I 
110TH CONGRESS 
2D SESSION 
H. R. 7238 
To provide a tax credit for qualified energy storage air conditioner property. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 29, 2008 
Mr. THOMPSON of California (for himself and Mr. HERGER) introduced the 
following bill; which was referred to the Committee on Ways and Means 
A BILL 
To provide a tax credit for qualified energy storage air 
conditioner property. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. CREDIT FOR QUALIFIED ENERGY STORAGE AIR 
CONDITIONER PROPERTY INSTALLED IN A 
PRINCIPAL RESIDENCE. 
(a) IN GENERAL.—Subsection (a) of section 25D of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘and’’ at the end of paragraph (2), by striking the period 
at the end of paragraph (3) and inserting ‘‘, and’’, and 
by adding at the end the following new paragraph: 
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‘‘(4) 30 percent of the qualified energy storage 
air conditioner property expenditures made by the 
taxpayer during such year.’’. 
(b) QUALIFIED ENERGY STORAGE AIR CONDITIONER 
PROPERTY EXPENDITURE.—Section 25D(d) of such Code 
is amended by adding at the end the following new para-
graph: 
‘‘(4) QUALIFIED ENERGY STORAGE AIR CONDI-
TIONER
PROPERTY
EXPENDITURE.—The 
term 
‘qualified energy storage air conditioner property ex-
penditure’ means an expenditure for qualified energy 
storage air conditioner property (as defined in sec-
tion 48(d)) installed on or in connection with a 
dwelling unit located in the United States and used 
as a principal residence (within the meaning of sec-
tion 121) by the taxpayer.’’. 
(c) MODIFICATION OF MAXIMUM CREDIT.— 
(1) IN
GENERAL.—Paragraph (1) of section 
25D(b) of such Code is amended by striking ‘‘and’’ 
at the end of subparagraph (B), by striking the pe-
riod at the end of subparagraph (C) and inserting 
‘‘, and’’, and by adding at the end the following new 
subparagraph: 
‘‘(D) $500 with respect to each half kilo-
watt of peak demand reduction (as defined in 
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section 48(d)) of qualified energy storage air 
conditioner property (as defined in section 
48(d)) for which qualified energy storage air 
conditioner expenditures are made.’’. 
(2) 
CONFORMING
AMENDMENTS.—Subpara-
graph (A) of section 25D(e)(4) of such Code is 
amended by striking ‘‘and’’ at the end of clause (ii), 
by striking the period at the end of clause (iii) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new clause: 
‘‘(iv) $1,667 in the case of each half 
kilowatt of peak demand reduction (as de-
fined in section 48(d)) of qualified energy 
storage air conditioner property (as defined 
in section 48(d)) for which qualified energy 
storage air conditioner expenditures are 
made.’’. 
(d) EXTENSION OF CREDIT.—Subsection (f) of sec-
tion 25D of such Code is amended by inserting ‘‘(Decem-
ber 31, 2014, in the case of qualified energy storage air 
conditioner property (ad defined in section 48(d))’’ before 
the period at the end. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2008. 
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SEC. 2. BUSINESS CREDIT FOR QUALIFIED ENERGY STOR-
AGE AIR CONDITIONER PROPERTY. 
(a) IN GENERAL.—Subparagraph (A) of section 
48(a)(3) of the Internal Revenue Code of 1986 is amended 
by deleting ‘‘or’’ at the end of clause (iii), by inserting 
‘‘or’’ at the end of clause (iv), and by inserting clause (iv) 
the following new clause: 
‘‘(v) qualified energy storage air con-
ditioner property but only with respect to 
periods ending before January 1, 2015,’’. 
(b) 30 PERCENT CREDIT.—Clause (i) of section 
48(a)(2)(A) of such Code is amended by striking ‘‘and’’ 
at the end of subclause (II) and by inserting after sub-
clause (III) the following new subclause: 
‘‘(IV) qualified energy storage air 
conditioner property, and’’. 
(c) QUALIFIED ENERGY STORAGE AIR CONDITIONER 
PROPERTY.—Section 48 of such Code is amended by add-
ing at the end the following new subsection: 
‘‘(d) QUALIFIED ENERGY STORAGE AIR CONDI-
TIONER PROPERTY.—For the purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified energy 
storage air conditioner property’ means a cooling 
system which— 
‘‘(A) consists of thermal storage or ice 
storage components which create, store, and 
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supply cooling energy to reduce peak electricity 
demand by displacing the daytime peak elec-
trical demand of conventional mechanical cool-
ing equipment, 
‘‘(B) has a nameplate operational capa-
bility to deliver a minimum of 29,000 Btu and 
a maximum of 240,000 Btu of cooling capacity, 
‘‘(C) is designed to deliver such cooling ca-
pacity for a minimum continuous period of 3 
hours, available daily from May 1 through Sep-
tember 30, coincident with daytime peak load 
periods, 
‘‘(D) is designed so as to reduce peak kilo-
watt demand by 90 percent for the cooling load 
served, and 
‘‘(E) is designed so as not to exceed the 24 
hour energy consumption of conventional cool-
ing equipment by more than 10 percent. 
‘‘(2) INCLUSION
OF
RELATED
EQUIPMENT.— 
Such term shall include any secondary components 
which integrate the cooling system described in 
paragraph (1) with the conventional cooling system, 
including equipment and controls for measuring and 
reporting operation and performance, but shall not 
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include any portion of the conventional cooling sys-
tem. 
‘‘(3) LIMITATION.— 
‘‘(A) IN GENERAL.—In the case of quali-
fied energy storage air conditioner property 
placed in service during the taxable year, the 
credit otherwise determined under this section 
for such year with respect to such property 
shall not exceed an amount equal to $500 for 
each 0.5 kilowatt of peak demand reduction of 
such property. 
‘‘(B) PEAK
DEMAND
REDUCTION.—For 
purposes of this subsection, the term ‘peak de-
mand reduction’ means the removal of electrical 
demand (kW) on the utility grid system during 
the daily time period of high electrical demand. 
The peak demand reduction shall be determined 
based on Energy Efficiency Ratio (EER) stand-
ards for residential and commercial air condi-
tioning equipment, established under the En-
ergy Policy and Conservation Act of 1975.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this Act shall apply to taxable years beginning after De-
cember 31, 2008. 
Æ 
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