the amount of nat10 ural gas which would be consumed with re11 spect to the dwelling unit of the taxpayer 

12 if the qualified energy efficiency expendi13 tures with respect to such taxable year 

14 were not made, as certified in accordance 

15 with paragraph (2), over 

16 ‘‘(ii) the amount of such natural gas 

17 consumption with respect to such dwelling 

18 unit determined by taking into account the 

19 qualified energy efficiency expenditures 

20 made during such taxable year, as certified 

21 in accordance with paragraph (2). 

22 ‘‘(B) CERTIFIED ELECTRICITY SAVINGS.— 

23 The term ‘certified electricity savings’ means, 

24 with respect to any taxable year, the amount, 
5 

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1 measured in kilowatt hours on an annual basis, 

2 which is equal to the excess of— 

3 ‘‘(i) 85 percent of the amount of elec4 tricity which would be consumed with re5 spect to the dwelling unit of the taxpayer 

6 if the qualified energy efficiency expendi7 tures with respect to such taxable year 

8 were not made, as certified in accordance 

9 with paragraph (2), over 

10 ‘‘(ii) the amount of electricity con11 sumption with respect to such dwelling 

12 unit determined by taking into account the 

13 qualified energy efficiency expenditures 

14 made during such taxable year, as certified 

15 in accordance with paragraph (2). 

16 ‘‘(2) CERTIFICATION.— 

17 ‘‘(A) IN GENERAL.—The Secretary shall 

18 prescribe the manner and method for the mak19 ing of certifications under this paragraph. 

20 ‘‘(B) PROCEDURES.—The Secretary shall 

21 include as part of the certification process pro22 cedures for inspection and testing by qualified 

23 individuals described in subparagraph (C) to 

24 ensure compliance of dwelling units with the re25 quirements of this section. Such procedures 
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1 shall be similar to the requirements in the 

2 Mortgage Industry National Accreditation Pro3 cedures for Home Energy Rating Systems. 

4 ‘‘(C) QUALIFIED INDIVIDUALS.—Individ5 uals qualified to determine compliance shall be 

6 only those individuals who are recognized by an 

7 organization certified by the Secretary for such 

8 purposes. 

9 ‘‘(e) SPECIAL RULES.—For purposes of this section, 

10 rules similar to the rules under paragraphs (4), (5), (6), 

11 (7), (8), and (9) of section 25D(e) shall apply. 

12 ‘‘(f) BASIS ADJUSTMENTS.—For purposes of this 

13 subtitle, if a credit is allowed under this section with re14 spect to any expenditure with respect to any property, the 

15 increase in the basis of such property which would (but 

16 for this subsection) result from such expenditure shall be 

17 reduced by the amount of the credit so allowed. 

18 ‘‘(g) TERMINATION.—This section shall not apply 

19 with respect to any property placed in service after Decem20 ber 31, 2007.’’. 

21 (b) CONFORMING AMENDMENT.—Section 

22 1016(a)(34) is amended by striking ‘‘25C(e)’’ and insert23 ing ‘‘section 25C(f)’’. 
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1 (c) EFFECTIVE DATES.—The amendments made by 

2 this section shall apply to property placed in service after 

3 December 31, 2005. 

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