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HOUSE BILL NO. 760
AMENDMENT IN THE NATURE OF A SUBSTITUTE
(Proposed by the House Committee on Finance
on ________________)
(Patron Prior to Substitute--Delegate Runion)
A BILL to amend the Code of Virginia by adding in Article 13 of Chapter 3 of Title 58.1 a section numbered
58.1-439.12:13
, relating to income tax; energy-efficient
new
homes tax credits.
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding in Article 13 of Chapter 3 of Title 58.1 a section numbered
58.1-439.12:13
as follows:
§ 58.1-
439.12:13
.
Energy
-
efficient
new
homes
tax credit
s
.
A. For purposes of this section:
"
Construction"
means the construction of new, single-family residential homes
.
"Eligible contractor" means
the person that
(i)
constructed the energy
-
efficient home
or
highly energy-
efficient
home
and owned
the home during its construction or
(ii)
in the case of a
n
energy
-
efficient
home
or
highly energy
-efficient home
that is a
manufactured
home, the person that produced the home and owned
the
home during its production.
"
Energy
-efficient
home"
means
a dwelling unit located in the Commonwealth,
the construction of which is
completed during the taxable year, that
(i)
is certified to
meet the
requirements of the
U.S. Environmental Protection Agency's Energy Star New Home
s
Program
as such program was in effect on January 1, 2026, or any successor program determined by the
Administrator of
the
U.S.
Environmental Protection Agency
or (ii)
is certified to have
a maximum HERS index
score
, before any onsite power production
,
of 45 in climate zone 3A, 47 in climate zone
4
A
, and 51 in climate zone 5A
.
"Entry-level home" means
an energy-efficient home
with a habitable square footage not in excess of 2
,000 square feet.
"Habitable square footage" means the heated, finished square footage of living areas, excluding garages, carports, unfinished attics, unfinished basements, crawlspaces, decks,
porches, and similar non
-habitable spaces.
"Home energy rating system" or "HERS" means the
energy rating index, as defined in the
2022
ANSI/RESNET/ICC
301
Standard
for the Calculation and Labeling of the Energy Performance of Dwelling and Sleeping Units using an Energy Rating Index,
developed
by the
Residential Energy Services Network.
"Move-up home" means
an energy-efficient home
with
a
habitable square footage greater than 2,000 square feet but not in excess of 2,6
00 square feet.
B. For taxable years beginning on and after January 1, 202
6
, but before January 1, 203
3
,
an eligible contractor shall be allowed a
nonrefundable credit against the tax levied pursuant to §
58.1-320
or
58.1-400
(i) in an amount equal to $
2,500
for
each
construction
of an
entry-level
energy-efficient home
and
(ii)
in an amount equal to $
1,875
for each
construction of a
move-up
energy-efficient home
.
Any eligible contractor entitled to a credit under this section may freely transfer
, in whole or in part,
an unused but otherwise allowable credit to another taxpayer.
The transferee taxpayer shall
apply the credit subject to the same limitations and carryforward provisions as the eligible contractor transferor.
An eligible contractor shall not be allowed to claim more than $500,000 pursuant to this section in any taxable year for credits that such contractor has not fully transferred to another taxpayer.
C
.
The credit amounts provided under this section shall, beginning on January 1, 2027
,
and for each year thereafter
,
be adjusted annually based on the greater of (i) the change in the United States Average Consumer Price Index for all items, all urban consumers (CPI-U), as published by the Bureau of Labor Statistics for the U.S. Department of Labor for the previous year
,
or (ii) zero.
D
.
The amount of the credit that may be claimed in any single taxable year shall not exceed the
taxpayer's
liability for taxes imposed by this cha
pter for that taxable year. If the amount of the credit allowed under this section exceeds the
taxpayer's
tax liability for the taxable year in which
the
credit is claime
d
, the amount that exceeds the tax liability may be carried over for credit against the income taxes of the
taxpayer
in the nex
t
seven
taxable years or until the total amount of the tax credit has been taken, whichever is sooner.
E.
The aggregate amount of credits
allowable under
this section shall not exceed
$10 million
per taxable year
.
Credits shall be allocated by the Department on a pro rata basis
.
F.
Notwithstanding any other provisions of state law, the value of any credit claimed pursuant to this section shall not be reduced, including by reason of adjustment, apportionment, or interaction with any other provision of this
t
itle.
G
.
Nothing in this section shall be construed as precluding any taxpayer from claiming any credit o
r
incentive otherwise available under federal law or state program.
H.
The Tax Commissioner shall
, in consultation with the
Department of Energy,
develop guidelines for claiming the credit provided by this section
and shall provide a simple electronic process for registration and tracking of transfers of credits provided pursuant to this section
. Such guidelines shall be exempt from the provisions of the Administrative Process Act (§
2.2-4000
et seq.).
I.
Beginning on July 1, 2027
,
and o
n or before July 1 of each
year
thereafter
, the Department shall publish a
publicly available
report for the preceding
taxable
year that includes the
aggregate
number of credits claimed
for such preceding taxable year
,
including the
total dollar amount, the count by entry-level and move-up tiers, and the distribution by
each
county
within the Commonwealth in w
hich such entry-level or move-up energy-efficient home was constructed and for which a credit was claimed by an eligible contractor pursuant to this section
.
Such report shall comply with the
provisions of
§
58.1-3
and shall not disclose any
taxpayer identifying information.