TESTIMONY OF JAMES M. SElF,
SECRETARY PENNSYLVANIA DEPARTMENT OF ENVIRONMENTAL PROTECTION
BEFORE ThE SUBCOMMITTEE ON SUPERFUND, WASTE CONTROL, AND RISK ASSESSMENT
MARCH 4, 1997

Mr. Chairman, my name is Jim Seif As Secretary of the Pennsylvania Department of Environmental Protection, I am proud to present Pennsylvania's Land Recycling Program as you begin to consider changes to the federal Superfund program.

Land recycling is the most significant environmental innovation developed in the last decade - an innovation pioneered by states in response to unrealistic federal policies that actually encourage the abandonment of contaminated properties.

Returning properties to productive reuse free from environmental liabilities has not only obvious environmental benefits but economic benefits as well. And by encouraging businesses to locate on old industrial sites in towns and cities, land recycling may also turn out to be a major factor in reducing sprawl development and preserving open space and farmland.

To see just how successful our program is, you only need to look at the numbers. In the short time since Governor Ridge signed our Land Recycling Act into law in May 1995, over 195 sites have begun the formal process toward redevelopment and a total of 64 have been completely remediated.

Compare that to the Federal scorecard for cleaning up contaminated sites in Pennsylvania under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA" or "Superfund"). In 16 years, only 8 of Pennsylvania's 103 Superfund sites have been cleaned up and removed from the National Priority List.

Pennsylvania's Land Recycling Program is a major environmental success story for the Ridge Administration and has been selected as a national model by the American Legislative Exchange Council. Superfund, while good intentioned, is universally recognized ads the least successful federal environmental statute in history.

Today I want to outline the key elements of our Land Recycling Program and tell you why it's working so effectively. I will also discuss the efforts Pennsylvania and its sister states are taking to promote redevelopment of old industrial sites in the Great Lakes region through Governor Ridge's chairmanship of the Council of Great Lakes Governors. In addition, I want to give you my perspective on the federal/state relationship at land recycling sites and to tell you what states need from the federal government to maximize the effectiveness of our land recycling programs.

Pennsylvania's Land Recycling Program

Pennsylvania, like many other states, has learned from its mistakes. Past environmental cleanup laws and policies often encouraged property owners to "take a walk" and simply abandon a site, rather than deal with the contamination.

The federal government and the states erected four barriers which effectively prevented the cleanup and reuse of old industrial sites.

For three years, the Pennsylvania General Assembly worked hard, in a bipartisan way, to address these problems. It held numerous hearings, and heard from dozens of witnesses all pleading for changes that would put some common sense back into the process of redeveloping old industrial sites. Finally, on May 19, 1995, Governor Tom Ridge signed into law a three-bill package, which created Pennsylvania's Land Recycling Program. He did so at the then abandoned, but now being redeveloped, USX National Tube Works in McKeesport, Pennsylvania.

The Land Recycling Act applies to all contaminated sites in Pennsylvania, existing and future, and covers both voluntary cleanups and enforcement actions. The Act sets cleanup standards based on health and environmental risks. Land use is also incorporated into the cleanup standards, allowing different cleanup levels for residential and non-residential sites.

The statute provides maximum flexibility to persons performing cleanups by allowing them to choose from three cleanup standards -- background, a statewide health-based standard, and a site- specific standard.

Persons choosing to meet background or the statewide health-based standard need no prior approval from the Department of Environmental Protection ("DEP" or "Department") to get to work. They simply file a notice of intent with DEP to remediate, perform the cleanup, and then file a final report with the Department showing that they in fact met the standard. There is also notice to the community and to the general public, but no required hearings or meetings.

Both the background and statewide health standard represent pre-approved standards adopted by the General Assembly itself or by regulation after full scientific and public review.

Persons choosing to meet the site-specific standard, on the other hand, must submit at least three reports -- remedial investigation, risk assessment, and cleanup plan -- to the Department for review and approval. In addition, a public participation plan is required when the host municipality requests it. This may include public hearings, meetings, or door-to-door canvassing of local neighborhoods as a means of obtaining community input on the cleanup and reuse plans for the contaminated property.

The Land Recycling Act creates special incentives for redeveloping abandoned sites for which no financially viable party is available to perform the cleanup and sites in state designated enterprise zones. For these "Special Industrial Sites" a developer is only required to perform a baseline environmental assessment and clean up any direct and immediate threats to persons who will be on the property using it for its intended purpose.

DEP signs an agreement with the developer outlining specifically what contamination he is and is not responsible for, giving him the assurance he needs to proceed. So far we have signed 8 agreements, and we have another 25 Special Industrial Area sites moving through the system.

To address the perpetual liability problem, the Act gives a full statutory release of liability to any person who meets one of the three cleanup standards. The release covers the current owner or occupier of the property, the developer, successors, assigns and anyone who participates in the cleanup. The release also includes contribution protection and protection from citizen suits under Pennsylvania (not federal) law.

To make the Department more responsive to persons submitting plans for the reuse of contaminated property, the Land Recycling Act sets up a clear process to regularize approval of cleanup plans and imposes fixed deadlines. For example, the Department has 60 days to review a site remediation plan. If the Department fails to review the plan within that deadline, it is deemed approved, and the person gets the release of liability. That has not happened yet, and I don't expect it to. The point is that the DEP now has real live deadlines that cannot be avoided.

Pennsylvania's Economic Development Agency Fiduciary and Lender Environmental Liability Protection Act is the second of the three bill package. It frees lenders, development authorities, municipalities and fiduciaries from cleanup liabilities unless, of course, they are the direct cause of contamination at the site. This protection covers all routine commercial lending practices, including taking ownership or control of a property after foreclosure. Even if there was a release of hazardous substances on the property prior to and continuing after foreclosure, the lender will not be sucked into the liability loop.

The message is simple -- we have no interest in suing lenders. Our real objective is to put money in the hands of people who can put industrial sites back into productive use.

Finally, Pennsylvania's Industrial Sites Environmental Assessment Act, the third law in the package, provides $2 million in grant money to cities and municipalities to finance environmental assessments at industrial sites. In addition, the Land Recycling Act offers $15 million in grants and loans for assessment and cleanup.

Pennsylvania's Community and Economic Development Department already has over 90 projects lined up for state ~funding it has approved funding for 40 projects at a total cost to the Commonwealth of $4.3 million in grants and loans. The largest grant, close to one million dollars, was given to a reuse project in the City of Pittsburgh in which the old abandoned Hays Army Ammunition site was turned into a hot dip galvanizing facility that now employs over 80 people.

Implementation of our Land Recycling Program

There were 60 days between the time the Land Recycling Act was signed and when it became effective. In that period, an internal workgroup comprised of people from DEP headquarters and our six regional offices put together a 200 page technical guidance manual, 10 fact sheets, and a citizen handbook that were made available to the public.

That effort showed that there are very creative, energetic scientists and engineers working in the Department, who simply needed to be freed from the old perpetual liability mindset. Our bureaucracy was indeed responsive. We have engaged in extensive outreach efforts, including seminars and conferences throughout the Commonwealth, to educate the public, local government, developers, property owners, attorneys, bankers, and the environmental consulting community, and provide a step-by-step understanding of how to move a property through the Land Recycling Program. We have also utilized our award winning weekly newsletter "The Update" and our worldwide web site (http://www.dep.state.pa.us) to provide information on the program to tens of thousands of people.

After 20 months experience with the program, I can say emphatically that it is working.

It is working at the 2.45-acre former Thonet site in the City of York, Pennsylvania. That property contained a furniture manufacturing facility that suffered a catastrophic fire in 1993. It sat vacant and unused due to environmental contamination, including soil and groundwater containing lead and benzene. Gur Land Recycling Act brought new life to the site. In February 1996, a private developer and DEP signed a Special Industrial Area Site Agreement. The cleanup included the removal of paint, drums, and debris from the fire, asbestos remediation, and capping the contaminated soils, and was completed the following month. The new operator of the site, The Wolf Organization of York, built a 37,000-square-foot state-of-the-art facility on the site to manufacture countertops. Tom Wolf, the president of the company, said that without Pennsylvania's Land Recycling Act the project would not have happened. He told Governor Ridge that the plant "would not have been built without it." "Without the Act, the plant would have been built on five acres of land at some greenfields site outside of the city. We would have plowed under five acres of agricultural land."

It's also working at the former Johnson Bronze site in New Castle, Lawrence County, Pennsylvania. That site was home to a ball bearing manufacturing facility until 1978, when it was abandoned, leaving a site contaminated with lead and PCBs. No financially viable past owner would take responsibility for remediating the eight-acre downtown site, so the City of New Castle took possession. Both the city and county were anxious to redevelop the property, but prospective buyers were unwilling to commit because of the liability and health issues posed by site contamination. With the help of Pennsylvania's Land Recycling Act, the site was remediated as a Special Industrial Area site. The cleanup took nine weeks and was completed in February 1996. The city and the Lawrence County Economic Development Corporation recently found two companies to purchase tracts on the property. One is a ceramics company that will be expanding its operations and adding new jobs, and the other packages frozen food and will employ between 35 and 80 people.

Our Land Recycling Program is working because we have a statute that brings common sense and private sector resources to the process of redeveloping old industrial sites. Moreover, the Department is willing to meet with anyone, anytime, to discuss redevelopment of any site, free from the "Gotcha!" mentality of the past. We have built into the system enough flexibility to allow for creativity, innovation and common sense in addressing the unique problems that arise at old industrial sites.

But the main reason why our Land Recycling Program is working is because there are people out there -- in local government, the private sector, the redevelopment authorities and others -- with the vision for taking the promise of our new legislation and turning it into reality. Without their hard work to identi~fy sites, bring together buyers and sellers, and raise the necessary capital, we wouldn't have close to 200 sites in the system, and we wouldn't be so optimistic about the future.

Success Is Spreading

I urge the Subcommittee's members and its staff to critically examine all of the state land recycling laws and voluntary cleanup programs that now exist all across the country. At latest count over 30 states had developed such programs. What you will quickly see is that while state land recycling programs vary, there are many similarities.

The common elements are l) cleanup standards based on risk and land use; 2) liability protection, in the form of a statutory release, a covenant not to sue or no further action letter given to persons meeting the cleanup standards; and 3) a reliance on private funds to pay for the vast majority of land recycling cleanups, with limited state funds available in the form of grants, low interest loans, and tax credits for site assessments and cleanups.

These land recycling laws and state voluntary cleanup programs are all designed to promote site cleanups by providing clear standards and offering liability protection. They are not meant to provide ways for parties to avoid undertaking cleanups. In fact, once a cleanup is completed, all the state and federal laws and regulations governing site operations and pollution control continue to apply.

Last year, Governor Ridge began a two year term as Chair of the Council of Great Lakes Governors and made land recycling his top priority. His choice reflects a recognition on the part of all eight of the governors on the Council that the ongoing transformation of our region from a mass production economy to a high performance economy depends, in large part, on the success of our state voluntary cleanup programs. (The Great Lakes States include Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, and Wisconsin). In discussions with the Great Lakes Canadian provinces of Quebec and Ontario the Governor personally, and the Council, have discovered that similar problems exist there, that similar solutions apply, and that the world's most productive industrial powerhouse can and will renew itself on all shores of the Great Lakes.

Each of the Great Lakes States has worked very hard to develop state land recycling laws and voluntary cleanup programs that are environmentally sound, and respond to the needs and interests of local government, the business community and the public.

In just a short time, our individual state programs have produced real results - hundreds of old industrial sites cleaned up, countless acres of open space protected from sprawl, and the creation of family sustaining jobs -- all while protecting the health and safety of our citizens and the environment.

As a way of building on these successes, the Council adopted a Land Recycling Action Agenda at its annual meeting in Detroit last July. I have included a copy of that Agenda with my testimony. The Council plans to form regional SWAT teams of land recycling experts and to establish a clearinghouse of information on remediation and cleanup technologies that will allow our states to share individual approaches and solutions to our common problems.

States Play a Lead Role

The land recycling activity occurring throughout Pennsylvania provides a useful illustration of the role that the State and Federal government currently play in the process of redeveloping old industrial sites.

Old industrial sites that present good redevelopment opportunities are first identified by local government, local redevelopment authorities, or the private sector. If there are environmental concerns, any notices, site characterization reports or other studies are typically analyzed and reviewed by the appropriate regional office of the Pennsylvania Department of Environmental Protection.

My staff meets with local officials, developers and others to provide technical support and guidance during redevelopment activities. In addition, local government and the redevelopment community look primarily to the State for funding. While the federal government has offered some limited funding for land recycling projects in Pennsylvania, the state currently has made more dollars available and has funded 10 times the number of projects supported by the federal government in our state. That is both a reflection of limited federal resources, and the fact that these really are local, community projects that draw more attention from state and local representatives.

When all the cleanup work is done at a site, DEP provides the critical review of all the technical data and provides the final sign-off and state liability protection. As you can see, Pennsylvania has all the personnel, resources and other tools necessary to handle all of the land recycling cleanups from start to finish, and given that the actual cleanup work is done privately, we have had no need for additional staff resources to administer this program.

There really is no reason to seek the federal government's involvement at a land recycling project in Pennsylvania. We do advise people who want to redevelop a site that is on the Superfund National Priorities List (NPL) or subject to a RCRA corrective action order to contact EPA's Regional Office in Philadelphia. We recognize the federal government's interest in maintaining oversight and control over those site cleanups.

If someone was interested in puffing one of those sites through our Land Recycling Program, we would contact EPA to see if it would be willing to allow the site to be handled through our state system, and indeed that would be our preference.

Of the approximately 200 sites that have entered our Land Recycling Program to date, none is an NPL site, and it is a rare occasion when EPA expresses any interest in one of the non-NPL sites in our state system. The land recycling sites being redeveloped in Pennsylvania are sites where EPA readily acknowledges they have neither the time, resources nor interest to deal with.

Recommendations for Federal Legislation

For land recycling to really succeed, the federal government must undertake common sense reforms similar to the states. There have been numerous "brownfields" bills introduced in Congress over the past few years. Unfortunately, most of them have not addressed the three key things that the states need from Congress to complement our land recycling and voluntary cleanup programs and allow them to reach their maximum potential for environmental cleanup and economic revitalization. These key items are: (1) a release of federal liability at state land recycling sites, (2) a waiver of federal permitting requirements at state land recycling sites, and (3) the authority for Governors to veto proposed NPL listings. S. 8 does address the three items.

Our number one priority is to amend the Superfund law to provide a release of federal cleanup liability to any person who completes a cleanup at a land recycling site in accordance with applicable state law.

These land recycling sites simply do not belong under the shadow of Superfund liability. I hope we can all agree that Superfund was not written to address these sites; it was written to address a limited number of highly contaminated sites that presented emergency situations, imminent hazards and significant threats to human health and the environment, and where no private resources were available. This is generally not the case with land recycling sites. If they presented emergency situations, the state or EPA would have responded accordingly. It's unfortunate that Superfund, the federal statute with the heaviest enforcement hand - strict, joint, retroactive liability - is applied to the environmental problem where the concerns are mostly local in nature. While someone could, no doubt, point to a case where a land recycling site impacts more than one state, the local issues these sites present are very different from the issues of air and water pollution that have obvious multi-state and national implications.

We need a federal release of liability at state sites to combat the lingering perception by developers that federal liability is a real concern at the typical state land recycling site - one that is not on the Superfund list and has no outstanding RCRA corrective action order.

As a former EPA Regional Administrator, I have tried to reassure the people who want to redevelop old industrial sites that EPA is unlikely to take any judicial or administrative action at sites that are being handled in the state system.

While this is comfort to some, there can be no assurance that EPA will not second guess the state's decision. There are also no assurances that they won't be subject to a third-party suit under CERCLA. Only Congress can provide local government, lenders, and redevelopers of contaminated property the federal statutory protection that they seek. In asking for this, we aren't alone. The Great Lakes Council of Governors, the Council of State Governments, the National Governors Association, the Association of State and Territorial Solid Waste Management Officials and others are all asking Congress to give releases of federal liability to persons that clean up sites in accordance with applicable state law.

Second, there needs to be a waiver of federal permitting requirements at land recycling sites being addressed under a state voluntary cleanup program. Our General Assembly gave DEP the authority to waive state permits at sites being handled by our Land Recycling Program, but only Congress can waive the requirement to obtain federal permits. These are the same permitting requirements that EPA has authority to waive at the much more seriously contaminated sites it has captured under the Superfund program.

In asking for this waiver, be assured that discharges to the air and water are fully regulated by our state regulatory program, and persons cleaning up sites in our state system have to meet all of our applicable emission and discharge limitations, both during cleanup and thereafter.

Finally, Congress should reinstate the opportunity of Governors to veto proposed Superfund listings. The impacts associated with Superfund sites are borne primarily at the state and local level. If a governor believes that a site is more appropriately handled in the state system, he or she should be able to protect the community from the federal Superfund program.

Last year, when we had such opportunity, Governor Ridge concurred on adding two sites to the NPL, but did not concur on two other sites. His reasoning was simple: the two sites that he allowed to be added to the NPL were former waste disposal sites with no potential for redevelopment, while the other two sites each presented reasonably good opportunities for redevelopment under our Land Recycling Program.

Had these sites been added to the NPL, based on Superfund's dismal track record in Pennsylvania, it would be virtually impossible to convince anybody to redevelop the property. Most people now see Superfund as a slow moving, lawyer feeding, black hole that sucks the redevelopment potential out of any site and scares away local government and the development community.

We are confident that private parties can clean up these sites through our Land Recycling Program much more quickly than they would get cleaned up under Superfund and provide the same level of protection to the local community.

At the two sites where we did not concur with the proposed NPL listing, we recognize the interest of EPA to be kept informed of the status of the state's cleanup efforts. We have also advised the private parties doing the cleanup that if they fail to move forward on a timely basis to remediate the site in accordance with our state cleanup standards that we will recommend to EPA that those sites be re-listed.

Final Point

In Pennsylvania, Governor Ridge, the members of our General Assembly, and others that worked so hard to develop our Land Recycling Program are at a loss to understand why anyone in Washington would argue that a person who meets the requirements of Pennsylvania's Land Recycling Act and receives a release of state liability after cleaning up a site should not also be entitled to a release of federal liability.

Pennsylvania is more than willing to work in partnership with the federal government regarding the cleanup of Superfund sites, RCRA corrective action sites, and even sites proposed for listing on the NPL. But we hope that Congress recognizes that it is the states that carry the responsibility for identifying the needs and interests of their citizens as they relate to the cleanup and reuse of old industrial sites and addressing those local concerns through the adoption of state laws and programs.

As evidenced by a November 1996 EPA memorandum regarding state voluntary cleanup programs, it appears that the Administration still believes there is a need for the federal government to develop criteria for the review and "approval" of state land recycling programs. Unfortunately, it seems EPA may be building a Washington-driven program that looks a lot like Son of Superfund, with all its downsides.

I have not been able to identify any federal statute that directs EPA to develop criteria for approving state land recycling programs.

What I can tell you is that Pennsylvania, and many of its sister states, spent years developing our individual state land recycling laws, and did so without the benefit of or need for federal intervention or support. I have heard the argument that supporters of federal baseline criteria put forward - that without federal oversight and approval and minimum requirements the states will engage in a "race to the bottom" to develop the weakest cleanup laws to attract new business.

As I said earlier, before you put EPA in the position of reviewing and approving state land recycling laws, I urge you to take a very careful look at the land recycling laws already being applied by the states. You will see that there has been no "race to the bottom." It is pure fiction.

Indeed, the states that have adopted land recycling laws and developed voluntary cleanup programs have gone to great lengths to ensure that the environment is not sacrificed at the expense ofjob creation. These state land recycling laws were enacted by state senators and representatives that are directly accountable to their constituents, the people that live, work and play in the communities that host the land recycling sites. To say that these state elected officials can't be trusted to protect the needs and interests of their constituents is offensive, and it smacks of the kind of paternalism that has no place in our federal system of government.

It is clear that some matters are best left to the states to handle and the reuse of old industrial sites is a perfect example.

EPA is clearly playing catch-up in land recycling. While we are grateful for the financial support for specific projects, it would be much more helpful for the Administration to devote its energies to promoting real reforms instead of seeking to building a bureaucracy to approve state programs.

We look forward to working with the Subcommittee on legislation that will help complement our land recycling program and allow it to reach its fu~ll potential.


ATTACHMENT

Land Recycling In Great Lakes States A New Opportunity to Extend the High Performance Revolution

Introduction

Over the last 25 years, global shifts in the location of traditional manufacturing industries have not only resulted in economic and social changes in the Great Lakes states, but in thousands of vacant or under-used industrial sites. The persistent "Rustbelt" image of this region was created by these changes. At the same time, increasingly stringent environmental laws adopted by federal and state governments established cradle-to-grave liability for hazardous wastes. The unintended consequence of these laws was to discourage the redevelopment of vacant industrial sites by fixing cleanup liability on any person who had an interest in a site, whether or not they were responsible for its contamination. Unrealistic cleanup standards required the cleanup of these sites to near pristine conditions in all cases even if they were to be reused for manufacturing, thus creating another disincentive to reuse. In the last 10 years, the Great Lakes region has seen an economic transformation from a lagging, de-industrializing area to a high-tech, higher wage manufacturing and industrial economy. This change has taken place in many areas without taking advantage of a key resource - vacant or under-used industrial sites that many times already have built-in transportation access, utilities, a nearby work force and other advantages over new, greenfield sites. Promoting the reuse of industrial sites in the Great Lakes states through an aggressive Land Recycling Program achieves several important objectives for the region

-- Promote the development of already urbanized areas so they are more economically and environmentally sustainable.

-- Help to retain and expand existing manufacturing in the region.

-- Save farmland and open space from development to improve the quality of life.

-- Improve the environment by eliminating hazardous conditions in communities.

-- Change the image of the Great Lakes region from "Rustbelt" to "High Performance."

Keys to Land Recycling

There are many factors that go into a business location decision - transportation facilities, tax policy, work force skills and even global economic conditions. Environmental concerns are only one part of that decision, but they are often viewed as a significant barrier to be overcome. In order to overcome these barriers and have used industrial properties actively considered as an option for business expansion, a successful Land Recycling Program includes several key elements--

-- Encourage the reuse of all commercial and industrial sites, not just a narrow category of sites.

-- Cleanup standards used in the program must be clear and based on risk and sound science, preferably offering a choice of solutions, so that a property owner or developer can reliably estimate the cost to clean up a site.

-- Provide a straight-forward, timely process for reviewing cleanup plans and giving agency approvals.

-- Provide finality with regard to cleanup liability so that meeting a cleanup standard ends the liability for futher~ cleanup, except under clearly specified conditions.

-- Provide cleanup liability protection for financial institutions, economic development agencies, fiduciaries, non-profit organizations and local governments that did not contribute to contamination on a site so they can act as a catalyst for redeveloping sites.

-- Resolve potential cleanup liabilities under federal environmental laws.

-- Provide financial and other incentives to conduct environmental assessments and cleanups and locate in special areas like enterprise zones.

Great Lakes States Move Ahead

In keeping with a long history of performance and leadership at the national level, the Great Lakes region of eight states is once again at the forefront of a major policy initiative - industrial sites reuse.

The Great Lakes states are the nations leaders in Land Recycling programs. Aggressive Land Recycling Programs are helping to transform the persistent Rustbelt image of old into one which exudes the vibrant economy of today. High-tech, higher wage manufacturing and industrial jobs are on the rise in the region. Innovative state Land Recycling Programs complement this economic revitalization and continue to offer a dynamic new approach to distressed urban areas.

All eight states in the Great Lakes region have Land Recycling Programs. Individual legislation differs throughout, but each state is moving to implement practical, smart industrial sites reuse programs.

Three states - Illinois, Minnesota and Wisconsin - have entered into a Superfund Memorandum of Agreement with the U.S. Environmental Protection Agency. These agreements allow states to maintain the role of overseeing the cleanup of sites and officially clearing the owner of future liability.

Illinois has built upon its voluntary cleanup program of 1991 which offers a No Further Action letter upon completion of a site cleanup project Recently, Illinois EPA has prepared draft rules incorporating a tiering system based on risk, land use and progressed levels of site information, establishing uniform cleanup objectives and methodology for all site cleanup programs.

The Minnesota Superfund Memorandum of Agreement expanded on the states Voluntary Investigation Program, better defining roles and responsibilities for the cleanup of sites. This agreement encourages partnerships between U.S. EPA, Region V; the Minnesota Pollution Control Agency; other state and local governmental agencies and external stakeholders.

In addition to Wisconsin's Superfund Memorandum of Agreement, the state has recently created the Bureau of Remediation and Redevelopment within its Department of Natural Resources. Wisconsin has streamlined the cleanup process by creating various grades of uniform soil standards, relieving lenders, cities or counties and innocent purchasers of liability for contaminated property and has implemented a Brownfields pilot program with the U.S. EPA.

Indiana established a Voluntary Remediation Program in 1993. This program provides a mechanism for site owners or operators to voluntarily enter an agreement with Indiana's Department of Environmental Management to cleanup contaminated property. A Covenant Not to Sue is issued upon successful completion.

Michigan amended its Natural Resources Environmental Protection Act to create an owner-pays liability scheme only when that owner contaminated the site; offer a series of grant and loan programs for prospective site cleanups; create a task force to speed up cleanups in Detroit and a Brownfields Coordination Team to customize similar action on other cities; and create a Brownfields manual for guidance. Michigan offers two grant programs - Site Reclamation Grants and Site Assessment Grants to encourage redevelopment

Ohio created a Voluntary Action Program which relies upon private parties to investigate and cleanup contaminated sites; allows the cleanup to be tailored to the future use of the land; limits the property owners legal responsibility for future cleanup; encourages public input; and audits at least 25 percent of properties cleaned up. The Ohio EPA certifies professionals to oversee cleanups. Ohio offers low interest loans, tax abatements and a grant program.

New York has a voluntary cleanup program that requires volunteers to investigate a site, remediate contamination to agreed-upon levels, and eliminate sources of onsite contamination that cause offsite impacts. When the cleanup levels are met, the New York Department of Environmental Conservation issues a "no further action" letter.

Pennsylvania Example

In May 1995 Pennsylvania adopted three new laws creating a state Land Recycling Program. In the past year 100 sites have participated in the program and cleanups have been completed at 35 of those sites.

This record compares favorably with Pennsylvania's Hazardous Sites Cleanup Program, which has cleaned up only two sites permanently in eight years, and the federal Supe~~rfund Program, which has resulted in removing eight sites from the National Priority List in 26 years in Pennsylvania.

The cleanups completed so far under the Land Recycling Program include large and small projects that resolve long.standing contamination problems, put abandoned industrial sites back into productive use, allow existing businesses to clean up their own sites and continue operations, and give hope to "land-locked" cities that now, for the first time in years, have potential industrial sites to show businesses seeking to expand. They include -

-- the Frameisi USA Inc. site near Pittsburgh that was able to expand its operations after cleaning up a portion of its property

-- a former kitchen appliance manufacturing site closed since 1990 near Reading that was put back into productive use as a site for a warehousing operation

-- a long-vacant manufacturing site in Harrisburg that will soon be home to a new 200-employee business

-- the former Johnson Bronze manufacturing site in New Castle, abandoned in 1978, that will be cleaned up and available for new businesses

-- a multi-site cleanup agreement with a state electric utility that requires the evaluation and cleanup of 134 different sites around the state

-- a site that was part of the state Hazardous Sites Cleanup Program that was taken over, given its final cleanup and will be reused by a private company.

A quick summary of each of the new laws forming Pennsylvania's Land Recycling Program follows -

Act 2 - The Land Recycling and Environmental Remediation Standards Act

Act 2 establishes environmental remediation standards to provide a uniform framework for cleanups. Land recyclers have a choice of three types of cleanup standards: background standards, statewide health standards or site-specific standards. Special industrial area standards are available for certain sites and certain persons. This framework provides new direction for a more reasoned, scientifically based blueprint for site remediation. The act describes the submission and review procedures to be used at sites using each of the three types of cleanup standards, thus providing a uniform process for all sites statewide. Act 2 provides releases from liability for owners or developers of a site that has been remediated according to the standards and procedures in the act.

Act 3 - The Economic Development Agency, Fiduciary and Lender Environmental Liability Protection Act

Act 3 extends liability protection to financiers, such as economic development agencies, lenders and fiduciaries. Under Act 3, these parties cannot be held responsible for contamination at any site unless their actions directly caused the contamination. Engaging in routine commercial lending practices, including foreclosing on contaminated property, will not trigger liability. These provisions are intended to reduce the liability concerns that may inhibit involvement with contaminated or abandoned sites.

Act 4 - The Industrial Sites Environmental Assessment Act

Act 4 authorizes the Department of Community and Economic Development to make grants to municipalities, municipal or local authorities, nonprofit economic development agencies, and similar agencies. The grants help finance environmental assessments of industrial sites located in municipalities that the Department of Community and Economic Development has designated as distressed communities. Certain cities are eligible for grants to conduct environmental assessments and remediation activities.

A detailed report on the first year of Pennsylvania's Land Recycling Program is available.

Recommendations

While Great Lakes states have become national leaders in adopting land recycling programs, these efforts are not yielding the full economic and environmental benefits they could for the region. Great Lakes states should learn from each other about how to promote land recycling. There are also issues involving the federal government where increased levels of cooperation are needed to deal with cleanup liabilities under federal law. The Great Lakes states will act together to promote Land Recycling Programs throughout the region by taking these steps -

1. Form a regional "SWAT Team" of land recycling experts who can be called upon to offer technical assistance on individual industrial site reuse projects.

These experts could meet periodically to discuss what is working and what is not working in the individual state programs. In addition, when issues arise concerning the application of specific cleanup technologies or statistical methods of analysis, these experts could be consulted to share individual state approaches and solutions.

2. Establish a regional clearinghouse of information on remediation and other land recycling techniques, including an Internet website to provide quick access to information.

Remediation techniques and technologies are advancing quickly as more and more companies are seriously looking at reusing industrial sites. Keeping up-to-date on these technologies is a difficult task. Identifying existing sources of reliable information and tapping into the expertise available in state environmental agencies would be a tremendous regional asset Making that information available through the Internet, 24-hours a day, 7-days a week would allow the Great Lakes states to move quickly on cleanup issues.

3. Develop a template of "best practices " that highlight the most effective techniques states can use to encourage land recycling.

No one state has the ideal set of programs to encourage the cleanup and reuse of industrial sites. States also have their own experiences to share about the effectiveness of programs they have adopted. Capturing the "best of the best" for each element of a land recycling program - approach to cleanup standards, reviewing cleanup plans, releases from liability, financial incentives - would enable the Great Lakes states to put together a set of "best practices" that each state could use to make improvements in their own programs.

4. Explore opportunities for the Great Lakes region to develop a private sector mechanism to help encourage investment in the reuse of industrial sites.

There seems to be clear evidence that regulatory action and grant programs alone may not always provide sufficient incentive to attract investment to industrial sites. On a region-wide basis there may be opportunities to stimulate investment by lowering risks and costs to banks and lending institutions. A bank pool which operated as a form of guarantee or secondary market, for example, may lower the cost of capital and increase the number of projects attracting investment. A regional approach to such a mechanism offers the potential for both a broader range of participating institutions and a more diverse portfolio of sites.

5. Initiate discussions between Great Lakes states and the US. Environmental Protection Agency on a uniform memorandum of understanding that clarifies federal cleanup liabilities related to state Land Recycling Programs.

In the absence of legislation that releases parties who complete brownfield cleanups from federal liability, it may be appropriate for the Council to pursue a basin-wide Memorandum of Understanding (MOU) with EPA that-will clari~fy the federal governments role at state brownfield sites.

A basin-wide MOU would be negotiated between the Council and EPA Regions 2, 3 and 5. If the federal government is serious about increasing brownfield redevelopment, it should have a great deal of interest in neg6tiating such a high profile agreement with the major industrial states that comprise the Council. The benefit of taking a basin-wide approach is twofold: it increases the bargaining power of each individual state, and it ensures consistency among the three EPA regions.

6. Support changes to the appropriate federal envfronmental laws to recognize state Land Recycling Programs.

The Council of Great Lakes Governors provides the perfect forum for advocating federal legislation that will allow our individual state brownfield laws to reach their full potential. In this regard, there are three elements that should be included in a federal legislative package: 1) a release of federal liability to any person who completes a cleanup at a brownfield site in accordance with state law; 2) a waiver of federal permitting requirements at brownfield sites being addressed under state law; and (3) liability protection for lenders, economic development agencies and fiduciaries.

The Council can present a common front on these federal legislative issues through the issuance of white papers-and direct lobbying of state delegation members, especially those in leadership positions.