JOINT FAVORABLE REPORT
AN ACT ESTABLISHING THE 7/7 PROGRAM TO ENCOURAGE THE REDEVELOPMENT OF BROWNFIELDS AND UNDERUTILIZED PROPERTY.
JOINT FAVORABLE TO FLOOR
SPONSORS OF BILL:
REASONS FOR BILL:
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
● 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
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:
Introduced by Sen. Fasano and Sen. Witkos
Commerce Committee JF'd the full version of this bill last year.
Reported by: Rosemary Klotz