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Letters to the 107th Congress

March 6, 2001

The Honorable Robert C. Smith
Chairman
Committee on Environment and Public Works
United States Senate
Washington, D.C. 20510

Dear Mr. Chairman:

On behalf of the American Bar Association, we write to express our support for the liability reforms contained in S. 350, the "Brownfield Revitalization and Environmental Restoration Act of 2001," and we urge you and your committee to support these provisions during the markup of the measure scheduled for March 8, 2001. By enacting these reforms, Congress can help to expedite the cleanup and redevelopment of more than 450,000 contaminated brownfield sites throughout the country while at the same time breathing new life into the inner cities in which these sites are concentrated.

As the largest association of attorneys in the United States with over 400,000 members nationwide, the American Bar Association has a strong interest in working with Congress in order to ensure that federal environmental law, including the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA" or "Superfund"), encourages and does not impede the cleanup of brownfields. In an effort to play a meaningful role in this area, the ABA House of Delegates adopted a resolution in 1999 outlining detailed suggestions for encouraging the redevelopment of brownfields, and this resolution and the accompanying background report are enclosed.

In recent years, brownfields increasingly have reduced the quality of urban life in America. These contaminated properties often lie unused or underutilized for long periods of time largely due to the perceived legal liabilities that confront potential new owners and developers of these properties. While these sites remain idle, employment levels suffer, particularly among disadvantaged communities within the inner city. Often this accelerates urban flight, increases sprawl, and creates the need to carve out yet more space for suburban development, with the related infrastructure needs that such development requires. By encouraging the redevelopment of brownfields, we can revitalize our urban core, preserve open space, conserve resources, and make far better use of public dollars.

By now, almost all of the states have adopted their own state brownfields programs, including statues and regulations designed to encourage the voluntary remediation of brownfields. These programs generally set clear cleanup standards that are designed to protect human health and the environment while also taking future site use into consideration. In order to encourage developers to participate in these voluntary cleanup programs, most states also grant liability relief to those who successfully clean up the sites to the states' standards.

These programs have been recognized as being among the most successful state environmental programs of the last decade. Through these programs, sites across the country are being cleaned up and redeveloped, creating new jobs and economic opportunities, limiting the development of so called "greenfields," and restoring state and local tax bases. While these programs have met with considerable success, the continuing threat of Superfund liability discourages many developers from buying and then voluntarily cleaning up contaminated property. As a result, many brownfield sites remain idle for extended periods of time, despite the state cleanup programs.

The ABA supports a number of key provisions contained in S. 350, including those provisions that encourage developers to participate in state brownfields cleanup programs. The ABA believes that in order to promote the continued economic use of contaminated properties and reduce unnecessary litigation, Congress should eliminate all Superfund liability for parties who successfully clean up properties pursuant to a state brownfields program, so long as the state programs (1) impose cleanup standards that are protective of human health and the environment; (2) ensure appropriate public notice and public participation; and (3) provide the financial and personnel resources necessary to carry out their programs.

S. 350 goes a long way towards achieving these aims by preventing the President and the EPA from pursuing enforcement actions against those involved in state brownfields cleanup programs except in certain specific circumstances, such as when a state requests federal assistance, the contamination migrates across state lines or onto federal property, or there is an imminent and substantial endangerment to public health, welfare or the environment so that additional response actions are likely to be necessary. By preventing the EPA from intervening in state cleanups except in these limited situations, S. 350 will encourage developers and other parties to participate in state cleanup programs and bring brownfields back into productive use by granting greater "finality" to these programs.

The ABA also supports those provisions in S. 350 that would grant Superfund liability exemptions to certain types of innocent parties, including bona fide prospective purchasers who do not cause or worsen the contamination at a brownfields site and innocent owners of real estate that is contiguous to the property where the hazardous waste was released. The ABA favors comprehensive reform of Superfund, including the elimination of joint and several liability in favor of a "fair share" allocation system in which liability is allocated based upon each party's relative contribution to the harm. Until Congress enacts comprehensive reform legislation, however, the ABA believes that truly innocent parties, including those covered by S. 350, should be released from potential Superfund liability. These reforms are consistent with the principle that "polluters should pay," but only for the harm that they cause and not for the harm caused by others. Innocent parties who have neither caused nor worsened environmental hazards should not be subject to liability under Superfund, and S. 350 furthers this important principle.

The ABA has been a consistent advocate of legislation that would expedite the cleanup of brownfields and Superfund sites, reduce litigation, and promote fairness to all parties, and the liability reforms contained in S. 350 make significant strides towards achieving these goals. For these reasons, we urge you to support these reforms during the full committee markup scheduled for March 8.

Thank you for considering the views of the ABA on these important matters. If you would like more information regarding the ABA's positions on these issues, please contact our legislative counsel for environmental law matters, Larson Frisby, at 202/662-1098.

Sincerely,

Robert D. Evans
Director, Governmental Affairs Office

Cc: All members of the Committee on Environment and Public Works (w/encl.)

Enclosure


AMERICAN BAR ASSOCIATION

STANDING COMMITTEE ON ENVIRONMENTAL LAW
SECTION OF ENVIRONMENT, ENERGY & RESOURCES
SECTION OF REAL PROPERTY, PROBATE & TRUST LAW
SECTION OF DISPUTE RESOLUTION
SECTION OF STATE AND LOCAL GOVERNMENT LAW
SECTION OF TORT AND INSURANCE PRACTICE
SECTION OF ADMINISTRATIVE LAW AND REGULATORY PRACTICE
YOUNG LAWYERS DIVISION

RECOMMENDATION*

RESOLVED, That the American Bar Association recommends that Congress promote the economic use of properties affected by environmental contamination, and reduce unnecessary litigation, by enacting legislation providing that, upon the affected property's entry into and compliance with a state brownfields program, there should be no additional liability to the federal government or any other person under the Comprehensive Environmental Response, Compensation and Liability Act, as amended; provided that:

  1. the state brownfields program imposes cleanup standards that are protective of human health and the environment;
  2. the state brownfields program ensures appropriate public notice and public participation; and
  3. the state provides the financial and personnel resources necessary to carry out its brownfields program.

FURTHER RESOLVED, That such legislation should authorize state brownfields programs to take advantage of alternative state approaches to land use, institutional controls and zoning regulations that facilitate property reuse.

*Approved by the ABA House of Delegates in August, 1999. Note that the "Recommendation" but not the accompanying "Report" constitutes ABA policy.

REPORT

The United States Environmental Protection Agency defines a "Brownfield" as a site where concerns over actual or perceived environmental contamination complicate the potential for redevelopment or reuse of the property. According to a report from the U.S. General Accounting Office (GAO), there may be as many as 450,000 brownfield sites across the country.

As used in this resolution, the phrase "state brownfields program" refers to the body of statutes and regulations that govern the voluntary remediaton of contaminated property. These programs generally include the following elements: (1) clear cleanup standards that take into consideration future site use and are protective of human health and the environment; and (2) releases of liability in the form of statutory immunity, covenants not to sue, no further action letters, certificates of completion, or similar devices for persons meeting those standards. As of December 1998, forty-six states had implemented brownfields programs. The programs have been recognized as being among the most successful state environmental programs of the last decade. Pursuant to these programs, sites across the country are being cleaned up and redeveloped, creating new jobs and economic opportunities, limiting the development of so-called "greenfields," and restoring state and local tax bases.

In 1994, the American Bar Association adopted a resolution advocating numerous changes to the federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). Even with the growing availability and use of state brownfields programs, the continuing threat of CERCLA liability remains a disincentive to the voluntary remediation of contaminated property. The current resolution seeks to remove that disincentive and encourage the further use and continued strengthening of state brownfields programs, by urging Congress to enact legislation releasing parties from federal CERCLA liability at properties addressed in compliance with state brownfields programs that meet certain minimum criteria necessary to protect public health and the environment.

This policy recommendation enables the American Bar Association to speak out in support of fair and effective brownfields redevelopment efforts. There is a growing appreciation of the practical benefits that state brownfields programs can bring to communities. Contaminated properties often lie unused or underutilized because of the potential liabilities relating to purchase and redevelopment. Contaminated properties do not provide sufficient support for the employment needs of the community, thereby worsening urban flight and the need to carve out yet more open space for suburban development, with the related infrastructure needs that such development requires. Satellite or suburban development also increases vehicular traffic and diminishes air quality. The redevelopment of our urban core -- including redevelopment of brownfields -- preserves open space, conserves resources, and makes far better use of public dollars.

The ABA should play a meaningful role in supporting laws and policies designed to enhance and encourage state brownfields programs. These programs have a salutary effect at all levels of government and, most importantly, in our neighborhoods. The development of property is a process driven by economics. The time it takes to study, assess and address remediation of problems prior to the development are, alone, sufficient to discourage most developers from attempting redevelopment of brownfield properties. The ABA should support all mechanisms that encourage prompt response to property developers, with clear statements regarding what may or may not be required in order to achieve immunity from past acts, reducing risk and uncertainty, and encouraging the redevelopment of brownfields. Providing for the effective use of state brownfields programs is the best way for the ABA to accomplish this goal.

Standards Protective of Human Health and the Environment

One common element shared by state brownfields programs is that they establish clear cleanup standards that are based on risk and sound science. Many offer increased flexibility to site developers by providing a choice of different cleanup standards. In developing their state brownfields programs, state legislators and regulatory officials must assure the public that the standards developed will result in cleanups that are safe and protective of human health and the environment. By stating in the resolution that state brownfields programs must, at a minimum, include cleanup standards that are protective of human health and the environment, the ABA acknowledges that the programs being supported are those that ensure that properties will be cleaned up to appropriate standards and not those that would allow people to avoid addressing contaminated properties.

The states have chosen a variety of mechanisms to ensure that cleanups are safe and protective. Some have set risk-based standards after lengthy public rulemakings with input from public and private sector experts in the scientific fields of toxicology, hydrogeology, biology, chemistry, and engineering. Cleanup standards often are based on future land uses, allowing different cleanup levels for residential, non-residential and other uses. Some states have chosen to require that cleanup standards for brownfield sites be set based on the results of site specific risk assessments. This resolution makes clear that in making recommendation to Congress, the ABA is offering its support only for those state brownfields programs that ensure that the cleanup standards used are safe and protective of human health and the environment.

Public Notice and Public Participation

The most effective state brownfields programs take into consideration the need for meaningful public notice and participation. For some brownfields sites, especially those located in and around residential areas, proceeding without opportunities for the public to participate in the design and implementation of a brownfields project increases the risk that segments of the affected community will oppose the project and make it difficult or impossible to carry out. On the other hand, effective public involvement in decision making about brownfields initiatives often will lead to community support. Moreover, including the full range of concerns into the process of developing a plan for the economically beneficial reuse of contaminated property often leads to a better plan that addresses more of the community's needs than would occur without meaningful public participation.

State brownfields programs take different approaches toward providing opportunities for public involvement. Some require public involvement at all sites. Others have used public rulemaking proceedings to develop state cleanup standards. Still others encourage public participation, but require it only at sites using risk-based cleanup standards. This resolution specifically supports state brownfields programs that provide for their citizens' appropriate public participation.

Financial and Personnel Resources

Most practitioners believe that economic development incentives are necessary to encourage redevelopment of brownfields sites. Incentives are needed to help offset the added costs associated with the projects, including environmental investigation and cleanup costs.

There are many public funding sources for brownfields redevelopment that vary from state to state and site to site. In addition, under a federal 1997 Brownfields Tax Incentive, environmental cleanup costs for properties in certain target areas are fully deductible in the year incurred if certain other conditions are met.

States have adopted a variety of economic development incentives including tax increment financing, tax abatement programs, tax credits, and other state and local financing initiatives. Observers and some communities have presented additional ideas -- generally at the local level -- to improve brownfields project financing. These include revolving loan funds and funding pools, general obligation bonds and revenue bonds. Some communities have joined brownfields redevelopment projects with other public-works or publicly licensed projects to tie the more challenging brownfields project to an anticipated funding source in the form of revenues from the tied project. This resolution requires that the states provide the necessary financial and personnel resources to carry out their state brownfields programs.

Land Use, Institutional Controls and Zoning Regulation

Traditional real estate concepts such as assuring a clear but limited right of access to a piece of property, usually through easements or licenses, or restricting the use of land by a rezoning or use restriction, can play a major practical and legal role in the implementation of efforts to encourage and provide incentives to undertake voluntary use and reuse of brownfields sites. These concepts, in the environmental setting, are usually referred to as "institutional controls," which generally include legal, barrier or institutional restrictions, constraints or mechanisms that limit human activities at, or access to, real property. In the environmental context, this means restrictions must ensure that the actual uses of contaminated properties are maintained or restricted so that they can only be used in a fashion compatible with the assumptions underlying the "approved" level of cleanup.

As part of their state brownfields programs, a number of states have adopted statutes or regulations specifically providing for land use or similar controls to be established in the context of site remediation. These usually will address at least some of the legal impediments, often by specifically overriding otherwise applicable common-law limitations on long-term enforcement of "in gross" land use restrictions. These vary from state to state, to take into account differing approaches taken among the states to the implementation and enforcement of land use and zoning controls. Among the techniques adopted by states in these new legislative efforts are statutory authorization for deed notices and what some states term "environmental protection easements," enforceable land use restrictions, and contingent releases.

The term "institutional controls" has been included in various of the proposals for CERCLA amendment, but at present the text of CERCLA does not define the term; the National Contingency Plan ("NCP"), 40 C.F.R. 300.430(a)(1)(iii)(D) refers to a possible use of "institutional controls such as water use and deed restrictions to supplement engineering controls." Furthermore, two sections of CERCLA refer to examples of such controls. In 42 U.S.C. 9620(h), dealing with the transfer of federal facilities, language now appears specifying that deeds to such properties must contain information about the type and treatment of hazardous substances handled at those sites. Deed notices, notices in sales contracts, and deed covenants are specified.

As is evident from EPA's Guidance Policy document on the consideration and role of land-use issues, EPA now looks to state or local government in EPA's assessment of the type of land use issues to be evaluated in connection with a CERCLA remedial decision, to be able to assure EPA that the type of institutional controls to be implemented as a part of the remedy are "in place, reliable, and will remain in place." 40 C.F.R. 300.51 0(c)(1)(1994). The Federal Register preamble to this land use guidance policy statement acknowledged that institutional control powers are generally ones reserved to the states, further commenting that "EPA may not have the authority to implement institutional controls at a site." 55 Fed. Reg. 8666, 8706 (1990). This resolution encourages EPA to apply this same deference to state and local land use and institutional control decisions affecting brownfields sites.

Conclusion

In 1994, the ABA adopted a resolution advocating amendments to CERCLA. Although the legislation supported by the ABA has not yet been enacted to amend CERCLA, this brownfields resolution that supports state brownfields programs responds to state efforts to address some of the issues set forth in the earlier ABA resolution. By adopting this resolution, the ABA will assist in the reduction of unnecessary litigation and will ensure the economic revitalization of areas blighted by unused or underutilized brownfields.

Respectfully submitted,

Sheila Slocum Hollis, Chair
Standing Committee on Environmental Law

George M. Knapp, Chair
Section of Environment, Energy & Resources

Pam H. Schneider, Chair
Section of Real Property, Probate & Trust Law

Pamela C. Enslen, Chair
Section of Dispute Resolution

Larry C. Ethridge, Chair
Section of State & Local Government Law

August 1999

107th Congress Letters Home

AMERICAN BAR ASSOCIATION
Governmental Affairs Office
740 Fifteenth Street, NW
Washington, DC 20005
ph: 202-662-1760
fx: 202-662-1762

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