The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the “Superfund” law, provides tools for local governments and private developers to address environmental contamination found in and near Superfund sites.
In 2018, Congress passed the Brownfields Utilization, Investment, and Local Development Act (BUILD Act). The BUILD Act amended the Local Government Acquisitions exemption to add types of exempt acquisitions and liability protections to state and local governments. 42 U.S.C. § 101(20)(D). Previously, the exemption would only apply when local governments acquired the property “involuntarily.” This did not sit well with many municipalities because it removed all elements of property acquisition strategy. The result of the limited, previous exemption is that it discouraged local governments from potentially acquiring Brownfields for redevelopment. We are communicating this now because many municipalities are not aware of the change.
CERCLA § 101(20)(D) now states “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” is exempt from the definition of “owner or operator” if that government entity did not cause or contribute to the release or threatened release. This exemption essentially mirrors the local governmental unit exemption found in applicable Wisconsin law in Wis. Stat. § 292.11(9) (e). For more information on Wisconsin’s exemption for municipalities, Wisconsin Department of Natural Resources has a handy guidance document (RR055) dated June 2017: Local Government Environmental Liability Exemptions in Wisconsin.
The United States Environmental Protection Agency (EPA) released guidance in June 2020 interpreting the CERCLA amendments in the BUILD Act. “Superfund Liability Protection for Local Government Acquisitions after the Brownfields Utilization, Investment, and Local Development Act of 2018″(epa.gov). This amendment and clarifications in EPA guidance rectify the role of municipalities in shepherding the redevelopment and reuse of contaminated properties in their communities. EPA does not wish to discourage municipalities from engaging Superfund sites, they want to assist and incentivize municipal ownership and control. From the EPA Guidance: “By acquiring ownership or control or supporting the transfer of ownership of contaminated properties, local governments have an opportunity to evaluate and assess public safety needs and promote redevelopment projects that will protect and improve the health, environment, and economic well-being of their communities.”
Also from the EPA Guidance document, the EPA outlines the following potential avenues for municipalities to become involved at contaminated properties:
- Promoting redevelopment through municipal incentives such as zoning and use exemptions, tax increment financing, and infrastructure improvements
- Responding to emergencies and potential public health, safety, and environmental hazards
- Foreclosing on and transferring tax-delinquent properties
- Collaborating with a current owner to obtain access, investigate, clean up, and redevelop property
- Acquiring property and “simultaneously” or subsequently transferring it to a third party
- Utilizing a “land bank” or redevelopment agency to acquire, hold, lease, and/or control vacant, abandoned, and tax delinquent properties
- Acquiring property for short-term and long-term use or redevelopment
- Enforcing zoning and building codes and planning future land use
- Performing demolition, site assessment, investigation, and cleanup activities
- Securing property access and institutional controls such as deed restrictions, environmental covenants, and land use controls
- Participating in public meetings concerning the site property