I

107TH CONGRESS

1ST SESSION H. R. 1797

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

tax for qualified energy management devices, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 10, 2001

Ms. DUNN of Washington 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 provide

a credit against tax for qualified energy management

devices, 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 ‘‘Energy Efficiency and

5 Conservation Incentives Act of 2001’’.

6 SEC. 2. ALLOWANCE OF DEDUCTION FOR QUALIFIED EN7 ERGY MANAGEMENT DEVICES AND RETRO8 FITTED QUALIFIED METERS.

9 (a) IN GENERAL.—Part VI of subchapter B of chap10 ter 1 of the Internal Revenue Code of 1986 (relating to
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1 itemized deductions for individuals and corporations) is

2 amended by inserting after section 179A the following new

3 section:

4 ‘‘SEC. 179B. DEDUCTION FOR QUALIFIED ENERGY MANAGE5 MENT DEVICES AND RETROFITTED METERS.

6 ‘‘(a) ALLOWANCE OF DEDUCTION.—There shall be

7 allowed as a deduction—

8 ‘‘(1) an amount equal to $30 for each qualified

9 energy management device originally placed in serv10 ice during the taxable year, and

11 ‘‘(2) for each qualified retrofitted meter origi12 nally placed in service during the taxable year, an

13 amount equal to the lesser of—

14 ‘‘(A) $30, or

15 ‘‘(B) the adjusted basis of such meter.

16 ‘‘(b) DEFINITIONS.—

17 ‘‘(1) QUALIFIED ENERGY MANAGEMENT DE18 VICE.—For purposes of this section, the term ‘quali19 fied energy management device’ means any meter or

20 metering device acquired and used by an electric en21 ergy or natural gas supplier or service provider to

22 enable consumers or others to manage their pur23 chase, sale, or use of electricity or natural gas in re24 sponse to energy price and usage signals.
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1 ‘‘(2) QUALIFIED RETROFITTED METER.—For

2 purposes of this section, the term ‘qualified retro3 fitted meter’ means an electric energy or natural gas

4 meter or metering device that has been modified by

5 the addition of equipment designed to enable users

6 to manage the purchase, sale, or use of electricity

7 and natural gas in response to energy price and

8 usage signals.

9 ‘‘(3) PLACED IN SERVICE.—For purposes of

10 this section, the term ‘placed in service’ means inter11 connected with other devices in a manner that per12 mits reading of energy price and usage signals on at

13 least a daily basis.

14 ‘‘(4) COST OF METERS INCLUDES COST OF IN15 STALLATION.—The cost of any qualified energy

16 management device or qualified retrofitted meter re17 ferred to in paragraph (1) or (2) shall include the

18 cost of the original installation of such property.

19 ‘‘(c) DEVICES INSTALLED OUTSIDE THE UNITED

20 STATES NOT QUALIFIED.—No deduction shall be allowed

21 under subsection (a) with respect to any qualified energy

22 management device or qualified retrofitted meter placed

23 in service outside the United States.

24 ‘‘(d) BASIS REDUCTION.—
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1 ‘‘(1) IN GENERAL.—For purposes of this title,

2 the basis of any property shall be reduced by the

3 amount of the deduction with respect to such prop4 erty which is allowed by subsection (a).

5 ‘‘(2) ORDINARY INCOME RECAPTURE.—For

6 purposes of section 1245, the amount of the deduc7 tion allowable under subsection (a) with respect to

8 any property that is of a character subject to the al9 lowance for depreciation shall be treated as a deduc10 tion allowed for depreciation under section 167.’’.

11 (b) CONFORMING AMENDMENTS.—

12 (1) Section 263(a)(1) of such Code is amended

13 by striking ‘‘or’’ at the end of subparagraph (G), by

14 striking the period at the end of subparagraph (H)

15 and inserting ‘‘, or’’, and by inserting after subpara16 graph (H) the following new subparagraph:

17 ‘‘(I) expenditures for which a deduction is

18 allowed under section 179B.’’.

19 (2) Section 312(k)(3)(B) of such Code is

20 amended by striking ‘‘or 179A’’ each place it ap21 pears in the heading and text and inserting ‘‘, 179A,

22 or 179B’’.

23 (3) Section 1016(a) of such Code is amended

24 by striking ‘‘and’’ at the end of paragraph (26), by

25 striking the period at the end of paragraph (27) and
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1 inserting ‘‘, and’’, and by inserting after paragraph

2 (27) the following new paragraph:

3 ‘‘(28) to the extent provided in section

4 179B(d)(1),’’.

5 (4) Section 1245(a) of such Code is amended

6 by inserting ‘‘179B,’’ after ‘‘179A,’’ both places it

7 appears in paragraphs (2)(C) and (3)(C).

8 (5) The table of contents for subpart B of part

9 IV of subchapter A of chapter 1 of such Code is

10 amended by inserting after the item relating to sec11 tion 179A the following new item:

‘‘Sec. 179B. Deduction for qualified energy management devices

and retrofitted meters.’’.

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

13 this section shall apply to qualified energy management

14 devices placed in service after the date of the enactment

15 of this Act and to qualified retrofitted meters that are

16 placed in service after, or that are in use as of, the date

17 of the enactment of this Act.

18 SEC. 3. 3-YEAR APPLICABLE RECOVERY PERIOD FOR DE19 PRECIATION OF QUALIFIED ENERGY MAN20 AGEMENT DEVICES.

21 (a) IN GENERAL.—Subparagraph (A) of section

22 168(e)(3) of the Internal Revenue Code of 1986 (relating

23 to classification of property) is amended by striking ‘‘and’’

24 at the end of clause (ii), by striking the period at the end
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1 of clause (iii) and inserting ‘‘, and’’, and by adding at the

2 end the following new clause:

3 ‘‘(iv) any qualified energy manage4 ment device.’’.

5 (b) DEFINITION OF QUALIFIED ENERGY MANAGE6 MENT DEVICE.—Section 168(i) of such Code (relating to

7 definitions and special rules) is amended by inserting at

8 the end the following new paragraph:

9 ‘‘(15) QUALIFIED ENERGY MANAGEMENT DE10 VICE.—The term ‘qualified energy management de11 vice’ means a meter or metering device that is ac12 quired and used by an electric energy or natural gas

13 supplier or service provider to enable consumers and

14 others to manage their purchase, sale, and use of

15 electricity or natural gas in response to energy price

16 and usage signals that are readable on at least a

17 daily basis. For purposes of the preceding sentence,

18 the cost of any qualified energy management device

19 shall (at the election of the taxpayer) include the

20 cost of the original installation of such property.’’.

21 (c) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to property placed in service after

23 December 31, 2000.

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