I 
108TH CONGRESS 
1ST SESSION H. R. 1459
To amend the Internal Revenue Code of 1986 to provide tax credits for 
making energy efficiency improvements to existing homes and for con-
structing new energy efficient homes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 27, 2003
Mr. WELLER (for himself, Mr. CARDIN, and Mr. FOLEY) 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 provide 
tax credits for making energy efficiency improvements 
to existing homes and for constructing new energy effi-
cient homes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Save America’s Valuable Energy Resources Act of 
2003’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
SEC. 2. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS 
TO EXISTING HOMES. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 (relating to nonrefundable personal 
credits) is amended by inserting after section 25B the fol-
lowing new section: 
‘‘SEC. 25C. ENERGY EFFICIENCY IMPROVEMENTS TO EXIST-
ING HOMES. 
‘‘(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 20 percent of the amount paid or incurred by 
the taxpayer for qualified energy efficiency improvements 
installed during such taxable year. 
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM CREDIT.—The credit allowed by 
this section with respect to a dwelling shall not ex-
ceed $2,000. 
‘‘(2) PRIOR CREDIT AMOUNTS FOR TAXPAYER 
ON SAME DWELLING TAKEN INTO ACCOUNT.—If a 
credit was allowed to the taxpayer under subsection
(a) with respect to a dwelling in 1 or more prior tax-
able years, the amount of the credit otherwise allow-
able for the taxable year with respect to that dwell-
ing shall not exceed the amount of $2,000 reduced 
by the sum of the credits allowed under subsection 
(a) to the taxpayer with respect to the dwelling for 
all prior taxable years. 
‘‘(3) LIMITATION
BASED
ON
AMOUNT
OF 
TAX.—The credit allowed under subsection (a) for 
the 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 subpart (other than this section and 
section 23) and section 27 for the taxable year. 
‘‘(c) CARRYFORWARD OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) exceeds the limita-
tion imposed by subsection (b)(3) 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 succeeding taxable year. 
‘‘(d) QUALIFIED ENERGY EFFICIENCY IMPROVE-
MENTS.—For purposes of this section, the term ‘qualified 
energy efficiency improvements’ means any energy effi-
envelope component performance, for the energy effi-
cient building envelope component, 
‘‘(2) provided by a local building regulatory au-
thority, a utility, a manufactured home production 
inspection primary inspection agency (IPIA), or an 
accredited home energy rating system provider who 
is accredited by or otherwise authorized to use ap-
proved energy performance measurement methods by 
the Home Energy Ratings Systems Council or the 
National Association of State Energy Officials, and 
‘‘(3) made in writing in a manner that specifies 
in readily verifiable fashion the energy efficient 
building envelope components installed and their re-
spective energy efficiency levels. 
‘‘(f) DEFINITIONS AND SPECIAL RULES.—
‘‘(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) in a cooperative housing corporation (as
defined in such section), such individual shall be 
treated as having paid his tenant-stockholder’s pro-
portionate share (as defined in section 216(b)(3)) of 
the cost of qualified energy efficiency improvements 
made by such corporation. 
‘‘(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 the cost of qualified energy efficiency im-
provements made by 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. 
‘‘(3) BUILDING ENVELOPE COMPONENT.—The 
term ‘building envelope component’ means insulation 
material or system which is specifically and pri-
marily designed to reduce the heat loss or gain of a 
dwelling when installed in or on such dwelling, exte-
rior windows (including skylights) and doors, and 
metal roofs with appropriate pigmented coatings 
which are specifically and primarily designed to re-
duce the heat gain of a dwelling when installed in 
or on such dwelling.
‘‘(4) 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 CFR 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 sub-
section) result from such expenditure shall be reduced by 
the amount of the credit so allowed. 
‘‘(h) APPLICATION OF SECTION.—This section shall 
apply to qualified energy efficiency improvements installed 
after December 31, 2002 and before January 1, 2008.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Subsection (a) of section 1016 is amended 
by striking ‘‘and’’ at the end of paragraph (27), by 
striking the period at the end of paragraph (28) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(29) to the extent provided in section 25C(g), 
in the case of amounts with respect to which a credit 
has been allowed under section 25C.’’. 
(2) The table of sections for subpart A of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 25B the fol-
lowing new item:
‘‘Sec. 25C. Energy efficiency improvements to existing homes.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2002. 
SEC. 3. BUSINESS CREDIT FOR CONSTRUCTION OF NEW EN-
ERGY EFFICIENT HOME. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 (relating to business related cred-
its) is amended by inserting after section 45F the fol-
lowing new section: 
‘‘SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 38, in 
the case of an eligible contractor, the credit determined 
under this section for the taxable year is an amount equal 
to the aggregate adjusted bases of all energy efficient 
property installed in a qualified new energy efficient home 
during construction of such home. 
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM CREDIT.—
‘‘(A) IN GENERAL.—The credit allowed by 
this section with respect to a dwelling shall not 
exceed $2,000. 
‘‘(B) PRIOR CREDIT AMOUNTS ON SAME 
DWELLING TAKEN INTO ACCOUNT.—If a credit
was allowed under subsection (a) with respect 
to a dwelling in 1 or more prior taxable years, 
the amount of the credit otherwise allowable for 
the taxable year with respect to that dwelling 
shall not exceed the amount of $2,000 reduced 
by the sum of the credits allowed under sub-
section (a) with respect to the dwelling for all 
prior taxable years. 
‘‘(2) COORDINATION
WITH
REHABILITATION 
AND ENERGY CREDITS.—For purposes of this sec-
tion—
‘‘(A) the basis of any property referred to 
in subsection (a) shall be reduced by that por-
tion of the basis of any property which is attrib-
utable to qualified rehabilitation expenditures 
(as defined in section 47(c)(2)) or to the energy 
percentage of energy property (as determined 
under section 48(a)), and
‘‘(B) expenditures taken into account 
under either section 47 or 48(a) shall not be 
taken into account under this section. 
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) ELIGIBLE CONTRACTOR.—The term ‘eligi-
ble contractor’ means the person who constructed 
the new energy efficient home, or in the case of a
manufactured home which conforms to Federal 
Manufactured Home Construction and Safety Stand-
ards (24 CFR 3280), the manufactured home pro-
ducer of such home. 
‘‘(2) ENERGY
EFFICIENT
PROPERTY.—The 
term ‘energy efficient property’ means any energy 
efficient building envelope component, and any en-
ergy efficient heating or cooling appliance. 
‘‘(3) QUALIFIED
NEW
ENERGY
EFFICIENT 
HOME.—The term ‘qualified new energy efficient 
home’ means a dwelling—
‘‘(A) located in the United States, 
‘‘(B) the construction of which is substan-
tially completed after December 31, 2002, 
‘‘(C) the original use of which is as a prin-
cipal residence (within the meaning of section 
121) which commences with the person who ac-
quires such dwelling from the eligible con-
tractor, and 
‘‘(D) which is certified to have a level of 
annual heating and cooling energy consumption 
that is at least 30 percent below the annual 
level of heating and cooling energy consumption 
of a comparable dwelling constructed in accord-
ance with the standards of the 1998 Inter-
‘‘(1) METHOD.—A certification described in 
subsection (c)(3)(D) shall be determined on the 
basis of one of the following methods: 
‘‘(A) The technical specifications or appli-
cable ratings (including product labeling re-
quirements) for the measurement of energy effi-
ciency for the energy efficient building envelope 
component or energy efficient heating or cooling 
appliance, based upon energy use or building 
envelope component performance. 
‘‘(B) An energy performance measurement 
method that utilizes computer software ap-
proved by organizations designated by the Sec-
retary. 
‘‘(2) PROVIDER.—Such certification shall be 
provided by—
‘‘(A) in the case of a method described in 
paragraph (1)(A), a local building regulatory 
authority, a utility, a manufactured home pro-
duction inspection primary inspection agency 
(IPIA), or an accredited home energy rating 
systems provider who is accredited by, or other-
wise authorized to use, approved energy per-
formance measurement methods by the Home
Energy Ratings Systems Council or the Na-
tional Association of State Energy Officials, or 
‘‘(B) in the case of a method described in 
paragraph (1)(B), an individual recognized by 
an organization designated by the Secretary for 
such purposes. 
‘‘(3) FORM.—Such certification shall be made 
in writing in a manner that specifies in readily 
verifiable fashion the energy efficient building enve-
lope components and energy efficient heating or 
cooling appliances installed and their respective en-
ergy efficiency levels, and in the case of a method 
described in subparagraph (B) of paragraph (1), ac-
companied by written analysis documenting the 
proper application of a permissible energy perform-
ance measurement method to the specific cir-
cumstances of such dwelling. 
‘‘(4) REGULATIONS.—
‘‘(A) IN GENERAL.—In prescribing regula-
tions under this subsection for energy perform-
ance measurement methods, the Secretary shall 
prescribe procedures for calculating annual en-
ergy costs for heating and cooling and cost sav-
ings and for the reporting of the results. Such 
regulations shall—
‘‘(i) be based on the National Home 
Energy Rating Technical Guidelines of the 
National Association of State Energy Offi-
cials, the Home Energy Rating Guidelines 
of the Home Energy Rating Systems 
Council, or the modified 1998 California 
Residential ACM manual, 
‘‘(ii) provide that any calculation pro-
cedures be developed such that the same 
energy efficiency measures allow a home to 
qualify for the credit under this section re-
gardless of whether the house uses a gas 
or oil furnace or boiler or an electric heat 
pump, and 
‘‘(iii) require that any computer soft-
ware allow for the printing of the Federal 
tax forms necessary for the credit under 
this section and explanations for the home-
buyer of the energy efficient features that 
were used to comply with the requirements 
of this section. 
‘‘(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 consult-
ants and home energy raters specified by the 
National Association of State Energy Officials. 
‘‘(e) 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 sub-
section) result from such expenditure shall be reduced by 
the amount of the credit so allowed. 
‘‘(f) APPLICATION OF SECTION.—Subsection (a) shall 
apply to dwellings purchased during the period beginning 
on January 1, 2003, and ending on December 31, 2007.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 (relating to current 
year business credit) is amended by striking ‘‘plus’’ at the 
end of paragraph (14), by striking the period at the end 
of paragraph (15) and inserting ‘‘, plus’’, and by adding 
at the end thereof the following new paragraph: 
‘‘(16) the new energy efficient home credit de-
termined under section 45G.’’. 
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C 
(relating to certain expenses for which credits are allow-
able) is amended by adding at the end thereof the fol-
lowing new subsection: 
‘‘(d) NEW ENERGY EFFICIENT HOME EXPENSES.—
No deduction shall be allowed for that portion of expenses
for a new energy efficient home otherwise allowable as a 
deduction for the taxable year which is equal to the 
amount of the credit determined for such taxable year 
under section 45G.’’. 
(d) LIMITATION ON CARRYBACK.—Subsection (d) of 
section 39 is amended by adding at the end the following 
new paragraph: 
‘‘(11) NO CARRYBACK OF NEW ENERGY EFFI-
CIENT HOME CREDIT BEFORE EFFECTIVE DATE.—
No portion of the unused business credit for any 
taxable year which is attributable to the credit deter-
mined under section 45G may be carried back to any 
taxable year ending before January 1, 2003.’’. 
(e) DEDUCTION FOR CERTAIN UNUSED BUSINESS 
CREDITS.—Subsection (c) of section 196 is amended by 
striking ‘‘and’’ at the end of paragraph (9), by striking 
the period at the end of paragraph (10) and inserting ‘‘, 
and’’, and by adding after paragraph (10) the following 
new paragraph: 
‘‘(11) the new energy efficient home credit de-
termined under section 45G.’’. 
(f) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
is amended by inserting after the item relating to section 
45F the following new item:
‘‘Sec. 45G. New energy efficient home credit.’’.
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2002. 
SEC. 4. ALLOWANCE OF DEDUCTION FOR ENERGY EFFI-
CIENT COMMERCIAL BUILDING PROPERTY. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 (relating to itemized deductions for individuals and 
corporations) is amended by inserting after section 179A 
the following new section: 
‘‘SEC. 179B. DEDUCTION FOR ENERGY EFFICIENT COMMER-
CIAL BUILDING PROPERTY. 
‘‘(a) ALLOWANCE OF DEDUCTION.—
‘‘(1) IN GENERAL.—There shall be allowed as a 
deduction an amount equal to energy efficient com-
mercial building property expenditures made by a 
taxpayer for the taxable year.
‘‘(2) MAXIMUM AMOUNT OF DEDUCTION.—The 
amount of energy efficient commercial building prop-
erty expenditures taken into account under para-
graph (1) shall not exceed an amount equal to the 
product of—
‘‘(A) $2.25, and 
‘‘(B) the square footage of the building 
with respect to which the expenditures are 
made.
‘‘(3) YEAR DEDUCTION ALLOWED.—The deduc-
tion under paragraph (1) shall be allowed for the 
taxable year in which the building is placed in serv-
ice. 
‘‘(b) ENERGY EFFICIENT COMMERCIAL BUILDING 
PROPERTY EXPENDITURES.—For purposes of this sec-
tion, the term ‘energy efficient commercial building prop-
erty expenditures’ means an amount paid or incurred for 
energy efficient commercial building property installed on 
or in connection with new construction or reconstruction 
of property—
‘‘(1) for which depreciation is allowable under 
section 167, 
‘‘(2) which is located in the United States, and 
‘‘(3) the construction or erection of which is 
completed by the taxpayer. 
Such property includes all residential rental property, in-
cluding low-rise multifamily structures and single family 
housing property which is not within the scope of Stand-
ard 90.1–1999 (described in subsection (c)). Such term 
includes expenditures for labor costs properly allocable to 
the onsite preparation, assembly, or original installation 
of the property. 
‘‘(c) ENERGY EFFICIENT COMMERCIAL BUILDING 
PROPERTY.—For purposes of subsection (b)—
‘‘(1) IN GENERAL.—The term ‘energy efficient 
commercial building property’ means any property 
which reduces total annual energy and power costs 
with respect to the lighting, heating, cooling, ventila-
tion, and hot water supply systems of the building 
by 50 percent or more in comparison to a reference 
building which meets the requirements of Standard 
90.1–1999 of the American Society of Heating, Re-
frigerating, and Air Conditioning Engineers and the 
Illuminating Engineering Society of North America 
using methods of calculation under paragraph (2) 
and certified by qualified professionals as provided 
under subsection (f). 
‘‘(2) METHODS
OF
CALCULATION.—The Sec-
retary, in consultation with the Secretary of Energy, 
shall promulgate regulations which describe in detail 
methods for calculating and verifying energy and 
power consumption and cost, taking into consider-
ation the provisions of the 1998 California Nonresi-
dential ACM Manual. These procedures shall meet 
the following requirements: 
‘‘(A) In calculating tradeoffs and energy 
performance, the regulations shall prescribe the 
costs per unit of energy and power, such as kil-
owatt hour, kilowatt, gallon of fuel oil, and
cubic foot or Btu of natural gas, which may be 
dependent on time of usage. 
‘‘(B) The calculational methodology shall 
require that compliance be demonstrated for a 
whole building. If some systems of the building, 
such as lighting, are designed later than other 
systems of the building, the method shall pro-
vide that either—
‘‘(i) the expenses taken into account 
under subsection (a) shall not occur until 
the date designs for all energy-using sys-
tems of the building are completed, 
‘‘(ii) the energy performance of all 
systems and components not yet designed 
shall be assumed to comply minimally with 
the requirements of such Standard 90.1–
1999, or 
‘‘(iii) the expenses taken into account 
under subsection (a) shall be a fraction of 
such expenses based on the performance of 
less than all energy-using systems in ac-
cordance with subparagraph (C). 
‘‘(C) The expenditures in connection with 
the design of subsystems in the building, such 
as the envelope, the heating, ventilation, air
conditioning and water heating system, and the 
lighting system shall be allocated to the appro-
priate building subsystem based on system-spe-
cific energy cost savings targets in regulations 
promulgated by the Secretary of Energy which 
are equivalent, using the calculation method-
ology, to the whole building requirement of 50 
percent savings. 
‘‘(D) The calculational methods under this 
subparagraph need not comply fully with sec-
tion 11 of such Standard 90.1–1999. 
‘‘(E) The calculational methods shall be 
fuel neutral, such that the same energy effi-
ciency features shall qualify a building for the 
deduction under this subsection regardless of
whether the heating source is a gas or oil fur-
nace or an electric heat pump. 
‘‘(F) The calculational methods shall pro-
vide appropriate calculated energy savings for 
design methods and technologies not otherwise 
credited in either such Standard 90.1–1999 or 
in the 1998 California Nonresidential ACM 
Manual, including the following: 
‘‘(i) Natural ventilation. 
‘‘(ii) Evaporative cooling.
‘‘(iii) Automatic lighting controls such 
as occupancy sensors, photocells, and time-
clocks. 
‘‘(iv) Daylighting. 
‘‘(v) Designs utilizing semi-condi-
tioned spaces that maintain adequate com-
fort conditions without air conditioning or 
without heating. 
‘‘(vi) Improved fan system efficiency, 
including reductions in static pressure. 
‘‘(vii) Advanced unloading mecha-
nisms for mechanical cooling, such as mul-
tiple or variable speed compressors. 
‘‘(viii) The calculational methods may 
take into account the extent of commis-
sioning in the building, and allow the tax-
payer to take into account measured per-
formance that exceeds typical performance. 
‘‘(3) COMPUTER SOFTWARE.—
‘‘(A) IN GENERAL.—Any calculation under 
this subsection shall be prepared by qualified 
computer software. 
‘‘(B) QUALIFIED COMPUTER SOFTWARE.—
For purposes of this paragraph, the term 
‘qualified computer software’ means software—
‘‘(i) for which the software designer 
has certified that the software meets all 
procedures and detailed methods for calcu-
lating energy and power consumption and 
costs as required by the Secretary, 
‘‘(ii) which provides such forms as re-
quired to be filed by the Secretary in con-
nection with energy efficiency of property 
and the deduction allowed under this sec-
tion, and 
‘‘(iii) which provides a notice form 
which summarizes the energy efficiency 
features of the building and its projected 
annual energy costs. 
‘‘(d) ALLOCATION
OF
DEDUCTION
FOR
PUBLIC 
PROPERTY.—In the case of energy efficient commercial 
building property installed on or in public property, the 
Secretary shall promulgate a regulation to allow the allo-
cation of the deduction to the person primarily responsible 
for designing the property in lieu of the public entity which 
is the owner of such property. Such person shall be treated 
as the taxpayer for purposes of this section. 
‘‘(e) NOTICE TO OWNER.—The qualified individual 
shall provide an explanation to the owner of the building 
regarding the energy efficiency features of the building
and its projected annual energy costs as provided in the 
notice under subsection (c)(3)(B)(iii). 
‘‘(f) CERTIFICATION.—The Secretary, in consultation 
with the Secretary of Energy, shall establish requirements 
for certification and compliance procedures similar to the 
procedures under section 45G(d). 
‘‘(g) BASIS REDUCTION.—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). 
‘‘(h) TERMINATION.—This section shall not apply to 
property placed in service after December 31, 2007.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 1016(a) is amended by striking 
‘‘and’’ at the end of paragraph (28), by striking the 
period at the end of paragraph (29) and inserting ‘‘, 
and’’, and by inserting the following new paragraph: 
‘‘(30) to the extent provided in section 
179B(g).’’. 
(2) Section 1245(a) is amended by inserting 
‘‘179B,’’ after ‘‘179A,’’ both places it appears in 
paragraphs (2)(C) and (3)(C). 
(3) Section 1250(b)(3) is amended by inserting 
before the period at the end of the first sentence ‘‘or 
by section 179B’’.