In ratifying House Bill No. 6526, and most specifically the underpinning components behind Section 17, the Connecticut General Assembly has demonstrated that it's significantly stepping up its game in the brownfields arena by creating a new brownfields remediation and revitalization program.
 

This program would be implemented by the Connecticut Dept. of Economic and Community Development (DECD) with the involvement of the Connecticut Dept. of Environmental Protection (DEP). The new program looks to position Connecticut to attract increased economic investment in the return of the state’s brownfields to productive reuse.

To incentivize the expedited development of sustainable projects on Connecticut’s brownfields, Section 17 offers benefits that can be even more enticing than often scarce public money, particularly over the longer term. And Section 17 projects can still pursue public funding under other state programs of DECD, DEP and also the Connecticut Brownfields Redevelopment Authority (CBRA) within the Connecticut Development Authority (CDA). But public funding is not the focus of, or impetus behind, this new and innovative program.

In accepting a brownfield project as one of up to 32 projects added annually to the DECD program’s portfolio, a Section 17 eligible applicant may be relieved of liability to the state and third parties for off-site contamination. This eligible applicant must not be a party responsible for existing contamination. In addition, the transfer of a Section 17 site is not required to comply with Connecticut’s Transfer Act. The Transfer Act is otherwise triggered when there is a transfer of an establishment, which includes sites where there have been defined hazardous waste related activities.

What a Relief!
If there is continuing compliance with the project’s Section 17 brownfield investigation plan and remediation schedule, which includes public notice requirements, the eligible party would be relieved from liability for releases at and from the Section 17 site as long as the eligible party did not cause or contribute to the release. With payment of a fee, subsequent owners of a Section 17 site, who also meet the program’s applicant eligibility requirements, would also obtain liability relief.
 

The acceptance fee for the program would be 5% of the assessed value of the land. Half of this fee would be due within 6 months of acceptance, but in an effort to give added incentive to redevelop as quickly as possible, there would be a 10% reduction in this amount where there is remediation of the site within this six months.

There would also be a waiver of the second installment, where remediation takes place within four years of the site’s acceptance into the program. This second installment may also be reduced by twice the amount an eligible party elects to spend to complete off-site investigation of contamination. There would be no fee for municipal applicants, who can also nominate brownfield sites for inclusion in the program’s portfolio. Even where the municipality is not the applicant, it may request that DECD waive all or a portion of the applicant’s fee. Fees would be deposited into an existing state remediation fund.

Significantly, Section 17 does not foreclose the participation of eligible sites with viable or potentially viable responsible parties. Site “abandonment” is not a prerequisite. While responsible parties would not be eligible applicants, once a site is remediated under the program, liability relief for further on-site investigation and remediation may extend to a responsible party who was also the immediate prior owner of the site.

Broad-based input
Acceptance into the Section 17 portfolio will emphasize sites and projects, large and small and geographically diverse, that will create jobs, further a push for sustainable projects such as smart growth and transit-oriented developments, and spur increases in a community’s grand list. As urged by Rep. Jeffrey Berger, House Chair of the Commerce Committee, the new law reflects input from a broad universe of public and private sector brownfields stakeholders.
 

Following his election, Gov. Malloy announced that “Connecticut is open for business.” Even against the backdrop of the economic challenges posed by the two-year budget the Governor signed into law on May 4, 2011, hopes are high that the Section 17 program, with its liability relief and incentives for expedited redevelopment, will live up to the promise of the new law as how it appeared as the bill's heading: “An Act Concerning Brownfield Remediation and Development as an Economic Driver.”

Elizabeth Barton is a partner in the Hartford, Connecticut office of Day Pitney LLP, an East Coast law firm with nine offices from Boston to Washington, D.C.  She practices in the area of environmental and land use consultation, permitting and litigation and can be contacted at (860) 275-0371 or ecbarton@daypitney.com.