The Tiered Approach to Corrective Action Objectives and the Site Remediation Program in Illinois

James P. O'Brien

Editors' Summary: In mid-1997, the Illinois Pollution Control Board promulgated two rules that will affect the way contaminated sites are cleaned up in the state: the Tiered Approach to Corrective Action Objectives (TACO) rule and the Illinois Site Remediation Program (voluntary cleanup program) rule. This Article describes the TACO and voluntary cleanup program rules and the changes they make. The Article first gives some background on how cleanups were formerly conducted in Illinois. Next, the Article discusses the TACO rule and its corresponding "tiers" of cleanup objectives, including its approach to remediating contaminated groundwater. The Article then discusses the voluntary cleanup program rule, and concludes with an assessment of the new rules' impact.

Mr. O'Brien is an international partner in the Chicago office of Baker & McKenzie, concentrating his practice on environmental and energy law.

[27 ELR 10611]

It could be clean. It could be dirty. It all depends—on hundreds of pages, that is. The new Tiered Approach to Corrective Action Objectives (TACO) rule promulgated by the Illinois Pollution Control Board (board) on June 5, 1997,¹ is hundreds of pages of just how clean is clean. The board also promulgated a new rule implementing the voluntary Illinois Site Remediation Program (voluntary program).² Together, the TACO and voluntary program rules change the way site cleanups are conducted in Illinois.

TACO requires cleanup of contamination that is dangerous based on the contaminant, its location, and the persons who live or work in the area. In TACO, Illinois has adopted risk-based corrective action (RBCA, often pronounced "Rebecca") standards.³ RBCA ties cleanups to risk. If contamination threatens health and the environment, it must be cleaned up. If not, the contamination can be left in place. What's more, if the contamination can be controlled so that it does not cause risk, it can be left in place. RBCA and TACO are that simple.

The voluntary program is also simple. The rule makes voluntary cleanups transaction-neutral; the finality of the cleanup is independent of any real estate transaction involving the property. Once the Illinois Environmental Protection Agency (IEPA) approves a cleanup and issues a letter stating that no further remediation is necessary, no one is liable for cleaning up any more of the contamination.⁴ The TACO and voluntary program rules are just what participants in real estate transactions have long sought from regulators: "Tell me to clean up only what is dangerous, [27 ELR 10612] and once I'm done, tell me I don't have to do anymore—and make it stick."

This Article describes the TACO and voluntary program rules. Rather than explaining provisions of interest only to the specialist, the Article generally highlights the structure of the rules, including details only to illustrate the changes the rules institute or to highlight situations that most real estate participants will have stumbled across when dealing with contaminated property.

Background: Cleanups Before TACO and the Voluntary Program

Before TACO, Illinois was a "Superfund" state: the IEPA used the federal Superfund scheme⁵ for setting cleanup objectives. The assumptions were that all dirt could be eaten, all contaminants could migrate to groundwater, and all groundwater could be consumed. Cleanup participants would wait anxiously for the agency's letter announcing the cleanup objectives that had been established by a triumvirate of the project manager, the cleanup objectives team, and the coordinated review of permit applications committee.⁶ Typically, the cleanup objectives were set to achieve very low levels of residual contamination, which meant that cleanups were expensive. Moreover, the objectives were unrelated to the property's current or future use; all property had to be clean enough for just about any use.

Similarly, Illinois' first voluntary program was based on an enforcement model. Participants had to investigate and clean up all of the property, the goal of which was a so-called section 4(y) release.⁷ The statutory provision authorizing the IEPA to grant a release was inserted into the statutory section authorizing agency enforcement against responsible parties.⁸ The release was personal to the applicant and, because it was never tested in the courts, of uncertain legal effect.⁹

The TACO Rule

The Tiers

TACO contains three "tiers" that are alternative ways to establish cleanup objectives.¹⁰ Tier 1 consists of generic cleanup objectives that were established using conservative risk-assessment assumptions.¹¹ Tier 2 involves developing site-specific cleanup objectives using published formulae with measured data inputs.¹² Tier 3 uses a custom risk assessment tied directly to site-specific information about the property's use and occupancy using measured inputs.¹³

The tiers contain or can be used to calculate contaminant concentration levels for different contaminants, and these levels constitute the corrective action or cleanup objectives. For example, a tiered cleanup objective of 1.5 milligrams per kilogram (mg/kg) for inhaling soils containing benzene means that once all of the inhalable benzene or benzene-contaminated soil exceeding 1.5 mg/kg has been removed, the tier has been satisfied. When the soil or groundwater is too dirty to satisfy the objectives on one tier, it "falls off" to the next tier. Once all of the contaminants in the soil or groundwater can be placed on at least one of the tiers—maybe not the same one for each contaminant in each place—the cleanup is complete.

The difference between the tiers is not that some tiers are necessarily "easier" than others to satisfy, but that the true risk the contamination presents is more accurately calculated for the higher tiers. Cleanup objectives tend to be higher for tier 3 than tier 1, typically because tier 3 requires a very site-specific analysis, whereas tier 1 is a generic objective that can be used anywhere.

In addition to changing cleanup objectives, TACO allows excluding a pathway of exposure through barriers or controls, so that cleanup objectives may not even be necessary.¹⁴

Tier 1. Tier 1 consists of a set of tables that list allowable contaminant concentration levels as corresponding cleanup objectives for each common contaminant. For example, the tables list a contaminant cleanup objective of 1.5 mg/kg for benzene-contaminated, inhalable surface soils at commercial/industrial properties.¹⁵ Tier 1 is a generic cleanup objective in that the board, in selecting particular contaminant concentration levels, made many assumptions, such as how frequently persons are exposed to the contamination, what the propensity of the soil is to leach the contaminants, and whether the groundwater beneath the soil is used for drinking water. Because the allowable concentration level was selected based on the risk of the contaminant, a tier 1 cleanup objective is still risk-based, only the risk was calculated using standard, conservative assumptions. The basic idea of tier 1 is that it [27 ELR 10613] can apply any place, any time, whether the property will be used as a school or a factory.

Tier 1 objectives differ depending on where the contaminant is located. The tier 1 tables have different soil cleanup objectives for the so-called pathway of exposure—eating, inhaling, and touching contaminated soil. The soil cleanup objectives also differ depending on whether the property is used for residential or commercial/industrial purposes. Furthermore, the tier 1 tables have two sets of groundwater cleanup objectives, depending on whether there is sufficient groundwater to supply a well.¹⁶

To use tier 1, the measured contaminant concentration levels are compared against the relevant table numbers. For example, soil contamination in the top several feet is compared against the table cleanup objectives for inhaling and ingesting soil. Deep-soil contamination is compared against the migration-to-groundwater cleanup objective. If the contaminant concentration levels do not exceed the cleanup objectives, no cleanup is necessary. If the levels exceed the objectives, there are three options: (1) clean up the soils that exceed the objective; (2) move to a tier 2 assessment; or (3) exclude the pathway of exposure.

Of the three options, performing a cleanup is the straightforward one: the contamination must be removed or remediated until the cleanup objectives are satisfied. A tier 2 assessment and pathway exclusion deserve additional discussion.

Risk Assessment as Basis for Tiers 2 and 3. In order to understand tiers 2 and 3, it is necessary to understand the concept of risk assessment and how it is used to establish cleanup objectives. Risk assessment, and its progeny RBCA, involve an evaluation of the danger of a specific contaminant in a specific location, to the people who usually live or work in that area. Different chemicals have different toxicities; the greater the toxicity, the lower (i.e., more stringent) the cleanup objectives will be.

Similarly, contaminants pose different dangers based on their locations. For example, chemicals in exposed soil on the ground could be inhaled during a wind gust, whereas the same chemicals 20 feet below the ground are unlikely to become windblown. Instead, those chemicals could leach down to contaminate groundwater. Thus, cleanup objectives for the same chemical in surface soil will likely differ from cleanup objectives for the same chemical 20 feet below the ground. Similarly, cleanup objectives for industrial property, where mostly middle-aged men stay 8 to 10 hours each day, will be higher (i.e., less stringent) than cleanup objectives for residential property where young children spend almost all of their time.

Tier 2. In the event that the tier 1 table objectives are too low and likely overestimate the risk, then tier 2 objectives can be calculated. A tier 2 assessment is a calculation of cleanup objectives using published formulae combined with data gathered about the particular site and its conditions. For example, in order to calculate the cleanup objective for ingesting benzene-contaminated soils, the following information, inter alia, must be inserted into the tier 2 formulae: the width of the contaminated area parallel to the direction of prevailing winds; the "inhalation cancer slope factor," i.e., the toxicity of the contaminant; the number of days each year workers or residents will occupy the site; and the likely length of time an average person will work or live at the site.¹⁷ On the whole, the tier 2 cleanup objective for inhalation of benzene-contaminated soils is calculated using some 16 different variables.

Pathway Exclusion. Pathway exclusion, the third option for dealing with excessive contamination, involves preventing exposure of people or the environment to the contamination. Contamination is dangerous and presents a risk only when people can ingest it, inhale it, or touch it. If contaminated surface soils are covered by an asphalt parking lot, the contamination will not become windborne. Thus, as long as a regulator can be assured that the asphalt will be properly maintained, a surface cleanup should not be required.

Institutional controls and engineered barriers can be used under TACO to exclude a pathway from cleanup consideration.¹⁸ An example of a typical pathway exclusion is a municipal ordinance that prohibits the use of groundwater. This excludes the ingestion-of-groundwater pathway of exposure. Similarly, construction of a paved parking lot or concrete building slab can exclude the surface-soil and migration-to-groundwater pathways of exposure. A key aspect of pathway exclusion is that it may not be necessary to do any cleanup at all, as long as the barrier or control prevents exposure to the contamination. Typically, the barrier or control is sufficiently effective in the absence of any cleanup so that, with the exception of free product,¹⁹ it is not necessary to set any cleanup objectives for that contamination.

Pathway exclusion works to protect people as long as the barrier or control is maintained. If the municipality changes its ordinance to allow groundwater wells, or if the parking lot falls into disrepair, the pathway again becomes a way in which the contamination can harm people or the environment. As a result, TACO requires that deed notification or property use covenants be recorded in the chain of title for the property.²⁰ In addition, the effectiveness of a "no further remediation" (NFR) letter issued by the IEPA will [27 ELR 10614] be contingent on the continued effectiveness of the barrier or control.²¹

Tier 3. If both tier 1 and tier 2 cleanup objectives are too low and overstate the risk, then tier 3 can be used. Tier 3 cleanup objectives are established using a sophisticated, custom risk assessment for which all of the formulae and data inputs are chosen based on site-specific information.²² Only selected likely "exposure scenarios" are evaluated, and the cleanup objectives are established to protect against those circumstances.

For example, most tier 3 risk assessments include a utility worker scenario and an excavator scenario. In the former scenario, the risk of the contamination to a utility worker is evaluated by assuming that the worker will dig only six or seven feet deep for only five to seven days. Since the utility worker may not know that contamination is present, the scenario often assumes that the worker will not use personal protective equipment. In contrast, an excavator will know of the contamination, and the scenario assumes that the excavator will use personal protective equipment. There can be several other differences between the scenarios, because the object of a tier 3 risk assessment is to use actual site data and inputs rather than conservative assumptions.

Fine-tuning the risk assessment using these scenarios usually results in less stringent cleanup objectives. For example, the risk to an excavator from windblown contaminated soil will be lower, and the cleanup objective much less stringent, if the scenario assessed assumes that the excavator uses a respirator.

TACO's Approach to Groundwater Contamination

State laws or regulations that allow a RBCA approach to soil contamination often do not permit a similar approach to groundwater contamination. In fact, in many states groundwater is considered a state resource requiring protection regardless of its current or potential use.²³ The effect of this policy is to require cleanups until the groundwater is fit to drink, even though no one is drinking the water, there are no plans to start drinking the water, and the local municipality provides drinking water from a different, unaffected source.

Sometimes, regulatory agencies have the discretion to avoid this effect by requiring monitoring of the groundwater as a cleanup measure, assuming that natural attenuation will lead to satisfactory cleanup. Natural attenuation is a legitimate and acceptable approach to groundwater contamination, and often is the only practical alternative. Nevertheless, granting the regulator discretion to allow natural attenuation does not adequately address the groundwater problem for transaction participants. Cleanup costs cannot be accommodated in a transaction when the potential to incur substantial costs is within the agency's discretion.

TACO, however, applies a RBCA approach to cleaning up groundwater contamination, using three alternatives. Under the first alternative, TACO lists in tables different cleanup objectives that distinguish between two classes of groundwater.²⁴ Class I includes groundwater that because of physical properties such as pumpability, volume, and suitability, can be used as drinking water. Class II includes groundwater that cannot be used as drinking water because its physical properties prevent it. The difference between the respective cleanup objectives for each class is not material enough to affect potential cleanup costs.²⁵

Real savings can be achieved, however, using TACO's remaining options for cleaning up groundwater. The second alternative is to calculate the groundwater cleanup objectives based on the possibility that the contaminated groundwater will migrate from the contaminated property to the nearest water well in concentrations that exceed drinking-water standards.²⁶ In other words, the calculated objective leads to enough cleanup so that the nearest groundwater user can continue drinking the pumped water. If the nearest well is some distance away, the cleanup objectives will be relatively modest, because the contaminants in migrating groundwater tend to become diluted with uncontaminated groundwater.²⁷

TACO's third alternative is to ensure that the groundwater will not be used by excluding the groundwater pathway of exposure and obtaining the consent of affected property owners to leave the contaminated groundwater unremediated.²⁸ This option requires that the local government prohibit any private or public well installation in the affected area. Also, the consent of affected property owners must be obtained to record deed notice of the contaminated groundwater and a restriction against its use. Some property owners may not be cooperative and may [27 ELR 10615] request payment in exchange for the deed notice and restriction. The cost of "buying cooperation," however, is likely to be much cheaper than "chasing" contamination to neighboring properties.²⁹

The Voluntary Cleanup Program Rule

While the TACO rule governs the extent of cleanup required, the voluntary cleanup program rule governs what the property owner obtains for the cleanup work. Formerly, only the current owner was legally entitled to protection from liability claims after completing a successful cleanup.³⁰ Consequently, potential purchasers of contaminated property were concerned that new agency cleanup standards, practices, or procedures could be applied after the sale to require more work. Regardless of whether it was well-founded, this concern inhibited prospective buyers' appetites for contaminated property. Under the voluntary program rules, however, new buyers, their lenders, and their managers are all protected against liability.

The key change under the voluntary program rules is that the NFR letter now applies to lenders, trustees, subsequent property purchasers, and others with interests in the real estate.³¹ The policy reflected in this change is that once the IEPA has agreed that a cleanup is complete, no further cleanup is necessary regardless of who owns or operates the property. Thus, under the voluntary program rules, as long as the property use and maintenance conforms to any restrictions in the NFR letter, any party with an interest in the property is entitled to benefit from the NFR letter.

In a sense, the voluntary program provides a fresh start for previously environmentally bankrupt properties. The completed cleanup draws a box around the existing contamination, and provides that as long as the barriers and controls are maintained, no additional work will be required. This satisfies the second requirement for real estate transactions: once the work is done, don't require more, regardless of conveyances, leases, loans, or any other subsequent real estate transaction.

Assessing the Impact of TACO and the Voluntary Program

Problems Remaining

Nothing is perfect, of course, and problems remain even after TACO and the voluntary program rules. First, the NFR letter applies to contamination that is discovered and evaluated, but not to contamination that has been overlooked.³² At first this seems reasonable: TACO evaluations that do not include the "surprise" contamination are not valid. If the contamination had been found at first, it would have been evaluated. Thus, the property owner is not in a different position; additional cleanup was only delayed. The problem is that there may have been one or more real estate deals in the meantime, none of which took into consideration the price of additional cleanup costs. Real estate transactions involving contaminated property, therefore, retain a surprise risk, only now the risk is not due to a change in the law or regulations as before, but rather the discovery of additional contamination.³³

The second issue is that groundwater can still be problematic. Groundwater does not respect property boundaries; often the contaminated groundwater migrates from the site onto neighboring properties. Moreover, in industrial areas the source of the contamination may be difficult to identify. The TACO approach to groundwater helps, but if it must be cleaned up, the cleanup is difficult, costly, and time-consuming. Fortunately, for new property buyers, the IEPA is willing both to confine its scope of review and to limit the NFR's effectiveness to the original contaminated property. The agency's approach means that prospective purchasers can ignore the off-site contamination and deal only with the subject property. Because a property buyer only has potential liability for the property purchased, and not the off-site contamination, the purchaser can avoid cleaning up contamination released prior to the purchase.³⁴

The third problem is that the new rules do not address the risk of personal injury or property damage to persons not involved in the transaction. Regardless of scientifically valid risk calculations, there are experts who still claim that one molecule of contamination is enough to cause injury. Similarly, property owners willing to sue can probably adduce enough evidence to go to a jury claiming that contamination diminishes property value. For purchasers, the risk can presumably be minimized by starting the cleanup at or about the time of closing. Unlike liability under the cleanup laws, personal injury and property damage claims are still fault-based, requiring the claimant to show that the new owner was at fault for the injury.³⁵

The final problem is that the protection the tier 1 and 2 cleanup objectives provide commercial/industrial properties [27 ELR 10616] is calibrated to residential use. Even though the assumptions and data used are different, ultimately the level of protection—or conversely, the risk of harm permitted—is the same. Since the level of protection is based, in part, on the sensitivity of people to the contaminants, tiers 1 and 2 essentially assume that commercial/industrial property users are as sensitive to contaminants as are residential property users.³⁶ Establishing overly conservative cleanup objectives that are set artificially low means more expensive cleanups.

The technical explanation for this problem is that both residential and commercial/industrial cleanup objectives for tiers 1 and 2 are based on a 1 in 1,000,000 excess-cancer risk level.³⁷ The excess-cancer risk level is a measure of the risk of harm due to exposure to contaminants at the cleanup-objective concentrations. The 1 in 1,000,000 excess-cancer risk level does not mean that 1 additional person out of 1,000,000 will die from cancer due to the contaminants, but rather that exposure to the contaminants at the cleanup-objective concentrations increases the risk of cancer in an increment measured by the excess-cancer risk level.³⁸ Federal guidelines allow cleanup objectives within a risk range of 1 in 10,000, or 10-4, to 1 in 1,000,000, or 10-6, but tend to require the more conservative 10-6 risk level for residential properties.³⁹

Using a 10-6 risk level, as does TACO, means that Illinois requires the same level of protection for commercial/industrial properties as the U.S. Environmental Protection Agency does for residential properties. Because the relationship between changes in risk level and changes in cleanup objectives is linear, moving from a 10-6 risk level to a 10-4 risk level, an increase by a factor of 100, moves the cleanup objectives up by a factor of 100.⁴⁰ For example, the tier 1 cleanup objective for inhalable soils contaminated with benzene is 1.5 mg/kg. That objective is set to provide protection to a 10-6 risk level. If the cleanup objective were set to provide protection to a 10-4 risk level, the objective would be 150 mg/kg. A higher cleanup objective means less soil cleanup and a cheaper cleanup.⁴¹

The Practical Impact of the Rules

Despite these problems, transaction experience to date shows that TACO works in Illinois.⁴² The TACO and voluntary program rules yield faster, better, and cheaper cleanups and have facilitated real estate transactions involving contaminated property. Participants can accurately estimate and factor cleanup costs into the transaction structure. Cleanup can be accomplished over a period of time, using cheaper techniques, rather than through a "dig and haul" strategy necessary only to get the work done before closing. And off-site groundwater can be carved out, leaving any liability with the seller, rather than using contractual provisions to try to allocate the liabilities between the transaction participants. For the real estate business in Illinois, TACO and the voluntary program are important improvements.

1. ILL. ADMIN. CODE tit. 35, § 742 (1997). TACO is used to establish cleanup objectives for cleanups in the voluntary program, the underground storage tank program, and the federally delegated hazardous waste permit and closure program. Id. § 742.105. As in many states, environmental laws in Illinois are similar to federal environmental laws, and the IEPA generally enforces state law under federal delegation.

Although the board recently adopted the TACO rule, the Illinois Environmental Protection Agency (IEPA) has used TACO as guidance for setting cleanup objectives for approximately the last two years.

2. Id. § 740. Although the voluntary program rule was promulgated only recently, the IEPA has operated a very successful voluntary cleanup program since 1986. Faced with state funding cuts, the IEPA cleverly combined a narrow provision allowing agreements to reimburse oversight costs with an ill-defined provision allowing the agency to "release" responsible parties, thus creating a de facto voluntary cleanup program. 415 I.L.C.S. 5/4(y); id. 5/22.2(m) (since repealed). Using this cobbled-together legislative authority, by 1996 the IEPA had enrolled some 480 active sites in its Pre-Notice Site Cleanup Program, the predecessor to the new voluntary program. IEPA, PRE-NOTICE STATUS REPORT (Oct. 28, 1996).

The voluntary program is truly voluntary. Enrolled sites can exit the program with a simple notice letter. IEPA officials say that since 1988 the agency has never pursued enforcement against an enrolled applicant that has left the program. The author is unaware of any claims to the contrary.

3. The American Society for Testing and Materials (ASTM) first published a risk-based approach to cleanup objectives, beginning with the standard for petroleum cleanups from underground storage tank sites. The standard has since been adapted for use with other contaminants. See ASTM E 1739-95, STANDARD GUIDE FOR RISK-BASED CORRECTIVE ACTION APPLIED AT PETROLEUM RELEASE SITES [hereinafter ASTM RBCA GUIDE].

4. The IEPA will review cleanups because private parties pay the agency's hourly rates. Basically, the regulators are "for hire," including their power to say that no further remediation is necessary.

5. See Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601-9675.

6. IEPA, THE VOLUNTARY CLEANUP PROGRAM IN ILLINOIS (Dec. 1988). At different times, there were various incarnations of this system. Basically, the idea was to combine the project manager's on-site knowledge with the agency's health, risk, and policy professionals.

7. 415 I.L.C.S. 5/4(y).

8. Id. Under Illinois law, the state attorney general is empowered to release claims belonging to the state. 15 I.L.C.S. 205/4. Nevertheless, the release was added to the law creating cleanup claims, and the Illinois legislature should be able to authorize releases of claims it created. At least, most practitioners believe, it would be difficult to claim additional response costs were necessary after the IEPA had issued its release based on a "successful completion of preventive or corrective action." Id. 5/4(y).

9. The IEPA deserves credit for starting a voluntary cleanup program using enforcement tools and adapting those tools to real estate transactions by internal agency policy and procedures. Still, the voluntary program was initially an alternative to enforcement, and the program worked like an enforcement proceeding.

10. The tiered approach is discussed in a narrative opinion and order the board issued when it promulgated TACO. See In re Tiered Approach to Corrective Action Objectives (TACO): 35 Ill. Adm. Code Part 742, Case No. R97-12(A) (Ill. Pollution Control Bd. June 5, 1997) [hereinafter TACO Opinion]. The narrative is useful to understand how all the rule's parts fit together. Similarly, the board promulgated the voluntary cleanup program rule with an accompanying opinion and order that describes, in a narrative, that rule's structure. See In re Site Remediation Program and Groundwater Quality: 35 Ill. Adm. Code 740 and 35 Ill. Adm. Code 620, Case No. R97-11 (Ill. Pollution Control Bd. June 5, 1997).

11. TACO Opinion, supra note 10, at 17.

12. Id. at 19.

13. Id. at 24. In addition to a custom risk assessment, tier 3 allows use of modified parameters in tier 2 equations, use of alternative models, use of probability analysis and sophisticated fate and transport models, proof of impractical remediation, and departure from the target risk level used for tiers 1 and 2. Id.

14. Id. at 12.

15. ILL. ADMIN. CODE tit. 35, § 742, app. B.

16. See infra discussion on TACO's Approach to Groundwater Contamination.

17. ILL. ADMIN. CODE tit. 35, § 742, app. C. TACO allows use of the equations from the ASTM RBCA GUIDE, supra note 3, the U.S. EPA, SOIL SCREENING GUIDANCE: USERS GUIDE (Apr. 1996), and the U.S. EPA, SOIL SCREENING GUIDANCE: TECHNICAL BACKGROUND DOCUMENT(May 1996).

18. The requirements for institutional controls and engineered barriers are fairly detailed. See ILL. ADMIN. CODE tit. 35, § 742, subpts. J and K.

19. TACO requires removal at all sites of any free product, which is liquid, flowable contamination. Id. § 742.305. Free product can migrate even without the influence of surface water.

20. Id. § 742.1010. Deed notifications are recorded notices of environmental contamination or recorded notices of institutional controls or engineered barriers. Property use covenants are promises that the property owner and operator will abide by the institutional controls and maintain the engineered barriers. These covenants "run with the land," and thus are enforceable against subsequent owners and operators of the premises. Id. § 742.1010(e).

Deed notifications and property use covenants are also required when establishing cleanup objectives based on commercial or industrial property use. For each of the three tiers, there are different cleanup objectives for commercial and industrial property (considered as one type or use) versus residential property. The effectiveness of an NFR letter issued for commercial/industrial cleanup objectives is contingent on the property use remaining commercial or industrial. Id. § 740.625.

21. The voluntary program rules require that the NFR letter be recorded in the property's chain of title in order to be effective. Id. § 740.620. In addition, most pathway exclusion options include recording enforceable restrictions on property use or operation. See id. § 742, subpt. C. Property owners are sometimes reluctant to record an NFR or deed restriction because of the potential diminishment in the property's value.

22. TACO Opinion, supra note 10, at 24. TACO allows the use of alternative fate and transport models (i.e., models of how contaminants move in the ground and groundwater) in a tier 3 evaluation. Id. In addition, TACO allows the use of "Monte Carlo" risk assessment, as the rule provides only that the risk assessment procedure must be "nationally recognized and accepted." ILL. ADMIN. CODE tit. 35, § 742.915(a). Monte Carlo risk assessment is a procedure that better evaluates the worst-case scenarios, and typically suggests a lower risk for contaminants left in place. For risk assessment professionals, this procedure better calculates the true risk of residual contamination.

23. See 415 I.L.C.S. 55/2 (legislative findings); Benjamin R. Vance, Total AquiferManagement: A New Approach to Groundwater, 30 U.S.F. L. REV. 803 (1996).

24. ILL. ADMIN. CODE tit. 35, § 742, app. B.

25. For each of the three approaches to groundwater cleanup, TACO also requires removal of any free product to the extent practicable. TACO Opinion, supra note 10, at 13, 22. In addition, the cleanup options may be limited depending on the "setback zone," i.e., the radial distance of a protective circular zone, of a potable water supply well. Essentially, the applicant must demonstrate that the contaminants' concentration levels do not and will not exceed the tier 1 objectives within the well's setback zone. Id. at 13. A particular setback zone is established for every well, but may be on the order of 1,500 to 2,500 feet.

26. Id. at 13.

27. For participants in real estate transactions, however, this alternative still presents the problem that groundwater remediation is necessary. Often, a groundwater remediation system is expensive to install, difficult to operate, and problematic to turn off. The need to operate the system after the transaction closing, along with the uncertainty of the operation costs, makes groundwater cleanup difficult to accommodate in a transaction.

28. The requirements for exclusion of the groundwater-ingestion pathway of exposure are found at ILL. ADMIN. CODE tit. 35, § 742.320.

29. Illinois has enacted a Groundwater Protection Act, 415 I.L.C.S. 55/8, which has made voluntary cleanups of groundwater difficult because almost all of the groundwater in Illinois is classified as drinking water or "almost" drinking water. Before the voluntary cleanup program rule, the board could find that a volume of contaminated groundwater was part of a "groundwater management zone," and that the cleanup standards, in effect, were held in abeyance until after several years of cleanup or attenuation. Now, the voluntary program rule provides that if the IEPA approves a cleanup plan, a groundwater management zone is automatically established until the cleanup is complete. ILL. ADMIN. CODE tit. 35, § 620.250.

30. 415 I.L.C.S. 5/4(y).

31. Id. 5/58.10(d). In order to make the NFR letter effective, the statute requires payment of a "no further remediation assessment" of the lesser of $ 2,500 or the oversight costs paid. Id. 5/58.10(g).

32. ILL. ADMIN. CODE tit. 35, § 740.625(a)(6).

33. Practically, is this a real risk? Most environmental professionals involved in cleanups stand by the adage that "You never know what's under the ground until you get under it." This is a corollary to another often repeated in the environmental business: "You know how much the cleanup will cost once it's finished." There are plenty of instances in which the site investigation might not identify all of the contamination, or might fail to define properly the extent of the contamination. To minimize the surprise risk, participants in real estate transactions should ensure that a thorough site investigation is done to find any contamination on the property.

34. Transaction participants are often confused about the legal effect of contaminated groundwater that migrates off the property before closing. Typically, a purchaser expects to be at risk of liability for all of the environmental problems caused by the property, including off-site problems. The purchaser, however, is at risk only as an owner of the property that is contaminated. Since the purchaser is buying only the contaminated property, and not the off-site property, the purchaser is liable only for the contamination on the property at the time of purchase. The former owner is liable for the off-site contamination as the person who "arranged for" the disposal of the off-site contamination. See Thomas v. FAG Bearings Corp., 846 F. Supp. 1382, 1386-87, 25 ELR 20448, 20450 (W.D. Mo. 1994).

35. The absence of successful personal injury and property damage suits against new owners suggests that this risk is theoretical.

36. TACO Opinion, supra note 10, at 24.

37. Id. at 19.

38. See ILL. ADMIN. CODE tit. 35, § 742.200 (defining "cancer risk").

39. See U.S. EPA, GUIDANCE FOR CONDUCTING REMEDIAL INVESTIGATIONS AND FEASIBILITY STUDIES, OSWER 9355.3-01 (Oct. 1988).

40. See ILL. ADMIN. CODE tit. 35, § 742, app. C. The "target risk" input for the remediation objective formula is in the numerator of the equation and is linear.

41. TACO does allow a departure from 10-6 risk-level protection, but only after an expensive and time-consuming risk assessment, and even then only with justification. Id. § 742.915(h). Using tier 1 and 2 cleanup objectives is easier than performing a risk assessment, but many consider a 10-6 risk level to be just too conservative. In numerous commercial and industrial real estate transactions, it will be necessary to go through the process of a risk assessment if only to take advantage of the difference in risk-level protection. The better approach would have been to set tier 1 and 2 cleanup objectives using a 10-4 or 10-5 risk level.

42. By April 1994, through the first 8 years of the program, the IEPA had issued 82 partial or full section 4(y) releases for voluntary sites. IEPA, THE ILLINOIS PRE-NOTICE PROGRAM: AN OVERVIEW OF RELEASED AND COMPLETED SITES (June 1994). From April 1994 to October 1996, the agency had issued an additional 108 section 4(y) releases, for a total of 190. IEPA, PRE-NOTICE SITE PROJECT STATUS REPORT (Oct. 28, 1996).