Green Building Law Blog : Green Building Lawyer & Attorney : Shari Shapiro: Obermayer Rebmann Maxwell & Hippel Law Firm : Environmental, LEED

Last week, the USGBC announced its list of the Top 10 Pieces of Green Building Legislation in the 111th Congress.  Top of the list were the American Recovery and Reinvestment Act, better known as the Stimulus Bill, and the American Clean Energy and Security Act, better known as Waxman Markey.  I have posted about these pieces of legislation extensively--here for Waxman-Markey posts and here for ARRA posts.  So I was interested to see what the rest of the list had to offer in terms of overall perspective on Federal regulation of green buildings:

1. It's all about incentives.

Heaven forbid that Congress should force anyone to do anything.  With the exception of Waxman-Markey, the bills selected by the USGBC are all incentive based, providing funds for energy efficiency, water savings, etc. 

2. It's not very innovative.

There are only two bills on the list which I consider to be innovative or interesting.  The Federal Personnel Training Act of 2010 (yet to be introduced) which focuses on training federal personnel to operate and maintain high performance buildings, and S. 1619, the Livable Communities Act of 2009 which seeks to establish an Interagency Council on Sustainable Communities and provides $4 billion in grants to incentivize integrated community planning and implementation of sustainable projects. I like the first bill because it recognizes the need to raise the skills of implementing federal employees to realize the benefits of high performance buildings, and I like the second because it recognizes the linkage between planning and sustainability.   

3. Building Codes are not addressed.

Waxman-Markey, and its Senate counterpart The American Clean Energy And Leadership Act, both have some provision for creating a national energy efficient building code.  The other bills, however, do not attempt to address the key policy lever of building codes to enhance sustainable construction and save resources. This is probably because of the enormous political fight involved, both in wresting control of building codes away from states and local governments, and with the private interests involved in the building industry.   

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I will make an admission.  I took tax in law school, and, it was the academic equivalent of having my left arm sawed off without anaesthesia.  Why? Mostly because things which should have been clear seemed hopelessly obscure.  Now I deal with advising clients on incentives available for sustainable projects, and the tax code and I have had to battle to a stalemate.  At least, I battle, and the tax code just sits there impentarably.

One of the features which is particularly difficicult is the relationship between 26 USC 45, which deals with tax credits for producing renewable energy (the "production tax credit" or PTC), 26 USC 48 which deals with tax credits for investing in renewable energy equipement (the "investment tax credit" or ITC) and the Renewable Energy Grant created by the ARRA.  All three of these relate to businesses which have installed renewable energy technologies, like solar, wind and geothermal.  It should be clear and easy to understand which ones apply to your business and what the incentive will be.  As with all things related to the tax code, however, it is not.

I am going to attempt to clear up some of the obscurity, but, as with all information on this blog, it is for informational purposes only, not legal advice; and you should consult your legal and financial advisor to provide you with proper advice for your business.

The incentives are mutually exclusive--The PTC and the ITC cannot both be taken, and they can be swapped for the REG, but you cannot take the PTC/ITC and the REG.

In plain english, it appears that the PTC is designed for renewable energy sources where the power is designed to be sold to others as a Renewable Energy Credit, and the ITC is designed for renewable energy sources where the power is used on-site.  The Renewable Energy Grant allows companies which have invested in either type of renewable energy capacity to receive cash, as opposed to a tax credit, which is helpful particularly if the company has no tax liability or a tax loss. 

 There are some resources available to help you sort through this morass.  The DSIRE database has quick summaries of available state and federal incentives.  The Utah Clean Energy site has a nice summary of the renewable energy features of the ARRA.   The DOE site has a useful summary of renewable energy incentives for businesses as well.

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In July, I wrote an analysis of the “green” spending in the American Reinvestment and Recovery Act—ARRA, also known as the “stimulus bill.” I concluded that as of July the spending on green programs accounted for only .28% of the total allocation for those programs in the ARRA-- $33.2 million had been paid out for green stimulus programs, and an additional $307 million in public transit dollars.

So…where are we four months later? More money has been paid out--about $1.5 billion--but it pales in comparison to the $83.8 billion  paid out in tax benefits as of 11/06/09, and spending on non-green projects.

Here are the stats in detail:

Energy Efficiency/Renewable Energy--Department of Energy

As of 7/17/09 the Department of Energy had paid out $264,457,144. $16,796,000 had been awarded for energy efficiency and renewable energy projects, of which $3,189,150 had actually been awarded. BOTTOM LINE IN JULY: $3 million

As of 11/06/09, the Department of Energy had paid out $1,346,197,498. $16,796,000 had been awarded for energy efficiency and renewable energy, of which $10,651,341,856 had actually been awarded, and $347,779,891 paid out. BOTTOM LINE IN NOVEMBER: $347.8 million.

Increase from July: $344.8 million.

High Performance Green Buildings--General Services Administration

As of 7/17/09 overall the GSA has paid out $12,743,040. of available $656,418,268 of which $6,807,468 has been paid out for federal buildings, which includes high performance building projects. According to the GSA, $4,500,000,000 was appropriated by Congress, $318,750,279 obligated to date (contracts awarded) and $230,771 outlayed to date (work completed & paid).
 

As of 10/06/09 overall the GSA has paid out $333,444,141, of which $67,324,333 been paid out for federal buildings, which includes high performance building projects.

Public Transit--Department of Transportation

As of 7/17/09 the DOT has paid out $773,662,175 of a total available $22,188,399,591. For rail and other transit funding, including Amtrak, obligations of $3,921,784,326.72, outlay of $306,918,718.00 (this includes state block grants).  BOTTOM LINE IN JULY: $307 million in public transit funding outlaid as of 7/17/09.

As of 10/30/09 the DOT has paid out $5,551,384,466 out of a total available $30,514,836,708. For rail and other transit funding, including Amtrak, obligations of $7,539,142,781.45, outlay of $824,343,952.21 (this includes state block grants).  BOTTOM LINE IN NOVEMBER: $824 million in public transit funding outlaid as of 10/30/09.

Increase from July: $517 million.

Everything the EPA Is Doing--Environmental Protection Agency

As of 7/17/09, EPA has paid out $30,515,805 of the $5,713,481,497 it was allocated. Assuming that all that the EPA does is in some way green related, and this is a big assumption on my part, as much of the EPA funds have been dedicates to water resources and cleanup of hazardous sites, that adds another $30 million. BOTTOM LINE IN JULY:  $30 Million

As of 11/06/09, EPA has paid out $365,636,685. Assuming that all that the EPA does is in some way green related, and this is a big assumption on my part, as much of the EPA funds have been dedicates to water resources and cleanup of hazardous sites, that adds another $366 million. BOTTOM LINE IN NOVEMBER:  $366 Million

Increase from July: $336 million.

So?

The overall spending—i.e. money that has been paid out for green projects—in the first 10 months of 2009 amounts to over $1.5 billion. This is not nothing, and a vast improvement from the summer. On the other hand, $83.8 billion has been paid out in tax benefits as of 11/06/09, and allocation on highway infrastructure by the Department of Transportation alone was $20.2 billion of which $3.7 billion has been paid out. 
 

**A word about methodology--all of the above statistics were gleaned from Recovery.gov , the Recovery websites of the individual agencies, and my personal agency contacts.  For the DOT recovery site, go here.  For the GSA recovery site, go here.  For the DOE recovery site, go here. For the EPA recovery  site, go here.  There is a wealth of information available, and I welcome any input or different statistical or mathematical analyses from the Green Building Law Community.**

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I know, I said I was going on maternity leave, but before I do so, I will appear on MSNBC tomorrow, November 17, 2009 at 2:30 E.S.T. to discuss green spending through the American Reinvestment and Recovery Act, also known as the stimulus bill.  My original post on this topic is available here. 

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