Brownfields Study Group Prepares Report

By Nancy Frank
University of Wisconsin-Milwaukee

In the last budget bill, the legislature and governor called for the formation of a brownfields study group to evaluate current law and regulation in Wisconsin and to identify additional steps to facilitate the redevelopment of contaminated brownfield properties. In April, I was appointed by Secretary George Meyer, Department of Natural Resources, to serve on the study group.

Since early summer, five subgroups representing a broad but knowledgeable set of stakeholders has been meeting to identify the remaining barriers to redevelopment or inadequacies of the current liability protections and financial assistance that may be reducing the effectiveness of state policy toward brownfield redevelopment. Subgroups formed around the issues of (1) area-wide groundwater cleanup approaches, (2) public outreach and education, (3) financial incentives for brownfield redevelopment, (4) local government liability and financial incentives, and (5) liability and voluntary cleanup. The subgroups have completed their work and are now preparing the final report, which is to be delivered to the Department of Administration by December 1.

I participated in most of the meetings of three of the subgroups: financial incentives, local government issues, and liability. Detailed minutes of the subgroup meetings are available on the internet at www.dnr.state.wi.us/org/aw/rr/general/bsg/bsg_1.html. Some of the key issues discussed at the meetings I attended are briefly discussed below.

A number of study group participants expressed concern the discovery of "solid waste" at a brownfields site triggers an additional set of regulations, NR 500, that are unnecessary and inappropriate. Participants described situations in which a brownfield, in virtually all respects indistinguishable from the kinds of sites routinely regulated under NR 700, get stigmatized as landfills. As one member of the group put it "any type of solid waste disposal area designation or deed restriction/notification will kill the project by rendering the houses [to be built on the cleaned site] unmarketable. The Liability subgroup discussed ways of improving the "interface" between NR 500 and NR 700. In addition, the group voted to recommend that the statutes be amended to give the Bureau of Remediation and Redevelopment jurisdiction over "solid waste landfills" that are really brownfields.

Among a wide range of liability issues discussed was interim protection from liability for those in the Voluntary Part Liability Exemption process (Wis. Stat. 292.15). Currently, the person who voluntarily undertakes cleanup of a brownfield site is required to clean up all contamination discovered to the satisfaction of the DNR. Consequently, if additional contamination is discovered in the course of cleanup, the voluntary party is responsible for the cleanup of the newly discovered contamination, and the costs of cleanup escalate. This uncertainty about cleanup costs continues to discourage brownfield redevelopment.

The committee discussed the possibility of granting the liability exemption at the time that the remediation plan is approved by the DNR. This "interim protection" would protect the part from liability for any subsurface conditions that are unrelated to the agreed site investigation and remediation, and are discovered prior to the time the remediation is required to be completed.

In order to protect the state Environmental Fund from an increase in claims related to the proposed interim liability protection, the committee also proposed that a party requesting the interim protection would be required to obtain a standard insurance policy for the interim period naming the voluntary party and the State of Wisconsin as the insured. Because the insurance policy we covering only a short time window, with full liability protection anticipated when the remediation plan is completed, the cost of such insurance should be fairly reasonable.

The Financial Incentives subgroup spent a substantial of time reviewing the programs that the state has provided for funding brownfield cleanups. One of the key issues addressed by the subgroup concerned the timing of ER TIFs. When the legislature created the Environmental Remediation TIF in 1997, it provided that the ER TIF can be established only after the remediation has been certified as complete by the DNR. This creates a financing gap for local governments, reducing the likelihood that local governments will use the ER TIF. Specifically, the local unit of government has to take the risk that the Joint Review Board will approve the ER TIF after local government has spent the money. The subgroup recommended that the ER TIF be created after the site investigation has been approved. In addition, the group recommended broadening the eligible costs that may be included in the ER TIF, particularly allowing for the payment of back taxes to make counties "whole." The subgroup also recommended that the law be amended to allow municipalities to claim eligible costs that it incurs, whether or not the municipality is the owner of the site.