II 111th CONGRESS 2d Session S. 3212 IN THE SENATE OF THE UNITED STATES April 15, 2010 Mr. Menendez 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 and section 1603 of the American Recovery and Reinvestment Tax Act of 2009 to provide that qualified energy efficiency property is eligible for the energy credit and the Department of Treasury grant.

1.

Qualified energy efficiency property eligible for energy credit and grants

(a)

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 (vi), by adding or at the end of clause (vii), and by inserting after clause (vii) the following new clause: (viii)qualified energy efficiency property, . (b)

Energy percentage

Clause (i) of section 48(a)(2)(A) of the Internal Revenue Code of 1986 is amended by striking and at the end of subclause (III) and by inserting after subclause (IV) the following new subclause: (V)qualified energy efficiency property described in paragraph (3)(A)(viii), and . (c)

Qualified energy efficiency property

Section 48(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (5)

Qualified energy efficiency property

(A)

In general

The term qualified energy efficiency property means any property— (i)which is residential rental property, nonresidential real property, or mixed use real property, (ii)which is a qualified building, (iii)which achieves a minimum energy savings of 50 percent or more in comparison to a reference building which meets the minimum requirements of Standard 90.1–2001 (as defined by section 179D(c)(2)), determined under rules similar to the rules of section 179D(d)(2), (iv)in the case of property which is to be used for residential rental purposes, with respect to which the taxpayer makes a certification which meets the requirements of subparagraph (D), and (v)for which the taxpayer has received a reservation from the Secretary. (B)

Qualified building

The term qualified building means any building— (i)which— (I)is more than 150,000 square feet and has a floor area ratio (net of streets and public spaces) of not less than 3.0, or (II)in States with more than 35 percent of the population living in Census defined rural areas, is more than 50,000 square feet, (ii)which— (I)is located not more than one-half mile from a location in which there is direct access to a Fixed Guideway Transit System, or (II)in States with more than 35 percent of the population living in Census defined rural areas, is part of a rural town center redevelopment project on land previously occupied by residential, commercial, or industrial uses and within a Census defined place containing at least 5,000 people and 1,000 jobs, and (iii)for which the site work and construction is commenced not later than 36 months after the date of the enactment of this paragraph. (C)

Special rule for residential rental property

In the case of a qualified building in which the majority of the building is devoted to residential rental use— (i)subparagraph (A)(iii) shall be applied by substituting 25 percent for 50 percent, and (ii)any mechanical systems which meet the requirements of Standard 90.1–2001 may be used in lieu of appendix G to such Standard in modeling energy use of a reference building. (D)

Affordable housing requirements

(i)

In general

A certification meets the requirements of this subparagraph if the taxpayer certifies that at least 5 percent of residential rental units will be affordable to households with incomes not exceeding 60 percent of the area median income at the time of initial occupancy. (ii)

Safe harbor

A taxpayer shall be treated as meeting the requirement of clause (i) if the taxpayer files with the municipal government where the qualified building is located a land use restriction agreement or similar agreement designed to ensure the units remain affordable to an occupied by households described in clause (i) for the lesser of 99 years or the longest period permissible under the law of the State in which such units are located. (E)

Reservations

(i)

In general

For purposes of subparagraph (A)(iv), the Secretary shall issue a reservation upon receipt of the following: (I)Evidence that the project is designed to be a qualified energy efficiency property as described in clause (viii) of section 48(a)(3)(A) of the Internal Revenue Code of 1986. (II)Evidence that such property will be placed in service within a reasonable time by submission of a site plan approval from the local municipality, a letter of support from the municipality, a building permit, and an approved tax abatement agreement or other municipal financial support. (ii)

Maintenance of reservation

To maintain such a reservation, the applicant must commence construction within 12 months of the date such reservation was issued. (F)

Regulations

The Secretary shall prescribe such regulations as necessary to carry out the purposes of this section not later than 2 months of the date of the enactment of this paragraph. . (d)

Effective date

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

Grants in lieu of tax credits

(1)

In general

Subsection (d) of section 1603 of the American Recovery and Reinvestment Tax Act of 2009 is amended by inserting after paragraph (8) the following new subparagraph: (9)

Qualified energy efficiency property

Any qualified energy efficiency property as described in clause (viii) of section 48(a)(3)(A) of such Code. . (2)

Grant amount

Subparagraph (A) of section 1603(b)(2) of the American Recovery and Reinvestment Tax Act of 2009 is amended to read as follows: (A)30 percent in the case of any property described in paragraph (1), (2), (3), (4), or (9) of subsection (d), and .