Key Environmental Provisions of the American Recovery and Reinvestment Act

March 19, 2009

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act (Act), a stimulus package containing billions of dollars in tax cuts and spending programs. A key component of this Act is spending targeted for environmental projects. These “green” investments include clean energy projects; research and development for energy efficiency and renewable energy; energy generation, transmission, and efficiency improvements; environmental remediation projects; and improvements to infrastructure, including dams, tunnels, and bridges. While the mechanics of the package, including how the funds will be made available and the level of oversight and review, are not entirely clear, what is clear is that this package presents opportunities for many.

The environmental-related opportunities primarily lie in the area of energy research, development, implementation, and distribution; however, significant funding also is available for infrastructure improvements (including transportation and waste water and waste disposal facilities) and environmental remediation and restoration (including Superfund, waterways, and public parks).

Most of the funding will be distributed through existing mechanisms, such as the $16.8 billion for Energy Efficiency and Renewable Energy which will be appropriated to the Department of Energy. Of that amount, $3.2 billion is allocated for Energy Efficiency and Block Grants for implementation of programs under Subtitle E of Title V of the Energy Independence and Security Act of 2007. Another $5 billion is for the Weatherization Assistance Program under Part A of Title IV of the Energy Conservation and Production Act. However, other provisions of the Act lack specificity. For example, Fossil Energy Research and Development is funded at $3.4 billion without any specific program requirements. The same is true for Non-Defense Environmental Clean-up at $483 million, as well as other funds. The Conference Report adds some details but is not a full road map as to how the funds will be distributed or the qualifications to receive these funds. We posit that in the weeks ahead, additional analysis and review will provide this much needed clarity.

You may be interested in forming LLCs or other legal entities to take advantage of funds available for research, development, and implementation of clean energy projects. Identifying and protecting intellectual property associated with new and/or enhanced technology will necessitate legal assistance. Interpreting tax and other financial incentives in the Act will require legal counsel. As projects are developed, environmental considerations such as permitting, environmental impact statements, and regulatory compliance will need to be analyzed by knowledgeable environmental attorneys. While the opportunities are many, timely navigation through the legal issues will be essential for you to maximize these opportunities.

As you consider the opportunities available through this Act, please contact Cheryl-Lynne Patrick or Paul Casper regarding any environmental opportunities.

Click here to learn more about Key Environmental Provisions of the American Recovery and Reinvestment Act and to see an abbreviated list of the funds available.