Articles, Alerts & Perspectives

The PIOGA Press

(by Keith Coyle and Ashleigh Krick)

On January 11, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a final rule amending the gas pipeline safety regulations at 49 C.F.R. Parts 191 and 192. Adopted as part of the Trump administration’s efforts to reduce or eliminate unnecessary regulatory burdens, PHMSA estimates the final rule will result in approximately $130 million in annualized cost savings for pipeline operators. Although the effective date of the final rule is March 12, the agency provided a deferred compliance date of October 1, 2021, for the new amendments.

Additional information about the final rule is provided below.

Distribution integrity management program exemptions and farm taps

• Consistent with the policy announced in PHMSA’s March 2019 Exercise of Enforcement Discretion, the final rule provides operators with the option to maintain pressure regulating devices on farm taps under either the distribution integrity management program (DIMP) requirements or 49 C.F.R. § 192.740. The final rule exempts farm taps originating from unregulated production and gathering pipelines from the DIMP requirements, the overpressure protection inspection requirements in § 192.740 and the annual reporting requirements in Part 191.
• The final rule does not amend PHMSA’s regulations to provide additional clarity in determining what qualifies as a farm tap or where production, gathering or transmission piping ends and distribution service line piping begins in farm tap configurations. The agency stated that these definitional issues will be addressed in a guidance document that remains under development or in a future rulemaking proceeding. In the preamble to the final rule, PHMSA emphasized that any portion of a farm tap originating from an unregulated pipeline that meets the definition of service line must still comply with all applicable Part 191 and 192 requirements.

…

Smart Business

(by Sue Ostrowski featuring Michael Fink)

For startup companies lacking the cash flow or liquid assets to obtain a traditional bank loan, venture debt could be the answer to help elevate them to the next level.

“Startups often lack many of the characteristics that would give traditional lenders comfort that a regular commercial loan would be a good deal for them,” says Michael Fink, attorney at Babst Calland. “Venture debt can be an alternative to help bridge the gap to a company’s next valuation.”

Smart Business spoke with Michael about how taking on venture debt can keep a business moving forward without decreasing its valuation.

What is venture debt, and how is it structured?

At its core, venture debt looks similar to other commercial debt a company may incur; it may be structured as a term loan or line of credit, or an option to draw on either. The startup generally may choose the facility it feels best fits its needs.

However, because it’s a riskier loan for lenders, venture debt terms are generally more favorable to the lender than those of traditional loans. Borrowers can expect an interest rate higher than the prime rate (5 to 15 percent being common), more lender control rights and expanded negative covenants, prohibiting, for example, making large purchases or divesting a line of business without the lender’s consent.

Venture debt’s availability is based primarily on a company’s ability to raise future equity rounds, so venture debt lenders often require a small equity component in exchange for the higher risk the lender is taking on. For example, the lender may receive a warrant to purchase either common equity or the preferred equity to be issued in the next fundraising round, typically at a discount. …

The Legal Intelligencer

(by Anna Jewart and Krista-Ann Staley)

Zoning regulations, although important, are not the sole restrictions on land use. Property owners and a variety of entities may agree to impose additional private restrictions on specific pieces of land. These private restrictions can create confusion regarding who, between the parties to the agreement and the municipality, has the authority to interpret and enforce their terms. The Pennsylvania Commonwealth Court recently issued a detailed, albeit nonprecedential, opinion addressing this type of scenario in Naylor v. Board of Supervisors of Charlestown Township, No. 659 C.D. 2018 (Pa. Cmwlth. Jan. 7, 2021). In Naylor, the court addressed a decades-long disagreement over the scope of a conservation easements. Among its holdings, the court concluded a township did not have standing to enforce a private conservation easement, even when it owned a separate parcel subject to the same easement. Naylor is a good reminder that municipal regulations and private agreements are distinct matters with independent enforcement mechanisms.

Easements are a common form of private land use restriction. An easement is a nonpossessory interest of a holder in real property, imposing limitations or affirmative obligations on property called the “servient” estate. Conservation easements are designed for certain “conservation” purposes, such as protecting the natural or scenic values of real property; assuring its availability for agricultural, or recreational use; protecting, or managing the use of natural resources; or maintaining land, air, or water quality.

In Pennsylvania, conservation easements receive certain statutory protections under the Conservation and Preservation Easement Act, 32 P.S. §§5051 et seq., (Easement Act). Enacted in 2001, the Easement Act sets forth requirements for the interpretation, construction and enforcement of conservation easements. …

Washington, DC

Renewables Law Blog

(By Ben Clapp)

A recently settled enforcement action against a solar project developer in Massachusetts underscores the importance of adhering to appropriate stormwater pollution prevention protocols when siting, designing and constructing a project. The Commonwealth of Massachusetts sued the project developer under state and federal environmental laws, alleging that they had constructed a solar array on a hillside parcel without designing or implementing the required stormwater controls.  Specifically, the Commonwealth alleged that the developer never properly analyzed the potential for harm from stormwater discharges resulting from construction of the solar array, failed to install necessary stormwater controls prior to conducting site clearing and grading activities, applied for a General Stormwater Permit for construction activities (Permit) without having first prepared a Stormwater Pollution Prevention Plan (SWPPP), and ultimately failed to comply with requirements of the Permit and SWPPP that are designed to prevent stormwater pollution.  As a result, the Commonwealth claimed, there was an extensive discharge of sediment-laden stormwater over several months into a downgradient river that adversely affected the river’s water quality, and also eroded the hillside, scoured out perennial and intermittent streams, uprooted trees, destroyed streambeds, and filled in wetlands with sediment.  The developer has agreed to pay more than $1 million to settle the claim, which includes the cost of restoring impacted natural resources, compensatory mitigation costs, the Commonwealth’s legal fees, and a $100,000 civil penalty.

The case is an important reminder that renewables projects face the same environmental compliance obligations as any other large-scale infrastructure project, and that such projects, while considered “green,” are not immune from environmental enforcement actions. While renewables projects are often scrutinized for potential impacts to protected species, a greater risk of liability may lie in a project’s failure to comply with more “run of the mill” permitting and compliance requirements.  …

PA Business Central

This has been a year like no other! Our annual Top 100 People edition highlights the vibrant economic and social life of central Pennsylvania by honoring the people who make it happen. When goods or services are delivered in an efficient and timely manner, expertise and knowledge brought to bear on a problem, or necessary care provided, it’s not just the businesses and the institutions – but the people behind them that get the job done. We all know that powerhouse individual – the person with the vision, dedication and drive to not only complete the task, but to envision, expand and excel. We are fascinated by the impact a single individual can have on their workplace, their community and the lives of those around them. The stories of these individuals can provide instruction, inspiration and the motivation to raise our own standard of excellence. That is why we take great pride in bringing you Pennsylvania Business Central’s Top 100 People for 2021!

As always, we reached out to community leaders, local chambers of commerce, and you, our loyal readers, to identify those individuals whose unique contributions have set them apart as leaders. We received a wealth of nominations that reflect the rich diversity of central Pennsylvania and its business community. So many deserving nominations in such a challenging year, that we had to expand our list of honorees – and so we are proud to honor 120 outstanding leaders in this year’s edition!

In selecting this year’s honorees, we wanted to show the full spectrum of leadership – from the small entrepreneur to the CEO of a large corporation – that helps shape our communities and our lives. And while every story is unique, we think you’ll find that these honorees share a dedication to hard work, dynamic leadership and the pursuit of excellence. …

The Legal Intelligencer

(by Brian Lipkin)

In 2021, employers can expect a few significant developments from the Occupational Safety and Health Administration (OSHA):

COVID-19 Standards. Currently, to decide whether an employer has taken proper COVID-19 measures, OSHA typically applies the “general duty clause,” which is the “catch-all” section of the Occupational Safety and Health Act. The general duty clause requires a workplace free from recognized hazards, to protect employees from death or serious physical harm.

Currently, OSHA also applies its existing standard on respiratory protection. This standard focuses on whether an employer has identified appropriate protective equipment, issued it to employees, and trained them to use and maintain it properly.

So far, there are no OSHA standards specific to COVID-19. In the near future, we expect that to change.

On Jan. 21—his first full day in office—President Joe Biden signed an executive order on protecting worker health and safety. Biden ordered the Secretary of Labor to consider issuing emergency COVID-19 standards by March 15. In particular, Biden directed the Secretary of Labor to consider ordering employees to wear masks in the workplace.

We expect the new standards will require employers to develop written plans to limit COVID-19 exposures in the workplace. These plans will likely require employers to identify potential risks, and outline mitigation strategies.

Biden also ordered the Secretary of Labor to issue updated COVID-19 guidance for employers by Feb. 4.

OSHA will release the new standards and guidance on its website at osha.gov/coronavirus.

Targeted Enforcement. Currently, OSHA prioritizes two types of workplaces for COVID-19 enforcement: hospitals and health care providers that treat COVID-19 patients; …

Pittsburgh, PA

EmTech Law Blog

(by Chris Farmakis)

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Check out Solvaire’s new website and request a free consultation to learn how Solvaire can work with your team to provide superior diligence, discovery and document management services – on time, with accuracy and consistency and within a budget that provides price certainty.

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On behalf of Babst Calland and Solvaire, we look forward to serving you on your next project.

Chris Farmakis
Chairman, Babst Calland
President, Solvaire

Tags: diligence, Discovery, Document Management, e-Discovery, Solvaire

The PIOGA Press

(by Lisa Bruderly)

On December 10, the U.S. Environmental Protection Agency (EPA) issued for public comment its draft guidance regarding the U.S. Supreme Court’s County of Maui “functional equivalent” analysis within the Clean Water Act (CWA) National Pollutant Discharge Elimination System (NPDES) program (85 Fed. Reg. 79489). The comment period closed on January 11.

In County of Maui v. Hawaii Wildlife Fund, 140 S. Ct. 1462 (2020), the Supreme Court held that an NPDES permit is required in instances when a point source discharge of a pollutant through groundwater to a navigable water is the “functional equivalent” of a direct pollutant discharge from a point source into a navigable water. Babst Calland discussed the Supreme Court’s April 23, 2020, decision and its far-reaching implications in the May 2020 PIOGA Press article “Potential Clean Water Act liability extends to discharges to groundwater that reach surface water.”

The Supreme Court offered a non-exclusive list of seven factors to consider on a case-by-case basis:

• Transit time;
• Distance traveled;
• Nature of the material through which the pollutant travels;
• Extent to which the pollutant is diluted or chemically changed as it travels;
• Amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source;
• Manner by or area in which the pollutant enters the navigable waters; and
• Degree to which the pollution (at that point) has maintained its specific identity.

Emphasis on threshold requirements for NPDES permits

The draft guidance stresses that the County of Maui decision did not change the structure of the NPDES permit program, and, at most, only adds another step in determining whether an NPDES permit is required under a limited number of scenarios. …

The PIOGA Press

(by Robert Stonestreet)

On December 16, the United States Fish and Wildlife Service adopted a final regulation to define the term “habitat” for use when designating “critical habitat” areas under the Endangered Species Act (ESA). 85 Fed Reg 81411. The ESA already defines the term “critical habitat,” which in general means areas designated as essential to preserve or promote recovery of threatened or endangered species regardless of whether those species are actually present in the area. The term “habitat,” however, is not itself defined in the ESA or pre-existing regulations.

The Service proposed two potential “habitat” definitions in August 2020 for public comment. In the final rulemaking, the Service chose to adopt a “habitat” definition markedly different than the two definitions proposed for public comment back in August. The adopted definition reads as follows:

For the purposes of designating critical habitat only, habitat is the abiotic and biotic setting that currently or periodically contains the resources and conditions necessary to support one or more life processes of a species.

According to the Service, abiotic means “derived from non-living sources such as soil, water, temperature, or physical processes” and the term biotic means “derived from living sources such as a plant community type or prey species.” The preamble portion of the Federal Register entry notes that the phrase “resources and conditions” is intended to clarify that habitat “is inclusive of all qualities of an area that can make that area important to the species.”

Compare that definition to the two definitions proposed for public comment on August 5, 2020, which appear below:

     Primary Proposed Definition: The physical places that individuals of a species depend upon to carry out one or more life processes. …

The PIOGA Press

(by Keith Coyle and Brianne Kurdock)

On December 27, President Donald J. Trump signed the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2020 (2020 PIPES Act) into law. Adopted as part of a broader federal spending and COVID-19 relief package, the signing of the 2020 PIPES Act represents the culmination of a multiyear effort to reauthorize the nation’s federal pipeline safety program. The prior reauthorization of the federal pipeline safety program, enacted in the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (2016 PIPES Act), expired on September 30, 2019.

The 2020 PIPES Act authorizes general funding for the Pipeline and Hazardous Materials Safety Admin – istration’s (PHMSA) gas and hazardous liquid pipeline safety programs of $156.4 million for fiscal year 2021, $158.5 million for FY 2022, and $162.7 million for FY 2023, with additional amounts authorized in each of these fiscal years from the Oil Spill Liability Trust Fund for hazardous liquid pipeline safety and the user fee program for underground gas storage facilities. The 2020 PIPES Act also prescribes specific funding amounts that PHMSA must use for certain activities, including for recruitment and retention of federal pipeline safety personnel, operational expenses, and federal grant programs.

In addition to authorizing funding levels through FY 2023, the 2020 PIPES Act contains several amendments to the federal pipeline safety laws. Some of the key changes are highlighted below.

Title I of the 2020 PIPES Act:

• Establishes a new three-year program for advancing pipeline safety technologies, testing and operational practices.
• Adds an operator’s self-disclosure to the list of factors that PHMSA must consider in assessing administrative civil penalties.
• Recognizes additional due process protections for PHMSA enforcement proceedings, including that:
  • An operator be allowed to request that matters of fact and law be resolved in a consent  agreement and consent order.

…

Pittsburgh, PA

Renewables Law Blog

(By Christopher Hall)

Following the passage of West Virginia Senate Bill 583 in early 2020, West Virginia has seen an uptick in the number of new proposed renewable energy projects.  SB 583 established a new incentive program supporting the development of renewable energy facilities on former industrial sites.  Berkeley County, in the eastern panhandle, recently announced a proposed 100 MW solar facility to be built on a 750 acre brownfield site previously used as a manufacturing facility.  Read more.

Tags: energy, renewable, SB 583, solar, tax credits, West Virginia Senate Bill 583