[Congressional Record Volume 160, Number 52 (Tuesday, April 1, 2014)]
[Senate]
[Pages S1925-S1937]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. CARDIN (for himself, Mrs. Feinstein, and Mr. Schatz):
S. 2189. A bill to amend the Internal Revenue Code of 1986 to improve
and extend the deduction for new and existing energy-efficient
commercial buildings, and for other purposes; to the Committee on
Finance.
Mr. CARDIN. Mr. President, today I rise with my colleagues Senator
Feinstein and Senator Schatz to introduce the Energy Efficiency Tax
Incentives Act.
Encouraging energy efficiency improvements is a smart and cost-
effective way to reduce pollution, increase the competitiveness of our
employers, and to create jobs in both our construction and
manufacturing sectors.
As I have discussed previously on the floor of the Senate, our energy
problem in this country can be primarily attributed to a waste problem.
Recently, the Department of Energy calculated that we waste 57 percent
of all energy produced.
Our goal in introducing this bill is to prevent that waste by
providing focused incentives that encourage significant improvements in
energy efficiency and truly innovative energy efficiency technologies.
While my colleagues will explain how the bill does this for our homes
and the industrial sector, I would like to focus on how our bill
improves energy efficiency outcomes for commercial and multifamily
buildings.
About 40 percent of energy consumption in the United States comes
from our buildings, and up to 80 percent of the buildings standing
today will still be here in 2050. Encouraging efficiency in new
construction, and making these existing buildings more efficient, would
generate billions of dollars in energy savings, spur job creation, and
reduce carbon emissions.
Until January 1, 2014, Section 179D of the Internal Revenue Code
provided a tax deduction that allowed for cost recovery regarding
energy efficient energy efficiency improvements to a building's
lighting, HVAC, and envelope.
Typically, the cost of energy consumption is part of a business's
expenses and thus immediately deductible. Section 179D was an important
provision because it aligned the Internal Revenue Code to similarly
incentivize energy savings through efficiency improvements. In terms of
meeting our energy demands, some of the cheapest and cleanest energy we
have is the energy we don't use because of these improvements.
Unfortunately, the 179D deduction expired at the end of 2013. As we
move forward with tax extenders, it is critical that this provision be
restored.
Our bill restores the 179D deduction by extending it through 2016. In
addition, our bill makes commonsense reforms to that section.
We update the energy efficiency standards that must be met to qualify
for the 179D deduction, including by providing automatic standard
updates for the years the deduction is available. We want to be sure
that this incentive is going to technologies that meet truly efficient
standards.
We also make the deduction more accessible to all real estate owners
and those involved in implementing energy efficiency improvements,
including through updated partial deduction standards and allocation
provisions.
Finally, the bill recognizes that, in the same way we encourage new
construction to meet these standards, we should encourage energy
efficiency retrofits.
Our current tax policies do not yet provide an effective incentive
for retrofitting our existing building stock. For example, the Empire
State Building retrofit project, which will reduce that building's
energy consumption by 40 percent, did not qualify for a section 179D
deduction under its current structure.
Our bill would provide a deduction for retrofits of existing
commercial and multifamily buildings to further encourage retrofit
projects. Like section 179D, the deduction would be performance-based
to encourage ambitious improvements and make the credit more accessible
to building owners.
Before turning to my colleagues, I would like to reiterate that
America's energy and economic future requires a focus on these energy
incentives. Initiatives like our bill are needed not only to generate
jobs, and savings for businesses and taxpayers, but also to improve our
environment and make our nation more energy secure.
Mr. CARDIN. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 2189
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF
CONTENTS.
(a) Short Title.--This Act may be cited as the ``Energy
Efficiency Tax Incentives Act''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; amendment of 1986 Code; table of contents.
TITLE I--COMMERCIAL BUILDING MODERNIZATION
Sec. 101. Extension and modification of deduction for energy-efficient
commercial buildings.
Sec. 102. Deduction for retrofits of existing commercial and
multifamily buildings.
TITLE II--HOME ENERGY IMPROVEMENTS
Sec. 201. Performance based home energy improvements.
[[Page S1926]]
TITLE III--INDUSTRIAL ENERGY AND WATER EFFICIENCY
Sec. 301. Modifications in credit for combined heat and power system
property.
Sec. 302. Investment tax credit for biomass heating property.
Sec. 303. Investment tax credit for waste heat to power property.
Sec. 304. Motor energy efficiency improvement tax credit.
Sec. 305. Credit for replacement of CFC refrigerant chiller.
Sec. 306. Qualifying efficient industrial process water use project
credit.
TITLE I--COMMERCIAL BUILDING MODERNIZATION
SEC. 101. EXTENSION AND MODIFICATION OF DEDUCTION FOR ENERGY-
EFFICIENT COMMERCIAL BUILDINGS.
(a) Extension.--
(1) Through 2016.--Section 179D(h) is amended by striking
``December 31, 2013'' and inserting ``December 31, 2016''.
(2) Inclusion of multifamily buildings.--
(A) In general.--Subparagraph (B) of section 179D(c)(1) is
amended by striking ``building'' and inserting ``commercial
building or multifamily building''.
(B) Definitions.--Subsection (c) of section 179D is amended
by adding at the end the following new paragraphs:
``(3) Commercial building.--The term `commercial building'
means a building with a primary use or purpose other than as
residential housing.
``(4) Multifamily building.--The term `multifamily
building' means a structure of 5 or more dwelling units with
a primary use as residential housing, and includes such
buildings owned and operated as a condominium, cooperative,
or other common interest community.''.
(b) Increase in Maximum Amount of Deduction.--
(1) In general.--Subparagraph (A) of section 179D(b)(1) is
amended by striking ``$1.80'' and inserting ``$3.00''.
(2) Partial allowance.--Paragraph (1) of section 179D(d) is
amended to read as follows:
``(1) Partial allowance.--
``(A) In general.--Except as provided in subsection (f),
if--
``(i) the requirement of subsection (c)(1)(D) is not met,
but
``(ii) there is a certification in accordance with
paragraph (6) that--
``(I) any system referred to in subsection (c)(1)(C)
satisfies the energy-savings targets established by the
Secretary under subparagraph (B) with respect to such system,
or
``(II) the systems referred to in subsection (c)(1)(C)(ii)
and subsection (c)(1)(C)(iii) together satisfy the energy-
savings targets established by the Secretary under
subparagraph (B) with respect to such systems,
then the requirement of subsection (c)(1)(D) shall be treated
as met with respect to such system or systems, and the
deduction under subsection (a) shall be allowed with respect
to energy-efficient commercial building property installed as
part of such system and as part of a plan to meet such
targets, except that subsection (b) shall be applied to such
property described in clause (ii)(I) by substituting `$1.00'
for `$3.00' and to such property described in clause (ii)(II)
by substituting `$2.20' for `$3.00'.
``(B) Regulations.--
``(i) In general.--The Secretary, after consultation with
the Secretary of Energy, shall promulgate regulations
establishing a target for each system described in subsection
(c)(1)(C) which, if such targets were met for all such
systems, the property would meet the requirements of
subsection (c)(1)(D).
``(ii) Safe harbor for combined systems.--The Secretary,
after consultation with the Secretary of Energy, and not
later than 6 months after the date of the enactment of the
Energy Efficiency Tax Incentives Act, shall promulgate
regulations regarding combined envelope and mechanical system
performance that detail appropriate components, efficiency
levels, or other relevant information for the systems
referred to in subsection (c)(1)(C)(ii) and subsection
(c)(1)(C)(iii) together to be deemed to have achieved two-
thirds of the requirements of subsection (c)(1)(D).''.
(c) Denial of Double Benefit Rules.--
(1) In general.--Section 179D is amended by redesignating
subsection (h) as subsection (i) and by inserting after
subsection (g) the following new subsection:
``(h) Tax Incentives Not Available.--Energy-efficient
measures for which a deduction is allowed under this section
shall not be eligible for a deduction under section 179F.''.
(2) Low-income housing exception to basis reduction.--
Subsection (e) of section 179D is amended by inserting
``(other than property placed in service in a qualified low-
income building (within the meaning of section 42))'' after
``building property''.
(d) Allocation of Deduction.--Paragraph (4) of section
179D(d) is amended to read as follows:
``(4) Allocation of deduction.--
``(A) In general.--Not later than 180 days after the date
of the enactment of this subsection, the Secretary, in
consultation with the Secretary of Energy, shall promulgate a
regulation to allow the owner of a commercial or multifamily
building, including a government, tribal, or non-profit
owner, to allocate any deduction allowed under this section,
or a portion thereof, to the person primarily responsible for
designing the property in lieu of the owner or to a
commercial tenant that leases or otherwise occupies space in
such building pursuant to a written agreement. Such person
shall be treated as the taxpayer for purposes of this
section.
``(B) Form of allocation.--An allocation made under this
paragraph shall be in writing and in a form that meets the
form of allocation requirements in Notice 2008-40 of the
Internal Revenue Service.
``(C) Provision of allocation.--Not later than 30 days
after receipt of a written request from a person eligible to
receive an allocation under this paragraph, the owner of a
building that makes an allocation under this paragraph shall
provide the form of allocation (as described in subparagraph
(B)) to such person.
``(D) Allocation from public owner of building.--In the
case of a commercial building or multifamily building that is
owned by a Federal, State, or local government or a
subdivision thereof, Notice 2006-52 of the Internal Revenue
Service, as amplified by Notice 2008-40, shall apply to any
allocation.''.
(e) Treatment of Basis in Context of Allocation.--
Subsection (e) of section 179D, as amended by subsection
(c)(2), is amended by inserting ``or so allocated'' after
``so allowed''.
(f) Earnings and Profits Conformity for Real Estate
Investment Trusts.--Subparagraph (B) of section 312(k)(3) is
amended--
(1) by striking ``.--For purposes of'' and inserting ``.--
``(i) In general.--Except as provided in clause (ii), for
purposes of'', and
(2) by adding at the end the following new clause:
``(ii) Earnings and profits conformity for real estate
investment trusts.--
``(I) In general.--For purposes of computing the earnings
and profits of a real estate investment trust (other than a
captive real estate investment trust), the entire amount
deductible under section 179D shall be allowed as deductions
in the taxable years for which such amounts are claimed under
such section.
``(II) Captive real estate investment trust.--The term
`captive real estate investment trust' means a real estate
investment trust the shares or beneficial interests of which
are not regularly traded on an established securities market
and more than 50 percent of the voting power or value of the
beneficial interests or shares of which are owned or
controlled, directly or indirectly, or constructively, by a
single entity that is treated as an association taxable as a
corporation under this title and is not exempt from taxation
pursuant to the provisions of section 501(a).
``(III) Rules of application.--For purposes of this clause,
the constructive ownership rules of section 318(a), as
modified by section 856(d)(5), shall apply in determining the
ownership of stock, assets, or net profits of any person, and
the following entities are not considered an association
taxable as a corporation:
``(aa) Any real estate investment trust other than a
captive real estate investment trust.
``(bb) Any qualified real estate investment trust
subsidiary under section 856, other than a qualified REIT
subsidiary of a captive real estate investment trust.
``(cc) Any Listed Australian Property Trust (meaning an
Australian unit trust registered as a `Managed Investment
Scheme' under the Australian Corporations Act in which the
principal class of units is listed on a recognized stock
exchange in Australia and is regularly traded on an
established securities market), or an entity organized as a
trust, provided that a Listed Australian Property Trust owns
or controls, directly or indirectly, 75 percent or more of
the voting power or value of the beneficial interests or
shares of such trust.
``(dd) Any corporation, trust, association, or partnership
organized outside the laws of the United States and which
satisfies the criteria described in subclause (IV).
``(IV) Criteria.--The criteria described in this subclause
are as follows:
``(aa) At least 75 percent of the entity's total asset
value at the close of its taxable year is represented by real
estate assets (as defined in section 856(c)(5)(B)), cash and
cash equivalents, and United States Government securities.
``(bb) The entity is not subject to tax on amounts
distributed to its beneficial owners, or is exempt from
entity-level taxation.
``(cc) The entity distributes at least 85 percent of its
taxable income (as computed in the jurisdiction in which it
is organized) to the holders of its shares or certificates of
beneficial interest on an annual basis.
``(dd) Not more than 10 percent of the voting power or
value in such entity is held directly or indirectly or
constructively by a single entity or individual, or the
shares or beneficial interests of such entity are regularly
traded on an established securities market.
``(ee) The entity is organized in a country which has a tax
treaty with the United States.''.
(g) Rules for Lighting Systems.--Subsection (f) of section
179D is amended to read as follows:
``(f) Rules for Lighting Systems.--
``(1) In general.--With respect to property that is part of
a lighting system, the deduction allowed under subsection (a)
shall be equal to--
``(A) for a lighting system that includes installation of a
lighting control described in paragraph (2)(A), the
applicable amount determined under paragraph (3)(A),
[[Page S1927]]
``(B) for a lighting system that includes installation of a
lighting control described in paragraph (2)(B), the
applicable amount determined under paragraph (3)(B), or
``(C) for a lighting system that does not include
installation of any lighting controls described in
subparagraphs (A) or (B) of paragraph (2), the applicable
amount determined under paragraph (3)(C).
``(2) Energy saving controls.--
``(A) Lighting controls in certain spaces.--For purposes of
paragraph (1)(A), the lighting controls described in this
subparagraph are the following:
``(i) Occupancy sensors (as described in paragraph (4)(I))
in spaces not greater than 800 square feet.
``(ii) Bi-level controls (as described in paragraph
(4)(A)).
``(iii) Continuous or step dimming controls (as described
in subparagraphs (B) and (K) of paragraph (4)).
``(iv) Daylight dimming where sufficient daylight is
available (as described in paragraph (4)(C)).
``(v) A multi-scene controller (as described in paragraph
(4)(H)).
``(vi) Time scheduling controls (as described in paragraph
(4)(L)), provided that such controls are not required by
Standard 90.1-2010.
``(vii) Such other lighting controls as the Secretary, in
consultation with the Secretary of Energy, determines
appropriate.
``(B) Other control types.--For purposes of paragraph
(1)(B), the lighting controls described in this subparagraph
are the following:
``(i) Occupancy sensors (as described in paragraph (4)(I))
in spaces greater than 800 square feet.
``(ii) Demand responsive controls (as described in
paragraph (4)(D)).
``(iii) Lumen maintenance controls (as described in
paragraph (4)(F)) where solid state lighting is used.
``(iv) Such other lighting controls as the Secretary, in
consultation with the Secretary of Energy, determines
appropriate.
``(3) Applicable amount.--
``(A) Lighting controls in certain spaces.--For purposes of
paragraph (1)(A), the applicable amount shall be determined
in accordance with the following table:
``If the percentage of reduction in lighting power density is not less
The amount of the deduction per square foot is:
15 percent......................................................$0.30
20 percent......................................................$0.44
25 percent......................................................$0.58
30 percent......................................................$0.72
35 percent......................................................$0.86
40 percent......................................................$1.00
``(B) Lighting controls in larger spaces and where solid
lighting is used.--For purposes of paragraph (1)(B), the
applicable amount shall be determined in accordance with the
following table:
``If the percentage of reduction in lighting power density is not less
The amount of the deduction per square foot is:
20 percent......................................................$0.30
25 percent......................................................$0.44
30 percent......................................................$0.58
35 percent......................................................$0.72
40 percent......................................................$0.86
45 percent......................................................$1.00
``(C) No qualified lighting controls.--For purposes of
paragraph (1)(C), the applicable amount shall be determined
in accordance with the following table:
``If the percentage of reduction in lighting power density is not less
The amount of the deduction per square foot is:
25 percent......................................................$0.30
30 percent......................................................$0.44
35 percent......................................................$0.58
40 percent......................................................$0.72
45 percent......................................................$0.86
50 percent......................................................$1.00
``(4) Definitions.--For purposes of this subsection:
``(A) Bi-level control.--
``(i) In general.--Subject to clause (ii), the term `bi-
level control' means a lighting control strategy that
provides for 2 different levels of lighting.
``(ii) Full-off setting.--For purposes of clause (i), a bi-
level control shall also provide for a full-off setting.
``(B) Continuous dimming.--The term `continuous dimming'
means a lighting control strategy that adjusts the light
output of a lighting system between minimum and maximum light
output in a manner that is not perceptible.
``(C) Daylight dimming; sufficient daylight.--
``(i) Daylight dimming.--The term `daylight dimming' means
any device that--
``(I) adjusts electric lighting power in response to the
amount of daylight that is present in an area, and
``(II) provides for separate control of the lamps for
general lighting in the daylight area by not less than 1
multi-level photocontrol, including continuous dimming
devices, that satisfies the following requirements:
``(aa) The light sensor for the multi-level photocontrol is
remote from where calibration adjustments are made.
``(bb) The calibration adjustments are readily accessible.
``(cc) The multi-level photocontrol reduces electric
lighting power in response to the amount of daylight with--
``(AA) not less than 1 control step that is between 50
percent and 70 percent of design lighting power, and
``(BB) not less than 1 control step that is not less than
35 percent of design lighting power.
``(ii) Sufficient daylight.--
``(I) In general.--The term `sufficient daylight' means--
``(aa) in the case of toplighted areas, when the total
daylight area under skylights plus the total daylight area
under rooftop monitors in an enclosed space is greater than
900 square feet (as defined in Standard 90.1-2010), and
``(bb) in the case of sidelighted areas, when the combined
primary sidelight area in an enclosed space is not less than
250 square feet (as defined in Standard 90.1-2010).
``(II) Exceptions.--Sufficient daylight shall be deemed to
not be available if--
``(aa) in the case of areas described in subclause
(I)(aa)--
``(AA) for daylighted areas under skylights, it is
documented that existing adjacent structures or natural
objects block direct beam sunlight for more than 1500 daytime
hours (after 8 a.m. and before 4 p.m., local time) per year,
``(BB) for daylighted areas, the skylight effective
aperture is less than 0.006, or
``(CC) for buildings in climate zone 8, as defined under
Standard 90.1-2010, the daylight areas total less than 1500
square feet in an enclosed space, and
``(bb) in the case of primary sidelighted areas described
in subclause (I)(bb)--
``(AA) the top of the existing adjacent structures are at
least twice as high above the windows as the distance from
the window, or
``(BB) the sidelighting effective aperture is less than
0.1.
``(iii) Daylight, sidelighting, and other related terms.--
The terms `daylight area', `daylight area under skylights',
`daylight area under rooftop monitors', `daylighted area',
`enclosed space', `primary sidelighted areas', `sidelighting
effective aperture', and `skylight effective aperture' have
the same meaning given such terms under Standard 90.1-2010.
``(D) Demand responsive control.--
``(i) In general.--The term `demand responsive control'
means a control device that receives and automatically
responds to a demand response signal and--
``(I) in the case of space-conditioning systems, conducts a
centralized demand shed for non-critical zones during a
demand response period and that has the capability to, on a
signal from a centralized contract or software point within
an Energy Management Control System--
``(aa) remotely increase the operating cooling temperature
set points in such zones by not less than 4 degrees,
``(bb) remotely decrease the operating heating temperature
set points in such zones by not less than 4 degrees,
``(cc) remotely reset temperatures in such zones to
originating operating levels, and
``(dd) provide an adjustable rate of change for any
temperature adjustment and reset, and
``(II) in the case of lighting power, has the capability to
reduce lighting power by not less than 30 percent during a
demand response period.
``(ii) Demand response period.--The term `demand response
period' means a period in which short-term adjustments in
electricity usage are made by end-use customers from normal
electricity consumption patterns, including adjustments in
response to--
``(I) the price of electricity, and
``(II) participation in programs or services that are
designed to modify electricity usage in response to wholesale
market prices for electricity or when reliability of the
electrical system is in jeopardy.
``(iii) Demand response signal.--The term `demand response
signal' means a signal sent to an end-use customer by a local
utility, independent system operator, or designated
curtailment service provider or aggregator that--
``(I) indicates an adjustment in the price of electricity,
or
``(II) is a request to modify electricity consumption.
``(E) Lamp.--The term `lamp' means an artificial light
source that produces optical radiation (including ultraviolet
and infrared radiation).
``(F) Lumen maintenance control.--The term `lumen
maintenance control' means a lighting control strategy that
maintains constant light output by adjusting lamp power to
compensate for age and cleanliness of luminaires.
``(G) Luminaire.--The term `luminaire' means a complete
lighting unit for the production, control, and distribution
of light that consists of--
``(i) not less than 1 lamp, and
``(ii) any of the following items:
``(I) Optical control devices designed to distribute light.
``(II) Sockets or mountings for the positioning,
protection, and operation of the lamps.
``(III) Mechanical components for support or attachment.
``(IV) Electrical and electronic components for operation
and control of the lamps.
``(H) Multi-scene control.--The term `multi-scene control'
means a lighting control device or system that allows for--
[[Page S1928]]
``(i) not less than 2 predetermined lighting settings,
``(ii) a setting that turns off all luminaires in an area,
and
``(iii) a recall of the settings described in clauses (i)
and (ii) for any luminaires or groups of luminaires to adjust
to multiple activities within the area.
``(I) Occupancy sensor.--The term `occupancy sensor' means
a control device that--
``(i) detects the presence or absence of individuals within
an area and regulates lighting, equipment, or appliances
according to a required sequence of operation,
``(ii) shuts off lighting when an area is unoccupied,
``(iii) except in areas designated as emergency egress and
using less than 0.2 watts per square foot of floor area,
provides for manual shut-off of all luminaires regardless of
the status of the sensor and allows for--
``(I) independent control in each area enclosed by ceiling-
height partitions,
``(II) controls that are readily accessible, and
``(III) operation by a manual switch that is located in the
same area as the lighting that is subject to the control
device.
``(J) Standard 90.1-2010.--The term `Standard 90.1-2010'
means Standard 90.1-2010 of the American Society of Heating,
Refrigerating, and Air Conditioning Engineers and the
Illuminating Engineering Society of North America.
``(K) Step dimming.--The term `step dimming' means a
lighting control strategy that adjusts the light output of a
lighting system by 1 or more predetermined amounts of greater
than 1 percent of full output in a manner that may be
perceptible.
``(L) Time scheduling control.--The term `time scheduling
control' means a control strategy that automatically controls
lighting, equipment, or systems based on a particular time of
day or other daily event (including sunrise and sunset).''.
(h) Updated Standards.--
(1) Initial update.--
(A) In general.--Section 179D(c) is amended by striking
``90.1-2001'' each place it appears and inserting ``90.1-
2004''.
(B) Conforming amendment.--Paragraph (2) of section 179D(c)
is amended by striking ``(as in effect on April 2, 2003)''.
(2) Second update.--
(A) In general.--Section 179D is amended by striking
``90.1-2004'' each place it appears in subsections (c) and
(f) and inserting ``90.1-2007''.
(B) Effective date.--The amendments made by subparagraph
(A) shall apply to property placed in service after December
31, 2014.
(i) Treatment of Lighting Systems.--Section 179D(c)(1) is
amended by striking ``interior'' each place it appears.
(j) Reporting Program.--Section 179D, as amended by
subsection (c)(1), is amended by redesignating subsection (i)
as subsection (j) and by inserting after subsection (h) the
following new subsection:
``(i) Reporting Program.--For purposes of the report
required under section 179F(l), the Secretary, in
consultation with the Secretary of Energy, shall--
``(1) develop a program to collect a statistically valid
sample of energy consumption data from taxpayers that
received full deductions under this section, regardless of
whether such taxpayers allocated all or a portion of such
deduction, and
``(2) include such data in the report, with such redactions
as deemed necessary to protect the personally identifiable
information of such taxpayers.''.
(k) Special Rule for Partnerships and S Corporations.--
Section 179D, as amended by subsection (j), is amended by
redesignating subsection (j) as subsection (k) and by
inserting after subsection (i) the following new subsection:
``(j) Special Rule for Partnerships and S Corporations.--In
the case of a partnership or S corporation, this section
shall be applied at the partner or shareholder level, subject
to such reporting requirements as are determined appropriate
by the Secretary.''.
(l) Effective Date.--Except as otherwise provided, the
amendments made by this section shall apply to property
placed in service in taxable years beginning after the date
of the enactment of this Act.
SEC. 102. DEDUCTION FOR RETROFITS OF EXISTING COMMERCIAL AND
MULTIFAMILY BUILDINGS.
(a) In General.--Part VI of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 is amended by inserting
after section 179E the following new section:
``SEC. 179F. DEDUCTION FOR RETROFITS OF EXISTING COMMERCIAL
AND MULTIFAMILY BUILDINGS.
``(a) Allowance of Deduction.--
``(1) In general.--With respect to each certified retrofit
plan, there shall be allowed as a deduction an amount equal
to the lesser of--
``(A) the sum of--
``(i) the design deduction, and
``(ii) the realized deduction, or
``(B) the total cost to develop and implement such
certified retrofit plan.
``(2) Exception.--For purposes of the amount described in
paragraph (1)(B), if such amount is taken as a design
deduction, no realized deduction shall be allowed.
``(b) Deduction Amounts.--For purposes of this section--
``(1) Design deduction.--A design deduction shall be--
``(A) based on projected source energy savings as
calculated in accordance with subsection (c)(3)(B),
``(B) correlated to the percent of source energy savings
set forth in the general scale in paragraph (3)(A) that a
certified retrofit plan is projected to achieve when energy-
efficient measures are placed in service, and
``(C) equal to 60 percent of the amount allowed under the
general scale.
``(2) Realized deduction.--
``(A) In general.--A realized deduction shall be--
``(i) based on realized source energy savings as calculated
in accordance with subsection (c)(3)(C),
``(ii) correlated to the percent of source energy savings
set forth in the general scale in paragraph (3)(A) as
realized by a certified retrofit plan, and
``(iii) equal to 40 percent of the amount allowed under the
general scale.
``(B) Adjustment of source energy savings.--The percent of
source energy savings for purposes of any realized deduction
may vary from such savings projected when energy-efficient
measures were placed in service for purposes of a design
deduction under paragraph (1).
``(C) No recapture of design deduction.--Notwithstanding
the regulations prescribed under subsection (f), no recapture
of a design deduction shall be required where the owner of
the commercial or multifamily building--
``(i) claims or allocates a design deduction when energy-
efficient measures are placed into service pursuant to the
terms and conditions of a certified retrofit plan, and
``(ii) is not eligible for or does not subsequently claim
or allocate a realized deduction.
``(3) General scale.--
``(A) In general.--The scale for deductions allowed under
this section shall be--
``(i) $1.00 per square foot of retrofit floor area for 20
to 24 percent source energy savings,
``(ii) $1.50 per square foot of retrofit floor area for 25
to 29 percent source energy savings,
``(iii) $2.00 per square foot of retrofit floor area for 30
to 34 percent source energy savings,
``(iv) $2.50 per square foot of retrofit floor area for 35
to 39 percent source energy savings,
``(v) $3.00 per square foot of retrofit floor area for 40
to 44 percent source energy savings,
``(vi) $3.50 per square foot of retrofit floor area for 45
to 49 percent source energy savings, and
``(vii) $4.00 per square foot of retrofit floor area for 50
percent or more source energy savings.
``(B) Historic buildings.--
``(i) In general.--With respect to energy-efficient
measures placed in service as part of a certified retrofit
plan in a commercial building or multifamily building on or
eligible for the National Register of Historic Places, the
respective dollar amounts set forth in the general scale
under subparagraph (A) shall--
``(I) each be increased by 20 percent, for the purposes of
calculating any applicable design deduction and realized
deduction, and
``(II) not exceed the total cost to develop and implement
such certified retrofit plan.
``(ii) Exception.--If the amount described in clause
(i)(II) is taken as a design deduction, then no realized
deduction shall be allowed.
``(c) Calculation of Energy Savings.--
``(1) In general.--For purposes of the design deduction and
the realized deduction, source energy savings shall be
calculated with reference to a baseline of the annual source
energy consumption of the commercial or multifamily building
before energy-efficient measures were placed in service.
``(2) Baseline benchmark.--The baseline under paragraph (1)
shall be determined using a building energy performance
benchmarking tool designated by the Administrator of the
Environmental Protection Agency, and based upon 1 year of
source energy consumption data prior to the date upon which
the energy-efficient measures are placed in service.
``(3) Design and realized source energy savings.--
``(A) In general.--In certifying a retrofit plan as a
certified retrofit plan, a licensed engineer or architect
shall calculate source energy savings by utilizing the
baseline benchmark defined in paragraph (2) and determining
percent improvements from such baseline.
``(B) Design deduction.--For purposes of claiming a design
deduction, the regulations issued under subsection (f)(1)
shall prescribe the standards and process for a licensed
engineer or architect to calculate and certify source energy
savings projected from the design of a certified retrofit
plan as of the date energy-efficient measures are placed in
service.
``(C) Realized deduction.--For purposes of claiming a
realized deduction, a licensed engineer or architect shall
calculate and certify source energy savings realized by a
certified retrofit plan 2 years after a design deduction is
allowed by utilizing energy consumption data after energy-
efficient measures are placed in service, and adjusting for
climate, building occupancy hours, density, or other factors
deemed appropriate in the benchmarking tool designated under
paragraph (2).
``(d) Certified Retrofit Plan and Other Definitions.--For
purposes of this section--
[[Page S1929]]
``(1) Certified retrofit plan.--The term `certified
retrofit plan' means a plan that--
``(A) is designed to reduce the annual source energy costs
of a commercial building, or a multifamily building, through
the installation of energy-efficient measures,
``(B) is certified under penalty of perjury by a licensed
engineer or architect, who is not a direct employee of the
owner of the commercial building or multifamily building that
is the subject of the plan, and is licensed in the State in
which such building is located,
``(C) describes the square footage of retrofit floor area
covered by such a plan,
``(D) specifies that it is designed to achieve a final
source energy usage intensity after energy-efficient measures
are placed in service in a commercial building or a
multifamily building that does not exceed on a square foot
basis the average level of energy usage intensity of other
similar buildings, as described in paragraph (2),
``(E) requires that after the energy-efficient measures are
placed in service, the commercial building or multifamily
building meets the applicable State and local building code
requirements for the area in which such building is located,
``(F) satisfies the regulations prescribed under subsection
(f), and
``(G) is submitted to the Secretary of Energy after energy-
efficient measures are placed in service, for the purpose of
informing the report to Congress required by subsection (l).
``(2) Average level of energy usage intensity.--
``(A) In general.--The maximum average level of energy
usage intensity under paragraph (1)(D) shall not exceed
300,000 British thermal units per square foot.
``(B) Regulations.--
``(i) In general.--The Secretary, in consultation with the
Administrator of the Environmental Protection Agency, shall
develop distinct standards for categories and subcategories
of buildings with respect to maximum average level of energy
usage intensity based on the best available information used
by the ENERGY STAR program.
``(ii) Review.--The standards developed pursuant to clause
(i) shall be reviewed and updated by the Secretary, in
consultation with the Administrator of the Environmental
Protection Agency, not later than every 3 years.
``(3) Commercial building.--
``(A) In general.--The term `commercial building' means a
building located in the United States--
``(i) that is in existence and occupied on the date of the
enactment of this section,
``(ii) for which a certificate of occupancy has been issued
at least 10 years before energy efficiency measures are
placed in service, and
``(iii) with a primary use or purpose other than as
residential housing.
``(B) Shopping centers.--In the case of a retail shopping
center, the term `commercial building' shall include an area
within such building that is--
``(i) 50,000 square feet or larger that is covered by a
separate utility grade meter to record energy consumption in
such area, and
``(ii) under the day-to-day management and operation of--
``(I) the owner of such building as common space areas, or
``(II) a retail tenant, lessee, or other occupant.
``(4) Energy-efficient measures.--The term `energy-
efficient measures' means a measure, or combination of
measures, placed in service through a certified retrofit
plan--
``(A) on or in a commercial building or multifamily
building,
``(B) as part of--
``(i) the lighting systems,
``(ii) the heating, cooling, ventilation, refrigeration, or
hot water systems,
``(iii) building transportation systems, such as elevators
and escalators,
``(iv) the building envelope, which may include an energy-
efficient cool roof,
``(v) a continuous commissioning contract under the
supervision of a licensed engineer or architect, or
``(vi) building operations or monitoring systems, including
utility-grade meters and submeters, and
``(C) including equipment, materials, and systems within
subparagraph (B) with respect to which depreciation (or
amortization in lieu of depreciation) is allowed.
``(5) Energy savings.--The term `energy savings' means
source energy usage intensity reduced on a per square foot
basis through design and implementation of a certified
retrofit plan.
``(6) Multifamily building.--The term `multifamily
building'--
``(A) means--
``(i) a structure of 5 or more dwelling units located in
the United States--
``(I) that is in existence and occupied on the date of the
enactment of this section,
``(II) for which a certificate of occupancy has been issued
at least 10 years before energy efficiency measures are
placed in service, and
``(III) with a primary use as residential housing, and
``(B) includes such buildings owned and operated as a
condominium, cooperative, or other common interest community.
``(7) Source energy.--The term `source energy' means the
total amount of raw fuel that is required to operate a
commercial building or multifamily building, and accounts for
losses that are incurred in the generation, storage,
transport, and delivery of fuel to such a building.
``(e) Timing of Claiming Deductions.--Deductions allowed
under this section may be claimed as follows:
``(1) Design deduction.--In the case of a design deduction,
in the taxable year that energy efficiency measures are
placed in service.
``(2) Realized deduction.--In the case of a realized
deduction, in the second taxable year following the taxable
year described in paragraph (1).
``(f) Regulations.--
``(1) In general.--Not later than 180 days after the date
of the enactment of this section, and after notice and
opportunity for public comment, the Secretary, in
consultation with the Secretary of Energy and the
Administrator of the Environmental Protection Agency, shall
prescribe regulations--
``(A) for the manner and method for a licensed engineer or
architect to certify retrofit plans, model projected energy
savings, and calculate realized energy savings, and
``(B) notwithstanding subsection (b)(2)(C), to provide, as
appropriate, for a recapture of the deductions allowed under
this section if a retrofit plan is not fully implemented, or
a retrofit plan and energy savings are not certified or
verified in accordance with regulations prescribed under this
subsection.
``(2) Reliance on established protocols, etc.--To the
maximum extent practicable and available, such regulations
shall rely upon established protocols and documents used in
the ENERGY STAR program, and industry best practices and
existing guidelines, such as the Building Energy Modeling
Guidelines of the Commercial Energy Services Network
(COMNET).
``(3) Allowance of deductions pending issuance of
regulations.--Pending issuance of the regulations under
paragraph (1), the owner of a commercial building or a
multifamily building shall be allowed to claim or allocate a
deduction allowed under this section.
``(g) Notice to Owner.--Each certification of a retrofit
plan and calculation of energy savings required under this
section shall include an explanation to the owner of a
commercial building or a multifamily building regarding the
energy-efficient measures placed in service and their
projected and realized annual energy costs.
``(h) Allocation of Deduction.--
``(1) In general.--Not later than 180 days after the date
of the enactment of this section, the Secretary, in
consultation with the Secretary of Energy, shall promulgate a
regulation to allow the owner of a commercial building or a
multifamily building, including a government, tribal, or non-
profit owner, to allocate any deduction allowed under this
section, or a portion thereof, to the person primarily
responsible for funding, financing, designing, leasing,
operating, or placing in service energy-efficient measures.
Such person shall be treated as the taxpayer for purposes of
this section and shall include a building tenant, financier,
architect, professional engineer, licensed contractor, energy
services company, or other building professional.
``(2) Form of allocation.--An allocation made under this
paragraph shall be in writing and in a form that meets the
form of allocation requirements in Notice 2008-40 of the
Internal Revenue Service.
``(3) Provision of allocation.--Not later than 30 days
after receipt of a written request from a person eligible to
receive an allocation under this paragraph, the owner of a
building that makes an allocation under this paragraph shall
provide the form of allocation (as described in paragraph
(2)) to such person.
``(4) Allocation from public owner of building.--In the
case of a commercial building or a multifamily building that
is owned by a Federal, State, or local government or a
subdivision thereof, Notice 2006-52 of the Internal Revenue
Service, as amplified by Notice 2008-40, shall apply to any
allocation.
``(i) Basis Reduction.--For purposes of this subtitle, if a
deduction is allowed under this section with respect to any
energy-efficient measures placed in service under a certified
retrofit plan other than in a qualified low-income building
(within the meaning of section 42), the basis of such
measures shall be reduced by the amount of the deduction so
allowed or so allocated.
``(j) Special Rule for Partnerships and S Corporations.--In
the case of a partnership or S corporation, this section
shall be applied at the partner or shareholder level, subject
to such reporting requirements as are determined appropriate
by the Secretary.
``(k) Tax Incentives Not Available.--
``(1) Energy efficient commercial buildings deduction.--
Energy-efficient measures for which a deduction is allowed
under this section shall not be eligible for a deduction
under section 179D.
``(2) New energy efficient home credit.--No deduction shall
be allowed under this section with respect to any building or
dwelling unit with respect to which a credit under section
45L was allowed.
``(l) Report to Congress.--
``(1) In general.--Biennially, beginning with the first
year after the enactment of this section, the Secretary, in
conjunction with the Secretary of Energy, shall submit a
report to Congress that--
``(A) explains the energy saved, the energy-efficient
measures implemented, the realization of energy savings
projected, and records the amounts and types of deductions
allowed under this section,
[[Page S1930]]
``(B) explains the energy saved, the energy efficient
measures implemented, and records the amount of deductions
allowed under section 179D, based on the data collected
pursuant to subsection (i) of such section,
``(C) determines the number of jobs created as a result of
the deduction allowed under this section,
``(D) determines how the use of any deduction allowed under
this section may be improved, based on the information
provided to the Secretary of Energy,
``(E) provides aggregated data with respect to the
information described in subparagraphs (A) through (D), and
``(F) provides statutory recommendations to Congress that
would reduce energy consumption in new and existing
commercial buildings located in the United States, including
recommendations on providing energy-efficient tax incentives
for subsections of buildings that operate with specific
utility-grade metering.
``(2) Protection of taxpayer information.--The Secretary
and the Secretary of Energy shall share information on
deductions allowed under this section and related reports
submitted, as requested by each agency to fulfill its
obligations under this section, with such redactions as
deemed necessary to protect the personally identifiable
financial information of a taxpayer.
``(3) Incorporation into department of energy programs.--
The Secretary of Energy shall, to the maximum extent
practicable, incorporate conclusions of the report under this
subsection into current Department of Energy building
performance and energy efficiency data collection and other
reporting programs.
``(m) Termination.--This section shall not apply to any
property placed in service after December 31, 2016.''.
(b) Effect on Depreciation on Earnings and Profits.--
Subparagraph (B) of section 312(k)(3), as amended by this
title, is amended--
(1) by striking ``or 179E'' both places it appears in
clause (i) and inserting ``179E, or 179F'',
(2) by striking ``or 179e'' in the heading and inserting
``179e, or 179f'', and
(3) by inserting ``or 179F'' after ``section 179D'' in
clause (ii)(I).
(c) Conforming Amendment.--The table of sections for part
VI of subchapter B of chapter 1 is amended by inserting after
the item relating to section 179E the following new item:
``Sec. 179F. Deduction for retrofits of existing commercial and
multifamily buildings.''.
(d) Effective Date.--Except as otherwise provided, the
amendments made by this section shall apply to property
placed in service in taxable years beginning after the date
of the enactment of this Act.
TITLE II--HOME ENERGY IMPROVEMENTS
SEC. 201. PERFORMANCE BASED HOME ENERGY IMPROVEMENTS.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
section:
``SEC. 25E. PERFORMANCE BASED ENERGY IMPROVEMENTS.
``(a) In General.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year for a qualified whole home
energy efficiency retrofit an amount determined under
subsection (b).
``(b) Amount Determined.--
``(1) In general.--Subject to paragraph (4), the amount
determined under this subsection is equal to--
``(A) the base amount under paragraph (2), increased by
``(B) the amount determined under paragraph (3).
``(2) Base amount.--For purposes of paragraph (1)(A), the
base amount is $2,000, but only if the energy use for the
residence is reduced by at least 20 percent below the
baseline energy use for such residence as calculated
according to paragraph (5).
``(3) Increase amount.--For purposes of paragraph (1)(B),
the amount determined under this paragraph is $500 for each
additional 5 percentage point reduction in energy use.
``(4) Limitation.--In no event shall the amount determined
under this subsection exceed the lesser of--
``(A) $5,000 with respect to any residence, or
``(B) 30 percent of the qualified home energy efficiency
expenditures paid or incurred by the taxpayer under
subsection (c) with respect to such residence.
``(5) Determination of energy use reduction.--For purposes
of this subsection--
``(A) In general.--The reduction in energy use for any
residence shall be determined by modeling the annual
predicted percentage reduction in total energy costs for
heating, cooling, hot water, and permanent lighting. It shall
be modeled using computer modeling software approved under
subsection (d)(2) and a baseline energy use calculated
according to subsection (d)(1)(C).
``(B) Energy costs.--For purposes of subparagraph (A), the
energy cost per unit of fuel for each fuel type shall be
determined by dividing the total actual energy bill for the
residence for that fuel type for the most recent available
12-month period by the total energy units of that fuel type
used over the same period.
``(c) Qualified Home Energy Efficiency Expenditures.--For
purposes of this section, the term `qualified home energy
efficiency expenditures'--
``(1) means any amount paid or incurred by the taxpayer
during the taxable year for a qualified whole home energy
efficiency retrofit, including the cost of diagnostic
procedures, labor, and modeling,
``(2) includes only measures that have an average estimated
life of 5 years or more as determined by the Secretary, after
consultation with the Secretary of Energy, and
``(3) does not include any amount which is paid or incurred
in connection with any expansion of the building envelope of
the residence.
``(d) Qualified Whole Home Energy Efficiency Retrofit.--For
purposes of this section--
``(1) In general.--The term `qualified whole home energy
efficiency retrofit' means the implementation of measures
placed in service during the taxable year intended to reduce
the energy use of the principal residence of the taxpayer
which is located in the United States. A qualified whole home
energy efficiency retrofit shall--
``(A) subject to paragraph (4), be designed, implemented,
and installed by a contractor which is--
``(i) accredited by the Building Performance Institute
(hereafter in this section referred to as `BPI') or a
preexisting BPI accreditation-based State certification
program with enhancements to achieve State energy policy,
``(ii) a Residential Energy Services Network (hereafter in
this section referred to as `RESNET') accredited Energy Smart
Home Performance Team, or
``(iii) accredited by an equivalent certification program
approved by the Secretary, after consultation with the
Secretary of Energy, for this purpose,
``(B) install a set of measures modeled to achieve a
reduction in energy use of at least 20 percent below the
baseline energy use established in subparagraph (C), using
computer modeling software approved under paragraph (2),
``(C) establish the baseline energy use by calibrating the
model using sections 3 and 4 and Annex D of BPI Standard BPI-
2400-S-2011: Standardized Qualification of Whole House Energy
Savings Estimates, or an equivalent standard approved by the
Secretary, after consultation with Secretary of Energy, for
this purpose,
``(D) document the measures implemented in the residence
through photographs taken before and after the retrofit,
including photographs of its visible energy systems and
envelope as relevant, and
``(E) implement a test-out procedure, following guidelines
of the applicable certification program specified under
clause (i) or (ii) of subparagraph (A), or equivalent
guidelines approved by the Secretary, after consultation with
the Secretary of Energy, for this purpose, to ensure--
``(i) the safe operation of all systems post retrofit, and
``(ii) that all improvements are included in, and have been
installed according to, standards of the applicable
certification program specified under clause (i) or (ii) of
subparagraph (A), or equivalent standards approved by the
Secretary, after consultation with the Secretary of Energy,
for this purpose.
For purposes of subparagraph (A)(iii), an organization or
State may submit an equivalent certification program for
approval by the Secretary, in consultation with the Secretary
of Energy. The Secretary shall approve or deny such
submission not later than 180 days after receipt, and, if the
Secretary fails to respond in that time period, the submitted
equivalent certification program shall be considered
approved.
``(2) Approved modeling software.--For purposes of
paragraph (1)(B), the contractor (or, if applicable, the
person described in paragraph (4)) shall use modeling
software certified by RESNET as following the software
verification test suites in section 4.2.1 of RESNET
Publication No. 06-001 or certified by an alternative
organization as following an equivalent standard, as approved
by the Secretary, after consultation with the Secretary of
Energy, for this purpose.
``(3) Documentation.--The Secretary, after consultation
with the Secretary of Energy, shall prescribe regulations
directing what specific documentation is required to be
retained or submitted by the taxpayer in order to claim the
credit under this section, which shall include, in addition
to the photographs under paragraph (1)(D), a form approved by
the Secretary that is completed and signed by the qualified
whole home energy efficiency retrofit contractor under
penalties of perjury. Such form shall include--
``(A) a statement that the contractor (or, if applicable,
the person described in paragraph (4)) followed the specified
procedures for establishing baseline energy use and
estimating reduction in energy use,
``(B) the name of the software used for calculating the
baseline energy use and reduction in energy use, the
percentage reduction in projected energy savings achieved,
and a statement that such software was certified for this
program by the Secretary, after consultation with the
Secretary of Energy,
``(C) a statement that the contractor (or, if applicable,
the person described in paragraph (4)) will retain the
details of the calculations and underlying energy bills for 5
years and will make such details available for inspection by
the Secretary or the Secretary of Energy, if so requested,
``(D) a list of measures installed and a statement that all
measures included in the
[[Page S1931]]
reduction in energy use estimate are included in, and
installed according to, standards of the applicable
certification program specified under clause (i) or (ii) of
subparagraph (A), or equivalent standards approved by the
Secretary, after consultation with the Secretary of Energy,
``(E) a statement that the contractor (or, if applicable,
the person described in paragraph (4)) meets the requirements
of paragraph (1)(A), and
``(F) documentation of the total cost of the project in
order to comply with the limitation under subsection
(b)(4)(B).
``(4) Certified home energy rater.--For purposes of
paragraph (1)(A), a contractor shall be deemed to have
satisfied the accreditation requirement under such paragraph
if the contractor enters into a contract with a person that
satisfies such accreditation requirement for purposes of
modeling the energy use reduction described in paragraph
(1)(B).
``(e) Additional Rules.--For purposes of this section--
``(1) No double benefit.--
``(A) In general.--With respect to any residence, no credit
shall be allowed under this section for any taxable year in
which the taxpayer claims a credit under section 25C.
``(B) Renewable energy systems and appliances.--In the case
of a renewable energy system or appliance that qualifies for
another credit under this chapter, the resulting reduction in
energy use shall not be taken into account in determining the
percentage energy use reductions under subsection (b).
``(C) No double benefit for certain expenditures.--The term
`qualified home energy efficiency expenditures' shall not
include any expenditure for which a deduction or credit is
claimed by the taxpayer under this chapter for the taxable
year or with respect to which the taxpayer receives any
Federal energy efficiency rebate.
``(2) Principal residence.--The term `principal residence'
has the same meaning as when used in section 121.
``(3) Special rules.--Rules similar to the rules under
paragraphs (4), (5), (6), (7), and (8) of section 25D(e) and
section 25C(e)(2) shall apply, as determined by the
Secretary, after consultation with the Secretary of Energy.
``(4) Basis adjustments.--For purposes of this subtitle, if
a credit is allowed under this section with respect to any
expenditure with respect to any property, the increase in the
basis of such property which would (but for this paragraph)
result from such expenditure shall be reduced by the amount
of the credit so allowed.
``(5) Election not to claim credit.--No credit shall be
determined under subsection (a) for the taxable year if the
taxpayer elects not to have subsection (a) apply to such
taxable year.
``(6) Multiple year retrofits.--If the taxpayer has claimed
a credit under this section in a previous taxable year, the
baseline energy use for the calculation of reduced energy use
must be established after the previous retrofit has been
placed in service.
``(f) Termination.--This section shall not apply with
respect to any costs paid or incurred after December 31,
2016.
``(g) Secretary Review.--The Secretary, after consultation
with the Secretary of Energy, shall establish a review
process for the retrofits performed, including an estimate of
the usage of the credit and a statistically valid analysis of
the average actual energy use reductions, utilizing utility
bill data collected on a voluntary basis, and report to
Congress not later than June 30, 2014, any findings and
recommendations for--
``(1) improvements to the effectiveness of the credit under
this section, and
``(2) expansion of the credit under this section to rental
units.''.
(b) Conforming Amendments.--
(1) Section 1016(a) is amended--
(A) by striking ``and'' at the end of paragraph (36),
(B) by striking the period at the end of paragraph (37) and
inserting ``, and'', and
(C) by adding at the end the following new paragraph:
``(38) to the extent provided in section 25E(e)(4), in the
case of amounts with respect to which a credit has been
allowed under section 25E.''.
(2) Section 6501(m) is amended by inserting ``25E(e)(5),''
after ``section''.
(3) The table of sections for subpart A of part IV of
subchapter A chapter 1 is amended by inserting after the item
relating to section 25D the following new item:
``Sec. 25E. Performance based energy improvements.''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred for a qualified whole
home energy efficiency retrofit placed in service after
December 31, 2013.
TITLE III--INDUSTRIAL ENERGY AND WATER EFFICIENCY
SEC. 301. MODIFICATIONS IN CREDIT FOR COMBINED HEAT AND POWER
SYSTEM PROPERTY.
(a) Modification of Certain Capacity Limitations.--Section
48(c)(3)(B) is amended--
(1) by striking ``15 megawatts'' in clause (ii) and
inserting ``25 megawatts'',
(2) by striking ``20,000 horsepower'' in clause (ii) and
inserting ``34,000 horsepower'', and
(3) by striking clause (iii).
(b) Increase in Credit Percentage for Systems With Greater
Efficiency.--Subparagraph (A) of section 48(a)(2) is
amended--
(1) by striking ``and'' at the end of subclause (III) of
clause (i),
(2) by adding at the end of clause (i) the following new
subclause:
``(V) combined heat and power system property the energy
efficiency percentage of which (as defined in subsection
(c)(3)(C)(i)) is equal to or greater than 85 percent,'',
(3) by redesignating clause (ii) as clause (iii),
(4) by striking ``clause (i)'' in clause (iii), as so
redesignated, and inserting ``clause (i) or (ii)'', and
(5) by inserting after clause (i) the following new clause:
``(ii) 20 percent in the case of combined heat and power
system property the energy percentage of which (as defined in
subsection (c)(3)(C)(i)) is equal to or greater than 75
percent and less than 85 percent, and''.
(c) Extension.--Clause (iv) of section 48(c)(3)(A) is
amended by striking ``January 1, 2017'' and inserting
``January 1, 2019''.
(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).
SEC. 302. INVESTMENT TAX CREDIT FOR BIOMASS HEATING PROPERTY.
(a) In General.--Subparagraph (A) of section 48(a)(3) is
amended by striking ``or'' at the end of clause (vi), by
inserting ``or'' at the end of clause (vii), and by inserting
after clause (vii) the following new clause:
``(viii) open-loop biomass (within the meaning of section
45(c)(3)) heating property, including boilers or furnaces
which operate at output efficiencies of not less than 65
percent (measured by the higher heating value of the fuel)
and which provide thermal energy in the form of heat, hot
water, or steam for space heating, air conditioning, domestic
hot water, or industrial process heat, but only with respect
to periods ending before January 1, 2016,''.
(b) 30 Percent and 15 Percent Credits.--
(1) In general.--Subparagraph (A) of section 48(a)(2), as
amended by this title, is amended--
(A) by redesignating clause (iii) as clause (iv),
(B) by striking ``and'' at the end of clause (ii),
(C) by striking ``clause (i) or (ii)'' in clause (iv), as
so redesignated, and inserting ``clause (i), (ii), or
(iii)'', and
(D) by inserting after clause (ii) the following new
clause:
``(iii) 15 percent in the case of energy property described
in paragraph (3)(A)(viii) to which clause (i)(VI) does not
apply, and''.
(2) Increased credit for greater efficiency.--Clause (i) of
section 48(a)(2)(A), as amended by this title, is amended by
striking ``and'' at the end of subclause (IV), by striking
the comma at the end of subclause (V) and inserting ``,
and'', and by inserting after subclause (V) the following new
subclause:
``(VI) energy property described in paragraph (3)(A)(viii)
which operates at an output efficiency of not less than 80
percent (measured by the higher heating value of the
fuel),''.
(c) Effective Date.--The amendments made by this section
shall apply to periods after the date of the enactment of
this Act, in taxable years ending after such date, 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).
SEC. 303. INVESTMENT TAX CREDIT FOR WASTE HEAT TO POWER
PROPERTY.
(a) In General.--Subparagraph (A) of section 48(a)(3), as
amended by this title, is amended by striking ``or'' at the
end of clause (vii), by striking the comma at the end of
clause (viii) and inserting ``, or'', and by inserting after
clause (viii) the following new clause:
``(ix) waste heat to power property,''.
(b) 30-Percent Credit.--Clause (i) of section 48(a)(2)(A),
as amended by this title, is amended by striking ``and'' at
the end of subclause (V), by striking the comma at the end of
subclause (VI) and inserting ``, and'', and by inserting
after subclause (VI) the following new subclause:
``(VII) waste heat to power property,''.
(c) Waste Heat To Power Property.--Subsection (c) of
section 48 is amended by adding at the end the following new
paragraph:
``(5) Waste heat to power property.--
``(A) In general.--The term `waste heat to power property'
means property--
``(i) comprising a system which generates electricity
through the recovery of a qualified waste heat resource, and
``(ii) which is placed in service before January 1, 2019.
``(B) Qualified waste heat resource.--The term `qualified
waste heat resource' means--
``(i) exhaust heat or flared gas from an industrial
process,
``(ii) waste gas or industrial tail gas that would
otherwise be flared, incinerated, or vented,
``(iii) a pressure drop in any gas for an industrial or
commercial process, or
``(iv) such other forms of waste heat resources as the
Secretary may determine.
``(C) Exception.--The term `qualified waste heat resource'
does not include any heat resource from a process whose
primary purpose
[[Page S1932]]
is the generation of electricity utilizing a fossil fuel or
the production of oil, natural gas, or other fossil fuels.''.
(d) Effective Date.--The amendments made by this section
shall apply to periods after the date of the enactment of
this Act, in taxable years ending after such date, 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).
SEC. 304. MOTOR ENERGY EFFICIENCY IMPROVEMENT TAX CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
section:
``SEC. 45S. MOTOR ENERGY EFFICIENCY IMPROVEMENT TAX CREDIT.
``(a) In General.--For purposes of section 38, the motor
energy efficiency improvement tax credit determined under
this section for the taxable year is an amount equal to $120
multiplied by the motor horsepower of an appliance, machine,
or equipment--
``(1) manufactured in such taxable year by a manufacturer
which incorporates an advanced motor and drive system into a
newly designed appliance, machine, or equipment or into a
redesigned appliance, machine, or equipment which did not
previously make use of the advanced motor and drive system,
or
``(2) placed back into service in such taxable year by an
end user which upgrades an existing appliance, machine, or
equipment with an advanced motor and drive system.
For any advanced motor and drive system with a total
horsepower of less than 10, such motor energy efficiency
improvement tax credit is an amount which bears the same
ratio to $120 as such total horsepower bears to 1 horsepower.
``(b) Advanced Motor and Drive System.--For purposes of
this section, the term `advanced motor and drive system'
means a motor and any required associated electronic control
which--
``(1) offers variable or multiple speed operation, and
``(2) uses permanent magnet technology, electronically
commutated motor technology, switched reluctance motor
technology, synchronous reluctance, or such other motor and
drive systems technologies as determined by the Secretary of
Energy.
``(c) Aggregate Per Taxpayer Limitation.--
``(1) In general.--The amount of the credit determined
under this section for any taxpayer for any taxable year
shall not exceed the excess (if any) of $2,000,000 over the
aggregate credits allowed under this section with respect to
such taxpayer for all prior taxable years.
``(2) Aggregation rules.--For purposes of this section, all
persons treated as a single employer under subsections (a)
and (b) of section 52 shall be treated as 1 taxpayer.
``(d) Special Rules.--
``(1) Basis reduction.--For purposes of this subtitle, the
basis of any property for which a credit is allowable under
subsection (a) shall be reduced by the amount of such credit
so allowed.
``(2) No double benefit.--No other credit shall be
allowable under this chapter for property with respect to
which a credit is allowed under this section.
``(3) Property used outside united states not qualified.--
No credit shall be allowable under subsection (a) with
respect to any property referred to in section 50(b)(1).
``(e) Application.--This section shall not apply to
property manufactured or placed back into service before the
date which is 6 months after the date of the enactment of
this section or after December 31, 2016.''.
(b) Conforming Amendments.--
(1) Section 38(b) 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 motor energy efficiency improvement tax credit
determined under section 45S.''.
(2) Section 1016(a) 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 45S(d)(1).''.
(3) 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. 45S. Motor energy efficiency improvement tax credit.''.
(c) Effective Date.--The amendments made by this section
shall apply to property manufactured or placed back into
service after the date which is 6 months after the date of
the enactment of this Act.
SEC. 305. CREDIT FOR REPLACEMENT OF CFC REFRIGERANT CHILLER.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1, as amended by this title, is amended by adding at
the end the following new section:
``SEC. 45T. CFC CHILLER REPLACEMENT CREDIT.
``(a) In General.--For purposes of section 38, the CFC
chiller replacement credit determined under this section for
the taxable year is an amount equal to--
``(1) $150 multiplied by the tonnage rating of a CFC
chiller replaced with a new efficient chiller that is placed
in service by the taxpayer during the taxable year, plus
``(2) if all chilled water distribution pumps connected to
the new efficient chiller include variable frequency drives,
$100 multiplied by any tonnage downsizing.
``(b) CFC Chiller.--For purposes of this section, the term
`CFC chiller' includes property which--
``(1) was installed after 1980 and before 1993,
``(2) utilizes chlorofluorocarbon refrigerant, and
``(3) until replaced by a new efficient chiller, has
remained in operation and utilized for cooling a commercial
building.
``(c) New Efficient Chiller.--For purposes of this section,
the term `new efficient chiller' includes a water-cooled
chiller which is certified to meet efficiency standards
effective on January 1, 2015, as defined in table 6.8 in
Standard 90.1-2013 of the American Society of Heating,
Refrigerating, and Air Conditioning Engineers.
``(d) Tonnage Downsizing.--For purposes of this section,
the term `tonnage downsizing' means the amount by which the
tonnage rating of the CFC chiller exceeds the tonnage rating
of the new efficient chiller.
``(e) Energy Audit.--As a condition of receiving a tax
credit under this section, an energy audit shall be performed
on the building prior to installation of the new efficient
chiller, identifying cost-effective energy-saving measures,
particularly measures that could contribute to chiller
downsizing. The audit shall satisfy criteria that shall be
issued by the Secretary of Energy.
``(f) Property Used by Tax-Exempt Entity.--In the case of a
CFC chiller replaced by a new efficient chiller the use of
which is described in paragraph (3) or (4) of section 50(b),
the person who sold such new efficient chiller to the entity
shall be treated as the taxpayer that placed in service the
new efficient chiller that replaced the CFC chiller, but only
if such person clearly discloses to such entity in a document
the amount of any credit allowable under subsection (a) and
the person certifies to the Secretary that the person reduced
the price the entity paid for such new efficient chiller by
the entire amount of such credit.
``(g) Termination.--This section shall not apply to
replacements made after December 31, 2017.''.
(b) Conforming Amendments.--
(1) Section 38(b), as amended by this title, is amended by
striking ``plus'' at the end of paragraph (36), by striking
the period at the end of paragraph (37) and inserting ``,
plus'', and by adding at the end the following new paragraph:
``(38) the CFC chiller replacement credit determined under
section 45T.''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1, as amended by this title, is
amended by adding at the end the following new item:
``Sec. 45T. CFC chiller replacement credit.''.
(c) Effective Date.--The amendments made by this section
shall apply to replacements made after the date of the
enactment of this Act.
SEC. 306. QUALIFYING EFFICIENT INDUSTRIAL PROCESS WATER USE
PROJECT CREDIT.
(a) In General.--Section 46 is amended by inserting a comma
at the end of paragraph (4), by striking ``and'' at the end
of paragraph (5), by striking the period at the end of
paragraph (6) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(7) the qualifying efficient industrial process water use
project credit.''.
(b) Amount of Credit.--Subpart E of part IV of subchapter A
of chapter 1 is amended by inserting after section 48D the
following new section:
``SEC. 48E. QUALIFYING EFFICIENT INDUSTRIAL PROCESS WATER USE
PROJECT CREDIT.
``(a) In General.--
``(1) Allowance of credit.--For purposes of section 46, the
qualifying efficient industrial process water use project
credit for any taxable year is an amount equal to the
applicable percentage of the qualified investment for such
taxable year with respect to any qualifying efficient
industrial process water use project of the taxpayer.
``(2) Applicable percentage.--For purposes of subsection
(a)--
``(A) In general.--The applicable percentage is--
``(i) 10 percent in the case of a qualifying efficient
industrial process water use project which achieves a 25
percent or greater (but less than 50 percent) reduction in
water use for industrial purposes,
``(ii) 20 percent in the case of a qualifying efficient
industrial process water use project which achieves a 50
percent or greater (but less than 75 percent) reduction in
water use for industrial purposes, and
``(iii) 30 percent in the case of a qualifying efficient
industrial process water use project which achieves a 75
percent or greater reduction in water use for industrial
purposes.
``(B) Water use.--For purposes of subparagraph (A)--
``(i) Measurement of reduction in water use.--
``(I) In general.--The taxpayer shall elect one of the
methods specified in clause (ii) for measuring the reduction
in water use achieved by a qualifying efficient industrial
process water use project.
``(II) Irrevocable election.--An election under subclause
(I), once made with respect to a qualifying efficient
industrial process water use project, shall apply to the
taxable year for which made and all subsequent taxable years,
and may not be revoked.
[[Page S1933]]
``(III) Projected savings.--The credit under subsection (a)
may be claimed on the basis of a reduction in water use which
is projected, by a registered professional engineer who is
not a related person (within the meaning of section
144(a)(3)(A)) to the taxpayer or the installer of eligible
property, to be achieved by a qualifying efficient industrial
process water use project. Such projection, if used as a
basis for determining the credit under subsection (a), shall
be included with the return of tax.
``(ii) Methods specified.--The methods specified in this
clause are--
``(I) a measurement of the percentage reduction in water
use per unit of product manufactured by the taxpayer, and
``(II) a measurement of the percentage reduction in water
use per pound of product manufactured by the taxpayer.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment for any taxable year is the basis of
eligible property placed in service by the taxpayer during
such taxable year which is part of a qualifying efficient
industrial process water use project.
``(2) Exceptions.--Such term shall not include any portion
of the basis related to--
``(A) permitting,
``(B) land acquisition, or
``(C) infrastructure not directly associated with the
implementation of the technology or process improvements of
the qualifying efficient industrial process water use
project.
``(3) Certain qualified progress expenditures rules made
applicable.--Rules similar to the rules of subsections (c)(4)
and (d) of section 46 (as in effect on the day before the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of this section.
``(4) Special rule for subsidized energy financing.--Rules
similar to the rules of section 48(a)(4) (without regard to
subparagraph (D) thereof) shall apply for purposes of this
section.
``(5) Limitation.--The amount which is treated for all
taxable years with respect to any qualifying efficient
industrial process water use project with respect to any site
shall not exceed $10,000,000.
``(c) Definitions.--For purposes of this section--
``(1) Qualifying efficient industrial process water use
project.--
``(A) In general.--The term `qualifying efficient
industrial process water use project' means, with respect to
any site, a project which retrofits or expands an existing
facility to implement technology or process improvements
which are designed to reduce water use for systems that use
any form of water in the production of goods in the
manufacturing sector (as defined in North American Industrial
Classification System codes 31, 32, and 33), including any
system that uses water for heating, cooling, or energy
production for the production of goods in the trade or
business of manufacturing (other than extraction of fossil
fuels). Such term shall not include a project which alters an
existing facility to change the type of goods produced by
such facility.
``(B) Systems.--For purposes of subparagraph (A), the term
`system' does not include any system which does not encompass
1 or more complete processes.
``(2) Eligible property.--The term `eligible property'
means any property--
``(A) which is part of a qualifying efficient industrial
process water use project and which is necessary for the
reduction in water use described in paragraph (1),
``(B)(i) the construction, reconstruction, or erection of
which is completed by the taxpayer, or
``(ii) which is acquired by the taxpayer if the original
use of such property commences with the taxpayer, and
``(C) with respect to which depreciation (or amortization
in lieu of depreciation) is allowable.
``(3) Water use.--
``(A) In general.--The term `water use' means all water
taken for use at the site directly from ground and surface
water sources together with any water supplied to the site by
a regulated water system.
``(B) Regulated water system.--The term `regulated water
system' means a system that supplies water that has been
treated to potable standards.
``(d) Termination.--This section shall not apply to periods
after December 31, 2017, under rules similar to the rules of
section 48(m) (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).''.
(c) Conforming Amendments.--
(1) Section 49(a)(1)(C) is amended by striking ``and'' at
the end of clause (v), by striking the period at the end of
clause (vi) and inserting ``, and'', and by adding at the end
the following new clause:
``(vii) the basis of any property which is part of a
qualifying efficient industrial use water project under
section 48E.''.
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 48D the following new item:
``Sec. 48E. Qualifying efficient industrial process water use project
credit.''.
(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).
Mrs. FEINSTEIN. Mr. President, I rise to join Senators Cardin and
Schatz in introducing the Energy Efficiency Tax Incentives Act.
This bill has been drafted cooperatively, and my colleagues have been
especially accommodating of changes requested by California's experts.
I thank them for their hard work on this bill.
This legislation revises and extends energy efficiency tax incentives
for homes, commercial buildings, and industrial facilities.
The bill continues the effort for energy efficiency improvements that
I began with Senator Bob Smith of New Hampshire in 2001. I was proud to
pass that legislation with Senator Snowe in 2005.
The Energy Efficiency Tax Incentives Act builds on that law by
reforming tax code incentives to implement a performance-based regime
in which incentives grow larger as energy efficiency increases.
The policy improvements in this bill were recommended by energy
efficiency experts.
This bill establishes energy and water efficiency incentives for
commercial buildings and industrial facilities, about which Senator
Cardin and Senator Schatz have focused their remarks.
I would like to focus on a different provision in the bill: tax
credits for home renovations that will increase energy efficiency of
homes by at least 20 percent.
The tax credit would increase in size with every 5 percent of
additional energy efficiency improvement achieved.
Homeowners who improve the efficiency of their home by more than 50
percent will qualify for a maximum credit of $5,000.
In addition to increased energy efficiency, this bill helps address
the continued double digit unemployment in the construction sector.
It is clear that we need policies that will help put the construction
industry back to work, but with 10 percent of homes still vacant, any
stimulation of new-home construction could make the situation worse.
That is why this bill is so creative--it stimulates the construction
industry by incentivizing the renovation of existing homes.
This bill creates tax incentives for energy efficiency home
renovation based on the energy performance of the home, rather than
just the cost of the equipment.
Current policy allows homeowners to claim credits for the purchase of
energy efficient insulation, windows, doors, heaters, air conditioners
and water heaters. That approach is expensive, costing about $2 billion
per year.
By restructuring the credit to apply to whole-home energy renovations
that reward energy efficiency performance, this proposal has the
potential to increase effectiveness while substantially lowering the
cost to the U.S. Treasury.
This legislation also includes provisions to promote effectiveness
and prevent abuse. The contractor carrying out the work must sign an
affidavit certifying the work was done, as well as submit photographs
of the work. Additionally, the contractor must use certified, computer-
based energy efficiency measurement tools.
The credit would be limited to renovations of primary residences that
do not increase the size of the home. The credit would be capped at 30
percent of the cost of renovation in order to prevent homeowners from
making large claims for relatively inexpensive renovations.
Since it is a tax credit, all claims would be subject to IRS audits.
In addition to incentivizing energy efficiency improvements, the bill
also creates an Industrial Process Water Use Project Credit.
This is a technology-neutral, performance-based tax credit for
implementing efficiency measures to reduce the use of water in the
manufacturing sector.
In a state like California, which frequently faces very dry
conditions, rewarding water conservation and efficiency measures is
beneficial.
Much like the energy provisions, the bill increases the tax
incentives as water savings grow.
The incentive begins with a 10 percent tax credit for implementing
efficiency measures that achieve at least
[[Page S1934]]
25 percent reduction in water use. The tax credit then increases by 10
percent for each 25 percent additional water savings, with a 30 percent
maximum.
This bill is important because it will help incentivize the
construction industry to upgrade buildings across the country.
The 113 million homes in America account for 22 percent of the U.S.
energy use, according to the Department of Energy. And 4.8 million
commercial and 350,000 industrial facilities account for an additional
18 percent.
These buildings also account for 27 percent of carbon dioxide
emissions in the United States, according to the Energy Information
Administration.
Experts and scientists believe improving energy efficiency is one of
the most cost-effective ways to combat climate change and reduce
greenhouse gas emissions.
A recent McKinsey & Co. study concluded that maximizing energy
efficiency for homes and commercial buildings could help reduce U.S.
energy consumption by 23 percent by 2020.
This is a jobs bill that also rewards energy and water efficiency
renovations. It will lead to more jobs in the construction sector, an
increase in energy efficiency, a reduction in pollution, and an
expansion of the market for efficient technology and products.
This bill is supported by the Alliance to Save Energy, Efficiency
First, the American Council for an Energy Efficient Economy, and the
Natural Resource Defense Council.
This sort of investment--putting Americans back to work to upgrade
the country's infrastructure--is the type of legislation on which
Congress should be spending more time.
Mr. SCHATZ. Mr. President, I rise today to discuss the important role
that energy efficiency plays in our transition to a clean energy
economy, and the importance of supporting energy efficiency efforts
with strong Federal policy. Today, Senators Cardin, Feinstein, and I
introduced comprehensive legislation, called the Energy Efficiency Tax
Incentives Act of 2014, to reform, improve, and extend crucial tax
incentives for energy efficiency. Our legislation focuses on three key
sectors: commercial buildings, homes, and industry and manufacturing.
My colleagues have spoken ably about the first two already today, and I
would like to spend a few moments discussing the third title of this
bill.
This bill would create targeted, non-permanent incentives to help the
U.S. industrial sector become more globally competitive by employing
smart technological improvements to reduce energy use and encourage
water reuse.
We have continually seen the eagerness of U.S. industries to innovate
and improve the processes by which they produce countless high-quality
goods. This set of incentives will help U.S. manufacturers accelerate
and expand cutting-edge ideas while also reducing costs.
Industrial and manufacturing facilities have processes specific to
each industry and even to each facility. Therefore, industrial
efficiency improvements must be focused on these processes, not
building retrofits like we see in commercial and residential efficiency
measures. My colleagues and I have worked to develop incentives that
target energy-intensive processes common to the industrial sector. They
include advanced motors, water reuse, combined heat and power and waste
heat recovery, thermal biomass, and efficient chillers. I would like to
take a few moments to describe the various sections of the industrial
efficiency title of the bill.
On average, motors account for over 65 percent of an industrial
energy user's electricity use, according to analysis by the
International Energy Agency. This bill creates a credit for advanced
industrial use motors, including variable speed motors. New advances in
power electronics and controls over the past 5 years have advanced the
potential for new smart motor technologies to provide a significant
energy savings potential if these new motors are placed widely into
service.
According to the National Water Reuse Association, the U.S. currently
reuses only 7.3 percent of its water, and there is significant
potential for gains in this area. The industrial sector, which is
responsible for 62.5 percent of domestic freshwater withdrawals, is an
ideal place to introduce transformative water reuse and water saving
technologies. The bill would create a technology-neutral, performance-
based investment tax credit for reuse, recycling, and/or efficiency
measures related to industrial water reuse in the manufacturing sector.
A recent Department of Energy study estimates that achieving the
President's goal of 40 gigawatts of Combined Heat and Power, also known
as CHP, would save energy users $10 billion a year compared to current
energy use. In 2008, Congress enacted a 10 percent investment tax
credit for combined heat and power systems. The bill would expand that
credit's applicability, from the first 15 megawatts to the first 25
megawatts of system capacity. The bill would also remove the existing
overall system size cap of 50 megawatts, allowing a greater number of
combined heat and power projects to be financially viable and move
forward. Finally, the bill would create two new tiers of the credit for
CHP systems that achieve especially high efficiency levels. By
encouraging adoption of CHP and waste heat recovery technologies, this
bill is a common-sense set of incentives that will help manufacturers
to become more efficient, reduce energy costs, create highly skilled
jobs, and ensure the delivery of reliable power.
New technologies have developed recently that can take advantage of
low-grade heat sources. Called Waste Heat to Power, these systems can
achieve even greater levels of efficiency from industrial and
manufacturing applications.
Currently no incentives exist to promote thermal-only biomass use for
commercial and industrial applications. Using biomass for thermal
applications has numerous advantages over using biomass to produce
electricity. Thermal use is significantly more efficient, less
polluting, and more appropriately-scaled to biomass resources.
Finally, large water-cooled chillers are the engines of air-
conditioning systems for almost all large buildings. This bill would
establish a tax credit that incentivizes the replacement of older
chillers that still use environmentally harmful CFC refrigerants with
chillers that are both more efficient and use fewer harmful chemicals.
Recent years have seen a resurgence in American industry and
manufacturing. As we work to get our economy back on track, become more
competitive globally, and fight climate change, we should consider
robust efficiency incentives for our industrial sector as a crucial
tool in achieving those goals.
I would like to commend my colleagues Senator Cardin and Senator
Feinstein for their hard work on this bill. It represents the latest
thinking in terms of straightforward, performance-based technology-
neutral, non-permanent efficiency incentives. As we aim to improve
efficiency in the industrial, commercial building, and residential
sectors, I urge my colleagues in the Senate to support this critical
bill.
______
By Mr. ROBERTS (for himself, Mr. Inhofe, Mr. Cochran, Mr. Moran,
Mr. Wicker, Mr. Enzi, and Mr. Chambliss):
S. 2191. A bill to amend the Internal Revenue Code of 1986 to repeal
the excise tax on high cost employer-sponsored health coverage, and for
other purposes; to the Committee on Finance.
Mr. ROBERTS. Mr. President, I come to the floor today to speak about
ObamaCare and what I have long believed is a march to rationing of
health care.
The ObamaCare bill and the accompanying regulations now tower over 7
feet--1 foot above where I stand--when stacked together, and they have
provision after provision that will deny patients the care they want,
the care they need to ensure they get the life-sustaining and
lifesaving treatments that are best for them.
These rationing elements in ObamaCare have been documented by a
recent report of the National Right to Life Committee's Powell Center
for Medical Ethics. This study is entitled ``The Affordable Health Care
Act and Health Care Access in the United States.''
Perhaps most egregious about ObamaCare is that it directly inserts
the Federal Government into the personal lives of Americans, their
families, and their doctors.
[[Page S1935]]
We all know about the individual mandate that coerces people into
purchasing a product they may not want by threatening to tax them. And
I have often spoken about my personal nemesis in the rationing board
that I am going to bring up--the Independent Payment Advisory Board,
IPAB. This is a board made up of 18--15 voting and 3 nonvoting--all
unelected bureaucrats who will decide what gets to stay and what must
go in Medicare coverage. They will decide which treatments and services
will be covered and which will not. And there is no accountability
whatsoever. It would, in fact, take a two-thirds majority of the U.S.
Senate to undo any of their actions. As a result, this board diminishes
our constitutional responsibility.
This President has already raided half a trillion dollars from
Medicare to pay for ObamaCare, and then he gave himself the ability to
go after even more Medicare dollars without any accountability. This,
my friends, is frightening. It is irresponsible. But there is more.
It is conceivable that the Independent Payment Advisory Board won't
just limit Medicare access; it will also propose ways for the Federal
Government to limit what Americans of all ages are allowed to spend out
of their own private money--not taxpayer funds--to save the lives and
health of their families.
Shocking but true: ObamaCare tells bureaucrats on the board to make
sure we are not even allowed to keep up with medical inflation.
Further, it is conceivable that the board will suggest ways for the
Federal Government to impose so-called quality and efficiency standards
on doctors and hospitals with the purpose of limiting the health care
we can get.
So here is the deal: If a doctor dares to give her patient treatment
beyond what those standards allow, the doctor will be punished. That
doctor will be excluded from all of the health insurance plans
qualified under ObamaCare. Unbelievably, under ObamaCare, Washington
bureaucrats can dictate one uniform standard of health care that is
designed to limit what private citizens are allowed to spend out of
their own money to save their own lives.
But the Independent Payment Advisory Board isn't the only rationing
provision in the ObamaCare or Affordable Healthcare Act. If only.
ObamaCare also has a Cadillac tax for having too much health care
coverage. Patients all across America need to know there is a provision
of ObamaCare that punishes them and their employer if they provide
coverage that is above the arbitrary limits imposed by the Federal
Government. This is an additional 40-percent tax on individuals who
need more expensive treatments and coverage oftentimes essential to
battle life-threatening illnesses. Even worse, these ObamaCare limits
were drafted in a way they will never be able to keep up with medical
inflation. This means insurance companies will have to cut back even
more on patient treatments and services or people will be forced to pay
an incredibly higher tax.
What about those individuals who are already suffering from life-
threatening illnesses who really need the care? This is why we should
pass the legislation I am offering.
Do Americans know that there is a provision in ObamaCare that lets
the Federal Government--not them and not their employer--decide if
coverage is ``excessive or unjustified''? This isn't government-
subsidized coverage in the exchanges, nor is it the federally funded
Medicare and Medicaid coverage. This is their own and their employees'
private money--their money. The Federal Government is given the
authority to decide if the way it is being spent is excessive or
unjustified, and they are going to do it through the provision of
ObamaCare that allows the Obama administration to review premiums by
pressuring private insurance companies to stop offering coverage or
face adverse government consequences.
So far we have talked about the private coverage, but there are also
similar provisions for seniors' coverage. It wasn't bad enough that the
President diverted one-half trillion dollars from Medicare to pay for
ObamaCare to begin with, he also granted the Department of Health and
Human Services the authority to deny private market-offered coverage
for services and treatments that could save your life. Before ObamaCare
these private market programs such as the prescription drug program and
Medicare Advantage could allow seniors to add their own money to
purchase coverage they want and need beyond what the government will
pay. ObamaCare allows Washington bureaucrats to deny that choice.
Folks, this isn't how we should be treating our seniors. It isn't how
we should be treating people who need access to life-saving treatment
and services. This isn't how we should be treating anybody.
That is why today I come to the floor to introduce the Repeal
Rationing in Support of Life Act of 2014. My legislation repeals these
provisions that allow the Federal Government to intercede on very
personal decisions. It repeals the provisions that authorize rationing
boards to deny patients the ability to access the care that may save
their lives.
This legislation is relatively simple and should be supported by all
of my colleagues to address some of the egregious changes from the
Affordable Care Act that patients should be aware of but that many
don't even know exist. This is down the road. We are trying to stay
ahead of the curve. That is why I am introducing this legislation.
This legislation builds upon my Restoring Access to Medication Act.
This bill repeals the provision of ObamaCare limiting a patient's right
to purchase over-the-counter products with their own money. It is also
a continuation of my efforts that I discussed when introducing the Four
Rationers Repeal Act many times on this floor. It repeals the
Independent Payment Advisory Board. It repeals the euphemistically but
misleadingly named Innovation Center. It repeals the changes made to
the Preventive Services Task Force and makes sure any comparative
effectiveness research is used by the doctor and the patient, not
coverage providers or CMS, to determine the best care for patients, not
simply try to lower costs.
I really believe that in order to protect this all-important doctor-
patient relationship we need to repeal and most importantly to replace
ObamaCare with the real reforms that work for Kansans and all
Americans. However, until we can accomplish full repeal we at least
need to ensure we are protecting the life-saving care and treatment
that Americans need by attacking the elements of ObamaCare that ration
care, and passing the Repeal Rationing and Support of Life Act of 2014.
I urge my colleagues to support this proposal and take the steps
necessary to protect the lives of their constituents.
______
By Mr. ALEXANDER (for himself, Mr. McConnell, Mr. Isakson, and
Mr. Paul):
S. 2193. A bill to amend the Horse Protection Act to provide
increased protection for horses participating in shows, exhibitions, or
sales, and for other purposes; to the Committee on Commerce, Science,
and Transportation.
Mr. ALEXANDER. Mr. President, today I am introducing a bill with
Senators McConnell, Isakson and Paul that will preserve the Tennessee
Walking Horse tradition while stopping the contemptible practice of
illegal soring.
The Horse Protection Act Amendments Act of 2014, will preserve the
century-old Tennessee Walking Horse tradition and stop the contemptible
practice of illegal soring.
This legislation builds upon a bill introduced in the House of
Representatives by Congressman Marsha Blackburn that has support of 11
other congressmen and the American Farm Bureau. The Tennessee Farm
Bureau commented about Congressman Blackburn's bill in a letter to me
that said her legislation would ``allow the vast majority of horse
owners, trainers and breeders and those who play by the rules to
confidently participate in the horse shows.''
A competing bill, advocated by the Humane Society of the United
States, has also been introduced in the Senate and would ban many
industry-standard training and show devices. This legislation has been
described by the Performance Show Horse Association as legislation that
would ``do little more than create another layer of bureaucracy at the
USDA while denying horse enthusiasts the opportunity'' to participate
in competitions that are the
[[Page S1936]]
basis of the Tennessee Walking Horse industry.
The Humane Society Bill goes too far. In baseball, if a player
illegally uses steroids, you punish the player--you don't shut down
America's national pastime. With Tennessee Walking Horse shows, when
trainers, owners or riders illegally sore a horse, we should find a
more effective way to punish and stop them--not shut down one of
Tennessee's most treasured traditions. The problem with the Humane
Society bill is that it destroys a Tennessee tradition known around the
world.
Julius Johnson, Commissioner of Agriculture for Tennessee, said that
the Humane Society legislation will, ``damage the industry
significantly and potentially eliminate the performance horse all
together.''
When I first went to Japan in 1979 to recruit Nissan, the Tennessee
Walking Horse was one of the things the Japanese knew best about our
state. In fact, the emperor had his own Walking Horse because it has an
enjoyable gait that makes riding a more pleasurable experience. When
the first major supplier of Nissan, Calsonic, came to Shelbyville, the
company's gift to Tennessee was Calsonic Arena, where the Tennessee
Walking Horse National Celebration is held.
In 2013 the Tennessee Walking Horse tradition included more than 360
affiliated shows, and it featured more than 220,000 registered horses
nationwide, including more than 55,000 in Tennessee, according to the
Tennessee Walking Horse Association.
Our goal is to find a way to preserve the Tennessee Walking Horse
tradition and stop the cruelty to horses. We need a balanced approach,
and that is what this bill provides.
This legislation takes four primary steps to preserve the Tennessee
Walking Horse tradition while ending the illegal practice of soring.
The bill would create consistent oversight by consolidating the
numerous ``horse industry organizations'' that currently handle
inspections into one organization overseeing inspections, governed by a
board. The board would be composed of appointees by the States of
Tennessee and Kentucky, as well as experts in the Tennessee Walking
Horse industry.
Next the bill requires the use of objective, scientific testing to
determine whether trainers, riders or owners are using soring
techniques. Examples of this objective testing include blood samples
and swabbing the horse for chemicals used to sore a horse.
Lastly, the legislation would ensure the integrity of horse
inspectors by instructing the horse industry organization to establish
requirements to prevent conflicts of interest with trainers, breeders
and owners involved in showing the Tennessee Walking Horse.
We have proposed three improvements to the legislation introduced in
the House. First, the new consolidated horse industry organization
would be required to identify and contract with equine veterinary
experts to advise the horse industry organization on testing methods
and procedures, as well as the certification of test results.
Next the legislation creates a suspension period for horses that are
found to be sore. Owners whose horses are found to be sore will have
their horses suspended from showing for 30-days for the first offense,
with additional offenses requiring 90-day suspensions. This is on top
of existing penalties already in the Horse Protection Act. For a first
time offense a person could spend one-year in jail and also pay a $3000
fine. For a second or future offense a person could spend two-years in
jail and also pay a fine of $5000.
Lastly, the legislation creates four-year term limits for board
members of the horse industry organization that would oversee
inspections.
We can end the contemptible practice of illegal soring without
shutting down the century-old tradition of the Tennessee Walking Horse.
I urge my colleagues to carefully consider this legislation and the
balanced approach it provides.
______
By Mr. CRUZ:
S. 2195. A bill to deny admission to the United States to any
representative to the United Nations who has engaged in espionage
activities against the United States, poses a threat to United States
national security interests, or has engaged in a terrorist activity
against the United States; to the Committee on the Judiciary.
Mr. CRUZ. Mr. President, I rise today to draw attention to an
extraordinarily dangerous situation that our country faces under
current law, which allows no terrorists to be granted visas to the
United States under the cover of being ambassadors to the United
Nations.
The President of the Islamic Republic of Iran, Hasan Ruhani, has
recently announced that Hamid Aboutalebi is his new ambassador to the
U.N., which is, of course, headquartered in Manhattan, NY, and a visa
application has been duly filed. In most cases--indeed, until now, in
all cases--such applications for ambassadors have been granted in
accordance with article 13 of the United Nations charter, but Mr.
Aboutalebi's is a special case, as he was a member of The Muslim
Students following the Imam's Line, the group who held 52 Americans
hostage in Tehran for 444 days from 1979 to 1981. He protests that his
involvement was limited to translation and negotiation, but he was
sufficiently involved for the Muslim Students organization, which is
still active, to feature to this day his photo on their official Web
site celebrating that historic outrage against the United States of
America. Now the Obama administration is considering granting this
person a visa to come to the United States. I have to wonder--as did
CIA Director Stansfield Turner in the movie ``Argo''--you don't have a
better bad idea than this?
It is unconscionable that in the name of international diplomatic
protocol, the United States would be forced to host a foreign national
who showed a brutal disregard of the status of diplomats when they were
stationed in his country. This person is an acknowledged terrorist.
In his January 23, 1980, State of the Union Address, then-President
Jimmy Carter called the hostages ``innocent victims of terrorism'' and
their captivity an act of ``international terrorism.'' I do not believe
that anyone--beyond perhaps the Supreme Leader in Tehran--has debated
President Carter's characterization since then, nor do I think I have
ever agreed more emphatically with President Carter.
It is therefore necessary to amend the statute that currently gives
the President the discretion to reject an applicant on the ground that
he or she, as it currently states, has engaged in espionage against the
United States and poses a national security threat.
The legislation I am introducing, S. 2195, will require the President
to deny a U.N.-related applicant a visa if the President determines the
applicant has engaged in terrorist activity against the United States,
has engaged in espionage against the United States, or poses a national
security threat to the United States.
I will note that I very much appreciated the kind comments and the
impassioned support for this legislation from the senior Senator from
South Carolina.
This legislation speaks to the larger issue of whom we have to let
into this country. How would we feel, for example, if the Taliban had
sent Osama bin Laden to be an ambassador to the United Nations from
Afghanistan or how would we feel if some other country sent an
ambassador who was complicit in the terrorist attack that murdered 220
marines, 18 sailors, and 3 soldiers in Beirut in 1983 or how would we
feel if another country sent as an ambassador someone who was complicit
in the terrorist attack on Khobar Towers that murdered 19 airmen in
1996, to name but a few potential examples? None of these examples
would necessarily meet the current statutory requirement of having
engaged in espionage. They murdered or kidnapped or tortured innocent
Americans, but they didn't necessarily engage in a specific act of
espionage. But all unequivocally should be excluded. This legislation
would ensure that such people can never use the United Nations to gain
entry into the United States.
I had intended this afternoon to ask the Senate for unanimous consent
to pass this legislation to change the standard so that we could
exclude a known terrorist from entry into this country. However, I am
pleased to report that I have been told there is a real possibility of
bipartisan cooperation on this--a real possibility that both sides of
the aisle will work together to expeditiously change this law
[[Page S1937]]
so we can keep this known terrorist out of the United States. I am
encouraged by that possibility of cooperation. I hope it comes to
fruition. And I hope this week we see the Senate act in a bipartisan
way and in a unanimous way to change this law to exclude this known
terrorist.
I wish to make a broader point. This nomination is willfully,
deliberately insulting and contemptuous. It is not an accident that
Ruhani picked a known terrorist who held Americans hostage to send to
our country. I would suggest that this action should serve as a wake-up
call that the regime in Tehran is directed by the same policies that
resulted in the hostage crisis in the first place.
There has been considerable optimism expressed by the Obama
administration in the months following the election of President Ruhani
that Iran is somehow softening its position toward the West, that
Ruhani is somehow a moderate and is acting as a good-faith partner in
its negotiations over its nuclear program. This nomination should
dispel those illusions. And the professed optimism of this
administration flies in the face of reason.
On the eve of the first round of these talks in November, the
Revolutionary Guard transferred American pastor Saeed Abedini, unjustly
incarcerated simply for professing his Christian faith, from the Evan
Prison to the even more brutal Rajai Shahr Prison, carefully selecting
the date of that transfer to be the anniversary of the hostage crisis--
what they call ``Death to America'' day in Iran.
After the joint plan of action was agreed to in late November, which
one of our closest allies has rightly assessed as a ``very, very bad
deal''--a historic mistake--President Ruhani triumphantly tweeted--in
English, no less--that in the Geneva agreement, ``world powers had
surrendered to Iran's will.'' These are hardly the words of a friend.
Last February the Iranian Government released a statement declaring
that the Nation of Israel is ``a cancerous tumor that must be
removed.'' These are not the words of a rational negotiating partner.
The choice of Mr. Aboutalebi for ambassador to the United Nations
once again demonstrates that the same militant hatred of America that
has dominated Iran's foreign policy since the revolution continues to
flourish unabated. Indeed, there is a reason Iran refers to Israel as
the ``Little Satan'' and America as the ``Great Satan.''
It is astonishing, it is dismaying, it is dangerous that the
administration continues to engage in these talks given the clear and
consistent message of hostility coming out of Tehran.
The legislation I am introducing will take the first step by
establishing that there are no circumstances under which the
perpetrators of the hostage crisis--those who have committed overt acts
of war against America--will be welcomed into the United States. This
action should be followed by the President suspending the Geneva
negotiations unless and until Iran not only ceases this behavior but
also ceases all enrichment activities and dismantles their nuclear
program in its entirety. Then and only then should there be meaningful
dialogue between our two countries.
In 1979 our citizens had to wait more than a year--during which they
were tortured by their captors--before they were finally released on
January 20, 1981--not coincidentally on the very day on which Ronald
Reagan was inaugurated as President.
I am encouraged at the prospect of bipartisan cooperation so that we
can stand together as a unanimous Senate against allowing a known
terrorist into the United States who has participated in acts of war
against our Nation. We should not extend the ordeal of those hostages
even further by tolerating this most recent outrage on the part of
Iran.
One of the former hostages, Barry Rosen, called the possibility that
the United States might grant the visa application a ``disgrace,'' and
he said, ``It may be [setting] a precedent but if the President and
Congress don't condemn this act by the Islamic Republic, then our
captivity and suffering at the hands of Iran was for nothing.''
I believe it is well worth setting a precedent to show the world that
whatever smiling mask is on the other side of the table in Geneva, the
true face of Tehran remains the terrorist who took our people hostage
35 years ago, whom they are now attempting to send to America under the
auspices of being an ambassador. Instead, I believe we should stand
together in saying that a known terrorist who has carried out acts of
war against America will, in Mr. Rosen's words, ``never set foot on
American soil.'' I hope we can stand together behind this legislation.
____________________