EPA Brownfields Grants, CERCLA Liability,
and All Appropriate Inquiries
To be eligible for an EPA brownfields grant to address contamination at brownfields properties, eligible entities
must demonstrate that they are not liable under CERCLA for the contamination at the site. Accordingly, eligible entities
who may be considered "potentially responsible parties" under CERCLA must demonstrate they meet one of the liability
protections or defenses set forth in CERCLA by establishing that they are (I) an innocent landowner, (2) a contiguous
property owner, (3) a bona fide prospective purchaser, or (4) a government entity that acquired the property involuntarily
through bankruptcy, tax delinquency, or abandonment, or by exercising its power of eminent domain.
To claim protection from liability as an innocent landowner, contiguous property owner, or bona fide prospective purchaser,
property owners, including state and local governments, must conduct all appropriate inquiries prior to acquiring the property.
What is CERCLA?
The Comprehensive Environmental Response, Compensation
and Liability Act (CERCLA), also known as"Superfund,"
was established to address abandoned hazardous waste sites.
Among other things, CERCLA establishes a liability scheme
for determining who can be held accountable for releases of
hazardous substances. CERCLA also establishes the authority
for ERA's Brownfields Program and sets forth which entities
and properties are eligible for brownfields grants.
Can state and local governments be found
liable for contamination at brownfields?
Yes. Under CERCLA, persons (including state and local gov-
ernments) can be liable by virtue of property ownership,
or by virtue of their actions with respect to a particular site.
For sites from which there is a release or threatened release
of hazardous substances, the categories of "potentially respon-
sible parties" include any person or party who:
• Currently owns or operates the property, or owned or
operated the property at the time of disposal of hazardous
substances;
• Arranged for hazardous substances to be disposed of or
transported to the site for disposal; or
• Transported hazardous substances to the site.
Applicants should note that CERCLA employs a "strict
liability" scheme—that means it is without regard to fault.
Accordingly, a person who owns a property from which
there is a release of hazardous substances can be held liable
just by virtue of ownership.
If I am applying for a brownfields grant,
do I have to worry about CERCLA liability?
Yes. Brownfields grantees are prohibited from using grant
money to pay response costs at a brownfield site for which
the grantee is potentially liable under CERCLA.
Therefore, all brownfields grantees who may be potentially
liable at the site for which they are seeking funds must dem-
onstrate that they are not liable for the contamination that
will be addressed by the grant, subgrant, or loan. Applicants
who own or operate the property for which they are seeking
funding, or who may have owned or operated the property
at the time of disposal of hazardous substances, must demon-
strate they fall within one of the liability protections.
Cleanup grant applicants in particular should take note of this
prohibition. Because cleanup grantees are required to own a
site to receive brownfields funding—and because owners of
contaminated property are liable under CERCLA—cleanup
grant applicants must demonstrate they meet one of the liabil-
ity protections described above. Some grant applicants who
do not own the property for which they are seeking funding,
or who are not seeking site-specific grant funds, may not
fall within one of the categories of "potentially responsible
parties," and thus may not have to demonstrate they meet
a liability protection.
Please contact your Regional Brownfields representative if
you are not sure whether you will need to demonstrate a
liability protection to be eligible for a grant.
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Who may be protected
from liability under CERCLA?
The CERCLA statute provides protection from liability for
certain parties, provided they comply with specific criteria
outlined in the statute. Parties provided protection from
CERCLA liability include:
• Innocent landowners (CERCLA § 101 (35)(A))
• Contiguous property owners (CERCLA § 107(q))
• Bona fide prospective purchasers (CERCLA §§101 (40)
and I07(r))
• Units of state or local government that acquire ownership
or control involuntarily through bankruptcy, tax delinquency,
or abandonment (CERCLA § 101 (20)(D))
Government entities that acquire property by eminent
domain (CERCLA §101 (35)(A)(ii))
• Not be affiliated with any liable party through any familial
relationship or any contractual, corporate or financial rela-
tionship (other than a relationship created by the instrument
by which title to the property is conveyed or financed).
NOTE: Property acquisition includes properties acquired by
gifts and zero price transactions.
How can a state or local government
demonstrate that it is
not liable for contamination at a brownfield?
All state and local governments that may be potentially liable
at a site for which they are applying for funding (including
site-specific assessment grants, cleanup grants, or subgrants
or loans from revolving loan funds), must demonstrate that
they qualify for one of the CERCLA liability protections. All
non-profit entities applying for brownfields cleanup grants
also must make this demonstration.
Eastern Manufacturer Brewer, Maine, prior to
cleanup (above) and after (right)
What are the conditions for attaining
liability protection under CERCLA?
To be eligible for liability protection under CERCLA as an
innocent landowner, contiguous property owner or bona fide
prospective purchaser, prospective property owners must:
• Conduct All Appropriate Inquiries in compliance with 40
CFR Part 312, prior to acquiring the property;
• Comply with all Continuing Obligations after acquiring
the property. (CERCLA §§101 (40)(C - G) and §§ 107(q)(A)
(iii - viii)); and
To demonstrate that it qualifies as an innocent landowner,
contiguous landowner, or bona fide prospective purchaser,
the applicant must:
• Conduct All Appropriate Inquires prior to acquiring the
property, and
• Comply with all Continuing Obligations after acquiring the
property.
State and local governments that acquired a property involun-
tarily through bankruptcy, tax delinquency, or abandonment,
or by exercising their power of eminent domain, do not have
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to conduct all appropriate inquiries prior to acquiring the
property, but must exercise "due care" after acquiring the
property (CERCLA § 101 (35)(A) and §§ 107(b)(3)(a - b)).
[Note: One threshold criteria for applicants seeking cleanup
grant funding is that a Phase I must be conducted prior to
application submission. Accordingly, although state and local gov-
ernments that acquired property involuntarily are not required
to conduct all appropriate inquiries for purposes of establishing
a liability protection, they may have to conduct all appropriate
inquiries anyway to be eligible for a cleanup grant.]
What is "All Appropriate Inquiries"?
"All Appropriate Inquiries," orAAl is the process of conducting
due diligence or a Phase I Environmental Site Assessment to
determine prior uses and ownership of a property and assess
conditions at the property that may be indicative of releases
or threatened releases of hazardous substances at, on, in, or to
the property.
The standards and practices established as comprising "All
Appropriate Inquiries" are set forth in regulations promul-
gated at 40 CFR Part 312.
EPA recognizes two ASTM International Standards as compliant
with theAAl requirements: ASTM El527-05"Standard Practice
for Environmental Site Assessments: Phase I Environmental
Site Assessment Process" and E2247-08 "Standard Practice
for Environmental Site Assessments: Phase I Environmental Site
Assessment Process for Forestland or Rural Property."
When must All Appropriate Inquiries
be conducted?
• All Appropriate Inquiries must be conducted or updated
within one year prior to acquiring ownership of a property.
• Certain aspects or provisions of All Appropriate Inquiries
(i.e., interviews of current and past owners, the review
of government records, the on-site visual inspection, and
searches for environmental cleanup liens) must be con-
ducted or updated within 180 days prior to acquiring
ownership of a property.
Who can perform All Appropriate Inquiries?
The individual who supervises or oversees the conduct of the
AAI investigation and signs the final report required in the
AAI regulation must meet the definition of an "Environmental
Professional" provided in theAAl Final Rule (40 CFR §312.10).
A person that does not qualify as an "Environmental Profes-
sional" as defined in 40 CFR §312.10, may assist in the conduct
of the investigation if he or she is under the responsible charge
of a person meeting the definition.
What are "Continuing Obligations?"
After acquiring a property, to maintain the liability protections,
landowners must comply with "continuing obligations" during
their property ownership.The continuing obligations include:
I. Provide all legally required notices with respect to the
discovery or release of a hazardous substance;
2. Exercise appropriate care with respect to the hazardous
substances by taking reasonable steps to stop or prevent
continuing or threatened future releases and exposures,
and prevent or limit human and environmental exposure to
previous releases;
3. Provide full cooperation, assistance, and access to per-
sons authorized to conduct response actions or natural
resource restoration;
4. Comply with land use restrictions and not impede the
effectiveness of institutional controls; and
5. Comply with information requests and subpoenas.
Where can I get additional information?
For general information, see the ERA Brownfields website ot: www.epa.gov/brownfields
For more information on theAAl requirements, see: http://www.epa.gov/brownfields/regneg.htm
For more information on continuing obligations, see:
http://www.epa.gov/compliance/resources/policies/cleanup/superfund/common-elem-guide.pdf
Contact Patricia Overmeyer at Overmeyer.patricia@epa.gov
Brownfields Fact Sheet
EPA Brownfields Grants,
CERCLA Liability,
and All Appropriate Inquiries
Solid Waste
and Emergency
Response (5105)
EPA 560-F-09-026
April 2009
www.epa.gov/brownfields
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