179D—Energy efficiency tax deductionsBOMA/NY’s advocacy team is focusing squarely on five key issues this upcoming year: 179D Tax Reform (energy efficiency provisions), Living Wage legislation, items known as "tax extenders", Clean Heat implementation and the ongoing revisions of the NYC Building and Construction Codes.
In this edition of BOMAFACTS, we’re focusing in on the three most pressing of these issues—179D, Living Wage and tax extenders. While the topics may sound insomnia-inducing, at the end of the day, they have serious financial complications, from weakening market confidence to reducing profits and cutting into disposable income.
179D—Energy efficiency tax deductions
These performance-based energy efficiency deductions—which can range from $.30 to $1.80 psf, depending on how well your building meets the ASHRAE 90.102001 standards—cover buildings coming on line from 2006 and 2013.
But that is not enough, argues the industry. Deductions should be applicable to retrofit properties or those undergoing energy upgrades. The benefits of expanded deductions will extend beyond monetary gain to the creation of 77,000 jobs from potential retrofits, which would become financially feasible if the law is amended. We'll be lobbying our Congressional delegation to support our position and monitoring negotiations on Capital Hill, with BOMA International stepping to testify at hearings as necessary.
Living Wage
Now in debate by New York’s City Council, Bill 251-B or The Fair Wages for New Yorkers Act requires employers covered by financial assistance from NYC to pay a "living wage" to employees for at least 10 years from the time the financial assistance was given. Assistance is defined as funding of $1 million or more for the "improvement of real property, economic development, job retention and growth or similar purposes" which are negotiated or awarded at the discretion of the City and can include everything from cash or bonds to filing fee waivers, energy cost reductions, environmental remediation and more.
While the bill sounds as if it has the best of intentions, it actually has serious flaws which BOMA/NY and its fellow coalition partners in "Putting New Yorkers to Work" believe work counter to its goal of keeping people employed. Our position is best explained in this excerpt from testimony we’ve delivered twice before the Council this year, and will continue to advocate in 2012.
"By mandating a higher wage scale, this legislation drives away employers who can invest and bring jobs to our City. The exemptions fail to protect our members—particularly building service professionals, many of which operate small businesses. Even if they were exempt from the Living Wage provisions, they would still incur costly disclosure and reporting requirements every year...
Our members have come to rely on government incentive assistance for environmental and energy retrofits. If this bill were to become law, our members would re-evaluate their viability and most likely abandon these projects, causing us to fail in our duty to make a greener New York a reality. Finally, the onerous compliance requirements will impose unprecedented costs and burdens passed along to tenants, leading to higher rents and vacancy rates."
Tax extenders
These provisions, which number more than a dozen, are set to expire at the end of this year and cover extensions of the bonus depreciation allowance, leasehold improvement depreciation and alternative fuel and energy efficiency tax credits, among others. We’ve continually advocated for these provisions over the past years and should they fail to be extended by today’s seemingly deadlocked Congress, we’ve already planned to meet with members of a New York industry delegation to put our full weight behind lobbying for their extension. Failure to extend the provisions is seen by many in the industry as a sure road to exacerbating market instability and economic uncertainty and weakening employers’ confidence in new hiring.
BOMA/NY
http://www.bomany.org/