SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fuel Energy Affordability and 
Conservation Act''.

            TITLE I--DRAWDOWN OF STRATEGIC PETROLEUM RESERVE

SEC. 101. FINDINGS.

    Congress finds that--
            (1) a sharp, sustained increase in the price of crude oil 
        would negatively affect the overall economic well-being of the 
        United States;
            (2) the United States currently imports roughly 55 percent 
        of its oil;
            (3) the oil market is often greatly influenced by 
        nonmarket-based supply manipulations, including price fixing 
        and production quotas; and
            (4) heating oil price increases disproportionately harm the 
        poor and the elderly.

SEC. 102. DRAWDOWN OF STRATEGIC PETROLEUM RESERVE.

    Section 161(d) of the Energy Policy and Conservation Act (42 U.S.C. 
6241(d)) is amended by adding at the end the following:
            ``(3) Reduction in supply caused by anticompetitive 
        conduct.--
                    ``(A) In general.--For the purposes of this 
                section, in addition to the circumstances set forth in 
                section 3(8) and in paragraph (2) of this subsection, a 
                severe energy supply interruption shall be deemed to 
                exist if the President determines that--
                            ``(i) there is a significant reduction in 
                        supply that--
                                    ``(I) is of significant scope and 
                                duration; and
                                    ``(II) has caused a significant 
                                increase in the price of petroleum 
                                products;
                            ``(ii) the increase in price is likely to 
                        cause a significant adverse impact on regional 
                        economies; and
                            ``(iii) a substantial cause of the 
                        reduction in supply is either--
                                    ``(I) the anticompetitive conduct 
                                of 1 or more foreign countries or 
                                international entities; or
                                    ``(II) a reduction in refinery 
                                utilization, as reported by the Energy 
                                Information Administration.
                    ``(B) Deposit and use of proceeds.--Proceeds from 
                the sale of petroleum drawn down pursuant to a 
                Presidential determination under subparagraph (A) 
                shall--
                            ``(i) be deposited in the SPR Petroleum 
                        Account; and
                            ``(ii) be used only for the purposes 
                        specified in section 167.
                    ``(C) Replacement arrangements.--When the Secretary 
                executes a drawdown pursuant to a Presidential 
                determination under subparagraph (A), the Secretary may 
                enter into an arrangement that provides for the 
                replacement of the petroleum products withdrawn from 
                the Strategic Petroleum Reserve.''.

SEC. 103. REPORTING AND CONSULTATION REQUIREMENTS.

    If the price of a barrel of crude oil exceeds $25 (in constant 1999 
United States dollars) for a period greater than 14 days, the 
President, through the Secretary of Energy, shall, not later than 30 
days after the end of the 14-day period, submit to the Committee on 
Energy and Natural Resources of the Senate and the Committee on 
Commerce of the House of Representatives a report that--
            (1) states the results of a comprehensive review of the 
        causes and potential consequences of the price increase;
            (2) provides an estimate of the likely duration of the 
        price increase, based on analyses and forecasts of the Energy 
        Information Administration;
            (3) provides an analysis of the effects of the price 
        increase on the cost of home heating oil; and
            (4) states whether, and provides a specific rationale for 
        why, the President does or does not support the drawdown and 
        distribution of a specified amount of oil from the Strategic 
        Petroleum Reserve.

TITLE II--CREDITS FOR ENERGY EFFICIENCY IMPROVEMENTS BY HOMEOWNERS AND 
                            SMALL BUSINESSES

SEC. 201. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25A the 
following new section:

``SEC. 25B. ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

    ``(a) Allowance of Credit.--In the case of an individual, 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 exceed $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 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 subsection (a) to the taxpayer with 
        respect to the dwelling for all prior taxable years.
    ``(c) Carryforward of Unused Credit.--If the credit allowable under 
subsection (a) exceeds the limitation imposed by section 26(a) for such 
taxable year reduced by the sum of the credits allowable under subpart 
A of part IV of subchapter A (other than this section), such excess 
shall be carried to the succeeding taxable year and added to the credit 
allowable under subsection (a) for such taxable year.
    ``(d) Qualified Energy Efficiency Improvements.--For purposes of 
this section, the term `qualified energy efficiency improvements' means 
any energy efficient building envelope component, and any energy 
efficient heating, cooling, or water heating appliance, the 
installation of which, by itself or in combination with other such 
components or appliances, is certified to improve the annual energy 
performance of the existing home by at least 30 percent, if--
            ``(1) such component or appliance is installed in or on a 
        dwelling--
                    ``(A) located in the United States, and
                    ``(B) owned and used by the taxpayer as the 
                taxpayer's principal residence (within the meaning of 
                section 121),
            ``(2) the original use of such component or appliance 
        commences with the taxpayer, and
            ``(3) such component or appliance reasonably can be 
        expected to remain in use for at least 5 years.
Such certification shall be made by the contractor who installed such 
improvements, a local building regulatory authority, or a qualified 
energy consultant (such as a utility or an accredited home energy 
rating system provider).
    ``(e) Special Rules.--
            ``(1) Tenant-stockholder in cooperative housing 
        corporation.--In the case of an individual who is a tenant-
        stockholder (as defined in section 216) in a cooperative 
        housing corporation (as defined in such section), such 
        individual shall be treated as having paid his tenant-
        stockholder's proportionate 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 individual who 
                is a member of a condominium management association 
                with respect to a condominium which he owns, such 
                individual shall be treated as having paid his 
                proportionate share of the cost of qualified energy 
                efficiency improvements made by such association.
                    ``(B) Condominium management association.--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 subparagraph (E) thereof) with 
                respect to a condominium project substantially all of 
                the units of which are used as residences.
    ``(f) Basis Adjustment.--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 subsection) result from such expenditure shall be reduced by 
the amount of the credit so allowed.
    ``(g) Application of Section.--Subsection (a) shall apply to 
qualified energy efficiency improvements installed during the period 
beginning on January 1, 2000, and ending on December 31, 2004.''.
    (b) Conforming Amendments.--
            (1) Subsection (c) of section 23 of such Code is amended by 
        striking ``and section 1400C'' and inserting ``and sections 25B 
        and 1400C''.
            (2) Subparagraph (C) of section 25(e)(1) of such Code is 
        amended by striking ``and 1400C'' and inserting ``, 25B, and 
        1400C''.
            (3) Subsection (d) of section 1400C of such Code is amended 
        by inserting ``and section 25B'' after ``other than this 
        section''.
            (4) Subsection (a) of section 1016 of such Code is amended 
        by striking ``and'' at the end of paragraph (26), by striking 
        the period at the end of paragraph (27) and inserting ``; 
        and'', and by adding at the end the following new paragraph:
            ``(28) to the extent provided in section 25B(f), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25B.''.
            (5) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 25A the following new item:

                              ``Sec. 25B. Energy efficiency 
                                        improvements to existing 
                                        homes.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 1999.

SEC. 202. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS BY SMALL 
              BUSINESSES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by inserting after section 45C the following new 
section:

``SEC. 45D. ENERGY EFFICIENCY IMPROVEMENTS BY SMALL BUSINESSES.

    ``(a) In General.--For purposes of section 38, in the case of an 
eligible small business, the energy efficiency improvement credit 
determined under this section for the taxable year is an amount equal 
to 20 percent of the basis of each qualified energy efficiency 
improvements placed in service during such taxable year.
    ``(b) Limitations.--
            ``(1) Maximum credit.--The credit allowed by this section 
        for the taxable year shall not exceed $2,000.
            ``(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 
                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 small business.--The term `eligible small 
        business' means any person engaged in a trade or business if 
        the average annual gross receipts of such person (or any 
        predecessor) for the 3-taxable-year period ending with such 
        prior taxable year does not exceed $10,000,000. Rules similar 
        to the rules of paragraphs (2) and (3) of section 448(c) shall 
        apply for purposes of the preceding sentence.
            ``(2) Qualified energy efficiency improvements.--The term 
        `qualified energy efficiency improvements' means any energy 
        efficient property the installation of which, by itself or in 
        combination with other such property, is certified to improve 
        the annual energy performance of the structure to which it 
        relates by at least 30 percent, if--
                    ``(A) such property is installed in or on a 
                structure located in the United States,
                    ``(B)(i) the construction, reconstruction, or 
                erection of such property is completed by the taxpayer, 
                or
                    ``(ii) such property which is acquired by the 
                taxpayer if the original use of such property commences 
                with the taxpayer,
                    ``(C) depreciation (or amortization in lieu of 
                depreciation) is allowable with respect to such 
                property, and
                    ``(D) such property reasonably can be expected to 
                remain in use for at least 5 years.
        Such certification shall be made by the contractor who 
        installed such property, a local building regulatory authority, 
        or a qualified energy consultant (such as a utility or an 
        accredited energy rating system provider).
            ``(3) Energy efficient property.--The term `energy 
        efficient property' means--
                    ``(A) any energy efficient building envelope 
                component, and
                    ``(B) any energy efficient heating, cooling, or 
                water heating appliance.
    ``(d) Application of Section.--Subsection (a) shall apply to 
property placed in service during the period beginning on January 1, 
2000, and ending on December 31, 2004.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 of such Code (relating to current year business credit) is 
amended by striking ``plus'' at the end of paragraph (11), by striking 
the period at the end of paragraph (12) and inserting ``, plus'', and 
by adding at the end thereof the following new paragraph:
            ``(13) in the case of an eligible small business (as 
        defined in section 45D(c)), the energy efficiency improvement 
        credit determined under section 45D.''.
    (c) Credit Allowed Against Regular and Minimum Tax.--
            (1) In general.--Subsection (c) of section 38 of such Code 
        (relating to limitation based on amount of tax) is amended by 
        redesignating paragraph (3) as paragraph (4) and by inserting 
after paragraph (2) the following new paragraph:
            ``(3) Special rules for small business energy efficiency 
        improvement credit.--
                    ``(A) In general.--In the case of the energy 
                efficiency improvement credit--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to the credit, 
                        and
                            ``(ii) in applying paragraph (1) to the 
                        credit--
                                    ``(I) subparagraph (A) thereof 
                                shall not apply, and
                                    ``(II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by the credit 
                                allowed under subsection (a) for the 
                                taxable year (other than the energy 
                                efficiency improvement credit).
                    ``(B) energy efficiency improvement credit.--For 
                purposes of this subsection, the term `energy 
                efficiency improvement credit' means the credit 
                allowable under subsection (a) by reason of section 
                45D.''.
            (2) Conforming amendment.--Subclause (II) of section 
        38(c)(2)(A)(ii) of such Code is amended by inserting ``or the 
        energy efficiency improvement credit'' after ``employment 
        credit''.
    (d) Limitation on Carryback.--Subsection (d) of section 39 of such 
Code is amended by adding at the end the following new paragraph:
            ``(9) No carryback of energy efficiency improvement credit 
        before effective date.--No portion of the unused business 
        credit for any taxable year which is attributable to the credit 
        determined under section 45D may be carried back to any taxable 
        year ending before the date of the enactment of section 45D.''.
    (e) Deduction for Certain Unused Business Credits.--Subsection (c) 
of section 196 of such Code is amended by striking ``and'' at the end 
of paragraph (7), by striking the period at the end of paragraph (8) 
and inserting ``, and'', and by adding after paragraph (8) the 
following new paragraph:
            ``(9) the energy efficiency improvement credit determined 
        under section 45D.''.
    (f) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 45C the following new 
item:

                              ``Sec. 45D. Energy efficiency 
                                        improvements by small 
                                        businesses.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.
Output: Mandates that proceeds from sales of petroleum drawn down pursuant to such determinations be: (1) deposited in the SPR Petroleum Account; and (2) used only for specified purposes.
Directs the President to report to certain congressional committees on causes and potential consequences if the price of a barrel of crude oil exceeds $25 for a period greater than 14 days.
Title II: Credits for Energy Efficiency Improvements by Homeowners and Small Businesses
 - Amends the Internal Revenue Code to allow as a tax credit of 20 percent of the expenses (up to $2000) of qualified energy efficiency improvements by: (1) the taxpayer to an existing home; and (2) eligible small businesses to improvements placed in service during the taxable year.