May 4, 2018
BUILD Act: Changes to the CERCLA Bona Fide Prospective Purchaser Liability Defense
POSTED BYKen Kirk, P.G.
The 2018 Brownfields Utilization, Investment, and Local Development (BUILD) Act was enacted by the United States Congress on March 23, 2018 as part of the Consolidated Appropriations Act of 2018. The BUILD Act ( page 705 of the Appropriations Act) more than doubles funding for the EPA Brownfield Program, authorizing the appropriation of up to $200,000,000 each year through 2023 with an additional $50,000,000 for state response program funding in each of those fiscal years.
Beyond the appropriation, the BUILD Act does not significantly revise the Brownfields program. However, it includes two noteworthy changes that amends Bona Fide Prospective Purchaser (BFPP) liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or the Superfund law). These are:
- 1. Provides CERCLA liability exemptions to local and state governments that seize contaminated property “through seizure or otherwise in connection with law enforcement activity”.
- 2. Expands the definition of a “bona fide prospective purchaser” to include tenants entering a lease for a property after January 11, 2002. It also amends the CERCLA act by adding language creating two options for tenants to establish a BFPP defense.
- A tenant can claim the BFPP defense by showing that the lessor (i.e., property owner/landlord) satisfied the BFPP requirement by making an all appropriate inquiry investigation and taking due care for any hazardous substances found at the site, providing cooperation and access for any environmental cleanup response actions and maintaining institutional controls. The BFPP defense can be claimed by the tenant even if the property owner subsequently loses the BFPP defense, so long as that loss was not the result of anything the tenant did or did not do.
- The tenant can also provide its own BFPP defense, by conducting its own “all appropriate inquiry” before signing the lease or occupying the property, and then meeting post-occupancy due care and cooperation conditions required by the Act.
Ken Kirk is a Professional Geologist at Smith Management Group and can be reached at email@example.com.