United States
                        Environmental Protection
                           Office of Water
                           Washington, DC 20460
EPA 832-F-98-006
October 1998
Funding  Brownfield  Remediation  with
the Clean   Water  State Revolving  Fund
Many areas across  the country that were once used for
industrial and commercial purposes have been abandoned or
are under-used.  Some are environmentally contaminated or
perceived  to  be  contaminated.    Because  developers,
municipalities, and other stakeholders fear that involvement
with these  sites may make them liable for cleaning up
contamination they did not create, they are more attracted to
developing sites in pristine areas, called "greenfields." The
result can be blighted areas rife with abandoned or under-used
industrial or commercial facilities that create safety and health
risks for residents, drive up unemployment, and foster a sense
of hopelessness.  These areas are called "brownfields."

         Brownfields/Clean Water State
          Revolving Fund Collaboration
   Brownfields sites that  suffer from water quality
   impairment can use the CWSRF  as  a powerful
   financial instrument for planned corrective action.
There are currently 51  Clean Water State Revolving Fund
(CWSRF) programs (one in each state and Puerto Rico), which
operate like banks. They are capitalized through Federal and
state contributions.  These  assets, in turn, are used to make
low or no-interest loans for important water quality projects.
Funds are then repaid to the CWSRFs over terms as long as
twenty years. Repaid funds are then recycled to fund other
water quality projects.  These CWSRF resources can help
augment the limited financial resources currently available
under the Brownfield Initiative's pilot program to clean up
these sites. Brownfield mitigation to correct or prevent water
quality problems may be eligible for CWSRF funding which
1.  Abatement of Polluted Runoff
2.  Control of Stormw ater Runoff
   (Stormwater activities subject to National Pollutant
   Discharge Elimination System (NPDES)  permitting are
   considered to be a point source and, thus, would have to
   be publicly-owned in order to qualify for CWSRF

                            3. Correction of Groundwater Contamination
                            4. Remediation of Petroleum Contamination
                              (Includes assessment and cleanup of petroleum
                              contamination and underground storage tanks, which are
                              not covered under Brownfields/Superfund funding.)

                                        Getting a Project Funded
                            The list of brownfield projects that may be eligible for CWSRF
                            funding includes, but is not limited to

                              4  excavation and disposal of underground storage tanks
                              4  constructed wetlands (filtering mechanism)
                              4  capping of wells
                              4  excavation, removal, and disposal of contaminated soil
                                 or sediments
                              4  tunnel demolition
                              4  well abandonment
                              4  Phase I, Phase II, and Phase III assessments

                            Brownfield showcase  communities and  pilots with  such
                            projects are also eligible for CWSRF funding.

                            The first step in securing CWSRF funding is to get  your
                            project/remediation plan  on your state's  Nonpoint  Source
                            Management Plan (NSMP) (Section 319 of the Clean Water
                            Act). Contact your state's  CWSRF  program for  details
                            (requirements, NSMP development, scheduling, restrictions,
                                         Capacity of the CWSRF
                            The CWSRF has in excess of $27 billion  in assets and has
                            issued almost $23 billion  in loans since 1988.  Currently the
                            CWSRF is funding nearly $3 billion worth of water quality
                            projects annually.

                                            Who  May Qualify
                            Included in  a long list of eligible loan recipients are
                            communities, municipalities, individuals, citizen groups, and
                            nonprofit organizations.   Since  the CWSRF program is
                            managed largely by the states, project eligibility may  vary
                            according to the priorities within each state.  Contact  your

state's CWSRF program for details.
In creating the CWSRF, Congress ensured that it would be
able to fund a wide range of water quality projects, including
nonpoint source, wetlands, estuaries, and watershed projects,
as well as municipal wastewater treatment systems. The SRF
provisions in the Clean Water Act give no more preference to
one category or type of project than any other.  However,
States ultimately determine funding priorities and project

            Sources of Loan Repayment
Each state must approve a source of loan repayment as part of
the application process.  Though finding a source of repayment
may prove  challenging, it does not have to  be unnecessarily
burdensome. Many users of the CWSRF have demonstrated a
high level of creativity in developing  sources of repayment.
The source of repayment need not come from the project itself.
In fact,  in the case  of a Brownfields redevelopment, the
repayment source  should  not be based  on the  speculative
success of a real estate development project.

Some potential repayment sources include

4   fees paid by developers on other lands
4   recreational fees (fishing licenses, entrance fees)
4   dedicated portions of local,  county, or state taxes or fees
4   property owner ability to pay (determined during loan
4   donations or dues made to nonprofit groups
4   stormwater management fees
4   wastewater user charges

               Learning by  Example
The Grant Realty Company of Ohio received a CWSRF loan
for  the cleanup of a 20-acre industrial site in Cleveland to
prepare the area for commercial reuse.  The project involved
the remediation of contaminated groundwater and soils using
vapor  extraction  and  dual   phase  vacuum  extraction
technologies.  Their  dedicated  source of repayment is the
income stream from a tank cleaning operation, with a personal
loan guarantee and a second position mortgage as collateral.
Grant Realty participated in the Voluntary Action Program
(VAP) administered by the Ohio EPA, which allows voluntary
cleanup of contaminated property in exchange for a release
from further cleanup activities.

The Barberton Laundry and Cleaning, a small company
located  in Barberton,  Ohio, used  CWSRF  financing to
undertake phase II site assessment work. The project involves
soil and groundwater sampling to determine the extent of any
existing contamination and the scope of any remedial activities
needed to prepare the site for reuse.  Their dedicated source of
loan repayment is the revenue stream from accounts receivable.
Private lenders were  unwilling to finance this work.  This
assessment was a critical first step in redeveloping the site.

The State of Wisconsin is  laying the groundwork for future
Brownfields/CWSRF   collaboration.   They  have  passed
legislation that will allocate $20 million of their CWSRF
(Land Recycling Loan Program) to municipalities to help clean
up contaminated properties.  Planned interest rates will be
55% of the market rate. Award priority will be based on the
project's  potential to reduce environmental pollution, threats
to public health, and development of pristine land. Currently
they are developing their priority ranking system.

                 Challenges Ahead
EPA has been encouraging the states to open their CWSRFs to
the widest variety  of water quality projects  while still
addressing their highest priority projects. Those interested in
cleaning  up a brownfield site should seek out their CWSRF
program, gain an understanding of how their state program
works, and participate in the annual process that determines
which projects are funded.

   For the list of Clean Water State Revolving Fund
     state contacts or more information,  contact:
      The Clean Water State Revolving Fund Branch
         U. S. Environmental Protection Agency
           401 M Street, SW (Mailcode 4202)
                 Washington, DC 20460
       Phone: (202) 260-7359  Fax: (202) 260-1827
              internet: www.epa.gov/OWM

    For more information on  Brownfields, contact:
           Outreach and Special Projects Staff
      Office of Solid Waste and Emergency Response
         U. S. Environmental Protection Agency
           401 M Street, SW (Mailcode 5101)
                 Washington, DC 20460
       Phone: (202) 260-4039  Fax: (202) 260-6606
           internet: www.epa.gov/brownfields
                    Clean Water
                    State Revolving Fund