Continuing Questions Regarding Pennsylvania's Uniform Environmental Covenants Act

January 8, 2009
Client Alert Newsletter Forecast 2009

After its first full year of applicability, Pennsylvania's Uniform Environmental Covenants Act ("UECA") is still generating questions from the regulated community. UECA imposes new requirements for environmental covenants where engineering or institutional controls are currently or in the future will be used to demonstrate compliance for cleanups pursuant to Pennsylvania's Land Recycling and Environmental Remediation Standards Act ("Act 2") and Storage Tank and Spill Prevention Act ("Tank Act"). Importantly, UECA applies both prospectively and retrospectively, so that any existing instrument that imposes engineering or institutional controls to demonstrate compliance with Act 2 or the Tank Act must be converted to an environmental covenant that complies with UECA within the next four (4) years. Because the Pennsylvania Department of Environmental Protection ("PADEP") can require each current owner of the property to execute the covenant, the need to enact a UECA-compliant covenant could be a major issue for sites that have been remediated and subsequently subdivided and conveyed to multiple new owners.

While PADEP has indicated that it will be developing guidance relating to the conversion of existing instruments to UECA-compliant environmental covenants, it has yet to finalize or publish that guidance. In January, PADEP issued an updated version of the UECA Frequently Asked Questions document that is available on its website. PADEP's revisions clarify some of the reporting obligations that PADEP will require in UECA covenants and also clarify the ability of a party to rely on a local ordinance to prohibit the use of impacted groundwater. PADEP has indicated that it will continue to add additional questions to this list and also that it may in the future revise some of its previous responses.

It is worth noting that UECA also empowers Pennsylvania's Environmental Quality Board ("EQB") to develop and promulgate implementing regulations, but the EQB has yet to do so. We expect PADEP to issue new guidance regarding UECA and the EQB to issue the implementing regulations in the near future. Finally, while UECA is designed ultimately to standardize the content of environmental covenants, different PADEP regional offices have imposed different requirements, particularly with respect to contaminated groundwater migrating off site. It is likely that PADEP will develop a more standardized approach to this issue in the near future.