Home Energy Savings Act

II 116TH CONGRESS 1ST SESSION S. 2588 To amend the Internal Revenue Code of 1986 to extend and update the credit for nonbusiness energy property. IN THE SENATE OF THE UNITED STATES SEPTEMBER 26, 2019 Ms. HASSAN (for herself and Ms. COLLINS) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to extend and update the credit for nonbusiness energy property. 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 ‘‘Home Energy Savings 4 Act’’. 5 SEC. 2. EXTENSION OF CREDIT FOR NONBUSINESS ENERGY 6 PROPERTY. 7 (a) IN GENERAL.—Subsection (g)(2) of section 25C 8 of the Internal Revenue Code of 1986 is amended by strik- 9 VerDate Sep 11 2014 02:21 Oct 05, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2588.IS S2588 kjohnson on DSK79L0C42 with BILLS 2 •S 2588 IS ing ‘‘December 31, 2017’’ and inserting ‘‘December 31, 1 2019’’. 2 (b) EFFECTIVE DATE.—The amendments made by 3 this section shall apply to property placed in service after 4 December 31, 2017. 5 SEC. 3. UPDATING CREDIT FOR NONBUSINESS ENERGY 6 PROPERTY. 7 (a) IN GENERAL.—Section 25C of the Internal Rev- 8 enue Code of 1986, as amended by section 2, is amend- 9 ed— 10 (1) in subsection (a)(1), by striking ‘‘10 per- 11 cent’’ and inserting ‘‘15 percent’’, 12 (2) in subsection (b)— 13 (A) in paragraph (1)— 14 (i) by striking ‘‘$500’’ and inserting 15 ‘‘$1,200’’, and 16 (ii) by striking ‘‘December 31, 2005’’ 17 and inserting ‘‘December 31, 2019’’, and 18 (B) by striking paragraphs (2) and (3) and 19 inserting the following: 20 ‘‘(2) LIMITATION ON INSULATION MATERIAL OR 21 SYSTEM.—In the case of amounts paid or incurred 22 for components described in subsection (c)(3)(A) by 23 any taxpayer for any taxable year, the credit allowed 24 under this section with respect to such amounts for 25 VerDate Sep 11 2014 02:21 Oct 05, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2588.IS S2588 kjohnson on DSK79L0C42 with BILLS 3 •S 2588 IS such year shall not exceed the excess (if any) of 1 $600 over the aggregate credits allowed under this 2 section with respect to such amounts for all prior 3 taxable years ending after December 31, 2019. 4 ‘‘(3) LIMITATION ON WINDOWS.— 5 ‘‘(A) IN GENERAL.— 6 ‘‘(i) ENERGY STAR MOST EFFI- 7 CIENT.—In the case of amounts paid or in- 8 curred by any taxpayer for any taxable 9 year for components described in sub- 10 section (c)(3)(B) which meet the most effi- 11 cient certification under applicable Energy 12 Star program requirements, the credit al- 13 lowed under this section with respect to 14 such amounts for such year shall not ex- 15 ceed the excess (if any) of $600 over the 16 aggregate credits allowed under this sec- 17 tion with respect to such amounts for all 18 prior taxable years ending after December 19 31, 2019. 20 ‘‘(ii) ENERGY STAR.—In the case of 21 amounts paid or incurred by any taxpayer 22 for any taxable year for components de- 23 scribed in subsection (c)(3)(B) which do 24 not meet the most efficient certification 25 VerDate Sep 11 2014 02:21 Oct 05, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2588.IS S2588 kjohnson on DSK79L0C42 with BILLS 4 •S 2588 IS under applicable Energy Star program re- 1 quirements, the credit allowed under this 2 section with respect to such amounts for 3 such year shall not exceed the excess (if 4 any) of $200 over the aggregate credits al- 5 lowed under this section with respect to 6 such amounts for all prior taxable years 7 ending after December 31, 2019. 8 ‘‘(B) ELECTION.— 9 ‘‘(i) IN GENERAL.—For purposes of 10 any amounts paid or incurred by any tax- 11 payer for components described in sub- 12 section (c)(3)(B), the credit allowed under 13 this section shall only be allowed for com- 14 ponents described in clause (i) of subpara- 15 graph (A) or clause (ii) of such subpara- 16 graph, but not both, as elected by the tax- 17 payer during the first taxable year in 18 which such credit is being claimed by the 19 taxpayer. 20 ‘‘(ii) IRREVOCABILITY.—The Sec- 21 retary shall, through such rules, regula- 22 tions, and procedures as are determined 23 appropriate, establish procedures for mak- 24 VerDate Sep 11 2014 02:21 Oct 05, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2588.IS S2588 kjohnson on DSK79L0C42 with BILLS 5 •S 2588 IS ing an election under this subparagraph, 1 which shall require that— 2 ‘‘(I) any election made by the 3 taxpayer shall be irrevocable, and 4 ‘‘(II) such election shall remain 5 in effect for all subsequent taxable 6 years. 7 ‘‘(4) LIMITATION ON DOORS.—In the case of 8 amounts paid or incurred for components described 9 in subsection (c)(3)(C) by any taxpayer for any tax- 10 able year, the credit allowed under this section with 11 respect to such amounts for such year shall not ex- 12 ceed— 13 ‘‘(A) the excess (if any) of $500 over the 14 aggregate credits allowed under this section 15 with respect to such amounts for all prior tax- 16 able years ending after December 31, 2019, or 17 ‘‘(B) $250 for each exterior door. 18 ‘‘(5) LIMITATION ON RESIDENTIAL ENERGY 19 PROPERTY EXPENDITURES.—The amount of the 20 credit allowed under this section by reason of sub- 21 section (a)(2) shall not exceed— 22 ‘‘(A) in the case of any energy-efficient 23 building property— 24 VerDate Sep 11 2014 02:21 Oct 05, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2588.IS S2588 kjohnson on DSK79L0C42 with BILLS 6 •S 2588 IS ‘‘(i) for any item of property described 1 in subparagraph (A), (B), or (C) of sub- 2 section (d)(3), $600, and 3 ‘‘(ii) for any item of property de- 4 scribed in subparagraph (D) or (E) of such 5 subsection, $400, and 6 ‘‘(B) in the case of any qualified natural 7 gas, propane, or oil furnace or hot water boiler 8 (as defined in subsection (d)(4)), an amount 9 equal to— 10 ‘‘(i) $600 for a hot water boiler, and 11 ‘‘(ii) in the case of a furnace, an 12 amount equal to the sum of— 13 ‘‘(I) $300, plus 14 ‘‘(II) if the taxpayer is converting 15 from a non-condensing furnace to a 16 condensing furnace, $300.’’, 17 (3) in subsection (c)— 18 (A) in paragraph (2)— 19 (i) by striking subparagraphs (A) and 20 (B) and inserting the following: 21 ‘‘(A) applicable Energy Star program re- 22 quirements, in the case of an exterior window, 23 a skylight, or an exterior door, and’’, 24 VerDate Sep 11 2014 02:21 Oct 05, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2588.IS S2588 kjohnson on DSK79L0C42 with BILLS 7 •S 2588 IS (ii) by redesignating subparagraph 1 (C) as subparagraph (B), and 2 (iii) in subparagraph (B), as so redes- 3 ignated, by striking ‘‘2009 International’’ 4 and all that follows through ‘‘Act of 2009’’ 5 and inserting ‘‘2015 IECC (as defined in 6 section 45L(b)(5))’’, 7 (B) in paragraph (3)— 8 (i) in subparagraph (B), by adding 9 ‘‘and’’ at the end, 10 (ii) in subparagraph (C), by striking 11 ‘‘, and’’ and inserting a period, and 12 (iii) by striking subparagraph (D), 13 and 14 (C) by adding at the end the following new 15 paragraph: 16 ‘‘(5) LABOR COSTS.—The term ‘qualified en- 17 ergy efficiency improvements’ includes expenditures 18 for labor costs properly allocable to the onsite prepa- 19 ration, assembly, or original installation of any en- 20 ergy efficient building envelope component.’’, 21 (4) in subsection (d)— 22 (A) in paragraph (2)(A)— 23 (i) in clause (i), by adding ‘‘or’’ at the 24 end, 25 VerDate Sep 11 2014 02:21 Oct 05, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2588.IS S2588 kjohnson on DSK79L0C42 with BILLS 8 •S 2588 IS (ii) in clause (ii), by striking ‘‘, or’’ 1 and inserting a period, and 2 (iii) by striking clause (iii), 3 (B) in paragraph (3)— 4 (i) by striking subparagraph (A) and 5 inserting the following: 6 ‘‘(A) an electric heat pump water heater 7 which, in the standard Department of Energy 8 test procedure, yields a uniform energy factor 9 of at least 3.0,’’, 10 (ii) in subparagraph (B), by striking 11 ‘‘January 1, 2009’’ and inserting ‘‘the date 12 of enactment of the Home Energy Savings 13 Act’’, 14 (iii) in subparagraph (C), by striking 15 ‘‘January 1, 2009’’ and inserting ‘‘the date 16 of enactment of the Home Energy Savings 17 Act’’, 18 (iv) by striking subparagraph (D) and 19 inserting the following: 20 ‘‘(D) a natural gas, propane, or oil water 21 heater which, in the standard Department of 22 Energy test procedure, yields— 23 ‘‘(i) in the case of a storage tank 24 water heater— 25 VerDate Sep 11 2014 02:21 Oct 05, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2588.IS S2588 kjohnson on DSK79L0C42 with BILLS 9 •S 2588 IS ‘‘(I) in the case of a medium- 1 draw water heater, a uniform energy 2 factor of not less than 0.78, and 3 ‘‘(II) in the case of a high-draw 4 water heater, a uniform energy factor 5 of not less than 0.80, and 6 ‘‘(ii) in the case of a tankless water 7 heater— 8 ‘‘(I) in the case of a medium- 9 draw water heater, a uniform energy 10 factor of not less than 0.87, and 11 ‘‘(II) in the case of a high-draw 12 water heater, a uniform energy factor 13 of not less than 0.90, and’’, and 14 (v) in subparagraph (E), by striking 15 ‘‘of at least 75 percent’’ and inserting the 16 following: ‘‘(as determined pursuant to the 17 applicable list published by the Environ- 18 mental Protection Agency for certified 19 wood stoves, hydronic heaters, or forced-air 20 furnaces) of at least— 21 ‘‘(i) in the case of any stove placed in 22 service before January 1, 2021, 73 per- 23 cent, and 24 VerDate Sep 11 2014 02:21 Oct 05, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2588.IS S2588 kjohnson on DSK79L0C42 with BILLS 10 •S 2588 IS ‘‘(ii) in the case of any stove placed in 1 service after December 31, 2020, 75 per- 2 cent.’’, 3 (C) in paragraph (4), by striking ‘‘not less 4 than 95’’ and inserting the following: ‘‘not less 5 than— 6 ‘‘(A) in the case of a furnace, 97 percent, 7 and 8 ‘‘(B) in the case of a hot water boiler, 95 9 percent.’’, 10 (D) by striking paragraph (5), and 11 (E) by redesignating paragraph (6) as 12 paragraph (5), 13 (5) in subsection (e), by adding the following 14 new paragraphs at the end: 15 ‘‘(4) INSTALLATION STANDARDS.—The terms 16 ‘energy efficient building envelope component’ and 17 ‘qualified energy property’ shall not include any 18 components or property which are not installed ac- 19 cording to any applicable Air Conditioning Contrac- 20 tors of America Quality Installation standards which 21 are in effect at the time that such components or 22 property are placed in service. 23 ‘‘(5) REPLACEMENT OF TERMINATED STAND- 24 ARDS.—In the case of any standard, requirement, or 25 VerDate Sep 11 2014 02:21 Oct 05, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2588.IS S2588 kjohnson on DSK79L0C42 with BILLS 11 •S 2588 IS criteria applicable to any energy efficient building 1 envelope component or qualified energy property 2 which is terminated after the date of enactment of 3 the Home Energy Savings Act, the Secretary, in 4 consultation with the Secretary of Energy, shall 5 identify a similar standard, requirement, or criteria 6 for purposes of determining the eligibility of any 7 such component or property for purposes of credit 8 allowed under this section.’’, and 9 (6) in subsection (g)(2), by striking ‘‘December 10 31, 2019’’ and inserting ‘‘December 31, 2026’’. 11 (b) EFFECTIVE DATE.—The amendments made by 12 this section shall apply to property placed in service after 13 December 31, 2019. 14 Æ VerDate Sep 11 2014 02:21 Oct 05, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\S2588.IS S2588 kjohnson on DSK79L0C42 with BILLS