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PULASKI COUNTY BROWNFIELDS REVOLVING LOAN FUND FREQUENTLY ASKED QUESTIONS What is a “brownfield”? A brownfield is real property, (including industrial, commercial, agricultural, and residential properties), which are abandoned or underutilized, and whose expansion, redevelopment, or reuse may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. What are the goals of the Brownfields Program? Provide continued protection of human health & the environment, Encourage redevelopment as a sound land use management policy, Develop risk-based clean up standards, Enable prospective purchasers to determine liability “up front”, and Develop a schedule-oriented program that can keep pace with real estate transactions. What kind of properties can use the Brownfields Program? Properties in the Brownfields Program run the full range from small businesses to multi-acre heavy industrial manufacturing facilities (both operating and closed). Many of the sites have enrolled in the Brownfields Program due to pending property transactions. Other types of sites are cleanup of spills/emergency response and state hazardous waste priority list sites. To minimize environmental liability, the prospective future owner or the lending institution desires a Department certificate of completion prior to finalizing the transaction. Generally, sites that belong in other regulatory programs or are under enforcement actions are not accepted into the Brownfields Program. Is there State or Federal money available to help pay for my site assessment or cleanup? Sometimes, ADEQ has a limited amount of Federal and State funding to conduct what are known as Targeted Brownfields Assessments, or TBAs. TBAs are designed to help Brownfields Participants who are local governmental agencies, community planning councils, or non-profit agencies complete the site assessment phase of the Arkansas Brownfields program. In addition to the TBA program, ADEQ may provide low-interest loans to qualified Brownfields Program participants for site investigations and/or clean ups through the Brownfields Revolving Loan Fund. As a third option, the U.S. EPA offers Brownfields assessment, revolving loan fund, and cleanup grants through the Small Business Liability Relief and Brownfields Revitalization Act to eligible entities to address brownfield sites with hazardous and/or petroleum contamination. The application process is nationally competitive and begins annually in late fall. For more information about eligibility requirements, the application process, and other U.S. EPA Brownfields funding, please visit www.epa.gov/brownfields. For more information on ways and means to help fund your cleanup, contact the Arkansas Brownfields program coordinator at (501)340-3594, or e-mail Brownfields@adeq.state.ar.us. What is the Brownfields Revolving Loan Fund? The Brownfields Cleanup Revolving Loan Fund (BRLF) is a fund that the Arkansas Department of Environmental Quality received from the U.S. Environmental Protection Agency’s (EPA’s) Brownfields Program that is available for loans to finance environmental cleanup activities at Brownfields sites across Arkansas. The Arkansas Development Finance Authority serves as the fund manager, and is working with ADEQ to administer the revolving loan fund. Cleanup loans can only be awarded for sites that have been enrolled in the Arkansas Brownfields Program, and completed a Comprehensive Site Assessment pursuant to A.C.A. § 8-7-1104(b). Additionally, the Borrower must have entered into an Implementing Agreement with ADEQ for the site being cleaned up prior to any disbursement of funds for a cleanup loan under either Category A or B. Persons who do not otherwise qualify for a Targeted Brownfields Assessment may apply for a low- cost loan under Category C of the Arkansas Revolving Loan Fund in order to fund a Comprehensive Site Assessment as required under the Brownfields Program. Who can apply for the Brownfields Revolving Loan Fund? Local governments, non-profit organizations, businesses, public, and private parties throughout Arkansas are eligible to apply if they are not responsible parties for the site being cleaned up. In addition, a party who borrows money through the Brownfields Revolving Loan Fund to clean up a site must have completed a comprehensive site assessment and sign an Implementing Agreement with ADEQ, which will ensure that the party performs the cleanup in compliance with the Arkansas Voluntary Cleanup Act. Can private developers or investors apply to the Brownfields Revolving Loan Fund? Yes, provided that the person has applied and been accepted as a bona fide prospective purchaser under the Arkansas Brownfields Program, and otherwise meets the qualifications to apply for a loan. How much money is available under the Brownfields Revolving Loan Fund? Depending on the availability of funds, individual loans may be made up to $500,000 for Category A projects, and up to $200,000 for projects which fall under Category B or C. What are the typical terms and conditions for a Brownfields revolving loan? The term (payback period) of the loan is negotiable based upon the applicant’s eligibility and need. In all but exceptional circumstances, the scheduled payback period is not expected to exceed 5 to 10 years. The interest rate is the amount of interest charged to the Borrower for the loan. This is typically a fixed rate set by the Director for each application period, but is guaranteed to be less than the current prime interest rate. (For reference, as of March 28, 2006, the Prime Interest Rate is 7.75%.). For the current offering, the set interest rates are: Type of Organization Payback ≤ 5 years Payback <5 but ≤ 10 years Private Individual or Entity 3.0% 4.0% Public Entity 2.0% 3.0% Non-Profit Organization 2.0% 3.0% All applicants’ credit records must be in good standing. A credit report is required of all applicants and will be reviewed by the Arkansas Development Finance Authority (ADFA), who will in turn advise ADEQ of each applicant’s credit risk. Borrowers requesting assistance shall meet the following requirements: 1. For public entities, a dedicated source of funds for repayment of the loan must be provided and they must enter legal and binding commitments with the Department to secure financing. 2. The borrower must comply with the requirements of the Arkansas Voluntary Cleanup Act, Act 1042 of 1997, as amended (A.C.A. § 8-7-1101 et seq.), the CERCLA Non-Time Critical Removal Requirements, and all applicable state and federal laws, requirements, and rules. 3. Prior to disbursement of any Category A or B loan funds, the borrower must enter into an Implementing Agreement under the ADEQ Brownfields Program, demonstrating a good faith effort that all Brownfields remediation requirements will be met, resulting in a Certificate of Completion for the property. 4. Disbursements will be made monthly based upon actual work done and costs incurred. Funds will not be disbursed from the Brownfields Revolving Loan Fund without approval from ADEQ. 5. The borrower shall provide an Estimated Completion Date for funded activities. This will be used to develop the loan repayment schedule. Repayment shall begin on this date (or the actual remediation completion date, whichever is sooner) regardless if the remediation exceeds this date. The project is expected to be completed within one year of loan award. 6. The repayment schedule will be based on equal monthly payments for the life of the loan. 7. Loan amounts cannot be increased due to cost overruns during the project. Should additional funding be required, the borrower may apply for a separate loan. 8. In case of cost underruns, the borrower will only repay the amount actually borrowed. The repayment schedule will be recalculated on the estimated completion date or actual remediation completion date, whichever is sooner. The payments will be adjusted if there is a material difference between the amount actually borrowed and the amount requested by the borrower. This material difference will be determined and mutually agreed upon by the ADEQ and ADFA. 9. Borrowers shall maintain documentation for a minimum of ten years after the completion of the cleanup activity supported by the loan or for the length of the loan, whichever is longer. Borrowers shall obtain written approval from the ADEQ prior to disposing of these records. Are there any fees associated with a Brownfields revolving loan application? The borrower will be responsible for a $500 non-refundable underwriting fee to ADFA once ADEQ has deemed the project eligible to apply for a loan. ADEQ will notify the borrower of their project’s eligibility and will then request that payment be made to ADFA for this underwriting fee. Once this fee is paid, ADFA will evaluate the borrower’s information for a financial risk assessment and inform ADEQ of the results. The borrower may still be declined based upon the recommendation from ADFA. A loan closing fee will be required at the time the Loan Agreement and Promissory Note are signed by the borrower. This fee will be calculated as 1% of the principal loan amount or $750, whichever is greater. The $500 underwriting fee (paid earlier) will be put towards this loan closing cost. ADEQ does not currently assess any fees for its work or oversight on Brownfields projects or loan applications or agreements. What types of activities can be funded under Category A? “Category A” funding addresses environmental remediation or cleanup activities at sites contaminated by non-petroleum hazardous substances (except in cases where petroleum contamination is commingled with other hazardous substances). Activities which may be funded under category A include: 1) Actions associated with removing, mitigating, or preventing the release or threat of a release of a hazardous substance, pollutant, or contaminant (as appropriate to different site situations), including: Fences, warning signs, or other security or site control precautions; Drainage controls; Stabilization of berms, dikes, or impoundments or drainage or closing lagoons; Capping of contaminated soils; Using chemicals and other materials to retard the spread of the release or mitigate its effects; Excavation, consolidation, or removal of highly contaminated soils from drainage or other areas; Removal of drums, barrels, tanks, or other bulk containers that contain or may contain hazardous substances, pollutants, or contaminants; Containment, treatment, disposal, or incineration of hazardous materials;and Provision of alternative water supply where necessary immediately to reduce exposure to contaminated household water and continuing until such time as local authorities can satisfy the need for a permanent remedy. 2) Site monitoring activities, including sampling and analysis, that are reasonable and necessary during the cleanup process, including determination of the effectiveness of a cleanup. 3) Costs associated with meeting public participation, worker health and safety, and interagency coordination requirements. What types of activities can be funded under Category B? “Category B” funding addresses the same types environmental remediation or cleanup activities as Category A at sites where the primary contamination is petroleum or petroleum products, which may or may not be commingled with other hazardous substances. Category B funding may also be used to clean up sites contaminated with controlled substances (e.g., clandestine drug labs) and mine-scarred lands. There is petroleum contamination on my site. Can I clean it up under the Arkansas Brownfields program? Due to changes in the federal Brownfields law in 2002, tanks exempted from the Arkansas Petroleum Storage Tank regulations (for example, heating oil tanks) and other sources (such as pipelines, salvage yards, etc.) may be eligible for the Brownfields program. Properties contaminated by regulated petroleum storage tanks must be investigated and remediated with oversight from the Department’s Regulated Storage Tanks Division and are not eligible for the Brownfields program. Petroleum-contaminated sites (except those sites receiving or eligible for RST trust fund monies) may be eligible for Brownfields funding if the applicant can provide information that will enable ADEQ to make certain statutory determinations. Petroleum-contaminated sites (or portions of properties contaminated with petroleum or petroleum product that are eligible for Brownfields funding include certain sites that are not underground storage tank (UST) sites as described below. For a petroleum contaminated site(s) that otherwise meets the definition of a brownfields site to be eligible for Brownfields funding, ADEQ must determine: 1. the site is of “relatively low risk“ compared with other petroleum-only sites in the state; 2. there is no viable responsible party; and 3. the site will not be assessed, investigated or cleaned up by a person who is potentially liable for cleaning up the site. In addition, a petroleum-contaminated site must not be subject to a corrective action order under the Resource Conservation and Recovery Act (RCRA) §9003(h) or a similar order under the Arkansas Regulated Substance Storage Tank Act (A.C.A. §§ 8-7-801 et seq.). What is a “relatively low risk” petroleum-contaminated site? ADEQ’s view is that “relatively low risk” petroleum-contaminated sites are not high risk sites. “High risk” sites have a significantly higher level of petroleum contamination and are currently being cleaned up or eligible for cleanup using the Department’s Petroleum Storage Tank Trust Fund monies, or any petroleum-contaminated site that currently is regulated under the federal Oil Pollution Act (OPA). Can a Brownfields revolving loan be used to clean up a site contaminated by a former meth lab? BRLF funds can be used to clean up sites contaminated by controlled substances. A “controlled substance” is defined under the federal Controlled Substances Act as “a drug or other substance, or immediate precursor, included in schedule I, II, III, IV, or V of part B of this title (21 U.S.C. Section 802).” Controlled substances include drugs or other substances (see section 102 of the federal Controlled Substances Act, 21 U.S.C. Section 802, for a list of controlled substances), but do not include distilled spirits, wine, malt beverages, or tobacco. For example, these sites may include private residences formerly used for the manufacture or distribution of methamphetamines or other illegal drugs where there is a presence or potential presence of controlled substances or pollutants, contaminants, or hazardous substances (e.g., red phosphorus, kerosene, acids). What are “mine-scarred lands” that may be eligible for cleanup under the Brownfields Program? Under the 2002 federal Brownfields Law, mine-scarred lands are eligible for brownfields funding. Applicants for Brownfields funding that include properties within their proposal that they believe fall within the following definition of mine-scarred lands are encouraged to provide in the site description section of their proposals information identifying and describing such properties. “Mine-scarred lands” are those lands, associated waters, and surrounding watersheds where extraction, beneficiation, or processing of ores and minerals (including coal) has occurred. For the purposes of this section, the definition of extraction, beneficiation, and processing is the definition found at APC&EC Regulation No. 23, § 261.4(b)(7). Mine-scarred lands include abandoned coal mines and lands scarred by strip mining. Examples of coal mine-scarred lands may include, but are not limited to: • abandoned surface coal mine areas, • abandoned deep coal mines, • abandoned coal processing areas, • abandoned coal refuse areas, • acid or alkaline mine drainage, and • associated waters affected by abandoned coal mine (or acid mine) drainage or runoff, including stream beds and adjacent watersheds. Examples of non-coal hard rock mine-scarred lands may include, but are not limited to: • abandoned surface and deep mines, • abandoned waste rock or spent ore piles, • abandoned roads constructed wholly or partially of waste rock or spent ore, • abandoned tailings, disposal ponds, or piles, • abandoned ore concentration mills, • abandoned smelters, • abandoned cyanide heap leach piles, • abandoned dams constructed wholly or partially of waste rock, tailings, or spent ore, • abandoned dumps or dump areas used for the disposal of waste rock or spent ore, • acid or alkaline rock drainage, and • waters affected by abandoned metal mine drainage or runoff, including stream beds and adjacent watersheds. What types of activities can be funded under Category C? Category C funding may be used to carry out a Comprehensive Site Assessment pursuant to A.C.A. § 8-7-1104(b) as well as related remedial activities, redevelopment planning, and community involvement related to a brownfield site. How can I get more information? Contact: ADEQ Hazardous Waste Division Inactive Sites Branch 8001 National Drive Little Rock, AR 72219-8913 Phone: (501) 682-0854 E-Mail: Brownfields@adeq.state.ar.us Visit the ADEQ website: www.adeq.state.ar.us
"What is brownfield"