Baltimore County, Maryland, one of the first local governments in the nation to offer the incentive of a property tax credit for Green Building in early 2006, has expanded that tax credit to include renovation of existing buildings and core and shell construction.

Green Building is the practice of creating healthier and more resource-efficient models of construction, renovation, operation, maintenance, and demolition.

Baltimore County’s Bill 85-06 authorized a 100% tax credit against county real property taxes assessed on a commercial Green Building that achieved at least a Silver Rating in the LEED-NC (New Construction) rating system.

The U.S. Green Building Council established the Leadership in Energy and Environmental Design (LEED) Green Building rating system as a nongovernmental national standard for measuring Green Building. LEED recognizes water and energy savings, materials selection, indoor environmental quality, and environmental protection. Points are given for green practices and based upon a building’s total number of points, it will receive one of the four LEED levels of certification: Certified, Silver, Gold or Platinum.

The Green Building Council has also created an evolving set of LEED Rating Systems, including New Construction, Existing Buildings, Commercial Interiors, Core & Shell, Schools, Retail, Healthcare, Homes, etc.

The LEED for ‘New Construction’ Rating System is designed “to guide and distinguish high-performance commercial and institutional” new construction and major renovations, including office buildings, high-rise residential buildings, government buildings, recreational facilities, manufacturing plants and laboratories. The original Baltimore County tax credit only recognized LEED New Construction.

Effective, December 3, 2007, Bill 78-07 reduces the amount of the tax credit as a percentage of the total county property tax assessed on a Green Building (from the prior 100% for LEED Certified Silver) as follows: LEED Certified Silver 50%, LEED Certified Gold 60%, and LEED Certified Platinum 80%. And the duration of the tax credit has been reduced from 10 years to 5 years.

The now expanded law also offers tax credits for LEED-EB (Existing Building). The LEED for Existing Buildings Rating System is very different from new construction when it helps building owners and operators measure operations, improvements and maintenance on a consistent scale, with the goal of maximizing operational efficiency while minimizing environmental impacts. LEED for Existing Buildings addresses whole-building cleaning and maintenance issues (including chemical use), recycling programs, exterior maintenance programs, and systems upgrades. It can be applied both to existing buildings seeking LEED certification for the first time and to projects previously certified under LEED for New Construction or Core & Shell.

For Existing Buildings, Baltimore County provides a lesser tax credit as a percentage of the total county property tax assessed on the building as follows: LEED Certified Silver 10%, LEED Certified Gold 25%, and LEED Certified Platinum 50%. The duration of the tax credit is 5 years.

Additionally, the expanded law also offers tax credits for LEED-CS (Core & Shell) for builders, developers and new building owners who want to address green design for new core and shell construction. Core and shell covers base building elements such as structure, envelope and the HVAC system. The LEED for Core & Shell Rating System acknowledges the limitations of developers in a speculatively developed building and encourages the implementation of green design and construction practices in areas over which the developer has control.

For Core & Shell, Baltimore County provides a reduced tax credit as a percentage of the total county property tax assessed on the building as follows: LEED Certified Silver 40%, LEED Certified Gold 50%, and LEED Certified Platinum 70%. The duration of the tax credit is 5 years.

There is a $5 Million cap on the cumulative amount of tax credits to be granted in the County. The first applications have already been accepted and applications are received annually, in advance of June 1st, in a streamlined process administered by the Director of Budget and Finance.

In addition to this tax credit, Baltimore County is expected to enact new legislation, within the coming weeks, that will exempt from the County’s architectural design review commercial building, if it is part of a development plan located within the Towson Commercial Revitalization District and achieves at least a LEED Certified Silver rating. This is perceived to be a significant benefit within this geographically modest area where all development approvals are hard fought.

The County has also advanced legislation that will all but certainly be acted upon favorably during the next few months, such that a homeowner may receive a property tax credit against County real property taxes assessed on a house that is certified in the LEED for Homes Rating System. The amount of the tax credit is a percentage of the total County property tax assessed on the high performance home as follows: LEED Certified Silver 40%, LEED Certified Gold 60%, and LEED Certified Platinum 100%. The duration of the tax credit is 3 years. Given the dearth of LEED Homes in Maryland, the efficacy of this enactment is less than clear, but it adds to a positive climate for sustainable development and building.

The voluntary incentives offered by government, whether as tax breaks, direct grants or loans, or advantages in processing approvals for Green Buildings are a non-prescriptive non-regulatory approach to environmental solutions and energy policy that responds to the overwhelming public sentiment that government has not done enough to protect the planet while not burdening owners and operators of the land with another mandate. The Green Building philosophy is an industry-friendly, results oriented environmental incentive that may portend a future for broader environmental policy.

Baltimore County’s incentive of a voluntary tax credit, that makes technologically savvy green entrepreneurs the cornerstone of environmental solutions, is the antithesis of the prescriptive mandatory Green Building laws in Baltimore City, Howard County and elsewhere that pervert the voluntary cooperative LEED benchmarks into minimum mandatory Green Building codes.

It is clear that, voluntary or otherwise, efforts of environmental stewardship will, for the foreseeable future, be at the local government level. The December 22, 2007 issue of The Economist notes, “the glacial pace of climate talks makes a far-reaching agreement unlikely for at least a few more years.” The failure of any meaningful consensus on global warming at the recent international Bali conference, “make a case for acting locally.”

Baltimore County continues to lead in environmental stewardship by acting locally with a real estate industry-friendly, green-tech entrepreneurial oriented environmental and energy incentive of Green Building tax credits.