NOT-160920-05 Part III - Administrative, Procedural, and Miscellaneous Deduction for Energy Efficient Commercial Buildings Notice 2006-52 SECTION 1. PURPOSE This notice sets forth interim guidance, pending the issuance of regulations, relating to the deduction for energy efficient commercial buildings under § 179D of the Internal Revenue Code.
respect to energy efficient commercial buildings. Section 179D(a) allows a deduction to a taxpayer for part or all of the cost of energy efficient commercial building property that the taxpayer places in service after December 31, 2005, and before January 1, 2008. (See section 2.02 of this notice.
(iii) the building envelope.
install energy efficient commercial building property on or in the same building, the aggregate amount of the § 179D deductions allowed to all such taxpayers with respect to the building shall not exceed the amount determined under section 2.02(2)(a) of this notice. .03 Partially Qualifying Property: Energy Efficient Lighting Property. (1) In General. Energy efficient lighting property is partially qualifying property, within the meaning of section 2.
(b) Interim Rule. Partially qualifying property, within the meaning of section 2.01 of this notice, is subject to the interim rule if it is not subject to the permanent rule in section 2.
notice, the deduction for the cost of the property shall not exceed the excess (if any) of— (A) the product of $0.60 and the square footage of the building, over (B) the aggregate amount of the § 179D deductions allowed with respect to energy efficient lighting property installed on or in the building for all prior taxable years. (ii) Application to Multiple Taxpayers.
(B) the aggregate amount of the § 179D deductions allowed with respect to energy efficient lighting property installed on or in the building for all prior taxable years. (ii) Applicable percentage. If the interior lighting systems of the building achieve a reduction in lighting power density of at least 40 percent, the applicable percentage for the building is 100 percent.
that satisfies both of the following conditions: (a) The property is installed as part of the heating, cooling, ventilation, and hot water systems of a building; and (b) It is certified that the heating, cooling, ventilation, and hot water systems that have been incorporated into the building, or that the taxpayer plans to incorporate into the building subsequent to the installation of such property, will reduce the total annual energy and power costs with respect to combined usage of the building’s heati
installed on or in the building for all prior taxable years. (b) Application to Multiple Taxpayers. If two or more taxpayers install energy efficient heating, cooling, ventilation, and hot water property on or in the same building, the aggregate amount of the § 179D deductions allowed to all such taxpayers with respect to the building shall not exceed the amount determined under section 2.04(2)(a) of this notice. .05 Partially Qualifying Property: Energy Efficient Building Envelope Property.
determining whether the 16⅔-percent reduction is achieved. (2) Maximum Amount of Deduction. (a) In General. The deduction for the cost of energy efficient building envelope property installed on or in a building shall not exceed the excess (if any) of-(i) the product of $0.60 and the square footage of the building, over (ii) the aggregate amount of the § 179D deductions allowed with respect to energy efficient building envelope property installed on or in the building for all prior taxable years.
includes the following computations: (1) Reference Building Energy and Power Costs equal the sum of the energy and power costs for the following components of the Reference Building: (a) Interior Lighting, (b) Heating, (c) Cooling, (d) Ventilation, and (e) Hot Water. (2) Proposed Building Energy and Power Costs equal the sum of the energy and power costs for the same components of the Proposed Building.
building performance, the Reference Building shall use the following additional requirements from the 2005 California Title 24 Nonresidential Alternative Calculation Method (ACM) Approval Manual: (1) Number of occupants, occupant sensible and latent heat loads, receptacle loads, and hot water loads from ACM Tables N2-2 for whole building values and Table N2-3 for building area values appropriate for mixed use buildings; (2) Occupancy, HVAC, fans, infiltration, hot water, lighting, and equipment schedules
been incorporated (or that the taxpayer plans to incorporate) into the taxpayer’s building but that is otherwise identical to the Reference Building. (3) Energy Efficient Heating, Cooling, Ventilation, and Hot Water Property. In computing energy and power cost savings for purposes of section 2.
retain the certification as part of the taxpayer’s records for purposes of § 1.6001-1(a) of the Income Tax Regulations. A certification will be treated as satisfying the requirements of § 179D(c)(1) if the certification contains all of the following: .01 The name, address, and telephone number of the qualified individual. .02 The address of the building to which the certification applies. .
systems that have been, or are planned to be, incorporated into the building satisfy the requirements of the interim rule of section 2.03(1)(b) of Notice 2006-52.
by the National Renewable Energy Laboratory (NREL) as Energy Savings Modeling and Inspection Guidelines for Commercial Building Federal Tax Deductions and (2) are in effect at the time the certification is given. .06 A statement that the building owner has received an explanation of the energy efficiency features of the building and its projected annual energy costs; .
tiers, and penthouses with headroom height of 7.5 feet or greater. Building square footage is measured from the exterior faces of exterior walls or from the centerline of walls separating buildings, but excludes covered walkways, open roofed-over areas, porches and similar spaces, pipe trenches, exterior terraces or steps, chimneys, roof overhangs, and similar features. .02 Building within the Scope of Standard 90.1-2001.
space multiplied by the weighted average U-factor of such adjacent surface area exceeds the space’s surface area adjoining the outdoors, unconditioned spaces, and semi-heated spaces (e.g., corridors) multiplied by the weighted average U-factor of such adjoining surface area; or (b) The air from heated or cooled spaces is intentionally transferred (naturally or mechanically) into the space at a rate exceeding 3 air changes per hour (ACH). .04 Qualified Computer Software.
(3) Has represented in writing to the taxpayer that he or she has the requisite qualifications to provide the certification required under section 4 of this notice (in the case of an individual providing the certification) or to perform the inspection and testing described in section 4.05 of this notice (in the case of an individual performing the inspection). .06 Standard 90.1-2001. ANSI/ASHRAE/IESNA Standard 90.
(3) The name, version, or other identifier of the software as it will appear on the list; (4) All test results, input files, output files, weather data, modeler reports, and the executable version of the software with which the tests were conducted; and (5) A declaration by the developer of the software, made under penalties of perjury, that-(a) The software has been tested according to the American National Standards Institute/American Society of Heating, Refrigerating and AirConditioning Engineers (ANS
(viii) Air-side and water-side economizers with integrated control; and (c) The software can-(i) Either directly determine energy and power costs or produce hourly reports of energy use by energy source suitable for determining energy and power costs separately; and (ii) Design load calculations to determine required HVAC equipment capacities and air and water flow rates. .02 Addresses.
.05 Effect of Removal from Published List. Software may not be used to calculate energy and power consumption and costs for purposes of providing a certification with respect to property placed in service after the date on which the software is removed from the published list. The removal will not affect the validity of any certification with respect to property placed in service on or before the date on which the software is removed from the published list. .06 Public Availability of Information.
certification under § 179D (section 4) and software developers seeking to have software included on the public list created by the Department of Energy (section 6). For qualified individuals providing a certification under § 179D, the likely respondents are individuals. The likely number of certifications is 20,000. The estimated burden per certification ranges from 15 to 30 minutes with an estimated average burden of 22.5 minutes. The estimated total annual reporting burden is 7,500 hours.
call).
