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Legislative Memo

BILL:

A.338 (Destito)

Support

SUBJECT:

"Brownfield" Incentives

 

DATE:

February 26, 2001

 

The Business Council supports the adoption of a statutory program for the cleanup and redevelopment of contaminated properties, or "brownfields."

However, we oppose A.338 because it is far too narrow in scope, and too limited in its reforms, to adequately address this issue.

Our most significant concerns include the following:

  • Unlike many states' brownfields programs, this legislation does not allow the "volunteer" to employ remediation goals based on the intended use of the site, which will have a significant impact on the public health risks posed by contamination. The Business Council strongly recommends that any restoration incentive program should include a risk-based, multi-tiered cleanup standard.

  • The scope of this bill is inappropriately narrow. It would apply only to properties specifically designated by municipalities as "environmental opportunity zones." Further, the bill states that, to be designated as an EOZ, a parcel must be "vacant or underutilized." There are several problems with this approach. First, by limiting the program to municipally-designated parcels, it could exclude many properties that otherwise might be targeted for cleanup and redevelopment. Second, by limited the EOZ designation to "vacant or underutilized" properties, this bill fails to provide incentives for environmental restoration efforts that would promote the sale and continued operation of an existing business.

  • Under this bill, a "covenant not to sue" is issued by the DEC upon completion of an approved remedial work plan. While this covenant is clearly binding on the DEC, we question whether it would be binding on the Attorney General. A better approach is to authorize the DEC to issue a liability releases that is explicitly binding on "the state."

  • The liability release contains reservations or "reopeners" that can be invoked for factors beyond the control of the "volunteer," including the availability of "new information" - an undefined term that could include a change in an environmental standard. The Business Council has proposed that non-responsible party volunteers receive liability protection against factors beyond their control.

  • Rather than providing for a streamlined project approval process that would entice development interests, this bill establishes an extensive, multi-layered approval process. For example, the bill requires extensive community participation activities before a property can even be designated as eligible for the program. This process includes a minimum 60 day public comment period on a draft local resolution to designate EOZs. Local resolutions need to be approved by the DEC commissioner before they can be voted on by the municipal legislature. Likewise, the bill requires remedial plans to be approved at both the municipal and state level — while the bill establishes a time frame for DEC action, it establishes no procedure, time table or criteria for the municipal approval of remedial work plans. We believe these extensive review requirements will make this program unattractive for time-sensitive development efforts — especially in the case of properties not already included in an EOZ.

  • It excludes Class 2 inactive hazardous wastes sites, even in instances where a non-responsible party is willing to restore the site to a productive use. As a result, the bill would deny incentives for the timely restoration and redevelopment of sites posing the most significant environmental and public health risk.

  • Under this bill, the real property tax exemption would be revoked if the property is transferred. This would preclude participation by a developer who intends to sell remediated property to a new owner/operator, thereby greatly reducing the usefulness of this program.

  • The extensive community participation program established under this bill would extend beyond environmental issues to also address "long-term changes in real property use." Since property use is already addressed through municipal zoning procedures and local planning measures, The Business Council does not believe that issues pertaining to the post-remediation use of property should be subject to this community participation program.

  • The bill would revoke the covenant not to sue if a property owner secures any additional real property tax abatement other than that provided under this legislation. It is unclear why the liability provisions should be affected by real property tax issues.

  • The statute of property owners that were not "contributory" responsible parties (NCRP) is unclear. For example, the bill says that a covenant not to sue cannot be given to an entity that is a site owner. The real property tax reduction cannot be provided to an entity that "was otherwise responsible" for the site under Title 13 - a provision that applies to all site owners since the date the contamination originated. Given these provisions, it is unclear how a NCRP can take advantage of this program.

The Business Council believes that the state needs a statutory "voluntary cleanup program" that provides a high degree of certainty to a potential developer regarding cleanup costs, future liability, and the timetable for the review of projects. The Business Council believes that A.338 fails to provide these key elements of a successful program. Therefore, we recommend against adoption of A.338.