[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
    REAUTHORIZATIONl OF THE BROWNFIELDS PROGRAM SUCCESSES AND FUTURE 
                               CHALLENGES

=======================================================================

                                (109-77)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                    WATER RESOURCES AND ENVIRONMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 8, 2006

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure


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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-    JAMES L. OBERSTAR, Minnesota
Chair                                NICK J. RAHALL, II, West Virginia
SHERWOOD L. BOEHLERT, New York       PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
WAYNE T. GILCHREST, Maryland         Columbia
JOHN L. MICA, Florida                JERROLD NADLER, New York
PETER HOEKSTRA, Michigan             CORRINE BROWN, Florida
VERNON J. EHLERS, Michigan           BOB FILNER, California
SPENCER BACHUS, Alabama              EDDIE BERNICE JOHNSON, Texas
STEVEN C. LaTOURETTE, Ohio           GENE TAYLOR, Mississippi
SUE W. KELLY, New York               JUANITA MILLENDER-McDONALD, 
RICHARD H. BAKER, Louisiana          California
ROBERT W. NEY, Ohio                  ELIJAH E. CUMMINGS, Maryland
FRANK A. LoBIONDO, New Jersey        EARL BLUMENAUER, Oregon
JERRY MORAN, Kansas                  ELLEN O. TAUSCHER, California
GARY G. MILLER, California           BILL PASCRELL, Jr., New Jersey
ROBIN HAYES, North Carolina          LEONARD L. BOSWELL, Iowa
ROB SIMMONS, Connecticut             TIM HOLDEN, Pennsylvania
HENRY E. BROWN, Jr., South Carolina  BRIAN BAIRD, Washington
TIMOTHY V. JOHNSON, Illinois         SHELLEY BERKLEY, Nevada
TODD RUSSELL PLATTS, Pennsylvania    JIM MATHESON, Utah
SAM GRAVES, Missouri                 MICHAEL M. HONDA, California
MARK R. KENNEDY, Minnesota           RICK LARSEN, Washington
BILL SHUSTER, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
JOHN BOOZMAN, Arkansas               ANTHONY D. WEINER, New York
JIM GERLACH, Pennsylvania            JULIA CARSON, Indiana
MARIO DIAZ-BALART, Florida           TIMOTHY H. BISHOP, New York
JON C. PORTER, Nevada                MICHAEL H. MICHAUD, Maine
TOM OSBORNE, Nebraska                LINCOLN DAVIS, Tennessee
KENNY MARCHANT, Texas                BEN CHANDLER, Kentucky
MICHAEL E. SODREL, Indiana           BRIAN HIGGINS, New York
CHARLES W. DENT, Pennsylvania        RUSS CARNAHAN, Missouri
TED POE, Texas                       ALLYSON Y. SCHWARTZ, Pennsylvania
DAVID G. REICHERT, Washington        JOHN T. SALAZAR, Colorado
CONNIE MACK, Florida                 JOHN BARROW, Georgia
JOHN R. `RANDY' KUHL, Jr., New York
LUIS G. FORTUNO, Puerto Rico
LYNN A. WESTMORELAND, Georgia
CHARLES W. BOUSTANY, Jr., Louisiana
JEAN SCHMIDT, Ohio

                                  (ii)

  


            Subcommittee on Water Resources and Environment

                JOHN J. DUNCAN, Jr., Tennessee, Chairman

SHERWOOD L. BOEHLERT, New York       EDDIE BERNICE JOHNSON, Texas
WAYNE T. GILCHREST, Maryland         JOHN T. SALAZAR, Colorado
VERNON J. EHLERS, Michigan           JERRY F. COSTELLO, Illinois
STEVEN C. LaTOURETTE, Ohio           GENE TAYLOR, Mississippi
SUE W. KELLY, New York               BRIAN BAIRD, Washington
RICHARD H. BAKER, Louisiana          TIMOTHY H. BISHOP, New York
ROBERT W. NEY, Ohio                  BRIAN HIGGINS, New York
GARY G. MILLER, California           ALLYSON Y. SCHWARTZ, Pennsylvania
HENRY E. BROWN, Jr., South Carolina  EARL BLUMENAUER, Oregon
BILL SHUSTER, Pennsylvania           ELLEN O. TAUSCHER, California
JOHN BOOZMAN, Arkansas               BILL PASCRELL, Jr., New Jersey
JIM GERLACH, Pennsylvania            RUSS CARNAHAN, Missouri
TOM OSBORNE, Nebraska                NICK J. RAHALL, II, West Virginia
TED POE, Texas                       ELEANOR HOLMES NORTON, District of 
CONNIE MACK, Florida                 Columbia
LUIS G. FORTUNO, Puerto Rico         JOHN BARROW, Georgia
CHARLES W. BOUSTANY, Jr.,            JAMES L. OBERSTAR, Minnesota
Louisiana, Vice-Chair                  (Ex Officio)
JEAN SCHMIDT, Ohio
DON YOUNG, Alaska
  (Ex Officio)

                                 (iii)

                                CONTENTS

                               TESTIMONY

                                                                   Page
 Bodine, Hon. Susan Parker, Assistant Administrator, Office of 
  Solid Waste and Emergency Response, U.S. Environmental 
  Protection Agency, Washington, D.C.............................    11
 Magill, John M., Deputy Director, Ohio Department of 
  Development, Columbus, Ohio....................................    11
 Manning, Terry, Senior Planner and Brownfields Coordinator, 
  South Florida Regional Planning Council, Hollywood, Florida....    11
 Meyer, Peter B., Director of Applied Research, Institute for 
  Public Leadership and Public Affairs, Northern Kentucky 
  University, Highland Heights, Kentucky.........................    11
 Philips, Jonathan, Senior Director, Cherokee Investment 
  Partners, Raleigh, North Carolina..............................    11

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Carnahan, Hon. Russ, of Missouri.................................    46
Costello, Hon. Jeffry F., of Illinois............................    47

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

 Bodine, Hon. Susan Parker.......................................    32
 Magill, John M..................................................    49
 Manning, Terry..................................................    55
 Meyer, Peter B..................................................    65
 Philips, Jonathan...............................................    77

                       SUBMISSION FOR THE RECORD

 Bodine, Hon. Susan Parker, Assistant Administrator, Office of 
  Solid Waste and Emergency Response, U.S. Environmental 
  Protection Agency, Washington, D.C., responses to questions 
  from Rep. Pascrell.............................................    42

                         ADDITION TO THE RECORD

U.S. Conference of Mayors, Cherokee Investment Partners, LLC, 
  International City/County Management Association, International 
  Council of Shopping Centers, Local Initiatives Support 
  Corporation, National Association of Industrial & Office 
  Properties, National Association of Local Government 
  Environmental Professionals, Northeast-Midwest Institute, The 
  Trust for Public Land, letter, June 8, 2006....................    86


    REAUTHORIZATION OF THE BROWNFIELDS PROGRAM--SUCCESSES AND FUTURE 
                               CHALLENGES

                              ----------                              


                         Thursday, June 8, 2006

        House of Representatives, Committee on 
            Transportation and Infrastructure, Subcommittee 
            on Water Resources and Environment, Washington, 
            D.C.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
room 2167, Rayburn House Office Building, Hon. John J. Duncan, 
Jr. [Chairman of the subcommittee], presiding.
    Mr. Duncan. I want to first welcome everyone to our hearing 
today on the reauthorization of the Brownfields Program at the 
Environmental Protection Agency.
    As manufacturing and commercial companies relocate or close 
their operations, they sometimes leave behind abandoned 
factories, salvage yards, and warehouses. Some of these sites 
may contain residual contamination with hazardous substance or 
other pollutants. These potentially contaminated former 
industrial and commercial sites are the brownfields that are 
the subject of our hearing today.
    Brownfields drive down property values and tax revenues, 
and are a major blight in many of our cities and towns. There 
are hundreds of thousands of brownfields sites in America. 
While some of them exist in rural areas, most are in our 
cities, close to highways, rail lines, and ports. They are 
prime locations for redevelopment except for the fact that the 
land may be contaminated.
    In the past, no one wanted to invest in cleaning up these 
sites because they feared the environmental liability under 
statutes such as the Comprehensive Environmental Response, 
Compensation, and Liability Act, also known as Superfund. As a 
result, many developers turned to undeveloped green spaces for 
new investments.
    It became clear that it made good economic and 
environmental sense to remove legal hindrances and support 
State, local, and private efforts to clean up and redevelop 
brownfields. So, through this Committee's efforts, Congress 
passed, and the President signed, the Small Business Liability 
Relief and Brownfields Revitalization Act. That law provided 
legislative authority for the Brownfields Program, including 
grants for site assessments and cleanup. The law also clarified 
liability associated with brownfield sites and helped provide 
greater protections for innocent parties who want to clean up 
and redevelop brownfields properties.
    Title II of the legislation was the Brownfields 
Revitalization and Environmental Restoration Act of 2001, which 
authorized $200 million per year for Brownfields Program grants 
and $50 million per year to support State and tribal response 
programs. The grants are issued by EPA each year to communities 
and tribes for site assessments and revolving loan funds and 
direct cleanups.
    With the help of these grants and the law's liability 
protections, communities can transform eyesores into safe and 
clean lands for new businesses, residences, public parks, or 
green space. The EPA estimates that the Brownfields Program has 
leveraged more than $8.2 billion in private investment and 
helped create more than 37,000 jobs. In addition, cleaning up 
brownfields may help control urban sprawl by making former 
industrial and commercial sites available for new development, 
thereby taking some of the pressure off undeveloped natural 
areas on the outskirts of cities.
    I think the Brownfields Program has been a very successful 
government program, but like any good program, there may be 
ways to make it better. The authorization for appropriations 
for the Brownfields Program will expire this year. As we 
consider reauthorization of the Program, we should look for 
opportunities to make improvements. Turning brownfields back 
into usable property involves the efforts of the Environmental 
Protection Agency, State and local governments, private 
investors, and non-governmental organizations.
    We have assembled a panel of experts from each of these 
entities who will help us understand how this program has been 
working and how we might want to improve it. I appreciate all 
of the witnesses taking time from their very busy schedules to 
be here with us this morning, and I look forward to hearing 
their testimony.
    Now let me turn to my good friend, the Ranking Member of 
the Subcommittee, Ms. Johnson, for her opening statement.
    Ms. Johnson. Thank you very much, Mr. Chairman. This 
morning the Subcommittee meets to hear testimony on the 
successes and future challenges of the Environmental Protection 
Agency's Brownfields Program and reauthorization of the 
Brownfields Revitalization and Environmental Restoration Act of 
2001.
    I have a deep appreciation for our subject matter this 
morning, as I have been able to witness firsthand the many 
positive effects brownfields redevelopment affords. In the 
heart of my congressional district and less than four blocks 
from my district office lies a 65 acre site known as the 
Victory Corridor. Less than five years ago, the former rail 
yard and utility site and an old abandoned packing house 
existed as a contaminated brownfield.
    However, thanks to the assistance of the State's voluntary 
cleanup program and the partnership with EPA, the City of 
Dallas and a private developer, the inner city property has 
been completely remediated and placed back on the city's tax 
rolls. The 65 acre site is now home of the American Center and 
home of my beloved Dallas Mavericks, and a mixed use 
development project that has transformed a formerly 
economically depressed area into a dynamic one.
    With results like these, it is no surprise that the 
Brownfields Program commands bipartisan enthusiasm and support. 
Conceived and initiated in the Clinton administration and 
legitimately enacted in the Bush administration, the program 
has proven to be a necessary catalyst in revitalizing 
underutilized sites and preserving undeveloped areas.
    Brownfields redevelopment programs are critical to our 
Nation's communities to grow stronger and smarter, while 
allowing them to recycle our Nation's land to promote continued 
economic growth and a cleaner environment. As President Bush 
said when signing the Small Business Liability and Relief and 
Brownfields Revitalization Act, this is a good jobs creation 
bill.
    Congress authorized, and the President supported, a funding 
level of $200 million annually for the site assessment cleanup 
efforts. Yet, the consistent and dramatic underfunding of the 
Brownfields Program by the President and the Congress leave 
much to be desired in terms of corresponding appropriations. In 
fact, the appropriations for brownfields assessment cleanup 
peaked at $97.7 million in fiscal year 2002, and only $89 
million in this year's House passed appropriations bill.
    Last year, EPA received 656 proposals for funding that 
passed its threshold requirements for eligibility. 
Unfortunately, EPA did not fund 55 percent of these proposals. 
Historically, EPA funds only about one-third of the requests. A 
fully funded program could fulfill nearly all of these 
proposals. EPA purports that the Brownfields Program has 
leveraged more than 37,000 jobs, yet the program has never 
received even one-half of its authorized funding.
    With job creation in the most recent quarter falling well 
behind expectations, one can only speculate what effect a fully 
funded program could have on the job market and the economy at 
large. Unfortunately, this appears to be another program where 
great promise is being left unfilled by inadequate funding.
    Mr. Chairman, I look forward to the testimony of our 
witnesses, and I want to thank you for being here. As evidenced 
by the GAO's sheer number of estimated brownfields throughout 
the Country, there is a clear and evident need for a strong 
flexible, accountable, and adequately funded Brownfields 
Program. The time has come to renew our resolve and desire 
toward stimulating growth across our Nation, and as we can 
begin by recognizing, targeting, and cleaning up the more than 
500,000 estimated brownfields across America, when left only, 
only frustrate the plans and hopes for our communities and 
neighborhoods.
    Thank you, Mr. Chairman. I yield back.
    Mr. Duncan. Thank you very much.
    Mr. Gilchrest.
    Mr. Gilchrest. Thank you, Mr. Chairman. I appreciate the 
hearing and all the witnesses that are here today to give us 
some insight into creating--I don't want to use the word 
``expanding,'' because people don't like to expand Federal 
programs necessarily, but the idea that we can get into this 
program, look at some ingenious ways to make it work better on 
the local level by creating and continuing this partnership 
between the Federal Government and the local level, and the 
idea that the potential that we could use besides assessments, 
but demolition can be included into the process of 
understanding how we can make better use of brownfields.
    The fundamental issue here, though, I think, Mr. Chairman, 
is that we are going to create a program where there are other 
options. You don't have to take the ag land, you don't have to 
take the open space. Let us make that connection between the 
local government, who has, really, virtually total authority 
over land use decisions, and create various options that they 
can think about.
    So we are creating options, offering opportunities for 
human thinking, the thought process, which we don't always have 
that much of any more because of Blackberries and strawberries 
and whatever you call those things, and cell phones and all 
these other things. Just to sit back, creating options, time to 
think about it so we can make much more valuable use out of 
this Federal program.
    Thank you.
    Mr. Duncan. Thank you very much.
    Mr. Pascrell.
    Mr. Pascrell. Thank you, Mr. Chairman and Ranking Member. 
Mr. Chairman, I am puzzled as to why we have not moved on this 
legislation, certainly through no loss of efforts on your part 
and the Ranking Member. You have been out front on water 
resources and on the issue of brownfields. You have been out 
front on the issue of sewer separation, SEOs, not sexy topics 
to talk about, but these are issues that municipalities 
throughout the United States struggle with day in and day out, 
and you have been strong on these issues.
    Brownfields legislation costs money, but the data and the 
science all show that this is a true economic stimulant. Jobs 
are created when this partnership moves forward in a forceful 
manner. Property that has been abandoned for many, many years 
that we drive by, an old city that I am from in New Jersey 
comes to life; people live there, people work there. And when I 
have to make a comparison, this is the kind of comparison I am 
making, judgment or not. And I am sure you wouldn't agree with 
the comparison, but, nonetheless, this is the one I make.
    If I have to make a judgment into putting more money into 
this program that has worked, as Clean Air Act has worked, as 
Clean Water Act has worked, if I have to make a comparison and 
a judgment between doing that and giving a tax cut to Jason 
Giombi and Barry Bonds, it is a very easy decision for me, 
because there is absolutely no scientific evidence that the tax 
cuts to those people making more than $1 million have anything 
to do with job creation in the United States. And you can 
pontificate all you want, I have not seen any evidence to that 
effect. But I have seen evidence, I have seen evidence on this 
issue.
    Now, all of these pieces of land throughout the United 
States of America add up to about 200,000 acres, so this is 
pretty significant. If there were 200,000 acres on fire in 
California this afternoon, there would be a major problem 
there. These pieces of property are literally on fire. They are 
not only barren, they are not only barren, but they may be 
causing major problems to the very aquifer health system within 
the community. And they are not giving anybody a place to live, 
particularly in densely populated areas, and they are not 
giving opportunities for people to work; and in certain parts 
of the Country, that is a major interest as well.
    So we have these 1200 brownfield sites. In my district 
alone, there are 1200 sites. Twelve hundred sites. My district 
covers two northern New Jersey counties. And, as I said, they 
are abandoned. They have been often industrial properties. In 
my district, this is the oldest industrial area in the entire 
Nation, ourselves, as well as Lowell, Massachusetts.
    Hazardous substances generated from many years of 
industrial activities contaminate these properties. As a former 
mayor, I can tell you that redevelopment is the only type of 
growth that is possible any longer in our urban communities. 
Even though our industrial base has changed over time, and we 
have debated that in other areas, since we have given away our 
infrastructure, our manufacturing infrastructure.
    We have surrendered it to the other side, to the other 
ocean or to that ocean. We have surrendered it under the belief 
that service jobs would supplant it. And where in God's name is 
the evidence for that? Particularly service jobs that we do 
create create jobs that pay far less money and provide less 
benefits. Ah, there is the twist. That sounds good in our 
efforts to protect the American worker.
    So even though our industrial base has changed, these 
properties in the district I am referring to, the 8th district 
in New Jersey--and it could be said for any district--they are 
valuable assets.
    And this is exactly how you have looked at it, Mr. 
Chairman, as a valuable asset. What do we do with that asset 
even though it may be a tainted asset, even though there may be 
some problems with that particular public asset? It could be a 
public asset even though it might be some of these properties 
are privately owned.
    And it has the potential to become magnets for the 
revitalization of our cities. Nobody ever talks about our 
cities any longer. Have you heard either side of the aisle, 
Democrats or Republicans, talk about the major cities of this 
Country? My party doesn't talk about it, in our attempt to be a 
global party, in our attempt not to be a fringe party. We don't 
talk about it anymore either. So everything must be wonderful 
in the cities of America, just moving along here.
    Brownfields development can have a multitude of positive 
effects on these most troubled areas of our Country, where most 
of the people live. Oh, yeah, I forgot about that. They can 
help to create jobs; they can improve the quality of the 
environment; they can spur smart growth and preservation of 
open space. There are so many success stories from our cities 
and suburbs that are being heard across the Country.
    The $250 million annually that we authorized; we know how 
much we appropriate. We don't do what we say, Mr. Chairman. And 
you have done everything in your power. You have even had sweat 
on your brow. And I wonder how, when you go home at night, what 
you think about all the effort that you put in sincerely and 
then the result, and then have to deal with the magnitude of 
irrelevant materials that we vote on in the Senate or the 
House. At this current funding level, Mr. Chairman, only about 
one-third of the eligible applicants can receive any money at 
all, and that is why I am mostly concerned.
    So I want to just end, if you may, if you give me the 
luxury. I have three questions just to throw out which I think 
are significant to the discussion today, and if you would allow 
me to provide those questions:
    What about allowing communities to apply for assessment and 
cleanup grants with one application, less paperwork, and mean 
it?
    And should the Congress consider making it easier for 
communities to apply for cleanup for properties that they do 
not yet own at the time of the application? I think that would 
be helpful, but what do you think?
    And would making assessment grants, in addition to cleanup 
grants, available to private non-profit entities, in addition 
to municipalities, be beneficial in terms of encouraging 
additional redevelopment of brownfields?
    Mr. Chairman, thank you for your courtesies.
    Mr. Duncan. Well, Mr. Pascrell, thank you very much. I can 
tell you that I spent five and a half seasons as bat boy for a 
minor league baseball team. I worked the first season and a 
half for free and the next four seasons for $1.50 a game. I can 
assure you that I have never once worried about Jason Giombi or 
Barry Bonds, or their salaries. And I can tell you that I am 
not concerned at all about giving them tax cuts, but I am 
concerned about trying to do something with this very small 
program.
    But I liked your statement so much I have allowed you give 
the longest statement that has ever been made in this 
Subcommittee, I believe.
    [Laughter.]
    Mr. Duncan. Thank you very much.
    Mr. Miller.
    Mr. Miller. Thank you, Mr. Chairman. And, Chairman Duncan, 
I really appreciate your hosting this hearing today. This is an 
issue. I have been a developer for 35 years. It is really, 
really important, being a former mayor. The cleanup and 
redevelopment of brownfield sites is really pretty important in 
most every community we face out there.
    The reports I have read, it appears that there is easily 
over 450,000 brownfield sites throughout this Country, and they 
are basically there because of contaminated products that were 
produced on their chemical compounds or hazardous substances 
that were used on the property have left them where they are 
at. And they really represent more than just eyesores to these 
communities; they threaten their groundwater supply, they cost 
local communities jobs and revenues.
    And they do, in some way, attribute to urban sprawl because 
we have sites within communities that have infrastructure in 
place that would accommodate various uses, whether it be a 
community center, a park, you know, apartments, condominiums, 
homes, commercial, whatever, that are not being utilized, they 
are just sitting there; and we are taking and advancing 
development in areas that really don't have the infrastructure 
necessary like some of these brownfield sites do.
    To build their economies and attract employers, increasing 
numbers of States and local governments are working to clean up 
and redevelop these sites. The largest obstacle they face in 
many cases is a lack of capital needed up front to cover the 
essential early stage activities such as site assessment, 
remediation planning, and actual cleanup of the sites. Private 
financiers really are unwilling, in many cases, to put the 
money forward to do that, to take the project through full 
recycling and redevelopment stages. Local municipalities and 
local leaders find themselves confronted with this complex task 
of redevelopment because of a lack of funding.
    As we work on this EPA Brownfields Program, I think it is 
important to ensure the Program focuses on assessing and 
cleaning up brownfield sites. Some advocate that the EPA 
Brownfields Program should include economic development, which 
HUD is doing currently, and I really have a problem with that. 
I mean, you approach a cleanup from a different perspective 
than HUD approaches it. HUD looks at redevelopment on the 
development side, and they look at redevelopment, they look at 
economic issues and how to basically go in and help communities 
up front with early stage funding to get the planning and those 
type of things going.
    Some have tried repeatedly to eliminate the funding for the 
BEDI Program and look at funding that through EPA, and I think 
Congress, in recent years, has made a very strong statement. We 
have expressed an overwhelming support for the BETI Program in 
this last year's program by including funding to allow the 
important program to continue. The House unanimously passed an 
amendment during floor consideration in favor of funding for 
the BEDI Program, and last year, on December 13th, they 
approved H.R. 280, which is the bill I introduced to 
reauthorize HUD's Brownfields Redevelopment Program.
    The fact that EPA does not specialize in economic 
redevelopment and the responsibility should not be brought to 
take on that role. I think what you are doing right now is an 
area you have expertise in; I don't think economic development 
is necessarily where your expertise are at. I don't believe 
that EPA and HUD's Brownfield Programs should be consolidated; 
I think there is a place for each of those. Each agency serves 
a unique purpose for redevelopment of brownfields in our 
Nation's communities.
    Mr. Chairman, as we look to reauthorize the EPA program, I 
would really encourage you and ask you to take into 
consideration the fact that HUD's goals on brownfields are 
different than EPA's goals on brownfields, and you are both 
doing a good job. So my talk today is not in any way to impugn 
you on what you are doing, because what you do is worthwhile, 
and it is a great endeavor and we need to expand that.
    But HUD looks at EPA, what you do, from a different 
perspective on their Brownfields Program. Theirs is just dealt 
with through the BETI Grant Program to be able to empower local 
agencies to take and be able to partnership with either private 
developers through redevelopment areas and take and stimulate 
economic growth within a community.
    So I know the Administration keeps zeroing out the BEDI 
Program through HUD, but I think we haven't emphasized the 
ability to use BEDI like we should. In fact, I have been 
strongly advocating simplifying the program because they 
require now you go get a Section 108 loan, then you pledge your 
CDBG funds for repayment.
    And, as you know, in most communities, CDBG funds are one 
of the most usable funds they have to give to communities, 
whether it is Meals on Wheels, YMCAs, other programs that these 
communities really need funds for. These programs are really 
utilized for those. So a lot of communities don't want to 
pledge those funds, and unless you are a direct recipient of 
it, which most communities aren't, you can't pledge something 
you don't receive other than getting it through the county or 
such.
    So we have actually complicated the BEDI Program, where it 
is not working as it should. I think we need to simplify the 
program. But what I don't want to do is mix two programs that 
have different objectives, when we want to encourage you to 
expand what you are doing. And you have to admit you have a 
different focus than HUD does.
    And so, Chairman Duncan, I wish you would look at this. And 
we seem to be arguing this every year, and we shouldn't be 
arguing it because we are all trying to arrive at the same 
destination, thus, do good to clean up these 450 to half a 
million sites we have out there, put them to better 
utilization. But EPA and HUD have different purposes, and I 
think we need to understand that and we need to encourage both. 
So I look forward to this process completing, but, Chairman, I 
would really appreciate it if you could look at this, and maybe 
you and I could discuss this further, because I think there are 
different objectives from different programs.
    I yield back. Thank you.
    Mr. Duncan. Well, you have made some good points, and we 
will work on it.
    Mr. Barrow is next on the minority side. You have no 
statement?
    Mr. Brown.
    Mr. Brown. Mr. Chairman, I want to talk about the cities. 
We have two cities, Charleston and North Charleston, and in 
between, about several hundred acres, is a brownfield site, and 
it is not a success story yet, but I think it is evolving into 
a real success story. Back during the war, when we had the 
shipyard, we also had an oil refinery, we had a creosote plant, 
we had fertilizer plants, we had metallurgical plants. All of 
these were pollutants.
    And today these several hundred acres, which already has 
the infrastructure, water and sewer, they have the bus routes 
going by, everything is in place, but right now it is just a 
brownfield. It is growing up a real distraction because it is a 
connect point between the City of North Charleston and 
Charleston, and you come in on I-26 and it is an eyesore.
    But the innovation of the private sector and through the 
brownfield legislation, a lot of good things are taking place, 
and I just wanted to say that I think it is a win-win, it is a 
win for urban sprawl to prevent those folks having to move away 
from the city that work in the city. So I commend this program 
and I certainly look forward to the reauthorization and the 
continuation of reclaiming a lot of these polluted properties. 
And I thank the panel for being here today.
    Mr. Duncan. Thank you very much.
    Ms. Schwartz.
    Ms. Schwartz. Well, thank you, Mr. Chairman. I will be 
brief. But I do want to just say that I look forward to the 
panel's discussion and to the reauthorization. I will say that 
representing Pennsylvania, I am really proud of the work we 
have done in Pennsylvania. I was involved as a State senator in 
the 1994 legislation, the brownfields legislation that was 
passed in Pennsylvania.
    I believe, really, we were leaders in setting the stage for 
what was then done obviously on the Federal level, and now we 
couldn't do without you I think in the cooperation that we have 
seen. So it has been hugely important to the redevelopment not 
only of our cities, but in some of our older towns and suburban 
areas.
    And, in fact, the President came to visit Conshohocken, 
Pennsylvania, which is just outside my district, to tout the 
enormous revitalization of an old industrial area that is now 
sort of a hot spot to live, work, and dine, if I can say that. 
It has really been an enormous revitalization, a great example 
to what can happen when we see that kind of revitalization in 
community. And I think as we have all heard already, we are 
really interested in seeing more of it happen. We would like to 
see more of these brownfields redeveloped, cleaned up, and to 
see if we can't do that across this Country; and certainly in 
parts of my district we are looking to make this happen.
    I do understand that Pennsylvania has a memorandum 
agreement with the EPA, our environmental department at the 
State level, which does create a sort of a one-stop shop for 
redevelopment. So one of my interests is how do you see that 
working. I think from our point of view we are pleased with 
that, that we know developers, businesses can come to us, can 
come to the State level and know that they don't have to go 
through a lot of extra paperwork; they are able to do it by 
applying at the State level and getting those approvals, seeing 
it through.
    We have an enormous commitment in Pennsylvania to make this 
work. So I am curious as to whether that is going on in other 
States, whether it should be going on in other States. How can 
we make this simpler so that more people know about it and can 
use it. So I want you to talk to that, speak to that, if you 
can.
    And my second question would be, should we get to it later, 
really has to do with what else EPA is doing, as this 
redevelopment happens in brownfields, to encourage green 
buildings, to encourage other kinds of energy saving 
conservation efforts, to be an example. If we are putting 
Federal dollars, State dollars into some of these private 
developments, what else are we doing to set the stage for how 
we can be doing even a better job in creating that example of 
energy efficiency as well.
    So I know there was a problem that did exist, that I think 
I understand was just a demonstration that did talk about green 
buildings on brownfields redevelopment. Why not more of that? 
Did it not work? Why not move ahead with some of those other 
kinds of innovations?
    So I am looking forward to hearing what we have learned to 
how we can do the reauthorization in a way that moves us 
forward and, of course, as it always comes, the bottom line is 
is funding adequate? Are we getting those dollars on the ground 
to do this quickly enough to do the redevelopment, keep open 
space preserved the way we would like to see it in many areas?
    And the third question would be just how is this fitting 
into the planning generally for some of the redevelopment in 
different communities as well? As we see communities 
redeveloping, are we seeing the redevelopment of brownfields, 
reuse of brownfields really being a part of that, or can we be 
proactive in that in suggesting that as we see some of the new 
development?
    So with those questions, Mr. Chairman, I look forward to 
hearing the panelists and to the dialogue we will have. Thank 
you.
    Mr. Duncan. Thank you very much.
    What we are trying to do is go in order in which members 
arrived here, and that means, on our side, Dr. Boustany would 
be next, Vice Chairman Boustany.
    Mr. Boustany. Thank you, Mr. Chairman. I will be very 
brief. I look forward to the testimony as we look at brownfield 
reauthorization. And I hope one area that we can look at would 
be performance measures, because I think especially in a 
program that has restricted or somewhat limited resources, 
performance measures are very important to make sure that we 
are spending those dollars wisely. So I hope this is something 
we will address perhaps during testimony or in the questioning 
period.
    Thank you. I yield back.
    Mr. Duncan. Thank you very much.
    Mr. Osborne?
    Mr. Osborne. No questions, Mr. Chairman.
    Mr. Duncan. Mrs. Kelly.
    Mrs. Kelly. Thank you very much, Mr. Duncan. I appreciate 
your having this hearing.
    Brownfields aren't just in cities. I represent the entire 
lower third of the drinking water reservoirs for New York City, 
and there are brownfields and contaminated areas that can 
present a real threat to that drinking water.
    Of particular interest to me is TCE. As I know you are 
aware, the health risks associated with TCE have continued to 
be of significant concern for me and my constituents, and I am 
really happy to see Susan Bodine here, because I know that she 
understands the drag that bureaucratic structures can have on 
getting information out.
    But I am particularly frustrated by the lack of urgency on 
the part of the EPA here in Washington to set guidelines after 
studies done by the Agency in 2001 indicated there were huge 
risks associated with TCE. They were more than originally 
thought, and it is important that we focus on getting the 
information out.
    I have raised the issue with you, Mr. Chairman, in 
committee hearings, in letters, and in private conversations. I 
appreciate your personal interest and strong commitment to 
protecting communities across the Country from public health 
risks associated with water contamination. I hope that we can 
continue working together in exhorting the EPA to provide my 
constituents with the answers they need and they are really 
anxious to have on the TCE problem.
    I am deeply concerned that the Agency is going to continue 
being very slow-footed in their response to this very serious 
problem. As we speak, the plumes are continuing to flow toward 
the reservoirs, and I am hoping, Mr. Chairman, you will agree 
this issue merits a hearing in the near future.
    Mr. Duncan. Well, certainly, Congresswoman Kelly, you have 
raised this issue, as you mentioned, several times before, and 
I can understand that, and I admire and respect your concern. 
And certainly you are correct in saying that this problem of 
the presence of hazardous contamination is not just in the 
biggest cities, but it is in areas like yours.
    The Superfund program is meant to address the issues you 
have raised, and I can assure you that I will be happy to work 
with you and to use the resources of this Subcommittee and our 
staff to be sure that the program is working appropriately and 
in a timely manner, and especially in the case of TCE 
contamination in your district. But you are really doing a good 
job on that area, calling attention to that problem, and I 
thank you very much.
    Mrs. Kelly. Thank you, Mr. Chairman. I yield back.
    Mr. Duncan. All right, thank you very much. We are very 
pleased and honored to have an outstanding panel of witnesses 
here this morning. The witnesses will testify in the order in 
which they are listed on the call of the hearing.
    That means our lead witness will be a woman that we all 
admire and respect, a former long-time staff director for this 
Subcommittee, the Honorable Susan Parker Bodine, who is 
Assistant Administrator of the Office of Solid Waste and 
Emergency Response at the U.S. Environmental Protection Agency 
here in Washington; Mr. John M. Magill, who is Deputy Director 
of the Ohio Department of Development from Columbus, Ohio; Ms. 
Terry Manning, who is the Senior Planner and Brownfields 
Coordinator for the South Florida Regional Planning Council, 
and she comes to us today from Hollywood, Florida; Mr. Jonathan 
Phillips, Senior Director of Cherokee Investment Partners from 
Raleigh, North Carolina; and Dr. Peter B. Meyer, who is 
Director of Applied Research at the Institute for Public 
Leadership and Public Affairs at Northern Kentucky University 
in Highland Heights, Kentucky.
    Thank you very much. As I have said at hearings before, 
most committees give witnesses five minutes for statements. We 
give six minutes here, but we ask that, in consideration of 
other witnesses, that you not run over that time. So if you see 
me start to wave this gavel, that means end your statement. 
Your full statements will be placed in the record and you may 
now begin your oral statements.
    Ms. Bodine.

   TESTIMONY OF THE HONORABLE SUSAN PARKER BODINE, ASSISTANT 
 ADMINISTRATOR, OFFICE OF SOLID WASTE AND EMERGENCY RESPONSE, 
U.S. ENVIRONMENTAL PROTECTION AGENCY, WASHINGTON, D.C.; JOHN M. 
   MAGILL, DEPUTY DIRECTOR, OHIO DEPARTMENT OF DEVELOPMENT, 
 COLUMBUS, OHIO; TERRY MANNING, SENIOR PLANNER AND BROWNFIELDS 
     COORDINATOR, SOUTH FLORIDA REGIONAL PLANNING COUNCIL, 
HOLLYWOOD, FLORIDA; JONATHAN PHILIPS, SENIOR DIRECTOR, CHEROKEE 
  INVESTMENT PARTNERS, RALEIGH, NORTH CAROLINA; AND PETER B. 
   MEYER, DIRECTOR OF APPLIED RESEARCH, INSTITUTE FOR PUBLIC 
 LEADERSHIP AND PUBLIC AFFAIRS, NORTHERN KENTUCKY UNIVERSITY, 
                   HIGHLAND HEIGHTS, KENTUCKY

    Ms. Bodine. Thank you, Mr. Chairman, Ranking Member 
Johnson, and members of the Subcommittee. I am very pleased to 
be here today to talk about EPA's Brownfields Program.
    As this Subcommittee well knows, policymakers began to 
focus on the issue of brownfields redevelopment about 12 or 13 
years ago. The U.S. Conference of Mayors was actually the first 
to bring this matter to my attention, and they pointed out, as 
some of you have also pointed out, that, as demographics 
changed and economies shifted, many communities found 
themselves with former industrial and commercial property that 
was now lying vacant. But they also found that they couldn't 
get investment and redevelopment into those properties because 
there was a fear of liability, particularly liability under the 
Superfund statute.
    That left the mayors with a dilemma: they have vacant 
property; they can't get the investment; and, instead, they saw 
capital being invested outside of established communities in 
former green space, and the result of this was stranded 
infrastructure in our established communities, creating the 
need for new infrastructure out in former green space. And with 
that development we would have also increased environmental 
impacts that just naturally arise from people being there, for 
instance construction and paving. Development does have an 
environmental impact.
    By putting all these issues together and focusing on them, 
the Conference of Mayors was very effective in putting together 
a coalition of redevelopers, open space advocates, community 
groups, and they brought this matter to the attention of 
Congress, EPA, States, and other policymakers. Now, the primary 
focus of their efforts was to remove the barriers to 
redevelopment, and that primary barrier was the fear of 
Superfund liability. They also successfully made the argument 
that there needed to be some Federal seed money to jump start 
redevelopment in blighted areas and to increase local capacity 
to address brownfields.
    States responded to this by establishing State voluntary 
cleanup programs such as Pennsylvania's Act 1 Program, or Act 
2, which has been very successful. EPA responded by developing 
tools such as prospective purchaser agreements, which was 
labor-intensive and site-specific, but the Agency would enter 
into agreements with new property owners and, under that 
agreement, would protect them from Superfund liability.
    EPA also entered into memoranda of agreement with States 
that had voluntary cleanup programs, and, again, Congresswoman 
Schwartz mentioned those. Those would provide comfort to 
redevelopers that, if they were complying with the State 
requirements, that EPA didn't intend to come in and establish 
different requirements or secondguess State decisions. EPA also 
began to provide seed money for brownfields redevelopment.
    Now, even though we had those administrative tools, most 
agreed that legislation was necessary. The administrative tools 
were case-by-case and resource intensive. So, again, as this 
Subcommittee knows, with strong support from this Committee, by 
Congress and by President Bush, Congress did pass the Small 
Business Liability Relief and Brownfields Revitalization Act in 
January. Well, actually, as the Chairman will remember, it 
passed, I believe on December 20th, at 4:00 a.m., nearly 5:00 
a.m., at the very end of the first session of the 107th 
Congress. And the Senate passed it after that, and then the 
President signed it in January of 2002. But after that very 
successful effort, the legislation then provided a clear 
mandate to EPA to carry out and provide the tools for 
brownfields redevelopment.
    EPA has taken great strides to implement the law. It 
required a lot of new guidelines to be issued in a very short 
time period. And now that I am on the administration side of 
the program, I recognize how complicated it is to put out 
guidelines, and they successfully were able to do that within a 
year and have a competition under the new rules that began in 
2003.
    Under the new law, there were specific criteria for how 
grants were to be awarded, and I just want to briefly describe 
that. For awarding the cleanup, the assessment, and the 
revolving loan fund grants, EPA has a process where the 
applications are reviewed by regional panels first, just to 
make sure they reach the threshold criteria; then the grants 
that meet those threshold eligibility criteria are then 
reviewed by national panels and assigned scores; and that is 
how the selections are made, they are made by the 
recommendations of experts.
    Recently, we did complete the competition for 2006. We 
received about 700 applications and on May 12th announced 
awards of $69.9 million to fund 292 grants to communities in 44 
States and 2 territories.
    The other funding that is authorized under the brownfields 
law and that EPA implements is funding to support the State 
voluntary cleanup programs. That is under Section 128 of the 
law. Now, these grants are allocated out to the States in a 
non-competitive process because the concept is to be able to 
have every State have a successful voluntary cleanup program. 
What the Agency has been doing is allocating those grants, but 
in allocating those grants we have been looking at unspent 
funds. This is part of being careful stewards of the funding 
that Congress has provided to us. We are making sure that the 
States are spending the money that is given to them and, in 
fact, are reducing their allocations dollar for dollar, if they 
haven't spent prior awards.
    The program has had tremendous results. Through EPA's 
efforts and EPA funding, there have been more than 8,000 
assessments. As the Chairman mentioned, we have leveraged more 
than $8.2 billion in cleanup and 37,000 jobs. But I also want 
to point out that that is where we have direct Federal 
participation. The vast majority of the work is being done 
actually in the States under the State programs. We estimate 
that 48,000 properties have been cleaned up through those State 
response programs, and we know that about 53,000 properties are 
currently enrolled in those programs.
    In terms of being able to work more closely with the States 
and to better understand all the cleanup activity that is 
taking place nationwide, we are working with the States to 
collect data now on their accomplishments as well.
    I now know that I have gone over my time, so I would like 
to say that I am happy to be here to discuss the management of 
the program. I am very happy to be here to start a dialogue on 
how to improve the program, both administratively and in your 
reauthorization process. Thank you.
    Mr. Duncan. I thought the least likely person to run over 
her time would be you.
    [Laughter.]
    Mr. Duncan. I can tell you that I do remember well speaking 
on the floor on that bill at 5:00 a.m. in the morning. That is 
the only time I think I have ever spoken on the floor at 5:00 
a.m. in the morning, although I did recall, thinking back, that 
many years ago I offered an amendment to another bill at 3:00 
in the morning, and I think I got the fewest votes on that 
amendment of any amendment I have ever offered, and I sort of 
made up my mind to never do it at that time of morning again; I 
don't know whether that is such a good idea to bring up 
something at that time.
    Mr. Magill.
    Mr. Magill. Good morning, Mr. Chairman and members of the 
Subcommittee. I am John Magill, Deputy Director of the Office 
of Urban Development in the Ohio Department of Development. On 
behalf of Ohio Governor Bob Taft, Lieutenant Governor Bruce 
Johnson, Director of the Ohio Department of Development, I 
thank you for the opportunity to discuss the important role of 
the Brownfields Program in Ohio's brownfield redevelopment 
strategy.
    Brownfield redevelopment is a critical element of Ohio and 
the Nation's economic security. The task of cleaning up 
brownfield property requires the collaboration of the Federal 
and State governments operating within the free market. 
Measurable success is appearing across the Country, giving an 
impetus to reauthorization of the Brownfields Program.
    Ohio has developed one of the Nation's vibrant brownfield 
programs by combining U.S. EPA grants along with Ohio's $200 
million Clean Ohio Revitalization Fund. This Federal and State 
collaboration demonstrates the value and vitality of the 
federalism model. Development has received two brownfield 
revolving loan fund and two supplemental grants. With these 
grants we have made four loans and are scheduled to close a 
fifth in July. The department is uniquely positioned to see the 
role of the grants in cleanups, economic development, and 
creation of parks.
    U.S. EPA funds were loaned to the Columbus and Franklin 
County Metropolitan Park District to conduct remediation and 
demolition activities on 16 acres of the Whittier Peninsula in 
Columbus, a historic industrial site, which will become part of 
a new 80 acre urban park. Metro Parks and the Audubon Society 
will invest more than $10 million into the development of the 
park.
    The Brownfields Program is an example of the Federal 
Government's role to facilitate commerce as envisioned by the 
founders. Commerce cannot occur on a brownfield without 
cleanup. The cost of this effort, due to changes in the 
economic fabric, must be borne by both private and public 
parties.
    To remain vibrant, the Brownfields Program should look for 
ways to strengthen and grow. The first step would be to foster 
the development of sustainable organizations. A second action 
would be to place a premium on using dollars to leverage 
private capital and act as an equity investor in projects with 
community goals.
    A way to achieve sustainable organizations is for U.S. EPA 
to recognize the difference between assessment and cleanup 
grant awardees and RLF awardees. Assessment and cleanup grant 
dollars encourage smaller communities and non-profits to 
analyze properties to determine their environmental condition 
and prepare them for redevelopment. The challenge is the grant 
amount limits the type of projects and may not be part of a 
long-term strategy.
    Underwriting the cost of cleanup and servicing loans 
requires sophistication and resources beyond that offered by 
U.S. EPA. Regional and State organizations that have a history 
of effectively undertaking economic development lending would, 
as grant recipients, complete more loans with quantifiable 
economic and community results. The Brownfields Program needs 
to examine ways to attract private capital to cleanups. A step 
on this path is promoting a variety of flexible RLF financial 
products, ranging from loan guarantees, loan deferrals, and 
balloon payments.
    The Brownfields Program, if reauthorized and fully funded, 
will catalyze innovative and dynamic redevelopment in Ohio and 
across the States.
    Thank you.
    Mr. Duncan. Well, thank you very much, Mr. Magill. Very 
fine testimony. You know, I will mention one thing, though, 
that almost nobody ever thinks about. It always sounds great 
for a politician to create a park, but we have created so many 
parks now, Federal, State, and local, that we can't even take 
care of all of them. But the main concern is that we keep 
taking land off of the tax rolls and shrinking our tax base, at 
the very time that the schools and all the other government 
agencies and departments are demanding more and more money. And 
we have got to really think about that before we just blindly 
say that creating another park is a wonderful thing.
    Ms. Manning.
    Ms. Manning. Good morning Mr. Chairman and members of the 
Subcommittee. My name is Terry Manning and, as mentioned, I am 
a Senior Planner and the Brownfields Coordinator for the South 
Florida Regional Planning Council. I am honored to be here 
today to discuss the Brownfields Program with you and how we 
have been able to utilize the EPA programs and offer some 
suggestions for the future.
    Brownfields redevelopment is a voluntary redevelopment tool 
that is being used by many local governments in the Southeast 
Florida area to help in the redevelopment of actual or 
perceived environmentally contaminated properties. In the 
Southeast Florida Counties of Miami-Dade, Broward, and Palm 
Beach, the Eastward Ho! Brownfields Partnership was created in 
1997 as a forum to bring together local governments along with 
non-profit and other governmental agencies to address 
brownfields issues. This is an area that includes approximately 
40 percent of the population of Florida and is growing.
    We are part of the larger Eastward Ho! effort which seeks 
to revitalize and improve the quality of life in Southeast 
Florida, and we are sometimes referred to as a portion of the 
urban component of the Everglades restoration. We are trying to 
lessen development pressure and urban sprawl in the sensitive 
lands in the western part of our region that are needed to 
restore the Everglades and to ensure our future regional water 
supplies.
    Over the years, the Brownfields Partnership has found the 
following obstacles to brownfields redevelopment: the lack of 
adequate funding for cleanup; concerns over environmental 
liability; the need for environmental assessment of properties; 
the uncertainty over cleanup standards; inadequate or non-
existent infrastructure systems necessary to support 
redevelopment; unfavorable neighborhood and market conditions; 
land assembly problems; the reluctance of the private sector to 
invest in distressed communities; and the time and effort 
needed to address environmental and other issues.
    To address these concerns and to assist in brownfields 
redevelopment issues, funding from EPA Brownfields Program has 
been utilized to try and address these problems. Funding under 
this program has been used to assess and clean up brownfields 
and to assist in redevelopment efforts.
    The following is a brief summary of the programs that we 
have been able to use within the Southeast Florida area, and 
again, I am referring to the three county area: we have been 
able to receive assessment project for one county, four cities, 
two regional planning councils, one community redevelopment 
area, and one tribe; we have received a revolving loan fund 
grant which has been utilized so far to loan out money to two 
for-profit businesses.
    And on Monday morning I was approached by a non-profit 
entity that it looks like we might be able to do a third loan 
with; we have received cleanup grants for two cities and one 
community redevelopment agency; we have had two job training 
grants; and we have received targeted brownfield assessment 
funding for numerous cities, and this funding is through the 
Florida Department of Environmental Protection but is actually 
EPA funding.
    Because of this funding, we have noted the following 
positive outcomes. And I am going to mention some numbers here, 
and these are for completed projects. We have more projects in 
the works. We have been able to leverage this money with $1.3 
million from the State of Florida, $10.4 million from local and 
regional governments, $31 million in private funding. And 
because of this we have been able to complete environmental 
assessments for approximately 390 sites.
    Fortunately, 75 of these sites we have found to be clean 
and do not need further remediation. Twenty sites have actually 
undergone remediation activities and are either undergoing 
redevelopment or will shortly undergo redevelopment. This has 
resulted in approximately 2,000 jobs and 600 housing units for 
very low-to moderate-income people. A total of 88 students have 
been trained under this program, with 95 percent of the 
students receiving employment in environmental fields. We have 
been able to combine the Federal and our State program and 
designated nearly 50,000 acres of land under the Florida 
Brownfields Program.
    I should also mention that without the Florida Brownfields 
Program, we would not be able to complete many of these 
activities, and the Florida Brownfields Program does have a 
Memorandum of Agreement with EPA in order to promote 
brownfields activities, and we think it has been very 
successful.
    But much remains to be done. Suggestions for the future 
include the following: providing more flexibility in the way 
EPA grants are funded, including combined grants for assessment 
and cleanup; using a rolling grant application process instead 
of a once a year process--this will allow for more timely 
access to funding--increase overall funding. We also would 
suggest streamlining reporting and other requirements.
    We also recommend looking at the brownfields loan program, 
the revolving loan fund programs to increase the amounts for 
capitalization of grants and to allow the funds to be used to 
help guarantee more private loans, which we feel may increase 
the number of loans that are made. Also, we recommend that more 
thought be given to the duplication of programs under State and 
Federal programs.
    Thank you, sir, for your time.
    Mr. Duncan. Well, thank you very much, Ms. Manning.
    Mr. Philips.
    Mr. Philips. Thank you, Mr. Chairman, members of the 
Committee. My name is Jonathan Philips, and I am Senior 
Director of Cherokee Investment Partners based on Raleigh, 
North Carolina. Thank you for the opportunity to testify in 
support of reauthorizing the Small Business Liability Relief 
and Brownfields Revitalization Act.
    Cherokee is the largest and most active private investment 
firm in the world specializing in the acquisition, cleanup, and 
sustainable revitalization of brownfields. Since inception, we 
have acquired over 520 sites across North America and Europe. 
We are privileged to be fiduciaries of institutional capital 
providers to perform this important activity. We are not aware 
of any private organization in the world that voluntarily 
cleans up more pollution.
    The Brownfields Act that we are here today to support has 
been an important first step in returning neighborhoods to 
healthy places where families can live and work. Brownfield 
revitalization catalyzes positive community transformation that 
extends well beyond the individually contaminated sites. This 
community transformation and resulting ripple effect throughout 
neighboring communities writes new chapters of hope from the 
often sad histories of economic and environmental decline and 
urban blight.
    This Act includes important tools for local communities to 
assess contamination and start planning for redevelopment, and 
it includes important provisions regarding bona fide 
prospective purchasers. The dedicated team of staff at the U.S. 
EPA should be commended for their implementation of these 
critical programs.
    A larger brownfield coalition, of which Cherokee is a 
member, has provided written testimony today detailing a number 
of specific issues that should be examined by this Subcommittee 
as it considers reauthorization. There are many good 
suggestions in that statement. We would encourage members to 
specifically explore modifications that could be made to the 
existing definition of brownfield under the Act to bring in 
sites that are currently excluded under the Section 101(39)(b).
    One example would be to enhance communities' ability to 
prioritize sites for use, eliminate currently defined set-
asides for certain types of sites--petroleum brownfields and 
sites acquired prior to the January 2002 enactment--and allow 
all brownfield sites, as defined broadly by 101(39)(a), to 
compete for program resources and those legislative enactments 
that definitionally key off of Section 101(39).
    Another example is sustainability, as mentioned by 
Representative Schwartz just a few moments ago. When we clean 
up pollution below ground, what are we doing to protect our 
environment above ground when we redevelop? Many of you know 
buildings consume roughly 50 percent of the energy in our 
Country. Let us create a positive mirror image and offer 
incentives, legislative incentives for sustainable development 
and green building on these sites so we can replicate on top of 
the sites the same environmental benefits produced by cleaning 
up what was below the ground. And this is something that we 
already practice and we look to further pursue.
    Mr. Chairman, in our mind, there is no question that this 
Act should be reauthorized. From Cherokee's perspective, we 
need to go further. If Congress wishes to seriously address 
this Nation's brownfield crisis, we must develop additional 
Federal incentives to draw private investment dollars to the 
more complex and economically less desirable sites. These are 
sites that are more complex, take longer to redevelop, involve 
significant liability and cost overruns, risks, and almost 
invariably lead to the various permutations on the same 
question that we hear so frequently from others in the 
traditional development world, which is: Why should we invest 
in this site given its risks, limitations, unknowns, additional 
costs, and brain damage required, when I can just develop the 
next farm on the proverbial ``edge of town''? Why should we 
engage in this redevelopment?
    Well, Congress has responded, not just with the Brownfields 
Act, but with important programs such as the 198 expensing 
provisions, recently created unrelated business income tax 
exemptions, and Representative Turner's proposal to create 
transferrable tax credits. Each of these holds tremendous 
promise for returning brownfield sites to productive use.
    The incentives the Federal Government provides can take 
many forms: direct funding, tax credits, loan guarantees to 
reduce the cost of debt-financed redevelopment, or other tools. 
Local and State governments can assist with expedited 
permitting and other tools to encourage brownfield 
redevelopment. What is important is that these incentives need 
to directly address the financial underpinnings of brownfield 
transactions.
    In testimony before other subcommittees, I have encouraged 
members to think about brownfields as ``under water'' or 
``above water.'' A site that is ``under water'' is a site that 
the marketplace will not redevelop on its own given the cost of 
cleanup, the value of the property in a clean state, and 
various other factors. A site that is ``above water'' is likely 
to be cleaned up and revitalized by the private sector without 
government assistance.
    And along this continuum, there are some sites that are 
barely below water. These are sites that may be redeveloped 
during a favorable economic upturn or with a slight nudge from 
a Federal, State, or local incentive program.
    Unfortunately, most of the sites we think of as brownfields 
are further underwater, many considerably so. Without 
significant public assistance, these sites will never be 
remediated by the private sector.
    It is critical to note that these terms, ``under water'' 
and ``above water'', take into account only what I will call, 
for lack of a better term, ``internal'' costs and benefits of a 
developer. They do not reflect the various public benefits that 
development would bring, such as reduced pollution, more jobs, 
reduced sprawl, or increases in tax revenues.
    So one mission of government, then, must be to focus 
particularly on those properties that are under water from a 
market perspective and above water from a public perspective. 
For those sites, we need an aggressive mix of local, State, and 
Federal programs to encourage the private markets to undertake 
the task of remediating pollution and redeveloping sites. We 
encourage Congress to take specific notice of the significant 
challenges faced by public and private actors seeking to 
perform land assembly for large brownfield revitalization, 
where master planning is the most effective way to move 
brownfield and underutilized lands from blight to robust 
productivity. Without effective tools to control brownfields or 
blighted zones, these sites will indefinitely sit.
    Having said that, we appreciate that it is extremely 
difficult to discuss brownfield incentives in the abstract. 
Without looking at actual sites and running numbers on actual 
projects, it is almost impossible to assess how well an 
incentive program will function.
    I see that my time is up. I just wanted to extend a genuine 
offer to the members of this Committee. My company is extending 
a serious offer to help you assess the reforms required for 
this reauthorization. If you have a site in your district that 
is a priority site, and even if that site does not meet our 
investment criteria, we will sit down and work with you and 
your staff to walk through our underwriting of those projects 
and help you assess in real concrete terms, real-world 
examples, what impediments exist and what challenges exist, and 
what incentives might be needed in this legislation.
    Thank you very much for your time.
    Mr. Duncan. Well, thank you very much, Mr. Philips. I think 
that might be very helpful.
    Dr. Meyer.
    Mr. Meyer. Thank you very much. Mr. Chairman, members of 
the Committee, I thank you for the invitation to join you 
today. My name is Peter Meyer. My comments today are informed 
by 14 years worth of research on brownfields--by the way, that 
is longer than the program has been in existence--conducted 
mostly with my research partner, Dr. Kristen Yount, who is a 
Professor of Sociology at Northern Kentucky University, where I 
am now. In addition to my NKU post, I direct something called 
the Center for Environmental Policy and Management at the 
University of Louisville, and I also serve as the Director of 
an EPA-funded environmental finance center there.
    For brevity today, and largely because much of this has 
been already covered by others, I am going to skip all comment 
on the successes of the program. What I want to turn to is some 
cost-effectiveness and performance measure issues that I think 
are important, and then look at some challenges and some of my 
take on them.
    I am an economist by training, and I am backing away from 
offering you any dollar figures having to do with the successes 
of the program. And the reason that I do that is that I don't 
trust the direct impact data for a variety of reasons. These 
are not specific to brownfields; they come from a general 
problem associated with economic development programs and 
evaluating them more generally; and I used to do work in that 
arena.
    The counterfactual is something that we don't know, it's 
not knowable. When we see the offer of a subsidy followed by a 
new investment, we have no way to empirically demonstrate what 
would have occurred without the incentive offer. And this has 
to do with the above water-below water that Mr. Philips just 
referenced. The value of any one incentive may be impossible to 
extract because, and, again, if you look at what Ms. Manning 
just put before you, you have multiple incentives feeding into 
any one project. So isolating the value of any one of them is 
exceedingly difficult.
    But, yet, making it even more complicated is the fact that 
the direct economic impacts of site redevelopment are in fact 
not limited to the increase in the value or the new users or 
the new jobs or the new tax revenues just on that one parcel of 
land; it spills over to other land in the entire area. And this 
makes it very, very difficult to ascribe direct economic 
benefits to any one stream of dollars.
    There are, however, other measures of the economic value of 
the Brownfields Program, and one that I want to put before you 
is something that is the accelerated rate of entry into the 
brownfields business of new firms. Some of the brownfield 
specialists that I was interviewing in the 1990's--including 
the gentleman to my right--have complained to me about the fact 
that there are too many developers. From their point of view, 
there is too much competition for those brownfield sites that 
they used to be able to get for a song. I submit to you that 
the brownfields bill played a significant role in changing the 
entire climate of brownfield reinvestment and risk perception 
on the part of those developers.
    Based on my past research, I can conservatively claim that 
the effects of the Brownfields Program on redevelopers' 
perceived risks have probably saved State and local 
governments, at a bare minimum, $100 million in the subsidies 
that they otherwise would have had to offer developers to get 
them to do the brownfield redevelopment that we have 
experienced. And this is a benefit on top of the benefits that 
we get from the redevelopments themselves.
    I should add, by the way, as we look at performance 
measures, that increasingly we have got brownfields being 
redeveloped that never enter the State programs, never apply 
for Federal money, but are being redeveloped because of that 
climate change that has been generated by this bill.
    And, finally, I should point out, with regard to those 
kinds of measures, that infrastructure utilization has 
improved. We are now more fully utilizing infrastructure that 
exists in our urban areas instead of then having to build new 
infrastructure in the rural areas. These are all valuable 
performance outcomes.
    But a variety of challenges remain. I should put on the 
table mothball sites, which are idle sites, tie up capital. 
They are basically a drain on the U.S. economy. Sites are 
mothballed because the firms that own them fear that they will 
be the deep pockets that will be tapped under the strict joint 
and several liability provisions of CERCLA if any problems or 
costs arise, no matter how far in the future.
    The new FASB rules may help drive some of these mothballed 
sites into the market. The liability shadow will remain. I 
would suggest that one of the things the Federal Government may 
want to look into is becoming a re-insurer of last resort for 
the environmental insurance industry. This is something that 
could produce significantly greater access to and more readily 
available long-term risk transfer capacity on the part of the 
environmental insurance industry that should get firms to 
release their sites to the market.
    On the other hand, we have a very big problem with our 
small sites. The vast majority of the up to a million 
brownfield sites in the United States are in fact going to be 
under a half an acre in size. Half an acre is not very big. 
Most of the brownfield redevelopment specialists generally look 
for at least 10 acres. What is the potential return to a 
municipality or other local government from taking steps to 
facilitate the remediation of a brownfield with Federal help, a 
brownfield that has depressed the economic activity and 
attractiveness of all the sites nearby, not just that one site?
    What we are dealing with here is we are dealing with 
spillovers and spillover returns that are not well enough 
recognized.
    By the way, Mr. Chairman, you can get those kind of 
spillovers from, in fact, putting a park where there was none. 
And you can get offsite benefits in terms of tax benefits. This 
is something we have all understood for decades in taxing 
permit financing.
    Minor changes in grant applications merit scoring could 
help the municipalities to think more about looking at those 
area impacts, and that is doubly important in the context of 
depressed neighborhoods, which are shot through with 
brownfields, where each one affects the other one and makes it 
that much more difficult to attract capital to any one of them. 
In that situation, local governments could play a role in 
taking title to those properties, but the new GASB standards 
are likely to make it more difficult for them to do so.
    And some Federal help in the form of liability relief from 
Federal liability for small municipalities that take title to 
sites in order to redevelop them, following the logic of the 
lender liability relief that was provided in the 1997 Budget 
Reconciliation Act, I think could be something that could be 
very, very valuable in terms of signaling to the States that 
they need to help their municipalities with liability relief.
    I thank you very much for your attention and look forward 
to your questions. And, by the way, I can empirically defend 
the statements I made. Thank you.
    Mr. Duncan. Thank you very much. Very interesting 
testimony, Dr. Meyer.
    Dr. Boustany.
    Mr. Boustany. Thank you, Mr. Chairman. This was indeed very 
interesting testimony.
    I mentioned earlier performance measures, and we know that 
EPA does report on cumulative sites addressed, jobs generated, 
cleanup, development activities, funds leveraged, and so forth. 
But what about actual cleanup and redevelopment activities, 
which should be one of the primary goals of the program, and 
also, looking even further down the line, mitigation of future 
risk? It seems to me that performance measures are linked, 
critically linked to this issue of liability and liability 
relief. I mean, certainly in my State of Louisiana, we have had 
our share of lawsuits dealing with underground water aquifers 
and things like that.
    And I was impressed, Mr. Philips, with your testimony. You 
got a little bit into some of the things you have to do as a 
private investor to shield yourself, so let me start off by 
asking you how do you minimize your liability as you go forward 
in these investments?
    Mr. Philips. Sir, the very best way to minimize liability 
when you are seeking to invest and redevelop a brownfield and 
do it sustainably is to attack the pollution quickly, literally 
spending dollars up front, first dollars, and the riskiest 
dollars, by the way, when you consider it from a real estate 
perspective. That is the single best way to mitigate one's 
liability. If you walk into a site with your eyes open and you 
know that part of this project involves cleaning up pollution, 
and you are going to assess very carefully, in advance, what 
the costs are associated with that, the liability associated 
with that site drastically reduces when you start spending 
those dollars.
    We also use other risk management techniques. Environmental 
insurance, which has been mentioned by a number of people, is 
important to our transactions, and there are two types: sort of 
a pollution liability, legal liability, and there is also a 
cost overrun product that is out in the market.
    So I would say those two would be the first ones.
    Mr. Boustany. Out of the 520 sites that you have acquired, 
are some of them small sites, or are you mostly focusing on 
large sites?
    Mr. Philips. As we have gotten larger and we have continued 
with your track record, our investors have entrusted in us more 
capital to deploy, and that has meant that we have been able to 
invest in larger sites. But that doesn't mean that there are 
individual parcels that are larger; it could be that we are 
assembling large amounts. One the gentleman mentioned, the 
project in Charleston. That is one of our projects where we 
have assembled a number of sites along the industrial neck area 
of the river, some large, some small.
    But we view brownfields as a zone, as a redevelopment zone. 
And sometimes you have to buy property outside of the 
individual sites in order to make the economics work, because 
when you transform one site, it will have that ripple effect in 
the surrounding area. And if you can capture those economics 
from the surrounding area, then you can place a bet that at the 
end of the day you are going to be return investors' capital, 
and a return on that capital as well. So that is how we think 
about things.
    Mr. Boustany. Dr. Meyer, you mentioned the small sites and 
mothballed sites, and some of the problems associated with 
those. Do you think we need to catalog these, have some sort of 
official cataloging and come up with a separate way of dealing 
with this to mitigating the economic blight that is left 
behind?
    Mr. Meyer. Well, let me start with the mothballed sites. 
Under the new rules, FIN 47, which implement the financial 
accounting standard boards--what is it?--143 ruling basically 
requiring disclosure of environmental liabilities as part of 
the asset disposal for requirements for firms in the United 
States in terms of financial accounting, that is going to 
require the firms, certainly those publicly traded, publicly 
traded firms, to disclose those liabilities. That is going to 
give us a partial inventory, if you will, of the mothballed 
sites. They are also much smaller in number than the small 
sites. So that is the easy part of the equation, if you will.
    With regard to the small sites, look, we are talking about 
hundreds of thousands of sites. We are talking about, you know, 
the dry cleaner here, what was a gas station some time before 
someplace else, we are talking about old machine shops, we are 
talking about paint shops. The retail sector is really 
responsible for the largest number of the brownfields in 
absolute numbers, not in acreage, obviously.
    There are a number of problems here. If in fact you go out 
and you label a site as a brownfield, what do you do to the 
property value of the adjacent site? Do you really want to have 
that inventory out there? I mean, this is a very, very serious 
problem in terms of the stigma that gets spread around the 
area.
    By the way, the other side, the flip side of that is 
eliminating that stigma is something that happens when you 
clean up that site, so that, in fact, if all you look at is the 
numbers, the return on that one property--same point that Mr. 
Philips just made--you have got to look at the impact on the 
adjacent properties. That is not being done by municipalities 
right now for the really, really small sites, and I think there 
is an under-investment as a result.
    But I don't think there is a cost-effective way of doing 
the kind of an inventory you are suggesting for the very, very 
small sites.
    Mr. Boustany. I was just interested in your view on whether 
it should be done. But what do we do to stimulate cleanup of 
the small sites? Do you have any ideas on that?
    Mr. Meyer. Well, the argument that I try to put forward in 
my written testimony in somewhat more detail is if in fact 
there are a couple of things that happen. First of all, we have 
got a grant application program right now, and the funny part 
about this is that there is an advantage in what I am about to 
say in the fact that it is not fully funded and we can't 
provide funding for everybody who applies. There is some 
discretion with regard to the waiting that is provided for 
different provisions and different elements of the 
applications.
    One thing that could be done is for, in fact, the Office of 
Brownfield Cleanup and Redevelopment in the grant application 
process to modify some of the language in there to provide 
greater weight and greater, if you will, points for those 
applications that come from municipalities that recognize those 
spillovers and focus on some of those smaller sites. If that is 
a sufficiently high priority, that is something that can be 
done. That sends a message to all of the other would-be 
applicants, potential applicants that puts the agenda out on 
the table more, because there is a certain amount of educating 
the needs to be done to get this to be done.
    We could be doing more in the way of, you know, technical 
assistance and that kind of thing to local governments in that 
regard. But they are very, very difficult to do, and the other 
problem you run into is at the State level, in many instances--
well, sir, you are from New Jersey, if I remember correctly.
    In the State of New Jersey, if in fact an abandoned gas 
station, for example, becomes tax delinquent and it moves into 
the ownership of a municipality, that municipality is not 
liable for that cleanup, legally, within the State of New 
Jersey. But if in fact that municipality buys that small site 
to do the kind of area-wide redevelopment, the site assembly 
kind of logic Mr. Philips just talked about, then the 
municipality becomes liable.
    Perhaps if the Federal Government waived that liability for 
those municipalities, that might send the message to the States 
maybe you guys ought to be doing that too. And that is another 
way of encouraging the municipal action, because what is 
absolutely critical, as you pointed out earlier, Mr. Chairman, 
in your opening remarks, is that partnership between the 
Federal Government and local governments with regard to 
brownfields.
    Mr. Duncan. All right. Well, you are giving very good 
answers, Dr. Meyer, but we are going to have a vote here in 
just a few minutes, and I want to go to Mr. Pascrell and give 
him a chance.
    Mr. Pascrell. Well, Mr. Chairman, they were excellent 
questions and great responses for the Committee.
    Ms. Bodine, you mentioned in your testimony, you talk about 
the landlord liability protections. Yet, we know that a final 
rule is being issued in 2006, it goes into effect, I think, in 
November, dealing with liability protections.
    Could you tell us what the present system is and what we 
will move to in November of 2006 with regard to the general 
question of liability? Because that is a major issue in all the 
development in all of these properties, and many municipalities 
need some technical assistance to deal with that, as I see it. 
Would you agree, the rest of the panel?
    Ms. Bodine. Congressman, I am going to have to answer that 
question for the record. I am embarrassed to say that I need to 
check and--I don't want to mislead you. I want to make sure 
that my answer is accurate. So I will provide that for the 
record.
    Mr. Pascrell. Would you do that, please?
    Ms. Bodine. Yes, I will.
    Mr. Pascrell. And would you also provide for the record the 
States that are not spending what they were allotted?
    Ms. Bodine. Yes, we have that.
    Mr. Pascrell. There is such an animal, right?
    Ms. Bodine. Yes, that is accurate.
    Mr. Pascrell. And you will present that to the Committee?
    I would like to ask, Mr. Magill, what about the question I 
presented before about allowing communities to apply for 
assessment and cleanup grants with one application? What about 
that idea, does that make sense to you? And anybody else can 
jump in. Make your answers as brief as possible, please.
    Mr. Magill. Thank you, Representative Pascrell, Mr. 
Chairman. I believe that the combining of assessment and 
cleanup awards is a viable idea. The challenge is it requires a 
trigger mechanism, because some of the sites will turn out to 
not be as dirty as has been anticipated, and may be able to 
move to redevelopment in a more timely fashion without the 
expenditure of any cleanup or lower levels of cleanup than had 
been anticipated. So the application process and rules would 
have to allow for what we call in Ohio sometimes a stop-start. 
We stop, we evaluate the phase 2 data, and then you would move 
on to do the cleanup.
    Mr. Pascrell. Thank you.
    What about the other members of the panel? Yes, Ms. 
Manning.
    Ms. Manning. I think the combining of a cleanup and 
assessment grant would be a great idea in many cases. I can 
give you specific examples of projects where a city has had to 
apply for an assessment grant one year and then has had to wait 
one or two years to go for a cleanup grant; whereas, if they 
had been able to go from assessment to cleanup, it would have 
had redevelopment on the ground probably in a year.
    Mr. Pascrell. I had to handle that kind of frustration, and 
what happens, if the wait is so long, it debilitates the 
project, many times, and people walk away.
    Ms. Manning. Right. And also sometimes there is no 
guarantee that if you get an assessment grant, you will get a 
cleanup grant, and that could kill a project.
    Mr. Pascrell. How about the other members of the panel?
    Mr. Meyer. I think that the one comment that should be made 
I think is that there are two things that can get done with 
this with assessment grants: one way is doing individual sites, 
another way is trying to do a much more blanket job, for 
example, on very, very small sites. Let us go out and assess as 
many tiny sites as we possibly can with the money in hopes that 
we find that all of them are clear, or that 80 percent of them 
don't require any additional work.
    So we are really looking at those assessment grants to play 
two different roles: one is the first step on properties that 
are already targets, and the other one is that very, very broad 
base scattered site thing. And the issue then is we would like 
the assessment grants to be able to serve both purposes.
    Mr. Pascrell. So there is something we can do in the 
process situation to make this a lot easier.
    My final question is this, Mr. Magill. Should Congress 
consider making it easier for communities to apply for cleanup 
grants for properties that they don't yet own? This is a major 
problem in New Jersey, and I am sure it is a major problem in 
other areas. What do you think about that idea? What is the 
pluses, what is the minuses.
    Mr. Magill. Congressman, Mr. Chairman, I think there are 
some pluses. The challenge--and this is what we do in Ohio in 
our Clean Ohio Revitalization Fund--is that you have to have 
adequate assessment information submitted at the time of 
application. So the seller or the party who currently owns the 
property must be willing to provide to the applicant--that EPA 
will evaluate--a time on the site to conduct adequate 
environmental due diligence, phase 1 and in the invasive phase 
2, soil samples and groundwater samples. So I think the answer 
is yes, and it requires trigger mechanisms to ensure its 
success.
    Mr. Pascrell. Anyone else? Mr. Philips?
    Mr. Philips. I would agree that consent and collaboration 
and cooperation of the seller is really vitally important on 
that issue. And I think you could easily run into a situation 
where you have the same problem with mothballed sites, which is 
that because of the concern for bringing daylight to a 
particular problem of liability, that the risk outweighs the 
reward, and, therefore, you might have fewer applicants. But I 
think if you have the cooperation of the seller, I think it is 
a wonderful idea.
    Mr. Pascrell. Many of these communities are reluctant to do 
this before they own the property, because they say once we own 
the property and the questions of liability occur, what happens 
if we find that the situation is far worse than we ever thought 
it to be? Then what? So I am saying to you there are still more 
pluses than minuses in the communities being allowed to apply 
for this money even before they own it. Is that what I am 
hearing?
    Mr. Philips. I think it is an important option to have.
    Mr. Pascrell. Ms. Bodine, what do you think?
    Ms. Bodine. Well, you are talking about a statutory 
authority change. We don't have the authority now. But I would 
also point out that the issue that you are raising comes up in 
two contexts. You are addressing it in the context of wanting 
to do the work before the entity is going to acquire the 
property.
    It also comes up in the context of entities that don't want 
to acquire the property at all but they are, in effect, good 
Samaritans and want to do work on the property without entering 
the ownership chain. So the ownership requirement has raised 
issues in the program.
    Mr. Pascrell. Thank you.
    Thank you, Mr. Chairman.
    Mr. Duncan. Thank you, Mr. Pascrell.
    Ms. Schwartz.
    Ms. Schwartz. Thank you. I just wanted to follow up. I know 
some of my comments in the opening were addressed during your 
testimony, but I was wondering if you could be more specific. 
And I think, Mr. Philips, you specifically addressed the issue 
I raised about green buildings. Maybe others might want to 
briefly just answer some of these questions.
    What more can we do or should we be doing in moving forward 
in being able to be an advocate--but I want to be stronger than 
that--about green buildings? We are using public dollars here 
to clean up brownfields; we are going to put new entities 
there. We are all involved in those stages. There was this 
pilot project.
    Really, my question is what more should we be doing? Should 
we give priorities to a project that is going to build green 
buildings? Do they get priorities now in any of the programs 
that you are involved in? Should we set more requirements for 
the kind of buildings that get built on brownfields? Do you 
feel like that would be too many strings attached?
    Basically, my question is, what more could we be doing 
through the reauthorization particularly for EPA or on the 
local level for us to be able to be setting standards for the 
kind of development that goes into brownfields?
    Let us step it up a notch. We know there is much more that 
we want to do just for the brownfields if we were to redo it 
just the same way. But now that we know so much more, there is 
so much more technology available, so many more tools, as we 
say, in our toolbox to create these sort of more energy 
efficient buildings, should we not use them in this process?
    Mr. Philips. I think that is a very astute question. If I 
could just begin by saying that we have noticed that there is a 
strong analogy between the economics of brownfields and the 
economics of green building, in that both involve complexities, 
both potentially involve greater costs, and both are in the 
public good; to clean up brownfields, to engage in more green 
building.
    We at Cherokee have launched our green initiative, where we 
were, frankly, ashamed of ourselves, because we were cleaning 
up a lot of brownfields and we hadn't been paying as much 
attention to the build-out on these sites, which results in 
billions and billions of dollars, sometimes on a per project 
basis.
    So what can we do about that? Well, as landowners, we can 
begin to mandate that certain green building standards and 
sustainable design features are implemented. We have a national 
home builder management green home that we are doing with the 
National Association of Homebuilders as a showcase for that 
exact reason.
    But we do recognize that just as municipalities today are 
giving more and more incentives, accelerated permitting for 
green buildings--and also for brownfields in certain cities--we 
could imagine a situation where greater economic incentives, 
perhaps, were available if, in addition to performing the 
cleanup under the ground, you could ensure that a certain 
standard of green building or sustainable design occurred on 
top of that site. That would be, from our perspective, a 
wonderful idea.
    Ms. Schwartz. You raised a really good suggestion, which is 
if you just accelerated the process, I think that saves dollars 
along the way. If you know that you are going to get your 
approval process done three months sooner, then you just saved 
the developer potentially quite a bit of money that then could 
be used in ways that would really be more sustainable and more 
energy efficient.
    I guess I would throw it back to the EPA and whether you 
would be open to adding some of that kind of language to create 
the incentives, financially or just logistically, as kind of 
suggested, as a financial fallout. Would you be open to doing 
something like that?
    Ms. Bodine. First, I want to say that EPA supports green 
buildings. In fact, EPA has just moved into some new GSA space 
at Potomac Yards over in Crystal City, which is a brownfield. 
The building is a green building; it has natural lighting, it 
has low flow toilets, it is energy efficient in its use, and it 
has a rain garden on the roof. So it is one of these green 
buildings.
    In terms of a preference, well, I guess you have raised two 
issues, one is preference and funding for green buildings, and 
one is EPA setting standards. On the first, I would respond by 
noting that the ranking criteria that Congress put into place 
for allocating funding under brownfields are broad criteria, 
one of which, of course, is environmental benefits. And the 
fact that your redevelopment project is a green building then 
allows it to rank higher on that criteria.
    So I would suggest to you that the ranking criteria already 
work and capture that benefit. And then avoid the problem that 
I would have with creating a set-aside for a specific type of 
environmental benefit. I think that when you are dealing with 
nationwide problems and trying to address them, you don't want 
to say, OK, we will spend so much money on this benefit and so 
much money on that benefit.
    Ms. Schwartz. Yes. I hadn't suggested a set-aside, it was 
really more about whether, maybe you want to look at this as to 
whether the criteria is strong enough, whether there might be 
some additional incentives or a bit more proactive in 
acknowledging the future benefits of this, so that it may even 
be that a project that is on its way might think about doing 
this. It was just suggested by Mr. Philips that he had to sort 
of step back himself, as a developer, and say we didn't 
initially think of that.
    Maybe if someone, during this process, has said, you know, 
we really love your project. If, by the way, you also would 
look at some of these other aspects, that would enhance the 
project. I don't know if there is that opportunity for that 
kind of dialogue to go on, but, again, sometimes an incentive, 
extra few points on a scale can create that kind of incentive. 
It is not to tie any hands or to be too specific as far as 
location, but it is more to create the incentives, create the 
information to be able to make it financially feasible to do 
some of these things up front that later on we say why didn't 
we think of that, why didn't we do it when we were building 
this building.
    Ms. Bodine. Right. I think we can certainly make people 
aware that those environmental benefits count, and should count 
in the ranking criteria.
    Ms. Schwartz. OK, thank you. And I think my time is up.
    Thank you, Mr. Chairman.
    Mr. Duncan. Thank you very much, Ms. Schwartz.
    Ms. Johnson.
    Ms. Johnson. Thank you very much, Mr. Chairman.
    Ms. Bodine, when Congress passed the brownfields law, it 
determined that the ratio of assessment and cleanup dollars 
program should be 4 to 1 in favor of assessment and cleanup, 
and I think I heard in your testimony where you indicate the 
ratio is down to 1.4 to 1. Is that correct?
    Ms. Bodine. Are you talking about the funding and----
    Ms. Johnson. Cleanup versus administrative costs. The 
grants.
    Ms. Bodine. The grants vary from year to year in terms of 
the targets and how many assessment targets there are versus 
how many cleanup targets. So your statistics I assume are based 
on a particular year?
    Ms. Johnson. Well, the grants for assessment and cleanup 
are funded at 35 percent of the authorized level, but the 
grants to State programs are funded 99 percent of the 
authorized level.
    Ms. Bodine. I misunderstood your statement. OK. Those 
authorizations are separate authorizations. The law doesn't 
actually establish a ratio, a funding out of a single 
authorization, but establishes two separate authorization 
ceilings for the 128 authority and then the 104(k) authority.
    Ms. Johnson. Do you know why one is fully funded and the 
other one isn't?
    Ms. Bodine. There is a recognition that a great deal of 
cleanup activity is going on in the State programs that are 
funded under the Section 128 program, so when we fund the State 
cleanup programs, we are not funding just individual projects, 
we are funding a program that then generates many cleanups.
    So we want to do both, but when you look at the whole 
concept of leveraging, by funding capacity, you are then 
creating an institution that is sustainable and continues 
cleanups on an ongoing way. By funding a project, you are 
creating a cleanup in a single community, but then when the 
project is done or when the money is used, that doesn't sustain 
and roll over into another project, except where we have the 
revolving loan fund.
    Ms. Johnson. Do you have any figures on that in terms of 
the investment versus the return?
    Ms. Bodine. What I have are the estimates that I provided 
in the testimony. But we are currently in the process of 
changing the agreements that we have with States, the funding 
agreements so that they will be required to report back to us 
exactly the data on what their progress has been and what they 
are achieving with the funding so that we will then have hard 
data on that.
    Ms. Johnson. Do you know about when you might have that? I 
am just curious.
    Ms. Bodine. Well, the change in the form is pending 
approval. I mean, we have done all the work. I don't have an 
estimate right now, but I can certainly get back to you with 
one.
    Ms. Johnson. Thank you very much.
    Mr. Duncan. All right, thank you, Ms. Johnson.
    Ms. Bodine, you can see there has been a lot of interest 
among members today and a lot of support for the work that is 
being done through this program. Based on your discussions with 
officials at EPA since you have been there and your discussions 
with the staff of the Appropriations Committees and others, and 
officials within OMB and the Administration, do you see similar 
support? Is the EPA happy with this program and do you think 
that they are going to push for greater funding for this 
program in the future? And do you see that same willingness to 
recommend more in this area by the Administration and by the 
Appropriations Committees?
    Ms. Bodine. First, yes, I do hear strong support for the 
program within the Agency, within the Administration, as well 
as in Congress. Notwithstanding that strong support, the 
appropriations history for the program has been steady and it 
has been at about $160 million a year. And after asking for 
higher funding over a series of years and being told no, in the 
2007 budget request EPA decided to take no for an answer and 
request the funding that has been provided. So that doesn't 
mean any less support for the program, but a recognition of 
Congress' willingness to fund at a particular level, as well as 
what Congress has established as priorities across the board.
    Mr. Duncan. Well, I guess one thing I might suggest or 
might encourage is that perhaps some of the people involved in 
the appropriations process should be perhaps told a little more 
forcefully about the enthusiasm at EPA for this program, if it 
is there, and perhaps, more importantly, given specific 
examples, understandable examples of what has been done and the 
progress that has been made through this program.
    One thing that Ms. Johnson may have been getting at about 
the administrative costs, I am told the EPA currently is using 
about $25 million of its own administrative expense budget to 
help administer this program or oversee these grants. Does this 
compare or how does this compare to the other administrative 
costs in the department? Are we spending too much to administer 
these grants, do you think, or what is the situation in that 
regard?
    Ms. Bodine. I think the situation is evolving. What we 
have, remember, when the program started it was not an 
authorized program and a smaller program with smaller dollars. 
What we have now is a statute with a specific mandate and also 
specific criteria, which means that we follow those criteria 
and have to use FTE to make sure that we are complying with the 
law.
    So we have EPA employees who are doing the evaluation of 
the grant proposals, ranking them so that we are responding to 
Congressional intent, in terms of putting projects forward, and 
then also managing those grants once they are given out to 
ensure that the money is spent. That has been discussed this 
morning. We do have to make sure that funds are not misspent. 
And also to do grant closeouts so that, after the project is 
completed, we make sure that the money was spent for its 
intended purposes.
    There is a tension between the good management and good 
stewardship of Congress' money and yet that creates oversight 
costs. And in looking at that, I recognize the tension.
    Mr. Duncan. Mr. Philips mentioned a few minutes ago this 
coalition of organizations involved with brownfields, and they 
have suggested some ways to simplify the funding and grant 
process, including the rolling of grant applications, 
eliminating EPA approval of brownfield loans, streamlining 
reporting requirements, and so forth. What do you think about 
some of those suggestions?
    Ms. Bodine. I am going to respond, but I also would welcome 
a continuing dialogue on these issues, because I am not going 
to say yes/no. I just want to point out the issues. On the 
rolling of applications, as I mentioned, there are statutory 
criteria and a process for ranking grants, which we do on an 
annual basis. If we had to do that on a rolling basis, I don't 
know how we would be able to rank projects against each other 
to appropriately divide up the funding.
    On the reporting requirements, we are trending the other 
way because of the desire to get a better understanding of the 
environmental outcomes, and we are asking grant recipients to 
report not just on the number of properties cleaned up and the 
number of properties assessed, but we are proposing to change 
our forms to have them report, in addition, on the contaminants 
addressed, the acres addressed, the media affected, more of the 
environmental details, again, so that we have a better idea of 
what is going on and what we are achieving, what the outcomes 
are for the funding.
    So we recognize that that creates a burden. So, again, we 
have to balance increased information for good use of resources 
against increased burden.
    And you had a third one, which I have now forgotten what it 
was.
    Mr. Duncan. Well, the third one was eliminating the EPA 
approval of brownfield loans.
    Ms. Bodine. In the RLF process, those loans are issued by 
the State or local RLF programs. EPA's role should be to make 
sure that they have a good program, and not to review every 
loan.
    Mr. Duncan. Mr. Philips, what do you think about that 
trending in the other direction, towards more reporting on the 
actual results or accomplishments that Ms. Bodine just referred 
to?
    Mr. Philips. Well, just starting with Ms. Bodine's first 
comment regarding the rolling applications, I think there may 
be some logistical ways to overcome the complexity associated 
with having a rolling. Other programs in Federal Government 
allow sort of an objective scoring opportunity, and there could 
be an allocation for different periods of time. Even if it is 
not rolling, you could break it out and there could be an 
allocation of capital for each of those. So there may be ways 
to get around that.
    There was another.
    Mr. Duncan. Well, when she said that they are trending 
towards more reporting being required on the actual results 
instead of just the assessment and the cleanups and so forth. 
In other words, as I understand it, what you are talking about, 
you are requiring more information on the end, as far as the 
results, rather than on the beginning?
    Ms. Bodine. We are proposing to do that, yes, that is 
accurate. What we require now is number of properties assessed, 
number of cleanups.
    Mr. Philips. I think that is a great trend. We would like 
to see more of that. We would like to see some objective 
performance metrics on the back end that may be tied to maybe 
recapture, even. In other words, if you don't perform up to a 
certain point, if you don't eliminate the pollution or if you 
don't remediate appropriately or if you don't redevelop to 
create enough jobs or enough new tax revenue, then maybe some 
of that money is recaptured. So that would be an important way 
to, because we really are not, we can improve in the way we are 
looking at the results of some of these projects.
    Mr. Duncan. Well, I have got many other questions, 
including questions about so-called mothballed sites, many 
other things, but, unfortunately, they are going to have to be 
submitted to you for inclusion within the record, because you 
just heard the second buzzer go off and we have got to go to 
the floor for some votes.
    But I will tell you this: there is a lot of interest in 
this, and you have been a very informative, very interesting 
panel, and I certainly appreciate your assistance on this, and 
will appreciate also your further submission of answers and 
materials for the record of this hearing. But that will 
conclude the hearing at this point.
    [Whereupon, at 11:45 a.m., the subcommittee was adjourned.]

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