Applying for California Minority-Owned Business Entity Certification: Process & Benefits

We were pleased to announce this week that client Southern Ute Alternative Energy, LLC received certification as a Minority-owned Business Entity (MBE) from the California Supplier Clearinghouse.  Southern Ute Alternative Energy, LLC is a wholly owned subsidiary of the Southern Ute Indian Tribe’s Growth Fund (www.sugf.com).

Under General Order 156, the California Public Utilities Commission (“CPUC”) requires large investor-owned utilities and their regulated subsidiaries in California to implement programs that expand their business relationships with woman- and minority-owned businesses (“WMBEs”).  The Clearinghouse is a CPUC-supervised entity that audits and verifies the status of WMBEs, and maintains a database of woman, minority, and service disabled veteran owned businesses that is accessible to both the CPUC and participating utilities. Obtaining official MBE status can make a company an attractive partner for California power utilities seeking to promote MBE business opportunities under General Order 156.

There are several ways to secure status in California for a minority owned business.  The options include the National Minority Supplier Development Council (NMSDC), the Small Business Administration’s 8(a) Business Development Program (SBA 8(a)), as well as the CPUC certification process utilized by Southern Ute Alternative Energy, LLC.  While these three certification processes are similar, selection of the certification process is a strategic one, guided by the business purpose and the types of contracts the minority owned business desires to secure.

To meet their diversity mandates or priorities, private and public sector firms search for minority-owned suppliers through programs that have formal certification processes. Without the necessary certification,  eligible businesses stand to miss out on opportunities ranging from branding benefits  to reduced-competition in securing a public contract.

Big Developments for Oil and Gas Operators Utilizing Well Stimulation Treatments

Today saw two significant developments for oil and gas operators utilizing well stimulation treatments in California.

Pursuant to SB 4, the Department of Conservation’s Division of Oil, Gas and Geothermal Resources released a statewide programmatic Draft Environmental Impact Report (“EIR”) analyzing the potential environmental impacts associated with well stimulation treatments, including hydraulic fracturing (aka “fracking”).

The scope of the analysis in the EIR focuses on all activities associated with a stimulation treatment that could occur either at an existing oil and gas well, an oil and gas well that is drilled in the future with the intent to stimulate the well, or a well drilled with a reasonable possibility of becoming subject to a stimulation treatment.  The technical analysis is divided into six study regions and addresses 24 environmental subject areas.  The public review and comment period for the Draft EIR begins today and will end on March 16, 2015.  To review the Draft EIR, visit: http://www.conservation.ca.gov/dog/SB4DEIR/Pages/SB4_DEIR_TOC.aspx.

SB 4 also mandates that the California Resources Agency prepare an independent, scientific study on well stimulation treatments for onshore and offshore oil and gas production in California.  The California Council on Science and Technology and the Lawrence Berkeley National Laboratory released a portion of that independent scientific assessment today for the Resources Agency regarding well stimulation.  The first volume, released today, provides the factual background on well stimulation treatments, and describes the general practices in California and where it has been used.  The remaining two volumes are scheduled for full release in July 2015. To view or download the report, visit: http://www.ccst.us/projects/hydraulic_fracturing_public/SB4.php

New Proposed Proposition 65 Warning Requirements: What You Need To Know

The California Office of Environmental Health and Hazard Assessment (“OEHHA”) recently released its long anticipated Notice of Proposed Rulemaking proposing changes to the warning requirements under Proposition 65’s (“Prop 65”) implementing regulations. In summary, the proposed regulations would establish a new mandatory regulation regarding the responsibility of product manufacturers and others in the distribution chain and provide guidance on the methods and content for safe harbor warnings, including the statement that a person “can be exposed” to a listed chemical.  Significantly, the proposed amendments include an update to the current safe harbor warning and require specific identification of certain chemicals on warning labels.

We issued a client alert advisory on the key details of the proposed rule changes, which you can read here.

 

SB 4 Well Stimulation Treatment Permanent Regulations Finalized

On December 30, 2014, the California Office of Administrative Law (“OAL”) approved the Final Permanent Well Stimulation Treatment Regulations (“Permanent Regulations”).  The regulations go into effect on July 1, 2015, and the Interim Regulations, which were operative all of last year, will remain the governing law in the meantime.  By finalizing the Permanent Regulations, California leads the way with the most stringent, comprehensive hydraulic fracturing (“fracking”) regulations in the country.

The Permanent Regulations are the result of multiple regulatory revisions and reflect extensive input from the public, industry, and various state agencies. Please see our oil and gas resources page for more information about the development of the Permanent Regulations.

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Public Works Board Moving Forward with Condemnations as High Speed Rail Project Breaks Ground

As the High Speed Rail Authority (“Authority”) prepares to begin construction this week of the first segment of the High Speed Rail Project (the “Project”), the State Public Works Board is concurrently scrambling to consider resolutions of necessity to acquire property for the first segment within Fresno and Madera counties.  Because of the recent litigation hurdles the Project has faced, the Authority is now racing against the clock to secure the necessary parcels and to spend $3 billion in federal and stimulus funds for construction of the first segment before September 30, 2017.

Today is the groundbreaking for the Project’s first segment, and the Authority has only secured 96 parcels and still needs 525 parcels for completion of the first segment of the Project.  The Authority has fallen behind schedule because of unsuccessful negotiations with landowners, which has resulted in a few lengthy eminent domain actions against landowners within the route of the first segment.  Eminent domain, also known as condemnation, is required when a public agency is unable to reach an agreement with the landowner to acquire their property.  The Public Works Board, which oversees public land acquisition, considers the public agency’s resolution of necessity to determine if there is a public need to utilize eminent domain.  The public agency can then go on to sue to acquire the property and it is left to the judge to determine whether the agency’s need is warranted.  If so, the judge will assess the fair market value of the property and the “just compensation” due to the owner.

The Authority is under immense pressure to meet its deadlines, especially as construction of the first segment is being met with great enthusiasm.  Only time will tell if the Authority will be able to acquire all of the parcels necessary for completion of the first segment of the Project.  For more information about eminent domain or high-speed rail development, please contact Michael N. Mills (michael.mills@stoel.com) or Juliet H. Cho (juliet.cho@stoel.com).

Here Today & Fracked Tomorrow: A Review of SB 4 in 2014

On Wednesday, December 17, I gave a presentation to the Groundwater Resources Association (“GRA”).  I reviewed the past year’s developments in California’s regulation of hydraulic fracturing and previewed my future predictions for the industry.  Below is a summary of my talk and the power point presentation is attached here.

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New Water Reporting Requirements for Oil and Gas Operators

A new oil and gas reporting bill, Senate Bill 1281, sponsored by State Senator Fran Pavley, was signed by Governor Brown on September 25, 2014.  The California Department of Conservation – Division of Oil, Gas and Geothermal Resources (“DOGGR”) issued a Notice to Operators containing important information on the new law’s reporting mandates on December 8, 2014.

Under Senate Bill 1281, Section 3226.3 was added to the Public Resources Code and requires the State Oil and Gas Supervisor to provide an annual inventory report of all unlined oil and gas field sumps to the State Water Resources Control Board and Regional Water Quality Control Boards.

Section 3227 of the Public Resources Code was also amended to require operators of wells to provide a monthly and quarterly statement disclosing the following information:

  • The source and volume of water produced from each oil field
  • The water used to generate or make up the composition of any injected fluid or gas
  • The volume of untreated water suitable for domestic or irrigation purposes
  • The treatment of water and use of treated or recycled water in activities, such as exploration, development, and production
  • The disposition method of all water used in or generated by oil and gas field activities – including water produced from each well reported
    • Also the identity of any temporary onsite storage of water and the ultimate specific use, disposal method or method of recycling, or reuse of the water

For each reporting requirement, if water is commingled, it must be assigned proportionately to each well.

DOGGR has provided an interim water reporting form on its website for use until February 2015, at which time a final version of the form will be made available. Continue Reading

Fresno County Aggregate Mine Fends Off Court Challenge

In Friends of the Kings River v. County of Fresno, No. F068818 (Cal. Ct. App. 5th Dist., Dec. 8, 2014), the Fifth Appellate District upheld Fresno County’s (County) approval of the Carmelita Mine and Reclamation Project (Project) in 2012.  The Project includes a proposed aggregate mine and related processing plants on a 1,500-acre site located approximately 15 miles east of the City of Fresno.  Stoel Rives attorneys Tom Henry and Michael Sherman represented the applicant, Colony Land Company, L.P., during the approval process with the County.

This decision is important because: (1) the County was not required to mitigate the loss of farmland with agricultural conservation easements (ACEs); and (2) the Court addressed the scope of the State Mining and Geology Board’s (SMGB) authority to review reclamation plans on appeal. Continue Reading

High Speed Rail Moves Forward Without CEQA Review

The Surface Transportation Board (“STB”) issued a declaratory order in a 2-1 vote last Friday, finding that the  California Environmental Quality Act (“CEQA”) is categorically preempted by federal law, as it relates to the Fresno to Bakersfield segment of the California High-Speed Rail Project (“HSR Project”).

Section 10501(b) of Title 49 of the United States Code provides that remedies with respect to rail transportation are exclusive and preempt remedies provided under State or Federal law.  The STB has previously ruled that states or localities are precluded from intruding into matters directly regulated by the STB, in particular when the state or local action would have the effect of foreclosing or unduly restricting the rail carrier’s ability to conduct its operations or otherwise unreasonably burden interstate commerce.

Under this section, the STB could not overlook the fact that CEQA, as a state pre-clearance requirement, could ultimately deny or significantly delay the High-Speed Rail Authority’s (the “Authority”) right to construct a railroad line.  This would directly defy the STB’s exclusive jurisdiction over a project that it regulates.  Even if it could be argued that the Authority created an implied agreement by voluntarily beginning the CEQA process, the STB concluded that any such agreement would unreasonably interfere with interstate commerce because it would prevent the Authority from exercising its authority to construct the rail line, which it had been previously authorized to do by the STB.

As to the public’s concern with any aspect of the Authority’s environmental analysis, the STB noted that the National Environmental Policy Act would still apply to rail construction and the STB could require environmental mitigation conditions if any concerns were raised.

Opponents of the declaratory order had cited to Town of Atherton v. California High Speed Rail Authority (2014) 228 Cal.App.4th 314, where the Court of Appeal held that CEQA was not preempted as to the HSR Project under the market participant doctrine.  According to the state appellate court, the market participant doctrine negated federal preemption because CEQA compliance was proprietary in nature and the Authority was not acting as a regulator.  However, the STB disagreed with the Court of Appeal’s application of the market participation doctrine and held that a private citizen’s group challenge to the adequacy of the environmental review under CEQA is not part of the state agency’s proprietary action, even if it challenges the proprietary action itself.  While the Town of Atherton court concluded that the condition under Proposition 1A requiring compliance with CEQA, demonstrated the Authority was a market participant, the STB left the interpretation of Proposition 1A to state law and the courts.   Nevertheless, despite the funding measure approved by the state’s electorate, the STB concluded that section 10501(b) preempts third party attempts to enforce CEQA against the Project.

The STB’s declaratory order effectively only applies to the Fresno to Bakersfield section of the HSR Project, but it undoubtedly will have the effect of applying to each of the other eight segments of the HSR Project.  Future developments will be closely monitored.

How to Speak Storm Water in 2015: Terminology from the New Industrial General Storm Water Permit

As my colleague Missy Foster recently reported, the deadline for compliance with California’s new Industrial Storm Water permit (2014 Permit) is fast approaching.  There is a lot to learn about the 2014 Permit before it takes effect on July 1, 2015.

The 2014 Permit contains numerous new acronyms.  Below is the quick A to Z of the 2014 Permit’s new and most important acronyms.

  •  BMPs – Minimum Best Management Practices 
    • Dischargers will now be required to implement minimum BMPs, or explain why they do not apply. In contrast, the 1997 Permit allowed Dischargers to consider which non-structural BMPs should be implemented and which structural BMPs should be considered for implementation when non-structural BMPs are ineffective.
    • Dischargers will also be required to implement advanced BMPs (mostly structural BMPs) when implementation of minimum BMPs are insufficient, subject to the limits of the Clean Water Act.
  • ERA – Exceedance Response Actions
    • All Dischargers, regardless of historical discharge, start at baseline status.  Exceedance of a NAL will cause a Discharger to move from baseline to Level 1.  Exceedance of a NAL while at Level 1 will cause a Discharger to move from Level 1 to Level 2.
    • Dischargers at Level 1 or Level 2 status must perform Exceedance Response Actions (ERAs), including report preparation and possible additional BMP implementation.
  • NALS – Numeric Action Levels (NALs) and NAL Exceedances
    • Dischargers must analyze pH, total suspended solids (TSS) and oil & grease (O&G) against new “numeric action levels” (NALs).  Specific industries may have NALs for other pollutants.
    • A Discharger can exceed a NAL by exceeding “instantaneous” maximum limits in two samples in one year, or by exceeding “annual” limits based on the average pollutant concentration in all samples in one year.
  • NEC – No Exposure Certification
    • The 2014 Permit eliminates the 1997 Permit’s conditional exclusion for light industries that do not expose activities to storm water.
    • Instead, Dischargers that do not expose activities to storm water can file a “no exposure certification” (NEC) and site map by October 1, 2015, and pay a fee to the State Board.
  • QSE – Qualifying Storm Event
    • A “qualifying storm event” (QSE) is defined as a precipitation event that:  (1) produces a discharge for at least one drainage area; and, (2) is preceded by 48 hours with no discharge from any drainage area.
  • SMARTS – Storm Water Multiple Application and Report Tracking System
    • Dischargers must submit and certify all reports electronically via the State Board’s website database, called the Storm Water Multiple Application and Report Tracking System (SMARTS).
    • SMARTS can be found here, although the website is not yet ready to accept filings for the 2014 Permit.

Want more information? An overview of some of the highlights of the 2014 Permit can be found here. Also, you can find the new Industrial Storm Water permit and supporting documents here, along with a change sheet adopted by the State Board.

For more information about ensuring your compliance with the new Industrial Storm Water permit, please contact Michael Mills (mnmills@stoel.com, 916.319.4642), Missy Foster (mafoster@stoel.com, 916.319.4673),  Ryan Waterman (rrwaterman@stoel.com, 858.794.4114), Parissa Ebrahimzadeh (pebrahimzadeh@stoel.com, 916.319.4644), or the Stoel Rives attorney already tracking the 2014 Permit for you. More information about Stoel Rives’s water quality practice may be found here.

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