There have been several developments in Michigan that directly affect businesses and future business development in the state.  In this blog, we share three specific updates:

1. Seven House and Senate Bills that as drafted, will drastically change site assessment and remediation efforts and Brownfield redevelopment.
2. A recent Environmental Justice Agreement in Michigan.
3. Proposed Updates by the Great Lakes Water Authority.

Seven House and Senate Bills Threaten to Overhaul Michigan’s Economy

The seven bills outlined below, in our opinion, will greatly restrain Brownfield programs, harm urban redevelopment, and put Michigan at a competitive disadvantage with surrounding states. This comes at a time when Michigan’s economy is already anemic. In discussing and comparing the economic growth rates of various states, economist, David Bahnsen recently stated, “You’re looking at Michigan with 0.63% job growth since 2020…”

Background

Many of us remember the significance of establishing Part 201 of the Natural Resource and Environmental Protection Act (NREPA) Act 451 in 1994.  NREPA gave us the Baseline Environmental Assessment (BEA) that encouraged redevelopment of brownfield properties.  The changes meant Michigan would no longer hold non-liable parties responsible for contamination they did not cause (if they conducted a BEA and performed due care).  This was a game changer for urban redevelopment and it helped to preserve Greenfield sites.

Urban mayors were supportive of the change as it gave developers an impetus to invest in idled urban properties that were “untouchable” without the liability protection under the new legislation.  The liability protection that came with the new legislation also meant lenders could provide capital for redevelopment without incurring unnecessary and unacceptable financial risk.

Part 201 of NREPA, which allowed for risk-based closures, was a boon for the development of idled Brownfield properties.

House and Senate Bills

Seven Michigan bills threaten Michigan’s ability to compete with other states to attract and retain business. We have been tracking these developments over the past year during our involvement in environmental working groups (Michigan Chemistry Council and Michigan Manufacturers Association).  If passed into law, it will “gut” Michigan environmental clean-up law.

Below are the Bills as described by House Democrats on their website.

HB 5247 (Koleszar) / SB 605 (Irwin) will give EGLE and the public more information about cleanups and polluted sites.

HB 5242 (Morgan) / SB 606 (Moss) will require polluters to pay for land and water to be restored to usable condition as much as technically feasible, so that restricting access to polluted areas does not substitute for cleanup.

HB 5245 (Arbit) / SB 607 (Chang) will enable EGLE to set cleanup criteria without easily blocked APA rulemaking.

HB 5246 (Tsernoglou) / SB 608 (Geiss) will require businesses with large amounts of potentially polluting materials to post up-front financial assurance to cover any cleanup.

HB 5243 (Neeley) / SB 609 (McCann) will empower the state to bring claims on behalf of the public to cover cleanup costs and damage to natural resources due to contaminants like PFAS not known to be harmful at the time the limitation period expired for other contaminants.

HB 5241 (McKinney) / SB 610 (Shink) will enable people exposed to hazardous substances to bring a claim against the polluter to cover the costs of medical monitoring needed to detect a condition linked to the exposure.

HB 5244 (Skaggs) / SB 611 (McMorrow) will set a fairer clock for people harmed by pollution to access justice through the courts, starting the statute of limitation period when the person discovers the claim.

Dragun’s Concerns about the Proposed Legislation

Below we discuss some of our concerns. This is not an exhaustive look at the proposed legislation.

First, the way the bills are framed, they seem to suggest that those who are responsible for a current or historical release do not currently pay for their environmental cleanup obligations.  This is not true.  This type of rhetoric is harmful to the business climate in Michigan.

The bills are certainly not pro-development and may push developments to other states.  They will drive up the cost of remediation efforts and reaching an “endpoint” will be nearly impossible.  The additional requirements specified in the bills will add significant cost to ownership of contaminated properties without reducing the actual exposure risk posed by the contaminants.

BEAs & Due Care

With respect to BEAs, BEAs are submitted from a few weeks before closing on the transaction up to 6 months after the transaction.  We have worked on several sites that pushed that 6-month timeframe.

Under the amendments, EGLE has 90 days to review the Due Care plan while the buyer waits for EGLE’s decision.

One of the many significant changes outlined in the bills will require all due care plans to be approved by the Michigan Department of Environment, Great Lakes and Energy (EGLE).  The reviews are currently optional and rarely requested.

The bills would require monitoring for a release or threat of a release and report to EGLE every five years.  This would, in most cases, create unnecessary work and expense for businesses and EGLE staff.  Under current law, due care plans are a “living document” that requires owners of contaminated properties to review their Due Care plans to evaluate changing property conditions.

Exacerbation and Migration

In defining “exacerbation,” the legislation includes migration of contamination caused by the new owner. The bill defines migration as contamination moving beyond the area delineated by the new owners’ BEA. Based on this, it appears that presence or absence of a contaminant (required for a BEA) will not be sufficient. Delineation of contamination at the time of acquisition would be potentially a significant expense. Below is the text from SB 605 regarding exacerbation of contamination.

“Exacerbation means….migration of contamination…above the target detection limit and beyond the boundaries of the property that is the source of the release at levels above cleanup criteria for unrestricted residential use unless a criterion is not relevant because exposure is reliably restricted as otherwise provided in this part.”

Under these changes, a non-liable party would now be required to control contamination that is migrating off site. This is a strong disincentive to non-liable parties to redevelop underutilized urban properties in Michigan.

Remedial Action Plans

The bills require all remedial action plans (RAPs) to be reviewed and approved by EGLE.  Currently, a person preparing a RAP may self-implement without EGLE review or approval.

Senate Bill 605 would permit EGLE to require liable property owners (even those who thought they had successfully completed a closure) to prepare and implement a new RAP following a number of specified events, includng new scientific information regarding the contaminants.

Under the proposed legislation, all remedial actions must meet the most stringent, unrestricted residential standards.  Exceptions are only permitted if EGLE decides that it is not technically feasible to meet the restricted residential standard. Below is the text from SB 606.

“Except as otherwise provided…attain a degree of cleanup and control of the environmental contamination addressed by the remedial action that meets all of the following requirements…to the extent technically feasible, meets the cleanup criteria for unrestricted residential use, restores any affected land, and restores any affected aquifer to state drinking water standards.”

Urban properties or even idled industrial areas in more rural communities would be less attractive to developers.  Depending on the history of the site, remediating these sites could cost tens of thousands if not hundreds of thousands of dollars.  The likely outcome would be to either push developments to Greenfield sites or other states that still use a risk-based approach (like Michigan currently uses).

These proposed changes are, in our opinion, troublesome and will put our state at a significant disadvantage in attracting new businesses to Michigan, and in some cases suppress businesses expanding their current operations

If you are so inclined, you may want to reach out to your elected representatives to share your thoughts.

Environmental Justice

The second item we want to bring to your attention is a new environmental justice (EJ) agreement in Michigan. Over the past few years, we have covered the growing reach of EJ under the Biden-Harris administration.

Recently, Michigan has joined the effort to use EJ (which is an Executive Order).  According to Inside EPA (paywall protected) “The state of Michigan signed an agreement with environmentalists under Title VI of the Civil Rights Act requiring that all hazardous waste facility permit applicants perform environmental justice (EJ) analyses, an effort that one advocate says targeted the state, rather than EPA, because of fears a Trump administration would be unsympathetic to such efforts.”

EGLE signed the August 29, 2024, agreement to resolve a complaint filed in 2020 by the Michigan Environmental Justice Coalition, the Sierra Club and five individuals.

This agreement applies to new facility sitings, renewals and expansions, and it requires state officials to review the plans and to conduct a separate cumulative impact analyses for each application.

While this currently applies only to hazardous waste facilities, it is not a stretch to image that EJ could eventually be expanded to cover other environmental permitting programs.

Great Lakes Water Authority

Finally, for those who are in Southeast Michigan and served by the Great Lakes Water Authority (GLWA), there was recent proposed change.

The GLWA provides water and wastewater services to more than 100 municipalities in southeast Michigan.  This service area covers millions of customers.

On September 26, 2024, The Great Lakes Water Authority issued a new set of proposed updates to the Rules and Regulations for Regulatory Control Programs

1. Added 11 new PFAS compounds that have been identified by EGLE to the definition of PFAS.
2. Modified the definition of “Total Phenolic Compounds” to be the quantitative total recoverable phenols determined by US EPA Method 420.1: 4-Aminoantipyrine (4AAP).
3. Modifications of local pollutant discharge limitations:
   1. Total Phosphorus Limit = 125 mg/l (was 150 mg/l),
   2. Cyanide, Available Limit = 1.5 mg/l,
   3. Copper Limit = 0.72 mg/l (was 3.0 mg/l),
   4. Mercury Limit = 0.002 mg/l (was 0.01 mg/l),
   5. Perfluorooctoane Sulfonic Acid Limit (PFOS) = 65 ng/l, and
   6. Total Phenolic Compounds Limit = 5 mg/l (was 1 mg/l).

The Nature of Environmental Regulations

Environmental regulations and the politics that often drive them are moving targets.  As we have in the past, we will continue to provide updates in our blogs and newsletters.

If you have any questions about the issues covered above, contact Jeffrey Bolin, M.S., CHMM or Matthew Schroeder, M.S., P.E. at 248-932-0228, Ext. 125 and 117 respectively.

Dragun Corporation does not use artificial intelligence in drafting our blogs or any other material.

Alan Hahn drafted this blog.  Alan has an undergraduate degree in Environmental Studies and completed a graduate program in Environmental Management.  He has worked in environmental management for 45 years.  He has written hundreds of blogs and articles.  His published work includes Michigan Lawyers Weekly, Detroiter, Michigan Forward, GreenStone Partners, Manure Manager Magazine, Progressive Dairy, and HazMat Magazine.

Jeffrey Bolin, M.S., reviewed this blog.  Jeff is a partner and senior scientist at Dragun Corporation.  He is a published author, frequent speaker, and expert witness.  His expertise in environmental due diligence, PFAS, vapor intrusion, and site assessments has led to projects in the US, Canada, and overseas.  See Jeff’s Bio.  

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