To amend the Internal Revenue Code of 1986 to allow nonrefundable credits against income tax for certain gasoline, diesel fuel, and home energy consumption expenses, and for other purposes.

October 7, 2005

Mr. CROWLEY (for himself, Mr. ISRAEL, Mr. GRIJALVA, Ms. WASSERMAN SCHULTZ, and Mr. DAVIS of Illinois) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to allow nonrefundable credits against income tax for certain gasoline, diesel fuel, and home energy consumption expenses, 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 `Middle Class Energy Initiative Act of 2005'.

SEC. 2. CREDITS FOR CERTAIN GASOLINE, DIESEL FUEL, NATURAL GAS, KEROSENE, AND OIL EXPENSES.

(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 adding after section 25D the following new sections:

`SEC. 25E. CREDIT FOR QUALIFIED GASOLINE AND DIESEL FUEL EXPENSES.

`(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 the aggregate qualified gasoline and diesel fuel expenses paid or incurred by the individual during such taxable year.

`(b) Limitations-

`(1) DOLLAR AMOUNT- The credit allowed under subsection (a) for a taxable year shall not exceed $500.

`(2) ADJUSTED GROSS INCOME- If the adjusted gross income of the individual exceeds the amount that is twice the median adjusted gross income of taxpayers residing in the State in which such individual resides, the credit allowed under subsection (a) for a taxable year shall be zero.

`(3) AVERAGE GASOLINE PRICE- In the case of a taxable year in which the average price of a gallon of gasoline, as determined under the U.S. Regular All Formulations Retail Gasoline Prices by the Energy Information Administration of the Department of Energy, is not greater than $1.75 per gallon, the credit allowed under subsection (a) for such taxable year shall be zero.

`(c) Qualified Gasoline and Diesel Fuel Expenses- For purposes of this section, the term `qualified gasoline and diesel fuel expenses' means amounts paid or incurred by the individual for gasoline (as defined by section 4083(a)(2)) and diesel fuel (as defined by section 4083(a)(3)).

`SEC. 25F. CREDIT FOR QUALIFIED HOME ENERGY CONSUMPTION EXPENSES.

`(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 the aggregate qualified home energy consumption expenses paid or incurred by the individual during such taxable year.

`(b) Limitations-

`(1) DOLLAR AMOUNT- The credit allowed under subsection (a) for a taxable year shall not exceed $500.

`(2) ADJUSTED GROSS INCOME- If the adjusted gross income of the individual exceeds the amount that is twice the median adjusted gross income of taxpayers residing in the State in which such individual resides, the credit allowed under subsection (a) for a taxable year shall be zero.

`(c) Qualified Home Energy Consumption Expenses- For purposes of this section, the term `qualified home energy consumption expenses' means amounts paid or incurred by an individual for natural gas, kerosene, and oil for home energy consumption.'.

(b) Clerical Amendment- The table of sections for subpart A of such part IV is amended by inserting after the item relating to section 25D the following new items:

`Sec. 25E. Credit for qualified gasoline and diesel fuel expenses.

`Sec. 25F. Credit for qualified home energy consumption expenses.'.

(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2005.

SEC. 3. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

(a) In General- Paragraph (1) of section 167(h) of the Internal Revenue Code of 1986 (as amended by section 1329 of the Energy Tax Incentives Act of 2005) is amended by striking `Any geological and geophysical expenses' and inserting `An amount equal to 90 percent of any geological and geophysical expenses'.

(b) Effective Date- The amendment made by this section shall apply to taxable years beginning after December 31, 2005.

END