Basic Economic Development Course in Pennsylvania

1
Basic Economic Development Course in Pennsylvania

• Environmental and Commercial Real Estate Legal
  Issues Surrounding Economic Development
• Act 2 Issues

Scott R. Dismukes Eckert Seamans Cherin
Mellott, LLC 600 Grant Street, 44th
Floor Pittsburgh, PA 15219 (412)
566-1998 sdismukes_at_eckertseamans.com
November 8, 2004
849483
2
Potential Sources of Liability

• CERCLA
• Hazardous Substances excluding petroleum, waste
  oil not typically covered by petroleum exclusion
• HSCA
• Hazardous Substances excluding petroleum
• OPA
• Clean Streams Law
• Prohibits discharge of pollutants to surface or
  ground water

3
CERCLA Potentially Responsible Parties

• CERCLA imposes cleanup cost liability on
• current owners and operators
• persons who owned or operated at the time of
  disposal of hazardous substances
• persons who arranged for disposal or treatment of
  hazardous substances
• persons who arranged with a transporter for
  transport of hazardous substances for disposal or
  treatment
• persons who accepted hazardous substances for
  transport for disposal or treatment

4
PA Land Recycling Program

• Established in 1995 as
• Land Recycling and Environmental Remediation
  Standards Act (Act 2)
• Economic Development Agency, Fiduciary and Lender
  Liability Protection Act
• Industrial Sites Assessment Act

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PA Land Recycling Program, contd.

• Four Key Elements
• Uniform Cleanup Standards
• Liability Relief
• Standardized Reviews and Time Periods
• Financial Assistance

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PA Land Recycling Program, contd.

• Recognized as a leader in state programs
• Over 30,000 jobs on site
• Over 53.2 million in grants and loans
• Since 1995, 1,100 sites have been cleaned up
  through the Land Recycling Program

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PA Land Recycling Program, contd.

• Scope
• Inactive or abandoned industrial sites where
  regulated substances were released
• Active sites with releases of regulated
  substances
• Regulated substances include hazardous
  substances, contaminants and pollutants subject
  to regulation under major Pennsylvania
  environmental laws

8
PA Land Recycling Program, contd.

• Eligibility
• Persons who voluntarily remediate a release of a
  regulated substance
• Persons required by law to remediate the release
  of a regulated substance
• Persons who remediate industrial properties in
  enterprise zones or properties for which there
  are no financially viable parties to clean up the
  contamination

9
PA Land Recycling Program, contd.

• Provides protection from cleanup liability to
  parties which demonstrate attainment of cleanup
  standards

10
The Mechanics of Act 2

• Characterize the soil and groundwater
  contamination at the site
• Investigate historic and current uses of site and
  surrounding area
• Perform soil and groundwater sampling
• Site characterization is the basis for the
  cleanup liability protection
• Assess the potential future uses of the property
  and groundwater
• Residential versus non-residential
• Land use and zoning restrictions

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The Mechanics of Act 2, contd

• Establishes three uniform cleanup standards
• Background Standard
• Naturally occurring (e.g., iron or manganese in
  groundwater in certain geologic formations)
• Statewide Health Standards
• Site Specific Standard Risk-based standard
• Typically involves property use restrictions

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The Mechanics of Act 2, contd

• Deed Restrictions
• Act II Land Recycling Program
• Site specific
• Non-residential
• HSCA/SWMA
• Deed acknowledgment if any disposal
• Area size and location
• Description of hazardous substances

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The Mechanics of Act 2, contd

• Getting Started
• Submit Notice of Intent to Remediate (NIR) to DEP
• Notify the municipality and the public of the
  submission of the NIR and every report

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The Mechanics of Act 2, contd

• Submit reports to DEP for its review and approval
• Type of reports varies with the cleanup standard
• Final Report demonstrating attainment with
  cleanup standard required with all of the
  standards
• DEP has limited time to review and act on the
  reports
• Failure to take action within this time results
  in a deemed approval of the report
• Receive cleanup liability protection
• Demonstrate attainment of cleanup standard

15
The Mechanics of Act 2, contd

• Buyer-Seller Agreement Provides Buyer with
  immediate liability protection and commits Seller
  to DEP-sanctioned remediation schedule

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Environmentally Distressed Properties

• Pennsylvania buyer/seller agreements
• Act 2 liability release
• Innocent purchasers
• Bona fide purchasers after January 11, 2002
• Contiguous land owner
• Prospective purchase agreements
• Contractual Indemnity
• Insurance

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Assessing Cleanup Strategies

• What law governs
• What is intended future use
• What cleanup standard arguably apply
• On-site/off-site release
• What can you negotiate
• Is insurance available

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Other Considerations

• Financial Assistance and Incentives
• Industrial Sites Reuse Program
• Industrial Sites Cleanup Fund
• Keystone Opportunity Zones
• Governors Action Team
• Key Sites Pilot Project

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Other Considerations, contd.

• Local Land Use Regulation
• Local governments are not preempted from
  regulating the remediated property
• Site use and any deed restrictions must comply
  with Municipalities Planning Code