Connecticut Governor Vetoes Tax Credit For Green Buildings
Governor Rell (R-CT) has vetoed Public Act 09-202 which would have provided a tax credit of 8 1/2% for a real estate development project that was designed to meet or exceed the LEED Gold standard (New or Major Renovation), a tax credit of 10 1/2% for a real estate development project that was designed to meet or exceed the LEED Platinum standard (New or Major Renovation), a tax credit of 5% for a real estate development project designed to meet or exceed the LEED Gold standard (Core and Shell or Commercial Interior) and a tax credit of 7% for a real estate project designed to meet or exceed the LEED Platinum standard (Core and Shell and Commercial Interior).
In addition, the statute would have added 1/2% credit for a project that is (1) mixed use development, (2) located in a brownfield zone, (3) did not require a sewer extension of more than 1/8 of a mile or (4) located within one-quarter mile walking distance of public bus transit or 1/2 mile walking distance from a rail line.
While the statute did not cap the amount of the credit, the costs per project were capped at $250 per square foot for new construction and $150 per square foot for renovations. Further, the total amount of tax credits available under the program was $25 million. Further, the taxpayer could not claim more than 25% of the allowable costs in any income year, but the credits could be carried forward for up to 5 years.
Beyond these regulations, the credits were fully assignable and transferable, including nonprofit and institutional project tax credits. Nonprofits and institutional projects could transfer the credits to a pass-through partner for a lump sum cash payment. Further, any subsequent owner or tenant of a project could claim the tax credits so long as the credits are assigned as part of the sale of the project.
Governor Rell vetoed the statute by stating that "fiscal reality is the state cannot afford a new tax credit at this time time."
