The Environmental Protection Agency (EPA) held a listening session concerning the Superfund Task Force (“Task Force”) Recommendation 27 on June 5, 2018 focusing on new tools for reusing Superfund sites through private investment. The EPA created the Task Force in May 2017, and it is comprised of senior representatives from various EPA offices associated with Superfund policy and enforcement. The Task Force intends to streamline and strengthen the Superfund program. In July 2017, the Task Force issued a report containing five goals and forty-two recommendations.
The Task Force’s five goals are to: i) expedite the cleanup and remediation process; ii) reinvigorate responsible party cleanup and reuse; iii) encourage private investment; iv) promote development and community revitalization; and v) engage parties and stakeholders. The full report is available here.
Recommendation 27 seeks to implement some or all of the five goals by identifying tools for third parties interested in opportunities that support the cleanup or reuse of priority sites. EPA understands potential investors have concerns about uncertain liabilities, and looks to identify those specific concerns and to identify tools that may address such concerns. For example, the agency may determine standard language to include in agreements that would facilitate financing, and may create public-private partnership investment opportunities and structure.
During the listening session, EPA noted that there are existing tools to clarify liability or potential liability. EPA offers both site specific tools and general enforcement guidance. EPA’s current site-specific tools include comfort and status letters, including letters customized for lenders and other third parties. These letters are available to provide private parties with information that EPA has on a specific property, including EPA’s involvement and cleanup progress at the site. In addition, EPA offers Bona Fide Prospective Purchaser Work Agreements, Prospective Purchaser and Lessee Agreements, and Windfall Lien Resolution Agreements. These agreements allow private parties to take on remediation work under EPA oversight and with protections such as a covenant not to sue or contribution protection.
General enforcement guidance that EPA has issued includes the Revitalization Handbook, Prospective Purchaser Agreements, Common Elements Guidance, Windfall Lien Guidance, and more recently, the Revised Comfort Letter Policy and Models. EPA also offers guidance to financial institutions, such as the 2007 CERCLA Lender Liability Exemption: Updated Questions and Answers. More information on general enforcement guidance is available here and here. EPA’s slide presentation for the listening session is available here.
At the end of the listening session, EPA opened the floor for comments. The sole commenter emphasized that uncertainty is a major concern for private parties. This includes uncertainty for liabilities, overall costs, delays that occur during the process, and other issues. The commenter stressed that funding for these high risk projects generally requires high risk capital, and that certainty is important in these circumstances. The commenter also discussed the impact of recent court decisions that may call into question a party’s Bona Fide Prospective Purchaser status. Lastly, the commenter called for an updated, streamlined program.
Recommendation 27 aims to identify new approaches to address private concerns, and specifically lenders’ concerns. In addition, EPA is seeking to explore new types of site specific tools, including non-agreement tools for all developers. EPA is asking for public input focused on four topics: 1) the significant factors that impact a decision to invest in contaminated or previously contaminated property; 2) the barriers to investing in cleanup and reuse of contaminated sites; 3) specific liability concerns of lenders/financial institutions, investors, purchasers or third parties not currently being addressed through CERCLA liability defenses or existing tools; and 4) what new tools or approaches would alleviate these concerns? Written comments can be submitted to EPA until June 26, 2018. Interested parties may submit comments by email to OSRE-SFTFemail@example.com, specifying the subject header “LS 27.”
This listening session is one of eight scheduled by EPA on the Task Force Recommendations. Because of the potential importance of these sessions, Gibbons attorneys will be participating and blogging on these sessions. The blog on the first session which discussed proposals for expediting Superfund settlement negotiations is available here.