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Regulation Watch: What's New, and What Might Be Next

June 19, 2018

Don’t be surprised if the rules of the environmental compliance road have changed since your last project.

The environmental regulation landscape is constantly changing. A new administration, local staff changes, even a new fiscal year can make standard operating procedures anything but standard.  Here we examine three areas of regulatory compliance important to property owners, developers and lenders:  brownfield redevelopment, industrial hygiene and ongoing site investigation and remediation.

Brownfield Redevelopment

Within the omnibus spending bill recently passed by Congress, the grant program supporting brownfield cleanups was reauthorized and funded through 2023 through a component called the BUILD (Brownfields Utilization, Investment and Local Development) Act.

The BUILD Act also outlines the following new tools and opportunities to assist stakeholders:

Larger cleanup grants – the Environmental Protection Agency (EPA) is authorized (although not required) to increase brownfields cleanup grants from $200,000 to $500,000 (with a provision for cleanup grants up to $650,000 in some cases).
More comprehensive grants – the Act creates a new Multipurpose Grant program, allowing inventory, characterization, assessment, planning and remediation activities to be combined in one grant of up to $1 million.
Expanded eligibility – the criteria for an “eligible entity” now includes 501(c)(3)s, allowing these non-profits to apply for brownfield assessment, cleanup, Revolving Loan Fund (RLF) and multipurpose grants.
Greater spending flexibility – grant recipients may now use up to 5 percent of their EPA grants to cover administrative costs.

As part of this process, the EPA is soliciting comments on three provisions of the BUILD Act: the authority to increase pre-site cleanup grant amounts, the new multipurpose grant authority and the new small community assistance grant authority. To help frame the discussion, within the next few weeks the EPA is expected to publish (via the Federal Register) a number of questions related to these provisions. To find out more about the provisions and how to submit comments, visit the EPA’s Brownfields Broadcast website.

While some of its specific implementation policies have yet to be finalized, the BUILD Act appears to signify the EPA’s commitment to “the next generation of brownfields innovation.”

Industrial Hygiene

In the field of industrial hygiene, the bulk of regulations relate to the identification and mitigation of asbestos and lead. Here, regulations remain relatively unchanged. 

While stability makes planning easier, it’s worth noting that within the existing statutes some areas remain open to interpretation. That means that changes in state or local inspection personnel can result in changes in enforcement. While a previous inspector may have been more lenient in some areas, a new inspector might be stricter. 

For example, the current lead ordinance in the city of Detroit is now being more stringently enforced today than when enacted in 2010. The ordinance requires housing properties constructed before 1978 to be inspected for lead-based paint with follow-up assessments every three years if lead-based paint is found. Recently, many landlords have been surprised by citations for failing to schedule a three-year reassessment. 

Beyond asbestos and lead, regulatory standards have changed recently regarding a less well-known but important air quality hazard:  silica.

Crystalline silica is released into the air when workers cut, grind, crush or drill materials containing silica such as mortar, concrete, sand and stone. After challenges from various industry groups, the Occupational Safety and Health Administration (OSHA) issued a new Respirable Crystalline Silica Standard in June of 2016.

The standard decreased the Permissible Exposure Limits (PELs) related to silica to 50 micrograms per cubic meter of air averaged over an eight-hour shift – fifty percent less than the previous limit.

It also defines distinct deadlines for compliance with worker exposure controls and medical examinations depending on industry, with general/maritime industries and construction considered separately. June 23, 2018, is the deadline for all industries to comply with the required methods of sample analysis. To avoid penalties for non-compliance, businesses are required to use qualified laboratories to analyze silica samples, ensuring that those labs meet a number of accreditation, evaluation, instrument calibration, quality control and analysis standards.

To help businesses comply, PM Environmental can provide the onsite testing during work activities and submit samples to a qualified laboratory on behalf of the contractor to determine what exposures are present to workers.

Read more details about the new standard here.

Site Investigation and Remediation

Prior to purchasing a property, a comprehensive due diligence effort is the buyer’s best possible protection against future liability for pre-existing environmental concerns. Once a property is purchased, it is too late to claim innocent landowner protections.

After purchase, it is up to owner/operators to address their due care obligations (also known as continuing obligations). This is especially important because loans for many such “legacy sites” are revisited on a five-year refinance cycle, and lenders require corresponding site re-evaluations as part of that process. 

Among the issues of potential environmental risk to legacy property holders: vapor intrusion and perfluorinated compounds (PFCs).

United States EPA and state environmental guidelines are relied upon to evaluate the risks of vapor intrusion at sites such as former dry cleaning establishments. Recently, the toxicological science that regulators use to establish vapor risk models has changed. As a result, levels of vapor considered acceptable just a decade ago are no longer satisfactory. Today’s standards for posing a potential exposure hazard to people on site and within adjoining properties are far more stringent. 

Consequently, owners of legacy sites with soil, groundwater and indoor air contamination are required to meet the new, tougher standards. If a review indicates that vapor intrusion controls are needed, the cost can be significant.

Who bears the cost for meeting these new standards?

In Michigan, as long as a property owner exercises due diligence prior to purchase and prepares a Baseline Environmental Assessment (BEA), he or she is not obligated for cleanup of pre-existing contaminants. However, owners/operators of contamination regardless of cleanup liability in Michigan are obligated to practice due care to ensure that occupants are not exposed to contamination, including vapor intrusion, sourced from the property.  Clearly, comprehensive due diligence prior to purchase is the best insurance against future liability and allows a purchaser to assess associated costs/risks.

Other states have addressed vapor intrusion risk by establishing dry cleaner trust funds to help offset cleanup costs. While intended to protect property owners, many of these trusts are inadequately funded, and accessing funds can be challenging.

PFCs are the source of both significant scientific debate and growing environmental concern. Used in the manufacture of consumer products like personal care products, fabrics, non-stick cookware, and fast food containers, PFCs have also been common additives in firefighting supplies such as fire extinguishing foams, industrial processes like metal plating, and in piping, fans, and other common building materials.

The EPA as well as state agencies such as the Michigan Department of Environmental Quality (DEQ) see PFCs as an area of emerging risk and have ongoing studies to determine safe minimum levels of exposure. Unlike compounds like petroleum, toxicity thresholds for PFCs are still being reviewed and established.

For a number of PFCs, a level of exposure thought to be acceptable is proving to be much lower than previously thought. In one Michigan example, a concentration exceeding 70 parts per trillion (ppt) of a combination of two particular chemicals in drinking water is now considered unsafe, and even more restrictive standards of 11 ppt and 12 ppt are being used for surface water quality.

At sites such as landfills, airports and plating facilities where concentrations of PFCs are likely, the compounds are infrequently included in standard assessment protocols. PM Environmental is one of a handful of firms working to determine whether or how a reasonable standard for cleanup at such low thresholds could be established.

For now, with many unanswered questions and no shortage of misinformation, PFC regulation is an area to watch.

Perhaps the only sure thing about environmental regulation is change. The right partner can make all the difference in navigating through change. Property owners, developers and lenders choose PM Environmental to help them make sense of the current regulatory landscape, meet due diligence and due care obligations and identify every available incentive for redeveloping blighted or contaminated sites. 

The following PM Environmental specialists contributed to this article:
Brownfields Redevelopment:  Jessica DeBone, John Hargraves
Industrial Hygiene: Jon Balsamo
Site Investigation and Remediation: Adam Patton