In June 2020 Governor DeWine signed H.B. 168 which incorporated the federal liability defenses into Ohio statute. Such a change had been debated for several years including in a session led by BLDI at an Ohio Brownfields Conference a few years ago. Although H.B. 168 may not be long on text, it is long on impact to the environmental due diligence (EDD) programs for Ohio. As Joe Koncelik of Tucker Ellis (former director of the Ohio Environmental Protection Agency (OEPA) and primary drafter of H.B. 168) recently said, “People should keep in mind that Ohio Voluntary Action Program (VAP) is a cleanup program and the BFPD program is a redevelopment program.”
A key omission from the Ohio BFPD is the lack of a submittal, review, or approval process by OEPA. Select states have a review and approval process for the BFPD documentation. Such agency approval processes help fulfill environmental requirements under various federal lending programs (e.g. SBA, HUD).
Some key considerations related to EDD in Ohio:
- Ohio VAP is a lengthy, expensive, and complex process
- Time: 90 to 180 days, or even longer for complex sites, is common
- Cost: VAP Phase II often exceeds $100,00 not including any necessary remediation costs
- Complexity: the general complexity makes the program difficult to apply and often renders the timeline, cost, and outcome unpredictable
- Although the federal Bona Fide Prospective Purchaser defense (BFPP) (aka BFPD) has been available since 2002, Ohio liability protocols did not change with federal regulation…until now.
- Ohio BFPD is applicable back to promulgation of the federal standard in 2001 so long as the party undertook the required EDD steps (see below)
- BFPP requires that reasonable EDD steps be undertaken
- Standard program for BFPP:
- Conduct Phase I Environmental Site Assessment (ESA) (ASTM E1527-13), endpoint if no Recognized Environmental Conditions (RECs) identified
- Phase II ESA, if RECs identified
- Reasonable steps to address RECs may include:
- Assess continuing obligations (CO) and develop CO compliance plan
- Additional investigation may be prudent to further assess exposures
- Note: a purchaser may wish to develop a baseline of existing contamination
- Response activity, if necessary, is likely more limited than under Ohio VAP. Such response activities may include vapor mitigation systems, soil excavation, and exposure barriers
- Ensure implementation of CO plan, including on-going documentation of compliance (e.g. annual self-inspection reports)
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