What a return to ‘polluter pay’ could mean for Michigan

Michigan has more than 24,000 contaminated sites. Lawmakers want to bring back accountability for polluters, but opponents say that would stymie redevelopment.

In 1990, then- State. Sen. Lana Pollack helped pass Michigan’s landmark “polluter pay” law, which saved the state an estimated $100 million on cleaning up contamination before Gov. John Engler’s administration rolled it back in 1995.

High-profile incidents like the spill of green ooze onto I-696 or the toxic PFAS and 1,4-dioxane threatening Ann Arbor’s drinking water have prompted calls for a return to polluter pay. Such laws would increase liability for polluters or those who benefited from a polluted property to pay for the cleanup. 

This could help Michigan deal with its estimated 24,000 contaminated sites, only 3,000 of which have been remediated since 1990, and shift the cost of cleanup away from taxpayers.

One example of this cost is born by Ann Arbor taxpayers, who spend $900,000 a year filtering PFAS out of the city’s drinking water while the company responsible for much of it, Tribar Technologies in Wixom, continues to discharge the toxic chemicals to the Wixom Sewage Treatment Plant, which feeds into the Norton Creek and Huron River.

“(Polluter pay) signals to those operating today that if they are careless and cause pollution…they will be accountable,” Pollack told Planet Detroit. “It changes behavior.”

But legislators face competing pressures from business interests who say polluter pay laws would discourage the redevelopment of blighted properties, which can bring badly needed tax dollars to legacy industrial cities with high concentrations of polluted sites like Detroit. 

Part 201 Contaminated Sites in Michigan. Source: Michigan Department of Energy, Great Lakes & Environment

Sites like the M1 Concourse in Pontiac and the Amazon fulfillment center in Livonia are examples of former General Motors sites redeveloped by the RACER trust under the state’s loosened cleanup rules. The trust was formed after GM’s bankruptcy and is tasked with rehabilitating GM properties.

“Many of these properties, the potential risk and the liability for doing the environmental cleanup exceeded the value of the property,” Grant Trigger, an environmental attorney who works with RACER said of the period before the Engler rollbacks. 

Amid such objections, Michigan lawmakers say they are putting together polluter pay bills in the House and Senate that would go further than legislation introduced in recent legislative sessions.

“We’re not trying to introduce messaging bills,”  Rep. Jason Morgan (D-Ann Arbor) said. “We’re trying to introduce comprehensive, effective legislation that we hope will pass through both chambers in the legislature and be signed by the governor.”

It would likely be now if there were a time to pass new polluter pay laws. Democrats control both houses of the legislature and the governor’s office for the first time since 1983. And public polling shows widespread support for environmental protection. In a 2021 poll, 71% of self-identified Republicans and Independents expressed support or strong support for protecting streams and wetlands in the Great Lakes, while the number for Democrats was 86%.

Speaker of the House Rep. Joe Tate (D-Detroit) and Senate Majority Whip Mallory McMorrow (D-Royal Oak) also said they supported such legislation.

“There is a clear mandate from Michiganders on both sides, both parties,” said Christy McGillivray, legislative and policy director for the Sierra Club Michigan Chapter, “that taxpayers should not be paying to clean up corporate messes.”

However, on a recent press call, McGillivray and other environmental leaders expressed concern that corporate interests may push Democratic leadership to prioritize passing laws that lead to even more pollution. 

Rep. Angela Witwer (D-Delta Township), chair of the House appropriations committee, and Tyrone Carter (D-Detroit), chair of the regulatory reform committee, are co-sponsoring bills that could make it easier to open up aggregate mines.

The Michigan Chamber of Commerce and Michigan Aggregates Association supports the legislation, but environmental groups fear it would harm air quality and drinking water.

“I wish we were here today in support of efforts to pass polluter pay,” Sean McBrearty, legislative and policy director for Clean Water Action, said on the call. “Instead, we’re here in opposition to a bill package that has already been introduced and failed to gain support twice in Republican majority legislatures.”

Shifting the burden of cleanup

Advocates say polluter pay legislation would encourage companies to internalize pollution costs as part of their decision-making process and help stop the proliferation of contaminated sites in the state. 

However, it’s unclear if these bills will include strict liability provisions that require polluters to clean up contamination that may be decades old. Advocates say strict liability is needed to address legacy contamination like the 1,4-dioxane plume in Washtenaw County that threatens drinking water. Morgan said lawmakers were looking into what was “legally possible.”

Lawmakers could also extend liability to corporate officers through a “responsible corporate officer doctrine” or require companies to establish bonds that would be used to mitigate the impacts of future pollution. 

Bonding and the responsible officer doctrine were included in a package of bills House Democrats pushed for in 2020. The bonding requirements would be applied to businesses to create a fund to mitigate negative environmental impacts. And the responsible corporate officer doctrine would allow CEOs and company leaders to be held civilly and criminally liable for the pollution their operations cause.

Nick Schroeck, an environmental law expert at the University of Detroit Mercy, says new liability rules are essential for making polluter pay legislation effective.    

This could be extended to multiple businesses that used contaminated property, not just the original polluter. The 1990 Michigan polluter pay law functioned like the federal Comprehensive Environmental Response Act (CERCLA) or Superfund program and included “joint and several liability.”

“That means that anyone involved in conduct that led to that contamination could potentially be on the hook for the entire cost of cleanup,” Schroeck said. He acknowledged that might seem unfair but said that small contributors to pollution have routinely avoided accountability.

In practice, it may be unlikely that a company only partially responsible for polluting a site would pay the entire cost of the cleanup. Andrew Buchsbaum, a University of Michigan law school lecturer, said the 1990 law would have brought multiple “potentially responsible parties” to court and allowed them to sort out who would pay for what. 

Pollack said the law meant that those who bought a polluted property acquired a portion of the liability. Still, the original polluter couldn’t divest themselves of their responsibility by selling it. 

Legal and policy experts also say the new laws should reinstate strict cleanup standards. This could help reduce the problems as pollution migrates into groundwater, potentially affecting drinking water or creating harmful vapors in basements. 

In 1995, lawmakers passed Part 201 of the state’s Natural Resources and Environmental Protection Act, allowing businesses to clean up properties based on their intended use. For example, industrial sites wouldn’t need to be cleaned up to residential standards.

Pollack said this approach is “clearly not working” because it ignores that pollution can migrate off the site into groundwater and spread across the landscape. For example, the former Gelman Sciences plant west of Ann Arbor has been leaking 1,4-dioxane into the groundwater over decades, causing the large plume of contamination which could move into basements, potentially exposing residents to harmful chemical vapors as well as threatening drinking water.

“The number of contaminated sites has proliferated, and there’s thousands of them,” Pollack said. “Pollution may be here today, but it’ll be someplace else tomorrow.”

The redevelopment question

Trigger, the environmental attorney working for RACER Trust, said the existing Part 201 rules make it easier to find new owners for contaminated properties who might otherwise be scared off by the cost of cleanup.

“You reuse those properties, you provide an improved tax base in the community and job opportunities in the community,” he said.

Trigger pointed to several redevelopment projects on former General Motors sites that he said were made possible under current liability and cleanup rules, including the American Center for Mobility at the Willow Run site in Ypsilanti and Buick City in Flint.

“We have legitimate, honest polluter pay under existing law,” Trigger said. “If you’re responsible for activity causing contamination, you are liable.” He added that changing the law would amount to “punishing the innocent” because new property owners would face greater cleanup costs despite not having caused the pollution.

Yet, Schroeck said the redevelopment of the General Motors sites underscores the need to hold polluters accountable to fund cleanups and discourage pollution before it happens — otherwise, taxpayers are left holding the bag. Case in point: the RACER Trust received $500 million in state and federal dollars for site investigations and cleanups. 

Even if liability rules are changed, Schroeck said, the state may still need to find additional public funding for cleanups. 

Taxpayers already effectively pay to address pollution through brownfield tax increment financing, which reimburses cleanup and mitigation costs through tax incentives. The state could also bring back something like the public bonding initiatives that Michigan voters passed in 1988 and 1998 that provided hundreds of millions of dollars to manage and mitigate impacts from pollution, although they often failed to clean up the sources of the contamination.

However, Schroeck said reforming liability is as much about preventing new contaminated sites as cleaning up past pollution because it will force companies to internalize pollution’s cost and avoid it.

“We need a new process going forward because land and water continue to be contaminated under current laws, creating more brownfield and contaminated sites,” he said. “We need to stop the bleeding.”

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