LEEDing Legislation in Michigan

In 2005 , Michigan Governor Jennifer Granholm issued an Executive Directive designed to make Michigan government more energy efficient, including a mandate with respect to the use of Leadership in Energy and Environmental Design (LEED) Green Building Rating System for new construction and renovations of government buildings. In 2007, Governor Granholm signed an additional Executive Directive that expanded the scope of her earlier Executive Order. The Michigan Legislature appears to be following suit with the introduction of a bi-partisan bill to provide incentives for the use of LEED certification in Michigan. The trend in Michigan is to promote, and to some extent require, LEED-certified buildings. The following is a brief summary of those initiatives.

Executive Directives

The Governor of Michigan has the inherent authority to direct and control the Executive Branch. These directives take the form of "Executive Directives." They do not have the same effect as legislation that provides for control over the general population of Michigan. Yet, as the executive, the Governor's Directives can provide mandates with respect to the priorities with respect to the various executive branches, including those charged with purchasing and construction of government-owned buildings.

Executive Directive 2005-4 became effective on April 22, 2005 and is entitled "Energy Efficiency in State Facilities and Operations." Exercising her authority under the Michigan Constitution and the Management and Budget Act, Governor Granholm identified various mandates with respect to ways the government of Michigan could reduce energy consumption and improve energy efficiencies with the twin goals of saving taxpayer dollars through greater energy efficiency and improvement of the environment by reducing pollution that is created as a result of energy consumption.

Executive Directive 2005-4 was an ambitious plan by which Michigan departments would reduce grid-based energy purchases 10 percent by December 31, 2008 and 20 percent by December 31, 2015 (compared to energy use for the fiscal year ending September 30, 2002). Government agencies are required to conduct energy analyses and obtain energy reductions through improved efficiency, including the purchase of Energy Star certified equipment and "green" goods and supplies, to the extent feasible and available. The Executive Directive also required that all state-supported capital outlays in excess of $1 million for state departments, agencies, universities or community colleges a LEED score of at least 26 points.

In 2007, Governor Granholm expanded the mandates in Executive Directive 2005-4 with the issuance of Executive Directive 2007-22, entitled “Enhanced Energy Efficiency and Conservation by State Departments and Agencies," which became effective November 14, 2007. Now, each State department is required to designate an Energy Use Reduction Coordinator, who is responsible to review the department's energy use and carbon footprint, and from that review, establish a departmental plan to meet the energy consumption goals. With respect to LEED certification, all new buildings or renovations in excess of $1 million must be energy efficient and environmentally sustainable. In addition, new procedures will be implemented to guarantee that all new buildings, whether owned by the State or leased by the State, will strive for a "Platinum" LEED rating for Existing Buildings and Commercial Interiors. The design of facilities maintenance and minor renovations are to be accomplished in a manner that is consistent with LEED, but a LEED rating would not be required. Finally, the Department of Management and Budget (DMB) and other State departments as determined by the DMB will be required to join the United State Green Building Council (USGBC).

The two Executive Directives now mandate LEED and even membership in the USGBC for the State of Michigan Executive Branch. Currently, DMB is complying with its mandates for exploring sustainability in the activities of the Executive Branch. As the State schedules new buildings and major renovations, LEED will play a prominent role.

Legislative Activity

On November 8, 2007, the Michigan House Representative introduced House Bill No. 5435 (the Bill). The Bill proposed to amend the Michigan Business Tax to allow taxpayers to claim a credit equal to 50 percent or $50,000, whichever was less, of the total cost of new "green" construction or the renovation of an existing building to meet LEED certification. Eligible properties include residential multi-family buildings, commercial buildings, and industrial buildings. In order to obtain the tax credit, the taxpayer would need to apply for and obtain LEED certification by the USGBC. Additionally, taxpayers could claim a tax credit of 20 percent for cost and expenses related to purchase and install renewable fuel or fuel cell generator that would interconnect with the electrical grid.

Currently, the House Energy and Technology Committee is considering the Bill. If ultimately passed by the House and Senate, and signed into law by Governor Granholm, the new law would provide an additional incentive to private industry to build LEED. In the meantime, the House is considering other LEED-friendly legislation including House Bill No. 4812, which would require modernization of building codes to recognize and advance energy efficient building techniques and materials, while eliminating codes that restrict the use of such techniques and materials.

Conclusion

The State of Michigan Executive and Legislative branches are establishing mandates and means by which LEED certification will become part of the arsenal of laws and regulations designed to reduce energy use, minimize the emissions of greenhouse gases, and improve Michigan's environment. These efforts are encouraging, if only to support the growing green building movement. All those with a stake at reducing Michigan's reliance on dirty energy sources and improving the environment should support and applaud such efforts.