Brownfields, those abandoned, polluted tracts of urban land have gotten a boost from recent federal legislation. While many states have had "brownfields initiatives" legislation designed to encourage redevelopment of brownfield properties for many years, the federal government has just recently gotten on board. The Small Business Liability Relief and Brownfields Revitalization Act, recently enacted, attempts to provide incentives under federal law for property owners and prospective purchasers to redevelop brownfield properties. But beware, the legislation is not a panacea for urban blight.
The Act establishes a prospective purchaser defense to liability for environmental contamination. It is intended to allow purchasers, after the date of enactment of the Act, to buy property without buying the liability for environmental contamination. It requires the prospective purchaser to establish the following:
- That the disposal of hazardous substances occurred prior to the purchase of the property.
- That the prospective purchaser conducted a due diligence inquiry into the prior ownership and uses of the property. This inquiry must meet the standards of the due diligence inquiry required by the innocent purchaser defense (which is available to those who purchased property prior to the effective date of the Act and can meet its criteria). EPA is directed to promulgate standards for the due diligence inquiry. In the interim, the ASTM Standard for Phase I Assessments is endorsed.
- That the prospective purchaser has complied with all notice requirements. These may include notices of a release to federal or state agencies.
- The prospective purchaser must cooperate with any person authorized to conduct response activities at the site (such as federal or state agencies) by providing access and assistance. The purchaser is also required to comply with subpoenas and requests for information.
- The prospective purchaser must comply with any institutional controls (such as the maintenance of a cap, markers, limitations on use, etc.) established in connection with remediation activities.
- The prospective purchaser acts with "due care" – essentially preventing the contamination at the property from harming those who come into contact with it and stopping continuing releases.
- The prospective purchaser cannot be affiliated with the party responsible for the release or disposal of hazardous substances.
What the Act does not do is provide the prospective purchaser with a means of verifying that the inquiry conducted was adequate. There is no provision for agency sign off on the inquiry, although the final regulations, once promulgated, may do that.