PRLWindfallLien - The CERCLA Windfall Lien: A Liability...

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Contaminated Sites By Larry Schnapf The Small Business Liability Relief and Brownfields Revitalization Act of 2002 1 (the “2002 Brownfield Amendments”) added a Bona Fide Prospective Purchaser (“BFPP”) 2 defense to the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) 3 . The BFPP defense allows purchaser to knowingly take title to contaminated property provided they satisfy certain criteria but comes with an important hitch. Namely, EPA may perfect a “windfall lien” on property owned by a BFPP in certain circumstances to recover cleanup costs. 4 This article will discuss the scope of this lien, the recent EPA guidance that discusses when the federal government will assert its windfall lien power, and ways to resolve uncertainty about windfall liens. The CERCLA BFPP Defense Prior to the 2002 Brownfield Amendments, the principal defense to CERCLA liability that was available to purchasers or occupiers of contaminated property was the Innocent Purchaser defense. To successfully invoke this defense, the purchaser or occupier had to establish that it had no reason to know that the property was contaminated. 5 Since the problem with brownfields is the existence or suspicion of contamination, the defense was largely unavailable to prospective developers or tenants of brownfield sites. To eliminate this obstacle to redevelopment of brownfields, the Brownfield Amendments created the BFPP defense for landowners or tenants who knowingly acquire or lease contaminated property after January 11, 2002. 6 Only those parties that qualify for the BFPP defense are potentially subject to the windfall lien. To qualify for the BFPP, the owner or tenant must establish by a preponderance of the evidence that it has satisfied the following eight conditions: 7 All disposal of hazardous substances occurred before the purchaser acquired the facility. 8 The purchaser conducted an “appropriate inquiry” 9 The purchaser complied with all release reporting requirements. 10 The purchaser took “ appropriate care ” by taking by taking reasonable steps to stop any continuing release, prevent any threatened future release; and prevent or limit human, environmental, or natural resource exposure to any previously released hazardous substance. 11 The purchaser cooperates, assists, and provides access to persons that are authorized to conduct response actions or natural resource restoration at the property. 12 The purchaser complies with any land use restrictions established as part of response action and does not impede the effectiveness or integrity of any institutional control used at the site. 13
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This note was uploaded on 10/28/2011 for the course BUSINESS ACCT 305 taught by Professor Poletti during the Spring '09 term at DeVry Columbus North.

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PRLWindfallLien - The CERCLA Windfall Lien: A Liability...

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