Brownfields Redevelopment Initiatives
*This article was originally published in the March 2003 issue of The Practical Real Estate Lawyer.
A growing number of state and Federal initiatives hold the hope of developing brownfields into properties that are useful and safe once more.
Private parties have been reluctant to purchase or finance brownfields sites because of uncertainty over the amount of contamination at a site, applicable cleanup standards, likely cleanup costs, potential third party lawsuits, undiscovered contamination, and potential regulatory reopeners. Congressional gridlock over reauthorization of the federal Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601 et seq., (CERCLA) has only aggravated this situation, motivating developers and industry to move from urban areas into suburban "greenfields."
Faced with a quickly eroding urban job and tax base, state and local officials have aggressively developed alternative approaches to bring these contaminated properties back into productive use. Buyers, sellers, and lenders are now being provided with greater certainty about future liability and cleanup costs, as well as financial incentives to invest in brownfields. The results have been good for the environment, good for the community, and good for the businesses involved in the development of real estate.
Brownfields and the New Law
Congress has defined a brownfield site as "real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant." 42 U.S.C. §9601(39)(A), the "Small Business Liability Relief and Brownfields Revitalization Act" (Revitalization Act). The U.S. Environmental Protection Agency (EPA) has previously defined brownfields as "abandoned, idled or underused industrial and commercial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination. Estimates of the number of brownfields sites have ranged from the tens of thousands to 450,000. See Office of Technology Assessments, State of the States on Brownfields: Programs for Cleanup and Reuse of Contaminated Sites 2 (1995); sites now include mine-scarred lands, petroleum-contaminated sites, and sites contaminated with controlled substances. 42 U.S.C. §9601(39)(D)(ii)(I III)
What the Act Does
The Revitalization Act is likely to affect the way in which property is bought and sold, and the way in which parties seek recovery of cleanup costs at existing Superfund sites, for years to come. Key changes are discussed below.
Exemptions from CERCLA Liability
The law clarifies that a bona fide prospective purchaser is exempt from liability even if it has knowledge of the existence of contamination at a site after conducting "all appropriate inquiry." This is an important exemption from liability for brownfields redevelopers. This provision became effective on the date of enactment and applies if the prospective purchaser can show, by a preponderance of the evidence, that.
- All disposal occurred prior to the time that it acquired ownership; and
- It made "all appropriate inquiry" into the prior uses of the property in accordance with "good commercial and customary standards and practices."
- The prospective purchaser would also need to show that it had:
- Made all legally required disclosures;
- Taken "reasonable steps" to stop any continuing release and prevent any future releases; and
- Not impeded the effectiveness or integrity of any institutional controls.
- If the property will be used for residential purposes, the standard will have been met if the facility inspection and title search have revealed no basis for further investigation.
The law contains two other exemptions from liability: the innocent landowner defense and the contiguous landowner defense. The party claiming these defenses would have the burden of proving that it had not caused, contributed to, or consented to the release. It would also need to show that it had taken the "reasonable steps" regarding "all appropriate inquiry, " disclosures, prevention of releases, and maintenance of institutional controls discussed above. The innocent landowner and contiguous property owner defenses would not apply if the property owner had prior knowledge of the contamination.
The law also codifies the EPA's May 24,1995, policy regarding contaminated aquifers. See EPA, Policy Toward Owners of Property Containing Contaminated Aquifers, 60 Fed. Reg. 34,790 July 3, 1995). The law provides that a contiguous property owner shall not be required to conduct ground water investigations or to install ground water remediation systems except in accordance with EPA's 1995 policy.
"All Appropriate Inquiry"
Congress has clarified that a Phase I Environmental Site Assessment conducted on or after May 31, 1997, in accordance with ASTM E 1527-97, will constitute "all appropriate inquiry" under CERCLA, at least until EPA promulgates its own regulations. Among other things, the property owner must not have taken any action to impair any institutional controls that were placed on the site. Congress has further directed EPA to develop its own regulations regarding what constitutes "all appropriate inquiry" within the next two years.
Affirmative Obligations To Comply with Institutional Controls and Prevent Releases
The law clarifies that property owners have an affirmative obligation to maintain institutional controls that may have been imposed on contaminated property. The law further provides that property owners have an affirmative duty to prevent releases to qualify for any of the three exemptions (innocent landowner, contiguous landowner, or bona fide prospective purchaser) from CERCLA liability.
Windfall Profit Lien Provision
The law provides that EPA may impose a lien on contaminated property where EPA has incurred response costs to recover any "windfall profit" resulting from the increase in the fair market value. The lien arises at the time that EPA begins a response action, but EPA would need to go into court at the time the property is sold to perfect its lien.
De Micromis and Municipal
Solid Waste Exemptions from Liability Parties contributing less than 110 gallons of liquid materials or 200 pounds of solid hazardous materials that were sent to a National Priorities List (NPL) site before to April 1, 2001, will enjoy the de micron-is exemption from liability. The government may make an exception to this exemption if:
- It determines that the materials contributed significantly to the cost of the response action;
- The respondent failed to comply with an information request or impeded the performance of a response action; or
- The respondent has been convicted of a criminal violation.
- The government's decisions under the first two bulleted items above are not subject to judicial review.
Small Waste Generators
In addition, residential households, businesses employing no more than 100 full-time employees, and section 501(c)(3) organizations employing no more than 100 paid individuals at the location that generated the solid waste, who disposed of municipal solid waste only at an NPL site, will be exempt from liability. The government may make an exception to this exemption if
- It determines that the materials contributed significantly to the cost of the response action; or
- The respondent failed to comply with an information request or impeded tie performance of a response action.
The government's decisions regarding eligibility for the exemption are not subject to judicial review.
Burden of Proof
The statute clarifies who will bear the burden of proof in an enforcement action. If the government brings the enforcement action, the burden of proof will rest upon the party claiming the exemption. However, in private litigation, the burden will rest upon the plaintiff to prove that the party claiming the exemption is not entitled to it. In addition, new language in the law will allow the prevailing party to recover its attorneys' fees in private litigation.
State Inventory of Sites
States that wish to obtain brownfields grant funding must ensure that their response programs include mechanisms. for:
- Maintaining an inventory of brownfields sites;
- Sustaining adequate enforcement authorities that will ensure that response actions (including long-term operation and maintenance activities) will be completed; and
- Providing for meaningful public notice and participation. In addition, a state may not receive funding unless it maintains and makes available to the public a record of brownfields sites.
Federal Enforcement Deferral
EPA will not take enforcement action against a site that is an "eligible response site" unless:
- The state requests Federal assistance;
- The contamination has migrated across state lines;
- After taking into account the actions that have been taken, EPA determines that the release presents an imminent and substantial endangerment and that additional remedial action is needed; or
- There is new information that. was not known at the time the initial cleanup was approved or completed (e.g., that the contamination at the site is more toxic than originally expected)
- This deferral authority applies only if the state:
- Maintains a record of sites where response actions have been completed;
- Indicates whether the site is suitable for unrestricted use; and
- Identifies any institutional controls relied upon in the remedy.
This deferral provision applies only to those response actions conducted after February 15, 2001.
Under the law, many types of sites do NOT constitute brownfields sites, including:
- Any site listed on the NPL,
- Any site undergoing a removal action;
- Any facility subject to a unilateral administrative order, court order, administrative order on consent or judicial consent decree;
- Any facility which has received a permit under the Clean Water Act, the Safe Drinking Water Act, the Solid Waste Disposal Act, or the Toxic Substances Control Act;
- Any site undergoing corrective action or subject to closure under RCRA, and
- Any site where there has been a release of polychlorinated biphenyls (PCBs).
The government may determine, on a case-by-case basis, that some (but not all) of the sites excluded from the brownfields definition may nevertheless be eligible for funding.
Key Provisions of the Statute
H.R 2869, which combines elements of S. 350 (passed by the Senate in April 99-0) and H.R. 1831 (passed by the House in May 419-0), enjoyed widespread support when it moved through Congress. It provides the following types of financial incentives and exemptions from liability.
The financial assistance provisions state that:
- $250 million per year will be provided for the next five years, for a total of $1.25 billion, to fund brownfields cleanups. The language in the bill is an authorization, not an appropriation, so EPA dogs not expect to have the additional funds in its budget until FY 2003;
- $150 million per year of these funds will be used to assess sites, $50 million per year will be used to cleanup sites, and the other $50 million will be used to cleanup sites contaminated with petroleum products. Non-profit entities that own brownfield sites, as well as governmental entities, will be eligible to apply for the remediation funding;
- A local government may use up to 10 percent of the grant to establish a program to (i) monitor health, or (ii) monitor and enforce institutional controls
Exemptions from Liability
The exemption provisions state that:
- Persons who would otherwise be liable at an NPL site based solely upon their status as a generator or transporter of hazardous substances, and who contributed less than 110 gallons of liquid materials or less than 200 pounds of solid material, would be exempt from liability if disposal, treatment, or transport occurred before April 1, 2001;
- Small businesses (i.e., those with no more than 100 full-time employees); owners, operators and lessees of residential property; and non-profit entities would not be liable for municipal solid waste disposed of at an NPL site;
- In a contribution action brought by a non governmental entity under either section 107 or 113 of CERCLA, 42 U.S.C. §9607 or §9613, the burden would be on the party bringing the action to establish that the foregoing exemptions do not apply. If the party is unsuccessful because the exemption in fact applies, it shall pay the defendant's reasonable defense costs;
- Owners of contiguous properties who can show by a preponderance of the evidence that they did not cause or contribute to the contamination, who conducted "all appropriate inquiry," and who complied with numerous other requirements, shall be exempt from liability; and
- Bona fide prospective purchasers shall generally be exempt from cleanup requirements, but the government may impose a lien (not in excess of the increase in fair market value) on their property to recover any unrecovered response costs.
Miscellaneous provisions include the following
- Brownfields funds can be used to encourage the development of parks, greenways and recreational areas;
- Assessments and cleanups will generally be conducted under state authority and oversight,
- EPA reserves the right to intervene in the event of an "imminent and substantial endangerment"; and
- EPA is required to submit a report on the status of all brownfields sites within three years.
State VCPs and Brownfields Programs
Virtually every state has now developed and successfully implemented a voluntary cleanup program ("VCP") as an alternative to the Superfund cleanup process. Northeast Midwest Institute, Brownfields "State of the States": An End-of-Session Review of Initiatives and Program Impacts in the 50 States (November 2001). Minnesota enacted the first such program in 1988. Minn. Stat. Ann. § 115B.175 (2002). Since then, at least 47 other states and the District of Columbia have adopted some type of VCP, and these programs have provided the vehicle for brownfields redevelopment. One of the most recent bills to become law was the Alabama Land Recycling and Economic Redevelopment Act, which was signed into law on May 21, 2001. See Ala. Code 1975 §22-30E-1 et seq. (2002). In addition, D.C. Law 13-312, which was approved by the City Council in the District of Columbia in December 2000, was approved by Congress in 2001. North Dakota, South Dakota and Wyoming have not adopted programs. See Northeast-Midwest Institute, Brownfield Basics: An Issue Primer (2001).
Many states have adopted separate brown fields legislation as well, which has typically created empowerment zones or provided for brownfields grants, loans, or tax abatements. See, e.g., Ohio's Clean Ohio Revitalization Fund, Pennsylvania's Hazardous Sites Cleanup Fund and Michigan's Brownfield Redevelopment Grant program.
The specific details of each state's VCP or brownfields program may vary dramatically, but the intent in each case has been to create a mechanism for expediting the investigation and, if needed, the remediation of contaminated properties that might otherwise fall between the cracks, and to provide buyers, sellers, and lenders with some certainty about potential liability for future cleanup costs or potential enforcement actions.
Limitations on Liability
A common element of the state VCPs has been the effort to clarify who has liability and when. Many of these state programs specifically exempt "innocent" parties, such as lenders who have not contributed to the release, fiduciaries, prospective purchasers, easement holders, and the like. See, e.g., Texas' Voluntary Cleanup Program (Tex. Health & Safety Code Ann. §361.601 et seq.) (2002) and Virginia's Voluntary Remediation Program (Va. Code Ann. §10.1-1230 et seq. (2002)).
Clarification of Cleanup Requirements and Levels
In the past, interested parties have frequently had a difficult time determining how much investigation or remediation might be required under the applicable regulatory programs. Now, many of the state VCPs use a tiered, risk based approach to cleanup. For example, under the Massachusetts Contingency Plan (MCP), the cleanup goal is "no significant risk" to human health, safety, public welfare, or the environment. See Mass. Gen. Laws Ann. ch. 21E, §3A(j) (2002). The MCP outlines three approaches for determining whether the "no significant risk" level has been achieved: Method 1, Method 2, or Method 3. Method 1 is a "look up" table providing dear numeric standards for 100 chemicals commonly found in soil or ground water. Method 2 allows for some adjustments in these numbers to account for site specific conditions. Method 3 allows cleanup standards to be determined on the basis of a site-specific risk assessment. Id. This tiered, decision-making process has broken the cycle of collecting information for information's sake. Now, parties know early in the transaction how much investigation or remediation might be required by the state.
Streamlined Governmental Review Process
In the past, regulatory agencies were under no requirement to review and approve or disapprove environmental studies quickly. This uncertainty and delay would frequently kill many real estate transactions. Now, many of the state VCPs include provisions to expedite the investigation and remediation of potentially contaminated properties. In Pennsylvania, for example, the Department of Environmental Resources (DER) has 60 days (90 days if a site specific cleanup number is selected) in which to respond to a final environmental report. See 35 Pa. Cons. Stat. Ann. §6020.102 et seq. (2001). If it fails to do so, the report is deemed approved, and the applicant may proceed with the cleanup. In Arizona, the Department of Environmental Quality must approve, deny or request additional information within 45 days of a request, and must closeout a case within 60 days of submission of a final report. See Ariz. Rev. Stat. §49-152 (2002).
In commercial real estate transactions, parties have frequently argued over how to determine that enough investigation and remediation has occurred. Most state VCPs now provide documentation of completion of the investigation or remediation. These completion letters take, many forms, and have differing degrees of finality, but they offer some certainty about the sufficiency of the work that has been done at the site.
In Minnesota, for example, there are six types of completion letters, ranging from certificates of completion, partial no action letters, no action letters, no association determinations, off-site source determination letters, and covenants not to sue on a site-by-site basis. See Minn. Stat. Ann. §115B.175 (2001). No Further Action Letters and Certificates of Completion are common in other states. See, e.g., Va. Code
Ann. § 10.1-1230 et seq. (2001); Del. Code Ann tit. 7, §9101 et seq. and Ch 60 (2001); Kan. Stat. Ann. §65-34,161(2001). Only a handful of states offer broad based covenants not to sue. See, e.g., Conn. Gen. Stat. Ann. §22a-133 et seq. (2002); Ind. Code Ann. §13-25-5-1 et seq. (2002); Mich. Comp. Laws Ann. §324.20101 et seq. (2002).
Federal and State Financial Incentives
Both the Federal government and the states have recognized the benefits of offering financial incentives for the redevelopment of brownfields. These incentives have taken the form of grants, loans, and tax abatements or deferrals. Substantial, additional financial incentives are likely to be forthcoming in the future.
Brownfields Assessment Demonstration Pilot Grants
Since its inception in 1993, EPA has offered Brownfields Assessment Demonstration Pilot grants of up to $200,000 each to 399 cities, states, and tribes nationwide. EPA expects to select up to 38 additional National Assessment pilots by April 2002. These grants have totaled more than $90.9 million Recipients have included the cities of Miami, Florida; Clearwater, Florida, Baltimore, Maryland; Richmond, Virginia; Cleveland, Ohio, Knoxville, Tennessee; Fayetteville, North Carolina; Ketchikan Gateway Borough, Alaska, and Detroit, Michigan. On April 20, 2001, EPA Administrator Christie Whitman awarded 36 additional grants, totaling over $7 million, as well as $5 million to continue and expand assessments on existing sites.
Additional Federal Grants
EPA has provided numerous other types of incentives as well, such as:
- 150 Brownfields Cleanup Revolving Loan Fund Pilots (with funding of up to $1 million over five years). This included $26 million funds to an additional 46 communities in 2001.
- In addition, there are over 50 Job Training Pilot Program Grants (with funding of up to $200,000 each) in 27 states, the District of Columbia, and Puerto Rico.
- Twenty-eight Brownfields Showcase Communities. (EPA designated 16 Brownfields Showcase Communities in 1998, and an additional 12 Brownfields Showcase Communities in October 2000.
- Fifty grants as part of its Superfund Redevelopment Initiative (with funding of up to $100,000 each). www.epa.gov/superfund/pro-grams/recycle/pilotrndex.htm;
- RCRA Brownfields Redevelopment Initiative Pilots;
- HUD-granted funds as part of its Brown fields Economic Development Initiative (BEDI) (wow.hud.gov/nofa/suprnofa/supnof a2/bedi. html) and Brownfields Economic Development Initiative ("BEDP') programs.
- Finally, Congress has provided limited tax incentives for certain Brownfields cleanup costs as part of the 1997 Taxpayer Relief Act. Those incentives were extended (and broadened) as part of the Community Renewal Tax Relief Act, signed by President Clinton on December 16, 2000. See Section 162 of the Community Renewal Tax Relief Act, which was adopted as part of HR 4577.
State Tax Incentive Programs
Many states have also adopted tax incentives in their brownfields programs:
- In 2001, the District of Columbia established a voluntary cleanup program that authorizes the mayor to submit proposed rules to establish certain cleanup incentives such as tax credits to offset property taxes in connection with the cleanup and redevelopment of the property as well as to establish a contaminated property cleanup fund to provide grants and loans;
- In Ohio, H.B. 441 was adopted in 1996 to allow credits against corporate franchise and state income taxes for any taxpayer who completes a voluntary cleanup of a brownfields site. These tax credits can be either (1) the lesser of $500,000 or 10 percent of the eligible cleanup costs, or, (2) if the area is economically disadvantaged, the lesser of $750,000 or 15 percent of the eligible cleanup costs. Also in 1996, H.B. 442 created a grants program to promote land acquisition, infrastructure improvements, voluntary cleanup actions, and renovation of properties in certain areas. Over the next four years, the Clean Ohio Fund will have $175 million available for evaluation.
- In Pennsylvania, financial assistance has been available for "innocent" volunteers who wish to conduct voluntary cleanups. This $15 million fund includes grants and low interest loans which can be used to cover up to 75 percent of the costs of conducting an environmental investigation and cleanup. The authority for the program is the Hazardous Sites Cleanup Act. See 35 Pa. Cons. Stat. Am. §6020.101 et seq. (2001). In addition, $2 million in grants (up to $50,000 per site) is available to municipalities, nan profit economic development agencies and similar agencies for conducting environmental assessments in areas that have been designated distressed communities.
- Florida has provided a $2,500 tax credit for every new job created at a remediated site. In addition, there is a 33 percent tax credit, of up to $250,000 per site, for the costs of voluntary cleanup if those costs are integral to site rehabilitation. The tax credit can be transferred to the new owner. Florida has also established a revolving loan trust fund providing low-interest loans to local governments, community redevelopment agencies, and non-profit corporations.
- Illinois has established an Environmental Remediation Tax Credit, in which a developer can obtain a 25 percent income tax credit if he deans up contamination that he did not cause. The maximum credit is $40,000 per year and $150,000 per site (after the first $100,000 in development costs). In addition, the Illinois Brownfields Redevelopment Grant Program (BRGP) offers grants worth a maximum of $120,000 each to municipalities to investigate brownfields.
- Massachusetts has created a $15 million fund for environmental insurance, known as the Brownfield Redevelopment Access to Capital (BRAG) program. Massachusetts has also enacted the Massachusetts Economic Development Incentive (a five percent state investment tax credit, and a 10 percent abandoned building tax deduction), as well as remediation tax credits ranging from 25-50. Cities are allowed to negotiate away back taxes.
In dealing with the brownfields problem, industry responses have fallen into two major categories: risk-based corrective action, and new forms of insurance.
Risk-Based Corrective Action
The ASTM E-50.04 committee has developed a guide for conducting risk based corrective action at chemical release sites ("RBCA II") (ASTM E 2081-00). www.astm.org. This guide uses a tiered approach to integrate risk and exposure assessment practices with site assessment and remedial measure selection to ensure that the selected remedy is cost-effective yet protective of human health and the environment. The basic steps in the RBCA process include:
- Tier 1. Site assessment and comparison of concentrations of chemical of concern to Tier 1 Risk Based Screening Levels (RBSLs) for human exposure pathways, and to Relevant Ecological Screening Criteria (RESCs) for potential ecological exposure pathways. Identification of any Other Relevant Measureable Criteria (ORMCs). Collectively, the RBSLs, the RESCs, and the ORMCs serve as the Tier 1 corrective action goals for the site,
- Tier 2. Collection of site specific information and development of point(s) of compliance and Tier 2 corrective action goals based on the Site Specific Target Levels (SSTLs), the Site Specific Ecological Criteria (SSECs), or the ORMCs, as applicable;
- Tier 3. Collection of additional site specific information and development of point(s) of compliance based upon Tier 3 corrective action goals, based on SSTLs, SSECs, or ORMCs, as applicable.
By following this decision-making process, an interested party can avoid collecting information about a site for no specific purpose. If the initial information is sufficient to determine whether the contamination poses any risk to human health or the environment, then no further assessment may be needed. If, however, more specific information about exposure pathways and toxicity assumptions is needed before a cost-effective remedy can be selected, more detailed and site-specific information should be collected (Tier 2 and/or Tier 3 evaluation). In this regard, the ASTM approach provides a framework for conducting tiered risk assessments, rather than specific cleanup levels.
Environmental Insurance Products
A number of environmental insurance products have become available on the market in the past c6uple of years that help limit the risk presented by real or perceived environmental contamination. These products fall into two basic categories: remediation stop loss insurance, and transfer insurance:
- Remediation stop loss insurance protects the insured in the event that the costs of remediation exceed a previously agreed upon ceiling for the estimated cleanup costs, or if unknown conditions are later discovered on the property;
- Transfer insurance protects the insured against third- party lawsuits, and against reopeners because of regulatory changes or the discovery of unknown conditions. This coverage is available for both known and unknown contamination.
Additional Federal Initiatives
EPA has undertaken several initiatives to lessen the private sector's concerns about environmental contamination on real property. See, e.g., http://www.epa.gov/superfund/programs/ re-forms/reforms/2-8.htm#land.
These initiatives have included:
Documentation regarding the status of investigations and remediations and whether sufficient work has occurred (comfort letters). See, EPA, Guidance: Model Comfort Letter Clarifying NPL Listing, Uncontaminated Parcel Identifications, and CERCLA Liability Involving Transfers of Federally Owned Property (Jan. 1996); Memorandum: Model Comfort Letter Clarifying NPL Listing, Uncontaminated Parcel
Identifications, and CERCLA Liability Involving Transfers of Federally Owned Property (Aug. 1995); Memorandum: Policy on the Issuance of Comfort/Status Letters (Nov12, 1996); and Policy on the Issuance of Comfort/Status Letters (Nov. 12, 1996); and Delisting of 32,300 sites from CERCLIS. www.epa.gov/superfund/ programs/reforms/docs/overv00.pdf.
Certain liability reforms have included:
- Underground Storage Tank Lender Liability Rule. EPA, Underground Storage Tank-Lender Liability Rule, 60 Fed. Reg. 46,692,46,715 (Sept. 7, 1995);
- Updated Prospective Purchaser Guidance. See Guidance on Agreements with Prospective Purchasers of Contaminated Property, 60 Fed. Reg. 34,792 (July 3, 1995) and Expediting Requests for Prospective Purchaser Agreements (Oct. 1999) (www.epa.gov/superfund/programs/ reforms/reforms/2-4e.htm). The guidance was updated and clarified on January 10, 2001. See www.epa.gov/superfund/programs/reformst/docppa_clar.pdf;
- Policy Toward Owners of Property Containing Contaminated Aquifers. This policy, originally published in 1995 by EPA, see Policy Toward Owners of Property Containing Contaminated Aquifers, 60 Fed. Reg. 34,790 (July 3, 1995), was codified in section 221 of H.R 2869;
- Lender Liability Guidance. Policy on CERCLA Enforcement Against Lenders and Government Entities That Acquire Property Involuntarily, 60 Fed. Reg. 63,517 (Dec.11, 1995);
- Guidance for Local Governments Which Involuntarily Acquire Property. See Municipal Immunity from CERCLA Liability for Property Acquired through Involuntary State Action (Oct. 20, 1995)
- Land Use Process in the Remedy Selection Process. See OSWER Directive 9355.7-04 (www.epa.gov/superfund/programs/reforms/ reforms/2-4e.htm) and OSWER Directive 9355.706P, Reuse Assessments: A Tool to Implement the Superfund Land Use Directive (signed June 4, 2001);
- Soil Screening Guidance. See OSWER Directive 9355.414FSA (www.epa.gov/superfund/programs/reforms/reforms/2-4e.htm);
- Recognition of risk-based corrective action/performance oriented goals in both the underground storage tank and RCRA corrective action programs. See Use of Risk-Based Corrective Action in UST Corrective Action Programs, OSWER Directive 9610.17 (March 1, 1996) (www.epa.gov/swerustl/directiv/od 961017.htm);
- Memoranda of Agreement (MOA) with 17 states that have "acceptable" VCPs in which EPA has generally agreed to exercise its enforcement discretion with regard to sites in the states, VCPs. www.epa.gov/swerosps/bf/pdf/statemoa.pdf.
These Federal initiatives, as well as section 128 of the new brownfields law, have helped to clarify some of the Superfund liability issues and to reduce the likelihood that EPA will "second guess" voluntary cleanup actions conducted in states with a well-established VCP.
Environmental contamination no longer needs to be a deal breaker in commercial real estate transactions, particularly in those states that have well-developed VCPs and brownfields programs.
The new brownfields legislation, as well as the recent administrative initiatives, have gone a long way toward providing buyers, sellers, lenders, and fiduciaries with greater certainty that they will not be caught in the Superfund liability net, financial incentives to deal with contaminated properties, certainty about likely cleanup costs, and streamlined governmental review processes.
As a result, interested parties are now able to evaluate environmental risk in a rational manner, rather than blindly abandoning even mildly contaminated properties. The result is a system that is good for the environment, good for the community, and good for business.