Illinois Adopts Brownfield Site Restoration Regulations
 
April 15, 2004
 
Mark J. Steger- Chicago

On January 22, 2004, the Illinois Pollution Control Board adopted regulations establishing standards and procedures for administering Illinois’ Brownfield Site Restoration Program (BSRP). The BSRP allows a person to be reimbursed for the cost to voluntarily remediate contamination at “abandoned” or “under-utilized” properties if the remediation will lead to a “net economic benefit” to Illinois. Under the statute, priority is given to sites located in areas with high levels of poverty, where the unemployment rate exceeds Illinois’ average, where an enterprise zone exists, or where the area is otherwise economically depressed.

The rules are part of Illinois’ voluntary Site Remediation Program (SRP). To be eligible for reimbursement under the BSRP, the person seeking reimbursement (Remedial Applicant, or RA) must not have materially caused or contributed to the contamination. Also, the Illinois EPA must have issued a “No Further Remediation” letter under the SRP for the property and the letter must be recorded against the property.

As a condition of reimbursement, the RA must have received a determination from the Department of Commerce and Economic Opportunity (DCEO) that the site qualifies as either an abandoned property or an under-utilized property. Also, the DCEO’s determination will indicate the net economic benefit to Illinois based on certain factors, including capital investment and job creation. Finally, the DCEO will set forth the maximum amount the RA can be reimbursed.

The amount of reimbursement is subject to available funding each fiscal year and covers remediation costs that are reasonable as determined by the Illinois EPA. There is a reimbursement cap, however. The RA cannot be reimbursed more than the lowest of $750,000 in remediation costs, 20 percent of the capital investment at the site, or the net economic benefit to Illinois.

As indicated above, only abandoned or under-utilized properties are eligible for this reimbursement program. Abandoned property includes: (i) property that was previously used for, or that has the potential to be used for, commercial/industrial uses and that has been reverted to the ownership of the State, county or municipal government by donation, purchase, tax delinquency, foreclosure, default or settlement; or (ii) privately owned property that has been vacant for a period of not less than three years from the time an application is made to the DCEO.

Under-utilized property includes property of which less than 35 percent of the commercially usable space and improvements thereon are used for their most commercially profitable and economically productive uses.

The BSRP provides yet another incentive for private and public entities to address environmental concerns of environmentally impacted property located in Illinois by means of a reimbursement program. Such incentives allow for the redevelopment of certain properties that might not otherwise have been redeveloped, while at the same time providing an economic benefit to Illinois.

For more information, e-mail Mark J. Steger at mark.steger@hklaw.com, or call toll free, 1-888-688-8500.