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‘‘(B) 30- OR 50-PERCENT HOME.—For pur-
poses of subparagraph (A)—
‘‘(i) 30-PERCENT
HOME.—The term
‘30-percent home’ means a qualifying new
home which is certified to have a projected
level of annual heating and cooling energy
consumption, measured in terms of average
annual energy cost to the homeowner, which
is at least 30 percent less than the annual
level of heating and cooling energy con-
sumption of a reference qualifying new
home constructed in accordance with the
standards of chapter 4 of the 2000 Inter-
national Energy Conservation Code, or a
qualifying new home which is a manufac-
tured home which meets the applicable
standards of the Energy Star program
managed jointly by the Environmental Pro-
tection Agency and the Department of En-
ergy.
‘‘(ii) 50-PERCENT
HOME.—The term
‘50-percent home’ means a qualifying new
home which is certified to have a projected
level of annual heating and cooling energy
consumption, measured in terms of average
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annual energy cost to the homeowner, which
is at least 50 percent less than such annual
level of heating and cooling energy con-
sumption.
‘‘(C) PRIOR
CREDIT
AMOUNTS
ON
SAME
HOME TAKEN INTO ACCOUNT.—If a credit was
allowed under subsection (a) with respect to a
qualifying new home in 1 or more prior taxable
years, the amount of the credit otherwise allow-
able for the taxable year with respect to that
home shall not exceed the amount under clause
(i) or (ii) of subparagraph (A) (as the case may
be), reduced by the sum of the credits allowed
under subsection (a) with respect to the home for
all prior taxable years.
‘‘(2) COORDINATION WITH REHABILITATION AND
ENERGY CREDITS.—For purposes of this section—
‘‘(A) the basis of any property referred to in
subsection (a) shall be reduced by that portion of
the basis of any property which is attributable to
the rehabilitation credit (as determined under
section 47(a)) or to the energy percentage of en-
ergy property (as determined under section
48(a)), and
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‘‘(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 ‘eligible
contractor’ means the person who constructed the
qualifying new home, or in the case of a manufac-
tured home which conforms to Federal Manufactured
Home Construction and Safety Standards (24 C.F.R.
3280), the manufactured home producer of such home.
‘‘(2) ENERGY EFFICIENT PROPERTY.—The term
‘energy efficient property’ means any energy efficient
building envelope component, and any energy effi-
cient heating or cooling equipment which can, indi-
vidually or in combination with other components,
meet the requirements of this section.
‘‘(3) QUALIFYING NEW HOME.—The term ‘quali-
fying new home’ means a dwelling—
‘‘(A) located in the United States,
‘‘(B) the construction of which is substan-
tially completed after the date of the enactment
of this section, and
‘‘(C) the first use of which after construction
is as a principal residence (within the meaning
of section 121).
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‘‘(4) CONSTRUCTION.—The term ‘construction’
includes reconstruction and rehabilitation.
‘‘(5) BUILDING
ENVELOPE
COMPONENT.—The
term ‘building envelope component’ means—
‘‘(A) any insulation material or system
which is specifically and primarily designed to
reduce the heat loss or gain of a qualifying new
home when installed in or on such home, and
‘‘(B) exterior windows (including skylights)
and doors.
‘‘(6) MANUFACTURED
HOME
INCLUDED.—The
term ‘qualifying new home’ includes a manufactured
home conforming to Federal Manufactured Home
Construction and Safety Standards (24 C.F.R. 3280).
‘‘(d) CERTIFICATION.—
‘‘(1) METHOD OF CERTIFICATION.—
‘‘(A) IN
GENERAL.—A certification de-
scribed in subsection (b)(1)(B) shall be deter-
mined either by a component-based method or a
performance-based method.
‘‘(B) COMPONENT-BASED METHOD.—A com-
ponent-based method is a method which uses the
applicable technical energy efficiency specifica-
tions or ratings (including product labeling re-
quirements) for the energy efficient building en-
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velope component or energy efficient heating or
cooling equipment. The Secretary shall, in con-
sultation with the Administrator of the Environ-
mental Protection Agency, develop prescriptive
component-based packages that are equivalent in
energy performance to properties that qualify
under subparagraph (C).
‘‘(C) PERFORMANCE-BASED METHOD.—
‘‘(i) IN
GENERAL.—A performance-
based method is a method which calculates
projected energy usage and cost reductions
in the qualifying new home in relation to a
reference qualifying new home—
‘‘(I) heated by the same energy
source and heating system type, and
‘‘(II) constructed in accordance
with the standards of chapter 4 of the
2000 International Energy Conserva-
tion Code.
‘‘(ii) 
COMPUTER
SOFTWARE.—Com-
puter software shall be used in support of a
performance-based 
method 
certification
under clause (i). Such software shall meet
procedures and methods for calculating en-
ergy and cost savings in regulations pro-
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mulgated by the Secretary of Energy. Such
regulations on the specifications for software
and verification protocols shall be based on
the 2001 California Residential Alternative
Calculation Method Approval Manual.
‘‘(2) PROVIDER.—A certification described in
subsection (b)(1)(B) shall be provided by—
‘‘(A) in the case of a component-based meth-
od, a local building regulatory authority, a util-
ity, a manufactured home production inspection
primary inspection agency (IPIA), or a home
energy rating organization, or
‘‘(B) in the case of a performance-based
method, an individual recognized by an organi-
zation designated by the Secretary for such pur-
poses.
‘‘(3) FORM.—
‘‘(A) IN
GENERAL.—A certification de-
scribed in subsection (b)(1)(B) shall be made in
writing in a manner that specifies in readily
verifiable fashion the energy efficient building
envelope components and energy efficient heating
or cooling equipment installed and their respec-
tive rated energy efficiency performance, and in
the case of a performance-based method, accom-
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panied by a written analysis documenting the
proper application of a permissible energy per-
formance calculation method to the specific cir-
cumstances of such qualifying new home.
‘‘(B) FORM PROVIDED TO BUYER.—A form
documenting the energy efficient building enve-
lope components and energy efficient heating or
cooling equipment installed and their rated en-
ergy efficiency performance shall be provided to
the buyer of the qualifying new home. The form
shall include labeled R-value for insulation prod-
ucts, NFRC-labeled U-factor and Solar Heat
Gain Coefficient for windows, skylights, and
doors, labeled AFUE ratings for furnaces and
boilers, labeled HSPF ratings for electric heat
pumps, and labeled SEER ratings for air condi-
tioners.
‘‘(C) RATINGS LABEL AFFIXED IN DWELL-
ING.—A permanent label documenting the rat-
ings in subparagraph (B) shall be affixed to the
front of the electrical distribution panel of the
qualifying new home, or shall be otherwise per-
manently displayed in a readily inspectable lo-
cation in such home.
‘‘(4) REGULATIONS.—
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‘‘(A) IN GENERAL.—In prescribing regula-
tions under this subsection for performance-based
certification methods, the Secretary, after exam-
ining the requirements for energy consultants
and home energy ratings providers specified by
the Mortgage Industry National Accreditation
Procedures for Home Energy Rating Systems,
shall prescribe procedures for calculating annual
energy usage and cost reductions for heating and
cooling and for the reporting of the results. Such
regulations shall—
‘‘(i) provide that any calculation pro-
cedures be fuel neutral such that the same
energy efficiency measures allow a quali-
fying new home to be eligible for the credit
under this section regardless of whether such
home uses 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 homebuyer.
‘‘(B) PROVIDERS.—For purposes of para-
graph (2)(B), the Secretary shall establish re-
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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.
‘‘(e) TERMINATION.—Subsection (a) shall apply to
qualifying new homes purchased during the period begin-
ning on the date of the enactment of this section 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), as amended by this Act, is amended
by striking ‘‘plus’’ at the end of paragraph (16), by striking
the period at the end of paragraph (17) and inserting ‘‘,
plus’’, and by adding at the end the following new para-
graph:
‘‘(18) the new energy efficient home credit deter-
mined under section 45G(a).’’.
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C (re-
lating to certain expenses for which credits are allowable)
is amended by adding at the end the following new sub-
section:
‘‘(d) NEW ENERGY EFFICIENT HOME EXPENSES.—No
deduction shall be allowed for that portion of expenses for
a qualifying new home otherwise allowable as a deduction
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for the taxable year which is equal to the amount of the
credit determined for such taxable year under section
45G(a).’’.
(d) LIMITATION ON CARRYBACK.—Subsection (d) of
section 39, as amended by this Act, is amended by adding
at the end the following new paragraph:
‘‘(13) 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 determined
under section 45G may be carried back to any taxable
year ending on or before the date of the enactment of
section 45G.’’.
(e) DEDUCTION
FOR CERTAIN UNUSED BUSINESS
CREDITS.—Subsection (c) of section 196, as amended by
this Act, is amended by striking ‘‘and’’ at the end of para-
graph (10), by striking the period at the end of paragraph
(11) and inserting ‘‘, and’’, and by adding after paragraph
(11) the following new paragraph:
‘‘(12) the new energy efficient home credit deter-
mined under section 45G(a).’’.
(f) CLERICAL AMENDMENT.—The table of sections for
subpart D of part IV of subchapter A of chapter 1, as
amended by this Act, is amended by adding at the end the
following new item:
‘‘Sec. 45G. New energy efficient home credit.’’.
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(g) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years ending after the date
of the enactment of this Act.
SEC. 2102. CREDIT FOR ENERGY EFFICIENT APPLIANCES.
(a) IN GENERAL.—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. 45H. ENERGY EFFICIENT APPLIANCE CREDIT.
‘‘(a) GENERAL RULE.—For purposes of section 38, the
energy efficient appliance credit determined under this sec-
tion for the taxable year is an amount equal to the applica-
ble amount determined under subsection (b) with respect
to the eligible production of qualified energy efficient appli-
ances produced by the taxpayer during the calendar year
ending with or within the taxable year.
‘‘(b) APPLICABLE AMOUNT; ELIGIBLE PRODUCTION.—
For purposes of subsection (a)—
‘‘(1) 
APPLICABLE
AMOUNT.—The 
applicable
amount is—
‘‘(A) $50, in the case of—
‘‘(i) a clothes washer which is manu-
factured with at least a 1.26 MEF, or
‘‘(ii) a refrigerator which consumes at
least 10 percent less kWh per year than the
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energy conservation standards for refrig-
erators promulgated by the Department of
Energy effective July 1, 2001, and
‘‘(B) $100, in the case of—
‘‘(i) a clothes washer which is manu-
factured with at least a 1.42 MEF (at least
1.5 MEF for washers produced after 2004),
or
‘‘(ii) a refrigerator which consumes at
least 15 percent less kWh per year than
such energy conservation standards.
‘‘(2) ELIGIBLE PRODUCTION.—
‘‘(A) IN GENERAL.—The eligible production
of each category of qualified energy efficient ap-
pliances is the excess of—
‘‘(i) the number of appliances in such
category which are produced by the tax-
payer during such calendar year, over
‘‘(ii) the average number of appliances
in such category which were produced by
the taxpayer during calendar years 1999,
2000, and 2001.
‘‘(B) CATEGORIES.—For purposes of sub-
paragraph (A), the categories are—