[House Report 108-22]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 108-22
======================================================================
BROWNFIELDS REDEVELOPMENT ENHANCEMENT ACT
_______
March 5, 2003.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Oxley, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 239]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the
bill (H.R. 239) to facilitate the provision of assistance by
the Department of Housing and Urban Development for the cleanup
and economic redevelopment of brownfields, having considered
the same, report favorably thereon without amendment and
recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for Legislation.............................. 2
Hearings......................................................... 3
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 3
Performance Goals and Objectives................................. 3
New Budget Authority, Entitlement Authority, and Tax Expenditures 4
Committee Cost Estimate.......................................... 4
Congressional Budget Office Cost Estimate........................ 4
Federal Mandates Statement....................................... 6
Constitutional Authority Statement............................... 6
Applicability to Legislative Branch.............................. 6
Executive Branch Correspondence.................................. 6
Section-by-Section Analysis...................................... 7
Purpose and Summary
H.R. 239, the Brownfields Redevelopment Enhancement Act,
increases access to brownfields redevelopment funds for
America's small communities by de-linking section 108 loan
guarantees from HUD's Brownfields Economic Development
Initiative (BEDI) grants. The bill also authorizes HUD to
establish a pilot program for a common brownfields
redevelopment loan pool.
Background and Need for Legislation
There is widespread consensus over the need to cleanup an
estimated 500,000 ``brownfield'' sites across the country.
Brownfield sites are those where redevelopment is complicated
by potential environmental contamination, but that are less
seriously contaminated than those covered under the Superfund
Act (Public Law 96-510, as amended). Many believe that by
promoting the redevelopment of these sites and revitalizing the
communities around them, local jurisdictions would improve the
quality of life and the environment in these areas.
Both HUD and the Environmental Protection Agency (EPA)
currently administer brownfield programs, with EPA focusing on
assessment and cleanup and HUD focusing on redevelopment. HUD
administers grants through a program called the Brownfields
Economic Development Initiative program, which has been helpful
for large communities but which carries certain conditions that
make smaller communities hesitant to apply for program funds.
During the 107th Congress the Committee considered H.R.
2941, the Brownfields Redevelopment Act of 2001. The bill was
supported by HUD and by the Administration. Significantly, the
FY 2003 HUD budget request submitted to the President proposed
decoupling the brownfields program from the section 108 loan
guarantee program to attract more participants. This mirrored
the initiative taken in H.R. 2941.
A hearing was held on H.R. 2941 on March 6. 2002. Witnesses
who spoke in favor of the bill included The Honorable Roy
Benardi, HUD's Assistant Secretary for Community Planning and
Development; The Honorable Lydia Reid, Mayor of Mansfield,
Ohio; The Honorable Frederick M. Kalisz, Jr., Mayor of New
Bedford, Massachusetts; and representatives of the National
Association for County Community and Economic Development,
National Association of Homebuilders and National Brownfields
Association.
On June 4, 2002, the House passed H.R. 2941 by a voice vote
under suspension of the rules. No action was taken in the
Senate.
Presumably because of budget constraints, the 2004 HUD
budget proposes the elimination of funding for the BEDI
program. The Committee believes that this funding should be
restored. While the Environmental Protection Agency administers
some programs to revitalize brownfields, the Committee believes
that HUD should not vacate its own role in cleaning up these
blighted sites. The BEDI program is a powerful tool for
communities interested in brownfields redevelopment, and
fostering a partnership with the EPA will be helpful for both
agencies and for our nation's urban areas.
Like it's predecessor, H.R. 239 focuses on providing access
to capital for local entities that traditionally have had
trouble obtaining financing for brownfields redevelopment
activities. Most notably, H.R. 239 eliminates the requirement
that local governments obtain section 108 loan guarantees as a
condition to receiving BEDI grant funding. De-linking BEDI
grants from section 108 loan guarantees is important because
some small cities have great difficulty in securing or are
unable to secure those guarantees.
H.R. 239 also establishes a ``Pilot Program for National
Redevelopment of Brownfields.'' With this authority, the HUD
Secretary will be able to fund a common pool for economic
development loans available to eligible local governments and
distribute these loans on a competitive basis.
The Committee intends that HUD will continue its current
practice of consulting with other federal agencies in carrying
out the Department's remediation and redevelopment activities
under its brownfields program.
Because of concerns over agency coordination of brownfields
site cleanup, the Committee also believes that HUD should
continue to defer to the federally directed and funded remedial
cleanup activities of the Environmental Protection
Administration, and other applicable Federal agencies, which
are underway or about to occur, in highly contaminated areas.
This includes cleanups covered by the Comprehensive
Environmental Response Compensation and Liability Act (CERCLA,
or Superfund), the Resource Conservation and Recovery Act, the
Federal Water Pollution Control Act, the Toxic Substances
Control Act, and the Safe Drinking Water Act. Further, HUD will
continue to respect orders issued by EPA, and others, pursuant
to their jurisdiction over highly contaminated areas, in
carrying out the Department's brownfields program.
Hearings
No hearings were held on this legislation in the 108th
Congress.
Committee Consideration
The Committee on Financial Services met in open session on
February 13, 2003 and ordered H.R. 239, the Brownfields
Redevelopment Enhancement Act, reported to the House with a
favorable recommendation, without amendment, by a voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. No
record votes were taken in conjunction with the consideration
of this legislation. A motion by Mr. Oxley to report the bill
to the House with a favorable recommendation was agreed to by a
voice vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee made findings that are
reflected in this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
The Department of Housing and Urban Development will use
the authority granted by this legislation to accelerate and
improve the redevelopment of brownfields sites.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of budget authority, entitlement authority, or
tax expenditures or revenues contained in the cost estimate
prepared by the Director of the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 25, 2003.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
U.S. House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 239, the
Brownfields Redevelopment Enhancement Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Susanne S.
Mehlman (for federal costs), and Greg Waring (for the state and
local impact).
Sincerely,
Douglas Holtz-Eakin,
Director.
Enclosure.
H.R. 239--Brownfields Redevelopment Enhancement Act
Summary: CBO estimates that implementing H.R. 239 would
cost $96 million over the next five years, assuming
appropriation of the necessary amounts. Of this amount, $65
million would be used by the Department of Housing and Urban
Development (HUD) to provide grants to local and tribal
governments to support the environmental cleanup and economic
development of brownfield sites. (Brownfields are properties
where the presence, or potential presence, of a hazardous
substance complicates the expansion or redevelopment of the
property.)
The remaining $31 million of the bill's estimated cost of
$96 million would be used by HUD to establish a pilot program
to encourage more communities to support redevelopment efforts
at brownfield sites. Under such a program, communities would
use their section 108 loan guarantee funds in conjunction with
a brownfields grant to make loans to third parties who are
interested in redeveloping brownfield sites. In turn, HUD would
pool together such loans and then use the majority of the
appropriated funds to establish a shared loss reserve for those
new loans. Participating communities would then no longer have
to use their community development block grant (CDBG) funds to
pay for defaults on such loans, and they could receive a share
of this reserve after any default payments are made.
Enacting H.R. 239 would have no impact on direct spending
or receipts.
H.R. 239 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would provide benefits to local and tribal governments. The
grant programs in the bill would provide benefits to local and
tribal governments engaged in the redevelopment of brownfield
sites.
Estimated cost to the federal government: The estimated
budgetary impact of H.R. 239 is shown in the following table.
The costs of this legislation fall within budget function 450
(community and regional development).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------
2003 2004 2005 2006 2007 2008
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Brownfields Redevelopment Spending Under Current
Law:
Budget Authority \1\............................ 25 0 0 0 0 0
Estimated Outlays............................... 20 21 19 14 8 5
Proposed Changes
Brownfields Redevelopment Grants:
Estimated Authorization Level................... 0 25 25 25 25 25
Estimated Outlays............................... 0 1 6 14 20 24
Pilot Program:
Estimated Authorization Level................... 0 11 11 11 0 0
Estimated Outlays............................... 0 2 6 9 9 5
Total Changes:
Estimated Authorization Level................... 0 36 36 36 25 25
Estimated Outlays............................... 0 3 12 23 29 29
Brownfields Redevelopment Spending Under H.R. 239:
Estimated Authorization Level \1\............... 25 36 36 36 25 25
Estimated Outlays............................... 20 24 31 37 37 34
----------------------------------------------------------------------------------------------------------------
\1\ The 2003 level is the amount appropriated for that year for the Brownfields Redevelopment Program.
Basis of estimate: For purposes of this estimate, CBO
assumes that the bill will be enacted before the start of
fiscal year 2004 and that necessary amounts will be
appropriated for each fiscal year. Estimated outlays are based
on historical spending patterns of similar HUD programs.
CBO estimates that HUD would use an appropriation of $25
million a year over the 2004-2008 period to provide grants to
public entities for assistance in the cleanup and redevelopment
of brownfield sites. The appropriation level has been set at
$25 million for each if the last six years. Enacting this
legislation also would remove the requirement that brownfield
redevelopment grants be used in conjunction with section 108
community development loan guarantees.
According to HUD, it would take about three years to
implement a pilot program aimed at encouraging additional
redevelopment efforts at brownfield sites. Based on the number
of communities likely to participate and on previous HUD
proposals to establish such a pilot program, CBO estimates that
HUD would need $11 million annually over the next three years.
If appropriated, we estimate that such funding would be spent
over the next six years at rates similar to the disbursement
rate for section 108 loan guarantees.
Intergovernmental and private-sector impact: H.R. 239
contains no intergovernmental or private-sector mandates as
defined in UMRA. Local and tribal governments would benefit
from a national brownfield pilot program, the clarification of
brownfield redevelopment as a CDBG activity, and the decoupling
of brownfield grants from the section 108 loan guarantee
program. Such changes would provide grantees more flexibility
in using federal funds. Any costs associated with participating
in the grant and pilot programs would be voluntary.
Estimate prepared by: Federal Costs: Susanne S. Mehlman.
Impact on State, Local, and Tribal Governments: Greg Waring.
Impact on the Private Sector: Lauren Marks.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional Authority of Congress to enact this legislation
is provided by Article 1, section 8, clause 1 (relating to the
defense and general welfare of the United States), and clause 3
(relating to the power to regulate foreign and interstate
commerce).
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Executive Branch Correspondence
The Committee is including the following executive
correspondence on similar legislation from the 107th Congress
as it also applies to the bill:
Department of Housing and Urban Development,
Assistant Secretary for Community Planning and
Development,
Washington, DC, February 25, 2003.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
U.S. House of Representatives, Washington, DC.
Dear Mr. Chairman: The Department is supportive of H.R.
2941 (Brownfields Redevelopment Enhancement Act), the principal
purpose of which is to delink the Brownfields Economic
Development Initiative (BEDI) grant program from the Section
108 Guaranteed Loan program. The impact of delinking the BEDI
is that it would allow more communities to participate in the
program and have access to funds for the redevelopment of
brownfields. Also, we think that by removing the requirement
that BEDI grant recipients also utilize Section 108 loan funds
in the same project, the grant funds will be utilized faster
and projects will be revitalized sooner.
The definition of brownfields that HUD currently uses is,
``abandoned, idled, or underused real property (including
industrial and commercial facilities) where expansion or
redevelopment is complicated by real or perceived
contamination.'' This definition has been successfully used by
HUD for many years.
HUD prohibits the use of grant and/or loan funds for
restricted areas in its current, and previous, Notice of
Funding Availability (NOFA), as follows:
BEDI grant funds shall not be used in any manner by
grantees to provide public or private sector entities
with funding to remediate conditions caused by their
own actions, where the public entity (or other known
prospective beneficiary of the proposed BEDI grant) has
been determined responsible for causation and
remediation by order of a court or a Federal, State, or
local regulatory agency, or is responsible for the
remediation as part of a settlement approved by such a
court or agency.
Applicants may not propose projects on sites, which
are listed or proposed to be listed on EPA's National
Priority-List (NPL). Further, applicants are cautioned
against proposing projects on sites where the nature
and degree of environmental contamination is not well
quantified or which are the subject of on-going
litigation or environmental enforcement action.
We believe the NOFA--as the regulatory instrument--is the
appropriate place to provide further delineations regarding
eligible and ineligible sites and provides clear guidelines on
eligibility for the program. In order to ensure the integrity
of these guidelines, HUD will continue to consult with other
Federal agencies in carrying out the Department's brownfields
remediation and redevelopment activities.
Sincerely,
Roy A. Bernardi.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section provides the short title of the bill, the
``Brownfields Redevelopment Enhancement Act.''
Section 2. Findings and purposes
This section sets forth certain findings regarding the
benefits of brownfields redevelopment and a change to current
HUD programs that would enable communities to more effectively
work with HUD on brownfields redevelopment. This section also
establishes the purposes of the Act.
Section 3. Brownfields Development Initiative
This section amends title I of the Housing and Community
Development Act of 1974 (42 U.S.C. 5301 et seq.) to allow the
Secretary to make grants to public entities for projects and
activities to assist the environmental cleanup and economic
development of brownfield sites. Grants will be made (a) based
on application procedures established by the Secretary; (b)
only for activities specified in section 108(a); (c) with
consideration of the extent of financial leveraging involved in
funded projects; and (d) without the necessity of a section 108
loan guarantee. Appropriations are authorized for grants for
each of fiscal years 2004, 2005, 2006, 2007 and 2008.
Section 4. Clarification of Brownfields redevelopment as eligible CDBG
activity
This section makes a technical correction to title II of
the Department of Veterans Affairs and Housing and Urban
Development, and Independent Agenicies Appropriations Act, 1997
(Public Law 104-204; 110 Stat. 2887). This section also amends
section 105(a) of the Housing and Community Development Act of
1974 (42 U.S.C. 5305(a)) to include environmental cleanup and
economic development activities related to brownfields projects
in conjunction with the appropriate environmental regulatory
agencies.
Section 5. Pilot program for national redevelopment of Brownfields
This section amends section 108(q) of the Housing and
Community Development Act of 1974 (42 U.S.C. 5308(q)) by
providing that the Secretary may establish a pilot program to
develop, maintain, and administer a common loan pool for
economic development loans to eligible public entities.
Entities may be selected on a competitive or noncompetitive
basis under the terms and conditions established by the
Secretary. Sufficient appropriations are authorized to ensure
the viability of the program.
Section 6. Technical amendment to allow use of CDBG funds to administer
renewal communities
This section amends section 105(a)(13) of the Housing and
Community Development Act of 1974 (42 U.S.C. 5305(a)(13)) by
inserting ``and renewal communities'' after ``enterprise
zones''.
Section 7. Applicability
This section stipulates that this legislation will apply
only with respect to amounts made available for fiscal year
2004 and fiscal years thereafter for use under the provisions
of the law amended by this bill.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974
* * * * * * *
PART I--COMMUNITY DEVELOPMENT
* * * * * * *
TITLE I--COMMUNITY DEVELOPMENT
* * * * * * *
ELIGIBLE ACTIVITIES
Sec. 105. (a) Activities assisted under this title may
include only--
(1) * * *
* * * * * * *
(13) payment of reasonable administrative costs
related to establishing and administering federally
approved enterprise zones and renewal communities and
payment of reasonable administrative costs and carrying
charges related to (A) administering the HOME program
under title II of the Cranston-Gonzalez National
Affordable Housing Act; and (B) the planning and
execution of community development and housing
activities, including the provision of information and
resources to residents of areas in which community
development and housing activities are to be
concentrated with respect to the planning and execution
of such activities, and including the carrying out of
activities as described in section 701(e) of the
Housing Act of 1954 on the date prior to the date of
enactment of the Housing and Community Development
Amendments of 1981;
* * * * * * *
(24) provision of direct assistance to facilitate and
expand homeownership among persons of low and moderate
income (except that such assistance shall not be
considered a public service for purposes of paragraph
(8)) by using such assistance to--
(A) * * *
* * * * * * *
(E) pay reasonable closing costs (normally
associated with the purchase of a home)
incurred by a low- or moderate-income
homebuyers; [and]
(25) lead-based paint hazard evaluation and
reduction, as defined in section 1004 of the
Residential Lead-Based Paint Hazard Reduction Act of
1992[.]; and
(26) environmental cleanup and economic development
activities related to brownfield projects in
conjunction with the appropriate environmental
regulatory agencies.
* * * * * * *
guarantee of loans for acquisition of property
Sec. 108. (a) * * *
* * * * * * *
(q) Economic Development Grants.--
(1) * * *
* * * * * * *
(5) Pilot program for national redevelopment of
brownfields.--
(A) In general.--Using any amounts made
available under this subsection, the Secretary
may establish a pilot program under which
grants under this subsection are used to
develop, maintain, and administer (including
the payment of an entity or entities selected
pursuant to subparagraph (B)) a common loan
pool of development loans for brownfield
redevelopment projects made on behalf of
eligible public entities with the proceeds of
obligations guaranteed under this section,
including related security and a common loans
loss reserve account, for the benefit of
participants in the pilot program.
(B) Selection of program managers and
contractors.--The Secretary may select an
entity or entities on a competitive or
noncompetitive basis to carry out any of the
functions involved in the pilot program.
(C) Terms for participation.--Participation
by eligible public entities in the pilot
program shall be under such terms and
conditions as the Secretary may require.
(D) Authorization of appropriations.--There
are authorized to be appropriated such sums as
may be necessary--
(i) for grants under this subsection
to be used only in conjunction with the
pilot program under this paragraph; and
(ii) for costs of carrying out the
pilot program under this paragraph and
ensuring that the program is carried
out in an effective, efficient, and
viable manner.
* * * * * * *
SEC. 123. BROWNFIELDS DEVELOPMENT INITIATIVE.
(a) In General.--The Secretary may make grants under this
section, on a competitive basis as specified in section 102 of
the Department of Housing and Urban Development Reform Act of
1989 (42 U.S.C. 3545), only to eligible public entities (as
such term is defined in section 108(o) of this title) and
Indian tribes for carrying out projects and activities to
assist the environmental cleanup and development of brownfield
sites, which shall include mine-scarred lands.
(b) Use of Grant Amounts.--Amounts from grants under this
section shall--
(1) be used, as provided in subsection (a) of this
section, only for activities specified in section
108(a); and
(2) be subject to the same requirements that, under
section 101(c) and paragraphs (2) and (3) of section
104(b), apply to grants under section 106.
(c) Availability of Assistance.--The Secretary shall not
require, for eligibility for a grant under this section, that
such grant amounts be used only in connection or conjunction
with projects and activities assisted with a loan guaranteed
under section 108.
(d) Applications.--Applications for assistance under this
section shall be in the form and in accordance with procedures
as shall be established by the Secretary.
(e) Selection Criteria and Leveraging.--The Secretary shall
establish criteria for awarding grants under this section,
which may include the extent to which the applicant has
obtained other Federal, State, local, or private funds for the
projects and activities to be assisted with grant amounts and
such other criteria as the Secretary considers appropriate.
Such criteria shall include consideration of the
appropriateness of the extent of financial leveraging involved
in the projects and activities to be funded with the grant
amounts.
(f) Authorization of Appropriations.--There are authorized to
be appropriated for grants under this section such sums as may
be necessary for each of fiscal years 2004, 2005, 2006, 2007,
and 2008.
* * * * * * *