Brownfield Redevelopment:

Stakeholders Report That EPA's Program Helps to Redevelop Sites, but Additional Measures Could Complement Agency Efforts

GAO-05-94: Published: Dec 2, 2004. Publicly Released: Jan 13, 2005.

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Brownfields are properties whose use may be hindered by the threat of contamination. Cleaning up and redeveloping these properties can protect human health and the environment and provide economic benefits. Under the Brownfields Act, the Environmental Protection Agency (EPA) provides grants to state and local governments and others for site assessments, job training, revolving loans, and cleanups and to assist state efforts. GAO was asked to (1) obtain stakeholders' views on EPA's contribution to brownfield cleanup and redevelopment, (2) determine the extent to which EPA measures program accomplishments, and (3) obtain views on options to improve or complement EPA's program. Stakeholders GAO surveyed included grant recipients, state program officials, interest groups, and others.

Stakeholders said that EPA's Brownfields Program supports the initial stages of site redevelopment by funding activities that other lenders often do not, such as identifying contamination and cleaning up sites. While important, the impact of EPA's funding is difficult to isolate because it is often combined with funds from other sources. For example, representatives of a company that combined an EPA loan with city, state, and other federal agency funds to redevelop a brownfield site near Seattle, Washington, said that EPA's loan, while small, provided critical up-front funds for cleanup. Furthermore, while an unknown number of projects rely solely on private and other federal agencies' funding, EPA funds often go to sites with more complex cleanups, less desirable locations, or liability issues. In addition, officials in 10 states reported that EPA's assistance has been crucial to establishing and expanding the scope of their voluntary cleanup programs. EPA's current performance measures do not measure major components of the Brownfields Program, such as progress toward cleaning and redeveloping sites or assisting state programs. Furthermore, EPA has not yet developed measures to assess the extent to which the Brownfields Program achieves key outcomes, such as reducing environmental risks. Similarly, EPA's Inspector General found that the brownfields performance measures do not demonstrate the program's contribution to reducing or controlling health and environmental risks. Acknowledging its measures' limitations, in fiscal year 2004, EPA began collecting additional data--such as the number of acres ready to be reused--about properties under the program and is developing performance measures for state voluntary cleanup programs. Stakeholders identified three options for improving or complementing EPA's Brownfields Program. First, they suggested eliminating the provision in the Brownfields Act that, in effect, disqualifies from grant eligibility those landowners who purchased a brownfield site before January 2002. Second, they suggested changes to the stringent technical and administrative requirements that they believe have discouraged the use of revolving loan funds. While EPA officials maintained that the act eased administrative burdens, stakeholders believed that technical requirements continue to impede lending. Stakeholders also suggested that EPA give priority to applicants with proven administrative expertise or to coalitions that can consolidate administrative functions. Third, stakeholders believed that a federal tax credit for developers' remediation costs could attract developers to brownfield sites on a broader national basis. Although EPA and other organizations were also generally supportive of a tax credit, we did not analyze the costs and benefits of such a tax credit or any other potential incentives.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: EPA stated that it has taken several actions to facilitate the use of the Brownfields revolving loan fund cooperative agreements. These actions include providing clarification of program requirements and policy decisions; and development of guidance, tools, and technical assistance. In this regard, according to EPA: "On January 12, 2007, EPA issued a memo allowing certain grant recipients to close out their cooperative agreements and join an existing revolving loan fund coalition as a new member, in an effort to facilitate more timely loans and subgrants for brownfields cleanup." In August 2008, EPA distributed a document to those interested in applying for a grant and to new cooperative agreement recipients providing an overview on how to establish a revolving loan fund program. In December 2008, EPA updated the Revolving Loan Fund Administrative Manual, which provides detailed information on the program and is a technical resource for EPA Project Officers to provide information to their grantees and assist their cooperative agreement recipients in understanding program requirements. In June 2009, EPA held its first national revolving loan fund grantee meeting to provide cooperative agreement recipients with technical assistance and training to assist them in successfully establishing and implementing their revolving loan fund programs. The meeting provided detailed information on guidance and policies and allowed recipients to discuss and share common problems and solutions.

    Recommendation: To enhance federal efforts to clean up and redevelop brownfield properties, EPA should consider stakeholder suggestions for improving and complementing the agency's activities as it weighs potential changes to the program. Specifically, the Administrator of EPA should closely monitor the brownfield revolving loan fund grants to determine why they have been underutilized and what, if any, changes are needed to facilitate or encourage grant recipients' use of these funds.

    Agency Affected: Environmental Protection Agency

  2. Status: Closed - Implemented

    Comments: EPA supported provisions in the Agency's FY 2004, 2005, and 2006 Appropriations Acts that would eliminate the provision that prevents pre-January 2002 purchasers of brownfield properties from qualifying for EPA grant funds. However, Section 1956 of the Transportation Equity Act of 2006 amended section 104 of CERCLA, 42 U.S.C. 9601 et seq., to extend availability of grants and loans for use at sites where the owner would otherwise meet the definition of a bona fide prospective purchaser except for the fact that the site was purchased on or before January 11, 2002, effectively implementing GAO's recommendation.

    Recommendation: To enhance federal efforts to clean up and redevelop brownfield properties, EPA should consider stakeholder suggestions for improving and complementing the agency's activities as it weighs potential changes to the program. Specifically, the Administrator of EPA should weigh the merits of revising the Brownfields Act to eliminate the provision that prevents pre-January 2002 purchasers of brownfield properties from qualifying for EPA grant funds, and, if the agency determines that such a change would benefit the Brownfields Program without any significant detrimental effects, develop a legislative proposal to amend the act to incorporate this revision.

    Agency Affected: Environmental Protection Agency

  3. Status: Open

    Comments: EPA finalized a new measure with OMB, acres made ready for reuse, and began reporting in 2006 to Congress in EPA?s annual Performance Accountability Report. In 2006, EPA completed the amended Information Collection Request for the Brownfields property profile form to incorporate State and Tribal reporting on the measures for site specific assessments and cleanups directly funded under CERCLA 128(a) grants. The amended Information Collection Request also included new questions about end uses of properties that benefited from EPA Brownfields funding so the program may learn more about its achievements from addressing environmental concerns. However, EPA has not yet established a voluntary cleanup program measure.

    Recommendation: To enhance federal efforts to clean up and redevelop brownfield properties, EPA should consider stakeholder suggestions for improving and complementing the agency's activities as it weighs potential changes to the program. Specifically, the Administrator of EPA should continue the agency's efforts to develop additional measures to gauge the achievements of the Brownfields Program, especially those addressing the program's environmental and state voluntary cleanup aspects, and to incorporate this information into annual performance measures that are reported to the Congress.

    Agency Affected: Environmental Protection Agency

  4. Status: Closed - Implemented

    Comments: EPA stated that it agreed with this recommendation and had acted on it. EPA stated that, to award grants to applicants with proven appropriate administrative experience, EPA adjusted the ranking criteria to emphasize a demonstrated ability to manage revolving loan funds. Furthermore, EPA said that, in September 2004, EPA provided Congress with information on this change and the new guidelines were in effect for the FY 2005 competition. Finally EPA said that the agency recognizes the value of coalitions' collective efficiency and administrative expertise and EPA has encouraged coalitions to submit grant proposals for consideration.

    Recommendation: To enhance federal efforts to clean up and redevelop brownfield properties, EPA should consider stakeholder suggestions for improving and complementing the agency's activities as it weighs potential changes to the program. Specifically, the Administrator of EPA should determine the advantages and disadvantages of giving priority to coalitions or other entities with proven revolving loan fund administrative expertise when awarding grants and, if found to be beneficial, adopt this as a key criterion for selecting grant recipients.

    Agency Affected: Environmental Protection Agency

 

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