The amendments to the New York State Brownfield Cleanup Program (BCP) became effective on July 1st—that is except for two key tax credit eligibility criteria for properties located in New York City. Moreover, the rollout of an important alternative to the BCP will be delayed until 2016.
As regular readers of this blog are aware, Governor Andrew Cuomo and the State Legislature agreed to sweeping changes to the BCP as part of the 2015-16 budget agreement. Among the key changes was that sites located in NYC would not be eligible for the Tangible Property Cost tax credit (TPC) unless they satisfied one of four tests commonly referred to as the TPC “gates”. Another important change was a curtailment of the costs that would be eligible for the Site Preparation Cost tax credit (SPC). The changes to the SPC apply state-wide.
The 2015 BCP Amendments provided that the changes would take effect on July 1st provided the New York State Department of Environmental Conservation (NYSDEC) published a draft rule providing definitions of the “Affordable Housing” and “Underutilized” TPC gates. NYSDEC published its draft rule in the June 10th New York State Register. While the proposed “Affordable Housing” gate is very broad, the “Underutilized” gate is very narrow. Click HERE for our blog post discussing the proposed rule .
Not surprising, NYSDEC was swamped with applications seeking to enroll in the BCP before the TPC and SPC changes went into effect. Following the publication of the May 27th Environmental Notice Bulletin (ENB), NYSDEC ceased accepting BCP applications so that the agency could revise its forms and procedures. On July 1st, NYSDEC unveiled its new BCP application form on its website along with some additional guidance on how the agency will process and handle the applications. The new application which requests significantly more detailed information can be accessed HERE. Look for our forthcoming blog post that will discuss the new application requirements and procedures .
Program Not Fully Operational Yet for NYC Sites
Although NYSDEC is once again accepting BCP applications, the program is not fully operational for some NYC sites. This is because the “Affordable Housing” and “Underutilized” definitions will not be finalized until October. While NYSDEC may now make ELIGIBILITY determinations for NYC sites, the agency cannot yet make any determination on if the project qualifies for the “Affordable Housing” or “Underutilized” gates since these regulation establishing these definitions is not yet effective. In other words, an applicant may be accepted into BCP during the summer but it will not learn if it qualifies for the “Affordable Housing” or “Underutilized” gate until the middle of the Fall. This raises an interesting conundrum for applicants seeking to confirm that the site is eligible for the “Underutilized” TPC. gate since according to the instructions for the new BCP application, the “Underuitilized” determination can only be made at the time of the application.
One of the TPC gates that are immediately effective in NYC is that a site be at least 50% is in an Environmental Zone (En-Zone). The En-Zones consist of census tracts with a poverty rate of at least 20% and an unemployment rate of at least 125% of the New York State unemployment rate, or a poverty rate of at least double the rate for the county in which the tract is located. The NYS Department of Labor has developed En-Zones based on the 2009-2013 American Community Survey. To help applicants determine if their sites are located in an En-Zone, NYSDEC now has a webpage providing downloadable En-Zone maps .
BCP-EZ Program Delayed
In addition to the delayed implementation of the two TPC gates, NYSDEC announced that it does not expect to promulgate proposed rules for the BCP-EZ until early 2016. As a result, the agency said it is unlikely the BCP-EZ program will become available until the summer of 2016.
For sites in NYC, the voluntary cleanup program administered by the Mayor’s Office of Environmental Remediation (OER) remains a viable BCP alternative for parties with moderately contaminated sites who are not interested in tax credits. Look for a forthcoming blog on some of the new initiatives that OER will be implementing to jump start brownfield projects in NYC.
One Last Set of Bills for BCP Volunteers
Finally, the 2015 BCP amendments provide that parties accepted into the BCP as a Volunteer will no longer have to pay state oversight costs beginning July 1, 2015. However, this change did not remove the obligation to pay state costs incurred up to that date. Accordingly, applicants should expect to receive final invoices from NYSDEC for oversight cost incurred up to the July 1st effective date.