January 24, 2014
Governor Cuomo has proposed substantial revisions to New York’s Brownfields Cleanup Program (“BCP”) as part of the proposed state executive budget released earlier this week. The proposed budget, prepared for the 2014-2015 state fiscal year, would alter many aspects of the program, including site eligibility criteria and availability of tax credits. Note that budget proposals are subject to change based on negotiations between the governor and both houses of the state legislature and one can expect revisions and clarifications throughout that process. The drafting of various sections of the current bill is somewhat ambiguous, particularly with respect to the retroactivity of certain provisions, and future revisions may clarify these provisions.
If passed by the state legislature as proposed, the new BCP would take effect on July 1, 2014, and its new provisions would govern sites for which the applicant receives notice that its request for participation in the program is accepted on or after the effective date. The principal change is to separate the eligibility criteria for admission to the BCP from the eligibility to receive tangible property component tax credits. Thus, under the new Program a site may qualify for the BCP, but not be eligible for tangible property component tax credits. Sites admitted into the program after December 31, 2022, however, would not be eligible for either site preparation or tangible property component tax credits.
The proposed new BCP would impose a limitation on the ability of a COC recipient to claim tangible property component tax credits to only five years, commencing with either the year in which the COC was issued or the year in which redevelopment of the site is commenced (provided that, with respect to the latter, such redevelopment is commenced within 10 years of the issuance of the COC). The proposal clarifies the definition of Site Preparation Costs for purposes of claiming site preparation tax credits, and allows developers who expense remediation costs to use the expensed amount to calculate the maximum tangible property component tax credit for a site. It also introduces additional tax credits for the inclusion of affordable housing or for sites located in a Brownfield Opportunity Area.
A new sunset date of 2025 (i.e., the date by which a Certificate of Completion (“COC”) must be obtained in order to receive tax credits) would be established for sites accepted into the program on or after July 1, 2014. For sites that were admitted into the BCP between June 23, 2008 and July 1, 2014, the bill would require the issuance of a COC by December 31, 2017. However, sites admitted into the program before June 23, 2008 that do not yet have a COC must obtain a COC by the current sunset date of December 31, 2015. For the latter two categories of sites, if the COC is not obtained by the applicable deadline, the BCA would be terminated and the applicant(s) would need to reapply under the new program.
The bill also includes a clarification that a COC can be transferred by the original recipient, as well as subsequent holders of the COC, upon transfer of all or part of the brownfield site, provided that a COC transferred to a responsible party will not provide relief from liability.
Further updates will be posted here as the proposed budget moves through the approval process.
For more information about SPR’s brownfields practice and the implications of the proposed changes, please contact Christine Leas or Jennifer Coghlan.
January 22, 2014
Friends and Residents of Greater Gowanus (“FROGG”), a nonprofit organization, has proposed the listing of a new historic district – the Gowanus Canal Historic District – on the National and State Registers of Historic Places. According to FROGG’s proposal, the proposed historic district encompasses just over 50 blocks lying roughly along the Gowanus Canal in Brooklyn and covering 369 properties, including three bridges over the Canal, several former industrial buildings and factories dating back to the 19th century, and a wide range of residential, commercial, and mixed-use buildings.
In 2006, the New York State Office of Parks, Recreation and Historic Preservation (“OPRHP”) determined that the corridor immediately surrounding the Gowanus Canal was eligible for listing on the National and State Registers. In its recent nomination, FROGG has proposed listing an enlarged district on both sides of the canal that extends as far west as Fourth Avenue and as far east as Court Street.
Section 14.09 of the New York State Historic Preservation Act and Section 106 of the National Historic Preservation Act require consultation with OPRHP to ensure that any State- or federally-funded or approved project minimizes or avoids impacts to properties that are listed on (or eligible to be listed on) the Registers. Thus, listing of the proposed district would require projects within and around the district that require approvals or funding from any State or federal agency to be undertaken in consultation with OPRHP. Owners of income-producing properties added to the Registers may also qualify for certain tax benefits.
Owners of properties within the proposed district may object to the listing of their properties. If a property’s sole owner (or, for multiple-owner properties, a majority of the owners) objects, the property will not be listed on the National Register. Property owners’ objections does not legally prevent their properties from being listed in the State Register if the proposed historic district is accepted for listing by OPRHP; however, OPRHP has typically not listed properties over owners’ objections.
A community meeting on the proposal is scheduled for February 11, 2014 from 6:30 to 8:00 p.m., at 232 Third Street in Brooklyn. Comments on whether the proposed historic district should be nominated to the National and State Registers are due by March 12, 2014 to the State Historic Preservation Officer Dan McEneny, Division for Historic Preservation, N.Y. State Office of Parks, Recreation and Historic Preservation, Peebles Island, P.O. Box 189, Waterford, NY 12188-0189. The State Historic Preservation Review Board will consider the nomination at its next meeting on March 13, 2014.
For more information, contact David Yudelson or Michael Bogin.
January 17, 2014
Unlike in 2013, in his 2014 State of the State speech Governor Andrew Cuomo did not explicitly mention solar power. However, the 2014 State of the State Report, published in conjunction with the speech, indicates that solar power will remain a policy priority in the coming years.
The report reiterates Governor Cuomo’s goal of “[e]ncouraging New York State to become a national leader in solar energy.” New York’s primary public policy program to promote solar is the NY-SUN program, launched in 2012 and administered by the New York State Energy Research and Development Authority (NYSERDA). SPR attorney Scott Furman recently negotiated the design and installation of one of the largest NY-SUN projects in New York City – a 1.059 MW project on the roof of the Manhattan Beer Distributors facility in the Bronx. The project is slated for completion in 2014.
The report also states that in 2014, the Cuomo Administration will, under the auspices of NY-SUN, launch a new program called “Community Solar NY,” which will seek to expand access to solar power in communities that are currently underserved.
A flagship initiative for Community Solar NY will be the “K-Solar” program, which will provide financial incentives and technical assistance to K-12 school administrators interested in installing solar power systems on school property, such as rooftops. As the report notes, “[o]f the nearly 5,000 public schools in the state, many are prime candidates for solar energy but have not been able to navigate the bureaucratic channels to finance it through potential energy savings.”
In addition, the report notes that the Cuomo administration will aim to use a successful solar project at a school as a jumping-off point to “solarize” the surrounding neighborhood. For example, to incentivize schools to reach out to the communities in which they are located, “NYSERDA [could provide] a financial reward to the school for every surrounding home that installs solar as well.”
Finally, in a recent filing with the Public Service Commission, NYSERDA requested an additional $864 million for solar energy incentives extending through 2023, which would bring total NY-SUN program funding to approximately $1 billion.
For more information on solar in New York, please contact Scott Furman or Devin McDougall.
January 14, 2014
On December 11, 2013, the U.S. Environmental Protection Agency (“EPA”) proposed the addition of a site in Ridgewood, Queens to its National Priorities List (“NPL”). The NPL, more commonly known as the “Superfund List,” designates the country’s most hazardous waste sites for further investigation and long-term cleanup.
According to the EPA, the site is a former facility of the now-defunct Wolff-Alport Chemical Company located at the intersection of Irving and Cooper Avenues near the Brooklyn/Queens border. The company operated the facility from the 1920s until 1954; during this time, the company extracted rare earth elements from imported monazite sand and sold the extracted material to various commercial entities. Waste byproducts were disposed of into a nearby sewer and may also have been buried onsite. Process residues of monazite sand contain radioactive metals, such as thorium and uranium, and their decay products, such as radium. The company was reportedly a supplier of radioactive material to the Atomic Energy Commission (AEC), a forerunner to the U.S. Department of Energy, in the late 1940s and until operations ceased in 1954.
In 1988, an EPA investigation confirmed the presence of surface radiological contamination at the site. The level of contamination found was below the allowable dose limit to the public at that time. Since then, EPA has worked in conjunction with New York State and New York City in conducting radiological surveys at the site and identifying waste material and radioactivity throughout the property, beneath adjacent public sidewalks and streets and in nearby sewers “above levels expected to be found in a comparable urban area.” The agency has taken several interim steps to address the contamination already — most notable is the sealing of a hole at a nearby school from which radioactive gas was found to be leaking. The agency has already spent about $2 million on preliminary measures at the site to date.
The site area today includes a delicatessen/grocery, office space, residential apartments, auto and tire shops, two warehouses and a former rail spur which is now used for storage of steel crane equipment. The site is within 900 feet of an elementary school and is nearby to an intermediate school and daycare center.
The EPA will take public comments on the proposal until February 10th, 2014. The EPA will make final listing decisions after considering the relevant comments received during the comment period. Once the site is listed, EPA will search for parties potentially legally responsible for the contamination in an effort to hold them accountable for the costs of investigations and cleanups. The site would be the third active Superfund site in New York City, joining the Gowanus Canal and Newtown Creek.
For more information on this site or on the Superfund law, contact David Yudelson.
Priya Murthy is a law clerk with Sive, Paget & Riesel.
January 3, 2014
As anticipated, EPA finalized a rule on Monday adopting the revised ASTM E1527-13 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” as a standard by which parties may comply with the “All Appropriate Inquiries” Rule, 40 CFR Part 312. ASTM released the revised E1527-13 standard on November 6, 2013. Curiously, the newly revised EPA rule does not delete reference to the previous ASTM standard, E1527-05. In the Federal Register notice finalizing the rule, EPA indicated that it intends to propose, in the near future, an amendment to 40 CFR Part 312 removing reference to the E1527-05 standard. In its response to comments received on the new rule, EPA noted that it “…agrees with commenters that the revised ASTM E1527-13 standard includes improvements to the previous standard and its use will result in greater clarity for prospective purchases with regard to potential contamination at a property. Therefore, EPA recommends that environmental professionals and prospective purchasers use the ASTM E1527-13 standard.”
For more information on the ASTM standard, AAI, Phase I reports, or environmental due diligence, please contact Christine Leas
December 19, 2013
2013 saw a dramatic increase in the Federal Trade Commission’s (“FTC’s”) enforcement of truth-in-advertising laws for environmental marketing. Deceptive environmental marketing practices, sometimes referred to as “greenwashing,” were the target of 14 FTC enforcement actions this year, up from 5 in 2012, 3 in 2011, and 2 in 2010. This year’s actions have included some of the largest American corporations, including Amazon, Sherwin-Williams, Macy’s, Sears, Roebuck and Co., Farberware, and K-Mart.
This increase in enforcement activity follows major revisions in 2012 to the FTC’s “Green Guides,” guidance documents which provide information concerning the FTC’s standards for lawful environmental marketing claims.
The New York State Department of Environmental Conservation has incorporated part of the Green Guides into its own regulations at 6 NYCRR § 368.1. Under the regulations, advertising which uses the terms “recycled,” “recyclable,” or “reusable” must conform to the standards for environmental marketing in the Green Guides.
Notably, the Green Guides contain specific guidance on certain types of marketing claims. Companies advertising a product or service with claims of the following types should carefully review the Guides:
- Carbon offsets
- Certifications and seals of approval
- Compostable claims
- Degradable claims
- Free-of claims
- Non-toxic claims
- Ozone-safe and ozone-friendly claims
- Recyclable claims
- Recycled content claims
- Refillable claims
- Renewable energy claims
- Renewable materials claims
- Source reduction claims
For more information about the FTC’s truth-in-advertising requirements for environmental marketing, contact Elizabeth Knauer or Devin McDougall.
December 13, 2013
On December 10, 2013, the U.S. Supreme Court heard oral argument on two challenges to the Environmental Protection Agency’s (“EPA’s”) Cross-State Air Pollution Rule, commonly known as the “Transport Rule” or “CSAPR.”
Under its so-called “good neighbor” provision, Section 110 of the Clean Air Act (“CAA”) requires states to prohibit the emission within their borders of air pollutants that will “contribute significantly” to downwind states’ inability to attain or maintain compliance with national air quality standards. The Transport Rule would implement the good neighbor provision in twenty-eight eastern states by requiring power plants in those states to reduce their emissions of pollutants that cause ground-level ozone and particulate matter pollution in downwind states.
The challengers to the Transport Rule argue, first, that EPA impermissibly issued the rule without first allowing the states the opportunity to achieve compliance with the good neighbor provision without EPA intervention and, second, that the rule impermissibly uses cost-effectiveness as a consideration in determining upwind states’ emissions-control obligations.
Tuesday’s argument was the latest episode of a saga of litigation that has hindered EPA’s efforts to regulate the interstate transport of ozone and particulate matter pollution. In 2005, EPA issued the Clean Air Interstate Rule (“CAIR”) to address the same issue. The D.C. Circuit remanded that rule, in part because it deemed CAIR insufficiently protective of downwind states. After EPA issued the Transport Rule in 2011, the D.C. Circuit vacated the new rule. This time, the court reasoned in part that the new rule could impose overly stringent restrictions on some upwind states.
Litigation arising from EPA’s implementation of the good neighbor provision reflects how regulating the interstate transport of air pollution pits the economic interests of upwind states against the environmental and public health concerns of downwind states. In the instant case, several upwind states from the South and Midwest have filed a brief urging the Supreme Court to affirm the D.C. Circuit’s latest decision, whereas downwind states from the Northeast have filed a brief in support of EPA.
Adding another layer to that dispute, on Monday eight Northeastern states petitioned EPA to add nine upwind states to the Ozone Transport Region (“OTR”) established by Section 184 of the CAA. Being designated as part of the OTR may subject a state to heightened emissions control requirements for ozone-causing pollutants, even if that state is in attainment of EPA’s ozone air quality standards. In support of their petition, the Northeastern states submitted a technical support document that relies heavily on EPA’s analysis of cross-state transport of pollution in the Transport Rule.
Given the stakes of this cross-regional dispute, we can expect that it will continue, whether the Supreme Court sustains the Transport Rule or strikes it down.
For more information on the Transport Rule litigation and related Clean Air Act issues, please contact Jeffrey Gracer, Jonathan Kalmuss-Katz, or Ed Roggenkamp.
 42 U.S.C. § 7410(a)(2)(E).
 42 U.S.C. § 5711c(a).
 42 U.S.C. § 5711c(b)–(c).
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