[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3628 Introduced in Senate (IS)]
109th CONGRESS
2d Session
S. 3628
To amend the Internal Revenue Code of 1986 to improve and extend
certain energy-related tax provisions, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 29, 2006
Ms. Snowe (for herself, Mrs. Feinstein, and Mr. Kerry) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to improve and extend
certain energy-related tax provisions, 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; ETC.
(a) Short Title.--This Act may be cited as the ``EXTEND the Energy
Efficiency Incentives Act of 2006''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; etc.
TITLE I--NON-BUSINESS ENERGY IMPROVEMENTS
Sec. 101. Performance based energy improvements for non-business
property.
Sec. 102. Extension and modification of credit for nonbusiness energy
property.
Sec. 103. Modification of credit for solar electric property and solar
hot water property.
TITLE II--BUSINESS-RELATED ENERGY IMPROVEMENTS
Sec. 201. Extension and clarification of new energy efficient home
credit.
Sec. 202. Extension and modification of deduction for energy efficient
commercial buildings.
Sec. 203. Deduction for energy efficient low-rise buildings.
Sec. 204. Energy efficient property deduction.
Sec. 205. Extension of investment tax credit with respect to solar
energy property and qualified fuel cell
property.
TITLE III--INCENTIVES FOR ENERGY SAVINGS CERTIFICATIONS
Sec. 301. Credit for energy savings certifications.
TITLE I--NON-BUSINESS ENERGY IMPROVEMENTS
SEC. 101. PERFORMANCE BASED ENERGY IMPROVEMENTS FOR NON-BUSINESS
PROPERTY.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
is amended by inserting after section 25D the following new section:
``SEC. 25E. PERFORMANCE BASED ENERGY IMPROVEMENTS.
``(a) In General.--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 amount of qualified energy
efficiency expenditures paid or incurred by the taxpayer during the
taxable year.
``(b) Limitations.--
``(1) In general.--The amount allowed as a credit under
subsection (a) shall not exceed--
``(A) in the case of a principal residence that
achieves a qualified energy savings of 50 percent or
more, $2,000, and
``(B) in the case of a principal residence which
achieves a qualified energy savings of less than 50
percent, the product of--
``(i) the qualified energy savings
achieved, and
``(ii) $4,000.
``(2) Minimum amount of qualified energy savings.--No
credit shall be allowed under subsection (a) with respect to
any principal residence which achieves a qualified energy
savings of less than 20 percent.
``(c) Qualified Energy Efficiency Expenditures.--For purposes of
this section:
``(1) In general.--The term `qualified energy efficiency
expenditures' means any amount paid or incurred which is
related to producing qualified energy savings in a principal
residence of the taxpayer which is located in the United
States.
``(2) No double benefit for certain expenditures.--The term
`qualified energy efficiency expenditures' shall not include
any expenditure for which a deduction or credit is otherwise
allowed to the taxpayer under this chapter.
``(3) Principal residence.--The term `principal residence'
has the same meaning as when used in section 121, except that--
``(A) no ownership requirement shall be imposed,
and
``(B) the period for which a building is treated as
used as a principal residence shall also include the
60-day period ending on the 1st day on which it would
(but for this subparagraph) first be treated as used as
a principal residence.
``(d) Qualified Energy Savings.--For purposes of this section--
``(1) In general.--The term `qualified energy savings'
means, with respect to any principal residence, the amount
(measured as a percentage) by which--
``(A) the annual energy use with respect to the
principal residence after qualified energy efficiency
expenditures are made, as certified under paragraph
(2), is less than
``(B) the annual energy use with respect to the
principal residence before the qualified energy
efficiency expenditures were made, as certified under
paragraph (2).
In determining annual energy use under subparagraph (B), any
energy efficiency improvements which are not attributable to
qualified energy efficiency expenditures shall be disregarded.
``(2) Certification.--
``(A) In general.--The Secretary, in consultation
with the Secretary of Energy, shall prescribe the
procedures and methods for the making of certifications
under this paragraph based on the Residential Energy
Services Network (RESNET) Technical Guidelines in
effect on the date of the enactment of this section.
``(B) Qualified individuals.--Any certification
made under this paragraph may only be made by an
individual who is recognized by an organization
certified by the Secretary for such purposes.
``(e) Special Rules.--For purposes of this section rules similar to
the rules under paragraphs (4), (5), (6), (7), (8), and (9) of section
25D(e) and section 25C(e)(2) shall apply.
``(f) Basis Adjustments.--For purposes of this subtitle, if a
credit is allowed under this section with respect to 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.--This section shall not apply with respect to
any property placed in service after December 31, 2010.''.
(b) Interim Guidance on Certification.--
(1) In general.--Not later than 90 days after the date of
the enactment of this Act, the Secretary of the Treasury, in
consultation with the Secretary of Energy, shall issue interim
guidance on--
(A) the procedures and methods for making
certifications under sections 25E(d)(2)(A) and
179E(d)(2)(A) of the Internal Revenue Code of 1986, as
added by subsection (a) and section 203, respectively;
and
(B) the recognition of qualified individuals under
sections 25E(d)(2)(B) and 179E(d)(2)(B) of such Code
for the purpose of making such certifications.
(2) Consultation with stakeholders.--
(A) In general.--The Secretary of the Treasury, in
issuing guidance pursuant to paragraph (1), shall
consider comments from energy efficiency experts and
other interested parties.
(B) Other considerations.--In the case of guidance
issued pursuant to paragraph (1)(B), the Secretary of
the Treasury shall also consider--
(i) the Residential Energy Services Network
Technical Guidelines and other pertinent
guidelines for evaluating energy savings;
(ii) energy modeling software, including
software accredited through the Residential
Energy Services Network; and
(iii) quality assurance procedures of the
Building Performance Institute, Home
Performance through Energy Star, and the
Residential Energy Services Network.
(c) Alternative Certification Methods.--
(1) In general.--The Secretary of the Treasury shall
establish a procedure for individuals and businesses to
petition for the approval of alternative methods of
certification under sections 25E(d)(2)(A) and 179E(d)(2)(A) of
the Internal Revenue Code of 1986, as added by subsection (a)
and section 203, respectively.
(2) Determination.--The Secretary of the Treasury shall
make a determination on the approval or disapproval of such
alternative methods of certification not later than 90 days
after receiving a petition under paragraph (1).
(d) Conforming Amendments.--
(1) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (36), by striking the period at the end of
paragraph (37) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(38) to the extent provided in section 25E(f).''.
(2) The table of sections for subpart A of part IV of
subchapter A chapter 1 is amended by inserting after the item
relating to section 25D the following new item:
``Sec. 25E. Performance based energy improvements.''.
(e) Effective Dates.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after the
date of the enactment of this Act.
SEC. 102. EXTENSION AND MODIFICATION OF CREDIT FOR NONBUSINESS ENERGY
PROPERTY.
(a) Extension.--Subsection (g) of section 25C of the Internal
Revenue Code of 1986 (relating to termination) is amended by striking
``December 31, 2007'' and inserting ``December 31, 2010''.
(b) Modifications for Residential Energy Efficiency Property
Expenditures.--
(1) Increased limitation for oil furnaces and natural gas,
propane, and oil hot water boilers.--
(A) In general.--Subparagraphs (B) and (C) of
section 25C(b)(3) are amended to read as follows:
``(B) $150 for any qualified natural gas furnace or
qualified propane furnace, and
``(C) $300 for--
``(i) any item of energy-efficient building
property, and
``(ii) any qualified oil furnace, qualified
natural gas hot water boiler, qualified propane
hot water boiler, or qualified oil hot water
boiler.''.
(B) Conforming amendment.--Clause (ii) of section
25C(d)(2)(A) is amended to read as follows:
``(ii) any qualified natural gas furnace,
qualified propane furnace, qualified oil
furnace, qualified natural gas hot water
boiler, qualified propane hot water boiler, or
qualified oil hot water boiler, or''.
(2) Modifications of standards for energy-efficient
building property.--
(A) Electric heat pumps.--Subparagraph (B) of
section 25C(d)(3) is amended to read as follows:
``(A) an electric heat pump which achieves the
highest efficiency tier established by the Consortium
for Energy Efficiency, as in effect on January 1,
2007.''.
(B) Central air conditioners.--Section 25C(d)(3)(D)
is amended by striking ``2006'' and inserting ``2007''.
(C) Oil furnaces and hot water boilers.--Paragraph
(4) of section 25C(d) is amended to read as follows:
``(4) Qualified natural gas, propane, and oil furnaces and
hot water boilers.--
``(A) Qualified natural gas furnace.--The term
`qualified natural gas furnace' means any natural gas
furnace which achieves an annual fuel utilization
efficiency rate of not less than 95.
``(B) Qualified natural gas hot water boiler.--The
term `qualified natural gas hot water boiler' means any
natural gas hot water boiler which achieves an annual
fuel utilization efficiency rate of not less than 95.
``(C) Qualified propane furnace.--The term
`qualified propane furnace' means any propane furnace
which achieves an annual fuel utilization efficiency
rate of not less than 95.
``(D) Qualified propane hot water boiler.--The term
`qualified propane hot water boiler' means any propane
hot water boiler which achieves an annual fuel
utilization efficiency rate of not less than 95.
``(E) Qualified oil furnaces.--The term `qualified
oil furnace' means any oil furnace which achieves an
annual fuel utilization efficiency rate of not less
than 90.
``(F) Qualified oil hot water boiler.--The term
`qualified oil hot water boiler' means any oil hot
water boiler which achieves an annual fuel utilization
efficiency rate of not less than 90.''.
(c) Modification of Qualified Energy Efficiency Improvements.--
(1) In general.--Paragraph (1) of section 25C(c) is amended
by inserting ``, or an asphalt roof with appropriate cooling
granules,'' before ``which meet the Energy Star program
requirements''.
(2) Building envelope component.--Subparagraph (D) of
section 25C(c)(2) is amended--
(A) by inserting ``or asphalt roof'' after ``metal
roof'', and
(B) by inserting ``or cooling granules'' after
``pigmented coatings''.
(d) Elimination of Credit for Qualified Energy Efficiency
Improvements in 2010.--
(1) In general.--Subsection (a) of section 25C of the
Internal Revenue Code of 1986 is amended to read as follows:
``(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 amount of residential
energy property expenditures paid or incurred by the taxpayer during
the taxable year.''.
(2) Conforming amendments.--
(A) Section 25C(b) of such Code, as amended by
subsection (b)(1), is amended by striking paragraphs
(1) and (2) and by redesignating paragraph (3) as
paragraph (1).
(B) Section 25C(b)(1) of such Code, as redesignated
by subparagraph (A), is amended by striking ``by reason
of subsection (a)(2)''.
(C) Section 25C of such Code is amended by striking
subsection (c).
(e) Effective Dates.--
(1) In general.--Except as provided in paragraphs (2) and
(3), the amendments made by this section shall apply to
property placed in service after the date of the enactment of
this Act.
(2) Subsection (b).--The amendments made by subsection (b)
shall apply to property placed in service after December 31,
2006.
(3) Subsection (d).--The amendments made by subsection (d)
shall apply to property placed in service after December 31,
2009.
SEC. 103. MODIFICATION OF CREDIT FOR SOLAR ELECTRIC PROPERTY AND SOLAR
HOT WATER PROPERTY.
(a) In General.--Subsection (a) of section 25D (relating to
allowance of credit) is amended by striking paragraphs (1) and (2) and
inserting the following:
``(1) 100 percent of the qualified solar electric property
expenditures made by the taxpayer during such year,
``(2) 100 percent of the qualified solar hot water property
expenditures made by the taxpayer during such year, and''.
(b) Limitations.--
(1) In general.--Paragraph (1) of section 25D(b) is amended
by striking subparagraphs (A) and (B) and inserting the
following:
``(A) $2 with respect to each peak watt of capacity
of qualified solar electric property for which
qualified solar electric property expenditures are
made,
``(B) in the case of qualified solar water heating
property expenditures, an amount equal to--
``(i) in the case of a dwelling unit which
uses electricity to heat water, $0.35 with
respect to each kilowatt per year of savings of
qualified solar hot water property for which
qualified solar water heating property
expenditures are made, or
``(ii) in the case of a dwelling unit which
uses natural gas to heat water, $7 with respect
to each annual Therm of natural gas savings of
qualified solar hot water property for which
qualified solar water heating property
expenditures are made, and''.
(2) Determination of savings.--Paragraph (1) of section
25D(b) is amended by adding at the end the following new flush
sentence:
``For purposes of subparagraph (B), savings shall be determined
under regulations prescribed by the Secretary based on the OG-
300 Standard for the Annual Performance of OG-300 Certified
Systems of the Solar Rating and Certification Corporation.''.
(c) Definitions.--
(1) In general.--Section 25D(d) is amended--
(A) by redesignating paragraph (3) as paragraph
(5), and
(B) by striking paragraphs (1) and (2) and
inserting the following:
``(1) Qualified solar electric property expenditures.--The
term ` qualified solar electric property expenditures' means
any amount paid or incurred for qualified solar electric
property.
``(2) Qualified solar electric property.--The term
`qualified solar electric property' means solar electric
property (as defined in section 179F(c)(2)(B)) installed on or
in connection with a dwelling unit located in the United States
and used as a residence by the taxpayer.
``(3) Qualified solar water heating property
expenditures.--The term `qualified solar water heating property
expenditures' means any amount paid or incurred for qualified
solar hot water property.
``(4) Qualified solar hot water property.--The term
`qualified solar hot water property' means solar hot water
property (as defined in section 179F(c)(2)(C)) installed on or
in connection with a dwelling unit located in the United States
and used as a residence by the taxpayer.''.
(2) Conforming amendments.--
(A) Section 25D(e)(2) is amended by striking
``property described in paragraph (1) and (2) of
subsection (d)'' and inserting ``qualified solar
electric property or qualified solar hot water
property''.
(B) Section 25D(e)(4)(C) is amended by striking
``paragraphs (1), (2), and (3)'' and inserting
``paragraphs (1),(3), and (5)''.
(d) Dollar Amounts in Case of Joint Occupancy.--Clauses (i) and
(ii) of section 25D(e)(4)(A) are amended to read as follows:
``(i) $2 in the case of each peak watt of
capacity of qualified solar electric property
for which qualified solar electric property
expenditures are made,
``(ii) in the case of qualified solar water
heating property expenditures, an amount equal
to--
``(I) in the case of a dwelling
unit which uses electricity to heat
water, $0.35 with respect to each
kilowatt per year of savings of
qualified solar hot water property for
which qualified solar water heating
property expenditures are made, or
``(II) in the case of a dwelling
unit which uses natural gas to heat
water, $7 with respect to each annual
Therm of natural gas savings of
qualified solar hot water property for
which qualified solar water heating
property expenditures are made, and''.
(e) Extension of Credit.--Subsection (g) of section 25D is amended
by striking ``2007'' and inserting ``2010''.
(f) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act.
TITLE II--BUSINESS-RELATED ENERGY IMPROVEMENTS
SEC. 201. EXTENSION AND CLARIFICATION OF NEW ENERGY EFFICIENT HOME
CREDIT.
(a) Extension.--Subsection (g) of section 45L (relating to
termination) is amended by striking ``December 31, 2007'' and inserting
``December 31, 2010''.
(b) Clarification.--
(1) In general.--Paragraph (1) of section 45L(a) is amended
by striking ``and'' at the end of subparagraph (A) and by
striking subparagraph (B) and inserting the following:
``(B) acquired by a person from such eligible
contractor, and
``(C) used by any person as a residence during the
taxable year.''.
(2) Effective date.--The amendments made by this subsection
shall take effect as if included in section 1332 of the Energy
Policy Act of 2005.
SEC. 202. EXTENSION AND MODIFICATION OF DEDUCTION FOR ENERGY EFFICIENT
COMMERCIAL BUILDINGS.
(a) Extension.--Subsection (h) of section 179D (relating to
termination) is amended to read as follows:
``(h) Termination.--This section shall not apply with respect to
property--
``(1) which is certified under subsection (d)(6) after
December 31, 2011, or
``(2) which is placed in service after December 31,
2013.''.
(b) Increase in Maximum Amount of Deduction.--
(1) In general.--Subparagraph (A) of section 179D(b)(1) is
amended by striking ``$1.80'' and inserting ``$2.25''.
(2) Partial allowance.--Paragraph (1) of section 179D(d) is
amended--
(A) by striking ``$.60'' and inserting ``$0.75'',
and
(B) by striking ``$1.80'' and inserting ``$2.25''.
(c) Modifications to Certain Special Rules.--
(1) Requirements for computer software used in calculating
energy and power consumption costs.--Computer software used in
preparing a calculation under section 179D(d)(2) of the
Internal Revenue Code of 1986 shall automatically--
(A) generate the features, energy use, and energy
and power consumption costs of a reference building
that meets Standard 90.1-2001 (as defined under section
179D(c)(2) of such Code), and
(B) compare such features, energy use, and
consumption costs to the features, energy use, and
consumption costs of the building or system with
respect to which the calculation is being made.
(2) Targets for partial allowance of credit.--The targets
established by the Secretary of Treasury under section
179D(b)(1)(B) of the Internal Revenue Code of 1986 shall be
based on prescriptive criteria that can be modeled explicitly.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service in taxable years beginning after
the date of the enactment of this Act.
SEC. 203. DEDUCTION FOR ENERGY EFFICIENT LOW-RISE BUILDINGS.
(a) In General.--Part VI of subchapter B of chapter 1 is amended by
inserting after section 179D the following new section:
``SEC. 179E. ENERGY EFFICIENT LOW-RISE BUILDINGS DEDUCTION.
``(a) In General.--There shall be allowed as a deduction an amount
equal to the amount of qualified energy efficiency expenditures paid or
incurred by the taxpayer during the taxable year.
``(b) Limitations.--
``(1) In general.--The amount allowed as a credit under
subsection (a) shall not exceed--
``(A) in the case of a qualified low-rise building
that achieves a qualified energy savings of 50 percent
or more, $6,000, and
``(B) in the case of a qualified low-rise building
which achieves a qualified energy savings of less than
50 percent, the product of--
``(i) the qualified energy savings
achieved, and
``(ii) $12,000.
``(2) Minimum amount of qualified energy savings.--No
credit shall be allowed under subsection (a) with respect to
any qualified low-rise building which achieves a qualified
energy savings of less than 20 percent.
``(c) Qualified Energy Efficiency Expenditures.--For purposes of
this section:
``(1) In general.--The term `qualified energy efficiency
expenditures' means any amount paid or incurred which is
related to producing qualified energy savings in a qualified
low-rise building of the taxpayer which is located in the
United States.
``(2) No double benefit for certain expenditures.--The term
`qualified energy efficiency expenditures' shall not include
any expenditure for any property for which a deduction has been
allowed to the taxpayer under section 179F.
``(3) Qualified low-rise building.--The term `qualified
low-rise building' means a building--
``(A) with respect to which depreciation is
allowable under section 167, and
``(B) which is not within the scope of Standard
90.1-2001 (as defined under section 179D(c)(2)).
``(d) Qualified Energy Savings.--For purposes of this section--
``(1) In general.--The term `qualified energy savings'
means, with respect to any qualified low-rise building, the
amount (measured as a percentage) by which--
``(A) the annual energy use with respect to the
qualified low-rise building after qualified energy
efficiency expenditures are made, as certified under
paragraph (2), is less than
``(B) the annual energy use with respect to the
qualified low-rise building before the qualified energy
efficiency expenditures were made, as certified under
paragraph (2).
In determining annual energy use under subparagraph (B), any
energy efficiency improvements which are not attributable to
qualified energy efficiency expenditures shall be disregarded.
``(2) Certification.--
``(A) In general.--The Secretary, in consultation
with the Secretary of Energy, shall prescribe the
procedures and method for the making of certifications
under this paragraph based on the Residential Energy
Services Network (RESNET) Technical Guidelines in
effect on the date of the enactment of this Act.
``(B) Qualified individuals.--Any certification
made under this paragraph may only be made by an
individual who is recognized by an organization
certified by the Secretary for such purposes.
``(e) Special Rules.--For purposes of this section, rules similar
to the rules under paragraphs (8) and (9) of section 25D(e) shall
apply.
``(f) Basis Adjustments.--For purposes of this subtitle, if a
credit is allowed under this section with respect to 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.--This section shall not apply with respect to
any property placed in service after December 31, 2010.''.
(b) Conforming Amendments.--
(1) Section 1016(a), as amended by section 101, is amended
by striking ``and'' at the end of paragraph (37), by striking
the period at the end of paragraph (38) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(39) to the extent provided in section 179E(f).''.
(2) Section 1245(a) is amended by inserting ``179E,'' after
``179D,'' both places it appears in paragraphs (2)(C) and
(3)(C).
(3) Section 1250(b)(3) is amended by inserting ``or 179E''
after ``section 179D''.
(4) Section 263(a)(1) is amended by striking ``or'' at the
end of subparagraph (J), by striking the period at the end of
subparagraph (K) and inserting ``, or'', and by inserting after
subparagraph (K) the following new subparagraph:
``(L) expenditures for which a deduction is allowed
under section 179E.''.
(5) Section 312(k)(3)(B) is amended by striking ``179,
179A, 179B, 179C, or 179D'' each place it appears in the
heading and text and inserting ``179, 179A, 179B, 179C, 179D,
or 179E''.
(6) The table of sections for part VI of subchapter B is
amended by inserting after the item relating to section 179D
the following new item:
``Sec. 179E. Energy efficient low-rise buildings deduction.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after the
date of the enactment of this Act.
SEC. 204. ENERGY EFFICIENT PROPERTY DEDUCTION.
(a) In General.--Part VI of subchapter B of chapter 1, as amended
by section 203, is amended by inserting after section 179E the
following new section:
``SEC. 179F. ENERGY EFFICIENT PROPERTY.
``(a) In General.--There shall be allowed as a deduction an amount
equal to the energy efficient property expenditures paid or incurred by
the taxpayer during the taxable year
``(b) Limitation.--The amount of the deduction allowed under
subsection (a) for any taxable years shall not exceed--
``(1) $150 for any advanced main air circulating fan,
``(2) $450 for any qualified natural gas furnace or
qualified propane furnace,
``(3) $900 for--
``(A) any item of energy-efficient building
property, and
``(B) any qualified oil furnace, qualified natural
gas hot water boiler, qualified propane hot water
boiler, or qualified oil hot water boiler.
``(4) $9 with respect to each peak watt of capacity of
solar electric property,
``(5) in the case of solar hot water property, an amount
equal to--
``(A) in the case of a dwelling unit which uses
electricity to heat water, $1 with respect to each
kilowatt per year of savings of such solar hot water
property, or
``(B) in the case of a dwelling unit which uses
natural gas to heat water, $21 with respect to each
annual Therm of natural gas savings of such solar hot
water property.
For purposes of paragraph (5), savings shall be determined under
regulations prescribed by the Secretary based on the OG-300 Standard
for the Annual Performance of OG-300 Certified Systems of the Solar
Rating and Certification Corporation.
``(c) Energy Efficient Property Expenditures.--For purposes of this
section--
``(1) In general.--The term `energy efficient property
expenditures' means expenditures paid by the taxpayer for
qualified energy property which is--
``(A) of a character subject to the allowance for
depreciation, and
``(B) originally placed in service by the taxpayer.
``(2) Qualified energy property.--
``(A) In general.--The term `qualified energy
property' has the meaning given such term by section
25C(d)(2), except that such term shall include solar
electric property and solar hot water property.
``(B) Solar electric property.--The term `solar
electric property' means property which uses solar
energy to generate electricity.
``(C) Solar hot water property.--The term `solar
hot water property' means property used to heat water
if at least half of the energy used by such property
for such purpose is derived from the sun.
``(d) Basis Adjustments.--For purposes of this subtitle, if a
credit is allowed under this section with respect to 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.
``(e) Termination.--This section shall not apply with respect to
any property placed in service after December 31, 2010.''.
(b) No Double Benefit.--Section 179D(c) is amended by adding at the
end the following new paragraph:
``(3) Certain property excluded.--The term `energy
efficient commercial building property' does not include any
property with respect to which a credit has been allowed to the
taxpayer under section 179F.''.
(c) Conforming Amendments.--
(1) Section 1016(a), as amended by section 203, is amended
by striking ``and'' at the end of paragraph (38), by striking
the period at the end of paragraph (39) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(40) to the extent provided in section 179E(e).''.
(2) Section 1245(a), as amended by section 203 is amended
by inserting ``179F,'' after ``179E,'' both places it appears
in paragraphs (2)(C) and (3)(C).
(3) Section 1250(b)(3), as amended by section 203, is
amended by inserting ``or 179F'' after ``section 179E''.
(4) Section 263(a)(1), as amended by section 203, is
amended by striking ``or'' at the end of subparagraph (K), by
striking the period at the end of subparagraph (L) and
inserting ``, or'', and by inserting after subparagraph (L) the
following new subparagraph:
``(M) expenditures for which a deduction is allowed
under section 179F.''.
(5) Section 312(k)(3)(B), as amended by section 203, is
amended by striking ``179, 179A, 179B, 179C, 179D, or 179E''
each place it appears in the heading and text and inserting
``179, 179A, 179B, 179C, 179D, 179E, or 179F''.
(6) The table of sections for part VI of subchapter B is
amended by inserting after the item relating to section 179E
the following new item:
``Sec. 179F. Energy efficient property.''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service in taxable years beginning after
the date of the enactment of this Act.
SEC. 205. EXTENSION OF INVESTMENT TAX CREDIT WITH RESPECT TO SOLAR
ENERGY PROPERTY AND QUALIFIED FUEL CELL PROPERTY.
(a) Solar Energy Property.--Paragraphs (2)(A)(i)(II) and (3)(A)(ii)
of section 48(a) are each amended by striking ``2008'' and inserting
``2012''.
(b) Eligible Fuel Cell Property.--Paragraph (1)(E) of section 48(c)
is amended by striking ``2007'' and inserting ``2011''.
TITLE III--INCENTIVES FOR ENERGY SAVINGS CERTIFICATIONS
SEC. 301. CREDIT FOR ENERGY SAVINGS CERTIFICATIONS.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
is amended by adding at the end the following new section:
``SEC. 45N. ENERGY SAVINGS CERTIFICATION CREDIT.
``(a) In General.--For purposes of section 38, the energy savings
certification credit determined under this section for any taxable year
is an amount equal to the sum of--
``(1) the qualified training and certification costs paid
or incurred by the taxpayer which may be taken into account for
such taxable year, plus
``(2) the qualified certification equipment expenditures
paid or incurred by the taxpayer which may be taken into
account for such taxable year.
``(b) Qualified Training and Certification Costs.--
``(1) In general.--The term `qualified training and
certification costs' means costs paid or incurred for training
which is required for the taxpayer or employees of the taxpayer
to be certified by the Secretary under section 25D(d)(2)(B) or
179E(d)(2)(B) for the purpose of certifying energy savings.
``(2) Limitation.--The qualified training and certification
costs taken into account under subsection (a)(1) for the
taxable year with respect to any individual shall not exceed
$500 reduced by the amount of the credit allowed under
subsection (a)(1) to the taxpayer (or any predecessor) with
respect to such individual for all prior taxable years.
``(3) Year costs taken into account.--Qualified training
and certifications costs with respect to any individual shall
not be taken into account under subsection (a)(1) before the
taxable year in which the individual with respect to whom such
costs are paid or incurred has performed 25 certifications
under sections 25E(d)(2)(A) and 179E(d)(2)(A).
``(c) Qualified Certification Equipment Expenditures.--
``(1) In general.--The term `qualified training equipment
expenditures' means costs paid or incurred for--
``(A) blower doors,
``(B) duct leakage testing equipment,
``(C) flue gas combustion equipment, and
``(D) digital manometers.
``(2) Limitation.--
``(A) In general.--The qualified certification
equipment expenditures taken into account under
subsection (a)(2) with respect to any taxpayer for any
taxable year shall not exceed $1,000.
``(B) Limitation on individual items.--The
qualified certification equipment expenditures taken
into account under subsection (a)(2) shall not exceed--
``(i) $500 with respect to any blower door
or duct leakage testing equipment, and
``(ii) $100 with respect to any flue gas
combustion equipment or digital manometer.
``(3) Year expenditures taken into account.--The qualified
certification equipment expenditures of any taxpayer shall not
be taken into account under subsection (a)(2) before the
taxable year in which the taxpayer has performed 25
certifications under sections 25E(d)(2)(A) and 179E(d)(2)(A).
``(d) Special Rules.--
``(1) Aggregation rules.--For purposes of this section, all
persons treated as a single employer under subsections (a) and
(b) of section 52 shall be treated as 1 person.
``(2) Basis reduction.--The basis of any property shall be
reduced by the portion of the cost of such property taken into
account under subsection (a).
``(3) Denial of double benefit.--
``(A) In general.--No deduction shall be allowed
for that portion of the expenses otherwise allowable as
a deduction for the taxable year which is equal to the
amount taken into account under subsection (a) for such
taxable year.
``(B) Amount previously deducted.--No credit shall
be allowed under subsection (a) with respect to any
amount for which a deduction has been allowed in any
preceding taxable year.''.
(b) Credit Treated as Part of General Business Credit.--Section
38(b) is amended by striking ``and'' at the end of paragraph (29), by
striking the period at the end of paragraph (30) and inserting
``plus'', and by adding at the end the following new paragraph:
``(31) the energy savings certification credit determined
under section 45N(a).''.
(c) Conforming Amendments.--
(1) Section 1016(a), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (39), by striking the
period at the end of paragraph (40) and inserting ``and'', and
by adding at the end the following new paragraph:
``(41) to the extent provided in section 45N(d)(2).''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 45M the following new item:
``Sec. 45N. Energy savings certification credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after the date of the enactment of
this Act.
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