August 5, 2010
As a result of tax law provisions enacted as part of the latest New York State budget, participants in the New York State Brownfield Program who are eligible for tax credits will be required to defer credits over $2M. The Budget adopted late Tuesday (August 3, 2010) added sections 33 and 34 to the New York Tax Law, which provide for a deferral of numerous New York State tax credits, including those provided by the Brownfield Cleanup Program (“BCP”). Section 33 provides that cumulative tax credits in excess of $2 million dollars, taking into account all affected credits, will be subject to the deferral. The deferral will apply to credits that could otherwise have been claimed in tax years 2010, 2011, and 2012. While Section 34 provides that credits can be claimed beginning in tax year 2013, such payments will be without interest. Deferred refundable tax credits such as the BCP credits may be applied by claiming 50 percent of the deferred balance in tax year 2013, 75 percent of the remaining deferred refundable credit balance in tax year 2014, and the balance of the refundable credit balance in tax year 2015. The deferral affects all three categories of BCP tax credits: redevelopment, remediated brownfield real property, and environmental insurance.
Taxpayers who are subject to the deferral for multiple categories of tax credits—not just BCP credits—must allocate the $2 million not subject to deferral pro rata based on the relationship that each category of tax credit bears to the total credits that the taxpayer would otherwise have been entitled to claim.
The legislature did not act on any of the other pending proposals that had been advanced, including proposals to cap credits retroactively, restrict the eligibility to obtain qualified tangible property credits, and impose a 50% tax deferral on BCP and other tax credits.
August 2, 2010
In a July 21 email to wildlife stakeholders, the New York State Department of Environmental Conservation (“DEC”) announced that draft revisions to the State Endangered Species Act (“ESA”) Regulations, 6 N.Y.C.R.R. Part 182, pursuant to Article 11 of the Environmental Conservation Law (“ECL”), were ready for public review and comment and would be published in the State Register, Environmental Notice Bulletin, and on DEC’s website on August 4.
If promulgated as proposed, the State ESA regulations will be significantly changed. Several sections have been added, including how DEC will list endangered and threatened species and species of special concern; requirements for recovery and restoration plans; requests for determination whether a specific action is subject to Part 182; and penalties and enforcement for violations. The most significant changes are the new sections regarding “incidental take permits.” The draft regulations define “incidental take” as “any taking of a species listed as endangered or threatened in Part 182.5 and otherwise prohibited by section 11-0535 of the [ECL] that is incidental to, and not the intended purpose of, an otherwise lawful activity.” Proposed 6 N.Y.C.R.R. § 182.2(k). “Take” or “taking” would be defined as “pursuing, shooting, hunting, killing, capturing, trapping, snaring and netting of any species listed as endangered or threatened in this Part, and all lesser acts such as disturbing, harrying or worrying.” Id. § 182.2(y). This proposed definition is similar to the definition of “take” under the federal ESA, where it is defined as “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.” 16 U.S.C. § 1532(19).
The proposed regulations state that “any activity that is likely to result in the take or a taking of any species listed as endangered or threatened in this Part as determined by the [DEC] . . .” must be done pursuant to an incidental take permit. Proposed 6 N.Y.C.R..R § 182.11. The permit application will have to include a mitigation plan and implementation agreement, an analysis of whether being issued the permit would jeopardize the continued existence of the species’ population, a description of ways to modify the project to minimize or completely avoid a take of the species, and a certification statement, in addition to describing the proposed project and its potential impacts to the listed species.
Significantly, the applicant will have to demonstrate that measures taken pursuant to the mitigation plan will result in “a net conservation benefit to the listed species,” which is defined as:
[A] successful enhancement of the species’ overall population or contribution to the recovery of the species within New York. To be classified as a net conservation benefit, the enhancement or contribution must benefit the affected species listed as endangered or threatened in this Part or its habitat to a greater degree than if the applicant’s proposed activity were not undertaken.
Id. § 182.2(o). Based on recently issued State ESA Permits, a net conservation benefit most likely may be demonstrated by measures to set aside critical habitat or create new habitat for the listed species, depending on the species affected. Applicants also must include a monitoring plan and a description and guarantee of how the plan will be funded. For example, the applicant may post a performance bond that will cover habitat monitoring costs.
An applicant’s permit application will also have to identify involved persons, the timeline for implementing the plan (which will become the permit term), specify the source of funding, and be signed by all involved persons. DEC will issue an incidental take permit if it determines that any taking will be incidental to, and not the purpose of, the proposed activity, and there will be a net conservation benefit to the species. The Department will base its decision “upon the best scientific and other information that is reasonably available to [DEC].” Id. § 182.12.
These new regulations, as evidenced by the recently issued ESA permits, will add a regulatory hurdle to projects proposed in areas where there may be a take of a listed endangered or threatened species. Developers previously addressed a project’s potential impacts to such species during the State Environmental Quality Review Act (“SEQRA”) process. Now, they will have to go through two processes – a SEQRA review process and a separate ESA permitting process. This independent permitting jurisdiction means that DEC now will be a SEQRA “involved agency.” This means DEC will have formal commenting authority, and may even claim “lead agency” status in certain matters, potentially displacing local town or village boards, and driving the entire SEQRA review process. Regardless, unless the project’s mitigation measures result in a net conservation benefit to the listed species, as opposed to just minimizing any potential adverse impacts under SEQRA, DEC will not have legal authority to issue a State ESA Permit.
As we stated previously, when planning a project, developers should try to ensure that any potential impacts to listed species are considered and avoided in a manner consistent with DEC’s regulations.
Update (August 4, 2010):
Today, DEC published its proposed ESA regulations. DEC will accept comments from August 4 – September 20, 2010. Comments may be submitted via email to: Proposed Rulemaking Part 182 – Endangered and Threatened Species of Fish and Wildlife; Species of Special Concern or by mail to:
Dan Rosenblatt
New York State Department of Environmental Conservation
628 Broadway
Albany, New York 12233-4750
For additional information on submitting comments:
July 28, 2010
On June 28, 2010, a coalition of environmental groups[1] (“Petitioners”) filed an Article 78 Petition (“Petition”) in court challenging the New York State Department of Environmental Conservation’s (“NYSDEC”) April 2010 issuance of a State Pollution Discharge Elimination System (“SPDES”) General Permit that sets forth requirements applicable to municipal separate storm sewer systems (“MS4s”).[2] The General Permit authorizes discharges of stormwater from “small MS4s,” those municipal storm water systems serving communities with a population between 10,000 to 100,000 people.[3] New York regulates MS4s via its SPDES program, which implements the Clean Water Act (“CWA”) pursuant to delegated authority.[4]
In New York a permit is required for stormwater discharges (i.e., runoff over land or impervious surfaces into water bodies) from MS4s and the permit must include “controls to reduce the discharge of pollutants to the maximum extent practicable.” 33 U.S.C. § 1342(p)(3)(B). For small MS4s, one such control is the development and implementation of a Storm Water Management Plan (“SWMP”).
Petitioners challenged the 2010 MS4 General Permit, alleging it fails to achieve state water quality standards because it would allow stormwater pollution to continue at existing levels instead of reducing pollution. Petitioners alleged four causes of action:
- NYSDEC’s issuance of the General Permit was unlawful because it does not require MS4s to reduce their discharges of pollutants to the “maximum extent practicable.” Petitioners alleged that NYSDEC’s reliance on the State Stormwater Management Design Manual’s technical standards for post-construction stormwater is unlawful because that manual is outdated, and does not sufficiently reduce pollutant discharges to the “maximum extent practicable.” Additionally, Petitioners alleged that the General Permit authorization of an optional “banking and credit system” – allowing off-site stormwater pollution reductions to satisfy on-site requirements – would “violate the CWA’s mandate that post-construction stormwater discharges from new development and redevelopment be reduced to the maximum extent practicable” because the banking and credit system is not limited to instances where on-site compliance is impracticable. (Petition, ¶¶ 65-69.)
- NYSDEC issuance of the General Permit was unlawful because it does not ensure compliance with State total maximum daily loads (“TMDL”) (a kind of pollution loading allocation) for water bodies where MS4 discharges contribute to violations of the water body’s water quality standards. Petitioners alleged that the General Permit does not include limitations necessary to meet water quality standards, does not implement a TMDL wasteload allocation, and does not include a compliance schedule ensuring that permittees will achieve compliance with water quality standards “within the shortest reasonable time” if permittees cannot immediately comply with water quality standards. Additionally, Petitioners alleged that the General Permit does not ensure that sufficient measures will be taken to meet pollution reduction targets set for bodies of water that the State has prioritized for cleanup (e.g., Long Island Sound). (Petition, ¶¶ 71-78.)
- NYSDEC issuance of the General Permit was unlawful because it does not “include requirements to take samples and measurements representative of the quantity and character of the monitored discharge” as required by State and federal law. (Petition, ¶¶ 80-81.)
- Because the General Permit authorizes MS4s to develop their own effluent limitations (including SWMPs and a banking and credit system), which “are not subject to substantive DEC review and approval, public comment to DEC, and/or the opportunity for a hearing before a hearing [sic] before DEC,” Petitioners allege the permit creates a scheme of self regulation prohibited by the Clean Water Act. (Petition, ¶¶ 83-90.)
As a practical matter this challenge to the MS4 General Permit could have State-wide impacts, as the MS4 General Permit applies to MS4 municipalities across New York State—not just those on Long Island Sound. If successful, this litigation could ultimately result in significant new pollution control mandates for already financially strapped municipalities. Enhanced requirements for pollution reduction in TMDL watersheds could mean reduced development opportunities in those MS4 communities, some of which are already struggling with a shrinking tax base.
[1] Natural Resources Defense Council, Riverkeeper, Waterkeeper Alliance, Soundkeeper, Save the Sound, Peconic Baykeeper, Hudson-Raritan Baykeeper, and Hackensack Riverkeeper.
[2] GP-0-10-002, effective May 1, 2010. An MS4 is a conveyance or system of conveyances owned or operated by a State, municipality, association, public body (including special districts under State law), Indian tribe or authorized Indian tribal organization, or designated and approved management agency that discharges into waters of the United States; which is “designed or used for collecting or conveying storm water;” and is not a combined sewer or part of a Publicly Owned Treatment Works. 40 C.F.R. § 122.26(b)(8).
[3] NYSDEC classifies all MS4s as small MS4s except for those in New York City. (Petition, ¶ 46.)
[4] The CWA prohibits the discharge of pollutants to surface waters unless the discharge is pursuant to a National Pollutant Discharge Elimination System (“NPDES”) permit. 33 U.S.C. § 1342. In New York, NYSDEC has assumed MS4 permitting authority through the State Pollutant Discharge Elimination System (“SPDES”) General Permit program. See ECL §§ 17-0801 et seq.
June 29, 2010
The New York State Department of Environmental Conservation (“NYSDEC”) announced on June 9 that the comment period for a new cooling water intake technology standard under the Clean Water Act (“CWA”) § 316(b) will be extended through July 9. The draft policy for “best technology available” (“BTA”) for cooling water intake structures is aimed at reducing fish mortality by employing a closed-cycle cooling process. The process purportedly reduces fish mortality and protects fish roe and larvae by significantly reducing the amount of water withdrawn from New York water bodies, but may result in other significant impacts such as air, noise and visual impacts.
The majority of facilities in New York State that use cooling water intakes employ a once-through process whereby water is withdrawn from a waterway, converted to steam used to spin turbines and then later discharged back into the waterway at high temperatures. The draft BTA standards requiring a closed-cycle process have already been used by NYSDEC to support a permit denial for the Indian Point Nuclear Power Plant.[1] Indian Point requested a hearing on matters of law regarding the permit denial and Administrative Law Judge Villa will be presiding over the hearing July 20 with an issues conference schedule for July 21.
All facilities designed to withdraw 20 million or more gallons of water per day and require State Pollution Discharge Elimination System (“SPDES”) permits would be subject to the proposed new BTA standard, with certain exceptions. If an operator can demonstrate that closed-cycle cooling technology can not be physically implemented at a particular location, NYSDEC will require other measures to achieve equivalent reductions in entrainment and impingement. Such measures could include physical barriers, fish return systems, deterrent systems, and possible flow reductions and outages.[2] NYSDEC indicated in the Indian Point decision that cylindrical wedgewire screens would not be sufficient alone to meet this requirement, but wedgewire technology in addition to other modifications could achieve a 90% reduction in entrainment and impingement in lieu of adopting closed-cycle technology.
In determining what technology is feasible for reducing environmental impacts, the Supreme Court held that costs may be considered at the discretion of EPA or EPA’s designee, overturning a Second Circuit decision barring cost-benefit analysis under CWA §316(b).[3] Referencing that Supreme Court decision in its draft policy, NYSDEC defines feasible technology as “not wholly disproportionate to environmental benefits.”[4] The test places the burden on permit applicants who must show that relative costs are unreasonable. In addition, the draft policy states that the only environmental benefits to weigh in a cost-benefit analysis for BTA are reductions in entrainment and impingement.[5]
Comments on the draft policy should be submitted before 5 p.m. on July 9 and sent via mail to: BTA Policy Comments, NYS DEC – Division of Fish, Wildlife and Marine Resources, Bureau of Habitat, 625 Broadway 5th Floor, Albany, NY 12233-4756; or via email through the NYSDEC website.
Maggie Macdonald is a summer associate at Sive, Paget & Riesel, P.C.
[1] In NYSDEC’s notice of denial for the Indian Point Plant, the draft policy is mentioned as requiring closed cycle cooling or its equivalent (90% reduction in entrainment). (Notice of Denial at 19, fn.1.)
[2] Draft Policy, Appendix A at 11.
[3] Entergy Corp. v. Riverkeeper, 129 S.Ct. 1498 (2009).
[4] Id.
[5] Draft Policy, Appendix A at 15.
June 28, 2010
On Thursday, June 24, 2010, New York’s highest court approved the Empire State Development Corporation‘s (“ESDC”) use of eminent domain to acquire land in West Harlem that will be used to support Columbia University’s campus expansion. Kaur v. New York State Urban Dev. Corp., No. 125, __ N.Y.3d ___ (2010), consolidated with Tuck-It-Away v. New York State Urban Dev. Corp., No. 125, __ N.Y.3d ___ (2010) (collectively, “Kaur“). In a unanimous decision authored by Judge Cipatrick, the Court of Appeals reversed a ruling of the Appellate Division, First Department that ESDC could not condemn property for Columbia’s expansion project. Relying on its recent decision in Goldstein v. New York State Urban Dev. Corp., 13 N.Y.3d 511 (2009) (“Goldstein“), in which the Court upheld ESDC’s use of eminent domain to acquire land for the Atlantic Yards project in Brooklyn, in the Kaur case the Court of Appeals deferred to ESDC and criticized the Appellate Division for undertaking an improper de novo review of the record.
In December 2008, ESDC determined to use its condemnation power to acquire 17 acres of privately-owned property, including petitioners’, in connection with Columbia’s expansion plan. ESDC found that the project qualified under the Urban Development Corporation Act as both a “land use improvement project” (because the project would eliminate blighted conditions) and as a “civic project” (because the project would provide educational facilities). The $6.28 billion project, which is being exclusively underwritten by Columbia, a private non-profit institution, will comprise 6.6 million gross square feet in 16 new buildings, 2 acres of open space, and other structures. Petitioners contested ESDC’s designation of the project area as “blighted,” and challenged the integrity of the two neighborhood studies commissioned by ESDC that supported its blight finding, arguing that the studies were biased and demonstrated bad faith on the agency’s part. Petitioners also argued that the “civic project” designation was impermissible because Columbia is a private, not a public, entity.
In Thursday’s Kaur decision, the Court of Appeals reaffirmed that the judiciary has a limited role in reviewing the actions of ESDC, a quasi-legislative entity. Citing Goldstein, the Court noted that ESDC was authorized by the state legislature, and that a court “may only substitute its own judgment for that of the legislative body authorizing the project when such judgment is irrational or baseless.” The Court rejected petitioners’ arguments that ESDC acted in bad faith and with pretext, finding no evidence to support such allegations. The Court instead held that ESDC’s determination was made rationally and in good faith, and that the separate neighborhood conditions studies on which ESDC relied were creditable and not biased. The Court then cited blight evidence dating back to the 1960s to reject petitioners’ argument that Columbia created blight by neglecting the project-area properties that it acquired starting in the early 2000s. The Court also held that the UDC Act’s definition of a “substandard or insanitary” (i.e., blighted) area was not unconstitutionally vague.
The Court of Appeals made new law in New York by holding that “civic projects” under the UDC Act are not limited to public institutions, and may in fact include projects proposed by private educational institutions. After noting that the Columbia project “unquestionably [] promote[s] education and academic research while providing public benefits to the local community,” the Court rejected the First Department’s determination that the statutory language is limited to public entities. In a concurring opinion, Judge Smith stated that because the Court upheld ESDC’s blight determination, the civic project doctrine need not have been reached, and that it was subject to constitutional constraints that the Court failed to address.
Finally, the Court rejected petitioners’ claims that ESDC violated their procedural due process rights by closing the administrative record and proceeding with the condemnation despite ongoing disputes as to whether ESDC was required to turn over additional documents to petitioners. The Court stated that a violation of the Freedom of Information Law (“FOIL”) only rises to a due process violation where petitioners can demonstrate that they were deprived of a meaningful opportunity to be heard, or demonstrating that materiality of the records sought through FOIL. The Court found that ESDC did not withhold documents that formed part of the administrative record, and that petitioners had unfettered access to thousands of pages of documents, including those at the core of ESDC’s action. Noting that the legislature intended for expedient condemnation proceedings that did not allow for any discovery, the Court held that petitioners failed to meet their burden.
According to the New York Times, petitioners plan to seek review of the decision by the United States Supreme Court.
SPR serves as environmental counsel for the Empire State Development Corporation, and Mark Chertok and Dan Chorost served as co-counsel to ESDC’s eminent domain counsel in the Kaur case. David Paget and Dan Chorost served as co-counsel for ESDC in the Goldstein case. A copy of ESDC’s appellate brief is available here (pdf), and reply brief here (pdf).
June 23, 2010
The New York State Department of Environmental Conservation (DEC) has released a draft memorandum of agreement (MOA) between DEC and the New York City Mayor’s Office of Environmental Remediation (OER), as well as an accompanying addendum, which together provide for the two agencies’ coordinated oversight of brownfield cleanups in the five boroughs.
The MOA would assign to OER the lead role in supervision and remedy selection for certain contaminated or possibly contaminated properties within the city limits.[1] These cleanups would be conducted through the NYC Local Brownfield Cleanup Program,[2] on behalf of DEC and in accordance with DEC’s brownfield cleanup standards.[3] The MOA’s alignment of City and State cleanup programs represents a success for Mayor Bloomberg, who has sought such coordination as part of PlaNYC since the plan’s unveiling in 2007.[4]
A key element of the agreement is a declaration that DEC “does not plan or anticipate” initiating enforcement actions under state or federal Superfund statutes for sites that are remediated through the City cleanup program and pursuant to the MOA.[5]
The MOA also provides that OER may supply technical assistance to DEC for petroleum spills at sites participating in the City cleanup program, that OER must comply with certain community participation requirements, and that OER must report designated information about sites to DEC over the course of city-supervised cleanups.
DEC is accepting public comment on the proposed MOA and its addendum until Friday, July 9. DEC and OER provide additional information on the MOA and their respective brownfield cleanup programs on their websites.
Dan Mach is a summer associate at Sive, Paget & Riesel, P.C.
[1] Draft MOA, Section III.a.
[2] The Local Brownfield Cleanup Program was created by the New York City Brownfield and Community Revitalization Act, authorized by the City Council and signed by the Mayor on May 11, 2009.
[3] DEC has statutory authority to delegate its functions to local governmental entities. N.Y. Envtl. Conserv. Law § 3-0301(2)(p). Cleanup standards would be defined under the state brownfields cleanup program regulations, codified at 6 NYCRR §§ 375-1, 375-3.
[4] PlaNYC Report 46-47 (Apr. 22, 2007).
[5] Draft MOA, Section IV.a.
June 4, 2010
The New York State Electronic Equipment Recycling and Reuse Act was signed into law by Governor Paterson on May 28, 2010. Beginning April, 2, 2011, the Act requires manufacturers to accept electronic waste for collection, handling, and recycling or reuse. Covered electronic equipment includes computers (as well as accessories such as monitors, keyboard and printers), televisions, and “small electronic equipment,” which includes portable digital music players, video recorders and video game consoles. The Act sets state-wide collection standards that slowly increase over the first three years. In addition, the Act sets manufacturer-specific acceptance standards based on their market share. The Act requires “convenient collection” from consumers, but does not include the “direct collection” requirement that was the focus of industry’s litigation concerning similar electronic waste legislation passed by the City of New York in 2008.
The Firm represented the Natural Resources Defense Council in connection with an amicus brief filed by NRDC in the litigation challenging the City law. NRDC has been a staunch supporter of producer responsibility principles. The State Act preempts the challenged City law, effectively mooting that litigation. A copy of the Act is available here.
Older Posts »
|
| |
