Sen. Chris Murphy has introduced legislation that would revive two expired tax incentives designed to spur the clean-up and redevelopment of contaminated industrial sites.
Murphy’s Creating Livable Environments and New Usable Property (CLEAN UP) Act would enable developers to fully deduct the costs of environmental cleanups on brownfield sites in the year those costs are incurred. By doing this, developers would gain the full savings of the deduction in the first year of investment, rather than incrementally benefiting from the deduction over several years.
Furthermore, qualified developers would be exempt from paying unrelated business income taxes on profits earned from the sale or exchange of certain brownfield properties. This would change the current law that requires developers to be fully taxed on the change in value of the land when they sell it.
The entities responsible for creating the hazardous conditions in the first place would not qualify for the proposed tax incentive under CLEAN UP. Entities assuming responsibility of the polluted property who incur a cleanup charge exceeding $550,000 or 12 percent of the property’s fair market value would qualify.
“I’ve heard from officials throughout Connecticut that they’re regularly approached by companies that want to relocate here, but they can’t find property to build on,” Murphy said.
“Contaminants and other dangerous substances that may have seeped into the ground decades ago make the cost of cleaning up these so-called brownfields simply too high. My CLEAN UP Act will incentivize private developers to come in and take on these big cleanup projects so that new businesses can put down their Connecticut roots and start creating jobs. I know there’s bipartisan support for these tax incentives, and I’m going to work hard to get this passed into law. The opportunity in Connecticut is too big to pass up.”