Building Efficiently Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 4317 To amend the Internal Revenue Code of 1986 to extend and expand the new energy efficient home credit, to extend the energy efficient commer- cial buildings deduction, to eliminate the basis reduction for low-income housing properties receiving certain energy benefits, and for other pur- poses. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 12, 2019 Mr. LANGEVIN (for himself and Mr. WELCH) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to extend and expand the new energy efficient home credit, to extend the energy efficient commercial buildings deduc- tion, to eliminate the basis reduction for low-income housing properties receiving certain energy benefits, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Building Efficiently 4 Act of 2019’’. 5 VerDate Sep 11 2014 00:22 Sep 14, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4317.IH H4317 kjohnson on DSK79L0C42 with BILLS 2 •HR 4317 IH SEC. 2. EXTENSION AND EXPANSION OF NEW ENERGY EFFI- 1 CIENT HOME CREDIT. 2 (a) EXTENSION OF CREDIT.—Section 45L(g) of the 3 Internal Revenue Code of 1986 is amended by striking 4 ‘‘December 31, 2017’’ and inserting ‘‘December 31, 5 2020’’. 6 (b) CREDIT FOR QUALIFIED ENERGY EFFICIENT 7 RENTAL PROPERTY.—Paragraph (2) of section 45L(a) of 8 such Code is amended by striking ‘‘and’’ at the end of 9 subparagraph (A), by striking the period at the end of 10 subparagraph (B) and inserting ‘‘, and’’, and by adding 11 at the end the following: 12 ‘‘(C) in lieu of subparagraphs (A) and (B), 13 in the case of qualified new energy efficient 14 home that is a qualified energy efficient resi- 15 dential rental property, 3.3 percent of the cost 16 of construction of such property, reduced by 17 any expenditure not taken into account under 18 this section by reason of subsection (f).’’. 19 (c) QUALIFIED ENERGY EFFICIENT RESIDENTIAL 20 RENTAL PROPERTY DEFINED.—Subsection (b) of section 21 45L of such Code is amended by adding at the end the 22 following: 23 ‘‘(5) QUALIFIED ENERGY EFFICIENT RESIDEN- 24 TIAL RENTAL PROPERTY.— 25 VerDate Sep 11 2014 00:22 Sep 14, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4317.IH H4317 kjohnson on DSK79L0C42 with BILLS 3 •HR 4317 IH ‘‘(A) IN GENERAL.—The term ‘qualified 1 energy efficient residential real property’ means 2 a building which is residential rental property 3 which is described in subparagraph (B), (C), or 4 (D). 5 ‘‘(B) NEW OR RECONSTRUCTED BUILD- 6 ING.—A building is described in this subpara- 7 graph if— 8 ‘‘(i) the certification requirements of 9 subparagraph (E) with respect to the 10 building are met, 11 ‘‘(ii) the original use of which com- 12 mences with the taxpayer, and 13 ‘‘(iii) the building is placed in service 14 after the date of the enactment of the 15 Building Efficiently Act of 2019. 16 ‘‘(C) IMPROVEMENTS TO EXISTING BUILD- 17 ING.—A building is described in this subpara- 18 graph if, only after improvements are made to 19 the building— 20 ‘‘(i) the certification requirements of 21 subparagraph (E) with respect to the 22 building are met, 23 ‘‘(ii) the original use of the improved 24 building commences with the taxpayer, 25 VerDate Sep 11 2014 00:22 Sep 14, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4317.IH H4317 kjohnson on DSK79L0C42 with BILLS 4 •HR 4317 IH ‘‘(iii) the improved building is placed 1 in service after the date of the enactment 2 of the Building Efficiently Act of 2019, 3 and 4 ‘‘(iv) the taxpayer elects to the appli- 5 cation of this paragraph with respect to 6 the building. 7 ‘‘(D) BUILDINGS ACQUIRED BY PUR- 8 CHASE.—A building is described in this sub- 9 paragraph if the building— 10 ‘‘(i) is acquired by purchase from an 11 unrelated person, 12 ‘‘(ii) meets the certification require- 13 ments of subparagraph (E), and 14 ‘‘(iii) is placed in service after the 15 date of the enactment of the Building Effi- 16 ciently Act of 2019. 17 ‘‘(E) CERTIFICATION REQUIREMENTS.— 18 The requirements of this subparagraph are met 19 if, with respect to a building, the building is 20 certified in accordance with subsection (d) as 21 being constructed, reconstructed, or retrofitted, 22 as the case may be, under a plan designed to 23 reduce energy and power consumption of the 24 VerDate Sep 11 2014 00:22 Sep 14, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4317.IH H4317 kjohnson on DSK79L0C42 with BILLS 5 •HR 4317 IH building by 40 percent or more in comparison 1 to— 2 ‘‘(i) in the case of retrofits made to 3 an existing building, the baseline annual 4 energy and power consumption of the 5 building, or 6 ‘‘(ii) in any other case, a reference 7 building which meets the minimum re- 8 quirements of the International Energy 9 Conservation Code 2018 using methods of 10 calculation under subsection (d). 11 ‘‘(F) BASELINE ANNUAL ENERGY AND 12 POWER CONSUMPTION.—The baseline annual 13 energy and power consumption of any building 14 shall be determined by using— 15 ‘‘(i) a building energy performance 16 benchmarking tool designated for purposes 17 of this paragraph by the Administrator of 18 the Environmental Protection Agency, 19 which is based upon energy and power con- 20 sumption data during the 1-year period 21 ending on the date on which retrofits 22 under the plan are placed in service, or 23 VerDate Sep 11 2014 00:22 Sep 14, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4317.IH H4317 kjohnson on DSK79L0C42 with BILLS 6 •HR 4317 IH ‘‘(ii) such other methods of calculation 1 as certified by the Secretary in accordance 2 with subsection (d). 3 ‘‘(G) RELATED PERSONS.—For purposes 4 of subparagraph (D), a person is related to an- 5 other person if— 6 ‘‘(i) the persons are members of an 7 affiliated group (as defined in section 8 1504), or 9 ‘‘(ii) the persons have a relationship 10 described in subsection (b) of section 267; 11 except that, for purposes of this clause, the 12 phrase ‘80 percent or more’ shall be sub- 13 stituted for the phrase ‘more than 50 per- 14 cent’ each place it appears in such sub- 15 section and rules similar to the rules of 16 subsections (c) and (e) (other than para- 17 graphs (4) and (5) thereof) shall apply.’’. 18 (d) CONFORMING AMENDMENT.—Section 45L(d) is 19 amended by striking ‘‘subsection (c)’’ both places it ap- 20 pears and inserting ‘‘subsection (b)(5) or (c)’’. 21 (e) EFFECTIVE DATES.— 22 (1) EXTENSION.—The amendment made by 23 subsection (a) shall apply to property placed in serv- 24 ice after December 31, 2017. 25 VerDate Sep 11 2014 00:22 Sep 14, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4317.IH H4317 kjohnson on DSK79L0C42 with BILLS 7 •HR 4317 IH (2) QUALIFIED ENERGY EFFICIENT RENTAL 1 PROPERTY.—The amendments made by subsections 2 (b), (c), and (d) shall apply to property placed in 3 service after the date of the enactment of this Act, 4 in taxable years ending after such date. 5 SEC. 3. EXTENSION OF ENERGY EFFICIENT COMMERCIAL 6 BUILDINGS DEDUCTION. 7 (a) IN GENERAL.—Section 179D(h) of the Internal 8 Revenue Code of 1986 is amended by striking ‘‘December 9 31, 2017’’ and inserting ‘‘December 31, 2020’’. 10 (b) EFFECTIVE DATE.—The amendment made by 11 this section shall apply to property placed in service after 12 December 31, 2017. 13 SEC. 4. ELIMINATION OF BASIS REDUCTION FOR LOW-IN- 14 COME HOUSING PROPERTIES RECEIVING 15 CERTAIN ENERGY BENEFITS. 16 (a) NEW ENERGY EFFICIENT HOME CREDIT.—Sub- 17 section (e) of section 45L of the Internal Revenue Code 18 of 1986 is amended— 19 (1) by striking ‘‘ADJUSTMENT.—For purposes’’ 20 and inserting ‘‘ADJUSTMENT.— 21 ‘‘(1) IN GENERAL.—For purposes’’; and 22 (2) by adding at the end the following new 23 paragraph: 24 VerDate Sep 11 2014 00:22 Sep 14, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4317.IH H4317 kjohnson on DSK79L0C42 with BILLS 8 •HR 4317 IH ‘‘(2) EXCEPTION FOR LOW-INCOME HOUSING 1 PROPERTIES.—Paragraph (1) shall not apply to any 2 property with respect to which a credit is allowed 3 under section 42.’’. 4 (b) ENERGY EFFICIENT COMMERCIAL BUILDINGS 5 DEDUCTION.—Subsection (e) of section 179D of the In- 6 ternal Revenue Code of 1986 is amended— 7 (1) by striking ‘‘REDUCTION.—For purposes’’ 8 and inserting ‘‘REDUCTION.— 9 ‘‘(1) IN GENERAL.—For purposes’’; and 10 (2) by adding at the end the following new 11 paragraph: 12 ‘‘(2) EXCEPTION FOR LOW-INCOME HOUSING 13 PROPERTIES.—Paragraph (1) shall not apply to any 14 property with respect to which a credit is allowed 15 under section 42.’’. 16 (c) ENERGY CREDIT.—Paragraph (3) of section 17 50(c) of the Internal Revenue Code of 1986 is amended— 18 (1) by striking ‘‘and’’ at the end of subpara- 19 graph (A); 20 (2) by striking the period at the end of sub- 21 paragraph (B) and inserting ‘‘, and’’; and 22 (3) by adding at the end the following new sub- 23 paragraph: 24 VerDate Sep 11 2014 00:22 Sep 14, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4317.IH H4317 kjohnson on DSK79L0C42 with BILLS 9 •HR 4317 IH ‘‘(C) paragraph (1) shall not apply to any 1 property with respect to which a credit is al- 2 lowed under section 42.’’. 3 (d) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to property placed in service after 5 the date of the enactment of this Act, in taxable years 6 ending after such date. 7 Æ VerDate Sep 11 2014 00:22 Sep 14, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\H4317.IH H4317 kjohnson on DSK79L0C42 with BILLS