‘‘(i) have been prescribed by the Sec-
retary by regulations (after consultation
with the Secretary of Energy or the Ad-
ministrator of the Environmental Protec-
tion Agency, as appropriate), and
‘‘(ii) are in effect at the time of the
acquisition of the property.
‘‘(2) EXCEPTION.—Such term shall not include
any property which is public utility property (as de-
fined in section 46(f)(5) as in effect on the day be-
fore the date of the enactment of the Revenue Rec-
onciliation Act of 1990). The preceding sentence
shall not apply to combined heat and power system
property.
‘‘(e) DEFINITIONS RELATING TO TYPES OF ENERGY
PROPERTY.—For purposes of this section—
‘‘(1) SOLAR ENERGY PROPERTY.—
‘‘(A) IN GENERAL.—The term ‘solar en-
ergy property’ means equipment which uses
solar energy—
‘‘(i) to generate electricity,
‘‘(ii) to heat or cool (or provide hot
water for use in) a structure, or
‘‘(iii) to provide solar process heat.
‘‘(B) ELECTED
SOLAR
WATER
HEATING
PROPERTY.—
‘‘(i) IN GENERAL.—The term ‘elected
solar water heating property’ means prop-
erty which is solar energy property by rea-
son of subparagraph (A)(ii) and for which
an election under this subparagraph is in
effect.
‘‘(ii) ELECTION.—For purposes of
clause (i) and the energy percentage speci-
fied in the table in subsection (b)(1), a tax-
payer may elect to treat property described
in clause (i) as elected solar water heating
property.
‘‘(C) 
PHOTOVOLTAIC
PROPERTY.—The
term ‘photovoltaic property’ means solar energy
property which uses a solar photovoltaic process
to generate electricity.
‘‘(D) SWIMMING
POOLS, ETC., USED
AS
STORAGE
MEDIUM.—The term ‘solar energy
property’ shall not include a swimming pool,
hot tub, or any other energy storage medium
which has a function other than the function of
such storage.
‘‘(E) SOLAR PANELS.—No solar panel or
other property installed as a roof (or portion
thereof) shall fail to be treated as solar energy
property solely because it constitutes a struc-
tural component of the structure on which it is
installed.
‘‘(2) GEOTHERMAL
ENERGY
PROPERTY.—The
term ‘geothermal energy property’ means equipment
used to produce, distribute, or use energy derived
from a geothermal deposit (within the meaning of
section 613(e)(2)), but only, in the case of electricity
generated by geothermal power, up to (but not in-
cluding) the electrical transmission stage.
‘‘(3) 20 PERCENT ENERGY-EFFICIENT BUILD-
ING PROPERTY.—The term ‘20 percent energy-effi-
cient building property’ means—
‘‘(A) a fuel cell that—
‘‘(i) generates electricity and heat
using an electrochemical process,
‘‘(ii) has an electricity-only generation
efficiency greater than 35 percent, and
‘‘(iii) has a minimum generating ca-
pacity of 5 kilowatts,
‘‘(B) an electric heat pump hot water heat-
er that yields an energy factor of 1.7 or greater,
‘‘(C) an electric heat pump that has a
heating system performance factor (HSPF) of
9 or greater and a cooling seasonal energy effi-
ciency ratio (SEER) of 15 or greater,
‘‘(D) a natural gas heat pump that has a
coefficient of performance of not less than 1.25
for heating and not less than 0.70 for cooling,
‘‘(E) a central air conditioner that has a
cooling seasonal energy efficiency ratio (SEER)
of 15 or greater, and
‘‘(F) an advanced natural gas water heater
that has an energy factor of at least 0.80.
‘‘(4) 10 PERCENT ENERGY-EFFICIENT BUILD-
ING PROPERTY.—The term ‘10 percent energy-effi-
cient building property’ means—
‘‘(A) an electric heat pump that has a
heating system performance factor (HSPF) of
7.5 or greater and a cooling seasonal energy ef-
ficiency ratio (SEER) of 13.5 or greater,
‘‘(B) a central air conditioner that has a
cooling seasonal energy efficiency ratio (SEER)
of 13.5 or greater, and
‘‘(C) an advanced natural gas water heater
that has an energy factor of at least 0.65.
‘‘(5) COMBINED
HEAT
AND
POWER
SYSTEM
PROPERTY.—
‘‘(A) IN GENERAL.—The term ‘combined
heat and power system property’ means prop-
erty comprising a system—
‘‘(i) which uses the same energy
source for the simultaneous or sequential
generation of electrical power, mechanical
shaft power, or both, in combination with
the generation of steam or other forms of
useful thermal energy (including heating
and cooling applications),
‘‘(ii) which has an electrical capacity
of more than 50 kilowatts or a mechanical
energy capacity of more than 67 horse-
power or an equivalent combination of elec-
trical and mechanical energy capacities,
‘‘(iii) which produces—
‘‘(I) at least 20 percent of its
total useful energy in the form of
thermal energy, and
‘‘(II) at least 20 percent of its
total useful energy in the form of elec-
trical or mechanical power (or a com-
bination thereof), and
‘‘(iv) the energy efficiency percentage
of which exceeds 60 percent (70 percent in
the case of a system with an electrical ca-
pacity in excess of 50 megawatts or a me-
chanical energy capacity in excess of
67,000 horsepower, or an equivalent com-
bination of electrical and mechanical en-
ergy capacities).
‘‘(B) SPECIAL RULES.—
‘‘(i) ENERGY
EFFICIENCY
PERCENT-
AGE.—For 
purposes 
of 
subparagraph
(A)(iv), the energy efficiency percentage of
a system is the fraction—
‘‘(I) the numerator of which is
the total useful electrical, thermal,
and mechanical power produced by
the system at normal operating rates,
and
‘‘(II) the denominator of which is
the lower heating value of the primary
fuel source for the system.
‘‘(ii) DETERMINATIONS MADE ON BTU
BASIS.—The energy efficiency percentage
and the percentages under subparagraph
(A)(iii) shall be determined on a Btu basis.
‘‘(iii) INPUT AND OUTPUT PROPERTY
NOT INCLUDED.—The term ‘combined heat
and power system property’ does not in-
clude property used to transport the en-
ergy source to the facility or to distribute
energy produced by the facility.
‘‘(iv) ACCOUNTING RULE FOR PUBLIC
UTILITY
PROPERTY.—In the case that
combined heat and power system property
is public utility property (as defined in sec-
tion 46(f)(5) as in effect on the day before
the date of the enactment of the Revenue
Reconciliation Act of 1990), the taxpayer
may only claim the credit under subsection
(a)(1) if, with respect to such property, the
taxpayer uses a normalization method of
accounting.
‘‘(v) DEPRECIATION.—No credit shall
be allowed for any combined heat and
power system property unless the taxpayer
elects to treat such property for purposes
of section 168 as having a class life of not
less than 22 years.
‘‘(f) QUALIFIED HYBRID VEHICLES.—For purposes
of subsection (a)(2)—
‘‘(1) CREDIT AMOUNT.—
‘‘(A) IN GENERAL.—The credit amount for
each qualified hybrid vehicle with a recharge-
able energy storage system that provides the
applicable percentage of the maximum available
power shall be the amount specified in the fol-
lowing table:
‘‘Applicable percentage
Credit amount is:
Greater than or equal to—
Less than—
5 percent .........................
10 percent
$ 500
10 percent .......................
20 percent
$1,000
20 percent .......................
30 percent
$1,500
30 percent .......................
$2,000
‘‘(B) INCREASE IN CREDIT AMOUNT FOR
REGENERATIVE BRAKING SYSTEM.—In the case
of a qualified hybrid vehicle that actively em-
ploys a regenerative braking system which sup-
plies to the rechargeable energy storage system
the applicable percentage of the energy avail-
able from braking in a typical 60 miles per
hour to 0 miles per hour braking event, the
credit amount determined under subparagraph
(A) shall be increased by the amount specified
in the following table:
‘‘Applicable percentage
Credit amount
increase is:
Greater than or equal to—
Less than—
20 percent .......................
40 percent
$ 250
40 percent .......................
60 percent
$ 500
‘‘Applicable percentage
Credit amount
increase is:
Greater than or equal to—
Less than—
60 percent .......................
$1,000
‘‘(2) QUALIFIED HYBRID VEHICLE.—The term
‘qualified hybrid vehicle means an automobile that
meets all applicable regulatory requirements and
that can draw propulsion energy from both of the
following on-board sources of stored energy:
‘‘(A) A consumable fuel.
‘‘(B) A rechargeable energy storage sys-
tem.
‘‘(3) MAXIMUM AVAILABLE POWER.—The term
‘maximum available power’ means the maximum
value of the sum of the heat engine and electric
drive system power or other non-heat energy conver-
sion devices available for a driver’s command for
maximum acceleration at vehicle speeds under 75
miles per hour.
‘‘(4) AUTOMOBILE.—The term ‘automobile’ has
the meaning given such term by section 4064(b)(1)
(without regard to subparagraphs (B) and (C) there-
of). A vehicle shall not fail to be treated as an auto-
mobile solely by reason of weight if such vehicle is
rated at 8,500 pounds gross vehicle weight rating or
less.
‘‘(5) DOUBLE BENEFIT; PROPERTY USED OUT-
SIDE UNITED STATES, ETC., NOT QUALIFIED.—No
credit shall be allowed under subsection (a)(2) with
respect to—
‘‘(A) any property for which a credit is al-
lowed under section 25B or 30,
‘‘(B) any property referred to in section
50(b), and
‘‘(C) the portion of the cost of any prop-
erty taken into account under section 179 or
179A.
‘‘(6) REGULATIONS.—
‘‘(A) TREASURY.—The Secretary shall pre-
scribe such regulations as may be necessary or
appropriate to carry out the purposes of this
subsection.
‘‘(B) ENVIRONMENTAL PROTECTION AGEN-
CY.—
‘‘(A) TREASURY.—The Administrator of
the Environmental Protection Agency shall pre-
scribe such regulations as may be necessary or
appropriate to specify the testing and calcula-
tion procedures that would be used to deter-
mine whether a vehicle meets the qualifications
for a credit under this subsection.
‘‘(7) TERMINATION.—Paragraph (2) shall not
apply with respect to any vehicle placed in service
during a calendar year ending before January 1,
2003, or after December 31, 2006.
‘‘(g) SPECIAL
RULES.—For purposes of this
section—
‘‘(1) SPECIAL RULE FOR PROPERTY FINANCED
BY SUBSIDIZED ENERGY FINANCING OR INDUSTRIAL
DEVELOPMENT BONDS.—
‘‘(A) REDUCTION OF BASIS.—For purposes
of applying the energy percentage to any prop-
erty, if such property is financed in whole or in
part by—
‘‘(i) subsidized energy financing, or
‘‘(ii) the proceeds of a private activity
bond (within the meaning of section 141)
the interest on which is exempt from tax
under section 103,
the amount taken into account as the basis of
such property shall not exceed the amount
which (but for this subparagraph) would be so
taken into account multiplied by the fraction
determined under subparagraph (B).
‘‘(B) DETERMINATION OF FRACTION.—For
purposes of subparagraph (A), the fraction de-
termined under this subparagraph is 1 reduced
by a fraction—
‘‘(i) the numerator of which is that
portion of the basis of the property which
is allocable to such financing or proceeds,
and
‘‘(ii) the denominator of which is the
basis of the property.
‘‘(C) SUBSIDIZED
ENERGY
FINANCING.—
For purposes of subparagraph (A), the term
‘subsidized energy financing’ means financing
provided under a Federal, State, or local pro-
gram a principal purpose of which is to provide
subsidized financing for projects designed to
conserve or produce energy.
‘‘(2) BUSINESS USE.—The rule similar to the
rule of section 25(B)(d)(5)(B) shall apply for pur-
poses of determining the business use of a vehicle.
‘‘(3) CERTAIN PROGRESS EXPENDITURE RULES
MADE APPLICABLE.—Rules similar to the rules of
subsections (c)(4) and (d) of section 46 (as in effect
on the day before the date of the enactment of the
Revenue Reconciliation Act of 1990) shall apply for
purposes of this section.
‘‘(4) 
DOUBLE
BENEFIT.—Property 
which
would, but for this paragraph, be eligible for credit
under more than one provision of this section shall
be eligible only under one such provision, the provi-
sion specified by the taxpayer.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 48 of such Code is amended to read
as follows:
‘‘SEC. 48. REFORESTATION CREDIT.
‘‘(a) IN GENERAL.—For purposes of section 46, the
reforestation credit for any taxable year is 10 percent of
the portion of the amortizable basis of any qualified timber
property which was acquired during such taxable year and
which is taken into account under section 194 (after the
application of section 194(b)(1)).
‘‘(b) DEFINITIONS.—For purposes of this subpart,
the terms ‘amortizable basis’ and ‘qualified timber prop-
erty’ have the respective meanings given to such terms by
section 194.’’.
(2) Subsection (d) of section 39 of such Code
is amended by adding at the end the following new
paragraph:
‘‘(9) NO CARRYBACK OF ENERGY CREDIT BE-
FORE EFFECTIVE DATE.—No portion of the unused
business credit for any taxable year which is attrib-
utable to the energy credit determined under section
48A may be carried back to a taxable year ending
before the date of the enactment of section 48A.’’.
(3) Paragraph (3) of section 50(c) of such Code
is amended by adding at the end the following flush
sentence:
‘‘In the case of the energy credit, the preceding sen-
tence shall apply only to so much of such credit as
relates to solar energy property and geothermal
property (as such terms are defined in section
48A(e)).’’.
(4) Subclause (III) of section 29(b)(3)(A)(i) of
such 
Code 
is 
amended 
by 
striking 
‘‘section
48(a)(4)(C)’’ and inserting ‘‘section 48A(g)(1)(C)’’.
(5) Subparagraph (E) of section 50(a)(2) of
such Code is amended by striking ‘‘section 48(a)(5)’’
and inserting ‘‘section 48A(g)(3)’’.
(6) Subparagraph (B) of section 168(e)(3) of
such Code is amended—
(A) in clause (vi)(I)—
(i) by striking ‘‘section 48(a)(3)’’ and
inserting ‘‘paragraphs (1) and (2) of sec-
tion 48A(e)’’, and
(ii) by striking ‘‘clause (i)’’ and in-
serting ‘‘paragraph (1)(A)’’, and
(B) in the last sentence by striking ‘‘sec-
tion 
48(a)(3)’’ 
and 
inserting 
‘‘section
48A(d)(2)’’.
(7) Subparagraph (E) of section 168(e)(3) of
such Code is amended by striking ‘‘and’’ at the end
of clause (ii), by striking the period at the end of
clause (iii) and inserting ‘‘, and’’, and by inserting
after clause (iii) the following new clause:
‘‘(iv) any combined heat and power
system property (as defined in section
48A(e)(5)) for which a credit is allowed
under section 48A and which, but for this
clause, would have a recovery period of less
than 15 years.’’.
(8) The table contained in subparagraph (B) of
section 168(g)(3) of such Code is amended by add-
ing at the end the following:
‘‘(E)(iv) ......................................................................................
22’’.
(c) CLERICAL AMENDMENT.—The table of sections
for subpart E of part IV of subchapter A of chapter 1
of such Code is amended by striking the item relating to
section 48 and inserting the following new items:
‘‘Sec. 48. Reforestation credit.
‘‘Sec. 48A. Energy credit.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to periods after December 31,
1999, 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 Rec-
onciliation Act of 1990).
SEC. 3. EXTENSION OF CREDIT FOR QUALIFIED ELECTRIC
VEHICLES.
(a) EXTENSION OF CREDIT FOR QUALIFIED ELEC-
TRIC VEHICLES.—Subsection (f) of section 30 of such
Code (relating to termination) is amended by striking
‘‘December 31, 2004’’ and inserting ‘‘December 31,
2006’’.
(b) REPEAL OF PHASEOUT.—Subsection (b) of sec-
tion 30 of such Code (relating to limitations) is amended
by striking paragraph (2) and redesignating paragraph
(3) as paragraph (2).
(c) NO DOUBLE BENEFIT.—
(1) Subsection (d) of section 30 of such Code
(relating to special rules) is amended by adding at
the end the following new paragraph:
‘‘(5) No credit shall be allowed under sub-
section (a) with respect to any vehicle if the tax-
payer claims a credit for such vehicle under section
25B(a)(1)(B) or 48A(f).’’.
(2) Paragraph (3) of section 30(d) of such Code
(relating to property used outside United States,
etc., not qualified) is amended by striking ‘‘section
50(b)’’ and inserting ‘‘section 25B, 48A, or 50(b)’’.
(3) Paragraph (5) of section 179A(e) of such
Code (relating to property used outside United
States, etc., not qualified) is amended by striking
‘‘section 50(b)’’ and inserting ‘‘section 25B, 48A, or
50(b)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
the date of the enactment of this Act.
SEC. 4. MODIFICATIONS TO CREDIT FOR ELECTRICITY
PRODUCED FROM CERTAIN RENEWABLE RE-
SOURCES.
(a) EXTENSION.—Paragraph (3) of section 45(c) of
the Internal Revenue Code of 1986 (relating to qualified
facility) is amended by striking ‘‘July 1, 1999’’ and insert-
ing ‘‘July 1, 2004’’.
(b) QUALIFIED FACILITIES INCLUDE ALL BIOMASS
FACILITIES.—
(1) IN
GENERAL.—Paragraph (1) of section
45(c) of such Code (relating to definition of qualified
energy resources) is amended by striking ‘‘and’’ at
the end of subparagraph (A), by striking the period
at the end of subparagraph (B), and by inserting
after subparagraph (B) the following:
‘‘(III) agriculture sources, includ-
ing orchard tree crops, vineyard,
grain, legumes, sugar, and other crop
by-products or residues.
‘‘(B) CLOSED-LOOP
BIOMASS.—The term
‘closed-loop biomass’ means any organic mate-
rial from a plant which is planted exclusively
for purposes of being used at a qualified facility
to produce electricity.’’.
(c) ELECTRICITY PRODUCED FROM BIOMASS CO-
FIRED IN COAL PLANTS.—
(1) CREDIT AMOUNT.—Paragraph (1) of section
45(a) of such Code (relating to general rule) is
amended by inserting ‘‘(1.0 cents in the case of elec-
tricity produced from biomass co-fired in a facility
which produces electricity from coal) after ‘‘1.5
cents’’.
(2) QUALIFIED
FACILITY.—Paragraph (3) of
section 45(c) of such Code (relating to definitions)
is amended by striking the period at the end and in-
serting the following: ‘‘, and any facility using bio-
mass other than closed loop biomass to produce elec-
tricity which is owned by the taxpayer and which is
originally placed in service after June 30, 1999.’’.
(3) ADJUSTMENT FOR INFLATION.—
(A) IN GENERAL.—Paragraph (2) of sec-
tion 45(b) of such Code (relating to credit and
phaseout adjustment based on inflation) is
amended by striking ‘‘1.5 cent amount’’ and in-
serting ‘‘1.5 and 1.0 cent amounts’’.
(B) BASE YEAR FOR INFLATION ADJUST-
MENT FACTOR.—Subparagraph (B) of section
45(d)(2) of such Code (relating to inflation ad-
justment factor) is amended by adding at the
end the following new sentence: ‘‘In the case of
the 1.0 cents amount in subsection (a), the first
sentence of this subparagraph shall be applied
by substituting ‘1999’ for ‘1992’.’’.
(d) CREDIT NOT TO APPLY TO ELECTRICITY SOLD
TO UTILITIES UNDER CERTAIN CONTRACTS.—Subsection
(b) of section 45 of such Code (relating to limitations and
adjustments) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(4) CREDIT NOT TO APPLY TO ELECTRICITY
SOLD TO UTILITIES UNDER CERTAIN CONTRACTS.—
‘‘(A) IN GENERAL.—The credit determined
under subsection (a) shall not apply to
electricity—
‘‘(i) produced at a qualified facility
placed in service by the taxpayer after
June 30, 1999, and
‘‘(ii) sold to a utility pursuant to a
contract originally entered into before Jan-
uary 1, 1987 (whether or not amended or
restated after that date).
‘‘(B) 
EXCEPTION.—Subparagraph 
(A)
shall not apply if—
‘‘(i) the prices for energy and capacity
from such facility are established pursuant
to an amendment to the contract referred
to in subparagraph (A)(ii),
‘‘(ii) such amendment provides that
the prices set forth in the contract which
exceed avoided cost prices determined at
the time of delivery shall apply only to an-
nual quantities of electricity (prorated for
partial years) which do not exceed the
greater of—
‘‘(I) the average annual quantity
of electricity sold to the utility under
the contract during calendar years
1994, 1995, 1996, 1997, and 1998,
or
‘‘(II) the estimate of the annual
electricity production set forth in the
contract, or, if there is no such esti-
mate, the greatest annual quantity of
electricity sold to the utility under the
contract in any of the calendar years
1996, 1997, or 1998, and
‘‘(iii) such amendment provides that
energy and capacity in excess of the limita-
tion in clause (ii) may be—
‘‘(I) sold to the utility only at
prices that do not exceed avoided cost
prices determined at the time of deliv-
ery, or
‘‘(II) sold to a third party subject
to a mutually agreed upon advance
notice to the utility.
For purposes of this subparagraph, avoided cost
prices shall be determined as provided for in
section 292.304(d)(1) of title 18, Code of Fed-
eral Regulations, or any successor regulation.’’.
(e) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided by para-
graph (2), the amendments made by this section
shall apply to taxable years ending after June 30,
1999.
(2) 
ADJUSTMENT
FOR
INFLATION.—The
amendments made by subsection (c)(3) shall apply
to taxable years ending after December 31, 1999.
SEC. 5. CREDIT FOR CERTAIN NONBUSINESS ENERGY
PROPERTY.
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to nonrefundable personal credits) is
amended by inserting after section 25A the following new
section:
‘‘SEC. 25B. NONBUSINESS ENERGY PROPERTY.
‘‘(a) ALLOWANCE OF CREDIT.—
‘‘(1) IN
GENERAL.—In the case of an indi-
vidual, there shall be allowed as a credit against the
tax imposed by this chapter for the taxable year an
amount equal to the sum of—
‘‘(A) the applicable percentage of residen-
tial energy property expenditures made by the
taxpayer during such year,
‘‘(B) the credit amount (determined under
section 48A(f)) for each vehicle purchased dur-
ing the taxable year which is a qualified hybrid
vehicle (as defined in section 48A(f)(2)), and
‘‘(C) the credit amount specified in the fol-
lowing table for a new, highly energy-efficient
principal residence:
‘‘New, 
Highly 
Energy-Efficient
Principal Residence:
Credit Amount:
30 percent property ........................................................................... $1,000.
40 percent property ........................................................................... $1,500.
50 percent property ........................................................................... $2,000.
‘‘(2) APPLICABLE PERCENTAGE.—
‘‘(A) IN
GENERAL.—The applicable per-
centage shall be determined in accordance with
the following table:
‘‘Column A—Description
Column B— Appli-
cable Percentage
Column C—Period
In the case of:
The applicable per-
centage is:
For the period:
Beginning on:
Ending on:
20 percent energy-efficient building property .....
20 percent
1/1/2000
12/31/2003
10 percent energy-efficient building property .....
10 percent
1/1/2000
12/31/2001
Solar water heating property ..............................
15 percent
1/1/2000
12/31/2006
Photovoltaic property ..........................................
15 percent
1/1/2000
12/31/2006.
‘‘(B) PERIODS
FOR
WHICH
PERCENTAGE
NOT SPECIFIED.—In the case of any residential
energy property, the applicable percentage shall
be zero for any period for which an applicable
percentage is not specified for such property
under subparagraph (A).
‘‘(b) MAXIMUM CREDIT.—
‘‘(1) IN GENERAL.—In the case of property de-
scribed in the following table, the amount of the
credit allowed under subsection (a)(1)(A) for the
taxable year for each item of such property with re-
spect to a dwelling unit shall not exceed the amount
specified for such property in such table:
‘‘Description of property item:
Maximum allowable
credit amount is:
20 percent energy-efficient building property (other than
a fuel cell or natural gas heat pump).
$500.
20 percent energy-efficient building property:
fuel cell described in section 48A(e)(3)(A) ..............
$ 500 per each
kw/hr of capacity.
natural gas heat pump described in section
48A(e)(3)(D).
$1,000.
10 percent energy-efficient building property ..................
$ 250.
Solar water heating property ...........................................
$1,000.
Photovoltaic property .......................................................
$2,000.
‘‘(2) COORDINATION
OF
LIMITATIONS.—If a
credit is allowed to the taxpayer for any taxable year
by reason of an acquisition of a new, highly energy-
efficient principal residence, no other credit shall be
allowed under subsection (a)(1)(A) with respect to
such residence during the 1-taxable year period be-
ginning with such taxable year.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) RESIDENTIAL ENERGY PROPERTY EX-
PENDITURES.—The term ‘residential energy prop-
erty expenditures’ means expenditures made by the
taxpayer for qualified energy property installed on or
in connection with a dwelling unit which—
‘‘(A) is located in the United States, and
‘‘(B) is used by the taxpayer as a resi-
dence.
Such term includes expenditures for labor costs
properly allocable to the onsite preparation, assem-
bly, or original installation of the property.
‘‘(2) QUALIFIED ENERGY PROPERTY.—
‘‘(A) IN
GENERAL.—The term ‘qualified
energy property’ means—
‘‘(i) energy-efficient building property,
‘‘(ii) solar water heating property, and
‘‘(iii) photovoltaic property.
‘‘(B) SWIMMING
POOL, ETC., USED
AS
STORAGE MEDIUM; SOLAR PANELS.—For pur-
poses of this paragraph, the provisions of sub-
paragraphs (D) and (E) section 48A(e)(1) shall
apply.
‘‘(3) 
ENERGY-EFFICIENT
BUILDING
PROP-
ERTY.—The term ‘energy-efficient building property’
has the meaning given to such term by paragraphs
(3) and (4) of section 48A(e).
‘‘(4) SOLAR WATER HEATING PROPERTY.—The
term ‘solar water heating property’ means property
which, when installed in connection with a structure,
uses solar energy for the purpose of providing hot
water for use within such structure.
‘‘(5) PHOTOVOLTAIC
PROPERTY.—The term
‘photovoltaic property’ has the meaning given to
such term by section 48A(e)(1)(C).
‘‘(6) NEW, HIGHLY ENERGY-EFFICIENT PRIN-
CIPAL RESIDENCE.—
‘‘(A) IN
GENERAL.—Property is a new,
highly energy-efficient principal residence if—
‘‘(i) such property is located in the
United States,
‘‘(ii) the original use of such property
commences with the taxpayer and is, at
the time of such use, the principal resi-
dence of the taxpayer, and
‘‘(iii) such property is certified before
such use commences as being 50 percent
property, 40 percent property, or 30 per-
cent property.
‘‘(B) 50, 40, OR 30 PERCENT PROPERTY.—
‘‘(i) IN
GENERAL.—For purposes of
subparagraph (A), property is 50 percent
property, 40 percent property, or 30 per-
cent property if the projected energy usage
of such property is reduced by 50 percent,
40 percent, or 30 percent, respectively,
compared to the energy usage of a ref-
erence house that complies with minimum
standard practice, such as the 1998 Inter-
national Energy Conservation Code of the
International Code Council, as determined
according to the requirements specified in
clause (ii).
‘‘(ii) PROCEDURES.—
‘‘(I) IN GENERAL.—For purposes
of clause (i), energy usage shall be
demonstrated either by a component-
based approach or a performance-
based approach.
‘‘(II) COMPONENT APPROACH.—
Compliance by the component ap-
proach is achieved when all of the
components of the house comply with
the requirements of prescriptive pack-
ages established by the Secretary of
Energy, in consultation with the Ad-
ministrator of the Environmental Pro-
tection Agency, such that they are
equivalent to the results of using the
performance-based approach of sub-
clause (III) to achieve the required re-
duction in energy usage.
‘‘(III) PERFORMANCE-BASED AP-
PROACH.—Performance-based compli-
ance shall be demonstrated in terms
of the required percentage reductions
in projected energy use. Computer
software used in support of perform-
ance-based compliance must meet all
of the procedures and methods for
calculating energy savings reductions
that are promulgated by the Secretary
of Energy. Such regulations on the
specifications for software shall be
based in the 1998 California Residen-
tial Alternative Calculation Method
Approval Manual, except that the cal-
culation procedures shall be developed
such that the same energy efficiency
measures qualify a home for tax cred-
its regardless of whether the home
uses a gas or oil furnace or boiler, or
an electric heat pump.
‘‘(IV) APPROVAL OF SOFTWARE
SUBMISSIONS.—The Secretary of En-
ergy shall approve software submis-