2017 CPEO Brownfields List Archive

From: "Larry Schnapf" <larry@schnapflaw.com>
Date: Fri, 3 Mar 2017 12:50:37 -0800 (PST)
Reply: cpeo-brownfields
Subject: [CPEO-BIF] FW: Schnapf suggestions sent to Administrator Pruitt
 

 

Miles,

 

Actually, I think your suggestion works nicely with my idea. The grants should be limited to sites where tax credits don’t incentivize economic development. Good clarification! Thanks for the insight….  

 

Lawrence Schnapf

Schnapf LLC (small)

55 East 87th Street #8B
New York, New York 10128
212-876-3189 (p)
917-576-3667(c)
Larry@SchnapfLaw.com
www.SchnapfLaw.com

 

2016-17 Chair-NYSBA Environmental Law Section

AV Preeminent Rating from Martindale-Hubbell
Listed in 2010-16 New York Super Lawyers-Metro Edition
Listed in 2011-16 Super Lawyers-Business Edition
Listed in The International Who's Who of Environmental Lawyers 2008-16
Chambers USA 2009-10 Client Guide of America's Leading Lawyers for Business.

EIBT_logo_500.jpg

 

From: Miles Ballogg [mailto:Miles.Ballogg@cardno.com]
Sent: Friday, March 3, 2017 11:15 AM
To: Larry Schnapf <larry@schnapflaw.com>; 'Lenny Siegel' <lsiegel@cpeo.org>
Subject: RE: [CPEO-BIF] Schnapf suggestions sent to Administrator Pruitt

 

Larry/Lenny – as a Brownfields Practitioner for over 20 years  - Item 11 is troubling to me. I am in favor of the increase of Tax and  other Brownfields Incentives that will assist in leveraging the market driven brownfields projects for the private sector . However, as a person that ran a successful Community Driven Brownfields Program in Clearwater, Florida and has  also assisted over 200 public and private entities through the use of Brownfields  Grant funds,  I do not agree with moving away from Grant Programs that I believe have been highly successful.

 

Many of the projects  that I have worked on in underserved communities would not have happened without EPA grant funding . Many projects were not viable  from a traditional private  sector Market approach and would not be the type of projects that would inspire investment form the private sector.

 

I also do not think we need to offer up the EPA Grant Programs to encourage additional Brownfields tax and  other incentives that are also integral to  the development of market driven sites that result in a tremendous amount of private sector investment.

 

Perhaps that is not what item 11 is saying , but in my read, and with the current administration, I do not agree that we should sacrifice or move away from the EPA Brownfields Grant Programs.

 

This of course is just one person’s opinion. I am in favor of reinstating the Federal Brownfields Tax Incentive as referenced as well.

 

I also am offing to give of you a tour of projects in Florida that would have likely not have happened without the  EPA Grants.  I also stand ready to help with any move to promote the Brownfields Tax  or other Incentives.   

 

 

 

This is for your use only .

 

Miles Ballogg
PRACTICE GROUP LEADER | DIRECTOR - BROWNFIELDS & ECONOMIC DEVELOPMENT
CARDNO

Direct +1 727 431 1555  Mobile +1 727 423 1587  Fax +1 727 431 1777
Address 380 Park Place Blvd., Suite 300, Clearwater, Florida 33759
Email miles.ballogg@cardno.com  Web www.cardno.com

This email and its attachments may contain confidential and/or privileged information for the sole use of the intended recipient(s). All electronically supplied data must be checked against an applicable hardcopy version which shall be the only document which Cardno warrants accuracy. If you are not the intended recipient, any use, distribution or copying of the information contained in this email and its attachments is strictly prohibited. If you have received this email in error, please email the sender by replying to this message and immediately delete and destroy any copies of this email and any attachments. The views or opinions expressed are the author's own and may not reflect the views or opinions of Cardno.

 

 

From: Brownfields [mailto:brownfields-bounces@lists.cpeo.org] On Behalf Of Larry Schnapf
Sent: Thursday, March 02, 2017 7:06 PM
To: 'Brownfields Internet Forum' <brownfields@lists.cpeo.org>; 'Lenny Siegel' <lsiegel@cpeo.org>
Subject: [CPEO-BIF] Schnapf suggestions sent to Administrator Pruitt

 

Lenny asked that I share with the list serve the remedial reform proposals that I submitted to the new Administrator and to key congressional committees.

 

I believe these suggestions could advance the Administration’s goals of making regulations more efficient and stimulating economic activity without weakening environmental protections. My recommendation about employing cost recovery for brownfield grants is intended to make that program more sustainable as well as advance the President’s goal of imposing “consequences” on companies that abandon plants to export jobs to foreign countries. I hope that these proposals can help the Administration recognize that brownfield and superfund programs are tools to advance its economic goals and not obstacles to dismantle.

 

Some of these recommendations may be too much “inside baseball” for the subscribers and are not necessarily in order of importance.

 

1.     CERCLA Continuing Obligations Guidance- The 2002 amendments to CERCLA added the Bona Fide Prospective Purchaser (BFPP) and Contiguous Property Owner defenses. These defenses (in particular the BFPP defense) were enacted to help incentivize purchasers to acquire and remediate contaminated properties so they can be put back into productive use. While EPA promulgated an all appropriate inquiries (AAI) rule to help define the pre-acquisition obligations necessary to be able to assert these defenses, there is little guidance from EPA on how property owners or operators may satisfy their “appropriate care” or “continuing obligations” so they can maintain their liability protection after taking title or possession of property. The 2003 “Common Elements Guidance” is inadequate. The lack of guidance and recent caselaw have created uncertainty for developers and undermined the value of these defenses. EPA should issue detailed guidance on what constitutes appropriate care. Developers and property owners should not have to rely on ASTM to provide guidance on how to comply with their legal obligations.

 

2.     Revise “Enforcement Discretion Guidance Regarding the Affiliation Language of CERCLA's Bona Fide Prospective Purchaser and Contiguous Property Owner Liability Protections” – This memo did not sufficiently address concerns raised by the Ashley decision that purchasers of contaminated property could lose their eligibility for the BFPP by agreeing to indemnify sellers.

 

3.     More Robust Use of PPAs and CPO “Assurance Letters”- With the passage of the 2002 CERCLA amendments, EPA announced in guidance that it would issue PPAs or CPO assurance letters only in rare instances because the landowner liability protections were self-implementing. However, these agreements can be incredibly valuable. EPA should urge its regional offices to issue such documents where they can facilitate redevelopment such as in urban superfund sites (e.g., Gowanus Canal, Newtown Creek) and where municipal governments are willing to foreclose on contaminated properties and then convey title to redevelopers. The PPAs should include “appropriate steps” language so purchasers can know how they will be able to maintain their liability protections.

 

4.     Clarify Scope of Municipal Liability Protections Under CERCLA to Encourage Taking Title of Vacant Properties and Facilitate Reuse- There is considerable uncertainty among local government community if municipalities can invoke the protections of 42 U.S.C. 9601(20)(D) and (9601(35)(A)(ii) where they take title in lieu of formal tax foreclosure proceeding since this may not be “involuntary”. Local governments might be more willing to take title and assemble vacant properties so they would become more attractive to redevelopment if they could obtain clarity on the scope of this protection. Presumably, a purchaser from a municipality would then be able to assert the BFPP or third party defense. A related problem is that the BFPP defense would not apply to local governments who took title prior to January 11, 2002.

 

5.     Reform EPA Remedial Programs Into a Single Unified Cleanup Program- Our nation’s remedial programs were created as we became aware of new concerns. This has resulted in different cleanup standards and procedures. We have separate staffs for CERCLA, RCRA, TSCA (PCBs), USTs, etc. We now have three decades of experience remediating sites. I think we should strongly consider combining these discrete offices into one streamlined remedial office that will provide consistent regulatory approach and reduce unnecessary staff.

 

6.     Clarify Lender Obligations Following Foreclosure- The original EPA lender liability rule contained a “bright-line” test for lenders to follow so they can be deemed to have taken commercially reasonable steps to sell property following foreclosure, thereby staying within the safe harbor created by the secured creditor exemption. Unfortunately, when the rule was vacated and the 1996 lender liability amendments were added to CERCLA, the “bright line” test was omitted. So lenders have no guidance on how to proceed during what is the worst economic downturn since the Great Depression. Can they reject an offer that is equal to artificially depressed price? How long can they hold onto property without losing protection? Some states allow for two years while others allow up to five years to sell the property.  Greater clarity will help lenders move these properties. If control of Congress changes, this can be legislative proposal.

 

7.     Encourage States to Adopt Licensed Professional Programs- States are facing severe staffing constraints which are creating backlogs in site remediation. Seems to me EPA could use its authority under section 128 of CERCLA (approval of state response programs) as well as its RCRA delegation authority to have states adopt licensed site professional programs like MA, NJ and CT so that states could devote their limited resources to the sites that pose the greatest risk to human health and the environment. EPA could establish a national licensing program for consultants that sets forth minimum professional requirements and states could adopt these programs as part of their remedial programs. One way to accomplish this could be by amending the All Appropriate Inquiries (AAI) Rule to revise the definition of Environmental Professional. This could avoid having to promulgate a new regulation. If control of Congress changes, this can be legislative proposal.

 

8.     Revise NCP- revising the NCP. It was last revised in 1990. Since then we’ve learned a lot about cleanup and have lots of informal guidance to help streamline the process and make it more cost-effective. It does not make sense to continue to follow the RI/FS lockstep process. Why review five alternatives? In NY, we have a proposed remedy and an unrestricted cleanup alternative and are able to generate robust cleanups. If we can incorporate these innovations in the NCP, we will be able to get faster cleanups that are more cost-effective while preserving right of contribution. Right now, firms are incentivized to follow the lock-step approach to preserve their ability to pursue cost recovery..

 

9.     Revise CERCLA Disclosure Requirements With Amnesty Program To Incentivize Accelerated Cleanups- Property owners are not currently required to disclose historic contamination. As a result, many sites remain unremediated until the owner is ready to sell the property while residents may continue to be exposed to unhealthy levels of vapors or unknown groundwater contamination. To help accelerate cleanups, I think EPA could announce it was going to change its disclosure rules from reportable quantity approach to contaminant concentrations and at the same time provide current property owners a one year amnesty period to voluntarily disclose contamination. Much like the EPA audit policy, owners who disclose the existence of contamination that they are not responsible for would be afforded BFPP status. They would have to exercise “appropriate care” but not full cleanup. The SARA Title III program resulted in substantial reductions in pollution. It seems worth the try to experiment with an amnesty period for contaminated sites. 

 

10.  Pursue Cost Recovery From PRPs For Sites Receiving Brownfield Grants - EPA has been awarding brownfield grants to local governments without considering if there is a responsible party that could be incentivized to participate in a cleanup. EPA should conduct PRP searches for all sites that are awarded brownfield grans or loans, and then seek cost recovery from those entities to replenish the brownfield funding program. This will allow the brownfield program to be more sustainable and not be reliant on Congressional appropriations. This approach would ensure that polluters are forced to pay for the contamination they leave behind when they abandon a community and would also impose “consequences” on those firms that closed plants to export jobs to foreign nations.

 

11.  Shift Away from Brownfield Grants/Loans Towards Greater Use of Tax Credits- A recent EPA study found that despite 40 years of remedial programs, the nation still has approximately 300,000 contaminated sites that will take another 25-30 years to cleanup at an estimated cost of $200 billion (not adjusted for inflation). There is simply not enough public money to complete this task. Moreover, the brownfield financial incentives are becoming public works projects that are not nimble enough for private developers. Rather than giving funds to local government to investigate and reuse planning, we can incentivize the private market to do this work by expanding and extending brownfield tax credits. The New York Brownfield tax credit program is a strong example of how tax credits can incentives investments in contaminated properties. Tax credits put the upfront risk on the developer instead of the taxpayers. The IRS code section 198 tax expensing for brownfield sites should also be renewed.

 

12.  Require States To Use Parceling To Encourage RCRA Brownfields- EPA RCRA Brownfield Reforms urged states to allow owners or operators of TSDF to sell off clean parcels of their facilities (e.g., portions never used for any waste management) while the HWMUs or SWMUs were undergoing corrective action. EPA should more forcefully use its delegation authority to allow this much needed reform.

 

13.  Clarify RCRA liability for Generator-only sites- There is much confusion if closure obligations for a generator site run with the land. In other words, a site may have been owner or operated by a defunct generator. A prospective purchaser is interested in redevelopment but is concerned it will become subject to closure obligations for the areas where wastes were managed. Presumably, generator sites could be treated as any brownfield site without the need to undergo formal RCRA closure.

 

14.  Add Landowner Liability Protections to TSCA for PCB Cleanups- Purchasers often take steps to qualify for CERCLA BFPP only to learn after taking title that the property has been impacted with PCBs and they are subject to TSCA cleanup. This might require Congressional action but I do not see any reason why TSCA should not have a BFPP defense. After all, Congress added AAI and BFPP to OPA in 2004 with little controversy.

 

15.  TSCA PCB Reform- The PCB cleanup and disposal rules are a bit RCRA-like, a bit CERCLA-like and not well integrated. The cleanup should also not depend on the original spill concentration but on current concentrations and media. I'd like to see the entire Subpart D to 40 CFR 761 repealed with disposal of PCB-containing material handled entirely within RCRA via the listed-waste and LDR route.

  

16.  Adopt National Environmental “WARN” Obligations Under RCRA- to prevent future brownfields, companies closing operations should be required to notify relevant permitting authority at least 90 days in advance of closing to ensure that appropriate closure occurs so that public money does not have to be used to address cleanup or local government seeks brownfield funds. This would be another way for environmental regulations to serve as a tool to impose “consequences” on companies seeking to export jobs to foreign countries.

 

  1. Adopt Restatement (Third) of Torts Approach to Joint Liability- When CERCLA was enacted, Congress said that liability should be premised on evolving concepts of common law. At the time of its enactment, the Second Restatement was in effect which favored use of joint liability for indivisible harm. However, this was before states began adopting comparative negligence statutes. The Third Restatement states that the law has shifted dramatically from the use of joint liability and that courts should try to find a basis for apportioning liability where there is a reasonable basis. Despite the publication of the Third Restatement in 2000, federal courts continue to cling to the doctrine espoused by the Second Restatement. As recently as last month, an appeals court declined to adopt the suggestion of an amicus brief submitted by The American Tort Reform Association to use the Third Restatement to apportion liability for the Fox River cleanup. My post on this case is at: http://www.environmental-law.net/2012/08/7th-circuit-declines-to-apply-third-restatement-of-torts-in-apportionment-case/ EPA could issue interpretative guidance that it now considers the Third Restatement to be the governing law for CERCLA liability. This would reflect the Congressional intent to follow the evolving common law.  

 

Lawrence Schnapf

Schnapf LLC (small)

55 East 87th Street #8B
New York, New York 10128
212-876-3189 (p)
917-576-3667(c)
Larry@SchnapfLaw.com
www.SchnapfLaw.com

 

2016-17 Chair-NYSBA Environmental Law Section

AV Preeminent Rating from Martindale-Hubbell
Listed in 2010-16 New York Super Lawyers-Metro Edition
Listed in 2011-16 Super Lawyers-Business Edition
Listed in The International Who's Who of Environmental Lawyers 2008-16
Chambers USA 2009-10 Client Guide of America's Leading Lawyers for Business.

EIBT_logo_500.jpg

 

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