History

• The push to promote renewable energy in Michigan began in earnest in 2002 when Michigan created a tax exemption for businesses with alternative energy property (generally defined as: alternative energy system, alternative energy vehicles and the personal property of an alternative energy technology business). The exemption applied to taxes levied after December 31, 2002 and before January 1, 2013.
• In 2008 a spate of legislation was passed that was designed to promote renewable energy, including Act 270 which amended the Michigan Business Tax Act and provided a tax credit to any photovoltaic manufacturing business that entered into an agreement with the Michigan Economic Growth Authority to construct a new manufacturing plant.
• One of the larger pieces of “sustainable/green” legislation enacted in 2008 – Public Act 295 – included a modest renewable portfolio standard that was designed to increase the use of renewable energy in Michigan by requiring electrical utilities to source 10% of their electrical production from renewable energy systems such as wind or solar.
• In 2010 Michigan revised its construction code to adopt ASHRAE Standard 90.1-2007, which sets forth more energy efficiency requirements than the prior ASHRAE Standard that Michigan relied upon for years.

Recent Developments
Since 2010, the push for sustainability based legislation appears to have tapered off – in fact, it seems to have been put in reverse. For example, two bills introduced in 2011 that initially received a lot of press, have fallen off the radar screen: House Bills (HB) 4286 and 4049.

HB 4286 would have provided a taxpayer with a tax credit equal to 50% of the cost of constructing a “green building”. Similarly, HB 4049 proposed a tax credit for builders of energy efficient homes. However, neither bill made it out of the Committee on Tax Policy.

Moreover, HB 5447, proposed by State House Representative Franz in February, 2012, would repeal Michigan’s 10% renewable energy standard. The bill, however, is opposed by a wide variety of groups so its fate is unclear.

Are these actions (or inactions as the case may be) due to economic factors (we just went through one of the biggest recessions/depressions since 1929)? A shift in concern? Or is it something deeper – such as a growing public distrust along the lines of Arizona SB 1507 which would ban any state sustainability initiatives whatsoever? (An interesting video of the AZ Senate Judiciary Committee hearing on this bill can be viewed here.)

If there is a shift away from sustainability initiatives, it’s most likely due to a variety of factors. Nonetheless, at least one study, performed in Canada, shows that our neighbors to the north are becoming less concerned with environmental issues. If the same thing is occurring in the U.S. and Michigan, it could explain the recent legislative activity that appears to be shifting away from publically funded sustainability measures. Given the impact such a trend could have on “green” and “sustainable” businesses in Michigan, we will continue to monitor it and provide updates.

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Revising the Green Guides has taken many years. FTC employed a national effort to obtain public input and collect industry comments regarding the proposed revisions.

In conjunction with FTC’s Green Guides, the FTC has taken on the issue of defining carbon offsets, the use of green certification and seals, defining of renewable energy and renewable material claims.

FTC Chairman Jon Leibowitz has stated that “the introduction of environmentally friendly products in the marketplace is a win for consumers who want to purchase greener products and producers who want to sell them. But this win-win can only occur if marketers’ claims are truthful and substantiated. The FTC’s changes to the Green Guides will level the playing field for honest business people, and it is one reason why we had such broad support”.

It is interesting to note that these revised Green Guides fail to take on some of the more thorny issues. The FTC failed to provide guidance on the use of the terms “sustainable”, “natural”, and “organic”. The FTC has suggested that the term organic has already been sufficiently defined by the U.S. Department of Agriculture.

A review of FTC’s enforcement history indicates that they have brought claims for deceptive use of the terms; recyclability, and biodegradable. FTC has raised questions regarding the environmental certification program. Given the introduction of these new Green Guides, it is a clear indication that the FTC will increase enforcement activity in this area.

I have written on this topic before and the potential legal pitfalls for companies making environmental representations regarding their products. Careful consideration is necessary when using what I refer to as “eco-logos” as proof of the “greenness” of your company’s products. Given the significance of these issues several blog entries will be posted in the future on various key provisions of the revised Green Guides.

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