The New York State Business Council

•       The bill authorizes DEC to require “responsible party” participants to fund citizen participant grants of $50,000 or more, or up to 1 percent of the cleanup projects costs, whichever is lower; and DEC can authorize more than one such grant per site.  This requirement imposes additional costs on the program participant who, despite being defined as a “responsible party” under A.7507, may have no legal obligations to clean up the site under existing state remedial programs – thereby creating another disincentive to participation.  The bill also fails to hold grant recipients accountable for reasonable and/or effective use of such funds.

Business Fees – Despite the ongoing economic slowdown, and the continued erosion of the state’s manufacturing sector, A.7507 would impose significant additional fees on in-state  manufacturers as part of its “superfund” refinancing provisions.  While described as a “polluter pays” approach, this is really a “tax business” proposal.  It imposes an additional $18 million in fees on manufacturers still doing business in New York State, with the funds going to clean up sites for which they have absolutely no responsibility.  These fees will be on top of about $24 million in existing superfund program fees – an existing burden that already exceeds the superfund-related fees imposed by nearly every other state. 

Responsible parties are already directly paying for the cleanup of most sites subject to the state’s superfund and oil spill programs, in addition to paying fees that support state-financed cleanups of municipal landfills and abandoned sites.  The Business Council believes that the business community has already paid more than its ‘fair share” of the state’s cleanup efforts.  Since the cleanup of abandoned properties produce broad benefits to New York State, the financing of these cleanups should also be broadly based, using General Fund resources rather than narrowly targeted industry fees.

Impact on Other Remedial Programs – While primarily intended to address brownfield sites, A.7507 would also impose addition requirements – and costs – on past and future participants in the state’s superfund and oil spill programs, while achieving little in the way of reducing real public health or environmental risks.  In fact, A.7507 would significantly expand the liability standard under the state’s existing superfund program for groundwater cleanups.

•       A proposed “groundwater protection and remediation program,” would impose enormous additional costs on responsible parties in an effort to bring all contaminated, non-saline groundwater back to meeting “drinking supply” standards, irrespective of whether there is any need for, or likelihood of, using a specific aquifer for a potable water supply (or whether naturally-occurring conditions, include water quality and quantity, would support an aquifer’s use as a drinking water source.)

•       This groundwater strategy will employ a new definition of “responsible party,” which includes the owner or operator of any site where hazardous substances have been released that may impact groundwater, irrespective of how insignificant the release was, and irrespective of whether the “responsible party” would otherwise be liable for cleanup costs under the state’s superfund or oil spill program.

•       Under A.7507, Title 13 (state superfund) program participants can also be forced to provide citizen participation grants of $50,000 or more to organizations “affected” by a site.  As is the case for similar provisions in the brownfield section of A.7507, the bill allows for the awarding of multiple grants per site, and fails to establish mechanisms to assure the accountability of grant recipients.

•       A.7507 will also divert funding from the Clean Water/Clean Air Bond Act, initially designated for municipal brownfield projects.  This bill would set aside $75 million (from the $200 million provided for in Title 5 of the CWCA bond act) to pay for “priority groundwater cleanup projects” – including projects sponsored by a “community based organization, rather than a municipality – and for technical assistance grants to community groups related to groundwater projects.

In summary, A.7507 sets very stringent cleanup standards for brownfield projects (higher, in some cases, than would be applied to superfund sites), and imposes complex standard-setting criteria, raising serious concerns about its implementability and attractiveness to potential brownfield developers.  

Unlike most states' brownfield programs, the bill does not base cleanups on the intended use of a brownfield site, and imposes significant restrictions on the ability of new site owner's ability to determine the next use of a brownfield site.  And while the bill offers liability protection for "innocent" parties willing to purchase, cleanup and redevelop a brownfield site, it would also withdraw liability protection –  and, in some cases, economic incentives –  based on the discovery of old or migrating contamination or other factors beyond the control of the program participant.

The successful blueprint for an effective brownfield program has been evident for years.  New York should look at the successful programs in neighboring states like Pennsylvania and Massachusetts, and other large states across the U.S., where significant progress is being made under brownfield programs employing reasonable use-based cleanups, clear liability releases and targeted incentives.   

However, we believe that the approach set forth in A.7507 will not have the intended effect of promoting the cleanup of brownfield sites, reducing the health and environmental risks posed by such sites, and bringing such sites back into productive use. 

For these reasons, The Business Council opposes adoption of A.7507.

BILL:                  A.7512 (Schimminger)

SUBJECT:           Brownfield Redevelopment

STATUS:            Assembly EnCon Committee

DATE:                May 8, 2003

Staff Contact:    Ken Pokalsky, Director, Environmental Programs

While this bill has a number of provisions supported by The Business Council, the overall package includes too many measures that would adversely impact the state’s business community, or that are contrary to the goal of establishing an effective, efficient and protective program for cleaning up and redeveloping brownfield sites.  Therefore, The Business Council opposes A.7512 in its current form, and looks forward to the opportunity to work with the sponsor on amendments.

The Business Council supports the description of a three-tiered approach to brownfield cleanups set forth in A.7512, with standards for unrestricted site cleanups as well as use-based cleanups. However, these provisions only apply to the deliberations of a DEC advisory committee, and not to the DEC’s actual promulgation of regulatory standards.  We believe this is a major deficiency.  

This bill also carries forward a number of provisions from the Governor’s budget bill that are strongly opposed by The Business Council.  These include: $20 million in new fees, mostly impacting on the state’s manufacturing community, that would help refinance the superfund program; creation of a“presumption” that certain commercial and industrial sites be cleaned up to residential soil standards; new state-level causes of action for DEC cost recovery and for contribution claims by private parties, and others.

Finally, we see the creation of a new brownfield program office, and a multitude of new brownfield-related funding programs, to be of little value to the main objectives of this bill – to support private-sector brownfield cleanup and redevelopment projects.  We also see these additional programs as a drain on the limited resources that will be available to the state over the next several years to provide direct incentives for the cleanup and redevelopment of brownfield sites.

While A.7512 takes the right approach to brownfield cleanup standards, we oppose its approval due to a number of other significant shortcomings and/or inappropriate provisions.

MEMORANDUM

May 12, 2003

TO:              Senator James Alesi 

FROM:        Ken Pokalsky, Director, Environmental Programs
RE:               S.4996

While we support a number of the key provisions of this bill, it carries much of the “baggage” that we have been opposing in the Governor’s budget bill (e.g., significant industry fees, a “residential presumption” for certain site cleanups, a state cause of action for cost recovery and contribution claims.) 

This bill takes the general approach we support with regard to cleanup standards and liability releases.  However, even some of its best provisions have significant deficiencies.  For example, while we support the basic description of cleanup categories, it applies only to the deliberations of the DEC’s advisory committee, and not to the DEC’s actual promulgation of regulatory standards.

Finally, we see the creation of a new brownfield office, and a multitude of new brownfield-related funding programs, to be unnecessary to achieve the main objectives of this bill – to support private-sector brownfield cleanup and redevelopment projects.  These additional programs and provisions are also a drain on the limited resources that will be available to the state over the next several years to support brownfield projects.

The attached pages provide a more detailed discussion of what we like, dislike and question regarding S.4996.  I look forward to the opportunity to discuss this proposal further, and to work on appropriate amendments.

kp

Enclosure

PART 1 -- THE GOOD

31/55            Federal “Asset Conservation Act” liability exemptions and limits, plus liability limit for IDAs holding bare title to property.

38/23          Incorporates federal “brownfield” exemption for contamination caused by passive migration.  HOWEVER, carries over uncertain requirements regarding “steps to stop continuing releases” and to “prevent threatened future releases.”

40/11          Delays potential IHWS listings if a site is entered into the VCP.

42/17          adopts Title 13 cleanup objective of  “protection of public health and the environment,” with a minimum cleanup requirement of elimination or mitigation of significant threats.

42/23+        OK remedy selection criteria (includes cost and implementability.)

44/17            CERCLA defenses, including “brownfield” innocent buyer defense.

47/29           Liability release for “bona fide purchaser” (as defined in CERCLA section 101(40)) of Title 13 site, with reservations limited to failure to comply with order/agreement, new on-site release, and change in site use that requires additional cleanups.

53/34           Title 14 provides the state with immunity from damages for certain acts and omissions, rather than requiring the VCP participant to provide the state with indemnification.

57/50            Incentives, rather than requires, achievement of unrestricted use levels (although we question the granting of “priority” status in economic development programs – this concept needs further definition.)

59/28++       Good approach for cleanup categories: unrestricted use with no institutional/engineering controls; use-based with controls; and site-specific, use-based cleanups.  HOWEVER, this structure only applies to recommendations of the advisory committee, and in no way binds the DEC’s actual adoption of cleanup standards through regulations.  It is essential that this structure be imposed on the DEC’s rulemaking.                   

61/30+        First three reopeners for Title 14 liability release (failure to comply with agreement, fraud, new release of hazardous substance) are good.

63/16           Tax certificate (and eligibility for incentives) can only be revoked if participant commits fraud or fails to comply with terms of agreement (NOTE: reference here to “modified” certificates needs to be deleted.  The bill contains no provisions or criteria for “modifying” the certificate.  Also, the bill should have provisions for reinstating the liability exemption and tax certificate once agreement “violations” are addressed.)

64/34           Allows agreement to substitute for DEC-issued permits in certain circumstances.

PART 2 –  THE BAD

14/1 & 11    Directs ESD commissioner to “arrange for allocation and reservation of funds” from state agency infrastructure improvement programs – this is function of legislative appropriations.  ESD cannot redirect legislatively appropriated funds.  Also, unclear what “special terms” for ESD and other grants programs are being comtemplated for LROAs.  We also question appropriateness of giving all projects within a LROA “priority” treatment (whatever that means.

14/15           We continue to question the need/appropriateness/efficacy of creating numerous additional funding programs, each dedicated to a specific niche within the brownfield redevelopment process (or specific constituency of the former “Brownfield Coalition.”)   Some (e.g., sector-specific incentives) simply make no sense to us.  Better to have one funding source for “innovative” brownfield efforts. 

25/21           Unclear why these Economic Development Law provisions for tax certificates are needed, since Section 27-1415 creates provisions for issuance.  Also, this section says certificate will be based on “reasonably anticipated cost of remediation,” while latter provisions (126/11) require application for certificate to cite actual site preparation expenses.

40/26          DEC will send “enforcement consent order” to any PRP for a listed site, if such PRP does not agree to submit a VCP application within 6 months of being notified by (or of having their site listed by) DEC; these orders will not contain liability release provisions, and cleanup is subject to Title 13 provisions.  This approach seems to dispense with prioritization of sites, procedural requirements of Part 375

42/43           Residential soil cleanup presumption -- applicable to top 6" of soil -- for certain property adjacent to residential property.

43/27           TAGs up to $50,000 issued directly by from DEC, but these expenditures seem to be recoverable from program participants under both Title 13 and Title 14.

46/10++       Creates state-level causes of action for state cost recover (at least the section of the bill refers to “reasonable” costs, but does not exclude cost of TAGs) and for contribution.  Also purports to authorize contribution claims in federal court for costs of Title 13 or VCP cleanups, and directs federal judges to allocate costs using equitable factors.

47/21           States that Title13 project reports must demonstrate compliance with IHWS program for the site, rather than requirements of consent order and/or DEC-approved remedial plan.

47/26           Explicitly precludes any liability release for RP doing cleanup under Title 13 order.  Release, with appropriate reservations, should be provided.

48/6            Change in use reopener applies to “person who performed the work under the order and/or any other responsible persons.”  Reopener should apply to entity making change in use.  Also, reference to “person who performed work” seems to implicate engineering firm/contractors.

50/5            Title 14 definition of “contributory responsible party” is too broad; result is that entity responsible fora  minor on-site release is required to remediate all off-site plumes, even if they otherwise would be considered NCRP for such off-site impacts (see p.54/50)

56/10           Authority to compel statutory and/or common law RPs to conduct off-site groundwater cleanups, if such contamination poses significant threat (or any such contamination has potential to migrate back on site, irrespective of potential threat), is too broad.  A CRP as defined in new Title 14 could be subject to this order, even though it would have no Title13 liability for such cleanups.  Also unclear whether such RPs have access to due process procedures in T.13 and 375.  See also 114/10, where CRP, as defined in T.14, is compelled to test off-site wells, provide alternative supply and do groundwater remediation.

56/51          “Source removal” is part of minimum cleanup requirement; defined as reaching point where mass of contamination recovered from site is exceed by mass of resources used in recovery.  Requirement should be for source removal, control or isolation.

61/38           VCP participants, other than “nonresponsible parties (as defined in Title 14) are subject to liability reopener based on DEC’s determination that site is no longer protective because of change in standard or other risk factor.  An entity that simply purchases a T.13 site, with no direct involvement in its cleanup, gets a better release than this.  VCP participants should not be subject to reopeners based on contamination they did not cause.

75/55++       We oppose these $18 million-worth of hazardous waste program fee surcharges.  (Note, under this bill, the full surcharge would be imposed in the first year after adoption . . . Even the Gov’s bill set the first year surcharge at 75% of the maximum.)

84/20++       We do not support this re-write of cleanup requirements for oil spills under the Nav. Law.  No party other than the Executive is aksing for this; its not relative to the brownfield focus of this bill.)

99/26            Requiring the annual transfer of General Fund resources to the “remediation project transfer fund” to be set at level of “special revenue” receipts.  As waste-generation income continues its downward trend, this approach will have a double-negative impact on program funding, and likely result in a call for more or higher fees.

109/52+       We question need for this fairly rich RPT credit, especially in this format.  If such credit is to be included, why exclude sites less than 10 acres?  Also, we question why RPT credit is based on number of jobs at site in any given year, rather than number of jobs created or retained – this could be used to reward maintenance of pre-cleanup employment levels (or even a significant reduction in employment).

PART 3 – THE UGLY (incomplete/questionable provisions)

2/13            Do we really need a newly created brownfield coordinating office?   Since its duties are largely economic development related, it is  unclear why this offices is needed.  Program oversight, and efforts to expedite and/or promote projects could be assigned to ESD.  And what is the significance of the “smart development” reference in the title?

7/43            Definition of brownfield site (to include sites “suspected of being contaminated) for LROA purposes is different than for the bill’s cleanup provisions (see p.50/line 36).

8/11            “Redevelopment” doesn’t explicitly include residential development -- is it your intent to exclude it?

8/38            Unnecessary activities are made eligible for pre-planning grants (e.g., should it include assessments of specific sites?)   Also, we question the ability to, and appropriateness of,  linking public health issues with brownfield sites.  (As an aside, when most programs have application fees, why does this program pay potential applicants for the cost of developing an application???)

11/11          We are concerned about restrictions on redevelopment opportunities for specific parcels within a LROA.  This bill requires ID of “type of potential develoments anticipated for sites within LROA proposed by either current or the potential owners of such sites.”

12/29          After LROA and redevelopment plan is finalized, its unclear whether there are any restrictions on property owners ability to access economic development incentives that were created outside of this bill (e.g., IDA financing, EZ benefits), or that are outside of (or inconsistent with) the LROA plan.   Will these plans impose binding requirements on ALL properties within the LROA?

31/29          In section on annual certification of institutional/engineering controls, provisions are needed to account for temporary upsets of, and restoration of, such controls.  (see also 110/11)

36/36           Weird liability provisions for “not for profit” buying or owning land to be used for “community purposes,” but only if the NFP does not become involved in the redevelopment of the site for such purpose.  Unclear why this is useful.

39/40           Why continue to impose this annual IHWS survey requirement on counties?

50/5           It is unclear whether Title.14 definition of “contributory responsible party” affects entities that otherwise would be a “bona fide purchaser” exempt from liability.

50/30           This section refers to non-existing definition of “non-contributory responsible party” in Title 12 of the Navigation Law.

51/55           This Title 14 reference to recoverable “state costs” should refer to “reasonable state costs” (see also 108/8).

52/25           Is it wise to a) allow only one standard for Phase 1 investigations, b) include a statutory reference to a specific versions of a privately-published standard (very difficult to modify in future, to incorporate updated versions of the ASTM standard, or to allow other, comparable standards.)

53/26+        Requires VCP agreement to include provisions that are a function of law (e.g., operator liability, immunity provisions) and therefore unnecessary.

54/13           Should specify that participant can enter into agreements for an investigation workplan only, or for both investigation and remedial workplan.

55/35           The final report – and DEC acceptance thereof – should accommodate the ongoing implementation of long-term O&M activities, so long as such activities continue to be implemented consistent with a timetable in the agreement.   (Note that the tax certificate criteria at 126/5 recognizes such efforts, even though the final report approval process does not.) 

57/22+        Reference to contamination at low level “yet slightly above the applicable cleanup levels” may be good concept, but excessively vague, and therefore inappropriate as statutory language.  Note also that there is no clear outcome of the required 5 year monitoring cycle for groundwater.

58/6           This whole paragraph (d) makes no sense.  It suggests that the advisory committee will be developing protocols on a case-by-case basis where source removal is not feasible. Clearly not what you mean.

60/25           Legislation should establish criteria for DEC’s adoption of cleanup standards through regulations, not just for the advisory committee’s deliberations.

62/39           States that tax certificates related to eligibility for the investment-based credits (Tax Law section 21), but it also applies to the RPT credits as well.

88/28++       Unintended words/language throughout this section of bill; seem left over from previous drafts (e.g., the phrase “contractual relationship” within parenthesis on line 28.

110/47        This section on RPT incentives refer to non-existing definitions of “type A and type B” volunteers – obviously left over from previous draft.  References should be to CRPs and NCRPs?  or is it NCRPs and NRPs. 

121++           These section on appropriations, addressing 2002 budget bills, obviously fail to achieve the intent of making additional approps. available for the new fiscal year.