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State of the States on Brownfields:Programs for Cleanup and Reuse of

Contaminated Sites

June 1995

Peter D. Blair PRINCIPAL STAFFAssistant Director Jan LinsenmeyerIndustry, Commerce, and Project Director

International Security Division

Emilia L. GovanProgram DirectorEnergy, Transportation, and

Infrastructure Program

Robert AtkinsonProject DirectorTechnological Reshaping of

Metropolitan America Project

Preject Staff

ADMINISTRATIVE STAFF

Lillian ChapmanDivision Administrator

Marsha FennOffice Administrator

Gay JacksonPC Specialist

Tina AikensAdministrative Secretary

Reviewers

Barbara Coler*Division Chief, Statewide Cleanup OperationsDepartment of Toxic Substances ControlCalifornia Environmental Protection Agency

Clem DinsmoreClean Sites

Crane HarrisOffice of Solid Waste and Emergency ResponseU.S. Environmental Protection Agency

Kris Huelsman*Real Estate Clean-up and Re-use ProgramOhio Environmental Protection Agency

Jim Linton*Site Reclamation ProgramMichigan Department of Natural Resources

Randy A. MullerEnvironmental ServicesBank of America

Kirsten OldenburgOffice of Technology Assessment

Jay PendergrassEnvironmental Law Institute

Kevin StancielChicago Department of Environment

Joel TarrDepartment of HistoryCarnegie Mellon University

Jim Van der KlootEPA Region V

Joe ZachmannVoluntary Investigation and Cleanup UnitMinnesota Pollution Control Agency

*Reviewer for state-specific information

contents

Summary 2

The Nature and Extent of the Brownfields Problem 3

Major Issues 5Technical Issues 5Legal Liability 6Financial Issues 8Community Concerns 9Redevelopment Prospects 9

Overview of State Programs 10State Superfund Programs 10Property Transfer Laws 12Voluntary Cleanup programs 13

Aspects of State Voluntary Cleanup ProgramsTechnical Guidance 14Liability Assurance 16Funding Support 18

Examples of State Voluntary Cleanup ProgramsMinnesota 19

Program features 19California 2 0

Program features 21Ohio 22

Program features 22

Recent State Activity 23

Recent Federal Activity 24

Unresolved Issues 25

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18

Appendix A - Acronyms

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State of the States onBrownfields: Programs for

Cleanup and Reuse ofContaminated Sites I

B rownfields consist of land and/or buildings that are abandoned or underutilized whereexpansion or redevelopment is complicated, in part, because of the threat of known orpotential contamination. Federal and state laws governing the treatment of these sites mayrequire remediation (cleanup) of property before redevelopment and can contribute to

uncertain liability for property owners or users. As a result of these and other factors, redevelop-ment and reuse of these sites can be hindered.l Redevelopment of brownfield sites is a particularproblem in many central cities and inner suburbs of U.S. metropolitan areas that need to createjobs and attract commercial and industrial development. Because of this, a number of states andcities have developed programs to facilitate assessment, cleanup, and redevelopment of brown-fields.

Congress, in considering the reauthorization of the Comprehensive Environmental Response,Compensation and Liability Act (CERCLA),2 commonly known as Superfund, is interested in theissue of brownfields and in their potential return to productive use. As a result, the House Subcom-mittee on Commerce, Trade and Hazardous Materials of the Committee on Commerce requestedthe Office of Technology Assessment (OTA) to prepare a background paper On issues surroundingcleanup and redevelopment of brownfields.

Cleanup of hazardous waste sites in the United States is often associated with the federalSuperfund law. The law established a federal program to identify and clean up the nation’s worstknown sites that are assessed and placed on the Environmental Protection Agency’s (EPA) NationalPriorities List (NPL).3 While some hazardous waste sites require federal attention and funds

1Brownfields may also have redevelopment problems due to, for instance, poor location, old and obsoleteinfrastructure, and other less tangible factors often associated with neighborhood decline.

2 42 U.S.C. SecS. 9601-9675.3 The list of hazardous waste sites in the United States that have been evaluated by EPA and det

serious threat to human health and the environment.

1

21 State of the States on Brownfields

through the Superfund, many additional sitesacross the country that do not meet the criteriafor placement on the NPL or federal criteria foremergency removal of contamination, come un-der state control. For this reason, legislationand hazardous waste cleanup programs haveevolved at the state level to address the identifi-cation and cleanup of known or potentially con-tamimted (non-NPL) sites.

State approaches to brownfields reuse differsignificantly, with some states having well-de-veloped programs and others having none.Because of these differences, the Subcommitteeasked that this OTA background paper focus onthe state role in brownfields. A more compre-

. hensive background paper on brownfields,scheduled for release in fall 1995, will addressa wider range of issues.4

This paper first presents an overview of thenature and extent of the brownfields problemand discusses several key issues relating to theircleanup and redevelopment. Next, it examinesthree primary state approaches for addressingbrownfields, with a particular focus on statevoluntary cleanup programs. It then presentsmore detailed information on the voluntary pro-grams in Minnesota, California, and Ohio. Thisis followed by brief summaries of the mostrecent activity in state legislatures on brown-fields and recent EPA brownfield initiatives.Finally, it outlines a number of unresolvedissues and preliminary conclusions regardingthe state role in addressing brownfields.

SUMMARYThe existence of potentially contaminated

and abandoned property is not a new problem inmany metropolitan areas, especially older, cen-

tral cities and suburbs. Where industry hasclosed or moved, land and buildings are left be-hind, idled, or underutilized, jobs are lost, andlocal tax revenues reduced. Recently, signifi-cant attention has focused on these sites, re-ferred to as “brownfields,” and the problemsassociated with their cleanup and reuse. Diffi-culties associated with cleanup present a barrierto productive reuse of these sites and associatedjob creation.

The exact number and environmental condi-tion of brownfields in the country is unknown.Estimates range from tens of thousands to450,000 sites. In addition, information on thelevel of contamination of brownfields is limited,though sites are known to have anywhere fromzero, low, or moderate contamination to ex-tremely hazardous conditions, while many siteshave not been evaluated.

Although the exact nature and extent of theproblem is difficult to assess, most sites consid-ered brownfields are not associated with ex-treme levels of contamination and will never beconsidered for addition to the National PriorityList or similar state priority lists. Since thesesites do not pose a serious threat or warrant im-mediate federal attention, they become the re-sponsibility of the states or municipalities wherethey are located. For this reason, states havetaken an active role in identifying and con-fronting the barriers to promoting brownfieldcleanup and redevelopment.

Because brownfields are known or potentialhazardous waste sites, there are a number ofchallenges to cleanup and reuse. Uncertain lia-bility associated with federal and state environ-mental laws is perhapscomplicated and often

the most critical. Theoverlapping nature of

4 T h i s p a p e r w i l l f o c u s o n b r o w n f i e l d c l e a n u p a n d r e u s e .Broader issues concerning urban economic developmentwill be addressed in the OTA assessment on the Technological Reshaping of Metropolitan America, expected to beavailable in fall 1995.

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these laws creates an unclear picture of the realrisk of liability, which serves as a disincentivefor involvement at a site. In addition, financialconstraints at brownfields act as another deter-rent to activity, since assessment and cleanupcosts can be high and financing is often un-available. Uncertainties involving more techni-cal issues of site assessment and cleanup levelsalso frustrate action on brownfields. This be-comes a particular problem when cleanup re-quirements are unclear and a process forremediation has not been defined. Because pub-lic opposition can hinder brownfield redevelop-ment, defining an appropriate role for publicinvolvement at some brownfield sites, espe-cially larger sites, can be important. Finally,demand for these sites will vary depending onthe location, with some sites having limited re-development potential even after cleanup.

States have developed a number of ap-proaches to resolve some of the reuse problemsof hazardous waste sites in general, and, insome cases, brownfields in particular. Whilestate policies vary considerably, the three mostcommon approaches are state superfund pro-grams, property transfer laws, and voluntarycleanup programs. Each includes a process forsite assessment and remediation, with statesuperfunds and property transfer laws operat-ing on an enforcement-driven basis.

Voluntary cleanup programs for brownfieldsare currently receiving the most attention andinterest in the states. They are being developedat a rapid pace with 17 of the 21 existing pro-grams in the country having been adopted since1991. In many states, voluntary programs aretargeted specifically to overcome the barriersassociated with brownfields activity and to bet-ter integrate both cleanup and redevelopment ofa site. Many offer technical assistance, liability

assurances, and financial incentives for partici-pation that are not available through othercleanup programs in the state. Voluntary pro-grams are particularly popular because theyallow private parties to initiate cleanups andwork cooperatively with state agencies to avoidsome of the costs and delays that would likelyoccur if the sites were subject to state super-fund or other enforcement-driven programs.Since many voluntary programs are new, therehas been no formal evaluation of their merits orproblems. However, a number of states havecompleted cleanups in this way.

Many state legislatures are rethinking theirpolicies toward hazardous waste sites to facili-tate brownfields activity. Such activity is alsobolstered by action at the federal level. Envi-ronmental Protection Agency initiatives includebrownfields pilot projects and development ofliability guidance, and congressional activityinvolves Superfund reauthorization and lenderliability legislation. As changes occur and pro-grams continue to evolve, more informationshould become available on promising ap-proaches and still unresolved issues.

THE NATURE AND EXTENT OF THEBROWNFIELDS PROBLEM

Brownfields have nearly as many definitionsas there are interested parties. EPA has adoptedone which seems to embody many features ofdefinitions promoted by others.

Brownfields are abandoned, idled or under-used industrial and commercial facilities whereexpansion or redevelopment is complicated byreal or perceived environmental contamina-tion.5

5Timothy Fields, Jr., Deputy Assistant Administrator, Office of Solid Waste and Emergency Response, U.S.Environmental Protection Agency, “Federal Agency Brownfields Initiatives, ” presented at the Environmental LawInstitute’s Redeveloping Brownfields Workshop, Washington, DC, Mar. 28, 1995.

4 I State of the States on Brownfields

Many brownfield sites were, or may still be toa lesser extent, used for industrial or commer-cial activities where hazardous substances werehandled, manufactured, or stored. The extentof contamination at brownfield sites exists in arange from low or moderate to extremely haz-ardous. Even abandoned properties with nocontamination can suffer from the stigma ofbrownfields until a site assessment determinesthat it is clean. Even then, properties with poordevelopment potential may remain underuti-lized.

While a small percentage of brownfield sitesmay have high levels of contamination and becandidates for addition to the NPL or similarstate priority lists, a large number of contami-nated sites will likely never be put on these listsbecause they have much lower contaminationlevels or because the condition of the site hasnot been evaluated. Information about manysites is currently unavailable. Threat to publichealth from brownfields contamination varieswidely (and is unknown in some cases), de-pending on the nature and extent of contamina-tion, the exposure patterns, and the use of thesite and surrounding area.

The range of estimates of brownfield sites inthe U.S. varies from tens of thousands tonearly 450,000 sites, and the associated num-ber of acres involved is equally uncertain.These sites vary in size from less than one acreto hundreds of acres in some instances. Manysites are concentrated in the Northeast andMidwest where much of the economy was his-torically based on heavy industrial activity.However, they are also common in the Southand West and represent a wide variety of pastindustrial and commercial uses. Brownfields

are frequently identified with distressed urbanareas, particularly central cities and inner sub-urbs that have had a longer legacy of industrialproduction. Many of these areas have under-gone deindustrialization, often leaving aban-doned and contaminated lands and buildings,making redevelopment more difficult. In allcases, as a known or potentially contaminatedsite, brownfield property is valued at a reducedamount compared with the estimated value ifthe property were known to be clean.

Some metropolitan regions have recentlyinitiated brownfield inventories to try to assessthe scope of the problem within their own bor-ders. Chicago, for example, has identified over2,000 brownfield sites in its metropolitan re-gion. Cuyahoga County, which includes thecity of Cleveland, estimates that 167 siteswould qualify as brownfields,6 while on thewest coast, Portland has identified approxi-mately 40 sites involving nearly 400 acres ofunderutilized land.’

While the estimates remain far from exact,the existence of brownfields frustrates eco-nomic development activities in many commu-nities. In large part, this is because brownfieldsare often associated with some level of uncer-tainty relating to their treatment in the law andare often disregarded for potential developmentdue to serious concerns involving possible en-vironmental contamination, including difficultand costly cleanup requirements, uncertaincleanup standards, liability, and unavailablefinancing. The presence of brownfields con-tributes, in part, to reduced economic develop-ment and job creation in urban areas,particularly in central cities and older suburbs.Brownfields may also contribute to develop-

6Cuyahoga County Pl anning Commission, “Brownfields Reuse Strategies Working Group Report, ” July 13, 1993,p. 69.

7Institute for Responsible Management, Inc., “State Brownfields Policy and Practice, ” Conference Proceedings,Boston, MA, January 1995, p. 57.

5

ment of previously unused land on the urbanfringe, leading to urban sprawl and its associ-ated problems, including increased traffic con-gestion and loss of open space.8

Some might wonder why brownfields aresuddenly demanding so much attention whentheir existence has certainly been a part of theurban landscape for decades. Old, abandonedinfrastructure, such as factories, mill sites, andwarehouses that have been “mothballed” due toobsolescence for a number of reasons, were notconsidered a threat to either human health orthe environment until the mid-1970s when con-cern for contamination became more apparent. 9

Over time, and with the creation of the Super-fund law in 1980, in the wake of Love Canal,people slowly began to understand some of thecomplicated environmental and liability issuesat stake for many of these properties. Through-out the 15 years of CERCLA’s existence, someissues involving hazardous waste sites havebeen clarified while others are still unresolved.

Addressing the problem of brownfields is acomplex task due partly to the many stakehold-ers who have a significant interest in decisionsthat will have some impact on these sites.Brownfield discussions necessarily involve avariety of parties including: property owners,developers, bankers, environmental consul-tants, insurance providers, environmental andcommunity development organizations, andregulators from all levels of government. Eachstakeholder group brings to the table interestsand concerns that must be considered in thecontext of the alternative perspectives repre-sented by other parties. Based on a review ofthe brownfields literature and reports from themajor brownfields forums recently under way

(in Chicago and Cuyahoga County), there ap-pears to be some agreement on the primary is-sues related to brownfield activities andpossible avenues for improvement.

MAJOR ISSUESThe brownfields debate centers around a

core group of issues that represent the primarybarriers and concerns related to brownfieldcleanup and redevelopment. Stakeholders haveidentified technical issues related to remedia-tion, liability concerns associated with contami-nation, financial barriers to cleanup and reuse,community concerns, and prospects for rede-velopment as issues that require some attentionand resolution in order to promote greater in-terest by developers and business in brownfieldsites.

Technical IssuesThe technical issues surrounding brown-

fields involve accurately assessing the type andextent of contamination present, and decidingon cleanup standards and procedures that mustbe followed. When the level of cleanup re-quired and the process for remediation is un-clear, uncertainties about the time and moneyneeded at brownfield sites become a disincen-tive for action. In addition, the difficulty in en-suring that site contamination is fully andaccurately assessed contributes to uncertaintyregarding liability, since future owners may beresponsible for cleanup of prior contamination.

In order to address remediation at brown-field sites, regulators must determine whatlevel of initial site investigation is necessary toidentify the type and extent (or absence) of con-tamination at a site. Identification generally be-

8Larry S. Bourne, “Reurbanization and Urban Land Development: U.S. Cities in a Comparative Context,” contrac-tor report prepared for the Office of Technology Assessment, May 1995. Many of the broader issues concerning urbansprawl and analysis of brownfields vs. greenfields development will be addressed in the assessment report on theTechnological Reshaping of Metropolitan America, expected to be released in fall 1995.

9In1 976, the Resource Conservation and Recovery Act was reacted by Congress, and New Jersey adopteJersey Spill Compensation and Control Act, a state “superfund” law.


gins with a Phase I Site Assessment, duringwhich environmental consultants are often en-gaged to provide analysis of government andother historical records, perform some site re-connaissance, and interview owners, occu-pants, and others associated with the site. If aPhase I assessment reveals evidence of contam-ination, a Phase II level assessment may beconducted, including actual sampling of soiland groundwater. Although this part of the pro-cess is common to most remediation activitiesat hazardous waste sites, it can be particularlytroublesome due to the fact that, until a finalanalysis of contamination at a site is complete,all parties involved do not know the exact levelof the hazard posed by the site. This leavesmuch uncertainty regarding the potential forenforcement action under strict federal or stateSuperfund laws, as well as the implications forremediation costs.

Determination of the appropriate and feasi-ble level of cleanup based on a whole host ofcriteria, including toxicity, exposure pathways,associated risk, future land use, and economicconsiderations, is central to all brownfieldcleanup activities. These must be evaluated ona site-by-site basis. While this is a key elementin all cleanup processes, state programs differsignificantly in how they establish cleanupgoals and remedy selection due, in part, to dif-ferences in state policies and the proceduresthat have been developed for decisionmakingpurposes. For simplicity and safety, manystates have adopted federal guidelines and stan-dards for remediation. Other states have devel-oped their own standards based on identifiablebackground levels, groundwater, or soil-basedcontaminant levels. In addition, some states,whether they adopt -federal standards or their

own, apply some variation utilizing a range ofcriteria by applying site-specific risk assess-ment, economic analysis, and/or future landuse in order to develop a feasible cleanupplan. 10

The uncertainties related to environmentalremediation are especially acute for stakehold-ers interested in the redevelopment of a site thatdepends on the maintenance of a budget andparticular work schedule in order to make aproject profitable. Uncertainty about both theexact nature of a site’s contamination and theprocess through which it will be addressed isassociated with unknown and potentially highcosts for remediation, creating a disincentivefor developers and other interested parties tobecoming involved at a site. The willingness ofa private party to become associated with abrownfield site also depends on the relationshipof that party to the site and the contaminationfound there. For instance, a site owner respon-sible for contamination on the property willhave a different motivation for cleanup than aprospective purchaser. Again, depending on astate’s procedures for managing hazardouswaste cleanup and the particular characteristicsof a given site, the technical process of identi-fying and cleaning up contamination will rangefrom fairly straightforward to cumbersome andtime-consuming.

Legal LiabilityLegal liability at brownfield sites is another

major issue that acts in some cases as a barrierto cleanup and redevelopment.]] The potentialfor liability associated with hazardous wastesites, in general, is especially complicated bycomplex and often overlapping laws designedto address them at the federal and state level.

1 0U.S. Environmental Protection Agency, Office of Solid Waste and Emergency Response, An Analysis of StateSuperfund Programs, EPA540/R-94/008 (Washington, DC: December 1993), p. 24.

11OTA was also asked by the Subcommittee to prepare a paper on legal liability related to brownfields. The paper

is expected to be available in July 1995.

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Depending on the type and extent of contamina-tion, as well as the current capacity (active orinactive) of a brownfield site, enforcement ac-tion may be warranted under the federal Super-fund program, state superfunds, the ResourceConservation and Recovery Act (RCRA),12 andother federal and state environmental laws.13

The law most often associated with liabilityat brownfield sites is CERCLA, later amendedin 1986 with the Superfund Amendment andReauthorization Act (SARA). 14 The statute waspassed in order to identify and cleanup chemi-cal spills and abandoned hazardous waste sitesthat pose a threat to human health and the envi-ronment. CERCLA is particularly significantdue to its far-reaching enforcement capability.It applies strict, joint and several, and retroac-tive liability to the environmental cleanup ofhazardous substances.l5 The law identifies anumber of parties that may be held responsiblefor a site cleanup including:

current owners or operators of contaminatedproperty,

owners or operators of property at the time itbecame contaminated,

persons who arrange for treatment or disposalof hazardous substances, and

transporters of hazardous substances.

The extensive reach of CERCLA liability alongwith other federal and state environmental lawsand common law has resulted in significant un-certainty and, therefore, fear of becoming asso-ciated with known or potentially contaminatedproperty. Few exemptions exist withinCERCLA’s liability scheme and court interpre-tation and decisions in some cases have exacer-bated concerns of liability risk for certainparties. 16 To a lesser extent, other federal envi-ronmental laws add to the uncertainty about lia-bility, along with state superfund and otherproperty cleanup and transfer laws.

Within this legal framework, any associationwith a hazardous waste site implies some levelof uncertain liability. This real or perceivedthreat of liability often deters interested parties(especially lenders and developers) from under-taking any transaction necessary to clean upand redevelop a brownfield site. There are fewassurances available at the federal or state levelto protect a private party from the potential for

1 242 U.S. C. Secs. 6901-6992.1 3For example, sites involving contamination with petroleum-based chemicals are typically treated under state laws

created to address this problem specifically.14Public Law99-499, 100 Stat. 1613 (1986).1 5 A l l l i a b i l i t y r e q u i r e p r o o f o f a c a u s a l l i n k - b e t w e e n a p a r t y a n d t h e h a r m . Strict liability me

have to be found negligent in order to be found liable. Joint and several liability means that any single responsibleparty can be required to pay for all the cleanup costs at a hazardous waste site, even if other parties contributed to thecontamination. Retroactive liability means that parties can be held liable for contamination that occurred before thelaw was passed.

16 One case that is often cited is U.S. v. Fleet Factors Corp. (901 F2d 1550, 1 11th Cir 1990), in which the courtfound that a lender could be held liable for cleanup if the lender participated “in the financial management of a facilityto a degree indicating a capacity to influence the corporation’s treatment of hazardous wastes. ”

m.


enforcement action at a hazardous waste site,though some EPA initiatives and state volun-tary cleanup programs have begun to addressthis issue.

Financial IssuesEven if the uncertainties regarding technical

issues and legal liabilities were to be solved,assessing and cleaning up contaminated brown-field sites can be expensive and can limitredevelopment of these sites. Brownfield sitesare often categorized in three ways:

●

. ’

●

●

those that remain economically viable, recog-nizing the need for remediation, where marketdemands w-ill promote cleanup and redevelop-ment;

sites that have some development potential ifsome incentive or financial assistance isoffered for assessment and cleanup; and

sites that have extremely limited market poten-tial, even if cleaned up.17

Financial issues are particularly complicated atbrownfield sites due to uncertainties related tothe ultimate costs of assessment and remedia-tion, potential risk of liability involving reme-diation costs, and limited public and privateresources.

Cleanup costs associated with hazardouswaste contamination are often uncertain andcan be quite high. Though data are limited onactual cleanup costs at brownfield sites, reportsrange from tens of thousands of dollars into themillions of dollars for particularly hazardoussites. Arriving at the real cost of remediationand development can require an initial invest-ment in site assessments that may be too pro-hibitive for some parties, particularly as theyrelate to smaller, less valuable sites. 18 Theproblem is further complicated by the fact thateven the most thorough site investigations arenot totally certain. Some stakeholders reportcircumstances involving the discovery of addi-tional contamination during the remediationprocess that adds to the overall project cost.

Another financial barrier to brownfieldcleanup is the uncertainty associated with thereal and perceived risk of liability for cleanupcosts. Since many stakeholders are unsure ofliability that may result from involvement atbrownfield sites, they cannot accurately assessthe risks in terms of costs and are often reluc-tant to become involved at all. This seems espe-cially true for lenders (private and public) whoare hesitant to make loans on properties wherehazardous materials were once handled or willbe in the future, 19 and developers who fear theymay be held liable for cleanup costs. Theprospects of working with contaminated prop-

1 7Chicago Brownfields Forum participants also recognized an additional type: “currently operating sites that are indanger of becoming brownfields because historical contamination discourages new investment and lending. ” This isdiscussed in Brownfields Forum, “Initial Report of Workgroups Review Draft, ” Mar. 31, 1995.

1 8Phase I Site Assessments may cost $1,000 to $5,000, while Phase II Assessment can average $50,000 to $70,000.19 Survey results of the Independent Bankers Association of America showed that one out of five of its members

reported a mortgage loss or default on commercial property as a result of contamination on the site. In addition, sevenout of 10 banks reported that they will not offer certain classes of loans due to environmental liability concerns. JamesBoyd and Molly K. Macauley, “The Impact of Environmental Liability on Industrial Real Estate Development,”Resources, No. 114, winter 1994.

9

erty as collateral in cases of foreclosure orbankruptcy dampen interest in brownfieldactivity .20

Finally, there is an apparent lack of publicand private resources available to promotebrownfield cleanup and redevelopment. Whilesome states provide financing mechanisms,such as public grants, low-interest loans, andtax incentives, these remain limited as brown-field sites continue to be identified and left un-addressed.

Community ConcernsAnother issue that figures into the brown-

fields problem involves the fact that these sitesdo not exist in isolation. Though not always thecase, brownfield property is often located indistressed communities and can be in closeproximity to other businesses, retail districts,or residential areas. A brownfield site may at-tract illegal dumping activities and, if left unse-cured and open to the public, often turns into amakeshift playground for neighborhood chil-dren or temporary shelter for the homeless. Ifcontamination exists on the property, brown-fields can pose a threat to human health and theenvironment where it is located. The absenceof contamination, however, may not be suffi-cient to remove the stigma associated with anabandoned or underutilized site if it is unattrac-tive or derelict. Brownfields may also result inincreased insurance rates for neighboringproperties and can lower property values in thearea.21

While community groups are usually inter-ested in promoting the cleanup and redevelop-ment of brownfields in their neighborhoods,

they expect some assurance that remediationwill adequately protect their health and the en-vironment. The public’s concern includes pro-tection during the cleanup, as well as at thefinal remediated site. When considering theprospects for site redevelopment, communitymembers may feel they have a stake in the typeof activity that is planned for the property. In afew recent cases, concern about the potentialfor new jobs and economic development of aneighborhood brought forward numerousgroups interested not only in being informedabout the plans, but also in being included inthe decisionmaking process.22 Due to the highlevel of interest in brownfield cleanup andreuse in a community, and depending on thesize and scope of a project, some form of com-munication between the responsible parties andcommunity members about the risks involvedat a site and plans for redevelopment mayprove essential to its completion.

Redevelopment ProspectsThe last issue that pervades the entire

brownfields problem is an unresolved questionabout the overall prospects for redevelopmentat many of these sites. The question is whetherthere will be demand for much of this propertyif the problem of contamination is removed,along with the potential for liability. Manybrownfield stakeholders are quick to point outthat concern about environmental contamina-tion is only part of the problem. These sites,especially those located in distressed communi-ties, pose other problems for redevelopment, aswell. In some cases, the infrastructure is oldand obsolete, and access to the property may be

2 0However, new Community Reinvestment Act (CRA) regulations (60 FR 22156, 22160) recognize loans forfinancing the cleanup or redevelopment of industrial sites in low- or moderate-income communities as credit towardmeeting the act’s requirements. This could help expand lender involvement at brownfield sites.

2 1A. Siewers, “The Building Blocks of Ruin,” Chicago Sun Times, Mar. 14, 1993, p. 20.2 2Cara Jepsen, “Retooling South Works, ” The Neighborhood Works, March 1995, p. 19.


limited. In addition, other factors such ascrime, high taxes, congestion, low-qualityamenities, and racial tensions ultimately pre-vent redevelopment of brownfield sites.23

Because of difficulties associated withbrownfield cleanup and redevelopment, devel-opment of previously untouched land on theurban fringe becomes more attractive. This de-velopment pattern (abandonment in older urbanareas and suburban/exurban sprawl) is alsofacilitated by subsidies and tax incentives of-fered by outlying municipal, county, and stategovernments interested in promoting growth intheir region. The connection between brown-field redevelopment prospects and greenfield

development activities is a complex economic“ problem that will be addressed in the OTA

assessment, Technological Reshaping ofMetropolitan America.

OVERVIEW OF STATE PROGRAMSBecause there are many more non-NPL sites

than there are NPL sites, much of the involve-ment in brownfields has been at the state level.For example, the Michigan Department ofNatural Resources has been involved withcleanups at approximately 738 non-NPL sitesover the past year, compared with 74 sites inthe state that are being addressed through thefederal Superfund program.24 As a result, mostissues that are identified as brownfield concernsare, in many ways, state issues.

States address non-NPL sites in their juris-diction through a variety of methods. The threemost common approaches are state superfundprograms, property transfer laws, and volun-tary programs. Brownfield remediation may beaddressed by any number or combination ofthese programs. For example, California cur-

rently addresses most low-priority brownfieldsites through the state’s Voluntary CleanupProgram, while Kentucky primarily managesbrownfields through the state superfund pro-gram.

State Superfund ProgramsSome states address brownfield sites

through state superfund programs, which oper-ate through enforcement-driven activities.These programs were developed across thecountry soon after the passage of the federalSuperfund program.25 In many instances, statesuperfund programs were created to addresssites not considered hazardous enough to beplaced on the NPL, but that a state believesmay warrant serious attention for remediation.Approximately 45 states operate their own su-perfund programs in the United States. Manyof them include authorities and capabilitiessimilar to the federal superfund program.While there is some variation among the pro-grams, state superfund or cleanup programs aregenerally characterized by the following fea-tures:26

●

●

●

●

procedures for emergency response actionsand permanent remediation of environmentaland human health risk,

provisions for a cleanup fund or other financ-ing mechanisms to support program activities,

enforcement authority to identify and compelresponsible parties to pay for site assessmentand cleanup,

authorized state agency with staff chargedwith responsibilitytion activities, and

for oversight of remedia-

2 3See Boyd and Macauley, footnote 18, p. 19.2 4Jim Linton, Department of Natural Resources, Environmental Response Division, Site Reclamation program,

personal communication, May 25, 1995.2 5Though New Jersey's superfund program established in 1976 preceded the federal program.26See U.S. Environmental Protection Agency, footnote 10, p. 7.

l l

● provisions for public participation in the reme-diation process.

The cleanup of brownfield sites through astate superfund program relies on an estab-lished process developed by the individualstate. While there is some consistency acrossprograms (as indicated in the above list of typi-cal characteristics), few generalizations can bemade about state superfund procedures as awhole. Many operate much like the federalSuperfund program, with enforcement-ledidentification of responsible parties driving theremediation process, including emergencyremoval actions, determination of cleanup stan-dards, remedy selection, and cleanup. How-ever, for a number of reasons, including theextent of the hazardous waste site problem inthe state and the level of experience in dealingwith them, the process for cleanup will varyfrom state to state with differing levels of effi-ciency and effectiveness.

Most states use a variety of criteria for set-ting cleanup standards. As of 1993, 34 statesreported the use of EPA guidelines for cleanupstandard decisions. Forty states apply back-ground levels as the goal for remediation, and42 states employ risk assessment techniques(many relying on EPA risk assessment guid-ance for direction) to set standards and deter-mine goals. Finally, 19 states have promul-gated their own cleanup standards based on awide range of criteria and selected standardsfor chemical residuals in soil, water, and/orair, and other standards drawn from federalenvironmental law.27

Another technical aspect of state supefundprograms for non-NPL sites involves haz-ardous waste site identification. As sites con-tinue to be identified and concern for risks to

human health and the environment persist,some states have become more proactive intheir attempt to account for and prioritize sitesthat pose some level of concern. In 1993, 26states were charged by state law to develop andmaintain site inventories or similar prioritylists. In addition, 10 other states reportedhaving some recorded number of sites avail-able.28

A defining element related to liability instate superfund programs involves the state’sauthority to bring enforcement actions againstresponsible parties associated with hazardouswaste sites. In most instances, the money raisedthrough enforcement actions goes towardcleanup of the site and supplements other fundsthat are used to operate the program. In 1993,45 states drew enforcement authority for haz-ardous waste cleanups directly from statecleanup statutes. At that time, only sevenothers (including the District of Columbia andPuerto Rico) relied on authorization throughother state statutes, including general environ-mental protection laws.29 In addition, manystates depend on a combination of enforcementactivities under state superfund laws and prop-erty transfer laws (discussed in the next sec-tion) to ensure site cleanup.

State ability to bring enforcement actionagainst responsible parties is based on the typeof liability designated by the program. Moststates consider a wide range of stakeholders asresponsible parties at non-NPL sites, much likethose held liable under the federal Superfundprogram. Parties are considered liable based ontheir association with the site. Like the federalSuperfund program, determinations are madeon evidence that includes whether the party wasresponsible for the hazardous waste release orwas the owner at the time that the contamina-

27Ibid., p. 25.28Ibid., p. 9.29Ibid., p. 8.


tion was discovered. Another key element indetermining liability involves determination ofhow it will be applied or apportioned at a sitewith more than one responsible party. In 1993,32 states applied strict, and joint and severalliability to responsible parties. In the remainingstates, four allowed proportional liability and14 had no established standards for determiningliability .30 In most hazardous waste site clean-ups, liability may ultimately be determined inthe courts through interpretation of individualstate or federal statutes.

Funding is another key issue for state super-fund programs and especially relevant to thestate’s ability to address brownfield sites. Ingeneral, states rely on some level of financial

support through one or more of the following:funds designated by law in support of cleanupactivities, state general funds, and federalgrants. In addition, money raised through en-forcement actions against responsible parties isalso applied toward site remediation and pro-gram operating needs. The state’s ability toidentify and carry out non-NPL site reclama-tion is highly dependent on the number of sitesdemanding attention and the level of availablefunds. States are concerned with decreasingfunds and view their ability to continuecleanups (especially those at abandoned sites)as directly tied to funding levels and the carefulallocation of limited resources.

Finally, about half the state superfund pro-grams have provisions that require some levelof public participation in the process. Nor-mally, this entails public meetings and opportu-nity for review and comment on remediationproposals.

Property Transfer LawsProperty transfer laws are the second major

30Ibid., p. 31.

approach states use to facilitate remediation ofbrownfield sites. They are, by definition, anindirect method for identifying and initiatingcleanup activities. Property transfer provisionsexist in the states as laws, regulations, or poli-cies that make the transfer of real property, orownership or control of such property, contin-gent on the discovery, identification, investiga-tion, cleanup, or disclosure of the existence ofhazardous waste contamination. These provi-sions vary across the states with some simplyrequiring full disclosure of the environmentalcondition of a site, others requiring a more ad-vanced level of site investigation, and a fewstates requiring complete cleanup before atransfer can occur. In 1994, 18 states had someform of property transfer requirements .31

New Jersey established the first propertytransfer law in the country in 1983 with itsEnvironmental Cleanup Responsibility Act(ECRA). Though subsequently revised, ECRAis probably still the most well-known law of itskind. ECRA required that certain industries in-tending to close, sell, or transfer operationsmust investigate and clean up hazardous wastecontamination before a transaction could occur.The basic approach followed by ECRA was re-tained in the amendments and subsequent lawpassed by the state in 1993, called the Indus-trial Site Recovery Act (ISRA). ISRA was in-tended to streamline the transfer process, inpart, by allowing more flexibility in achievingcleanup agreements between parties, includingtying cleanup standards to future use of theproperty. The new law exempts from the re-quirement of complete cleanup before transfer,sites that have been assessed, those where theindustrial activity remains unchanged, or thosefor which the ability to finance a cleanup is

I 13

demonstrated. 32 Other states with comprehen-sive property transfer laws include Connecticutand Illinois.

Voluntary Cleanup ProgramsThe programs receiving the most attention

currently in the brownfields debate are the statevoluntary cleanup programs. Voluntary pro-grams differ from other programs in that own-ers or developers of a site approach the statevoluntarily to cooperatively work out a processby which the site can be readied for develop-ment.

Voluntary cleanup programs are particularlypopular because they allow private parties toinitiate cleanups and avoid some of the cost anddelays associated with state superfund or otherenforcement driven programs. Thus, it is thepotential threat of enforcement under state orfederal superfund laws that is largely responsi-ble for encouraging private sector participationin these programs. Because voluntary programsinvolve a cooperative effort with regulators, incontrast to enforcement-driven cleanup pro-grams, remediation and certification can takeless time, which can be critical in many devel-opment projects. In addition, because somevoluntary programs may be more likely to con-sider future use in deciding on remediationplans, cleanup costs could be lower. Also,many state-run voluntary programs offer addi-tional benefits to private parties such as techni-cal assistance, financial support, and impor-tantly, liability assurances. Finally, there issome evidence that financial institutions maybemore favorably inclined to lend on propertiesthat have gone through voluntary programs

when they are available in a state, rather thansites cleaned up independently.

In many cases, states are also interested inpromoting voluntary cleanups because theytypically require fewer government resourcesand, with funds for enforcement-led programsdecreasing in recent years, it assures thatcleanups can continue with some level of offi-cial oversight. Because state voluntary pro-grams are often operated on a fee-for-servicebasis, states can address more sites than theywould in the absence of such programs. In ad-dition, this helps get underutilized land backinto productive use, generating jobs and taxrevenues.

A recent count indicates that 21 states haveestablished voluntary programs for the cleanupof hazardous waste sites.33 Sites that typicallyenter a voluntary program have no or low tomedium contamination problems and are notcurrently listed or being considered for thefederal NPL or similar state superfund lists, al-though some states will address more difficultsites in their programs. Brownfield sites oftenhave an interested private party present that isresponsible for approaching the state about avoluntary cleanup and will ensure payment foroversight and cleanup costs. Abandoned ororphan sites, on the other hand, typically be-come the responsibility of a state or local gov-ernment for cleanup. Many of these sitescontinue to remain unaddressed.

State voluntary programs vary widely andthere has been no analysis to uncover the rea-sons behind the high level of diversity. In somecases, program development was motivated inorder to improve the potential for low-priority

3 2Environmental Law Institute, “New State and Local Approaches to Environmental protection, ” contractor reportprepared for the Office of Technology Assessment, August 1993, p. 91.

33 The states are California, Colorado, Connecticut, Delaware, Illinois, Indiana, Maine, Massachusetts, Michigan,Minnesota, Missouri, Nebraska, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Virginia,Washington, Wisconsin.


cleanups in a state, as well as streamline theremediation process. Voluntary programs areviewed as an alternative to enforcement-drivenprograms, which are often characterized asconfrontational and demanding of time and re-sources. Primarily, voluntary programs, whichmay be either statutorily or administrativelyoperated, work to overcome many of the barri-ers to cleanup and redevelopment that wereidentified earlier.

The following section examines state volun-tary programs more closely to identify someimportant features that account for their currentpopularity and innovative approach. In particu-lar, information is presented on how voluntary

programs address the technical, liability, and financial concerns associated with brownfield

cleanup and redevelopment. Voluntary pro-grams in three states are also presented in moredetail.

ASPECTS OF STATE VOLUNTARYCLEANUP PROGRAMS

Technical GuidanceBrownfield cleanups involve numerous tech-

nical issues that are addressed by state volun-tary programs in a variety of ways. States firstapproach voluntary remediation by establishinga certain level of oversight or involvement ofthe authorized government agency within theprogram. Voluntary programs can be roughlydivided into three categories regarding the rela-tionship of the government agency to the pri-vate party and the cleanup of a brownfield site.These are:

● The state is involved with a private party toprovide technical guidance and oversight forany stage of the cleanup process from site in-vestigation through remediation that results incertification of completed work.

●

●

The state certifies or acknowledges environ-mental professionals who provide oversightand expertise throughout the remediation pro-cess and present evidence of the completedwork to the state agency, which may or maynot review a site and provide certification ofcompletion.

The state is involved only in the final review ofa site to verify completed work and the envi-ronmental condition of the property.

Many voluntary programs operate on a fee-for-service basis and the voluntary party is typ-ically responsible for all costs associated withthe cleanup. In some cases, programs require asubstantial lump-sum payment from a volunteerupon entering the program, which signifies thatall parties are committed to the project.

One of the first technical steps in the reme-diation process is the initial site investigationthat must be completed before any cleanup canoccur. In some metropolitan areas, little isknown about the type and extent of possiblecontamination that may exist at many brown-field sites. Since contamination problems existon a continuum from no or low risk to ex-tremely hazardous, it is essential that a thor-ough investigation take place initially toidentify possible threats and help determinecleanup standards and remediation plans. In ad-dition, the information gathered during site in-vestigations can add to the state’s overallunderstanding of the condition of many sitesand enable the building of a database of experi-ence that could aid in future site determina-tions.

In order to assure proper site investigation,states require a variety of assessment methodsand often tailor them to address their own spe-cific technical concerns. Typically, voluntaryprograms call for a Phase I investigation at abrownfield site, which often includes:

I 15

●

●

●

●

a review of government records and standardhistorical sources,

site reconnaissance,

interviews with owners, occupants, local gov-ernmental officials, and

evaluation and report preparation.

This process has been promoted by theAmerican Society for Testing and Materials(ASTM) for transactions involving commercialand industrial properties and usually employsthe services of an environmental professional .34If the results of a Phase I assessment indicate apossibility of contamination, additional investi-gation is required and the process calls for aPhase II site assessment. Some states are pri-marily interested in Phase 11 investigations,which are designed to identify and locate con-tamination if it is present on a site. Phase IIassessments are generally conducted by an en-vironmental consultant based on preliminaryinvestigations and include soil and groundwatersampling with laboratory analysis.

Perhaps the most significant feature in manyvoluntary programs is the means for determin-ing cleanup standards. This is a controversialissue and the cause of much confusion amonginterested parties because of the complicatedscience involved and variety of methods ap-plied to determine toxicity and exposure to con-taminants. Many voluntary programs apply thesame cleanup standards to voluntary sites thatare used under their state superfund program.Others have developed their own standardsspecifically for voluntary cleanups basedvariety of criteria. Overall, most cleanup

on astan-

dards developed for a wide range of contami-nants found at any brownfield site aredeveloped using one or more of the follow-ing:35

●

●

●

●

●

●

EPA guidelines for toxic chemicals,

maximum contaminant level (MCL) or maxi-mum contaminant level goal (MCLG),

water quality criteria,

site specific risk assessment,

background levels for contaminants, and

state promulgated cleanup standards.

Currently, most voluntary programs requirethe use of EPA standards for toxic chemicalsthat set risk at 1 in 1 million (10-6) for cancerrisks and a “no adverse effects” level (HazardIndex less than or equal to one) for noncancerrisks for site remediation. However, somestates have deviated from these guidelines andapply any one or a combination of the criterialisted above to determine cleanup standards.36

Agreement across the states about the accuracyand validity of applying EPA or other standardsis unlikely.

The next step in the cleanup process is com-bining the findings about toxicity and expo-sures with cleanup standards in order to selecta remedial plan. As with all other features ofvoluntary programs, states also differ in whatis acceptable at this stage. The menu of optionsthat is of interest in remedy selection is exten-sive. Voluntary programs may employ expo-sure assumptions and cleanup standards basedon pre-determinedlevels (for example,

levels, future use-basedindustrial, commercial, or

3 4Jenner & Block, “The Evolution of Standards for Environmental Site Assessments: The ASTM (sidelines, ”Jenner & Block L.A. W. News, fall 1993.

3 5 S e e E n v i r o n m e n t a l P r o t e c t i o n A g e n c y , f o o t n o t e 2 5 , p . 2 5 .3 6For example, Massachusetts allows a composite risk from al1 contaminants at a site to be set at 1 in 100,000 (10-5)

for cancer. Sarah Weinstein, Division of Policy Program Development, Massachusetts Department of EnvironmentalProtection, personal communication, June 1, 1995.


residential), and/or site-specific evaluations.This variation will result in the application ofpresumptive (for example, standardized) reme-dies favored by some states, approved or certi-fied remedies, or tailored remedies basedexclusively on an individual site. Each of theseapproaches requires some tradeoff of cost andtime commitment. Theoretically, in caseswhere generic standards and presumptive reme-dies are applied, there tends to be more imme-diate agreement and certainty, which can leadto less time involved in the cleanup process. Onthe other hand, generic approaches may costmore than if a remedy is tailored to specific siteconditions and future use, since it may result ingreater levels of cleanup. As states gain moreexperience in remedy selection and cleanup,more alternatives may become “standard,”which should serve to lower resource costs andtime commitments.

Finally, some states incorporate land-usecontrols as part of the brownfield cleanup andredevelopment process. In some cleanups,management or engineering controls (for exam-ple, placement of a parking lot over contami-nated soil) are established to contain pollutantsat a site, thereby lowering or eliminating risksto human health and the environment as long asthe use is not changed and the controls dis-rupted. The decision to rely on engineeringcontrols requires some mechanism for record-ing and transferring this information to futureusers of a site. There is some experience instate institutions with this role and current con-trol methods include zoning restrictions andrecording deeds to prevent land-use changesand transfer information. Evaluation of the ef-fectiveness of these approaches and controls inother contexts (for example, utility rights-of-

way) could provide important information todecisionmakers as future land-use-based clean-ups are employed more widely.

Liability AssuranceAlthough many brownfield sites do not rank

high among government concerns in terms ofrisk due to environmental exposure, there isstill significant concern among stakeholdersthat they could be held liable for cleanupthrough any number of unpredictable means.Those interested in protection from liability arethe most significant stakeholders; these includeresponsible parties (current or past owners whomay have contributed to the contamination),prospective purchasers, lenders, and munici-palities. In an effort to overcome the concernfor liability and promote attention to brown-field sites for cleanup and reuse, some statevoluntary cleanup programs offer a variety ofassurances that limit some liability potential.

Liability assurances are wide ranging anddiffer by the party that is granted protectionand the type of protection that is made avail-able. A voluntary program can only offer lia-bility protection as it is specifically defined bythe individual state law and only applies to ac-tivities recognized by that state. In other words,assurances at the state level do not shield stake-holders from liability under federal law or thirdparty lawsuits.37 As a result, even though inmany cases the likelihood of federal or stateenforcement under superfund provisions is lowfor these sites, there is still some questionabout whether these assurances can provide theneeded security to increase the level of brown-field cleanup and redevelopment. While thereis currently significant interest in removing orlimiting liability for many stakeholders at the

3 7EPA is currently developing a number of new guidances for cleanup liability for certain parties including

prospective purchasers, municipalities, and lenders. Also, the use of Superfund Memorandum of Agreementsbetween EPA Regional Offices and states (such as EPA Region V with Illinois and Minnesota) could help ease someliability concerns.

1 7

federal and state level, there is still only mini-mal experience with this practice as applied tobrownfields cleanup .38

Voluntary programs reduce some level ofuncertainty related to liability by specifyingparties who would not beheld liable at a site,or by defining government interest in the con-dition of a site. In the first category, some vol-untary programs offer identification ofparticular parties who under certain conditionswould not be found liable for contamination orthe impacts of contamination at a site. Thetypes of liability protection offered by somestates include:

●

✎

●

●

letters of “no association” to the contaminationeither as innocent or involuntary owner, asprospective purchaser, or as neighbor to thesite;

absorption of private liability by the state or amunicipality; and

liability exemption for some public entities,such as city or county governments, and portauthorities.

The second category of assurances involvesgovernment interest in the condition of the siteand includes recognition of the following:

● covenants not to sue for any actions related tothe site;

●

●

“certificate of completion” (or partial comple-tion) for a cleanup; and

a letter of “no further action” or interest in thesite.

In most of these cases, there is no actual releasefrom liability granted, but these assurances tryto reduce the likelihood that any enforcementaction would be pursued.

Of the 21 voluntary state programs that cur-rently exist, only seven offer a covenant not tosue, or other immunity from liability, whichprotects the recipient from state enforcementaction, subject in some cases to reexaminationif new information about contamination isfound. 39 In each of these programs, the protec-tion is only granted on a site-by-site basis andmay be limited only to parties who were notresponsible for the contamination. All other let-ters of assurance vary in terms of their value toresponsible parties, and do not offer releasefrom liability. Some lenders have voiced ap-proval of certificates of completion and no fur-ther action letters as easing concerns involvingloan decisions.

The liability concerns of brownfield cleanupactivities are extremely complex due to theoverlapping interests of federal, state, andthird-party enforcement actions. While somestate voluntary programs are experimentingwith different levels of liability assurance, fewhave been offered for a long enough period to

3 8Insurance policies may provide some protection from excessive cost due to remediation or lawsuits involvincleanup of contaminated properties. OTA did not investigate this issue in detail and plans to include this analysis inthe brownfields report planned for release in fall 1995.

3 9The seven states are Minnesota, Oregon, Massachusetts (pilot program), Indiana, Ohio, California, and Virginia.Stateside Associates, personal communication, May 1995.


evaluate. Over time, more experience shouldbe gained in these matters, and as programscontinue to evolve, there should be some reso-lution of the validity and usefulness of suchprotection.

Funding SupportDue to uncertainties involving the cleanup

process and associated costs, interested stake-holders often avoid brownfield sites for finan-cial reasons. While many state voluntaryprograms are operated on a fee-for-servicebasis and often include a one-time initial pay-ment for consideration by the program, somevoluntary programs do offer financial incen-tives for participation. Funding assistance forinitial site assessment, cleanup, or redevelop-ment typically comes in the form of publicgrants, loans or loan guarantees, and tax incen-tives.

One of the most popular approaches offeredby a few programs is the availability of publicgrants for initial site investigations. With PhaseI site assessments averaging $1,000 to $5,000,and Phase II investigations costing on the orderof $50,000 to $70,000, initial costs to somevolunteers can be prohibitive from the start.Government grants, which are still fairly mod-est, can motivate some parties, including mu-nicipalities, to begin assessment and cleanupefforts. In addition, some states offer grants orloans for initial site investigations to neighborsor prospective purchasers of brownfield sites .40

Michigan is one state that offers public grantsto cities for initial site assessment and alsoreclamation. The state also offers financial as-sistance for areawide site investigation.41

Some voluntary cleanup programs, such asthose of New Jersey and Ohio, offer low-inter-est loans to help finance site cleanup costs.These loans are often available only to privateparties with a demonstrated inability to obtainfinancing through other means. Typically,these borrowers are refused by banks due to thefear of lending on contaminated property. It iscommon to offer public financial assistance tobrownfield cleanup activities based on fairlystringent criteria including demonstrated need,the relationship of the volunteer to the contami-nation at the site (some states will not assistresponsible parties), and demonstrated poten-tial of the site for economic development.

EXAMPLES OF STATE VOLUNTARYCLEANUP PROGRAMS

While a number of methods are employed inthe states for cleaning up and redevelopingbrownfields, voluntary programs are growingfastest. Seventeen of the 21 state voluntarycleanup programs have only been in existencesince 1991, and nine of these were establishedin the past year. Though it is too early to evalu-ate the merits and problems of many of theseprograms, it is useful to take a more detailedlook at a few programs to better understandtheir mission and variety. The following threeexamples include a range of programs repre-senting variations, in time in existence, geo-graphic location, technical features involved inthe cleanup process, liability assurances, andfinancial support. Characteristics that mark theprogram as particularly innovative are alsohighlighted.

4 0See Institute for Responsible Management, Inc., footnote 7, p. 106.4 1See Linton, footnote 23.

I 19

MinnesotaMinnesota established the first voluntary

cleanup program in the country in 1988. It isformally known as the Voluntary Investigationand Cleanup (VIC) Program and is adminis-tered by the Minnesota Pollution ControlAgency (MPCA). Operating on a fee-for-ser-vice basis, the broad mission of the program isto facilitate voluntary investigation and cleanupof contaminated property and to encourage pro-ductive economic reuse of the property .42 Theprogram will not accept sites listed on theNational Priority List43 or that fall under theenforcement authority of other federal or stateenvironmental laws. In a recent development,MPCA and EPA Region V have entered into anamended Superfund Memorandum of Agree-ment (SMOA) in which “the MPCA is the des-ignated lead agency for remedial activities at .. . voluntary investigation and cleanup sites inthe State of Minnesota. ” Through this agree-ment, EPA Region V will not plan or anticipateany federal action under Superfund law at sitesthat have received a no action determination ora certificate of completion from MPCA, un-less, in unusual cases, the site poses an immi-nent threat or emergency situation.44 As ofMay 1995, over 100 sites had been cleaned upthrough the VIC program and over 300 siteshave obtained closure by receiving one of thesix written assurances described below.45

Program features

Minnesota’s VIC program offers a highlevel of technical assistance and oversight tothe entire cleanup process. Most significantly,MPCA staff are involved in the approval ofcleanup plans and at the final stage of remedia-tion to certify completion of the work. Cleanupstandards are the same as those required by fed-eral and state superfund cleanups, and arebased on EPA guidelines to obtain 1 in 1million cancer risk (10 -6) and a “no adverseeffects” level (Hazard Index less than or equalto one) for noncancer risks. Cleanup plansmay, however, reflect future planned use for asite and the program allows land-use restric-tions on property.

Minnesota’s program is noteworthy due tothe variety of written assurances it offers toparticipants in the program. Through VIC, sixtypes of assurances are available with some dif-ferentiation based on whether the volunteer isresponsible for the contamination on the site.These include:

1. Technical assistance approval letters:Offered when MPCA is consulted to estab-lish the adequacy of an investigation orcleanup plan.

2. No action letters or agreements: Theseagreements signify that MPCA will not

4 2Minnesota Pollution Control Agency, “Recycling Contaminated Land in Minnesota, ” 1995, p. 8.4 3The VIC program does, however, accept cleanup on parcels of property at NPL sites, and volunteers cooperating

with responsible parties at NPL sites can qualify for liability assurances through the program.44Valdas V. Adamkus, U.S. Environmental Protection Agency, Region V, letter to Charles W. Williams,

Commissioner, Minnesota Pollution Control Agency, on the Superfund Memorandum of Agreement, May 3, 1995.45Joe Zachmann, Project Manager, Minnesota Voluntary Investigation and Cleanup Program, personal

communication, May 18, 1995.


3.

4.

5.

6.

pursue enforcement against the volunteerunder the state superfund law and are of-fered in two cases; when contamination isdetected, but at levels too low for concern,or when contamination is discovered and acleanup plan is approved by the agency.

Limited no action letters: These letters areprovided to sites when only a portion of theproperty is under consideration for clean-up. MPCA retains the ability to pursuefuture action if new informationavailable about the property orlamination.

Land Recycling Act Certificatespletion: This assurance provides

becomesthe con-

of Com-full pro-

tection from enforcement action throughthe state superfund law when MPCA certi-fied cleanup plans have been completed.They are offered to parties who are notlegally responsible for the contamination atthe site. This assurance is the only one of-fered by MPCA that does not include a “re-opener” if new contamination is found orthe cleanup proves to be insufficient in thefuture.

Off Site Source Determination Letters andAgreements: This type of assurance pro-tects a private party from enforcement ac-tions that would require the cleanup of asite and is available to an owner of a sitethat is contaminated due to a source on aneighboring property.

No Association Determinations: This as-surance protects voluntary parties fromstate superfund liability for contamination

that they did not cause, while enablingthem to pursue cleanup or occupation anduse of a site.

Minnesota offers this variety of assurancesas a means of bringing some level of certaintyto the potential for liability involved in site re-mediation and redevelopment. It should benoted that none of the assurances provide com-plete liability release from federal laws (thoughthe SMOA could ease some concerns) and pri-vate party lawsuits. Only the state’s certificateof completion (essentially a “covenant not tosue”) offers protection from state enforcementaction without consideration of new informa-tion (a “reopener”) regarding the contaminationat a site. Minnesota reports that no VIC assur-ance has been reopened for any reason in thestate. 46

The Minnesota voluntary program offerssome financial assistance for brownfield clean-up and redevelopment. Contamination CleanupGrants are available through the state for cities,housing and redevelopment authorities, eco-nomic development authorities, and port au-thorities to clean up contaminated land. Inaddition, voluntary parties with an MPCA-approved site assessment or cleanup plan areeligible for a reduction in property taxes basedon lower assessed property values due to thepresence of contamination on a site.47

CaliforniaThe California Voluntary Cleanup Program

was established by law in 1994 to promote thecleanup of low-priority hazardous waste sites inthe state. The program is operated by the Cali-

46Joe Zachmann, Project Manager, Minnesota Voluntary Investigation and Cleanup Program, informationpresented at the Environmental Law Institute’s Brownfields Workshop, Washington, DC, Mar. 28, 1995.

4 7See Minnesota Pollution Control Agency, footnote 42, p. 18.

I 21

IThe Culver City Kite Site* is a 4.5-acre property located in Culver City, California. Former

operations at the site included a wood products manufacturing facility, a concrete block facility, diecasting machine shops, auto body and painting shops, and plastics manufacturing. Environmentalconcerns at the site included soil and groundwater contamination involving solvents, petroleumhydrocarbons, and heavy metals. Under the California Voluntary Cleanup Program, the Departmentof Toxic Substances Control (DTSC) provided oversight of the Preliminary Endangerment Assess-ment and subsequent health risk assessment process. Remediation for the site was completed and inApril 1994 cleanup of the property had achieved standards protective of public health and theenvironment for industrial and commercial uses. DTSC granted a certificate of completion at the siteand a deed restriction for the land-use designation was established. The property is currently beingdeveloped as an industrial park, including some retail sales outlets for electronic, home building, andautomobile equipment. The property is expected to provide approximately 100 new jobs.

*California Environmental Protection Agency, Department of Toxic Substances Control, “The Voluntary Cleanup Program, ”program information sheet, May 1995, p. 6; and Javier Hinojosa, Site Mitigation Branch, Department of Toxic Substances,California Environmental Protection Agency, personal communication, June 1, 1995.

fornia Environmental Protection Agency’sDepartment of Toxic Substances Control(DTSC). It is designed to offer a more stream-lined process for ensuring cleanups that protecthuman health and the environment in order toput property back into productive use. 48 Cali-fornia’s program operates on a fee-for-servicebasis and excludes sites that are listed on thefederal or state superfund lists or that fall underthe oversight provisions of other federal and

state environmental laws. In March 1995, 100voluntary projects were under way in the state.

Program features

Participation in the California voluntary pro-gram includes an initial agreement between thestate and the private parties regarding the ex-tent of the cleanup activity planned for the site.Based on the initial agreement, DTSC staff

California Environmental Protection Agency, Department of Toxic Substances Control, “The Voluntary CleanupProgram, ” fact sheet, March 1995, p. 1.


may provide technical assistance in any stage ofthe process from initial site investigation tooversight and certification of a fill site cleanup.The voluntary program allows the use of site-specific risk assessment to determine cleanupstandards and remediation goals that can be tiedto future use of the site if the property owneror participant agrees to deed restrictions. 49

On completion of a cleanup action, DTSCwill issue a site “certification of completion” ifthe implemented remedy meets DTSC stan-dards. A “no further action” (NFA) letter isgenerally issued on completion of DTSC’s ini-tial site assessment, referred to as the Prelimi-nary Endangerment Assessment (PEA). If thePEA shows that a property does not pose sig-

nificant risk or hazard to human health or theenvironment and remediation is not necessary,an NFA letter will be granted. Both the NFAand the certificate of completion limit furtherliability for responsible and nonresponsibleparties in the state.50

OhioThe Ohio voluntary cleanup program is one

of the newest in the country. The state passedthe Real Estate Reuse and Cleanup Law in June1994, which established the voluntary pro-gram. It is currently in interim status (and sub-ject to change) as implementing regulations arebeing written and expected to be fully opera-tional by October 1995. The Ohio program willbe administered by the Ohio EPA, thoughmuch of the cleanup process will be privatized.Sites registered on the federal NPL or thoseregulated under other federal and state environ-mental laws are not eligible for the program.One cleanup has been conducted through the

program at this time.

Program features

The Ohio voluntary program joins a smallnumber of other states by operating a certifica-tion program for environmental consultantsqualified to review and conduct the site investi-gation, develop cleanup plans, remediate thesite, and certify completion of the work. Lab-oratories are also certified by the state toperform analyses for a range of contaminantsand media. The state will develop numericalcleanup standards for soil, surface water, andgroundwater, and will also allow the applica-tion of site-specific risk assessment to developstandards based on state-approved procedures.Cleanup goals consider the intended future useof the site and the state has designated at leastthree categories for this purpose including in-dustrial, commercial, and residential uses.Sites that are cleaned up for a specific futureuse will be subject to deed restrictions. Thestate law requires the Ohio EPA to audit aminimum of 25 percent of the NFA letters sub-mitted by the certified environmental profes-sionals each year, as well as conduct audits toverify the qualifications of the certified envi-ronmental professionals and laboratories.

The Ohio EPA may offer a covenant not tosue under state law to a remediated site thatreceives a certification of completed work (anNFA letter) from a certified professional. Atthe request of the volunteer, the agency willreview information about the environmentalcondition at the site provided in the NFA letter,along with supporting documentation, to deter-mine whether the cleanup adequately meets the

49Barbma Coler, “California Voluntary Cleanup Program, ”information presented at the Environmental LawInstitute’s Brownfields Workshop, Washington, DC, Mar. 28, 1995.

50Barbara Coler, Division Chief, Statewide Cleanup Operations, Department of Toxic Substances Control,California Environmental Protection Agency, personal communication, May 26, 1995.

I 23

program’s requirements and is eligible for acovenant not to sue from the state. The releasefrom liability is available to any volunteer whocomplies with the applicable standards outlinedby the program. The liability release runs withthe property and may be transferred to futureparties involved with the site. The programalso provides lender and fiduciary liability pro-tection, as well as some liability protection forcleanup contractors and local governments .51

The Ohio voluntary program offers financialassistance to participants in the program. Thestate makes low-interest loans available for sitecleanup and redevelopment activities. Tax in-centives are also included, allowing volunteersto forego paying taxes for 10 years on the in-crease in property value resulting from remedi-ation. In addition, participants may also requestan additional tax abatement for 10 years on realand personal property taxes from their localgovernment. 52

RECENT STATE ACTIVITYState brownfield activity is growing and

evolving rapidly. State authorities and orga-nized stakeholder groups are promotingchanges in the way that many of these proper-ties are handled through statutory and adminis-trative means. Since 1994, nine states havepassed legislation creating voluntary cleanupprograms .53 While many of these changes aredirected toward improving the prospects forbrownfield cleanup and redevelopment, someexpand the scope beyond brownfields to allhazardous waste sites including those cleanupspursued through enforcement driven programs,such as state superfunds and property transfer

laws. Legislation designed to change statepolicy on such factors as cleanup standards andliability at a site, will impact the nature of allhazardous waste cleanups in a state.

As states rethink their policies toward haz-ardous waste site cleanups, many are taking amore comprehensive approach in the law de-signed to ease some of the constraints consid-ered barriers to brownfields activity. As dis-cussed earlier, states are making an effort toclarify cleanup standards and processes, pro-vide more certainty for liability involvingbrownfields sites, include some level of gov-ernment oversight without slowing the processunnecessarily, and offer financial incentives topromote cleanups. However, even among someof the newer programs and recent changes,considerable variation is evident in some im-portant elements.

The most recent legislative activity inMichigan, Pennsylvania, and Illinois character-izes many of the issues at the heart of thedebate on brownfields. Michigan recentlypassed legislation amending the state’s NaturalResources and Environmental Protection Act,effectively changing the way hazardous wastecleanups will be handled. It is expected to besigned into law during the first week of June,at which time it will require: proof of cause forcontamination in order to find parties liable ata site, thereby eliminating strict, or statusbased, liability for cleanups; establishment ofland-use-based standards for cleanup in eightcategories, including residential, commercial,industrial and recreational; and a change in thelevel of acceptable risk for carcinogens from 1in 1 million (10-6) to 1 in 100,000 (10 -5). 54

51 Ohio Environmental Protection Agency, “Real Estate Clean-up and Re-use Program, ” fact sheet, June 1994, p. 2.5 2Ibid.5 3These states are California, Colorado, Connecticut, Nebraska, North Carolina, Ohio, Tennessee, Virginia,

Wisconsin. Stateside Associates, personal communication, May 1995.5 4State of Michigan, House Bill No. 4596, 88th Legislature, regular session, 1995-


Proof of a party having taken an action tocause a release will be necessary to hold partiesliable for a cleanup. It is possible that this newstandard will make it more difficult to bringcases against potentially responsible parties andmay increase the number of hazardous wastesite orphan shares, putting further pressure onpublic funding at these and other abandonedproperties in the state. Over time, it may beworth evaluating the impact this has on thelevel of voluntary cleanups in the state.

Pennsylvania also passed legislation that ex-pands the state’s comprehensive approach tobrownfields and modifies some key elements ofthe current law. The Land Recycling and Envi-ronmental Remediation Standards Act estab-lishes a process for cleanup and redevelopmentof industrial and commercial properties in thestate, including designated environmental re-mediation standards (Background Standard,Statewide Health Standard, and Site-SpecificStandard), in some cases allowing for engineer-ing or institutional controls to attain them. Thelegislation also limits the potential for futurecleanup liability for parties who meet the envi-ronmental remediation standards in the provi-sions of the act, and the protection is alsoextended to future parties involved with thesite. Parties are protected from enforcementactions by the state, third-party contributionactions, and citizen suits. The legislation alsoestablishes two funds, the Industrial Land Re-cycling Fund and the Voluntary Cleanup LoanFund. The first appropriates money to be usedby the state’s Department of Commerce to helpclean up contamination on properties formerlyused for industrial activities. The VoluntaryCleanup Loan Fund provides low-interest loansto local economic development agencies andother applicants to help cover the costs of siteassessment and remediation.55

The Illinois state legislature is currently de-bating brownfields legislation that will alter theapproach applied in the state since 1989. Therewas early discussion about privatizing thecleanup process, and only involving the IllinoisEnvironmental Protection Agency (IEPA) oncompletion of remediation to enable closure ata site with an NFA letter by the state. How-ever, this proposal did not receive favorable re-view from either IEPA or the U.S. EPA, and itappears the state will retain much of the currentprocess. The legislature also addressed the is-sue of liability for hazardous waste cleanupswith some parties promoting replacement ofjoint and several liability with “proportionate”share liability. On this issue, IEPA officialshave expressed concern with the lack of avail-able public funds for use at sites with orphanshares. The legislation, including a provisionfor proportionate share liability, has passedboth the House and Senate, yet there is someuncertainty about whether the bill will becomelaw as it currently stands.

RECENT FEDERAL ACTIVITYIn addition to significant brownfield activity

at the state level, EPA and Congress are in-creasing efforts to address the problem at thefederal level. EPA’s Brownfields ActionAgenda works to remove identified barriers tocleanup and redevelopment. Congress is cur-rently addressing brownfield issues in legisla-tion involving reauthorization of Superfund andseparate bills on lender and fiduciary liabilityfor cleanups. While this paper is meant to focuson state-level activity on brownfields, efforts atthe federal level will have significant impact onthe states and, therefore, this section is in-cluded as a brief overview to federal activity.

EPA’s Brownfields Action Agenda includesa variety of administrative approaches to pro-

5 5Commonwealth of Pennsylvania, Senate Environmental Resources and Energy Committee, “Analysis of SenateBill l,” final version, 1995.

2 5

mote cleanup and redevelopment of brown-fields. The Agency’s effort stresses the impor-tance of both aspects of brownfields, focusingon the problems associated with environmentalcontamination, as well as economic develop-ment. The primary functions of the agency’sAgenda include:56

1. Removal of approximately 25,000 potentialhazardous waste sites currently includedamong 38,000 such sites on the SuperfundTracking System list (CERCLIS). The siteswere deleted from the active investigationscategory by EPA and granted a designationof “No Further Remedial Action Planned. ”

2. Plans to fund 50 Brownfields EconomicRedevelopment Pilot projects across thecountry over the next two years to promotelearning and sharing of methods and infor-mation for promoting cleanup and redevel-opment.

3. Development of new guidance on liabilityanticipated for completion in 1995, includ-ing prospective purchaser agreements,municipal acquisition liability, and lenderliability under Superfund and UndergroundStorage Tank provisions.

Other ongoing agency activities include:intergovernmental personnel assignments,through which EPA staff are assigned to local-level activities on brownfields; job training anddevelopment focused on programs for haz-ardous materials education; presumptive rem-edy guidance for cleaning up certain types of

hazardous waste sites; and partnerships withother federal agencies such as the EconomicDevelopment Administration and the U.S.Department of Housing and Urban Develop-ment, to promote a coordinated effort to ad-dress brownfields in the country.

Congress is also considering various meansto promote brownfield cleanup and redevelop-ment. The current focus is primarily on Super-fund reauthorization; changes are planned thatwill have an impact on brownfields. Last year’sSuperfund bill (H.R. 228) has been reintro-duced, and includes a provision “to establish anEPA program to provide technical, financial,and other assistance, including grants, to statesto establish and expand voluntary response pro-grams. ” Chairs of subcommittees with primaryjurisdiction for Superfund are expected to in-troduce legislation in June 1995. Hearings arecurrently being held to better understand theSuperfund program and attention has focusedon the state role in hazardous waste cleanupand possible changes to liability applied by thelaw. In addition, individual bills focusing onspecific aspects of Superfund have been intro-duced, including one that provides lender lia-bility limits for cleanups (H.R. 200).

UNRESOLVED ISSUESAs states debate important issues on brown-

fields, a number of unresolved challengesemerge. First, in an attempt to clarify liabilityfor cleanups to promote brownfields redevelop-ment, there is growing interest in altering themost common approach of strict, and joint andseveral liability. Replacement of either strict orjoint and several liability with other standards

5 6U.S. Environmental Protection Agency, “The Brownfields Action Agenda, ” Jan. 25, 1995.


(such as proof of cause for contamination, orproportionate share liability based on contribu-tion) has resulted in concern about increasingthe number of sites where all or some partieswill not be held liable for contributing tocleanup costs (referred to as orphan shares).States’ ability to pursue cleanups at sites withorphan shares or that have no identifiable re-sponsible parties may be limited without addi-tional finding sources.

Another issue related to uncertain liability atbrownfields is the effort to provide enforce-ment immunity to particular parties throughvoluntary cleanup programs. Even as a key fea-ture in many of the programs, liability assur-ances are limited and extend protection only

from state enforcement actions, leaving liabilityunder federal law or third-party actions inplace. As a result, state assurances may not gofar enough for some stakeholders to promotefurther brownfield cleanups and redevelop-ment.

A third issue addresses the fact that althoughsome state agencies have successfully devel-oped programs that clean up brownfield sites,the overall level of experience is still limited.States interested in establishing new approachesfor addressing any number of barriers have fewmodels to evaluate and choose among. Whilemany states share similarities in the types ofproblems associated with brownfields, theirtreatment is currently very place-specific. Theincreasing number of brownfields conferencesand discussion forums at the local and regionallevel should help spread awareness of the prob-lems and possible solutions. However, withlimited staff and financial resources in manystate environment agencies, information aboutnew program developments and effectiveapproaches may not be transferred widely andquickly enough. For this reason, there may bea role for the federal government in providingfunds for promoting the development andcapacity of state voluntary cleanup programs.

In addition, there may be a role for EPA inproviding technical assistance and other infor-mation on methods and procedures to facilitateadditional cleanup and redevelopment.

Another issue that requires attention is thenature of the relationship between the federalgovernment and the states with respect tobrownfields cleanup. As states continue to de-velop and improve voluntary programs theyexercise their own discretionary authority forsuch matters as the adequacy of cleanup stan-dards, expectations for future use of a site, andliability protection for particular parties. Theseprograms would likely gain more credibilitywith the private sector if they received someform of agreement or approval from the U.S.EPA. This could come in the form of a Super-fund Memorandum of Agreement, such asthose held between Region V EPA and thestates of Illinois and Minnesota, or through acertification process as outlined by legislationintroduced in the 103rd Congress. Consider-able variation among state voluntary cleanupprograms could make development of SMOA’Sor certification difficult. More thought isneeded on how EPA will recognize the author-ity of state voluntary programs and developcriteria for agreements that would be flexibleenough to meet individual state needs, yetrigorous enough to ensure adequate cleanups.

Finally, as state programs attempt to balancehuman health and environmental risks with thecosts and requirements for cleanup and redevel-opment, questions about standard setting andreliance on future land use as guidance for de-termining cleanup levels will persist. In someinstances, interest in adjusting standards tomore closely match expected use of a particularsite could raise ‘concern about the adequacy ofprotection for human health and the environ-ment. In addition, as more cleanup levels aretied to the future use of a site, reliable mecha-nisms will be needed to record and transfer in-formation about their environmental condition.

Appendix A:

Acronyms

CERCLA = Comprehensive Environmental Response, Compensation, and Liability Act

DTSC = Department of Toxic Substances Control

ECRA = Environmental Cleanup Responsibility ActEPA = U.S. Environmental Protection Agency

IEPA = Illinois Environmental Protection AgencyISRA = Industrial Site Recovery Act

MPCA = Minnesota Pollution Control Agency

NFA = no further actionNPL = National Priority List

PEA = Preliminary Endangerment Assessment

RCRA = Resource Conservation and Recovery Act

SARA = Superfund Amendment and Reauthorization ActSMOA = Superfund Memorandum of Agreement

VIC= Voluntary Investigation and Cleanup Program

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