Local Government's Role in Hazardous Waste -- Can Traditional Zoning Police Power Now Extend to the Boardroom and to the Closing Table?

Local Government's Role in Hazardous Waste — Can Traditional Zoning Police Power Now Extend to the Boardroom and to the Closing Table?

William L. Earl

Editors' Summary: Although NEPA requires the preparation of an EIS for every major federal action significantly affecting the environment, federal agencies often decide in particular cases that compliance with NEPA is satisfied by preparation of EAs. The decision not to prepare an EIS is usually based on a finding of no significant impact. When an agency's threshold NEPA decision is challenged in court, what is the appropriate standard of review? The federal courts of appeals answer this question in at least two different ways: some circuits use the "arbitrary and capricious" standard, while others inquire into the "reasonableness" of the agency's decision. Several courts have expressed doubt that there is any genuine distinction between the rival standards, and the Supreme Court has so far declined to settle the issue. The author of this Article surveys the federal case law on this question, exploring the approach of each circuit and taking issue with those who maintain that the difference between the standards is illusory. The vital difference, the author argues, is that courts using the reasonableness standard are more likely to substitute their own judgment for that of the agency, while courts adopting the arbitrary and capricious standard tend not to second-guess an agency's decision. Because he sees an important difference between these two approaches, the author urges the Supreme Court to grant certiorari to resolve the circuit split.

William L. Earl is a partner with Peeples, Earl and Blank in Miami, Florida.

[18 ELR 10381]

It is appropriate that local government comes at the tail end of today's program. When we advise our clients about the long list of hazardous waste regulation, the final topic is local programs. This order of things, however, is changing. Local governments are now in the hazardous waste regulation business. If a company ignores this development when operating in more than one jurisdiction, it does so at its own peril.

There are some innovative, far reaching programs at the local level around the country. I would like to discuss what local governments are doing and where they might surpass federal or state expertise. I will focus specifically on two programs at either end of the country, one in San Francisco¹ and a proposed one in Dade County, Florida.² Finally, I will [18 ELR 10382] discuss what sort of impacts this trend will have as local government momentum builds.

Local government can do several things better than the federal or state governments. First, they can find sites. After all, regulating local land use is one of their primary functions. The zoning department and the planning department know which areas have been used for heavy industrial activity. The health department knows where there have been problems. Contaminated soils exist in each city or local jurisdiction throughout the country. Local government knows where to find those sites.

In addition, where they have resources, personnel, and sufficient equipment, they are able to respond to situations involving pollution much more quickly. There is an old saying that the response time is directly proportional to how far the bureaucrat's house is from the contaminated site. At the local level, that house is very close, the local politicians are there, and they are burdened with only one or two sites.

Perhaps most importantly, though, local government has some very unique tools to use, namely their police power, which includes issuing building permits and certificates of occupancy as well as rezoning. As an owner, operator, applicant or developer interacts with local government, the government is given an opportunity to interject to solve a hazardous waste problem.

In addition, local government regulation is politically appealing. County commissioners and city councillors like to pound the table and say, "We're going to do something about hazardous waste." As a result, some of the ordinances achieve very little, although they sound nice. I call them "motherhood-apple pie ordinances." The trend continues nonetheless.

It should be noted that in each jurisdiction, constitutional provisions and enabling statutes must exist to permit local government to take this action. Also, the local program must generally be consistent with the state and federal programs that form the driving mechanism.

Dade County has one of the most comprehensive hazardous waste programs in the country. They have a strict liability, retroactive statute for owners, anyone having an interest in the property or the discharge, and anyone having an interest in the discharging entity.³ The county has the power to conduct a cleanup of the contaminated site, and can sue to recover for cleanup costs. Finally, they have their own superlien statute permitting them to place an assessment on the property and to obtain priority over other legal, equitable or beneficial interests in that property.⁴ The first three tools have been sustained; the last one has not been judicially reviewed.

What has upset people, however, and what has received national attention is Dade County's proposed Owner Cleanup Responsibility Ordinance (OCRO). While it resembles ECRA,⁵ there are some differences. For example, it is not triggered by the transaction, but rather by a statutory schedule of inspections for a prioritized list of fifteen industries.

The fifteen industries that the county has determined to be a problem range from chemical manufacturing and formulation to boat-making. A five-year compliance deadline is triggered for three industries each year. In year one, the first three industries on the list must obtain a certificate of compliance from the county. In year two, the next three must do so until five years have passed. At this point, the implementing mechanism goes into effect, prohibiting the transfer of the property without a certificate of compliance.

One commentator compares ECRA to a termite inspection statute — a prerequisite to accomplishing the transaction. He compares the proposed Dade County, Florida ordinance to an automobile inspection statute — a statutorially established schedule of inspection. Under the proposed Dade County ordinance, the purchaser is empowered to void the transaction for noncompliance.

In San Francisco, about a year ago, an ordinance was passed that uses the city's building permit powers to intercede. Under the ordinance, if one desires a building permit in certain areas of San Francisco, one must provide two things: first, a site history prepared by a competent person, and second, a soil sampling. The ordinance exempts residential property that has been used solely for residential purposes since 1921.

If one's soil samples show hazardous wastes, one must submit a mitigation plan for approval by the appropriate state or federal agency. Only after approval is received can one receive a building permit from the city.

DISCUSSION

PARTICIPANT: Is there a mechanism in place for a state or federal agency to approve San Francisco's local soil samples? To whom does one present his samples?

EARL: One would give it to the appropriate agency handling the cleanup in that area. In San Francisco, for example, it would be the state agency, or, if EPA were involved, to the Environmental Protection Agency.

Also, if one does not receive approval within twelve months, the city attorney can sue on behalf of the city to get the site cleaned.

PARTICIPANT: So if a federal or state official says, "Leave me alone, I've got enough work to do — …"

EARL: Then the city sues you to clean up the site, and you don't get your building permit.

PARTICIPANT: Are there any municipal landfills or commercial landfills on Dade County's list? How does the county deal with local government jurisdictions within the county?

EARL: San Francisco discovered that some of the biggest hazardous waste violators were the city's public works department and others. Dade County does not deal with their own; the list of fifteen priorities does not include landfills. The county, by the way, has had some major landfill problems, and has been subject to enforcement actions.

[18 ELR 10383]

ORDINANCE NO.

ORDINANCE CREATING SECTIONS 24- AND 24- OF THE CODE OF METROPOLITAN DADE COUNTY, FLORIDA; REQUIRING THE SCHEDULED INVESTIGATION OF REAL PROPERTY UTILIZED FOR SPECIFIC ACTIVITIES; PROVIDING DEFINITIONS; PROVIDING FOR A CERTIFICATION OF COMPLETION; PROVIDING FOR A PROPERTY OWNER CERTIFICATION, PROVIDING FOR A SITE INVESTIGATION AND DECONTAMINATION PLAN; PROVIDING SEVERABILITY; INCLUSION IN THE CODE, AND AN EFFECTIVE DATE.

BE IT ORDAINED BY THE BOARD OF COUNTY COMMISSIONERS OF DADE COUNTY, FLORIDA:

Short Title: Owner Cleanup Responsibility Ordinance

Section 1. Section 24- of the Code of Metropolitan Dade County, Florida, is hereby amended as follows:¹

Sec. 24- Intent

The Commission finds that the continuing operation of certain industrial entities which are engaged in the generation, handling, storage, disposal, manufacture, recycling, transportation or treatment of hazardous materials or waste, pose a potential risk to the environment of Dade County, and that it is necessary to therefore require periodic investigation of the operating procedures and ground and groundwater underlying these certain industrial operations.

Section 2.

Sec. 24- Definitions

1. Industrial Commercial establishment — shall mean any place of business and all continguous real estate used in or auxiliary to the business conducted at the place of business, engaged in any of the following, and which have been issued an operating permit, or have been notified by the director thatan operating permit is required, pursuant to Section 24-35.1:

a. Manufacture, formulation, or bulk distribution of chemicals in excess of 10,000 gallons per year.

b. Storage capacity of chemicals in excess of 2000 gallons.

c. Scrap metal salvaging, handling or processing and automobile, truck and airplane salvaging, handling or processing.

d. Boat building and repairing.

e. Mechanical repair, including auto, truck and aircraft repair.

f. Solvent recycling

g. Wood preserving

h. Paint formulation

i. Oil recycling

j. Waste recycling or treating pursuant to the Florida Resource Recovery and Management Act

k. Pesticide formulation, excluding dilution of preformulated concentrates.

l. Drum reconditioning

m. Transformer repair

n. Galvanizing

o. Plating, polishing or anodizing

p. Battery manufacturer or rebuilding

2. Hazardous Substance — shall have the same meaning as it has under Section 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act, Pub. Law No. 96-510, 101(14), 98 Stat. 2767, 2769 (1980), as such statute may be amended from time to time, except that it shall include petroleum, including crude oil and any fraction thereof.

3. Contamination — shall mean the uncontained presence of a hazardous substance in any medium which presence is in concentrations or which nature or behavior is unlawful to cause, permit, or suffer, or which justifies a response pursuant to any other law. For the purposes of this definition, the test to determine "nature or behavior" will be determined by the Director of the Department of Environmental Resources Management.

4. Sale or transfer — shall mean the (1) sale or transfer of a freehold interest in real estate upon which an industrial/commercial establishment is located, (2) transfer of a leasehold interest to someone who has not occupied the real estate of an industrial/commercial establishment (lease renewals should not be covered), and (3) sale or transfer of a majority interest in any entity which owns, whether directly or indirectly through a chain of subsidiaries, an industrial/commercial establishment.

Section 3.

Sec. 24- Regulations for the Scheduled Investigation of Industrial/Commercial Establishments

A. Owners of Industrial/Commercial establishments which exist or come into existence on or after June 1, 1986, shall obtain from the Director of the Department of Environmental Resources Management a Certification of Compliance according to the following schedule:

1. Before September 1, 1987 and every subsequent five years — industrial/commercial establishments pursuant to 1(a)(b) and (c) above;

2. Before September 1, 1988 and every subsequent five years — industrial/commercial establishments pursuant to 1(d)(e) and (f) above;

3. Before September 1, 1989 and every subsequent five years — industrial/commercial establishments pursuant to 1(g)(h)(i) and (j) above;

4. Before September 1, 1990 and every subsequent five years — industrial/commercial establishments pursuant to 1(k)(l) and (m) above;

5. Before September 1, 1991 and every subsequent five years — industrial/commercial establishments pursuant to 1(n)(o) and (p) above.

B. The director may issue a Certification of Compliance if:

1. The owner of the industrial/commercial establishment has submitted, and the director has approved, a Property Owners Certification, or

2. The owner of the industrial/commercial establishment has submitted, and the director has approved, a complete decontamination plan, and the requirements of the decontamination plan have been completed, or a Consent Agreement has been executed between the director and the owner which specifies the decontamination schedule. The consent agreement shall clearly state the obligations of the owner and if applicable, the purchases, and shall similarly state the obligations of the owner in the event of an anticipated sale prior to completion of the decontamination plan.

C. The director, in his evaluation of the adequacy of the property owner certification may consider information submitted as well as any other information obtained including inspection reports and historical files regarding the actual or probable handling, use or disposal of hazardous materials or waste at the site.

D. The Certification of Compliance shall address the later of the following time periods:

1. The time period since the most recent approval by the director of a Certification of Compliance to the present, or

2. The time period since the property was vacant, unused land, to the present.

Section 4. 24-

Section 24- Regulations for the Scheduled Investigation of Industrial/Commercial Establishments within Wellfield Protection Zones

A. Notwithstanding the requirements of Section 24- as hereinabove stated, owners of industrial/commercial establishments which exist, or come into existence on or after June 1, 1986, and which are within Wellfield Protection zones, shall obtain from [18 ELR 10384] the Director of the Department of Environmental Resources Management, a Certification of Compliance according to the following schedule:

1. Before March 1, 1987 and every subsequent three years — industrial/commercial establishments pursuant to 1(a)(b)(c) and (d) above;

2. Before March 1, 1988 and every subsequent three years — industrial/commercial establishments pursuant to 1(e)(f)(g)(h)(i) and (j) above;

3. Before March 1, 1989 and every subsequent three years — industrial/commercial establishments pursuant to 1(k)(l)(m)(n)(o) and (p) above;

B. The Director may issue said Certification of Compliance if:

1. The owner of the industrial/commercial establishment has submitted, and the director has approved, a Property Owner Certification, or

C. The Certification of Compliance shall address the later of the following time periods:

1. The time period since the most recent approval by the Director of a Certification of Compliance to the present, or

2. The time period since the property was vacant, unused land, to the present.

Section 5. 24-

Information Requirements for continuing operations of an Industrial/Commercial Establishment

A. Property Owner Certification — shall mean a written certification by the owner of the industrial/commercial establishment, that there has been no release of a hazardous substance or waste at the subject site, and that there is no contamination present in the soil or groundwater at the site or that any such release or contamination has been remedied in accordance with the requirements of this Chapter. The Property Owner Certification shall be in the form to be prescribed by the Director, and shall include adequate information regarding the handling and use of hazardous substances and wastes at the site to support the aforementioned certification by the owner.

B. The Decontamination Plan must be preceded by a Site Investigation which shall include, but not be limited to:

1. A detailed soil, groundwater and surface water sampling and analysis plan, including, an exploration of hydrogeologic characteristics of the industrial establishment.

This Site Investigation Plan shall be designed to determine the nature and extent of the contamination, and is not limited to the owners property. The plan must be approved by the Director before implementation and shall include, but not be limited to, the following:

i. A scaled site map indicating areas where soil, groundwater and surface water will be sampled;

ii. The methodology to be utilized to obtain soil, groundwater and surface water samples, including for example, depth and location of soil borings, procedures for installing groundwater monitoring well and other sampling methodology details;

iii. The types of analyses to be performed on the soil, groundwater and surface water samples;

iv. The name of the laboratory hired to perform the analyses of soil, groundwater and surface water; and a copy of the State certification in those areas;

v. The Quality Assurance/Quality Control Plan developed for the detailed sampling plan; and

vi. The provisions made to provide the department with split samples of all soil, groundwater and surface water samples.

vii. A timetable for which sample results and, if applicable, a comprehensive Decontamination Plan will be delivered to the Director.

C. The comprehensive Decontamination Plan shall include the results of the Site Investigation. If sample results indicate that no violations of the standards within this chapter exist, then the Decontamination Plan may be deemed to be complete by the Director. Otherwise, a comprehensive Decontamination Plan designed to remedy the violations, including the following information, must be submitted to the Department of Environmental Resources Management for review and approval:

i. Detailed description of the procedures to be used to decontaminate and/or decommission equipment and buildings involved with the generation, manufacture refining, transportation, treatment, storage, handling, or disposal of hazardous waste or materials.

ii. Detailed description of operations concerned with restoration of soil, ground water, and surface water.

iii. Name and location of transporters and final disposal sites of contaminated soils, liquids and equipment.

iv. Detailed description of any treatment technologies used in remediation of the contamination.

v. Name, address and telephone number of an authorized agent of the industrial/commercial establishment who shall be designated to work with the department concerning the owners responsibilities under the Act.

vi. A timetable for the completion of all phases of the plan.

Section 6. Prerequisite for the Sale of an Industrial/Commercial Establishment

Sec. 24-

Beginning September 1, 1991, it shall be unlawful for anyone to sell or transfer any industrial/commercial property without a current Certification of Compliance from the director of the Department of Environmental Resources Management. Notwithstanding the above, beginning March 1, 1989, it shall be unlawful for anyone to sell or transfer any industrial/commercial establishment within a wellfield protection zone, without a current Certification of Compliance from the director of the Department of environmental Resources Management. Failure to obtain a current Certification of Compliance shall be grounds for voiding the sale or transfer of the industrial/commercial establishment by the purchaser of the property.

Section 7. Fee Schedule

Sec. 24-

The director shall promulgate a schedule of fees to be assessed for the costs of implementing this program. Said fees shall be included within the Department of Environmental Resources Management's fee schedule and shall be adopted through Administrative Order.

Section 8. If any section, subsection, sentence, clause or provision of this ordinance is held invalid, the remainder of this ordinance shall not be affected thereby.

Section 9. It is the intention of the Board of County Commissioners, and it is hereby ordained that the provisions of this ordinance shall become and be made a part of the Code of Metropolitan Dade County, Florida. The sections of this ordinance may be renumbered or relettered to accomplish such intention, and the word "ordinance" may be changed to "section", "article", or other appropriate word.

Section 10. This ordinance shall become effective ten (10) days after the date of its enactment.

PASSED AND ADOPTED: Approved by County Attorney as to form and legal sufficiency.

1. See San Francisco, CA., Ordinance 253-86 (June 9, 1986).

2. See attached proposed Dade County Florida ordinance.

3. See Dade County, FL., Code § 24-57 (1983).

4. See Dade County, FL., Code § 24-57(i) (1983).

5. Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K6 et seq.

1. Words stricken through shall be deleted. Underscored words constitute the amendment proposed. Remaining provisions are now in effect and shall remain unchanged. Words within single quotation marks shall be printed in italics. Words within double quotations marks shall be printed in bold type.