We have been closely monitoring the progress of the United States Environmental Protection Agency (“EPA”) proposed rule to designate perfluorooctanic acid (“PFOA”) and perfluorooctane sulfonic acid (“PFOS”), two per- and poly-fluoroalkyl substances (“PFAS”), as hazardous substances under the federal Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”).  If finalized, the rule would have far-reaching consequences on closed and in-progress Superfund sites, state cleanup program requirements, and commercial real estate transactions. 

As it relates to commercial real estate transactions, the proposed rule, if finalized, would bring PFAS within the scope of Phase I Environmental Site Assessments (“ESAs”).  This is anticipated to lead to a significant increase in the amount of recognized environmental conditions (“RECs”) identified by environmental consultants in Phase I ESAs.       

The proposed rule was posted for public comment between September 6, 2022, and November 7, 2022.  EPA received over 64,000 comments, including numerous comments from private industry and trade groups, utilities and water service providers, and state and municipal agencies.     

The final rule was initially estimated to go into effect in August 2023.  On June 13, 2023, EPA changed its estimate to February 2024, presumably due to the large volume of public comments.    

The following summarizes some of the most significant negative public comments submitted to EPA:

• EPA’s evaluation of the substantial cost burden of the proposed rule is inadequate because it does not account for increased clean-up costs at Superfund and non-federal sites, especially by municipalities, publicly owned treatment works, and other “passive” users. 
• The proposed designation would result in a significant expansion of sites at which remediation is potentially required, including those where cleanup has already been considered complete, resulting in substantial uncertainty for the regulated community. 
• The proposed rule would significantly increase the costs to dispose of waste streams containing PFAS.
• The proposed rule would result in disproportionate CERCLA liability on water service providers and wastewater treatment facilities.
• EPA should clarify whether the proposed designation would result in new requirements for sites on the National Priorities List (“NPL”) which have completed site investigations or obtained regulatory closure.  

EPA has not yet responded to any of the comments submitted to the proposed rule.  Typically, EPA will respond by issuing a lengthy comment response document on the same day the final rule goes into effect.  We will provide additional updates on this proposed rule as the rulemaking process progresses.  We also are following EPA’s effort to potentially regulate seven additional PFAS and/or categories of PFAS as hazardous substances under CERCLA, as announced in an April 13, 2023 Advance Notice of Proposed Rulemaking.  

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