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Division of Waste Management Issues Proposed Brownfields Liability Protection Regulations

09.25.2013

House Bill 465 (HB 465), which was passed by the General Assembly during the 2012 Regular Session, established the Kentucky Brownfield Redevelopment Program.  HB 465, now codified as KRS 224.1-415, limits the liability of property owners to perform site characterization and corrective action at properties where a release or potential release of petroleum, governed by KRS 224.1-405, or a release of a hazardous substance, governed by KRS 224.1-400, has or may have occurred.  KRS 224.1-415 provides limitations of liability for both prospective and retrospective property acquisitions so long as the program’s requirements are met.

The Division of Waste Management (DWM) filed proposed regulations implementing the Brownfield Redevelopment Program with the Legislative Research Commission on September 13, 2013.  The proposed regulations, 401 KAR 102:005, 401 KAR 102:010, and 401 KAR 102:020, establish the requirements for purchasers of contaminated or potentially contaminated property to receive liability protection from DWM under the Brownfield Redevelopment Program.  Generally, the release or potential release must have occurred prior to the owner’s acquisition of the property, the owner must have made all appropriate inquiries into previous ownership and uses of the property, provide all legally required notices, comply with all land use restrictions applicable to the property, and comply with information requests from DWM.  In order to be eligible to participate in the program, the property owner can have no affiliation with any person who is liable or potentially liable for the release.

401 KAR 102:010 outlines the process and procedures for obtaining DWM’s determination that a property and owner are eligible to participate in the program.  An application must be made to DWM, which includes the following: (1) completed Brownfield Liability Relief Eligibility Form, DEP 6056; (2) a copy of the most recent recorded deed for the property; (3) a property management plan; (4) application fee of $2,500; and (5) all appropriate inquiry documentation.  Within 30 days of submission of a completed application, DWM will issue either: (1) a Notice of Eligibility; (2) a Notice of Concurrence; or (3) a final determination that the application fails to meet the requirements of KRS 224.1-415.  A Notice of Concurrence will be issued to current owners of the property who meet the requirements of KRS 224.1-415 and will provide that the applicant “shall not be liable for performing characterization, correcting the effects of the release of petroleum, a hazardous substance, or pollutant or contaminant on the environment, or performing corrective action pursuant to KRS 224.1-400 or 224.1-405.”  A Notice of Eligibility provides the same liability protection; however, these letters will be issued to future property owners who do not yet hold legal title to the subject property.  401 KAR 102:020 outlines the requirements for property management plans.

Although the implementing regulations were recently proposed, DWM has already been making use of the Brownfield Redevelopment Program.  Current or prospective owners of contaminated or potentially contaminated properties should consider the liability protections afforded by the program.

Public comments on the draft regulations will be accepted through October 31, 2013.  A public hearing, if requested, will be held on October 23rd at 10:00 a.m. at 300 Fair Oaks Drive in Frankfort.


To view a complete PDF of the July/August 2013 issue of the Environmental Letter, click HERE.

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