Congressional Justifications for 1998 Budget Estimates

Community Planning and Development
Brownfields Redevelopment Program

Program Highlights

NA = Not Applicable

Summary of Budget Estimates

1. Summary of Budget Request

As part of the Administration's Brownfield Initiative announced in August 1996, the Budget proposes $25 million for the Brownfields Redevelopment program in 1998. This is the first of four annual funding requests, for a total of $100 million to be dedicated to this initiative between 1998 and 2001.

This program will make competitive economic development grants in conjunction with Section 108 loan guarantees for qualified brownfields projects. Grants would provide flexible use of funds for both economic development and environmental remediation, reflecting specific project needs, local decisions and funding availability from all sources. These grants would enable brownfields to be returned to productive uses that create jobs and to address the economic development needs of communities in and around such sites. In addition to HUD economic development grants, the Administration is also requesting $50 million for the Environmental Protection Agency (EPA) for grants to communities for site assessment and cleanup, grants to States to develop voluntary cleanup programs, and funds for EPA worker training program.

2. Changes From 1996 Estimates Included in 1997 Budget

Not applicable.

3. Changes From Original 1997 Budget Estimates

Not applicable.

Explanation of Increases and Decreases

The 1998 proposal of $25 million represents the first of four annual funding requests, for a total of $100 million to be dedicated to Brownfields redevelopment between 1998 and 2001.

Program Description and Activity

1. Legislative Authority. Economic Development Grants are authorized by Section 108(q) of the Housing and Community Development Act of 1974, as amended.

Brownfields Redevelopment Program

2. Program Area Organization. This program will make competitive economic development grants in conjunction with Section 108 loan guarantees for qualified brownfields projects. Grants would be used for environmental remediation and for other purposes to enable brownfields to be returned to productive, job-creating uses and to address the economic development needs of communities in and around such sites. Economic Development grants are used to enhance the security of Section 108 guaranteed loans or to improve the feasibility of proposed projects, and to support business development activities. Section 108 enables communities to borrow funds from the private market and repay loans over time. It is estimated that $25 million in grant funds will result in applications for up to $250 million in new section 108 loan guarantees.

a. Eligible Recipients. Eligible recipients include Community Development Block Grant (CDBG) entitlement communities and non-entitlement communities.

b. Allocation of Funds. Grants will be made on a competitive basis in accordance with Section 108(q) selection criteria, including: (1) level of distress in the community to be served and in the jurisdiction applying for the assistance; (2) financial need for the assistance; (3) quality of the proposed plan and capacity of the applicant; and (4) extent to which the applicant is operating a brownfields program and is working with appropriate environmental regulatory agencies. Priority will be given to those projects located in designated Empowerment Zones or Enterprise Communities. The grant process will coordinate the Department's efforts with those of the EPA, reflecting the joint partnership goal to restore Brownfield sites to safe and productive uses.

c. Eligible Activities. Eligible brownfields redevelopment activities are CDBG-eligible activities that support the cleanup and economic redevelopment of targeted brownfield sites. These include: (1) acquisition of property; (2) clearance, demolition, removal and rehabilitation of buildings and improvements; (3) rehabilitation of buildings or construction of real property improvements carried out by public or private nonprofit organizations; (4) assistance to private, for-profit entities for economic development projects; (5) infrastructure improvements, including construction, reconstruction or installation of public and other site improvements; and (6) the investigation and cleanup of environmental contaminations in connection with any of these eligible activities.