EPA Ends Perverse Practice of “Sue and Settle”

“The days of regulation through litigation are over,” according to EPA Administrator Scott Pruitt.

In fulfilling his promise to end the practice of regulation through litigation that has harmed the American public, the EPA Administrator issued an agency wide directive on October 16, 2017  designed to end “sue and settle” practices within the Agency, restoring public participation and transparency in EPA rule making.

We will no longer go behind closed doors and use consent decrees and settlement agreements to resolve lawsuits filed against the Agency by special interest groups where doing so would circumvent the regulatory process set forth by Congress. Additionally, gone are the days of routinely paying tens of thousands of dollars in attorney’s fees to these groups with which we swiftly settle.

Over the years, outside the legislative and regulatory process, special interest groups have used lawsuits that seek to force federal agencies, especially EPA, to issue regulations that advance their interests and priorities, often based on questionable science or just plain junk science.  EPA gets sued by an outside party that is asking the court to compel the Agency to take certain steps, either through change in a statutory duty or creating timelines, and then EPA will acquiesce through a consent decree or settlement agreement, creating some new Agency obligation.

More specifically, EPA either commits to taking an action that is not a requirement under its governing statutes or agrees to a specific, unreasonable timeline to act.  Oftentimes, these agreements, many of which are broad public policy matters where Congress has expressly declined to act, are finalized with little to no public input or transparency. That is regulation through litigation that is inconsistent with the authority that Congress has granted, the responsibility of government to operate in an open and fair manner, and exceeds the proper role of the judicial branch.

“Sue and settle” cases establish Agency obligations without participation by states or the regulated community; foreclose meaningful public participation in rulemaking; effectively force the Agency to reach certain regulatory outcomes, unduly burden owners of land, and cost the American taxpayer millions of dollars with little if any environmental efficacy.

Among the abuses of this practice have been the Chesapeake Bay TMDL clean water plan, that has no basis is statutory authority nor basis in good science; and similarly regional haze rules and the forced listing of the Lesser Prairie Chicken under the Endangered Species Act.

This is not a conservative versus liberal issue, however, the Obama Administration used “sue and settle” far more than previous presidential administrations to enact new regulations. Obama apparently had 137 “sued and settle” regulations during his Administration.

With this new directive, the EPA is also ensuring the increased transparency when considering a settlement agreement or consent decree by: Publishing all notices of intent to sue the Agency within 15 days of receiving the notice; Publishing any complaints or petitions for review in regard to an environmental law, regulation, or rule in which the Agency is a defendant or respondent in federal court within 15 days of receipt; Reaching out to and including any states and/or regulated entities affected by potential settlements or consent decrees; Publishing a list of consent decrees and settlement agreements that govern Agency actions within 30 days, along with any attorney fees paid, and update it within 15 days of any new consent decree or settlement agreement; Expressly forbidding the practice of entering into any consent decrees that exceed the authority of the courts; Excluding attorney’s fees and litigation costs when settling with those suing the Agency; and, Providing a public hearing on a proposed consent decree or settlement when requested.

The video of the signing can be found here.

The full directive and memo can be read here.

Environmental regulation through litigation is wrong, is often based on junk science, and almost always makes bad public policy. This return to regular order is good for all Americans and good for the planet.

Rhode Island goes for LEED for Neighborhood Development and SITES

The State of Rhode Island is expanding its longstanding Green Buildings Act adding built landscapes to the list of public projects that must be built to recognized green building standards.

Rhode Island has since 2008 mandated the public construction projects larger than 5,000 gross square feet “shall be designed and constructed to at least the LEED certified” or equivalent standard, but not actually certified by GBCI.

Last week the House and Senate passed S952, legislation introduced on June 8, 2017, amending the Green Buildings Act by adding to the definition of public projects, that had regulated new construction or major renovations of buildings, now expanded to include a public building’s “public real property site.” The amended law now also includes verbiage describing “other public improvements of any kind to any public real property.”

And then the amendments go on to alter the definition of what is a green building standard,

Equivalent standard” means a high-performance green building standard other than LEED, LEED for Neighborhood Development, and SITES which provides a rating system or measurement tool, that, when used, leads to outcomes, similar or equivalent to, LEED, LEED for Neighborhood Development, and SITES outcomes, in terms of green building, green infrastructure and green site performance; current accepted equivalent standards include Green Globes, Northeast collaborative high-performance schools protocol; or other equivalent high-performance green building, green infrastructure and green site standard standards accepted by the department;

In a blog post last year, You Need to Review a SITES Scorecard, Now, I explained SITES was developed through a collaborative, interdisciplinary effort of the American Society of Landscape Architects, The Lady Bird Johnson Wildflower Center at The University of Texas at Austin, and the United States Botanic Garden. The U.S. Green Building Council associated Green Business Certification Inc. acquired and relaunched the SITES v2 rating system on June 10, 2015.

The U.S. GSA in its PBS-P100 Facilities Standards for the Public Buildings Services, beginning in 2016 and in its issued April 2017 standard, provides for use of the earlier version Sites (2009) to “meet baseline compliance with all applicable federal, tribal, state and local regulation” on federal projects, (although such may not survive a GSA review of green building standards in the coming months).

To date SITES has not moved the marketplace.

Under the new Rhode Island law the provisions related to LEED for Neighborhood Development and SITES continue only through December 31, 2020, for up to 4 projects:

In order to understand the capacity and cost, the department shall test the application of LEED for Neighborhood Development, and SITES for up to four (4) state projects. The department, with the assistance from the department of environmental management, shall assess the costs and benefits in accordance with subsection (d) of this section and report to the general assembly on or before December 31, 2020.

The new law goes on to provide, regulations for LEED for Neighborhood Development and SITES shall be promulgated after December 2020 based on the assessment, in anticipation of continuation of the use of LEED for Neighborhood Development and SITES by the future General Assembly action.

Rhode Island’s expansion of its Green Buildings Act to include LEED for Neighborhood Development and SITES may be a first for a state, but will no doubt improve the landscape beyond the state’s borders.

50 Shades of Green in Montgomery County

Green building will remain mandatory for new construction in Montgomery County, Maryland and effective December 1, 2017, the International Green Construction Code 2012 will be a permitted alternative.

Montgomery County was among the first local jurisdictions in the country, in 2008, to adopt a mandatory green building law for private building, requiring most new construction be LEED Certified. In large part, as a result of that law, Montgomery is touted as the county with the most LEED building in the nation.

On September 19, 2017, the County Council in Montgomery County enacted Bill 19-17 repealing the existing green building law. And the Council approved Executive Regulation 21-15 which adopts the IgCC 2012.

Commencing December 1st, 2017, the new regulatory scheme expands the scope and breadth, including adoption of the IgCC 2012, to now apply to all new construction and additions over 5,000 square feet (being many more projects than had previously been required to be green). Significantly, the new green law allows multiple shades of green that are alternative compliance paths to IgCC 2012. Buildings may in the alternative be LEED Silver certified (an increase from the previously require LEED Certified level), including achieving certain minimum energy credits; residential and mixed use buildings of 5 stories or more may comply with the ICC-700 2012 National Green Building Standard at the Silver performance level; or structures may comply with ASHRAE Standard 189.1 2011.

Okay, there are not 50 shades of green, but given that the original draft of the Executive Regulation was IgCC or nothing, including abandoning the decade long LEED requirement, there are now many shades of green in the County that may be available to a property owner. Credit should be given for the move from the proposed IgCC or nothing to the adopted version of the law that allows options, including significantly retaining the ability to construct a LEED certified building, to the County Department of Permitting Services, who after over 2 years of process brokered the compromise.

Note, that Montgomery County is not adopting the 2015 version of the IgCC. While the IgCC 2015 was approved 3 years ago, that current code is not approved for use by the Maryland Department of Housing and Community Development which requires each jurisdiction in Maryland use the same edition of the same building codes. Maryland is expected to approve the IgCC 2015 early next year when it approves the 2018 version of the other I codes.

It is significant that since July 1, 2015 all building in Montgomery County must comply with the International Energy Conservation Code 2015, with its energy consumption reduction requirements and many of those now existing requirements ameliorate the impacts of the proposed (5 year out of date) IgCC 2012. However, the County amended the IgCC to use a zEPI scale score of 50 (the baseline from the more recent IgCC 2015) or energy efficiency approximately 5% below ASHRAE 90.1-2013.

The County adopted a modest number of amendments to the form IgCC. Most are being positively received and if there is a criticism, it is that they do not go far enough when some of the mandatory elements of the code are being moved to appendix A and made optional.

There is no grandfathering in the new law, however, as explained by Mark Nauman, a senior staff specialist in the Department of Permitting Services, there is a 6 month phase in when “it is our policy when transitioning into a new code or code cycle, that projects significantly into the design phase during the regulatory transition period be allowed to apply under the code or regulation, ..”

As progressive as this bill is, Montgomery County is one of a very limited number of jurisdictions mandating new construction and renovation of privately owned buildings must be green. The City of Rockville, within Montgomery County, adopted mandatory use of the IgCC effective July 1, 2015.

It is worthy of note that a relatively few jurisdictions have adopted the IgCC with only a handful of IgCC new construction buildings having been completed. Not a single IgCC new building has yet to be constructed in the City of Rockville, nor under the State of Maryland or Baltimore City IgCC regulatory schemes (i.e., instead each of those two regulations allow alternative compliance paths and most, if not nearly all new construction is opting for LEED or the ICC 700).

The IgCC as adopted in Montgomery County will not be as widely read as an erotic romance novel, but the ramifications of adopting the IgCC in this longstanding LEED only jurisdiction have national import. Montgomery County is not only the most populous county in Maryland, it is one of the most environmentally progressive jurisdictions in the nation. It has also been ranked by Forbes as the 10th richest in the United States and accordingly first construction costs do not have major economic implications. Politically, the County is heavily Democrat with a Democrat County Executive and County Council. Observers note, if the green luster is off of LEED there, it will spread elsewhere.

The Second Best Way to Mitigate Your Risk in Green Building

The best way to mitigate risk in your green building project are properly drafted contract documents prepared by this law firm or by another attorney with green building experience. That may sound self serving, but it is true.

As I posted in this blog less than a year ago, Less than 20% of Green Building Contracts are Properly Drafted.

So, accepting that most readers of this blog will not engage our law firm to draft their contracts, the second best way to mitigate your risk in a green building project is to utilize The American Institute of Architects, 2017 Documents: New Sustainable Projects Exhibit.

This is not a paid endorsement. The document is simply that good.

And while the Sustainable Projects Exhibit, E204-2017, is drafted to work as an exhibit to other AIA A201 family owner, architect, contractor, consultant agreements, even if you do not use their nearly 200 contact documents, this Exhibit, separately purchased, may still be a good choice for you.

The American Institute of Architects has published standard form construction industry documents since 1888.

For the first time, beginning in 2007, there was a single short clause in B101 contract document about sustainability in the project. In response to the significant increase in the number and scope of sustainable projects, in 2011, AIA released the Sustainable Project Guide, D503 (.. that many suggest is still the best single guide to sustainable contracting). In 2012, the sustainable contract provisions from the Guide were incorporated into the A201 family of agreements issued as “SP” Documents. Earlier this year, AIA moved from provisions within the contract documents to this Sustainable Projects Exhibit.

The Sustainable Projects Exhibit creates a process, arguably a LEED v4 IPc1: Integrative Process, by which the project team works to achieve the owner’s green building goal.

The Sustainable Projects Exhibit contains specific defined terms and provisions that allocate the roles, responsibilities and risks encountered on the sustainable project to the project team member, including the owner, architect and contractor in the best position to perform or assume the role, responsibility or risk, including a specialized scope of services for the architect.

The defined terms, the same from the Guide, are the crux of the process. A Sustainable Objective is defined as the owner’s goal. Why does it want a green building; to improve energy efficiency or enhance the health and well being of building occupants or, .. The Sustainable Objective may, or may not, include seeking a specific type of certification.

A Sustainable Measure is the specific item that must be completed by a team member in order to achieve a Sustainable Objective.

A Sustainability Plan is a document prepared by a green building consultant or architect depicting the allocation of Sustainable Measures to team member.

Another 3 definitions relate to certification. Sustainability Certification is a term that refers to a specific certification, such as LEED, Green Globes, ICC 700 and EnergyStar or required by the IgCC or ASHRAE 189.1.

Sustainability Documentation are the writings required a Certifying Authority to document compliance or achievement of a Sustainable Measure.

The Certifying Authority is the entity that is responsible for granting a Sustainability Certification. For example, this could be GBCI for LEED certification.

All of this works to allocate the legal risks of the green building project.

The legal risks addressed in the Sustainable Projects Exhibit include:

Substantial completion as it relates to completing any Sustainable Measures;

Final completion of Sustainability Measures including Sustainability Certification;

Evolving standard of care as green building becomes mainstream;

Addressing warranties that a project will achieve a Sustainable Objective which is made complicated by mandatory laws and codes;

Use of new materials with limited testing which are a hallmark of green buildings;

Approving substitutions that may impact Sustainable Measures; project registration fees and authorization to act on behalf of the owner; and,

A specific waiver of consequential damages that may be encountered in green building.

Unfortunately most, green building projects fail to utilize contract documents that properly incorporate provisions necessary and proper to address the legal risks inherent in sustainable projects. It is suggested that this new short six page Sustainable Projects Exhibit, when properly completed, will be user friendly and remedy that disjunction.

The Sustainable Projects Exhibit is available at www.aiacontracts.org/purchase.

Again, the new AIA Sustainable Projects Exhibit is the second best way to mitigate risk in your green building project. It may be shameless self promotion, but the very best way to mitigate risk is a properly drafted contract document prepared by this law firm or by another attorney with green building experience.

LEED Commercial Interiors can Save the Planet

By Katie Stanford and Stuart Kaplow

LEED Commercial Interiors projects present the best single opportunity for greening buildings.

The proof is in the numbers. There are more than 5.6 million existing commercial buildings in the United States today.

And despite the wildly successful U.S. Green Building Council’s LEED (the ubiquitous acronym for Leadership in Energy and Environmental Design), the most widely used green building rating system in the world, less than 1% of commercial buildings in the U.S. are LEED certified (.. the percentage worldwide is obviously far lower). There is a huge opportunity in that remaining over 99% of the more than 5.6 million existing commercial buildings.

Of the more than 28.8 businesses in the U.S. greater than 80% exist in rented space within those existing commercial buildings.

LEED for Commercial Interiors enables project teams who may not have control over the whole building to build out green tenant spaces. Simply stated, LEED CI is the green benchmark for tenant improvements.

New construction of green buildings cannot save the planet in the short or mid term. Less than 170,000 new commercial buildings were constructed in the U.S. last year and while, of course the vast majority of those were not green (LEED certified or otherwise), that number is all but insignificant given 5.6 million existing buildings, being over 87.4 billion square feet of floor space. But greening those millions of existing buildings, one commercial build out at a time, can have a huge impact.

And for projects registered since October 31, 2016 that means the LEED v4 ID+C: CI rating system.

But what do historical numbers presage? Of the more than 90,900 total registered LEED commercial projects as of August, 2017, few are LEED CI? Actually the numbers are surprisingly low when compared to other LEED rating systems

Today there are only 3,392 LEED CI 2009 projects. In the earlier version, there are only 1,328 LEED CI 2.0 projects. And in the initial pilot only 48 LEED CI 1.0 projects

However, the early v4 numbers foretell a Gold opportunity.

There are 34 certified LEED v4 ID+C: CI projects already certified comprising 1.8 million square feet. 22 of those projects are outside of U.S. 12% of those are certified Platinum, 34% certified Gold, 23% certified Silver, and 29% Certified. So the largest number are certified Gold, conjuring up a Gold rush.

That Gold opportunity is because LEED v4 is a significant upgrade to the LEED 2009 version of the rating systems. LEED v4 is not simply a step in the continuous improvement of the rating system. And while not a Neil Armstrong “giant leap for mankind” it is all but an entirely new third party verified green building rating system with the potential to boldly go where it has not gone before, including in the CI market.

Upon review, the 34 LEED v4 ID+C: CI projects already certified, inspire optimism not only for the green building industrial complex, but also the larger built environment. The projects are as varied as nearly 3 dozen buildings can be. We reviewed the Green Loop Headquarters, an office, awarded Gold v4 only 10 days ago that is only 846 square feet. We also studied the Bindery on Blake renovation of Suite 100, a Gold v4 certified office that is a much larger 22,000 square feet. There are some LEED credits that scream opportunity:

CI v4 project teams should view the new CI v4 IPc1: Integrative Process credit as an opportunity. This new credit is achieved with an initial analysis of energy and water systems to identify synergies within the project design that can optimize energy and water use.

The CI v4 WEc1: Indoor Water Use Reduction credit rewards tenant spaces that exceed the minimums specified in the CI v4 WEp1: Indoor Water Use Reduction prerequisite. Points are earned for every 5% of additional potable water savings over the prerequisite for reductions of 20%. Curiously the WaterSense label requirements for plumbing fixtures that were recommended in LEED 2009 are made mandatory; at a time that EPA has announced it intends to discontinue the program (possibly spinning off Watersense to a private owner?).

The CI v4 EAc1: Enhanced Commissioning credit goes farther than the fundamental commissioning incorporating changes from the v4 prerequisite that make this credit more advantageous and less first dollar cost intensive than in v 2009. Be aware that building envelope commissioning is now included in this credit.

Another new credit is CI v4 EAc3: Advanced Energy Metering, requiring tenant energy meters to provide tenants with data or installing advanced energy metering for all energy sources in the space. Smart meters including and wireless metering are making sub-metering realistic in most spaces.

There are 2 options to achieve the CI v4 MRc6: Construction and Demolition Waste Management credit, either diverting waste from landfills or now new and improved v4 provides a novel alternative for source reduction that is not generating more than 2.5 pounds of construction waste per square foot.

CI v4 MRc1: Long Term Commitment can be achieved simply by signing a 10 year or longer lease. The concept is that the longer the term of occupancy the less materials required for the move by an existing tenants and a new tenant occupying the space.

One of the new credits that is much talked about is CI v4 EQc9: Acoustic Performance. And while this does not really work with an open floorplan, building occupants report dramatic positive results from impacting HVAC background noise, sound isolation, reverberation time, and sound reinforcement and masking. An interesting quirk, this credit requires that local codes are used in place of national codes, to the extent that such exist. The noise level limit for schools is 35 dBA which can be difficult and expensive to comply with, but the limits are less strict for offices, conference rooms and the like.

Perusing the CI v4 checklist will no doubt suggest other credits that are efficacious for a particular project. And don’t forget to consider Innovation credits and Regional Priority credits that can quickly add points to your total.

But, of course a LEED CI v4 project is not the only answer. The LEED Existing Building rating systems present an alternative, but have to date failed to move the market. LEED EB has not been available to most commercial buildings because they cannot achieve an EnergyStar Portfolio Manager rating of at least 75. Additionally, LEED EB requires a whole building and when most commercial building are rented to more than one tenant, such is an issue.

Another very good option may be the USGBC’s relatively new Arc. According to USGBC, Arc is a “state of the art platform designed to help you collect, manage and benchmark your data so you can improve sustainability performance.” Arc is a benchmarking tool, requiring data inputs in 5 categories: energy, water, waste, human experience, and transportation. The bulk of this data is readily available through EnergyStar Portfolio Manager (that EPA has also announced it intends to discontinue or greatly scale back, possibly spinning off EnergyStar to a private owner).

The data tracked by Arc is measured by a ‘performance score.’ This score can be utilized as a benchmarking tool, in and of itself, and it can also be directly translated to a LEED certification. (The Arc pathway is ideal for many LEED EB buildings looking to recertify, as it allows a project to forgo costly prerequisites and many credits).

We are told, people in the U.S. spend approximately 90% of their time indoors. In the context of this article, making those commercial interior spaces better work places results in healthier and more productive workers that has a dramatic impact on the bottom line. LEED for Commercial Interiors and Arc enable project teams who may not have control over the whole building to build out indoor spaces that are better for people that occupy them while at the same time being better for the planet.

The hard fact is there are just not enough new buildings constructed each year, even if all of those were green (but the true number is less than 20% of those may be green) to significantly reduce the impact that the built environment is having on the natural environment. The sweet spot is greening the buildings that already exist.

Greening the millions of existing buildings, one commercial build out at a time, with LEED CI v4 certified or Arc scored space, can actually save the planet.

______________________

Katie Stanford LEED AP O+M, Fitwel Ambassador, is a project manager at Lorax Partnerships, LLC, a green building consulting firm in Baltimore where she specializes in existing buildings. She can be reached at Katherine@loraxllc.com. Stuart Kaplow, Esquire is a sustainability and environmental attorney at Stuart D. Kaplow, P.A. in Baltimore with focused experience in green building. He can be reached at skaplow@stuartkaplow.com.

Denver Voters Petition Green Roof Mandate to the Ballot

The Denver Elections Commission has announced that the Denver Green Roof Initiative, a mandatory green roof ballot initiative will appear on the November 7 ballot.

A ballot initiative is a means by which a petition signed by a certain minimum number of registered voters can bring about a public vote on a proposed statute or measure.

This is a,

measure that requires every building and any roof replacement of a building with a gross floor area of 25,000 square feet or greater, or a building addition that causes the building to become 25,000 square feet or greater, constructed after January 1, 2018, shall include a green roof or combination green roof and solar energy collection,

With green roof coverage based on the size of the building such that a 25,000 square foot building must have 20% green coverage of available roof space, in increasing area, including that a 200,000 square foot building must have 60% green coverage.

The mandate will require, when structurally possible, the growing media must be a minimum 4 inches. Plant selection is left to the building owner with the requirement that within 3 years of planting, the plants must cover no less than 80% of the vegetated roof. Such a structure will likely be efficacious with respect to storm water management and reducing the roof temperature, but the science of urban heat island effect has been called into question in recent years.

For existing buildings without sufficient loading capacity for a green roof, there will be an exemption process that will encourage implementation of a smaller green roof or some combination with solar panels. Exempted buildings must pay a cash in lieu of construction of a green roof for the reduced or exempted area at $25 per square foot. Violations will be criminal, punishable by a fine of up to $999 and imprisonment for up to one year.

The officially certified content of the ballot was announced in a Tweet from ‎@DenverElections and included Initiated Ordinance 300 – Denver Green Roof Initiative.

A coterie of groups, including Green Roofs for Healthy Cities, announced that they had gathered more than 7,000 signatures of which 4,771 were confirmed valid, just exceeding the 4,726 signature threshold to be included on the ballot by 45 signers.

“More than 80% of the people we talked to loved the idea and wondered why we weren’t already doing it,” according to Brandon Rietheimer, founder of the Denver Green Roof Initiative.

This is believed to be the first successful voter initiative petitioning a green roof mandate to voter ballot.

The proposed green roof requirement is based largely on the City of Toronto Green Roof Law but would apply to not only new, but also expanded existing buildings with over 25,000 square feet.

San Francisco was the first local jurisdiction and one of very few in the U.S. to mandate green roofs or solar panels on new buildings as of January 1, 2017.

In a nation sharply divided about the direction of environmental policy, an environmental initiative petitioned to the ballot by voters is huge. Colorado is has been a Blue state in the last two elections, but Denver is solidly left of center, so it is possible this ballot initiative could pass on November 7.

Environmental voter initiatives could become de rigueur across the country

Green Globes to be Approved in Maryland

Last week the Maryland Green Building Council voted unanimously to recommend that Green Globes, at the two Green Globes level, be approved by the Maryland Secretaries of Budget and Management and General Services as a “high performance building” as defined in Maryland law.

The vote is being widely heralded as a significant step forward in expanding green building in the State and across the country.

Vicki Worden, President and CEO of the Green Building Initiative, said,

GBI has been active in Maryland since Green Globes was first introduced in the United States in 2004. The more recognition Green Globes is afforded, the more our credible, practical and cost-effective tools can help expand the green building pie. We are appreciative of the many dedicated volunteers on the Maryland Green Building Council that have reviewed Green Globes and others that have used Green Globes over the years and recognize its ability to contribute to improving the built environment in Maryland.

There are already 48 Green Globes certified buildings in Maryland. And in combination with GBI’s Guiding Principles Compliance program, which is used by federal agencies, GBI has certified a total of 85 buildings in Maryland.

The action taken last Wednesday was by the Maryland Green Building Council, a governmental body (not to be confused with a U.S. Green Building Council chapter) established by an act of the legislature in 2007, replacing the prior Council of the same name created by Executive Order in 2001. The Green Building Council’s portfolio is dramatic in that it directly impacts not only much of the construction funded by the State’s capital budget and indirectly a great deal of private sector building in a state with among the most green building in the nation.

The current law, in State Finance and Procurement, § 3-602.1, provides “in this section”

(2) “High performance building” means a building that:

(i) meets or exceeds the current version of the U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) Green Building Rating System Silver rating;

(ii) achieves at least a comparable numeric rating according to a nationally recognized, accepted, and appropriate numeric sustainable development rating system, guideline, or standard approved by the Secretaries of Budget and Management and General Services; or

(iii) complies with a nationally recognized and accepted green building code, guideline, or standard reviewed and recommended by the Maryland Green Building Council and approved by the Secretaries of Budget and Management and General Services.

The vote last Wednesday, in accordance with that subsection (iii), the Maryland Green Building Council having reviewed the Green Building Initiative, Green Globes green building rating system, which is a nationally recognized and accepted green building code, guideline, or standard; recommended that Green Globes, at the two Green Globes level, be approved by the Secretaries of Budget and Management and General Services as a “high performance building” as defined in State Finance and Procurement § 3-602.1.

Additionally, the panel expressly recommended that for private sector  Maryland rehabilitation tax credits, as provided for in in State Finance and Procurement § 5A-303, three Green Globes be determined as comparable to LEED gold as achieving,

.. at least a comparable numeric rating according to a nationally recognized, accepted, and appropriate numeric sustainable development rating system, guideline, or standard approved by the Secretaries of Budget and Management and General Services under  § 3-602.1 of this article.

Moreover, private building will be greatly advantaged by this action for the purposes of expanding buildings eligible for property tax credits. State Tax Property § 9-242 has its own definition, “in this section, ‘high performance building’ means a building that:”

(i) achieves at least a silver rating according to the U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) green building rating system as adopted by the Maryland Green Building Council;

(ii) is a residential building that achieves at least a silver rating according to the International Code Council’s 700 National Green Building Standards;

(iii) achieves at least a comparable rating according to any other appropriate rating system; or

(iv) meets comparable green building guidelines or standards approved by the State.

Local governments will now be able to grant a tax credit against the property tax imposed on a high performance building that will include a building that achieves at least a two Green Globes rating.

Maryland state law has not less than five different definitions (and at least four counties have their own definition) of high performance building and at least one is not impacted by this action. For example, the Public Safety § 12-509 definition of a high performance home will remain,

a new residential structure that meets or exceeds the current version of: (1) the Silver rating of the International Code Council’s 700 National Green Building Standards; or (2) the Silver rating of the U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) for Homes Rating System.

In some instances, including for private sector buildings to obtain a tax credit, state law requires building “achieves at least a silver rating,” that is, actually be certified by GBCI. But for the purposes of public sector building, the requirement is only that the building “meets or exceeds the current version of” LEED Silver and third party certification is not required.

This Maryland Green Building Council action is substantially the same as when Maryland approved the use of the IgCC 2012 for state funded building, but that adoption so altered and amended the green code such that no project has ever used it. It is anticipated this recommendation will become final in the coming days.

This is an exciting expansion of green building. As project developers grapple with the new LEED v4, in Maryland for state buildings and for many privately owned projects in this State with so much green building, there will be an alternative for building green.

And maybe most important, there are 49 states with GBI certified buildings today, this type of government action will result in more green building everywhere.

I would be remiss if I did not make you aware that Maryland Governor Larry Hogan recently appointed me to the Maryland Green Building Council and I was pleased to participate in the vote last week.

Solar Panel Tariff Fight Makes Strange Bedfellows

The U.S. International Trade Commission held a nearly 10 hour initial public hearing this past Tuesday on a petition seeking tariffs and price minimums on low cost imported solar panels.

The petition seeks duties of 40 cents per watt on imported solar cells and also a floor price of 78 cents per watt on solar panels made by foreign manufacturers.

Suniva, a solar panel manufacturer, now in bankruptcy, initially submitted a petition to the ITC on April 26, 2017. The petition triggered an investigation by the ITC,

.. pursuant to section 202 of the Trade Act of 1974 to determine whether crystalline silicon photovoltaic cells (whether or not partially or fully assembled into other products) are being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry producing an article like or directly competitive with the imported articles.

SolarWorld, a German company with a manufacturing operation in the U.S. that also filed for insolvency joined Suniva as a co-petitioner in the anti-dumping case in May.

The opposition to the petition is an unlikely coterie that could be the very definition of “politics makes strange bedfellows.” Environmental groups and conservative free trade policy groups are companions in fighting the tariffs. Representatives of the emergent solar energy industry urged the ITC not to apply tariffs on imported solar cells, saying it would slam one of the fastest growing industries in the U.S., hurt blue-collar workers gaining from new jobs in rural communities and raise electricity costs on the growing number of consumers benefiting from falling solar prices. Much of that opposition is organized by the businesses, including contractors that sell and install solar energy systems who told the ITC that the companies’ failure in the U.S. had “nothing to do with imports.”

That said, and despite that there are a lot of low cost imported solar panels in the market, there are also a lot of jobs. Solar trade groups tout that “solar jobs last year grew 25%, contributing 1 out of every 50 new jobs created in U.S., and the industry has added more than 100,000 blue-collar jobs to the economy in the last five years.” And those jobs are at risk if tariffs are imposed.

A coalition of conservative groups including the American Legislative Exchange Council that support free trade have joined in opposition to solar tariffs.

A review of the official Witness List, including who has lined up on each side, is simply fascinating.

But that is just the beginning of the irony. According to Suniva’s Chapter 11 filing, it is 63% owned by Chinese firm Shunfeng, whose southeast Asia products would be subject to the higher tariffs sought in its ITC petition. And such is also true for SolarWorld AG headquartered in Bonn, which would find its non U.S. products subject to the requested tariffs.

Not to mention that a Chinese owned company and a subsidiary of a German company are seeking trade protections from the U.S. government?

“What was clear today is that two foreign-owned companies seeking U.S. government subsidies who disingenuously claim to represent solar manufacturing were on one side and the broader unified solar industry united on the other,” said Abigail Ross Hopper, Solar Energy Industries Association’s president and CEO. “We hope the ITC sees the petition for what it is.”

Additionally, the opponents who are emboldened by the new solar industry installation workforce further argue that these two foreign financiers “are looking for U.S government protection after receiving tens of millions of dollars in federal and state handouts” but failing to remain competitive with the fast changing industry.

The hearing Tuesday was part of the injury phase of the investigation. In this proceeding the ITC must find that increased imports were the substantial cause of the industry’s serious injury. The ITC will make a recommendation to the Trump Administration by November. And despite that Stephen Bannon who campaigned against “globalists” was no longer an Administration strategist as last week came to an end, it is a populist Administration that will be making the final decision.

You should follow this case that could have a dramatic impact on the solar industry, but not immediately alter your business plan on the remote chance that these tariffs will be imposed over the interests of blue collar jobs.

You Should Not Contract With Your Environmental Consultant

In an effort to mitigate risk you should not contract directly with an environmental consultant, but rather your attorney should contract with that consultant.

While laws vary from state to state, in the vast majority of factual situations a business or property owner is ill served by contracting directly with a third party for most environmental services.

And yes, of course an experienced environmental attorney will be able to recommend third party consultants to undertake an investigation, provide counsel on the necessary and proper scope of those services, aide in interpreting results and make recommendations about how to move forward, but this blog post is about the role of legal counsel in mitigating risk in the realm of hazardous substances and the like. What is described here is much more than simply good drafting of consultant contacts (e.g., so that investigation derived wastes, such as drill cuttings and bailed groundwater, are properly disposed of by the consultant).

The recommendation here is that in an environment of strict liability hazardous substance laws, from CERCLA and its state counterparts to local lead based paint codes, attorneys should be contracting with those undertaking hazardous substance investigations and the like.

First and foremost, the attorney-client privilege protects communications made in confidence by a client to its attorney in the attorney’s professional capacity for the purpose of obtaining legal advice. Significantly, the attorney-client privilege can extend to consultants hired by the attorney on behalf of a client. Be aware, however, only where the document or communication is primarily concerned with legal assistance does it come within the attorney-client privilege.

Second, the separate work-product doctrine is a qualified privilege and is distinct from and broader than the attorney-client privilege. The work-product doctrine protects documents prepared by attorneys in anticipation of litigation for the purpose of analyzing and preparing a client’s case. The litigation need not be ongoing or even imminent and it may simply be possible future litigation.

Third, environmental services contracts with an attorney almost always also include a broad confidentiality provision encompassing the contract itself, the scope of services, any test result, all reports (that should be only in draft form), and more.

And fourth, the client should not have knowledge of certain environmental facts. Some suggest that the role of legal counsel appears to morph into that of an environmental advisor. And it may be much more than that. In many instances all data, results, information, and draft reports are not only legal counsel’s property, but none of that documentation or detail is shared with clients (not a board of directors or a sole proprietor real estate developer). What a property owner does not know it cannot share.

This topic includes ordering a Phase I Environmental Site Assessment in contemplation of a real estate transaction, but it includes so much more, .. think defensively.

Eat, Pray, Greenbuild?

I am often asked, “how can I expand my green building business?” My answer is simple and the same response I have offered for years, attend the Greenbuild International Conference and Expo.

This year Greenbuild is in Boston from November 8 – 10.

I do not claim any particular business marketing prowess. Nor can I promise you will find the balance between worldly enjoyment and divine transcendence at Greenbuild, but Greenbuild has been a prime source of new clients for my sustainability and green building law practice (.. okay, this blog is actually our number 1 source of new clients, but Greenbuild is second)!

I have attended a lot of Greenbuilds. Actually my first U.S. Green Building Council “Green Building Conference” (yes, pre Greenbuild) held in conjunction with the National Institute of Standards in Gaithersburg, Maryland in 1994 had only 450 people in attendance. While attendance in recent years is off a bit from the huge Greenbuild the last time the conference was in Boston in 2008, with 27,995 attendees (.. that was a party!), last year the 18,079 attendees in LA dwarfed the first Greenbuild in 2002 when 4,189 people gathered in Austin.

Those 18,079 attendees last year were from 96 countries, despite the internationalization of the conference. In 2017 USGBC has expanded the Greenbuild platform to include conferences in India and China, in addition to Greenbuild Boston and Greenbuilding Brasil.

Greenbuild attracts all types. Last year 24% of those in LA were from architecture or engineering firms, 14% were contractors and builders, 10% were utilities and 8% were manufacturers, not to mention the very large numbers of professionals offering services and consulting, including, yes, a large assemblage of real estate attorneys.

And Greenbuild is sustainable. USGBC reported in 2016, it upheld its commitment to offsetting 100% of the 866 lbs. of GHG emissions per participant.

Last year there were 531 exhibitors on the 138,960 square feet Expo Floor. It is all but impossible not to encounter new vendors and innovative suppliers. Educational activities abound and there is a lot to learn.

Those 2016 demographics are proof that Greenbuild is the largest green building gathering each year and unquestionably the best opportunity for networking among “green people.”

Greenbuild 2017 in Boston will be “the” target rich environment for green people this year. It is your chance to meet new USGBC CEO Mahesh Ramanujam, the man to know, and many others who make a living in the environmental industrial complex.

It is only 100 days until this once a year opportunity to expand your green building business.

For those who will complain that this blog post is shameless promotion of USGBC, that may be true, but it is also correct that Greenbuild has been a prime source of new clients for my law practice for more than a decade! LEED is still where it is at in green building. It has become all but a spiritual movement, with nearly 90,000 registered and certified projects and more than 19.15 billion square feet participating in LEED across 165 countries and territories. Every day, 2.2 million square feet of building space certifies to LEED.  I won’t promise you the inner peace and spiritual balance of Eat Pray Love, but if you want to benefit from that business volume, you should be at Greenbuild.

And you may find Eat Pray Love’s true pleasure of nourishment in Boston; it is a great food town. And I will help you. As a reader of this blog, if you email me before Greenbuild, I will contribute to your self discovery by buying you a drink or a cup of coffee at a Boston watering hole. (I made a similar offer last year and had a great time meeting a lot of very fun people for drinks in LA.) I hope to see you in Boston in November.

LexBlog