PA 15-193—sHB 6830

Commerce Committee

Environment Committee

AN ACT CONCERNING THE REMEDIAL ACTION AND REDEVELOPMENT MUNICIPAL GRANT PROGRAM, THE TARGETED BROWNFIELD DEVELOPMENT LOAN PROGRAM AND THE REMEDIATION OF STATE-OWNED AND FORMERLY STATE-OWNED BROWNFIELDS

SUMMARY: This act makes programmatic changes in several Department of Economic and Community Development (DECD) brownfield remediation programs.

It adds new components to the Municipal Brownfield Grant program, which provides grants to municipalities and economic development agencies for assessing and remediating contaminated property. One component allows DECD to make additional grants needed to complete an ongoing project. The other allows DECD to make grants for preparing comprehensive plans to remediate and redevelop multiple brownfields. The act precludes recipients under the existing and the new components from lending grant proceeds to brownfield developers.

The act increases maximum loan amounts under the Brownfield Loan Program from $2 million per year for up to two years to $4 million per year for an unlimited number of years. It also exempts developers, under a narrow condition, from participating in a state voluntary cleanup or liability relief program. The loan program finances investigation and assessment and remediation costs.

The act makes it easier for developers that acquire brownfields they did not contaminate to participate in DECD's program that protects them from liability to the state and third parties. It does so by specifying that the duty to investigate the property's prior ownership and use is tied to the standards that are in effect when they acquire the property.

Lastly, the act expands the range of brownfields DECD can remediate and market to include those the state owned and transferred to other parties (i. e. , formerly state-owned brownfields). It allows DECD to select these brownfields for its brownfields priority list, which was limited to those the state owns. The act makes other changes that expand the range of state-owned brownfields eligible for remediation and marketing. It also makes a conforming technical change.

EFFECTIVE DATE: July 1, 2015

BROWNFIELD REMEDIATION PROGRAMS

1 — Municipal Brownfield Grant Program

The act makes programmatic changes in the Municipal Brownfield Grant program, which provides up to $4 million in grants to municipalities and economic development agencies, including nonprofit regional development corporations and councils of government, for assessing and remediating contaminated property.

It allows the DECD commissioner to award an additional grant if she and the Department of Energy and Environmental Protection (DEEP) commissioner identify the project as a priority for remediation, and the grant:

1. will be used to cover unexpected cost overruns or fund cleanup activities that increase the project's environmental benefits,

2. does not exceed 50% of the original grant, and

3. will not increase the project's total grant funding to more than $4 million.

The act also allows the commissioner to award grants to municipalities, economic development agencies, and regional councils of governments to prepare comprehensive plans for cleaning up and redeveloping multiple brownfields. These grants may cover the costs of preparing the plans and associated expenses. The plans must be consistent with the state and local plans of conservation and development.

In addition to adding the new grant components, the act precludes municipalities and economic development agencies from lending grant proceeds to a brownfield redeveloper. Prior law allowed them to do so when the:

1. municipality or agency and developer jointly applied for the grant and identified within 90 days how the remediated brownfield would be used and

2. developer agreed to clean up the property under specified DEEP voluntary remediation or DECD liability protection programs.

2 — Brownfield Loan Program

The act also makes programmatic changes in DECD's Brownfield Loan Program, which provides loans for investigating and assessing a property's environmental condition and remediating any contamination. It increases the maximum loan amount from $2 million per year for up to two years to $4 million per year with no limit on the number of years.

The act sets a narrow condition under which borrowers who are not subject to the Transfer Act may receive loans under the program without having to remediate the brownfield under specified DEEP voluntary cleanup or DECD liability protection programs. (The Transfer Act requires parties involved in the sale or transfer of a potentially contaminated property to assess its environmental condition and remediate it if necessary (CGS 22a-134). )

The act exempts borrowers from this program requirement if the loan proceeds will be used to abate hazardous building material. The exemption applies only if the loan recipient demonstrates, to the DECD and DEEP commissioners' satisfaction, that the material constitutes the property's only remaining environmental contamination.

5 — Liability Protection Program

The act makes it easier for bona fide prospective purchasers to participate in the DECD program that protects developers from liability to the state and third parties for cleaning up brownfields. To qualify as a bona fide purchaser, a person or entity must establish, by a preponderance of the evidence, certain facts about the acquisition of a brownfield.

Under prior law, purchasers had to show, among other things, that they were complying with national standards for inquiring about a property's previous owners and uses (specifically, the American Society for Testing and Materials' (ASTM) Standard Practice for Environmental Site Assessment Process, E1527-05, as periodically amended). The act instead specifies that purchasers must comply only with those standards that were in effect when they acquired the property.

3 & 4—PROGRAM FOR REMEDIATING AND MARKETING STATE-OWNED BROWNFIELDS

The act expands the range of brownfields DECD may remediate and market for private development by allowing it to add brownfields the state had owned and transferred to other parties to its brownfield priority list, which under prior law was limited to state-owned brownfields that met statutory criteria. Under prior law, DECD had to select five geographically diverse state-owned brownfields from that list for marketing and remediation.

The act gives DECD until January 1, 2016 to add formerly state-owned property to the priority list and further expands the range of eligible state-owned and formerly state-owned brownfields by eliminating the selection criterion that a brownfield must have a predetermined end use. DECD must still use the remaining criteria to select both types of brownfields. At a minimum, DECD must select brownfields that:

1. are economically viable,

2. can be developed in a way that is consistent with the State Plan of Conservation and Development,

3. are located in municipalities where the unemployment rate exceeds the state's average rate,

4. have access to transportation and other infrastructure,

5. require immediate environmental remediation, and

6. can be transferred to a private party without conflicting with any state law or process.

The act also allows DECD to remediate any number of state-owned and formerly state-owned brownfields on the priority list without first identifying a commercial purchaser. Prior law allowed DECD to remediate only one brownfield without first identifying a commercial purchaser.

OLR Tracking: JR; KD; VR; BS