The New York State Legislature has passed legislation that amends the NYS Brownfield Cleanup Program (BCP) and associated tax credit program and extends the program for another 10 years. The amendments extend the BCP, which was scheduled to terminate on Dec. 31, 2022, another 10 years, through Dec. 31, 2032, and would require sites to obtain a Certificate of Completion (COC) by 2036. Further, certain projects that received a COC on or after March 20, 2010, but before Dec. 31, 2015, will now have 15 years after the date of issuance of their COC to build their buildings, as opposed to 10 years. The amendments also expand the availability of certain tax credits under the BCP.
The BCP provides state oversight, liability protection and tax incentives for the remediation and redevelopment of contaminated real property, known as brownfield sites. Sites that are accepted into the BCP, are remediated to the satisfaction of the New York State Department of Environmental Conservation (NYSDEC) and obtain a COC are eligible for tax credits that include a site preparation credit for site remediation, an on-site groundwater remediation credit and the tangible property credit for redevelopment costs. Only certain sites are eligible to receive the tangible property tax credit. The new amendments expand this limited list to include projects within a "disadvantaged community" within a Brownfield Opportunity Area, as designated by the secretary of state pursuant to the General Municipal Law, and projects being developed as renewable energy facilities. For projects deemed eligible for the tangible property credit, the proposal expands the allowable 5% "bump ups" (i.e., additional cost percentages eligible for the tax credit) to include projects that are in a disadvantaged community or are developed as renewable energy facility sites.
The proposal would also allow certain sites to receive the site preparation and on-site groundwater remediation credits for an additional two years. Under the existing statute, certain site preparation and on-site groundwater components may be paid up to five tax years after the COC is issued. However, the amendments expand that time that the site preparation credit and the on-site groundwater remediation credit components to seven years for sites that had a COC issued between July 1, 2015, and June 24, 2021. Further, for sites that received a COC between March 20, 2010, and Dec. 31, 2015, the tangible property credits will be allowed for 180 months after the issuance of the COC (previously, tangible property credits were limited to 120 months following issuance of the COC, or 144 months following the COC for certain sites).
The amendments also require applicants to pay a nonrefundable program fee to NYSDEC with the submission of an executed brownfield cleanup agreement in the amount of $50,000. This fee can be waived if the applicant demonstrates financial hardship; however, the fee does not qualify for any of the available tax credits. To demonstrate financial hardship, the applicant must show that but for the program fee, remediation of the brownfield site would not be economically viable. When evaluating financial hardship, NYSDEC will consider whether the applicant has waived the rights to tax credits, whether the location of the proposed brownfield site is in a disadvantaged community or the proposed brownfield site is being developed as an affordable housing project, the assets and income of the applicant, and any other factors NYSDEC deems relevant. NYSDEC must establish regulations governing the demonstration of financial hardship.
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