State Cleanup Programs: A Status Report

It has been eight years since the first state-mandated drycleaning site remediation programs were adopted and two years since the last one came into being. Over those years, about a dozen states have attempted to address the problem of drycleaning site contamination through legislation, each in its own way. The basics are the same, however. Drycleaners agree to pay into a clean-up fund and, in some cases, employ certain equipment and operational requirements in exchange for receiving relief in the event a clean-up of their site is needed.

Eleven of the states with programs participate in the State Coalition for Drycleaner Remediation (SCRD), an EPA-funded program that brings together state-level administrators twice a year to share information on their state’s programs, discuss remediation technologies and seek to improve the effectiveness of the programs. Member states currently include Alabama, Florida, Illinois, Kansas, Minnesota, Missouri, North Carolina, Oregon, South Carolina, Tennessee, and Wisconsin.

SCRD’s most recent update of data on the 11 states’ programs, released in January and published on the SCRD web site, shows the progress of clean-ups to date, as well as the wide variety of approaches states have chosen to address the problem.

The biggest and longest-running program belongs to Florida. Since its inception in 1994, 1,563 cleaners have applied for the program. Assessments have been initiated on 235 sites, remedial action initiated on 132 sites and 44 sites were determined to need no further action.

Cleaners pay a surcharge of $5 per gallon on perc and a 2 percent gross receipts tax. Those two sources raise the lion’s share of the fund, which has approximate annual revenues of $8 million. The average payment per cleaner to the fund is $5,138, the second highest average of the 11 states surveyed by SCRD.

In a report given at SCRD’s conference last fall, Doug Fitton of the Florida Department of Environmental Protection provided statistics on the average costs associated with the different phases of site remediation: the average cost per assessment was $91,000; design and source delineation costs were $49,000 per site; construction costs were $180,000; and operation and maintenance costs for the program were $60,000 per year.

Fitton also noted that none of the sites that had been cleaned up were large or had serious contamination.

Alabama has the most recently adopted program and, unlike most others, it is voluntary. In fact, if participation is not sufficient, the program will be discontinued, perhaps this year. Under Alabama’s program, participating cleaners pay an amount equal to 2 percent of gross receipts. If the fund does not collect at least $1 million, the program will sunset. If the program achieves its required funding, participants will be released from all state environmental liability and funds will be available to participants for “environmental restoration.”

George Davis of the Alabama Department of Environmental Management reported to SCRD that he expects the necessary $1 million in funding by May of this year to be realized.

The $1 million mark has proven elusive for Oregon, which for the past few years had attempted to achieve that amount through a surcharge on solvent sales. The program began in 1995 with a surcharge on perc of $12 per gallon. By last year, the surcharge was up to $30 a gallon in the quest to reach the $1 million level — and it still fell short.

Beginning this year, Oregon revamped its funding mechanism, lowering the perc surcharge to $10 per gallon. Other solvents are surcharged at $2 per gallon.

To compensate for the loss of revenue from solvent surcharges, other fees based on the type of solvents in use and the annual sales of the business will be instituted.

Those include an annual fee of $500 for drycleaning plants and $250 for dry stores.

Oregon now also has a “risk-based” fee. Facilities currently using perc would pay $400; those that used perc in the past would pay $200; and those that used a solvent other than perc would pay $100.

Then there are gross revenue assessments. Those range from $250 for businesses with revenues of less than $100,000 to $1,250 for those with gross revenue of $400,000 or more.

The fees, with the exception of the solvent surcharge, are to be paid in one annual lump sum. The aim of raising $1 million a year for the program remains. If that goal is not met, fees other than the annual fee and the solvent fee can be increased by 25 percent.

In the past, the average annual payment by an Oregon cleaner into the fund was about $2,300. Dick Dezeeuw of the Oregon Department of Environmental Quality said he expects the average to remain about the same under the new structure.

The new fee schedule attempts to address a long-standing point of contention among drycleaners over the clean-up funds — how to equitably raise the money. Small cleaners tend to prefer a system based on the size of the business, which makes larger cleaners pay more. But larger cleaners say the risk of contamination posed by a small plant can be as great as a larger one.

The SCRD survey shows that 34 of Oregon’s 340 drycleaners have applied for the program with 28 site assessments initiated, 17 remedial actions initiated and no further action deemed needed for nine sites.

Most other states have found, like Oregon, that, no matter what funding mechanisms are used, the actual amounts raised fall short of projections. One exception is Kansas, where the actual amount of $1.4 million is right on target with the projection. Kansas cleaners pay an annual $100 registration fee, a $5 per gallon perc fee (50 cents per gallon on petroleum) and a 2.5 percent gross receipts surcharge. At $6,000, Kansas has the highest average total of fees per cleaner.

Sixty-two cleaners have applied for the program with 22 site assessment initiated, 12 remedial actions initiated and 3 sites needing no further action.

North Carolina revised its program last year and funding is expected to increase dramatically. Perc fees increased from $5.85 to $10 per gallon, and petroleum solvent fees rose from 80 cents to $1.35. That is expected to raise revenues from an actual of $800,000 to a projected of $1.5 million this year. But the big jump comes next year when sales tax will be earmarked for the fund with revenue projections at $8 million a year.

Minnesota drycleaners had to fight to keep their fund from being blended with a general fund last year. The Minnesota Pollution Control Agency, which administers the state drycleaner cleanup fund program, was running a deficit and legislation was proposed that would allow MPCA to place drycleaning fee revenues into a general fund that would be available for other agency programs. The state drycleaning association objected and prevailed in its argument that the fees should remain for the use of the drycleaner program.

The Minnesota fund is supported by fees based on the number of full-time equivalent employees in a plant, plus a solvent fee of $7 per gallon perc and $1.50 on hydrocarbon. This raises about $650,000 a year to cover the 400 active drycleaners in the state.

54 cleaners have applied for the program, 40 site assessments have been initiated with remedial action on 15 and no further action needed for 4.