Innovations in State Policy

Brownfields Cleanup and Redevelopment

October 2004

By Larry Morandi, Jennifer Smith and Lara Mullin

Adobe Acrobat Logo (printer-friendly version) To read portable document format (.pdf) files, you must install Adobe Acrobat Reader.

Brownfields typically are abandoned or underutilized commercial and industrial properties that are contaminated or perceived to be contaminated, thereby affecting their future use. They are most frequently found in cities and older suburbs, but rural areas contain their share of abandoned agricultural operations and mine-scarred lands. Brownfields may pose an environmental and public health threat if they are not cleaned up. Because they are not economically productive, they fail to generate tax revenue and employment opportunities for surrounding communities.

There are advantages to cleaning up brownfields instead of developing open space. Brownfields may already have essential infrastructure—roads and sewers—in place, which can reduce development costs. In urban areas, they are more likely to have access to markets and a labor pool. If the proposed redevelopment includes mixed uses—residential, retail and office space—the remediated site can attract people to live, shop and work in urban centers, thereby reducing commuting distances, traffic congestion, air pollution and sprawl.

What incentives do potential landowners need to make the investments in time and money that are necessary to clean up and redevelop brownfields? The primary obstacles to cleanup and redevelopment are 1) liability concerns of prospective property owners about contamination they did not cause that may be found on the site; and 2) insufficient financial incentives to make the necessary cleanup and redevelopment investments. The primary incentive is certainty that an inculpable party who is willing to expend capital to clean up and revitalize a site will not be held responsible for damages caused by contamination that was not his or her fault.

States have been operating brownfield programs since the mid-1990s in an effort to remove these barriers and return rundown properties to state and local tax rolls. They received a boost in January 2002 when the president signed the Small Business Liability Relief and Brownfields Revitalization Act (P.L. 107-118). The new law provides liability protection against federal actions to prospective purchasers of brownfield sites, contiguous property owners who are victims of pollution from a neighboring site, and innocent landowners who acquire a property without knowledge of contamination. Several states have passed legislation since 2002 that mirror the federal liability protections, thus assuring potential developers who conform to cleanup standards that they will not be held liable for damages brought by state or federal enforcement agencies. The combination of state and federal protections provides the legal certainty prospective landowners may need to move forward with cleanup and redevelopment activities.

States have taken the lead in providing financial incentives to encourage brownfields cleanup and redevelopment. These incentives include 1) grants and low-interest loans for site assessment and cleanup activities; 2) tax credits for environmental cleanup and job creation; and 3) credit enhancement agreements for loan portfolio insurance and loan guarantees. In addition, states have authorized local governments to use tax increment financing (TIF) to back bonds issued for brownfield projects. TIF uses the differential between the assessed valuation of property before cleanup and redevelopment occurs and the extra tax revenue generated after project completion to support it.

This Innovations in State Policy brief examines programs in five states—Colorado, Maryland, New York, Pennsylvania and Virginia—to illustrate actions undertaken to remove obstacles and provide incentives for brownfields cleanup and redevelopment. Maryland, New York and Virginia have passed significant new legislation in the last two years. The appendix provides a comparative overview of key provisions found in each state’s law. Additional information about state brownfield programs can be found on NCSL’s Web site at www.ncsl.org/programs/environ/brownfields/brownfields.htm.

Colorado

The two principal features of Colorado’s brownfields program are liability protection once a site is cleaned up to approved standards, and financial incentives to remediate and redevelop sites. The state’s brownfields program began with passage of the Voluntary Cleanup and Redevelopment Act in 1994 (House Bill 1299; Colo. Rev. Stat. §§25-16-301 et seq.). The legislation established a voluntary program for eligible properties that can be initiated under one of two options:

Submission to the Colorado Department of Public Health and Environment (CDPHE) of a voluntary cleanup plan where remediation of the property may be necessary to accommodate the current or proposed use of the property.
Submission to CDPHE of a no action petition where remediation of the property is complete or unnecessary.

The program is completely voluntary; the state has no enforcement authority and an applicant may “walk away” at any time. Properties that are not eligible for inclusion in the program are 1) those that are listed or proposed for listing on the Superfund National Priority List (NPL); 2) those that are subject to a state or federal environmental corrective action; or 3) permitted hazardous waste sites.

If an applicant chooses to submit a voluntary cleanup plan to CDPHE, the plan must include an environmental assessment of the property; a proposal to remediate any contamination discovered at the site; and a description of any state soil, surface or ground water standards that must be complied with in cleaning up the site. Once cleanup is approved, the department issues a “no further action” letter that provides assurance that the property, “ … when used for the purposes identified in the voluntary cleanup plan, is protective of existing and proposed uses and does not pose an unacceptable risk to human health or the environment at the site.” This provides a level of certainty to the landowner that compliance with an approved plan will not require any additional cleanup. The letter does not contain a “covenant not to sue” (that would provide additional liability protection). Dan Scheppers, CDPHE staff in the voluntary cleanup program, points out, however, “ … that because Colorado does not operate a state Superfund program, there are no related laws against which additional liability protections would have to be provided.” “We can’t grant liability relief from federal actions,” he continues, “but we feel comfortable that EPA will not go after applicants who comply with the cleanup provisions in our program.”

Belmar—Lakewood, Colorado

The Belmar redevelopment project is located in Lakewood, a city of 146,000 residents bordering Denver to the west. It sits on the old Villa Italia shopping mall, a 103-acre site built in 1966. By 1999, the mall was experiencing a 90 percent vacancy rate that translated into an annual loss in sales tax revenue to the city of $2 million. In addition, the property’s soil and ground water were contaminated by volatile organic compounds from sources such as automobiles and dry cleaners. To protect the environment and spur economic development, the city entered into a public-private partnership with Continuum Partners, an innovative real estate development company, to design and build a mixed-use urban center comprised of residential, retail, office, entertainment, recreational and open space opportunities.

When completed, Belmar’s 22 city blocks will include 1 million square feet of retail space, 800,000 square feet of office space, 1,300 homes, and nine acres of parks and open space, among other amenities. Cleanup and redevelopment activities have resulted in the creation of 13,460 jobs and an estimated economic impact of more than $500 million. The project benefited from a $1.95 million low-interest loan from the Colorado Brownfields Revolving Loan Fund (see description below). The first residential, retail and office buildings opened in the spring of 2004, four years after ground was broken for the project.

The basis for Scheppers’ confidence is a memorandum of agreement (MOA) that CDPHE entered into with the U.S. Environmental Protection Agency (EPA) to define state and federal responsibilities under the voluntary cleanup program. The MOA stipulates that, once an applicant submits a cleanup plan to the state, “EPA will not plan and does not anticipate undertaking any federal action under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) …,” unless the site can be listed on Superfund’s NPL or poses an imminent threat to the public health, welfare or environment, or the applicant fails to comply with the approved cleanup plan. Once cleanup is complete, the applicant can request CDPHE to forward its certification to EPA, which will remove the site from its Comprehensive Environmental Response, Compensation and Liability Information System (CERCLIS) database of actual or potential NPL sites. Scheppers notes that EPA has not sought additional cleanup or damages from any applicant approved under Colorado’s program since the MOA went into effect.

Colorado’s voluntary cleanup program was enhanced during the 2000 legislative session with the passage of House Bill 1306 (Colo. Rev. Stat. §39-22-526), which offers significant tax credits for site remediation and redevelopment. The law provides a state income tax credit for tax years 2000-2005 for property that is cleaned up and proposed for redevelopment in a municipality of 10,000 or more residents equal to:

50 percent of the first $100,000 expended for remediation.
30 percent of the next $100,000 expended for remediation.
20 percent of the next $100,000 expended for remediation.

The maximum amount of the tax credit is $100,000. If the person’s tax liability exceeds the amount of the credit in the year taken, it may be carried over for a period not to exceed five years. Tax credits totaling $908,881 have been approved on 11 brownfields properties through September 30, 2004.

In addition to tax credits, Colorado has established a Brownfields Cleanup Revolving Loan Fund for environmental cleanup of eligible properties in the Denver metropolitan area. The fund provides low-interest loans to clean up publicly owned and privately owned properties that have been approved by CDPHE for inclusion in the voluntary cleanup program. The fund may be used for:

Removing, mitigating or preventing the release of a hazardous substance.
Site monitoring activities.
Public participation costs.
Purchase of environmental insurance to limit future liability for cleanup costs.

The fund has awarded $2.89 million in low-interest loans to date, and another $360,000 is pending. The combination of low-interest loans and tax incentives—with assurances that compliance with a cleanup plan will protect a party from future cleanup costs—has led to the approval of 337 applications in 28 of Colorado’s 64 counties since the inception of the voluntary cleanup program in 1994.

Maryland

The Maryland General Assembly established both a Voluntary Cleanup Program in the Maryland Department of the Environment (MDE) and a Brownfields Revitalization Incentive Program in the Maryland Department of Business and Economic Development in 1997. These programs provide incentives and guidelines for the acquisition, restoration and redevelopment of property that is contaminated or perceived to be contaminated by controlled hazardous substances. Recent legislation—House Bill 294 (2004 Md. Laws, Chap. 73)—has expanded on the legislature’s initial policies by providing greater funding, certainty and liability protection for participants in both programs.

Overview of 2004 Maryland Legislation

House Bill 294 (2004 Md. Laws, Chap. 73) increases funding for the state’s brownfields program by assessing a fee of $2,000 for an expedited request to determine a person’s status as an inculpable person regarding liability for contamination of an eligible brownfields property, or an applicant that receives a “no further requirements” determination or a “certificate of completion” that is conditioned on certain uses of the property.

The law increases certainty for proposed brownfields redevelopers by shortening the time period for determination of a person’s inculpable status to five days after receipt of an expedited request. It also allows an owner of an eligible brownfields site that has restrictions placed on its use to change the use of the property provided the owner pays the cleanup costs to meet the new cleanup standards.

Greater liability protections are provided to brownfields property owners once they have received a no further requirements notice or a certificate of completion from the Department of the Environment. In both cases, the owner and any successors are protected from liability for any violations of the conditions placed on the property’s use so long as they did not cause or contribute to the violation.

Voluntary Cleanup Program

Maryland currently defines “eligible property” under the Voluntary Cleanup Program (VCP) as property that is contaminated or believed to be contaminated by hazardous wastes. Sites that are not eligible for voluntary cleanup include:

Sites listed on the National Priorities List under section 105 of CERCLA (commonly known as Superfund).
Properties subject to Maryland controlled hazardous substance permits.
Properties initially contaminated by the release of controlled hazardous substances after October 1, 1997, unless the property is acquired by an inculpable person or the contamination was caused by an act of God.

Eligible applicants for the VCP were limited by House Bill 294 in 2004 to inculpable persons only. Inculpable persons are prospective purchasers of a brownfields property who have no prior or current ownership interest in the property and did not cause or contribute to contamination at the site. A landowner is not considered to be an owner or operator of a site containing a hazardous substance if the contamination or threat of contamination flows from a contiguous property and the landowner does not own that property.

To participate in the program, an applicant pays an application fee of $6,000, unless MDE determines that a lesser fee would be sufficient or upon demonstration of financial hardship. The application must include:

Information that demonstrates that the contamination did not result from the applicant knowingly or willfully violating any law regarding hazardous substances.

A demonstration of the person’s status as an inculpable person.
A showing that the property is eligible property.
A detailed report containing information on environmental conditions known to the applicant on the property.
An environmental site assessment.
A summary description of a proposed voluntary cleanup project and the proposed future use of the property.

MDE must notify the applicant within 60 days after receipt of the application whether it has been approved and must include a determination of whether the applicant is a responsible or inculpable person. If the applicant wishes to expedite the process, an additional fee of $2,000 will ensure that MDE will make a decision within five business days of receiving the request. Within 30 days after receiving notification of approval of an application, an applicant must inform MDE whether he or she intends to proceed or withdraw from the program. In the absence of this notification, the application will be deemed to be withdrawn.

Under the VCP, an applicant can apply for a no further requirements determination (that does not require a response action plan) or a certificate of completion (that requires the submission and successful implementation of a plan—see below). If a determination by MDE that it has no further requirements of the applicant is conditioned on certain uses of the property, the applicant must pay a fee of $2,000. If an owner of an eligible property wants to change the permissible use of the property, the owner is responsible for the cleanup costs to meet the appropriate cleanup standard.

If the application is approved without a no further requirements determination, the applicant who chooses to participate in the program must develop a detailed response action plan (RAP). A RAP expands on the summary description of the applicant’s proposed cleanup plan contained in the application. The RAP must include a plan and schedule for all cleanup work as well as a plan for long-term monitoring and maintenance of the site, if necessary. It also must include a written statement that the property meets local zoning requirements and a written agreement that, on approval of the plan, the participant will comply with all its provisions.

When it approves a RAP, MDE issues an approval letter and a certificate of completion, which protects the participant from additional cleanup requirements beyond those stated in the plan. The participant and any successors in interest in a property are protected from liability in the event of any violation of the conditions placed on the use of the property, so long as they did not cause or contribute to the violation. An inculpable person is not liable for existing contamination at the eligible property, but is liable for new contamination or exacerbation of existing contamination. Lenders who extend credit for cleanup activities also are protected from liability so long as they have not caused or contributed to the contamination.

When MDE sends a no further requirements letter, a response plan approval letter, or a certificate of completion, it must include a statement that this notice does not:
Remain in effect if it was obtained through fraud or material misrepresentation.
Prevent MDE from acting to prevent an imminent endangerment to public health or the environment at the eligible property.
Affect MDE’s authority to act against any person concerning new or exacerbated contamination or against a responsible person concerning previously undiscovered contamination.
Prevent MDE from taking action against any person responsible for long-term monitoring and maintenance in accordance with a RAP or against any person who violates conditions on the use of the property.

As of August 11, 2004, 194 properties had submitted applications to MDE for inclusion in the VCP. MDE has approved 135 of the sites. Cleanup has been completed on 107 sites—93 properties have received a no further requirements letter and 14 have received a certificate of completion. It is too early to determine whether Maryland’s new legislation has affected the pace of submission and cleanup; House Bill 294 does not go into effect until October 2004. Jim Metz, MDE Environmental Restoration and Redevelopment Program, has seen, however, “a sizeable increase in the number of applicants in the past year.”

Brownfields Revitalization Incentives Program

The Brownfields Revitalization Incentive Program (BRIP) provides financial incentives for redevelopment of eligible brownfields under the VCP. Financial incentives include property tax credits in counties and municipalities that have adopted tax credit legislation and low-interest loans or grants for environmental assessments and site remediation. Local governments that participate in BRIP must provide a tax credit equal to 50 percent of the property tax attributable to the increased value of the brownfields site after cleanup and redevelopment for a period of five years and must contribute 30 percent of the increased tax revenue to the Maryland Economic Development Assistance Fund to be used for financial assistance for eligible brownfields projects in the jurisdiction that assessed the tax. Kim Mullany, a member of the BRIP staff, notes that, “ … one incentive for local governments to offer tax credits is the prospect of receiving additional tax revenue in the future as redeveloped brownfield properties return to the tax rolls.” In local jurisdictions that choose to participate in the incentive program by providing property tax credits, MDE may offer additional financial incentives, including low-interest loans or grants for environmental assessments and site remediation. As of June 30, 2004, BRIP has provided $4.8 million in state funds for 31 site assessment and remediation projects. Twenty of those sites have qualified for local tax credits.

New York

The New York Legislature passed the “New York State Superfund Refinancing and Brownfield Cleanup Act of 2003” (Assembly Bill 9120/Senate Bill 5702, enacted as 2003 N.Y. Laws, Chap. 1). In addition to providing $120 million in annual bond revenue to clean up hazardous waste sites, the legislation established a comprehensive Brownfield Cleanup Program (BCP) that addresses three factors that have prevented large-scale brownfields cleanup and redevelopment activities in the state:

Liability concerns of prospective property owners and developers.
Insufficient financial incentives to make the necessary cleanup and redevelopment investments.
Lack of institutional controls to ensure that the future land use is commensurate with the level of cleanup.

Liability Protection

The New York legislation contains a liability limitation provision that is triggered once the Department of Environmental Conservation (DEC) issues a certificate of completion for a brownfields site. At that point, the person completing the cleanup is exempt from liability to the state for any “ … statutory or common law cause of action, arising out of the presence of any hazardous waste in, on or emanating from the brownfield site that was the subject of the certificate at any time before the effective date of a brownfield site cleanup agreement” entered into under the law (N.Y. Env. Con. Law, §27-1421).

Financial Incentives

The act contains a multitude of financial incentives to encourage brownfields cleanup and redevelopment. It provides tax credits for soil and groundwater cleanup, for site redevelopment and job training costs, and for purchasing environmental remediation insurance; it also allows a refund of that portion of a credit that exceeds a person’s tax liability in any given year. The legislation increases from 75 percent to 90 percent the amount of financial assistance made available to community-based organizations and municipalities for the costs of brownfields planning, site-assessment and cleanup activities and allows municipalities to retain the full profits from any subsequent sale of a brownfields site to a private developer (rather than having to split the profits with the state).

Legislative Perspective

New York’s brownfields legislation had strong bipartisan support, with the chairs of each chamber’s environment committee—Assemblyman Thomas DiNapoli, a Democrat, and Senator Carl Marcellino, a Republican—successfully moving it through the process. Assemblyman DiNapoli emphasized that the act provides the state with “ … a new framework to remediate contaminated sites retaining the nation’s most protective cleanup standards, while providing developers, municipalities and community-based organizations with a predictable process, financial incentives and liability relief.” He further noted that, “By cleaning up brownfield sites and refinancing the state’s Superfund program, not only will environmental threats be removed from communities throughout the state, but local economies will also be revitalized.”

Senator Marcellino was equally enthusiastic about the law’s prospects, especially its economic development potential. “This legislation will get these urban eyesores back on the tax rolls and make them community assets rather than letting them eat away at the heart of our cities, towns and villages like cancer.” He continued, “By creating a Brownfield Cleanup Program and refinancing the state Superfund, we will promote the physical, economic and social revitalization of our communities.”

Institutional Controls

To ensure that future uses of a remediated brownfields property conform to the cleanup standards set for the site, the law requires the property owner to implement institutional or engineering controls that may become part of an environmental easement that is transferred to the state. The easement must contain restrictions and the means of enforcing them against incompatible land uses that, if allowed, could adversely affect human health or the environment on the site.

How the New Law Works

Properties eligible to participate in the BCP are those where “ … redevelopment or re-use may be complicated by the presence or potential presence of a hazardous waste, petroleum, pollutant, or contaminant,” with the following exceptions:

Inactive hazardous waste disposal sites.
Sites on the U.S. Environmental Protection Agency’s Superfund National Priorities List.
Hazardous waste treatment, storage or disposal facilities.
Sites that are subject to ongoing state or federal environmental enforcement actions.

Once eligibility is determined, an applicant for participation in the BCP must enter into a brownfields cleanup agreement with DEC. The agreement will include a site remedial investigation component that defines the nature and extent of contamination, identifies contaminant sources, and assesses the impact and movement of the contaminant. It also must include a remedial work plan that analyzes alternative remedies based on the future use of the site—unrestricted, commercial or industrial. Once DEC determines that site cleanup has been achieved under the terms of an approved work plan, it issues a certificate of completion. The certificate of completion, which may be conditioned on implementation of institutional or engineering controls on the site, triggers the liability protections contained in the new law and makes the participant eligible for various tax credits (that are effective with the tax year beginning April 1, 2005).

Progress to Date

Although the new law has been in effect for less than a year, DEC staff have noticed increased interest among potential developers. “The liability protection and financial incentives contained in the law are driving interest in the BCP,” says Ted Bennett, staff in the Division of Environmental Remediation. “We’re on the road often speaking to groups interested in learning more about the new program.” Since enactment last October, the department has received 51 new brownfields site cleanup applications. In addition, 86 site owners have requested transfer from the old administratively run Voluntary Cleanup Program to the new legislatively created Brownfield Cleanup Program.

Pennsylvania

The Pennsylvania General Assembly passed a three-bill package in 1995 (1995 Pa. Laws, Acts 2, 3 and 4) that established the Pennsylvania Land Recycling Program in the Department of Environmental Protection. The three main goals of the land recycling program are to: 1) make contaminated sites safe; 2) return contaminated sites to productive use; and 3) preserve farmland and greenspace.

Act 2: Land Recycling and Environmental Standards Act

The primary objective of Act 2 (Pa. Cons. Stat. Ann. tit. 35 §6026.101 et seq.) is to encourage the voluntary cleanup of contaminated commercial and industrial sites. The four cornerstones of the act—uniform cleanup standards, liability relief, standardized reviews and time limits, and financial assistance—were developed to remove the obstacles posed by redevelopment of a site. To this end, a framework for cleanup standards was established based on health and environmental risks. Remediation of a site according to these standards and procedures provides the owners and developers with relief from liability for any further remediation of the contamination. Financial assistance is provided under the Industrial Sites Reuse Program to encourage voluntary investigation and remediation activities at industrial sites through grants and loans for as much as 75 percent of the cost of the activity.

Remediation Standards and Review Procedures

Any party who performs a cleanup—voluntary or mandatory—who desires to take advantage of the liability protection provided in Act Two must select and attain compliance with one or a combination of the following three environmental standards or remediate the site as a special industrial area.

Background Standard—A person cleaning up to background levels need not eliminate all man-made contamination. Under the act, background is defined as the concentration of regulated substances that is not associated with releases from the site. Contaminants may be present, but they must reflect off-site conditions in each environmental medium, both soil and groundwater.
Statewide Health Standard—The Department of Environmental Protection (DEP) developed regulations that establish statewide health standards for contaminants in each environmental medium. These standards are derived from “medium specific concentrations” based upon acceptable cancer and systemic health risks and cannot be more stringent than the federal standards. It is not allowable for the statewide standards to be attained using engineering controls—i.e., paving or building structures over contamination or restricting site use.
Site-Specific Standard—This standard, used on a case-by-case basis, allows the remediator to establish cleanup levels appropriate for the intended use of a particular site. This more detailed approach involves developing a site-specific risk assessment based on the conditions and human exposures at the site.
Special Industrial Area—To qualify for status as a special industrial area, which makes the site eligible for limited remediation based in part on the proposed use of the property, a site must either not have an associated financially viable responsible person or be in an Enterprise Zone; this includes all Keystone Opportunity Zones. The party conducting the cleanup must not have contributed to the contamination and must perform a remedial investigation. The cleanup itself must address all immediate, direct or imminent threats and other environmental contamination based on the intended use of the site. A baseline environmental report is drafted that then acts as the basis for a consent order and agreement between the remediator and the DEP.

DEP’s David Hess points out that, “Although the party performing the cleanup selects the standard, if contamination onsite affects surrounding properties, the cleanup level must be compatible with the neighboring land uses.” For example, if the site being remediated is an industrial property surrounded by residential development that is affected by contamination on the industrial site, cleanup to the industrial site-specific standard may not be sufficient to gain DEP approval. The department will exercise its regulatory authority to ensure that the appropriate standards are being met, but it seldom becomes involved in determining the future use of a redeveloped property; instead, DEP relies on other factors such as local zoning.

Liability Protection

Any person who conforms to the conditions of one or a combination of the cleanup standards is relieved of further liability for the remediation of contamination identified in reports submitted to and approved by DEP. This cleanup liability protection applies to the current or future site owners, developers, occupants, successors/assigns and public utilities. Greater protections for economic development agencies, fiduciaries and lenders are provided in Act 3.

Limited liability is assigned to the owners or developers of a special industrial area because they are responsible only for the remediation of immediate, direct or imminent threats and for any other remediation specified in the special industrial area agreement between them and the DEP.

Act 3: Economic Development Agency, Fiduciary and Lender Environmental Liability Protection

Act 3 (Pa. Cons. Stat. Ann. tit. 35 §6027.1 et seq.) provides economic development agencies, fiduciaries and lenders with protection from environmental cleanup liabilities if they are not responsible for the contamination. More specifically, an economic development agency that owns or holds legal interest in a property for the purpose of financing, or a lender involved in the routine practices of commercial lending, shall not be liable under the environmental acts to the DEP or to any other person. In either case, the parties may be liable if they caused or exacerbated a release of regulated substances. It is generally thought that anyone who acts as a fiduciary shall generally not be liable under the environmental acts to the DEP or any other person.

Act 4: Industrial Sites Environmental Assessment Act

The sole purpose of Act 4 (Pa. Cons. Stat. Ann. tit. 35 §6028.1 et seq.) is to authorize the Department of Community and Economic Development (DCED) to make grants to municipalities, municipal or local authorities, nonprofit economic development agencies, and similar agencies to finance environmental assessments of industrial sites located in municipalities that have been designated as distressed by DCED.

Act 6: Industrial Sites Environmental Assessment Act

In 2000, the Pennsylvania General Assembly passed House Bill 2057 (2000 Pa. Laws, Act 6; Pa. Cons. Stat. Ann. tit. 35 §6028.1 et seq.) to modify and add provisions to Act 4. Act 6 provides grants for conducting assessments of industrial sites, provides funding and imposes additional duties on DCED. The definition of municipality eligibility is expanded to include certain class cities and boroughs. In addition, performance-based loans are provided to applicants for projects related to remediation of brownfields sites and nonhazardous waste or debris. The loans awarded may be forgiven to the extent the performance measures are realized in accordance with an agreement with DCED. Loan distribution is limited to those who did not cause or contribute to the contamination on the property and who propose to undertake a voluntary cleanup of the property.

Brownfields Inventory Grant Program

The Brownfields Inventory Grant Program (BIG) provides grants to municipalities and economic development agencies to inventory brownfields within their jurisdictions. The authority for the program is found in the Hazardous Sites Cleanup Act (Pa. Cons. Stat. Ann. tit. 35 §§6020.101 et seq.). The two goals of BIG are to establish the number of brownfields statewide and to increase opportunities for site assessment and redevelopment by making brownfields site information available in the Pennsylvania Brownfields Directory. Grants, offered biannually, are limited to $50,000 per grantee per grant cycle.

Current Status

Since its inception in 1995, the Land Recycling Program has been responsible for cleaning up more than 1,350 properties in 63 of the state’s 67 counties and for creating or retaining more than 30,000 jobs. Close to 500 sites are listed for future remediation projects. Tom Fidler, director of the Land Recycling Program, thinks its success can be attributed largely to the “incentives, clarity and certainty” that the program offers. “After that,” he notes, “we just get out of the way” and let site remediation and redevelopment occur.

In February 2004, the Brownfield Action Team (BAT) was created to work directly with local officials to accelerate the redevelopment of abandoned industrial sites. The BAT is part of a comprehensive effort to streamline the permitting processes for land recycling projects and to ensure dedicated funding to redevelop distressed areas and increase local outreach. The expedited remediation effort is focused on sites located within recognized growth boundaries that have been identified by local leaders as vital to community redevelopment and preservation.

The Department of Environmental Protection and EPA signed a memorandum of agreement (MOA) in April 2004 that makes the Land Recycling Program the first in the nation to act as a “one-stop-shop” for state and federal standards that guide brownfield cleanup. The MOA’s purpose is to clarify how sites remediated under Pennsylvania’s land recycling program can satisfy cleanup requirements under three federal laws—Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation and Liability Act (Superfund) and Toxic Substances Control Act. The one-stop-shop process will provide greater certainty for potential brownfields redevelopers in that, by complying with the state’s standards, they will receive liability protection against potential cleanup claims under federal law. DEP’s David Hess notes that his agency and EPA will begin formalizing procedures to link the two programs during meetings that began in September 2004.

One-Stop-Shop MOA

In announcing the MOA with EPA, DEP Secretary Kathleen McGinty emphasized that, “This agreement will encourage more businesspeople and economic development agencies to clean up and redevelop old industrial sites …” “The MOA,” she continued, “sets a clear path for developers to address both federal and state remediation obligations.”

Virginia

Three primary components of Virginia’s brownfields program were established under Virginia’s Brownfield Restoration and Land Renewal Act (2002 Va. Acts, Chap. 378; Va. Code §10.1-1230 et seq.): 1) amnesty for voluntary disclosure; 2) limited liability; and 3) creation of the Virginia Brownfields Restoration and Economic Redevelopment Assistance Fund.

Amnesty for Voluntary Disclosure

A person who makes a voluntary disclosure of real or potential contamination at a brownfields site is immune from administrative or civil penalties under state law. Three conditions must be met to qualify the disclosure for amnesty: 1) disclosure must not be required by any other law, regulation, permit or administrative order; 2) the person making the disclosure must adopt a plan to market the property for redevelopment or ensure the timely remediation of the site; and 3) the person making the disclosure must not be acting in bad faith.

Limited Liability

Liability protections are afforded to a bona fide prospective purchaser of a brownfields property, an innocent landowner who acquires the property without knowledge of contamination, and a contiguous property owner who is a victim of a neighboring property’s contamination.

A bona fide prospective purchaser is not liable for cleanup at a brownfields site if the following conditions are met:

The person did not cause, contribute or consent to the contaminant release.
The person is not liable as a result of a familial, contractual, corporate or financial relationship.
The person exercises appropriate care over any hazardous substances found on the property by taking reasonable steps to stop or prevent any contaminant release and prevent or limit exposure to any hazardous substances.
The person does not impede any response action to contamination found on the property.

An innocent landowner is not liable for cleanup at a brownfields site if the person meets the same conditions that apply to a bona fide prospective purchaser and if the person makes all appropriate inquiries into the previous uses of the property.

A contiguous property owner is not liable for cleanup at a brownfields site if the person meets the first two conditions that apply to a bona fide prospective purchaser and if the person cooperates fully with those who respond to contamination at the site.

Virginia Brownfields Restoration and Economic Redevelopment Assistance Fund

The Virginia Brownfields Restoration and Economic Redevelopment Assistance Fund provides financial assistance to local governments and private entities to encourage cleanup and redevelopment of brownfield sites. It consists of revenue appropriated by the legislature, loan repayments and other income sources. The fund is a joint venture of the Virginia Resources Authority, which manages it, and the Virginia Economic Development Partnership, which allocates funds to recipients. Revenue in the fund may be used for grants to local governments and loans to local governments and corporations to conduct environmental assessments of contaminated sites, site remediation and restoration for new economic development, and for preparation of site remediation and reuse plans.

Measuring Success

The amnesty provisions of the Brownfield Restoration and Land Renewal Act have garnered considerable interest, according to Chris Evans, Virginia’s brownfields coordinator in the Department of Environmental Quality, but DEQ has not written any letters to property owners confirming amnesty to date. The letters may, in fact, not be necessary to move the cleanup and redevelopment process forward. Evans notes that, “ … although a letter count would be nice to demonstrate the law’s effectiveness, many of the consultants and attorneys who bring sites into the brownfields program go through a checklist that we provide of what constitutes immunity with their clients and are able to assure them that they have nothing to fear.” This allows the property owner “to move quickly,” Evans asserts, “to the more important buyer-seller negotiations.” Evans admits that he doesn’t have “any proof of that, but our projects have been uniquely absent any seller fears that we’re aware of.”

View from the Legislature

The Brownfield Restoration and Land Renewal Act passed the General Assembly without opposition. Delegate Terrie Suit, the legislation’s patron, emphasized the importance of the marketing effort conducted by the Virginia Department of Environmental Quality (DEQ) with stakeholder groups before the legislation was drafted to determine the types of incentives, clarity and certainty necessary for the program to move forward. A legislative study commission then reviewed a draft bill that resulted from DEC’s consultation process and recommended it to the full legislature with little change. “We had everyone at the table and in agreement before the General Assembly convened,” Delegate Suit noted, “which allowed the bill to be reported out quickly.” She points to the attractiveness of legislation that can achieve both environmental and economic benefits: “It’s much better to generate revenue by cleaning up and placing property back on the tax rolls than by raising taxes.”

DEQ’s Evans says that, “Our goal has always been to provide our services in a way that is substantive and expeditious without getting in the way.” He concludes, “It appears that we are doing that quite well as we’re seeing impressive results and we project a doubling of project activity this year over last year’s count.” The results he alludes to are 20 sites that that DEQ signed off on during FY 2004 (compared to a target of 12), and 30 that are projected to be completed in FY 2005 (twice the original goal of 15). DEQ measures success by being able to facilitate cleanup and redevelopment agreements. Normally, site remediation is unnecessary (that has been the case so far), and redevelopment may take several years. By sending prospective purchasers a letter resolving them of future liability for contamination so long as they exercise appropriate care of the property (30 such letters have been written to date), however, redevelopment of the land can proceed and the department can move on to assist in closing other transactions.

DEQ estimates that Virginia’s brownfields program has resulted in more than $700 million in capital reinvestment. The effect on employment has been positive, with the creation of more than 300 full-time jobs and 2,500 part-time jobs. In addition, the program has been responsible for saving 500 full-time jobs that were in jeopardy of being cut.

Appendix. Comparison of State Brownfields Programs

This report was prepared under a cooperative agreement (TR-83134101) with the U.S. Environmental Protection Agency (EPA). The National Conference of State Legislatures (NCSL) would like to thank Jennifer Millett Wilbur with EPA for her support in this effort. Any opinions, findings or conclusions in this report are those of NCSL staff and do not necessarily reflect the views of EPA.

Back arrow, return to previous page Brownfields

Visitor counts for this page.