1.This Act may be cited as the
Water Efficiency and Conservation
Investment Act of 2009
.
2.Residential water
efficiency credit
(a)Subpart B of part IV
of subchapter A of chapter 1 of the Internal Revenue Code is amended by
inserting after section 30D the following new section:
30E.Residential
water efficiency credit
(a)In the case of an individual, there shall be allowed as a
credit against the tax imposed by this chapter for the taxable year an amount
equal to 50 percent of the qualified water efficiency property expenditures
paid or incurred during such taxable year.
(b)The
credit allowed under this section with respect to any taxpayer for any taxable
year shall not exceed $750.
(c)Qualified water
efficiency property expendituresFor purposes of this
section—
(1)The term qualified water efficiency property
expenditures means expenditures for qualified water efficiency property
which is—
(A)installed on or in
connection with a dwelling unit located in the United States that is owned by
the taxpayer (without regard to whether any other person occupies such dwelling
unit as a residence), and
(B)originally placed
in service by the taxpayer.
Such term
includes expenditures for labor costs properly allocable to the onsite
preparation, assembly, or original installation of such property.(2)Qualified water
efficiency propertyThe term qualified water efficiency
property means—
(A)property which
meets the national efficiency standards and specifications for residential
water-using fixtures, appliances, and devices under the WaterSense program of
the Environmental Protection Agency that are in effect on the date of purchase
of such property, but only if such property improves water efficiency by no
less than 20 percent over standard models of similar water-using fixtures and
appliances as determined by the Administrator of such Agency, and
(B)water efficient
landscaping which is installed by a landscape irrigation professional certified
by such WaterSense program and which reduces water use by no less than 50
percent, as certified by such professional.
(3)State water
efficiency standardsIn the case of a State that has mandatory
water efficiency standards for any property that are more stringent than the
standards and specifications described in paragraph (2), property installed on
or in connection with a dwelling unit that is located in such State must meet
such water efficiency standards of such State in order to be treated as
qualified water efficiency property for purposes of this section.
(d)For purposes of this section—
(1)Joint ownership
of water efficiency items
(A)An expenditure shall not fail to be treated as a
qualified water efficiency property expenditure merely because such expenditure
was made with respect to 2 or more dwelling units.
(B)Allocation of
expendituresIn the case of an expenditure made with respect to 2
or more dwelling units, for purposes of determining the credit allowable under
this section, such expenditure shall be allocated among such dwelling units in
proportion to the amount of the expenditure made for each dwelling unit.
(2)Refunds
disregarded in the administration of Federal programs and federally assisted
programsAny credit or refund allowed or made to any individual
by reason of this section shall not be taken into account as income and shall
not be taken into account as resources, for purposes of determining the
eligibility of such individual or any other individual for benefits or
assistance, or the amount or extent of benefits or assistance, under any
Federal program or under any State or local program financed in whole or in
part with Federal funds.
(3)For purposes of this subtitle, if a credit is allowed
under subsection (a) for any expenditure with respect to any property, the
increase in the basis of such property which would (but for this subsection)
result from such expenditure shall be reduced by the amount of the credit so
allowed.
(4)
(A)No deduction or credit under any other provision of this
chapter shall be allowed with respect to the amount of any qualified water
efficiency property expenditure taken into account under this section.
(B)The amount of any qualified water efficiency property
expenditure for which an individual is reimbursed under any Federal government
program shall not be taken into account for purposes of determining the credit
under subsection (a) with respect such individual.
(e)Application with
other credits
(1)
(A)Business credit
treated as part of general business creditSo 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)).
(B)Disallowance of
depreciationIn the case of an expenditure for property described
in subparagraph (A) with respect to which a credit is allowed under section
38(b) by reason of such subparagraph, the depreciation allowance for such
property in all taxable years shall be zero and no deduction shall be available
under section 167 with respect to such property.
(2)
(A)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 taxIn 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
(ii)the sum of the
credits allowable under subpart A (other than this section and sections 23,
25D, 30, 30B, and 30D) and section 27 for the taxable year.
(f)This
section shall not apply with respect to any property placed in service after
December 31,
2014.
.
(b)
(1)Section
24(b)(3)(B) of the Internal Revenue Code of 1986 is amended by striking
and 30D
and inserting , 30D, and 30E
.
(2)Section
25(e)(1)(C)(ii) of such Code is amended by inserting 30E,
after
30D,
.
(3)Section 25B(g)(2)
of such Code is amended by striking and 30D
and inserting
30D, and 30E
.
(4)Section 904(i) of
such Code is amended by striking and 30D
and inserting
30D, and 30E
.
(5)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(d)(3).
.
(6)Section
1400C(d)(2) of such Code is amended by striking and 30D
and
inserting 30D, and 30E
.
(c)Credit To be
part of business creditSection 38(b) of the Internal Revenue
Code of 1986 is amended by striking plus
at the end of paragraph
(34), by striking the period at the end of paragraph (35) and inserting
, plus
, and by adding at the end the following new
paragraph:
(36)the portion of the
residential water efficiency credit to which section 30E(e)(1)
applies.
.
(d)The table of sections for subpart B of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by
inserting after the item relating to section 30D the following new item:
Sec. 30E. Residential water
efficiency
credit.
.
(e)The amendments made by this section shall apply to property
placed in service after December 31, 2009.
3.New water
efficient home credit
(a)Subpart D of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end the following new
section:
45R.New water
efficient home credit
(a)For purposes of section 38, in the case of an eligible
contractor, the new water efficient home credit for the taxable year is an
amount equal to $1,500 for each qualified new water efficient home which
is—
(1)constructed by
such eligible contractor, and
(2)acquired by a
person from such eligible contractor during the taxable year.
(b)For
purposes of this section—
(1)The term eligible contractor means a
person who is certified as a builder partner under the WaterSense program of
the Environmental Protection Agency and who is—
(A)the person who
constructed the qualified new water efficient home, or
(B)in the case of a
qualified new energy efficient home which is a manufactured home, the
manufactured home producer of such home.
(2)Qualified new
water efficient homeThe term qualified new water efficient
home means a dwelling unit—
(A)located in the
United States,
(B)the construction
of which is substantially completed after the date of the enactment of this
section, and
(C)which is certified
by the Environmental Protection Agency as complying with the Final
Water-Efficient Single-Family New Home Specification issued by such
Agency.
(3)The
term construction includes substantial reconstruction and
rehabilitation.
(4)The
term acquire includes purchase.
(c)
(1)A certification described in subsection (b)(2)(C)
shall be made in accordance with guidance prescribed by the Secretary, after
consultation with the Administrator of the Environmental Protection Agency.
Such guidance shall specify procedures and methods for calculating water and
cost savings.
(2)Any
certification described in subsection (b)(2)(C) shall be made in writing in a
manner which specifies in readily verifiable fashion the water efficient
components (including toilets, faucets, other plumbing fixtures and appliances,
hot water delivery, landscape design, and irrigation systems) installed and
their respective rated water efficiency performance.
(d)For purposes of this subtitle, if a credit is allowed
under this section in connection with any expenditure for any property, the
increase in the basis of such property which would (but for this subsection)
result from such expenditure shall be reduced by the amount of the credit so
determined.
(e)Coordination
with other creditsExpenditures taken into account under section
45L, 47, or 48(a) shall not be taken into account under this section.
(f)The amount of the credit allowed under subsection (a) to
an eligible contractor with respect to any qualified new water efficient home
shall be reduced, but not below zero, by the amount of any reimbursement which
such contractor receives under any Federal government program for the
construction of such home or for expenditures relating to such
construction.
(g)This
section shall not apply to any qualified new water efficient home acquired
after December 31,
2014.
.
(b)Credit To be
part of general business creditSection 38(b) of the Internal
Revenue Code of 1986, as amended by this Act, is amended by striking
plus
at the end of paragraph (35), by striking the period at the
end of paragraph (36) and inserting , plus
, and by adding at the
end the following new paragraph:
(37)the new water
efficient home credit determined under section
45R.
.
(c)The table of sections for subpart D of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new item:
Sec. 45R. New water efficient
home
credit.
.
(d)The amendments made by this section shall apply to homes
acquired after December 31, 2009.
4.
(a)Section 54D of the Internal Revenue Code of 1986 is
amended—
(1)by striking
energy conservation bond
each place it appears in subsections
(a), (b), and (d), and inserting energy and water conservation
bond
,
(2)by inserting
and
water
after Qualified energy
in the heading,
(3)by striking
State or local government
in subsection (a)(2) and inserting
State, local government, or water district
,
(4)by
striking $3,200,000,000
in subsection (d) and inserting
$4,000,000,000, of which not less than 20 percent shall be used for
qualified conservation purposes described in subsection (f)(1)(F)
,
and
(5)by adding at the
end of subsection (f)(1) the following new subparagraph:
(F)Expenditures
incurred for purposes of—
(i)reducing water
consumption by a public building or facility by not less than 30
percent,
(ii)advanced water
metering infrastructure, including the purchase, installation, and
commissioning of advanced water meters and related software and
infrastructure,
(iii)investigation,
design, or construction of a qualified groundwater remediation, desalination,
or recycled water facility or system,
(iv)increasing energy
efficiency or the generation and use of renewable energy in the management,
conveyance, or treatment of water, wastewater, or stormwater,
(v)reducing water loss
in a water distribution system, including training water system personnel,
annual testing and calibration of meters, detecting and repairing leaks, and
purchase and installation of related equipment, or
(vi)establishing or
improving a system for volumetric billing to enable utilities to base retail
residential customer bills in whole or in part on the volume of metered water
deliveries.
.
(b)The amendments made by this section shall take effect on the
date of the enactment of this Act.
5.Arbitrage rules
not to apply to prepayments for electricity
(a)Subsection (b) of section 148 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
(5)Safe harbor for
prepaid electricity supply contracts
(A)The term investment-type property does not
include a prepayment under a qualified electricity supply contract.
(B)Qualified
electricity supply contract
(i)For purposes of this paragraph, the term qualified
electricity supply contract means—
(I)any contract
entered into by a water or sewer utility to acquire electricity for the use of
such utility in providing water or sewer services to its customers, if such
contract provides that the provider of such electricity under the contract will
use not less than 75 percent of the prepayment described in subparagraph (A) to
acquire, construct, or improve a qualified renewable energy facility,
and
(II)any contract to
acquire electricity which is not described in subclause (I) which the Secretary
determines does not constitute property of the type intended to be described in
paragraph (2)(D).
(ii)The term water or sewer utility means a
utility which is a governmental unit or is owned by a governmental unit and
which provides—
(I)water for
residential, commercial, irrigation, or industrial use, or
(II)sewer services for
residential, commercial, or industrial use,
to retail or
wholesale customers in the service territory of such utility.(iii)Qualified
renewable energy facilityThe term qualified renewable
energy facility means a qualified facility within the meaning of section
45(d) (without regard to paragraphs (8) and (10) thereof, to the placed in
service date of such facility, and to the person who owns such facility) which
is located in the United States.
(iv)Use of water or
sewer utilityFor purposes of clause (i)(I), a contract shall be
treated as providing electricity for the use of a water or sewer utility if the
sum of—
(I)the total number
of kilowatt hours of electricity purchased under such contract and any other
contracts for the purchase of electricity by such utility in effect on the date
of the execution of such contract, plus
(II)the amount of
electricity expected to be generated by any generating facilities owned and
used by such utility,
does not
exceed by more than 10 percent the total kilowatt hours of electricity expected
to be used by such utility during the term of such contract for the purpose of
providing water or sewer services to its customers or for resale to other water
or sewer utilities for their use (and not for resale to any entity that is not
a water or sewer utility).(C)Rules similar to the rules of subparagraphs (D)(ii), (G),
and (I) of paragraph (4) shall apply for purposes of this
paragraph.
.
(b)Private loan
financing test not To apply to prepayments for
electricityParagraph (2) of section 141(c) of the Internal
Revenue Code of 1986 is amended—
(1)by striking
or
at the end of subparagraph (B),
(2)by striking the
period at the end of subparagraph (C) and inserting , or
,
and
(3)by adding at the
end the following new subparagraph:
(D)is a qualified
electricity supply contract (as defined in section
148(b)(5)).
.
(c)The amendments made by this section shall apply to
obligations issued after the date of the enactment of this Act.