I am pleased to appear today on behalf The U.S. Conference of Mayors, a national organization that represents more than 1,050 U.S. cities with a population of 30,000 or more.
I presently serve as a co-chair of the Conference's Mayors and Bankers Task Force, a role that I share with Mayor Paul Helmke of Fort Wayne.
Mr. Chairman, the Conference's statement addresses a number of areas pertaining to the legislation before this Committee today.
It addresses key issues for mayors in this debate, noting particularly the need for liability relief and "finality" to promote brownfields redevelopment.
It discusses why Congress needs to act on legislation to further the efforts of cities and other communities in recycling brownfield properties. It presents new information on the scope of the brownfields problem and benefits of positive policy reforms, a discussion which largely focuses on the results of the Conference's Second Annual Brownfields Survey that was released last month.
It offers our perspectives on the status of lender support of brownfields redevelopment, particularly how legislative reforms can help stimulate additional private sector investment in these sites.
Finally, it reviews how your legislation, "Superfund Program Completion Act of 1999" (S. 1090), responds to key issues raised by mayors on brownfields and selected Superfund reforms.
Key Issues for Mayors
Mr. Chairman and Members of this Committee, you are well aware of the mayors' continuing interest in securing legislative reforms to Superfund, particularly issues pertaining to brownfields redevelopment.
My colleague, Fort Wayne Mayor Paul Helmke, recently appeared before you to talk about the challenges of urban growth and the preservation of open space. His comments added to the substantial record of this Committee on the need for legislative reforms to Superfund and other actions supporting the recycling of brownfields.
As we review the legislation - "The Superfund Program Completion Act of 1999 " - before this Committee today, the Conference believes you have crafted a series of reforms that will help move brownfields redevelopment forward in assisting local efforts to recover these sites and return them to more productive use. These reforms, we believe, will help us move to the next level, beyond simply "comfort letters" on liability and limited grant commitments for assessments and cleanups.
Most mayors will tell you that the major impediment in securing private capital for the clean up and redevelopment of brownfields is Superfund's liability regime.
We believe that:
1. It is time to free innocent parties, both public and private entities, from Superfund's unfair liability strictures. Parties that had no part in causing the contamination at individual sites should no longer be held liable under federal law.
2. It is time to create more certainty for the current owners of contaminated properties - the hundred of thousands of sites in every place in America that are likely to be brownfields at some time in the future - by providing them certainty in their cleanup costs and liability exposure. Owners of non-federal interest sites need certainty about the rules that apply to them, certainty about the costs to remediate these sites and certainty that their actions terminate the risk of future liability.
Mr. Chairman, your legislation reflects your understanding of these issues and the need to deal specifically with the challenges before us in addressing the many thousands of brownfields that already exist and to take steps now to reduce our predisposition toward creating more brownfields in the future.
In explaining our views on innocent parties, let me provide some further perspectives from our vantage point as mayors. We have been living under a federal statute and its strict liability regime - although well-intended and largely aimed at more contaminated properties posing greater threats to the public - that has dramatically slowed progress by all parties in coming to terms with lesser contaminated properties, sites we generally describe as brownfields.
It has produced a legacy of inaction by property owners, be they innocent or responsible parties, which we now measure in terms of thousands of properties and millions of acres. In our National Survey, which I discuss later, 180 cities provided estimates of the acreage of brownfields in their communities. The total acreage exceeds the combined land area of the cities of Seattle, San Francisco and Atlanta.
And, we don't believe that continuing charges of who is or who is not more protective of the environment, etc. is in tune with the reality of what is happening in America. The nation will continue to warehouse acre upon acre of contaminated soils and materials for the foreseeable future, until we respect the scale of this problem and the many complicated dimensions associated with our current liability regimes.
Rhetoric and political advantage will not cleanup one brownfield, but bipartisan legislative action will. We all need to put aside political posturing and confront the challenge before us.
I would note, however, that have serious concerns about the proposed termination of the Superfund program at this juncture and the absence of a plan to reinstate the feedstock taxes. We believe that continued dialogue on these issues and forward progress on the legislation are the best way to bring these issues to closure on a bipartisan basis.
As a mayor and a sometime expert on real estate law, we are taking on a daunting task as we seek to enact reforms and policies to undo the substantial "liability fear" which is now part of our investment and development psyche.
Mr. Chairman, your legislation moves the process forward, and we support your efforts in this regard.
Today, I want to focus on two key issues in this debate.
First, acting on the innocent party liability relief is a threshold issue.
Your legislation offers new standards for absolving innocent parties of liability under Superfund. When mayors talk about this issue, they are most often focusing on brownfields. The Conference strongly believes that innocent party-relief is the crucial first step, legislatively, in encouraging more private sector attention to and investment in the clean up and redevelopment of brownfields.
As a mayor and a representative of local governments, I encourage you to revisit these provisions to grant further relief to cities and counties who already hold, in public ownership, substantial inventories of these sites. The relief you have provided doesn't fully account for the many properties that have already been acquired by cities and other public agencies. For example, many sites now owned by cities were acquired in the normal course of performing local government functions, and many of these were acquired involuntarily. This is not the same thing as a private party acquisition, and as such, should be treated differently.
We believe that innocent party relief, including further consideration of -existing local government holdings, will move private investment forward on many sites, particularly in cases where the property is abandoned or substantially underutilized and where the parties who caused the contamination are long gone. But, this is only one part of the equation.
Second, "finality" must be provided to prompt current owners to move forward and cleanup contaminated properties.
The issues surrounding what some might call "active brownfields" is perhaps the biggest challenge before us. Active properties - those now in use and underutilized and those that are inactive due to concerns about liability - remain the most difficult challenge for mayors and other public officials, and most certainly for the Congress.
First, we support efforts to delineate among classes of properties and to allocate authority for final disposition of these properties between U.S. EPA and state governments. The Conference endorses reforms that respect state authority to administer their voluntary cleanup programs for non-NPL properties, without federal intervention except under very limited and extraordinary circumstances.
I would note that your legislation has provided a narrower range of EPA authority than what is provided in the bipartisan legislation (H.R. 1300) offered by Representative Sherwood Boehlert.
On a related issue, I would also note that have not fully vetted your proposal on vesting the states with broader authority on NPL listings.
This balance between state autonomy to act and make final decisions affecting these properties versus the limited or no federal interest in these properties needs to be brought to closure. Clearly, we have proven by the vast inventories of existing brownfields and those in progress that current law doesn't work.
This issue continues to be driven by seemingly abstract debates about unreasonable constraints on EPA's role in this area. Under existing law, we know that EPA has rarely, if at all, intruded upon state decisions on non-NPL or non-NPL caliber sites. The price of keeping EPA over-empowered in this area is simply too high. At the end of the day, all of us need to keep our eye on the goal -- it is about creating a more efficient and effective way of getting responsible parties, who are often the current owners of these sites, and prospective purchasers engaged in cleaning up these properties and returning them to more productive use.
Closure on the issue of finality is the larger problem for brownfields and properties in active use where contamination exists. The threat of federal liability and federal enforcement action, albeit limited in practice, strongly influences private and public behavior, be it current owners or potential developers, of these sites.
In my own community, we have many properties, which are likely contaminated and are essentially "mothballed." Owners wait out the system, dragging down neighborhoods and hurting the broader community's effort to improve conditions in the city. Meanwhile, sprawl is continuing unabated, extracting more life from our existing neighborhoods and communities. This is the life cycle that the current liability regime sustains.
The practical effects of this policy are not felt here in Washington or at the EPA offices, but rather by the citizens in individual neighborhoods and the communities where these properties are located. Today, we generally have to live with the decisions by owners and their choices in managing their properties, behavior that is strongly influenced by the punitive nature of the current federal liability regime. We see property after property that is contaminated and fenced off in every community in this nation, producing what are in effect the "gated communities" of industrial America.
Mr. Chairman, we know that your proposals are intended to break through this impasse. We don't believe there is one right answer to this problem, but we believe that you have offered a viable solution to this problem. Broader state empowerment, at this juncture, is so much better than the current system. The Conference would be pleased to work with you on these provisions as you work toward bipartisan consensus on these issues.
Why Congress Needs to Act on Legislation
Mr. Chairman, we would like to begin by acknowledging your efforts, and those of others on this Committee, to seek legislative reforms to help communities address brownfields and other burdens under Superfund.
Securing consensus on legislative reforms to the Superfund law, with a particular emphasis on brownfields, is a top priority for the Conference of Mayors. The Conference believes the time has come to act decisively and promptly on brownfields and selected Superfund reforms.
Mr. Chairman, the Conference also acknowledges and appreciates the many efforts by the Administration, particularly U.S. EPA Administrator Carol Browner, and others in Congress who have supported policies and initiatives, such as funding for local brownfields programs, to further our efforts to recycle America's land. These programs and policies have certainly helped, and again let us underscore that we are very appreciative of these efforts. But as a nation, we are not making progress at a rate that is quick enough or substantial enough given other considerations, which we discuss further in this statement.
The problem of not redeveloping brownfields and our appetite for using open space is of epidemic proportions and we believe that, to date, our collective actions fail to match the challenge before the nation.
Anyone who examines the brownfields issue acknowledges the importance of adopting broader strategies to promote the redevelopment of these sites. And, they also share a sense of urgency in acting promptly to address this national problem.
For our part, we have tried to articulate why action and leadership by the Congress is needed. We have also directed our efforts in support of bipartisan efforts to move legislation forward. We also believe that taking on the substantial challenge of brownfields requires broad consensus among Democrats and Republicans, on many fronts. And, such consensus needs to be enduring over time, because the nature of this problem does not lend itself to a one-time legislative correction.
We anticipate working with you and future Congress' on redirecting the tax code, infrastructure investment patterns particularly in transportation, and other policies in the environmental arena and in housing, to make recycling our nation's land part of the nation's development life cycle.
We envision a broader commitment by Congress to challenge investment practices and public, private and individual decision-making that unnecessarily consumes our precious greenfields, as brownfields are discarded.
We also believe that the Congress and the Administration must answer this challenge through bi-partisanship, which explains why the Conference has been steadfast in urging bipartisan action. To underscore our commitment to this principle, the Conference leaders recently wrote to the President, urging him to work with you, Mr. Chairman, and others in Congress on these issues.
We also believe that mayors and many others have helped established a record on the need for federal policy reforms and other actions to deal with brownfields in a more comprehensive manner.
Mr. Chairman, when Mayor Helmke testified before you, he talked about many of these issues during your recent hearings on urban growth and open space. We commend you and others on this Committee for dedicating the time to these issues.
Your legislation responds to many of the key issues he talked about relative to helping us recycle these properties and putting them back into productive use. And, he explained, and mayors agree, that brownfields redevelopment is one of the most effective strategies we have in slowing the rate of consumption of open space and farmlands in proximity to urbanized areas.
These reasons explain why the nation's mayors are strongly supporting bipartisan legislative efforts to redirect federal policies and further engage with our communities in tackling the brownfields problem.
New Information on Scope of Brownfields Problem and Benefits of Positive Policy Reforms
Mr. Chairman, we are pleased to provide you and this Committee with the findings of the Conference's Second Annual Brownfields Survey. Information from this report supports many of our statements about why legislation is needed. It also substantiates many of the key provisions in your legislation.
We have provided you with a copy of the full report. In this statement, we provide some of the key findings to simply amplify what we believe are key issues before the Committee today as you prepare for action on pending legislation.
First, the findings confirm that brownfields are a national problem, which is - very broad in scope. Our results are drawn from more than 220 cities, a sample of cities, both large and small, in 39 states and Puerto Rico.
In our survey, 180 cities reported that, collectively, their more than 19,000 brownfields sites represent more than 178,000 acres, a land area which I already noted is larger than the cities of Seattle, San Francisco and Atlanta combined. This sample size represents a relatively small universe of the nation's more than 20,000 municipalities, suggesting a scale to the problem that is disturbing at best.
Cities were asked to identify the obstacles to redeveloping brownfields in their communities. Of the top three responses, the need for cleanup funds were identified as the number one obstacle, followed by liability issues and the need for environmental assessments. The ranking of these obstacles is the same as last year's survey of about 140 cities.
Mr. Chairman, we note that your legislation deals directly with the top three issues that were identified in our survey. S. 1090 addresses liability issues affecting innocent public and private parties for prospective purchasers and contiguous landowners. Your legislation also specifically authorizes funding for assessments of these sites and funding to clean them up.
We also found that three out of every four cities expressed the view that their communities will need additional resources beyond cleanup funds and assessment funds to help them redevelop brownfields. This finding underscores earlier points in this testimony about the need to look at the tax code and other incentives as well as how infrastructure investment dollars are being deployed.
The survey also documented the substantial benefits that can be realized for cities and the nation through the redevelopment of these sites. About two- thirds of the respondents provided estimates of local revenue gains which could be realized through redevelopment of brownfields. Collectively, they estimated the potential local revenue gains of nearly $1 billion annually under a conservative estimate and about $2.7 billion annually under an optimistic estimate.
In a related area of inquiry, we asked cities to provide us with estimates of how many new people they could absorb without adding appreciably to their existing infrastructure. While 180 of the respondents indicated they could -absorb more people, only 115 could provide actual numbers.
Astoundingly, these 1 15 cities reported that they could absorb more than 3.4 million without adding appreciably to their infrastructure, a population about equal to the City of Los Angeles, our nation's second largest city. To put these numbers in another context, this capacity is equal to about 16 months of the nation's population growth.
In a relatively small sample of municipalities nationwide, albeit generally larger ones, the survey provides clear evidence of the substantial, incumbent carrying capacity of existing communities. If we can find ways to tap these capacities, it offers the potential for substantial savings to all of the nation's taxpayers. Consider the potential savings to the nation if we can minimize the public and private costs of building the equivalent of one new Los Angeles City every 16 months over the next decade.
Consider the implications in terms of our consumption of land. If we pursue broad policy initiatives, like an expanded commitment to brownfields and other means to reinforce existing communities, we could slow consumption of our farmlands and open spaces as well. As one example of such supportive policies, the Conference has previously indicated the mayors' support for Congressional action on the "Better America Bonds" proposal.
In the area of job creation, 168 cities estimated that reuse of these brownfields could generate more than 675,000 jobs. This supports our claims that there are vast opportunities to develop jobs in existing urban areas and neighborhoods, a particularly important finding as we continue to implement welfare reforms emphasizing welfare to work.
Finally, in our findings on the status of state voluntary cleanup programs, cities reported that where such programs were in effect, a sizable majority indicated that these programs were at least satisfactory, if not better. Alternatively, you can describe these results more negatively by combining cities that indicated the questions on state voluntary programs were not applicable with those giving their state a "not very good" or "poor" ranking. Under this method, more than one-half of the respondents indicated that voluntary cleanup programs didn't apply or they were ranked poorly. This assessment suggests the need for further investment in state voluntary cleanup -programs, as you have provided in S. 1090.
Overall, we believe that these findings strongly support the thrust and intent of key provisions in S. 1090 in advancing local efforts to assess, cleanup and redevelop brownfields in communities all across the nation.
Status of Lender Support of Brownfields Redevelopment
Mr. Chairman, as you know, the Conference has been working extensively with bankers and other financial interests to explore ways to increase investment in brownfields redevelopment.
Last year we formed the Mayors and Bankers Task Force to work with representatives of the Federal Home Bank System to examine ways to facilitate investment by FHBS member banks in brownfields.
We have learned that liability under Superfund is their dominant concern. Despite progress in securing "comfort letters" at many sites and growing confidence in state program efforts, there is real anxiety, and we would wish otherwise, among bankers and other lenders on these issues. The specter of Superfund liability severely limits their ability to increase the flow of private capital into these projects.
We have heard repeatedly -- in our work with members of the Federal Home Loan Bank System and in our other activities with financial interests -- that lenders are not willing to move aggressively on brownfields until there are legislative reforms to Superfund.They have told us that the private sector is prepared to substantially increase capital flows to projects on brownfield sites as soon as Congress enacts legislation that explicitly shields innocent parties from Superfund's liability scheme.
Today, we are enjoying the benefits of one of the longest economic expansions in our nation's history. If there is a time to enact changes to stimulate private sector investment in these sites, it is now. This is the time to demonstrate to investors and others -- when private capital is plentiful and available for new investment opportunities -- that brownfields redevelopment can be successful. Such successes will help carry future efforts to attract investment in brownfields during the leaner times which will inevitable come as the economy moves to other cycles.
Mr. Chairman, when mayors talk about brownfields, our federal partners sometimes only hear us asking for federal partnership resources in support of brownfields redevelopment, as if mayors are suggesting that public resources alone will solve the brownfields problem. As you know, mayors are fairly attuned to the realities of our market economy. We know that the private sector is the dominant investor and the pivotal actor in determining how successful we, as a nation, will be in recycling brownfields.
It also explains the particular priority we place on ensuring that any legislation include liability protections for innocent third parties.
However, conversely, we also know that a market economy, fueled by liability reforms, doesn't respond fully to the problem either. There are many types of brownfields in all circumstances and locations. For these reasons, we also know that public investment is crucial in defining our success in recycling these sites.
Again, Mr. Chairman, your legislation accounts for these realities by providing resources directly to communities to help us assess and clean up these sites, providing us with added resources and capacities to partner with the private sector.
"Superfund Program Completion Act of 1999"
Mr. Chairman, finally, let me amplify further some of our views on specific provisions of the legislation before this Committee.
First, I want to again note the liability reforms provided in your legislation, an area that was just discussed earlier in my statement. These provisions need to more fully address the many circumstances where cities and other public agencies unfairly find themselves subject potentially to Superfund's strict liability standards.
The legislation makes important changes to relieve cities and other local governments of liability exposure in their ownership or management of brownfield properties acquired after this legislation become law. As I noted earlier, the Conference urges you to include additional liability relief to account the many circumstances where local governments, in their operations and activities, have previously acquired such properties. We believe that H.R. 1300 provides an excellent model for the provisions that would address these issues.
S. 1090 authorizes funding for both assessment efforts and local cleanup programs, providing criteria to help U.S. EPA determine how to deliver these resources in support of local programs. We are pleased that the bill expressly authorizes these commitments to site assessment and cleanup. We also urge you to provide Congressional appropriators with more flexibility in future years to increase commitments to these activities.
We are pleased that the legislation provides some resources to help states further strengthen their voluntary cleanup programs. We hope that states will use these funds to place some priority, where needed, on efforts to bolster their states programs in support of brownfields cleanups.
Considering the many thousands of such sites all across the country, we would certainly encourage the Committee to explore how these funds could help state programs, particularly those focused largely on NPL-caliber sites, to address brownfields more responsively.
We would also encourage you to consider ways to incentivize states to deliver simplification of the cross-cutting rules which are applicable at brownfield sites, such as how to rationalize the rules and program requirements under RCRA and LUST with provisions under this legislation.
We are also pleased that this legislation clarifies the balance between state and federal program authority, as I discussed earlier. Without more certainty about state authority and decision-making, we can't hope ever to provide the necessary assurances sought by responsible parties and potential investors in developing brownfield sites.
In addition to these brownfields-related provisions, we also wanted to underscore our support for liability reforms that limit municipal liability at Superfund sites where municipal solid waste was disposed. We support the provisions you have provided to limit the liability of cities and counties at such sites and offer them more certainty on their liability costs.
We do not believe it was Congressional intent to have municipal solid waste and municipal sewage sludge considered as a hazardous waste under CERCLA. Various studies have documented that municipal solid waste has been found to contain less than one-half of one- percent (.5%) toxic materials. We therefore support the provisions that exempt generators and transporters of MSW from liability and limit liability for municipal owners and operators of co-disposal landfills.
Mr. Chairman, the Conference supports extension of the Superfund taxes. While we understand your rationale for not including the tax extension in your pending legislation, we also believe that it is very important to secure legislative agreement to reinstate these taxes as soon as possible.
Closing Comments
Mr. Chairman, we want to express again our thanks to you and Members of this Committee for holding this hearing today and for your continuing efforts to move this important legislation forward in the 106th Congress. The nation's mayors believe that the time has come for bipartisan Congressional action on brownfields and selected Superfund reforms.
On behalf of The U.S. Conference of Mayors, we appreciate this opportunity to share the view of the nation's mayors on these important issues.