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Environmental Law Issues In Real Property Disposal Transactions ECOS Meeting February 2005 PowerPoint Presentation
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Environmental Law Issues In Real Property Disposal Transactions ECOS Meeting February 2005. B.K. Schafer, J.D., LL.M. Senior Assistant General Counsel Real Property Division Office of the General Counsel General Services Administration bernard.schafer@gsa.gov 202-501-0255.

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Environmental Law IssuesIn Real Property Disposal Transactions

ECOS MeetingFebruary 2005

B.K. Schafer, J.D., LL.M.Senior Assistant General CounselReal Property DivisionOffice of the General CounselGeneral Services Administrationbernard.schafer@gsa.gov202-501-0255

general services administration
Federal Supply Service

Federal Technology Service

Public Buildings Service

General Services Administration
slide3

Public Building ServiceAcquisition & Management Regions

Region 2New York

Region 1Boston

Region 8Denver

Region 5Chicago

Region 10Auburn

Region 3Philadelphia

Region 6Kansas City

NCR

Washington DC

Region 1San Francisco

Region 1San Francisco

Region 7Ft. Worth

slide4

Auburn

Region 9San Francisco

Region 7Ft. Worth

Public Building ServiceDisposal Regions

Region 1Boston

Chicago

NCRWash. D.C.

Region 4Atlanta

slide5

Property Disposal ProcessFederal Property Act & Federal Management Regulations40 USC 541 et seq. & 41 CFR 102-75

PublicSale

Public BenefitConveyance

FederalTransfer

NegotiatedSale

Excess

TO ELIGIBLEPUBLIC BODIES FOR OTHERPUBLIC USES FAIR MARKET VALUE

OFFERED TO PUBLIC & PRIVATE PARTIES BY AUCTION OR SEALED BID FAIR MARKETVALUE REQUIRED

PROPERTY AVAILABLEFOR CERTAIN PUBLIC USESUP TO 100%DISCOUNT

DETERMINED SURPLUSIF NOT TRANSFERREDTO ANOTHERFEDERAL AGENCY

AGENCY REPORTS PROPERTYEXCESS TO GSA FORDISPOSITION

  • Correctional
  • Education
  • Historic
  • Homeless
  • Law Enforcement/Emergency Management
  • Park & Recreation
  • Public Health
  • Self Help Housing
  • Wildlife Conservation
  • Air, Sea and Transportation Ports

ISDEA Donation:Surplus Property

ISDEA Donation:Excess Property

ISDEA Donation:Surplus Property

real property acquisition or disposal environmental law issues
Hazardous Substance Cleanup = CERCLA & RCRA

Underground Storage Tanks (USTs) = RCRA & UST

Lead Based Paint (LBP) = TSCA, RCRA & CERCLA

Asbestos = CAA & CERCLA

PCB Equipment = TSCA

Historic & Cultural Resources = NHPA

Endangered Species = ESA

Wetlands & Floodplains = CWA & E.O.

Environmental Planning = NEPA & CZMA

Real Property Acquisition or Disposal Environmental Law Issues
slide7

Fed to Fed Transfer of Property

  • CERCLA 120(h) does NOT apply – the transfer of federal property to a federal agency is viewed as passing the land from the left hand to the right.
  • All environmental liabilities (i.e., CERCLA, RCRA, UST, etc.) can be retained by old federal owner or assumed by the new federal owner (or a little of both).
  • In the past, the trend has been for current federal owner to clean property before actual transfer, and remain liable for discoveries after transfer.
  • Recent trend is current federal owner demanding a transfer now with a right of access post-transfer to continue to do cleanup (I.e., “early transfer”), or to insist on new federal owner picking up the cleanup obligation post-transfer.
slide8

Transfer of Federal Property Under CERCLA

  • CERCLA 120 affects only transfers of federal property (i.e., the entire fee, not leases, etc.) to non-federal, non-PRP recipients.
  • CERCLA 120 says that only if you satisfy one of three provisions of CERCLA, can such property be transferred:
    • Timely Transfer: property has been studied or cleaned and found to be clean “enough;” OR a remedy is “constructed and installed” and, though not yet complete, is “operating properly & successfully” per EPA.
    • Early Transfer: property has not been cleaned but will be after the transfer by either the grantor or the grantee.
    • Clean Transfer: property has never had any releases -- hazardous substances OR petroleum -- and thus can be called “clean” and requires no cleanup (Note: “adjacent property” must be studied too).
slide9

CERCLA 120(h)(3) Required Deed Provisions

CERCLA Timely Transfer

  • Disclose Hazardous Substance Activity
  • Provide Buyer With Covenants:
    • All remedial action necessary is completed at time of transfer; or remedy not finished but “operating properly and successfully” per EPA
    • The United States shall conduct any additional remedial action found necessary after transfer (for contamination existing at time of transfer).
    • Access reserved for any additional remedial action found necessary after the transfer.
cercla early transfer
CERCLA Early Transfer

J. Wellington Wimpy explains how CERCLA Sec. 120(h)(C)(3) works –

the "early transfer" provisions of CERCLA Sec. 120

slide11

CERCLA 120(h)(3)(C)Early Transfer Authority (ETA)

CERCLA Early Transfer

  • Allows Governor (and EPA at NPL) to defer CERCLA covenant that all remedial action necessary has been taken prior to transfer if:
    • Property is suitable for use intended by transferee
    • The intended use is consistent with protecting human health & the environment
    • There are assurances that cleanup will be completed and the deferral will not substantially delay the cleanup
slide12

CERCLA 120(h)(3)(C)Early Transfer Authority (ETA)

CERCLA Early Transfer

  • Contract provisions:
    • Can agree to transferee’s performing the necessary investigation and cleanup
    • Must identify an approved schedule for investigation & completion of all necessary response action (by federal transferor or transferee)
    • Obligation to submit budget request to OMB that adequately addresses the schedule for investigation & cleanup(when federal transferor is doing cleanup)
slide13

CERCLA 120(h)(3)(C)Early Transfer Authority (ETA)

CERCLA Early Transfer

  • Deed restrictions on use:
    • To ensure protection of human health and the environment
    • To ensure no disruption of required investigations, response action and oversight activities
slide14

Land Use Control Implementation

  • Cleanup Paradigm - breaking the link among the contaminant, the pathway and the receptor.
  • All three aspects are calculated via “risk assessments.”
  • Residential (unrestricted) use vs. Commercial/Industrial (restricted) use, drive the “risk assessment” process.
  • If cleanup is based on restricted use of land, then site-specific restrictions must be spelled out.
  • Restrictions are of two flavors: engineering controls vs. institutional controls.
  • Institutional controls can consist of Deed Notices vs. Promise to Do a Deed Restriction vs. Deed Restriction (no residents, no digging, no use of groundwater).
slide15

CERCLA “Early Transfer” ProcessFinding of Suitability for Early Transfer (FOSET) & Covenant (i.e., all cleanup is complete) Deferral Request (CDR)

Purchaser negotiatesnew cleanup agreementwith State

Closing on SaleU.S. gives deed with Restrictions

Purchaserperforms cleanuppost-transfer

Actively Sell by NS or PS

Prepare forPublic Sale (PS)

Prepare for

Negotiated

Sale (NS)

or

Governor allows U.S. to defer CERCLA covenant

DraftFOSET

30-dayPublic NoticeFOSET

FinalFOSET &CDR

Cleanup Complete

U.S. provides

deferred covenant

State Regulator

input

Public

Comment & Response