Gaps and Challenges That Led to Groundbreaking Liability Reform in 2011

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1 Gaps and Challenges That Led to Groundbreaking Liability Reform in 2011 Barry J. Trilling Wiggin and Dana LLP CBIA and NAIOP Program New & Innovative Brownfield Opportunities in Connecticut Wednesday, Jan. 25, 2012

2 Cutting the Brownfields Gordian Knot in Connecticut

3 The Knot of Programs Purporting to deal with Brownfields: Would You Invest? Urban sites remedial action program, CGS 22a-133m Two Voluntary Remediation Programs, CGS 22a-133x and 22a- 133y Two Covenant Not To Sue Programs, CGS 22a-133aa and 22a-133bb Third Party Liability Act, CGS 22a-133ee Connecticut Property Transfer Act, CGS 22a-134 through 134e Redeveloping Mills in Floodplains, CGS 25-68d Protection from Liability when Acquiring Municipally Remediated Property, CGS 32-9dd Municipal Brownfield Program, Innocent Third Party Status, CGS 32-9ee Abandoned Brownfields Cleanup ( ABC ) program, CGS 32-9ll 2006 Brownfields Act, 2006 Conn. Acts 184 (Reg. Sess).

4 This compendium of legislation comprised the antitheses of clarity, predictability, simplicity, certainty, and efficiency. In sum, before enactment of Section 17, Connecticut law governing the remediation and redevelopment of Brownfield properties fell within the purview of at least a dozen different statutes, none of which provided clear protection from long-term liabilities associated with contamination that preexisted purchase of the property and which extended the obligations of a bona fide prospective purchaser to remediation of contamination that extended beyond the boundaries of the subject property. This scheme resulted in discouraging private sector investment in the remediation and redevelopment of those properties.

5 Pre-Section 17 Problems Both the site owner and the innocent purchaser liable for cleanup of contamination that has migrated offsite including preparation of off site eco-risk assessments No protection from liability until completion of remediation and only uncertain protection until time has expired for DEEP to audit the cleanup Inadequate or no protection from third party actions after completion of cleanup Confusing array of programs the applicability of which could depend upon the nature of the groundwater at the site, its characterization as a Transfer Act property, whether it had been abandoned, or the nature of its ownership Lack of meaningful deadlines for DEEP approval of cleanup A competitive disadvantage in Connecticut as compared with other states

6 Section 17 Solutions Stay tuned for the presentation from Beth Barton and Dave Hurley

7 Stakeholders Current site owners Innocent purchasers Municipalities Legislative Working Group DEEP DECD Organized Environmental Community

8 Points of Agreement Contaminated properties that lie boarded up, idle, or under-utilized ( Brownfields ) burden the state. Public resources to clean up these sites are increasingly scarce and if not cleaned up and redeveloped, these sites threaten public health and the environment. Remediation and redevelopment of these sites would result in job creation and enlarged tax bases.

9 Challenging Issues Dealing with off site contamination without imposing an unacceptable and unfair burden on a bona fide purchaser Preventing truly responsible parties from escaping responsibility for cleanup while encouraging current owners to make their sites available for redevelopment Providing for the implementation of the program to the greatest number of sites, while protecting DECD and DEEP from an avalanche of applications that would overburden their resources (i.e., avoiding a beauty pageant ) Requiring agencies to provide timely response, while giving them adequate time to maintain the integrity of the program Self implementation of the program reducing bureaucratic impediments to implementation while assuring program integrity Should there be fees and how much?

10 A Fortunate Alignment of Stars

11 Working Toward Common Goal Representative Berger Brownfields Working Group Governor Malloy Commissioner Esty Commissioner Smith CBIA NAIOP Members of this panel

12 Now Let s Roll Up Our Sleeves and Get to Work Implementing Section 17!

13 This presentation is a summary of legal principles. Nothing in this presentation constitutes legal advice, which can only be obtained as a result of a personal consultation with an attorney. The information published here is believed accurate at the time of publication, but is subject to change and does not purport to be a complete statement of all relevant issues.