II 110th CONGRESS 2d Session S. 3228 IN THE SENATE OF THE UNITED STATES July 8, 2008 Mr. Smith (for himself and Ms. Cantwell) 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 allow a credit for green roofs.

1.

Tax credit for green roofs

(a)

Findings and purpose

(1)

Findings

Congress makes the following findings: (A)Green roofs reduce storm water run off. (B)Green roofs reduce heating and cooling loads on a building. (C)Green roofs filter pollutants and carbon dioxide out of the air. (D)Green roofs filter pollutants and heavy metals out of rainwater. (E)Construction of green roofs has the potential to reduce the size of heating, ventilation, and air conditioning equipment on new or retrofitted buildings resulting in capital and operational savings. (F)Green roofs have the potential to reduce the amount of standard insulation used. (G)After installation, green roofs can reduce sewage system loads by assimilating large amounts of rainwater. (H)Green roofs absorb air pollution, collect airborne particulates, and store carbon. (I)Green roofs protect underlying roof material by eliminating exposure to the sun's ultraviolet radiation and extreme daily temperature fluctuations. (J)Green roofs reduce noise transfer from the outdoors. (K)Green roofs insulate a building from extreme temperatures, mainly by keeping the building interior cool in the summer. (L)Green roofs provide habitat for beneficial insects, such as honeybees and other pollinators, and small animals such as birds. (2)

Purpose

The purpose of this section is to encourage the construction of green roofs thereby— (A)reducing rooftop temperatures and heat transfer; decreasing summertime indoor temperatures; (B)lessening pressure on sewer systems through the absorption of rainwater; (C)filtering pollution—including heavy metals and excess nutrients; (D)protecting underlying roof material; (E)reducing noise; (F)providing a habitat for birds and other small animals; (G)improving the quality of life for building inhabitants; and (H)reducing the urban heat island effect by decreasing rooftop temperatures. (b)

Green roofs eligible for energy credit

(1)

In general

Subparagraph (A) of section 48(a)(3) of the Internal Revenue Code of 1986 is amended by striking or at the end of clause (iii), by striking the period at the end of clause (iv) and inserting , or, and by adding at the end the following new clause: (v)a qualified green roof (as defined in section 25D(d)(4)(B)). . (2)

Credit allowed against alternative minimum tax

Subparagraph (B) of section 38(c)(4) of such Code is amended by striking and at the end of clause (iii), by redesignating clause (iv) as clause (v), and by inserting after clause (iii) the following new clause: (iv)so much of the credit determined under section 46 as is attributable to the credit determined under section 48, and . (3)

Effective date

The amendments made by this subsection shall apply to periods after December 31, 2008, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect before the date of the enactment of the Revenue Reconciliation Act of 1990). (c)

Credit for residential green roofs

(1)

In general

(A)

Allowance of credit

Section 25D(a) of the Internal Revenue Code of 1986 (relating to allowance of credit) is amended by striking and at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting , and, and by adding at the end the following new paragraph: (4)30 percent of the qualified green roof property expenditures made by the taxpayer during such year. . (B)

Limitation

Section 25D(b)(1) of such Code (relating to maximum credit) is amended by striking and at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting , and, and by adding at the end the following new subparagraph: (D)$2,000 with respect to any qualified green roof property expenditures. . (C)

Qualified green roof property expenditures

Section 25D(d) of such Code (relating to definitions) is amended by adding at the end the following new paragraph: (4)

Qualified green roof property expenditure

(A)

In general

The term qualified green roof property expenditure means an expenditure for a qualified green roof which is installed on a building located in the United States and used as a residence by the taxpayer. (B)

Qualified green roof

The term qualified green roof means any green roof at least 40 percent of which is vegetated. (C)

Green roof

The term green roof means any roof which consists of vegetation and soil, or a growing medium, planted over a waterproofing membrane and its associated components, such as a protection course, a root barrier, a drainage layer, or thermal insulation and an aeration layer. . (D)

Maximum expenditures in case of joint occupancy

Section 25D(e)(4)(A) of such Code (relating to maximum expenditures) is amended by striking and at the end of clause (ii), by striking the period at the end of clause (iii) and inserting , and, and by adding at the end the following new clause: (iv)$1,667 in the case of any qualified green roof property expenditures. . (2)

Credit allowed against alternative minimum tax

(A)

In general

Subsection (c) of section 25D of the internal Revenue Code of 1986 is amended to read as follows: (c)

Limitation based on amount of tax; carryforward of unused credit

(1)

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 the taxable year shall not exceed the excess of— (A)the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over (B)the sum of the credits allowable under this subpart (other than this section) and section 27 for the taxable year. (2)

Carryforward of unused credit

(A)

Rule for years in which all personal credits allowed against regular and alternative minimum tax

In the case of a taxable year to which section 26(a)(2) applies, if the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a)(2) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year. (B)

Rule for other years

In the case of a taxable year to which section 26(a)(2) does not apply, if the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year. . (B)

Conforming amendments

(i)Section 23(b)(4)(B) of the Internal Revenue Code of 1986 is amended by inserting and section 25D after this section. (ii)Section 24(b)(3)(B) of such Code is amended by striking and 25B and inserting , 25B, and 25D. (iii)Section 25B(g)(2) of such Code is amended by striking section 23 and inserting sections 23 and 25D. (iv)Section 26(a)(1) of such Code is amended by striking and 25B and inserting 25B, and 25D. (3)

Effective date

(A)

In general

The amendments made by this subsection shall apply to property placed in service after December 31, 2008, in taxable years ending after such date. (B)

Application of EGTRRA sunset

The amendments made by clauses (i) and (ii) of paragraph (2)(B) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the provisions of such Act to which such amendments relate.