A procedural motion in the Senate on a House tax bill to extend renewable and energy efficiency tax incentives failed yesterday by a vote of 50-44. The cloture motion on HR 6049 to cut off unlimited debate and move toward a structured process of amendments and voting fell short of the 60 votes needed.

HR 6049 passed the House on May 21, 2008 by a vote of 263-160. The bill would extend several tax credits and deductions that are important to the HVACR industry. Also included in the bill are tax incentives for renewable energy producers, such as wind, solar, and biofuels.

Included in HR 6049 is an extension of what’s called Section 25C, the non business energy property tax credit. HVACR contractors know is as the $500 in tax credits to home owners who elect to install high efficiency appliances in their existing homes.

HR 6049 also extends the commercial building tax deduction until December 31, 2009. Extending this tax deduction would give building owners more time to make energy efficiency improvements and take advantage of the $1.80 per square tax deduction.

HR 6049 would authorize a two year extension of the 15-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant improvements Under current law, commercial HVACR equipment is considered a fixed asset with a 39-year straight line depreciation. When you consider the expected life span of a properly maintained commercial HVACR system is less than half that period, this provision gives more certainty and financial incentive to eligible business owners.

Finally, Section 405 of S. 2886 extends § 45L for one year, the homebuilders tax credit for new energy efficiency homes. Extending this tax credit helps lower the installation costs for homebuilders and creates an inventory of homes with high efficiency products and lower energy bills

Nearly all Senate Republicans voted against the bill arguing that the offsets included making it revenue neutral were unnecessary since those provisions only extended current law. Senate Finance Committee Chair Max Baucus (D-Mont.) pledged to bring the bill back to the floor again in the near future.

Both the House and Senate have passed measures to extend these tax incentives but watched as they failed in the other chamber.