[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1093 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                S. 1093

  To reauthorize and revise the Renewable Energy Production Incentive 
                    program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 20, 2005

  Mr. Salazar introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To reauthorize and revise the Renewable Energy Production Incentive 
                    program, and for other purposes.

    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 ``Research and Development Investment 
Act''.

SEC. 2. REAUTHORIZE AND REVISE THE RENEWABLE ENERGY PRODUCTION 
              INCENTIVE PROGRAM.

    (a) Incentive Payments.--Section 1212(a) of the Energy Policy Act 
of 1992 (42 U.S.C. 13317(a)) is amended by striking ``and which 
satisfies'' and all that follows through ``Secretary shall establish.'' 
and inserting ``. If there are insufficient appropriations to make full 
payments for electric production from all qualified renewable energy 
facilities in any given year, the Secretary shall assign 60 percent of 
appropriated funds for that year to facilities that use solar, wind, 
geothermal, or closed-loop (dedicated energy crops) biomass 
technologies to generate electricity, and assign the remaining 40 
percent to other projects. The Secretary may, after transmitting to the 
Congress an explanation of the reasons therefor, alter the percentage 
requirements of the preceding sentence.''.
    (b) Qualified Renewable Energy Facility.--Section 1212(b) of the 
Energy Policy Act of 1992 (42 U.S.C. 13317(b)) is amended--
            (1) by striking ``a State or any political'' and all that 
        follows through ``nonprofit electrical cooperative'' and 
        inserting ``a not-for-profit electric cooperative, a public 
        utility described in section 115 of the Internal Revenue Code 
        of 1986, a State, Commonwealth, territory, or possession of the 
        United States or the District of Columbia, or a political 
        subdivision thereof, or an Indian tribal government of 
        subdivision thereof,''; and
            (2) by inserting ``landfill gas,'' after ``wind, 
        biomass,''.
    (c) Eligibility Window.--Section 1212(c) of the Energy Policy Act 
of 1992 (42 U.S.C. 13317(c)) is amended by striking ``during the 10-
fiscal year period beginning with the first full fiscal year occurring 
after the enactment of this section'' and inserting ``after October 1, 
2005, and before October 1, 2015''.
    (d) Amount of Payment.--Section 1212(e)(1) of the Energy Policy Act 
of 1992 (42 U.S.C. 13317(e)(1)) is amended by inserting ``landfill 
gas,'' after ``wind, biomass,''.
    (e) Sunset.--Section 1212(f) of the Energy Policy Act of 1992 (42 
U.S.C. 13317(f)) is amended by striking ``the expiration of'' and all 
that follows through ``of this section'' and inserting ``September 30, 
2025''.
    (f) Authorization of Appropriations.--Section 1212(g) of the Energy 
Policy Act of 1992 (42 U.S.C. 13317(g)) is amended to read as follows:
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $20,000,000 for each of fiscal 
years 2005 through 2025, to remain available until expended.''.

SEC. 3. EXTENSION AND EXPANSION OF CREDIT FOR ELECTRICITY PRODUCED FROM 
              CERTAIN RENEWABLE RESOURCES.

    (a) Extension.--Section 45(d) of the Internal Revenue Code of 1986 
(relating to qualified facilities) is amended by striking ``2006'' and 
inserting ``2011''.
    (b) Incremental Geothermal Energy and Incremental Hydropower 
Production.--
            (1) In general.--Section 45(c)(1) of the Internal Revenue 
        Code of 1986 (defining qualified energy resources) is amended 
        by striking ``and'' at the end of subparagraph (F), by striking 
        the period at the end of subparagraph (G) and inserting a 
        comma, and by adding at the end the following new 
        subparagraphs:
                    ``(H) incremental geothermal energy production, and
                    ``(I) incremental hydropower production.''.
            (2) Definition of resources.--Section 45(c) of such Code is 
        amended by adding at the end the following new paragraphs:
            ``(8) Incremental geothermal production.--
                    ``(A) In general.--The term `incremental geothermal 
                production' means for any taxable year the excess of--
                            ``(i) the total kilowatt hours of 
                        electricity produced from an incremental 
                        geothermal facility described in subsection 
                        (d)(9), over
                            ``(ii) the average annual kilowatt hours 
                        produced at such facility for 5 of the previous 
                        7 calendar years before the date of the 
                        enactment of this paragraph after eliminating 
                        the highest and the lowest kilowatt hour 
                        production years in such 7-year period.
                    ``(B) Special rule.--A facility described in 
                subsection (d)(9) which was placed in service at least 
                7 years before the date of the enactment of this 
                paragraph shall commencing with the year in which such 
                date of enactment occurs, reduce the amount calculated 
                under subparagraph (A)(ii) each year, on a cumulative 
                basis, by the average percentage decrease in the annual 
                kilowatt hour production for the 7-year period 
                described in subparagraph (A)(ii) with such cumulative 
                sum not to exceed 30 percent.
            ``(9) Incremental hydropower production.--
                    ``(A) In general.--The term `incremental hydropower 
                production' means for any taxable year an amount equal 
                to the percentage of total kilowatt hours of 
                electricity produced from an incremental hydropower 
                facility described in subsection (d)(10) attributable 
                to efficiency improvements or additions of capacity as 
                determined under subparagraph (B).
                    ``(B) Determination of incremental hydropower 
                production.--For purposes of subparagraph (A), 
                incremental hydropower production for any incremental 
                hydropower facility for any taxable year shall be 
                determined by establishing a percentage of average 
                annual hydropower production at the facility 
                attributable to the efficiency improvements or 
                additions of capacity using the same water flow 
                information used to determine an historic average 
                annual hydropower production baseline for such 
                facility. Such percentage and baseline shall be 
                certified by the Federal Energy Regulatory Commission. 
                For purposes of the preceding sentence, the 
                determination of incremental hydropower production 
                shall not be based on any operational changes at such 
                facility not directly associated with the efficiency 
                improvements or additions of capacity.''.
            (3) Facilities.--Section 45(d) of such Code (relating to 
        qualified facilities) is amended by adding at the end the 
        following new paragraphs:
            ``(9) Incremental geothermal facility.--In the case of a 
        facility using incremental geothermal to produce electricity, 
        the term `qualified facility' means any facility owned by the 
        taxpayer which is originally placed in service before the date 
        of the enactment of this paragraph, but only to the extent of 
        its incremental geothermal production. In the case of a 
        qualified facility described in the preceding sentence, the 10-
        year period referred to in subsection (a) shall be treated as 
        beginning not earlier than such date of enactment. Such term 
        shall not include any property described in section 48(a)(3) 
        the basis of which is taken into account by the taxpayer for 
        purposes of determining the energy credit under section 48.
            ``(10) Incremental hydropower facility.--In the case of a 
        facility using incremental hydropower to produce electricity, 
        the term `qualified facility' means any non-Federal 
        hydroelectric facility owned by the taxpayer which is 
        originally placed in service before the date of the enactment 
        of this paragraph, but only to the extent of its incremental 
        hydropower production. In the case of a qualified facility 
        described in the preceding sentence, the 10-year period 
        referred to in subsection (a) shall be treated as beginning not 
        earlier than such date of enactment.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to facilities placed in service after December 31, 2005.

SEC. 4. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

    (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. RESIDENTIAL SOLAR AND GEOTHERMAL 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 10 percent of the qualified 
energy property expenditures made by the taxpayer during such year.
    ``(b) Limitations.--No credit shall be allowed under this section 
for an item of property unless--
            ``(1) the original use of such property commences with the 
        taxpayer,
            ``(2) such property reasonably can be expected to remain in 
        use for at least 5 years, and
            ``(3) 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.
    ``(c) Qualified Energy Property Expenditures.--For purposes of this 
section, the term `qualified energy property expenditure' means an 
expenditure for energy property (as defined in paragraph (3) of section 
48(a) (determined without regard to subparagraphs (B) and (C) thereof).
    ``(d) Special Rules.--For purposes of this section--
            ``(1) 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 
        subsection (c) solely because it constitutes a structural 
        component of the structure on which it is installed.
            ``(2) 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 account for purposes of this section.
            ``(3) 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.
            ``(4) 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.
            ``(5) 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.
            ``(6) 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.
            ``(7) 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.
            ``(8) 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.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) of the Internal Revenue Code of 1986 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. Residential solar and geothermal property.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2004.

SEC. 5. DELAY IN PHASEOUT OF DEDUCTION FOR CLEAN-FUEL VEHICLES.

    (a) In General.--Section 179A(b)(1)(B) of the Internal Revenue Code 
of 1986 (relating to phaseout) is amended by striking ``2005'' and 
inserting ``2006''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2005.

SEC. 6. DELAY IN PHASEOUT OF CREDIT FOR QUALIFIED ELECTRIC VEHICLES.

    (a) In General.--Section 30(b)(2) of the Internal Revenue Code of 
1986 (relating to phaseout) is amended by striking ``2005'' and 
inserting ``2006''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2005.
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