A new bill in Congress compliments the Biden administration’s push for IAQ improvements by offering tax credits for indoor air quality assessments and air-filtration and HVAC system upgrades in many non-residential buildings.
Industry advocates at two trade organizations are calling the proposal well-intentioned but flawed.
House Resolution 7671, dubbed the Airborne Act, is sponsored by Rep. Don Beyer, D-Virginia. It would offer the owner of a commercial building a $1-per-square-foot federal tax credit for a qualifying IAQ assessment, a $5-per-square-foot credit for an air-filtration upgrade that brings a system into compliance with the ASHRAE standard 62.1 and MERV 13 filtration, and a $50-a-square-foot credit for an HVAC upgrade that also brings a system in line with ASHRAE 62.1 and MERV 13 filtration.
The credit for an IAQ assessment would be capped at the cost of the assessment, while the credit for a filtration and HVAC system upgrade would be capped at half of the cost of the upgrade. The Airborne Act would amend the Internal Revenue Code and would add a new subsection to the code under the existing Section 45.
Both Alex Ayers, the government affairs director at HARDI, and Barton James, president and CEO of ACCA, criticized the measure.
James said the federal government should look at the bigger picture when it comes to IAQ and HVAC instead of taking what he said was a piecemeal approach.
“You’ve got to look at it more holistically than throwing a filter in there,” he said.
Noting that 17 states have no licensing requirements for HVAC contractors, and that among those that do the requirement sometimes amounts to nothing more than a fee, James said the government should address issues around meaningful licensing standards, ensuring quality HVAC installations, and promoting proper system maintenance.
“Imagine five dollars a square foot for service and maintenance,” he said. “That really goes a long way.”
Ayers said Section 45 of the Internal Revenue Code, which concerns tax credits for energy generated by renewable sources, is the wrong place for the Airborne Act’s incentives, and that they would fit better under Section 179D, which offers tax deductions for energy-efficient commercial buildings.
“It would be much simpler to add air quality equipment (to 179D) than to create another section of the tax code,” Ayers said. “It’s far easier to sell a business owner on a single tax incentive rather than multiple overlapping ones.”
Under the Airborne Act, public buildings would also be included in the tax-credit plan. The tax credit would go to the company performing the IAQ assessment, filtration upgrade, or HVAC system upgrade, and the company would be required to lower the cost of the work by the amount of the credit. Beyer spokesman Aaron Fritschner said that buildings owned by nonprofits would also be included under an upcoming revision to the bill.
Beyer, a former Virginia lieutenant governor in his fourth term in the House of Representatives, introduced the Airborne Act in May, noting that there had been an uptick in workers returning to in-person work after working remotely during the coronavirus pandemic.
“Improving indoor air quality reduces the risk of COVID-19 transmission, but it also can benefit employers and workers by reducing sick days, creating a cleaner and more comfortable work environment, and lessening the risk of long-term health conditions,” Beyer said in a press release.
The Airborne Act would also create a voluntary program through which property owners could certify that their properties comply with ASHRAE standard 62.1 and MERV 13 filtration.
Beyer’s office said that ASHRAE had provided technical advice as the legislation was drafted. The Airborne Act is currently before the House Ways and Means Committee.