STATEMENT OF TIMOTHY FIELDS, JR.
TIMOTHY FIELDS, JR.
OFFICE OF SOLID WASTE AND
U.S. ENVIRONMENTAL PROTECTION AGENCY
SUBCOMMITTEE ON FINANCE AND
COMMITTEE ON COMMERCE
U.S. HOUSE OF REPRESENTATIVES
August 4, 1999
Good morning, Mr. Chairman, and Members of the Committee. I am pleased to have this opportunity to appear before you today to: 1) share with you the substantial accomplishments EPA has achieved since the inception of the Brownfields Economic Redevelopment Initiative in 1995; and 2) address the legislative proposals now before this Committee and the U.S. House of Representatives: H.R. 1300, H.R. 2580 and H.R. 1750.
BROWNFIELDS ECONOMIC REDEVELOPMENT INITIATIVE
Through the Initiative, EPA continues to promote redevelopment of abandoned and contaminated properties across the country that were once used for industrial and commercial purposes ("brownfields"). While the full extent of the brownfields problem is unknown, the United States General Accounting Office (GAO\RCED-95-172, June 1995) estimates that approximately 450,000 brownfield sites exist in the United States. Virtually every community in the country, no matter what the size, is grappling with the challenge of problems associated with recycling older, mostly industrial properties. The presence of these properties fuels urban sprawl, luring investment and job development farther from city centers and inner suburbs.
The Administration believes that environmental protection and economic progress are inextricably linked. The Brownfields Initiative seeks to bring all parties to the table -- and to provide a framework for them to seek common ground on a whole range of challenges: environmental, economic, legal and financial. As the former Director of the Portland Oregon Brownfields Initiative said, "brownfields renewal is one of the most important environmental and economic challenges facing our nation's communities, calling for partnership among our federal and local governments, businesses and community and environmental leaders. We must work together to build a national brownfields partnership from the ground up." The Agency's multifaceted initiative represents a significant step forward by the Administration and, according to Renew America, represents "a new paradigm in locally-based environmental protection that forges public-private partnerships, promotes innovation, and relies on market incentives and private sector actions."
The initial Brownfields Action Agenda announced on January 25, 1995, focused on the award of Brownfields Assessment Demonstration Pilots; building partnerships to all brownfields stakeholders; clarifying liability and cleanup issues; and, fostering local workforce development and job training initiatives. By mid-1996, EPA completed all of its commitments on the initial Action Agenda and continues to move forward. Let me briefly describe what we have done in the last four years.
Brownfields Assessment Demonstration Pilots
The Brownfields Assessment Pilots have formed a major component of the Brownfields Initiative since its beginning. To date, EPA has selected 307 pilots in states, communities and tribes, funded at up to $200,000 each. These two-year pilots are intended to generate further interest in Brownfields redevelopment across the country. Many different communities are participating, ranging from small towns to large cities. In charting their own course toward revitalization, we are seeing many positive results. The assessment pilot effort combined with our targeted state and EPA site assessment efforts has resulted in the assessment of 845 brownfields properties. Our assessment pilots have reported the related cleanup of 91 properties, and determined that more than 574 properties do not need additional cleanup. This has led to known redevelopment of 51 properties. The assessment pilots have provided information that they have leveraged more than $1.4 billion in redevelopment funds and have been the catalyst for support for more than 3,000 jobs as a result of the EPA program.
Chosen through a competitive process, these pilots are helping communities articulate a reuse strategy that demonstrates model opportunities to organize public and private sector support, and leverage financing, while actively demonstrating the economic and environmental benefits of reclaiming brownfield contaminated sites. The Brownfield pilots enable recipients to take a unified approach to site assessment, environmental cleanup, and redevelopment, an approach that stimulates economic activity and the creation of jobs.
Stakeholders tell the Agency that many Brownfields redevelopment activities could not have occurred in the absence of EPA efforts. For example:
- On an abandoned, four-acre railroad site, the city of Emeryville, CA. and a development corporation are planning to construct 200 units of residential housing. Approximately 100 construction workers have already been hired to build these housing units. Within the next five years, construction of retail, hotel and office complexes is expected to create as many as 10,600 jobs and nearly 4 million square feet of new facilities, and provide an additional $6.4 million in annual property tax revenues.
- In Shreveport, LA., as a result of $1.3 million in cleanup and redevelopment funding, the former HICA steel foundry and upgrade company has been upgraded and renovated into the new HICA Steel Castings, LLC, with owners committed to running an environmentally safe operation in the Cedar Grove neighborhood of the city.
- In Birmingham, Alabama, efforts are underway to transform a run-down industrial area into a 150-acre industrial park, with 75 acres reserved for heavy industry, a 50-acre distribution center, a business park, and a full-scale retail center. Work on the distribution center is already underway, and by the project's completion, more than 2 million square feet of industrial and commercial facilities could be in place. Planners believe that ultimately the area will see the creation of more than 2,000 jobs.
Brownfields Cleanup Revolving Loan Fund Pilots
EPA is building on its experience with the assessment pilots through a "second stage" brownfields pilot award. These pilots, called Brownfields Cleanup Revolving Loan Fund (BCRLF) pilots, enable communities and coalitions of communities to fund the safe cleanup and sustainable reuse of brownfields through revolving loan funds that EPA helps to capitalize. Again, EPA's goal through these pilots is to develop revolving loan fund models in communities across the nation that can be used to promote coordinated public and private partnerships for the cleanup and reuse brownfields.
In fiscal year 1997, EPA's used $10 million of its brownfields budget for the award of BCRLF pilots at up to $350,000 each. Twenty-three pilots are now in various stages of development. These early pilots have been the Agency's pioneers of the program, and many are expected to make their first loans soon.
As a result of our early experience with the BCRLF pilots, the Agency has determined that recipient of the most recent pilots would benefit from an increased capitalization of $500,000 each. Representing more than 60 communities as single pilot communities or as coalitions of states and communities, forty-five (45) new BCRLF pilots were announced just this past May. In ten of the new pilots, states like Massachusetts, Illinois, Arizona and California will assist cities in carrying out a variety of activities under the BCRLF. We were extremely pleased to see in their applications an increased level of understanding of program parameters and needs and a sophistication in infrastructure planning. We are confident that the program has caught hold and can move forward to make loans for brownfields cleanups.
Job Training and Development Pilots
EPA initiated a third brownfields demonstration pilot program in 1998 to help local citizens take advantage of new jobs created by assessment and cleanup of brownfields. The Job Training and Development Demonstration Pilot program provides two-year grants of up to $200,000 to applicants located within or near one of the existing assessment pilot communities. Colleges, universities, non-profit training centers, and community job training organizations, as well as states, Tribes and communities, were eligible to apply. Today, 21 job training pilots are in place. The first 11 were awarded last year, and the most recent 10 pilot awards were announced in May.
The goal of these unique pilots is to facilitate cleanup of brownfields sites and prepare trainees for future employment in the environmental field. The pilot projects must prepare trainees in activities that can be usefully applied to cleanup employing an alternative or innovative technology. Among the projects proposed in the first round of pilots, the Jobs for Youth-Boston Brownfields Job Training and Development Pilot, awarded in September, 1998, has already graduated fifteen (15) trainees from a 17-week training program designed to prepare graduates to work as environmental field and lab technicians, hazardous materials handlers and emergency response technicians. Half of the trainees (8) have obtained jobs, and the remainder are currently interviewing for employment. In Clearwater, Florida, Career Options, Inc., awarded a Brownfields Job Training and Development Pilot in September, 1998, graduated 11 trainees from its first class on May 20, 1999.
Brownfields Partnerships Build Future Solutions
The Brownfields Initiative is clearly about partnerships -- with other Federal, State, and local agencies, and a diverse array of stakeholders. The EPA has undertaken partnership efforts with individual States as well as through broad organizational structures like the National Association of Development Organizations (NADO), the National Governors Association (NGA), the National Association of Local Government Environmental Professionals (NALGEP), the Conference on Urban Economic Development (CUED) and the U.S. Chamber of Commerce. EPA also forged working relationships with a vast spectrum of other stakeholders, including the Environmental Bankers Association, the Irvine Foundation's Center for Land Recycling, the International City/County Management Association (ICMA), to mention but a few.
EPA continues to work closely with States and Indian Tribes as key partners in the cleanup and redevelopment of contaminated properties. The Administration supports the continued growth of the State and Tribal regulated and voluntary programs which have greatly expanded the number of sites cleaned up to protect human health and the environment. To date, 44 States have established voluntary cleanup programs. Recognizing the important role that State environmental agencies have in encouraging economic redevelopment of brownfields, EPA has provided $28.6 million in funding to States and Tribes to support the development of these programs since FY 1997. EPA has proposed to continue to provide $10 million, in FY00, to encourage the development or enhancement of State programs that encourage private parties to voluntarily undertake early protective cleanups of less seriously contaminated sites, thus accelerating their cleanup and redevelopment. EPA is also pleased with the progress it has made in signing MOAs with States. Twelve States have now signed MOAs with EPA regarding sites to be cleaned up under voluntary cleanup programs. The most recent state to sign an MOA with EPA is Oklahoma in Region 6. Two additional MOAs are now close to signature.
Brownfields National Partnership
Early in the development of EPA's Brownfields Initiative, the Agency realized that it needed to find ways to further identify, strengthen, and improve commitments to brownfields, while continuing efforts toward a comprehensive, community-based approach to clean up and redevelop contaminated property. We recognized the important contribution of many of our Federal partners to brownfields through their participation in the Brownfields National Partnership. Through the partnership Federal departments and agencies can offer special technical, financial, and other assistance that can be of great benefit to brownfields communities. More than 20 national partners are committing resources and assistance to brownfields. The Federal Home Loan Bank System, for example, is exploring ways to bring more private investment to redeveloping brownfields properties and, along with the U.S. Conference of Mayors, has selected 50 cities to participate in a project to research opportunities, impediments, and successes by both cities and lenders to address brownfields.
Many of the commitments by our federal partners were expressed through initial Memoranda of Understanding (MOUs). EPA has signed MOUs with the Economic Development Administration of the Department of Commerce, the Departments of Labor, Housing and Urban Development, and Interior. EPA also is working with the Agency for Toxic Substances and Disease Registry and county health officials to address the health concerns of brownfields communities. Our partnership with HUD has been particularly beneficial for brownfields. The HUD Brownfields Economic Development Initiative (BEDI) grants program is providing $25 million this year in assistance to cities to redevelop contaminated industrial and commercial sites.
The Brownfields Showcase Communities project is an outgrowth of those early partnership efforts and now forms an important component of the Brownfields Initiative. It represents a multi-faceted partnership among federal agencies to demonstrate the benefits of coordinated and collaborative activity on brownfields in 16 Brownfields Showcase Communities. For example, through the Showcase Community in Glen Cove, New York, a revitalization plan to convert brownfields and Superfund sites into tourist destinations has been completed. State, Federal, and local agencies have played a crucial role in securing $18 million in grants from various agencies. In addition, a prospective purchaser agreement was signed between EPA and the Glen Cove Industrial Development Corporation for the Li Tungsten and Captain's Cove Superfund sites. Proceeds from selling the property will go toward repaying response costs.
The report, Building A Brownfields Partnership from the Ground Up, by the National Association of Local Government Environmental Professionals, (February 13, 1997), presented the views of a network of local government brownfields leaders on the value of EPA's brownfields programs and policies. The report calls local government leaders "a key link in the success of brownfields partnerships, for it is the environmental, health, development and political leaders in our cities, counties and towns who can best build a brownfields partnership 'from the ground up'". EPA has developed its brownfield capacity for outreach through each of its ten regions. Each region has a designated "Brownfields Coordinator" to assist and oversee the brownfields pilots and other actions under the Brownfields Initiative. We believe our Brownfields Coordinators are the most effective link to communities and form the linchpin of success under the Brownfields Initiative.
Brownfields Redevelopment and Environmental Justice
These partnerships and those that we will develop in the future represent new ways of doing business with communities. We are working hard to continue to improve communication and coordination among all stakeholders. In this regard, we are encouraged by the increasing linkage being made between brownfields redevelopment and environmental justice. EPA is working with the National Environmental Justice Advisory Council (NEJAC) to promote meaningful community involvement and environmental justice. This past June, EPA provided support for a program held in South Carolina by the Medical University of South Carolina. The conference, "Environmental Justice: Strengthening the Bridge between Economic Development and Sustainable Communities," sought to bring together stakeholders to explore solutions to the dual achievement of environmental justice and economic development. The conference also gathered findings for a report to be shared with the Congressional Black Caucus.
Most recently, as a follow up to the February 1998 issuance by EPA of its "Interim Guidance for Investigating Title VI Administrative Complaints Challenging Permits" for public comment, the Agency conducted studies to determine whether the guidance would prove to be a barrier to the redevelopment of brownfields if implemented. EPA undertook case studies at six of its Brownfields Assessment Demonstration Pilots. These case studies were recently released, Brownfields Title VI Case Studies: Summary Report, June 1999, EPA 500-R-99-003, DRAFT. Title VI complaints, according to the report, have been avoided at brownfields projects because a wide variety of governmental, community and business stakeholders are involved in brownfields cleanup and redevelopment decision-making. These case studies speak to the early and meaningful involvement of communities in the brownfields process, redevelopment plans and activities for the revitalization of blighted property.
Redevelopment Barriers - Addressing Liability Concerns
The Agency also committed to addressing the fear of liability and other barriers impeding the cleanup and redevelopment of brownfields. Over the past several years, EPA has announced a variety of guidance and initiatives that have had a positive impact among Brownfields stakeholders in terms of removing uncertainties often associated with brownfields properties. EPA is promoting redevelopment of brownfields properties by protecting prospective purchasers, lenders, and property owners from incurring Superfund liability.
EPA's Prospective Purchaser Agreement (PPA) guidance issued in May 1995 has been used to stimulate the development of sites where parties otherwise may have been reluctant to redevelop due to liability concerns. Through agreements known as "prospective purchaser agreements," EPA clarifies that bona fide prospective purchasers will not be responsible for cleaning up sites, provided they do not further contribute to or worsen contamination. The 1995 guidance expanded the universe of sites eligible for such agreements to include sites where EPA has undertaken, is undertaking, or plans to undertake a response action. Approximately 110 PPAs have been negotiated to date. Environmental justice advocates see these agreements as a tool to promote environmentally sustainable enterprises or green spaces occupying former brownfields sites next to residential areas.
In 1998, EPA undertook a survey effort to gather information on the impacts of the PPA process. Preliminary survey data indicate that redevelopment projects cover over 1252 acres, or 80% of the property secured through PPAs. EPA regional personnel estimate that nearly 1600 short-term jobs (e.g., construction) and over 1700 permanent jobs have resulted from redevelopment projects associated with PPAs. An estimated $2.6 million in local tax revenue for communities nationwide have resulted from these projects. In addition, EPA regional staff estimate that PPAs have resulted in the purchase of over 1500 acres of contaminated property and have spurred redevelopment of hundreds of thousands of adjacent acres. Using the survey results, EPA continues to develop ways to improve the PPA process. The Agency is pleased to see the inclusion of prospective purchaser relief as a common element of most brownfields legislation being considered by the Congress.
Property Owner Protections
Other guidance issued by the Agency to benefit brownfields assessment, cleanup and redevelopment have included the "Policy Toward Owners of Property Containing Contaminated Aquifers." Prior to the issuance of this guidance in July 1995, people owning property under which hazardous substances had migrated through groundwater also feared liability under the statute. EPA responded by announcing that it will not take enforcement actions under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) against owners of property situated above contaminated ground water, provided the landowner did not cause or contribute to the contamination. Further, EPA also will consider providing protection to such property owners from third party lawsuits through a settlement that affords contribution protection.
The Agency also is pleased to see the inclusion of innocent and contiguous landowner defenses as common elements of most brownfields legislative proposals. We believe these liability relief provisions -- innocent landowner, contiguous landowner and prospective purchaser -- will provide a great deal of certainty to homeowners, buyers, and developers involved in the purchase and sale, and cleanup and redevelopment of brownfields properties.
With respect to the lending industry and to governmental entities who acquire property involuntarily, EPA was pleased to see the 104th Congress enact the "Asset Conservation, Lender Liability, and Deposit Insurance Protection Act of 1996, which included provisions to clarify the liability of lenders and fiduciaries under CERCLA and other toxic waste laws. This reform, which was developed through a bipartisan effort, was incorporated into a broader banking reform bill enacted in the final days of the Congress as part of the continuing budget resolution. This change in the law is providing significant relief to banks and lending institutions, expanding the availability of credit for small businesses, and greatly facilitating the assessment, cleanup, and redevelopment of brownfields sites. EPA's lender liability policy clarifies the steps a lender or governmental entity may take after acquiring contaminated property through, for example, foreclosure or involuntary acquisition.
EPA also is providing "comfort/status letters" in appropriate circumstances to requestors, including new owners, lenders, or developers to inform them of EPA's intentions at a site. The Policy on the Issuance of Comfort/Status Letters is designed to assist parties who seek to cleanup and reuse brownfields. EPA often receives requests from parties for some level of "comfort" that, if they purchase, develop, or operate on brownfield property, EPA will not pursue them for the costs to clean up any contamination resulting from the previous use. The policy contains four sample comfort/status letters that address the most common inquiries for information EPA receives regarding contaminated or potentially contaminated properties. The policy aims at using such "comfort" toward facilitating the cleanup and redevelopment of brownfields.
Supplemental Environmental Projects
In addition, EPA encourages the use of Supplemental Environmental Projects (SEPs) to facilitate the reuse of brownfields through assessment and cleanup projects at brownfield properties. SEPS are environmentally beneficial projects that a defendant agrees to undertake in settlement of a civil penalty action, but that the defendant is not otherwise legally responsible to perform. SEPs enhance the environmental quality of communities that have been put at risk due to the violation of an environmental law.
Removing Sites From CERCLIS
Finally, EPA believes that the removal of sites from the active Federal inventory, the Comprehensive Environmental Response, Compensation and Liability Information System (CERCLIS), is having positive repercussions for the Brownfields Initiative. To date, EPA has removed approximately 31,681 sites from CERCLIS. The removal of these sites eliminates the stigma of potential contamination and fear of liability associated with these sites, and allows stakeholders to focus on the future land use and redevelopment of such sites.
Brownfields Tax Incentive
EPA is pleased with the passage of the Brownfields Tax Incentive in the last Congress. Passage of the 1997 Brownfields Tax Incentive has enabled the federal government to level the economic playing field between brownfields and greenfield sites. Under the tax incentive, environmental cleanup costs for properties in designated areas are fully deductible in the year in which they are incurred, rather than capitalized. This incentive can reduce the capital cost for these types of investments by more than one half. We regard this tax provision as an essential element of a complete and comprehensive brownfields program and hope it can be made a continuing and broad tool for brownfields redevelopment in the future. Under current law, the incentive will expire on December 31, 2000. The FY 2000 Budget proposes to make it permanent.
The tax incentive is applicable to properties that meet specified land use, contamination, and geographic requirements. To satisfy the land use requirement, the property must be held by the taxpayer incurring the eligible expenses for use in a trade or business or for the production of income, or the property must be properly included in the taxpayer's inventory. To satisfy the contamination requirement, hazardous substances must be present or potentially present on the property. To meet the geographic requirement, the property must be located in one of the following areas: EPA Brownfields pilot areas designated prior to February 1, 1997; census tracts where 20 percent or more of the population is below the poverty level; census tracts that have a population under 2,000, have 75 percent or more land zoned for industrial or commercial use, and are adjacent to one or more census tracts with a poverty rate of 20 percent or more; and Empowerment Zones and Enterprise Communities. Both rural and urban sites qualify for the proposed incentive. Sites on EPA's National Priorities List are excluded. In West Chester, Pennsylvania, the tax incentive was used to help a demolition and environmental service company relocate its headquarters at a brownfield. This site was in a part of the town suffering a 29.6% poverty rate, well above the 20% poverty rate threshold set in the guidelines. The company estimates that 100-200 jobs could be created.
Better America Bonds
Innovative approaches and solutions to the problems faced by communities are manifested in every aspect of brownfields. Innovative financing efforts are no exception. Just as the federal government has helped the brownfields program through the tax incentive, so, too, will the Clinton Administration's latest effort through the proposed Better America Bonds program. To build healthy, livable communities for the 21st century, the federal government would provide new resources to communities to achieve their "smart growth" objectives. This proposal for FY 2000 seeks to create $9.5 billion in bonding authority to state, local, and tribal governments over 5 years. Communities will have access to zero-interest financing for smart growth projects because investors who buy these fifteen year bonds will receive tax credits in lieu of interest. The tax credits would total approximately $700 million over five years. Communities would pay back the principal at the end of the 15-year term of the bond.
To help communities preserve green space for future generations, protect public health, and provide for greater economic development, Better America Bonds can be used for three purposes:
- Preserve and Enhance Open Space: State, Tribal and local governments can create, restore, or enhance parks, preserve green spaces, and protect threatened farmland and wetlands. Land can be protected either by acquiring title or purchasing permanent easements.
- Protect Water Quality: Rivers, lakes, coastal waters, and wetlands -- and drinking water sources -- can be restored or protected through reducing polluted runoff, the largest remaining threat to the nations' waterways. Eligible projects to curb runoff include purchase of sensitive lands, wetlands restoration, and the creation of planted or forested buffer strips along waterways.
- Clean Up Brownfields: Pressure to develop green space can be eased through cleaning up and reusing brownfields. Communities can acquire and clean up brownfields for use as open space, or for economic redevelopment in cases where abandoned brownfields are acquired by the local government through tax foreclosure.
- EPA believes Better America Bonds will further the Brownfields Economic Redevelopment Initiative by providing much needed flexible funding that communities can use for brownfields activities and add an important funding source for site assessments and cleanups.
KEY ELEMENTS OF BROWNFIELDS LEGISLATIVE REFORM
The Brownfields Economic Redevelopment Initiative has achieved much initial success. The continuing value of the Brownfields Initiative is its evolution and promise for the future. To build upon these successful first steps and launch others, we must not lose sight of our overall goal to revitalize communities. With the breadth and variety of activities and stakeholders converging on the brownfields issue, we have tried to establish a framework that articulates a complete and comprehensive brownfields program. It is against this framework that we will measure legislative proposals addressing brownfields.
Address Full Range of Brownfields Reforms
Brownfield reforms made under CERCLA should be codified, and should reaffirm use of the Superfund Trust Fund to address the full range of brownfield issues including: technical assistance funding for brownfields identification, assessment and reuse planning, cooperative agreement funding to capitalize revolving loan funds for brownfields cleanup, support for State development of voluntary cleanup programs, liability protection for bona fide prospective purchasers, innocent landowners of contaminated property and contiguous property owners, support for mechanisms for partnering with Federal, State, local and tribal governments and other non-governmental entities to address Brownfields, and support and long-term planning for fostering training and workforce development.
Support Brownfields FY 2000 Budget Request
The Administration has requested funding for the brownfields program in FY 2000 of $92 million to support additional assessment, cleanup and job training pilot awards, to fund support for targeted brownfields assessments, and to continue support for State Voluntary Cleanup infrastructure and brownfields related job training efforts. The United States Conference of Mayors has recently reiterated it's earlier statement that "the lack of cleanup funds" for brownfields is "the most frequently identified impediment." Recycling America's Land, Volume II, April 1999. EPA urges the Committee to support this component of the President's Budget as we work together on other statutory changes that not only will enhance our ability to implement these proposals, but also will enable us to forge stronger partnerships with States, local governments, communities, and private interests that successfully accelerate brownfields revitalization.
The Clinton Administration strongly supports the passage of brownfields legislation and views it as an important step toward restoring hope, opportunities, and jobs to local communities and neighborhoods that are being held back by the presence of abandoned industrial sites. Through three rounds of administrative reforms, the Superfund program has made significant progress in cleaning up hazardous waste sites, protecting public health and the environment, as well as in the assessment and cleanup of brownfields sites.
In the past, the Administration supported brownfields legislation within the framework for comprehensive legislative reforms to the Superfund program. In light of the progress being made, the ever increasing need to meet and assist communities in their revitalization, as well as the apparent bi-partisan, and broad-based public support for brownfields reform, the Administration now supports a targeted legislative approach which addresses brownfields cleanup and redevelopment, and specific liability provisions necessary to support brownfields. In addition, EPA strongly supports the legislation that would reinstate the expired Superfund taxes. These funds are needed for the ongoing Superfund cleanup effort and the brownfields program.
EPA is encouraged by the focus that Congress has given to the problems engendered by brownfields and we look forward to working with Congress to enact this very necessary legislation.
EPA is encouraged to see in H.R. 2580, the "Land Recycling Act of 1999", a focus on the clean up and return of contaminated sites to productive uses. However, provisions in H.R. 2580 severely restrict EPA's ability to ensure protective cleanups at sites throughout the country. The Administration opposes the bill in its current form.
Enforcement Authority is Severely Restricted.
H.R. 2580 represents the strongest limitations on the Federal "safety net" to date. While other bills, such as H.R. 1300, have reduced EPA's (and other persons) ability to take CERCLA enforcement actions, H.R. 2580 extends these prohibitions to citizens' and EPA's imminent and substantial endangerment enforcement authority under §§ 7002 and 7003 of the Solid Waste Disposal Act. While HR 2580 leaves intact administrative judicial orders or decrees issued or entered into under CERCLA, SWDA, FWPCA, TSCA, and SDWA before the commencement of a response action under a state program, H.R. 2580 is ambiguous about the continued viability of those authorities after the commencement of a response action under a state program.
Given the patchwork of authorities throughout the 50 states, if federal authorities are eliminated, it is unclear what authorities would be available to protect public health and the environment. For example, neither Arizona nor Idaho have RCRA § 7003-like authorities to address situations that pose an imminent and substantial endangerment. Accordingly, the Administration strongly opposes the enforcement bars present in HR 2580.
Further, the bill prescribes only minimal standards that a state cleanup program must meet in order to trigger the broad prohibitions upon EPA's and citizens' ability to take enforcement actions. In addition, these minimal standards require no demonstration, but instead can be met simply through self-certification. This represents a significant departure from other environmental laws, which envision a role for EPA review, and public comment on, a determination that a state program is adequate, and that a transfer of federal enforcement authority is appropriate.
While the inclusion of criteria is an improvement over H.R. 1300, which contains no criteria state programs must meet, we believe the criteria in HR 2580 are inadequate. Notably, while implementation of the program must be in a manner that is protective of human health and the environment, there is no requirement that response actions be protective of human health and the environment, as required by H.R. 1750. Further, under H.R. 2580, a state must only certify the adequacy of its financial and personnel resources at the point in time when it submits its certification to EPA. There is no assurance that a state ensure adequate resources in the future, as opposed to H.R. 1750, which requires states to maintain consistency with the program criteria. This requirement is critical, as state cleanup requirements can vary widely, and resources can fluctuate over time. In fact, we are aware of several states whose resources for hazardous waste cleanup programs have been significantly diminished in recent years.
Also of great concern, H.R. 2580's criteria lack any requirement for public involvement in program development or the selection of response actions. The permitting process under environmental statutes triggers public participation requirements. Thus, if an operating facility wants to change their discharge limits under a Clean Water Act NPDES permit or modify their RCRA permit, the public would have an opportunity to participate in that decision. Given that the bill also cuts off citizens' rights under RCRA and CERCLA, H.R. 2580 leaves the citizens most likely to be affected by contamination in their community with no voice, and no assurances of a federal "floor" of protection. Accordingly, the Administration objects to the criteria set forth in HR 2580 as inadequate to ensure protection of human health and the environment.
The exclusion of the public is exacerbated in H.R. 2580 by its elimination of the requirement for any federal permit -- including RCRA corrective action permits -- or permit revision for the on-site portion of response actions. Although superficially similar to existing language in CERCLA section 121(e)(1), CERCLA's current on-site permit exemption does not negate the role of the public, as the CERCLA remedy selection process, which requires significant public involvement, acts as an equivalent to the role of the public in the permitting process. However, state programs may not provide for public participation. Out of 17 state voluntary cleanup programs it surveyed, GAO found that 8 had no requirements for public participation. GAO/RCED-97-66, Apr. 6, 1997 "Superfund: State Voluntary Programs Provide Incentives to Encourage Cleanups." If the state programs have no public participation requirements, then HR 2580's language rendering federal permits inapplicable represent a further blow to citizen's rights. Taken as a whole, the bill would allow states to operate their cleanup programs without adequate public scrutiny, contrary to the approach taken in all other major federal environmental laws.
In addition to the limitations on public involvement, we are concerned with other negative effects which will result from the permit waiver. The bill would entirely extinguish the applicability of permits in states not authorized to administer federal programs, such as the Clean Water Act NPDES or § 404 permits for dredging and filling wetlands, or RCRA. For example, not all states are authorized for all components of RCRA, meaning that federal permits issued in states without their own permitting abilitity will be useless. States and territories not authorized for either the base RCRA program or corrective action include Iowa, Hawaii, Alaska, Puerto Rico, Virgin Islands,American Samoa, and the Northern Mariana Islands. States not authorized for corrective action include Connecticut, Massachusetts, Rhode Island, New Jersey, Maryland, Pennsylvania, Delaware, Virginia, West Virginia, District of Columbia, Florida, Mississippi, Tennessee, Kansas, Nebraska, and Montana. In addition, in many cases, a facility in an authorized state may still require a Federal permit for those aspects of the RCRA program for which the state has not yet been authorized. Thus, Under H.R. 2580, most RCRA permits, as well as any permit modifications, would be invalid.
In addition, H.R. 2580 removes the requirement for federal permits and permit revisions, even when the federal government is responsible for overseeing the permit. H.R. 2580 limits EPA's ability to respond to emergencies that affect the environment and sets a high and unclear standard for EPA emergency response. For example, EPA issued a Section 7003 order at two adjacent facilities (that did not have federal or state permits) to address lead and chrome contamination from Lead Products, a battery reprocessing facility and Dixie Electroplating, a plating facility. The metals from the facility contaminated residential yards. The lead contamination becoming airborne was of particular concern because the citizens' yards did not have grass and the streets were not paved. The state's (Texas) voluntary cleanup program stopped at the facilities' boundaries and would not require off-site cleanup. EPA's federal RCRA authority provided for the coordination of off-site response with the State(of Texas)'s on-site facilities.
Inadequate Reopeners Limit Federal Safety Net and Will Cause Litigation.
The Administration is opposed to the provisions in H.R. 2580 regarding state response/voluntary cleanup programs. The bill would eliminate the authority of EPA and other federal agencies to respond to releases of hazardous substances whenever a state remedial action plan has been prepared, whether under a voluntary response program, or any other state program. It is critical that EPA retain its ability and capacity to respond to threats that may present an imminent and substantial danger to the public health or welfare or the environment.
This federal response ability or federal safety net, has several important aspects. The federal safety net enables EPA, through its emergency response capacity, to quickly mobilize and perform a removal because the state does not have the resources to conduct and/or complete removals. The federal safety net also establishes federal requirements for public participation. These federal requirements offer communities a recourse should a community perceive that the state is excluding the community from meaningful involvement This bill could eliminate community involvement if none is provided at the state level. The federal safety net provides for federal permits, which are important protections to human health, welfare, or the environment. These are important aspects of the federal program that we think should be retained.
Under HR 2580, where a state law or state-lead cleanup falls short, or a local community seeks a federal response, EPA will be unable to address public health or environmental concerns, except under the strictest of circumstances. Unlike other legislative proposals, HR 2580 extinguishes "any authority" of CERCLA. Thus, HR 2580 eliminates EPA's ability to fund-finance a response action when necessary. This is a further departure from H.R. 1300, which would not extinguish EPA's authority under § 104 of CERCLA.
Further, as noted above, HR 2580 extinguishes EPA's (and citizens') imminent and substantial endangerment authority under both CERCLA and RCRA, a standard that has withstood more than 20 years of judicial interpretation in cases occurring under both CERCLA and RCRA. In addition, this standard is common to most other major environmental laws, including the Clean Air Act (§ 303), the Clean Water Act (§ 504), and the Safe Drinking Water Act § 1431. It has been an important attribute in the "federal safety net" that has ensured protection of human health and the environment for all citizens.
As a result in the departure from the current standard of "imminent and substantial endangerment," we have serious concerns with the enforcement bar in both H.R. 2580 and H.R. 1300. While it is important to ensure that federal liability does not inhibit brownfields cleanup and redevelopment, such an inhibition should not come at the expense of protecting human health and the environment. Our concerns are exacerbated by the breadth of sites that may be subject to the enforcement bar. H.R. 2580 excludes from the enforcement bar only sites that are listed on the NPL (as well as federal facilities, and facilities subject to orders or decrees under other environmental statutes). HR 1300, by comparison, at least also excludes sites proposed for listing on the NPL. When combined with the provision in H.R. 2580 that allows an absolute governor veto on further NPL listings, the bill could include even high-risk sites into the universe of those subject to the enforcement bars. H.R. 2580 is also unclear as to what type of "response action" is sufficient to trigger the enforcement bar. For example, a site at which a surface removal had been done would appear to be sufficient to trigger the enforcement bar, even if extensive underlying groundwater contamination continued to threaten nearby drinking water wells.
Compounding the problems above is the new standard for allowing EPA to take action under H.R. 2580. On those occasions where a state doesn't request EPA assistance, H.R. 2580 would create a new, and burdensome, standard for EPA enforcement action that would require EPA's satisfaction of essentially a three-pronged test: 1) response actions must be immediately required; 2) response action may only be used in the case of a public health emergency; and 3) the State is not responding in a timely manner. This new standard will likely cause significant and contentious litigation. "Public Health Emergency" is not defined in current law nor in H.R. 2580. The term appears only in CERCLA 104(a)(4) in the context of an exception to CERCLA § 104(a)(3), which limits EPA from responding to releases that are naturally occurring; that are from products which are part of a building; or that result from deterioration of a drinking water supply system. EPA has never used 104(a)(4) to justify a response action. As a result, there is no precedent to define the term. Additionally, it is not clear how the word "immediacy" differs from the word "imminence". Finally, it is likely that additional litigation will ensue regarding whether a State is responding in a timely manner. The Administration believes it is inappropriate to risk public health by barring EPA intervention until conditions have become sufficiently (or legally) dangerous enough to lift the enforcement bar.
Targeted Liability Provisions
The Administration generally supports the targeted liability relief provisions of H.R. 2580 for qualified parties that builds upon the current success of the Superfund program. The Administration generally supports the provisions in HR 2580 that address prospective purchasers, innocent landowners and contiguous property owners. While these provisions are close to H.R. 1750, there are concerns with the provisions in H.R. 2580 as written.
We are concerned, for instance, that some of the preferable language in H.R. 1750, was excluded from H.R. 2580. For example, with regard to the bona fide prospective purchaser exemption, HR 1750 provides the United States with the ability to place a lien on other property to recover its costs. Regarding the innocent landowner defense, H.R. 1750 confirms that persons seeking to assert the defense must, in addition to satisfying the requirements of § 107(b)(3) as to care and precautions, must also demonstrate that they performed an appropriate inquiry as described in § 101(35) before buying the property, to demonstrate that they did not know or have reason to know that the property was contaminated when they bought it.
We are concerned with HR 2580's approach towards contiguous landowners. We prefer the approach in HR 1750, which creates an affirmative defense for these parties, whereas HR 2580 gives them an outright exemption. In addition, H.R. 2580's provisions relating to contiguous property owners have been severely weakened, creating the opportunity for parties to "game the system." By removing any requirement for an appropriate inquiry, prospective purchasers can acquire contiguous property at a substantial discount with full knowledge of the contamination and still avoid the potential for a windfall lien. H.R. 2580 also removes any care requirement, due, appropriate, or otherwise, which allows contiguous property owners to turn a "blind eye" to contamination on their property for which they are getting an exemption. Finally, H.R. 2580 omits the requirement that a contiguous property owner not exacerbate the release. Such requirements are appropriate in this context for parties seeking a release from liability under CERCLA.
NPL Listing Is Severely Restricted
We continue to oppose provisions that restrict EPA's ability to list sites on the NPL without a Governor's approval. This approval requirements applies even in situations where Tribal, local community, or interstate impacts exist, or where the State is a PRP. We currently are working with States in a very successful voluntary effort to seek their approval before listing a site on the NPL. In addition, HR 2580 prohibits listing of sites to the NPL if a Governor assures the site is being addressed or will be addressed in the future. The bill has no provision for when in the future a promised action to address contamination might occur.
State Response Program Provisions
See above discussion on federal safety net.
EPA is developing MOAs with concerned States to ensure that its response authorities complement and encourage rather than duplicate or discourage, voluntary cleanups. This approach, we believe, strikes the right balance between Federal and State programs while continuing to provide the needed protection of public health and the environment for our communities.
Brownfields Assessment and Remediation Grant Programs
H.R. 2580 provisions authorizing EPA to issue grants for assessment and to capitalize revolving loan funds is similar to language in H.R. 1300. The bills provide funding for assessment grants ($200,000 per grantee) and for capitalization of revolving loan funds ($1M per grantee). Although EPA supports the grant programs for brownfields, there are several problems we have identified with H.R. 2580 in this regard. Among the concerns identified: (1) ranking criteria for brownfield grant eligibility are onerous and call for information that may not become available until site assessment is completed; (2) the bill requires State matching funds for remediation grants of 50% for receipt of State revolving loan fund grant; (3) political subdivisions of a state could be deemed ineligible to receive loans under remediation grant program as written; (4) eligible entities for brownfield remediation grants may include parties who have caused or contributed to contamination; and (5) references to "remedial actions" preclude removals at brownfields sites. States may receive grants to capitalize revolving loan funds for "remedial actions" but not removals at brownfields sites. In addition, we are concerned about the level of funding that would be provided for the Brownfields grant program since the bill provides for "such sums as are necessary."
Breadth of Current Brownfields Program.
EPA is concerned that H.R. 2580 addresses only portions of the current brownfields program and is limited to the grant program for assessments and revolving loan funds. In particular, the bill omits technical support and funding for job training and workforce development.
Although the Committee did not request specific comment on the remedy provision of H.R. 2580, the Agency has provided a brief summary of concerns on section 9.
Remedies Are Less Protective
Superfund cleanups must be protective of human health and the environment over the long term. H.R. 2580's remedy title weakens current law and could result in a Superfund program that would not adequately protect human health and the environment.
Under the current statute, remedies are required to "utilize permanent solutions and alternative treatment technologies or resource recovery technologies to the maximum extent practicable." Under H.R. 2580, the word "maximum" is stricken. This change effectively eliminates the importance of selecting permanent remedies and permanent protection for communities.
Under H.R. 2580 the preference for treatment does not apply to treatment remedial alternatives "that would increase risk to community or to worker's health". Under the current law, protection of community and workers is addressed under : (1) the NCP remedy selection criteria of protection of human health and the environment, and short-term effectiveness; (2) the ARAR waiver of greater risk to human health and the environment; and (3) worker protection standards. The bill's imposition of a separate test for treatment remedies may weaken long-term protection of remedies by reducing treatment, inviting additional litigation, and delaying cleanups.
Groundwater Is Not Protected
Contaminated ground water is a problem at more than 85 percent of Superfund sites. With roughly fifty percent of the U.S. population relying on ground water for their drinking water, the Administration strongly believes that this critical resource must be protected. Legislation should not weaken the goal of restoring ground water to beneficial uses, wherever practicable. H.R. 2580 replaces this goal with a much lower standard. H.R. 2580 creates uncertainty and will cause litigation over what or how contaminated ground water should be restored. By including the term "at reasonable points of compliance," the bill invites disputes over whether drinking water standards should be met in the groundwater or at the tap. The use of "reasonable" will inspire endless arguments, may let polluters off the hook for cleaning up ground water, and will force EPA to determine what groundwater a community will need in the future.
In addition, remedies selected under H.R. 2580 would not keep contaminated ground water from spreading to uncontaminated ground water. Inappropriate use of land use planning principles "under-protect" ground water resources for the future. In fact, H.R. 2580 creates a bias against protecting uncontaminated ground water and minimizes the need for cleanup because ground water is to be protected only for its "reasonably anticipated" future use. Current practice and proper nomenclature for ground water should be "current or potential beneficial use."
Cleanups May Be Delayed
Under H.R. 2580 new and confusing provisions and terminology regarding risk assessments will delay cleanups and generate costly new litigation. Risk assessments under H.R. 2580 must be based on "best" scientific and technical information, and include site-specific bioavailability data. This new terminology may cause time consuming and costly litigation as the meaning and relevance of new terms are fought over in the courts. The new language will not improve the quality of remedies; rather, parties involved at sites could needlesslyl tie up cleanups by litigating what is meant by the word "best."
H.R. 1750, the "Community Revitalization and Brownfields Cleanup Act of 1999," was introduced by Mr. Towns and is co-sponsored by 167 Members. As EPA Administrator Carol Browner stated in her letter of May 10, 1999, "this brownfield redevelopment legislation is an important step toward restoring hope, opportunities and jobs to local communities and neighborhoods that are being held back by the presence of abandoned industrial sites." Accordingly, Administrator Browner expressed the Clinton Administration's strong support for the approach taken in HR 1750, which would promote brownfields cleanup and redevelopment by providing grants and loans, and providing appropriate liability protection to prospective purchasers, contiguous property owners and innocent landowners; and preserves critical safeguards for communities by ensuring EPA has authority to protect human health and the environment.
A June 4, 1999 letter from Bill Clinton to the Hon. Deedee Corradini and the Nation's Mayors echoes the sentiments expressed in Administrator Browner's letter. Administrator Browner's letter notes the broad consensus of Congressional and public support enjoyed by brownfields reform proposals, and requests the opportunity to continue to work with Representative Towns on appropriate resource levels and other refinements to the bill. Mr. Clinton's letter likewise remarks that HR 1750 offers the best prospect for broad public support, because it focuses on those proposals that reflect substantial consensus in Congress and among communities; and confirms his commitment to continue to work with Representatives Boehlert and Borski, as well as senators Chafee and Baucus, to achieve truly bipartisan brownfields legislation.
Many of the provisions in H.R. 1750 find some reflection in those of H.R. 2580 and, as such, both emphasize the appropriateness of targeted legislative solutions for brownfields. H.R. 1750 also provides relief for prospective purchasers of brownfields properties, protection to innocent landowners, and defenses to liability for contiguous landowners, as well as funding brownfields assessment and cleanup grant programs.
EPA has identified several provisions of H.R. 1750 that are of particular merit. The bill provides $500,000 for brownfields assessment grants and $500,000 - up to $1million - for grants for the capitalization of revolving loan funds. Unique to the legislation, however, are provisions which (1) ensure grant funding support for local governments, consortiums, and regional councils; (2) provide opportunities to support projects and programs with particular significant environmental and economic benefits; (3) make awards to states as determined necessary to facilitate receipt of funds by one or more local governments and (4) simplify the grant application and review procedures conducted by the Agency.
In the last case, H.R. 2580 so laboriously details the review and ranking process for brownfields grants it is doubtful that either the applicant or the Agency would ever succeed in actually awarding a grant. In many instances, the ranking criteria in these other bills are onerous and would call for information that may not become available until a site assessment is completed. These processes require information like economic projections, employment opportunities, and tax revenue forecasts that neither EPA nor the applicant could make. H.R. 1750, by contrast, avoids this stumbling block by simply recognizing that a grant application procedure is needed, requiring the Agency to establish one and attaching such grant conditions as may be appropriate.
H.R. 1750 also limits the procedural requirements of the NCP in brownfields "to the extent that those requirements are relevant and appropriate to the program..." Refinements to the brownfields program, such as this one, reflect and express the insights and experience we have gained from our brownfields pilots. H.R. 1750 removes yet another barrier to the redevelopment of properties in distressed urban areas and small towns.
H.R. 1750 provides funding support to states for the development of their voluntary cleanup programs and further clarifies the circumstances under which the EPA may have a role at a brownfields site, while maintaining a "safety net" in the event the Agency must act at a site presenting an imminent and substantial endangerment to the community or the environment. Qualified state programs are ones where the state is ensuring: adequate site assessment and protection of human health and the environment; opportunities for technical assistance; meaningful opportunities for public participation; streamlined procedures for expeditious voluntary response actions; adequate oversight and enforcement; and mechanisms for approval of response action plans. EPA is pleased to see the bill "grandfather" existing memoranda of understanding between states and the Agency. We look forward to working with Representative Towns on appropriate resource levels consistent with the President's Budget and certain refinements to the bill.
The Administration has previously commented on HR 1300. EPA Administrator Carol Browner testified on the bill at a hearing before the House Water Resources and Environment Subcommittee, and supplied a May 11, 1999 letter from Jon Jennings, Acting Assistant Attorney General, for the hearing record. For purposes of the present hearing, we will reiterate some of our concerns with HR 1300's brownfield provisions.
With regard to liability relief, HR 1300's treatment of contiguous landowners is problematic, first, because it creates an exemption rather than an affirmative defense, as set forth in HR 1750, and second, because it lacks most of the eligibility requirements contained in HR 1750, indeed, it contains fewer than in HR 2580.
We remain particularly concerned with HR 1300's "innocent landowner" provision, which essentially collapses into one the innocent landowner defense and the bona fide prospective purchaser exemption that have both appeared in numerous legislative proposals. Although we generally support protection for both groups, we are gravely concerned that HR 1300's provision of relief for current owners that knowingly bought contaminated property is inconsistent with longstanding principles of common law. Those principles recognize that owners are often in the best position to address hazardous substances on their property; and that they must take steps to address hazards on their property even if they did not themselves create the condition. In addition, many of these owners acquired the property, not only with knowledge of contamination, but also with knowledge of a responsibility for performing a cleanup. Relieving these parties of this responsibility constitutes an enormous windfall for these parties, and creates significant fiscal consequences for the Trust Fund, especially at sites where the current owner is the only major viable responsible party.
The Agency's administrative reforms have fundamentally improved the Superfund program. Brownfields reforms made under CERCLA should be codified, and Congress should reaffirm use of the Superfund Trust Fund to address the full range of brownfield issues. We fully support targeted legislation that will address brownfields and liability relief provisions for qualified parties that builds upon the current success of the Superfund program.
The federal attention directed at brownfields redevelopment over the past four years reflects a growing realization that yesterday's eyesore is today's opportunity. For EPA and the federal government, it is an opportunity to demonstrate that environmental protection can also promote economic development. For communities and cities, it is the opportunity to return a wasted asset to productivity, job creation and revenue generation. For local contractors and developers, brownfields redevelopment is an opportunity to expand their work, to clean up sites and to build new facilities. For local lenders, it is the opportunity to meet their community reinvestment needs, often at much less of a credit risk than they might otherwise anticipate. But the biggest opportunity is for the people who live withbrownfields sites every day. Eyesores are cleaned up. Frequently, potential threats to health are substantially reduced, if not altogether eliminated The value of property increases. And often brownfields redevelopment provides the neighborhood's residents with a new sense of hope.
Thank you. I would be happy to answer any questions on brownfields you may have.