States Powering New, Innovative Green Building Policy: A Review of This Year's State Activity

Jeremy Sigmon, LEED® AP BD+C
Manager, Building Codes Advocacy
U.S. Green Building Council

Despite a struggling economy that’s putting tough budget constraints on states across the nation, the green building marketplace is driving innovation and competition, creating opportunity for savings and new jobs, and – bold though it may sound – our states are working overtime to help win the future.

In a year of what feels like an unyielding stream of at least underwhelming news, there is still much to celebrate in the world of green building policymaking (note: last week’s celebration of green schools by state lawmakers). Today USGBC released a report that highlights that market-transforming policy activity, “Advancing Green Building Policy in the States: 2011 Victories from Alabama to Wyoming.” With positive policy activity in all 50 states, and countable wins in 25, here are some of this year’s superlatives:

Friend to All: Florida HB 639 and HB 7003, which add another state to the list of state housing authorities that are increasingly rewarding green building practices as part of the scoring system for competitive loans offered to affordable housing developers.

Most Popular: Oregon HB 3672, which creates tax credits for commercial construction or retrofit projects that achieve high standards for building energy efficiency and offers LEED Platinum certification as a compliance pathway.

Most School Spirit: Kansas Senate Resolution 1856. Cheer for the first LEED Gold school in the state!

Most Athletic: Oregon HB 2960, the “cool schools” bill, which will allow the state to repair and retrofit aging schools to help create jobs while enhancing student learning, reducing operational costs, and building healthy learning environments. Might the Oregon Ducks be inspiring legislators like Rep. Jules Bailey to lay up such a slam dunk?

Craziest Driver: New Mexico’s 2009 Energy Conservation Code, which, after securing top spot in 2010 as the strongest building energy code in the nation, and after thousands of dollars of code books and training, succumbed to a full-stop by Executive Order in January, a subsequent lawsuit. An apparent deal to move forward produced a series of public hearings, a June repeal of the original 2009 ECC and a then a replacement with a building energy code that’s simply par-for-the-course that will take effect in February of next year… we think.

Most Original: Connecticut HB 1243, which establishes the nation’s first state-managed “green bank” – now known as the Clean Energy Finance and Investment Authority – that will leverage government dollars to provide financing for clean energy and efficiency projects all across the state.

Most Dependable: Texas HB 51, a tried and true leadership-by-example policy that requires that public buildings and public-funded buildings or renovations of a certain size or scale (including universities) achieve certification under a high performance “building evaluation system.” The State Energy Conservation Office and the Boards of Regents of state universities will identify the systems that will satisfy compliance with the law.

Trend-Setter: California’s Green Building Standards Code, the subject of both excitement and confusion since its 2010 adoption, became effective as a mandatory minimum code for all local jurisdictions on January 1. Which state will be next to integrate green building provisions into mandatory statewide minimum codes?

Most Likely to Succeed: A 2011 report in Illinois, Moving Toward a Sustainable Future for Illinois Schools, which was developed in response to HJR 45 (2009). The 2009 legislation and the effort to develop the report was championed by the Illinois Working Group on Green Schools, and effectively establishes a plan to green every school in the state. The report details findings from the USGBC Illinois Chapter’s pilot program to support the greening of three underserved schools since 2009. Bravo!

Best Looking: New York AB 8510, which creates an on‐bill financing program that will enable property owners to access safe loans for retrofits and energy efficiency upgrades by repaying the loan with savings earned on utility bills. Utility bills never looked so nice.

Most Likely to be Published: Maryland HB 972, which enables the adoption of the International Green Construction Code (IGCC) by all local governments across the state. Which local government will be first to upgrade their base codes? With the proliferation of green building codes, where do we go next?

Most Talkative: California State Legislature, which – surprise, surprise – introduced more than 30 bills on which USGBC’s California Advocacy Committee has been active. Adding to the state’s long list of green building accomplishments, the state continues to discuss ways to break new ground.

Most Dreamy: Michigan HB 4286, a bill that has not yet passed, proposing wonderfully attractive incentives for new commercial construction or renovations that earn LEED certification.

For more information on USGBC’s advocacy and public policy work, visit www.usgbc.org/government.

New Fact Sheet: Principles for reforming the tax deduction for efficient commercial buildings to create 77,000 new jobs and slash energy bills

Lane Burt
Technical Policy Director
U.S. Green Building Council

Today USGBC released a fact sheet on the principles for reforming the existing tax deduction for energy efficient commercial buildings, Section 179D, which have united the commercial building industry and environmental advocates in their push to create jobs and slash commercial building energy consumption. These reforms could create 77,000 jobs across the US economy.

You can view the fact sheet here.

As background, 179D allows building owners to take a deduction of $1.80 per square foot of space for buildings that are constructed to be 50% better than a baseline energy code. The policy was originally passed in 2005 and is on the books until 2013, but the recession has severely decreased the number of new buildings being built, while interest in retrofits of existing buildings has skyrocketed. It is USGBC’s overarching goal to push for changes to this policy that will encourage retrofits of existing commercial and multifamily buildings.

In line with that goal, the principles are:

• Measure energy savings compared to the existing building baseline. Rather than requiring existing buildings to meet and exceed the requirements of the energy code for new construction, as is the case currently in 179D, measure improvements in how much energy consumption was reduced compared to where the building started.
• Link the amount of the incentive to energy savings achieved. Greater energy savings and deeper retrofits warrant larger incentives to reward innovation and to reflect the larger investments and greater environmental benefit. Energy savings in excess of 50% are possible, and will be encouraged by this approach.
• Tie a portion of the tax incentive to implementation of efficiency measures and a portion to demonstrated energy savings. There are good reasons to reward a building owner for implementing energy savings measures, and even better reasons to reward energy savings actually realized on the energy meter. This proposal uniquely does both and maximizes accountability by allowing the building owner to claim 60 percent of the incentive at the time the energy efficiency measures are put into service, and the remaining 40 percent of the incentive after two years of demonstrating the expected savings have occurred.

These are the same principles that garnered support from 86 diverse organizations that sent them in a letter to the US Senate in June. These are the same types of reforms that the President has identified as a priority component of the Better Buildings Initiative.

And last but not least, the fact sheet explains that these same principles could create 77,000 new jobs, according to an analysis from the Political Economy Research Institute.

Every legislative proposal has an uncertain future right now, as partisanship and rhetoric have superseded governing, but certainly we will press forward. We think that encouraging building owners to invest in their own buildings to make them more efficient, cheaper to operate, and more attractive to tenants while simultaneously creating 77,000 jobs and slashing energy consumption is something that should be considered by any member of Congress, regardless of party, that cares about our economic recovery.