‘(a) Allowance of Credit- There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 30 percent of the amounts paid or incurred by the taxpayer during such taxable year for certified WaterSense labeled property.
‘(b) Lifetime Limitation- The aggregate amount of the credits allowed under this section with respect to any taxpayer for any taxable year shall not exceed the excess (if any) of $1,500 over the aggregate credits allowed under this section with respect to such taxpayer for all prior taxable years.
‘(c) Certified WaterSense Labeled Property- For purposes of this section, the term ‘certified WaterSense labeled property’ means any property--
‘(1) which is certified by a licensed independent third party as meeting specifications of the Environmental Protection Agency WaterSense program, and
‘(2) the original use of which commences with the taxpayer.
‘(d) Application With Other Credits-
‘(1) BUSINESS CREDIT TREATED AS PART OF GENERAL BUSINESS CREDIT- So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).
‘(2) PERSONAL CREDIT-
‘(A) IN GENERAL- For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.
‘(B) LIMITATION BASED ON AMOUNT OF TAX- In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall not exceed the excess of--
‘(i) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over
‘(ii) the sum of the credits allowable under subpart A (other than this section and sections 23, 25D, 30, and 30D) and section 27 for the taxable year.
‘(e) Special Rules- For purposes of this section--
‘(1) AGGREGATION RULES- All persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (m) or (o) of section 414, shall be treated as a one person.
‘(2) BASIS REDUCTION- For purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed (determined without regard to subsection (d)).
‘(3) NO DOUBLE BENEFIT- The amount of any deduction or other credit allowable under this chapter with respect to any property for which credit is allowable under subsection (a) shall be reduced by the amount of credit allowed under subsection (a) with respect to such property (determined without regard to subsection (d)).
‘(4) PROPERTY USED OUTSIDE UNITED STATES NOT QUALIFIED- No credit shall be allowable under subsection (a) with respect to any property referred to in section 50(b)(1).
‘(f) Termination- This section shall not apply to any property placed in service after December 31, 2010.’.
(b) Conforming Amendments-
(1)(A) Section 24(b)(3)(B) of the Internal Revenue Code of 1986 is amended by striking ‘and 30D’ and inserting ‘30D, and 30E’.
(B) Section 25(e)(1)(C)(ii) of such Code is amended by inserting ‘30E,’ after ‘30D,’.
(C) Section 25B(g)(2) of such Code is amended by striking ‘and 30D’ and inserting ‘30D, and 30E’.
(D) Section 26(a)(1) of such Code is amended by striking ‘and 30D’ and inserting ‘30D, and 30E’.
(E) Section 904(i) of such Code is amended by striking ‘and 30D’ and inserting ‘30D, and 30E’.
(F) Section 1400C(d)(2) of such Code is amended by striking ‘and 30D’ and inserting ‘30D, and 30E’.
(2) Section 1016(a) of such Code is amended by striking ‘and’ at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting ‘, and’, and by adding at the end the following new paragraph:
‘(38) to the extent provided in section 30E(e)(2).’.
(3) The table of sections for subpart B of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:
‘Sec. 30E. WaterSense labeled property.’.
(c) Effective Date- The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.