File No. 441

House of Representatives, April 16, 2012

The Committee on Commerce reported through REP. BERGER of the 73rd Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING REVISIONS TO THE STATE'S BROWNFIELD REMEDIATION AND DEVELOPMENT STATUTES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subsection (a) of section 32-9kk of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(a) As used in subsections (b) to (k), inclusive, of this section:

(1) "Brownfield" means any abandoned or underutilized site where redevelopment, reuse or expansion has not occurred due to the presence or potential presence of pollution in the buildings, soil or groundwater that requires investigation or remediation before or in conjunction with the restoration, redevelopment and reuse of the property;

(2) "Commissioner" means the Commissioner of Economic and Community Development;

(3) "Department" means the Department of Economic and Community Development;

(4) "Eligible applicant" means any municipality [, a for-profit or nonprofit organization or entity, a local or regional] or economic development [entity acting on behalf of a municipality] agency or any combination thereof;

(5) "Financial assistance" means grants, extensions of credit, loans or loan guarantees, participation interests in loans made to eligible applicants by the Connecticut Development Authority or combinations thereof;

(6) "Municipality" means a town, city, consolidated town and city or consolidated town and borough;

(7) "Eligible brownfield project" means the foreclosure, investigation, assessment, remediation and development of a brownfield undertaken pursuant to this subsection and subsections (b) to (k), inclusive, of this section;

(8) "Project area" means the area within which a brownfield development project is located;

(9) "Real property" means land, buildings and other structures and improvements thereto, subterranean or subsurface rights, any and all easements, air rights and franchises of any kind or nature;

(10) "State" means the state of Connecticut; [and]

(11) "Eligible grant recipients" means municipalities [,] or economic development [authorities, regional economic development authorities, or qualified nonprofit community and economic development corporations.] agencies; and

(12) "Economic development agency" means (A) a municipal economic development agency or entity created or operating under chapter 130 or 132; (B) a nonprofit economic development corporation formed to promote the common good, general welfare and economic development of a municipality that is funded, either directly or through in-kind services, in part by a municipality; or (C) a nonstock corporation or limited liability company established or controlled by a municipality, municipal economic development agency or an entity created or operating under chapter 130 or 132.

Sec. 2. Subsection (f) of section 32-9kk of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(f) (1) The Department of Economic and Community Development shall develop a targeted brownfield development loan program to provide financial assistance in the form of low-interest loans to eligible applicants who are potential brownfield purchasers who have no direct or related liability for the site conditions and eligible applicants who are existing property owners who (A) are currently in good standing and otherwise compliant with the Department of Energy and Environmental Protection's regulatory programs, (B) demonstrate an inability to fund the investigation and cleanup themselves, and (C) cannot retain or expand jobs due to the costs associated with the investigating and remediating of the contamination.

(2) The commissioner shall provide low-interest loans to eligible applicants who are purchasers or existing property owners pursuant to this section who seek to develop property for purposes of retaining or expanding jobs in the state or for developing affordable housing [to serve the needs of first-time home buyers] units, suitable for first-time home buyers, incentive housing zones, workforce housing and other residential purposes, as approved by the commissioner. Loans shall be available to manufacturing, retail, residential or mixed-use developments, expansions or reuses. The commissioner shall provide loans based upon project merit and viability, the economic and community development opportunity, municipal support, contribution to the community's tax base, number of jobs, past experience of the applicant, compliance history and ability to pay.

(3) Any loan recipient who is a brownfields purchaser and who (A) receives a loan in excess of thirty thousand dollars, or (B) uses loan proceeds to perform a Phase II environmental investigation, shall be subject to section 22a-134a or shall enter a voluntary program for remediation of the property with the Department of Energy and Environmental Protection. Any loan recipient who is an existing property owner shall enter a voluntary program with the Department of Energy and Environmental Protection.

(4) Loans made pursuant to this subsection shall have such terms and conditions and shall be subject to such eligibility, loan approval and criteria, as determined by the commissioner. Such conditions shall include, but not be limited to, performance requirements and commitments to maintain or retain jobs or provide a specified number of affordable housing units. Loan repayment shall coincide with the restoration of the site to a productive use or the completion of the expansion. Such loans shall be for a period not to exceed twenty years.

(5) If the property is sold before loan repayment, the loan is payable upon closing, with interest, unless the commissioner agrees otherwise. The commissioner may carry the loan forward as an encumbrance to the purchaser with the same terms and conditions as the original loan.

(6) Loans made pursuant to this subsection may be used for any purpose, including the present or past costs of investigation, assessment, remediation, abatement, hazardous materials or waste disposal, long-term groundwater or natural attenuation monitoring, costs associated with an environmental land use restriction, attorneys' fees, planning, engineering and environmental consulting costs, and building and structural issues, including demolition, asbestos abatement, polychlorinated biphenyls removal, contaminated wood or paint removal, and other infrastructure remedial activities.

(7) For any loan made pursuant to this subsection that is greater than fifty thousand dollars, the applicant shall submit a redevelopment plan that describes how the property will be used or reused for commercial, industrial, residential or mixed-use development and how it will result in jobs and private investment in the community. For any residential development loan pursuant to this subsection, the developer shall agree that the development will provide the affordable housing needs reasonable and appropriate for first-time home buyers or for workforce housing or recent college graduates looking to remain in this state.

(8) The loan program established pursuant to this subsection shall be available to all qualified new and existing property owners. Recipients who use loans for commercial, industrial or mixed-use development shall agree to retain or add jobs, during the term of the loan, unless otherwise agreed to by the Department of Economic and Community Development, the Connecticut Development Authority and the Connecticut Brownfield Redevelopment Authority. The residential developer shall agree to retire the loan upon sale of the units unless the development will be apartments.

(9) Each loan recipient pursuant to this subsection may be eligible for up to two million dollars per year for up to two years, subject to agency underwriting and reasonable and customary requirements to assure performance. If additional funds are needed, the Commissioner of Economic and Community Development may recommend that the project be funded through the State Bond Commission.

(10) The loan program established pursuant to this subsection shall be available to all municipalities and economic development agencies, and the commissioner may provide such loans to such municipalities and economic development agencies as forgivable loans.

Sec. 3. Subsection (j) of section 32-9kk of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(j) The commissioner may use any available funds for financial assistance under the provisions of subsections (a) to (k), inclusive, of this section and may use such funds for the staffing, marketing and web site development for the programs established pursuant to subsections (a) to (k), inclusive, of this section and the administration of the Office of Brownfield Remediation and Development established pursuant to section 32-9cc, provided such costs do not exceed four per cent of any such funds authorized.

Sec. 4. Subsection (l) of section 32-9kk of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(l) There is established a separate nonlapsing account within the General Fund to be known as the "brownfield remediation and development account". There shall be deposited in the account: (1) The proceeds of bonds issued by the state for deposit into said account and used in accordance with this section; (2) repayments of assistance provided pursuant to subsection (c) of section 22a-133u; (3) interest or other income earned on the investment of moneys in the account; (4) funds recovered pursuant to [subsection] subsections (i) and (k) of this section; and (5) all funds required by law to be deposited in the account. Repayment of principal and interest on loans made pursuant to subsections (a) to (k), inclusive, of this section shall be credited to such account and shall become part of the assets of the account. Any balance remaining in such account at the end of any fiscal year shall be carried forward in the account for the fiscal year next succeeding.

Sec. 5. Section 32-9mm of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(a) As used in this section:

(1) "Bona fide prospective purchaser" means a person that acquires ownership of a property after July 1, 2011, and establishes by a preponderance of the evidence that:

(A) All disposal of regulated substances at the property occurred before the person acquired the property;

(B) Such person made all appropriate inquiries, as set forth in 40 CFR Part 312, into the previous ownership and uses of the property in accordance with generally accepted good commercial and customary standards and practices, including, but not limited to, the standards and practices set forth in the ASTM Standard Practice for Environmental Site Assessments, Phase I Environmental Site Assessment Process, E1527-05, as may be amended from time to time. In the case of property in residential or other similar use at the time of purchase by a nongovernmental or noncommercial entity, a property inspection and a title search that reveal no basis for further investigation shall be considered to satisfy the requirements of this subparagraph;

(C) Such person provides all legally required notices with respect to the discovery or release of any regulated substances at the property;

(D) Such person exercises appropriate care with respect to regulated substances found at the property by taking reasonable steps to (i) stop any continuing release, (ii) prevent any threatened future release, and (iii) prevent or limit human, environmental or natural resource exposure to any previously released regulated substance;

(E) Such person provides full cooperation, assistance and access to persons authorized to conduct response actions or natural resource restoration at the property, including, but not limited to, the cooperation and access necessary for the installation, integrity, operation and maintenance of any complete or partial response actions or natural resource restoration at the property;

(F) Such person complies with any land use restrictions established or relied on in connection with the response action at the property and does not impede the effectiveness or integrity of any institutional control employed at the property in connection with a response action; and

(G) Such person complies with any request for information from the Commissioner of Energy and Environmental Protection.

(2) "Brownfield" has the same meaning as provided in section 32-9kk, as amended by this act.

(3) "Brownfield investigation plan and remediation schedule" means a plan and schedule for investigation and a schedule for remediation of an eligible property under this section. Such investigation plan and remediation schedule shall include both interim status or other appropriate interim target dates and a date for project completion not later than [five] eight years after a licensed environmental professional submits such investigation plan and remediation schedule to the Commissioner of Energy and Environmental Protection, provided the Commissioner of Energy and Environmental Protection may extend such dates for good cause. The plan shall provide a schedule for activities including, but not limited to, completion of the investigation of the property in accordance with prevailing standards and guidelines, submittal of a complete investigation report, submittal of a detailed written plan for remediation, publication of notice of remedial actions, completion of remediation in accordance with standards adopted by said commissioner pursuant to section 22a-133k and submittal to said commissioner of a remedial action report. Except as otherwise provided in this section, in any detailed written plan for remediation submitted under this section, the applicant shall only be required to investigate and remediate conditions existing within the property boundaries and shall not be required to investigate or remediate any pollution or contamination that exists outside of the property's boundaries, including any contamination that may exist or has migrated to sediments, rivers, streams or off site.

(4) "Commissioner" means the Commissioner of Economic and Community Development.

(5) "Contiguous property owner" means a person who owns real property contiguous to or otherwise similarly situated with respect to, and that is or may be contaminated by a release or threatened release of a regulated substance from, real property that is not owned by that person, provided:

(A) With respect to the property owned by such person, such person takes reasonable steps to (i) stop any continuing release of any regulated substance released on or from the property, (ii) prevent any threatened future release of any regulated substance released on or from the property, and (iii) prevent or limit human, environmental or natural resource exposure to any regulated substance released on or from the property;

(B) Such person provides full cooperation, assistance and access to persons authorized to conduct response actions or natural resource restoration at the property from which there has been a release or threatened release, including, but not limited to, the cooperation and access necessary for the installation, integrity, operation and maintenance of any complete or partial response action or natural resource restoration at the property;

(C) Such person complies with any land use restrictions established or relied on in connection with the response action at the property and does not impede the effectiveness or integrity of any institutional control employed in connection with a response action;

(D) Such person complies with any request for information from the Commissioner of Energy and Environmental Protection; and

(E) Such person provides all legally required notices with respect to the discovery or release of any hazardous substances at the property.

(6) "Distressed municipality" has the same meaning as provided in section 32-9p.

(7) "Economic development agency" means a municipality, municipal economic development agency or entity created or operating under chapter 130 or 132, nonprofit economic development corporation formed to promote the common good, general welfare and economic development of a municipality that is funded, either directly or through in-kind services, in part by a municipality, or nonstock corporation or limited liability company established or controlled by a municipality, municipal economic development agency or entity created or operating under chapter 130 or 132.

(8) "Innocent landowner" has the same meaning as provided in section 22a-452d.

(9) "Interim verification" has the same meaning as provided in section 22a-134.

(10) "Municipality" [means any town, city or borough] has the same meaning as in section 32-9kk, as amended by this act.

(11) "National priorities list" means the list of hazardous waste disposal sites compiled by the United States Environmental Protection Agency pursuant to 42 USC 9605.

(12) "PCB regulations" means the polychlorinated biphenyls manufacturing, processing, distribution in commerce and use prohibitions found at 40 CFR Part 761.

(13) "Person" means any individual, firm, partnership, association, syndicate, company, trust, corporation, limited liability company, municipality, economic development agency, agency or political or administrative subdivision of the state and any other legal entity.

(14) "Principles of smart growth" means standards and objectives that support and encourage smart growth when used to guide actions and decisions, including, but not limited to, standards and criteria for (A) integrated planning or investment that coordinates tax, transportation, housing, environmental and economic development policies at the state, regional and local level, (B) the reduction of reliance on the property tax by municipalities by creating efficiencies and coordination of services on the regional level while reducing interlocal competition for grand list growth, (C) the redevelopment of existing infrastructure and resources, including, but not limited to, brownfields and historic places, (D) transportation choices that provide alternatives to automobiles, including rail, public transit, bikeways and walking, while reducing energy consumption, (E) the development or preservation of housing affordable to households of varying income in locations proximate to transportation or employment centers or locations compatible with smart growth, (F) concentrated, mixed-use, mixed income development proximate to transit nodes and civic, employment or cultural centers, and (G) the conservation and protection of natural resources by (i) preserving open space, water resources, farmland, environmentally sensitive areas and historic properties, and (ii) furthering energy efficiency.

(15) "Regulated substance" means any element, compound or material that, when added to air, water, soil or sediment, may alter the physical, chemical, biological or other characteristic of such air, water, soil or sediment.

(16) "Release" means any discharge, spillage, uncontrolled loss, seepage, filtration, leakage, injection, escape, dumping, pumping, pouring, emitting, emptying or disposal of a substance.

(17) "Remediation standards" has the same meaning as provided in section 22a-134.

(18) "RCRA" means the Resource Conservation and Recovery Act promulgated pursuant to 42 USC.

(19) "Smart growth" means economic, social and environmental development that (A) promotes, through financial and other incentives, economic competitiveness in the state while preserving natural resources, and (B) uses a collaborative approach to planning, decision-making and evaluation between and among all levels of government and the communities and the constituents they serve.

(20) "State of Connecticut Superfund Priority List" means the list of hazardous waste disposal sites compiled by the Connecticut Department of Energy and Environmental Protection pursuant to section 22a-133f.

(21) "Transit-oriented development" has the same meaning as provided in section 13b-79o.

(22) "UST regulations" means regulations adopted pursuant to subsection (d) of section 22a-449.

(23) "Verification" has the same meaning as provided in section 22a-134.

(b) The commissioner shall, within available appropriations, establish a brownfield remediation and revitalization program to provide certain liability protections to program participants. Not more than thirty-two properties a year shall be accepted into the program. Participation in the program shall be by accepted application pursuant to this subsection or by approved nomination pursuant to subsection (d) of this section. To be considered for acceptance, [into the program established pursuant to this subsection,] an applicant shall submit to the commissioner, on a form prescribed by the commissioner, a certification that: (1) The applicant meets the definition of a bona fide prospective purchaser, innocent land owner or contiguous property owner; (2) the property meets the definition of a brownfield and has been subject to a release of a regulated substance in an amount that is in excess of the remediation standards; (3) the applicant did not establish, create or maintain a source of pollution to the waters of the state for purposes of section 22a-432 and is not responsible pursuant to any other provision of the general statutes for any pollution or source of pollution on the property; (4) the applicant is not affiliated with any person responsible for such pollution or source of pollution through any direct or indirect familial relationship or any contractual, corporate or financial relationship other than that by which such purchaser's interest in such property is to be conveyed or financed; and (5) the property is not currently the subject of an enforcement action, including any consent order issued by the Department of Energy and Environmental Protection or the United States Environmental Protection Agency under any current Department of Energy and Environmental Protection or United States Environmental Protection Agency program, listed on the national priorities list, listed on the State of Connecticut Superfund Priority List, or subject to corrective action as may be required by RCRA. The commissioner may review such certifications to ensure accuracy, in consultation with the Commissioner of Energy and Environmental Protection, and applications will not be considered if such certifications are found inaccurate.

(c) To ensure a geographic distribution and a diversity of projects and broad access to the brownfield remediation and revitalization program when more than sixteen applications have been received in any six-month period or more than thirty-two applications have been received in any one year, the commissioner, in consultation with the Commissioner of Energy and Environmental Protection, shall review all applications received and determine admission of eligible properties into the brownfield remediation and revitalization program [based on] taking into consideration state-wide portfolio factors including: (1) Job creation and retention; (2) sustainability; (3) readiness to proceed; (4) geographic distribution of projects; (5) population of the municipality where the property is located; (6) project size; (7) project complexity; (8) duration and degree to which the property has been underused; (9) projected increase to the municipal grand list; (10) consistency of the property as remediated and developed with municipal or regional planning objectives; (11) development plan's support for and furtherance of principles of smart growth or transit-oriented development; and (12) other factors as may be determined by the commissioner. Admittance into the brownfield remediation and revitalization program shall not indicate approval or award of funding requested under any federal, state or municipal grant or loan program, including, but not limited to, any state brownfield grant or loan program.

(d) The commissioner shall accept nominations of properties for participation in the program established pursuant to subsection (b) of this section [from] by a municipality or an economic development agency. For a property to be considered for approval for nomination to the program established pursuant to this section, a municipality shall submit to the commissioner, on a form prescribed by the commissioner, a certification that the property meets the eligibility requirements provided in subdivisions (2) and (5) of subsection (b) of this section and any other relevant factors, including state-wide portfolio factors provided in subsection (c) of this section, as may be determined by the commissioner. After the commissioner approves a property's nomination, the municipality shall submit to the commissioner, on a form prescribed by the commissioner, a certification that the municipality has identified a person who meets the eligibility requirements provided in subdivisions (1), (3) and (4) of subsection (b) of this section, for the commissioner to issue a final acceptance into the program, which acceptance shall be based solely on the person meeting the eligibility requirements provided in subdivisions (1), (3) and (4) of subsection (b) of this section.

(e) (1) Properties otherwise eligible for the brownfield remediation and revitalization program currently being investigated and remediated in accordance with the state voluntary remediation programs under sections 22a-133x, [and] 22a-133y and 22a-134 and the covenant not to sue programs under section 22a-133aa or 22a-133bb [may participate] shall not be excluded from eligibility in said program, provided the other requirements set forth in this section are met.

(2) Properties otherwise eligible for the brownfield remediation and revitalization program that have been subject to a release requiring action pursuant to the PCB regulations or that have been subject to a release requiring action pursuant to the UST regulations shall not be deemed ineligible, but no provision of this section shall affect any eligible party's obligation under such regulations to investigate or remediate the extent of any such release.

(f) Inclusion of a property within the brownfield remediation and revitalization program by the commissioner shall not limit any person's ability to seek funding for such property under any federal, state or municipal grant or loan program, including, but not limited to, any state brownfield grant or loan program. Admittance into the brownfield remediation and revitalization program shall not indicate approval or award of funding requested under any federal, state or municipal grant or loan program, including, but not limited to, any state brownfield grant or loan program.

(g) Any applicant seeking a designation of eligibility for a person or a property under the brownfield remediation and revitalization program shall apply to the commissioner at such times and on such forms as the commissioner may prescribe. The application shall include, but not be limited to, (1) a title search, (2) the Phase I Environmental Site Assessment conducted by or for the bona fide prospective purchaser or the contiguous property owner, which shall be prepared in accordance with [the Department of Energy and Environmental Protection's Site Characterization Guidance Document] prevailing standards and guidelines, (3) a current property inspection, (4) documentation demonstrating satisfaction of the eligibility criteria set forth in subsection (b) of this section, (5) information about the project that relates to the state-wide portfolio factors set forth in subsection (c) of this section, and (6) such other information as the commissioner may request to determine admission.

(h) Any applicant accepted into the brownfield remediation and revitalization program by the commissioner shall pay the Commissioner of Energy and Environmental Protection a fee equal to five per cent of the assessed value of the land, as stated on the last-completed grand list of the relevant town. The fee shall be paid in two installments, each equal to fifty per cent of such fee, subject to potential reductions as specified in subsection (i) of this section. The first installment shall be due [within] not later than one hundred eighty days [of being] after the later of the date the eligible applicant is notified that the application has been accepted by the commissioner or the date that the eligible applicant takes title to the eligible property. The second installment shall be due not later than four years [of being notified that the application has been accepted by the commissioner] after the acceptance date. Upon request by an eligible applicant, a municipality or an economic development agency, the commissioner may, at the commissioner's discretion, extend either or both of the installment due dates. Such fee shall be deposited into the [Special Contaminated Property Remediation and Insurance Fund established pursuant to section 22a-133t] brownfield remediation and development account and shall be available for use by the Commissioner of Economic and Community Development to fund the grant and loan programs established pursuant to section 32-9kk, as amended by this act, or for use by the Commissioner of Energy and Environmental Protection to remediate the effects of contamination that have migrated off site from the eligible property.

(i) (1) The first installment of the fee in subsection (h) of this section shall be reduced by ten per cent for any eligible party that completes and submits to the Commissioner of Energy and Environmental Protection documentation, approved in writing by a licensed environmental professional and on a form prescribed by said commissioner, that the investigation of the property has been completed in accordance with prevailing standards and guidelines within one hundred eighty days after the [date the application is accepted by the commissioner] first installment due date, including any extension thereof by the commissioner, of the fee required pursuant to subsection (h) of this section.

(2) The second installment of the fee in subsection (h) of this section shall be eliminated for any eligible party that submits the remedial action report and verification or interim verification to the Commissioner of Energy and Environmental Protection within four years after the [date the application is accepted by the commissioner] first installment due date, including any extension thereof by the commissioner, of the fee required pursuant to subsection (h) of this section. In the event an eligible party submits a request for the Commissioner of Energy and Environmental Protection's approval, where such approval is required pursuant to the remediation standard and where said commissioner issues a decision on such request beyond sixty days after submittal, such four-year period shall be extended by the number of days equal to the number of days between the sixtieth day and the date a decision is issued by said commissioner, but not including the number of days that a request by said commissioner for supplemental information remains pending with the eligible party.

(3) The second installment of the fee in subsection (h) of this section shall be reduced by, or any eligible party shall receive a refund in the amount equal to, twice the reasonable environmental service costs of such investigation, as determined by the Commissioner of Energy and Environmental Protection, for any eligible party that completes and submits to the Commissioner of Energy and Environmental Protection documentation, approved in writing by a licensed environmental professional and on a form that may be prescribed by said commissioner, that the investigation of the nature and extent of any contamination that has migrated from the property has been completed in accordance with prevailing standards and guidelines. Such refund shall not exceed the amount of the second installment of the fee in subsection (h) of this section.

(4) No municipality or economic development agency seeking designation of eligibility shall be required to pay a fee, provided, [the municipality or economic development agency shall collect and] upon transfer of the eligible property from the municipality or economic development agency to an eligible person, that eligible person shall pay to the Commissioner of Energy and Environmental Protection the fee in subsection (h) of this section [upon transfer of the property to another person for purposes of development] in accordance with the applicable requirements in this subsection.

(5) A municipality or economic development agency may submit a fee waiver request to the commissioner to waive a portion or the entire fee for an eligible property [not owned by the municipality and] located within that municipality. The commissioner, at [their] his or her discretion, shall consider the following factors in determining whether to approve a fee waiver or reduction: (A) Location of the eligible project within a distressed municipality; (B) demonstration by the municipality or economic development agency that the project is of significant economic impact; (C) demonstration by the municipality or economic development agency that the project has a significant community benefit to the municipality; (D) demonstration that the eligible party is a governmental or nonprofit entity; and (E) demonstration that the fee required will have a detrimental effect on the overall success of the project.

(j) [A person] An applicant whose application has been accepted into the brownfield remediation and revitalization program shall not be liable to the state or any third party for the release of any regulated substance at or from the eligible property, except and only to the extent that such applicant (A) caused or contributed to the release of a regulated substance that is subject to remediation or exacerbated such condition, or (B) the Commissioner of Energy and Environmental Protection determines the existence of any of the conditions set forth in subdivision (4) of subsection (n) of this section.

(k) (1) [A person] An applicant whose application to the brownfield remediation and revitalization program has been accepted by the commissioner (A) shall investigate the release or threatened release of any regulated substance within the boundaries of the property in accordance with prevailing standards and guidelines and remediate such release or threatened release within the boundaries of such property in accordance with the brownfield investigation plan and remediation schedule and this section, and (B) shall not be required to characterize, abate and remediate the release of a regulated substance beyond the boundary of the eligible property, except for releases caused or contributed to by such [person] applicant.

(2) Not later than one hundred eighty days after the [commissioner accepts the application] first installment due date, including any extension thereof by the commissioner, of the fee required pursuant to subsection (h) of this section, the eligible party shall submit to the commissioner and the Commissioner of Energy and Environmental Protection a brownfield investigation plan and remediation schedule that is signed and stamped by a licensed environmental professional. Unless otherwise approved in writing by the Commissioner of Energy and Environmental Protection, the eligible party shall submit a brownfield investigation plan and remediation schedule which provides that the investigation shall be completed [within two years of the application being accepted by the commissioner] not later than two years after the first installment due date, including any extension thereof by the commissioner, of the fee required pursuant to subsection (h) of this section, remediation shall be initiated not later than three years from the [date of the application being accepted by the commissioner] first installment due date, including any extension thereof by the commissioner, of the fee required pursuant to subsection (h) of this section and remediation shall be completed sufficiently to support either a verification or interim verification [within eight years of the application being accepted by the commissioner] not later than eight years after the first installment due date, including any extension thereof by the commissioner, of the fee required pursuant to subsection (h) of this section. The schedule shall also include a schedule for providing public notice of the remediation prior to the initiation of such remediation in accordance with subdivision (1) of subsection (k) of this section. Not later than two years after the [application is accepted by the commissioner] first installment due date, including any extension thereof by the commissioner, of the fee required pursuant to subsection (h) of this section, unless the Commissioner of Energy and Environmental Protection has specified a later day, in writing, the eligible party shall submit to the Commissioner of Energy and Environmental Protection documentation, approved in writing by a licensed environmental professional and in a form prescribed by the Commissioner of Energy and Environmental Protection, that the investigation of the property has been completed in accordance with prevailing standards and guidelines. Not later than three years after the [application is accepted by the commissioner] first installment due date, including any extension thereof by the commissioner, of the fee required pursuant to subsection (h) of this section, unless the Commissioner of Energy and Environmental Protection has specified a later day, in writing, the eligible party shall notify the Commissioner of Energy and Environmental Protection and the commissioner in a form prescribed by the Commissioner of Energy and Environmental Protection that the remediation has been initiated, and shall submit to the Commissioner of Energy and Environmental Protection a remedial action plan, approved in writing by a licensed environmental professional in a form prescribed by the Commissioner of Energy and Environmental Protection. Not later than eight years after the [application is accepted by the commissioner] first installment due date, including any extension thereof by the commissioner, of the fee required pursuant to subsection (h) of this section, unless the Commissioner of Energy and Environmental Protection has specified a later day, in writing, the eligible party shall complete remediation of the property and submit the remedial action report and verification or interim verification to the Commissioner of Energy and Environmental Protection and the commissioner. The Commissioner of Energy and Environmental Protection shall grant a reasonable extension if the eligible party demonstrates to the satisfaction of the Commissioner of Energy and Environmental Protection that: (A) Such eligible party has made reasonable progress toward investigation and remediation of the eligible property; and (B) despite best efforts, circumstances beyond the control of the eligible party have significantly delayed the remediation of the eligible property.

(3) An eligible party who submits an interim verification for an eligible property, and any subsequent owner of such eligible property, shall, until the remediation standards for groundwater are achieved, (A) operate and maintain the long-term remedy for groundwater in accordance with the remedial action plan, the interim verification and any approvals issued by the Commissioner of Energy and Environmental Protection, (B) prevent exposure to any groundwater plume containing a regulated substance in excess of the remediation standards on the property, (C) take all reasonable action to contain any groundwater plume on the property, and (D) submit annual status reports to the Commissioner of Energy and Environmental Protection and the commissioner.

(4) Before commencement of remedial action pursuant to the plan and schedule, the eligible party shall: (A) Publish notice of the remedial action in a newspaper having a substantial circulation in the town where the property is located, (B) notify the director of health of the municipality where the property is located, and (C) either (i) erect and maintain for at least thirty days in a legible condition a sign not less than six feet by four feet on the property, which shall be clearly visible from the public highway and shall include the words "ENVIRONMENTAL CLEAN-UP IN PROGRESS AT THIS SITE. FOR FURTHER INFORMATION CONTACT:" and include a telephone number for an office from which any interested person may obtain additional information about the remedial action, or (ii) mail notice of the remedial action to each owner of record of property which abuts such property, at the address on the last-completed grand list of the relevant town. Public comments shall be directed to the eligible party for a thirty-day period starting with the last provided public notice provision and such eligible party shall provide all comments and any responses to the Commissioner of Energy and Environmental Protection prior to commencing remedial action.

(5) The remedial action shall be conducted under the supervision of a licensed environmental professional and the remedial action report shall be submitted to the commissioner and the Commissioner of Energy and Environmental Protection signed and stamped by a licensed environmental professional. In such report, the licensed environmental professional shall include a detailed description of the remedial actions taken and issue a verification or interim verification, in which he or she shall render an opinion, in accordance with the standard of care provided in subsection (c) of section 22a-133w, that the action taken to contain, remove or mitigate the release of regulated substances within the boundaries of such property is in accordance with the remediation standards.

(6) All applications for permits required to implement such plan and schedule in this section shall be submitted to the permit ombudsman within the Department of Economic and Community Development.

(7) Each eligible party participating in the brownfield remediation and revitalization program shall maintain all records related to its implementation of such plan and schedule and completion of the remedial action of the property for a period of not less than ten years and shall make such records available to the commissioner or the Commissioner of Energy and Environmental Protection at any time upon request by either.

(8) (A) Within sixty days of receiving a remedial action report signed and stamped by a licensed environmental professional and a verification or interim verification, the Commissioner of Energy and Environmental Protection shall notify the eligible party and the commissioner whether the Commissioner of Energy and Environmental Protection will conduct an audit of such remedial action. Any such audit shall be conducted not later than one hundred eighty days after the Commissioner of Energy and Environmental Protection receives a remedial action report signed and stamped by a licensed environmental professional and a verification or interim verification. Within fourteen days of completion of an audit, the Commissioner of Energy and Environmental Protection shall send written audit findings to the eligible party, the commissioner and the licensed environmental professional. The audit findings may approve or disapprove the report, provided any disapproval shall set forth the reasons for such disapproval.

(B) The Commissioner of Energy and Environmental Protection may request additional information during an audit conducted pursuant to this subdivision. If such information has not been provided to said commissioner within fourteen days of such request, the time frame for said commissioner to complete the audit shall be suspended until the information is provided to said commissioner. The Commissioner of Energy and Environmental Protection may choose to conduct such audit if and when the eligible party fails to provide a response to said commissioner's request for additional information within sixty days.

(C) The Commissioner of Energy and Environmental Protection shall not conduct an audit of a verification or interim verification pursuant to this subdivision after one hundred eighty days from receipt of such verification unless (i) said commissioner has reason to believe that a verification was obtained through the submittal of materially inaccurate or erroneous information, or otherwise misleading information material to the verification or that material misrepresentations were made in connection with the submittal of the verification, (ii) any post-verification monitoring or operations and maintenance is required as part of a verification and has not been done, (iii) a verification that relies upon an environmental land use restriction was not recorded on the land records of the municipality in which such land is located in accordance with section 22a-133o and applicable regulations, (iv) said commissioner determines that there has been a violation of law material to the verification, or (v) said commissioner determines that information exists indicating that the remediation may have failed to prevent a substantial threat to public health or the environment for releases on the property.

(l) Not later than sixty days after receiving a notice of disapproval or a verification or interim verification from the Commissioner of Energy and Environmental Protection, the eligible party shall submit to said commissioner and to the commissioner a report of cure of noted deficiencies. Within sixty days after receiving such report of cure of noted deficiencies by said commissioner, said commissioner shall issue a successful audit closure letter or a written disapproval of such report of cure of noted deficiencies.

(m) Before approving a verification or interim verification, the Commissioner of Energy and Environmental Protection may enter into a memorandum of understanding with the eligible party with regard to any further remedial action or monitoring activities on or at such property that said commissioner deems necessary for the protection of human health or the environment.

(n) (1) An eligible party who has been accepted into the brownfield remediation and revitalization program shall have no obligation as part of its plan and schedule to characterize, abate and remediate any plume of a regulated substance outside the boundaries of the subject property, provided the notification requirements of section 22a-6u pertaining to significant environmental hazards shall continue to apply to the property and the eligible party shall not be required to characterize, abate or remediate any such significant environmental hazard outside the boundaries of the subject property unless such significant environmental hazard arises from the actions of the eligible party after its acquisition of or control over the property from which such significant environmental hazard has emanated outside its own boundaries. If an eligible party who has been accepted into the brownfield remediation and revitalization program conveys or otherwise transfers its ownership of the subject property and such eligible party is in compliance with the provisions of this section and the brownfield investigation plan and remediation schedule at the time of conveyance or transfer of ownership, the provisions of this section shall apply to such transferee, if such transferee meets the eligibility criteria set forth in this section, pays the outstanding balance of the fee required by subsection (h) of this section and complies with all the obligations undertaken by the eligible party under this section. In such case, all references to applicant or eligible party shall mean the subsequent owner or transferee.

(2) After the Commissioner of Energy and Environmental Protection issues either a no audit letter or a successful audit closure letter, or no audit decision has been made by said commissioner within one hundred eighty days after the submittal of the remedial action report and verification or interim verification, such eligible party shall not be liable to the state or any third party for (A) costs incurred in the remediation of, equitable relief relating to, or damages resulting from the release of regulated substances addressed in the brownfield investigation plan and remediation schedule, and (B) historical off-site impacts including air deposition, waste disposal, impacts to sediments and natural resource damages. No eligible party shall be afforded any relief from liability such eligible party may have from a release requiring action pursuant to the PCB regulations or a release requiring action pursuant to the UST regulations.

(3) The provisions of this section concerning liability shall extend to any person who acquires title to all or part of the property for which a remedial action report and verification or interim verification have been submitted pursuant to this section, provided (A) there is payment of a fee of ten thousand dollars to said commissioner for each such extension, (B) such person acquiring all or part of the property meets the criteria of this section, and (C) the Commissioner of Energy and Environmental Protection has issued either a successful audit closure letter or no audit letter, or no audit decision has been made by said commissioner within one hundred eighty days after the submittal of the remedial action report and verification or interim verification. No municipality or economic development agency that acquires title to all or part of the property shall be required to pay a fee, provided the municipality or economic development agency shall collect and pay the fee upon transfer of the property to another person for purposes of development. Such fee shall be deposited into the Special Contaminated Property Remediation and Insurance Fund established under section 22a-133t and such funds shall be for the exclusive use by the Department of Energy and Environmental Protection.

(4) Neither a successful audit closure nor no audit letter issued pursuant to this section, nor the expiration of one hundred eighty days after the submittal of the remedial action report and verification or interim verification without an audit decision by the Commissioner of Energy and Environmental Protection, shall preclude said commissioner from taking any appropriate action, including, but not limited to, any action to require remediation of the property by the eligible party or, as applicable, to its successor, if said commissioner determines that:

(A) The successful audit closure, no audit letter, or the expiration of one hundred eighty days after the submittal of the remedial action report and verification or interim verification without an audit decision by the Commissioner of Energy and Environmental Protection was based on information provided by the person submitting such remedial action report and verification or interim verification that the Commissioner of Energy and Environmental Protection can show that such person knew, or had reason to know, was false or misleading, and, in the case of the successor to an applicant, that such successor was aware or had reason to know that such information was false or misleading;

(B) New information confirms the existence of previously unknown contamination that resulted from a release that occurred before the date that an application has been accepted into the brownfield remediation and revitalization program;

(C) The eligible party who received the successful audit closure or no audit letter or where one hundred eighty days lapsed without an audit decision by the Commissioner of Energy and Environmental Protection has materially failed to complete the remedial action required by the brownfield investigation plan and remediation schedule or to carry out or comply with monitoring, maintenance or operating requirements pertinent to a remedial action including the requirements of any environmental land use restriction; or

(D) The threat to human health or the environment is increased beyond an acceptable level due to substantial changes in exposure conditions at such property, including, but not limited to, a change from nonresidential to residential use of such property.

(5) If an eligible party who has been accepted into the brownfield remediation and revitalization program conveys or otherwise transfers all or part of its ownership interest in the subject property at any time before the issuance of a successful audit closure or no audit letter or the expiration of one hundred eighty days after the submittal of the remedial action report and verification or interim verification without an audit decision by the Commissioner of Energy and Environmental Protection, the eligible party conveying or otherwise transferring its ownership interest shall not be liable to the state or any third party for (A) costs incurred in the remediation of, equitable relief relating to, or damages resulting from the release of regulated substances addressed in the brownfield investigation plan and remediation schedule, and (B) historical off-site impacts including air deposition, waste disposal, impacts to sediments and natural resource damages, provided the eligible party complied with its obligations under this section during the period when the eligible party held an ownership interest in the subject property. Nothing in this subsection shall provide any relief from liability such eligible party may have related to a release requiring action pursuant to the PCB regulations, or a release requiring action pursuant to the UST regulations.

(6) Upon the Commissioner of Energy and Environmental Protection's issuance of a successful audit closure letter, no audit letter, or one hundred eighty days have passed since the submittal of a verification or interim verification and said commissioner has not audited the verification or interim verification, the immediate prior owner regardless of its own eligibility to participate in the comprehensive brownfield remediation and revitalization program shall have no liability to the state or any third party for any future investigation and remediation of the release of any regulated substance at the eligible property addressed in the verification or interim verification, provided the immediate prior owner has complied with any legal obligation such owner had with respect to investigation and remediation of releases at and from the property, and provided further the immediate prior owner shall retain any and all liability such immediate prior owner would otherwise have for the investigation and remediation of the release of any regulated substance beyond the boundary of the eligible property. In any event, the immediate prior owner shall remain liable for (A) penalties or fines, if any, relating to the release of any regulated substance at or from the eligible property, (B) costs and expenses, if any, recoverable or reimbursable pursuant to sections 22a-134b, 22a-451 and 22a-452, and (C) obligations of the immediate prior owner as a certifying party on a Form III or IV submitted pursuant to sections 22a-134 to 22a-134e, inclusive.

(o) A person whose application to the brownfield remediation and revitalization program has been accepted by the commissioner or any subsequent eligible party whose application to the brownfield remediation and revitalization program has been accepted by the commissioner shall be exempt for filing as an establishment pursuant to sections 22a-134a to 22a-134d, inclusive, if such real property or prior business operations constitute an establishment. Nothing in this section shall be construed to alter any existing legal requirement applicable to any certifying party at a property under sections 22a-134 and 22a-134a to 22a-134e, inclusive.

(p) Notwithstanding the provisions of this section, eligible parties shall investigate and remediate, and remain subject to all applicable statutes and requirements, the extent of any new release that occurs during their ownership of the property.

Sec. 6. Subsection (b) of section 13 of public act 11-57 is amended to read as follows (Effective July 1, 2012):

(b) For the Department of Economic and Community Development: Regional brownfield redevelopment grant and loan fund to provide funding for the brownfield programs established pursuant to section 32-9kk, as amended by this act, and the staffing and marketing of such programs, not exceeding $25,000,000.

Sec. 7. Subsection (b) of section 32 of public act 11-57 is amended to read as follows (Effective July 1, 2012):

(b) For the Department of Economic and Community Development: Regional brownfield redevelopment grant and loan fund to provide funding for the brownfield programs established pursuant to section 32-9kk, as amended by this act, and the staffing and marketing of such programs, not exceeding $25,000,000.

Sec. 8. (NEW) (Effective July 1, 2012) The Commissioner of Economic and Community Development, in consultation with the State Historic Preservation Office, shall identify abandoned and underutilized mills that are important assets to either the municipality or the region of the state in which such mill is located.

Sec. 9. Section 2 of public act 10-135, as amended by section 15 of public act 11-141, is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) There is established a working group to examine the remediation and development of brownfields in this state, including, but not limited to, the remediation scheme for such properties, permitting issues and liability issues, including those set forth by sections 22a-14 to 22a-20, inclusive, of the general statutes.

(b) The working group shall consist of the following thirteen members, each of whom shall have expertise related to brownfield redevelopment in environmental law, engineering, finance, development, consulting, insurance or another relevant field:

(1) Four appointed by the Governor;

(2) One appointed by the president pro tempore of the Senate;

(3) One appointed by the speaker of the House of Representatives;

(4) One appointed by the majority leader of the Senate;

(5) One appointed by the majority leader of the House of Representatives;

(6) One appointed by the minority leader of the Senate;

(7) One appointed by the minority leader of the House of Representatives;

(8) The Commissioner of Economic and Community Development or the commissioner's designee, who shall serve ex officio;

(9) The Commissioner of Energy and Environmental Protection or the commissioner's designee, who shall serve ex officio; and

(10) The Secretary of the Office of Policy and Management or the secretary's designee, who shall serve ex officio.

(c) Any member of the working group as of the effective date of this section shall continue to serve and all new appointments to the working group shall be made no later than thirty days after the effective date of this section. Any vacancy shall be filled by the appointing authority.

(d) The working group shall select chairpersons of the working group. Such chairpersons shall schedule the first meeting of the working group, which shall be held no later than sixty days after the effective date of this section.

(e) On or before January 15, [2012] 2013, the working group shall report, in accordance with the provisions of section 11-4a of the general statutes, on its findings and recommendations to the Governor and the joint standing committees of the General Assembly having cognizance of matters relating to commerce and the environment.

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact:

Note: GF=General Fund

Municipal Impact:

Explanation

Sections 1, 2, 6 and 7 expand the purposes for which General Obligation (GO) bond funds authorized for the Regional Brownfield Redevelopment Loan Fund can be used to include: (1) grants to municipalities, (2) loans for affordable housing projects, and (3) staffing and marketing costs associated with the Department of Economic and Community Development's (DECD) Brownfields Remediation Program. To the degree that bond funds are expended more rapidly than they otherwise would have been, this will accelerate General Fund expenditures for debt service costs. It could also result in the need for the authorization of additional GO bonds for this program in future years.

There is currently a $10 million unallocated GO bond balance for the Regional Brownfield Redevelopment Loan Fund and an additional $25 million will be made available in FY 13.

Section 2 also results in a potential cost by permitting the Commissioner of Economic and Community Development to forgive loans provided to municipalities and economic development agencies. The actual cost is uncertain as the commissioner has discretion over forgiving any particular loan that would otherwise be repaid.

Section 3 has no fiscal impact by specifying that DECD may use up to four percent of available funding for brownfield financing programs for certain administrative expenses related to those programs and the administration of the Office of Brownfield Remediation and Development (OBRD). There is no fiscal impact because the provision redirects funding to this specific purpose without providing additional funds.

Section 4 has no fiscal impact by redirecting any funds recovered by the Attorney General from parties that polluted brownfield sites to the Brownfield Remediation and Development account.

Section 5 results in a decrease in revenue by reducing and eliminating certain fees collected under the Liability Protection Program.

Section 5 gives applicants more time to pay the program's various application fees, which they must pay in two installments to the Department of Energy and Environmental Protection (DEEP). This is anticipated to result in delayed receipt of revenue to the state, as applicants are likely to take longer in submitting fees. This provision also allows municipal applicants to delay the remittance of fees to the state.

This section also reduces fees submitted to DEEP under certain conditions and eliminates the second installment payment. Currently, the first installment must be reduced by 10% if the applicant finishes investigating and remediating the property within 180 days of being notified that the DECD commissioner accepted the brownfield into the program. This requirement would result in a revenue loss to the state, and is anticipated to result in cost avoidance to municipalities, to the extent that they are applicants of brownfields.

The bill allows municipalities to ask the DEEP commissioner to waive the fee on any brownfield located within their respective jurisdictions that has been accepted into the program. Currently, municipalities are permitted to request fee waivers only for brownfields within their respective jurisdictions that others own. This is expected to result in a revenue loss to DEEP and a revenue gain to municipalities.

The bill eliminates the requirement that a party receiving a brownfield transfer from an applicant pay a $10,000 fee upon the transfer.¹ It instead requires the party to pay any outstanding application fee balance. It is uncertain what this provision would have on the state and municipalities, since the balance of application fees varies. The balance may, or may not, exceed the $10,000 application fee. Currently however no payments have been made in this program as the first applications were received in FY 11.

Section 5 also redirects application fees from the Special Contaminated Property Remediation and Insurance Fund (SCPRIF) to the Brownfield Remediation and Development account. This transfer from one account to another has no fiscal impact to the state.

Section 8 requires DECD to identify abandoned and underutilized mills, which will require at least one employee at an annual cost of $86,071 ($66,608 in salary plus $19,463 in fringe) in the OBRD to administer. It is anticipated that the administrative funding support provided to OBRD in Section 3 of the bill may accommodate this expense.

Currently, there are three full-time employees at the ORBD that manage DECD's brownfield programs and initiatives.

Section 9 may result in a cost of less than $1,000 to agencies participating in the working group to reimburse legislators and agency staff for mileage expenses.

The Out Years

The annualized ongoing fiscal impact identified above for General Fund debt service would continue into the future subject to inflation. The impact of Section 5 would continue into the future subject to fee changes and the extent to which municipalities apply to certain state brownfield programs.

All other annualized ongoing fiscal impacts would also continue into the future subject to inflation.

OLR Bill Analysis

sHB 5342

AN ACT CONCERNING REVISIONS TO THE STATE'S BROWNFIELD REMEDIATION AND DEVELOPMENT STATUTES

SUMMARY:

This bill makes programmatic and administrative changes to the Department of Economic and Community Development's (DECD) program providing financial assistance to clean up and redevelop brownfields. The program consists of separate grant and loan components. The bill narrows the range of entities eligible for assistance under both components, allows loans proceeds to be used to develop affordable housing, and allows the DECD commissioner to use a portion of the funds allocated to the program to cover staffing and marketing costs.

The bill makes many procedural changes to the Brownfield Liability Protection Program, which protects developers from liability to the state and third parties for cleaning up brownfields according to the program's requirements. It makes changes to the process for accepting brownfields into the program; gives developers more time to pay the program's application fees; and resets the deadlines for completing specified tasks, including investigating and remediating brownfields.

The bill requires the commissioner, in consultation with the State Historic Preservation Office, to identify abandoned and underused mills that are important assets to their respective municipalities or regions (§ 8).

Lastly, the bill the bill extends the brownfields working group's reporting deadline by one year (§ 9). PA 10-135 established the group to study how the state's brownfields were being cleaned up and remediated and required it to report its findings to the Commerce Committee by January 15, 2012. The bill extends this deadline to January 15, 2013.

EFFECTIVE DATE: July 1, 2012, except that the extension of the brownfield working group's reporting deadline takes effect upon passage.

§§ 1-4, 6, &7 — BROWNFIELD FINANCING PROGRAM

The bill makes programmatic and administrative changes to DECD's brownfield financing program, which consists of separate grant and loan components.

Municipal Grant Program

Eligible Entities. The bill narrows the range of municipal entities eligible for grants (i.e., eligible grant recipients). Under current law, grants are available to municipalities, economic development authorities, regional economic development authorities, qualified nonprofit community and economic development corporations, or any combination of these organizations. (Current law does not specify criteria for determining if a nonprofit community and economic development corporation qualifies for grants.)

The bill limits the grants to municipalities and three types of “economic development agencies:”

1. municipal economic development agencies or entities created or designated to implement a redevelopment project (i.e., CGS Chapter 130) or municipal development project (i.e., CGS Chapter 132);

2. municipally-funded or –supported nonprofit economic development corporations; and

3. nonstock corporations or limited liability companies that a municipality, municipal economic development agency, or entity operating under CGS Chapter 130 or CGS Chapter 132 establishes or controls.

Funding. The bill allows the commissioner to use previously authorized bonds to make the grants. PA 11-57 authorized $25 million in bonds in FY 12 and $25 million in FY 13 for loans. The bill allows the commissioner to use the proceeds from these bonds to make loans or grants (§§ 6 and 7).

Loan Program

Eligible Entities. The bill makes the same change with respect to the types of organizations that qualify for loans (i.e., eligible applicants). Under current law, for-profit and nonprofit entities qualify for loans regardless of whether a municipality establishes or controls them. Under the bill, only those a municipality establishes or controls qualify for loans.

Affordable Housing. By law, eligible loan applicants can use the loan proceeds to redevelop a remediated brownfield for a range of uses, including housing. But, under current law, the housing may only be for first-time homebuyers, regardless of income. Under the bill, the housing must be affordable and suitable for first-time homebuyers, workforce housing, housing in locally designated incentive housing zones, and other residential purposes the DECD commissioner approves. Further, the loan agreement must specify the number of affordable units the redevelopment will create.

The bill does not define “affordable housing,” but under the housing statutes, housing is affordable based on a family's income and the share of that income spent on housing. Consequently, housing is affordable if a family earning no more than the median income of the municipality where the housing is located pays no more than 30% of its income for the housing (CGS § 8-39a).

Forgivable Loans. The bill specifies that municipalities and economic development agencies qualify for loans and allows the commissioner to forgive them.

Administrative Support

The bill allows the commissioner to use a portion of the funds allocated to the program for administrative expenses. She can use up to 4% of the funds to staff and market the grant and loan programs, including developing their websites, and fund DECD's Office of Brownfield Remediation and Development.

The bill allows her to tap the $25 million PA 11-57 authorized in FY 12 and 13 for the program to cover only the program's staffing and marketing costs.

Brownfield Remediation and Development Account

The bill requires revenue from two additional sources to be deposited in the Brownfield Remediation and Development Account. Under current law, revenue from the following sources must be deposited there:

1. loan repayments;

2. the proceeds of bonds issued for the program;

3. principal and interest payments on loans made to assess and demolish contaminated property (i.e., Special Contaminated Property Remediation and Insurance Fund);

4. the account's interest and investment earnings;

5. security for the loans; and

6. any other funds the law requires to be deposited in the account.

The bill requires application fees charged under the Liability Protection Program to be deposited in the account, but allows the DECD and Department of Energy and Environmental Protection (DEEP) commissioners to use it for different purposes. The DECD commissioner can use the revenue for making more grants and loans and the DEEP commissioner can use it for cleaning up contamination that migrates from property enrolled in the Liability Protection Program. Under current law, the revenue goes into the Special Contaminated Property Remediation and Insurance Fund.

The other revenue that must be deposited in the account is the money the attorney general recovers from parties that polluted property being cleaned up and developed under the Brownfield Financing Program.

LIABILITY PROTECTION PROGRAM

The bill makes procedural and administrative changes to the Liability Protection Program, which protects developers from liability to the state and third parties for cleaning up brownfields according to the program's requirements. The law requires the DECD commissioner to operate the program within available appropriations, but divides the administrative duties between her and the DEEP commissioner: the DECD commissioner accepts brownfields into the program and the DEEP commissioner monitors and audits their remediation.

Acceptance in the Program

The bill changes the procedures for accepting brownfields into the program. Under current law, there are two ways a brownfield can be accepted into the program: (1) a developer applies to the DECD commissioner to have the brownfield accepted into the program or (2) a municipality or an economic development agency nominates a brownfield for acceptance into the program.

Acceptance by Application. By law, parties applying to have a brownfield accepted into a program must submit an application to DECD that includes, among other things, an assessment of the property's historical and current uses and the activities conducted there. Under current law, the assessment must be prepared according to DEEP's Site Characterization Guidance Document by or for a bona fide purchaser.

Under the bill the assessment may also be prepared by or for a contiguous property owner. Regardless of the party for whom the assessment is prepared, it must meet the prevailing standards and guidelines for conducting a Phase I Environmental Site Assessment, instead of the characterization guidance document.

Besides changing some of the application requirements, the bill specifies when the DECD commissioner must review and accept brownfields into the program. Current law allows her to accept up to 32 applications per year into the program, imposing no time period on when she may review and accept them. The bill requires her to begin reviewing and accepting applications only when she receives at least 16 applications in a six-month period or at least 33 applications in a 12-month period. In doing so, she must consider the law's statewide portfolio factors, instead of basing her decision on them, as current law requires.

Acceptance by Nomination. Current law allows municipalities or their economic development agencies to nominate brownfields for acceptance into the program, but provides no process or criteria for doing so. The bill provides a two-step process for nominating brownfields, but allows only municipalities (not their economic development agencies) to do so. The steps require the nominated brownfields to meet the same criteria as those submitted via application.

The first step requires a municipality to certify on a DECD form that the property:

1. is a brownfield and that the contamination exceeds DEEP's remediation standards;

2. is not subject to federal or state enforcement action or on the state or national list of contaminated sites; and

3. meets any other relevant factors, including the statewide portfolio factors, as the commissioner determines.

If the commissioner approves the nomination, the municipality must provide an additional certification before DECD can accept the brownfield into the program. It must, on a DECD form, certify that it has identified a person who:

1. is an innocent landlord, bona fide prospective purchaser, or contiguous property owner;

2. did not contaminate the property and is not affiliated with the party that did; and

3. did nothing to pollute the state's waters.

If the person meets these criteria, the commissioner must accept the property into the program.

Brownfields Participating in Other Remediation Programs

The bill specifies that brownfields being remediated under the Transfer Act or DEEP's voluntary remediation and covenant not to sue programs are eligible for acceptance in the Limited Liability Program if they meet its criteria. Current law allows properties in the voluntary remediation and covenant not to sue programs to participate in the Limited Liability Program.

Fee Installment Payments

Timeframes. The bill gives applicants more time to pay the program's application fee, which they must pay in two installments. By law, applicants accepted into the program must pay a fee equal to 5% of the brownfield's assessed value as of the municipality's most recently completed grand list. They pay the fee to the DEEP commissioner.

Under current law, an applicant must pay the first installment within 180 days after being notified that the DECD commissioner accepted the brownfield into the program. The bill gives the applicant 180 days from that date or the date he or she takes title to the property, whichever is later.

The bill changes the timeframe for paying the second installment. Under current law, the applicant must pay the second installment to the DEEP commissioner within four years after being notified that the DECD commissioner accepted the application. Under the bill, the applicant must pay the installment within four years after the date the commissioner accepts the application.

The bill allows the DECD commissioner to extend the deadlines for paying either installment if the applicant requests an extension.

Reducing and Eliminating Fees. The bill makes similar changes to the provisions requiring the DEEP commissioner to reduce the first installment and eliminate the second. Under current law, he must reduce the first installment by 10% if the applicant finishes investigating and remediating the property within 180 days of being notified that the DECD commissioner accepted the brownfield into the program. Under the bill, the DEEP commissioner must reduce the installment if these tasks are completed within 180 days after the first installment is due, including any deadline extensions.

Under current law, the DEEP commissioner must eliminate the second installment if (1) the applicant cleans up the brownfield within four years after being notified that the DECD commissioner accepted the brownfield into the program and (2) submits the required remedial action report and the verification or interim verification. Under the bill, the DEEP commissioner must eliminate the installment if these are completed within four years after the first installment is due, including any deadline extensions.

Municipal Exemptions. The bill allows municipalities and economic development agencies to ask the DEEP commissioner to waive the fee on any brownfield located within their respective jurisdictions that has been accepted into the program. Current law allows them to request fee waivers only for brownfields within their respective jurisdictions that others own. The DEEP commissioner may grant the waiver based on statutory criteria.

Current law exempts municipalities and economic development agencies whose brownfields have been accepted into the program from paying the fee. But, if they transfer the property to another party for development, they must collect the fee from that party and remit it to DEEP. The bill instead requires the party to whom the brownfield is being transferred to pay the fee directly to the DEEP commissioner.

Property Transfers. By law, an applicant may transfer a brownfield to another party before completing its investigation and remediation. Under current law, the brownfield may remain in the program if the transferee meets the program's eligibility criteria and pays a $10,000 fee, which it must pay again when it finishes remediating the property and submits documents necessary to receive the program's protections. The bill eliminates the requirement that the transferee pay the $10,000 upon the brownfield's transfer and instead requires it pay any outstanding application fee balance.

Timeframe for Investigating and Remediating Brownfield

The bill resets the deadlines for investigating and remediating brownfields by basing them on the due date for paying the first installment of the application fee, including any extensions. Current law sets the deadlines from when the DECD commissioner approves an application. Table 1 compares the deadlines under current law and the bill.

Table 1: Deadline for Investigating and Remediating Brownfields under Current Law and the Bill

COMMITTEE ACTION

Commerce Committee

Joint Favorable Substitute

¹ Under current law, an applicant may transfer a brownfield to another party before completing its investigation and remediation. The brownfield may remain in the program if the transferee meets the program's eligibility criteria and pays a $10,000 fee, which it must pay again when it finishes remediating the property and submits documents necessary to receive the program's protections.