article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Renewable Energy Act for Credit on Taxes''. SEC. 2. REFUNDABLE CREDIT FOR RENEWABLE ENERGY PROPERTY. (a) In General.--Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by redesignating section 35 as section 36 and by inserting after section 34 the following new section: ``SEC. 35. RENEWABLE ENERGY PROPERTY. ``(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 35 percent of the expenditures for renewable energy property made by the taxpayer during the taxable year. ``(b) Limitation.-- ``(1) Maximum credit.--The credit allowed under subsection (a) shall not exceed the lesser of-- ``(A) $6,000 ($50,000 in the case of renewable energy property used for nonresidential business purposes) for each system of renewable energy property, or ``(B) $4.50 per watt of rated system electricity output or equivalent. ``(2) Location of structure.--No expenditure may be taken into account under this section unless such expenditure is made by the taxpayer for property installed on or in connection with a structure which is located in the United States. ``(3) Rating system electricity output.--For purposes of paragraph (1)(B), the rated system electricity output or equivalent for-- ``(A) solar water heating property shall be the output determined by the Secretary on the basis of evidence acceptable to the Secretary which is submitted by manufacturers of such property and which includes information relating to one year of reliable operation of such property, ``(B) photovoltaic property shall be the output certified by a nationally recognized testing laboratory as meeting the requirements of the Underwriters Laboratory Standard 1703, ``(C) wind energy property shall be the output-- ``(i) certified as meeting the requirements of a small wind turbine-specific safety or performance standard adopted by a national or international standards setting body, including International Electric Code 61400-2, or ``(ii) determined by the Secretary on the basis of evidence acceptable to the Secretary which is submitted by manufacturers of such property and which includes information relating to one year of reliable operation of such property at a site with average annual wind speeds of at least 12 miles per hour, and ``(D) fuel cell property shall be the output certified as meeting the requirements specified by the American Gas Association in document entitled `AGA Requirements for Fuel Cell Power Plants', No. 8-90. The Secretary shall determine who makes the certifications for purposes of subparagraphs (C)(i) and (D). ``(c) Definitions.--For purposes of this section-- ``(1) Renewable energy property.--The term `renewable energy property' means property which is-- ``(A) qualified solar water heating property, ``(B) qualified photovoltaic property, ``(C) qualified wind energy property, or ``(D) qualified fuel cell property. ``(2) Qualified solar water heating property.--The term `qualified solar water heating property' means property that uses solar energy to heat water for use in a structure with respect to which a majority of the energy is derived from the sun. ``(3) Qualified photovoltaic property.--The term `qualified photovoltaic property' means property that uses solar energy to generate electricity for use in a structure. ``(4) Solar panels.--No expenditure relating to a solar panel or other property installed as a roof (or portion thereof) shall fail to be treated as property described in paragraph (2) or (3) solely because it constitutes a structural component of the structure on which it is installed. ``(5) Qualified wind energy property.--The term `qualified wind energy property' means property which uses wind energy to generate electricity for use in a structure. ``(6) Qualified fuel cell property.--The term `qualified fuel cell property' means property which uses an electrochemical process to generate electricity for use in a structure. ``(7) Labor costs.--Expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property described in paragraph (2), (3), (5), or (6) and for piping or wiring to interconnect such property to the dwelling unit shall be taken into account for purposes of this section. ``(d) Special Rules.--For purposes of this section-- ``(1) Dollar amounts in case of joint occupancy.--In the case of any structure which is jointly occupied and used during any calendar year by 2 or more persons 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 persons with respect to such structure shall be determined by treating all of such persons as 1 taxpayer whose taxable year is such calendar year. ``(B) There shall be allowable with respect to such expenditures to each of such person, 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 person during such calendar year bears to the aggregate of such expenditures made by all of such persons 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 he 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) Joint ownership of items of renewable energy property.-- ``(A) In general.--Any expenditure otherwise qualifying as an expenditure described in paragraph (2), (3), (5), or (6) of subsection (c) shall not be treated as failing to so qualify merely because such expenditure was made with respect to 2 or more structures. ``(B) Limits applied separately.--In the case of any expenditure described in subparagraph (A), the amount of the credit allowable under subsection (a) shall (subject to paragraph (1)) be computed separately with respect to the amount of the expenditure made for each structure. ``(5) Allocation in certain cases.--If 80 percent or more of the use of an item is for residential purposes, then the item shall be treated as used only for residential purposes. ``(6) 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. ``(7) Reduction of credit for grants, tax-exempt bonds, and subsidized energy financing.--The rules of section 29(b)(3) shall apply for purposes of this section. ``(8) Denial of double benefit.--No credit shall be allowed under subsection (a) for any expense for which a deduction or credit is allowed under any other provision of this chapter. ``(e) 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. ``(f) Termination.--The credit allowed under this section shall not apply to taxable years beginning after December 31, 2006.''. (b) Conforming and Technical Amendments.-- (1) 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 35(e), in the case of amounts with respect to which a credit has been allowed under section 35.'' (2) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting ``or from section 35 of such Code'' before the period at the end. (3) The table of sections for such subpart C is amended by striking the item relating to section 35 and inserting the following new items: ``Sec. 35. Renewable energy property. ``Sec. 36. Overpayment of taxes.'' (c) Effective Date.--The amendments made by this section shall apply to taxable years ending after December 31, 2001.
summary: Renewable Energy Act for Credit on Taxes - Amends the Internal Revenue Code to allow a refundable limited credit through tax year 2006 for expenditures for qualifying renewable energy property (solar water heating, photovoltaic, wind energy, or fuel cell properties) installed on or in connection with a U.S.-sited residential or nonresidential structure.