Vapor Intrusion Rules: Finally Final in Illinois

On May 16, 2013, the Illinois Pollution Control Board ("Board") adopted final amendments to its risk-based remediation standards, known as "TACO" (Tiered Approach to Corrective Action Objectives). The TACO amendments (effective July 15, 2013) add a new exposure route to the standard pathways evaluated in Illinois during environmental due diligence, and in pursuit of No Further Remediation Letters ("NFRs").

The new exposure route is the "indoor inhalation exposure route" commonly known as "vapor intrusion" or "VI." The purpose of the VI standard is to address, and protect building occupants from, vapors which might migrate into buildings from subsurface volatile chemicals present in soil gas or groundwater beneath or near a site. Existing exposure routes already considered in Illinois include the "outdoor" inhalation exposure route, soil ingestion exposure route, groundwater exposure route (consumption of or direct exposure to groundwater) and the exposure route associated with dermal contact with soil. (To avoid confusion between new and old rules, the Board in its rulemaking stresses that the new rules address indoor (versus outdoor) VI, associated with subsurface conditions, and do not address indoor air contamination coming from other sources, such as the building structure itself, or products used or stored within the building).

The TACO standards are widely used to determine appropriate levels of cleanup in Illinois under the Illinois Site Remediation Program ("SRP") (Voluntary Cleanup Program), the Remediation Sites Program (cleanups ordered by the Board), the Leaking Underground Storage Tank Program ("LUST") and for RCRA Part B Permits and Closure Plans. The rules appear in 35 Il. Adm. Code Part 742.

While after years of use environmental professionals in Illinois are comfortable with the complex structure of assessing environmental risk and obtaining NFRs under existing TACO rules, the new VI rules add several "twists," which will likely have a significant impact on environmental due diligence in real estate transactions, and in pursuit of NFRs under the SRP, LUST, RCRA and Sites Programs. While it was hoped by proponents of the VI standard that the amendments will facilitate real estate transactions, in fact many practitioners believe the rules will add significant complexity, costs, and time to conducting due diligence in real estate transactions, and in obtaining NFRs. The increased complexity will result from the mandated, sampling and modeling, and practical issues associated with obtaining access agreements to perform on-and-off site sampling and evaluations.

The VI standards are organized in the same manner as other TACO exposure rules, utilizing a three tier-assessment consisting of Tier 1 lookup tables (with lists of chemical constituents and acceptable cleanup levels); Tier 2 equations that allow for site-specific data in assessing exposure risk and setting site-specific cleanup objectives; and, the more complex Tier 3 site-specific risk assessments and cleanup objectives. Each of the three tiers considers remediation objectives based on whether current and anticipated future use is residential or commercial, and provide standards for when to exclude the VI pathway.

The new rule has forced revisions to certain TACO definitions:

"Building" is redefined as "a man-made structure with an enclosing roof and enclosing walls (except for windows and doors) that is fit for any human occupancy for at least six consecutive months."

"Building Control Technology," or "BCT," means "any technology or barrier that affects air flow or air pressure within a building for purposes of reducing or preventing contaminant migration to the indoor air." (BCTs are discussed in detail under the new 35 Il. Adm. Code Part 742, Subpart L provisions of the revised TACO rules).

The former defined term "volatile organic compounds" or "VOCs" is now replaced by the defined term "volatile chemicals" or VCs.

The definition of "residential property" now considers exposure from VCs through inhalation at residential property either indoors or outdoors.

"Man-made pathways" now include elevator vaults, as well as sewers, utility lines, utility vaults, building foundations, basements, crawl spaces, drainage ditches and previously excavated and filled areas.

The VI standards identify the building control technologies that can be used to mitigate the potential for soil gas encroachment, in a manner similar to how the current rules address engineered barriers to prevent ingestion or dermal exposure to soils and groundwater. Consultants will assess the potential for VI using soil gas and groundwater sampling results, applied to a "modified J&E model" as a basis for developing VI remediation objectives. If the results show an exceedance of standards the conditions can be addressed by: (1) remediation; or (2) eliminating the exposure pathway using engineering controls (BCTs) or institutional controls. There is no requirement to conduct indoor air monitoring, although in some instances it is anticipated indoor sampling may be useful.

There are several steps in the new TACO VI process. While the VI exposure route can be directly exempted from further consideration if none of the contaminants of concern at a property are VCs, where VCs are present the indoor inhalation exposure route can be excluded only if the following conditions are satisfied (these conditions are often referred to as "speed bumps"):

1. There is no pathway;
2. There is no free product;
3. With respect to soil gas, the concentration of any contaminant of concern in soil gas cannot exceed 10% of its Lower Explosive Limit (LEL) as measured by a hand held combustible gas indicator; and
4. One of the following must be satisfied: (a) no building or man-made pathway exists or will be placed above contaminated soil gas or groundwater exceeding Tier 1 standards (provided, however, that there is also no soil or groundwater contamination exceeding Tier 1 standards located 5 feet or less, horizontally, from any existing or potential building or man-made pathway); (b) a BCT under Subpart L of the standard is used; (c) when the only contaminants of concern are benzene, toluene, ethylbenzene, and total xylenes (BTEX), a demonstration of "active biodegradation" has been made for BTEX such that no indoor inhalation exposure will occur (See Section 742.312(b)(1)); and (d) an institutional control is recorded in accordance with TACO Subpart J rules to ensure the future use of BCTs.

It is important to note that the indoor inhalation exposure route cannot be excluded using a groundwater use restriction ordinance. The groundwater use restriction can be used only to eliminate the risk associated with drinking contaminated groundwater.

Among the highlights of the vapor intrusion rules are the following:

1. The Rules set Tier 1 and Tier 2 remediation objectives for VI where there is an existing (or potential building) with a full concrete slab-on-grade foundation, or full concrete basement floor and walls.
2. The VI standards apply to soil gas and groundwater which may impact indoor air -- the standards are not set for soils alone (soils continue to be covered elsewhere in TACO).
3. Testing of air in a building is not required; rather the expected impacts can be modeled based on soil gas and groundwater results.
4. If the VI remediation objectives developed for a site will rely on the presence or future presence of a full concrete base or the use of BCTs, institutional controls (deed restrictions) must be placed on the property to ensure those barriers remain in place. (Institutional controls are addressed in more detail under Section 724.1000-1020 (Subpart J) of the revised TACO rules).

The new VI pathway will now be an important consideration in any transaction to transfer (or lease) real property in Illinois. Going forward, when environmental due diligence is performed, parties should consider the potential for VI as part of a Phase I investigation. If an NFR is being sought for property, potential VI must be evaluated and addressed. If either in the context of due diligence or pursuit of an NFR the potential for VI is determined to exist, then Phase II testing of soil gas and/or groundwater likely will be necessary.

Not only will VI impact future transactions, parties should also consider the impact of the new rule on a property with an existing NFR letter. Because the liability immunity that accompanies existing NFRs does not address the VI pathway, the benefit of a previously issued NFRs is limited to risks associated with soils and groundwater exposure but not VI.

Conservative buyers (or their lenders) should be wary of solely relying on a previously issued NFR and instead may want to evaluate the potential for a VI problem through an updated assessment, and possibly obtaining a revision to the NFR.

Finally, our OSHA practice warns that the VI standards under TACO are far more restrictive than OSHA standards for a number of chemicals, which creates controversy because of the contradictions between OSHA and EPA standards. A workplace may be deemed "safe" by OSHA standards, yet by IEPA or USEPA standards will be not be sufficiently "safe" to earn an NFR. Further, the fact that indoor air meets OSHA limits is not determinative for purposes of obtaining an NFR. That is, even if OSHA says an employee exposure is safe, EPA may say it poses an unacceptable cancer risk. It is important to note here that the protection in an NFR addressed at VI risks is not intended to be used for OSHA compliance or as an affirmative defense to OSHA claims or vice versa.