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Complement Agency Efforts' which was released on January 13, 2005.

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Report to Congressional Requesters: 

December 2004: 

BROWNFIELD REDEVELOPMENT: 

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

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-94]: 

GAO Highlights: 

Highlights of GAO-05-94, a report to congressional requesters

Why GAO Did This Study: 

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. 

What GAO Found: 

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.

What GAO Recommends: 

GAO recommends that EPA develop additional measures of the Brownfields 
Program’s achievements. It also recommends that EPA consider 
stakeholder suggestions for improving and complementing the agency’s 
brownfield efforts as it weighs potential changes to the program. GAO 
provided EPA with a draft of this report for its review and comment. 
EPA agreed with the report’s findings and recommendations and provided 
technical comments we addressed in the report where appropriate.

www.gao.gov/cgi-bin/getrpt?GAO-05-94.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact John B. Stephenson at 
(202) 512-3841 or stephensonj@gao.gov.

[End of section]

Contents: 

Letter: 

Results in Brief: 

Background: 

Stakeholders Reported That EPA's Program Enables Brownfield 
Redevelopment That Might Not Otherwise Occur: 

EPA's Current Performance Measures Are Not Sufficient to Enable 
Effective Program Oversight and Decision Making: 

Stakeholders Identified Changes That Could Enhance Existing Federal 
Brownfield Redevelopment Efforts: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Summary Information on Other Federal Agencies' Activities 
and Funding in Support of Brownfield Redevelopment: 

Appendix III: Comments from the Environmental Protection Agency: 

Appendix IV: GAO Contacts and Staff Acknowledgments: 

GAO Contacts: 

Staff Acknowledgments: 

Tables: 

Table 1: Number and Amount of Brownfield Grants Awarded: 

Table 2: Stakeholders Contacted to Obtain Views on the Contribution of 
EPA's Program and Options for Improving or Complementing the Program: 

Table 3: Nine Federal Agencies' Activities and Funding in Support of 
Brownfield Redevelopment, Fiscal Years 2001 Through 2003: 

Figure: 

Figure 1: Funding for Brownfield-Related Activities Reported by 5 
Federal Agencies: 

Abbreviations: 

CERCLA: Comprehensive Environmental Response, Compensation, and 
Liability Act: 

EPA: Environmental Protection Agency: 

GPRA: Government Performance and Results Act of 1993: 

IPA: Intergovernmental Personnel Act: 

NCP: National Contingency Plan: 

OMB: Office of Management and Budget: 

Letter December 2, 2004: 

The Honorable Tom Davis: 
Chairman, Committee on Government Reform: 
House of Representatives: 

The Honorable Michael R. Turner: 
House of Representatives: 

An estimated 450,000 to 1 million brownfields--sites whose 
redevelopment or reuse may be complicated by the presence or potential 
presence of hazardous substances--sit abandoned or underused across the 
country. Brownfields can include industrial properties, former gas 
stations, warehouses, and residential buildings. These sites have 
remained largely undeveloped for several reasons, including uncertainty 
about the presence of contamination, limited cleanup resources, and 
fear by the sites' owners--or prospective purchasers--that they might 
be held liable for cleaning them up. Cleaning up and redeveloping these 
properties can improve and protect human health and the environment; 
increase local tax bases; and slow the development of undeveloped, open 
land. Although a number of federal agencies provide funding and 
technical assistance to aid in restoring brownfields, the Environmental 
Protection Agency (EPA) has the lead federal role in encouraging and 
facilitating the cleanup and redevelopment of these sites. In addition, 
state and local governments, commercial lending and real estate 
development corporations, and other entities provide funding for 
brownfield redevelopment--both with and without EPA's participation. 
While the availability of funding from these other sources depends on 
the particular circumstances of individual brownfield sites, many sites 
have been and are being redeveloped primarily through state, local, and 
commercial efforts with no assistance from EPA.

To address the numerous brownfield properties across the country, in 
1995, EPA began its Brownfields Initiative under the Superfund Program, 
established by the Comprehensive Environmental Response, Compensation, 
and Liability Act (CERCLA), to clean up contaminated sites. In January 
2002, the Congress passed the Small Business Liability Relief and 
Brownfields Revitalization Act (Brownfields Act)(Pub. L. No. 107-118), 
formally establishing a separate Brownfields Program within EPA. The 
act authorizes $250 million in grant funds annually for fiscal years 
2002 through 2006. Of this amount, $200 million is authorized to fund 
EPA grants for site assessments, job training, revolving loans, and 
newly created cleanup grants in support of brownfield revitalization 
efforts.[Footnote 1] Under the act, state and local governments and 
quasi-governmental entities can apply for site assessment and cleanup 
grants of up to $200,000 and revolving loan fund grants of up to $1 
million.[Footnote 2] Between fiscal years 1995 and 2004, EPA awarded 
over 1,200 brownfield grants totaling about $400 million. In addition, 
of the $250 million annual authorization, the act authorizes $50 
million in grants to assist states and tribes in developing and 
enhancing their environmental response--or voluntary cleanup--programs 
to address contaminated sites. Since fiscal year 2003, EPA has awarded 
about $100 million in assistance to states and tribes.

To hold federal agencies systematically accountable for achieving 
results from their programs, such as EPA's Brownfields Program, the 
Congress passed the Government Performance and Results Act (GPRA) of 
1993. The act requires EPA and other federal agencies to develop 
strategic plans covering at least 5 years and submit them to the 
Congress and the Office of Management and Budget. GPRA also requires 
agencies to set annual performance goals related to the goals and 
objectives in the strategic plan and to prepare annual reports 
comparing actual performance with annual goals. An agency's performance 
measures should, among other things, demonstrate results and provide 
useful information to track how programs and activities contribute to 
achieving its goals and mission. The objectives of EPA's Brownfields 
Program, as set out in the agency's strategic plan for fiscal years 
2003 through 2008, are to assess, clean up, and redevelop properties; 
leverage job creation; and leverage cleanup and redevelopment funding 
from other sources.

In this context, we (1) obtained the views of stakeholders--including 
EPA grant recipients, state and local government officials, real estate 
developers, and interest groups, among others--on the extent to which 
EPA's program has contributed to the cleanup and redevelopment of 
brownfields; (2) determined whether the measures EPA uses to gauge the 
performance of its brownfield activities provide sufficient information 
to identify program accomplishments; and (3) obtained these 
stakeholders' views on potential options for improving or complementing 
EPA's Brownfields Program. Additionally, you asked us to identify other 
federal agencies that support brownfield cleanup and redevelopment and 
describe their activities and funding levels.[Footnote 3] We provide 
this information in appendix II.

In conducting our work, we met with the Director of EPA's Office of 
Brownfields Cleanup and Redevelopment and other officials within that 
and other EPA headquarters offices. In addition, we visited eight 
entities that received site assessment, revolving loan, or job training 
grants located in four states--Colorado, Florida, Minnesota, and 
Washington State--to discuss their brownfield redevelopment 
activities, their views on EPA's contribution, and potential options to 
improve federal brownfields efforts. We selected a nonprobability 
sample of eight grant recipients by identifying one recipient of a 
grant with high activity (as determined by the number of sites 
assessed, the number of loans made, and loan size) and one with low 
activity in each state. On the basis of these paired criteria and an 
effort to select sites from a geographically diverse range of states, 
we chose four recipients of site assessment grants and four recipients 
of revolving loan grants--two of which also received job training 
grants. Additionally, we obtained the views of other local brownfield 
stakeholders who were identified by these grant recipients, such as 
real estate developers, property owners, attorneys, nonprofit 
organizations, and other state and local government officials involved 
in brownfield activities. We also identified and obtained the views of 
several industry groups and associations representing state and local 
governments with brownfield expertise. Although we did not identify a 
sample of EPA brownfield grant recipients that would allow us to 
generalize our findings to the total population of EPA brownfield grant 
recipients, our selection of recipients with high-and low-grant 
activity, in conjunction with the large, diverse groups we contacted, 
enabled us to obtain a wide range of views on EPA's program and 
brownfield issues. Furthermore, we obtained information about 
brownfield efforts from nine federal agencies identified by EPA as 
active in the Federal Brownfields Partnership. We also reviewed data 
from EPA's brownfields database and found them to be sufficiently 
reliable for use in this report. Appendix I provides additional details 
on our objectives, scope, and methodology. We conducted our review 
between October 2003 and November 2004 in accordance with generally 
accepted government auditing standards.

Results in Brief: 

Stakeholders reported that EPA's Brownfields Program provides an 
important contribution to site cleanup and redevelopment efforts by 
funding activities that might not otherwise occur. EPA grants typically 
support the initial stages of brownfield redevelopment and are 
important in that they fund activities and address sites--such as those 
with more complex cleanup requirements, less desirable locations, or 
liability or ownership issues--that private lenders and other 
government programs often do not, according to stakeholders. EPA's site 
assessment grants provide recipients with seed money for identifying 
contamination and estimating cleanup costs, while the agency's 
revolving loan fund grants provide funding for cleanup activities. 
However, EPA is often one of several funding sources for brownfield 
cleanup and redevelopment. All of the grant recipients we interviewed 
used EPA grants in conjunction with funding from state, local, and/or 
other federal sources to address brownfield sites. For example, a 
Seattle, Washington, company combined an EPA revolving loan with city, 
state, and Department of Housing and Urban Development funds to begin 
redeveloping a brownfield site into a housing and retail business 
property. Representatives of the company told us that EPA's revolving 
loan provided critical up-front funds for the cleanup during the first 
phase of the project. While EPA's program makes an important 
contribution to some individual brownfield redevelopment projects, an 
unknown number of other projects that are funded solely by other public 
and private sources without any EPA assistance have been completed and 
are under way. In addition, officials in all 10 of the states we 
contacted reported that EPA assistance has been crucial to establishing 
and expanding the scope of their voluntary cleanup programs.[Footnote 
4] These officials said that without EPA's grants, their voluntary 
cleanup programs would not have had the resources to undertake 
activities such as compiling state inventories of brownfield sites, 
performing limited brownfield site assessments, and developing needed 
guidance and information for program participants.

The performance measures EPA has used to date have provided information 
on accomplishments in some but not all key areas of the Brownfields 
Program, thereby limiting the agency's--and the Congress'--ability to 
determine the extent to which the program is achieving its goals. 
First, EPA's current brownfield performance measures do not fully 
address the program's central objectives. While EPA has reported to the 
Congress on the cumulative sites assessed, jobs generated, and cleanup 
and redevelopment funds leveraged by the program, the agency has not 
begun reporting data on grant recipients' activities to clean up and 
redevelop properties, which is one of its primary stated objectives. 
Second, EPA does not collect or report data on the assistance it 
provides to state voluntary cleanup programs. Although this is not one 
of the program's strategic objectives, these activities are a 
significant part of EPA's brownfield efforts, accounting for about one-
third of the total program funds in each of fiscal years 2003 and 2004. 
Third, although EPA's overall mission is to protect human health and 
the environment, the agency has not yet developed measures to determine 
the extent to which the Brownfields Program helps reduce environmental 
risks. Acknowledging these limitations, in fiscal year 2004, EPA began 
collecting additional information--such as the number of acres ready to 
be reused--which agency officials believe will allow them to develop 
additional measures to gauge the program's achievements. Similarly, EPA 
is developing performance measures for voluntary cleanup programs, but 
the agency has not yet proposed that it include such measures in its 
performance reports. We are recommending that EPA continue its efforts 
to develop additional measures to gauge program achievements--
especially those addressing the program's environmental and state 
voluntary cleanup aspects--and incorporate them into annual performance 
measures that are reported to the Congress.

Stakeholders identified three potential options for improving or 
complementing EPA's Brownfields Program. First, they suggested 
eliminating the provision in the Brownfields Act that, in effect, makes 
landowners who purchased a brownfield site prior to January 2002 
ineligible for EPA grant funding. While the Consolidated Appropriations 
Act for Fiscal Year 2004 temporarily suspended the eligibility date for 
that fiscal year, stakeholders asserted that the clause continues to 
discourage brownfield redevelopment by limiting program eligibility. 
Second, stakeholders suggested changes to address the underutilization 
of revolving loan funds. As of November 2004, grant recipients had 
loaned out less than $29 million (about 17 percent) of the $168 million 
in revolving loan fund grants awarded by EPA. According to 
stakeholders, the stringent technical and administrative requirements 
to establish a revolving loan fund have discouraged grant recipients 
from using the funds. While EPA officials maintain that provisions in 
the Brownfields Act eased administrative requirements, stakeholders 
believed that technical requirements continue to be the primary 
impediment to making loans. Additionally, stakeholder comments 
indicated that EPA could achieve greater results by giving priority to 
applicants with proven administrative expertise or to coalitions of 
agencies that could consolidate administrative functions and thereby 
produce economies of scale. Third, stakeholders believed that a federal 
tax credit, which would allow developers to offset a portion of their 
federal income tax with their remediation expenditures, could 
complement EPA's program by attracting developers to brownfield sites 
on a broader national basis. While EPA and other organizations with 
brownfield expertise were also generally supportive of a federal 
brownfield tax credit, we did not analyze the costs and benefits of 
such a tax credit or any other potential incentives. We are 
recommending that the Administrator of EPA consider stakeholder 
suggestions for improving and complementing the agency's brownfield 
efforts as EPA weighs potential changes to the program.

Background: 

EPA's initial efforts to address brownfield properties began in 1995 
with the Brownfields Initiative under CERCLA, which was enacted in 1980 
in the wake of discoveries of abandoned hazardous waste sites around 
the country. CERCLA authorizes EPA to compel parties responsible for 
the contamination to clean up hazardous waste sites; allows EPA to pay 
for the cleanups, then seek reimbursement from the responsible parties; 
and established a trust fund to help EPA pay for cleanups and related 
program activities. Under CERCLA, past and present owners and operators 
of hazardous waste sites, as well as generators and transporters of the 
hazardous substances, can all be held liable for cleanup costs. CERCLA 
establishes a defense to liability for innocent landowners--that is, 
owners who obtain property without knowing it was contaminated despite 
conducting "all appropriate inquiries" regarding the present and past 
uses of the property and the potential presence of on-site 
contamination.

Under its Brownfields Initiative, EPA awarded several types of grants 
in support of brownfield redevelopment, as follows: 

* site assessment grants, which provide funding to inventory, 
characterize, assess, and conduct planning and community involvement 
related to brownfield sites;

* revolving loan fund grants, which provide funding for recipients to 
make no-or low-interest loans for brownfield cleanup;

* job training grants, which provide funding for environmental training 
for residents of brownfield communities;

* showcase grants, which provided targeted technical and financial 
assistance from EPA and other federal agencies to support brownfield 
activities in select communities demonstrating innovative and 
successful approaches to addressing brownfields;

* greenspace grants specifically for brownfield projects that result in 
parks or other greenspace development; and: 

* Intergovernmental Personnel Act funds to site assessment grant 
recipients, which provide for employee exchanges between a federal 
agency and a state or local government entity to share environmental 
expertise with those entities.[Footnote 5]

EPA's Brownfields Program: 

On January 11, 2002, the Congress amended CERCLA by passing the Small 
Business Liability Relief and Brownfields Revitalization Act 
(Brownfields Act) (Pub. L. No. 107-118). The act defined brownfields as 
real property, the expansion, redevelopment, or reuse of which may be 
complicated by the presence or potential presence of a hazardous 
substance, pollutant, or contaminant. Furthermore, the act established 
the Brownfields Program and amended the criteria for establishing the 
innocent landowner defense. It also limits liability for two types of 
parties: (1) contiguous property owners--persons who own property that 
may be contaminated by a release of hazardous substances from a 
neighboring property--and (2) bona fide prospective purchasers--
persons who purchased the property after the act's passage on January 
11, 2002; did not contaminate the property; and exercised appropriate 
care with respect to any hazardous waste found on the property. Both 
types of parties must demonstrate that they conducted: 

all appropriate inquiries into the site's previous ownership and 
use.[Footnote 6] Under the act, any landowner who acquired a 
potentially contaminated property before January 11, 2002, is not 
eligible for the bona fide prospective purchaser exemption and 
accordingly may not be eligible for brownfield grants.

In addition to clarifying CERCLA liability, the act also made several 
changes to EPA's brownfield grants, including: 

* authorizing EPA to continue awarding site assessment, revolving loan 
fund, and job training grants, and authorizing new cleanup grants up to 
$200,000 to be used directly for brownfield remediation;

* allowing recipients of revolving loan fund grants, in accordance with 
certain statutory restrictions, to use a portion of these funds for 
subgrants for cleanup activities that, unlike loans, do not have to be 
repaid;[Footnote 7]

* requiring recipients of revolving loan fund grants and cleanup grants 
to provide a 20 percent cost share, unless EPA determines that the cost 
share requirement would place an undue hardship on the recipient;

* allowing recipients of revolving loan fund grants that were awarded 
before January 11, 2002, to transition to the new requirements set out 
in the act;

* prohibiting the use of grant or revolving loan funds for 
administrative costs;

* requiring that 25 percent of grant funds be used for site assessment 
and cleanup activities on sites contaminated with petroleum or a 
petroleum product; and: 

* generally prohibiting EPA from taking federal enforcement action 
under sections 106 and 107 of CERCLA at "eligible response sites" that 
are enrolled in a state program that meets certain criteria.

Brownfield grants are currently awarded competitively by regional 
panels that evaluate grant proposals against threshold criteria, such 
as applicant eligibility on a pass/fail basis, and a national panel 
that scores and ranks proposals on criteria such as the proposals' 
budgets, the planned method for selecting sites that will receive grant 
funds, and the communities' need for brownfield assistance.

EPA Funding of Brownfield Grants: 

Since EPA began the Brownfields Initiative in 1995, the agency has 
awarded over 1,200 brownfield grants totaling about $400 million. Table 
1 shows the number of grants and the amount (in nominal dollars) 
awarded for each grant type between fiscal years 1995 and 2002 (when 
the Brownfields Act was passed) and during fiscal years 2003 and 2004.

Table 1: Number and Amount of Brownfield Grants Awarded: 

Dollars in millions; 

Grant type: Site assessment; 
Fiscal years 1995[A] through 2002: Number of grants: 437
Fiscal years 1995[A] through 2002: Amount: $103.1;
Fiscal year 2003: Number of grants: 117
Fiscal year 2003: Amount: $30.7
Fiscal year 2004[B]: Number of grants: 155
Fiscal year 2004[B]: Amount: $37.6.

Grant type: Revolving loan fund;
Fiscal years 1995[A] through 2002: Number of grants: 143;
Fiscal years 1995[A] through 2002: Amount: $117.0;
Fiscal year 2003: Number of grants: 28;
Fiscal year 2003: Amount: $30.4;
Fiscal year 2004[B]: Number of grants: 18;
Fiscal year 2004[B]: Amount: $20.9.

Grant type: Cleanup;
Fiscal years 1995[A] through 2002: Number of grants: N/A;
Fiscal years 1995[A] through 2002: Amount: N/A;
Fiscal year 2003: Number of grants: 66;
Fiscal year 2003: Amount: $11.4;
Fiscal year 2004[B]: Number of grants: 92;
Fiscal year 2004[B]: Amount: $16.9.

Grant type: Job training;
Fiscal years 1995[A] through 2002: Number of grants: 57;
Fiscal years 1995[A] through 2002: Amount: $12.1;
Fiscal year 2003: Number of grants: 10;
Fiscal year 2003: Amount: $2;
Fiscal year 2004[B]: Number of grants: 16;
Fiscal year 2004[B]: Amount: $2.5.

Grant type: Other[C];
Fiscal years 1995[A] through 2002: Number of grants: 97;
Fiscal years 1995[A] through 2002: Amount: $14.4;
Fiscal year 2003: Number of grants: N/A;
Fiscal year 2003: Amount: N/A;
Fiscal year 2004[B]: Number of grants: N/A;
Fiscal year 2004[B]: Amount: N/A.

Grant type: Total;
Fiscal years 1995[A] through 2002: Number of grants: 734;
Fiscal years 1995[A] through 2002: Amount: $246.6;
Fiscal year 2003: Number of grants: 221;
Fiscal year 2003: Amount: $74.5;
Fiscal year 2004[B]: Number of grants: 281;
Fiscal year 2004[B]: Amount: $77.9.

Source: GAO analysis of EPA data.

[A] EPA awarded one site assessment grant in 1993 and two site 
assessment grants in 1994 as pilot tests for its Brownfields 
Initiative.

[B] Fiscal year 2004 numbers and amounts are for grants announced, not 
awarded. A small number of these grants may have been awarded after the 
end of fiscal year 2004, according to EPA officials.

[C] This category includes showcase grants, greenspace grants, and 
Intergovernmental Personnel Act funds awarded prior to the Brownfields 
Act.

[End of table]

State Voluntary Cleanup Programs: 

Many states have passed their own hazardous waste cleanup laws, many of 
which have liability and enforcement provisions similar to CERCLA's 
provisions. Concerns about liability under both federal and state laws 
have hindered cleanups at brownfields and other contaminated sites. To 
alleviate this problem, in the late 1980s, some states began to 
establish voluntary cleanup programs that allow private parties to 
identify and clean up sites, use less extensive administrative 
procedures, and obtain some relief from future state liability for past 
contamination.[Footnote 8] All 50 states now have voluntary cleanup 
programs, although these programs vary considerably in scope and 
breadth. Programs generally provide participants with protection from 
future state liability for cleanup costs. In addition, EPA has signed 
Voluntary Cleanup Program Memorandums of Agreement with 22 states. 
These memorandums clarify roles and responsibilities and encourage the 
cleanup of contaminated properties. Generally, they provide a statement 
that EPA does not plan or anticipate taking federal enforcement action 
at those sites going through a state voluntary cleanup program, with 
some caveats. Additionally, the Brownfields Act further encourages the 
use of state voluntary cleanup programs by generally prohibiting EPA 
from taking federal enforcement action under sections 106 and 107 of 
CERCLA at "eligible response sites" that are enrolled in a state 
program that meets certain criteria.

The 2002 Brownfields Act authorizes grant funds for state and tribal 
voluntary cleanup programs. The act authorizes EPA to provide $50 
million for each of fiscal years 2002 through 2006, to state or tribal 
programs that include, or are taking reasonable steps to include, 
elements such as an inventory of brownfield sites, mechanisms for 
approval of cleanup plans and verification that cleanup actions were 
completed, and oversight and enforcement authorities adequate to ensure 
that cleanups protect human health and the environment. EPA's guidance 
to states and tribes seeking voluntary cleanup program grants specifies 
that, among other things, funds may be used to: 

* develop legislation, regulations, procedures, or guidance that would 
establish or enhance the program;

* finance a revolving loan fund for brownfield cleanups;

* purchase environmental insurance or develop an insurance mechanism to 
provide financing for cleanup actions under the program;

* establish and maintain the required public records; and: 

* conduct limited site-specific activities, such as assessment or 
cleanup.

In 2003, EPA distributed almost $50 million among the 50 states, 30 
tribes, the District of Columbia, and the Virgin Islands to develop or 
enhance their programs' infrastructure and capabilities. The Congress 
appropriated $50 million in funding for state and tribal voluntary 
cleanup program grants for fiscal year 2004.

The Government Performance and Results Act of 1993: 

In 1993, the Congress passed GPRA, requiring all federal agencies to 
(1) develop and submit strategic plans covering at least 5 years to the 
Congress and the Office of Management and Budget (OMB), (2) set annual 
performance goals related to the goals and objectives in the strategic 
plan, and (3) annually compare actual program results with established 
performance goals and report this information to the Congress. Under 
the act, agencies are to establish in their strategic plans general 
outcome-related goals and objectives for their major functions and 
operations. Performance measures are the yardsticks used to assess an 
agency's success in meeting its performance goals. EPA's broad mission 
is to protect the nation's health and environment, and the agency's 
fiscal year 2003-2008 Strategic Plan places the Brownfields Program 
under its goal of protecting, sustaining, or restoring the health of 
communities and ecosystems. EPA's Strategic Plan identifies three 
performance measures for the program: the number of properties 
assessed, the number of jobs generated, and the cleanup and 
redevelopment funding leveraged.

Stakeholders Reported That EPA's Program Enables Brownfield 
Redevelopment That Might Not Otherwise Occur: 

Stakeholders told us that EPA's Brownfields Program provides an 
important contribution to cleaning up and redeveloping properties by 
funding activities--such as site assessments and remediation 
activities--that private lenders and other government programs often do 
not. EPA grant funds are often applied to brownfields that are less 
likely to be redeveloped without EPA funding because of the sites' more 
complex cleanup requirements, less desirable locations, or liability or 
ownership issues. However, because EPA is often one of several sources 
of funding for the range of activities at a brownfield site, its impact 
on the final redevelopment of a property is difficult to isolate. 
Furthermore, officials in all 10 of the states we contacted reported 
that EPA assistance has been crucial to establishing and expanding the 
scope of their voluntary cleanup programs.

Stakeholders Acknowledged That EPA's Contribution Is Significant: 

EPA's Brownfields Program contributes significantly to grant 
recipients' redevelopment efforts, with site assessment grants 
providing seed money for identifying contamination and estimating 
cleanup costs and revolving loan fund grants supporting cleanup 
activities. By funding site assessments and cleanups, EPA provides a 
resource for activities that private lenders and other government 
programs often do not cover, according to stakeholders.[Footnote 9] In 
this regard, officials of the Washington Department of Community, 
Trade, and Economic Development--which is currently administering two 
EPA brownfield revolving loan fund grants totaling $5.9 million for a 
coalition of state and local agencies--told us that the banking 
industry generally is reluctant to lend money for brownfield projects 
because of the high risks involved. Consequently, EPA is an important, 
and sometimes the only, funding source for the critical assessment and 
cleanup activities in the initial stages of redevelopment. For example, 
a representative of a nonprofit company redeveloping a brownfield site 
in Seattle, Washington, told us that the $440,000 revolving loan they 
received from the Washington Department of Community, Trade, and 
Economic Development, while relatively small compared with the overall 
project costs of about $24 million, provided critical funds for the 
cleanup during the first phase of the project. Similarly, a real estate 
developer revitalizing a brownfield site in Lakewood, Colorado, stated 
that although the Colorado Department of Public Health and 
Environment's $1.9 million revolving loan accounted for a small portion 
of the project's estimated $750 million cost, these funds were 
significant. The developer explained that the loan, which the state 
made with EPA revolving loan fund dollars, covered about one-half of 
the project's cleanup costs, helped the project advance in a timely 
manner, and provided financial reassurance to the project's other 
lenders that the cleanup would be properly performed.

Stakeholders also told us that EPA's grant funds are important to 
brownfield redevelopment because they are often applied to sites with 
(1) more complex cleanup requirements, (2) less desirable locations, or 
(3) liability or ownership issues that make them less likely to be 
redeveloped by private or other governmental investors alone. A senior 
planner with Palm Beach County, Florida, explained that some brownfield 
sites in prime locations are more likely to be redeveloped without 
EPA's assistance because of the potential positive financial return on 
investments in such properties. Brownfield sites in less desirable 
locations, however, need financial assistance for the site assessment 
and cleanup to make the project work, as do heavily contaminated areas 
located in prime locations. Similarly, officials with the Colorado 
Brownfields Foundation explained that some brownfield sites require 
additional financial aid because of their contamination, location, and 
other factors, and that EPA's assessment and cleanup funds are 
important for their redevelopment. Furthermore, an official with King 
County, Washington, who managed the two EPA site assessment grants that 
the county and the city of Seattle received, informed us that the 
county would not have assessed the 50 brownfield sites that it did 
without EPA's assistance because these sites involved complex 
environmental and funding issues.

Grant Recipients Combined Funds from Many Sources to Clean Up and 
Redevelop Brownfields: 

Although grant recipients and other stakeholders believed EPA's 
contribution is important, the agency is often only one of several 
sources funding activities at the site. All of the grant recipients we 
interviewed used EPA's grants in conjunction with funding from state, 
local, and other federal sources. For example, the Seattle development 
company we contacted combined an EPA brownfield revolving loan with 
city, state, and Department of Housing and Urban Development funds to 
begin redeveloping a brownfield site into a housing and retail business 
property. Additionally, the Colorado real estate developer with whom we 
spoke combined an EPA brownfield revolving loan; a substantial company 
equity investment; and several commercial loans, bonds, and other 
financing to fund a mixed-use project that will include retail shops 
and housing units.

Although EPA's program makes an important contribution to some 
individual brownfield redevelopment projects, an unknown number of 
other projects have been completed and are under way that are funded 
solely by other public and private sources without any EPA assistance. 
An official with the Northeast-Midwest Institute--a nonprofit, 
nonpartisan research organization for the Northeast and Midwest states 
that has been very active on brownfield issues--emphasized that, while 
EPA and other federal programs provide key support for brownfield 
redevelopment, the number of brownfield sites far exceeds the number of 
sites that could be addressed by available federal resources. 
Furthermore, an official with the Center for Public Environmental 
Oversight--an organization that promotes and facilitates public 
participation in the oversight of environmental activities such as 
brownfields--echoed this view and said that, given the limited 
availability of funding from all levels of government, the vast 
majority of sites that are redeveloped do not receive any government 
assistance. Similarly, in its September 2003 report on the Brownfields 
Program, EPA stated that there remain hundreds of thousands of 
brownfield sites across the country that could be put to better use, 
but even with the additional assistance available under the Brownfields 
Act, the sheer enormity of the problem far outstrips all available 
federal resources.

States Reported That EPA Assistance Is Crucial to Establishing and 
Expanding Their Voluntary Cleanup Programs: 

Under the Brownfields Act, states and tribes may use EPA's voluntary 
cleanup program grant funds to, among other things, establish or 
enhance their programs, purchase insurance for financing state response 
actions, or finance a revolving loan fund for brownfield cleanup. 
Officials with the voluntary cleanup programs in the 10 states we 
contacted reported that EPA's funding has been crucial to establishing 
and expanding the scope of their programs. Program officials from 4 of 
the 10 states--Kentucky, Virginia, West Virginia, and Wyoming--reported 
that EPA's funds keep their voluntary cleanup programs operating and 
that, without this assistance, their programs would not exist. For 
example, Virginia officials said that their program relies solely on 
EPA funding and struggles to maintain, rather than enhance, their 
current program performance. Similarly, the Wyoming official said that 
the state used EPA's funds to help develop their program, including 
providing contractor support for developing the program's guidance, and 
to pay employees' salaries. This official said that the state plans to 
use some of EPA's funds to study various types of incentives the 
program could offer to encourage participants to redevelop brownfields, 
such as providing environmental insurance.

The state officials with whom we spoke, for the most part, believed 
that the activities they fund with EPA's grants are beneficial and 
contribute to the effectiveness of their programs. State officials from 
Colorado and Minnesota commented favorably on the flexibility that the 
activities provide their state programs. Alaska officials said that 
EPA's funding for their program, which has only been in existence a 
short time, is very important for its development and growth. Both the 
Minnesota and Alaska officials commented on the benefits of using EPA 
funds to conduct site-specific assessments, and the Alaska 
representative further said that these assessments helped to redevelop 
foreclosed brownfield sites faster.

Officials from all 10 states said that their programs would not be able 
to accomplish a number of key activities without EPA's assistance, such 
as compiling state inventories of brownfield sites, performing limited 
brownfield site assessments, and developing needed guidance and 
information for program participants. For example, state officials 
overseeing Alabama's program said that EPA's funding allowed the 
department to hire additional staff, provide training, and develop an 
inventory and public record of brownfield sites. These officials told 
us that, although Alabama has been able to pay the program's 
administrative costs with user fees that are collected from 
participants, the revenue from these fees would not have been 
sufficient to allow them to expand the program and hire needed 
additional staff. Colorado program officials also noted that, without 
EPA's funding, the state's program would not be operating at its 
current service level and would not have undertaken activities such as 
performing brownfield site assessments or preparing cleanup guidance to 
deal with the state's growing problem of contamination from illegal 
methamphetamine drug laboratories.

EPA's Current Performance Measures Are Not Sufficient to Enable 
Effective Program Oversight and Decision Making: 

The performance measures EPA has used to date have not provided 
information on key outcomes and objectives of the Brownfields Program, 
thereby limiting the agency's ability to demonstrate the extent to 
which the program is achieving its goals. While EPA is beginning to 
collect data that may help it to better assess the program's 
achievements, its current brownfield performance measures do not fully 
address the program's central objectives, including its activities to 
clean up and redevelop properties, one of its primary stated 
objectives. Furthermore, EPA does not currently collect or report data 
on the assistance it provides to state voluntary cleanup programs. 
Finally, although EPA's overall mission is to protect human health and 
the environment, the agency has not yet developed measures to determine 
the extent to which the Brownfields Program helps reduce environmental 
risks. Acknowledging the limitations of its measures, in fiscal year 
2004, EPA began collecting additional information that they believe 
will allow them to develop appropriate measures to gauge the 
achievements of the program, and the agency is also taking steps to 
develop performance measures for state voluntary cleanup programs.

EPA's Current Brownfield Performance Measures Reflect Some but Not All 
of the Program's Major Activities: 

The current performance measures that EPA reports to the Congress 
regarding its brownfield activities do not fully address the program's 
central objectives, thereby limiting both the agency's and the 
Congress' ability to determine the extent to which the program is 
achieving its goals. EPA collects data on its brownfield activities in 
a number of areas. Some of these data are intended solely for the 
agency's internal use, and others are intended for reporting to the 
Congress on the program's performance under its GPRA requirements. The 
performance measure information that EPA provides to the Congress 
through the agency's 5-year strategic plan and annual plans is 
important in that it informs decision making and oversight of the 
program. EPA's fiscal year 2003-2008 Strategic Plan states that the 
specific objectives and targets for the Brownfields Program for this 
period are to (1) assess, clean up, and redevelop 9,200 properties; (2) 
leverage $10.2 billion in cleanup and redevelopment funding; and (3) 
leverage 33,700 jobs. In its fiscal year 2003 annual report, EPA 
reported to the Congress on the cumulative (1) sites assessed, (2) jobs 
generated, and (3) cleanup and redevelopment funds leveraged. However, 
EPA did not report the number of properties cleaned up or redeveloped 
under the program. Although EPA's fiscal year 2004 annual plan 
includes--in addition to the measures in the 2003 plan--the number of 
properties cleaned up and the number of acres available for reuse as 
measures it plans to report to the Congress, the agency did not include 
targeted goals for these measures. According to agency officials, these 
goals were not included because the agency is still in the process of 
collecting the data it needs to set meaningful goals for these 
measures.

EPA's current performance measures also do not provide information on 
the impact of EPA's funding to state voluntary cleanup programs. While 
supporting state and tribal voluntary cleanup efforts is not one of the 
Brownfields Program's stated strategic objectives, these activities are 
a significant part of EPA's brownfield activities. EPA's funding to 
establish or enhance voluntary cleanup programs--authorized at $50 
million per year by the Brownfields Act--comprised about one-third of 
the agency's total Brownfields Program funds in each of fiscal years 
2003 and 2004. However, EPA does not currently collect data on the 
results from this funding.

Furthermore, while EPA's objective to assess, clean up, and redevelop 
properties addresses the environmental impact of the program, its 
current measures do not allow the agency to determine the extent to 
which the program helps reduce environmental risks, a key agency 
outcome goal. In July 2003, an EPA consultant suggested that, in its 
brownfield grants and loan agreements, EPA should require recipients to 
report on environmental indicators as a condition of receiving funding. 
In addition, the EPA Inspector General found that while the Brownfields 
Program's current performance measures may provide important, desired, 
and relevant information on the economic outputs and activities 
associated with brownfield expenditures, the measures do not provide 
information on how risks to human health and the environment will be 
reduced or controlled through brownfield investments. In 2002, the 
Inspector General suggested that EPA could use measures, such as acres 
of brownfields assessed and cleaned up or the population protected by 
brownfield cleanup actions, to more fully capture the program's 
environmental impact. In June 2004, the Inspector General reiterated 
this point, noting the lack of program performance measures that 
indicate how risks to human health and the environment will be reduced 
or controlled through brownfield assistance.[Footnote 10] Furthermore, 
on the basis of our recent work in evaluating EPA's grant management 
process, we testified in July 2004 that EPA is not consistently 
ensuring that its grants--such as those awarded under the Brownfields 
Program--are clearly linked to environmental results.[Footnote 11]

EPA Is Taking Steps to Obtain and Report Additional Information That 
May Better Measure Brownfields Program Accomplishments: 

Recognizing the limitations of its current performance measures and 
supporting data, EPA has taken a number of steps to collect additional 
information on the results of its brownfield activities that should 
enhance its ability to develop more meaningful measures of the 
Brownfields Program's accomplishments. First, in August 2002, EPA 
initiated an internal work group to develop a data collection 
instrument for the site assessment, cleanup, and revolving loan fund 
grants. This work group developed a property profile form to collect 
information from each grant recipient beginning in fiscal year 2004. 
This form will provide EPA with more detailed information on such 
factors as common contaminants and property size, among other things. 
Officials in EPA's Office of Brownfields Cleanup and Redevelopment told 
us that these data will allow the agency to better measure the direct 
economic and environmental impact of EPA's activities on a property-
specific basis. These officials anticipate that these data will provide 
a better measurement of program results, and they plan to conduct 
further evaluations after a full year of data collection to determine 
whether and how to use the data to form environmental indicators.

In addition, EPA has efforts under way that may assist the agency in 
developing performance measures to gauge the impact of funding for 
voluntary cleanup programs. In 2004, to develop such measures, EPA 
formed a work group of state and tribal officials that analyzed methods 
that states currently use to measure their programs. Also in 2004, the 
Association of State and Territorial Solid Waste Management Officials 
reported that while states continue to use counts of completed 
activities--such as the number of cleanups completed--as the primary 
measure for evaluating their programs, some states use other 
quantifiable indicators--such as the number of acres available for 
reuse and the anticipated land reuse--to assess their programs' 
broader, more global impacts.[Footnote 12] EPA officials told us that 
the work group is now building on these efforts by developing 
performance measures for EPA's assistance to voluntary cleanup programs 
that could be implemented by the end of fiscal year 2005. However, 
states may view any reporting requirements that EPA imposes on them as 
burdensome. An EPA consultant reported in July 2003 that efforts to 
integrate states' data into EPA's brownfield data system would likely 
require a high level of state resources because many states have 
established their own systems.

A recent OMB review has also prompted EPA to take steps to develop 
measures that provide a more comprehensive picture of the program's 
impact. In February 2004, OMB completed an EPA Program Assessment and 
Rating Tool review--a systematic method of assessing the performance of 
program activities, focusing on these activities' contribution to an 
agency's achievements of its strategic and program performance 
goals.[Footnote 13] According to the Director of EPA's Office of 
Brownfields Cleanup and Redevelopment, the office recently developed, 
and OMB approved, a performance indicator that will be used in future 
OMB reviews of the Brownfields Program. The indicator will show "EPA 
investments per acre reused and compared to leveraged investments for 
redevelopment per acre of property." This measure will provide 
information on changes that occurred at a given brownfield property 
after it received EPA brownfield assistance and will enable OMB to 
compare the efficiency of the Brownfields Program with other federal 
programs. This measure could also be incorporated into the Brownfields 
Program's strategic plan and annual performance report to provide the 
Congress with more meaningful information about the program.[Footnote 
14]

Finally, EPA's fiscal year 2005 annual performance plan included 
additional information, which the agency will report to the Congress, 
that more closely links the program to the goals of its strategic plan. 
The plan added a new measure that tracks the number of cleanup grants 
awarded and added a targeted goal--60 properties--for the "properties 
cleaned up" measure that was included in the previous annual plan 
without such a goal. This latter measure, which records the number of 
previously contaminated properties that have been cleaned up and made 
available for reuse, potentially addresses the program's environmental 
impact. Incorporating this measure and goal as well as efforts to 
collect additional information are steps forward in measuring the 
agency's progress in achieving the program's goals and objectives.

While EPA has initiated efforts to obtain additional data on the 
accomplishments of the Brownfields Program, further action is needed to 
ensure that the Congress has sufficient information to make informed 
decisions and conduct appropriate oversight regarding all aspects of 
the program, including the agency's efforts to assist state and tribal 
voluntary cleanup programs and the program's impacts on environmental 
risks. Therefore, EPA must ensure that its data collection efforts 
address the program's central activities and that, once collected, it 
uses these data to inform the Congress about program results.

Stakeholders Identified Changes That Could Enhance Existing Federal 
Brownfield Redevelopment Efforts: 

The grant recipients, developers, expert groups, and other stakeholders 
we contacted suggested three options for improving or complementing 
EPA's Brownfields Program. First, stakeholders suggested eliminating a 
restriction in the Brownfields Act that, in effect, disqualifies from 
grant eligibility those landowners who purchased a brownfield site 
before January 2002. Second, they suggested that EPA make changes to 
the stringent technical and administrative requirements that they 
believe continue to discourage the use of revolving loan funds, despite 
changes in the act, and give priority to applicants with proven 
administrative expertise. Third, stakeholders supported allowing a 
federal tax credit for developers' remediation costs. While EPA and 
other organizations varied in their support of these changes, we did 
not analyze the costs or benefits of any of these options.

Stakeholders Believed That Revising a Restrictive Provision of the 
Brownfields Act Could Expand the Number of Eligible Grant Applicants: 

Some stakeholders told us that revising a restrictive provision of the 
Brownfields Act could expand the number of applicants eligible for 
brownfield grants.[Footnote 15] The act effectively limits grant 
eligibility to parties who purchased their property after January 11, 
2002.[Footnote 16] These stakeholders believed that EPA's Brownfields 
Program could have a broader impact if those who purchased property 
prior to January 11, 2002, were also eligible to receive brownfield 
grants. Representatives of three of the organizations with brownfield 
expertise mentioned that many local governments that were actively 
addressing brownfields by acquiring these sites before the law was 
enacted have been penalized by the eligibility date. For example, the 
Director of EPA's Office of Brownfields Cleanup and Redevelopment noted 
that a local government in Rhode Island purchased a brownfield site on 
December 27, 2001, and followed the appropriate steps to demonstrate 
that it is not potentially responsible for contamination. However, this 
local government is not eligible to apply for EPA brownfield grant 
assistance because the site was purchased before the law was enacted. 
In addition, a coalition of groups with brownfield expertise, as well 
as EPA brownfield officials, reported that EPA rejected a number of 
brownfield grant applications in fiscal year 2003, and other 
applications were never submitted, largely because of the eligibility 
date.

The Consolidated Appropriations Act for Fiscal Year 2004 temporarily 
suspended the eligibility date for that fiscal year, prompting EPA to 
reopen the grant application period for 1 month in February 2004 to 
provide previously excluded applicants with an opportunity to submit 
proposals. However, all of the stakeholders we spoke with who raised 
this issue believed that the eligibility date will impact the program's 
support of brownfield redevelopment by limiting program eligibility 
until it is permanently revised. Groups such as the U.S. Conference of 
Mayors, an organization that represents mayors in strengthening 
federal-city relationships, and the National Association of Local 
Government Environmental Professionals, a national association 
representing local government professionals with various environmental 
responsibilities, have suggested limiting the eligibility date 
provision to those landowners who caused or contributed to the 
contamination. Such a limitation would enable nonpolluting prospective 
purchasers that acquired brownfields before January 2002 to qualify for 
EPA's brownfield funding. The Director of EPA's Office of Brownfields 
Cleanup and Redevelopment supports removing the eligibility date from 
the prospective purchaser requirements to make landowners purchasing 
property before January 11, 2002, eligible for grant funds. This 
official noted that the act's other requirements for obtaining 
prospective purchaser liability protection are sufficient without 
specifying the date of acquisition.

Stakeholders Believed Pooling Grant Funds Could Aid Recipients That May 
Lack Administrative Expertise and Produce Economies of Scale: 

Almost one-half of the stakeholders with whom we spoke, such as grant 
recipients, state or local government officials, and real estate 
developers, suggested changes to address the underutilization of 
revolving loan fund grants. As of November 1, 2004, recipients of 
revolving loan fund grants had loaned about $28.6 million (about 17 
percent) of the $168 million in such grants that EPA had awarded up to 
that date. EPA data show that, of the 154 active grants, 47 grant 
recipients had made 67 loans for brownfield projects and the remaining 
grant recipients had made no loans.[Footnote 17] Reacting to this 
situation, EPA began rescinding revolving loan fund grants from 
communities that had not used them and "deobligated" about $12 million 
in revolving loan funds, thereby making them available to make other 
grants. Thirty grants have been or will be deobligated by the end of 
calendar year 2004, and 44 additional grants have been or will be 
reissued under the new requirements in the act by this date.

The Congress has also expressed concern about the underutilization of 
EPA's revolving loan fund grants. In the Senate Report accompanying 
EPA's fiscal year 2004 appropriations bill, the Committee on 
Appropriations expressed disappointment in the revolving loan component 
of EPA's Brownfields Program, noting that only a small percentage of 
grant recipients had made loans, and that these loans had resulted in 
the completion of only a small number of brownfield site cleanups over 
the life of the program.[Footnote 18] EPA officials told us that the 
Brownfields Act's provision allowing a portion of revolving loan fund 
grants to be awarded to brownfield projects in subgrants that do not 
have to be repaid will make these grants more attractive to applicants 
and bring renewed interest in the loans.[Footnote 19] EPA officials 
also maintained that the act eased the administrative burden on grant 
recipients by removing full CERCLA National Contingency Plan 
requirements. EPA, however, retains certain requirements in order to 
ensure that environmental cleanups protect public health and the 
environment.[Footnote 20]

According to five revolving loan fund grant recipients and a number of 
developers, however, other technical and administrative requirements 
not directly addressed by the Brownfields Act have also discouraged 
grant recipients from using the funds. Managing a revolving loan fund 
requires the government or nonprofit entity receiving the grant to 
perform many of the functions of a commercial lending institution, 
including establishing interest rates, repayment terms, and collateral 
requirements; processing and approving loans; and collecting loan 
payments. Revolving loan fund grant recipients with whom we spoke 
reported that this process requires significant staff time and 
expertise. While some stakeholders acknowledged that other factors, 
such as the availability of low-interest private loans and marketing of 
the loan fund by grant recipients, play a role in the number of loans 
made, seven of the grant recipients and groups with whom we met told us 
that having expertise was key to making loans and that grant recipients 
with financial expertise or experience administering other revolving 
loan funds were better equipped to successfully operate a brownfields 
loan fund as well.

Comments from eight stakeholder groups indicate that, to address this 
impediment, EPA could achieve greater results through its brownfield 
revolving loans by giving priority to applicants with proven expertise 
or to coalitions of agencies that can consolidate administrative 
functions and thereby produce economies of scale. Four revolving loan 
fund grant recipients and two groups with brownfield expertise reported 
that grant recipients with in-house technical expertise, such as 
economic development or regional planning agencies, were more likely to 
have financial expertise or experience administering other revolving 
loan funds and were therefore better positioned to set up a fund. Grant 
recipients that partnered with other state or local agencies to obtain 
technical expertise also were successful in this regard. Two revolving 
loan fund grant recipients also reported that grant recipients who 
hired contractors to manage the administrative aspects of the revolving 
loan fund have been successful at establishing a fund framework and 
were better positioned to make loans. For example, the Department of 
Environmental Services in Hennepin County, Minnesota, contracted with a 
nonprofit organization that specializes in servicing loans to manage 
its fund. Hennepin County has made four loans totaling over $1.7 
million to local brownfield projects.

Three revolving loan fund grant recipients also said that coalitions 
that consolidate administrative functions and pool revolving loan fund 
grants were able to take advantage of economies of scale by making more 
loans once they had made the up-front administrative investment to 
establish the fund. Nine grant recipients and other stakeholders told 
us that EPA's grants were not large enough to justify the time and 
effort required to establish a fund because it is frequently depleted 
after one or two loans are made. The 65 loans made to date range from 
$50,000 to $1.95 million, with an average loan amount of about 
$420,000. The act limits revolving loan fund grants to $1 million, and 
many grants have been funded at less than this amount. However, EPA 
grant guidelines allow coalitions of eligible entities to apply 
together to receive funds of up to $1 million each. For example, five 
entities could apply jointly and each receive up to $1 million, for a 
total of up to $5 million for the coalition. By pooling revolving loan 
funds among six entities, as of September 2004, the Washington 
Department of Community, Trade, and Economic Development was 
administering two revolving loan fund grants of $2.3 million and $3.6 
million, respectively. The department has loaned $440,000 for a project 
converting a former landfill and dumping ground into an affordable 
housing development for senior citizens in an economically distressed 
area of Seattle.

The revolving loan fund grant applicants' ability to manage a fund is 1 
of 10 ranking criteria EPA evaluates in selecting grant 
proposals.[Footnote 21] EPA's fiscal year 2005 grant proposal 
guidelines direct applicants to describe previous experiences in 
managing federal funds and to provide a plan for managing the loan fund 
in accordance with prudent lending practices. Applicants' ability to 
manage the grant is allocated a maximum of 10 points out of a possible 
120 points for all ranking criteria. While EPA's draft guidance to 
regional offices outlines elements of prudent lending practices that 
should be addressed in grant recipients' work plans, it does not 
require grant recipients to discuss their expertise or resources to 
establish or implement these lending practices. We did not evaluate 
EPA's grant selection or award process.

Stakeholders Supported a Federal Tax Credit to Encourage Brownfield 
Redevelopment: 

All of the stakeholders we spoke with about tax credits believed that a 
federal brownfield tax credit, which would allow developers to offset a 
portion of their federal income tax with remediation expenditures, 
could complement EPA's Brownfields Program by attracting developers to 
brownfield sites on a broader national basis. These stakeholders stated 
that a federal tax credit would help to enhance the federal, state, and 
local brownfield redevelopment efforts currently under way. One 
stakeholder noted that while brownfield redevelopment is still a small 
and specialized real estate market, a federal tax credit could attract 
new developers and investors to these projects. A local government 
official told us that a federal tax credit would be beneficial in that 
it would provide an incentive that real estate developers could access 
directly--unlike many incentives available exclusively to government 
entities--and that the private sector would easily understand. At least 
10 developers and 5 state or local government officials also said that 
other similar federal tax credits, such as the federal low-income 
housing and historic rehabilitation credits, have proven effective in 
stimulating redevelopment.[Footnote 22] The U.S. Conference of Mayors 
and other organizations with brownfield expertise told us that a 
federal tax credit has tremendous potential to foster new brownfield 
redevelopment. Furthermore, a brownfield redeveloper in Minnesota 
suggested that a federal tax credit would be most effective if the 
credit were directed to brownfield projects with more complex 
contamination, liability, or cleanup issues that would be less likely 
to be redeveloped without federal aid. Nevertheless, while stating that 
a credit could be beneficial, three stakeholders voiced concern about a 
tax credit's impact on federal revenue. EPA's Brownfields Program 
Director was also generally supportive of a federal brownfield tax 
credit, noting that a tax credit could be an incentive to new 
brownfield redevelopment. However, this official emphasized that a tax 
credit is separate from EPA's Brownfields Program and would not fall 
under EPA's jurisdiction. We did not analyze the costs and benefits of 
such a tax credit or any other potential incentives.

Conclusions: 

EPA's Brownfields Program has supported efforts to identify, assess, 
and clean up contamination on brownfield properties in communities 
across the country. While this support is small relative to the number 
of brownfields and the investment often required to fully clean up 
contamination and redevelop properties, EPA's program has, in 
particular, helped communities address less desirable sites that might 
not be developed if left to the private real estate market. Although 
EPA's contribution to brownfield revitalization is generally 
acknowledged, the agency has not fully measured or reported to the 
Congress on the extent of this contribution--information that is needed 
to improve congressional decision making and oversight of the program. 
While EPA has reported on some achievements of the program, further 
action is needed to ensure that the Congress has sufficient information 
on the results of the program to monitor and oversee all aspects of the 
program, including efforts to assist state and tribal voluntary cleanup 
programs, and on the program's impacts on environmental risks. EPA has 
initiated efforts to obtain additional data, but the agency must ensure 
that these efforts address the program's central activities and that, 
once collected, it uses these data to inform the Congress of program 
results.

While stakeholders we contacted praised EPA's program, they identified 
a number of limitations that, if addressed, could improve the program. 
First, many stakeholders stated that the Brownfields Act imposes 
certain limitations on the program by restricting the number of 
potential recipients who qualify for EPA brownfield grants. While 
changing the provision of the act that prevents pre-January 2002 
purchasers of brownfield properties from qualifying for EPA grant funds 
would expand the number of eligible applicants, a careful review of the 
implications of such a change would be warranted as part of any 
consideration of legislative amendments. Second, stakeholders 
identified the underutilization of the revolving loan fund component of 
the program as a concern that despite changes brought about by the 
Brownfields Act, continues to restrict access to these funds. Some of 
these barriers may be addressed by directing revolving loan funds to 
government and nonprofit entities that have demonstrated the ability to 
manage and administer a fund. Similarly, pooling these funds so that 
recipients can make more cleanup loans may make better use of this 
resource by leveraging the up-front administrative investment required 
to set up a fund.

Recommendations for Executive Action: 

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, we recommend that the 
Administrator of EPA take the following four actions: 

* 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;

* 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;

* 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; and: 

* 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 Comments and Our Evaluation: 

We provided EPA with a draft of this report for its review and comment. 
EPA agreed with the findings and recommendations in the report and 
provided information on the agency's plans and activities to address 
them. With regard to our recommendation that EPA continue its efforts 
to develop additional measures to gauge the achievements of the 
Brownfields Program, EPA stated that the agency will continue to 
collect and evaluate environmental data received from brownfield grant 
recipients in developing an environmental measure. EPA further said 
that it continues to work closely with the states through a work group 
to develop measures for the state response programs and hopes to 
develop baseline information over the next several years to better 
enable them to establish stronger environmental indicators. In 
addition, regarding our recommendation that EPA 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, EPA agreed that the agency should weigh the 
potential benefits to the Brownfields Program and any potential 
detrimental effects in considering whether to develop a legislative 
proposal to amend the act. It also acknowledged that the Congress has 
provided, and EPA has supported, expanded eligibility for pre-January 
2002 purchasers of brownfield properties as part of the annual 
appropriations process. With regard to our recommendation to 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, EPA 
stated that it will continue to monitor these grants. Finally, 
regarding our recommendation that EPA 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, EPA stated that the agency has (1) 
adjusted the ranking criteria for revolving loan fund grant recipients, 
giving more weight to ranking factors that demonstrate an applicant's 
ability to manage a revolving loan fund and make loans, and (2) has 
strengthened its evaluation of recipients' proposed business plans. If 
coalitions have a strong business plan, according to EPA, they are 
likely to rank more highly on this criterion. Furthermore, according to 
EPA, the agency also has changed the application evaluation process to 
require EPA regions to provide an advisory ranking score on "the 
ability to manage grants" criterion, to include the applicant's past 
performance, if any, as an indicator of potential future success. In 
addition, EPA said that it may award supplementary funds to successful 
grant recipients that have already made loans, thus providing 
additional incentives to grant recipients with demonstrated 
performance. EPA's successful completion of these ongoing and planned 
activities would effectively address the concerns we raised in this 
report. EPA also provided a number of technical comments, which we have 
incorporated into the report where appropriate. The full text of EPA's 
comments is included in appendix III.

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to interested 
congressional committees, the EPA Administrator, and various other 
federal departments and agencies. We will also make copies available to 
others upon request. In addition, the report will be available at no 
charge on GAO's Web site at [Hyperlink, http://www.gao.gov]. If you 
have any questions about this report, please contact me at (202) 
512-3841. Key contributors to this report are listed in appendix IV.

Signed by: 

John B. Stephenson: 
Director, Natural Resources and Environment: 

[End of section]

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

The objectives of this review were to (1) obtain stakeholders' views on 
the extent to which the Environmental Protection Agency's (EPA) 
Brownfields Program has contributed to the cleanup and redevelopment of 
brownfields, (2) determine whether the measures EPA uses to gauge the 
performance of its brownfield activities provide sufficient information 
to identify program accomplishments, and (3) obtain stakeholders' views 
on potential options for improving or complementing EPA's program. 
Additionally, we identified other federal agencies that support 
brownfield cleanup and redevelopment and described their activities and 
funding levels.

To obtain stakeholders' views on EPA's contribution to the cleanup and 
redevelopment of brownfields and potential options for improving or 
complementing EPA's Brownfields Program, we met with the Director of 
EPA's Office of Brownfields Cleanup and Redevelopment and other 
officials within that and other EPA headquarters offices and with EPA 
Region VI officials in Dallas, Texas. In addition, we visited eight 
entities that received site assessment, revolving loan, or job training 
grants located in four states--Colorado, Florida, Minnesota, and 
Washington State--to discuss their brownfield redevelopment 
activities, their views on EPA's contribution, and potential options to 
improve federal brownfield efforts. We selected a nonprobability sample 
of eight grant recipients by identifying one recipient of a grant with 
high activity (as determined by the number of sites assessed, the 
number of loans made, and loan size) and one with low activity in each 
state. On the basis of these paired criteria and an effort to select 
sites from a geographically diverse range of states, we chose four 
recipients of site assessment grants and four recipients of revolving 
loan grants--two of which also received job training grants. We also 
reviewed documents related to these recipients' grants and visited 
brownfield redevelopment sites.

In addition, we obtained the views of other local brownfield 
stakeholders who were identified by these grant recipients, such as 
real estate developers, property owners, attorneys, nonprofit 
organizations, and officials from other state and local government 
agencies (some of which have received EPA brownfield grants), involved 
in brownfield activities. We also identified and obtained the views of 
several industry groups and associations representing state and local 
governments with brownfield expertise. We also spoke with state 
environmental officials about their voluntary cleanup programs in the 
four states we visited and an additional six randomly selected states: 
Alabama, Alaska, Kentucky, Virginia, West Virginia, and Wyoming.

In an effort to obtain consistent information from the nonprobability 
sample of grant recipients, local brownfield stakeholders, industry 
groups and associations, and state environmental officials we 
contacted, we followed a standard set of questions for each of the 
groups. Some groups did not respond to every question because they were 
not as knowledgeable about some aspects of EPA's Brownfields Program or 
some of the brownfield issues we inquired about, while others offered 
more than one response. We did not determine the extent to which 
stakeholders agreed or disagreed with any particular response offered 
by other stakeholders. While we did not identify a sample of EPA 
brownfield grant recipients that would allow us to generalize our 
findings to the total population of grant recipients, the selection of 
recipients with high-and low-grant activity, in conjunction with the 
large, diverse groups we contacted, enabled us to obtain a wide range 
of views on EPA's program and brownfield issues.

The stakeholders we contacted are included in table 2.

Table 2: Stakeholders Contacted to Obtain Views on the Contribution of 
EPA's Program and Options for Improving or Complementing the Program: 

Stakeholder category: Nonprobability sample of EPA's brownfields grant 
recipients; 
Stakeholder contacted: Colorado Department of Public Health and 
Environment; 
Westminster, CO; 
Hillsborough County, FL; 
South Florida Regional Planning Council; 
Hennepin County, MN; 
Virginia, MN; 
Seattle/King County, WA; 
State of Washington Department of Community, Trade, and Economic 
Development.

Stakeholder category: Private and nonprofit real estate development 
entities; 
Stakeholder contacted: Developer, Denver, CO; 
Developer, Hollywood, FL; 
Developer representative, Miami, FL; 
Developer, Tampa FL; 
Developer group interview, Tampa, FL (eight participants); 
Housing Trust Group of Florida; 
Developer, Minneapolis, MN; 
Developer, Minneapolis, MN; 
Developer group interview, Tacoma, WA (four participants); 
SouthEast Effective Development, WA.

Stakeholder category: State voluntary cleanup programs; 
Stakeholder contacted: Alabama; 
Alaska; 
Colorado; 
Florida; 
Kentucky; 
Minnesota; 
Virginia; 
Washington; 
West Virginia; 
Wyoming.

Stakeholder category: Other state/local governments/agencies; 
Stakeholder contacted: City of Englewood, CO; 
Colorado Housing and Finance Authority; 
Florida Department of Environmental Protection, Southeast District, 
West Palm Beach, FL; 
Palm Beach County, FL; 
Minnesota Department of Employment and Economic Development; 
St. Paul Port Authority, MN; 
City of Seattle, WA; 
City of Tacoma, WA.

Stakeholder category: Other organizations and individuals; 
Stakeholder contacted: Association of State and Territorial Solid Waste 
Management Officials; 
Center for Public Environmental Oversight; 
Colorado Brownfields Foundation; 
Environmental Coalition of South Seattle; 
Independent researcher, Pittsburg, PA; 
International City/County Management Association; 
Minnesota Environmental Initiative and Twin Cities Metropolitan 
Council; 
National Association of Local Government Environmental Professionals; 
National Brownfield Association; 
Northeast-Midwest Institute; 
U.S. Conference of Mayors. 

Source: GAO.

[End of table]

To determine whether the measures EPA uses to gauge the performance of 
its brownfield activities provide sufficient information to identify 
program accomplishments, we contacted the Director of EPA's Office of 
Brownfields Cleanup and Redevelopment and other officials within that 
and other EPA headquarters offices, including the Office of Planning, 
Analysis, and Accountability and the Office of Solid Waste and 
Emergency Response. We reviewed EPA's fiscal years 2003 to 2008 
Strategic Plan, as well as the agency's fiscal years 2003, 2004, and 
2005 annual performance reports. Additionally, we reviewed EPA 
Inspector General reports related to the Brownfields Program, as well 
as the Office of Management and Budget's February 2004 Program 
Assessment and Rating Tool review of the program.

To identify federal agencies, other than EPA, that support brownfield 
cleanup and redevelopment and describe their activities and funding 
levels, we (1) reviewed the November 2002 and September 2004 
Brownfields Federal Partnership Action Agendas, (2) interviewed 
officials in the Office of Brownfields Cleanup and Redevelopment, and 
(3) collected and analyzed funding information from 9 federal agencies 
that participate in the partnership and that EPA identified as the 
agencies providing or likely to provide the largest amount of funding 
to brownfield-related activities. These agencies included the 
Departments of Energy, Housing and Urban Development, Justice, and 
Transportation; the National Institute of Environmental Health Sciences 
within the Department of Health and Human Services; the Department of 
Commerce's Economic Development and National Oceanic and Atmospheric 
Administrations; the General Services Administration; and the Army 
Corps of Engineers. We asked these agencies to describe their 
brownfield-related activities and provide information on their 
historical funding for these activities. Of the 9 federal agencies, 3 
did not provide financial information. Two of these 3 agencies--the 
Departments of Justice and Transportation--reported that, although they 
support brownfield redevelopment, they could not provide information on 
the amount of funding provided to brownfield-related activities because 
the information is not tracked separately and cannot be easily 
identified. While the General Services Administration works with state 
and local planners and others to effectively match underutilized 
federal property holdings with local revitalization objectives, the 
agency reported that it did not provide financial support to 
brownfields.

We also reviewed data from EPA's brownfield database and found them to 
be sufficiently reliable for use in this report. In particular, we 
interviewed agency officials on data collection and reporting 
protocols, reviewed user manuals for the database, conducted basic 
electronic checks of the data, and corroborated limited entries in the 
database with information obtained from grant recipients during site 
visits.

We conducted our review between October 2003 and November 2004 in 
accordance with generally accepted government auditing standards.

[End of section]

Appendix II: Summary Information on Other Federal Agencies' Activities 
and Funding in Support of Brownfield Redevelopment: 

Although EPA has the lead federal role in brownfield redevelopment, a 
number of other federal agencies also have programs that either 
directly address brownfield issues or provide funds and services that 
could be used to support brownfield redevelopment efforts. In May 1997, 
the Clinton Administration announced the Brownfields National 
Partnership Action Agenda, a 2-year initiative to bring federal, state, 
and local agencies together to clean up and redevelop brownfields. 
Under this initiative, more than 20 federal agencies were to better 
coordinate their brownfield resources and activities--specifically 
carrying out more than 100 action items involving brownfields that 
would result in specific economic outcomes: that is, additional private 
investment in brownfields, new jobs, and the protection of thousands of 
acres of greenspace. In 2002, 23 agencies renewed their commitment to 
coordinating brownfield efforts with an updated Brownfields Federal 
Partnership Action Agenda--outlining commitments, new initiatives, 
events, and activities that each agency would undertake to help 
communities address brownfields and associated problems. Through the 
Action Agenda, federal agencies jointly committed to actions such as 
making funding and technical assistance to brownfield communities a 
budget priority, changing agency policies to facilitate brownfield 
redevelopment, and sharing program information by linking their Web 
sites. Most of these agencies do not have separate programs 
specifically dedicated to brownfield redevelopment, but they provide 
some form of assistance for brownfield properties as part of a broader 
program.

Of the 23 federal agencies--other than EPA--that participate in the 
Brownfields Partnership, 9 have been particularly active in supporting 
brownfield-related activities, according to an EPA official. These 
agencies include, the Departments of Energy, Housing and Urban 
Development, Justice, and Transportation; the National Institute of 
Environmental Health Sciences within the Department of Health and Human 
Services; the Department of Commerce's Economic Development and 
National Oceanic and Atmospheric Administrations; the General Services 
Administration; and the Army Corps of Engineers within the Department 
of Defense. Most of these agencies do not have separate programs 
specifically dedicated to brownfield redevelopment, but they provide 
some form of assistance that benefited brownfield properties as part of 
a broader program. Of the 9 agencies, 5 reported about $260 million in 
funds obligated to brownfields from fiscal years 2001 through 2003.
[Footnote 23] The Department of Housing and Urban Development and the 
Economic Development Administration within the Department of Commerce 
were responsible for almost all of the funding provided during this 
period--about $250 million or 96 percent of the total funds obligated--
with each agency contributing about $125 million. The Department of 
Energy, the Department of Health and Human Services, and the National 
Oceanic and Atmospheric Administration provided the remaining support 
of about $10 million (see fig. 1).

Figure 1: Funding for Brownfield-Related Activities Reported by 5 
Federal Agencies: 

[See PDF for image] 

[End of figure] 

Table 3 includes a summary of these 9 agency's brownfield-related 
activities and funding for fiscal years 2001 through 2003.

Table 3: Nine Federal Agencies' Activities and Funding in Support of 
Brownfield Redevelopment, Fiscal Years 2001 Through 2003: 

Agency: Army Corps of Engineers; 

Brownfield-related support activities/funding[A]: 
Activities: In addition to providing engineering support to the 
military, the Army Corps of Engineers provides engineering services 
such as planning, design, and construction management on a reimbursable 
basis to non-Department of Defense federal agencies. For example, the 
Corps may provide engineering services related to remediation of 
hazardous waste sites, environmental restoration, and infrastructure 
renewal in support of the brownfield activities of non- Department of 
Defense federal agencies. Although the Corps can provide reimbursable 
support to state, local, and tribal governments for brownfield-related 
activities, among other things, this support is limited to only those 
engineering services for which the Corps is uniquely equipped. Given 
current budget constraints and the backlog of Corps Civil Work 
projects, only occasionally are there new opportunities to coordinate 
the Corps' projects with community brownfield projects. 

Funding: 

Fiscal years 2001 through 2003 - the Corps carried out about $1.8 
million in brownfield-related activities for various federal agencies 
on a reimbursable basis.

Agency: Department of Commerce - Economic Development Administration; 
Brownfield-related support activities/funding[A]: 
Activities: 

The mission of the Commerce Department's Economic Development 
Administration (EDA) is to lead the federal economic agenda by 
promoting innovation and competitiveness. EDA investments, including 
those in support of brownfield redevelopment, are intended to create 
wealth and minimize poverty by promoting a business environment that is 
favorable for attracting private capital investment and creating higher 
skill, higher wage jobs. EDA provides grants to state and local 
governments, educational institutions, nonprofit organizations, and 
others for brownfield-related activities primarily under two programs: 

The Public Works and Economic Development Facilities Program provides 
grants to help construct or rehabilitate essential public 
infrastructure and develop facilities needed to generate higher skill, 
higher wage jobs and attract private investment. For example, the 
program provides grants for investments in industrial and business 
parks, port facilities, and rail sidings, as well as for redevelopment 
of brownfields. 

The Economic Adjustment Program provides grants to assist state and 
local entities to design and implement strategies to adjust or bring 
about change to their economies. Funded activities may include the 
creation of business development and financing programs, such as 
revolving loan funds and market or industry research and analysis. 

Funding (in millions, by fiscal year): 

2001: $53.3; 
2002: $42.5; 
2003: $29.1; 
Total: $124.9.

Agency: Department of Commerce - National Oceanic and Atmospheric 
Administration; 
Brownfield-related support activities/funding[A]: 
Activities: 

The National Oceanic and Atmospheric Administration (NOAA) assists in 
conserving and managing the nation's coastal and marine resources. 
NOAA's brownfield-related activities focus on the redevelopment of 
coastal brownfield properties and the protection and restoration of 
coastal resources. These activities are primarily carried out by NOAA's 
Office of Response and Restoration and Office of Ocean and Coastal 
Resource Management. NOAA is leading a "Portfields" project to help 
coastal communities address contamination, restoration, and economic 
redevelopment issues related to port development, dredging, and 
"brownfields" redevelopment. The agency provides technical assistance, 
training, and support to states and communities to strengthen local and 
regional capabilities to restore or redevelop contaminated sites. It 
also provides funding to coastal states for brownfield redevelopment as 
part of waterfront revitalization efforts. 

Funding (by fiscal year): [B]; 
2001: $460,000; 
2002: $510,000; 
2003: $660,000; 
Total -$1.6 million.

Agency: Department of Energy; 

Brownfield-related support activities/funding[A]: 
Activities: The Department of Energy supports brownfield-related 
activities by providing technical assistance relating to energy use and 
environmental remediation, sharing lessons learned about cleanup and 
long-term stewardship efforts, and funding- related research and 
development. 

Funding (by fiscal year): [C]; 
2001: $130,000; 
2002: $[D]; 
2003: $50,000; 
Total: $180,000.

Agency: Department of Health and Human Services - National Institute of 
Environmental Health Sciences; 

Brownfield-related support activities/funding[A]: 
Activities: The National Institute of Environmental Health Sciences' 
Brownfields Minority Worker Training Program awards cooperative 
agreements to nonprofit organizations that provide health and safety 
training to minority residents in brownfield communities. The program 
tests strategies to educate new workers in life skills training, 
mentoring, remedial science and math, and specific health and safety 
training that will help them enter careers in the construction and 
environmental remediation and technology workforce. For example, 
participants receive training in the handling and removal of hazardous 
substances. EPA provides the needed funding. 

Funding (in millions, by fiscal year): 

2001: $3.0; 
2002: $3.0; 
2003: $2.2; 
Total: $8.2.

Agency: Department of Housing and Urban Development; 
Brownfield-related support activities/funding[A]: 
Activities: 

The Department of Housing and Urban Development (HUD) provides grant 
funds and economic development loan guarantees to communities to 
redevelop brownfields, primarily through three programs: the Community 
Development Block Grant (CDBG) Program, the Section 108 Loan Guarantee 
Program, and the Brownfields Economic Development Initiative (BEDI). 
HUD encourages brownfield economic development projects that propose 
the redevelopment of a brownfield site through new investments by 
identified private sector parties and that will directly result in new 
business or job creation, increases in the local tax base, or other 
near-term measurable economic benefits. 


* CDBG program funds are provided directly to larger communities and, 
indirectly through state programs, to smaller communities. The funds 
are distributed on the basis of formulas that combine several measures 
of community needs, such as population, extent of poverty, or age of 
the housing stock. To be eligible for funding, all activities or 
projects must meet at least one of the program's designated national 
objectives: benefit low-and moderate-income persons, prevent or 
eliminate slums or blight, or address particularly urgent community 
development needs caused by conditions that pose a serious and 
immediate threat to the community's health or welfare. Funding can be 
used for a wide range of activities directed toward neighborhood 
revitalization, economic development, and improved community facilities 
and services. For example, activities approved for CDBG funds include 
acquiring real property; clearing, demolishing, and rehabilitating 
residential and nonresidential structures; and providing public 
facilities and improvements such as water and sewer facilities; 
* HUD's Section 108 Loan Guarantee Program helps provide communities 
with a source of financing for economic development, housing 
rehabilitation, public facilities, and large- scale physical 
development projects. Eligibility requirements for authorized 
activities are the same as those of the CDBG Program. Under the Section 
108 Program, HUD guarantees notes or other obligations issued by the 
borrower or its public agency designee. Borrowers are required to 
pledge current and future CDBG funds as security for the loan and also 
to secure the loan with other collateral; 
* BEDI emphasizes the redevelopment of brownfield properties by 
providing competitive grants for local governments for economic 
development projects involving contaminated or potentially contaminated 
land or buildings. The grants are designed to enhance the security of 
loans guaranteed under the Section 108 Program, and all BEDI grants 
must be used in conjunction with a new Section 108-guaranteed loan 
commitment. 

Additionally, HUD manages other economic development, housing, and 
technical assistance programs to assist communities with brownfield 
revitalization, including the Renewal Community/Empowerment Zone/
Enterprise Community Initiative, the Rural Housing and Economic 
Development Program, the Home Investment Partnership Program, and the
department's University and College programs. 

Funding (in millions, by fiscal year): [E]; 
2001: $36.1; 
2002: $43.1; 
2003: $46.3; 
Total: $125.5.

Agency: Department of Justice; 

Brownfield-related support activities/funding[A]: 
Activities: The Department of Justice supports brownfield-related 
activities through its Weed and Seed Program. This program uses a 
multidisciplinary approach to combating violent crime, drug use, and 
gang activity in high-crime neighborhoods. The goal of the program is 
to "weed out" violence and drug activity and "seed" the sites with a 
wide range of crime and drug prevention programs, human service 
resources, and neighborhood restoration activities to prevent crime 
from reoccurring. Up to $50,000 is available for each brownfield- 
related restoration activity--such as the cleanup of methamphetamine 
labs--at weed and seed sites. 

Funding: 

The Department of Justice reported that the agency could not provide 
data on the amount of funding provided to brownfield-related 
activities. Because these activities are a component of broader agency 
programs, funding for these activities is not tracked separately and 
cannot be easily identified, according to the agency.

Agency: Department of Transportation; 
Brownfield-related support activities/funding[A]: 
Activities: 

The Department of Transportation's goals include, among others, 
providing policy leadership and financial assistance to improve 
transportation and foster economic growth while ensuring safety and 
security and protecting the environment. Although the department does 
not have a brownfields program, it encourages the transportation 
community to consider community brownfield redevelopment in 
transportation planning. Almost all of the department's funds for 
highways and most transit funds are distributed on a formula basis to 
state and local transportation agencies, which set priorities for 
highway and transit projects through state and regional transportation 
planning processes. 

Funding: 

The Department of Transportation reported that the agency could not 
provide data on the amount of funding provided to brownfield- related 
activities. Because these activities are a component of broader agency 
programs, funding for these activities is not tracked separately and 
cannot be easily identified, according to the department.

Agency: General Services Administration; 
Brownfield-related support activities/funding[A]: 
Activities: 

The General Services Administration (GSA) partners with communities to 
ensure that underutilized federal properties are included in urban 
redevelopment. Through its Brownfields Redevelopment Initiative, GSA 
identifies underutilized federal properties with varying degrees of 
contamination and helps put them back into productive use. GSA works 
with state and local planners, economic development officials, and 
community groups to include underutilized federal property holdings in 
local revitalizations objectives. Through an exchange of information, 
communities become aware of the location of federal holdings within 
their localities and have a better understanding of the process 
involved in acquiring underutilized federal property. In turn, GSA, 
guided by local objectives, is able to focus and prioritize the 
disposal of underutilized federal property. 

Funding: 

GSA reported that, while it works with state and local planners and 
others to integrate underutilized federal property into local 
revitalization objectives, it does not provide financial support to 
brownfield redevelopment efforts. 

Source: GAO analysis of information from individual agencies.

[A] Unless otherwise noted, funding information relates to amounts 
obligated.

[B] Includes staff support for Portfields Initiative.

[C] Expended amounts.

[D] Agency did not report funding for fiscal year 2002.

[E] Includes total amounts obligated for BEDI grants and total amounts 
expended for CDBG for asbestos removal, cleanup of contaminated sites, 
and lead-based paint and lead hazard test and abatement. Totals do not 
include $225.7 million in loan guarantees for BEDI projects and $1.6 
billion CDBG funds for activities that may have been--but were not 
necessarily--conducted at brownfield sites, including property 
acquisition, clearance and demolition, and rehabilitation; 
infrastructure development; construction of parking facilities and 
flood and drainage facilities; and water/sewer and street improvements.

[End of table]

[End of section]

Appendix III: Comments from the Environmental Protection Agency: 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY: 
WASHINGTON, D.C. 20460:

OFFICE OF SOLID WASTE AND EMERGENCY RESPONSE:

November 9, 2004:

Mr. John Stephenson, Director: 
Natural Resources and Environment: 
U.S. Government Accountability Office: 
441 G Street, NW:
Washington, DC 20548:

Dear Mr. Stephenson:

EPA appreciates the opportunity to provide comments on the draft GAO 
Report, "Stakeholders Report that EPA's Program Helps to Redevelop 
Sites, But Additional Measures Could Complement Agency Efforts" (GAO-
05-94). EPA is in overall agreement with the findings, conclusions, and 
recommendations of your report. The following responses to the report's 
four Recommendations for Executive Action elaborate on EPA's activities 
and possible future activities to address your recommendations.

1) GAO Recommendation: Continue the agency's efforts to develop 
additional measures to gauge the achievements of the Brownfields 
Program, especially ones addressing the programs' environmental and 
state voluntary cleanup aspects, and to incorporate this information 
into annual performance measures that are reported to the Congress.

EPA Response: EPA will continue to collect and evaluate environmental 
data received from brownfields grantees in developing environmental 
measures. EPA continues to work closely with the states as co-
regulators through a workgroup with them to develop measures for the 
state response programs. EPA hopes to develop baseline information from 
the information collected from property and grant profiles over the 
next several years to better enable the Agency to establish stronger 
environmental indicators.

2) GAO Recommendation: Weigh the merits of revising the Brownfields Act 
to eliminate the provision that prevents pre-January 2002 purchasers of 
brownfields 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.

EPA Response: Congress has provided, and EPA has supported in the 
President's FY05 Budget Request, expanded eligibility for pre-January 
2002 purchasers of brownfields properties, as part of the annual 
appropriations process. EPA agrees we should weigh the potential 
benefits to the Brownfields program and any potential detrimental 
effects in considering whether to develop a legislative proposal to 
amend the act to eliminate the pre-January 2002 purchaser provision.

3) GAO Recommendation: Closely monitor the brownfields 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.

EPA Response: EPA continues to monitor the brownfields revolving loan 
fund (RLF) grants. In recent years EPA has awarded fewer RLF grants, 
selecting only the strongest RLF applicants, as recommended by GAO in 
previous studies. EPA has adjusted the ranking criteria for RLF 
grantees, giving more weight to ranking factors which demonstrate an 
applicant's ability to manage an RLF. EPA officials provided a report 
to Congress in September 2004 with updated RLF information, including 
the fact that 30 RLF grants have been deobligated or will be by the end 
of calendar year 2004, and 44 RLF grants have transitioned to the new 
grants program under the Brownfields Act (SBLBRA) or plan to be by the 
end of calendar year 2004.

4) GAO Recommendation: 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.

EPA Response: EPA has adjusted the ranking criteria for RLF grantees, 
giving more weight to ranking factors which demonstrate an applicant's 
ability to manage an RLF and make loans, and strengthened evaluation of 
proposed business plans. If coalitions have a strong business plan, 
they are likely to rank more highly on this criterion. We also have 
changed the application evaluation process in FY 2005 to require the 
home region to provide an advisory ranking score on "the ability to 
manage grants" criterion. We hope this will inform the national panel 
as to the Region's evaluation of the applicant's past performance, if 
any, as an indicator of potential future success. In addition, EPA may 
award supplementary funds to successful RLF grantees who have already 
made loans, thus providing additional incentives to RLF grant 
recipients with demonstrated performance.

In addition to the responses to the report's recommendations provided 
above, EPA has provided, under separate correspondence, specific 
technical comments and suggestions on the report to ensure accuracy of 
data. Please contact Linda Garczynski, Director of the Office of 
Brownfields Cleanup and Redevelopment on 202-566-2731 should you have 
questions or concerns about EPA's response or technical comments and 
suggestions.

Sincerely yours,

Signed by: 

Thomas P. Dunne:

Acting Assistant Administrator:

[End of section]

Appendix IV: GAO Contacts and Staff Acknowledgments: 

GAO Contacts: 

John B. Stephenson (202) 512-3841; 
Thomas Melito (202) 512-9601; 
Vincent P. Price (202) 512-6529: 

Staff Acknowledgments: 

In addition to the individuals named above, Teresa Dee, Kirk Menard, 
Joanna Owusu, and Cristina Ramirez made key contributions to this 
report. Important contributions were also made by William Bates, Mark 
Braza, Elizabeth Curda, John Delicath, Richard Johnson, and Judy 
Pagano.

(360407): 


FOOTNOTES

[1] EPA's site assessment grants provide funding for a grant recipient 
to inventory, characterize, assess, and conduct planning and community 
involvement related to brownfield sites. EPA also awards brownfield job 
training grants to provide environmental training for residents of 
brownfield communities. EPA's revolving loan fund grants provide 
funding for recipients to make no-or low-interest loans or subgrants 
for brownfield cleanup. EPA also awards cleanup grants that provide 
direct funding for a recipient to address contamination at brownfield 
sites.

[2] Nonprofit organizations are also eligible to apply for cleanup 
grants and revolving loan fund subgrants to clean up sites that the 
nonprofit owns.

[3] For purposes of this report, we refer to the various federal 
departments, agencies, commissions, and other entities that undertake 
brownfield-related activities as "agencies." 

[4] The 10 states we contacted included Alabama, Alaska, Colorado, 
Florida, Kentucky, Minnesota, Virginia, Washington, West Virginia, and 
Wyoming.

[5] The Intergovernmental Personnel Act (IPA) provides for the 
temporary assignment of personnel between the federal government and 
state and local governments, institutions of higher education, and 
other organizations. EPA's IPA program objectives include increasing 
the nation's environmental expertise, acquiring hard-to-find 
expertise, and providing a training ground for both EPA and nonfederal 
employees to gain experience at another level of government.

[6] In August 2004, EPA proposed a rule that would establish specific 
requirements and standards for conducting all appropriate inquiries 
into the previous ownership, uses, and environmental conditions of a 
property for the purposes of qualifying for CERCLA liability 
protection. 

[7] EPA guidance limits the portion of funds that can be used as 
subgrants to 40 percent of the original grant amount.

[8] Indian tribes also established programs to oversee assessment and 
cleanup activities.

[9] These stakeholders included a nonprobability sample of eight EPA 
brownfield grant recipients, as well as (1) real estate developers, 
property owners, attorneys, and nonprofit organizations that the grant 
recipients identified and (2) several industry groups and associations 
representing state and local governments with brownfield expertise that 
we identified. Some stakeholders did not offer a response to our open-
ended questions on various issues, while others offered more than one 
response. We did not determine the extent to which stakeholders agreed 
or disagreed with any particular response offered by other 
stakeholders.

[10] EPA, Office of Inspector General, Observations on EPA's Plans for 
Implementing Brownfields Performance Measures, 2002-M-00016 
(Washington, D.C.: May 24, 2002) and Substantial Progress Made, But 
Further Actions Needed in Implementing Brownfields Program, 2004-P-00-
20 (Washington, D.C.: June 21, 2004).

[11] GAO, Grants Management: EPA Continues to Have Problems Linking 
Grants to Environmental Results, GAO-04-983T (Washington, D.C.: July 
20, 2004).

[12] Association of State and Territorial Solid Waste Management 
Officials, State Response Programs: Measuring Success (Spring 2004).

[13] OMB developed a Program Assessment and Rating Program for federal 
agencies in 2002 to improve program performance and better link 
performance to budget decisions.

[14] OMB also directed EPA to modify its currently reported measures to 
provide more accurate information about the program's impact. EPA 
agreed to qualify two of its performance measures--jobs generated and 
cleanup and development funds leveraged--by indicating that the EPA 
investment "enabled" the outcome. OMB believed that this addition (1) 
recognized that other entities were involved in the creation of jobs 
and the leveraging of funds on brownfield projects and (2) impacted 
these measures.

[15] These stakeholders included representatives of eight land 
developers and other private companies and four organizations with 
brownfield expertise.

[16] The act states that responsible parties are not eligible for 
brownfield grants. The current owner of a contaminated property is 
generally considered to be a responsible party. However, persons who 
purchased property after January 11, 2002, may be considered bona fide 
prospective purchasers, who are not generally responsible parties. 

[17] According to EPA officials, an additional 10 revolving fund loans 
may be signed before December 2004.

[18] EPA officials stated that informally collected information 
collected as of November 1, 2004, suggests that cleanups have been 
completed at 37 brownfield sites, are ongoing at 19 others, and 3 more 
are about to get under way. They explained that since EPA brownfield 
funds generally represent only a portion of ongoing cleanup activities, 
recipients may delay reporting progress until such time as all site 
cleanup activities are completed.

[19] EPA guidance allows up to 40 percent of revolving loan fund grant 
dollars to be distributed as subgrants to provide direct assistance for 
brownfield cleanups.

[20] Prior to 2002, EPA-funded brownfield cleanups were subject to the 
National Contingency Plan (NCP)--CERCLA regulations that provide EPA's 
blueprint of how to respond to hazardous substance releases. Applicable 
NCP requirements included conducting an environmental engineering 
evaluation and cost analysis, developing an environmental sampling and 
analysis plan that must be reviewed and approved by EPA, publishing a 
public notice of the proposed cleanup activity and providing a public 
comment period, and preparing a formal community relations plan. Under 
the 2002 Brownfields Act, an NCP provision applies to EPA-funded 
brownfield cleanup only if EPA determines that the provision is 
relevant and appropriate to the Brownfields Program. While EPA regions 
will determine the terms and conditions applicable to each grant, EPA 
expects that grant recipients will receive increased flexibility as a 
result of the new provision. 

[21] In addition to management capabilities, EPA evaluates (1) the 
grant proposal budget; (2) the community's need for brownfield 
redevelopment; (3) the process that the grant recipient will use to 
select brownfield projects for loans or subgrants; (4) the target 
market (types of borrowers or subgrant recipients) and a business plan 
addressing the loan structure and factors that will be considered in 
awarding subgrants; (5) the sustainable reuse of brownfield projects 
receiving loans or subgrants; (6) the extent to which the revolving 
loan fund grant would facilitate the creation or preservation of a 
park, greenway, undeveloped property, recreational property, or other 
public use development; (7) community involvement activities; (8) the 
reduction of threats to human health and the environment; and (9) the 
leveraging of additional resources from the applicant and all other 
federal, state, nonprofit, or private funding resources. According to 
EPA officials, the grant proposal budget, target market and business 
plan, and the leveraging additional resources criterion also provide an 
assessment of applicants' ability to manage the grant.

[22] The federal low-income housing tax credit provides an owner of 
newly constructed or renovated rental housing who sets aside a 
specified percentage of units for low-income persons for a minimum of 
15 years with a tax credit over a 10-year period. The federal historic 
rehabilitation tax credit provides the owner of a certified historic 
structure with a tax credit equal to 20 percent of the amount of 
qualified rehabilitation expenditures.

[23] Of the 9 federal agencies, 3 did not provide financial 
information. Two of these 3 agencies--the Departments of Justice and 
Transportation--reported that, although they support brownfield 
redevelopment, they could not provide information on the amount of 
funding provided to brownfield-related activities because the 
information is not tracked separately and cannot be easily identified. 
While the General Services Administration works with state and local 
planners and others to effectively match underutilized federal property 
holdings with local revitalization objectives, the agency reported that 
it did not provide financial support to brownfields. 

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