Roundtable members are among the commercial real estate partners recognized in the U.S. Department of Energy’s (DOE) Better Buildings Initiative 2023 progress report released on Monday. This voluntary public-private partnership with more than 900 participating organizations has collectively saved $18.5 billion through energy efficiency improvements, and cut carbon dioxide emissions by nearly 190 million metric tons, since its launch in 2011. (DOE’s Better Buildings Initiative Report and PoliticoPro, Oct. 23)
DOE’s CRE Partners
- This week’s Progress Report from DOE shows that more than 165 partners from various industry sectors who participate in its separate Better Climate Challenge have committed to reducing greenhouse gas (GHG) emissions (scope 1 and 2) by at least 50% over 10 years without the use of offsets. The report’s outstanding GHG Emissions Reduction Goal Achievers include companies led by RER members.
- The Real Estate Roundtable and several of its partner real estate organizations—including the National Multifamily Housing Council (NMHC), American Hotel & Lodging Association (AHLA), Building Owners & Managers Association International (BOMA), Pension Real Estate Association (PREA), and Urban Land Institute (ULI)—are noted in the report as Industry Organization Partners.
- U.S. Secretary of Energy Jennifer M. Granholm said, “To meet President Biden’s ambitious climate goals, the public and private sector need practical pathways to reduce emissions while cutting costs—and that’s exactly what they get from DOE’s Better Building Initiative.” (DOE news release and the report’s Commercial Real Estate Sector Spotlight)
Tools and Best Practices
- DOE’s partners represent almost every sector of the American economy: nearly 30 of the country’s Fortune 100 companies, nearly 20 of the top 50 U.S. employers, 14% of the U.S. manufacturing energy footprint, and 13% of total commercial building space, as well as more than 90 state and local governments.
- The DOE report also provides case studies for collaborations across sectors to access insights, strategies, and through the agency’s “Decarbonization Resource Hub.”
DOE’s Better Buildings Initiative website provides extensive resources on the agency’s wide-ranging effort to partner with leaders in the public and private sectors to make the nation’s commercial buildings, industrial plants, and homes more energy-efficient by accelerating investment and sharing successful best practices.
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The Inflation Reduction Act (IRA) that passed Congress today (see story above) – “includes the largest expenditures ever made by the federal government to slow global warming.” (New York Times, Aug. 7) The bill “would spend nearly $370 billion on a raft of tax credits to help stimulate adoption of clean energy technologies.” (POLITICO, July 28)
Key CRE Credits and Deductions (RER Fact Sheet)
A number of the IRA’s revisions to the federal tax code can help the U.S. real estate sector reduce GHG emissions. The Real Estate Roundtable has prepared a fact sheet summarizing key IRA incentives, including:
- A revised tax deduction at Section 179D, to encourage existing commercial building “retrofit” projects that cut energy consumption by at least 25%;
- A revised tax credit at Section 45L, to encourage new energy efficient multifamily construction;
- An expanded tax credit at Section 48, to support investments in solar, combined heat and power, microturbines, energy storage, dynamic glass, grid interconnection, fuel cells, geothermal heat pumps, and other clean energy technologies;
- A new code section to allow businesses that cannot typically benefit from tax incentives because of income limitations (such as REITs) to transfer certain credits to unrelated third parties.
The Senate Finance Committee has provided a summary of all incentives in the IRA’s “Energy Security” Subtitle D.
- The Roundtable has long advocated for code changes that can make clean energy incentives more usable for building owners, managers, designers, and financiers. (See Roundtable Weekly, Nov. 19 and May 28, 2021).
- The IRA includes a number of The Roundtable’s recommended changes. As our analysis of Subtitle D continues, RER’s fact sheet will be updated and revised.
The Internal Revenue Service (IRS) is expected to issue multiple regulations and guidance documents in the coming months that implement the new law. The Roundtable will provide comments as new rules are proposed to help accelerate the CRE industry’s investments in tackling the climate crisis.
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Proposed changes to the taxation of carried interest were cut from Senate Democrats’ broad Inflation Reduction Act (IRA) yesterday at the request of centrist Sen. Kyrsten Sinema (D-AZ). The Roundtable and 14 other national real estate organizations wrote to all members of Congress on Aug. 3 in strong opposition to the measure. (Coalition letter, Aug. 3 | Wall Street Journal, Aug. 4 |Tax Notes, Aug. 5). Photo above: Sen. Sinema at The Roundtable’s 2022 Spring Meeting.
Vote on Revised Reconciliation Bill
- Sinema announced her decision in a statement released Thursday night, commenting she would “move forward” with the $790 billion reconciliation bill after removal of the carried interest provision—subject to the Senate Parliamentarian’s review of the revised bill.
- Yesterday, Senate Majority Leader Chuck Schumer (D-NY) announced that the chamber will begin consideration of the bill on Aug. 6, setting up a weekend process of around-the-clock votes on hundreds of amendments to the bill.
- Real Estate Roundtable President and CEO Jeffrey DeBoer commented today, “The wide-ranging climate measures in the revised bill include the most extensive clean energy investments ever considered by Congress—a positive step welcomed by the real estate industry. We are also pleased to see that carried interest provisions in the original version of the Inflation Reduction Act are out, since they would have clearly harmed the residential and commercial real estate industries, job creation and the economy.”
Real Estate’s Carried Interest Opposition
- The real estate coalition urged policymakers to preserve current carried interest law and detailed major concerns with the proposed changes to carried interest that were in the original IRA, brokered last week between Sens. Schumer and Joe Manchin (D-WV). (Coalition letter, Aug. 3 and Roundtable Weekly, July 29)
- The Aug. 3 coalition letter noted, “The carried interest proposal would slow housing production, discourage the capital needed to reimagine buildings to meet post-pandemic business needs, hamper job creation and create an additional unknown in an already confusing economic environment.”
- The real estate coalition letter concluded, “Now is not the time to impose a tax increase on the countless Americans who use partnerships to develop, own, and operate housing and other commercial real estate. We urge you to preserve current tax law as it relates to carried interest.”
Senate Considers Changes
- Senate Democrats are making additional changes to the package, including adjusting the minimum tax on corporations and adding a 1% excise tax on stock buybacks. (New York Times, Aug. 4 and Punchbowl News, Aug. 5)
- Before a final Senate vote can be held, the Senate Parliamentarian must ensure the bill complies with special budget reconciliation rules, which require provisions directly relate to spending and revenue—not policy.
- One hurdle before the Parliamentarian is a clean energy tax credit that proposes a bonus incentive to developers who pay prevailing wages on certain projects. If it is determined to be a policy change, it will be dropped from the bill. (POLITICO Power Switch, Aug. 3)
- A number of the IRA’s proposed revisions to the federal tax code could leverage greater private sector investments in clean energy building technologies, including:
- A deduction to help make commercial and multifamily buildings more energy efficient (Section 179D),
- A credit to encourage investments in renewable energy generation and other low carbon equipment such as solar panels, energy storage, and combined heat and power systems (Section 48), and
- A credit to incentivize installations of EV charging stations (Section 30C).
The Roundtable continues to work with its policy advisory committees and national real estate organization partners to assess how details in the bill language could impact CRE. These policies will be a focus of discussion during The Roundtable’s Sept. 20-21 Fall Meeting in Washington, DC.
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An unexpected agreement announced Wednesday night between Senate Majority Leader Chuck Schumer (D-NY), above right, and Sen. Joe Manchin (D-WV), left, on a $790 billion reconciliation proposal includes $14 billion in increased taxes on carried interest and a 15% corporate minimum tax—in addition to $369 billion in climate spending that affects “clean energy” measures important to commercial real estate.
Senate Democrats are hoping to pass some version of the Schumer-Manchin language on a party-line vote before the upper chamber begins its summer recess on Aug. 8. (Senate Democrats’ joint statement and one-page bill summary, July 27 | Committee for a Responsible Federal Budget, July 28)
- Today, The Real Estate Roundtable held an all-member virtual town hall to discuss major provisions within the 725-page Inflation Reduction Act (IRA) of 2022. The Roundtable is working with its policy advisory committees and national real estate organization partners to assess how details in the bill language could impact CRE.
- Real Estate Roundtable President Jeffrey DeBoer stated, “The Roundtable is engaged with policymakers and Capitol Hill staff on the potential impact of the proposed bill on real estate capital formation, economic growth, clean energy investments, and affordable housing development. The industry is working together to mitigate any negative consequences for CRE before policymakers hold an eventual vote on a final bill.”
Taxes & Clean Energy
- The IRA’s largest tax increase is a new 15% corporate minimum tax on businesses with profits over $1B whose reported book income exceeds reported taxable income. The measure is estimated to raise $313B. The package also includes protections that would preserve the value of the low-income housing tax credit for investors (typically large banks) that use the credit to reduce their effective tax rate.
- The smallest tax increase would raise $14B in revenue by extending the capital gains holding period requirement for carried interest from 3 years to 5 years, although there is an exemption for real estate. Additionally, there are technical reforms to the holding period rules for measuring the 3- or 5-year holding period. (Deloitte Tax News & Views, July 29)
- The carried interest holding period change includes a real estate exception for gain associated with assets used in a real property trade or business. The language in the IRA on carried interest is identical to text in the House Ways and Means Committee’s previous reconciliation bill last year—language that was dropped from the version that passed the full House. (Roundtable Weekly, Sept. 17, 2021)
- The Schumer-Manchin agreement also proposes significant reforms to Section 179D—the tax code’s main provision to incentivize energy efficient commercial buildings. The 179D reforms are geared to encourage more existing building “retrofits” although maximum incentives amounts depend on compliance with heightened wage and labor standards.
- Tax incentives are also included to encourage investments in solar panels, energy storage, and EV charging stations. (See Summary of the bill’s Energy Security and Climate Change Investments)
- There are several challenges to the Senate Democrats’ timeline for passage of the bill in early August.
- Senate Democrats need all 50 members of their caucus present for an eventual budget reconciliation vote, along with Vice President Kamala Harris to break an anticipated tie with 50 Republicans. Yet Covid-19 infections have caused recent absences. (The Hill, July 28)
- The bill was sent to Senate Parliamentarian Elizabeth MacDonough to see if it conforms with reconciliation budget rules, a process that will spill over into next week. (BGov, July 29)
- Arizona Democratic Senator Kyrsten Sinema is a key centrist vote, considering she has long opposed changes to the taxation of carried interest. Sinema’s spokesperson Hannah Hurley said yesterday that the Senator is “reviewing the text and will need to review what comes out of the parliamentarian process.” (BGov, July 29)
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Legislators in both the Senate and House this week continued to work on stand-alone bills designed to lower U.S. energy consumption and reduce the risks posed by GHG emissions, in tandem with the administration’s emphasis on climate change and building “retrofits” through the comprehensive American Jobs Plan proposal. (Roundtable Weekly, May 28 and June 11)
Senate: The INSULATE Buildings Act
- A bipartisan bill introduced by Sens. Joe Manchin (D-WV) and Lisa Murkowski (R-AK) on June 15 would seek to improve the energy efficiency of buildings and homes by providing financial resources to state-level energy agencies.
- The INSULATE Buildings Act (summary) would establish a new U.S. Department of Energy “revolving loan program.” State agencies would then use these federal proceeds to distribute loans and grants to eligible businesses and homeowners to upgrade and retrofit to commercial and residential buildings.
- The program would also seek to provide states that have the poorest efficiency in their commercial and residential building stock with additional aid. States could also use up to 25% of their capitalization grant to provide direct grants to small businesses and low-income homeowners.
- Manchin, who chairs the Senate Energy and Natural Resources Committee, remarked that his INSULATE Buildings Act “provides a significant opportunity to improve energy efficiency and reduce energy consumption in buildings.” (News release, June 15)
Davis-Bacon Wage Requirements
- Both the Manchin-Murkowski bill and a recent Senate Finance Committee energy tax incentives bill would require construction projects receiving federal financial support through these measures to comply with “Davis-Bacon” prevailing wage standards. (Roundtable Weekly, May 28)
- The Finance Committee, chaired by Ron Wyden (D-OR), in May advanced an improved energy efficiency tax deduction for commercial buildings (Section 179D) that would make the incentive more usable for “retrofits” of older buildings, multifamily structures, and REITs. (Clean Energy for America Act (S. 1298), mark-up video and supporting documents)
- A May 26 Roundtable letter opposed new prevailing wage mandates proposed by the Senate committee bill. The letter warned that the excessive costs from Davis-Bacon compliance will greatly exceed the amount of any tax deduction that Section 179D might provide to incentivize an energy efficient construction project.
House: Climate Risk Disclosures
- The House on June 16 passed the Corporate Governance Improvement and Investor Protection Act (H.R. 1187) on a partisan vote, which incorporated the texts of several bills with support from the White House.
- Among its provisions, the Act would require companies to disclose greenhouse gas emissions and describe their climate risk mitigation strategies. It would also direct the Securities and Exchange Commission (SEC) to issue specific rules within two years that address the disclosures. (House Financial Services Committee summary and section-by-section overview)
- At the regulatory level, The Real Estate Roundtable on June 9 commented to the SEC on the unique challenges facing commercial real estate businesses if the Commission eventually requires corporate issuers to report on climate-related financial risks. (Roundtable Weekly, June 11).
- The bill would also require disclosures to the SEC on matters relating to companies’ political action contributions, lobbying efforts, executive compensation and pay raises, and offshore tax havens.
The measure barely passed the House with only Democrats showing support on a 215-214 vote, indicating that the prospects for passage in the Senate are slim.
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The Biden Administration plans to push for a large-scale infrastructure initiative that takes into account the effects of climate change after Congress finishes consideration of the pandemic relief package. Meanwhile, federal regulators and Congress are preparing to examine the threat that climate change poses to the nation’s electric infrastructure in the wake of last week’s deadly freeze in Texas that stranded millions without power. (Wall Street Journal and Reuters, Feb. 22)
- The Biden Administration is expected to reveal details of its infrastructure package soon, as part of its “Build Back Better” agenda to spur economic recovery. (Roundtable Weekly, Feb. 19)
- The rolling power outages across Texas and the Midwest due to severe winter storms prompted the Federal Energy Regulatory Commission (FERC) this week to open a proceeding to examine how electric grid operators prepare for and respond to extreme weather events. (FERC news release and FERC Insight, Feb. 2021)
- FERC Chairman Richard Glick said, “The effects of climate change are already apparent and we must do everything we can within our statutory authority to ensure that the electric grid is capable of keeping the lights on in the face of extreme weather.”
- The Texas power outages have increased scrutiny in Congress on the need for investments in the nation’s electric grid. House Speaker Nancy Pelosi (D-CA) referred to the blackouts when she announced that the House Energy Committee will be investigating the matter. (Axios, Feb. 19)
- In the Senate, Energy Committee Chairman Joe Manchin (R-WV) told Politico Pro that he is planning his own review of the power grid issue. (Politico, Feb. 19)
- The question of how to fund a national infrastructure effort remains the major challenge for Washington policymakers. ( Roundtable Weekly, Feb. 12) Senate Environment and Public Works Committee Chairman Tom Carper (D-DE) suggested at a hearing yesterday that a national pilot program should explore a “vehicle miles travelled” tax, while Manchin separately stated that the gas tax paid by consumers at the pump “is not going to do what we need” to build and modernize roads, bridges, and mass transit. (NATSO, Feb. 25)
- The Roundtable and the Build by the 4th coalition is encouraging Congress to pass a comprehensive infrastructure package by Independence Day 2021. Last December it also provided recommendations to the new Administration that included infrastructure funding and modernization as engines to drive recovery and job growth from the economic fallout of the COVID-19 pandemic.
Construction Industry’s Role
- The leadership role that the construction industry could take in sustainable development was the focus of a Feb. 7 op-ed in Crain’s New York Business by Suffolk’s Executive President of Business Development, Ann Klee. (Suffolk’s Chairman and Executive Officer John Fish is the Chair-Elect of The Real Estate Roundtable)
- “The construction industry can be part of the solution by working with developers and owners to reimagine the entire building lifecycle and ensure sustainability is incorporated at every stage of the process, from planning, design and material selection to building operation and energy efficiency after construction completion,” the op-ed states.
- Other recommendations include more efficient management of the consumer supply chain; just-in-time delivery of materials to project sites; and minimizing construction waste.
Ms. Klee concludes that sustainable development will require “smart planning, flawless execution and education across the spectrum of stakeholders to ensure these best practices pay significant dividends, both socially and financially, in the long term.”
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The Environmental Protection Agency (EPA) on Oct. 13 launched its voluntary “ENERGY STAR Tenant Space” labeling program to recognize tenants who collaborate with their landlords on design and construction of high performance leased office spaces. (Download EPA’s Oct. 15 webinar slides – How to Apply for ENERGY STAR Tenant Space Recognition.)
- EPA’s new certification for office tenants is now a permanent ENERGY STAR program offering, to complement the agency’s popular “whole building” label. The ENERGY STAR label is a key marketplace influence to signal energy efficient assets, impacting nearly 35,000 buildings and plants nationwide that represent more than 5 billion square feet of commercial space. (ENERGY STAR Facts and Stats)
- “ENERGY STAR Tenant Space” recognition requires office tenants to estimate their suites’ energy use, separately meter their spaces, use efficient office equipment, and share energy usage data with their landlords. (See EPA’s guide, “How to Prepare for Tenant Space Recognition.”)
- EPA will also offer access to a new online tool for estimating lighting energy usage within its commonly used Portfolio Manager benchmarking platform. Use of this new lighting assessment function, and requiring an office suite to meet a lighting efficiency “target,” will be a prerequisite for the voluntary Tenant Space label.
- The Tenant Space label is currently available to office tenants. EPA explained to SPAC members that it intends to expand the program to provide recognition opportunities to retail and warehouse tenants in the coming months.
- ENERGY STAR building ratings and the corollary Tenant Space program were part of a discussion held October 1 at The Real Estate Roundtable’s offices in Washington, D.C., between EPA Administrator Andrew Wheeler and Roundtable President and CEO Jeffrey DeBoer.
- In a video of the discussion, Wheeler stated he is a “strong” ENERGY STAR proponent and that the agency’s expansion of the label to cover tenant spaces was “the right thing to do.” Wheeler also emphasized these platforms must remain voluntary to encourage additional private-sector technological innovations in buildings and manufacturing. (See video at 12:40 and Roundtable Weekly, Oct. 2)
EPA’s tenant recognition efforts are authorized by the so-called “Tenant Star” law, passed by Congress in 2015 with The Roundtable’s strong backing. (Commercial Property Executive, May 4, 2015)
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The U.S. Environmental Protection Agency (EPA) announced ENERGY STAR program guidance this week to reflect changes in building operations due to the COVID-19 pandemic. The guidance was developed after EPA sought input from The Roundtable’s Sustainability Policy Committee Advisory Committee (SPAC).
- The EPA guidance – “Has COVID-19 affected ENERGY STAR certification?” – impacts real estate industry practices regarding the web-based “Portfolio Manager” tool used by more than 450,000 properties (or nearly 45% of U.S. commercial building space) to measure, benchmark, and track energy, water, and waste management in buildings. “Portfolio Manager” is a voluntary platform at the federal level for private sector buildings although a number of state and local laws mandate its use in major markets.
- EPA explained that building owners and managers should update Portfolio Manager “use details” to reflect changes in occupancy and operations that may have occurred since the start of the pandemic – for both the numbers of workers in a building and the asset’s weekly operating hours. (Point #1 in EPA’s guidance) The agency also provided practical instructions on how to update such “worker numbers” and “hours of operation” details in the Portfolio Manager tool.
- When merged with data on a building’s actual energy consumption, these “use details” are key variables to determine a 1-100 ENERGY STAR rating that allow investors, tenants, regulators, and other audiences to assess an asset’s energy performance compared to like-kind buildings.
- EPA staff sought input on these matters at SPAC’s “virtual meeting” on June 12, which was held in conjunction with The Roundtable’s remote Annual Meeting (Roundtable Weekly, June 12). SPAC members were surveyed for their recommendations about how ENERGY STAR should address changes in building operations during the pandemic. The committee’s preferred option is now reflected in EPA’s latest guidance.
- EPA plans to issue additional guidance (expected in September) to advise owners and managers on how to apply for ENERGY STAR certifications that may be awarded to buildings in 2020. (Point #3 in EPA’s guidance) The key clarification in this week’s announcement is that updating “use detail” data to reflect COVID-era operations is prerequisite for the ultimate ENERGY STAR “label,” which may be granted for a building that ranks “75” or higher on EPA’s scale.
- This week’s guidance is the latest example of longstanding cooperation between the ENERGY STAR program and SPAC. It follows collaborations to update the technical models that EPA currently uses to “score” buildings (Roundtable Weekly, July 19, 2019). SPAC also assisted the agency with developing the “ENERGY STAR Tenant Space” program to recognize high performance design and construction of leased office. (Roundtable Weekly, June 15, 2018)
SPAC is led by Chairman Anthony E. Malkin (Chairman, President, and CEO, Empire State Realty Trust) and Vice Chairman Daniel Egan (Senior Vice President, Energy & Sustainability, Vornado Realty Trust).
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A bipartisan, omnibus energy bill with provisions supported by The Real Estate Roundtable was prepared for debate in the Senate this week, as Republicans and Democrats negotiate a package of amendments that may be added to the base bill.
- The American Energy Innovation Act (S. 2657) – introduced on Feb. 27 by Senate Energy and Natural Resources Committee Chairman Lisa Murkowski (R-AK) and Ranking Member Joe Manchin (D-WV) [ above ] – is a compilation of more than 50 energy-related measures considered and individually reported last year. (Bill Summary and text)
- The AEIA focuses on energy efficiency, renewable energy, energy storage, carbon capture, grid modernization, and workforce development to build energy-related infrastructure.
- The bill includes language supported by The Roundtable to improve the Commercial Building Energy Consumption Survey (CBECS) process.
- AEIA Section 1001 would require Congress to oversee coordination by federal agencies to gather and report higher quality CBECS data – the only nationwide government survey that estimates the number, location, age, energy consumption and other characteristics of the U.S. commercial real estate stock.
- Significantly, CBECS data provides the underpinning for EPA’s ENERGY STAR scores – a key real estate performance “label” relied upon by building owners, investors, and tenants.
- The Senate’s AEIA bill includes other sections of interest to real estate, including authorizations for:
- a “Federal Smart Building Program” to implement and demonstrate smart building technologies across the federal real estate stock;
- a nationwide survey of “Private Sector Smart Buildings” for study and evaluation by the U. S. Energy Secretary;
- codification of the U.S. Energy Department’s “Better Buildings Challenge” – a program that has attracted Roundtable members’ participation; and
- a “CHP Technical Assistance Partnership” to provide project-specific engineering and economic assessments for combined heat and power systems.
- Thus far, Senators have filed over 185 amendments for consideration as additions to the underlying bill. Among them is one offered by Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH) to drive greater transparency and consideration of building owner costs in the process to develop model building energy codes. (Roundtable Weekly, July 19, 2019). The Roundtable has long-supported the Portman-Shaheen energy codes provisions, which Portman addressed this week on the Senate floor.
- ENR Chairman Murkowski said this week she was working on a “managers’ package” of certain, less controversial measures to be voted on in a block. “I want to have a managers’ package, but it is entirely possible — we’ve seen it before — that that opportunity is spoiled,” she said. (CQ, March 4)
If Republicans and Democrats can agree upon the AEIA amendments eligible for a vote, the Senate will be poised to pass its first major piece of energy legislation in over 12 years, according to Murkowski’s press release. The measure would then move to the House of Representatives, where the Democratic majority might append provisions that more aggressively address climate change. (Roundtable Weekly, Feb. 7, 2020)
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In the lead-up to the November elections, Democrats continued to draw attention this week on Capitol Hill to energy and climate issues, as the House Energy Subcommittee heard testimony on a number of bills to advance efficiency in buildings and modernize the nation’s electric grid. (Subcommittee hearing and memorandum, Feb 12.)
- The Subcommittee’s review included the Energy Savings and Industrial Competitiveness (ESIC) Act (H.R. 3962), long supported by The Real Estate Roundtable. The bipartisan bill is sponsored by Representatives Peter Welch (D-VT) and David McKinley (R- WV), and is the companion to a Senate version (S. 2137) championed by Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH). The Senate measure passed its committee in Sept. [Roundtable Weekly, Sept. 27]
- In The Roundtable’s Feb. 11 ESIC Act support letter to House leaders, President and CEO Jeffrey DeBoer noted that, “[t]he U.S. real estate sector has made significant strides to improve the energy efficiency and reduce the carbon footprint of America’s building infrastructure over the last decade.” He further described how H.R. 3962 would advance the industry’s energy efficiency efforts. (Roundtable House ESIC Act letter, Feb. 11)
- The ESIC Act would improve the current process to develop “model” building energy codes with new “open government” provisions. Real estate and other stakeholders would be provided a platform to comment on the federal government’s influential role in the codes process, compelling the U.S. Department of Energy (DOE) to consider cost effectiveness when the agency develops efficiency recommendations for new construction and major retrofits. DOE would also be required to assess the small business impacts of its energy code recommendations.
- The ESIC Act would further direct the U.S. Energy Information Administration (EIA) to coordinate with the Environmental Protection Agency’s ENERGY STAR program, when EIA periodically gathers significant nationwide data related to energy consumption in U.S. buildings.
- In addition, the ESIC Act includes innovative provisions – known as the SAVE Act – to assist home buyers with financing energy efficiency improvements as part of the residential mortgage underwriting process.
- Among the witnesses at the Wednesday House hearing was Lowell Ungar, senior policy advisor for the American Council for an Energy-Efficient Economy (ACEE), who testified in support of H.R. 3962. Mr. Ungar also spoke at the recent Sustainability Policy Advisory Committee (SPAC) meeting on January 29, regarding the estimated economic and environmental benefits of an accelerated depreciation tax strategy known as “E-QUIP” to motivate “retrofit” project installations of high performance HVAC, windows, lights, and other building equipment. The Roundtable and coalition partners continue to work toward introduction of an E-QUIP bill in the coming months. (E-QUIP Coalition Letter, May 8, 2019).
- The ESIC Act’s building codes provisions – allowing for consideration of financial impacts on businesses and homeowners – contrasts to a recent climate framework released by Democratic leaders.
While the parties’ respective visions on energy and climate policy are coming into sharper focus in advance of next November’s elections, prospects for passing omnibus legislation that clears both the House and Senate this year are low.
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