Congress Urged to Pass Extension of Tax Deductions for Energy Efficiency
On September 20, a bill that would extend and improve the 179D tax deduction for energy efficient commercial building upgrades was introduced in the Senate by retiring Senators Olympia Snowe (R-Maine) and Jeff Bingaman (D-N.M.). The legislation also has the backing of Senators Diane Feinstein (D-Calif.) and Benjamin Cardin (D-Md.).
"The Commercial Building Modernization Act" (S. 3591) would increase the maximum available deduction for new construction from $1.80 to $3.00/sf, and up to $4.00/sf for retrofits to existing buildings. This new bill allows for energy savings to be calculated based on the building's own pre-retrofit baseline rather than comparing it to a reference building that meets the ASHRAE 90.1 Standard. S. 3591 also would extend the deduction through the end of 2016; without Congressional action, it will expire at the end of 2013.
This change to the tax code could be a huge victory for commercial real estate owners and managers, and will make the deduction much more useful than as it currently exists.
Originally introduced as part of the Energy Act of 2005, the deduction was most often used piecemeal for lighting retrofits, with the HVAC and building envelope portions being too onerous to achieve. BOMA (Building Owners and Managers Association) is working with Congress and other real estate groups to successfully pass this legislation.
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