Energy Efficiency for Affordable Housing Act
Bill: S.4422 | Sponsor: Sen. Klobuchar, Amy (D-MN)
Policy area: Taxation

Summary:
Energy Efficiency for Affordable Housing Act
This bill increases the amount of the low-income housing tax credit for rehabilitation expenditures for buildings that achieve enhanced energy performance. The bill also exempts such credit from the basis adjustment applicable to the new energy efficient home tax credit and extends that credit through 2031.

To amend the Internal Revenue Code of 1986 to increase the low-income 
housing credit for rehabilitation expenditures for buildings achieving 
          enhanced energy performance, and for other purposes.

    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 ``Energy Efficiency for Affordable 
Housing Act''.

SEC. 2. INCREASE OF CREDIT.

    (a) In General.--Paragraph (2) of section 42(e) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(C) Increase in credit for buildings achieving 
                enhanced energy performance.--
                            ``(i) In general.--In the case of any 
                        existing building to which subsection (b)(2) 
                        does not apply which achieves enhanced energy 
                        performance, the rehabilitation expenditures 
                        taken into account under subparagraph (A) shall 
                        be 130 percent of such expenditures determined 
                        without regard to this subparagraph.
                            ``(ii) Enhanced energy performance.--For 
                        purposes of clause (i), a building achieves 
                        enhanced energy performance if it meets either 
                        of the following:
                                    ``(I) The minimum requirements of 
                                an advanced building construction 
                                standard which shall be determined by 
                                the Secretary of Energy using 
                                prescriptive or performance methods of 
                                calculation and promulgated by the 
                                Secretary of Energy within 180 days of 
                                the date of the enactment of this 
                                subparagraph.
                                    ``(II) In the case of a taxpayer 
                                which elects (at such time and in such 
                                manner as the Secretary may provide) 
                                the application of this subclause with 
                                respect to the building, a qualified 
                                retrofit plan.
                            ``(iii) Definitions.--For purposes of this 
                        subparagraph--
                                    ``(I) Qualified retrofit plan.--The 
                                term `qualified retrofit plan' means a 
                                written plan prepared and stamped by a 
                                qualified professional which specifies 
                                modifications to a building which, in 
                                the aggregate, are expected to reduce 
                                such building's site energy usage 
                                intensity by 50 percent or more in 
                                comparison to the baseline energy usage 
                                intensity of such building. Such plan 
                                shall require a qualified professional 
                                to certify--
                                            ``(aa) the baseline energy 
                                        usage intensity of the 
                                        building,
                                            ``(bb) that the 
                                        modifications are expected to 
                                        reduce such building's site 
                                        energy usage intensity by 50 
                                        percent or more in comparison 
                                        to the baseline energy usage 
                                        intensity of such building, and
                                            ``(cc) as of any date 
                                        following installation of 
                                        building modifications, that 
                                        such modifications have been 
                                        installed.
                                    ``(II) Baseline energy usage 
                                intensity.--The term `baseline energy 
                                usage intensity' means the site energy 
                                usage intensity as of any date during 
                                the 24-month period immediately 
                                preceding the building modifications 
                                described in the qualified retrofit 
                                plan.
                                    ``(III) Site energy usage 
                                intensity.--The site energy usage 
                                intensity shall be determined for the 
                                entire building in accordance with such 
                                regulations or other guidance as the 
                                Secretary may provide and measured in 
                                British thermal units per square foot 
                                per year.
                                    ``(IV) Qualified professional.--The 
                                term `qualified professional' means an 
                                individual who is a licensed architect 
                                or a licensed engineer or meets such 
                                other requirements as the Secretary of 
                                Energy may provide.''.
    (b) Increase for Buildings in High-Cost Areas.--Paragraph (2) of 
section 42(e) of the Internal Revenue Code of 1986, as amended by 
subsection (a), is further amended by adding at the end the following 
new subparagraph:
                    ``(D) Special rule for buildings in high-cost areas 
                which achieve enhanced energy performance.--In the case 
                of an existing building to which both subparagraph (C) 
                and subsection (d)(5)(B) apply (but for this 
                subparagraph)--
                            ``(i) subsection (d)(5)(B)(i)(II) shall not 
                        apply, and
                            ``(ii) the rehabilitation expenditures 
                        taken into account under subparagraph (A) shall 
                        be 160 percent of such expenditures determined 
                        without regard to this subparagraph.''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to buildings with 
        respect to which housing credit dollar amounts are allocated 
        after December 31, 2021.
            (2) Bond-financed projects.--In the case of any building 
        some portion of which, or of the land on which the building is 
        located, is financed by an obligation which is described in 
        section 42(h)(4)(A) of the Internal Revenue Code of 1986, the 
        amendments made by this section shall apply to any such 
        building financed by such an obligation which is part of an 
        issue the issue date of which is after December 31, 2021.

SEC. 3. COORDINATION WITH BASIS ADJUSTMENT UNDER NEW ENERGY EFFICIENT 
              HOME CREDIT.

    (a) In General.--Subsection (e) of section 45L of the Internal 
Revenue Code of 1986 is amended by striking ``any property'' and 
inserting ``any property (other than a qualified low-income building, 
as defined in section 42(c)(2))''.
    (b) Extension of Credit.--Subsection (g) of section 45L of the 
Internal Revenue Code of 1986 is amended by striking ``December 31, 
2021'' and inserting ``December 31, 2031''.
    (c) Effective Date.--The amendments made by this section shall 
apply to qualified new energy efficient homes acquired after December 
31, 2021.
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