|February 14, 2013|
Previously published on February 12, 2013
In June 2012, the New York State Department of Health (“DOH”) issued an “informational letter” that significantly alters the rules for determining whether a common type of spray-applied fireproofing insulation is subject to regulation as an asbestos-containing material (“ACM”). This guidance applies to vermiculite, a substance commonly found in commercial buildings within a type of structural fireproofing known as “Monokote.”
Since 2005, New York law has required that, prior to any disturbance, vermiculite-containing materials be analyzed to determine their asbestos content. In 2011, however, DOH declared that asbestos testing of vermiculite materials was unreliable. Thereafter, DOH further opined that if a material contains 10% or more vermiculite, there is a non-rebuttable presumption that the material is ACM, and therefore subject to the onerous regulations regarding ACM notifications, management, abatement, handling and disposal. This represents a significant departure from, and some would say arbitrary expansion of, prior regulatory requirements. In fact, vermiculite-containing materials previously determined to be non-asbestos based upon sampling protocols set forth in the asbestos regulations may now be considered, or even presumed, to be ACM. This potentially costly regulatory change could significantly impact commercial real estate developers, owners and tenants in New York.
Vermiculite is a naturally-occurring mineral composed of shiny flakes, resembling mica. When exposed to high temperatures, vermiculite expands into a light-weight, odorless, and fire-resistant material that can be used in a variety of consumer products. The majority of vermiculite sold in the United States between the 1920s and 1990 originated from a mine in Libby, Montana, which was later discovered to also contain large deposits of naturally occurring asbestos. Some, but not all, vermiculite extracted from the Libby mine was later determined to be contaminated with asbestos. From the 1970s until approximately 1990, WR Grace produced a spray-applied fireproofing material manufactured with vermiculite from the Libby mine, which it marketed as a non-asbestos fireproofing under the brand name Monokote. According to published estimates, Monokote was used in 60% to 80% of steel-framed buildings constructed during the 1970s and 1980s.
It is difficult to distinguish vermiculite originating from the Libby mine from other vermiculite, and the reliability of laboratory analytical methods used to identify asbestos in vermiculite has been questioned. Thus, the U.S. Environmental Protection Agency and most state environmental agencies, including those of New York, consider vermiculite-containing materials to be “suspect” ACM. As such, vermiculite-containing materials are required to be analyzed for asbestos content prior to any demolition, renovation, or other disturbance. In most jurisdictions, including New York, a material is regulated as asbestos if laboratory analysis detects more than 1% asbestos by content in the material (California being a notable exception in utilizing the more stringent regulatory threshold of 0.1% asbestos). Thus, vermiculite containing materials would be regulated as asbestos in New York and most other jurisdictions only if: (i) there was no laboratory analysis of the material; or (ii) laboratory analysis detected more than 1% asbestos therein. This is no longer the case in New York.
New York’s New Regulatory Scheme for Vermiculite
In April 2011, in collaboration with the Environmental Laboratory Approval Program (“ELAP”), the Bureau of Occupational Health (“BOH”), and the New York State Department of Labor (“DOL”), DOH issued a list of Frequently Asked Questions (“FAQ”) to provide guidance regarding existing New York rules applicable to the laboratory analysis of suspect ACM. FAQ #10 therein related to sampling requirements for vermiculite-containing material, and stated that existing laboratory methods were unreliable in determining the asbestos content of vermiculite and “it is always best to assume vermiculite is contaminated with asbestos.” This led to DOH’s subsequent issuance, in June 2012, of an “informational letter” (modified and finalized in August 2012), “to provide additional guidance and to revise FAQ #10 regarding the State’s interpretation of standard requirements pertaining to vermiculite.”
In its final “revision” to FAQ #10, DOH reiterates its position that there is no reliable analytical method to test for the presence of asbestos in vermiculite. DOH goes on to distinguish between two categories of vermiculite materials: (1) “loose” vermiculite such as attic fill, block fill, and other loose bulk vermiculite materials (more common in residential homes); and (2) vermiculite-containing materials used for thermal system insulation and surfacing materials (most common in commercial buildings as spray-on fireproofing). The former, according to DOH, must always be treated as ACM. With respect to the latter, however, DOH bifurcated the required analysis of the material. If vermiculite comprises less than 10% of the material, testing of the material’s asbestos content continues. If, however, the material contains 10% or more vermiculite, it must be presumed to be ACM. This is a non-rebuttable presumption that cannot be overturned by laboratory analysis of the vermiculite’s actual asbestos content (although there are provisions to exclude such materials from the asbestos regulations if it can be documented that the source of the vermiculite was not the Libby mine). Thus, DOH has determined that only in the limited case of vermiculite-containing materials with less than 10% vermiculite content may a party use laboratory analysis to demonstrate that the asbestos content of the material is 1% or less. All other vermiculite-containing materials are presumed to be ACM without the possibility of rebuttal by laboratory analysis.
Impact of DOH’s Guidance
DOH’s “determination” that building materials containing 10% or more vermiculite must be handled as ACM regardless of actual asbestos content caught many building owners, tenants and environmental practitioners by surprise. From a legal perspective, it can be argued that DOH is engaging in “legislation by guidance,” as the FAQ (which precludes asbestos testing of certain categories of vermiculite materials) is inconsistent with the asbestos regulations that it purports to interpret (which require asbestos testing of all vermiculite materials). There also are no existing regulations or guidance for determining which building materials may contain vermiculite, and when such materials must be sampled for vermiculite. Moreover, some contend that this change in regulatory approach is not based on scientific analysis. Rather, it is based upon DOH’s apparently unsupported contention that because vermiculite’s asbestos content “typically ranges from 1% to 5%,” building materials containing greater than 10% vermiculite must contain greater than 1% asbestos. Some asbestos inspectors have reported, however, that although Monokote may contain more than 10% vermiculite, it often contains less than 1% asbestos. Further, building owners and tenants in New York are left to wonder if building materials previously reported to be non-asbestos are now subject to asbestos regulation as a result of DOH’s non-rebuttable presumption. Needless to say, this could have unforeseeable financial and legal consequences.
A significant effort is underway to overturn or at least amend DOH’s revised FAQ #10 to reflect the concerns of building owners and environmental and real estate interests state-wide. Unless and until DOH’s final FAQ #10 is overturned or revised, however, building owners should be aware of DOH’s “new rule” and act accordingly. Commercial landlords and tenants would also be well advised to specifically allocate responsibility for asbestos-abatement work (even in buildings previously thought to be asbestos-free) in new leases and to review existing leases to determine who is responsible for such work.