Welcome to the Fall/Winter 2011 edition of "Report from Counsel," a Newsletter for the Firm's clients and the other professionals who consult with the Firm, updating them on our practice as well as important new developments in the law.

New Developments in the Law
"Greening" New York State and Local Building Codes
By Jason Kaplan, Esq.

     In the coming years, a �green building� will no longer be an outlier, but will become the norm as more and more state and local governments enact �green� building regulations. New York and its municipalities have moved far slower in adopting green building standards, but that is likely to change dramatically in the next decade as the state finds ways to meet the Governor�s Executive Order 24 of 2009, which directs the state to reduce its greenhouse gas emissions to 80% below 1990 levels by 2050. Buildings are responsible for 40% of greenhouse gas emissions, nationally, and 80% in New York City. While the motivation for green building may come from a consciousness of sustainability and climate change, an additional driver of green building is the truly measurable positive effect on the bottom line.

     The green building movement seeks to improve the minimum standards set by building codes by introducing more environmentally conscious building design and construction. The two most notable programs establishing standards for sustainable and energy efficient building practices are ENERGY STAR and LEED (Leadership in Energy and Environmental Design). The EPA ENERGY STAR program is focused on increasing the energy efficiency of existing and newly constructed buildings, including those used for residential, commercial, industrial, school and hospital purposes. To receive the ENERGY STAR label, homes must be 20% more efficient than the applicable model code.

     The LEED program is administered by the US Green Building Council (�USGBC�), a non-profit trade organization. The LEED program is a tiered system where builders amass points based on the design and function of building in five main areas: sustainable site development, water savings, energy efficiency, materials selection, and indoor air quality. Based on the amount of points, a building can receive LEED Certification (lowest), Silver certification, Gold certification, or Platinum certification (highest). The LEED ranking system standards change as new technologies and other sustainable practices become known.

     USGBC�s LEED standards have begun to be adopted by municipalities across the U.S., thereby mandating new construction to follow the LEED program. One such municipality is the Town of Babylon. The following is the section of the building code dealing with green building.

     ARTICLE VIII Green Building Certification [Added 12-20-2006 by L.L. No. 40-2006]

� 89-83. Intent.

The Town of Babylon is committed to minimizing the short-term and long-term negative impacts construction has on the environment. The intent of this article is to provide owners and occupants of commercial buildings, offices, industrial buildings, multiple residences and senior citizen multiple residences with the economic benefits of energy and water savings, good indoor air quality and healthy, pleasant and productive surroundings. A further intent of this article is to benefit the community by having buildings constructed that are resource-efficient and conserve energy.

� 89-84. Green building rating system.

  1. The Town of Babylon hereby adopts, in principle, the U.S. Green Building Council�s (USGBC) Leadership in Energy and Environmental Design for New Construction (LEED-NC) Rating System, Version 2.2, and, further, automatically adopts any future versions promulgated by the USGBC. For the first six months after adopting an amended version, applicants may apply under the preexisting version.
     

  2. The LEED-NC system establishes several levels of environmental achievement from a �Certified� rating to a �Platinum� rating. The ratings are attained by earning LEED points in the categories of Sustainable Sites, Water Efficiency, Energy & Atmosphere, Materials & Resources, Indoor Environmental Quality and Innovation & Design Process.

� 89-85. Applicability.

This article shall be applicable to all new construction of a commercial building, office building, industrial building, multiple-residence or senior citizen multiple residence equal to or greater than 4,000 square feet, and the provisions of this article are mandatory for any application received by the Town one year after its effective date.

     The Town of Babylon�s green building code goes further than others promulgated in other parts of the country, mandating LEED certification for commercial and industrial buildings larger than 4,000 square feet. In other states, the threshold size is approximately 50,000 square feet. However, the Town�s adoption of the LEED standards may raise delegation issues, because as written, the code automatically adopts future versions of LEED standards. Since LEED is developed by the USGBC, a private third party, allowing the municipality�s law to change without government oversight may be interpreted as delegating the Town�s law making duties to a private entity and, therefore, making the law invalid.

     This issue of delegation may come to the forefront when the USGBC makes significant changes in its 2012 LEED Code. The new version will address criticism of LEED in its energy efficiency point category. Municipalities are avoiding this problem by adopting codes and standards more stringent than the current LEED minimum. These municipalities are also supplementing their codes by mandating compliance with other codes focusing on energy efficiency, such as the 2012 International Energy Conservation Code, ASHRAE 189.1 Green Standard, and the International Green Construction Code.

     Although municipalities across the country have adopted the LEED standards in their building codes, it appears that the future of green building standards will come from the amendment of public codes to incorporate green building standards directly. Therefore, the USGBC LEED certification, which requires applicants to apply and pay to receive certification, may become less important. States like California, Oregon, and Washington are developing green building codes which establish their own state energy efficiency standards for buildings, providing an alternative to the costly third-party certification programs. The development of green building codes is an area in which local municipalities may be interested. New York is likely headed in this direction; the New York State Climate Action Plan Interim report, released in November 2010, recommends greening building and energy codes to meet former Governor Paterson�s goal of reducing greenhouse gases by 80% below 1990 levels by 2050. Long Island municipalities can lead the State in greening their building codes, gaining positive publicity along with doing good for the environment.

     For more information on environmental law, including current environmental justice issues and EPA policies and practices, please visit the Firm�s Environmental Law Blog on the Firm�s website.

     We will continue to provide further updates if any changes occur in this area of the law.

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Table of Contents

Cover Page

New Developments at the Firm

New Developments in the Law

Directors and Officers Liability and the Fiduciary Duty Owed to the Corporation and its Shareholders Under New York Law

�Greening� New York State and Local Building Codes

Even Substantial Area Variances Are Warranted Under The Statutory Balancing Test When There Is No Detriment To The Surrounding Community

Matters of Interest at the Firm

Out & About

Up Close & Personal

In Memoriam

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