The Real Deal - September 2011

Date: September 15, 2011

MDE Proposes New Erosion & Sediment Control Regulations
by: M. Trent Zivkovich
At the end of August, the Maryland Department of the Environment (MDE) proposed new Erosion & Sediment Control Regulations that will impact most land development activities across Maryland that disturb more than 5,000 square feet of land area and more than 100 cubic yards of earth.  The proposed regulations generally provide that no grading or building permit may be issued for a project unless an erosion & sediment control plan drafted in accordance with its requirements is first approved.

Notably, these new proposed regulations provide for the following:

  • Inclusion of a ‘grading unit’ definition limiting the maximum contiguous area allowed to be graded on a site at a given time to 20 acres.  The handbook directs that work may begin on a second grading unit only when 50% of the first grading unit has been stabilized and approved by the appropriate enforcement authority.
  • Permitted mining activities and landfill operations are excluded from the 20 acre grading unit limitation.
  • With the exception of those areas undergoing active grading, all perimeter controls, dikes, swales, ditches, perimeter slopes and slopes steeper than 3:1 must be stabilized within three calendar days; all other disturbed areas must be stabilized within seven calendar days. 

The MDE anticipates finalizing these regulations before January 1, 2012.  Once finalized, the delegated local counties and authorities have six months to provide MDE with their own local erosion & sediment control ordinances modeled on the new state regulations for approval, and one year to enact those local ordinances.  At this time it is unclear when delegated counties and authorities will apply any new requirements in the final regulations to erosion & sediment control plans submitted for review and approval.  Based on precedent, parties submitting erosion & sediment control plans for review and approval after the date of the MDE regulation’s final approval (expected before January 1, 2012) will likely need to meet the regulation’s requirements. 

These proposed regulations are a re-issued version of those first presented in October 2009 and then formally proposed on August 27, 2010.  After stakeholder groups provided significant comment and feedback to the August 2010 proposed regulations the MDE determined it was necessary to re-propose the regulations.  In addition, the MDE published on its website a draft version of its ‘2011 Maryland Standards and Specifications for Soil Erosion and Sediment Control’ guidance handbook.  This handbook is incorporated by reference in the proposed regulations and serves “as the official guide for erosion and sediment control principles, methods and practices.”

In general, the proposed regulations and the referenced handbook incorporate some of the same themes and practices as required by Maryland’s recently strengthened stormwater laws and regulations.  They do so by limiting the extent of disturbed areas, by accelerating the timeframe in which disturbed areas must be stabilized, and by stressing ‘Environmental Site Design’ practices in erosion and sediment control plans.  These proposed regulations are also intended to provide a means by which the state will comply with the ‘pollution diet’ imposed by the Total Maximum Daily Load (TMDL) for discharges of sediment, nitrogen and phosphorus to impaired waterways in the Chesapeake Bay watershed. 

The MDE will host a public hearing on this proposed regulation at its offices located at 1800 Washington Boulevard, Baltimore, MD 21230 at 10:00 AM on Friday, September 16, 2011.  Written comments on these proposed regulations will be accepted through September 26, 2011.

Energy Star, Tax Incentives and Capital Improvements, oh my! Why Investing Now in Energy Efficiency Shouldn’t Scare Commercial Building Owners
by: M. Trent Zivkovich
Numerous programs exist that provide real financial benefits and market positioning opportunities for commercial and certain multi-family building owners looking to benefit from improvements in energy efficiency.  In fact, some owners are finding that the cost of modest capital improvements can be accounted for through reduced future utility expenses.   If these improvements allow an owner to then capitalize on available federal tax incentives, possibly save their tenants money and position themselves in the marketplace, the benefits can be substantial.
Section 179D Tax Deductions
Building owners, management firms and tenants evaluating ways to reduce the operating costs of their commercial and multi-family buildings should consider the potential benefits of improving building energy efficiency.  Federal tax deductions of up to $1.80 per square foot for certain energy efficiency investments in new existing commercial buildings are available under Internal Revenue Code Section 179D. 
Commercial office buildings, retail buildings, warehouses and rental properties with four or more stories are eligible for this tax deduction.  Critically, parking garage areas may also qualify for the tax deductions.  Certification must be provided demonstrating that:

  • Interior lighting systems, heating, cooling, ventilation (HVAC) and hot water systems, and building envelope systems incorporated or planned to be incorporated in the building will reduce the total annual energy  and power costs for those systems by 50% or more compared to a standard reference building for the full $1.80 per square foot deduction; or
  • Buildings that save or are planned to achieve less than the full 50% reduction can obtain partial deductions of $0.60 per square foot for each of those eligible building systems meeting certain targets compared to the reference standard: 10% in interior lighting cost savings, 20% for HVAC and hot water systems and 20% for the building envelope.

When such investments are made to commercial buildings owned by local, state or federal governments, these tax deductions may be assigned by the owner to the designer of the energy efficiency systems who may then utilize the tax deductions for their own purposes.  Savvy parties have been known to incorporate the savings possible through Section 179D in their bids for such government work.
Energy Star Certification
As many property owners know, the EPA’s Energy Star long-running program applies to more than just washing machines and refrigerators.  In fact, it applies to commercial buildings and now, to certain multi-family high rise buildings.  In late August the EPA announced it was expanding the Energy Star program to new and substantially modified high rise residential buildings with: 1) four and five stories and five or more dwelling units and a central HVAC and hot water system or 2) those with five or more dwelling units and six or more stories.
Qualifying buildings must certify they are designed to be no less than 15% more energy efficient than a standard reference building.  Building features that qualify under this analysis include insulation systems, HVAC systems, a tight building envelope and ductwork, Energy Star-certified lighting and appliances and high-performance windows.
Improvements made under the Energy Star certification process allows a building owner, manager and its tenants to not only achieve significant long-term savings in their utility expenses, but it also allows them to position themselves as leaders in an increasingly challenging marketplace.
Improvements in energy efficiency can come on many levels.  Even modest and relatively simple improvements, such as those to lighting systems, can reap huge rewards in utility cost savings in a relatively short period of time.  When significant tax deductions and achieving Energy Star certification are also readily possible, building owners and their managers should consider what’s possible.  After all, who doesn’t want to save money?