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a gas or oil furnace or boiler or an electric
heat pump, and
‘‘(ii) require that any computer soft-
ware allow for the printing of the Federal
tax forms necessary for the credit under this
section and for the printing of forms for
disclosure to the owner of the dwelling.
‘‘(B) PROVIDERS.—For purposes of para-
graph (2)(B), the Secretary shall establish re-
quirements for the designation of individuals
based on the requirements for energy consultants
and home energy raters specified by the Mort-
gage Industry National Accreditation Procedures
for Home Energy Rating Systems.
‘‘(f) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OCCU-
PANCY.—In the case of any dwelling unit which is
jointly occupied and used during any calendar year
as a residence by 2 or more individuals the following
shall apply:
‘‘(A) The amount of the credit allowable
under subsection (a) by reason of expenditures
for the qualified energy efficiency improvements
made during such calendar year by any of such
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individuals with respect to such dwelling unit
shall be determined by treating all of such indi-
viduals as 1 taxpayer whose taxable year is such
calendar year.
‘‘(B) There shall be allowable, with respect
to such expenditures to each of such individuals,
a credit under subsection (a) for the taxable year
in which such calendar year ends in an amount
which bears the same ratio to the amount deter-
mined under subparagraph (A) as the amount of
such expenditures made by such individual dur-
ing such calendar year bears to the aggregate of
such expenditures made by all of such individ-
uals 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 de-
fined in such section), such individual shall be treated
as having paid his tenant-stockholder’s proportionate
share (as defined in section 216(b)(3)) of the cost of
qualified energy efficiency improvements made by
such corporation.
‘‘(3) CONDOMINIUMS.—
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‘‘(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 the individual owns, such indi-
vidual shall be treated as having paid the indi-
vidual’s proportionate share of the cost of quali-
fied energy efficiency improvements made by
such association.
‘‘(B) CONDOMINIUM MANAGEMENT ASSOCIA-
TION.—For purposes of this paragraph, the term
‘condominium management association’ means
an organization which meets the requirements of
paragraph (1) of section 528(c) (other than sub-
paragraph (E) thereof) with respect to a condo-
minium project substantially all of the units of
which are used as residences.
‘‘(4) BUILDING
ENVELOPE
COMPONENT.—The
term ‘building envelope component’ means—
‘‘(A) insulation material or system which is
specifically and primarily designed to reduce the
heat loss or gain or a dwelling when installed in
or on such dwelling,
‘‘(B) exterior windows (including skylights),
and
‘‘(C) exterior doors.
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‘‘(5) MANUFACTURED
HOMES
INCLUDED.—For
purposes of this section, the term ‘dwelling’ includes
a manufactured home which conforms to Federal
Manufactured Home Construction and Safety Stand-
ards (24 C.F.R. 3280).
‘‘(g) 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 subsection)
result from such expenditure shall be reduced by the amount
of the credit so allowed.
‘‘(h) APPLICATION OF SECTION.—Subsection (a) shall
apply to qualified energy efficiency improvements installed
during the period beginning on the date of the enactment
of this section and ending on December 31, 2006.’’.
(b) CREDIT ALLOWED AGAINST REGULAR TAX AND
ALTERNATIVE MINIMUM TAX.—
(1) IN GENERAL.—Section 25D(b), as added by
subsection (a), is amended by adding at the end the
following new paragraph:
‘‘(3) LIMITATION BASED ON AMOUNT OF TAX.—
The credit allowed under subsection (a) for the tax-
able year shall not exceed the excess of—
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‘‘(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
‘‘(B) the sum of the credits allowable under
this subpart (other than this section) and section
27 for the taxable year.’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 25D(c), as added by subsection
(a), is amended by striking ‘‘section 26(a) for
such taxable year reduced by the sum of the cred-
its allowable under this subpart (other than this
section)’’ and inserting ‘‘subsection (b)(3)’’.
(B) Section 23(b)(4)(B), as amended by this
Act, is amended by striking ‘‘section 25C’’ and
inserting ‘‘sections 25C and 25D’’.
(C) Section 24(b)(3)(B), as amended by this
Act, is amended by striking ‘‘and 25C’’ and in-
serting ‘‘25C, and 25D’’.
(D) Section 25(e)(1)(C), as amended by this
Act, is amended by inserting ‘‘25D,’’ after
‘‘25C,’’.
(E) Section 25B(g)(2), as amended by this
Act, is amended by striking ‘‘23 and 25C’’ and
inserting ‘‘23, 25C, and 25D’’.
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(F) Section 26(a)(1), as amended by this
Act, is amended by striking ‘‘and 25C’’ and in-
serting ‘‘25C, and 25D’’.
(G) Section 904(h), as amended by this Act,
is amended by striking ‘‘and 25C’’ and inserting
‘‘25C, and 25D’’.
(H) Section 1400C(d), as amended by this
Act, is amended by striking ‘‘and 25C’’ and in-
serting ‘‘25C, and 25D’’.
(c) ADDITIONAL CONFORMING AMENDMENTS.—
(1) Section 23(c), as in effect for taxable years
beginning before January 1, 2004, and as amended
by this Act, is amended by inserting ‘‘, 25D,’’ after
‘‘sections 25C’’.
(2) Section 25(e)(1)(C), as in effect for taxable
years beginning before January 1, 2004, and as
amended by this Act, is amended by inserting ‘‘25D,’’
after ‘‘25C,’’.
(3) Subsection (a) of section 1016, as amended
by this Act, is amended by striking ‘‘and’’ at the end
of paragraph (32), by striking the period at the end
of paragraph (33) and inserting ‘‘; and’’, and by add-
ing at the end the following new paragraph:
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‘‘(34) to the extent provided in section 25D(f), in
the case of amounts with respect to which a credit has
been allowed under section 25D.’’.
(4) Section 1400C(d), as in effect for taxable
years beginning before January 1, 2004, and as
amended by this Act, is amended by striking ‘‘section
25C’’ and inserting ‘‘sections 25C and 25D’’.
(5) The table of sections for subpart A of part IV
of subchapter A of chapter 1, as amended by this Act,
is amended by inserting after the item relating to sec-
tion 25C the following new item:
‘‘Sec. 25D. Energy efficiency improvements to existing homes.’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided by para-
graph (2), the amendments made by this section shall
apply to expenditures after December 31, 2002, in
taxable years ending after such date.
(2) SUBSECTION (b).—The amendments made by
subsection (b) shall apply to taxable years beginning
after December 31, 2003.
SEC. 2110. ALLOWANCE OF DEDUCTION FOR QUALIFIED
NEW OR RETROFITTED WATER SUBMETERING
DEVICES.
(a) IN GENERAL.—Part VI of subchapter B of chapter
1 (relating to itemized deductions for individuals and cor-
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porations), as amended by this Act, is amended by inserting
after section 179D the following new section:
‘‘SEC. 179E. DEDUCTION FOR QUALIFIED NEW OR RETRO-
FITTED WATER SUBMETERING DEVICES.
‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of a
taxpayer who is an eligible resupplier, there shall be allowed
as a deduction an amount equal to the cost of each qualified
water submetering device placed in service during the tax-
able year.
‘‘(b) MAXIMUM DEDUCTION.—The deduction allowed
by this section with respect to each qualified water sub-
metering device shall not exceed $30.
‘‘(c) ELIGIBLE RESUPPLIER.—For purposes of this
section, the term ‘eligible resupplier’ means any taxpayer
who purchases and installs qualified water submetering de-
vices in every unit in any multi-unit property.
‘‘(d) QUALIFIED WATER SUBMETERING DEVICE.—The
term ‘qualified water submetering device’ means any tan-
gible property to which section 168 applies if such property
is a submetering device (including ancillary equipment)—
‘‘(1) which is purchased and installed by the tax-
payer to enable consumers to manage their purchase
or use of water in response to water price and usage
signals, and
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‘‘(2) which permits reading of water price and
usage signals on at least a daily basis.
‘‘(e) PROPERTY USED OUTSIDE THE UNITED STATES
NOT QUALIFIED.—No deduction shall be allowed under sub-
section (a) with respect to property which is used predomi-
nantly outside the United States or with respect to the por-
tion of the cost of any property taken into account under
section 179.
‘‘(f) BASIS REDUCTION.—
‘‘(1) IN GENERAL.—For purposes of this title, the
basis of any property shall be reduced by the amount
of the deduction with respect to such property which
is allowed by subsection (a).
‘‘(2) ORDINARY INCOME RECAPTURE.—For pur-
poses of section 1245, the amount of the deduction al-
lowable under subsection (a) with respect to any
property that is of a character subject to the allow-
ance for depreciation shall be treated as a deduction
allowed for depreciation under section 167.
‘‘(g) TERMINATION.—This section shall not apply to
any property placed in service after December 31, 2007.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 263(a)(1), as amended by this Act, is
amended by striking ‘‘or’’ at the end of subparagraph
(J), by striking the period at the end of subparagraph
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(K) and inserting ‘‘, or’’, and by inserting after sub-
paragraph (K) the following new subparagraph:
‘‘(L) expenditures for which a deduction is
allowed under section 179E.’’.
(2) Section 312(k)(3)(B), as amended by this
Act, is amended by striking ‘‘or 179D’’ each place it
appears in the heading and text and inserting ‘‘,
179D, or 179E’’.
(3) Section 1016(a), as amended by this Act, is
amended by striking ‘‘and’’ at the end of paragraph
(34), by striking the period at the end of paragraph
(35) and inserting ‘‘, and’’, and by adding at the end
the following new paragraph:
‘‘(36) 
to 
the 
extent 
provided 
in 
section
179E(f)(1).’’.
(4) Section 1245(a), as amended by this Act, is
amended by inserting ‘‘179E,’’ after ‘‘179D,’’ both
places it appears in paragraphs (2)(C) and (3)(C).
(5) The table of contents for subpart B of part
IV of subchapter A of chapter 1, as amended by this
Act, is amended by inserting after the item relating
to section 179D the following new item:
‘‘Sec. 179E. Deduction for qualified new or retrofitted water sub-
metering devices.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to qualified water submetering devices
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placed in service after the date of the enactment of this Act,
in taxable years ending after such date.
SEC. 2111. THREE-YEAR APPLICABLE RECOVERY PERIOD
FOR DEPRECIATION OF QUALIFIED WATER
SUBMETERING DEVICES.
(a) IN
GENERAL.—Subparagraph (A) of section
168(e)(3) (relating to classification of property) is amended
by striking ‘‘and’’ at the end of clause (iii), by striking the
period at the end of clause (iv) and inserting ‘‘, and’’, and
by adding at the end the following new clause:
‘‘(v) any qualified water submetering
device.’’.
(b) DEFINITION OF QUALIFIED WATER SUBMETERING
DEVICE.—Section 168(i) (relating to definitions and spe-
cial rules), as amended by this Act, is amended by inserting
at the end the following new paragraph:
‘‘(16) QUALIFIED
WATER
SUBMETERING
DE-
VICE.—The term ‘qualified water submetering device’
means any qualified water submetering device (as de-
fined in section 179E(d)) which is placed in service
before January 1, 2008, by a taxpayer who is an eli-
gible resupplier (as defined in section 179E(c)).’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to property placed in service after the
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date of the enactment of this Act, in taxable years ending
after such date.
TITLE XXII—CLEAN COAL
INCENTIVES
Subtitle A—Credit for Emission Re-
ductions and Efficiency Improve-
ments in Existing Coal-Based
Electricity Generation Facilities
SEC. 2201. CREDIT FOR PRODUCTION FROM A QUALIFYING
CLEAN COAL TECHNOLOGY UNIT.
(a) CREDIT FOR PRODUCTION FROM A QUALIFYING
CLEAN COAL TECHNOLOGY UNIT.—Subpart D of part IV
of subchapter A of chapter 1 (relating to business related
credits), as amended by this Act, is amended by adding at
the end the following new section:
‘‘SEC. 45I. CREDIT FOR PRODUCTION FROM A QUALIFYING
CLEAN COAL TECHNOLOGY UNIT.
‘‘(a) GENERAL RULE.—For purposes of section 38, the
qualifying clean coal technology production credit of any
taxpayer for any taxable year is equal to the product of—
‘‘(1) the applicable amount of clean coal tech-
nology production credit, multiplied by
‘‘(2) the applicable percentage of the kilowatt
hours of electricity produced by the taxpayer during
such taxable year at a qualifying clean coal tech-