[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.

           *       *       *       *       *       *       *


                                
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