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Legislative Memo

BILL:

S.4788 (Marcellino) / A.7498-A (Lopez)

Support

SUBJECT:

Brownfield Incentives

 

DATE:

May 7, 2001

 

The Business Council opposes adoption of this bill. While it contains some innovative provisions, it has significant flaws in key program areas. For example, it fails to provide needed reforms on cleanup standards; its excessively broad "contribution claim" provision will increase program costs and litigation; it gives the Department of Environmental Conservation onerous, but unnecessary, new enforcement powers; and its unfunded $200 million per year price tag will likely result in significant new taxes and fees imposed on the business sector.

The bill would also have a dramatic effect on the implementation of state economic development programs by giving brownfield projects in certain designated areas automatic priority over all other development projects - regardless of their relative impact on job creation or other economic results.

The following provide a more detailed discussion of our most significant concerns regarding S.4788/A.7498-A.

  • The Business Council supports the adoption of risk-based standards for the remediation of both soil and groundwater, with separate standards established for different categories of site use (i.e., residential, commercial and industrial.) Under our recommended approach, residential sites would be cleaned up to highly protective levels regardless of where they were located. Nonresidential site standards would be based on different exposure assumptions, but would also assure the safety of public health and the environment. The Brownfield Coalition bill fails to adopt a straightforward approach to setting risk-based, site use-based cleanup standards. Furthermore, the bill bases its entire groundwater remediation program on the long term achievement of drinking water standards, regardless of the likelihood or feasibility of using specific groundwater resources for potable supplies - an approach that is far more rigid than current state law.

  • This bill gives projects within designated "land reuse opportunity areas" (LROAs) priority over all other projects seeking assistance from the state's infrastructure development, capital development, human resource development, business assistance, job training, and job placement programs. This priority treatment would be irrespective of the relative benefits that would result from development projects within designated LROAs.

  • The bill creates a new enforcement mechanism that places a potentially responsible party (PRP) at jeopardy of "treble damages" (i.e., recovery of DEC's cleanup costs, plus damages of up to three times those costs) before the state has even made a determination as to whether that PRP is actually liable for the contamination at a site. The Department of Environmental Conservation already has the authority to issue remediation orders after an administrative hearing, and can impose substantial civil penalties against entities that fail to comply with such orders. There is no need for the additional enforcement mechanism proposed by the Coalition.

  • The bill allows any party conducting a Title 13 or a voluntary cleanup to sue in state court for financial "contribution" from other responsible parties, regardless of the level of contamination at the site, or the appropriateness of the cleanup work that was done. Under this bill, the volunteer can elect to remove all traces of contamination from the site, regardless of the cost or necessity of doing so, and recover its costs from "responsible parties" - including previous site owners that did not cause the contamination. This provision - which is inconsistent with the federal cost recovery provisions most commonly used today - could significantly increase costs associated with brownfield projects, and undoubtedly will result in a increase in litigation over cleanup liability.

  • Although not specified in the legislation, the Coalition has stated that the price tag for its proposal will average at least $200 million per year for the next ten years. This is roughly three times the state's current annual cash outlay for its "superfund" program. Neither the bill nor the Coalition's supporting memos suggest how this nearly $2 billion program is going to be financed. The Business Council is concerned that this legislation would require imposition of onerous new fees on the private sector, and especially on the state's manufacturing sector.

In summary, A.10408 will be difficult to implement and would provide limited, uncertain and - in many cases - inadequate reforms regarding the cleanup and reuse of contaminated sites. For these reasons, we oppose its approval.