Committee Chairman Charles Grassley and the committee's ranking Democrat, Sen. Max Baucus (D-MT), introduced legislation this year (S. 2401) to extend several provisions from last year's energy reform package that support alternative energies and energy efficiency. This includes a real estate-backed tax deduction of $1.80 per square foot in construction and renovation expenditures for energy efficient commercial buildings that meet a 50 percent energy reduction standard. S. 2401 (the "Alternative Energy Extender Act") would extend the tax deduction to Dec. 31, 2010; it is currently scheduled to expire after Jan. 1, 2008, RER says.
Writing to Grassley and Baucus earlier this year, The Roundtable urged congressional tax-writers to extend last year's "green building" tax deduction, asserting that a longer time frame is needed for the provision to live up to its true potential -- i.e. to stimulate investment in a new generation of high-performance, highly energy efficient green buildings.
Given the substantial planning and development time for large, comprehensive projects such as the design and construction of ultra-efficient HVAC (heating/ventilation/air conditioning) systems and building shells, the current two-year provision is likely to stimulate only short-term energy efficiency projects such as lighting upgrades, RER says. The Roundtable also recommends increasing the deduction amount to the originally proposed $2.25 per square foot.
