The following articles are excepts from the newsletter:

Streamlined Permitting Alternatives, Tom Dyer, Amy L. Edwards and Jonna Leigh Stack, Holland & Knight LLP

The Clean Water Act: It Will Soon Arrive At Your Development Site, Deborah Brown

The Superfund Recycling Equity Act, Deborah Brown

 

STREAMLINED PERMITTING ALTERNATIVES

Tom Dyer, Amy L. Edwards and Jonna Leigh Stack
Holland & Knight LLP

Efficient - Consistent - Simplified Government Regulating - Coordinated - Flexible - Expedient Government Agencies

Unattainable most might say, but these are among the goals that regulators have been attempting to achieve, and have been achieving with some success, during the past few years. You may have heard about the various permitting processes in terms of "team permitting," "common-sense regulation," "expedited review process" or "streamlined permitting." States throughout the country are attempting to improve their communications with applicants, and the permit application process itself, by providing alternatives to the traditional permitting and regulatory processes.

Economic Development

Connecticut and Florida have created streamlined permitting programs that encourage new business and economic development

Connecticut's Smart Start Program

Connecticut's Smart Start Program allows businesses and individuals to apply for all permits at a single point with a single application and one payment. The program was developed in 1997 by the Office of Policy and Management and the Department of Economic and Community Development. Originally called the High Efficiency Licensing Program (HELP), this one-stop permitting program is now referred to as Smart Start. Smart Start is managed by the Connecticut Economic Resource Center, Inc., a private non-profit entity working under contract with the state. Touted as the gateway to business registry in Connecticut, it is an efficient, time-saving program designed to bring a business into full compliance with state laws quickly and easily.

The program began with a comprehensive directory and database of state licensing and permitting requirements, and the development of a website to allow applicants access to information and applications. In early 1998 the state developed a system of business identification numbers so that one-stop centers could track the progress of each license or permit that a business required.

With one phone call, new or existing businesses can receive information on the policies of each agency involved in their project and receive assistance completing their applications for each participating agency. Smart Start representatives help determine what licensing or registration requirements a business will need, and provide contacts who will help guide an applicant through the rest of the process. Smart Start is intended to minimize customer hassle and expedite review procedures.

Participating state agencies include the state departments of revenue service, labor, consumer protection, agriculture, and public health. Smart Start also provides initial services and then referral services to the Department of Environmental Protection and the Office of the Secretary of the state.

The Governor asserts that the program replaces the difficult and time consuming process previously endured by applicants, with a common sense approach and better customer service from the state. The traditional amount of time spent in red tape is eliminated so that time can be spent creating jobs and making businesses grow

Florida's Expedited Permitting Process

Florida's Expedited Permitting Process streamlines and coordinates review and issuance of permits for economic development projects. In 1996 the Governor's Office of Tourism, Trade, and Economic Development (OTTED) initiated the Expedited Permitting Process (Fla. Stat. Ch. 403.973 (1999)) to assist specific types of economic development projects. OTTED establishes regional permit action teams to coordinate and expedite review of permit applications. This process is intended to allow a quicker review of required permit applications, regional impact development orders and comprehensive land amendments.

Projects eligible for this process are those that offer job creation and high wages, strengthen and diversify the state's economy, and have been thoughtfully planned to take into consideration the protection of the state's environment. The result of this streamlining helps applicants avoid delays associated with applying for separate permits from multiple local and state permitting offices. Participating agencies include the state departments of community affairs, agriculture and consumer services, environmental protection, labor and employment security, transportation, Florida Game and Fresh Water Fish Commission, state regional planning councils and water management districts, and local governments.

The first step is OTTED's assembly of a regional permit action team to review a project. The applicant introduces its project at a pre-application meeting with a team of representatives from all relevant agencies. The business and its consultants learn which permits will be required and what issues the regulatory staff may address in its review. One agency takes the lead in coordinating the requests for information after a collaborative effort by the permit staff to limit duplicative requests. These permit applications are given priority over others to the extent feasible to assist in expediting the process. Local governments may voluntarily join in the process by participating informally or by entering into a memorandum of agreement.

While the agencies may not change existing nonprocedural standards, the legislation provides four special standards that are not available to other projects:

1. Local comprehensive plan amendments outside of the regular biannual plan amendment cycle that can save up to six months;
2. Exemption from Development of Regional Impact review for projects meeting certain criteria;
3. No requirement to await interstate highway construction for development purposes, although a "fair share" mitigation payment may be assessed for traffic impacts;
4. Consolidation of challenges to state and local government action, which may save three to six months over the normal administrative hearing schedule.

In addition, the legislation mandates that OTTED and other state agencies provide technical assistance in preparing permit applications and local comprehensive land amendments for rural counties.

The Office of Program Policy and Analysis and Government Accountability concluded that the first two projects that had participated in this process obtained their permits more quickly than if their applications had been traditionally processed, and that time spent in joint meetings was adequately compensated for by the time saved in reduced requests for information from the applicant. They also found that the cost to operate the process was reasonable, and that final agency permit conditions met or exceeded environmental and transportation standards.

Environmental Protection

The coordinated permitting concept has been utilized primarily by states attempting to simplify the numerous environmental regulations affecting businesses. Whether applied throughout the state environmental departments, or within only a particular division, the streamlining permit idea is catching on

Florida's Department of Environmental Protection (FDEP)

The FDEP is using "common-sense" regulation in the form of team permitting as part of its Ecosystem Management Initiative. (Fla. Stat. Ch. 403.075 (1999).) FDEP developed the Ecosystem Management Initiative in 1993 with a focus on three goals: to provide better protection for the state's ecosystems, to establish an agency culture that supports a systems approach to environmental protection, and to encourage Florida's citizens to adopt a conservation ethic and sustainable lifestyle. The Ecosystem Management concept led to regulatory reform legislation in 1997 authorizing the FDEP to enter into ecosystem management agreements (team permits) with other state agencies and regulated entities to coordinate all requirements and timetables that apply to a regulated activity (Fla. Stat. Ch. 403.0752 (1999)).

An advisory team consisting of representatives from the regulatory agencies involved with the project works with FDEP to develop the agreement and streamline the process for required permits. FDEP acts as the lead agency responsible for providing notification to all interested parties. The process is open to third parties, local governments and other agencies. With the participation of all permitting agencies, permit applications are reviewed for repetition, and duplicative items are consolidated. The team also coordinates all requests for additional information. Incentives for applicant participation include:

1. Coordinated regulatory contact;
2. Flexible permitting process;
3. Expedited permitting process;
4. Alternative monitoring and reporting requirements;
5. Coordinated permitting and inspections;
6. Cooperative inspections conducive for informal resolution of compliance issues before enforcement action;
7. Authorization for alternative means of environmental protection so long as the end result is equal or less of a risk to human health and the environment as compared to traditional permitting.

Although these agreements are entirely voluntary, they may be either binding or non-binding. Terms of the agreement require:

1. The project resulting in a reduction of overall risks to human health and the environment as compared to activities conducted without an agreement;
2. No granting by the government of exemptions or variances except those that are available under existing rules and laws;

   3) Termination of the agreement by the Department if the applicant violates the terms of the agreement, if it is determined that the Net Ecosystem Benefit (NEB) cannot be achieved, or if the applicant is experiencing an economic hardship or competitive disadvantage as a result of the agreement.

In exchange for significant time and cost savings provided by the team process and ecosystem management agreement, applicants agree to meet all applicable standards and criteria set by law and to provide a NEB to the affected ecosystem. These are benefits gained from the project that exceed minimum ordinary permitting thresholds. Although the average "team permitting process" focuses on permit application questions and resolution, it doesn't necessarily conclude with an agreement and development of an environmental management plan. While a seemingly elusive definition, the vagueness allows the team to be creative and flexible, as opposed to the traditional way of doing business, in which the applicant and the department are locked in by strict rules. NEBs are discussed in great detail within the group with each agency representative providing input as to its acceptability. A subject of great discussion appears to be drawing the line between traditionally required mitigation and the NEB being above and beyond that requirement.

An important aspect of this process is that, to date, it has eliminated third party challenges. Since third parties (environmental groups) are at the table, as long as they stay engaged, their concerns are usually addressed. This is a major benefit to the applicant, who may feel more comfortable investing in NEBs than legal fees. The environment is the focus of financial resources instead of the legal process

New Jersey's Department of Environmental Protection (NJDEP)

The NJDEP established the Office of Pollution Coordination ("Office") in 1996. Its goal was to improve service to permit applicants by offering better communication, coordinating all permits required for a project, and identifying pollution prevention opportunities early in the permit process. Through implementation of its ONE STOP process, the Office is able to work closely with the regulated community and assure that permits necessary for each project result in additional environmental benefits.

ONE STOP offers a permittee the opportunity to communicate with a single point of contact, a Team Leader. The Team Leader facilitates identification of all permits required for development, for significant facility start-up, or for expansion, and maintains consistent contact throughout the process of obtaining necessary permits. The Team Leader works with a project team of permitting and compliance enforcement staff to assist proposed and existing facilities with their environmental responsibilities. The team reviews permits, identifies any additional pollution prevention measures that may reduce costs and improve the efficiency of the facility, and provides compliance assistance.

Benefits of the program include:

1. Thorough identification of all regulatory requirements;
2. Coordination among the various NJDEP programs;
3. Improved sequencing of major permit and construction time lines, and of public comment periods;
4. More opportunities than in the traditional process to integrate pollution prevention concepts within a project.

An environmental overview document is prepared after the permits are issued. It summarizes each facility's requirements for compliance monitoring, record keeping, and reporting according to a designated compliance schedule

Mississippi's Department of Environmental Quality (MDEQ)

The MDEQ has also developed a One Stop Permitting program to shorten the time required to obtain permits. Previously processing involved four separate divisions (Air, Surface Water, Groundwater, and Hazardous Waste), but now an applicant contacts the Office of Pollution Control (OPC). A Senior Permit Manager (SPM) is responsible for all permit decisions related to a particular facility, whether coordinating a team of permit writers or handling the required permits directly.

Effective communication during a pre-application process provides applicants with guidance on alternatives to the normal facility-specific permits. Alternatives include general permits and options for reduced permitting requirements based on implementation of pollution prevention into the facility's design. After the pre-application communication process, the applicant signs a non-enforceable agreement that specifies its obligations. The agreement also specifies MDEQ's commitments regarding timeliness for the permitting process, contingent upon the applicant meeting its obligations. This agreement can limit financial uncertainties related to the permitting process.

The signed agreement becomes the basis for a customized permit application prepared by the SPM. Advantages of the customized application include taking maximum benefit of general permits and incentives for pollution prevention. The advantages help to:

1. Reduce regulatory burden;
2. Make more efficient use of OPC staff;
3. Encourage more environmentally protective practices.

OPC has been researching development of an electronic information management system to allow for electronic submittal of permit applications via MDEQ's Internet home page. OPC has also been developing regulatory incentives to offer applicants who agree to build pollution prevention into their permitted activities. Another manner in which shortening the time required to obtain permits has been addressed involves notifying potentially affected members of the public. Promoting public input early in the application review process addresses public concerns while review is being conducted and permits are being drafted.

MDEQ expects this alternative permitting process to achieve more protective permits that also allow for greater flexibility and potential cost savings for the applicant.

Oklahoma Department of Environmental Quality (ODEQ)

The ODEQ has been trying to streamline, unify and simply its regulatory functions since 1993 with SUPER, the Simplified Uniform Program for Environmental Protection. Instead of compartmentalizing the traditional elements of the permit process, i.e., working on them one piece at a time, SUPER encompasses all elements of environmental programs including laws and rules, permits, inspections and reporting, enforcement, and public information.

ODEQ's primary goal is to make the agency's functions more easily understood. ODEQ has applied SUPER in a variety of permit areas, including water quality, non-hazardous industrial waste, and air quality. ODEQ's water program allows more lagoons than any other type of treatment, and has a joint project with EPA Region 6 to develop a self-audit form, a reference guide of best management practices, and a video showing what compliance and noncompliance look like for lagoons. Issuance of approvals to dispose of non-hazardous industrial waste is the most frequent permitting activity in ODEQ's waste program. SUPER is developing ways to eliminate the need for an individual approval so long as standard practices are followed. ODEQ's air program has developed an automated permit application for certain categories of permittees, enabling them to utilize a "check the blank" application form and computer program to do most of the permit drafting.

ODEQ asserts the SUPER process will lead to higher levels of compliance because the processes are more understandable and ODEQ is able to use enforcement resources more efficiently.

California's Environmental Protection Agency (Cal/EPA)

Cal/EPA has attempted to make environmental permitting as simple as possible to understand and follow by utilizing an Internet information system called California Government: On-line to Desktops (CalGOLD). The state's network of 13 Cal/EPA Permit Assistance Centers created CalGOLD to help businesses identify needed permits.

The database contains permits and other requirements of agencies at all levels of government. It provides customized responses to businesses' initial permit service requests. A customer selects the type of business and geographic location and is then provided a list of all permits required with contacts and application forms. Some applications can be processed through links to an agency's Internet web page. The program helps Cal/EPA partner with local and regional agencies in the state for greater coordination of multi-agency permitting processes by allowing them to link to CalGOLD from their own Internet sites.

Cal/EPA has noted that the individual laws and regulations developed to protect California's environment as a whole have produced a complex and confusing compliance process. In the face of uncertainty in knowing which level of government regulates a particular environmental aspect of their business, applicants can access CalGOLD to streamline their travel through the regulatory maze

Indiana's Department of Environmental Management (IDEM)

The IDEM has been working since 1996 with interested parties to restructure, simplify and clarify the permitting requirements that apply to certain new or modified sources of air pollution. To streamline permitting, IDEM also utilizes computer technology, which has helped improve consistency and efficiency in review of air permits in the Office of Air Management (OAM). OAM has identified three key features that help with streamlining:

1. A data capture component has been customized for the data requirements of OAM's permitting program to simplify the data entry tasks;
2. The system interprets the data to determine what permit conditions should be included in the applicant's permit based on applicable state and federal rules;
3. On the basis of the data evaluation, the system assembles a draft permit document containing required rule cites and permit conditions.

Permit reviewers may then detail their documents to address source-specific issues.

The program is currently utilized primarily in tracking and management of permit types, and in the generation of source-specific operating agreements. Although the system is capable of generating all types of permits, an expanded use of the system in the OAM program has not been initiated due to changes in state permit review rules and development of new software and a new database. The division of Information Technology for IDEM is in the process of utilizing limited one-stop permitting process for applicants while these issues are being addressed

Conclusion

While many states appear to be addressing coordination and streamlining of the licensing and permitting process, particularly in the environmental area, it appears that only Florida has actually taken this concept to the legislature. Few states seem to have taken the streamlined permitting concept beyond state environmental departments, but the environmental area certainly is an area in which the applicant would generally lose the most time and money while maneuvering through the quagmire of regulations. The environmental area also lends itself to a streamlined process that would both provide an applicant with time and financial incentives while also improving public health and ecological benefits.

 

THE CLEAN WATER ACT: IT WILL SOON ARRIVE AT YOUR DEVELOPMENT SITE

Deborah Brown

Deborah Brown is the Director for Environmental Policy at Boston College, and a supervisory attorney for the United States Environmental Protection Agency, New England. The statements made in this article have not been reviewed from a policy standpoint, and do not necessarily express any official position of the EPA.

The National Pollutant Discharge Elimination System (NPDES) Permit process has traditionally focused on major industries and municipal practices. A product of the Federal Water Pollution Control Act (FWPCA) or the Clean Water Act (CWA), Congress directed the Environmental Protection Agency and states to require that industries and municipalities that directly discharge pollutants into streams, lakes or an ocean have a permit. (Section 301 of the CWA, 33 U.S.C. Section 1311.) But what is the significance of the NPDES permit process to redevelopment? "Polluted storm water runoff is a leading cause of impairment to the nearly 40 percent of surveyed U.S. water bodies which do not meet water quality standards. Further, construction site sediment run-off which amounts to anywhere between 20 to 150 tons/acre/year, represents the single largest cause of poor water quality in rivers and the third largest cause of impaired water quality in lakes. Over land or via storm sewer systems, polluted runoff is discharged, often untreated, directly into local water bodies. When left uncontrolled, this water pollution can result in the destruction of fish, wildlife, and aquatic life habitats; a loss in aesthetic value; and threats to public health due to contaminated food, drinking water supplies, and recreational waterways." http://www.epa.gov/owmitnet/sw/index.htm#program.

EPA has employed a two-phased approach to addressing point source run-off. The first Phase is called the Storm Water Phase I Rule, which was passed in 1987, and the rules promulgated in 1990. 40 CFR 122.26(b)(14). Also see http://www.epa.gov/owmitnet/sw/construction/index.htm. Phase I regulates medium and large municipal separate storm sewer systems with populations of greater than 100,000 and eleven categories of industrial activity. Industrial activities include construction activities that impact five or more acres of land. "Any construction activity, including grading, clearing, excavation, or other earth moving process may require an NPDES storm water permit for construction under the NPDES Storm Water Program." 40 CFR 122.26(b)(14)(x).

In 1992 the Ninth Circuit remanded the provisions that provided for the five acre standard in the Phase I Rule. (NRDC v. EPA, 966 F2d 1292 (9^th Cir. 1992)). Based on the ruling, EPA began researching the legitimacy of the Phase I construction threshold. The Report To Congress On Phase II Storm Water Regulations summarizes some point source findings. United States Environmental Protection Agency, Office of Water, EPA 833-R-99-001, October 1999. The Report indicates that excluding construction below one acre from coverage under the Phase II Rule would exclude a significant percentage of the sites from automatic coverage while only excluding a small percentage of the total acreage. The Phase I and II Rules, together, address 97% of the national disturbed acreage, yet will regulate only 75.3% of the construction starts. The remaining construction starts each occur on less than one acre of disturbed land, and together constitute only 2.5% of the total acreage disturbed by construction. These underlying findings in the Report, in part, moved EPA to promulgate regulations known as the Storm Water Phase II Rule. See 64 Fed. Reg. 68722 (December 8, 1999), "National Pollutant Discharge Elimination System-Regulations for Revisions of the Water Pollution Control Program Addressing Storm Water Discharges." This Rule expands the permit requirements for storm sewer systems, moves to a best management practices (BMP) approach, and seeks to control the impacts of development. This article will focus solely on the Phase II construction and post-construction control and management requirements. Developers considering projects in watersheds or abutting waterfront property may prove to be the test cases for the Phase II Rule.

Phase II Rule (the "Rule")

On October 29, 1999, EPA Administrator Carol Browner signed the Phase II Rule. The Rule does not use the industry activity analysis employed by the Phase I Rule. Instead, EPA relies on Section 402(p)(6) of the CWA, 33 USC 1343(p)(6), which provides for greater regulatory flexibility and allows EPA to, as a legal matter, treat small construction site discharges as something other than an "industrial activity." Construction activity impacting equal to greater than one acre and less than five acres of land would require a NPDES storm water permit, and use of best management practices. Construction work affecting less than one acre would be subject to a permit, if it is part of a larger common plan of development or sale disturbing more than one acre.

Note: Any land-disturbing activity occurring as part of a large common plan of development (5 acres or greater) must obtain permit coverage until all intended construction has been completed. For example:

"A developer plans to clear and grade a ten-acre site for a new subdivision of single family homes. The developer (and his contractor) obtains permit coverage for their activities. Upon clearing and grading the site, the developer sells twenty lots of a half-acre each to individual homebuilders. Because he is no longer responsible for the site (i.e., he has sold all of his interest in the site), the developer can terminate his coverage. The new operator of each 1/2 acre site must then obtain permit coverage, regardless of the fact that the operator will not disturb greater than five acres. This requirement remains in effect regardless of any lapse in time between the initial grading or clearing and the actual construction of the home." (http://www.epa.gov/owminet/sw/construction/index.htm#who.)

A description of a National Construction General Permit for Storm Water can be found at 63 FR 7898 (February 14, 1998). It applies only in areas of EPA Regions 1,2,3,5,7,8,9, and 10. Regions 4 and 6 use the documents entitled "Application - Notice of Intent (NOI) for Storm Water Discharges Associated with Construction Activity Termination, and Notice of Termination (NOT) of Coverage Under NPDES General Permit for Storm Water Discharges Associated with Industrial Activity (including construction)."

EPA has suggested that the Rule require that the construction permits describe the site and certify that the activity will not impact endangered or threatened species. The developer will produce and implement a pollution prevention plan, based on best management practices. And, the developer will submit a Notice of Termination when the site has complied with the permit requirements, there is no longer storm water run-off, or the site has a new operator. In addition to complying with federal laws, the firm may also be subject to state law and most certainly local permitting requirements.

Site Assessment and Best Management Practices

Rather than relying on a rigid standard that may not reflect industry innovations, Phase II allows contractors to use best management practices. Before determining which practices are most relevant, counsel should encourage the operator to undertake a storm water contamination assessment. A storm water contamination assessment involves inventorying materials to determine whether they may contribute to storm water pollution. Next, the operator should evaluate work practices and establish which construction activities may result in storm water run-off.

Beyond the assessment, the operator should determine how to remedy the storm water run-off. Some examples of best management practices include infiltration such as trenches, basins or porous pavement; filtration such as vegetated filter strips, swales, sand filters and filtration basins; detention such as dry and wet ponds, wetlands, oil/grit separators and catch basins; and non-structural BMPs such as land use, lawn maintenance, street sweeping, road de-icing and maintenance. (http://www.asce.org/peta/tech/mastbib1.html.) The assessment may prove to be expensive. However, the costs associated with defending and complying with an order may be substantially higher. Dust is perhaps one of the most common sources of storm water pollution and has some of the most inexpensive and noncontroversial control techniques. ("Storm Water Management Fact Sheet Dust Control," U.S. EPA, EPA 832-F-99-003, September 1999)

Following the assessment and remedy evaluation, the operator should review the findings and determine whether the remedies proved effective. Techniques like posting placards, describing and requiring best practices to all strata of the work force, and verifying the existence of signs and sound practices can substantially reduce storm water run off. In order to ensure that these steps are incorporated into the way business is done at a site, the operator, or his or her designee, should walk the site at the close of each day's operations, and see that the fugitive dust emissions, solvent or aggregate wastes have been detected and corrected.

Permit Waivers

The Storm Water Phase II Proposed Rule does provide for waivers of certain construction activities disturbing less than five acres, but not less than 5 acres if part of a common plan of development or sale; or if designated for permit coverage by the NPDES permitting authority under three circumstances. Along with the exceptions described in the previous sentence, waivers are permitted for sites of less than 5 acres when the operator can certify that there is a "low predicted rainfall potential (i.e., activity occurs during a negligible rainfall period), where the rainfall erosivity factor 'R' in the Revised Universal Soil Loss Equation (RUSLE)) would be less than 2 during the period of construction activity. Low predicted soil loss - on a case-by-case basis -where the annual soil loss for a site would be less than 2 tons/acre/year as determined using RUSLE, assuming the constants of no ground cover and no runoff controls. A determination that storm water controls are not necessary based on either:

(A) wasteload allocations that are part of Total Maximum Daily Loads (TMDLs) that address the pollutants of concern for construction activities; or (B) a comprehensive watershed plan, implemented for the receiving water body, that includes the equivalents of TMDLs and addresses the pollutants of concern for construction activities." See http://www.epa.gov/owmitnet/sw/construction/below5ac/index.htm#q2. Counsel does not need to make a fast break to his or her client's construction site at by the close of business. EPA has produced an implementation schedule, which is described below.

Implementation Schedule

December 8, 1999 EPA published the final Phase II Rule in the Federal Register, with Conditional No Exposure Exclusion option available 60 days later for facilities for which EPA is the permitting authority.

October 2000 (1 year from the date of signature of the final Rule): EPA is obligated to issue a menu of recommended BMPs for regulated small MS4s.

October 2001 (1 year after the issuance of the menu of BMPs): EPA is obligated to issue guidance on the development of measurable goals for regulated small MS4s.

December 8, 2002 (3 years from the date of publication of the final Rule): The NPDES permitting authorities would be required to issue general permits for Phase II regulated small MS4s and small (less than 5 acre) construction activity.

March 10, 2003 (3 years and 90 days from the date of publication of the final Rule, or by the time specified in the permit): Operators of Phase II regulated small MS4s and small construction activity would be required to obtain permit coverage. By the end of their first permit terms (typically 5 years), operators of regulated small MS4s would have to fully implement their storm water management programs.

Conclusion

Operators involved in large commercial and industrial developments have had to comply with the CWA for years. Thus the Rule should not cause great alarm among experienced developers and their counsel. Simply, the Phase II Rule requires smaller operators to comply with the CWA, much like large sites have had to do. Counsel should review the regulations and future guidance to ensure that his or her client begins to establish an infrastructure to comply with the Phase II Rule and check to determine the extent to which some states may be changing their storm water requirements.

 

THE SUPERFUND RECYCLING EQUITY ACT

Deborah Brown

Deborah Brown is the supervisory attorney for the United States Environmental Protection Agency, New England and the director for Environmental Policy at Boston College. The statements made in this article are made by Ms. Brown in her individual capacity, and do not necessarily represent the view of the United States Environmental Protection Agency.

On December 2, 1999, President William Jefferson Clinton signed the Superfund Recycling Equity Act (S1528), an amendment to the 1980 Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), which is part of the Intellectual Property and Communications Omnibus Reform Act of 1999. Introduced by Senators Lott, Daschle, Chafee, Lincoln, Warner, and Baucus (for a complete list of sponsors See http://thomas.loc.gov/cgi-bin/query/D?r106:1:./temp/~r106pU0CHM), the bill's authors described their intent in terms of "remove[ing] from the liability loop those who collect and ship recyclables to a third party site. The bill is not intended to plow new Superfund ground, nor is it intended to revamp existing Superfund law." See Congressional Record, Page: S13086, Superfund Recycling Act. http://thomas.loc.gov/cgi-bin/query/D?r106:1:./temp/~r1063LTBso.

Senator Daschle takes some exception both to the manner in which Congress passed the legislation, as well as part of its intent. The Senator asserts that "the recycling amendments were passed as part of the end of the year appropriations process and did not have the benefit of hearings, debates, or substantive committee consideration during the 106^th legislative session. Thus, there is no conference report, and there are no committee reports or hearing transcripts, to guide interpretation of the bill." Senator Daschle does, however, agree that the 103^rd Congress had created recycling amendments that had involved a great deal of public scrutiny. See the 103^rd Congress' S. 1834 as well as discussions by the Senate Environment and Public Works Committee, the House Energy and Commerce Committee and the House Public Works and Transportation Committee.

Despite Senator Daschle's correction to the record, Senator Lott asserts that the Superfund Recycling Equity Act (the "Act") does more, and that its intent is "(1) to promote the reuse and recycling of scrap material in furtherance of the goals of waste minimization and natural resource conservation while protecting human health and the environment; (2) to create greater equity in the statutory treatment of recycled versus virgin materials; and (3) to remove the disincentives and impediments to recycling created as an unintended consequence of the 1980 Superfund liability provisions." S1528, Section (a) Purposes. One might also assert that in addition to the purposes described above, the Act also aligns CERCLA with the Resource Conservation Recovery Act's (RCRA's) recycling provisions. See 40 CFR Sections 261.1; 262.2; 261.6; and Part 266.

While the Act appears to have been passed under a cloak of secrecy, the approach may not be demonstrably different from the way in which CERCLA and RCRA became law. Many within EPA appear to have been caught off guard by the legislation. See Asking the Wrong Questions, From Nixon to Clinton, Landy, Oxford Press, 1994 for an interesting and somewhat cynical description of how CERCLA and RCRA became law.

Congress defines "recycling" in the Act as recycling such materials as scrap paper, scrap plastic, scrap glass, scrap textiles, scrap rubber (other than whole tires), scrap metal, spent lead-acid, spent nickel-cadmium, or other spent batteries, as well as minor amounts of material incident to or adhering to the scrap material as a result of its normal and customary use prior to becoming scrap. ((Shipping containers of a capacity from 30 liters to 3,000 liters, whether intact or not, having any hazardous substance (but not metal bits or pieces of a hazardous substance that form an integral part of the container) contained in or adhering thereto; or polychlorinated biphenyls at a concentration of 50 ppb are subject to the Act.)) Congress also effectively created three categories of recyclables: scrap paper, scrap plastic, scrap glass, scrap textiles, scrap rubber (other than whole tires) in one category, and scrap metal and lead-acid batteries in the second category.

Recyclers of scrap paper, scrap plastic, scrap glass, scrap textiles and scrap rubber (other than whole tires) shall not be liable under Section 107(a)(3) or 107(a)(4) of CERCLA with respect to the material, if: the arranger is able to demonstrate by a preponderance of the evidence that the material met a commercial specification grade, a market existed for the recyclable material, a substantial portion of the recyclable material was made available for use as feedstock for the manufacture of a new saleable product, and the recyclable material could have been a replacement or substitute for a virgin raw material.

Moreover, the arranger must exercise "reasonable care" by performing due diligence with respect to the firm receiving the recyclables. (Section 127(c)(6).). When determining whether an arranger used reasonable care, EPA and parties seeking contribution will evaluate "the price paid in the recycling transaction; the ability of the person to detect the nature of the consuming facility's operations concerning its handling, processing, reclamation, or other management activities associated with recyclable material; and the result of inquiries made to the appropriate Federal, State, or local environmental agency (or agencies) regarding the consuming facility's past and current compliance with substantive (not procedural or administrative) provisions of any Federal, State, or local environmental law or regulation, or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, storage, or other management activities associated with the recyclable material. A requirement to obtain a permit applicable to the handling, processing, reclamation, or other management activity associated with the recyclable materials is deemed to be a substantive provision."

The arranger must demonstrate that the facility where the recyclable material was handled, processed, claimed, or otherwise managed by another person was in compliance with substantive (not procedural or administrative) provisions of any Federal, State, or local environmental law or regulation, or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, storage, or other management activities associated with recyclable material. (Section 127(c)(5).) It is unclear how one would distinguish between substantive and procedural or administrative provisions. A narrow interpretation of this language could be construed to limit EPA's ability to enforce its RCRA's base program and state solid waste provisions, because many are procedural and administrative in nature.

The scrap metal requirements are similar to the scrap paper, scrap plastic, scrap glass, scrap textiles, and scrap rubber requirements found at Section 127(c), with two additions: A person arranging for scrap metal recycling must also prove by a preponderance of the evidence that "the person was in compliance with any applicable regulations or standards regarding the storage, transport, management, or other activities associated with the recycling of scrap metal that the Administrator promulgates under the Solid Waste Disposal Act subsequent to the enactment of this section and with regard to transactions occurring after the effective date of such regulations or standards; and the person did not melt the scrap metal prior to the transaction" (Section 127(d)(1)(B) and (C)). For purposes of this subsection, the term "scrap metal" means bits and pieces of metal parts (e.g., bars, turnings, rods, sheets, wire) or metal pieces that may be combined together with bolts or soldering (e.g., radiators, scrap automobiles, railroad box cars), which when worn or superfluous can be recycled, except for scrap metals that the Administrator excludes from this definition by regulation. Melting scrap metal does not include the thermal separation of 2 or more materials due to differences in their melting points (referred to as "sweating").

Spent lead-acid batteries, spent nickel-cadmium batteries, and other spent batteries represent the third recycling category created by the legislation. (Section 127(e).) (RCRA also provides an exemption for spent lead-acid reclamation, waste-derived fuels from refining processes, reclaimed industrial ethyl alcohol, certain waste-derived fuels and oils that are not refined, oils recovered from petroleum refining hazardous wastes, petroleum coke produced from petroleum refining hazardous waste containing oil under limited circumstances, and mercury-containing lamps.) Again, arrangers must demonstrate by a preponderance of the evidence that the material met a commercial specification grade; a market existed for the recyclable material; a substantial portion of the recyclable material was made available for use as feedstock for the manufacture of a new saleable product; the recyclable material could have been a replacement or substitute for a virgin raw material; that the person did not recover valuable components of such batteries; and the person was in compliance with Federal environmental regulations or standards regarding the storage, transport, management, or other activities associated with the recycling of spent batteries, and the person was in compliance with applicable regulations or standards or any amendments.

Persons arranging for the recycling of scrap paper, scrap plastic, scrap glass, scrap textiles, scrap rubber (other than whole tires), scrap metal, or spent lead-acid, spent nickel-cadmium, and other spent batteries will not qualify for the exemptions described above if "the person had an objectively reasonable basis to believe at the time of the recycling transaction (i) that the recyclable material would not be recycled; (ii) that the recyclable material would be burned as fuel, or for energy recovery or incineration; or (iii) for transactions occurring before 90 days after the date of the enactment of this section, that the consuming facility was not in compliance with a substantive (not procedural or administrative) provision of any Federal, State, or local environmental law or regulation, or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, or other management activities associated with the recyclable material." (Section 127(f)(2).) "An objectively reasonable basis for belief shall be determined using criteria that include, but are not limited to, the size of the person's business, customary industry practices (including customary industry practices current at the time of the recycling transaction designed to minimize, through source control, contamination of the recyclable material by hazardous substances), the price paid in the recycling transaction, and the ability of the person to detect the nature of the consuming facility's operations concerning its handling, processing, reclamation, or other management activities associated with the recyclable material." In addition, the exemption will not apply if "the person had reason to believe that hazardous substances had been added to the recyclable material for purposes other than processing for recycling; the person failed to exercise reasonable care with respect to the management and handling of the recyclable material (including adhering to customary industry practices current at the time of the recycling transaction designed to minimize, through source control, contamination of the recyclable material by hazardous substances); or with respect to any item of a recyclable material, the item contained polychlorinated biphenyls at a concentration in excess of 50 parts per million or any new standard promulgated pursuant to applicable Federal laws." (Section 127(f)(1))

Counsel interested in recycling issues at CERCLA sites should review "Handbook Recycling and Reuse of Material Found on Superfund Sites." See Handbook Recycling and Reuse of Material Found on Superfund Sites, United States Environmental Protection Agency, EPA/625/R-94-004, September 1994. While the Handbook will not clarify legal issues, it will describe numerous recycling and reuse technology strategies based on the contaminant and media at Superfund sites.

While Congress' implied intent may limit liability for some, the Act should not be perceived as a liability loophole panacea. The law does not affect "any concluded judicial or administrative action or any pending judicial action initiated by the United States prior to enactment of this section. In the event that a person brings an action for contribution against a person found to be not liable, then the moving party will be liable for the reasonable costs of defending against the action including attorney's fees and expert witness fees. Finally, to the extent that a party seeks to use provisions found in this act to shield them from RCRA liability, the act seems to infer that one will not be able to do so." (Section 127(i), (j) and (k). The Act also does not affect any defenses or liabilities of non-recyclers or create a presumption of liability against such a person.

There are numerous issues that the legislation does not address, that will most likely be resolved during the regulatory process or by the courts. For example, the Act does not fully describe sham recycling. The regulated community may still be left to decipher the compliance distinctions between RCRA and CERCLA, especially in an ARARS context. Moreover, how does one distinguish between a substantive and procedural issue? Most lawyers can recall situations when a procedural issue quickly developed substantive implications.