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REAUTHORIZATIONl OF THE

BROWNFIELDS PROGRAM SUCCESSES AND FUTURE CHALLENGES

(109–77)

HEARING

BEFORE THE

SUBCOMMITTEE ON

WATER RESOURCES AND ENVIRONMENT

OF THE

COMMITTEE ON

TRANSPORTATION AND

INFRASTRUCTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

JUNE 8, 2006

Printed for the use of the

Committee on Transportation and Infrastructure

(
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-Chair

SHERWOOD L. BOEHLERT, New York

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

WAYNE T. GILCHREST, Maryland

JOHN L. MICA, Florida

PETER HOEKSTRA, Michigan

VERNON J. EHLERS, Michigan

SPENCER BACHUS, Alabama

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

GARY G. MILLER, California

ROBIN HAYES, North Carolina

ROB SIMMONS, Connecticut

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

TODD RUSSELL PLATTS, Pennsylvania

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

TOM OSBORNE, Nebraska

KENNY MARCHANT, Texas

MICHAEL E. SODREL, Indiana

CHARLES W. DENT, Pennsylvania

TED POE, Texas

DAVID G. REICHERT, Washington

CONNIE MACK, Florida

JOHN R. ‘RANDY’ KUHL, JR., New York

LUIS G. FORTUN ̃ O, Puerto Rico

LYNN A. WESTMORELAND, Georgia

CHARLES W. BOUSTANY, JR., Louisiana

JEAN SCHMIDT, Ohio

JAMES L. OBERSTAR, Minnesota

NICK J. RAHALL, II, West Virginia

PETER A. DEFAZIO, Oregon

JERRY F. COSTELLO, Illinois

ELEANOR HOLMES NORTON, District of

Columbia

JERROLD NADLER, New York

CORRINE BROWN, Florida

BOB FILNER, California

EDDIE BERNICE JOHNSON, Texas

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

ELIJAH E. CUMMINGS, Maryland

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

LEONARD L. BOSWELL, Iowa

TIM HOLDEN, Pennsylvania

BRIAN BAIRD, Washington

SHELLEY BERKLEY, Nevada

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

JULIA CARSON, Indiana

TIMOTHY H. BISHOP, New York

MICHAEL H. MICHAUD, Maine

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

BRIAN HIGGINS, New York

RUSS CARNAHAN, Missouri

ALLYSON Y. SCHWARTZ, Pennsylvania

JOHN T. SALAZAR, Colorado

JOHN BARROW, Georgia

(II)
SUBCOMMITTEE ON WATER RESOURCES AND ENVIRONMENT

JOHN J. DUNCAN, JR., Tennessee, Chairman

SHERWOOD L. BOEHLERT, New York

WAYNE T. GILCHREST, Maryland

VERNON J. EHLERS, Michigan

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

GARY G. MILLER, California

HENRY E. BROWN, JR., South Carolina

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

JIM GERLACH, Pennsylvania

TOM OSBORNE, Nebraska

TED POE, Texas

CONNIE MACK, Florida

LUIS G. FORTUN ̃ O, Puerto Rico

CHARLES W. BOUSTANY, JR., Louisiana,

Vice-Chair

JEAN SCHMIDT, Ohio

DON YOUNG, Alaska

(Ex Officio)

EDDIE BERNICE JOHNSON, Texas

JOHN T. SALAZAR, Colorado

JERRY F. COSTELLO, Illinois

GENE TAYLOR, Mississippi

BRIAN BAIRD, Washington

TIMOTHY H. BISHOP, New York

BRIAN HIGGINS, New York

ALLYSON Y. SCHWARTZ, Pennsylvania

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

RUSS CARNAHAN, Missouri

NICK J. RAHALL, II, West Virginia

ELEANOR HOLMES NORTON, District of

Columbia

JOHN BARROW, Georgia

JAMES L. OBERSTAR, Minnesota

(Ex Officio)

(III)

(V)

CONTENTS

TESTIMONY

Page

Bodine, Hon. Susan Parker, Assistant Administrator, Office of Solid Waste

and Emergency Response, U.S. Environmental Protection Agency, Washington, D.C. ................................................................................................................ 11

Magill, John M., Deputy Director, Ohio Department of Development, Columbus, Ohio ............................................................................................................... 11

Manning, Terry, Senior Planner and Brownfields Coordinator, South Florida

Regional Planning Council, Hollywood, Florida ................................................ 11

Meyer, Peter B., Director of Applied Research, Institute for Public Leadership

and Public Affairs, Northern Kentucky University, Highland Heights, Kentucky ...................................................................................................................... 11

Philips, Jonathan, Senior Director, Cherokee Investment Partners, Raleigh,

North Carolina ..................................................................................................... 11

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Carnahan, Hon. Russ, of Missouri ......................................................................... 46

Costello, Hon. Jeffry F., of Illinois ......................................................................... 47

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Bodine, Hon. Susan Parker ..................................................................................... 32

Magill, John M ......................................................................................................... 49

Manning, Terry ........................................................................................................ 55

Meyer, Peter B. ........................................................................................................ 65

Philips, Jonathan ..................................................................................................... 77

SUBMISSION FOR THE RECORD

Bodine, Hon. Susan Parker, Assistant Administrator, Office of Solid Waste

and Emergency Response, U.S. Environmental Protection Agency, Washington, D.C., responses to questions from Rep. Pascrell ........................................ 42

ADDITION TO THE RECORD

U.S. Conference of Mayors, Cherokee Investment Partners, LLC, International City/County Management Association, International Council of

Shopping Centers, Local Initiatives Support Corporation, National Association of Industrial & Office Properties, National Association of Local Government Environmental Professionals, Northeast-Midwest Institute, The Trust

for Public Land, letter, June 8, 2006 .................................................................. 86

(1)

REAUTHORIZATION OF THE BROWNFIELDS

PROGRAM—SUCCESSES AND FUTURE CHALLENGES

Thursday, June 8, 2006

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPOR- TATION AND INFRASTRUCTURE, SUBCOMMITTEE ON

WATER RESOURCES AND ENVIRONMENT, WASHINGTON, D.C.

The subcommittee met, pursuant to call, at 10:00 a.m., in room

2167, Rayburn House Office Building, Hon. John J. Duncan, Jr.

[Chairman of the subcommittee], presiding.

Mr. DUNCAN. I want to first welcome everyone to our hearing

today on the reauthorization of the Brownfields Program at the Environmental Protection Agency.

As manufacturing and commercial companies relocate or close

their operations, they sometimes leave behind abandoned factories,

salvage yards, and warehouses. Some of these sites may contain residual contamination with hazardous substance or other pollutants.

These potentially contaminated former industrial and commercial

sites are the brownfields that are the subject of our hearing today.

Brownfields drive down property values and tax revenues, and

are a major blight in many of our cities and towns. There are hundreds of thousands of brownfields sites in America. While some of

them exist in rural areas, most are in our cities, close to highways,

rail lines, and ports. They are prime locations for redevelopment

except for the fact that the land may be contaminated.

In the past, no one wanted to invest in cleaning up these sites

because they feared the environmental liability under statutes such

as the Comprehensive Environmental Response, Compensation,

and Liability Act, also known as Superfund. As a result, many developers turned to undeveloped green spaces for new investments.

It became clear that it made good economic and environmental

sense to remove legal hindrances and support State, local, and private efforts to clean up and redevelop brownfields. So, through this

Committee’s efforts, Congress passed, and the President signed, the

Small Business Liability Relief and Brownfields Revitalization Act.

That law provided legislative authority for the Brownfields Program, including grants for site assessments and cleanup. The law

also clarified liability associated with brownfield sites and helped

provide greater protections for innocent parties who want to clean

up and redevelop brownfields properties.

Title II of the legislation was the Brownfields Revitalization and Environmental Restoration Act of 2001, which authorized $200 million per year for Brownfields Program grants and $50 million per
2

year to support State and tribal response programs. The grants are

issued by EPA each year to communities and tribes for site assessments and revolving loan funds and direct cleanups.

With the help of these grants and the law’s liability protections,

communities can transform eyesores into safe and clean lands for

new businesses, residences, public parks, or green space. The EPA

estimates that the Brownfields Program has leveraged more than

$8.2 billion in private investment and helped create more than

37,000 jobs. In addition, cleaning up brownfields may help control

urban sprawl by making former industrial and commercial sites

available for new development, thereby taking some of the pressure

off undeveloped natural areas on the outskirts of cities.

I think the Brownfields Program has been a very successful government program, but like any good program, there may be ways

to make it better. The authorization for appropriations for the

Brownfields Program will expire this year. As we consider reauthorization of the Program, we should look for opportunities to

make improvements. Turning brownfields back into usable property involves the efforts of the Environmental Protection Agency,

State and local governments, private investors, and non-governmental organizations.

We have assembled a panel of experts from each of these entities

who will help us understand how this program has been working

and how we might want to improve it. I appreciate all of the witnesses taking time from their very busy schedules to be here with

us this morning, and I look forward to hearing their testimony.

Now let me turn to my good friend, the Ranking Member of the

Subcommittee, Ms. Johnson, for her opening statement.

Ms. JOHNSON. Thank you very much, Mr. Chairman. This morning the Subcommittee meets to hear testimony on the successes

and future challenges of the Environmental Protection Agency’s

Brownfields Program and reauthorization of the Brownfields Revitalization and Environmental Restoration Act of 2001.

I have a deep appreciation for our subject matter this morning,

as I have been able to witness firsthand the many positive effects

brownfields redevelopment affords. In the heart of my congressional district and less than four blocks from my district office lies

a 65 acre site known as the Victory Corridor. Less than five years

ago, the former rail yard and utility site and an old abandoned

packing house existed as a contaminated brownfield.

However, thanks to the assistance of the State’s voluntary cleanup program and the partnership with EPA, the City of Dallas and

a private developer, the inner city property has been completely remediated and placed back on the city’s tax rolls. The 65 acre site

is now home of the American Center and home of my beloved Dallas Mavericks, and a mixed use development project that has transformed a formerly economically depressed area into a dynamic one.

With results like these, it is no surprise that the Brownfields

Program commands bipartisan enthusiasm and support. Conceived

and initiated in the Clinton administration and legitimately enacted in the Bush administration, the program has proven to be a

necessary catalyst in revitalizing underutilized sites and preserving

undeveloped areas.
3

Brownfields redevelopment programs are critical to our Nation’s

communities to grow stronger and smarter, while allowing them to

recycle our Nation’s land to promote continued economic growth

and a cleaner environment. As President Bush said when signing

the Small Business Liability and Relief and Brownfields Revitalization Act, this is a good jobs creation bill.

Congress authorized, and the President supported, a funding

level of $200 million annually for the site assessment cleanup efforts. Yet, the consistent and dramatic underfunding of the

Brownfields Program by the President and the Congress leave

much to be desired in terms of corresponding appropriations. In

fact, the appropriations for brownfields assessment cleanup peaked

at $97.7 million in fiscal year 2002, and only $89 million in this

year’s House passed appropriations bill.

Last year, EPA received 656 proposals for funding that passed its

threshold requirements for eligibility. Unfortunately, EPA did not

fund 55 percent of these proposals. Historically, EPA funds only

about one-third of the requests. A fully funded program could fulfill

nearly all of these proposals. EPA purports that the Brownfields

Program has leveraged more than 37,000 jobs, yet the program has

never received even one-half of its authorized funding.

With job creation in the most recent quarter falling well behind

expectations, one can only speculate what effect a fully funded program could have on the job market and the economy at large. Unfortunately, this appears to be another program where great promise is being left unfilled by inadequate funding.

Mr. Chairman, I look forward to the testimony of our witnesses,

and I want to thank you for being here. As evidenced by the GAO’s

sheer number of estimated brownfields throughout the Country,

there is a clear and evident need for a strong flexible, accountable,

and adequately funded Brownfields Program. The time has come to

renew our resolve and desire toward stimulating growth across our

Nation, and as we can begin by recognizing, targeting, and cleaning

up the more than 500,000 estimated brownfields across America,

when left only, only frustrate the plans and hopes for our communities and neighborhoods.

Thank you, Mr. Chairman. I yield back.

Mr. DUNCAN. Thank you very much.

Mr. Gilchrest.

Mr. GILCHREST. Thank you, Mr. Chairman. I appreciate the

hearing and all the witnesses that are here today to give us some

insight into creating—I don’t want to use the word ‘‘expanding,’’ because people don’t like to expand Federal programs necessarily, but

the idea that we can get into this program, look at some ingenious

ways to make it work better on the local level by creating and continuing this partnership between the Federal Government and the

local level, and the idea that the potential that we could use besides assessments, but demolition can be included into the process

of understanding how we can make better use of brownfields.

The fundamental issue here, though, I think, Mr. Chairman, is

that we are going to create a program where there are other options. You don’t have to take the ag land, you don’t have to take

the open space. Let us make that connection between the local gov-
4

ernment, who has, really, virtually total authority over land use decisions, and create various options that they can think about.

So we are creating options, offering opportunities for human

thinking, the thought process, which we don’t always have that

much of any more because of Blackberries and strawberries and

whatever you call those things, and cell phones and all these other

things. Just to sit back, creating options, time to think about it so

we can make much more valuable use out of this Federal program.

Thank you.

Mr. DUNCAN. Thank you very much.

Mr. Pascrell.

Mr. PASCRELL. Thank you, Mr. Chairman and Ranking Member.

Mr. Chairman, I am puzzled as to why we have not moved on this

legislation, certainly through no loss of efforts on your part and the

Ranking Member. You have been out front on water resources and

on the issue of brownfields. You have been out front on the issue

of sewer separation, SEOs, not sexy topics to talk about, but these

are issues that municipalities throughout the United States struggle with day in and day out, and you have been strong on these

issues.

Brownfields legislation costs money, but the data and the science

all show that this is a true economic stimulant. Jobs are created

when this partnership moves forward in a forceful manner. Property that has been abandoned for many, many years that we drive

by, an old city that I am from in New Jersey comes to life; people

live there, people work there. And when I have to make a comparison, this is the kind of comparison I am making, judgment or not.

And I am sure you wouldn’t agree with the comparison, but, nonetheless, this is the one I make.

If I have to make a judgment into putting more money into this

program that has worked, as Clean Air Act has worked, as Clean

Water Act has worked, if I have to make a comparison and a judgment between doing that and giving a tax cut to Jason Giombi and

Barry Bonds, it is a very easy decision for me, because there is absolutely no scientific evidence that the tax cuts to those people

making more than $1 million have anything to do with job creation

in the United States. And you can pontificate all you want, I have

not seen any evidence to that effect. But I have seen evidence, I

have seen evidence on this issue.

Now, all of these pieces of land throughout the United States of

America add up to about 200,000 acres, so this is pretty significant.

If there were 200,000 acres on fire in California this afternoon,

there would be a major problem there. These pieces of property are

literally on fire. They are not only barren, they are not only barren,

but they may be causing major problems to the very aquifer health

system within the community. And they are not giving anybody a

place to live, particularly in densely populated areas, and they are

not giving opportunities for people to work; and in certain parts of

the Country, that is a major interest as well.

So we have these 1200 brownfield sites. In my district alone,

there are 1200 sites. Twelve hundred sites. My district covers two

northern New Jersey counties. And, as I said, they are abandoned.

They have been often industrial properties. In my district, this is
5

the oldest industrial area in the entire Nation, ourselves, as well

as Lowell, Massachusetts.

Hazardous substances generated from many years of industrial

activities contaminate these properties. As a former mayor, I can

tell you that redevelopment is the only type of growth that is possible any longer in our urban communities. Even though our industrial base has changed over time, and we have debated that in

other areas, since we have given away our infrastructure, our manufacturing infrastructure.

We have surrendered it to the other side, to the other ocean or

to that ocean. We have surrendered it under the belief that service

jobs would supplant it. And where in God’s name is the evidence

for that? Particularly service jobs that we do create create jobs that

pay far less money and provide less benefits. Ah, there is the twist.

That sounds good in our efforts to protect the American worker.

So even though our industrial base has changed, these properties

in the district I am referring to, the 8th district in New Jersey—

and it could be said for any district—they are valuable assets.

And this is exactly how you have looked at it, Mr. Chairman, as

a valuable asset. What do we do with that asset even though it

may be a tainted asset, even though there may be some problems

with that particular public asset? It could be a public asset even

though it might be some of these properties are privately owned.

And it has the potential to become magnets for the revitalization

of our cities. Nobody ever talks about our cities any longer. Have

you heard either side of the aisle, Democrats or Republicans, talk

about the major cities of this Country? My party doesn’t talk about

it, in our attempt to be a global party, in our attempt not to be a

fringe party. We don’t talk about it anymore either. So everything

must be wonderful in the cities of America, just moving along here.

Brownfields development can have a multitude of positive effects

on these most troubled areas of our Country, where most of the

people live. Oh, yeah, I forgot about that. They can help to create

jobs; they can improve the quality of the environment; they can

spur smart growth and preservation of open space. There are so

many success stories from our cities and suburbs that are being

heard across the Country.

The $250 million annually that we authorized; we know how

much we appropriate. We don’t do what we say, Mr. Chairman.

And you have done everything in your power. You have even had

sweat on your brow. And I wonder how, when you go home at

night, what you think about all the effort that you put in sincerely

and then the result, and then have to deal with the magnitude of

irrelevant materials that we vote on in the Senate or the House.

At this current funding level, Mr. Chairman, only about one-third

of the eligible applicants can receive any money at all, and that is

why I am mostly concerned.

So I want to just end, if you may, if you give me the luxury. I

have three questions just to throw out which I think are significant

to the discussion today, and if you would allow me to provide those

questions:

What about allowing communities to apply for assessment and

cleanup grants with one application, less paperwork, and mean it?
6

And should the Congress consider making it easier for communities to apply for cleanup for properties that they do not yet own

at the time of the application? I think that would be helpful, but

what do you think?

And would making assessment grants, in addition to cleanup

grants, available to private non-profit entities, in addition to municipalities, be beneficial in terms of encouraging additional redevelopment of brownfields?

Mr. Chairman, thank you for your courtesies.

Mr. DUNCAN. Well, Mr. Pascrell, thank you very much. I can tell

you that I spent five and a half seasons as bat boy for a minor

league baseball team. I worked the first season and a half for free

and the next four seasons for $1.50 a game. I can assure you that

I have never once worried about Jason Giombi or Barry Bonds, or

their salaries. And I can tell you that I am not concerned at all

about giving them tax cuts, but I am concerned about trying to do

something with this very small program.

But I liked your statement so much I have allowed you give the

longest statement that has ever been made in this Subcommittee,

I believe.

[Laughter.]

Mr. DUNCAN. Thank you very much.

Mr. Miller.

Mr. MILLER. Thank you, Mr. Chairman. And, Chairman Duncan,

I really appreciate your hosting this hearing today. This is an

issue. I have been a developer for 35 years. It is really, really important, being a former mayor. The cleanup and redevelopment of

brownfield sites is really pretty important in most every community we face out there.

The reports I have read, it appears that there is easily over

450,000 brownfield sites throughout this Country, and they are basically there because of contaminated products that were produced

on their chemical compounds or hazardous substances that were

used on the property have left them where they are at. And they

really represent more than just eyesores to these communities;

they threaten their groundwater supply, they cost local communities jobs and revenues.

And they do, in some way, attribute to urban sprawl because we

have sites within communities that have infrastructure in place

that would accommodate various uses, whether it be a community

center, a park, you know, apartments, condominiums, homes, commercial, whatever, that are not being utilized, they are just sitting

there; and we are taking and advancing development in areas that

really don’t have the infrastructure necessary like some of these

brownfield sites do.

To build their economies and attract employers, increasing numbers of States and local governments are working to clean up and

redevelop these sites. The largest obstacle they face in many cases

is a lack of capital needed up front to cover the essential early

stage activities such as site assessment, remediation planning, and

actual cleanup of the sites. Private financiers really are unwilling,

in many cases, to put the money forward to do that, to take the

project through full recycling and redevelopment stages. Local mu-
7

nicipalities and local leaders find themselves confronted with this

complex task of redevelopment because of a lack of funding.

As we work on this EPA Brownfields Program, I think it is important to ensure the Program focuses on assessing and cleaning

up brownfield sites. Some advocate that the EPA Brownfields Program should include economic development, which HUD is doing

currently, and I really have a problem with that. I mean, you approach a cleanup from a different perspective than HUD approaches it. HUD looks at redevelopment on the development side,

and they look at redevelopment, they look at economic issues and

how to basically go in and help communities up front with early

stage funding to get the planning and those type of things going.

Some have tried repeatedly to eliminate the funding for the

BEDI Program and look at funding that through EPA, and I think

Congress, in recent years, has made a very strong statement. We

have expressed an overwhelming support for the BETI Program in

this last year’s program by including funding to allow the important program to continue. The House unanimously passed an

amendment during floor consideration in favor of funding for the

BEDI Program, and last year, on December 13th, they approved

H.R. 280, which is the bill I introduced to reauthorize HUD’s

Brownfields Redevelopment Program.

The fact that EPA does not specialize in economic redevelopment

and the responsibility should not be brought to take on that role.

I think what you are doing right now is an area you have expertise

in; I don’t think economic development is necessarily where your

expertise are at. I don’t believe that EPA and HUD’s Brownfield

Programs should be consolidated; I think there is a place for each

of those. Each agency serves a unique purpose for redevelopment

of brownfields in our Nation’s communities.

Mr. Chairman, as we look to reauthorize the EPA program, I

would really encourage you and ask you to take into consideration

the fact that HUD’s goals on brownfields are different than EPA’s

goals on brownfields, and you are both doing a good job. So my talk

today is not in any way to impugn you on what you are doing, because what you do is worthwhile, and it is a great endeavor and

we need to expand that.

But HUD looks at EPA, what you do, from a different perspective

on their Brownfields Program. Theirs is just dealt with through the

BETI Grant Program to be able to empower local agencies to take

and be able to partnership with either private developers through

redevelopment areas and take and stimulate economic growth

within a community.

So I know the Administration keeps zeroing out the BEDI Program through HUD, but I think we haven’t emphasized the ability

to use BEDI like we should. In fact, I have been strongly advocating simplifying the program because they require now you go get

a Section 108 loan, then you pledge your CDBG funds for repayment.

And, as you know, in most communities, CDBG funds are one of

the most usable funds they have to give to communities, whether

it is Meals on Wheels, YMCAs, other programs that these communities really need funds for. These programs are really utilized for

those. So a lot of communities don’t want to pledge those funds,
8

and unless you are a direct recipient of it, which most communities

aren’t, you can’t pledge something you don’t receive other than getting it through the county or such.

So we have actually complicated the BEDI Program, where it is

not working as it should. I think we need to simplify the program.

But what I don’t want to do is mix two programs that have different objectives, when we want to encourage you to expand what

you are doing. And you have to admit you have a different focus

than HUD does.

And so, Chairman Duncan, I wish you would look at this. And

we seem to be arguing this every year, and we shouldn’t be arguing

it because we are all trying to arrive at the same destination, thus,

do good to clean up these 450 to half a million sites we have out

there, put them to better utilization. But EPA and HUD have different purposes, and I think we need to understand that and we

need to encourage both. So I look forward to this process completing, but, Chairman, I would really appreciate it if you could look

at this, and maybe you and I could discuss this further, because

I think there are different objectives from different programs.

I yield back. Thank you.

Mr. DUNCAN. Well, you have made some good points, and we will

work on it.

Mr. Barrow is next on the minority side. You have no statement?

Mr. Brown.

Mr. BROWN. Mr. Chairman, I want to talk about the cities. We

have two cities, Charleston and North Charleston, and in between,

about several hundred acres, is a brownfield site, and it is not a

success story yet, but I think it is evolving into a real success story.

Back during the war, when we had the shipyard, we also had an

oil refinery, we had a creosote plant, we had fertilizer plants, we

had metallurgical plants. All of these were pollutants.

And today these several hundred acres, which already has the infrastructure, water and sewer, they have the bus routes going by,

everything is in place, but right now it is just a brownfield. It is

growing up a real distraction because it is a connect point between

the City of North Charleston and Charleston, and you come in on

I–26 and it is an eyesore.

But the innovation of the private sector and through the

brownfield legislation, a lot of good things are taking place, and I

just wanted to say that I think it is a win-win, it is a win for urban

sprawl to prevent those folks having to move away from the city

that work in the city. So I commend this program and I certainly

look forward to the reauthorization and the continuation of reclaiming a lot of these polluted properties. And I thank the panel

for being here today.

Mr. DUNCAN. Thank you very much.

Ms. Schwartz.

Ms. SCHWARTZ. Well, thank you, Mr. Chairman. I will be brief.

But I do want to just say that I look forward to the panel’s discussion and to the reauthorization. I will say that representing Pennsylvania, I am really proud of the work we have done in Pennsylvania. I was involved as a State senator in the 1994 legislation, the

brownfields legislation that was passed in Pennsylvania.
9

I believe, really, we were leaders in setting the stage for what

was then done obviously on the Federal level, and now we couldn’t

do without you I think in the cooperation that we have seen. So

it has been hugely important to the redevelopment not only of our

cities, but in some of our older towns and suburban areas.

And, in fact, the President came to visit Conshohocken, Pennsylvania, which is just outside my district, to tout the enormous revitalization of an old industrial area that is now sort of a hot spot

to live, work, and dine, if I can say that. It has really been an enormous revitalization, a great example to what can happen when we

see that kind of revitalization in community. And I think as we

have all heard already, we are really interested in seeing more of

it happen. We would like to see more of these brownfields redeveloped, cleaned up, and to see if we can’t do that across this Country;

and certainly in parts of my district we are looking to make this

happen.

I do understand that Pennsylvania has a memorandum agreement with the EPA, our environmental department at the State

level, which does create a sort of a one-stop shop for redevelopment. So one of my interests is how do you see that working. I

think from our point of view we are pleased with that, that we

know developers, businesses can come to us, can come to the State

level and know that they don’t have to go through a lot of extra

paperwork; they are able to do it by applying at the State level and

getting those approvals, seeing it through.

We have an enormous commitment in Pennsylvania to make this

work. So I am curious as to whether that is going on in other

States, whether it should be going on in other States. How can we

make this simpler so that more people know about it and can use

it. So I want you to talk to that, speak to that, if you can.

And my second question would be, should we get to it later, really has to do with what else EPA is doing, as this redevelopment

happens in brownfields, to encourage green buildings, to encourage

other kinds of energy saving conservation efforts, to be an example.

If we are putting Federal dollars, State dollars into some of these

private developments, what else are we doing to set the stage for

how we can be doing even a better job in creating that example of

energy efficiency as well.

So I know there was a problem that did exist, that I think I understand was just a demonstration that did talk about green buildings on brownfields redevelopment. Why not more of that? Did it

not work? Why not move ahead with some of those other kinds of

innovations?

So I am looking forward to hearing what we have learned to how

we can do the reauthorization in a way that moves us forward and,

of course, as it always comes, the bottom line is is funding adequate? Are we getting those dollars on the ground to do this quickly enough to do the redevelopment, keep open space preserved the

way we would like to see it in many areas?

And the third question would be just how is this fitting into the

planning generally for some of the redevelopment in different communities as well? As we see communities redeveloping, are we seeing the redevelopment of brownfields, reuse of brownfields really
10

being a part of that, or can we be proactive in that in suggesting

that as we see some of the new development?

So with those questions, Mr. Chairman, I look forward to hearing

the panelists and to the dialogue we will have. Thank you.

Mr. DUNCAN. Thank you very much.

What we are trying to do is go in order in which members arrived here, and that means, on our side, Dr. Boustany would be

next, Vice Chairman Boustany.

Mr. BOUSTANY. Thank you, Mr. Chairman. I will be very brief.

I look forward to the testimony as we look at brownfield reauthorization. And I hope one area that we can look at would be performance measures, because I think especially in a program that has

restricted or somewhat limited resources, performance measures

are very important to make sure that we are spending those dollars

wisely. So I hope this is something we will address perhaps during

testimony or in the questioning period.

Thank you. I yield back.

Mr. DUNCAN. Thank you very much.

Mr. Osborne?

Mr. OSBORNE. No questions, Mr. Chairman.

Mr. DUNCAN. Mrs. Kelly.

Mrs. KELLY. Thank you very much, Mr. Duncan. I appreciate

your having this hearing.

Brownfields aren’t just in cities. I represent the entire lower

third of the drinking water reservoirs for New York City, and there

are brownfields and contaminated areas that can present a real

threat to that drinking water.

Of particular interest to me is TCE. As I know you are aware,

the health risks associated with TCE have continued to be of significant concern for me and my constituents, and I am really happy

to see Susan Bodine here, because I know that she understands the

drag that bureaucratic structures can have on getting information

out.

But I am particularly frustrated by the lack of urgency on the

part of the EPA here in Washington to set guidelines after studies

done by the Agency in 2001 indicated there were huge risks associated with TCE. They were more than originally thought, and it is

important that we focus on getting the information out.

I have raised the issue with you, Mr. Chairman, in committee

hearings, in letters, and in private conversations. I appreciate your

personal interest and strong commitment to protecting communities across the Country from public health risks associated with

water contamination. I hope that we can continue working together

in exhorting the EPA to provide my constituents with the answers

they need and they are really anxious to have on the TCE problem.

I am deeply concerned that the Agency is going to continue being

very slow-footed in their response to this very serious problem. As

we speak, the plumes are continuing to flow toward the reservoirs,

and I am hoping, Mr. Chairman, you will agree this issue merits

a hearing in the near future.

Mr. DUNCAN. Well, certainly, Congresswoman Kelly, you have

raised this issue, as you mentioned, several times before, and I can

understand that, and I admire and respect your concern. And certainly you are correct in saying that this problem of the presence
11

of hazardous contamination is not just in the biggest cities, but it

is in areas like yours.

The Superfund program is meant to address the issues you have

raised, and I can assure you that I will be happy to work with you

and to use the resources of this Subcommittee and our staff to be

sure that the program is working appropriately and in a timely

manner, and especially in the case of TCE contamination in your

district. But you are really doing a good job on that area, calling

attention to that problem, and I thank you very much.

Mrs. KELLY. Thank you, Mr. Chairman. I yield back.

Mr. DUNCAN. All right, thank you very much. We are very

pleased and honored to have an outstanding panel of witnesses

here this morning. The witnesses will testify in the order in which

they are listed on the call of the hearing.

That means our lead witness will be a woman that we all admire

and respect, a former long-time staff director for this Subcommittee, the Honorable Susan Parker Bodine, who is Assistant Administrator of the Office of Solid Waste and Emergency Response at the

U.S. Environmental Protection Agency here in Washington; Mr.

John M. Magill, who is Deputy Director of the Ohio Department of

Development from Columbus, Ohio; Ms. Terry Manning, who is the

Senior Planner and Brownfields Coordinator for the South Florida

Regional Planning Council, and she comes to us today from Hollywood, Florida; Mr. Jonathan Phillips, Senior Director of Cherokee

Investment Partners from Raleigh, North Carolina; and Dr. Peter

B. Meyer, who is Director of Applied Research at the Institute for

Public Leadership and Public Affairs at Northern Kentucky University in Highland Heights, Kentucky.

Thank you very much. As I have said at hearings before, most

committees give witnesses five minutes for statements. We give six

minutes here, but we ask that, in consideration of other witnesses,

that you not run over that time. So if you see me start to wave this

gavel, that means end your statement. Your full statements will be

placed in the record and you may now begin your oral statements.

Ms. Bodine.

TESTIMONY OF THE HONORABLE SUSAN PARKER BODINE, ASSISTANT ADMINISTRATOR, OFFICE OF SOLID WASTE AND

EMERGENCY RESPONSE, U.S. ENVIRONMENTAL PROTECTION AGENCY, WASHINGTON, D.C.; JOHN M. MAGILL, DEPUTY DIRECTOR, OHIO DEPARTMENT OF DEVELOPMENT, COLUMBUS, OHIO; TERRY MANNING, SENIOR PLANNER AND

BROWNFIELDS COORDINATOR, SOUTH FLORIDA REGIONAL

PLANNING COUNCIL, HOLLYWOOD, FLORIDA; JONATHAN

PHILIPS, SENIOR DIRECTOR, CHEROKEE INVESTMENT

PARTNERS, RALEIGH, NORTH CAROLINA; AND PETER B.

MEYER, DIRECTOR OF APPLIED RESEARCH, INSTITUTE FOR

PUBLIC LEADERSHIP AND PUBLIC AFFAIRS, NORTHERN

KENTUCKY UNIVERSITY, HIGHLAND HEIGHTS, KENTUCKY

Ms. BODINE. Thank you, Mr. Chairman, Ranking Member Johnson, and members of the Subcommittee. I am very pleased to be

here today to talk about EPA’s Brownfields Program.

As this Subcommittee well knows, policymakers began to focus

on the issue of brownfields redevelopment about 12 or 13 years ago.
12

The U.S. Conference of Mayors was actually the first to bring this

matter to my attention, and they pointed out, as some of you have

also pointed out, that, as demographics changed and economies

shifted, many communities found themselves with former industrial and commercial property that was now lying vacant. But they

also found that they couldn’t get investment and redevelopment

into those properties because there was a fear of liability, particularly liability under the Superfund statute.

That left the mayors with a dilemma: they have vacant property;

they can’t get the investment; and, instead, they saw capital being

invested outside of established communities in former green space,

and the result of this was stranded infrastructure in our established communities, creating the need for new infrastructure out in

former green space. And with that development we would have also

increased environmental impacts that just naturally arise from

people being there, for instance construction and paving. Development does have an environmental impact.

By putting all these issues together and focusing on them, the

Conference of Mayors was very effective in putting together a coalition of redevelopers, open space advocates, community groups, and

they brought this matter to the attention of Congress, EPA, States,

and other policymakers. Now, the primary focus of their efforts was

to remove the barriers to redevelopment, and that primary barrier

was the fear of Superfund liability. They also successfully made the

argument that there needed to be some Federal seed money to

jump start redevelopment in blighted areas and to increase local

capacity to address brownfields.

States responded to this by establishing State voluntary cleanup

programs such as Pennsylvania’s Act 1 Program, or Act 2, which

has been very successful. EPA responded by developing tools such

as prospective purchaser agreements, which was labor-intensive

and site-specific, but the Agency would enter into agreements with

new property owners and, under that agreement, would protect

them from Superfund liability.

EPA also entered into memoranda of agreement with States that

had voluntary cleanup programs, and, again, Congresswoman

Schwartz mentioned those. Those would provide comfort to redevelopers that, if they were complying with the State requirements,

that EPA didn’t intend to come in and establish different requirements or secondguess State decisions. EPA also began to provide

seed money for brownfields redevelopment.

Now, even though we had those administrative tools, most

agreed that legislation was necessary. The administrative tools

were case-by-case and resource intensive. So, again, as this Subcommittee knows, with strong support from this Committee, by

Congress and by President Bush, Congress did pass the Small

Business Liability Relief and Brownfields Revitalization Act in January. Well, actually, as the Chairman will remember, it passed, I

believe on December 20th, at 4:00 a.m., nearly 5:00 a.m., at the

very end of the first session of the 107th Congress. And the Senate

passed it after that, and then the President signed it in January

of 2002. But after that very successful effort, the legislation then

provided a clear mandate to EPA to carry out and provide the tools

for brownfields redevelopment.
13

EPA has taken great strides to implement the law. It required

a lot of new guidelines to be issued in a very short time period. And

now that I am on the administration side of the program, I recognize how complicated it is to put out guidelines, and they successfully were able to do that within a year and have a competition

under the new rules that began in 2003.

Under the new law, there were specific criteria for how grants

were to be awarded, and I just want to briefly describe that. For

awarding the cleanup, the assessment, and the revolving loan fund

grants, EPA has a process where the applications are reviewed by

regional panels first, just to make sure they reach the threshold

criteria; then the grants that meet those threshold eligibility criteria are then reviewed by national panels and assigned scores;

and that is how the selections are made, they are made by the recommendations of experts.

Recently, we did complete the competition for 2006. We received

about 700 applications and on May 12th announced awards of

$69.9 million to fund 292 grants to communities in 44 States and

2 territories.

The other funding that is authorized under the brownfields law

and that EPA implements is funding to support the State voluntary cleanup programs. That is under Section 128 of the law.

Now, these grants are allocated out to the States in a non-competitive process because the concept is to be able to have every State

have a successful voluntary cleanup program. What the Agency has

been doing is allocating those grants, but in allocating those grants

we have been looking at unspent funds. This is part of being careful stewards of the funding that Congress has provided to us. We

are making sure that the States are spending the money that is

given to them and, in fact, are reducing their allocations dollar for

dollar, if they haven’t spent prior awards.

The program has had tremendous results. Through EPA’s efforts

and EPA funding, there have been more than 8,000 assessments.

As the Chairman mentioned, we have leveraged more than $8.2 billion in cleanup and 37,000 jobs. But I also want to point out that

that is where we have direct Federal participation. The vast majority of the work is being done actually in the States under the State

programs. We estimate that 48,000 properties have been cleaned

up through those State response programs, and we know that

about 53,000 properties are currently enrolled in those programs.

In terms of being able to work more closely with the States and

to better understand all the cleanup activity that is taking place

nationwide, we are working with the States to collect data now on

their accomplishments as well.

I now know that I have gone over my time, so I would like to

say that I am happy to be here to discuss the management of the

program. I am very happy to be here to start a dialogue on how

to improve the program, both administratively and in your reauthorization process. Thank you.

Mr. DUNCAN. I thought the least likely person to run over her

time would be you.

[Laughter.]

Mr. DUNCAN. I can tell you that I do remember well speaking on

the floor on that bill at 5:00 a.m. in the morning. That is the only
14

time I think I have ever spoken on the floor at 5:00 a.m. in the

morning, although I did recall, thinking back, that many years ago

I offered an amendment to another bill at 3:00 in the morning, and

I think I got the fewest votes on that amendment of any amendment I have ever offered, and I sort of made up my mind to never

do it at that time of morning again; I don’t know whether that is

such a good idea to bring up something at that time.

Mr. Magill.

Mr. MAGILL. Good morning, Mr. Chairman and members of the

Subcommittee. I am John Magill, Deputy Director of the Office of

Urban Development in the Ohio Department of Development. On

behalf of Ohio Governor Bob Taft, Lieutenant Governor Bruce

Johnson, Director of the Ohio Department of Development, I thank

you for the opportunity to discuss the important role of the

Brownfields Program in Ohio’s brownfield redevelopment strategy.

Brownfield redevelopment is a critical element of Ohio and the

Nation’s economic security. The task of cleaning up brownfield

property requires the collaboration of the Federal and State governments operating within the free market. Measurable success is

appearing across the Country, giving an impetus to reauthorization

of the Brownfields Program.

Ohio has developed one of the Nation’s vibrant brownfield programs by combining U.S. EPA grants along with Ohio’s $200 million Clean Ohio Revitalization Fund. This Federal and State collaboration demonstrates the value and vitality of the federalism

model. Development has received two brownfield revolving loan

fund and two supplemental grants. With these grants we have

made four loans and are scheduled to close a fifth in July. The department is uniquely positioned to see the role of the grants in

cleanups, economic development, and creation of parks.

U.S. EPA funds were loaned to the Columbus and Franklin

County Metropolitan Park District to conduct remediation and

demolition activities on 16 acres of the Whittier Peninsula in Columbus, a historic industrial site, which will become part of a new

80 acre urban park. Metro Parks and the Audubon Society will invest more than $10 million into the development of the park.

The Brownfields Program is an example of the Federal Government’s role to facilitate commerce as envisioned by the founders.

Commerce cannot occur on a brownfield without cleanup. The cost

of this effort, due to changes in the economic fabric, must be borne

by both private and public parties.

To remain vibrant, the Brownfields Program should look for

ways to strengthen and grow. The first step would be to foster the

development of sustainable organizations. A second action would be

to place a premium on using dollars to leverage private capital and

act as an equity investor in projects with community goals.

A way to achieve sustainable organizations is for U.S. EPA to

recognize the difference between assessment and cleanup grant

awardees and RLF awardees. Assessment and cleanup grant dollars encourage smaller communities and non-profits to analyze

properties to determine their environmental condition and prepare

them for redevelopment. The challenge is the grant amount limits

the type of projects and may not be part of a long-term strategy.
15

Underwriting the cost of cleanup and servicing loans requires sophistication and resources beyond that offered by U.S. EPA. Regional and State organizations that have a history of effectively undertaking economic development lending would, as grant recipients, complete more loans with quantifiable economic and community results. The Brownfields Program needs to examine ways to

attract private capital to cleanups. A step on this path is promoting

a variety of flexible RLF financial products, ranging from loan

guarantees, loan deferrals, and balloon payments.

The Brownfields Program, if reauthorized and fully funded, will

catalyze innovative and dynamic redevelopment in Ohio and across

the States.

Thank you.

Mr. DUNCAN. Well, thank you very much, Mr. Magill. Very fine

testimony. You know, I will mention one thing, though, that almost

nobody ever thinks about. It always sounds great for a politician

to create a park, but we have created so many parks now, Federal,

State, and local, that we can’t even take care of all of them. But

the main concern is that we keep taking land off of the tax rolls

and shrinking our tax base, at the very time that the schools and

all the other government agencies and departments are demanding

more and more money. And we have got to really think about that

before we just blindly say that creating another park is a wonderful

thing.

Ms. Manning.

Ms. MANNING. Good morning Mr. Chairman and members of the

Subcommittee. My name is Terry Manning and, as mentioned, I

am a Senior Planner and the Brownfields Coordinator for the

South Florida Regional Planning Council. I am honored to be here

today to discuss the Brownfields Program with you and how we

have been able to utilize the EPA programs and offer some suggestions for the future.

Brownfields redevelopment is a voluntary redevelopment tool

that is being used by many local governments in the Southeast

Florida area to help in the redevelopment of actual or perceived environmentally contaminated properties. In the Southeast Florida

Counties of Miami-Dade, Broward, and Palm Beach, the Eastward

Ho! Brownfields Partnership was created in 1997 as a forum to

bring together local governments along with non-profit and other

governmental agencies to address brownfields issues. This is an

area that includes approximately 40 percent of the population of

Florida and is growing.

We are part of the larger Eastward Ho! effort which seeks to revitalize and improve the quality of life in Southeast Florida, and

we are sometimes referred to as a portion of the urban component

of the Everglades restoration. We are trying to lessen development

pressure and urban sprawl in the sensitive lands in the western

part of our region that are needed to restore the Everglades and

to ensure our future regional water supplies.

Over the years, the Brownfields Partnership has found the following obstacles to brownfields redevelopment: the lack of adequate

funding for cleanup; concerns over environmental liability; the need

for environmental assessment of properties; the uncertainty over

cleanup standards; inadequate or non-existent infrastructure sys-
16

tems necessary to support redevelopment; unfavorable neighborhood and market conditions; land assembly problems; the reluctance of the private sector to invest in distressed communities; and

the time and effort needed to address environmental and other

issues.

To address these concerns and to assist in brownfields redevelopment issues, funding from EPA Brownfields Program has been utilized to try and address these problems. Funding under this program has been used to assess and clean up brownfields and to assist in redevelopment efforts.

The following is a brief summary of the programs that we have

been able to use within the Southeast Florida area, and again, I

am referring to the three county area: we have been able to receive

assessment project for one county, four cities, two regional planning councils, one community redevelopment area, and one tribe;

we have received a revolving loan fund grant which has been utilized so far to loan out money to two for-profit businesses.

And on Monday morning I was approached by a non-profit entity

that it looks like we might be able to do a third loan with; we have

received cleanup grants for two cities and one community redevelopment agency; we have had two job training grants; and we have

received targeted brownfield assessment funding for numerous cities, and this funding is through the Florida Department of Environmental Protection but is actually EPA funding.

Because of this funding, we have noted the following positive outcomes. And I am going to mention some numbers here, and these

are for completed projects. We have more projects in the works. We

have been able to leverage this money with $1.3 million from the

State of Florida, $10.4 million from local and regional governments,

$31 million in private funding. And because of this we have been

able to complete environmental assessments for approximately 390

sites.

Fortunately, 75 of these sites we have found to be clean and do

not need further remediation. Twenty sites have actually undergone remediation activities and are either undergoing redevelopment or will shortly undergo redevelopment. This has resulted in

approximately 2,000 jobs and 600 housing units for very low-to

moderate-income people. A total of 88 students have been trained

under this program, with 95 percent of the students receiving employment in environmental fields. We have been able to combine

the Federal and our State program and designated nearly 50,000

acres of land under the Florida Brownfields Program.

I should also mention that without the Florida Brownfields Program, we would not be able to complete many of these activities,

and the Florida Brownfields Program does have a Memorandum of

Agreement with EPA in order to promote brownfields activities,

and we think it has been very successful.

But much remains to be done. Suggestions for the future include

the following: providing more flexibility in the way EPA grants are

funded, including combined grants for assessment and cleanup;

using a rolling grant application process instead of a once a year

process—this will allow for more timely access to funding—increase

overall funding. We also would suggest streamlining reporting and

other requirements.
17

We also recommend looking at the brownfields loan program, the

revolving loan fund programs to increase the amounts for capitalization of grants and to allow the funds to be used to help guarantee more private loans, which we feel may increase the number of

loans that are made. Also, we recommend that more thought be

given to the duplication of programs under State and Federal programs.

Thank you, sir, for your time.

Mr. DUNCAN. Well, thank you very much, Ms. Manning.

Mr. Philips.

Mr. PHILIPS. Thank you, Mr. Chairman, members of the Committee. My name is Jonathan Philips, and I am Senior Director of

Cherokee Investment Partners based on Raleigh, North Carolina.

Thank you for the opportunity to testify in support of reauthorizing

the Small Business Liability Relief and Brownfields Revitalization

Act.

Cherokee is the largest and most active private investment firm

in the world specializing in the acquisition, cleanup, and sustainable revitalization of brownfields. Since inception, we have acquired over 520 sites across North America and Europe. We are

privileged to be fiduciaries of institutional capital providers to perform this important activity. We are not aware of any private organization in the world that voluntarily cleans up more pollution.

The Brownfields Act that we are here today to support has been

an important first step in returning neighborhoods to healthy

places where families can live and work. Brownfield revitalization

catalyzes positive community transformation that extends well beyond the individually contaminated sites. This community transformation and resulting ripple effect throughout neighboring communities writes new chapters of hope from the often sad histories

of economic and environmental decline and urban blight.

This Act includes important tools for local communities to assess

contamination and start planning for redevelopment, and it includes important provisions regarding bona fide prospective purchasers. The dedicated team of staff at the U.S. EPA should be

commended for their implementation of these critical programs.

A larger brownfield coalition, of which Cherokee is a member,

has provided written testimony today detailing a number of specific

issues that should be examined by this Subcommittee as it considers reauthorization. There are many good suggestions in that statement. We would encourage members to specifically explore modifications that could be made to the existing definition of brownfield

under the Act to bring in sites that are currently excluded under

the Section 101(39)(b).

One example would be to enhance communities’ ability to

prioritize sites for use, eliminate currently defined set-asides for

certain types of sites—petroleum brownfields and sites acquired

prior to the January 2002 enactment—and allow all brownfield

sites, as defined broadly by 101(39)(a), to compete for program resources and those legislative enactments that definitionally key off

of Section 101(39).

Another example is sustainability, as mentioned by Representative Schwartz just a few moments ago. When we clean up pollution

below ground, what are we doing to protect our environment above
18

ground when we redevelop? Many of you know buildings consume

roughly 50 percent of the energy in our Country. Let us create a

positive mirror image and offer incentives, legislative incentives for

sustainable development and green building on these sites so we

can replicate on top of the sites the same environmental benefits

produced by cleaning up what was below the ground. And this is

something that we already practice and we look to further pursue.

Mr. Chairman, in our mind, there is no question that this Act

should be reauthorized. From Cherokee’s perspective, we need to go

further. If Congress wishes to seriously address this Nation’s

brownfield crisis, we must develop additional Federal incentives to

draw private investment dollars to the more complex and economically less desirable sites. These are sites that are more complex,

take longer to redevelop, involve significant liability and cost overruns, risks, and almost invariably lead to the various permutations

on the same question that we hear so frequently from others in the

traditional development world, which is: Why should we invest in

this site given its risks, limitations, unknowns, additional costs,

and brain damage required, when I can just develop the next farm

on the proverbial ‘‘edge of town’’? Why should we engage in this redevelopment?

Well, Congress has responded, not just with the Brownfields Act,

but with important programs such as the 198 expensing provisions,

recently created unrelated business income tax exemptions, and

Representative Turner’s proposal to create transferrable tax credits. Each of these holds tremendous promise for returning

brownfield sites to productive use.

The incentives the Federal Government provides can take many

forms: direct funding, tax credits, loan guarantees to reduce the

cost of debt-financed redevelopment, or other tools. Local and State

governments can assist with expedited permitting and other tools

to encourage brownfield redevelopment. What is important is that

these incentives need to directly address the financial

underpinnings of brownfield transactions.

In testimony before other subcommittees, I have encouraged

members to think about brownfields as ‘‘under water’’ or ‘‘above

water.’’ A site that is ‘‘under water’’ is a site that the marketplace

will not redevelop on its own given the cost of cleanup, the value

of the property in a clean state, and various other factors. A site

that is ‘‘above water’’ is likely to be cleaned up and revitalized by

the private sector without government assistance.

And along this continuum, there are some sites that are barely

below water. These are sites that may be redeveloped during a favorable economic upturn or with a slight nudge from a Federal,

State, or local incentive program.

Unfortunately, most of the sites we think of as brownfields are

further underwater, many considerably so. Without significant public assistance, these sites will never be remediated by the private

sector.

It is critical to note that these terms, ‘‘under water’’ and ‘‘above

water’’, take into account only what I will call, for lack of a better

term, ‘‘internal’’ costs and benefits of a developer. They do not reflect the various public benefits that development would bring,
19

such as reduced pollution, more jobs, reduced sprawl, or increases

in tax revenues.

So one mission of government, then, must be to focus particularly

on those properties that are under water from a market perspective

and above water from a public perspective. For those sites, we need

an aggressive mix of local, State, and Federal programs to encourage the private markets to undertake the task of remediating pollution and redeveloping sites. We encourage Congress to take specific notice of the significant challenges faced by public and private

actors seeking to perform land assembly for large brownfield revitalization, where master planning is the most effective way to move

brownfield and underutilized lands from blight to robust productivity. Without effective tools to control brownfields or blighted zones,

these sites will indefinitely sit.

Having said that, we appreciate that it is extremely difficult to

discuss brownfield incentives in the abstract. Without looking at

actual sites and running numbers on actual projects, it is almost

impossible to assess how well an incentive program will function.

I see that my time is up. I just wanted to extend a genuine offer

to the members of this Committee. My company is extending a serious offer to help you assess the reforms required for this reauthorization. If you have a site in your district that is a priority site, and

even if that site does not meet our investment criteria, we will sit

down and work with you and your staff to walk through our underwriting of those projects and help you assess in real concrete terms,

real-world examples, what impediments exist and what challenges

exist, and what incentives might be needed in this legislation.

Thank you very much for your time.

Mr. DUNCAN. Well, thank you very much, Mr. Philips. I think

that might be very helpful.

Dr. Meyer.

Mr. MEYER. Thank you very much. Mr. Chairman, members of

the Committee, I thank you for the invitation to join you today. My

name is Peter Meyer. My comments today are informed by 14 years

worth of research on brownfields—by the way, that is longer than

the program has been in existence—conducted mostly with my research partner, Dr. Kristen Yount, who is a Professor of Sociology

at Northern Kentucky University, where I am now. In addition to

my NKU post, I direct something called the Center for Environmental Policy and Management at the University of Louisville, and

I also serve as the Director of an EPA-funded environmental finance center there.

For brevity today, and largely because much of this has been already covered by others, I am going to skip all comment on the successes of the program. What I want to turn to is some cost-effectiveness and performance measure issues that I think are important, and then look at some challenges and some of my take on

them.

I am an economist by training, and I am backing away from offering you any dollar figures having to do with the successes of the

program. And the reason that I do that is that I don’t trust the direct impact data for a variety of reasons. These are not specific to

brownfields; they come from a general problem associated with eco-
20

nomic development programs and evaluating them more generally;

and I used to do work in that arena.

The counterfactual is something that we don’t know, it’s not

knowable. When we see the offer of a subsidy followed by a new

investment, we have no way to empirically demonstrate what

would have occurred without the incentive offer. And this has to do

with the above water-below water that Mr. Philips just referenced.

The value of any one incentive may be impossible to extract because, and, again, if you look at what Ms. Manning just put before

you, you have multiple incentives feeding into any one project. So

isolating the value of any one of them is exceedingly difficult.

But, yet, making it even more complicated is the fact that the direct economic impacts of site redevelopment are in fact not limited

to the increase in the value or the new users or the new jobs or

the new tax revenues just on that one parcel of land; it spills over

to other land in the entire area. And this makes it very, very difficult to ascribe direct economic benefits to any one stream of dollars.

There are, however, other measures of the economic value of the

Brownfields Program, and one that I want to put before you is

something that is the accelerated rate of entry into the brownfields

business of new firms. Some of the brownfield specialists that I was

interviewing in the 1990’s—including the gentleman to my right—

have complained to me about the fact that there are too many developers. From their point of view, there is too much competition

for those brownfield sites that they used to be able to get for a

song. I submit to you that the brownfields bill played a significant

role in changing the entire climate of brownfield reinvestment and

risk perception on the part of those developers.

Based on my past research, I can conservatively claim that the

effects of the Brownfields Program on redevelopers’ perceived risks

have probably saved State and local governments, at a bare minimum, $100 million in the subsidies that they otherwise would have

had to offer developers to get them to do the brownfield redevelopment that we have experienced. And this is a benefit on top of the

benefits that we get from the redevelopments themselves.

I should add, by the way, as we look at performance measures,

that increasingly we have got brownfields being redeveloped that

never enter the State programs, never apply for Federal money,

but are being redeveloped because of that climate change that has

been generated by this bill.

And, finally, I should point out, with regard to those kinds of

measures, that infrastructure utilization has improved. We are now

more fully utilizing infrastructure that exists in our urban areas

instead of then having to build new infrastructure in the rural

areas. These are all valuable performance outcomes.

But a variety of challenges remain. I should put on the table

mothball sites, which are idle sites, tie up capital. They are basically a drain on the U.S. economy. Sites are mothballed because

the firms that own them fear that they will be the deep pockets

that will be tapped under the strict joint and several liability provisions of CERCLA if any problems or costs arise, no matter how far

in the future.
21

The new FASB rules may help drive some of these mothballed

sites into the market. The liability shadow will remain. I would

suggest that one of the things the Federal Government may want

to look into is becoming a re-insurer of last resort for the environmental insurance industry. This is something that could produce

significantly greater access to and more readily available long-term

risk transfer capacity on the part of the environmental insurance

industry that should get firms to release their sites to the market.

On the other hand, we have a very big problem with our small

sites. The vast majority of the up to a million brownfield sites in

the United States are in fact going to be under a half an acre in

size. Half an acre is not very big. Most of the brownfield redevelopment specialists generally look for at least 10 acres. What is the

potential return to a municipality or other local government from

taking steps to facilitate the remediation of a brownfield with Federal help, a brownfield that has depressed the economic activity

and attractiveness of all the sites nearby, not just that one site?

What we are dealing with here is we are dealing with spillovers

and spillover returns that are not well enough recognized.

By the way, Mr. Chairman, you can get those kind of spillovers

from, in fact, putting a park where there was none. And you can

get offsite benefits in terms of tax benefits. This is something we

have all understood for decades in taxing permit financing.

Minor changes in grant applications merit scoring could help the

municipalities to think more about looking at those area impacts,

and that is doubly important in the context of depressed neighborhoods, which are shot through with brownfields, where each one affects the other one and makes it that much more difficult to attract

capital to any one of them. In that situation, local governments

could play a role in taking title to those properties, but the new

GASB standards are likely to make it more difficult for them to do

so.

And some Federal help in the form of liability relief from Federal

liability for small municipalities that take title to sites in order to

redevelop them, following the logic of the lender liability relief that

was provided in the 1997 Budget Reconciliation Act, I think could

be something that could be very, very valuable in terms of signaling to the States that they need to help their municipalities with

liability relief.

I thank you very much for your attention and look forward to

your questions. And, by the way, I can empirically defend the statements I made. Thank you.

Mr. DUNCAN. Thank you very much. Very interesting testimony,

Dr. Meyer.

Dr. Boustany.

Mr. BOUSTANY. Thank you, Mr. Chairman. This was indeed very

interesting testimony.

I mentioned earlier performance measures, and we know that

EPA does report on cumulative sites addressed, jobs generated,

cleanup, development activities, funds leveraged, and so forth. But

what about actual cleanup and redevelopment activities, which

should be one of the primary goals of the program, and also, looking even further down the line, mitigation of future risk? It seems

to me that performance measures are linked, critically linked to
22

this issue of liability and liability relief. I mean, certainly in my

State of Louisiana, we have had our share of lawsuits dealing with

underground water aquifers and things like that.

And I was impressed, Mr. Philips, with your testimony. You got

a little bit into some of the things you have to do as a private investor to shield yourself, so let me start off by asking you how do

you minimize your liability as you go forward in these investments?

Mr. PHILIPS. Sir, the very best way to minimize liability when

you are seeking to invest and redevelop a brownfield and do it

sustainably is to attack the pollution quickly, literally spending

dollars up front, first dollars, and the riskiest dollars, by the way,

when you consider it from a real estate perspective. That is the single best way to mitigate one’s liability. If you walk into a site with

your eyes open and you know that part of this project involves

cleaning up pollution, and you are going to assess very carefully,

in advance, what the costs are associated with that, the liability associated with that site drastically reduces when you start spending

those dollars.

We also use other risk management techniques. Environmental

insurance, which has been mentioned by a number of people, is important to our transactions, and there are two types: sort of a pollution liability, legal liability, and there is also a cost overrun product that is out in the market.

So I would say those two would be the first ones.

Mr. BOUSTANY. Out of the 520 sites that you have acquired, are

some of them small sites, or are you mostly focusing on large sites?

Mr. PHILIPS. As we have gotten larger and we have continued

with your track record, our investors have entrusted in us more

capital to deploy, and that has meant that we have been able to

invest in larger sites. But that doesn’t mean that there are individual parcels that are larger; it could be that we are assembling large

amounts. One the gentleman mentioned, the project in Charleston.

That is one of our projects where we have assembled a number of

sites along the industrial neck area of the river, some large, some

small.

But we view brownfields as a zone, as a redevelopment zone. And

sometimes you have to buy property outside of the individual sites

in order to make the economics work, because when you transform

one site, it will have that ripple effect in the surrounding area. And

if you can capture those economics from the surrounding area, then

you can place a bet that at the end of the day you are going to be

return investors’ capital, and a return on that capital as well. So

that is how we think about things.

Mr. BOUSTANY. Dr. Meyer, you mentioned the small sites and

mothballed sites, and some of the problems associated with those.

Do you think we need to catalog these, have some sort of official

cataloging and come up with a separate way of dealing with this

to mitigating the economic blight that is left behind?

Mr. MEYER. Well, let me start with the mothballed sites. Under

the new rules, FIN 47, which implement the financial accounting

standard boards—what is it?—143 ruling basically requiring disclosure of environmental liabilities as part of the asset disposal for requirements for firms in the United States in terms of financial accounting, that is going to require the firms, certainly those publicly
23

traded, publicly traded firms, to disclose those liabilities. That is

going to give us a partial inventory, if you will, of the mothballed

sites. They are also much smaller in number than the small sites.

So that is the easy part of the equation, if you will.

With regard to the small sites, look, we are talking about hundreds of thousands of sites. We are talking about, you know, the

dry cleaner here, what was a gas station some time before someplace else, we are talking about old machine shops, we are talking

about paint shops. The retail sector is really responsible for the

largest number of the brownfields in absolute numbers, not in acreage, obviously.

There are a number of problems here. If in fact you go out and

you label a site as a brownfield, what do you do to the property

value of the adjacent site? Do you really want to have that inventory out there? I mean, this is a very, very serious problem in

terms of the stigma that gets spread around the area.

By the way, the other side, the flip side of that is eliminating

that stigma is something that happens when you clean up that site,

so that, in fact, if all you look at is the numbers, the return on that

one property—same point that Mr. Philips just made—you have got

to look at the impact on the adjacent properties. That is not being

done by municipalities right now for the really, really small sites,

and I think there is an under-investment as a result.

But I don’t think there is a cost-effective way of doing the kind

of an inventory you are suggesting for the very, very small sites.

Mr. BOUSTANY. I was just interested in your view on whether it

should be done. But what do we do to stimulate cleanup of the

small sites? Do you have any ideas on that?

Mr. MEYER. Well, the argument that I try to put forward in my

written testimony in somewhat more detail is if in fact there are

a couple of things that happen. First of all, we have got a grant

application program right now, and the funny part about this is

that there is an advantage in what I am about to say in the fact

that it is not fully funded and we can’t provide funding for everybody who applies. There is some discretion with regard to the waiting that is provided for different provisions and different elements

of the applications.

One thing that could be done is for, in fact, the Office of

Brownfield Cleanup and Redevelopment in the grant application

process to modify some of the language in there to provide greater

weight and greater, if you will, points for those applications that

come from municipalities that recognize those spillovers and focus

on some of those smaller sites. If that is a sufficiently high priority,

that is something that can be done. That sends a message to all

of the other would-be applicants, potential applicants that puts the

agenda out on the table more, because there is a certain amount

of educating the needs to be done to get this to be done.

We could be doing more in the way of, you know, technical assistance and that kind of thing to local governments in that regard.

But they are very, very difficult to do, and the other problem you

run into is at the State level, in many instances—well, sir, you are

from New Jersey, if I remember correctly.

In the State of New Jersey, if in fact an abandoned gas station,

for example, becomes tax delinquent and it moves into the owner-
24

ship of a municipality, that municipality is not liable for that cleanup, legally, within the State of New Jersey. But if in fact that municipality buys that small site to do the kind of area-wide redevelopment, the site assembly kind of logic Mr. Philips just talked

about, then the municipality becomes liable.

Perhaps if the Federal Government waived that liability for those

municipalities, that might send the message to the States maybe

you guys ought to be doing that too. And that is another way of

encouraging the municipal action, because what is absolutely critical, as you pointed out earlier, Mr. Chairman, in your opening remarks, is that partnership between the Federal Government and

local governments with regard to brownfields.

Mr. DUNCAN. All right. Well, you are giving very good answers,

Dr. Meyer, but we are going to have a vote here in just a few minutes, and I want to go to Mr. Pascrell and give him a chance.

Mr. PASCRELL. Well, Mr. Chairman, they were excellent questions and great responses for the Committee.

Ms. Bodine, you mentioned in your testimony, you talk about the

landlord liability protections. Yet, we know that a final rule is

being issued in 2006, it goes into effect, I think, in November, dealing with liability protections.

Could you tell us what the present system is and what we will

move to in November of 2006 with regard to the general question

of liability? Because that is a major issue in all the development

in all of these properties, and many municipalities need some technical assistance to deal with that, as I see it. Would you agree, the

rest of the panel?

Ms. BODINE. Congressman, I am going to have to answer that

question for the record. I am embarrassed to say that I need to

check and—I don’t want to mislead you. I want to make sure that

my answer is accurate. So I will provide that for the record.

Mr. PASCRELL. Would you do that, please?

Ms. BODINE. Yes, I will.

Mr. PASCRELL. And would you also provide for the record the

States that are not spending what they were allotted?

Ms. BODINE. Yes, we have that.

Mr. PASCRELL. There is such an animal, right?

Ms. BODINE. Yes, that is accurate.

Mr. PASCRELL. And you will present that to the Committee?

I would like to ask, Mr. Magill, what about the question I presented before about allowing communities to apply for assessment

and cleanup grants with one application? What about that idea,

does that make sense to you? And anybody else can jump in. Make

your answers as brief as possible, please.

Mr. MAGILL. Thank you, Representative Pascrell, Mr. Chairman.

I believe that the combining of assessment and cleanup awards is

a viable idea. The challenge is it requires a trigger mechanism, because some of the sites will turn out to not be as dirty as has been

anticipated, and may be able to move to redevelopment in a more

timely fashion without the expenditure of any cleanup or lower levels of cleanup than had been anticipated. So the application process

and rules would have to allow for what we call in Ohio sometimes

a stop-start. We stop, we evaluate the phase 2 data, and then you

would move on to do the cleanup.
25

Mr. PASCRELL. Thank you.

What about the other members of the panel? Yes, Ms. Manning.

Ms. MANNING. I think the combining of a cleanup and assessment grant would be a great idea in many cases. I can give you

specific examples of projects where a city has had to apply for an

assessment grant one year and then has had to wait one or two

years to go for a cleanup grant; whereas, if they had been able to

go from assessment to cleanup, it would have had redevelopment

on the ground probably in a year.

Mr. PASCRELL. I had to handle that kind of frustration, and what

happens, if the wait is so long, it debilitates the project, many

times, and people walk away.

Ms. MANNING. Right. And also sometimes there is no guarantee

that if you get an assessment grant, you will get a cleanup grant,

and that could kill a project.

Mr. PASCRELL. How about the other members of the panel?

Mr. MEYER. I think that the one comment that should be made

I think is that there are two things that can get done with this

with assessment grants: one way is doing individual sites, another

way is trying to do a much more blanket job, for example, on very,

very small sites. Let us go out and assess as many tiny sites as

we possibly can with the money in hopes that we find that all of

them are clear, or that 80 percent of them don’t require any additional work.

So we are really looking at those assessment grants to play two

different roles: one is the first step on properties that are already

targets, and the other one is that very, very broad base scattered

site thing. And the issue then is we would like the assessment

grants to be able to serve both purposes.

Mr. PASCRELL. So there is something we can do in the process

situation to make this a lot easier.

My final question is this, Mr. Magill. Should Congress consider

making it easier for communities to apply for cleanup grants for

properties that they don’t yet own? This is a major problem in New

Jersey, and I am sure it is a major problem in other areas. What

do you think about that idea? What is the pluses, what is the

minuses.

Mr. MAGILL. Congressman, Mr. Chairman, I think there are

some pluses. The challenge—and this is what we do in Ohio in our

Clean Ohio Revitalization Fund—is that you have to have adequate

assessment information submitted at the time of application. So

the seller or the party who currently owns the property must be

willing to provide to the applicant—that EPA will evaluate—a time

on the site to conduct adequate environmental due diligence, phase

1 and in the invasive phase 2, soil samples and groundwater samples. So I think the answer is yes, and it requires trigger mechanisms to ensure its success.

Mr. PASCRELL. Anyone else? Mr. Philips?

Mr. PHILIPS. I would agree that consent and collaboration and cooperation of the seller is really vitally important on that issue. And

I think you could easily run into a situation where you have the

same problem with mothballed sites, which is that because of the

concern for bringing daylight to a particular problem of liability,

that the risk outweighs the reward, and, therefore, you might have
26

fewer applicants. But I think if you have the cooperation of the

seller, I think it is a wonderful idea.

Mr. PASCRELL. Many of these communities are reluctant to do

this before they own the property, because they say once we own

the property and the questions of liability occur, what happens if

we find that the situation is far worse than we ever thought it to

be? Then what? So I am saying to you there are still more pluses

than minuses in the communities being allowed to apply for this

money even before they own it. Is that what I am hearing?

Mr. PHILIPS. I think it is an important option to have.

Mr. PASCRELL. Ms. Bodine, what do you think?

Ms. BODINE. Well, you are talking about a statutory authority

change. We don’t have the authority now. But I would also point

out that the issue that you are raising comes up in two contexts.

You are addressing it in the context of wanting to do the work before the entity is going to acquire the property.

It also comes up in the context of entities that don’t want to acquire the property at all but they are, in effect, good Samaritans

and want to do work on the property without entering the ownership chain. So the ownership requirement has raised issues in the

program.

Mr. PASCRELL. Thank you.

Thank you, Mr. Chairman.

Mr. DUNCAN. Thank you, Mr. Pascrell.

Ms. Schwartz.

Ms. SCHWARTZ. Thank you. I just wanted to follow up. I know

some of my comments in the opening were addressed during your

testimony, but I was wondering if you could be more specific. And

I think, Mr. Philips, you specifically addressed the issue I raised

about green buildings. Maybe others might want to briefly just answer some of these questions.

What more can we do or should we be doing in moving forward

in being able to be an advocate—but I want to be stronger than

that—about green buildings? We are using public dollars here to

clean up brownfields; we are going to put new entities there. We

are all involved in those stages. There was this pilot project.

Really, my question is what more should we be doing? Should we

give priorities to a project that is going to build green buildings?

Do they get priorities now in any of the programs that you are involved in? Should we set more requirements for the kind of buildings that get built on brownfields? Do you feel like that would be

too many strings attached?

Basically, my question is, what more could we be doing through

the reauthorization particularly for EPA or on the local level for us

to be able to be setting standards for the kind of development that

goes into brownfields?

Let us step it up a notch. We know there is much more that we

want to do just for the brownfields if we were to redo it just the

same way. But now that we know so much more, there is so much

more technology available, so many more tools, as we say, in our

toolbox to create these sort of more energy efficient buildings,

should we not use them in this process?

Mr. PHILIPS. I think that is a very astute question. If I could just

begin by saying that we have noticed that there is a strong analogy
27

between the economics of brownfields and the economics of green

building, in that both involve complexities, both potentially involve

greater costs, and both are in the public good; to clean up

brownfields, to engage in more green building.

We at Cherokee have launched our green initiative, where we

were, frankly, ashamed of ourselves, because we were cleaning up

a lot of brownfields and we hadn’t been paying as much attention

to the build-out on these sites, which results in billions and billions

of dollars, sometimes on a per project basis.

So what can we do about that? Well, as landowners, we can

begin to mandate that certain green building standards and sustainable design features are implemented. We have a national

home builder management green home that we are doing with the

National Association of Homebuilders as a showcase for that exact

reason.

But we do recognize that just as municipalities today are giving

more and more incentives, accelerated permitting for green buildings—and also for brownfields in certain cities—we could imagine

a situation where greater economic incentives, perhaps, were available if, in addition to performing the cleanup under the ground,

you could ensure that a certain standard of green building or sustainable design occurred on top of that site. That would be, from

our perspective, a wonderful idea.

Ms. SCHWARTZ. You raised a really good suggestion, which is if

you just accelerated the process, I think that saves dollars along

the way. If you know that you are going to get your approval process done three months sooner, then you just saved the developer

potentially quite a bit of money that then could be used in ways

that would really be more sustainable and more energy efficient.

I guess I would throw it back to the EPA and whether you would

be open to adding some of that kind of language to create the incentives, financially or just logistically, as kind of suggested, as a

financial fallout. Would you be open to doing something like that?

Ms. BODINE. First, I want to say that EPA supports green buildings. In fact, EPA has just moved into some new GSA space at Potomac Yards over in Crystal City, which is a brownfield. The building is a green building; it has natural lighting, it has low flow toilets, it is energy efficient in its use, and it has a rain garden on

the roof. So it is one of these green buildings.

In terms of a preference, well, I guess you have raised two

issues, one is preference and funding for green buildings, and one

is EPA setting standards. On the first, I would respond by noting

that the ranking criteria that Congress put into place for allocating

funding under brownfields are broad criteria, one of which, of

course, is environmental benefits. And the fact that your redevelopment project is a green building then allows it to rank higher on

that criteria.

So I would suggest to you that the ranking criteria already work

and capture that benefit. And then avoid the problem that I would

have with creating a set-aside for a specific type of environmental

benefit. I think that when you are dealing with nationwide problems and trying to address them, you don’t want to say, OK, we

will spend so much money on this benefit and so much money on

that benefit.
28

Ms. SCHWARTZ. Yes. I hadn’t suggested a set-aside, it was really

more about whether, maybe you want to look at this as to whether

the criteria is strong enough, whether there might be some additional incentives or a bit more proactive in acknowledging the future benefits of this, so that it may even be that a project that is

on its way might think about doing this. It was just suggested by

Mr. Philips that he had to sort of step back himself, as a developer,

and say we didn’t initially think of that.

Maybe if someone, during this process, has said, you know, we

really love your project. If, by the way, you also would look at some

of these other aspects, that would enhance the project. I don’t know

if there is that opportunity for that kind of dialogue to go on, but,

again, sometimes an incentive, extra few points on a scale can create that kind of incentive. It is not to tie any hands or to be too

specific as far as location, but it is more to create the incentives,

create the information to be able to make it financially feasible to

do some of these things up front that later on we say why didn’t

we think of that, why didn’t we do it when we were building this

building.

Ms. BODINE. Right. I think we can certainly make people aware

that those environmental benefits count, and should count in the

ranking criteria.

Ms. SCHWARTZ. OK, thank you. And I think my time is up.

Thank you, Mr. Chairman.

Mr. DUNCAN. Thank you very much, Ms. Schwartz.

Ms. Johnson.

Ms. JOHNSON. Thank you very much, Mr. Chairman.

Ms. Bodine, when Congress passed the brownfields law, it determined that the ratio of assessment and cleanup dollars program

should be 4 to 1 in favor of assessment and cleanup, and I think

I heard in your testimony where you indicate the ratio is down to

1.4 to 1. Is that correct?

Ms. BODINE. Are you talking about the funding and——

Ms. JOHNSON. Cleanup versus administrative costs. The grants.

Ms. BODINE. The grants vary from year to year in terms of the

targets and how many assessment targets there are versus how

many cleanup targets. So your statistics I assume are based on a

particular year?

Ms. JOHNSON. Well, the grants for assessment and cleanup are

funded at 35 percent of the authorized level, but the grants to

State programs are funded 99 percent of the authorized level.

Ms. BODINE. I misunderstood your statement. OK. Those authorizations are separate authorizations. The law doesn’t actually establish a ratio, a funding out of a single authorization, but establishes two separate authorization ceilings for the 128 authority and

then the 104(k) authority.

Ms. JOHNSON. Do you know why one is fully funded and the

other one isn’t?

Ms. BODINE. There is a recognition that a great deal of cleanup

activity is going on in the State programs that are funded under

the Section 128 program, so when we fund the State cleanup programs, we are not funding just individual projects, we are funding

a program that then generates many cleanups.
29

So we want to do both, but when you look at the whole concept

of leveraging, by funding capacity, you are then creating an institution that is sustainable and continues cleanups on an ongoing way.

By funding a project, you are creating a cleanup in a single community, but then when the project is done or when the money is used,

that doesn’t sustain and roll over into another project, except

where we have the revolving loan fund.

Ms. JOHNSON. Do you have any figures on that in terms of the

investment versus the return?

Ms. BODINE. What I have are the estimates that I provided in

the testimony. But we are currently in the process of changing the

agreements that we have with States, the funding agreements so

that they will be required to report back to us exactly the data on

what their progress has been and what they are achieving with the

funding so that we will then have hard data on that.

Ms. JOHNSON. Do you know about when you might have that? I

am just curious.

Ms. BODINE. Well, the change in the form is pending approval.

I mean, we have done all the work. I don’t have an estimate right

now, but I can certainly get back to you with one.

Ms. JOHNSON. Thank you very much.

Mr. DUNCAN. All right, thank you, Ms. Johnson.

Ms. Bodine, you can see there has been a lot of interest among

members today and a lot of support for the work that is being done

through this program. Based on your discussions with officials at

EPA since you have been there and your discussions with the staff

of the Appropriations Committees and others, and officials within

OMB and the Administration, do you see similar support? Is the

EPA happy with this program and do you think that they are going

to push for greater funding for this program in the future? And do

you see that same willingness to recommend more in this area by

the Administration and by the Appropriations Committees?

Ms. BODINE. First, yes, I do hear strong support for the program

within the Agency, within the Administration, as well as in Congress. Notwithstanding that strong support, the appropriations history for the program has been steady and it has been at about $160

million a year. And after asking for higher funding over a series

of years and being told no, in the 2007 budget request EPA decided

to take no for an answer and request the funding that has been

provided. So that doesn’t mean any less support for the program,

but a recognition of Congress’ willingness to fund at a particular

level, as well as what Congress has established as priorities across

the board.

Mr. DUNCAN. Well, I guess one thing I might suggest or might

encourage is that perhaps some of the people involved in the appropriations process should be perhaps told a little more forcefully

about the enthusiasm at EPA for this program, if it is there, and

perhaps, more importantly, given specific examples, understandable examples of what has been done and the progress that has

been made through this program.

One thing that Ms. Johnson may have been getting at about the

administrative costs, I am told the EPA currently is using about

$25 million of its own administrative expense budget to help administer this program or oversee these grants. Does this compare
30

or how does this compare to the other administrative costs in the

department? Are we spending too much to administer these grants,

do you think, or what is the situation in that regard?

Ms. BODINE. I think the situation is evolving. What we have, remember, when the program started it was not an authorized program and a smaller program with smaller dollars. What we have

now is a statute with a specific mandate and also specific criteria,

which means that we follow those criteria and have to use FTE to

make sure that we are complying with the law.

So we have EPA employees who are doing the evaluation of the

grant proposals, ranking them so that we are responding to Congressional intent, in terms of putting projects forward, and then

also managing those grants once they are given out to ensure that

the money is spent. That has been discussed this morning. We do

have to make sure that funds are not misspent. And also to do

grant closeouts so that, after the project is completed, we make

sure that the money was spent for its intended purposes.

There is a tension between the good management and good stewardship of Congress’ money and yet that creates oversight costs.

And in looking at that, I recognize the tension.

Mr. DUNCAN. Mr. Philips mentioned a few minutes ago this coalition of organizations involved with brownfields, and they have suggested some ways to simplify the funding and grant process, including the rolling of grant applications, eliminating EPA approval

of brownfield loans, streamlining reporting requirements, and so

forth. What do you think about some of those suggestions?

Ms. BODINE. I am going to respond, but I also would welcome a

continuing dialogue on these issues, because I am not going to say

yes/no. I just want to point out the issues. On the rolling of applications, as I mentioned, there are statutory criteria and a process for

ranking grants, which we do on an annual basis. If we had to do

that on a rolling basis, I don’t know how we would be able to rank

projects against each other to appropriately divide up the funding.

On the reporting requirements, we are trending the other way

because of the desire to get a better understanding of the environmental outcomes, and we are asking grant recipients to report not

just on the number of properties cleaned up and the number of

properties assessed, but we are proposing to change our forms to

have them report, in addition, on the contaminants addressed, the

acres addressed, the media affected, more of the environmental details, again, so that we have a better idea of what is going on and

what we are achieving, what the outcomes are for the funding.

So we recognize that that creates a burden. So, again, we have

to balance increased information for good use of resources against

increased burden.

And you had a third one, which I have now forgotten what it

was.

Mr. DUNCAN. Well, the third one was eliminating the EPA approval of brownfield loans.

Ms. BODINE. In the RLF process, those loans are issued by the

State or local RLF programs. EPA’s role should be to make sure

that they have a good program, and not to review every loan.
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Mr. DUNCAN. Mr. Philips, what do you think about that trending

in the other direction, towards more reporting on the actual results

or accomplishments that Ms. Bodine just referred to?

Mr. PHILIPS. Well, just starting with Ms. Bodine’s first comment

regarding the rolling applications, I think there may be some

logistical ways to overcome the complexity associated with having

a rolling. Other programs in Federal Government allow sort of an

objective scoring opportunity, and there could be an allocation for

different periods of time. Even if it is not rolling, you could break

it out and there could be an allocation of capital for each of those.

So there may be ways to get around that.

There was another.

Mr. DUNCAN. Well, when she said that they are trending towards

more reporting being required on the actual results instead of just

the assessment and the cleanups and so forth. In other words, as

I understand it, what you are talking about, you are requiring

more information on the end, as far as the results, rather than on

the beginning?

Ms. BODINE. We are proposing to do that, yes, that is accurate.

What we require now is number of properties assessed, number of

cleanups.

Mr. PHILIPS. I think that is a great trend. We would like to see

more of that. We would like to see some objective performance

metrics on the back end that may be tied to maybe recapture, even.

In other words, if you don’t perform up to a certain point, if you

don’t eliminate the pollution or if you don’t remediate appropriately

or if you don’t redevelop to create enough jobs or enough new tax

revenue, then maybe some of that money is recaptured. So that

would be an important way to, because we really are not, we can

improve in the way we are looking at the results of some of these

projects.

Mr. DUNCAN. Well, I have got many other questions, including

questions about so-called mothballed sites, many other things, but,

unfortunately, they are going to have to be submitted to you for inclusion within the record, because you just heard the second buzzer

go off and we have got to go to the floor for some votes.

But I will tell you this: there is a lot of interest in this, and you

have been a very informative, very interesting panel, and I certainly appreciate your assistance on this, and will appreciate also

your further submission of answers and materials for the record of

this hearing. But that will conclude the hearing at this point.

[Whereupon, at 11:45 a.m., the subcommittee was adjourned.]
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