[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1358 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1358

 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 efficient homes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 25, 1999

   Mr. Thomas (for himself, Mr. Rangel, Mr. Herger, Mr. Ramstad, Mr. 
  English, and Mr. Lipinski) 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 efficient homes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Energy Efficient Affordable Home Act 
of 1999''.

SEC. 2. 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) Termination.--Subsection (a) shall apply to qualified energy 
efficiency improvements installed during the period beginning on 
January 1, 1999, and ending on December 31, 2003.''.
    (b) Conforming Amendments.--
            (1) Subsection (c) of section 23 of such Code is amended by 
        inserting ``, section 25B, and section 1400C'' after ``other 
        than this section''.
            (2) Subparagraph (C) of section 25(e)(1) of such Code is 
        amended by striking ``section 23'' and inserting ``sections 23, 
        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, 1998.

SEC. 3. BUSINESS CREDIT FOR CONSTRUCTION OF NEW ENERGY EFFICIENT HOME.

    (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. 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 subsection (a) 
                with respect to the dwelling 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 
                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 `eligible contractor' 
        means the person who constructed the new energy efficient home.
            ``(2) Energy efficient property.--The term `energy 
        efficient property' means any energy efficient building 
        envelope component, and any energy efficient heating, cooling, 
        or water heating 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 substantially 
                completed after December 31, 1998,
                    ``(C) the original use of which is as a principal 
                residence (within the meaning of section 121) which 
                commences with the person who acquires such dwelling 
                from the eligible contractor, and
                    ``(D) the energy efficiency of which is certified 
                to exceed by 30 percent or more the applicable 
                standards for energy efficiency, based upon energy use 
                or building component performance established for 
                comparable dwellings under the 1998 International 
                Energy Conservation Code.
                    ``(4) Construction.--The term `construction' 
                includes reconstruction and rehabilitation.
                    ``(5) Acquire.--The term `acquire' includes 
                purchase and, in the case of reconstruction and 
                rehabilitation, such term includes a binding written 
                contract for such reconstruction or rehabilitation.
    ``(d) Certification.--A certification described in subsection 
(c)(3)(D) with respect to a dwelling shall be made by the eligible 
contractor, a local building regulatory authority, or a qualified 
energy consultant (such as a utility or an accredited home energy 
rating system provider).
    ``(e) 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.
    ``(f) Termination.--Subsection (a) shall apply to dwellings 
purchased during the period beginning on January 1, 1999, and ending on 
December 31, 2003.''.
    (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) the new energy efficient home credit determined 
        under section 45D.''.
    (c) Denial of Double Benefit.--Section 280C of such Code (relating 
to certain expenses for which credits are allowable) is amended by 
adding at the end thereof the following 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 45D.''.
    (d) 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 new energy efficient home credit.--
                    ``(A) In general.--In the case of the new energy 
                efficient home 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 new energy 
                                efficient home credit).
                    ``(B) New energy efficient home credit.--For 
                purposes of this subsection, the term `new energy 
                efficient home 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 
        new energy efficient home credit'' after ``employment credit''.
    (e) 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 new energy efficient 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 45D may be carried back to any taxable 
        year ending before the date of the enactment of section 45D.''.
    (f) 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 new energy efficient home credit determined under 
        section 45D.''.
    (g) 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. New energy efficient home 
                                        credit.''.
    (h) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 1998.
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