Out with the Old: New Environmental Cleanup Rules Take Effect

After more than 40 years as the primary driver of cleanups in Connecticut, the Transfer Act was replaced with a release-based cleanup program March 1.  

The Transfer Act isn’t exactly gone; the hundreds of sites already subject to its requirements must finish cleaning up.

But all properties and businesses–even those subject to Transfer Act requirements–can now be bought and sold without filing a “form,” designating a “certifying party,” or performing an investigation to a standard mandated by the state of Connecticut.  

These changes are a big deal for manufacturers who own real property or operate a business in Connecticut.   

Moment of Transition

The Transfer Act was a driver of investigations. 

To transfer an “establishment” (a piece of land or a business subject to the requirements of the Transfer Act) required an exhaustive investigation, often to “prove the negative” and demonstrate that no historical pollution is present.

In contrast, the RBCP is not a driver of investigations. 

Rather, it requires some releases that have been discovered by market driven investigation to be reported and remediated, and sets out a process for doing so.  

The new RBCP’s key principle—if you find it, report it, and clean it up—is simple, even if the Regulations that implement it are not.   

This moment of transition provides an opportunity to highlight some key changes.

New Cleanup Standards 

RBCRs add several new provisions to the state’s cleanup standards, intended to make cleanups faster and less expensive.  

This includes the addition of two new categories of land uses, called “exposure scenarios,” for managed multifamily housing and passive recreation.   

RBCRs also introduce two “permits-by-rule” that will be very important and useful for Connecticut manufacturers.   

The first allows historical fill to be managed in place on property used for industrial/commercial activity, replacing a requirement that fill be removed and replaced with clean soil paired with a deed restriction prohibiting disturbance of the soil.   

The second permit-by-rule allows certain polluted soil to be managed under site roadways, parking lots, and buildings without recording a restriction on the land records.  

These permits-by-rule avoid the expensive and time consuming process obtaining Connecticut DEEP approval to record a deed restriction on local land records.  

These changes are expected to save money and make cleanup timelines shorter and more predictable.   

These new tools can also be used to advance sites still subject to the Transfer Act, hopefully helping to clear the backlog of sites awaiting verification.   

Path to Regulatory Closure for New Spills 

There are also changes to the process for addressing certain new spills. For the first time, a clear path to regulatory closure for new spills is now in effect. 

After reporting the new spill pursuant to the separate, existing release reporting regulations, which have been in effect for several years, certain spills (generally those that have impacted surface or groundwater or are of more than 10 gallons of oil or petroleum or three gallons or 20 pounds of a substance other than oil or petroleum) are subject to RBCP. 

There are new cleanup standards for spills that can often be achieved without any required sampling. 

Once that cleanup standard is achieved, a “permitted environmental professional” can certify a release remediation closure report, clearly documenting that no further action is required.  

Documentation of regulatory closure was not previously available from DEEP which often created an obstacle to buying, selling, or refinancing property.  

This new process ensures that these release areas will not need to be reinvestigated if a future environmental site assessment is performed and that future purchasers can be assured that cleanup was properly completed.   

New Considerations for Investigations 

The trigger for required action under the RBCP is the “discovery” of a release. 

Discovery of historical pollution occurs when knowledge of a releases is obtained by its “creator” or a ”maintainer.” 

In this context, “maintainer” generally means the owner of the property on which the release is located.  

Under the new rules, a potential buyer can investigate a property without triggering any obligation to report or remediate if the property owner does not itself obtain knowledge of the release.  

This means that, before allowing or performing due diligence, buyers and sellers should create clear expectations about what type of information will be shared.  

Purchase and sales agreements and other documents should clearly specify what information is to be shared, and with whom.   

A New Day 

The arrival of the RBCP presents a lot of unknowns as a major environmental transition gets underway and the market adjusts to the new rules.  

That said, certain environmental scenarios have a much more defined, faster and cheaper “exit strategy” that Connecticut manufacturers and others in the real estate community can leverage with guidance of knowledgeable professionals.