Federal Brownfields Legislation Stalls
 
October 19, 2001
 
Amy L. Edwards- Washington

As this newsletter went to print, H.R. 2869, the Small Business Liability Relief and Brownfields Revitalization Act, stalled just as it was nearing passage by the U.S. Congress.

The bill originally was scheduled for markup on September 11, when the tragic events in New York, Washington and Pennsylvania unfolded. A further hitch developed on September 24, when Democrats threatened to withhold support for the bill unless the "prevailing wage" provisions of the Davis-Bacon Act were required to apply in all states (19 states currently do not have prevailing wage statutes).

EPA has estimated that there are 500,000 brownfields sites nationwide. Brownfields sites are those where expansion, redevelopment or reuse may be complicated by the presence or potential presence of hazardous substances, pollutants or contaminants.

Under the bill, many types of sites DO NOT constitute brownfields sites, including:

• any site listed on the NPL

• any site undergoing a removal action

• any facility subject to a unilateral administrative order, court order, administrative order on consent or judicial consent decree

• any facility that has received a permit under the Clean Water Act, the Safe Drinking Water Act, the Solid Waste Disposal Act or the Toxic Substances Control Act

• any site undergoing corrective action or subject to closure under RCRA

• any site where there has been a release of PCBs

H.R. 2869, which combines elements of S. 350 (passed by the Senate in April 99-0) and H.R. 1831 (passed by the House in May 419-0), otherwise enjoys widespread support. It would provide the following types of financial incentives and exemptions from liability:

Financial Assistance

• $250 million per year will be provided for the next five years, for a total of $1.25 billion, to fund brownfields cleanups

• $150 million per year of these funds will be used to assess sites, $50 million per year will be used to cleanup sites, and the other $50 million will be used to cleanup sites contaminated with petroleum products

• A local government may use up to 10% of the grant to establish a program to (i) monitor health, or (ii) monitor and enforce institutional controls

Exemptions from Liability

• Persons who otherwise would be liable at an NPL site, based solely upon their status as a generator or transporter of hazardous substances, and who contributed less than 110 gallons of liquid materials or less than 200 pounds of solid material, would be exempt from liability where disposal, treatment or transport occurred prior to April 1, 2001.

• Small businesses (i.e., those with fewer than 100 full-time employees); owners, operators and lessees of residential property; and non-profit entities would not be liable for municipal solid waste disposed of at an NPL site.

• In a contribution action brought by a non-governmental entity under either Section 107 or 113 of CERCLA, the burden would be on the party bringing the action to establish that the foregoing exemptions do not apply. If the party is unsuccessful because the exemption in fact applies, it shall pay the defendant’s reasonable defense costs.

• Owners of contiguous properties who can show by a preponderance of the evidence that they did not cause or contribute to the contamination, who conducted "all appropriate inquiry," and who complied with numerous other requirements, shall be exempt from liability.

• Bona fide prospective purchasers generally shall be exempt from cleanup requirements, but the government may impose a lien (not in excess of the increase in fair market value) on their property to recover any unrecovered response costs.

Other

• Brownfields funds can be used to encourage the development of parks, greenways and recreational areas.

• Assessments and cleanups generally will be conducted under state authority and oversight.

• EPA reserves the right to intervene in the event of an "imminent and substantial endangerment."

• EPA is required to submit a report on the status of all brownfields sites within three years.

Administrative Actions

In early October, the Environmental Protection Agency announced that it was accepting applications for FY 2002 National Brownfields Assessment Pilot Grants. These two-year grants of up to $200,000 are provided to states and localities to assess or inventory contaminated sites. Additional grants of up to $50,000 may be awarded to assess contaminated sites that could be used for green space purposes (e.g., parks, playgrounds, trails, etc.). Applications must be postmarked no later than December 10, 2001, and will be awarded in April 2002. Current pilots also may apply for supplemental assistance of up to $150,000. These applications must be postmarked by November 26, 2001, and also will be awarded in April 2002.

In September, the Environmental Protection Agency announced that it was accepting applications for FY 2002 Brownfields Cleanup Revolving Loan Fund Pilots. Applications are due by November 15, 2001. EPA expects to select up to 25 new pilots (with funding of up to $1,000,000 per applicant).

Finally, EPA will be hosting its second workshop on institutional controls on October 24-26 in Santa Fe. Holland & Knight attended the first workshop last February and has been invited to participate in the October workshop as well.

EPA is in the process of issuing guidance and establishing databases to improve the implementation, monitoring and enforcement of institutional controls at brownfields and other types of sites.

Holland & Knight has been involved in the development of, and training associated with, the ASTM E 2091 guidance entitled Standard Guide on the Use of Activity and Use Limitations, Including Institutional and Engineering Controls. Holland & Knight also moderated a program on institutional controls at Brownfields 2001 in Chicago.

For further information about Holland & Knight’s Brownfields Initiative or ASTM E 2091, contact Amy L. Edwards at 202-457-5917 or at aedwards@hklaw.com.