Contaminated Property Redevelopment Act

In May 2016, the State of Kansas passed the Contaminated Property Redevelopment Act, which allows an environmentally contaminated property to be purchased without making the purchaser liable for the contamination and cleanup costs. This is the first law of its kind in the country, and it could increase economic development and open new avenues in the environmental world.

Contaminated Property Redevelopment Act

Under the Contaminated Property Redevelopment Act, the Kansas Department of Health and Environment (KDHE) has the authority to issue a Certificate of Environmental Liability Release (CELR) to prospective purchasers. This releases the CELR Holder from environmental liability associated with existing contamination on the property to be purchased. The eligibility criteria for CELRs include the following:

Eligibility Criteria for CELRs

• The property is contaminated, but not by radon, lead-based paint, or asbestos.
• The property was acquired after July 1, 2016.
• The property is not subject to regulation under the Nuclear Energy Development and Radiation Control Act.
• The applicant/purchaser must not be responsible for the contamination.
• The applicant/purchaser must not have caused or exacerbated the contamination.
• The purchaser does not currently own the property or the applicant currently owns the property and fulfills the following requirements. First, (1) the property must be acquired through seizure, condemnation closure, or default or (2) the applicant is the State of Kansas, a department or branch of state government, or a similar party. Second, the applicant must not have known or reasonably foreseen the threat of contamination or the applicant did know about the contamination and took reasonable steps to prevent the problem from exacerbating.
• A direct or indirect familial, contractual, corporate, or financial relationship does not exist between the applicant/purchaser and the owner of the property (or the party responsible for the contamination).
• The applicant/purchaser has not provided compensation or release of liability to any other party regarding the property’s contamination.
• The applicant/purchaser is not subject to any contract, agreement, or order with the intended purpose of performing an investigation or remediation of the property’s contamination.
• The contaminated property must not be eligible for cleanup under the Kansas Storage Tank Act or the Kansas Drycleaner Environmental Response Act. If it is, it must be enrolled in the appropriate cleanup program under the applicable act.
• The contaminated property must not be listed (or proposed for listing) on the national priorities list of superfund sites established under the Comprehensive Environmental Response Compensation and Liability Act.

Application Process

The purchaser must submit an application with supporting documentation and an application fee to the KDHE. The documentation must include a current Phase I or Phase II ESA report and an environmental report (or similar documents) that presents analytical data affirming the presence of contamination. Then, the KDHE will make a determination of eligibility for the CELR over a 15-day review process following receipt of the application. If the KDHE discovers that information provided by the applicant is inaccurate, the applicant will be subject to CELR revocation, liability for the property’s cleanup, and a penalty of up to $500 per day.

Property Classifications and Fees

The application fee is determined based on property classifications, which have been established by the KDHE based on the size and complexity of the property. Smaller and simpler properties have a lower fee, while high fees are reserved for large and elaborate properties. The fees range from $700 (for a Class I CELR Property) to $2,000 (for a Class III CELR Property).

Contamination Confirmation

The presence of contamination must be confirmed by Phase I/Phase II ESAs or other environmental assessment reports completed to industry standards and provided to the KDHE. To determine a property’s eligibility for the CELR, several factors will be used, including the KDHE Risk-Based Standards (RSKs).

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Environmental Works has experience assisting multiple clients with the Contaminated Property Redevelopment Act, helping them understand and apply for the CELR process in the State of Kansas. If you are interested in applying or would like to learn more, please call 417-890-9500 or contact us online.