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Indiana’s Exciting Redevelopment Changes By Calvin Kelly The recently concluded 2005 Indiana legislative session yielded many
exciting changes related to brownfield redevelopment in the Hoosier
state. Indiana’s brownfield changes include: All of these changes were advocated by new Indiana Governor Mitch Daniels and received strong bipartisan support from the Indiana General Assembly. Liability Relief Like in many other states, one of the major barriers to brownfield redevelopment in Indiana is the threat of environmental liability. Two important provisions included in the federal 2002 Brownfields Small Business Liability Relief and Brownfields Revitalization Act — the contiguous property exemption and the prospective purchaser exemption — were adopted by the Indiana legislature. Despite the obvious strategy of adding these two new exemptions to state law, the exemptions also more closely align Indiana environmental statutes with federal law. Just one of the positive impacts for all stakeholders will be quicker and easier self-assessment of state liability based on a descriptive exemption standard. Statutory changes were also made to clarify environmental liability for Indiana political subdivisions. Previous statutes provided limited and disjointed environmental liability protection, particularly in instances involving petroleum contamination. Units of local government are now provided with clear environmental liability protection following involuntarily acquisition. This protection also applies to communities that voluntarily obtain title for purposes of remediation and redevelopment. Financial Incentives Another redevelopment tool recently added for political subdivisions is a detailed procedure to help prospective developers address back taxes due on brownfield sites. Even a modest back tax bill at a brownfield site erects a hurdle to redevelopment, particularly when there is no local process to reduce or waive those taxes in reaction to prospective redevelopment. New legislation establishes a clear voluntary process for Indiana county auditors to reduce or waive back taxes, provided the developer completes a plan for cleanup and redevelopment. The Indiana legislature also made significant changes to a pre-existing Indiana tax credit aimed at the private sector, called the Voluntary Remediation Tax Credit (VRTC). Perhaps the most significant change to the VRTC is the method of calculating the credit. Those who remediate a brownfield will now receive a 1:1 credit against any Indiana tax liability for the first $100,000 expended for remediation. The credit drops to 0.5:1 for the next $200,000 expended. The maximum credit available is $200,000. The process to obtain the credit was also streamlined, and the credit can be carried forward for five years. One-Stop Shop The final and perhaps most visible change involves the administrative strategy of Indiana’s brownfield efforts. Since the introduction of the first state tools for brownfields in 1997, various Indiana state agencies have participated in redevelopment initiatives. Starting July 1, 2005 the great majority of Indiana’s brownfield
efforts will be managed out of one place — the Indiana Brownfields
Program Office (IBPO). The IBPO will function as a “one-stop shop”
and will offer comprehensive financial, technical and legal resources
to all stakeholders and will also lead the formation of a new Indiana
chapter of the National Brownfield Association (NBA).
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© 2005 Environomics Communications. 5440 North Cumberland Ave. Chicago, Illinois 60656
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