The U.S. Environmental Protection Agency (EPA) was active in late 2008, publishing several proposed, direct final, final rules, and notices regarding environmental issues of concern to our clients. Among the more interesting of these actions are the following:

EPCRA Reporting: Good News / Bad News

Good News. In a rulemaking dated November 3, 2008 and effective December 3, 2008, EPA published several changes to reporting requirements under the Emergency Planning and Community Right-to-Know Act (EPCRA) relating to Extremely Hazardous substances (EHS). The EHS rules, codified in the 40 CFR Part 355 Emergency Planning and Notification Provisions, apply to any facility which has an EHS present in an amount equal to or greater than the established threshold planning quantity (TPQ) of the chemical.1 In the new rulemaking, the Part 355 Rules have undergone a makeover into EPA’s new “user-friendly” Q & A format, which is always good news for the regulated community; however, besides the format change there is other, substantive good news on the EPCRA/EHS reporting front. First, in the new rule EPA has clarified how to assess and report mixtures that contain EHS when pure forms of an EHS also exist on-site, and clarifies other aspects of reporting mixtures containing EHS. EPA has also clarified, in 40 CFR Part 355.30(c), that a facility’s initial notification of EPCRA applicability must include the name of the facility emergency coordinator. (This requirement was not clear in earlier rules.) Further, the revised rules contain a very useful table (See 40 CFR § 355.20) that clearly summarizes a company’s obligations under the Part 355 standards; obligations under the statute and regulations were formerly scattered between the statute and the rules. Copies of the new rules and compliance chart can be obtained from Seyfarth’s ESTT group.

Bad News. Along with the good news on EPCRA/EHS reporting comes some bad news. The new rule has provisions that specifically require facilities to notify the Local Emergency Planning Committee (LEPC) of changes in the status of the EHS they handle. (Previously, recordkeeping requirements included initial notifications and release reporting, but “changes in use” were captured in 312 Hazardous Chemical Inventory Reports.) Under the new rules, facilities handling EHS and subject to EPCRA Part 355 must provide notice of “changes relevant to emergency planning” to the LEPC within 30 days of the change in use of the chemical. Examples of changes that require notification to the community include when a facility moves EHS to a new location in a facility, removes EHS from a facility permanently, adds new EHS, or closes a facility.

The rule change requiring notices of change-in-use is controversial mainly because it requires a notice to the local government of the closing of a facility subject to EHS rules, and notification when a chemical is no longer used at a facility. Such notice is somewhat unique in environmental law; very few environmental rules require facilities that cease operations to notify the state or local government of such cessation, and those requirements are generally aimed at sites that are traditionally highly regulated under environmental laws, such as RCRA-regulated hazardous waste disposal facilities. Compared to highly regulated businesses such as chemical manufacturers and users, the EHS rules apply to facilities that are otherwise not widely or heavily regulated, such as warehouses, distribution facilities, and retail operations not accustomed to notifying the government when they make changes in operations, cease the use of a particular chemical, or cease operations. Examples:

  • A food warehouse facility with 20 fork-lift trucks with batteries containing (in total) more than 1,000 pounds of sulfuric acid will not only be subject to the EHS notification requirements at the start of operations, but under new rules now must report to the local emergency planning committee if the facility closes, ceases using batteries with a sulfuric acid, changes the number of batteries used and thus falls below the TPQ, or changes the location of battery storage.
  • Similarly, facilities with back-up batteries or fuel for emergency generators subject to EHS rules will need to report changes in use of batteries and fuel. Failure to comply with EPCRA EHS requirements carries heavy penalties (up to $75,000 per day).  

TSCA Inventory Reset  

EPA is poised to launch the “Toxic Substances Control Act Inventory Reset” in response to a TSCA Section 8(b) requirement, which requires EPA to maintain a list of all chemical substances manufactured and processed in the United States (the Toxic Chemical Substance Inventory or “Inventory”). The Inventory allows chemical manufacturers or importers of new substances to compare the new substances to the Inventory to determine whether they are subject to Pre-Manufacture Notification (PMN) and other TSCA requirements which can be costly, burdensome, and time consuming. According to EPA, there are currently more than 83,000 chemical substances currently on the Inventory, and EPA must revise the list in 2010. The revision historically has been a burdensome process, (primarily for industry since it must provide the information used by EPA to update the Inventory). EPA had a public meeting on the Inventory Reset on December 8, 2008 and, although EPA is not committed to any course of action, it has suggested that to facilitate corrections to and deletions from the Inventory, EPA would likely simplify the update process and allow chemical manufactures to certify on a secure website whether they make or process particular chemicals. EPA is accepting comments on the TSCA Inventory Reset until January 23, 2009. Information on, or assistance with preparing comments on the rulmaking, is available from the Seyfarth Environmental, Safety & Toxic Torts (ESTT) group.

Due Diligence  

On December 23, 2008, EPA published a Direct Final Rule amending the All Appropriate Inquiry due diligence standard rules to include an alternative ASTM standard for use in acquisitions of tracts of land larger than 120 acres that are forested or are rural properties. The new standard, entitled “Standard Practice for Environmental Site Assessments: Phase 1 Environmental Site Assessment Process for Forest Land or Rural Property” (ASTME2247-08) becomes effective March 23, 2009 (unless EPA receives adverse comments by January 22, 2009). The new standard is an alternative to the existing ASTM standard used in the due diligence process to establish defenses to CERCLA liability for real property with environmental impacts. Simplified, the EPA All Appropriate Inquiry (AAI) rule provides that entities which use ASTM Standard ASTME1527-05 to conduct Phase I property assessments have conducted sufficient due diligence to avail themselves of the Bona Fide Prospective Purchaser (BFPP), Contiguous Property Owner, and Innocent Landowner defenses under CERCLA. With the new rule, persons entitled to a BFPP, Contiguous Property Owner, or Innocent Landowner Defense can now use either the ASTM1527-05 standard, or the new alternative standard when performing Phase I assessments for large tracts of forested property, and large tracts of rural property. Entities conducting assessments for large tracts of forest land or rural land are not required to use the new ASTME2247-08 standard, but are allowed to use it as an option to qualify for the CERCLA defenses.

The differences between the ASTME1527-05 standard and the new ASTME2247-08 standard are subtle; for example:

  • ASTME2247-08 identifies two issues to be considered in Phase I assessments that are not addressed under the current ASTM1527-05; ASTME2247-08 identifies “Threatened and Endangered Species,” and “Non-Point Source Pollution” as issues affecting the condition of property, wherein ASTM1527-05 considers such issues “outside the scope” of a Phase I assessment.
  • Additionally, the new ATSME2247-08 clarifies the definition of “Data Gaps” affecting the due diligence report.
  • Another subtle difference between ASTME2247-08 and ASTM1527-05 is that the 2005 standard requires the “current owner” and “occupant” of the site to be interviewed; ASTME2247-08 requires only that the “site manager” or “someone with knowledge about the property” to be interviewed.
  • Finally, compared to the 2005 standard, the alternate ASTME2247-08 standard provides a more detailed list of documents to be reviewed as part of the historical review of a site.  

Because the differences are subtle, both standards should be carefully considered for due diligence of large tracts of forested or rural property. To facilitate a comparison of the standards, EPA has published a chart comparing the existing and alternative ASTM due diligence standards in the docket of the rulemaking. To obtain a copy of the chart, or more information on the new alternate standard, please contact the Seyfarth Shaw ESTT group.

Section 404 Clean Water Act  

Revisions to the Clean Water Act definition of “discharge of dredged material” were published jointly by the U.S. Army Corps of Engineers and EPA on December 30, 2008 (and became effective that day). The rule affects entities engaged in activities where dredged materials could be discharged into “waters of the United States” in industrial, commercial or agricultural settings, and includes landowners, developers, excavating companies, and construction companies. The change in the definition of “discharge of dredged material” is important because it determines in part whether a site development, agricultural, or construction activity requires a Clean Water Act Section 404 permit. The definition of “discharge of dredged material” has a litigious history, mostly due to the controversy surrounding whether “incidental fall back” (dredged or excavated material that happens to fall back into waters during excavation or dredging) is a prohibited “addition of a pollutant” into a water of the United States. The 2008 definition clarifies circumstances wherein a discharge is considered regulated (and thus subject to a 404 permit);for example, excavated material which is deposited into waters of the United States from mechanized clearing, ditching, or channelizing is considered to be “discharge of dredged material.” However, “incidental fallback” (even if associated with mechanized clearing, ditching, or channelizing) is not considered “discharge of dredged material.” Unfortunately, the definition of “incidental fallback” is deleted from the regulation, as are examples of when the use of mechanized moving equipment is considered to result in a regulable discharge. Under the new rule, a decision as to whether a particular deposit or redeposit of dredged material is subject to Clean Water Act jurisdiction will be made on a case-by-case basis during the 404 permit evaluation.