I 
109TH CONGRESS 
1ST SESSION 
H. R. 424 
To amend the Internal Revenue Code of 1986 to allow a credit against 
income tax for certain energy efficient property placed in service or 
installed in an existing principal residence or property used by businesses. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 26, 2005 
Mr. TERRY (for himself, Mr. ENGEL, and Mr. GRAVES) 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 a 
credit against income tax for certain energy efficient 
property placed in service or installed in an existing 
principal residence or property used by businesses. 
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 Efficiency In-
vestment Act of 2005’’.
SEC. 2. CREDIT FOR CERTAIN ENERGY EFFICIENT PROP-
ERTY IN RESIDENCES AND BUSINESSES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 30A the fol-
lowing new section: 
‘‘SEC. 30B. CERTAIN ENERGY EFFICIENT PROPERTY IN 
RESIDENCES AND BUSINESSES. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 25 percent of the 
amount paid or incurred by the taxpayer for qualified en-
ergy property placed in service or installed by the taxpayer 
during such taxable year. 
‘‘(b) QUALIFIED ENERGY PROPERTY.—For purposes 
of this section, the term ‘qualified energy property’ means 
any property— 
‘‘(1) which is— 
‘‘(A) an energy efficient building envelope 
component which is Energy Star qualified, and 
‘‘(B) any energy efficient heating or cool-
ing equipment (including boilers) which is En-
ergy Star qualified, 
‘‘(2) which, in the case of an individual, is in-
stalled in or on an existing residence— 
‘‘(A) located in the United States, and
‘‘(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.