UECA Implementing Regulations Proposed

January 8, 2010
Client Alert Newsletter Forecast 2010

Pennsylvania's Uniform Environmental Covenants Act ("UECA") requires a party relying on engineering or institutional controls to demonstrate compliance with the Land Recycling and Environmental Remediation Standards Act ("Act 2") or Storage Tank and Spill Prevention Act ("Tank Act") to document those controls in a UECA covenant. UECA also applies retrospectively, such that any existing instrument that imposes engineering or institutional controls to demonstrate compliance with Act 2 or the Tank Act must be converted to a UECA covenant by February 2013. Now entering its third year of existence, UECA continues to generate questions and concern from the regulated community. On March 6, 2010, the Pennsylvania Department of Environmental Protection ("PADEP") published proposed regulations to implement UECA. A 30-day public comment period on the proposed regulations will close on April 5, 2010.

According to the preamble to the proposed regulations, PADEP has attempted to tailor parts of the regulations to clarify certain ambiguities in UECA. The proposed regulations do clarify which instruments will need to be converted to a UECA covenant and who must perform that conversion, and the regulations also provide a means to defer that conversion until the property is subsequently transferred. The regulations also specify that PADEP will not impose additional obligations on the property as part of the conversion.

However, the proposed regulations also appear to create a host of new issues by: (1) requiring that the UECA covenant generally be submitted at least 30 days before the submission of the final report documenting the remedial activities, even though the content of the UECA covenant is typically dependent upon what is in that final report and cannot be finalized in advance; (2) requiring the use of PADEP's model UECA covenant, even though the current model covenant includes content that is not required under UECA; and, (3) requiring the submission of a list of the occupants of, and those with a recorded interest in, the property - a requirement that is not established by UECA. In addition, other important issues have not been addressed in the proposed regulations. For example, because PADEP can require each current owner of the property to execute the covenant, the need to enact a UECA-compliant covenant has been problematic for sites that have been remediated and subsequently subdivided and conveyed to multiple new owners.