†
1067
HR 6 EAS
‘‘(I) $175 for a refrigerator which
is manufactured in calendar year
2005, 2006, or 2007, and
‘‘(II) $150 for a refrigerator
which is manufactured in calendar
year 2008, 2009, or 2010.
‘‘(2) ENERGY SAVINGS AMOUNT.—For purposes
of paragraph (1)(A)—
‘‘(A) IN
GENERAL.—The energy savings
amount is the lesser of—
‘‘(i) the product of—
‘‘(I) $3, and
‘‘(II) 100 multiplied by the energy
savings percentage, or
‘‘(ii) $100.
‘‘(B) ENERGY SAVINGS PERCENTAGE.—For
purposes of subparagraph (A), the energy savings
percentage is the ratio of—
‘‘(i) the EF required by the Energy
Star program for dishwashers in 2007
minus the EF required by the Energy Star
program for dishwashers in 2005, to
‘‘(ii) the EF required by the Energy
Star program for dishwashers in 2007.
†
1068
HR 6 EAS
‘‘(3) ENERGY AND WATER SAVINGS AMOUNT.—
For purposes of paragraph (1)(B)(iii)—
‘‘(A) IN GENERAL.—The energy and water
savings amount is the lesser of—
‘‘(i) the product of—
‘‘(I) $10, and
‘‘(II) 100 multiplied by the energy
and water savings percentage, or
‘‘(ii) $200.
‘‘(B) ENERGY
AND
WATER
SAVINGS
PER-
CENTAGE.—For purposes of subparagraph (A),
the energy and water savings percentage is the
average of the MEF savings percentage and the
WF savings percentage.
‘‘(C) MEF 
SAVINGS
PERCENTAGE.—For
purposes of this paragraph, the MEF savings
percentage is the ratio of—
‘‘(i) the MEF required by the Energy
Star program for clothes washers in 2010
minus the MEF required by the Energy
Star program for clothes washers in 2007,
to
‘‘(ii) the MEF required by the Energy
Star program for clothes washers in 2010.
†
1069
HR 6 EAS
‘‘(D) WF SAVINGS PERCENTAGE.—For pur-
poses of this paragraph, the WF savings percent-
age is the ratio of—
‘‘(i) the WF required by the Energy
Star program for clothes washers in 2007
minus the WF required by the Energy Star
program for clothes washers in 2010, to
‘‘(ii) the WF required by the Energy
Star program for clothes washers in 2007.
‘‘(c) ELIGIBLE PRODUCTION.—
‘‘(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), the eligible production in a cal-
endar year with respect to each type of energy effi-
cient appliance is the excess of—
‘‘(A) the number of appliances of such type
which are produced by the taxpayer in the
United States during such calendar year, over
‘‘(B) the average number of appliances of
such type which were produced by the taxpayer
(or any predecessor) in the United States during
the preceding 3-calendar year period.
‘‘(2) SPECIAL RULE FOR REFRIGERATORS.—The
eligible production in a calendar year with respect to
each type of refrigerator described in subsection
(b)(1)(C) is the excess of—
†
1070
HR 6 EAS
‘‘(A) the number of appliances of such type
which are produced by the taxpayer in the
United States during such calendar year, over
‘‘(B) 110 percent of the average number of
appliances of such type which were produced by
the taxpayer (or any predecessor) in the United
States during the preceding 3-calendar year pe-
riod.
‘‘(3) SPECIAL RULE FOR 2005 PRODUCTION.—For
purposes of determining eligible production for cal-
endar year 2005—
‘‘(A) only production after the date of en-
actment of this section shall be taken into ac-
count under paragraphs (1)(A) and (2)(A), and
‘‘(B) the amount taken into account under
paragraphs (1)(B) and (2)(B) shall be an
amount which bears the same ratio to the
amount which would (but for this paragraph) be
taken into account under such paragraph as—
‘‘(i) the number of days in calendar
year 2005 after the date of enactment of this
section, bears to
‘‘(ii) 365.
†
1071
HR 6 EAS
‘‘(d) TYPES OF ENERGY EFFICIENT APPLIANCE.—For
purposes of this section, the types of energy efficient appli-
ances are—
‘‘(1) 
dishwashers 
described 
in 
subsection
(b)(1)(A),
‘‘(2) clothes washers described in subsection
(b)(1)(B)(i),
‘‘(3) clothes washers described in subsection
(b)(1)(B)(ii),
‘‘(4) clothes washers described in subsection
(b)(1)(B)(iii),
‘‘(5) 
refrigerators 
described 
in 
subsection
(b)(1)(C)(i),
‘‘(6) 
refrigerators 
described 
in 
subsection
(b)(1)(C)(ii)(I),
‘‘(7) 
refrigerators 
described 
in 
subsection
(b)(1)(C)(ii)(II),
‘‘(8) 
refrigerators 
described 
in 
subsection
(b)(1)(C)(iii)(I), and
‘‘(9) 
refrigerators 
described 
in 
subsection
(b)(1)(C)(iii)(II).
‘‘(e) LIMITATIONS.—
‘‘(1) AGGREGATE CREDIT AMOUNT ALLOWED.—
The aggregate amount of credit allowed under sub-
section (a) with respect to a taxpayer for any taxable
†
1072
HR 6 EAS
year shall not exceed $75,000,000 reduced by the
amount of the credit allowed under subsection (a) to
the taxpayer (or any predecessor) for all prior taxable
years.
‘‘(2) AMOUNT
ALLOWED
FOR
CERTAIN
APPLI-
ANCES.—
‘‘(A) IN GENERAL.—In the case of appli-
ances described in subparagraph (C), the aggre-
gate amount of the credit allowed under sub-
section (a) with respect to a taxpayer for any
taxable year shall not exceed $20,000,000 re-
duced by the amount of the credit allowed under
subsection (a) to the taxpayer (or any prede-
cessor) for all prior taxable years with respect to
such appliances.
‘‘(B) ELECTION TO INCREASE ALLOWABLE
CREDIT.—In the case of any taxpayer who makes
an election under this subparagraph—
‘‘(i) subparagraph (A) shall be applied
by 
substituting 
‘$25,000,000’ 
for
‘$20,000,000’, and
‘‘(ii) the aggregate amount of the credit
allowed under subsection (a) with respect to
such taxpayer for any taxable year for ap-
pliances described in subparagraph (C) and
†
1073
HR 6 EAS
the additional appliances described in sub-
paragraph (D) shall not exceed $50,000,000
reduced by the amount of the credit allowed
under subsection (a) to the taxpayer (or any
predecessor) for all prior taxable years with
respect to such appliances.
‘‘(C) APPLIANCES DESCRIBED.—The appli-
ances described in this subparagraph are—
‘‘(i) clothes washers described in sub-
section (b)(1)(B)(i), and
‘‘(ii) refrigerators described in sub-
section (b)(1)(C)(i).
‘‘(D) ADDITIONAL APPLIANCES.—The addi-
tional appliances described in this subparagraph
are—
‘‘(i) refrigerators described in sub-
section (b)(1)(C)(ii)(I), and
‘‘(ii) refrigerators described in sub-
section (b)(1)(C)(ii)(II).
‘‘(3) LIMITATION BASED ON GROSS RECEIPTS.—
The credit allowed under subsection (a) with respect
to a taxpayer for the taxable year shall not exceed an
amount equal to 2 percent of the average annual gross
receipts of the taxpayer for the 3 taxable years pre-
†
1074
HR 6 EAS
ceding the taxable year in which the credit is deter-
mined.
‘‘(4) GROSS
RECEIPTS.—For purposes of this
subsection, the rules of paragraphs (2) and (3) of sec-
tion 448(c) shall apply.
‘‘(f) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED
ENERGY
EFFICIENT
APPLI-
ANCE.—The term ‘qualified energy efficient appliance’
means—
‘‘(A) any dishwasher described in subsection
(b)(1)(A),
‘‘(B) any clothes washer described in sub-
section (b)(1)(B), and
‘‘(C) any refrigerator described in sub-
section (b)(1)(C).
‘‘(2) 
DISHWASHER.—The 
term 
‘dishwasher’
means a residential dishwasher subject to the energy
conservation standards established by the Department
of Energy.
‘‘(3) CLOTHES
WASHER.—The term ‘clothes
washer’ means a residential model clothes washer, in-
cluding a residential style coin operated washer.
‘‘(4) REFRIGERATOR.—The term ‘refrigerator’
means a residential model automatic defrost refrig-
†
1075
HR 6 EAS
erator-freezer which has an internal volume of at least
16.5 cubic feet.
‘‘(5) MEF.—The term ‘MEF’ means the modi-
fied energy factor established by the Department of
Energy for compliance with the Federal energy con-
servation standards.
‘‘(6) EF.—The term ‘EF’ means the energy fac-
tor established by the Department of Energy for com-
pliance with the Federal energy conservation stand-
ards.
‘‘(7) WF.—The term ‘WF’ means Water Factor
(as determined by the Secretary of Energy).
‘‘(8) PRODUCED.—The term ‘produced’ includes
manufactured.
‘‘(9) 2001 ENERGY CONSERVATION STANDARD.—
The term ‘2001 energy conservation standard’ means
the energy conservation standards promulgated by the
Department of Energy and effective July 1, 2001.
‘‘(g) SPECIAL RULES.—For purposes of this section—
‘‘(1) IN GENERAL.—Rules similar to the rules of
subsections (c), (d), and (e) of section 52 shall apply.
‘‘(2) CONTROLLED GROUP.—
‘‘(A) IN GENERAL.—All persons treated as a
single employer under subsection (a) or (b) of
†
1076
HR 6 EAS
section 52 or subsection (m) or (o) of section 414
shall be treated as a single producer.
‘‘(B) INCLUSION
OF
FOREIGN
CORPORA-
TIONS.—For purposes of subparagraph (A), in
applying subsections (a) and (b) of section 52 to
this section, section 1563 shall be applied with-
out regard to subsection (b)(2)(C) thereof.
‘‘(3) VERIFICATION.—No amount shall be al-
lowed as a credit under subsection (a) with respect to
which the taxpayer has not submitted such informa-
tion or certification as the Secretary, in consultation
with the Secretary of Energy, determines necessary.’’.
(b) CONFORMING AMENDMENT.—Section 38(b) (relat-
ing to general business credit), as amended by this Act, is
amended by striking ‘‘plus’’ at the end of paragraph (20),
by striking the period at the end of paragraph (21) and
inserting ‘‘, plus’’, and by adding at the end the following
new paragraph:
‘‘(22) the energy efficient appliance credit deter-
mined under section 45L(a).’’.
(c) 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. 45L. Energy efficient appliance credit’’.
†
1077
HR 6 EAS
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to appliances produced after the date
of the enactment of this Act, in taxable years ending after
such date.
SEC. 1527. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT
PROPERTY.
(a) IN GENERAL.—Subpart A of part IV of subchapter
A of chapter 1 (relating to nonrefundable personal credits),
as amended by this Act, is amended by inserting after sec-
tion 25C the following new section:
‘‘SEC. 25D. RESIDENTIAL ENERGY EFFICIENT PROPERTY.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an indi-
vidual, there shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount
equal to the sum of—
‘‘(1) 30 percent of the qualified photovoltaic
property expenditures made by the taxpayer during
such year,
‘‘(2) 30 percent of the qualified solar water heat-
ing property expenditures made by the taxpayer dur-
ing such year,
‘‘(3) 30 percent of the qualified fuel cell property
expenditures made by the taxpayer during such year,
‘‘(b) LIMITATIONS.—
†
1078
HR 6 EAS
‘‘(1) MAXIMUM
CREDIT.—The credit allowed
under subsection (a) for any taxable year shall not
exceed—
‘‘(A) $2,000 with respect to any qualified
solar water heating property expenditures,
‘‘(B) $2,000 with respect to any qualified
photovoltaic property expenditures, and
‘‘(C) $500 with respect to each half kilowatt
of capacity of qualified fuel cell property (as de-
fined in section 48(d)(1)) for which qualified fuel
cell property expenditures are made,
‘‘(2) CERTIFICATIONS.—No credit shall be al-
lowed under this section for an item of property
unless—
‘‘(A) in the case of solar water heating
property, such property is certified for perform-
ance by the non-profit Solar Rating Certifi-
cation Corporation or a comparable entity en-
dorsed by the government of the State in which
such property is installed, and
‘‘(B) in the case of a photovoltaic property
or a fuel cell property such property meets ap-
propriate fire and electric code requirements.
‘‘(c) CARRYFORWARD
OF UNUSED CREDIT.—If the
credit allowable under subsection (a) exceeds the limitation
†
1079
HR 6 EAS
imposed by section 26(a) for such taxable year reduced by
the sum of the credits allowable under this subpart (other
than this section), such excess shall be carried to the suc-
ceeding taxable year and added to the credit allowable
under subsection (a) for such succeeding taxable year.
‘‘(d) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED SOLAR WATER HEATING PROP-
ERTY EXPENDITURE.—The term ‘qualified solar water
heating property expenditure’ means an expenditure
for property to heat water for use in a dwelling unit
located in the United States and used as a residence
by the taxpayer if at least half of the energy used by
such property for such purpose is derived from the
sun.
‘‘(2) QUALIFIED PHOTOVOLTAIC PROPERTY EX-
PENDITURE.—The term ‘qualified photovoltaic prop-
erty expenditure’ means an expenditure for property
which uses solar energy to generate electricity for use
in a dwelling unit located in the United States and
used as a residence by the taxpayer.
‘‘(3) 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 property de-
scribed in paragraph (1) or (2) solely because it con-
†
1080
HR 6 EAS
stitutes a structural component of the structure on
which it is installed.
‘‘(4) QUALIFIED FUEL CELL PROPERTY EXPENDI-
TURE.—The term ‘qualified fuel cell property expend-
iture’ means an expenditure for qualified fuel cell
property (as defined in section 48(d)(1)) installed on
or in connection with a dwelling unit located in the
United States and used as a principal residence
(within the meaning of section 121) by the taxpayer.
‘‘(5) LABOR
COSTS.—Expenditures for labor
costs properly allocable to the onsite preparation, as-
sembly, or original installation of the property de-
scribed in paragraph (1), (2), (4), (5), or (6) and for
piping or wiring to interconnect such property to the
dwelling unit shall be taken into account for purposes
of this section.
‘‘(6) SWIMMING POOLS, ETC., USED AS STORAGE
MEDIUM.—Expenditures which are properly allocable
to a swimming pool, hot tub, or any other energy
storage medium which has a function other than the
function of such storage shall not be taken into ac-
count for purposes of this section.
‘‘(e) SPECIAL RULES.—For purposes of this section—
‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OCCU-
PANCY.—In the case of any dwelling unit which is
†
1081
HR 6 EAS
jointly occupied and used during any calendar year
as a residence by 2 or more individuals the following
rules shall apply:
‘‘(A) The amount of the credit allowable,
under subsection (a) by reason of expenditures
(as the case may be) made during such calendar
year by any of such individuals with respect to
such dwelling unit shall be determined by treat-
ing all of such individuals 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
†
1082
HR 6 EAS
as having made his tenant-stockholder’s proportionate
share (as defined in section 216(b)(3)) of any expend-
itures 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 the individual owns, such indi-
vidual shall be treated as having made the indi-
vidual’s proportionate share of any expenditures
of 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) ALLOCATION
IN
CERTAIN
CASES.—If less
than 80 percent of the use of an item is for nonbusi-
ness purposes, only that portion of the expenditures
for such item which is properly allocable to use for
nonbusiness purposes shall be taken into account.
†
1083
HR 6 EAS
‘‘(5) 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 con-
structed or reconstructed structure by the tax-
payer begins.
‘‘(C) AMOUNT.—The amount of any expend-
iture shall be the cost thereof.
‘‘(6) PROPERTY FINANCED BY SUBSIDIZED EN-
ERGY FINANCING.—For purposes of determining the
amount of expenditures made by any individual with
respect to any dwelling unit, there shall not be taken
into account expenditures which are made from sub-
sidized energy financing (as defined in section
48(a)(4)(C)).
‘‘(f) BASIS ADJUSTMENTS.—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