New York Governor Vetoes Extension of Brownfields Credits – What Next?

Greenberg Traurig
Steven C. Russo

January 5, 2015

Last week, New York Governor Andrew Cuomo vetoed a bill that would have extended the current Brownfield tax credit program for fifteen months beyond its expiration at the end of this year.  The Governor apparently wishes to use the possibility that the tax credits will expire as an impetus for broader and longer-term reform that his Administration seeks.  That proposed reform has its own problems, however, and where this will all come out is unclear, which is not optimal for Brownfield redevelopment.

New York State has one of the most successful Brownfield redevelopment programs in the nation and there is little doubt that the very generous tax credits provided to redevelopers of these former contaminated sites is a big reason for this success. Those credits expire at the end of 2015. Critics of the program, however, have argued that the credits are overly generous and include too many projects that would have been developed and remediated even absent the tax credits.  It is challenging to say the least to figure out which Brownfield sites would not have been developed “but for” the credits.

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EPA Publishes Massive Final Definition of Solid Waste Rule

Seyfarth Shaw LLP
Philip L. Comella , Patrick D. Joyce and Craig B. Simonsen

January 13, 2015

The U.S. Environmental Protection Agency’s struggle to distinguish between a waste and a recyclable material, dating back to its original May 19, 1980 rulemaking under the Resource Conservation and Recovery Act, takes its latest turn in the now-final Definition of Solid Waste rule (DSW rule), signed by Administrator Gina McCarthy on December 10, 2014. 80 Fed.  Reg. 1694 (January 13, 2015).

The new DSW rule will take effect six months after publication in the Federal Register. The 507 page final rule came as the result of a settlement between EPA and the Sierra Club over the EPA’s October 2008 rule on the same topic, in which the EPA liberalized the regulation of a form of recycling known as “reclamation.” Prior to the 2008 rulemaking, the EPA generally considered reclamation (the processing or regeneration of a material to recover a usable product) as akin to treatment, and therefore considered most materials destined for reclamation to be solid wastes.

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Legal and Practical Issues Associated with the Growing US Environmental Justice Movement

Mayer Brown LLP
Mark R. Ter Molen, Jaimy L. Hamburg and Nicholas R. Johnson

January 15, 2015

This article was first published in Law 360

Imagine this scenario: in the course of constructing a new manufacturing facility, your company’s EHS manager applies to the state environmental agency for a general NPDES permit. While the permit application is pending, the agency informs your EHS manager that your new facility is in an “environmental justice” area and asks your company to analyze whether the proposed NPDES permit will adversely impact the health of low-income and minority citizens in that community, given the fact that elevated levels of lead have already been identified in the community drinking water supply. The agency also requests that your company hold a “listening session” at a local community center so that residents may comment on the permit application.

As general counsel, you believe your company has already satisfied all the statutory requirements for the NPDES permit to be issued. Do you comply with the agency’s additional requests? And what are the consequences if you do not?

While this factual scenario is hypothetical, the key legal question it raises is not: that is, the extent to which recent environmental justice policy initiatives undertaken by state and federal environmental agencies may create de facto binding obligations upon the regulated community.

The concept of “environmental justice” (EJ) in federal policy actions first gained traction in the late 1980s, when studies found racial disparities in both the siting of hazardous waste facilities and the way in which the federal government remediated toxic waste sites and punished polluters.

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Fifth Circuit Rules No CERCLA “Arranger Liability” Absent an Affirmative “Intent to Dispose”

Sidley Austin LLP
Marie L. Fiala, Samuel I. Gutter and Peter R. Steenland

January 15, 2015

In a case involving “arranger” liability under CERCLA (the Comprehensive Environmental Response, Compensation and Liability Act), the Fifth Circuit on January 14 reversed a Texas federal district court that had held BorgWarner liable for leaks of dry cleaning solvent into the environment from equipment sold by Norge, an affiliate of BorgWarner’s corporate predecessor. Vine Street LLC v. Borg Warner Corp., No. 07-40440 (5th Cir., Jan. 14, 2015). Following the Supreme Court’s landmark decision in Burlington Northern & Santa Fe Railway Co. v. United States, 556 U.S. 599 (2009), the Fifth Circuit held that Norge had no “intent” to dispose of dry cleaning solvent and remanded to the district court to enter judgment in favor of BorgWarner.

Norge designed and sold the dry cleaning equipment to the plaintiff Vine Street LLC, including a system for reclaiming perchloroethylene (PERC). Over time, some of the PERC leaked into sewer pipes and from there into the ground. Vine Street sued to recover clean-up costs. Following a full trial, in 2006 the district court for the Eastern District of Texas found BorgWarner liable for 75 percent of the clean-up costs on the grounds that Norge knew that its reclamation system wasn’t completely effective and that some PERC would inevitably be discharged to the sewer system.

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