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.