[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6705 Introduced in House (IH)]
112th CONGRESS
2d Session
H. R. 6705
To amend the Internal Revenue Code of 1986 to reduce the depreciation
recovery periods for energy efficient commercial buildings, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 21, 2012
Mr. Langevin (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.
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 ``Building Efficiently Act of 2012''.
SEC. 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 property................................. 25 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 property.................................19 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.
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