Red White Green Recent Changes To Federal Green

Red White & Green: Recent Changes To Federal Green Building And Renewable Energy Policy Shari Shapiro, J. D. , LEED AP

The Federalism Question l "But as the plan of the [Constitutional] convention aims only at a partial union or consolidation, the State governments would clearly retain all the rights of sovereignty which they before had, and which were not, by that act, EXCLUSIVELY delegated to the United States. “ -- Alexander Hamilton

Change In Legal Trends l l l Historically, environmental regulations has relied on national “command control” approach to compliance Federal environmental enforcement and stewardship in decline since 2000. Trend is reversing due to: – – 2008 election cycle Public awareness and concern about Global Warming Energy price spike State and Local Action

Types of Green Building and Renewable Energy Policies l Command Control Type Regulations – – – l Financial Incentives – l 2008—Portland enacts “feebate” structure Non-Financial Incentives – – l July 17, 2008—California adopts green building code for all new construction statewide 2007—Boston, Washington, San Francisco, Los Angeles mandate green building requirements for new construction above a specified square footage Waxman-Markey Nationwide Energy Efficient Building Code Expedited permitting; increased FAR, building height or density for green buildings Green Jobs training Government As Market Participant

Growth Of Green Building And Renewable Energy Policies l Green practices are being incorporated into state and local zoning and building codes and ordinances – – l 14 percent of U. S. cities with populations of more than 50, 000 have green building programs The number of counties with green building programs has grown by nearly 400 percent since 2003 Federal statutes require federal agencies to procure recycled material, reduce energy consumption and prevent pollution.

Areas of Development At The Federal Level l l Federal Energy Policy Federal Leadership in Environmental, Energy, and Economic Performance Executive Order SEC Climate Change Risk Disclosure Guidelines Incentives Other Federal Policies On The Horizon

American Clean Energy Security Act (aka Waxman-Markey)—Cap & Trade l l The bill was approved by the House of Representatives on June 26, 2009 by a vote of 219 -212 The bill proposes a cap and trade system, under which the government sets a limit (cap) on the total amount of greenhouse gases that can be emitted nationally. Companies then buy or sell permits to emit these gases, primarily carbon dioxide (CO 2).

American Clean Energy Security Act (aka Waxman-Markey)—Cap & Trade GHG emission reductions (benchmark is 2005 emission levels) Year Required Annual Percentage 2012 3. 0 2020 17. 0 2030 42. 0 2050 83. 0

American Clean Energy Security Act (aka Waxman-Markey) l Section 201—National Energy Efficiency Building Code – – – 30 percent reduction in energy use relative to a comparable building constructed in compliance with the baseline code…effective January 1, 2014, for residential buildings, and January 1, 2015, for commercial buildings, 50 percent reduction in energy use relative to the baseline code; and…January 1, 2017, for residential buildings, and January 1, 2018, for commercial buildings, Every 3 years thereafter, respectively, through January 1, 2029, and January 1, 2030, 5 percent additional reduction in energy use relative to the baseline code. l Section 131, 132—SEED funds for state energy efficiency programs l Section 202—REEP Program--EPA Administrator to develop and implement standards for a national building retrofit policy for residential and nonresidential buildings. Funding will be made available through REEP to the State Energy Programs for administration of the program.

American Power Act—Cap & Trade l l l Emissions would be cut by 17 percent below 2005 levels by 2020 and by more than 80 percent by 2050. It would also provide for a separate, more urgent limit -and-reduction schedule for super-greenhouse gases and black carbon. Introductory floor and ceiling prices are set at $12 (increasing at 3 percent over inflation annually) and $25 (increasing at 5 percent over inflation annually), respectively. The bill only requires the largest sources of pollution to comply with reduction targets: those who produce more than 25, 000 tons of carbon pollution annually.

American Power Act—Cap & Trade l l l Restrictions would take effect in 2013 for power plants and transportation fuels and in 2016 for manufacturers. Two-thirds of emissions revenues not used for deficit reduction will be sent back to consumers. States will not be permitted to operate capand-trade programs for greenhouse gases.

American Power Act—Other Provisions l l Increased funding for nuclear loan guarantees to $54 billion, ten percent tax credit for the construction of certain nuclear power facilities and tax-exempt bonds to be used for public-private partnerships for advanced nuclear power facilities. $2 billion for clean coal Expands the clean energy manufacturing tax credit by $5 billion, providing incentives for the production of advanced vehicles and component parts and funding investments in energy efficiency innovation. Carbon tariff

American Power Act—Energy Efficiency l States are allocated between 2. 5% and 1% of all green house gas emission allowances. – l Of that allocation, . 5% must go to Indian Tribes. With the remainder, the states may use for a variety of programs, including energy efficiency, renewable energy and transportation. – 1) Energy efficiency purposes, including implementation of programs related to— l l l (A) building codes that improve energy efficiency; (B) energy-efficient manufactured homes; (C) building energy performance labeling; (D) low-income community energy efficiency improvements; and (E) energy efficiency retrofits of existing buildings.

Federal Energy Policy, Cont. l l November 5, 2009 --Clean Energy Jobs and American Power Act (S. 1733) was passed by the Senate Environment and Public Works Committee. Several other bills in progress in the Senate Some compilation of the bills likely to be developed this year Passage of a comprehensive bill is unclear, but energy efficiency is likely to be part of a smaller energy bill

Federal Leadership in Environmental, Energy, and Economic Performance Executive Order l l October 5, 2009 --President Barack Obama issued an executive order entitled "Federal Leadership In Environmental, Energy and Economic Performance. " EO sets out ambitious goals for every federal agency to pursue sustainable priorities, including developing net-zero buildings, and to report on their environmental performance

Climate Change Risk Shareholder Resolutions l 2005 SEC guidance concluded that resolutions [about climate change risk] could be omitted under SEC Rule 14 a-8 (i)(7) as ordinary business matters, not suitable for shareholder consideration l New 2010 SEC revisions to Staff Legal Bulletin No. 14 E (CF) state that in deciding when a company can omit a resolution, rather than focusing on whether a resolution relates to an evaluation of risk, the staff will instead focus on the underlying subject matter to which the risk pertains.

Climate Change Risk Disclosures l l Jan. 27, 2010 — The Securities and Exchange Commission voted to provide public companies with interpretive guidance on existing SEC disclosure requirements as they apply to business or legal developments relating to the issue of climate change. Areas of risk: – – Impact of Legislation and Regulation Impact of International Accords Indirect Consequences of Regulation or Business Trends Physical Impacts of Climate Change

Incentives—ARRA l l Signed into law February 17, 2009 Green Building Funding – – – General Services Administration $4. 5 billion Department of Defense $3. 6 billion States $3. 1 billion and $3. 2 billion

Incentives— Federal Tax Incentives l COMMERCIAL TAX DEDUCTION – – Up to $1. 80 per square foot is available to owners or designers of new or existing commercial buildings that save at least 50% of the heating and cooling energy of a building that meets ASHRAE Standard 90. 1 -2001. Partial deductions of up to $. 60 per square foot can be taken for measures affecting any one of three building systems: the building envelope, lighting, or heating and cooling systems

Incentives— Federal Tax Incentives l RESIDENTIAL TAX CREDITS l Tax credits are available at 30% of the cost, up to $1, 500, in 2009 & 2010 (for existing homes only) for: – – – l Windows and Doors Insulation Roofs (Metal and Asphalt) HVAC Water Heaters (non-solar) Biomass Stoves Tax credits are available at 30% of the cost, with no upper limit through 2016 (for existing homes & new construction) for: – – – Geothermal Heat Pumps Solar Panels Solar Water Heaters Small Wind Energy Systems Fuel Cells

Other Federal Legislation On The Horizon l l l Building Star—S. 3079 --provides rebates for retrofitting commercial and multifamily buildings in existence as of December 31, 2009 with energy efficient components, like insulation, window, doors, HVAC equipment, etc. Federal Personnel Training Act of 2010 (yet to be introduced)--focuses on training federal personnel to operate and maintain high performance buildings Livable Communities Act of 2009 -- S. 1619 --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.

For More Information l l l Green Building Law Blog-www. greenbuildinglawblog. com Pew Center--Global Climate Change Program-www. pewclimate. org SEC—www. sec. gov DSIRE Website—www. dsireusa. org USGBC—www. usgbc. org Delaware Valley Green Building Council— www. dvgbc. org