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@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

5. PA Land Recycling Program, cont’d. • Four Key Elements • Uniform Cleanup Standards • Liability Relief • Standardized Reviews and Time Periods • Financial Assistance

6. PA Land Recycling Program, cont’d. • 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

7. PA Land Recycling Program, cont’d. • 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, cont’d. • 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, cont’d. • 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

11. The Mechanics of Act 2, cont’d • 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

12. The Mechanics of Act 2, cont’d 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

13. The Mechanics of Act 2, cont’d • 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

14. The Mechanics of Act 2, cont’d • 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, cont’d • Buyer-Seller Agreement – Provides Buyer with immediate liability protection and commits Seller to DEP-sanctioned remediation schedule

16. 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

17. 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

18. Other Considerations • Financial Assistance and Incentives • Industrial Sites Reuse Program • Industrial Sites Cleanup Fund • Keystone Opportunity Zones • Governor’s Action Team • Key Sites Pilot Project

19. Other Considerations, cont’d. • 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