The Senate recently passed the American Workers, State, and Business Relief Act of 2010, 62 to 36. The measure includes $31 billion of expired tax provisions as well as the Senate’s version of pension funding relief.

The bill is important to the construction industry and would extend the shortened 15-year depreciation period for interior improvements to restaurants and other retail and leasehold facilities. Without the extension, developers would have to write off upgrade costs over 39 years.

Concerning residential HVAC firms, key elements of the bill include extending a $2,000 tax credit for builders who construct new homes that show a 50 percent reduction in energy use, compared with homes built to earlier standards.

The bill also contains a provision that would allow state housing agencies to exchange their low-income-housing tax credits for federal grants, at a time when private-sector interest in the credits has dropped. The bill would extend property owners’ ability to “expense” the costs of cleaning up environmentally contaminated sites. The Senate bill was expected to be reconciled with an extenders bill the House passed in December. However, it now appears that the House may pass a new extenders bill after its upcoming break and will conference that bill with the Senate.

Senate introduces Building Star
Building Star Energy Efficiency Act of 2010 (S. 3079)
SMACNA has been a leading member of the Rebuilding America Coalition to retrofit 40 percent of America’s commercial and residential buildings – totaling 50 million buildings by 2020.

Our legislative efforts have focused on the commercial and industrial component of the effort. Sen Jeff Merkley (D-Ore.) introduced S. 3079, Building Star Energy Efficiency Act of 2010, on March 4 with five Democratic co-sponsors. SMACNA is working to get Republican co-sponsors on the bill as well.

The bill would authorize a rebate program for building owners installing energy-efficient equipment during 2010. It would also create new and expanded tax incentives for commercial building retrofits and would establish a low-interest financing option to small businesses and other building owners to help with the up-front cost of energy efficient building renovations. The bill is expected to create 150,000 jobs in construction, manufacturing and distribution within two years. It is anticipated building owners would save more than $3 billion on energy bills. A House companion bill should be introduced soon.

Pension temporary relief still stalled
Progress on multiemployer pension funding relief has been seriously impeded in this Congress by the slow movement of health-care reform. The committees of jurisdiction for health care are the same committees that work on pension legislation and pension relief has not been able to gain the traction needed to pass. The Senate tax extenders bill includes very limited relief, mainly offering 30-year amortization of investment losses incurred in 2008 and/or 2009. It also includes 10-year smoothing for losses, and a widening of the so-called smoothing corridor to account for fluctuating market values.

The House has not settled on a final package, but it is also likely to contain very narrow relief. It is anticipated that the House relief package will be added to a House version of tax extender legislation, which should be moving sometime in April. Differences between the House and Senate extenders package will have to be negotiated.

Although legislative action is not going to be completed by the March 30 deadline for plan certification and possibly not until after the April 30 deadline for notice of funding status to the bargaining parties. It is likely that the Congress would include retroactivity. Plans could then re-certify to take advantage of the relief provisions.

For more information on any of these issues, call SMACNA’s Capitol Hill office at (202) 547-8202.