Enforcing "Green" Building Laws: Do "Feebates" work?

I give much of the credit for my starting this blog to Chris Cheatham who publishes the Green Building Law Update blog. Chris has been very generous with his time and advise and I thank him for that.

Chris has a number of posts about two local initiatives, one in Portland, OR and the other in Washington, D.C.

In Portland, the city council is developing a "Feebate" program which imposes a fee for construction that is mandated to meet LEED standards but fails to do so. Any fees collected would be deposited in a "green building fund". The fund would be used, in part, for "staffing and operating costs to provide technical assistance, plan review, and inspection and monitoring of green buildings."

The Green Building Act in Washington, D.C. requires the posting of a "performance bond" for projects required to meet LEED standards. If the building fails to meet LEED standards, the performance bond is forfeited to the City.

Both laws would face serious challenges in New York. The first issue is whether there is statutory authority for a local municipality to exact either payment as a "fee". In New York, there is no power to regulate land use other than through legislative grant. The most common exaction allowed by statute is the payment of parkland fees in-lieu-of-land as a condition of subdivision approval. State statute allows local municipalities to provide for the collection of parkland fees in its local laws.

While neither the Portland nor the D.C. programs would find statutory authority in New York, there may be an exception. Under the NYS Municipal Home Rule Law, local municipalities may enact local laws that are not inconsistent with the state constitution or statutes. Local municipalities may also "supercede" state law unless the state has expressly prohibited the adoption of such local law. Under Municipal Home Rule, both programs would be permissible if the legislation was specifically adopted under the municipal home rule law, and there was a "rational nexus" between the property and the specified problem being addressed. Is there a sufficient nexus between either exaction and a "matter" distinctly of local concern (ie. mandating/encouraging sustainable building)? Is it more difficult to prove this nexus when the exaction is "penal" in nature?

The second issue is whether the exaction is a tax as opposed to a fee. In Radio Common Carriers of New York, Inc. v. State (601 NYS2d 513) the court defined the difference as follows: "a tax is defined as a levy made for the purpose of raising revenue for a general governmental purpose; a fee is enacted principally as an integral part of the regulation of an activity and to cover the cost of regulation". If the exaction is a tax, it must be enacted under a taxing authority granted by state law. To be considered a fee, the exactions similar to Portland and D.C. must be for the purpose of offsetting the costs of a specific governmental service, as opposed to generating revenues to offset governmental regulations generally. Is either exaction imposed to specifically offset the costs of government services provided in relation to the construction activity? Does this argument fail because the exaction will not be collected if the construction obtains LEED certification?

Are there similar issues in other jurisdictions than NY? What are your thoughts?