,,ii  #aafth ,,congress  #b;d ,session  
,s4 #digd  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,december #h1  
#bjbj,mr4 ,king introduced the following
 bill2 which was read twice and referred
 to the ,committee on ,finance  ,a      
,,bill  ,to amend the ,internal ,revenue
 ,code of #aihf to establish a          
refundable tax credit for the           
installation of energy efficient air    
source heat pumps4  #a4 ,short title    
,this ,act may be cited as the ,air     
,source ,heat ,pump ,act of #bjbj4  #b4 
,refundable tax credit for air source   
heat pumps  7a7 ,in general ,subpart ,c 
of part ,,iv of subchapter ,a of chapter
 #a of the ,internal ,revenue ,code of  
#aihf is amended by inserting after     
section #cf the following new section3  
#cf;,a4 ,air source heat pump credit    
7a7 ,allowance of credit ,in the case of
 an individual1 there shall be allowed  
as a credit against the tax imposed by  
this chapter for the taxable year an    
amount equal to the lesser of-- 7#a7 #bj

 percent of any qualified air source    
heat pump expenditures1 or  7#b7 #hjj4  
7b7 ,qualified air source heat pump     
expenditures ,the term qualified air    
source heat pump expenditures means an  
expenditure for property which uses an  
air source heat pump1 as part of a      
ducted or ductless system1 to heat and  
cool a dwelling unit1 provided that--   
7#a7 the dwelling unit is located in the
 ,united ,states and used as the        
principal residence 7as such term is    
used in section #aba7 of the taxpayer1  
and  7#b7 the air source heat pump--    
7,a7 7i7 satisfies the applicable       
performance requirements to meet the    
,cold-,climate ,air-,source ,heat ,pump 
,specification1 as provided by          
,northeast ,energy ,efficiency          
,partnerships1 as in effect at the time 
that the expenditure for such equipment 
is made 7or any successor standards     
provided by ,northeast ,energy          
,efficiency ,partnerships71 or  7ii7    
received the most efficient             

certification under applicable ,energy  
,star program requirements which are in 
effect at the time that the expenditure 
for such property is made 7or any       
successor standards established by the  
,environmental ,protection ,agency71    
7,b7 is installed in accordance with the
 ,air ,conditioning ,contractors of     
,america ,,hvac ,quality ,installation  
,specification 7,,ansi_/,,acca ,standard
 #e ,,qi-#bjae71 or a subsequent version
 approved for this purpose by the       
,secretary of ,energy1 and  7,c7 is     
displacing heating load previously      
provided by an existing natural gas1    
propane1 resistive electric1 or oil     
central heating system4  7c7 ,special   
rules ,for purposes of this section--   
7#a7 ,application of certain rules      
,rules similar to the rules under       
paragraphs 7#a71 7#e71 7#f71 7#g71 and  
7#h7 of section #be;,d7e7 shall apply4  
7#b7 ,joint ownership  7,a7 ,in general 
,any expenditure otherwise qualifying as
 a qualified air source heat pump       

expenditure under this section shall not
 be treated as failing to so qualify    
merely because such expenditure was made
 with respect to #b or more dwelling    
units4  7,b7 ,limits applied separately 
,in the case of any expenditure         
described in subparagraph 7,a71 the     
amount of the credit allowable under    
subsection 7a7 shall 7subject to        
paragraph 7#a77 be computed separately  
with respect to the amount of the       
expenditure made for each dwelling unit4
  7#c7 ,property financed by subsidized 
energy financing ,for purposes of       
determining the amount of expenditures  
made by any individual with respect to  
any property1 there shall not be taken  
into account expenditures which are made
 from subsidized energy financing 7as   
defined in section #dh7;a77#d77;,c774   
7d7 ,basis adjustments ,for purposes of 
this subtitle1 if a credit is allowed   
under this section for any expenditure  
with respect to any property1 the       
increase in the basis of such property  

which would 7but for this subsection7   
result from such expenditure shall be   
reduced by the amount of the credit so  
allowed4  4  7b7 ,conforming amendments 
7#a7 ,section #fbaa7;b77#d77;,a7 of the 
,internal ,revenue ,code of #aihf is    
amended by inserting #cf;,a1 after #cf14
  7#b7 ,the table of sections for       
subpart ,c of part ,,iv of subchapter ,a
 of chapter #a of such ,code is amended 
by inserting after the item relating to 
section #cf the following new item3     
,sec4 #cf;,a4 ,air source heat pump     
credit4  4  7c7 ,effective date ,the    
amendments made by this section shall   
apply to taxable years beginning after  
the date of the enactment of this ,act4