On February 17, President Obama signed the $789 billion American Recovery and Reinvestment Act (H.R. 1) into law, following final Congressional passage. House and Senate conferees moved with considerable, and unusual, speed to finalize the stimulus bill—reaching agreement on February 13, despite considerable differences in the two versions.

The agreement came less than three days after delicate Senate negotiations spearheaded by moderate Senate Republicans ensured passage. The total was less than the $819 billion in the House bill, and the $838 billion in the Senate version. Amendments directly related to brownfields—including tax credits for cleanup and expanded BEDI funding—fell by the wayside. All in all, the stimulus package has significant potential to help public and private stakeholders carry out brownfield strategies.

State, local, and community-based brownfield strategies are poised to tap into a number of funding provisions for support—if they position their projects in the right way. Following is a recap of key elements of the stimulus—direct and indirect—that might be linked with brownfield efforts. In each case, final funding is identified, and original House and Senate proposals are listed for reference. Any specific criteria or considerations relevant to brownfields are also noted.

Brownfields - additional funding for assessment and cleanup; cost-share requirements waived

FINAL CONFERENCE AMOUNT -- $100 million

• House amount -- $100 million
• Senate amount -- $100 million

Final language suggests that EPA can make these new brownfield awards to fund "quality proposals" submitted under competitions held within the past 18 months - this would include the FY2008 brownfield funding cycle.

Superfund - additional funding for cleanup, limited to Superfund sites

FINAL CONFERENCE AMOUNT -- $600 million

• House amount -- $800 million
• Senate amount -- $600 million

LUST - additional funding for Leaking Underground Storage Tank trust fund, for cleanup of petroleum leaks; state matching requirements waived

FINAL CONFERENCE AMOUNT -- $200 million

• House amount -- $200 million
• Senate amount -- $200 million

Programs that could help remediate and/or redevelop brownfields:
The final version of the American Recovery and Reinvestment Act includes funding for activities that could be linked to brownfields, or support brownfield projects by providing resources for infrastructure and related investments that will make brownfield properties more attractive to reuse, including:

State clean water and drinking water revolving loan funds . Additional capital, through the state and tribal assistance grant program, for water quality-related construction and improvement projects.

• Potential brownfield connection -- communities in some states have used both RLFs creatively to meet brownfield cleanup needs at sites and facilities that affect water quality.

FINAL CONFERENCE AMOUNT -- $6 billion: $4 billion for clean water RLFs, and $2 billion for drinking water RLFs

• House amount -- $8 billion
• Senate amount -- $6 billion

The final agreement included some key provisions affecting how funds can be spent:

• Stimulus funding priority must go to projects ready to proceed to construction within 12 months, and RLF funds not under contract or construction within 12 months of enactment (i.e., by February 16, 2010) will be reclaimed and reallocated;
• At least 20 percent of the stimulus RLF funds must go to projects addressing green infrastructure, water and energy efficiency, or innovative water quality/related improvements (unless states have no such projects in line); and
• Waives the mandatory 20 percent match for these funds.

The final agreement also included $1.38 billion in loan and grant authority for rural water and waste disposal projects. This will support $2.82 billion in loans, and $968 million in grants to small communities to address water and sewer needs, which could potentially be linked to industrial park redevelopment or other brownfield needs.

Neighborhood Stabilization Program -- additional funding for HUD's new NSP, authorized as part of the subprime mortgage rescue legislation last summer

• Potential brownfield connection -- in addition to some local capacity building, NSP funds can be used for a range of revitalization efforts that could include key brownfield activities: The purchase, management, and/or resale of abandoned properties, demolition of blighted properties, redevelopment of vacant or demolished properties, or establishment of land banks for foreclosed homes and residential properties.

FINAL CONFERENCE AMOUNT -- $2 billion

• House amount -- $4.1 billion
• Senate amount - zero

Community Development Block Grants -- additional resources for HUD's CDBG program, for community and economic development projects

• Potential brownfield connection -- CDBG is a mainstay in many local brownfield financing strategies, and its effectiveness as a brownfield project financing tool is well documented.

FINAL CONFERENCE AMOUNT -- $1 billion, distributed by existing CDBG formula

• House amount -- $1 billion
• Senate amount - zero

Rural development -- additional grant and loan funding to support rural development/ business and industry projects, as well as for facilities such as for healthcare, education, fire and rescue, and community centers

• Potential brownfield connection -- with appropriate outreach and education, brownfield sites could become prime targets for such facilities; using centrally located, abandoned properties within small town centers would achieve several key goals.

FINAL CONFERENCE AMOUNT -- $130 million for facilities, to support $1.234 billion in loans and grants; $150 million for business loans and grants, to support $3 billion in projects

• House amount -- $200 million for facilities, $100 million for B&I
• Senate amount -- $127 million for facilities, $150 million for B&I

Economic development assistance through EDA -- to address long-term economic distress and dislocation in areas suffering from job losses due to corporate downsizing and other economic dislocations

• Potential brownfield connection - EDA has a history of participating in local brownfield efforts, and brownfield projects could probably compete well for this new funding.

FINAL CONFERENCE AMOUNT -- $150 million, with $50 million eligible to be transferred to regional economic commissions

• House amount -- $250 million
• Senate amount -- $150 million

The final agreement requires EDA to detail its intended allocation of funds within 60 days of enactment, by April 18.

Weatherization assistance -- grants for structural weatherization activities, aimed at houses and residential units.

• Potential brownfield connection -- a small portion of which might deal with contaminant issues (i.e., insulation) in older structures as part of weatherization upgrades.

FINAL CONFERENCE AMOUNT -- $5 billion

• House amount -- $6.2 billion
• Senate amount -- $2.9 billion

Energy efficiency and conservation block grants - funded for the first time, this program will help states and communities make investments that make them more energy efficient and reduce carbon emissions for a range of system construction or retrofit activities

• Potential brownfield connection - activities could be undertaken on brownfield sites, for individual structural upgrades as well as for activities such as installation of solar panel farms on brownfields.

FINAL CONFERENCE AMOUNT -- $3.2 billion

• House amount -- $3.5 billion
• Senate amount -- $4.2 billion

The final agreement stipulates that $400 million of the total will be awarded competitively to individual applicants.

Community Development Financial Institutions - additional resources for this program, administered by the Treasury Department, to assist a range of community-based project financing in distressed areas

•  Potential brownfield connection - CDFI's emphasis on distressed areas can overlap with brownfield locations

FINAL CONFERENCE AMOUNT -- $100 million

• House amount -- zero
• Senate amount -- $250 million

Small Business Administration - funding to expand some lending programs, support increased guarantee activity, and reduce fees

• Potential brownfield connection -- facilitating small business lending could be useful to move brownfield projects along; especially given more stringent due diligence requirements.

FINAL CONFERENCE AMOUNT -- $636 million for the "Business Loans Program Account;" $6 million for increased activity under the micro-loan program, and the balance for fee reductions and new guarantee authorities

• House amount -- $430 million
• Senate amount -- $621 million

Administrative provisions in the final agreement could be beneficial to community-based brownfield efforts. The final bill intends to increase guarantee activity through SBA's flagship Section 7(a) loan guarantee program, as well as the Section 504 program, by reducing or eliminating fees on loans processed through those programs. Generally administered by CDCs, the Section 504 in particular has proven to be a useful tool in community development projects linked to brownfield reuse efforts. The recovery act also:

• authorizes the establishment of an SBA secondary market guarantee authority, to provide a federal guarantee for pools of first lien 504 loans sold to third-part investors—a device which should expedite capital flow and make Section 504 a more attractive financing option;
• did not include Senate language raising the maximum 7(a) loan amount.

Tax code provisions of potential use to brownfield cleanup and reuse strategies:
The final legislation included several tax code provisions that private developers could use and local governments and communities could promote to achieve brownfield revitalization objectives:

• Increased authorized allocations of New Markets Tax Credits—from the $3.5 billion distributed in 2008, and the $3.5 billion for 2009, as authorized in the Wall Street rescue legislation, to $5 billion for 2008 and $5 billion for 2009. (The additional allocations for 2008 are to go to unsuccessful applicants for that year's round, or applicants who did not receive their full request.)

Potential brownfield connection -- New Markets Tax Credits, with their focus on stimulating investment in distressed areas, have been used in a growing number of communities to support brownfield-related community development and housing activities, and these new allocations will help more cities further these goals.

• Increased the level of new clean renewable energy bonds (authorized last year as part of the Wall Street rescue legislation)—from $800 million to $1.6 billion.

Bonding authority would be allocated in thirds, to governmental bodies, public power providers, and cooperative electric companies, to support renewable energy facilities. The federal subsidy would take the form of federal tax credits to the bond buyers, in lieu of interest, which means that the issuers would enjoy de facto zero percent borrowing.

Potential brownfield connection -- Bond proceeds could be used for a range of activities related to renewable energy facilities, presumably including placement of those facilities on brownfield sites, which would need to be appropriately prepared for this type of new use. As more communities explore new energy-related uses on brownfield sites, these bonds could help facilitate financing of these facilities.

• Increased the level of new energy conservation bonds, a new category of private activity bonds, from $800 million to $3.2 billion.

Authority to issue these bonds would be allocated to state and local governments for conservation purposes, based on population; states are directed to distribute a portion of their share to their larger cities, with greater than 100,000 people, based on their relative percentage of a state's population.

Potential brownfield connection -- The new energy conservation bonds are intended to finance a range of activities related to energy conservation—projects to reduce energy consumption in publicly owned buildings, implement green community programs, promote rural development efforts that include electricity from renewable sources, encourage mass commuting facilities, and support green building technology demonstration projects. Many of these activities could be integrated with brownfield reuse strategies.

• Authorizes new categories of government bonds--$10 billion in taxable "recovery zone economic development bonds" and $15 billion in tax-exempt "recovery zone facility bonds"—to promote private development activity and related infrastructure and public facility construction in distressed area "recovery zones" to be designated by state or local issuer.

States will receive an allocation of these bonds, in proportion to their rate of employment decline during 2008, to reallocate according to the same criteria to their counties and large (100,000+ population) municipalities; each state is assured at least 0.9 percent of the total of each bond type. Areas to be designated as recovery zones must have significant poverty, unemployment, general distress, or home foreclosures; they can include areas already federally designated as empowerment zones, renewal communities, or areas in economic decline because of a base closing. Bonds must be issued by January 1, 2011.

Potential brownfield connection - The common overlap of "distressed area" and brownfield location, and the ability to use proceeds of these new bonds for a range of public and private purposes, could make these bonds a useful addition to brownfield financing strategies.

What's next?
With passage secured, the task now turns to implementation. Over the coming weeks and months, agencies will define priorities, lay out rules, and oversee the distribution of funds. From a brownfield standpoint, it will be up to state and local leaders to determine how to fit their brownfield project priorities into broader recovery act requirements.

Charlie Bartsch is Senior Fellow with ICF International