[House Report 109-138]
[From the U.S. Government Publishing Office]




109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-138

======================================================================
 
               BROWNFIELDS REDEVELOPMENT ENHANCEMENT ACT

                                _______
                                

 June 16, 2005.--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. 280]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Financial Services, to whom was referred the 
bill (H.R. 280) 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..........................................     4
Committee Votes..................................................     4
Committee Oversight Findings.....................................     4
Performance Goals and Objectives.................................     4
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     6
Advisory Committee Statement.....................................     7
Constitutional Authority Statement...............................     7
Applicability to Legislative Branch..............................     7
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill, as Reported............     8

                          Purpose and Summary

    H.R. 280, 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 (BEDI) 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 Subcommittee 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.
    Immediately following the March 6 hearing, the Subcommittee 
approved H.R. 2941 for full Committee consideration, as 
amended; and on April 11, 2002, the Committee by voice vote 
ordered H.R. 2941 reported to the House with a favorable 
recommendation with an amendment. (H. Rept. 107-448).
    On June 4, 2002, the House considered the bill under 
suspension of the rules and passed the bill by a voice vote, 
but no further action was taken on this measure in the 107th 
Congress.
    In the 108th Congress, H.R. 239, the Brownfields 
Redevelopment Enhancement Act, was again introduced on January 
8, 2003. H.R. 239 increased access to brownfields redevelopment 
funds for America's small communities by de-linking Section 108 
loan guarantees from HUD's BEDI grants. The bill focused on 
providing access to capital for local entities that 
traditionally have had trouble obtaining financing for 
brownfields redevelopment activities. The bill also authorized 
HUD to establish a pilot program for a common brownfields 
redevelopment loan pool.
    On February 13, 2003, the Committee ordered H.R. 239 to be 
reported to the House, by a voice vote. (H. Rept. 108-22), but 
no further action was taken on the bill in the 108th Congress.
    In the 109th Congress, H.R. 280 was introduced on January 
6, 2005. Like its predecessors, H.R. 280 focuses on providing 
access to capital for local entities that traditionally have 
had trouble obtaining financing for brownfields redevelopment 
activities. Most notably, H.R. 280 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. 280 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.
    On March 16, 2005, the Committee ordered H.R. 280 to be 
reported to the House, by a voice vote.
    Presumably because of budget constraints, the 2004, 2005 
and 2006 HUD budgets proposed 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.
    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

    A legislative hearing on H.R. 2941, Brownfields 
Redevelopment Enhancement Act was held in the 107th Congress on 
March 6, 2002.
    No hearings were held on this legislation in the 108th or 
the 109th Congress.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
March 16, 2005 and ordered H.R. 280, 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 with 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.
    The Committee considered the following amendment:

          An amendment offered by Mr. Lynch, relating to 
        affordable housing, was offered and withdrawn.

                      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 new 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:
                                                     April 4, 2005.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 280, the 
Brownfields Redevelopment Enhancement Act.
    If you wish further details on the estimate, we will be 
pleased to provide them. The CBO staff contacts are Susanne S. 
Mehlman (for federal costs) and Gregory Waring (for the state 
and local impact).
            Sincerely,
                                               Douglas Holtz-Eakin.
    Enclosure.

H.R. 280--Brownfields Redevelopment Enhancement Act

    Summary: CBO estimates that implementing H.R. 280 would 
cost $99 million over the next five years, assuming 
appropriation of the necessary amounts. Of this amount, $69 
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 $30 million of the bill's estimated cost 
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 apply for 
private loans for the redevelopment of brownfields and use the 
grant money either as collateral for those loans or to cover 
the subsidy cost for HUD to guarantee the loans. For this 
estimate, CBO assumes communities would use the grant funds as 
collateral.
    Enacting H.R. 280 would have no impact on direct spending 
or receipts.
    H.R. 280 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.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 280 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
                                                           -----------------------------------------------------
                                                              2005     2006     2007     2008     2009     2010
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Brownfields Redevelopment Spending Under Current Law:
    Budget Authority \1\..................................       25        0        0        0        0        0
    Estimated Outlays.....................................       24       24       20       15        9        6
Proposed Changes:
    Brownfields Redevelopment Grants:
        Estimated Authorization Level.....................        0       26       27       27       28       29
        Estimated Outlays.................................        0        1        6       15       21       26
    Pilot Program:
        Estimated Authorization Level.....................        0       10       10       10        0        0
        Estimated Outlays.................................        0        2       10       10        8        0
        Total Changes:
            Estimated Authorization Level.................        0       36       37       37       28       29
            Estimated Outlays.............................        0        3       16       25       29       26
Brownfields Redevelopment Spending Under H.R. 280:
    Estimated Authorization Level \1\.....................       25       36       37       37       28       29
    Estimated Outlays.....................................       24       27       36       40       38       32
----------------------------------------------------------------------------------------------------------------
\1\ The 2005 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 2006 and that necessary amounts will be 
appropriated for each fiscal year. Estimated outlays are based 
on historical spending patterns of the brownfields program and 
the disbursement rate of other loan programs.
    H.R. 280 would authorize the appropriation of such sums as 
may be necessary for brownfield development grants for fiscal 
years 2006 through 2010. Assuming appropriations at the 2005 
level, adjusted for inflation, CBO estimates that funding would 
total $137 million over the 2006-2010 period for HUD grants to 
public entities for assistance in the cleanup and redevelopment 
of brownfield sites. We estimate that outlays resulting from 
those appropriations would sum to $69 million over the five-
year period. (Appropriations have been close to $25 million for 
each of the past eight years. If they were to continue at that 
level through 2010, resulting outlays would be about $65 
million over that period.) 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 
the department would need $10 million annually over the next 
three years. If appropriated, we expect that such funding would 
be used by communities seeking to redevelop brownfield sites as 
collateral for private loans.
    Intergovernmental and private-sector impact: H.R. 280 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. Local and tribal governments would benefit 
from a national brownfield pilot program 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 incurred voluntarily.
    Estimate prepared by: Federal Costs: Susanne S. Mehlman. 
Impact on State, Local, and Tribal Governments: Gregory Waring. 
Impact on the Private Sector: Craig Cammarata.
    Estimate approved by: Robert A. Sunshine, 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 
general welfare of the United States) and clause 3 (relating to 
the power to regulate 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.

             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 Agencies 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 
2006 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

           *       *       *       *       *       *       *



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) the construction or improvement of tornado-safe 
        shelters for residents of manufactured housing, and the 
        provision of assistance (including loans and grants) to 
        nonprofit and for-profit entities (including owners of 
        manufactured housing parks) for such construction or 
        improvement, except that--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) amounts may not be used for a shelter as 
                provided under this paragraph unless there is 
                located, within the neighborhood in which the 
                shelter is located (or, in the case of a 
                shelter located in a manufactured housing park, 
                within 1,500 feet of such park), a warning 
                siren that is operated in accordance with such 
                local, regional, or national disaster warning 
                programs or systems as the Secretary, after 
                consultation with the Director of the Federal 
                Emergency Management Agency, considers 
                appropriate to ensure adequate notice of 
                occupants of manufactured housing located in 
                such neighborhood or park of a tornado; [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 2006, 2007, 2008, 2009, 
and 2010.

           *       *       *       *       *       *       *


                                  
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