I 
108TH CONGRESS 
1ST SESSION H. R. 3138
To amend the Internal Revenue Code of 1986 to allow a refundable credit 
for expenditures for renewable energy property. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 18, 2003
Mrs. DAVIS of California 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 
refundable credit for expenditures for renewable energy 
property.
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 Act 
for Credit on Taxes’’. 
SEC. 2. REFUNDABLE CREDIT FOR RENEWABLE ENERGY 
PROPERTY. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to refundable credits) is amended by redes-
ignating section 36 as section 37 and by inserting after 
section 35 the following new section: 
‘‘SEC. 36. RENEWABLE ENERGY PROPERTY. 
‘‘(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 35 percent of the expenditures for renewable en-
ergy property made by the taxpayer during the taxable 
year. 
‘‘(b) LIMITATION.—
‘‘(1) MAXIMUM
CREDIT.—The credit allowed 
under subsection (a) shall not exceed the lesser of—
‘‘(A) $6,000 ($50,000 in the case of re-
newable energy property used for nonresidential 
business purposes) for each system of renewable 
energy property, or 
‘‘(B) $4.50 per watt of rated system elec-
tricity output or equivalent. 
‘‘(2) LOCATION OF STRUCTURE.—No expendi-
ture may be taken into account under this section 
unless such expenditure is made by the taxpayer for 
property installed on or in connection with a struc-
ture which is located in the United States.
‘‘(3) RATING SYSTEM ELECTRICITY OUTPUT.—
For purposes of paragraph (1)(B), the rated system 
electricity output or equivalent for—
‘‘(A) solar water heating property shall be 
the output determined by the Secretary on the 
basis of evidence acceptable to the Secretary 
which is submitted by manufacturers of such 
property and which includes information relat-
ing to one year of reliable operation of such 
property, 
‘‘(B) photovoltaic property shall be the 
output certified by a nationally recognized test-
ing laboratory as meeting the requirements of 
the Underwriters Laboratory Standard 1703, 
‘‘(C) wind energy property shall be the 
output—
‘‘(i) certified as meeting the require-
ments of a small wind turbine-specific safe-
ty or performance standard adopted by a 
national or international standards setting 
body, including International Electric Code 
61400–2, or 
‘‘(ii) determined by the Secretary on 
the basis of evidence acceptable to the Sec-
retary which is submitted by manufactur-
ers of such property and which includes in-
formation relating to one year of reliable 
operation of such property at a site with 
average annual wind speeds of at least 12 
miles per hour, and 
‘‘(D) fuel cell property shall be the output 
certified as meeting the requirements specified 
by the American Gas Association in document 
entitled ‘AGA Requirements for Fuel Cell 
Power Plants’, No. 8–90. 
The Secretary shall determine who makes the certifi-
cations for purposes of subparagraphs (C)(i) and 
(D). 
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) RENEWABLE
ENERGY
PROPERTY.—The 
term ‘renewable energy property’ means property 
which is—
‘‘(A) qualified solar water heating prop-
erty, 
‘‘(B) qualified photovoltaic property, 
‘‘(C) qualified wind energy property, or 
‘‘(D) qualified fuel cell property. 
‘‘(2) QUALIFIED SOLAR WATER HEATING PROP-
ERTY.—The term ‘qualified solar water heating 
property’ means property that uses solar energy to
heat water for use in a structure with respect to 
which a majority of the energy is derived from the 
sun. 
‘‘(3) QUALIFIED PHOTOVOLTAIC PROPERTY.—
The term ‘qualified photovoltaic property’ means 
property that uses solar energy to generate elec-
tricity for use in a structure. 
‘‘(4) SOLAR PANELS.—No expenditure relating 
to a solar panel or other property installed as a roof 
(or portion thereof) shall fail to be treated as prop-
erty described in paragraph (2) or (3) solely because 
it constitutes a structural component of the struc-
ture on which it is installed. 
‘‘(5) QUALIFIED
WIND
ENERGY
PROPERTY.—
The term ‘qualified wind energy property’ means 
property which uses wind energy to generate elec-
tricity for use in a structure. 
‘‘(6) QUALIFIED FUEL CELL PROPERTY.—The 
term ‘qualified fuel cell property’ means property 
which uses an electrochemical process to generate 
electricity for use in a structure.
‘‘(7) LABOR
COSTS.—Expenditures for labor 
costs properly allocable to the onsite preparation, as-
sembly, or original installation of the property de-
scribed in paragraph (2), (3), (5), or (6) and for
gregate of such expenditures made by all of 
such persons 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.
‘‘(4) JOINT OWNERSHIP OF ITEMS OF RENEW-
ABLE ENERGY PROPERTY.—
‘‘(A) IN GENERAL.—Any expenditure oth-
erwise qualifying as an expenditure described in 
paragraph (2), (3), (5), or (6) of subsection (c) 
shall not be treated as failing to so qualify 
merely because such expenditure was made with 
respect to 2 or more structures. 
‘‘(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 
structure. 
‘‘(5) ALLOCATION IN CERTAIN CASES.—If 80 
percent or more of the use of an item is for residen-
tial purposes, then the item shall be treated as used 
only for residential purposes. 
‘‘(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) REDUCTION OF CREDIT FOR GRANTS, TAX-
EXEMPT BONDS, AND SUBSIDIZED ENERGY FINANC-
ING.—The rules of section 29(b)(3) shall apply for 
purposes of this section. 
‘‘(8) DENIAL OF DOUBLE BENEFIT.—No credit 
shall be allowed under subsection (a) for any ex-
pense for which a deduction or credit is allowed 
under any other provision of this chapter. 
‘‘(e) 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.
‘‘(f) TERMINATION.—The credit allowed under this 
section shall not apply to taxable years beginning after 
December 31, 2008.’’. 
(b) CONFORMING AND TECHNICAL AMENDMENTS.—
(1) Subsection (a) of section 1016 of such Code 
is amended by striking ‘‘and’’ at the end of para-
graph (27), by striking the period at the end of 
paragraph (28) and inserting ‘‘; and’’, and by add-
ing at the end the following new paragraph: 
‘‘(29) to the extent provided in section 36(e), in 
the case of amounts with respect to which a credit 
has been allowed under section 36.’’
(2) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting ‘‘or 
from section 36 of such Code’’ before the period at 
the end. 
(3) The table of sections for such subpart C is 
amended by striking the item relating to section 36 
and inserting the following new items:
‘‘Sec. 36. Renewable energy property. 
‘‘Sec. 37. Overpayment of taxes.’’
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2003.
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