I
107TH CONGRESS
1ST SESSION
H. R. 1275
To amend the Internal Revenue Code of 1986 to allow a credit against
income tax for certain energy-efficient property.
IN THE HOUSE OF REPRESENTATIVES
MARCH 28, 2001
Mrs. JOHNSON of Connecticut (for herself, Mr. MCNULTY, Mr. BOEHLERT,
Mr. LARSON of Connecticut, Ms. DUNN, Mr. NEAL of Massachusetts, Mr.
FOLEY, Mr. ALLEN, Mr. HUNTER, Ms. BALDWIN, Mr. WALDEN of Or-
egon, Mr. UDALL of Colorado, Mr. SHAYS, Mr. HINCHEY, Mr. SIMMONS,
Mr. WYNN, Mr. PETERSON
of Minnesota, Ms. DELAURO, Mr.
NETHERCUTT, Ms. RIVERS, Mr. HORN, Mr. MALONEY of Connecticut,
Mr. GILCHREST, Mr. SANDERS, Mr. SWEENEY, and Mr. INSLEE) intro-
duced the following bill; which was referred to the Committee on Ways
and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow a
credit against income tax for certain energy-efficient
property.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CREDIT FOR CERTAIN ENERGY-EFFICIENT
PROPERTY.
(a) BUSINESS PROPERTY.—
(1) IN GENERAL.—Subparagraph (A) of section
48(a)(3) of the Internal Revenue Code of 1986 (de-
fining energy property) is amended by striking ‘‘or’’
at the end of clause (i), by adding ‘‘or’’ at the end
of clause (ii), and by inserting after clause (ii) the
following new clause:
‘‘(iii) energy-efficient building prop-
erty,’’.
(2) 
ENERGY-EFFICIENT
BUILDING
PROP-
ERTY.—Subsection (a) of section 48 of such Code is
amended by redesignating paragraphs (4) and (5) as
paragraphs (5) and (6), respectively, and by insert-
ing after paragraph (3) the following new para-
graph:
‘‘(4) 
ENERGY-EFFICIENT
BUILDING
PROP-
ERTY.—For purposes of this subsection—
‘‘(A) IN GENERAL.—The term ‘energy-effi-
cient building property’ means a stationary fuel
cell power plant that—
‘‘(i) generates electricity using an
electrochemical process, and
‘‘(ii) has an electricity-only generation
efficiency greater than 30 percent.
‘‘(B) LIMITATION.—In the case of energy-
efficient building property placed in service dur-
ing the taxable year, the credit under sub-
section (a) for such year may not exceed $1,000
for each kilowatt of capacity.
‘‘(C) STATIONARY
FUEL
CELL
POWER
PLANT.—The term ‘stationary fuel cell power
plant’ means an integrated system comprised of
a fuel cell stack assembly and associated bal-
ance of plant components that converts a fuel
into electricity using electrochemical means.
‘‘(D) TERMINATION.—Such term shall not
include any property placed in service after De-
cember 31, 2006.’’
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to property placed in
service after December 31, 2001, under rules similar
to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the
date of the enactment of the Revenue Reconciliation
Act of 1990).
(b) NONBUSINESS PROPERTY.—
(1) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of such Code (relating to
nonrefundable personal credits) is amended by in-
serting after section 25A the following new section:
‘‘SEC. 25B. NONBUSINESS ENERGY-EFFICIENT BUILDING
PROPERTY.
‘‘(a) IN GENERAL.—In the case of an individual,
there shall be allowed as a credit against the tax imposed
by this chapter for the taxable year an amount equal to
the nonbusiness energy-efficient building property expend-
itures which are paid or incurred during such year.
‘‘(b) NONBUSINESS ENERGY-EFFICIENT BUILDING
PROPERTY
EXPENDITURES.—For 
purposes 
of 
this
section—
‘‘(1) IN GENERAL.—The term ‘nonbusiness en-
ergy-efficient building property expenditures’ means
expenditures made by the taxpayer for nonbusiness
energy-efficient building property installed on or in
connection with a dwelling unit—
‘‘(A) which is located in the United States,
and
‘‘(B) which is used by the taxpayer as a
residence.
Such term includes expenditures for labor costs
properly allocable to the onsite preparation, assem-
bly, or original installation of the property.
‘‘(2) NONBUSINESS ENERGY-EFFICIENT BUILD-
ING PROPERTY.—The term ‘nonbusiness energy-effi-
cient building property’ means energy-efficient build-
ing property (as defined in section 48(a)(4)) if—
‘‘(A) the original use of such property com-
mences with the taxpayer, and
‘‘(B) such property meets the standards (if
any) applicable to such property under section
48(a)(3).
‘‘(c) SPECIAL RULES.—
‘‘(1) TENANT-STOCKHOLDER IN COOPERATIVE
HOUSING CORPORATION.—In the case of an indi-
vidual who is a tenant-stockholder (as defined in sec-
tion 216) in a cooperative housing corporation (as
defined in such section), such individual shall be
treated as having made his tenant-stockholder’s pro-
portionate share (as defined in section 216(b)(3)) of
any expenditures of such corporation.
‘‘(2) CONDOMINIUMS.—
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who is a member of a condominium man-
agement association with respect to a condo-
minium which he owns, such individual shall be
treated as having made his proportionate share
of any expenditures of such association.
‘‘(B) CONDOMINIUM
MANAGEMENT
ASSO-
CIATION.—For purposes of this paragraph, the
term ‘condominium management association’
means an organization which meets the require-
ments of paragraph (1) of section 528(c) (other
than subparagraph (E) thereof) with respect to
a condominium project substantially all of the
units of which are used as residences.
‘‘(3) ALLOCATION IN CERTAIN CASES.—If less
than 80 percent of the use of an item is for nonbusi-
ness purposes, only that portion of the expenditures
for such item which is properly allocable to use for
nonbusiness purposes shall be taken into account.
‘‘(4) WHEN EXPENDITURE MADE; AMOUNT OF
EXPENDITURE.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), an expenditure with respect
to an item shall be treated as made when the
original installation of the item is completed.
‘‘(B) EXPENDITURES PART OF BUILDING
CONSTRUCTION.—In the case of an expenditure
in connection with the construction or recon-
struction of a structure, such expenditure shall
be treated as made when the original use of the
constructed or reconstructed structure by the
taxpayer begins.
‘‘(C) AMOUNT.—The amount of any ex-
penditure shall be the cost thereof.
‘‘(5) PROPERTY FINANCED BY SUBSIDIZED EN-
ERGY FINANCING.—For purposes of determining the
amount of nonbusiness energy-efficient building
property expenditures made by any individual with
respect to any dwelling unit, there shall not be taken
in to account expenditures which are made from
subsidized energy financing (as defined in section
48(a)(4)(A)).
‘‘(d) BASIS ADJUSTMENTS.—For purposes of this
subtitle, if a credit is allowed under this section for any
expenditure with respect to any property, the increase in
the basis of such property which would (but for this sub-
section) result from such expenditure shall be reduced by
the amount of the credit so allowed.
‘‘(e) TERMINATION.—This section shall not apply to
any expenditure made after December 31, 2006.’’
(2) CONFORMING AMENDMENTS.—
(A) Subsection (a) of section 1016 of such
Code is amended by striking ‘‘and’’ at the end
of paragraph (26), by striking the period at the
end of paragraph (27) and inserting ‘‘; and’’,
and by adding at the end the following new
paragraph:
‘‘(28) to the extent provided in section 25B(d),
in the case of amounts with respect to which a credit
has been allowed under section 25B.’’.
(B) The table of sections for subpart A of
part IV of subchapter A of chapter 1 of such
Code is amended by inserting after the item re-
lating to section 25A the following new item:
‘‘Sec. 25B. Nonbusiness energy-efficient building property.’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to expenditures made
after December 31, 2001.
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