Liability Protection and Technical Assistance

Kentucky Redevelopment and Reuse Program - Liability Relief (415 Program)

Brownfield redevelopment is often hindered by concerns over legal liability for pre-existing environmental conditions. In an effort to address these concerns, the Kentucky legislature passed the Brownfield Property Redevelopment and Reuse Law (KRS 224.1-415) in 2012. Among other provisions, the law established a liability relief program commonly referred to as the 415 program. The program provides qualifying property owners and qualifying prospective property owners with documentation that they will not be liable for investigating and remediating pre-existing contamination. In effect, this documentation reassures developers and lenders by removing some of the uncertainty related to the purchase and/or redevelopment of brownfield properties. Specifically, the documentation includes:

a legal definition for "brownfield property"
a written determination in the form of a "Notice of Eligibility" that the qualifying applicant will not be required to perform investigation and/or cleanup under the state Superfund statutes
a written concurrence in the form of a "Notice of Concurrence" that the Cabinet agrees with the qualifying applicant's property management plan concerning ongoing management activities and reuse of the site

Bona Fide Prospective Purchaser

In order to obtain liability protection, prospective purchasers of a brownfield property must meet certain criteria. House Bill 272, passed by the 2005 Kentucky General Assembly, outlines these requirements and identifies the prospective purchaser as a Bona Fide Prospective Purchaser (BFPP). A bona fide prospective purchaser (BFPP) is an entity that:

did not cause the contamination
has conducted an "all appropriate inquiry" assessment of environmental issues at the property
takes care to prevent the environmental problem from becoming worse
takes appropriate steps to prevent or eliminate exposure to previously released hazardous substances
is willing to provide access to the property for cleanup purposes
does not disrupt any institutional controls or violate land-use restrictions designed to manage the contamination
has no affiliation with the party responsible for the contamination

In addition to being a requirement for liability protections, any entity applying for a cleanup grant or loan through EPA or Kentucky's Cleaner Commonwealth Fund must be a BFPP. For more information on BFPP liability protection, see the EPA Liability Protections.

Property Management Plans

Entities that enter into Kentucky's liability relief program must develop a Property Management Plan (PMP) and comply with all continuing obligations in order to maintain liability protections. A PMP is a governing document for managing activities at a brownfield site. The purpose of the PMP is to ensure that such activities are protective of human health and the environment. PMPs are designed to be flexible by allowing for a property management approach to be developed by the entity. In terms of redevelopment projects, provisions for amending a management plan are also allowed as long as it is reflected in the plan in coordination with the Cabinet. By allowing changes in end-use or project scope, real-life projects can be more successful. Provisions for amending a plan also ensure that the planned use for the site remains protective while promoting economic growth for our communities.