As of December 19, 2012, the United States Environmental Protection Agency (EPA) will now defer to the Kentucky Department for Environmental Protection (KDEP) to determine whether certain property which has been remediated under KDEP’s Voluntary Remediation Program (VERP) may receive protection from future claims brought by the United States under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (CERCLA). Kentucky is that second state in EPA’s Region 4, and the 25th nationally, to enter into a Memorandum of Agreement (MOA) recognizing this authority. Under Kentucky’s VERP, private parties that wish to remediate brownfields or other contaminated sites may undertake, subject to KDEP oversight, investigation and remediation to meet KDEP’s cleanup standards. At the conclusion of site remediation, private parties may obtain a covenant-not-to-sue from the Commonwealth of Kentucky. In most circumstances, EPA will now honor these covenants pursuant to CERCLA § 128(b). CERCLA § 128(b) limits EPA ability to issue administrative orders to certain “eligible sites.” The MOA between Kentucky and EPA specifies which sites will be considered “eligible sites.” (A copy of the MOA may be accessed here. Buyers or sellers of businesses and real property may wish to consider whether placement of real property in the VERP reduces environmental risk and improves the value of company assets. Companies should consult with experienced environmental legal counsel before entering real property in the Commonwealth of Kentucky’s VERP.