Governor Granholm Authorizes Major Changes to Michigan Environmental Cleanup Program

20 December 2010 Publication

Legal News Alert: Environmental Regulation

Recent amendments to Michigan’s environmental remediation law provide a potentially more flexible and efficient remediation regime for contaminated sites in Michigan. The legislation, signed by Governor Jennifer Granholm on December 14, 2010, is intended to speed up the pace of remedial activities at contaminated sites, provide more site closures, and encourage the economic development of formerly contaminated sites.

The most significant changes to the Michigan Part 201 program include:

Baseline Environmental Assessment (BEA) Program
Under the Michigan BEA program, a new owner or operator of a contaminated property may be exempt from Part 201 liability upon the completion and disclosure of the BEA to the Michigan Department of Natural Resources and Environment (MDNRE). The new legislation revises the program to substantially conform with the federal “All Appropriate Inquiry” and “Bona Fide Prospective Purchaser” protections of CERCLA. Furthermore, while BEAs must still be disclosed to MDNRE in order to receive liability protection, MDNRE will no longer actually approve BEAs, and the potential purchaser will no longer need to be able to distinguish new releases from prior contamination. From a practical perspective, purchasers may still choose to establish the means to distinguish between such contamination.

Response Actions and No Further Action Reports
The owner or operator of a facility may undertake response activities with or without MDNRE’s prior approval and, upon completion of remedial actions, submit a “no further action” report to MDNRE, requesting that the agency determine that remediation of the specified contamination is complete. The MDNRE has 150 days (180 days if public participation is required) to act on the report or it will be considered approved by operation of law. Once approved, the no further action report exempts the owner or operator from Part 201 liability (with certain exceptions) for the contamination specified in the report.

Generic and Site-Specific Cleanup Criteria
The new legislation reduces the number of cleanup criteria categories from eight to four: residential, nonresidential, limited residential, and limited-nonresidential. These categories are based on generic human risk and exposure assumptions. In order to allow greater flexibility in the Part 201 program, the legislation also provides that MDNRE can identify site-specific criteria for the remediation of certain properties.

New Response Activity Review Panel
The legislation creates a response activity review panel made up of experienced environmental professionals to hear scientific and technical appeals of MDNRE decisions involving response activity plans and no further action reports. The panel will provide a written recommendation to the MDNRE director, who may accept or reject the recommendation; the director’s decision is subject to judicial review.

Specific Exemptions
The legislation clarifies that state and local units of government, certain easement holders, certain lessees, and others, are exempt from Part 201 liability “unless [they were] responsible for an activity causing that release or threat of release.” The legislation also clarifies one of the remaining “hot button” issues regarding lessee liability, by stating that a lessee who uses a facility for retail, office, or commercial purposes is exempt from Part 201 liability, regardless of the lessee’s level of hazardous substance use.

MDNRE may adopt new rules to implement the specific provisions of the legislation, and therefore interested parties should carefully monitor any such rulemaking activities.

For copies of the enrolled bills, please see the links below:

Michigan Senate Bill No. 1345

Michigan Senate Bill No. 1346

Michigan Senate Bill No. 1348

Michigan Senate Bill No. 1443

Michigan House Bill No. 6359

Michigan House Bill No. 6360

Michigan House Bill No. 6363

Michigan House Bill No. 6416


Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and colleagues.

If you have any questions or would like to discuss the topic further, please contact your Foley attorney or the following individual:

Steven E. Chester
Detroit, Michigan
313.234.7146
schester@foley.com

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