On June 24, 2008, the New York State Legislature passed a bill to amend the 2003 Brownfield Cleanup Program Act ("BCP Act"). The bill, which is anticipated to be signed into law by Governor Paterson, modifies the BCP Act by capping the tangible property tax credits available under the program, restructuring the site preparation credits associated with cleanup costs, and creating new reporting requirements for site owners.

The new legislation will impose a cap on the tangible property tax credits available for the redevelopment of a brownfield site, limiting credits for non-manufacturing projects to the lesser of $35 million or 3 times the site preparation costs (which include cleanup costs) and to the lesser of $45 million or 6 times the site preparation costs for manufacturing projects. Such caps will apply only to sites accepted into the BCP after June 23, 2008; sites for which the Department of Environmental Conservation ("DEC") has made a written determination of eligibility prior to June 23, 2008 are grandfathered and will not be subject to the new cap.

The calculation of tax credits associated with the cleanup of a brownfield site (i.e., site preparation and on-site groundwater remediation credits) will be restructured to increase incentives for achievement of soil cleanup objectives. Under the existing BCP Act, the maximum percentage of cleanup costs that can be recovered in tax credits is 22 percent. The new legislation will increase the maximum applicable percentage for cleanup costs to 50 percent, where soils at a brownfield site are adequately remediated to allow for unrestricted use of the property. The site preparation and on-site groundwater remediation tax credits will not be limited by a dollar cap.

The amendments eliminate confusion regarding the transferability of certificates of completion ("COC"), as well as the concomitant potential that such transfers would result in more than one taxpayer receiving tax credits for a single site, by disallowing such double-dipping and explicitly confirming the appropriateness of COC transfers.

In addition to the amended tax credit scheme, the new legislation will impose certain reporting requirements on parties developing sites under the BCP. Specifically, the bill calls for the annual submission of a "brownfield redevelopment report" after a participant’s execution of a brownfield site cleanup agreement, which report must identify, among other things, the amount of state and local taxes generated by the redevelopment of the site and the amount of real property taxes paid on behalf of the site. The information provided by BCP participants, as well as project-specific tax credit information, will be published by the DEC in its annual "brownfield credit report," which report will be required under the amended law.

With regard to the Brownfield Opportunity Area ("BOA") program, the amendments transfer responsibility for administration of the BOA program from the DEC to the Department of State.

If you have any questions about the amendments and their impact on your business, please feel free to contact us.