March 8, 2010
Congressman Mike Honda
Fifteenth Congressional District of California
1999 S. Bascom Ave., Ste 815
Campbell, CA 95008
RE: H.R. 426, Green Roofing Energy Efficiency Tax Act (GREETA)
Dear Mr. Honda,
H.R. 426 is just one bill in a series of many introduced since the 108th Congress. Originally titled "Realistic Roofing Tax Treatment Act of 2003" the "Green Roofing Energy Efficiency Tax Act" continues congressional attempts to address a disparity in depreciation of non-residential roof systems.
Depreciation schedules that force extended recovery periods for roof systems is a tragedy to investors who range from individual property owners to professional REITs. The life-cycle distinction made by congress who enact law is far removed from the reality of Real Property investments.
Current tax laws suggest a roof system will last nearly forty years and therefore should be depreciated over a term less than half the national average roof system life-cycle of seventeen and a half years. In California, the average life-cycle of non-residential roof system assets are less than a third and can require replacement in less than ten years.
Recovery schedules penalize owners for years beyond the actual useful life of the asset and inhibit new roof system investments. Commercial Roof Systems are a short term investment relative to the entire Real Property investment.
Recover of such an investment should coincide with the Actual Life Cycle of the roof but no more than the Expected Life-Cycle of the asset. The Expected Life-Cycle of a roof system is well defined by the type and cost of the roof system further supported by the availability of a Manufactures Warranty.
CRS Roof Consultants urges Congress to introduce amendments to H.R. 426 that allows investors to define roof investment recovery specifically by the Expected Serviceable Life of the system installed. Further, CRS Roof Consultants on behalf of building owners and investors urges the 111th Congress to eliminate the wasted time and efforts of three previous congressional assemblies and six previous bill introductions. Vote and approve H.R. 426 in 2010 retroactively effective to 2003.
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