Important bills before Legislature
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, email@example.com and Leslie at 505-670-7578, firstname.lastname@example.org, and visit www.palosantodesigns.com.