Green Building Law Update

The Intersection of Real Estate, Science, and Law

Fireworks and the Law: A Rare Case of Regulatory Restraint in Environmental Protection

By Stuart Kaplow on Posted in Codes and Regulations, Environmental

In the storied words of John Adams in his July 3, 1776 letter to Abigail, “It ought to be solemnized with Pomp and Parade, with Shews, Games, Sports, Guns, Bells, Bonfires and Illuminations from one End of this Continent to the other from this Time forward forever more.”

Nearly 250 years later, Americans have embraced his vision with gusto, setting off roughly 275 million pounds of fireworks each year, an astonishing jump from about one tenth of a pound per person in 1976, the U.S. Bicentennial year, to nearly one pound per person today, the vast majority imported from China. Yet, while these fleeting bursts of color and sound delight millions, they also release fine particulate matter and trace metals into our air, raising the perennial question of do we need to balance environmental protection with our national traditions?

A Surge in Particulate Pollution – But Only Very Briefly

A groundbreaking 2015 study by NOAA quantified the impact of Independence Day fireworks on particles (less than 2.5 microns in diameter) using data from 315 monitoring sites nationwide. On average, 24 hour particulate matter concentrations during the 6 pm to midnight window on July 4th were 42% higher than on surrounding days, with the largest hourly spike occurring between 9 pm and 10 pm and levels returning to baseline by noon on July 5th. While some urban monitors briefly recorded readings above the EPA’s 24 hour standard, the spike is both short lived and localized; by the next day, air quality rebounds, minimizing sustained exposure risks.

The Chemistry Behind the Celebrations

Fireworks owe their brilliance to metal salts: strontium compounds create deep reds, sodium salts produce yellows, barium yields vibrant greens, and copper compounds, particularly copper chloride, give those rare blues. In a typical aerial shell, potassium perchlorate serves as the oxidizer, charcoal and sulfur form the black powder propellant, and dextrin or other binders hold star compositions together.

Upon ignition, these materials combust and aerosolize, generating particulate matter laden with metal residues. Yet, because fireworks are designed to detonate at altitude, much of the debris disperses high above ground level, diluting before reaching populated areas.

Minimal Federal and State Regulation

In the United States, the federal government sets only the minimum standards for consumer fireworks under CPSC and ATF regulations, limiting composition weights and lash powder quantities, but does not regulate their use for air quality purposes. Beyond safety permits issued by state fire marshals (for “firework shooters,” manufacturers, and sellers), nearly every jurisdiction, 49 states plus DC, allows some form of consumer fireworks; Massachusetts stands alone in banning their sale and use without a permit. Local permits for large displays may be required, but enforcement focuses almost entirely on fire and injury prevention, not emissions control.

Exceptional Events and the Clean Air Act

Recognizing that the brief particulate surges from fireworks are integral to traditional celebrations, Congress and EPA have treated them as “exceptional events” under 40 CFR § 50.14, alongside wildfires and high winds, allowing states to exclude fireworks influenced data from regulatory determinations if they demonstrate a clear causal link to cultural events like July 4th festivities.

The Rose Park, Utah “Fireworks Exceptional Event” report illustrates this process: filter analysis showed greater than 75% of particulate matter mass attributable to black powder components (potassium nitrate, sulfur, carbon) and trace metals, and light evening winds carried plumes to monitoring sites; EPA concurred in 2019 that these data be excluded from design-value calculations, preserving attainment status without penalizing cultural traditions.

Temporary Guidance for Sensitive Populations

Although the EPA’s “Particulate Matter Pollution” webpage offers general tips for reducing particulate matter exposure, it’s now archived fireworks specific guidance acknowledged that while most individuals experience no effects from short exposures, infants, children, and persons with respiratory conditions may be more sensitive. Accordingly, vulnerable individuals are advised to watch displays from upwind locations or indoors, though practical avoidance is challenging near community events.

Beyond Air: Coastal Waters and the Clean Water Act

In coastal regions like San Diego, concerns shift from air to water. Under an NPDES general permit (Order No. R9-2022-0002), any fireworks display over ocean or bay waters must minimize fallout and debris via best management practices (post-event cleanup, debris collection), balancing aquatic protection with public celebration. Litigation by San Diego Coastkeeper and CERF against SeaWorld highlights enforcement under the Clean Water Act, pressing for strict adherence to discharge permits and exploring nonpolluting alternatives like drone shows.

Judicial Remedies vs. Regulatory Chills

Where actual harms arise, whether fire start incidents or debris induced water pollution, traditional tort and Clean Water Act enforcement mechanisms remain available. But absent concrete injuries or permit violations, courts have little basis to curtail fireworks that fleetingly degrade air quality. This deference reflects a societal judgment: the joy and unity fireworks engender outweigh their transient environmental footprint.

Conclusion: A Model of Regulatory Restraint?

Fireworks, first developed in 2nd century BC China, have illuminated human festivities for millennia. In the U.S., our legal framework largely exempts them from lasting regulation under air and water laws, treating particulate surges as short lived cultural trade offs rather than ongoing public health threats. We recognize this as a rare instance where the balance tips sharply toward tradition, with minimal bureaucratic burden.

Perhaps other regulatory arenas could learn from this “explosive” example, favoring cultural values and individual enjoyment over heavy handed controls, so long as real harms remain negligible and remedies for actual damage endure.

In the interests of disclosure, I do not represent any fireworks manufacturers, but I do very much enjoy a good copper chloride blue. Happy 4th of July!

Maryland Expands Bat Protections: New Law Shifts Approach to Biodiversity

By Stuart Kaplow on Posted in Codes and Regulations, Environmental, Federal, State

Biodiversity degradation is an existential crisis affecting planetary and human health. Since the enactment of the federal Endangered Species Act in 1973, populations of mammals, birds, amphibians, and fish have dropped a shocking 68%.

As scientists and policymakers grapple with addressing the rapid and widespread decline in species, states like Maryland are exploring regulatory strategies that extend beyond traditional frameworks such as the federal ESA. One such initiative is embodied in Senate Bill 946, passed in the 2025 Maryland General Assembly session and now chaptered under the title “Endangered and Threatened Species – Incidental Taking – Bats.”

This new law marks a significant expansion of one state’s regulation of species protection and introduces a new permitting process that will substantially affect landowners, utility companies, and small businesses operating in Maryland. While initially sponsored by an Eastern Shore lawmaker who described encouraging the forestry industry, the bill’s implementation raises real questions about the efficacy of this government action and its negative economic impact.

Bats make up roughly one fourth of all mammal species, but are any of them going to be saved from human activity by this new law that will be expensive for businesses across Maryland to comply with?

A New Framework for Bat Conservation

Senate Bill 946 authorizes the Maryland Secretary of Natural Resources to issue a permit for the “incidental taking” (.. the unintentional or accidental harming of a protected species) of four species of bats:

  • the Indiana bat,
  • the eastern small footed bat,
  • the northern long eared bat, and
  • the tricolored bat

.. provided that applicants submit a detailed conservation plan and meet stringent criteria. This is a notable policy development: While incidental take permits exist under the federal ESA, Maryland’s Nongame and Endangered Species Conservation Act has previously not authorized these state level permits. The state is now asserting its independent authority to regulate even those species not federally protected, like the eastern small footed bat (after the U.S. Fish and Wildlife Service “found that listing was not warranted” because the culprit in its decline was not humans but a fungus), further expanding the state’s conservation reach.

The same is the situation with the tricolored bat that was proposed for listing by the Biden Administration, but is not currently federally listed as endangered.

While much is known about the federally listed bats, the same cannot be said for the two now Maryland only protected bats, state approved conservation plans must detail:

  • Expected impacts from the activity;
  • Measures to minimize and mitigate those impacts;
  • Financial resources to carry out the plan;
  • Alternatives considered; and
  • Any other measures deemed necessary by the Secretary.

Moreover, the Secretary must affirm that each proposed incidental taking:

  • Will not appreciably reduce the survival of the species;
  • Will be minimized to the extent practicable;
  • Is supported by adequate funding and implementation commitments; and
  • Complies with applicable federal authorizations.

What Bats Are We Talking About?

Maryland is home to 10 bat species, most tree bats and some cave bats. These include migratory species as well as hibernating species that dwell in tree cavities, attics, and even building structures. Bats provide immense ecological benefits, including insect control, pollination, and seed dispersal.

Economic and Regulatory Implications

The Maryland Department of Natural Resources acknowledges that Senate Bill 946 “may have a material impact on small businesses.” Companies, and not just those in construction, energy, agriculture, and forestry, will find themselves subject to new permitting obligations, seasonal activity restrictions, and conservation compliance obligations (i.e., preparing a conservation plan and pursuing state permitting approval) if their operations occur in bat sensitive areas.

Prior to this law, businesses working within the framework of the ESA often managed compliance through federal incidental take permits. Now, Maryland businesses must also navigate a yet to be announced state level conservation permitting regime, potentially duplicating regulatory efforts or facing stricter localized requirements. Importantly, the bill gives the Secretary broad discretion to adopt regulations, meaning more detailed submittals and possibly onerous rules may be forthcoming, but significantly, the state does not have personnel or a budget for this entirely new program?

This has prompted concerns from affected businesses. From time of year work restrictions on tree felling to limitations on land disturbance near roosting sites, the costs and delays associated with bat protections will mount making doing business in Maryland more expensive. For many small businesses, particularly in rural or exurban areas, this may result in burdens disproportionate to their role in the broader biodiversity issue.

Is This the Right Approach to Biodiversity Loss?

There is no question that biodiversity loss is real and consequential. Maybe a million species are at risk of extinction, many within decades. The loss of biodiversity not only affects ecosystems but has direct human consequences, undermining food security, increasing zoonotic disease risk, etc.

That observed, whether Maryland’s expanded bat regulation represents an efficacious response is an open question. Critics argue that the permitting regime will create bureaucratic friction without clearly measurable conservation gains. There is little evidence that incidental take permitting, particularly when implemented at the state level without robust enforcement and funding, meaningfully alters the trajectory of species recovery.

Additionally, the problem is not the killing of bats by humans. The Boogeyman is White nose syndrome, a deadly fungal disease that has caused 90 to 100 percent declines in tri colored bat colonies in Maryland. This new law does nothing to address that, so ..

Moreover, layering additional state level requirements on top of existing federal processes may not address the underlying drivers of biodiversity loss, namely habitat fragmentation, climate change, and invasive species.

What Should Maryland Businesses Do Now?

We have assisted clients in navigating federal bat related regulatory requirements, including the preparation of habitat conservation plans and negotiation with U.S. Fish & Wildlife Service officials. Now, with Senate Bill 946, the same type of work will be needed for state authorization in Maryland.

Businesses should consider:

  • Conducting early habitat assessments if operating in areas with known bat activity;
  • Developing internal compliance protocols to track time-of-year restrictions;
  • Monitoring forthcoming regulations from DNR; and
  • Budgeting for conservation plan preparation and potential project delays.

With more bat species under Maryland’s regulatory umbrella, proactive engagement is not only a legal necessity, it may also protect businesses from unforeseen enforcement and reputational risks.

Conclusion

Maryland’s Senate Bill 946 represents a bold step into an increasingly complex realm of environmental regulation. While bats are undeniably important to the health of ecosystems and worthy of protection, the bill’s real world effectiveness in slowing biodiversity loss is questionable at best. This new law does nothing to address White nose syndrome responsible for more than 90 percent of the bat decline.

What is certain is that businesses need to be prepared for the operational and compliance burdens this law introduces.

If your business could be affected by bat conservation measures, federal or state, we can assist in assessing impacts, designing mitigation strategies, and navigating the new permitting landscape in Maryland. As state biodiversity law continues to evolve beyond the longstanding federal framework, effective legal counsel will be critical to balancing business operations with environmental compliance.

All Electric Future Faces Legal Threat After Supreme Court Ruling

By Stuart Kaplow on Posted in Climate Change, Codes and Regulations, Energy

In a pivotal environmental case with wide reaching implications, the U.S. Supreme Court ruled last Friday that a group of fuel producers have Article III standing to challenge the EPA’s approval of a waiver under the Clean Air Act permitting California regulations (.. adopted in 17 states) requiring automakers to manufacture more electric vehicles and fewer gasoline powered vehicles.

In a 7–2 decision issued on June 20, 2025, in Diamond Alternative Energy, LLC v. EPA, the Court ruled that a group of oil and gas companies have standing to challenge California’s zero emissions vehicle regulations, reviving a lawsuit that had been dismissed by the D.C. Circuit for lack of standing.

Legal commentators and media headline writers alike are describing this as the Supreme Court delivers a final blow to California’s imperiled emission standards. It is actually much more than that, including having an impact from Maryland to Oregon and Vermont to New Mexico, and ..

The Legal Issue: Who Can Sue and Why It Matters

At the heart of the case was whether a group of fuel producers, who (.. make gasoline and ethanol, etc.) are not directly regulated by the California rules (.. that regulate the sale of cars), could sue the U.S. Environmental Protection Agency for approving the state’s greenhouse gas emissions standards under the Clean Air Act.

“The government generally may not target a business or industry through stringent and allegedly unlawful regulation, and then evade the resulting lawsuits by claiming that the targets of its regulation should be locked out of court as unaffected bystanders,” the Supreme Court opinion says.

“We reverse the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.”

Explaining the challenged California regulations, the Court wrote the “regulations generally require automakers (i) to limit average greenhouse-gas emissions across their fleets of new motor vehicles sold in the State and (ii) to manufacture a certain percentage of electric vehicles as part of their vehicle fleet.”

“To date, acting pursuant to the Clean Air Act, 17 States and the District of Columbia have copied California’s greenhouse-gas emissions standards for new motor vehicles, the electric-vehicle mandate, or both,” the opinion describes.

Fuel producers argued that the EPA and California had exceeded the scope of the 1970s era Clean Air Act, which, despite preempting states from enacting their own limits, allows the heightened standards in California to address smog in California. California’s new emissions standards, adopted in 17 states after being approved for California, “did not target a local California air quality problem, as they say is required by the Clean Air Act, but instead were designed to address global climate change,” Justice Brett M. Kavanaugh wrote, using italics to describe the industry’s position.

The Court’s opinion emphasized that even incremental changes in fuel sales would satisfy the requirement for standing.

A Blow to State Climate Authority

Though the decision does not resolve the underlying case, it clears the way for the lawsuit to move forward, potentially setting the stage for a broader dismantling of California’s regulatory authority over emissions and vehicle standards. This is a critical development because, for decades, California has exercised a unique role under Section 209 of the Clean Air Act, which allows the state to set stricter air quality standards than the federal government, with EPA approval.

Fun fact. California has received more than 100 waivers under the Clean Air Act.

The current challenge aims to roll back that authority. The industry’s argument, supported now by a majority of the Court, is that California’s EV mandates are not truly about local smog or air pollution but are instead an improper attempt to regulate global carbon emissions and climate change through a legacy statute.

A Broader Political Assault on Climate Regulation

The Supreme Court’s decision comes on the heels of political efforts in Washington, D.C. We blogged in advance of President Trump’s signing last week of three Congressional Review Act resolutions disapproving the same Biden administration’s EPA rules that are the subject of this Supreme Court case. At the bill signing ceremony, President Trump declared that “our Constitution does not allow one state special status” to dictate national energy and transportation policy.

The California waiver and all of the state approvals are now in serious jeopardy.

The Dissenting Voices

The majority opinion rejected the argument that “surging consumer demand” for electric vehicles meant that invalidating the regulations would not cause auto makers to make more fossil fuel vehicles. Relying on “commonsense economic principles” and record evidence, the Court reasoned that it was sufficiently “predictable” that invalidating California’s regulations would likely redress the fuel producers’ injury.

Justice Sonia Sotomayor and Justice Ketanji Brown Jackson dissented from the majority.

Justice Jackson, in particular, warned that the Court’s ruling “gives fodder to the unfortunate perception that moneyed interests enjoy an easier road to relief in this Court than ordinary citizens.” She argued that the case was largely moot because of the recent Congressional resolutions and that the Court’s intervention signals a troubling judicial trend favoring powerful industries over environmental protection.

What Comes Next?

With the case now remanded to the lower courts, the legal validity of California’s emissions standards (.. in use in 17 states) will all but certainly be repealed. Many suggest the only question to be resolved is whether states retain any meaningful authority to regulate greenhouse gas emissions from vehicle electrification to building electrification, in the face of federal opposition.

For businesses and environmental lawyers alike, Diamond Alternative Energy is more than a procedural decision about standing. It is a shot across the bow in what is quickly becoming a sweeping redefinition of state and federal roles in climate policy. As legal challenges mount and Congress shifts direction, state climate change initiatives may be headed for a constitutional reckoning.

Mold Testing in Maryland Real Estate under the New Law

By Stuart Kaplow on Posted in Codes and Regulations, Environmental

Landlords, property managers, and real estate professionals across Maryland are about to enter a new era of regulating mold. With the General Assembly’s recent passage of Senate Bill 856, Maryland has taken a significant step toward being the first state to codify fungal growth in real estate.

The new law, which goes into effect in 2027, requires landlords to remediate reported mold, but stops short of requiring mold testing or sampling. This has left many asking: Should a landlord test or sample for mold, and is this something that should be included in every lease?

What are Molds?

Molds are a natural part of the environment and can be found almost everywhere that moisture and oxygen are present.

As an environmental attorney with decades of experience counseling clients on mold issues, and having provided expert testimony in litigation where mold was a core issue, I can say unequivocally that mold sampling is, in nearly every instance not necessary, and sometimes counterproductive. But of import, this is a new and emergent body of law where no other states have attempted what Maryland is regulating (where several states and maybe a score of locals have included under residential ‘habitability’ standards visible mold and moisture).

Mold is Ubiquitous and Testing Has Limits

There are more than 100,000 known species of mold, part of the larger fungal kingdom which includes an estimated 2.5 million species, most of which have not been scientifically classified. Molds are everywhere, both indoors and outdoors, and the Centers for Disease Control and Prevention puts it bluntly: “There is always some mold around.” Spores enter buildings through open doors, windows, vents, HVAC systems, and even on people and pets.

In many instances, airborne spore counts are higher outside of a building than inside. An as yet unpublished scientific journal manuscript reported in multiple instances in June 2024 that the District Court for Prince George’s County, Maryland, found a livability code violation for mold, that airborne mold counts were higher outside of the rental apartment buildings than in the units (.. and the study observed that high pollen counts on those days may have exacerbated the perception of the impact of mold).

This is why mold sampling, especially of airborne spores, is not usually helpful in real estate transactions or rental property compliance. The U.S. Environmental Protection Agency has set no federal limits or thresholds for mold spores in indoor air, and there are no federal standards for acceptable types or quantities of mold.

Significantly, the CDC does not recommend mold testing, and for good reason.

If You Can See or Smell It, Remove It

In most real world scenarios, if visible mold growth is present, testing is redundant. You already have all the information you need: mold is present, and it may be cleaned up. Whether it’s Aspergillus, Cladosporium, or the infamous Stachybotrys chartarum, the remediation approach is the same.

Maryland’s new mold law reflects this scientific and regulatory consensus. It focuses not on lab analysis or complex fungal taxonomy, but on cleaning up reported mold and addressing the moisture problems that cause it. The standard might be: if you see mold or smell musty odors, investigate the moisture source and take corrective action.

When Sampling May Be Useful

That said, surface sampling may have a role in specific, limited situations. For example:

  • Post remediation verification: Surface samples can help confirm whether a previously contaminated area has been adequately cleaned.
  • Litigation or insurance defense: In some cases, sampling may help demonstrate due diligence or provide documentation in a contested claim.
  • High risk tenants: In properties housing tenants with significant mold sensitivities or immune compromise, sampling may support risk management strategies.

But again, these are edge cases, not general best practices for most rental properties.

Mold’s Health Effects may be Real, But Vary Widely

Health effects from mold exposure can range from no symptoms at all to allergic reactions or infections. The 2004 Institute of Medicine report linked indoor mold exposure to respiratory symptoms, asthma aggravation, and hypersensitivity pneumonitis. The World Health Organization further reinforced this in its 2009 Indoor Air Quality Guidelines.

However, health reactions are highly individual. Mold is not a human health hazard. The CDC has likened mold spores to pollen. No sampling method can predict who will become sick or what type of mold might trigger symptoms. The best course remains simple: eliminate the mold and fix the moisture problem.

Legal & Practical Implications for Landlords

While SB 856 does not mandate testing, it does require landlords to address mold reports promptly. This new statutory duty significantly raises the stakes for landlords and property managers. Mold may well grow into fertile ground for tenant complaints and personal injury lawsuits, and now that mold remediation is becoming a regulatory obligation, failure to act could mean regulatory penalties in addition to private liability.

To mitigate this risk, landlords should:

  • Update lease agreements to include mold disclosure and tenant responsibility provisions.
  • Perform regular inspections to identify and address moisture issues before mold grows.
  • Educate policy making public officials about fungal growth and the limitations of possible government regulation.
  • Create a mold response protocol in the absence of sampling requirements.

The Role of the Internet & Public Education

One overlooked aspect of managing mold risk is tenant education, and the Internet is a powerful tool in that effort. Tenants often search online before submitting maintenance requests or taking legal action. Providing tenants with accurate information, perhaps even linking to resources like the CDC’s Mold webpage or the EPA’s Mold Guide, can help set expectations and reduce misunderstandings. SB 856 requires a new Maryland public information website, and stakeholders should participate in the development process.

Artificial intelligence documentation, including timestamped photos, repair logs, and tenant communication records, also serves as critical evidence should a dispute arise, yet another example of why landlords must embrace in the cloud recordkeeping in this AI age.

Final Thoughts

Mold testing is not the magic bullet some claim it is. Maryland’s new law appropriately prioritizes action over analysis, cleanup over classification. However, many question the efficacy, if not the wisdom, of Maryland trying to be the first state to regulate mold in real estate. For landlords, the new regulatory regime under SB 856 requires the immediate adoption of practical, preventive, and legally sound mold practices.

Remember, the goal is not to count spores; it should be to make buildings safe and healthy for those who occupy them.

We’ve blogged before about Maryland’s new mold regulation in Maryland is About to Regulate Mold: But is the Cart Before the Horse?, and we will continue to monitor the implementation of SB 856 as regulations are developed. If you have specific concerns about mold in your property or real estate transaction, we are here to help.

Energy Star: A Quiet Exit and a Bright Future Beyond Government

By Stuart Kaplow on Posted in Codes and Regulations, Energy, Federal

The FY 2026 President’s Budget delivers a clear message, Energy Star, as a federal program, is on its way out. Zero dollars are appropriated for the once innovative joint EPA and Department of Energy initiative, and the EPA’s June Budget in Brief confirms what many had quietly predicted, Energy Star is all but certain to be eliminated.

Today, that federal program has reached its inflection point. The EPA is undergoing a second wave of voluntary resignation offers, and after a May 5, 2025, staff meeting where the director of the Office of Atmospheric Protection informed employees that the office and its associated programs, including Energy Star, would be eliminated, key Energy Star staff reportedly accepted buyouts. With over a 54% reduction in funding and shrinking staff, the agency is no longer positioned to sustain the program.

And yet, the larger story isn’t one of loss, it’s one of opportunity.

The Creation Story

Created in 1992 under President George H.W. Bush, Energy Star was a ‘voluntary’ labeling program conceived to reduce power consumption and promote energy efficient products, the first of which were labels for computers and their peripherals. In 1995 the program was significantly expanded, introducing labels for residential heating and cooling equipment.

Since then, the program transmogrified into a vast government bureaucracy that last year certified over 50,000 products, not to mention swelling into a civil service scoring residential and commercial buildings and more. And most objectionable to many is that the voluntary program has been perverted into a ‘mandatory’ reporting greenhouse gas emission tool in jurisdictions from Maryland to Denver, utilizing Energy Star’s Portfolio Manager.

The Rest of the Story

But the rest of the story is that EPA Administrator Lee Zeldin last week told Congress that Energy Star could be privatized. “This program is an example of one that can be run outside of the government,” Zeldin said at the hearing of the House Energy and Commerce Environment Subcommittee in response to questions from Rep. Darren Soto (D-Fla).

In recent days, Zeldin added, “multiple entities” have reached out to EPA “because they want to take over Energy Star, which is a program that requires a big staff, a big taxpayer-funded staff, and a whole lot of tax dollars.”

Of note, Energy Star was proposed to be sold to a private entity during Trump 45, but only the appliance labelling program was considered saleable, not Portfolio Manager.

Not a Proper Government Function

A just published study by the Competitive Enterprise Institute, “Modernizing the EPA”, articulates clearly that the Energy Star program assumes,

“ .. the federal government needs to meddle in the marketplace by providing its seal of approval on what it deems to be environmentally satisfactory products. If consumers demand certain information, then businesses will respond by disseminating this information to them. If there is a need to create a labeling program to ensure credibility and consumer confidence, then private certification organizations should play such a role.”

The efficacy of focusing on energy costs at time of retail purchase but not at time of design of a product or time of use has been questioned, including by the Cato Institute, “.. the Energy Star label, which only provides a binary signal about the most energy efficient products in the marketplace, is a very coarse piece of energy information that may crowd out efforts to compute more accurate energy operating costs.” Today, over 76% of U.S. households have smart electric meters (that have nothing to do with Energy Star).

Issues of energy efficiency are not lost on the American populous and recent executive orders by the Trump administration rolling back water pressure standards on showerheads, faucets, dishwashers, toilets, and washing machines are incredibly popular with the public.

The Energy Star program has faced controversy and scrutiny over its lack of transparency and vulnerability to fraud. A GAO undercover investigation, some years ago, obtained Energy Star certifications for bogus products, including a gas powered alarm clock.

Misguidedly, more than 1,000 trade associations, environmental groups, and others recently sent a letter to EPA urging support for the Energy Star program. The letter ignores the prospect that the program could continue outside of government, as better owned and operated in the private sector. Operators of LEED, Fitwel, and the WELL Building Standard have led this opposition, including complaining that a shut down would cause them to have to revise their rating systems, but they are just the type of private organizations that could run Energy Star.

Making it Mandatory was the Death Knell

The push to save Energy Star by the environmental industrial complex sidesteps the query of ‘what is a legitimate function of government.’ But the death knell for Energy Star may have been the shift from the original aim of “power saving” to now greenhouse gas emission reduction, and in recent years that state and local governments have overstepped from what was a voluntary program to being as the tool for reporting in BEPS and other climate laws that are preempted by federal statute because they concern the energy use of appliances covered by the federal Energy Policy and Conservation Act and are therefore void and unenforceable. Separately, the U.S. Justice Department has warned local and state regulators that it will take legal action against locals for wrongly enacting measures “aimed to phase out natural gas furnaces and water heaters through measures such as setting zero-emission sales targets and imposing fees on new gas appliances.”

To be clear, the Trump administration’s fiscal year 2026 budget proposes eliminating the EPA’s Atmospheric Protection Program, the program under which Energy Star operates.

Backup for the Future

Our advice to clients and friends is to back up your Energy Star data now! There are private companies already vying to become the private sector default for energy benchmarking, which will do that for free.

The reality is while once innovative, the Energy Star program is today a prime example of a government function that the private sector is not only capable of replicating, but is, in many ways, already doing better.

While the future of Energy Star remains to be seen, hopefully, Congress will not let political science prevail over engineering. The shift to a private benchmarking ecosystem aligns with broader trends toward market solutions and innovation, including the use of artificial intelligence. Rather than mourn the passing of a more than 30 year old government program, this is an opportunity to embrace better tools, greater flexibility, and a more competitive market for energy efficiency.

There is no doubt that Energy Star has done good; however, rather than lament a program that is a prototypical example of government doing something that is not a proper function of government, and that the private sector will do better, embrace privatization that will be a leap forward into a more dynamic, efficient, and innovation rich future.

_________________________

Join us for the next in our “carbon based life form” webinar series, “Maryland BEPS Update for Building Owners” this Tuesday, June 10 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Congress Blocks California’s Gasoline Car Ban: A Legal and Policy Analysis

By Stuart Kaplow on Posted in Climate Change, Codes and Regulations, Federal

The Senate has approved three Congressional Review Act resolutions initiated in the House of Representatives that overturn Environmental Protection Agency waivers, which had effectively imposed a de facto ban on the future sale of gasoline powered cars in California and 17 states, as well as Washington, DC.

Congressional disapproval of California’s electric vehicle mandates is another step toward ending the electric vehicle mandate on all Americans and now awaits President Trump’s signature.

Background: California’s Emissions Standards and EPA Waivers

Under Section 209 of the Clean Air Act, California has, since 1968, been granted waivers by the EPA to implement vehicle emissions standards more rigorous than federal requirements, citing “compelling and extraordinary circumstances” related to air quality. In December 2024, the Biden administration’s EPA granted such waivers, allowing California to proceed with its Advanced Clean Cars II program, aiming to phase out new internal combustion engine vehicle sales by 2035. Several states, including Maryland and Colorado, adopted the same California standards, collectively influencing a significant portion of the U.S. auto market.

The Joint Resolution

The resolution is short and straightforward:

“That Congress disapproves the rule submitted by the Environmental Protection Agency relating to “California State Motor Vehicle and Engine Pollution Control Standards; Advanced Clean Cars II; Waiver of Preemption; Notice of Decision” (90 Fed. Reg. 642 (January 6, 2025)), and such rule shall have no force or effect.”

Congressional Review Act and Legal Controversy

The CRA enables Congress to overturn federal regulations within a specific timeframe. However, its application to these EPA waivers has been contentious. Both the Government Accountability Office and the Senate Parliamentarian opined that the EPA waivers do not constitute “rules” under the CRA and thus are not subject to its provisions.

Interestingly, to mitigate risk of judicial redress based on the Senate’s Parliamentarian’s interpretation, the Senate  set up an elaborate series of procedural votes to allow the Senate to settle the question of what qualifies under the CRA; an action that is typically referred to as the “nuclear option.” Historically used to avoid a filibuster, the nuclear option allows the majority party to use a simple majority vote to overturn a point of order and thus avoid existing procedural constraints. Thus, Republicans avoided a Senate floor confrontation over the Parliamentarian’s interpretation of the CRA by sending the question about what qualifies under the CRA back to the full Senate.

As we blogged about on February 23, 2025, Lee Zeldin, President Trump’s head of the EPA, requested a review of the rule under the CRA. Shortly thereafter, the House voted 246-164 to advance the resolution (H.J.Res.88). The vote largely followed party lines, though 35 Democrats joined Republicans in support of the measure. The Senate then advanced the resolution to President Trump for his signature in a 51-44 vote, also along party lines.

In addition to H.J.Res.88, the Senate passed two related resolutions, H.J.Res 87 and H.J. Res 89, aimed at stopping California from enforcing rules that promote zero emission truck sales and implementing stricter nitrogen oxide limits.

Repeal of Regulations

These three CRAs are among 74 resolutions Republicans in both chambers have introduced that would overturn Biden era climate rules. President Trump has signed seven CRA resolutions into law. Once a CRA resolution is enacted, a federal agency cannot propose a similar rule in the future.

Implications for State Authority and Environmental Policy

The Senate’s action represents a significant shift in the balance of federal and state powers concerning environmental regulation.  This move could set a precedent affecting other areas where states have traditionally exercised autonomy under federal environmental laws.

The implications are huge. Consider, by way of example, a state like Maryland that has enacted statutes that the entire state will be greenhouse gas emission free by 2045, largely on the back of the California gasoline powered car ban; the provisions of that state law will now have no force or effect.

Stakeholders Respond

Proponents of the resolutions argue that California’s mandates could lead to increased vehicle costs and limit consumer choice nationwide. Industry groups, including the National Automobile Dealers Association, supported the Congressional action, citing concerns over market fragmentation and regulatory burdens.

Opponents, including California officials and global warming advocates, contend that the revocation undermines efforts to combat climate change and infringes upon states’ rights. California Attorney General Rob Bonta said the state “intend[s] to sue the Trump administration,” again.

But, significantly and dispositively, the CRA expressly bars judicial review of resolutions.

Conclusion

The Congressional disapproval of California’s EPA waivers marks a pivotal moment in U.S. environmental and energy policy, highlighting tensions between federal authority and initiatives led by a few states. Most expect the legal challenges anticipated in response to this action to fail, leaving this CRA saga to shape the future of environmental regulation and state federal relations in the years to come.

While Otto von Bismarck almost certainly never uttered the words, this may be a good example of, “Laws are like sausages. It is best not to see them being made.”

_________________________

Join us for the next in our “carbon based life form” webinar series, “Maryland BEPS Update for Building Owners” on Tuesday, June 10 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

EPA Will Keep Current Limits for “Forever Chemicals” in Drinking Water

By Stuart Kaplow on Posted in Codes and Regulations, Environmental, Federal

On May 14, 2025, Lee Zeldin, the U.S. Environmental Protection Agency Administrator, announced the agency will retain its current National Primary Drinking Water Regulations for two of the most studied per and polyfluoroalkyl substances (PFAS): perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS). With this announcement, the agency provided a roadmap as to its intention to continue protecting public health from these so called “forever chemicals” while introducing new regulatory flexibility aimed at the compliance burden for drinking water systems, particularly small and rural water systems.

While some have mischaracterized this as a roll back from what the Biden Administration had announced, most in the environmental industrial complex have commended the agency for balancing science based health protections with regulatory pragmatism. The EPA’s decision reflects a reprioritized agency commitment to safeguarding drinking water, honoring the rule of law, and targeting the actual sources of PFAS contamination (.. a dramatically different approach to the environment than the prior Administration).

It is important to appreciate that preliminary sampling by EPA found that average PFOA concentrations exceeded the 4 ppt Biden Administration standard in 6% of the water systems and PFOS exceeded the standard in 7.2% of the systems. Significantly, none of the PFAS standards EPA plans to withdraw were exceeded in more than 0.6% of systems.

Those statistics are significant against the backdrop of the peer reviewed 2020 study cited approvingly by the EPA that describes 99.7% of Americans having detectable PFAS in their blood! So, when the horses have left the barn, new regulations after the fact may not only be costly but also ineffective.

Understanding the Legal Landscape

PFAS are a class of synthetic chemicals that have been widely used for decades in industrial applications and consumer products due to their resistance to heat, water, and oil. However, these same properties render them highly persistent in the environment and the human body. Mounting scientific evidence has linked PFOA and PFOS to adverse health effects, prompting regulatory scrutiny.

The Safe Drinking Water Act vests EPA with the authority to establish Maximum Contaminant Levels for contaminants in public water systems. As we blogged about at the time, in April 2024, the agency finalized legally enforceable MCLs for PFOA and PFOS and set a compliance deadline for public water systems by 2029. Administrator Zeldin’s May 2025 announcement confirms those limits will remain unchanged, for now, while additional flexibility will be offered through future rulemaking.

For the cynical, this announcement can be seen as the EPA response to American Water Works Association, et al. v. EPA, a lawsuit challenging the Biden National Primary Drinking Water Regulation for PFAS, arguing that the agency did not follow the required process of the Safe Drinking Water Act in developing the regulation. The case is currently ongoing, with the court granting additional time for EPA to evaluate MCLs for PFAS and the new rules announced will cure the alleged legal defect in the process of the 2024 rules.

Key Takeaways from the EPA’s Announcement

  1. Current Limits for PFOA and PFOS Remain in Place
    EPA is not revising the MCLs for PFOA and PFOS established in 2024. These standards are based on robust scientific risk assessments and remain legally enforceable under the SDWA.
  2. Extended Compliance Timelines
    Acknowledging infrastructure and funding challenges, EPA will propose extending the compliance deadline from 2029 to 2031. This two year extension offers critical breathing room for utilities and private businesses developing treatment plans or undertaking capital projects.
  3. Introduction of PFAS OUTreach Initiative
    EPA will roll out a new PFAS OUT program to assist water systems, especially in underserved communities, with education, technical assistance, and access to federal funding. But expect a cessation of federal funding to states that get ahead of or otherwise out in front of this scenario. This initiative aims to ensure no community is left behind as the regulatory framework evolves.
  4. A Focus on Regulatory Integrity and Legal Process
    The agency will reconsider the regulatory determinations for additional PFAS compounds (PFHxS, PFNA, HFPO-DA/GenX, and PFBS) that were initially bundled under a Hazard Index. This step ensures that future regulations are based on individualized scientific assessments and are legally defensible under the SDWA.
  5. Polluter Accountability
    Importantly, the EPA reaffirms that water systems are passive receivers of contamination and should not bear the financial burden of cleanup. The agency pledges to use enforcement tools, including effluent limitation guidelines and coordination with the Department of Justice, to hold polluters accountable.

Implications for Water Systems and Industry

From a legal and operational standpoint, this announcement delivers a significant win for public water systems and private owners of water systems. By providing additional time for compliance and recognizing the distinct challenges faced by smaller utilities, EPA is demonstrating a regulatory approach that is both firm and fair.

For industry stakeholders and polluters, however, the message is clear: the regulatory noose is tightening. With enforcement mechanisms in place and growing public demand for clean water, companies must take proactive measures to address legacy and ongoing PFAS discharges. Legal counsel should review client operations for potential exposure under the Clean Water Act, RCRA, CERCLA (pending final PFAS designation), and state tort regimes.

Looking Ahead

As environmental regulations around PFAS continue to evolve, water systems, industries, and municipalities must remain vigilant. Key next steps include:

  • Monitoring EPA’s forthcoming rulemaking this fall to extend the compliance deadline to 2031.
  • Engaging with the PFAS OUTreach Initiative for support and funding.
  • Evaluating potential liability exposure under federal and state PFAS and other statutes.
  • Participating with states’ rulemaking to make certain they do not get ahead of the science or the new federal 2031 compliance deadline.

The regulatory terrain for PFAS is dynamic, complex, and politically charged. With bipartisan support and a growing body of scientific evidence, PFAS regulation is coming (.. and it should be). But with clarity, flexibility, and stakeholder engagement, the EPA is signaling that progress can be made without imposing unreasonable burdens on water systems or the stakeholders they serve.

Conclusion

In summary, EPA’s decision to maintain the current limits for PFOA and PFOS while extending compliance deadlines represents a prudent recalibration of the agency’s regulatory approach and the concomitant efforts by states. It affirms public health protections without undermining the operational realities of water utilities. At the same time, the agency’s renewed focus on polluter accountability could lead to significant legal developments in the coming years. Stakeholders would be well advised to prepare.

_________________________

Join us for the next in our “carbon based life form” webinar series, “Maryland BEPS Update for Building Owners” on Tuesday, June 10 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Court Indefinitely Pauses SEC Climate Rule Litigation

By Stuart Kaplow on Posted in Climate Change, Federal, GHG, greenhouse gas

In a striking development with far reaching implications, the U.S. Court of Appeals for the Eighth Circuit has granted the Motion to Hold Case in Abeyance in the consolidated litigation Iowa v. U.S. Securities and Exchange Commission, the lead challenge to the SEC’s 2024 climate disclosure rules. The court’s April 24, 2025, order halts further proceedings indefinitely, pending further notice, and signals a dramatic shift in the landscape of environmental regulation in the United States.

As an attorney who closely follows the intersection of environmental public policy and sustainable business practices, this moment represents more than just a litigation delay, it is a bellwether for the future of environmental regulation and a telling sign of the current post progressive political climate.

Moreover, this is an example of how difficult it is to eliminate a federal regulation.

The Background: SEC’s Controversial Climate Disclosure Rules

The Securities and Exchange Commission’s 2024 climate disclosure rules required public companies to report climate related financial risks, including Scope 1 (direct) and Scope 2 (indirect, from energy purchases) greenhouse gas emissions, and, in many instances, Scope 3 emissions (from upstream and downstream activities in their value chains).

The rules were hailed by climate change advocates as long overdue measures, but were branded by business as regulatory overreach, particularly burdensome to smaller public companies and those reliant on complex global supply chains. Litigation quickly followed, culminating in the Iowa v. SEC action joined by more than a dozen states.

The SEC Retreats

On February 11, 2025, SEC Acting Chair Mark Uyeda issued a statement saying the rules were “.. deeply flawed and could inflict significant harm on the capital markets and our economy.” We blogged about that he then “.. directed the Commission staff to notify the Court of the changed circumstances and request that the Court not schedule the case for argument to provide time for the Commission to deliberate and determine the appropriate next steps in these cases.”

On March 27, 2025, in a pivotal reversal, the SEC voted to end its defense of the rules. SEC staff sent a letter to the Eighth Circuit stating that the Commission withdraws its defense of the rules and that Commission counsel are no longer authorized to advance the arguments in the brief the Commission had filed. However, the rules were not formally rescinded, nor was the litigation terminated, leaving the fate of the challenged regulations in limbo.

Then, on April 4, 2025, a group of 18 intervening states and the District of Columbia filed a motion requesting the Eighth Circuit to hold the case in abeyance. The state of Iowa, representing the original petitioners challenging the rule, opposed the motion on April 14.

Ten days later, on April 24, the court issued its order: “The motion of the intervenor States to hold these cases in abeyance is granted. The cases will be held in abeyance pending further order of the court. The Securities and Exchange Commission is directed to file within 90 days a status report advising whether the Commission intends to review or reconsider the rules at issue in this case ..”

In short, the rules live on, for now, but the SEC must declare its next steps by July 23, 2025: “If the Commission has determined to take no action, then the status report should address whether the Commission will adhere to the rules if the petitions for review are denied and, if not, why the Commission will not review or reconsider the rules at this time.”

Legal and Policy Implications of the Court’s Order

The decision to pause the litigation places the climate disclosure rule in a regulatory state of suspended animation. The Eighth Circuit did not rule on the merits; it simply halted proceedings, giving the SEC an opportunity to reconsider its position and perhaps, to begin a formal rollback of the rule via the Administrative Procedure Act.

This pause may provide short to mid term relief for regulated companies, but admittedly leaves some prolonged uncertainty:

  • The 2024 rules technically remain on the books.
  • The SEC’s commitment to enforcement is ambiguous and likely variable depending on future political leadership.
  • Future administrations could revive or revise the rules, restarting both the regulatory process and legal challenges.

What Public Companies Should Be Doing Now

Despite the pause, public companies should not interpret this as a green light to ignore climate risks in securities filings. Key points to keep in mind:

  • The SEC’s 2010 Guidance on Climate Change Disclosure remains in force. We regularly remind clients and others that this guidance emphasizes the materiality of climate related risks under existing federal securities law.
  • Acting SEC Chairman Mark T. Uyeda made clear that the Commission will continue to evaluate climate disclosures through a “materiality” lens, meaning any climate related information that a reasonable investor would consider significant must still be disclosed.
  • The SEC is unlikely to issue detailed climate related comment letters, as it did under the Biden Administration, but will remain vigilant for material misstatements and omissions, potentially triggering enforcement actions under existing anti fraud rules.
  • International and state level disclosure obligations still exist, regardless of federal action (.. although implementation dates are being pushed in many instances). For example:
    • California’s SB-253 and SB-261 impose climate risk disclosure and GHG emissions reporting on many large companies doing business in the state.
    • Maryland’s BEPS impose not only disclosure requirements but also mandates that large buildings be net zero by 2040 (causing the state to be an outlier in GHG matters).
    • The EU’s Corporate Sustainability Reporting Directive mandates climate disclosures for many multinationals with operations in Europe.

Companies that ignore climate disclosure obligations entirely do so at their peril. And this is an opportunity for businesses that take geographically specific, overly burdensome regulations into account to thrive.

Shareholder Pressure Is Waning but Not Gone

Interestingly, shareholder activism appears to be declining sharply. In 2025, investors filed 92 environmental and social proposals, down from 206 in the same period in 2024, a >50% drop year over year. Among them, 10 “anti-ESG” proposals were submitted, reflecting a more contentious environment for corporate sustainability discussions.

However, this does not signal a wholesale retreat from environmental concerns. Rather, it reflects growing polarization and shifting strategies on both sides of the ecological debate. The litigation pause may further chill environmental activism in the short term.

Conclusion: The Litigation Is Paused, But the Climate Change Conversation Isn’t

The Eighth Circuit’s decision to indefinitely pause Iowa v. SEC does not mark the end of the climate disclosure rule. It simply delays the inevitable reckoning, whether that be through formal rule rescission, judicial ruling, or revival under a future administration.

For businesses, this is not an opportunity to disengage. Instead, it is an intermission that demands continued attention, preparation, and legal risk management. Climate related risks are not going away, and the scrutiny over how they are disclosed will persist, whether under SEC regulations, state law, or shareholder pressure.

Companies should continue to:

  • Evaluate climate risks under existing materiality standards.
  • Implement and test sustainability related disclosure controls.
  • Monitor international and state level regulatory developments.
  • Prepare to pivot, as the rules, and the political winds, inevitably change.

All of which supports the proposition that it is hard to kill a federal regulation, even a bad regulation like the rules here. We will continue to blog about developments in this case and advise clients as the July 23, 2025, SEC status report deadline approaches.

_________________________

Join us for the next in our “carbon based life form” webinar series, “Maryland BEPS Update for Building Owners” on Tuesday, June 10 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Maryland is About to Regulate Mold: But is the Cart Before the Horse?

By Stuart Kaplow on Posted in Codes and Regulations, Environmental, State

In a sweeping act moving into a new regulatory space, “where no [hu]man has gone before,” aimed at addressing indoor mold, the Maryland General Assembly passed Senate Bill 856 during the just concluded 2025 legislative session.

This legislation, not yet signed by the governor, sets Maryland on a path to becoming maybe the only state in the nation to enact comprehensive mold regulation in rental properties, both residential and commercial. However, while the policy motivations may be commendable, a closer analysis reveals a fundamental tension: Maryland seeks to regulate mold without any scientifically established or legally defined standard for acceptable indoor mold exposure.

As an attorney who has over four decades advised clients in real estate and environmental matters, including claims involving mold and mildew, I offer a perspective on this new law.

What the Law Requires

Senate Bill 856, the Maryland Tenant Mold Protection Act, charges the Maryland Department of the Environment, in collaboration with the Maryland Department of Health, Department of Housing and Community Development, Department of Labor, and Department of General Services, with several new responsibilities. These include:

  • Developing a centralized website with information on mold and dampness.
  • Creating an informational pamphlet for tenants on mold risks and prevention, or alternatively distributing the EPA’s existing “Brief Guide to Mold, Moisture, and Your Home.”
  • Mandating landlords to perform mold assessments within 15 days of written notification from a tenant or enforcement agency.
  • Requiring remediation within 45 days (or within a reasonable timeframe, if not feasible sooner).
  • Establishing regulatory standards by June 1, 2027, for mold assessment, mold air sampling, surface sampling, and remediation practices.
  • Imposing ongoing obligations on landlords, including ensuring proper ventilation, maintaining low indoor relative humidity, and complying with all applicable building and housing codes.

The Missing Foundation: A Rational Health Based Standard

What is most striking, perhaps troubling, from a legal and regulatory perspective is this: Neither the U.S. Environmental Protection Agency nor any Maryland state agency has promulgated enforceable standards for acceptable indoor mold spore selections or concentrations.

This is not a trivial omission. The absence of a scientifically defined threshold for what constitutes “hazardous” mold makes the entire regulatory framework vulnerable to challenge. Without a rational basis grounded in objective health data or enforceable scientific criteria, enforcement actions under this law risk being more than arbitrary and capricious.

In environmental law, especially where human health and property interests intersect, clarity and predictability are of key import. There are more than 100,000 species of mold, within the larger more than 2.5 million species of fungi, most of which have not yet been scientifically characterized. And most mold is not visible to the human eye. What type of mold is dangerous, and at what concentration? How are landlords to know whether they are in compliance?

Put plainly, this statute moves forward in the absence of any guidance on what constitutes a violation, apparently leaving it to the several Maryland administrative agencies to take their best guess at the science and the law.

A Regulatory Burden Without Clear Standards

The law imposes significant duties and potential liabilities on building owners:

  • They must assess and remediate mold, likely at considerable cost.
  • They must provide tenants with information and maintain environmental controls (e.g., humidity) that are technically vague and difficult to enforce in buildings that do not have mechanical systems for those purposes and are operated by the tenants.
  • They must do so under the looming threat of being deemed noncompliant with a future regulation that does not yet exist.

In litigation, the lack of measurable standards invites uncertainty. How does a court determine whether a landlord acted reasonably if there is no defined dangerous mold? Will remediation be required for all fungi, or only for certain species or concentrations? Is a landlord liable for tenant health issues arising from naturally occurring molds, or only those attributable to building conditions?

These ambiguities create a regulatory minefield for landlords and ultimately will frustrate the very tenants the law seeks to protect. Note, most property insurance policies exclude coverage for mold and fungi.

Impacts on Small Businesses and Local Governments

The fiscal and logistical impacts are real:

  • Local governments that manage public housing units must comply with all provisions applicable to landlords, which could drive up costs considerably.
  • Small landlords, many of whom operate with thin margins, may face substantial outlays for assessments, mitigation, and property upgrades.
  • The bill fiscal note acknowledges that the financial burden will be “significant,” yet provides no direct funding or tax relief to soften the blow.

These costs will be passed on to residential tenants, undercutting the policy goal of safe and affordable housing, not to mention the cost to commercial real estate.

The Legal Risk of Acting Without Scientific Consensus

The Maryland Workgroup on Mold Standards and Remediation, created under Chapter 347 of 2023, recommended several best practices. But even that workgroup acknowledged that there is no universal or enforceable indoor air quality threshold for mold. The EPA, while offering guidance, similarly avoids issuing numeric standards. This reflects the broader scientific and medical uncertainty about the precise relationship between mold exposure and human health outcomes. In light of that lack of science, is Maryland’s legislative action premature?

There is a legitimate concern expressed by attorneys that this law attempts to enforce standards that do not yet exist or, worse, that cannot be reliably established due to the variability of mold species, environmental conditions, and individual health responses.

Conclusion: Good Intentions, Flawed Execution

Maryland Senate Bill 856 represents a well meaning effort to address indoor environmental hazards, a space that has long gone unregulated (.. while the State has focused its environmental efforts on the Chesapeake Bay and more recently on greenhouse gas emissions). However, many environmental attorneys have expressed that sound lawmaking demands more than good intentions, it requires a rational basis, scientific clarity, and enforceable standards.

Until Maryland or the federal government defines what constitutes unacceptable mold species and levels, regulations that mandate remediation and impose liability for ambiguous conditions will do more harm than good.

The MDE has until June 1, 2027, to finalize mold standards, including clarifying what of this law applies to commercial as well as residential rentals. This is a heavy lift where the science around fungi does not yet exist. One hopes that in the intervening time, policymakers will ensure that the regulatory framework is grounded in sound science, clear thresholds, and practical enforcement mechanisms.

_________________________

Join us for the next in our “carbon based life form” webinar series, “Maryland BEPS Update for Building Owners” on Tuesday, June 10 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

BEPS Redux: The Most Far Reaching Environmental Legislation of the 2025 Maryland General Assembly

By Stuart Kaplow on Posted in Codes and Regulations, GHG, greenhouse gas, State

After this was posted, on May 20, 2025, House Bill 49 became law without the Governor’s signature. This may be the first instance in modern times that a Maryland governor did not sign an enacted bill introduced at the request of that governor.

There is little doubt that House Bill 49, enacted on the final day of the 2025 Maryland General Assembly session, stands as the most consequential environmental legislation to emerge this year, perhaps the most impactful since the Climate Solutions Now Act of 2022. This sweeping governor’s bill is a sea change in how Maryland regulates greenhouse gas emissions associated with buildings, and its effects will be felt in both public and private buildings across the state.

At its core, HB 49 refines and expands the State’s Building Energy Performance Standards (BEPS), the regulatory framework through which the Maryland Department of the Environment will enforce GHG emission reductions for large buildings, including condominium regimes. We have previously blogged about the statute and the Maryland 2024 BEPS Regulations: A Critical Analysis of Legal and Economic Risks.

Beyond administrative adjustments, this bill, as heavily amended through the last days of the session, lays the groundwork for a government mandated transformation of Maryland’s built environment to net zero GHG emissions by 2040.

The Legal Context: Building on the Climate Solutions Now Act

HB 49 is best understood as an ambitious evolution of the CSNA, which accelerated Maryland’s controversial climate agenda by mandating a 60% reduction in GHG emissions by 2031 (from 2006 levels) and net zero emissions for covered buildings by 2040. Among the key compliance tools in CSNA is BEPS, a regulatory mechanism for mandating GHG reductions in existing and newly constructed large buildings.

BEPS focuses on two primary mandates:

1. A 20% reduction in direct GHG emissions for covered buildings by 2030, relative to 2025 baselines.
2. Net zero direct emissions from covered buildings by 2040.

To support those goals, CSNA required building owners to begin reporting benchmarking data in 2025, but MDE’s original attempt to finalize implementing regulations faltered. Despite earlier announced dates, MDE issued a compliance advisory that it “intends to treat all initial benchmarking reports submitted by September 1, 2025, as timely.” However, the bill fails to take into account that the only MDE approved tool for benchmarking is Energy Star an EPA program that is all but certainly going to be cancelled. With that glaring omission, HB 49 course corrects regulatory gaps and adds new clarity and enforcement tools.

Key Provisions of HB 49

1. Expanded Regulatory Mandate for MDE

HB 49 directs MDE to adopt regulations that are significantly more comprehensive than before. Specifically, the bill requires:

• Additional special provisions, exemptions, and exceptions to account for real-world building conditions.
• Inclusion of study of Energy Use Intensity (EUI) targets, EUI “mandates” were amended out of the bill, also with study of alternative compliance pathways allowing fees in lieu of meeting these targets.
• Flexibility through waivers for owners who demonstrate economic or technical infeasibility.
• Annual reporting fees to fund administrative costs.
• Delayed enforcement ACP penalties cannot be collected before 2032.

This regulatory expansion reflects a legislative recognition that the BEPS program must balance climate change ambition with operational and financial realities, especially for diverse building types and ownership structures.

2. Refined Definition of “Covered Building”

Previously, any commercial or multifamily building over 35,000 square feet (excluding the garages) was a “covered building,” with few exemptions. HB 49 expands and clarifies those exemptions, most notably by:

• Excluding hospitals.
• Excluding life science buildings.
• Refining exemptions for manufacturing buildings.
• Recognizing secure federal facilities (e.g., SCIFs) and exempting them from EUI requirements.

These changes demonstrate a more nuanced legislative approach, targeting buildings that can reasonably contribute to emissions reductions while protecting those where compliance would be illogical or even hazardous or contrary to national security.

3. On Site Renewable Now Counts

The bill requires MDE to include in the new regulations:

• Crediting on site renewable energy toward EUI targets.
• Crediting the GHG reduction impact of biomethane.

4. Local Government Empowerment and Preemption Protection

In a notable but limited nod to local autonomy, HB 49 permits counties to administer their own BEPS programs if they are at least as stringent as the state program and adopted before March 1, 2025.

Montgomery County has already blazed this trail with its own local BEPS ordinance for buildings ≥25,000 square feet, and while different from the State when it regulates EUI and not GHG emissions, as a practical matter will all but certainly be the only local program that will allow covered building in that jurisdiction to not have to comply with the State BEPS.

5. Administrative and Fiscal Considerations

MDE is now authorized to collect a $100 fee to review annual benchmarking reports submitted by building owners.

MDE’s projections indicate that the department will need nearly $1 million in FY 2027 alone to support six new staff positions and associated overhead to administer the new BEPS regime. While annual reporting fees and waiver review charges will offset some costs, the State will likely need to supplement BEPS implementation with additional resources.

The bill’s delayed penalty collection (until 2032) provides MDE with breathing room to build capacity before full scale enforcement begins.

6. Study If All of this Should be Redesigned

And not to be lost on anyone, the final amendments to the bill provide, MDE “shall conduct an analysis of the potential costs and benefits of building energy performance standards policy options featuring direct emissions reduction requirements, energy use intensity requirements, ..” expressly including “recommendations on how to consider county owned buildings, community colleges, emergency facilities, manufacturing buildings, ..”

So, one must reasonably assume that the legislature will further alter and amend the BEPS regime prior to 2030; despite that all of this is contrary to the direction most of the rest of the country is moving toward with respect to GHG emissions.

Conclusion: BEPS is a Bloodsport

House Bill 49 (.. be certain to read this enrolled version that includes the final amendments) is not just a technical update, it is a legal and policy milestone. It recognizes that achieving Maryland’s climate goals will require not just regulatory mandates, but flexibility, innovation, and a deep partnership with the legislative branch.

By refining the BEPS framework, creating alternative compliance pathways, and ensuring fiscal mechanisms are in place to support building owners, HB 49 positions Maryland as a national leader or outlier (.. depending upon one’s perspective) in decarbonized building policy; at least until the courts rule in the several pending suits where Citizens and Businesses Join Suing Maryland to Halt BEPS or until the Federal government intervenes to halt BEPS.

Maybe most incredible is that despite U.S. EPA’s announcement it will end the Energy Star Program, including Portfolio Manager (.. the sole tool MDE has regulated must be utilized by building owners to report and reduce GHG emissions in BEPS), the legislature did not provide an alternative or otherwise correct that death knell.

As developers, property owners, environmental professionals, and legal practitioners digest this legislation, one thing is clear: the built environment is no longer a passive participant in matters of climate; in Maryland, real estate is now front and center.

For building owners and operators seeking guidance on HB 49 compliance, baseline GHG reporting, waiver preparation, or participation in the SEIF grant/loan program, legal counsel with experience in environmental matters is essential. Please feel free to reach out with any questions.

LexBlog