II 

109TH CONGRESS 

2D SESSION S. 3628 

To amend the Internal Revenue Code of 1986 to improve and extend certain 

energy-related tax provisions, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 29, 2006 

Ms. SNOWE (for herself, Mrs. FEINSTEIN, and Mr. KERRY) 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 improve 

and extend certain energy-related tax provisions, 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; ETC. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘EXTEND the Energy Efficiency Incentives Act of 

6 2006’’. 

7 (b) AMENDMENT OF 1986 CODE.—Except as other8 wise expressly provided, whenever in this Act an amend9 ment or repeal is expressed in terms of an amendment 

10 to, or repeal of, a section or other provision, the reference 


rwilkins on PROD1PC63 with BILLS
2 

•S 3628 IS

1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986. 

3 (c) TABLE OF CONTENTS.—The table of contents of 

4 this Act is as follows: 

Sec. 1. Short title; etc. 

TITLE I—NON-BUSINESS ENERGY IMPROVEMENTS 

Sec. 101. Performance based energy improvements for non-business property. 

Sec. 102. Extension and modification of credit for nonbusiness energy property. 

Sec. 103. Modification of credit for solar electric property and solar hot water 

property. 

TITLE II—BUSINESS-RELATED ENERGY IMPROVEMENTS 

Sec. 201. Extension and clarification of new energy efficient home credit. 

Sec. 202. Extension and modification of deduction for energy efficient commercial buildings. 

Sec. 203. Deduction for energy efficient low-rise buildings. 

Sec. 204. Energy efficient property deduction. 

Sec. 205. Extension of investment tax credit with respect to solar energy property and qualified fuel cell property. 

TITLE III—INCENTIVES FOR ENERGY SAVINGS CERTIFICATIONS 

Sec. 301. Credit for energy savings certifications. 

5 TITLE I—NON-BUSINESS 

6 ENERGY IMPROVEMENTS 

7 SEC. 101. PERFORMANCE BASED ENERGY IMPROVEMENTS 

8 FOR NON-BUSINESS PROPERTY. 

9 (a) IN GENERAL.—Subpart A of part IV of sub10 chapter A of chapter 1 is amended by inserting after sec11 tion 25D the following new section: 

12 ‘‘SEC. 25E. PERFORMANCE BASED ENERGY IMPROVE13 MENTS. 

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

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

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


rwilkins on PROD1PC63 with BILLS
3 

•S 3628 IS

1 the amount of qualified energy efficiency expenditures 

2 paid or incurred by the taxpayer during the taxable year. 

3 ‘‘(b) LIMITATIONS.— 

4 ‘‘(1) IN GENERAL.—The amount allowed as a 

5 credit under subsection (a) shall not exceed— 

6 ‘‘(A) in the case of a principal residence 

7 that achieves a qualified energy savings of 50 

8 percent or more, $2,000, and 

9 ‘‘(B) in the case of a principal residence 

10 which achieves a qualified energy savings of less 

11 than 50 percent, the product of— 

12 ‘‘(i) the qualified energy savings 

13 achieved, and 

14 ‘‘(ii) $4,000. 

15 ‘‘(2) MINIMUM AMOUNT OF QUALIFIED ENERGY

16 SAVINGS.—No credit shall be allowed under sub17 section (a) with respect to any principal residence 

18 which achieves a qualified energy savings of less 

19 than 20 percent. 

20 ‘‘(c) QUALIFIED ENERGY EFFICIENCY EXPENDI21 TURES.—For purposes of this section: 

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

23 efficiency expenditures’ means any amount paid or 

24 incurred which is related to producing qualified enVerDate Aug 31 2005 22:26 Jul 12, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3628.IS S3628

rwilkins on PROD1PC63 with BILLS
4 

•S 3628 IS

1 ergy savings in a principal residence of the taxpayer 

2 which is located in the United States. 

3 ‘‘(2) NO DOUBLE BENEFIT FOR CERTAIN EX4 PENDITURES.—The term ‘qualified energy efficiency 

5 expenditures’ shall not include any expenditure for 

6 which a deduction or credit is otherwise allowed to 

7 the taxpayer under this chapter. 

8 ‘‘(3) PRINCIPAL RESIDENCE.—The term ‘prin9 cipal residence’ has the same meaning as when used 

10 in section 121, except that— 

11 ‘‘(A) no ownership requirement shall be 

12 imposed, and 

13 ‘‘(B) the period for which a building is 

14 treated as used as a principal residence shall 

15 also include the 60-day period ending on the 1st 

16 day on which it would (but for this subpara17 graph) first be treated as used as a principal 

18 residence. 

19 ‘‘(d) QUALIFIED ENERGY SAVINGS.—For purposes of 

20 this section— 

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

22 savings’ means, with respect to any principal resi23 dence, the amount (measured as a percentage) by 

24 which— 


rwilkins on PROD1PC63 with BILLS
5 

•S 3628 IS

1 ‘‘(A) the annual energy use with respect to 

2 the principal residence after qualified energy ef3 ficiency expenditures are made, as certified 

4 under paragraph (2), is less than 

5 ‘‘(B) the annual energy use with respect to 

6 the principal residence before the qualified en7 ergy efficiency expenditures were made, as cer8 tified under paragraph (2). 

9 In determining annual energy use under subpara10 graph (B), any energy efficiency improvements 

11 which are not attributable to qualified energy effi12 ciency expenditures shall be disregarded. 

13 ‘‘(2) CERTIFICATION.— 

14 ‘‘(A) IN GENERAL.—The Secretary, in con15 sultation with the Secretary of Energy, shall 

16 prescribe the procedures and methods for the 

17 making of certifications under this paragraph 

18 based on the Residential Energy Services Net19 work (RESNET) Technical Guidelines in effect 

20 on the date of the enactment of this section. 

21 ‘‘(B) QUALIFIED INDIVIDUALS.—Any cer22 tification made under this paragraph may only 

23 be made by an individual who is recognized by 

24 an organization certified by the Secretary for 

25 such purposes. 


rwilkins on PROD1PC63 with BILLS
6 

•S 3628 IS

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

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

3 (7), (8), and (9) of section 25D(e) and section 25C(e)(2) 

4 shall apply. 

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

6 subtitle, if a credit is allowed under this section with re7 spect to any expenditure with respect to any property, the 

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

9 for this subsection) result from such expenditure shall be 

10 reduced by the amount of the credit so allowed. 

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

12 with respect to any property placed in service after Decem13 ber 31, 2010.’’. 

14 (b) INTERIM GUIDANCE ON CERTIFICATION.— 

15 (1) IN GENERAL.—Not later than 90 days after 

16 the date of the enactment of this Act, the Secretary 

17 of the Treasury, in consultation with the Secretary 

18 of Energy, shall issue interim guidance on— 

19 (A) the procedures and methods for mak20 ing certifications under sections 25E(d)(2)(A) 

21 and 179E(d)(2)(A) of the Internal Revenue 

22 Code of 1986, as added by subsection (a) and 

23 section 203, respectively; and 

24 (B) the recognition of qualified individuals 

25 under sections 25E(d)(2)(B) and 


rwilkins on PROD1PC63 with BILLS
7 

•S 3628 IS

1 179E(d)(2)(B) of such Code for the purpose of 

2 making such certifications. 

3 (2) CONSULTATION WITH STAKEHOLDERS.— 

4 (A) IN GENERAL.—The Secretary of the 

5 Treasury, in issuing guidance pursuant to para6 graph (1), shall consider comments from energy 

7 efficiency experts and other interested parties. 

8 (B) OTHER CONSIDERATIONS.—In the case 

9 of guidance issued pursuant to paragraph 

10 (1)(B), the Secretary of the Treasury shall also 

11 consider— 

12 (i) the Residential Energy Services 

13 Network Technical Guidelines and other 

14 pertinent guidelines for evaluating energy 

15 savings; 

16 (ii) energy modeling software, includ17 ing software accredited through the Resi18 dential Energy Services Network; and 

19 (iii) quality assurance procedures of 

20 the Building Performance Institute, Home 

21 Performance through Energy Star, and the 

22 Residential Energy Services Network. 

23 (c) ALTERNATIVE CERTIFICATION METHODS.— 

24 (1) IN GENERAL.—The Secretary of the Treas25 ury shall establish a procedure for individuals and 


rwilkins on PROD1PC63 with BILLS
8 

•S 3628 IS

1 businesses to petition for the approval of alternative 

2 methods of certification under sections 25E(d)(2)(A) 

3 and 179E(d)(2)(A) of the Internal Revenue Code of 

4 1986, as added by subsection (a) and section 203, 

5 respectively. 

6 (2) DETERMINATION.—The Secretary of the 

7 Treasury shall make a determination on the ap8 proval or disapproval of such alternative methods of 

9 certification not later than 90 days after receiving a 

10 petition under paragraph (1). 

11 (d) CONFORMING AMENDMENTS.— 

12 (1) Section 1016(a) is amended by striking 

13 ‘‘and’’ at the end of paragraph (36), by striking the 

14 period at the end of paragraph (37) and inserting ‘‘, 

15 and’’, and by adding at the end the following new 

16 paragraph: 

17 ‘‘(38) to the extent provided in section 

18 25E(f).’’. 

19 (2) The table of sections for subpart A of part 

20 IV of subchapter A chapter 1 is amended by insert21 ing after the item relating to section 25D the fol22 lowing new item: 

‘‘Sec. 25E. Performance based energy improvements.’’. 

23 (e) EFFECTIVE DATES.—The amendments made by 

24 this section shall apply to amounts paid or incurred in taxVerDate Aug 31 2005 22:26 Jul 12, 2006 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S3628.IS S3628

rwilkins on PROD1PC63 with BILLS
9 

•S 3628 IS

1 able years beginning after the date of the enactment of 

2 this Act. 

3 SEC. 102. EXTENSION AND MODIFICATION OF CREDIT FOR 

4 NONBUSINESS ENERGY PROPERTY. 

5 (a) EXTENSION.—Subsection (g) of section 25C of 

6 the Internal Revenue Code of 1986 (relating to termi7 nation) is amended by striking ‘‘December 31, 2007’’ and 

8 inserting ‘‘December 31, 2010’’. 

9 (b) MODIFICATIONS FOR RESIDENTIAL ENERGY EF10 FICIENCY PROPERTY EXPENDITURES.— 

11 (1) INCREASED LIMITATION FOR OIL FURNACES

12 AND NATURAL GAS, PROPANE, AND OIL HOT WATER

13 BOILERS.— 

14 (A) IN GENERAL.—Subparagraphs (B) and 

15 (C) of section 25C(b)(3) are amended to read 

16 as follows: 

17 ‘‘(B) $150 for any qualified natural gas 

18 furnace or qualified propane furnace, and 

19 ‘‘(C) $300 for— 

20 ‘‘(i) any item of energy-efficient build21 ing property, and 

22 ‘‘(ii) any qualified oil furnace, quali23 fied natural gas hot water boiler, qualified 

24 propane hot water boiler, or qualified oil 

25 hot water boiler.’’. 


rwilkins on PROD1PC63 with BILLS
10 

•S 3628 IS

1 (B) CONFORMING AMENDMENT.—Clause 

2 (ii) of section 25C(d)(2)(A) is amended to read 

3 as follows: 

4 ‘‘(ii) any qualified natural gas fur5 nace, qualified propane furnace, qualified 

6 oil furnace, qualified natural gas hot water 

7 boiler, qualified propane hot water boiler, 

8 or qualified oil hot water boiler, or’’. 

9 (2) MODIFICATIONS OF STANDARDS FOR EN10 ERGY-EFFICIENT BUILDING PROPERTY.— 

11 (A) ELECTRIC HEAT PUMPS.—Subpara12 graph (B) of section 25C(d)(3) is amended to 

13 read as follows: 

14 ‘‘(A) an electric heat pump which achieves 

15 the highest efficiency tier established by the 

16 Consortium for Energy Efficiency, as in effect 

17 on January 1, 2007.’’. 

18 (B) CENTRAL AIR CONDITIONERS.—Sec19 tion 25C(d)(3)(D) is amended by striking 

20 ‘‘2006’’ and inserting ‘‘2007’’. 

21 (C) OIL FURNACES AND HOT WATER BOIL22 ERS.—Paragraph (4) of section 25C(d) is 

23 amended to read as follows: 

24 ‘‘(4) QUALIFIED NATURAL GAS, PROPANE, AND

25 OIL FURNACES AND HOT WATER BOILERS.— 


rwilkins on PROD1PC63 with BILLS
11 

•S 3628 IS

1 ‘‘(A) QUALIFIED NATURAL GAS FUR2 NACE.—The term ‘qualified natural gas fur3 nace’ means any natural gas furnace which 

4 achieves an annual fuel utilization efficiency 

5 rate of not less than 95. 

6 ‘‘(B) QUALIFIED NATURAL GAS HOT

7 WATER BOILER.—The term ‘qualified natural 

8 gas hot water boiler’ means any natural gas hot 

9 water boiler which achieves an annual fuel utili10 zation efficiency rate of not less than 95. 

11 ‘‘(C) QUALIFIED PROPANE FURNACE.— 

12 The term ‘qualified propane furnace’ means any 

13 propane furnace which achieves an annual fuel 

14 utilization efficiency rate of not less than 95. 

15 ‘‘(D) QUALIFIED PROPANE HOT WATER

16 BOILER.—The term ‘qualified propane hot 

17 water boiler’ means any propane hot water boil18 er which achieves an annual fuel utilization effi19 ciency rate of not less than 95. 

20 ‘‘(E) QUALIFIED OIL FURNACES.—The 

21 term ‘qualified oil furnace’ means any oil fur22 nace which achieves an annual fuel utilization 

23 efficiency rate of not less than 90. 

24 ‘‘(F) QUALIFIED OIL HOT WATER BOIL25 ER.—The term ‘qualified oil hot water boiler’ 


rwilkins on PROD1PC63 with BILLS
12 

•S 3628 IS

1 means any oil hot water boiler which achieves 

2 an annual fuel utilization efficiency rate of not 

3 less than 90.’’. 

4 (c) MODIFICATION OF QUALIFIED ENERGY EFFI5 CIENCY IMPROVEMENTS.— 

6 (1) IN GENERAL.—Paragraph (1) of section 

7 25C(c) is amended by inserting ‘‘, or an asphalt roof 

8 with appropriate cooling granules,’’ before ‘‘which 

9 meet the Energy Star program requirements’’. 

10 (2) BUILDING ENVELOPE COMPONENT.—Sub11 paragraph (D) of section 25C(c)(2) is amended— 

12 (A) by inserting ‘‘or asphalt roof’’ after 

13 ‘‘metal roof’’, and 

14 (B) by inserting ‘‘or cooling granules’’ 

15 after ‘‘pigmented coatings’’. 

16 (d) ELIMINATION OF CREDIT FOR QUALIFIED EN17 ERGY EFFICIENCY IMPROVEMENTS IN 2010.— 

18 (1) IN GENERAL.—Subsection (a) of section 

19 25C of the Internal Revenue Code of 1986 is 

20 amended to read as follows: 

21 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in22 dividual, there shall be allowed as a credit against the tax 

23 imposed by this chapter for the taxable year an amount 

24 equal to the amount of residential energy property expendVerDate Aug 31 2005 22:26 Jul 12, 2006 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S3628.IS S3628

rwilkins on PROD1PC63 with BILLS
13 

•S 3628 IS

1 itures paid or incurred by the taxpayer during the taxable 

2 year.’’. 

3 (2) CONFORMING AMENDMENTS.— 

4 (A) Section 25C(b) of such Code, as 

5 amended by subsection (b)(1), is amended by 

6 striking paragraphs (1) and (2) and by redesig7 nating paragraph (3) as paragraph (1). 

8 (B) Section 25C(b)(1) of such Code, as re9 designated by subparagraph (A), is amended by 

10 striking ‘‘by reason of subsection (a)(2)’’. 

11 (C) Section 25C of such Code is amended 

12 by striking subsection (c). 

13 (e) EFFECTIVE DATES.— 

14 (1) IN GENERAL.—Except as provided in para15 graphs (2) and (3), the amendments made by this 

16 section shall apply to property placed in service after 

17 the date of the enactment of this Act. 

18 (2) SUBSECTION (b).—The amendments made 

19 by subsection (b) shall apply to property placed in 

20 service after December 31, 2006. 

21 (3) SUBSECTION (d).—The amendments made 

22 by subsection (d) shall apply to property placed in 

23 service after December 31, 2009. 


rwilkins on PROD1PC63 with BILLS
14 

•S 3628 IS

1 SEC. 103. MODIFICATION OF CREDIT FOR SOLAR ELECTRIC 

2 PROPERTY AND SOLAR HOT WATER PROP3 ERTY. 

4 (a) IN GENERAL.—Subsection (a) of section 25D (re5 lating to allowance of credit) is amended by striking para6 graphs (1) and (2) and inserting the following: 

7 ‘‘(1) 100 percent of the qualified solar electric 

8 property expenditures made by the taxpayer during 

9 such year, 

10 ‘‘(2) 100 percent of the qualified solar hot 

11 water property expenditures made by the taxpayer 

12 during such year, and’’. 

13 (b) LIMITATIONS.— 

14 (1) IN GENERAL.—Paragraph (1) of section 

15 25D(b) is amended by striking subparagraphs (A) 

16 and (B) and inserting the following: 

17 ‘‘(A) $2 with respect to each peak watt of 

18 capacity of qualified solar electric property for 

19 which qualified solar electric property expendi20 tures are made, 

21 ‘‘(B) in the case of qualified solar water 

22 heating property expenditures, an amount equal 

23 to— 

24 ‘‘(i) in the case of a dwelling unit 

25 which uses electricity to heat water, $0.35 

26 with respect to each kilowatt per year of 


rwilkins on PROD1PC63 with BILLS
15 

•S 3628 IS

1 savings of qualified solar hot water prop2 erty for which qualified solar water heating 

3 property expenditures are made, or 

4 ‘‘(ii) in the case of a dwelling unit 

5 which uses natural gas to heat water, $7 

6 with respect to each annual Therm of nat7 ural gas savings of qualified solar hot 

8 water property for which qualified solar 

9 water heating property expenditures are 

10 made, and’’. 

11 (2) DETERMINATION OF SAVINGS.—Paragraph 

12 (1) of section 25D(b) is amended by adding at the 

13 end the following new flush sentence: 

14 ‘‘For purposes of subparagraph (B), savings shall be 

15 determined under regulations prescribed by the Sec16 retary based on the OG–300 Standard for the An17 nual Performance of OG–300 Certified Systems of 

18 the Solar Rating and Certification Corporation.’’. 

19 (c) DEFINITIONS.— 

20 (1) IN GENERAL.—Section 25D(d) is amend21 ed— 

22 (A) by redesignating paragraph (3) as 

23 paragraph (5), and 

24 (B) by striking paragraphs (1) and (2) and 

25 inserting the following: 


rwilkins on PROD1PC63 with BILLS
16 

•S 3628 IS

1 ‘‘(1) QUALIFIED SOLAR ELECTRIC PROPERTY

2 EXPENDITURES.—The term ‘ qualified solar electric 

3 property expenditures’ means any amount paid or 

4 incurred for qualified solar electric property. 

5 ‘‘(2) QUALIFIED SOLAR ELECTRIC PROPERTY.— 

6 The term ‘qualified solar electric property’ means 

7 solar electric property (as defined in section 

8 179F(c)(2)(B)) installed on or in connection with a 

9 dwelling unit located in the United States and used 

10 as a residence by the taxpayer. 

11 ‘‘(3) QUALIFIED SOLAR WATER HEATING PROP12 ERTY EXPENDITURES.—The term ‘qualified solar 

13 water heating property expenditures’ means any 

14 amount paid or incurred for qualified solar hot 

15 water property. 

16 ‘‘(4) QUALIFIED SOLAR HOT WATER PROP17 ERTY.—The term ‘qualified solar hot water property’ 

18 means solar hot water property (as defined in sec19 tion 179F(c)(2)(C)) installed on or in connection 

20 with a dwelling unit located in the United States 

21 and used as a residence by the taxpayer.’’. 

22 (2) CONFORMING AMENDMENTS.— 

23 (A) Section 25D(e)(2) is amended by strik24 ing ‘‘property described in paragraph (1) and 

25 (2) of subsection (d)’’ and inserting ‘‘qualified 


rwilkins on PROD1PC63 with BILLS
17 

•S 3628 IS

1 solar electric property or qualified solar hot 

2 water property’’. 

3 (B) Section 25D(e)(4)(C) is amended by 

4 striking ‘‘paragraphs (1), (2), and (3)’’ and in5 serting ‘‘paragraphs (1),(3), and (5)’’. 

6 (d) DOLLAR AMOUNTS IN CASE OF JOINT OCCU7 PANCY.—Clauses (i) and (ii) of section 25D(e)(4)(A) are 

8 amended to read as follows: 

9 ‘‘(i) $2 in the case of each peak watt 

10 of capacity of qualified solar electric prop11 erty for which qualified solar electric prop12 erty expenditures are made, 

13 ‘‘(ii) in the case of qualified solar 

14 water heating property expenditures, an 

15 amount equal to— 

16 ‘‘(I) in the case of a dwelling unit 

17 which uses electricity to heat water, 

18 $0.35 with respect to each kilowatt 

19 per year of savings of qualified solar 

20 hot water property for which qualified 

21 solar water heating property expendi22 tures are made, or 

23 ‘‘(II) in the case of a dwelling 

24 unit which uses natural gas to heat 

25 water, $7 with respect to each annual 


rwilkins on PROD1PC63 with BILLS
18 

•S 3628 IS

1 Therm of natural gas savings of quali2 fied solar hot water property for 

3 which qualified solar water heating 

4 property expenditures are made, and’’. 

5 (e) EXTENSION OF CREDIT.—Subsection (g) of sec6 tion 25D is amended by striking ‘‘2007’’ and inserting 

7 ‘‘2010’’. 

8 (f) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to property placed in service after 

10 the date of the enactment of this Act. 

11 TITLE II—BUSINESS-RELATED 

12 ENERGY IMPROVEMENTS 

13 SEC. 201. EXTENSION AND CLARIFICATION OF NEW EN14 ERGY EFFICIENT HOME CREDIT. 

15 (a) EXTENSION.—Subsection (g) of section 45L (re16 lating to termination) is amended by striking ‘‘December 

17 31, 2007’’ and inserting ‘‘December 31, 2010’’. 

18 (b) CLARIFICATION.— 

19 (1) IN GENERAL.—Paragraph (1) of section 

20 45L(a) is amended by striking ‘‘and’’ at the end of 

21 subparagraph (A) and by striking subparagraph (B) 

22 and inserting the following: 

23 ‘‘(B) acquired by a person from such eligi24 ble contractor, and 


rwilkins on PROD1PC63 with BILLS
19 

•S 3628 IS

1 ‘‘(C) used by any person as a residence 

2 during the taxable year.’’. 

3 (2) EFFECTIVE DATE.—The amendments made 

4 by this subsection shall take effect as if included in 

5 section 1332 of the Energy Policy Act of 2005. 

6 SEC. 202. EXTENSION AND MODIFICATION OF DEDUCTION 

7 FOR ENERGY EFFICIENT COMMERCIAL 

8 BUILDINGS. 

9 (a) EXTENSION.—Subsection (h) of section 179D 

10 (relating to termination) is amended to read as follows: 

11 ‘‘(h) TERMINATION.—This section shall not apply 

12 with respect to property— 

13 ‘‘(1) which is certified under subsection (d)(6) 

14 after December 31, 2011, or 

15 ‘‘(2) which is placed in service after December 

16 31, 2013.’’. 

17 (b) INCREASE IN MAXIMUM AMOUNT OF DEDUC18 TION.— 

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

20 179D(b)(1) is amended by striking ‘‘$1.80’’ and in21 serting ‘‘$2.25’’. 

22 (2) PARTIAL ALLOWANCE.—Paragraph (1) of 

23 section 179D(d) is amended— 

24 (A) by striking ‘‘$.60’’ and inserting 

25 ‘‘$0.75’’, and 


rwilkins on PROD1PC63 with BILLS
20 

•S 3628 IS

1 (B) by striking ‘‘$1.80’’ and inserting 

2 ‘‘$2.25’’. 

3 (c) MODIFICATIONS TO CERTAIN SPECIAL RULES.— 

4 (1) REQUIREMENTS FOR COMPUTER SOFTWARE

5 USED IN CALCULATING ENERGY AND POWER CON6 SUMPTION COSTS.—Computer software used in pre7 paring a calculation under section 179D(d)(2) of the 

8 Internal Revenue Code of 1986 shall automati9 cally— 

10 (A) generate the features, energy use, and 

11 energy and power consumption costs of a ref12 erence building that meets Standard 90.1–2001 

13 (as defined under section 179D(c)(2) of such 

14 Code), and 

15 (B) compare such features, energy use, 

16 and consumption costs to the features, energy 

17 use, and consumption costs of the building or 

18 system with respect to which the calculation is 

19 being made. 

20 (2) TARGETS FOR PARTIAL ALLOWANCE OF

21 CREDIT.—The targets established by the Secretary 

22 of Treasury under section 179D(b)(1)(B) of the In23 ternal Revenue Code of 1986 shall be based on pre24 scriptive criteria that can be modeled explicitly. 


rwilkins on PROD1PC63 with BILLS
21 

•S 3628 IS

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

2 this section shall apply to property placed in service in 

3 taxable years beginning after the date of the enactment 

4 of this Act. 

5 SEC. 203. DEDUCTION FOR ENERGY EFFICIENT LOW-RISE 

6 BUILDINGS. 

7 (a) IN GENERAL.—Part VI of subchapter B of chap8 ter 1 is amended by inserting after section 179D the fol9 lowing new section: 

10 ‘‘SEC. 179E. ENERGY EFFICIENT LOW-RISE BUILDINGS DE11 DUCTION. 

12 ‘‘(a) IN GENERAL.—There shall be allowed as a de13 duction an amount equal to the amount of qualified energy 

14 efficiency expenditures paid or incurred by the taxpayer 

15 during the taxable year. 

16 ‘‘(b) LIMITATIONS.— 

17 ‘‘(1) IN GENERAL.—The amount allowed as a 

18 credit under subsection (a) shall not exceed— 

19 ‘‘(A) in the case of a qualified low-rise 

20 building that achieves a qualified energy savings 

21 of 50 percent or more, $6,000, and 

22 ‘‘(B) in the case of a qualified low-rise 

23 building which achieves a qualified energy sav24 ings of less than 50 percent, the product of— 


rwilkins on PROD1PC63 with BILLS
22 

•S 3628 IS

1 ‘‘(i) the qualified energy savings 

2 achieved, and 

3 ‘‘(ii) $12,000. 

4 ‘‘(2) MINIMUM AMOUNT OF QUALIFIED ENERGY

5 SAVINGS.—No credit shall be allowed under sub6 section (a) with respect to any qualified low-rise 

7 building which achieves a qualified energy savings of 

8 less than 20 percent. 

9 ‘‘(c) QUALIFIED ENERGY EFFICIENCY EXPENDI10 TURES.—For purposes of this section: 

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

12 efficiency expenditures’ means any amount paid or 

13 incurred which is related to producing qualified en14 ergy savings in a qualified low-rise building of the 

15 taxpayer which is located in the United States. 

16 ‘‘(2) NO DOUBLE BENEFIT FOR CERTAIN EX17 PENDITURES.—The term ‘qualified energy efficiency 

18 expenditures’ shall not include any expenditure for 

19 any property for which a deduction has been allowed 

20 to the taxpayer under section 179F. 

21 ‘‘(3) QUALIFIED LOW-RISE BUILDING.—The 

22 term ‘qualified low-rise building’ means a building— 

23 ‘‘(A) with respect to which depreciation is 

24 allowable under section 167, and 


rwilkins on PROD1PC63 with BILLS
23 

•S 3628 IS

1 ‘‘(B) which is not within the scope of 

2 Standard 90.1–2001 (as defined under section 

3 179D(c)(2)). 

4 ‘‘(d) QUALIFIED ENERGY SAVINGS.—For purposes of 

5 this section— 

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

7 savings’ means, with respect to any qualified low-rise 

8 building, the amount (measured as a percentage) by 

9 which— 

10 ‘‘(A) the annual energy use with respect to 

11 the qualified low-rise building after qualified en12 ergy efficiency expenditures are made, as cer13 tified under paragraph (2), is less than 

14 ‘‘(B) the annual energy use with respect to 

15 the qualified low-rise building before the quali16 fied energy efficiency expenditures were made, 

17 as certified under paragraph (2). 

18 In determining annual energy use under subpara19 graph (B), any energy efficiency improvements 

20 which are not attributable to qualified energy effi21 ciency expenditures shall be disregarded. 

22 ‘‘(2) CERTIFICATION.— 

23 ‘‘(A) IN GENERAL.—The Secretary, in con24 sultation with the Secretary of Energy, shall 

25 prescribe the procedures and method for the 


rwilkins on PROD1PC63 with BILLS
24 

•S 3628 IS

1 making of certifications under this paragraph 

2 based on the Residential Energy Services Net3 work (RESNET) Technical Guidelines in effect 

4 on the date of the enactment of this Act. 

5 ‘‘(B) QUALIFIED INDIVIDUALS.—Any cer6 tification made under this paragraph may only 

7 be made by an individual who is recognized by 

8 an organization certified by the Secretary for 

9 such purposes. 

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

11 rules similar to the rules under paragraphs (8) and (9) 

12 of section 25D(e) shall apply. 

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

14 subtitle, if a credit is allowed under this section with re15 spect to any expenditure with respect to any property, the 

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

17 for this subsection) result from such expenditure shall be 

18 reduced by the amount of the credit so allowed. 

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

20 with respect to any property placed in service after Decem21 ber 31, 2010.’’. 

22 (b) CONFORMING AMENDMENTS.— 

23 (1) Section 1016(a), as amended by section 

24 101, is amended by striking ‘‘and’’ at the end of 

25 paragraph (37), by striking the period at the end of 


rwilkins on PROD1PC63 with BILLS
25 

•S 3628 IS

1 paragraph (38) and inserting ‘‘, and’’, and by add2 ing at the end the following new paragraph: 

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

4 179E(f).’’. 

5 (2) Section 1245(a) is amended by inserting 

6 ‘‘179E,’’ after ‘‘179D,’’ both places it appears in 

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

8 (3) Section 1250(b)(3) is amended by inserting 

9 ‘‘or 179E’’ after ‘‘section 179D’’. 

10 (4) Section 263(a)(1) is amended by striking 

11 ‘‘or’’ at the end of subparagraph (J), by striking the 

12 period at the end of subparagraph (K) and inserting 

13 ‘‘, or’’, and by inserting after subparagraph (K) the 

14 following new subparagraph: 

15 ‘‘(L) expenditures for which a deduction is 

16 allowed under section 179E.’’. 

17 (5) Section 312(k)(3)(B) is amended by strik18 ing ‘‘179, 179A, 179B, 179C, or 179D’’ each place 

19 it appears in the heading and text and inserting 

20 ‘‘179, 179A, 179B, 179C, 179D, or 179E’’. 

21 (6) The table of sections for part VI of sub22 chapter B is amended by inserting after the item re23 lating to section 179D the following new item: 

‘‘Sec. 179E. Energy efficient low-rise buildings deduction.’’. 

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

25 this section shall apply to amounts paid or incurred in taxVerDate Aug 31 2005 22:26 Jul 12, 2006 Jkt 049200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S3628.IS S3628

rwilkins on PROD1PC63 with BILLS
26 

•S 3628 IS

1 able years beginning after the date of the enactment of 

2 this Act. 

3 SEC. 204. ENERGY EFFICIENT PROPERTY DEDUCTION. 

4 (a) IN GENERAL.—Part VI of subchapter B of chap5 ter 1, as amended by section 203, is amended by inserting 

6 after section 179E the following new section: 

7 ‘‘SEC. 179F. ENERGY EFFICIENT PROPERTY. 

8 ‘‘(a) IN GENERAL.—There shall be allowed as a de9 duction an amount equal to the energy efficient property 

10 expenditures paid or incurred by the taxpayer during the 

11 taxable year 

12 ‘‘(b) LIMITATION.—The amount of the deduction al13 lowed under subsection (a) for any taxable years shall not 

14 exceed— 

15 ‘‘(1) $150 for any advanced main air circu16 lating fan, 

17 ‘‘(2) $450 for any qualified natural gas furnace 

18 or qualified propane furnace, 

19 ‘‘(3) $900 for— 

20 ‘‘(A) any item of energy-efficient building 

21 property, and 

22 ‘‘(B) any qualified oil furnace, qualified 

23 natural gas hot water boiler, qualified propane 

24 hot water boiler, or qualified oil hot water boil25 er. 


rwilkins on PROD1PC63 with BILLS
27 

•S 3628 IS

1 ‘‘(4) $9 with respect to each peak watt of ca2 pacity of solar electric property, 

3 ‘‘(5) in the case of solar hot water property, an 

4 amount equal to— 

5 ‘‘(A) in the case of a dwelling unit which 

6 uses electricity to heat water, $1 with respect to 

7 each kilowatt per year of savings of such solar 

8 hot water property, or 

9 ‘‘(B) in the case of a dwelling unit which 

10 uses natural gas to heat water, $21 with re11 spect to each annual Therm of natural gas sav12 ings of such solar hot water property. 

13 For purposes of paragraph (5), savings shall be deter14 mined under regulations prescribed by the Secretary based 

15 on the OG–300 Standard for the Annual Performance of 

16 OG–300 Certified Systems of the Solar Rating and Cer17 tification Corporation. 

18 ‘‘(c) ENERGY EFFICIENT PROPERTY EXPENDI19 TURES.—For purposes of this section— 

20 ‘‘(1) IN GENERAL.—The term ‘energy efficient 

21 property expenditures’ means expenditures paid by 

22 the taxpayer for qualified energy property which is— 

23 ‘‘(A) of a character subject to the allow24 ance for depreciation, and 


rwilkins on PROD1PC63 with BILLS
28 

•S 3628 IS

1 ‘‘(B) originally placed in service by the tax2 payer. 

3 ‘‘(2) QUALIFIED ENERGY PROPERTY.— 

4 ‘‘(A) IN GENERAL.—The term ‘qualified 

5 energy property’ has the meaning given such 

6 term by section 25C(d)(2), except that such 

7 term shall include solar electric property and 

8 solar hot water property. 

9 ‘‘(B) SOLAR ELECTRIC PROPERTY.—The 

10 term ‘solar electric property’ means property 

11 which uses solar energy to generate electricity. 

12 ‘‘(C) SOLAR HOT WATER PROPERTY.—The 

13 term ‘solar hot water property’ means property 

14 used to heat water if at least half of the energy 

15 used by such property for such purpose is de16 rived from the sun. 

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

18 subtitle, if a credit is allowed under this section with re19 spect to any expenditure with respect to any property, the 

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

21 for this subsection) result from such expenditure shall be 

22 reduced by the amount of the credit so allowed. 

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

24 with respect to any property placed in service after Decem25 ber 31, 2010.’’. 


rwilkins on PROD1PC63 with BILLS
29 

•S 3628 IS

1 (b) NO DOUBLE BENEFIT.—Section 179D(c) is 

2 amended by adding at the end the following new para3 graph: 

4 ‘‘(3) CERTAIN PROPERTY EXCLUDED.—The 

5 term ‘energy efficient commercial building property’ 

6 does not include any property with respect to which 

7 a credit has been allowed to the taxpayer under sec8 tion 179F.’’. 

9 (c) CONFORMING AMENDMENTS.— 

10 (1) Section 1016(a), as amended by section 

11 203, is amended by striking ‘‘and’’ at the end of 

12 paragraph (38), by striking the period at the end of 

13 paragraph (39) and inserting ‘‘, and’’, and by add14 ing at the end the following new paragraph: 

15 ‘‘(40) to the extent provided in section 

16 179E(e).’’. 

17 (2) Section 1245(a), as amended by section 203 

18 is amended by inserting ‘‘179F,’’ after ‘‘179E,’’ 

19 both places it appears in paragraphs (2)(C) and 

20 (3)(C). 

21 (3) Section 1250(b)(3), as amended by section 

22 203, is amended by inserting ‘‘or 179F’’ after ‘‘sec23 tion 179E’’. 

24 (4) Section 263(a)(1), as amended by section 

25 203, is amended by striking ‘‘or’’ at the end of subVerDate Aug 31 2005 22:26 Jul 12, 2006 Jkt 049200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S3628.IS S3628

rwilkins on PROD1PC63 with BILLS
30 

•S 3628 IS

1 paragraph (K), by striking the period at the end of 

2 subparagraph (L) and inserting ‘‘, or’’, and by in3 serting after subparagraph (L) the following new 

4 subparagraph: 

5 ‘‘(M) expenditures for which a deduction is 

6 allowed under section 179F.’’. 

7 (5) Section 312(k)(3)(B), as amended by sec8 tion 203, is amended by striking ‘‘179, 179A, 179B, 

9 179C, 179D, or 179E’’ each place it appears in the 

10 heading and text and inserting ‘‘179, 179A, 179B, 

11 179C, 179D, 179E, or 179F’’. 

12 (6) The table of sections for part VI of sub13 chapter B is amended by inserting after the item re14 lating to section 179E the following new item: 

‘‘Sec. 179F. Energy efficient property.’’. 

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

16 this section shall apply to property placed in service in 

17 taxable years beginning after the date of the enactment 

18 of this Act. 

19 SEC. 205. EXTENSION OF INVESTMENT TAX CREDIT WITH 

20 RESPECT TO SOLAR ENERGY PROPERTY AND 

21 QUALIFIED FUEL CELL PROPERTY. 

22 (a) SOLAR ENERGY PROPERTY.—Paragraphs 

23 (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) are each 

24 amended by striking ‘‘2008’’ and inserting ‘‘2012’’. 


rwilkins on PROD1PC63 with BILLS
31 

•S 3628 IS

1 (b) ELIGIBLE FUEL CELL PROPERTY.—Paragraph 

2 (1)(E) of section 48(c) is amended by striking ‘‘2007’’ and 

3 inserting ‘‘2011’’. 

4 TITLE III—INCENTIVES FOR EN5 ERGY SAVINGS CERTIFI6 CATIONS 

7 SEC. 301. CREDIT FOR ENERGY SAVINGS CERTIFICATIONS. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 is amended by adding at the end 

10 the following new section: 

11 ‘‘SEC. 45N. ENERGY SAVINGS CERTIFICATION CREDIT. 

12 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

13 energy savings certification credit determined under this 

14 section for any taxable year is an amount equal to the 

15 sum of— 

16 ‘‘(1) the qualified training and certification 

17 costs paid or incurred by the taxpayer which may be 

18 taken into account for such taxable year, plus 

19 ‘‘(2) the qualified certification equipment ex20 penditures paid or incurred by the taxpayer which 

21 may be taken into account for such taxable year. 

22 ‘‘(b) QUALIFIED TRAINING AND CERTIFICATION

23 COSTS.— 

24 ‘‘(1) IN GENERAL.—The term ‘qualified train25 ing and certification costs’ means costs paid or inVerDate Aug 31 2005 22:26 Jul 12, 2006 Jkt 049200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S3628.IS S3628

rwilkins on PROD1PC63 with BILLS
32 

•S 3628 IS

1 curred for training which is required for the tax2 payer or employees of the taxpayer to be certified by 

3 the Secretary under section 25D(d)(2)(B) or 

4 179E(d)(2)(B) for the purpose of certifying energy 

5 savings. 

6 ‘‘(2) LIMITATION.—The qualified training and 

7 certification costs taken into account under sub8 section (a)(1) for the taxable year with respect to 

9 any individual shall not exceed $500 reduced by the 

10 amount of the credit allowed under subsection (a)(1) 

11 to the taxpayer (or any predecessor) with respect to 

12 such individual for all prior taxable years. 

13 ‘‘(3) YEAR COSTS TAKEN INTO ACCOUNT.— 

14 Qualified training and certifications costs with re15 spect to any individual shall not be taken into ac16 count under subsection (a)(1) before the taxable 

17 year in which the individual with respect to whom 

18 such costs are paid or incurred has performed 25 

19 certifications under sections 25E(d)(2)(A) and 

20 179E(d)(2)(A). 

21 ‘‘(c) QUALIFIED CERTIFICATION EQUIPMENT EX22 PENDITURES.— 

23 ‘‘(1) IN GENERAL.—The term ‘qualified train24 ing equipment expenditures’ means costs paid or in25 curred for— 


rwilkins on PROD1PC63 with BILLS
33 

•S 3628 IS

1 ‘‘(A) blower doors, 

2 ‘‘(B) duct leakage testing equipment, 

3 ‘‘(C) flue gas combustion equipment, and 

4 ‘‘(D) digital manometers. 

5 ‘‘(2) LIMITATION.— 

6 ‘‘(A) IN GENERAL.—The qualified certifi7 cation equipment expenditures taken into ac8 count under subsection (a)(2) with respect to 

9 any taxpayer for any taxable year shall not ex10 ceed $1,000. 

11 ‘‘(B) LIMITATION ON INDIVIDUAL

12 ITEMS.—The qualified certification equipment 

13 expenditures taken into account under sub14 section (a)(2) shall not exceed— 

15 ‘‘(i) $500 with respect to any blower 

16 door or duct leakage testing equipment, 

17 and 

18 ‘‘(ii) $100 with respect to any flue gas 

19 combustion equipment or digital manom20 eter. 

21 ‘‘(3) YEAR EXPENDITURES TAKEN INTO AC22 COUNT.—The qualified certification equipment ex23 penditures of any taxpayer shall not be taken into 

24 account under subsection (a)(2) before the taxable 

25 year in which the taxpayer has performed 25 certifiVerDate Aug 31 2005 22:26 Jul 12, 2006 Jkt 049200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S3628.IS S3628

rwilkins on PROD1PC63 with BILLS
34 

•S 3628 IS

1 cations under sections 25E(d)(2)(A) and 

2 179E(d)(2)(A). 

3 ‘‘(d) SPECIAL RULES.— 

4 ‘‘(1) AGGREGATION RULES.—For purposes of 

5 this section, all persons treated as a single employer 

6 under subsections (a) and (b) of section 52 shall be 

7 treated as 1 person. 

8 ‘‘(2) BASIS REDUCTION.—The basis of any 

9 property shall be reduced by the portion of the cost 

10 of such property taken into account under sub11 section (a). 

12 ‘‘(3) DENIAL OF DOUBLE BENEFIT.— 

13 ‘‘(A) IN GENERAL.—No deduction shall be 

14 allowed for that portion of the expenses other15 wise allowable as a deduction for the taxable 

16 year which is equal to the amount taken into 

17 account under subsection (a) for such taxable 

18 year. 

19 ‘‘(B) AMOUNT PREVIOUSLY DEDUCTED.— 

20 No credit shall be allowed under subsection (a) 

21 with respect to any amount for which a deduc22 tion has been allowed in any preceding taxable 

23 year.’’. 

24 (b) CREDIT TREATED AS PART OF GENERAL BUSI25 NESS CREDIT.—Section 38(b) is amended by striking 


rwilkins on PROD1PC63 with BILLS
35 

•S 3628 IS

1 ‘‘and’’ at the end of paragraph (29), by striking the period 

2 at the end of paragraph (30) and inserting ‘‘plus’’, and 

3 by adding at the end the following new paragraph: 

4 ‘‘(31) the energy savings certification credit de5 termined under section 45N(a).’’. 

6 (c) CONFORMING AMENDMENTS.— 

7 (1) Section 1016(a), as amended by this Act, is 

8 amended by striking ‘‘and’’ at the end of paragraph 

9 (39), by striking the period at the end of paragraph 

10 (40) and inserting ‘‘and’’, and by adding at the end 

11 the following new paragraph: 

12 ‘‘(41) to the extent provided in section 

13 45N(d)(2).’’. 

14 (2) The table of sections for subpart D of part 

15 IV of subchapter A of chapter 1 is amended by in16 serting after the item relating to section 45M the 

17 following new item: 

‘‘Sec. 45N. Energy savings certification credit.’’. 

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

19 this section shall apply to amounts paid or incurred after 

20 the date of the enactment of this Act. 

Æ 


rwilkins on PROD1PC63 with BILLS