You asked for information on brownfield programs in New York and Pennsylvania.

SUMMARY

Both New York and Pennsylvania have programs encouraging the redevelopment of underutilized or abandon industrial sites (called brownfields). These states, like many others including Connecticut, have developed a set of benefits or specialized laws that apply to brownfield properties; these laws are commonly called a "brownfields toolbox."

The toolbox metaphor is useful for discussing and comparing brownfield laws from several states. The brownfield toolbox generally contains several broad categories of tools, and states have their own versions of each. The basic toolbox includes the following: (1) brownfield identification programs, (2) voluntary remediation programs, (3) liability protection, (4) prospective purchaser agreements, (5) remediation standards, (5) environmental professionals, (6) lender liability protection, (7) public participation, (8) funding, and (9) tax incentives. While the metaphor is useful, it is also important to keep in mind that brownfield laws are very complicated and often include state and federal laws that are not generally included in the "toolbox."

NEW YORK'S AND PENNSYLVANIA'S BROWNFIELD TOOLBOXES

New York has two brownfield programs, the Voluntary Cleanup Program (VCP), and the Bond Act Program. Table 1 lists the basic elements of the New York and Pennsylvania programs and some brief comments on each element.

Table 1: New York's and Pennsylvania's Brownfield Toolboxes

NEW YORK BROWNFIELD PROGRAMS

New York has two brownfield programs, the Voluntary Cleanup Program and the Bond Act Program, in addition to its liability-based state superfund program.

Voluntary Cleanup Program (VCP)

The VCP, established in 1994, is an administrative program within the state's Department of Environmental Conservation (NYDEC). It is not established by statute or regulation.

According to Cynthia Wabnick of the NYDEC, Governor Pataki has convened a special commission to evaluate the program and make legislative recommendations. The commission has not issued a report yet.

Eligible Participants. The program is open to owners, operators, prospective purchasers, and, in some instances, potentially responsible parties (PRPs). PRPs are excluded from the program for (1) sites listed as consequential on the state's registry of inactive sites (class 1 or 2 sites), (2) most transfer, storage, and disposal facilities (TSDFs); and sites subject to other enforcement actions requiring PRPs to clean them up.

Applications and Commitment Document. Interested parties must submit a standard program application form to the NYDEC (see Attachment 1). The application requires the following information: (1) the site location, (2) the current owner and operator, (3) the site volunteer or applicant (may be the same as the owner and operator), (4) the site's environmental history over the past 50 years, and (5) the proposed or intended future use of the site.

Regional NYDEC officials review the application to determine the applicants eligibility. The NYDEC must notify the applicant of its decision within 45 days of the application. If the application is approved, the parities enter into a commitment document that describes the applicant's responsibility to investigate and remediate the site. In some instances, the parties may agree on successive commitment documents, one to investigate and a second to remediate once the conditions are known.

The applicant must pay the NYDEC for its oversight of the investigation and remediation project.

Remediation Standards. The VCP does not have written numeric standards. The level of remediation is determined on a case-by-case basis. The sites must be deemed safe for the intended use from a human health and environmental protection perspective. The applicant must record any future use restriction on the land records.

If the applicant does not request or agree to a future use restriction, the cleanup must satisfy the numeric standards established for the superfund program.

Liability Protection. Once the site is remediated, the NYDEC issues a "No Further Action" (NFA) letter stating that the applicant has remediated the property to the agreed level and that no further action is needed. The letter protects the applicant or its successors against liability for future action by the NYDEC (but not necessarily other state agencies, third parties, or the federal Environmental Protection Agency). The NFA letter protection does not appear to cover lenders and fiduciaries.

The NFA letter protection is subject to several reopeners that revoke its protection. The NFA letter protection does not apply if (1) the agreed-upon remediation level is not sufficient to protect human health and the environment, (2) the applicant or its successor changes the site's use to one that requires greater protection, (3) the applicant committed fraud against the VCP, or (4) the site contains conditions that were unknown when the NYDEC agreed to the remediation.

Funding. The NYDEC does not provide any grants or loans for the program applicants. According to Cynthia Wabnick, the state's economic development agency is not involved in the program and does not provide any funds either.

THE BOND ACT PROGRAM

The Clean Water/Clean Air Bond Act of 1996 authorized $200 million in general obligation bonds for municipal environmental restoration project grants to investigate and remediate brownfields. Nonresponsible municipalities are eligible for grants of up to 75% of investigation and remediation costs for sites that they own or co-own with not-for-profit organizations.

Eligible Municipalities. Municipalities and municipal entities that did not generate, transport, or dispose of the hazardous substances located on a site they own or plan to own may apply for grants to investigate and remediate it. The municipality may jointly own the site with a not-for profit entity. Sites listed on the state's inactive hazardous waste disposal site list are not eligible.

Application and State Assistance Contract. Interested municipalities must submit a completed application and a certified municipal authorization for the project to the NYDEC (see Attachments 2 and 3). They must also submit a project description which includes (1) the purpose and scope of the project, (2) a summary of the property's environmental history, (3) the proposed future use, (4) a cost estimate, (5) a list of other or potential funding sources, (6) a description of how the project meets the program goals, and (7) a site map and tax map.

The NYDEC reviews and ranks completed applications based on the following factors:

1. environmental benefits such as the project's proximity to water supplies and whether those supplies are contaminated,

2. economic benefits such as whether the property is in a development zone and whether the municipality has an agreement guaranteeing the site's future use,

3. potential opportunity for public and recreational use, and

4. opportunity to attract other funding sources (1996 Clean Water/Clean Air Act Procedures Handbook, Dec. 1997).

Once an application is approved the state and the municipality enter into an assistance contract. The state agrees to provide up to 75% of the project costs less any federal contribution or money collected from a responsible party, and to make periodic payment as the project proceeds. The municipalities agree to begin the project as soon as possible, prepare and implement a public participation plan, and complete the project in accordance with the NYDEC's remediation requirements. The municipality also agrees to conduct any on-going monitoring after the project is complete and to ensure that any required deed restrictions are recorded. The municipality must submit a site investigation and remedial alternatives report and several other reports as the project progresses.

If the municipality sells the property to a PRP after the remediation is complete that party must reimburse the state for the grant amount plus interest and transaction costs.

Remediation Standards. Municipal remediation projects under the Bond Act must meet the same written numeric standards established for the state's Superfund program (NY ECL Law _ 56-0505.3 to 0505.5 (McKinney 1997) and TAMG 4046)). The standards are flexible depending on the proposed use of the property. The municipalities must record any future use restrictions on the land records.

Liability Protection. Once the state approves the project application the municipality is protected during the remediation work (so long as the work complies with the state assistance contract) and after the project is complete (NY ECL Law _ 56-0509). The liability protection is transferable to non-PRP successors in interest, and covers lessees, and lenders. The parties are protected from all state claims based on past contamination and all statutory third party claims based on past contamination on the site (NY ECL Law _ 56-0509.1). In addition, the state will indemnify non-PRP parties for any judgment for money damages based on common law and arising from past contamination.

The liability protection is subject to the following reopeners:

1. failure to complete the project to the NYDEC satisfaction or the terms of the agreement,

2. fraud in identifying and demonstrating the remediation levels,

3. release of hazardous substances at the site, and

4. changes in the site's use that requires greater protection.

Funding. The 1996 Bond Act authorized $200 million in general obligation bonds for municipal environmental restoration projects. The NYDEC may use the bonds to provide grants of up to 75% of the eligible costs for the investigation and remediation of brownfield sites. According to the NYDEC's 1998 Clean Water/Clean Air Bond Act Annual Report the department has committed 14.1 million to 79 eligible projects, but has dispersed only $75,021 to three projects (see Attachment 4 for a list of projects and award amounts).

PENNSYLVANIA

Pennsylvania's Land Recycling Program

Pennsylvania's Land Recycling Program, established in 1995, offers liability protection, flexible remediation standards, and funding to parties that voluntarily remediate brownfields (see Attachment 5, OLR Report 99-R-0040, for a complete description of Pennsylvania's program).

Eligible Parties. Owners, operators, prospective purchasers, and municipalities, including PRPs, that voluntarily remediate sites are eligible for the program. Eligible parties, other than PRPs, may apply to the state's Department of Commerce for grants and low interest loans for up to 75% of the project costs.

Remediation Standards. Sites remediated under the program must meet one or more of three levels of numeric remediation standards: (1) background, (2) statewide health standards, and (3) site-specific standards. The three options allow potential developers limited flexibility while providing the predictability needed to develop realistic remediation cost estimates. The standards apply to most voluntary and all mandatory clean-ups in Pennsylvania

Liability Protection. The program protects owners and developers (and their lenders, fiduciaries, and trustees) from liability for (1) future clean-ups, (2) third party contribution suits (under state law), and Pennsylvania citizen suits once a site is remediated to the applicable standard. The liability protection also includes anyone participating in the clean-up, successors, and future owners. The act does not protect owners or operators from liability for contamination that occurs after the clean up date.

The liability protection does not apply or is revoked if:

1. fraud was committed in demonstrating attainment of the applicable standard,

2. new information confirms the existence of an area of the site with contamination that exceeds the standard,

3. the remediation fails to reduce a contaminant to the standard,

4. a substantial change in the exposure conditions leads to an increased health risk beyond the acceptable level defined by the standard, and

5. the contamination occurred after the May 19, 1995 on a site not used for industrial activity before that date.

Funding. The program, through the Industrial Sites Cleanup Fund, offers grants or low-interest loans for up to 75% of the cost of conducting an environmental assessment and implementing a clean-up plan. The state capitalized the fund with a $15 million transfer from its Hazardous Sites Fund. Eligible applicants include (1) parties not responsible for the underlying contamination, (2) political subdivisions (and their local agencies), and (3) local economic development agencies.

The state also established a $2 million Industrial Sites Environmental Assessment Fund to provide grants to municipalities, local authorities, nonprofits, and other similar groups to assess high priority sites in distressed municipalities. The Department of Commerce administers both funds.

According to the program's annual report, the two funds awarded 74 grants and eight loans last year for a total of $11 million.

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