I
106TH CONGRESS
2D SESSION
H. R. 4043
To permit the drawdown of the Strategic Petroleum Reserve when oil and
gas prices in the United States rise sharply because of anticompetitive
activity, to provide credits against income tax for certain energy efficiency
improvements, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 21, 2000
Mr. BALDACCI (for himself, Mr. ABERCROMBIE, Mr. ALLEN, Mr. BORSKI, Mr.
BRADY of Pennsylvania, Mr. CAPUANO, Mr. CROWLEY, Mr. DEFAZIO,
Ms. DELAURO, Mr. DELAHUNT, Mr. DOYLE, Mr. FATTAH, Mr. FORBES,
Mr. GEJDENSON, Mr. HINCHEY, Mr. HOLDEN, Ms. KAPTUR, Mrs.
LOWEY, Mr. MASCARA, Mr. MCGOVERN, Mr. MORAN of Virginia, Mr.
MURTHA, Mr. PASCRELL, and Mr. SANDERS) introduced the following
bill; which was referred to the Committee on Ways and Means, and in
addition to the Committee on Commerce, for a period to be subsequently
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned
A BILL
To permit the drawdown of the Strategic Petroleum Reserve
when oil and gas prices in the United States rise sharply
because of anticompetitive activity, to provide credits
against income tax for certain energy efficiency improve-
ments, 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 ‘‘Fuel Energy Afford-
ability and Conservation Act’’.
TITLE I—DRAWDOWN OF STRA-
TEGIC PETROLEUM RESERVE
SEC. 101. FINDINGS.
Congress finds that—
(1) a sharp, sustained increase in the price of
crude oil would negatively affect the overall economic
well-being of the United States;
(2) the United States currently imports roughly
55 percent of its oil;
(3) the oil market is often greatly influenced by
nonmarket-based supply manipulations, including
price fixing and production quotas; and
(4) heating oil price increases disproportionately
harm the poor and the elderly.
SEC. 102. DRAWDOWN OF STRATEGIC PETROLEUM RE-
SERVE.
Section 161(d) of the Energy Policy and Conserva-
tion Act (42 U.S.C. 6241(d)) is amended by adding at
the end the following:
‘‘(3) REDUCTION IN SUPPLY CAUSED BY ANTI-
COMPETITIVE CONDUCT.—
‘‘(A) IN GENERAL.—For the purposes of
this section, in addition to the circumstances
set forth in section 3(8) and in paragraph (2)
of this subsection, a severe energy supply inter-
ruption shall be deemed to exist if the President
determines that—
‘‘(i) there is a significant reduction in
supply that—
‘‘(I) is of significant scope and
duration; and
‘‘(II) has caused a significant in-
crease in the price of petroleum prod-
ucts;
‘‘(ii) the increase in price is likely to
cause a significant adverse impact on re-
gional economies; and
‘‘(iii) a substantial cause of the reduc-
tion in supply is either—
‘‘(I) the anticompetitive conduct
of 1 or more foreign countries or
international entities; or
‘‘(II) a reduction in refinery utili-
zation, as reported by the Energy In-
formation Administration.
‘‘(B) DEPOSIT AND USE OF PROCEEDS.—
Proceeds from the sale of petroleum drawn
down pursuant to a Presidential determination
under subparagraph (A) shall—
‘‘(i) be deposited in the SPR Petro-
leum Account; and
‘‘(ii) be used only for the purposes
specified in section 167.
‘‘(C) REPLACEMENT
ARRANGEMENTS.—
When the Secretary executes a drawdown pur-
suant to a Presidential determination under
subparagraph (A), the Secretary may enter into
an arrangement that provides for the replace-
ment of the petroleum products withdrawn from
the Strategic Petroleum Reserve.’’.
SEC. 103. REPORTING AND CONSULTATION REQUIRE-
MENTS.
If the price of a barrel of crude oil exceeds $25 (in
constant 1999 United States dollars) for a period greater
than 14 days, the President, through the Secretary of En-
ergy, shall, not later than 30 days after the end of the
14-day period, submit to the Committee on Energy and
Natural Resources of the Senate and the Committee on
Commerce of the House of Representatives a report
that—
(1) states the results of a comprehensive review
of the causes and potential consequences of the price
increase;
(2) provides an estimate of the likely duration
of the price increase, based on analyses and fore-
casts of the Energy Information Administration;
(3) provides an analysis of the effects of the
price increase on the cost of home heating oil; and
(4) states whether, and provides a specific ra-
tionale for why, the President does or does not sup-
port the drawdown and distribution of a specified
amount of oil from the Strategic Petroleum Reserve.
TITLE II—CREDITS FOR ENERGY
EFFICIENCY IMPROVEMENTS
BY HOMEOWNERS AND SMALL
BUSINESSES
SEC. 201. CREDIT FOR ENERGY EFFICIENCY IMPROVE-
MENTS TO EXISTING HOMES.
(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. ENERGY EFFICIENCY IMPROVEMENTS TO EXIST-
ING HOMES.
‘‘(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 20 percent of the amount paid or incurred by
the taxpayer for qualified energy efficiency improvements
installed during such taxable year.
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM CREDIT.—The credit allowed by
this section with respect to a dwelling shall not ex-
ceed $2,000.
‘‘(2) PRIOR CREDIT AMOUNTS FOR TAXPAYER
ON SAME DWELLING TAKEN INTO ACCOUNT.—If a
credit was allowed to the taxpayer under subsection
(a) with respect to a dwelling in 1 or more prior tax-
able years, the amount of the credit otherwise allow-
able for the taxable year with respect to that dwell-
ing shall not exceed the amount of $2,000 reduced
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, and any energy effi-
cient heating, cooling, or water heating appliance, the in-
stallation of which, by itself or in combination with other
such components or appliances, is certified to improve the
annual energy performance of the existing home by at
least 30 percent, if—
‘‘(1) such component or appliance 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 or ap-
pliance commences with the taxpayer, and
‘‘(3) such component or appliance reasonably
can be expected to remain in use for at least 5
years.
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.
‘‘(f) 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.
‘‘(g) APPLICATION
OF SECTION.—Subsection (a)
shall apply to qualified energy efficiency improvements in-
stalled during the period beginning on January 1, 2000,
and ending on December 31, 2004.’’.
(b) CONFORMING AMENDMENTS.—
(1) Subsection (c) of section 23 of such Code
is amended by striking ‘‘and section 1400C’’ and in-
serting ‘‘and sections 25B and 1400C’’.
(2) Subparagraph (C) of section 25(e)(1) of
such Code is amended by striking ‘‘and 1400C’’ and
inserting ‘‘, 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
December 31, 1999.
SEC. 202. CREDIT FOR ENERGY EFFICIENCY IMPROVE-
MENTS BY SMALL BUSINESSES.
(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 45C the following new section:
‘‘SEC. 45D. ENERGY EFFICIENCY IMPROVEMENTS BY SMALL
BUSINESSES.
‘‘(a) IN GENERAL.—For purposes of section 38, in
the case of an eligible small business, the energy efficiency
improvement credit determined under this section for the
taxable year is an amount equal to 20 percent of the basis
of each qualified energy efficiency improvements placed in
service during such taxable year.
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM CREDIT.—The credit allowed by
this section for the taxable year shall not exceed
$2,000.
‘‘(2) COORDINATION
WITH
REHABILITATION
AND
ENERGY
CREDITS.—For purposes of this
section—
‘‘(A) the basis of any property referred to
in subsection (a) shall be reduced by that por-
tion of the basis of any property which is attrib-
utable to qualified rehabilitation expenditures
(as defined in section 47(c)(2)) or to the energy
percentage of energy property (as determined
under section 48(a)), and
‘‘(B) expenditures taken into account
under either section 47 or 48(a) shall not be
taken into account under this section.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) ELIGIBLE
SMALL
BUSINESS.—The term
‘eligible small business’ means any person engaged
in a trade or business if the average annual gross
receipts of such person (or any predecessor) for the
3-taxable-year period ending with such prior taxable
year does not exceed $10,000,000. Rules similar to
the rules of paragraphs (2) and (3) of section 448(c)
shall apply for purposes of the preceding sentence.
‘‘(2) QUALIFIED
ENERGY
EFFICIENCY
IM-
PROVEMENTS.—The term ‘qualified energy efficiency
improvements’ means any energy efficient property
the installation of which, by itself or in combination
with other such property, is certified to improve the
annual energy performance of the structure to which
it relates by at least 30 percent, if—
‘‘(A) such property is installed in or on a
structure located in the United States,
‘‘(B)(i) the construction, reconstruction, or
erection of such property is completed by the
taxpayer, or
‘‘(ii) such property which is acquired by
the taxpayer if the original use of such property
commences with the taxpayer,
‘‘(C) depreciation (or amortization in lieu
of depreciation) is allowable with respect to
such property, and
‘‘(D) such property reasonably can be ex-
pected to remain in use for at least 5 years.
Such certification shall be made by the contractor
who installed such property, a local building regu-
latory authority, or a qualified energy consultant
(such as a utility or an accredited energy rating sys-
tem provider).
‘‘(3) ENERGY
EFFICIENT
PROPERTY.—The
term ‘energy efficient property’ means—
‘‘(A) any energy efficient building envelope
component, and
‘‘(B) any energy efficient heating, cooling,
or water heating appliance.
‘‘(d) APPLICATION
OF SECTION.—Subsection (a)
shall apply to property placed in service during the period
beginning on January 1, 2000, and ending on December
31, 2004.’’.
(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 (11), by striking the
period at the end of paragraph (12) and inserting ‘‘, plus’’,
and by adding at the end thereof the following new para-
graph:
‘‘(13) in the case of an eligible small business
(as defined in section 45D(c)), the energy efficiency
improvement credit determined under section 45D.’’.
(c) CREDIT ALLOWED AGAINST REGULAR AND MIN-
IMUM TAX.—
(1) IN GENERAL.—Subsection (c) of section 38
of such Code (relating to limitation based on amount
of tax) is amended by redesignating paragraph (3)
as paragraph (4) and by inserting after paragraph
(2) the following new paragraph:
‘‘(3) SPECIAL RULES FOR SMALL BUSINESS EN-
ERGY EFFICIENCY IMPROVEMENT CREDIT.—
‘‘(A) IN GENERAL.—In the case of the en-
ergy efficiency improvement credit—
‘‘(i) this section and section 39 shall
be applied separately with respect to the
credit, and
‘‘(ii) in applying paragraph (1) to the
credit—
‘‘(I) subparagraph (A) thereof
shall not apply, and
‘‘(II) the limitation under para-
graph (1) (as modified by subclause
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the
taxable year (other than the energy
efficiency improvement credit).
‘‘(B) ENERGY EFFICIENCY IMPROVEMENT
CREDIT.—For purposes of this subsection, the
term ‘energy efficiency improvement credit’
means the credit allowable under subsection (a)
by reason of section 45D.’’.
(2) CONFORMING AMENDMENT.—Subclause (II)
of section 38(c)(2)(A)(ii) of such Code is amended
by inserting ‘‘or the energy efficiency improvement
credit’’ after ‘‘employment credit’’.
(d) LIMITATION ON CARRYBACK.—Subsection (d) of
section 39 of such Code is amended by adding at the end
the following new paragraph:
‘‘(9) NO CARRYBACK OF ENERGY EFFICIENCY
IMPROVEMENT CREDIT BEFORE EFFECTIVE DATE.—
No portion of the unused business credit for any
taxable year which is attributable to the credit deter-
mined under section 45D may be carried back to
any taxable year ending before the date of the enact-
ment of section 45D.’’.
(e) DEDUCTION FOR CERTAIN UNUSED BUSINESS
CREDITS.—Subsection (c) of section 196 of such Code is
amended by striking ‘‘and’’ at the end of paragraph (7),
by striking the period at the end of paragraph (8) and
inserting ‘‘, and’’, and by adding after paragraph (8) the
following new paragraph:
‘‘(9) the energy efficiency improvement credit
determined under section 45D.’’.
(f) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by inserting after the item relat-
ing to section 45C the following new item:
‘‘Sec. 45D. Energy efficiency improvements by small businesses.’’.
(g) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
the date of the enactment of this Act.
Æ