[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 671 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                 S. 671

 To amend the Internal Revenue Code of 1986 to allow a credit against 
               income tax for certain fuel cell property.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 17, 2005

   Mr. Lieberman (for himself, Ms. Snowe, Mr. Smith, and Mr. Akaka) 
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 allow a credit against 
               income tax for certain fuel cell property.

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

SECTION 1. CREDIT FOR CERTAIN ENERGY-EFFICIENT PROPERTY.

    (a) Business Property.--
            (1) In general.--Subparagraph (A) of section 48(a)(3) 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) energy-efficient building 
                        property,''.
            (2) Energy-efficient building property.--Subsection (a) of 
        section 48 of such Code is amended by redesignating paragraph 
        (4) as paragraph (5) and by inserting after paragraph (3) the 
        following new paragraph:
            ``(4) Energy-efficient building property.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `energy-efficient 
                building property' means a fuel cell power plant that--
                            ``(i) generates electricity using an 
                        electrochemical process, and
                            ``(ii) generates at least 0.5 kilowatt of 
                        electricity using an electrochemical process.
                    ``(B) Limitation.--In the case of energy-efficient 
                building property placed in service during the taxable 
                year, the credit determined under paragraph (1) for 
                such year with respect to such property shall not 
                exceed an amount equal to the lesser of--
                            ``(i) 30 percent of the basis of such 
                        property, including expenditures for labor 
                        costs properly allocable to the onsite 
                        preparation, assembly, or original installation 
                        of the property and for piping or wiring to 
                        interconnect such property, or
                            ``(ii) $1,000 for each kilowatt of capacity 
                        of such property.
                    ``(C) 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 that converts a fuel into electricity 
                using electrochemical means.
                    ``(D) Termination.--Such term shall not include any 
                property placed in service after December 31, 2009.''.
            (3) Limitation.--Section 48(a)(2)(A) 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 energy-efficient 
                        building property, 30 percent, and
                            ``(ii) in the case of any other energy 
                        property, 10 percent.''.
            (4) Conforming amendments.--
                    (A) Section 29(b)(3)(A)(i)(III) of such Code is 
                amended by striking ``section 48(a)(4)(C)'' and 
                inserting ``section 48(a)(5)(C)''.
                    (B) Section 48(a)(1) of such Code is amended by 
                inserting ``except as provided in paragraph (4)(B),'' 
                before ``the energy''.
            (5) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service 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).
    (b) Nonbusiness Property.--
            (1) 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 ENERGY-EFFICIENT BUILDING PROPERTY.

    ``(a) Credit Allowed.--
            ``(1) 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 nonbusiness 
        energy-efficient building property expenditures which are paid 
        or incurred during such year.
            ``(2) Limitation.--The credit allowed under paragraph (1) 
        with respect to property placed in service by the taxpayer 
        during the taxable year shall not exceed an amount equal to the 
        lesser of--
                    ``(A) 30 percent of the basis of such property, or
                    ``(B) $1,000 for each kilowatt of capacity of such 
                property.
    ``(b) Nonbusiness Energy-Efficient Building Property 
Expenditures.--For purposes of this section--
            ``(1) In general.--The term `nonbusiness energy-efficient 
        building property expenditures' means expenditures made by the 
        taxpayer for nonbusiness energy-efficient building property 
        installed on or in connection with a dwelling unit--
                    ``(A) which is located in the United States, and
                    ``(B) which is used by the taxpayer as a residence.
        Such term includes expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the property.
            ``(2) Nonbusiness energy-efficient building property.--The 
        term `nonbusiness energy-efficient building property' means 
        energy-efficient building property (as defined in section 
        48(a)(4)) if--
                    ``(A) the original use of such property commences 
                with the taxpayer, and
                    ``(B) such property meets the standards (if any) 
                applicable to such property under section 48(a)(3).
    ``(c) 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 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 
                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 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 the individual 
                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) 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 nonbusiness energy-
        efficient building property 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)(5)(C)).
    ``(d) 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.
    ``(e) Termination.--This section shall not apply to any expenditure 
made after December 31, 2009.''.
            (2) Conforming amendments.--
                    (A) Subsection (a) of section 1016 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(d), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25C.''.
                    (B) 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 energy-efficient building property.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to expenditures made after December 31, 2004.
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