BOMA Promotes Senate Bill
Introduced by Sens. Olympia J. Snowe (R-Maine), Jeff Bingaman (D-N.M.), Dianne Feinstein (D-Calif.), and Ben Cardin (D-Md.), the bipartisan legislation would extend the tax deduction through the end of 2016, while modifying the deduction to encourage efficiency retrofits in existing buildings. Absent congressional action, the deduction will expire at the end of 2013.
While 179D has been successfully utilized to encourage energy efficiency in new construction, it has yet to be a meaningful incentive for energy-efficient upgrades to retrofit existing buildings. The revisions to Section 179D found in the Commercial Building Modernization Act will encourage greater efficiency in existing structures and include a “performance-based” component to reward retrofits that produce verifiable energy savings when existing buildings lower utility consumption. The revisions also scale the tax deduction so that incentive amounts increase with greater energy savings.
The CBMA revisions also would make it easier for a broader range of real estate owners to access 179D deductions, including real estate investment trusts (REITs), limited liability partnerships (LLPs), and other real estate ownership structures that cannot benefit from conventional tax incentives. The CBMA modifies the current provisions of Section 179D and allows REITs, LLPs, and other building owners the ability to allocate the tax incentive to other parties responsible for retrofit projects — including contractors, engineers, architects, and lenders — that can benefit from the deduction.
“BOMA International fully supports the passage of this legislation and the extension of the 179D tax deductions,” said Joseph W. Markling, international chair, BOMA. “It not only encourages energy efficiency and savings through improved incentives, but the resulting increase in retrofit projects would create thousands of jobs in the construction and green energy industries.”
BOMA, in association with a number of national real estate organizations, will be sending a letter in support of the legislation to the Senate Finance Committee and the Senate Energy & National Resources Committee in the coming weeks.
Publication date: 12/3/2012