Testimony presented before the
House Energy and Environment Committee on
Thursday, March 15, 2001

By Susan Montgomery
Director of Environment & Health Care Policy
Ohio Chamber of Commerce

Chairwoman Hollister and members of the House Energy and Environment Committee. I am Susan Montgomery, Director of Environment & Health Care Policy for the Ohio Chamber of Commerce.

The Ohio Chamber is the largest and most diverse statewide business association in Ohio. We represent over 5,000 businesses. Our members are both small and large, from every geographical area of our state and from every major industrial, commercial and service sector of the business community.

On behalf of our members, I am here today to offer interested party testimony on HB 3 (Blasdel, R-East Liverpool) - The Clean Ohio Fund.

The Ohio Chamber has been actively involved in the debate regarding this program since it was originally proposed as HJR 15 in the 123rd General Assembly. We supported State Issue One which, as you know, was approved by Ohio voters in November 2000, and which in turn created the Clean Ohio Fund.

Over the past year, we have established a set of working principles through a workgroup made up of many segments of our membership including: local chambers, economic development professionals, mortgage lenders, risk managers, environmental attorneys, and consultants. We are appreciative of the assistance we received from representatives of the Agriculture, Development and Natural Resources departments, as well as Ohio EPA. They shared their perspectives with us numerous times which aided in formulating our thoughts on this issue.

We have also met with the League of Conservation Voters, a group with which the business community may appear from the outset to significantly differ. However, we have found that this conclusion is not necessarily the case. We strongly believe that successful brownfield redevelopment proves that economic expansion and a clean environment can co-exist. We also agree that those who contribute to past contamination should not be eligible to receive taxpayer funds for remediation. However, this does not mean all private sector organizations should be precluded from participating in the Clean Ohio Fund simply because they are privately owned. In fact, without strong private sector partnerships, we believe this program cannot fully succeed.

The members of our work group strongly believe that all citizens of Ohio will benefit from projects that receive funding through the Clean Ohio Fund. These funds will be targeted at cleaning up abandoned industrial sites in an environmentally sound yet economically justified manner. In turn, this use of state dollars will promote the sustained reuse and responsible preservation of valuable land resources.

The Ohio Chamber is primarily interested in the possibilities the Clean Ohio Fund will afford communities to fund brownfield redevelopment projects. I'm sure you know that brownfields are abandoned, idle or under-used industrial or commercial properties that are difficult to redevelop because of suspected environmental contamination.

What you may not know is that Ohio was one of the first states in the country to enact a brownfield remediation program. This program, known as our Voluntary Action Program, establishes risk-based clean-up standards and addresses other important issues like liability and the complexity of the clean-up process that were obstacles to the successful remediation and redevelopment of these sites.

Now, the Clean Ohio Fund will give us another important tool to add to our brownfield tool box. The funding provided by the Clean Ohio Fund will allow communities across our state to turn abandoned eyesores into viable economic development opportunities. As we develop the specifics of the Clean Ohio Fund implementing legislation, it is important that we keep this approach in mind. To succeed we must build the Clean Ohio Fund on an economic development base.

Yes, there will be many environmental benefits gained from remediating brownfields. But the statutory and regulatory framework that governs the Clean Ohio fund must focus on returning brownfields to productive use. Otherwise, we will do nothing more than clean-up properties that continue to sit vacant. And we do not believe that's what the citizens of Ohio had in mind when they voted for Issue 1.

Now, let me turn to the specifics of what our work group developed. In particular, I want to address the following four concerns: loan/grant criteria, public notice, liability, and cleanup standards.

First, we believe that the Clean Ohio Fund's loan and grant criteria must be merit-based and serve as a catalyst for investment in projects that stimulate greater regional redevelopment efforts. By this we mean that there should be:
A significant local match for these state dollars;
Evidence of marketability of the completed project;
Acknowledgment of the extent to which brownfields are a barrier to overall redevelopment or a barrier to development of surrounding properties; and
Demonstration of community support.

Merit-based criteria will stretch state and local dollars to maximum community benefit and avoid a political or bureaucracy-driven distribution scheme. We believe this will allow for a fair distribution of state monies among all parts of the state.

We further believe that Clean Ohio Fund proceeds could be used for funding assessments, land acquisition, site demolition, remediation and infrastructure improvements solely related to a new use for the property. However, we do not support carving out a special fund for mounting a statewide assessment effort.

Second, since the Clean Ohio Fund will be distributing taxpayer dollars, it must be accountable to the public. We agree citizens should be informed about proposed projects and have an opportunity to provide their comments and support. In fact, we suggest that the criteria for selecting projects require a demonstration of public support.

Balancing public involvement and the confidentiality and timing requirements associated with an economic development project can, however, be very complicated. We look forward to working with you and representatives of the environmental community to develop a public participation process that addresses a community's right to know as well as critical economic redevelopment demands.

Third, there has been a great deal of controversy over the extent to which companies who rehabilitate abandoned, environmentally contaminated sites should be held liable for past contamination. The point we wish to make here is that redevelopers who have no prior connection to the site must be able to obtain relief from liability for past contamination in a timely and reliable manner. This is critical in order to make participation in the program appealing to those who agree to undertake the costs and risks related to cleaning up these sites.

Fourth, I mentioned Ohio's VAP program earlier in my testimony. This program already establishes risk-based clean-up standards, and we recommend that those standards be available for use in projects funded using Clean Ohio Funds.

However, complete flexibility should be given as to whether or not a project utilizes Ohio's VAP program. We also believe the process for remediating a site under the Clean Ohio Fund should be as administratively efficient and cost effective as possible.

In conclusion, the Ohio Chamber believes the Clean Ohio Fund's greenspace and farmland preservation components can work in harmony with the redevelopment of brownfields. Together these initiatives will help communities improve the quality of life for their residents and help businesses retain high-skilled employees in today's demanding job market.

We are anxious to see the details of the substitute bill and look forward to continued discussion. Thank you, Madam Chairwoman. I hope this information is helpful and would be glad to entertain any questions.