Tag: Hurricane Harvey

Hurricane Harvey Client Alert: Tax Filing and Payment Deadlines Extended for Victims

Victims of Hurricane Harvey in some designated areas now have until January 31, 2018 to file certain federal tax returns and make payments.

On August 28, 2017, the US Internal Revenue Service (IRS) announced in a news release that it would postpone various individual and business federal tax return filing and payment deadlines that were to occur on or after August 23, 2017 until January 31, 2018 for certain persons affected by Hurricane Harvey. Specifically, this extension applies to taxpayers located in areas designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance.[1] Any taxpayer with an IRS address of record located within these designated areas will automatically receive the extension. Taxpayers in areas that are later added as qualifying for individual assistance by FEMA will automatically receive the extension as well. Additionally, taxpayers who are outside of the designated area but have necessary records needed to meet deadlines located in a designated area may qualify for the extension, but must contact the IRS to determine eligibility for relief.

As noted above, the specific relief announced by the IRS extends federal tax return filing and payment deadlines for individuals and businesses with original deadlines that would have occurred starting on August 23, 2017 to January 31, 2018. In other words, individuals and businesses will have until January 31, 2018 to file federal tax returns and make federal tax payments that have either an original or extended due date during this period. For individuals, the extension covers 2016 income tax returns that received “automatic” filing extensions until October 16, 2017; however, tax payments associated with these returns are not eligible for the extension because the payments were originally due on April 18, 2017. Additionally, the extension applies to the September 15, 2017 and January 16, 2018 deadlines for making quarterly estimated tax payments. For businesses, the extension covers the October 31, 2017 deadline for quarterly payroll and excise tax returns. Notably, the IRS announcement also states that the IRS will waive late-deposit penalties for federal payroll and excise tax deposits that are normally due on or after August 23, 2017 and prior to September 7, 2017, as long as the deposits are made by September 7, 2017.

[1] When the IRS news release was originally issued on August 28, there were 18 counties in areas designated by FEMA as qualifying for individual assistance. By August 30 (and as of August 31), FEMA had designated another 11 counties, bringing the total counties eligible for this relief up to 29.

This post was written by Donald-Bruce Abrams, Casey S. August, Jennifer Breen and William P. Zimmerman of Morgan, Lewis & Bockius LLP. All Rights Reserved. Copyright © 2017
For more legal analysis go to The National Law Review 

Contingent Business Interruption Coverage: Insuring the Far-Reaching Effects of Tropical Storm Harvey

Manufacturers and producers are keenly aware of the value provided by business interruption coverage. Typically, this coverage is sold to companies as one of several coverages under their commercial property insurance package. Business interruption coverage is generally triggered by physical damage to a company asset (e.g., a manufacturing plant), which causes a suspension of business activities resulting in a loss of business income.

Tropical Storm Harvey has forced manufacturers and producers across Southeastern Texas to shut down operations while repairing their damaged facilities. These companies will turn to their business interruption carriers to recoup their business income lost during this period. However, for companies doing business in that region, but physically located outside the reach of Harvey, business interruption coverage may not protect them from lost profits caused by the storm.

For example, say a company owns a manufacturing facility in California where it assembles cars. The manufacturer purchases its engines from a company located in the flood-ravaged portions of Texas. If the Texas company is unable to build and deliver engines to California, the manufacturer might be unable to assemble cars for days, possibly weeks. Any business income losses incurred by the California company are unlikely to trigger standard business interruption coverage because the California manufacturing facility did not suffer any physical damage. To fill the gap, manufacturers and producers often purchase contingent business interruption coverage (CBI).

CBI coverage is, in effect, an extension of business interruption coverage to the business activities of suppliers and customers. If an upstream supplier or downstream customer suffers an interruption in business activities, CBI coverage should kick in to reimburse the policyholder for certain lost profits. CBI coverage can be written on specific properties owned by suppliers or customers and/or on a blanket basis.

The value of CBI coverage may vary depending on the precise language of the coverage grant.

Compare Millennium Inorganic Chems. Ltd. v. National Union Fire Ins. Co., 744 F.3d 279, 285-86 (4th Cir. 2014) (CBI coverage was expressly limited to “direct contributing properties” therefore, the presence of an intermediary between policyholder and supplier precluded coverage) to Archer-Daniels-Midland v. Phoneix Assur. Co., 936 F. Supp. 534, 544 (S.D. Ill. 1996) (CBI coverage was not limited to “direct suppliers,” therefore, CBI coverage was appropriate despite an intermediary in the supply chain).

There are a myriad of issues that arise when a company tenders a claim for CBI coverage, all of which need to be carefully considered on a case-by-case basis. For manufacturers and producers that rely on companies in Southeastern Texas, CBI coverage may become vital.

This post was written by Joshua B. Rosenberg of BARNES & THORNBURG LLP© 2017

Federal Immigration Resources Assisting in Hurricane Response in Texas

U.S. Customs and Border Protection (CBP) is deploying staff and equipment for search and rescue efforts and to work at local, state, and federal emergency operations centers in Texas in response to Hurricane Harvey.

Hurricane Harvey hit Texas just as the state’s plan to outlaw sanctuary cities is about to go into effect.  Texas also has joined other states in threatening to sue President Donald Trump if he does not phase out DACA starting on September 5th.

Some of Houston’s more than 500,000 undocumented immigrants reportedly are afraid to seek shelter, fearing deportation.

To encourage undocumented workers in need of assistance to come into shelters, FEMA issued a statement, “Hurricane Harvey Rumor Control,” asking “all persons to follow the guidance of local officials and seek shelter regardless of their immigration status.”

ICE and CBP explained that:

It is not conducting immigration enforcement at relief sites such as shelters or food banks. In the rare instance where local law enforcement informs ICE of a serious criminal alien at a relief site that presents a public safety threat, ICE will make a determination on a case-by-case basis about the appropriate enforcement actions.

In an effort to assuage fears, the Mayor of Houston has offered to personally represent any individual facing deportation after seeking disaster relief.

In the meantime:

  • 50 CBP agents are staffing a U.S. Coast Guard Emergency Operations Center in Robstown, Texas

  • CBP is providing assistance to border patrol agents in Corpus Christi

  • CBP aircraft from Tucson are in Texas, along with 12 aircrew members, 5 support personnel and 3 agents certified in swift-water rescues

  • CBP’s Air and Marine Operations sent 4 hoist-capable Blackhawks to Houston to help with rescues

  • 50 Tucson area Special Operations Detachments agents are supporting public safety operations

Once the immediate danger subsides, workers will be needed to participate in the billion-dollar rebuilding effort. “Eduardo Canales, director of the South Texas Human Rights Center, said the state is at risk of losing much-needed low-wage workers – cleaners, cooks, carpenters and landscapers – who because of the crackdown may not stick around to help Texas communities recover from the storm.” Even before the hurricane, there was concern that undocumented workers would be leaving the state because of perceived anti-immigrant sentiment.

Beyond the emergency rescue and relief efforts, international trade and travel also has been affected and CBP is coordinating with the U.S. Coast Guard and port authorities to resume operations as soon as possible.

This post was written by Meredith K. Stewart of Jackson Lewis P.C. © 2017

For more legal analysis go to The National Law Review

EPA Ready to Support FEMA, State Efforts on Hurricane Harvey

EPA has an organized emergency response program for responding to man-made and natural disasters and is positioned to support the Federal Emergency Management Agency (FEMA), state, local, and tribal partners in response to Hurricane Harvey.

“I am in regular contact with EPA Region 6 and want to commend them for their leadership and preparation,” said EPA Administrator Scott Pruitt. “EPA is closely coordinating with state and regional partners, and we have teams standing by to support FEMA.  EPA is ready to respond to anything that may occur due to Hurricane Harvey.”

EPA headquarters emergency operations center is monitoring the storm closely and making preparations to activate in order to support states and regions affected by the storm.

EPA’s Region 6 office in Dallas is taking action to ensure that Superfund sites are secured in advance of the storm, to assist approximately 300 public drinking water system rapid assessments, and to seamlessly integrate emergency response activities with Texas, Louisiana, and other federal response agencies.

EPA supports hurricane preparedness and response in a number of ways, including:
•    Addressing Fuel Shortages: The Clear Air Act allows EPA Administrator Pruitt, in consultation with Energy Secretary Perry, to waive certain fuel requirements to address shortages that occur as a result of the storm. If Administrator Pruitt determines that extreme and unusual fuel supply circumstances exist in a state or region as a result of the hurricane, a temporary waiver can help ensure an adequate supply of gasoline is available in the affected area, particularly for emergency vehicles. EPA has an experienced team standing by to expedite handling of any fuel waiver requests by the states.

•    Monitoring Public Water Systems: Water systems can be severely impacted during hurricanes due to storm surge, flooding, or loss of power. EPA Region 6 has developed a tracking system for us to identify systems in the storm’s pathway. About 300 public drinking water systems are in the path (red zone) of hurricane Harvey in Texas. Both Texas Commission on Environmental Quality and Louisiana Department of Hospitals have uploaded their potentially impacted systems into Response Manager, which enables planning for rapid assessments to restore water systems after the storm passes and flood waters recede. Following the storm, and if the state requests federal assistance, EPA conducts damage assessments of both drinking water and wastewater systems to identify impacts to critical assets and assist in the recovery.

•    Securing Superfund Sites: EPA assesses conditions at the NPL Superfund sites in the storm’s pathway and tasks each Superfund National Priorities List (NPL) remedial site manager to assess conditions and make on-site preparations for high winds and heavy rainfall.  Following the storm and receding floodwaters, EPA conducts rapid assessments to identify damage at sites and initiate cleanup plans if necessary. Any on-site activities at sites located in the storm’s path are ceased until the all clear is given and on-site equipment is secured.  In addition, freeboard for lagoons or ponds is increased to accommodate forecasted rainfall if possible. After a hurricane makes landfall and any flooding recedes, the EPA remedial managers will conduct assessments of each Superfund NPL site to ensure no damage has occurred.

•    Assessing Conditions at Major Industrial Facilities: EPA assesses conditions at the major industrial facilities in the storm’s pathway to identify potential impacts and countermeasures. Following the storm and receding floodwaters, spills and releases are reported to the National Response Center. NRC notifies US Coast Guard or EPA based on preapproved jurisdiction boundaries. EPA conducts follow up inspections and damage assessments in response to reports within EPA jurisdiction.

As EPA prepares to support FEMA and its local and state partners, it continues to focus its message on the importance of public safety. For information and updates from EPA, please visit EPA’s emergency response website, www.response.epa.gov/Hurricaneharvey2017.

This post was written by the United States Environmental Protection Agency © Copyright 2017
For more Environmental Law analysis, go to The National Law Review