S.Amdt. 1406

1. Rewrites page 138, line 9 through page 146, line 14

   ReplacesPrinted page

   Removes page 138, line 9 through page 146, line 14 of the printed bill. See that page

   Inserted: (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--

   Inserted: (1) except as provided in paragraphs (2) and (3), 10 percent of the amount paid or incurred by the taxpayer for qualified energy efficient building envelope improvements installed during such taxable year,

   Inserted: (2) 25 percent of the amount paid or incurred by the taxpayer for qualified duct sealing services or qualified air infiltration reduction services performed during such taxable year, and

   Inserted: (3) 20 percent of the amount paid or incurred by the taxpayer for qualified replacement natural gas or propane heating systems installed during such taxable year.

   Inserted: (b) Limitation.--The credit allowed by this section with respect to a dwelling for any taxable year shall not exceed $300, reduced (but not below zero) by the sum of the credits allowed under subsection (a) to the taxpayer with respect to the dwelling for all preceding taxable years.

   Inserted: (c) Carryforward of Unused Credit.--If the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.

   Inserted: (d) Definitions.--For purposes of this section:

   Inserted: (1) Qualified energy efficient building envelope improvement.--The term 'qualified energy efficient building envelope improvement' means any energy efficient building envelope component which is certified to meet or exceed the prescriptive criteria for such component in the 2000 International Energy Conservation Code, or any combination of energy efficiency measures which are certified as achieving at least a 30 percent reduction in heating and cooling energy usage for the dwelling (as measured in terms of energy cost to the taxpayer), if--

   Inserted: (A) such component or combination of measures is installed in or on a dwelling which--

   Inserted: (i) is located in the United States,

   Inserted: (ii) has not been treated as a qualifying new home for purposes of any credit allowed under section 45G, and

   Inserted: (iii) is owned and used by the taxpayer as the taxpayer's principal residence (within the meaning of section 121),

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   Inserted: (B) the original use of such component or combination of measures commences with the taxpayer, and

   Inserted: (C) such component or combination of measures reasonably can be expected to remain in use for at least 5 years.

   Inserted: (2) Qualified duct sealing services.--

   Inserted: (A) In general.--The term 'qualified duct sealing services' means services which bring the duct system of a dwelling into compliance with the Energy Star Duct Specifications published by the Environmental Protection Agency if such service is performed with regard to a dwelling which--

   Inserted: (i) is located in the United States,

   Inserted: (ii) has not been treated as a qualifying new home for purposes of any credit allowed under section 45G, and

   Inserted: (iii) is owned and used by the taxpayer as the taxpayer's principal residence (within the meaning of section 121).

   Inserted: (B) Certification required.--Services shall not be considered to be qualified duct sealing services unless the dwelling is determined to be not in compliance with such Energy Star Duct Specifications before such services and certified to be in compliance with such Energy Star Duct Specifications after such services.

   Inserted: (3) Qualified air infiltration reduction services.--

   Inserted: (A) In general.--The term 'qualified air infiltration reduction services' means services which bring the air infiltration of a dwelling into compliance with the infiltration requirements in the Energy Star Home Sealing Specifications published by the Environmental Protection Agency, if such service is performed with regard to a dwelling which--

   Inserted: (i) is located in the United States,

   Inserted: (ii) has not been treated as a qualifying new home for purposes of any credit allowed under section 45G, and

   Inserted: (iii) is owned and used by the taxpayer as the taxpayer's principal residence (within the meaning of section 121).

   Inserted: (B) Certification required.--Services shall not be considered to be qualified air infiltration reduction services unless the dwelling is determined to not be in compliance with such Energy Star Home Sealing Specifications before such services and is certified to be in compliance with such Energy Star Home Sealing Specifications after such services.

   Inserted: (4) Qualified natural gas or propane heating systems.--The term 'qualified natural gas or propane heating systems' means a natural gas or propane furnace or boiler which is certified to achieve at least 90 percent annual fuel utilization efficiency (AFUE) and which replaces an existing natural gas or propane furnace or boiler which has an AFUE of less than 78 percent or which does not include a power burner or induced draft exhaust, if--

   Inserted: (A) such furnace or boiler is installed in a dwelling which--

   Inserted: (i) is located in the United States,

   Inserted: (ii) has not been treated as a qualifying new home for purposes of any credit allowed under section 45G, and

   Inserted: (iii) is owned and used by the taxpayer as the taxpayer's principal residence (within the meaning of section 121),

   Inserted: (B) the original use of such furnace or boiler commences with the taxpayer, and

   Inserted: (C) such furnace or boiler reasonably can be expected to remain in use for at least 5 years.

   Inserted: (e) Certification.--

   Inserted: (1) Methods of certification.--

   Inserted: (A) Component-based method.--

   Inserted: (i) Qualified energy efficient building envelope components.--The certification described in paragraph (1) of subsection (d) for any component described in such paragraph shall be determined on the basis of applicable energy efficiency ratings (including product labeling requirements) for affected building envelope components.

   Inserted: (ii) Qualified natural gas or propane heating systems.--The certification described in paragraph (4) of subsection (d) shall be determined on the basis of applicable energy efficiency ratings (including product labeling requirements) for affected natural gas or propane furnaces or boilers.

   Inserted: (B) Performance-based method.--

   Inserted: (i) Qualified energy efficient building envelope measures.--The certification described in paragraph (1) of subsection (d) for any combination of measures described in such paragraph shall be--

   Inserted: (I) determined by comparing the projected heating and cooling energy usage for the dwelling to such usage for such dwelling in its original condition, and

   Inserted: (II) accompanied by a written analysis documenting the proper application of a permissible energy performance calculation method to the specific circumstances of such dwelling.

   Inserted: (ii) Qualified duct sealing services.--The determination and certification described in paragraph (2) of subsection (d) shall be on the basis of test reports performed in accordance with the Energy Star Duct Specifications.

   Inserted: (iii) Qualified air infiltration reduction services.--The determination and certification described in paragraph (3) of subsection (d) shall be on the basis of test reports performed in accordance with the Energy Star Home Sealing Specifications.

   Inserted: (iv) Computer software.--Computer software shall be used in support of a performance-based method certification under clause (i). Such software shall meet procedures and methods for calculating energy and cost savings in regulations promulgated by the Secretary of Energy. Such regulations on the specifications for software and verification protocols shall be based on the 2001 California Residential Alternative Calculation Method Approval Manual.

   Inserted: (2) Provider.--

   Inserted: (A) Qualified energy efficient building envelope improvements.--A certification described in paragraph (1) of subsection (d) shall be provided by--

   Inserted: (i) in the case of the method described in paragraph (1)(A)(i), by a third party, such as a local building regulatory authority, a utility, a manufactured home primary inspection agency, or a home energy rating organization, or

   Inserted: (ii) in the case of the method described in paragraph (1)(B)(i), an individual recognized by an organization designated by the Secretary for such purposes.

   Inserted: (B) Qualified duct sealing services; qualified air infiltration reduction services.--A determination or certification described in paragraph (2) or (3) of subsection (d) shall be provided by a State-licensed contractor.

   Inserted: (C) Qualified natural gas or propane heating systems.--A certification described in paragraph (4) of subsection (d) shall be provided by a third party, such as a local building regulatory authority, a utility, a manufactured home primary inspection agency, or a home energy rating organization.

   Inserted: (3) Form.--Any certification described in subsection (d) shall be made in writing on forms which--

   Inserted: (A) in the case of a certification described in paragraph (1) of subsection (d), specify in readily inspectable fashion the energy efficient components and other measures and their respective efficiency ratings, and which include a permanent label affixed to the electrical distribution panel of the dwelling,

   Inserted: (B) in the case of a certification described in paragraph (2) or (3) of subsection (d), provide test data on air infiltration and duct leakage, as appropriate, both before and after services are provided, provide a signed certification that all relevant aspects of the appropriate Environmental Protection Agency specifications have been met, and include a permanent label affixed to the electrical distribution panel of the dwelling, and

   Inserted: (C) in the case of a certification described in paragraph (4) of subsection (d), specify in readily inspectable fashion the energy efficiency rating of the natural gas or propane furnace or boiler, and which include a permanent label affixed to such furnace or boiler.

   Inserted: (4) Regulations.--

   Inserted: (A) In general.--In prescribing regulations under this subsection for certification methods described in paragraph (1)(B)(i), the Secretary, after examining the requirements for energy consultants and home energy ratings providers specified by the Mortgage Industry National Home Energy Rating Standards, shall prescribe procedures for calculating annual energy usage and cost reductions for heating and cooling and for the reporting of the results. Such regulations shall--

   Inserted: (i) provide that any calculation procedures be fuel neutral such that the same energy efficiency measures allow a dwelling to be eligible for the credit under this section regardless of whether such dwelling uses a gas or oil furnace or boiler or an electric heat pump, and

   Inserted: (ii) require that any computer software allow for the printing of the Federal tax forms necessary for the credit under this section and for the printing of forms for disclosure to the owner of the dwelling.

   Inserted: (B) Providers.--For purposes of paragraph (2)(A)(ii), the Secretary shall establish requirements for the designation of individuals based on the requirements for energy consultants and home energy raters specified by the Mortgage Industry National Home Energy Rating Standards.

   Inserted: (f) Other Definitions and Special Rules.--For purposes of this section--

   Inserted: (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:

   Inserted: (A) The amount of the credit allowable under subsection (a) by reason of expenditures for the qualified energy efficiency improvements 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.

   Inserted: (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.

   Inserted: (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 paid his tenant-stockholder's proportionate share (as defined in section 216(b)(3)) of the cost of qualified energy efficiency improvements made by such corporation.

   Inserted: (3) Condominiums.--

   Inserted: (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 paid the individual's proportionate share of the cost of qualified energy efficiency improvements made by such association.

   Inserted: (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.

   Inserted: (4) Building envelope component.--The term 'building envelope component' means--

   Inserted: (A) any insulation material or system which is specifically and primarily designed to reduce the heat loss or gain in a dwelling when installed in or on such dwelling,

   Inserted: (B) exterior windows (including skylights), and

   Inserted: (C) exterior doors.

   Inserted: (5) Manufactured homes included.--For purposes of this section, the term 'dwelling' includes a manufactured home which conforms to Federal Manufactured Home Construction and Safety Standards (24 C.F.R. 3280).

   Inserted: (6) Coordination with residential energy efficient property credit.--No credit shall be allowed under subsection (a) with respect to any property to the extent for which a credit is also allowed under section 25C.

   Inserted: (g) Basis Adjustment.--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.

   Inserted: (h) Termination.--

   Inserted: (1) Qualified energy efficient building envelope improvements.--Subsection (a) shall not apply to qualified energy efficient building envelope improvements installed after December 31, 2006.

   Inserted: (2) Qualified duct sealing services; qualified air infiltration reduction services; qualified natural gas or propane heating systems.--Subsection (a) shall not apply to--

   Inserted: (A) qualified duct sealing services or qualified air infiltration reduction services performed after December 31, 2005, and

   Inserted: (B) qualified natural gas or propane heating systems installed after December 31, 2005.

   Original wording

   Beginning on page 138, strike line 9 through page 146, line 14 and insert the following:

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As printed