Recent developments in the energy sector indicate that blockchain technology is being embraced to address a range of issues including network security and improved integration of renewable generation and demand response resources. This emerging technology continues to have the potential to become a disrupter in the energy industry. Continue Reading
Effective May 13, 2019, the Internal Revenue Service (IRS) changed the requirements for obtaining an employer identification number (EIN). The IRS no longer permits an entity to be named as the “responsible party” on IRS Form SS-4 (Application for Employer Identification Number). Instead, only an individual can act as a responsible party. This is particularly significant because the instructions for Form SS-4 seem to require the responsible party to provide their social security number (SSN) or individual taxpayer identification number (ITIN) on the application. A “responsible party” is generally defined as the person who owns, controls or exercises sufficient control over the entity. The responsible party is often the owner, manager, officer, or trustee of the entity. For many entities controlled by non-U.S. persons, the only individual that is capable of satisfying the criteria of a “responsible party” is a non-U.S. individual that does not have a SSN or ITIN. For non-U.S. individuals the process for obtaining a ITIN can be lengthy and onerous, requiring the applicant to produce a significant amount of documentation to verify their identity and two months or more for the IRS to process. Continue Reading
The Supreme Court recently issued its long-awaited ruling in Knick v. Township of Scott, concluding that a plaintiff alleging that local governments have violated the Takings Clause under the Fifth Amendment may seek relief directly in federal court, as a constitutional violation occurs at the time of the taking without payment, even if just compensation is subsequently paid. In the 5-4 majority opinion, the Court overruled, in part, Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), a 34-year old precedent that established a federal claim was not ripe until a state takings plaintiff exhausted its remedies under state law. The decision, among other things, eliminates the “Catch 22” dilemma created by Williamson in which a state judgment denying the takings claim precluded the federal claim from ever becoming ripe because of the preclusive effect of the state judgment under the federal full faith and credit statute (28 U.S.C. §1738). The ramifications of the decision remain to be seen, but property owners will certainly welcome the readier access to the federal courts for takings claims. Continue Reading
On June 13, 2019, the Office of the United States Trade Representative ruled that bifacial solar modules are exempt from the Section 201 tariffs on solar cell and module imports. This exemption applies to articles imported on or after June 13, 2019, and creates an opportunity for cost savings over traditional monofacial solar modules. Developers and solar companies who have been importing, or are considering importing, solar modules should consider the potential for such savings in light of this exemption. Continue Reading
In a recent opinion, the D.C. Circuit suggested the Federal Energy Regulatory Commission (FERC) must attempt to obtain information necessary to evaluate the environmental effects of a proposed interstate pipeline project due to the project’s effect on natural gas production and consumption. In Birckhead v. FERC, USCA Case No. 18-1218 (D.C. Cir. 2019), the court criticized FERC for failing to obtain and consider information about upstream production and downstream consumption in its National Environmental Policy Act (NEPA) review of a proposed project to add compression to an existing pipeline, even though the applicant was unlikely to have information regarding the origin and destination of the gas to be transported. The court indicated that FERC has an obligation to at least request information about upstream and downstream activities from pipeline applicants, and suggested that, under the decision in Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017), FERC may be required to consider the environmental effects of those activities as indirect effects of FERC’s pipeline approval. Continue Reading
In Tanimura & Antle Fresh Foods, Inc. v. Salinas Union High School District, the Sixth District Court of Appeal considered whether the Salinas Union High School District (“District”) acted reasonably in imposing a school impact fee on a new 100-unit residential development intended to only house adult seasonal farmworkers without dependents (the “Project”) employed by Tanimura & Antle Fresh Foods (“T&A”). After reviewing the relevant statutory schemes, the Legislature’s intent, and the District’s evidence for imposing the fee, the court found that the District properly determined a reasonable relationship existed between the fee and the new residential construction, even though the development would not generate any new students. Therefore, the District did not act arbitrarily by imposing the fee on the Project. In holding so, the court reversed the trial court judgment.
This decision reinforces the concept that, while school districts must demonstrate a nexus – or reasonable relationship – between development fees and the type of development, such as residential units, they generally are not required to evaluate the ultimate user of a particular development project before imposing district-wide fees on a developer. This ruling will likely have direct repercussions to a developer’s proforma in today’s marketplace, were both developers and local governments are implementing creative strategies for addressing certain housing shortages – such as the provision of specific workforce housing. Continue Reading
Qualified Opportunity Zone Businesses
In December 2017, as part of the Tax Cuts and Jobs Act (“TCJA”), Congress established a new tax incentive program to promote investment in certain low-income communities designated by the IRS as qualified opportunity zones. The tax incentives obtained by investing in a qualified opportunity fund (“QOF”) allow taxpayers to (i) defer paying taxes on capital gain from the sale or exchange of appreciated assets; (ii) receive a permanent exclusion from taxation of up to 15 percent of the originally deferred gain; and (iii) for taxpayers that hold their investment in the QOF for at least 10 years, a permanent exclusion from taxation for any appreciation in excess of the deferred gain.
On April 17, the Treasury Department released its second round of guidance on Opportunity Zone investments in the form of proposed regulations (the “New Proposed Regulations”). These newly proposed regulations supplement and in some cases revise the proposed regulations issued in October of 2018 (the “October Proposed Regulations”). 
The New Proposed Regulations provide further clarity, but leave many questions unanswered. This is Part II of our series of blog posts on the New Proposed Regulations. This post addresses key issues relating to the requirements for qualified opportunity zone businesses and qualified opportunity zone business property. For Part I of our explanation, which addresses qualified investments in qualified opportunity funds, please click on the link here. Continue Reading
It is unlawful for unions to secondarily picket construction sites or to coercively enmesh neutral parties in the disputes that a union may have with another employer. This area of the law is governed by the National Labor Relations Act (“NLRA”), the federal law that regulates union-management relations and the National Labor Relations Board (“NLRB”), the federal administrative agency that is tasked with enforcing the NLRA. But NLRB decisions issued during the Obama administration have allowed a union to secondarily demonstrate at job sites and to publicize their beefs over the use of non-union contractors there, provided the union does not actually “picket” the site. In those decisions, the NLRB narrowed its definition of unlawful “picketing,” thereby, limiting the scope of unlawful activity prohibited by law. Included in such permissible nonpicketing secondary activity is the use of stationary banners or signs and the use of inflatable effigies, typically blow-up rats or cats, designed to capture the public’s attention at an offending employer’s job site or facilities. Continue Reading
Effective May 13, 2019, the Internal Revenue Service (IRS) changed the requirements for obtaining an employer identification number (EIN). The IRS now requires that an individual with a social security number (SSN) or individual taxpayer identification number (ITIN) be named as the “responsible party” on IRS Form SS-4 (Application for Employer Identification Number), except in the case of federal, state, local, and tribal governmental entities (See IR-2019-58). Previously, an entity that owned the requesting entity could be named as “responsible party” and provide its EIN on the form. This change is likely to affect international investors in the real estate industry who form special purpose entities to acquire real property. Continue Reading
The belatedly published South of Market Community Action Network v. City and County of San Francisco (2019) ___ Cal.App.5th ___ (“South of Market”), is the first published decision in which the court applies the principles articulated by the California Supreme Court in the recent Sierra Club v. County of Fresno decision (commonly referred to as “Friant Ranch”) regarding the standard of review for the adequacy of an EIR (discussed in detail here).
The challenged EIR in South of Market set forth two proposed schemes for a mixed‑use development (the “5M Project”) on a 4-acre site in downtown San Francisco: an “Office Scheme” and a “Residential Scheme.” Under both schemes, the overall gross square footage was substantially the same, with varying mixes of office and residential uses. Additionally, each scheme would result in new active ground floor space, office use, residential dwellings, and open space. Both schemes would also preserve and rehabilitate the Chronicle and Dempster Printing Buildings, demolish other buildings on site and construct new buildings ranging from 195 to 470 feet in height.
Petitioners alleged a litany of CEQA violations in their petition, including claims regarding traffic and circulation, open space, inconsistencies with area plans and policies, and the adequacy of the statement of overriding considerations. Applying existing law and specifically relying on Friant Ranch, the South of Market court looked to whether the EIR at issue contained the details necessary for informed decision-making and public participation. The court emphasized that when assessing the legal sufficiency of an EIR, perfection is not required as long as a good faith effort at full disclosure has been made. Contrary to the petitioners’ allegations, the court held this standard was met here, demonstrating that, in this case at least, Friant Ranch does not appear to have led to a significantly different approach to resolving the various CEQA challenges alleged in the petition for writ of mandate.
To avoid redundancy and for the sake of brevity, the remainder of this post will address in detail only the more novel and/or nuanced holdings of the court. Continue Reading