Senate Brownfields Bill With Added Liability Relief Advances

Environmental due diligence is a critical component of any property transaction where potential environmental risks are a concern—minimize risks and protect yourself from...

By Sylvia Carignan

New bipartisan brownfields legislation in the Senate could let some entities off the hook for contaminated site cleanup, while allowing more parties to become prospective site purchasers.

The Senate Environment and Public Works Committee July 12 approved the Brownfields Utilization, Investment, and Local Development Act of 2017 (S. 822). The committee approved an amendment to the bill by voice vote that would change the liability qualifications for parties responsible for the cleanup of Alaska properties and tenants interested in buying and redeveloping brownfields.

A spokesman for the committee declined to state whether the bill is expected to reach the Senate floor before members’ August recess.

Kelley Race, brownfields program manager for engineering and environmental consulting firm TRC Solutions, told Bloomberg BNA the legislation could bring wider attention and cleanup funds for contaminated sites, especially those in rural areas.

But urban areas see the benefits, too, said Michael Egenton, executive vice president of the New Jersey Chamber of Commerce.

“We’ve always been supportive, in concept, of taking properties that are just sitting idle and having them remediated and cleaned up so that they can go to potential use for localities and for businesses,” he told Bloomberg BNA.

Relief for Alaska Natives

The bill proposes shielding Alaska Native villages and Alaska Native corporations from liability for cleanup at contaminated properties they received from the federal government. The 13 Native corporations administer settled land and financial claims made by the Alaska Natives. The relief wouldn't apply to villages or corporations that contributed to or caused contamination.

In March, Sarah Lukin, board member of the Afognak Native Corp. in Alaska, testified before the committee that the potential liability for contaminated sites is keeping Alaskans from reporting toxic sites.

They are afraid they will have to pay millions for remediation, she said.

A 1997 EPA policy meant to alleviate uncertainty in situations like those hasn't sufficiently addressed the issue, according to the Alaska Native Village Corporation Association.

“To have received the contaminated lands at all was an injustice, but to be left with the liability to clean up the waste left after years of abuse by various government agencies is simply unacceptable,” Hallie Bissett, executive director of the Alaska Native Village Corporation Association, told Bloomberg BNA.

Bissett said she is “encouraged” by the amendment’s provisions for Alaska Native villages and Alaska Native corporations.

Sponsoring the amendment to the bill were Sens. John Barrasso (R-Wyo), Environment and Public Works’ chairman; Thomas Carper (D-Del.), the ranking member; and Jim Inhofe (R-Okla.), Ed Markey (D-Mass.), Dan Sullivan (R-Alaska), Cory Booker (D-N.J.), and Sheldon Whitehouse (D-R.I.).

Protecting Tenants

The Senate bill also proposes changes for those in tenancy agreements or leases with owners of contaminated sites.

Under the proposed changes, those tenants or lessees would be allowed to qualify as “bona fide prospective purchasers” of those sites.

Those changes are “on the margins,” said Larry Schnapf of Schnapf LLC, an environmental law firm specializing in brownfields.

“Most of the nation’s brownfields are addressed under state programs by private developers, so the federal assistance is not really a game changer, except perhaps for some very distressed areas,” he told Bloomberg BNA.

Having bona fide prospective purchaser status allows a person to acquire a brownfield site with known or suspected contamination without becoming liable for the contamination.

Such a purchaser must demonstrate that they aren't affiliated with liable parties, among other conditions.

House Action

On June 28, the House Energy and Commerce Committee put its stamp of approval on H.R. 3017, a similar brownfields reauthorization bill, via voice vote.

None of the four brownfields bills in the House propose changes to liability or prospective purchasers.

The Environmental Protection Agency’s brownfields program provides grants to those who want to redevelop contaminated properties. The program started in 2002 and hasn't been reauthorized since 2006.

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Environmental Due Diligence Guide™ & Environmental Due Diligence Guide Report™