By Brian Chappell, USCM intern
March 5, 2007

The House of Representatives passed legislation on February 27 with a bipartisan voice vote on Brownfields Redevelopment Enhancement Act (HR 644). Local governments no longer have to obtain federal dollars to redevelop contaminated Brownfield sites if the legislation clears Congress.

Under terms of the legislation, local agencies will no longer have to make certain financial commitments to receive grants from the Department of Housing and Urban Development (HUD) to remediate brownfields.

To be eligible for grant funds now cities and states must be willing to pledge Community Development Block Grant (CDBG) funds as partial collateral for a loan guarantee under “section 108” of the Housing and Community Development Act of 1974. Many Representatives feel that this is a barrier to many cities that are unable or unwilling to pledge such block grant funds as collateral.

By de-linking grants for Brownfields development from “section 108” community development loan guarantees and the related pledge of Community Development Block Grant funds, more communities will have access to funding for redevelopment of brownfield sites.

The legislation would provide cities and towns with more flexibility for Brownsfield development, increased accessibility to Brownfields Redevelopment funds, and greater capacity to coordinate and collaborate with other government agencies, by providing additional incentives to invest in the development and redevelopment of brownfields sites

The bill “gives local governments the right to use federal money to clean up messes left behind by the private sector,” said Barney Frank, (MA), cosponsor of the bill and chairman of the House Financial Services Committee.

Bill sponsors say that the measure would spur 550,000 new jobs and generate $2.4 billion in new tax revenue for local governments. Under the old system it was too much of a deterrent for local governments to give up Community Development Block Grant money as collateral. Liability concerns and lack of dollars have long made it difficult for cities and town to redevelop brownfields sites, which are: real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. Cleaning up and reinvesting in these properties takes development pressures off of undeveloped, open land and both improves and protects the environment.

By redeveloping the estimated 450,000 to 1 million brownfields sites nationwide, cities and town hope to cash in on tax revenue generated from use of the land.

The measure is a “powerful economic development control. This bill is precisely the kind of leveraging tool that we must utilize to spur development in places where development costs are uncertain,” said Rep. Maxine Waters (CA), Chair of the Financial Services Subcommittee on Housing and Community Opportunity.  “Any federal tool to leverage private investment must be preserved, particularly in this pay-as-you-go economic environment”, she said.

The Small Business Liability Relief and Brownfields Revitalization Act (PL 107-118), signed into law in 2002, authorizes $250 million to expedite brownfields redevelopment. President Bush requested $162 million for the program in FY 2008.