Local Law 97 has been amended by the City Council numerous times since 2019, so it is important to refer to the law as codified at NYC Administrative Code § 28-320 and § 28-321 for the current text.  To implement Local Law 97, the New York City Department of Buildings (DOB) adopted regulations in January 2023 and January 2024, and has posted guidance online.

Most new and existing buildings over 25,000 square feet must comply with LL97.  For many buildings, this requires meeting annual building-specific GHG emissions limits.  However, certain types of rent-regulated accommodations and houses of worship can instead install energy conservation measures (ECMs) prescribed in LL97.  It is critical that building owners understand which compliance pathway applies to their buildings, as it can affect not only the substantive compliance obligations but also the schedule for compliance and penalty amount.

Covered buildings must submit a compliance report to DOB by May 1 of the year following their first compliance year (for most buildings, 2025 will be the first year to submit a compliance report).  Buildings required to meet GHG emissions limits must submit a compliance report annually, but buildings that can install ECMs only must submit a compliance report once.

Penalties are assessed by DOB after buildings submit their compliance reports.  DOB will issue an administrative summons that describes the violation and the penalty amount.  If this is not paid or corrected, then DOB will refer the violation to the Office of Administrative Trials and Hearings (OATH) for adjudication.  However, if the building owner has demonstrated good faith efforts to meet the emissions limits, DOB may instead offer a mediated resolution.  Good faith compliance efforts are discussed further below.

Buildings that exceed their emissions limits may receive a penalty in an amount equal to the difference between the building emissions limit for such year and the reported building emissions for such year, multiplied by $268 per ton of carbon dioxide equivalent).  Buildings that fail to file a compliance report can also be penalized.  Penalties are assessed annually.

Buildings that fail to install one or more ECMs may receive a penalty of $10,000 total (not per ECM).  The failure to file a compliance report can result in a $10,000 penalty.

Buildings that expect to exceed their GHG emissions limits might be able to apply for an adjustment to their emissions and/or for penalty mitigation.  Building owners considering these options should evaluate the details as soon as possible, given upcoming deadlines and the amount of analysis and documentation required to apply.

LL97 establishes four adjustment options: (1) buildings with energy-intensive uses, (2) buildings that are owned or occupied by non-profit hospitals or healthcare facilities, (3) buildings that would face extreme financial hardship by complying with LL97, and (4) buildings with legal or extreme physical constraints.

DOB regulations identify the following two potential pathways for penalty mitigation for the 2024-2029 compliance period: (1) the occurrence of unexpected or unforeseeable events, and (2) the implementation of narrowly defined good faith compliance efforts.  Applications for penalty mitigation must be submitted with the annual compliance reports.

Yes!  These options all require advanced planning but can assist with LL97 compliance in various ways.  It is important to obtain a legal and technical analysis to understand how these options might affect building emissions and be incorporated into LL97 planning.