Reporting Results of Environmental Due Diligence Investigation
A frequent inquiry that we get from clients during real estate environmental due diligence investigations is whether the results of a Phase I Environmental Site Assessment (ESA) or Phase II ESA need to be reported to environmental agencies.
An article about Environmental Due Diligence, by Azad A. Kaligi, PG.
Do the Results of an Environmental Site Assessment need to be reported to local regulatory agencies?
In most cases, the requirement to report subsurface investigation results to government agencies generally depend on three factors of the job:
- Whether the results of the assessment(s) reveal any potential dangers or health risks to the public;
- Whether the job-site happens to be located within an agency jurisdiction that requires permitting and data submittals to commence with drilling; and
- Whether the purpose and scope of the assessment is intended to intercept known contamination plumes for cleanup reasons.
I must remind readers that I am not an attorney and that this article is NOT intended to be legal advice. This article simply serves to guide inquirers towards supportive information based on the engineering and geological professional standards in the State of California, during the year 2016. In all cases, I always advise my clients to consult such matters with their attorney.
Environmental Due Diligence Finds Public Health Risks
Health and safety codes across the county specify that responsible parties (examples: owners, occupants, etc) and environmental engineering consultants have the absolute duty to report contamination of soil, soil gas and/or groundwater that has been discovered to be a risk to public health and safety, or the environment. In most cases, the distance and direction to the nearest sensitive receptors are generally disclosed in the body of Phase I ESA and/or Phase II ESA reports. Regardless, when conducting real estate environmental due diligence assessments, property owners should refer to their environmental engineering consultants to determine whether a risk to public health and safety actually exists at their site.
If the results of a subsurface investigation suggest contamination to groundwater near a sensitive receptor (example: drinking water well, river/wash, school, hospital, etc.), or poses a potential health risk to the occupants of a property by mode of vapor intrusion, there is a professional and legal responsibility to recommend further investigation and immediately report data to local fire departments, water boards, air quality boards, toxic substance departments, etc.
Results of the Assessment
Risk-based standards are regulated on both a State and Federal level. As one would presume, the Federal EPA has jurisdiction across the nation, and publishes standards and foundational requirements per region for State regulatory agencies and departments to use as a template. Many States (especially in California) have multiple EPA divisions with overlapping jurisdictions such as water quality boards, toxic substances control and more. Furthermore, County and City agencies such as fire departments, public health departments and water agencies, also have overlapping jurisdiction above the State and Federal EPA jurisdictions.
The Federal Environmental Protection Agency (EPA) published Regional Screening Levels (RSLs), and similarly the California EPA published Human Health Screening Levels (CHHSLs) which apply to contamination levels in soil and soil gas. These publications include a list of minimum chemical concentrations to be considered in soil and soil gas investigations. Screening levels are generally used for the science of toxicology and risk assessment, and are not typically used as reporting limits. However, during potential health-threatening circumstances, reporting duties prevail as a matter of public policy, and standard practices include comparing site specific soil and soil gas concentrations to RSLs and CHHSLs.
The Federal EPA has also developed Maximum Contaminant Levels (MCLs) as a health-based protective drinking water standard. Subsurface investigations that include groundwater testing utilize the EPA’s list of MCLs as a guideline for risk assessment. Additionally, some local agencies (State-Regions, Counties and Cities) have established more conservative clean-up numbers which are exclusive to specific jurisdictions, and can overrule MCLs, RSLs and CHHSLs.
A Phase II ESA generally includes, but is not limited to, drilling for the analysis of soil, soil gas and/or groundwater:
- A typical Phase 2 ESA report in California relates all site specific concentrations in soil and soil gas to RSLs, CHHSLs, or local numbers. In most assessments, geologists and engineers apply soil sample analytical data to geologic models/programs in effort to estimate the overall subsurface contamination conditions. As mentioned above, if the results of a soil or soil gas investigation suggest the likelihood of substantial contamination to groundwater near a potable source, or a potential health risk to the occupants of the job site by mode of vapor intrusion, there is a professional and legal responsibility to recommend further investigation and report data. In some jurisdictions, the mere exceedance of RSLs and/or CHHSLs can create an immediate legal obligation to report results to the lead oversight agency. Some local agencies have also adopted these screening levels to use as their own clean-up standards during the course of remediation. Environmental engineering consultants and their clients should always contact the lead environmental agency for the jurisdiction in which their job site exists to confirm the reporting limitations of chemicals detected in soil or soil gas.
- Groundwater reporting requirements are usually held to a higher standard by comparison to soil and soil gas. Under the California EPA, the State Water Quality Control Board (SWRCB) protects groundwater quality on a statewide basis, and is comprised of nine (9) Regional Water Quality Control Boards (RWQCB). Each regional board provides oversight and interest in groundwater quality data at/around sensitive receptors (example: drinking water well, river/wash, school, hospital, etc.). In most cases the RWQCB will act as the leading agency for oversight programs, alongside with other County and City agencies. If a Phase II ESA detects groundwater contamination in exceedance of MCLs, the property owner will likely be recommended to report the data to their lead RWQCB. Groundwater data may also need to be reported to local County or City agencies if a drilling permit is required in that jurisdiction. In most cases, the RWQCB and other agencies refer to MCLs as the minimum allowable contamination to groundwater before requiring remediation.
Purpose of the Environemtnal Investigation
A Phase II ESA typically entails drilling to collect discrete soil and groundwater samples from below the ground surface. Some County and City environmental agencies will require a borehole permit for any drilling project within their jurisdiction, while other agencies may only require a permit when groundwater is encountered. Often times these permits have a closure process that requires all data to be reported back to the permitting agency. Property owners should refer to their environmental engineering consultants about whether or not their property falls within one of these jurisdictions, and if so, prepare to release analytical data to that department no matter what.
A property owner may also be required to report analytical data from a subsurface investigation if the property is already undergoing regulatory oversight due to a known contamination plume. Under these circumstances the lead agency caseworker will directly require a copy of the assessment report to review and publish as municipal information. Prior to any subsurface testing, a Phase I ESA report should disclose whether the property being investigated is undergoing regulatory oversight or not. In the State of California, assessment reports for properties with known groundwater and soil contamination cases are made public via the SWRCB Geotrackter Database.
Ultimately, it is important for all property owners and consultants of a Phase I ESA or Phase II ESA to understand that each project is different in scope, purpose, jurisdiction and result. Because reporting obligations can vary on a case by case basis, property owners undergoing real estate environmental due diligence projects should never blindly rely on generalized information about reporting obligations, but rather consult with their environmental engineering consultant, attorney and local regulatory agency.
For more information, or a free consultation about site specific environmental due diligence reporting requirements, please call (888) 930-6604 and speak with one of our licensed professional engineers or geologists.
California Requirements Study – Health and Safety Code, Section 25359.4:
(a) A person shall not release, or allow or cause a release of, a reportable quantity of a hazardous substance into the environment that is not authorized or permitted pursuant to state law.
(b) Any release of a reportable quantity of hazardous substance shall be reported to the department in writing within 30 days of discovery, unless any of the following apply:
- (1) The release is permitted or in the permit process.
- (2) The release is authorized by state law.
- (3) The release requires immediate reporting to the Office of Emergency Services pursuant to Section 11002 or 11004 of Title 42 of the United States Code, or pursuant to Section 25507.
- (4) The release has previously been reported to the department or the Office of Emergency Services.
- (5) The release occurred prior to January 1, 1994.
(c) For the purposes of this section, “reportable quantity” means either of the following:
- (1) The quantity of a hazardous substance established in Part 302 (commencing with Section 302.1) of Title 40 of the Code of Federal Regulations, the release of which requires notification pursuant to that part.
- (2) Any quantity of a hazardous substance that is not reportable pursuant to paragraph (1), but that may pose a significant threat to public health and safety or to the environment. The department may establish guidelines for determining which releases are reportable under this paragraph.
(d) The owner of property on which a reportable release has occurred and any person who releases, or causes a reportable release and who fails to make the written report required by subdivision (b), shall be liable for a penalty not to exceed twenty-five thousand dollars ($25,000) for each separate violation and for each day that a violation continues. Each day on which the released hazardous substance remains is a separate violation unless the person has either filed the report or is in compliance with an order issued by a local, state, or federal agency with regard to the release.
(e) Liability under this section may be imposed in a civil action or may be administratively imposed by the department pursuant to Section 25359.3.
(f) If the violation of subdivision (b) results in, or significantly contributes to, an emergency, including, but not limited to, a fire, to which a county, city, or district is required to respond, the responsible party may be assessed the full cost of the emergency response by the city, county, or district.”
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