108 
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) REGULATIONS.—The Secretary shall promulgate 
such regulations as necessary to take into account new 
technologies regarding energy efficiency and renewable en-
ergy for purposes of determining energy efficiency and 
savings under this section. 
‘‘(f) TERMINATION.—This section shall not apply 
with respect to any energy property placed in service after 
December 31, 2009.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subsection (a) of section 1016, as 
amended by section 601, is amended by striking 
‘‘and’’ at the end of paragraph (31), by striking 
the period at the end of paragraph (32) and in-
serting ‘‘, and’’, and by adding at the end the 
following new paragraph: 
‘‘(33) to the extent provided in section 25C(d), 
in the case of amounts with respect to which a credit 
has been allowed under section 25C.’’. 
(B) The table of sections for subpart A of 
part IV of subchapter A of chapter 1 is amend-
ed by inserting after the item relating to section 
25B the following new item: 
‘‘25C. Nonbusiness energy property.’’.
109 
(3) 
EFFECTIVE
DATES.—The 
amendments 
made by this subsection shall apply to expenditures 
made after December 31, 2005. 
(b) TEMPORARY CREDIT FOR ENERGY EFFICIENCY 
IMPROVEMENTS TO EXISTING HOMES.— 
(1) Subpart A of part IV of subchapter A of 
chapter 1 (relating to nonrefundable personal cred-
its), as amended by this Act, is amended by insert-
ing after section 25C the following new section: 
‘‘SEC. 25D. ENERGY EFFICIENCY IMPROVEMENTS TO EXIST-
ING HOMES. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to 20 percent of the amount paid or incurred by 
the taxpayer for qualified energy efficiency improvements 
installed during such taxable year. 
‘‘(b) LIMITATION.—The credit allowed by this section 
with respect to a dwelling for any taxable year shall not 
exceed $300, reduced (but not below zero) by the sum of— 
‘‘(1) the credits allowed under subsection (a) to 
the taxpayer with respect to the dwelling for all pre-
ceding taxable years, and
110 
‘‘(2) the credits allowed under section 25C to 
the taxpayer with respect to the dwelling for such 
taxable year and all preceding taxable years. 
‘‘(c) CARRYFORWARD OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) exceeds the limita-
tion imposed by section 26(a) for such taxable year re-
duced by the sum of the credits allowable under this sub-
part (other than this section) for such taxable year, such 
excess shall be carried to the succeeding taxable year and 
added to the credit allowable under subsection (a) for such 
succeeding taxable year. 
‘‘(d) QUALIFIED ENERGY EFFICIENCY IMPROVE-
MENTS.—For purposes of this section, the term ‘qualified 
energy efficiency improvements’ means any energy effi-
cient building envelope component which is certified to 
meet or exceed the latest prescriptive criteria for such 
component in the 2003 International Energy Conservation 
Code (with supplements) as in effect on the date of the 
enactment of this subsection, if— 
‘‘(1) such component is installed in or on a 
dwelling which— 
‘‘(A) is located in the United States, 
‘‘(B) has not been treated as a qualified 
new energy efficient home for purposes of any 
credit allowed under section 45J, and
111 
‘‘(C) is owned and used by the taxpayer as 
the taxpayer’s principal residence (within the 
meaning of section 121), 
‘‘(2) the original use of such component com-
mences with the taxpayer, and 
‘‘(3) such component reasonably can be ex-
pected to remain in use for at least 5 years. 
‘‘(e) CERTIFICATION.— 
‘‘(1) METHOD OF CERTIFICATION.—The certifi-
cation described in subsection (d) for any component 
described in such subsection shall be determined on 
the basis of applicable energy efficiency ratings (in-
cluding product labeling requirements) for affected 
building envelope components. 
‘‘(2) PROVIDER.—A certification described in 
subsection (d) shall be provided by a third party, 
such as a local building regulatory authority, a util-
ity, a manufactured home primary inspection agen-
cy, or a home energy rating organization. 
‘‘(3) FORM.—A certification described in sub-
section (d) shall be made in writing on forms which 
specify in readily inspectable fashion the energy effi-
cient components and their respective efficiency rat-
ings, and which include a permanent label affixed to 
the electrical distribution panel of the dwelling.
112 
‘‘(f) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OC-
CUPANCY.—In the case of any dwelling unit which is 
jointly occupied and used during any calendar year 
as a residence by 2 or more individuals the following 
rules shall apply: 
‘‘(A) The amount of the credit allowable 
under subsection (a) by reason of expenditures 
for the qualified energy efficiency improvements 
made during such calendar year by any of such 
individuals with respect to such dwelling unit 
shall be determined by treating all of such indi-
viduals as 1 taxpayer whose taxable year is 
such calendar year. 
‘‘(B) There shall be allowable, with respect 
to such expenditures to each of such individ-
uals, a credit under subsection (a) for the tax-
able year in which such calendar year ends in 
an amount which bears the same ratio to the 
amount determined under subparagraph (A) as 
the amount of such expenditures made by such 
individual during such calendar year bears to 
the aggregate of such expenditures made by all 
of such individuals during such calendar year.
113 
‘‘(2) 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 paid his tenant-stockholder’s pro-
portionate share (as defined in section 216(b)(3)) of 
the cost of qualified energy efficiency improvements 
made by such corporation. 
‘‘(3) 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 the individual owns, such indi-
vidual shall be treated as having paid the indi-
vidual’s proportionate share of the cost of quali-
fied energy efficiency improvements made by 
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