May 6, 2013
On April 16, the United States Environmental Protection Agency (“EPA”) took a significant step towards finalizing its long-pending guidance on the evaluation and response to vapor intrusion from contaminated soil and groundwater, releasing an updated draft of the guidance for public comment. The guidance, which EPA first released in draft form in 2002, is anticipated to have significant impacts for the owners, operators, and potential purchasers of sites contaminated by solvents, petroleum, and other volatile organic compounds (“VOCs”), as well as any parties responsible for such contamination.
What sites are at risk of vapor intrusion?
Vapor intrusion, the migration of hazardous vapor from contaminated soil or groundwater into buildings, is of greatest concern at sites contaminated by VOCs , such as the chlorinated solvents perchloroethylene (“PCE” or “Perc”) and trichloroethylene (“TCE”), as well gasoline constituents. Vapor can enter a building because of cracks in the foundation, openings around pipes or electrical wires, and heating and ventilation systems that decrease indoor air pressure, creating conditions that draw in vapor.
How have environmental regulators addressed vapor intrusion in the past?
In response to new evidence of human health risks and potential explosion hazards from vapor intrusion, EPA released draft vapor intrusion guidance under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and Resource Recovery and Conservation Act (“RCRA”) in 2002. At the time, EPA stated that “as the state-of-the-science improves, this guidance will be revised as appropriate.”
Over the following decade, however, the draft guidance was neither finalized nor revised, and individual states began to fill the regulatory gaps left by EPA. New York’s Department of Environmental Conservation (“DEC”) and Department of Health issued their own vapor intrusion guidance, and DEC began a formal re-evaluation of hundreds of contaminated sites – many of which had already been remediated and delisted – for new vapor risks. In December 2009, EPA’s Inspector General reported that the absence of final EPA guidance had “[impeded] EPA’s efforts to protect human health at sites where vapor intrusion risks may occur,” and urged EPA to finalize its 2002 draft.
What changes did EPA propose in its revised vapor intrusion guidance?
In response to the Inspector General report, last month EPA released a pre-publication draft of its final vapor intrusion guidance for public review and comment. The updated document incorporates a number of revisions from the 2002 draft, including:
- A new, online calculator for determining generic and site-specific screening levels –contaminant concentrations where vapor intrusion is believed to present risk and additional investigation or mitigation is warranted;
- New recommendations for preemptive mitigation and early action at certain sites before a full vapor intrusion analysis is complete;
- New guidance on the use of deed restrictions and other institutional controls to restrict land uses or activities that could otherwise result in unacceptable exposure to the vapor intrusion pathway
- A separate guidance document addressing petroleum vapor intrusion from underground storage tanks, which was not covered in EPA’s 2002 guidance.
Who is likely to be impacted by EPA’s new guidance?
EPA’s guidance is specifically addressed to sites being evaluated pursuant to CERCLA and RCRA, and it is expected to influence the scope of remedial investigations, risk assessments, and remedy selection at such sites. Moreover, because many CERCLA sites where remediation is complete must undergo five-year reviews for remedial effectiveness, consideration of vapor intrusion could reveal new public health risks and trigger additional mitigation requirements.
The guidance will also have impacts extending beyond CERCLA and RCRA. Vapor intrusion is an increasingly common topic in environmental due diligence for real estate transactions, and Phase I Environmental Site Investigations often analyze possible vapor intrusion pathways. EPA’s new screening levels and recommended mitigation measures are likely to inform negotiating positions and risk allocation at sites where vapor intrusion is suspected. Vapor intrusion could also give rise to toxic tort liability, with plaintiffs relying upon EPA guidance and other regulatory standards to establish a violation of the defendant’s standard of care. Finally, because vapor intrusion may impose new costs at previously-remediated sites, the guidance could lead more property owners to pursue “reopener” environmental insurance policies covering expenses incurred after a “No Further Action” or “Construction Complete” letter has been issued by state or federal environmental regulators.
How can I submit comments on EPA’s new guidance?
Comments on EPA’s revised vapor intrusion guidance may be submitted online at http://www.regulations.gov/#!docketDetail;D=EPA-HQ-RCRA-2002-0033 through May 24, 2013.
For more information about EPA’s guidance or other issues relating to vapor intrusion, contact Christine Leas or Jonathan Kalmuss-Katz.
November 13, 2012
New York’s highest court recently upheld lower court decisions requiring the New York City School Construction Authority (“SCA”), as lead agency under the New York State Environmental Quality Review Act (“SEQRA”), to consider in the environmental review process the long-term maintenance and monitoring requirements designed to assure the continued effectiveness of the remediation of hazardous substances.
The remediated site at issue in the case, Bronx Committee for Toxic-Free Schools v. New York City School Construction Authority, was a former railyard in the Mott Haven section of the Bronx, on which SCA built a campus with four public schools that opened in 2010. The remedial measures included several engineering controls, such as vapor barriers under buildings and a hydraulic barrier to prevent contaminated groundwater from re-entering the site. The Environmental Impact Statement (“EIS”) incorporated the Remedial Action Work Plan (“RAWP”), which described the proposed cleanup, but neither document described the plans for long-term maintenance and monitoring. Those measures were later documented in the project’s Site Management Plan, which is required under the New York Brownfield Cleanup Program (“BCP”) to set forth any long-term program designed to ensure that a remediated site continues to be protective of public health and the environment. The lower court directed SCA to prepare a Supplemental EIS to examine those requirements, and the First Department affirmed.
In upholding these decisions, the Court of Appeals acknowledged the “broad discretion” afforded lead agencies in determining “what to include and what to omit” in an EIS, and the level of detail in an EIS, but found that a Supplemental EIS must be prepared because SCA had not disputed that the description of the long-term maintenance and monitoring requirements was “essential to an understanding of the environmental impacts of the Authority’s project” and “too important not to be described in an EIS.” Nor had SCA disputed that the measures were “‘essential’ to protecting the site’s occupants from dangerous contaminants.”
In response to arguments that the details of the maintenance and monitoring program could not reasonably be determined until the cleanup was completed, the Court noted that this was not a case where there was a dispute over whether post-EIS events were significant enough to warrant a supplement. Rather, it found that “[w]here important decisions about mitigation can only be made after the initial remedial measures are complete, a supplemental EIS may be called for, as it is here.” Thus, given SCA’s implicit acknowledgement of the importance of the long-term maintenance and monitoring measures, the EIS had not met SEQRA’s “hard look” standard, which requires that the environmental review identify and assess relevant areas of environmental concern.
Although it may not be possible to detail all of the long-term maintenance and monitoring requirements applicable to a given remediation in an EIS or in an Environmental Assessment Form (“EAF”) (or Environmental Assessment Statement (“EAS”) for New York City’s Environmental Quality Review), the New York State Department of Environmental Conservation’s BCP regulations do require that a description of such measures be included in the RAWP. Thus, in the case of Brownfield sites, it should be possible to include sufficient information to satisfy SEQRA’s “hard look” requirement in an EIS (or an EAF or EAS).
However, this requirement may be more problematic for sites undergoing review under SEQRA at which it is impracticable to conduct investigations necessary to fully characterize a site and identify the necessary long-term maintenance and monitoring measures. For such projects, it will be important to describe such measures to the fullest extent practicable.
For more information on how the Toxic-Free Schools decision may affect your project, please contact Mark Chertok.
October 12, 2012
On October 3, 2012, Governor Cuomo signed into law a nine-month extension of the availability of tax credits under New York State’s Brownfield Cleanup Program (“BCP”). The previous version of the Program required sites in the program to receive their certificate of completion (“COC”) from the Department of Environmental Conservation (“DEC”) by March 31, 2015 in order to qualify for tax credits under the BCP; now, sites may qualify if they receive their COC by December 31, 2015. According to the most recent annual report of DEC’s Division of Environmental Remediation, it takes approximately three years for a brownfield site to move through the BCP. It remains to be seen, however, whether a longer-term extension of the BCP tax credits will be taken up by the Legislature in the upcoming term.
SPR is currently working with numerous clients who are developing brownfield sites through the BCP. For additional information on the BCP, please contact Mark Chertok, Michael Bogin, Christine Leas, or Michael Lesser.
February 14, 2012
On December 31, 2011, one of the biggest federal tax incentives for contaminated site remediation lapsed, leaving in doubt its application to remedial expenses incurred in the current calendar year. If the incentive is not retroactively extended by Congress, then such remedial expenditures would have to be capitalized and deducted over a period of years or decades, as opposed to being fully deducible in the year they are incurred.
The “Brownfield Expensing Tax Incentive” had provided for the accelerated deduction of remedial costs at “qualified contamination sites,” which are: (a) held by the taxpayer for trade, business, or income generation purposes, (b) contaminated by a hazardous substance or petroleum, and (c) neither listed nor proposed for listing on the Superfund National Priorities List. Taxpayers also require a certificate of eligibility from the state environmental agency in which the property at issue is located (in New York, the Department of Environmental Conservation), though New York sites need not be enrolled in the state’s Brownfield Cleanup Program (“BCP”) or Spill Response Program to be certified as eligible.
The incentive previously lapsed due to legislative inaction three times since its 1997 enactment, but following each expiration Congress retroactively extended it during the next calendar year, leaving no gap in the coverage of eligible expenses. It remains to be seen whether the current Congress will do the same.
On a state level, the tax credits available under for New York’s BCP are also in danger of expiring in the absence of a legislative extension. Brownfield Tax Credits are only available for cleanups that receive a Certificate of Completion (“COC”) by March 31, 2015; obtaining a COC often takes three or more years from a site’s admission into the BCP. Pending legislation in the New York State Senate would remove this sunset date, in addition to enacting other BCP amendments.
For more information on tax incentives for Brownfield remediation, contact David Yudelson or Christine Leas.
December 7, 2011
Developers of brownfield sites are required to file an annual report with the Tax Department (DTF-70). The report is first due within one year after the execution of a Brownfield Cleanup Agreement and for 11 years thereafter. The annual reporting period covers all activity occurring on the site from December 1 through November 30. The report is due by December 31 of each year.
For more information about reporting requirements associated with the Brownfield Cleanup Program, contact Jennifer Coghlan.
October 5, 2011
On September 28, 2011, EPA released its Final Human Health Assessment for trichloroethylene (“TCE”). EPA found “convincing evidence” of a causal link between TCE exposure and kidney cancer, and a strong link between TCE exposure and non-Hodgkin’s lymphoma, as well as some evidence of association between TCE exposure and other cancers.
TCE was used extensively as a degreaser and a solvent, and is one of the most prevalent contaminants in the United States. It is found in soil and groundwater at numerous Superfund sites, and its presence has led to the closure of water supply wells around the country, including on Long Island. TCE also can vaporize into the air when it is present in soil or groundwater. In some areas, this has led to the presence of TCE in indoor air of buildings overlying TCE-contamination; so-called “vapor intrusion”.
EPA has indicated that it will take its Health Assessment into account in the following areas:
1. Establishing cleanup methods at Superfund sites where TCE has been identified as a contaminant;
2. Understanding the risk from vapor intrusion as TCE vapors move from contaminated groundwater and soil into the indoor air of overlying buildings;
3. Revising EPA’s Maximum Contaminant Level for TCE in drinking water; [and]
4. Developing appropriate regulatory standards limiting the atmospheric emissions of TCE – a hazardous air pollutant under the Clean Air Act.
It remains to be seen whether EPA’s determination will impact the judgments of state regulators, including those in New York. For more information on issues arising at TCE-contaminated sites, contact Christine Leas or David Yudelson.
September 26, 2011
The United States Environmental Protection Agency (“EPA”) recently awarded federal recognition to New York City’s Brownfield Cleanup Program. This is the first time EPA has recognized a municipal cleanup program. EPA hopes to use New York City’s program as an example to be followed by additional municipalities.
EPA’s formal recognition makes the City eligible to use federal brownfield grants for the investigation and cleanup of contaminated properties. City officials also believe that federal support of the City’s brownfield program will expedite the cleanup and redevelopment of vacant and underutilized properties while creating new businesses, jobs, and affordable housing. Federal recognition augments the formal acceptance of the City’s Brownfield Cleanup Program by the New York State Department of Environmental Conseration (“DEC”).
Significant elements of the New York City Brownfield Cleanup Program, discussed here, include:
- The issuance of a Notice of Completion for cleaned-up properties, which includes a liability release from the City;
- a statement from New York State that DEC has no further interest and does not plan to take enforcement measures or require remedial action for the property under state or federal law; and
- the issuance of a Green Property Certification from the City indicating that the property is protective of public health and the environment.
Federal and state approval of N.Y.C.’s Brownfield Cleanup Program, in combination with the City’s ability to access federal brownfield funding, should strengthen the City’s program.
For more information about the N.Y.C. Brownfield Cleanup Program, please contact Michael J. Lesser.
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