OLR Bill Analysis
SB 268 (File 389, as amended by Senate "A")*
AN ACT INCREASING THE TERM LIMIT FOR LOANS UNDER THE TARGETED BROWNFIELD DEVELOPMENT LOAN PROGRAM.
This bill makes programmatic changes to state and municipal brownfield remediation programs. It extends the maximum period for repaying certain Department of Economic and Community Development (DECD) loans from 20 to 30 years and requires certain recipients of DECD grants to remediate brownfields under one of four state liability relief programs. It authorizes municipalities to enter into agreements with people and entities (i.e., prospective purchasers) proposing to acquire a brownfield for statutorily permitted property tax incentives and expands the range of programs they may enter as a condition for receiving an incentive.
The bill also sets conditions allowing a notice of activity and use limitation (NAUL) to be used in areas where a prior holder of interest in the property holds an interest that allows activities that the NAUL otherwise prohibits. A NAUL is a legal instrument generally used to minimize exposure to contamination by controlling the kind of activity that can occur on contaminated property. The instrument is executed and recorded in municipal land records.
The bill exempts state agencies from conducting an environmental impact evaluation before taking actions supporting certain nuclear submarine construction projects that received a federal priority ranking of DX on or before the bill's passage.
The bill also makes minor and technical changes.
*Senate Amendment “A” adds the provisions regarding: (1) DECD's municipal brownfield grant program, (2) local option property tax incentives for remediating brownfields, (3) NAULs, and (4) an environmental impact evaluation exemption.
EFFECTIVE DATE: October 1, 2018, except the provision (1) extending the period for repaying brownfield loans takes effect July 1, 2018, and is applicable to loans issued on or after that date and (2) exempting state supported nuclear submarine projects from state environmental impact evaluations takes effect upon passage.
STATE BROWNFIELD REMEDIATION PROGRAMS
Targeted Brownfield Development Loan Program (§ 1)
The bill extends, from 20 to 30 years, the maximum period for repaying loans DECD makes under its Targeted Brownfield Development Loan Program. The program provides loans up to $4 million per year for investigating and assessing a property's environmental condition and cleaning up any contamination. The loans are available to the current owners of a contaminated property and potential purchasers if they (1) are not liable for the contamination and (2) plan to develop the property to reduce blight or for industrial, commercial, residential, or mixed use purposes.
Remedial Action and Redevelopment Municipal Grant Program (§ 504)
The bill requires certain grant recipients under DECD's Remedial Action and Redevelopment Municipal Grant Progam to remediate their brownfields under one of four specified programs that provide protection from liability for brownfields that are investigated and remediated according to state standards. The requirement applies to municipalities, Connecticut brownfield land banks, and other entities that are exempted from the Transfer Act, the law that requires parties to a real estate transaction involving contaminated property to notify the DEEP commissioner about the contamination and identify the party that will investigate and remediate it.
Under the bill, the DECD commissioner selects which remediation program a recipient must participate in. The programs are administered by DECD or the Department of Energy and Environmental Protection (DEEP). The bill exempts from this program requirement recipients using the grant to:
1. prepare comprehensive brownfield remediation and redevelopment plans,
2. only assess a brownfield's condition, and
3. abate hazardous building materials as long as the recipient demonstrates to the DECD and DEEP commissioners that these materials are the only remaining contamination on the property.
BROWNFIELD REMEDIATION PROPERTY TAX INCENTIVES (§ 505)
Current law allows municipalities to abate (reduce) the property taxes for brownfield property owners while they remediate it or fix its assessed value at its pre remediation level. The bill allows municipalities to enter into agreements to do the same for people and entities proposing to acquire brownfields (i.e., prospective owners). Prospective owners (and state-certified brownfield land banks) already qualify for property tax forgiveness, the other incentive municipalities may offer to spur brownfield remediation and redevelopment.
Municipalities that chose to offer these incentives must comply with existing law's parameters (e.g., maximum seven-year period for tax abatements and fixed assessment). Under current law, recipients of tax forgiveness and fixed assessments must remediate the property under a DEEP voluntary remediation program and meet the Transfer Act's remediation standards. The bill expands the range of programs recipients may enter to include DECD's voluntary remediation programs, which provide protection from liability and complete the remediation according the Transfer Act's standards.
NAUL (§§ 501-503)
The bill broadens the conditions under which NAULs can be used to control activities that could potentially expose people to contamination. Current law prohibits NAULs from being used where a prior holder of interest in the property holds an interest that allows (1) activities the NAUL otherwise prohibits or (2) intrusions into contaminated soil. The bill eliminates the latter restriction on NAULs.
The bill also allows a NAUL to be used in an area where a prior holder of an interest in the property holds a conflicting interest if the prior holder agrees, by signing the NAUL, to subject that interest to the NAUL's conditions.
ENVIRONMENTAL IMPACT EVALUATION EXEMPTION FOR SUBMARINE CONSTRUCTION PROJECTS (§ 506)
The bill exempts state agencies that fund activities supporting a nuclear submarine construction project from preparing an environmental impact evaluation. By law, with exceptions, state agencies must prepare an environmental impact evaluation of any activity they propose or fund.
The bill exempts from this requirement activities that are part of a nuclear submarine construction project that received, on or before the bill's passage, the highest priority ranking (i.e., DX) under the U.S. Defense Department's Defense Priorities and Allocation System. The activity must further an “approved program,” as defined under the Defense Priorities and Allocations System regulations (15 CFR Part 700).