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IMLA Annual Meeting
September 11, 2014
BB&K: Michelle Ouellette, Harriet Steiner and
Gerard Lavery Lederer
©2014 Best Best & Krieger LLP
• Congress: Transportation Gerry Lederer
• Trains & Oil Transport
Harriet Steiner
• Endangered Species
Michelle Ouellette
• Caveat – These materials may need to be updated in Baltimore as they were assembled before
Congress had adjourned for the summer.
• Congress has 7 work days before end of the
fiscal year and leaving to campaign for
reelection. In that time it must:
 Fund the government for 2015
 Deal with the funding short falls in DHS for border
issues and drought/fires in the west;
 Authorize the President’s actions against ISIS; and
 Make sure they never appear to get along so as not
to offend their base.
Internet Tax
Cell Tax
Possible On-Line Tax
N.B. This is not only a federal
• CHALLENGE – insolvency of the Highway
trust fund while Congress cannot or will not
rewrite or update federal highway programs.
 In the last 6 years, there have been ten surface
transportation extension-on top of eighteen short
term budget measures--in the last 6 years
Reduction of purchasing power
• Loses to Inflation
 18 cents a gallon for gasoline 24.4 cents for diesel
 Last increased in 1993
• Fewer Gallons purchased
 Better gas mileage in US fleet
 Fewer miles being driven
• Fund the Government
• Address tax provisions that have expired
 Protect bond authority and tax deductibility
 Internet Tax Freedom
September 2014
Harriet Steiner
Explosion of Crude Oil Shipments
• 2008 – 9500 rail carloads of crude moved by
• 2013 – 415,000 rail carloads
• Average Bakken crude oil shipments travel
over 1000 miles from point of origin to refinery
 ( source DOT press release 7/23/2014)
Level of Hazard
• May 14, 2014: US DOT concluded:
• Crude Oil shipments by rail from the Bakken
region pose an “imminent hazard” to the safe
transportation of hazardous materials.”
Recent Accidents
• Lac Megantic, Quebec - 7/5/2013 – 63 of 72
cars derailed resulting in multiple explosions
and fires
 47 fatalities, extensive damage
 Braking force was insufficient to hold train on the
1.2 % grade
 Crude more volatile than expected
• Gainford, Alberta – 10/19/2013
 9 tank cars of propane and 4 tank cars of crude
derailed as train was entering a siding at 22 mph
• Aliceville, Alabama – 11/8/2013
 90 cars of crude derailed near a wetland area.
30 cars derailed and many burned
• Casselton, North Dakota – 12/30/2013
 106 tank car train struck another derailed train;
34 cars derailed, 20 carrying crude exploded and
• Philadelphia, PA - 1/20/14
 7 cars of a 101 car train derailed on bridge
• Vandergrift, PA – 2/13/2014
 21 cars of a 120 car train derailed, 19 of these were
carrying crude, 4 released product
• Lynchburg, VA – 4/30/2014
 15 cars in a crude oil train derailed in downtown, 3
caught fire, some cars went into the river
Emergency Regulations
• Safety Advisory strongly urging those shipping
or offering Bakken crude oil to use tank car
designs with the highest level of integrity
available in their fleets. In addition, PHMSA
and FRA advise offerors and carriers to the
extent possible to avoid the use of older legacy
DOT Specification 111 or CTC 111 tank cars
for the shipment of Bakken crude oil.
Emergency Regulations
• Each railroad operating trains containing more
than 1,000,000 gallons of Bakken crude oil, or
approximately 35 tank cars, in a particular state
to provide the SERC notification regarding the
expected movement of such trains through the
counties in that state.
• Crude Oil from the Bakken region of North
Dakota is more volatile and flammable than
other crude oils
NPRM for the safe transportation of
crude oil, flammable materials
• NPRM proposes:
• Tank Standards
• Classification of Testing Program
• Operational requirements for high hazard trains
• Comments are due on September 30, 2014
High Hazard Flammable Train
• A train carrying 20 or more tank carloads of
flammable liquids (Class 3: including crude
and ethanol)
• Current: voluntary speed limit of 50 mph
 Also 40 mph to any HHFT with at lease one non
DOT 111 car with crude within a High Threat
urban area.
• Proposed: all HHFTs to 50 mph in all areas if
cars meet enhanced standards
NPRM Comments Request
• Three options for 40 mph for HHFT unless all
cars meet DOT 117:
• restriction in all areas
• In High Threat urban areas
• In areas with a population over 100,000
• “Which option would have the greatest net
social benefits”
Car Safety Standards
• Existing cars retrofitted to meet the selected
performance requirement except for top
fittings. If not retrofitted, then retired,
repurposed or speed restricted for 5 years.
• Enhanced Braking; alternative brake signal
propagation systems; electronic controlled
pneumatic brakes, 2-way end of train device or
distributed power
Car Standards
• Three options for tank car standards:
• 1. 9/16 inch steel, with electronically
controlled pneumatic brakes and rollover
• 2. 9/16 inch steel, no requirement for the
brakes for rollover in option 1
• 3. 7/16 inch steel, no requirement for brakes
and rollover in option 1
Additional issues
• Improved classification and characterization of
• Rail routing risk assessment; if technically
feasible reroute to avoid populated and
sensitive areas
• Notification to State emergency commissions –
codify emergency order
 Reduce threshold for compliance to 20 cars, etc.
Areas of concern
• Remove more volatile elements (flammable
nature gas liquids) prior to shipment
 Small processing towers known as stabilizers that
remove/shave off NGLs
 Common in other parts of the Country
 Known technology
• Positive Train Control: prioritize PTC which is
designed to automatically stop or slow trains
Prioritize Prevention
• Apply safety standards that look to the future
 Building Standards
Earthquake standards
Building fire safety standards
Flood hazard area standards
Air quality standards
• Prevention is less expensive than the cost of
response and recovery
Safety First
• Speed Limits in all areas
 Example Davis, CA, half the city is in the
Sacramento High Threat area (UC Davis is not);
population is 72,000; but high risk because of
curve in track; heavily used passenger depot; at
grade crossings; sensitive habitat areas adjacent to
• Study Risks of smaller trains but increased
number of trains
Additional Issues
• Require enhanced tank car features – marginal
cost when compared to response and recovery
• Phase out unsafe tank cars on an extremely
expedited schedule
• Positive Train Control
First Responders
• Fully funded regular training
• Fully funded coordinated equipment and
• Provide routine information for planning
• Real time information in the event of an
accident integrated into the emergency
response system
Coordinated First Response Planning
• Require comprehensive oil spill response plans
for every type of train and line carrying more
than 3500 gallons of class 3 liquids per month
• Require coordination of OSPRs with state and
local OSPRS
• Coordinated emergency response plans and
programs, including state and local responders
• Require payment of all required clean-up and
Selected Cost Issues
• National fee from railroads and freight shippers
to pay for safety improvements and
• Demonstration of financial capacity to address
risks of hazardous material shipments (to cover
entire supply chain)
Additional Issues
• Storage of tankers, etc. on Sidings in urban
• At grade crossings
Harriet Steiner
Best Best & Krieger LLP
500 Capitol Mall, Suite 1700, Sacramento, CA 95814
Phone: 916-325-4000; 916-551-2821 (direct)
Email: [email protected]
Hot Federal Issues: Speeding Development by
Planning for the Endangered Species Act
International Municipal Lawyers Association,
79th Annual Conference
Baltimore, Maryland—September 11, 2014
Michelle Ouellette
Best Best & Krieger LLP
Riverside CA, 92501 USA
Michelle Ouellette
• Ms. Ouellette joined Best Best & Krieger LLP in 1989 as a first
year associate. She graduated from the University of California,
Santa Cruz in 1980, with honors, and received her Juris
Doctorate from the University of Southern California in 1989.
• Ms. Ouellette represents municipal, special district and private
clients in environmental issues arising under the California
Environmental Quality Act (“CEQA”), the National
Environmental Policy Act (“NEPA”), the California (“CESA”)
and federal Endangered Species Acts (“ESA”) and wetlands
The Problem
• The federal Endangered Species Act
(“ESA”) can stop or significantly delay
The Solution
• Cities can avoid the debilitating effects of the
ESA by being proactive:
 Habitat Conservation Plans (“HCPs”).
 Mitigation and conservation banking.
The Federal Endangered Species Act
Listing of Species
• (“Section 4,” 16 USC § 1533).
“Take” Prohibition
• (“Section 9,” 16 USC § 1538).
Listing of Species
 Species includes any subspecies of fish or wildlife or plants, and any
distinct population segment of any species of vertebrate fish or wildlife
which interbreeds when mature.
 An endangered species is any species which is in danger of extinction
throughout all or a significant portion of its range.
 A threatened species is any species likely to become an endangered
species within the foreseeable future throughout all or a significant
portion of its range.
“Take” Prohibition
• It is unlawful for “any person” to “take” any endangered
• Person is defined to include both private individuals and
government agencies and officials.
• Take means “to harass, harm, pursue, hunt, shoot, wound,
kill, trap, capture, or collect, or to attempt to engage in any
such conduct.”
 Requires actual death or injury to identifiable member of
 Or alteration of the site, threatening the survival of a listed
species or plant.
• Babbitt v. Sweet Home Chapter of Comm. for a Great
Oregon, 515 U.S. 687 (1995)
• Violators may be subject to criminal penalties of up to $50,000
and one year imprisonment per violation.
Local Government Liability for “Take”
• Local governments have been held liable under the ESA:
 Palila v. Hawaii Department of Land and Natural Resources, 639 F.2d 495 (9th Cir 1981)
(holding the Hawaii Department of Land and Natural Resources liable for a “take” after it
maintained herds of feral sheep and goats for sport hunting purposes within a listed bird’s
critical habitat);
 Strahan v. Coxe, 127 F3d 155 (1st Cir 1997). (finding Massachusetts liable for “take” after it
authorized commercial fishing methods in which Northern Right whales became entangled in
the fishing gear).
 Loggerhead Turtle v. County Council of Volusia County, 148 F3d 1231 (11th Cir 1998) (finding
Volusia County, a coastal county in northeast Florida, liable for “take” after it refused to ban
beachfront parking during nesting season to protect the loggerhead sea turtle, a threatened
species, and the green sea turtle, an endangered species).
• Note: the court dismissed the suit as moot after Volusia County obtained an incidental take
permit from the USFWS.
The First Big Test of ESA: The Snail Darter Case. Tennessee
Valley Authority v. Hill, 437 U.S. 153 (1978).
• Construction of the Tellico Dam commenced before the ESA came into
effect and over $100 million had been spent on dam construction.
• Litigants sought and obtained a temporary restraining order (“TRO”)
because construction and operation of the dam would likely jeopardize the
continued existence of the snail darter.
• The Supreme Court upheld the TRO:
• “The ESA represents the most comprehensive legislation for the
preservation of endangered species ever enacted by any
nation.” (TVA at 180.)
• In balancing economic cost with protection of the species, the
Court held that “neither the ESA nor Art. III of the Constitution
provides courts with the authority to make such fine utilitarian
calculations. On the contrary, the plain language of the Act . . .
shows clearly that Congress viewed the value of endangered
species as ‘incalculable.’” (TVA at 187.)
Horror Story
Sands Flower-loving Fly
 Adults only active in August
and September;
 Other than that, fly spends
entire life underground
• After the fly was listed, the San
Bernardino Medical Center (SBMC)
had to be redesigned to provide 1.92
acres of protected habitat for eight
flies believed to occupy the site.
• SMBC had to dedicate 200 acres of
land to preserve habitat, resulting in
elimination of 150 residential units,
killing financial projections for the
overall project.
• The cost per fly amounted to
$413,774 ($3,310,199 total) and a
one-year construction delay.
Some Solutions:
Take Permits & HCPs
• ESA allows listed species to be taken “incidental to other
lawful activity,” with a Section 10(a) permit.
 (10(a) permit form)
• Section 10(a) was added to ESA to expressly authorize the
permitting of incidental take in accordance with an
adopted HCP.
• Note: When there is no federal nexus, an incidental take of
endangered species by a private developer or owner may
be allowed on a finding that the take would not jeopardize
the continued existence of the species.
Section 10(a) Requirements
• Section 10(a) authorizes take if:
 The take is incidental;
 The take occurs in accordance with an HCP that minimizes
and mitigates “to the maximum extent practicable”;
 The applicant ensures adequate HCP funding;
 The taking will not “appreciably” reduce the likelihood of
survival and recovery of the species; and
 The HCP meets other “necessary or appropriate” measures.
• No Surprises Benefit:
 Under Section 10(a)(1)(B), if “unforeseen circumstances”
arise, USFWS will not require additional land, water,
funding or restrictions beyond the requirements of the HCP.
Characteristics of HCPs
• HCPs can cover one species or hundreds of
• “Low Affect” HCP is a relatively easy,
streamlined process.
• Can cover ten acres or millions of acres.
• Each one is individually negotiated with local
Government, private property owners, State
and Federal wildlife agencies.
How do HCPs Speed Development?
• Reduces uncertainty, delays, and costs.
• Streamlines the regulatory permitting process and reduces
permitting delays.
 In CA, HCPs have been estimated to speed development
anywhere between three months and three years, depending
upon project complexity.
 In CA, HCP permitting is credited with saving public and
private developers an estimated seventy million dollars
 Estimated to save ten to forty thousand dollars per acre.*
* White Paper: Economic Effects of Regional Habitat Conservation Plans, available at:
The Water Resources Reform and
Development Act of 2014
• Bill signed into law June 2014 that allows low
interest, long term federal loans to provide
funding for Habitat Conservation Plan land
Mitigation & Conservation Banking
• Jargon:
 “Mitigation Bank” = Wetlands
 “Conservation Bank” = Species & Related Habitats
• Purpose:
 Attempt to provide, in advance, mitigation for
anticipated impacts to wetlands and/or species
• Form:
 Public, private, or combination thereof
Creating “Credits”
• Agencies with regulatory authority over the
“impact” need to sign off on the “credit”
 Wetlands:
• U.S. Army Corps of Engineers
• State agencies
 Ex. Ca. Dept. of Fish and Wildlife
 Species
• State Agencies
How Does Banking Speed
• Certainty and predictability in terms of
availability, price, and management.
• Better and more diverse ecological values and
interconnectedness than “postage stamp”
mitigation sites.
• Facilitates large-scale and long-term planning.
• You know how to mitigate up front.
Development (con’t)
• Ownership and management is established in
• No “temporal” impacts – mitigation on hand
contemporaneous with impacts.
• Moves away from “on site” preference when it
is not most beneficial ecologically.
Success Story: Delhi Sands Flowerloving Fly Conservation Bank
• Vulcan Materials
 Had planned site with 18
• Bank opened in June
2005 and had sold first 3
credits by December
• Price: $150,000 per
ESA: Critical Habitat
• In addition to listing species as threatened or endangered, the
Secretary must also list “critical habitat” for each species “to
the maximum extent prudent and determinable.” (16 U.S.C.
• Critical habitat = areas essential to the conservation of the
• Recent proposed federal regulation and policy:
 Revises definition of “destruction or adverse modification” of critical
 Proposals to amend regulations for designating and revising critical
 Draft policy on Implementation of Section 4(b)(2) of the ESA.
• Recently proposed federal legislation (Pass the House on July 29, 2014):
• H.R. 4315 would require the Secretaries of the Interior and Commerce to
make publicly available online scientific and commercial data related to
the listing of a species as endangered or threatened under the ESA
• H.R. 4316 would amend the ESA to require the Secretary of the Interior
to both submit and make publicly available and searchable online an
annual report detailing federal expenditures for lawsuits brought under
the ESA making claims against the Department of the Interior, the Forest
Service, or the National Marine Fisheries Service.
• H.R. 4317 would amend the ESA to require the Secretaries of the Interior
and Commerce to provide to affected states all data that is used as the
basis for the determination to list a species as endangered or threatened
and also receive data submitted by a state, tribal, or county governments
as “best scientific and commercial data available” in these
• H.R. 4318 would amend the ESA to replace the current standard for
awarding court costs, including attorney fees, in citizen suits with the
federal judicial code standard for awarding costs to a prevailing party.
Thank you for attending.
Michelle Ouellette
Best Best & Krieger LLP
3390 University Avenue, 5th Floor
Riverside CA, 92501 USA
(951) 826-8373
[email protected]
About BB&K
Best Best & Krieger LLP is a full-service law firm
with more than 200 attorneys in California and
Washington, D.C. delivering effective, timely and
service-oriented solutions to complex legal issues
facing public agencies, businesses and individuals.
BB&K lawyers serve as city attorney to 30 California
cities and as general and special counsel to special
districts, school districts, cities, counties and other
public agencies. The firm has been helping
businesses, from local to international, achieve their
goals for more than 100 years.

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