News from the Sustainability Front
My partner Eric Grasberger and I were recently interviewed for an article in the Oregon State Bar Bulletin (October 2009) entitled "Advancing the New Economy: Oregon Lawyers Embrace Sustainability," by Barry Woods. The article, which we've summarized here, provides an interesting take on how lawyers at Stoel Rives and other law firms are integrating concepts of sustainability into their practices, their business and their personal lives. Eric, for example, is a leading green building lawyer and was inpsired by his experience to buy a LEED Gold certified home.
The article prompted Seattle partner Ken Odza to alert me to another sustainability event, which is a little off the topic of Renewable + Law but likely to be of interest to many who follow this Blog Ken, who is a food products litigator at Stoel Rives, has organized a series of three complimentary Webinars entitled "Bringing Environmentally Sustainable Food Products to Market." The first interactive session will discuss "Where to Start? Developing and Financing Sustainable Food Products" and will be held at Noon EDT/9am PST on Tuesday, October 20, 2009. Ken will moderate a panel of experts including Steven Rowe, Senior Vice President and General Counsel, Darigold, Inc.; Karen Karp, President, Karp Resources, New York City; Monica Gelinas, Senior Consultant, Karp Resources, New York City; Duff Bryant, Corporate Finance Lawyer, Stoel Rives, Seattle; and Joel Dahlgren, Cooperative Finance Lawyer, Stoel Rives, Minneapolis For more information about these free Webinars, click here.
Six Years, Not Ten--New Time Limits Govern Certain Claims against Designers, Consultants and Contractors
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Owners and developers of commercial buildings in Oregon, "green" or otherwise, should be aware that, effective January 1, 2010, the Oregon Legislative Assembly has reduced the time period within which to assert claims against those who performed design, planning, surveying, architecture, engineering, construction, repair, or construction supervision or inspection of or for the building, from ten (10) years after substantial completion of construction to only six (6) years after substantial completion of construction.
In the context of green and high performance buildings, claims against designers, consultants and contractors for buildings’ failures to achieve LEED, energy efficiency or similar goals would be subject to the new six (6) year limit. However, performance monitoring itself takes several years, possibly in excess of six years in some cases, to determine whether energy savings are being realized at the levels expected. Also, with new green product entries and the integration of new with old technologies, defects may take longer to materialize and discover. Green buildings therefore pose special risks that, for the owner's perspective, may be particularly ill-matched with a shorter limitations period. Owners and developers will need to adapt their purchase and sale, lease and design, and construction documents to take into account the effects of the new law.
Here are the details:
On July 14, 2009, Oregon Governor Ted Kulongoski signed HB 2434 passed in June by the Oregon Legislative Assembly. Although a chapter number has not yet been assigned to the new act, the law will go into effect for building defect claims that arise on or after January 1, 2010.
As addressed in prior Legal Updates from Stoel Rives’ Development Law Group, HB 2434 reduces from ten years to six years after substantial completion the maximum time period during which an owner of a "large commercial building" can assert claims against those who performed design, planning, surveying, architecture, engineering, construction, repair, or construction supervision or inspection of or for the building.
As defined in the statute, the term "large commercial building" includes but is not limited to:
- rental residential structures of more than four stories
- mixed-use projects
- commercial structures that cost more than $250,000 to construct
- motels, hotels, nursing homes, hospitals and recreational facilities
- commercial structures with a ground area over 10,000 square feet or a height over 20 feet
- commercial rental units in a larger structure, if the unit has a ground area of over 12,000 square feet or a height over 20 feet
The term "large commercial buildings" does not include publicly-owned buildings or condominium buildings. One concern for affected building owners and developers is simply the shortening of the period from ten years to six years after substantial completion during which the owner or developer can pursue a defect claim of its own against the designer or contractor of the building.
A second concern, however, is that building owners and developers may end up with legal obligations to a purchaser or tenant regarding building defects for a longer period than the six years after substantial completion during which the owner or developer can assert the claim against the building’s designer or contractor. In this way, a building owner or developer could have a multi-year exposure to getting "caught in a squeeze" by having a defect claim asserted against it by a buyer or tenant yet having no right to assert that claim against the parties that designed and constructed the building.
Owners and developers of "large commercial buildings" in Oregon should consider modifying the claims, warranty, correction of defects, and statute of limitations provisions in their purchase and sale agreements, leases, and construction and design contracts to respond to the changes in Oregon law made by HB 2434.
If you have any questions about the issues of this update, please contact:
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James A. Zehren |
Eric A. Grasberger |
Thomas R. Page (503) 294-9216 trpage@stoel.com |
Mark R. Feichtinger (360) 699-5900 mrfeichtinger@stoel.com |
SHOW ME THE MONEY: $4.15 Billion Available for Smart Grid Projects
On June 25, 2009, the Department of Energy (“DOE”) issued a Funding Opportunity Announcement (“FOA”) to deploy over $4.15 billion from the American Recovery and Reinvestment Act (“Recovery Act”) to be used to fund smart grid projects. These funds are being deployed through two FOAs. The first FOA provides $3.4 billion to support the Smart Grid Investment Grant (“SGIG”) program and is related to projects that further one or more smart grid functions as listed in Section 1306(d) of the Energy Independence and Security Act of 2007 (“EISA”). The second FOA provides $615 million to support the Smart Grid Demonstration Program (“SGDP”) and is related to projects that demonstrate new and more cost-effective smart grid technologies.
For more information, see our latest client alert available by clicking here.
DOE Announces $154 million in Funding for State Energy Programs
Yesterday, the Department of Energy (“DOE”) announced more than $154 million in Recovery Act funding to four states for their State Energy Programs (“SEPs”). The funds were awarded to California, Missouri, New Hampshire, and North Carolina. The funding is to be provided in two stages to the four states with the second stage requiring successful performance at the first level. The funding is to be utilized in the areas of energy efficiency, workforce training, education and related programs.
California will use its SEP funds to finance a statewide retrofit program, provide clean energy to buildings and facilities, and develop a public education and outreach program focusing on the advantages of energy efficiency. In addition, California will use its SEP funds to further develop a green workforce in the areas of energy efficiency and clean energy. After demonstrating success in the execution of its plan, California will receive additional funds of more than $113 million, for a total of $226 million.
Missouri will use its SEP funds to increase energy efficiency through various measures, including the expansion of existing home efficiency programs, building energy codes, and training programs. Missouri will also examine its most energy-intensive industrial/manufacturing sectors for energy-saving opportunities and will increase energy efficiency through a program that may include energy audits, rebates, and low-interest loans. After demonstrating success in the execution of its plan, Missouri will receive more than $28.6 million of additional funds, for a total of over $57 million.
New Hampshire will use its SEP funds to advance energy efficiency and renewable energy through building codes, competitive loans and grants, and financial and technical assistance to businesses and other institutions. New Hampshire will also support energy efficiency upgrades to colleges, universities, and state-owned buildings. After demonstrating success in the execution of its plan, New Hampshire will receive more than $12 million of additional funds, for a total of over $25.8 million.
North Carolina will use its SEP funds to promote energy efficiency and renewable energy through competitive grants, revolving loans, and education and training programs designed to encourage investment in energy-related technologies. The state will also establish a training program in its community colleges and universities to prepare workers for the green economy. After demonstrating success in the execution of its plan, North Carolina will receive $38 million of additional funds, for a total of $76 million.
U.S. Department of Labor Announces US $500M For Green Job Training
U.S. Dept of Labor announced five grant competitions this week, totaling US $500 million, to fund projects out of Recovery funds that prepare workers for green jobs in the energy efficiency and renewable energy industries. Four of the competitions are designed to serve workers in need of training through various national, state and community outlets. These include Energy Training Partnership Grants, Pathways Out of Poverty Grants, State Energy Sector Partnership and Green Capacity Building Grants. The fifth competition, for State Labor Market Information Improvement Grants, will fund state workforce agencies that will collect, analyze and disseminate labor market information and develop labor exchange infrastructure to direct individuals to careers in green industries. See: link to DOL page: http://www.doleta.gov/grants/find_grants.cfm
Growing Green Jobs
Check out our recent client alert on President-elect Obama's selection of California congresswoman Hilda Solis as Labor Secretary, which we believe highlights the significance the incoming administration is placing on clean renewable energy and the contributing role of green jobs. Also highlighted in our client alert is the efforts of several states, including Minnesota, California and Oregon, to promote green jobs. In Minnesota, Governor Tim Pawlenty recently announced a "Green Jobs Investment Initiative" that includes several proposals for the 2009 Minnesota Legislature, including a Green JOBZ Program, Job Growth and Small Business Investment Tax Credits, and Biomethane and Solar Power Conservation Credits. Stay tuned!
