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

On April 23, 2010 EPA is finalized revisions to the Lead Renovation, Repair, and Painting Program (RRP) that went final on April 22, 2008. 

Under the revisions EPA eliminates the “opt-out” provision that currently exempts a renovation firm from the training and work practice
requirements if the firm obtains certification from the owner that no child under age 6 or pregnant women resides in the home and the home is not a child-occupied facility.

The second major revisions requires renovation firms to provide a copy of the records demonstrating compliance with the training and work practice requirements of the RRP rule to the owner and, if different, the occupant of the building being renovated or the operator of the child-occupied facility.

The RRP rule establishes requirements for training renovators and dust sampling technicians; for certifying renovators, dust sampling technicians, and renovation firms; for accrediting providers of renovation and dust sampling technician training; for renovation work practices; and for record keeping rule.

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Last week, Senator Voinovich drew attention and criticism for proposing a significant expansion of the preemption language in the forthcoming bi-partisan climate bill to be introduced by Senators Kerry, Lieberman and Graham.  Failure to carefully consider the preemption language and possible additional limits on other regulatory authority would be short-sighted. 

One of the main reasons for Congress to pass climate legislation would be to remove the morass of uncertainty and mounting litigation in relation to climate change regulation.  If the bill has narrowly drawn preemption language, the certainty the businesses need will simply be non-existent.

The whole point of climate legislation should be to develop a national strategy to address the issue.  A narrow preemption would mean creation of new regulatory authority that just adds to the current chaos surrounding climate regulation. 

Here is a quick summary of what Senator Voinovich is proposing as reported in the New York Times :

Voinovich is circulating a proposal (pdf) that would go beyond Clean Air Act pre-emptions to block the federal government from regulating greenhouse gas emissions under laws including the Endangered Species Act, the Clean Water Act and the National Environmental Policy Act. The amendment would fully prohibit states from regulating greenhouse gases based on their effects on climate change and would prohibit public nuisance litigation related to climate change.

Notably, Voinovich's measure would also prevent EPA from moving forward with its part of a joint rulemaking finalized this month with the Transportation Department. The rules seek to raise the fuel economy of the nation's passenger fleet while imposing the first-ever greenhouse gas standards on cars and trucks.

The bi-partisan bill was supposed to be released today.  However, political issues over immigration have "temporarily" delayed introduction of the new measure.  Without viewing the new legislation, its difficult to make a comparison between the Voinovich proposal and the bi-partisan legislative proposal.  From what is anticipated, here is the break down of pre-emption language:
 

EPA's Clean Air Act and New Source Review Regulations

EPA's Tailoring Rule is perhaps the best example of vague climate change regulatory authority.  EPA admits that regulation of CO2 like any other pollutant would lead to absurd results.  The Tailoring Rule is meant to phase in regulation of CO2.  However, no one knows whether EPA has the authority to phase-in those regulations.  Is that something we really want to leave to chance?

Public Nuisance Lawsuits

The pre-emption language must include public nuisance claims.  Courts across the country have had a influx of suits filed against large greenhouse gas emitters seeking redress for their contribution to climate change.  Right now the Courts are split over whether the suits "raise a political question" which is outside the review of the judiciary.  Also, if Congress acts in passage it may pre-empt some of the federal nuisance authority Plaintiffs rely upon. However, it is very difficult to see how that legal question shakes out if the Kerry Bill initially only covers utilities. 

Even if Senator Kerry's bill uses a phased in approach, the bill should explicitly pre-empt nuisance lawsuits.  Expensive litigation that often leads to inconsistent Court rulings is no way to develop a common sense regulatory policy. 

Regional and State Regulations

If the bi-partisan bill fails to pre-empt State and regional climate change regulations we will be left with a patchwork regulatory scheme across the country.  Avoiding such a patchwork regulatory scheme was one of the major reasons the Obama Administration decided to push the compromise on vehicle emission standards.  Otherwise, California and other states would have established separate vehicle standards only applicable in their states.

Conclusion

With the bills anticipated narrower focus, expansive preemption may be much more difficult.  It is anticipated that the bi-partisan bill will start with limits on the utility sector and possibly phase in other sectors of the economy over time.   If a bill passes, what remains as legal authority becomes even more important if the bill has a narrow focus. 

Environmental groups will be looking to press for action in all areas where authority would remain. The logical argument for Congressional action is to remove the uncertainty and develop a national regulatory approach to addressing climate change.  This can only be accomplished if the focus is on the bill as THE approach, not just one new regulation to add to the existing patchwork of regulations.

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The administration of the Clean Ohio program is largely governed by the policies developed by the Clean Ohio Council. Separate policies have been generated for the Clean Ohio Assistance Fund (COAF) and the Clean Ohio Revitalization Fund (CORF).

Over the life of the Clean Ohio program, the Clean Ohio Council has routinely updated the program policies to address issues and provide additional clarification to applicants. The policies govern critical components of the brownfield grant program including eligibility, evaluation of projects and administration of grants.

The policies are used as a mechanism to address many of the more common issues that arise and to modify the program. Every brownfield project is different and on most Clean Ohio projects issues will arise that are unique to that project or that are not clearly addressed by the policies. However, it is important to pay attention any time the Council updates their policies.

On March 19, 2010, the Clean Ohio Council approved changes to the policies that govern projects seeking funding under the Clean Ohio Revitalization Fund (CORF). CORF funding is awarded on a competitive basis semi-annually by the Clean Ohio Council. The new policies were placed on the Clean Ohio web page today and are effective immediately.

An Ohio EPA newsletter states the changes were made based upon recommendations received from the Ohio Department of Development (ODOD), Ohio EPA, grantees and other interested parties. While the changes do adjust some of the administrative procedures, there are no changes on the scale of past policy updates. Prior changes included creation of the Redevelopment Ready Track and the addition of extensive conflict of interest provisions.

Here is a quick summary of the changes made:

• Eligible Grant Costs- Costs incurred responding to Ohio EPA comments are now eligible. However, costs associated with re-issuance of a No Further Action letter are not eligible. Clarification was provided that costs incurred in preparing an application are not eligible.
 

• Clarification of Eligible Infrastructure Work- To be eligible as match, infrastructure work must be performed on or at the project property. Infrastructure work used as match must be completed prior the end of the grant. The 10% limit on use of grant funds for infrastructure costs was maintained. A new definition of what constitutes “infrastructure” was added which states:

            o “Infrastructure” means technical structures that support society, including but not limited to roads, bridges, water supply, sewers, power grids, and telecommunications, but excludes vertical structures, such as buildings and parking garages. The exclusion of buildings and parking garages is the most important clarification of this added definition.
 

• Requires a Project Resource and Advisory Meeting (PRAM)- The PRAM meeting includes ODOD and Ohio EPA at the Site. This is where any issues identified with the clean up or proposed project can be discussed early on with the State Agencies. While these meetings have been routine, the policy update makes clear that the meeting is mandatory and must be conducted prior to placing the grant application in the library for public comment.
 

• Integrated Rankings- Under the policy revisions, if an Integrating Committee ranks multiple projects, and a project is withdrawn prior to the Clean Ohio Council award meeting, lower ranked projects will move up in ranking. This is an important change because projects do routinely drop out of the process and some areas of the state (including Cleveland) typically have multiple projects submitted. The Integrated Committee related points are crucial you’re your application is in a competitive grant round.
 

• Initiation and Completion of the Project- New requirements were added regarding funding projects. Applicants are not required to open a Technical Assistance Account with Ohio EPA within 60 days of grant award. These accounts are used to discuss clean up issues with Ohio EPA. Work must commence on site within 12 months of the effective date of the grant agreement. Finally, projects must be completed within 48 months (including issuance of the Covenant Not to Sue by Ohio EPA) of the date the grant contract is executed.

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On March 31st, a Federal District Court in Tennessee (6th Circuit) issued the latest decision in relation to litigation stemming from New Source Review (NSR) enforcement actions against electric coal fired utilities.  The TVA Bull Run decision is another example of the inconsistent application of the test for determining when projects trigger NSR.

The NSR regulatory program continues to serve as the best example of poorly drafted or applied environmental regulations that has major implications for business and industry.  Clear standards and well drafted rulemaking should always be the highest priority for EPA.  Otherwise, businesses are treated in an inconsistent manner and EPA simply looks bad.

Similar to other NSR enforcement actions against coal-fired utilities, the TVA case turned on whether the Routine Maintenance, Repair and Replacement (RMRR) exception covered the projects at issue.  Simply put, if the projects are viewed as routine, the RMRR exception applies and NSR will not be triggered.

The two main projects at issue were:

1. Replacement of an economizer to reduce forced outages related to tube leaks
2. Replacement and repair related to tubing associated with the superheater which super heats steam at the plant

What makes this case interesting is that its not the first time these types of projects have been evaluated by the federal courts in determining whether RMRR applies.  In evaluating these projects under the NSR test, Courts have reached opposite conclusions.  A finding NSR is triggered can subject a utility to billions in pollution equipment upgrades and penalties, so you would think consistency would be very important.

Determining whether RMRR exception applies, involves analysis of the following factors:

• Nature and extent of project
• Purpose
• Frequency of these types of repairs (is it routine)
• Cost of the project

Whether the RMRR exception covers a project has turned on whether the Court hearing the case applies the factors above relative to the specific emission unit or the industry as a whole.  For example, application of the factor known as frequency of repair- should the factor be viewed as how frequently the repair occurred on the specific unit or the frequency it occurred on similar units throughout industry?

The significant differences in opinion over the basic application of the test for RMRR has led to completely inconsistent holdings.  While TVA found RMRR covered the projects, two other federal courts (Ohio Edison and Sierra Club v. Morgan) have found similar projects, including economizer replacement projects, did not fall within RMRR.

The inconsistent rulings have created a significant competitive advantage to those businesses that find themselves lucky enough to operate in a jurisdiction where Courts take a broader view of RMRR.  How can such a major split in the federal case law persist? And more importantly, how can the NSR federal regulations be deemed clear when multiple federal courts have reached opposite conclusions?

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