The Massachusetts Department of Environmental Protection promulgated revisions to the Massachusetts Contingency Plan in the spring of last year. One of the changes made to the clean-up regulations was to change the terms used for the filings made to “close-out” a site from “Response Action Outcome” statements (or RAOs) to Permanent Solutions or Temporary Solutions. Part of the rationale for this change was to allow parties unfamiliar with the MCP Regulations to be a little clearer that the filing of these documents amounts to a “closure” of the site. (Previously, it was sometimes difficult to explain to an out-of-state party that an RAO was all that was required or could be obtained for a site closure. Obtaining a “Permanent Solution” just sounds more final.)
However, this change may have unintended consequences. An RAO filing would have been under one of three classifications – Class A, B or C. However, under the revised MCP there is now no unified definition of closure that is equivalent to RAO; rather a closure report is now called either a Permanent Solution or a Temporary Solution. Class A or Class B RAOs are essentially equivalent to a Permanent Solution, and a Class C RAO is essentially equivalent to a Temporary Solution under the new regulations. However, under the old MCP, a clean-up that achieved an “RAO that complies with the MCP" might have included a Class C RAO as a perfectly reasonable outcome - for example, where groundwater contamination remains after a certain period, or contamination remains under a building, but does not affect the uses at the site. Under the new regulations, an end result which achieves a “Temporary Solution” may be far less acceptable, even though a Class C RAO and a Temporary Solution may be exactly the same.
In other words, where a Class C RAO may have been acceptable in some transactions, many lenders or buyers may now only be willing to accept that a “Permanent Solution” be achieved. Lenders or buyers may be unwilling to agree that the current owner can achieve either “a Permanent Solution or Temporary Solution”. As a result, DEP’s effort to be more descriptive may actually limit the remediation actions that will be commercially acceptable.