The Brownfields Amendments of 2001, P.L. 107-118, established three landowner liability protections: the bona fide prospective purchaser defense under CERCLA Section 107(r), the contiguous landowner defense under CERCLA Section 107(q), and the “innocent landowner” defense under CERCLA Sections 107(b)(3) and 101(35). In order to qualify for any of these defenses, the landowner must establish that it………..

conducted “all appropriate inquiry”

is in compliance with land-use restrictions and is not impeding the effectiveness or integrity of institutional controls

is taking “reasonable steps” to prevent continuing releases or threatened future releases

is providing cooperation, assistance and access

is complying with information requests and administrative subpoenas, and

is providing legally required notices

Recently released EPA guidance raises the question whether these landowner liability protections, as interpreted by EPA, will encourage, or in fact discourage, redevelopment of contaminated brownfield sites. Routine acts, such as applying for a change in zoning, failing to search the agency’s records for any evidence of a land-use restriction in a remedy selection document, or failing to repair some deteriorated pavement, could now be viewed as violating one of the “common elements” of the landowner liability defenses, thereby nullifying any liability protections allegedly offered by the Brownfields Amendments of 2001. Without confidence that they can, in fact, qualify for one of these defenses, developers are not going to willingly embrace these sites.

Common Elements Guidance Document:

The “common elements” interim guidance, issued on March 6, 2003, focuses on the “common elements” to the landowner liability defenses discussed above. A landowner hoping to qualify for one of these defenses will bear the burden of establishing the defense. A person seeking to qualify for the bona fide prospective purchaser defense, for example, must show that it purchased the property after January 11, 2002, and that it satisfies the other criteria set forth in CERCLA Section 101(40). Only a bona fide prospective purchaser may purchase with knowledge of any contamination. A contiguous landowner and an “innocent” landowner who have knowledge of the contamination prior to purchase will not qualify for the defense, but they may still be able to qualify for the bona fide prospective purchaser defense.

Threshold Requirements:

Two of the “common elements” are threshold requirements:

All Appropriate Inquiry. To qualify for any of these defenses, a landowner must perform “all appropriate inquiry” into the previous ownership and uses of the property prior to acquiring the property. For property acquired prior to May 31, 1997, the statute identifies various factors that should be taken into account, including the value of the property if clean, commonly known information and the ability to detect the contamination. For property purchased after May 31, 1997, the statute directs the landowner to adhere to the ASTM Standard Practice for Phase I Environmental Site Assessments, E 1527-97,1 until EPA promulgates regulations as required by the statute. EPA has recently announced that it is establishing a Negotiated Rulemaking Committee, or “reg neg,” to develop standards and practices for conducting “all appropriate inquiry.” (68 Fed. Reg. 10675-10680). The statute defines the elements that must be considered by EPA:

use of an environmental professional

interviews with past and present owners, operators and occupants

review of historical sources of information

searches for recorded liens

review of federal, state and local records regarding waste disposal practices, spills, underground storage tanks, and the like

visual inspections of the facility and adjoining properties

utilization of any specialized knowledge

evaluation of the relationship between the purchase price and the value of the property

utilization of commonly known or reasonably ascertainable information about the property

consideration of the degree of obviousness of the contamination

Among the issues to be resolved by the Negotiated Rulemaking Committee are the following:

ways to minimize disruption to the real estate market

shelf life of an assessment

balancing the need for a high level of certainty without imposing time consuming and expensive regulatory requirements

defining the extent to which sampling may be required

No Affiliation. A landowner who is potentially responsible for response costs, or who is affiliated with another party who may be responsible for response costs, will not qualify for any of these defenses.

remainder of/complete article at http://www.rtmcomm.com/rtmcomm/articles.php?page=3&ArticleID=6

This entry was posted on Thursday, September 20th, 2007 at 11:06 am and is filed under ●Brownfields Developer's Corner, ●Environmental Agencies, ●Environmental Liability Issues.

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