PA DEP Secretary testifies before U.S. House panel examining brownfield program

Kathleen A. McGinty today told a U.S. House panel that enhanced federal support for brownfield redevelopment plays a critical role in making sure Pennsylvania's Land Recycling Program can meet and exceed the economic and environmental gains it has achieved over the last decade in stimulating the productive reuse of abandoned industrial sites...

WASHINGTON, DC, Sept. 13, 2005 (PRNewswire) -- Pennsylvania Environmental Protection Secretary Kathleen A. McGinty today told a U.S. House panel that enhanced federal support for brownfield redevelopment plays a critical role in making sure Pennsylvania's Land Recycling Program can meet and exceed the economic and environmental gains it has achieved over the last decade in stimulating the productive reuse of abandoned industrial sites.

"Pennsylvania has a significant track record of making environmental protection work for businesses and employees," McGinty told the U.S. House Committee on Government Reform, Subcommittee on Federalism and the Census. "One of the reasons our brownfields program has been so successful is that it has evolved to meet the changing demands of the market. That market continues to change, so our programs must continue to evolve to keep pace and ensure brownfield redevelopment remains competitive."

As an example, McGinty said that Governor Edward G. Rendell has worked aggressively to provide new incentives and financing and put in place enhanced management approaches that hasten brownfield redevelopment.

The Governor's Business in Our Sites Fund provides $300 million to help local redevelopment authorities and economic development corporations acquire, remediate and prepare shovel-ready sites for businesses that are seeking to build or expand immediately. PennWorks, a $250 million voter-approved bond initiative, finances improvements to aging water and wastewater systems that can serve as a disincentive to development.

The Governor's Brownfield Action Team, launched in 2004, created a single- point-of-contact to streamline permitting processes -- cutting the time in half -- for those sites that local officials target for redevelopment. BAT relies on communities to tell DEP which brownfield projects are priorities for revitalizing an area, and requires communities to show cleanup and financing plans as well as the proposed use of the site and its benefits to the area.

The Rendell administration also added another enhancement through a historic Memorandum of Agreement (MOA) between DEP and the U.S. Environmental Protection Agency (EPA) to make Pennsylvania's Land Recycling Program the first and only in the nation to serve as a "one-stop shop" for state and federal standards guiding the cleanup of brownfield sites. The MOA clarifies that sites remediated under the state's brownfields program also satisfy requirements for three key federal laws: the Resource Conservation and Recovery Act; the Comprehensive Environmental Response Compensation Liability Act, commonly referred to as Superfund; and the Toxic Substances Control Act.

Despite these successes, McGinty stressed that there are several steps that the federal government can take to help states advance brownfield redevelopment programs, including more flexibility in EPA's brownfield funding program. Pennsylvania has received approximately $1 million each year for the last three fiscal years under this program, but only 50 percent of that money is eligible for remediation, where it is needed most. The remainder must be spent on things such as marketing and administrative support.

Although Pennsylvania's Land Recycling Program provides liability protection and the MOA with EPA gives developers limited comfort with respect to associated federal liabilities, a more comprehensive federal assurance of liability relief is needed. McGinty noted that without liability protection, developers, local redevelopment authorities and businesses are hesitant to consider any form of ownership or even redevelopment partnership. Banks and other institutions are unlikely to finance these projects.

In addition to liability relief, developers also seek assurances with respect to remediation costs. Fixed prices help developers prepare budgets and attain financing because they remove the worries that financial institutions have when lending toward contaminated properties. A federal tax credit would enable developers to purchase the insurance they need to guarantee fixed pricing in remediation. Insurance guarantees that remediation costs to the developer will not climb above a set amount. The tax credit puts the insurance costs within reach and provides assurances needed to move ahead with cleanup, removing a hurdle that developers face when confronted by the decision to take on revitalizing abandoned industrial sites.

"At the end of the day, revitalizing a brownfields site is a winning proposition -- given a favorable regulatory climate and the right incentives," McGinty said. "All of these efforts are critical for redeveloping blighted areas, revitalizing downtowns and strengthening communities. I look forward to working with Congress to enhance all of our efforts to promote redevelopment projects that create jobs, revitalize communities and grow our tax bases."

For a transcript of the Secretary's testimony before the U.S. House subcommittee, go to DEP's Web site at www.dep.state.pa.us, Keyword: "Testimony."

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