II 

111TH CONGRESS 

2D SESSION S. 3212 

To amend the Internal Revenue Code of 1986 and section 1603 of the 

American Recovery and Reinvestment Tax Act of 2009 to provide that 

qualified energy efficiency property is eligible for the energy credit and 

the Department of Treasury grant. 

IN THE SENATE OF THE UNITED STATES 

APRIL 15, 2010 

Mr. MENENDEZ introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 and section 

1603 of the American Recovery and Reinvestment Tax 

Act of 2009 to provide that qualified energy efficiency 

property is eligible for the energy credit and the Department of Treasury grant. 

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

3 SECTION 1. QUALIFIED ENERGY EFFICIENCY PROPERTY 

4 ELIGIBLE FOR ENERGY CREDIT AND GRANTS. 

5 (a) IN GENERAL.—Subparagraph (A) of section 

6 48(a)(3) of the Internal Revenue Code of 1986 is amended 

7 by striking ‘‘or’’ at the end of clause (vi), by adding ‘‘or’’ 


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1 at the end of clause (vii), and by inserting after clause 

2 (vii) the following new clause: 

3 ‘‘(viii) qualified energy efficiency prop4 erty,’’. 

5 (b) ENERGY PERCENTAGE.—Clause (i) of section 

6 48(a)(2)(A) of the Internal Revenue Code of 1986 is 

7 amended by striking ‘‘and’’ at the end of subclause (III) 

8 and by inserting after subclause (IV) the following new 

9 subclause: 

10 ‘‘(V) qualified energy efficiency 

11 property described in paragraph 

12 (3)(A)(viii), and’’. 

13 (c) QUALIFIED ENERGY EFFICIENCY PROPERTY.— 

14 Section 48(c) of the Internal Revenue Code of 1986 is 

15 amended by adding at the end the following new para16 graph: 

17 ‘‘(5) QUALIFIED ENERGY EFFICIENCY PROP18 ERTY.— 

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

20 energy efficiency property’ means any prop21 erty— 

22 ‘‘(i) which is residential rental prop23 erty, nonresidential real property, or mixed 

24 use real property, 

25 ‘‘(ii) which is a qualified building, 


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1 ‘‘(iii) which achieves a minimum en2 ergy savings of 50 percent or more in com3 parison to a reference building which 

4 meets the minimum requirements of 

5 Standard 90.1–2001 (as defined by section 

6 179D(c)(2)), determined under rules simi7 lar to the rules of section 179D(d)(2), 

8 ‘‘(iv) in the case of property which is 

9 to be used for residential rental purposes, 

10 with respect to which the taxpayer makes 

11 a certification which meets the require12 ments of subparagraph (D), and 

13 ‘‘(v) for which the taxpayer has re14 ceived a reservation from the Secretary. 

15 ‘‘(B) QUALIFIED BUILDING.—The term 

16 ‘qualified building’ means any building— 

17 ‘‘(i) which— 

18 ‘‘(I) is more than 150,000 square 

19 feet and has a floor area ratio (net of 

20 streets and public spaces) of not less 

21 than 3.0, or 

22 ‘‘(II) in States with more than 

23 35 percent of the population living in 

24 Census defined rural areas, is more 

25 than 50,000 square feet, 


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1 ‘‘(ii) which— 

2 ‘‘(I) is located not more than 

3 one-half mile from a location in which 

4 there is direct access to a Fixed 

5 Guideway Transit System, or 

6 ‘‘(II) in States with more than 

7 35 percent of the population living in 

8 Census defined rural areas, is part of 

9 a rural town center redevelopment 

10 project on land previously occupied by 

11 residential, commercial, or industrial 

12 uses and within a Census defined 

13 place containing at least 5,000 people 

14 and 1,000 jobs, and 

15 ‘‘(iii) for which the site work and con16 struction is commenced not later than 36 

17 months after the date of the enactment of 

18 this paragraph. 

19 ‘‘(C) SPECIAL RULE FOR RESIDENTIAL

20 RENTAL PROPERTY.—In the case of a qualified 

21 building in which the majority of the building 

22 is devoted to residential rental use— 

23 ‘‘(i) subparagraph (A)(iii) shall be ap24 plied by substituting ‘25 percent’ for ‘50 

25 percent’, and 


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1 ‘‘(ii) any mechanical systems which 

2 meet the requirements of Standard 90.1– 

3 2001 may be used in lieu of appendix G to 

4 such Standard in modeling energy use of a 

5 reference building. 

6 ‘‘(D) AFFORDABLE HOUSING REQUIRE7 MENTS.— 

8 ‘‘(i) IN GENERAL.—A certification 

9 meets the requirements of this subpara10 graph if the taxpayer certifies that at least 

11 5 percent of residential rental units will be 

12 affordable to households with incomes not 

13 exceeding 60 percent of the area median 

14 income at the time of initial occupancy. 

15 ‘‘(ii) SAFE HARBOR.—A taxpayer 

16 shall be treated as meeting the require17 ment of clause (i) if the taxpayer files with 

18 the municipal government where the quali19 fied building is located a land use restric20 tion agreement or similar agreement de21 signed to ensure the units remain afford22 able to an occupied by households de23 scribed in clause (i) for the lesser of 99 

24 years or the longest period permissible 


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1 under the law of the State in which such 

2 units are located. 

3 ‘‘(E) RESERVATIONS.— 

4 ‘‘(i) IN GENERAL.—For purposes of 

5 subparagraph (A)(iv), the Secretary shall 

6 issue a reservation upon receipt of the fol7 lowing: 

8 ‘‘(I) Evidence that the project is 

9 designed to be a qualified energy effi10 ciency property as described in clause 

11 (viii) of section 48(a)(3)(A) of the In12 ternal Revenue Code of 1986. 

13 ‘‘(II) Evidence that such prop14 erty will be placed in service within a 

15 reasonable time by submission of a 

16 site plan approval from the local mu17 nicipality, a letter of support from the 

18 municipality, a building permit, and 

19 an approved tax abatement agreement 

20 or other municipal financial support. 

21 ‘‘(ii) MAINTENANCE OF RESERVA22 TION.—To maintain such a reservation, 

23 the applicant must commence construction 

24 within 12 months of the date such reserva25 tion was issued. 


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1 ‘‘(F) REGULATIONS.—The Secretary shall 

2 prescribe such regulations as necessary to carry 

3 out the purposes of this section not later than 

4 2 months of the date of the enactment of this 

5 paragraph.’’. 

6 (d) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to periods after the date of the 

8 enactment of this Act, under rules similar to the rules of 

9 section 48(m) of the Internal Revenue Code of 1986 (as 

10 in effect on the day before the date of the enactment of 

11 the Revenue Reconciliation Act of 1990). 

12 (e) GRANTS IN LIEU OF TAX CREDITS.— 

13 (1) IN GENERAL.—Subsection (d) of section 

14 1603 of the American Recovery and Reinvestment 

15 Tax Act of 2009 is amended by inserting after para16 graph (8) the following new subparagraph: 

17 ‘‘(9) QUALIFIED ENERGY EFFICIENCY PROP18 ERTY.—Any qualified energy efficiency property as 

19 described in clause (viii) of section 48(a)(3)(A) of 

20 such Code.’’. 

21 (2) GRANT AMOUNT.—Subparagraph (A) of 

22 section 1603(b)(2) of the American Recovery and 

23 Reinvestment Tax Act of 2009 is amended to read 

24 as follows: 


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1 ‘‘(A) 30 percent in the case of any prop2 erty described in paragraph (1), (2), (3), (4), or 

3 (9) of subsection (d), and’’. 

Æ 


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