CNAIMA Urges Leaders to Embrace Energy Extenders

CNAIMA CEO and President Kate Offringa is urging the Congressional leadership of both parties to make the renewal of energy efficiency tax incentives an integral part of any tax package that emerges from the current lame duck session.

In a November 28 letter to House Speaker John Boehner (R-OH), Senate Majority Leader Harry Reid (D-NV), Congressman Dave Camp (R-MI), chairman of the House Ways and Means Committee, and Senator Max Baucus, Chairman of the Senate Finance Committee, Kate called on Congress to extend “tax credits and incentivize homeowners, builders, and business to install greater levels of insulation and other energy-saving measures.”

Kate’s letter emphasized that the two key energy efficiency tax provisions are 25C – the home retrofit credit – and 45L – the energy-efficient new home credit.

“Unfortunately, both provisions expired at the end of last year,” she pointed out.  The tax extender legislation passed by the Senate Finance Committee this summer retroactively revives both of these critical credits, but no further action has yet taken place in the House or the Senate.  The insulation industry strongly urges Congress to extend both 25C and 45L as part of larger tax legislation before the end of 2012.

“Congress must seize this opportunity now, during the lame duck, to spur jobs, save on utility costs, and strengthen America’s commitment to energy independence.  Every day that passes without these tax incentives in place is another day that construction and renovation jobs aren’t being created, that energy isn’t being saved, and that the environment isn’t being helped.  Tens of thousands of construction and retrofitting jobs around the country depend on the revival of 25C and 45L,” she wrote.

Kate’s letter stressed that Section 45L provides a credit for construction of energy-efficient new home homes.  This tax credit has effectively lowered energy costs for American homeowners, putting more money into local economies and making homeownership more affordable.

“The number of energy-efficient new homes built each year has increased eleven fold since the inception of 45L,” she stated.

Her letter concluded: “To establish a foundation for long-term economic growth, we must pursue policies, including tax policies, which will stimulate investment, create jobs and enhance America’s energy independence.  The 25C and 45L tax credits are prime examples of legislation that move us toward those important goals and should be revived before the end of 2012.”

In the longer term, the fate of tax extenders is unclear.  There are dozens of provisions, including energy provisions beyond 25C and 45L, such as 179D (the commercial property energy efficiency deduction), that also would require congressional action to extend in the next several years.  There was considerable sentiment in 2012 to eliminate all of these provisions in return for a lower corporate tax rate across the board, but budgetary concerns and election results seem to have dimmed prospects for such a move.  Still, there is concern about the ad hoc nature of tax extenders and there is considerable support for thinning the list of tax extenders – perhaps making some permanent and eliminating others for budget savings.  The post-fiscal cliff future of tax extenders will surely be an issue in 2013.  CNAIMA will remain engaged on behalf of the energy efficiency extenders that deemed by members important to the industry.

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