Legislature passes Climate Superfund Act Vermont Business Magazine
It plays a vital role in cleaning up the environment, preventing future contamination, and sharing the financial burden of environmental cleanup. While challenges exist, cost recovery remains a powerful tool for achieving a healthier and cleaner environment for all. If EPA does the cleanup work using Superfund money, it will try to recover those costs from responsible parties. The Agency must document all its cleanup costs, including direct expenses (e.g., salary and contractual) and indirect expenses (e.g., overhead).
This total cost would be apportioned by the respective state environmental agency among purportedly responsible parties proportional to their GHG emissions exceeding 1 billion metric tons. The Massachusetts bill would establish a climate change superfund of $75 billion over 25 years from profits of Massachusetts’ entities, as opposed to Maryland’s $9 billion, though it is unclear how the authors reached these respective assessments. While progress on the proposals in California, Massachusetts, and Maryland has been slower than in Vermont, a week after the Vermont Climate Superfund Act passed, the New York Legislature passed the state Senate in a vote on June 8, 2024. Vermont's S 259, which became law without the governor’s signature in 2024, is aimed at addressing the alleged financial and environmental repercussions of climate change.
ME - Environment and Natural Resources (Joint)
States are increasingly holding the fossil fuel sector liable for costs related to climate change. Our Environment, Land Use & Natural Resources Group unpacks what companies need to know about these new state “superfund” laws. A former industrial site has been contaminated with heavy metals due to the actions of several companies over the past 50 years.
Guidance: Cost Recovery Actions under Superfund
The assessment would include effect on public health, natural resources, biodiversity, agriculture, economic development flood preparedness and safety, housing, and other relevant effects. Superfund settlement agreements, once finalized, are enforceable in a court of law. EPA is committed to strengthening efforts to reach settlements with PRPs and believes that settlements are most likely to occur when EPA interacts frequently with PRPs. PRPs will generally attempt to negotiate the extent of their liability for the cleanup costs owed to EPA. If a PRP agrees to reimburse EPA for its costs, the resulting settlement may be documented in a judicial consent decree or in an administrative settlement.
If Scott vetoes the legislation, the General Assembly could reconvene in mid-June to consider an override vote. Statement of work model documents are available on the SOW category in the Cleanup Enforcement Model Language and Sample Documents database. Due to aggressive automated scraping of FederalRegister.gov and eCFR.gov, programmatic access to these sites is limited to access to our extensive developer APIs.
- Dr. Hall, a former commissioner of the Federal Energy Regulatory Commission (FERC), focuses his practice on the economic regulation of public utilities.
- This fact sheet was developed pursuant to the Superfund Administrative Reforms announced on October 2, 1995 by Administrator Browner.
- A former industrial site has been contaminated with heavy metals due to the actions of several companies over the past 50 years.
- The Agency must document all its cleanup costs, including direct expenses (e.g., salary and contractual) and indirect expenses (e.g., overhead).
- Through the publication of this fact sheet, EPA hopes to ensure that all stakeholders involved in the Superfund process fully understand the important role of cost in remedy selection under existing law, regulation and policy, and to summarize recent initiatives aimed at enhancing the cost-effectiveness of remedial actions.
Guidance: Written Demand for Superfund Cost Recovery
Choosing the most appropriate approach depends on factors like the nature of the contamination, the financial capacity of the PRPs, and the specific legal framework governing the situation. The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), better known as Superfund, grants the government the authority to undertake cleanup actions at contaminated sites and subsequently seek reimbursement from potentially responsible parties (PRPs). These PRPs could be individuals, corporations, or entities whose actions contributed to the contamination. When a Superfund site, a severely contaminated area posing significant risk to public health and the environment, needs cleanup, the responsibility for the cost doesn't always fall solely on the shoulders of the federal government. This is where cost recovery comes into play - a legal process designed to recoup funds spent on cleanup from those responsible for the contamination. "The Role of Cost in the Superfund Remedy Selection Process" clarifies the current role of cost in the Superfund remedy selection process as that role is established in the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the National Contingency Plan (NCP), and current EPA guidance documents.
The assessment would be completed on or before January 15, 2026 and delivered to various legislative committees. The Agency maintains a database of model administrative and judicial settlement documents that are available for download in Word format. The database provides information on supporting policy and guidance documents for each model and provides the revision history for any updates to a model after it is issued.
- Cleanup costs related to any work performed by contractors must indicate that the work was authorized and completed.
- The law will require “compensatory” payments from entities that the Agency deems “responsible parties” under the law.
- The Program would also develop the strategy to identify and prioritize climate change adaptation projects and disperse funds to implement those projects.
- Additionally, California, Massachusetts, and Maryland are following suit with proposed legislation, indicating a controversial trend among states to legislate corporate responsibility for climate change.
CERCLA provides liability protection to bona fide prospective purchasers (BFPPs), contiguous property owners (CPOs), and innocent landowners (ILOs or third parties) to promote the cleanup, reuse, and redevelopment of contaminated, potentially contaminated, and formerly contaminated properties. In addition to these statutory protections, EPA uses site-specific enforcement tools to facilitate the acquisition and reuse of properties when perceived liability continues to be an obstacle. For example, EPA may enter a site-specific settlement agreement with a party who is not liable for contamination at the property but who is willing to perform cleanup work on the property.
Superfund Cost Recovery: May the Government Recover All Costs Incurred Under Responsible Contracts?
D) Direct cost recovery is primarily used for private companies, while indirect cost recovery is used for government agencies. EPA’s “enforcement first” policy promotes the “polluter pays” principle and allows the Agency to conserve Superfund resources for the cleanup of contaminated sites where there are no potentially responsible parties (PRPs). EPA prefers to reach an agreement with a PRP to clean up a Superfund site instead of issuing an order or doing the work and then recovering its cleanup costs later.
While unclear exactly how the GHG emissions will be calculated for each entity, the new law also directs the Agency to promulgate rules necessary to implement the law’s requirements that should include, but are not limited to, methodologies to identify responsible parties and calculate GHG emissions allegedly caused by each responsible party. The Climate Superfund Act goes into effect on July 1, 2024, and requires the Agency to submit a report detailing the feasibility of this program in 2025 and promulgate implementing regulations in 2026. Cost recovery is a crucial aspect of Superfund that ensures financial responsibility for contaminated sites.
Dr. Burton focuses his practice on economic and financial analysis of both liability and damage issues arising in businesslitigation. Mr. Schneider practices in the area of environmental litigation with an emphasis on hazardous waste, costrecovery, contribution, and environmental insurance coverage issues. Software plays a vital role in modern cost recovery practices, providing essential tools Superfund Cost Recovery for data management, cost estimation, allocation, and regulatory compliance. Investing in appropriate software can significantly improve the efficiency, accuracy, and effectiveness of cost recovery processes. This chapter examines the role of software in streamlining cost recovery processes, highlighting key tools and functionalities.
Vermont’s recently passed S 259, dubbed the Climate Superfund Act, along with the pending New York Climate Change Superfund Act, represent a paradigm shift in environmental liability. These laws have far-reaching implications for businesses, impacting operational costs, liability exposure, and compliance requirements. Additionally, California, Massachusetts, and Maryland are following suit with proposed legislation, indicating a controversial trend among states to legislate corporate responsibility for climate change. California, Maryland, and Massachusetts have all proposed legislation that would enact programs similar to the Climate Change Superfund Act in that they would require companies to pay compensation for purported GHG emissions. These proposals are similar in scope to the Vermont and New York legislation and target entities responsible for more than 1 billion metric tons of GHG emissions from 2000 to 2018 (Massachusetts) or 2000 to 2020 (California and Maryland).
EPA pursues both the costs it has accrued before settlement ("past costs") and costs it anticipates accruing after the settlement ("future costs"). EPA may deposit costs recovered through settlements into "special accounts" within the Superfund Trust Fund to pay for cleanup activities at the site for which it received the money. As a matter of policy, EPA sends a written demand letter to PRPs prior to filing a cost recovery lawsuit.