AN ACT CONCERNING GREEN BUILDINGS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 10-285a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) The percentage of school building project grant money a local board of education may be eligible to receive, under the provisions of section 10-286 shall be determined as follows: (1) Each town shall be ranked in descending order from one to one hundred sixty-nine according to such town's adjusted equalized net grand list per capita, as defined in section 10-261; (2) based upon such ranking, a percentage of not less than forty nor more than eighty shall be determined for each town on a continuous scale, except that for school building projects authorized by the General Assembly during the fiscal year ending June 30, 1991, for all such projects so authorized thereafter and for grants approved pursuant to subsection (b) of section 10-283 for which application is made on and after July 1, 1991, the percentage of school building project grant money a local board of education may be eligible to receive, under the provisions of section 10-286 shall be determined as follows: (A) Each town shall be ranked in descending order from one to one hundred sixty-nine according to such town's adjusted equalized net grand list per capita, as defined in section 10-261; (B) based upon such ranking, a percentage of not less than twenty nor more than eighty shall be determined for each town on a continuous scale.

(b) The percentage of school building project grant money a regional board of education may be eligible to receive under the provisions of section 10-286 shall be determined by its ranking. Such ranking shall be determined by (1) multiplying the total population, as defined in section 10-261, of each town in the district by such town's ranking, as determined in subsection (a) of this section, (2) adding together the figures determined under subdivision (1) of this subsection, and (3) dividing the total computed under subdivision (2) of this subsection by the total population of all towns in the district. The ranking of each regional board of education shall be rounded to the next higher whole number and each such board shall receive the same reimbursement percentage as would a town with the same rank plus ten per cent, except that no such percentage shall exceed eighty-five per cent.

(c) The percentage of school building project grant money a regional educational service center may be eligible to receive shall be determined by its ranking. Such ranking shall be determined by (1) multiplying the population of each member town in the regional educational service center by such town's ranking, as determined in subsection (a) of this section; (2) adding together the figures for each town determined under subdivision (1) of this subsection; [,] and (3) dividing the total computed under subdivision (2) of this subsection by the total population of all member towns in the regional educational service center. The ranking of each regional educational service center shall be rounded to the next higher whole number and each such center shall receive the same reimbursement percentage as would a town with the same rank.

(d) The percentage of school building project grant money a cooperative arrangement pursuant to section 10-158a, may be eligible to receive shall be determined by its ranking. Such ranking shall be determined by (1) multiplying the total population, as defined in section 10-261, of each town in the cooperative arrangement by such town's ranking, as determined in subsection (a) of this section, (2) adding the products determined under subdivision (1) of this subsection, and (3) dividing the total computed under subdivision (2) of this subsection by the total population of all towns in the cooperative arrangement. The ranking of each cooperative arrangement shall be rounded to the next higher whole number and each such cooperative arrangement shall receive the same reimbursement percentage as would a town with the same rank plus ten percentage points.

(e) If an elementary school building project for a new building or for the expansion of an existing building includes space for a school readiness program, the percentage determined pursuant to this section shall be increased by five percentage points, but shall not exceed one hundred per cent, for the portion of the building used primarily for such purpose. Recipient districts shall maintain full-day preschool enrollment for at least ten years.

(f) The percentage determined pursuant to this section for a school building project grant subject to the requirements of section 16a-38k, as amended by this act, shall be increased by two percentage points, provided that the school district responsible for the project certifies to the applicable state agency that the project shall meet the standards imposed by section 16a-38k, as amended by this act.

[(f)] (g) The percentage determined pursuant to this section for a school building project grant for the expansion, alteration or renovation of an existing public school building to convert such building for use as a lighthouse school, as defined in section 10-266cc, shall be increased by ten percentage points.

[(g)] (h) The percentage determined pursuant to this section for a school building project grant shall be increased by the percentage of the total projected enrollment of the school attributable to the number of spaces made available for out-of-district students participating in the program established pursuant to section 10-266aa, provided the maximum increase shall not exceed ten percentage points.

[(h)] (i) Subject to the provisions of section 10-285d, if an elementary school building project for a school in a priority school district or for a priority school is necessary in order to offer a full-day kindergarten program or a full-day preschool program or to reduce class size pursuant to section 10-265f, the percentage determined pursuant to this section shall be increased by ten percentage points for the portion of the building used primarily for such full-day kindergarten program, full-day preschool program or such reduced size classes. Recipient districts that receive an increase pursuant to this subsection in support of a full-day preschool program, shall maintain full-day preschool enrollment for at least ten years.

Sec. 2. Section 10-265e of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

As used in sections 10-265e to 10-265i, inclusive, and subsection [(h)] (i) of section 10-285a, as amended by this act:

(1) "Priority school district" means a school district described in section 10-266p; and

(2) "Priority school" means a school in which forty per cent or more of the lunches served are served to students who are eligible for free or reduced price lunches pursuant to federal law and regulations, excluding such a school located in a priority school district.

Sec. 3. Section 10-285d of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

In order to be eligible for the percentage increase pursuant to subsection [(h)] (i) of section 10-285a, as amended by this act: (1) The project shall be (A) included in a plan developed pursuant to section 10-265f, and (B) for a particular full-day kindergarten class or reduced-sized class funded pursuant to section 10-265f; (2) the local or regional board of education shall present evidence to the Department of Education that the project is the best option for solving the need for additional space and is cost-efficient; and (3) the project shall meet the requirements established in this chapter.

Sec. 4. Section 16a-38k of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) Notwithstanding any provision of the general statutes, any new construction of a state facility, except salt sheds, parking garages [,] or maintenance facilities, [or school construction,] that is projected to cost five million dollars or more, and is approved and funded on or after January 1, [2007] 2008, shall comply with the regulations adopted pursuant to subsection (b) of this section. The Secretary of the Office of Policy and Management, in consultation with the Commissioner of Public Works and the Institute for Sustainable Energy, shall exempt any facility from complying with said regulations if said secretary finds, in a written analysis, that the cost of such compliance significantly outweighs the benefits.

(b) Not later than January 1, 2007, the Secretary of the Office of Policy and Management, in consultation with the Commissioner of Public Works, the Commissioner of Environmental Protection and the Commissioner of Public Safety, shall adopt regulations, in accordance with the provisions of chapter 54, to adopt building construction standards that are consistent with or exceed the silver building rating of the Leadership in Energy and Environmental Design's rating system for new commercial construction and major renovation projects, as established by the United States Green Building Council, or an equivalent standard, including, but not limited to, a two-globe rating in the Green Globes USA design program, and thereafter update such regulations as the secretary deems necessary.

Sec. 5. (NEW) (Effective July 1, 2007, and applicable to income years commencing on or after January 1, 2008) (a) As used in sections 5 and 6 of this act:

(1) "Allowable costs" means the amounts chargeable to a capital account, including, but not limited to: (A) Construction or rehabilitation costs; (B) commissioning costs; (C) interest paid during the construction or rehabilitation period; (D) legal, architectural, engineering and other professional fees allocable to construction or rehabilitation; (E) closing costs for construction or mortgage loans; (F) recording taxes and filing fees for construction or rehabilitation; (G) site costs, such as temporary electric wiring, scaffolding, demolition costs and fencing and security facilities; and (H) costs of carpeting, partitions, walls and wall coverings, ceilings, lighting, plumbing, electrical wiring, mechanical, heating, cooling and ventilation, but "allowable costs" does not include the purchase of land, any remediation costs or the cost of telephone systems or computers;

(2) "Brownfield site" means any former or current commercial or industrial site that is vacant or underutilized, and on which there has been, or there is suspected to have been, a discharge of a hazardous substance, a hazardous waste or a pollutant;

(3) "Eligible building" means a building located in the state that meets or exceeds the Leadership in Energy and Environmental Design's silver certification rating for new construction or major renovation projects as established by the United States Green Building Council;

(4) "Energy Star" means the voluntary labeling program administered by the U.S. Environmental Protection Agency designed to identify and promote energy-efficient products, equipment and buildings;

(5) "Enterprise zone" means a designated area in a Targeted Investment Community as established by the Department of Economic and Community Development;

(6) "LEED Green Building Rating System" means the Leadership in Energy and Environmental Design green building rating system developed by the United States Green Building Council as of the date that the project is registered with the United States Green Building Council;

(7) "Mixed-use development" means a development that includes residential use and no more than seventy-five per cent of interior square footage with one or more of the following uses: (A) Commercial space; (B) office space; (C) retail space; or (D) any other nonresidential use that the Office of Policy and Management has determined does not pose a public health threat or nuisance to nearby residential areas;

(8) "Site improvements" means any construction work on, or improvement to, streets, roads, parking facilities, sidewalks, drainage structures and utilities; and

(9) "Transit-oriented development" means a project located within one-quarter of a mile walking distance of publicly available bus transit service or within one-half of a mile walking distance of adequate rail, light rail, streetcar or ferry transit service.

(b) There shall be allowed a credit for all taxpayers against any tax due under the provisions of chapter 207, 208, 209, 210, 212 or 229 of the general statutes for the construction or renovation of an eligible building or mixed-use development that meets the requirements of subsection (c) of this section. The amount of the credit shall not exceed three hundred fifty dollars per square foot of the eligible building or mixed-use development.

(c) (1) To be eligible for a tax credit under this section any building or mixed-use development shall: (A) Not require a sewer extension of more than one-half of a mile, (B) not have energy costs exceeding the energy use permitted by the state energy code by (i) seventy-nine per cent for new construction, or (ii) eighty-six per cent for renovation of a building, (C) shall use equipment and appliances that meet Energy Star standards, if applicable, including, but not limited to, refrigerators, dishwashers and washing machines, and (D) shall use products consisting of low volatile organic compounds and that meet standards established by the Leadership in Energy and Environmental Design in all interior applications where such products are commercially available, including, but not limited to, adhesives and sealants, paints and coatings and carpets; and (2) such credit shall be equivalent to: (A) A base credit of (i) for new construction or major renovation of a building but not other site improvements certified by the Leadership in Energy and Environmental Design's rating system, as established by the United States Green Building Council, (I) four per cent of allowable costs for a silver rating, (II) six per cent of allowable costs for a gold rating, and (III) eight per cent of allowable costs for a platinum rating; and (ii) for core and shell or commercial interior projects, (I) three per cent of allowable costs for a silver rating, (II) four per cent of allowable costs for a gold rating, and (III) six per cent of allowable costs for a platinum rating; (B) one-half of one per cent of allowable costs for mixed-use developments; (C) one-half of one per cent of allowable costs for development of a brownfield site or enterprise zone; and (D) one-half of one per cent of allowable costs for transit-oriented development.

(d) (1) A taxpayer may claim not more than a total of twenty per cent of allowable costs in any tax year, and any percentage of tax credit that the taxpayer would otherwise be entitled to in accordance with subsection (c) of this section may be carried forward for a period of not more than fourteen years.

(2) Any credit allowed pursuant to this section may be sold, assigned or otherwise transferred, to one or more taxpayers. If a taxpayer sells, assigns or otherwise transfers such credit to another taxpayer, the transferor and transferee shall jointly submit written notification of such transfer to the Commissioner of Revenue Services not later than thirty days after such transfer. The notification shall include any information required by said commissioner. Failure to comply with this subdivision shall result in a disallowance of such credit until there is full compliance by the transferor and transferee.

(e) Notwithstanding any provision of the general statutes: Any subsequent successor in interest to the property that is eligible for a credit in accordance with subsection (c) of this section may claim such credit if the deed transferring the property assigns the subsequent successor such right, unless the deed specifies that the seller shall retain the right to claim such credit. Any subsequent tenant of a building for which a credit was granted to a taxpayer pursuant to this section, may claim the credit for the period after the termination of the previous tenancy that such credit would have been allowable to the previous tenant.

Sec. 6. (NEW) (Effective July 1, 2007, and applicable to income years commencing on or after January 1, 2008) The Commissioner of Revenue Services shall grant a credit against any tax due under the provisions of chapter 207, 208, 209, 210, 212 or 229 of the general statutes for the installation and use of the following renewable and advanced technology energy systems in a construction or renovation of a building or development as long as the building or development meets the requirements of subsection (c) of section 5 of this act, the renewable and advanced technology energy system remains in service for the entire taxable year for which the credit is claimed and provided the amount of any federal, state or local incentive received by the taxpayer for such installation or purchase is subtracted from the total cost of such installation or use:

(1) Fuel cells. A fuel cell credit shall be granted for the installation of a fuel cell in an amount equivalent to thirty per cent of the sum of the capitalized costs paid or incurred by the taxpayer for each installed fuel cell, provided that such credit shall not exceed one thousand dollars per kilowatt of DC rated capacity.

(2) Photovoltaic module. A photovoltaic module credit shall be granted for the installation of a photovoltaic module in an amount equivalent to twenty-five per cent of the cost paid or incurred by the taxpayer for such photovoltaic module, provided that such credit shall not exceed one dollar and twenty-five cents per watt of DC rated capacity.

(3) Geothermal system. A geothermal system credit shall be granted for the installation of a geothermal heating and cooling system in an amount equivalent to ten per cent of the cost paid or incurred by the taxpayer for such system.

(4) Solar thermal system. A credit shall be granted for the installation of a solar thermal system in an amount equivalent to fifty per cent of the cost paid or incurred by the taxpayer for such system.

(5) Wind turbine. A credit shall be granted for the installation of a wind turbine in an amount equivalent to ten per cent of the cost paid or incurred by the taxpayer for such system, provided that the credit amount shall not exceed one dollar and twenty-five cents per watt of DC rated capacity.

(6) Cogeneration system. A credit shall be granted for the installation of a cogeneration system as defined in subdivision (63) of section 12-81 of the general statutes in an amount equivalent to fifty per cent of the cost paid or incurred by the taxpayer for such system.

(7) Under floor air distribution system. A credit shall be granted for the installation of an under floor air distribution system in an amount equivalent to ten per cent of the cost paid or incurred by the taxpayer for such system.

(8) Green roof. A credit shall be granted for the installation of any green roof that includes low growing vegetation and results in lower stormwater runoff and energy costs in an amount equivalent to fifty per cent of the incremental cost paid or incurred by the taxpayer for such roof.

Sec. 7. (NEW) (Effective October 1, 2007) Not later than January 1, 2008, the Secretary of the Office of Policy and Management, in consultation with the Department of Environmental Protection and the Department of Revenue Services, shall adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, as necessary to implement the provisions of sections 5 and 6 of this act and section 12-81 of the general statutes, as amended by this act, and thereafter update such regulations as necessary.

Sec. 8. (Effective from passage) On or before July 1, 2012, the Secretary of the Office of Policy and Management, in consultation with the Commissioner of the Department of Environmental Protection and the Commissioner of the Department of Revenue Services shall prepare and submit a written report containing (1) the number of taxpayers applying for the credits provided in sections 5 and 6 of this act and sections 12-81 and 12-412 of the general statutes, as amended by this act; (2) the amount of such credits granted; (3) the geographical distribution of such credits granted; and (4) any other information deemed appropriate to the Governor and the joint standing committees of the General Assembly having cognizance of matters relating to the environment and finance, revenue and bonding in accordance with the provisions of section 11-4a of the general statutes. A preliminary draft of the report shall be submitted on or before July 1, 2010, to the Governor and the joint standing committees of the General Assembly having cognizance of matters relating to the environment and finance, revenue and in accordance with the provisions of section 11-4a of the general statutes.

Sec. 9. Subdivision (113) of section 12-412 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007, and applicable to sales occurring on or after July 1, 2007):

(113) (A) Sales to, and the storage, use or other consumption by, a fuel cell manufacturing facility in this state of materials, tools, fuel, machinery and equipment used in such facility or sales of and installation services of a fuel cell.

(B) For purposes of this subdivision, (i) "fuel cell" means a device that directly or indirectly produces electricity directly from hydrogen or hydrocarbon fuel through a noncombustive electro-chemical process, (ii) "machinery and equipment" means tangible personal property which is installed in a fuel cell manufacturing facility operated by a fuel cell manufacturer, and the predominant use of which is for the manufacturing of fuel cells, and (iii) "fuel cell manufacturing facility" means that portion of a plant, building or other real property improvement used for the manufacturing of fuel cell parts or components or for the significant overhauling or rebuilding of such parts or components on a factory basis.

Sec. 10. Section 12-412 of the general statutes is amended by adding subdivision (117) (Effective July 1, 2007, and applicable to sales occurring on or after July 1, 2007):

(NEW) (117) (A) Sales and installation services of any of the following energy efficient technologies: A photovoltaic module, geothermal system, solar thermal system, wind turbine, cogeneration system, under floor air distribution system or green roof.

(B) For the purposes of this subdivision, "photovoltaic module" means a renewable form of energy designed and engineered to convert solar radiation into usable energy; "geothermal system" means a system that uses hot water or steam produced by the extreme heat contained in magma within the Earth's core to turn a steam turbine and generate electricity; "solar thermal system" means a system that concentrates the sun's rays with mirrors or other reflective devices to heat a liquid to create steam to turn a generator and create electricity; "wind turbine" means a device that uses two or three long blades to collect the energy in the wind and convert it to electricity; "cogeneration system" means equipment that is designed, operated and installed as a system that produces, in the same process, electricity and exhaust steam, waste steam, heat or other resultant thermal energy that is used for space or water heating or cooling, industrial, commercial, manufacturing or other useful purposes; "under floor air distribution system" means a system that uses the open space between the structural concrete slab and the underside of a raised floor system to deliver conditioned air from the air handling unit directly into the occupied zone of the building; and "green roof" means a roof that consists of vegetation and soil, or a growing medium, planted over a waterproofing membrane and may include additional layers, such as a root barrier and drainage and irrigation systems.

Sec. 11. Section 12-81 of the general statutes is amended by adding subdivision (77) (Effective October 1, 2007, and applicable to assessment years commencing on or after October 1, 2007):

(NEW) (77) (A) Subject to authorization of the exemption by ordinance in any municipality, and subject to the provisions of subparagraph (B) of this subdivision, any of the following systems that are not eligible for exemption under subdivision (57) or (63) of this section installed on or after July 1, 2007: Photovoltaic module, geothermal system, wind turbine, under floor air distribution system or green roof. The ordinance shall establish the number of years that a system will be exempt from taxation, except that it may not provide for an exemption beyond the first fifteen assessment years following the installation of a system.

(B) As used in this subdivision: (i) "Photovoltaic module" means a renewable form of energy designed and engineered to convert solar radiation into usable energy and which meets standards established by regulation, in accordance with the provisions of chapter 54 of the general statutes, by the Secretary of the Office of Policy and Management; (ii) "geothermal system" means a system that uses hot water or steam produced by the extreme heat contained in magma within the Earth's core to turn a steam turbine and generate electricity and that meets standards established by regulation, in accordance with the provisions of chapter 54 of the general statutes, by the Secretary of the Office of Policy and Management; (iii) "wind turbine" means a device that uses two or three long blades to collect the energy in the wind and convert it to electricity and which meets standards established by regulation, in accordance with the provisions of chapter 54 of the general statutes, by the Secretary of the Office of Policy and Management; (iv) "under floor air distribution system" means a system that uses the open space between the structural concrete slab and the underside of a raised floor system to deliver conditioned air, from the air handling unit directly into the occupied zone of the building and that meets standards established by regulation, in accordance with the provisions of chapter 54 of the general statutes, by the Secretary of the Office of Policy and Management; and (v) "green roof" means a roof that consists of vegetation and soil, or a growing medium, planted over a waterproofing membrane and may include additional layers, such as a root barrier and drainage and irrigation systems and that meets standards established by regulation, in accordance with the provisions of chapter 54 of the general statutes, by the Secretary of the Office of Policy and Management.

(C) Any municipality that adopts an ordinance authorizing an exemption provided by this subdivision may enter into a written agreement with an applicant for the exemption, which may require the applicant to make payments to the municipality in lieu of taxes. The agreement may vary the amount of the payments in lieu of taxes in each assessment year of the agreement, provided the payment in any assessment year is not greater than the taxes which would otherwise be due in the absence of the exemption. Any agreement negotiated under this subdivision shall be submitted to the legislative body of the municipality for its approval or rejection.

(D) Any person claiming the exemption provided in this subdivision for any assessment year and whose application has been approved in accordance with subparagraph (C) of this subdivision shall, on or before the first day of November in such assessment year, file with the assessor or board of assessors in the town in which the system is located a written application claiming the exemption. Failure to file the application in the manner and form as provided by such assessor or board within the time limit prescribed shall constitute a waiver of the right to the exemption for such assessment year. Such application shall not be required for any assessment year following that for which the initial application is filed, provided if such system is altered in a manner which would require a building permit, such alteration shall be deemed a waiver of the right to such exemption until a new application, applicable with respect to such altered system, is filed and the right to such exemption is established as required initially.