National Defense Authorization Act for Fiscal Year 1993

2. National Defense Authorization Actfor Fiscal Year 1993 Sec. 330. Indemnification of Transferees of Closing Defense Property “(a) In general.—(1) Except as provided in paragraph (3) and subject to subsection (b), the Secretary of Defense shall hold harmless, defend, and indemnify in full the persons and entities described in paragraph (2) from and against any suit, claim, demand or action, liability, judgment, cost or other fee arising out of any claim for personal injury or property damage (including death, illness, or loss of or damage to property or economic loss) that results from, or is in any manner predicated upon, the release or threatened release of any hazardous substance, pollutant or contaminant, or petroleum or petroleum derivative as a result of Department of Defense activities at any military installation (or portion thereof) that is closed pursuant to a base closure law.

3. CODE OF FEDERAL REGULATIONSTITLE 32. NATIONAL DEFENSESUBTITLE A – DEPARTMENT OF DEFENSE PART 174 – REVITALIZING BASE CLOSURE COMMUNITIES ANDADDRESSING IMPACTS OF REALIGNMENT § 174.15 Indemnification under Section 330 of the National Defense Authorization Act for Fiscal Year 1993. Section 330 of the National Defense Authorization Act for Fiscal Year 1993, Pub.L. 102-484, as amended, provides for indemnification of transferees of closing Department of Defense properties under circumstances specified in that statute. The authority to implement this provision of law has been delegated by the Secretary of Defense to the General Counsel of the Department of Defense; therefore, this provision of law shall only be referred to or recited in any deed, sales agreement, bill of sale, lease, license, easement, right-of-way, or transfer document for real or personal property after obtaining the written concurrence of the Deputy General Counsel (Environment and Installations), Office of the General Counsel, Department of Defense.

4. UNITED STATES CODETITLE 42. THE PUBLIC HEALTH AND WELFARECHAPTER 103 – COMPREHENSIVE ENVIRONMENTAL RESPONSE,COMPENSATION, AND LIABILITYSUBCHAPTER I – HAZARDOUS SUBSTANCES RELEASES, LIABILITY, COMPENSATION42 U.S.C. § 9620 § 9620. Federal facilities, (h)(3) Contents of certain deeds (A) In general … in the case of any real property owned by the United States on which any hazardous substance was stored for one year or more, known to have been released, or disposed of, each deed entered into for the transfer of such property by the United States to any other person or entity shall contain-- (i) to the extent such information is available on the basis of a complete search of agency files-- (I) a notice of the type and quantity of such hazardous substances, (II) notice of the time at which such storage, release, or disposal took place, and (III) a description of the remedial action taken, if any; (ii) a covenant warranting that-- (I) all remedial action necessary to protect human health and the environment with respect to any such substance remaining on the property has been taken before the date of such transfer, and (II) any additional remedial action found to be necessary after the date of such transfer shall be conducted by the United States; and

5. Proposed Pesticide Deed Languagefrom Military Service at BRAC Property Pesticides The Transferee is hereby notified that the property may contain pesticide residue from pesticides that have been applied in the management of the property. The ________ knows of no use of any registered pesticide in a manner inconsistent with its labeling and believes that all applications were made in accordance with FIFRA (7 U.S.C. Section 136, et seq.), its implementing regulations, and according to the labeling provided with such substances. It is the _________’s position that it shall have no obligation under the covenants provided pursuant to Section 120(h)(3)(A)(ii) of CERCLA, 42 U.S.C. Section 9620(h)(3)(A)(ii), for the remediation of legally applied pesticides.

6. EPA Response to Service’sPesticide Language As stated in the Final FOST, EPA understands that the federal deed will also include, among other items, a covenant by the United States, made pursuant to the provisions of CERCLA § 120(h)(3)(A)(ii)(II) and as set forth in DoD Instruction 4165.72, warranting that any remedial action found to be necessary after the date of this deed shall be conducted by the United States. Although EPA concurs with the ________ determination that IR Sites ________ are suitable for transfer, the ________ is reminded that it is EPA’s position that hazardous substances, including residual pesticide contamination, if discovered following transfer at levels requiring a response action, are not excluded from the _________’s post-transfer obligations.

7. PROPOSED LANGUAGE FOR AN EARLY TRANSFER The [service] is retaining responsibility for the following remedial/environmental activities concerning the Property: Remediation associated with [service] operations on the site

8. Department of DefenseMANUALNUMBER 4715.20 Enclosure 3 6. OTHER ENVIRONMENTAL RESTORATION MANAGEMENT CONSIDERATIONS c. Vapor Intrusion (1) The DoD Component shall evaluate whether contamination in the soil or groundwater poses a potential for unacceptable risk from vapor intrusion into overlying or nearby existing structures when all of these conditions are met: (a) The source of contamination is located on one of these property types:                    ...                    2.BRAC property or a DoD release has migrated off-site from a BRAC property.                    …        (4) When there are no existing structures overlying or near a potential vapor intrusion pathway, the DoD Component should document the potential vapor intrusion risk. (a) The DoD Component shall provide notice of potential vapor intrusion risks to non-DoD property owners in writing and, as appropriate, include such notice in DDs and transfer documents. (b) The transferee should address the potential for vapor intrusion in future structures at its own expense by adding appropriate mitigating measures during construction or by demonstrating that there is no unacceptable risk under applicable law. DDs and transfer documents shall reflect such obligations, as appropriate. [emphasis added] (c) For DoD property, the DoD Component should address the potential for vapor intrusion in future structures in the design phase of the building construction and any necessary and appropriate mitigation measures shall be included as part of the construction cost.

9. Email from government attorney in response to deed language: Barry, After giving this some focused consideration, I have to say that the PCB paragraph does, indeed – at least in part – reflect an intention to “modify” the CERCLA warranty and the 330 indemnity with respect to pre-existing PCBs…

10. Language in a Finding of Suitabilityto Transfer (FOST) “ACM that is not in compliance with applicable laws, regulations, and standards, or that poses a threat to human health at the time of transfer of the property, shall be remedied by the transferee. The remediation discussed above will not be required when the building is scheduled for demolition by the transferee; the transfer document prohibits occupation of the buildings before demolition; and the transferee assumes responsibility for management of any ACM in accordance with applicable laws.”

11. Section 330, FY 1993National Defense Authorization Act Indian Harbor Insurance Company v. United States United States Court of Appeals for the Federal Circuit The Statute (a) In general--(1) Except as provided in paragraph (3) and subject to subsection (b), the Secretary of Defense shall hold harmless, defend, and indemnify in full the persons and entities described in paragraph (2) from and against any suit, claim, demand or action, liability, judgment, cost or other fee arising out of any claim for per- sonal injury or property damage (including death, illness, or loss of or damage to property or economic loss) that results from, or is in any manner predicated upon, the release or threatened release of any hazardous substance, pollutant or contaminant, or petroleum or petroleum derivative as a result of Department of Defense activities at any military installation (or portion thereof) that is closed pursuant to a base closure law. Court of Federal Claims Decision "Section 330 only contemplates indemnification where “the owner or developer of a former military property is subject to some action brought against him” by a third-party." Federal Circuit Appellate Decision We agree that …”a state agency’s exercise of its regulatory authority… suffices to meet the requirement of a claim under Section 330.” "By its plain language, Section 330 protects a purchaser of the land against “cost[s] or other fee[s]” arising out of property damage (including economic loss) that results from the release or threatened release of any hazardous substance. Nothing in Section 330, however, requires that the claimant itself suffer personal injury or own the damaged property."