Ohio Environmental Law Blog : Ohio Environmental Lawyer & Attorney : Joseph Koncelik : Frantz Ward Law Firm : Environmental Regulation, Land Use, Compliance : Cleveland, Ohio

With the launch of Leed Version 3, the U.S. Green Building Council (USGBC) has increased the rigor of certifications and even issued the threat of "decertification"- losing your building's green status.  USGBC has decided to throw only a pebble into the pond on this round- its still pretty hard to lose your building's LEED status. However, Leed v3 foreshadows a time when serious work will continue beyond the certification stage.

MPRs AND DECERTIFICATION

Right now USGBC only ties the possibility of "decertification" to a fairly innocuous list of Minimum Program Requirements ("MPRs").   After your building attains LEED certification it can lose that status if it fails to adhere to any one of the following MPRs (additional commentary based upon LEED website):

1. Compliance with environmental laws- New Construction..only up through certification. Existing building..its an on-going requirement;
2. Project must be a complete, permanent building or space- No movable buildings please..and it must the entire building;
3. Project must utilize a reasonable site boundary-  No gerrymandering please...you cannot shape your project in weird ways just so the project can qualify for points or meet a pre-requisite;
4. Building must comply with minimum floor area requirements- Must be a project involving at least 1,000 square feet.  No toll booths or kiosks;
5. Building must comply with minimum occupancy rates Must server at least one full-time equivalent employee...who the heck is worrying about certifying vacant buildings?;
6. Must share whole-building energy and water usage data- Share this information for 5 years and make it accessible through the web.  However, its not a performance standard; and
7. Project must comply with minimum building area to site area ratio- gross floor area must be no less than 2% of project boundary.  Who is certifying tiny buildings on large parcels?

Number six- the requirement to share energy and water usage data- was the most controversial, setting off some wild speculation.  Some worried that if their building failed to meet the projected water or energy usage projections it could lose its LEED certification.  This appears not to be the case.  

Preston Koerner wrote a good post discussing decertification on his blog JETSON Green.  Preston contacted the USGBC regarding the possibility of decertification based upon under performance on water and energy usage projections.  USGBC indicated that they just want people to share the information, decertification for failing to meet energy or water usage projections won't happen under LEED V3.

ENERGY AND WATER USAGE CONTROVERSY

There has been controversy over whether LEED certified buildings actually perform better than standard construction.  Recently, a study sponsored by USGBC found that on average LEED certified New Construction buildings used 24% less energy.  However, the study also showed some buildings are performing much worse than models predicted.  As an extreme a small number are even performing worse than if they just met basic code requirements.

While the study shows LEED generally results in improved efficiencies, the study also shows certification is no guarantee on performance.  So while right now USGBC is requiring reporting of statistic, it seems inevitable that it will move toward some form of performance standards and verification.

If you are interested in the controversy surrounding decertification, Matt DeVries at Best Practices Construction Law has done the best summary of the blogosphere debate over decertification.  A lot of folks are worried about the implications of just being required to track all the data.

However, if LEED certification is truly going to become the gold standard for measuring sustainable buildings doesn't the USGBC have to start verifying environmental performance of buildings?  I think at a minimum USGBC will require on-going verification if you want LEED certification of your existing building (post-new construction). 

TECHNOLOGY OPTIONS

As the requirements to track LEED elements becomes more rigorous, technology has tried to ride to the rescue.  Houston Neal wrote a good review of various software options for tracking LEED projects.  He asked that I take a look and provide any comments.   All I can offer is that most of the software seems to assist with document management as you building a project toward submission for certification.  What about adding features to help track performance post certification? 

FINAL THOUGHTS

To me the trend appears clear...USGBC is moving away from simple certification and toward verification of greenbuilding performance claims.  In otherwords, the LEED process doesn't end when the plaque goes up on the wall.

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Here is a quick update on some of the important changes that were or were not included in the Ohio Budget (H.B. 1) that impact environmentally related issues and Ohio EPA's budget:

ERAC Deadlines-   As discussed in my previous post, the Ohio Budget included mandatory deadlines placed on ERAC for making determinations on appeals filed before the Commission.  Environmental groups wrote a strong letter to the Governor requesting a veto the ERAC deadlines.  The Governor did not veto the provision, however it appears likely the language will be tinkered with in the Budget Corrections Bill. 

Extension of Deadline for Construction after Issuance of Air PTI:  All air permits for construction and installation of new sources in the State of Ohio include a requirement that the permit expires after eighteen (18) months if construction of the source has not been completed.  An appeal of an air PTI can complicate financing efforts for projects.  Banks may not provide financing while an appeal is pending.  To address this and other issues associated with the construction deadline, the Budget Bill included new language that allows extension of that deadline for any of the following reasons (copy of amendment for exact language):

• Owner has undertaken a continuing program of installation or modification during the eighteen-month period
• Owner entered a binding contract for construction of the source within the eighteen month period
• Director of Ohio EPA issues an extension
• The air PTI is the subject of an appeal by a third party receives an automatic extension based upon the number of days the permit was under appeal
• Original permit is superseded by a subsequent air PTI

$1.25 increase in Solid Waste Tipping Fee to fund Ohio EPA:  The municipal solid waste tipping fee was increased by $1.25 a ton which raises the total fee from $3.50 a ton to $4.75 a ton. Of the increase, .25 goes to ODNR for the Soil and Water Conservation Districts. The remaining $1.00 will go to Ohio EPA to support its programs.  

The tipping fee increase was included, in part, to address a reduction in the amount of solid waste going into Ohio's landfills.  As the fee continues to increase, businesses will have a greater incentive to look for alternative ways to dispose of industrial waste other than sending it to a solid waste landfill.  One such option is beneficial use of the material.  Ohio EPA has yet to to release its second draft of the beneficial use rules, however, as costs of disposal increase interest in this option will rise.

Spending Authority Caps:  While the Legislature agreed to restore the $1.25 increase in tipping fees, it failed to remove the spending caps that were placed on Ohio EPA fee accounts in the Senate.  The practical ramification is that even though the accounts have fee revenue, Ohio EPA will be prevented from spending the revenue to support its staff and programs.  Ohio EPA intends to seek removal of the spending authority caps through the Controlling Board.  If Ohio EPA gets support from business groups it appears likely the caps will be removed and possibility of dramatic staff reductions appears unlikely.

Rejection of the Expansion of Renewable Energy Projects-  Ohio has one of the broadest definitions for what qualifies as "renewable energy source" for purposes of meeting the State's Renewable Portfolio Standard (RPS).  Efforts were rejected to expand the definition to include burning of solid waste.

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Buried in the thousand pages of the Ohio Budget Bill (H.B. 1) is an amendment that could have a major impact on hundreds of pending and future appeals of environmental decisions.  The budget bill amendment includes language placing strict deadlines for issuing decisions on environmental appeals. The deadlines could impact some very controversial permit appeals, including the Natural Resource Defense Council (NRDC) appeal of AMP Ohio's air permit for its new baseload coal-fired power plant.

By law the Environmental Review Appeals Commission (ERAC) hears and issues decisions on a multitude of actions by Ohio EPA as well as a limited number of actions by other state agencies.  The appeals heard by ERAC include:

• Ohio EPA rules
• Ohio EPA enforcement orders
• Ohio EPA permitting decisions in air, water, solid waste, hazardous waste, etc.
• Actions by the Boards of Health related to solid waste facilities
• Ohio EPA decision related to the Voluntary Action Program (brownfields)
• Orders of the State Fire Marshall relative to underground storage tanks (BUSTR)
• Water permits and orders issued by Ohio Department of Agriculture for large factory farms

At any given time ERAC will typically have hundreds of appeals pending.  Some appeals can sit before ERAC for years, but this is typically by mutual consent of the parties in the appeal.   However, its not uncommon  in complex cases for hearings to be scheduled 18 to 24 months after appeal has been filed. 

Obviously someone felt concerned that ERAC was taking too long in issuing the majority of its decisions because the Ohio Budget Bill included strict deadlines for making determinations.  Here is the language (click here for the actual H.B. 1 Budget amendment):

The commission (ERAC) shall issue a written order affirming, vacating, or modifying an action pursuant to the following schedule:

(1) For an appeal that was filed with the commission before April 15, 2008, the commission shall issue a written order not later than December 15, 2009.

(2) For all other appeals that have been filed with the commission as of October 15, 2009, the commission shall issue a written order not later than July 15, 2010.

(3) For an appeal that is filed with the commission after October 15, 2009, the commission shall issue a written order not later than twelve months after the filing of the appeal with the commission. 

The language is silent on what happens if ERAC fails to adhere to the deadlines.  If left as is the language could create a right to file an action against ERAC to compel it to issue a decision (called a mandamus action). 

I am told that the legislative intent of the language was to remove the appeal from ERAC's jurisdiction and allow the Court of Appeals to hear the appeal.  If that was indeed the intent it would appear to be unworkable given the Court of Appeals doesn't accept testimony of witnesses.   In addition, there would be no assurance a Court, with its very busy docket, would make a determination any quicker.

Regardless, the new deadlines could have a significant impact.  With so many appeals pending before ERAC, the Commission may be forced to shorten hearings, reduce discovery or take other steps to speed up the decision making process.  It is also possible the deadlines could influence ERAC's level of scrutiny of Agency actions.

Indeed, the language could impact some very controversial actions currently under appeal, including the NRDC appeal of the AMP Ohio air permit on multiple grounds including regulation of greenhouse gases. According to ERAC's docket, a hearing is scheduled to begin March 8, 2010. The original appeal was filed in early spring of 2008. Under the imposed deadlines a decision would have to be issued no later than December 15, 2009.

It is possible that the Legislature will used the Budget Correction Bill to amend the language. Given the fact that the public hasn't had an opportunity to see it or provide input we may yet see substantial revisions. 

(Photo: wallyg/everystockphoto.com)

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There has been much discussion regarding the use of Land Banks to assist in addressing the aftermath of the foreclosure crisis.  Here is an excerpt from the Cleveland Plain Dealer discussing the County's recently launched non-profit corporate land bank:

Formally launched by the county in April, the new, nonprofit land bank is the first of its kind in Ohio.It could soon turn Cleveland into the nation's biggest urban laboratory on how a declining industrial city with a comatose real estate market can downsize gracefully -- and prepare to rebound in the future. The impact on the city as a whole could be far greater than individual projects such as the proposed medical mart and revamped convention center downtown.

Ohio recently passed Senate Bill 353 which allows a two year trial period for Counties to create a separate county land reutilization corporation for purposes of acquiring abandoned and tax delinquent properties.  By allowing creation of a separate corporation, the law addresses the issue of liability- a major short-coming of Ohio's existing land banking law set forth in Ohio Revised Code 5722.  The law also allows for an expedited foreclosure process. The Federal Reserve Bank of Cleveland released an good analysis of the new legislation titled "Understanding Ohio's Land Bank Legislation."

Why create a land bank?  Obviously, thousands of abandoned properties bring down property values across the board and create blight.  Abandoned properties also present other risks. Here is a quote from a University of Michigan study of its Land Bank program:

The U.S. Fire Administration reports that over 12,000 vacant structure fires are reported each year in the U.S., which results in $73 million in property damage annually.  In addition, abandoned properties tend to attract crime. A 1993 study of 59 abandoned properties in Austin, Texas, found that 34 percent were used for illegal activities and of the 41 percent that were unsecured, 83 percent were used for illegal activities.

While the focus of the recently enacted Land Bank Legislation has been as a tool for addressing abandoned residential properties, its utility should also be examined for application to brownfields. Land Banks can serve has effective means of addressing the complex legal and environmental issues that face brownfield properties. 

As an example, the Franklin County Land Bank was used successfully to address tax liens on the former Bedford Landfill which overcame a significant barrier to redevelopment.  The Bedford Landfill became a successful Clean Ohio project receiving a $3 million grant from the State of Ohio.

Today, I attended a presentation by members of the City of Cleveland's Economic Development Department on the City's Industrial Land Bank Program.  Nate Hoelzel and David Ebersole provided an interesting overview of this unique effort by the City to address large brownfield's for redevelopment.

The City of Cleveland's Industrial/Commercial Land Bank was launched in 2005.  The creation of the Cleveland Industrial Land Bank was preceded by an academic study by Cleveland State University.  The purpose of the bank is to try an assemble large tracks of abandoned property in areas identified by the City for priority commercial/industrial development.  Criteria include looking for properties of at least 20 acres in size and near key infrastructure.

In a relatively short time period (less than 4 years), the Land Bank has acquired 100 acres of brownfield property.  Thirty-seven (37) acres are currently on the market for industrial or commercial redevelopment.  The adjacent picture is from Economic Development Department's web page shows the location of 3 tracks currently held by the Land Bank.

The industrial/commercial land bank is designed to overcome the unique aspects of  contaminated urban property that prevents major development.  Representatives for the City of Cleveland estimated it cost approximately $300,000 per acre to address urban brownfield property.  Such a staggering costs often drives development to greenfields and promotes urban sprawl.  The factors that drive such staggering costs include:

• liability for contamination
• assessment costs for investigating the extent of contamination
• demolition costs for vacant buildings
• property title issues including tax liens

Land Bank's can overcome many of these barriers by providing public funds for costly environmental assessment, removing title issues and even potentially addressing liability through clean up of the property.  A property returned to the market may be free of tax liens and have received a full release from the State of Ohio for environmental contamination.

While successful for its relatively short existence, Cleveland's Industrial Land Bank could be improved if provided additional flexibility.  The Land Bank relies upon the traditional legal framework for its activities.  The legal authority for municipalities to purchase underutilized land exists at the State level in Ohio Revised Code 5722 and at authority for the Industrial Land Bank is located in Section 183.021 of the City of Cleveland Code. Under these authorities, no separate corporation can be created which means the City can face significant liability exposure under federal Superfund laws (CERCLA) for owning contaminated property. 

During the presentation, the presenters mentioned the City's effort to amend federal law during the effort in 2006 to reauthorize U.S. EPA's brownfield program.  While amendment of federal law to allow municipalities or counties to acquire property without fear of CERCLA liability makes sense, it may be an uphill climb.  It may be more practical to allow for expansion of Ohio's new Land Banking Legislation to specifically allow for political subdivisions to acquire brownfield properties through a separate corporation.  This would provide City's a layer of liability protection for being active in purchasing these complex properties.

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Today, a Georgia Appeals Court overturned a lower court's ruling that invalidated an air permit for a coal-fired power plant on the basis of climate change.  In June 20, 2008 Georgia's Fulton County Superior Court invalidated a permit for construction of a 1200-megawatt coal-fired power plant. The Court said the Georgia Environmental Protection Division should have considered CO2 a "regulated pollutant" under the Clean Air Act and required controls as part of the permit. 

When the lower Court decision was issued it marked the first time a State Court had invalidated a permit issued under the New Source Review (NSR) program for failing to consider CO2 a "regulated pollutant."  The decision sent major shock waves around the Country. 

Since the lower Court decision, a series of administrative appeal rulings and EPA proposals on climate change have been issued. The decisions have resulted in a complex regulatory web.  Lost was a clear indication whether CO2 should be considered a "regulated pollutant" under the Clean Air Act. 

The Georgia Appeals Court decision is well reasoned and navigates the various court and administrative rulings as well as EPA proposed rulemakings.  The Court's final conclusion...as it stands right now CO2 is not a regulated pollutant under the Clean Air Act.  Until U.S. EPA promulgates actual regulations requiring reduction of CO2 emissions or controls, permits issued under the NSR program need not consider a facility's CO2 emissions. 

Here is a key paragraph from the decision that succinctly sets forth the Court's reasoning:

This ruling (lower Court's invalidation of the permit)...would impose a regulatory burden on Georgia never imposed elsewhere.  It would compel [the State] to limit CO2 emissions in air quality permits, even though no CAA (Clean Air Act) provision or Georgia statute or regulation actually controls or limits CO2 emissions, and even though (to this Court's knowledge) no federal or state court has ever previously ordered controls or limits on CO2 emissions pursuant to the CAA.  It would preempt ongoing Congressional efforts to formulate a CO2 emissions policy for all the State...If accepted it would engulf a wide range of potential CO2 emitters in Georgia-and Georgia alone- in a flood of litigation over permits, and impose far-reaching economic hardship on the State.  We reverse this ruling.

Here are some the items I feel the Court got right in its ruling (keep in mind I'm not making pronouncements about climate change, I am just saying I think the legal analysis is well reasoned).

1. Analysis of Impact of Massachusetts v. EPA-  The landmark Supreme Court ruling only says that CO2 and other greenhouse gases are "pollutants" under the Clean Air Act.  Until EPA adopts affirmative regulations requiring controls or emissions limits on CO2, it will not be considered a "regulated pollutant" under the Clean Air Act.  Only "regulated pollutants" must be evaluated as part of the New Source Review Program.
2. Johnson Memo is Determinative for Now (prior post)-  In Deseret Power, the Environmental Appeals Board said U.S. EPA retained discretion to decide whether monitoring requirements applicable to CO2 which currently exist in the Clean Air Act are enough to raise CO2 to the status of "regulated pollutant" under the Act.  Former EPA Administrator Stephen Johnson, in one of his last acts, issued a memo setting for EPA's formal determination that monitoring was insufficient to raise CO2 to the status of "regulated pollutant."  New EPA Administrator Jackson granted a request to reconsider the Johnson memo, however she did not go as far as to stay the effectiveness of the Johnson memo during the review.  The Court finds that the current state of the law is that monitoring is not enough to raise CO2 to the status of regulated pollutant.
3. Formal EPA Rulemaking is Required to Trigger Regulation of CO2-  The Court concludes that until U.S. EPA completes a formal rulemaking that actually requires controls or emission limits on sources of CO2, permits can be issued without considering CO2 as a pollutant. 
4. Rejection of IGCC as Part of BACT Analysis-  The Court also follows prior Court decisions on the issue of requiring all coal plants to be IGCC plants.  It overturned the lower Court ruling that would have required analysis of IGCC as pollution control under the Best Available Control Technology (BACT) requirement.  In rejecting a required analysis of IGCC, the Court found that BACT analysis, as set forth in the New Source Review Program, does not require redesign of a facility from a pulverized coal to a syngas plant.

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On June 18th the Senate Environment and Public Works Committee, on a vote of 12-7, passed the amended version of the Clean Water Restoration Act.  The proposal is seen by some as an attempt to fix a major hole in the Clean Water Act.  Others see it as a major extension of federal regulation.  I see it as a State's rights issue...

The debate over the bill has centered on whether federal jurisdiction should cover essentially all streams and wetlands. (for a discussion of the jurisdiction issue see the extended entry to this post)  The hardcore supporters or detractors appear to break into two camps:

1. Farmers who want the independence and flexibility to address irrigation or flooding without the need of federal permits
2. Without passage the majority of streams and wetlands will be left completely unprotected leading to a complete destruction of water quality even in federally regulated waterways. 

If you think I'm painting the camps too dramatically let me provide some examples.  First from the protection camp (post on Blue Living Ideas).

Without CWRA, we could return to the times of the Cuyahoga River burning and the Great Lakes smelling like cesspools. The Clean Water Act is important legislation that needs restoration. It’s about birds; it’s about clean water; it’s about drinking water. CWA was intended to protect all of America’s waters from pollution, not just those that are navigable.

Now from the farmer's perspective (post on Drovers).

Under current law, the federal government has jurisdiction over "navigable waters of the United States." However, by removing the word "navigable" from the definition, the CWRA would expand federal regulatory control to unprecedented levels - essentially putting stock tanks, drainage ditches, any puddle or water feature found on family farms and ranches—potentially even ground water—under the regulatory strong-arm of the federal government.

There are of course other perspective, such as the U.S. Chamber's.  In a letter to the Senate Committee the U.S. Chamber opposes the Clean Water Restoration Act because it fears the expansive language will be used by citizen groups to stop development projects:

It has been well-documented that deletion of the term “navigable” from the definition of “waters of the United States” could lead to the unnecessary expansion of the CWA to certain intrastate waters. The bill does attempt to address this problem by listing the specific types of waters explicitly covered by the CWA and exempting others. However, the Chamber’s primary concern is that, despite the good intentions of the Committee in negotiating a compromise, S.787 as drafted is still subject to manipulation by activist groups whose only goal is to stop development.

Lost in the debate seems to be Republican notions of federalism.  When it comes to environmental protection, States seem to often loose the argument that they can craft better regulations or even be trusted to adopt any regulation at all.

The lack of trust makes groups push hard for federal regulation, which is unfortunate because State crafted water quality regulatory programs should be a much better alternative. Here are some reasons why an expanded Ohio jurisdiction over waterways and wetlands may be preferable to "putting all waters under federal protection." 

1. Regulations crafted at the local level-  ideally States should be in a better position to address unique water quality issues that may be present in their state.  Rather than one size fits all approach under federal regulations.
2. One permit instead of two-  If the Clean Water Restoration Act passes, anyone with development projects in the State that impacts a stream or wetland will have to get a 401 water quality certification and a 404 permit.  This means all development projects face distinct regulators who may push for different outcomes to mitigate for impacts. 
3. Greater Flexibility-  In navigating federal regulations, companies and developers often must deal with the "national consistency" argument.  In other words, "we can't be flexible in this instance because we have to worry we are setting national precedent."
4. Navigation of only one regulatory structures-  Water quality regulation is a complex business.  It involves biological and chemical criteria.  Navigating two complex regulatory structures (federal and state) bogs down business.  An efficient regulatory structure can still be protective.

A state water permit program is not only a possibility, it was proposed by Ohio EPA in the fall of 2008 in response to shrinking federal regulation.  The State's proposal has met with significant resistance which has slowed the rule development process down to a crawl.  However, for the reasons articulated above perhaps its worth reconsidering positions on the proposal.  

Those groups opposing both the Clean Water Restoration Act and Ohio EPA's proposed Water Quality Permit Program must realize they will not get it both ways.  There is too much support for protecting streams and wetlands to have no regulatory program in place.  Without a strong push for State regulation, the default will be to push for federal regulation.

To fend off federal regulation through adoption of effective state regulation, supporters must address the perception of many that State's engage in a "race to the bottom" when enacting environmental regulation.  Federal legislation like the Clean Water Restoration Act get pushed because fear by many groups that if regulation is left up to the State's they will all compete to have the least amount of protections or requirements. 

(Photo: Colin Gregory Palmer/everystockphoto.com)

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