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28–185 PDF 

" HOUSE OF REPRESENTATIVES ! 109TH CONGRESS

2d Session 

REPORT

2006

109–616

Union Calendar No. 356

BROWNFIELDS: WHAT WILL IT TAKE TO 

TURN LOST OPPORTUNITIES INTO 

AMERICA’S GAIN?

NINTH REPORT

BY THE

COMMITTEE ON GOVERNMENT REFORM

together with

MINORITY VIEWS

Available via the World Wide Web: http://www.gpoaccess.gov/congress/

index.html 

http://www.house.gov/reform

SEPTEMBER 6, 2006.—Committed to the Committee of the Whole House 

on the State of the Union and ordered to be printed 


congress.#13
(II)

COMMITTEE ON GOVERNMENT REFORM 

TOM DAVIS, Virginia, Chairman 

CHRISTOPHER SHAYS, Connecticut 

DAN BURTON, Indiana 

ILEANA ROS-LEHTINEN, Florida 

JOHN M. MCHUGH, New York 

JOHN L. MICA, Florida 

GIL GUTKNECHT, Minnesota 

MARK E. SOUDER, Indiana 

STEVEN C. LATOURETTE, Ohio 

TODD RUSSELL PLATTS, Pennsylvania 

CHRIS CANNON, Utah 

JOHN J. DUNCAN, JR., Tennessee 

CANDICE S. MILLER, Michigan 

MICHAEL R. TURNER, Ohio 

DARRELL E. ISSA, California 

JON C. PORTER, Nevada 

KENNY MARCHANT, Texas 

LYNN A. WESTMORELAND, Georgia 

PATRICK T. MCHENRY, North Carolina 

CHARLES W. DENT, Pennsylvania 

VIRGINIA FOXX, North Carolina 

JEAN SCHMIDT, Ohio 

BRIAN P. BILBRAY, California 

HENRY A. WAXMAN, California 

TOM LANTOS, California 

MAJOR R. OWENS, New York 

EDOLPHUS TOWNS, New York 

PAUL E. KANJORSKI, Pennsylvania 

CAROLYN B. MALONEY, New York 

ELIJAH E. CUMMINGS, Maryland 

DENNIS J. KUCINICH, Ohio 

DANNY K. DAVIS, Illinois 

WM. LACY CLAY, Missouri 

DIANE E. WATSON, California 

STEPHEN F. LYNCH, Massachusetts 

CHRIS VAN HOLLEN, Maryland 

LINDA T. SANCHEZ, California 

C.A. DUTCH RUPPERSBERGER, Maryland 

BRIAN HIGGINS, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

———

BERNARD SANDERS, Vermont 

(Independent)

DAVID MARIN, Staff Director 

LAWRENCE HALLORAN, Deputy Staff Director 

KEITH AUSBROOK, Chief Counsel 

TERESA AUSTIN, Chief Clerk 

PHIL BARNETT, Minority Chief of Staff/Chief Counsel 

SUBCOMMITTEE ON FEDERALISM AND THE CENSUS

MICHAEL R. TURNER, Ohio, Chairman 

CHARLES W. DENT, Pennsylvania 

CHRISTOPHER SHAYS, Connecticut 

VIRGINIA FOXX, North Carolina 

BRIAN P. BILBRAY, California 

WM. LACY CLAY, Missouri 

PAUL E. KANJORSKI, Pennsylvania 

CAROLYN B. MALONEY, New York 

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California 

JOHN CUADERES, Staff Director 

SHANNON WEINBERG, Counsel 

JON HEROUX, Counsel 

URSULA WOJCIECHOWSKI, Professional Staff Member 

LINDA CARON, PH.D., Professional Staff Member 

JULIANA FRENCH, Clerk 

ADAM BORDES, Minority Professional Staff Member 

LETTER OF TRANSMITTAL 

HOUSE OF REPRESENTATIVES, 

Washington, DC, September 6, 2006. 

Hon. J. DENNIS HASTERT, 

Speaker of the House of Representatives, 

Washington, DC. 

DEAR MR. SPEAKER: By direction of the Committee on Government Reform, I submit herewith the committee’s ninth report to 

the 109th Congress. The committee’s report is based on a study 

conducted by its Subcommittee on Federalism and the Census. 

TOM DAVIS, 

Chairman. 

(III) 

(V)

C O N T E N T S 

Page 

I. Executive Summary ....................................................................................... 1

II. Background .................................................................................................... 2

III. Hearings ......................................................................................................... 10

IV. Findings and Recommendations ................................................................... 46

VIEWS

Minority views of Hon. Henry A. Waxman, Hon. Tom Lantos, Hon. Carolyn 

B. Maloney, Hon. Elijah E. Cummings, Hon. Wm. Lacy Clay, Hon. Diane 

E. Watson, and Hon. Brian Higgins ................................................................... 62

Union Calendar No. 356

109TH CONGRESS REPORT " HOUSE OF REPRESENTATIVES ! 2d Session 109–616

BROWNFIELDS: WHAT WILL IT TAKE TO TURN LOST 

OPPORTUNITIES INTO AMERICA’S GAIN? 

SEPTEMBER 6, 2006.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. TOM DAVIS, from the Committee on Government Reform 

submitted the following 

NINTH REPORT

together with 

MINORITY VIEWS 

On July 20, 2006, the Committee on Government Reform approved and adopted a report entitled, ‘‘Brownfields: What Will it 

Take to Turn Lost Opportunities Into America’s Gain?’’ The chairman was directed to transmit a copy to the Speaker of the House. 

I. EXECUTIVE SUMMARY

There are approximately 450,000 to 1 million brownfields sites 

across the Nation. These sites are often located in urban areas and 

sit on valuable pieces of property that would, if redeveloped, spur 

community economic development with new jobs, shopping and living choices. The U.S. Environmental Protection Agency’s [EPA] 

Brownfields Program was established as an independent program 

with dedicated appropriations in 2002 legislation to fund redevelopment of these contaminated sites. 

The EPA program reports a significant number of sites assessed 

and remediated utilizing Federal grant dollars. Numerous States 

instituted incentive programs over recent years, which spurred further brownfield remediation and redevelopment within their borders. Brownfields remediation and redevelopment reduces community blight, safeguards the local environment, and spurs economic 

revitalization of the communities in which these properties exist. 

There remains, however, a daunting portion of the Nation’s 

brownfields untouched. 

Chaired by Representative Michael R. Turner, the Subcommittee 

on Federalism and the Census [the ‘‘Subcommittee’’] held a series 

of hearings to determine: (1) the state of brownfields redevelopment 

2

1Final transcript of the fifth and final hearing, held Mar. 13, 2006 in Bridgeport, CT, unavailable at time of print. 2 Comprehensive Environmental Response, Compensation, and Liability Act of 1980, Public 

Law No. 96–510, § 101(39), 94 Stat. 2767 (codified as amended at 42 U.S.C. § 9601(39) (2006)). 3Government Accountability Office, Brownfield Redevelopment, Report No. GAO–05–94, at 1 

(2004). 

across the country; (2) the effect of the Federal and numerous State 

brownfields programs on remediation and redevelopment; (3) and 

what further actions Congress could take to encourage more aggressive remediation and redevelopment efforts. The Subcommittee 

held five hearings on the matter, four of which are discussed in 

depth below.1

On April 5, 2005, the Subcommittee held its first hearing regarding brownfield redevelopment. The hearing, entitled Lands of Lost 

Opportunity: What Can Be Done to Spur Redevelopment at America’s Brownfield Sites?, focused on determining what progress has 

been made under the EPA program and what can be done to spur 

further redevelopment efforts. 

During its Brownfields and the Fifty States: Are State Incentive 

Programs Capable of Solving America’s Brownfields Problem? hearing on September 13, 2005, the Subcommittee explored the various 

types of State incentive programs, how well they work, and whether these programs, in conjunction with current Federal efforts, are 

enough to address the Nation’s brownfields. 

The Subcommittee staged three field hearings to gather local perspectives on the same questions asked during the first hearing. On 

May 16, 2005, the Subcommittee held its first field hearing on the 

issue, entitled The Ohio Experience: What Can Be Done to Spur 

Brownfield Redevelopment in America’s Heartland?, in Cleveland, 

OH. The Subcommittee held its second field hearing, entitled The 

Challenge of Brownfields: What are the Problems and Solutions in 

Redeveloping Pennsylvania’s Lehigh Valley Communities?, on October 25, 2005 in Bethlehem, PA. On March, 13, 2006, the Subcommittee held its third field hearing in Bridgeport, CT, entitled 

The Connecticut Experience: What Can be Done to Spur Brownfield 

Redevelopment in the New England Corridor? During these hearings, the Subcommittee closely examined the condition of 

brownfields in the hosting States as well as the combined State, 

local, and private sector efforts to address the issue. 

II. BACKGROUND

A. DEFINING THE PROBLEM

Brownfields are ‘‘real property, the expansion, redevelopment, or 

reuse of which may be complicated by the presence or potential 

presence of a hazardous substance, pollutant, or contaminant.’’ 2

According to the U.S. Government Accountability Office [GAO], 

there are an estimated 450,000 to 1 million abandoned or underutilized brownfield sites across the Nation.3 Often these areas are located in urban areas and, but for the presence of hazardous substances, are valuable pieces of property. Brownfields range in size 

from an abandoned gas station to an abandoned factory. Despite 

the prime location of many brownfield sites, developers often 

choose ‘‘greenfields,’’ also called ‘‘greenspace,’’ for development 

projects because of liability fears and the significant additional 

project cost to redevelop brownfields. Brownfields are thus left unVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00008 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
3

4The Ohio Experience: What Can Be Done to Spur Brownfield Redevelopment in America’s 

Heartland? Before the Subcommittee on Federalism and the Census of the House Committee 

on Government Reform, 109th Cong. 10 (2005) [hereinafter Ohio Brownfields hearing] [statement of Representative Stephanie Tubbs Jones]. 5See JONATHAN P. DEASON, GEORGE WILLIAM SHERK, AND GARY A. CARROL, ENVIRONMENTAL

AND ENERGY MANAGEMENT PROGRAM, THE GEORGE WASHINGTON UNIVERSITY, PUBLIC POLICIES

AND PRIVATE DECISIONS AFFECTING THE REDEVELOPMENT OF BROWNFIELDS: AN ANALYSIS OF

CRITICAL FACTORS, RELATIVE WEIGHTS AND AREAL DIFFERERNTIALS at 5.3 (September 2001) (visited June 15, 2006) <http://www.gwu.edu/∼eem/Brownfields/project—report/report.htm>. 6See COUNCIL FOR URBAN ECONOMIC DEVELOPMENT, BROWNFIELDS REDEVELOPMENT: PERFORMANCE EVALUATION 2, 28 (1999). 7 Comprehensive Environmental Response, Compensation, and Liability Act of 1980, Public 

Law No. 96–510, 94 Stat. 2767 (codified as amended 42 U.S.C. 9601 et seq. (2006)). 8See Congressional Research Service, Brownfields and Superfund Issues in the 108th Congress, Order Code IB10114, at i (2005). 9See id. at 5. 

touched, exacerbating community blight and resulting in depressed 

property values and decreased tax revenues. 

B. MISSED OPPORTUNITIES

Redevelopment of brownfield sites not only reduces urban sprawl 

and preserves open greenspace, it also often has a domino effect on 

the surrounding community and economy. As Representative 

Stephanie Tubbs Jones explained, brownfields ‘‘are unused properties that can serve as businesses, homes, education facilities—the 

possibilities are endless. A brownfield today can be the economic 

engine for a city tomorrow.’’ 4

For every acre of brownfields that is redeveloped, 4.5 acres of 

greenspace is saved.5 For every dollar Federal, State, and local governments spend on brownfields programs, communities see a return of almost $2.50 in private investment.6 Further, with the new 

businesses and living spaces created by brownfield redevelopment 

projects comes numerous jobs—during the cleanup, development, 

and post-development phases—as well as improved or new infrastructure and transportation options. 

C. LEGISLATIVE HISTORY

1. The Comprehensive Environmental Response, Compensation, and 

Liability Act of 1980

The EPA first addressed brownfields administratively in 1995 

under the Superfund Program created by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 

[CERCLA].7 Congress established the Superfund Program for the 

cleanup of the Nation’s worst hazardous waste sites.8 By 2000, 92 

percent of the sites listed on the Superfund National Priorities List 

[NPL] were either undergoing cleanup, removed from the NPL because cleanup was complete, or were removed from the list because 

remediation goals were achieved.9 The focus of the hazardous 

waste debate therefore turned to less seriously contaminated sites, 

i.e., brownfields. 

The purpose of the EPA’s administrative Brownfields Program 

was to address sites contaminated with hazardous waste but which 

did not pose a serious enough threat to public health or to the environment to qualify for Superfund assistance under CERCLA. Beginning in 1997, Congress officially recognized the program with 

earmarked funding within the annual Superfund appropriation. 

4

10Small Business Liability Relief and Brownfields Revitalization Act, Public Law No. 107–

118, 115 Stat. 2356 (codified as amended 42 U.S.C. 9601 et seq. (2006)) [hereinafter 2002 

Brownfields Act]. 11 Congress passed the 2002 Brownfields Act on December 20, 2001. President George W. 

Bush signed the bill into law on January 11, 2002. 12See 42 U.S.C. § 9601 (35)(B)(ii). CERCLA creates a defense against liability for a landowner 

who unknowingly purchased contaminated land so long as the purchaser made ‘‘all appropriate 

inquiry’’ prior to the transaction. 13Standards and Practices for All Appropriate Inquiry, 40 C.F.R. pt. 312 (2005). 

2. The Brownfields Revitalization and Environmental Restoration 

Act of 2001

In 2001, Congress passed the Brownfields Revitalization and Environmental Restoration Act of 2001 [2002 Brownfields Act].10 11

The 2002 Brownfields Act established a formal brownfields program within EPA with a total annual authorization through fiscal 

year 2006 of $250 million. Specifically, the 2002 Brownfields Act 

authorizes $200 million for: (1) assessment grants to characterize, 

assess, and conduct planning at brownfields sites; (2) a remediation 

grant program providing direct cleanup grants and revolving loan 

funds [RLF]; and (3) funding for technical assistance, training, and 

research. Of that $200 million, the 2002 Brownfields Act authorizes 

$50 million (or 25 percent of the appropriation if the appropriation 

is less than $200 million) for the assessment and cleanup of lowrisk sites contaminated by petroleum products. The 2002 

Brownfields Act authorizes an additional $50 million for carrying 

out § 128 of CERCLA (providing assistance to States in establishing 

or enhancing their voluntary cleanup programs [VCPs]). 

a. Liability Relief Under the 2002 Brownfields Act 

In addition to authorizing a dedicated stream of funding for 

brownfields remediation, perhaps more importantly, the 2002 

Brownfields Act also addressed liability issues, which are of preeminent concern for brownfields owners and developers. Under 

CERCLA, generators of hazardous substances, transporters who selected the disposal site, and past and present owners of a 

brownfield site can all be held liable for contamination. Superfund 

liability for cleanup and related costs could also extend to parties 

who may not have been responsible for the activities that caused 

the site contamination. CERCLA allows these ‘‘potentially responsible parties’’ [PRPs] to sue other parties for contribution to the 

cleanup costs, which may result in subjecting hundreds of parties 

to Superfund liability for a single site. 

This vast scheme of liability was an enormous disincentive to 

purchase, cleanup, and redevelop brownfields. The 2002 

Brownfields Act addressed this impediment by limiting liability for 

owners in certain situations. 

First, the act clarified the CERCLA ‘‘innocent landowner’’ defense by requiring the EPA to issue regulations defining the ‘‘all 

appropriate inquiry’’ required for a purchaser to be considered an 

innocent landowner.12 13

Second, the 2002 Brownfields Act forbid the Federal Government 

from intervening at sites being cleaned up under a State VCP except in specific circumstances. EPA describes these programs as 

permitting ‘‘volunteers or private parties to initiate the identification and cleanup of sites through the use of less extensive administrative procedures. In some cases, these private parties can obtain 

5

14 U.S. Environmental Protection Agency, EPA Issues Final Draft State Voluntary Cleanup 

Guidance (Aug. 8, 1997) (last modified Mar. 14, 2006) <http://www.epa.gov/swerosps/bf/html-doc/

prepavcp.htm>. 15See 42 U.S.C. § 9628 (b)(1)(B). 16See 42 U.S.C. § 9607(q), (r)(1). 17Making appropriations for the Department of the Interior, environment, and related agencies for the fiscal year ending September 30, 2007, and for other purposes, H.R. 5386, 109th 

Cong. Title II.

some relief from future [S]tate liability for past contamination.’’ 14

The 2002 Brownfields Act prevents Federal enforcement intervention except where (1) the State requests assistance; (2) the EPA determines contamination has or will migrate across State lines or 

onto federally-owned or -controlled property; (3) the EPA determines that a release or threatened release may present an imminent and substantial endangerment to the public health or welfare 

or the environment; or (4) the EPA, after consulting with the State, 

determines that newly discovered information, not previously 

known by the State, requires further remediation to protect public 

health, public welfare, or the environment.15

Finally, liability is limited for owners of land that is contaminated by adjoining property as well as for prospective purchasers 

of known contaminated property.16

b. Appropriations Under the 2002 Brownfields Act 

While Congress authorized $250 million per year for the 

Brownfields Program for fiscal years 2002 to 2006, it has yet to appropriate that level of funding. Overall, Congress appropriated the 

program only $167.7 million in fiscal year 2003, $171 million in fiscal year 2004, $165 million in fiscal year 2005, and $165 million 

in fiscal year 2006. The appropriation for fiscal year 2007 has yet 

to be enacted, but the House passed legislation on May 18, 2006 

appropriating just $163.2 million for the fiscal year.17 As the chart 

below details, in each of these fiscal years, Congress appropriated 

the full $50 million for carrying out § 128 of CERCLA, relating to 

assistance to States for their VCPs, and appropriated only between 

$115 million and $121 million of the authorized $200 million for 

carrying out § 104(k) of CERCLA, pertaining to brownfields revitalization funding. 

6


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7

18Federal Grants Wire, Brownfields Assessment and Cleanup Cooperative Agreements (66.818) 

(visited June 15, 2006) <http://www.federalgrantswire.com/brownfields—assessment 

—and—cleanup—cooperative—agreements.html>. 19See U.S. Environmental Protection Agency, EPA Announces $73.1 Million in National 

Brownfields Grants in 37 States and Seven Tribal Communities (June 20, 2003) (last modified 

Mar. 14, 2006) <http://www.epa.gov/brownfields/news/pr062003.htm>; U.S. Environmental Protection Agency, 42 States, Puerto Rico, Five Tribes Share Record $75.4 Million in Brownfields 

Grants (June 15, 2004) (last modified Aug. 2, 2005) <http://yosemite.epa.gov/opa/admpress.nsf/

0/09DA59161288B3DD85256EB4004894D6?OpenDocument>; U.S. Environmental Protection 

Agency, 75.9 Million in Brownfield Grants Announced (May 10, 2005) (last modified May 20, 

2006) <http://www.epa.gov/brownfields/news/pr051005.htm>; U.S. Environmental Protection 

Agency, $70 Million in Grants Brings Blighted Property Back to Life (May 12, 2006) (last modified May 17, 2006) <http://yosemite.epa.gov/opa/admpress.nsf/names/hq—2006–5–12—

brownsfield>. 20See U.S. Environmental Protection Agency, EPA Awards $2 Million to Seven States for New 

Brownfields Job Training Grants in Ten Communities (May 16, 2003) (last modified Mar. 14, 

2006) <http://www.epa.gov/brownfields/html-doc/pr051603.htm>; U.S. Environmental Protection 

Agency, 42 States, Puerto Rico, Five Tribes Share Record $75.4 Million in Brownfields Grants 

(June 15, 2004) (last modified Aug. 2, 2005) <http://yosemite.epa.gov/opa/admpress.nsf/0/

09DA59161288B3DD85256EB4004894D6?OpenDocument>; U.S. Environmental Protection 

Agency, 75.9 Million in Brownfield Grants Announced (May 10, 2005) (last modified May 20, 

2006) <http://www.epa.gov/brownfields/news/pr051005.htm>; U.S. Environmental Protection 

Agency, EPA Announces $2 Million in Brownfields Job Training Grants (Dec. 22, 2005) (last 

modified Dec. 22, 2005) <http://yosemite.epa.gov/opa/admpress.nsf/0/

354601A5988960E0852570DF0065D4D7?OpenDocument>. 21See Office of Brownfields Cleanup and Redevelopment (OBCR), EPA’s Brownfields Program, 

at 5 (March 2005) (on file). 22See U.S. Environmental Protection Agency, $70 Million in Grants Brings Blighted Property 

Back to Life (May 12, 2006) (last modified May 17, 2006) <http://yosemite.epa.gov/opa/

admpress.nsf/names/hq—2006–5–12—brownsfield>. 23 U.S. Environmental Protection Agency, State Voluntary Cleanup Programs (last modified 

Mar. 23, 2006) <http://www.epa.gov/compliance/cleanup/redevelop/state.html>. 

D. THE EPA BROWNFIELDS PROGRAM

Through the Brownfields Program, EPA seeks to change its role 

from ‘‘regulatory hammer’’ to an enabler of economic development 

and environmental protection. The program currently has over 500 

cities enrolled in the program, focusing on four main themes: protecting the environment, promoting partnerships, strengthening 

the marketplace, and sustaining reuse of redeveloped brownfields. 

Between the administrative inception of the EPA’s Brownfields 

Program in 1995 and the enactment of the Brownfields Act in early 

2002 (the act passed both legislative chambers in late 2001 but was 

signed by the President in January 2002), EPA awarded 437 assessment grants and 143 grants for establishing revolving loan 

funds to finance cleanups.18 From fiscal year 2003 to fiscal year 

2006, after enactment of the 2002 Brownfields Act and the formal 

creation of the Brownfields Program, the EPA selected 628 assessment grants, 363 cleanup grants, 71 revolving loan fund grants, 

and 49 job training grants for a total of more than 1,100 

grants.19 20

Overall, the Brownfields Program, since its administrative inception in 1995, has touched 50 States and 40 Tribes.21 Further, the 

program has leveraged over $8 billion in private investment for 

cleanup and redevelopment costs, supported assessments at over 

8,300 properties, and created more than 37,500 jobs.22

The EPA’s Brownfields Program does not exist alone, however. 

EPA works with 23 other Federal agencies for which redevelopment is part of their mission. Further, every State has a variation 

of a cleanup program—a VCP. The EPA ‘‘foster[s] more effective 

and efficient working relationships’’ with its State partners and encourages the cleanup of sites under VCPs through the use of nonbinding, formal Memoranda of Agreement [MOAs].23

8

24 Id. 25See The Reauthorization of the Brownfields Program—Successes and Future Challenges 

Hearing before the Subcommittee on Water Resources and the Environment of the House Committee on Transportation and Infrastructure, 109th Cong. (June 8, 2006) (visited June 13, 2006) 

<http://www.house.gov/transportation/water/06–06–08/Bodine.pdf> (statement of Susan Parker 

Bodine, Assistant Administrator, Office of Solid Waste and Emergency Response, U.S. Environmental Protection Agency). 26 U.S. Environmental Protection Agency, State Voluntary Cleanup Programs (last modified 

Mar. 23, 2006) <http://www.epa.gov/compliance/cleanup/redevelop/state.html>. 27 Resource Conservation and Recovery Act of 1976, Public Law No. 94–580, 90 Stat. 2795 

(codified as amended 42 U.S.C. § 6901 et seq. (2006)). 28See id. See also U.S. Environmental Protection Agency, One Cleanup Program (last modified 

Apr. 18, 2006) <http://epa.gov/oswer/onecleanupprogram/index.htm>. 29See U.S. Government Accountability Office, BROWNFIELD REDEVELOPMENT Stakeholders Report That EPA’s Program Helps to Redevelop Sites, but Additional Measures Could 

Complement Agency Efforts GAO–05–94 (November 2004) [hereinafter GAO Report]. 30See GAO Report at page 4. See also Lands of Lost Opportunity: What Can Be Done to Spur 

Redevelopment at America’s Brownfield Sites? Before the Subcommittee on Federalism and the 

Census of the House Committee on Government Reform, 109th Cong. 23 (2005) [hereinafter 

Brownfield Overview hearing] (statement of John Stephenson, Director, Natural Resources and 

Environment, U.S. Government Accountability Office).

According to EPA, ‘‘Voluntary cleanup programs . . . are typically the State authority to address brownfields.’’ 24 These programs are vital to cleanup efforts, as evidenced by the estimated 

53,000 sites currently enrolled in VCPs and the estimated 48,000 

sites that have undergone remediation efforts in accordance with a 

VCP.25 A MOA links EPA’s cleanup and enforcement efforts to its 

State partners’ efforts via a VCP. ‘‘Specifically, MOAs define EPA 

and [S]tate roles and responsibilities and include a general statement of EPA intent regarding certain sites cleaned up under the 

oversight of a VCP.’’ 26 Some MOAs also address sites subject to liability under the Resource Conservation and Recovery Act [RCRA] 

while some MOAs address sites undergoing cleanups under multiple EPA programs in accordance with EPA’s One Cleanup Program.27 28

E. GAO REPORT

At the request of the Government Reform Committee Chairman 

Tom Davis and now Subcommittee Chairman Michael R. Turner, 

the Government Accountability Office [GAO] reviewed the EPA’s 

Brownfields Program and the general state of brownfields redevelopment across the Nation. GAO issued its report in December 

2004.29 Specifically, the report focused on (1) stakeholder views of 

the EPA’s contribution to brownfields cleanup and redevelopment; 

(2) EPA methodology of measuring program accomplishments; and 

(3) stakeholder views on how to improve or complement the EPA 

Brownfields Program.30 GAO summarized its findings: 

Stakeholders reported that EPA’s Brownfields Program 

provides an important contribution to site cleanup and redevelopment efforts by funding activities that might not 

otherwise occur. EPA grants typically support the initial 

stages of brownfield redevelopment and are important in 

that they fund activities and address sites—such as those 

with more complex cleanup requirements, less desirable locations, or liability or ownership issues—that private lenders and other government programs often do not, according 

to stakeholders. EPA’s site assessment grants provide recipients with seed money for identifying contamination 

and estimating cleanup costs, while the agency’s revolving 

loan fund grants provide funding for cleanup activities. 

9

However, EPA is often one of several funding sources for 

brownfield cleanup and redevelopment. All of the grant recipients we interviewed used EPA grants in conjunction 

with funding from [S]tate, local, and/or other [F]ederal 

sources to address brownfield sites. . . . [O]fficials in all 

10 of the [S]tates we contacted reported that EPA assistance has been crucial to establishing and expanding the 

scope of their voluntary cleanup programs. These officials 

said that without EPA’s grants, their voluntary cleanup 

programs would not have had the resources to undertake 

activities such as compiling [S]tate inventories of 

brownfield sites, performing limited brownfield site assessments, and developing needed guidance and information 

for program participants.

The performance measures EPA has used to date have 

provided information on accomplishments in some but not 

all key areas of the Brownfields Program, thereby limiting 

the agency’s—and the Congress’—ability to determine the 

extent to which the program is achieving its goals. First, 

EPA’s current brownfield performance measures do not 

fully address the program’s central objectives. While EPA 

has reported to the Congress on the cumulative sites assessed, jobs generated, and cleanup and redevelopment 

funds leveraged by the program, the agency has not begun 

reporting data on grant recipients’ activities to clean up 

and redevelop properties, which is one of its primary stated objectives. Second, EPA does not collect or report data 

on the assistance it provides to [S]tate voluntary cleanup 

programs. Although this is not one of the program’s strategic objectives, these activities are a significant part of 

EPA’s brownfield efforts, accounting for about one-third of 

the total program funds in each of fiscal years 2003 and 

2004. Third, although EPA’s overall mission is to protect 

human health and the environment, the agency has not 

yet developed measures to determine the extent to which 

the Brownfields Program helps reduce environmental 

risks. Acknowledging these limitations, in fiscal year 2004, 

EPA began collecting additional information—such as the 

number of acres ready to be reused—which agency officials 

believe will allow them to develop additional measures to 

gauge the program’s achievements. Similarly, EPA is developing performance measures for voluntary cleanup programs, but the agency has not yet proposed that it include 

such measures in its performance reports. We are recommending that EPA continue its efforts to develop additional measures to gauge program achievements—especially those addressing the program’s environmental and 

[S]tate voluntary cleanup aspects—and incorporate them 

into annual performance measures that are reported to the 

Congress.

Stakeholders identified three potential options for improving or complementing EPA’s Brownfields Program. First, 

they suggested eliminating the provision in the 

Brownfields Act that, in effect, makes landowners who 

10

31 Id. at 4–6 (citations omitted). 32Section 1956 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users nullified the provision defining a bona fide prospective purchaser as a person that 

acquired ownership of land after the January 11, 2002 enactment date of the 2002 Brownfields 

Act. Acquisition date is no longer a factor in landowner eligibility for Brownfields Program grant 

funding. See Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for 

Users (SAFETEA–LU), Public Law No. 109–59, § 1956, 119 Stat. 1144, 1515 (2005).

purchased a brownfield site prior to January 2002 ineligible for EPA grant funding. While the Consolidated Appropriations Act for Fiscal Year 2004 temporarily suspended the eligibility date for that fiscal year, stakeholders 

asserted that the clause continues to discourage brownfield 

redevelopment by limiting program eligibility. Second, 

stakeholders suggested changes to address the underutilization of revolving loan funds. As of November 2004, 

grant recipients had loaned out less than $29 million 

(about 17 percent) of the $168 million in revolving loan 

fund grants awarded by EPA. According to stakeholders, 

the stringent technical and administrative requirements to 

establish a revolving loan fund have discouraged grant recipients from using the funds. While EPA officials maintain that provisions in the Brownfields Act eased administrative requirements, stakeholders believed that technical 

requirements continue to be the primary impediment to 

making loans. Additionally, stakeholder comments indicated that EPA could achieve greater results by giving priority to applicants with proven administrative expertise or 

to coalitions of agencies that could consolidate administrative functions and thereby produce economies of scale. 

Third, stakeholders believed that a [F]ederal tax credit, 

which would allow developers to offset a portion of their 

[F]ederal income tax with their remediation expenditures, 

could complement EPA’s program by attracting developers 

to brownfield sites on a broader national basis.31 32

The findings of the GAO report are discussed in further detail 

below. 

III. HEARINGS

A. HEARING ON FEDERAL BROWNFIELD REDEVELOPMENT PROGRAMS

AND THE STATUS OF BROWNFIELDS REDEVELOPMENT, APRIL 25, 2005

On April 25, 2005, the Subcommittee began its oversight of Federal brownfields redevelopment efforts. During the Lands of Lost 

Opportunity: What Can Be Done to Spur Redevelopment at America’s Brownfield Sites? hearing, the Subcommittee heard from two 

panels of witnesses. On the Federal panel were Thomas Dunne, 

Deputy Assistant Administrator in the Office of Solid Waste and 

Emergency Response of the U.S. EPA; and John Stephenson, Director of the Natural Resources and Environment office within GAO. 

The Subcommittee also received testimony from the stakeholder 

community represented by the Honorable Don Plusquellic, mayor of 

the city of Akron, OH, and president of the U.S. Conference of 

Mayors; James E. Maurin, chairman of the International Council 

of Shopping Centers and board member of the Real Estate Roundtable; Jonathan Philips, senior director of Cherokee Investment 

11

33 Brownfield Overview hearing at 10–11 (statement of Thomas Dunne, Deputy Assistant Administrator, Office of Solid Waste and Emergency Response, U.S. Environmental Protection 

Agency). 34See id. at 12. 35 Id.

Partners, LLC; and Douglas L. Steidl, president of the American 

Institute of Architects. 

At the center of the hearing were the results of GAO’s report on 

the EPA Brownfields Program and the general state of brownfield 

redevelopment. The Subcommittee also explored ways of spurring 

further redevelopment outside of current Federal efforts. 

EPA’s Thomas Dunne launched the hearing with a description of 

the agency’s multi-faceted Brownfields Program:

Assessment grants provide funding to inventory, characterize, assess, conduct planning and community involvement related to brownfields. Environmental site assessments provide the information that communities and property owners need to move forward with reuse. . . . Over 

the years, EPA has awarded hundreds of assessment 

grants, generally $200,000 each, to communities large and 

small. The Brownfields Law expanded the eligibility to 

new entities such as redevelopment authorities and allowed additional assessment-related activities such as 

planning to be done by grant recipients. Over the past two 

years under the new law, EPA has awarded 270 assessment grants for $67.9 million.

In addition, EPA has the authority to provide Targeted 

Brownfields Assessments. These single-property assessments are designed to help communities on a more direct 

basis, especially those lacking EPA assessment grants. 

EPA provided $6.6 million for Targeted Brownfields Assessment in fiscal years 2003 and 2004.

Under its new authority, EPA may now provide direct 

cleanup grants of up to $200,000 per site to public sector 

and non-profit property owners. In the past two years, 

EPA has awarded 143 cleanup grants for $25.5 million....

The Brownfields Program also supports property cleanup 

by providing grants to capitalize cleanup revolving loan 

funds. The Brownfields Revolving Loan Fund grants provide [S]tate and local governments with capital to make 

sub-grants or low or no interest loans to finance 

brownfields cleanup. Over the past two years, EPA has 

awarded 43 revolving loan fund grants for $47.3 million.33

In addition to assessment and cleanup grants, EPA also awards 

grants for brownfields job training, research, and technical assistance.34 These grant dollars have ‘‘result[ed] in the placement of 

more than 1400 individuals with an average wage of $13 an hour,’’ 

Dunne reported.35

12

36 Id. at 10. 37 Brownfields Job Training Grants are designed to ensure economically distressed communities benefit both from the environmental and economic development aspects of redevelopment 

projects. The EPA’s Brownfield Job Training Grants ‘‘address the issue of providing environmental employment and training for residents in communities impacted by Brownfields. EPA’s 

Brownfields Program is an organized commitment to help communities revitalize Brownfields 

properties both environmentally and economically, mitigate potential health risks, and restore 

economic vitality to areas where Brownfields exist.’’ U.S. Environmental Protection Agency, 

Brownfields Job Training Pilots/Grants (last modified Mar. 14, 2006) <http://www.epa.gov/

brownfields/job.htm%23abt>. 

Brownfields Job Training Grants are also designed to ensure an adequate workforce of trained 

environmental professionals exists. ‘‘EPA believes that workforce development and job training 

are the critical links between environmental cleanup and safe and sustainable community redevelopment. These efforts help to guarantee that brownfields cleanup and redevelopment have 

the trained workforce needed to revitalize contaminated properties, and that local community 

members have an opportunity to compete in the economic mainstream.’’ U.S. Environmental 

Protection Agency, Workforce Development Fact Sheet (last modified Mar. 14, 2006) <http://

www.epa.gov/brownfields/html-doc/wrkfrc2.htm>. 38 Brownfield Overview hearing at 25 (statement of John Stephenson, Director of the Natural 

Resources and Environment, U.S. Government Accountability Office). 39 Id. at 26. 40 Id. at 25. 41 Id. at 26. 42 Id. 43See id. 44 Id. 

In total, ‘‘EPA has awarded more than 480 brownfields grants in 

both fiscal year 2003 and fiscal year 2004 totaling more than $145 

million,’’ Dunne testified.36 37

According to stakeholders, these funds, although generally not 

directly involved in redevelopment activities, ‘‘provide[] an important contribution to site cleanup and redevelopment by funding activities that might not otherwise occur,’’ testified John Stephenson.38 Stakeholders believe these Federal dollars are important because they support the initial stages of remediation, providing 

‘‘seed money for identifying contamination and estimating cleanup 

costs, while its revolving loan fund grants support cleanup activities.’’ 39 Additionally, Stephenson reported, EPA dollars often fund 

remediation activities of sites ‘‘with more complex cleanup requirements, less desirable locations, or liability or ownership issues—

[sites] that private lenders and others often do not [underwrite.]’’ 40

State officials also emphasized the vital role EPA funds play in establishing or expanding State voluntary cleanup programs. 

‘‘[W]ithout EPA’s grants, [State] voluntary cleanup programs would 

not have had the resources to undertake activities such as compiling [S]tate inventories of brownfield sites and performing site assessments,’’ Stephenson related.41

Despite the perceived success of the Brownfields Program and 

the positive remarks from the stakeholder community, GAO was 

unable to measure the actual impact of EPA funding for two reasons. First, GAO found that ‘‘the impact of EPA’s funding is difficult to isolate because it is often combined with funds from other 

sources.’’ 42 Second, GAO determined EPA’s performance measures 

for the Brownfields Program are inadequate, limiting both EPA’s 

and Congress’ ability to gauge progress toward the major goals of 

the program.43 Stephenson testified, ‘‘[W]hile EPA has reported the 

cumulative number of sites assessed, jobs generated, and amounts 

of cleanup and redevelopment funds leveraged by the program, the 

agency has not begun reporting data on grant recipients’ activities 

to clean up and redevelop properties—one of its primary stated objectives.’’ 44

13

45 Id. 46 Id. 47See id. at 25. 48 Id. at 26. 49See id. at 35. 50See id. See also Making appropriations for Agriculture, Rural Development, Food and Drug 

Administration, and Related Agencies for the fiscal year ending September 30, 2004, and for 

other purposes, Public Law No. 108–199, Title III, 118 Stat. 3, 408 (2004); Making appropriations for foreign operations, export financing, and related programs for the fiscal year ending 

September 30, 2005, and for other purposes, Public Law No. 108–447, Title III, 118 Stat. 2809, 

3332 (2004); Making appropriations for the Department of the Interior, environment, and related agencies for the fiscal year ending September 30, 2006, and for other purposes, Public Law 

No.109–54, Title II, 119 Stat. 499, 531 (2005). 51 Id. 

Additionally, although it is not one of the primary objectives of 

the Brownfields Program, assistance to State VCPs represents approximately one-third of the program’s fund expenditures. However, ‘‘EPA does not collect data on its assistance to [S]tate voluntary cleanup programs, for such activities as compiling inventories of brownfield sites, performing site assessments, and developing guidance for program participants,’’ Stephenson reported.45

Finally, GAO noted, ‘‘although EPA’s overall mission is to protect 

human health and the environment, the agency has not yet developed measures to determine the extent to which the Brownfields 

Program helps reduce environmental risks.’’ 46

In addition to describing the successes of the Brownfields Program, GAO reported that numerous stakeholders suggested a number of improvements or complements to the EPA program. 

Interviewees covered the range of possible stakeholders, from site 

assessment grantees and revolving loan recipients to developers, 

attorneys, nonprofit organizations, and State and local government 

officials.47 GAO identified the three primary stakeholder suggestions: (1) eliminate the 2002 Brownfields Act provision making 

landowners who acquired a brownfield site prior to January 11, 

2002 ineligible for Brownfield Program grant funds; (2) modify the 

RLF grant program to encourage greater program utilization by addressing the ‘‘stringent technical and administrative requirements 

to establish a revolving loan’’ and by ‘‘giving priority to applicants 

with proven administrative expertise or to coalitions of agencies 

that could consolidate administrative functions associated with establishing and managing a revolving loan fund and thereby 

produce economies of scale.’’ and (3) complement the Brownfields 

Program by encouraging private investment through a Federal tax 

credit for remediation expenses.48

According to GAO, stakeholders suggesting elimination of the 

Brownfields Program’s eligibility date provisions argue that doing 

so would expand the impact of the program on redevelopment efforts, enabling those who purchased land prior to 2002 to obtain 

funds for remediation and redevelopment.49 While Congress temporarily suspended this provision in the fiscal year 2004, fiscal year 

2005, and fiscal year 2006 appropriations bills, stakeholders contend the clause continues to discourage redevelopment.50 Stakeholders specifically cited the ‘‘many local governments that were 

actively addressing brownfields by acquiring these sites before the 

law was enacted [and now] have been penalized by the act’s eligibility date.’’ 51 EPA and other organizations reported to GAO during its investigation that a number of brownfields grant applicaVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00019 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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52See id. 53See Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users 

(SAFETEA–LU), Public Law No. 109–59, § 1956, 119 Stat. 1144, 1515 (2005). 54See id. at 36. 55See 42 U.S.C § 9604(k)(1) (‘‘Eligible Entity’’ defined); 42 U.S.C. § 9604(k)(4)(A)(ii) ($1 million 

per grant authorized). 56 42 U.S.C. §§ 9604(k)(3)(A)(i), 9604(k)(3)(B). 57See 42 U.S.C. § 9604(k)(3)(B)(ii). 58See U.S. Environmental Protection Agency, Proposal Guidelines for Brownfields Assessment, 

Revolving Loan Fund, and Cleanup Grants—Summary of Brownfields Grant Programs (last 

modified Mar. 14, 2006) <http://www.epa.gov/swerosps/bf/html-doc/10902jt2.htm>. 59 Brownfield Overview hearing at 36. 60 Id. at 37. 61 Id. at 38. 62 Id. at 37. 63 Id. at 38. 64See id. 

tions were denied in 2003 because of this eligibility restriction 

while numerous other applications were not submitted at all.52

In 2005, Congress nullified the eligibility date provision in the 

2002 Brownfields Act in the fiscal year 2006 reauthorization of surface transportation programs.53

Nearly half of the stakeholders GAO interviewed addressed the 

issue of underutilization of RLF grants.54 The 2002 Brownfields 

Act authorized grants to eligible units of government in the amount 

of $1 million per entity.55 Congress intended those grant funds ‘‘be 

used for capitalization of revolving loan funds;’’ funds which are 

then loaned to additional eligible entities as ‘‘assistance for the remediation of brownfield sites[.]’’ 56 Grant recipients may also provide assistance in the form of subgrants using FLF grant funds to 

eligible entities.57 EPA guidance limits the amount of RLF funds 

issued as subgrants to 40 percent of the RLF grant award.58

GAO’s investigation revealed that only 47 of 154 grantees issued 

loans for a total of 67 brownfields projects.59 Grant recipients reported that a number of technical and administrative requirements 

play a large role in the underutilization of funds. ‘‘Managing a revolving loan fund requires a government or nonprofit entity to perform many of the functions of a commercial lending institution, including establishing interest rates and collateral requirements; 

processing and approving loans; and collecting loan payments .Y.Y. 

staff time and expertise are key to making these loans.’’ 60 Further, 

some grant recipients informed GAO that ‘‘EPA’s grants were not 

large enough to justify the time and effort required to establish a 

fund because it is frequently depleted after one or two loans are 

made.’’ 61 Stakeholders suggest greater efficiency would result if 

EPA gave ‘‘priority to applicants with proven expertise or to coalitions of agencies that can consolidate administrative functions and 

thereby produce economies of scale.’’ 62

In addition to improvements to the EPA Brownfields Program, 

stakeholders also suggested to GAO that more financial incentives 

are necessary to attract private investment in redevelopment 

projects. A tax credit ‘‘could attract developers to brownfield sites 

on a broader national basis and enhance the [F]ederal, [S]tate, and 

local brownfields redevelopment efforts currently under way’’ by 

‘‘allow[ing] developers to offset a portion of their [F]ederal income 

tax with remediation expenditures[.]’’ 63 A number of stakeholders 

cited the low-income housing and historic rehabilitation tax credits 

as successful stimulants to redevelopment and as a model for a 

brownfield redevelopment tax credit.64

15

65See GAO Report at 27. 66 Brownfield Overview hearing at 7 (statement of Thomas Dunne, Deputy Assistant Administrator, Office of Solid Waste and Emergency Response, U.S. Environmental Protection Agency). 67See id. 68 Id. 69See id. 70 Id. at 17. 71 Id. at 7. 72 Id. 73 Id. 74 Id. 

EPA agreed with the findings of GAO’s report and responded 

positively to the suggestions therein.65 In response to GAO’s identification of program weaknesses, Thomas Dunne testified, ‘‘EPA has 

developed a new data collection mechanism, the Property Profile 

Form, to collect information from site assessment, cleanup, and revolving loan fund grantees.’’ 66 Dunne described the agency’s efforts 

to collect data for program years 2003 and 2004 on a national 

basis.67 EPA ‘‘believe[s] that this new data will enable EPA to tie 

program results with property-specific activities to better gauge 

brownfields program [sic] success.’’ 68

In addition to its improvement of in-house performance measures, Dunne informed the Subcommittee that the agency is working with States and Tribes in developing performance measures 

that will tie performance to the number of acres remediated and 

made ready for reuse to gauge the impact of EPA funds on State 

voluntary cleanup programs.69

Dunne also addressed stakeholder concerns regarding the date of 

eligibility grant provisions under the 2002 Brownfields Act, testifying that EPA promotes a change in the law:

EPA has requested a change to expand the number of 

brownfields sites eligible for funding under the 

Brownfields Assessment, Revolving Loan Fund and Cleanup grant provisions in the President’s FY 2006 Budget. 

EPA has supported similar changes in the Consolidated 

Appropriations Act of Fiscal Years 2004 and 2005. Such a 

measure expands potential applicants for brownfields 

grants to include those owning properties acquired prior to 

the enactment of the Brownfields Law.70

With regard to RLF grants, Dunne testified that ‘‘EPA is committed to improving revolving loan fund performance and ensuring 

that, if grant funds are not being used, those grant funds will be 

closed out or grantees will be required to transition old loan fund 

grants to the new Brownfields Law program authority.’’ 71

In response to the RLF-specific recommendations of GAO and 

stakeholders, Dunne testified the agency agreed that ‘‘efficiency 

and economies of scale often can be achieved by Revolving Loan 

Fund entities with proven track records that build upon administrative expertise.’’ 72 According to Dunne, ‘‘EPA has invited coalitions of eligible entities to pool their Revolving Loan Fund grant 

requests and submit a single grant application for consideration.’’ 73

Further, the agency is ‘‘adjusting ranking criteria for Revolving 

Loan Fund applicants, giving more weight to ranking factors which 

demonstrate an applicant’s ability to manage a fund and make 

loans.’’ 74

16

75 Id. at 19. 76 Id. at 46. 77 Id. at 53 (statement of the Honorable Don Plusquellic, mayor of the City of Akron, OH, and 

president of the U.S. Conference of Mayors). 78 Id. at 52. 79 Id. at 53. 80 Id. 81 Id. at 53. 82 Id. at 54. 83 Id. at 124 (statement of Douglas L. Steidl, president of the American Institute of Architects). 84 Id. 85 Id. at 131. 

In response to stakeholders’ suggestion of a Federal tax credit for 

brownfield remediation expenses, Dunne testified:

EPA’s Brownfields Program serves as an innovative approach to environmental protection, spurring environmental cleanup, reducing neighborhood blight, generating 

tax revenues, and creating jobs. It has become increasingly 

clear, however, that successfully addressing brownfields in 

this country will require ever more interaction and collaboration among all levels of government, the private sector 

and non-governmental organizations.75

‘‘EPA is not in the tax policy business,’’ Dunne concluded, ‘‘[b]ut 

certainly if [a tax credit] furthers the objectives of the brownfield 

program [sic], tax incentives would be a very viable tool to have.’’ 76

In contrast with Dunne’s careful statement, stakeholders voiced 

their adamant support for a Federal brownfield tax credit. According to Akron, OH Mayor Don Plusquellic, the Brownfields law, 

‘‘[b]y providing money to do assessments, cleanup, enhancing 

[S]tate programs, and providing liability relief for innocent developers, has resulted in a tremendous boost in our efforts to redevelop these sites.’’ 77 As a result, the ‘‘low-hanging’’ fruit—less seriously contaminated properties—have mostly been addressed.78

Plusquellic testified ‘‘that most developers are not willing to touch’’ 

those sites that are more seriously contaminated and/or lie in less 

desirable locations.79 ‘‘These are the sites that need those added incentives in order to make them competitive in the marketplace, especially if one is comparing it to a greenfield site.’’ 80 Extra financial incentives will ‘‘turn negatives into positives’’ 81 and ‘‘[t]he one 

thing that has been missing is a tax incentive that will really spur 

private sector investment to redevelop these sites,’’ Plusquellic 

noted.82

Douglas Steidl of the American Institute of Architects echoed 

Mayor Plusquellic’s sentiment that the EPA program has created 

‘‘noticeable results’’ but that more tools are necessary to address 

the widespread problem.83 ‘‘[A]s the Government Accountability Office’s . . . brownfields report . . . points out, there are far more 

brownfield sites requiring remediation than the U.S. EPA program 

could ever hope to address in our lifetimes. As a result, Federal legislation is needed to expedite site cleanup and foster economic development of former industrial properties,’’ Steidl testified.84 He 

concluded, ‘‘The AIA believes that Federal tax credits for the remediation expenditures at brownfields sites would provide the needed 

incentive to induce private parties to undertake the clean-up and 

rebuilding of these sites.’’ 85

17

86 Id. at 60 (statement of James E. Maurin, chairman of the International Council of Shopping 

Centers and board member of the Real Estate Roundtable). 87 Id. at 65. 88 Id. at 64. 89 Id. at 72. 90 Id. 91See id. at 75.

James Maurin of the Real Estate Roundtable also praised the 

contribution of the Brownfields Program but likewise noted that 

further incentives such as a tax credit are necessary to attract private developers:

In recent years, changes in Federal laws have successfully 

addressed many of the barriers that inhibited private sector efforts to clean up and redevelop contaminated sites. 

As the threat of excessive environmental liability recedes, 

the remaining problem with most well located brownfield 

sites is a fairly simple one: Money. Other things being 

equal, it costs more to clean up and redevelop a brownfield 

than it does simply to buy and develop a Greenfield.86

‘‘Real estate development, like any other business venture, will 

invest in projects only where the economic [sic] justify it . . . . [I]f 

the numbers don’’t add up, it is very difficult to proceed with the 

project,’’ Maurin testified.87 Additionally, Maurin stated, ‘‘[T]here 

are continuing concerns among some investors and lenders about 

the uncertainties associated with this type of development. For that 

reason, in some cases, the availability of a relatively small number 

of additional dollars . . . can be the difference between a ‘Go’ and 

a ‘No go’ decision by the project investors.’’ 88

Maurin voiced support for the Brownfield Revitalization Act of 

2005 (H.R. 4480 in the 108th Congress), stating, ‘‘[T]ax credits 

would be available for up to 50 percent of remediation costs, including both demolition costs and the cost of cleaning up petroleum 

contamination.’’ 89 Maurin suggested that a carefully crafted tax 

credit will strike a balance between attracting private capital investment and preventing market distortion. ‘‘As with the low-income housing tax credit program, the private sector would still provide much of the necessary funds for cleanup, but the availability 

of tax credits could tip the scales in favor of proceeding with a 

project rather than passing over an otherwise promising site,’’ 

Maurin told the Subcommittee.90

Additionally, Maurin endorsed expanding the tax credit to benefit activities not allowed under the 2002 Brownfields Act. First, 

the proposed legislation would permit parties a tax credit for funds 

expended on petroleum contamination. The current tax provisions 

for expensing brownfield remediation costs uses the CERCLA definition of ‘‘hazardous substance,’’ from which petroleum is excluded, 

Maurin explained.91 Consequently, parties may not expense the 

costs of addressing certain materials, petroleum among them. According to Maurin: 

Congress made the decision that it did not want the 

[F]ederal Superfund used to clean up certain types of substances . . . While the decision not to authorize the spending of [F]ederal funds on these types of cleanups had significance for the administration of the Superfund program, 

the same rationale does not apply to a statute intended to 

18

92 Id. 93 Id. 94 Id. at 77. 95 Id. at 75. 96 Id. at 77. 97 Id. 98 Id. at 83 ((statement of Jonathan Philips, senior director of Cherokee Investment Partners, 

LLC). 99 Id. 100 Id. at 42 (statement of Subcommittee Chairman Michael R. Turner). 

provide a tax incentive to private parties cleaning up 

brownfield properties.92

‘‘[T]he problem created by this approach is that it assumes that 

the CERCLA definition of the term is broad enough to encompass 

all types of toxic materials that might be found at a brownfield site. 

That is not the case,’’ Maurin explained.93 He continued: 

While it may make sense not to authorize the use of 

[F]ederal funds under the Superfund program to clean up 

petroleum and pesticides, these substances often have to 

be cleaned up at brownfield sites before those properties 

can be returned to beneficial use. There is no reason not 

to extend the same type of tax incentive to a private party 

who is cleaning up petroleum waste or pesticide residues 

on a brownfield site as to one who is cleaning up other 

types of contaminants.94

‘‘Similarly, Superfund money was not to be spent cleaning up the 

interior of buildings,’’ Maurin testified.95 ‘‘Congress did not . . . 

[impose] this limitation because it believed that contaminated interiors did not require cleanups. Rather, Congress believed that the 

use of the limited funds set aside for Superfund cleanups should 

be prioritized to deal with contamination that had escaped into the 

general environment.’’ 96 Because the current tax law relies upon 

the CERCLA provisions, parties may not expense the removal of 

hazardous materials inside buildings such as asbestos or lead 

paint. Maurin notes, however, that ‘‘brownfield restoration often involves the cleanup of existing buildings on the property. Expensing 

costs to clean up buildings would give developers more reason to 

invest in brownfield properties.’’ 97

Discussing the issue of a tax credit from a ‘‘bottom line’’ approach, Jonathan Philips of Cherokee Investment Partners characterized the tax credit as enabling ‘‘developers to attract more capital with the equity created by that credit and revitalize otherwise 

economically marginal projects.’’ 98 Philips informed the Subcommittee that a transferable tax credit would ‘‘dramatically accelerate the rate at which brownfield sites are revitalized in America,’’ 

and, in conjunction with certain other tax provisions, has ‘‘the potential to prompt cleanup of more brownfield sites in the next 5 

years than in the last 50 years combined.’’ 99

Turning to a discussion of current liability provisions, the Subcommittee noted that the brownfields problem is ‘‘a [F]ederally created problem[;] . . . the issue of . . . brownfields being areas 

where a potentially responsible party or a landowner has disincentives for its redevelopment . . . [is because] our current laws and 

regulations actually encourage abandonment[.]’’ 100 Both StephenVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00024 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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101See id. (statements of Thomas Dunne, Deputy Assistant Administrator in the Office of 

Solid Waste and Emergency Response, U.S. Environmental Protection Agency and John Stephenson, Director of the Natural Resources and Environment, Government Accountability Office). 102 Id. (statement of John Stephenson, Director of the Natural Resources and Environment, 

U.S. Government Accountability Office). 103 Id. at 44 (statement of Thomas Dunne, Deputy Assistant Administrator, Office of Solid 

Waste and Emergency Response, U.S. Environmental Protection Agency). 104 Id. (statement of Subcommittee Chairman Michael R. Turner). 105 Id. at 45 (statement of Thomas Dunne, Deputy Assistant Administrator, Office of Solid 

Waste and Emergency Response, U.S. Environmental Protection Agency). 

son and Dunne agreed.101 ‘‘Those liabilities were created in fact by 

Federal law,’’ Stephenson testified.102

The 2002 Brownfields Act, though, has changed the landscape of 

remediating contaminated properties. The law now encourages the 

redevelopment of sites that would otherwise have been abandoned 

due to Superfund liability. According to Dunne:

[B]y and large, we are dealing with abandoned properties 

or . . . with private property owners who have this site 

who—because of the liability—do not want to let go of the 

site.

That has changed because of [the 2002 B]rownfields [Act]. 

There are people now that are willing to come in as prospective purchasers and take this property over and redevelop it if they [are assured] that they are not going to be 

liable like they would be under a Superfund project.103

These prospective purchasers undertaking remediation are generally new parties with little to no knowledge of the nature or extent of contamination on a site, however. Chairman Turner opined 

that in many instances, bringing the original property owners into 

the remediation planning would expedite the process. ‘‘[T]heir 

knowledge could be very important for our [redevelopment] success,’’ Turner noted.104 The Subcommittee questioned Dunne on existing mechanisms or incentives to bring those parties to the table 

for cooperative rather than punitive purposes. Dunne testified that 

there are no incentives for the original property owner to participate in the planning process and stated further, ‘‘[W]e don’t have 

anything under the statute that is going to relieve them of the liability.’’ 105

B. HEARING ON STATE BROWNFIELD REDEVELOPMENT INITIATIVES

AND PROGRAMS, SEPTEMBER 13, 2005

On September 13, 2005, the Subcommittee held its second hearing in Washington, DC on brownfields redevelopment. At the 

Brownfields and the Fifty States: Are State Incentive Programs Capable of Solving America’s Brownfields Problem? hearing, the Subcommittee explored the various types of State incentive programs, 

how well they work, how they may be improved, and whether these 

programs, in conjunction with current Federal efforts, are enough 

to address the Nation’s brownfields. Specifically, the Subcommittee 

reviewed the programs and incentives offered by four States: Pennsylvania, Ohio, Illinois, and Michigan. Additionally, the Subcommittee solicited ideas from practitioners and stakeholders to 

spur further brownfield redevelopment. 

Discussing these issues were nine witnesses divided in two panels. Charles Bartsch, senior policy analyst at the Northeast-MidVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00025 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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106See Brownfields and the 50 States: Are State Incentive Programs Capable of Solving America’s Brownfields Problem? Before the Subcommittee On Federalism and the Census of the 

House Committee on Government Reform, 109th Cong. 10 (2005) [hereinafter State Incentive 

Programs hearing] (statement of Charles Bartsch, senior policy analyst at the Northeast-Midwest Institute). 107 Id. at 11. 108 Id. 109 Id. at 9. 110See id. at 8–9. 111 Id. at 8. 112 Id. 113See id. at 8. 

west Institute opened the discussion with an overview of State programs. Presenting the State government perspective were Kathleen 

McGinty, secretary of the Pennsylvania Department of Environmental Protection; John Magill, director of the Ohio Department of 

Development Office of Urban Development; Douglas Scott, director 

of the Illinois Environmental Protection Agency; and Andrew Hogarth, chief of the Michigan Department of Environmental Quality 

Remediation and Redevelopment Division. The Subcommittee also 

received testimony from the stakeholder community, represented 

by Robert Colangelo, executive director of the National Brownfields 

Association; Jonathan Philips, senior director of Cherokee Investment Partners, LLC; Kevin Matthews, director of Association & 

Governmental Relations, AIG Environmental; the Honorable David 

Cartmell, mayor of the city of Maysville, KY, and president of the 

Kentucky League of Cities; and Charles Houder, director of Acquisitions, Preferred Real Estate Investments, Inc. 

Charles Bartsch of the Northeast-Midwest Institute developed 

the first national analysis of State programs in 2001.106 ‘‘Encouraged by passage of the [F]ederal Small Business Liability Relief 

and Brownfield Revitalization Act in January 2002, all [S]tates 

now have brownfield or voluntary cleanup programs [VCPs] in 

place, to offer some type of liability relief to those wishing to remediate and reuse brownfield sites,’’ Bartsch testified.107 He continued, ‘‘States are putting many different—but equally effective—approaches in place to bring the resources together to meet the diverse challenges of brownfield reuse.’’ 108

Summarizing the primary issue of the hearing, Bartsch reported, 

‘‘funding gaps are a primary deterrent to site and facility reuse; 

however, creatively crafted and carefully targeted incentives and 

assistance can help advance cleanup and reuse activities and 

achieve significant community benefits.’’ 109 The four general categories of State programs, according to Bartsch, are tax incentives, 

targeted financial assistance programs, direct financing, and other 

innovative solutions such as site assessment cost offsets or risklimiting.110

Bartsch reported that 23 States offer tax incentives including tax 

credits and abatements. ‘‘These programs have worked by helping 

with a project’s cash flow, by allowing resources and project revenue to be used for brownfield purposes such as site cleanup rather 

than for tax payments.’’ 111 ‘‘State and Federal tax incentives historically have been used to channel investment capital and promote 

economic development in areas that have needed it, and brownfield 

targeting is a natural evolution of this type of program,’’ Bartsch 

testified.112

Existing tax incentives cover such categories as remediation expenses, property income, job creation, and historic preservation.113

21

114 Id. 115 Id. 116 Id. 117See id. 118 Id. at 9. 119 Id. 120 Id. at 15. 121 Id. at 88 (statement of Robert Colangelo, executive director of the National Brownfields Association). 122 Id. 123 Id. 124 Id. 

The key, according to Bartsch, is to ensure ‘‘State incentives are allowed to work in full partnership with Federal incentives and are 

not limited or constrained by recapture or penalty provisions.’’ 114

Bartsch also testified that ‘‘[c]apital gaps remain the biggest barrier to brownfield reuse, and 22 States have worked to address this 

issue by putting some sort of financing incentives in place such as 

loans or grants to reduce initial cash needs.’’ 115 Such incentives, 

Bartsch continued, ‘‘can be used to increase the lender’s comfort 

with projects by offering guarantees to limit their risk of potential 

losses, or they can ease the borrower’s cash flow by plugging critical capital holes or offsetting brownfield costs, and these types of 

incentives can be critical to small sites.’’ 116

In addition to indirect financial incentives, some States also offer 

direct financial assistance such as offsetting the costs of site assessments.117 Bartsch characterizes these programs ‘‘as a way to leverage private investment while limiting public spending . . . .’’ 118

These programs, Bartsch testified, ‘‘represent an important maturation in brownfield public-private partnerships.’’ 119

‘‘Governments at all levels can find creative ways to help overcome reuse challenges. However, brownfield reuse will only succeed 

if [S]tate efforts can be complemented by [F]ederal initiatives—

such as cleanup credits, historic tax incentives, and targeted program funding—in a true inter-governmental partnership,’’ Bartsch 

concluded.120

Robert Colangelo offered testimony both from the perspective of 

a private developer and as the executive director of the National 

Brownfield Association. According to Colangelo, ‘‘[S]tate brownfield 

programs offer three levels of assistance: liability relief, financial 

incentives, and technical assistance. Most developers who purchase 

impaired properties have to rely heavily on the liability relief offered through [S]tate voluntary cleanup programs.’’ 121 State assurances of liability relief provide developers with ‘‘the ability to secure debt financing to be used for site acquisition.’’ 122

While praising State programs for the benefits of liability relief, 

Colangelo opined, ‘‘Technical assistance and financial incentives, 

while great ideas, are often impractical for most private developments . . . . It is my experience that most financial incentives go 

directly to cities or non-profit development corporations and indirectly flow to private sector projects.’’ 123 Further, Colangelo testified, ‘‘The limited amount of program funds or technical assistance 

that is available to the private sector comes at a great cost and 

often requires an intense investment of time and the use of expensive consultants to help navigate through program eligibility requirements . . . .’’ 124 ‘‘Most developers will pass on a brownfield 

22

125 Id. 126 Id. 127 Id. at 89. 128See id. 129See id. See generally id. at 90–94; National Brownfield Association, What Works: An Analysis of State Brownfield and Voluntary Cleanup Programs (visited May 1, 2006) <http://

www.brownfieldassociation.org/NBA—Program—Analysis.pdf>. 130 Id. at 89 (statement of Robert Colangelo, executive director of the National Brownfields Association). 131 Id. 132 Id. 

site rather than take a chance on a project that will only work if 

government incentives are secured,’’ he concluded.125

Echoing Mayor Plusquellic in an earlier hearing, Colangelo testified that the ‘‘low-hanging fruit’’ was all but gone, leaving ‘‘cities 

. . . with the harder, more complicated brownfield sites . . . 

[T]hese sites will require meaningful government incentives if the 

public sector is to continue to attract private sector investment and 

developer interest.’’ 126 Most State programs, however, provide little 

cost benefit to private developers, Colangelo told the Subcommittee. 

‘‘The exception to this rule is the use of Tax Increment Financing 

[TIF] and [S]tate Tax Credit programs.’’ 127

Colangelo’s organization, the National Brownfield Association 

[NBA], analyzed State brownfields and voluntary cleanup programs.128 The analysis resulted in a position paper, recommending 

program elements that best encourage cleanup activities.129

Colangelo offered the NBA’s recommended ‘‘key program elements’’ 

for State programs: 

For government incentives to be meaningful to the private 

sector, programs should:

• Be easy to understand and administer

• Apply to a wide type of projects

• Allow flexibility in the use of funds

• Provide funding to be meaningful and that is cost 

beneficial to the application process and project size

• Allow for unused funds to be transferred or 

refunded[.] 130

Currently, no single State program incorporates all elements but 

‘‘a number of [S]tates have been creative in developing specific program elements that work well,’’ according to Colangelo.131 ‘‘When 

designing incentive programs, we encourage you to consider the 

[report] recommendations provided in this paper and support the 

creation of a [F]ederal brownfield Tax Credit Program that would 

allow for demolition and remediation expenses to earn a [F]ederal 

tax credit,’’ Colangelo testified.132

Jonathan Philips of Cherokee Investment Partners provided the 

Subcommittee with an inventory of State program elements that, 

in his view as a private sector redeveloper, have encouraged 

brownfields redevelopment. Philips testified that a number of 

States operate grant programs that assist with the characterization 

of site contamination or assistance in planning end-use of remediated properties. ‘‘[T]hese types of initiatives are important and undoubtedly help move some lightly contaminated sites toward productive use;’’ however, ‘‘for some more difficult sites, informationalVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00028 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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133 Id. at 101 (statement of Jonathan Philips, senior director of Cherokee Investment Partners, 

LLC). 134 Id. at 102. 135See id. 136 Id. 137 Id. 138 Id. 139 Id. 140 Id. at 103. 141 Id. 142 Id. at 104. 143 Id. 144 Id. at 103. 

type programs may not make the difference in determining whether the site is remediated and brought back into productive use,’’ 

Philips cautioned.133

Philips also touted the use of ‘‘one-stop shopping’’ tactics adopted 

by a number of States. These programs streamline the permit process and make a ‘‘real difference in the rate at which brownfield 

sites are remediated.’’ 134 The speed at which redevelopers can obtain permits can sometimes mean the difference between productive cleanup and reuse of a site and leaving a site to sit idle.135

Additionally, States have utilized their ‘‘considerable latitude to 

determine the applicable cleanup standards for a particular site 

based on the type of expected reuse.’’ 136 This often can result in 

lower costs and quicker project turn-around. As States adjust their 

cleanup standards on a case-by-case basis for sites registered in a 

voluntary cleanup program, ‘‘many [S]tates will couple voluntary 

cleanup programs with ‘no further action’ letters that provide developers with some certainty concerning future liability.’’ 137 Philips 

cautioned, however, that ‘‘[d]ue to the overlay of [F]ederal environmental laws, these types of liability protections are inherently limited in their scope and applicability.’’ 138 At the same time, he 

noted, ‘‘[b]y helping to manage risk . . . these types of [S]tate programs inherently improve the economics of more difficult 

brownfield transactions.’’ 139

Philips also testified to the effectiveness of financial incentive 

programs. State revolving loan funds or loan guarantee programs, 

‘‘by directly providing low-cost capital[,] can make a critical difference between projects that are mothballed and projects that are 

remediated and revitalized.’’ 140 Many States also now provide 

‘‘loan guarantees and other assurances in an effort to attract investors and lenders to transactions that would normally be considered 

too risky.’’ 141 General obligation bonds are also effective for a number of States as ‘‘a tool that can go a long way toward helping close 

the cost and risk gap between brownfield development and greenfield development.’’ 142

Tax increment financing has also proved useful as ‘‘a powerful 

driver for brownfield remediation and revitalization,’’ according to 

Philips.143 ‘‘At least 48 [S]tates have now enacted some form of tax 

increment financing legislation that permits municipalities or county governments to assist with the financing of redevelopment infrastructure projects by capturing future increases in tax revenues 

that are expected to flow as a result of the redevelopment project,’’ 

Philips reported.144 ‘‘However, only a small handful of these TIF 

24

145 Id. 146 Id. at 117 (statement of Kevin Matthews, director of Association & Governmental Relations, AIG Environmental). 147See id. at 118. 148 Id. 149See id. 150See id. 151 Id. at 119. 152 Id. 153 Id. 154 Id. at 120. 

programs make remediation expenditures eligible for funding,’’ he 

advised.145

Kevin Matthews of AIG Environmental testified to the success of 

one particular financial incentive mentioned by both Robert 

Colangelo and Jonathan Philips—environmental insurance:

Environmental insurance is not the silver bullet for 

Brownfields redevelopment. However, it is one of the ‘‘tools 

in the tool chest’’ that helps to lead to a successful cleanup 

and redevelopment because it often helps to address some 

of the greatest concerns of Brownfields redevelopment—environmental liability and uncertainties concerning the 

cleanup.146

Matthews related AIG Environmental’s experience with the Massachusetts brownfield program: Massachusetts established a fund 

from which the Commonwealth would make brownfield redevelopment loan guarantees.147 Massachusetts ‘‘quickly learned . . . that 

capital for Brownfields is available. However, what stymied 

Brownfields redevelopment was the fear of environmental liability 

from historic contamination and the concern that cleanup costs 

could exceed the clean-up cost estimate.’’ 148

The Commonwealth determined environmental insurance addressed those redevelopment barriers and entered a partnership 

with AIG Environmental.149 The Commonwealth’s pooled funds 

were then opened to subsidizing environmental insurance premiums for policies addressing liability and cost over-run concerns.150

Pollution Legal Liability insurance addresses the first concern—

liability—by answering the questions, ‘‘What if a Pollution Condition is found that no one else knew was there? What if the government requires more cleanup of a known Pollution Condition after 

providing a ‘No Further Action’ letter? What if there is a toxic tort 

law suit?’’ 151

Cleanup Cost Cap insurance addresses the second concern—cost 

over-runs—by capping a developer’s remediation costs and answers 

the question, ‘‘[W]hat if the cleanup of the site cost [sic] more than 

expected?’’ 152 This insurance covers cost overruns developers may 

encounter in a brownfields project, ‘‘greatly assist[ing] developers 

as they plan their project.’’ 153

Matthews also educated the Subcommittee about Voluntary 

Party Liability Exemption [VPLE] insurance. This ‘‘innovative’’ insurance ‘‘allows the [S]tate to give full releases of liability to prospective purchasers of Brownfield sites for known groundwater contamination at the site that is being cleaned up using natural attenuation,’’ Matthews testified.154 Explaining the mechanics of 

VPLE insurance, Mathews stated, ‘‘If that remedial approach fails, 

25

155 Id. 156See id. at 118. 157See id. 158 Id. 159 Id. at 16 (statement of Kathleen McGinty, secretary of the Pennsylvania Department of 

Environmental Protection). 160 Id. at 16. 161See id. 162See id. at 22 (statement of John Magill, director of the Ohio Department of Development 

Office of Urban Development). 163See id. 164See id. 

the State . . . can look to the policy to cover the costs of cleaning 

up that ground water up to the limits of the policy.’’ 155

As a testament to the success of environmental insurance use in 

brownfields redevelopment, Matthews reported that, over the 

years, Massachusetts invested $4.8 million in environmental insurance for 259 projects.156 Those projects cost $145 million in cleanup 

but yielded 25,000 jobs and $2.1 billion in private investment.157

‘‘The ratio, based upon the stated number[s]—for every $1 dollar of 

Commonwealth Funds used to subsidize environmental insurance[,] 

$458 has been leveraged in investment and cleanup of sites,’’ Matthews testified.158

In examining specific examples of successful State brownfield 

programs, the Subcommittee first turned to Pennsylvania’s 

brownfield program and incentives. Pennsylvania Department of 

Environmental Protection Secretary Kathleen McGinty summarized the four primary reasons for her State’s achievements:

[F]irst and foremost, clear, predictable, reliable remediation standards that are geared toward the future land use 

of the site; second, clear, thorough and effective liability 

relief for the successful performance of those cleanup 

standards; third, money . . . in three categories: site assessment, site remediation, but then also especially site infrastructure improvement so that that site is pad ready, 

ready for redevelopment. . . .

Fourth and key, time is money. So the extent to which we 

can streamline permitting and put a thumb on the scale 

for brownfield redevelopment such that a brownfield either 

does not need an individual permit, or it would receive priority attention in the permitting process has been a key for 

us.159

McGinty also noted the contribution of two improvements to the 

program in the prior 18 months. First, the Pennsylvania Department of Environmental Protection and EPA entered a Memorandum of Understanding, which creates one cleanup policy.160 The 

second recent improvement was the expansion of the State program 

to include remediation of greyfields, or abandoned mine sites.161

The Subcommittee next reviewed Ohio’s brownfields redevelopment program, the $200 million bond-funded Clean Ohio Revitalization Fund.162 The program was born of a task force effort to address the issues of city cores: brownfields were identified as the 

number one challenge for these areas.163 Ohio has granted $97 million to 94 assessment and remediation projects since 2002.164

‘‘These 94 grants are expected to leverage more than $731 million 

26

165 Id. 166 Id. at 23. 167 Id. at 23. 168 Id. at 23. 169See id. at 40 (statement of Douglas Scott, director of the Illinois Environmental Protection 

Agency). 170 Id. 171 Id. 172 Id. at 40–41. 

in new investment,’’ reported John Magill, director of the State’s 

Department of Development, Office of Urban Development.165

Magill emphasized the importance of a partnership between Federal and State governments in redeveloping the Nation’s 

brownfields. ‘‘A combination of private and public resources leads 

to projects with an economic and environmental return. In Ohio, 

we are fortunate to be able to support projects of both State and 

Federal resources.’’ 166 Specifically, he noted, ‘‘[M]y office administers a U.S. EPA Brownfield Revolving Loan Fund. To date, we 

have made two loans, with two more expected to close this fall.’’ 167

He further acknowledged the EPA ‘‘for their support and flexibility 

to meet the needs of our borrowers’’ in the success of that partnership.168

In yet another example of a successful redevelopment program, 

the Subcommittee learned how Illinois utilizes funds in a variety 

of ways in addressing brownfields. Illinois provides a number of financial incentives to supplement cleanup costs and provides site 

assessments, redevelopment loans, and technical expertise.169

Douglas Scott, director of the Illinois Environmental Protection 

Agency highlighted the importance of brownfield redevelopment 

programs for the Subcommittee: 

Obviously there is an environmental benefit to cleaning up 

areas that have contamination or are abandoned; there is 

certainly a community benefit in reclaiming property to 

put it back into productive use to either support new businesses and generate new tax revenue, or to become recreational land. There is a benefit to helping to reduce 

sprawl not just by putting a particular property back into 

use, but also by spurring other inner-city development and 

protecting farmland.

We have seen in recent years a renaissance of cities, and 

brownfield redevelopment certainly augments that 

trend.170

‘‘[B]rownfield redevelopment at its heart is a real estate transaction, and just as in any development, there are associated costs. 

In these cases, the environmental considerations may be very 

large, but other costs, such as infrastructure, may be reduced,’’ 

Scott told the Subcommittee.171 He continued, ‘‘It is essential for us 

to do those things that entice private developments to the sites by 

providing the conditions and incentives that make these sites attractive, or at least comparable to Greenfield areas . . . State and 

local governments alone can’t make this happen.’’ 172

Scott also relayed the importance of non-financial incentives to 

brownfield redevelopment efforts. Illinois engages in a comprehensive risk-based remediation process, which focuses on future reuse; 

operates a voluntary cleanup program with ‘‘well-established proceVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00032 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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173 Id. at 41. 174 Id. 175See id. at 60 (statement of Andrew Hogarth, chief of the Michigan Department of Environmental Quality Remediation and Redevelopment Division). 176See id. 177See id. 178 Id. 179 Id. 180 Id. 181 Id. 182See id. 183See id. 184See id. 185See id. 

dures;’’ maintains partnerships with other government agencies, 

non-profits, and trade associations; and provides site assessment 

and technical assistance for remediation projects.173 Further, Scott 

highlighted the State’s Memorandum of Understanding with EPA, 

which provides redevelopers some liability relief. When Illinois 

issues a ‘‘No Further Remediation’’ letter, the Memorandum of Understanding with EPA states that ‘‘except in very narrow circumstances . . . [Illinois’s] NFR letter will also end Federal involvement.’’ 174

Turning to Andrew Hogarth of the Remediation and Redevelopment Division of the Michigan Department of Environmental Quality, the Subcommittee learned of that State’s three-prong approach 

to brownfield redevelopment: financial incentives, State funding for 

site cleanup, and liability relief.175

Real, personal, and State and local income taxes associated with 

properties in specific areas of Michigan are fully eliminated 

through tax credits.176 The State also offers single-business tax 

credits for demolition, environmental cleanup, and other remediation costs.177 ‘‘Since June 2000, this program has awarded more 

than $273 million in single business tax credits, which we believe 

has generated more than $3.8 billion of private investment in distressed areas,’’ reported Hogarth.178

Additionally, the State offers tax increment financing. ‘‘Under 

Michigan’s Brownfield Redevelopment Financing Act, brownfield 

redevelopment authorities across the State are able to capture local 

taxes and school taxes to reimburse developers for cleanup-related 

costs,’’ Hogarth testified.179 ‘‘As developers develop a site and increase the value of their property, the additional increment in 

tax—not property tax—is captured by the brownfield authorities 

and used to reimburse the developer for their expenses,’’ he explained.180 ‘‘Since 1996, more than $300 million in tax increment 

financing has been approved for more than 80 projects throughout 

the State,’’ Hogarth reported.181

Hogarth testified that Michigan also finances some redevelopment efforts through cleanup grants and loans as well as direct 

spending.182 The State provided $122 million in grants and loans 

for approximately 300 projects since 1992.183 The State spent an- other $585 million over 17 years for the investigation, cleanup, and 

monitoring of more than 1,600 brownfield sites.184

While the financial figures are impressive, Hogarth testified that 

the most important redevelopment stimulus in Michigan was a 

change in the liability laws.185 ‘‘In 1995, we went from a liability 

situation where anyone that bought a piece of contaminated property, whether they caused the contamination or not . . . [was] liaVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00033 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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186 Id. 187See id. at 60–61. 188See id. at 61. 189 Id. 190See id. 191See id. 192 Id. 193 Id. 194 Id. 195 Id. 196 Id. at 95 (statement of Jonathan Philips, senior director of Cherokee Investment Partners, 

LLC). 197 Id. at 41 (statement of Douglas Scott, director of the Illinois Environmental Protection 

Agency).

ble for it, to where they would not be liable for it in the future if 

they did a baseline environmental assessment,’’ Hogarth explained.186 A new property owner is thus free from liability for existing contamination if they obtain and submit to the State a baseline environmental assessment.187 Between 1995 and 2005, Michigan processed 8,600 baseline environmental assessments for 8,600 

contaminated parcels that were transferred to new hands, which 

Hogarth opined would not have otherwise occurred.188

Hogarth also emphasized that Michigan’s ‘‘cleanup standards are 

risk-based and land-use-based, which helps assure that unnecessary cleanup expenditures are not made.’’ 189

A number of barriers to brownfield redevelopment remain, Hogarth told the Subcommittee.190 First, liability remains a deterrent 

to redevelopment.191 ‘‘Many potential property transactions fail due 

to the inability of the buyer to resolve liability under RCRA, and 

to some extent CERCLA,’’ Hogarth told the Subcommittee.192

While his State’s MOA with EPA addresses CERCLA enforcement, 

Hogarth testified, ‘‘[T]he inability of a prospective purchaser to resolve RCRA liability remains a substantial hurdle.’’ 193 According to 

Hogarth, additional impediments to brownfield redevelopment include: 

[U]nrealistic expectations on the part of the developer and 

the buyer or seller, lack of comprehensive planning by 

communities, lack of sufficient site characterization, overwhelming predevelopment costs, lack of startup funds for 

small businesses, and lack of State and local government 

resources.194

‘‘We will not be able to provide the funding we have at the State 

level in the future,’’ Hogarth concluded.195

A number of witnesses on both panels touched upon the daunting 

number of unremediated brownfields remaining despite State efforts. While ‘‘well-designed State programs are a critical component 

of this Nation’s efforts to revitalize lands[,] . . . they are not sufficient to solve this Nation’s brownfield problem in our lifetime,’’ 

Jonathan Philips testified.196

‘‘State and local governments have been very creative in utilizing 

all of the myriad resources that they have financially to try to assist with these sites,’’ Douglas Scott reported, ‘‘but it is pretty clear 

. . . that the number of sites isn’t being lessened to the rate that 

any of us would like to see.’’ 197 More money is the answer according to Scott: 

More grant dollars to States and municipalities to specifically target site assessment, infrastructure and cleanup 

29

198 Id. 199 Id. 200 Id. at 96 (statement of Jonathan Philips, senior director of Cherokee Investment Partners, 

LLC). 201 Id. 202 Id. 203 Id. 204 Id. 205 Id. at 23 (statement of Kathleen McGinty, secretary of the Pennsylvania Department of 

Environmental Protection). 206 Id. (statement of John Magill, director of the Ohio Department of Development Office of 

Urban Development). 207 Id. 

are needed. More sites have been put into play, for example, by simply not forcing loan guarantees of Section 108 

and making more grant money available.

In addition, more funds under the Brownfield Revitalization Act would help tremendously as I’m sure . . . [Illinois 

is] not the only State that has more sites than . . . funds, 

and more dollars for Superfund site cleanup that are 

under the Federal guidelines are also needed.198

‘‘But money is only part; the rest must come from tax credits and 

other targeted incentives to the private sector to bring them into 

these sites,’’ Scott concluded.199

Philips similarly testified that a ‘‘national transferable credit 

would be a powerful and fitting complement to State efforts.’’ 200

Philips noted the success of Federal tax credits in development 

areas other than brownfields, suggesting the model should be extended to brownfields. The ‘‘tax credit for rehabilitating historic 

structures that Congress created in 1976 . . . has stimulated more 

than $33 billion in private investment, with over 325,000 housing 

units.’’ 201 The success of this program, Philips testified, is, ‘‘First, 

it is uniform across the Nation, and; second, it works in tandem 

with State programs to drive more historic sites from underwater 

to above-water status.’’ 202

Applying this mechanism to brownfields makes sense, Philips 

opined. According to Philips, a transferable tax credit in particular 

is valuable because it ‘‘could be leveraged early in a project, thus 

allowing a pioneering developer to attract some of the riskiest capital with the equity created by the forward sale of the credit.’’ 203

This form of tax credit would follow the model of the historic rehabilitation tax credit, according to Philips, and would be ‘‘a logical 

extension’’ of prior Federal brownfield efforts.204

Echoing both Philips and Scott, Secretary McGinty testified that 

‘‘tax credits . . . [are] absolutely essential . . . especially to underwrite the purchase of insurance that can backstop remediation 

costs.’’ 205

John Magill likewise testified about the benefits of tax credits. 

‘‘In active markets, brownfield reinvestment is more likely to occur 

at a lower public cost and with greater likelihood of success.’’ 206

Not all brownfield markets are active enough to see this formula, 

however. ‘‘Public policy is able in a variety of ways to affect the vibrancy of a brownfield market,’’ Magill told the Subcommittee.207

‘‘Ohio believes tax credits can be a tool to attract additional private 

sector investment by enabling developers to offset costs by using or 

assigning credit. That is why we encourage Congress to continue 

30

208 Id. 209 Id. 210 Id. at 41 (statement of Douglas Scott, director of the Illinois Environmental Protection 

Agency). 211 Id. 212 Id. at 16 (statement of Kathleen McGinty, secretary of the Pennsylvania Department of 

Environmental Protection). 213 Id. 214 Id. 215 Id. at 61 (statement of Andrew Hogarth, chief of the Michigan Department of Environmental Quality Remediation and Redevelopment Division). 216 Id. 217 Id. at 81 (statement of Subcommittee Chairman Michael R. Turner). 218 Id. 

to explore additional flexible brownfield tools which are performance-based, enabling local citizens to seek tangible results.’’ 208

‘‘Access to additional sources of Federal dollars through the tax 

credits or increased resources at U.S. EPA are crucial to stretching 

State funding to undertake additional local projects,’’ Magill concluded.209

Second to the need for money, according to the panelists, is the 

need for further liability relief. Douglas Scott endorsed the 

brownfields tax credit bill, introduced as H.R. 4480 in the 108th 

Congress, and further endorsed the additional provisions therein 

‘‘mak[ing] more certain the lines of liability and possible exposure 

to future or reopened claims would help tremendously to make 

these sites more insurable and more bankable.’’ 210 ‘‘[O]ne of the 

major stumbling blocks [for developers] is the uncertainty of future 

liability, which is another factor that makes it more desirable to locate to a greenfields,’’ Scott reported.211

Secretary McGinty also noted the need for further liability relief. 

Despite the full and effective liability relief in some Federal programs pursuant to the Commonwealth’s MOA with EPA, there is 

still potential liability under other Federal programs. Additionally, 

‘‘[Pennsylvania’s] understanding with EPA is a paper processing 

agreement’’ in which EPA agrees ‘‘to process . . . in real time their 

statues and responsibilities as we do, too, on priority sites.’’ 212

While this agreement is ‘‘[v]ery helpful, . . . we need to make the 

next step to full liability relief,’’ McGinty testified.213 ‘‘If we could 

move from what has been an important beginning in our Memorandum of Understanding with EPA to full and effective Federal 

and State liability relief, that would add the certainty that investors and developers need,’’ she concluded.214

Andrew Hogarth also touched upon Federal liability as a remaining obstacle in brownfields redevelopment. ‘‘Federal liability continues to be a problem. Many potential property transactions fail 

due to the inability of the buyer to resolve liability under RCRA, 

and to some extent [under] CERCLA,’’ he testified.215 While Michigan has a MOA with EPA addressing most liability concerns, 

‘‘RCRA liability remains a substantial hurdle’’ to redevelopment efforts, Hogarth reported.216

Agreeing with the panelists on the need for liability relief, Chairman Turner noted that H.R. 4480 tied the remediation tax credit 

with liability relief by requiring remediating parties to enter a 

State VCP, thereby ‘‘hook[ing] into those liability relief provisions.’’ 217 Inquiring whether State officials thought this mechanism 

‘‘would be an effective liability release,’’ 218 Turner noted, ‘‘If the 

State voluntary cleanup program bar of enforcement release is sufVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00036 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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219 Id. 220 Id. at 82 (statement of John Magill, director of the Ohio Department of Development Office 

of Urban Development). 221 Id. 222 Id. at 83 (statement of Douglas Scott, director of the Illinois Environmental Protection 

Agency). 223 Id. 224 Id. (statement of Charles Bartsch, senior policy analyst at the Northeast-Midwest Institute). 225See id. at 165 (statement of Subcommittee Chairman Michael R. Turner). 226 Id. 227 Id. 

ficient, if you are finding it is successful in giving people the confidence to enter into a program, then we wouldn’t have to reinvent 

the wheel,’’ Turner stated.219

John Magill responded in support of such a liability relief provision. ‘‘I think this is a good place to start because it is known . . . 

do not reinvent the wheel and create new mechanisms. . . . If it 

fails, you can make changes. You don’t create something new and 

tinker with that.’’ 220 Magill warned, though, ‘‘The only caveat 

would be that in some States that the voluntary cleanup program 

does not cover all cleanups. Brownfields are a wider perspective.’’ 221

Douglas Scott likewise responded, testifying that kind of liability 

relief provision ‘‘will help greatly because you really are just plugging in a new piece to something that exists, rather than creating 

a new program.’’ 222 Scott also included a warning, however, noting, 

‘‘In order for it accomplish all of the things . . . that we are trying 

to do and that you are trying to do, it is going to need to be a little 

bit more broadly based than the MOUs have been to date.’’ 223

Charles Bartsch testified, ‘‘What is good about using the State 

voluntary cleanup programs . . . is it really does provide a recognized mechanism to provide some assurance to the community at 

large that these things are proceeding properly.’’ 224 To the extent 

existing programs are not broad enough to cover all brownfields 

projects, Bartsch stated, ‘‘Each [S]tate has a program in place, and 

I think what we saw after the passage of the national brownfields 

law a couple of years ago, the States will be able to then change 

[their programs] to better fit the Federal structure that is laid out.’’

Turning from the liability relief component of the Federal tax 

credit proposal, the Subcommittee sought input from the panel’s 

private developers on the ability of a tax credit to provide extra 

capital. Specifically, the Subcommittee questioned the utility of a 

recoverable subsidy versus a non-recoverable subsidy.225

Chairman Turner noted that State incentive programs vary: 

‘‘[T]here are some programs that provide recapturing grants, revolving loan funds, etc.; others provide direct subsidy . . . [that] is 

not recoverable.’’ 226 Turner questioned whether a recoverable subsidy could jeopardize the economic viability of a project. If a government can recover the subsidy provided to the redeveloping 

party, then the process in many complex cleanup projects ‘‘of acquiring . . . and remediating the property when compared to the 

cleaned value prior to complete redevelopment is still going to be 

a negative proposition. In other words, you’re still going to have a 

negative value when you add in the cost of acquisition and remediation prior to the redevelopment.’’ 227 The proposed Federal tax 

credit ‘‘is a straight subsidy. We’re not seeking to recover the 

32

228 Id. 229 Id. (statement of Robert Colangelo, executive director of the National Brownfields Association). 230 Id. (statement of Jonathan Philips, senior director of Cherokee Investment Partners, LLC). 231 Id. 232 Id. at 166 (statement of Kevin Matthews, director of Association & Governmental Relations, AIG Environmental). 233 Id. 234 Id. (statement Charles Houder, director of acquisitions, Preferred Real Estate Investments, 

Inc.) 235 Id. 

funds. Do you think that is an essential element . . . to redevelop 

the brownfields?’’ 228

Robert Colangelo responded first, ‘‘[O]ne of the most difficult 

things to secure is your debt financing on a project, and through 

this tax credit bill, I think it would bring additional comfort to 

banks and the lending community so that you would have lesser 

lines on equity.’’ 229

In agreement with Colangelo, Jonathan Philips testified, ‘‘[A] tax 

credit . . . could be a forward sale situation where you can create 

equity, and that chunk of equity could then be leveraged to either 

attract more equity or to attract debt capital, and that is critical 

to everybody[.]’’ 230 Philips noted that the benefit of that equity 

would be particularly helpful ‘‘to a smaller entity because . . . it 

doesn’t start the clock of the return investment until . . . you deploy that capital later in the project.’’ 231

Kevin Matthews reported, however, that based on his experience 

with those States that subsidize environmental insurance for 

brownfield projects versus those States that offer a tax credit for 

insurance costs, ‘‘The subsidies are far more successful.’’ 232 Using 

Massachusetts as an example, Matthews testified: 

[Y]ou can directly see [the difference between credits and 

subsidies] in Massachusetts. When they first opened the 

program, they offered a 50 percent subsidy toward the premium of environmental insurance. Due to budget cutbacks, 

they had to reduce that subsidy to 25 percent at one point 

in time. The number of sites coming into the program 

dropped by 50 percent when they cut the subsidy by that 

amount, so it is directly corollary.233

Echoing the other panelists, Charles Houder testified, ‘‘[T]he size 

of the incentives that can be offered by the Federal or State government . . . are typically not the difference maker in us deciding 

whether a site works or doesn’t work, with the exception of tax 

credits.’’ 234 ‘‘Tax credits, certainly the historical tax credit program 

has been a difference maker. That is probably the single incentive 

program that has the ability to tip the scale in undertaking a development project,’’ Houder told the Subcommittee.235

C. FIELD HEARINGS ON THE PARTNERSHIP BETWEEN FEDERAL AND

STATE BROWNFIELD PROGRAMS, MAY 16, 2005, AND OCTOBER 25, 2005

The Subcommittee staged two field hearings on brownfields redevelopment during the first session of the 109th Congress. On May 

16, 2005, the Subcommittee held a hearing in Cleveland, OH, entitled The Ohio Experience: What Can Be Done to Spur Brownfield 

Redevelopment in America’s Heartland? On October 25, 2005, the 

Subcommittee held a hearing in Bethlehem, PA, entitled The ChalVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00038 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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lenge of Brownfields: What are the Problems and Solutions in Redeveloping Pennsylvania’s Lehigh Valley Communities? These field 

hearings focused on Federal brownfields programs and State efforts 

as well as explored ways to enhance those Federal/State partnerships. 

Two panels of witnesses at the May 16 hearing in Ohio presented 

the views of Federal, State, and local government stakeholders, as 

well as private developers and remediated site users. Joseph 

Dufficy, Chief of the Brownfields and Early Action Section at the 

U.S. Environmental Protection Agency Region V Office; Amy 

Yersavich, manager of the Voluntary Action Program of the Ohio 

Environmental Protection Agency; the Honorable Frank Sarosy, 

mayor of the Village of Fairport Harbor, OH; the Honorable Daniel 

Pocek, mayor of the city of Bedford, OH; Tracy Nichols, assistant 

director for Economic Development at the Cuyahoga County, OH, 

Department of Development; and Casey Stephens, manager of Public Services and Brownfield Coordinator at the city of Toledo, OH, 

Division of Environmental Services testified to the government perspective on the first panel. The Subcommittee received testimony 

from industry stakeholders on the second panel, which consisted of 

Alex Machaskee, president and publisher of the Plain Dealer; Todd 

Davis, chief executive officer of Hemisphere Development LLC; 

Thomas Stone, executive director of the Mt. Pleasant NOW Development Corp.; Barry Franz, P.E., BCEE, P.G., principal engineer of 

Civil & Environmental Consultants, Inc.; and Craig Kasper, chief 

executive officer of Hull & Associates, Inc. 

Two panels at the October 25, 2005, Pennsylvania hearing represented groups with interests similar to those in the Ohio hearing. 

The first panel consisted of Abraham Ferdas, Director of the Hazardous Site Cleanup Division at the U.S. Environmental Protection 

Agency Region III Office; Eugene DePasquale, deputy secretary for 

Community Revitalization and Local Government Support of the 

Pennsylvania Department of Environmental Protection [DEP]; Jim 

Seif, vice president of Corporate Relations at PPL Corp.; Paul 

Schoff of Feinberg and Schoff, LLP, and chief executive officer of 

Brownfield Realty, Ltd.; and Robert Colangelo, executive director of 

the National Brownfield Association. Kerry Wrobel, president of 

Lehigh Valley Industrial Park, Inc.; Chad Paul, Jr., chief executive 

officer of Ben Franklin Technology Partners; Ray Suhoki, president 

and chief operating officer of the Lehigh Valley Economic Development Corp.; and Stephen Donches, president of the National Museum of Industrial History presented their views as developers and 

remediated site users on the second panel. 

Both the Ohio and Pennsylvania hearings focused initially on the 

relationship between the Federal, State, and local governments. In 

particular, stakeholders praised the efforts of the EPA region offices for fostering better interaction between the Federal Government and State and local governments, and for taking steps to ease 

the redevelopment process. While improved government relationships and redevelopment processes have been helpful, they do not 

address what stakeholders emphasized as the biggest obstacle to 

redevelopment efforts—the gap between the vast number of existing brownfields, the often tough economic conditions in which they 

exist, and the limited public resources to address these conditions. 

Witnesses concluded that the Federal Government needs to induce 

34

236Ohio Brownfields hearing at 10 (statement of Joseph Dufficy, Chief of the Brownfields and 

Early Action Section at the U.S. Environmental Protection Agency Region V Office). 237 Id. at 15. 238 Id. 239 Id. at 17. 240The Challenge of Brownfields: What Are the Problems and Solutions in Redeveloping Pennsylvania’s Lehigh Valley Communities? Before the Subcommittee on Federalism and the Census 

of the House Committee on Government Reform, 109th Cong. 130 [hereinafter Pennsylvania 

Brownfields hearing] (2005) (statement of Chad Paul, Jr., chief executive officer of Ben Franklin 

Technology Partners). 241 Id. at 132. 242See Ohio Brownfields hearing at 75, 6 (statement Representative Steven C. LaTourette). 243 Id. at 75. 

private sector interest in redeveloping brownfield sites. Clarifying 

and expanding existing liability protections, as well as creating 

more financial incentives—including Federal tax credits—would address the greatest barriers to private investment in remediation 

and redevelopment projects. 

Joseph Dufficy of the EPA Region 5 office testified that the agency’s program is successful. ‘‘As of March 2005, EPA and its grant 

recipients have performed more than 6,800 assessments. 

Brownfield grantees have leveraged $6.6 billion in cleanup and redevelopment dollars, leveraging more than 30,000 jobs.’’ 236 Dufficy 

emphasized that much of the success of this story is due to partnerships with States. ‘‘EPA . . . partners with [S]tates to develop 

Memoranda of Agreement [MOAs] that clarify program roles and 

responsibilities. EPA has signed 22 MOAs . . . . Here in Region 5, 

we have MOAs with all 6 [S]tates and have maintained close partnerships with them since the inception of the Brownfield Program.’’ 237 According to Dufficy, ‘‘These partnerships are an integral 

part of our success[;]’’ 238 and continuing that success ‘‘will require 

ever more interaction and collaboration among all levels of government, the private sector and non-governmental organizations.’’ 239

Chad Paul of Ben Franklin Technology Partners similarly 

praised partnership as crucial to successful brownfields redevelopment projects. Specifically in the case of his organization’s redevelopment projects, Paul testified, ‘‘[P]artnership is what makes it 

work because we don’t have all the resources that we need under 

our umbrella. The fact that we work with the university, with the 

city, with all of the other economic development organizations in a 

partnership . . . has been the secret to our success.’’ 240

According to Kerry Wrobel of Lehigh Valley Industrial Park 

[LVIP], his company’s campuses, built on redeveloped brownfield 

sites, would not be possible without the work of the multiple levels 

of partners. Further, Wrobel testified, partnerships must cross all 

levels of government. For the LVIP VII site, county governments 

provided matching dollars for roads and other infrastructure while 

municipal government and economic development corporations also 

heavily participated in the site redevelopment.241

Representative Steven C. LaTourette similarly noted the importance of intergovernmental partnerships. The closure of Diamond 

Shamrock in Fairport Harbor, OH in the 1960s shook the community, leaving a void of 70,000 jobs and a massive brownfield site as 

its legacy.242 ‘‘That really is the key to this [redevelopment project 

- ] . . . partnerships and everybody pulling in the same direction.’’ 243 As a result, the project will result in ‘‘an exciting mixed 

35

244 Id. 245Pennsylvania Brownfields hearing at 46 (statement of Eugene DePasquale, deputy secretary for Community Revitalization and Local Government Support of the Pennsylvania Department of Environmental Protection). 246 Id. at 60–61 (statement of Paul Schoff of Feinberg and Schoff, LLP, and chief executive 

officer of Brownfield Realty, Ltd.). 247Ohio Brownfields hearing at 97 (statement of Todd Davis, chief executive officer of Hemisphere Development LLC). 248Pennsylvania Brownfields hearing at 74 (statement of Robert Colangelo, executive director 

of the National Brownfield Association).

use’’ of residential and business properties as well as retail outlets 

and a golf course.244

While government and private sector stakeholders avow the relationship between the EPA and the State governments is key to continued success in addressing the Nation’s brownfields problem, 

those partnerships are only helpful when you have a redeveloper 

willing to take on a project. Liability concerns remain a significant 

barrier to enticing private redevelopment, Eugene DePasquale of 

the Pennsylvania DEP told the Subcommittee:

The reality is that brownfield redevelopment is difficult—

both from a perception standpoint and a cost standpoint. 

Many developers are still hesitant to tackle a brownfield 

remediation project without strong assurances with regard 

to resolution of legal liabilities, controlling remediation 

costs and access to investment capital. Without liability 

protection, developers, local redevelopment authorities and 

businesses are hesitant to consider any form or ownership 

or even redevelopment partnership. Banks and other institutions are unlikely to finance these projects.245

The 2002 Brownfields Act, according to Paul Schoff, however, 

provided a way for the Federal Government to bow out of enforcement actions on brownfield sites enrolled in a VCP (an occurrence 

called ‘‘overfiling’’) unless the State requests Federal action, there 

is an imminent and substantial danger to health or the environment, or where new contamination information requires further remediation.246 As a result, States now use their VCPs to assuage liability fears. 

Todd Davis of the private redevelopment firm Hemisphere Development LLC described the State programs as ‘‘gaining in popularity because they allow private parties to initiate cleanups and 

work cooperatively with [S]tate agencies, thus avoiding some of the 

costs and delay that would likely occur if the sites were subject to 

enforcement-driven programs.’’ 247

Echoing Davis’s sentiment, Robert Colangelo of the National 

Brownfields Association testified in a later hearing, ‘‘[S]tate programs provide liability relief, financial incentives and technical assistance. Most developers who purchase impaired properties have 

come to rely heavily on the liability relief offered through [S]tate 

voluntary cleanup programs[.]’’ 248

36

249 Id. at 57 (statement of Paul Schoff of Feinberg and Schoff, LLP, and chief executive officer 

of Brownfield Realty, Ltd.). 250 ‘‘RCRA’’ refers to the Resource Conservation and Recovery Act of 1976. Public Law No. 94–

580, 90 Stat. 2795 (codified as amended 42 U.S.C. § 6901 et seq. (2006)). According to EPA, 

RCRA gave the agency ‘‘cradle-to-grave’’ authority to control the ‘‘generation, transportation, 

treatment, storage, and disposal of hazardous waste.’’ ‘‘RCRA also set forth a framework for the 

management of non-hazardous wastes. The 1986 amendments to RCRA enabled EPA to address 

environmental problems that could result from underground tanks storing petroleum and other 

hazardous substances. RCRA focuses only on active and future facilities and does not address 

abandoned or historical sites.’’ U.S. Environmental Protection Agency, Resource Conservation 

and Recovery Act (last modified June 12, 2006) <http://www.epa.gov/region5/defs/html/

rcra.htm>. ‘‘TSCA’’ refers to the Toxic Substance Control Act. Public Law No. 94–469, 90 Stat. 

2003 (codified as amended 15 U.S.C. § 2601 et seq. (2006)). The Toxic Substances Control Act 

[TSCA] of 1976 was enacted by Congress to give EPA the ability to track the 75,000 industrial 

chemicals currently produced or imported into the United States. EPA repeatedly screens these 

chemicals and can require reporting or testing of those that may pose an environmental or 

human-health hazard. EPA can ban the manufacture and import of those chemicals that pose 

an unreasonable risk. U.S. Environmental Protection Agency, Toxic Substances Control Act (last 

modified Apr. 14, 2006) <http://www.epa.gov/region5/defs/html/tsca.htm>. 251See Pennsylvania Brownfields hearing at 43 (statement of Eugene DePasquale, deputy secretary for Community Revitalization and Local Government Support of the Pennsylvania Department of Environmental Protection). 252 Id. 253 Id. at 46. 254 Id. at 57 (statement of Paul Schoff of Feinberg and Schoff, LLP, and chief executive officer 

of Brownfield Realty, Ltd.). 255 Id. at 43 (statement of Eugene DePasquale, deputy secretary for Community Revitalization 

and Local Government Support of the Pennsylvania Department of Environmental Protection). 256 Id. at 72 (statement of Robert Colangelo, executive director of the National Brownfield Association). 257 Id. 258 Id. 

The 2002 Brownfields Act restricted overfiling on brownfield sites 

enrolled in State programs only in CERCLA enforcement cases, 

however. ‘‘EPA is free to pursue claims and enforcement under 

Federal environmental laws such as RCRA, TSCA and the like,’’ 

Paul Schoff explained.249 250

That remaining liability proved to be a lingering deterrent to development projects in Pennsylvania, and, in 2004, the Commonwealth and EPA entered a one-of-its-kind MOA, DePasquale reported.251 The Pennsylvania-EPA MOA created a ‘‘one-stop 

shop’’ 252 through which Pennsylvania can now ‘‘give developers 

limited comfort with respect to associated [F]ederal liabilities.’’ 253

That MOA ‘‘covers Federal involvement where CERCLA, RCRA 

and TSCA legislation is implicated and clarifies how sites remediated under Act 2[, Pennsylvania’s VCP,] may also satisfy requirements for these three key Federal environmental laws.’’ 254

Deputy Secretary DePasquale testified that while Pennsylvania 

is happy to be the only State in the country with this type of broadranging MOA because of the competitive advantage it creates, ‘‘the 

reality is that we think every State in the country should at some 

point have that agreement with EPA so that we can move projects 

forward across the country on brownfields.’’ 255

According to Colangelo, Pennsylvania’s program is one of the 

‘‘strongest’’ in the country and most ‘‘innovative’’ because of the 

level of liability relief site owners can secure.256 ‘‘[I]t is so important that . . . [States] can offer a broad range of brownfield sites, 

such as RCRA, CERCLA and TSCA [impacted sites] to be included 

under the brownfield program.’’ 257 Echoing DePasquale, Colangelo 

concluded the Pennsylvania ‘‘MOA is a model that other States will 

start to emulate.’’ 258

Even as other States explore similar MOAs these agreements 

will only provide developers with ‘‘limited comfort with respect to 

37

259 Id. at 46 (statement of Eugene DePasquale, deputy secretary for Community Revitalization 

and Local Government Support of the Pennsylvania Department of Environmental Protection). 260 Id. 261 Id. at 80 (statement of Subcommittee Chairman Michael R. Turner). 262 Id. at 82 (statement of Paul Schoff of Feinberg and Schoff, LLP, and chief executive officer 

of Brownfield Realty, Ltd.).

associated [F]ederal liability,’’ DePasquale warned.259 The Pennsylvania-EPA MOA applies only to the ‘‘joint processing of applications. It does not mean that [F]ederal liability can be relieved by 

successful participation in the [S]tate brownfields program. To provide the assurances that are necessary to developers, these efforts 

need to progress to genuine liability relief as opposed only to joint 

processing of applications,’’ DePasquale told the Subcommittee.260

Asked whether there is ‘‘a need for additional legislation to enable EPA to . . . [enter similar MOAs] on a routine basis so that 

the 2002 Small Business Liability Relief and Revitalization Act 

would recognize that both EPA and the States are encouraged to 

have a broader MOA,’’ 261 stakeholders responded that the value of 

liability release to site owners and developers was incalculable. 

Paul Schoff of Brownfield Realty, Ltd. testified that agreements 

comparable to the Pennsylvania-EPA MOA would be a critical 

asset in a developer’s tool box:

[B]efore the MOU or MOA came into effect, you still had 

the concern that, ‘‘Gee, if it was something covered by 

RCRA or TSCA . . . the legislation which was passed in 

January 2002 is not going to cover it.’’ So you still have 

that potential risk. In the back of your mind you are thinking, ‘‘Well, the EPA could still come in and do this. They 

could come in, they could do an overfiling, they could say, 

‘Alright, we know you are under the Pennsylvania program, but under our auspices, now, we don’t think that 

meets muster.’ ’’ To have that one-stop shop is critical from 

the private sector’s standpoint . . . to know that you have 

complete protection, that you only have to deal with the 

agency on a one-time basis.262

Colangelo expanded upon Schoff’s statement, suggesting a number of brownfield sites remain undeveloped because of fear of the 

lingering potential liability:

According to our research, there is about $4 to $6 trillion 

of industrial property in the United States and corporations own about 40 percent of that . . . . [W]e estimate 

that somewhere between 20 to 50 percent of it is environmentally impaired. And those sites aren’t coming to market because of this reason . . . . [T]he next evolution for 

the brownfield market is dealing with this liability relief 

for liability clarity for the potentially responsible parties 

and . . . the key there is, I think we all agree in polluter 

pays, the question is how much and there is a whole group 

of companies out there that are willing to voluntarily clean 

up their properties to the suggested standards through the 

State voluntary cleanup programs if they can get off the 

hook and right now, we have a double standard. A developer or prospective purchaser can buy a property, enter it 

38

263 Id. at 83 (statement of Robert Colangelo, executive director of the National Brownfield Association). 264Ohio Brownfields hearing at 88 (statement of Todd Davis, chief executive officer of Hemisphere Development LLC). 265Pennsylvania Brownfields hearing at 131 (statement of Stephen Donches, president of the 

National Museum of Industrial History). 266 Id. at 82–83 (statement of Paul Schoff of Feinberg and Schoff, LLP, and chief executive 

officer of Brownfield Realty, Ltd.). 267Ohio Brownfields hearing at 90 (statement of Todd Davis, chief executive officer of Hemisphere Development LLC). 268Ohio Brownfields hearing at 94 (statement of Todd Davis, chief executive officer of Hemisphere Development LLC). 269 Id. at 102 (statement of Barry Franz, P.E., BCEE, P.G., principal engineer of Civil & Environmental Consultants, Inc.). 

into the program, clean it up to the standard, get liability 

relief, but the property owner can’t.263

Todd Davis simply stated, ‘‘Congress . . . should take all actions 

within its power to clarify liability issues and create more attractive and sustainable financial incentives to encourage investment 

in brownfield redevelopment.’’ 264

‘‘[T]he issue . . . of finality and liability release, if you don’t have 

that, you are not only not going to get developers, you are not going 

to get anybody to finance the projects, either,’’ Stephen Donches 

emphasized.265

To clarify and expand the liability provision would remove a barrier for many brownfield redevelopment projects. Schoff recommended the simplest solution to achieve this result:

[A]mend the 2002 legislation to include protection under 

all Federal environmental laws, not just under CERCLA. 

. . . [F]or CERCLA not to include petroleum, . . . the vast 

majority of brownfields out there have some petroleum 

contamination, some petroleum constituent . . . CERCLA 

doesn’t touch that. That is RCRA and other Federal environmental statutes.

If the 2002 legislation were to be amended to include protection for under all Federal environmental statues, I 

think that would go a long way toward easing a lot of people’s fears and putting their fears to rest once and for 

all.’’ 266

Beyond liability issues, stakeholders all expressed concern over 

lack of adequate funds for brownfields redevelopment. According to 

Todd Davis, ‘‘Current estimates place the cost of cleaning up the 

Nation’s brownfields at $650 billion.’’ 267

While loosening spending restrictions on EPA funds would free 

more money for remediation and redevelopment activities, it would 

not expand the pool of available funds. ‘‘Public and private resources for brownfields assessment and remediation are limited—

just one more deterrent for would-be developers. Therefore, Congress must create a viable broad-based economic incentive to make 

significant, measurable progress in tackling brownfield sites,’’ Todd 

Davis told the Subcommittee.268 Similarly, Barry Franz testified, 

‘‘[B]rownfields redevelopment is complex and costly as compared to 

the greenfield property. Economic incentives are necessary to spur 

this redevelopment.’’ 269

While assessment and remediation costs ‘‘carry a big price tag of 

brownfields,’’ Craig Kasper advised, ‘‘other issues exist . . . that 

can be just as critical to a successful development. Demolition, upVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00044 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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270 Id. at 113 (statement of Craig Kasper, chief executive officer of Hull & Associates, Inc.). 271 Id. 272 Id. at 100 (statement of Thomas Stone, executive director of the Mt. Pleasant NOW Development Corp.). 273Pennsylvania Brownfields hearing at 73 (statement of Robert Colangelo, executive director 

of the National Brownfield Association). 274 Id. 275 Id. 276Ohio Brownfields hearing at 120 (statement of Todd Davis, chief executive officer of Hemisphere Development LLC). 277 Id. at 8 (statement of Joseph Dufficy, Chief of the Brownfields and Early Action Section 

at the U.S. Environmental Protection Agency Region V Office). 278 Id. at 68 (statement of Amy Yersavich, manager of the Voluntary Action Program of the 

Ohio Environmental Protection Agency). 279 Id. at 21. 280 Id. at 21–22. 

grading infrastructure, and environmental are just a few examples.’’ 270 Kasper urged, ‘‘Consideration to all critical activities necessary for redevelopment should be considered as eligible cost on[ 

]sites that are ultimat[ly] cleaned up and, of course, with an approved State program.’’ 271

Expounding upon the arguments of Davis, Franz, and Kasper, 

Thomas Stone advised, ‘‘Securing significant funding to return 

brownfields to productive use should be a major part of this country’s initiative to strengthen America’s cities.’’ 272

‘‘As time goes on, fewer easy-to-develop brownfield sites are 

available, and so cities are going to be left with the harder, more 

complicated sites and these have to have financial incentives to attract private sector investment,’’ Colangelo advised the Subcommittee.273 Because these sites are so complicated, States are 

limited in how attractive they can make such redevelopment opportunities appear. States ‘‘can’t . . . tackle brownfields alone,’’ 

Colangelo testified.274 He concluded, redeveloping the Nation’s 

brownfields ‘‘requires a partnership with the private sector. And 

the government’s role . . . is best as a facilitator and the administrator of programs that reduce risk and attract private investment.’’ 275

‘‘[T]he private sector has to be the leader in getting these deals 

done. . . . [T]here’s a limited amount of grant dollars that will ever 

be available for brownfield redevelopment,’’ Todd Davis likewise informed the Subcommittee.276

EPA’s Joseph Dufficy testified similarly:

[N]otwithstanding all of the efforts [of] the Federal, State, 

[and] local units of government, we will never be able in 

the public sector to clean up the hundreds of thousands of 

sites that are out there. The only way that will happen is 

with significant increases in funding and influences from 

the private sector.277

Echoing Robert Colangelo, Amy Yersavich of the Ohio EPA noted 

that ‘‘the need is now . . . [for] some of the higher hanging fruit, 

some of the more complicated sites that maybe need a little 

push.’’ 278 ‘‘Encouraging private developers to take on brownfield 

redevelopment projects at sites with large amounts of contamination or where complex cleanup is needed’’ remains a large obstacle, 

said Yersavich.279 Unfortunately, she testified, ‘‘Most government 

brownfield incentives are available only to local governments or 

other public entities.’’ 280 Therefore, ‘‘a tax credit that would enVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00045 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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281 Id. 282 Id. at 67 (statement of Tracy Nichols, assistant director for Economic Development at the 

Cuyahoga County, OH, Department of Development). 283 Id. at 108 (statement of Barry Franz, P.E., BCEE, P.G., principal engineer of Civil & Environmental Consultants, Inc.). 284 Id. at 117 (statement of Craig Kasper, chief executive officer of Hull & Associates, Inc.). 285Pennsylvania Brownfields hearing at 88 (statement of Kerry Wrobel, president of Lehigh 

Valley Industrial Park, Inc.).

courage the private sector to increase their brownfields redevelopment work . . . would provide a tremendous boost to . . . urban 

core and small town revitalization efforts,’’ Yersavich concluded.281

Tracy Nichols of the Cuyahoga County Department of Development noted that, in the past, her organization provided funds only 

to municipal governments and to non-profit organizations. ‘‘As our 

economy worsened and cities were hard hit and did not have funds 

available to go out and buy brownfields to redevelop them, we 

changed our program to give funding directly to developers and to 

offer them a forgivable loan. Once that happened, we saw a huge 

increase.’’ 282

Two of the key obstacles to development are ‘‘lack of available 

capital and financial incentives, such as tax deferrals, abatement 

and/or credits . . . [but they are] common to both greenfield and 

brownfield development efforts,’’ testified Barry Franz.283 A tax 

credit for the extra costs incurred developing a brownfield would 

aid in reaching the often cited goal of ‘‘evening the playing field.’’

Based on his experience with State tax credits, Craig Kasper also 

expressed his belief that tax credit would create a valuable incentive for private developers:

More than 20 [S]tates already use some form of tax incentives to encourage brownfield reuse; additional [F]ederal 

incentives could enhance these programs and provide additional resources to promote economic development and reinvestment opportunities in blighted areas. In addition, 

tax incentives that focus specifically on environmental 

cleanup of contaminated properties—when coupled with 

other economic development tools—have the ability to generate renewed interest in brownfield versus greenfield development. Furthermore, developing tax or other financial 

incentives that would provide a funding tool to help cover 

the costs associated with assessment, securing environmental liability insurance and conducting demolition could 

go a long way toward promoting and encouraging new 

brownfield development in critical regions of Ohio and the 

Midwest.284

Comparatively, Kerry Wrobel told the Subcommittee the tax 

credit proposed by ‘‘the Brownfields Revitalization Act of 2005 . . . 

would add another weapon to our arsenal,’’ filling a critical gap in 

brownfields redevelopment incentives.285 Wrobel continued: 

We can provide local tax incentives, we can provide State 

funding, we can provide Federal funding. If we can also 

provide Federal tax incentives, that is a missing link that 

at the moment we cannot provide. As you know, we cannot 

provide Federal grants directly to private business, so that 

is a hole in our incentive program and another form of assistance for those taking the risk—it truly is a risk to step 

41

286 Id. 287Ohio Brownfields hearing at 74 (statement of Joseph Dufficy, Chief of the Brownfields and 

Early Action Section at the U.S. Environmental Protection Agency Region V Office). 288Pennsylvania Brownfields hearing at 78 (statement of Jim Seif, vice president of Corporate 

Relations at PPL Corp.). 289Ohio Brownfields hearing at 125 (statement of Todd Davis, chief executive officer of Hemisphere Development LLC). 290Ohio Brownfields hearing at 95 (statement of Todd Davis, chief executive officer of Hemisphere Development LLC). 291 Id. 

on and develop and put one’s equity into a brownfield 

site.286

Joseph Dufficy likewise characterized a Federal tax credit as a 

useful tool in brownfields redevelopment:

I’ve been doing this for about as long as anybody in Federal Government and what brownfields need is as many 

tools in the toolbox as you can possibly get. The issue at 

hand is largely real estate transactions. That’s really what 

a brownfield is. And anything that can impact whether a 

real estate transaction can go forward is what we really 

need.287

Jim Seif testified that even a small impact can tip the scales for 

a brownfield project. Whether the tax relief is on the Federal, 

State, or local level, that relief might result in a ‘‘few more dollars 

added [to the deal]. And when you are dealing with a decision between this piece of land or that piece, $12.50 can swing a deal. It 

can be the lubrication needed to make a decision go faster and the 

tax element is always part of a deal.’’ 288

From a developer’s perspective, Todd Davis explained, ‘‘[I]f you 

shift the incentive to private marketplace and you come up with a 

self-implementing private tax program, and you’re doing it as a 

percentage of cleanup costs, cleanup costs defined by . . . however 

the final definition comes down, then you can actually raise those 

limits of private investment and shift the pace dramatically.’’ 289

Davis also testified that while a tax credit would not spur industrial redevelopment, it would make reuse of properties and investment in those sites more attractive:

Historically, [F]ederal, [S]tate, and local policies have done 

little to spur industrial redevelopment. Rehabilitation tax 

credits offered during the mid-1970s provided incentives to 

invest in real estate and redevelopment. These tax incentives helped stem the exodus of businesses from long-established neighborhoods and made reuse more economically attractive. However, these tax advantages effectively 

vanished under the 1986 tax code revisions. . . . As a result, investors turned to potentially more lucrative sources 

of return, such as Wall Street, and many rehabilitation 

projects failed to materialize. Limited tax relief, allowing 

current deductibility or remedial costs, offers little incentive to would be brownfields redevelopers or property owners.290 (citations omitted) 

Davis further explained that the utility of current Federal tax 

credits for brownfield redevelopment ‘‘has not been meaningful due 

to significant limitations placed in [F]ederal programs.’’ 291 ConVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00047 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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292 Id. 293 Id. at 54 (statement of Tracy Nichols, assistant director for Economic Development at the 

Cuyahoga County, OH, Department of Development). 294 Id. 295 Id. at 57 (statement of Casey Stephens, manager of Public Services and Brownfield Coordinator at the city of Toledo, OH, Division of Environmental Services). 296 Id. 297 Id. at 64–65. 298 Id. at 63. 299 Id. at 57. 300 Id. at 63–64. 301 Id. at 67. 

sequently, Davis advised the Subcommittee, ‘‘any proposed tax 

credit program should not only be limited only to the most distressed urban areas, as significant brownfields are a problem in 

every community; the tax credits should be freely transferable; and 

the tax credits should provide a substantial enough incentive to encourage investment in complex transactions.’’ 292

Tracy Nichols also expressed support for a Federal tax credit ‘‘as 

long as the credits are available for all brownfield sites and not 

limited to areas of poverty.’’ 293 ‘‘Brownfields clearly impact the 

inner ring suburbs as well as [t]he larger urban metropolitan 

areas,’’ she explained, and ‘‘tax credits would make more funds 

available for the sites which have been very difficult to remediate 

due to the high cost of the remediation.’’ 294

While Davis and Nichols both opined a Federal tax credit should 

not be limited to distressed communities, other stakeholders suggested securing redevelopment funds from private investors is most 

difficult in economically distressed areas. 

‘‘Our problem is attracting investments to invest into the central 

city area,’’ Casey Stephens, brownfield coordinator for the city of 

Toledo, told the Subcommittee.295 Stephens testified to Toledo’s 

success in ‘‘cleaning up contaminated and industrial sites and getting them back into reuse,’’ but noted they ‘‘found that there are 

certain areas of the city that have been left behind. And those 

areas of the city are the central city area that are most impacted 

by brownfield locations located therein.’’ 296 ‘‘Toledo has found that 

accessing cleanup funds is not as much of an issue as encouraging 

investment in low-income neighborhoods where the residents don’t 

have disposable income[.]’’ 297

More incentives are necessary to incite interest in brownfield 

sites in the economically distressed areas, Stephens said. ‘‘Developers and businesses have invested and redeveloped many desirable brownfield sites within Toledo, the ‘‘low-hanging fruit,’’ as it 

were. But our problem is attracting investment into the areas most 

impacted by brownfield, especially in a weak market location.’’ 298

‘‘So the city of Toledo supports anything that the Federal Government can do to help attract private investment into the central city 

areas,’’ Stephens testified.299 ‘‘Toledo believes that additional incentives must be in place to stimulate central city investment in 

brownfield sites. These additional incentives should not be considered a subsidy to urban areas by suburban and rural districts. The 

suburban fringe cannot prosper without a strong urban core,’’ Stephens continued.300 ‘‘[Y]ou can’t have a strong suburban area without a strong core area. And we feel that anything we can do to attract . . . private investment, into the central city, into the core 

area will go a long way in strengthening our whole regional economy,’’ Stephens concluded.301

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302Pennsylvania Brownfields hearing at 133 (statement of Ray Suhoki, president and chief operating officer of the Lehigh Valley Economic Development Corporation). 303 Id. at 109. 304 Id. at 133. 305See id. at 48 (statement of Eugene DePasquale, deputy secretary for Community Revitalization and Local Government Support of the Pennsylvania Department of Environmental Protection); id. at 91 (statement of Kerry Wrobel, president of Lehigh Valley Industrial Park, Inc.). 306 Id. at 47 (statement of Eugene DePasquale, deputy secretary for Community Revitalization 

and Local Government Support of the Pennsylvania Department of Environmental Protection). 307 Id. 308 Id. at 91 (statement of Kerry Wrobel, president of Lehigh Valley Industrial Park, Inc.). 

Ray Suhocki of the Lehigh Economic Development Corp. related 

concerns similar to Casey Stephens. Suhocki testified that there 

are ‘‘approximately 100 brownfield sites in the Lehigh Valley [region of Pennsylvania],’’ 302 the majority of which are located within 

‘‘smaller, generally poorer municipalities.’’303 These sites ‘‘are not 

all as famous and large as . . . the LVIP [Lehigh Valley Industrial 

Park] project,’’ Suhocki told the Subcommittee, ‘‘but they are very 

important [projects] and each one of those [sites] . . . are typically 

within an urban setting and . . . the tax credit will help those 

kinds of properties be returned to use[.]’’ 304

Stakeholders voiced support for tax incentives for other redevelopment expenditures as well. Echoing statements of earlier witnesses, Deputy Secretary DePasquale and Kerry Wrobel emphasized the importance of environmental insurance.305

Environmental insurance provides a backstop against an unanticipated rise in remediation and redevelopment costs or against 

unexpected additional costs. These insurance policies are extremely 

costly, however, and a tax credit for the premiums would be a valuable incentive to private developers. DePasquale explained:

Fixed prices provide an incentive to move forward with redevelopment. [Environmental insurance] helps developers 

prepare budgets and attain financing because it removes 

the worries that financial institutions have when lending 

toward contaminated properties. A [F]ederal tax credit 

would enable developers to purchase the insurance they 

need to guarantee fixed pricing in remediation. The insurance guarantees that remediation costs to the developer 

will not exceed a set amount. The tax credit puts the insurance costs within reach and provides assurances needed 

to move ahead with cleanup, removing a hurdle that developers face when confronted by the decision to take on revitalizing abandoned industrial sites.306

The Commonwealth believes this incentive is so important to encouraging redevelopment efforts that the legislature ‘‘is considering 

legislation . . . that would create a program for the purchase of 

certain types of environmental liability insurance, and for grants to 

pay the costs of those premiums,’’ DePasquale reported.307

As an alternative to a tax credit for environmental insurance 

premiums, Kerry Wrobel suggested permitting the use of Revolving 

Loan Fund moneys to purchase environmental insurance. ‘‘Environmental insurance premiums for brownfield sites can reach seven 

figures. Equally challenging, the environmental insurance premium 

must be paid at the time of land acquisition, before land sales can 

generate revenue for an organization,’’ Wrobel testified.308 ‘‘A grant 

from the Revolving Loan Fund could provide critical assistance 

44

309 Id. at 87. 310 Id. at 47 (statement of Eugene DePasquale, deputy secretary for Community Revitalization 

and Local Government Support of the Pennsylvania Department of Environmental Protection). 311 Id. at 131 (statement of Stephen Donches, president of the National Museum of Industrial 

History). 312 Id. 313 Id. 314 Id. at 47 (statement of Eugene DePasquale, deputy secretary for Community Revitalization 

and Local Government Support of the Pennsylvania Department of Environmental Protection). 315 Id. 

early in the project’s life and, once again, offset a premium cost not 

experienced in greenfield development.’’ 309

Deputy Secretary DePasquale also expressed support for tax free 

bond financing:

Many developers still lack the capital to undertake 

brownfield ventures. Investors are reluctant to commit 

money for projects when the return on their investment 

could be years away. Congresswoman Hart has introduced 

two pieces of legislation designed to support redevelopment 

of old industrial sites common to western Pennsylvania. 

One bill would give tax-exempt status on bonds used to 

help finance the cleanup of brownfields. That currently is 

not the case. Bonds provide developers and businesses 

with the access to capital they need to clean up the sites. 

The other bill would allow businesses or developers to 

build savings accounts free of taxation for the cleanup of 

such sites. The tax advantages would apply only if the 

money is spent on remediation. The savings accounts 

would be the business equivalent of Individual Retirement 

Accounts [IRAs]. Congress should examine both of these 

bills as a means to enhance support for brownfield remediation.310

Explaining the importance of bonding at the State level, Stephen 

Donches testified, ‘‘[I]nfrastructure funding, both onsite and offsite, 

is critical and [it is critical] to get that into play early on.’’ 311 In 

the redevelopment of the Bethlehem Steel brownfield site, Donches 

reported redevelopers ‘‘were fortunate to have the county . . . push 

for a bond issue that resulted in some $13 million for a road that 

gets into the [redeveloped] area . . . but even with early support 

. . . [it] has taken a long time’’ to complete the infrastructure.312

‘‘[I]t won’t do any good to have a remediation plan and go through 

the whole process if you can’t get to the site,’’ Donches concluded.313

In addition to clarifying liability provisions and providing more 

funds for cleanup through new incentives, stakeholders stressed 

the importance of minimizing the time businesses spend securing 

the proper permits for redevelopment. 

Deputy Secretary DePasquale argued that ‘‘all [F]ederal departments should streamline permitting to favor redevelopment of 

brownfields.’’ 314 ‘‘Providing incentives and ensuring liability are essential,’’ DePasquale told the Subcommittee, ‘‘But streamlining the 

process is critical to ensure that these sites remain competitive on 

the open market. The faster we move brownfield sites through the 

regulatory process, the quicker we reclaim these sites and clean up 

communities.’’ 315

45

316 Id. at 114 (statement of Ray Suhoki, president and chief operating officer of the Lehigh 

Valley Economic Development Corp.). 317 Id. 318 Id. 319Ohio Brownfields hearing at 85 (statement of Todd Davis, chief executive officer of Hemisphere Development LLC). 320 Id. 321 Id. 322See id. at 121 (statement of Thomas Stone, executive director of the Mt. Pleasant NOW 

Development Corp.). 323 Id. 324 Id. 

Ray Suhocki explained that the administrative burden involved 

in a redevelopment project often results in greater project cost and 

loss of time because ‘‘[m]ulti-layered regulatory programs . . . 

often times require numerous approvals from multiple agencies and 

departments within agencies.’’ 316 Suhocki praised the Pennsylvania Brownfields Action Team [BAT] program, which facilitates 

the review and approval process. The BAT ‘‘created a single-pointof-contact approach . . . . All permits, plans, reports and submittals required to demonstrate compliance under [S]tate environmental laws go through one point of contact. That contact is responsible for facilitating the review and approval process that ultimately reduces the cost and time to complete projects.’’ 317 Suhocki 

recommended a similar approach be adopted by the Federal Government through the MOAs between States and the EPA. By appointing in the MOA one point of contact for projects requiring both 

State and Federal approval, ‘‘a ‘one-stop-shop’ can be established 

where both agencies agree to one lead agency and one point of contact that is responsible for facilitating all review and approvals required to comply with both [S]tate and [F]ederal environmental 

laws.’’ 318

In his review of the ‘‘the good, the bad, and the ugly’’ of 

brownfields redevelopment, Todd Davis identified the time consumed by administrative processes as ‘‘the bad.’’ 319 ‘‘In part, due 

to the way the regulatory process is implemented, at least from a 

developer’s perspective, the deals are still very difficult and it takes 

way too long to get them done. In many cases, Ohio brownfield 

deals are simply economically unviable without significant subsidy.’’ 320 ‘‘The ugly,’’ testified Davis, ‘‘is the thought of brownfield 

redevelopment in Ohio without significant subsidy . . . I applaud 

your effort in coming up with a creative brownfield tax credit strategy, which from my perspective is the only way to get a meaningful 

shift of capital from a private perspective into brownfield redevelopment, not only in Ohio, but throughout the country.’’ 321

Thomas Stone of the Mt. Pleasant NOW Development Corp. also 

cited administrative burdens as a stumbling block for redevelopment projects. The time delay caused by administrative burdens, 

Stone said, can make or break a deal.322 ‘‘[W]hen we tell [investors] 

basically there’s a time horizon of . . . 18 months to 2 years before 

we could even potentially clean the site, they’re saying, thanks but 

no thanks.’’ 323 ‘‘Businesses are looking at when they want to put 

in a new store, where they want to create a facility. They’re just 

looking for the available site,’’ Stone told the Subcommittee, ‘‘[s]o 

if we can only present them with the opportunity of, well, in 2 

years we might have something available for you, then we continually miss these opportunities.’’ 324

46

325Pennsylvania Brownfields hearing at 43 (statement of Eugene DePasquale, deputy secretary for Community Revitalization and Local Government Support of the Pennsylvania Department of Environmental Protection). 326 Id. 327 Brownfield Overview hearing at 25 (statement of John Stephenson, Director of the Natural 

Resources and Environment, U.S. Government Accountability Office). 328 Id. at 26. 329See id. 330 Id. 331 Id. 332See GAO Report at 27. 

To address this barrier to private investment, Deputy Secretary 

DePasquale suggested the Federal Government ‘‘keep[] in mind 

that we have to level the playing field’’ and that ‘‘a streamlined 

permitting process for priority brownfield districts at the Federal 

level’’ is one way government can ‘‘continue to work at ways to 

equalize that playing field.’’ 325 ‘‘[I]f people that are investing feel 

that they are going to have too long a time of getting their permitting up or the funding will be too difficult to achieve, they simply 

will not invest in those sites, so we all have to work together to 

come to that common ground,’’ DePasquale concluded.326

IV. FINDINGS AND RECOMMENDATIONS

A. FINDINGS

1. EPA Brownfields Program assessment, cleanup, job training, research, and technical assistance grants are perceived as successful, but the actual impact is difficult to determine. 

According to stakeholders, EPA funds ‘‘provide[] an important 

contribution to site cleanup and redevelopment by funding activities that might not otherwise occur,’’ testified John Stephenson of 

GAO.327 Despite the perceived success of the Brownfields Program 

and the positive remarks from the stakeholder community, Stephenson reported GAO was unable to measure the actual impact 

of EPA funding for two reasons. First, GAO found that ‘‘the impact 

of EPA’s funding is difficult to isolate because it is often combined 

with funds from other sources.’’ 328 Second, GAO determined EPA’s 

performance measures for the Brownfields Program are inadequate, limiting both EPA’s and Congress’ ability to gauge progress 

toward the major goals of the program.329 EPA reports raw numbers of site assessments, funds leveraged, and jobs generated, but 

the agency is unable to report on one of the program’s stated objectives—grantees’ cleanup and redevelopment activities. Additionally, 

while it is not one of the primary objectives of the Brownfields Program, assistance to State voluntary cleanup programs represents 

approximately one-third of the program’s fund expenditures. However, ‘‘EPA does not collect data on its assistance to [S]tate voluntary cleanup programs, for such activities as compiling inventories of brownfield sites, performing site assessments, and developing guidance for program participants.’’ 330 Finally, GAO noted, 

‘‘although EPA’s overall mission is to protect human health and the 

environment, the agency has not yet developed measures to determine the extent to which the Brownfields Program helps reduce environmental risks.’’ 331

EPA agreed with the GAO report findings and responded positively to the suggestions therein.332 Thomas Dunne of EPA testified 

that the agency developed a new data collection mechanism to colVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00052 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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333See Brownfield Overview hearing at 7 (statement of Thomas Dunne, Deputy Assistant Administrator in the Office of Solid Waste and Emergency Response, U.S. Environmental Protection Agency). 334See id. 335See id. (statement of John Stephenson, Director of the Natural Resources and Environment, U.S. Government Accountability Office). 336See id. at 36. 337See id. 338See GAO Report at 5. 339 Brownfield Overview hearing at 37 (statement of John Stephenson, Director of the Natural 

Resources and Environment, U.S. Government Accountability Office). 340 Id. at 38. 341 Id. at 37.

lect more detailed data from its revolving loan fund grantees.333

EPA designed this new mechanism to enable the agency to correlate program results with grantee performance in order to measure programmatic success.334 Dunne also reported that the agency 

is working with administrators of State and tribal programs to develop performance measures that will link program performance to 

the number of acres remediated and ready for reuse to gauge the 

impact of EPA funds on State voluntary cleanup programs.335

2. The EPA Brownfields Program revolving loan fund is underutilized. 

GAO reported that nearly half of the stakeholders interviewed 

reported the underutilization of revolving loan fund grants.336

GAO’s investigation revealed that only 47 of 154 grantees issued 

loans for a total of 67 brownfields projects.337 GAO further reported, ‘‘As of November 2004, grant recipients had loaned out less 

than $29 million (about 17 percent) of the $168 million in revolving 

loan fund grants awarded by EPA.’’ 338 Stakeholders reported the 

primary reason for underutilization is the special technical or administrative requirements of administering a fund. ‘‘Managing a 

revolving loan fund requires a government or nonprofit entity to 

perform many of the functions of a commercial lending institution, 

including establishing interest rates and collateral requirements; 

processing and approving loans; and collecting loan payments . . . 

staff time and expertise are key to making these loans.’’ 339 Further, some grant recipients stated, ‘‘EPA’s grants were not large 

enough to justify the time and effort required to establish a fund 

because it is frequently depleted after one or two loans are 

made.’’ 340

Stakeholders suggest greater efficiency would result if EPA gave 

‘‘priority to applicants with proven expertise or to coalitions of 

agencies that can consolidate administrative functions and thereby 

produce economies of scale.’’ 341 Stakeholders specifically noted: 

[G]rant recipients with in-house technical expertise, such 

as economic development or regional planning agencies, 

were more likely to have financial expertise or experience 

administering other revolving loan funds and were therefore in a better position to set up a fund. Grant recipients 

that partnered with other [S]tate or local agencies to obtain technical expertise also were successful in this regard. 

Two revolving loan fund grant recipients also reported that 

grant recipients who hired contractors to manage the administrative aspects of the revolving loan fund have been 

48

342 U.S. Government Accountability Office, Brownfield Redevelopment, Report No. GAO–05–94, 

at 23 (2004). 343 Id. at 7 (statement of Thomas Dunne, Deputy Assistant Administrator in the Office of 

Solid Waste and Emergency Response, U.S. Environmental Protection Agency). 344 Id. at 18. 345 Id. 346 Id. 347State Incentive Programs hearing at 95 (statement of Jonathan Philips, senior director of 

Cherokee Investment Partners, LLC). 348 Id. at 41 (statement of Douglas Scott, director of the Illinois Environmental Protection 

Agency). 349 Id. 350 Id. 351 Id. 352 Id. at 23 (statement of John Magill, director of the Ohio Department of Development Office 

of Urban Development). 

successful at establishing a fund framework and were better positioned to make loans.342

Dunne testified that ‘‘EPA is committed to improving revolving 

loan fund performance and ensuring that, if grant funds are not 

being used, those grant funds will be closed out or grantees will be 

required to transition old loan fund grants to the new Brownfields 

Law program authority.’’ 343

Dunne further testified that EPA agreed that ‘‘efficiency and 

economies of scale often can be achieved by Revolving Loan Fund 

entities with proven track records that build upon administrative 

expertise.’’ 344 Accordingly, ‘‘EPA has invited coalitions of eligible 

entities to pool their Revolving Loan Fund grant requests and submit a single grant application for consideration.’’ 345 Further, the 

agency is ‘‘adjusting ranking criteria for Revolving Loan Fund applicants, giving more weight to ranking factors which demonstrate 

an applicant’s ability to manage a fund and make loans.’’ 346

3. Congress authorized $250 million per year from fiscal year 2002 

through fiscal year 2006 for the Federal Brownfields Program. 

Congress has yet to appropriate the full authorized level of 

funding, yet even the authorized level of funding is insufficient 

for the task. 

A number of witnesses in this series of hearings touched upon 

the daunting number of unremediated brownfields remaining, despite State revitalization efforts. While ‘‘well-designed State programs are a critical component of this Nation’s efforts to revitalize 

lands[,] . . . they are not sufficient to solve this Nation’s 

brownfield problem in our lifetime,’’ Jonathan Philips testified.347

Many States have ‘‘more sites than . . . funds,’’ testified Douglas 

Scott.348 ‘‘State and local governments have been very creative in 

utilizing all of the myriad resources that they have financially to 

try to assist with these sites.’’ 349 He continued, ‘‘It is pretty clear 

. . . that the number of sites isn’t being lessened to the rate that 

any of us would like to see.’’ 350 However, ‘‘money is only part; the 

rest must come from tax credits and other targeted incentives to 

the private sector to bring them into these sites,’’ Scott concluded.351

John Magill also warned the subcommittee that State dollars are 

not enough to address the brownfields problem alone. ‘‘Access to 

additional sources of Federal dollars through the tax credits or increased resources at U.S. EPA are [sic] crucial to stretching State 

funding to undertake additional local projects.’’ 352

49

353Ohio Brownfields hearing at 100 (statement of Thomas Stone, executive director of the Mt. 

Pleasant NOW Development Corp.). 354 Id. at 90 (statement of Todd Davis, chief executive officer of Hemisphere Development 

LLC). 355 Id. at 120. 356 Id. at 94. 357 Id. at 8 (statement of Joseph Dufficy, Chief of the Brownfields and Early Action Section 

at the U.S. Environmental Protection Agency Region V Office). 358 Brownfield Overview hearing at 124 (statement of Douglas L. Steidl, president of the American Institute of Architects). 359 Id. at 124–125. 360Ohio Brownfields hearing at 68 (statement of Amy Yersavich, manager of the Voluntary 

Action Program of the Ohio Environmental Protection Agency). 361 Brownfield Overview hearing at 52 (statement of the Honorable Don Plusquellic, mayor of 

the city of Akron, OH, and president of the U.S. Conference of Mayors). 

Likewise, Thomas Stone advised the subcommittee: ‘‘Securing 

significant funding to return brownfields to productive use should 

be a major part of this country’s initiative to strengthen America’s 

cities.’’ 353

4. The high cost of brownfields cleanup remains a significant deterrent to private sector investment in brownfield redevelopment. 

Throughout this series of hearings, witnesses frequently expressed concern over a lack of adequate funds for brownfields redevelopment. According to Todd Davis, ‘‘Current estimates place the 

cost of cleaning up the Nation’s brownfields at $650 billion.’’ 354

‘‘There’s only so much, there’s a limited amount of grant dollars 

that will ever be available for brownfield redevelopment,’’ Davis 

testified.355 ‘‘Public and private resources for brownfields assessment and remediation are limited—just one more deterrent for 

would-be developers. Therefore, Congress must create a viable 

broad-based economic incentive to make significant, measurable 

progress in tackling brownfield sites,’’ Davis concluded.356

EPA’s Joseph Dufficy similarly warned,

[N]otwithstanding all of the efforts [of] the Federal, State, 

[and] local units of government, we will never be able in 

the public sector to clean up the hundreds of thousands of 

sites that are out there. The only way that will happen is 

with significant increases in funding and influences from 

the private sector.357

Douglas Steidl of the American Institute of Architects testified 

that while the EPA program has created ‘‘noticeable results,’’ more 

tools are necessary to address the widespread brownfield problem.358 ‘‘[T]here are far more brownfield sites requiring remediation than the U.S. EPA program could ever hope to address in our 

lifetimes. As a result, Federal legislation is needed to expedite site 

cleanup and foster economic development of former industrial properties.’’ 359

Amy Yersavich of the Ohio EPA noted that of the hundreds of 

thousands of remaining brownfield sites, it is the more complicated 

sites that require the most need; it is the ‘‘higher hanging fruit, 

some of the more complicated sites that maybe need a little 

push.’’ 360

Akron, OH Mayor Don Plusquellic agreed, testifying the ‘‘lowhanging’’ fruit—less seriously contaminated properties—have mostly been addressed.361 It is those sites that are more seriously contaminated and/or lie in less desirable locations ‘‘that most developers are not willing to touch. These are the sites that need those 

50

362 Id. at 52–53. 363 Id. at 53. 364 Id. at 54. 365State Incentive Programs hearing at 87 (statement of Robert Colangelo, executive director 

of the National Brownfields Association). 366Ohio Brownfields hearing at 21 (statement of Amy Yersavich, manager of the Voluntary 

Action Program of the Ohio Environmental Protection Agency). 367 Id. at 21–22. 368State Incentive Programs hearing at 8 (statement of Charles Bartsch, senior policy analyst 

at the Northeast-Midwest Institute). 369 Brownfield Overview hearing at 38 (statement of John Stephenson, Director of the Natural 

Resources and Environment, U.S. Government Accountability Office). 370See id. 371 Id. at 60 (statement of James E. Maurin, chairman of the International Council of Shopping Centers and board member of the Real Estate Roundtable). 

added incentives in order to make them competitive in the marketplace, especially if one is comparing it to a greenfield site,’’ according to Plusquellic.362 Extra financial incentives will ‘‘turn negatives 

into positives’’ 363 and ‘‘[t]he one thing that has been missing is a 

tax incentive that will really spur private sector investment to redevelop these sites,’’ Plusquellic noted.364

Robert Colangelo echoed both Yersavich and Plusquellic. The 

‘‘low-hanging fruit’’ is all but gone, leaving ‘‘cities . . . with the 

harder, more complicated brownfield sites . . . . [T]hese sites will 

require meaningful government incentives if the public sector is to 

continue to attract private sector investment and developer interest.’’ 365

‘‘Encouraging private developers to take on brownfield redevelopment projects at sites with large amounts of contamination or 

where complex cleanup is needed’’ remains a large obstacle, reported Yersavich.366 Unfortunately, she testified, ‘‘Most government brownfield incentives are available only to local governments 

or other public entities.’’ 367 Consequently, stakeholders repeatedly 

advised the subcommittee that the Federal Government needs to 

induce private sector interest in redeveloping brownfield sites. 

Charles Bartsch suggested the most effective way to encourage 

an influx of private investment is through tax incentives. ‘‘State 

and Federal tax incentives historically have been used to channel 

investment capital and promote economic development in areas 

that have needed it, and brownfield targeting is a natural evolution 

of this type of program.’’ 368

According to GAO’s investigation, a number of stakeholders likewise suggested a tax credit ‘‘could attract developers to brownfield 

sites on a broader national basis and enhance the [F]ederal, 

[S]tate, and local brownfields redevelopment efforts currently 

under way’’ by ‘‘allow[ing] developers to offset a portion of their 

[F]ederal income tax with remediation expenditures[.]’’ 369 These 

stakeholders also cited the low-income housing tax credit and the 

historic rehabilitation tax credit as successful stimulants to redevelopment.370

James Maurin of the Real Estate Roundtable concluded, ‘‘As the 

threat of excessive environmental liability recedes, the remaining 

problem with most well located brownfield sites is a fairly simple 

one: Money. Other things being equal, it costs more to clean up and 

redevelop a brownfield than it does simply to buy and develop a 

Greenfield.’’ 371 Supportive of a Federal tax credit, Maurin told the 

subcommittee, ‘‘As with the low-income housing tax credit program, 

the private sector would still provide much of the necessary funds 

51

372 Id. 373State Incentive Programs hearing at 166 (statement of Charles Houder, director of acquisitions, Preferred Real Estate Investments, Inc.). 374 Id. at 96 (statement of Jonathan Philips, senior director of Cherokee Investment Partners, 

LLC). 375 Id. 376 Id. 377 Id. 378 Brownfield Overview hearing at 83 (statement of Jonathan Philips, senior director of Cherokee Investment Partners, LLC). 379State Incentive Programs hearing at 165 (statement of Robert Colangelo, executive director 

of the National Brownfields Association). 380 Id. (statement of Jonathan Philips, senior director of Cherokee Investment Partners, LLC). 381 Id. 382Ohio Brownfields hearing at 108 (statement of Barry Franz, P.E., BCEE, P.G., principal 

engineer of Civil & Environmental Consultants, Inc.). 

for cleanup, but the availability of tax credits could tip the scales 

in favor of proceeding with a project rather than passing over an 

otherwise promising site.’’ 372

Charles Houder agreed, ‘‘Tax credits, certainly the historical tax 

credit program has been a difference maker. That is probably the 

single incentive program that has the ability to tip the scale in undertaking a development project.’’ 373

Jonathan Philips likewise testified that a ‘‘national transferable 

credit would be a powerful and fitting complement to State efforts.’’ 374 Philips noted the success of tax credits in development 

areas other than brownfields, suggesting the model should be extended to brownfields. The ‘‘tax credit for rehabilitating historic 

structures that Congress created in 1976 . . . has stimulated more 

than $33 billion in private investment, with over 325,000 housing 

units.’’ 375 The success of this program, Philips testified, is, ‘‘First, 

it is uniform across the Nation, and; second, it works in tandem 

with State programs to drive more historic sites from underwater 

to above-water status.’’ 376 This form of tax credit would be ‘‘a logical extension’’ of prior Federal brownfield efforts, Philips 

opined.377 A transferable tax credit would ‘‘dramatically accelerate 

the rate at which brownfield sites are revitalized in America’’ and, 

in conjunction with certain other tax provisions, has ‘‘the potential 

to prompt cleanup of more brownfield sites in the next 5 years than 

in the last 50 years combined,’’ Philips testified.378

A tax credit, Robert Colangelo told the subcommittee, ‘‘would 

bring additional comfort to banks and the lending community so 

that you would have lesser lines on [sic] equity.’’ 379 Jonathan Philips explained, ‘‘[A] tax credit . . . could be a forward sale situation 

where you can create equity, and that chunk of equity could then 

be leveraged to either attract more equity or to attract debt capital, 

and that is critical to everybody.’’ 380 According to Philips, the benefit of that equity would be particularly helpful ‘‘to a smaller entity 

because . . . it doesn’t start the clock of the return investment 

until—or at least a portion of it until you deploy that capital later 

in the project.’’ 381

Barry Franz summarized the issue for the subcommittee. Two of 

the key obstacles to development are ‘‘lack of available capital and 

financial incentives, such as tax deferrals, abatement and/or credits 

. . . [but these obstacles are] common to both greenfield and 

brownfield development efforts,’’ testified Barry Franz.382 A tax 

credit for the extra costs incurred developing a brownfield would 

52

383State Incentive Programs hearing at 61 (statement of Andrew Hogarth, chief of the Michigan Department of Environmental Quality Remediation and Redevelopment Division). 384 Id. 385 Id. at 41 (statement of Douglas Scott, director of the Illinois Environmental Protection 

Agency). 386 Id. 387 Id. at 83. 388 Id. 389 Id. at 16 (statement of Kathleen McGinty, secretary of the Pennsylvania Department of 

Environmental Protection). 390 Id. at 17. 391 Id. at 82 (statement of John Magill, director of the Ohio Department of Development Office 

of Urban Development). 

aid in reaching the often phrased goal of ‘‘evening the playing 

field.’’

5. Liability fears remain a significant deterrent to private sector investment in brownfield redevelopment. 

Second to the need for money in encouraging further redevelopment efforts, according to the panelists, is the need for further liability relief. 

Andrew Hogarth testified, ‘‘Federal liability continues to be a 

problem. Many potential property transactions fail due to the inability of the buyer to resolve liability under RCRA, and to some 

extent [under] CERCLA.’’ 383 While Michigan has a MOA with the 

EPA addressing most liability concerns, ‘‘RCRA liability remains a 

substantial hurdle’’ to redevelopment efforts, Hogarth reported.384

‘‘[O]ne of the major stumbling blocks [for developers] is the uncertainty of future liability, which is another factor that makes it 

more desirable to locate to greenfields,’’ Douglas Scott told the subcommittee.385 Any Federal legislation that would ‘‘make more certain the lines of liability and possible exposure to future or reopened claims would help tremendously to make these sites more 

insurable and more bankable,’’ Scott opined.386

One method of clarifying the lines of liability is to tie any liability relief to the State voluntary cleanup programs. Tying Federal 

liability relief to State VCPs ‘‘will help greatly because you really 

are just plugging in a new piece to something that exists, rather 

than creating a new program,’’ Scott testified.387 While a number 

of States have negotiated this framework tying their VCPs to Federal liability through an MOA with the EPA, Scott told the subcommittee, legislation clarifying liability relief will ‘‘need to be a little bit more broadly based than the MOUs have been to date.’’ 388

Secretary McGinty echoed Douglas Scott and noted the need for 

broader liability relief than is provided through MOAs. Despite the 

full and effective liability relief in some Federal programs under 

Pennsylvania’s MOA with EPA, there is still potential liability 

under other Federal programs. While the MOA is ‘‘[v]ery helpful 

. . . we need to make the next step to full liability relief,’’ McGinty 

testified.389 ‘‘If we could move from what has been an important beginning in our Memorandum of Understanding with EPA to full 

and effective Federal and State liability relief, that would add the 

certainty that investors and developers need,’’ she concluded.390

John Magill also supported tying Federal liability relief to State 

VCPs. ‘‘[It] is a good place to start because it is . . . not 

reinvent[ing] the wheel and creat[ing] new mechanisms,’’ he testified.391 Further, Magill testified, ‘‘It also then allows for a piloting 

operation. If it fails, you can make changes. You don’t create someVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00058 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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392 Id. 393 Id. 394 Id. at 83 (statement of Charles Bartsch, senior policy analyst at the Northeast-Midwest 

Institute). 395 Id. 396 Brownfield Overview hearing at 44 (statement of Subcommittee Chairman Michael R. 

Turner). 397 Id. at 45 (statement of Thomas Dunne, Deputy Assistant Administrator in the Office of 

Solid Waste and Emergency Response, U.S. Environmental Protection Agency). 398 Id. at 42 (statement of Subcommittee Chairman Michael R. Turner). 399 Id. (statement of John Stephenson, Director of the Natural Resources and Environment, 

U.S. Government Accountability Office). 400 Id. at 54 (statement of the Honorable Don Plusquellic, mayor of the city of Akron, OH, 

and president of the U.S. Conference of Mayors).

thing new and tinker with that.’’ 392 Magill warned, however, ‘‘The 

only caveat would be that in some States that the voluntary cleanup program does not cover all cleanups. Brownfields are a wider 

perspective.’’ 393

According to Charles Bartsch, ‘‘What is good about using the 

State voluntary cleanup programs . . . is it really does provide a 

recognized mechanism to provide some assurance to the community 

at large that these things are proceeding properly.’’ 394 To the extent existing programs are not broad enough to cover all 

brownfields projects, Bartsch echoed Magill, arguing, ‘‘Each state 

has a program in place, and . . . [similar to] what we saw after 

the passage of the national brownfields law a couple of years ago, 

the States will be able to then change [their programs] to better 

fit the Federal structure that is laid out.’’ 395

In addition to deterring private investment in redevelopment 

projects, liability concerns are also a disincentive for responsible 

parties to participate in the planning and redevelopment process. 

Parties undertaking remediation are generally new parties with little to no knowledge of the nature or extent of contamination on a 

site. Bringing the original property owners into the remediation 

planning would expedite the process, according to Chairman Turner because ‘‘their knowledge could be very important for . . . [redevelopment] success.’’ 396 However, there are no incentives to bring 

these parties to the table. ‘‘[W]e don’t have anything under the 

statute that is going to relieve them of the liability,’’ testified 

Dunne.397

Brownfields are a ‘‘[F]ederally created problem . . . a potentially 

responsible party or a landowner has disincentives for redevelopment . . . [because] our current laws and regulations actually encourage abandonment,’’ noted Chairman Turner.398 John Stephenson agreed, testifying, ‘‘Those liabilities were created by Federal 

law.’’ 399

Creating an ‘‘incentive for the original responsible polluter to 

participate’’ is ‘‘another key component’’ to any new Federal 

brownfield legislation, testified Mayor Plusquellic.400 Without any 

incentive, property owners will continue mothballing brownfield 

sites, he concluded: 

It makes sense to hold the companies who are responsible 

for contaminating the land to also make them clean up the 

land. However, as a result, we have many ‘‘mothballed’’ 

sites. Something needs to be done to motivate the holder 

54

401 Id. 402Ohio Brownfields hearing at 119–120 (statement of Todd Davis, chief executive officer of 

Hemisphere Development LLC). 403 Id. at 120. 404 Id. 405 Id. 406 Brownfield Overview hearing at 75 (statement of James E. Maurin, chairman of the International Council of Shopping Centers and board member of the Real Estate Roundtable). 

of that land to at least assess the property and begin to 

clean it up.401

Todd Davis testified that many responsible parties want to cleanup their contaminated sites but are afraid of opening themselves 

up to liability. Making an example of a company with a large 

brownfield site in Ohio, Davis told the Subcommittee the responsible party did not contaminate the property with any negligence 

or mal-intent:

[The company] was created in the twenties, thirties, forties, which preceded most of the environmental laws. They 

didn’t perceive at the time that they were doing anything 

that was out of the ordinary in terms of ordinary business. 

But, after the advent of the Super Fund [sic], obviously, 

the cost associated with redeveloping . . . fell onto their 

laps, and appropriately so.

I think that what you find as we negotiate now with people trying to unlock brownfield opportunities is that, especially in big companies, they’re still very, very hesitant, because they’re afraid to . . . open up the information publicly.402

Davis testified that there are a number of corporations whose 

‘‘intentions are pure and they want to do what’s right for the community and they want to see the site remediated.’’ 403 However, 

‘‘[B]ecause there’s a lack of predictability, there’s a significant lack 

of people who understand how to go through this mine field of different funding and the legal and demolition and environmental 

issues all at the same time, that their experiences are mixed.’’ 404

It is ‘‘not about leveling the playing field, it’s about helping the 

playing field. It’s tilting the playing field so that it’s such a good 

deal for companies and communities to do brownfield redevelopment, that it’s not an issue. People want to be doing this,’’ Davis 

concluded.405

6. Certain hazardous substances, such as petroleum products, are 

ineligible for funding under present brownfields programs. Additionally, the cleanup of building interiors is ineligible for 

funding under current law. 

Additional incentives for private investment in remediation can 

be created by expanding the list of eligible activities on which Federal dollars may be used. Stakeholders throughout the series of 

subcommittee oversight hearings urged Congress to expand the definition of eligible brownfield remediation activities. 

For example, current Federal tax provisions for expensing 

brownfield remediation costs use the CERCLA definition of a ‘‘hazardous substance,’’ from which petroleum is excluded, James 

Maurin testified.406 Consequently, parties may not expense the 

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407Pennsylvania Brownfields hearing at 82–83 (statement of Paul Schoff of Feinberg and 

Schoff, LLP, and chief executive officer of Brownfield Realty, Ltd.). 408 Brownfield Overview hearing at 75 (statement of James E. Maurin, chairman of the International Council of Shopping Centers and board member of the Real Estate Roundtable). 409 Id. 410 Id. at 77 (statement of James E. Maurin, chairman of the International Council of Shopping Centers and board member of the Real Estate Roundtable). 411Pennsylvania Brownfields hearing at 82–83 (statement of Paul Schoff of Feinberg and 

Schoff, LLP, and chief executive officer of Brownfield Realty, Ltd.). 412 Id. 413 Brownfield Overview hearing at 75 (statement of James E. Maurin, chairman of the International Council of Shopping Centers and board member of the Real Estate Roundtable). 414 Id. at 77. 

ever, Paul Schoff testified, ‘‘the vast majority of brownfields out 

there have some petroleum contamination, some petroleum constituent.’’ 407 Maurin explained the rationale for the exclusion: 

Congress made the decision that it did not want the 

[F]ederal Superfund used to clean up certain types of substances . . . . While the decision not to authorize the 

spending of [F]ederal funds on these types of cleanups had 

significance for the administration of the Superfund program, the same rationale does not apply to a statute intended to provide a tax incentive to private parties cleaning up brownfield properties.408

‘‘[T]he problem created by this [tax code] approach is that it assumes that the CERCLA definition of the term is broad enough to 

encompass all types of toxic materials that might be found at a 

brownfield site. That is not the case,’’ Maurin testified.409 Maurin 

argued: 

While it may make sense not to authorize the use of 

[F]ederal funds under the Superfund program to clean up 

petroleum and pesticides, these substances often have to 

be cleaned up at brownfield sites before those properties 

can be returned to beneficial use. There is no reason not 

to extend the same type of tax incentive to a private party 

who is cleaning up petroleum waste or pesticide residues 

on a brownfield site as to one who is cleaning up other 

types of contaminants.410

Schoff recommended Congress ‘‘amend the 2002 legislation to include protection under all Federal environmental laws, not just 

under CERCLA.’’ 411 ‘‘If the 2002 legislation were to be amended to 

include protection for under all Federal environmental statues, I 

think that would go a long way toward easing a lot of people’s fears 

and putting their fears to rest once and for all,’’ Schoff concluded.412

‘‘Similarly, Superfund money was not to be spent cleaning up the 

interior of buildings,’’ Maurin testified.413 ‘‘Congress did not . . . 

[impose] this limitation because it believed that contaminated interiors did not require cleanups. Rather, Congress believed that the 

use of the limited funds set aside for Superfund cleanups should 

be prioritized to deal with contamination that had escaped into the 

general environment.’’ 414 Because the current tax law relies upon 

the CERCLA provisions, parties may not expense the removal of 

hazardous materials inside buildings such as asbestos or lead 

paint. Maurin notes, however, that ‘‘brownfield restoration often involves the cleanup of existing buildings on the property. Expensing 

56

415 Id. at 77. 416Ohio Brownfields hearing at 113 (statement of Craig Kasper, chief executive officer of Hull 

& Associates, Inc.). 417 Id. 418See State Incentive Programs hearing at 17 (statement of Kathleen McGinty, secretary of 

the Pennsylvania Department of Environmental Protection); Pennsylvania Brownfields hearing 

at 47 (statement of Eugene DePasquale, deputy secretary for Community Revitalization and 

Local Government Support of the Pennsylvania Department of Environmental Protection); id. 

at 91 (statement of Kerry Wrobel, president of Lehigh Valley Industrial Park, Inc.). 419 Id. at 117 (statement of Kevin Matthews, director of Association & Governmental Relations, AIG Environmental). 

costs to clean up buildings would give developers more reason to 

invest in brownfield properties.’’ 415

Craig Kasper also advised the subcommittee of the need to expand the list of activities eligible for Federal incentives. ‘‘Consideration to all critical activities necessary for redevelopment should be 

considered as eligible cost on[ ]sites that are ultimately cleaned 

up,’’ Kasper urged.416 ‘‘While assessment and remediation costs 

‘‘carry a big price tag of brownfields, other issues . . . exist that 

can be just as critical to a successful development. Demolition, upgrading infrastructure, and environmental are just a few examples,’’ he concluded.417

7. Environmental insurance provides financial assurance to investors in brownfield redevelopment projects and is thus an advisable component of redevelopment projects. The use of Federal 

grant funds is limited and grantees may not currently use Federal dollars on environmental insurance premiums. 

Stakeholders voiced support for the expansion of Federal incentives to redevelopment expenditures other than actual remediation 

costs. In particular, stakeholders repeatedly cited the importance of 

environmental insurance.418 Environmental insurance provides a 

backstop against an unanticipated rise in remediation and redevelopment costs or against unexpected additional costs. These insurance policies are extremely costly, however, and a tax credit for the 

premiums would be a valuable incentive to private developers. 

Explaining the importance of environmental insurance, Kevin 

Matthews of AIG Environmental testified:

Environmental insurance is not the silver bullet for 

Brownfields redevelopment. However, it is one of the ‘‘tools 

in the tool chest’’ that helps to lead to a successful cleanup 

and redevelopment because it often helps to address some 

of the greatest concerns of Brownfields redevelopment—environmental liability and uncertainties concerning the 

cleanup.419

8. Many States have incentive programs for brownfields cleanup. 

These programs may serve as models for reform of Federal programs. 

Every State in the Union administers some variation of a 

brownfield voluntary cleanup program. These programs are the cornerstone of remediation and redevelopment and must be allowed to 

work in tandem with Federal programs and incentives. The key to 

expansive remediation, according to Charles Bartsch, is to ensure 

‘‘State incentives are allowed to work in full partnership with FedVerDate Mar 21 2002 15:25 Sep 06, 2006 Jkt 000000 PO 00000 Frm 00062 Fmt 6659 Sfmt 6602 D:\DOCS\28185.TXT HGOVREF1 PsN: KATIE
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420 Id. at 8 (statement of Charles Bartsch, senior policy analyst at the Northeast-Midwest Institute). 421 Id. at 15. 422Ohio Brownfields hearing at 15 (statement of Joseph Dufficy, Chief of the Brownfields and 

Early Action Section at the U.S. Environmental Protection Agency Region V Office). 423 Id. 424 Id. at 17. 425State Incentive Programs hearing at 41 (statement of Douglas Scott, director of the Illinois 

Environmental Protection Agency). 426 Id. at 16 (statement of Kathleen McGinty, secretary of the Pennsylvania Department of 

Environmental Protection). 427Pennsylvania Brownfields hearing at 46 (statement of Eugene DePasquale, deputy secretary for Community Revitalization and Local Government Support of the Pennsylvania Department of Environmental Protection). 428 Id. 429 Id. 430 Id. at 80 (statement of Subcommittee Chairman Michael R. Turner). 

eral incentives and are not limited or constrained by recapture or 

penalty provisions.’’ 420

‘‘Governments at all levels can find creative ways to help overcome reuse challenges. However, brownfield reuse will only succeed 

if [S]tate efforts can be complemented by [F]ederal initiatives—

such as cleanup credits, historic tax incentives, and targeted program funding—in a true inter-governmental partnership,’’ Bartsch 

concluded.421

According to Joseph Dufficy, ‘‘These partnerships [with States] 

are an integral part of our success.’’ 422 ‘‘EPA . . . partners with 

[S]tates to develop Memoranda of Agreement (MOAs) that clarify 

program roles and responsibilities.’’ 423 Continuing the agency’s 

success, Dufficy testified, ‘‘will require ever more interaction and 

collaboration among all levels of government, the private sector and 

non-governmental organizations.’’ 424

Douglas Scott explained the importance of the cooperation between the States and EPA to redevelopers. Under the MOA between the State of Illinois and EPA, when Illinois issues a ‘‘No Further Remediation’’ letter, the MOA with the EPA states that ‘‘except in very narrow circumstances . . . [Illinois’s] NFR letter will 

also end Federal involvement.’’ 425

In Pennsylvania, Kathleen McGinty testified that under its 

agreement with the EPA there is now one cleanup policy for purposes of both the Commonwealth’s and the Federal Government’s 

purposes. ‘‘[W]hen Pennsylvania says it is clean pursuant to EPA’s 

standards, it is clean for State and Federal liability purposes,’’ 

McGinty testified.426 Eugene DePasquale noted, however, the 

agreement between Pennsylvania and EPA applies only to the 

‘‘joint processing of applications.’’ 427 The MOA ‘‘does not mean that 

[F]ederal liability can be relieved by successful participation in the 

[S]tate brownfields program. To provide the assurances that are 

necessary to developers, these efforts need to progress to genuine 

liability relief as opposed only to joint processing of applications.’’ 428 Even as other States explore similar MOAs, these agreements will only provide developers with ‘‘limited comfort with respect to associated [F]ederal liability,’’ DePasquale concluded.429

Asked whether there is ‘‘a need for additional legislation to enable EPA to [enter similar MOAs] on a routine basis so that the 

2002 Small Business Liability Relief and Revitalization Act would 

recognize that both EPA and the States are encouraged to have a 

broader MOA,’’ 430 stakeholders responded that the value of liability release to site owners and developers was invaluable. Stephen 

58

431 Id. at 131 (statement of Stephen Donches, president of the National Museum of Industrial 

History). 432 Id. at 83 (statement of Robert Colangelo, executive director of the National Brownfield Association). 433 Id. at 114 (statement of Ray Suhoki, president and chief operating officer of the Lehigh 

Valley Economic Development Corp.). 434 Id. 

Donches emphasized, ‘‘[T]he issue . . . of finality and liability release, if you don’t have that, you are not only not going to get developers, you are not going to get anybody to finance the projects, 

either.’’ 431

Robert Colangelo likewise detailed the need for additional liability relief:

According to our research, there is about $4 to $6 trillion 

of industrial property in the United States and corporations own about 40 percent of that . . . . [W]e estimate 

that somewhere between 20 to 50 percent of it is environmentally impaired. And those sites aren’t coming to market because of this reason . . . . [T]he next evolution for 

the brownfield market is dealing with this liability relief 

for liability clarity for the potentially responsible parties 

and . . . the key there is, I think we all agree in polluter 

pays, the question is how much and there is a whole group 

of companies out there that are willing to voluntarily clean 

up their properties to the suggested standards through the 

State voluntary cleanup programs if they can get off the 

hook and right now, we have a double standard. A developer or prospective purchaser can buy a property, enter it 

into the program, clean it up to the standard, get liability 

relief, but the property owner can’t.432

9. Successful redevelopment of brownfields sites requires accommodating private investors’ time schedules that may be derailed by 

regulatory burdens and administrative processes. 

In addition to clarifying liability provisions and providing more 

funds for cleanup through new incentives, stakeholders stressed 

the importance of minimizing the time businesses spend securing 

the proper permits for redevelopment. Ray Suhocki explained that 

the administrative burden involved in a redevelopment project 

often results in greater project cost and lost time because ‘‘[m]ultilayered regulatory programs . . . often times require numerous approvals from multiple agencies and departments within agencies.’’ 433

In particular, Suhocki praised the Pennsylvania Brownfields Action Team [BAT] program, which facilitates the review and 

approval process. The BAT ‘‘created a single-point-of-contact approach . . . . All permits, plans, reports and submittals required to 

demonstrate compliance under [S]tate environmental laws go 

through one point of contact. That contact is responsible for facilitating the review and approval process that ultimately reduces the 

cost and time to complete projects.’’ 434 Suhocki recommended a 

similar approach be adopted by the Federal Government through 

the MOAs between States and the EPA. By appointing in the MOA 

one point of contact for projects requiring both State and Federal 

approval, ‘‘a ‘one-stop-shop’ can be established where both agencies 

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435 Id. 436State Incentive Programs hearing at 102 (statement of Jonathan Philips, senior director of 

Cherokee Investment Partners, LLC). 437See id. 438Ohio Brownfields hearing at 121 (statement of Thomas Stone, executive director of the Mt. 

Pleasant NOW Development Corp.). 439 Id. at 112 (statement of Craig Kasper, chief executive officer of Hull & Associates, Inc.). 440 Id. 441State Incentive Programs hearing at 122 (statement of the Honorable David Cartmell, 

mayor of the city of Maysville, KY, and president of the Kentucky League of Cities). 442 Id. 443 Id. 444Pennsylvania Brownfields hearing at 47 (statement of Eugene DePasquale, deputy secretary for Community Revitalization and Local Government Support of the Pennsylvania Department of Environmental Protection). 

sible for facilitating all review and approvals required to comply 

with both [S]tate and [F]ederal environmental laws.’’ 435

Jonathan Philips touted the use of ‘‘one-stop shopping’’ tactics 

adopted by a number of States. These programs streamline the permit process and make a ‘‘real difference in the rate at which 

brownfield sites are remediated.’’ 436 The speed at which redevelopers can obtain permits can sometimes mean the difference between productive cleanup and reuse of a site and leaving a site to 

sit idle, Philips explained.437

Similarly, Thomas Stone of the Mt. Pleasant NOW Development 

Corp. explained time delay caused by administrative burdens can 

make or break a deal. ‘‘Businesses are looking at when they want 

to put in a new store, where they want to create a facility. They’re 

just looking for the available site. So if we can only present them 

with the opportunity of, well, in 2 years we might have something 

available for you, then we continually miss these opportunities.’’ 438

The number of administrative hurdles also factors into a developer’s decision to proceed under Federal procedures or under a 

State’s voluntary program. ‘‘[W]e struggle sometimes with the acceptance of the State’s Voluntary Action Program versus the Federal Memorandum of Agreement [MOA],’’ Craig Kasper told the 

committee.439 ‘‘For example, a volunteer in Ohio who chooses to remediate a brownfield must go through an arduous administrative 

process to gain Federal Acceptance on a cleanup the State would 

have accepted with fewer administrative hurdles,’’ Kasper explained.440

David Cartmell, mayor of Maysville, KY, stressed that a missing 

link in the Federal brownfields programs is the streamlining of the 

process by which EPA issues a ‘‘clean bill of health.’’ 441 In 

Maysville’s case, this missing link continues interfering with the 

redevelopment of a major brownfield site. The city redeveloped at 

least one major site on its own and has a party interested in purchasing the site for reuse. The deal is not complete, however, because the city has waited for 10 years on a release of liability from 

the EPA, testified Cartmell.442 ‘‘[A]s a city, we have used every 

smart growth tool available to us. We have planning and zoning, 

we have stopped growth beyond our urban services boundary. But 

we need help with streamlining this process.’’ 443

To address this barrier to private investment, Pennsylvania’s Eugene DePasquale argued that ‘‘all [F]ederal departments should 

streamline permitting to favor redevelopment of brownfields.’’ 444

‘‘Providing incentives and ensuring liability are essential,’’ 

DePasquale told the committee, ‘‘[b]ut streamlining the process is 

60

445 Id. 446 Id. at 43. 447 Id. 448State Incentive Programs hearing at 8 (statement of Charles Bartsch, senior policy analyst 

at the Northeast-Midwest Institute). 449See id. at 22 (statement of John Magill, director of the Ohio Department of Development 

Office of Urban Development). 450 Id. 451Ohio Brownfields hearing at 40 (statement of Tracy Nichols, assistant director for Economic Development at the Cuyahoga County, OH, Department of Development). 452State Incentive Programs hearing at 8 (statement of Kathleen McGinty, secretary of the 

Pennsylvania Department of Environmental Protection). 

critical to ensure that these sites remain competitive on the open 

market. The faster we move brownfield sites through the regulatory process, the quicker we reclaim these sites and clean up 

communities.’’ 445

DePasquale suggested the Federal Government ‘‘keep[] in mind 

that we have to level the playing field’’ and that ‘‘a streamlined 

permitting process for priority brownfield districts at the Federal 

level’’ is one way government can ‘‘continue to work at ways to 

equalize that playing field.’’ 446 If investors ‘‘feel that they are going 

to have too long a time of getting their permitting up or the funding will be too difficult to achieve, they simply will not invest in 

those sites, so we all have to work together to come to that common 

ground,’’ he concluded.447

10. Tax exempt redevelopment bonds have provided needed extra 

capital at the State level. 

Numerous States utilize bonds to raise capital for directly financing redevelopment projects. According to Charlie Bartsch, these ‘‘direct brownfield financing efforts . . . directly match resources to 

needs usually in places where the private sector may fear to 

tread.’’ 448 Ohio, for instance, funded its $200 million Clean Ohio 

Fund through bonds.449 From that fund, ‘‘Ohio has granted $97 

million to 94 projects to cleanup and assessment activities’’ since 

2002.450

Local governments have also experienced success raising redevelopment funds through bonds. Cuyahoga County, OH funded its 

brownfields redevelopment assistance by issuing a brownfield redevelopment bond in 1998. Tracy Nichols reported, ‘‘Since 1998, 21 

projects have been funded, 6 projects are cleaned up with a new 

end user open onsite, over 1,400 jobs have been created or retained, 

and $562,000 in new annual property taxes have been generated, 

even with two projects partially tax abated.’’ 451

Pennsylvania DEP Secretary Kathleen McGinty characterized 

legislative efforts offering ‘‘tax-exempt financing, tax-free financing 

of brownfield sites . . . are key.’’ 452 While Pennsylvania utilizes 

these financing tools at the State level, Pennsylvania is ‘‘pushing 

up against . . . [the] State volume cap, and to the extent that taxfree bond financing opportunity could be shared with the private 

sector, that would help . . . substantially,’’ McGinty told the Subcommittee. 

B. RECOMMENDATIONS

1. EPA should continue to revise and upgrade its tracking mechanisms and performance measures for Brownfields grants so that 

the actual impact of this funding can be monitored. 

61

2. EPA should move forward with revising the technical and administrative requirements for establishing a revolving loan fund. 

Applicants with proven administrative expertise or coalitions of organizations that could produce economies of scale should be rewarded. Technical expertise should be provided to organizations 

whose capabilities hinder revolving loan fund utilization. 

3. Congress should re-authorize the EPA Brownfields Program 

beyond fiscal year 2006 and appropriate the full authorized level of 

funding. Congress should consider additional programming and 

funding for brownfield remediation. 

4. A Federal tax credit would be the most useful incentive in attracting financial investment in brownfields redevelopment 

projects. Useful models are the low-income housing tax credit and 

the historic rehabilitation tax credits. 

5. Congress should further clarify circumstances in which a party 

may be subject to future liability. The scope of liability relief available by operation of a MOA between a State VCP and the EPA 

should be broadened to include relief from CERCLA, RCRA, and 

TSCA. Congress should also provide additional incentives in order 

to encourage a responsible party to participate in the remediation 

process. 

6. Congress should expand the eligibility provisions of current 

Federal programs and incentives to include additional hazardous 

substances, the cleanup of building interiors, and other remediation 

and redevelopment project costs. 

7. Congress should expand the eligibility provisions of current 

Federal brownfields programs and incentives to include the purchase of environmental insurance. Any new Federal incentives 

should be designed to include such costs. 

8. Effective State programs should be reviewed as models for reforming existing Federal programs and establishing new ones. 

9. EPA should streamline its administrative process and create 

administrative partnerships with other Federal agencies to reduce 

administrative burden and delay. 

10. Congress should explore expanding the use of existing tax exempt redevelopment bonds to environmental remediation projects. 

(62)

1Public Law 107–118. 

2Office of Management and Budget, Fiscal Year 2007 Budget of the U.S. Government (February 2006). 

MINORITY VIEWS OF HON. HENRY A. WAXMAN, HON. TOM 

LANTOS, HON. CAROLYN B. MALONEY, HON. ELIJAH E. 

CUMMINGS, HON. WM. LACY CLAY, HON. DIANE E. WATSON, AND HON. BRIAN HIGGINS 

We have serious concerns regarding the report issued by the majority entitled, ‘‘Brownfields: What Will it Take to Turn Lost Opportunities Into America’s Gain?’’ We too believe that cleaning up 

brownfields sites in urban areas is an important goal. We also 

strongly agree with the report’s recommendation that the existing 

brownfields program should be fully funded, which we view as the 

most important step that must to be taken to enhance the program’s effectiveness. 

However, the report also makes recommendations that we cannot 

support, such as recommendations that would have the effect of 

shifting responsibility for cleaning up contaminated sites from the 

polluters to the taxpayers, enacting a Federal tax credit for 

brownfields redevelopment that could subsidize polluters, and diluting the program’s effectiveness by expanding the types of activities that are eligible for funding under the brownfields program. 

Additionally, the report makes claims about barriers to brownfields 

redevelopment without an adequate factual record of support. For 

these reasons, we oppose the majority’s issuance of this report. 

Lack of Funding is the Primary Constraint on the Brownfields Program 

While the report supports full funding of the brownfields program, it neglects to acknowledge that failure of the Bush administration and the Republican Congress to fully fund this program has 

severely limited its effectiveness. 

Appropriations for the brownfields program have consistently fallen far short of its $250 million annual authorization under the 

Small Business Liability Relief and Brownfields Revitalization Act 

(Brownfields Act) that was signed into law on January 11, 2002.1

The report recognizes the funding shortfalls and one of its recommendations, which we strongly support, is to fully fund the program. 

However, the report fails to discuss the administration’s role in 

requesting inadequate funding for the program, or how the persistent funding shortfalls have impacted program effectiveness. For 

example, the administration’s fiscal year 2007 budget request for 

the portion of brownfields program that funds assessment grants, 

remediation grants, and technical assistance is only $89 million, as 

opposed to the $200 million authorized. This is 56 percent less than 

authorized under the Brownfields Act.2

63

These grant programs provide significant assistance to participants seeking to clean up sites that are identified and deemed 

qualified. The result of this persistent underfunding is that more 

than two-thirds of the roughly 700 annual grant applications have 

gone unfunded during each of the past two budget cycles. The administration’s failure to request, and Congress’ failure to provide, 

adequate funding to cover the substantial majority of current applications sharply limits the impact of the program. 

The highest priority for improving the effectiveness of the 

brownfields program is to provide the funding necessary to carry 

it out. Unfortunately, the bulk of the report’s findings are focused 

on other perceived shortcomings of the program and other measures to expand its impact. 

Specifically, the report’s findings and recommendations appear to 

be centered on two issues addressed in more detail below: reducing 

liability for clean-up costs, including for responsible parties; and 

providing Federal tax credits for clean up activities. Under each of 

these proposed approaches, the Federal Government could end up 

paying for cleanup instead of the responsible polluters. In addition, 

these alternative approaches would subsidize polluters and developers to conduct activities with no prioritization for spending, far 

less assurance of program outcomes, and no requirements for community involvement in the remediation process. 

Findings and Recommendations on Liability Undermine the Longstanding Principle of ‘‘Polluter Pays’’ 

Both the body of the report and its findings repeatedly claim that 

liability fears are a significant deterrent to investments in cleaning 

up brownfields sites. The findings cite to testimony stating that 

current landowners who are not the polluters, as well as the polluters that created the contamination, are deterred from cleaning 

up their sites due to outstanding liability concerns. In response, the 

report recommends that Congress ‘‘clarify’’ liability for parties and 

‘‘provide additional incentives’’ for responsible parties (i.e., polluters) to participate in the clean ups. We have serious concerns 

both about the factual support for these findings and the recommendations. 

In the Brownfields Act, Congress identified several clear categories of activities and parties that are not liable for clean up 

costs, including innocent prospective purchasers who did not pollute the site. While stating that liability concerns deter innocent 

landowners from participating in cleanups, the report does not 

identify or document any specific circumstances under which nonresponsible parties might be found liable for cleanup costs. Thus, 

while the report repeatedly cites liability concerns as a key barrier 

to cleanups, there is no evidence, apart from general statements in 

testimony, as to whether this is the case, the extent of any such 

problem, and if there is a problem, whether it stems from misinformation or an actual shortfall in the law. 

Responsible parties, i.e. the polluters, are currently legally liable 

for clean up costs, so it is questionable that ‘‘liability’’ fears are preventing them from participating in the remediation of a site. Moreover, it is also unclear how their liability can be ‘‘clarified’’ without 

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3 H.R. 4480 § 2. 

payer. In fact, as the report indicates elsewhere, with respect to responsible parties, several of the witnesses were not calling for clarification about when such parties are liable. Rather, the witnesses 

were calling for liability relief as an inducement for responsible 

parties to participate in cleanups. 

In short, this report can be read as supporting liability relief for 

responsible parties, an idea we strongly oppose. Such a premise 

overturns the long-established principle that, where the polluter 

can be identified, the polluter, not the taxpayers, should pay for 

cleaning up contaminated sites. Congress recently reaffirmed this 

principle on a bipartisan basis with its near-unanimous passage of 

the 2002 Brownfields Act. We strongly oppose any effort to overturn this tenet of environmental law and shift the costs of cleaning 

up pollution from the polluters to the public. 

Furthermore, the report points to State voluntary control programs as a mechanism for providing liability relief. As discussed 

below, state voluntary programs vary in their requirements for 

cleanups. Thus, the report’s recommendation to provide liability relief to responsible parties that clean up a site to State specifications, even if it does not meet Federal standards, may have the effect of allowing higher levels of pollution to remain at the sites. In 

such cases, the recommendation for liability relief is in actuality a 

recommendation to loosen clean up standards as an inducement for 

responsible parties to participate in brownfields remediation. 

Again, the practical effect is to let the polluters off the hook for 

cleaning up some portion of their pollution, while leaving communities to bear the burden of that pollution. We do not support 

changes to the Brownfields Act that would produce that outcome. 

Tax Credits Could Shift Costs from Polluters to Taxpayers 

The report and findings emphasize that more money is needed 

to support clean up activities at the large number of brownfields 

sites. We agree with this assessment, as noted above. In response, 

the majority recommends enactment of a Federal tax credit for 

brownfields redevelopment projects. There may well be some circumstances in which a targeted Federal tax credit for certain 

brownfields redevelopment activities would be beneficial. 

However, the report does not explicitly recommend that such tax 

credits should be limited to innocent parties, and by recommending 

additional ‘‘incentives’’ for polluters, the report suggests the contrary. We are concerned that such Federal tax credits would simply 

be another vehicle for shifting the cleanup costs from the polluters 

to taxpayers. 

In addition, if not carefully targeted, a tax credit could be an extremely expensive and less effective tool for cleaning up 

brownfields. For example, proposed legislation would provide up to 

$1 billion annually in tax credits for brownfields activities.3 Under 

an expansive brownfields tax credit, the public would be paying for 

clean up activities with no ability to prioritize projects and much 

more limited oversight of such projects. 

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4 U.S. EPA, Memoranda of Agreement [MOAs] on State Voluntary Cleanup Programs [VCPs] 

(updated July 5, 2006) (online at: http://www.epa.gov/brownfields/html-doc/statemoa.htm).

Expansion of Activities Eligible for Brownfields Support Would Further Dilute Limited Funding 

The majority also recommends substantially expanding the types 

of activities that are eligible for funding under the brownfields program, such as including coverage of environmental insurance and 

cleanup of building interiors. The program, however, is already experiencing a severe shortage of funds, and has insufficient funding 

to cover the majority of current project applications. Absent a dramatic increase in program funding, expanding the range of eligible 

activities would likely make it even more difficult to fund an adequate number of projects on an annual basis. Moreover, the current 

program targets what Congress has judged to be the highest priority and highest impact activities of the program. Expanding the 

list of eligible activities could dilute the program’s effectiveness. 

While the majority believes these activities would benefit from the 

creation of a tax credit subsidy, the costs associated with a tax 

credit that also covered the expanded set of activities could be prohibitive. 

State Voluntary Cleanup Programs Vary in Quality and Effectiveness 

The majority recommends that ‘‘effective State programs should 

be reviewed as models for Federal programs.’’ We certainly agree 

with the general observation that States have produced many valuable policy innovations and often serve as models for Federal programs. It is entirely unclear, however, which elements of State 

brownfields voluntary cleanup programs the majority is recommending be adopted by the Federal Government. 

More importantly, we are concerned that the report’s findings 

and recommendations fail to discuss how State brownfields voluntary cleanup programs vary in their quality, effectiveness, and 

limitations. For example, only 22 States have MOU agreements 

with EPA that establish agreed-upon elements of State programs 

and the circumstances under which EPA agrees to defer to State 

oversight of cleanup efforts.4 In addition, different States often 

have different standards to determine site compliance with regulations. Thus, adoption of some States’ approaches could allow higher 

levels of pollution to remain at sites, or could provide for little or 

no public participation in the decisionmaking process. 

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Conclusion 

In conclusion, the minority believes the report does not make the 

case for several of its recommendations to substantially alter the 

current brownfields program. In particular, the minority strongly 

opposes recommendations to shift the costs of brownfields cleanups 

from the responsible polluters to affected communities and all Federal taxpayers.

HON. HENRY A. WAXMAN. HON. TOM LANTOS. HON. CAROLYN B. MALONEY. HON. ELIJAH E. CUMMINGS. HON. WM. LACY CLAY. 

HON. DIANE E. WATSON. 

HON. BRIAN HIGGINS.

Æ