Im­por­tant bills be­fore Leg­is­la­ture

Home - Santa Fe Real Estate Guide - - THEHOMEPAGE - MARK AND LES­LIE GIOR­GETTI

As the leg­isla­tive ses­sion plods along this year, a few key bills rel­e­vant to bol­ster­ing our slowly re­cov­er­ing hous­ing mar­ket have gained some trac­tion, and de­serve pas­sage be­fore the ses­sion wraps up. Three in par­tic­u­lar of­fer tax in­cen­tives to home­own­ers and builders for im­ple­ment­ing en­ergy and wa­ter-ef­fi­ciency prac­tices. Not sur­pris­ingly, all three come from our home-grown leg­is­la­tors here in Santa Fe.

Rep. Carl Tru­jillo’s HB 64 “Home En­ergy & Wa­ter Ef­fi­ciency Tax Cred­its” would es­tab­lish tax cred­its for retrofitting ex­ist­ing homes to im­prove their wa­ter or en­ergy ef­fi­ciency by at least 50 per­cent from their ex­ist­ing state. Th­ese tax cred­its would pro­vide up to $3,000 to home­own­ers for con­duct­ing such im­prove­ments.

Rep. Brian Egolf ’s HB 113 “En­ergy Ef­fi­cient Homes Tax Credit” would pro­vide tax in­cen­tive to builders or home­own­ers who con­struct new homes, or ren­o­vate fore­closed homes, while meet­ing cer­tain en­ergy-per­for­mance guide­lines. Based on the HERS (Home En­ergy Rat­ing Sys- tem) in­dex, the tax cred­its (rang­ing from $4,000 to $8,000 per home) would be al­lo­cated on a slid­ing scale based on the level of achieve­ment met in the HERS score.

Se­na­tor PeterWirth’s SB279 “Sus­tain­able Build­ing Tax Credit” would ex­tend this widely popular and suc­cess­ful tax in­cen­tive for builders or home­own­ers who con­struct new homes or com­mer­cial build­ings that meet strict en­ergy and en­vi­ron­men­tal per­for­mance guide­lines (in­clud­ing LEED and Build Green New Mex­ico). The fund­ing for the orig­i­nal tax credit was fully al­lo­cated over a year in ad­vance of its orig­i­nal sun­set date of 2016. This re­newal ver­sion would add fur­ther pro­vi­sions for wa­ter ef­fi­ciency, and in­crease the fund­ing to al­low more el­i­gi­ble projects into the pro­gram.

All three of th­ese bills pro­vide a cost off­set for im­prov­ing the qual­ity of homes avail­able on the mar­ket. Such tax cred­its, although viewed as an ex­pense by some, can, when prop­erly de­signed and im­ple­mented, pro­vide in­creased gross re­ceipts tax to the state for the prod­ucts and ser­vices re­quired in con­duct­ing the up­grades. And each of th­ese bills ap­pears to have gained bi-par­ti­san sup­port, and is viewed as both busi­ness-friendly and en­vi­ron­ment-friendly, a win-win. How­ever, their fates are un­clear due pri­mar­ily to a bud­get short­fall ex­pected this year from fall­ing oil prices and the as­so­ci­ated tax-rev­enue drop from our state’s oil and gas in­dus­try.

As of the date of this writ­ing (Feb. 16), each of th­ese bills has passed out of their early com­mit­tee hear­ings and are set­tling on the desks of their re­spec­tive fi­nance com­mit­tees un­til it is determined how much money may be avail­able for such tax cred­its. Re­gard­less of the to­tal kitty avail­able for new tax in­cen­tives this year, it is im­por­tant that th­ese bills are passed, or com­bined so that a legal frame­work is es­tab­lished that both stim­u­lates the con­struc­tion in­dus­try and pro­vides con­sumer pro­tec­tions in the form of third-party-ver­i­fied, high-per­for­mance build­ings. If fund­ing for the cred­its is not avail­able this round, putting the laws on the books now would al­low next year’s leg­isla­tive ses­sion to al­lo­cate fund­ing as ap­pro­pri­ate.

Mark Gior­getti and Les­lie Gior­getti are both prin­ci­pals at Palo Santo De­signs, a Santa Fe de­sign-build con­trac­tor spe­cial­iz­ing in high-per­for­mance homes. Mark serves as pres­i­dent of the Santa Fe Area Home Builders’ As­so­ci­a­tion, and Les­lie is an as­so­ciate bro­ker with Santa Fe Prop­er­ties. Con­tact Mark at 505-670-4236, mark@palosan­tode­signs.com and Les­lie at 505-670-7578, les­lie.gior­getti@sf­props.com, and visit www.palosan­tode­signs.com.

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