Briefing on New Legislation

August 26, 2003, Legislative Office Building, Albany, NY

The group included representatives of such groups as the International Council of Shopping Centers, the New York State Builders Association, the New York Conference of Mayors, the New York State Association of Towns and Counties, The Business Council of New York State, and New Partners for Community Revitalization, and such places as New York City, Westchester County, and Monroe County.  There were also several consultants and lawyers in the audience.

Also present were the key staffers who crafted the legislation: Richard Morse, Beth Meere, Deborah Peck-Kelleher, Darren Suarez.  So was the lead DEC architect of the bill, Dale Desnoyers, Director of the Division of Environmental Remediation.  The Governor's office was also represented--but they sat in the back of the room.

(Staff assistants arrived by 1:40 to set up the laptop computer and Power Point projector, but the young Senate attorney [Darren Suarez] who was to do most of the briefing did not arrive until about 2:20 p.m.)

Before launching into his presentation, Darren informed the group of some ground rules regarding the Q&A that was to follow the presentation.  The main point was that the briefing would present what the legislation says and would not get into questions of how it would be implemented.

The first slides dealt with earmarked funding, most of which would be financed by the issuance of bonds ($135 million for Superfund; $120 million for site investigations and remediation; $15 million for Technical Assistance Grants; $33 million for the Oil Spill program).  The final slides dealt with financial incentives (the brownfields redevelopment tax credit, including a credit for environmental remediation insurance; the new brownfield opportunity area program).  Most of the slides in between dealt with the new Title 14 brownfields program; the enhanced environmental restoration program for municipal brownfields; and the new (and long-overdue) lender and municipal liability exemptions and fiduciary liability cap.

Among the issues addressed during the Q&A were the following:

• Innocent landowners: Dale Desnoyers stated that provisions requiring current owners to be parties to cleanup agreements in order to benefit from a resulting liability release are not a departure from the current approach.  But the present DEC program doesn't treat an innocent current owner as a "responsible party" and specifically reserve the right to hold anyone but a VCP "applicant" liable for any cause of action arising from the presence of any hazardous waste at or emanating from a brownfield site.
   
• Non-profit corporations: Although not protected (as in predecessor Assembly and Senate bills) by a specific liability exemption, such entities would generally be protected as innocent current owners.
   
• Tax credits for environmental remediation insurance: It was asserted that tax credits for such insurance would effectively protect redevelopers and investors from the risks associated with invocation of the reopener associated with evolving standards.  But insurance carriers are likely to be very conservative and these kinds of risks are likely to be the subject of coverage exclusions.  Environmental remediation insurance products are also likely to be very expensive.
   
• Environmental easements:  It was explained that these would simply take the place of deed restrictions now in place under the administrative program to ensure that institutional and engineering controls are maintained as long as necessary.  It became clear during the questioning, however, that the provision requiring DEC sign-off before building permits could be issued or other land use approvals given by local governments for land subject to such easements could "bog down" DEC staff and/or delay local construction projects.  Under the legislation, it is not sufficient for the locality to examine the easement and simply certify that the building permit or other approval is consistent with the terms of the easement.  Written DEC approval is required.
   
• Completion of redevelopment within 3 years: A lot of anxiety was expressed over the reopener that seemingly allows a cleanup approval to be rescinded if a redeveloper does not substantially complete its revitalization project within 3 years.  It was explained that all that was really required was a demonstration of reasonable progress.
   
• Role of DOH: Dale foresees no change in the prominent role DEC has given to DOH in signing off on cleanup agreements and work plan submittals--despite the fact that the only DOH role expressly provided in the new legislation relates to the groundwater program.  Nor will DOH become a signatory  to cleanup agreements.  However, although not expressly subject to the new law's "best efforts" deadlines, Dale indicates that DOH is committed to providing its review comments expeditiously.
   
• Advisory Council: Dale made clear that DEC intends to develop the new lookup standards on its own--without the benefit of an external or internal Advisory Council (as provided for in earlier versions of the legislation).  In fact, Dale indicated that most of the relevant standards are already on the books.

A copy of the Power Point presentation used for the briefing could not be obtained for posting on this website.  As explained by Darren Suarez, any release of the briefing would have to be formally approved by the Senate Majority Leader and the Assembly Speaker.