[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3138 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 3138

To amend the Internal Revenue Code of 1986 to allow a refundable credit 
            for expenditures for renewable energy property.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 18, 2003

   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 Representatives 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 subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. RENEWABLE ENERGY PROPERTY.

    ``(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 35 percent of the expenditures 
for renewable energy 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 renewable 
                energy property used for nonresidential business 
                purposes) for each system of renewable energy property, 
                or
                    ``(B) $4.50 per watt of rated system electricity 
                output or equivalent.
            ``(2) Location of structure.--No expenditure 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 structure which is located in the United States.
            ``(3) Rating system electricity output.--For purposes of 
        paragraph (1)(B), the rated system electricity output or 
        equivalent for--
                    ``(A) solar water heating property shall be the 
                output determined by the Secretary on the basis of 
                evidence acceptable to the Secretary which is submitted 
                by manufacturers of such property and which includes 
                information relating to one year of reliable operation 
                of such property,
                    ``(B) photovoltaic property shall be the output 
                certified by a nationally recognized testing laboratory 
                as meeting the requirements of the Underwriters 
                Laboratory Standard 1703,
                    ``(C) wind energy property shall be the output--
                            ``(i) certified as meeting the requirements 
                        of a small wind turbine-specific safety or 
                        performance standard adopted by a national or 
                        international standards setting body, including 
                        International Electric Code 61400-2, or
                            ``(ii) determined by the Secretary on the 
                        basis of evidence acceptable to the Secretary 
                        which is submitted by manufacturers of such 
                        property and which includes information 
                        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 certifications 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 property,
                    ``(B) qualified photovoltaic property,
                    ``(C) qualified wind energy property, or
                    ``(D) qualified fuel cell property.
            ``(2) Qualified solar water heating property.--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 electricity 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 property described in 
        paragraph (2) or (3) solely because it constitutes a structural 
        component of the structure on which it is installed.
            ``(5) Qualified wind energy property.--The term `qualified 
        wind energy property' means property which uses wind energy to 
        generate electricity 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, assembly, or original 
        installation of the property described 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 
        purposes of this section.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Dollar amounts in case of joint occupancy.--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 calendar year by any of such 
                persons with respect to such structure shall be 
                determined by treating all of such persons as 1 
                taxpayer whose taxable 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 determined under subparagraph (A) 
                as the amount of such expenditures made by such person 
                during such calendar year bears to the aggregate 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 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 made his tenant-
        stockholder's proportionate share (as defined in section 
        216(b)(3)) of any expenditures of such corporation.
            ``(3) 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 made his 
                proportionate share of any expenditures of 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.
            ``(4) Joint ownership of items of renewable energy 
        property.--
                    ``(A) In general.--Any expenditure otherwise 
                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 subparagraph (A), the 
                amount of the credit allowable under subsection (a) 
                shall (subject to paragraph (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 residential 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 reconstruction 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 expenditure shall 
                be the cost thereof.
            ``(7) Reduction of credit for grants, tax-exempt bonds, and 
        subsidized energy financing.--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 expense 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 subsection) result from such expenditure shall be reduced 
by the amount of the credit so allowed.
    ``(f) Termination.--The credit allowed under this section shall not 
apply to taxable years beginning after December 31, 2008.''.
    (b) Conforming and Technical Amendments.--
            (1) Subsection (a) of section 1016 of such Code is amended 
        by striking ``and'' at the end of paragraph (27), by striking 
        the period at the end of paragraph (28) and inserting ``; 
        and'', and by adding at the end the following new paragraph:
            ``(29) to the extent provided in section 36(e), in the case 
        of amounts with respect to which a credit has been allowed 
        under section 36.''
            (2) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``or from section 36 of 
        such Code'' before the period at the end.
            (3) The table of sections for such subpart C is amended by 
        striking the item relating to section 36 and inserting the 
        following new items:

                              ``Sec. 36. Renewable energy property.
                              ``Sec. 37. Overpayment of taxes.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2003.
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