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Creating State Incentives for Commercial Green Buildings
 

Creating State Incentives for Commercial Green Buildings

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    Creating State Incentives for Commercial Green Buildings Creating State Incentives for Commercial Green Buildings Presentation Transcript

    • Creating State Incentives for Commercial Green Buildings: Did the Nevada Experience Set an Example or Alter the Approach of Other Jurisdictions? Darren A. Prum, MBA, JD Visiting Lecturer Business Law & Finance University of Nevada, Las Vegas Environmental Law & Policy Review Symposium: "It's Not Easy Building Green” January 30-31, 2009
    • 2005 Nevada Approach to Green Building Incentives
      • Nevada AB 3 (2005) allowed:
      • Public: State government must build 2 LEED Silver or higher buildings each 2 year cycle
      • Private: (meeting or exceeding LEED Silver)
        • Sales Tax Reduction: 2% on all materials and fittings used in construction
        • Property Tax Reduction: 50% reduction on the taxes assessed for 10 years to the owners of the building
      Darren A. Prum, MBA, JD
    • 2005 Nevada Approach to Green Building Incentives
      • Nevada AB 3 (2005) Implementation:
      • Nevada Tax Commission:
        • Legislation required projects to break ground before December 31, 2005.
        • The agency qualified projects with “Letters of Intent” before the date.
        • Later the agency qualified projects in existence before the date.
      • Office of Energy:
        • Originally adopted USGBC’s LEED standard.
        • Changed the standard in 2006 to examine a development in its totality, not by building. This allowed casinos to permit smoking and gain the tax break.
      Darren A. Prum, MBA, JD
    • 2005 Nevada Approach to Green Building Incentives
      • Nevada AB 3 (2005) Results:
      • LEED registered projects jumped to 92 (2007) from 14 (2005).
      • Owners determined a return of $3 for each $1 spent building green.
      • State would lose a minimum of $940M in next 2 years alone
      • Clark County (Las Vegas) would lose $50M per year ~ 10% of tax base
      • Clark County School District would lose $700M - $900M over a 10 year period (must still be financed by the state).
      • Project City Center (World’s Largest @ $9.3B) already received $80M in tax breaks. It will receive over $900M over its life.
      Darren A. Prum, MBA, JD
    • 2007 Nevada Approach to Green Building Incentives
      • Nevada AB 621 (2007) Solution:
      • Applied to projects that received a letter from the Nevada Department of Taxation before February 1, 2007. (Grandfathered 6 projects)
      • Eliminated the Sales Tax Incentive
      • Revised the Property Tax Incentive
        • Required strict adherence to LEED standards
        • Does not apply to Education Levies
      • Limited the lost revenue to ~$493M
      Darren A. Prum, MBA, JD
    • 2007 Nevada Approach to Green Building Incentives
      • Nevada AB 621 (2007) Property Tax Incentive:
      • Nevada Office of Energy’s Regulation R116-07 §29 table for determining property tax abatements on LEED Certified buildings.
      Darren A. Prum, MBA, JD
    • Approaches to Green Building Incentives in Various States Darren A. Prum, MBA, JD State Green Incentive Type Green Standard State Financial Incentive Financial Limitations Preapproval Required Nevada Property Tax Reduction LEED Variable, 25% over 5 years to 35% over 10 years None Yes Virginia Property Tax Reduction LEED or other listed Energy Preferred Standard Left to the Local Government to decide None Unknown New York Income Tax Credit New York’s own standard Maximum of $7.50, $3.75, or $15.75 per square foot spread over 5 years $50M over a 9 year period Yes Oregon Income Tax Credit LEED 35% of eligible costs based on total square footage None Yes Maryland Income Tax Credit LEED 8% or 6% of total cost in a priority funding area with more than 20,000 square feet $25M over a 5 year period Yes New Mexico Income Tax Credit LEED Variable based on the building’s square footage $5M for commercial, $5M for residential up to 2013 Yes Hawaii Expedited Permit Processing LEED or Green Globes Not Applicable Not Applicable Not Applicable
    • Approaches to Green Building Incentives in Various States Darren A. Prum, MBA, JD Any Questions? Thank you!