S.1564 (Thompson)




S.1564 (Thompson)


Brownfields Tax Credits



The Business Council respectfully opposes this legislation, which would modify eligibility standards for, and calculation of, site redevelopment credits under the state's brownfield program.

  • The bill would modify the definition of a brownfield site, to a site where presence of contamination is known or suspected.  We support a definition tied to contamination exceeding a promulgated environmental standard such as New York's groundwater standard or soil based cleanup objectives. We urge the Senate to also consider acceptance of a federal or state health based standard as a criteria for determining program eligibility.  We believe these changes will create a less subjective determination of eligibility. A standards based eligibility criterion would provide potential developers with more of a bright line for assessing site eligibility.
  • It would make any site with a final hazardous waste management (RCRA) permit ineligible for the brownfield program.  As RCRA permits for on-site storage of hazardous wastes are among the most common DEC-issued permits, this change would make a significant percentage of New York's industrial sites ineligible for the brownfield program, including sites that are not presently subject to any enforcement authority under New York State law.  The Business Council supports continuation of the existing treatment of RCRA permitted sites, excluding from brownfield program eligibility only those sites subject to an ongoing enforcement action under the state's solid and hazardous waste permitting programs, unless a volunteer were to bring such a site into the program.
  • It would require that a brownfield site located within a Brownfield Opportunity Area (BOA) be developed consistent with a brownfield opportunity plan in order to be eligible for any brownfield redevelopment credit.  We question the appropriateness of this provision, since BOA designations can be developed by community groups without local government participation, and since BOA designations can be applied to properties over objection of the property owner.  The law gives very little guidance as to the type or scope of development requirements or restrictions that can be placed on property within a BOA.  Also, there is no consideration of whether such proposed redevelopments would be economically practicable.  This places another layer of approval, a significant uncertainty on brownfield  redevelopment projects, and over state incentives for such projects.
  • While we understand the interest in providing better data on the program's performance, we strongly oppose the provision requiring disclosure of taxpayer-specific tax liability data.  Not only is this proposal unprecedented in the state's business tax law, it serves absolutely no programmatic purpose.  In our view, the correct purpose of this proposed report is to identify the overall level of tax credits provided, their cost-effectiveness, and their impact on the state's financial plan.   The detailed reporting proposed here suggests a reassessment of tax credits based on the tax status of their recipients, an approach that has no basis in the current brownfield tax credit program.
  • The bill would change the cap on the brownfield redevelopment tax credit to $25 million. It is not clear why the tax credits need to be reduced even further when there has still not been a cost benefit analysis of the upside of the program as it currently operates.  The Department of Taxation and Finance just released its 2008 report showing that $190 million in credits were awarded on the projects that initially were allowed to go through the program with $1.15 billion worth of projects built.
  • It would make brownfield program “participants” ineligible for the tangible property (i.e., post-remediation redevelopment) tax credit.  The Business Council believes this proposal is counterproductive, as it would eliminate a significant financial incentive for entities that may be under no legal obligation or directive to do site remediation.  Under current law, "participants" are defined as site owners and operators, other than those whose involvement with the site commenced after contamination occurred.  We believe this program is intended to promote remediation – with state oversight – and redevelopment of these types of sites currently below the state's regulatory “radar,” including remediation and reinvestment by current site owners/operators.  This proposed amendment is contrary to that important policy objective, and would make it less likely that these sites are cleaned up and redeveloped through private sector investments. 

Finally, we believe any revisiting of the state's brownfield program should consider other reform issues that will make the program more attractive to potential developers. These include making the administrative process more certain and less burdensome, addressing additional eligibility criteria as discussed above, adopting a more certain definition of “brownfield sites” and others.The Business Council agrees that legislative – and administrative – changes are necessary to make the state's brownfield program a more effective, more efficient environmental and economic development tool.  While there are some positive elements in this bill, we believe that overall it would impede, rather than improve, performance of the state's brownfield program.

For these reasons, The Business Council opposes approval of S.1564.