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Michigan Baseline Envrionmental Assessments

The Michigan Baseline Environmental Assessment (BEA) was created by the 1995 amendments to Part 201 of the Michigan Natural Resources and Environmental Protection Act (NREPA). Entities that file properly completed BEAs with the Michigan Department of Environmental Quality (MDEQ) in a timely manner are not liable for cleanup of existing contamination at the site under Michigan law. However, federal liability may still exist (refer to AAI). Therefore, tenants and owners who file appropriate BEAs are not responsible for response actions beyond any applicable due care requirements. It should be noted that property owners in each individual state are subject to their respective state's regulatory agencies and individual agency ordinances.

BEA Background

The NREPA defines a BEA as

. . . an evaluation of environmental conditions which exist at a Facility at the time of purchase, occupancy, or foreclosure that reasonably defines the existing conditions and circumstance at the Facility so that, in the event of a subsequent release, there is a means of distinguishing the new release from existing contamination . . . (section 324.20101)

The main component of a BEA is that the site must be considered a "Facility." A Facility, defined in Part 201 of NREPA, is an area, place, or property where a hazardous substance in excess of the concentrations which satisfy the requirements of section 20120a(1)(a) or (17) or the cleanup criteria for unrestricted residential use under Part 213 has been released, deposited, disposed of, or otherwise becomes located. However, if response activities that satisfy the cleanup criteria for the residential category provided for in NREPA, Part 201 have been completed on a site, a BEA cannot be filed for the site.

To properly file a BEA, all information on the levels of contaminants must be determined within 45 days from the date of purchase, occupancy, or foreclosure. R&W recommends that the data-gathering process begin before purchase, occupancy, or foreclosure, allowing for additional data collection if information gaps exist in the determination of the contaminant level(s). In the case of either disclosure or determination, the BEA must then be filed with the MDEQ within eight months of purchase, occupancy, or foreclosure.

Categories of BEAs

On March 11, 1999, rules were adopted which established the following three categories of BEAs:

Category N BEAs are appropriate for properties where new owners and operators, including investors and municipalities who hold idle property for resale, will not use hazardous substances. This also includes lenders who simply hold idle property after foreclosure until it is transferred to another party.

Category D BEAs are required when a specific new use of the property includes significant use of hazardous substances different from those known or likely to be the contaminants that caused the property to be a Facility.

Category S BEAs are required when the designated operations of the property will involve the use of the same hazardous substances known or likely to be present at the Facility. Category S BEAs are also appropriate when no limits on future hazardous substance use are identified.

The current Instructions for Preparing and Disclosing BEAs encourage alternatives to distinguishing existing contamination from potential future releases at the Facility. These alternatives can consist of engineering controls such as barriers and clean zones. The rules also present options such as stipulated conditions. While such conditions create exemptions to the BEA protection, these agreements increase flexibility and can help minimize the cost of BEA preparation.

The MDEQ has compiled a BEA Citizen's Guide which presents additional information about the BEA process.

Michigan Due Care Plans

The BEA process does not protect the filers from federal law or remove due care obligations. Due care provisions under Section 20107a of Part 201 Administrative Rules require that a person who owns or operates property with the knowledge that it is a Facility must undertake the following measures:

• Prevent exacerbation of the existing condition
• Mitigate unacceptable exposure to hazardous substances and to allow the intended use of the Facility while protecting public health and safety
• Take precaution against reasonably foreseeable acts or omissions of a third party and the subsequent consequences

The MDEQ has compiled a Due Care Citizen's Guide. These due care requirements are similar to continuing obligations required at the federal level.

R&W regularly assists clients in completing BEAs, designing and constructing engineering controls (if necessary), and establishing and implementing appropriate due care measures during the acquisition of property.

Please feel free to contact either Mark Westra or Bill Bosze for more information.

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