Commerce Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-623

Title:

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

Vote Date:

3/21/2017

Vote Action:

JOINT FAVORABLE TO FLOOR

PH Date:

2/23/2017

File No.:

SPONSORS OF BILL:

Commerce Committee

REASONS FOR BILL:

Summary

The bill authorizes a package of state and local tax incentives available to property owners seven years after beginning business operations at a:

● Cleaned up and redeveloped brownfield or

● Redeveloped and reused abandoned or underutilized site

Owners must:

● Apply to DECD before starting to remediate a brownfield or redevelop an abandoned or underutilized site

● Commit to a local student training and hiring program as the bill specifies

Incentive type and claiming period depends on property's environmental status before development

Brownfields:

First seven years after business begins operation at remediated and redeveloped site:

● 100% nonrefundable corporate or personal income tax credit (depending on how the developer is organized) against income attributed to the site

● Sales tax exemption for items purchased and used by the business operating at the site

● 100% of property tax assessment frozen at pre development value for first five years after owner obtains building permit to begin construction work

Next seven years (years 8-14)

● Nonrefundable annual corporate or personal income tax credit equal to 8.57%of qualified brownfield cleanup costs

● Credits can be used to offset sales taxes

Uncontaminated abandoned or underutilized property

● Same as brownfields for first seven years after operations

Effective Date: July 1, 2017 and applicable to taxable and income years beginning on or after January 1, 2017

RESPONSE FROM ADMINISTRATION/AGENCY:

DECD Commissioner Sullivan – discussed DECD's track record redeveloping brownfields, but didn't speak directly about bill's merits.

NATURE AND SOURCES OF SUPPORT:

Home Builders & Remodelers Association of CT Bill Ethier, CAE, Chief Executive Officer – tax incentives inherent in brownfield redevelopment

Connecticut Conference of Municipalities – requests changes: don't mandate property tax exemption; make DECD approval contingent of municipality's approval of exemption; clarify “underutilized” (note: “underutilized” is used in statutes without definition)

CT Association of Human Services, Jim Horan, CEO – bill enhances existing programs, creates job opportunities for local communities, including youth.

Sen. Leonard Fasano, Senate Republican President Pro Tempore – bill incentivizes brownfield remediation; spurs economic development and reduces blight; provides local job opportunities and encourages collaboration with schools to encourage youth to enter job pipeline.

NATURE AND SOURCES OF OPPOSITION:

None

NOTES:

Introduced by Sen. Fasano and Sen. Witkos

Commerce Committee JF'd the full version of this bill last year.

Reported by: Rosemary Klotz

Date: 3/21/2017