A Building-Emissions Overhaul: How NYC’s LL97 Impacts Owners and Prospective Buyers Moving Forward

Posted in Energy, New York, Real estate, State & Local

New York City recently enacted the most ambitious large-scale greenhouse gas emissions reduction plan in the country, requiring a 40 percent drop in GHG emissions by 2030 and an 80 percent drop by 2050. The package of bills, entitled the Climate Mobilization Act (or CMA), includes an overhaul of building emissions requirements affecting around 50,000 existing commercial and residential buildings called Local Law 97 (or LL97). The new law targets the disproportionately high share of GHG emissions – around 70 percent – originating from buildings in the city. LL97 should encourage building owners to assess current energy usage in anticipation of enforcement, and prospective buyers of buildings covered by this new law should make sure they include as part of any diligence an audit of a building’s energy performance and future mitigations required under the new law.

LL97 regulates GHG emissions (not limited to carbon dioxide) from “covered buildings,” generally defined as buildings over 25,000 gross square feet. Covered buildings must meet and report GHG benchmarks based on Building Code occupancy groups set in five-year increments. Buildings with one or more rent-controlled or rent-stabilized units, low income housing, and real property owned by religious corporations that would otherwise be covered buildings are subject to alternate, prescriptive requirements. LL97 also creates more stringent emissions reductions for “city government operations” (defined as “operations, facilities, and other assets that are owned or leased by the city for which the city pays all or part of the annual energy bills”) – 40 percent by 2025 and 50 percent by 2030.

The enforcement period for LL97 is set to begin in 2024. Limits from 2024 to 2029 will require approximately 20 percent of existing covered buildings to reduce emissions, whereas the limits from 2030 to 2034 will require approximately 75 percent of existing covered buildings to reduce emissions. Requirements from 2035 through 2050 will be determined by the Department of Buildings in keeping with the stated goal of 80 percent citywide reduction of GHG emissions by 2050. The key point is that substantial costs related to emissions reductions are going to be required in a relatively short window.

To monitor compliance and effectuate further rulemaking, LL97 creates the Office of Building Energy and Emissions Performance (the Office) to be run out of the Department of Buildings. Covered buildings must file a report with the Office annually beginning May 1, 2025. The Office will issue penalties to covered buildings that exceed emissions limits in any year of “an amount equal to the difference between the building emissions limit for such year and the reported building emissions for such year, multiplied by $268.”

LL97 provides several alternative methods for meeting GHG reduction requirements. Owners of covered buildings may purchase renewable energy credits representing energy deliverable to the city, and generated in the same year as the purchase of the credit, to offset excessive GHG emissions in any one year. Additionally, a deduction of up to 10 percent of a covered building’s yearly emissions limit is authorized through the purchase of a carbon offset. The new law also authorizes a study of the effectiveness of a carbon trading program in the city, for which an initial report is due Jan. 1, 2021.

Though only the biggest GHG emitters will be required to reduce emissions by the first enforcement period in 2024, all covered building owners are advised to begin exploring methods by which they can (i) begin regularly reporting emissions to the Office by May 1, 2025, (ii) make operational changes to building functions in furtherance of more energy efficient practices, and (iii) engage energy consultants and retrofitting experts to determine the most effective approach to adopting greener energy solutions (including alternative compliance pathways) by 2030, when a majority of covered buildings will be affected by LL97. Should major capital improvements be required, the CMA authorizes Property Assessed Clean Energy (PACE) funding that will offer low upfront costs, low interest rates, long terms, and payments tied to a covered building’s property tax bill, not to any single owner.

LL97 is a sea change with regard to building energy use and emissions in New York City that will invariably impact property acquisitions. Prospective buyers must familiarize themselves with these requirements and should incorporate a thorough review of a covered building’s anticipated compliance strategy with LL97 as part of the diligence process, ideally engaging a consultant for an energy audit. Buyers should determine the estimated cost to comply with LL97, as well as identify potential alternative compliance where such alternatives promise a more reasonable cost.

For more on laws and regulations related to greenhouse gas emissions, click here.

Scorched: Extreme Heat and Real Estate

Posted in Articles, Climate Change, Real estate

Each year, businesses in every sector are impacted by a variety of extreme weather events including hurricanes, forest fires, blizzards, and heatwaves. Earlier this year, Jillian Kirn was interviewed by the Urban Land Institute for their publication, Scorched: Extreme Heat and Real Estate. The report examines ways in which land use, real estate, and design sectors can mitigate the impacts of urban heat islands. You can read her input on regulatory trends, as well as insights from more than fifty developers, designers, land use policymakers, and climate scientists, by clicking here.

Court Revisits PEDF on Remand: Limits on Environmental Rights Amendment

Posted in Articles, Environmental Rights Amendment, Pennsylvania

On July 29, the Pennsylvania Commonwealth Court returned to Pennsylvania Environmental Defense Foundation v. Commonwealth, a leading case on the Environmental Rights Amendment to the Pennsylvania Constitution. The court appears to have decided that the commonwealth is free to allow use of Pennsylvania’s pubic natural resources and to apply the income however it chooses. Only proceeds from the sale of public natural resources must be returned to the public trust corpus.

The commonwealth had received bonus payments upon entry into the primary term of leases, rents, fees and royalties. Of those, the Commonwealth Court had to determine which were payments for the sale of a trust asset, and which were not. The July 29 decision from the Commonwealth Court addresses that question.

Read more from my article in this week’s edition of Pa. Law Weekly in The Legal Intelligencer, 42 Pa. L. Weekly 33 (August 13, 2019), by clicking here.

 

California Adopts Emergency Regulation to Protect Outdoor Workers From Wildfire Smoke

Posted in California, GT Alert, OSHA

We Didn’t Start the Fire . . . . But Your Employees Might Breathe the Smoke

Last year was the most destructive fire season in California’s history. Over 7,600 wildfires burned nearly two million acres. As a result, on July 18, the California Department of Industrial Relations (DIR) Occupational Safety Health Standards Board adopted an emergency regulation to protect workers from hazards associated with wildfire smoke. The regulation is now in effect, following its approval on July 29, 2019, by the Office of Administrative Law.

The emergency regulation will be effective for one year, and applies where the current Air Quality Index (AQI) for airborne particulate matter (PM) 2.5 is 151 or greater (the AQI scale is from 0 to 500, and a 151 AQI is considered “unhealthy”), or where employers should reasonably anticipate that employees could be exposed to wildfire smoke.

To read the full GT Alert, click here.

For more on OSHA, click here.

Mexico’s 2019-2024 National Development Plan

Posted in GT Alert, Infrastructure, Mexico

On July 12, 2019, the 2019-2024 National Development Plan (Plan Nacional de Desarrollo, “PND”) was published in the Federal Official Gazette (Diario Oficial de la Federación, “DOF”). The PND’s purpose is to specify the national objectives, strategy, and priorities for Mexico’s comprehensive, equitable, inclusive, and sustainable development.

The principal regional projects that will be implemented during this six-year period are described below:

The Mayan Train. This infrastructure project will have a route spanning 1,525 km and will be built through the states of Chiapas, Tabasco, Campeche, Yucatan and Quintana Roo. It will connect the main cities and tourism sites of the Yucatan Peninsula, have 15 stations, and require an investment MX$120-150 billion from public, private, and social sources.
Felipe Angeles Airport in Santa Lucia. This project will add to the airport infrastructure of the country’s central region, and a third terminal to Mexico City’s Benito Juárez International Airport will be built. The environmental impact authorization procedure of the project was favorably resolved by the Ministry of the Environment and Natural Resources (Secretaría de Medio Ambiente y Recursos Naturales) on July 17, 2019. However, it is important to mention that several Amparos have been filed, for which (in some cases) federal judges have ordered the definitive suspension of the works, since the project still does not have all of the environmental authorizations required in addition to the environmental impact authorization.
Program for the Development of the Tehuantepec Isthmus. This project aims to modernize the Tehuantepec Isthmus railway, and the ports of Coatzacoalcos in Veracruz, and Salina Cruz in Oaxaca; and to offer cargo, transport, storage, and packaging services, promoting the growth of the regional economy while respecting the history, culture, and traditions of the Isthmus of Oaxaca and Veracruz.
Several programs focused on achieving food self-sufficiency and rescuing Mexico’s agricultural activity, i.e., farming.

To read to full GT Alert on Mexico’s 2019-2024 National Development Plan, click here.

EPA Expands RCRA Hazardous Waste Restrictions to a Broader Range of ‘Pharmaceuticals’ Including Dietary Supplements

Posted in Environment, EPA, GT Alert, Hazardous Waste, RCRA, Waste

If you are currently disposing of pharmaceuticals, including dietary supplements, into the dumpster or down the drain, you may want to reconsider that practice. New regulations promulgated by the Environmental Protection Agency (EPA) under the Resource Conservation and Recovery Act (RCRA) impact how health care facilities must dispose of unused pharmaceuticals. The new regulations treat some dietary supplements as pharmaceuticals and therefore regulate them as hazardous waste. Additionally, as of Aug. 21, 2019, health care facilities may be prohibited from disposing of pharmaceuticals and dietary supplements into the sewer, etc. This is in addition to RCRA already prohibiting disposal into the garbage or in some instances by recycling. Noncompliance comes with hefty fines.

  • Does your company qualify as a health care facility?
  • Do your products qualify as pharmaceuticals?
  • Is your product a hazardous waste pharmaceutical?
  • Penalties and implementation

Click here for the full GT Alert.

What Environmental Lawyers Should Know About the Limits of ‘Auer’ Deference

Posted in Litigation, Pennsylvania, Regulatory

The U.S. Supreme Court recently had the opportunity to overturn Auer deference, Kisor v. Wilkie, No. 18-15, (U.S. June 26, 2019). A 5-4 majority declined to do so, but not without emphasizing the limits of the doctrine. Auer deference refers to the doctrine that a court should generally defer to an agency’s interpretation of agency regulations when the regulations are determined to be ambiguous, see Auer v. Robbins, 519 U. S. 452 (1997). The doctrine also may be referred to as Seminole Rock deference, see Bowles v. Seminole Rock & Sand, 325 U.S. 410 (1945). This doctrine has been called into question because it essentially allows the regulatory body charged with writing the regulation the final say as to what the regulation means. Environmental lawyers, and anyone else involved in regulatory disputes, will likely want to keep the stated limits—whether new or old—front and center moving forward.

I discuss this decision, and its impact to environmental decision-making, in this month’s Legal Intelligencer/Pennsylvania Law Weekly column. Read What Environmental Lawyers Should Know About the Limits of ‘Auer’ Deference, 42 Pa. L. Weekly 29 (July 12, 2019), by clicking here.

PFAS Solution Moving Through Congress on Must-Pass Defense Bill

Posted in CERCLA, Emerging Contaminants, Environment, Federal Regulation, GT Alert, PFAS, Policy, Regulatory, Safe Drinking Water Act, Substance, TSCA, Water

PFAS (perfluoroalkyl and polyfluoroalkyl substances) have been under scrutiny on both sides of the Capitol in recent months, and the Senate made significant headway in late June in reaching consensus on PFAS legislation. Following two hearings in the Senate Environment and Public Works (EPW) Committee this spring, a package was unveiled and quickly considered in Committee on June 19. Championed by EPW Chairman John Barrasso (R-WY), Ranking Member Tom Carper (D-DE), and Senator Shelley Moore Capito (R-WV), S. 1507, the PFAS Release Disclosure Act, was considered in Committee and simultaneously filed as an amendment to S. 1790, the must-pass National Defense Authorization Act (NDAA) that was headed to the Senate floor the following week.

To read the full GT Alert, click here.

˘ Not admitted to the practice of law.

Avoiding the Talismanic Effect of Unfounded Expert Testimony

Posted in Articles, Litigation, Toxic Tort

Daubert decisions can be case-dispositive in complex cases. Accordingly, understanding how to discern and dismantle the foundations of expert testimony is a crucial skill for defense attorneys.  Using lessons learned from a recent Eleventh Circuit toxic-tort case, Williams v. Mosaic Fertilizer LLC, Greenberg Traurig attorneys David B. Weinstein, Christopher Torres, and Ryan T. Hopper share strategies for exposing unreliable expert opinions and turning them to defendants’ advantage.

Read their article, Avoiding the Talismanic Effect of Unfounded Expert Testimony, in the June 2019 issue of For the Defense by clicking here.

 

Weathering the Storm: Mitigation of Environmental Risks Caused by Extreme Weather

Posted in Articles, Climate Change, Emergency Preparedness, Pennsylvania

Imagine that you are environmental, health, and safety (“EHS”) counsel or general counsel for a company dealing with a natural disaster. The company’s facilities are only partially functional, employees have lost their homes, and business unit functionality has been severely disrupted. You find yourself managing the myriad demands of the federal, state, and local environmental agencies, the company’s employees, and the public. Amidst all this, the media reports that a criminal investigation is forthcoming due to the company’s alleged failure to adequately prepare for the event. What could you have done to better prepare for disaster?

I discuss these issues in this month’s Legal Intelligencer/Pennsylvania Law Weekly column. Read Weathering the Storm: Mitigation of Environmental Risks Caused by Extreme Weather, 42 Pa. L. Weekly 25 (June 18, 2019), by clicking here.

 

 

LexBlog