By J. Cullen Howe, Environmental Law Specialist, Arnold & Porter LLP
On February 3rd, President Obama launched the Better Buildings Initiative, which is intended to make commercial buildings 20 percent more energy efficient over the next decade by catalyzing private sector investment through a series of incentives to upgrade offices, stores, schools and other municipal buildings, universities, hospitals, and other commercial buildings. In addition to conserving energy, the initiative is designed to reduce energy bills for businesses by about $40 billion annually.
The initiative has five components:
1) Create a more effective tax incentive for building owners who want to do energy efficiency upgrades. The existing tax deduction, known as 179(d), provides a deduction for businesses that upgrade their facilities. This would be changed in two ways. First, the deduction would be changed to a credit. Second, the credit would be structured to reward companies for performance improvements, so the credit amount would be based on the actual energy improvements made in a specific building. According to the Administration, these changes could result in a ten-fold increase in commercial retrofits.
2) Increase access to financing for building owners looking to make investments in energy retrofits. The Small Business Administration will deploy the new tools that it received under the Small Business Jobs Act to encourage energy retrofit lending for small businesses. In addition, the Department of Energy will launch a pilot program to provide loan guarantees for projects to upgrade hospitals, schools, and other commercial buildings.
3) Launch of a “Race to Green” competitive grant program. The President’s budget will propose new competitive grants to states and/or local governments that streamline standards, encouraging upgrades and attracting private sector investment.
4) Launch of a Building Construction Technology Extension Partnership. This partnership will seek to train the next generation of commercial building technology workers and will be comprised of a training program and tools for new jobs in this area, such as energy auditing and building operations.
5) Launch of a Better Building Challenge. This challenge will encourage the private sector to upgrade their facilities and make investments that will decrease their energy use and create jobs. Partners will commit to a series of actions to make their facilities more efficient, and will in turn become eligible for benefits including public recognition, technical assistance, and best-practices sharing through a network of peers.
Reprinted with permission from Green Building Law Update Service.
The Green Building Law Update Service is a 2011 LexisNexis Top 50 Blogs for Environmental Law & Climate Change nominee.
J. Cullen Howe is an environmental law specialist at Arnold & Porter LLP. Much of Cullen's work focuses on climate change, where he attempts to educate lawyers and the public at large on the enormous cooperation necessary to adequately address this problem. In addition to his work on climate change, Cullen is the managing editor of Environmental Law in New York, edits the Environmental Law Practice Guide, Brownfields Law and Practice, the Environmental Impact Review in New York, and has drafted chapters in the Environmental Law Practice Guide on climate change and green building. Mr. Howe is a graduate of Vermont Law School, where he was the managing editor of the Vermont Law Review, and a graduate of DePauw University, where he was a member of Phi Beta Kappa.
These publications can be purchased at the Store by clicking on the above links. Lexis.com subscribers may also access them at the following links: Environmental Law in New York; Environmental Law Practice Guide; Brownfields Law and Practice; Environmental Impact Review in New York.
J. Cullen Howe is the author of Green Financing: Governmental and Private Programs Concerning Financing of Green Buildings, Ch. 2M, in Real Estate Financing (Lexis treatise), and will be discussing this development in his next update for the treatise.
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