[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1397 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 1397

 To amend the Internal Revenue Code of 1986 to allow a credit against 
           income tax for certain energy-efficient property.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 17, 2005

 Mrs. Johnson of Connecticut (for herself, Mr. McNulty, and Mr. Larson 
 of Connecticut) 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 credit against 
           income tax for certain energy-efficient property.

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

SECTION 1. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL CELLS.

    (a) In General.--Section 48(a)(3)(A) of the Internal Revenue Code 
of 1986 (defining energy property) is amended by striking ``or'' at the 
end of clause (i), by adding ``or'' at the end of clause (ii), and by 
inserting after clause (ii) the following new clause:
                            ``(iii) qualified fuel cell property,''.
    (b) Qualified Fuel Cell Property.--Section 48 of such Code 
(relating to energy credit) is amended by adding at the end the 
following new subsection:
    ``(c) Qualified Fuel Cell Property.--For purposes of subsection 
(a)(3)(A)(iii)--
            ``(1) In general.--The term `qualified fuel cell property' 
        means a fuel cell power plant which generates at least 0.5 
        kilowatt of electricity using an electrochemical process.
            ``(2) Limitation.--The energy credit with respect to any 
        qualified fuel cell property shall not exceed an amount equal 
        to $500 for each 0.5 kilowatt of capacity of such property.
            ``(3) Fuel cell power plant.--The term `fuel cell power 
        plant' means an integrated system, comprised of a fuel cell 
        stack assembly and associated balance of plant components, 
        which converts a fuel into electricity using electrochemical 
        means.
            ``(4) Termination.--The term `qualified fuel cell property' 
        shall not include any property placed in service after December 
        31, 2009.''.
    (c) Energy Percentage.--Subparagraph (A) of section 48(a)(2) of 
such Code (relating to energy percentage) is amended to read as 
follows:
                    ``(A) In general.--The energy percentage is--
                            ``(i) in the case of qualified fuel cell 
                        property, 30 percent, and
                            ``(ii) in the case of any other energy 
                        property, 10 percent.''.
    (d) Conforming Amendment.--Section 48(a)(1) of such Code is amended 
by inserting ``except as provided in subsection (c)(2),'' before ``the 
energy''.
    (e) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 2004, under rules similar to the 
rules of section 48(m) of the Internal Revenue Code of 1986 (as in 
effect on the day before the date of the enactment of the Revenue 
Reconciliation Act of 1990).

SEC. 2. CREDIT FOR NONBUSINESS INSTALLATION OF QUALIFIED FUEL CELLS.

    (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 25B the 
following new section:

``SEC. 25C. NONBUSINESS INSTALLATION OF QUALIFIED FUEL CELLS.

    ``(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 the sum of 30 percent of the 
qualified fuel cell property expenditures made by the taxpayer during 
such year.
    ``(b) Limitations.--
            ``(1) Maximum credit.--The credit allowed under subsection 
        (a) shall not exceed $500 for each 0.5 kilowatt of capacity of 
        qualified fuel cell property.
            ``(2) Property standards.--No credit shall be allowed under 
        this section for an item of property unless--
                    ``(A) the original use of such property commences 
                with the taxpayer,
                    ``(B) such property reasonably can be expected to 
                remain in use for at least 5 years,
                    ``(C) such property is installed on or in 
                connection with a dwelling unit located in the United 
                States and used as a residence by the taxpayer,
                    ``(D) such property meets the performance and 
                quality standards (if any) which have been prescribed 
                by the Secretary by regulations (after consultation 
                with the Secretary of Energy), and
                    ``(E) such property meets appropriate fire and 
                electric code requirements.
    ``(c) Qualified Fuel Cell Property Expenditure.--For purposes of 
this section, the term `qualified fuel cell property expenditure' means 
an expenditure for any qualified fuel cell property (as defined in 
section 48(c)(1)).
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Dollar amounts in case of joint occupancy.--In the 
        case of any dwelling unit which is 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 made during 
                such calendar year by any of such individuals with 
                respect to such dwelling unit shall be determined by 
                treating 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 determined under subparagraph (A) 
                as the amount of such expenditures made by such 
                individual during such calendar year bears to the 
                aggregate of such expenditures made by all of such 
                individuals 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 the individual's 
        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 the individual 
                owns, such individual shall be treated as having made 
                the individual's 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) Allocation in certain cases.--If less than 80 percent 
        of the use of an item is for nonbusiness purposes, only that 
        portion of the expenditures for such item which is properly 
        allocable to use for nonbusiness purposes shall be taken into 
        account.
            ``(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 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.
            ``(6) Property financed by subsidized energy 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 
        subsidized energy financing (as defined in section 
        48(a)(4)(C)).
    ``(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, 2009.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (30), by striking the period at 
        the end of paragraph (31) and inserting ``, and'', and by 
        adding at the end the following new paragraph:
            ``(32) to the extent provided in section 25C(e), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25C.''.
            (2) 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 25B the following new item:

``Sec. 25C. Nonbusiness installation of qualified fuel cells.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2004.
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