New SBA Environmental Review Policy Effective October 1, 2011

Effective on October 1, 2011, the Small Business Administration has revised its SOP relating to environmental review and environmental investigations. Any lenders participating in the 7(a) or CDC loan programs must follow the new requirements under SOP 50 10 5(D). As of October 1, 2011, all documentation submitted in support of SBA loans needs to be updated to reflect SOP 50 10 5 (D), not its predecessor, SOP 50 10 5(C).

Some of the important modifications to the SBA’s environmental due diligence requirements under SOP 50 10 5(D) include:

• The only change to the NAICS code list of environmentally sensitive industrial classifications is for 8111 Automobile Repair and Maintenance. All loans under this NAICS code must start with an AAI-complaint Phase I environmental site assessment with the exception of "car wash only" facilities, which can start with a Transaction Screen.


• If the Property is a unit in a multi-unit building (defined as any non-industrial, multi-unit building that is comprised of four or more individual units), the investigation must proceed as follows:
  -For loans $150,000 and below, the Environmental Investigation may begin with an Environmental Questionnaire.
  -For loans more than $150,000, the Environmental Investigation must, at a minimum, begin with an Environmental Questionnaire and a Records Search with Risk Assessment.


• Within the unique requirements for gas station loans, the SBA:
  - expanded the definition of gas station loans to also include "commercial fueling facilities;" and
  - replaced the previous requirement for UST testing with a requirement that the environmental professional ensure compliance with all state requirements pertaining to tank and equipment testing.


• The provisions for conducting a lead risk assessment for lead based paint and testing for lead in drinking water for certain "special use facilities" (e.g., day cares, nursery schools) were expanded to include "residential care facilities occupied by children."


• To the definition of Environmental Questionnaire, the SBA allows for:
  - The EP to assist with the responses to the questionnaire.
  - Use of the ASTM's questionnaire for Transaction Screens ( ASTM E1528-06) as a protocol for the Environmental Questionnaire.


• To the definition of "Phase I ESA," the SBA added language from the EPA’s AAI rule that allows a person who is not a qualified EP to assist in an AAI-compliant Phase I, provided the person works under the supervision or responsible charge of a qualified EP and the EP reviews and signs the report.

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements, including Records Search With Risk Assessment of any property nationwide. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.




For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Draft Revision To ASTM Standard For Phase 1 ESA Completed

The E1527 task group has completed the draft revision to E 1527 and the draft has been submitted to the E50.02 subcommittee for review and input. After initial discussions and review of recent court interpretations involving Phase I ESAs, the overall objective that was established to guide the task group through this revision process was to clarify the process and strengthen the deliverable. The task group has coordinated these revision efforts with EPA, and anticipates completing the full ASTM balloting process no later than late 2012 to allow EPA time to complete its process necessary to reference the updated standard by the end of 2013.

Some of the key elements of the proposed modifications include the following:

• Historical Recognized Environmental Conditions (HRECs): The task group recognized that Environmental Professionals (EPs_ are addressing HRECs with residual contamination differently, so the goal was to establish consistency in how these conditions are described and presented in the final report.
• User Responsibilities: The Group believed that is broad industry confusion about the user responsibilities. The task group did not propose a change to the definition of the user, but the revised standard does explain that a user seeking an LLP or an EPA brownfield assessment grant has certain obligations, in accordance with the CERCLA statute and as specified in the EPA All Appropriate Inquiries rule.
• Regulatory Agency File Reviews: The task group generally agreed that a review of agency file records should be conducted if the property is identified on one of the standard record source databases outlined in section 8.2.1. A new section 8.2.2 has been added to emphasize the need to conduct agency file reviews, recognizing that this effort is subject to reasonable time and cost constraints. This is particularly important with the connection to Continuing Obligation requirements that must be met after property acquisition to maintaining an LLP.

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Revised ASTM Standard For Phase 2 Environmental Site Assessment

ASTM has revised the standard practice guidance for conducting Phase 2 Environmental Site Assessment (ASTM E1903 - 11 Standard Practice for Environmental Site Assessments: Phase II Environmental Site Assessment Process). The revised guidance provides practical procedures for further assessment of a commercial property with recognized environmental conditions (REC). It is intended to assist in the evaluation of known releases or likely release areas identified by the user or Phase II Assessor.

Some of the significant changes to the revised standard method include:

• Language to confirm that the Phase II Assessor does not provide legal or business advice


• Use of a scientific approach, which is a collaboration with the servicer provider and user


• Revision of “Assessor” definition to incorporate “Environmental Professional” definition


• Concept that assessment steps are to be implemented “in the manner and level of detail appropriate to achieving the objectives”
  
  

The revised standard practice is intended for use on a voluntary basis by parties who wish to evaluate known releases or likely release areas identified during a Phase I ESA. The practice does not address the evaluation of business environmental risks in light of data collected through the Phase II ESA. Such evaluation is a function of site- and transaction-specific variables, and of the user’s objectives and risk tolerance. However, this practice assumes that the Phase II ESA process will be planned and conducted with such variables in mind, and that the user will evaluate legal, business and environmental risks in light of known data relating to the particular site and transaction, and in consultation with legal and business advisors as well as the Phase II Assessor.

Likewise, ASTM E1903-11 does not define the threshold levels at which target analytes pose a concern of significance to the user. Users may apply this practice not only in light of applicable regulatory criteria and relevant liability principles, but also to meet self-defined objectives.

Regarding reliance on the Phase II, the revised ASTM standard does not define whether or to what extent any person other than the user may use or rely upon a Phase II ESA prepared for the user. The appropriateness of third party use or reliance is a contractual matter that should be addressed between user and Phase II Assessor.

ASTM E1903-11 lays out basic principles that are an integral part of the practice of conduct Phase II investigations, including the elimination of uncertainty, the significance of the failure to detect specific chemicals, the limitations of information, and the significance of possible analytical laboratory error.

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Iowa Grant Program To Fund Environmental Assessment And Cleanup

The Iowa Department of Natural Resources – Financial and Business Assistance (FABA) Program has created the Derelict Building Grant Program. The program was established to assist small communities and rural counties in improving the attractiveness and appearance of their jurisdictions by providing them financial assistance to address derelict buildings. In accordance with the statutory requirement on how these funds are to be used the emphasis will be on landfill diversion through the recycling and reuse of building materials.

The eligibility requirements will entail the derelict building be located in a town or unincorporated county area of 5,000 residents or less and require the building to be owned or in the process of being owned by the town or county. The program will provide the following:

100% reimbursement for a certified Asbestos Containing Material (ACM) inspection.
100% reimbursement, not to exceed $5,000, for removing ACM. A 50% cost share is required for those costs exceeding $5,000.
100% reimbursement not to exceed $3,000 for conducting a Phase I Environmental Audit. Applicant is responsible for all costs exceeding $3,000.
50% reimbursement not to exceed $5,000 for conducting a Phase II Environmental Audit.
Building Renovation: If the building is going to be renovated, 50% reimbursement not to exceed $25,000 is available for offsetting costs related to removing materials for reuse, either at the site or offsite, or for recycling. The grant also compensates for the purchase and installation of reused or recycled materials that will be incorporated into the project.
Deconstruction: If the building is going to be deconstructed, 50% reimbursement not to exceed $50,000 is available for offsetting costs related to deconstruction.

The program is funded by the DNR’s Solid Waste Alternatives Program (SWAP) for the next three years. DNR is partnering with Keep Iowa Beautiful in the application and review process.

Caltha LLP assists clients in Iowa and nationwide in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Renewable Energy Projects Through RE-Powering America’s Land Initiative

U.S. Environmental Protection Agency (EPA) is soliciting applications from states, tribes, regional governments, and communities that are interested in the development of renewable energy on current and formerly contaminated properties. The opportunity is offered through EPA’s RE-Powering America’s Land initiative, which takes a multi-pronged approach to site cleanup and development of renewable energy production facilities on potentially contaminated land. Potentially contaminated lands that are being considered include Superfund, brownfields, RCRA corrective action, and former landfill or mining sites.

The US Department of Energy’s National Renewable Energy Laboratory will conduct renewable energy feasibility studies for the selected sites to determine the best renewable energy technology for the site, the optimal location for placement of the renewable energy technology, potential energy generating capacity, the return on the investment, and the economic feasibility of the renewable energy projects.

Through this initiative, potentially contaminated sites will be reused and redeveloped to increase renewable power generation, while also improving communities, creating jobs, and decreasing the use of greenspace necessary for renewable power plants. Proposals are due to EPA by May 20.

Caltha LLP assists public & private sector clients in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Environmental Review Requirements Under New SBA 504 Refinance Program

In response to the significant volume of commercial real estate loans that will mature between now and December 31, 2012, the U.S. Small Business Administration (SBA) has launched a new, temporary 504 refinancing program. Structured much like the SBA's traditional 504 loan program, borrowers cooperate with third-party lending institutions and SBA-approved Certified Development Companies (CDC).

SBA began accepting applications for financing under this program on February 28 and will keep the program in effect until September 27, 2012. Congress authorized SBA to approve up to $15 billion in loans under this program ($7.5 billion in both fiscal 2011 and 2012). This funding is designed to help small business owners who are having difficulty refinancing loans because of record-high real estate values when the loans were originated.

SBA has indicated that the environmental review requirements for 504 refinancing will be the same as those of the SBA's standard 504 (and 7(a)) programs, as detailed under SOP 50 10 5(c). This includes mandatory Phase 1 environmental Site Assessment (ESA) for certain types of properties, and requirements for Transaction Screening Assessment or Records Search With Risk Assessment (RSRA) for other types of properties.

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Comparison Between Phase 1 ESA and Property Condition Assessment

How does a Property Condition Assessment differ from a Phase I Environmental Site Assessment (ESA)?

In 2008, ASTM published “Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process” (ASTM E 2018-08) to define the process for conducting a Property Condition Assessment (PCA).

Actually, a PCA and an ESA have only minimal overlap, and are often complimentary. An ESA is performed to identify “Recognized Environmental Conditions (REC), which are related to releases or threatened releases of petroleum products and hazardous substances. An ESA report also has some specific regulatory aspects, related to Landowner Liability Protections (LLP). [Read more about LLPs]. ESA must be performed by “Environmental Professionals” meeting specific qualifications [Read more about qualification requirements].

If you are purchasing real estate and are concerned about environmental liabilities, a Phase I ESA is needed.

A PCA is also a type of due diligence, pre-purchase, pre-lease, or post-lease inspection. However, the PCA evaluates the physical condition of buildings, systems and equipment at the property. A PCA identifies “red flags”. There are no specific qualifications required for persons performing PCAs. Because if this, there is no guarantee that the assessor’s qualifications will meet the client’s needs, simply because the assessor uses the ASTM standard.

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Vapor Intrusion To Be Added To SUPERFUND Ranking

U.S. EPA is proposing to amend the ranking system used to assess potential “Superfund” sites to include potential vapor intrusion. The Hazard Ranking System (HRS), required by the Superfund statute, is the primary mechanism used by EPA to assess the relative threat associated with actual or potential releases of hazardous substances.

The HRS includes four scoring pathways - ground water, surface water, air and soil exposure. Additional pathways have been identified by EPA as posing significant threats to human health and the environment, and one such pathway is vapor intrusion. Vapor intrusion occurs when contaminants enter into indoor spaces, generally residences, from environmental sources such as contaminated ground water or contaminated soil.

Historically, EPA's Superfund program has responded to vapor intrusion contamination by two mechanisms: (1) through its emergency response program at sites not on the NPL, or (2) through sites placed on the NPL because of other pathway-related risks. In May 2010, the Government Accountability Office (GAO) issued a report that concluded that if vapor intrusion sites are not assessed and, if needed, listed on the NPL, some seriously contaminated hazardous waste sites with unacceptable human exposure may not otherwise be cleaned up. In response, EPA is proposing to add a new HRS pathway so that sites with vapor intrusion contamination can be evaluated for inclusion on the NPL.

EPA initiated rulemaking in January 2011, and currently expects final rules to be completed by January 2012.

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Environmental Records Search With Risk Assessment Reports

A "Records Search With Risk Assessment", or RSRA, is a unique type of "environmental investigation" required by the U.S. Small Business Administration (SBA) for certain types of SBA loans. Although it includes some elements of a SBA-compliant Phase 1 Environmental Site Assessment, it is significantly less onerous. However, like a Phase 1 ESA, the RSRA report must be signed by a "environmental professional" who meets that same qualification requirements as required for a Phase I ESA.
Click here for Caltha SBA Environmental Assessment Services page
Caltha prepares Records Search With Risk Assessment reports for commercial lenders and banks the following States:[Click on a State to request a quote]
Alabama Environmental Records Search with Risk Assessment
Alaska Environmental Records Search with Risk Assessment
Arkansas Environmental Records Search with Risk Assessment
Arizona Environmental Records Search with Risk Assessment
California Environmental Records Search with Risk Assessment
Connecticut Environmental Records Search with Risk Assessment
Florida Environmental Records Search with Risk Assessment
Georgia Environmental Records Search with Risk Assessment
Illinois Environmental Records Search with Risk Assessment
Indiana Environmental Records Search with Risk Assessment
Iowa Environmental Records Search with Risk Assessment
Kansas Environmental Records Search with Risk Assessment
Kentucky Environmental Records Search with Risk Assessment
Louisiana Environmental Records Search with Risk Assessment
Maine Environmental Records Search with Risk Assessment
Massachusetts Environmental Records Search with Risk Assessment
Michigan Environmental Records Search with Risk Assessment
Minnesota Environmental Records Search with Risk Assessment
Mississippi Environmental Records Search with Risk Assessment
Nebraska Environmental Records Search with Risk Assessment
Nevada Environmental Records Search with Risk Assessment
New Hampshire Environmental Records Search with Risk Assessment
New Jersey Environmental Records Search with Risk Assessment
New Mexico Environmental Records Search with Risk Assessment
New York Environmental Records Search with Risk Assessment
North Carolina Environmental Records Search with Risk Assessment
North Dakota Environmental Records Search with Risk Assessment
Ohio Environmental Records Search with Risk Assessment
Oklahoma Environmental Records Search with Risk Assessment
Oregon Environmental Records Search with Risk Assessment
Pennsylvania Environmental Records Search with Risk Assessment
South Carolina Environmental Records Search with Risk Assessment
South Dakota Environmental Records Search with Risk Assessment
Tennessee Environmental Records Search with Risk Assessment
Texas Environmental Records Search with Risk Assessment
Utah Environmental Records Search with Risk Assessment
Vermont Environmental Records Search with Risk Assessment
Virginia Environmental Records Search with Risk Assessment
Washington Environmental Records Search with Risk Assessment
West Virginia Environmental Records Search with Risk Assessment
Wisconsin Environmental Records Search with Risk Assessment
Wyoming Environmental Records Search with Risk Assessment


Caltha LLP assists Lenders in meeting SBA environmental investigation requirements, including RSRA. Caltha prepares RSRA and Transaction Screen reports for the same low cost for any site in any State.
To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.