Division of Spill Prevention and Response Contaminated Sites

Introduction

Both federal and state environmental laws are based on the principle that the "polluter pays" for cleanup of contamination and not the taxpayer or the government. As a cornerstone of that maxim, for both state and federal law, the owner or operator of a contaminated property is generally held liable for the property’s cleanup based solely on their ownership of the property. Liability concerns may impact some parties’ decision whether or not to acquire contaminated property. To encourage the purchase, cleanup, and revitalization of brownfields, federal and state laws provide relief from liability to certain classes of responsible parties when they did not cause or contribute to the contamination. These provisions can be utilized by parties who have demonstrated an interest in reusing a brownfield property.

Understanding liability in the brownfields context is critical to anyone who has purchased or acquired a property (or may purchase or acquire a property) that may be contaminated in order to determine whether they are responsible for paying for part or all of a cleanup. In addition, potentially responsible parties (PRPs) are not eligible to receive brownfields funding unless they can demonstrate they qualify for liability relief under federal law.

What laws set out liability and liability relief for brownfields?

Both federal and state laws create obligations and requirements for assessing and cleaning up contaminated sites, including brownfields, and establish a liability framework for determining who is responsible for paying for such activities. Key laws include:

Federal Laws

• Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or more commonly known as Superfund);
• Under CERCLA, the Small Business Liability Relief and Brownfields Revitalization Act (SBLRBRA, or more commonly known as the Brownfields Amendments); and
• Brownfields Utilization, Investment and Local Development (BUILD) Act.

State of Alaska Laws

• Alaska Statute (AS) 46.03.822: Strict Liability for the Release of Hazardous Substances

Who can be held liable?

In general, federal and Alaska laws require certain classes of people (PRPs) to pay for cleaning up contamination existing on a property. Depending on whether you are looking at federal or state law, PRPs could include:

• Owners and persons with control over hazardous
substance at the time of release;
• Owners and operators at the time of the release;
• Current owners and operators;
• Generators and arrangers; and
• Transporters.

What liability relief is there under CERCLA with respect to brownfields?

The Brownfield Amendments outline and clarify liability relief for landowners who acquire contaminated property and meet a number of statutory criteria. These provisions are designed to be self-implementing; however, in limited circumstances and based on available resources, EPA may also issue clarifying “comfort/status letters,” which provide prospective purchasers with the information the Agency has about a property at the time of the letter’s issuance. Any questions regarding potential federal liability should be directed to the appropriate EPA Region 10 project officer.

Innocent Landowner (ILO)

Purchased property with no knowledge of contamination at the time of purchase and:

• Conducted All Appropriate Inquiry prior to purchase
• Must satisfy ongoing obligations

More information on ILO³

Bona Fide Prospective Purchaser (BFPP)

Purchased property knowing, or having reason to know the property is contaminated and:

• Conducted All Appropriate Inquiry prior to purchase
• Must satisfy ongoing obligations
• Demonstrate no affiliation with liable party
• Acquired property after January 11, 2002

More information on BFPP⁴

Contiguous Property Owners (CPO)

For property adjacent to source of contamination; purchased property with no knowledge of contamination at the time of purchase and:

• Conducted All Appropriate Inquiry prior to purchase
• Must satisfy ongoing obligations
• Demonstrate no affiliation with liable party

More information on CPO⁵

Native Corporation Receiving Contaminated Property Under ANCSA

• The BUILD Act (2018) provided federal liability relief for Alaska Native Villages and Native Regional Corporations for contaminated property that was conveyed pursuant to ANCSA.
• Federal liability relief is available so long as the entity did not cause or contribute to the contamination or release of a hazardous substance.
• The ANCSA Contaminated Lands Partnership Group consists of representatives from Statement of Cooperation (SOC) agencies, ANCSA village and regional corporations, and tribes.  The Partnership Group collaborates on ways to address sites identified in the ANCSA Contaminated Lands inventory (which is hosted by the Bureau of Land Management (BLM) and DEC), including the verification, assessment and cleanup of ANCSA-conveyed lands.  For more information  on the Partnership Group or sites in your region, please contact Joy Britt, ANTHC Contamination Support Program, at jdbritt@anthc.org.

Alaska Statute 46.03.822 defines the conditions under which a person may be relieved of liability. The most common liability relief that may be available to private parties/landowners, municipalities, and Native Village and Regional Corporations include: (1) third party liability; (2) involuntary acquisition of property by a unit of state or local government; and (3) Native Corporations receiving property under ANCSA.

Third Party Liability (TPL) – AS 46.03.822(b), (c), and (l)

A PRP can seek liability relief by showing third party liability. This relieves the PRP from some aspects of liability:

• The release of a hazardous substance (including petroleum) occurred solely as a result of an intentional or negligent act or failure to act by a third party who is not otherwise affiliated with the person (e.g., contractual or employment relationship). The person must also have:
  • exercised due care with respect to the hazardous substance; and
  • taken reasonable precautions against the act or omission of the third party
• The person, within a reasonable period of time after the act occurred, must have:
  • discovered the release of the hazardous substance; and
  • began efforts to contain and clean up the hazardous substance
• In addition, the person must undertake all reasonable inquiries into prior ownership and use of the property and did not know or have a reason to know there had been a release of a hazardous substance
• Due diligence considerations to establish whether a person had no reason to know of a prior release include:
  • specialized knowledge or experience;
  • purchase price compared to the property value;
  • commonly known or reasonably ascertainable information about the property;
  • obvious or likely presence of contamination; and
  • ability to detect contamination by appropriate inspection.

Involuntary Acquisition of Property by a Unit of State or Local Government – AS 46.03.822(k)

• Acquired by a government unit, including municipalities, through some involuntary acquisition process by virtue of being the sovereign. For example, through:
  • bankruptcy, foreclosure, tax delinquency, abandonment or eminent domain.
• Government unit not liable as an owner/operator under AS 46.03.822 for pre-acquisition soil/groundwater contamination
• Must address post-acquisition leaks from tanks, drums, or other closed receptacles.

Native Corporations Receiving Contaminated Property Under ANCSA – AS 46.03.822(m)

• Under this provision, a Native Corporation that acquired land pursuant to ANCSA is not liable for a release or threatened release of a hazardous substance on the land unless the Native Corporation, by an act or omission, caused or contributed to the release or threatened release of the hazardous substance.
• In other words, a Native Corporation would not be liable so long as the contamination occurred prior to the land’s conveyance and they did not actively or passively further the contamination.