In 1993, in response to calls from local communities and professional associations representing them—such as the U.S. Conference of Mayors—to provide more and better coordinated federal support for brownfields, EPA began providing grants to select communities to conduct assessments of the potential contamination at brownfield sites. EPA got involved because lenders’ and developers’ fear that contamination would lead to long and costly cleanups was often one of the first barriers to redeveloping these sites. But communities wanted more help than EPA could provide with its assessment grants. Therefore, in July 1996, EPA created the Interagency Working Group on Brownfields, with staff from more than 20 federal agencies, and the Interagency Steering Committee, with senior management representatives from these same agencies. According to EPA, both groups were created to provide a forum for federal agencies to exchange information and develop a coordinated national strategy for brownfields that focused on both environmental and redevelopment issues. Subsequently, while developing this strategy, EPA asked the members of the Working Group to identify specific actions that the federal agencies would take to support brownfield redevelopment and the funding they would obligate for these activities for fiscal years 1997 and 1998. EPA collected this information from the agencies, which totaled more than 100 action items and plans to invest about $469 million—$304 million predominantly in grants and another $165 million in loan guarantees. On May 13, 1997, the administration publicly announced the planned financial assistance and more than 100 action items as part of its Brownfield National Partnership Action Agenda initiative, along with the goals of improving agencies’ coordination of their brownfield activities and achieving specific economic benefits for communities. One of the major actions under the initiative is the brownfield Showcase Communities project. In fiscal year 1998, the Working Group selected 16 pilot communities from eligible applicants. The agencies intended for these communities to demonstrate to other communities how they can use federal support to successfully clean up and redevelop brownfields. According to EPA’s Director of Outreach and Special Projects, the agencies hope to develop models of how 16 very different types of communities, such as those in rural, urban, and coastal areas, successfully worked with federal agencies to redevelop their unique brownfield properties. The 10 agencies in our review reported that they provided about $413 million —$272 million primarily through grants and $141 million in HUD loan guarantees in financial assistance for brownfield activities in fiscal years 1997 and 1998. EPA, HUD, and EDA within the Department of Commerce were responsible for $409 million, or 99 percent of this assistance. Table 1 below outlines the planned federal investment for brownfields as stated in the Partnership Agenda, and actual obligations and loan guarantees for fiscal years 1997 and 1998 that agencies reported went for brownfield-related activities. In making this dollar comparison, it is important to understand the basis of the planned assistance stated for the three primary agencies in the Partnership Agenda, illustrated in the middle column of the table above. About one-half of the $304 million planned assistance was funding that the agencies could actually commit to obligate on brownfields during the 2-year period. For example, EPA decided to obligate $125 million because it received this amount of new appropriations available for brownfields during this time frame. While HUD’s planned financial assistance through grants as stated in the Partnership Agenda was for $155 million, agency brownfield managers clarified that the agency could only commit to spend $25 million because it received this amount of appropriations for its new Brownfield Economic Development Initiative (BEDI) program. Most of the remaining $130 million was an estimate of the amount of fiscal year 1997 grant funds that communities might choose to use for brownfields under the agency’s Community Development Block Grant program. HUD could not commit to spend a specific amount of grant funds on brownfields because under this program, grant recipients have broad discretion in how they can use the funds. EDA brownfield managers explained that this was also the case for the $17 million presented as the agency’s planned financial assistance in the Partnership. EDA could not commit to spend these funds on brownfields through its economic development grant program because the agency responds to locally identified economic development needs, which may or may not include brownfield redevelopment needs. As a result, EDA cannot estimate the amount of brownfield-related funding assistance that communities will request or the agency will award in any given fiscal year. In comparing these amounts in the Partnership Agenda to the amounts of actual brownfield obligations and loan guarantees the agencies achieved, as illustrated in the right-hand column of the table, we determined that agencies may have obligated more than they reported but not all of these obligations were a result of the Partnership initiative. HUD can document the amount of BEDI funds obligated for brownfields, since this program is dedicated to such activity. However, HUD does not separately track the amount of its Community Development Block Grant funds spent at brownfield sites. Consequently, we could not determine the exact amount of federal funds the Partnership agencies were using on brownfields. More specifically, for the Partnership Agenda, HUD estimated that grant recipients might use up to $100 million during fiscal year 1997 in Community Development Block Grant funds on brownfield-related activities. On the basis of some survey and anecdotal information from grant recipients, HUD brownfield managers estimated that recipients probably spent more than $100 million on brownfields through this program during that year. But the Department cannot demonstrate the extent to which communities used grant funds for brownfields because communities have wide discretion in using the funds and the Department does not track them by this category. EPA and EDA can track their brownfield obligations—EPA because it received its appropriations for brownfields separately and EDA because recipients identify whether they are using grant funds for brownfield-related activities in either their application or their status report on the use of the funds. While EDA can track that it awarded $114 million in grant funds during the 2 fiscal years to communities that used the funds for brownfield-related activities, compared to the $17 million in planned assistance for the agency in the Partnership Agenda, EDA does not attribute its actual brownfield obligations directly to the Partnership initiative. Rather, according to EDA managers, since the beginning of the program in 1965, the agency had been awarding grants for the revitalization and reuse of idle and abandoned industrial facilities, now called brownfields, as a core component of its mission to aid the nation’s most economically distressed communities. For example, historically EDA had funded projects to bring about the reuse of closed military facilities; now the agency is counting these activities as brownfield projects. HUD anticipates an increase in the amount of funds going to brownfields in the future. Some communities were not certain if funds under HUD’s Community Development Block Grant program could be used to address environmental contamination at certain brownfield properties. HUD’s fiscal year 1998 appropriations provided that states and communities may use Community Development Block Grant funds for the cleanup and redevelopment of brownfields, and the agency’s fiscal year 1999 appropriations extended this change to all future fiscal years. According to HUD officials, the agency will update its block grant regulations to add that addressing environmental contamination is an allowable activity under the program. HUD is also considering modifying one of the three primary national objectives under its Community Development Block Grant program—preventing or eliminating slums or blight —to clarify that since environmental contamination and economic disincentives contribute to blight, block grant funds can be used to address these concerns. HUD expects that this change will encourage the use of block grant funds for brownfields. EDA has added brownfield redevelopment as a category for which communities can receive priority consideration for grant funds. Under EDA’s program, once an applicant meets the agency’s basic grant criteria, if the applicant plans to use the funds on brownfields, the agency can give the applicant priority for a grant award. EPA, HUD, and EDA distributed their funds primarily through grants and loan guarantees to communities that used them for activities ranging from assessing a site to conducting some cleanup and on-site construction. In March 1998, we reported on EPA’s use of brownfield funding. We reported that the agency obligated the majority of its fiscal year 1997 and 1998 funds for brownfields through (1) grants to state, local, and tribal governments to assess the nature and extent of contamination at these properties in order to promote their cleanup and redevelopment; (2) seed money to these governments to establish revolving loan funds that help to pay for actual cleanup activities; (3) grants to states to develop voluntary programs that provide incentives for developers to clean up and redevelop brownfields; and (4) grants and funding support for pertinent research, outreach to community groups, job training for performing hazardous waste cleanups, and other related activities. Over those same 2 fiscal years, HUD provided funds primarily through (1) the Brownfield Economic Development Initiative (BEDI) grant program, (2) its Section 108 loan guarantee program, (3) the Community Development Block Grant program, and (4) its programs to abate the risks of lead-based paint. HUD awarded its BEDI grants specifically to communities to use the grants for activities such as site cleanup or purchasing a brownfield property and selling it to a private party at a discount price in exchange for the property’s redevelopment. HUD must make economic development grants, including the BEDI grants, in conjunction with loan guarantees for, among other things, the acquisition and rehabilitation of properties. Communities have used their Section 108 loan guarantees to pursue larger-scale redevelopment activities, including public facilities and physical development projects, such as acquiring a failed shopping center for rehabilitation.