Ohio Environmental Law Blog : Ohio Environmental Lawyer & Attorney : Joseph Koncelik : Frantz Ward Law Firm : Environmental Regulation, Land Use, Compliance : Cleveland, Ohio

One of the issues that can complicate a clean up is if multiple environmental regulatory programs apply to the site.  Even the same type of contamination may be required to be addressed under different programs and different processes.

A prime example of this issue in Ohio is the disconnect between Ohio's Voluntary Action Program (VAP) and the Bureau of Underground Storage Tank Regulation (BUSTR) which applies to petroleum underground storage tanks (USTs).  Until recent legislation, a BUSTR regulated UST was totally ineligible for clean up under the VAP.

As a practical matter, the ineligibility of BUSTR tanks can cause significant delays on a clean up project.  Why?  Because the property owner typically wants to eliminate the BUSTR eligibility issue first by investigating and cleaning up USTs under BUSTR regulations before proceeding with the VAP. 

If you don't front load the BUSTR clean up and proceed with the VAP, you can be left with what is called a "Swiss Cheese" covenant upon completing the VAP- you get a legal release (covenant not to sue- CNS) from Ohio EPA that excludes all areas failing to complete a BUSTR required clean up.

In order to avoid the "Swiss Cheese" CNS, property owners complete their BUSTR Tier 1 investigations and Tier 2 clean up, if needed, under BUSTR regulations first before completing the VAP.  This often prolongs a clean up by months or even up to a year.  It also adds costs to the project.

Does this really make sense when both VAP  and BUSTR clean up standards have been determined to be protective of human health and the environment?

New Legislation Creates BUSTR Class C

In an attempt to partially remedy the delays caused by the conflict between BUSTR and VAP, House Bill 152 amended the law on June 30, 2011.  The new law is effective as of September 28th.

The law states that certain BUSTR USTs- Class C tanks- can be cleaned up under the VAP without completing a BUSTR clean up first. The tank has to be removed in accordance with BUSTR regulations, but the soil assessment and clean up can be performed under the VAP.

A Class C release is defined as a release of petroleum subject to BUSTR laws, where the responsible person for the release is determined by BUSTR to not be a viable person capable of undertaking or completing the required assessment and clean up.  In other words, the responsible party has no money to perform the BUSTR clean up.

BUSTR can determine a UST is a Class C if the following apply:

• responsible party is deceased or bankrupt
• a review of financial records demonstrates the responsible party is financially unable to assess and clean up the release

Based upon an Ohio EPA fact sheet on the BUSTR Class C designation, 121 sites have Class C releases already determined (as of July 12, 2011).  

For more information here is a link to Ohio EPA's web page discussing the Class C designation.

Class C Designation Doesn't Go Far Enough

As discussed above, the fact BUSTR clean up regulations can apply to a VAP clean up can result in significant delays, added costs and additional complexities.  Both clean up programs are protective of the environment.  So, why not allow all BUSTR regulated tanks to be closed and cleaned up pursuant to the VAP?

I suppose the State's answer is, in part, if a viable party responsible for the tanks exists they shouldn't be allowed off the hook for their BUSTR clean up obligations.  This would be rewarding a tank owner who ignored its legal obligations.

The only problem with that argument  is that the ineligibility of BUSTR tanks for the VAP really hurts the volunteer more than it does the responsible party.  The volunteer wants an expedited and cost effective clean up. The volunteer often doesn't want to chase down the responsible party before completing its clean up.  Forcing the volunteer to address the outstanding BUSTR obligations first before proceeding with the VAP results in both delays and added costs to the detriment of the volunteer.

Why not at least allow a volunteer to address BUSTR tanks under the VAP without having to demonstrate the tank's responsible party is not viable?  You could still exclude the responsible owner from using the VAP.  This would at least not reward the UST responsible party, but would greatly assist the volunteer.

(Photo:  South Carolina Department of Health and Environmental Control)

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In working on brownfield redevelopment projects, I find that addressing old underground storage tanks (USTs) or hazardous waste (RCRA) units can be one of the trickiest issues to address.

Why are these two issues tricky? Because they complicate the clean up process under Ohio's Voluntary Action Program (VAP). 

Due to the flexibility under the VAP and the fact it provides for more cost effective clean up options than other regulatory  programs, the VAP program is a common way to address environmental liabilities at brownfield sites.  In addition, Ohio's premier brownfield grant program- Clean Ohio- requires the grantee to complete a VAP clean up as part of the grant agreement. 

How do USTs and RCRA issues complicate the VAP and Clean Ohio process?

• Areas where USTs or RCRA units are located are ineligible for a VAP clean up until they are certified closed by the proper regulator
• Clean Ohio grant programs will not pay for clean up of USTs regulated by the State Fire Marshal Bureau of Underground Storage Tank Regulation (BUSTR)
• Clean Ohio grant programs significantly restrict the ability to uses funds to pay for hazardous waste unit (RCRA) closures

Understanding a Projects UST and RCRA Risks

Due to these limitations, property developers and companies need to front load in their analysis of a site's redevelopment potential the property's BUSTR and RCRA issues.  It is essential that a full blown examination of any outstanding UST and RCRA closure be performed as part of the Phase I/Phase II environmental assessment process. 

Key questions relatives to USTs include:

1. Are there BUSTR regulated USTs remaining on site?
2. Were BUSTR regulated USTs that were removed from the site properly closed in accordance with applicable regulations (i.e. did BUSTR issue a "No Further Action" letter)?
3. If "No Further Action" (NFAs) letters do not exist for tanks removed, what does BUSTR consider is needed to properly issue such a certification?
4. What will the costs be associated with receiving a NFA for each tank?
5. How will the process to obtain an NFA impact the timing of your redevelopment project?

Key question for RCRA units on-site can include:

1. What is the closure status of the RCRA unit?
2. What is the size of the unit?
3. What type of sampling is needed to determine the clean up requirements for the unit?
4. What will Ohio EPA require in terms of clean up for that unit?

USTs and RCRA issue do not impose a total barrier to development.  However, it is absolutely essential that in industrial property transactions and brownfield redevelopment projects that you gain a thorough understanding of the outstanding RCRA and UST obligations.

(Photo: Missouri Department of Natural Resources)

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U.S. EPA has released its fiscal year 2011 request for proposals (RFP) for brownfield assessment and clean up grants.   There is a relatively short window of opportunity to file your application- the deadline is October 15, 2010. 

[Click here for access to U.S. EPA's RFP for the brownfield assessment, clean up and revolving loan]

There is a total of $92.9 million available.   While the RFP allows for greater funding under certain circumstances, the basic limit is $200,000 per site for assessment or clean up.  EPA is required to expend 25% of the total amount available for sites contaminated with petroleum. 

Ohio is lucky to have one of the best state brownfield grant programs- Clean Ohio.  Often Clean Ohio is a better option than pursuing the U.S. EPA grant funding because U.S. EPA's program is a national competition.  However, there are certain circumstances that make the U.S. EPA brownfield grant program potentially a better option than Clean Ohio.

COAF Clean Up Funding Exhausted for this Fiscal Year

The Ohio Dept. of Development announced that it is no longer providing funding under the Clean Ohio Assistance Fund (COAF) for clean up of brownfields in fiscal year 2011.  However, assessment funding remains.

COAF can provide provide up to $750,000 in funding for clean up of brownfields.  Projects are evaluated and grants awarded on a rolling basis. 

Clean Ohio Revitalization Fund (CORF) is still available to fund clean up.  It provides up to $3 million in funding per site.  However, a 25% match is required and there are only two CORF rounds per year which typically are competitive.  Therefore, for smaller clean up projects looking for funding in the next year, U.S. EPA's program may be the better option.

Abandoned or Vacant Gas Stations

Under the Clean Ohio policies, removal and clean up of BUSTR (Bureau of Underground Storage Tank Regulation) regulated storage tanks and remediation of leaks from such tanks are not eligible costs under either the Clean Ohio Assistance Fund (COAF) or the Clean Ohio Revitalization Fund (CORF).

For local governments that are trying to deal with abandoned or vacant gas stations in their communities, the U.S. EPA brownfield grant may be their best option.  Communities can seek money for sampling of the site to determine if contamination exists. 

The fear of the unknown (whether contamination exists) acts as a strong deterrent to purchase and redevelopment by private parties.  Once sampling data has been generated, it removes one more impediment to purchase and redevelopment of the site.

Of course if sampling reveals contamination, this can act as a major obstacle to redevelopment.  However, communities can secure clean up funding for these sites under the U.S. EPA program.

Community Assessment Grants

U.S. EPA's program may also be better for communities that are interested in creating a brownfield inventory of various sites within their jurisdiction.  Also, U.S. EPA's program is great for local communities that want to create and fund their own local brownfield assessment programs. 

For example, in Northeast Ohio, the Northcoast Brownfield Coalition was created using U.S. EPA funding.  The Coalition is made up of  the Cuyahoga County Board of Commissioners, the City of Cleveland, the Cleveland-Cuyahoga Port Authority and the Northeast Ohio First Suburbs Consortium.  The Coalition makes provides local grant funding for brownfield projects in Northeast Ohio in amounts up to $30,000.

Below are the applicable limits for assessment grants under the U.S. EPA program:

(Photo:  everystockphoto peasap)

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