IF YOU DO NOT MAKE RULE OF LAW THE TOP ISSUE IN VOTING FOR A CANDIDATE YOU WILL SEE MORE AND MORE CORRUPTION AND CRIME TAKING BOTH GOVERNMENT MONEY AND OUR MONEY!!!!!!
THIS IS THIRD WORLD JUSTICE PEOPLE!!!!
DOES A MOVEMENT LIKE ZEITGEIST PROMOTING ENVIRONMENTAL STEWARDSHIP REALLY ALLOW THE INDUSTRY PROMOTING IT TO REMAIN RIFE WITH FRAUD?
We all know sustainability is a good policy. We all know we live at a time where corporate fraud is systemic and that this fraud is always rapped in the cloak of do-gooding. Some good will come from this green movement but sadly most of the money is already going into the pockets of these same developers and investment bankers. Anyone who looks for a new home may look at a 'green home' for value. It costs more in many cases but you get the money returned in savings over years. Here is the problem.....the builder received all kinds of tax breaks and grant incentives to build green, from building supplies, to buying the land, to rehabbing homes in blighted neighborhoods where the property was literally given to them, to the very investment in building green. EVERY SINGLE STEP IN THE GREEN PROCESS IS HEAVILY SUBSIDIZED AND THE END PRODUCT ALWAYS COSTS THE CONSUMER MORE.
Do you think a builder would build green without the incentives? Most people who can afford to buy houses know buying green is good and want to buy green. So why do you have to subsidize the industry in order to get them to build green? YOU DON'T.....THEY JUST DO IT AS A GIVE-AWAY. What about these new b-corporations that are businesses built on the policy of being green and getting to write it off their taxes. If the new economy is all about greening do you need to give tax credits to companies simply for working on green issues? NO, IT IS SIMPLY ANOTHER WAY TO END CORPORATE TAXATION. The entire green industry is self-built to move massive amounts of public money through fraud to corporations. SOUND FAMILIAR?
Below you will see some of what has been existing for years with no attempts by justice to staunch the crime. Even the agency charged with monitoring and providing BEST PRACTICES in the Green Industry has been sited time and again for lack of oversight and duplicity in fraud. This is LEEDS Leadership in Energy and Environmental Design. I have read for years how LEED buildings were found to be less than environmental and failing certification specs time and again. It operates just like the financial regulators who worked with the banks to commit the fraud.
WE ARE ONCE AGAIN LOSING MOST OF THE PUBLIC MONEY INVESTED INTO WHAT SHOULD BE A GREAT PUBLIC POLICY TO FRAUD!!!!
THIS IS HAPPENING BECAUSE WE HAVE THIRD WAY CORPORATE POLITICIANS WORKING FOR CORPORATE WEALTH HEADING THE DEMOCRATIC PARTY.
RUN AND VOTE FOR LABOR AND JUSTICE CANDIDATES NEXT ELECTIONS!!!!!
Leadership in Energy and Environmental Design
From Wikipedia, (February 2013)
Receiving a Gold LEED rating in September 2011, the Empire State Building is the tallest and largest LEED certified building in the United States and Western Hemisphere.[1] The Gold and Platinum rating of David L. Lawrence Convention Center in Pittsburgh, is the first and only convention center in the world to have such certifications.[2] 1225 Connecticut Avenue in Washington, D.C., is the first redeveloped office building on the U.S. East Coast to receive LEED Platinum status.[3] Phipps Conservatory & Botanical Gardens in Pittsburgh has multiple LEED certifications, including the world's only Platinum-certified greenhouse[4] and a Platinum-certified and net-zero energy Center for Sustainable Landscapes.[5] The University of Texas at Dallas Student Services Building is the first academic building in Texas to receive LEED Platinum status.[6] Shearer's Foods plant in Massillon, Ohio is the first food manufacturing plant to receive LEED Platinum status.[7] Leadership in Energy and Environmental Design (LEED) consists of a suite of rating systems for the design, construction and operation of high performance green buildings, homes and neighborhoods.
Developed by the U.S. Green Building Council (USGBC), and spearheaded by Robert K. Watson, Founding Chairman LEED Steering Committee from 1995 until 2006, LEED is intended to provide building owners and operators a concise framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions.
Since its inception in 1998, the U.S. Green Building Council[8] has grown to encompass more than 7,000 projects in the United States and 30 countries, covering over 1.501 billion square feet (140 km²) of development area.[9] The hallmark of LEED is that it is an open and transparent process where the technical criteria proposed by USGBC members are publicly reviewed for approval by the almost 20,000 member organizations that currently constitute the USGBC.
The Green Building Certification Institute (GBCI) was established by USGBC to provide a series of exams to allow individuals to become accredited for their knowledge of the LEED rating system. This is recognized through either the LEED Accredited Professional (LEED AP) or LEED Green Associate[10] (LEED Green Assoc.) designation. In 2011 GBCI named the organization's first class of LEED Fellows, the highest designation for LEED professionals. GBCI also provides third-party certification for projects pursuing LEED.
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We see fraud in how taxes are paid and grants and credits are requested. We see fraud in builders selling homes as green when they aren't. We see fraud in business start-ups that go nowhere and are found not to have a viable business plan. We see securities fraud over green and corporate tax loopholes made just for phony-green. THIS IS YET ANOTHER TRILLION DOLLAR INDUSTRY IN FRAUD ALL BY THE SAME PEOPLE ENRICHED FROM THE LAST FRAUDS THAT WENT UNACCOUNTED.
Green Product Fraud: Buyer Beware Real Estate News | Dec 3, 2008 | By: Audie Chamberlain | Prev | Next
Going green is good for the planet and can be good for your pocket book too. However, beware of businesses ready to take advantage of your new Earth-centric enthusiasm. Green-washing describes this practice and Jim Walker describes the warning signs of a fraudulent green product. Having a hard time being festive and energy conscious? Cut back on your holiday electric bill with a green tip from Marti Boetthcher.
Beware of Green-washing
By Jim Walker III
“Despite the U.S. governments efforts to provide guidelines for green produce marketing, the practice of Greenwashing, or the falsely promoting or exaggerating the greenness of a product or service, is not unusual. In making the determination as to the claim to be green, one can ask the following questions to help detect potential greenwashing situations.”
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ENVIRONMENTAL BUILDING NEWS
October 14, 2010
USGBC, LEED Targeted by Class-Action Suit
Henry Gifford, whose lawyer filed a class-action lawsuit against USGBC, has been an outspoken LEED critic since 2008.
The U.S. Green Building Council (USGBC) and its founders have been named as defendants in a class action lawsuit filed in federal court. Filed on behalf of mechanical systems designer Henry Gifford, owner of Gifford Fuel Saving, the lawsuit was stamped on October 8, 2010 at the U.S. District Court for the Southern District of New York. Among other allegations, the suit argues that USGBC is fraudulently misleading consumers and fraudulently misrepresenting energy performance of buildings certified under its LEED rating systems, and that LEED is harming the environment by leading consumers away from using proven energy-saving strategies. Alleged fraud and deceptive practices The suit alleges that USGBC’s claim that it verifies efficient design and construction is “false and intended to mislead the consumer and monopolize the market for energy-efficient building design.” To support this allegation Gifford relies heavily on his critique of a 2008 study from New Buildings Institute (NBI) and USGBC that is, to date, the most comprehensive look at the actual energy performance of buildings certified under LEED for New Construction and Major Renovations (LEED-NC). While the NBI study makes the case that LEED buildings are, on average, 25%–30% more efficient than the national average, Gifford published his own analysis in 2008 concluding that LEED buildings are, on average, 29% less efficient. A subsequent analysis of the NBI data by National Research Council Canada supported NBI’s findings, if not its methods. (Commentary questioning the respective statistical approaches of both the original study and Gifford’s analysis appears in this BuildingGreen.com blog post by Nadav Malin, president of EBN’s publisher BuildingGreen.) Using that study and USGBC’s promotion of it, the suit alleges fraud under the Sherman Anti-Trust Act, among other statutes. Gifford’s suit demands that USGBC cease deceptive practices and pay $100 million in compensation to victims, in addition to legal fees. Under the Lanham Act, the suit repeats the same concerns in alleging deceptive marketing and unfair competition. Other allegations include deceptive business practices and false advertising under New York State law, as well as wire fraud and unjust enrichment. Class-action suit By having his lawyer, Norah Hart of Treuhaft and Zakarin, file a class-action lawsuit, Gifford is not only claiming that he has been harmed by USGBC, but that he is one of a class of plaintiffs that have been harmed. According to the suit, those plaintiffs include owners who paid for LEED certification on false premises, professionals like Gifford whose livelihoods have allegedly been harmed by LEED, and taxpayers whose money has subsidized LEED buildings. The class action approach may be technically difficult to pursue in this case, says lawyer Shari Shapiro in an article on her green building law blog. Among other things, Shapiro notes that in a class action suit it is relevant whether, among other things, “the plaintiffs are enough alike so that their claims can be adjudicated together” and “whether the lead plaintiffs adequately represent members of the class.” Given the variety of plaintiffs Gifford is trying to represent, that may be hard, she says. Shapiro, assuming that Gifford has benefited from the green building wave, even questions whether Gifford has even been harmed, as he would have to be to take part in the lawsuit. However, Gifford told EBN that there’s no question about that. “Nobody hires me to fix their buildings,” he said. Though not an engineer, Gifford is respected in energy efficiency circles for his technical knowledge. He told EBN that he has lost out because owners are fixated on earning LEED points, and he doesn’t participate: “Unless you’re a LEED AP you're not going to get work.” That’s unfair, he claims, because while USGBC says that its product saves energy, it doesn’t. Gifford says that his services actually save energy, and he’s prepared to prove it by sharing energy bills from buildings he has worked on. Whether many other building professionals feel the way Gifford does, and whether they’re willing to go on the record, will be one aspect of this case to watch. Gifford indicated that the response so far has been mixed. As he told EBN, “Everybody has the same response: thank you, thank you… let me know how it goes.” Was there fraud? If the case does move ahead, Stephen Del Percio, a lawyer and author of the blog GreenRealEstateLaw.com, told EBN that it will be challenging to litigate. “You can’t prove fraud just by circumstantial evidence,” he said. Even if the NBI study is false, that may not be enough. “You have to intend to mislead people,” he said. Gifford told EBN that he doesn’t have evidence that anyone at USGBC tried to mislead the public, but if the suit proceeds the discovery process could, in theory, turn up emails or other communications that support Gifford’s case. USGBC performance initatives Gifford’s complaints focus on the 2008 study and how USGBC publicized it, but they don’t appear to account for other aspects of LEED. Gifford focuses on buildings certified under LEED for New Construction (LEED-NC), but the scope of LEED-NC and other LEED rating systems is clearly distinct. LEED for Existing Buildings, launched in 2004, looks at actual building performance, and in 2006, USGBC announced that buildings certified under LEED-NC would have the option of being enrolled at no charge in LEED for Existing Buildings. In 2007 USGBC launched LEED for Homes. While that system focuses on design and construction of new homes, it requires on-site verification including blower-door testing during construction, helping ensure that construction practices follow the design intent. Although this final piece may be too late for Gifford and the contentions of his lawsuit, in 2009 USGBC began requiring reporting of energy and water data for new buildings certified under the newer LEED 2009, and it set up infrastructure to invite sharing of information from all LEED-certified buildings (see “USGBC Expands Data Collection from LEED Buildings,” EBN Aug. 2010). Through this effort, the Building Performance Partnership, USGBC hopes to offer special help to LEED-certified buildings that are not living up to expected performance, according to Brendan Owens, P.E., vice president for LEED technical development at USGBC. Although USGBC has generally played down the possibility because it doesn’t want to discourage participation in LEED, and energy reporting, CEO Rick Fedrizzi has suggested that non-performing buildings may lose LEED certification in one form or another. Despite these efforts, Gifford complained to EBN that “the green label gives the designer, the developer, the contractor and the owner the right to hold a press conference staying that their building is energy-efficient, while the LEED system guarantees anonymity” when it comes to reporting actual energy use. Why sue? Asked by EBN why he was motivated to go to court, Gifford said, “I’m afraid that in a few years somebody really evil will publicize the fact that green buildings don't save energy and argue that the only solution [to resource constraints] is more guns to shoot at the people who have oil underneath their sand.” In other words, he says he's hoping to make the green building movement more honest so that it’s not embarrassed down the road. USGBC told EBN that it was reviewing the litigation and would respond in due course. In addition to USGBC, other named defendants are David Gottfried, a USGBC founder; Rob Watson, who helped start LEED in the 1990s while working for the Natural Resources Defense Council; and Rick Fedrizzi, a co-founder and currently CEO. Responding to EBN’s request for comment, Watson said, “I can’t comment on ongoing litigation except to say that USGBC is examining the complaint. USGBC has confidence in LEED and in our role in stimulating positive market change.” Michael Italiano, the only key USGBC founder not named as a defendant, told EBN that while he hadn’t reviewed the case, “To me it sounds frivolous and it doesn’t have much chance.” He noted, “LEED doesn't guarantee anything, and I think LEED gives people the tools to understand that.” Owners who want to verify performance can enroll in LEED for Existing Buildings, monitor their energy bills, and take other actions, he noted. A lawyer and currently CEO of Market Transformation to Sustainability, a nonprofit behind green standards, Italiano said that lawsuits targeting standards that have allegedly constrained trade typically focus on lack of a bona fide consensus process of standard-setting. In the case of LEED, he said, a broad array of stakeholders has been involved in writing and reviewing LEED standards. Russell Perry, FAIA, of SmithGroup, agreed that if anyone thinks LEED for New Construction guarantees higher energy performance, they have the wrong idea. “LEED-NC is saying that a building has been designed to meet a certain standard, but there are many variables that go into the actual performance, only one of which is design.” Perry also noted that LEED includes a broad array of topics, only one of which is energy. Referring to climate change and other environmental and health issues, Perry added, “I don’t think that this kind of distraction helps us move the ball down the field.” – Tristan Roberts
October 14, 2010
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JUST LOOK AT THE VARIETY OF TAX BREAKS AND GREENING INCENTIVES OFFERED JUST IN BALTIMORE. THERE ARE STATE AND FEDERAL BREAKS AS WELL. NOW, WE ALL KNOW THAT MARYLAND AND ESPECIALLY BALTIMORE HAS ABSOLUTELY KNOW OVERSIGHT ON ANY OF THIS AND WE KNOW THAT THE FEDERAL JUSTICE DEPARTMENT WILL TURN ITS HEAD AS WELL.
BALTIMORE'S MAYOR HAS STATED THAT MAJOR GOVERNMENT RESTRUCTURING IS NEEDED BECAUSE THE CITY IS CLOSE TO BANKRUPTCY YET THE GIVING NEVER ENDS AS REGARDS DEFRAUDING GOVERNMENT COFFERS!
ANNOUNCEMENT
REQUEST FOR APPLICATIONS
COMMUNITY ENERGY SAVERS GRANTS
Program Intent
The City of Baltimore has committed $1 million in Stimulus funds to a competitive grant program for community and
neighborhood organizations to reduce energy use. The Community Energy Savers Grant is designed to provide
community groups with technical assistance and financial resources needed to reduce energy use, either by their
organization or their target audience. These funds will further empower community and neighborhood organizations to
contribute to the goals of the Baltimore Sustainability Plan. Passed as City Council Ordinance in 2009, the Baltimore
Sustainability Plan (www.baltimoresustainability.org) outlines 29 goals, including a 15% reduction in energy use and
greenhouse gas emissions by 2015. We extend an invitation to eligible entities to apply for funds to help Baltimore
realize this vision for a sustainable future.
Eligible Entities
Community and neighborhood non-profit organizations are eligible to apply. Applicants must be a qualified 501(c)(3).
Eligible Uses
Three types of grants will be awarded.
Type 1 grants:
First, grants in the form of technical assistance will be awarded for applicants to conduct energy audits at their
facilities. The findings of these audits will help applicants prioritize energy saving upgrades and retrofits and can be
used as supporting documentation in subsequent grant applications for funds to implement such improvements. (If
your facility has not yet had an energy audit, applying for technical assistance grants may be a good first step.
Because there are three grant rounds, funds to implement improvements recommended in the energy audit can be
applied for in subsequent rounds.)
Type 2 grants:
Second, grants up to $50,000* will be awarded for applicants to implement recommended energy saving upgrades and
retrofits to their facilities and/or equipment. Results of a third-party energy audit and/or feasibility study including
analysis of projected energy savings must accompany proposals for upgrades or retrofits. Proposals for upgrades and
retrofits may include:
• Installation of insulation;
• Installation of efficient lighting,
• HVAC upgrades,
• High efficiency shower/faucet upgrades,
• Weather sealing,
• Purchase and installation of Energy Star appliances,
• Replacement of doors and windows, and
• Installation of solar powered, high efficiency appliances (this is different than renewable energy generation
devices such as photovoltaic panels).
Type 3 grants:
Third, grants of up to $50,000* will be awarded for applicants to conduct public education and outreach activities that
result in direct energy savings by their target audience. Proposals for public education and outreach activities may
include:
• Design and operation of energy efficiency and conservation programs,
• Identification of effective methods for achieving maximum participation and efficiency rates,
• Public education,
• Measurement and verification protocols, and
• Identification of energy efficient technologies.
* If your grant request is $25,000 or more, please explain how certified minority and women-owned business
enterprises will be involved in the execution of the project. A list of certified minority/women business enterprises can
be found at http://cityservices.baltimorecity.gov/mwboo. In some instances, based on the proposal, a waiver may be
granted because of the nature of specialty work, the lack of availability of MBE/WBEs to perform the work, etc. If a
proposer thinks that it is impossible to utilize MBE/WBEs, an explanation must be included to support that position. In
identifying firms in the directory, proposers may use some of the following words in the Service Description Box:
green, LEED, lighting, sustainability, energy, solar, HVAC, and environment.
Evaluation Criteria
Proposals will be evaluated based upon:
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IT SEEMS TO ME THAT IT WOULD BE EASIER FOR MARYLAND JUST TO DO A BLANKET END TO CORPORATE PROPERTY TAX AS ALL THESE WAYS BUSINESSES NOW AVOID PROPERTY TAXES GROWS BEYOND MANAGEMENT. BUSINESS TAX BREAKS HAVE BECOME A COMPLEX FINANCIAL INSTRUMENT DESIGNED TO PROVIDE COVER FOR ILLICIT USE!!
A LEEDS INSPECTION? REALLY?
Incentives for Going Green in Maryland: Property Tax Credits Dino C. La Fiandra
incentives_for_going_green_in_maryland_property_tax_credits_2.pdf February 10, 2009 By now, you know that there are many good reasons to consider building or operating your building to an environmentally friendly “green” standard like LEED (Leadership in Energy and Environmental Design). The so-called “sustainability dividend,” also known as the “green premium,” is the economic benefit to the developer/owner/operator of building or operating to a green standard. Depending on the level of green achieved, the construction costs for a green project may run as much as six percent greater than construction costs for a comparable non-green project, perhaps even more. Although building or operating to a green standard may foster a sense of altruism and social responsibility, particularly in a difficult real estate market the increased construction costs of a green building must be outweighed by the sustainability dividend of the green asset in order to make the green building an economically feasible endeavor.
Some of the natural consequences of greening that we typically discuss include lower energy costs, increased rental occupancy, increased rents, reduction in water consumption, and increased market value/sales price of the real estate, among other items. Tax incentives for greening, however, are equally important in considering and maximizing the anticipated sustainability dividend of a proposed green project. There are numerous types of tax incentives offered to promote sustainable development. This article focuses on property tax credits available under state and local law. Other tax incentives exist and will be discussed in future articles.
Property Tax Credits
One of the primary ways that state and local governments encourage sustainable development is through property tax credits. In Maryland, property taxes are regulated largely at the state level; however, these regulations are implemented and administered by local county and city governments. Under this regulatory framework, the state has authorized the counties to provide property tax credits for green buildings and energy conserving green devices. Maryland Code, Tax-Property Article, § 9-242 permits property tax credits for “high performance buildings.” Under that section, a high performance building is one that achieves a LEED Silver rating or higher or a comparable rating under another appropriate rating system. Section 9-203 allows the counties to grant a property tax credit for “qualifying energy devices” including solar and geothermal energy devices, and other energy conserving devices. Under each section, the State allows the counties to determine the amount of the tax credit, the duration of the credit, and other particulars of the local regulations that implement the tax credit. In accordance with this authority, several Maryland counties have granted these property tax credits.
Baltimore County
Baltimore County provides a property tax credit for buildings that achieve certain LEED ratings. The amount and duration of the property tax credit is based on whether the structure is commercial or residential, the LEED rating system pursuant to which the building is certified, and the level of certification within the rating system. For commercial buildings, Baltimore County recognizes three of the LEED rating systems: LEED-NC (New Construction/Major Renovation), LEED-CS (Core & Shell), and LEED-EB (Existing Buildings). Residential buildings must be rated under LEED-H (Homes) In order to qualify for a property tax credit, the commercial building must actually achieve a LEED rating of Silver or greater within one of the recognized rating systems.
The following table identifies the amount and duration of the property tax credit for commercial buildings:
Baltimore County Property Tax Credits For High Performance Buildings
LEED Rating System Duration of Tax Credit Level Achieved Property Tax Credit (as a percentage of the total property tax assessed) NC (New Construction)
There are certain requirements and limitations for these property tax credits. Predictably, a building may not receive more than one tax credit. The Director of Budget & Finance may terminate a property tax credit if he/she finds that the building has been altered so that it no longer complies with the rating system that was the basis for granting the tax credit. Finally, the application of the property tax credit must be filed on or before June 1 immediately preceding the first taxable year for which the credit is sought.
Howard County
Howard County has adopted a property tax credit system similar to that of Baltimore County, although there are important differences. As in Baltimore County, eligibility for the property tax credit for commercial “high performance buildings” is tied to actually achieving a LEED rating of Silver or greater in the LEED-NC, CS or EB rating systems. However, in Howard County, the Director of Inspections, Licenses and Permits may adopt by regulation equivalent rating systems, thereby potentially expanding the sets of rating criteria that would qualify for the property tax credit. Furthermore, Howard County provides a back-up property tax credit for LEED certified buildings that do not qualify for the high performance building property tax credit. Finally, as discussed more fully below, Howard County provides property tax credits for green homes in a manner completely independent of LEED certification.
The following table identifies the property tax credit for LEED-NC, CS, and EB buildings in Howard County, as well as for buildings meeting equivalent criteria as adopted by regulation. Under Howard County’s regulatory framework, these high performance buildings will typically be non-residential or multi-family buildings. Residential buildings are addressed separately.
Howard County Property Tax Credits For "High Performance Buildings"
LEED Rating System Duration of Tax Credit Level Achieved Property Tax Credit (as a percentage of the total property tax assessed) NC (New Construction) or
CS (Core & Shell)
As noted above, there is a “back-up” property tax credit available for green buildings that do not otherwise qualify for a property tax credit based on the high performance building criteria. For these buildings, the property tax credit is based on the level of LEED certification achieved and is in an amount equal to a certain percentage of the eligible costs associated with the acquisition and installation of an energy conserving device that receives a credit (point) under a LEED rating system. Under Howard County’s current regulatory framework, this property tax credit would benefit the owner of a building that is rated under a LEED rating system other than NC, CS or EB, or the owner of a building that receives a LEED certification, but does not achieve the Silver or higher level. The following table identifies the particulars:
Howard County Property Tax Credits For "Green Building Energy Conservation Devices"
Leed Rating System Duration of Tax Credit Level Achieved Property Tax Credit (as a percentage of the Eligible Costs* of the
Qualifying Energy Conservation Device/s**) Any 3 years Certified
* “Eligible Costs” are those costs incurred within the 36 months preceding the initial application for the property tax credit, and include the costs of device itself, as well as those for any necessary parts, components or accessories, and installation.
** “Qualifying energy conservation device” means an energy conservation device that receives a LEED credit, including but not limited to a solar energy or geothermal energy device, that is utilized by a structure that achieves any LEED certification, regardless of level. A qualifying energy conservation device is one that is used to heat or cool the structure, generate electricity for use in the structure, or provide hot water for use in the structure.
Lastly, Howard County provides a property tax credit for green residential buildings regardless LEED rating system or level of certification, if any. This property tax credit is similar to the property tax credit for qualifying energy conservation devices discussed in the preceding paragraph and table in that it is based on the eligible costs of a solar energy device or a geothermal energy device used within a residential structure. Unlike the credit for qualifying energy conservation devices, it is limited to solar and geothermal energy conservation devices, it is not tied to LEED or any other rating system, and it is not based on achieving any level of certification. Eligible costs are limited to those incurred within the 12 months prior to the application for the credit. The property tax credit is equal to 50% of the eligible costs, not to exceed $5000 for a heating system or $1500 for a hot water system.
Montgomery County
Like Howard County, Montgomery County's property tax credit program provides a property tax credit based on the level of LEED certification achieved. Other factors that come into consideration include the gross floor area of the building, whether the building is residential or commercial, and the LEED rating system (or equivalent system) that provides the basis for certification. The following table provides the details:
Montgomery County Property Tax Credits For "High Performance Buildings"
Building Type LEED Rating System (or equivalent) Duration of Tax Credit Level Achieved Property Tax Credit (as a percentage of the total property tax assessed) Newly constructed or extensively remodeled
non-residential or multi-family residential building
with at least 10,000 sq ft of gross floor area NC or CS
Like Howard County, Montgomery County also provides a property tax credit for qualified energy conservation devices, although they approach it a bit differently. Montgomery County allows a property tax credit equal to 50% of the eligible costs of a solar energy device or a geothermal energy device, not to exceed $5000 for a heating system or $1500 for a hot water system. In addition, Montgomery County provides a property tax credit of up to $250 per fiscal year for energy conservation devices such as programmable thermostats, insulation, and caulking and weather stripping for doors and windows.
Conclusion
Particularly during these tumultuous times in the real estate market, developers of green buildings need every advantage available to them to enhance the economic viability of green projects. Other aspects of the “sustainability dividend” may soften, or may simply not appear. For example, in a depressed market, increased rents and occupancy rates as compared to those of non-green alternatives may not be sufficient to make a green project feasible. Developers interested in green projects may find that the tax incentives discussed in this article move such projects toward feasibility. As the green revolution continues to take hold, perhaps more Maryland counties will provide similar tax incentives for green projects.
Practice Categories Green Building and Sustainability
Tax Incentives Make Sustainability More Rewarding
All too often, businesses launch sustainability initiatives for good financial reasons but overlook tax incentives that could make their decision even more advantageous. Authors Howard Wagner and Scott Tarney explain why and how businesses should review their sustainability initiatives to take full advantage of the many incentives now available at the federal, state, and local levels. Howard M. Wagner, CPA, Scott Tarney, Crowe Horwath LLP (4-28-2009)
"Going green" is no longer just a matter of improving a company's image or fostering good community relations. In many cases it's also a matter of good economic sense. Most top managers today recognize the significant financial and strategic benefits that come with managing operations in a way that minimizes long-term environmental impact.
For a variety of reasons - including cost savings, customer expectations, competitive advantage, and logistical considerations - more and more companies are devoting time and resources to the effort to reduce waste, restrict or clean up emissions, decrease energy consumption, increase recycling, and shift to alternative energy sources such as wind, solar, and biofuel.
If you are engaged in any program of this nature, there is a good chance your company is eligible to receive some type of incentive - probably several - from federal, state, or local governments. These incentives might take the form of property tax abatements, sales tax exemptions, income tax credits, discretionary grants, low-interest financing, or one or more of many other available incentive programs.
In many cases, companies are already undertaking these efforts for competitive or strategic reasons. As such, it simply makes sense for companies to structure such programs in a way that makes them eligible for any available incentives. The tax benefit, when combined with cost savings, competitive advantage, and the prestige of a green label, can help make sustainability more financially feasible.
Activities That Qualify for Incentives
What types of activities might be eligible for incentives? Literally hundreds of programs can qualify for advantageous tax treatment. Examples include:
•Installing pollution control equipment;
•Investing in energy-efficient buildings or components;
•Manufacturing products from recycled materials;
•Investing in systems to capture items from a company's waste stream for recycling or use by others;
•Undertaking environmental remediation activities;
•Adapting manufacturing or other processes to use alternate energy sources such as solar, wind, geothermal wind, and biomass; and
•Producing alternative fuels for vehicles or using alternative fuels to power a company's own fleet.
The types of incentives offered to encourage such activities represent just about every type of government sponsored tax benefit imaginable, including investment-, production-, or consumption-based income tax credits; accelerated depreciation for certain capital expenses; property tax reductions or abatements; and exemptions from state or local sales taxes for the purchase of relevant equipment or components. What's more, the virtually endless list of incentives is constantly changing as some expire and others are added.
Federal Incentives
At the federal level, many sustainability incentives are fairly well-publicized.
High-profile examples include fuel credits for producers, sellers, and users of alcohol-based or biodiesel fuels in vehicles. Tax credits related to energy-efficient building design and construction are also fairly well-known, at least within their industries and in certain geographic regions. Examples include tax credits for installing equipment that uses solar energy to generate electricity or to heat or cool a structure.
Businesses are also eligible for an immediate deduction of expenses attributable to qualified energy-saving improvements to certain commercial buildings. The requirements for such incentives are, necessarily, detailed and technical in nature, but compliance is usually well worth the effort. In many cases, cost- and energy-saving equipment that makes long-term economic sense can be even more beneficial simply if it meets the requirements of the various incentive programs.
The array of federal incentives continues to expand regularly. The most prominent example occurred when the Emergency Economic Stabilization Act of 2008 was expanded to incorporate an entire section named the Energy Improvement and Extension Act of 2008. This legislation, signed into law in early October 2008, extended several important incentives that were due to expire and introduced a new program to encourage the design and development of pollution control systems, alternative energy systems, and processes to capture excess energy from a manufacturing process.
The final legislation devotes nearly 150 pages of text to the extension, modification, and creation of new energy and emissions-related incentives. These range from tax credits for electricity produced from marine renewable resources, wind power, and geothermal heat pump systems to incentives for carbon dioxide sequestration, biodiesel and other alternative fuels, plug-in electric drive motor vehicles, idling reduction units for heavy trucks, alternative fuel vehicle-refueling facilities, energy-efficient commercial buildings and residences, and many more. The act also provides for accelerated depreciation for purchases of equipment used to collect, distribute, or recycle a variety of commodities.1•
THIS IS THIRD WORLD JUSTICE PEOPLE!!!!
DOES A MOVEMENT LIKE ZEITGEIST PROMOTING ENVIRONMENTAL STEWARDSHIP REALLY ALLOW THE INDUSTRY PROMOTING IT TO REMAIN RIFE WITH FRAUD?
We all know sustainability is a good policy. We all know we live at a time where corporate fraud is systemic and that this fraud is always rapped in the cloak of do-gooding. Some good will come from this green movement but sadly most of the money is already going into the pockets of these same developers and investment bankers. Anyone who looks for a new home may look at a 'green home' for value. It costs more in many cases but you get the money returned in savings over years. Here is the problem.....the builder received all kinds of tax breaks and grant incentives to build green, from building supplies, to buying the land, to rehabbing homes in blighted neighborhoods where the property was literally given to them, to the very investment in building green. EVERY SINGLE STEP IN THE GREEN PROCESS IS HEAVILY SUBSIDIZED AND THE END PRODUCT ALWAYS COSTS THE CONSUMER MORE.
Do you think a builder would build green without the incentives? Most people who can afford to buy houses know buying green is good and want to buy green. So why do you have to subsidize the industry in order to get them to build green? YOU DON'T.....THEY JUST DO IT AS A GIVE-AWAY. What about these new b-corporations that are businesses built on the policy of being green and getting to write it off their taxes. If the new economy is all about greening do you need to give tax credits to companies simply for working on green issues? NO, IT IS SIMPLY ANOTHER WAY TO END CORPORATE TAXATION. The entire green industry is self-built to move massive amounts of public money through fraud to corporations. SOUND FAMILIAR?
Below you will see some of what has been existing for years with no attempts by justice to staunch the crime. Even the agency charged with monitoring and providing BEST PRACTICES in the Green Industry has been sited time and again for lack of oversight and duplicity in fraud. This is LEEDS Leadership in Energy and Environmental Design. I have read for years how LEED buildings were found to be less than environmental and failing certification specs time and again. It operates just like the financial regulators who worked with the banks to commit the fraud.
WE ARE ONCE AGAIN LOSING MOST OF THE PUBLIC MONEY INVESTED INTO WHAT SHOULD BE A GREAT PUBLIC POLICY TO FRAUD!!!!
THIS IS HAPPENING BECAUSE WE HAVE THIRD WAY CORPORATE POLITICIANS WORKING FOR CORPORATE WEALTH HEADING THE DEMOCRATIC PARTY.
RUN AND VOTE FOR LABOR AND JUSTICE CANDIDATES NEXT ELECTIONS!!!!!
Leadership in Energy and Environmental Design
From Wikipedia, (February 2013)
Receiving a Gold LEED rating in September 2011, the Empire State Building is the tallest and largest LEED certified building in the United States and Western Hemisphere.[1] The Gold and Platinum rating of David L. Lawrence Convention Center in Pittsburgh, is the first and only convention center in the world to have such certifications.[2] 1225 Connecticut Avenue in Washington, D.C., is the first redeveloped office building on the U.S. East Coast to receive LEED Platinum status.[3] Phipps Conservatory & Botanical Gardens in Pittsburgh has multiple LEED certifications, including the world's only Platinum-certified greenhouse[4] and a Platinum-certified and net-zero energy Center for Sustainable Landscapes.[5] The University of Texas at Dallas Student Services Building is the first academic building in Texas to receive LEED Platinum status.[6] Shearer's Foods plant in Massillon, Ohio is the first food manufacturing plant to receive LEED Platinum status.[7] Leadership in Energy and Environmental Design (LEED) consists of a suite of rating systems for the design, construction and operation of high performance green buildings, homes and neighborhoods.
Developed by the U.S. Green Building Council (USGBC), and spearheaded by Robert K. Watson, Founding Chairman LEED Steering Committee from 1995 until 2006, LEED is intended to provide building owners and operators a concise framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions.
Since its inception in 1998, the U.S. Green Building Council[8] has grown to encompass more than 7,000 projects in the United States and 30 countries, covering over 1.501 billion square feet (140 km²) of development area.[9] The hallmark of LEED is that it is an open and transparent process where the technical criteria proposed by USGBC members are publicly reviewed for approval by the almost 20,000 member organizations that currently constitute the USGBC.
The Green Building Certification Institute (GBCI) was established by USGBC to provide a series of exams to allow individuals to become accredited for their knowledge of the LEED rating system. This is recognized through either the LEED Accredited Professional (LEED AP) or LEED Green Associate[10] (LEED Green Assoc.) designation. In 2011 GBCI named the organization's first class of LEED Fellows, the highest designation for LEED professionals. GBCI also provides third-party certification for projects pursuing LEED.
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We see fraud in how taxes are paid and grants and credits are requested. We see fraud in builders selling homes as green when they aren't. We see fraud in business start-ups that go nowhere and are found not to have a viable business plan. We see securities fraud over green and corporate tax loopholes made just for phony-green. THIS IS YET ANOTHER TRILLION DOLLAR INDUSTRY IN FRAUD ALL BY THE SAME PEOPLE ENRICHED FROM THE LAST FRAUDS THAT WENT UNACCOUNTED.
Green Product Fraud: Buyer Beware Real Estate News | Dec 3, 2008 | By: Audie Chamberlain | Prev | Next
Going green is good for the planet and can be good for your pocket book too. However, beware of businesses ready to take advantage of your new Earth-centric enthusiasm. Green-washing describes this practice and Jim Walker describes the warning signs of a fraudulent green product. Having a hard time being festive and energy conscious? Cut back on your holiday electric bill with a green tip from Marti Boetthcher.
Beware of Green-washing
By Jim Walker III
“Despite the U.S. governments efforts to provide guidelines for green produce marketing, the practice of Greenwashing, or the falsely promoting or exaggerating the greenness of a product or service, is not unusual. In making the determination as to the claim to be green, one can ask the following questions to help detect potential greenwashing situations.”
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ENVIRONMENTAL BUILDING NEWS
October 14, 2010
USGBC, LEED Targeted by Class-Action Suit
Henry Gifford, whose lawyer filed a class-action lawsuit against USGBC, has been an outspoken LEED critic since 2008.
The U.S. Green Building Council (USGBC) and its founders have been named as defendants in a class action lawsuit filed in federal court. Filed on behalf of mechanical systems designer Henry Gifford, owner of Gifford Fuel Saving, the lawsuit was stamped on October 8, 2010 at the U.S. District Court for the Southern District of New York. Among other allegations, the suit argues that USGBC is fraudulently misleading consumers and fraudulently misrepresenting energy performance of buildings certified under its LEED rating systems, and that LEED is harming the environment by leading consumers away from using proven energy-saving strategies. Alleged fraud and deceptive practices The suit alleges that USGBC’s claim that it verifies efficient design and construction is “false and intended to mislead the consumer and monopolize the market for energy-efficient building design.” To support this allegation Gifford relies heavily on his critique of a 2008 study from New Buildings Institute (NBI) and USGBC that is, to date, the most comprehensive look at the actual energy performance of buildings certified under LEED for New Construction and Major Renovations (LEED-NC). While the NBI study makes the case that LEED buildings are, on average, 25%–30% more efficient than the national average, Gifford published his own analysis in 2008 concluding that LEED buildings are, on average, 29% less efficient. A subsequent analysis of the NBI data by National Research Council Canada supported NBI’s findings, if not its methods. (Commentary questioning the respective statistical approaches of both the original study and Gifford’s analysis appears in this BuildingGreen.com blog post by Nadav Malin, president of EBN’s publisher BuildingGreen.) Using that study and USGBC’s promotion of it, the suit alleges fraud under the Sherman Anti-Trust Act, among other statutes. Gifford’s suit demands that USGBC cease deceptive practices and pay $100 million in compensation to victims, in addition to legal fees. Under the Lanham Act, the suit repeats the same concerns in alleging deceptive marketing and unfair competition. Other allegations include deceptive business practices and false advertising under New York State law, as well as wire fraud and unjust enrichment. Class-action suit By having his lawyer, Norah Hart of Treuhaft and Zakarin, file a class-action lawsuit, Gifford is not only claiming that he has been harmed by USGBC, but that he is one of a class of plaintiffs that have been harmed. According to the suit, those plaintiffs include owners who paid for LEED certification on false premises, professionals like Gifford whose livelihoods have allegedly been harmed by LEED, and taxpayers whose money has subsidized LEED buildings. The class action approach may be technically difficult to pursue in this case, says lawyer Shari Shapiro in an article on her green building law blog. Among other things, Shapiro notes that in a class action suit it is relevant whether, among other things, “the plaintiffs are enough alike so that their claims can be adjudicated together” and “whether the lead plaintiffs adequately represent members of the class.” Given the variety of plaintiffs Gifford is trying to represent, that may be hard, she says. Shapiro, assuming that Gifford has benefited from the green building wave, even questions whether Gifford has even been harmed, as he would have to be to take part in the lawsuit. However, Gifford told EBN that there’s no question about that. “Nobody hires me to fix their buildings,” he said. Though not an engineer, Gifford is respected in energy efficiency circles for his technical knowledge. He told EBN that he has lost out because owners are fixated on earning LEED points, and he doesn’t participate: “Unless you’re a LEED AP you're not going to get work.” That’s unfair, he claims, because while USGBC says that its product saves energy, it doesn’t. Gifford says that his services actually save energy, and he’s prepared to prove it by sharing energy bills from buildings he has worked on. Whether many other building professionals feel the way Gifford does, and whether they’re willing to go on the record, will be one aspect of this case to watch. Gifford indicated that the response so far has been mixed. As he told EBN, “Everybody has the same response: thank you, thank you… let me know how it goes.” Was there fraud? If the case does move ahead, Stephen Del Percio, a lawyer and author of the blog GreenRealEstateLaw.com, told EBN that it will be challenging to litigate. “You can’t prove fraud just by circumstantial evidence,” he said. Even if the NBI study is false, that may not be enough. “You have to intend to mislead people,” he said. Gifford told EBN that he doesn’t have evidence that anyone at USGBC tried to mislead the public, but if the suit proceeds the discovery process could, in theory, turn up emails or other communications that support Gifford’s case. USGBC performance initatives Gifford’s complaints focus on the 2008 study and how USGBC publicized it, but they don’t appear to account for other aspects of LEED. Gifford focuses on buildings certified under LEED for New Construction (LEED-NC), but the scope of LEED-NC and other LEED rating systems is clearly distinct. LEED for Existing Buildings, launched in 2004, looks at actual building performance, and in 2006, USGBC announced that buildings certified under LEED-NC would have the option of being enrolled at no charge in LEED for Existing Buildings. In 2007 USGBC launched LEED for Homes. While that system focuses on design and construction of new homes, it requires on-site verification including blower-door testing during construction, helping ensure that construction practices follow the design intent. Although this final piece may be too late for Gifford and the contentions of his lawsuit, in 2009 USGBC began requiring reporting of energy and water data for new buildings certified under the newer LEED 2009, and it set up infrastructure to invite sharing of information from all LEED-certified buildings (see “USGBC Expands Data Collection from LEED Buildings,” EBN Aug. 2010). Through this effort, the Building Performance Partnership, USGBC hopes to offer special help to LEED-certified buildings that are not living up to expected performance, according to Brendan Owens, P.E., vice president for LEED technical development at USGBC. Although USGBC has generally played down the possibility because it doesn’t want to discourage participation in LEED, and energy reporting, CEO Rick Fedrizzi has suggested that non-performing buildings may lose LEED certification in one form or another. Despite these efforts, Gifford complained to EBN that “the green label gives the designer, the developer, the contractor and the owner the right to hold a press conference staying that their building is energy-efficient, while the LEED system guarantees anonymity” when it comes to reporting actual energy use. Why sue? Asked by EBN why he was motivated to go to court, Gifford said, “I’m afraid that in a few years somebody really evil will publicize the fact that green buildings don't save energy and argue that the only solution [to resource constraints] is more guns to shoot at the people who have oil underneath their sand.” In other words, he says he's hoping to make the green building movement more honest so that it’s not embarrassed down the road. USGBC told EBN that it was reviewing the litigation and would respond in due course. In addition to USGBC, other named defendants are David Gottfried, a USGBC founder; Rob Watson, who helped start LEED in the 1990s while working for the Natural Resources Defense Council; and Rick Fedrizzi, a co-founder and currently CEO. Responding to EBN’s request for comment, Watson said, “I can’t comment on ongoing litigation except to say that USGBC is examining the complaint. USGBC has confidence in LEED and in our role in stimulating positive market change.” Michael Italiano, the only key USGBC founder not named as a defendant, told EBN that while he hadn’t reviewed the case, “To me it sounds frivolous and it doesn’t have much chance.” He noted, “LEED doesn't guarantee anything, and I think LEED gives people the tools to understand that.” Owners who want to verify performance can enroll in LEED for Existing Buildings, monitor their energy bills, and take other actions, he noted. A lawyer and currently CEO of Market Transformation to Sustainability, a nonprofit behind green standards, Italiano said that lawsuits targeting standards that have allegedly constrained trade typically focus on lack of a bona fide consensus process of standard-setting. In the case of LEED, he said, a broad array of stakeholders has been involved in writing and reviewing LEED standards. Russell Perry, FAIA, of SmithGroup, agreed that if anyone thinks LEED for New Construction guarantees higher energy performance, they have the wrong idea. “LEED-NC is saying that a building has been designed to meet a certain standard, but there are many variables that go into the actual performance, only one of which is design.” Perry also noted that LEED includes a broad array of topics, only one of which is energy. Referring to climate change and other environmental and health issues, Perry added, “I don’t think that this kind of distraction helps us move the ball down the field.” – Tristan Roberts
October 14, 2010
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JUST LOOK AT THE VARIETY OF TAX BREAKS AND GREENING INCENTIVES OFFERED JUST IN BALTIMORE. THERE ARE STATE AND FEDERAL BREAKS AS WELL. NOW, WE ALL KNOW THAT MARYLAND AND ESPECIALLY BALTIMORE HAS ABSOLUTELY KNOW OVERSIGHT ON ANY OF THIS AND WE KNOW THAT THE FEDERAL JUSTICE DEPARTMENT WILL TURN ITS HEAD AS WELL.
BALTIMORE'S MAYOR HAS STATED THAT MAJOR GOVERNMENT RESTRUCTURING IS NEEDED BECAUSE THE CITY IS CLOSE TO BANKRUPTCY YET THE GIVING NEVER ENDS AS REGARDS DEFRAUDING GOVERNMENT COFFERS!
ANNOUNCEMENT
REQUEST FOR APPLICATIONS
COMMUNITY ENERGY SAVERS GRANTS
Program Intent
The City of Baltimore has committed $1 million in Stimulus funds to a competitive grant program for community and
neighborhood organizations to reduce energy use. The Community Energy Savers Grant is designed to provide
community groups with technical assistance and financial resources needed to reduce energy use, either by their
organization or their target audience. These funds will further empower community and neighborhood organizations to
contribute to the goals of the Baltimore Sustainability Plan. Passed as City Council Ordinance in 2009, the Baltimore
Sustainability Plan (www.baltimoresustainability.org) outlines 29 goals, including a 15% reduction in energy use and
greenhouse gas emissions by 2015. We extend an invitation to eligible entities to apply for funds to help Baltimore
realize this vision for a sustainable future.
Eligible Entities
Community and neighborhood non-profit organizations are eligible to apply. Applicants must be a qualified 501(c)(3).
Eligible Uses
Three types of grants will be awarded.
Type 1 grants:
First, grants in the form of technical assistance will be awarded for applicants to conduct energy audits at their
facilities. The findings of these audits will help applicants prioritize energy saving upgrades and retrofits and can be
used as supporting documentation in subsequent grant applications for funds to implement such improvements. (If
your facility has not yet had an energy audit, applying for technical assistance grants may be a good first step.
Because there are three grant rounds, funds to implement improvements recommended in the energy audit can be
applied for in subsequent rounds.)
Type 2 grants:
Second, grants up to $50,000* will be awarded for applicants to implement recommended energy saving upgrades and
retrofits to their facilities and/or equipment. Results of a third-party energy audit and/or feasibility study including
analysis of projected energy savings must accompany proposals for upgrades or retrofits. Proposals for upgrades and
retrofits may include:
• Installation of insulation;
• Installation of efficient lighting,
• HVAC upgrades,
• High efficiency shower/faucet upgrades,
• Weather sealing,
• Purchase and installation of Energy Star appliances,
• Replacement of doors and windows, and
• Installation of solar powered, high efficiency appliances (this is different than renewable energy generation
devices such as photovoltaic panels).
Type 3 grants:
Third, grants of up to $50,000* will be awarded for applicants to conduct public education and outreach activities that
result in direct energy savings by their target audience. Proposals for public education and outreach activities may
include:
• Design and operation of energy efficiency and conservation programs,
• Identification of effective methods for achieving maximum participation and efficiency rates,
• Public education,
• Measurement and verification protocols, and
• Identification of energy efficient technologies.
* If your grant request is $25,000 or more, please explain how certified minority and women-owned business
enterprises will be involved in the execution of the project. A list of certified minority/women business enterprises can
be found at http://cityservices.baltimorecity.gov/mwboo. In some instances, based on the proposal, a waiver may be
granted because of the nature of specialty work, the lack of availability of MBE/WBEs to perform the work, etc. If a
proposer thinks that it is impossible to utilize MBE/WBEs, an explanation must be included to support that position. In
identifying firms in the directory, proposers may use some of the following words in the Service Description Box:
green, LEED, lighting, sustainability, energy, solar, HVAC, and environment.
Evaluation Criteria
Proposals will be evaluated based upon:
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IT SEEMS TO ME THAT IT WOULD BE EASIER FOR MARYLAND JUST TO DO A BLANKET END TO CORPORATE PROPERTY TAX AS ALL THESE WAYS BUSINESSES NOW AVOID PROPERTY TAXES GROWS BEYOND MANAGEMENT. BUSINESS TAX BREAKS HAVE BECOME A COMPLEX FINANCIAL INSTRUMENT DESIGNED TO PROVIDE COVER FOR ILLICIT USE!!
A LEEDS INSPECTION? REALLY?
Incentives for Going Green in Maryland: Property Tax Credits Dino C. La Fiandra
incentives_for_going_green_in_maryland_property_tax_credits_2.pdf February 10, 2009 By now, you know that there are many good reasons to consider building or operating your building to an environmentally friendly “green” standard like LEED (Leadership in Energy and Environmental Design). The so-called “sustainability dividend,” also known as the “green premium,” is the economic benefit to the developer/owner/operator of building or operating to a green standard. Depending on the level of green achieved, the construction costs for a green project may run as much as six percent greater than construction costs for a comparable non-green project, perhaps even more. Although building or operating to a green standard may foster a sense of altruism and social responsibility, particularly in a difficult real estate market the increased construction costs of a green building must be outweighed by the sustainability dividend of the green asset in order to make the green building an economically feasible endeavor.
Some of the natural consequences of greening that we typically discuss include lower energy costs, increased rental occupancy, increased rents, reduction in water consumption, and increased market value/sales price of the real estate, among other items. Tax incentives for greening, however, are equally important in considering and maximizing the anticipated sustainability dividend of a proposed green project. There are numerous types of tax incentives offered to promote sustainable development. This article focuses on property tax credits available under state and local law. Other tax incentives exist and will be discussed in future articles.
Property Tax Credits
One of the primary ways that state and local governments encourage sustainable development is through property tax credits. In Maryland, property taxes are regulated largely at the state level; however, these regulations are implemented and administered by local county and city governments. Under this regulatory framework, the state has authorized the counties to provide property tax credits for green buildings and energy conserving green devices. Maryland Code, Tax-Property Article, § 9-242 permits property tax credits for “high performance buildings.” Under that section, a high performance building is one that achieves a LEED Silver rating or higher or a comparable rating under another appropriate rating system. Section 9-203 allows the counties to grant a property tax credit for “qualifying energy devices” including solar and geothermal energy devices, and other energy conserving devices. Under each section, the State allows the counties to determine the amount of the tax credit, the duration of the credit, and other particulars of the local regulations that implement the tax credit. In accordance with this authority, several Maryland counties have granted these property tax credits.
Baltimore County
Baltimore County provides a property tax credit for buildings that achieve certain LEED ratings. The amount and duration of the property tax credit is based on whether the structure is commercial or residential, the LEED rating system pursuant to which the building is certified, and the level of certification within the rating system. For commercial buildings, Baltimore County recognizes three of the LEED rating systems: LEED-NC (New Construction/Major Renovation), LEED-CS (Core & Shell), and LEED-EB (Existing Buildings). Residential buildings must be rated under LEED-H (Homes) In order to qualify for a property tax credit, the commercial building must actually achieve a LEED rating of Silver or greater within one of the recognized rating systems.
The following table identifies the amount and duration of the property tax credit for commercial buildings:
Baltimore County Property Tax Credits For High Performance Buildings
LEED Rating System Duration of Tax Credit Level Achieved Property Tax Credit (as a percentage of the total property tax assessed) NC (New Construction)
There are certain requirements and limitations for these property tax credits. Predictably, a building may not receive more than one tax credit. The Director of Budget & Finance may terminate a property tax credit if he/she finds that the building has been altered so that it no longer complies with the rating system that was the basis for granting the tax credit. Finally, the application of the property tax credit must be filed on or before June 1 immediately preceding the first taxable year for which the credit is sought.
Howard County
Howard County has adopted a property tax credit system similar to that of Baltimore County, although there are important differences. As in Baltimore County, eligibility for the property tax credit for commercial “high performance buildings” is tied to actually achieving a LEED rating of Silver or greater in the LEED-NC, CS or EB rating systems. However, in Howard County, the Director of Inspections, Licenses and Permits may adopt by regulation equivalent rating systems, thereby potentially expanding the sets of rating criteria that would qualify for the property tax credit. Furthermore, Howard County provides a back-up property tax credit for LEED certified buildings that do not qualify for the high performance building property tax credit. Finally, as discussed more fully below, Howard County provides property tax credits for green homes in a manner completely independent of LEED certification.
The following table identifies the property tax credit for LEED-NC, CS, and EB buildings in Howard County, as well as for buildings meeting equivalent criteria as adopted by regulation. Under Howard County’s regulatory framework, these high performance buildings will typically be non-residential or multi-family buildings. Residential buildings are addressed separately.
Howard County Property Tax Credits For "High Performance Buildings"
LEED Rating System Duration of Tax Credit Level Achieved Property Tax Credit (as a percentage of the total property tax assessed) NC (New Construction) or
CS (Core & Shell)
As noted above, there is a “back-up” property tax credit available for green buildings that do not otherwise qualify for a property tax credit based on the high performance building criteria. For these buildings, the property tax credit is based on the level of LEED certification achieved and is in an amount equal to a certain percentage of the eligible costs associated with the acquisition and installation of an energy conserving device that receives a credit (point) under a LEED rating system. Under Howard County’s current regulatory framework, this property tax credit would benefit the owner of a building that is rated under a LEED rating system other than NC, CS or EB, or the owner of a building that receives a LEED certification, but does not achieve the Silver or higher level. The following table identifies the particulars:
Howard County Property Tax Credits For "Green Building Energy Conservation Devices"
Leed Rating System Duration of Tax Credit Level Achieved Property Tax Credit (as a percentage of the Eligible Costs* of the
Qualifying Energy Conservation Device/s**) Any 3 years Certified
* “Eligible Costs” are those costs incurred within the 36 months preceding the initial application for the property tax credit, and include the costs of device itself, as well as those for any necessary parts, components or accessories, and installation.
** “Qualifying energy conservation device” means an energy conservation device that receives a LEED credit, including but not limited to a solar energy or geothermal energy device, that is utilized by a structure that achieves any LEED certification, regardless of level. A qualifying energy conservation device is one that is used to heat or cool the structure, generate electricity for use in the structure, or provide hot water for use in the structure.
Lastly, Howard County provides a property tax credit for green residential buildings regardless LEED rating system or level of certification, if any. This property tax credit is similar to the property tax credit for qualifying energy conservation devices discussed in the preceding paragraph and table in that it is based on the eligible costs of a solar energy device or a geothermal energy device used within a residential structure. Unlike the credit for qualifying energy conservation devices, it is limited to solar and geothermal energy conservation devices, it is not tied to LEED or any other rating system, and it is not based on achieving any level of certification. Eligible costs are limited to those incurred within the 12 months prior to the application for the credit. The property tax credit is equal to 50% of the eligible costs, not to exceed $5000 for a heating system or $1500 for a hot water system.
Montgomery County
Like Howard County, Montgomery County's property tax credit program provides a property tax credit based on the level of LEED certification achieved. Other factors that come into consideration include the gross floor area of the building, whether the building is residential or commercial, and the LEED rating system (or equivalent system) that provides the basis for certification. The following table provides the details:
Montgomery County Property Tax Credits For "High Performance Buildings"
Building Type LEED Rating System (or equivalent) Duration of Tax Credit Level Achieved Property Tax Credit (as a percentage of the total property tax assessed) Newly constructed or extensively remodeled
non-residential or multi-family residential building
with at least 10,000 sq ft of gross floor area NC or CS
Like Howard County, Montgomery County also provides a property tax credit for qualified energy conservation devices, although they approach it a bit differently. Montgomery County allows a property tax credit equal to 50% of the eligible costs of a solar energy device or a geothermal energy device, not to exceed $5000 for a heating system or $1500 for a hot water system. In addition, Montgomery County provides a property tax credit of up to $250 per fiscal year for energy conservation devices such as programmable thermostats, insulation, and caulking and weather stripping for doors and windows.
Conclusion
Particularly during these tumultuous times in the real estate market, developers of green buildings need every advantage available to them to enhance the economic viability of green projects. Other aspects of the “sustainability dividend” may soften, or may simply not appear. For example, in a depressed market, increased rents and occupancy rates as compared to those of non-green alternatives may not be sufficient to make a green project feasible. Developers interested in green projects may find that the tax incentives discussed in this article move such projects toward feasibility. As the green revolution continues to take hold, perhaps more Maryland counties will provide similar tax incentives for green projects.
Practice Categories Green Building and Sustainability
Tax Incentives Make Sustainability More Rewarding
All too often, businesses launch sustainability initiatives for good financial reasons but overlook tax incentives that could make their decision even more advantageous. Authors Howard Wagner and Scott Tarney explain why and how businesses should review their sustainability initiatives to take full advantage of the many incentives now available at the federal, state, and local levels. Howard M. Wagner, CPA, Scott Tarney, Crowe Horwath LLP (4-28-2009)
"Going green" is no longer just a matter of improving a company's image or fostering good community relations. In many cases it's also a matter of good economic sense. Most top managers today recognize the significant financial and strategic benefits that come with managing operations in a way that minimizes long-term environmental impact.
For a variety of reasons - including cost savings, customer expectations, competitive advantage, and logistical considerations - more and more companies are devoting time and resources to the effort to reduce waste, restrict or clean up emissions, decrease energy consumption, increase recycling, and shift to alternative energy sources such as wind, solar, and biofuel.
If you are engaged in any program of this nature, there is a good chance your company is eligible to receive some type of incentive - probably several - from federal, state, or local governments. These incentives might take the form of property tax abatements, sales tax exemptions, income tax credits, discretionary grants, low-interest financing, or one or more of many other available incentive programs.
In many cases, companies are already undertaking these efforts for competitive or strategic reasons. As such, it simply makes sense for companies to structure such programs in a way that makes them eligible for any available incentives. The tax benefit, when combined with cost savings, competitive advantage, and the prestige of a green label, can help make sustainability more financially feasible.
Activities That Qualify for Incentives
What types of activities might be eligible for incentives? Literally hundreds of programs can qualify for advantageous tax treatment. Examples include:
•Installing pollution control equipment;
•Investing in energy-efficient buildings or components;
•Manufacturing products from recycled materials;
•Investing in systems to capture items from a company's waste stream for recycling or use by others;
•Undertaking environmental remediation activities;
•Adapting manufacturing or other processes to use alternate energy sources such as solar, wind, geothermal wind, and biomass; and
•Producing alternative fuels for vehicles or using alternative fuels to power a company's own fleet.
The types of incentives offered to encourage such activities represent just about every type of government sponsored tax benefit imaginable, including investment-, production-, or consumption-based income tax credits; accelerated depreciation for certain capital expenses; property tax reductions or abatements; and exemptions from state or local sales taxes for the purchase of relevant equipment or components. What's more, the virtually endless list of incentives is constantly changing as some expire and others are added.
Federal Incentives
At the federal level, many sustainability incentives are fairly well-publicized.
High-profile examples include fuel credits for producers, sellers, and users of alcohol-based or biodiesel fuels in vehicles. Tax credits related to energy-efficient building design and construction are also fairly well-known, at least within their industries and in certain geographic regions. Examples include tax credits for installing equipment that uses solar energy to generate electricity or to heat or cool a structure.
Businesses are also eligible for an immediate deduction of expenses attributable to qualified energy-saving improvements to certain commercial buildings. The requirements for such incentives are, necessarily, detailed and technical in nature, but compliance is usually well worth the effort. In many cases, cost- and energy-saving equipment that makes long-term economic sense can be even more beneficial simply if it meets the requirements of the various incentive programs.
The array of federal incentives continues to expand regularly. The most prominent example occurred when the Emergency Economic Stabilization Act of 2008 was expanded to incorporate an entire section named the Energy Improvement and Extension Act of 2008. This legislation, signed into law in early October 2008, extended several important incentives that were due to expire and introduced a new program to encourage the design and development of pollution control systems, alternative energy systems, and processes to capture excess energy from a manufacturing process.
The final legislation devotes nearly 150 pages of text to the extension, modification, and creation of new energy and emissions-related incentives. These range from tax credits for electricity produced from marine renewable resources, wind power, and geothermal heat pump systems to incentives for carbon dioxide sequestration, biodiesel and other alternative fuels, plug-in electric drive motor vehicles, idling reduction units for heavy trucks, alternative fuel vehicle-refueling facilities, energy-efficient commercial buildings and residences, and many more. The act also provides for accelerated depreciation for purchases of equipment used to collect, distribute, or recycle a variety of commodities.1•
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