fuds: uncharted territory in brownfields remediation and redevelopment
DESCRIPTION
Presentation at the ABA, Section of Environment, Energy & Resources Fall Meeting 2009TRANSCRIPT
FUDS – UNCHARTED TERRITORY IN BROWNFIELDS REMEDIATION AND REDEVELOPMENT
Formerly Used Defense Sites (“FUDS”)
The Department of Defense (“DoD”) is responsible for environmental restoration of properties that were formerly owned by, leased to or otherwise possessed by the United States and under the jurisdiction of the Secretary of Defense.
The Army is the executive agent for the program and the COE manages and directs the program's administration.
FUDS Inventory At the start of Fiscal Year 2009, the Army Corps of Engineers
listed 4,610 FUDS Projects in the Continental United States.
The State of Maryland has 64 FUDS Sites.
The City of Baltimore has 5 FUDS Sites. Baltimore AAF Baltimore Adjutant General depot Fort Armistead /Hawkins Point Fort Holabird Johns Hopkins University Laboratory
Baltimore County has 18 FUDS Sites.
FUDS Remediation Funding Process The FUDS Program is part the Defense
Environmental Restoration Program (“DERP”) and remediates properties consistent with the CERCLA and the NCP.
FUDS is funded through annual Congressional appropriations.
Funds allotted to FUDS sites based on the degree of risk each site’s contaminants pose to human health and the environment relative to other sites in the FUDS Program.
FUDS Remediation Funds Barrier For Fiscal Year 2007, annual funding for the
FUDS Program was $262.1 Million in FY07, which was consistent with the annual funding in previous years.
In comparison, DoD estimates the cost of completing the remaining investigation and cleanup of FUDS properties to be $16.272 Billion.
Result: Despite DOD liability, FUDS Site remediation languishes .
Financing FUDS Remediation
Financing Sources to Remediate and Redevelop FUDS Sites Financing Approaches or
Incentives Traditional
Emerging
Other Incentives
Traditional Financing Approaches EPA Brownfields Program
Assessment, Cleanup, and Job Training Grants
Revolving Loan Funds
Tax Credits Federal or State
Traditional Financing Approaches Stimulus Funds
The Emergency Economic Stabilization Act of 2008 (“2008 Stimulus Bill”). Public Law 110-343
The American Recovery and Reinvestment Act of 2009 (“2009 Stimulus Bill”). Public Law 111-5.
Public/Private Partnerships Private Developer Funding Environmental
Oversight & Assurance Developer Assistance with Environmental
Remediation costs
Emerging Financing Approaches For FUDS Sites FUDS Negotiated Settlement
In FY 2007, the estimated “cradle to grave” cost of the United States to address residual environmental contamination at FUDS sites was approximately $16.272 billion dollars. For FY 2007, Congress appropriated $262.1 million to address all FUDS sites for that year.
United States Army Corps of Engineers ER 200-3-1 Formerly Used Defense Sites
(FUDS) Program Policy Chapter 5 Potentially Responsible Party
Process
FUDS Negotiated Settlement FUDS Negotiated Settlement Process (Cont’d) The process to achieve settlement with
USACE is necessarily site-specific but some of the common steps for each site include:
Identification of appropriate site for settlement;
Negotiation of a preliminary pro rata percentage of responsibility between the parties based on equitable factors;
Development of a remedial approach, implementation plan and Cost-to-Complete;
FUDS Negotiated Settlement FUDS Negotiated Settlement
Process (Continued) Development of a Stakeholder Action Plan; Technical discussions with the USACE
District office regarding scope of any remaining investigation and remedial alternatives and their associated costs;
Settlement negotiations with the assigned Department of Justice Attorney and/or USACE District Counsel;
Referral of Settlement Demand by USACE chain-of-command;
Assignment of Department of Justice Attorney;
FUDS Negotiated Settlement • FUDS Negotiated Settlement Process (Continued) Implementation of all or portions of
Stakeholder Action Plan, as needed; Finalization of Settlement in the form of a
judicially ordered Consent Decree; Finalization of state Administrative Orders
on Consent; Implementation of Cost-to-Complete; Five-year reviews; and Closure.
FUDS Cost Recovery Litigation FUDS Cost Recovery Litigation
CERCLA 107(a) Cost Recovery Claim United States v. Atlantic Research , 551
U.S. 128 (2007) CERCLA 107(a) allows cost recovery by a
private party that has itself incurred cleanup costs.
One PRP may sue anther to recover response costs incurred in voluntary cleanup.
Site owners need not wait for EPA enforcement action to institute a CERCLA 113(f) Contribution Action
FUDS Cost Recovery Litigation FUDS Cost Recovery Litigation (Cont’d)
Next step following unsuccessful FUDS Negotiated Settlement
Litigation preparation Remedial Determination/Implementation
Schedule Coordination with State and Federal
Regulators Demand on United States through COE Assembling costs and evaluation of
liability
FUDS Cost Recovery Litigation
FUDS Cost Recovery Litigation (Cont’d) CERCLA 107(a) Cost Recovery Action
Elements Defenses Objectives/Goals
Recovery of past costs expended for necessary and consistent (NCP) response costs
Secure judicial determination allocating CERCLA liability among the parties
FUDS Cost Recovery Litigation FUDS Cost Recovery Litigation
(Cont’d) Objectives/Goals (Continued) Secure a declaration pursuant to Section
113(g) of CERCLA of the United States’ liability for future responses costs incurred in remediating the FUDS Site, including: Judicial determination of United States’ pro
rata share for future response costs
Other Possible FUDS Incentives Obtaining Mineral Rights Mineral interests generally reserved on conveyance
by United States to private ownership. Allowed under Section 209 of the Federal Land Policy
Management Act. Application for Minerals is Made to Bureau of Land
Management May Act as Inducement to Prospective Redeveloper
Allows for Transfer of Complete Title (i.e. Surface and Subsurface)
May allow for the exploitation of any potential underlying value of the minerals
End-use may determine the real “value” of the minerals (site-specific analysis)