Environmental Law Update Newsletter, March 2003

Barry S. Cohen

Since 1990, developers involved in projects that disturb five or more acres have been required to comply with federal storm water regulations.

The goal of the regulations is to prevent dirt, debris and other pollutants generated by construction activities from leaving the site and impacting a nearby water body. Despite the fact that the regulations are relatively easy to comply with, and generally do not require a large expenditure of money or cause significant project delays, it appears that many companies are not complying. In recognition of the low compliance rate, the United States Environmental Protection Agency (“EPA”) has stepped up its enforcement efforts. This newsletter summarizes the basic requirements governing storm water discharges from construction activities performed in the State of New York, and provides examples of what happened to several companies that failed to comply.

In 1990, EPA issued its Phase I storm water regulations. In addition to covering storm water discharges from ten types of industrial operations, the Phase I regulations also apply to construction activities that disturb five or more acres. In December 2002, EPA issued its Phase II storm water regulations. Significantly, under the new Phase II regulations, many more development projects are subject to the storm water requirements. The Phase II regulations extend the storm water requirements to “small construction activities,” which is defined as a construction project that will disturb one or more acres.

At the State level, the federal storm water regulations are administered by the New York State Department of Environmental Conservation (“DEC”). In order to comply for a construction project in New York, a developer must obtain coverage under a DEC permit referred to as a general State Pollutant Discharge Elimination System (“SPDES”) permit. Obtaining coverage under the general SPDES permit is a two-step process. First, the developer and/or its engineer must first prepare a Storm Water Pollution Prevention Plan or SWPPP. The SWPPP describes the mitigation measures that will be used to prevent and/or control storm water discharges from the project site. After completion of the SWPPP, a Notice of Intent must be filed with the DEC. In the Notice of Intent, the developer certifies that a SWPPP that meets the DEC’s technical standards has been prepared and will be implemented. Note that while the SWPPP does not have to be submitted to the DEC for its review and approval, the plan does have to satisfy DEC’s technical requirements and must be made available to DEC upon request.

Generally, the Notice of Intent must be submitted at least five days prior to the commencement of construction activities. If site factors require a deviation from one or more of the technical standards governing SWPPPs, the Notice of Intent must explain, among other things, the reasons for the deviation, and the Notice of Intent must be submitted at least 60 days prior to the commencement of construction activities.

The EPA and DEC view storm water discharges, including discharges from construction sites, as a major source of pollution. Among the stated concerns is that if storm water discharges are not controlled, discharges from construction sites will gather a variety of pollutants during runoff events and transport those pollutants to sensitive water bodies. In the Spring of 2002, EPA announced its intent to step up its enforcement efforts. To drive home its message that it is serious about enforcing the requirements governing construction activities, EPA publicized the fact that it in the Spring of 2001, EPA and the United States Justice Department resolved a major storm water enforcement action with Wal-Mart Stores, Inc. In that case, EPA alleged that Wal-Mart failed to comply with the storm water requirements and illegally discharged pollutants from 17 different construction sites across the nation. To settle the matter, Wal-Mart was forced to pay a $1 million civil penalty, and to invest $4.5 million to improve its compliance with the regulations at its construction sites. More recently, EPA settled an enforcement action against Lowe’s Home Centers involving illegal storm water discharges at four construction sites in Massachusetts. Lowe’s paid a $137,500 penalty and agreed to commit substantial financial resources toward ensuring future compliance with the federal storm water requirements.

The DEC has also commenced enforcement actions to enforce the storm water regulations applicable to construction sites. In the Summer of 2001, DEC brought an administrative action against a developer of luxury homes in Putnam County. In that case, DEC alleged that the developer failed to obtain coverage under the general SPDES permit before commencing construction activities. In another matter, also involving a residential development in Putnam County, DEC commenced an action against a developer and others claiming that although the defendants obtained coverage under the general SPDES permit, they violated the terms of that permit when they allowed turbid storm water to enter a nearby lake.

The EPA and DEC appear poised to make examples out of those who choose to ignore the storm water regulations. Developers must become familiar with the regulations and ensure that appropriate steps are taken to achieve compliance. Violations can result in substantial penalties and project delays. Perhaps more importantly, violations can provide ammunition to project opponents who would like nothing more than to delay or defeat an otherwise well conceived project.