State and Local Government Activities and Liability Protections
State and local governments are increasingly becoming involved in the acquisition, cleanup, reuse, and long-term protectiveness of contaminated properties. However, such entities often have concerns about potential liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, commonly referred to as Superfund), even when they did not cause or contribute to the contamination. Common scenarios for state and local government involvement include:
- Acquiring property as a function of their governmental powers;
- Leasing of the property by the state or a municipality;
- Negotiating a purchase in a transaction similar to one negotiated between private parties;
- Utilizing a "land bank" or redevelopment agency to acquire, hold, lease or control vacant, abandoned, and tax deliquent properties;
- Responding to an emergency on contaminated property; or
- Implementing, monitoring, or enforcing institutional controls.
On this page:
- State and Local Government Acquisitions Exemption
- EPA Enforcement Discretion Guidance
- Other Superfund Liability Protections
- Emergency Response Exemption
- Institutional Controls
State and Local Government Acquisitions Exemption
Generally, Superfund provides liability protection to state and local governments that acquire property through a specific method. These acquisitions are mentioned in two parts of CERCLA – as an exemption in Section 101(20)(D) and as a liability defense in Section 101(35)(A)(ii). Both sections describe when a unit of state or local government is entitled to Superfund liability protection for property they own or acquire. For either section to apply, the state or local government must not have caused or contributed to the contamination.
Exempt acquisitions under CERCLA § 101(20)(D) include obtaining property through seizure or otherwise in connection with law enforcement activity, bankruptcy, tax delinquency, abandonment, or other circumstances in which the government entity acquires title by virtue of its function as a sovereign. The 2018 Better Utilization of Investments Leading to Development (BUILD) Act amendments to CERCLA § 101(20)(D) to add a new category of exempt property acquisitions and removed the requirement that state and local governments must acquire title to property "involuntarily."
The EPA addresses state and local government acquisitions in several guidance documents that are available from the liability-government subject category with in the Superfund Enforcement Policy and Guidance Documents database. The Agency is currently evaluating the impact of the provisions contained within the BUILD Act on existing guidance and will make changes to these guidance as appropriate.
EPA Enforcement Discretion Guidance
The EPA’s guidance titled “Superfund Liability Protections for Local Government Acquisitions after the Brownfields Utilization, Investment, and Local Development Act of 2018 " (June 15, 2020) provides an overview of CERCLA’s liability framework and protections and the EPA’s enforcement discretion policies that may apply to state and local governments. The guidance clarifies the EPA’s enforcement intentions on key acquisition issues not addressed by the BUILD Act including transfers, purchases, and eminent domain.
Other Superfund Liability Protections
Superfund contains other liability protections for private parties, states, and local governments that own or acquire property. These Superfund liability protections are:
- The third party defense and innocent landowner protection.
- The bona fide prospective purchaser (BFPP) protection.
- The contiguous property owner (CPO) protection.
CERCLA § 107(b)(3) offers a defense from liability if a person can show, by a preponderance of the evidence, that the release or threat of release of a hazardous substance was caused solely by the act or omission of a third party. Bona fide prospective purchaser status is available for the majority of property acquisitions. CERCLA’s third-party defense includes an “innocent landowner defense” as an exclusion to the definition of a “contractual relationship” in Section 101(35). The “innocent landowner defense” applies to entities that meet the criteria set forth in CERCLA §§ 101(35) and 107(b)(3). CERCLA § 101(35)(A) sets forth a definition of an innocent landowner that includes “a government which acquired the facility by escheat, or through any other involuntary transfer or acquisition, or through the exercise of eminent domain authority, by purchaser or condemnation,” provided other requirements, including the exercise of due care, are satisfied.
The BFPP provision, CERCLA § 107(r), is a self-implementing provision of CERCLA that allows a party to purchase property with knowledge of contamination and protects a party from Superfund owner/operator liability if the party acquires property after January 11, 2002 and meets the threshold criteria and continuing obligations in CERCLA §§ 101(40) and 107(r). In cases where it is unclear whether the Section 101(20)(D) local government acquisition exemption or other protections may apply; the EPA encourages the local government to obtain and maintain BFPP status.
The CPO provision, CERCLA § 107(q), excludes from the definition of “owner or operator” a person who owns property that is “contiguous,” or otherwise similarly situated, to a facility that is the only source of contamination found on the person’s property. To qualify as a CPO, a landowner must meet the criteria set forth in CERCLA § 107(q)(1)(A).
More information about liability protections available for parties that own or acquire property Is located at the EPA’s Landowner Liability Protections webpage.
Emergency Response Exemption
State and local governments are often first responders to emergencies and dangers. CERCLA § 107(d)(2) state and local governments that respond to an emergency created by the release or threatened release of a hazardous substance. The local government will not be responsible for costs or damages as long as the local government:
- does not own the property; and
- does not act grossly negligent or engage in intentional misconduct.
A local government may play a direct role in implementing, monitoring, ensuring compliance with, and enforcing certain institutional controls (ICs).). For example, a local government may ensure IC effectiveness through its direct access to relevant public records, regulation of zoning, and the issuance of building permits, or use of its legal authority to implement and enforce ICs. A local government works proactively with developers, prospective buyers, tenants, and other parties to ensure that institutional control requirements are understood and properly integrated into the planning and future reuse of the property.
If ICs are already in place on a particular property, it is important for local governments to understand the obligations they impose and to consider how those obligations might be viewed by future owners, developers and property users. In some situations, a local government may want to modify an IC to change a particular land use or facilitate reuse. The EPA or the state may be willing to modify existing ICs as long as the cleanup remedy will not be compromised and remains protective of human health and the environment.
More information about institutional controls is available on the EPA’s Superfund Institutional Controls: Guidance and Policy webpage.Local Government Compliance Assistance Center
EPA, working with industry, academic institutions, environmental groups, and other agencies, sponsors compliance assistance centers that address the requirements of specific sectors.
The Local Government Environmental Assistance Network (LGEAN) Exit is a "first-stop shop" providing environmental management, planning, funding, and regulatory information for local government elected and appointed officials, managers and staff. LGEAN enables local officials to interact with their peers and others online.-->