• How Will New Federal Brownfields Legislation Affect Your Business . . . and Why Should You Care?
  • June 5, 2003 | Authors: Edward Moye Callaway; James M. Weaver
  • Law Firm: Waller Lansden Dortch & Davis, LLP - Nashville Office
  • On December 20, 2001, Congress passed significant bipartisan legislation to encourage increased cleanup and redevelopment of contaminated properties, known as brownfields. The Small Business Liability Relief and Brownfields Revitalization Act (the Act) was signed by President Bush on January 11, 2002. The Act encourages redevelopment of contaminated sites by increasing authorization of federal funding for qualifying state and local brownfields programs and by amending the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) to provide liability protection for prospective purchasers, contiguous property owners, innocent landowners, and small business owners. Some of the key provisions of the Act are as follows:

    • The "De Micromis" Exemption provides relief from liability for potentially responsible parties (PRPs) that have disposed, transported, or treated materials containing hazardous substances, in very small amounts. All or part of the disposal, treatment or transport must have occurred prior to April 1, 2001.

    • The Act exempts households and businesses with fewer than 100 employees from liability for the disposal of municipal solid waste at facilities listed on the National Priorities List (NPL).

    • The Innocent Landowner Defense is clarified under the new Act. Under CERCLA, to successfully assert this defense, the landowner, prior to acquiring the site, must conduct "all appropriate inquiries" regarding the site and its prior uses. The Act requires EPA to promulgate rules and regulations within 2 years that define "all appropriate inquiries"; until then, an ASTM-compliant Phase I establishes "all appropriate inquiries."

    • The Contiguous Property Defense provides a shield from liability for owners of property contaminated by releases or threatened releases of hazardous substances from neighboring real property. The landowner must satisfy approximately 10 criteria to successfully assert this defense, including that the landowner has not caused, contributed, or consented to the release, has conducted "all appropriate inquiries," and did not know or have reason to know that the property was or could be contaminated.

    • The Act establishes the Prospective Purchaser Defense, for purchasers who can establish that (1) the land was purchased after passage of the Act; (2) all disposal of hazardous substances occurred before the prospective purchaser acquired the property; and (3) other criteria similar to the requirements for the contiguous property defense are met. However, unlike a contiguous property owner, a prospective purchaser is not required to establish that he had no knowledge or reason to know that the property was or could be contaminated. Thus, the prospective purchaser can be shielded from liability for cleanup costs even if the purchaser had knowledge of the contamination, making redevelopment of brownfields more attractive to developers.

    • EPA must not list a contaminated site on the NPL if a state is conducting a response action and if "reasonable progress toward completing a response action" is being made. Additionally, EPA will not take enforcement action during or after completion of a State response action unless certain conditions occur that require further remediation to protect public health and the environment.

    Overall, the Act encourages the redevelopment of brownfields sites while not dramatically changing how sites will be investigated and evaluated for risk or how remedial responses will be developed. Although the Act attempts to provide greater liability protection for certain types of PRPs, successfully asserting these defenses will depend on a detailed evaluation of the numerous criteria that must be established.

    A copy of the Small Business Liability Relief and Brownfields Revitalization Act may be found at www.epa.gov/swerosps/bf/pdf/hr2869.pdf.