The Brownfields Program Authorization: Cleanup of Contaminated Sites
Released: 2002-01-27T00:00:00

Background

The Brownfields Economic Redevelopment Initiative is an effort begun in 1993 by the EPAto address sites that may be contaminated by hazardous substances, (2) but do not pose a seriousenough public health or environmental risk to qualify for cleanup under the Superfund program. (3) The purpose of the programis to provide seed money for activities prior to cleanup, but not to fund the actual cleanup (or"remedial action," as it is called in the Superfund program). The Environmental Protection Agency(EPA) defines brownfields as abandoned, idled, or under-used industrial and commercial facilitieswhere expansion or redevelopment is complicated by real or perceived environmentalcontamination. (4) Theyrange in size from a corner gas station to abandoned factories and mill sites. Estimates of thenumber of sites range from 500,000 to a million; (5) they are often in economically distressed areas. Brownfield sitesface a paradox: they are generally not eligible for remediation funding under the Superfund programbecause they pose a low public health risk while, at the same time, developers may avoid thembecause of cleanup costs, potential future liability, or related reasons, thereby stalling economicdevelopment.

The brownfields program is not specifically mentioned in the Comprehensive EnvironmentalResponse, Compensation, and Liability Act (CERCLA, or the Superfund law) -- it was createdadministratively by EPA. Congress has recognized it through a separate line item appropriationsince FY1997, and there is a desire among many members to formally establish the brownfieldsprogram by law and provide it with legislative guidance and structure. Brownfield issues have beenthe subject of several hearings, and have been discussed in Superfund and appropriationshearings. (6) In the 106thCongress approximately 32 bills with significant brownfields provisions were introduced, some ofthem with broad bipartisan cosponsorship. In 2001, the Senate passed S. 350 ( S.Rept.107-2 ), which would provide the statutory authority for the program, $250 million per year forvarious brownfield initiatives, and relief from Superfund liability for some property owners, amongother things.

Support for the brownfields program as it has been operating comes from a wide array ofstates and localities, environmental groups, business associations, developers, and communityactivists. Proponents argue that the program has the potential to leverage federal, state, local andprivate funds to improve the environment by addressing low-level, low-risk contamination thatotherwise might not be remediated. Once the environmental problems are remedied, the economicpotential of (previous) brownfield sites can be realized, they argue. This might include a wide rangeof economic uses, possibly creating jobs, recreational opportunities, and local tax revenues. Fromthis, there may be positive social benefits for communities negatively affected by environmentalcontamination and economic decline.

There are, of course, a variety of federal programs that target urban renewal, (7) and the brownfields programis designed to supplement, not duplicate them. The program itself, as it presently exists, does notaim to perform the cleanups. It generally provides grants which are to serve as catalysts to bringtogether other resources in the communities to provide the environmental cleanup component ofredevelopment efforts. Overall, the brownfields program is intended to fill a previously unmet needand to offer hope for a cleaner environment, new jobs, a stronger tax base, and economic recovery.

Voluntary Cleanups vs. Brownfields. One waystates are dealing with contaminated sites is through voluntary cleanup programs, which had beenadopted by 44 states as of the end of 1997. These programs encourage the owners or developers towork cooperatively with the state outside of the state's enforcement-driven cleanup program, therebyavoiding some of the costs and delays associated with that approach. Cleanup standards are usuallyidentical to those the states enforce at other hazardous waste sites, according to the EnvironmentalLaw Institute (ELI). (8) Most states provide incentives for participating in the program -- most commonly some form ofliability release. Other incentives include a streamlined process, financial or tax incentives, andtechnical assistance. States created voluntary cleanup programs in the absence of federal legislationor standards, and these programs vary considerably.

States define brownfield sites in different ways, but they usually echo EPA's definition,encompassing "urban industrial or commercial facilities that are abandoned or underutilized due, inpart, to environmental contamination or fear of contamination." (9) ELI noted that a few stateshave different standards or cleanup approaches for brownfields than they do for voluntary cleanupsites. For brownfield sites, Florida provides for site-specific cleanup levels based on risk, allowinginstitutional or engineering controls instead of the state-wide remediation levels otherwise required. North Carolina allows for alternative cleanup strategies focusing on removal of exposure pathwaysat certain brownfield sites. And Mississippi did not set specific standards -- the statute requires thatrisk assessment be used. (10) The difference between brownfields and voluntary programs inthe states is often a matter of semantics. The Environmental Law Institute distinguished them thus:

Typically, ... voluntary programs do not focuson redevelopment nor do they target urban sites specifically. Rather voluntary programs are moreoften aimed at getting simple, less contaminated sites cleaned up regardless of whether they arereused. Brownfield programs, on the other hand, are more likely to focus on redevelopment and bepart of a broader State strategy or set of social policies aimed at improving distressed urbanareas. (11)

Prior to enactment of P.L. 107-118 , the legal underpinnings of the brownfields program weresomewhat nebulous, since the program is not mentioned in CERCLA. The authorized uses ofSuperfund monies are specified in section 111, and cleanup of brownfield sites is not among them. Nevertheless, Congress appeared to tacitly approve the program by providing it a line item in theFY1997 and subsequent Superfund appropriations.

EPA's Brownfields Program: Grant-Award Activities

EPA has redefined and expanded the brownfields program several times. The number ofgrants to assess brownfields (which EPA calls assessment pilot project awards) has been increasedfrom the original 50 announced in 1995 to nearly 400; brownfields cleanup revolving loan fundgrants and job training grants have been initiated; and the Brownfields Showcase Communities havebeen inaugurated. EPA has also used "targeted brownfield assessments" to hire contractors toconduct assessments, and beginning in FY2000 has provided supplemental awards, and awards forgreenspace enhancement.

In addition to these grant programs, EPA has taken several steps to relieve uncertainty overcleanup liability. It has changed the way it keeps track of potentially contaminated sites, and hasissued guidances to clarify the situations where it will use its enforcement discretion and not bringlegal action to force cleanups, such as against prospective purchasers of brownfields. Several ofEPA's actions relate to property transfer, as the sale of real estate is frequently a central element toredevelopment.

Brownfield Assessment Pilot Projects. EPAprovides funding for brownfields through cooperative agreements with state, local and tribalgovernments, as well as with multi-jurisdictional authorities such as regional planning commissionsand economic development agencies. The awards are for up to $200,000 over 2 years to be used tobring together governmental entities, community groups, investors, lenders, developers, and otheraffected parties to address site assessment and cleanup planning issues.

The agency awards grants for the brownfields assessment pilots on a competitive basis. Inselecting projects, EPA focuses on firm redevelopment plans, as well as a commitment from thepublic and private parties to both cleanup and redevelopment after the brownfields assessment iscompleted. From FY1995 (October 1994) through April 2001, $78.9 million was awarded to 398grantees.

Targeted Brownfield Assessments. The TargetedBrownfields Assessment program is managed by each of EPA's 10 regional offices. The selectioncriteria include a strong development potential, a clear municipal-community vision of and supportfor the property's future use, and a crucial need for the assessment for the project to move forward. The funds are used to hire contractors to identify the extent of contamination at a site when thisappears preferable to making an assessment pilot award. Targeted assessments might be used in thecase of a small town that does not intend to establish a brownfields program, for example, but doeshave a site that is ripe for renewal. Through FY2000, EPA has awarded $32.8 million to fund 500targeted assessments.

Supplemental Awards. Beginning in FY2000previous recipients of funding for brownfield assessments can receive a supplemental award of$150,000 for continuation and expansion of their efforts. These, too, are awarded on a competitivebasis, as are the greenspace awards.

Greenspace Awards. An additional $50,000 maybe awarded to an applicant to assess the contamination of a brownfield site that is or will be used for"greenspace" purposes. Greenspace purposes may include, but are not limited to, parks, playgrounds,trails, gardens, habitat restoration, open space, and/or greenspace preservation. The $50,000 isavailable in addition to a brownfield assessment award ($250,000 total), or in addition to asupplemental award ($200,000 total).

Brownfield Cleanup Revolving Loan Fund (BCRLF)grants. Communities, as well as state and tribal governments, that have receivedbrownfield assessment (or targeted assessment) grants are subsequently eligible for grants forBrownfields Cleanup Revolving Loan Fund pilot projects (BCRLF). The grants, for up to $500,000,are to enable the recipient to make low interest loans to public or private entities to facilitate thecleanup and redevelopment of brownfields. Originally limited to $350,000, BCRLF awards can nowbe made for up to $1 million over 5 years. Loans may be made to the owner or operator of a facilityonly if he or she is not liable for the cleanup under CERCLA. It is intended that upon repayment,the loans will replenish the fund to be loaned again for other sites. Some facilities are not eligiblefor loans: sites on or proposed for the National Priorities List, (12) sites requiring a Superfundremoval action within 6 months, and sites where a federal or state enforcement action is planned orunderway (including sites that are the subject of a unilateral administrative order, a court order, anadministrative order on consent, or a judicial consent decree). Through April 2001, 151 BCRLFgrants have been made, totaling $64.8 million.

Job Training Grants. To assure that residents ofbrownfields communities benefit from the industrial and commercial activities associated with sitecleanup, job training grants of up to $200,000 over 2 years may be awarded to colleges, universities,non-profit training centers, and community job training programs as well as to governmental entities. Their purpose is to train residents of the brownfields communities in handling and removinghazardous materials. The grant recipient must establish procedures to recruit participants from theneighborhoods and to employ them in cleaning up hazardous waste facilities. To the extent possiblethe trainees are to include the unemployed, those in welfare-to-work programs, and members ofdisadvantaged groups. Through December 2000, EPA made 46 awards totaling $8.7 million.

State voluntary cleanup program grants. EPAalso provides funds to state and tribal governments to enhance and develop voluntary cleanupprograms. Uses of the funds include writing regulations for voluntary cleanup programs, purchasingequipment, paying the salaries of agency staff to develop program procedures, building their owncapacity to oversee cleanups, and promoting greater community involvement. EPA has awarded$41.6 million in this category to the states through FY2000.

Interagency Efforts and the HUD Program

In July 1996 EPA created a federal Interagency Working Group on Brownfields to shareknowledge on economic redevelopment and environmental principles, and to coordinate agencyefforts and resources. The most visible outgrowth of their efforts is the Showcase Communities,described below, as is the program of the Department of Housing and Urban Development. Morethan 20 federal agencies continue to participate, and links to Web sites describing their activities canbe found at EPA's "Brownfields Partnerships and Outreach" site: http://www.epa.gov/swerosps/bf/partnr.htm

Showcase Communities. The ShowcaseCommunities project is an effort to develop a comprehensive, coordinated federal approach todealing with brownfields in local communities. Sixteen Showcase Communities were designatedin 1998, and another 12 were named in October 2000. These 28 communities of different types(such as urban, rural, coastal) were selected to serve as national models and demonstrate howcollaborative support from a variety of federal agencies could be applied successfully to redeveloptheir brownfields properties. GAO reported that the 10 federal agencies they reviewed had improvedtheir coordination of brownfield activities both within their own agency and between agencies. Theshowcase communities also acknowledged improvement: "They are now better aware of the federalresources available ... to support brownfield redevelopment and how to access them and are gettingmore technical and financial help from agencies.... [A] major reason for this success is that EPAloaned a staff person to each city under the Intergovernmental Personnel Act, for 2 years." (13) According to GAO, fourprofessional associations involved with brownfield issues agreed with this assessment. (14)

HUD program. In addition to EPA's program,the Department of Housing and Urban Development (HUD) has its Brownfields EconomicDevelopment Initiative (BEDI). BEDI provides start-up funds to attract private financing forbrownfield cleanup and redevelopment. The program works through and in conjunction with theCommunity Development Block Grants and the Section 108 Loan Guarantee programs. BEDIprovides funds and loan guarantees to clean up and redevelop brownfields. (15) Congress appropriated $25million for BEDI for FY2002.

Non-grant Activities: Clarification of Liability and Cleanup Issues, and Outreach

EPA has also made an effort to address liability and cleanup issues that lenders, developers,and property owners see as barriers to brownfields development.

CERCLIS: Listing of Sites. In a key move in1995, EPA revamped the Comprehensive Environmental Response, Compensation, and LiabilityInformation System (CERCLIS), the Superfund program's database of sites suspected of beingcontaminated by hazardous substances. As required by law, the worst of the CERCLIS sites (whichnumbered about 38,000 at the time) are placed on the National Priorities List (NPL) to be cleanedup under the Superfund program. However, no procedures existed to remove less seriouslycontaminated facilities -- many of them brownfields -- from the registry, and the stigma of beingassociated with the Superfund program reputedly often prevented sale or development ofCERCLIS-listed properties, even if they had never been contaminated in the first place. Since thenmore than 32,000 CERCLIS sites have been archived. Procedures are now in place to remove fromCERCLIS those sites where no further response action is planned.

Liability. EPA issued guidances that addressedthe liability status of prospective purchasers of contaminated property, and of property owners withgroundwater contamination that originated on neighboring property. The current Senate vehicle, S. 350 , would put these protections against liability into law, and would also clarifyCERCLA's innocent landowner defense. (16) Other guidances addressed the transfer of federally ownedproperty, aspects of the underground storage tank cleanup program, soil testing, and the RCRAcorrective action program. (17) In addition, EPA and the Department of Justice clarifiedenforcement policy regarding lenders and governmental entities that acquire contaminated propertyinvoluntarily. (The 104th Congress enacted the Asset Conservation, Lender Liability, and DepositInsurance Protection Act (18) in December 1996 which essentially incorporated the policy intolaw.)

Outreach. EPA is also working to improvecommunication with minority communities, and to increase their involvement early andmeaningfully in the brownfields effort. The Agency's National Environmental Justice AdvisoryCouncil (NEJAC) held a series of public hearings in five cities, and released a report containing anumber of recommendations to incorporate the communities' own visions of the future and toidentify ways to create healthy and sustainable communities. (19) A June 1999 report foundthat "the quality and scope of community involvement ... minimizes the likelihood that ... complaints[of discrimination under Title VI of the Civil Rights Act] would be raised at brownfield sites andhinder redevelopment of these areas." (20)

Congressional Action

The popularity of the brownfields program led Congress to approve its rapid expansion from$8 million in FY1996 to $87.4 million 2 years later. It also prompted a number of legislativeproposals to provide the program with legislative authority and direction, and to give it fundingoutside the Superfund framework.

Appropriations

To date, all funding for brownfields has come from Superfund appropriations. For the firstyears of the program, FY1993 - FY1996, EPA funded brownfield activities without a line item butfrom money appropriated for the Superfund program. (See Figure 1 .) In FY1997, proposing majorexpansion of the program, the agency requested and received $37.7 million in a line item,specifically for brownfields. That amount was 2.6% of the Superfund appropriation for that year. In addition to continuing the grants for site assessment and other pre-remedial activities, EPA usedFY1997 appropriations to support revolving loan funds (RLFs) to help finance actual cleanups. Through these RLFs EPA funded 24 $350,000 grants to communities.

The FY1998 appropriation ( P.L. 105-65 ) increased EPA's brownfields program by $50million, to $87.4 million (5.8% of the Superfund appropriation). It also provided $25 million forHUD's Brownfield Economic Development Initiative (BEDI), the amount requested by theAdministration. However, questioning EPA's authority to use Superfund monies for revolving loanfunds (RLF) "to clean up sites which are neither emergency in nature nor eligible for NPLlisting," (21) theconference committee denied the request unless RLFs were specifically authorized in subsequentlegislation.

Figure 1. Brownfields Funding: FY1993-FY2002 Request

For FY1999 Congress approved the $91 million requested by the Administration for thebrownfields program, which included funds to capitalize RLFs in 100 communities. HUD's requestto double its brownfields funding to $50 million was rejected; it remained at $25 million. ForFY2000 Congress appropriated $91.7 million, for FY2001, $91.6 million, and for FY2002 $97.7million, matching EPA's request in all 3 years. HUD's appropriation has remained steady at $25million.

On January 11, 2002, the day the Brownfields Revitalization and Environmental RestorationAct of 2001 was signed, EPA announced it would seek $200 million for FY2003, and theadministration would ask for $25 million for HUD's brownfields program.

Legislation

Brownfields Tax Incentive. A tax incentiveallowing the costs of redeveloping brownfields to be deducted in the current year was enacted in the105th Congress as part of the Taxpayer Relief Act of 1997 ( P.L. 105-34 ). Initially good for 3 years,until December 31, 2000, the tax break was extended to the end of 2003 by the 106th Congress, andexpanded to include all brownfields certified by the appropriate state agency. The administrationhas announced that it will seek to make the provision permanent, as part of its FY2003 budgetrequest.

The 1997 act limited eligibility for the tax break to the 76 brownfield pilotsannounced prior to February 1, 1997, areas with a poverty rate of 20% or more,adjacent industrial or commercial areas, and Empowerment Zones and Enterprise Communities (EZ/ECs). The Tax Extenders Act of 1999 ( P.L. 106-170 ) added ayear to the life of the incentive to December 31, 2000, and the ConsolidatedAppropriations Act, 2001 ( P.L. 106-554 ) extended the brownfields tax incentive foran additional 2 years, to December 31, 2003. The latter act also broadened eligibilityfor the tax break to include any site containing a hazardous substance that is certifiedby the appropriate state environmental agency; Superfund sites are excluded.

Congress enacted this incentive to resolve an issue that arose from the taxtreatment of costs of cleaning up contaminated land. In general, costs incurred fornew buildings or for permanent improvements to increase the value of a propertymust be capitalized (that is, the cost must be deducted over a period of years). Someexpenses, such as repairs, are currently deductible (that is, deductible in the year inwhich the cost is incurred -- this is also called expensing ). It is a considerablefinancial advantage to be able to fully deduct a cost in one year rather than many.

However, the benefit of the brownfields tax incentive is reduced to a certaindegree over time by what is called in tax terminology the "recapture" provision. Recapture mandates that the gain realized from the value of the property when it islater sold be taxed as ordinary income (rather than at the generally lower capital gainsrate) to the extent of the expensing allowance previously claimed. In effect, the taxincentive helps to encourage development of brownfield sites by postponing a certainamount of the developer's tax liability in the early days of a project when thedeveloper is spending money to clean up the property. When the developed propertyis later sold, the deferred tax "comes due" by reason of the recapture provision. Asa stimulus to development, the overall value of the brownfields tax break isdependent on a number of factors, including the total cost of the project, the cost ofcleanup, how long the developer intends to hold the property before selling it, and thedeveloper's individual tax situation.

Action in the 107th Congress. (22) Elevenbrownfields bills have been introduced in the 107th Congress, and one of them, S. 350 (subsequently H.R. 2869 ) was enacted as P.L.107-118 . See Table 1 on page 15 for a summary of their major provisions.

S. 350. Senator LincolnChafee, then chairman of the Superfund, Waste Control, and Risk AssessmentSubcommittee of the Committee on Environment and Public Works introduced S. 350 on February 15, 2001. The full committee reported it on March12 ( S.Rept. 107-2 ) with the understanding that negotiations on the "state finality"question would continue. Hearing witnesses have testified over several Congressesthat a barrier to cleanup and development at many brownfield sites is the concern thateven though a site might meet state cleanup standards and be released from liabilityunder state law (thereby achieving "finality"), the U.S. Environmental ProtectionAgency could still intervene (or "overfile") and require a second cleanup to meetmore stringent federal requirements.

S. 350 has such finality language, but it also contains exceptionsthat are meant to provide an "environmental safety net," allowing EPA to step in ifa threat to public health or the environment is not being met by a state. SomeSenators felt that these exceptions to the finality language in the bill were too broad,and that the state should have an opportunity to act before EPA initiates anenforcement action. (23) The post-markup negotiations led to a managers'amendment satisfying their objections which was adopted in the Senate debate onApril 25, 2001.

As passed by the Senate, Title I of S. 350 directs EPA toestablish: (1) a program to provide grants to characterize, assess, and conductplanning at brownfield sites, and to perform targeted site assessments; and (2) aprogram to provide grants to capitalize revolving loan funds, or to be used directlyto remediate one or more sites. Characterization grants are limited to $200,000,which EPA may increase to $350,000 based on the anticipated level ofcontamination, the size, or the status of ownership of the site. The remediation grantsmay be awarded on a community-wide or site-by-site basis, and are limited to $1million. The bill authorizes $200 million for each of 5 years for these programs, anddedicates $50 million per year (or 25% of the amount appropriated if less than $200million) for the assessment and cleanup of relatively low-risk sites contaminated withpetroleum or petroleum products.

The bill's Title II provides protection from Superfund liability for owners ofland contaminated by a source on contiguous property, and for prospectivepurchasers of property that is known to be contaminated. These provisionsessentially codify existing EPA policy. (24) In addition, the bill clarifies the Superfund law's"innocent landowner" defense. CERCLA provides a defense against liability for aperson who unknowingly purchased contaminated land, provided the person made"all appropriate inquiry" prior to the transaction. The bill spells out what comprisesall appropriate inquiry for the purchaser to qualify as an innocent landowner underthe law. (25) These provisions would apply to allcontaminated sites, not just brownfields.

Title III of S. 350 authorizes $50 million per year for 5 years toassist states in establishing or enhancing their voluntary cleanup programs. Statesmay also use these grants to capitalize a revolving loan fund, or to develop a risksharing-pool, an indemnity pool, or insurance mechanism to provide financing forresponse actions. Title III also addresses the finality issue, forbidding enforcementby the federal government at sites being cleaned up under a state program, exceptwhere: (1) the state requests assistance; (2) the contamination has or will migrateacross state lines, or onto federally owned or controlled property; (3) EPAdetermines, after taking into account the response actions already taken, that a releaseor threatened release may present an imminent and substantial endangerment topublic health or welfare, or the environment; or (4) EPA, after consultation with thestate, determines that information not known by the state has been discovered thatrequires further remediation to protect public health or welfare, or the environment. The federal enforcement ban is contingent on the state maintaining a public recordof sites where response action is completed, and sites that are scheduled to be cleanedup in the coming year.

The Environment and Public Works Committee noted in the bill report that,"The committee expects this [Title I] money to be funded through general revenuesand to be in addition to appropriate Superfund funding." (26) Until nowbrownfields funding has been part of the Superfund appropriation, at least half ofwhich has come from the Superfund trust fund. The report did not comment on thesource of funds for the state voluntary cleanup programs in Title III.

H.R. 2869. After the Senateunanimously passed S. 350 on April 25,2001, the House unanimouslypassed H.R. 1831 on May 22. That bill dealt with the Superfundliability of small businesses and other small contributors of hazardous wastes at siteson the National Priorities List. On September 10 Energy and Commerce CommitteeChairman Paul Gillmor and Ranking Member Frank Pallone merged the two bills andintroduced the result as H.R. 2869 .

There were two substantive issues that held up passage. The first was the"state finality" question, that is, the circumstances under which EPA should beallowed to intervene at a site that has been or is being cleaned up under a stateprogram. This was the same issue that had proved a problem in the Senate. HouseEnergy and Commerce Committee Chairman Billy Tauzin said he wanted a bill withstronger language than S. 350 to bolster state authority. (27) The secondissue was whether the Davis-Bacon Act, which requires that workers be paidprevailing union wages in the area, would apply at brownfield cleanups. Davis-Bacon has been applicable at brownfield sites all along because the brownfieldgrants were made under CERCLA authority, and CERCLA requires it in Section104(g). House Speaker Dennis Hastert reportedly used his influence in both casesto persuade reluctant members to go forward, and ultimately pass H.R. 2869 . (28)

Other Bills. Ten other bills have beenintroduced in the 107th Congress and two of them, S. 23 and H.R. 324 , would provide statutory authority for the brownfieldsprogram. S. 23 (introduced by Senator Specter) is an urban economicdevelopment bill, one title of which would approve EPA's existing program. H.R. 324 (Representative Boehlert) is a Superfund reauthorization billidentical to one reported in the 106th Congress ( H.R. 1300 ). They bothaddress the state finality issue, and H.R. 324 also contains the liabilityrelief provisions.

Another set of bills would promote brownfield programs in other agencies. Representative Quinn's H.R. 2064 would give specific statutoryauthority to three agencies, enabling them to provide direct federal funding, loans andloan guarantees for brownfields within the context of their agency missions andexisting programs. The three are the Department of Housing and UrbanDevelopment (HUD), the Small Business Administration, and the EconomicDevelopment Administration (EDA). Senator Levin's S. 1078 andRepresentative Gary Miller's H.R. 2941 address HUD's brownfieldsprogram, and Levin's S. 1079 provides authority to EDA, with S. 1079 employing the same language as H.R. 2064 's EDAprovisions.

These same three bills, along with S. 350 , would expand the listof sites eligible to receive brownfield grants. They would include former illegal druglabs, petroleum-contaminated sites, and mine-scarred lands within the definition ofa brownfield site, making them eligible for federal assistance. For apetroleum-contaminated site to be eligible, it would have to be of relatively low risk,as compared to other petroleum-only sites in the state; have no viable responsibleparty; be assessed, investigated, or cleaned up by a person that is not potentiallyliable; and not be subject to a cleanup order under the leaking Underground StorageTank program. The drug labs and mine-scarred lands have no other qualifyingrequirements.

The Quinn bill and three others would address the expensing of cleanup costs(see pages 10-11 above). The bills are Senator Torricelli's S. 1082 ,Representative Weller's H.R. 2264 , and Representative Coyne's H.R. 1439 . All four bills would make the tax break permanent (it is dueto expire at the end of 2003), a position the administration is backing. S. 1082 and H.R. 2264 would also eliminate the "recapture" provision, andwould include additional substances in the definition of hazardous substances thatmay be cleaned up and be eligible for the tax break: asbestos, oil, pesticides, radon,and lead-based paint. And H.R. 2064 would make the expensingprovision available to those who lease sites for more than 30 years.

H.R. 2064 would add four new tax breaks to stimulatebrownfields redevelopment. The first is a 50% tax credit for cleanup costs incurredat a brownfield site. The credit is limited to $50,000 per site, and must be taken over5 years. A taxpayer would have the option of using this credit or the expensingprovision, but could not take advantage of both.

Secondly, H.R. 2064 authorizes the establishment of"Brownfield IRAs." The site owner could put up to $1 million per year free fromfederal taxation into a special savings account (the IRA) for future use in brownfieldassessment and cleanup. The money would have to be used within 10 years. Thethird tax incentive in the bill is aimed at banks and other lenders to encourage themto make loans for brownfield redevelopment. Interest earned on brownfield loanswould be exempt from federal

taxation, up to $100,000 per year. The fourth tax break would provide a 20% taxcredit for the costs of research and development of environmental remediationtechnology.

Representative Andrews's H.R. 3170 would provide a limited taxcredit for qualified brownfields cleanup bonds issued by state or local governments.

Outlook

As noted previously, the administration has backed the idea of making thebrownfields tax incentive permanent, and will include it in the budget request. Withno vocal opponents, prospects for passage appear good.

Table 1. Brownfields Bills in the 107th Congress

a. S. 23 provides no exceptions to the ban on federal enforcement.

b. The substances are asbestos, oil, pesticides, radon, and lead-based paint.