Home Energy Savings Act
Bill: H.R.3395 | Sponsor: Rep. Gomez, Jimmy (D-CA)
Policy area: Taxation

Summary:
Home Energy Savings Act
This bill reinstates and extends through 2028 the tax credit for nonbusiness energy property. It increases the rate of such credit from 10% to 15% and raises the lifetime cap on such credit from $500 to $1,200.
The bill increases credit amounts for the investment in energy efficient building property (e.g., electric heat pump water heater, electric heat pump, central air conditioner, or natural gas, propane, or oil water heater) and provides for increased caps on investment in doors and windows in a residence.

To amend the Internal Revenue Code of 1986 to extend and update the 
                credit for nonbusiness energy property.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Home Energy Savings Act''.

SEC. 2. UPDATING CREDIT FOR NONBUSINESS ENERGY PROPERTY.

    (a) In General.--Section 25C of the Internal Revenue Code of 1986 
is amended--
            (1) in subsection (a)(1), by striking ``10 percent'' and 
        inserting ``15 percent'',
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) by striking ``$500'' and inserting 
                        ``$1,200'', and
                            (ii) by striking ``December 31, 2005'' and 
                        inserting ``December 31, 2021'', and
                    (B) by striking paragraphs (2) and (3) and 
                inserting the following:
            ``(2) Limitation on window attachment products.--In the 
        case of amounts paid or incurred for products described in 
        subsection (c)(2)(B) by any taxpayer for any taxable year, the 
        credit allowed under this section with respect to such amounts 
        for such year shall not exceed the excess (if any) of $600 over 
        the aggregate credits allowed under this section with respect 
        to such amounts for all prior taxable years ending after 
        December 31, 2021.
            ``(3) Limitation on insulation material or system.--In the 
        case of amounts paid or incurred for components described in 
        subparagraph (A) or (D) of subsection (c)(3) by any taxpayer 
        for any taxable year, the credit allowed under this section 
        with respect to such amounts for such year shall not exceed the 
        excess (if any) of $600 over the aggregate credits allowed 
        under this section with respect to such amounts for all prior 
        taxable years ending after December 31, 2021.
            ``(4) Limitation on windows.--
                    ``(A) In general.--
                            ``(i) Energy star most efficient.--In the 
                        case of amounts paid or incurred by any 
                        taxpayer for any taxable year for components 
                        described in subsection (c)(3)(B) which meet 
                        the most efficient certification under 
                        applicable Energy Star program requirements, 
                        the credit allowed under this section with 
                        respect to such amounts for such year shall not 
                        exceed the excess (if any) of $600 over the 
                        aggregate credits allowed under this section 
                        with respect to such amounts for all prior 
                        taxable years ending after December 31, 2021.
                            ``(ii) Energy star.--In the case of amounts 
                        paid or incurred by any taxpayer for any 
                        taxable year for components described in 
                        subsection (c)(3)(B) which do not meet the most 
                        efficient certification under applicable Energy 
                        Star program requirements, the credit allowed 
                        under this section with respect to such amounts 
                        for such year shall not exceed the excess (if 
                        any) of $200 over the aggregate credits allowed 
                        under this section with respect to such amounts 
                        for all prior taxable years ending after 
                        December 31, 2021.
                    ``(B) Election.--
                            ``(i) In general.--For purposes of any 
                        amounts paid or incurred by any taxpayer for 
                        components described in subsection (c)(3)(B), 
                        the credit allowed under this section shall 
                        only be allowed for components described in 
                        clause (i) of subparagraph (A) or clause (ii) 
                        of such subparagraph, but not both, as elected 
                        by the taxpayer during the first taxable year 
                        in which such credit is being claimed by the 
                        taxpayer.
                            ``(ii) Irrevocability.--The Secretary 
                        shall, through such rules, regulations, and 
                        procedures as are determined appropriate, 
                        establish procedures for making an election 
                        under this subparagraph, which shall require 
                        that--
                                    ``(I) any election made by the 
                                taxpayer shall be irrevocable, and
                                    ``(II) such election shall remain 
                                in effect for all subsequent taxable 
                                years.
            ``(5) Limitation on doors.--In the case of amounts paid or 
        incurred for components described in subsection (c)(3)(C) by 
        any taxpayer for any taxable year, the credit allowed under 
        this section with respect to such amounts for such year shall 
        not exceed--
                    ``(A) the excess (if any) of $500 over the 
                aggregate credits allowed under this section with 
                respect to such amounts for all prior taxable years 
                ending after December 31, 2021, or
                    ``(B) $250 for each exterior door.
            ``(6) Limitation on residential energy property 
        expenditures.--The amount of the credit allowed under this 
        section by reason of subsection (a)(2) shall not exceed--
                    ``(A) in the case of any energy-efficient building 
                property--
                            ``(i) for any item of property described in 
                        clause (ii) of subparagraph (A) of subsection 
                        (d)(3), $800,
                            ``(ii) for any item of property described 
                        in clause (i) or (iii) of such subparagraph, 
                        $600
                            ``(iii) for any item of property described 
                        in clause (iv) of such subparagraph, $400, and
                    ``(B) in the case of any qualified natural gas, 
                propane, or oil furnace or hot water boiler (as defined 
                in subsection (d)(4)), an amount equal to--
                            ``(i) $600 for a hot water boiler, and
                            ``(ii) in the case of a furnace, an amount 
                        equal to the sum of--
                                    ``(I) $300, plus
                                    ``(II) if the taxpayer is 
                                converting from a non-condensing 
                                furnace to a condensing furnace, 
                                $300.'',
            (3) in subsection (c)--
                    (A) in paragraph (2), by striking subparagraphs (A) 
                through (C) and inserting the following:
                    ``(A) in the case of an exterior window, a 
                skylight, or an exterior door, applicable Energy Star 
                program requirements,
                    ``(B) in the case of any window attachment product, 
                the applicable certification requirements for such 
                product under the Attachments Energy Rating Council 
                Certification Program, and
                    ``(C) in the case of any other component, the 
                prescriptive criteria for such component established by 
                the International Energy Conservation Code, as such 
                Code (including supplements) is in effect on January 1 
                of the calendar year in which such component is 
                installed.'',
                    (B) in paragraph (3), by striking subparagraph (D) 
                and inserting the following:
                    ``(D) any air barrier material, system, or assembly 
                which is specifically and primarily designed to 
                minimize the passage of air through the building 
                thermal envelope and its assemblies when installed in 
                or on a dwelling unit.'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(5) Labor costs.--The term `qualified energy efficiency 
        improvements' includes expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of any energy efficient building envelope 
        component.'',
            (4) in subsection (d)--
                    (A) in paragraph (2)--
                            (i) in subparagraph (A)--
                                    (I) in clause (i), by adding ``or'' 
                                at the end,
                                    (II) in clause (ii), by striking 
                                ``, or'' and inserting a period, and
                                    (III) by striking clause (iii), and
                            (ii) by striking subparagraphs (B) and (C) 
                        and inserting the following:
                    ``(B) Efficiency standards.--Property described in 
                subparagraph (A) shall meet or exceed the requirements 
                of the highest efficiency tier (not including any 
                advanced tier) established by the Consortium for Energy 
                Efficiency which are in effect on January 1 of the 
                calendar year in which the property was acquired.'',
                    (B) by striking paragraph (3) and inserting the 
                following:
            ``(3) Energy-efficient building property.--The term 
        `energy-efficient building property' means property which--
                    ``(A) is--
                            ``(i) an electric heat pump water heater,
                            ``(ii) an electric heat pump,
                            ``(iii) a central air conditioner, or
                            ``(iv) a natural gas, propane, or oil water 
                        heater, and
                    ``(B) meets or exceeds the requirements of the 
                highest efficiency tier (not including any advanced 
                tier) established by the Consortium for Energy 
                Efficiency which are in effect on January 1 of the 
                calendar year in which the property was acquired.'',
                    (C) in paragraph (4), by striking ``achieves an 
                annual fuel utilization efficiency rate of not less 
                than 95'' and inserting ``meets or exceeds the 
                requirements of the highest efficiency tier (not 
                including any advanced tier) established by the 
                Consortium for Energy Efficiency which are in effect on 
                January 1 of the calendar year in which the property 
                was acquired'', and
                    (D) by striking paragraph (5),
            (5) in subsection (e), by adding the following new 
        paragraphs at the end:
            ``(4) Installation standards.--The terms `energy efficient 
        building envelope component' and `qualified energy property' 
        shall not include any components or property which are not 
        installed according to any applicable Air Conditioning 
        Contractors of America Quality Installation standards which are 
        in effect at the time that such components or property are 
        placed in service.
            ``(5) Replacement of terminated standards.--In the case of 
        any standard, requirement, or criteria applicable to any energy 
        efficient building envelope component or qualified energy 
        property which is terminated after the date of enactment of the 
        Home Energy Savings Act, the Secretary, in consultation with 
        the Secretary of Energy, shall identify a similar standard, 
        requirement, or criteria for purposes of determining the 
        eligibility of any such component or property for purposes of 
        credit allowed under this section.'', and
            (6) in subsection (g)(2), by striking ``December 31, 2021'' 
        and inserting ``December 31, 2028''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2021.
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