New Transfer Act Changes Reflect A Friendlier Business Environment
Written By: David Speranzini | Published: July 4, 2019
Is there light at the end of the tunnel?
Last month Governor Lamont signed Public Act No. 19-75, a new law that amended several provisions in the Transfer Act. These amendments are favorable to the regulated community and are designed to narrow the scope of real properties and businesses that are subject to the Transfer Act, as well as to lessen the burden for those already in the program.
The amendments include the addition of several new important exceptions to the definition of an “establishment,” and the shortening of the time period that DEEP has to audit an LEP Verification.
In particular, the amendments exclude from the definition of an “establishment” any real property or business operation from which more than 100 kilograms of hazardous waste was generated in any one month from the following activities:
- The one-time generation of hazardous waste in any one month, as a result of either the first time such waste was generated or such a one-time generation since the last time a Form I, Form II, Form III or Form IV was required to be submitted.
- The removal of unused chemicals or materials as a result of the emptying or clearing out of a building.
- The complete cessation of a business operation provided the waste is removed not later than ninety days after such cessation.
Another important change is the shortening of the time period DEEP has to audit an LEP Verification from three years to one year. Further, DEEP must complete the audit within three years from the date of submittal.
These amendments will provide some relief to the regulated community for transactions involving real property or businesses that are not major generators of hazardous wastes. Although some of the language is not ideal and will be subject to some interpretation, overall the amendments are a step in the right direction.
The amendments will become effective on October 1, 2019. Application of the new provisions will not be retroactive and will not apply to transactions that occur prior to the October 1, 2019 effective date. Of note, the legislation mandates the convening of a new working group to develop recommendations for additional legislative changes to the Transfer Act.
This is an important opportunity for the regulated community and signals a willingness on the part of the legislature to facilitate commercial transactions in which environmental issues may exist. Lenders, developers, and commercial realtors are well-advised to participate in this process and make their concerns known.