I 

111TH CONGRESS 

1ST SESSION H. R. 3659 

Amend the Internal Revenue Code of 1986 to allow a credit against income 

tax for amounts paid for energy efficient property placed in service 

in commercial buildings pursuant to an approved energy efficiency plan. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 29, 2009 

Mr. WU introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL 

Amend the Internal Revenue Code of 1986 to allow a credit 

against income tax for amounts paid for energy efficient 

property placed in service in commercial buildings pursuant to an approved energy efficiency plan. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Building Energy Tax 

5 Credit Act of 2009’’. 

6 SEC. 2. COMMERCIAL BUILDING ENERGY PROJECT CREDIT. 

7 (a) IN GENERAL.—Subpart D of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 (relating to business related credits) is amended by 

2 adding at the end the following new section: 

3 ‘‘SEC. 45R. COMMERCIAL BUILDING ENERGY PROJECT 

4 CREDIT. 

5 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec6 tion 38, the commercial building energy project credit is 

7 an amount equal to 35 percent of the cost of energy con8 servation commercial building property placed in service 

9 by the taxpayer. 

10 ‘‘(b) MAXIMUM AMOUNT OF CREDIT.—The credit 

11 under subsection (a) with respect to any building for any 

12 taxable year shall not exceed the excess (if any) of— 

13 ‘‘(1) the product of— 

14 ‘‘(A) $4.00, and 

15 ‘‘(B) the square footage of the building, 

16 over 

17 ‘‘(2) the aggregate credit allowed under sub18 section (a) with respect to the building for all prior 

19 taxable years. 

20 ‘‘(c) ENERGY CONSERVATION COMMERCIAL BUILD21 ING PROPERTY.—For purposes of this section, the term 

22 ‘energy conservation commercial building property’ means 

23 property— 

24 ‘‘(1) with respect to which depreciation (or am25 ortization in lieu of depreciation) is allowable, 


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1 ‘‘(2) which is installed on or in any building 

2 which is located in the United States, and 

3 ‘‘(3) which is installed as part of a commercial 

4 building energy project. 

5 ‘‘(d) COMMERCIAL BUILDING ENERGY PROJECT.— 

6 For purposes of this section, the term ‘commercial build7 ing energy project’ means a project— 

8 ‘‘(1)(A) to install energy efficient commercial 

9 building property (as defined in section 179D(c)), or 

10 ‘‘(B) with respect to a building, to achieve an 

11 energy consumption rate which is not more 60 per12 cent of the energy consumption rate under the 

13 ASHRAE Standard 90.1–2007 for commercial 

14 buildings, and 

15 ‘‘(2) with respect to which credit amounts have 

16 been allocated by an energy credit agency under sub17 section (e). 

18 ‘‘(e) ALLOCATIONS OF CREDIT AMOUNTS.— 

19 ‘‘(1) CREDIT LIMITATION WITH RESPECT TO

20 PROJECT.—The amount of credit determined under 

21 this section for any taxable year with respect to any 

22 project shall not exceed the State energy credit dol23 lar amount allocated to such project under this sub24 section. 


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1 ‘‘(2) CREDIT DOLLAR AMOUNT FOR AGEN2 CIES.— 

3 ‘‘(A) IN GENERAL.—The aggregate credit 

4 dollar amount which an energy credit agency 

5 may allocate for any calendar year is the limita6 tion allocated under subparagraph (B) for such 

7 calendar year to such agency. 

8 ‘‘(B) CREDIT LIMITATION ALLOCATED TO

9 STATE ENERGY AGENCIES.— 

10 ‘‘(i) IN GENERAL.—The Secretary 

11 shall allocate for each calendar year the 

12 national energy credit limitation among the 

13 States in proportion to the population of 

14 the State. Such limitation shall be allo15 cated to the energy credit agency of each 

16 such State. If there is more than 1 energy 

17 credit agency of a State, all such agencies 

18 shall be treated as a single agency. 

19 ‘‘(ii) NATIONAL ENERGY CREDIT LIMI20 TATION.—There is a national energy credit 

21 limitation for each calendar year of 

22 $100,000,000. 

23 ‘‘(iii) POPULATION.—For purposes of 

24 this paragraph, population shall be deter25 mined in accordance with section 146(j). 


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1 ‘‘(3) SPECIAL RULES.— 

2 ‘‘(A) BUILDING MUST BE LOCATED WITH3 IN JURISDICTION OF CREDIT AGENCY.—An en4 ergy credit agency may allocate its aggregate 

5 energy credit dollar amount only to projects 

6 with respect to buildings located in the jurisdic7 tion of the governmental unit of which such 

8 agency is a part. 

9 ‘‘(B) AGENCY ALLOCATIONS IN EXCESS OF

10 LIMIT.—If the aggregate energy credit dollar 

11 amounts allocated by an energy credit agency 

12 for any calendar year exceed the portion of the 

13 national energy credit limitation allocated to 

14 such agency for such calendar year, the energy 

15 credit dollar amounts so allocated shall be re16 duced (to the extent of such excess) for projects 

17 in the reverse of the order in which the alloca18 tions of such amounts were made. 

19 ‘‘(4) ENERGY CREDIT AGENCY.—The term ‘en20 ergy credit agency’ means any agency authorized to 

21 carry out this subsection. 

22 ‘‘(f) RESPONSIBILITIES OF ENERGY CREDIT AGEN23 CIES.— 

24 ‘‘(1) IN GENERAL.—Notwithstanding any other 

25 provision of this section, the energy credit dollar 


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1 amount with respect to any project shall be zero un2 less such amount was allocated pursuant to a quali3 fied allocation plan of the energy credit agency 

4 which is approved by the governmental unit (in ac5 cordance with rules similar to the rules of section 

6 147(f)(2) (other than subparagraph (B)(ii) thereof)) 

7 of which such agency is a part. 

8 ‘‘(2) QUALIFIED ALLOCATION PLAN.—For pur9 poses of this subsection— 

10 ‘‘(A) IN GENERAL.—The term ‘qualified 

11 allocation plan’ means any plan which meets 

12 the requirements of subparagraphs (B) through 

13 (E). 

14 ‘‘(B) SELECTION CRITERIA.—The require15 ments of this subparagraph are met if such 

16 plan sets forth selection criteria to be used to 

17 determine priorities of the energy credit agency 

18 which are appropriate to local conditions. An 

19 energy credit agency may establish selection cri20 teria which are more stringent than the require21 ments under subsection (d)(1)(B). 

22 ‘‘(C) PROJECT PREFERENCE.—The re23 quirements of this subparagraph are met if 

24 such plan gives preference in allocating energy 

25 credit dollar amounts among selected projects 


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1 to those projects which achieve the most energy 

2 savings. A plan shall not be treated as failing 

3 to meet the requirements of this subsection 

4 solely by reason of allocating credit dollar 

5 amounts ratably among projects with propor6 tionally more allocated to those projects which 

7 achieve higher energy savings. 

8 ‘‘(D) COMPLIANCE MONITORING.—The re9 quirements of this subparagraph are met if 

10 such plan establishes a program which— 

11 ‘‘(i) is certified by the Secretary as 

12 meeting the requirements of this subpara13 graph, and 

14 ‘‘(ii) provides for monitoring by the 

15 agency (or an agent or other private con16 tractor of such agency) for noncompliance 

17 with the provisions of this section and noti18 fying the Internal Revenue Service of any 

19 such noncompliance of which such agency 

20 becomes aware. 

21 ‘‘(E) CERTIFICATION METHODS.— 

22 ‘‘(i) IN GENERAL.—The requirements 

23 of this subparagraph are met if such plan 

24 has a certification procedure for inspection 

25 and testing by qualified individuals under 


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1 which only projects complying with energy2 savings plans and targets are certified. 

3 ‘‘(ii) QUALIFIED INDIVIDUALS.—Indi4 viduals qualified to determine compliance 

5 shall be only those individuals who are rec6 ognized by the energy credit agency for 

7 such purposes. 

8 ‘‘(iii) PRE-CERTIFICATION.—The re9 quirements of this subparagraph shall be 

10 treated as met if the plan includes a pre11 certification procedure for commercial 

12 building energy projects, unless application 

13 fees with respect to a project under such 

14 pre-certification procedure exceeds 1 per15 cent of the estimated cost of such project. 

16 ‘‘(g) TRANSFER OF CREDIT.— 

17 ‘‘(1) IN GENERAL.—A person described in para18 graph (4) may transfer the credit which would (but 

19 for the tax-exempt status of such person) be allow20 able under subsection (a) with respect to energy con21 servation commercial building property placed in 

22 service by such person. A credit may only be trans23 ferred once and may only be transferred to another 

24 person not described in such paragraph. 


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1 ‘‘(2) TREATMENT OF TRANSFEREE.—The per2 son to whom the credit is transferred under this 

3 subsection shall be treated for purposes of this title 

4 as the taxpayer with respect to whom the credit is 

5 allowable under subsection (a). 

6 ‘‘(3) TREATMENT OF TRANSFEROR.— 

7 ‘‘(A) TRANSFER PROCEEDS TREATED AS

8 ARISING FROM ESSENTIAL GOVERNMENT FUNC9 TION.—Any proceeds derived by a person de10 scribed in paragraph (4)(B) from the transfer 

11 of any credit under this subsection shall be 

12 treated as arising from the exercise of an essen13 tial government function. 

14 ‘‘(B) CREDIT NOT INCOME.—Any proceeds 

15 derived from the transfer of a credit under this 

16 subsection shall not treated as income for pur17 poses of this title. 

18 ‘‘(4) PERSONS DESCRIBED.—A person is de19 scribed in this paragraph if the person is— 

20 ‘‘(A) an organization exempt from tax 

21 under section 501(a), or 

22 ‘‘(B) any State or political subdivision 

23 thereof, the District of Columbia, any posses24 sion of the United States, or any agency or in25 strumentality of any of the foregoing. 


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1 ‘‘(h) DENIAL OF DOUBLE BENEFIT.—No credit shall 

2 be allowed under this section for any expense for which 

3 a deduction is allowed under any other provision of this 

4 chapter. 

5 ‘‘(i) BASIS REDUCTION.—For purposes of this sub6 title, if a credit is allowed under this section with respect 

7 to any energy conservation commercial building property, 

8 the basis of such property shall be reduced by the amount 

9 of the credit so allowed. 

10 ‘‘(j) REGULATIONS.—The Secretary may prescribe 

11 such regulations as may be necessary or appropriate to 

12 carry out this section.’’. 

13 (b) STATE GUIDANCE.—The Secretary of Energy, in 

14 consultation with the Secretary of Treasury, shall develop 

15 and provide guidance to States and energy credit agencies 

16 (as defined in section 45R(e) of the Internal Revenue Code 

17 of 1986) for establishing methods of measuring overall en18 ergy savings of commercial building energy projects (as 

19 defined in section 45R(e) of such Code), including meth20 ods for comparing energy savings ratings under industry 

21 energy standards for commercial buildings other than 

22 ASHRAE Standard 90.1–2007 with such ASHRAE 

23 standard. 

24 (c) CREDIT TREATED AS PART OF GENERAL BUSI25 NESS CREDIT.—Subsection (b) of section 38 of such Code 


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1 is amended by striking ‘‘plus’’ at the end of paragraph 

2 (33), by striking the period at the end of paragraph (34) 

3 and inserting ‘‘, plus’’, and by adding at the end the fol4 lowing new paragraph: 

5 ‘‘(35) commercial building energy credit deter6 mined under section 45R(a).’’. 

7 (d) CONFORMING AMENDMENT.—Subsection (a) of 

8 section 1016 of such Code is amended by striking ‘‘and’’ 

9 at the end of paragraph (36), by striking the period at 

10 the end of paragraph (37) and inserting ‘‘, and’’, and by 

11 adding at the end the following new paragraph: 

12 ‘‘(38) to the extent provided in section 45R(i).’’. 

13 (e) CLERICAL AMENDMENT.—The table of sections 

14 for subpart D of part IV of subchapter A of chapter 1 

15 is amended by adding at the end the following new item: 

‘‘Sec. 45R. Commercial building energy project credit.’’. 

16 (f) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to property placed in service after 

18 the date of the enactment of this Act. 

Æ 


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