April 16, 2009Client Alert

U.S. EPA Makes $40 Million Available For Supplemental Funding to Brownfields Revolving Loan Fund Grantees

Have you been awarded a Brownfield Revolving Loan Fund (“RLF”) grant under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”)? If so, you may be eligible to receive additional funds from the United States Environmental Protection Agency’s (“EPA”) Office of Brownfields and Land Revitalization.

What Funds are Available?

The American Recovery and Reinvestment Act of 2009 (“The Act”) awarded EPA $100 million for Brownfields programs under CERCLA, of which 25% must be used for sites with petroleum contamination. EPA allocated $40 million of these funds for new grants to current RLF grantees.

Who is Eligible to Receive Funds?

To be eligible for the funds, the applicant must be a high performing RLF grantee, meaning that it has demonstrated its ability to deliver results under the CERCLA program by making at least one loan or subgrant and it has effectively utilized the funds it currently has available to it.

EPA will look at a number of factors to determine which high performing RLF grantees will receive funds. Specifically, EPA will consider the following factors:

1. Priority will be given to “shovel-ready” projects, meaning those in which the grantee can make loans and subgrants for projects that can be started and completed quickly.

2. Priority will also be given to projects that can clearly demonstrate how they will track and measure progress in creating jobs associated with the grant.

3. Ability to maximize job creation and boost the economy.

4. Ability to track and measure progress of their clean-up efforts.

5. Need for supplemental funding based on the number of sites and the communities that may benefit from such funding.

6. Ability to administer the grant, subgrant and/or loan.

7. Ability to use the grant for current “gaps” in clean-up.

8. Community benefit from past and potential grants.

9. Projects that incorporate sustainable reuse and renewable energy.

How is this Program Different from the Program under CERCLA?

The program authorized by The Act differs from the program under CERCLA in a number of ways. First, funds awarded under The Act are not subject to CERCLA’s 20% cost sharing requirement. Second, unlike grantees under CERCLA, grantees under The Act are not required to use at least 60% of the funds for loans. Rather, grantees under The Act may use up to 100% of the award for loans or subgrants. Finally, The Act contains no limit on the award a grant applicant can receive and allows fund applicants to petition EPA to waive the $200,000 per site subgrant limit under CERCLA. To obtain such a waiver, the applicant must show that its project will result in increased job creation and retention and economic development.

How Does One Apply for these Funds?

Once EPA publishes notice of the program in the Federal Register, all applications for funding must be delivered to EPA within 21 days after such publication. A new request for funds must be submitted, even if the applicant has a fund request currently pending with EPA. Applicants should specify if the project involves petroleum cleanup, since a certain portion of the funds made available under the Act are specifically allocated for petroleum.

This client alert is one of a series designed to provide summaries of the American Recovery and Reinvestment Act of 2009 ("The Act") and information and guidance regarding opportunities and relief made available through The Act. All of The Act client alerts are available on Michael Best's Stimulus and Economic Recovery Team publications page. For additional information on this topic, please feel free to contact one of the authors of this alert or your Michael Best attorney.

If you are interested in learning about other provisions included in The Act, the Michael Best Stimulus and Economic Recovery Team is prepared to assist you in understanding the implications and in developing and implementing a strategy to secure the benefits of this unprecedented legislation. Specifically, we will assist you to identify opportunities, prepare appropriate proposals and make targeted contacts to secure funds. We will also work with you to ensure that your applications are tailored to meet your needs and that your funded projects proceed in compliance with award requirements and applicable laws.

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