On June 10, 2015 the New York State Department of Environmental Conservation (DEC) published a Notice of Proposed Revised 6 NYCRR Part 375, Environmental Remediation Programs. The notice presented proposed amendments to the DEC’s Brownfield Cleanup Program (BCP) and set an effective date for those amendments on July 1, 2015. The new amendments include:
- Continuation of tax credits for 10 years (sites will have until March 31, 2026 to receive a Certificate of Completion);
- A new definition for a “Brownfield Site;”
- The addition of new BCP eligibility and Redevelopment (Tangible Property) Credit eligibility for projects located in New York City that are:
- In Environmental Zones;
- “Upside Down” or “Underutilized;” or
- Affordable Housing Projects;
- Limits to eligible costs for the Site Preparation Credit to those needed for remediation;
- A restructure with new limits to eligible costs for the Redevelopment (Tangible Property) Credit to a maximum of 24 percent with no changes to the manufacturing (6x Site Prep or $45MM) and non-manufacturing (3x Site Prep or $35MM) caps;
- A sunset of the real property tax and environmental remediation insurance credits;
- Allowance of Orphan Class 2 State Superfund and RCRA sites into the BCP;
- Elimination of DEC oversight costs for volunteers;
- Reestablishment of a voluntary cleanup option (BCP-EZ) that has no tax credits; and
- Authorization of funding to the State Superfund and Environmental Restoration Programs.
Of the terms defined and redefined in the amendments, the term “Brownfield Site” has been redefined as “any real property where a contaminant is present at levels exceeding the soil cleanup objectives or other health-based or environmental standards, criteria or guidance adopted by the Department that are applicable based on the reasonably anticipated use of the property, in accordance with applicable regulations.” As a result, site investigation work is now required to demonstrate that the project meets the new definition as part of the BCP application. The cost associated with the investigation would be incurred prior to the project’s acceptance into the BCP and are therefore ineligible for tax credits.
Site Preparation Credit will be limited to only costs needed for remediation. The DEC indicates that, “the reforms will move costs not associated with investigation, remediation or qualification for a certificate of completion for the site from the Site Preparation Credit to the redevelopment credit, including costs of foundations which exceed the equivalent of a cover system as required by regulations.” As an example of this new guideline, the equivalent cover system would be limited to one foot of clean soil for commercial and manufacturing sites and two feet of clean soil for residential sites. All foundation costs that exceed the equivalent cover system will no longer be eligible for Site Preparation Credit.
Roux Associates is exceptionally positioned to provide expert advice regarding interpretation of the new rules and to assist you with the application to the BCP program and management of your existing properties. If you are interested in learning more about the new amendments to the DEC’s BCP program and/or would like a technical brown-bag tailored to your needs, please click below and we would be happy to assist you.