I
107TH CONGRESS
1ST SESSION
H. R. 2179
To amend the Internal Revenue Code of 1986 to allow a refundable credit
for expenditures for renewable energy property.
IN THE HOUSE OF REPRESENTATIVES
JUNE 14, 2001
Mrs. DAVIS of California 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 allow a
refundable credit for expenditures for renewable energy
property.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Renewable Energy Act
for Credit on Taxes’’.
SEC. 2. REFUNDABLE CREDIT FOR RENEWABLE ENERGY
PROPERTY.
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable credits) is amended by redes-
ignating section 35 as section 36 and by inserting after
section 34 the following new section:
‘‘SEC. 35. RENEWABLE ENERGY PROPERTY.
‘‘(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 35 percent of the expenditures for renewable en-
ergy property made by the taxpayer during the taxable
year.
‘‘(b) LIMITATION.—
‘‘(1) MAXIMUM
CREDIT.—The credit allowed
under subsection (a) shall not exceed the lesser of—
‘‘(A) $6,000 ($50,000 in the case of re-
newable energy property used for nonresidential
business purposes) for each system of renewable
energy property, or
‘‘(B) $4.50 per watt of rated system elec-
tricity output or equivalent.
‘‘(2) LOCATION OF STRUCTURE.—No expendi-
ture may be taken into account under this section
unless such expenditure is made by the taxpayer for
property installed on or in connection with a struc-
ture which is located in the United States.
ers of such property and which includes in-
formation relating to one year of reliable
operation of such property at a site with
average annual wind speeds of at least 12
miles per hour, and
‘‘(D) fuel cell property shall be the output
certified as meeting the requirements specified
by the American Gas Association in document
entitled ‘AGA Requirements for Fuel Cell
Power Plants’, No. 8–90.
The Secretary shall determine who makes the certifi-
cations for purposes of subparagraphs (C)(i) and
(D).
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) RENEWABLE
ENERGY
PROPERTY.—The
term ‘renewable energy property’ means property
which is—
‘‘(A) qualified solar water heating prop-
erty,
‘‘(B) qualified photovoltaic property,
‘‘(C) qualified wind energy property, or
‘‘(D) qualified fuel cell property.
‘‘(2) QUALIFIED SOLAR WATER HEATING PROP-
ERTY.—The term ‘qualified solar water heating
property’ means property that uses solar energy to
heat water for use in a structure with respect to
which a majority of the energy is derived from the
sun.
‘‘(3) QUALIFIED PHOTOVOLTAIC PROPERTY.—
The term ‘qualified photovoltaic property’ means
property that uses solar energy to generate elec-
tricity for use in a structure.
‘‘(4) SOLAR PANELS.—No expenditure relating
to a solar panel or other property installed as a roof
(or portion thereof) shall fail to be treated as prop-
erty described in paragraph (2) or (3) solely because
it constitutes a structural component of the struc-
ture on which it is installed.
‘‘(5) QUALIFIED
WIND
ENERGY
PROPERTY.—
The term ‘qualified wind energy property’ means
property which uses wind energy to generate elec-
tricity for use in a structure.
‘‘(6) QUALIFIED FUEL CELL PROPERTY.—The
term ‘qualified fuel cell property’ means property
which uses an electrochemical process to generate
electricity for use in a structure.
‘‘(7) LABOR
COSTS.—Expenditures for labor
costs properly allocable to the onsite preparation, as-
sembly, or original installation of the property de-
scribed in paragraph (2), (3), (5), or (6) and for
piping or wiring to interconnect such property to the
dwelling unit shall be taken into account for pur-
poses of this section.
‘‘(d) SPECIAL
RULES.—For purposes of this
section—
‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OC-
CUPANCY.—In the case of any structure which is
jointly occupied and used during any calendar year
by 2 or more persons the following shall apply:
‘‘(A) The amount of the credit allowable
under subsection (a) by reason of expenditures
(as the case may be) made during such cal-
endar year by any of such persons with respect
to such structure shall be determined by treat-
ing all of such persons as 1 taxpayer whose tax-
able year is such calendar year.
‘‘(B) There shall be allowable with respect
to such expenditures to each of such person, 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 de-
termined under subparagraph (A) as the
amount of such expenditures made by such per-
son during such calendar year bears to the ag-
gregate of such expenditures made by all of
such persons 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
defined in such section), such individual shall be
treated as having made his tenant-stockholder’s pro-
portionate share (as defined in section 216(b)(3)) of
any expenditures of such corporation.
‘‘(3) 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 made his proportionate share
of any expenditures of 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.
‘‘(4) JOINT OWNERSHIP OF ITEMS OF RENEW-
ABLE ENERGY PROPERTY.—
‘‘(A) IN GENERAL.—Any expenditure oth-
erwise qualifying as an expenditure described in
paragraph (2), (3), (5), or (6) of subsection (c)
shall not be treated as failing to so qualify
merely because such expenditure was made with
respect to 2 or more structures.
‘‘(B) LIMITS
APPLIED
SEPARATELY.—In
the case of any expenditure described in sub-
paragraph (A), the amount of the credit allow-
able under subsection (a) shall (subject to para-
graph (1)) be computed separately with respect
to the amount of the expenditure made for each
structure.
‘‘(5) ALLOCATION IN CERTAIN CASES.—If 80
percent or more of the use of an item is for residen-
tial purposes, then the item shall be treated as used
only for residential purposes.
‘‘(6) WHEN EXPENDITURE MADE; AMOUNT OF
EXPENDITURE.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), an expenditure with respect
to an item shall be treated as made when the
original installation of the item is completed.
‘‘(B) EXPENDITURES PART OF BUILDING
CONSTRUCTION.—In the case of an expenditure
in connection with the construction or recon-
struction of a structure, such expenditure shall
be treated as made when the original use of the
constructed or reconstructed structure by the
taxpayer begins.
‘‘(C) AMOUNT.—The amount of any ex-
penditure shall be the cost thereof.
‘‘(7) REDUCTION OF CREDIT FOR GRANTS, TAX-
EXEMPT BONDS, AND SUBSIDIZED ENERGY FINANC-
ING.—The rules of section 29(b)(3) shall apply for
purposes of this section.
‘‘(8) DENIAL OF DOUBLE BENEFIT.—No credit
shall be allowed under subsection (a) for any ex-
pense for which a deduction or credit is allowed
under any other provision of this chapter.
‘‘(e) BASIS ADJUSTMENTS.—For purposes of this
subtitle, if a credit is allowed under this section for any
expenditure 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.