TCS Daily

Federal 'guidance' poses greatest threat to state toxic site cleanups

By Lynn Scarlett - February 26, 2001 12:00 AM

Next week, Congress will, again, convene hearings on "brownfields." By one estimate, more than 500,000 of these contaminated, old industrial sites -- so-called brownfields -- dot the American landscape. Both the Senate and House already have draft legislation to beef up -- and clarify -- the federal role in cleaning up these sites and moving them back into productive use.

Many states, though, have already taken the lead in getting these sites cleaned up and redeveloped. Overly prescriptive federal action now could sink brownfield sites into the same regulatory mire that has slowed clean up of other sites under the embrace of the federal Superfund law.

The Superfund program is legendary for its inertia and high costs. Under the Comprehensive Environmental Response, Compensation, and Liability Act (the actual name of the Superfund law), Congress intended to spur clean up of lands severely contaminated by hazardous wastes. Strict liability rules made owners or users of those contaminated lands responsible for paying clean-up costs. Through a provision called joint-and-several liability, individual owners or users could be responsible for all clean-up costs regardless of their actual contribution to contamination. They were responsible even if they had complied with all relevant regulations at the time they disposed of hazardous wastes at a particular location. Subsequent court cases, though ambivalent, even included lenders and other financial institutions within the liability grasp of Superfund.

This strict, retroactive, joint-and-several liability had a chilling effect on the transfer of these properties to new owners who otherwise would have been willing to redevelop the sites. It also unleashed costly legal battles as "potentially responsible parties" contested who should pay how much.

But in addition to these legal problems, Superfund had other features that jacked up the cost of cleaning sites. Regulatory clean-up standards often had little relationship to potential risks posed at a particular site. And the Environmental Protection Agency (EPA), charged with oversight of the law, often required one-size-fits-all clean-up technologies and procedures that didn't fit the local conditions.

Fortunately, not all contaminated sites fell within the orbit of Superfund jurisdiction. And eyeing these thousands of other sites, many state regulators by the early 1990s began searching for alternatives to the prescriptive, punitive Superfund approach to cleaning up contaminated sites.

They had ample motivation. Many sites -- abandoned, sometimes dangerous, and unproductive eyesores -- lay within old urban centers. Investors avoided them. Industries seeking new facilities leapfrogged outside of city boundaries to build on pristine "greenfields," in what city officials dubbed "donut development" patterns.

Nearly all states now have some sort of voluntary clean-up program; a third have special brownfields programs. Many of them depart radically from the federal Superfund model, and vary widely among themselves. That is their virtue. States are experimenting with the mix of clean-up standards, liability rules, and financial incentives that will succeed in attracting private-sector investment in these sites. And, so far, many of these states are getting the job done.

Within two years of inaugurating its Land Recycling Program, Pennsylvania had spurred clean ups of over 100 sites; another 200 had initiated clean ups. (It took the Feds over a decade to achieve similar clean-up levels at Superfund sites.) One six-acre brownfield site abandoned in 1958 became home to a microbrewery, a specialty steel distributor, a computer service, and an automotive training center under the Pennsylvania program.

Illinois, the first state to initiate a brownfields program, signed on 700 sites for participation within just a few years of inaugurating the program. Just one year after the 1994 introduction of its brownfields program, Michigan estimated that the program had triggered more than $220 million in private investment.

Though state programs differ in their details, they often share several common characteristics:

Liability relief. Some limit lender liability. Others offer "covenants not to sue" if developers clean sites to agreed upon standards. Still others offer releases from clean-up liability to developers who clean and redevelop old contaminated sites. A report by the Michigan Jobs Commission ranked liability protection as the single most-significant state brownfields program innovation.

Flexible standards. Rather than old one-size-fits-all clean-up standards long-associated with Superfund, Pennsylvania has three sets of standards, which allow flexibility in how sites are cleaned up. In Illinois, clean up can be tailored to the expected use of the property, with locations designated for residential use required to meet more stringent standards than those that will be put back into use as industrial sites, for example.

Financial incentives. Brownfields are not cheap to redevelop. The City of St. Louis estimated the cost of assembling several land parcels and cleaning them up at $6 per square foot for ground valued at about $1.50. A report by the Northwest-Mideast Institute showed, in one hypothetical example, how brownfields redevelopment could cost 50 percent more than development of a similar "greenfield" site on a city's periphery. So, most states sensibly offer some sort of financial help or assistance such as low-interest development loans, tax credits, or property-tax relief. Not cleaning up urban brownfields' sites often results in a spiraling decline in environmental conditions. Abandoned sites deteriorate and attract illegal dumping. Unattended contamination sometimes spreads into groundwater.

Indeed, states perceiving this downward spiral have begun to reverse these trends through their brownfields programs. And the EPA and now Congress want a hand in brownfields redevelopment.

Federal regulators and lawmakers could facilitate state programs by clarifying federal and state roles or by changing Resource Conservation and Recovery Act rules that limit remediation options in some cases. But states may be best served by being left alone to experiment with what programs work well given local circumstances.

When EPA chimed in on brownfields in the mid-1990s, its proposed brownfields guidance document would have given it oversight over virtually all states' brownfields programs. It would have insisted on one-size-fits-all standards, severely limiting eligibility of sites under more flexible state program. Clean up as proposed by the states to levels that protected human health would no longer be acceptable. The whole point of these programs -- to encourage clean ups by removing as much red tape as possible -- would have been lost.

After vigorous protest by the states in 1997, EPA withdrew its proposed brownfields guidance document. But the risk of federal micromanagement remains.

The Bush agenda -- and one House bill -- emphasize state flexibility. That approach, not federal micromanagement, is what the states need.


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