The original item was published from January 7, 2021 11:54 AM to January 7, 2021 11:55 AM
The “Brownfields Redevelopment Incentive Program Act"
provides tax credits to compensate developers of redevelopment projects located
on brownfield sites for remediation costs.
Some pertinent terms defined in the bill include:
“Brownfield
site” Any former or current commercial or
industrial site that is currently vacant or underutilized, and where there is
or was suspected to have been a discharge of a contaminant or where there is
contaminated building material.
“Contaminated
building material” Components of a structure where
abatement or removal of asbestos or remediation of materials containing
hazardous substance defined by N.J.S.A. 58:10-23.11b, is required by applicable
federal, state, or local rules.
“Project
financing gap” Part of the total remediation cost,
including reasonable and appropriate return on investment, that remains to be
financed after all other sources of capital have been accounted for, including,
but not limited to:
o
Developer contributed capital, not
less than 20% of the total remediation cost.
o
Investor or financial entity capital
or loans that the developer, after making all good faith efforts to raise
additional capital, certifies that cannot be raised from other sources.
The purpose of the
Brownfields Redevelopment Incentive Program is to compensate developers of
redevelopment projects located on brownfield sites for remediation costs.
A redevelopment project is eligible for a tax credit only if
the developer demonstrates to Economic Development Authority (EDA) and the
Department of Environmental Protection at the time of application that:
· The developer has not started any remediation or clean up at
the site of the redevelopment project, except for preliminary assessments and
investigations, prior to applying for a tax credit pursuant to this section,
but intends to remediate and redevelop the site immediately upon approval of
the tax credit.
· The redevelopment project is located on a brownfield site.
· Without the tax credit, the redevelopment project is not
economically feasible.
· A project financing gap exists.
· The developer has obtained and submitted to the authority a
letter evidencing support for the redevelopment project from the governing body
of the municipality where the redevelopment project is located.
· Each worker employed to perform remediation or construction
at the redevelopment project will be paid at least the minimum rate under the
Prevailing Wage Act. The prevailing wage requirements apply to
construction work through the completion of the redevelopment project. In
the event a redevelopment project, or the aggregate of all redevelopment
project approved for an award under the program, constitute a lease of more
than 35% of a facility, the prevailing wage requirements apply to the entire
facility.
A redevelopment project that received a reimbursement under
N.J.S.A. 58:10B-26 through 58:10B-31 is not be eligible to apply for a tax
credit under the program.
In addition to the eligibility criteria listed above, EDA
may consider additional factors that may include:
· The economic feasibility of the remediation project.
· The benefit of the remediation project to the community in
which the remediation project is located.
· The degree the remediation project enhances and promotes job
creation and economic development and addresses environmental concerns of
communities that have been historically and disproportionately impacted by
environmental hazards.
· If the developer has a board of directors, the extent that
board of directors is diverse and representative of the community where the
remediation project is located.
The authority, in consultation with the DEP, must submit
applications to the board for final approval that comply with the eligibility
criteria, fulfill the additional factors considered by the authority pursuant
to this subsection, satisfy the submission requirements, and provide adequate
information for the subject application.
A developer that has commenced remediation or cleanup at the
site of a redevelopment project prior to application may still apply for a tax
credit under the program, if the developer certifies to the authority that the
developer was unaware of the extent of the site contamination when the
developer commenced the redevelopment project.
Once
the application is approved by EDA, but prior to the start of any remediation
or clean up, EDA must enter into a redevelopment agreement with the developer.
The agreement must specify the amount of the tax credit to be awarded to the
developer, the date the developer must complete the remediation, and the
projected project remediation cost. Developers will be required to submit
progress reports every six months. The project must comply with the green
building manual regarding the use of renewable energy, energy-efficient
technology, and non-renewable resources to reduce environmental degradation and
encourage long-term cost reduction.
The agreement for a redevelopment project that includes at
least one retail establishment with more than 10 employees or at least one distribution
center with more than 20 employees must include a precondition that any
business that serves as the owner or operator of the retail establishment or
distribution center enters into a labor harmony agreement with a labor
organization or cooperating labor organizations that represent retail or
distribution center employees in the State.
The
developer will be required to submit a progress report every six months until
the completion of the project. At the
end of the project, the redeveloper must seek certification from DEP that the
project is complete, that the redeveloper complied with the oversight
documents, and remediation costs were actually and reasonable incurred. This
establishes procedure for the allocation of the tax credits.
A
developer is permitted to apply for a tax credit transfer certificate.
A
state college or university must be retained to prepare a report evaluating the
program every two years.
EDA,
in consultation with the Commissioner of Environmental Protection, is
authorized to adopt regulations for annual reporting by developers that receive
tax credits pursuant to the program, require that developers forfeit all tax
credits awarded in any year that reports are not received, and to allow the
authority to extend, in individual cases, the deadline for any annual reporting
or certification requirement established by this bill.