imla annual meeting baltimore september 11, 2014 presented by bb&k: michelle ouellette, harriet...
TRANSCRIPT
IMLA Annual MeetingBaltimore
September 11, 2014
PRESENTED BY
BB&K: Michelle Ouellette, Harriet Steiner and Gerard Lavery Lederer
HOT FEDERAL ISSUES:TAXES, TRANSPORT,
ENDANGERED SPECIES AND COMMUNITY
DEVELOPMENT
©2014 Best Best & Krieger LLP
AGENDA
• Congress: Transportation Gerry Lederer /Taxes
• Trains & Oil TransportHarriet Steiner
• Endangered Species Michelle Ouellette
• Caveat – These materials may need to be updated in Baltimore as they were assembled before Congress had adjourned for the summer.
CONGRESS
• Congress has 7 work days before end of the fiscal year and leaving to campaign for reelection. In that time it must: Fund the government for 2015 Deal with the funding short falls in DHS for border
issues and drought/fires in the west; Authorize the President’s actions against ISIS; and Make sure they never appear to get along so as not
to offend their base.
CAN CONGRESS HARMONIZE ELECTRONIC TAXATION?
Possible On-Line Tax Reform
Marketplace Fairness
Internet Tax Freedom
Digital Goods
Cell Tax Morat’m
Classification of
Broadband
TRANSPORTATION
• CHALLENGE – insolvency of the Highway trust fund while Congress cannot or will not rewrite or update federal highway programs. In the last 6 years, there have been ten surface
transportation extension-on top of eighteen short term budget measures--in the last 6 years
FEDERAL HIGHWAY TAXES
Reduction of purchasing power
• Loses to Inflation 18 cents a gallon for gasoline 24.4 cents for diesel Last increased in 1993
• Fewer Gallons purchased Better gas mileage in US fleet Fewer miles being driven
LAME DUCK
• Fund the Government• Address tax provisions that have expired
Protect bond authority and tax deductibility Internet Tax Freedom
RAIL TRANSPORT AND PUBLIC SAFETY – BAKKEN CRUDEUS DOT NPRMIMLA BaltimoreSeptember 2014
PRESENTED BY
Harriet SteinerPartner
Explosion of Crude Oil Shipments
• 2008 – 9500 rail carloads of crude moved by rail
• 2013 – 415,000 rail carloads
• Average Bakken crude oil shipments travel over 1000 miles from point of origin to refinery ( source DOT press release 7/23/2014)
Level of Hazard
• May 14, 2014: US DOT concluded:
• Crude Oil shipments by rail from the Bakken region pose an “imminent hazard” to the safe transportation of hazardous materials.”
Recent Accidents
• Lac Megantic, Quebec - 7/5/2013 – 63 of 72 cars derailed resulting in multiple explosions and fires 47 fatalities, extensive damage Braking force was insufficient to hold train on the
1.2 % grade Crude more volatile than expected
• Gainford, Alberta – 10/19/2013 9 tank cars of propane and 4 tank cars of crude
derailed as train was entering a siding at 22 mph• Aliceville, Alabama – 11/8/2013
90 cars of crude derailed near a wetland area. 30 cars derailed and many burned
• Casselton, North Dakota – 12/30/2013 106 tank car train struck another derailed train;
34 cars derailed, 20 carrying crude exploded and burned
• Philadelphia, PA - 1/20/14 7 cars of a 101 car train derailed on bridge
• Vandergrift, PA – 2/13/2014 21 cars of a 120 car train derailed, 19 of these were
carrying crude, 4 released product• Lynchburg, VA – 4/30/2014
15 cars in a crude oil train derailed in downtown, 3 caught fire, some cars went into the river
Emergency Regulations
• Safety Advisory strongly urging those shipping or offering Bakken crude oil to use tank car designs with the highest level of integrity available in their fleets. In addition, PHMSA and FRA advise offerors and carriers to the extent possible to avoid the use of older legacy DOT Specification 111 or CTC 111 tank cars for the shipment of Bakken crude oil.
Emergency Regulations
• Each railroad operating trains containing more than 1,000,000 gallons of Bakken crude oil, or approximately 35 tank cars, in a particular state to provide the SERC notification regarding the expected movement of such trains through the counties in that state.
Volatility
• Crude Oil from the Bakken region of North Dakota is more volatile and flammable than other crude oils
NPRM for the safe transportation of crude oil, flammable materials
• NPRM proposes:• Tank Standards• Classification of Testing Program• Operational requirements for high hazard trains
• Comments are due on September 30, 2014
High Hazard Flammable Train
• A train carrying 20 or more tank carloads of flammable liquids (Class 3: including crude and ethanol)
• Current: voluntary speed limit of 50 mph Also 40 mph to any HHFT with at lease one non
DOT 111 car with crude within a High Threat urban area.
• Proposed: all HHFTs to 50 mph in all areas if cars meet enhanced standards
NPRM Comments Request
• Three options for 40 mph for HHFT unless all cars meet DOT 117:
• restriction in all areas• In High Threat urban areas• In areas with a population over 100,000• “Which option would have the greatest net
social benefits”
Car Safety Standards• Existing cars retrofitted to meet the selected
performance requirement except for top fittings. If not retrofitted, then retired, repurposed or speed restricted for 5 years.
• Enhanced Braking; alternative brake signal propagation systems; electronic controlled pneumatic brakes, 2-way end of train device or distributed power
Car Standards
• Three options for tank car standards:• 1. 9/16 inch steel, with electronically
controlled pneumatic brakes and rollover protection
• 2. 9/16 inch steel, no requirement for the brakes for rollover in option 1
• 3. 7/16 inch steel, no requirement for brakes and rollover in option 1
Additional issues
• Improved classification and characterization of crude
• Rail routing risk assessment; if technically feasible reroute to avoid populated and sensitive areas
• Notification to State emergency commissions – codify emergency order Reduce threshold for compliance to 20 cars, etc.
Areas of concern
• Remove more volatile elements (flammable nature gas liquids) prior to shipment Small processing towers known as stabilizers that
remove/shave off NGLs Common in other parts of the Country Known technology
• Positive Train Control: prioritize PTC which is designed to automatically stop or slow trains
Prioritize Prevention
• Apply safety standards that look to the future Building Standards
• Earthquake standards
• Building fire safety standards
• Flood hazard area standards
• Air quality standards
• Prevention is less expensive than the cost of response and recovery
Safety First
• Speed Limits in all areas Example Davis, CA, half the city is in the
Sacramento High Threat area (UC Davis is not); population is 72,000; but high risk because of curve in track; heavily used passenger depot; at grade crossings; sensitive habitat areas adjacent to city
• Study Risks of smaller trains but increased number of trains
Additional Issues
• Require enhanced tank car features – marginal cost when compared to response and recovery
• Phase out unsafe tank cars on an extremely expedited schedule
• Positive Train Control
First Responders
• Fully funded regular training• Fully funded coordinated equipment and
supplies• Provide routine information for planning• Real time information in the event of an
accident integrated into the emergency response system
Coordinated First Response Planning • Require comprehensive oil spill response plans
for every type of train and line carrying more than 3500 gallons of class 3 liquids per month
• Require coordination of OSPRs with state and local OSPRS
• Coordinated emergency response plans and programs, including state and local responders
• Require payment of all required clean-up and costs
Selected Cost Issues
• National fee from railroads and freight shippers to pay for safety improvements and infrastructure
• Demonstration of financial capacity to address risks of hazardous material shipments (to cover entire supply chain)
Additional Issues
• Storage of tankers, etc. on Sidings in urban areas
• At grade crossings
Harriet SteinerPartnerBest Best & Krieger LLP500 Capitol Mall, Suite 1700, Sacramento, CA 95814Phone: 916-325-4000; 916-551-2821 (direct)Email: [email protected]
Hot Federal Issues: Speeding Development by Planning for the Endangered Species Act
International Municipal Lawyers Association, 79th Annual Conference Baltimore, Maryland—September 11, 2014
PRESENTED BY
Michelle Ouellette Partner Best Best & Krieger LLP Riverside CA, 92501 USA
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Michelle Ouellette• Ms. Ouellette joined Best Best & Krieger LLP in 1989 as a first
year associate. She graduated from the University of California, Santa Cruz in 1980, with honors, and received her Juris Doctorate from the University of Southern California in 1989.
• Ms. Ouellette represents municipal, special district and private clients in environmental issues arising under the California Environmental Quality Act (“CEQA”), the National Environmental Policy Act (“NEPA”), the California (“CESA”) and federal Endangered Species Acts (“ESA”) and wetlands regulations.
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The Problem• The federal Endangered Species Act
(“ESA”) can stop or significantly delay development.
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The Solution
• Cities can avoid the debilitating effects of the ESA by being proactive:
Habitat Conservation Plans (“HCPs”).
Mitigation and conservation banking.
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The Federal Endangered Species Act
Listing of Species• (“Section 4,” 16 USC § 1533).
“Take” Prohibition • (“Section 9,” 16 USC § 1538).
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Listing of Species Species includes any subspecies of fish or wildlife or plants, and any
distinct population segment of any species of vertebrate fish or wildlife which interbreeds when mature.
An endangered species is any species which is in danger of extinction throughout all or a significant portion of its range.
A threatened species is any species likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.
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“Take” Prohibition• It is unlawful for “any person” to “take” any endangered
species.• Person is defined to include both private individuals and
government agencies and officials.• Take means “to harass, harm, pursue, hunt, shoot, wound,
kill, trap, capture, or collect, or to attempt to engage in any such conduct.”
Requires actual death or injury to identifiable member of species;
Or alteration of the site, threatening the survival of a listed species or plant.• Babbitt v. Sweet Home Chapter of Comm. for a Great
Oregon, 515 U.S. 687 (1995)• Violators may be subject to criminal penalties of up to $50,000
and one year imprisonment per violation.
Local Government Liability for “Take”
• Local governments have been held liable under the ESA:
Palila v. Hawaii Department of Land and Natural Resources, 639 F.2d 495 (9th Cir 1981) (holding the Hawaii Department of Land and Natural Resources liable for a “take” after it maintained herds of feral sheep and goats for sport hunting purposes within a listed bird’s critical habitat);
Strahan v. Coxe, 127 F3d 155 (1st Cir 1997). (finding Massachusetts liable for “take” after it authorized commercial fishing methods in which Northern Right whales became entangled in the fishing gear).
Loggerhead Turtle v. County Council of Volusia County, 148 F3d 1231 (11th Cir 1998) (finding Volusia County, a coastal county in northeast Florida, liable for “take” after it refused to ban beachfront parking during nesting season to protect the loggerhead sea turtle, a threatened species, and the green sea turtle, an endangered species).
• Note: the court dismissed the suit as moot after Volusia County obtained an incidental take permit from the USFWS.
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The First Big Test of ESA: The Snail Darter Case. Tennessee Valley Authority v. Hill, 437 U.S. 153 (1978).
• Construction of the Tellico Dam commenced before the ESA came into effect and over $100 million had been spent on dam construction.
• Litigants sought and obtained a temporary restraining order (“TRO”) because construction and operation of the dam would likely jeopardize the continued existence of the snail darter.
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• The Supreme Court upheld the TRO:• “The ESA represents the most comprehensive legislation for
the preservation of endangered species ever enacted by any nation.” (TVA at 180.)
• In balancing economic cost with protection of the species, the Court held that “neither the ESA nor Art. III of the Constitution provides courts with the authority to make such fine utilitarian calculations. On the contrary, the plain language of the Act . . . shows clearly that Congress viewed the value of endangered species as ‘incalculable.’” (TVA at 187.)
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Horror Story• After the fly was listed, the San
Bernardino Medical Center (SBMC) had to be redesigned to provide 1.92 acres of protected habitat for eight flies believed to occupy the site.
• SMBC had to dedicate 200 acres of land to preserve habitat, resulting in elimination of 150 residential units, killing financial projections for the overall project.
• The cost per fly amounted to $413,774 ($3,310,199 total) and a one-year construction delay.
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Delhi Sands Flower-loving Fly Adults only active in August
and September; Other than that, fly spends
entire life underground
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Some Solutions:Take Permits & HCPs
• ESA allows listed species to be taken “incidental to other lawful activity,” with a Section 10(a) permit.
http://www.fws.gov/forms/3-200-55.pdf (10(a) permit form)• Section 10(a) was added to ESA to expressly authorize the
permitting of incidental take in accordance with an adopted HCP.
• Note: When there is no federal nexus, an incidental take of endangered species by a private developer or owner may be allowed on a finding that the take would not jeopardize the continued existence of the species.
Section 10(a) Requirements
• Section 10(a) authorizes take if: The take is incidental; The take occurs in accordance with an HCP that minimizes and
mitigates “to the maximum extent practicable”; The applicant ensures adequate HCP funding; The taking will not “appreciably” reduce the likelihood of
survival and recovery of the species; and The HCP meets other “necessary or appropriate” measures.
• No Surprises Benefit: Under Section 10(a)(1)(B), if “unforeseen circumstances” arise,
USFWS will not require additional land, water, funding or restrictions beyond the requirements of the HCP.
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Characteristics of HCPs
• HCPs can cover one species or hundreds of species.
• “Low Affect” HCP is a relatively easy, streamlined process.
• Can cover ten acres or millions of acres.• Each one is individually negotiated with local
Government, private property owners, State and Federal wildlife agencies.
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How do HCPs Speed Development?
• Reduces uncertainty, delays, and costs.• Streamlines the regulatory permitting process and reduces
permitting delays. In CA, HCPs have been estimated to speed development
anywhere between three months and three years, depending upon project complexity.
In CA, HCP permitting is credited with saving public and private developers an estimated seventy million dollars annually.
Estimated to save ten to forty thousand dollars per acre.*
* White Paper: Economic Effects of Regional Habitat Conservation Plans , available at:
http://www.epsys.com/wp-content/uploads/2014/05/White-Paper_3.18.14.pdf
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The Water Resources Reform and Development Act of 2014
• Bill signed into law June 2014 that allows low interest, long term federal loans to provide funding for Habitat Conservation Plan land acquisitions.
Mitigation & Conservation Banking
• Jargon: “Mitigation Bank” = Wetlands “Conservation Bank” = Species & Related Habitats
• Purpose: Attempt to provide, in advance, mitigation for
anticipated impacts to wetlands and/or species• Form:
Public, private, or combination thereof
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Creating “Credits”
• Agencies with regulatory authority over the “impact” need to sign off on the “credit” Wetlands:
• U.S. Army Corps of Engineers
• State agencies Ex. Ca. Dept. of Fish and Wildlife
Species• USFWS
• State Agencies
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How Does Banking Speed Development?
• Certainty and predictability in terms of availability, price, and management.
• Better and more diverse ecological values and interconnectedness than “postage stamp” mitigation sites.
• Facilitates large-scale and long-term planning.• You know how to mitigate up front.
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Development (con’t)
• Ownership and management is established in advance.
• No “temporal” impacts – mitigation on hand contemporaneous with impacts.
• Moves away from “on site” preference when it is not most beneficial ecologically.
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Success Story: Delhi Sands Flower-loving Fly Conservation Bank
• Vulcan Materials Corporation
Had planned site with 18 buildings
• Bank opened in June 2005 and had sold first 3 credits by December
• Price: $150,000 per credit
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ESA: Critical Habitat• In addition to listing species as threatened or endangered, the
Secretary must also list “critical habitat” for each species “to the maximum extent prudent and determinable.” (16 U.S.C. 1533(a)(3)(A).)
• Critical habitat = areas essential to the conservation of the species.
• Recent proposed federal regulation and policy: Revises definition of “destruction or adverse modification” of critical
habitat. Proposals to amend regulations for designating and revising critical
habitats. Draft policy on Implementation of Section 4(b)(2) of the ESA.
• Recently proposed federal legislation (Pass the House on July 29, 2014):• H.R. 4315 would require the Secretaries of the Interior and Commerce to
make publicly available online scientific and commercial data related to the listing of a species as endangered or threatened under the ESA
• H.R. 4316 would amend the ESA to require the Secretary of the Interior to both submit and make publicly available and searchable online an annual report detailing federal expenditures for lawsuits brought under the ESA making claims against the Department of the Interior, the Forest Service, or the National Marine Fisheries Service.
• H.R. 4317 would amend the ESA to require the Secretaries of the Interior and Commerce to provide to affected states all data that is used as the basis for the determination to list a species as endangered or threatened and also receive data submitted by a state, tribal, or county governments as “best scientific and commercial data available” in these determinations.
• H.R. 4318 would amend the ESA to replace the current standard for awarding court costs, including attorney fees, in citizen suits with the federal judicial code standard for awarding costs to a prevailing party.
Thank you for attending.
Michelle OuellettePartnerBest Best & Krieger LLP3390 University Avenue, 5th FloorRiverside CA, 92501 USA(951) 826-8373 [email protected]
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About BB&K
Best Best & Krieger LLP is a full-service law firm with more than 200 attorneys in California and
Washington, D.C. delivering effective, timely and service-oriented solutions to complex legal issues facing public agencies, businesses and individuals.
BB&K lawyers serve as city attorney to 30 California cities and as general and special counsel to special districts, school districts, cities, counties and other
public agencies. The firm has been helping businesses, from local to international, achieve their
goals for more than 100 years.