U.S. Entities and Persons are Exempt from CTA Reporting Requirements Under New FinCen Interim Rule

On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) adopted an Interim Final Rule (Interim Rule) which exempts U.S. companies previously subject to the reporting requirements under the Corporate Transparency Act (CTA) from obligations to file or update beneficial ownership information (BOI) reports pursuant to the CTA. Foreign entities still have BOI reporting requirements for non-U.S. persons under the Interim Rule.

Notable Changes in Reporting Requirements

Elimination of BOI Reporting for U.S. Entities:

• Domestic companies and U.S. individuals no longer face obligations to report beneficial ownership information to FinCEN.

New Scope for Foreign Entities:

• Only entities formed abroad and registered to conduct business within the U.S. must continue reporting BOI unless specifically exempted.
• Foreign entities now exclusively report beneficial ownership information for non-U.S. persons and associated company applicants. BOI reporting for beneficial owners who are U.S. persons has been completely removed.

Refined Definition of “Reporting Company”

The Interim Rule substantially narrows the definition of “reporting company” to encompass only entities organized under foreign laws that actively register with U.S. state or tribal authorities to do business domestically. Consequently, domestic companies formed under U.S. state or tribal jurisdiction no longer fall within this definition and thus are exempt from reporting.

Clarified BOI Reporting Exemptions for U.S. Persons

Under previous regulations, foreign reporting companies were required to disclose BOI for all beneficial owners, regardless of nationality. The revised rule explicitly excludes U.S. beneficial owners from reporting requirements:

• Foreign reporting companies whose beneficial owners are solely U.S. individuals now have no reporting obligations.
• U.S. individuals no longer need to disclose their beneficial ownership information to any reporting company.

Updated Compliance Deadline

Foreign entities required to report BOI must submit their filings to FinCEN within the later timeframe of:

• Thirty days after officially registering to conduct business in the U.S., or
• Thirty days following publication of the Interim Rule, establishing the current filing deadline as April 25, 2025.

FinCEN has opened a public comment period on the Interim Rule through May 27, 2025, with plans to finalize and implement the rule later this year, incorporating public input received during this period.

We find that many founders and executives do not fully appreciate that raising capital and other transactions often involves the sale or issuance of securities, bringing them under the jurisdiction of the Securities and Exchange Commission (SEC) and requiring specific filings and compliance measures. It is important for businesses to understand when they fall under SEC jurisdiction and the options they have for SEC compliance.

What is a “Security?”

A primary role of the SEC is to screen security offerings for inaccurate claims and prevent “bad actor” promoters of securities from engaging in fraudulent schemes. Thus, in the most basic terms, if a company issues, sells or trades a “security,” it will be subject to SEC regulation. Whether a particular financial instrument is a “security” is very clear in the case of stocks or bonds issued by a company to many passive investors, but the analysis is trickier in other cases.

The long-used test to determine whether the instrument being sold is a security comes from the 1946 U.S. Supreme Court case SEC v. W.J. Howey Co and is referred to as the Howey Test. For something to be deemed a security, it must involve:

1. An Investment of Money: The investor provides capital (money, assets, or other value).
2. In a Common Enterprise: The investor’s funds are pooled with others or tied to the success of the promoter’s efforts.
3. With an Expectation of Profits: The investor anticipates a financial return.
4. Solely from the Efforts of Others: The profits are derived primarily from the managerial or entrepreneurial efforts of a third party (not the investor).

If any one of these four Howey prongs is not met, the instrument in question would not be deemed a security. Certain arrangements may fail the Howey Test and thus fall outside SEC regulation. As an example, if an LLC is selling its equity to a new partner, and the partner will take on an officer or similar managerial role in the company, that LLC equity is not a security in this case and typically would not require SEC filings because the investor will have an active role in the business. Conversely, if the LLC offered equity to passive investors with no managerial control over the business, then those equity interests would be deemed securities under the Howey Test. If there is any ambiguity about whether a certain right or interest issued by a company is a security under the Howey Test, it is best to consult with an attorney experienced in securities law.

The Way to Avoid “Registration: Regulation D

Even if an instrument is deemed a security, that does not necessarily mean that security needs to be “registered” with the SEC. “Registration” describes the process of filing information about the security and issuer with the SEC for approval and public viewing. This is generally perceived to be an onerous and expensive process, especially for a startup, and something to avoid if at all possible.  A “registered security” usually is a corporation’s stock that has been qualified to be publicly traded on exchanges such as the NYSE or Nasdaq, but any capital-raising campaign or transaction that hasn’t been designed to fall within an exemption from registration will need to be registered.

Fortunately, for the types of private offerings most considered by small to medium-sized private companies, the sale of securities will be exempt from registration, because of an SEC regulation called “Regulation D.” Regulation D, usually referred to as “Reg D” refers to a set of SEC rules which allows companies to issue securities privately with much fewer disclosure requirements than registered securities (see 17 C.F.R. § 230.500 et seq). The avenues to such relief are discussed in greater detail below.

Key Terms Under Reg D

In exchange for Reg D’s reduced disclosure obligations, issuers must adhere to restrictions, such as selling to a defined pool of investors and, in some cases, limiting how they solicit investors. Two terms of art are especially important to understand. The following is a high-level summary of the importance of these restrictions:

• The default rule under Regulation D is that the investors in a Reg D securities offering must be Accredited Investors.
• A company can only employ General Solicitation in certain tightly constrained situations.

Accredited Investors

An “accredited investor” is a person or entity that meets certain SEC requirements which demonstrate the investor’s financial sophistication. In turn, an issuer has fewer and more lenient requirements when issuing securities to accredited investors. The rationale of this classification of investor is that limiting an offering to only or mostly accredited investors is a way for the offering to be regulated by its own exclusiveness without extensive SEC disclosures and requirements. Given their qualifying criteria, accredited investors are more likely to be savvy and knowledgeable when evaluating investments. They also meet certain minimum financial requirements, meaning that a loss will generally impact them less than a non-accredited investor.

While there are multiple ways to qualify as an accredited investor, the primary way individuals qualify is through their income or net worth. Specifically, an individual is an accredited investor if he or she: (i) has an income of $200,000 individually or $300,000 with a spouse for the last two years and is expected to earn the same in the current year; or (ii) has a net worth of at least $1,000,000, individually or with a spouse, excluding a primary residence. Other ways to qualify as an accredited investor include certain qualifications for individuals (e.g. having certain professional certifications such as a Series 7 license, being an executive officer or director of the issuer, etc.) and entities (e.g. broker-dealers, banks, registered investment companies, employee benefit plans, etc.)

General Solicitation

“General Solicitation” refers to an issuer publicly advertising or offering securities to a broad audience. Where general solicitation is prohibited (such as Rule 506(b) offerings), the issuer must take care not to advertise its offering to the general public or a general audience. Instead, it must target potential investors with whom the issuer has pre-existing relationships. Although “general solicitation” is not exhaustively defined in Regulation D, SEC guidance and precedent suggests it includes broad-reaching actions like public seminars, mass emails, and online advertising aimed at attracting investors.

Reg D’s Most Commonly Used Exemptions    

Although there are some additional, rarer exemptions issuers can utilize under the SEC rules, the most common Reg D exemptions are Rules 506(b), 506(c), and 504. Each of these three exemptions have various trade-offs, each of which may suit one issuer or offering over another. It is especially important to consult a securities attorney before trying to commence an offering under these rules, because often it isn’t clear which rule, if any, will apply and how one should conduct the offering.

The table below summarizes the key characteristics of each offering, followed by a description of a few notable trade-offs for each offering:

• Rule 506(b) is the most commonly used exemption under Reg D. Even though it permits sales to non-accredited investors, many issuers choose to only sell to accredited investors to avoid extra disclosure requirements. Rule 506(b) minimizes state-level compliance and allows the issuer to rely on reasonable belief (often via investor self-certification) of accredited investor status. The downside to Rule 506(b) offerings is that general solicitation is prohibited. Issuers who rely on general solicitation or may be prone to inadvertently engage in general solicitation should weigh this restriction against the more lenient requirements of Rule 506(b).

• Rule 506(c) requires more diligence on the part of the issuer to vet accredited investors. Issuers must take reasonable steps to verify accredited investor status, which may include requesting tax returns, bank statements, or third-party confirmation. In exchange for this additional verification, the issuer may engage in general solicitation. For issuers who need general solicitation to make sales, Rule 506(c) may be a better option than Rule 506(b).

• Under Rule 504, issuers do not need to limit the offering to accredited investors, and unlike Rule 506(b) offerings, they do not need to provide additional disclosures to non-accredited investors. There is a $10 million limit on the offering size within a 12-month period, so Rule 504 is only suitable for companies who are looking to raise small to moderate amounts of capital. The major downside to Rule 504 is the lack of full state-level preemption. Issuers using Rule 504 will need to find other rules to exempt them from state regulation or otherwise register the securities with each state where sales and offerings are made. Rule 504 is most beneficial to issuers who want to sell to non-accredited investors in a limited number of states.

Form ID, Form D and Blue Sky Filings

Federal Filings

Once an issuer decides which rule to use for its offering and launches its offering, it is required to file a Form D with the SEC. Prior to filing the Form D, however, it needs to first register with the SEC’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) by filing its Form ID. The Form ID contains some basic information about the issuer and must be notarized by a principal of the issuer. After the issuer files its Form ID, EDGAR will issue it a set of unique codes to log into the EDGAR Filer Management Dashboard.

From here, the issuer can file its Form D for its offering. The Form D can be filed before the first sale of the offering takes place, but no later than 15 days after the first sale. Form D requires the issuer to disclose certain limited information about the issuer and offering, which will be available for public viewing through EDGAR. Most notably, among other information, the issuer must disclose any “related persons” of the issuer (namely directors and executive officers), the issuer’s industry type, the type of security being offered, the date of the first sale of securities under the offering, the number of investors to date, the minimum investment amount and maximum size of the offering, and broker-dealer information and commissions or management fees, if any. Compared to public offerings or other types of offerings (such as Regulation A offerings), this information is minimal and largely keeps the details of the offering private.

Blue Sky Filings and State-Level Preemption

In addition to the SEC’s federal-level regulation, each state also has its own securities laws and compliance procedures, also called “blue sky laws,” which need to be considered for any offering. A major advantage of Rules 506(b) and (c) is that the federal SEC exemptions preempt any state law requirements, provided that the issuer fully complies with such federal exemption requirements. For Rule 506(b) and (c) offerings, the issuer merely needs to submit a notice of the offering to the respective state regulator along with a filing fee, which varies by state. States require these filings to be made within 15 days of the first sale in the respective state. These filings and fee payments can be made in every state electronically via the North American Securities Administrators Association (NASAA) Electronic Filing Depository (https://nasaaefd.org). If the offering has more than one closing, these blue sky filings will be made on a rolling basis as securities are sold in new states for the first time. As mentioned earlier, Rule 504 offerings do not enjoy full preemption from blue sky laws. Thus, issuers using Rule 504 will need to research the rules of each individual state they plan to sell in and comply accordingly.

GreeneHurlocker is happy to assist companies of varying sizes and needs structure their private placement offerings under Reg D and comply with federal and state securities requirements. Please contact us with any questions regarding which type of offering is right for your business.

More Companies Move Away from Delaware in Search of Friendlier Corporate Environments

For decades, Delaware reigned supreme as America’s corporate capital, with its business-friendly laws and specialized Chancery Court system making it the go-to choice for company incorporation. However, this long-held status quo is being challenged by recent high-profile corporate departures to states like Nevada, Texas and Wyoming. Delaware is scrambling to maintain its edge with new legislation, but businesses are discovering compelling alternatives that may better suit their needs in today’s evolving corporate landscape.

Major Corporations Vote with Their Feet

The corporate world took notice when industry giants like Tesla, SpaceX, TripAdvisor, and Dropbox chose to relocate their incorporations to other states. Tesla and SpaceX moved their incorporations to Texas in 2021, citing the state’s lower costs, lighter regulatory burden, and more favorable tax environment. TripAdvisor left Delaware for Nevada in 2023, as did Dropbox in 2025, reportedly drawn by Nevada’s stronger liability protections and more management-friendly corporate laws. With Meta (formerly Facebook) also considering a move away from Delaware, it’s clear that the state’s traditional advantages may no longer be enough to maintain its corporate dominance.

Delaware Court Rulings Spark Corporate Concerns

These departures have been fueled in part by recent rulings from Delaware’s Chancery Court that have unsettled some companies’ belief in the business-friendly environment. In the 2022 case of In re MultiPlan Corp. Stockholders Litigation, the court allowed a shareholder lawsuit to proceed against a special purpose acquisition company’s (SPAC) sponsor, going against the prevailing view that SPACs provided substantial protections against such litigation. And in the 2020 case of Salzberg v. Sciabacucchi, the court invalidated a company’s federal forum provision (later overturned by the Delaware Supreme Court), leading to worries about companies’ ability to manage securities litigation through charter and bylaw provisions.

These rulings, combined with the high-profile departures, represent a broader shift in how companies evaluate their incorporation options, with factors like operating costs, regulatory landscapes, liability exposure, and governance flexibility coming into play alongside Delaware’s historical strengths. The state’s response, in the form of new proposed legislation aimed at better protecting founder-controlled companies from shareholder litigation, highlights both its determination to retain pole position and its recognition that times are changing.

Other State Options and What They Offer

Several states have emerged as particularly attractive alternatives to Delaware. Nevada offers enhanced privacy protections for corporate ownership information, reduced litigation risk thanks to corporate laws that provide stronger protection against shareholder lawsuits, lower filing fees and maintenance costs compared to Delaware, and simplified compliance requirements that reduce administrative burden. Wyoming boasts the advantages of no state corporate income tax, franchise tax, or personal income tax, robust asset protection laws that can shield personal assets from business liabilities, and minimal annual reporting requirements.

Even our home state of Virginia remains a business friendly alternative to Delaware. Virginia allows a wide range of corporate structures, including benefit corporations, series LLC’s and blockchain-based LLCs, providing options for businesses with varying needs and goals. It also has lower fees than Delaware. To the extent a more balanced approach to shareholder protection is attractive, Virginia has a number of minority shareholder protections built into its corporate code, including granting appraisal rights to shareholders in a broader range of circumstances than Delaware.

Delaware’s recent legislative proposals reveal its strategy to maintain a competitive edge by shielding founder-controlled companies from certain types of litigation, restricting shareholder access to corporate records to reduce successful litigation, and enhancing provisions to protect board decisions. However, these changes raise important questions about the balance between corporate protection and shareholder rights.

Key Considerations for Corporate Incorporation Decisions

For businesses, this evolving landscape presents important customization options to align with specific priorities. These include cost implications beyond initial filing fees, governance flexibility to match management philosophy and operational needs, and achieving the desired balance between various stakeholder interests. When evaluating incorporation or new domicile options, companies should carefully consider how different states’ requirements align with their operational structure and future plans, which jurisdiction best supports their anticipated growth trajectory, how liability protection and litigation risk approaches match their risk tolerance, and the total cost implications, including filing fees, ongoing compliance, and tax obligations.

Looking ahead, the corporate incorporation landscape is likely to see continued evolution as states compete for business and adapt to changing corporate needs. While Delaware’s new legislation may help it retain some companies, the trend toward greater competition among states appears likely to persist. Expect further legal innovations as states develop novel corporate law approaches, enhanced infrastructure and support services to better serve incorporated entities, and specialized niches as different jurisdictions focus on serving specific business types or industries more effectively. 

For businesses considering incorporation or changing their domicile, this shifting landscape presents both opportunities and challenges. As competition continues to intensify, companies stand to benefit from an increasingly robust menu of incorporation options, each with its own unique advantages and considerations. Ultimately, this transformation marks an important inflection point in American business law and practice – one where more innovative and flexible corporate law frameworks across the country may emerge, to the benefit of businesses of all sizes and types.

Please reach out to us to discuss the best incorporation or domicile options for your new or existing business.

The U.S. Treasury Department recently announced it will not enforce the Corporate Transparency Act (CTA) against domestic entities. This means that—at least for the timebeing—U.S.-based businesses are for all practical purposes relieved of their obligation to report beneficial ownership information to FinCEN by the March 21, 2025 deadline. Meanwhile, courts across the country continue to evaluate constitutional challenges to the law, including a recent decision in Michigan finding the CTA unconstitutional.

Treasury Department Suspends Enforcement for Domestic Entities

On March 2, 2025, the Treasury Department announced the effective suspension of the March 21, 2025 filing deadline for all domestic companies. This policy shift provides immediate relief to businesses that were preparing to comply with the CTA’s reporting requirements.

Treasury officials indicated they are preparing a proposed rulemaking that would narrow the scope of the CTA to apply only to “foreign reporting companies”—entities formed under foreign law that have registered to do business in the United States. 

This administrative pivot comes after months of legal battles across multiple federal courts, with conflicting rulings creating significant uncertainty for businesses nationwide. The proposed narrowing of scope, however, may face its own legal challenges, as it appears inconsistent with the text of the CTA itself, which explicitly covers both domestic and foreign entities.

Michigan Court Finds CTA Unconstitutional

On March 5, 2025, the U.S. District Court for the Western District of Michigan issued a notable ruling in Small Business Association of Michigan v. Yellen, finding that the CTA violates the Fourth Amendment’s protection against unreasonable searches. This is the first time a federal court has invalidated the CTA on Fourth Amendment grounds.

The Michigan court determined that business owners have a legitimate expectation of privacy in their beneficial ownership information. Judge Robert Jonker specifically criticized the CTA for creating what he called an “Orwellian ‘Big Brother'” database designed for law enforcement use and imposing massive compliance costs on small businesses (estimated at $21.7 billion nationally in the first year).

While this ruling technically applies only to the specific plaintiffs in that case, it represents an interesting legal precedent that may influence other courts considering similar challenges.

Moving Forward

The Treasury Department’s announcement provides significant relief from immediate compliance concerns. However, businesses should:

1. Monitor developments, as Treasury’s proposed rule has not yet been finalized
2. Be aware that Treasury still intends to enforce the CTA against foreign reporting companies
3. Maintain ownership records in case compliance becomes necessary later
4. Consult legal counsel if you have complex ownership structures or foreign connections

Our firm will continue to monitor these developments and provide updates as the situation evolves. 

Behind every successful attorney is a unique perspective that shapes their approach to law and client service. In this edition of our “Get to Know” series, we feature Steven Skaist, an associate in GreeneHurlocker’s Richmond office who brings much more to the table than his impressive legal credentials. Steven provides practical, flexible guidance to clients, guided by a deep understanding of their business objectives. He embodies the firm’s innovative and entrepreneurial spirit while maintaining a rich life beyond the office. From orchestrating M&A transactions to leading educational initiatives in his community and cherishing time with his family, Steven shares insights into what drives his passion for law and life.

1. What motivated you to become a lawyer?

The puzzle work. Serving as a trusted advisor, I thrive at the intersection of strategic thinking and practical, detail-oriented problem solving. To me, the key is gaining a deep understanding of the client’s goals. Then, we craft a solution designed to shape a successful transaction or strategic aim. Playing a vital role in thoughtfully putting together the myriad pieces involved – often at moments that are transformational in the life of an organization – is a real motivator.

2. What do you enjoy most about being a lawyer at GreeneHurlocker?

The people, and the innovative spirit that they foster at GreeneHurlocker. The firm is not bound by stuffy, archaic modes. At GreeneHurlocker, I have the ability to practice the art of crafting legal and strategic solutions while building deep, enduring client partnerships. My distinctive emphasis on strategic counsel enables me to transcend traditional legal boundaries, helping shape long-term organizational trajectories and business transactions rather than simply addressing immediate legal needs. This approach allows me to serve as both tactical advisor and strategic partner, working alongside leaders to transform challenges into opportunities for sustainable growth.

3. What career accomplishment are you most proud of?

Following a year of add-on acquisitions for a private equity client, I helped lead the sale in what was our firm’s largest M&A transaction. We began with the acquisition of a platform company. Then we acquired dozens of strategic targets. Along the way, we assisted with general counsel work, helping to iron out the integration processes. Finally, we guided the client in a sell-side transaction amounting to a 12X multiple of EBITDA of what became a significant industry player. Playing a vital role in facilitating the investment strategy from start to finish was really gratifying.  

4. What is something you are proud of in your volunteer work?

I’m really proud of what I’ve been able to do at RTA – Richmond Hebrew Day School. At a major transition point for the organization, I led strategic direction and institutional advancement. This role enabled me to harness every aspect of my strategic and legal expertise, from inspiring transformative vision to uniting diverse stakeholders towards a common purpose. By integrating communication strategy, sophisticated governance work, organizational development, and fundraising strategies, we created a framework for educational excellence on an organization with strong foundations. Not only was I able to draw on my professional capabilities, I was able to play a leading role in advancing the strategy around something near to my heart—education for the benefit of the Jewish people.

5. What is something you enjoy doing outside the office?

Engaging with my kids and family. My family life is central and playing an active role in my children’s development is very important to me. Seeing my kids grow is so rewarding. And they’re cute, to boot.

6. Favorite book?

Lioness: Golda Meir and Nation of Israel, by Francine Klagsbrun. The portrait Klagsbrun is able to paint of those formative years of the State of Israel is so inspiring. I wish I was in the room.

7. Favorite travel destination?

Israel.

The final nationwide injunction blocking enforcement of the Corporate Transparency Act (CTA) has been stayed, paving the way for the federal government to restart its implementation of the law. With the CTA back in effect, reporting companies should be ready to file their BOI reports by March 21, 2025.

In the case of Smith, et al. v. U.S. Department of the Treasury, District Court Judge Jeremy Kernodle explained that, following the Supreme Court’s recent ruling in the Texas Top Cop Shop matter, he would suspend his earlier nationwide injunction while the appeals process continues.

As a result, the federal government now has the green light to enforce the CTA. FinCEN has confirmed its intent to do so, noting that “beneficial ownership information (BOI) reporting obligations are once again in effect.”

FinCEN announced an extension of reporting deadlines following the ruling. For most reporting entities, the new deadline to submit an initial, updated, or corrected BOI report is now March 21, 2025. Entities formed or registered on or after February 18, 2025, must file within 30 days after formation or registration. And entities that were originally assigned a later deadline—for example, those benefiting from certain disaster relief extensions resulting in an April 2025 deadline—should continue to adhere to that later date.

FinCEN also communicated that further adjustments to reporting deadlines and requirements may be on the horizon. During the current 30-day extension period, the agency will “assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.” Moreover, FinCEN intends to launch a review process later this year to revise the BOI reporting rule in order to lessen the burden on lower-risk entities, including many small U.S. businesses. 

While March 21st is a deadline reporting companies should work against, litigation continues across the country, and legislation that would amend, or outright eliminate, the CTA has been introduced in both the U.S. House and Senate. Given the track record on CTA implementation, don’t be surprised if there are more twists and turns ahead.

In a recent column by Ivy Main in the Virginia Mercury, she discusses the economics of clean energy: “New renewable energy is cheaper than new fossil fuel generation. That’s why in 2024, 94% of all new power capacity in the U.S. came from solar, batteries and wind energy. Fossil gas made up just 4% of new generating capacity.”

But, as Main also points out, and as detailed in a comprehensive report from Knowable Magazine, republished by Yale Climate Connection, the ongoing transition to renewables faces a difficult challenge: the inherent variability of wind and solar power. The Germans have coined a term for periods when renewable energy production plummets—”Dunkelflauten,” or “dark doldrums.” These stretches of minimal solar and wind production can impact grid reliability.

This variability makes energy storage one of the most crucial challenges in the transition to renewable energy. Unlike traditional power plants that can be ramped up or down based on demand, solar panels and wind turbines generate electricity only when the sun shines or the wind blows. To maintain a reliable grid powered primarily by renewables, we need ways to capture and store excess energy during peak production times for use during these “dark doldrums.”

The current go-to solution, lithium-ion batteries, are effective at daily energy cycling but aren’t optimal for longer-duration storage. According to University of Chicago materials scientist Shirley Meng, quoted in the Knowable Magazine piece, these batteries cost over $100 per kilowatt-hour—making them prohibitively expensive for long-term storage.

Emerging Solutions

However, engineers and researchers are developing innovative alternatives. The Knowable Magazine report highlights several promising technologies:

• Sodium-ion batteries that replace expensive lithium with more abundant sodium
• “Iron-air” batteries developed by Form Energy, which use simple rust chemistry for energy storage
• Flywheel systems that store energy through mechanical rotation
• Compressed air storage systems, like those being developed by Hydrostor
• Hydrogen production and storage for managing longer Dunkelflauten periods

Virginia’s Dual Challenge

For Virginia, these storage questions intersect with two major trends we’ve been covering—and grappling with in our work for clients—a lot over the last few years: the Commonwealth’s renewable energy mandates and its expanding data center industry. The Virginia Clean Economy Act requires the state’s largest utilities to be 100% carbon-free by 2045, while data centers continue to demand more reliable, uninterrupted power.

Virginia counties are increasingly grappling with how to regulate energy storage through zoning ordinances. Surry County is currently considering amendments to allow battery storage systems by conditional use permit in agricultural-rural and industrial zones. Amherst County is working on similar regulations for potential battery storage at its Zane Snead Industrial Park. Other localities like Hanover County have already adopted comprehensive battery storage policies. This county-level activity reflects both the growing demand for storage capacity and the need for careful local oversight of these facilities.

The Cost Equation

While technological solutions are emerging, a critical question remains: who pays for all this storage capacity? According to energy expert Gabe Murtaugh, director of markets and technology at the Long Duration Energy Storage Council, the cost implications of decarbonization aren’t getting enough attention. Without careful planning and intervention, some regions could see dramatic increases in utility bills.

However, different markets are finding creative ways to make storage economically viable. In Texas, where electricity prices fluctuate based on market conditions, consumers are already benefiting from battery storage installations. The Knowable Magazine report notes that Texas electricity customers are saving hundreds of millions of dollars through a system where batteries store energy when it’s cheap and sell it when demand – and prices – are high.

Other regions are using policy tools to make storage more economically feasible. In Switzerland and other European countries, utilities face carbon taxes of up to $130 per metric ton of emissions, creating financial incentives for storage solutions. California has taken a different approach, requiring utility companies to ensure adequate energy coverage while helping to cover storage costs.

These various approaches offer important lessons for Virginia as it develops its own storage strategy. The key will be finding the right mix of market incentives, regulatory requirements, and possible public support to make storage both technically and economically viable.

The Path Forward

The transition to renewable energy will require a sophisticated mix of storage solutions and smart grid management. As Virginia’s energy landscape evolves, policymakers must consider not just renewable energy installation, but also the crucial infrastructure needed to store and manage that power effectively.

As Meng notes in the Knowable Magazine piece, the electrical grid is “probably the most complicated machine ever being built.” Virginia’s challenge will be ensuring this machine can reliably power its future while meeting its clean energy goals.

Renewable Energy Update: Key Trends and Developments

Here are several recent and ground-breaking developments in the renewable energy industry in Virginia, across the nation, and around the globe. 

GreeneHurlocker Supports Development of World’s First Commercial Fusion Power Plant

Commonwealth Fusion Systems (CFS), the world’s largest private nuclear fusion company, has selected Chesterfield County, Virginia, as the site for the world’s first grid-scale fusion power plant. CFS expects to generate approximately 400 megawatts of electricity, enough to power 150,000 homes, and begin delivering to the grid in the early 2030s. GreeneHurlocker is proud to provide regulatory, land use, and transactional legal counsel to CFS for this transformative project, which is projected to bring major economic benefits to the Richmond region. 

Virginia “State Preemption” Bills Pared Back in Face of County Opposition

So far, this session of the Virginia General Assembly is seeing greater success in pro-utility scale solar bills making their way through the committee process toward potential floor votes.  However, maybe predictably, the ambitious approach of the most significant proposals has been scaled back. Two bills, House Bill (HB) 2126 and Senate Bill (SB) 1190, as originally introduced, embodied the Virginia Commission on Electric Utility Regulation (CEUR)’s goal to give the state more control over large-scale solar projects. Opposition by the Virginia Association of Counties led to a “watering down” of the legislation to leave local governments still in ultimate control of their solar project decision-making. Although, a new apparatus would be created to monitor how the counties are doing, shouldering their share of the clean energy transition and advising counties on project decisions if asked. Among other changes, gone is the section essentially mandating a model solar ordinance. Even with the changes, it is unclear whether Governor Glenn Youngkin will sign such a bill—and the legislation is still far from being on his table.

Texas Dominates Renewable Energy Generation and Capacity 

New data from Cleanview and the US Energy Information Administration shows that Texas has emerged as the leading state for renewable energy generation and development. Over the past five years, Texas has increased the state’s solar capacity by 800%, wind capacity by 50%, and battery storage capacity by 5,500%. Those impressive numbers have led to the state starting 2025 with 42,000 MW of wind power, 22,000 MW of solar farms, and 6,500 MW of utility-scale battery capacity. 

Taxpayers Expect to See 4x Return on Investment from the IRA

According to a December American Clean Power Association report, American taxpayers can expect $2.7 trillion in economic benefits from the Inflation Reduction Act over the next decade. This would be a four-fold return on the IRA’s $656 billion cost. The report outlines how the $740 billion in tax credits are expected to unlock trillions for investment and spending in the power, building, and transportation industries, generating an average of 1.2 million jobs per year and a total increase of $846 billion in Americans’ disposable income from energy cost savings.  

Renewables Produced 24% of US Electricity in First 10 Months of 2024

Two year-end reports from US regulatory agencies revealed that renewables now account for 30% of the country’s utility-scale generating capacity, which is expected to grow to 37% by 2027. In the first 10 months of 2024, almost a quarter of US electricity generation came from renewables. Notably, solar also became the fourth largest source of electrical generating capacity, surpassing nuclear and hydropower last year.  

These recent developments and data underscore the dynamic nature of the renewable energy industry. From revolutionary power sources to regulatory changes and market trends, the landscape is evolving rapidly, offering both challenges and opportunities for stakeholders in the renewable energy space. If you have any questions or require assistance navigating these developments, please contact our renewable energy law specialists.

The Corporate Transparency Act (CTA) has been subject to a series of complex and seemingly contradictory legal developments that continue to unfold. While the situation remains fluid, this update aims to provide clarity on the current (at least as of January 24, 2025) state of CTA enforcement and business obligations.

On January 23, 2025, the Supreme Court intervened in the ongoing CTA litigation by granting the federal government’s request to stay a nationwide injunction in Texas Top Cop Shop, Inc. v. McHenry. This Supreme Court action would have cleared the way for the Financial Crimes Enforcement Network (FinCEN) to begin enforcing beneficial ownership reporting requirements. In fact, many media stories and legal analyses of the decision suggested that companies’ CTA compliance obligations were in effect given the Court’s ruling.

However, on January 24, FinCEN issued an announcement clarifying that businesses still have no obligation to file beneficial ownership reports. This is because a separate nationwide injunction, issued in Smith v. U.S. Department of the Treasury, remains in effect. FinCEN explicitly confirmed that:

• Reporting companies are not currently required to file beneficial ownership information
• No penalties or liability will apply for non-filing while the Smith order remains in force
• Companies may voluntarily submit reports if they choose to do so

Looking ahead, the Fifth Circuit is scheduled to hear arguments on constitutional challenges to the CTA on March 25, 2025. In the meantime, while the Smith injunction is in effect, it appears that FinCEN’s position is that it cannot require mandatory beneficial ownership reporting.

GreeneHurlocker is pleased to announce that two of its attorneys were recently honored in the 25th edition of the Virginia Business “Legal Elite.” 

Brian Greene, who helps a wide array of energy clients in the Mid-Atlantic navigate regulatory proceedings and complex operational and compliance issues, was recognized in the “Administrative Government Legislative” category. 

Ann Neil Cosby, who focuses her practice on land use and zoning for commercial development projects, including the growing market of data center, digital infrastructure, and renewable energy industries, was acknowledged in the “Real Estate and Land Use” category.

Since 2000, to compile its annual “Legal Elite” list, Virginia Business has asked thousands of attorneys across the state to identify outstanding peers in 22 categories during a designated voting period. The 2025 “Legal Elite” list showcases 1,572 Virginia lawyers or 32.4% of the 4,845 attorneys nominated by their peers during this year’s balloting process.  

Congratulations to Brian and Ann Neil on this well-deserved recognition!