Brownsfields Remediation and Redevelopment Incentives Amendment Act of 1999
Bill 13-467

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A BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA

Councilmembers David Catania introduced the following bill, which was referred to the Committee on Finance and Revenue and Economic Development with comments from the Committees on Consumer and Regulatory Affairs, Public Works and the Environment, and Human Services.

To provide financial and tax incentives for the remediation and redevelopment of abandoned or underutilized contaminated real property.

TITLE I. AMENDMENTS TO DISTRICT OF COLUMBIA LAWS
Sec 101. Amendment to The Tax Increment Financing Authorization Act of 1998
Sec 102. Amendment to The National Capital Revitalization Corporation Act of 1998
Sec 103. Amendment to The District of Columbia Community Development Act of 1975

TITLE II. TAX AND FINANCIAL INCENTIVES FOR THE REMEDIATION AND REDEVELOPMENT OF BROWNFIELDS
Sec. 201. Short Title
Sec. 202. Definition
Sec. 203. Brownfields Real Property and Business Franchise Tax Abatement
Sec. 204. Environmental Savings Accounts
Sec. 205. Brownfields Sites Environmental Assessment Fund
Sec. 206. Brownfields Sites Cleanup Revolving Fund
Sec. 207. Rules

TITLE III. FISCAL IMPACT STATEMENT
Sec. 301. Fiscal Impact Statement

TITLE IV. EFFECTIVE DATE
Sec. 401. Effective Date.

BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this act may be cited as the "Brownfields Remediation and Redevelopment Incentives Amendment Act of 1999".

TITLE I. AMENDMENTS TO DISTRICT LAWS.

Sec 101. Section 2 of The Tax Increment Financing Authorization Act of 1998, effective September 11, 1998 (D.C. Law 12-143; D.C. Code §1-2293.1), is amended as follows:

(a) Paragraph (24) is amended by striking the "." at the end of the paragraph and inserting the phrase "; and Brownfields areas as defined in subsection (33)." in its place.

(b) Add a new paragraph (33) to read as follows:

"(33) "Brownfields" means an abandoned or underutilized property where expansion or redevelopment is complicated by actual or perceived environmental contamination.".

Sec. 102. The National Capital Revitalization Corporation Act of 1998, effective September 11, 1998 (D.C. Law 12-144; D.C. Code §1-2295.1 et seq.), is amended as follows:

(a) Section 13(b)(2) (D.C. Code §1-2295.12(b)(2)) is amended to read as follows:

"(2) Remediation and redevelopment of abandoned, contaminated, and underutilized commercial, industrial and residential sites;".

(b) Section 21(a) (D.C.. Code §1-2295.20(a) is amended as follows:

(1) Paragraph (11) is amended by striking the word "and" at the end of the paragraph;

(2) Paragraph (12) is amended by adding the phrase "; and" at the end of the paragraph; and

(3) A new paragraph (13) is added to read as follows:

"(13) Brownfields areas as defined in the Tax Increment Financing Authorization Act of 1998, effective September 11, 1998 (D.C. Law 12-143; D.C. Code §1-2293.1 et seq.).".

Sec. 103. Section 3(a)(3) of the District of Columbia Community Development Act of 1975, effective December 16, 1975 (D.C. Law 1-39; D.C. Code §5-902(a)(3)), is amended as follows:

(a) Strike the word "and" at the end of subparagraph (A);

(b) Add the word "and" at the end of subparagraph (B); and

(c) A new subparagraph (C) is added to read as follows:

"(C) Remediate and redevelop brownfields areas as defined in the Tax Increment Financing Authorization Act of 1998, effective September 11, 1998 (D.C. Law 12-143; D.C. Code §1-2293.1 et seq.);".

TITLE II. TAX AND FINANCIAL INCENTIVES.

Sec. 201. Short title.

This title may be cited as the "Brownfields Remediation and Redevelopment Incentives Act of 1999".

Sec. 202. Definition.

For purposes of this title, "brownfields site" means an abandoned or underutilized property where expansion or redevelopment is complicated by actual or perceived environmental contamination as determined by the Mayor.

Sec. 202 [sic]. Brownfields real property and business franchise tax abatements.

(a) The Mayor may submit proposed rules to the Council to establish credits that offset real property taxes and business franchise taxes in connection with the remediation and redevelopment of a brownfields site. The proposed rules shall be submitted to the Council for a 45-day period of review, excluding Saturdays, Sundays, legal holidays, and days of Council recess. If the Council does not approve or disapprove the proposed rules, in whole or in part, by resolution within this 45-day review period, the proposed rules shall be deemed approved. Nothing in this section shall affect any requirements imposed upon the Mayor by Title 1 of the District of Columbia Administrative Procedure Act, approved October 21, 1968 (82 Stat. 1204; D.C. Code §1-1501 et seq.) The aggregate of the credits may equal an amount up to 100% of costs for remediation and up to 25% of costs for redevelopment of a brownfields site.

(b)(1) Application may be made to the Mayor for a reduction in real property taxes for real property that has been proposed as a site for brownfields remediation and redevelopment. Application may also be made for the deferral or forgiveness of any delinquent real property taxes, of any delinquent special assessments, of any cost or fee assessed to correct any condition that exists on the real property in violation of law, and of any delinquent water or sanitary sewer charges that have been imposed on the brownfields site.

(2) The application shall contain:

(A) A description of the real property;

(B) The assessed value of the real property; and

(C) A statement of expected public benefits.

(3) The statement of public benefits shall include:

(A) A description of the proposed remediation and redevelopment;

(B) an estimate of the cost of the remediation and redevelopment; and

(C) An estimate of the benefits associated with the proposed remediation and redevelopment of the brownfields site, including but not limited to:

(i) An estimate of the number of person who will be employed or whose employment shall be retained as a result of the remediation and redevelopment; an estimate of the annual salaries of those employees; and the number of District resident employees;

(ii) An estimate of the increase in the assessed value of the real property; and

(iii) An estimate of the total increase in taxable activity in connection with the proposal.

(c)( 1 ) Application may be made to the Mayor for a credit to any franchise tax liability imposed by D.C. Code §47-1807.1 et seq. or §47-1808.1 et seq., on income expected to be earned by an incorporated or unincorporated business entity as a result of the remediation and redevelopment of a brownfields site.

(2) The application shall:

(A) Identify the incorporated or unincorporated business entity;

(B) Estimate the annual dollar value of each franchise tax credit; and

(C) State whether the business entity has entered into an employment agreement with the District pursuant to the First Source Employment Agreement Act of 1984 (D.C. Law 5-93; D.C. Code §1-1161 et seq).

(d) If the amount of the credits allowable under this section exceeds the taxes otherwise due, the amount of the credits not used as an offset against the taxes may be carried forward for up to 25 years.

(e) The Mayor may impose limitations on the amount of total reductions that will be allowed.

Sec. 204. Environmental Savings Accounts.

The Mayor shall establish a program to be known as the Environmental Savings Account Program which shall permit an eligible person to establish an Environmental Savings Account ("ESA") for the purpose of accumulating funds to be used for the remediation and/or redevelopment of a brownfields site. Funds deposited in an ESA by an eligible person and interest earned on the funds shall be exempt from District income taxation; provided, that any funds withdrawn that are not used for remediation and redevelopment shall be subject to income taxation and a 10% penalty.

Sec. 205. Brownfields Sites Environmental Assessment Fund.

The Mayor shall establish a Brownfields Sites Environmental Assessment Fund, subject to appropriations and any other Federal funds or private contributions, for the purpose of making grants to conduct environmental assessments of industrial, commercial and residential sites. The Mayor shall provide an annual report on October l of each year to the Council on grants made from the Fund and on the effectiveness of the Fund in conducting environmental assessments.

Sec. 206. Brownfields Sites Cleanup Revolving Fund.

(a) The Mayor shall establish the Brownfields Sites Cleanup Revolving Fund ("Fund"), subject to appropriations and any other federal funds or private contributions, to provide financial assistance for the remediation and redevelopment of brownfields sites. The financial assistance, in the form of grants or loans to be lent at a rate not to exceed 2%, shall be in an amount up to 75% of the costs incurred for completing an environmental study and remediating and redeveloping a brownfields site.

(b) The following criteria shall be used in determining whether to provide financial assistance:

(1) The benefit of the remedy to public health, safety and the environment;

(2) The permanence of the remedy;

(3) The cost effectiveness of the remedy compared with other alternatives;

(4) The financial condition of the applicant;

(5) The economic distress of the area in which the site is located; and

(6) The potential for economic development.

(c) In addition to the criteria in subsection (b) of this subsection, loans may be made based on the ability to repay the loan from future revenue to be derived from the redeveloped site and may be secured by a mortgage or other collateral.

(d) Moneys received as repayment of loans shall be deposited in the Fund.

(e) The Mayor shall provide an annual report on October 1 of each year to the Council on grants, loans, and expenditures made from the Fund, the revenue received by the Fund, and on the effectiveness of the Fund in redeveloping brownfields sites.

Sec. 207. Rules.

The Mayor shall promulgate rules to implement the provisions of this title. The rules shall include the following:

(1) Application procedures;

(2) Eligibility for tax credits and financial incentives; and

(3) Fees to be charged for application and administration of the Fund established in section 206.

TITLE III. FISCAL IMPACT STATEMENT.

Sec. 301. Fiscal Impact Statement

TITLE IV. EFFECTIVE DATE

Sec. 401. This act shall take effect following approval by the Mayor (or in the event of veto by the Mayor, action by the Council to override the veto), approval by the Financial Responsibility and Management Assistance Authority as provided in section 203(a) of the District of Columbia Financial Responsibility and Management Assistance Act of 1995, approved April 17, 1995 (109 Stat. 116; D.C. Code §47-392.3(a)), a 30-day period of Congressional review as provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 831; D.C. Code §1-233(c)(1)), and publication in the District of Columbia Register.