A preview of at least some of the proposed revisions to the New York State Department of Environmental Conservation’s (“NYSDEC”) regulations for the Brownfield Cleanup Program (“BCP”) (6 N.Y.C.R.R. Part 375) was revealed in May 2017, with official release anticipated later this year. Key changes are expected to include new program and tax credit eligibility requirements as well as clarifications to aspects of program implementation, all in an effort to provide more consistency across remedial programs and to generally update the BCP, now over a decade old. To what extent the revisions will provide clarity to BCP applicants remains to be seen once the changes are officially published. However, the preview reveals there is likely to be more questions and concerns than answers.
New eligibility requirements will likely include a formalized obligation for BCP applicants to conduct a search for potentially responsible parties (“PRPs”) before the application will be deemed complete. The scope and extent of PRP searches are expected to be outlined in the proposed regulations and will likely warrant close review as PRP searches can be time-consuming and costly.
The revised rules may allow sites listed as Class 2 on the NYSDEC’s Registry of Inactive Hazardous Waste Sites to be eligible if the site is owned by a volunteer and no viable PRP is found, a change from the current regime which deems Class 2 sites ineligible. Class 1 sites would remain ineligible under the revisions.
Other new requirements are expected to include formalization of the tangible property credit (“TPC”) as related to the source of contamination, such that if contamination is entering the site from an off-site source, TPC would not be available. TPC eligibility will also require a demonstration of economic hardship for sites in cities with a population of one million or more.
New deadlines are likely to be imposed for execution and recording of environmental easements. While previously the regulations contained no set timeframe, the NYSDEC intends to propose new rules that sites with institutional or engineering controls will be required to execute an environmental easement within 180 days of the commencement of the remedial design or at least three months prior to the anticipated date of the Certificate of Completion (“COC”).
A number of areas that have previously been the subject of uncertainty and debate are expected to be “clarified,” including waivers for environmental permits, the factors used to determine if the application will serve the public interest, transfer of COCs to successors-in-interest of the real property, mitigation of off-site impacts, contamination levels for eligibility purposes, contents of reports, and the NYSDEC’s authority to execute “cash out” consent orders.
While the cleanup tracks will generally remain the same, the NYSDEC may propose a “conditional Track 1” for volunteers that use long-term institutional or engineering controls for groundwater contamination, such that the volunteer will first receive a Track 2 cleanup, and if groundwater levels reach asymptotic levels within five years, then a Track 1 COC would be issued. However, that change would conflict with the clear statutory definition of Track 1 in Article 27 of the Environmental Conservation Law, which permits volunteers to qualify for Track 1 under these same circumstances without showing five years of asymptotic levels – certainly a change to look out for when the revisions are formally proposed.
Once the proposed revisions are published in the New York State Register, the minimum 45-day public comment period will commence to allow stakeholders to weigh in on the proposed changes. The NYSDEC anticipates at least two public hearings will be held as well as webinars to explain the proposed revisions and anticipated timeline. While the changes may provide more certainty in some respects, a close review will be warranted to evaluate the potential impact to new and existing projects to ensure that the program continues to drive redevelopment and sustainable economic growth across the state.