Yesterday afternoon, GOPC testified in front of the Senate Agriculture and Natural Resources Committee in support of House Bill 168 (HB168), the bona fide purchaser defense (BFPD) legislation. This was the second hearing for HB168, which allowed proponents of the legislation to testify before the committee. The Ohio Economic Development Association (OEDA) also submitted written proponent testimony to the committee. Sponsor testimony was provided by Rep. Steven Arndt in June to the Senate Agriculture and Natural Resources Committee, following HB168’s unanimous passage in the House.
HB168 incorporates into Ohio law the federal Bona Fide Purchaser Defense (BFPD) established under CERCLA, which 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. 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.
Brownfield redevelopment continues to be a top policy priority for GOPC. 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 regulatory gap in Ohio law that puts Ohio at a competitive disadvantage to neighboring states with regard to brownfield redevelopment.
The Senate Agriculture and Natural Resources Committee will hold additional hearing(s) for opponent and interested party testimony, prior to a committee vote for HB168. To date, no opponent testimony has been offered to this bill. Following passage in committee, HB168 will move to the Senate floor for a vote. As this process moves forward, GOPC will continue to provide updates.