BROWNFIELDS BILL KEY TO ECONOMIC REVITALIZATION
Goal is to Focus Tax Dollars on Brownfields Clean-up

Governor Eliot Spitzer today proposed legislation that would restructure and improve the state’s brownfields program. If adopted by the State Legislature, it would redirect state tax dollars to provide real incentives for cleanups of brownfields development sites in order to create “shovel ready” land across the state for development purposes.

Brownfields sites are ones that cannot be developed because of toxic contamination. The contamination is typically not severe enough to warrant a more robust clean up under the Superfund law, but poses health and environmental risks if development occurs without some remediation.

The Brownfields proposal would:

• Change the existing brownfields tax credit structure to cover the full cost of brownfields remediation while providing additional incentives to encourage development of newly remediated sites. Current law provides tax credits for the construction of buildings on cleaned-up sites and other costs unrelated to clean up;
• Revise tax credits to encourage parties to undertake more rigorous clean-up efforts that adhere to higher standards;
• Require that participating parties responsible for contributing to pollution at a site pay a greater percentage of clean-up costs; and
• Expand reporting requirements by the recipients of the tax credits to provide the state with more accurate data on a more frequent basis.

In 2003, a new brownfields law was adopted by the State Legislature. An analysis of the first 25 projects certified and approved under the program indicates that only a small fraction of the tax credits granted were related to remediation costs. Current law provides that a percentage of the total development costs beyond remediation be paid to parties for development of brownfields sites and thus the existing cost of the program has significantly exceeded original projections.

“An effective brownfields program is essential to rebuilding blighted areas and revitalizing Upstate cities,” said Governor Spitzer. “This proposal will revitalize a lagging state program by increasing the amount of funds available for site remediation and re-development. The current law contains no protections to ensure that the funds directed toward economic development are wisely used or bear any relationship to the number of jobs created, leaving the state with an open-ended liability while failing to achieve the law’s intent of cleaning up contaminated sites.”

Commissioner of the Department of Environmental Conservation Pete Grannis said: “This bill offers a powerful solution to the obstacles in the way of brownfields redevelopment. By offering dollar for dollar credits for 100 percent of the cleanup costs, this legislation would spur significant redevelopment of contaminated sites and protect the environment and public health. Combined with its important fiscal caps to protect against financial windfalls, and enhanced tax credits for more aggressive cleanups, this balanced legislation is a blueprint for cleaning up brownfields.”

Executive Director of the New York State Conference of Mayors, Peter A. Baynes said: “There is clear consensus that previous attempts at creating a thriving brownfields program in New York have not achieved their intended goal. NYCOM is confident, however, that the brownfields reforms proposed by Governor Spitzer to the current brownfields clean-up and redevelopment law will be a key step in jump starting this critically important -- but largely underutilized -- program. The amendments will help this economic and environmental program reach its full potential, while spurring revitalization in upstate and urban areas plagued with eroding tax bases and declining population.”

Parties that have remediation plans approved by the Department of Environmental Conservation and actual remediation underway will be governed by the existing tax credit structure.