‘‘(B) owned and used by the taxpayer as
the taxpayer’s principal residence at the time
the property is placed in service or installed,
‘‘(3) the original use of which commences with
the taxpayer, and
‘‘(4) which has a useful life of at least 5 years.
‘‘(c) OTHER DEFINITIONS.—For purposes of this
section—
‘‘(1) BUILDING ENVELOPE COMPONENT.—The
term ‘building envelope component’ shall have the
same meaning as set forth in section 434.201 of title
10 of the Code of Federal Regulations.
‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin-
cipal residence’ shall have the same meaning as
when used in section 121.
‘‘(3) ENERGY
STAR
QUALIFIED.—The term
‘Energy Star qualified’ means property which—
‘‘(A) meets the guidelines, specifications,
and performance levels of the Energy Star pro-
gram jointly managed by the Environmental
Protection Agency and the Department of En-
ergy, including guidelines, specifications, and
performance levels for the climate region in
which a residence is located, and
‘‘(B) displays the Energy Star label at the
time the property is placed in service or in-
stalled.
‘‘(d) LIMITATION BASED ON AMOUNT OF TAX.—
‘‘(1) IN GENERAL.—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 part (other than under this section
and subpart C thereof, relating to refundable
credits) and section 1397E.
‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the
credit allowable under subsection (a) exceeds the
limitation imposed by paragraph (1) 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 taxable year.
‘‘(e) SPECIAL RULES.—For purposes of this section:
‘‘(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(b)(2)) in a cooperative housing corporation
(as defined in section 216(b)(1)), such individual
shall be treated as having paid his tenant-stock-
holder’s proportionate share (as defined in section
216(b)(3)) of any expenditures paid or incurred for
qualified energy property by such corporation, and
such credit shall be allocated appropriately to such
individual.
‘‘(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 expenditures paid or incurred for qualified
energy property by such association, and such
credit shall be allocated appropriately to such
individual.
‘‘(B) CONDOMINIUM
MANAGEMENT
ASSO-
CIATION.—For purposes of this paragraph, the
term ‘condominium management association’
means an organization which meets the require-
ments of section 528(c)(2) with respect to a
condominium project of which substantially all
of the units are used by individuals as resi-
dences.
‘‘(3) EXPENDITURES FOR LABOR INCLUDED.—
For purposes of this section, the amount paid or in-
curred by the taxpayer for qualified energy property
shall also include expenditures for labor costs prop-
erly allocable to the onsite preparation, assembly,
and installation of such property.
‘‘(4) ALLOCATION
TO
NONBUSINESS
USE
IN
CERTAIN CASES.—In the case of an individual, if
less than 80 percent of the use of qualified energy
property placed in service or installed is for nonbusi-
ness purposes, only that portion of the expenditure
paid or incurred for such property which is properly
allocable to use for nonbusiness purposes shall be el-
igible for the credit provided by this section.
‘‘(f) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section for any ex-
penditure with respect to a residence or other property,
the basis of such residence or other property shall be re-
duced by the amount of the credit so allowed.
‘‘(g) APPLICABILITY.—Subsection (a) shall apply to
qualified energy property placed in service or installed on
or after January 1, 2001.’’.
(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 (26), by striking the period at the end
of paragraph (27) and inserting ‘‘, and’’, and by adding
at the end the following new paragraph:
‘‘(28) in the case of a residence or other prop-
erty with respect to which a credit was allowed
under section 30B, to the extent provided in section
30B(f).’’.
(c) CLERICAL AMENDMENT.—The table of sections
for subpart B of part IV of subchapter A of chapter 1
of such Code is amended by inserting after the item relat-
ing to section 30A the following new item:
‘‘Sec. 30B. Certain energy efficient property in residences and
businesses.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after De-
cember 31, 2001.
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