Federal Court Rejects Lawsuit to Force Stormwater Permits in the Charles River Watershed

The following is a guest post by Hamilton Hackney of Greenberg Traurig regarding the recent decision in CLF v. EPA. NAIOP is extremely pleased with the decision in this case, which we had been following closely. NAIOP will continue to monitor stormwater issues at the state and federal levels on behalf of the commercial real estate industry.

Last week, the federal district court dismissed a lawsuit that sought to force USEPA to create a permitting program for stormwater discharges in the Charles River watershed.  Filed by the Conservation Law Foundation and the Charles River Watershed Association, the suit claimed that USEPA had a mandatory duty to require commercial and institutional properties that discharged stormwater to obtain permits to do so.  If successful, this suit would have forced commercial and institutional property owners to obtain permits, develop stormwater control plans and possibly design and install additional stormwater controls on their properties.

The suit invoked USEPA’s so-called Residual Designation Authority in the Clean Water Act. Although this authority has been exercised very infrequently to date, environmental groups are increasingly citing this statutory authorization as a basis for demanding that USEPA expand regulation of stormwater beyond industrial sources, construction sites and municipal stormwater systems.  In this particular case, the environmental groups argued that USEPA’s approval of “pollution budgets” (Total Daily Maximum Loads or TMDLs) for the Charles River obligated USEPA to regulate previously unregulated stormwater discharges to ensure that the TMDLs were achieved.  Given the hundreds of existing or proposed TMDLs in Massachusetts alone, that position could have far-reaching consequences for commercial and institutional real estate in the many watersheds with TMDLs.

The federal district court’s dismissal of this lawsuit follows another federal court decision last December in a similar case in Rhode Island.  Together, these decisions indicate that courts remain reluctant to intrude on USEPA’s discretion to choose when and how it may exercise its Residual Designation Authority.  While that is an encouraging outcome, these decisions are likely to be appealed, so there may be more developments on this issue.

ViewPoint: A new stretch energy code is not justified

This OpEd appeared in the Boston Business Journal on June 3, 2016.

In March 2015, Governor Charlie Baker signed Executive Order 562, initiating a comprehensive review process for all regulations. Only those regulations which are mandated by law or essential to the health, safety, environment, or welfare of the Commonwealth’s residents would be retained or modified, making Massachusetts a more efficient and competitive place to live and work.

Agencies must demonstrate, in their review, that there is a clearly identified need for governmental intervention; the costs do not exceed the benefits; a regulation does not exceed federal requirements; less restrictive and intrusive alternatives have been considered and found less desirable; and the regulation does not unduly and adversely affect the competitive environment in Massachusetts.

Based on these specific criteria, the business community is concerned that the Board of Building Regulations and Standards (BBRS) is currently considering a new Stretch Energy Code as it develops the 9th edition of the statewide building code. Besides the fact that this Stretch Code undermines the statutory requirement that there be a uniform State Building/Energy Code, there is no good reason for it. This proposed energy code is unnecessary and fails the regulatory review standards, and the Baker Administration and the BBRS should not advance it.

The Stretch Energy Code was originally adopted in May 2009, despite strong opposition from the business community.  The code required commercial and residential construction in those communities that voted to adopt it to be approximately 20% more energy efficient than the statewide code. The new stretch energy code would require a 15% increase in energy efficiency over the current code. The Stretch Code has caused confusion among local building inspectors and developers.  Due to this and several other reasons, a new version of the Stretch Energy Code has never been adopted, even when the statewide code changed.  In fact, at the close of the Patrick Administration, the BBRS voted not to advance a new draft of the Stretch Energy Code.  However, in April 2015, this decision was reversed.

Massachusetts is already the most energy efficient state in the nation, with the most aggressive energy efficiency targets.  Furthermore, Massachusetts will be one of only a handful of states in the nation to adopt the 2015 International Energy Conservation Code (IECC) statewide.  Since the Green Communities Act requires the adoption of the latest IECC (every three years), the Commonwealth’s position as a national leader in energy efficiency will be ensured even without a Stretch Code.  Anything beyond that is overly burdensome and creates a significant competitive disadvantage for Massachusetts.

It is important to note that there is no statutory requirement to adopt or update a Stretch Energy Code.  There is no mention of it in any statute, and it is only the Department of Energy Resources’ (DOER) policy that encourages the creation of this code.

According to DOER, the changes to the Stretch Code would take effect automatically in stretch code communities without any local vote.  Many municipalities had no idea they would be subject to an automatic upgrade.

The business community continues to support a uniform statewide building and energy code.  We believe a new Stretch Energy Code is unnecessary, will hinder economic development, and would impose an unfair and difficult burden on local building officials and the construction industry.  We urge the Baker Administration and the BBRS to eliminate the Stretch Energy Code, once and for all, and acknowledge the latest version of the IECC as the only energy code in Massachusetts.

David Begelfer is the CEO of NAIOP Massachusetts, the Commercial Real Estate Development Association.

Water: It’s Time for MassDEP to Take Control

Now is the time for the Massachusetts Department of Environmental Protection (MassDEP) to be given delegated authority by EPA over National Pollutant Discharge Elimination System (NPDES) programs, along with the funding needed to adequately administer the program.

A NPDES permit is required for any discharges of pollutants from a point source into navigable waters of the US. As required by law, EPA or the state must set limits on the amount of pollutants that facilities may discharge into a waterbody.

To date, 46 states have been authorized to administer the federal NPDES permit program. Massachusetts is just one of four states in the nation (along with Idaho, New Hampshire, and New Mexico) where the federal government is in charge of the permit issuance, compliance and enforcement (with 2,990 NPDES permit holders in Massachusetts).

However, MassDEP is better equipped than EPA to concentrate on Massachusetts specific issues and develop permits with a more complete understanding of local conditions.

Currently, MassDEP jointly issues NPDES permits with EPA. Having MassDEP as the sole permitting authority, with EPA limited to an oversight role, would result in a more efficient permitting process. In addition, as the NPDES program continues to evolve in response to increased concerns over issues like nutrient loading and stormwater impacts, MassDEP would have greater control over policy decisions. These could be more effective with a program redesign, the heightened use of science, and coordination on managing all pollution sources in a watershed.

For this delegation to succeed, appropriate resources would be needed (estimated at under $10 million per year) to ensure a carefully coordinated approach to watershed management.

Massachusetts has an excellent national reputation as a leader in environmental protection, permitting, compliance and enforcement. MassDEP has implemented many successful environmental regulatory programs, with some being the models used by other states.  After years of discussion, Massachusetts needs to assume the responsibility for wastewater permitting by taking NPDES authorization over from EPA.

Fraunhofer CSE’s Living Lab – The Future of Sustainable & Energy Efficient Building Technology

LIving Lab

NAIOP’s Gavel members recently toured the Fraunhofer Center for Sustainable Energy Systems (CSE) Living Laboratory, a cutting-edge R&D center for the advancement of sustainable energy systems. Born out of a 2013 energy-retrofit of a 100-year-old building in the Channel Center neighborhood in South Boston, the Lab leverages cutting-edge design concepts and historic architecture alongside in-house research facilities, including a pilot solar module fabrication line, dedicated thermal testing laboratory, and extensive characterization/environmental testing resources. Its mission is to foster economic development through the commercialization of clean energy technologies for the benefit of society.

Besides providing clients with services like testing the energy efficiency of exterior wall designs and new photovoltaic panels, the building is an exhibit for new technologies in HVAC systems, lighting, and energy efficient fenestration.

Fraunhofer CSE’s Building Energy Technology Group applies its expertise in four main areas:

  • Working with clients from industry, academia and government to develop new products
  • Field testing of novel building technologies and materials
  • Evaluating product performance through laboratory testing, field deployments, and modeling, simulation, and analysis.
  • Demonstration projects to acquire real-world performance data

NAIOP members may be interested in learning more about the cutting edge research now underway at the Living Lab. Tours are available by appointment.

Plaintiffs Drop Stormwater Lawsuit Against EPA: NAIOP Applauds Decision & Remains Opposed to RDA as Regulatory Tool

Yesterday, the Conservation Law Foundation and Charles River Watershed Association, plaintiffs in Conservation Law Foundation, Inc., et al v. United States Environmental Protection Agency, et al., voluntarily dismissed the lawsuit without prejudice. NAIOP Massachusetts filed a Motion to Intervene in the case.

The plaintiffs in that case sought to compel EPA to impose a new regulatory program that would have required owners of commercial, institutional, industrial and high density residential properties in the Charles River watershed with one acre or more of impervious area (parking lots, roofs, sidewalks) to apply for a stormwater discharge permit through the use of EPA’s rarely used “Residual Designation Authority” (RDA). NAIOP decided to intervene in the case given the significant impact this duplicative and burdensome regulatory program would have had on property owners in a watershed that includes 35 communities and covers 310 square miles.

“NAIOP has long supported the overall objective of improving water quality throughout the Charles River Watershed, but with compliance costs estimated to be in excess of $1 billion, the RDA approach is simply not the right tool,” said David Begelfer, CEO of NAIOP Massachusetts. “We are pleased the plaintiffs dropped the suit. Such important policy decisions should not be negotiated behind closed doors. NAIOP urges EPA to carefully think through this issue, seek feedback from affected stakeholders, and ensure any potential programs are cost-effective, feasible and fairly allocate the regulatory burdens and costs.”

NAIOP will continue to monitor this issue closely and keep members informed of any new developments.

Good to Great: Developing a Public Private Partnership on Climate Change Resiliency

Yesterday, NAIOP was proud to participate in a Climate Change Resiliency Forum at the State House. NAIOP’s CEO, David Begelfer, joined legislators, climatologists, environmental advocates, a representative from the insurance industry and EEA Secretary Matthew Beaton to discuss this important economic development issue. NAIOP advocated for a public private partnership and echoed the comments we presented to the Baker Administration in the Good to Great report. The following is our weekly excerpt from that report. Comments are encouraged!

Climate change can have significant impacts affecting the overall economy; directly, by damaging structures, and indirectly, by compromising transportation systems, communications, and utilities. An increasing number of extreme weather events and future sea level rise may lead to more frequent and extensive flooding along the coast and inland waterways.

The varying interpretations and projected economic and environmental impacts from climate change and sea level rise demand that the private and public sectors coordinate their common objectives. Unfortunately, to date, there has been a serious lack of coordination or collaboration on this issue. Individual cities and towns are taking their own steps to regulate and respond to climate change and sea level rise. Within MassDEP alone, multiple climate change policies and regulations are being drafted using different climate change projections. All of these regulatory and policy initiatives are focusing on how private development projects should address this issue, and very few have addressed the public sector’s role. For example, capital expenditures will be necessary for equipping existing public infrastructure to meet storm surges. Clearly, having a “climate change proof” building in the middle of a flooded neighborhood, without power or adequate transportation, provides no real public or private benefit.

There is no question this issue will be a significant challenge for the Baker Polito Administration. Addressing climate change and sea level rise requires coordination at the highest level of state government, and the participation of many state agencies. Therefore, NAIOP urges the Administration to consider the following steps to better coordinate how this issue is addressed in order to avoid the calamities that have been suffered by other coastal states:

Create a high level point of contact (Climate Change Chief) for local, state, and federal agencies, as well as the private sector. This position should be located in the Governor’s office or within the Executive Office of Administration & Finance. Given the need for coordination across many facets of state government, and the impact of this issue on the state’s resources, it should not be located in EOEEA. Planning for responses to rising sea levels is an operational and infrastructure challenge, not an environmental policy issue. To ensure consistency across the Administration, the Climate Change Chief should have input on all policies or regulations dealing with climate change. All agency findings and regulations regarding the extent of sea level rise or climate change must not be cost prohibitive to the private sector and should include public funding and participation.

Working closely with the Governor’s office, the Climate Change Chief would pursue the following action items:

  • Establish a structure/partnership with academic and research institutions to identify, develop, test, and incorporate reliable climate change and sea level rise forecasts and climate change preparedness programs.
  • Conduct an inventory of state agency regulations adopted or now under review/proposed dealing with how existing and new public and private development should respond to climate change and sea level rise.
  • Undertake an inventory of state and regional authorities, their threatened assets, and their infrastructure preparedness needs, and identify state monies committed to study climate change and sea level rise. Identify capital funds that should be dedicated to infrastructure upgrades for vital state and regional properties, with a priority toward vulnerable infrastructure.
  • Coordinate the agenda of the state agencies responsible for establishing a target range for sea level rise, determining its effect upon existing infrastructure and future development and developing guidelines for climate preparedness and mitigation planning and review (e.g., MEPA, MassDOT, MBTA, BBRS, MWRA, MassDEP, DPU, Mass Housing, MEMA and CZM).
  • Identify state agency personnel responsible for the review of policies, procedures, and regulations regarding climate change and sea level rise.
  • Ensure that cost-benefit analysis guides policy making. Policymakers should look at programs in terms of maximizing preparedness and resiliency benefits while minimizing burdens on fiscal and other resources.
  • Encourage consistent local efforts to address climate change preparedness including identifying susceptible infrastructure (e.g., mass transit, highways, stormwater systems, energy, fuel, communications, etc.), adopting reliable climate change projections, and establishing guidelines and regulations to incorporate climate change into future planning decisions and outreach programs.

We urge the Governor to coordinate this critical effort to ensure focus and consistency on this economic development issue.

Good to Great: Realigning Resources at Environmental Agencies

The following is our weekly excerpt from NAIOP’s report, Good to Great: Recommendations for the Baker Polito Administration. Comments are encouraged!

When considering a long-term vision for the Commonwealth’s environmental agencies, NAIOP encourages the Executive Office of Energy & Environmental Affairs (EEA) to start by realigning resources to ensure 1) environmental protection and 2) that resources are appropriately allocated to ensure timely and predictable permitting. In recent years, the regulated community has observed that a larger percentage of staff at the environmental agencies is focused on the development of new policies and regulations instead of the expedient implementation of existing regulations (i.e., permit approvals, compliance assistance, etc.). Prompt and predictable permitting is critical for economic development projects and ensures increased tax revenue for the Commonwealth. Compliance assistance programs provide a preventive and cost effective approach to ensuring environmental protection.

Therefore, NAIOP proposes the following recommendations:

  • Tie Permit Fees to Results: Permit streamlining was brought to MassDEP’s doorstep in the late 1980’s. Facing considerable time delays for the issuance of permits with no timetables, NAIOP was a founding member of the MassDEP Fees and Program Advisory Committee that established a fee program for all permits and a retained revenue account in return for the MassDEP’s agreement to set enforceable timetables for administrative review, technical review, and issuance of permits. General results were positive and fees have been adjusted gradually over the years to reflect cost of living increases. Permitting fees went into a dedicated revenue account, which was intended to supplement the MassDEP budget so that it could continue to provide its other non-permitting services. The original committee included NAIOP, AIM, Mass Municipal Association, MASSPIRG, Environmental League of Massachusetts, and other private and public sector representatives. The enacting statute establishing the agreement and authorizing MassDEP to establish the fee program is M.G.L., c. 21A, §18 and the regulations are at 310 CMR 4.00.As the architects of the Program left state government and Massachusetts faced revenue shortfalls, the original agreement was sacrificed for revenues. Gradually the Legislature began to apply permit monies to the MassDEP operating budget. Rather than decreasing the time for permit issuance based upon the lesser number of permits due to a slow economy, the General Fund percentage decreased for the MassDEP budget. As recently as 2013, the Fees Committee wrote to the Governor and to the Ways and Means Committees requesting that the agreement be honored. Business was hesitant to support the Department’s request for additional funding based upon the legislative track record applying fees for operations. NAIOP urges the Baker Polito Administration to reinstate the original agreement and ensure permitting fees are directed to the dedicated revenue account to ensure adequate resources for permit issuance.
  • Increase Use of General Permits: NAIOP encourages all environmental agencies to consider increasing the use of general permits. General permits are more cost effective and achieve the same goal as individualized permits, but do so faster and more cost-effectively and provide a higher level of certainty in outcome (including reducing the risk of permit appeals). In order for this to work, however, it is critical that agencies be committed to making these general permits effective and not so limited in scope or so overly burdened by contingent conditions that they are no longer useful. EEA should conduct an internal review of all programs to identify those that could move, in whole or in part, from individualized permits to general permits.
  • Move to Permit-by-Rule (aka self-certification): Self-certification needs limited staff resources to administer and oversee and uses enforceable third-party certifications to ensure that rules are met and standards are achieved. MassDEP is already using self-certification for some programs, but there are numerous opportunities for expanding the use of this cost-effective and proven regulatory approach.
  • Increase Permitting Staffing for Waterways Program: Waterways is responsible for issuing Chapter 91 licenses for docks, piers, and other water-dependent structures as well as non-water dependent uses and structures on tidelands and filled tidelands. It is involved in almost every major coastal project, including transportation, energy, infrastructure, commercial buildings and housing. Staff has recently been increased to five persons, still woefully inadequate to ensure timely processing of project permitting demands. The lack of staff is holding back the development of many major public and private projects. Additional resources must be committed and dedicated to new employees that focus solely on Waterways permitting and not policy development.
  • Continue Regulatory Reform Implementation: The Regulatory Reform initiative was originally motivated by a reduced budget affecting staff permitting and oversight, but the effort has also resulted in important regulatory and policy changes. Continually reviewing existing regulations to determine if they are needed or if changes are required, and closely examining the costs and benefits associated with new regulations before they are drafted, should be a top priority for the Baker Polito Administration (and is required under Chapter 238 of the Acts of 2012).
  • Provide MassDEP with Delegated Authority over National Pollutant Discharge Elimination System (NPDES) Programs and the Funding Needed to Adequately Administer the Program: As of June 2013, 46 states had been authorized to administer the federal NPDES permit program. Massachusetts is just one of four states in the nation where the federal government is in charge of the permit issuance, compliance and enforcement for the 2,990 NPDES permit holders in Massachusetts. MassDEP jointly issues NPDES permits with EPA. Having MassDEP as the sole permitting authority with EPA limited to an oversight role could result in a more efficient permitting process. In addition, as the NPDES program continues to evolve in response to increased concerns over issues like nutrient loading and stormwater impacts, MassDEP would have greater control over policy decisions. However, appropriate resources would be needed (estimated at approximately $9.5 million per year) to ensure a carefully coordinated approach to watershed management.
  • Concentrate on Implementing & Enforcing Existing Rules and Regulations: Agencies should concentrate on implementing and enforcing existing rules and regulations before expending resources on new program and policy development. This builds on the Regulatory Reform Initiative and is critical for the proper allocation of resources.