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Brownfields Law Alert – Consolidated Appropriations Act Amends CERCLA

2018 BUILD Act in Consolidated Appropriations Act Amends CERCLA Liability Provisions and Provides Additional Brownfield Grant and Loan Funding

On March 23, 2018, the President signed into law the Consolidated Appropriations Act, 2018 (“Appropriations Act”) (Public Law No. 115-141). The Appropriations Act includes the Brownfields Utilization, Investment, and Local Development Act of 2018 (“BUILD Act”), which makes some notable changes to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”).

Among other amendments to CERCLA, the BUILD Act broadens the state and local government exception to owner and operator liability under CERCLA, extends the bona fide prospective purchaser defense to liability to lessees, expands eligibility for brownfield redevelopment grants and loans to nonprofit organizations (and those LLCs and LPs wholly comprised of nonprofit managers or members) and to publicly-owned brownfield sites with non-contributory owners, raises the cap on remediation grant funds for eligible brownfield sites, and creates a new multipurpose brownfields grant program.

KEY CHANGES TO CERCLA

The BUILD Act makes significant changes to the following CERCLA sections:

  • 42 U.S.C. 9601(20)(D). Section 2 of the BUILD Act amends the CERCLA definition of “owner and operator” to more broadly exclude state and local governments from liability for on-site contamination existing before they acquired title to the property through their sovereign powers. Specifically, the definition excludes “a unit of State or local government which acquired ownership or control through seizure or otherwise in connection with law enforcement activity, or through bankruptcy, tax delinquency, abandonment, or other circumstances in which the government acquires title by virtue of its function as sovereign.” (emphasis added to show amended text). By striking the “involuntarily acquires title” language, Congress has shielded local governments that involuntarily or voluntarily seize contaminated property through their governing powers.
  • 42 U.S.C. 9601(20)(E). Section 3 of the BUILD Act adds a new exception to the definition of “owner and operator” from CERCLA liability for facilities conveyed to Alaska native villages and native corporations from the U.S. government.
  • 42 U.S.C. 9601(39)(D)(ii)(II). Section 4 of the BUILD Act revises the definition of petroleum contaminated “brownfields” to require that such sites be sites “for which there is no viable responsible party and that is determined by the Administrator or the State, as appropriate, to be a site that will be assessed, investigated, or cleaned up by a person that is not potentially liable for cleaning up the site under this Act or any other law pertaining to the cleanup of petroleum products[.]” (emphasis added to show revised text).
  • 42 U.S.C. 9601(40)(A). Section 5 of the BUILD Act extends the definition of a liability-exempt "bona fide prospective purchaser" to include tenants acquiring a leasehold interest in a facility after January 11, 2002. This amendment essentially codifies pre-existing EPA enforcement guidance regarding tenant liability.
  • 42 U.S.C. 9604(k). Sections 6 through 13 of the BUILD Act amend Section 104(k) in the following ways:
    • Section 6 of the BUILD Act expands eligibility for brownfield redevelopment funding to include nonprofit organizations, specifically: 501(c)(3) nonprofit organizations, limited liability companies whose managing members or sole members are all nonprofit organizations, limited partnerships whose general partners or sole members are all nonprofit organizations, and qualified community development entities (defined under section 45D(c)(1) of the Internal Revenue Code of 1986).
    • Section 7 extends grant funding to certain publically-owned brownfield sites, even though the eligible entity does not qualify as a bona fide prospective purchaser, as long as the eligible entity (e.g., a state, local government, or subdivision thereof) acquired the property before January 11, 2002, and has not caused or contributed to a release or threatened release of a hazardous substance at the property.
    • Section 8 increases the per-site cap on remediation grant funding from $200,000 to $500,000, and provides that the EPA Administrator may waive this cap and allow a maximum of $650,000 for each site.
    • Section 9 creates a grant program for multipurpose brownfields in which the EPA Administrator can award eligible entities, including state and local governments, up to $1,000,000 in order to “carry out inventory, characterization, assessment, planning, or remediation activities at 1 or more brownfield sites in an area proposed by the eligible entity” provided the eligible entity owns the sites.
    • Section 10 now allows eligible entities to use up to 5 percent of grant or loan funding for administrative costs.
    • Section 11 amended the criteria under EPA’s system of ranking grant applications to consider the extent to which the grant would address sites that are adjacent to a waterbody or flood plain or would facilitate location of renewable energy facilities or energy efficiency improvement projects (such as district energy systems) at a brownfields site.
    • Section 13 allocates $200,000,000 for each of fiscal years 2019 through 2023 for funding under Section 104(k).
  • 42 U.S.C. 9628(a).
    • Section 14 makes available technical assistance grants to small communities of 15,000 or less, Indian tribes, rural areas, and disadvantaged areas to help implement brownfield programs under CERCLA Section 104(k)(7).
    • Section 15 authorizes $50,000,000 in funding for state or Indian response programs for each of fiscal years 2019 through 2023.

Please contact Polly Jessen if you have any questions about the BUILD Act amendments.

Kaplan Kirsch & Rockwell publishes Brownfields Law Alerts to announce late-breaking developments in legislation, regulation, and policy for our clients and colleagues. Nothing in the Alerts is intended as legal advice, and readers are reminded to contact legal counsel for legal advice on the matters that appear in our Alerts.