It's not often a new law is cheered by so many parties
normally in conflict. But the Small Business Liability Relief and
Brownfields Revitalization Act, signed into law in January, is
something small-business groups, environmentalists, developers and
advocates for the inner city can all agree on. Focusing on
commercial and industrial land contaminated by toxins, the new law
overhauls some troubling aspects of CERCLA (The Comprehensive
Environmental Response, Compensation and Liability Act), the 1980
law that created the Superfund.
Under CERCLA, the EPA identifies sites, cleans them up, and
seeks reimbursement from those responsible for the mess. The
problem is old commercial and industrial sites may have changed
hands many times, and the EPA was allowed to exact the entire cost
of cleanup from any of the parties involved: whoever created the
problem, the property owner at the time of contamination, the
lender who financed the purchase of the property, or, easiest to
find, the current owner, who may have had nothing to do with it.
Then the parties fight it out in the courts. The nightmare of
lawsuits and counter-lawsuits typically drags on for years.
That's why so many cities are blighted with a ring of
abandoned industrial sites-some 600,000 nationwide. It's been
less risky to build on a cornfield than to redevelop a brownfield
that may immerse the company in litigation.
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New Hope
So what's in the new law? Title I, Small Business Liability
Protection, protects business owners whose everyday waste ends up
at a Superfund site. Suppose your shop generates small quantities
of ordinary waste, and the firm that hauls it away takes it to a
landfill on the National Priorities List for cleanup. Title I
presumes you would be exempt from litigation unless there's
strong evidence the waste contributed significantly to the
problem.
Title II, Brownfields Revitalization and Environmental
Restoration, allows new purchasers of brownfields to avoid federal
liability if they follow state voluntary cleanup rules when
they're decontaminating the property. State standards are
typically less rigorous and more flexible than the federal
standards, notes David B. Hird, a lawyer with Weil, Gotshall &
Manger in Washington, DC, who drafted parts of the law on behalf of
the Real Estate Roundtable. Even if the EPA decides to clean up the
site further, the developers and new owners are off the hook.
The brownfields law also protects owners of contiguous
properties that may have been cross-contaminated, and provides $200
million in federal funds for states to develop or expand
reclamation programs.
"What I think will happen is that people will be more
willing to buy these properties," Hird says. "It means
more land will be back in public use." And that's good for
everyone.
Steven C. Bahls, dean of Capital University Law School in
Columbus, Ohio, teaches entrepreneurship law. Freelance writer Jane
Easter Bahls specializes in business and legal topics.