The U.S. EPA’s All Appropriate Inquiries (AAI) rule, which went into effect on November 1, 2006, established the requirements of due diligence as it pertains to reduction of CERCLA liability for innocent landowners, contiguous property owners, and bona fide prospective purchasers. Under CERCLA, the liability for environmental clean up may be assigned to past and present owners of a property – the joint and several liability of potentially responsible parties – without investigating or assigning blame. The AAI rule was enacted to provide a legal defense against CERCLA liability and to encourage brownfield redevelopment. It specifies what requirements must be met in order to receive liability protection when purchasing contaminated property.
The AAI rule does not mandate that individual states must accept the AAI arguments and release innocent landowners or bona fide prospective purchasers from the state-run CERCLA programs. Ohio is one of the states that did not enact legislation to allow for the state to provide liability protection under CERCLA’s AAI rule. That may be about to change.
In October 2018, Ohio House Representative Steven Arndt (Ohio House District 89 – Erie and Ottawa Counties) introduced House Bill 737, which revises Section 3746.122 of the Ohio Revised Code to establish protection from liability by the State of Ohio for a release or threatened release of hazardous substances for bona fide prospective purchasers.
The full title of House Bill 737 is “To amend section 3746.04 and to enact section 3746.122 of the Revised Code to establish immunity from liability for a release or threatened release of hazardous substances from a facility for certain bona fide prospective purchasers.”
Passage of House Bill 737 will allow the Director of the Ohio EPA to issue a “letter of concurrence” to bona fide prospective purchasers who follow the requirements of the law. The bona fide prospective purchaser must submit a Phase I environmental site assessment (ASTM compliant), documentation that demonstrates compliance with the ASTM standard for complying with continuing obligations, and other documentation that may be requested by the Director. The letter of concurrence would state that the bona fide prospective purchaser has received protection from liability from the State of Ohio.
We understand that the Ohio EPA was not involved with preparation of the HB 737. Consequently, if the bill moves forward, there will likely be significant comment and revision. There is some disagreement as to whether this will invigorate or repress the Ohio EPA’s Voluntary Action Program (VAP). Whether or not the bill advances as is, this could be a step towards a long-discussed “VAP Lite” option for prospective purchasers who did not cause or contribute to a historical release.
Published in Cox-Colvin’s November 2018 Focus on the Environment newsletter.
Steve Williamson is a Senior Scientist with Cox-Colvin & Associates, Inc. He holds a BS degree in Environmental Health and an MS degree in Hydrogeology from Wright State University. Mr. Williamson has over 30 years' experience working on brownfields, solid and hazardous waste, and groundwater contamination projects in Ohio and the Midwest.