Notice 2006-27

Jennifer Bernardini at (202) 622–3120
(not a toll-free call).

Certification of Energy
Efficient Home Credit
Notice 2006–27
SECTION 1. PURPOSE
This notice sets forth a process under
which an eligible contractor who constructs a dwelling unit (other than a manufactured home) may obtain a certification
that the dwelling unit is an energy efficient home that satisfies the requirements
of § 45L(c)(1)(A) and (B) of the Internal
Revenue Code. This notice also provides
for a public list of software programs
that may be used in calculating energy
consumption for purposes of obtaining
a certification that satisfies the requirements of § 45L(d). Guidance relating to
manufactured homes will be provided in a
separate notice.
SECTION 2. BACKGROUND
.01 In General. Section 45L provides
a credit to an eligible contractor who constructs a qualified new energy efficient
home. For qualified new energy efficient
homes (other than manufactured homes),
the amount of the credit is $2,000. A
dwelling unit qualifies for the credit if—
(1) It is located in the United States;
(2) Its construction is substantially
completed after August 8, 2005;
(3) It meets the energy saving requirements of § 45L(c)(1); and
(4) It is acquired from the eligible contractor after December 31, 2005, and before January 1, 2008, for use as a residence.
.02 Energy Saving Requirements. To
meet the energy saving requirements of
§ 45L(c)(1), a dwelling unit must be certified to provide a level of heating and
cooling energy consumption that is at least
50 percent below that of a comparable
dwelling unit constructed in accordance
with the standards of section 404 of the
2004 Supplement to the 2003 International
Energy Conservation Code (2004 IECC
Supplement), and to have building envelope component improvements that provide for a level of heating and cooling energy consumption that is at least 10 percent

2006–11 I.R.B.

below that of a comparable dwelling unit.
For this purpose, heating and cooling energy and cost savings must be calculated in
accordance with the procedures prescribed
in Residential Energy Services Network
(RESNET) Publication No. 05–001 (Nov.
17, 2005).
SECTION 3. CERTIFICATION
A contractor must obtain the certification required under § 45L(c)(1) with respect to a dwelling unit (other than a manufactured home) from an eligible certifier
before claiming the energy efficient home
credit with respect to the dwelling unit. A
contractor is not required to file the certification with the return on which the credit
is claimed. However, § 1.6001–1(a) of the
Income Tax Regulations requires that taxpayers maintain such books and records
as are sufficient to establish the entitlement to, and amount of, any credit claimed
by the taxpayer. Accordingly, an eligible contractor claiming a $2,000 credit under § 45L should retain the certification
as part of the eligible contractor’s records
to satisfy this requirement. The certification will be treated as satisfying the requirements of § 45L(c)(1) if all construction has been performed in a manner consistent with the design specifications provided to the eligible certifier and the certification contains all of the following:
.01 The name, address, and telephone
number of the eligible certifier.
.02 The address of the dwelling unit.
.03 A statement by the eligible certifier
that—
(1) The dwelling unit has a projected
level of annual heating and cooling energy consumption that is at least 50 percent below the annual level of heating and
cooling energy consumption of a reference
dwelling unit in the same climate zone;
(2) Building envelope component improvements alone account for a level of annual heating and cooling energy consumption that is at least 10 percent below the
annual level of heating and cooling energy
consumption of a reference dwelling unit
in the same climate zone; and
(3) Heating and cooling energy and cost
savings have been calculated in the manner
prescribed in section 2.02 of this notice.
.04 A statement by the eligible certifier
that field inspections of the dwelling
unit (or of other dwelling units under

626

the sampling protocol described below)
performed by the eligible certifier during
and after the completion of construction
have confirmed that all features of the
home affecting such heating and cooling
energy consumption comply with the
design specifications provided to the
eligible certifier. With respect to builders
who build at least 85 homes a year or
build subdivisions with the same floor
plan using the same subcontractors, the
eligible certifier may use the sampling
protocol found in the current ENERGY
STAR® for Homes Sampling Protocol
Guidelines instead of inspecting all of the
homes. The sampling protocols can be
found at the following web address:
http://www.energystar.gov/
index.cfm?c=bldrs_lenders_raters.pt_
homes_policies#SamplingProtocol
.05 A list identifying—
(1) The dwelling unit’s energy efficient building envelope components and
their respective energy performance rating
as required by section 401.3 of the 2004
IECC Supplement; and
(2) The energy efficient heating
and cooling equipment installed in the
dwelling unit and the energy efficiency
performance of such equipment as rated
under applicable Department of Energy
Appliance Standards test procedures.
.06 Identification of the listed software
program used to calculate energy consumption (see section 5 of this notice).
.07 A declaration, applicable to the
certification and any accompanying documents, signed by a person currently
authorized to bind the eligible certifier in
these matters, in the following form:
“Under penalties of perjury, I declare
that I have examined this certification,
including accompanying documents,
and to the best of my knowledge and
belief, the facts presented in support of
this certification are true, correct, and
complete.”
SECTION 4. DEFINITIONS
The following definitions apply for purposes of this notice:
(1) Building envelope components are
basement walls, exterior walls, floor, roof,
and any other building element that encloses conditioned space, including any
boundary between conditioned space and
unconditioned space.

March 13, 2006

(2) A climate zone is a geographical
area within which all locations have similar long-term climate conditions as defined
in Chapter 3 of the 2004 IECC Supplement.
(3) A dwelling unit is a single unit providing complete independent living facilities for one or more persons, including
permanent provisions for living, sleeping,
eating, cooking, and sanitation, within a
building that is not more than three stories
above grade in height.
(4) An eligible certifier is a person
that is not related (within the meaning of
§ 45(e)(4)) to the eligible contractor and
has been accredited or otherwise authorized by RESNET (or an equivalent rating
network) to use energy performance measurement methods approved by RESNET
(or the equivalent rating network). An employee or other representative of a utility
or local building regulatory authority may
qualify as an eligible certifier if the employee or representative has been accredited or otherwise authorized by RESNET
(or an equivalent rating network) to use
the approved energy performance measurement methods.
(5) An eligible contractor is the person
that constructed a qualified new energy efficient home.
(6) A manufactured home is a dwelling
unit constructed in accordance with the
Federal Manufactured Home Construction
and Safety Standards (24 C.F.R § 3280).
(7) A reference dwelling unit is a
dwelling unit that is comparable to the
dwelling unit constructed by the eligible
contractor except that—
(a) The comparable dwelling unit is
constructed in accordance with the minimum standards of Chapter 4 of the 2004
IECC Supplement;
(b) The comparable dwelling unit’s air
conditioners have a Seasonal Energy Efficiency Ratio (SEER) of 13, measured in
accordance with 10 C.F.R. 430.23(m); and
(c) The comparable dwelling unit’s heat
pumps have a SEER of 13 and a Heating Seasonal Performance Factor (HSPF)
of 7.7, measured in accordance with 10
C.F.R. 430.23(m).
SECTION 5. SOFTWARE PROGRAMS
.01 In General. The Internal Revenue
Service will create and maintain a public list of software programs that may be

March 13, 2006

used to calculate energy consumption for
purposes of providing a certification under section 3 of this notice. A software
program will be included on the original
list if the software developer submits the
following information to the Service and
RESNET:
(1) The name, address, and telephone
number of the software developer;
(2) The name or other identifier of the
program as it will appear on the list;
(3) The test results, test runs, and the
software program with which the test was
conducted; and
(4) A declaration by the developer of
the software program, made under penalties of perjury, that the software program
has satisfied all tests required to conform to the software accreditation process
prescribed in RESNET Publication No.
05–001 (Nov. 17, 2005).
.02 Addresses. Submissions under this
section must be addressed as follows:
Submissions to the Service submitted
by U.S. mail:
Internal Revenue Service
Attn: Program Administrator
CC:PSI:7, Room 4315
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044

Submissions to the Service submitted
by a private delivery service:
Internal Revenue Service
Attn: Program Administrator
CC:PSI:7, Room 4315
1111 Constitution Ave., N.W.
Washington, DC 20224

Submissions to RESNET:
Residential Energy Services Network
P.O. Box 4561
Oceanside, CA 92052–4561

.03 Original and Updated Lists. A software program will be included on the original list if the software developer’s submission is received before March 1, 2006.
The list will be updated as necessary to reflect submissions received after February
28, 2006.

627

.04 Removal from Published List. The
Service may, upon examination (and after
appropriate consultation with the Department of Energy), determine that a software
program is not sufficiently accurate to justify its use in calculating energy consumption for purposes of providing a certification under section 3 of this notice and remove the software program from the published list. The Service may undertake an
examination on its own initiative or in response to a public request supported by
appropriate analysis of the software program’s deficiencies.
.05 Effect of Removal from Published
List. A software program may not be used
to calculate energy consumption for purposes of providing a certification that satisfies the requirements of § 45L after the
date on which the software is removed
from the published list. The removal will
not affect the validity of any certification
provided with respect to a dwelling unit on
or before the date on which the software is
removed from the published list.
.06 Public Availability of Information.
RESNET may make available for public
review any information provided to it under section 5.01 of this notice.
SECTION 6. PAPERWORK
REDUCTION ACT
The collections of information contained in this notice have been reviewed
and approved by the Office of Management and Budget in accordance with the
Paperwork Reduction Act (44 U.S.C.
3507) under control number 1545–1995.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collections of information in this
notice are in sections 3 and 5. This information is required to be collected and
retained in order to ensure that a dwelling
unit (other than a manufactured home)
meets the requirements for the energy
efficient home credit under § 45L. This
information will be used to determine
whether property for which certifications
are provided is property that qualifies for
the credit. The collection of information
is required to obtain a benefit. The likely
respondents are corporations and partnerships.

2006–11 I.R.B.

The estimated total annual reporting
burden is 180 hours.
The estimated annual burden per respondent varies from 2.5 hours to 4 hours,
depending on individual circumstances,
with an estimated average burden of 3
hours to complete the certification required under this notice. The estimated
number of respondents is 45.
The estimated annual frequency of responses is on occasion.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any Internal Revenue
law. Generally, tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
SECTION 7. DRAFTING
INFORMATION
The principal author of this notice is
Jennifer C. Bernardini of the Office of
Associate Chief Counsel (Passthroughs
& Special Industries). For further information regarding this notice, contact
Jennifer C. Bernardini at (202) 622–3120
(not a toll-free call).

Energy Efficient Home Credit;
Manufactured Homes
Notice 2006–28
SECTION 1. PURPOSE
This notice sets forth a process under
which an eligible contractor who constructs a manufactured home may obtain
a certification that the dwelling unit is
an energy efficient home that satisfies
the requirements of § 45L(c)(2) or (3) of
the Internal Revenue Code. This notice
also provides for a public list of software
programs that may be used in calculating energy consumption for purposes of
providing a certification that satisfies the
requirements of § 45L(d). Guidance relating to other dwelling units will be provided
in a separate notice.
SECTION 2. BACKGROUND
.01 In General. Section 45L provides
a credit to an eligible contractor who constructs a qualified new energy efficient

2006–11 I.R.B.

home. For qualified new energy efficient
homes that are manufactured homes, the
amount of the credit is $1,000 or $2,000,
depending on the energy savings that are
achieved. A manufactured home qualifies
for the credit if:
(1) It is located in the United States;
(2) Its construction is substantially
completed after August 8, 2005;
(3) It meets the energy saving requirements of § 45L(c)(2) or (3); and
(4) It is acquired, directly or indirectly,
from the eligible contractor after December 31, 2005, and before January 1, 2008,
for use as a residence.
.02 Energy Saving Requirements. To
meet the energy saving requirements of
§ 45L(c)(2) or (3), a manufactured home
must meet one of the following standards:
(1) To meet the energy saving requirements of § 45L(c)(2) and qualify for the
$2,000 credit, a manufactured home must
be certified to provide a level of heating
and cooling energy consumption that is at
least 50 percent below that of a comparable manufactured home constructed in
accordance with the standards of section
404 of the 2004 Supplement to the 2003
International Energy Conservation Code
(2004 IECC Supplement), and to have
building envelope component improvements that provide for a level of heating
and cooling energy consumption that is at
least 10 percent below that of a comparable dwelling unit (see section 3 of this
notice); or
(2) To meet the energy saving requirements of § 45L(c)(3) and qualify for the
$1,000 credit, a manufactured home must
either—
(a) be certified to provide a level of
heating and cooling energy consumption
that is at least 30 percent below that of
a comparable manufactured home constructed in accordance with the standards
of section 404 of the 2004 IECC Supplement, and to have building envelope
component improvements that provide for
a level of heating and cooling energy consumption that is at least 10 percent below
that of a comparable dwelling unit; or
(b) meet the current requirements established by the Administrator of the Environmental Protection Agency under the
ENERGY STAR® Labeled Homes Program in effect on the date construction is
substantially completed (See section 4 of
this notice).

628

.03 For purposes of section 2.02 of this
notice, heating and cooling energy and cost
savings must be calculated in accordance
with the procedures prescribed in Residential Energy Services Network (RESNET)
Publication No. 05–001 (Nov. 17, 2005).
SECTION 3. REQUIREMENTS TO
CLAIM THE $2,000 CREDIT
An eligible contractor must obtain the
certification required under § 45L(c)(2)
with respect to a manufactured home from
an eligible certifier before claiming the
$2,000 energy efficient home credit with
respect to the manufactured home. An
eligible contractor is not required to attach
the certification to the return on which the
credit is claimed. However, § 1.6001–1(a)
of the Income Tax Regulations requires
that taxpayers maintain such books and
records as are sufficient to establish the
entitlement to, and amount of, any deduction claimed by the taxpayer. Accordingly,
an eligible contractor claiming a $2,000
credit under § 45L should retain the certification as part of the eligible contractor’s
records to satisfy this requirement. The
certification will be treated as satisfying
the requirements of § 45L(c)(2) if all construction has been performed in a manner
consistent with the design specifications
provided to the eligible certifier and the
certification contains all of the following:
.01 The name, address, and telephone
number of the eligible certifier;
.02 The dwelling unit’s serial or other
identification number;
.03 A statement by the eligible certifier
that—
(1) The dwelling unit has a projected
level of annual heating and cooling energy consumption that is at least 50 percent below the annual level of heating and
cooling energy consumption of a reference
dwelling unit in the same climate zone;
(2) Building envelope component improvements alone account for a level of annual heating and cooling energy consumption that is at least 10 percent below the
annual level of heating and cooling energy
consumption of a reference dwelling unit
in the same climate zone; and
(3) Heating and cooling energy and cost
savings have been calculated in the manner
prescribed in section 2.02(3) of this notice;
.04 A statement by the eligible certifier
that field inspections of the dwelling

March 13, 2006