The Sustainable Communities Act of 2010

HB 475, The Sustainable Communities Act of 2010, passed by the General Assembly shortly before the 2010 session ended earlier this month, replaces and expands the former Maryland Heritage Structure Rehabilitation Tax Credit, offering income tax credits to further the related goals of encouraging the renovation of historic buildings and driving development to areas that are already relatively high density. In addition to providing tax credits, the legislation is intended to be a means of channeling state and federal aid to preferred areas. The bill favors construction in “Sustainable Communities.”

The first requirement to qualify as a Sustainable Community is that the community be in a Priority Funding Area. Under Maryland’s smart growth policy, Priority Funding Areas are those areas that Maryland state and local governments have designated for encouragement and support of economic development and new growth. Such areas include the entire area inside the Washington and Baltimore Beltways and urban and dense suburban locations throughout the state; for a map, click here. The second requirement is that the community must be within an area of Transit-Oriented Development, in a BRAC Revitalization and Incentive Zone (“BRAC Zone” for short), or otherwise determined to be eligible for reinvestment by the Smart Growth Subcabinet.

There is $10 million for fiscal 2011 for tax credits under this bill.  Credits are to be awarded by a competitive ranking system among the applicants. Governor O’Malley has not yet signed this bill, but its passage was among the Administration’s legislative goals for the 2010 session, so it seems likely he will sign it in the next few weeks.

The Green Premium for New School Construction

Will Pearce authored an article on the green premium for new school construction for the latest edition of the Whiteford, Taylor & Preston Green Building and Sustainability Newsletter.  The phrase "green premium" refers to the additional construction cost associated with complying with green building standards.  All new public school construction in Maryland will have to comply with the High Performance Buildings Act of 2008; the State is picking up half the green premium until 2014, after which it will be the full responsibility of the county school boards.  Click here to read the article.

Earth Day: Looking Forward

As Earth Day comes to a close, let's take a quick look at what we might see on Earth Days to come:

Earth Day Future (near term) -- Earlier this week, we looked at green building-related bills that passed the Maryland General Assembly.  One that didn't may well get passed by next Earth Day: SB 479, a bill that would have permitted the use of Green Globes to attain sufficient performance under the High Performance Buildings Act, failed to get a floor vote in the House after passing the Senate 47-0.  Federal agencies, including the Department of Veterans Affairs, are already using Green Globes certification to meet their green building goals, as an alternative to LEED.

Earth Day Future (long term) -- Under the Energy Independence and Security Act of 2007, fossil fuel use by newly constructed federal buildings will have to be completely eliminated by 2030.  Two new cutting-edge federal buildings coming on line this year -- a NASA facility in the Bay Area dubbed "Sustainability Base" and a Department of Energy building outside Denver -- provide us with a glimpse of how federal agencies plan to reach this goal.  Both intend to achieve net-zero energy usage and attain LEED Platinum certification.

Maryland General Assembly 2010 Session: A Summary of Green Building-Related Legislation

The Maryland General Assembly’s 2010 session has come to a close, with the General Assembly having passed a number of bills related to green building.  We’ll be taking a look at HB 475, titled “Smart Green and Growing: The Sustainable Communities Act of 2010” and passed just before the session ended, later this week [Update: our summary of HB 475 can be found here].  The other bills of note to the green building industry concern, among other things, a new State initiative for Environmentally Preferable Purchasing, a new LEED mandate for community college projects, and homeowners’ and condominium owners’ right to use clotheslines to dry their laundry.  Listed below are summaries of these and a few other relevant bills, with links to the text as passed:

• HB 1164 substantially broadens Maryland’s use of Environmentally Preferable Purchasing, sometimes referred to as “Green Procurement.” It creates the Maryland Green Purchasing Committee, which is charged with drafting a strategy to increase environmentally preferable purchasing as well as a best practices manual for such purchasing. The committee is specifically directed to look into smart meters, the reduction of operating times for HVAC systems in State buildings, increased energy efficiency from new computer servers and data storage centers, and the purchase of food containers made of preferred materials. The Committee will have to report on its efforts annually to the General Assembly. Additionally, the bill mandates that recycled paper make up 90% of the paper purchased by the Department of General Services and directs that the State use compost for fertilizer “to the maximum extent practicable.” You may have heard about this bill in the context of its proposed elimination of State purchase of polystyrene products, which ran into opposition from Solo Cup Co. That provision was eliminated from the bill as passed.
• HB 1044 extends the requirements of the High Performance Building Act of 2008 to projects funded by the State’s Community College Grant Program, under which the State pays for a percentage of new community college buildings and the local government pays for the rest. The High Performance Building Act provides that most new or renovated State buildings and new public school buildings are to be built to comply with the requirements of the LEED Silver rating or its equivalent. Most new construction on Maryland community college campuses will now also have to meet this LEED Silver or equivalent standard. Interestingly, on pages 3 and 4 of the Fiscal and Policy Note for this bill, the Department of Legislative Services surveys the cost premium for LEED compliance for completed State-built LEED-compliant buildings and estimates that new community college projects will see a two percent construction cost increase resulting from the LEED mandate. HB 1044 does not provide for additional state funding for these projects.
• SB 224 bans homeowners’ associations and condominium associations from enacting complete prohibitions on the use of clotheslines for clothes drying. While such associations may place reasonable restrictions on the placement, size and appearance of clotheslines, they can only do so after a public meeting. With this bill, Maryland joins a number of other states in passing so-called “right-to-dry” legislation. Clotheslines have in recent years experienced a resurgence in popularity as an energy-saving method of drying clothes. However, many HOA’s and condo associations have enacted bylaws that ban clotheslines, which are often considered eyesores. Those bylaws will need to be revisited in light of SB 224.
• HB 1062 permits Maryland counties and the City of Baltimore ("counties" for short) to create property tax credits for real property used for urban agriculture. The property subject to such tax credit must be between one-eighth of an acre and two acres in size, be used exclusively for agriculture, and lie in a Priority Funding Area. Counties are permitted to enact stricter requirements for the tax credit. Under Maryland’s smart growth policy, Priority Funding Areas are those areas that Maryland state and local governments have designated for encouragement and support of economic development and new growth. These include the entire area inside the Washington and Baltimore Beltways and urban and dense suburban locations throughout the state; for a map, click here. It is up to the counties to enact the credit, and they will take a revenue hit in so doing. Given the current economic climate, it is unclear how many counties will choose to create this tax credit in the near future, and how broad those programs will be.
• HB 1112 permits Carroll County to alter its existing green building tax credit program by extending it to residential buildings. It is likely the county will elect to use this new authorization to provide tax credits for green residential building, as the bill was sponsored by the Carroll County Delegation. Martha Perkins analyzed Carroll County’s existing green building tax credit program in this 2009 article for the Green Building and Sustainability Newsletter.

To date, Governor O’Malley has not signed any of the bills listed above. Maryland’s Governors typically extend bill signings for several weeks after the close of the legislative session.

-- Will Pearce, LEED AP BD+C

Sustainability Efforts at Aberdeen Proving Ground

Will Pearce recently authored a post over on the Whiteford, Taylor & Preston BRAC Blog on Aberdeen Proving Ground's profile in the Maryland Green Registry.  Check his post out here.  The BRAC Blog, which is dedicated to covering the challenges and opportunities presented by the Department of Defense’s Base Realignment and Closure process (“BRAC” for short) from a legal perspective, is run by members of WTP's Government Contracts/BRAC Industry Group.

Whiteford, Taylor & Preston Green Building and Sustainability Newsletter

Every two weeks, Whiteford, Taylor & Preston’s Green Building and Sustainability Industry Group publishes an e-newsletter, edited by Adam Baker, LEED AP BD+C, covering sustainability issues that impact a wide array of industries, including Real Estate, Construction, Government Contracts, Manufacturing, and Intellectual Property. The latest edition can be found here. Dino Lafiandra discusses the Maryland General Assembly's choice to use millions of dollars from the Regional Greenhouse Gas Initiative that had been initially earmarked to fund energy efficiency programs to instead fund the state's direct bill pay assistance program, which helps low income families pay their utility bills.

LEED Roundup

What we've been reading about LEED certification in the past week:

• The Philadelphia Inquirer looks at commercial landlords' divergent attitudes re: LEED certification.  No surprises here -- some landlords have no use for it, while others are scrambling to get approval from the green powers that be.  The article doesn't really scratch much below the surface, unfortunately, largely failing to explain or reconcile the differences -- e.g., why some tenants favor LEED certification and others don't feel the need to lobby their landlords for it, or if there's something other than tenant demand (such as tax benefits) driving the certification efforts.  The article's timing is keyed to the first LEED-EB (Existing Building) certification in Philadelphia for an existing multi-tenant structure, achieved by 1601 Market Street. 
• Frank Gehry is among those who are skeptical of the benefits of LEED certfication, according to this post from BusinessWeek's Next:Innovation and Design blog.  At a recent Chicago function, the renowned architect complained that LEED credits are given for "bogus stuff" and that the cost of compliance outweighed the benefits.
• WRC Channel 4 Washington notes that the Twin Cities' Target Field, new home of the Minnesota Twins, has surpassed Washington's Nationals Park as the "greenest" stadium in baseball.  The new ballpark has attained LEED Silver status, and scored two points higher than the home of the Nats, which is also LEED Silver.  The additional cost associated with certification has been reported by the St. Paul Pioneer-Press to be just $2 million on a $545 million project, less than one percent of the total project cost.  Target Field might not be the greenest for long: the new stadium being built for the Florida Marlins will also seek LEED Silver certification, so it could potentially accrue more points than Target Field.

-- Will Pearce, LEED AP BD+C

Upcoming Events

Scroll down and check out our Events Calendar, on the lower right hand side of this page, listing a wide array of networking opportunities, educational seminars, and other events of interest to those in the green building industry.

We'd like to highlight some events from the calendar of particular relevance in April, May, and June 2010 -- those that Whiteford, Taylor & Preston is sponsoring, or at which Whiteford, Taylor & Preston attorneys will be speaking:

• At the National Association of Independent Sureties' convention in Phoenix, Martha Perkins will give a presentation on "Green Expectations: Identifying and Managing the Risks Unique to Green Building" on April 15.
• On April 19 from noon-2:00 pm, Whiteford, Taylor & Preston will host a presentation by Dr. Gregory Smith of the Patuxent Wildlife Research Center of the US Interior Department about the first US-Vietnam bilateral Working Group on Climate Change meeting, held on March 31-April 1, 2010 in Hanoi, which Dr. Smith attended.  Those in attendance will also be updated regarding the upcoming Maryland-Asia Environmental Partnership and Washington Laboratories Trade Mission to Vietnam, scheduled for May 22-28, 2010.  Please RSVP to 443-275-2489.
• Martha Perkins is among the Facilitators for a course presented by the Washington Metropolitan Chapter of the Community Associations Institute, "Green Common Interest Community Management." This half-day seminar will be conducted twice: April 20 in Alexandria and April 22 in Beltsville. The course provides information about Going Green, LEED, Energy Star, and other Green-related government programs. Attendees will learn about the pros and cons of sustainable waste programs, modifications to and replacement of appliances, green heating and air conditioning, low energy lighting, fuel efficient vehicles, alternative utility sources, power consumption, building sustainability, and green landscaping. For more information and to register, please click here.
• The ChinaWise Business Seminar will be held on April 27 at Whiteford, Taylor & Preston's Baltimore Office, 7 St. Paul Street, Nineteenth Floor, Baltimore. As China buys, builds, and upgrades, its growing economy is rich with business opportunities for U.S. firms.  U.S. government officials as well as corporate and association executives will share insights and perspectives to help companies minimize potential risks, while maximizing rewards associated with pursuing commercial opportunities in China.  Alex Koff, chair of the firm's Global Practice, will speak on "Standards & Intellectual Property: Implications for Your Business," with Elise Owen of the American National Standards Institute.  The program will conclude with a networking reception hosted by the Baltimore-Xiamen Sister City Committee and Maryland China Business Council in support of a September 2010 Trade/Business Mission to China. For more information and to register, please click here.
• One forum in which American companies seek to protect their intellectual property rights in cutting edge technology is the U.S. International Trade Commission ("ITC" for short).  At the American Bar Association seminar, Live at the ITC: Second Annual Forum on Section 337 of the Tariff Act of 1930, Alex Koff will moderate a Roundtable Discussion on "Foreign Discovery in Section 337 Investigations."  To register, click here.
• Whiteford, Taylor & Preston will sponsor the May 11 event, "Bioparks Update," at which speakers from the University of Maryland System, Johns Hopkins University, and Forest City Science + Technology Group will update attendees on progress at Maryland's research parks: Science City, Shady Grove, UMB BioPark, Science and Technology Park@Hopkins, and bwtech@umbc.  A presentation of the Greater Baltimore Committee, this event starts at 8:00 am at the UMB BioPark, 801 West Baltimore Street, Baltimore.  For more information and to register, please click here.
• Alex Koff will be among the speakers at the University of Baltimore's Executive Forum on Global Business, which will be held on May 13.  Alex's presentation will be on "Understanding Export Licensing."  For more information and to register, please click here.
• Adam Baker, LEED AP BD+C will be presenting at the 2010 RealGreen Mid-Atlantic Conference & Expo in Washington, DC on the morning of June 22.  Adam and his co-presenters, Harid Karimi of the District of Columbia Department of the Environment and Chris VanArsdale of the Canal Park Development Association, Inc., will speak on "Public Stormwater and Green Building Initiatives in the Chesapeake Bay Watershed." 

If you have any events you'd like to have listed on our Events Calendar, please e-mail us at greenbuildinglawbrief@gmail.com.

-- Will Pearce, LEED AP BD+C

ConsensusDOCS 310 Green Building Addendum

One of the signs green building is moving into the mainstream is the formulation of industry standard form contracts specifically tailored for green construction projects.  Perhaps the leading such document is the ConsensusDOCS 310 Green Building Addendum, which among other things provides a means by which parties can allocate risks unique to green building.  Martha Perkins, a Partner in Whiteford, Taylor & Preston's Washington office, served on the Associated General Contractors of America's Contract Documents Committee Green Building Task Force, which drafted the Green Building Addendum.  Her summary and analysis of the Green Building Addendum was recently featured in the National Association of Surety Bond Producers' Legal Spotlight, and can be found here.

Welcome to Green Building Law Brief

Green Building has exploded in popularity over the last few years.  Area governments increasingly mandate compliance with green standards for new private and public construction.  By 2013, some estimates suggest up to twenty-five percent of new commercial non-residential starts will be intended to meet at least one green building standard, such as LEED certification or Green Globe, and the value of the green building market overall will exceed $100 billion.  Such increases are just one part of the new Green Procurement efforts by private industry and federal, state, and local governments, as purchasing departments seek to benchmark the sustainability of the goods and services they procure.

Green Building Law Brief is a new blog from the members of Whiteford, Taylor & Preston's Green Building and Sustainability Industry Group, designed to analyze the legal ramifications of these new Green Building and Green Procurement initiatives.  Please feel free to join our discussion by posting in our Comments section, or e-mailing us at greenbuildinglawbrief@gmail.com.