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Committee Sends HB 1029 Revisions to Green Building Standards to House Floor

The House State Affairs Committee amended and approved House Bill 1029 this morning. HB 1029 updates the environmental and energy-efficiency requirements created in 2008 for the construction and renovation of state buildings.

HB 1029 updates South Dakota statute to use the United States Green Building Council's Leadership in Energy and Environmental Design latest standards, issued November 2013, instead of the July 2009 standards. HB 1029 also raises the threshold for requiring adherence to LEED standards from 5,000 square feet or $500,000 in construction cost to 10,000 square feet or $1,000,000 in construction cost.

Earlier this week, Dakota Rural Action blogger* Tony Helland raised his concern that doubling the square footage and dollar thresholds will reduce the state's energy savings and its commitment to reducing the state's environmental impact. No one at this morning's hearing raised that concern. In her testimony explaining why the Bureau of Administration requested HB 1029, State Engineer Kristi Honeywell simply said that smaller buildings cannot meet the LEED standards. (Hmm... an 872-square-foot dental office can do it, but hey, I'm a blogger, not an engineer....)

David Owen of the South Dakota joined Engineer Honeywell to advocate HB 1029. Interestingly, he noted that when the state proposed the original green-building requirements in 2008, the business sector raised its predictable hue and cry about government requirements. Owen summarized that resistance as "blah blah." He then told today's committee that the state was right, that the original LEED requirements were a good idea, and that the state has used the energy-efficiency requirements well. Keep that example in mind the next time you hear the Chamber of Commerce crying about government action killing jobs.

The American Chemistry Council (that's an ALEC pro-corporate lobby, not chemists) and the Black Hills Forestry Resources Association were on hand to oppose HB 1029. These two industry groups did not like the direction the original HB 1029 went in getting rid of some alternative rating systems from the green-building requirement. Larry Mann, lobbyist for the BHFRA, explained that in 2008, the LEED standards didn't allow credit for timber harvested from national forests. The inclusion of other standards friendlier to Black Hills timber was a compromise that made our green-building requirements tolerable to local industry. HB 1029 as written undid that compromise and raised hackles. But in her opening, Engineer Honeywell offered an amendment to put back updated versions of those alternative standards that the industry lobbyists found perfectly acceptable. Their opposition evaporated, and everyone at the table was happy.

Rep. Roger Solum (R-5/Watertown) posed an interesting question: does South Dakota need these green-building standards to qualify for any federal funding? Engineer Honeywell said no. Apparently, South Dakota has adopted green building standards out of the goodness of its heart.

Rep. Don Haggar (R-10/Sioux Falls) asked what the return on investment is for all this greenery. Engineer Honeywell didn't have the ongoing utility cost savings, but she did say that the up-front cost to get green-certified is less than 2% (I assume she means of the overall costs of the project).

Rep. Jim Bolin (R-16/Canton) asked about the different LEED certification levels. Engineer Honeywell said there are four: certified, silver, gold, and platinum. South Dakota requires and will require post-HB 1029 silver LEED status. Rep. Bolin emphasized that that means we are requiring the second-lowest standard. We're green, but not that green...

...which evidently keeps these green-building requirements tolerable for most of our Republican legislators. House State Affairs passed the multi-standard amendment and House Bill 1029 as amended, with only Rep. Bolin's dissenting vote, for debate on the House floor.

*I really like sound of the words action blogger together. Let's make t-shirts! :-)


  1. Troy 2015.01.23


    I know a person who all his business does is help business conform to LEED standards. He supports change to the larger square footage for two reasons:

    1) The cost-benefit gets out-of-whack as the space gets smaller. Because businesses often have multiple buildings and space, they lose out on getting certified as LEED certified if they don't have all elgible space in compliance. He thinks larger cumulative footage will actually become green with a larger threshold because the ratio is better. And, once they see the benefits, they will move down the space size continuum.

    2) Technology is better designed/engineered for the larger space, thus too expensive for the small space. He thinks in a few years, designs of conversion kits will become better and costs will come down making small space conversion more viable.

    3) Demand for his services exceeds his capacity and the capacity of the industry. Ramp up to match demand takes time plus he fears down the road he and his industry could have too much capacity. Spreading it out is better for the industry and will prevent the "fly-by-night scam artists" from getting a foot-hold.

    Whether relevant to the discussion on state buildings, I don't know. Just food for thought.

  2. Troy 2015.01.23

    P.S. Keeping in mind I'm not an expert, I think some certifications (ala Platinum or Gold) are out of reach of retrofit buildings because we get insuficient points for "building materials" since the building is already built. We are only getting points for lighting and heating/ac type improvements conversions.

    Thus, Bolin's frustration we aren't getting higher certification isn't possible (unless we tear down and replace the buildings which is "not green" since we will be using building materials that otherwise wouldn't be consumed).

  3. caheidelberger Post author | 2015.01.23

    Hang on on Bolin: I didn't hear him explain the import of his question about the "second-lowest" standard. I just no he offered that observation in question time, then voted no on the bill. I have an e-mail in to him seeking clarification.

  4. caheidelberger Post author | 2015.01.23

    Thanks for that engineering perspective, Troy. I would assume it's harder to meet some of those standards on smaller spaces. I'd be curious to learn more from the experts on what size spaces become too small for effective LEED-iness.

    Can you explain to me the "larger cumulative footage will actually become green with a larger threshold because the ratio is better" prediction?

  5. Troy 2015.01.23


    Business has multiple buildings of various size. Some conversions are cost effective and some are not. Most that are not are small space. If company wide they don't have a high enough percentage of space LEED certified, they can't claim they are a green company. They can't claim it, some won't even convert those that make it. Thus, by giving them an "out" on small space, they will do the big space.

    This is what I "contributed" to the conversation to this person in the industry.

    Conversions take capital. Even with good cost-benefit ratios, if the choice is to use your limited capital to buy equipment that keeps you in business or LEED conversion, the former happens and the latter doesn't. The industry would be better served if it had more step-in considerations (ala the space) because it is more achievable in light of limitations such as capital.

    Good ideas in too big of bites just cause choking.

  6. caheidelberger Post author | 2015.01.23

    Interesting, Troy... but then it occurs to me that this state law won't affect any business decisions, since the mandate only applies to state buildings. I suppose the U.S. Green Building Council changed its standards for LEED certification, then the factors to which you refer would apply to your business friends as they consider their next projects.

    For state projects, we're just talking about setting the specs and bidding out for that green work to be done. Our "business case" then rests mostly on what functionality we can get in the building and how much we'll save on our utility bills for the taxpayers.

    Cursory Googling finds me this 2012 blog post summarizing LEED return-on-investment studies. Some findings:

    —Renovations to reach LEED status have premiums of 1.84% for basic certification, 2.11% for silver (the state's chosen standard), and 1.82% for gold (what? lower for a higher standard?).
    —Average LEED energy savings beat 32%.
    —In 2010, 23% of corporate decision makers said sustainability was a major factor in lease decisions; 18% called sustainability a tie-breaker.
    —Leed certification adds an 11% premium to office building sale price and 15% to 18% to rent.
    —Green building factors like better air quality, more sunlight, and fewer building-related illnesses may increase productivity, meaning folks working in this buildings do more work.

  7. larry kurtz 2015.01.23

    Anyone else reading Troy's revisionist history of flooding in 2011 over at the Dakota Water Closet? It's as if all Republicans have ignored the siltation of the Bad River Delta since Homestake started filling Lake Oahe since 1962.

  8. larry kurtz 2015.01.23

    It's like Charlie Hoffman cracks the Glenlivet at dawn.

  9. Bill Dithmer 2015.01.23

    Im just gonna come right out and say this. LEED certification would mean that you have built to a certain standard. Remember that there are certs for both interiors, and exteriors, and design and construction. You can have a look at what the upfront cost are for certification here.

    For that money you get a nice LEED sign. I'm sorry, its hard for me to justify paying a huge chunck of money to anyone to tell me if I built green enough for, well who for? Its another very very rich 501c. Look at their site. Its all about the money.

    Now this is just my blind courosity, but why, without any real push from anyone, did the state of SD decide to get LEED certified buildings? I dont live there but if I did, there'd be some splannen to do.

    Who started this process?
    How many building projects are we talking about?
    What would the reason for certification, bragging rights?
    And what is the relationship between the person pushing the paper for LEED, and their counterparts in state government?

    Your general contractor has every bit of building information from your projects. You know if your green or not. If you feel the need to have someone tell you what a good person you are. Then you are headed in the right direction, as long as they can see the color of your money.

    I had already been warned before we started building not to get hooked up with this bunch, from a couple who had experience with them. Once they started the process it just kept getting more expensive. They got their certification, but didnt hardly see that it did them much good.

    For bragging rights!

    The Blindman

  10. mhs 2015.01.23

    I've also financed a number of LEED facilities the last few years and take exception to the "second lowest" phraseology. Silver is a seriously green building. Good example where hitting gold level gets unattainable is your average high school that has labs. Direct venting to the outside waste energy, obviously, but, you gotta get the fumes out, right? Gold and platinum level are often ver

  11. mhs 2015.01.23

    y single-purpose facilities. As a lender, both we and clients strive for LEED certification as it can significantly improve the appraised value of the building. There's a different focus for public buildings, as market value doesn't matter, but, public buildings are in service to the owner (we the people!) for much longer periods of time so even a 2% annual savings can justify the added cost over a 50 year life.

  12. Bill Dithmer 2015.01.23

    mhs you are full of shit. The value of the building is the value of the building. If its built to the same qualifications as your LEED certification it is the same damn building. The only thing different is that piece of paper.

    The Blindman

  13. mhs 2015.01.23

    I got two billion dollars worth of capital project loans I've financed in a 30 year career says otherwise.

    Whadda you got?

  14. caheidelberger Post author | 2015.01.23

    Bill Dithmer, I'd say the reasons I cited above to Troy in my list of returns on investment could justify seeking green status well beyond bragging rights. I will grant that one could do lots of the things on the USGBC's checklist without bothering to apply for the official LEED status. But the current statute, as well as the revision HB 1029 would do, simply save us some time in creating standards, set some specific goals for our architects, engineers, and builders to follow, and get us more efficient, healthier buildings. Is that so bad?

  15. caheidelberger Post author | 2015.01.23

    Interesting banker's perspective, MHS. Can you explain for us exactly how LEED status increases building value? How much is perception, and how much is demonstrated added economic value (assuming those are discrete categories)?

  16. Bill Dithmer 2015.01.23

    Lets have a look at a couple of those appraisals that show the difference in projected selling price of an LEED building, and one that is exactly the same.

    Let me put it another way. If there are two buildings owned by the same company, and they are exactly the same except only one has certification. You cant tell me tha someone is going to be dumb enough to pay more for that piece of paper.

    Remember you can only guess an appraised value before its built. The real thing comes much later. So how do they come up with these numbers?

    The Blindman

  17. Bill Dithmer 2015.01.23

    Bring that proof on. Lets see some real numbers.

    The Blindman

  18. larry kurtz 2015.01.23

    A two billion dollar investor commenting on a two-bit POS blog? Really?

  19. Bill Dithmer 2015.01.23

    Cory you are assuming that architects, engineers, and builders, are to dumb it build green without these clowns. Its science, not magic.

    The Blindman

  20. mhs 2015.01.23

    Bill, how they come up with them is one Hell of good question. I just closed a deal the appraisal was 425 pages long on a $25MM building. Appraisals have national standard and certification is one of the things that increase value.

    After that, you're right. Like all real estate it's the local market that matters. Best example is the last few years I spent working in Phoenix- the hardest hit commercial real estate market in the nation. Vacant strip malls were a dime a dozen. Since it's such an expensive energy market, all our developer clients looked at the economic value of energy partly, but, thought certification was just as valuable as a marketing angle as they look to sell the property after it's been rehabbed and working again. We're talking silver level at best, Troy's right: the higher levels just don't pay unless you're Google and doing it for other than economic reasons.

    In short: probably a more important factor in some parts of the country than others.

  21. caheidelberger Post author | 2015.01.23

    Bill D directs us to the fees for getting LEED. If I'm reading Bill's link right, it will cost me $6,400 to get USGBC to issue me silver status for a modest-sized Madville Times Global Studio building to compete with Gordon Howie's new international headquarters. Before I spend that extra money on top of all the actual brick and steel and lights and landscaping, I want to from my banker (MHS? Got room for me in your portfolio?), not the USGBC guys, that that the piece of paper or sign or Web badge or whatever that $6,400 buys me will by itself add enough value to my building to pay back the investment. Thinking about what Bill D is saying, what do I get more from: spending $6,400 to obtain the formal certification, or spending $6,000 to buy higher-grade windows and insulation and $400 to host a grand-opening pizza party for all my readers in the sunny building courtyard?

  22. larry kurtz 2015.01.23

    I'm with Bill: show us the diesel fuel.

  23. Bill Dithmer 2015.01.23

    You are certifying with a non profit organization whoes only purpose is to sell its certification. In realistic terms, until the entire industry adopts these standards, you will still be building the same old ways unless your forced to build better.

    If its so great why arent the governors houses built to LEED specs? Not certification, but specs? It would be easy to reach that silver mark in that small of a building.

    The Blindman

  24. larry kurtz 2015.01.23

    The state is the largest investor in LEED certified construction: RC Journal.

  25. mhs 2015.01.23

    Well, the International Code Council that Corey's buddy Rick Weiland got paid big bucks to sit on sets building standards for architects all over the world that stick, right? Nobody elected them.

    (Just had to throw in one last partisan cheap shot, sorry CH!)

  26. larry kurtz 2015.01.23

    Mahmoud Hani Shafai.

  27. Bill Dithmer 2015.01.23

    Let me put this in a way that everybody can understand.

    Cory, your looking for more money for teachers. What would be more important to you, a LEED certified building, of a building built the same but saving the certification money for education?

    There are more ways to waste in the SD, this aint the only one. All you have to do is research.

    The Blindman

  28. Bill Dithmer 2015.01.23

    This is the last post till morning. mhs, it looks like you are a money lender. How many loans have you made in the last ten years for less then $50,000? How many people do you make loans to that make less the $30,000 a year? Those are the real South Dakotans, not the kind you loan millions to.

    The Blindman

  29. caheidelberger Post author | 2015.01.24

    I'll take every penny we can get for K-12, Bill, but I need some convincing that green building reqs are the pot to raid. If my guess from your fees is right, the number of LEED-certified state buildings (search here at would have rung up fees maybe reaching six figures since 2008. I need eight or nine figures each year to get teacher pay where I want it.

    When we pay USGBC for LEED certification, do we really only get a piece of paper? Or does USGBC provide any service that helps the building process?

    And MHS, come on: green building isn't a partisan issue. Making the planet and your office bullding) healthier is good for Democrats, Republicans, Independents, and everyone else :-)

    But yes, my friend Rick helped promote green building codes. Good for him!

  30. Bill Fleming 2015.01.24

    LOL, sounds like you guys are basically debating the added value of 'branding.' Good luck trying to explain it, but it's real alright. When there's a battle between perception and reality, perception almost always wins... In the market place, at the ballot box, everywhere.

    Two guitars made in the same year out of the same materials to the same specifications. They look, play and sound exactly the same. One of them has a Martin logo on it. The other one has a trade mark you've never heard of. Which one is worth more? How much more? :-)

  31. Roger Elgersma 2015.01.24

    What is the definition of 'higher standard' when it is conservative businessmen talking. The higher standard is that it will be cheaper, easier and make the public think we got green when we really did not get much greener at all.
    There was not fifty percent inflation to warrant doubling the building size. Lighting is not much susceptible to size efficiencies as heating and cooling. So if the supposed higher standard is to make it look good when it is not much different, then it is all fake. Are they suggesting that the standards of only a few years ago were made by engineers that had no concept of size efficiencies, not a logical assumption. My brother is an engineer and would be quite annoyed by such assumptions.
    As for the bankers assumptions on how to value a building. Since he can not buy or sell or make a loan to a government building he does not see it as the same thing. He forgets the real reason that the buildings value go up. It is because their costs have gone down. Just because he can not put a government building on his list of collateral, he sees that value as none existent. The value of the heating costs going down two percent or ten percent will reflect as the same efficiency difference if he can make a loan against it or not. Shortsightedness and lack of understanding of value is not good in a banker.

  32. Bill Dithmer 2015.01.24

    Cory, you can order duplicates of your certification for a price, if you want more.

    Also the whole process is subjective, depending on how the panel feels.

    Yes I know that isnt enough money to help the teachers much, but my point was that LEED cert is just the tip of the iceberg.

    Let me state that I'm not against LEED standards, but why not just print those standards so everybody would know what to expect? Why the mystery? Why do they need a panel when you can run the spects? Oh thats right, they also look at these things.

    " One hundred possible credit points are distributed across six credit categories: location and transportation, materials and resources, water efficiency, energy and atmosphere, sustainable sites, and indoor environmental quality. Up to ten more points can be earned for innovation in design (6 points) and regional priority (4 points). Points are allocated based on potential for good—more points go for actions with the least environmental impact and most human benefit."

    "Credits come in many different flavors, some more involved than others."

    No clear answers written in stone, its up to a panel to decide. Its about the money.

    Great post Roger.

    BF, of course the Martin would be more valuable to either the collector, or the collector player. But the guitar that looked the same and sounded the same with the same set up has the better value for the money spent by a player.

    For a good many years I would make the rounds of the pawn shops looking for guitars that only needed a human to hold em, otherwise they played themselves. I did manage to find a few and for a good enough price some of my friends ended up with "players."

    I bought my player from Haggerty's when they were still downtown. I played every accustic in town before I found it.

    Accustic guitars are born, never manufactured.

    The Blindman

  33. mhs 2015.01.24

    Found my 1975 Alvarez-Yari the same way Bill! Sioux Falls Music's bargain rack. Too bad my arthritic fingers gave out before it did.

  34. Bill Dithmer 2015.01.24

    mhs, I've heard so much about their 50 anniversary 1965 I cant wait to see if its as good as my friend says it is. If so it would be a good guitar for the money.

    The Blindman

  35. Bill Fleming 2015.01.24

    It would have the better 'value' only if the buyer never wanted to sell it. When something attains that level we call it 'priceless.' I have a little red Mexican requinto like that. Not for sale. Ever. And yeah, I played a lot of others before that one 'played itself' for me. Played a lot of others since, but little red is still the one.

  36. mhs 2015.01.24

    If you do FB, follow Joe Bonamassa. All the guy does is post pics of his collection. He's got a serious vintage axe addiction.

  37. Bill Dithmer 2015.01.24

    Joe has to be our greatest multi genre artist living today. All you need is his "Woke Up Dreaming" at Royal Albert to know that. And yes to his collection.

    Here is one of my favorite accustic artist. I have never even seen a Lakewood guitar in person and want one just to look at. His name is Ulli Bögershausen, and I spend at least a night a week listening to him.

    Now how in the hell did I let someone drag me down guitar road. It doesnt take much to distract me where strings are concerned.

    The Blindman

  38. Troy 2015.01.24

    Twenty years ago "green" meant building especially office buildings and hotels with inefficient "space heaters" as the principle was heat and cool only what was necessary. The result is a lot of buildings are not only don't have central air moving "plumbing" but it is impossible to put in the ducts to do so.

    Now, with the technological improvements of heat pumps, ability to operate efficiently with variable loads, and air moving technologies, we have a plethora of "anti-green" buildings built under the premise of being green.

    The issues aren't just about an intent of being "green" or "cheap and dirty" but much more complex. Our policy should reflect this complexity and not delude ourselves as simpletons.

  39. larry kurtz 2015.01.24

    thank you doctor science.

  40. Douglas Wiken 2015.01.25

    Saving energy makes sense in government buildings, but engineering is partly made up by making decisions between lower costs and lower quality or higher costs and higher quality or efficiency.

    Ration comparison of costs and benefits over building lifetime make sense whether or not some certification agency offers its blessing.

    I can understand bankers willing to loan extra money for energy conservation when that conservation may save nearly enough to make the payments to the bank.

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