New Application Process Takes Effect for New York Brownfield Cleanup Program, Additional Regulations Pending

Beveridge & Diamond PC

The New York State Department of Environmental Conservation (NYSDEC) has announced that as of July 1, 2015, the reformed New York State Brownfield Cleanup Program (BCP) became effective.  NYSDEC transitioned to a new application form and application guidance as of July 1, incorporating new eligibility criteria under the BCP reforms.  A property’s eligibility for the BCP is now based on the presence of contaminants above New York’s Soil Cleanup Objectives (SCOs) or other applicable standards, criteria, or guidance.  This replaces the BCP’s former eligibility determination based on the potential complication of reuse or redevelopment by the actual or reasonably suspected presence of contaminants. 

NYSDEC also announced that as of July 1 “volunteers” in the BCP (who were not responsible for the release or disposal of contaminants at the property) are no longer responsible to pay the State’s oversight costs at the property, consistent with the BCP’s statutory reforms.

Though NYSDEC has announced the effectiveness of these aspects of the BCP, several other components of the BCP cannot be implemented until NYSDEC promulgates new regulations, as required by the enactment of the BCP reforms.  NYSDEC has proposed new regulatory definitions for the terms “affordable housing project” and “underutilized.”  These definitions are prerequisites to the effectiveness of the BCP reforms affecting eligibility for tangible property tax credits for properties in New York City, and the final definition of “affordable housing project” will determine statewide eligibility for the BCP’s affordable housing tax credit bonus.  The proposed regulations also include a new definition of “brownfield site,” based on the demonstrated presence of contaminants above SCOs or other applicable standards, criteria, or guidance.

The proposed regulatory definitions cannot be promulgated until after the end of their public comment period, on August 5, 2015.  During the comment period, NYSDEC will hold a public hearing on its proposed regulations on July 29, 2105.  As a result of this schedule, the BCP reforms relying on these definitions cannot be implemented until the new regulations are formally promulgated, in August 2015 at the earliest. 

The BCP reforms also allow NYSDEC to promulgate regulations instituting the new BCP-EZ program.  The BCP-EZ will allow parties in the program to address lightly contaminated sites under a streamlined program to obtain liability releases, while waiving potential eligibility for tax credits.  For many sites, the BCP-EZ program will effectively revive the State’s former Voluntary Cleanup Program.  NYSDEC has announced, however, that it does not expect to propose regulations for the BCP-EZ program until early 2016, so the BCP-EZ program is unlikely to be available until the summer of 2016.

With NYSDEC’s introduction of the new BCP application form and guidance, as well as the text of the proposed regulations, prospective BCP applicants can begin to prepare application materials for the program, and can also preliminarily assess whether a property may qualify for entry into the BCP, and eligibility for tax credits.  The new information on NYSDEC’s timing in instituting the BCP-EZ program also provides applicants with a potential timeframe for entry into that program, though the specifics of the program remain to be seen since they will rely in large part on NYSDEC’s regulations.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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