Howard Co. Council to consider green building tax credits

The Howard County Council is considering this month a bill to authorize property tax credits for homeowners whose property meets environmental design standards, a measure that would make the county one of the few local governments to give such breaks.

Under the bill, owners of newly built homes that meet the "silver" standard in Leadership in Energy and Environmental Design, or LEED certification, awarded by the U.S. Green Building Council, could receive up to a 25 percent discount on their county property tax bill, while homes with the highest LEED rating could earn a 75 percent discount the first year.

LEED ratings award points for environmentally sustainable building design, construction and maintenance.

"We need to be leaders on the things that count — how we hand this world over to our future," said Council Chairman Calvin B. Ball, a Columbia Democrat who sponsored the bill.

The legislation would give homeowners in Howard who have a LEED-certified silver rating a 25 percent tax credit. Those with "gold" certifications would receive a 50 percent discount, and "platinum" ratings would yield a 75 percent discount against county property taxes.

After the second year registering for the credit, a homeowner would have a 25 percent decrease each year, lowering their tax credit allotment. After four years, the credit would expire.

"It's an incentive to offset the cost for building. It's not intended to be a tax credit forever," said the bill's co-sponsor, Councilwoman Courtney Watson, an Ellicott City Democrat.

But she added that a sunset clause is included in the bill to allow the council to re-evaluate its effectiveness in five years.

"I think it's a good bill. I think it will provide real incentives for folks considering green building" in Howard County, said Stuart Kaplow, chairman of the Maryland chapter of the U.S. Green Building Council, which administers LEED standards. "Howard County has been and continues to be a leader in the nation of promoting green building."

In May 2010, Baltimore County adopted a bill that provided up to a full property tax credit for those homes that attain the highest LEED certification, while gold certification would earn a 60 percent tax credit and silver certification would earn a 40 percent tax credit. Tax credits for all ratings last three years, according to the county's website.

Montgomery and Anne Arundel counties have similar tiered incentives that expire after several years, according to according to the Database of State Incentives for Renewable Energy, which is funded by the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy.

Carroll County has a measure similar to the proposal in Howard, according to the site, but the incentives are limited to commercial buildings only. Several counties provide tax breaks for commercial buildings only.

Howard already offers green tax credits for commercial development, but only five buildings in the county received the credit.

"We want to encourage energy efficiency and green building tech wherever we can," Watson said, adding that the bill also aims to promote new home building, which remains slow in the recovering economy.

Michael Harrison, director of government affairs for the Home Builders Association of Maryland, agreed that the "voluntary and incentive-based" bill would encourage green development.

He said however, "we'd like to see the tax credit expanded to another program similar to LEED." He mentioned that similar rating systems are offered by the International Codes Council and other credible third-party groups.

Harrison said the challenge to developers when it comes to LEED certification is that LEED can be more favorable to urban environments, where public transportation more accessible. In Howard, it's harder for developers to find land that could be served by public transit.

"LEED is easier to get credits in metropolitan area — if you are closer to public transit, pathways," Harrison said.

Watson said the measure limits the third-party rating to LEED standards because the county is limited by state laws, which only recognize LEED certification.

Under the bill, a property owner couldn't earn the credit on two properties at the same time, and the credit would remain with the property, even if the owner changes.