AN ACT CONCERNING BROWNFIELD REMEDIATION AND REDEVELOPMENT.

This bill expands the state's financial and administrative capacity to remediate contaminated sites (i. e. , “brownfields”). It establishes a new program to provide financing for remediating these sites and funds it with Urban Act bonds issued for economic development. Towns, businesses, nonprofit organizations, and regional economic development agencies may apply for financing to the Department of Economic and Community Development (DECD) commissioner, who may fund an application subject to the Office of Policy and Management (OPM) secretary's approval. The bill specifies the process and criteria for approving and administering the financing.

The bill also establishes new policies for funding remediation projects in designated areas. It allows state agencies to undertake activities, including financing development projects, in floodplains located in state-designated development areas if the activities will not injure people or damage property. The bill also requires the OPM secretary and DECD commissioner to establish a pilot program for identifying and evaluating sites in areas the secretary designates as priority areas for state-funded infrastructure and development projects.

The bill expands the Office of Brownfield Remediation and Development's (OBRD) duties, makes the office a unit of DECD, and requires the Department of Public Health (DPH) to assign a liaison to the OBRD. The new duties require the office to make it easier for developers to access state brownfield remediation programs.

Lastly, the bill shifts the administration of the Brownfields Pilot Program from OBRD to DECD. Under current law, the program must designate four towns where contaminated properties hinder the towns' economic development and remediate those sites. The bill increases the number of participating towns to five and expands the criteria for selecting the contaminated properties.

The bill establishes a program to provide the financing needed to remediate contaminated properties slated for redevelopment or reuse. A property qualifies for financing if it is abandoned or unused and requires remediation, which may occur before or during the property's restoration, redevelopment, or reuse.

The bill authorizes the DECD commissioner to provide different types of financing for investigating and cleaning up properties. He can provide grants, loans, loan guarantees, and credit extensions or purchase a portion of a loan the Connecticut Development Authority (CDA) made for redeveloping a remediated property. He can also combine these different types of financing in one package.

Developers can use the funds to investigate and assess contaminated sites; prepare appraisals and feasibility, engineering, and marketing studies; acquire and improve sites; demolish structures and remove the debris; clean the land; purchase environmental insurance; and cover other reasonable costs the DECD commissioner deems necessary to start, implement, and complete the clean up.

The bill establishes a nonlasping revolving loan fund for the program and allows the governor and the State Bond Commission to capitalize the fund with the proceeds of Urban Act bonds issued to fund economic development programs. It also taps money from other sources for the fund. These include:

1. principal and interest payments on loans made under the existing Special Contaminated Property Remediation and Insurance Fund, which provides loans for assessing and demolishing contaminated properties;

2. money the attorney general recovers from the parties that polluted the properties being cleaned up under the program (see below); and

3. all other funds the law requires to be deposited in the fund.

If the OPM secretary approves, the commissioner may credit any federal or private dollars to the fund's assets if they were provided for a project being assisted under the program.

Lastly, the bill requires repayments on loans made under the fund to be credited to it. Interest and other income the fund generates must also be credited to the fund.

Towns, local and regional nonprofit economic development organizations acting on a town's behalf, and for-profit and nonprofit organizations qualify for financing. They do so when they apply separately or join with any other eligible applicant to sponsor a project.

An eligible applicant must apply to the commissioner for funds on forms he must provide. It must describe the proposed project and its potential benefits and its technical and financial capacity to undertake the project. The applicant must also describe the site's condition, including the findings of any environmental assessment conducted on it, and the budget for remediating the site. Lastly, it must list the names of the people responsible for cleaning up the property.

The commissioner must review each application and decide whether to approve, disapprove, or modify it based on:

1. the funds available;

2. the estimated assessment and cleanup costs, if known;

3. the town's relative economic condition;

4. the financing needed to complete the project;

5. whether the applicant would undertake the project without financial assistance;

6. the project's environmental and public health benefits;

7. the project's relative economic benefits, including the number of jobs it will create or retain, to the town, the region, and the state;

8. when the site became contaminated;

9. the applicant's relationship to the party that contaminated the site; and

10. other criteria the commissioner establishes, which must be consistent with the program's purpose.

In approving or modifying an application, the commissioner must decide the type and amount of financial assistance to provide.

The commissioner may also provide financing to a developer who applied to CDA for financing. He can do this if CDA submits an application to him on the applicant's behalf requesting his participation in the financing. The application must contain all the information the bill requires from applicants applying directly to the commissioner, but the commissioner cannot require the applicant to submit an additional application.

The commissioner may tap the fund to help finance projects receiving CDA financing. He may do this by purchasing a portion of the CDA loan. The maximum amount he can purchase depends on the project's location. He may purchase up to 90% of the cost of projects located in the 17 targeted investment communities and up to 50% of the costs in the other towns. If the project involves planning studies or site assessments, he can purchase up to 90% of the cost regardless of its location. The developer can match the commissioner's contribution with real property or other noncash contributions. And, if federal law allows it, the commissioner can use federal dollars the town received to remediate the property.

The bill authorizes the commissioner to attach any terms and conditions he deems necessary to achieve its purposes. These specifically include:

1. assurances that the applicant will discharge his or her obligations regarding the project and

2. requirements that he or she provide the department with letters of credit; liens; security interest in goods, equipment, inventory, or other property; or other appropriate security.

When DEP has already spent funds to contain, remove, or mitigate the contamination on a property being assessed and remediated under the program, the bill allows the DEP commissioner to seek to recover these costs from anyone responsible for contaminating the property. She may do this by requesting the attorney general to bring a civil action against the responsible party. The attorney general must do this in conjunction with action the commissioner took to address the contamination.

The law already allows the commissioner to take these steps with respect to property she included in the hazardous waste disposal site inventory.

1. the actual cost to identify, evaluate, plan for, or remediate the site;

2. any associated administrative costs up to 10% of the actual costs;

3. the cost of recovering the reimbursement; and

4. the interest on the actual costs at 10% per year from when they were paid.

The bill prohibits a defendant in these actions from acting against anyone who is party to a DEP covenant-not-sue with respect to the pollution on the site. (Under these covenants, the party that cleaned the site according to DEP standards does not have to clean it again if more pollution is subsequently found on the site. )

The bill makes it easier for state agencies to undertake activities in floodplain areas. By law, a state agency must obtain the DEP commissioner's approval before transferring state-owned property or doing things that could affect land uses in a floodplain. Under current law, the DEP commissioner must publish a notice describing the proposed activity at least 30 days before rendering a decision. She must also allow the public to comment and hold a public hearing if she thinks it is necessary or if 25 people petition for one. Under the bill, she must follow the procedure specified in the Uniform Administrative Procedure Act.

Under current law, the commissioner may approve the activity if it serves the public interest, will not harm people or property in the floodplain, and complies with the National Flood Insurance Program. If a town or private organization wants to implement the activity with state funds, it must be informed that the activity could increase flood insurance premiums.

The bill designates the activity as serving the public interest if it is to be remediated according to DEP standards, and is located in a development zone, as designated in the State Plan of Conservation and Development.

By law, the OPM secretary must recommend areas where the state should target development dollars to the Continuing Legislative Committee on State Planning and Development by 2010.

The bill requires the DEP and DECD commissioners, in consultation with the OPM secretary, to identify and evaluate brownfields in these areas. They must work with other state and local agencies as a coordinated team to (1) solicit proposals for redeveloping the sites, (2) identify the necessary permits and approvals, and (3) review all requests for funding and permit approvals.

The commissioners cannot begin these actions until 2010 because the law requires OPM to submit the recommended funding areas to the legislature the next time it revises the five-year State Plan of Conservation and Development, which is due that year.

The bill expands OBRD's duties and refines and expands some existing ones. OBRD's new duties include (1) providing a single point of contact for financial and technical assistance for state and quasi-public agencies and (2) developing a common application to be used by all state and quasi-public entities providing financial assistance for assessing, remediating, and developing brownfields.

OBRD must analyze federal browfield programs in addition to state programs. It must also direct its outreach program to towns and individuals, in addition to existing and potential property owners.

The bill makes OBRD an organizational unit of DECD and requires DPH to assign a liaison to work with the office. Current law places OBRD within DECD for administrative purposes only. It also requires DEP and CDA to assign liaisons to the office.

PA 06-184 required OBRD to establish a pilot program to clean up contaminated properties that hinder a town's economic development. It required OBRD to run the program in four towns, one of which must have between 25,000 and 50,000 people, one between 50,000 and 100,000 people, and two must have more than 100,000. The bill increases the number of participating towns to five and specifies that the additional town must have fewer than 25,000 people. It also specifies that the sites in these towns must be assessed and remediated according to prevailing standards and practices.

The bill shifts responsibility for the program from OBRD to the DECD commissioner and expands the funding criteria. Under current law, OBRD must base its decision on (1) the remediated site's potential for economic development and (2) the extent to which the redeveloped site will contribute to the town's tax base. Under the bill, the commissioner must consider these criteria plus the feasibility of the project and its environmental and public health benefits.

The House referred the bill to the Environment Committee, which increased the number of towns in the pilot program from four to five and specified that one of the towns must have fewer than 25,000 people.

sHB 7369 (File 340), makes similar changes with respect to OBRD's organizational status and role. But it also specifies minimum staffing levels and appropriates funds for this purpose. It also requires the DPH and the Office of Responsible Growth to assign liaisons to OBRD.

sHB 7368 (File 382) also makes it easier for state agencies to undertake fund activities in floodplains located in designated development zones.

sSB 784 (File 385) requires zoning regulations to allow only farming, passive recreation, and fishing and hunting in floodplains.

Yea

Nay

(03/20/2007)

Yea

Nay

(04/18/2007)