As of April 2015, New York State’s Brownfield Cleanup Program (BCP) has been extended with several technical and tax credit modifications.
This development preserves the significant financial benefits of the BCP and also provides increased certainty for planning purposes both for contaminated site owners that are currently in the BCP, and also for those who desire to enter new sites into the BCP to enhance continued use of the property or as part of a divestment strategy for the property. Learn more about the Brownfield Cleanup Program
Sites currently in the BCP will retain the previously-existing tax credit structure, although these existing sites are subject to new deadlines for completion of site remediation and associated reporting resulting in issuance of a Certificate of Completion (COC) in order to maintain eligibility for the previously existing tax credit structure. Sites accepted into the BCP after July 1st, 2015 or the effective date of newly-proposed regulations (due on or before October 1st, 2015), whichever is later, will be subject to the new tax credit structure and its associated deadlines for issuance of a COC.
Significant technical changes that can influence acceptance into the BCP or eligibility for and/or the amount of the various tax credits moving forward include:
- Significantly revised definitions of the existing terms “brownfield” and “Environmental Zone (“EN-Zone”);
- The potential for certain Class 2 State Superfund (SSF) Sites to be accepted into the BCP;
- Completely new definitions including the terms “underutilized”, “upside down”, and “affordable housing project”; and
- New deadlines for issuance of the COC based on the date that the site was accepted by the New York State Department of Environmental Conservation (NYSDEC) into the BCP.
Under the new BCP, Class 2 SSF sites may be transitioned into the BCP if the site is currently owned by a Volunteer (i.e., an entity that is not responsible for creating or contributing to the contamination at the site) or is under contract to be transferred to a Volunteer creating the possibility for clients to recover significant portions of their future environmental spend on the site via the BCP tax credits.
Significant BCP tax credit changes include:
- Eligibility “gates” for the Tangible Property Component (TPC), but only for BCP sites located within New York City;
- New limits on costs allowed for the TPC;
- Changes in applicable percentages for the TPC;
- Changes in the calculation of the Site Preparation Component;
- Changes in the calculation of the On-Site Groundwater Remediation Component;
- Elimination of the tax credit based on property taxes and jobs created; and elimination of the tax credit for environmental insurance premiums
The new law also allows the NYSDEC to establish a “BCP-EZ” Program, which is intended to provide expedited passage through the BCP in exchange for a waiver of the tax credit benefits.
ERM has experienced professionals to assist you with New York’s BCP including redevelopment planning, the BCP application process and regulatory negotiations, completing investigation and remediation, issuance of the COC, and subsequent site management after issuance of the COC.