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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 government involvement include:
- Involuntarily 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;
- Responding to an emergency on contaminated property; or
- Implementing, monitoring, or enforcing institutional controls.
EPA’s fact sheet CERCLA Liability and Local Government Acquisitions and Other Activities identifies Superfund liability issues and protections that may be applicable to state and local governments.
- Involuntary Acquisitions Exemption
- Superfund Liability Protections
- Emergency Response Exemption
- Institutional Controls
- Local Government Compliance Assistance Center
Generally, Superfund provides liability protection to state and local governments who acquire property by virtue of their function as a sovereign. Involuntary acquisition is mentioned in two parts of the Superfund statute – 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 by virtue of their function as a sovereign. For either section to apply, the state or local government must not have caused or contributed to the contamination.
"Involuntary acquisition" includes obtaining property through bankruptcy, tax delinquency, abandonment, or other circumstances in which the government entity involuntary acquires title by virtue of its function as a sovereign. EPA has addressed involuntary acquisition in several guidance documents that are listed below:
- Policy on Interpreting CERCLA Provisions Addressing Lenders and Involuntary Acquisitions by Government Entities (6/30/97)
- Fact Sheet: The Effect of Superfund on Involuntary Acquisitions of Contaminated Property by Government Entities (12/31/95)
- Municipal Immunity from CERCLA Liability for Property Acquired through Involuntary State Action (10/20/95)
Superfund contains several liability protections for private parties, states, and local governments that 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.
- The enforcement bar when the local government complies with a state response program.
Bona fide prospective purchaser status is available for the majority of property acquisitions. In cases where it is unclear whether the involuntary acquisition exclusion or other protections may apply, EPA encourages the local government to obtain and maintain BFPP status. By obtaining BFPP status, the local government would increase its certainty that it will not be liable under Superfund.
Local governments are often first responders to emergencies and dangers. Superfund contains a provision that protects local governments that respond to an emergency created by a release or by a threat of release. 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 key role in implementing, monitoring, and enforcing certain institutional controls – particularly those it has the legal authority to implement or enforce. A local government also may work proactively with developers, prospective buyers, and 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 institutional controls are already in place on a particular property, it is important for local governments to understand the obligations the institutional controls 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 institutional control to change a particular land use or facilitate reuse. EPA or the state may be willing to modify existing institutional controls as long as the cleanup remedy will not be compromised and remains protective of human health and the environment.
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.
Learn More: State voluntary cleanup programs