In January 2002, President Bush signed the Small Business Liability Relief and Brownfields Revitalization Act (2002 Brownfields Amendments) as an amendment to the Comprehensive Environmental Response, Compensation, and Liability Act of1980 (CERCLA or Superfund).2 The 2002 Brownfields Amendments promote brownfields redevelopment by relaxing CERCLA's harsh strict liability regime and providing federal funding for the assessment and remediation of brownfield properties.

In 2018, President Trump signed the Brownfields Utilization, Investment, and Local Development Act (BUILD Act), amending CERCLA to increase the size of brownfield redevelopment grants, expand liability protections for lessees of contaminated real property, and incentivize renewable energy development.3 The BUILD Act also provides additional liability protection for state and local government entities by excluding these entities from CERCLA's definition of "owner or operator" so long as they have acquire property by virtue of their function as sovereigns; there is no longer any need to demonstrate that the acquisition was "involuntary."4

§ 8.2.1—Bona Fide Prospective Purchasers

The 2002 Brownfields Amendments added a new defense to landowner liability under CERCLA that allows a buyer to knowingly purchase contaminated property from the party that caused the contamination and still avoid CERCLA liability. The BUILD Act expanded this defense for lessees of contaminated real property that previously could claim the defense only if the landlord-owner was eligible for the defense in its own right. Under the exemption for "bona fide prospective purchasers" (BFPP), an owner/operator qualifies as a BFPP and is exempt from CERCLA liability if it satisfies the following requirements:

• Acquisition Date and No Post-Acquisition Disposals. It acquired the property in question after January 11, 2002, and all disposal of hazardous substances at the facility occurred prior to the acquisition of the facility.
• No Potential Liability/Affiliation. It is not otherwise potentially liable, and is not affiliated (via certain contractual, familial, corporate, or financial relationships) with any person potentially liable, for response costs at a facility.
• Reasonable Steps. It has taken reasonable steps to stop any continuing release, prevent any future threatened releases, and prevent or limit exposure to any previous release.
• Cooperation and Access/No Impediment. It provides cooperation and access to authorized persons conducting response actions and natural resource restorations and does not impede the performance of such actions or restorations.
• Compliance with Land Use Restrictions. It complies with land use restrictions and does not impede institutional controls established or relied on in connection with the response action.
• Compliance with Information Requests. It complies with all Environmental Protection Agency (EPA) information requests and administrative subpoenas.
• Compliance with Notice Requirements. It provides legally required notices with respect to the discovery or release of hazardous substances at the facility.
• All Appropriate Inquiries. Prior to acquiring the property, it "made all appropriate inquiries" into the previous ownership and uses of the facility in accordance with generally accepted good commercial and customary standards and practices in accordance with EPA regulations.5

Unlike "innocent landowners" and "contiguous property owners" under CERLCA, a BFPP does not need to show that when it acquired the property, it did not know or have reason to know that the property was contaminated. Importantly, if a real estate transaction is structured as an equity purchase (such as the purchase of LLC interests), the purchaser will not be able to claim the BFPP exemption unless the entity it acquires also could.

EPA has issued a rule defining the "all appropriate inquiry" requirement and has attempted to clarify many of the other requirements of the BFPP defense through its "Common Elements" guidance, which it revised in 2019.6 The Agency has promised to use its enforcement discretion to avoid extremely broad...

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