I
107TH CONGRESS
1ST SESSION
H. R. 2393
To amend the Internal Revenue Code of 1986 to allow individuals a credit
against income tax for energy conservation expenditures in residences
and for purchases of energy efficient appliances.
IN THE HOUSE OF REPRESENTATIVES
JUNE 28, 2001
Mr. ISRAEL (for himself and Mr. CROWLEY) 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 allow indi-
viduals a credit against income tax for energy conserva-
tion expenditures in residences and for purchases of en-
ergy efficient appliances.
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 ‘‘Energy Cost and Tax
Relief Act’’.
SEC. 2. TAX CREDIT FOR ENERGY CONSERVATION EXPEND-
ITURES IN RESIDENCES.
(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 against
tax) is amended by inserting after section 25B the fol-
lowing new section:
‘‘SEC. 25C. ENERGY CONSERVATION PROPERTY IN RESI-
DENCES.
‘‘(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 50 percent of the expenditures made by the tax-
payer for qualified energy conservation property during
such taxable year.
‘‘(b) LIMITATION.—The credit allowed under sub-
section (a) with respect to each dwelling unit for any tax-
able year shall not exceed $2,500.
‘‘(c) QUALIFIED
ENERGY
CONSERVATION
PROP-
ERTY.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified energy
conservation property’ means energy conservation
property described in paragraph (2) if—
‘‘(A) the property is certified by the Sec-
retary of Energy to equal or exceed energy con-
servation standards for such property or for the
installation of such property, and
‘‘(B) the property is installed on or in con-
nection with a dwelling unit which is located in
the United States and which is used by the tax-
payer as a residence.
‘‘(2) DESCRIPTION OF ENERGY CONSERVATION
PROPERTY.—For purposes of paragraph (1), energy
conservation property described in this paragraph is
the following:
‘‘(A) Ceiling insulation.
‘‘(B) Weatherstripping.
‘‘(C) Water heater insulation blankets.
‘‘(D) Low-flow showerheads.
‘‘(E) Caulking in ceilings.
‘‘(F) Insulation of plenums and ducts.
‘‘(G) Storm windows with a U-value of
0.45 or less.
‘‘(H) Thermal doors and windows.
‘‘(I) Duty cyclers.
‘‘(J) Clock thermostats.
‘‘(K) Evaporative coolers.
‘‘(L) Whole house fans.
‘‘(M) External shading devices.
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.
‘‘(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 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.
‘‘(4) JOINT OWNERSHIP OF ENERGY ITEMS.—
‘‘(A) IN GENERAL.—Any expenditure oth-
erwise qualifying as an expenditure for qualified
energy conservation property shall not be treat-
ed as failing to so qualify merely because such
expenditure was made with respect to 2 or more
dwelling units.
‘‘(B) LIMITS
APPLIED
SEPARATELY.—In
the case of any expenditure described in sub-
paragraph (A), the amount of the credit allow-
able under subsection (a) shall (subject to para-
graph (1)) be computed separately with respect
to the amount of the expenditure made for each
dwelling unit.
‘‘(5) ALLOCATION IN CERTAIN CASES.—If less
than 80 percent of the use of an item is for nonbusi-
ness residential purposes, only that portion of the
expenditures for such item which is properly allo-
cable to use for nonbusiness residential purposes
shall be taken into account.
‘‘(6) 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.
‘‘(7) OTHER APPLICABLE RULES.—Rules simi-
lar to the rules of paragraphs (4) and (5) of section
48(a) shall apply for purposes of this section.
‘‘(f) 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.
‘‘(g) DENIAL OF DOUBLE BENEFIT.—No deduction
or other credit shall be allowed under this chapter for any
expenditure for which credit is allowed under this section.
‘‘(h) ELECTION TO HAVE CREDIT NOT APPLY.—A
taxpayer may elect to have this section not apply for any
taxable year.
‘‘(i) APPLICATION OF SECTION.—This section shall
apply to expenditures with respect to property placed in
service after December 31, 2000.’’.
(b) CONFORMING AMENDMENT.—Subsection (a) of
section 1016 of such Code (relating to general rule for
adjustments to basis) is amended by striking ‘‘and’’ at the
end of paragraph (27), by striking the period at the end
of paragraph (28) and inserting ‘‘, and’’, and by adding
at the end the following new paragraph:
‘‘(29) in the case of a residence with respect to
which a credit was allowed under section 25C, to the
extent provided in section 25C(f).’’.
(c) CLERICAL AMENDMENT.—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 relat-
ing to section 25B the following new item:
‘‘Sec. 25C. Energy conservation property in residences.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2000.
SEC. 3. TAX CREDIT FOR PURCHASES OF ENERGY EFFI-
CIENT APPLIANCES.
(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 against
tax), as amended by section 2, is amended by inserting
after section 25C the following new section:
‘‘SEC. 25D. ENERGY EFFICIENT APPLIANCES.
‘‘(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 an amount equal to 50 percent
of the amount paid by the taxpayer for the purchase of
any qualified appliance.
‘‘(b) LIMITATION.—The credit allowed under sub-
section (a) for any taxable year shall not exceed $2,500.
‘‘(c) QUALIFIED APPLIANCE.—For purposes of this
section—
‘‘(1) IN GENERAL.—The term ‘qualified appli-
ance’ means any appliance listed in paragraph (2) if
it meets the standards in the Appliance Standards
Program of the Department of Energy (in part 430
of chapter II of title 10 of the Code of Federal Reg-
ulations).
‘‘(2) LIST OF APPLIANCES.—For purposes of
paragraph (1), the appliances listed in this para-
graph are the following:
‘‘(A) Air conditioners—central air and
heat pumps.
‘‘(B) Air conditioners—room.
‘‘(C) Clothes dryers.
‘‘(D) Clothes washers.
‘‘(E) Heating equipment—furnaces and
boilers.
‘‘(F) Kitchen ranges and ovens.
‘‘(G) Refrigerators, refrigerator-freezers,
and freezers.
‘‘(H) Showerheads and faucets.
‘‘(I) Water closets and urinals.
‘‘(J) Water heaters.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for subpart A of part IV of subchapter A of chapter 1
of such Code, as amended by section 2, is amended by
inserting after the item relating to section 25C the fol-
lowing new item:
‘‘25D. Energy efficient appliances.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2000.
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