[Federal Register Volume 62, Number 88 (Wednesday, May 7, 1997)]
[Notices]
[Pages 24915-24918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11905]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-5822-7]


Comprehensive Environmental Response, Compensation and Liability 
Act (CERCLA) or Superfund, Section 104; Announcement of Proposal 
Guidelines for the Competition for the 1997 National Brownfields 
Cleanup Revolving Loan Fund Demonstration Pilots

AGENCY: U.S. Environmental Protection Agency.

ACTION: Notice of Proposal Deadlines and Guidelines.

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SUMMARY: The Environmental Protection Agency's (EPA) Brownfields 
Economic Redevelopment Initiative, is designed to empower states, local 
governments, communities, and other stakeholders in economic 
redevelopment to work together in a timely manner to prevent, assess, 
safely cleanup, and sustainably reuse brownfields. As part of this 
Initiative, EPA will award Brownfields Cleanup Revolving Loan Fund 
(BCRLF) Demonstration Pilots to states, cities, towns, counties, 
territories, and Indian tribes to test brownfields cleanup revolving 
loan fund models that direct special efforts toward facilitating 
coordinated public and private efforts at the federal, state, and local 
levels.
    To date, the Agency has funded 78 Brownfields Assessment 
Demonstration Pilots. The brownfields assessment pilots (each funded up 
to $200,000 over two years) test cleanup and redevelopment planning 
models, direct special efforts toward removing regulatory barriers 
without sacrificing protectiveness, and facilitate coordinated 
environmental cleanup and redevelopment efforts at the federal, state, 
and local levels. These brownfields assessment pilot are being used to 
bring together community groups, investors, lenders, developers, and 
other affected parties to address the issue of assessing sites 
contaminated with hazardous substances and preparing them for 
appropriate, productive use. The pilots serve as vehicles to explore a 
series of models for states and localities struggling with such 
efforts. Of those pilots, 39 are National Pilots selected under 
criteria developed by EPA Headquarters and 39 are Regional Pilots 
selected under EPA Regional criteria. (In 1997, EPA will announce 25 
new National Pilots and at least 5 new Regional Pilots.)
    For the 1997 fiscal year (FY97), only entities that have been 
awarded National or Regional brownfields assessment pilots prior to 
October 1995 will be eligible to apply to EPA's BCRLF demonstration 
pilot program. Therefore, up to 29 BCRLF pilots may be awarded in FY97. 
FY97 BCRLF Pilots will be selected by the National program. Unlike 
brownfields assessment pilots, Regional offices will not independently 
identify and select BCRLF pilots. The 29 eligible pilots are listed 
below (sorted by EPA Region):

EPA Region 1: BRIDGEPORT, CT; BOSTON, MA
EPA Region 2: TRENTON, NJ; BUFFALO, NY; ROCHESTER, NY
EPA Region 3: BALTIMORE, MD; PHILADELPHIA, PA; PITTSBURGH, PA; CAPE 
CHARLES, VA; RICHMOND, VA
EPA Region 4: BIRMINGHAM, AL; LOUISVILLE, KY; KNOXVILLE, TN
EPA Region 5: STATE OF ILLINOIS; WEST CENTRAL MUNICIPAL CONFERENCE, IL; 
STATE OF INDIANA; INDIANAPOLIS, IN; DETROIT, MI; STATE OF MINNESOTA; 
CUYAHOGA COUNTY (Cleveland), OH
EPA Region 6: NEW ORLEANS, LA; DALLAS, TX; LAREDO, TX
EPA Region 7: ST. LOUIS, MO
EPA Region 8: SAND CREEK CORRIDOR, CO; WEST JORDAN, UT
EPA Region 9: SACRAMENTO, CA;
EPA Region 10: OREGON MILLS, OR; DUWAMISH, WA

DATES: This action is effective immediately and expires on June 9, 
1997. All proposals must be postmarked or sent to EPA via registered or 
tracked mail by the expiration date cited above.

ADDRESSES: Proposal guidelines can be obtained by calling the Superfund 
Hotline at the following numbers: Washington, DC Metro Area at 703-412-
9810, Outside Washington, DC Metro at 1-800-424-9346, TDD for the 
Hearing Impaired at 1-800-553-7672.
    Guidelines may also be obtained by writing to: U.S. EPA--
Brownfields Application, Superfund Document Center 5201G, 401 M Street, 
SW., Washington, DC 20460.
    Copies of the Booklet are available via the Internet: http://
www.epa.gov/brownfields/

FOR FURTHER INFORMATION CONTACT: The Superfund Hotline, 800-424-9346.

SUPPLEMENTARY INFORMATION:

Submission to Congress and the General Accounting Office

    Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report 
containing this action and other required information to the U.S. 
Senate, the U.S. House of Representatives and the Comptroller

[[Page 24916]]

General of the General Accounting Office prior to publication of the 
action in today's Federal Register. This action is not a ``major rule'' 
as defined by 5 U.S.C. 804 (2).
    The BCRLF pilots will be selected through an evaluation process. 
Eligible entities must demonstrate: (1) an ability to manage a 
revolving loan fund and environmental cleanups; (2) a need for cleanup 
funds; (3) commitment to creative leveraging of EPA funds with public-
private partnerships and in-kind services; and (4) a clear plan for 
sustaining the environmental protection and related economic 
development activities initiated through the BCRLF program. The 29 
eligible entities must meet EPA's threshold and evaluation criteria. 
There is no guarantee of an award. Also, the size of the awards may 
vary (for example, from $50,000 to $350,000), depending on the 
proposal's responses to the evaluation criteria.
    The BCRLF Pilots are intended to support self-sustaining efforts by 
states, local governments, and Indian tribes to clean up brownfields. 
In particular, these pilots will test revolving loan fund models that 
facilitate coordinated public and private cleanup efforts. A revolving 
loan fund is a variant of a bond bank, in which a sponsoring entity (in 
this case, EPA) provides capitalization funds to a managing entity (for 
example, a municipality) that are used to make loans for authorized 
purposes (brownfields cleanups). A revolving loan fund charges interest 
on the loans, generally at a low interest rate. This fund is termed 
revolving because it uses loan repayments (principal, plus interest) to 
make new loans for the same authorized purposes.
    From the BCRLF Pilot funds, states, political subdivisions, and 
Indian tribes may provide loans, but not grants, to public and private 
parties (for example, local political subdivisions and community 
development organizations) for the purposes of cleaning up brownfields 
sites that already have been assessed for contamination. Loan 
repayments provide a continuing source of capital for states, political 
subdivisions, and Indian tribes to direct and facilitate brownfields 
site cleanups by providing additional loans to other eligible 
recipients for brownfields site cleanup. The following definitions will 
be used throughout these proposal guidelines:
     A Proposer is the state, political subdivision of a state 
(for example, city, town, county), territory, or Indian tribe that is 
going to submit or has submitted a proposal for a BCRLF Demonstration 
Pilot with EPA.
     A Proposal is the document submitted to EPA that provides 
responses to the criteria described below. If the proposal meets the 
criteria and the proposer is selected by EPA to receive BCRLF Pilot 
funding, the proposer will be requested to prepare a formal application 
for a cooperative agreement.
     A Cooperative Agreement is the document negotiated between 
EPA and those proposers that EPA has selected as candidates to receive 
BCRLF Pilot funding. The cooperative agreement will award federal funds 
and outline the specific and standard terms and conditions to be met by 
the recipient of the funds.
     A Cooperative Agreement Recipient is the entity that 
enters into the cooperative agreement with EPA, will receive the BCRLF 
Pilot funding from EPA, and will be responsible for managing the funds, 
ensuring proper environmental cleanups, and complying with applicable 
laws and regulations.

--The Fund Manager is the cooperative agreement recipient or its 
legally designated representative who will be responsible for ensuring 
that the BCRLF is managed in conformance with the cooperative 
agreement, applicable laws and regulations, and prudent cleanup and 
lending practices.
--The Lead Agency is the cooperative agreement recipient or its legally 
designated representative who will be responsible for ensuring that 
environmental cleanups conducted using BCRLF Pilot funds are conducted 
in conformance with the cooperative agreement, and federal and state 
requirements.
--The Brownfields Site Manager is the person appointed by the 
cooperative agreement recipient or lead agency to oversee cleanups at 
specific sites.

     The Borrower is the public or private entity that will 
receive and repay loans from the BCRLF under terms and conditions 
negotiated with the cooperative agreement recipient.

Legal and Program Guidelines for the Proposals

    The BCRLF demonstration pilot program is funded under 
Sec. 104(d)(1) of the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980, as amended (CERCLA). BCRLF 
pilot funds must be directed toward environmental response activities. 
BCRLF funds may not be used to pay for non-environmental response 
redevelopment activities (for example, construction of a new facility 
or marketing of property). Use of BCRLF funds must be consistent with 
CERCLA, and all CERCLA restrictions on use of funding also apply to 
BCRLF pilot cooperative agreement recipients.
    States, political subdivisions (including, cities, towns, and 
counties), territories, and Indian tribes are eligible cooperative 
agreement recipients. Proposals from coalitions among the 29 entities 
eligible in FY97 are permitted to apply, but a single eligible entity 
must be identified as the legal recipient. Cooperative agreement funds 
will be awarded only to an eligible recipient, as described above.
    The cooperative agreement recipient must act as, or designate, the 
``lead agency.'' In turn, the ``lead agency'' must officially designate 
a qualified environmental specialist as the ``brownfields site 
manager'' who can ensure that any cleanup activities performed by the 
borrower are consistent with federal and state requirements. The BCRLF 
pilot proposals must conform to the following guidelines:

Eligible Brownfields Sites

     Use of the BCRLF pilot funds are limited to brownfields 
sites that have been determined to have an actual release or 
substantial threat of a release of a hazardous substance which presents 
a threat to public health or welfare, or the environment. Funds may 
also be used at sites with a release or substantial threat of release 
of a pollutant or contaminant which may present an imminent and 
substantial danger to the public health or welfare. These funds may not 
be used to pay for non-environmental redevelopment activities (for 
example, new construction or property marketing).
     However, BCRLF pilot funds may not be used for activities 
at any sites: (1) listed (or proposed for listing) on the National 
Priorities List; (2) at which a removal action must be taken by federal 
or state agencies within six months; or (3) where a federal or state 
agency is planning or conducting a response or enforcement action.
     BCRLF pilot funds may be loaned for activities at sites 
that are: (1) currently publicly owned; (2) publicly owned, either 
directly by a municipality or indirectly through a quasi-public entity 
such as a community development corporation; (3) privately owned, with 
clear means of recouping BCRLF pilot expenditures (for example, through 
a guarantee by the owner's or developer's security interest or through 
a lien on real property); or (4) undergoing purchase by a new party who 
meets the definition of prospective purchaser.

[[Page 24917]]

The Borrower

     A party which is determined to be a generator or 
transporter of contamination at a brownfields site(s) is ineligible for 
a BCRLF pilot loan for that same site.
     The cooperative agreement recipient's lead agency may 
initially find that an owner/operator of a brownfields site(s) is an 
eligible borrower for a BCRLF pilot loan for that same site, only if: 
the lead agency can determine that an owner/operator would fall under a 
statutory exemption; or that EPA would use its enforcement discretion 
and not pursue the party in question under CERCLA, as described by EPA 
guidance (see list in Appendix B). However, the initial findings made 
by the lead agency by no means limit the enforcement discretion or 
authority of the federal or state government. The lead agency must 
maintain documentation demonstrating the eligibility of the owner/
operator.

Pre-Cleanup

     BCRLF pilot funds may not be used to conduct environmental 
response activities preliminary to cleanup, such as site assessment, 
site identification, and site characterization. These funds have been 
designated by EPA's Administrator for cleanup-related activities only. 
The fund manager may, however, negotiate with the borrower a limit of 
up to 10% of the total loan to cover both administrative and cleanup 
response planning costs.
     The cooperative agreement recipient must ensure the pre-
cleanup activities and cleanup planning conducted by the potential 
borrower meet federal, state, and local requirements. The authorized 
brownfields site manager must review and concur with the plans 
submitted by the borrower before the fund manager issues the loan.
     The cooperative agreement recipient's lead agency must 
review the current site conditions and site evaluation information that 
is required to be provided by the borrower to determine if the planned 
cleanup action is appropriate.

--The site evaluation information must include pertinent facts about 
the discharge or release, such as: its source and cause; the 
identification of potentially responsible parties; the nature, amount, 
and location of discharged or released materials; the probable 
direction and time of travel of discharged or released materials; the 
pathways to human and environmental exposure; the potential impact on 
human health, welfare, and safety and the environment; the potential 
impact on natural resources and property that may be affected; 
priorities for protecting human health and welfare and the environment; 
analysis of alternative cleanup options; and appropriate cost 
documentation.

     The cooperative agreement recipient must ensure adequate 
documentation of the basis for the selection of the cleanup action 
(including site evaluation information) and the decision to authorize 
cleanup activities (including the decision to issue a loan). The lead 
agency and the fund manager shall compile and maintain the 
documentation including the data, analyses of site information, and 
other documents that provide the basis for cleanup levels and 
activities.

Cleanup Activities

     The cooperative agreement recipient must ensure that 
activities supported by BCRLF pilot funds are carried out consistent 
with federal and state requirements. The brownfields site manager must 
monitor the borrower's site activities for compliance with federal and 
state environmental requirements. The brownfields site manager must 
monitor the borrower's cleanup activities to determine that the cleanup 
fully addresses the contamination. If the brownfields site manager 
determines that the borrower's planned cleanup action is not sufficient 
and the site requires additional action, the lead agency shall ensure 
an orderly transition to the additional activities that ensure 
protection of human health and the environment.
     The lead agency must determine that a potential borrower's 
proposed activities are consistent with removal activities authorized 
by CERCLA. The lead agency must determine, on a site-by-site basis, 
that a removal action is authorized by CERCLA. ``Removal'' is defined 
in CERCLA Sec. 101(23); and descriptions of removal actions and their 
requirements are included in 40 C.F.R. Sec. 300.415.

--The lead agency must set community relations standards that ensure 
that the borrower's activities meet CERCLA public participation 
requirements. This includes, among other things, required public notice 
periods, availability of documents to the public, and the designation 
of a spokesperson who shall inform the community of actions taken, 
respond to inquiries, and provide information concerning the 
activities.
--The lead agency must ensure that the borrower meets all federal and 
state requirements for worker health and safety at the brownfields 
cleanup site(s).
--If the release of the hazardous substance, pollutant or contaminant 
involves damage to natural resources as defined under CERCLA, the lead 
agency must ensure that the removal action plan coordinates with the 
activities of the designated federal trustee agency.

     The fund manager may allow the borrower to use BCRLF pilot 
loan funds for site monitoring activities that are reasonable and 
necessary during the cleanup process. Funds may be used to determine 
the effectiveness of the cleanup, but may not be used for operation and 
maintenance. BCRLF pilot funds may not be used for monitoring and data 
collection necessary to apply for, or comply with, environmental 
permits under other State and federal laws, unless such a permit is 
required as a component of the cleanup action.

Other Restrictions

     The cooperative agreement recipient may use BCRLF pilot 
funds for the lead agency's or fund manager's administrative and legal 
costs up to 5% of the total award, to be determined during cooperative 
agreement application negotiations with EPA. Allowable costs may 
include loan processing, professional services, audit, legal fees and 
state program fees.
     BCRLF pilot funds may not be used for job training. 
Support for job training activities may be available through the 
Hazardous Material Training and Research Institute, EPA programs, other 
federal agency programs, and state and local programs.
     BCRLF pilot funds may not be used to support ``lobbying'' 
efforts of the cooperative agreement recipient (for example, lobbying 
members of Congress or State legislatures, or lobbying for other 
federal grants, cooperative agreements, or contracts).
     BCRLF pilot funds may not be used at sites contaminated by 
petroleum products except to address a co-mingled hazardous substance, 
pollutant, or contaminant (for example, used oil). CERCLA expressly 
excludes petroleum from the definition of hazardous substances.
     Funding cannot be used to cleanup a naturally occurring 
substance, products that are part of the structure of residential 
buildings or business or community structures (for example, lead-based 
paint contamination or asbestos), or public or private drinking water 
supplies that have deteriorated through ordinary use, except as

[[Page 24918]]

determined, in consultation with EPA, on a site-by-site basis 
consistent with CERCLA Sec. 104(A) (3) and (4).
     The cooperative agreement recipient can not use BCRLF 
pilot funds to match any other federal funds without specific statutory 
authority. (However, the borrower may use BCRLF pilot funds to match 
other federal funds.)
     The cooperative agreements are governed by EPA's general 
grant regulations (40 CFR Part 31) and regulations for cooperative 
agreements under CERCLA Sec. 104(d) (40 CFR Part 35, Subpart C).

Evaluation of the Proposals

Evaluation Process

    To ensure a fair evaluation process, EPA will convene a FY97 BCRLF 
pilot evaluation panel consisting of EPA Regional and Headquarters 
staff, Economic Development Administration (EDA) staff and other 
federal agency representatives. The evaluation panel will assess how 
well the proposals meet the criteria outlined below. The evaluation 
panel's evaluations will be presented to EPA senior management for 
final selection. The evaluations will include recommendations for the 
number and size of the awards.
    Proposals must be clear and decisive, strictly follow the criteria, 
and provide sufficient detail for the panels to compare the merits of 
each and decide which proposal best supports the intent of the pilot 
program. Vague descriptions and unnecessary redundancy may reduce the 
chance of a favorable rating. Proposers are encouraged to contact and, 
if possible, meet with EPA Brownfields Coordinators (see Appendix C).

Cooperative Agreement Award Process

    Upon determination of having been selected, proposers will receive 
a confirmation letter from EPA Headquarters. Since the cooperative 
agreements are to be awarded by the EPA Regional offices, at the time 
the selected proposers are notified, appropriate EPA Regional 
Brownfields Coordinators and Regional Grants Specialists also will be 
informed. The proposer then will be contacted by the Regional office 
and asked to submit a formal cooperative agreement application package. 
The information in the proposal submitted to EPA Headquarters will form 
a basis for the cooperative agreement application. However, the 
cooperative agreement application will require more detailed 
information on specific products, schedule, and budgets. The 
cooperative agreement application package will include: the standard 
application and budget forms; a formal work plan that provides a 
detailed description of the work to be performed, including a schedule, 
milestones, products, and budget backup information; information 
related to community relations, health and safety, and quality 
assurance plans; and the required certification forms. When the 
applicant is a political subdivision, an additional letter of support 
will be required from the appropriate state or tribe as an attachment 
to the cooperative agreement. In addition, as soon as the proposer is 
notified of having been selected, they will be asked to contact their 
State Intergovernmental Review office so that the required 
intergovernmental review process may begin immediately. The EPA 
Regional Brownfields Coordinator and Regional Grants Specialist will 
work closely with the applicant to process and finalize the cooperative 
agreement package.
    Proposers that are not selected will be informed in writing. A 
proposer may choose to revise the proposal for submittal by a deadline 
announced by EPA at a later date.

Criteria for the Brownfields Cleanup Revolving Loan Fund Proposal

    The proposal evaluation panels will review the proposals carefully 
and assess each response based on how well it addresses the evaluation 
criteria, briefly outlined below:

Threshold Criteria (Section A)

A. Ability to Manage a Revolving Loan Fund and Environmental Cleanups

    Proposers must meet the threshold criterion--demonstrating an 
ability to manage a revolving loan fund and environmental cleanups--to 
be selected for a BCRLF Demonstration Pilot.

A.1. Demonstrate your legal authority to manage a revolving loan fund 
and environmental cleanups (or demonstrate a firm plan to get authority 
if provided with funding).
A.2. Demonstrate that you have an effective institutional structure in 
place or planned. Specifically describe the roles of and relationships 
between: (1) the potential cooperative agreement recipient; (2) the 
proposed lead agency; (3) the proposed fund manager; and (4) the 
brownfields site manager.
A.3. Describe your proposed BCRLF Pilot Financial Plan.

Evaluation Criteria (Sections B-E)

    Those proposers that meet the threshold criterion will be evaluated 
based on their responses to three evaluation criteria: (1) 
demonstration of need; (2) commitment to creative leveraging of EPA 
funds; (3) benefits of BCRLF pilot loans to the local community 
criteria; and (4) long-term benefits and sustainability.
    Your response to the following criteria will be the primary basis 
on which EPA determines the size of award. EPA's evaluation panel will 
review the proposals carefully and assess each response based on how 
well it addresses each criterion.

B. Evaluation Criteria: Demonstration of Need

B.1. Problem Statement and Unique Needs of the Community
B.2. Description of Potential Borrowers and Property
B.3. Ability to Finance Cleanups

C. Evaluation Criteria: Commitment to Creative Leveraging of EPA Funds

C.1. Ability to Attract and Support Other Financing
C.2. Cash and In-Kind Contributions
C.3. Efficiency of Planned Administrative Structure

D. Evaluation Criteria: Benefits of BCRLF Loans to the Local Community

D.1. Announcement and Notification of BCRLF Fund Availability
D.2. Community Involvement in Future Land Reuse
D.3. Contribution to Community Economic Development Plans
D.4. Environmental Justice Benefits
D.5 Projected Sustainable Benefits

E. Evaluation Criteria: Long-Term Benefits and Sustainability

E.1. National Replicability
E.2. Measures of Success

    Dated: April 22, 1997.
Linda Garczynski,
Director, Outreach and Special Projects Staff, Office of Solid Waste 
and Emergency Response.
[FR Doc. 97-11905 Filed 5-6-97; 8:45 am]
BILLING CODE 6560-50-P