Sec. 302. Sustainable building and residence credit
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Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sustainability percentage of— the taxpayer’s purchase price of a qualifying building or residence, and the taxpayer’s remodeling price of a building or structure described in subsection (c)(3)(B). For purposes of this section:
The sustainability percentage with respect to the purchase price of any qualifying building or residence shall be a percentage equal to the lesser of— the percentage by which the sustainability score for such qualifying building or residence exceeds the average sustainability score for the class to which such building or residence belongs, or 25 percent. The sustainability percentage with respect to the remodeling price of a building or structure shall be a percentage equal to the lesser of— the percentage by which, after remodeling, the sustainability score for such building or structure exceeds the average sustainability score for the class to which such building or structure belongs, or 12.5 percent.
Not later than 1 year after the date of the enactment of this section, the Secretary (in consultation with the Secretary of Energy) shall establish— a certification process for determining a sustainability score with respect to any building for purposes of the credit allowed under this section, and an average sustainability score for different classes of buildings for purposes of the comparison under subsection (b)(1)(A)(i) or subsection (b)(1)(B)(i). Such score shall at least take into account the following factors:
The net carbon emitted during the production and delivery of materials used in construction of the building. The net carbon emitted during the operation of the building on a yearly basis. The amount of carbon retained by the building, taking into account building construction materials and processes and continuing use or disposal of carbon in connection with the use of the building. The climate in which the building is located. The classes for which average sustainability scores are determined shall at least take into account the following distinguishing characteristics:
Residential and commercial buildings. Multi-family and single-family residential. The size, volume, and intended use of the building. The Secretary (in consultation with the Secretary of Energy) shall update the sustainability scoring and the sustainability score averages established under subparagraph
(A)not less frequently than once every 5 calendar years. The Secretary shall establish a volunteer board that advises the Secretary on the sustainability score development and updates. Such board shall be appointed at the discretion of the Secretary and shall include experts in relevant fields, including energy, construction, transportation, agriculture, and labor. The term purchase price means so much of the adjusted basis of the property as is not attributable to land. The term remodeling price means the price of remodeling or expansion of a property, as defined by the Secretary after consultation with the Secretary of Energy. The term qualifying building or residence means, with respect to a taxpayer— any dwelling unit first used as a residence by the taxpayer, or any other building or structure of a character subject to the allowance for depreciation and first placed in service by the taxpayer. Any qualifying building or residence constructed by the taxpayer shall be treated as purchased by the taxpayer on the date the taxpayer first occupies the residence, or places such building in service, as the case may be. If a taxpayer elects the application of this paragraph for any taxable year, the amount of credit determined under this section for such year which would (but for this paragraph) be allowable to the taxpayer shall be allowable to the person designated by the taxpayer. The person so designated shall be treated as the taxpayer for purposes of this title. If any amount is paid to the person who assigns the credit determined under this section, then no portion of such amount shall be includible in such person’s gross income. For purposes of this subtitle, if a credit is allowed under this section with respect to any qualified building or residence, the basis of such building or residence shall be reduced by the amount of the credit so allowed. So much of the credit which would be allowed under subsection
(a)for any taxable year (determined without regard to this paragraph) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)). For purposes of this title, the credit allowed under subsection
(a)for any taxable year (determined after application of subparagraph (A)) shall be treated as a credit allowable under subpart A for such taxable year. Under the certification process established under subsection (b)(2)(A), the Secretaries shall additionally establish a process for certifying to the taxpayer the amount of carbon dioxide stored by a building or residence as determined under (b)(2)(B)(iii). . The table of sections for subpart B of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 30E. Sustainable building and residence credit. . The amendments made by this section shall apply to property purchased after December 31, 2020.