Good afternoon Mr. Chairman and members of the committee. My name is Jan Reitsma. I am the Director of the Rhode Island Department of Environmental Management. I appreciate the opportunity to speak to you today regarding Rhode Island's perspectives on, and support of, Senate bill S-2700 on Brownfields.
I would like to commend Senator Chafee and the other committee members for crafting a Brownfields bill that has bi-partisan sponsorship and addresses many of the concerns we have had with the Superfund program. I am also pleased to see that the tremendous effort invested in cleaning up this country's contaminated sites by the late Senator John Chafee is being continued by this subcommittee and its Chairman, Senator Lincoln Chafee. Rhode Islanders are proud to see our Senator continuing to lead the effort to improve the Superfund and Brownfields programs.
Summary Rhode Island strongly supports Senate bill S-2700 as a much needed and significant step forward towards improving the Superfund program, and particularly as a measure that would give us the additional backup, tools and flexibility to carry out our Brownfields program at the state and local levels. The proposed statutory changes would address the most frequently encountered obstacle to closing a Brownfields deal, lack of finality, even when the State has negotiated a comprehensive agreement and is willing to provide liability relief. The funding aspects of the bill are also of great interest to us, including the funding for actual cleanup work in addition to existing programs that focus on site investigation and inventories, and funding that will help develop capacity at the municipal level to deal with the complexities of Brownfields redevelopment. At least as important is the new funding for projects that restore Brownfields to a public use, such as a waterfront park, and that, unlike commercial redevelopment projects, do not have the revenue stream to pay off loans. Together, these provisions will greatly enhance the State's ability to expand on its efforts to date and to realize the full potential of Brownfields redevelopment as we seek to revitalize our urbanized communities, improve and preserve our quality of life, and promote sustainable economic growth statewide. Finally, the bill strikes a reasonable balance between giving the States more flexibility and more of a lead role on the one hand, and requiring accountability from the States on the other. Background: The Rhode Island Perspective on Brownfields
Brownfields present a tremendous challenge in Rhode Island. Prior to 1991, Rhode Island had relied exclusively on the Superfund program and our RCRA hazardous waste management program to address sites contaminated with chemicals and petroleum. Unfortunately, we were discovering sites at a rate faster than those programs could address them. After evaluating the pace of discovery of new sites and the backlog of sites that existed at that time, we decided to follow the lead of several other States and establish our own state program. Through a collaborative stakeholder effort, Rhode Island promulgated its site remediation regulations in 1993 and the pace of cleanup throughout the state quickly accelerated. Those regulations lay out a process for notification, investigation, and remediation of contaminated properties. It is a flexible process designed to be adapted to the many types of contaminated sites that we have encountered. While these new regulations and the alternative regulatory framework that they provide to responsible parties clearly increased the amount of cleanup in the State, we believe that it is the continuing threat of listing in the Superfund program, coupled with our own enforcement actions, that provide the impetus for cooperation.
In 1995, Governor Lincoln Almond proposed the Industrial Property Remediation and Reuse Act, or the Rhode Island Brownfields bill, to build on the early successes of our State program and provide more tools to facilitate the cleanup of contaminated sites and support their return to beneficial use in the community. This bill was passed into law with overwhelming support by the legislature and provides DEM with the ability to enter into Settlement Agreements, which include Covenants Not to Sue, with performing parties. While the law provides specific relief from liability to bona fide perspective purchasers and secured creditors, it also allows other performing parties, including cooperative responsible parties, to enter into Settlement Agreements. These new tools prompted the cleanup and redevelopment of 48 sites, restoring 532 acres of contaminated property and creating or retaining 1010 jobs and $76.9 million dollars in property and income tax annually. The key aspect of this program improvement was the certainty and finality that the law and the Settlement Agreements provided to performing parties.
Further program improvements came in 1997 with the amendment of the site remediation regulations to include a series of cleanup standards proportionate to the future use of properties. These amendments added three options for a performing party to use to determine the end goal of their cleanup. The first option, or tier, involves a series of tables for performing parties to use to look up the appropriate cleanup goals corresponding to the groundwater classification and future use of the site. The second tier provides an accepted model where performing parties could input unique, site specific information to come up with a site-specific goal. Finally, the third tier preserved the traditional risk assessment option. The selection of the method is left to the performing party.
The end result of these efforts is our existing program, which provides us with all the regulatory tools needed to respond to proposed projects, compel the investigation and remediation of sites, and support redevelopment efforts involving Brownfields. These regulations, however, strictly address the Department's reaction to issues presented to us through either notification of contamination or other proposed projects.
The need to support economic redevelopment in Rhode Island's urban, and historically industrial, communities and initiate cleanup activities in these areas prompted Rhode Island's effort to seek a Brownfields Demonstration Pilot grant from EPA in 1996. The pilot was focused on a proactive approach, undertaken with many municipal and economic development partners, to identify Brownfields sites, assess their condition, estimate the costs of cleanup, and support the marketing of the sites for reuse. The project was an ecosystem based approach to identifying vacant or underutilized sites along the Blackstone and Woonasquatucket Rivers. Rhode Island was awarded a two hundred thousand dollar grant in 1997, which the State matched with an additional two hundred and ten thousand dollars. To date 54 baseline site assessments and 8 Remedial Evaluation Reports (which include cost estimates for cleanup) have been completed at Brownfields sites in the pilot area. Also, and perhaps more importantly, a healthy dialogue and productive working relationship has been established between the economic development agencies, the Department of Environmental Management and the municipalities.
In 1998, our proactive Brownfields efforts were supplemented by the designation of Providence as a Brownfields Showcase Community. This designation provided a higher level of involvement by EPA and several other federal agencies, most notably Housing and Urban Development, in supporting the reuse of contaminated sites in Providence.
Recent efforts under the Brownfields Pilot and Showcase Community projects have primarily been focused on supporting the investigation and cleanup of properties along the proposed route of the Woonasquatucket River Greenway and bike path. The investigation and remedial design activities have largely been completed but securing funding for the remediation has proved to be a major problem. The funding problem mainly is due to the fact that the properties of concern, the former Lincoln Lace and Braid and the former Riverside Mills properties, are designated for use as open space, bike path areas, and other recreational facilities, and do not have a future income stream to support a loan to fund remediation costs. The current lack of funding support for projects of this type, i.e. restoration to a natural resource or public use function rather than commercial redevelopment, has slowed progress on this very important project.
We have leveraged our success and relationships developed under the pilot and Showcase Community projects to approach other municipalities and support their Brownfields redevelopment efforts across the State. In addition, DEM and the Rhode Island Economic Development Corporation were recently awarded a $1,000,000 grant to establish a statewide revolving loan program to assist in the funding of remediation costs.
The evolution of our State program is in many ways similar to the process other States have followed. Each State has adjusted its approach somewhat to meet the needs and desires of its constituencies and to strive for the most efficient and effective models based on its particular circumstances. This has led to many innovative approaches supporting the cleanup of thousands of sites of all shapes and sizes nationally.
Rhode Island's Support of Senate Bill S-2700
Senate Bill S-2700 provides a strong federal parallel to the Brownfields statutes and programs adopted in Rhode Island and other States. While administrative reforms to Superfund have provided much improvement and relief in our efforts to bring these sites back to beneficial reuse, those efforts have been limited by the confines of the existing CERCLA statute. S-2700 incorporates many of the concepts espoused in Superfund administrative reforms directly into the statute and expands the boundaries of CERCLA to address some of the obstacles to cleanup and redevelopment that are created by the existing law.
Funding is addressed in S-2700. Cooperative agreements for site investigations, characterization, and inventory are specifically outlined in the bill and revolving loan funds are established and funded. In addition to reaffirming these existing programs in the statute, S-2700 includes provisions for financial assistance in remediation of Brownfields. One of the most frequent barriers cited when negotiating Brownfields project agreements is the lack of funding assistance for the actual cleanup work.
We also support and applaud the provisions of S-2700 that provide funding to develop the capacity for local government agencies to evaluate, clean up and redevelop Brownfields properties. Our experiences, as well as the experiences of States across the country, show that the most effective projects include active participation and support from the local government in partnership with State, federal and private partners. This investment in developing more program expertise at the municipal level is money well spent.
A key provision of S-2700 establishes grants for properties where the projected future use is for the public benefit, and there is not an anticipated future income stream to repay a loan. This provision recognizes the full potential of brownfields to contribute to the revitalization of our urban areas. These areas have typically suffered loss of jobs and tax revenue, but also loss of environmental quality. Brownfields offer not only an opportunity for economic revitalization, but also for environmental improvements, from parks and trails to wetlands restoration. Both types of improvements are critical to improving the quality of life in our urbanized communities. In Rhode Island, the Almond Administration has consistently made this a top priority. The State has invested heavily in urban parks, greenways and bike paths and our watershed protection efforts focus as much on our urban watersheds as the more pristine, rural areas of the state. And of course, we now know that improving the quality of life in our cities is an absolutely necessary ingredient of any effort to control sprawl, limit unplanned and uncontrolled development in our suburban and rural communities, and develop more sustainable growth patterns.
Although the $150 million allocated for these new purposes is small in comparison to the magnitude of the challenges we face nationally, we support this investment as a tremendous step forward. It will help the States integrate Brownfield properties more fully in our efforts to revitalize our urban economies, improve the quality of life both in our urban, suburban and rural communities, and promote Smart Growth statewide.
S-2700 provides relief to innocent parties, including the owners of contiguous properties, bona fide prospective purchasers, and down gradient receptors. Rhode Island has historically provided these parties with relief from liability through statutory protection or enforcement discretion provided that they cooperate with ongoing investigations and provide access. We have seen areas in our cities and towns become virtual dead zones because they are in close proximity to contaminated sites. The fear of liability spilling over from one property to another has pushed people to look elsewhere when considering expansion or relocation of their businesses or activities. We believe the proposed statutory changes incorporate fairness and reasonableness into the liability structure of the program and will facilitate economic activity around contaminated sites. Furthermore, the windfall lien provisions will protect the taxpayer's investment in Brownfields properties and will eliminate the potential of owners of contaminated sites profiting inappropriately from government efforts to support redevelopment through assessment or cleanup.
Perhaps the most significant and potentially beneficial aspects of S-2700 are the provisions included in Title III on the State Role. We support the provisions in Title III that prevent a federal enforcement action that would be duplicative of the State's oversight role. While we recognize that the Superfund program has evolved away from the duplication of effort and heavy-handed federal supervision sometimes seen in the past, developers and other parties interested in reusing Brownfields sites continue to cite the potential double jeopardy issues as a cause for concern. Administrative reforms, including comfort letters and interagency memoranda of agreement for voluntary cleanups, reflect the more cooperative approach that EPA and many States have managed to develop and that we in New England are now more used to as we seek to address together the still challenging universe of contaminated sites in our region. However, these administrative fixes are not always sufficient to satisfy all interested parties. We believe the changes proposed in S-2700 will provide definitive answers to those concerns and as such will encourage more participation in our redevelopment efforts.
Finally, from our perspective the bill proposes reasonable standards for a State program. Some States may disagree and seek even greater autonomy but we believe the requirements make sense from an accountability point of view. We are concerned that future regulations not expand on these requirements so as to establish a burdensome paperwork process that would defeat the very purpose of this legislation. The eligibility criteria must remain simple, straightforward and relatively easy to meet, and we hope this objective will be clearly articulated in the remaining deliberations.
Summary and Closing In summary, Rhode Island supports Senate bill S-2700 on Brownfields as a strong step towards improving Superfund and supporting the reuse and redevelopment of Brownfields nationwide and in particular in our Ocean State. As we all know, the key issue under Superfund, State cleanup programs, Brownfields programs and voluntary cleanup programs has been to develop more tools and more flexibility to allow us to more efficiently facilitate the cleanup of many types of contaminated properties. Flexibility will be especially critical as we respond to new challenges, such as the sites that we have begun to identify as a result of new initiatives, in particular initiatives that pursue watershed protection, urban environmental improvements, Smart Growth, and Total Maximum Daily Load limits for our water bodies that are still not meeting their water quality standards.
We believe S-2700 adds much needed new provisions for flexibility and efficiency to the CERCLA statute. We strongly support, and need, the liability relief and finality provisions at the federal level so that we can offer more certainty in our negotiations at the state level. We believe that requirements for state program eligibility, as written in this bill, are a reasonable way to ensure accountability and thereby balance the finality and flexibility of state level decision-making. We very much need the proposed funding to States and local governments to continue to develop program capabilities as well as continue to directly evaluate, clean up and redevelop Brownfields properties. This bill will strengthen participation in and coordination of Brownfields redevelopment all government levels.
Once again, I would like to commend Senator Chafee and the other committee members for crafting a Brownfields bill that has bi-partisan sponsorship and addresses many of the concerns we have had with the Superfund program. Thank you again for the opportunity to testify, from the Rhode Island perspective, on this most important legislation. .