H.R. 6705 (112th): Building Efficiently Act of 2012

112th Congress, 2011–2013. Text as of Dec 21, 2012 (Introduced).

Status & Summary | PDF | Source: GPO

I

112th CONGRESS

2d Session

H. R. 6705

IN THE HOUSE OF REPRESENTATIVES

December 21, 2012

(for himself and Mr. Welch) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to reduce the depreciation recovery periods for energy efficient commercial buildings, and for other purposes.

1.

Short title

This Act may be cited as the Building Efficiently Act of 2012.

2.

Shorter depreciation recovery periods for energy efficient buildings

(a)

25-Year recovery period for energy efficient nonresidential real property

(1)

In general

Section 168(e)(3) of the Internal Revenue Code of 1986 is amended by inserting after subparagraph (F) the following new subparagraph:

(G)

25-year property

The term 25-year property means any qualified energy efficient nonresidential real property.

.

(2)

Qualified energy efficient nonresidential real property defined

Subsection (i) of section 168 of such Code is amended by adding at the end the following:

(20)

Qualified energy efficient nonresidential real property

(A)

In general

The term qualified energy efficient nonresidential real property means a building which is nonresidential real property which is described in subparagraph (B), (C), or (D).

(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 the building commences with the taxpayer, and

(iii)

the building is placed in service after the date of the enactment of this paragraph.

(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 this paragraph, and

(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 this paragraph.

(E)

Certification requirements

The requirements of this subparagraph are met if, with respect to a building, the building is certified in accordance with section 179D(d)(6) as being constructed, reconstructed, or modified, as the case may be, under a plan designed to reduce the total annual energy and power costs of the building by 40 percent or more in comparison to a reference building which meets the minimum requirements of Standard 90.1–2004 using methods of calculation under section 179D(d)(2).

(F)

Standard 90.1–2004

The term Standard 90.1–2004 means Standard 90.1–2004 of the American Society of Heating, Refrigerating, and Air Conditioning Engineers and the Illuminating Engineering Society of North America (as in effect on July 30, 2012).

(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 shall be substituted for the phrase more than 50 percent each place it appears in such subsection and rules similar to the rules of subsections (c) and (e) (other than paragraphs (4) and (5) thereof) shall apply.

(H)

Denial of double benefit

If this section applies to a building by reason of subsection (e)(3)(G), the deduction under section 179D shall not be allowed.

.

(b)

20-Year recovery period for energy efficient residential rental property

(1)

In general

Subparagraph (F) of section 168(e)(3) of such Code (relating to 20-year property) is amended to read as follows:

(F)

20-year property

The term 20-year property means—

(i)

initial clearing and grading land improvements with respect to any electric utility transmission and distribution plant, and

(ii)

any qualified energy efficient residential rental property.

.

(2)

Qualified energy efficient residential rental property defined

Subsection (i) of section 168 of such Code, as amended by subsection (a), is amended by adding at the end the following:

(21)

Qualified energy efficient residential rental property

(A)

In general

The term qualified energy efficient nonresidential real property means a building which is residential rental property which is described in subparagraph (B), (C), or (D).

(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 this paragraph.

(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 this paragraph, and

(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 this paragraph.

(E)

Certification requirements

The requirements of this subparagraph are met if, with respect to a building, the building is certified in accordance with section 179D(d)(6) as being constructed, reconstructed, or modified, as the case may be, under a plan designed to reduce the total annual energy and power costs of the building by 40 percent or more in comparison to a reference building which meets the minimum requirements of the International Energy Conservation Code 2004 using methods of calculation under section 179D(d)(2).

(F)

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 shall be substituted for the phrase more than 50 percent each place it appears in such subsection and rules similar to the rules of subsections (c) and (e) (other than paragraphs (4) and (5) thereof) shall apply.

(G)

Denial of double benefit

If this section applies to a building by reason of subsection (e)(3)(F)(ii), the deduction under section 179D shall not be allowed.

.

(c)

Conforming amendments

(1)

The table contained in section 168(c) of such Code is amended by inserting after the item relating to 20-year property the following new item:

25-year property25 years

.

(2)

The table contained in section 467(e)(3)(A) of such Code is amended—

(A)

by inserting which is not 25-year property after nonresidential real property, and

(B)

by inserting after the item relating to residential rental property and nonresidential real property the following new item:

25-year property19 years.

.

(3)

Clauses (iv), (v), and (ix) of section 168(e)(3)(E) of such Code are each amended by inserting (not described in subparagraph (G)) after property.

(d)

Requirement To use straight line method

Paragraph (3) of section 168(b) of such Code (relating to property to which straight line method applies) is amended by redesignating subparagraphs (F), (G), (H), and (I) as subparagraphs (G), (H), (I), and (J), respectively, and by inserting after subparagraph (E) the following new subparagraph:

(F)

Property described in subsection (e)(3)(F)(ii) or subsection (e)(3)(G).

.

(e)

Alternative system

The table contained in section 168(g)(3)(B) of such Code is amended by striking the item relating to subparagraph (F) and inserting the following new items:

(F)(i)25
 (F)(ii)20
 (G)25

.

(f)

Effective Date

The amendments made by this section shall apply to property placed in service after December 31, 2012.