Connecticut Seal

General Assembly

File No. 737

    January Session, 2017

Senate Bill No. 623

Senate, May 9, 2017

The Committee on Finance, Revenue and Bonding reported through SEN. FONFARA of the 1st Dist. and SEN. FRANTZ, L. of the 36th Dist., Chairpersons of the Committee on the part of the Senate, that the bill ought to pass.

AN ACT ESTABLISHING THE 7/7 PROGRAM TO ENCOURAGE THE REDEVELOPMENT OF BROWNFIELDS AND UNDERUTILIZED PROPERTY.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective July 1, 2017, and applicable to taxable and income years commencing on or after January 1, 2017) (a) As used in this section, the following terms shall have the following meanings unless the context clearly indicates another meaning:

(1) "7/7 participant" means an eligible owner whose application submitted pursuant to subsection (c) of this section has been approved by the commissioner;

(2) "7/7 site" means the real property redeveloped and utilized or proposed to be redeveloped and utilized by a 7/7 participant in accordance with this section;

(3) "Brownfield" has the same meaning as provided in section 32-760 of the general statutes;

(4) "Completion of the brownfield remediation" means the completed remediation of a 7/7 site by a 7/7 participant as evidenced by 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;

(5) "Eligible owner" means any person, firm, limited liability company, nonprofit or for-profit corporation or other business entity that holds title to (A) a brownfield, provided such owner 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; or (B) real property that has been abandoned or underutilized for ten or more years; and

(6) "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) There is established within the Department of Economic and Community Development the 7/7 program. Said program shall provide incentives to businesses for redeveloping and utilizing brownfields and real property that has been abandoned or underutilized for ten or more years. Participants in said program shall be eligible for the tax incentives provided under subsections (e) to (h), inclusive, of this section.

(c) To be designated a 7/7 participant, an eligible owner shall submit to the Commissioner of Economic and Community Development an application, on forms provided by the commissioner, that shall include the following information: (1) A description of the real property such eligible owner seeks to utilize and the proposed use for such property; (2) a written certification (A) from a licensed environmental professional stating that such property is a brownfield, or (B) from the municipality in which such property is located stating that such property has been abandoned or underutilized for ten or more years, as determined by such municipality; (3) a plan that such eligible owner shall submit to high schools in the area of the brownfield and the regional-community technical colleges that includes the anticipated workforce needs for the proposed use of such property and workforce training requirements in order to enable such schools and colleges to develop educational training programs to meet such workforce needs; (4) a commitment by the eligible owner to hire not less than thirty per cent of its workforce from students enrolled in any programs developed as a result of subdivision (3) of this subsection; (5) a written certification from the municipality in which such property is located that such municipality supports the application for the designation of such property as a 7/7 site; and (6) any other information the commissioner deems necessary. The commissioner shall approve any application that satisfies the requirements of this subsection and shall notify the Commissioner of Revenue Services whenever he or she approves the application of an eligible owner.

(d) Any 7/7 participant that seeks to redevelop and utilize a brownfield shall not be eligible for any of the benefits provided under subsections (e) to (h), inclusive, of this section until the completion of the brownfield remediation and the participant's notification of such completion to the Commissioners of Revenue Services and Economic and Community Development and the municipality in which such brownfield is located.

(e) (1) If a 7/7 participant is subject to the tax imposed under chapter 208 of the general statutes, the Commissioner of Revenue Services shall grant a credit against any tax due under the provisions of said chapter in an amount equal to the total amount of tax due under said chapter for the income year that is attributable to the operations of such participant's business located on the 7/7 site after the deduction of any other credits allowable under said chapter. The credit allowed by this subdivision shall be available in the first income year in which such participant begins business operations at such site and the succeeding six income years.

(2) If a 7/7 participant is subject to the tax imposed under chapter 229 of the general statutes, the Commissioner of Revenue Services shall grant a credit to each member, shareholder or partner of such participant against any tax due under the provisions of said chapter, other than the liability imposed by section 12-707 of the general statutes, in an amount equal to such member's, shareholder's or partner's amount of tax due under said chapter for the taxable year that is attributable to the operations of such participant's business located on the 7/7 site after the deduction of any other credits allowable under said chapter. The credit allowed by this subdivision shall be available in the first taxable year in which such participant begins business operations at such site and the succeeding six taxable years.

(f) (1) The taxes imposed by chapter 219 of the general statutes shall not apply to any item purchased by a 7/7 participant in the first seven calendar years from the date such participant initiates business operations at a 7/7 site, provided such item is purchased for use in the ordinary course of business at such site.

(2) At the time of sale, a 7/7 participant shall present to the person who makes the sale a certificate to the effect that the item is subject to such exemption. The certificate shall be signed by and bear the name and address of the purchaser. The certificate shall be substantially in such form as the Commissioner of Revenue Services prescribes.

(3) If a purchaser who presents a certificate, in accordance with subdivision (2) of this subsection, makes any use of the item other than the purpose set forth in subdivision (1) of this subsection, the use shall be deemed to be a use by the purchaser in accordance with chapter 219 of the general statutes, as of the time the property is first used by him or her, and the item shall be taxable to such purchaser in accordance with said chapter.

(g) (1) In the case of a 7/7 participant subject to the tax imposed under chapter 208 of the general statutes, in arriving at net income, as defined in section 12-213 of the general statutes, in the eighth income year following such 7/7 participant's initiation of business operations at a 7/7 site that was a brownfield and the six succeeding income years, there shall be deducted from gross income, as defined in section 12-213 of the general statutes, an amount not to exceed eight and fifty-seven-one-hundredths per cent of the qualified expenditures associated with the remediation of such site.

(2) In the case of a 7/7 participant subject to the tax imposed under chapter 229 of the general statutes, in the eighth income year following such 7/7 participant's initiation of business operations at a 7/7 site that was a brownfield and the six succeeding income years, there shall be subtracted from Connecticut adjusted gross income, as defined in section 12-701 of the general statutes, as amended by this act, an amount not to exceed eight and fifty-seven-one-hundredths per cent of the qualified expenditures associated with the remediation of such site.

(h) Notwithstanding any provision of the general statutes or of any special act, municipal charter or home rule ordinance, for five assessment years following the date a 7/7 participant obtained a building permit to begin construction at a 7/7 site, the municipality in which such site is located shall continue to use the assessed value of such site as of the date such participant's application was approved under subsection (c) of this section.

(i) The Commissioner of Economic and Community Development, in consultation with the Commissioner of Revenue Services, shall adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, to implement the provisions of this section.

Sec. 2. Subdivision (1) of subsection (a) of section 12-217 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017, and applicable to income years commencing on or after January 1, 2017):

(a) (1) In arriving at net income as defined in section 12-213, whether or not the taxpayer is taxable under the federal corporation net income tax, there shall be deducted from gross income, (A) all items deductible under the Internal Revenue Code effective and in force on the last day of the income year except (i) any taxes imposed under the provisions of this chapter which are paid or accrued in the income year and in the income year commencing January 1, 1989, and thereafter, any taxes in any state of the United States or any political subdivision of such state, or the District of Columbia, imposed on or measured by the income or profits of a corporation which are paid or accrued in the income year, (ii) deductions for depreciation, which shall be allowed as provided in subsection (b) of this section, (iii) deductions for qualified domestic production activities income, as provided in Section 199 of the Internal Revenue Code, and (iv) in the case of any captive real estate investment trust, the deduction for dividends paid provided under Section 857(b)(2) of the Internal Revenue Code, and (B) additionally, in the case of a regulated investment company, the sum of (i) the exempt-interest dividends, as defined in the Internal Revenue Code, and (ii) expenses, bond premium, and interest related to tax-exempt income that are disallowed as deductions under the Internal Revenue Code, and (C) in the case of a taxpayer maintaining an international banking facility as defined in the laws of the United States or the regulations of the Board of Governors of the Federal Reserve System, as either may be amended from time to time, the gross income attributable to the international banking facility, provided, no expense or loss attributable to the international banking facility shall be a deduction under any provision of this section, and (D) additionally, in the case of all taxpayers, all dividends as defined in the Internal Revenue Code effective and in force on the last day of the income year not otherwise deducted from gross income, including dividends received from a DISC or former DISC as defined in Section 992 of the Internal Revenue Code and dividends deemed to have been distributed by a DISC or former DISC as provided in Section 995 of said Internal Revenue Code, other than thirty per cent of dividends received from a domestic corporation in which the taxpayer owns less than twenty per cent of the total voting power and value of the stock of such corporation, and (E) additionally, in the case of all taxpayers, the value of any capital gain realized from the sale of any land, or interest in land, to the state, any political subdivision of the state, or to any nonprofit land conservation organization where such land is to be permanently preserved as protected open space or to a water company, as defined in section 25-32a, where such land is to be permanently preserved as protected open space or as Class I or Class II water company land, and (F) in the case of manufacturers, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 32-9zz in the income year that such contribution is made to the extent not deductible for federal income tax purposes, and (G) additionally, to the extent allowable under subsection (g) of section 1 of this act, the amount paid by a 7/7 participant, as defined in section 1 of this act, for the remediation of a brownfield.

Sec. 3. Subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017, and applicable to taxable years commencing on or after January 1, 2017):

(B) There shall be subtracted therefrom (i) to the extent properly includable in gross income for federal income tax purposes, any income with respect to which taxation by any state is prohibited by federal law, (ii) to the extent allowable under section 12-718, exempt dividends paid by a regulated investment company, (iii) the amount of any refund or credit for overpayment of income taxes imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia, to the extent properly includable in gross income for federal income tax purposes, (iv) to the extent properly includable in gross income for federal income tax purposes and not otherwise subtracted from federal adjusted gross income pursuant to clause (x) of this subparagraph in computing Connecticut adjusted gross income, any tier 1 railroad retirement benefits, (v) to the extent any additional allowance for depreciation under Section 168(k) of the Internal Revenue Code, as provided by Section 101 of the Job Creation and Worker Assistance Act of 2002, for property placed in service after December 31, 2001, but prior to September 10, 2004, was added to federal adjusted gross income pursuant to subparagraph (A)(ix) of this subdivision in computing Connecticut adjusted gross income for a taxable year ending after December 31, 2001, twenty-five per cent of such additional allowance for depreciation in each of the four succeeding taxable years, (vi) to the extent properly includable in gross income for federal income tax purposes, any interest income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, (vii) to the extent properly includable in determining the net gain or loss from the sale or other disposition of capital assets for federal income tax purposes, any gain from the sale or exchange of obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, in the income year such gain was recognized, (viii) any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such interest on indebtedness is not deductible in determining federal adjusted gross income and is attributable to a trade or business carried on by such individual, (ix) ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income which is subject to taxation under this chapter but exempt from federal income tax, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such expenses and premiums are not deductible in determining federal adjusted gross income and are attributable to a trade or business carried on by such individual, (x) (I) for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than sixty thousand dollars or a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is less than sixty thousand dollars, an amount equal to the Social Security benefits includable for federal income tax purposes; and (II) for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or as a married individual filing separately whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is sixty thousand dollars or more or for a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is sixty thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code, (xi) to the extent properly includable in gross income for federal income tax purposes, any amount rebated to a taxpayer pursuant to section 12-746, (xii) to the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, any distribution to such beneficiary from any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state, (xiii) to the extent allowable under section 12-701a, contributions to accounts established pursuant to any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state, (xiv) to the extent properly includable in gross income for federal income tax purposes, the amount of any Holocaust victims' settlement payment received in the taxable year by a Holocaust victim, (xv) to the extent properly includable in gross income for federal income tax purposes of an account holder, as defined in section 31-51ww, interest earned on funds deposited in the individual development account, as defined in section 31-51ww, of such account holder, (xvi) to the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, as defined in section 3-123aa, interest, dividends or capital gains earned on contributions to accounts established for the designated beneficiary pursuant to the Connecticut Homecare Option Program for the Elderly established by sections 3-123aa to 3-123ff, inclusive, (xvii) to the extent properly includable in gross income for federal income tax purposes, any income received from the United States government as retirement pay for a retired member of (I) the Armed Forces of the United States, as defined in Section 101 of Title 10 of the United States Code, or (II) the National Guard, as defined in Section 101 of Title 10 of the United States Code, (xviii) to the extent properly includable in gross income for federal income tax purposes for the taxable year, any income from the discharge of indebtedness in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, to the extent any such income was added to federal adjusted gross income pursuant to subparagraph (A)(xi) of this subdivision in computing Connecticut adjusted gross income for a preceding taxable year, (xix) to the extent not deductible in determining federal adjusted gross income, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 32-9zz in the taxable year that such contribution is made, [and] (xx) to the extent properly includable in gross income for federal income tax purposes, for the taxable year commencing January 1, 2015, ten per cent of the income received from the state teachers' retirement system, for the taxable year commencing January 1, 2016, twenty-five per cent of the income received from the state teachers' retirement system, and for the taxable year commencing January 1, 2017, and each taxable year thereafter, fifty per cent of the income received from the state teachers' retirement system, and (xxi) to the extent allowable under subsection (g) of section 1 of this act, the amount paid by a 7/7 participant, as defined in section 1 of this act, for the remediation of a brownfield.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2017, and applicable to taxable and income years commencing on or after January 1, 2017

New section

Sec. 2

July 1, 2017, and applicable to income years commencing on or after January 1, 2017

12-217(a)(1)

Sec. 3

July 1, 2017, and applicable to taxable years commencing on or after January 1, 2017

12-701(a)(20)(B)

CE

Joint Favorable C/R

FIN

FIN

Joint Favorable

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 18 $

FY 19 $

Revenue Serv., Dept.

GF - Revenue Loss

None

Potential Significant

Note: GF=General Fund

Municipal Impact:

Municipalities

Effect

FY 18 $

FY 19 $

Various Municipalities

Grand List Reduction

None

Potential

Explanation

The bill results in revenue losses to the state and various municipalities, detailed below, by providing various tax credits, exemptions and property tax assessment freezes under the “7/7 program.”

State Tax Revenue Loss

The bill provides various tax credits and exemptions for participants in the program. Specifically the bill provides:

1. a nonrefundable seven year 100% corporation business tax credit for corporations and a nonrefundable income tax credit for pass through entities.

2. an exemption from the sales tax for any items purchased for the purpose of redeveloping the property.

The actual revenue loss to the state from these credits and exemptions would depend upon (1) the number of participants in the program; (2) the level of redevelopment required for the property (with regard to purchases necessary that the sales tax would otherwise apply to); and (3) the level of business activity on the property once business operations begin (with regard to the business and income tax credits).

The actual revenue loss to the state is uncertain but may be significant. Because such tax benefits are not available until a business begins on the remediated property, any revenue loss is not anticipated until FY 19 at the earliest.

Municipal Impact

The bill freezes, for five years, the assessment of property developed under the 7/7 program following the issuance of a building permit. This precludes any grand list increase a municipality would otherwise experience as a result of the cleanup and development of a brownfield.

Administration Costs

It is anticipated that the Department of Economic and Community Development (DECD) can administer this program within current resources. Given the parameters outlined under the bill, it is estimated that the number of potential projects may be limited and therefore can be administered with current resources under DECD's Office of Brownfield Remediation and Development.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

OLR Bill Analysis

SB 623

AN ACT ESTABLISHING THE 7/7 PROGRAM TO ENCOURAGE THE REDEVELOPMENT OF BROWNFIELDS AND UNDERUTILIZED PROPERTY.

SUMMARY

This bill provides a package of tax incentives to property owners after they remediate, redevelop, and use property that was contaminated, abandoned, or underutilized. Owners must apply to the Department of Economic and Community Development (DECD) for these incentives and provide certain information, including a plan and a commitment to train and hire students to work at the redeveloped property.

During the first seven years after an owner redevelops a DECD-approved property, the owner qualifies for (1) corporation business or personal income tax credits against the income attributed to the redeveloped property and (2) sales and use tax exemptions applicable to items purchased for use at the property. During this period, the owner also qualifies to have the redeveloped property's tax assessment frozen for five years at its predevelopment value.

If the property was contaminated and remediated, the owner qualifies for an additional seven-year benefit beginning in the eighth year after the property's redevelopment. The benefit is a business or personal income tax deduction for up to 8.57% of the eligible expenses the owner incurred to remediate the property.

EFFECTIVE DATE: July 1, 2017 and applicable to taxable year and income years beginning on or after January 1, 2017.

ELIGIBILITY

The bill establishes the “7/7 program” and opens it to any person, firm, limited liability company, nonprofit or for-profit corporation or other business entity that owns (1) an abandoned or underutilized property (i.e., problem property) or (2) one where actual or potential pollution has discouraged the owner or other parties from redeveloping, reusing, or expanding the property (i.e., brownfield).

An abandoned or underutilized property qualifies for 7/7 program benefits if its host municipality certifies that the property has been in that condition for at least 10 years. A brownfield qualifies if its current owner (1) is not responsible for any pollution or source of pollution on the property and (2) did not establish, create, or maintain a source that polluted the state's water.

DECD APPLICATION

Contents

Eligible property owners seeking 7/7 program tax incentives must submit an application to DECD, providing:

If the property is a brownfield, a licensed environmental professional must certify that actual or potential pollution has discouraged parties from redeveloping, reusing, or expanding it. If the property is unpolluted but has been abandoned or underutilized, the host municipality must certify that it has been in that condition for at least 10 years.

The commissioner must approve an owner's application if it includes all of the required information and notify the Department of Revenue Services (DRS) commissioner whenever she does so.

Worker Training and Hiring Requirements

Property owners applying for 7/7 program incentives must include in their applications a training plan and a commitment to hire students trained under that plan. An owner must submit the plan to the area's high schools and regional technical community colleges identifying the types of jobs that will be performed at the redeveloped property and specifying the types of training programs needed to prepare students for those jobs. The owner must also commit to hiring at least 30% of the workers at the property from among the enrollees of the programs developed to train workers for jobs at the redeveloped property.

7/7 PROGRAM INCENTIVES

Timing

The owners of brownfields approved for 7/7 incentives qualify for them only after they remediate the brownfield, file the necessary documents verifying remediation, and notify the host municipality and the DRS and DECD commissioners to that effect. Neither owners of a remediated brownfield or a redeveloped problem property approved for 7/7 incentives can claim their incentives until they begin business operations on the property.

Brownfield and problem property owners qualify for the same types of benefits during the first seven years after they begin operations on property approved for 7/7 program incentives (i.e., Stage 1 incentives). Brownfield owners qualify for an additional incentive during the subsequent seven years (i.e., Stage 2 incentives).

Table 1 summarizes the bill's schedule of 7/7 Program incentives.

Table 1: 7/7 Program Incentive Schedule

Stage

Eligible Property

Time Period

Incentives

1

Remediated and redeveloped former brownfields

Redeveloped and reused previously abandoned and underutilized property

First seven years after business operations begin at redeveloped property

Seven-year, 100% personal or corporation business tax credit against income attributable to redeveloped property

Seven-year sales and use tax exemption for items purchased for use at redeveloped property

Five-year property tax assessment freeze

2

Remediated and redeveloped former brownfields

Years eight to 14 after business operations begin at redeveloped property

Seven-year maximum 8.57% deduction against personal income or corporation business taxes for eligible remediation expenses

Stage 1 Incentives

Business and Personal Income Tax Credits. Brownfield and problem property owners may claim a 100% credit for seven years against the personal or corporation business taxes attributable to business operations at the property during the taxable year, but only after deducting any other available credits.

The credit against the personal income tax is available to owners organized as S corporations, limited liability partnerships, or limited liability companies. These business entities do not pay corporation business taxes, but the owners and partners pay personal income taxes on the income they derive from the entity. (These entities are commonly referred to as “pass-through entities,” meaning that the income flows from the business to the owner where it is taxed as personal income.) Consequently, the bill allows these owners and partners to claim a credit equal to their share of the taxes attributable to the property's operation during the taxable year.

Sales and Use Tax Exemptions. Brownfield and problem property owners qualify for sales and use tax exemptions for any item they purchase and use at the redeveloped property during the ordinary course of business. Like the personal and corporation business tax credit, the sales tax exemption is available for seven years beginning with the year business operations start at the property.

Owners may claim this exemption by presenting a certificate indicating that the purchased item is exempt from the sales tax. The certificate must be substantially in a form the DRS commissioner prescribes and bear the purchaser's name, address, and signature. If the purchaser does not use the item in the ordinary course of business at the property, the purchaser must pay the sales and use tax.

Property Tax Assessment Freeze. Property owners also receive a property tax incentive. Under the bill, municipalities must freeze, for five years, the assessed value of a 7/7 program-approved property as of the date the DECD commissioner approved it for the program's incentives. The freeze begins on the October 1 assessment date following the date when the municipality issued a building permit to begin construction on the property.

Stage 2 Incentives for Remediated Brownfields

Brownfield owners receive an additional incentive, which is available for seven years, beginning in the eight years after business operations began at a remediated 7/7 program property. The incentive is a deduction against the personal income or corporation business tax for up to 8.57% of the eligible expenses the owner incurred to remediate the property.

Eligible expenditures are those the owner incurred to investigate and assess the nature and extent of the contamination and eliminate or mitigate it. These expenditures include:

Any expenditure funded under a DECD brownfield cleanup program does not quality as an eligible expenditure.

COMMITTEE ACTION

Commerce Committee

Joint Favorable Change of Reference - FIN

Yea

21

Nay

0

(03/21/2017)

Finance, Revenue and Bonding Committee

Joint Favorable

Yea

51

Nay

0

(04/27/2017)

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