The existing Superfund liability provisions are fundamentally sound, and the Working Group recommends leaving them essentially unchanged. The Group does recommend incorporating some common-sense reforms that have been used by the federal Superfund program for years. These reforms would properly focus liability on the true polluters and, by freeing innocent parties from liability, create strong incentives for thorough site investigations and voluntary cleanups, making brownfields redevelopment competitive with "greenfield" development. The reforms would not relieve polluters of any financial or legal responsibility. The Group also recommends granting DEC authority to collect costs plus treble damages from polluters that have acted in bad faith and, after a reasonable period of time, refused to clean up a site, forcing the State to fund the cleanup.

"Strict, joint and several" liability is the existing standard for parties liable to clean up contaminated property under both New York and federal law. "Strict" liability means that a party's liability is not based on fault. "Joint and several" liability means that when more than one responsible party exists for a site, any and all parties may be held responsible for the entire cost of cleanup.
 

Liability is retroactive: parties are liable if the contamination warrants cleanup, regardless of whether the contamination was created previously, possibly at a time when the activities that led to the contamination were legal and prior to enactment of State and federal cleanup liability statutes.
 

The federal Superfund law imposes liability on four classes of people:

• the owner or operator of a facility;

• the owner or operator of a facility at the time of disposal of a hazardous substance;

• any person who arranged for disposal or treatment, or arranged for transport for disposal or treatment of a hazardous substance;

• any person who accepted a hazardous substance for transport for disposal or treatment to a facility selected by such person.

The State Superfund law imposes liability on two classes of people

• the owner of a site, and

• "any person responsible for the disposal of hazardous wastes at such site" as determined by "applicable principles of statutory or common law liability."

The federal law regarding petroleum cleanups is the Oil Pollution Act of 1990, which holds the owner or operator of an onshore facility or pipeline liable for cleanups. A third-party whose conduct actually caused the discharge can also be treated as a responsible party under specific circumstances.
 

The State law regarding petroleum cleanups imposes liability "strictly" and "without regard to fault" on "any person who has discharged petroleum." The statute also imposes such liability on the Oil Spill Fund. The courts have interpreted this provision broadly, holding liable parties such as the seller and installer of an oil tank, an oil broker and the oil supplier to a leaking home heating oil tank.
 

These liability provisions have obvious merits but also a significant unintended consequence: they act as a powerful barrier to private investment in any site with a history of contamination (regardless of its cleanup status), and they can capture innocent parties in the net of liability unfairly, often providing the responsible parties with opportunities to delay cleanups while courtroom battles determine responsibility.
 

DEC currently provides limited releases from liability to volunteers who complete a satisfactory cleanup of a site under the Voluntary Cleanup Program. Volunteers who do so are released from future liability for the site's investigation and remediation, subject to a number of reopeners.
 

The existing State liability standard contributes to the dereliction of contaminated sites because the party that is actually responsible for the contamination often abandons the property in an effort to escape liability, and no other party is willing to clean it up and return it to productive use because of the threat of being held liable for preexisting contamination. These brownfields remain blights on the community, providing a continuing source of pollution, while draining tax revenues and jobs from urban neighborhoods.

The Working Group's goal for recommending changes in liability is to encourage non-responsible parties to take ownership of, clean up and redevelop contaminated sites with private funds. Some reforms would relieve some parties of liability for problems they did not cause, but would not relieve actual polluters of any financial or legal responsibility. The Working Group recommends retaining the "polluter pays" principle: the party responsible for the contamination should pay for the cleanup.
 

The proposed reforms should make brownfields redevelopment competitive with "greenfield" development, and act as an engine for economic development in blighted areas.
 

The Working Group does recommend that New York adopt liability limitations and exemptions (listed below) contained in the federal Superfund program that have proven to be fair and feasible in an attempt to retain liability for polluters and to relieve innocent owners of some liability.
 

For example, New York State currently does not provide similar liability protections to lenders that the Federal government provides, meaning banks are less willing to provide funding for clean up and redevelopment of contaminated properties in New York. The lender liability exemption proposed by the Working Group would apply only to banks that did not participate in the management of the site when the contamination occurred.
 

In addition, the lender or prospective purchaser must make a good faith effort to determine whether a site is contaminated to receive this exemption, creating a powerful incentive for banks and prospective purchasers to conduct thorough environmental investigations before properties are sold.
 

As an incentive to clean up a site, the Working Group recommends that the Attorney General give liability releases to parties conducting cleanups under all three programs. The State would reserve its right to pursue these parties for cleanup costs if it is determined that the cleanup was not done appropriately, or in cases of fraud or other traditional "reopener" situations described on the following page.
 

These liability limitations and exemptions would be carefully structured to maintain liability on true polluters while encouraging innocent parties to clean up and redevelop these sites.
 

The Working Group recommends incorporating the following liability limitations and exemptions that are offered under the federal Superfund program:
 

(1) Innocent Party Defense -- To establish innocence, a party must establish that contamination was caused by an act of war, God, or some other person that was not affiliated contractually with the party; that it exercised due care with respect to the contamination; and it took precautions against foreseeable acts of other persons.
 

(2) Lender Liability Exemption -- for lenders who do not participate in the management of a site; if the lender forecloses on a property, the lender must divest of the property as soon as practicable.
 

(3) Fiduciary Liability Limitation -- liable for cleanup up to the amount of the assets held in a fiduciary capacity.
 

(4) Municipal Liability Exemption -- for property taken involuntarily (e.g. tax delinquency).
 

(5) De Minimis and De Micromis Liability Protection -- DEC should adopt de minimis (small parties) and de micromis (very small parties) settlement policies allowing qualifying parties to resolve their liability through settlements that are in proportion to the harm they have caused.
 

The Working Group also recommends the following additional liability limitations:
 

Industrial Development Agency Exemption -- This protection is not codified in the federal Superfund statute but relies on case law. An IDA acting as a "conduit financier" would not be considered an owner or operator of the site.
 

Prospective Purchaser Liability Protection -- Instead of incorporating EPA's prospective purchaser liability limitation, New York's Voluntary Cleanup Program offers the same protection: liability exemption while the investigation is being conducted, however, the liability exemption would be lost if the property was left in worse condition.
 

Liability Releases -- Offered to parties successfully completing cleanups; to be issued by the Attorney General's Office. The liability release is transferrable, and would be invalidated in case of the following "reopeners" (which incorporate the conditions of the Clean Water/Clean Air Bond Act's Brownfields program):
 

(1) fraud;

(2) failure to comply with the agreement or consent order with DEC;

(3) change in use which results in the need to conduct additional remediation;

(4) causing or threatening to cause a release of a contaminant at the property after the consent order or agreement;

(5) conditions unknown to DEC at the time the release that require additional remediation;

(6) the cleanup is not protective of public health or the environment.
 

Incentives to Clean Up Sites to Unrestricted Use Levels
 

The Working Group recommends that the State provide a liability release without reopeners 3 and 6 above to non-responsible parties that clean up to Soil Category 1 soil cleanup levels, and, further, if the site is not protective of public health and the environment in the future, the State will remediate the site to that level and pursue cost recovery against responsible parties. This strategy is consistent with the incentives used by Clean Water/Clean Air Bond Act's Brownfields Program. This should encourage non-responsible parties to clean up to Soil Category 1 in the first instance. For responsible parties that remediate a site to Soil Category 1, reopener 3 above will not apply.
 

The State Superfund Program cleans up contaminated sites using an 8-step process, consistent with the process used at federal Superfund sites:

• A Remedial Investigation, which defines the nature and extent of the site's contamination is developed;

   

• A Feasibility Study, which identifies cleanup options for the contaminated site, is developed;

   

• A Proposed Remedial Action Plan is developed by DEC, in consultation with the State Department of Health, which identifies the preferred cleanup plan and subjects it to at least 30 days of public comment;

   

• A Responsiveness Summary to public comments received is developed by DEC;

   

• A Record of Decision is issued by DEC, in consultation with DOH, which selects the final cleanup plan for the site, taking into consideration public comments received.

   

• The Remedial Design develops complete technical and engineering plans;

   

• Remedial Construction of the cleanup then begins at the site; followed by

   

• Operation & Maintenance of the cleanup's effectiveness.

   

• The options for a site cleanup, which are documented in the Feasibility Study, are evaluated against the following factors: overall protection of human health and the environment; compliance with applicable cleanup standards; long-term effectiveness and permanence; reduction of toxicity, mobility and volume through treatment; short-term effectiveness; feasibility; cost; and community acceptance. Specific site cleanup plans are selected based on those criteria, but at a minimum must be protective of public health and the environment and comply with other applicable rules. Regulations for the State Superfund Program require cleanups to generally conform with federal criteria.

The Oil Spill Program for petroleum contaminated sites conducts:

• Immediate Responses to emergencies, including cleanups needed to abate immediate public health and environmental hazards posed by petroleum spills;

   

• An Investigation either follows an emergency response, or, if no emergency is present, a thorough investigation is conducted to determine the nature and extent of contamination;

   

• A Corrective Action Plan is developed to clean up the site.

The Voluntary Cleanup Program requires:

• An agreement between DEC and the party undertaking the investigation or remediation. The agreement includes a technical work plan that identifies the proposed activities.

The Working Group recommends leaving the site cleanup planning process largely unchanged, although it does recommend bringing consistency to the remedial programs. The Working Group also recommends clarifications of the State's cleanup standards and goals (incorporating explicit considerations of land use into the remedy selection), which are discussed in detail in the "Cleanup Goals and Standards" fact sheet.
 

DEC should improve the use of institutional and engineering controls by requiring parties and their successors who have used such controls to annually certify to DEC that the controls are unchanged from the previous certification, and that nothing has occurred at the site in violation of the controls. In addition, DEC should be granted authority to inspect sites to ensure the continued maintenance of such controls. DEC would establish and maintain a database with relevant information on such controls, make such information publicly available, and provide a copy to each County Clerk's office.
 

Additional Recommendations:
 

For Remedial Investigations: The requirements and elements of remedial investigations should be consistent under all the State's remedial programs, and require thorough investigations.

For On-Site Contamination: All parties undertaking a cleanup must investigate on-site contamination.

For Off-Site Contamination: Responsible parties must also investigate off-site contamination. Non-responsible parties must conduct an off-site exposure assessment to determine the exposure to public health and the environment, if any. If that assessment identifies contamination that poses a significant threat to public health or the environment, the State will require the responsible party to conduct the off-site investigation or the State will conduct the off-site investigation using State funds and seek cost recovery from responsible parties.
 

For Cleanups:

Of On-Site Contamination: Responsible parties and non-responsible parties should clean up on-site contamination.

The issues of cleanup goals --what conditions a cleanup should ideally achieve -- and standards -- what environmental conditions are considered appropriate for a specific cleanup -- are closely related. This fact sheet seeks to lay out the statutory and regulatory requirements for both cleanup goals and standards and how the Working Group's recommendations are consistent with existing goals, standards and practices.
 

Existing State law and regulations for the Superfund and Oil Spill programs leave DEC without clear direction on how to balance ideal cleanup goals with practical concerns (in many cases, pre-disposal conditions are not attainable.) Although State law establishes that pre-disposal conditions are preferred, both law and regulations recognize that this goal must be tempered by practical considerations. However, existing laws and regulations provide no clear guidance for DEC to consistently balance these considerations.
 

Consequently, the existing system is to determine cleanup standards on a case-by-case basis. This process is highly unsatisfactory, since it does not provide certainty and predictability for the cleanup programs. The Working Group recommends establishing a consistent, predicable, scientifically-based process for determining appropriate cleanups for all contaminated sites in the state. This would bring certainty and transparency to a process that is currently unpredictable and potentially inconsistent.
 

The Working Group believes that its recommendations would make cleanups more uniform, are at least as protective of public health and the environment as the current programs, and will remove more contamination from the environment overall.
 

Cleanup Goals of the State Superfund Program
 

State law establishes the cleanup goals "shall be a complete cleanup of the site through the elimination of the significant threat to the environment... and of the imminent danger of irreversible or irreparable damage to the environment." Regulations clarify that goal as being to restore sites "to pre-disposal conditions, to the extent feasible and authorized by law. At a minimum, the remedy selected shall eliminate or mitigate all significant threats to the public health and to the environment... through the proper application of scientific and engineering principles." In other words, the cleanup should be as complete as possible, but on a case-by-case basis, DEC and the State Department of Health (DOH) may determine that cleanups that mitigate contamination are appropriate and fully protective of public health and the environment.
 

Cleanup Goals of the Oil Spill Program
 

Regulations establish that the cleanup goal for the Oil Spill Program is "to effect a prompt cleanup and removal of such discharges, giving first priority to minimizing environmental damages" and that "the objective of the cleanup and removal phase is... the restoration of the environment to its pre-spill conditions."

The law defines cleanup and removal as meaning the "(a) containment or attempted containment of a discharge, (b) removal or attempted removal of a discharge or, (c) taking of reasonable measures to prevent or mitigate damages to the public health, safety or welfare." (emphasis added)
 

Cleanup Goals of the Voluntary Cleanup Program
 

This program, which is implemented administratively, seeks to ensure that cleanups are protective of public health and the environment for the next intended use of the site.
 

For Surface Water & Groundwater: DEC and DOH use environmental quality standards for surface water and groundwater discharges and public health standards for drinking water sources as the cleanup objectives for the specific contaminants of concern contained in surface water, groundwater or drinking water.

DEC is charged with determining the need and feasibility of remediating groundwater contamination. DEC's approach to groundwater remediation includes removal of the source of contamination, identifying pathways of exposures (discharge to water, volatilization into indoor air, etc.) and the receptors (people, plants or animals), and a decision on groundwater treatment or hydraulic containment. In making the decision, DEC and DOH must consider site-specific factors such as hydrogeologic conditions; contaminant properties and concentrations; potential impacts to human health, including the present and future uses of groundwater in the area; potential environmental impacts; and the feasibility of the potential cleanup.
 

For Soil: When contaminated soil is found at a site, DEC and DOH use administrative guidance documents for the State Superfund and Oil Spill programs to establish the soil cleanup objectives for the specific contaminant of concern. Both soil cleanup guidance documents were developed to protect public health and the environment.

DEC's administrative guidance for the Superfund (TAGM 4046) and Oil Spill programs (for soil contamination) sets forth processes to determine soil cleanup levels on a case-by-case basis. The process begins with the numerical soil cleanup objectives contained in the guidance document (which are not automatically the final soil cleanup levels for a site) and then determines the appropriate soil cleanup levels on a case-by-case basis taking into consideration the site-specific information.
 

For Sediments: For contaminated sediments, DEC uses its sediments screening criteria, identified in an administrative guidance document, as a guide to contaminant levels in sediments which might be unacceptable to organisms, fish or wildlife to determine whether additional investigation and evaluation relative to sediment is needed.
 

For Air: DEC determines whether proposed air emission sources meet applicable technology based regulations and will have an acceptable impact on the environment. "Air Guide-1," a guidance document, establishes the process and criteria used to determine if the proposed sources will have an acceptable impact and whether additional air emission controls are needed. This document is used to evaluate air emissions from the remediation of contaminated sites
 

For all three remedial programs, the cleanup goal remains protection of public health and the environment and, at a minimum, elimination or mitigation of all significant threats to public health and the environment. This goal is consistent with State Environmental Conservation Law relating to the State Superfund Program and the Navigation Law relating to the Oil Spill Program.
 

Current State regulations recognize that the goal of cleaning up sites to pre-disposal conditions must be tempered by practical and technical considerations at a site -- in some cases, such cleanups can only be carried out "to the extent feasible and authorized by law."
 

Despite the existing goals, most cleanups do not achieve pre-disposal conditions due to practical considerations and technical limitations. All cleanups conducted under the existing programs are fully protective of public health and the environment, meaning any chemicals remaining after a cleanup do not pose a threat to humans or the environment. The Working Group's recommendations recognize the practical limitations of the pre-disposal goal and, instead, provides consistent, predictable and protective cleanup goals.
 

Establishing realistic, consistent cleanup goals will result in more sites being cleaned up; the net effect will be greater reductions in environmental contamination.
 

For immediate responses to oil spills, the cleanup goal will remain restoration of the environment to pre-spill conditions.
 

Under all three remedial programs, the Working Group recommends that DEC consider the current, intended and reasonably anticipated future uses of the site and surrounding properties when proposing, selecting or approving a cleanup plan. Land-use would be just one of many criteria used in evaluating and selecting cleanup plans, including existing criteria contained in the State Superfund Program regulations and guidance, such as overall protectiveness of public health and the environment; compliance with standards; short-term and long-term effectiveness; reduction of toxicity and community acceptance. Besides the consideration of land uses, the Working Group does not propose any changes to the cleanup process or the cleanup plan selection process for State Superfund sites.
 

Existing and future land uses currently are a practical consideration in selecting remedies under the State Superfund program. The Working Group is recommending to clarify and codify this practice by making it an explicit, rather than implicit, criterion in the remedy selection process. Consideration of land uses is consistent with EPA guidance used to select cleanups at federal Superfund sites. In instances where future uses are uncertain, such as in mixed residential/industrial areas, DEC retains its discretion to select a more stringent cleanup plan.
 

The promulgation of specific soil cleanup levels for specific contaminants under various land use scenarios (which will be protective of public health and the environment) would make cleanups more predictable, consistent and faster.
 

For Surface Water, Sediment, Drinking Water and Air: Existing standards, criteria and guidance for these media would still apply.
 

For Groundwater: The Group recommends continued conformance with the environmental and public health standards for groundwater while recognizing that once contamination reaches groundwater, it can be infeasible or impractical to restore groundwater to standards. DEC is charged with developing a groundwater remediation strategy and issuing it for public review and comment. Such strategy must require that protection of public health and the environment be maintained, address any on-site sources of groundwater contamination, and reduce the concentration and mobility of groundwater contaminants.
 

In addition, DEC and DOH will develop and implement a plan to more fully delineate the groundwater resources and uses in the state to better identify the areas which are presently or potentially being used as drinking water sources and which areas are not.

For Soil: The Working Group recommends that DEC establish a technical advisory panel of members with appropriate scientific, technical and other expertise, and representing a broad range of interests, to develop and recommend soil cleanup levels that would be protective of public health and the environment as follows:
 

Soil Category 1 -- soil cleanup levels would be provided (in table format) for commonly found contaminants which when achieved would allow a site's use to be unrestricted. The site's remedy would not be able to rely on institutional (e.g. deed restrictions) or engineering (e.g. the operation of a groundwater remediation system) controls.
 

Soil Category 2 -- soil cleanup levels would be provided (in table format) for commonly found contaminants which when achieved would allow a site's current, intended or reasonably anticipated use (e.g. industrial, commercial and residential) to occur. The site's remedy can rely on institutional and engineering controls.
 

Soil Category 3 -- soil cleanup levels would be established on a site-by-site basis using site-specific data which would be protective for the site's current, intended or reasonably anticipated use. It is expected that this category would be used in very limited occasions.
 

In developing the soil cleanup levels under Soil Categories 1 and 2, the technical advisory panel would consider: cancer and non-cancer human health effects; background concentrations; exposure to the same contaminant from other routes; the experience of the existing State cleanup programs; the strength of the toxicological data base; sensitive populations, including children; the protection of groundwater for its classified use; protection of surface water; protection of air, including indoor air; and protection of ecological resources, including fish and wildlife. In addition, the possibility that some contaminants act through similar toxicological mechanisms would also be considered. In other words, the soil cleanup levels would be protective of public health and the environment. The technical advisory panel would also make recommendations on the process to be used for establishing soil cleanup levels under Soil Category 3.

New York State has developed several programs to remediate contaminated sites, including the State Superfund Program, the Clean Water/Clean Air Bond Act Brownfields Program, the Oil Spill Program, and the Voluntary Cleanup Program. New York's remedial programs are nationally recognized as successful; however, modifications to the programs would further enable additional private sector investment in the cleanup and redevelopment of contaminated sites.
 

Site Specific Financial Incentives: Empire State Development Corporation should develop appropriate standards and criteria to encourage the cleanup and redevelopment of contaminated sites; incentives would be available only to non-responsible parties; higher priority would be given to sites which use Soil Category 1 (unrestricted) cleanup levels; and a windfall of profits for minimally contaminated properties could not be created.
 

Brownfield Redevelopment Area: Some urban areas have experienced industrialization dating back centuries and have sizable areas of contiguous brownfields or brownfields contained in a discrete area of the community. In these areas, an area-wide response strategy to the environmental and development challenges could be more efficient than addressing each site separately. Such a strategy would include:

Pre-Planning Grants: Funding would be made available to municipalities or community based organizations (with municipal sign-off) for pre-planning grants to develop basic information about the areas (e.g. boundaries, sites involved, use of groundwater, ownership of the site) and to designate Brownfield Redevelopment Areas. The State would sign-off on the designation.

Planning Grants: Funding available to municipalities to develop plans which include the strategy defining the end uses of the area once the property is remediated and revitalized, and what steps need to be taken to reach the proposed end uses. State acceptance of the plan is required.
 

Assessment Grants: Funding available to municipalities to conduct site assessments of properties contained in a designated area.

Implementation of the Plan: No new sources of funding are identified to implement the activities identified in the plan; however, existing State programs (which are identified in the report) could be used to fund these activities. Four phases of implementation are envisioned:
 

(1) Infrastructure: improvements to infrastructure (e.g. improving roads, installing water and sewer systems, bike and pedestrian walkways).
 

(2) Remediation: the cleanup of any contaminated sites.
 

(3) Demolition: knocking down old, dilapidated buildings -- the report recognizes the Governor's RePAIR initiative which is included in the Executive Budget proposal.
 

(4) Redevelopment: providing information and funding for projects to support redevelopment of these areas.