HR 4043 IH

To permit the drawdown of the Strategic Petroleum Reserve when oil and gas prices in the United States rise sharply because of anticompetitive activity, to provide credits against income tax for certain energy efficiency improvements, and for other purposes.

March 21, 2000

Mr. BALDACCI (for himself, Mr. ABERCROMBIE, Mr. ALLEN, Mr. BORSKI, Mr. BRADY of Pennsylvania, Mr. CAPUANO, Mr. CROWLEY, Mr. DEFAZIO, Ms. DELAURO, Mr. DELAHUNT, Mr. DOYLE, Mr. FATTAH, Mr. FORBES, Mr. GEJDENSON, Mr. HINCHEY, Mr. HOLDEN, Ms. KAPTUR, Mrs. LOWEY, Mr. MASCARA, Mr. MCGOVERN, Mr. MORAN of Virginia, Mr. MURTHA, Mr. PASCRELL, and Mr. SANDERS) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To permit the drawdown of the Strategic Petroleum Reserve when oil and gas prices in the United States rise sharply because of anticompetitive activity, to provide credits against income tax for certain energy efficiency improvements, 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 `Fuel Energy Affordability and Conservation Act'.

TITLE I--DRAWDOWN OF STRATEGIC PETROLEUM RESERVE

SEC. 101. FINDINGS.

Congress finds that--

(1) a sharp, sustained increase in the price of crude oil would negatively affect the overall economic well-being of the United States;

(2) the United States currently imports roughly 55 percent of its oil;

(3) the oil market is often greatly influenced by nonmarket-based supply manipulations, including price fixing and production quotas; and

(4) heating oil price increases disproportionately harm the poor and the elderly.

SEC. 102. DRAWDOWN OF STRATEGIC PETROLEUM RESERVE.

Section 161(d) of the Energy Policy and Conservation Act (42 U.S.C. 6241(d)) is amended by adding at the end the following:

`(3) REDUCTION IN SUPPLY CAUSED BY ANTICOMPETITIVE CONDUCT-

`(A) IN GENERAL- For the purposes of this section, in addition to the circumstances set forth in section 3(8) and in paragraph (2) of this subsection, a severe energy supply interruption shall be deemed to exist if the President determines that--

`(i) there is a significant reduction in supply that--

`(I) is of significant scope and duration; and

`(II) has caused a significant increase in the price of petroleum products;

`(ii) the increase in price is likely to cause a significant adverse impact on regional economies; and

`(iii) a substantial cause of the reduction in supply is either--

`(I) the anticompetitive conduct of 1 or more foreign countries or international entities; or

`(II) a reduction in refinery utilization, as reported by the Energy Information Administration.

`(B) DEPOSIT AND USE OF PROCEEDS- Proceeds from the sale of petroleum drawn down pursuant to a Presidential determination under subparagraph (A) shall--

`(i) be deposited in the SPR Petroleum Account; and

`(ii) be used only for the purposes specified in section 167.

`(C) REPLACEMENT ARRANGEMENTS- When the Secretary executes a drawdown pursuant to a Presidential determination under subparagraph (A), the Secretary may enter into an arrangement that provides for the replacement of the petroleum products withdrawn from the Strategic Petroleum Reserve.'.

SEC. 103. REPORTING AND CONSULTATION REQUIREMENTS.

If the price of a barrel of crude oil exceeds $25 (in constant 1999 United States dollars) for a period greater than 14 days, the President, through the Secretary of Energy, shall, not later than 30 days after the end of the 14-day period, submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Commerce of the House of Representatives a report that--

(1) states the results of a comprehensive review of the causes and potential consequences of the price increase;

(2) provides an estimate of the likely duration of the price increase, based on analyses and forecasts of the Energy Information Administration;

(3) provides an analysis of the effects of the price increase on the cost of home heating oil; and

(4) states whether, and provides a specific rationale for why, the President does or does not support the drawdown and distribution of a specified amount of oil from the Strategic Petroleum Reserve.

TITLE II--CREDITS FOR ENERGY EFFICIENCY IMPROVEMENTS BY HOMEOWNERS AND SMALL BUSINESSES

SEC. 201. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

(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 25A the following new section:

`SEC. 25B. ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

`(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 20 percent of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during such taxable year.

`(b) LIMITATIONS-

`(1) MAXIMUM CREDIT- The credit allowed by this section with respect to a dwelling shall not exceed $2,000.

`(2) PRIOR CREDIT AMOUNTS FOR TAXPAYER ON SAME DWELLING TAKEN INTO ACCOUNT- If a credit was allowed to the taxpayer under subsection (a) with respect to a dwelling in 1 or more prior taxable years, the amount of the credit otherwise allowable for the taxable year with respect to that dwelling shall not exceed the amount of $2,000 reduced by the sum of the credits allowed under subsection (a) to the taxpayer with respect to the dwelling for all prior taxable years.

`(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 subpart A of part IV of subchapter A (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year.

`(d) QUALIFIED ENERGY EFFICIENCY IMPROVEMENTS- For purposes of this section, the term `qualified energy efficiency improvements' means any energy efficient building envelope component, and any energy efficient heating, cooling, or water heating appliance, the installation of which, by itself or in combination with other such components or appliances, is certified to improve the annual energy performance of the existing home by at least 30 percent, if--

`(1) such component or appliance is installed in or on a dwelling--

`(A) located in the United States, and

`(B) owned and used by the taxpayer as the taxpayer's principal residence (within the meaning of section 121),

`(2) the original use of such component or appliance commences with the taxpayer, and

`(3) such component or appliance reasonably can be expected to remain in use for at least 5 years.

Such certification shall be made by the contractor who installed such improvements, a local building regulatory authority, or a qualified energy consultant (such as a utility or an accredited home energy rating system provider).

`(e) SPECIAL RULES-

`(1) 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.

`(2) 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 he owns, such individual shall be treated as having paid his proportionate share of the cost of qualified energy efficiency improvements made by 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.

`(f) 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.

`(g) APPLICATION OF SECTION- Subsection (a) shall apply to qualified energy efficiency improvements installed during the period beginning on January 1, 2000, and ending on December 31, 2004.'.

(b) CONFORMING AMENDMENTS-

(1) Subsection (c) of section 23 of such Code is amended by striking `and section 1400C' and inserting `and sections 25B and 1400C'.

(2) Subparagraph (C) of section 25(e)(1) of such Code is amended by striking `and 1400C' and inserting `, 25B, and 1400C'.

(3) Subsection (d) of section 1400C of such Code is amended by inserting `and section 25B' after `other than this section'.

(4) Subsection (a) of section 1016 of such Code is amended by striking `and' at the end of paragraph (26), by striking the period at the end of paragraph (27) and inserting `; and', and by adding at the end the following new paragraph:

`(28) to the extent provided in section 25B(f), in the case of amounts with respect to which a credit has been allowed under section 25B.'.

(5) 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 25A the following new item:

`Sec. 25B. Energy efficiency improvements to existing homes.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years ending after December 31, 1999.

SEC. 202. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS BY SMALL BUSINESSES.

(a) IN GENERAL- Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by inserting after section 45C the following new section:

`SEC. 45D. ENERGY EFFICIENCY IMPROVEMENTS BY SMALL BUSINESSES.

`(a) IN GENERAL- For purposes of section 38, in the case of an eligible small business, the energy efficiency improvement credit determined under this section for the taxable year is an amount equal to 20 percent of the basis of each qualified energy efficiency improvements placed in service during such taxable year.

`(b) LIMITATIONS-

`(1) MAXIMUM CREDIT- The credit allowed by this section for the taxable year shall not exceed $2,000.

`(2) COORDINATION WITH REHABILITATION AND ENERGY CREDITS- For purposes of this section--

`(A) the basis of any property referred to in subsection (a) shall be reduced by that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)) or to the energy percentage of energy property (as determined under section 48(a)), and

`(B) expenditures taken into account under either section 47 or 48(a) shall not be taken into account under this section.

`(c) DEFINITIONS- For purposes of this section--

`(1) ELIGIBLE SMALL BUSINESS- The term `eligible small business' means any person engaged in a trade or business if the average annual gross receipts of such person (or any predecessor) for the 3-taxable-year period ending with such prior taxable year does not exceed $10,000,000. Rules similar to the rules of paragraphs (2) and (3) of section 448(c) shall apply for purposes of the preceding sentence.

`(2) QUALIFIED ENERGY EFFICIENCY IMPROVEMENTS- The term `qualified energy efficiency improvements' means any energy efficient property the installation of which, by itself or in combination with other such property, is certified to improve the annual energy performance of the structure to which it relates by at least 30 percent, if--

`(A) such property is installed in or on a structure located in the United States,

`(B)(i) the construction, reconstruction, or erection of such property is completed by the taxpayer, or

`(ii) such property which is acquired by the taxpayer if the original use of such property commences with the taxpayer,

`(C) depreciation (or amortization in lieu of depreciation) is allowable with respect to such property, and

`(D) such property reasonably can be expected to remain in use for at least 5 years.

Such certification shall be made by the contractor who installed such property, a local building regulatory authority, or a qualified energy consultant (such as a utility or an accredited energy rating system provider).

`(3) ENERGY EFFICIENT PROPERTY- The term `energy efficient property' means--

`(A) any energy efficient building envelope component, and

`(B) any energy efficient heating, cooling, or water heating appliance.

`(d) APPLICATION OF SECTION- Subsection (a) shall apply to property placed in service during the period beginning on January 1, 2000, and ending on December 31, 2004.'.

(b) CREDIT MADE PART OF GENERAL BUSINESS CREDIT- Subsection (b) of section 38 of such Code (relating to current year business credit) is amended by striking `plus' at the end of paragraph (11), by striking the period at the end of paragraph (12) and inserting `, plus', and by adding at the end thereof the following new paragraph:

`(13) in the case of an eligible small business (as defined in section 45D(c)), the energy efficiency improvement credit determined under section 45D.'.

(c) CREDIT ALLOWED AGAINST REGULAR AND MINIMUM TAX-

(1) IN GENERAL- Subsection (c) of section 38 of such Code (relating to limitation based on amount of tax) is amended by redesignating paragraph (3)

as paragraph (4) and by inserting after paragraph (2) the following new paragraph:

`(3) SPECIAL RULES FOR SMALL BUSINESS ENERGY EFFICIENCY IMPROVEMENT CREDIT-

`(A) IN GENERAL- In the case of the energy efficiency improvement credit--

`(i) this section and section 39 shall be applied separately with respect to the credit, and

`(ii) in applying paragraph (1) to the credit--

`(I) subparagraph (A) thereof shall not apply, and

`(II) the limitation under paragraph (1) (as modified by subclause (I)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the energy efficiency improvement credit).

`(B) ENERGY EFFICIENCY IMPROVEMENT CREDIT- For purposes of this subsection, the term `energy efficiency improvement credit' means the credit allowable under subsection (a) by reason of section 45D.'.

(2) CONFORMING AMENDMENT- Subclause (II) of section 38(c)(2)(A)(ii) of such Code is amended by inserting `or the energy efficiency improvement credit' after `employment credit'.

(d) LIMITATION ON CARRYBACK- Subsection (d) of section 39 of such Code is amended by adding at the end the following new paragraph:

`(9) NO CARRYBACK OF ENERGY EFFICIENCY IMPROVEMENT CREDIT BEFORE EFFECTIVE DATE- No portion of the unused business credit for any taxable year which is attributable to the credit determined under section 45D may be carried back to any taxable year ending before the date of the enactment of section 45D.'.

(e) DEDUCTION FOR CERTAIN UNUSED BUSINESS CREDITS- Subsection (c) of section 196 of such Code is amended by striking `and' at the end of paragraph (7), by striking the period at the end of paragraph (8) and inserting `, and', and by adding after paragraph (8) the following new paragraph:

`(9) the energy efficiency improvement credit determined under section 45D.'.

(f) CLERICAL AMENDMENT- The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 45C the following new item:

`Sec. 45D. Energy efficiency improvements by small businesses.'.

(g) EFFECTIVE DATE- The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.

END