By Aaron Clapper, GOPC Project Manager
Last month, State Representative Steven Arndt (R – Port Clinton) introduced HB168, which is brownfield regulatory reform legislation that Greater Ohio Policy Center helped to champion. HB168 would encourage brownfield redevelopment by incorporating the federal Bona Fide Purchaser Defense (BFPD) into Ohio law. HB168 would extend protection from liability under Ohio law for pre-existing “hazardous substances” contamination on property to buyers who take all the necessary steps to qualify for BFPD.
HB168 incorporates into Ohio law the federal Bona Fide Purchaser Defense (BFPD) established under CERCLA (CERCLA is the federal program created to regulate and handle Superfund sites). In 2002, Congress created the BFPD as an amendment to CERCLA to encourage brownfield redevelopment. HB168 provides prospective buyers of contaminated property with an option to establish a defense to environmental liability after completing the All Appropriate Inquires and proper due diligence, as outlined in CERCLA’s BFPD. While the BFPD exists to protect a buyer from liability under CERLCA, a federal law, it does not extend protection from liability under state laws. Currently, even if a buyer performs “All Appropriate Inquiries” on a property in Ohio, the buyer will receive no legal liability protection under Ohio law. By strengthening protections under the BFPD, buyers will have a greater incentive to reutilize brownfields in Ohio.
The BFPD does not require a full-blown assessment and clean-up of a prospective property, offering a much more cost-effective means to putting brownfields into productive use. By strengthening protections under the BFPD, buyers will have a greater incentive to reutilize brownfields in Ohio. In replicating the BFPD into Ohio law, Ohio would be in line with many other states, such as Indiana and Michigan, which have incorporated the BFPD or BFPD-like legal protection into state law. Michigan’s Baseline Environmental Assessment (BEA) program, similar to the BFPD, averaged 1,032 issuances per year between 1995 and 2015, while Ohio’s current VAP Covenant-not-to-Sue (CNS) averaged 26 per year during that same time period.
For more, read the following Legislative Service Commission analysis here.
Brownfield redevelopment continues to be a top policy priority for Greater Ohio Policy Center. Since the sunset of the CORF program, brownfields redevelopment is down in Ohio. While incentives are still needed to offset the increased cost of redeveloping brownfields, HB168 addresses an important gap in Ohio law that puts Ohio at a competitive disadvantage to neighboring states with regard to brownfield redevelopment.
HB168 has been referred to the House Civil Justice Committee, where its first hearing was held on April 9. GOPC will provide updates as this bill continues through the hearing process.