Senate Bill S4204

                                 BILL NUMBER:  S4204

 TITLE OF BILL :
An act to amend the tax law, in relation to a brownfield redevelopment
tax credit


 PURPOSE :
This bill would cap the tax credits available for the redevelopment of
Brownfield sites whose request for participation in the Brownfield
Cleanup Program (BCP) was denied by the Department of Environmental
Conservation (DEC), but the denial was overturned in Court.

 SUMMARY OF PROVISIONS :
Section 1 would amend subparagraph (A) of paragraph 3-a of subdivision
(a) of section 21 of the tax law to provide that any site which has
been denied access into the Brownfield Cleanup Program, but the denial
was overturned in court, will be eligible for the tax credits as
capped by Chapter 390 of the laws of 2008.

 EXISTING LAW :
The current statute awards tax credits based on the date that DEC
grants eligibility, leaving some ambiguity as to the relevant date for
court ordered access.

 JUSTIFICATION :
              

Under this proposal, the State's exposure in cases being litigated due
to the Department's denial of an application to the Brownfield Cleanup
Program (BCP) would be limited to the cap contained in Chapter 390 of
the Laws of 2008 -- $45 million for a manufacturing site and $35
million for others. To receive the redevelopment credits the property
must have a Certificate of Completion (COC) though credits may be
claimed over a period of 10 years following issuance of the COC.

Chapter 390 of the Laws of 2008 capped the amount of the tangible
property tax credit (redevelopment credits) available under the
Brownfield Cleanup Program (BCP). This was an important step in
reforming the BCP, in that it placed a limit on the lucrative
refundable tax credits for individual projects. There is now a maximum
brownfield redevelopment benefit of $45 million for manufacturing
projects and $35 million for all others. The effective date of Chapter
390 provided that the revised system of tax credits would apply to
sites acquired on or after April 1, 2005. This proposal is an attempt
to address the State's fiscal vulnerability represented by a number of
court cases challenging the eligibility requirements of the BCP. To
the extent that the recently enacted caps on brownfield tax credits
will help reduce the dramatic outlays of cash rewards going forward,
the state is currently in litigation over several very costly projects
that were denied access to the program and, thus, to the immense
pre-2008 reform financial benefits. Since the inception of the
Brownfield Cleanup Program in 2003, DEC has interpreted the statute
and used its discretion in such a way as to exclude sites where the
degree of contamination or other factors did not justify the
investment of significant state resources.

 LEGISLATIVE HISTORY :
New bill.

 FISCAL IMPLICATIONS :
While it is impossible to know how all of the litigation will be
ultimately decided, if, hypothetically, all cases were resolved
against the State, the cost to New York taxpayers will likely exceed
one billion dollars. In light of the legislative action taken last
year, it is reasonable to statutorily limit the amount of the court
awards allowable to conform with the 2008 reform bill that caps the
tax credits.
 LOCAL FISCAL IMPLICATIONS :
None noted.

 EFFECTIVE DATE :
Immediately and shall be deemed to have been in full force and effect
on and after July 21, 2008.