Newsletter05.08.2018

2018 Environmental Legislative Update No. 5

by Christopher P. McCormack

Welcome to our Environmental Legislative Updates.

Throughout Connecticut’s legislative session, these updates highlighted developments concerning environmental law and policy. The author prepares updates as Legislative Liaison of the Connecticut Bar Association’s Environmental Law Section. Pullman & Comley is pleased to offer them in this format to a wider audience.

As the session proceeds, early updates will alert readers to proposals on a broad range of issues concerning the environment, narrowing focus over time on bills that continue to progress, and concluding with a post-session wrap-up of bills that pass as well as noteworthy also-rans. Along the way they’ll summarize and challenge arguments pro and con, examine the policy and science behind proposals, and occasionally cast a side glance at the vicissitudes and vagaries of the process. The views expressed will be the author’s own, not necessarily those of Pullman & Comley LLC.

Questions, comments, requests and suggestions are always welcome. Please email me at cmccormack@pullcom.com.

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As the 2018 legislative session careens toward its close on May 9, we bring you an example of that late-session creature, a long-pending bill on one subject that through amendment becomes a bill on multiple subjects. In this instance, however, the component parts remain generally within the brownfield area.

The original bill was SB 268 (File Copy 389) to extend the term limits for loans under the Targeted Brownfield Development Loan Program from twenty to thirty years. That much was untouched by the amendment. So if your Senator has been promising to vote for term limits, mission accomplished.

The amendment tacked on six new sections numbered 501-506. The OLR analysis of the bill as amended and passed is here. The most brownfield-y of the new provisions are Sections 504 and 505.

504 would amend Conn. Gen. Stat. §32-763, the remedial action and redevelopment municipal grant program within DECD, to provide that if a grant recipient is not subject to the Transfer Act, it must enter a remediation program under Sections 22a-133x, 22a-133y, 32-768 or 32-769. “Getting with the program” in that sense would not be required if the grant is only for abatement of building materials, solely for site assessment, or is for a municipality, brownfield land bank, etc. to develop a comprehensive plan for multiple sites. This change would conform the grant program to the brownfield loan provisions that already contain a similar requirement.

505 would amend Conn. Gen. Stat. §12-81r to allow municipalities to enter into tax abatement arrangements with prospective owners who commit to undertake site assessment, demolition and remediation. As it stands, the statute permits such arrangements only with owners, so the change would smooth the way for prospective purchasers. The prospective owner would also have to sign up under one of the same non-Transfer-Act remediation statutes specified in Section 504.

The first three sections of the amendment, 501-503, cover the “Notice of Activity and Use Limitation” (NAUL) mechanism originally enacted as Section 33 of PA 13-308. Yes, you read that right – five years ago. We’ll devote space to this because even though the subject matter of these sections has been in and out of the last few legislative sessions, these versions are appearing in this form for the first time this session in this late amendment. Update that “how laws are made” flow chart again.

Since the NAUL statute was enacted, the objective of a notice mechanism less cumbersome than the full Environmental Land Use Restriction has remained unrealized. Implementation has been dogged by lingering concern about how a use restriction can coexist with the rights of prior interest holders that could technically take over a property and not be bound by the restriction. The ELUR mechanism solves that problem by structuring the restriction as a recorded interest in land (easement) in favor of the State, requiring subordinations from anyone holding a potentially conflicting interest. But the subordination requirement often impedes site closures that depend on use restrictions to achieve compliance.

The NAUL was originally conceived as a notice device that would not require subordination, on the theory that where site conditions are less complex, risk can be adequately addressed by assuring subsequent owners and occupants simply become aware of protective use limitations. (The idea wasn’t original; EPA Superfund guidance classifies nonproprietary “deed notices” as a distinct category of institutional control.) But this logic did not prevail over concern with potentially conflicting uses: the version now on the books says NAULs are not available at all where a prior interest holder can theoretically conduct activity conflicting with the use limitation, or has an interest that allows for intrusion into polluted soil. The ironic result: a mechanism conceived to ameliorate  the challenge of subordinating prior interests became entirely unavailable when any such interests were present.

Section 503 of the Senate Amendment makes a useful incremental improvement by permitting use of an NAUL if every holder of an interest that could interfere with the “conditions or purposes of such notice” agrees by signing the NAUL to “subject” that interest to it. The signing requirement is cross-referenced in Section 502. Section 501 adds a non-substantive cross-reference to the NAUL concept and the minor but important substantive concept that an NAUL may require as well as prohibit activities.

Section 502 makes another helpful change: it eliminates the reference to interests that allow for intrusion into polluted soil. So such interests would not be disqualifying, and would not require clearance by means of the interest holder’s signature on the NAUL.

These changes move in the direction of making the NAUL a more useful alternative to the ELUR, though still less than fully self-implementing. But if the NAUL is “ELUR Lite,” the signing requirement of Sections 502 and 503 is “Subordination Lite.” Those who’ve had difficulty getting such holders to agree to subordination may have their own ideas about how they’ll fare asking for autographs.

Completing the SB 268 amendment grab bag, the award for most attenuated brownfield nexus goes to Section 506: it would exempt certain programs “for the construction of nuclear submarines” from environmental impact evaluation requirements, if such programs are rated “DX” under the Defense Department’s Defense Priorities and Allocations System. But if they need an ELUR, they’ll still need to get subordinations. First things first.

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