text: 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.
target: 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.
feat_title: To amend the Internal Revenue Code of 1986 to allow a refundable credit for expenditures for renewable energy property.