ConstructionPro Week, Volume: Construction Advisor Today - Issue: 141 - 01/13/2012

New Law Restricts the Use of DoD Funds for Obtaining LEED Gold or Platinum Certification; GBI Profiles Congressional Legislation

By Steve Rizer

President Obama (D) has signed legislation (P.L. 112-81; H.R. 1540) preventing the use of U.S. Department of Defense (DoD) funds for garnering Leadership in Energy and Environmental Design (LEED) Gold or Platinum certification except under certain circumstances. Specifically, no funds authorized to be appropriated by the new National Defense Authorization Act for fiscal 2012 (FY’12) or otherwise made available for DoD for FY’12 may be obligated or expended for achieving Gold or Platinum certification, the two highest designations in the U.S. Green Building Council’s (USGBC) suite of green building rating systems.


However, DoD may waive the limitation if the department submits a notification to congressional defense committees at least 30 days before the obligation of funds toward achieving the Gold or Platinum certification. Such a notification must include a cost-benefit analysis of the decision to obligate funds toward achieving such certification as well as demonstrated payback for the energy improvements or sustainable design features. Gold and Platinum certifications will be permitted, and not require a waiver and notification if achieving such a certification imposes no additional cost to DoD.

Also under Section 2830 of the new law, by July DoD will submit to congressional defense committees a report on the energy-efficiency and sustainability standards that the department uses for military construction and repair. The report must include a cost-benefit analysis as well as information on return on investment, and long-term payback for the following design standards: American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Standard 189.1-2011; ASHRAE Standard 90.1-2010; LEED Silver, Gold, and Platinum certification as well as LEED volume certification and other American National Standards Institute-accredited standards.

The report must include a copy of DoD policy prescribing a comprehensive strategy for the pursuit of design and building standards across the department that include specific energy-efficient standards and sustainable-design attributes for military construction based on the cost-benefit analysis, return on investment, and demonstrated payback required by Subparagraphs (A), (B), (C), and (D) of Paragraph (2) in Section 2830.

In an interview with Green Building Insider (GBI), USGBC Legislative Director Bryan Howard provided the following additional information:

GBI: What is USGBC's reaction to the language in this new law as it pertains to LEED?

Howard: From USGBC’s perspective, the law is misguided at best and deliberately problematic for leaders in the Defense agencies.

GBI: By your estimation, approximately how many buildings and structures will this section of the law affect for FY’12?

Howard: With regard to the practical application in terms of buildings and structures affected, we’re seeking further guidance on the practical effect of this law on current and future LEED projects.

GBI: DoD does have the ability to get the limitation waived under certain circumstances. For about how many of these buildings/structures are such waivers expected to be granted? In other words, how significant, if at all, is this language to “waive the limitation”? Is it a virtually impossible set of criteria to meet?

Howard: With regards to the waiver and circumstance issue, I think it’s first important to recognize that the department can continue to certify buildings since the limitations only apply to the highest levels of LEED. DoD can still certify Gold and Platinum buildings without impediments if there is no additional cost, which they have done and will continue to do…. The [U.S.] Navy has already publicly said they’re moving ahead with their plans to certify all buildings [as LEED] Gold in the beginning of 2013, and they say they can do so because there is no additional cost to their pursuing of LEED certification in that process.

GBI: Do you have any idea what percentage of projects will be able to meet the criteria for funding?

Howard: There is a differentiation in the law. There is one that is cost-neutral, which is just an indication that if there is no additional cost to pursue higher levels of certification, that there is no waiver needed [and that] a project can continue to move forward without impediment. There is a waiver provision that is also in the law that does indicate if there is in instances additional cost that there would have to be a notification that there is a positive return on investment…. We’re working with the appropriate agencies to get further clarification and guidance on the practical effects of that, and then how other projects might be ensnared in that process. I think until we get a better idea of how the department is going to interpret the law, I don’t want to give an estimation of how many buildings might be [affected].

GBI: How long might that take?

Howard: The law only governs the fiscal year of 2012, and we’re already past one of the quarters. I would expect guidance would need to come fairly quickly.

GBI: What actions, if any, is USGBC considering to have the prohibition of DoD funds for LEED certification rescinded or to compensate for the shortfall in some other way? Is filing a lawsuit an option?

Howard: While the law is problematic, and it does put up barriers to people being able to deliver the best buildings possible, we have to live within the parameters of the law and will do so to help provide the best buildings possible to our men and women protecting our country.

GBI: What other green building/LEED-related legislation is USGBC tracking most closely? What are the realistic chances of any of these other bills passing this year?

Howard: We continue to follow, generally speaking, the authorization legislation that could be coming [involving] the Surface Transportation Act to the next defense reauthorization and [to] appropriations measures [involving] the U.S. Department of Energy, the U.S. General Services Administration [and other] legislation. But it’s not certain how much is going to get accomplished in an election year with a truncated legislative calendar, but we continue to track [legislation addressing green buildings at the federal level].

GBI: How much of a concern is there that the DoD legislation is going to set a precedent and cross over to several other authorization bills?

Howard: I think it is a little too early to tell in terms of what that looks like. I think what we continue to see from study after study done by the federal government is that we continue to demonstrate cost-effective results, positive return on investments to federal projects. As long as people continue to actually see that hard-line data and they continue to see what not only the federal sector is doing but what the private sector is [contributing], I think it’s hard-pressed for us to not be able to take a pause and see what positive return on investment we’re bringing to customers in and outside of the federal sphere.

GBI Profiles Eight Additional Green Building Measures

Congress is reviewing the following bills addressing green buildings:

H.R. 627 -- Rep. Emanuel Cleaver (D-Mo.) introduced this bill, which would prohibit a seller of housing that would be purchased with the assistance of a federally related housing loan from selling such housing, unless the following conditions are met: no less than five years before the sale of such housing, an energy audit is conducted; the seller provides the purchaser a copy of audit results; and such results are submitted to the secretary of Housing and Urban Development (HUD). Audit results would be recorded using energy audit and disclosure forms prescribed by HUD and include the following: a standardized ratings score that allows the housing’s energy efficiency to be compared to the energy efficiency of similar housing; and a prioritized list, based on cost-effectiveness and energy savings, of potential energy-efficiency improvements. The House Financial Services Committee’s Subcommittee on Insurance, Housing and Community Opportunity is reviewing the bill, which has no cosponsors.

S.902 –- Sen. Tom Harkin’s (D-Iowa) School Building Fairness bill would amend the Elementary and Secondary Education Act of 1965 to direct the U.S. Department of Education to allocate funds to states for competitive matching grants to local educational agencies (LEAs) for school repair, renovation, and construction. In awarding such grants to LEAs, states would be required to consider: the percentage of poor children each LEA serves; the condition of their public schools or need for additional schools; the extent to which they will comply with certain green building standards; their fiscal capacity to cover repairs, renovations, and construction without such a grant; and the likelihood that they will maintain repaired, renovated, or newly constructed schools in good condition.

H.R.1611 -– The Clean Energy Business Zone bill would amend the Internal Revenue Code to do the following: authorize the secretary of the Treasury to designate 40 clean energy business zones between 2011 and 2014; allow an increased tax credit for wages paid in such a zone; allow a work opportunity tax credit for wages paid to an employee in such a zone; allow financing of any qualified green building or clean energy facility with clean renewable energy bonds; allow increased expensing of property in such a zone; and allow an exclusion from gross income of gain from the sale or exchange or any clean energy business zone asset held for more than five years. The Small Business Act and the Small Business Investment Act of 1958 would be amended to waive loan fees for qualified green building and clean energy facility loans made before 2022. The bill, introduced by Rep. Michael Grimm (R-N.Y.), is undergoing consideration in the House Ways and Means Committee and the Committee on Small Business.

H.R.1881 -– Rep. Ben Ray Lujan’s (D-N.M.) Community College Energy Training bill, which has 34 cosponsors, would create a program awarding grants to community colleges to provide workforce training and education in sustainable energy industries and practices, such as the following: high-performance green building construction, design, and redevelopment; alternative energy; sustainable energy technologies; water, energy, and resource conservation; recycling and waste reduction; and sustainable agriculture and farming. The legislation would require that at least one-half of the grant funds be awarded to community colleges with existing sustainability programs leading to certificates, credentials, or degrees in at least one of these industries or practices. The House Education and the Workforce Committee’s Subcommittee on Higher Education and Workforce Training is reviewing the bill.

H.R.2914 -- Rep. Janice Schakowsky’s (D-Ill.) Emergency Jobs to Restore the American Dream bill would direct LEA grantees to use their grants for public school modernization, renovation, repairs, construction, or maintenance that meet LEED standards, Energy Star standards, Collaborative for High Performance Schools (CHPS) criteria, Green Building Initiative environmental design and rating standards (Green Globes), or equivalent standards adopted by the entities that have jurisdiction over such LEAs.

H.R.2948 -– Rep. Rosa DeLauro’s (D-Conn.) Fix America’s Schools Today bill would direct the U.S. Department of Education to allocate grants to states and, through them, subgrants to LEAs to modernize, renovate, or repair early learning or elementary or secondary education facilities. The legislation would require states, in providing assistance to community college projects, to consider the extent to which the project complies with certain green building standards. The House Education and the Workforce Committee’s Subcommittee on Higher Education and Workforce Training is reviewing the bill. Sen. Sherrod Brown (D-Ohio) introduced a comparable measure (S. 1597) in the Senate, where that chamber’s Health, Education, Labor and Pensions Committee is reviewing the legislation.

H.R.3371-– Rep. Russ Carnahan’s (D-Mo.) High-Performance Federal Buildings bill, which has 18 cosponsors, would require federal agency heads involved in the construction of new federal buildings for which estimated construction costs exceed $1 million and are comprised by federal funding of greater than 50 percent to ensure that the life-cycle cost (i.e., the sum of investment, capital, installation, energy, operating, maintenance, and replacement costs) of the building is considered during its design. The U.S. General Services Administration (GSA) would issue regulations establishing federal building commissioning standards modeled on existing private-sector standards and guidelines for the commissioning process generally, the commissioning of individual building systems, and the use of building automation systems. A director of the Office of Federal High-Performance Green Buildings would assist federal agencies regarding the use of building information modeling, commissioning, and integrated design processes. The bill would amend the National Energy Conservation Policy Act to require reporting on commissioning and energy and water savings measures. The U.S. Department of Energy would create and update energy and water efficiency standards for federal buildings. The House Energy and Commerce Committee’s Subcommittee on Energy and Power is considering the legislation.

H.R.3490 -– Rep. Ben Chandler’s (D-Ky.) 21st Century Green High-Performing Public School Facilities bill would direct LEA grantees to use a percentage of their grants, rising in 10 percent increments from 50 percent in FY’12 to 100 percent in FY’17, for public school modernization, renovation, repairs, or construction that meet LEED green building rating standards, Energy Star standards, CHPS criteria, Green Globes, or equivalent standards adopted by the entities that have jurisdiction over such LEAs. The House Education and the Workforce Committee is considering the proposal.




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