Tag: Climate Policy

Policymakers Considering Energy and Climate Provisions as Part of Infrastructure Package

Posted on by Trey Jackson

Congressional Committee leaders are gearing up energy and climate proposals as the Biden Administration assembles its plan for an infrastructure initiative to bolster the recovery of the pandemic-damaged economy.

What’s at Stake: 

  • The White House is considering including clean energy tax credits in a coronavirus recovery proposal, White House national climate adviser Gina McCarthy said. “You can bet tax credits are a large part of that discussion.” (BGov, March 11.)
  • The scale and scope of energy and climate measures may make it difficult to attract Republican votes in the wake of the nearly $2 trillion pandemic aid package last week that received no GOP support.  
  • Top Democratic tax writers may differ on their approach to clean energy tax incentives that aim to achieve low-and zero-carbon energy targets. (CQ, March 15)
    • Senate Finance Committee Chairman Ron Wyden’s (D-OR) is seeking to consolidate existing tax incentives.  In 2019, he proposed replacing 44 energy-related tax provisions with three credits: one for clean electricity, one for clean fuels, and one to promote greater energy efficiency. 
       
    • House Ways and Means Committee Chairman Richard Neal (D-MA) is a leading cosponsor of House Democrats’ GREEN Act, which would expand and enhance existing tax benefits for clean energy and energy efficiency.  
         
  • The Roundtable is currently working with Democratic and Republican Members of the Ways and Means Committee to update and reintroduce a bipartisan proposal, the E-QUIP Act, to encourage energy efficient retrofits of existing commercial and residential rental buildings. (Roundtable Weekly, Dec. 11, 2020).
     
  • A House Energy and Commerce (E&C) hearing on March 18 focused on the Climate Leadership and Environmental Action for our Nation’s (CLEAN) Future Act (H.R. 1512).  The CLEAN Act includes provisions affecting building energy codes, energy benchmarking, and Securities and Exchange Commission (SEC) public company reporting on climate risk. The bill is not expected to advance far in the Senate. (Roundtable Weekly, March 5).

Regulation and Federal Funding:

  • A Climate Change Disclosures Request for Information issued by the Securities and Exchange Commission (SEC) on March 15 addresses a broad range of issues and legal considerations relevant to possible mandatory SEC requirements. The RFI has a 90-day comment window. 
  • Acting SEC Chair Allison Lee addressed the RFI this week, stating the agency will commence a number of new initiatives to address “… the risks and opportunities that climate and ESG [Environmental, Social, and Corporate Governance] pose for investors, our financial system, and our economy.”
     
  • A March 17 letter led by Sen. Jeanne Shaheen (D-NH) urges President Biden to include robust federal funding for programs that promote energy efficiency as part of the administration’s upcoming budget proposal for fiscal year 2022.  Sen. Lisa Murkowski (R-AK), a member of the Senate Energy and Natural Resources Committee, is also a signatory on the letter. 
     
  • The letter states, “Increasing investment in energy efficiency programs within the Office of Energy Efficiency and Renewable Energy (EERE) at the U.S. Department of Energy (DOE) can deliver significant emissions reductions, grow jobs in the clean energy sector and provide savings to American consumers.”  The letter also notes that the pandemic and associated economic impacts have hit the energy efficiency sector especially hard, slowing progress and costing jobs, particularly for workers of color.
  • Energy efficiency employment in the United States grew by 20% – nearly three times the rate of growth in the overall economy – in the five years leading up to 2020, and energy efficiency jobs are available in nearly every county in every state, according to the National Association of State Energy Officials.  

The Real Estate Roundtable’s Sustainability Policy Advisory Committee (SPAC) continues to work with congressional policymakers, EPA and DOE on energy and climate issues of importance to commercial real estate. 

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House Democrats Introduce Sweeping Climate Legislation Including Building Codes, Benchmarking and SEC Reporting Provisions

Posted on by Trey Jackson

Capitol with evening sky
House Democrats on March 2 introduced a sprawling bill aimed at achieving net-zero greenhouse gas emissions by 2050 with provisions regarding building construction, operations, and ESG reporting. (Politico, March 3 and CQ News, Reuters, March 2)

  • The 981-page Climate Leadership and Environmental Action for our Nation’s (CLEAN) Future Act– 981-page measure is sponsored by House Energy & Commerce Committee Chairman Frank Pallone (D-NJ); Climate Change Subcommittee Chairman Paul Tonko (D-NY) and Energy Subcommittee Chairman Bobby Rush (D-IL), (BGov, March 3)
  • The House Committee noted provisions that would impact commercial and residential real estate. “The CLEAN Future Act improves the efficiency of new and existing buildings, as well as the equipment and appliances that operate within them. It establishes national energy savings targets for continued improvement of model building energy codes, leading to a requirement of zero-energy-ready buildings by 2030.” (Energy & Commerce Committee news release, March 2)
  • The CLEAN Future Act also proposes mandatory federal-level energy and water “benchmarking” requirements for buildings over 50,000 square feet. These provisions mimic dozens of existing state and local requirements that currently require building owners to track their assets’ energy and water usage and disclose this information to the public.
  • CLEAN Future Act reference:
  • The bill also directs the Securities and Exchange Commission (SEC) to require public companies to disclose in annual reports information about their “direct” and “indirect” GHG emissions, and corporate governance procedures to identify and manage climate-related risks. (Akin Gump Strauss Hauer & Feld LLP, March 3)
  • Acting SEC Chair Allison Herren Lee recently issued a Climate Change Statement explaining, “[n]ow more than ever, investors are considering climate-related issues when making their investment decisions” and that it is the SEC’s “responsibility to ensure that they have access to material information when planning for their financial future.” (SEC statement, Feb. 24  and Gibson Dunn, March 1) 

While the measure will likely face substantial challenges to attract 60 votes in the evenly divided Senate, The Roundtable’s Sustainability Policy Advisory Committee (SPAC) is conducting a detailed analysis of the CLEAN Future Act’s impacts on the real estate sector. 

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House Democrats Propose $760 Billion Infrastructure Framework as Ways and Means Committee Considers Pay-Fors

Posted on by Trey Jackson

House-Infra-framework-announcement_x475

House Democratic leaders on Jan. 29 released a five-year, $760 billion framework to improve the nation’s highways, bridges, transit and broadband as the Ways & Means (W&M) Committee held a hearing to consider how to pay for the plan. (Factsheet and Framework text)

  • The 19-page “Moving Forward Framework” was unveiled by House Speaker Nancy Pelosi (D-CA) and the chairs of three House committees – Transportation Committee Chair Peter DeFazio (D-OR), Energy Committee Chair Frank Pallone (D-NJ), and W&M Committee Chair Richard Neal (D-MA).  (Video of news conference)
  • Elements of the “Moving Forward” blueprint, estimated to create 10 million jobs, include:
    • $434 billion for highways, bridges, transit and other surface transportation – comprising the package’s financial bulk – with incentives for projects that reduce carbon pollution and improve resiliency to climate change impacts;
    • Streamlining the Transportation Department’s underwriting process for low-interest TIFIA loans;
    • Prioritizing spending from the national Highway Trust Fund (“HTF”) with a “Fix It First” strategy to repair crumbling roads and bridges ;
    • A pilot to sustain the long-term solvency of the HTF (which is frequently bailed-out by Congress) through a “vehicle miles traveled” user fee;
    • Quicker federal grant approvals for transit projects of national and regional significance, to support critical investments like the NY-NJ Gateway program;
    • Priorities for investments that help transform U.S. rail and airport networks;
    • Expansion of renewable energy infrastructure and investments to de-carbonize the electric grid; and
    • New infusions of capital for Brownfields re-development.
  • The Roundtable has long supported legislation for a comprehensive infrastructure overhaul.  It has recommended a number of measures reflected in the Democratic framework. (E.g., March 20, 2019 W&M comments; April 29, 2019 T&I comments.)
  • Projects supported by federal dollars in the “Moving Forward” plan would trigger prevailing wage requirements for laborers and contractors under Davis-Bacon standards.
  • Meanwhile, the W&M Committee held a hearing Jan. 29 on “Paving the Way for Funding and Financing Infrastructure Investments.”  The hearing explored potential funding options for a national infrastructure effort, including raising the gasoline tax; expanding tax-exempt bonds; establishing a vehicle-miles traveled user fee; and greater use of public-private partnerships (P3s).  The Congressional Budget Office reported last week that P3s have accounted for only 1 to 3 percent of spending for highway, transit, and water infrastructure since 1990.
  • Chairman Neal and Ranking Member Kevin Brady (R-TX) both endorsed an expansion of dynamic budget scoring beyond tax cuts for infrastructure investments.  In his opening statement, Neal cited tax-preferred bonds, including Build America Bonds, as an important infrastructure financing tool, while also highlighting the new markets tax credit, the low-income housing tax credit, and the historic tax credit.  Rep. Brady proposed creating Opportunity Zones for infrastructure.  (Politico, Jan. 30)

The Trump Administration and Congressional Democrats have long touted a comprehensive infrastructure package as an area for bipartisan agreement.  Senate Majority Leader Mitch McConnell recently stated that infrastructure policy could advance after the impeachment trial ends. (Roundtable Weekly, Jan. 24)

However, during this election year, prospects for a more modest infrastructure plan (compared to the expansive Democratic framework) are higher.  The current Highway Trust Fund of approximately $226 billion – the main funding source for roads, bridges and transit – is set to expire on September 30, 2020.  Shoring-up the HTF is expected to be the main focus of Congress and stakeholders for the rest of FY 2020.  (Roundtable Weekly, Oct. 4)  

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Roundtable Submits Comments to House Climate Crisis Committee; House Democrats Unveil Green Energy Tax Draft

Posted on by Trey Jackson

Logo House Select Commtt Climate x485W edit

The Roundtable submitted energy and climate policy recommendations to the House Select Committee on the Climate Crisis on Thursday, while members of the House Ways and Means Committee unveiled a draft legislative package of more than 20 energy tax incentives – including incentives to promote commercial and residential building energy efficiency.  

The Roundtable’s climate letter submitted Nov. 21 responds to a request for information from the Select Committee. This panel has no authority to write legislation but is authorized to study climate change and issue legislative policy recommendations (expected by March 31, 2020).

In its study and review of climate policy recommendations, the Select Committee has held a series of hearings featuring various stakeholders – including one focused on “Cleaner, Stronger Buildings.”  (Roundtable Weekly, October 25, 2019) .

The Roundtable’s comments to the Select Committee highlighted the priorities advocated by its Sustainability Policy Advisory Committee (SPAC) to:       

  • Improve the model building energy codes process by enacting the Portman-Shaheen Energy Savings and Industrial Competitiveness (ESIC) Act. (Roundtable Weekly, September 27, 2019)
     
  • Enhance EPA’s voluntary ENERGY STAR incentive programs for both commercial buildings and tenants.
  • Improve the quality and reliability of the national data collected by the federal Commercial Building Energy Consumption Survey.
  • Create meaningful accelerated depreciation periods to encourage investments in high performance equipment to retrofit existing commercial and multifamily buildings. (Roundtable Weekly, May 10, 2019)
  • Foster public-private partnerships to finance safety and resiliency improvements to the electricity grid, the natural gas pipeline network, and other energy infrastructure assets.

Meanwhile, a discussion draft of the Growing Renewable Energy and Efficiency Now (GREEN) Act was released Nov. 19 by the chairman of the House Ways and Means Subcommittee on Select Revenue Measures – Rep. Mike Thompson (D-CA). 

The GREEN Act would extend and revise a number of expired tax incentives, including provisions aimed at encouraging taxpayers to improve the energy efficiency of homes and commercial buildings. Specifically, the discussion draft includes:

  • An updated and enhanced deduction for capital expenditures on energy-efficient commercial building property (section 179D)
  • An expanded tax credit for the developers of new, energy-efficient homes (section 45L)
  • A modified tax credit for energy-efficient improvements to existing homes (section 25C)

Under the bill, the revised tax incentives would be available through 2024. Following release of the draft legislation, House Ways and Means Committee Chairman Richie Neal (D-MA) stated, “The climate crisis requires bold action, and I’m pleased that we’re using the legislative tools at Ways and Means’ disposal to create green jobs, reduce carbon emissions, and help heal our planet.” We look forward to hearing from stakeholders to ensure this bill is effective in helping improve energy efficiency and eliminating carbon emissions.”

Prospects for passing the GREEN Act are unclear as it is a Democratic initiative that currently lacks Republican support. 

Additionally, The Roundtable and coalition partners continue to lay the research and data foundation for a new tax incentive that would provide accelerated depreciation for high performance, HVAC, lighting, windows, and other equipment to retrofit existing commercial and multifamily buildings, known as “E-QUIP.” (See Roundtable Weekly, May 10, 2019).  The coalition’s objective is for bipartisan introduction of an E-QUIP bill in early 2020.

The Roundtable’s Tax Policy Advisory Committee (TPAC) plans to analyze the proposed measures and respond to any eventual energy tax legislation that may be introduced in the New Year.

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