In the waning hours of this year’s legislative session, the New York State Assembly and Senate have passed identical bills extending the sunset date for tax credits under the New York State Brownfield Cleanup Program from December 31, 2015 to March 31, 2017. To qualify for such credits, sites must obtain their Certificates of Completion from the New York State Department of Environmental Conservation (DEC) by the sunset date.
As indicated in prior blogs, the Governor’s office and the Legislature have struggled mightily over the past several months to reach consensus on a comprehensive reform package for the Program. Their respective proposals contained many elements, including changing the definition of “brownfield site,” tightening eligibility standards for tangible property (development) tax credits, and establishing a streamlined cleanup program for sites not seeking tax credits.
Ultimately, consensus on exactly how to reform the Program proved elusive. The picture was complicated by the Assembly’s insistence on additional funding for Superfund cleanups and the Environmental Remediation Program, which the Governor has resisted for budgetary reasons.
However, both houses of the Legislature realized that a stopgap extension of the sunset date was needed to prevent the Program from grinding to a halt. Site owners are becoming increasingly reluctant to enter the Program because they do not know whether the tax credits under it will continue to be available. And DEC is already beginning to buckle under the strain of the increased paperwork from sites already in the Program that are desperately trying to accelerate cleanups to meet the December 2015 deadline.
Both houses passed the 15-month extender to allow the Program to operate more or less normally over the next year, and to give the Governor and the Legislature another chance next year to come to consensus on comprehensive reform of the Program.
A wild card in the equation is whether the Governor will sign the extender. In the past, he has indicated an unwillingness to extend the Program without the reforms he believes are needed. However, he will be under intense pressure from many in the environmental and business communities to approve this stopgap extension.
We will continue to follow the fate of the this legislation, and of Brownfield Cleanup Program reform generally, and will keep you posted on developments.