by Steve Dwyer
With CT Gov. Dannel P. Malloy’s signing a bipartisan state budget to stop Connecticut’s lengthy fiscal stalemate, it appears a new program to support remediation and reuse of brownfields is going forward minus any tweaking.
Within the master budget, the Connecticut General Assembly in late October passed a new program called “7/7” Brownfields Program: that creates new incentives that the Connecticut Department of Economic and Community Development (DECD) can use to reward new investors for cleaning up contaminated sites and reusing them while creating local jobs in the process. It also appears that the law would greatly remove the specter of third-party liability, which scares away many would-be stakeholders from pursuing such projects.
On Oct. 31, Gov. Malloy used his limited line-item veto power to focus only on eradicating portions of the General Assembly’s language related to a problematic tax on state’s hospitals.
The Connecticut budget impasse required Malloy to run the state using his limited executive spending authority, which in turn prompted cuts to social service programs and schools. Many municipalities also faced potential crediting rating downgrades because of the doubt over state grants.
Within 7/7 Brownfields, qualifying investors can apply a credit for the expenditures against their Connecticut state income tax liability for seven years and use the credit to offset sales and use taxes.
The 7/7 Brownfield Program is not available if the party is responsible for the contamination or pollution issues. Eligible participants must be bona fide “prospective purchasers” or innocent landowner.
To qualify as eligible under the new program, investors in brownfields will be required to apply to DECD with the following stipulations as conditions:
Description of the real property to be acquired and the proposed use;
A certification from the eligible owner that the site qualifies as a brownfield or from the municipality that the site has been underutilized or abandoned for at least 10 years;
A jobs plan that the eligible owner will submit to area high schools and regional-community technical colleges that includes the anticipated workforce needs for the proposed reuse of the property and proposed workforce training needs in order to enable such high schools and regional-community technical colleges to meet such needs;
A commitment from the eligible owner to hire not less than 30% of its workforce from students enrolled in such programs;
A written certification from the municipality supporting the application as a qualifying 7/7 site; and
Any other information required by DECD in regulations to be adopted soon.
The 7/7 Brownfields Program indicates that any 7/7 participant that seeks to redevelop and reuse a brownfield shall be able to claim the tax credit and offset sales and use tax expenditures once the brownfield remediation has been completed and verified, and the participant notifies the DECD and municipality that the cleanup work is completed.
