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Largest Environmental Trust In U.S. History, $773 Million, Created To Clean Up Old GM Sites Containing Hazardous Waste In 14 States

KEN THOMAS   10/20/10 07:53 PM ET   AP

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WASHINGTON — The Obama administration has reached a deal on a $773 million environmental trust, the largest of its kind in U.S. history, to clean up dozens of former General Motors sites spread over 14 states, officials said Wednesday.

The funds will target automotive sites containing hazardous waste that were left shuttered by the auto giant's bankruptcy last year. About half of the 89 sites covered by the trust are in Michigan and others are in Indiana, New York and Ohio.

The trust fund, which was proposed in May, was filed with the U.S. Bankruptcy Court in New York and is expected to receive final approval in the first quarter of 2011. The deal involves the government, Motors Liquidation Co., which represents former GM assets that were not placed in the new auto company, 14 states and the St. Regis Mohawk Tribe in New York.

Officials said the trust fund, which was proposed in May, would help avoid legal fights among communities, state and federal environmental offices and Motors Liquidation over liability for cleanups at different locations. About two-thirds of the properties are contaminated with hazardous materials so the trust will enable properties to be cleaned up and put on the market for sale.

"This trust – the largest environmental trust in our history – provides support for aggressive environmental cleanups at these sites, which will create jobs today and benefit the environment and human health over the long term," said EPA Administrator Lisa P. Jackson.

Al Koch, chief executive of Motors Liquidation, said the "money will be spent where it will truly do the most good for all parties concerned."

Some of the sites include: former GM plants in Wilmington, Del.; Kansas City, Kan.; Pontiac, Mich.; Flint, Mich.; Lansing, Mich.; and Moraine, Ohio. Other facilities are located in Syracuse, N.Y.; Janesville, Wis.; Indianapolis; Pittsburgh; Fredericksburg, Va.; Muncie, Ind.; Framingham, Mass.; Danville, Ill., and Trenton, N.J.

General Motors received $50 billion in government aid to get through its bankruptcy. GM is 61 percent owned by U.S. taxpayers. The company is planning an initial public offering that will allow the government to begin reducing its stake.

Vacant properties, facilities and offices left barren by GM's bankruptcy will be razed or rehabilitated under the plan. The funds will come from more than $1 billion provided by the Treasury Department to wind down the "bad" assets of General Motors set aside in the bankruptcy.

The plan includes $431 million for states to clean up former GM properties and $262 million for administrative costs such as paying property taxes, security for the buildings and maintenance.

Michigan will receive the largest share, at $158.7 million, followed by New York ($153.8 million), Ohio ($39.4 million) and Indiana ($25.2 million). The other states participating in the settlement include: Delaware, Illinois, Kansas, Louisiana, Massachusetts, Missouri, New Jersey, Pennsylvania, Virginia and Wisconsin.

The funding will be overseen by Elliot Laws, a former EPA assistant administrator for solid waste and emergency response during the Clinton administration.

The agreement was first reported by the Detroit News.

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Filed by Travis Donovan  |