|Date:||Tue, 8 Jun 1999 10:06:53 -0700 (PDT)|
|Subject:||Brownfields Cleanups Sweetened by the Tax Code|
Article from EPA's Cleanup News BROWNFIELDS TAX INCENTIVE KARL ALVAREZ & BECKY BROOKS OUTREACH AND SPECIAL PROJECTS STAFF OFFICE OF SOLID WASTE AND EMERGENCY RESPONSE April 1999 For more information contact Karl Alvarez, 202-260-3525 Brownfields Cleanups Sweetened by the Tax Code EPA's efforts toward redeveloping lands which are abandoned, idle, or under-utilized because of real or perceived contamination have received support from a very unlikely source: the U.S. tax code. Well, perhaps it's not so unlikely. The tax code can offer financial incentives on a scale which defies all other sources. Section 198 of the tax code seeks to bring thousands of brownfields properties back into productive use. Current environmental liability can serve as a disincentive to redevelopment of a former industrial site; less uncertainty exists on suburban or rural greenfields. With high density in the urban core and existing infrastructure (roads, sewers, schools, mass transit), property values and taxes are usually higher in our inner cities. Demolition or restoration of existing buildings and structures is often more expensive than new construction. The bottom line: all of these trends serve as incentives to abandon the city core in favor of the suburban areas outside of town. In an effort to minimize such trends and encourage brownfields redevelopment, on August 5, 1997, President Clinton signed into law the Taxpayer Relief Act of 1997, which included the Brownfields Tax Incentive provisions. The changes to the tax code are designed to "level the playing field" for brownfields properties. The brownfields incentive allows taxpayers to deduct from their net income the costs of certain cleanup activities in targeted areas in the year incurred. Four criteria were developed to focus the incentive's impact on lower income, urban, comercial/ industrial areas. Eligible property must fall into at least one of the four categories designated below: 1. Census tracts with a poverty rate of 20% or more. 2. Census tracts with populations of less than 2,000 people which are more than 75% zoned commercial/industrial and adjacent to a census tract with a poverty rate of 20% or more. 3. All Federally designated Empowerment Zones or Enterprise Communities. 4. EPA Brownfields Pilot sites designated prior to February 1997. To assist taxpayers in determining the eligibility of their specific property, EPA has provided a fact sheet which details all available sources of criteria information. This fact sheet can be found, along with a series of additional tax incentive information, on the Brownfields home page at http://www.epa.gov/brownfields. On March 5, 1999, OSWER's Outreach and Special Projects Staff, which is responsible for implementing the Brownfields program, hosted a National Brownfields Tax Incentive Roundtable in Chicago, IL, to hear from brownfields stakeholders on the incentive. Bankers, lawyers, community activists, developers, accountants, insurers, engineers, analysts, and public officials from Federal, State, and local governments began a dialogue on strategies to educate taxpayers on the incentive, increase use of the incentive, and strengthen the incentive based on market and business needs. A summary of the Roundtable proceedings and tools for educating taxpayers and stakeholders will soon be available on the Brownfields home page. The Brownfields Tax Incentive is an additional tool in local efforts to marshal funding for revitalization and redevelopment efforts. We recognize that the incentive will not create redevelopment of brownfields, but at least it can help "sweeten" a potential real estate redevelopment project.
Prev by Date: announcement: Brownfields to American Dream Fields|
Next by Date: RE: gentrification revisited....?
Prev by Thread: announcement: Brownfields to American Dream Fields|
Next by Thread: Re: institutional controls