‘Green’ perks progress, with questions

David McGrath Schwartz

Wednesday, Dec. 5, 2007 | 6:56 a.m.

After months of wrangling, regulations that will guide significant tax breaks for environmentally friendly projects were adopted Tuesday by a subcommittee of state legislators.

Unclear, though, is which projects will benefit from the new regulations - and the cost to taxpayers of encouraging "green" projects.

The amount of property and sales taxes set to be rebated to developers in exchange for building green projects has been pegged at $515 million by the research firm Applied Analysis.

But if one lobbyist is correct, that number could rise by tens of millions of dollars as projects not previously counted get added to the list.

For instance, the $2.8 billion Fontainebleau Las Vegas resort hadn't been assumed to qualify for a larger tax rebate. But under regulations passed Tuesday it will qualify, according to Les Lo Baugh, a lobbyist for the resort. That would drive up the taxpayers' tab even further.

Which projects ultimately qualify for the tax perks won't be known for months. Under the regulations, the state's Energy Office has 120 days to review projects that meet the requirements for an older set of more generous tax benefits.

Its recommendations will then be passed to the Tax Commission.

Tuesday's vote brought a sense of relief to both sides in the debate - developers who want to protect their interests in the law's provisions that call for substantial tax rebates and reformers who argue that the original law, passed in 2005, was too generous.

The law was reformed this year. Legislators established two tiers of tax rebates - a more generous one for those who planned early to build green, a less generous one for the others.

The legislative subcommittee on Tuesday determined what proof developers must provide to qualify for the larger tax break.

"We're pleased with the final form of the legislation," said Michael Mathis, general counsel and vice president for Echelon, a $4.7 billion Boyd Gaming project.

"We're clearly happy to be moving forward," said Assemblywoman Marilyn Kirkpatrick, D-Las Vegas, who helped author the regulations. "Clearly we have a high standard in place going forward."

Sabra Smith-Newby, lobbyist for Clark County, said, "It isn't perfect from our perspective, but it's certainly a long way from where we started."

State Sen. Maggie Carlton, D-Las Vegas, voted against the regulations because she didn't agree the director of the Energy Office should have the degree of power provided.

"Giving the director that amount of discretion opens the door to people we haven't talked about," Carlton said. "It gives uncertainty to the whole thing." She said she has full confidence in the current director, Hatice Gecol, but the officeholder could change.

Assembly Speaker Barbara Buckley, a Democrat, said the provision was necessary to shield the state from lawsuits.