[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3659 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3659

   Amend the Internal Revenue Code of 1986 to allow a credit against 
  income tax for amounts paid for energy efficient property placed in 
    service in commercial buildings pursuant to an approved energy 
                            efficiency plan.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 29, 2009

    Mr. Wu introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   Amend the Internal Revenue Code of 1986 to allow a credit against 
  income tax for amounts paid for energy efficient property placed in 
    service in commercial buildings pursuant to an approved energy 
                            efficiency plan.

    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 ``Building Energy Tax Credit Act of 
2009''.

SEC. 2. COMMERCIAL BUILDING ENERGY PROJECT CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45R. COMMERCIAL BUILDING ENERGY PROJECT CREDIT.

    ``(a) Allowance of Credit.--For purposes of section 38, the 
commercial building energy project credit is an amount equal to 35 
percent of the cost of energy conservation commercial building property 
placed in service by the taxpayer.
    ``(b) Maximum Amount of Credit.--The credit under subsection (a) 
with respect to any building for any taxable year shall not exceed the 
excess (if any) of--
            ``(1) the product of--
                    ``(A) $4.00, and
                    ``(B) the square footage of the building, over
            ``(2) the aggregate credit allowed under subsection (a) 
        with respect to the building for all prior taxable years.
    ``(c) Energy Conservation Commercial Building Property.--For 
purposes of this section, the term `energy conservation commercial 
building property' means property--
            ``(1) with respect to which depreciation (or amortization 
        in lieu of depreciation) is allowable,
            ``(2) which is installed on or in any building which is 
        located in the United States, and
            ``(3) which is installed as part of a commercial building 
        energy project.
    ``(d) Commercial Building Energy Project.--For purposes of this 
section, the term `commercial building energy project' means a 
project--
            ``(1)(A) to install energy efficient commercial building 
        property (as defined in section 179D(c)), or
            ``(B) with respect to a building, to achieve an energy 
        consumption rate which is not more 60 percent of the energy 
        consumption rate under the ASHRAE Standard 90.1-2007 for 
        commercial buildings, and
            ``(2) with respect to which credit amounts have been 
        allocated by an energy credit agency under subsection (e).
    ``(e) Allocations of Credit Amounts.--
            ``(1) Credit limitation with respect to project.--The 
        amount of credit determined under this section for any taxable 
        year with respect to any project shall not exceed the State 
        energy credit dollar amount allocated to such project under 
        this subsection.
            ``(2) Credit dollar amount for agencies.--
                    ``(A) In general.--The aggregate credit dollar 
                amount which an energy credit agency may allocate for 
                any calendar year is the limitation allocated under 
                subparagraph (B) for such calendar year to such agency.
                    ``(B) Credit limitation allocated to state energy 
                agencies.--
                            ``(i) In general.--The Secretary shall 
                        allocate for each calendar year the national 
                        energy credit limitation among the States in 
                        proportion to the population of the State. Such 
                        limitation shall be allocated to the energy 
                        credit agency of each such State. If there is 
                        more than 1 energy credit agency of a State, 
                        all such agencies shall be treated as a single 
                        agency.
                            ``(ii) National energy credit limitation.--
                        There is a national energy credit limitation 
                        for each calendar year of $100,000,000.
                            ``(iii) Population.--For purposes of this 
                        paragraph, population shall be determined in 
                        accordance with section 146(j).
            ``(3) Special rules.--
                    ``(A) Building must be located within jurisdiction 
                of credit agency.--An energy credit agency may allocate 
                its aggregate energy credit dollar amount only to 
                projects with respect to buildings located in the 
                jurisdiction of the governmental unit of which such 
                agency is a part.
                    ``(B) Agency allocations in excess of limit.--If 
                the aggregate energy credit dollar amounts allocated by 
                an energy credit agency for any calendar year exceed 
                the portion of the national energy credit limitation 
                allocated to such agency for such calendar year, the 
                energy credit dollar amounts so allocated shall be 
                reduced (to the extent of such excess) for projects in 
                the reverse of the order in which the allocations of 
                such amounts were made.
            ``(4) Energy credit agency.--The term `energy credit 
        agency' means any agency authorized to carry out this 
        subsection.
    ``(f) Responsibilities of Energy Credit Agencies.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, the energy credit dollar amount with respect to 
        any project shall be zero unless such amount was allocated 
        pursuant to a qualified allocation plan of the energy credit 
        agency which is approved by the governmental unit (in 
        accordance with rules similar to the rules of section 147(f)(2) 
        (other than subparagraph (B)(ii) thereof)) of which such agency 
        is a part.
            ``(2) Qualified allocation plan.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `qualified allocation 
                plan' means any plan which meets the requirements of 
                subparagraphs (B) through (E).
                    ``(B) Selection criteria.--The requirements of this 
                subparagraph are met if such plan sets forth selection 
                criteria to be used to determine priorities of the 
                energy credit agency which are appropriate to local 
                conditions. An energy credit agency may establish 
                selection criteria which are more stringent than the 
                requirements under subsection (d)(1)(B).
                    ``(C) Project preference.--The requirements of this 
                subparagraph are met if such plan gives preference in 
                allocating energy credit dollar amounts among selected 
                projects to those projects which achieve the most 
                energy savings. A plan shall not be treated as failing 
                to meet the requirements of this subsection solely by 
                reason of allocating credit dollar amounts ratably 
                among projects with proportionally more allocated to 
                those projects which achieve higher energy savings.
                    ``(D) Compliance monitoring.--The requirements of 
                this subparagraph are met if such plan establishes a 
                program which--
                            ``(i) is certified by the Secretary as 
                        meeting the requirements of this subparagraph, 
                        and
                            ``(ii) provides for monitoring by the 
                        agency (or an agent or other private contractor 
                        of such agency) for noncompliance with the 
                        provisions of this section and notifying the 
                        Internal Revenue Service of any such 
                        noncompliance of which such agency becomes 
                        aware.
                    ``(E) Certification methods.--
                            ``(i) In general.--The requirements of this 
                        subparagraph are met if such plan has a 
                        certification procedure for inspection and 
                        testing by qualified individuals under which 
                        only projects complying with energy-savings 
                        plans and targets are certified.
                            ``(ii) Qualified individuals.--Individuals 
                        qualified to determine compliance shall be only 
                        those individuals who are recognized by the 
                        energy credit agency for such purposes.
                            ``(iii) Pre-certification.--The 
                        requirements of this subparagraph shall be 
                        treated as met if the plan includes a pre-
                        certification procedure for commercial building 
                        energy projects, unless application fees with 
                        respect to a project under such pre-
                        certification procedure exceeds 1 percent of 
                        the estimated cost of such project.
    ``(g) Transfer of Credit.--
            ``(1) In general.--A person described in paragraph (4) may 
        transfer the credit which would (but for the tax-exempt status 
        of such person) be allowable under subsection (a) with respect 
        to energy conservation commercial building property placed in 
        service by such person. A credit may only be transferred once 
        and may only be transferred to another person not described in 
        such paragraph.
            ``(2) Treatment of transferee.--The person to whom the 
        credit is transferred under this subsection shall be treated 
        for purposes of this title as the taxpayer with respect to whom 
        the credit is allowable under subsection (a).
            ``(3) Treatment of transferor.--
                    ``(A) Transfer proceeds treated as arising from 
                essential government function.--Any proceeds derived by 
                a person described in paragraph (4)(B) from the 
                transfer of any credit under this subsection shall be 
                treated as arising from the exercise of an essential 
                government function.
                    ``(B) Credit not income.--Any proceeds derived from 
                the transfer of a credit under this subsection shall 
                not treated as income for purposes of this title.
            ``(4) Persons described.--A person is described in this 
        paragraph if the person is--
                    ``(A) an organization exempt from tax under section 
                501(a), or
                    ``(B) any State or political subdivision thereof, 
                the District of Columbia, any possession of the United 
                States, or any agency or instrumentality of any of the 
                foregoing.
    ``(h) Denial of Double Benefit.--No credit shall be allowed under 
this section for any expense for which a deduction is allowed under any 
other provision of this chapter.
    ``(i) Basis Reduction.--For purposes of this subtitle, if a credit 
is allowed under this section with respect to any energy conservation 
commercial building property, the basis of such property shall be 
reduced by the amount of the credit so allowed.
    ``(j) Regulations.--The Secretary may prescribe such regulations as 
may be necessary or appropriate to carry out this section.''.
    (b) State Guidance.--The Secretary of Energy, in consultation with 
the Secretary of Treasury, shall develop and provide guidance to States 
and energy credit agencies (as defined in section 45R(e) of the 
Internal Revenue Code of 1986) for establishing methods of measuring 
overall energy savings of commercial building energy projects (as 
defined in section 45R(e) of such Code), including methods for 
comparing energy savings ratings under industry energy standards for 
commercial buildings other than ASHRAE Standard 90.1-2007 with such 
ASHRAE standard.
    (c) Credit Treated as Part of General Business Credit.--Subsection 
(b) of section 38 of such Code is amended by striking ``plus'' at the 
end of paragraph (33), by striking the period at the end of paragraph 
(34) and inserting ``, plus'', and by adding at the end the following 
new paragraph:
            ``(35) commercial building energy credit determined under 
        section 45R(a).''.
    (d) Conforming Amendment.--Subsection (a) of section 1016 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 45R(i).''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

``Sec. 45R. Commercial building energy project credit.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.
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