(a) Intent. The intent of this Section is to:
(1) encourage building owners to increase the energy performance of existing buildings;
(2) incentivize building owners to reduce the energy and climate impacts of existing buildings, as the built environment generates more than half of the County’s measured community-wide greenhouse gas emissions;
(3) advance the County’s aggressive climate goals of an 80 percent reduction in greenhouse gas emissions by 2027 and zero emissions by 2035;
(4) institute regular review of the tax credits outlined in this Section to ensure that they are meeting the goals under paragraphs (1) through (3); and
(5) implement tax credits under Sections 9-203 and 9-242(a) of the Tax-Property Article of the Maryland Code, as amended.
(b) Definitions. In this Section the following words have the meanings indicated:
Accredited building professional means an individual that holds a valid and current credential from a building certification organization.
Baseline ENERGY STAR Score means the ENERGY STAR score of a building calculated over any consecutive 12-month period when the scored building is at least 50 percent occupied.
BRE Global means the Building Research Establishment Global.
BREEAM means the Building Research Establishment Environmental Assessment Method rating system administered by BRE Global.
Building certification organization means a third-party organization that administers the rating systems identified in this Section.
Building Sustainability Tax Credit is the property tax credit received for earned building certifications described in this Section.
Director means the Director of the Department of Finance or the Director’s designee.
Energy conservation device means any equipment, device, or material that reduces the demand for conventional fuels or increases the efficiency of these fuels, but is not a standard household appliance, including:
(1) insulation in any wall, roof, floor, foundation, or heating and cooling distribution system;
(2) a storm window or door, multi-glazed window or door, heat-absorbing or heat-reflective glazed and coated window and door system, or additional glazing, reduction in glass area, and other window and door system modification that reduces energy consumption;
(3) an automated energy control system;
(4) a heating, ventilating, or air-conditioning and distribution system modification or replacement;
(5) caulking, weather-stripping, and air sealing;
(6) replacement or modification of a lighting fixture to reduce the energy use of the lighting system;
(7) an energy recovery system;
(8) a day lighting system;
(9) a measure that reduces the usage of water or increases the efficiency of water usage; or
(10) any other installation or modification of equipment, device, or other material intended to decrease energy consumption.
Energy-efficient building means a non-residential or multi-family residential building that: (1) has or will have at least 10,000 square feet of gross floor area; (2) has received a Certificate of Occupancy from the Department of Permitting Services; (3) has achieved at least a minimum 50 percent occupancy rate for at least 12 consecutive months; and (4) has demonstrated energy improvements consistent with the requirements of this Section.
Energy Reduction Tax Credit is the property tax credit received for energy performance improvements described in this Section.
ENERGY STAR Data Verification Checklist means a report generated in the ENERGY STAR Portfolio Manager tool to document property use details and energy consumption.
ENERGY STAR Portfolio Manager means the no-cost web-based energy management tool developed and maintained by the U.S. Environmental Protection Agency to track and assess building energy performance.
ENERGY STAR Score means the numerical measure of a building’s energy use generated through the use of ENERGY STAR Portfolio Manager.
ENERGY STAR score metric reference data means the market data used by the U.S. Environmental Protection Agency to generate the ENERGY STAR Score.
Energy Use Intensity or EUI refers to the amount of energy used in a building per square foot per year.
Equity Emphasis Area means an area identified as an equity emphasis area by National Capital Region Transportation Planning Board.
Improved ENERGY STAR Score means the ENERGY STAR score of a building calculated within a consecutive 12-month period when the scored building is at least 50 percent occupied, demonstrating energy savings resulting from the use of a qualifying energy conservation device.
LEED means the Leadership in Energy and Environmental Design rating system administered by the USGBC.
Occupancy means the percentage of a building that is occupied and operational.
Property tax means the general County property tax and all special service area taxes.
USGBC means the United States Green Building Council.
(c) Credit. The Director must allow a tax credit each eligible year against the property tax imposed on an energy-efficient building under this Section.
(d) Application. An application by the owner of an energy-efficient building for a tax credit must be in the form prescribed by the Director and include:
(1) a description and installation date of the energy conservation device installed in the building;
(2) the ENERGY STAR Portfolio Manager Data Verification Checklists documenting the baseline and improved (within the past year) ENERGY STAR scores of an existing energy-efficient building, signed by an accredited building professional; and
(3) if the Building Sustainability Tax Credit is sought, verified documentation demonstrating qualification within the past year for the Building Sustainability Tax Credit in subsection (f).
(e) Energy Reduction Tax Credit authorized under Section 9-203 of the Tax-Property Article of the Maryland Code.
(1) An energy-efficient building may receive an Energy Reduction Tax Credit for achieving energy use reductions under this subsection and, if that credit is granted, may receive:
(A) an additional Building Sustainability Tax Credit under subsection (f); and
(B) an expanded credit under subsection (g) for buildings located in Equity Emphasis Areas.
(2) For the Energy Reduction Tax Credit, the percentage of the annual County property tax credit, awarded for 2 years, is calculated by subtracting an energy-efficient building’s 12-month baseline ENERGY STAR score from the improved 12-month ENERGY STAR score, then multiplying the difference by the multiplier below based on the improved ENERGY STAR score:
(A) if the improved ENERGY STAR score falls between 1-24, multiply the difference by 1.0;
(B) if the improved ENERGY STAR score falls between 25-49, multiply the difference by 1.5;
(C) if the improved ENERGY STAR score falls between 50-74, multiply the difference by 2.0; or
(D) if the improved ENERGY STAR score falls between 75-100, multiply the difference by 2.5.
(3) Baseline and Improved ENERGY STAR Score 12-month time periods must not:
(A) overlap;
(B) include the energy conservation device installation period; or
(C) be more than 6 calendar years apart.
(4) The Baseline ENERGY STAR Score 12-month time period must not begin earlier than August 26, 2018. Baseline and Improved ENERGY STAR Score 12-month time periods must use the same ENERGY STAR score metric reference data.
(5) If a building is not able to earn the ENERGY STAR score due to the property use type, the Director may accept the USGBC alternative compliance path for Energy Use Intensity (EUI).
(f) Building Sustainability Tax Credit authorized under Section 9-242(a) of the Tax-Property Article of the Maryland Code.
(1) The owner of an energy-efficient building seeking the Building Sustainability Tax Credit must apply for that tax credit simultaneously with the Energy Reduction Tax Credit. The amount of the Building Sustainability Tax Credit must be added to the Energy Reduction Tax Credit. The Building Sustainability Tax Credit must be equal to:
(A) 25% of the property tax owed on the building for 2 years, if the building achieves the most recent version available of LEED O+M Gold, BREEAM In-Use Excellent or an equivalent standard; or
(B) 50% of the property tax owed on the building for 2 years, if the building achieves the most recent version available of LEED O+M Platinum, BREEAM In-Use Outstanding or an equivalent standard.
(2) To be approved for the Building Sustainability Tax Credit, an energy-efficient building must also be approved for the Energy Reduction Tax Credit.
(g) Expanded credit for buildings in Equity Emphasis Areas.
(1) The owner of an energy-efficient building located within an Equity Emphasis Area at the time of application may qualify for an expanded credit under this subsection.
(2) The owner must apply for a credit under this subsection simultaneously with an application for the Energy Reduction Tax Credit.
(3) The amount of the tax credit under this subsection must be added to the Energy Reduction Tax Credit for each year that the Energy Reduction Tax Credit is granted.
(4) The amount of the tax credit under this subsection must be equal to 10% of the annual property tax owed on the building.
(h) Total Maximum Credit. The maximum credit that an energy-efficient building may be granted in any year must not exceed 100% of the building’s annual County property tax liability.
(i) Annual limits. In any fiscal year, the Director must not award more than $5 million in total tax credits granted to all buildings under this Section.
(j) Reapplications.
(1) The owner of an energy-efficient building awarded a tax credit under this Section may reapply twice after the initial 2-year credit cycle. The maximum
number of applications a building owner may submit is 3, consisting of 1 initial application and 2 reapplications.
(2) For any reapplications, the building owner must submit a new Baseline ENERGY STAR Score for the building and describe the improvements performed to achieve the energy reduction. The Baseline ENERGY STAR Score for a reapplication may not be older than the 12-month time period used for the Improved ENERGY STAR Score for the previously approved tax credit. If an owner received a Building Sustainability Tax Credit based upon certification as LEED O+M Gold, BREEAM In-Use Excellent or an equivalent standard, the building must achieve a higher certification, such as LEED O+M Platinum, BREEAM In-Use Outstanding or an equivalent standard, upon reapplication.
(k) Credit Review.
(1) On or before October 1 of each year, the Director of Finance must prepare a report on the status of the Energy Reduction Tax Credit and Building Sustainability Tax Credit.
(2) Every 3 years, the County Executive must submit a report to the County Council reviewing the effectiveness of the Energy Reduction Tax Credit and Building Sustainability Tax Credit and make recommendations on any credit alterations.
(l) Regulations. The County Executive may issue regulations under method (2) to administer the Energy Reduction Tax Credit and the Building Sustainability Tax Credit. (2020 L.M.C., ch. 28, § 1; 2021 L.M.C., ch. 26
, § 1; 2021 L.M.C., ch. 28, §1; 2023 L.M.C., ch. 21
, § 1.)