New Partners for Community Reviatilization

New Partners for Community Revitalization

UPDATE FROM ALBANY

HARD WON AGREEMENT ON LEGISLATIVE REFORM OF BROWNFIELDS

July 2008

The Legislation (S.8717/A.11768) that passed by the Senate and Assembly and is awaiting signature by the Governor contains several important provisions that reform the State’s brownfield tax credits and brings much needed streamlining to the Brownfield Opportunity Area (BOA) program. A copy of the bill can be found at: http://assembly.state.ny.us/leg/?bn=A11768&sh=t

SUMMARY OF KEY REFORMS:

Brownfield Opportunity Area (BOA) Program:

The Legislation streamlines the BOA program by placing administration of the BOA program at the Department of State. This will reduce delays and redundancy and increase accountability - effective April 1, 2009 (to coincide with next year’s budget).

Brownfield Tax Credits (BTCs):

The Legislation re-structures how the brownfield tax credits for cleanup and redevelopment are generated. NPCR is currently evaluating the effectiveness of the restructured BTCs to advance community supported brownfield projects, and expects to issue an update to its May 2007 Report on the Use of BTCs.

Remediation Tax Credits - Tax credits will be generated for site preparation and on-site groundwater cleanup (eligible remediation costs) in accordance with the following scale:

50% of the eligible remediation costs for unrestricted use with cleanup to Track 1 levels
40% of the eligible remediation costs for residential use with cleanup to Track 2 and 3 levels
28% of the eligible remediation costs for residential use with cleanup to Track 4 levels
33% of the eligible remediation costs for commercial use with cleanup to Track 2 and 3 levels
25% of the eligible remediation costs for commercial use with cleanup to Track 4 levels
27% of the eligible remediation costs for industrial use with cleanup to Track 2 and 3 levels
22% of the eligible remediation costs for industrial use with cleanup to Track 4 levels

Tangible (Development) Tax Credits:

Residential/Commercial Uses: Tangible tax credits will be generated based on three times the amount of the remediation tax credit, capped at $35 million.
Industrial Uses: Tangible tax credits will be generated based on six times the amount of remediation tax credit, capped at $45 million.

BOA BTC Bonus - The legislation provides a tax credit bonus of 2% of the tangible tax credit for developers who build projects that are consistent with a BOA plan. This legislative 2% BOA BTC bonus sets an important precedent of targeting resources to BOAs. However, it is unclear whether 2% will be large enough to have a significant impact on community planning negotiations with developers.

Reporting Requirements: The legislation creates a number of new reporting requirements that will allow State agencies to track performance of the program; these include a Brownfield Credit Report, a Brownfield Redevelopment Report and a Brownfield Cleanup Program Report.

New York Brownfields Advisory Board: The Legislation creates a 15 member board that will be responsible for monitoring and reviewing implementation of the State’s Brownfield Programs.

What the Legislation Did Not Address:

Historic Fill sites - The Legislation does not address contaminated historic fill sites that have been excluded from the Brownfield Cleanup Program. This disqualification disproportionately impacts urban low income neighborhoods and communities of color, many of which were built on contaminated fill materials. Recent court decisions that limit the Department of Environmental Conservation’s (DEC) discretion to deny entry of projects into the Brownfield Cleanup Program have increased pressure on DEC to develop a mechanism for including some historic fill sites in the program. It is likely that this will be accomplished by regulations.

Delegated NYC Authority – Although high on Mayor Bloomberg’s priority list and a part of PlaNYC, the Legislation does not delegate authority to the City of New York to implement its own regulatory program. NPCR supports delegated authority to NYC on smaller, moderately contaminated sites, and such authority is even more important now that the legislation has failed to address contaminated historic fill sites. In the absence of legislation, NPCR is encouraging development of a City regulatory program through an administrative agreement between NYC and NYSDEC.

Increased BTC Bonus for BOAs: NPCR had advocated for a higher BTC bonus – 10% to 20% - for projects built consistent with a BOA plan so it would act as a strong incentive to encourage private developers to work hand-in-hand with residents and local municipalities in designing a common vision for their neighborhoods and ensure that the redevelopment of strategic brownfield sites would meet local needs. There are 104 predominately urban communities participating in the BOA program. BOA funds are being used to conduct feasibility studies, economic analysis, infrastructure studies, and site by site planning to advance approximately 8,000 brownfield sites and covering 90,000 study acres. Redevelopment will revitalize these economically distressed areas and also achieve smart growth by preventing the development of greenfield sites, protecting wetlands, improving public health and cleaning up toxic waste.

Increase Certainty of the BOA BTC bonus. To increase certainty, the statute should specify that the Department of State (DOS) is responsible for making the conformance determination that a project is consistent with a BOA plan; and DOS should be directed to publicly promulgate clear rules for the conformance determination. Here is bill text NPCR had proposed (inserts are in bold):

“The Department of State shall make the determination regarding whether a qualified site subject to a brownfield site cleanup agreement pursuant to section 27-1409 of the environmental conservation law is identified as a strategic site in, and conforms with, a designated brownfield opportunity area. The Department of State shall promulgate regulations to establish the process and criteria it shall apply in making determinations whether a qualified site conforms with a designated brownfield opportunity area.”

Clarify and strengthen the Preference and Priority provision in the existing Law. Providing preference and priority to advance Brownfield Opportunity Area plans is critical to revitalizing these economically distressed communities that are burdened by multiple brownfield sites and the associated disinvestment and dilapidated infrastructure. In order to formally establish preference and priority in state funding programs and sources, insert the following sentence at the § 2 . . . “970-r.5. Priority and Preference. . .”

“DOS shall, in consultation with other state agencies, issue a BOA preference and priority report within the one year of the effective date of this law identifying funding programs and sources relevant to assist in the implementation of BOA plans. State agencies shall provide preference and priority to funding programs and sources identified in the DOS report for projects in BOAs, including but not limited to, modifying its program eligibility requirements to provide for preference and priority.”

See our other recent spotlights:
June Update from the NYS Capitol
Atlantic Terrace, Brooklyn, NY