SEC. 2. REFUNDABLE CREDIT FOR RESIDENTIAL ENERGY 
COSTS. 
(a) IN GENERAL.—Subchapter B of chapter 65 of the 
Internal Revenue Code of 1986 (relating to rules of special 
application) is amended by adding at the end the following 
new section: 
‘‘SEC. 6431. REFUNDABLE CREDIT FOR RESIDENTIAL EN-
ERGY COSTS. 
‘‘(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 
the lesser of— 
‘‘(1) 33 percent of the amount of the taxpayer’s 
residential energy costs for such taxable year, or 
‘‘(2) $500. 
‘‘(b) INCOME LIMITATION.— 
‘‘(1) IN GENERAL.—The amount allowable as a 
credit under subsection (a) for any taxable year shall 
be reduced (but not below zero) by 5 percent of so 
much of the taxpayer’s adjusted gross income as ex-
ceeds the threshold amount. 
‘‘(2) THRESHOLD AMOUNT.—For purposes of 
paragraph (1), the term ‘threshold amount’ means— 
‘‘(A) $200,300 in the case of a joint re-
turn, 
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‘‘(B) $182,400 in the case of a head of a 
household (as defined in section 2(b)), 
‘‘(C) $164,550 in the case of an individual 
who is not married, and 
‘‘(D) one-half of the dollar amount in ef-
fect under subparagraph (A) for the taxable 
year in the case of a married individual filing 
a separate return. 
‘‘(3) DETERMINATION OF ADJUSTED GROSS IN-
COME.—For purposes of paragraph (1), adjusted 
gross income shall be determined without regard to 
sections 911, 931, and 933. 
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) RESIDENTIAL ENERGY COSTS.—The term 
‘residential energy costs’ means the amount paid or 
incurred by the taxpayer during the taxable year— 
‘‘(A) to any utility for electricity or natural 
gas used in the principal residence of the tax-
payer during the heating season, and 
‘‘(B) for any qualified fuel for use in the 
principal residence of the taxpayer but only if 
such fuel is the primary fuel for heating such 
residence. 
‘‘(2) PRINCIPAL RESIDENCE.— 
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‘‘(A) IN
GENERAL.—The term ‘principal 
residence’ has the meaning given to such term 
by section 121; except that no ownership re-
quirement shall be imposed. 
‘‘(B) SPECIAL
RULES.—Such term shall 
not include— 
‘‘(i) any residence located outside the 
United States, and 
‘‘(ii) any residence not used as the 
taxpayer’s 
principal 
place 
of 
abode 
throughout the heating season. 
‘‘(3) HEATING
SEASON.—The term ‘heating 
season’ means October, November, December, Janu-
ary, February, and March. 
‘‘(4) QUALIFIED
FUEL.—The term ‘qualified 
fuel’ includes propane, heating oil, kerosene, wood, 
and wood pellets. 
‘‘(d) OTHER SPECIAL RULES.— 
‘‘(1) INDIVIDUALS PAYING ON LEVEL PAYMENT 
BASIS.—Amounts paid for natural gas under a level 
payment plan for any period shall be treated as paid 
for natural gas used during the portion (if any) of 
the heating season during such period to the extent 
of the amount charged for natural gas used during 
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such portion of the heating season. A similar rule 
shall apply to electricity and any qualified fuel. 
‘‘(2) HOMEOWNERS ASSOCIATIONS, ETC.—The 
application of this section to homeowners associa-
tions (as defined in section 528(c)(1)) or members 
of such associations, and tenant-stockholders in co-
operative housing corporations (as defined in section 
216), shall be allowed by allocation, apportionment, 
or otherwise, to the individuals paying, directly or 
indirectly, for the residential energy cost so incurred. 
‘‘(3) DOLLAR AMOUNT IN CASE OF JOINT OCCU-
PANCY.—In the case of a dwelling unit which is the 
principal residence by 2 or more individuals, the dol-
lar limitation under subsection (a)(2) shall be allo-
cated among such individuals under regulations pre-
scribed by the Secretary. 
‘‘(4) TREATMENT AS REFUNDABLE CREDIT.— 
For purposes of this title, the credit allowed by this 
section shall be treated as a credit allowed under 
subpart C of part IV of subchapter A of chapter 1 
(relating to refundable credits). 
‘‘(e) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning in 2009, each of the dollar amounts 
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contained in subsections (a)(2) and (b)(2) shall be 
increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) in the case of— 
‘‘(i) the dollar amount contained in 
subsection (a)(2), the fuel price inflation 
adjustment for 2009, and 
‘‘(ii) the dollar amounts contained in 
subsection (b)(2), the cost-of-living adjust-
ment determined under section 1(f)(3) for 
2009 by substituting ‘calendar year 2007’ 
for ‘calendar year 1992’ in subparagraph 
(B) thereof. 
‘‘(2) FUEL PRICE INFLATION ADJUSTMENT.— 
For purposes of paragraph (1)(B)(i)— 
‘‘(A) IN GENERAL.—The fuel price infla-
tion adjustment for 2009 is the percentage (if 
any) by which— 
‘‘(i) the CPI fuel component for Octo-
ber of 2008, exceeds 
‘‘(ii) the CPI fuel component for Oc-
tober of 2007. 
‘‘(B) CPI FUEL COMPONENT.—The term 
‘CPI fuel component’ means the fuel component 
of the Consumer Price Index for All Urban 
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Consumers published by the Department of 
Labor. 
‘‘(3) ROUNDING.— 
‘‘(A) CREDIT AMOUNT.— 
‘‘(i) CREDIT AMOUNT.—If the dollar 
amount in subsection (a)(2) (after being 
increased under paragraph (1)), is not a 
multiple of $10, such dollar amount shall 
be rounded to the nearest multiple of $10. 
‘‘(ii) INCOME
THRESHOLD.—If any 
dollar amount in subsection (b)(2) (after 
being increased under paragraph (1)), is 
not a multiple of $50, such dollar amount 
shall be rounded to the next lowest mul-
tiple of $50. 
‘‘(f) APPLICATION OF SECTION.—This section shall 
apply to residential energy costs paid or incurred after the 
date of the enactment of this section, in taxable years end-
ing after such date, and before January 1, 2010.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by striking ‘‘or 
6428 or’’ and inserting ‘‘, 6428, 6431, or’’. 
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(2) The table of sections for subchapter B of 
chapter 65 of such Code is amended by adding at 
the end the following new item: 
‘‘Sec. 6431. Refundable credit for residential energy costs.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
Æ 
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