FUDS: Uncharted Territory in Brownfields Remediation and Redevelopment


Published on

Presentation at the ABA, Section of Environment, Energy & Resources Fall Meeting 2009

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

FUDS: Uncharted Territory in Brownfields Remediation and Redevelopment

  1. 1. FUDS – Uncharted Territory in Brownfields RemEdiation and Redevelopment<br />
  2. 2. Formerly Used Defense Sites (“FUDS”) <br />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. <br />The Army is the executive agent for the program and the COE manages and directs the program&apos;s administration. <br />
  3. 3. FUDS Inventory <br />At the start of Fiscal Year 2009, the Army Corps of Engineers listed 4,610 FUDS Projects in the Continental United States. <br />The State of Maryland has 64 FUDS Sites.<br />The City of Baltimore has 5 FUDS Sites.<br />Baltimore AAF<br />Baltimore Adjutant General depot<br />Fort Armistead /Hawkins Point<br />Fort Holabird<br />Johns Hopkins University Laboratory <br /> Baltimore County has 18 FUDS Sites.<br />
  4. 4. FUDS Remediation Funding Process <br />The FUDS Program is part the Defense Environmental Restoration Program (“DERP”) and remediates properties consistent with the CERCLA and the NCP.<br />FUDS is funded through annual Congressional appropriations.<br />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.<br />
  5. 5. FUDS Remediation Funds Barrier<br />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. <br />In comparison, DoD estimates the cost of completing the remaining investigation and cleanup of FUDS properties to be $16.272 Billion.<br />Result: Despite DOD liability, FUDS Site remediation languishes . <br />
  6. 6. Financing FUDS Remediation <br />
  7. 7. Financing Sources to Remediate and Redevelop FUDS Sites<br />Financing Approaches or Incentives<br />Traditional<br />Emerging<br />Other Incentives<br />
  8. 8. Traditional Financing Approaches <br />EPA Brownfields Program<br />Assessment, Cleanup, and Job Training Grants<br />Revolving Loan Funds<br />Tax Credits<br />Federal or State<br />
  9. 9. Traditional Financing Approaches <br />Stimulus Funds<br />The Emergency Economic Stabilization Act of 2008 (“2008 Stimulus Bill”). Public Law 110-343<br />The American Recovery and Reinvestment Act of 2009 (“2009 Stimulus Bill”). Public Law 111-5.<br />Public/Private Partnerships<br />Private Developer Funding Environmental Oversight & Assurance<br />Developer Assistance with Environmental Remediation costs<br />
  10. 10. Emerging Financing Approaches For FUDS Sites<br />FUDS Negotiated Settlement <br />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.<br />United States Army Corps of Engineers<br />ER 200-3-1 Formerly Used Defense Sites (FUDS) Program Policy <br />Chapter 5 Potentially Responsible Party Process <br />
  11. 11. FUDS Negotiated Settlement <br />FUDS Negotiated Settlement Process (Cont’d)<br />The process to achieve settlement with USACE is necessarily site-specific but some of the common steps for each site include:<br /> Identification of appropriate site for settlement;  <br />Negotiation of a preliminary pro rata percentage of responsibility between the parties based on equitable factors;<br />Development of a remedial approach, implementation plan and Cost-to-Complete;<br />
  12. 12. FUDS Negotiated Settlement <br />FUDS Negotiated Settlement Process (Continued)<br /> Development of a Stakeholder Action Plan;<br /> Technical discussions with the USACE District office regarding scope of any remaining investigation and remedial alternatives and their associated costs;<br />Settlement negotiations with the assigned Department of Justice Attorney and/or USACE District Counsel; <br />Referral of Settlement Demand by USACE chain-of-command;<br />Assignment of Department of Justice Attorney;<br />
  13. 13. FUDS Negotiated Settlement <br /><ul><li>FUDS Negotiated Settlement Process (Continued)</li></ul> Implementation of all or portions of Stakeholder Action Plan, as needed;<br />Finalization of Settlement in the form of a judicially ordered Consent Decree;<br />Finalization of state Administrative Orders on Consent; <br />Implementation of Cost-to-Complete; <br />Five-year reviews; and <br />Closure.<br />
  14. 14. FUDS Cost Recovery Litigation <br />FUDS Cost Recovery Litigation<br />CERCLA 107(a) Cost Recovery Claim <br />United States v. Atlantic Research , 551 U.S. 128 (2007)<br />CERCLA 107(a) allows cost recovery by a private party that has itself incurred cleanup costs. <br />One PRP may sue anther to recover response costs incurred in voluntary cleanup.<br />Site owners need not wait for EPA enforcement action to institute a CERCLA 113(f) Contribution Action<br />
  15. 15. FUDS Cost Recovery Litigation <br />FUDS Cost Recovery Litigation (Cont’d)<br />Next step following unsuccessful FUDS Negotiated Settlement <br />Litigation preparation <br />Remedial Determination/Implementation Schedule <br />Coordination with State and Federal Regulators<br />Demand on United States through COE<br />Assembling costs and evaluation of liability <br />
  16. 16. FUDS Cost Recovery Litigation <br />FUDS Cost Recovery Litigation (Cont’d)<br />CERCLA 107(a) Cost Recovery Action <br />Elements<br />Defenses<br />Objectives/Goals<br />Recovery of past costs expended for necessary and consistent (NCP) response costs<br /> Secure judicial determination allocating CERCLA liability among the parties<br />
  17. 17. FUDS Cost Recovery Litigation <br />FUDS Cost Recovery Litigation (Cont’d)<br />Objectives/Goals (Continued)<br />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:<br />Judicial determination of United States’ pro rata share for future response costs<br />
  18. 18. Other Possible FUDS Incentives<br />Obtaining Mineral Rights<br />Mineral interests generally reserved on conveyance by United States to private ownership. <br />Allowed under Section 209 of the Federal Land Policy Management Act. <br />Application for Minerals is Made to Bureau of Land Management<br />May Act as Inducement to Prospective Redeveloper<br />Allows for Transfer of Complete Title (i.e. Surface and Subsurface)<br />May allow for the exploitation of any potential underlying value of the minerals<br />End-use may determine the real “value” of the minerals (site-specific analysis)<br />