House Committee on Transportation & Energy (03/05/2015)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON TRANSPORTATION & ENERGY

Date:	03/05/2015	ATTENDANCE

Time:	10:06 AM to 11:14 AM	Becker J.	X
		Buck	X
Place:	HCR 0112	Carver	X
		Coram	X
This Meeting was called to order by		Esgar	X
	Representative Tyler	Kraft-Tharp	X
		Melton	X
This Report was prepared by		Moreno	X
	Matt Kiszka	Neville P.	X
		Nordberg	X
		Winter	X
		Mitsch Bush	X
		Tyler	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB15-1236		Amended, Referred to Finance

10:07 AM

The committee was called to order. A quorum was present.

10:07 AM -- HB 15-1236

Representative Winter, prime sponsor, came to the table to present House Bill 15-1236. The bill creates a nonrefundable income tax credit for construction, remodeling, and retrofitting of multifamily residential and commercial buildings and affordable housing projects that attain certain standards of energy efficiency. The credit is available to owners of buildings in the following three categories:

multifamily residential buildings or affordable housing projects that undergo retrofitting resulting in a reduction of energy consumption of at least 20 percent;

new multifamily residential or commercial buildings, or multifamily residential or commercial buildings that undergo a major renovation, with energy savings of at least 20 percent relative to the commercial energy efficiency standard in the International Energy Conservation Code, and that are certified at a level of silver or higher by the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) program, or at a level of two Green Globes or higher by the Green Building Initiative; and

new affordable housing projects, or affordable housing projects that undergo a major renovation, with energy savings of at least 20 percent relative to the commercial energy efficiency standard in the International Energy Conservation Code, and that achieve at least 35 point equivalents (for new buildings) or 30 point equivalents (for major renovations) as an enterprise green community.

The credit is available for tax years 2016 through 2020. A credit that exceeds a taxpayer's income tax liability is not refunded and may be carried forward for a period of up to five years. The amount of credit available varies depending on the eligibility requirements that the building satisfies.

Amendment L.001 (Attachment A) was distributed by Representative Winter to the committee.

150305 AttachA.pdf

10:10 AM -- Peter Rusin, representing the Colorado Energy Office (CEO), spoke in favor of the bill. He said that the bill is intended to be complementary to House Bill 15-1132, which provides a tax credit for residential energy efficiency improvements. Mr. Rusin responded to questions on the definition of "major renovation" under the bill, where the values used to calculate the credit for new and substantially renovated buildings came from, how the CEO's credit certification process will work, if CEO project inspectors have to be certified under the LEED or Green Globes rating systems, and how the certification process will work in rural areas.

10:22 AM

Representative Winter and Mr. Rusin responded to questions on the distinction between major renovations of buildings and building retrofits under the bill, how buildings can become certified under the LEED or Green Globes rating systems, where auditors are located in the state, if the CEO believes that credit certification will be available in rural areas, and if building projects will be utilizing the Energy Star Portfolio Manager tool.

10:30 AM -- Lauren Smith, representing the Southwest Energy Efficiency Project (SWEEP), spoke in favor of the bill. She spoke to the challenges building owners face when considering energy efficiency upgrades and the estimated impact of the bill on utility cost savings. Ms. Smith responded to questions on the estimated cost savings for utilities, what the anticipated energy cost savings would be for a tenant of an apartment building that underwent efficiency upgrades, and the difference between the LEED and Green Globes systems.

10:38 AM -- Ken Hoagland, representing Housing Colorado, spoke in support of the bill. Mr. Hoagland spoke to his experience within the affordable housing industry in Colorado. He highlighted the importance of the Enterprise Green system to affordable housing projects. He discussed some amendments to the bill that Housing Colorado would like to see made, including how tax credits would be divided between multiple owners of affordable housing projects. He distributed a picture of an affordable housing project that is currently under construction by Housing Colorado (Attachment B). He responded to questions on whether nonprofits would be eligible for a tax credit and specific projects in the state that could apply for the tax credit.

150305 AttachB.pdf

10:48 AM -- Lauren Poole, representing the Energy Efficient Business Council (EEBC), Chuck Silkman, representing Ameresco, and Paul Kriescher, representing Lightly Treading, spoke in favor of the bill. Ms. Poole said that the EEBC is a coalition of energy efficient businesses that has generated 14,000 jobs in Colorado, and represents manufacturers, distributors, and energy service providers. She said the bill will be an incentive for business owners to implement energy efficiency and will boost the economy. Mr. Silkman said that Ameresco is the largest independent energy services company in the United States, and has worked on about 50 projects throughout Colorado. He said the bill is focused on the private sector, which has traditionally been difficult to engage with on energy efficiency retrofits. He said the bill will make such retrofits more affordable for businesses. Mr. Kriescher said that Lightly Treading works mainly on the construction of multi-family homes, with a focus on buildings that are energy efficient. He said that multi-family projects would benefit greatly in the long term from the tax credit. The panel responded to questions on how the businesses that the EEBC represents would benefit from the passage of the bill, if the bill would complement past legislation surrounding property assessed clean energy (PACE) financing, if the EEBC represents companies in rural Colorado, and if the bill would help energy services companies expand more into rural areas.

11:00 AM -- Peggi O'Keefe, representing the Building Owners and Managers Association (BOMA), spoke in favor of the bill. Ms. O'Keefe said that BOMA appreciates the bill's incentive approach.

11:02 AM -- Heidi Morgan, representing Black Hills Corporation, spoke in favor of the bill. She said the bill is a good compliment to the existing energy efficiency and DSM programs that Black Hills already has in place, and that it would establish incentives for building owners to achieve energy savings.

11:05 AM

Representative Winter explained how Amendment L.001 clarifies that the bill applies to both natural gas and electric utilities, and makes some other clarifications.


BILL:	HB15-1236
TIME:	11:06:22 AM
MOVED:	Winter
MOTION:	Adopt amendment L.001 (Attachment A). The motion passed without objection.
SECONDED:	Esgar
		VOTE
	Becker J.
	Buck
	Carver
	Coram
	Esgar
	Kraft-Tharp
	Melton
	Moreno
	Neville P.
	Nordberg
	Winter
	Mitsch Bush
	Tyler
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

11:07 AM

Representative Winter made her closing comments, noting that the bill would benefit the Colorado economy. The committee discussed the merits of the bill.


BILL:	HB15-1236
TIME:	11:13:59 AM
MOVED:	Winter
MOTION:	Refer House Bill 15-1236, as amended, to the Committee on Finance. The motion passed on a vote of 8-5.
SECONDED:	Mitsch Bush
		VOTE
	Becker J.	No
	Buck	No
	Carver	No
	Coram	Yes
	Esgar	Yes
	Kraft-Tharp	Yes
	Melton	Yes
	Moreno	Yes
	Neville P.	No
	Nordberg	No
	Winter	Yes
	Mitsch Bush	Yes
	Tyler	Yes
Final YES: 8 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

11:14 AM

The committee adjourned.