A Smarter Partnership: Removing Barriers to Brownfields Cleanups

Subcommittee on Environment and Hazardous Materials
March 7, 2001
10:00 AM
2123 Rayburn House Office Building 

Mr. George Meyer
President
Environmental Council of States Special Assistant to the Secretary Wisconsin Department of Natural
101 S Webster Street; Box 7921
Madison, Wisconsin, 53707-7921

Introduction:

Good morning, Mr. Chairman and distinguished members of the Subcommittee, my name is George E. Meyer, and I am the President of the Environmental Council of the States (ECOS), and the Special Assistant to the Secretary of the Wisconsin Department of Natural Resources (WDNR). I would like to thank you for the opportunity to be here today, to speak on one of the more exciting and pragmatic environmental initiatives our country has embarked on in a decade: the brownfields initiative. Today, I plan to touch on the brownfields experiences I have had in the State of Wisconsin, as a means of illustrating the efforts that are being replicated in the other states across our country.

As the title of your hearing clearly indicates, the key to revitalizing these brownfields properties is by forming partnerships and removing barriers. Through the use of partnerships - either between government agencies, with the private sector, or both - brownfields has become a model environmental program were all participants work together to return these properties back to the community. The success of this initiative in the states and at the Environmental Protection Agency (EPA) has involved the systematic process of identifying barriers and crafting creative, yet safe, solutions to overcoming these barriers.

Today, I would like to share with you our state's ideas, which I believe are strongly shared by other states, on how this country can build a smarter partnership to deal with brownfields. A key to this smarter partnership is recognizing the successful initiatives of those states that have conquered many of the barriers that were in place 5 or more years ago. In addition, I would like to identify, for you, what barriers remain. While much has been done in the states to improve their own cleanup programs, the states often lack the financial resources to make a large impact on the universe of brownfields they deal with on a daily basis. They need staff, equipment, and funds to support grant programs. In addition, while the states have sought to streamline their own cleanup programs, by making them less administratively burdensome, they still struggle with the requirements of cleanup programs that are under the jurisdiction of the federal government.

Wisconsin's Brownfields Challenge

Wisconsin is not considered a state that is "rich" in brownfields. We estimate that we have approximately 8,000 to 10,000 brownfields properties in the state. We would likely not win any boasting contest with our sister states that surround the Great Lakes. On the other hand, we have quietly made progress on cleaning up the sites in our state over the last 20 years. To date, over 14,000 cleanups have been completed in the state. Over 2,000 of those did not involve petroleum contamination. Of the 8,000 or more brownfields properties which require further work, they : (1) are the more difficult properties to cleanup from an environmental standpoint; (2) have many societal challenges (e.g., tax delinquency, transportation concerns, blighted neighborhoods); or (3) have a combination of these challenges. While many states have made tremendous progress, we may have the more "challenging" properties left to deal with.

Because of the many environmental and societal challenges presented by these brownfields properties, our state knew we had to have different tools to deal with this type of property. Wisconsin entered into the brownfields arena by passing its first legislation in 1994, called the Land Recycling Act. Since then, the state has continued to consider this issue a priority, by forming strong, long-term partnerships with the private sector, environmentalists, local governments and other practitioners in the field. Each consecutive state budget has contained major brownfields initiatives, associated with financing and liability issues.

The state has received national prominence for the efforts it has undertaken to deal creatively and successfully with its brownfields. A General Accounting Office report, dated December 2000, "Information on the Programs of the EPA and Selected States," refers to Wisconsin's as one of the "most innovative brownfields programs in the nation." We believe we have achieved this status by forming smarter partnerships with the public, and safely, but creatively removing barriers to achieving a protective cleanup.

Wisconsin's Brownfields Initiative

I would like to share with you the successful initiatives that we have undertaken in our state, which are replicated in whole or in part by other states across the nation, to make our cleanup process more responsive to the needs of all of the public. I believe that the success of our state and that of the other states' is that no one gave us a federal answer to a local problem. Rather, I think the states have been successful because they have listened to their many publics and have shaped solutions that address local concerns.

Here are the four successful components of our state's brownfields initiative. I hope they illustrate for you the creativity and the success a state can have by forming partnerships and by removing barriers to cleaning up and reusing contaminated properties.

In 1990, the WDNR undertook a large risk. We sat down with the public, including the regulated community, and asked: "how can we improve the way we do cleanups?" Six years later, we had a comprehensive cleanup regulation, which dealt with sites from discovery through final cleanup. The regulation was unique in that it covered investigation and cleanup for all types of sites, including underground storage tanks, landfills, wastewater treatment facilities, and spill sites. Finally, there was one regulation for the public to understand and comply with.

This comprehensive regulation includes promulgated soil cleanup standards, for both groundwater migration and direct contact concerns. It also provides the property owner the flexibility to choose the type of cleanup standard, based on the current land use of the site. This regulation is used in combination with our existing groundwater regulation, which has promulgated groundwater quality standards. Even though we have some of the most stringent groundwater quality standards in the country, we have completed cleanups at over 14,000 sites. We have achieved this level of success by using natural attenuation of groundwater, where appropriate, and by requiring actual monitoring - not just modeling - of the environment to ensure the remedy will work.

How does having a comprehensive regulation that applies to all types of discharges help get more brownfields cleaned up? It's simple. The public, regulated community and consultants have one set of requirements to understand and follow. They do not have to spend valuable time trying to figure which "regulatory" program has jurisdiction over the release and which set of regulations to follow. Time is money, and simplifying the process saves the public's time and money.

The WDNR also provides the public with the opportunity to seek assistance throughout the cleanup, both in terms of technical, liability and financial assistance. Generally, the WDNR discovers a "site" because state law requires the person who caused the discharge or owns the property to immediately report the discharge (including existing environmental contamination) to the state. Once that is done, the person who is responsible for the cleanup is required to take all necessary actions to address the environmental contamination. WDNR can provide these individuals with assistance, when requested, in reviewing technical documents and clarifying liability. The WDNR tracks the progress of these properties through a comprehensive database, called the Bureau for Remediation and Redevelopment Tracking System (BRRTS).

What I hope is evident from this testimony is that there is no separate brownfields program, per se, in the State of Wisconsin. The financial and technical incentives that the state has created apply generally to all properties, regardless of whether it is a UST property, a spill site or a RCRA hazardous waste site. There are no separate cleanup standards for a brownfields property, versus a non-brownfields property. Putting up regulatory and programmatic fences is what helped to create the brownfields situation to start with. We felt it was time to bring those fences down.

The states with the most successful programs understand that money is a key component of any brownfields initiative. Without it, you will only get the brownfields properties cleaned up that the private sector would have gotten to anyway. In Wisconsin, we had $26 million in brownfields grants and $20 million in loans available in state fiscal year 1999 -2001. In addition, the state had over $30 million in tax credits available.

You don't need large amounts of money to be successful in providing incentives. Over the last year, the WDNR created a new grant program to assist local governments with financing the non-cleanup costs at brownfields properties. (Please refer to the WDNR's Site Assessment Grant at

www.dnr.state.wi.us/org/caer/cfa/EL/Section/SAG.html

In about a year's time, the WDNR:

Promulgated a regulation and issued guidance on the grant program.

Issued two rounds of grants, worth a total of $1.45 million to local governments.

Awarded grants to 35 communities and signed 50 contracts with those communities.

Received 110 requests from local governments for $3.8 million.

Obtained commitments from local governments to spend $1 million in additional funds or in-kind services at these properties over the one-year grant term.

Will fund 22 initial assessments, 22 site investigations, removal of 60 underground tanks, and demolition of 40 structures.

Will make environmental progress on 109 acres of contaminated property.

What is the key to the success of this program? We were successful for two reasons: partnerships and simplicity. The public requested the program, and then helped us create it. We gave money to brownfields projects that were ready to start, rather than giving money to a community that had yet to select the projects. We kept the application and technical process simple. The agency giving the money was also the same agency assisting the community with the technical aspects of the environmental work.

Clarifying and providing finality to a person's environmental liability is a strong incentive to getting brownfields properties cleaned up and reused. This is especially true where a state or a federal cleanup program can hold a property owner responsible for the cleanup, even if they did not cause the environmental contamination. In Wisconsin, we have authority to ask the current property owner to conduct the necessary environmental activities at a property. Thus, having liability exemptions and letters, which clarify liability, are particularly important to getting sites cleaned up. In Wisconsin, we have a similar array of liability exemptions and "comfort" letters when compared to other states. A sampling of those exemptions and letters, include:

Local government exemption from the state's cleanup law: If a local government acquires a property through tax delinquency, condemnation, slum clearance or through blight elimination, the local government is not required to investigate or cleanup the property.

Lender and trustee exemption from the state's cleanup law: If a lender forecloses on a property, they are only required to conduct a phase I and II assessment of the property. A lender cannot be held liable under state law for a cleanup if their only involvement with the property was by virtue of lending money.

Off-site exemption from the state's cleanup law: If a property is impacted by contamination migrating from a neighbor's property, the affected property is exempt from having to conduct an investigation and cleanup.

The state has two different types of liability clarifications that a person can receive, once they have a cleanup reviewed and approved by the state. A person can choose between receiving a "closure letter" or a "certificate of completion" at the end of the process. Where a person is cleaning up the known problems at a property, they are eligible for the closure letter path. They must investigate the known problem and cleanup according to state law. At the conclusion, WDNR staff reviews their case and they receive a closure letter. The WDNR may reopen the "closed" case if new information arises that indicates that the conditions at the property pose a threat to public health or the environment.

If a person is seeking a certificate of completion, they are required to conduct an investigation of the entire property, not just the known problem. Once the investigation has identified the areas to be cleaned up, the same technical standards apply to persons seeking a certificate as those seeking a simple close out letter. Once the cleanup is complete, the WDNR will issue the certificate, which limits the liability of the person receiving the certificate and future owners of the property. The WDNR cannot reopen the certificate, even if further "old" contamination is found, environmental standards change, or the remedy fails. In seven years, the WDNR has not encountered a situation where it felt it needed to reopen a certificate. Having this type of finality has resulted in some of the more "challenging" brownfields being cleaned up by voluntary parties.

I am aware that there are persons who have concerns about state cleanup programs and the limitations on "reopening" decisions made by the state. I would like to offer you an example of what we believe is a creative solution to balancing the need to give finality on cleanups, with the need to protect the interests of the public if the property needs to be revisited. Until recently, the State of Wisconsin would not allow persons to get a certificate of completion if they were relying on natural attenuation to cleanup the groundwater, and the groundwater still exceeded state groundwater quality standards, even if the plume was stable or receding. You could get a closure letter in this situation, because if natural attenuation failed, the state could reopen it.

Starting next week, the state will be allowing persons to get a certificate of completion while using natural attenuation - as previously described - if they pay an "insurance fee" to the state at the time that the certificate is issued. This issurance fee will be used by the state to pay for an environmental insurance policy that the state is purchasing to cover any anticipated loss it may have at these sites due to natural attenuation failing. The master policy covers the state's anticipated costs of having to reopen these cases, less an agreed upon deductible. Because of this unique private - public solution, persons are able to get "finality" on their cleanups sooner, and the state is insured if the remedy does not perform as anticipated. The fees to participate in this option are much more reasonable than if the person was required to individually insure the state's potential risk. It is the type of creative solution that we hope others explore, especially those that are concerned about limitations on the ability to reopen a state's decision.

I would also like to mention that the State of Wisconsin has received a great deal of benefit from having the 3rd Superfund - Brownfields Memorandum of Agreement (MOA) in the nation. Having this written agreement, endorsing EPA's belief in how we do cleanups, has cleared up a number of uncertainties with regards to the EPA's role in Wisconsin cleanups. We would like the EPA to consider doing more brownfields MOAs that would encompass other federal cleanup programs.

Smarter partnerships start and thrive with good public outreach and education. The foundation of our effort has been to reach out to the public, to ask for their input and to provide them with information in a form that easy for them to understand. I would like to highlight three models for outreach that WDNR and other states are using:

Since 1998, the WDNR has been meeting regularly with a group of 30 brownfields practitioners to continue to evaluate and improve this state's initiative. This group includes mayors, county treasurers, EPA, industry representatives, attorneys, state agencies, environmentalists, planners, consultants and other interested persons. The group has had a major impact on improving this state's initiative by identifying "real" barriers to cleanup and reuse, and offering "real" solutions to the problem. The key to the group is that the practitioners, not the state, chaired the "issue groups." The WDNR offered administrative support for compiling and issuing the two Study Group reports to the Legislature and Governor, in 1998 and 2000. You can access the state's Brownfields Study Group Web page at the following address: www.dnr.state.wi.us/org/aw/rr/rbrownfields/bsg/index.htm

In the last year, the WDNR made publicly available on the world wide web the program's comprehensive inventory of sites. (This had been available in the past in paper version.) The public has access to information on 21,000 open and closed (i.e., cleaned up) sites in the state where a hazardous substance was discharged, and an investigation is or was required. The location of the web site is

www.dnr.state.wi.us/org/aw/rr/brrts/index.htm

By the summer of 2001, the WDNR hopes to have detailed information on closed (i.e., cleaned up) sites available on the web. We are in the process of scanning actual WDNR approval letters, which include property use limitations, and we are geographically locating these sites, so you could view the properties through a geographical information system. The public will be able, in the future, to determine if a site has been cleaned up, and then review the actual WDNR approval letters on the web.

The WDNR's comprehensive cleanup regulation includes opportunities for public involvement and participation in the cleanup process. At present, we are updating those rules to further enhance the notice that must be provided to property owners whose property are impacted by off-site contamination. At the time that contamination is discovered off the property and at the time that the cleanup is complete, the property owner where the source of contamination is will be required to send a letter to neighboring property owners notifying them of the situation. Those impacted owners will be notified of their opportunities to receive information about the cleanup.

I think it is important to note that having these types of partnerships, web sites, and databases all take time and money. States need resources to implement and update these kind of initiatives. Money for staff, equipment - such as geo-locational devices, software, and scanners - is crucial if we are to fully implement these types of initiatives.

I believe that we can form a smarter partnership to improve this country's efforts to cleanup and reuse brownfields properties. As we have done in Wisconsin and in other states, we need to actively seek out the "real" people who are making the brownfields initiative a success. We need to continuously seek out their recommendations to remove the barriers to get these properties cleaned up in a protective manner. We need to adopt the attitude that the programs we operate can always be improved.

I would like to leave you with several recommendations that you may want to consider in formulating federal legislation on brownfields. I would encourage you to " think outside the box," and not simply adopt an existing federal pilot program. We should take what worked and did not work from those past pilot experiences, but also seek out other successful experiences, such as at the state level, to build a new federal model for brownfields.

Listed below are the recommendations that I would like to provide you with today, intended to form smarter partnerships and identify the remaining barriers to an effective brownfields initiative.

Any national brownfields reforms or initiatives must cut across federal regulatory and program boundaries. For those of us in the states that deal with a morass of brownfields properties on a daily basis, we would like you to consider more comprehensive reforms. We should ask ourselves: Why do the federal Underground Storage Tank (UST) and Superfund programs have liability relief for lenders, and the Resource Conservation and Recovery Act (RCRA) Hazardous Waste program does not? Why does Superfund - as well as many states - provide a liability exemption for local governments, but the federal UST and RCRA hazardous waste programs do not? A smarter partnership is one that involves comprehensive reforms across all federal cleanup programs.

In shaping a national brownfields initiative, it should be recognized that the environmental cleanups needed at most brownfield properties generally are the jurisdiction of the state. Let me illustrate this point by using Wisconsin as an example. Prese ntly, Wisconsin has 39 Superfund sites, with 2 additional sites "proposed" for inclusion on the National Priorities List (NPL). In addition, we have approximately 125 RCRA hazardous waste corrective action sites, which the state has authorization to take the lead on all but 10 of these cleanups. Thus, the sites with specific "federal" interest add up to 51 sites, or less than 1% of the estimated brownfields sites in Wisconsin. I believe it important to point out that the remaining 99% of the remaining sites are being cleaned up using the state's law and regulations. Clearly, this state - as well as other states - have jurisdiction over most brownfields cleanups. The states' role should be considered as a major, not minor, component of any future federal legislation.

Provide the states the opportunity to administrator the grants and loans, given their experience and relationships with their own local governments.

Provide money to brownfields properties, regardless of the regulatory jurisdiction. Many federal Superfund removal sites and RCRA hazardous waste sites are tax delinquent, bankrupt properties. These properties are often the largest challenges to communities, yet past efforts at federal legislation have excluded these sites. Allowing them to receive grants as an "exception" may send the wrong message to communities. We would recommend all properties be included, unless the person that caused the contamination is able to pay for the environmental work.

We need to make the grants available for demolition costs, and removal of underground storage tanks.

Require that the grant recipient follow state - not federal - cleanup requirements, since these properties generally are not federal Superfund sites. Requiring these grantees to follow the federal cleanup process, or some form of it, is a duplication of effort, since the grantee will need to comply with state environmental laws as well.

Simplify the administrative requirements, as the states have done.

Provide grants to specific projects that are planned and ready to implement.

Keep the process simple, so communities of all sizes can equally participate and succeed.

Federal legislation should provide more assurances to states and persons cleaning up that the federal government has limited ability, in all of its environmental programs, to reopen a state cleanup or "step in" during a cleanup, without the state's approval.

Exemptions for lenders and local governments should be included in legislation for those EPA programs that currently do not have those specific exemptions. For example, local governments should be afforded the same protections under RCRA Subtitle C, as they are under Superfund, if they acquire a property through involuntary means. Many of the worst brownfields properties in this state are the tax delinquent, bankrupt hazardous waste sites. At present, a local government can be required to cleanup one of these properties if they acquire it through condemnation or tax delinquency.

Past drafts of legislation have given too much discretion to the EPA as to when it can step in. In the draft S. 350, EPA may take action if " a release may present an imminent and substantial endangerment." Language such as this would likely allow EPA to step in at anytime, and would give little clarity to states and persons voluntarily cleaning up a property.

Many states believe that the EPA should not be able to propose a site for inclusion on the NPL without the governor's concurrence. Once again, the language gives too much discretion to EPA.

There are creative ways to fashion a system that we can all live with. Wisconsin has addressed its concerns about reopening sites with very tight liability exemptions, by working with the insurance industry to develop a cost-effective solution.

The states believe that public participation is a very important part of any process.

The key is not to dictate one method of public participation, but allow the states to fashion their own systems to meet the needs of their communities.

Federal legislation should provide adequate funding to states that need to enhance their current processes. This funding needs to be over a 5-year period of time, at a minimum, if Congress wants the states to develop data bases and inventories of brownfields properties.

Consider adopting a "brownfields study group" process at the federal level, to continue to identify barriers and improve the brownfields initiative, even if new legislation is enacted.

In closing, I would like to thank you Mr. Chairman and members of the subcommittee for allowing me to present to you today recommendations for creating smarter partnerships and removing barriers to brownfields cleanups. I understand that we may not all agree on a solution to this large challenge, but I believe that through open and continued dialogue we can build a better program. I look forward to working with you, ECOS, EPA and other interested persons to develop a better program to address the estimated 600,000 brownfields properties nationwide.

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