Bill Text

This bill, entitled the “Smart Growth Tax Credit Act,” provides tax incentives against the gross income and corporation business tax for developers and owners who design and build residential and mixed-use developments that meet specific smart growth and green building criteria. These criteria ensure that participating developments are appropriately located, resource-efficient, pedestrian-friendly, adequately serviced by mass transit, and built using materials and technologies that minimize environmental impacts and provide a healthier built environment. This bill also provides additional incentives for designing and building developments, which exceed the smart growth and green building standards that are required to qualify for the base tax credit.

The incentives provided by this bill are necessary in order to reduce <insert your state’s name here>’s incidence of sprawl development and the adverse impacts of such sprawl development, which include the rapid consumption of wilderness and farmland, and the pollution and traffic congestion produced by automobile dependence. Intended to bolster the production of smarter, more sustainable development, this bill will help conserve undeveloped land, reduce air and water pollution, improve public health, reduce traffic congestion, ensure more efficient water usage, and reduce polluted runoff that will help prevent future drought emergencies, and reduce energy bills and transportation costs for residents of <insert your state’s name here>. It will also help <insert your state’s name here>’s building and development professionals overcome market barriers and develop the capacity to create superior buildings and neighborhoods at minimal additional cost. The increased stock of such buildings and neighborhoods will then increase consumer demand for walkable and transit-oriented development and cleaner, safer buildings.

Smart Growth Tax Credit Act

Section 1. Short Title.

This Act shall be known and may be cited as the “Smart Growth Tax Credit Act.”

Section 2. Definitions.

As used in this Act:

(A) “Adequate bus transit service” means at least one bus transit stop within a one-quarter mile radius of the geographic center of the development, with service of no less than one bus either:

(1) Every 60 minutes, 18 hours per day, seven days per week; or

(2) Thirty (30) times per weekday and 15 times per weekend day, provided that there are no physical impediments that prevent pedestrians from walking from the development to the transit stop.

(B) “Adequate ferry transit service” means at least one ferry transit stop within a one-half mile radius of the geographic center of the development, with service of no less than five trains during weekday peak periods, provided that there are no physical impediments that prevent pedestrians from walking from the development to the transit stop.

(C) “Adequate rail transit service” means at least one rail or light-rail transit stop within a one-half mile radius of the geographic center of the development, with service of no less than five trains during weekday peak periods, provided that there are no physical impediments that prevent pedestrians from walking from the development to the transit stop.

(D) “Allowable costs” means amounts properly chargeable to a capital account, other than for purchase of land or any remediation costs, which are paid or incurred for construction or rehabilitation; commissioning costs; interest paid during the construction or rehabilitation period; legal, architectural, engineering, and other professional fees allocable to construction or rehabilitation; closing costs for construction or mortgage loans; recording taxes and filing fees incurred with respect to construction or rehabilitation; site costs, such as temporary electric wiring, scaffolding, demolition costs, and fencing and security facilities; and costs of carpeting, partitions, walls and wall coverings, ceilings, lighting, plumbing, electrical wiring, and ventilation, provided that such costs shall not include the cost of telephone systems and computers other than electrical wiring costs. For commercial space, allowable costs shall not exceed $250 per square foot of interior space, except that <the state agency responsible for administering the smart growth tax credit> may raise the maximum allowable costs by up to 10 percent on each of up to two occasions in the seven-year period next following the date of enactment of this Act. For residential space, allowable costs shall not exceed 110 percent of the amount set by the U.S. Department of Housing and Urban Development (HUD) as per unit limits, codified in 12 U.S.C.A. § 1715l(d)(3)(ii).(1)

(E) “ASHRAE” means the American Society of Heating, Refrigeration, and Air-Conditioning Engineers.

(F) “Brownfield site” means any former or current commercial or industrial site that is currently vacant or underutilized, and on which there has been, or there is suspected to have been, a discharge of a hazardous substance, a hazardous waste, or a pollutant.

(G) “Carpet and Rug Institute Green Label Indoor Air Quality Test Program” means the testing program developed by the Carpet and Rug Institute, as recognized by <the department of environmental protection or your state’s equivalent>, to aid in the selection of carpet, adhesives, and cushion materials which minimize adverse impacts to indoor air quality.

(H) “Critical habitat” means a biologically diverse area containing habitats of endangered and threatened plant or animal species, as determined by <the federal Endangered Species Act, Section 3(5)> and/or <insert applicable reference(s) to your state Endangered Species Act>.

(I) “Critical slope area” means an area predominantly characterized by either an average change in elevation greater than 15 percent of the corresponding horizontal distance through the slope, otherwise referred to as a 15 percent slope, or by a very high erosion hazard as indicated by an erodability factor “k” computed by the U.S. Department of Agriculture (USDA), Soil Conservation Service for soils of 0.40 or greater.

(J) “Developer” means the legal or beneficial owner or owners of a lot or of any land proposed to be included in a proposed development, including the holder of an option or contract to purchase, or other person having an enforceable proprietary interest in such land.

(K) “Development” means the division of a parcel of land into two or more parcels; the construction, reconstruction, conversion, structural alteration, relocation, or enlargement of any building or other structure, or of any mining excavation or landfill; or any change in the use of any building or other structure, or land, or extension of use of land for which permission may be required pursuant to <insert applicable reference(s) to municipal land use law>.(2)

(L) “Energy Star®” means the voluntary labeling program administered by the U.S. Environmental Protection Agency (EPA) designed to identify and promote energy-efficient products, equipment, and buildings.

(M) “Forest Stewardship Council” means the international nonprofit organization founded in 1993 to support environmentally appropriate, socially beneficial, and economically viable management of the world’s forests.

(N) “Highly urbanized area” means:

(1) An area where 30 percent of the ground within 1,000 feet of the perimeter of a development site consists of impervious surface; or

(2) An area located in a municipality, which <the state agency responsible for administering the smart growth tax credit> has determined, according to guidelines established by <the state agency responsible for administering the smart growth tax credit>, to be built out.

(O) “Impervious surface” means a surface that has been compacted or covered with a layer of material so that it is highly resistant to infiltration by water.

(P) “Improvement” means any constructed element that becomes part of, is placed upon, or is affixed to real estate.

(Q) “LEED™ Green Building Rating System” means the Leadership in Energy and Environmental Design green building rating system developed by the U.S. Green Building Council (USGBC).

(R) “LEED™ Residential Green Building Rating System” means the completed version of the Leadership in Energy and Environmental Design green building rating system for residential buildings, as may be developed by the U.S. Green Building Council (USGBC).

(S) “Lot” means a designated parcel, tract, or area of land established by a plat, or otherwise permitted by law, to be used, developed, or built upon as a unit.

(T) “Mixed-use development” means a development that includes residential use and no more than 75 percent by interior square footage of one or more of the following uses:

(1) Commercial space;

(2) Office space;

(3) Retail space; or

(4) Such other nonresidential uses that <the state agency responsible for administering the smart growth tax credit> has determined do not pose a public health threat or nuisance to nearby residential areas.

(U) “Old-growth timber” means timber of a forest from the late successional stage of forest development as defined by <the department of natural resources or environmental protection or your state’s equivalent>.

(V) “Plat” means a map or maps of a subdivision or site plan.

(W) “Potentially eligible development” means a residential or mixed-use development or redevelopment project located within <insert your state’s name here>.

(X) “Site improvements” means any construction work on, or improvement in connection with, a development limited to streets, roads, parking facilities, sidewalks, drainage structures, and utilities.

(Y) “Smart growth development” means a potentially eligible development that meets the criteria set forth in Section 6 of this Act.

(Z) “Stormwater management measures” means structural and nonstructural control of stormwater runoff and nonpoint pollution.

(AA) “Total cumulative rides available” means the sum of:

(1) The number of rides available by bus within a one-half mile radius of the geographic center of the development;

(2) The number of rides available by rail or light-rail within a one-half mile radius of the geographic center of the development, multiplied by the average number of cars on each train; and

(3) The number of rides available by ferry within a one-half mile radius of the geographic center of the development, multiplied by three.(3)

(BB) “Transit stop” means any stop for a bus, train, or ferry, as the case may be, which may be along either intercity routes, or intracity routes, or both. A transit stop serving more than one route, or serving routes in more than one direction, shall constitute a discrete stop for each directional route of service; and, if a location has one bus, train, or ferry, as the case may be, per hour heading in one direction, and one bus, train, or ferry, as the case may be, available in that same hour heading in the other direction, this shall constitute one bus, train, or ferry per hour at two separate stops.

(CC) “Tropical hardwood” means hardwood scientifically classified as angiosperm, which grows in tropical moist forest, as determined by <the department of natural resources or environmental protection or your state’s equivalent>. “Tropical hardwood” shall include, but not be limited to, the following species:

(DD) “Weekday peak period” means 5:30 a.m. to 10:30 a.m. and 3:30 p.m. to 8:30 p.m. on a weekday.

(EE) “Wetland” means:

(1) Land that has a predominance of hydric soils and is inundated or saturated by surface or groundwater at a frequency and duration sufficient to support a prevalence of hydrophytic vegetation typically adapted for life in saturated soil conditions; or

(2) Any area so designated by <the department of natural resources or environmental protection or your state’s equivalent>.

Section 3. Allowance of Credit.

(A) A taxpayer shall be granted a credit, to be computed as provided in this Section, against the tax imposed pursuant to <insert relevant section(s) of your state tax code, referencing the state personal income and corporate business income tax>. The credit shall be an amount equal to the sum of the following, provided, however, that amount shall not exceed the amount set forth in the credit reservation certificate obtained pursuant to Section 4 of this Act:

(1) 4.0 percent of allowable costs;

(2) 0.5 percent, 1.0 percent, 1.5 percent, or 2.0 percent of allowable costs, attributable to buildings but not to other site improvements, for developments qualifying as Certified, Silver, Gold, or Platinum status, respectively, under the LEED™ Green Building Rating System or the LEED™ Residential Green Building Rating System;

(3) 0.5 percent of allowable costs for mixed-use developments;

(4) 0.5 percent of allowable costs for developments located on brownfield sites;

(5) 0.1 percent of allowable costs for developments in which less than 10 percent of the land of the development, not including shared open spaces, is devoted to parking areas, garages, and driveways;

(6) 0.1 percent of allowable costs for developments with respect to which variances are secured from the relevant municipalities to permit 50 percent or less parking than is required by applicable local zoning codes, and are built in accordance with such variances;

(7) Up to 2.4 percent of allowable costs for developments with higher than required residential density, depending on the density level as set forth below; and

8) Up to 1.4 percent of allowable costs for developments with higher than required transit service, depending on total cumulative rides available per weekday as set forth below:

(B) A taxpayer may only apply for a credit under this Section with respect to allowable costs paid or incurred by the taxpayer in connection with the construction or rehabilitation of a smart growth development.

(C) For any taxable year, a taxpayer may apply no more than 20 percent of the total amount allowable under subsection (A) of this Section.

D) The amount of tax credit otherwise allowable under this Section, which cannot be applied during a tax year, may be carried over, if necessary, to the 15 tax years following a credit’s first eligible tax year.

(E) If a credit is owed to a building owner under this Act with respect to property, and such property, or an interest therein, is sold, the credit for the period after the sale, which would have been allowed under this Act to the prior owner had the property not been sold, shall be allowed to the successor owner if such right is specified in the deed transferring the property.

(F) For any taxable year, a taxpayer may apply for a credit under this section only if:

(1) The taxpayer has, as described in Section 4 of this Act, obtained and filed a location certificate, a credit reservation certificate, and an eligibility certificate; and

(2) A certificate of occupancy, for the building or buildings that as the subject of the credit, has been issued and the building or buildings remains in service during such year.

(G) For each taxpayer who is eligible for a credit under this Section, <the state agency responsible for administering the smart growth tax credit> shall grant a credit, provided that the credits, in the aggregate, shall not exceed <$20 million> for the first fiscal year of tax credit availability and, in each of the subsequent six fiscal years, shall not exceed <$50 million>; provided further that any unused allocable amounts shall roll over to subsequent fiscal years.(4)

Section 4. Certifications and Claim of Tax Credits.

(A) Location Certificate. Upon application by a taxpayer, <the department of environmental protection or your state’s equivalent>, in consultation with <the state agency responsible for administering the smart growth tax credit>, shall issue a location certificate with respect to a specific property, where the taxpayer has shown that the property meets the location criteria set forth in subsection (A) of Section 6 of this Act. A taxpayer’s application for a location certificate shall include plats, and such other information that <the state agency responsible for administering the smart growth tax credit> and/or <the department of environmental protection or your state’s equivalent> may require. <The state agency responsible for administering the smart growth tax credit> and/or <the department of environmental protection or your state’s equivalent> may issue a location certificate without presentation by the taxpayer of a deed for the proposed site.

(B) Credit Reservation Certificate. Upon application by a taxpayer, <the state agency responsible for administering the smart growth tax credit> shall issue a credit reservation certificate, where the taxpayer has filed a copy of a location certificate and made a showing that the taxpayer is likely, within a reasonable time, to place in service the development with respect to which the location certificate was issued, and that the development is likely to qualify for the allowance of a credit under this Act. The certificate shall state:

(1) The earliest taxable year for which the credit may be applied;

(2) The maximum amount of the total credit allowed and the maximum amount of credit allowed in any single tax year;

(3) An expiration date; and

(4) Such other information as <the state agency responsible for administering the smart growth tax credit> may prescribe. The certificate shall apply only to the development placed in service by the specified expiration date. The expiration date may be extended at the discretion of <the director of the state agency responsible for administering the smart growth tax credit>, in order to avoid undue hardship. Certificates may be issued in the first fiscal year following the effective date of this Act, and in each of the six subsequent fiscal years.

(C) Eligibility Certificate. For the first taxable year for which a taxpayer applies a credit under this Act, the taxpayer shall obtain an eligibility certificate from an architect or professional engineer licensed to practice in <insert your state’s name here>. The certificate shall consist of a certification, under the seal of such architect or engineer, that, except for any provision for which the taxpayer has obtained a waiver from <the state agency responsible for administering the smart growth tax credit> pursuant to subsection (D) of Section 6 of this Act, the building or development with respect to which the credit is applied:

(1) Meets the neighborhood design criteria set forth in subsection (B) of Section 6 of this Act; and

(2) Meets either the green building criteria set forth in subsection (C) of Section 6 of this Act or the criteria required for Certified, Silver, Gold or Platinum status under the LEED™ Green Building Rating System or the LEED™ Residential Green Building Rating System. The certification shall be made in accordance with the standards and guidelines in effect at the time the credit reservation for the development was issued. The certificate shall set forth the specific findings upon which the certification was based. The certificate shall include sufficient information to identify each building or development, and such other information as <the state agency responsible for administering the smart growth tax credit> may prescribe. The taxpayer shall file with <the department of taxation or your state’s equivalent> the eligibility certificate, and the associated location certificate and credit reservation certificate, with the application for credit, and shall file duplicate copies with <the state agency responsible for administering the smart growth tax credit>.

(D) Wrongful Certification. If <the state agency responsible for administering the smart growth tax credit> has reason to believe that an architect or professional engineer, in making any certification under this Section, engaged in professional misconduct, <the state agency responsible for administering the smart growth tax credit> shall so inform <the appropriate state agencies or boards responsible for consumer affairs, law enforcement, and professional certifications>.(5)

Section 5. Record Keeping, Reporting and Regulations.

(A) Each taxpayer shall, for any taxable year for which a credit is claimed under this Act, maintain records of such information as <the state agency responsible for administering the smart growth tax credit> and <the department of taxation or your state’s equivalent> shall determine, and report that information to <the state agency responsible for administering the smart growth tax credit> and <the department of taxation or your state’s equivalent> in the form and at the time that <these agencies> shall determine.

(B) <The state agency responsible for administering the smart growth tax credit> and/or <the department of environmental protection or your state’s equivalent> and/or <the department of taxation or your state’ s equivalent> shall adopt such rules and regulations as may be necessary to implement this Act. These rules and regulations shall be designed to encourage the implementation of smart growth principles and maintain high but commercially reasonable standards for obtaining tax credits under this Act. The rules and regulations shall establish a reasonable time for submission of applications and shall establish a method certifying proposed locations and allocating credit reservation certificates among eligible applicants, which shall generally be on a first-come, first-serve basis.

(C) On or before six years after the effective date of this Act, <the director of the state agency responsible for administering the smart growth tax credit>, in consultation with <the director of the department of environmental protection or your state’s equivalent>and <the director of the department of taxation or your state’s equivalent>, shall prepare and submit a written report regarding the number of certificates and taxpayers applying the credit provided for under this Act; the amount of the credits granted; the geographical distribution of the credits granted; and, any other information that <the state agency responsible for administering the smart growth tax credit> and/or <the department of environmental protection or your state’s equivalent> and/or <the department of taxation or your state’ s equivalent> may deem useful or appropriate. A preliminary draft of the report shall be so issued within the first four years following of the effective date of this Act. The report shall be submitted to the Governor, the President of the Senate and the Speaker of the <House or Assembly>.

Section 6. Standards.

Except as set forth in subsection (D) of this Section, all buildings and developments with respect to which a tax credit is applied pursuant to this Act shall be considered a smart growth development if they meet the following standards; provided that, with respect to residential and tenant space, compliance with standards set forth in paragraphs (1), (2), (3), (5) and (8) of subsection C of this Section shall not be required where the taxpayer does not incur or pay the cost of the equipment, appliances, fixtures, materials, finishes, furnishings, or other items relevant to compliance with the standard.

(A) Location.

(1) All buildings and developments with respect to which a tax credit is applied under this Act shall be located in urban or suburban areas or centers designated by <the department of urban planning and development or your state’s equivalent>, or in pursuance to guidelines established by <the state agency responsible for administering the smart growth tax credit>;(6)

(2) All buildings and developments with respect to which a tax credit is applied under this Act shall be served either by adequate bus transit service, adequate rail transit service, or adequate ferry transit service;(3)

(3) No building or development with respect to which a tax credit is claimed under this Act shall be located:

(a) Within areas designated as reserves by the federal or state government;

(b) In public parkland;

(c) Within 1,000 feet of any critical habitat site within public parkland;

(d) In or within 300 feet of a wetland;

(e) In or within 100 feet of a critical slope area, unless the site is located on a brownfield site or within a highly urbanized area;

(f) Within the 100-year floodplain, unless the site is located on a brownfield site or within a highly urbanized area; or

(g) Within 1,000 feet of the mean high-water mark for any saltwater body, unless the site is located on a brownfield site or within a highly urbanized area;(7) and

(4) No building or development with respect to which a tax credit is applied under this Act shall require:

(a) A water and sanitary sewer line extension of 1,000 feet or greater, unless sited in an area that has been approved for water and sanitary sewer service prior to the date of enactment of this Act; or

(b) A septic system.

(B) Neighborhood Design. Within six months after the date of enactment of this Act, <the state agency responsible for administering the smart growth tax credit>, in consultation with <the department of environmental protection or your state’s equivalent>, shall adopt standards for the purpose of this Act with respect to:

(1) Land Use. The standards shall require, at a minimum, that average residential density shall be six or more dwelling units per residential acre.(8) Residential acreage shall be the calculated net of any land on the lot that is used for public green space, public sidewalks, or public roads. For lots occupied by residential buildings, residential acres used in the density calculation shall be the footprint area of buildings, plus any associated driveways, yards, and parking areas except for on-street parallel parking. For sites occupied by mixed-use buildings, residential acres used in the density calculation shall be a percentage of the footprint area of building that equals the percentage of interior space devoted to residential use, plus any associated driveways, yards, and the percentage of associated parking areas used by residents;

(2) Streets and Sidewalks. The standards shall require, at a minimum, that, if new streets are constructed as part of a development with respect to which a credit is applied under this Act, the new streets shall meet the following standards:

(a) No no more than one cul-de-sac shall be constructed for every four new intersections within the development;

(b) At least 50 percent of any new intersections and crossings within the development shall be equipped with traffic controls or such traffic-calming measures that <the state agency responsible for administering the smart growth tax credit> shall approve, including, but not limited to, speed bumps, stop signs, and vegetative barriers;

(c) The width of pavement of new streets shall not exceed 42 feet, consisting of a maximum of 10 feet per lane of motor vehicle traffic, four feet per bicycle lane, and seven feet per lane designated for on-street parallel parking. New streets shall not consist of more than two lanes devoted to motor vehicle traffic, two lanes devoted to bicycle traffic, and two lanes devoted to on-street parallel parking; and

(d) Sidewalks of no less than four feet in width shall be provided along frontage of all buildings and along all streets that connect buildings within the development; and

(3) Parking. The standards shall require, at a minimum, that the number of parking spaces associated with the development shall not exceed the number required by parking ratios specified in applicable local zoning codes.

(C) Green Buildings. Within six months of the date of enactment of this Act, <the state agency responsible for administering the smart growth tax credit>, in consultation with <the department of environmental protection or your state’s equivalent>, shall adopt standards for the purpose of this Act, and shall review and update such standards at least every two years from the date on which they are adopted with respect to:

(1) Energy Efficiency. The standards shall require, at a minimum, that:

(a) Single-family homes comply with the energy standards of the U.S. Environmental Protection Agency Energy Star® Homes program(9);

(b) Energy use in all other buildings shall not exceed 65 percent of the energy use permitted by the relevant state energy code;

(c) Equipment and appliances, for which Energy Star® standards exist, including, but not limited to, refrigerators, dishwashers, and washing machines, shall meet those Energy Star® standards; and

(d) No less than 40 percent of high-use lighting fixtures shall meet Energy Star® standards;

(2) Building Materials. The standards shall, at a minimum, specify requirements regarding minimum percentages of recycled content and renewable source material and maximum levels of toxicity and volatile organic compounds. Standards shall be developed for building materials, finishes and furnishings, including but not limited to concrete and concrete masonry units; millwork substrates; insulation; ceramic, ceramic or glass and cementitious tiles; ceiling tiles and panels; flooring and carpet; paints, coatings sealants and adhesives; and furniture. The LEED™ Green Building Rating System and the LEED™ Residential Green Building Rating System shall inform the development of the standards(10);

(3) Wood Use. The standards shall, at a minimum:

(a) Specify requirements to minimize wood use in wood-framed houses; and

(b) Require that old-growth timber and tropical hardwood, except recycled wood and tropical hardwood certified in accordance with the protocol of the Forest Stewardship Council or, in lieu thereof, of another organization deemed by <the department of natural resources or environmental protection or your state’s equivalent> to be authorized and capable of providing an equivalent protocol, shall not be used(11);

(4) Heat Island Reduction. The standards shall require, at a minimum, that:

(a) At least 50 percent, by square footage, of non-roof impervious surfaces, including driveways, parking areas, walkways, and plazas, be light-colored or covered with specified coatings that improve reflectance; and

(b) Roofs shall be composed of Energy Star®-labeled roof products, except where solar panels or roof gardens are installed(12);

(5) Water Efficiency. The standards shall require, at a minimum, that:

(a) Each showerhead shall not exceed 2.0 gallons per minute;

(b) Each faucet shall not exceed 1.0 gallons per minute;

(c) Toilet flush volume shall not exceed 1.6 gallons; and

(d) For commercial buildings, the drift rate of any cooling tower shall not exceed 1 percent;

(6) Heating and Cooling. The standards shall require, at a minimum, that central air conditioning refrigerant charge and air flow shall be documented to be within 10 percent of manufacturer recommendations;

(7) Durability. The standards shall require, at a minimum, that:

(a) Roofs shall have a warranty of no less than 40 years;

(b) Insulated windows shall have a warranty of no less than 10 years;

(c) Overhangs shall include at least 80 percent of full attic or roof-slope insulation R-value; and

(d) Head-casing flashing shall be installed for all windows and exterior doors;

(8) Indoor Air Quality. The standards shall require, at a minimum, that:

(a) Interior paints shall contain no more than 100 grams per liter of volatile organic compounds;

(b) Sealants and adhesives used for interior applications shall contain no more than 250 grams per liter of volatile organic compounds;

(c) Carpets, carpet cushions, and any necessary adhesives shall meet the standards set forth in the Carpet and Rug Institute Green Label Indoor Air Quality Test Program;

(d) Carpets shall not be installed in basements, bathrooms, kitchens, or within a four-foot radius of the center of any doorway which leads outdoors;

(e) Only direct-vent, closed-combustion, or power-vented space heating and water heating equipment shall be used, and vent-free space heating or water heating equipment shall not be used;

(f) Any wood stoves shall have ducted combustion air;

(g) Carbon monoxide detectors shall be installed consistent with Consumer Product Safety Commission recommendations, and with at least one detector per 500 square feet of interior space;

(h) Enclosed enclosed parking shall be completely air-sealed from attached indoor spaces;

(i) Every building shall be furnished with a ventilation system and for commercial buildings the sizing of the system shall conform with the ASHRAE standard known as ASHRAE G2-2001; and

(j) Foundations of residential units shall be constructed according to the following requirements, unless <the state agency responsible for administering the smart growth tax credit> approves alternative plans to ensure dry basements:

(i) The foundation shall have a continuous footing drain that is covered with stone, which, in turn, shall be covered with filter fabric, and which shall drain either to daylight or to an interior, sealed sump pump system;

(ii) The foundation shall have porous backfill material;

(iii) The vapor retarder shall be directly under slab; and

(iv) The exterior of the below-grade foundation shall be waterproofed;

(9) Construction Waste. The standards shall require, at a minimum, development of and adherence to a waste reduction plan that provides for separation of materials which are reusable or recyclable, such that a minimum of 30 percent of waste by volume shall be diverted from the waste stream; and

(10) Stormwater Management. The standards shall require, at a minimum, that developments on parcels of undeveloped land of four acres or more shall employ stormwater management measures in order to meet at least one of the following requirements:

(a) Post-development runoff volume of the land area of the development shall not exceed pre-development runoff volume; where runoff volume is defined as the 1.5 year, 24-hour peak discharge rate; or

(b) The first inch of runoff or 80 percent of 100-year runoff produced by the impervious surfaces of the development shall be treated for total suspended solids, total phosphorous, and total nitrogen.

(D) Waiver. Upon application by a taxpayer, <the state agency responsible for administering the smart growth tax credit>, in consultation with <the department of environmental protection or your state’s equivalent>, may issue a waiver of any regulatory provision adopted pursuant to subsection (A) of this Section, where the taxpayer has made a showing that the development was in compliance with the provision at the time of the issuance to the taxpayer of a location certificate, and that the development is no longer in compliance because of circumstances out of the taxpayer’s control; or of any regulatory provision adopted pursuant to subsections (B) or (C) of this Section, where the taxpayer has made a showing that compliance with the provision is impracticable due to unique characteristics of the site, or that deviation from the provision produces no net negative environmental impact.

Section 7. Administration.

The “Smart Growth Tax Credit” will be administered by <the state agency responsible for administering the smart growth tax credit>, and will be available for seven years. The total of all credits that could be allocated in the first fiscal year after enactment would be no more than <$20 million> and, in subsequent years, <the director of the state agency responsible for administering the smart growth tax credit>, in consultation with the State Treasurer, may authorize up to <$50 million> of credit allocations per year. Developers and owners will collect one-fifth of the credit due each year for the five years following the smart growth development’s certification of eligibility.

Section 8. Severability.

If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity shall not affect other provisions or applications of this Act, which can be given effect without regard to the invalid provision or application and, to this end, the provisions of this Act are severable.

Section 9. Effective Date.

This Act shall take effect immediately upon its passage.

Sources:
(1) These provisions for caps on allowable costs exist to prevent state subsidization of luxury amenities and projects. The caps may need to be adjusted according to the prevailing construction costs in the relevant jurisdictions.
(2) Other states may or may not have similar land use laws that may be relevant to reference in this definition.
(3) The number of trains or ferries available is multiplied by the specified factor in order to account for differences in each transit mode’s capacity. Further information on research regarding the relationship between neighborhood design and travel behavior (known as “location efficiency”) is available from the Natural Resources Defense Council or the Institute for Location Efficiency.
(4) These are the dollar caps used in the New Jersey legislation; the ideal amount for caps on available credits will depend on the state. Since each state has its own unique economy, growth pressures, and real estate market, it is not possible to assign a one-size-fits-all number.
(5) The enforcement mechanism is that the certifying architect or engineer is putting his or her license on the line and, therefore, will have a strong disincentive to certify a development that does not properly meet the established criteria. See also subsection (C) of Section 4 stating that the certification shall be made under the seal of the certifying architect or engineer.
(6) The location criteria will have to be adjusted for each individual state depending on the amount of state land use planning that has been done thus far. New Jersey already has an official State Plan that designates every part of the state as a specific type of planning area (e.g., urban planning areas, suburban planning areas, rural planning areas, etc.). As a result, the location criteria for the New Jersey legislation utilize these land use categorizations. If similar work has been done in a state, it should probably be incorporated partly or wholly into the location criteria. But even if no such work has been done, there are other characteristics that can be used as a good basis for deciding what areas could be eligible for the tax credit. For instance, existing sewered areas could be used as the starting point for guidelines – such guidelines would likely encourage further development where infrastructure already exists, and so the resulting areas would likely be appropriately categorized as urban or suburban.
(7) New Jersey has an existing official Statewide Water Supply Plan that was incorporated into the location criteria of the New Jersey version of the legislation and, if a state has a similar plan or document regarding water supply, it should probably be incorporated into the environmental location criteria as well. In the New Jersey legislation, the provision states that, if the development is located in a water supply-deficit area designated by the water supply plan and includes more than 20 residential units or commercial units that use 10,000 gallons of water a day or more, then the development’s water use plan must be preapproved by the New Jersey Department of Environmental Protection in order to qualify for a tax credit.
(8) This particular threshold is based on the minimum average density that can be expected to realistically create walkable neighborhoods and support adequate transit service. Reducing the minimum density may compromise the legislation’s ability to achieve those fundamental goals, but it is important to note that since the requirement applies to the overall average residential density of a development, a wide variety of lot sizes and housing types can qualify for the tax credit.
(9) In the New Jersey legislation, these criteria require the certification of residential units under the New Jersey Energy Star® Homes program, which was developed specifically for New Jersey. If a state has its own energy-efficient home certification program, it can be incorporated into the criteria. If no such program exists, however, the U.S. Environmental Protection Agency (EPA) program can be used. Characteristics of EPA Energy Star® homes include tight construction and reduced air infiltration, tight ducts, improved insulation, high-performance windows, and energy-efficient heating and cooling equipment. For more information, visit the Energy Star® web site.
(10) New Jersey has a program for certification of building materials based on recycled content, etc. Your state may have a similar program, or the Leadership in Energy and Environmental Design (LEED) standards would suffice.
(11) Again, your state may have such a certification program; if not, then the Forest Stewardship Council’s certification would suffice.
(12) The disadvantages and advantages of reducing the heat island effect depend on whether heat absorption and retention is desirable or not in the context of the climate of the state or region. These criteria are designed for the New Jersey climate. In warmer climates, more strict criteria to reduce the heat island effect would be desirable; while, in cooler climates, some heat retention may be desirable. These criteria should be adjusted or omitted as appropriate to the climate of the state or region.