Law and Legal
“The Center on Ethics and the Legal Profession at the Georgetown University Law Center and Thomson Reuters Legal Executive Institute and Peer Monitor® are pleased to present the 2020 Report on the State of the Legal Market detailing our views of the dominant trends impacting the legal market in 2019 and key issues likely to influence the market in 2020 and beyond…”
Christmas arrived early for brownfield developers when the United States Treasury Department (“Treasury”) and the Internal Revenue Service (IRS) released the final set of Opportunity Zone (OZ) regulations on December 19th . The final rules confirm that developers of brownfield sites will be eligible for the favorable tax treatment available under the OZ program. The final OZ rules were published in the federal register earlier this week.
The final OZ rule amends the Income Tax Regulations (26 CFR part 1) by adding final regulations under section 1400Z-2 of the IRS Code. Section 1400Z-2 provides two main federal income tax benefits to eligible taxpayers that make longer-term investments of new capital in one or more designated qualified opportunity zones (QOZs) through qualified opportunity fund (QOF) and qualified opportunity zone businesses.
The first main Federal income tax benefit is the ability of eligible taxpayers to defer certain capital gains until as late as December 31, 2026. Moreover, eligible taxpayers may potentially exclude 10% of such deferred gain from gross income if the eligible taxpayer holds the qualifying investment in the QOF for at least five years. In addition, taxpayers may exclude an additional 5% of such gain if the eligible taxpayer holds that qualifying investment for at least seven years.
The second main Federal income tax benefit is that eligible taxpayers may exclude appreciation on the eligible taxpayer’s qualifying investment in the QOF if the eligible taxpayer holds the qualifying investment for at least 10 years.
Section 1400Z2-2(d)(2)(D) requires either that the original use of qualified opportunity zone business property in the QOZ commences with the QOF or qualified opportunity zone business or that the QOF or qualified opportunity zone business substantially improve the property. After Treasury and the IRS proposed rules in October 2018, developers and the EPA Office of Brownfields and Land Revitalization filed comments requesting clarification on how the “substantial improvement” and the “original use” tests applied to brownfield sites. See our blog post discussing the issues in more detail.
Treasury and IRS issued a second notice of proposed rulemaking in May 2019 (84 FR 18652) responding to the initial comments. The revised proposed rules did not fully address the comments submitted by EPA and the brownfield community.
The third time proved a charm for brownfield developers as the final rule unequivocally and clearly addresses EPA and brownfield developer concerns raised in the two preceding rounds of rulemaking.
Vacancy Period to Qualify for Original Use.
The proposed regulations provided that a building or other structure must be vacant for at least five years prior to being purchased by a QOF or qualified opportunity zone business to satisfy the “original use” requirement. Some commenters suggested the five-year period was too long while others were concerned a shorter period would incentivize developers to warehouse properties.
As a result, the final rule modifies the vacancy period. There is now a special one-year vacancy requirement for property that was vacant prior immediately to the date of publication of a QOZ containing the property is located.. For property that was not vacant at the time of such QOZ designation notice but becomes vacant later, the final regulations require the property to be vacant continuously for at least three years.
Clarification of the Term “Vacant” for Purposes of Applying the Vacant Property Rules
Commenters also asked Treasury and IRS to clarify the meaning of “vacant”. The agencies were told that local governments often hold inventories of brownfield sites and other blighted properties through tax delinquency, abandonment, bankruptcy, with varying historic uses and that there were differing regulatory definitions under state and federal programs of what constituted a vacant site.
The final QZ regulations provide that real property (including land and buildings) is considered to be in a state of vacancy if the property is “significantly unused.” A building or land is considered “significantly unused” under the final regulations if more than 80% of the building or land is not used, as measured by the square footage of useable space.
Buildings Located on Brownfield Sites Qualify as “Original Use” Property
The final regulations make clear that “all real property composing a brownfield site, including land and structures located thereon,” will be treated by the IRS as satisfying the “original use” test requirement of section 1400Z-2(d)(2)(D)(i)(II). In making this decision, Treasury wrote :
“Cleaning up and reinvesting in these properties increases local tax bases, facilitates job growth, utilizes existing infrastructure, takes development pressures off of undeveloped, open land, and both improves and protects the environment”
Clarification of Activities and Expenses That Count as “Substantial Improvements” Test
The final rule provides that the costs of brownfield site assessment and remediation are eligible as cost of “substantial improvement” where:
“ the land has been more than minimally improved, and that the QOF or qualified OZ business must make investments into the brownfield site to improve its safety and environmental standards.”
Requests for Extensions and Safe Harbors Regarding 30-Month Substantial Improvement Period
The proposed rule required substantial improvements had to be completed within 30 months. Treasury received comments requesting an extension of the 30-month period for brownfield sites because of the delays associated with regulatory approvals.
The final regulations provide that if a governmental permitting delay has caused the delay of a project covered by the 30-month working capital safe harbor, and no other action could be taken to improve the tangible property or complete the project during the permitting process, then the 30-month working capital safe harbor will be tolled for a duration equal to the permitting delay.
The post Final Opportunity Zone Regulations Include Brownfield Redevelopment appeared first on Schnapf Environmental Law.
Law Technology Today: “Has Alexa infiltrated your company yet? There are 3.25 billion users of digital voice assistants in the world. It stands to reason that if you haven’t seen one of these devices on employees’ desks yet, you soon will. The industry is expected to grow to eight billion users by 2023…”
Political Risk Outlook 2020 – “The dramatic surge in protests in 2019 has swept up a quarter of countries in its tide and sent unprepared governments across all continents reeling. According to our latest data and forecasts, the turmoil is set to continue unabated in 2020. Our quarterly Civil Unrest Index reveals that over the past year 47 jurisdictions have witnessed a significant uptick in protests, which intensified during the last quarter of 2019. This includes locations as diverse as Hong Kong, Chile, Nigeria, Sudan, Haiti and Lebanon…The number of countries rated extreme risk in the Civil Unrest Index has also jumped by 66.7%; from 12 in 2019 to 20 by early 2020. Countries dropping into this category include Ethiopia, India, Lebanon, Nigeria, Pakistan and Zimbabwe. Sudan, meanwhile, has overtaken Yemen to become the highest risk country globally. An ‘extreme risk’ rating in the index, which measures the risks to business, reflects the highest possible threat of transport disruption, damage to company assets and physical risks to employees from violent unrest. Most sectors, ranging across mining, energy, tourism, retail and financial services, have felt the impacts over the past year. The resulting disruption to business, national economies and investment worldwide has totalled in the billions of US dollars. In Chile, the first month of unrest alone caused an estimated USD4.6 billion worth of infrastructure damage, and cost the Chilean economy around USD3 billion, or 1.1% of its GDP…”
“OPEC’s World Oil Outlook (WOO) is part of the Organization’s commitment to market stability. The publication is a means to highlight and further the understanding of the many possible future challenges and opportunities that lie ahead for the oil industry. It is also a channel to encourage dialogue, cooperation and transparency between OPEC and other stakeholders within the industry. The interactive version of the WOO also provides the possibility of downloading specific data and information. The World Oil Outlook combines the expertise of the OPEC Secretariat, professionals in OPEC Member Countries and the Organization’s Economic Commission Board, as well as input from various other sources.”
OCLC – Reflections on Collective Collections By Brian Lavoie, Lorcan Dempsey, and Constance Malpas: “Collective collections are the combined holdings of a group of libraries, analyzed and possibly managed as a unified resource. Constructing, understanding, and operationalizing collective collections is an increasingly important aspect of collection management for many libraries. This article presents some general insights about collective collections, drawn from a series of studies conducted by OCLC. These insights identify salient characteristics of many collective collections and serve as a starting point for developing collective collection-based strategies for such library priorities as shared print, digitization, and group-scale discovery and fulfillment.”
EveryCRSReport: Presidential Pardons: Overview and Selected Legal Issues,, January 14, 2020: “Article II, Section 2 of the U.S. Constitution authorizes the President “to grant Reprieves and Pardons for Offenses against the United States, except in Cases of Impeachment.” The power has its roots in the king’s prerogative to grant mercy under early English law, which later traveled across the Atlantic Ocean to the American colonies. The Supreme Court has recognized that the authority vested by the Constitution in the President is quite broad, describing it as “plenary,” discretionary, and largely not subject to legislative modification. Nonetheless, there are two textual limitations on the pardon power’s exercise: first, the President may grant pardons only for federal criminal offenses, and second, impeachment convictions are not pardonable. The Court has also recognized some other narrow restraints, including that a pardon cannot be issued to cover crimes prior to commission. The pardon power authorizes the President to grant several forms of relief from criminal punishment. The most common forms of relief are full pardons (for individuals) and amnesties (for groups of people), which completely obviate the punishment for a committed or charged federal criminal offense, and commutations, which reduce the penalties associated with convictions. An administrative process has been established through the Department of Justice’s Office of the Pardon Attorney for submitting and evaluating requests for these and other forms of clemency, though the process and regulations governing it are merely advisory and do not affect the President’s ultimate authority to grant relief.
As for whether a President may grant a self-pardon, no past President has ever issued such a pardon. As a consequence, no federal court has addressed the matter. That said, several Presidents have considered the proposition of a self-pardon, and scholars have reached differing conclusions on whether such an action would be permissible based on the text, structure, and history of the Constitution. Ultimately, given the limited authority available, the constitutionality of a self-pardon is unclear…”
WSJ.com [paywall – alternative free link] – “Flight cancellations increased. So did long delays, bumping ticketed passengers and consumer complaints. Overall, 2019 was a frustrating year for many U.S. travelers. But the travel pain wasn’t evenly distributed. Delta excelled and finished at the top of the Middle Seat Scorecard for the third year in a row. At the bottom of the rankings? American, for the third year in the past five. Those two airlines were on different flight paths in 2019. Just consider the difference in flight cancellations. Delta averaged only 36 a day in 2019; American averaged 159 a day. In mishandled baggage, Delta averaged 1,345 late or lost bags each day; American mishandled more than twice as many. And Delta involuntarily bumped a total of nine passengers from its flights over the most recent 12-month period reported; American bumped more than 15,000…”
YaleEnvironment360: “With thousands of species on the move as the climate changes, a growing number of scientists say that the dichotomy between native and alien species has become an outdated concept and that efforts must be made to help migrating species adapt to their new habitats…In recent years, scientists have documented countless species shifting their ranges toward the poles, higher into the mountains, and deeper into the seas in response to the changing climate. Deciduous shrubs of willow, birch, and alder have spread into the low Arctic tundra. Brightly colored tropical parrotfish and rabbitfish have arrived in the temperate kelp forests of the eastern Mediterranean. Elkhorn corals from the Caribbean now sprout in thickets off the coast of Galveston, Texas. The trend is expected to continue as the climate crisis deepens, with species that societies rely upon for a wide range of economic, cultural, and recreational value shifting their ranges to survive. “The entire trajectory of natural capital, from aesthetic to economic,” says University of Florida wildlife ecologist Brett Scheffers, “is going to be moving.” The coming exodus, Scheffers and other scientists say, will require a transformation in the way we think about wildlife management and conservation — and a reevaluation of the traditional native-alien dichotomy that has governed it. For decades, conservation biology has characterized the movement of species into new habitats as potential invasions of alien species with the capacity to threaten local ecosystems and already resident species, leading to the formulation of policies to reflexively repel the newcomers. This approach, and its underlying classification of wild species as either “native” (and thus worthy of protections) or “alien” (and thus likely not) has been the subject of growing controversy in recent years…”
“Economic and political polarization will rise this year, as collaboration between world leaders, businesses and policy-makers is needed more than ever to stop severe threats to our climate, environment, public health and technology systems. This points to a clear need for a multistakeholder approach to mitigating risk at a time when the world cannot wait for the fog of geopolitical disorder to lift. These are the findings of the World Economic Forum’s Global Risks Report 2020, published today. The report forecasts a year of increased domestic and international divisions and economic slowdown. Geopolitical turbulence is propelling us towards an “unsettled” unilateral world of great power rivalries at a time when business and government leaders must focus urgently on working together to tackle shared risks. Over 750 global experts and decision-makers were asked to rank their biggest concerns in terms of likelihood and impact and 78% said they expect “economic confrontations” and “domestic political polarization” to rise in 2020. This would prove catastrophic, particularly for addressing urgent challenges like the climate crisis, biodiversity loss and record species decline. The report, produced in partnership with Marsh & McLennan and Zurich Insurance Group, points to a need for policy-makers to match targets for protecting the Earth with ones for boosting economies – and for companies to avoid the risks of potentially disastrous future losses by adjusting to science-based targets…”
WSJ.com [paywall] – “The Federal Bureau of Investigation will notify state officials when local election systems are believed to have been breached by hackers, a pivot in policy that comes after criticism that the FBI wasn’t doing enough to inform states of election threats.
The FBI’s previous policy stated that it notified the direct victims of cyberattacks, such as the counties that own and operate election equipment, but wouldn’t necessarily share that information with states. Several states and members of Congress in both parties had criticized that policy as inadequate and one that stifled state-local partnerships on improving election security…”
The Atlantic: “The judging for the eighth annual Ocean Art Underwater Photo Contest, organized by the Underwater Photography Guide, has wrapped up, and the winning images and photographers have been announced. Greg Lecoeur took Best in Show with his image of a crabeater seal in Antarctica. The contest organizers have shared with us some of the winners and honorable mentions below, from the 16 categories of underwater photography. Captions were written by the individual photographers and have been lightly edited for content.”
NBC News: “The Trump administration violated the law by withholding military aid to Ukraine, the U.S. Government Accountability Office said in a decision released Thursday. “In the summer of 2019, the Office of Management and Budget (OMB) withheld from obligation funds appropriated to the Department of Defense (DOD) for security assistance to Ukraine,” the government watchdog’s ruling said.
“Faithful execution of the law does not permit the President to substitute his own policy priorities for those that Congress has enacted into law. OMB withheld funds for a policy reason, which is not permitted under the Impoundment Control Act of 1974 (ICA). The withholding was not a programmatic delay. Therefore, we conclude that OMB violated the ICA.”…
In Custodia Legis: “The Law Library of Congress, in collaboration with the Library of Congress Web Archiving Team, is excited to announce the release of a new web archive, The United States Supreme Court Nominations Web Archive. This archive collection consists of blogs, academic articles, congressional press releases, and media articles related to the nominations of John Roberts, Harriet Miers, Samuel Alito, Sonia Sotomayor, and Elena Kagan for the United States Supreme Court. This content covers the years 2005, 2006, 2009, and 2010…”
MyBroadBand: “Google is planning to “render obsolete” a key tool advertisers use to track people around the web, increasing user privacy but also disrupting the marketers and publishers who rely on the search giant’s ad products. Over the next two years the Alphabet Inc. unit intends to stop supporting third-party cookies in its Chrome browser, Google said in a blog post Tuesday. Cookies are little bits of code that stick in peoples’ browsers and follow them around the web and are a core part of the online advertising landscape. They allow advertisers to target people with ads for websites they previously visited and make it easier to determine how effective certain ads were in getting internet surfers to buy something…”
AP: ““OK, Boomer” made its first appearance in the Supreme Court Wednesday, invoked by baby boomer Chief Justice John Roberts 12 days before he turns 65. The meme is a favorite of younger generations and Roberts used it in questions in a case about age discrimination in the workplace. “The hiring person, who’s younger, says, ‘OK, Boomer,’ once to the applicant,” Roberts said as he conjured a hypothetical exchange to try to figure out when an older federal employee might be able to win a lawsuit under the Age Discrimination in Employment Act.
It was the first time, according to databases of high court arguments, the somewhat pejorative phrase used by younger people to criticize the less flexible, tolerant and tech savvy ways of their elders has been uttered in the Supreme Court, where the nine justices range in age from 52 (Neil Gorsuch) to 86 (Ruth Bader Ginsburg)…”
VentureBeat: “Verizon Media, the media and digital offshoot of telecommunications giant Verizon, has launched a “privacy-focused” search engine called OneSearch. The launch comes at a time when public trust in big technology companies has hit rock bottom following countless reports of breaches, lapses, and data harvesting escapades. Consequently, “privacy” is pretty much the buzzword of choice emanating from most of the big tech companies, and with its new search engine, it’s clear that Verizon is adopting a similar tack. With OneSearch, Verizon promises there will be no cookie tracking, no ad personalization, no profiling, no data-storing, and no data-sharing with advertisers…”
Input – “Since the dawn of Twitter, users have been begging and pleading for a way to edit Tweets. If you’ve ever used Twitter, odds are you’ve tweeted something so pithy you’d consider it for your tombstone only to notice a few hours — and favorites — later that it’s got a glaring typo in it. Sadly, despite the entreaties of those upon whose usage the service depends, Twitter head honcho Jack Dorsey says you’ll “probably” never be able to edit a tweet. Dorsey was asked during a video Q&A with Twitter users conducted by Wired whether 2020 would be the year Twitter would introduce an edit function. Dorsey’s short answer? “No.”…
ZDNet: A new set of 25 Android apps caught illegally charging users at the end of a trial period. “Security researchers from Sophos say they’ve discovered a new set of “fleeceware” apps that appear to have been downloaded and installed by more than 600 million Android users. Our editors hand-picked these products based on our tests and reviews. The term fleeceware is a recent addition to the cyber-security jargon. It was coined by UK cyber-security firm Sophos last September following an investigation that discovered a new type of financial fraud on the official Google Play Store. It refers to apps that abuse the ability for Android apps to run trial periods before a payment is charged to the user’s account. By default, all users who sign up for an Android app trial period, have to cancel the trial period manually to avoid being charged. However, most users just uninstall an app when they don’t like it. The vast majority of app developers interpret this action — a user uninstalling their app — as a trial period cancelation and don’t follow through with a charge. But last year, Sophos discovered that some Android app developers didn’t cancel an app’s trial period once the app is uninstalled and they don’t receive a specific request from the user. Sophos said it initially discovered 24 Android apps that were charging obscene fees (between $100 and $240 per year) for the most basic and simplistic apps, such as QR/barcode readers and calculators. Sophos researchers called these apps “fleeceware.”..
The Christian Science Monitor – As Roberts enters fray, legacy of judicial independence at stake – Why We Wrote This: “Presiding over an impeachment trial, Chief Justice John Roberts will seek to embody the judicial independence he often promotes. But the remainder of the Supreme Court term may be a tougher test…For an institutionalist like Chief Justice Roberts, the political storms ahead may be the most challenging period of his judicial career. A man who famously declared that judges are like umpires who are supposed to “call balls and strikes” during his confirmation hearing will now have the opportunity – or the burden, depending on your perspective – to craft a strike zone that will have a tremendous significance for the country, the president, and public trust in the courts. “He is already very cognizant of the somewhat precarious state of the judiciary currently,” says Amy Steigerwalt, a political science professor at Georgia State University. [h/t Pete Weiss]
“The court is on the precipice of [several divisive cases], he’s standing in the middle of it … and he will have to preside over an impeachment trial while this is all going on,” she adds. “There’s a lot there, and I think it’s going to be really difficult.”..