S.Amdt. 1488

1. Adds SEC. ____. QUALIFIED DUCT SEALING SERVICES AND QUALIFIED AIR INFILTRATION REDUCTION SERVICES at the end of title III of division B

   Adds a section

   Inserted: SEC. ____. QUALIFIED DUCT SEALING SERVICES AND QUALIFIED AIR INFILTRATION REDUCTION SERVICES.

   Inserted: (a) In General.--Subpart A of part IV of subchapter A of chapter 1 (relating to nonrefundable personal credits), as amended by this Act, is amended by inserting after section 25D the following new section:

   Inserted: "SEC. 25E. QUALIFIED DUCT SEALING SERVICES AND QUALIFIED AIR INFILTRATION REDUCTION SERVICES.

   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 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 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) Qualified Duct Sealing Services; Qualified Air Infiltration Reduction Services.--For purposes of this section--

   Inserted: "(1) 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).

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   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: "(2) 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: "(e) Certification.--

   Inserted: "(1) Methods of certification.--

   Inserted: "(A) Qualified duct sealing services.--The determination and certification described in paragraph (1) of subsection (d) shall be on the basis of test reports performed in accordance with the Energy Star Duct Specifications.

   Inserted: "(B) Qualified air infiltration reduction 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 Home Sealing Specifications.

   Inserted: "(2) Provider.--A determination or certification described in subsection (d) shall be provided by a State-licensed contractor.

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

   Inserted: "(f) 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 qualified duct sealing services or qualified air infiltration reduction services 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 duct sealing services or qualified air infiltration reduction services expenditures 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 duct sealing services or qualified air infiltration reduction services expenditures 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) 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: "(5) No double benefit.--The amount of any deduction or other credit allowable under this chapter for any cost taken into account in computing the amount of the credit determined under subsection (a) shall be reduced by the amount of such credit attributable to such cost.

   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.--Subsection (a) shall not apply to qualified duct sealing services or qualified air infiltration reduction services performed after December 31, 2005.".

   Inserted: (b) Credit Allowed Against Regular Tax and Alternative Minimum Tax.--

   Inserted: (1) In general.--Section 25E(b), as added by subsection (a), is amended--

   Inserted: (A) by striking "The credit" and inserting the following:

   Inserted: "(1) Dollar amount.--The credit", and

   Inserted: (B) by adding at the end the following new paragraph:

   Inserted: "(2) Limitation based on amount of tax.--The credit allowed under subsection (a) for the taxable year shall not exceed the excess of--

   Inserted: "(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over

   Inserted: "(B) the sum of the credits allowable under this subpart (other than this section) and section 27 for the taxable year.".

   Inserted: (2) Conforming amendments.--

   Inserted: (A) Section 25E(c), as added by subsection (a), is amended by striking "section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section)" and inserting "subsection (b)(3)".

   Inserted: (B) Section 23(b)(4)(B), as amended by this Act, is amended by striking "sections 25C and 25D" and inserting "sections 25C, 25D, and 25E".

   Inserted: (C) Section 24(b)(3)(B), as amended by this Act, is amended by striking "and 25D" and inserting "25D, and 25E".

   Inserted: (D) Section 25(e)(1)(C), as amended by this Act, is amended by inserting "25E," after "25D,".

   Inserted: (E) Section 25B(g)(2), as amended by this Act, is amended by striking "23, 25C, and 25D" and inserting "23, 25C, 25D, and 25E".

   Inserted: (F) Section 26(a)(1), as amended by this Act, is amended by striking "and 25D" and inserting "25D, and 25E".

   Inserted: (G) Section 904(h), as amended by this Act, is amended by striking "and 25D" and inserting "25D, and 25E".

   Inserted: (H) Section 1400C(d), as amended by this Act, is amended by striking "and 25D" and inserting "25D, and 25E".

   Inserted: (c) Additional Conforming Amendments.--

   Inserted: (1) Section 23(c), as in effect for taxable years beginning before January 1, 2004, and as amended by this Act, is amended by inserting ", 25E," after "sections 25D".

   Inserted: (2) Section 25(e)(1)(C), as in effect for taxable years beginning before January 1, 2004, and as amended by this Act, is amended by inserting "25E," after "25D,".

   Inserted: (3) Section 1016(a), as amended by this Act, is amended by striking "and" at the end of paragraph (33), by striking the period at the end of paragraph (34) and inserting "; and", and by adding at the end the following new paragraph:

   Inserted: "(35) to the extent provided in section 25E(g), in the case of amounts with respect to which a credit has been allowed under section 25E.".

   Inserted: (4) Section 1400C(d), as in effect for taxable years beginning before January 1, 2004, and as amended by this Act, is amended by striking "sections 25C and 25D" and inserting "sections 25C, 25D, and 25E".

   Inserted: (5) The table of sections for subpart A of part IV of subchapter A of chapter 1, as amended by this Act, is amended by inserting after the item relating to section 25D the following new item:

   Inserted: "Sec. 25E. Qualified duct sealing services and qualified air infiltration reduction services.".

   Inserted: (d) Effective Dates.--

   Inserted: (1) In general.--Except as provided by paragraph (2), the amendments made by this section shall apply to property installed after the date of the enactment of this Act, in taxable years ending after such date.

   Inserted: (2) Subsection (b).--The amendments made by subsection (b) shall apply to taxable years beginning after December 31, 2003.

   Original wording

   At the end of title III of Division B, insert the following:

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As printed