For the past four years, I have been involved in developing NAHB's Smart Growth strategy and personally working to bring together all stakeholders and interest groups for the common goal of solving our growth concerns. As we have worked together, brownfields redevelopment has emerged as one of the cornerstones of our efforts.

Brownfields are agricultural, commercial or industrial properties that are impacted by contaminants, including hazardous substances as defined under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and petroleum products. Historically, developers have avoided these properties because of concerns relating to the uncertain environmental liabilities at those properties under state and federal environmental laws. Because of these liability concerns, brownfield properties are typically passed over in favor of undeveloped "greenfields" sites where potential contamination and the related liability did does not present obstacles to development.

As you know, brownfields redevelopment, if done correctly, presents a unique opportunity to marry economic development with the principles of Smart Growth and environmental protection. Brownfields redevelopment has the potential to slow the development of open space and farmland by presenting property owners and developers with access to brownfields sites located in desirable locations, with existing infrastructure and affordable pricing. Additionally, brownfields redevelopment is consistent with the notion of reestablishing our communities. Many brownfields sites are located in urban areas or close-in suburbs within walking distance or in close proximity to existing amenities such as transportation systems, restaurants and shops. This proximity both fosters the sense of community and satisfies the increasing needs of our population.

During the past several years, state legislatures, State environmental protection agencies and the United States Environmental Protection Agency (EPA) have all proactively promoted brownfields redevelopment through legislative and regulatory initiatives. Currently at least 43 states have some form of brownfields legislation or voluntary cleanup programs that actively encourage the remediation, reuse or redevelopment of environmentally impaired property. Brownfields and Housing: How Are State VCPs Encouraging Residential Development?, Bartsch and Dorfman, Northeast-Midwest Institute, April, 2000. These State programs encourage brownfields redevelopment through a combination of techniques including: (1) credible financial incentives for investigating, remediating and reusing contaminated properties; (2) flexible, yet certain remediation standards which allow cleanups to reflect the actual risk posed by the contamination at a site; and (3) transferable liability protection to all future property owners and tenants once these remediation standards have been attained.

As one would expect, state brownfields programs provide liability protection under state law only. The question, then, becomes what protections exist under federal environmental statutes for owners and tenants of brownfields sites after cleaning up the property in compliance with state remediation standards? It is with respect to this last question that federal brownfields legislation becomes essential.

Recognizing the need to create incentives to develop brownfields properties, EPA has adopted a series of brownfields policies and guidelines. These programs provide, among other things, funding for brownfields assessment and remediation, job training, tax incentives, and guidance on those circumstances where EPA may exercise its discretion not to impose liability on a developer of a brownfields site under federal environmental statutes.

Current federal law and EPA's policies, in particular, do not provide and guidelines do not goliability protection for developers or owners of contaminated property who remediate property to state standards. Therefore , EPA may impose additional remediation requirements at brownfields sites. Indeed, even where a developer has remediated contamination at a brownfields site to the satisfaction of a State environmental agency under a well established, well funded, stringent State brownfields program, EPA retains its authority to independently require further remediation under federal environmental statutes.

Federal environmental statutes which require remediation of contaminated property [e.g., CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C. § 9609 et seq. ("RCRA") and the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq. ("TSCA")] typically impose strict liability on those parties owning contaminated property, even where those parties did not cause the contamination. As a matter of practice, EPA rarely requires additional remediation of brownfields properties under these federal authorities once a property has been remediated to State cleanup standards. However, nothing prohibits EPA from doing so. Therefore, the perceived threat of EPA intervention, rather than EPA 's actual enforcement activities to date, significantly inhibits developers from attempting a brownfields site remediation. Simply, the perception is the reality. Under current law, a developer has little incentive to acquire a brownfields site and remediate it to the satisfaction of a State environmental agency while EPA enforcement remains a distinct possibility.

To encourage builders and developers to redevelop petroleum-contaminated sites, it is imperative that prospective purchasers, who successfully complete a state clean-up/brownfields program, are protected from RCRA liability and enforcement authority. The Gillmor Discussion Draft has recognized and acknowledged that petroleum contamination is a concern for developers. Under Section 129 of the Gillmor Discussion Draft, in addition to CERCLA enforcement protection, the draft provides additional liability protection under RCRA Section 7002(a)(1)(B) and 7003, 42 U.S.C. § 6972(A)(1(B) and 6973.

Neither S.350 nor the Democratic Discussion Draft provides this protection. Section 129(b)(1)(A) of S.350 and the Democratic Discussion Draft provides that the president may not use the authorities under sections 106(a) or 107(a) of CERCLA against any person conducting or completing a response action regarding a specific release in compliance with a State brownfields program. This section represents the cornerstone of S.350's and the Democratic Discussion Draft's attempt to restrict EPA's enforcement authority where a brownfields property is remediated under a State brownfields program.

However, Section 129(b)(1)(A) restricts EPA's enforcement authority under CERCLA alone. CERCLA expressly applies to remediation of a release or threatened release of hazardous substances. 42 U.S.C. §§ 9604, 9606(a), 9607(a). Hazardous substances, as defined under CERCLA, expressly exempts petroleum pro ducts, including crude oil or any fraction thereof, natural gas and natural gas liquids. 42 U.S.C. § 9601(14). Therefore, S.350 and the Democratic Discussion Draft do not provide any enforcement protections regarding petroleum-contaminated sites.

The absence of any enforcement protections for petroleum contaminated sites represents an extremely significant limitation to S.350 and the Democratic Discussion Draft. The General Accounting Office estimates that there are approximately 450,000 brownfields sites nationwide. Out of these sites, EPA estimates that 100,000 to 200,000 sites contain abandoned underground storage tanks or are impacted by petroleum leaks. EPA USTfields Initiative,

www.epa.gov/swerosps/bf/index.html

As a matter of policy and logic, there is no apparent basis for treating hazardous substance contamination under CERCLA more favorably than petroleum contamination. On the contrary, since there are numerous petroleum contaminated sites and these sites present attractive development opportunities, federal brownfields legislation should provide at least the same liability protections for petroleum contaminated sites as for sites contaminated with CERCLA hazardous substances.

The Gillmor June 13th Discussion Draft provides additional liability protection to "prospective purchasers" under RCRA Section 7002(a)(1)(B) and 7003, 42 U.S.C. § 6972(A)(1(B) and 6973, and RCRA's provisions relating to a release of petroleum from underground storage tanks, 42 U.S.C. § 6991b(h). Whereas S.350 and the Democratic Discussion Draft provide prospective purchasers with liability protection under CERCLA alone, the Gillmor Discussion Draft has the foresight to provide an additional level of protection for the purchasers of petroleum-contaminated sites. Simply, the Gillmor Draft provides a greater incentive for developers to tackle petroleum sites.

As I mentioned previously, any brownfields legislation must provide for the transfer of enforcement protections and liability protections from current owners to future owners, leaseholders, or tenants of these properties. Existing state programs, EPA enforcement policy, and previous federal brownfields legislative proposals all have tied the enforcement and liability protections directly to the property, or the contamination itself, rather than the current owner or remediator. In fact, several EPA CERCLA enforcement policies promulgated over the past decade consistently hold that owners of contaminated properties who did not cause or contribute to a release of a hazardous substance, or who purchased contaminated property after the contamination was released, are not subject to EPA enforcement action under sections 106 or 107 of CERCLA. I am pleased the Gillmor Discussion Draft continues this common-sense practice.

Under the Gillmor Discussion Draft, the EPA is limited from bringing an enforcement action at a brownfields site where a release is being remediated under a state clean up program. Tying the enforcement limitations directly to the release at a brownfields site affords future owners, leaseholders and tenants the much needed peace-of-mind when contemplating the acquisition or rental of a former brownfields site.

To the contrary, the enforcement limitations provided by Section 129(b)(1)(A) of S.350 and the Democratic Discussion Draft apply only to a person who "is conducting or has completed a response action regarding the specific release" under a State brownfields program. Read literally, this language potentially excludes from S.350's and the Democratic Discussion Draft's enforcement protections both current developers of a brownfields site as well as future owners and/or tenants of that site. Two examples illustrate this problem.

First, assume a property owner seeks to sell contaminated property and agrees with the proposed buyer/developer that the property owner will complete the required remediation under State law prior to closing. In this circumstance, the developer will not be a person "conducting" or "completing" the required response action and would fall outside the protections of Section 129(b)(1)(A).

Second, assume that the proposed developer, not the property owner, conducts and completes the response action. Subsequently, the developer sells the property to another developer who leases the property to a tenant. Again, neither the second developer nor the tenant fall within the language of Section 129(b)(1)(A) because they did not "conduct" or "complete" the response action. For these reasons the provisions of S.350 and the Democratic Discussion Draft should be amended to expressly apply to all parties who participate in the response action and all future owners or tenants of that property.

The federal enforcement protections under Section 129 of S.350 and the Democratic Discussion Draft seriously undermine existing EPA policy by identifying only those parties who participated in the clean up as being eligible for enforcement protections.

NAHB fully recognizes the importance of EPA's enforcement role in ensuring protection of public health and the environment. NAHB also recognizes and supports the fundamental presumption of state primacy under all three of the bills presented here today. Existing state brownfields programs must be the primary authority to investigate site contamination, establish clean-up standards sufficient to protect public health and the environment, and determine when those clean-up standards have been achieved. For any federal legislative proposal to be successful, it must strike a balance between two important objectives: maintaining EPA's enforcement role and ensuring finality to prospective purchasers that have successfully completed a state brownfields program.

Fundamentally, federal brownfields legislation must ensure that for those sites where (a) EPA is not currently requiring remediation under federal environmental statutes, and (b) remediation has been completed to the satisfaction of a State environmental agency, EPA will, as a matter of law, not seek further remediation under federal statutes except under defined circumstances. This framework provides the essence of needed federal brownfields legislation: creating the requisite certainty to developers of brownfields property, removing the perception of EPA overfiling, and providing finality in the form of statutory liability liability and federal enforcement protections. At the same time, this framework necessarily must retain appropriate enforcement authority for EPA, a so-called federal "safety net," under clearly defined circumstances.

The Gillmor Discussion Draft provides an appropriate level of certainty by prohibiting enforcement under CERCLA Section 106, 107, or 113, 42 U.S.C. 9606, 9607, or 9613, and RCRA Sections 7002(a)(1)(B) and 7003, 42 U.S.C. 6972(a)(1)(B) or 6973. Importantly, the Gillmor Discussion Draft, in addition to including protections for Superfund contaminants, once again has recognized the critical necessity of providing enforcement protection for petroleum-contaminated sites. In sum, the Gillmor Discussion Draft couples the limitations on federal enforcement with the limited reopeners in Section 129(b)(1)(B) to provide an effective balance between finality and the federal "safety net."

To the contrary, S.350 and the Democratic Discussion Draft lack the certainty and finality necessary to overcome the perception of EPA intervention that currently inhibits brownfields development. Clearly, intent of Section 129(b)(1)(A) of S.350 and the Democratic Discussion Draft is to provide a certain measure of finality for persons remediating hazardous substance contamination in compliance with State brownfields programs. However, by limiting EPA's enforcement authorities under CERCLA, without similar limitations on EPA enforcement authorities under RCRA, S.350 and the Democratic Discussion Draft only partially accomplish this goal.

Simply stated, by limiting Section 129(b)(1)(A) to CERCLA, a person remediating hazardous substance contamination under a State brownfields program will be subject to potential federal intervention under RCRA for the exact same hazardous substances. As an example, assume that a site is contaminated with benzene in soil and groundwater and that a developer remediates that contamination to the satisfaction of a State environmental agency. Section 129(b)(1)(A) provides a developer with certain protections from CERCLA enforcement. The developer does not, however, receive any protections against a third party law suit under RCRA Section 7002(a)(1)(B) or an EPA enforcement action under RCRA Section 7003.

For this reason, providing a limitation on EPA's CERCLA enforcement authority alone does not resolve the concerns regarding EPA intervention that gave rise to Section 129(b)(1)(A) of S.350 and the Democratic Discussion Draft.

As set forth above, federal brownfields legislation must provide not only certainty and finality for site developers and owners, but also an appropriate federal "safety net" authorizing EPA to exercise its enforcement authorities under federal environmental statutes in clearly defined circumstances. These provisions, sometimes referred to as reopeners, are contained in Section 129(b)(1)(B) of S.350 and the Democratic Discussion Draft. The specific reopener provided for in Section 129(b)(1)(B)(iv) of S.350 and the Democratic Discussion Draft is overly broad and as a result threatens to significantly undermine the finality and certainty that S.350 and the Democratic Discussion Draft correctly seek to achieve.

Specifically, Section 129(b)(1)(B)(iv) of S.350 and the Democratic Discussion Draft provides that EPA may bring an enforcement action if:

The Administrator, after consultation with the State, determines that information, that on the earlier of the date on which cleanup was approved or completed, was not known by the State, as recorded in documents prepared or relied on in selecting or conducting the cleanup, has been discovered regarding the contamination or conditions at a facility such that the contamination or conditions at the facility present a threat requiring further remediation to protect public health, welfare or the environment. Consultation with the State shall not limit the ability of the Administrator to make this determination.

There are two fundamental problems with this provision. First, information known to the State "on the earlier of the date on which cleanup was approved or completed" forms the baseline for determining whether "new" information has been discovered subsequently. In many instances, a State environmental agency approves a cleanup plan and the remediator thereafter continues to generate data during the course of designing and implementing the approved cleanup. Pursuant to Section 129(b)(1)(B)(iv), any and all data generated during remedial design and remedial action will be newly discovered and potentially subject the remediator to EPA enforcement.

Second, and more significantly, the mere existence of any new "information" such that the contamination or conditions present any threat is a standard without boundaries. Several examples illustrate this point. First, assume a report issued by an organization, whether or not peer reviewed, alleges that a particular contaminant at a site poses a marginally greater risk than previously thought. In that circumstance, the "information" reopener contained in Section 129(b)(1)(B)(iv) potentially applies notwithstanding the validity of the report or whether the risk remains with the range documented as part of the State approved cleanup. Second, any migration of contaminants within a site, which is a normal occurrence, would potentially be subject to this same reopener. Finally, any fluctuation in sampling results, within the same order of magnitude (even expected seasonal fluctuations) could potentially subject a particular site to a reopener.

In sum, there is no standard contained within Section 129(b)(1)(B)(iv) that constrains the quality, reliability, authority or environmental significance of the new information. As such, this reopener is potentially so broad as to eliminate the very protections S. 350 and the Democratic Discussion Draft seek to create.

As an alternative, Section 129(b)(1)(B)(iv) of the Gillmor Draft reads:

(iv) the Administrator, after consultation with the State, determines that contamination or conditions, that on the later of the date on which cleanup was approved or completed, were present at the site but were not known by the State, as recorded in documents prepared or relied on in selecting or conducting the cleanup, have been discovered that present a threat requiring further remediation to protect public health or welfare or the environment and the State will not take the necessary response action.

By replacing "information" with "contamination and conditions," the Gillmor draft eliminates the potential for the mere existence of any new "information" to subject a particular site to a reopener. "Contamination and conditions" is a concrete standard by which EPA and the developer can quantify the level of threat at a site and whether that threat warrants the exercise of EPA's enforcement power.

The Democratic Discussion Draft contains several additional provisions that render the federal enforcement protections contained in Section 129 virtually meaningless.

First, the Democratic Discussion Draft includes, as an additional reopener under Section 129(b)(1)(B) that allows EPA to reopen a site that has completed a state approved clean up if:

the cleanup of the site under the response action plan of the State program no longer protects human health or the environment, as determined by the Administrator or the State, because of a change or a proposed change in the use of the site.

This reopener is overly broad and unnecessarily undermines the finality of state-approved response actions. For example, the reopener applies to any "change or proposed change in the use of the Site." Pursuant to this sweeping language, even a change (or for that matter a proposed change) from one industrial use to another would authorize EPA to reconsider the state-approved response action. Moreover, this reopener is unnecessary because S. 350 and the Democratic Discussion Draft already contain a reopener where changed conditions exist.

To the extent, however, that a specific reopener for change conditions in land use is deemed necessary, the reopener should be drafted to ensure that it applies only to significant changes in land use, such as a change from non-residential to residential uses. Significant changes in land use are those which fundamentally alter the exposure assumptions upon which the State approved the response action.

The Gilmore Discussion Draft addresses site use changes in precisely this manner. Specifically, in section 202(c)(3), a prospective purchaser loses its defense to liability only while the change in site use is "inconsistent" with the terms of the state-approved response action.

Second, the Democratic Discussion Draft creates a litany of standards that a state program must satisfy in order to become a " qualified" state program for the purposes receiving federal enforcement protection under Section 129 of the legislation. The conditions that this legislation would impose on states are nothing more than a thinly veiled attempt to grant EPA review of existing state programs. Furthermore, these conditions undermine the presumption of state primacy that the Democratic Discussion Draft pretends to support.

Finally, Title IV of the Democratic Discussion Draft creates an Advisory Commission on the Concentration and Impact of Brownfield Sites on Minority and Economically Disadvantaged Neighborhoods. While the impetus for the creation of this commission is honorable, the provision contained in Section 401(c) is a direct assault on state authority and on EPA's authority. This subsection allows for the revocation of the federal enforcement protections granted under 129(b)(1)(A) if the commission finds that minorities and economically disadvantaged neighborhoods are not allowed "meaningful" public participation in the state clean up program. This provision gives appointees, who may not have the requisite expertise and knowledge, unprecedented control and review of state programs and short-circuits the ability of EPA to exercise its authority under 129(b)(1)(B) of the legislation. Furthermore, the level of technical expertise required for appointment to this commission in the fields of; health science, risk assessment, and engineering required for appointment to this commission is undefined. Our concern is the creation of this federal commission would result in this commission passing judgement on state voluntary clean-up programs with no direct knowledge of these programs. makes no mention of an expertise in the administration of state clean up programs.

For four years, I have personally sought to marry the principles of Smart Growth with a wide variety of interest groups, governments, developers, site owners, community groups and environmentalists to reach common ground. A cornerstone of that effort is brownfields redevelopment. However, as attractive as brownfields development appears, any effort that strangles private sector participation will prove to be an exercise in futility. Federal brownfields legislation must ensure that builders and developers receive liability protections as a means to provide incentives for the development of these sites. Furthermore, builders and developers must be assured that EPA will not take an enforcement action unless a clear and limited set of circumstances warrants federal action. Without these incentives and protections, builders and developers will remain skeptical of acquiring and remediating brownfield sites.

It is my firm belief that the Gillmor June 13th Discussion Draft provides builders and developers with the necessary incentives to tackle these sites while ensuring the federal "safety net." While S.350 and the Democratic Discussion Draft provide certain important elements toward that end, these bills will not encourage the development community to redevelop brownfield sites. The exclusion of meaningful liability protection for prospective purchasers under RCRA, the exclusion of federal enforcement protections for petroleum contaminated sites remediated under a state program, the failure to provide protection to future owners and tenants, and the standardless reopeners do not strike an appropriate balance between providing certainty, finality and liability protection to brownfields developers. I encourage the members of this subcommittee to join with Chairman Gillmor and move forward on enacting his meaningful, workable, brownfields proposal.

Again, I am grateful for this opportunity to appear before you on this important issue. I look forward to working with all members of the subcommittee. Thank you.