81 FR 11160 - Utility Allowances Submetering

DEPARTMENT OF THE TREASURY
Internal Revenue Service

Federal Register Volume 81, Issue 42 (March 3, 2016)

This document contains proposed regulations that amend the utility allowance regulations concerning the low-income housing credit. The proposed regulations relate to the circumstances in which utility costs paid by a tenant based on actual consumption in a submetered rent-restricted unit are treated as paid by the tenant directly to the utility company. The proposed regulations extend those rules to situations in which a building owner sells to tenants energy that is produced from a renewable source and that is not delivered by a local utility company. The proposed regulations affect owners of low-income housing projects that claim the credit, the tenants in those low-income housing projects, and the State and local housing credit agencies that administer the credit. In the Rules and Regulations section of this issue of the Federal Register, the IRS is issuing temporary regulations concerning utility allowance regulations when the utility is generated from renewable sources and is not delivered by the local utility company. The text of those regulations also serves as the text of these proposed regulations. This document also contains a notice of a public hearing on these proposed regulations.

[Federal Register Volume 81, Number 42 (Thursday, March 3, 2016)]
[Proposed Rules]
[Pages 11160-11161]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-04618]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-123867-14]
RIN 1545-BM28


Utility Allowances Submetering

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

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SUMMARY: This document contains proposed regulations that amend the 
utility allowance regulations concerning the low-income housing credit. 
The proposed regulations relate to the circumstances in which utility 
costs paid by a tenant based on actual consumption in a submetered 
rent-restricted unit are treated as paid by the tenant directly to the 
utility company. The proposed regulations extend those rules to 
situations in which a building owner sells to tenants energy that is 
produced from a renewable source and that is not delivered by a local 
utility company. The proposed regulations affect owners of low-income 
housing projects that claim the credit, the tenants in those low-income 
housing projects, and the State and local housing credit agencies that 
administer the

[[Page 11161]]

credit. In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations concerning 
utility allowance regulations when the utility is generated from 
renewable sources and is not delivered by the local utility company. 
The text of those regulations also serves as the text of these proposed 
regulations. This document also contains a notice of a public hearing 
on these proposed regulations.

DATES: Comments and requests for a public hearing must be received by 
May 2, 2016.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-123867-14), Room 
5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-
123867-14), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC, or sent electronically, via the Federal 
eRulemaking Portal at http://www.regulations.gov/ (IRS REG-123867-14).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
James Rider at (202) 317-4137; concerning submissions of comments and 
requests for a public hearing, Oluwafunmilayo Taylor at (202) 317-6901 
(not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend 26 CFR part 1. The temporary 
regulations provide a special rule for a renewable-source utility 
arrangement in which the building owner does not pay a local utility 
company for the utility consumed by the tenant. The text of those 
regulations also serves as the text of these regulations. The preamble 
to the temporary regulations explains the temporary regulations and 
these proposed regulations.

Special Analyses

    Certain IRS regulations, including this one, are exempt from the 
requirements of Executive Order 12866, as supplemented and reaffirmed 
by Executive Order 13563. Therefore, a regulatory assessment is not 
required. It also has been determined that section 553(b) of the 
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to 
this regulation, and because the regulation does not impose a 
collection of information on small entities, the Regulatory Flexibility 
Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of 
the Internal Revenue Code, this notice of proposed rulemaking has been 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on its impact on small business.

Comments and Requests for Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written comments (a signed original 
and eight (8) copies) or electronic comments that are submitted timely 
to the IRS as prescribed in this preamble under the ``ADDRESSES'' 
heading. The IRS and the Treasury Department request comments on all 
aspects of the proposed regulations. All comments that are submitted by 
the public will be available for public inspection and copying at 
www.regulations.gov or upon request. A public hearing will be scheduled 
if requested in writing by any person that timely submits comments. If 
a public hearing is scheduled, notice of the date, time, and place for 
the public hearing will be published in the Federal Register.

Drafting Information

    The principal author of these regulations is David Selig, Office of 
the Associate Chief Counsel (Passthroughs and Special Industries), IRS. 
However, other personnel from the IRS and the Treasury Department 
participated in their development.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *

0
Par. 2. Section 1.42-10(e)(1)(i)(B) and (C), and (e)(1)(iv)(B) are 
revised to read as follows:


Sec.  1.42-10  Utility allowances.

* * * * *
    (e) * * * (1) * * *
    (i) * * *
    (B) [The text of the proposed amendments to Sec.  1.42-
10(e)(1)(i)(B) is the same as the text of Sec.  1.42-10T(e)(1)(i)(B) 
published elsewhere in this issue of the Federal Register].
    (C) [The text of the proposed amendments to Sec.  1.42-
10(e)(1)(i)(C) is the same as the text of Sec.  1.42-10T(e)(1)(i)(C) 
published elsewhere in this issue of the Federal Register].
* * * * *
    (iv) * * *
    (B) [The text of the proposed amendments to Sec.  1.42-
10(e)(1)(iv)(B) is the same as the text of Sec.  1.42-10T(e)(1)(iv)(B) 
published elsewhere in this issue of the Federal Register].
* * * * *

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2016-04618 Filed 3-2-16; 8:45 am]
BILLING CODE 4830-01-P