Consistent with the goals of the Administration’s Legislative Outline for Rebuilding Infrastructure in America, issued February 12, 2018, Congress passed the Brownfields Utilization, Investment, and Local Development Act of 2018 (BUILD) as part of the Consolidated Appropriations Act of 2018. BUILD addresses potential tenant and governmental liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in order to stimulate development.
Tenants have the potential exposure to CERCLA liability as owners or operators of contaminated property. While tenants were eligible for liability exemptions afforded to bona fide purchasers, BUILD amends CERCLA to outline the criteria. Under CERCLA, a bona fide purchaser must perform “all appropriate inquiry” with a Phase I Environmental Assessment to determine the environmental condition of the property prior to acquisition, then exercise reasonable care with respect to whatever contaminants were discovered. Under BUILD, a tenant may either rely on the landlord having satisfied these elements, or perform its own due diligence, satisfying the “all appropriate inquiry” as long as the tenant continue to exercise due care and satisfies other criteria. In addition, the definition of “contractual relationship” precluded tenants from asserting a third party defense under CERCLA because a lease was considered a “contractual relationship.” BUILD now excludes leases from this definition.
BUILD clarifies the CERCLA liability exemption for governmental entities who acquire title to contaminated property. Before, the governmental entity enjoyed an exemption if it acquired title “involuntarily.” Under BUILD, the term “involuntary” was deleted and acquisitions “by virtue” a government’s function as a sovereign or a “seizure or otherwise in connection with law enforcement activity, or through bankruptcy, tax delinquency, abandonment, or other circumstance in which the government acquires title by virtue” are included in the exemption.
BUILD provides funding for brownfield grants, loans, and programs. BUILD also expands eligibility for Brownfields grants and loans to other public owners and some non-profit organizations. In addition, the Petroleum Brownfield Enhancement section provides that certain orphan petroleum sites are also now eligible for Brownfields funding.
Pam Nehring is an experienced environmental attorney whose practice includes environmental permitting, NEPA compliance, brownfields development, remediation claims and litigation. For more information contact Pam Nehring at Daley Mohan Groble, P.C: