U.S. Senators Dianne Feinstein (D-California), Olympia J. Snowe (R-Maine), Jeff Bingaman (D-New Mexico) and Ben Cardin (D-Maryland) have introduced the "Commercial Building Modernization Act" (S. 3591), legislation to reform, extend, and simplify the Section 179D tax deduction for energy efficient commercial and multi-family buildings. The bipartisan bill, filed last Thursday, will extend the Section 179D tax deduction, which is scheduled to expire at the end of next year, through the end of 2016, while modifying the tax deduction to target retrofits of existing commercial buildings. The current deduction has been labeled both costly and cumbersome for building owners to apply Section 179D for comprehensive energy efficiency retrofits, resulting in it being used currently for partial building system upgrades. The legislation has been endorsed by American Council for an Energy Efficient Economy, the Real Estate Roundtable, the Natural Resources Defense Council (NRDC), and the U.S. Green Building Council (USGBC), who have estimated in a joint report that a reformed 179D tax deduction would generate more than 77,000 construction, manufacturing, and service jobs nationwide.
"Building efficiency improvements are a smart, cost-effective way to reduce pollution, increase the competitiveness of our employers and put people back to work in the building trades," said Senator Feinstein. "This bill has been long discussed and carefully considered. It will improve the effectiveness of a tax incentive that has the potential to make thousands of businesses more competitive and create good jobs right here in the United States."
"By making commonsense reforms to the existing 179D tax deduction, we will help encourage energy savings, create good-paying jobs in the construction industry, and reduce energy bills for American consumers," said Senator Snowe, a senior member of the Senate Finance Committee. "Our legislation would also make this critical incentive more accessible and effective for existing buildings that are currently using inefficient lighting systems, antiquated heating and cooling systems, and poor insulation. By targeting this tax credit for retrofits we can bolster a beleaguered construction industry that has experienced unemployment levels of more that 20 percent, and lower the cost of energy for our nation's businesses."
"Extending, modifying and simplifying this important tax deduction will help building owners and their tenants reduce their energy consumption, helping to boost their bottom lines, said Senator Bingaman, Chairman of the Senate Committee on Energy & Natural Resources. "Additionally, it will help create thousands of new retro-fit industry jobs across the country. It is my hope that Congress passes this key piece of legislation before the end of the year."
"Energy efficiency is good business and good policy," said Senator Cardin, a member of the Senate Finance and Environment and Public Works Committees. "The Commercial Building Modernization Act creates American jobs, saves money for businesses big and small, and ensures that our local communities have modern infrastructure friendly to the environment and ready for the future."