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The National Law Forum - Page 462 of 753 - Legal Updates. Legislative Analysis. Litigation News.

New Report on Renewable Energy as an Airport Revenue Source

The Airport Cooperative Research Program (ACRP) has recently published a guidebook on Renewable Energy as an Airport Revenue Source. The link to the guidebook on the ACRP website is here. David Bannard is a co-author of the guidebook, for which the lead authors were Stephen Barrett and Philip DeVita of HMMH.

solar energy, sustainable, clean power, renewable, source, sun

Airports are exploring non-traditional revenue sources and cost-saving measures. Airports also present a unique and often accommodating environment for siting renewable energy facilities, from solar photovoltaics (PV) to thermal, geothermal, wind, biomass and other sources of renewable energy. Although the guidebook focuses on the financial benefits of renewable energy to airports, it also notes other business and public policy benefits that can accrue from use of renewable energy at airports.

The guidebook includes case summaries of 21 different renewable energy projects at airports across the United States and in Canada and the U.K. Projects summarized include solar PV, wind, solar thermal, biomass, and geothermal technologies. In addition the guidebook examines factors to be considered when evaluating airport renewable energy projects, conducting financial assessments of airport renewable energy and issues relating to implementing airport renewable energy projects. Airports present unique challenges and opportunities for development of renewable energy facilities. The ACRP’s recent publication helps both airport operators and renewable energy providers and financiers understand and address many of these complex issues presented in the airport environment.

ARTICLE BY David Y. Bannard, Jason W. Allen & Jeffery R. Atkin of Foley & Lardner LLP

© 2015 Foley & Lardner LLP

EPA Releases Additional Elements of President Obama’s Climate Action Plan

On August 18, 2015, EPA released additional components of President Obama’s Climate Action Plan.  The four separate actions are intended to reduce greenhouse gases and other emissions from the oil and natural gas sector.  The newly-released components include:clean environment, pollution, climate action plan, EPA, environmental protection agency

1) Additional New Source Performance Standards;

2) New Control Techniques Guidelines;

3) Proposed revisions to the regulatory definition of covered oil and gas equipment; and

4) A proposed Federal Implementation Plan for Indian Country New Source Review.

Each is discussed in turn.

New Source Performance Standards

First, EPA has proposed additional New Source Performance Standards that will:

  • Reduce 95% of the methane and VOC from compressor stations, specifically requiring modifications to wet seal centrifugal compressors and replacement of rod packing at reciprocating compressors based on a set number of hours of operation or route emissions into a closed vent system.

  • Establish a standard bleed rate limit across all natural gas-driven pneumatic controllers.

  • Establish a lower standard (zero) bleed rate limit at natural gas processing plants.

  • Reduce emissions from all pneumatic pumps at different rates and with different technologies.

  • Require “green completions” at hydraulically fractured well sites, using capture and combustion devices to reduce emissions.

  • EPA reconsidered various issues from the 2012 proposals, and is proposing actions concerning such issues as storage vessel monitoring, Leak Detection and Repair requirements, monitoring methods, and fugitive emission issues.

Although EPA has proposed the above New Source Performance Standards, EPA is also soliciting comment on “alternative approaches” that would meet the above guidelines.  EPA appears willing to consider alternative approaches because it has encouraged companies to reduce emissions in numerous ways voluntarily over the last several years, including as recently as June 2015 with its modified Energy Star program, and EPA indicates it does not want to impede equivalent reduction strategies.

VOC emission Guidelines from certain oil and gas facilities

Second, EPA is proposing Control Techniques Guidelines (CTGs) for reducing VOC emissions from certain oil and gas facilities in the northeast Ozone Transport Region.  These guidelines, proposed under Clean Air Act (CAA) Section 172(c)(1), will be used by states to set “reasonably available control technology” for existing sources of emissions.  CTGs are recommendations for technologies and practices to reduce emissions from existing sources in certain ozone non-attainment areas.  States may be required to modify their State Implementation Plans for certain sources within two years after the final CTGs are issued.

Amendments to what facilities are “adjacent” for permitting purposes

Third, EPA is proposing to define the term “adjacent” for purposes of evaluating when oil and gas equipment and activities are considered part of the same source.  EPA proposes two alternatives: One defines “adjacent” by reference to proximity; the other in terms of function. EPA requests comment on both definitions.  Either approach represents a potential change to current definitions as many oil and gas development wells are located in close proximity but in such a manner as that avoids meeting EPA’s traditional test as a “common source.” “Common sources” can be classified as “major sources” with more stringent emission limits.

Proposed Federal Implementation Plan for Indian Country

Last, EPA is proposing a Federal Implementation Plan (FIP) for Indian Country Minor New Source Review.  EPA required tribes administering the CAA to establish minor New Source Review programs in 2011.  This FIP will be imposed in areas where acceptable programs have not been implemented.  Because many oil and gas well sites are “minor” new sources, the FIP will provide guidance on air permitting for drilling in tribal territories.

More information, including the proposed rules and fact sheets, can be found at EPA’s website:  http://www.epa.gov/airquality/oilandgas/actions.html.

ARTICLE BY Jane E. Montgomery of Schiff Hardin LLP

© 2015 Schiff Hardin LLP

NLRB Calls Out Punt Team and Declines Jurisdiction Over Northwestern University Football Players

In a mild surprise given the current constitution of the Board (read – majority appointed by President Obama), the NLRB declined to assert jurisdiction in ruling on the petition of Northwestern University’s scholarship football players to unionize.  However, in a display of special teams not seen on a football field in Evanston, Illinois since the days of John Kidd, the NLRB reached its decision without determining if scholarship players were “employees” under the National Labor Relations Act.  Even with this limitation, it is clear competitive balance considerations for NCAA Division I sports has received great deference as a policy matter in a legal dispute.

I will not take this opportunity to point out my initial forecast that the NLRB would find this case extremely unique for its jurisdiction and the original decision by the Chicago NLRB regional office would be reassessed given the potential effect on permissible amateurism.  Not doing it.  It is sufficient to note this decision affirms the desire of the NLRB to see the student-athlete/employee question answered by Congress and/or the NCAA member institutions, although not necessarily in that order.

A fair question in reading the Board’s decision is whether the same result would have occurred if the “Power 5” conferences had not recently enacted measure to provide athletic aid for the full cost of attendance and extra benefits for scholarship athletes.  Since Northwestern University, as a member of the Big Ten, is subject to these new rules, it provided a floor for the enhancement of student-athlete benefits.  The Board noted this enhancement, even though it occurred after the scholarship football players filed their petition and there is no indication it would have been sufficient for collective bargaining purposes.

As the National Labor Relations Act does not cover public employees, it is important to remember the majority of Division I student-athletes participating in revenue-generating sports attend state universities.  The ability of public employees to organize for collective bargaining is governed by state law.  While the NLRB’s decision notes that Ohio and Michigan have recently enacted legislation which precludes union organization by student-athletes of their state universities (putting those perpetual lovebirds, the University of Michigan and The Ohio State University in the same basket), keep an eye on states like Connecticut and Pennsylvania which have recently considered legislation that goes the opposite direction to explicitly provide student-athletes the status of employees for purposes of collective bargaining.

Since this legal issue is by no means resolved, private NCAA institutions are still advised to make sure that NCAA and university-sponsored rules which govern practice time, academic advice and progress, athletic-related activities, and student-athlete wellness are monitored for compliance.  As a best practice, institutions should consider third-party compliance audits which not only uncover hidden legal vulnerabilities, but also are helpful in defusing the concerns which could lead to an organizational effort by the football or basketball team.

ARTICLE BY Tyrone P. Thomas of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

©1994-2015 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Second Circuit: MLB “Fanfest” Properly Treated as Exempt Recreational Establishment

Last year, Judge John G. Koeltl of the Southern District of New York ruled that individuals who served as volunteers at the 2013 Major League Baseball All Star Weekend FanFest, a four-day event centered around the All Star Game, were not entitled to minimum wage because they were “employed by an establishment which is an amusement or recreational establishment . . . [which did] not operate for more than seven months in any calendar year.”  On Friday, the Court of Appeals for the Second Circuit affirmed that decision.  Chen v. Major League Baseball, 2014 U.S. Dist. LEXIS 42078 (S.D.N.Y. Mar. 25, 2014).

The appeals court’s ruling focused on what constituted the operative “establishment” for purposes of applying the exemption: Major League Baseball conceded that if the “establishment” included the league along with FanFest, MLB did not meet the criteria. Citing Supreme Court precedent interpreting the now-repealed “retail or service” exemption, the Court concluded that an establishment for purposes of the seasonal amusement or recreational exemption is a “distinct physical place of business.” Because the Complaint conceded that FanFest took place at New York City’s Javits Center, and not at MLB’s offices or any other physical place controlled by MLB, that “physical separation [wa]s determinative.” Having established FanFest as the operative “establishment”, the Court ruled that Plaintiff’s Complaint itself clearly established the two exemption criteria: FanFest operated for not more than 7 months and was “amusement or recreational nature.” As to the latter, Plaintiff’s characterization of FanFest as a “theme park” established its qualifying nature.

Chen is a highly technical ruling, but instructive to employers having multiple establishments potentially qualifying for the exemption. The opinion, like Judge Koeltl’s below, declined to address Plaintiff’s claim that if the amusement or recreational exemption was inapplicable Plaintiff was entitled to minimum wage for all hours worked and could not be treated as an unpaid volunteer.

ARTICLE BY Noel P. Tripp of Jackson Lewis P.C.

Jackson Lewis P.C. © 2015

Switzerland Is the First Country to Lift Some Sanctions on Iran

Certain US sanctions on Iran may be lifted mid to late 2016 or even later.badge_button_switzerland_flag_800_2222

On August 13, Switzerland became the first country to formally lift certain sanctions on Iran, following the announcement of the Iran nuclear deal this past July. Switzerland is not a party to the Iran nuclear deal.

The Swiss Federal Council made the decision, which is a seven-member executive council that constitutes the federal government of Switzerland and serves as the Swiss collective head of government and state. This action nullifies a ban on precious metals transactions with Iranian governmental bodies and the requirement to report trade in Iranian petrochemical products to the Swiss government. It also eliminates an obligation to report to the Swiss government the transport of Iranian crude oil and petroleum products and certain rules on insurance and reinsurance policies linked to such transactions. In the financial sector, threshold values for reporting and licensing obligations in relation to money transfers from and to Iranian nationals were increased tenfold.

These Swiss measures had already been suspended since January 2014, but by lifting them on an apparently more formal or permanent basis, the Swiss government patently appears to be sending a far larger political message to sanctions compliance personnel. The Swiss government’s announcement stated, in part, the following:

Today’s decision by the Federal Council underlines its support for the ongoing process to implement the nuclear agreement, and its confidence in the constructive intentions of the negotiating parties. The Federal Council also wishes to signal that Switzerland’s positioning with respect to Iran, which was developed and maintained over a number of years, should be used to promote a broad political and economic exchange with Iran. In recent decades, Switzerland has pursued a consistent, neutral and balanced policy with regard to Iran . . . . Should implementation of the agreement fail, the Federal Council reserves the right to reintroduce the lifted measures.

It seems clear that the Swiss Federal Council is signaling that Switzerland is eager to resume normal business with Iran. Meanwhile, however, US Department of State spokesman Mark Toner said US sanctions continue to remain in place and penalties would still apply to any country or company that violates them. He told reporters that the United States wasn’t informed in advance of the Swiss move to drop its sanctions before Iran has taken the promised steps to curb its nuclear program and before the United States, European Union, and United Nations have removed their penalties.

It is also important to remember that for now, US secondary Iran sanctions will continue to remain in effect against foreign companies for probably the next 12 months or until the implementation day, no matter the consequence of this Swiss Federal Council action.

Moreover, “US Persons” are prohibited from entering into executory contracts for Iran-related transactions until US sanctions are lifted after implementation day. The US Department of State has recently suggested that that day may fall in summer or autumn of 2016, depending if and whether the International Atomic Energy Agency can certify that Iran has taken the required steps under the Iran nuclear deal.

“US persons” means US nationals, US permanent resident aliens (“Green Card holders”), entities incorporated in the United States, individuals or entities in the United States, or entities established or maintained outside the United States that are owned or controlled by a US person. For a US person to sign such an executory contract before implementation day would be a dealing in property or an interest in property involving Iran or a Specially Designated National, which is prohibited by current US regulations as applicable to US persons. The current Iran sanctions regulations expressly state that such executory contracts are property or an interest in property because they involve “contracts of any nature whatsoever, and any other property, real, personal, or mixed, tangible or intangible, or interest or interests therein, present, future, or contingent.”

On the other hand, it appears that non–US persons (as defined above) that have no US nexus (e.g., not incorporated in the United States or owned or controlled by a US person), that do not act in or through the United States or a US person and that otherwise are not generally subject to US jurisdiction may enter into executory contracts with Iran without risk of exposure of an Office of Foreign Assets Control (OFAC) enforcement case for so doing. Even in these cases, potential non–US person investors in Iran are well advised to seek clearance from the relevant regulators that these contracts do not violate United Nations, European Union, or other non–US sanctions.

At this time, it is unclear to what extent entities established or maintained outside the United States that are owned or controlled by a “US person” will be able to engage in trade with Iran after implementation day occurs. OFAC has indicated that it will resolve this question in due course, and at that time, it will issue appropriate guidance.

ARTICLE BY Louis Rothberg & Margaret M. Gatti of Morgan, Lewis & Bockius LLP
Copyright © 2015 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

President Obama Drafts Executive Order That Would Require All Federal Government Contractors and Their Subcontractors to Provide Paid Sick Leave

President Obama recently drafted an executive order that would require companies that contract with the federal government to provide paid sick leave to their employees.  Under the draft order, federal contractors and their subcontractors would be required to provide at least 56 hours (7 days) of paid sick leave per year to employees.  medical, doctor, healthcare, sickness, medicine, paid sick leaveEmployees would be able to use such leave for the following reasons:

1. For their own care;

2. To care for a family member, including a child, parent, spouse, domestic partner or other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship; and

3. To seek medical attention, obtain counseling, seek relocation assistance from a victim services organization or to take legal action if the need for such services or leave relates to domestic violence, sexual assault or stalking.

In addition, paid sick time accrued by a former employee would need to be reinstated to the employee if he/she is rehired within 12 months after separating employment.

Under the draft order, the Secretary of the Department of Labor would be required to publish detailed regulations implementing the order by September 30, 2016.  The order would generally apply to contracts solicited or entered into on or after January 2017.

A copy of the proposed order can be found here (New York Timessubscription may be required).

ARTICLE BY Rufino Gaytán & Deborah Rehorst of Godfrey & Kahn S.C.
Copyright © 2015 Godfrey & Kahn S.C.

China Devalues the Yuan in Biggest Single-Day Markdown in 20 Years

The People’s Bank of China—the country’s central bank—devalued its notoriously tightly controlled currency (Chinese Renminbi) by 1.9 percent against the U.S. dollar between Monday night and Tuesday morning, Aug. 11, 2015. Such devaluation represents the greatest single-day markdown since 1994, following years of international political rhetoric concerning China’s exchange rate control.

Precisely because the Chinese government kept the yuan tied to a strong dollar, the exports of other countries have become more competitive as their currencies have fallen against the yuan over the past year. This has resulted in a weakening export sector, upon which the Chinese economy is very much dependent. Other contributing factors to the currency devaluation are the country’s slowing, albeit still net-positive, second-quarter GDP in comparison to prior years and, perhaps, a desire to reign in capital outflows from China, which totaled $162 billion for the first half of this year alone. Add to this backdrop the fact that the central bank has repeatedly cut interest rates to boost lending and spur a slowing economy over the past year, thereby also decreasing returns on domestic investments and forcing investors to look outwardly for higher yields.

While Beijing is focused on the country’s growth and macroeconomic prosperity, the move raises questions as to how a weaker yuan will affect the very active market of Chinese foreign investors.

However, the question now is how the devaluation of the yuan will impact foreign direct investment by Chinese in the real estate sector and as well in EB-5 investments.

ARTICLE BY Shaun K. Staller of Greenberg Traurig, LLP

©2015 Greenberg Traurig, LLP. All rights reserved.

Multistakeholder Group Seeks Comment on Draft Framework for IoT Device Manufacturers

Earlier this week, the Online Trust Alliance released a draft framework of best practices for Internet of Things device manufacturers and developers, such as connected home devices and wearable fitness and health technologies.  The OTA is seeking comments on its draft framework by September 14.

The framework acknowledges that not all requirements may be applicable to every product due to technical limitations and firmware issues.  However, it generally proposes a number of specific security requirements, including encryption of personally identifiable data at rest and in transit, password protection protocols, and penetration testing.  In addition, it proposes the following requirements:

  • A privacy policy that is readily available to review prior to product purchase, download or activation, and that discloses the consequences of declining to opt-in or opt-out of policies on key product functionality and features.

  • A privacy policy display that is optimized for the user interface to maximize readability.  The working group recommends layered privacy policies for this purpose.

  • Conspicuous disclosure of all personally identifiable data collected.

  • Data sharing is limited to service providers that agree to limit usage of data for specified purposes and maintain data as confidential or to other third parties as clearly disclosed to users.

  • Disclosure of the term and duration of the data retention policy.  In addition, the framework goes on to state that data generally should be retained only for as long as the user is using the device or to meet legal requirements.

  • Disclosure of whether the user has the ability to remove or anonymize personal and sensitive data other than purchase history by discontinuing device use.

  • Disclosure of what functions will work if “smart” functions are disabled or stopped.

  • For products and services designed to be used by multiple family members, the ability to create individual profiles and/or have parental or administrative controls and passwords.

  • Mechanisms for users to contact the company regarding various issues, transfer ownership, manage privacy and security preference.

In addition, the draft framework makes various other recommendations that go above and beyond the proposed baseline requirements, although acknowledging that the recommendations may not be applicable to every device or service.

ARTICLE BY Elizabeth H. Canter of Covington & Burling LLP

© 2015 Covington & Burling LLP

Federal Reserve Issues Clarification of Debit Card Interchange Rule in Response to Court Action

On August 10, the Board of Governors of the Federal Reserve System (Board) clarified Regulation II (Debit Card Interchange Fees and Routing) regarding the inclusion of transaction-monitoring costs in the interchange fee standard.

Regulation II implements, among other things, standards for assessing whether interchange transaction fees for electronic debit transactions are reasonable and proportional to the cost incurred by the issuer, as required by section 920 of the Electronic Fund Transfer Act (EFTA). On March 21, 2014, the US Court of Appeals for the DC Circuit reversed an earlier decision by the US District Court for the District of Columbia and largely upheld Regulation II against a challenge to the rule by merchant groups. The court of appeals found that one aspect of the rule––the Board’s inclusion of transaction-monitoring costs in the interchange fee standard––required further explanation, and remanded the matter for further proceedings. Specifically, the court of appeals agreed with the Board’s position that “transactions-monitoring costs can reasonably qualify both as costs ‘specific to a particular transaction’ (section 920(a)(4)(B)) and as fraud-prevention costs (section 920(a)(5)).” The court held, however, that the Board had not adequately articulated its reasons for including transactions-monitoring in the interchange fee standard rather than in the fraud-prevention adjustment. Among other rationales, the Board explained the following:

Section 920(a)(4)(B) [of the EFTA] specifically directs the Board to consider in establishing the interchange fee standard the costs “incurred by the issuer for the role of the issuer in the authorization, clearance or settlement of a particular transaction.” Transactions-monitoring is an integral part of the authorization process, so that the costs incurred in that process are part of the authorization costs that the Board is required by the statute to consider when establishing the interchange fee standard.

It remains to be seen what action, if any, various challengers to the rule will take following the issuance of the clarification by the Board.

Read more.

ARTICLE BY Jeffrey M. Werthan of Katten Muchin Rosenman LLP

©2015 Katten Muchin Rosenman LLP

IRS Identifies Certain Basket Derivatives as Reportable Transactions

On July 8, 2015, the Internal Revenue Service (the “IRS”) identified as reportable transactions certain derivative contracts that reference a basket of assets. The transactions identified by the IRS are referred to by the IRS as “basket option contracts” or “basket contracts.” In these transactions, a purchaser enters into a contract that is IRS Seal logodenominated as an option, a notional principal contract (e.g., a swap), a forward contract or other derivative contract with a counterparty to receive a return based on the performance of a notional basket of referenced assets (the “reference basket”). The reference basket may include (1) “actively traded personal property” (e.g., publicly traded stock), (2) interests in hedge funds or other entities that trade securities, commodities, foreign currency or similar property, (3) securities, (4) commodities, (5) foreign currency, or (6) similar property or positions in such property. The purchaser or a designee named by the purchaser will either determine the assets that comprise the reference basket or design or select a trading algorithm that determines the assets. While the contract remains open, the purchaser has the right to request changes in the assets in the reference basket or the specified trading algorithm.

The purchaser generally takes the position that short-term gains and interest, dividend and other ordinary periodic income from the performance of the reference basket is deferred until the instrument terminates and, if the instrument is held for more than one year, that the entire gain is treated as longterm capital gain. According to the IRS, the purchaser may be using the instrument to inappropriately defer income recognition, convert ordinary income and short-term capital gain into long-term capital gain and/or avoid U.S. withholding tax.

Anyone who has participated in a basket option contract, basket contract or substantially similar transaction is now subject to certain IRS reporting obligations. The following parties are generally considered participants by the IRS and are, therefore, subject to these reporting obligations: (1) the purchaser, (2) if the purchaser is a partnership, any general partner of the purchaser, (3) if the purchaser is a limited liability company, any managing member of the purchaser, and (4) the counterparty.

Each participant in a basket option contract, basket contract or substantially similar transaction that was in effect on or after January 1, 2011 must report the transaction to the IRS, provided that the period of limitations did not end on or before July 8, 2015. If a participant has already filed its tax return for a year in which it participated in a basket option contract, basket contract or substantially similar transaction and the period of limitations has not ended, the participant needs to report the transaction to the IRS by November 5, 2015. Significant penalties and an extended statute of limitations may apply if a reportable transaction is not timely reported. In addition to the reporting obligations, a participant in a reportable transaction must also retain copies of all material documents and other records relating to the transaction.

ARTICLE BY Investment Services Group of Vedder Price

© 2015 Vedder Price