I 
108TH CONGRESS 
2D SESSION 
H. R. 5302 
To promote the purchase of renewable energy systems, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 8, 2004 
Mr. BASS (for himself, Mr. UPTON, and Mr. BRADLEY of New Hampshire) 
introduced the following bill; which was referred to the Committee on En-
ergy and Commerce, and in addition to the Committee on Ways and 
Means, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To promote the purchase of renewable energy systems, and 
for other purposes. 
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 ‘‘Renewable Energy Se-
curity Act of 2004’’. 
SEC. 2. WEATHERIZATION ASSISTANCE. 
Section 415(c) of the Energy Conservation and Pro-
duction Act (42 U.S.C. 6865(c)) is amended—
‘‘(B) The Secretary shall make a final determination 
with respect to any request filed under subparagraph 
(A)(ii) within 1 year after the filing of the request, to-
gether with any information required to be filed with such 
request under subparagraph (A)(ii). 
‘‘(C) Each month the Secretary shall publish a report 
of any request under subparagraph (A)(ii) which has been 
denied during the preceding month and the reasons for 
the denial. 
‘‘(D) The Secretary shall not specify any form of re-
newable energy under paragraph (6)(A)(i)(I) unless the 
Secretary determines that— 
‘‘(i) there will be a reduction in oil or natural 
gas consumption as a result of such specification; 
‘‘(ii) such specification will not result in an in-
creased use of any item which is known to be, or 
reasonably suspected to be, environmentally haz-
ardous or a threat to public health or safety; and 
‘‘(iii) available Federal subsidies do not make 
such specification unnecessary or inappropriate (in 
the light of the most advantageous allocation of eco-
nomic resources). 
‘‘(6) In this subsection— 
‘‘(A) the term ‘renewable energy system’ means 
a system which—
‘‘(i) when installed in connection with a 
dwelling, transmits or uses— 
‘‘(I) solar energy, energy derived from 
the geothermal deposits, energy derived 
from biomass, or any other form of renew-
able energy which the Secretary specifies 
by regulations, for the purpose of heating 
or cooling such dwelling or providing hot 
water or electricity for use within such 
dwelling; or 
‘‘(II) wind energy for nonbusiness res-
idential purposes; 
‘‘(ii) meets the performance and quality 
standards (if any) which have been prescribed 
by the Secretary by regulations; 
‘‘(iii) in the case of a combustion rated 
system, has a thermal efficiency rating of at 
least 75 percent; and 
‘‘(iv) in the case of a solar system, has a 
thermal efficiency rating of at least 15 percent; 
and 
‘‘(B) the term ‘biomass’ means any organic 
matter that is available on a renewable or recurring 
basis, including agricultural crops and trees, wood 
and wood wastes and residues, plants (including
aquatic plants), grasses, residues, fibers, and animal 
wastes, municipal wastes, and other waste mate-
rials.’’. 
SEC. 3. DISTRICT HEATING AND COOLING PROGRAMS. 
Section 172 of the Energy Policy Act of 1992 (42 
U.S.C. 13451 note) is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘and’’ at the end of para-
graph (3); 
(B) by striking the period at the end of 
paragraph (4) and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(5) evaluate the use of renewable energy sys-
tems (as such term is defined in section 415(c) of 
the Energy Conservation and Production Act (42 
U.S.C. 6865(c))) in residential buildings.’’; and 
(2) in subsection (b), by striking ‘‘this Act’’ and 
inserting ‘‘the Renewable Energy Security Act of 
2004’’. 
SEC. 4. DEFINITION OF BIOMASS. 
Section 203(2) of the Biomass Energy and Alcohol 
Fuels Act of 1980 (42 U.S.C. 8802(2)) is amended to read 
as follows:
‘‘(2) The term ‘biomass’ means any organic 
matter that is available on a renewable or recurring 
basis, including agricultural crops and trees, wood 
and wood wastes and residues, plants (including 
aquatic plants), grasses, residues, fibers, and animal 
wastes, municipal wastes, and other waste mate-
rials.’’. 
SEC. 5. CREDIT FOR RESIDENTIAL RENEWABLE ENERGY 
SYSTEMS. 
(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 the item relating to section 
25B the following new section: 
‘‘SEC. 25C. RESIDENTIAL RENEWABLE ENERGY SYSTEM. 
‘‘(a) GENERAL RULE.—In the case of an individual, 
there shall be allowed as a credit against the tax imposed 
by this subtitle for the taxable year an amount equal to 
20 percent of the qualified renewable energy system ex-
penditures made by the taxpayer during the taxable year. 
‘‘(b) LIMITATIONS.—For purposes of subsection 
(a)— 
‘‘(1) MAXIMUM CREDIT.—The amount of the 
credit allowed under subsection (a) for a taxable 
year shall not exceed $3,000.
‘‘(2) PRIOR EXPENDITURES BY TAXPAYER ON 
SAME
RESIDENCE
TAKEN
INTO
ACCOUNT.—If for 
any prior year a credit was allowed to the taxpayer 
under this section with respect to any dwelling unit 
by reason of qualified renewable energy system ex-
penditures, paragraph (1) shall be applied for the 
taxable year with respect to such dwelling unit by 
reducing the dollar amount contained therein by the 
prior year expenditures taken into account under 
such paragraph. 
‘‘(3) MINIMUM
DOLLAR
AMOUNT.—No credit 
shall be allowed under this section with respect to 
any return for any taxable year if the amount which 
would (but for this paragraph) be allowed with re-
spect to such return is less than $10. 
‘‘(4) LIMITATION
BASED
ON
AMOUNT
OF 
TAX.—The credit allowed under subsection (a) for 
any taxable year shall not exceed the excess of— 
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under this subpart (other than this section and 
section 23) and section 27 for the taxable year.
‘‘(5) CARRYOVER OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) for any taxable 
year exceeds the limitation imposed by paragraph 
(4) for such taxable year, such excess shall be car-
ried to the succeeding taxable year and added to the 
credit allowable under subsection (a) for such tax-
able year. No credit may be carried forward under 
this subsection to any taxable year following the 
fifth taxable year after the taxable year in which the 
credit arose. For purposes of the preceding sentence, 
credits shall be treated as used on a first-in first-out 
basis. 
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) QUALIFIED RENEWABLE ENERGY SYSTEM 
EXPENDITURE.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
renewable energy system expenditure’ means an 
expenditure made by the taxpayer for renewable 
energy system property installed in connection 
with a dwelling unit— 
‘‘(i) which is located in the United 
States, and 
‘‘(ii) which is used by the taxpayer as 
his principal residence.
‘‘(B) CERTAIN LABOR AND OTHER COSTS 
INCLUDED.—The term ‘qualified renewable en-
ergy system expenditure’ includes— 
‘‘(i) expenditures for labor costs prop-
erly allocable to the onsite preparation, as-
sembly, or original installation of renew-
able energy system property, and 
‘‘(ii) expenditures for an onsite well 
drilled for any geothermal deposit (as de-
fined in section 613(e)(3)), but only if the 
taxpayer has not elected under section 
263(c) to deduct any portion of such ex-
penditures. 
‘‘(C) SWIMMING
POOL, ETC., USED
AS 
STORAGE MEDIUM.—The term ‘qualified renew-
able energy system expenditure’ does not in-
clude any expenditure properly allocable to a 
swimming pool used as an energy storage me-
dium or to any other energy storage medium 
which has a primary function other than the 
function of such storage. 
‘‘(D) CERTAIN SOLAR PANELS.—No solar 
panel installed as a roof (or portion thereof) 
shall fail to be treated as renewable energy sys-
tem property solely because it constitutes a
structural component of the dwelling on which 
it is installed. 
‘‘(2) RENEWABLE
ENERGY
SYSTEM
PROP-
ERTY.—The term ‘renewable energy system prop-
erty’ means property— 
‘‘(A) which constitutes a renewable energy 
system, as defined by section 415(c)(6) of the 
Energy Conservation and Production Act (42 
U.S.C. 6865(c)(6)), 
‘‘(B) the original use of which begins with 
the taxpayer, and 
‘‘(C) which can reasonably be expected to 
remain in operation for at least 5 years. 
‘‘(3) EFFECTIVE DATE.— 
‘‘(A) IN GENERAL.—In the case of any en-
ergy system specified under paragraph (2)(A), 
the credit allowed by subsection (a) shall apply 
with respect to expenditures which are made on 
or after the date on which final notice of such 
specification is published in the Federal Reg-
ister. 
‘‘(B) EXPENDITURES
TAKEN
INTO
AC-
COUNT IN FOLLOWING TAXABLE YEARS.—The 
Secretary may prescribe by regulations that ex-
penditures made on or after the date referred
to in clause (i) and before the close of the tax-
able year in which such date occurs shall be 
taken into account in the following taxable year. 
‘‘(4) WHEN EXPENDITURES MADE; AMOUNT OF 
EXPENDITURES.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), an expenditure with respect 
to an item shall be treated as made when origi-
nal installation of the item is completed. 
‘‘(B) CONSTRUCTION OR RECONSTRUCTION 
OF DWELLING.—In the case of qualified renew-
able energy system expenditures in connection 
with the construction or reconstruction of a 
dwelling, such expenditures shall be treated as 
made when the original use of the constructed 
or reconstructed dwelling by the taxpayer be-
gins. 
‘‘(C) AMOUNT.—The amount of any ex-
penditure shall be the cost thereof. 
‘‘(D) ALLOCATION IN CERTAIN CASES.—If 
less than 80 percent of the use of an item is for 
nonbusiness residential purposes, only that por-
tion of the expenditures for such item which is 
properly allocable to use for nonbusiness resi-
dential purposes shall be taken into account.
For purposes of this subparagraph, use for a 
swimming pool shall be treated as use which is 
not for residential purposes. 
‘‘(5) PRINCIPAL RESIDENCE.—The determina-
tion of whether or not a dwelling unit is a taxpayer’s 
principal residence shall be made under principles 
similar to those applicable to section 121, except 
that— 
‘‘(A) no ownership requirement shall be 
imposed, and 
‘‘(B) the period for which a dwelling is 
treated as the principal residence of the tax-
payer shall include the 30-day period ending on 
the first day on which it would (but for this 
subparagraph) be treated as his principal resi-
dence. 
‘‘(6) PROPERTY FINANCED BY SUBSIDIZED EN-
ERGY FINANCING.— 
‘‘(A) REDUCTION OF QUALIFIED EXPENDI-
TURES.—For purposes of determining the 
amount of qualified renewable energy system 
expenditures made by any individual with re-
spect to any dwelling unit, there shall not be 
taken into account expenditures which are made 
from subsidized energy financing.
‘‘(B) DOLLAR
LIMITS
REDUCED.—Para-
graph (1) of subsection (b) shall be applied with 
respect to such dwelling unit for any taxable 
year of such taxpayer by reducing each dollar 
amount contained in such paragraph (reduced 
as provided in subsection (b)(3)) by an amount 
equal to the sum of— 
‘‘(i) the amount of the expenditures 
which were made by the taxpayer during 
such taxable year or any prior taxable year 
with respect to such dwelling unit and 
which were not taken into account by rea-
son of subparagraph (A), and 
‘‘(ii) the amount of any Federal, 
State, or local grant received by the tax-
payer during such taxable year or any 
prior taxable year which was used to make 
qualified renewable energy system expendi-
tures with respect to the dwelling unit and 
which was not included in the gross income 
of such taxpayer. 
‘‘(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. 
‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(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 principal residence by 2 or more individuals— 
‘‘(A) the amount of the credit allowable 
under subsection (a) by reason of qualified re-
newable energy system expenditures (as the 
case may be) made during such calendar year 
by any of such individuals with respect to such 
dwelling unit shall be determined by treating all 
of such individuals as one taxpayer whose tax-
able year is such calendar year, and 
‘‘(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. 
‘‘(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 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.