Clean Energy for America Act:
Proposed Bill 115th Congress 1st Session S. 1068 on May 4, 2017
By: Heidi Henderson, Executive VP of Engineered Tax Services
A proposal bill was brought before the Senate on May 4th, 2017 to extend and revise incentives for Energy Efficiency and Clean Energy. The proposed change spearheaded by Mr. Wyden and Senator Cardin includes the following provisions:
45L Proposed Changes Include:
- $1,500 credit per unit to be increased by $100 for every 5% points greater than the 25% efficiency ratio (not to exceed $3,000)
- Extension through December 31, 2018.
179D Proposed Changes Include:
- Extension through December 31, 2018
- Applicable to NEW CONSTRUCTION ONLY.
- Deduction equal to $1.00 increase by $0.25 for every 5% points greater than 25% of the efficiency ratio (not to exceed $4.75).
- Minimum requirements based off ASHRAE 90.1-2016
- Expansion of allocation to include Indian tribe property, and non-profit organizations.
Addition of 179F: Deduction for Energy Efficient Improvements to Commercial Buildings:
- Applicable to Energy Efficient Improvements
- Dollar value equal to $1.25 increased by $0.50 for every 5 percentage points great than 20% of the efficiency ratio (not to exceed $9.25)
As exciting as these proposed changes are, it is not expected to pass on its own as a stand-along bill. This is considered a Democratic Bill and thus is not expected to be included in the initial Republican version of the comprehensive tax reform bill.
The hope is that portions of the bill will be included in the Senate Finance and House W&M’s Committees’ final tax reform bill or in a larger “extenders” package if comprehensive tax reform does not get through.
On a positive note, there is bi-partisan support for 179D extenders on the house side, which may provide leverage to get a version of the 179D provision in the final tax reform bill. Although this bill is not expected to pass “as-is”, the hope is that portions of it will be rolled into the broader tax reform or tax extenders bill later in the year, or early next year.
ETS’s Founder and CEO, Julio Gonzalez, is closely involved with this process, and playing an advisory role in the development of the comprehensive tax reform bill anticipated to pass later this year. He is actively working with Congress, Senate, and the AIA to help encourage the passage of this bill. This would continue incentives for conserving energy in the United States as bills like 179D were originally intended. The concern is that without these incentives, we will not only go to a lower energy standard but also see job losses. Stay tuned for our upcoming Tax Reform Update Webinar to be announced later this month.
Engineered Tax Services is a National Specialty Tax Firm providing consulting and analysis for Real Estate owners, Investors and Financial Consultants across the country. Follow us online for up-to-date notifications of tax and incentive changes. Contact Heidi Henderson here or your ETS representative for further details.