Planning and Development Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-1033

Title:

AN ACT ESTABLISHING A TAX CREDIT FOR GREEN BUILDINGS.

Vote Date:

3/13/2009

Vote Action:

Joint Favorable Substitute

PH Date:

3/6/2009

File No.:

 

SPONSORS OF BILL:

Rep. Brendan Sharkey, 88th District

REASONS FOR BILL:

This bill creates a tax credit if you meet or exceed LEED standards. LEED standards are criteria which rate a structures' energy efficiency.

RESPONSE FROM ADMINISTRATION/AGENCY:

None Given

NATURE AND SOURCES OF SUPPORT:

Bill Ethier, Home Builders Association of Connecticut: We support this bill, but we strongly urge the committee to amend SB:1033 to include other nationally recognized green building rating systems or standards. We are deeply involved in green building issues. Tax incentives toward green building are a good idea, but a tax credit for only one such system inappropriately interferes in this competition.

Northeast Connecticut Council of Governments: We support the intent put forth in this bill, but we have some suggestions. The eligibility standards would preclude development in many rural areas in our state from taking advantage of such incentives and therefore hindering the use of green building approaches. Transit oriented development does not always work in a rural setting. The bill defines Enterprise zone making such properties eligible later. However, there are also Enterprise Corridor Zones; we suggest that these also be eligible. Lastly line seventy-nine uses the term “major renovation” but, there is no definition as to what this means.

Greater New Haven Chamber of Commerce: We support this bill because we believe this measure would encourage development in our cities. These tax credits help the environment and at the same time strengthen investment in our local economy. Furthermore, the tax credits can generate and promote smart growth within our cities. This bill is in alignment with President Obama's Economic Stimulus package. Funds will be awarded to state & local government to support development of new energy.

Connecticut Chapter of the American Planning Association: We support this bill because if approved it will establish a much needed benefit for green building projects. With this tax credit LEED will be more accessible to private sector and that benefits all of our communities.

Charles J. Rothenberger, Staff Attorney, Connecticut Fund for the Environment: I support this bill because it will provide tax credits to encourage the construction of transit oriented energy efficient green buildings in the state of Connecticut. As Connecticut attempts to address rising energy costs and improve the overall quality of life for its citizens, high performance transit-oriented development provides a sound solution.

Bruce Becker, President, Becker and Becker: I support this bill because our ambition has always been to create the greenest building in the state of Connecticut, yet as the economy constricts and costs remain high, it has become impossible. My firm is now working on a major $190 million development project located in downtown New Haven. Last year I cautioned that the limited incentives made it difficult to build green in Connecticut. Today it is not just difficult, it is all but impossible. Neighboring states, like New York, have long-established policies of actively promoting green building, which has resulted in a robust market that has made green development standard price. The green building tax credit helped to make this possible. If we know that there is funding that will eventually come our way, we will make these additional investments. Without some assurance of funding to come, we cannot take that risk. Establishing this credit now is extremely important.

Martin Mador, Legislative and Political Chair of the Sierra Club: I am in favor of this bill because the use of tax credits to encourage green building construction is highly appropriate. The bill however, to be acceptable needs revision in four areas.

(1) It needs to explicitly say that the credits are available only to buildings which have actually earned LEED certification at the silver level or above. Such certification is necessary to confirm that the building actually meets green standards as built not as designed.

(2) Section1.(10)(c)(1)(B) must be re-written so that it is clear that the building's energy consumption is no more than 80 or 80 percent of code not 70 or 80 percent greater than code.

(3) The language in Section 1. (3) Referring to bus transit and rail, light rail, streetcar or ferry transit must be removed. This would limit credits only to green buildings associated with transit-oriented development.

(4) The tax credits in section 1. (10)(c)(2) are so generous that only a few projects could exhaust the $25 million cap. If the goal is to encourage green buildings across the state, the credits available to a single project should be reduced.

Robert N. Wienner, Principal, JDA Development Co.,LLC: I support this bill because it will simultaneously support several important public policy goals established, including promotion of Smart Growth. The green building tax credit would be useful in urban areas. Tax credit would lessen the burden of redeveloping former industrial urban areas. These sites tend to be ideal candidates; however there is a significant cost to clean up these former industrial sites. This tax credit would offset some clean-up costs.

John DeStefano J., Mayor City of New Haven: I support this bill because the City of New Haven is fortunate to be a leader in green building however, most of the green building activity has come from municipal government and non-profit institutions. Extending the green building revolution to the commercial sector is vital to the success of New Haven's economic development and job growth plans. With these tax credits, we are encouraging smart economic development to succeed in a changing global economy.

Michele L. Whelley, CEO, Economic Development Corporation of New Haven: I support this bill because it would establish a tax credit for transit-oriented projects that meet LEED green building rating system. The main objective is a partnership with the business community, to generate a business environment in New Haven. These tax credits can help investments in our local and regional economics. Furthermore, the credits can generate and promote smart growth. We must actively steer the continued growth and development. The economic stimulus bill providing $16.8 billion for the Department of Energy's Office of Energy Efficiency & Renewable encourages development of energy efficient strategies such as 360 State St the largest mix-use development in Connecticut. An allocation of funds will be awarded to state & local governments for these projects.

Sara C. Bronin, Associate professor of law, University of Connecticut School of Law: I support this bill because tax credits have proven to be a stimulant to private development activity. The same study indicates the state recoups the money invested in tax credits. This bill would have no impact on the state budget for at least three years, but would stimulate construction activity. Secondly government should aid developers with costly green projects. Without government help green building projects would be in jeopardy. Thirdly Connecticut is far behind and without changing our incentives, we will lose key investments. They will choose other states which have robust green building tax credit programs. We need to maintain our state's competitiveness. Lastly scientists have proven that construction techniques harm the environment and our health. They also generate up to 40 percent of our nation's greenhouse gases.

Marshall Collins, Counsel for the Lumber Dealers Association of Connecticut: We support green building initiatives, but request that you amend it. LDAC members will sell whatever products required under Connecticut Statues. However, please recognize that the vast majority of sustainable forests in North America, which meet the LEED standard, are under contract to major chains of suppliers. We do not believe that it is in the public interest to create monopolies. The language in this bill is restrictive to LEED. The LEED standard is not the only accepted standard.

NATURE AND SOURCES OF OPPOSITION:

None Given

Reported by: Ronald Ferraiolo

Date: 4/3/09