New Brownfield Bill Passes Easily in Florida

On May 4, 2006, the Florida legislature unanimously passed HB 7131 overhauling the state’s brownfield program. At press time, it was awaiting signature by Governor Bush.

The bill enhances the economic incentives for redeveloping brownfields — incentives now worth as much as $1 million in tax credits in the final year of cleanup. In addition, there are enhanced incentives for projects creating affordable housing. Enhancements the bill makes to Florida’s existing program include:

Improved Tax Credit Incentives — Applicants may now be able to obtain tax credits for up to 50 percent of cleanup costs, with a maximum of $500,000 per year per site. The percentage is increased to 75 percent where the redevelopment will result in the creation of affordable housing. Moreover, in the final year of a project applicants may claim an additional 25 percent of total cleanup costs — up to an additional $500,000 — for a total of $1 million in tax credits. These tax credits may be used over a period of years, transferred to affiliates, and bought and sold on the open market.

Improved Loan Guarantee — The legislature increased the amount of the existing loan guarantee from 10 percent to 50 percent, and further increased it by an additional 25 percent for redevelopment that results in the creation of affordable housing.

Ad Valorem Tax Credit Incentives — The new bill clarifies the ability of local governments to award ad valorem tax credits and includes provisions for facilitating that process.

Sites Impacted by Solid Waste — The new bill allows tax credit applicants to recover costs for certain activities associated with the cleanup of sites impacted by solid waste.

Additionally, the new bill features several other improvements, such as allowing applicants to recover initial assessment costs, and allowing incentives for a greater number of projects. House Bill 7131 is an important step toward revitalizing Florida’s communities, cleaning up the environment, and enhancing economic development opportunities. BFN