New York State Brownfield Developments: Governor Cuomo Vetoes Tax Credit Extension; State Bar Recommends Reforms

On December 29, Governor Andrew Cuomo vetoed a bill that would have extended, until March 31, 2017, the deadline for sites in the New York State Brownfield Cleanup Program to finish cleanups in order to qualify for the Program’s tax credits. The current deadline is December 31, 2015.

The veto surprised many observers, since the Governor had earlier indicated that he would sign the bill.

Cuomo’s veto message noted that, while he has an “unwavering commitment to this program and its goals”, the extender did not make reforms to the Program that he considers necessary. He also noted that the bill contains additional bonding authority and appropriations for the State’s Superfund program which would have an “unplanned, direct impact on the current State fiscal plan.”

Almost contemporaneously with the veto, the New York State Bar Association’s Environmental Law Section issued a report recommending significant changes to the Program. The report was the product of a task force, co-chaired by David Freeman, that included a wide spectrum of stakeholders, including the New York League of Conservation Voters, the Environmental Defense Fund, the New York State Business Council, New Partners for Community Revitalization, the New York City Office of Environmental Remediation, the Real Estate Board of New York, and The New York City Brownfield Partnership. These stakeholder groups provided input and endorsed the overall thrust of the Section’s report, although not necessarily endorsing each and every one of the report’s recommendations.

The report’s recommendations incorporate elements from prior proposals by the Governor, the Senate and the Assembly, as well as from recommendations previously advanced by the Section. Among the key proposals are the following:

  • Broadening the definition of “brownfield site” to include any site where a contaminant is present at levels exceeding soil cleanup objectives or other environmental standards;
  • Extending the deadline for completing site cleanup to the earlier of (a) ten years after the site’s admission to the Program (as long as that date is no earlier than December 31, 2015), and (b) December 31, 2025;
  • Maintaining, in general, the existing tax credit structure for cleanup-related credits;
  • Increasing development-related tax credits for certain priority sites (e.g., affordable housing projects, and sites in En-Zones and Brownfield Opportunity Areas and reducing them for non-priority sites;
  • Creating a streamlined cleanup program for sites not seeking tax credits;
  • Allowing participation of State Superfund sites, as long as they are being cleaned up by parties not responsible for disposing hazardous materials at those sites;
  • Limiting tax credit eligibility for certain costs not directly related to remediation;
  • Reducing, or in some cases eliminating, the cost of state oversight of cleanups;
  • Eliminating hazardous waste program fees and special assessments for sites remediated under approved municipal programs; and
  • Streamlining, and making more transparent, the State’s Brownfield Opportunity Area program.

Governor Cuomo indicated in his veto message that his proposals with respect to the Program will be incorporated in the 2015-16 Executive Budget, which under state law must be passed by April 1. Thus, the next several months will see significant legislative activity concerning reform and extension of the Program.

We will keep you apprised of further developments as they occur. In the meantime, if you have any questions or would like additional information, please do not hesitate to contact us.

David J. Freeman is a Director in the Gibbons Real Property & Environmental Department.
Print