The Brownfields Tax Incentive Now Available Free from the Institute of Brownfield Professionals - August 28, 2007

Thinking about brownfields development? A brownfields tax incentive fact sheet, guidelines for using the tax incentives, and answers to frequently asked questions, along with case histories and information about other resources, is now available free of charge here at the Institute of Brownfield Professionals website.  

According to Institute Executive Director John P. Bachner, “The material included in The Brownfields Tax Incentive was developed by the U. S. Environmental Protection Agency as three separate documents. We’ve combined them into one document for ease of reference.”

The frequently asked questions (FAQ) section of the document may be the most valuable, Bachner said, noting that 38 key questions are asked and “answered in valuable detail.” The questions cover five distinct areas of inquiry:

• background on the brownfields tax incentive,
• meeting the contamination criteria, 
• determining eligible expenses, 
• meeting the ownership criteria, and
• securing state property eligibility statements.

Some of the questions include:

• What properties are eligible for the Brownfields Tax Incentive? 
• Are taxpayers who cause contamination eligible for the Brownfields Tax Incentive? 
• What is the definition of "hazardous substance" in the tax provision? 
• Are petroleum and oil eligible contaminants under the Brownfields Tax Incentive? 
• What documentation must taxpayers provide to their state to show that there has been a release or a threat of release? 
• How does the Gulf Opportunity Zone Act complement the Brownfields Tax Incentive? 
• Can the expenditures from the removal of asbestos or lead from a building be deducted under the Brownfields Tax Incentive? 
• Do costs for site assessment and investigation activities qualify as remediation expenditures under the Brownfields Tax Incentive?
• Do the costs related to construction of access roads and operations and maintenance (O&M) qualify as remediation expenditures? 
• Can taxpayers deduct and/or depreciate the remediation expenditures under the Brownfields Tax Incentive if they are going to reuse the property for a park or open space? 
• How would the Brownfields Tax Incentive apply in a situation where a taxpayer capped soil contamination with a parking lot? 
• How far back can cleanup costs be deducted under the Brownfields Tax Incentive? 
• Can investment properties and properties held by a developer for future sale qualify for the tax incentive? 
• How can a taxpayer verify that a property is eligible for the Brownfields Tax Incentive? 
• How long are state property eligibility statements valid? Will the states have to issue statements for sites incurring ongoing O&M costs each year?

“The EPA has done a tremendous job putting this information together. It’s also available at the EPA’s website along with additional information that’s referenced in The Brownfields Tax Incentive," Mr. Bachner said.

The Institute of Brownfield Professionals is a not-for-profit educational organization comprising some 1,000 members throughout North America. The Institute developed the Registered Brownfield Professional (R.B.P.) designation to recognize those brownfield professionals who are particularly well-qualified. According to Bachner, “Relying on any individual who meets the federal government’s definition of ‘environmental professional’ can be problematic, given that ‘environmental professionals’ do not need even a high-school diploma to qualify for that designation. While some of those who meet the minimum criteria may be able to lead a genuinely uncomplicated all-appropriate inquiry (AAI) study, one of the most important services environmental professionals perform is determining the type of study appropriate for the site. Those who lack the requisite education, training, and experience are far more likely to recommend what they can do as opposed to what the client really needs. The consequences can be extremely costly.” A searchable database of members and Registered Brownfield Professionals also is available at the Institute’s website.