II 

109TH CONGRESS 

1ST SESSION S. 1982 

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

residential heating costs. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 9, 2005 

Ms. SNOWE 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 tax credit against residential heating costs. 

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 Assist5 ance Act of 2005’’. 

6 SEC. 2. TAX CREDIT AGAINST RESIDENTIAL HEATING 

7 COSTS. 

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

10 1986 (relating to nonrefundable personal credits) is 
2 

•S 1982 IS

1 amended by inserting after section 25D the following new 

2 section: 

3 ‘‘SEC. 25E. CREDIT AGAINST RESIDENTIAL HEATING COSTS. 

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

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

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

7 the amount paid or incurred during such taxable year for 

8 residential heating costs. 

9 ‘‘(b) LIMITATIONS.— 

10 ‘‘(1) DOLLAR LIMITATION.—The amount of the 

11 credit allowed to under subsection (a) to any tax12 payer shall not exceed $500 for any taxable year. 

13 ‘‘(2) LIMITATION BASED ON ADJUSTED GROSS

14 INCOME.— 

15 ‘‘(A) IN GENERAL.—The amount of the 

16 credit which would (but for this paragraph) be 

17 taken into account under subsection (a) for the 

18 taxable year shall be reduced (but not below 

19 zero) by the amount determined under subpara20 graph (B). 

21 ‘‘(B) AMOUNT OF REDUCTION.—The 

22 amount determined under this subparagraph is 

23 the amount which bears the same ratio to the 

24 amount which would be so taken into account 

25 as— 
3 

•S 1982 IS

1 ‘‘(i) the excess of— 

2 ‘‘(I) the taxpayers adjusted gross 

3 income for such taxable year, over 

4 ‘‘(II) the threshold amount, bears 

5 to 

6 ‘‘(ii) the phaseout amount. 

7 ‘‘(C) THRESHOLD AMOUNT.—For purposes 

8 of this paragraph, the term ‘threshold amount’ 

9 means— 

10 ‘‘(i) $80,000 in the case of a joint re11 turn, 

12 ‘‘(ii) $65,000 in the case of a head of 

13 a household, and 

14 ‘‘(iii) $40,000 in any other case. 

15 ‘‘(D) PHASEOUT AMOUNT.—For purposes 

16 of this paragraph, the term ‘phaseout amount’ 

17 means— 

18 ‘‘(i) $20,000 in the case of a joint re19 turn or a head of a household, and 

20 ‘‘(ii) $10,000 in any other case. 

21 ‘‘(3) MAXIMUM CREDIT PER HOUSEHOLD.— 

22 ‘‘(A) IN GENERAL.—In the case of any 

23 household, the credit under subsection (a) shall 

24 be allowed only to the individual residing in 

25 such household who furnishes the largest por-
4 

•S 1982 IS

1 tion (whether or not more than one-half) of the 

2 cost of maintaining such household. 

3 ‘‘(B) DETERMINATION OF AMOUNT.—In 

4 the case of an individual described in subpara5 graph (A), such individual shall, for purposes of 

6 determining the amount of the credit allowed 

7 under subsection (a), be treated as having paid 

8 or incurred during such taxable year for in9 creased residential heating costs an amount 

10 equal to the sum of the amounts paid or in11 curred for such heating costs by all individuals 

12 residing in such household (including any 

13 amount allocable to any such individual under 

14 subsection (d) or (e)). 

15 ‘‘(c) CARRYBACK OF CREDIT.— 

16 ‘‘(1) IN GENERAL.—If the credit allowable 

17 under subsection (a) for a taxable year exceeds the 

18 limitation under subsection (b)(1) for such taxable 

19 year, such excess shall be allowed— 

20 ‘‘(A) as a credit carryback to each of the 

21 2 taxable years preceding such taxable year, 

22 and 

23 ‘‘(B) as a credit carryforward to each of 

24 the 20 taxable years following such taxable 

25 year. 
5 

•S 1982 IS

1 ‘‘(2) AMOUNT CARRIED TO EACH YEAR.—Rules 

2 similar to the rules of section 39(b)(2) shall apply 

3 for purposes of this section. 

4 ‘‘(3) LIMITATION.—The amount of unused 

5 credit which may be taken into account under para6 graph (1) for any taxable year shall not exceed the 

7 limitation under subsection (b)(1). 

8 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur9 poses of this section— 

10 ‘‘(1) RESIDENTIAL HEATING COSTS.—The term 

11 ‘residential heating costs’ means costs incurred in 

12 connection with an energy source used to heat a 

13 principal residence of the taxpayer located in the 

14 United States. 

15 ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin16 cipal residence’ has the same meaning as in section 

17 121, except that— 

18 ‘‘(A) no ownership requirement shall be 

19 imposed, and 

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

21 by the taxpayer as the taxpayer’s residence dur22 ing the taxable year. 

23 ‘‘(3) NO CREDIT FOR MARRIED INDIVIDUALS

24 FILING SEPARATE RETURNS.—If the taxpayer is a 

25 married individual (within the meaning of section 
6 

•S 1982 IS

1 7703), this section shall apply only if the taxpayer 

2 and the taxpayer’s spouse file a joint return for the 

3 taxable year. 

4 ‘‘(4) TREATMENT OF EXPENSES PAID BY DE5 PENDENT.—If a deduction under section 151 with 

6 respect to an individual is allowed to another tax7 payer for a taxable year beginning in the calendar 

8 year in which such individual’s taxable year begins— 

9 ‘‘(A) no credit shall be allowed under sub10 section (a) to such individual for such individ11 ual’s taxable year, and 

12 ‘‘(B) residential heating costs paid by such 

13 individual during such individual’s taxable year 

14 shall be treated for purposes of this section as 

15 paid by such other taxpayer. 

16 ‘‘(e) HOMEOWNERS ASSOCIATIONS.—The application 

17 of this section to homeowners associations (as defined in 

18 section 528(c)(1)) or members of such associations, and 

19 tenant-stockholders in cooperative housing corporations 

20 (as defined in section 216), shall be allowed by allocation, 

21 apportionment, or otherwise, to the individuals paying, di22 rectly or indirectly, for the increased residential heating 

23 cost so incurred. 
7 

•S 1982 IS

1 ‘‘(f) APPLICABILITY OF SECTION.—This section shall 

2 apply to taxable years beginning after December 31, 2005, 

3 and before January 1, 2007.’’. 

4 (b) REDUCTION IN WITHHOLDING.—The Secretary 

5 of the Treasury— 

6 (1) shall educate taxpayers on adjusting with7 holding of taxes to reflect any anticipated tax credit 

8 under section 25E of the Internal Revenue Code of 

9 1986, and 

10 (2) may adjust the wage withholding tables pre11 scribed under section 3402(a)(1) of such Code to 

12 take into account the credit allowed under section 

13 25E of such Code. 

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

15 for subpart A of part IV of subchapter A of chapter 1 

16 of the Internal Revenue Code of 1986 is amended by strik17 ing the item relating to section 35 and by adding at the 

18 end the following new items: 

‘‘Sec. 25E. Credit against residential heating costs.’’. 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2005. 
8 

•S 1982 IS

1 SEC. 3. DISALLOWANCE OF USE OF LIFO METHOD OF AC2 COUNTING BY LARGE INTEGRATED OIL COM3 PANIES FOR LAST TAXABLE YEAR ENDING 

4 BEFORE OCTOBER 1, 2005. 

5 (a) GENERAL RULE.—Notwithstanding any other 

6 provision of law, an applicable integrated oil company 

7 shall, in determining the amount of Federal income tax 

8 imposed on such company for its most recent taxable year 

9 ending on or before September 30, 2005, use the first10 in, first-out (FIFO) method of accounting rather than the 

11 last-in, last-out (LIFO) method of accounting with respect 

12 to its crude oil inventories. 

13 (b) APPLICATION OF REQUIREMENT.—The require14 ment to use the first-in, first-out (FIFO) method of ac15 counting under subsection (a)— 

16 (1) shall not be treated as a change in method 

17 of accounting, and 

18 (2) shall be disregarded in determining the 

19 method of accounting required to be used in any 

20 succeeding taxable year. 

21 (c) APPLICABLE INTEGRATED OIL COMPANY.—For 

22 purposes of this section, the term ‘‘applicable integrated 

23 oil company’’ means an integrated oil company (as defined 

24 in section 291(b)(4) of the Internal Revenue Code of 

25 1986) which— 
9 

•S 1982 IS

1 (1) had gross receipts in excess of 

2 $1,000,000,000 for its most recent taxable year end3 ing on or before September 30, 2005, and 

4 (2) would, without regard to this section, use 

5 the last-in, first-out (LIFO) method of accounting 

6 with respect to its crude oil inventories for such tax7 able year. 

8 For purposes of paragraph (1), all persons treated as a 

9 single employer under subsections (a) and (b) of section 

10 52 of the Internal Revenue Code of 1986 shall be treated 

11 as 1 person. 

Æ