Brad A. Molotsky – Page 3 – Sustainability, Resiliency and Risk Mitigation

September 8, 2022 by Brad A. Molotsky

ESG – NJBPU issues Order requiring Energy and Water reporting for all Buildings over 25,000 SF

In September, 2022, the New Jersey Board of Public Utilities (NJBPU) issued an order requiring the owner or operator of every commercial building over 25,000 square feet in the state to benchmark their energy and water use as part of an effort to spur energy efficiency.

Building owners must use the U.S. Environmental Protection Agency’s online Portfolio Manager Tool to measure and analyze their respective facilities’ energy and water usage. NJBPU’s website has information about how to report benchmarking. The first benchmarking submissions are due on Oct. 1, 2023, for energy and water consumed in 2022. Portfolio Manager is a FREE tool from the EPA that enables owners to input data and measure and monitor consumption.

“This is the next important step in implementing a best in class, statewide, energy efficiency program which will help us achieve Governor Murphy’s goal of 100% clean energy by 2050,” said NJBPU President Joseph L. Fiordaliso. “Creating a system of benchmarking allows us to measure the use of energy (electricity and gas) and water by the state’s biggest buildings and support building owners in reducing energy and water usage and operating costs.”

Benchmarking is intended to help commercial building owners and operators measure and analyze their respective facilities’ energy and water usage and compare it to other similar buildings. Building owners and operators can use this information to make informed decisions about taking advantage of financial incentives for energy efficiency improvements.

The NJBPU initiative is directed by the New Jersey’s Energy Master Plan, which calls for transparent benchmarking and energy labeling. The program it intended to enable building owners to obtain aggregated, building-level energy and water data from their utility companies through a data access service. The Board will also establish a “help desk” to assist building owners as they measure and analyze their respective buildings’ energy and water performance.

This program will also protect individual ratepayers’ energy and water use information by requiring utilities to securely provide aggregated, building-level data. Building owners are required to obtain their tenants’ affirmative, written consent for the utilities from which they receive services to provide building-level energy and water data to the building owner in certain situations to protect individual energy and water use information.

Consent will be required only when there are fewer than four tenants in a building or if one tenant exceeds 50% of the energy or water consumption.

More information about building benchmarking through NJBPU is available at https://njcleanenergy.com/commercial-industrial/programs/energy-benchmarking.

Food For Thought – NJ through the NJBPU Order joins California and Washington state as well as over 42 cities and 2 counties in requiring some form of energy and water disclosure mandate. While many do not like being forced to report which is understandable, having this mandate will enable the State and tenants to better access which buildings are more efficient than others when it comes to energy and water consumption that are often paid for by common area charges assessed to these tenants. If and to the extent the SEC’s proposed rules on climate disclosure become effective, having a tool that allows for measurement and verification of various data sets will help bolster various companies ability to measure, verify and report on such data in the energy, water, waste, recycling, materials and air quality space.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your Sustainability and ESG planning and initiatives. We would be happy to discussion your proposed project and how these new rules might apply to you. For more information or if you have any questions about this post, please contact Sheila Rafferty-Wiggins, Brad A. Molotsky, Alice Shanahan, Jeff Hamera, Nanette Heide, Joel Ephross, Jolie-Anne Ansley, Robert Montejo, Seth Cooley, David Amerikaner or the attorney in the firm with whom you in regular contact or the attorney in the firm with whom you are regularly in contact.

August 31, 2022 by Brad A. Molotsky

EPA proposes to Designate 2 new PFAS and PFOS Chemicals as Hazardous Substances!

Earlier this week on August 25, 2022, the U.S. Environmental Protection Agency (EPA) took a significant step under Administrator Regan’s PFAS Strategic Roadmap in an effort to protect people and communities from the health risks posed by certain PFAS, also known as “forever chemicals.”

EPA is proposing to designate two of the most widely used per- and polyfluoroalkyl substances (PFAS) as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as “Superfund.”

The proposal applies to perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), including their salts and structural isomers, and, according to EPA’s press release, is based on significant evidence that PFOA and PFOS may present a substantial danger to human health or welfare or the environment. According to various reports, PFOA and PFOS can accumulate and persist in the human body for long periods of time and evidence from laboratory animal and human epidemiology studies indicates that exposure to PFOA and/or PFOS may lead to cancer, reproductive, developmental, cardiovascular, liver, and immunological effects.

If finalized, the rulemaking would trigger reporting of PFOA and PFOS releases, providing the EPA with improved data and the option to require cleanups and recover cleanup costs to protect public health and encourage better waste management.

EPA is also focused on holding responsible those who have manufactured and released significant amounts of PFOA and PFOS into the environment. In its press release, the EPA announces that they will use enforcement discretion and other approaches to ensure fairness for minor parties who may have been inadvertently impacted by the contamination. EPA is also doing further outreach and engagement to hear from impacted communities, wastewater utilities, businesses, farmers and other parties during the consideration of the proposed rule.

If this designation is finalized, releases of PFOA and PFOS that meet or exceed the reportable quantity would have to be reported to the National Response Center, state or Tribal emergency response commissions, and the local or Tribal emergency planning committees.

EPA stated that they anticipate that a final rule would encourage better waste management and treatment practices by facilities handling PFOA or PFOS. The reporting of a release could potentially accelerate privately financed cleanups and mitigate potential adverse impacts to human health and the environment.
Additionally, the proposed rule would, in certain circumstances, facilitate making the polluter pay by allowing EPA to seek to recover cleanup costs from a potentially responsible party or to require such a party to conduct the cleanup. In addition, federal entities that transfer or sell their property will be required to provide a notice about the storage, release, or disposal of PFOA or PFOS on the property and a covenant (commitment in the deed) warranting that it has cleaned up any resulting contamination or will do so in the future, if necessary, as required under CERCLA 120(h).

EPA will be publishing the Notice of Proposed Rulemaking in the Federal Register in the next several weeks. Upon publication, there will be a 60-day public comment period.

As a subsequent step, EPA anticipates issuing an Advance Notice of Proposed Rulemaking after the close of the comment period on its proposal to seek public comment on designating other PFAS chemicals as CERCLA hazardous substances.

EPA has taken a number of recent actions on PFAS including:

• Releasing drinking water health advisories for 4 PFAS – using the best available science to attempt to address PFAS pollution, protect public health, and provide critical information quickly and transparently;

• Making available $1 billion in grant funding through President Biden’s Bipartisan Infrastructure Law;

• Issuing the first Toxic Substances Control Act PFAS test order under the National PFAS Testing Strategy;

• Adding five PFAS Regional Screening and Removal Management Levels that EPA uses to help determine if cleanup is needed;

• Publishing draft aquatic life water quality criteria for PFOA and PFOS;

• Issuing a memo to address PFAS in Clean Water Act permitting;

• Publishing a new draft total adsorbable fluorine wastewater method; and

• Issuing the 5th Unregulated Contaminant Monitoring Rule to improve EPA’s understanding of the frequency that 29 PFAS are found in the nation’s drinking water systems and at what levels and preparing to propose a PFAS National Drinking Water Regulation by the end of 2022.

Food For Thought – while some argue that the EPA has gone to far in their regulatory rule making, others view these proposed designations as a big step in the appropriate direction to regulate and capture critical data on the location of PFAS and PFOS so that these chemicals can be trapped and then eliminated from our water system and our sewage systems. Many reports now exists which indicate the negative impact of PFAS and PFOS on the human body. Wherever you come out on this topic, taking steps to reduce our own exposure and our children’s exposure to PFAS and PFOS and to focus on entrapment and non-hazardous destruction of these impactful chemicals is continuing to be the focus of many within the industry. New and improved technology for breaking down PFAS and PFOS into its constituent parts in a non-off gassing, safe manner are a very near future event and can be done.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your Sustainability and ESG planning and initiatives. We would be happy to discussion your proposed project and how these new PFAS and PFOS rules might apply to you. For more information or if you have any questions about this post, please contact Brad A. Molotsky, Alice Shanahan Jeff Hamera, Nanette Heide, Joel Ephross, Jolie-Anne Ansley, Robert Montejo, Seth Cooley or David Amerikaner or the attorney in the firm with whom you in regular contact or the attorney in the firm with whom you are regularly in contact.

August 17, 2022 by Brad A. Molotsky

ESG – What is included the Inflation Reduction Act?

Earlier this week the President signed into law the Inflation Reduction Act. Without pontificating on its virtues or short comings, here is how the Inflation Reduction Act breaks down by the numbers:

HEALTH CARE:

Cutting Prescription Drug Cost

As estimated by the office of Management and Budget:

5-7 million Medicare beneficiaries could see their prescription drug costs reduced because of the provision allowing Medicare to negotiate prescription drug costs;

50 million Americans with Medicare Part D will have their costs at the pharmacy capped at $2,000 per year, directly benefiting about 1.4 million beneficiaries each year;

3.3 million Medicare beneficiaries with diabetes will benefit from a guarantee that their insulin costs are capped at $35 for a month’s supply.

Lowering Health Care Costs – per the White House:

13 million Americans will continue to save an average of $800 per year on health insurance premiums under Obama Care;

3 million more Americans will be eligible for health insurance; and

The current uninsured rate is at an all-time low of 8%.

CLEAN ENERGY:

Lowering Energy Costs

$14,000 in direct consumer rebates for families to buy heat pumps and other energy efficient home appliances;

a 30% tax credit for solar on roofs program, saving families and estimated $9,000 over the life of the system or at least $300 per year;

Up to $7,500 in tax credits for new electric vehicles and $4,000 for used electric vehicles, helping families save $950 per year – noting there are requirements that various parts of the car be made in America which at this time is not part of the supply chain;

The Administration has stated that their goal in the IRA is to power homes, businesses, and communities with much more clean energy by 2030, including adding:

950 million solar panels;
120,000 wind turbines;
2,300 grid-scale battery plants;
Advance cost-saving clean energy projects at rural electric cooperatives serving 42 million people;
Strengthen climate resilience and protect nearly 2 million acres of national forests; and
Creating millions of good-paying jobs making clean energy in America.
Reducing Harmful Pollution

The hope is that through these actions, the IRA will help reduce greenhouse gas emissions by about 1 gigaton in 2030, or a billion metric tons – 10 times more climate impact than any other single piece of legislation ever enacted.

Moreover, the Administration is incenting carbon capture technology in order to deploy clean energy and reduce particle pollution from fossil fuels to avoid up to 3,900 premature deaths and up to 100,000 asthma attacks annually by 2030.

Fuel For Thought – while some argue that the IRA is too expensive and that carbon reduction goals are not necessary, others view these steps as a good step but not nearly enough to reduce green house gas emissions as set forth in the Paris Accord by 2030. Wherever you come out on this topic, taking steps to reduce our own personal greenhouse gas impact are within our own power. As such, if you don’t believe that humankind contributes to green house gas impacts and global warming then try doing something to help your own personal reduction to support those that really believe this is a serious issue. Your own reduction cannot hurt and it just might help if we all engage and look to help.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your Sustainability and ESG planning and initiatives. We would be happy to discussion your proposed project and how the Inflation Reduction Act might apply with you. For more information or if you have any questions about this post, please contact Brad A. Molotsky, Jeff Hamera, Nanette Heide, Joel Ephross, Jolie-Anne Ainsley, Robert Montejo, Seth Cooley or David Amerikaner or the attorney in the firm with whom you in regular contact or the attorney in the firm with whom you are regularly in contact.

July 1, 2022 by Brad A. Molotsky

Financing: C-Pace for Multi-Family Residential Projects Finally Approved in PA

A new day dawns in Pennsylvania for mixed use residential rental projects and C-PACE financing. C-PACE stands for Commercial Property Assessed Clean Energy Financing and has now been approved in over 28 states in the US,

C-PACE financing provides borrowers with a low-cost, long term financing option that typically supplements senior financing from traditional banks and can act to reduce required equity needed for a given project.

Terms of C-PACE vary by state but many C-PACE lenders will provide funds for up to 30 years, at approximately 5.25% for approximately 25-30% of the total project cost. As such, C-PACE financing is only slightly more expensive than conventional debt and has a much longer term, and is much cheaper than traditional real estate transaction equity.

C-PACE allows existing and new properties to improve their infrastructure, reduce operating expenses and thereby increase overall value. Eligible improvements typically include energy efficiency, renewable energy, seismic and storm water measures and are typically available for office, industrial, mixed use and hotel projects.

Prior to the passage of SB 635 earlier this week, PA’s C-PACE program did not allow for residential rental mixed use projects to participate. Due to the hard work of many constituents, the legislature amended their statute to now permit mixed use rental residential to qualify as a “qualifying commercial property.”

C-PACE acts as on-bill financing for the cost of applicable approved improvements. Costs are assessed much like a sewer easement or real property tax bill on the borrowers bill. C-PACE loans cannot be accelerated in the event of a default which works to protect the senior lender to the project from being outbid at a foreclosure. C-PACE lenders are willing to lend funds to projects despite this limitation as they have a first priority lien status for outstanding amounts then due and when a project continues to receive energy the bill will include the C-PACE charge – i.e., the C-PACE lender may have to wait a bit to get paid but they will be paid so long as the property is receiving and being billed for energy.

The focus of the C-PACE program is to enable energy and water efficiency upgrades at properties, as well as resiliency improvements, water conservation and renewable energy projects.

Fuel For Thought – once the Bill is signed by Governor Wolf and goes into effect in approximately 60 days, one of the hottest property types in Pennsylvania (i.e., multi family rental residential) will qualify for C-PACE on a go forward basis and will likely see a marked uptake in the amount of C-PACE lending in the Pennsylvania arena. New Jersey has also approved C-PACE lending but regulations have not been published by the NJEDA since passage of C-PACE in 2021 (stay tuned on that front),

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your Sustainability and ESG planning and initiatives. We would be happy to discussion your proposed project and how C-PACE might apply with you. For more information or if you have any questions about this post, please contact Brad A. Molotsky, Jeff Hamera, Nanette Heide, Joel Ephross, Robert Montejos or David Amerikaner or the attorney in the firm with whom you in regular contact or the attorney in the firm with whom you are regularly in contact.

June 10, 2022 by Brad A. Molotsky

Data Centers – From the Clouds – Much Ado about ESG!

We had the opportunity to chat with some of the leading owners and builders of data centers space today on our Data Centers Task Force group meeting. Fascinating and fun conversation with Aaron Binkley of Digital Realty and David Hall and David Sitkowski from Clune Construction Company.

Some key take aways from the conversation:

– multiple new entrants into the data center space are putting pressure on rents (upward) with a lot of venture capital funding the new entries

– Increased focus by Owners (and customer/users) on renewable energy with an understanding that the renewable energy is cheaper but NOT Free.

– Energy markets remain a bit volatile for renewable energy with federal tariff on solar panels continuing to negatively impact supply

– Climate related reporting from the EU taxonomy, Singapore and potential SEC proposed rules creating a continued ESG focus by owners and customers in the Date Center space

– Supply chain issues continue to negatively affect delivery times and cost – causing consternation but opportunity as well

– Noting generators are taking in certain locations over 72 weeks for delivery and switch gear breakers taking over 16 months for delivery from the normal 6 months

– Labor Shortages continue in various markets delaying jobs – e.g., Pacific NW on carpentry and Phoenix on electricians and other trades

– Deals continue to increase in size and scale despite increased need for local based service of smaller scale

– Increased cooperating and sharing of work pipeline to enable design and build on time

– increased federal work in the data center site space

– increased interest by customers in LEED and Energy Star certifications but not everywhere

– increased interest in power coming from solar and wind sources both on site and off site through power purchase agreements (e.g., in VA, TX, CA, Illinois and NJ)

– customers and employees continuing to ask about sustainable features in buildings and in power supply and other areas of design

– Communities are beginning to wake up to data centers and in certain locations object to their noise and power consumption, noting the lack of traffic and school impacts given their use

– Water is becoming more and more relevant to the conversation and how water is or is not used in cooling systems (noting – Digital Realty does not use water in its cooling solution but towns where they operate are starting to ask about this resource)

– Permitting for generators which used to be relatively easy to obtain is now starting to get a bit trickier and harder to get on an over the counter baiss given potential air quality issues and diesel for generator issues – resulting in additional time for development permits

– Site Selection – certain jurisdictions with a high amount of data centers are beginning to increase real estate taxes for the data center user/owner which will likely, in turn, have these owners focus on other locations which are not so pricey by way of taxes.

From the Cloud – on balance, labor shortages, supply chain and increased focus by customers on ESG is driving various changes to design and build in the data center space to ensure timely and on budget deliveries. While supply chain issues should clear up in Q4 to Q1 of 23′, the focus on ESG should continue well into the future as more and more customers are adopting GhG reduction targets and more and more owners follow the lead of big industry players like Digital Realty and Prologis.

Duane Morris has an active Data Centers Team as well as an ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your data center project and your Sustainability and ESG planning and initiatives. We would be happy to discussion your proposed project with you. For more information or if you have any questions about this post, please contact Brad A. Molotsky, Jeff Hamera, Joel Ephross, Robert Montejos or David Amerikaner or the attorney in the firm with whom you in regular contact.or the attorney in the firm with whom you are regularly in contact.

February 22, 2022November 29, 2023 by Brad A. Molotsky

ESG: Sustainability Linked Loans becoming more Commonplace in the Marketplace – Louise Melchor, Esq.

As environmental, social, and governance (“ESG”) initiatives are increasingly implemented by borrowers and lenders, sustainability linked loans provide opportunities for both.

What are Sustainability Linked Loans?

Sustainability linked loans (“SLLs”) are based on the Sustainability Linked Loan Principles developed by the LMA, APLMA and LSTA.[1] In SLLs, a borrower, together with its lender group, determine and set certain sustainability performance targets (“SPTs”) for the borrower to achieve, to be measured by key performance indicators (“KPIs”). Independent organizations, including the Sustainability Accounting Standards Board (“SASB”), provide guidance on the ESG metrics most relevant to certain industry sectors. Once agreed between the borrower and lenders, the KPI/SPT benchmarks are then integrated into margin adjustments to the interest rate or commitment fee for the credit facility (i.e., by achieving the KPIs, the interest rate is reduced). The credit facility documentation will also include reporting requirements for independent, external verification of the borrower’s performance level with respect to each SPT for each KPI, at least annually.

Borrower Benefits

Many companies have already undertaken ESG data collection and reporting, and more will likely do so as the SEC expands its focus on ESG disclosures and as more investors demand this information. While the above noted third party verification and reporting costs are inherent to SLLs, borrowers that are already engaging in these efforts may find they can efficiently obtain an additional economic incentive through SLL financing. Additionally, SLLs can be part of a comprehensive alignment with the borrower’s ESG strategies and policies.

Lender Benefits

Lenders are undertaking ESG initiatives as well, in which SLLs may be a component. And, regulatory agencies for certain lenders are communicating their plans to provide guidance on climate-related risks, and integrate these principles into their supervisory expectations.[2] Further, studies have shown that companies (e.g., SLL borrowers) that identify and manage their ESG risks have improved financial performance.[3] So, financing SLLs can benefit lenders across policy, regulatory and business aspects.

Current State of the Market and Next Steps

Although SLLs are a relatively new financing concept, particularly in the U.S., the volume of SLLs globally quadrupled in issuance between 2020 and 2021.[4] As ESG momentum continues to build in the U.S., the volume of SLLs is likewise expected to continue to grow. Currently, terms are negotiated on a transaction specific basis, and market provisions have not been added to the LSTA’s suite of documentation. But, as SLLs become more common, the market is likely to coalesce on terms. Stay tuned for more updates on SLLs and other trending sustainable finance products, including green bonds and commercial property assessed clean energy (C-PACE) financing.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Louise Melchor, the author or Brad A. Molotsky, Nanette Heide, Seth Cooley, David Amerikaner, Jolie-Anne Ansley or the attorney in the firm with whom you are regularly in contact.

[1] Available at https://www.lsta.org/content/sustainability-linked-loan-principles-sllp/

[2] See https://www.occ.gov/news-issuances/bulletins/2021/bulletin-2021-62.html and https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202111032

[3] https://www.msci.com/esg-101-what-is-esg/esg-and-performance

[4] See https://about.bnef.com/blog/1h-2022-sustainable-finance-market-outlook/

December 19, 2021 by Brad A. Molotsky

ESG: – New York City Council Passes a Natural Gas Ban for New Buildings

Last week, New York City’s city council approved a ban on natural gas as a fuel source in newly constructed buildings.

Per reporting from NPR, nearly 40% of carbon emissions in the country — and more than 50% of New York City’s emissions — come from buildings.

The new natural gas ban in newly constructed buildings, by a vote of 40-7, applies to buildings that are up to 7-stories in height by the end of 2023; buildings that are taller than 7-stories have until 2027 to comply.

The bill contains several exceptions, including hospitals, laundromats and crematoriums.

As noted by NPR, the legislation also requires that the Mayor’s Office of Long-Term Planning and Sustainability conduct 2 long term studies. The first will examine the use of heat pump technology and the second is a study on the impact of the new bill on the city’s electrical grid.

Not surprising there has been massive pushback from the natural gas industry against these type of natural gas bans. This pushback, however, has not stopped cities around the country from proceeding with various types of natural gas ban efforts. By way of example, at least 42 cities in California have acted to limit natural gas in new buildings, and Salt Lake City, Utah and Denver, Colorado have also made plans to move toward required electrification in buildings.

Moreover, in Ithaca, New York, the city committed to ending the use of natural gas in all buildings — not just new ones.

Passing this type of natural gas ban for new buildings in New York City, the largest city in the country, marks a significant move for other cities trying to move similar legislation to attempt to cut down carbon emissions in the fight against climate change, joining cities like San Jose and San Francisco that have made similar commitments to reduce emissions.

The efforts to ban natural gas in new buildings in New York City is also being considered on a state wide basis in the New York Senate and House. Senator Brian Kavanagh (D) and Assembly Member Emily Gallagher (D) are working on legislation that would require any buildings constructed in New York after 2023 to be entirely powered by electricity. If their legislation passes, New York would become the first state to ban natural gas in new buildings on a state-wide level.

Triple Bottom Line – By passing this type of natural gas ban in new buildings, focusing on buildings as one of the largest emitters of green house gases, New York has provided other cities with a leader to attempt to follow if they are so inclined. As noted, California has been attempting this type of ban on a city by city basis and has passed 42 such bans throughout the state. If New York state follows the NYC lead it will become the first state to enact such a ban and would mark a bit of a watershed moment in the fight against greenhouse gas emissions showing that buildings can indeed be constructed in this manner if reduced emissions are one of the key goals attempting to be achieved by the builder/owner or the legislature.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Brad A. Molotsky, Nanette Heide, Seth Cooley, David Amerikaner, Jolie-Anne Ansley, Hari Kumar or the attorney in the firm with whom you are regularly in contact.

December 3, 2021 by Brad A. Molotsky

ESG – State Plastic Bag and Straw Bans – An Update

Earlier this year, Duane Morris Governmental Services published an Alert that discussed states and municipalities across the country banning plastic bags in force. In addition to putting prohibitions on plastic bags, states and localities have also been looking at plastic straw bans as advocates look to reduce plastic pollution as plastics are not biodegradable and cannot break down naturally. It is estimated that Americans use 500 million drinking straws every day. While some legislation only contains plastic straw bans, other legislation loops plastic straws in with other plastic prohibitions.

Connecticut:
Lawmakers in Connecticut introduced HB 6502 earlier this year to prohibit the automatic distribution of single-use plastic straws at certain eating establishments. Specifically, the bill would, effective January 1, 2022, prohibit full-service restaurants from providing customers with single-use plastic straws unless they request it or if the customer has a disability. The legislation defines a “full-service restaurant” as an establishment that primarily services food to be consumed on-site and where an employee does the following: (1) escorts and seats the customer, (2) takes the customer’s food and beverage order after the customer is seated, (3) delivers the order and any requested related items to the customer, and (4) brings the check for the order to the customer’s table.

Violations under the bill would result in a restaurant owner or operator receiving warnings for a first or second violation and a fine for a third violation. The fine would be $25 for each day of the violation, up to $300 in a single year. Enforcement power would belong to a municipal or district health department that has jurisdiction over the restaurant. The plastic straw ban bill additionally does not prohibit municipalities from adopting or implementing ordinances or rules that further restrict a full-service restaurant from providing customers single-use plastic straws, as long as the ordinance or rule does not prohibit a restaurant from providing a single-use plastic straw to someone with a disability.

HB 6502 additionally would phase out the use of particular polystyrene trays and food containers.

Maine:
In March 2021, Maine lawmakers introduced LD 602, which would prohibit the manufacture, sale, and distribution, at retail or wholesale, of single-use plastic straws, splash sticks, and beverage lid plugs made entirely or partly of plastic.

The legislation further prohibits food and eating establishments from providing such items to customers at a point of sale or making them available to customers otherwise. However, food and eating establishments are allowed to provide single-use drinking straws, splash sticks, or beverage lid plugs not made of plastic only upon a customer’s request. The establishment must further collect a fee from the customer of no less than $0.05 for each item provided.

Massachusetts:
Massachusetts lawmakers introduced H. 998 earlier this year to restrict the distribution of single-use plastic straws by prohibiting food establishments from providing such straws to customers unless requested by the customer. H. 998 defines a “food establishment” as an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption, including but not limited to any establishment requiring a permit to operate under the State Food Code.

The bill states that the straw ban shall not include a straw made from non-plastic materials, such as paper, pasta, sugar cane, wood, or bamboo.

In mid-June, lawmakers scheduled a virtual hearing to address the plastic straw ban legislation. However, the bill has not seen any action since.

Mississippi:
This past session, Mississippi lawmakers introduced Senate Bill 2071, which would have prohibited a food establishment from providing a single-use plastic straw unless a consumer requested such a straw.

The bill’s definition of a “food establishment” is comprehensive. The bill’s definition of a food establishment is as follows: all sales outlets, stores, shops, or other places of business located within the State of Mississippi that operate primarily to sell or convey food directly to the ultimate consumer, including any place where food is prepared, mixed, cooked, baked, smoked, preserved, bottled, packaged, handled, stored, manufactured and sold or offered for sale, including, but not limited to, any fixed or mobile restaurant, drive-in, coffee shop, cafeteria, short order cafe, delicatessen, luncheonette, grill, sandwich shop, soda fountain, tavern, bar, cocktail lounge, nightclub, roadside stand, prepared food take-out place, catering kitchen, commissary, grocery store, public food market, food stand or similar place in which food or drink is prepared for sale or for service on the premises or elsewhere, and any other establishment or operation where food is processed, prepared, stored, served or provided for the public for charge.

SB 2071 died in committee in February 2021.

New York:
Two companion bills in New York have been introduced this year related to plastic straws. A207 and S1505 would allow restaurants to only provide single-use plastic straws unless requested by a customer. The legislation otherwise prohibits restaurants from providing customers with single-use plastic straws or single-use plastic stirrers. Further, the bill specifies that restaurants providing compostable straws or stirrers to customers must have access to curbside food waste collection for composting.

The bills define a restaurant as any diner or other eating or beverage establishment that offers food or beverages for sale to the public, guests, members, or patrons, whether consumption occurs on or off the premises.

Neither bill has advanced this session.

Rhode Island:
In July, Governor Daniel McKee signed House Bill 5131/ Senate Bill 155 into law. The new law prohibits a food service establishment from providing a single-use plastic straw to a consumer unless the consumer requests it. The bill will take effect January 1, 2022, and tasks the director of health with promulgating and adopting rules and regulations to enforce the new plastic straw ban.

Rhode Island’s new plastic straw ban defines a “single-use plastic straw” as a single-use, disposable tube made predominantly of plastic derived from either petroleum or a biologically based polymer, such as corn or other plant sources, used to transfer a beverage from a container to the mouth of the person drinking the beverage. Single-use straws, under the bill, do not include a straw made from non-plastic materials, including, but not limited to, paper, pasta, sugar cane, wood, or bamboo.

The bill further defines a “food service establishment” as any fixed or mobile restaurant, coffee shop, cafeteria, short-order cafe, luncheonette, grill, tearoom, sandwich shop, soda fountain, tavern; bar, cocktail lounge, night club, roadside stand, industrial feeding establishment, cultural heritage education facility, private, public or nonprofit organization or institution routinely serving food, catering kitchen, commissary or similar place in which food or drink is prepared for sale or for service on the premises or elsewhere, and any other eating or drinking establishment or operation where food is served or provided for the public with or without charge.

New Jersey:

On Nov. 4, 2020, Governor Murphy signed into law P.L. 2020, c117, which prohibits the use of single-use plastic carryout bags in all stores and food service businesses statewide and single-use paper carryout bags in grocery stores that occupy at least 2,500 square feet beginning May 4, 2022.

Beginning May 4, 2022, New Jersey businesses may not sell or provide single-use plastic carryout bags to their customers. Those businesses that decide to sell or provide reusable carryout bags must ensure that the bags meet the requirements as defined in the law.

The law defines reusable bags as ones that:

Are made of polypropylene fabric, PET non-woven fabric, nylon, cloth, hemp product, or other washable fabric; and
Have stitched handles; and
Are designed and manufactured for multiple reuses.

Under the new law, polystyrene foam food service products and foods sold or provided in polystyrene foam food service products will also be banned as of May 4, 2022, and food service businesses will only be allowed to provide single-use plastic straws by request starting Nov. 4, 2021.

However, the following products will be exempt for an additional two years, until May 4, 2024:

Disposable, long-handled polystyrene foam soda spoons when required and used for thick drinks;
Portion cups of two ounces or less, if used for hot foods or foods requiring lids;
Meat and fish trays for raw or butchered meat, including poultry, or fish that is sold from a refrigerator or similar retail appliance;
Any food product pre-packaged by the manufacturer with a polystyrene foam food service product; and
Any other polystyrene foam food service product as determined necessary by the DEP.

Triple Bottom Line – While it is often inconvenient to not be in a position to carry goods from a store or restaurant in a plastic bag or to drink from a plastic straw, as more states focus on the burgeoning problem of plastic waste entering the water supply and creating land fill capacity concerns, it is very likely that more and more states will continue to enact some level of plastic bag and plastic straw bans as a means to begin to combat this issue. Recycling of plastic would also start to begin to address the issue but has not become an economic reality as of yet given the cost to build facilities that could gather and recycle the applicable plastic in bags and straws and similar materials.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Ryan Stevens, the author or Brad A. Molotsky, Nanette Heide, Seth Cooley, David Amerikaner, Jolie-Anne Ansley, Hari Kumar, or the attorney in the firm with whom you are regularly in contact.

November 26, 2021November 29, 2023 by Brad A. Molotsky

ESG – $1.2 Trillion Hard Infrastructure Bill Becomes Law with Many Positive ESG Features

On November 6, 2021, the House of Representatives passed what has been referred to as the $1.2 Trillion Dollar “hard” infrastructure bill by a vote of 228-206. Thereafter, later in November, President Biden signed this Bill into law.

The Hard Infrastructure bill includes $550 Billion in new spending focusing on the areas of:

> $110 billion toward roads, bridges and other infrastructure upgrades across the country;

> $40 billion is new funding for bridge repair, replacement, and rehabilitation and $17.5 billion is for major projects;

> $73 billion for the country’s electric grid and power structures, including new transmission lines;

> $66 billion for rail services including expanding high-speed rail to new areas;

> $65 billion for broadband access and infrastructure;

> $55 billion for water infrastructure;

> $21 billion in environmental remediation;

> $47 billion for flooding and coastal resiliency as well as “climate resiliency,” including protections against wild fires;

> $39 billion to modernize public transit, which is the largest federal investment in public transit in history;

> $25 billion for airports;

> $17 billion in port infrastructure;

> $11 billion in transportation safety programs;

> $7.5 billion for electric vehicles and EV charging stations and infrastructure;

> $2.5 billion in zero-emission buses;

> $2.5 billion in low-emission buses; and

> $2.5 billion for ferries.

We will continue to focus on the specifics of the various spending packages and will look to report back as details become more visible. Additionally, the CBO has reported back on the Build Back Better second Infrastructure package Reconciliation Bill to enable the bill to likely be voted on when Congress is back in session.

Triple Bottom Line – While it is sometimes easy to be cynical about our collective will power to invest in hard and soft infrastructure projects, in this instance, real dollars are being committed to upgrades that will have broad ranging positive impacts on many communities and lead to job creation for design, build and operating type jobs for these sectors as well as result in positive (or less-negative) effects on our environment.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Brad A. Molotsky, Hari Kumar, or the attorney in the firm with whom you are regularly in contact.

November 22, 2021 by Brad A. Molotsky

ESG – EPA Announces National Recycling Strategy

Earlier this month, the Environmental Protection Agency (EPA) released its National Recycling Strategy. Interestingly, as they have not always been aligned on issues in the past, the American Chemistry Council’s (ACC) Plastics Division issued the following statement …“America’s Plastic Makers® today welcomed EPA’s National Recycling Strategy, which will help the U.S. achieve its goal of recycling 50% of post-use materials by 2030. EPA’s Strategy also recognizes the potential of advanced (chemical) recycling technology to transform plastic recycling rates in the United States. Advanced recycling is critical for achieving a more circular economy for plastics. Since 2017, 65 advanced recycling projects have been announced that have the potential to divert more than 5 million metric tons of waste annually from landfills.”

“There is significant alignment in what America’s Plastic Makers are calling for in our 5 Actions for Sustainable Change and what EPA has laid out in its National Recycling Strategy. This is particularly evident in the Strategy’s support of increasing domestic markets for recycled material, creating national recycling standards to reduce contamination and measure results more effectively, and enhancing recycling infrastructure.

Further to this end, the ACC called on Congress to further help the EPA implement its strategy and achieve its recycling goals by enacting policies such as a national standard requiring plastic packaging to contain 30% recycled plastic by 2030 and an American-designed producer responsibility system to improve recycling access and collection of all materials. While some might view this as enlightened self-interest given the 70% no- recycled plastic, this author prefers to focus on the positive attribute of having a 30% recycled content requirement and the positive progress this will represent on this front.

Per the ACC, “consumers want packaging with more recycled plastics material, more than 400 brands have committed to increasing the amount of recycled material in their packaging, and America’s Plastic Makers have set a goal to have 100% of plastic packaging to be reused, recycled, or recovered in the U.S. by 2040. EPA’s Strategy lays the groundwork to make much of this possible.”

Triple Bottom Line – While it is sometimes easy to be cynical about alliances and partnerships in the ESG and sustainability space, in this instance it is nice to see the alignment of the EPA and the ACC regarding increasing recycled content and setting industry wide standards with the ultimate goal to create a 100% goal for recycled, reused or recovered for particular materials. N

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Brad A. Molotsky, Nanette Heide, Jolie-Anne S. Ansley, David Amerikaner, Seth Cooley, Vijay Bange, Stephen Nichol, or the attorney in the firm with whom you are regularly in contact.