Creates New Regulatory Program with a Release-Based Approach to Remediation

During Special Sessions held last week, the General Assembly passed House Bill No. 7001, which Governor Lamont signed into law, authorizing the development of a release-based remediation program for the State, to eventually replace the Connecticut Transfer Act, C.G.S. §§ 22a-134 et seq. (the “Transfer Act”). HB 7001 also included some significant changes to the Transfer Act itself, which will be immediately applicable.

The Transfer Act was enacted in 1985 and requires investigation and remediation of certain properties deemed likely to be polluted at the time such properties are transferred. It applies to the sale of properties or businesses where particular amounts of hazardous waste were generated, or where certain activities took place, such as dry cleaning and auto body repair. When applicable, the Transfer Act imposes comprehensive but often time-consuming, and costly obligations for proving a property is “clean” per State standards.

With a very low overall rate of success in completing clean-ups of contaminated properties over the past several decades, and a significant unintended effect of inhibiting real estate transactions and depressing economic development in the State, the Connecticut Departments of Energy and Environmental Protection (“CT DEEP”) and Economic and Community Development recognized the need to shift away from a “property-transfer” remediation approach.

The passage of HB 7001 is aimed at doing just that. The law establishes the framework to eventually replace the Transfer Act with a “release-based” remediation scheme. The new law requires CT DEEP to adopt detailed regulations necessary to establish the new program. The date on which regulations are adopted is when the new program will become effective. Until these regulations are in place, which may take a few years, the Transfer Act will remain effective; once the regulations are adopted, the Transfer Act will “sunset” and only those properties already in the Transfer Act program as of that date will remain subject to its requirements. Similarly, properties that are in a State Brownfield program at the time the regulations are adopted or elect to take advantage of the various Brownfield Programs, will remain in such programs.

Once the new program is effective, investigation and remediation obligations will no longer be tied specifically to property conveyances and singled-out types of properties. Instead the obligation on all persons will be to clean-up contamination if and when they discover it. Importantly, such “discovery” must be based on new information gathered after the effective date of the new program.

While much detail will be fleshed out in the coming regulations, HB 7001 will significantly alter environmental remediation obligations in the State – property owners will no longer have to “prove the negative” (that there is no pollution) with burdensome and costly site-wide investigations that often-times yield limited environmental benefit; instead the focus of remediation efforts will be release-specific, which is expected to increase overall clean-ups in the State.

The new law provides certain guidance for the official regulations, which at a minimum will include tiers and time-frames for reporting, uniform remediation standards with risk-based alternatives, supervision and verification requirements, and program fees. The law also includes violations/non-compliance provisions, penalties, and CT DEEP audit requirements. The new law further created a working group made of representatives of diverse sectors of the governmental, regulated, and environmental communities, to assist in formulating program regulations.

Separately, the bill also makes several changes to the Transfer Act that are aimed at clarifying provisions or reducing unintended burdens of the law on the regulated community while it remains in effect. These changes follow a round of revisions made last year, and include modifications to certain exemptions from the act and applicability to condominiums and multi-tenanted properties.

The text of HB 7001 is available here (with an amendment here). Bill status, including history and fiscal analysis, can be found here.

Please contact our Environmental group if you would like additional information or need advice about these significant developments.

Deborah R. Brancato
(203) 252-2648; dbrancato@carmodylaw.com