Relates to eligibility for acceptance into the brownfield cleanup program; repealer

* Amend the definition of a "brownfield site" to mean sites where contamination is known to exceed applicable health-based or environmental standards or is reasonably expected to be present based on historic commercial or industrial use of the site as established by a phase I report.

* Amend the definition of "brownfield site cleanup agreement" to mean that an applicant's acceptance of the terms of participation in the Brownfields Cleanup Program, as demonstrated by an affirmative response to the Department's notice of acceptance into the program.

Section 2 - Amends section 27-1407 of the ECL to provide that participants in the Brownfield Cleanup Program that is also seeking to receive the tangible property brownfield redevelopment tax credit provide additional information.

* Such information would include information sufficient to demonstrate:

o That the site has been abandoned for at least 15 years; o That the site is part of or adjacent to an environmental zone; o That the projected cost of the investigation and cleanup exceeds the appraised value of the property absent contamination; or o The site is to be developed as affordable housing within a low or moderate income census tract. * A report demonstrating that the site requires remediation; and * For sites located within a brownfield opportunity area (BOA), a demonstration that the development of the site will be in conformance with a BOA plan.

Section 3 - Amends subdivision 3 of section 27 -1407 of the ECL to increase the number of days the Department has to determine the completeness of an application from 10 to 30 days.

Section 4 - Amends subdivision 6 of section 27-1407 of the ECL to provide that the Department's notification of acceptance into the BCP also includes a determination of whether the applicant has fulfilled the requirements to receive tangible property tax credits.

Lots of time is wasted negotiating what should be baseline provisions

Section 5 - Amends paragraphs (c) and (d) of subdivision 8 of section 27-1407 of the ECL to authorize the Department to deny an application if the applicant has previously failed to comply with an agreement or order in any remediation program.

Section 6 - REPEALS section 27-1409 and adds a new section 27-1409 to establish the terms which shall be accepted by default by an applicant who affirmatively chooses to enter the program upon acceptance by the Department. The applicant must provide such affirmative notification within 15 days of the Department's acceptance. The default terms and conditions include: the affected site's boundaries; the applicant shall pay for the State's costs; disputes will be resolved in accordance with Department regulations; the State will be immune from liability for acts or omissions in the discharge of the Department's responsibilities; the Department's authority to terminate participation if the applicant fails to substantially comply with the BCP's statutory and regulatory terms and conditions; for purposes of remediation liability, the applicant is not an operator of a brownfield site based solely upon participation in the BCP; the applicant shall, within 90 days of approval, conduct investigation and/or remediation activities pursuant to work plans approved by the Department; the applicant shall prepare and implement a citizen participation plan; and the applicant waives its right to make a claim against the State's environmental protect ion and spill compensation fund.

Section 7 - Two new subdivisions 6 and 7 are added to section 27-1411 of the ECL to provide that an applicant shall commence work within 90 days of approval and complete work plan activities as scheduled in the plan. And to require applicants to submit schedules with the submission of any work plan.

Section 8 amends subdivision 3 of section 27 -1419 of the ECL to create a new formula for the tangible tax credits for applicants entering the program after July 1, 2010. The amended formula maintains the 10% to 24% range of refundable tax credits, but modifies the formula to:

* establish an automatic 10% baseline credit * raise the award for a location in an Environmental Zone from 8% to 10% of development costs

and also grants sites in conformance with a BOA 10%, sites in both an EnZone and BOA would be allowed 12%; * provide an additional 4% credit for green buildings

Section 9 - Amends subdivision 5 of section 27-1419 of the ECL to add two new criteria for the modification or revocation of the certificate of completion by the Department:

* if an applicant misrepresents a material fact for the purpose of receiving tangible property credits; or * if the easement or covenant granted for the participating site does not provide an effective or enforceable means of ensuring the performance of maintenance, monitoring or operating requirements.

Section 10 - Amends subdivision 1 of section 27-1423 of the ECL to make a technical amendment.

Section 11 -- Amends section 27-1429 of the ECL to clarify that whether contamination is on or off site, the Department is exempt and may exempt an applicant from permit requirements under the ECL as long as all requirements are met.

Section 12 - Amends subdivision 1 of section 27-1431 of the ECL to allow the Department site access to ensure compliance with the site management plan, to ascertain the current use of the site, and to take samples.

Section 13 - Adds a new section 16-t to the urban development corporation act to establish the "Brownfields Shovel-Ready Program" under the auspices of the Urban Development Corporation (a:k.a. Empire State Development Corporation (ESDC)). Under this program,

ESDC would have the power to purchase contaminated property in underserved communities and finance the acquisition, assessment, cleanup, demolition, and site preparation and construction costs associated with the site's redevelopment. ESDC would give priority to sites located in BOAs.

Section 14 - Amends section 21 of the tax law to modify the tangible property tax credit to clarify that site preparation costs, not included in the site preparation credit, may be eligible for the tangible property computation, and to make a technical correction by explicitly stating that sites placed in service prior to the issuance of a certificate of completion will be eligible for tax credits.

Section 15 - REPEALS subparagraph (D) of paragraph 3-a of subdivision (a) of section 21 of the tax law.

Section 16 -- Amends paragraphs 5 & 6 of subdivision (a) of section 21 of the tax law to clarify the dates for which the current tax credits are in effect.

Section 17 -- Amends subdivision b of section 21 of the tax law to redefine site preparation costs for sites entering the BCP on or after July 1, 2010 to include only those costs attributable to activities required by a Department approved work plan.

Section 18 -- Adds a new subdivision (e) section 171-r of the tax law to require the Commissioner of Tax and Finance to supplement the annual report on tax credits with a report on brownfield tax credits claimed for the years prior to 2008.

Section 19 - Amends subdivision b of section 970-r of the general municipal law to direct the secretary of State to establish criteria for determining whether proposed or actual development of a brownfield site within a brownfield opportunity area (BOA) is in conformance with the goals and priorities established for that applicable BOA.

Section 20 - Amends section 970-r of the general municipal law to clarify that brownfield opportunity areas may receive state assistance rather than "proposed" brownfield opportunity areas.

Section 21 - Adds a new paragraph h to 970-r of the general municipal law to authorize the Commissioner of DEC to allocate any unexpended brownfield opportunity area grant funds to the Secretary of State.

Section 22 - Amends section 970-r of the general municipal law to add requirements to brownfield opportunity area (BOA) plans, including:

* existing detailed assessments of individual brownfield sites; * known data about the environmental conditions of properties in the BOA; * ownership of the properties in the BOA; * the goals and objectives for economic revitalization of the BOA; * identification of the publicly controlled and developable land and buildings within the BOA; and * the development of strategies for improving the likelihood that such strategic sites are reused or developed consistent with the BOA plan.

Section 23 - Amends subdivision 4 of section 970-4 of the general municipal law to provide that the Secretary of State shall determine whether a qualified site subject to a brownfield site cleanup agreement is consistent with a BOA plan.

Section 24 - Amends subdivision 5 of section 970-r of the general municipal law to require the that when the Secretary of State awards a BOA grant, the Secretary also notify the division of housing and community renewal, DEC, the Department of Transportation, the Office of Parks, Recreation and Historic Preservation, to request for relevant information concerning land uses, capital projects and plans relating to properties within the BOA.

Section 25 - Amends subdivision 6 of section 970-r of the general municipal law to clarify what brownfield cleanup implementation strategies must be included in the BOA plan.

Section 26 - Amends subdivision 7 of section 970-r of the general municipal law to require the Secretary of State to promulgate rules that contain criteria and timeframes for review and approval of amendments to a BOA plan.

Section 27 - Amends subdivision 8 of section 970-r of the general municipal law to waive pre-nomination studies for BOA applicants that have satisfactorily submitted sufficient equivalent information.

Section 28 - provides a severability clause applicable to the act.

Section 29 -- Effective immediately.

Justification

The Brownfield Opportunity Area program offers a tool for reversing the economic and environmental forces that continue to drive our upstate cities from Yonkers to Buffalo into despair and to feed the seemingly inexorable creep of sprawl development. At the same time, it offers cities across New York a ready-made tool to sustainably achieve their long term growth goals and address its dwindling land supply while accomplishing environmental justice in low income communities.

The centerpiece of the BOA program is this area-wide approach to reclaiming brownfields and revitalizing neighborhoods so that new community anchors are established, creating value and reversing the spiral of deterioration, decline, and decay. The BOA program provides flexible funding for market and infrastructure studies and other activities needed to carry out a constructive visioning process, based not on what is there now or what the real estate market might otherwise attract or resist, but on what the community needs and wants. By looking at the area as a whole, the most productive, innovative and appropriately scaled end uses will be planned, creating new opportunities and helping put properties back on the tax rolls with new job creation, housing, and retail opportunities catalyzing the reversal of economic decline and disinvestment which in turn will allow for further community improvement.

Unfortunately, the BOA Program has not yet had a chance to work. It has been stymied by delays, confusion, redundancy, and a lack of clear government accountability. Nevertheless, the program continues to hold tremendous promise. The 2003 Brownfields Law offers Redevelopment Tax Credits to, in effect, reimburse a developer for between 10% and 24% of the total cost of the cleanup and development of a project site. Because the Redevelopment Tax Credits are "refundable," the developer will receive a tax reduction to the extent there is tax liability, and the remainder of the credited amount will be awarded in cash. The percentage of reimbursement varies

according to the level of cleanup, whether the developer is an individual or a business, and whether the site is in an Environmental Zone or "En-zone," an area delineated by relatively high unemployment and poverty rates.

In addition, the tax credits created by the Brownfield Law have not been working as intended. The principal problem is the way brownfield tax credits are awarded. Essentially, any site that enters the Brownfield Cleanup Program (BCP), regardless of public benefit, relative cost of cleanup compared to development, consistency with economic development objectives, or compatibility with a regional or municipal plan, generates brownfield tax credits as-of-light. Meanwhile, because the incentives are not targeted, the least marketable brownfield sites due to their location or level of contamination continue to be ignored, effectively eliminating from the Brownfield Law its intended use as a tool for urban revitalization.

This programmatic flaw has also had another insidious consequence. Because the tax credits are so very generous and are available as of right to any participating site, the State has sought to limit tax credit outlays by limiting eligibility into the BCP, leaving many sites that belong in a cleanup program because they contain levels of contamination above existing health-based cleanup standards in limbo, without a government program to oversee remediation, award liability protection to owners and builders who eliminate health threats, or offer needed financial assistance. Brownfields Shovel-Ready Program This bill develops a new program under the auspices of the Empire State Development Corporation (ESDC) to specialize in Brownfield recycling and manufacturing-center development. Under the new program, ESDC would assist expansion-minded manufacturing firms or affordable housing developers, in site selection, construction financing, and workforce development.

Under this program, ESDC is encouraged to purchase contaminated property in underserved communities and finance the acquisition, assessment, cleanup, demolition, and site preparation and construction costs associated with the site's redevelopment. Priority is given priority to sites located in BOAs.

Upon completion of the remediation, ESDC would sell parcels of the property to manufacturers and other business for $1 and in return for a clean site sold for $1, manufacturers would agree to:

* build quality buildings (at least $38 a square foot), * meet the Leadership in Energy and Environmental Design (LEED) Green Building Rating System in the building construction, * provide new jobs (at least one job per 1,000 square feet of building space), * pay a living wage (at least $9.50 an hour plus benefits), and

* hire seventy percent of the workforce from the local community.

In the case that a remediated site is sold to an affordable housing developer, the developer shall build housing units in accordance with the State's affordability guidelines.

Legislative history

New bill.

Fiscal implications

To be determined.

Local fiscal implications

To be determined.

Effective date

Immediately.