Extensive Report Looks at “States in Crisis”

National Strategies, LLC (NSI), a nationally recognized business-to-business government consulting firm headquartered in Washington, D.C., has released the results of its special research report, “The 2009 Budget Outlook: States in Crisis.” The report is based on the extensive, first-hand cultivation of information from each of the 50 state budget offices, with an emphasis on identifying strategies each state plans to employ to address their 2009 projected shortfalls. NSI is an NBA corporate member. Read the complete report.

LEGISLATION & POLICY

Click here to read a state-by-state rundown of current, pending brownfield legislation.

Stimulus Status Report

Last February, the American Recovery and Reinvestment Act of 2009 allocated $100 million for brownfields cleanup and assessment activities. To date, the U.S. EPA has obligated $75.7 million in ARRA funding for 173 brownfields assessment, revolving loan fund, cleanup and jobs training cooperative agreements, according to the agency Press Office. Of the $100 million, EPA is using $6.8 million for brownfields job training. Click here for a list of communities that have received (or will receive) ARRA funding, thus far. (Under “grant type” click “All”)

All 10 EPA regions are reporting success stories. In Alameda County, CA, for example, the stimulus funded cleanup at a petroleum-contaminated bulk fuel storage site that will be developed into a youth center, park and school gymnasium. “Without Recovery Act funding, California, as a result of the economic downturn, would not have resources to fund the petroleum cleanups, such as the kind at this site,” states the Region 9 web site. Meanwhile, in Woonsocket, RI, $200,000 in ARRA funding allowed the City to clean up the last remaining lot in an $80 million middle school redevelopment project, reports Region 1’s Carol Tucker.

House and Senate Divided on HUD Brownfields Programs

From the Northeast-Midwest Institute: The House and Senate Appropriations Committees have taken opposite paths on the HUD FY 2010 brownfields programs. The Senate followed the Obama Administration’s lead and “zeroed” both HUD Section 108 and the Brownfields Economic Redevelopment Initiative (BEDI), although HUD 108 is slated to continue without subsidy. The House budgeted $25 million for BEDI and $6 million for HUD 108, putting the programs back to 2002-2005 levels. The House justification for HUD 108 states that “The Committee does not agree that the activities of this account are best performed through the Community Development Block Grant program. Further, the Committee does not believe that the fee structure proposed by the Administration is the best way to resolve the need for appropriations in this account.”

Brownfields Tax Expensing Bill Introduced

From the Northeast-Midwest Institute: A bill (HR 3260) to make the section 198 tax expensing program permanent has been introduced by Representatives Xavier Becerra (D-CA) and Paul Ryan (R-WI). The legislation makes environmental cleanup costs incurred by private companies fully deductable in the year they are incurred. A 2007 Congressional Research Service Report on the tax incentive found that the program was not fully utilized because it keeps lapsing, only to be rescued at the last moment:

“This on-again, off-again history creates uncertainty regarding its future availability, and makes it difficult for developers to plan, particularly for large-scale, multi-year projects. Even smaller projects can encounter unforeseen delays, pushing them past the provision’s end date, and causing forfeiture of anticipated benefits. For an economically marginal project, this uncertainty could be enough to decide against going forward. One state official mentioned that at times he was unsure of the incentive’s status, which made him reluctant to recommend it.”

The bill does not address the “recapture provision.” For more info on the tax incentive, go to the EPA website.

Waterfront Brownfields Bill Introduced in U.S. House

From the Northeast-Midwest Institute: Representative Louise Slaughter (D-NY) has introduced HR 3518 to establish a Waterfront Brownfields Program. The proposal would establish a new carve-out of EPA brownfields funds dedicated to the assessment and cleanup of waterfront sites, including “integration with water-quality improvements, green infrastructure, remediation and management of sediments, or flood damage prevention.” The bill authorizes funding for waterfront brownfields at $55 million annually or 25% of all brownfields site assessment and cleanup funding. The bill also authorizes the creation of a federal task force on waterfront brownfields revitalization.

HUD Contamination Policy Revised to Allow Risk-Based Cleanups

From the Center for Public Environmental Oversight: The United States Department of Housing and Urban Development (HUD) has issued a revised contamination policy for HUD-assisted multi-family housing projects. The new policy was transmitted on September 18 to FHA-approved multi-family mortgagees, as well as local grantees, HUD centers and field offices. HUD’s previous contamination policy was characterized by brownfields practitioners as “dig-to-clean” or complete removal of contamination to de minimis levels. The revised policy allows “incomplete removal of contamination” when it can be demonstrated that “costs are deemed to be exorbitant and/or the feasibility deemed impractical for remediation of on-site contamination to de minimis levels.” Risk-based cleanups must be reviewed by HUD, approved by voluntary cleanup or oversight programs, and meet EPA and ASTM protocols. For more information, visit http://www.hud.gov/offices/hsg/mfh/map/mapguide/chap09.pdf.

MI Reforms Brownfield Cleanup Program
By John V. Byl and Troy Cummings, Warner Norcross & Judd LLP

In August, the Michigan State Senator Jason Allen, chair of the Economic Development and Regulatory Reform Committee, introduced draft legislation that would significantly overhaul Michigan’s cleanup program.

Key provisions of the legislation include:

• Creation of a clear and attainable closure process.
• A review panel consisting of qualified scientists appointed by the Governor and the legislature would review closure requests.
• The MDEQ would have more flexibility to consider risk-based solutions.
• Decision-making would be based on realistic and not hypothetical risks.
• Deadlines would be imposed for decision-making by the MDEQ.
• The current causation-based liability standard for owners and operators, including the baseline environmental assessment (BEA) process, would be maintained.
• Liability exemption would be added for transfers among affiliates without the need to go through the BEA process.
• The State cleanup criteria cannot be more stringent than the federal cleanup criteria.

Michigan DEQ and DNR to Merge, NBA Treasurer to Lead Transition
By Jared Belka and John Byl, Warner Norcross & Judd, LLP

Michigan’s environmental and brownfields programs are currently administered by the Michigan Department of Environmental Quality (DEQ). As described more fully below, Governor Jennifer Granholm issued Executive Order 2009-45 (the “Order”) on October 8, 2009 abolishing the DEQ and Department of Natural Resources (DNR), and consolidated the two departments into a new department, the Department of Natural Resources and Environment (DNRE).

Subject to the 60-day review period under the Michigan Constitution, the Order is effective January 17, 2010 and the Governor has directed departments and agencies affected by the consolidation to begin preparations for its implementation. Until a director of the new department is appointed, the Governor has appointed Bruce Rasher as the transition manager who will oversee the consolidation efforts. Rasher, formerly of Consumers Energy, is director of operations, asset repositioning, with CB Richard Ellis Inc. He is also treasurer of the National Brownfield Association.

The Order delegates Rasher with the task of proposing implementations to achieve the following: 1) an organizational structure for the new department; 2) a transformation to focus on environmental integrity rather than concentrating on permitting; 3) a consolidation/elimination of offices and building space; 4) elimination of redundancies in program responsibilities and services; 5) elimination of archaic or obsolete laws/regulations; 6) online interactions between the department and citizens; and 6) elimination, reduction, or reconfiguration of existing contracts, boards, commissions and committees to achieve greater efficiencies.

Brownfield Redevelopment is Part of EPA Report on Fighting Climate Change

Brownfield redevelopment and “reusing formerly contaminated lands for renewable energy development” are among the activities the EPA says can help fight climate change in a new report, “Opportunities to Reduce Greenhouse Gas Emissions through Materials and Land Management Practices.” Among its findings, the report states that 16 to 20% of emissions are associated with land management policies. The report goes on to note that “research has shown that brownfields redevelopment, as a component of urban development, reduces local vehicle miles traveled and is associated with lower building energy use, both of which lead to improvements in urban air quality in addition to GHG reductions.”

Dodd Introduces Livable Communities Act; Brownfields Would Benefit
By Charlie Bartsch, senior fellow, ICF International

On August 6, Sen. Chris Dodd (D-CT), chairman of the Senate Banking, Housing and Urban Affairs Committee introduced S 1619 -- the Livable Communities Act -- to authorize more than $4 billion for grant and planning programs (beginning in 2011) that focus on sustainable community strategies. Brownfield redevelopment is listed as one of the activities that these programs would support.

While it is important to remember that this proposal has just started down a long (and potentially contentious ) path, especially in the context of appropriations, it does reflect key Obama administration urban policy goals. Key funding will flow through a proposed “Challenge Grant” program, available only through regional councils and a consortia of local governments, not individual local governments or private entities. Challenge Grant funding could be used to implement a range of sustainable-type transportation, housing, energy and economic development efforts carried out across policy and governmental jurisdictions as part of a comprehensive regional plan. Brownfield redevelopment is specifically mentioned as one of a dozen activities -- along with transit-oriented development, energy-efficiency retrofits, land banking and affordable housing preservation -- that could “promote livable communities” in both large cities and on small town main streets. $3.75 billion is authorized over the three years of the program.

The bill also authorizes $100 million annually for competitive comprehensive regional planning grants; winning recipients must show a commitment to eight sustainability factors, such as “...improving environmental quality, including...the redevelopment of brownfields.”

Treasury Dept. Guides Renewable Energy Project Developers to Stimulus Funds

From greenbiz.com: The Treasury and Energy departments have released eagerly awaited guidance to help renewable energy project developers apply for the roughly $3 billion in funds from the American Recovery and Reinvestment Act. Read more.

Stimulus Update: Treasury Dept. Releases Recovery Zone Bonds
By Charlie Bartsch, senior fellow, ICF international

Stimulus funding is rapidly being allocated, project applications have been approved, and construction has begun. On June 12, the “next wave” of activity kicked off, when the U.S. Treasury announced allocations of $25 billion in tax-advantaged recovery zone bonds authorized in the stimulus. This included $10 billion for recovery zone economic development bonds (tagged RZEDBs by Treasury), and facility bonds (RZFBs).

In general recovery zones are areas designated by states and local governments as having significant poverty, unemployment, high home foreclosure rates, or general distress. RZEDBs can be used to finance capital and working capital needs that promote development or related economic activity; RZFBs can finance most types of property eligible for depreciation (except for residential rental property and specific facilities such as golf courses) used in a recovery zone operation. The $25 billion in bonds must be issued before January 1, 2011.

Treasury’s June 12 allocations to states were based on 2008 job losses; each state received at least $90 million in RZEDBs and $135 million in RZFBs. The big “winners” include states grappling with the highest unemployment rates, and often the most abandoned facilities and brownfield problems: California ($2.02 billion for both bond programs); Illinois ($1.67 billion); Michigan ($1.93 billion); and Ohio ($1.06 billion). Many smaller states, such as Vermont, Delaware and North Dakota, received the minimums, but Texas did too.

ARRA further stipulates that each state must reallocate to counties and cities greater than 100,000 in population, also based on relative job losses within the state. States are just starting their own reallocation determinations.

(NBA members, read Charlie’s full Federal Legislative Update, including the latest news about brownfield appropriations, in your monthly NBA e-newsletter. Not receiving the newsletter? Click here to become a member or contact us at 224-567-6790, ext. 112 or membership@brownfieldassociation.org.)

Brownfields Tax Credit Introduced in U.S. House

From the Northeast-Midwest Institute: Representatives Michael Turner (R-OH) and Betty Sutton (D-OH) have introduced H.R. 1724 to create a brownfields tax credit for up to 50 percent of qualified remediation expenditures, including site testing, remediation of hazardous substances, and demolition, if the demolition costs are connected to cleanup.  There would be a $1 billion cap on the program, and credits would be distributed to states proportionately according to population.  The states would choose the sites to receive the credits, but they must use certain criteria including poverty, local enterprise zone designation, whether the site is in the Central Business District, the extent of the remediation, and the employment that will be generated by the redevelopment.

Maryland Implementing Disclosure Requirements for Hazardous Substances

From the Northeast-Midwest Institute: Maryland is now implementing a disclosure law passed in 2008 session of the Maryland General Assembly. The new law requires that the Department of the Environment be notified of any site assessment sampling that indicates contamination above certain thresholds.

BROWN & GREEN NEWS

ASTM and EPA Moving Closer to National Green Cleanup Standards

ASTM International, together with the EPA’s Office of Solid Waste and Emergency Response (OSWER), are ramping up their efforts to develop a national standard for green remediation of contaminated sites. On October 22, ASTM will hold the kick-off meeting of its E50.04 Green Cleanup Task Force, a group of public and private-sector stakeholders, to review OSWER’s Principles for Greener Cleanups that will be the framework for ASTM standards. According to the OSWER web site, “use of the standard will promote resource efficiencies and technology innovation resulting in measurable improvements to human health, the environment and communities.” The standard will be implemented on a voluntary basis.

EPA first introduced The Green Cleanup Standard Initiative at the NBA’s BIG DEAL summit last March. Since then, OSWER and the initiative co-sponsors, EPA Region 3’s Hazardous Site Cleanup Division and Land & Chemicals Division, have worked through a consensus process consisting of outreach, a public comment period and a federal and state cross-program workgroup to develop the green cleanup principles, and provide recommendations on the process for developing the national standard. EPA also identified ASTM as the best organization to ultimately develop a private-sector standard.

Meanwhile, the Superfund Remedial Program has developed its own Green Remediation Strategy “to reduce GHG emissions and other negative environmental impacts that might occur during remediation of a hazardous waste site or non-time critical removal action.” Developed by a workgroup of EPA headquarters and regional staff, the strategy is an initial effort to outline key activities that can be undertaken to promote green cleanups. EPA is accepting comments on the strategy via email at superfund_green_remediation@epa.gov, through November 10.

New Interior Offices to Expedite Permitting for Renewable Energy

From E&E News: The Interior Department will open new permitting offices in four states and place smaller permit teams in five other states to expedite renewable-energy projects on Bureau of Land Management (BLM) lands, Interior Secretary Ken Salazar announced. In addition to Renewable Energy Coordination Offices in Arizona, California, Nevada and Wyoming, Interior will place renewable energy teams in Colorado, Idaho, New Mexico, Oregon and Utah.

BLM has a backlog of 200 solar energy applications and more than 25 wind project applications in western states, plus 200 locations where applicants want to begin site testing for wind projects, the department told E&E News.  With $41 million from the economic stimulus package, Interior also will be able to complete the reviews and permits for several new transmission projects so they can be ready for construction by 2010.