Articles, Alerts & Perspectives

The American College of Environmental Lawyers (ACOEL)

(By Donald C. Bluedorn II)

On November 3, 2022, Pennsylvania Governor Wolf signed House Bill 1059, which amends the Commonwealth’s Tax Reform Code and, among other things, establishes the Pennsylvania Economic Development for a Growing Economy (“PA EDGE”) program, consisting of tax credits for four economic areas.  https://www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?sYear=2021&sInd=0&body=H&type=B&bn=1059.

Much of the publicity around the bill has focused on the tax credits available to promote a “hydrogen hub” and the use of hydrogen-based technologies.  Indeed, the bill provides for tax credits up to $50 million per year, or a total of $1 billion over a 20-year period.

In explaining his support for House Bill 1059, Governor Wolf started by noting his belief in the importance of the role of hydrogen in addressing the effects of climate change.  “In its most recent report, the Intergovernmental Panel on Climate Change notes that ‘hydrogen is a promising energy carrier for a decarbonized world,’ and highlights hydrogen’s potential to ‘provide low-carbon heat for industrial processes or be utilized for direct reduction of iron ore.’”  https://www.governor.pa.gov/wp-content/uploads/2022/11/20221103-1059.pdf.

The Governor then went on to note his belief that the use of hydrogen must be tied responsibly to the reduction of emissions and the consideration of Environmental Justice.

That said, I recognize that in order for hydrogen to play a meaningful role in reducing emissions, we must ensure that hydrogen used is truly “clean” through stringent emissions standards. We must also commit to strong and equitable community protections to prevent impacts to already overburdened communities and to guide benefits to communities that need them.

Perhaps the most controversial provisions of the bill, or at least those that drew the most attention in much of the press, were the provisions that also authorized a tax credit for the use of natural gas in the manufacturing of petrochemicals or fertilizers. …

Legal Intelligencer

(by Alex Farone and Janet Meub)

Navigating the Family and Medical Leave Act (FMLA) in the COVID era, including the pandemic-related amendments, has felt like a minefield for many employers. Now that the surge of COVID-related uses of FMLA leave has largely passed, a new aspect of statutory compliance is emerging as a hot-button issue: treatment of remote workers under the FMLA.

The FMLA provides eligible employees with up to 12 weeks of protected, unpaid leave per year for qualifying family or medical reasons. In order to be eligible for FMLA coverage, four elements must be met:

1. The employer is a covered employer under the Act, meaning it has at least 50 employees for at least 20 weeks in the current or previous year;
2. The employee must have worked for the employer for at least 12 months, not necessarily consecutively;
3. The employee must have worked at least 1250 hours in the last 12-month period; and
4. The employee must be employed at a worksite where the employer employs at least 50 employees within a 75-mile radius.

Many employers do not pay much consideration to the last element, also known as the “50/75 Rule,” likely because the first element requires 50 employees and in the majority of instances those 50 employees are by default going to work within a 75-mile of the employer’s office. However, in the COVID era and beyond, more and more employees are permitted to work remotely on a full-time basis, and employers are hiring remote employees all over the country, regardless of the location of the employer’s physical office or operations.

The FMLA itself does not address remote workers, but the Department of Labor’s regulations specify that an employee’s personal residence is not a worksite for employees who work at home by telecommuting. …

PIOGA Press

Sources for below article: Pennsylvania Oil & Gas Landowner Alliance (POGLA) Post – November 6, 2022, Senator Yaw Press Release dated 11/7/22, and ‘Pennsylvania General Assembly Enacts Senate Bill to Amend Oil and Gas Lease Act’ alert by Babst Calland published on 11.8.22

(By Chelsea Heinz and Devlin Carey)

Legislation aimed at ensuring landowners are afforded a clear and distinct assessment of royalties paid to them through lease agreements with oil and natural gas operators has been signed by Governor Tom Wolf.

On November 3, 2022, the Pennsylvania General Assembly enacted Senate Bill 806, which amends the Oil and Gas Lease Act of 1979 (P.L. 183, No. 60). The new act seeks to increase transparency around the payment of royalties from oil and natural gas operators to landowners pursuant to their lease agreements.

Senator Gene Yaw (R-23) believes the act will address recent concerns among landowners regarding the way in which royalties are being calculated, described and ultimately paid.

“Concerns have been expressed by land and mineral owners for some time now centered on the lack of transparency that can come with deductions from their royalty payments,” Yaw said. “In some cases, general deductions with little to no description are subtracted from landowner’s checks, leaving them with a fraction of what was promised. “My legislation would not impact lease agreements, but it would require entities making payments to landowners to provide more description, clarity and uniformity on their royalty check statements, something I’ve heard a great deal about from leaseholders across our region,” Yaw said. “This proposal is designed to help ensure all parties feel their lease agreements are executed as intended, and it will help mitigate concerns that have developed in recent years.”

Senate Bill 806, now Act 153 of 2022, was supported by various agencies and organizations, including the Pennsylvania Farm Bureau, the Pennsylvania Oil and Gas Landowner Alliance, the Marcellus Shale Coalition, Bounty Minerals, the Pennsylvania Independent Oil & …

PIOGA Press

(By Gary Steinbauer, Gina Falaschi and Christina Puhnaty)

On October 14, 2022, the U.S. Environmental Protection Agency published a proposed rule that would require all emission sources subject to the Agency’s major New Source Review (NSR) permitting program to consider fugitive emissions when evaluating whether a new source or physical or operational change triggers the stringent major NSR permitting requirements. 87 Fed. Reg. 62,322 (Oct. 14, 2022) (Proposed Rule). The treatment of fugitive emissions, i.e., those “which could not reasonably pass through a stack, chimney, vent, or other functionally equivalent opening,” under the major NSR permitting program has been controversial for decades. While EPA predicts that the Proposed Rule will have limited impact on the regulatory community, EPA and state air permitting authorities may now place even greater pressure on industry to predict and quantify “fugitive emissions” from physical or operational changes to their facilities.

The major NSR permitting program is the Clean Air Act’s permit program that applies to the construction of new “major sources” and “major modifications” (i.e., qualifying physical or operational changes) to existing “major sources.” Applicability determinations under the major NSR program often rely heavily on predicted emissions from a new source or planned physical or operational changes to an existing source. When the new or existing source is located in an area that is in attainment with the Clean Air Act’s national ambient air quality standards (NAAQS), the major NSR program’s Prevention of Significant Deterioration (PSD) requirements apply. More stringent requirements, known as non-attainment NSR requirements, apply when the source will be or is located in an area that is not meeting one or more of the NAAQS. …

Babst Calland has been ranked in the 2023 U.S. News & World Report and Best Lawyers® “Best Law Firms” list nationally in seven practice areas and regionally in 29 practice areas:

• National Tier 1
  • Environmental Law
  • Litigation – Environmental
• National Tier 2
  • Land Use & Zoning Law
• National Tier 3
  • Litigation – Construction
  • Mining Law
  • Natural Resources Law
  • Oil & Gas Law
• Metropolitan Tier 1
  • Pittsburgh
    • Bet-the-Company Litigation
    • Commercial Litigation
    • Construction Law
    • Corporate Law
    • Energy Law
    • Environmental Law
    • Information Technology Law
    • Land Use & Zoning Law
    • Litigation – Construction
    • Litigation – Environmental
    • Litigation – Land Use & Zoning
    • Municipal Law
    • Natural Resources Law
    • Water Law
  • Charleston-WV
    • Commercial Litigation
    • Energy Law
    • Environmental Law
    • Litigation – Environmental
    • Oil & Gas Law
• Metropolitan Tier 2
  • Pittsburgh
    • Labor Law – Management
  • Charleston-WV
    • Mining Law
    • Natural Resources Law
  • Washington, D.C.
    • Environmental Law
    • Litigation – Environmental
• Metropolitan Tier 3
  • Pittsburgh
    • Mergers & Acquisitions Law
  • Charleston-WV
    • Bet-the-Company Litigation
    • Litigation –

…

Smart Business

(By Sue Ostrowski featuring Chris Farmakis and Mike Matesic)

Finding the right match between investors and businesses needing capital can be hit or miss. How can investors reduce the challenges they face in identifying potential investment opportunities, and how can growing businesses attract the right partner?

“One of the most common barriers to bringing companies and investors together is mismatched expectations, where investors think a company is more mature, and the company is presenting itself that way, but after the investment, the investors find out the company is not as mature as they thought,” says Mike Matesic, President and CEO of Idea Foundry, which has helped launch more than 250 companies that have generated more than $1 billion in direct economic impact to the region over the last 20 years. Helping companies attract needed capital has been an essential part of Idea Foundry’s services and that required getting close to investors to understand their needs.

“The other challenge is that investors don’t like to immediately say ‘no’,” says Chris Farmakis, shareholder and Board Chair at law firm Babst Calland.

“It’s very dangerous for a business to think it’s getting funding and start spending before they have it,” says Farmakis. “It is very difficult for a company to recover when it finds out its promised funding fell through.”

An experienced funding program, however, can screen companies, ensure transparent communication, and bring companies together with a pool of investors.

Smart Business spoke with Farmakis and Matesic about how a third-party funding program can help both sides of the investment equation make the most of the deal.

What are the advantages of working with experienced organizations to find the right partner on both sides? …

Pittsburgh Business Times

In a new partnership between Pittsburgh-based global investor Idea Foundry and law firm Babst Calland, IF Ventures held its inaugural angel investment opportunities event recently. IF Ventures aims to fill a critical investment gap in the Pittsburgh region.

The partnership between the two firms is a natural fit as they have worked together for 15 years, starting and growing new companies, President and CEO of Idea Foundry Mike Matesic told the Pittsburgh Business Times. This new initiative capitalizes on the strengths of both firms to attract investors to raise capital to advance high potential, emerging growth stage companies from various types of industries throughout the Pittsburgh region.

“Idea Foundry is focusing on sourcing the deals, doing the initial vetting, and bringing them forward,” Matesic said. “Chris Farmakis and his team at Babst Calland are working with the investors to help attract the new investors to the program … Chris’ business skills coupled with his legal experience will kick in when we start to put the deals together.”

The initiative uses 20 years of lessons learned — from Idea Foundry’s helping to launch more than 250 companies — to reduce the challenges that commonly occur when bringing companies together, Matesic said. The most common challenge is the mismatched expectations that occur when a company presents itself as being more mature than it actually is, causing a potential investor to realize achieving success will take more money than initially thought.

Babst Calland Shareholder and Board Chairman Chris Farmakis explained how IF Ventures does the “prework” of vetting and evaluating companies for those looking to invest — something, he said can be a “risky and speculative venture.”

“IF Ventures is a group of investors who are serial investors in the region, business owners and just smart people who are involved and engaged in the community,” Farmakis said. …

Legal Intelligencer

(by Max Junker and Anna Jewart)

Municipalities face many restrictions on how they may use real property, and Pennsylvania law places additional statutory restrictions on a municipality’s conveyance of property which has been used as a “public facility.”  The Donated or Dedicated Property Act, 53 P.S. §§3381-3386 (DDPA), states that “[a]ll lands or buildings… donated to a political subdivision for use as a public facility, or dedicated to the public use or offered for dedication to such use… shall be deemed to be held by such political subdivision, as trustee, for the benefit of the public with full legal title in the said trustee.”  “Lands” include all real estate, whether improved or unimproved, and a “public facility” includes, without limitation “any park, theater, open air theater, square, museum, library, concert hall, recreation facility or other public use.”  Any such lands or buildings are required to be used only for the purpose or purposes for which they were originally donated or dedicated, unless modified by court order.

Consequently, a municipality cannot simply sell or change the use of real property donated for or dedicated to use by the public.  This concept may seem familiar to the lay person and land use practitioner alike because, in essence, the DDPA codifies the common law of the “public trust doctrine” which requires that public property dedicated to public use be held by the municipality, as a trustee, for the benefit of the community.

However, the DDPA allows the municipality to dispose of public trust property in certain specific circumstances if approved by the court.  Specifically, under Section 4 of the DDPA, a municipality may apply to the orphan’s court for certain enumerated relief if, in the opinion of the municipality, the continuation of the original use of the property held in trust as a public facility is no longer practicable or possible and has ceased to serve the public interest.  …

PIOGA Press

(By Brianne Kurdock and Keith Coyle)

On August 24, 2022, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a new final rule for onshore gas transmission pipelines (the Rule).  The Rule marks the completion of a three-phase rulemaking process, commonly referred to as the Gas Mega Rule, that began more than a decade ago.  The Rule focuses mainly on transmission pipelines and amends or adds various provisions to 49 C.F.R. Part 192.  The Rule will become effective on May 24, 2023.  There are six key areas that owners and operators of gas transmission pipelines should be aware of:

Definitions and Standards Incorporated by Reference

PHMSA added new definitions for terms referenced in the regulations, including close interval survey, distribution center, dry gas or dry natural gas, hard spot, in-line inspection (ILI), in-line inspection tool or instrumented internal inspection device, and wrinkle bend. The definition of transmission pipelines was revised to include a “connected series” of pipelines to clarify that transmission pipeline can be downstream of other transmission pipelines, and to allow operators to voluntarily designate their pipelines as transmission lines.

Management of Change

Operators of all onshore gas transmission pipelines must now evaluate and mitigate any significant changes that pose a risk to safety or the environment through a management of change process.  The process must include the reasons for the change, the authority for approving changes, an analysis of the implications, the acquisition of required work permits, and evidence documenting communication of the change to affected parties, time limitations, and the qualification of staff.    For pipeline segments not covered by Subpart O, operators must implement this management of change process by February 26, 2024. …