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VOLUNTARY ACTION PROGRAMS

Voluntary Action Programs, as they are generically referred to in this article, were initially implemented by a handful of states in the late 1980’s and early 1990’s as a response to federal Superfund and state Superfund-equivalent legislation. This legislation defined strict, joint, and retroactive liability to hazardous waste sites. In doing so, the legislation may have deferred cleanup efforts based on the volume and complexity of sites creating brownfields properties. The legislation also posed a significant risk to real property investment and acquisition.

With the enactment of Brownfields Law all states as well as the District of Columbia and Puerto Rico have adopted Voluntary Action Programs that at a minimum address brownfields redevelopment issues, but many have expanded programs to address other environmentally problematic sites. In fact, the programs are intended to augment the state’s version of Superfund. The programs were a response by the states to the severity of known environmental problems, administrative capacity, economic resources, and political and development pressures. Approximately half the states have memorandums of agreement regarding their program with the U.S. EPA, which is expected to increase.

The general objective of the Voluntary Action Program is to facilitate cleanup at sites that would otherwise remain environmentally impacted, most notably brownfield properties, for re-use. The primary incentive of the programs is some level of liability relief with flexibility and efficiency in negotiating through the program, which represents a shift from regulatory control to regulatory incentive. However, specific liability relief and incentives can differ substantially between states. Regulators also benefit from the programs in achieving results with decreased enforcement cost and funding through participation.

In general most programs have few restrictions with the primary eligibility exclusion being a property that is a federal Superfund site. The programs may have other restrictions, depending upon state, and can include for example underground storage tank sites. The programs functionality also differ in other ways among the states. Of primary concern is the difference in how rigorous the program can be, agency agreements and interaction, capacity, timing and participant cost.

Many experts question the quality of the remediation performed versus the liability relief extended and in the bigger picture the impact benefit of the programs on the environment. From an academic perspective the programs tend to be passive and market driven. Some studies have shown that mandatory pollution prevention programs out perform voluntary programs. As a participant they offer management solutions beyond the narrowness of obtaining pristine results under regulatory controlled conditions. In that regard, most programs tailor risk based alternatives that evaluate contaminants, exposure pathways, and land use with respect to technical feasibility, controls and restrictions.

For due diligence purposes, these programs provide an evaluation and scope guidance tool for intrusive investigations that are tangible to the buying, selling and lending parties. Although the investigations are not typically conducted with the intent of program submission, they are conducted to parallel many program guidance points, for example recommended sample strategies and cleanup objectives. If applicable to the property transaction or development, the due diligence results, usually with some reporting modifications, can be used as an entry point into the programs, which among other things would provide regulatory review and recommendation.