Low-Income Housing Renewable Energy Credit Act
Bill: H.R.5183 | Sponsor: Rep. Davis, Danny K. (D-IL)
Policy area: Taxation

Summary:
Low-Income Housing Renewable Energy Credit Act
This bill increases the rate of the energy tax credit for solar facilities placed in low-income communities.

To amend the Internal Revenue Code of 1986 to provide for an increase 
in energy credit for solar facilities placed in service with low-income 
                  communities, 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 ``Low-Income Housing Renewable Energy 
Credit Act''.

SEC. 2. INCREASE IN ENERGY CREDIT FOR SOLAR FACILITIES PLACED IN 
              SERVICE IN CONNECTION WITH LOW-INCOME COMMUNITIES.

    (a) In General.--Section 48 is amended by adding at the end the 
following new subsection:
    ``(e) Special Rules for Certain Solar Facilities Placed in Service 
in Connection With Low-Income Communities.--
            ``(1) In general.--In the case of any qualified solar 
        facility with respect to which the Secretary makes an 
        allocation of environmental justice solar capacity limitation 
        under paragraph (4)--
                    ``(A) equipment described in paragraph (3)(B) shall 
                be treated for purposes of this section as energy 
                property described in subsection (a)(2)(A)(i),
                    ``(B) the energy percentage otherwise determined 
                under subsection (a)(2) with respect to any eligible 
                property which is part of such facility shall be 
                increased by--
                            ``(i) in the case of a facility described 
                        in subclause (I) of paragraph (2)(A)(iii) and 
                        not described in subclause (II) of such 
                        paragraph, 10 percentage points, and
                            ``(ii) in the case of a facility described 
                        in subclause (II) of paragraph (2)(A)(iii) and 
                        not described in subclause (I) of such 
                        paragraph, 20 percentage points, and
                    ``(C) the increase in the credit determined under 
                subsection (a) by reason of this subsection for any 
                taxable year with respect to all property which is part 
                of such facility shall not exceed the amount which 
                bears the same ratio to the amount of such increase 
                (determined without regard to this subparagraph) as--
                            ``(i) the environmental justice solar 
                        capacity limitation allocated to such facility, 
                        bears to
                            ``(ii) the total megawatt nameplate 
                        capacity of such facility.
            ``(2) Qualified solar facility.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `qualified solar 
                facility' means any facility--
                            ``(i) which generates electricity solely 
                        from property described in subsection 
                        (a)(3)(A)(i),
                            ``(ii) which has a nameplate capacity of 5 
                        megawatts or less, and
                            ``(iii) which--
                                    ``(I) is located in a low-income 
                                community (as defined in section 
                                45D(e)), or
                                    ``(II) is part of a qualified low-
                                income residential building project or 
                                a qualified low-income economic benefit 
                                project.
                    ``(B) Qualified low-income residential building 
                project.--A facility shall be treated as part of a 
                qualified low-income residential building project if--
                            ``(i) such facility is installed on a 
                        residential rental building which participates 
                        in a covered housing program (as defined in 
                        section 41411(a) of the Violence Against Women 
                        Act of 1994 (34 U.S.C. 12491(a)(3))), a Housing 
                        Development Fund Corporation cooperative under 
                        Article XI of the New York State Private 
                        Housing Finance Law, a housing assistance 
                        program administered by the U.S. Department of 
                        Agriculture under title V of the Housing Act of 
                        1949, or such other affordable housing programs 
                        as the Secretary may provide, and
                            ``(ii) the financial benefits of the 
                        electricity produced by such facility are 
                        allocated equitably among the occupants of the 
                        dwelling units of such building.
                    ``(C) Qualified low-income economic benefit 
                project.--A facility shall be treated as part of a 
                qualified low-income economic benefit project if at 
                least 50 percent of the financial benefits of the 
                electricity produced by such facility are provided to 
                households with income of--
                            ``(i) less than 200 percent of the poverty 
                        line applicable to a family of the size 
                        involved, or
                            ``(ii) less than 70 percent of area median 
                        gross income (as determined under section 
                        142(d)(2)(B)).
                    ``(D) Financial benefit.--For purposes of 
                subparagraphs (B) and (C), electricity acquired at a 
                below-market rate shall not fail to be taken into 
                account as a financial benefit.
            ``(3) Eligible property.--
                    ``(A) In general.--For purposes of this section, 
                the term `eligible property' means--
                            ``(i) energy property which is described in 
                        subsection (a)(3)(A)(i), including any property 
                        that stores electricity which is installed in 
                        connection with such energy property, and
                            ``(ii) the amount of any expenditures which 
                        are paid or incurred by the taxpayer for 
                        qualified interconnection property installed in 
                        connection with the installation of property 
                        described in subparagraph (A) to provide for 
                        the transmission or distribution of the 
                        electricity produced or stored by such 
                        property, and which are properly chargeable to 
                        the capital account of the taxpayer.
                    ``(B) Definitions.--For purposes of subparagraph 
                (A)--
                            ``(i) Qualified interconnection property.--
                        The term `qualified interconnection property' 
                        means, with respect to a qualified facility 
                        which is not a microgrid, any tangible 
                        property--
                                    ``(I) which is part of an addition, 
                                modification, or upgrade to a 
                                transmission or distribution system 
                                which is required at or beyond the 
                                point at which the qualified facility 
                                interconnects to such transmission or 
                                distribution system in order to 
                                accommodate such interconnection,
                                    ``(II) either--
                                            ``(aa) which is 
                                        constructed, reconstructed, or 
                                        erected by the taxpayer, or
                                            ``(bb) for which the cost 
                                        with respect to the 
                                        construction, reconstruction, 
                                        or erection of such property is 
                                        paid or incurred by such 
                                        taxpayer, and
                                    ``(III) the original use of which, 
                                pursuant to an interconnection 
                                agreement, commences with the utility.
                            ``(ii) Interconnection agreement.--The term 
                        `interconnection agreement' means an agreement 
                        entered into by a utility and the taxpayer for 
                        the purposes of interconnecting the qualified 
                        facility owned by such taxpayer to the 
                        transmission or distribution system of such 
                        utility.
                            ``(iii) Utility.--The term `utility' means 
                        the owner or operator of an electrical 
                        transmission or distribution system which is 
                        subject to the regulatory authority of--
                                    ``(I) the Federal Energy Regulatory 
                                Commission, or
                                    ``(II) a State public utility 
                                commission or other appropriate State 
                                agency.
                    ``(C) Special rule for interconnection property.--
                In the case of expenses paid or incurred for 
                interconnection property, amounts otherwise chargeable 
                to capital account with respect to such expenses shall 
                be reduced under rules similar to the rules of section 
                50(c).
            ``(4) Allocations.--
                    ``(A) In general.--Not later than 180 days after 
                the date of enactment of this subsection, the Secretary 
                shall establish a program to allocate amounts of 
                environmental justice solar capacity limitation to 
                qualified solar facilities.
                    ``(B) Limitation.--The amount of environmental 
                justice solar capacity limitation allocated by the 
                Secretary under subparagraph (A) during any calendar 
                year shall not exceed the annual capacity limitation 
                with respect to such year.
                    ``(C) Annual capacity limitation.--For purposes of 
                this paragraph, the term `annual capacity limitation' 
                means 1.8 gigawatts for each of calendar years 2022 
                through 2031, and zero thereafter.
                    ``(D) Carryover of unused limitation.--If the 
                annual capacity limitation for any calendar year 
                exceeds the aggregate amount allocated for such year 
                under this paragraph, such limitation for the 
                succeeding calendar year shall be increased by the 
                amount of such excess. No amount may be carried under 
                the preceding sentence to any calendar year after 2033.
                    ``(E) Placed in service deadline.--
                            ``(i) In general.--Paragraph (1) shall not 
                        apply with respect to any property which is 
                        placed in service after the date that is 4 
                        years after the date of the allocation with 
                        respect to the facility of which such property 
                        is a part.
                            ``(ii) Application of carryover.--Any 
                        amount of environmental justice solar capacity 
                        limitation which expires under clause (i) 
                        during any calendar year shall be taken into 
                        account as an excess described in subparagraph 
                        (C) (or as an increase in such excess) for such 
                        calendar, subject to the limitation imposed by 
                        the last sentence of such subparagraph.
                    ``(F) Selection criteria.--In determining to which 
                qualified solar facilities to allocate environmental 
                justice solar capacity limitation under this paragraph, 
                the Secretary shall take into consideration which 
                facilities will result in--
                            ``(i) the greatest health and economic 
                        benefits for individuals described in section 
                        45D(e)(2),
                            ``(ii) the greatest employment and wages 
                        for such individuals, and
                            ``(iii) the greatest engagement with, 
                        outreach to, or ownership by, such individuals, 
                        including through partnerships with local 
                        governments and community-based organizations.
                    ``(G) Disclosure of allocations.--The Secretary 
                shall, upon making an allocation of environmental 
                justice solar capacity limitation under this paragraph, 
                publicly disclose the identity of the applicant and the 
                amount of the environmental justice solar capacity 
                limitation allocated to such applicant.
            ``(5) Recapture.--The Secretary shall, by regulations or 
        other guidance, provide for recapturing the benefit of any 
        increase in the credit allowed under subsection (a) by reason 
        of this subsection with respect to any property which ceases to 
        be property eligible for such increase (but which does not 
        cease to be investment credit property within the meaning of 
        section 50(a)). The period and percentage of such recapture 
        shall be determined under rules similar to the rules of section 
        50(a). Such recapture shall not apply with respect to any 
        property if, within 12 months after the date the taxpayer 
        becomes aware (or reasonably should have become aware) of the 
        such property ceasing to be property eligible for such 
        increase, the eligibility of such property for such increase is 
        restored. The preceding sentence shall not apply more than once 
        with respect to any facility.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 2021, under rules similar to the 
rules of section 48(m) of the Internal Revenue Code of 1986 (as in 
effect on the day before the date of the enactment of the Revenue 
Reconciliation Act of 1990).
                                 <all>