On March 20, 2015, the Bureau of Land Management (BLM) issued its final rules for hydraulic fracturing on federal and tribal lands (Final Rules). The Final Rules govern approximately 700 million subsurface acres overseen by the BLM, and they culminate a rulemaking process that began in November 2010. Among other things, they are intended to ensure the integrity of hydraulically fractured wells, protect water quality, and provide the public with information on fracturing fluid constituents. During the rulemaking process, the BLM received more than 1.5 million public comments, with some commenters arguing that new federal rules will duplicate current state regulations and impose unnecessary regulatory burdens, while others argued that the proposed rules did not go far enough. Assistant Secretary for Land and Minerals Management Janice Schneider said the Final Rules “will protect public health and the environment during and after hydraulic fracturing operations at a modest cost while both respecting the work previously done by the industry, the states and the tribes and promoting the adoption of more protective standards across the country.” However, the Final Rules are likely to continue to draw criticism from all sides as they are implemented, and have already been challenged in federal district court.
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What Net Neutrality Will Mean for Cyber-Street
The Federal Communications Commission’s publication of new rules on March 12, 2015 treating internet service providers as common carriers (akin to utility companies) is seen by many to be a meaningful step toward ensuring “net neutrality” or an “open internet.” Others fear the move could significantly hamper internet innovation due to unnecessary and uncertain government regulation. However, it is difficult to predict at this time what effect the FCC’s new rules – or the bill introduced in the House of Representatives on March 4, 2015, intended to roll back the FCC’s decision before the final rules had even been published – will have on everyday life in cyberspace for consumers and business-to-business users.
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Recent Cases Create Hurdles to Corporate Debt Restructuring
SEC Eases Debt Tender Offer Procedures
Two recent cases from the Southern District of New York may undermine the ability of companies with debt subject to the Trust Indenture Act (TIA) to engage in bondholder-approved restructuring of that debt, and create uncertainty as to the issuance of new TIA-qualified debt.
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Three Initiatives Promise to Accelerate Health IT in 2015
Three major legislative and regulatory proposals concerning technology in health care are in the works for 2015, each of them aiming to accelerate the growth of the already burgeoning health IT vertical by facilitating – and protecting – the electronic collection and sharing of health data.
21st Century Cures Initiative
On January 27, 2015, members of the House Energy and Commerce Committee, led by Chairman Fred Upton (R-MI) and Colorado’s own Diana DeGette (D-CO), released a discussion draft of potential bill language aimed at accelerating the discovery, development, and delivery of new medical drugs and devices. Elizabeth Farrar, health counsel for Rep. DeGette, said the bill’s sponsors have set an “aggressive timeline” for consideration of the bill, with a vote on the bill planned for May 2015.
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Colorado Oil and Gas Conservation Commission Adopts Changes to Enforcement and Penalty Rules
On January 5, 2015, the Colorado Oil and Gas Conservation Commission (COGCC) amended Rules 522 and 523 governing enforcement and penalties. These amendments implement House Bill 14-1356, which the legislature adopted last April. Among other things, HB 14-1356 increases the daily maximum penalty per violation from $1,000 to $15,000, requires the COGCC to assess a penalty for each day of violation, and eliminates the previous cap of $10,000 in total penalties for violations not resulting in significant adverse impacts. As explained below, these amendments revise the way in which penalties are calculated and will significantly increase potential penalty amounts in many circumstances.
In addition to amending its enforcement and penalty rules, the COGCC also adopted uncontested amendments to more than 20 other rules. Many of these amendments only clarify existing rules, but some are substantive, including amendments to Rules 317.e (amending casing and cement program requirements), 317.r (adding an anti-collision evaluation requirement for certain offset wellbores), 317.s (adding fracture stimulation setback requirements), 319.a (amending plugging requirements), and 603.e (amending well control equipment requirements). A complete copy of the amended rules can be found online here. All of the amendments are likely to be published in the Colorado Register on January 25, which should make them effective on February 14.
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Recent Trends in SEC Comments Issued to Publicly Traded Restaurant Companies
We are now at the point in the calendar-year reporting cycle when most companies are about to commence Annual Report on Form 10-K and proxy preparation. Comments by the SEC Division of Corporation Finance staff on annual reports for the prior year, and the current year’s proxy statements, have generally become publicly available. This alert discusses frequently-made comments by the SEC to issuers in the restaurant industry.
1. Gift Card and Loyalty Programs
The staff is interested in how companies account for gift card and loyalty programs. A comment on this topic may ask for an explanation to the staff, and disclosure in the notes to the financial statements, of the applicable accounting policy. If a company sells gift cards to wholesalers, it should consider disclosing any associated commissions, discounts, and fees. If a company has a program that gives awards to frequent customers, it should consider describing how the program operates, its accounting policy regarding material assumptions, and how it determines the adequacy of its estimates at each balance sheet date.
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Here We Go Again – Key Legal Issues for Upstream Energy Companies Raised by Recent Declines in Oil Prices
After a period of relative stability, volatility in global oil prices has returned with a vengeance in recent weeks. Slow economic growth in many regions, OPEC inaction, and surging U.S. production have combined to cause a precipitous fall in the price of oil, which continues to hit new multiyear lows. The declines in oil prices have corresponded to similarly rapid decreases in the stock (and in some cases bond) prices of many energy producers. The following is a brief checklist of some of the key legal issues that upstream energy companies may want to consider as a result of the changing commodity price environment.
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High Risk, Questionable Reward
On July 31, 2014, the U.S. Environmental Protection Agency (EPA) published a request for information (RFI) on various changes to the Risk Management Program (RMP) under Section 112(r)(7) of the Clean Air Act, including completely replacing the current RMP rule and its sister regulation, the Process Safety Management (PSM) standard, with a new framework for regulating high-risk industries. The comment period associated with the RFI closed on October 29, 2014. EPA has published over 570 comments submitted by industry members, state and local agencies, public citizens, and non-governmental organizations in response to the RFI. This Client Alert analyzes the bulk of those comments for common themes that illustrate anticipated areas for programmatic revision. It further identifies certain ideological conflicts which must be resolved before any final rule can issue with broad-based support.
RFI Background
In response to Executive Order 13650, entitled “Improving Chemical Facility Safety and Security,” was issued August 1, 2013 in response to several recent major chemical accidents, including the explosion at the West Fertilizer Facility in West, Texas. The Executive Order required numerous federal agencies to form a Chemical Facility Safety and Security Working Group (Working Group) to identify how to reduce the incidence of major chemical incidents at chemical facilities. On May 1, 2014, the Working Group issued its report to the President recommending a number of initiatives, including modernizing the RMP and PSM standards by May 1, 2015. EPA and the Occupational Safety and Health Administration (OSHA) both issued RFIs intended to assist in determining whether and how to modernize the RMP and PSM standards. Following-up on publication of the Working Group’s report and OSHA’s RFI, which signals that OSHA may apply an expanded PSM program to ammonium nitrate, reactive chemicals, and oil and gas drilling, servicing, and production facilities, EPA published its own RFI intended to improve and/or expand its RMP rule.