Bipartisan Bill Introduced into the U.S. House to Restore Cleanup Tax Incentive
Representatives Turner and Esty team up on bipartisan brownfield cleanup bill that would revive tax break to remediate and repurpose contaminated real estate.
Last month, on April 23, 2018, U.S. Representatives Mike Turner (R-OH) and Elizabeth Esty (D-CT) were joined by Rosa DeLauro (D-CT), John Larson (D-CT), Jim Himes (D-CT), and Peter King (R-NY) to introduce the Brownfields Redevelopment Tax Incentive Reauthorization Act of 2018, H.R. 5579, which would reauthorize the expensing of environmental remediation costs through 2021. According to its co-sponsors, the bill “will spur the cleanup and redevelopment of brownfields as part of a larger effort to support job creation.”
The cleanup tax incentive was first passed as part of the Taxpayer Relief Act of 1997 and allowed certain taxpayers to deduct remediation expenditures for the cleanup of a property that was used for a trade, business or to produce income. The very pro-development tax break received a two-year extension in 2009, but was allowed to expired in 2012 without reauthorization. If enacted, H.R. 5579 would reauthorize the tax incentive through Dec. 31, 2021.
For now, H.R. 5579 was referred to the U.S. House Ways and Means Committee. But it joins similar legislative action early this year in the Senate, which also seeks to restore the cleanup tax incentive.
“As mayor of Dayton, I developed brownfields to reinvest in our city and spur economic growth, including the building of the Dayton Dragons stadium,” Rep. Turner said in a statement. “I know firsthand how important brownfields are for communities looking to rebuild. Our bill extends the brownfields tax credit to help cities like Dayton continue to grow.”
“I hear time and time again from business owners, developers and local leaders across central and northwestern Connecticut that the high costs of cleanup deter initial private sector investments,” Rep. Esty said. “Cities and towns throughout Connecticut have strong industrial histories and are now in the process of transitioning to new sources of economic growth, which is critical to creating good-paying jobs right here in our state. I’m doing what I can to be a strong partner in these efforts.”
“That’s why I’m introducing the Brownfields Redevelopment Tax Incentive Reauthorization Act, which reinstates tax incentives to help spur redevelopment. Business owners, developers, and local leaders have told me that the high costs of clean-up deter initial private sector investments. Our bill would allow developers to deduct the additional costs,” she continued.
“This bill will help bring new life to areas that have long-suffered from past industrial use. Our federal government should help improve our communities, better our citizens’ quality of life and foster economic growth,” said Rep. DeLauro. “The cleanup and redevelopment plans this bill incentivizes will revitalize our neighborhoods and provide a pathway for new economic development.”
“Towns and cities throughout Connecticut provided the Arsenal of Democracy through World War Two and beyond, creating the economic foundation that allowed our nation to thrive and grow,” said Rep. Himes. “Unfortunately, past generations weren’t the thoughtful environmental stewards that they should have been and too many of these sites were polluted and remain unusable. In order to create, attract and keep the jobs of the future that will provide for families in my district and across the country, we need to cleanup these spaces, and this bill helps provide the resources and incentives for private enterprise to do so.”
“This legislation is an essential piece for the redevelopment of many former contaminated sites. Rather than spreading deductions over time this legislation will encourage private sector involvement in the cleanup and rehabilitation of brownfields properties,” said Rep. King.
Tom Cochran, executive director of the U.S. Conference of Mayors, Clarence E. Anthony from the National League of Cities, Matthew D. Chase from the National Association of Counties, and Leslie Wollack from the National Association of Regional Councils released a joint statement saying:
Additional endorsements for the bill include:
- Smart Growth America
- LOCUS: Responsible Real Estate Developers and Investors
- National Brownfields Coalition
- U.S. Conference of Mayors
- National League of Cities
- National Association of Counties
- National Association of Regional Councils
Every Congressional District in America is home to at least one brownfield site. To date, there have been over 26,000 federally-funded brownfield assessments and 1,200 brownfield cleanups nationally, which have created 123,000 jobs and leveraged $350 billion in overall investment—a return on the public investment into the brownfield program over that time of nearly $18:$1.
By reauthorizing the federal incentive to deduct the cost of brownfield cleanups, it’s cosponsors hope and empirical evidence suggests, the new bill will drive development and economic revitalization in communities across America. With a very similar bill recently introduced into the Senate and working its way into similar bipartisan support, the prospects for this pro-development incentive seem better than most.