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Environmental Restoration Program FAQ

1996 Clean Water / Clean Air Bond Act
Environmental Restoration Projects - Title 5


1. How much money does the Clean Water/Clean Air Bond Act authorize for the investigation and cleanup of Environmental Restoration Projects sites?

The Clean Water/Clean Air Bond Act authorizes $200 million for the funding of the investigation and cleanup of Environmental Restoration Projects.

2. How can I get more information about this program?

For more information on the Environmental Restoration Program (ERP) contact staff in the region within which you are located.

Eligibility - Applicant

3. Who is eligible for an Environmental Restoration Project grant?

A municipality is eligible for an Environmental Restoration Project grant if it is the owner of a property (ownership must be demonstrated before receiving the grant but not necessarily at the time of application) which may be contaminated with hazardous substances or petroleum. However, there are two important limitations. First, a municipality is not eligible if it was responsible for the hazardous substance or petroleum contamination. Second, a municipality is not eligible if the property is listed as Class 1 or 2 on the New York State Registry of Inactive Hazardous Waste Sites.

4. How is municipality defined?

Municipality means a local public authority or public benefit corporation, a county, city, town, village, school district, supervisory district, district corporation, improvement district within a county, city, town or village, or Indian nation or tribe recognized by the state or the United States with a reservation wholly or partly within the boundaries of New York State, or any combination of the above. For the purposes of this title, the term municipality includes a municipality acting in partnership with a community based organization.

5. How is a "Community Based Organization" (CBO) defined?

A CBO means a not-for-profit corporation, exempt from taxation under section 501(c)(3) of the internal revenue code whose stated mission is promoting reuse of brownfield sites within a specified geographic area in which the CBO is located. The CBO must have twenty-five percent or more of its board of directors residing in the community in such area; and represent a community with a demonstrated financial need. By statute, a CBO does not include any not-for-profit corporation that has caused or contributed to the release or threatened release of a hazardous waste or petroleum from or onto the brownfield site, or any not-for-profit corporation that generated, transported, or disposed of, or that arranged for, or caused the generation, transportation, or disposal of hazardous waste or petroleum from or onto the brownfield site. This definition shall not apply if more than twenty-five percent of the members, officers or directors of the not-for-profit corporation are or were employed by or receiving compensation from any person responsible for a site under title thirteen of article twenty-seven of the Environmental Conservation Law or article twelve of the Navigation Law or under applicable principles of statutory or common law liability.

6. What if the Site Investigation finds that the contamination was caused by the municipal applicant? (e.g., the municipality applies for a grant and during the investigation it finds that the petroleum contamination was from city-owned vehicles or tanks)

The municipality would lose its grant and its liability limitation in this situation since the law excludes such municipalities from being eligible.

7. Is property co-owned by a municipality and a private entity eligible for State assistance?

If the private entity is a not-for-profit organization the municipality would be eligible. Otherwise, the municipality is not eligible.

8. Does the ownership have to be in fee title?

The ownership must be in fee title, or the municipality must qualify as a "temporary owner" as a result of foreclosure on a tax lien, as described in ECL 56-0508.

9. If one form of municipality acquires title from another municipality that is the site's contaminator, is the municipality presently owning the site eligible for State assistance? (e.g., City A contaminates a site and then conveys it to City A's IDA.)

No. In the above example, City A would not be allowed to use its IDA as a way to circumvent ECL 56-0502.

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Eligibility - Site/Project

10. If the city-owned property has a privately owned parcel in the middle, is the project eligible?

Unless the private owner were a not-for-profit organization, the city would have to exclude the private parcel from its project's application.

11. If the property is listed as a Class 2 on the Registry of Inactive Hazardous Waste Disposal Sites after the investigation is carried out under the grant but before a grant for remediation is made, is the remediation project eligible?

No. The law prohibits grants for Class 2 Registry Sites. However, the municipality would receive the liability limitation by virtue of completing the investigation and would not be obligated to remediate the property, as long as the property was not used. The Class 2 property might then be cleaned up under the State Superfund Program.

12. If hazardous substances disposed of by a municipality are distinct from and not intermixed with other hazardous substances found at a property, is the site eligible for State assistance for purposes of removing the rest of the contamination?

Yes, if the municipality completely removes its hazardous substances from the site before applying for State assistance.

13. What if the property is made Class 2 before the investigation grant is awarded but after the municipality took title?

If the municipality takes title, then applies for an investigation grant, and based on information in that application the property must become a Class 2, the DEC will ensure that the grant is awarded, within funding limitations, before the property becomes a Class 2. In this way, we will not penalize an innocent municipality. If, however, a municipality takes title and the property becomes a Class 2 before the municipality applies for a grant, the municipality is not eligible for this program.

14. Would the investigation of a tire dump be eligible?

The removal/proper disposal of the tires would not be eligible. However, the investigation of a tire dump property would otherwise be eligible.

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The Grant Process

15. What would the municipality be required to do to receive an Environmental Restoration Project grant?

A municipality would be required to enter into a contract with the State to expeditiously investigate or remediate an eligible property, implement a public participation plan, place an environmental easement on the property, if needed and comply with the terms of the contract.

16. How would a municipality apply for these funds?

The municipality would complete the application form and all associated materials provided by the Department. As part of the application, the municipality must identify the environmental benefit to be derived from the project and either the economic benefit also to be derived or the public recreational use to which the property will be placed once it is remediated.

17. Is there any limit to how many grants may be applied for by a single municipality?

No. A municipality may apply for as many grants as it has brownfield sites. However, the field work for a project must be initiated in accordance with the Department-approved schedule. If field work is not so initiated then the project will be removed from the approved list and the municipality must reapply for that project.

18. Can a municipality apply for one grant for multiple sites?

Yes. In select cases, when in the opinion of the DEC there is a technical basis for an area wide approach, the municipality may include multiple sites under one grant application. This will typically be considered if the sites are contiguous or in close enough proximity for an area wide groundwater remedy to be considered. However, the municipality should consider the benefits available under the newly enacted Brownfield Opportunity Areas Grants Program.

19. How are grant applications approved?

Complete applications for investigations which satisfy the four eligibility criteria described in ECL 56-0505 will be approved on a first-come, first-served basis. Generally, complete applications for remediations will be evaluated in groups based on when they are received. The Department will score each application according to the Environmental Restoration Project prioritization criteria. If the project's score meets or exceeds the minimum score required for eligibility, and there are sufficient funds, then the project will be approved. If available funds are insufficient, the Department will approve the complete applications in accordance with their rank. Once funds become available, complete applications will be reconsidered for funding.

20. How would the State prioritize the applications received for brownfield projects?

Projects will be prioritized based on the benefit to the environment, the economic benefit to the State, the opportunity for the property to be used for public or recreational purposes, and the opportunity for other funding sources to remediate such property.

21. Does the municipality which applies for the grant have to demonstrate how it will fund the project?

A municipality does not have to demonstrate how it will fund the project. A municipality does, however, have to disclose all other funding sources available for remediation of the property including, but not limited to, enforcement actions against responsible parties and the existence of private parties willing to remediate the property using private funding sources. Recoveries from responsible party sources will be used as offsets against receipt of state assistance.

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Allocation of Funds

22. How will Bond Act funds be allocated?

The Bond Act will provide grants for reimbursement of up to 90% of the eligible on-site costs and 100% of the eligible off-site costs for the investigation or cleanup of a brownfields site. While most cleanup costs will be reimbursed at the full percentage of the eligible costs, indoor asbestos abatement and demolition of structures will usually be reimbursed at 50% unless that material must be disposed in a RCRA "C" landfill.

23. Can a municipality apply for less than a 90% grant?

Yes. The law allows for reimbursement of up to 90% of the on-site costs and 100% of the off-site costs. Therefore, if a municipality requests less than the full percentage, we would accommodate it.

24. Can the municipality fund its 10% of on-site costs with federal or state grants or private donations?

Yes. Private monies received for a property or project can be leverage to pay the municipal share, except for responsible party payments. Responsible party payments are subtracted from the eligible costs before State assistance is calculated.

25. Can grant money be used to pay a municipality's technical staff (in-house)?

Yes. This type of work is called "force-account work" and is eligible providing it is approved by DEC before the work begins and it can be done cost-effectively and timely.

26. Would State assistance be provided to an eligible municipality to investigate/remediate a site that is the subject of an existing consent order or other enforcement action for a third party to investigate/remediate the site?

State assistance will cover only the work that the existing obligation will not cover.

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Clean Up Standards

27. What cleanup standards would be applied to these brownfield cleanups?

The remediation objective of brownfield cleanups would meet the same standard of protection that applies to the remedial actions taken under the State's Inactive Hazardous Waste Disposal Site Remediation program described in 6 NYCRR 375-1.10 ("Remedy Selection").

28. The guidance requires environmental easements as appropriate. Does this mean that a level of remediation less than unrestricted human exposure is acceptable?

Since we are following 6NYCRR 375-1.10, we will require an evaluation of whether it is feasible to cleanup to unrestricted use of the property. If it is not feasible to cleanup to that level, then environmental easements could be required and a higher cleanup level may be allowed based on feasibility.

29. Is petroleum considered a hazardous substance for the purpose of brownfield remediation and if so, must it follow the procedures applied to hazardous waste?

Yes. The term "hazardous substances" is defined in the Bond Act legislation (ECL 56-0101.11) as "substances found on the list of substances hazardous to the public health, safety or the environment promulgated pursuant to article 37 of this chapter and petroleum, as that term is defined in subdivision fifteen of section one hundred seventy-two of the navigation law." The cleanup requirements are also found in the Bond Act (ECL 56-0505.3) which states that the cleanup "shall meet the same standard for protection of public health and the environment that applies to remedial actions undertaken pursuant to section 27-1313 of this chapter." The law does not differentiate between petroleum and non-petroleum so they must follow the same approach.

30. Can the municipality sell the property before the cleanup is done?

Yes. However, the property cannot be used for any new purpose until the cleanup is complete on the property.

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Public Participation

31. Is public participation required?

Yes. A municipality is required to prepare and implement a public participation plan prior to remedial activities at a property. This includes communication between the public and municipality prior to the selection of a course of action, disclosure of information, public notice of the availability of a draft remedial plan, a 45-day comment period, technical assistance, and a public hearing if substantive issues are raised.

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SEQRA Requirements

32. Is a municipality required to comply with the State Environmental Quality Review Act (SEQRA) when applying for a grant for an investigation of a property?

No. If a municipality is applying for a grant to undertake an investigation, then the provisions of SEQRA do not apply. Data collection and research of properties are Type II actions (6NYCRR Section 617.5(c)(18)) and, as such, are not subject to the procedural requirements under SEQRA.

33. Is a municipality required to comply with SEQRA when applying for a grant for a remediation of a property?

Yes. In order for a municipality to undertake and/or fund an action, it must comply with the provisions of SEQRA. DEC must comply with SEQRA prior to approving any remediation grants. Since the issues involving brownfield cleanup and redevelopment are primarily local in nature, it is strongly recommended that the municipality assume lead agency status on an action and coordinate review of the action with all involved agencies (including DEC). It is also strongly recommended that coordinated review of an action be conducted and a determination of significance made prior to submitting an application for a grant. Before the Department can issue a grant for remediation, the SEQRA process must be completed. This means that an environmental assessment must be conducted of the "whole action", by the lead agency, i.e., the remediation and redevelopment. If the environmental assessment results in a negative declaration, SEQRA responsibilities end notwithstanding appropriate publication requirements. If a positive declaration is issued by the lead agency, then a Final Environmental Impact Statement and Findings Statements must be prepared before the action can go forward and before DEC can issue the grant. SEQRA determinations must be submitted as part of a complete application.

34. Why are remediation grants subject to SEQRA requirements since it will complicate and slow down the program?

As stated in the previous response, remediations are not exempt from SEQRA compliance. An environmental assessment of cleanup with no known redevelopment at the time of application could result in a negative declaration since the cleanup should be a net positive benefit to the environment. Redevelopment of the property would be subject to SEQRA with or without this grant program.

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Ineligible/Eligible Costs

35. What type of costs would be eligible for State reimbursement?

Eligible costs include the costs of appraisal, surveying, engineering and architectural services, plans and specifications, consultant, and legal services which are necessary for conducting the approved project, and which are reasonable and properly documented, as determined by the State.

36. What type of costs would be ineligible for State reimbursement?

In addition to any limitations imposed by State Finance Law, the following costs generally would not be eligible for State reimbursement: 1)lead abatement projects, 2) costs to redevelop the property that are not necessary to remediate the property; and 3) costs incurred prior to State approval of an investigation application.

37. When would eligibility of costs begin?

Only those costs incurred after State approval of the investigation application are eligible except for preapplication costs associated with storage tank registration, closure, and disposal activities, if those costs are incurred on or after June 6, 1996.

38. Would the interest on bonds sold by a municipality to perform a brownfield investigation or cleanup be an eligible cost?

No. All costs associated with the approval, preparation, issuance and sale of bonds issued by the municipality in support of the project, together with the interest on such bonds or other form of indebtedness, are not eligible for State assistance.

39. Would the costs of redeveloping a property for reuse be eligible for State reimbursement?

No, the cost of redeveloping a property for reuse would not be eligible for State assistance under this program. However, it is possible that a municipality could recover its redevelopment costs, for example, upon recovery of money from federal payments, responsible or private party payments, or the sale or lease of the property if the total recoveries exceed the environmental restoration project cost.

40. Would property acquisition costs be eligible for reimbursement?

No. A municipality's costs to acquire a property are not eligible costs under the Bond Act. Only costs related to the investigation and remediation of a property are eligible for reimbursement from the State. However, it is possible that a municipality could recover its acquisition costs, for example, upon recovery of money from federal payments, responsible or private party payments, or the sale or lease of the property if the total recoveries exceed the environmental restoration project cost.

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Cost Recovery

41. Would the municipality be required to recover any of the grant costs for the State?

The municipality would not be required to recover any of the State's costs but may be asked to assist the State in such recovery by providing information gathered as a result of the project. In the event a municipality does recover monies from the responsible parties, the State would be required to recalculate the State assistance share and the municipality would have to reimburse the sate for the difference.

42. If the property was to be sold or leased by the municipality what obligations does the municipality have to the State, if any?

If the municipality sells or leases the property, it would first offset from such proceeds any taxes owed to the municipality upon acquisition, and its costs for the environmental restoration project. Any surplus proceeds would be used to reimburse the State for the grants provided under the Program. Any remaining proceeds would be retained by the municipality.

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Liability Limitation

43. Does the municipality benefit from a release from liability for participating in this program?

Yes, during the municipality's compliance with the project's requirements to the State's satisfaction. A municipality shall have the benefits identified in ECL 56-0509 regarding the liability limitation beginning the date of the department's approval of the State assistance application. However, the property cannot be used for any new purpose until the remediation of the property is completed to the Department's satisfaction.

44. When does ECL 56-0509's liability protection start?

Liability protection starts when the State approves the application. However, if the municipality fails to complete the work to the State's satisfaction, the protection afforded by ECL 56-0509 is suspended until it does complete the work.

45. Can a municipality default on a State Assistance Contract without becoming liable for the property's environmental problems?

No. If a municipality defaults on a State Assistance Contract, it would assume the liability associated with ownership of the property.

46. Ten years after a cleanup is complete, a successor claims the contamination found is historical. Who has the burden of proof to show it was historical?

The successor, per ECL 56-0509.1.b.

47. What is the release from the Federal Government?

There is currently no release from the Federal Government that comes to the municipality because it successfully undertook a project.

48. Will the State assistance program provide CERCLA §113 contribution protection?

No. CERCLA §113 contribution protection would require a consent order in addition to a State Assistance Contract.

49. If a municipality receives a grant for an investigation, is it obligated to remediate the property in order to be indemnified from the State?

No. A municipality which receives a grant for an investigation will receive ECL 56-0509's liability protection provided it completes the investigation to the State's satisfaction and in accordance with the State Assistance Contract. However, the property may not be used for any new purpose until the remediation is implemented to the Department's satisfaction.

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