Legislature passes Climate Superfund Act Vermont Business Magazine

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.

Statute of Limitations on Cost Recovery

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).

Overview of Enforcement Agreements for Cleanup Work and Payment

The SOW sets forth the procedures and requirements for implementing the cleanup work at the site. In 2021, EPA introduced enhanced community involvement provisions in the model Remedial Design/Remedial Action SOW. EPA developed these community involvement provisions to better address community concerns, especially those communities potentially disproportionately impacted by environmental pollution. Similar provisions are being incorporated into other cleanup enforcement model statements of work. The legislative developments in Vermont, New York, California, Massachusetts, and Maryland reflect a broader trend of state-led initiatives to target companies involved in the extraction, production, and use of fossil fuels, and to controversially shift the costs for domestic and international climate change policies onto these companies. This comes at a time when the oil and gas industry is supporting millions of jobs, providing reliable energy, and ensuring the nation’s energy security.

• 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.
• The bill would require the State Treasurer to complete an assessment of the cost to the State and its residents of the emission of covered greenhouse gases during the period January 1, 1995 through December 31, 2024.
• A former industrial site has been contaminated with heavy metals due to the actions of several companies over the past 50 years.
• 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.

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 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.

• Responsible parties under the bill would include “any entity (or a successor in interest to such entity described herein), which, during any part of the covered period, was engaged in the trade or business of extracting fossil fuel including coal or refining crude oil” and is responsible for more than 1 billion tons of covered GHG emissions, as determined by the Department.
• Second, $300,000 is appropriated from the General Fund to the Office of the State Treasurer in Fiscal Year 2025 to support hiring consultants or third-party services to assist in completing the assessment of the cost to the State and its residents of the emission of covered greenhouse gases.
• Companies identified as responsible parties will face increased operational costs due to mandatory contributions to the fund.
• 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.

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These model settlement documents are available from the Cleanup Enforcement Model Language and Sample Documents database. Additionally, the imposition of strict and joint liability provisions exposes businesses to greater financial risks. Companies may face substantial liabilities for both merely engaging in longstanding, permitted, and lawful oil extraction activities. On May 30, 2024, Vermont’s Republican governor, Phil Scott, allowed Vermont’s S 259 — also referred to as the “Climate Superfund Act” — to become law without his signature.

Types of Superfund Response Costs

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.

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 Superfund Cost Recovery sites is limited to access to our extensive developer APIs.

Quiz: Cost Recovery in Environmental & Water Treatment

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 fact sheet does not elevate consideration of, or establish a new role for, cost in the Superfund program. 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. This fact sheet was developed pursuant to the Superfund Administrative Reforms announced on October 2, 1995 by Administrator Browner. The principal settlement agreements used by EPA to get Superfund sites cleaned up are referred to as “Work” agreements.” EPA will negotiate an agreement (in the form of an administrative settlement or judicial consent decree) with a PRP that formalizes the work that will be done at a site and other requirements that PRPs must follow, including those related to community involvement during the cleanup.

The process begins with the Environmental Protection Agency (EPA) identifying the PRPs and investigating their role in the contamination. The EPA then sends a «Notice of Potential Liability» to the identified PRPs, outlining the allegations and potential cost recovery obligations. Second, $300,000 is appropriated from the General Fund to the Office of the State Treasurer in Fiscal Year 2025 to support hiring consultants or third-party services to assist in completing the assessment of the cost to the State and its residents of the emission of covered greenhouse gases.