text: SECTION 1. SHORT TITLE; ETC.
  
      (a) Short Title.--This Act may be cited as the ``Cut Energy Bills 
  at Home Act''.
      (b) Amendment of 1986 Code.--Except as otherwise expressly 
  provided, whenever in this Act an amendment or repeal is expressed in 
  terms of an amendment to, or repeal of, a section or other provision, 
  the reference shall be considered to be made to a section or other 
  provision of the Internal Revenue Code of 1986.
  
  SEC. 2. PERFORMANCE BASED HOME ENERGY IMPROVEMENTS.
  
      (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
  is amended by adding at the end the following new section:
  
  ``SEC. 25E. PERFORMANCE BASED ENERGY IMPROVEMENTS.
  
      ``(a) 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 for a qualified whole home energy efficiency retrofit an 
  amount determined under subsection (b).
      ``(b) Amount Determined.--
              ``(1) In general.--Subject to paragraph (4), the amount 
          determined under this subsection is equal to--
                      ``(A) the base amount under paragraph (2), 
                  increased by
                      ``(B) the amount determined under paragraph (3).
              ``(2) Base amount.--For purposes of paragraph (1)(A), the 
          base amount is $2,000, but only if the energy use for the 
          residence is reduced by at least 20 percent below the baseline 
          energy use for such residence as calculated according to 
          paragraph (5).
              ``(3) Increase amount.--For purposes of paragraph (1)(B), 
          the amount determined under this paragraph is $500 for each 
          additional 5 percentage point reduction in energy use.
              ``(4) Limitation.--In no event shall the amount determined 
          under this subsection exceed the lesser of--
                      ``(A) $5,000 with respect to any residence, or
                      ``(B) 30 percent of the qualified home energy 
                  efficiency expenditures paid or incurred by the 
                  taxpayer under subsection (c) with respect to such 
                  residence.
              ``(5) Determination of energy use reduction.--For purposes 
          of this subsection--
                      ``(A) In general.--The reduction in energy use for 
                  any residence shall be determined by modeling the 
                  annual predicted percentage reduction in total energy 
                  costs for heating, cooling, hot water, and permanent 
                  lighting. It shall be modeled using computer modeling 
                  software approved under subsection (d)(2) and a 
                  baseline energy use calculated according to subsection 
                  (d)(1)(C).
                      ``(B) Energy costs.--For purposes of subparagraph 
                  (A), the energy cost per unit of fuel for each fuel 
                  type shall be determined by dividing the total actual 
                  energy bill for the residence for that fuel type for 
                  the most recent available 12-month period by the total 
                  energy units of that fuel type used over the same 
                  period.
      ``(c) Qualified Home Energy Efficiency Expenditures.--For purposes 
  of this section, the term `qualified home energy efficiency 
  expenditures'--
              ``(1) means any amount paid or incurred by the taxpayer 
          during the taxable year for a qualified whole home energy 
          efficiency retrofit, including the cost of diagnostic 
          procedures, labor, and modeling,
              ``(2) includes only measures that have an average estimated 
          life of 5 years or more as determined by the Secretary, after 
          consultation with the Secretary of Energy,
              ``(3) does not include any amount which is paid or incurred 
          in connection with any expansion of the building envelope of 
          the residence, and
              ``(4) does not include improvements to swimming pools or 
          hot tubs or any other expenditure specifically excluded by the 
          Secretary, after consultation with the Secretary of Energy.
      ``(d) Qualified Whole Home Energy Efficiency Retrofit.--For 
  purposes of this section--
              ``(1) In general.--The term `qualified whole home energy 
          efficiency retrofit' means the implementation of measures 
          placed in service during the taxable year intended to reduce 
          the energy use of the principal residence of the taxpayer which 
          is located in the United States. A qualified whole home energy 
          efficiency retrofit shall--
                      ``(A) be designed, implemented, and installed by a 
                  contractor which is--
                              ``(i) accredited by the Building 
                          Performance Institute (hereafter in this 
                          section referred to as `BPI') or a preexisting 
                          BPI accreditation-based State certification 
                          program with enhancements to achieve State 
                          energy policy,
                              ``(ii) a Residential Energy Services 
                          Network (hereafter in this section referred to 
                          as `RESNET') accredited Energy Smart Home 
                          Performance Team, or
                              ``(iii) accredited by an equivalent 
                          certification program approved by the 
                          Secretary, after consultation with the 
                          Secretary of Energy, for this purpose,
                      ``(B) install a set of measures modeled to achieve 
                  a reduction in energy use of at least 20 percent below 
                  the baseline energy use established in subparagraph 
                  (C), using computer modeling software approved under 
                  paragraph (2),
                      ``(C) establish the baseline energy use by 
                  calibrating the model using sections 3 and 4 and Annex 
                  D of BPI Standard BPI-2400-S-2011: Standardized 
                  Qualification of Whole House Energy Savings Estimates, 
                  or an equivalent standard approved by the Secretary, 
                  after consultation with Secretary of Energy, for this 
                  purpose,
                      ``(D) document the measures implemented in the 
                  residence through photographs taken before and after 
                  the retrofit, including photographs of its visible 
                  energy systems and envelope as relevant, and
                      ``(E) implement a test-out procedure, following 
                  guidelines of the applicable certification program 
                  specified under clause (i) or (ii) of subparagraph (A), 
                  or equivalent guidelines approved by the Secretary, 
                  after consultation with the Secretary of Energy, for 
                  this purpose, to ensure--
                              ``(i) the safe operation of all systems 
                          post retrofit, and
                              ``(ii) that all improvements are included 
                          in, and have been installed according to, 
                          standards of the applicable certification 
                          program specified under clause (i) or (ii) of 
                          subparagraph (A), or equivalent standards 
                          approved by the Secretary, after consultation 
                          with the Secretary of Energy, for this purpose.
                  For purposes of subparagraph (A)(iii), an organization 
                  or State may submit an equivalent certification program 
                  for approval by the Secretary, in consultation with the 
                  Secretary of Energy. The Secretary shall approve or 
                  deny such submission not later than 180 days after 
                  receipt, and, if the Secretary fails to respond in that 
                  time period, the submitted equivalent certification 
                  program shall be considered approved.
              ``(2) Approved modeling software.--For purposes of 
          paragraph (1)(B), the contractor shall use modeling software 
          certified by RESNET as following the software verification test 
          suites in section 4.2.1 of RESNET Publication No. 06-001 or 
          certified by an alternative organization as following an 
          equivalent standard, as approved by the Secretary, after 
          consultation with the Secretary of Energy, for this purpose.
              ``(3) Documentation.--The Secretary, after consultation 
          with the Secretary of Energy, shall prescribe regulations 
          directing what specific documentation is required to be 
          retained or submitted by the taxpayer in order to claim the 
          credit under this section, which shall include, in addition to 
          the photographs under paragraph (1)(D), a form approved by the 
          Secretary that is completed and signed by the qualified whole 
          home energy efficiency retrofit contractor under penalties of 
          perjury. Such form shall include--
                      ``(A) a statement that the contractor followed the 
                  specified procedures for establishing baseline energy 
                  use and estimating reduction in energy use,
                      ``(B) the name of the software used for calculating 
                  the baseline energy use and reduction in energy use, 
                  the percentage reduction in projected energy savings 
                  achieved, and a statement that such software was 
                  certified for this program by the Secretary, after 
                  consultation with the Secretary of Energy,
                      ``(C) a statement that the contractor will retain 
                  the details of the calculations and underlying energy 
                  bills for 5 years and will make such details available 
                  for inspection by the Secretary or the Secretary of 
                  Energy, if so requested,
                      ``(D) a list of measures installed and a statement 
                  that all measures included in the reduction in energy 
                  use estimate are included in, and installed according 
                  to, standards of the applicable certification program 
                  specified under clause (i) or (ii) of subparagraph (A), 
                  or equivalent standards approved by the Secretary, 
                  after consultation with the Secretary of Energy,
                      ``(E) a statement that the contractor meets the 
                  requirements of paragraph (1)(A), and
                      ``(F) documentation of the total cost of the 
                  project in order to comply with the limitation under 
                  subsection (b)(4)(B).
      ``(e) Additional Rules.--For purposes of this section--
              ``(1) No double benefit.--
                      ``(A) In general.--With respect to any residence, 
                  no credit shall be allowed under this section for any 
                  taxable year in which the taxpayer claims a credit 
                  under section 25C.
                      ``(B) Renewable energy systems and appliances.--In 
                  the case of a renewable energy system or appliance that 
                  qualifies for another credit under this chapter, the 
                  resulting reduction in energy use shall not be taken 
                  into account in determining the percentage energy use 
                  reductions under subsection (b).
                      ``(C) No double benefit for certain expenditures.--
                  The term `qualified home energy efficiency 
                  expenditures' shall not include any expenditure for 
                  which a deduction or credit is claimed by the taxpayer 
                  under this chapter for the taxable year or with respect 
                  to which the taxpayer receives any Federal energy 
                  efficiency rebate.
              ``(2) Principal residence.--The term `principal residence' 
          has the same meaning as when used in section 121.
              ``(3) Special rules.--Rules similar to the rules under 
          paragraphs (4), (5), (6), (7), and (8) of section 25D(e) and 
          section 25C(e)(2) shall apply, as determined by the Secretary, 
          after consultation with the Secretary of Energy.
              ``(4) Basis adjustments.--For purposes of this subtitle, if 
          a credit is allowed under this section with respect to any 
          expenditure with respect to any property, the increase in the 
          basis of such property which would (but for this paragraph) 
          result from such expenditure shall be reduced by the amount of 
          the credit so allowed.
              ``(5) Election not to claim credit.--No credit shall be 
          determined under subsection (a) for the taxable year if the 
          taxpayer elects not to have subsection (a) apply to such 
          taxable year.
              ``(6) Multiple year retrofits.--If the taxpayer has claimed 
          a credit under this section in a previous taxable year, the 
          baseline energy use for the calculation of reduced energy use 
          must be established after the previous retrofit has been placed 
          in service.
      ``(f) Termination.--This section shall not apply with respect to 
  any costs paid or incurred after December 31, 2016.
      ``(g) Secretary Review.--The Secretary, after consultation with the 
  Secretary of Energy, shall establish a review process for the retrofits 
  performed, including an estimate of the usage of the credit and a 
  statistically valid analysis of the average actual energy use 
  reductions, utilizing utility bill data collected on a voluntary basis, 
  and report to Congress not later than June 30, 2014, any findings and 
  recommendations for--
              ``(1) improvements to the effectiveness of the credit under 
          this section, and
              ``(2) expansion of the credit under this section to rental 
          units.''.
      (b) Conforming Amendments.--
              (1) Section 1016(a) is amended--
                      (A) by striking ``and'' at the end of paragraph 
                  (36),
                      (B) by striking the period at the end of paragraph 
                  (37) and inserting ``, and'', and
                      (C) by adding at the end the following new 
                  paragraph:
              ``(38) to the extent provided in section 25E(e)(4), in the 
          case of amounts with respect to which a credit has been allowed 
          under section 25E.''.
              (2) Section 6501(m) is amended by inserting ``25E(e)(5),'' 
          after ``section''.
              (3) The table of sections for subpart A of part IV of 
          subchapter A chapter 1 is amended by inserting after the item 
          relating to section 25D the following new item:
  
  ``Sec. 25E. Performance based energy improvements.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to amounts paid or incurred for a qualified whole home energy 
  efficiency retrofit placed in service after December 31, 2011.
target: Cut Energy Bills at Home Act - Amends the Internal Revenue Code to allow individual taxpayers a tax credit for the cost of a qualified whole home energy efficiency retrofit for the purpose of reducing the energy use of the taxpayer's principal residence.  Limits the amount of such credit to the lesser of $5,000 or 30% of the qualified home energy efficiency expenditures paid by the taxpayer to reduce residential energy use. Sets forth requirements for a qualified whole home energy efficiency retrofit, including design, testing, and documentation requirements. Terminates such credit after 2016.
  
  Directs the Secretary of the Treasury to establish a review process for home energy efficiency retrofits, including an estimate of usage of the tax credit and an analysis of the average actual energy use reductions.
feat_title: A bill to amend the Internal Revenue Code of 1986 to provide a credit for performance based home energy improvements, and for other purposes.