Oregon DEQ: Cleanup Program Legislative Information

Orphan Site Account Funding

As part of the Governor’s Balanced Budget, DEQ Land Quality’s proposed Policy Option Package 131 requests the sale of $6.74 million in bonds to fund ongoing and additional orphan site work for two biennia (2011-13 and 2013-15). The bond sale would be backed by revenue from the Hazardous Substance Possession fee.

More information on Orphan Site Cleanups and Package 131 can be viewed here:

DEQ Land Quality proposed Policy Option Package 131 PDF

Orphan sites are highly contaminated properties where there is no identified party able to take necessary cleanup action. In 1991 the Legislature authorized an Orphan Site Account to address high priority orphan sites where parties responsible for the contamination are unknown, unwilling, or unable to clean it up. DEQ’s orphan site program protects public health and the environment by cleaning up these highly contaminated properties. The Industrial OSA has been funded primarily through the sale of long-term bonds. To date, 97 sites in Oregon have been officially declared orphans, posing a serious threat to human health or the environment. Although cleanup activities at some orphans can continue for years, 21 of these have been cleaned up and closed, and many of these sites now support enhanced uses through redevelopment. The remainder of the state’s orphan sites are in various stages of investigation and cleanup, including operation and maintenance.

Examples of some successful orphan site cleanup projects can be viewed here:

DEQ Orphan Site Success Stories PDF

At this time, DEQ is actively working on only about 20 orphan sites due to limited available funding. DEQ has focused its limited Industrial Orphan Site Account budget on sites directly affecting public health (placing lower priority on ecological or environmental threats). DEQ has proposed for inclusion in the 2011-13 Governor’s Balanced Budget a legislative request for orphan site funding through a bond sale to enable operation and maintenance of remediation systems (many of which are protecting drinking water supplies) and investigation and cleanup of high-risk sites (where removal of the worst of the contamination can in many cases make orphan sites attractive to investors who will finish the cleanup and return the site to productive use).

Information presented on February 9, 2011 to the Ways and Means Natural Resources Subcommittee can be viewed here:

Industrial Orphan Site Cleanup Program PDF

Comments or questions regarding this legislative proposal should be directed to Annette Dietz at 503-229-6258 or e-mail.

Institutional Controls

Oregon DEQ, the Oregon Department of Justice and others have been working with a workgroup established by state’s Uniform Law Commission to review potential changes to Oregon’s statutes concerning the use of institutional controls. The Uniform Law Commission’s original task was to evaluate the potential appropriateness of a nationally-developed Uniform Environmental Covenants Act for adoption in Oregon. The question about whether or not to adopt the national model has been discussed intermittently during the past several legislative sessions.

Since adoption of the state’s environmental cleanup law amendments in 1987, Oregon has relied on institutional controls at many cleanup sites for protecting public health and the environment. DEQ primarily relies on a legal instrument known as an “easement and equitable servitude” for implementing institutional controls. These EESs are recorded with the County and run with the land. The conclusion of the workgroup is that adoption of the national model is unnecessary and would likely complicate current environmental and real estate statues and practices in Oregon. At the same time, DEQ and the workgroup identified some modest changes that could be made to strengthen DEQ’s existing institutional controls program.

DEQ anticipates that hearings for the resulting legislative proposal, SB 867, will be held on Thursday March 31st before the Senate Judiciary Committee. DEQ is supporting this bill. Minor amendments to the bill are being developed by Legislative Counsel, but the current draft of the bill can be viewed here:

Draft Institutional Controls Bill SB 867 PDF

Prospective Purchaser Agreements

Last year, the Department of Environmental Quality began considering potential legislative changes to the Prospective Purchaser Agreement program to enhance use of this tool for economic redevelopment and environmental cleanup. Last fall, based on prior conversation with stakeholders, DEQ worked with the Department of Justice and Legislative Counsel to create a legislative concept which was approved for pre-session filing as HB 2082.

The City of Portland and the Port of Portland also developed a legislative proposal (SB 441) and Representative Lew Frederick introduced additional legislation aimed at promoting environmental cleanup and economic redevelopment (HB 2949 and 2950).

DEQ has been discussing with sponsors of the other bills a proposal that would merge some of the concepts of HB 2082 and SB 441. We anticipate the resulting merged bill, Legislative Concept 4041, will be introduced as an amendment to HB 3325 by Representatives Barker and Frederick.

If approved, this bill would make a few relatively modest changes to the ORS 465.327 (the PPA statute).

First, the bill would expand the liability protection available through a PPA to include the state’s two spill program statutes, ORS 466.640 and ORS 468.310.
Second, the bill would expand liability protection to include so-called “direct action” claims under ORS 465.255 and protection from potential claims under the two spills statutes, ORS 466.640 and ORS 468B.310. The possibility of “direct claims” against an innocent new prospective purchaser was not contemplated when the state’s prospective purchaser agreement was originally enacted in 1995. Like the existing liability protections available through a PPA, these expanded protections would be available only to prospective purchasers who have not previously owned or operated on the property and have no existing liability for contamination on the properties. The expanded protections would be available only in PPAs that go through the notice and public comment process set out in ORS 365.320.
The third change contemplated in the bill would change existing law, which requires a Consent Judgment for protection from third party claims, to also allow DEQ to provide liability protections through an administrative Consent Order. In some situations, a Consent Order may be appropriate and would provide a more streamlined approach for a prospective purchaser. The Consent Order would be issued only after completion of the public notice and comment process in ORS 465.320. The Consent Judgment process will continue to be available for PPAs that are better suited to that approach.

All of these changes are intended to stimulate the cleanup and redevelopment of contaminated property by providing greater certainty to buyers of those properties. The proposal is currently being drafted by Legislative Counsel.