At a press conference at 10:45 AM on Sept 22, 2015 Senate Democrats led by Senator Maria Cantwell (D-WA), Senate Minority Leader Harry Reid (N-NV), Senator Chuck Schumer (D-NY), and Senator Ron Wyden (D-OR) unveiled a comprehensive energy bill, including measures reforming energy tax incentives.
A section-by-section description of the energy tax title of the legislation that was released by the Senate Democrats can be found by going to the following link: http://docdro.id/DLOtjHn
The aim of the bill is to replace the assorted tax breaks currently in place for the oil industry, solar energy and others with a smaller number of technology neutral tax provisions, creating what Senator Wyden has described as a shift toward a “market-based” tax code. Of particular interest to commercial building owners, as well as those involved in the design of newly constructed or retrofitted government owned buildings, are the specific provisions in this draft legislation related to the Section 179D deduction.
The bill replaces the existing Section 179D with two new deductions: The Deduction for New Energy Efficient Commercial Buildings (179D) and the Energy Efficiency Deduction for Existing Commercial Buildings (179F). The new commercial building deduction would be $1.00 per square foot for new buildings at least 25% more efficient than ASHRAE 90.1-2013 standards, increasing up to $4.75 per square foot for higher levels of energy efficiency.
The new deduction for retrofitted commercial buildings is computed by comparing the energy use prior to the retrofits with the energy use after retrofits are placed in service (as modeled by third-party firms). This deduction starts at $1.25/ft.2 for a 20% reduction in energy use and goes up to $9.25$1.25/ft.2 for greater reductions in energy use.
The new deductions would be available for buildings or improvements placed in service after December 31, 2017 with no expiration date. The legislation also extends all of the expired/expiring energy tax incentives, including current law Section 179D, through December 31, 2017.
This proposed energy legislation will not be enacted in its current form. However, it does show the types of energy tax incentives the Senate Democrats would likely propose in tax reform. “I think it’s possible to get more clean, renewable energy for substantially less money,” Senator Ron Wyden told Bloomberg reporters and editors.
http://www.youtube.com/watch?v=ULaTt38CSr8
The legislative language for the entire bill can be found here: http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=3bfa5dbc-fa88-4d82-9354-c671d5de39fa
For any questions regarding legislative developments pertaining to the Section 179D deduction, or any other questions you may have, contact Concord Managing Member Dennis J. Stilger, Jr at Dennis@ConcordLP or 888-897-5445 today.
