NJ’s New Economic Incentive Legislation Includes Supplement to Brownfields Program
The New Jersey Economic Recovery Act of 2020 (NJERA), recently signed into law by Governor Murphy, includes an important new tax incentive for Brownfields called the “Brownfields Redevelopment Incentive Program Act” (BRIPA), included as Sections 9 through 19 in the act. BRIPA supplements the existing “Brownfield and Contaminated Site Remediation Act” (BCSRA), which provides funds for reimbursement of varying components of remediation costs at Brownfield sites based on certain eligibility criteria, including the Hazardous Discharge Site Remediation Fund and the Brownfield Site Reimbursement Fund.
Under BRIPA, as under BCSRA, a “Brownfield site” is any commercial or industrial site that is “vacant or underutilized and on which there has been, or there is suspected to have been, a discharge of a contaminant.” BRIPA further expands the definition of Brownfield sites to include sites where there is or suspected to be contaminated building materials.
BRIPA takes an approach similar to that of the New York Brownfields Cleanup Program by awarding tax credits of up to the lesser of 40 percent of remediation costs or $4 million under redevelopment agreements entered into by the state and a developer. There is a cumulative cap of $50 million that can be awarded annually under BRIPA. Projects that are eligible for tax credits under BRIPA are those that are located at Brownfield sites and where the tax credit is necessary to make the projects economically feasible. Other eligibility requirements include that a project financing gap exists and that the municipality in which the redevelopment project is located has expressed support for the project.
Unlike BCSRA, which more often provides benefits for large industrial site cleanups, BRIPA is intended to work for the redevelopment of sites located in low income and environmentally overburdened communities. This is illustrated by a provision that allows the consideration of additional factors in evaluating an application, including the economic feasibility of the project, the benefit of the project to the community in which it is located, and the degree to which the project will promote job creation and economic development and have other positive impacts on overburdened communities. (As also noted on this blog, those involved in the anticipated recreational and existing medical cannabis industry are ineligible for these incentives, despite the common legislative goal of providing benefit for overburdened communities.)
Developers and businesses should consider and evaluate whether these incentives, or other new or existing economic incentive programs in New Jersey, are available to them. (Other economic incentives included in NJERA are described in the Gibbons blog posted on January 7, 2021.) Please do not hesitate to reach out to Jordan Asch with any questions or inquiries with regard to BRIPA or the BCSRA.