Presentation is loading. Please wait.

Presentation is loading. Please wait.

N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Governor’s Budget Bill Proposals for the Brownfield Cleanup, State Superfund and Environmental.

Similar presentations


Presentation on theme: "N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Governor’s Budget Bill Proposals for the Brownfield Cleanup, State Superfund and Environmental."— Presentation transcript:

1 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Governor’s Budget Bill Proposals for the Brownfield Cleanup, State Superfund and Environmental Restoration Programs Eugene Leff, Deputy Commissioner Office of Remediation & Materials Management NYS Department of Environmental Conservation January 30, 2014

2 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Background In the ten years since it was established, the Brownfield Cleanup Program (BCP) has: catalyzed the cleanup of over 150 contaminated sites statewide, incentivizing redevelopment resulted in a program that awarded in hundreds of millions in unnecessary and excessive tax credits The BCP tax credits are scheduled to sunset on December 31, 2015

3 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Purpose of the Bill This bill will: extend the brownfield cleanup program tax credits for 10 years, further reform the program and modify the Environmental Restoration Program (ERP) and exemptions for hazardous waste fees and special assessments

4 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Need for Reform The New York State Tax Reform and Fairness Commission found that eligibility for the BCP Tangible Property Credit needed to be amended to prevent development that would have gone forward without tax credits from taking advantage of the program

5 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Issue 1: BCP tax credits will sunset on December 31, 2015 If they sunset, potential economic development will be lost Brownfield sites will remain fallow or be developed without appropriate environmental cleanup and oversight A greater burden will be placed on the State- funded Superfund cleanup program, instead of being cleaned up by the private sector

6 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Solution: Continue tax credits for 10 years with program reforms Will continue successful private cleanups under state oversight Will limit state’s expensive cleanup burden Will provide certainty to developers

7 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Issue 2 : All projects get “tangible property” tax credits for development costs Not focused on sites in blighted or low-income neighborhoods or otherwise needing tax credits to advance Windfalls can go to projects that do not need state assistance to advance and are in strong real estate markets

8 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Solution: Separate BCP eligibility & Tangible Property Credit eligibility Limit eligibility for redevelopment credits to: – Properties vacant for at least 15 years (e.g., a vacant lot or a property with an empty building) or vacant and tax delinquent for 10+ years – “Upside down” properties (where the property value is less than the cost of cleanup) – Priority economic development projects that create jobs and meet prescribed criteria to be set by Empire State Development

9 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Issue 3: Site Preparation Credits cover more than cost of remediation Currently, any costs associated with preparing a site are eligible for the Site Preparation Credit This credit should be limited to cleanup costs Site preparation costs are the basis for calculating the cap on the Tangible Property (redevelopment) Credit, so that cap is higher than it should be

10 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Solution 3: Limit eligible costs to those needed for remediation, reducing cap Moving the costs not associated with remediation of the site from the site prep/ remediation credit to the tangible property credit will reduce the site prep/remediation credit appropriately This will also reduce the maximum tangible property tax credit since the cap is 3 times the site’s eligible site prep costs (or 6 times if the use will be manufacturing)

11 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Issue 4: Current BCP is the only path to a liability release from the State For many sites, a liability release is needed to get financing for the redevelopment Stakeholders have signaled that tax credits are less important than the release of liability at some sites

12 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Solution: Re-establish a voluntary cleanup option with no tax credits The Bill creates a BCP-EZ option In exchange for waiving any right to tax credits, lightly contaminated sites will be able to enter a streamlined program with State oversight BCP-EZ will enable sites to get critical liability release and obtain financing

13 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Issue 5: Many sites with NO cap on tax credits still have not been cleaned up Approximately 100 sites started in the BCP before 2008 when the caps were imposed and are still in the program but have not completed cleanup Many are likely to go beyond the current Dec. 2015 sunset date and remain eligible for unlimited tax credits

14 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Solution: Terminate these sites from BCP if not cleaned up by 12/31/15 There has been enough time for these (pre- 2008) sites to have finished the program and received a COC which would allow them to claim unlimited tax credits This will incentivize timely redevelopment These terminated sites will be allowed to reenter the new BCP subject to the reformed eligibility criteria and new tax credit structure

15 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Post-2008 Cap Sites Sites that entered the BCP after June 2008 subject to current caps will: – be required to complete their remedial programs and receive a COC by Dec. 2017 or – be terminated and allowed to re-enter the reformed BCP

16 N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Superfund/ERP In addition, the Executive Budget: Authorizes an additional $100M for State Superfund which, together with existing appropriations, is expected to fund the Program for three more years Allows $10M of these funds to be used for the Environmental Restoration Program, which funds investigation and remediation of municipally owned Brownfield sites


Download ppt "N EW Y ORK S TATE D EPARTMENT OF E NVIRONMENTAL C ONSERVATION Governor’s Budget Bill Proposals for the Brownfield Cleanup, State Superfund and Environmental."

Similar presentations


Ads by Google