I
107TH CONGRESS
1ST SESSION
H. R. 2147
To amend the Internal Revenue Code of 1986 to provide tax credits for
making energy efficiency improvements to existing homes and for con-
structing new energy efficient homes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 13, 2001
Mr. WELLER (for himself, Mr. JOHNSON of Illinois, Mr. CARDIN, Mr.
ENGLISH, Mr. RAMSTAD, and Mr. KERNS) 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
tax credits for making energy efficiency improvements
to existing homes and for constructing new energy effi-
cient homes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Save America’s Valu-
able Energy Resources Act of 2001’’.
by the sum of the credits allowed under subsection
(a) to the taxpayer with respect to the dwelling for
all prior 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 subpart
A of part IV of subchapter A (other than this section),
such excess shall be carried to the succeeding taxable year
and added to the credit allowable under subsection (a) for
such 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 that is certified to meet
or exceed the prescriptive criteria for such component es-
tablished by the 1998 International Energy Conservation
Code, if—
‘‘(1) such component is installed in or on a
dwelling—
‘‘(A) located in the United States, and
‘‘(B) 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.
The certification requirement of the preceding sentence
shall apply only to the extent that the aggregate cost of
such components exceeds $2,500.
‘‘(e) CERTIFICATION.—The certification described in
subsection (d) shall be—
‘‘(1) determined on the basis of the technical
specifications or applicable ratings (including prod-
uct labeling requirements) for the measurement of
energy efficiency, based upon energy use or building
envelope component performance, for the energy effi-
cient building envelope component,
‘‘(2) provided by the contractor who installed
such building envelope component, a local building
regulatory authority, a utility, a manufactured home
production inspection primary inspection agency
(IPIA), or an accredited home energy rating system
provider who is accredited by or otherwise author-
ized to use approved energy performance measure-
ment methods by the Home Energy Ratings Systems
Council or the National Association of State Energy
Officials, and
‘‘(3) made in writing in a manner that specifies
in readily verifiable fashion the energy efficient
building envelope components installed and their re-
spective energy efficiency levels.
‘‘(f) DEFINITIONS AND 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 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.
‘‘(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 paid his proportionate share
of the cost of qualified energy efficiency im-
provements 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
a condominium project substantially all of the
units of which are used as residences.
‘‘(3) BUILDING ENVELOPE COMPONENT.—The
term ‘building envelope component’ means—
‘‘(A) insulation material or system which is
specifically and primarily designed to reduce the
heat loss or gain or a dwelling when installed
in or on such dwelling, and
‘‘(B) exterior windows (including skylights)
and doors.
‘‘(4) MANUFACTURED HOMES INCLUDED.—For
purposes of this section, the term ‘dwelling’ includes
a manufactured home which conforms to Federal
Manufactured Home Construction and Safety Stand-
ards (24 C.F.R. 3280).
‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section for any ex-
penditure 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.
‘‘(h) TERMINATION.—Subsection (a) shall apply to
qualified energy efficiency improvements installed during
the period beginning on January 1, 2001, and ending on
December 31, 2005.’’.
(b) CONFORMING AMENDMENTS.—
(1) Subsection (c) of section 23 of such Code
is amended by inserting ‘‘, section 25B, and section
1400C’’ after ‘‘other than this section’’.
(2) Subparagraph (C) of section 25(e)(1) of
such Code is amended by striking ‘‘section 23’’ and
inserting ‘‘sections 23, 25B, and 1400C’’.
(3) Subsection (d) of section 1400C of such
Code is amended by inserting ‘‘and section 25B’’
after ‘‘other than this section’’.
(4) Subsection (a) of section 1016 of such Code
is amended by striking ‘‘and’’ at the end of para-
graph (26), by striking the period at the end of
paragraph (27) and inserting ‘‘; and’’, and by add-
ing at the end the following new paragraph:
‘‘(28) to the extent provided in section 25B(f),
in the case of amounts with respect to which a credit
has been allowed under section 25B.’’.
(5) 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 relating to sec-
tion 25A the following new item:
‘‘Sec. 25B. Energy efficiency improvements to existing homes.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after De-
cember 31, 2000.
SEC. 3. BUSINESS CREDIT FOR CONSTRUCTION OF NEW EN-
ERGY EFFICIENT HOME.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business related credits) is amended by
inserting after section 45F the following new section:
‘‘SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT.
‘‘(a) IN GENERAL.—For purposes of section 38, in
the case of an eligible contractor, the credit determined
under this section for the taxable year is an amount equal
to the aggregate adjusted bases of all energy efficient
property installed in a qualified new energy efficient home
during construction of such home.
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM CREDIT.—
‘‘(A) IN GENERAL.—The credit allowed by
this section with respect to a dwelling shall not
exceed $2,000.
‘‘(B) PRIOR CREDIT AMOUNTS ON SAME
DWELLING TAKEN INTO ACCOUNT.—If a credit
manufactured home which conforms to Federal
Manufactured Home Construction and Safety Stand-
ards (24 C.F.R. 3280), the manufactured home pro-
ducer of such home.
‘‘(2) ENERGY
EFFICIENT
PROPERTY.—The
term ‘energy efficient property’ means any energy
efficient building envelope component, and any en-
ergy efficient heating or cooling appliance.
‘‘(3) QUALIFIED
NEW
ENERGY
EFFICIENT
HOME.—The term ‘qualified new energy efficient
home’ means a dwelling—
‘‘(A) located in the United States,
‘‘(B) the construction of which is substan-
tially completed after December 31, 2000,
‘‘(C) the original use of which is as a prin-
cipal residence (within the meaning of section
121) which commences with the person who ac-
quires such dwelling from the eligible con-
tractor, and
‘‘(D) which is certified to have a level of
annual heating and cooling energy consumption
that is at least 30 percent below the annual
level of heating and cooling energy consumption
of a comparable dwelling constructed in accord-
ance with the standards of the 1998 Inter-
national Energy Conservation Code.
‘‘(4) CONSTRUCTION.—The term ‘construction’
includes reconstruction and rehabilitation.
‘‘(5) ACQUIRE.—The term ‘acquire’ includes
purchase and, in the case of reconstruction and re-
habilitation, such term includes a binding written
contract for such reconstruction or rehabilitation.
‘‘(6) BUILDING ENVELOPE COMPONENT.—The
term ‘building envelope component’ means—
‘‘(A) insulation material or system which is
specifically and primarily designed to reduce the
heat loss or gain of a dwelling when installed in
or on such dwelling, and
‘‘(B) exterior windows (including skylights)
and doors.
‘‘(7) MANUFACTURED HOME INCLUDED.—The
term ‘dwelling’ includes a manufactured home con-
forming to Federal Manufactured Home Construc-
tion and Safety Standards (24 C.F.R. 3280).
‘‘(d) CERTIFICATION.—
‘‘(1) METHOD.—A certification described in
subsection (c)(3)(D) shall be determined on the
basis of one of the following methods:
‘‘(A) The technical specifications or appli-
cable ratings (including product labeling re-
quirements) for the measurement of energy effi-
ciency for the energy efficient building envelope
component or energy efficient heating or cooling
appliance, based upon energy use or building
envelope component performance.
‘‘(B) An energy performance measurement
method that utilizes computer software ap-
proved by organizations designated by the Sec-
retary.
‘‘(2) PROVIDER.—Such certification shall be
provided by—
‘‘(A) in the case of a method described in
paragraph (1)(A), the eligible contractor, a
local building regulatory authority, a utility, a
manufactured home production inspection pri-
mary inspection agency (IPIA), or an accred-
ited home energy rating systems provider who
is accredited by, or otherwise authorized to use,
approved energy performance measurement
methods by the Home Energy Ratings Systems
Council or the National Association of State
Energy Officials, or
‘‘(B) in the case of a method described in
paragraph (1)(B), an individual recognized by
an organization designated by the Secretary for
such purposes.
‘‘(3) FORM.—Such certification shall be made
in writing in a manner that specifies in readily
verifiable fashion the energy efficient building enve-
lope components and energy efficient heating or
cooling appliances installed and their respective en-
ergy efficiency levels, and in the case of a method
described in subparagraph (B) of paragraph (1), ac-
companied by written analysis documenting the
proper application of a permissible energy perform-
ance measurement method to the specific cir-
cumstances of such dwelling.
‘‘(4) REGULATIONS.—
‘‘(A) IN GENERAL.—In prescribing regula-
tions under this subsection for energy perform-
ance measurement methods, the Secretary shall
prescribe procedures for calculating annual en-
ergy costs for heating and cooling and cost sav-
ings and for the reporting of the results. Such
regulations shall—
‘‘(i) be based on the National Home
Energy Rating Technical Guidelines of the
National Association of State Energy Offi-
cials, the Home Energy Rating Guidelines
of the Home Energy Rating Systems
Council, or the modified 1998 California
Residential ACM manual,
‘‘(ii) provide that any calculation pro-
cedures be developed such that the same
energy efficiency measures allow a home to
qualify for the credit under this section re-
gardless of whether the house uses a gas
or oil furnace or boiler or an electric heat
pump, and
‘‘(iii) require that any computer soft-
ware allow for the printing of the Federal
tax forms necessary for the credit under
this section and explanations for the home-
buyer of the energy efficient features that
were used to comply with the requirements
of this section.
‘‘(B) PROVIDERS.—For purposes of para-
graph (2)(B), the Secretary shall establish re-
quirements for the designation of individuals
based on the requirements for energy consult-
ants and home energy raters specified by the
National Association of State Energy Officials.
‘‘(e) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section for any ex-
penditure 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.
‘‘(f) TERMINATION.—Subsection (a) shall apply to
dwellings purchased during the period beginning on Janu-
ary 1, 2001, and ending on December 31, 2005.’’
(b) CREDIT MADE PART OF GENERAL BUSINESS
CREDIT.—Subsection (b) of section 38 of such Code (re-
lating to current year business credit) is amended by strik-
ing ‘‘plus’’ at the end of paragraph (13), by striking the
period at the end of paragraph (14) and inserting ‘‘, plus’’,
and by adding at the end thereof the following new para-
graph:
‘‘(16) the new energy efficient home credit de-
termined under section 45G.’’.
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of
such Code (relating to certain expenses for which credits
are allowable) is amended by adding at the end thereof
the following new subsection:
‘‘(d) NEW ENERGY EFFICIENT HOME EXPENSES.—
No deduction shall be allowed for that portion of expenses
for a new energy efficient home otherwise allowable as a