The Federal Commercial Building Energy Efficiency Tax Deductions permitted by Energy Policy Act of 2005 (EPAct), as amended, and as codified in Title 26 United States Code Section 179D ("Section 179D")

Section 179D provides that a commercial-building owner is eligible for an income tax deduction for any of the following energy efficient improvements: (1) qualifying interior lighting systems, (2) HVAC and hot-water systems, and/or (3) building envelope systems that satisfy certain energy-efficiency requirements. Because government entities, such as LAUSD, are tax-exempt, they cannot take direct advantage of this deduction. They can, however, take indirect advantage of the deduction by allocating it to the tax-paying designer of an energy-efficient system and sharing the resulting tax savings, which apply to the taxable year in which the system was placed in service. LAUSD's policy, therefore, is to implement this method of realizing the benefits of Section 179D by incorporating Section 179D Language into its bids, RFP documents, and contracts to invite architects, engineers, environmental consultants, energy services providers, and other contractors who may be involved in the creation of technical specifications for energy-efficient building systems to apply for the foregoing income tax deductions and sharing that benefit with LAUSD.