Bill Text: CT HB05436 | 2018 | General Assembly | Comm Sub
Bill Title: An Act Concerning Certain Property Tax Agreements Between Municipalities And Prospective Purchasers Of Brownfields And Abandoned Properties And Establishing A Brownfield Remediation Tax Credit.
Spectrum: Committee Bill
Status: (Introduced - Dead) 2018-03-27 - Favorable Change of Reference, Senate to Committee on Finance, Revenue and Bonding [HB05436 Detail]
Download: Connecticut-2018-HB05436-Comm_Sub.html
General Assembly |
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February Session, 2018 |
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AN ACT CONCERNING CERTAIN PROPERTY TAX AGREEMENTS BETWEEN MUNICIPALITIES AND PROSPECTIVE PURCHASERS OF BROWNFIELDS AND ABANDONED PROPERTIES AND ESTABLISHING A BROWNFIELD REMEDIATION TAX CREDIT.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Subsection (a) of section 12-81r of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):
(a) Any municipality may (1) enter into an agreement with the owner or prospective owner of any real property to abate the property tax due as of the date of the agreement for a period not to exceed seven years if the property has been subject to a spill, as defined in section 22a-452c, and the owner or prospective owner agrees to conduct any environmental site assessment, demolition and remediation of the spill necessary to redevelop the property. Any such tax abatement shall only be for the period of remediation and redevelopment and shall be contingent upon the continuation and completion of the remediation and redevelopment process with respect to the purposes specified in the agreement. The abatement shall cease upon the sale or transfer of the property for any other purpose unless the municipality consents to its continuation. The municipality may also establish a recapture provision in the event of sale provided such recapture shall not exceed the original amount of taxes abated and may not go back further than the date of the agreement; (2) enter into an agreement with a prospective purchaser of any real property that is a brownfield, as defined in section 32-760, or deemed by the municipality to be abandoned, to forgive all or a portion of the principal balance and interest due on delinquent property taxes for the benefit of [any] such prospective purchaser, [who has obtained an environmental investigation or remediation plan approved by the Commissioner of Energy and Environmental Protection or a licensed environmental professional under section 22a-133w, 22a-133x or 22a-133y and completes such remediation plan for an establishment, as defined in section 22a-134, deemed by the municipality to be abandoned or a brownfield, as defined in section 32-760] provided such prospective purchaser has agreed to (A) enter into a program for the remediation of the property pursuant to section 22a-133x, 22a-133y, 32-768 or 32-769, or (B) complete the investigation and remediation of the property pursuant to section 22a-134; (3) enter into an agreement with the owner or prospective owner of any real property to fix the assessment of the property as of the last assessment date prior to commencement of remediation activities for a period not to exceed seven years, provided the [property has been the subject of a remediation approved by the Commissioner of Energy and Environmental Protection or verified by a licensed environmental professional pursuant to section 22a-133w, 22a-133x, 22a-133y or 22a-134] owner or prospective owner has agreed to (A) enter into a program for remediation of the property pursuant to section 22a-133x, 22a-133y, 32-768 or 32-769, or (B) complete the investigation and remediation of the property pursuant to section 22a-134; or (4) forgive all or a portion of the principal balance and interest due on delinquent property taxes for the benefit of any Connecticut brownfield land bank, as defined in section 32-760, that has acquired or will acquire any real property within the municipality.
Sec. 2. (NEW) (Effective July 1, 2018, and applicable to income years commencing on or after January 1, 2018) (a) As used in this section, the following terms shall have the following meanings unless the context clearly indicates another meaning:
(1) "Brownfield" has the same meaning as provided in section 32-760 of the general statutes;
(2) "Brownfield remediation plan" means any written narrative or plan for the substantial remediation of a brownfield, including, but not limited to, the investigation and remediation of any release or threatened release of pollution to soil or groundwater at the brownfield or the abatement of hazardous building materials, that is submitted to and approved by the commissioner, in consultation with the Commissioner of Energy and Environmental Protection;
(3) "Commissioner" means the Commissioner of Economic and Community Development;
(4) "Completion of the brownfield remediation" means the documentation by an owner of the completion of a brownfield remediation plan to the satisfaction of the commissioner, including, but not limited to, the filing of either a verification or interim verification that meets the requirements of section 22a-133x, 22a-133y or 22a-134 of the general statutes, or the written determination by the Commissioner of Energy and Environmental Protection that (A) the investigation of the brownfield has been performed in accordance with prevailing standards and guidelines, and (B) the remediation has been completed in accordance with the remediation standards, except that, for remediation standards for groundwater: (i) The selected remedy is in operation but has not achieved the remediation standards for groundwater, (ii) there is an identified long-term remedy being implemented to achieve groundwater standards, along with an estimated duration for such remedy, and established ongoing operation and maintenance requirements for continued operation of such remedy, and (iii) there are not current exposure pathways to the groundwater area that have not yet met the remediation standards;
(5) "Department" means the Department of Economic and Community Development;
(6) "Owner" means any person, firm, limited liability company, nonprofit or for-profit corporation or other business entity or municipality that (A) holds title to a brownfield and undertakes a brownfield remediation plan, and (B) did not establish, create or maintain a source of pollution to the waters of the state for purposes of section 22a-432 of the general statutes and is not responsible pursuant to any other provision of the general statutes for any pollution or source of pollution on such brownfield;
(7) "Qualified expenditures" means the expenditures associated with the investigation, assessment and remediation of a brownfield, including, but not limited to: (A) Soil, groundwater and infrastructure investigation; (B) assessment; (C) remediation of soil, sediments, groundwater or surface water; (D) abatement; (E) hazardous materials or waste removal and disposal; (F) long-term groundwater or natural attenuation monitoring; (G) (i) environmental land use restrictions, (ii) activity and use limitations, or (iii) other forms of institutional control; (H) reasonable attorneys' fees; (I) planning, engineering and environmental consulting; and (J) remedial activity to address building and structural issues, including, but not limited to, demolition, asbestos abatement, polychlorinated biphenyls removal, contaminated wood or paint removal and other infrastructure remedial activities. "Qualified expenditures" do not include expenditures funded for such investigation, assessment, remediation and development directly through other state brownfield programs administered by the commissioner.
(b) (1) The department shall administer a system of tax credit vouchers within the resources, requirements and purposes of this section for the remediation of a brownfield by an owner.
(2) The credit authorized by this section shall be available in the tax year in which the completion of the brownfield remediation takes place. In the case of a brownfield remediation plan that is completed in phases, the tax credit shall be prorated to the identifiable portion of the completed brownfield remediation. If the tax credit is more than the amount owed by the taxpayer for the year in which the completion of the brownfield remediation takes place, the amount that is more than the taxpayer's tax liability may be carried forward and credited against the taxes imposed for the succeeding five years or until the full credit is used, whichever occurs first. A tax credit that is reserved pursuant to this section may be carried forward (A) to the year in which the completion of the brownfield remediation takes place, (B) in the case of a brownfield remediation plan that is completed in phases, to the year in which the phase is completed, provided the tax credit is prorated to the identifiable portion of the completed brownfield remediation, or (C) as otherwise provided in this subdivision.
(3) In the case of a brownfield remediation plan that is completed in phases, the department may issue vouchers for the identifiable portion of the completed brownfield remediation.
(4) If a credit is allowed under this section for the remediation of a brownfield with multiple owners, such credit shall be passed through to such owners, or persons designated as partners or members of such owners, pro rata or pursuant to an agreement among such owners, or persons designated as partners or members of such owners, documenting an alternative distribution method without regard to other tax or economic attributes of such owners.
(5) Any owner entitled to a credit under this section may sell, assign or otherwise transfer such credit, in whole or in part, to one or more persons, as defined in section 12-1 of the general statutes, provided any credit, after issuance, may be sold, assigned or otherwise transferred, in whole or in part, not more than three times. Such transferee shall be entitled to offset the tax imposed under chapter 207, 208, 209, 210, 211 or 212 of the general statutes as if such transferee had incurred the qualified expenditure.
(6) If a credit under this section is sold, assigned or otherwise transferred, whether by the owner or any subsequent transferee, the transferor and transferee shall jointly submit written notification of such transfer to the department not later than thirty days after such transfer. The notification after each transfer shall include the credit voucher number, the date of the transfer, the amount of the credit transferred, the tax credit balance before and after the transfer, the tax identification numbers for both the transferor and the transferee and any other information required by the Commissioner of Revenue Services. Failure to comply with this subsection shall result in a disallowance of the tax credit until there is full compliance on the part of the transferor and the transferee, and for a second or third transfer, on the part of all subsequent transferors and transferees.
(7) The department shall provide a list to the Commissioner of Revenue Services, on an annual basis, detailing the credits that have been approved for the most recent fiscal year and all sales, assignments and transfers thereof that were made under this section for said fiscal year.
(c) For the purpose of seeking a tax credit voucher pursuant to subsection (b) of this section, prior to beginning any brownfield remediation, the owner shall submit to the commissioner a tax credit application on forms provided by the commissioner and with such information the commissioner deems necessary, including, but not limited to: (1) A brownfield remediation plan; (2) a description of the proposed brownfield remediation and redevelopment project; (3) an explanation of the expected benefits of the proposed project; (4) information concerning the financial and technical capacity of the applicant to undertake the proposed project; (5) an estimate of the qualified expenditures; and (6) if the owner plans to undertake the brownfield remediation in phases, a complete description of each such phase, with anticipated schedules for the completion of brownfield remediation and an estimate of the qualified expenditures in each phase. The commissioner may charge any owner seeking a tax credit voucher pursuant to this subsection an application fee in an amount not to exceed five thousand dollars to cover the cost of administering the program established pursuant to this section. If an application is not approved in one fiscal year but is resubmitted in a subsequent fiscal year, the commissioner may waive the application fee for the resubmitted application.
(d) The commissioner may approve, reject or modify any application properly submitted in accordance with the provisions of this section. In reviewing an application and determining whether to issue tax credit vouchers, the commissioner shall consider the following criteria: (1) The availability of tax credits for the applicable fiscal year; (2) the estimated eligible costs; (3) the relative economic condition of the municipality in which the brownfield is located; (4) the degree to which a tax credit under this section is necessary to induce the applicant to undertake the project; (5) the public health and environmental benefits of the project; (6) the relative benefits of the project to the municipality, the region and the state, including, but not limited to, the extent to which the project will likely result in a contribution to the municipality's tax base, the retention and creation of jobs and the reduction of blight; (7) the time frame in which the contamination occurred; (8) the length of time the brownfield has been abandoned; and (9) such other criteria as the commissioner may establish consistent with the purposes of this section.
(e) The commissioner shall issue tax credit vouchers on a competitive basis, based on a request for applications occurring semiannually in April and October. The commissioner may increase the frequency of requests for applications and awards depending on the number of applicants and the availability of tax credits for the applicable fiscal year.
(f) If the commissioner approves an application for a tax credit voucher, the department shall reserve for the benefit of the owner an allocation for a tax credit equivalent to the lesser of (1) fifty per cent of the projected qualified expenditures, or (2) two million dollars.
(g) Following the completion of the brownfield remediation plan in its entirety or in phases to an identifiable portion of the brownfield, any owner who seeks a tax credit voucher pursuant to subsection (b) of this section shall notify the commissioner that such completion of the brownfield remediation has occurred. Such owner shall provide the department with documentation of the remediation performed on the brownfield, evidence of the completion of the brownfield remediation and certification by a licensed environmental professional of the qualified expenditures incurred as part of the completion of the brownfield remediation plan. The commissioner, in consultation with the Commissioner of Energy and Environmental Protection, shall review such remediation and verify its compliance with the brownfield remediation plan. Following such verification, the department shall issue a tax credit voucher to such owner in an amount equivalent to the amount of the qualified expenditure, provided such amount does not exceed the amount reserved under subsection (f) of this section. In order to obtain a credit against any state tax due that is specified in subsection (h) of this section, the holder of the tax credit voucher shall file the voucher with the holder's state tax return.
(h) The Commissioner of Revenue Services shall grant a tax credit to a taxpayer holding the tax credit voucher issued in accordance with subsections (b) to (g), inclusive, of this section against any tax due under chapter 207, 208, 209, 210, 211 or 212 of the general statutes in the amount specified in the tax credit voucher. Such taxpayer shall submit the voucher and the corresponding tax return to the Department of Revenue Services.
(i) The aggregate amount of all tax credit vouchers that may be reserved by the department upon approval of tax credit applications pursuant to subsections (b) to (h), inclusive, of this section shall not exceed ten million dollars in any fiscal year. No project may receive tax credits in an amount exceeding two million dollars.
(j) The commissioner may adopt regulations, in accordance with chapter 54 of the general statutes, to implement the provisions of this section.
(k) Not later than October 1, 2019, and annually thereafter, the department shall report, in accordance with section 11-4a of the general statutes, the total amount of tax credit vouchers reserved for the prior fiscal year pursuant to subsections (b) to (j), inclusive, of this section, to the joint standing committees of the General Assembly having cognizance of matters relating to commerce and finance, revenue and bonding. Each such report shall include the following information for each project for which a tax credit voucher has been reserved: (1) The total project costs; and (2) the value of the tax credit vouchers reserved pursuant to subsection (f) of this section.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
October 1, 2018 |
12-81r(a) |
Sec. 2 |
July 1, 2018, and applicable to income years commencing on or after January 1, 2018 |
New section |
CE |
Joint Favorable Subst. C/R |
FIN |