AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE BROWNFIELDS TASK FORCE.

This bill makes many changes to the state's policies and programs for cleaning up and redeveloping contaminated property (i. e. , brownfields). It establishes a new program to finance the remediation and redevelopment of these sites. It allows the Connecticut Development Authority (CDA) to guarantee loans banks make for this purpose and allows CDA to issue bonds on towns' behalf for remediating sites for residential and mixed uses. The bill allows tax assessors to reduce the value of contaminated business property if the owner agrees to remediate it.

The bill gives property owners more options for voluntarily cleaning up contaminated properties. It expands the role of licensed environmental professionals (LEPs) in overseeing the remediation process and establishes procedures for documenting, verifying, and auditing their work. The bill also broadens the conditions for entering into covenants not sue with owners of land undergoing remediation. It sets conditions for developing contaminated property in floodplains in state-designated development areas.

The bill authorizes a pilot program for identifying brownfields in areas the State Plan of Conservation and Development designates for development. It reestablishes the Brownfields Task Force and requires it to submit additional recommendations to the legislature for remediating brownfields by February 1, 2008.

The bill expands Office of Brownfield Remediation and Development's (OBRD) duties and makes it a unit of DECD. It also increases the number of towns OBRD must select for the Brownfields Pilot Program from four to five.

*House Amendment “A” adds all the provisions except the reestablishment of the Brownfields Task Force, which is in the underlying bill.

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, in consultation with the Department of Environmental Protection (DEP) commissioner, to provide different types of financing for investigating and cleaning up properties. She can provide grants, loans, loan guarantees, and credit extensions or purchase a portion of a loan CDA made for redeveloping a remediated property. She can also combine these different types of financing in one package.

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.

Developers can use the funds for a wide range of activities needed to investigate, assess, remediate, and redevelop brownfields. These include:

1. investigating and assessing contaminated sites;

2. planning and engineering activities, including hiring environmental consultants, performing laboratory analyses, and preparing appraisals and marketing studies;

3. acquiring and improving sites; demolishing structures and removing the debris and other waste;

4. cleaning the land and monitoring the groundwater;

5. purchasing environmental insurance; and

6. covering other reasonable costs the DECD commissioner deems necessary to start, implement, and complete the clean up.

The bill limits funding for acquiring sites to a site's fair market value as if the site were cleaned.

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.

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 know to be 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. She 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 bill bases the maximum amount the commissioner he can provide based on the project's location. The assistance may cover 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 she 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. the interest on the actual costs at 10% per year from when they were paid;

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

4. the cost of recovering the reimbursement.

The bill prohibits a defendant in these actions from suing anyone who is party to a DEP covenant-not-sue with respect to the pollution on or coming from 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 allows CDA to establish a program specifically for guaranteeing loans banks make to developers for investigating and remediating contaminated sites. The guarantees may cover up to 30% of the loan amount. A borrower qualifies for a loan if he meets the eligibility criteria under the Brownfield Remediation and Development Program.

The bill allows CDA to finance the cleanup of contaminated sites for residential or mixed use developments. The law allows CDA to issue bonds on behalf of towns to finance remediation projects. Current law limits the financing to sites will be reused in a way that will generate new business activity or add new jobs in the town where the project is located or benefit the town and the state's economies in other ways.

The bill specifies circumstances when tax assessors may reduce the assessment on a contaminated business property. Current law prohibits them from reducing the value of contaminated business property if the federal and state environmental protection agencies or a court determined the owner contaminated it. The provision also applies to person who purchases a property whose contamination was noted in the land records.

The bill allows the assessors to reduce the property's value if the owner or his successor in title:

1. volunteers to remediate it under an agreement with DEP,

2. files the agreement in the town's land records, and

3. has prepared a DEP-approved remediation plan.

By law, the parties must report to the DEP commissioner on the property's environmental status before completing the transfer of property from which hazardous waste was generated. They must do this by completing one of four forms based whether or not the property is contaminated. They must complete Form III if the property is contaminated or its environmental status is unknown. And, they must complete Form IV if the property was contaminated but subsequently cleaned up. In both cases, the form must identify the party responsible for investigating and remediating the property (i. e. , certifying party).

Under current law, the commissioner must decide whether to review and approve the property's remediation or allow a LEP to do so based on statutory criteria. She must notify certifying party about here decision within 45 days after receiving a completed Form III or IV. The bill requires the certifying party to use an LEP unless the commissioner notifies it otherwise within 75 days after receiving the completed form.

The bill expands the LEP duties with respect to Form IIIs that were submitted before October 1, 1995. By law, the certifying party may attach a DEP form describing the property's environmental conditions (i. e. , environmental condition assessment form). Again, the commissioner must decide whether she must approve the clean up or allow an LEP to verify the clean up. She has up to 45 days to inform the certifying party about her decision. If she allows the certifying party to use an LEP, the bill requires the LEP to verify that the property was investigated according to prevailing standards and guidelines as well as cleaned up according to remediation standards.

If the commissioner allows an LEP to verify a property's clean up, the law requires the LEP must submit certain planning tools to the commissioner. These include a schedule for investigating the property and a plan to remediate it. Under current law, the LEP must submit these tools to the commissioner within 30 days after she notified the certifying party that it can use an LEP.

The bill alters the timeframe for notifying the party. It requires the commissioner to notify the party within 75 days after notifying the party that the form is complete.

The law imposes deadlines for completing the investigation and beginning the clean up and anchors both to the date of the commissioner's notice that the form is complete. The investigation must be completed within two years of the notice and the clean-up started within three, but the commissioner can impose later deadlines in writing. In meeting each deadline, the bill requires the certifying party to document that the property was investigated according to prevailing standards and guidelines and that the remediation had begun. In both cases, the certifying party must document these facts on a form the commissioner prescribes and that an LEP approved in writing.

Even if the commissioner allows an LEP to verify that the certifying party investigated the property and began the clean-up, the bill allows her to determine at any time that she must review and approve these activities. She must notify the certifying party if she decides that this is the case.

After the property has been completed cleaned up, the law requires the certifying party to verify that fact by submitting a “final verification” to the commissioner. The verification must be prepared by an LEP even if DEP was responsible for verifying the form. The bill requires the LEP to prepare the verification on a form the commissioner prescribes.

The bill allows the commissioner to audit the LEP's verification, but generally allows her to do so only within three years after she received it. The commissioner must submit her audit findings to the certifying party and the LEP. The three-year deadline applies to verifications the commissioner receives after October 1, 2007.

The bill specifies conditions under which the commissioner can audit a verification three years after she received it. She can do so if:

1. she determines that the verification was based on materially inaccurate, erroneous, or misleading information or that misrepresentations were made when the verification was submitted to her;

2. the verification was submitted to after ordering to complete the forms regarding a property environmental status;

3. the property must be monitored or operated and maintained in a certain way after the verification;

4. a required environmental land use restriction was not recorded in the town's land records as the law requires;

5. the property was transferred without completing the required forms; or

6. information shows that the clean up may have failed to prevent a substantial threat to the public health and environment.

The bill broadens the conditions under which the environmental protection commissioner may enter into a covenant not to sue (CNS). The law allows her to enter into a CNS with someone who owns or intends to buy a contaminated property and with a lender who holds a security interest in that property. The CNS assures the parties that the commissioner will not require any additional clean-up after they remediate the property according to DEP's standards.

The parties qualify for a CNS if they parties did not cause the pollution or were involved with those that did and commit to cleaning up and redeveloping the property. Under current law, they must submit to the commissioner (1) their plan to remediate the property to the commissioner or (2) their final report on its remediation. The commissioner must approve both documents before she can entire into a CNS with the parties. Alternatively, the bill qualifies the parties for a CNS if they submit a plan to investigate and remediate the property to the commissioner for approval (i. e. , brownfield investigation plan and remediation schedule). This option is available to the parties if they submit this plan before the commissioner approved the remediation plan or final remedial action report authorized under current law.

The plan must include a schedule for investigating the property; submitting the investigation report and detailed written remediation plan to the commissioner, and completing the remediation. The investigation must be done according to the prevailing standards and guidelines and the remediation must be done according to the commissioner's standards. The commissioner may review the remediation plan and, if appropriate, approve it. If the commissioner approves the plan, it is considered to be incorporated by reference in the CNS. She may require the parties to provide additional plans and reports for her approval.

In approving the plan, the commissioner must decide if she will oversee the investigation and remediation of each property or delegate that task to an LEP. Regardless of whether the commissioner chooses to oversee the investigation and clean-up, the parties must perform the tasks under an LEP's direction. They must also ensure that the LEP approves in writing each documents they must submit to the commissioner. They must do this for each property, including those under the commissioner's oversight.

The bill expands the ground under which the commissioner can require a party to perform additional remediation under a CNS. A CNS generally assures the party that the commissioner will not require additional remediation after they remediate the property according to DEP standards. But the law specifies situations where she may. These are failing to:

1. remediate the property according to the plan and schedule,

2. comply with the covenant while the property is being remediated,

3. meet the standards in effect when the commissioner approved the covenant, and

4. record all land use restrictions in the land records.

The commissioner can also require additional action if she determines that the party provided false and misleading information when it sought the CNS.

The bill specifies conditions under which the commissioner can require additional remediation when she approves a CNS based on a brownfields investigation plan and remediation schedule. It allows her to require additional remediation if

1. the party failed to pay the entire CNS fee or the amount required by the payment schedule,

2. the remediation performed under the plan did not comply with the standards that were in effect on the effective date of the CNS or did not comply with the plan, and

3. she did not approve the remediation plan.

In addition, the commissioner can specify the remedial actions the party must take before she approves their remediation plan if she finds substantial noncompliance with the investigation plan and remediation schedule and there has been no good faith effort to substantially comply with it.

The law requires the commissioner to charge fees for approving CNSs. The fee equals 3% of the property's value as though it were not contaminated. Under the bill, the commission may allow a party to pay the fee according to a written payment schedule. She may do this for parties that submit a brownfields investigation plan and remediation schedule. The payment schedule must be incorporated in the CNS by reference.

The bill exempts towns or their economic development agencies from paying the fee. It also exempts nonprofit economic development corporations acting on a town's behalf.

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, she 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.

This bill reestablishes the Brownfields Task Force indefinitely and requires it to report additional recommendations to the legislature on how to clean up contaminated properties. The report is due February 1, 2008. The initial report was due January 1, 2007.

The bill increases the task force's membership to 11 by appointing the DECD commissioner and the OPM secretary or their designees to the task force. The current members are legislative appointees; a representative of the Department of Environmental Protection, appointed by its commissioner; and two gubernatorial appointees. All members must have expertise in environmental law, engineering, finance, development, consulting, insurance, or other relevant areas.

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;

2. developing a common application to be used by all state and quasi-public entities providing financial assistance for assessing, remediating, and developing brownfields; and

3. direct its outreach program to towns and individuals, in addition to existing and potential property owners.

The bill redefines OBRD's duties regarding providing information about existing programs and services. Under current law, it must create a place where towns and economic development agencies can help developers comply with state and federal clean up requirements and qualify for state funds. Under the bill, OBRD must create an office to provide technical assistance and information about the state's technical assistance, funding, regulatory, and permitting programs.

The bill eliminates OBRD duty to analyze state browfield programs and to create new funding sources for them.

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.

The law requires DEP and CDA to assign liaisons to the office. The bill requires the Department of Public Health (DPH) to assign a liaison as well. It also requires DECD, DEP, and DECD commissioners and the CDA executive director to enter into a memorandum of understanding regarding their agencies respective responsibilities vis-à-vis the OBRD.

Lastly, the bill allows rather that requires OBRD to recruit volunteers with brownfield remediation experience to help it achieve its goals.

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 changes some of the criteria for selecting the pilot towns. It drops the requirement to select a town that has between 25,000 and 50,000 and instead requires OBRD to select a town with less than 50,000 people. It also requires OBRD to select a town without regard to population.

The bill 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 (File 340) to the Appropriations Committee, which reported a substitute, deleting provisions establishing new brownfield remediation programs, expanding the Office of Brownfield Remediation and Development's (OBRD) pilot program for remediating and redeveloping contaminated sites in targeted cities, and increasing OBRD's duties and its capacity to fulfill them.

Yea

Nay

(03/20/2007)

Yea

Nay

(04/19/2007)

Yea

Nay

(06/01/2007)