Building Efficiently Act of 2019

To amend the Internal Revenue Code of 1986 to extend and expand the new energy efficient home credit, to extend the energy efficient commercial buildings deduction, to eliminate the basis reduction for low-income housing properties receiving certain energy benefits, and for other purposes. 1. Short title This Act may be cited as the Building Efficiently Act of 2019 2. Extension and expansion of new energy efficient home credit (a) Extension of credit Section 45L(g) December 31, 2017 December 31, 2020 (b) Credit for qualified energy efficient rental property Paragraph (2) of section 45L(a) of such Code is amended by striking and , and (C) in lieu of subparagraphs (A) and (B), in the case of qualified new energy efficient home that is a qualified energy efficient residential rental property, 3.3 percent of the cost of construction of such property, reduced by any expenditure not taken into account under this section by reason of subsection (f). . (c) Qualified energy efficient residential rental property defined Subsection (b) of section 45L of such Code is amended by adding at the end the following: (5) Qualified energy efficient residential rental property (A) In general The term qualified energy efficient residential real property (B) New or reconstructed building A building is described in this subparagraph if— (i) the certification requirements of subparagraph (E) with respect to the building are met, (ii) the original use of which commences with the taxpayer, and (iii) the building is placed in service after the date of the enactment of the Building Efficiently Act of 2019 (C) Improvements to existing building A building is described in this subparagraph if, only after improvements are made to the building— (i) the certification requirements of subparagraph (E) with respect to the building are met, (ii) the original use of the improved building commences with the taxpayer, (iii) the improved building is placed in service after the date of the enactment of the Building Efficiently Act of 2019 (iv) the taxpayer elects to the application of this paragraph with respect to the building. (D) Buildings acquired by purchase A building is described in this subparagraph if the building— (i) is acquired by purchase from an unrelated person, (ii) meets the certification requirements of subparagraph (E), and (iii) is placed in service after the date of the enactment of the Building Efficiently Act of 2019 (E) Certification requirements The requirements of this subparagraph are met if, with respect to a building, the building is certified in accordance with subsection (d) as being constructed, reconstructed, or retrofitted, as the case may be, under a plan designed to reduce energy and power consumption of the building by 40 percent or more in comparison to— (i) in the case of retrofits made to an existing building, the baseline annual energy and power consumption of the building, or (ii) in any other case, a reference building which meets the minimum requirements of the International Energy Conservation Code 2018 using methods of calculation under subsection (d). (F) Baseline annual energy and power consumption The baseline annual energy and power consumption of any building shall be determined by using— (i) a building energy performance benchmarking tool designated for purposes of this paragraph by the Administrator of the Environmental Protection Agency, which is based upon energy and power consumption data during the 1-year period ending on the date on which retrofits under the plan are placed in service, or (ii) such other methods of calculation as certified by the Secretary in accordance with subsection (d). (G) Related persons For purposes of subparagraph (D), a person is related to another person if— (i) the persons are members of an affiliated group (as defined in section 1504), or (ii) the persons have a relationship described in subsection (b) of section 267; except that, for purposes of this clause, the phrase 80 percent or more more than 50 percent . (d) Conforming amendment Section 45L(d) is amended by striking subsection (c) subsection (b)(5) or (c) (e) Effective Dates (1) Extension The amendment made by subsection (a) shall apply to property placed in service after December 31, 2017. (2) Qualified energy efficient rental property The amendments made by subsections (b), (c), and (d) shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date. 3. Extension of energy efficient commercial buildings deduction (a) In general Section 179D(h) December 31, 2017 December 31, 2020 (b) Effective date The amendment made by this section shall apply to property placed in service after December 31, 2017. 4. Elimination of basis reduction for low-income housing properties receiving certain energy benefits (a) New energy efficient home credit Subsection (e) of section 45L (1) by striking adjustment adjustment (1) In general For purposes ; and (2) by adding at the end the following new paragraph: (2) Exception for low-income housing properties Paragraph (1) shall not apply to any property with respect to which a credit is allowed under section 42. . (b) Energy efficient commercial buildings deduction Subsection (e) of section 179D (1) by striking reduction reduction (1) In general For purposes ; and (2) by adding at the end the following new paragraph: (2) Exception for low-income housing properties Paragraph (1) shall not apply to any property with respect to which a credit is allowed under section 42. . (c) Energy credit Paragraph (3) of section 50(c) (1) by striking and (2) by striking the period at the end of subparagraph (B) and inserting , and (3) by adding at the end the following new subparagraph: (C) paragraph (1) shall not apply to any property with respect to which a credit is allowed under section 42. . (d) Effective date The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

Summary: Building Efficiently Act of 2019 This bill amends the Internal Revenue Code to expand the new energy efficient home tax credit to allow, in lieu of the existing credit, a credit for 3.3% of the cost of constructing a new energy efficient home that is a qualified energy efficient residential rental property. An energy efficient residential rental property must be certified as being constructed, reconstructed, or retrofitted under a plan designed to reduce energy and power consumption of the building by at least 40% compared to (1) the baseline annual energy and power consumption of the building in the case of a retrofit made to an existing building, or (2) a reference building which meets the minimum requirements of the International Energy Conservation Code 2018 in any other case. The bill also (1) extends through 2020 the energy efficient commercial buildings deduction; and (2) eliminates the basis reduction requirements for certain low-income housing properties receiving the energy efficient home credit, the energy efficient commercial building deduction, or the credit for investments in energy property.