Senate Bill 2377

AN ACT TO CREATE THE MISSISSIPPI BROWNFIELDS VOLUNTARY CLEANUP AND REDEVELOPMENT INCENTIVES ACT; TO EXPRESS THE FINDINGS OF THE LEGISLATURE; TO CREATE A NEW SECTION TO BE CODIFIED AS SECTION 27-7-22.16, MISSISSIPPI CODE OF 1972, WHICH AUTHORIZES AN INCOME TAX CREDIT FOR REMEDIATION COST INCURRED AT A BROWNFIELD AGREEMENT SITE; TO DEFINE CERTAIN TERMS; TO PRESCRIBE THE AMOUNT OF THE INCOME TAX CREDIT; TO REQUIRE THE COMMISSION ON ENVIRONMENTAL QUALITY TO APPROVE AN AMOUNT OF REMEDIATION COSTS ELIGIBLE FOR THE TAX CREDIT; TO PROVIDE FOR SUBMISSION OF SUPPORTING INFORMATION TO THE STATE TAX COMMISSION; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act shall be known and may be cited as the "Mississippi Brownfields Voluntary Cleanup and Redevelopment Incentives Act."

SECTION 2. The Legislature finds:

(a) There are properties in Mississippi, often referred to as "brownfields," that were contaminated or were perceived to have been contaminated by past activities, but are attractive locations for redevelopment.

(b) The safe development or redevelopment of brownfields would benefit the citizens of Mississippi in many ways, including improving the tax base of local governments and creating job opportunities for citizens in the vicinity of brownfields.

(c) Owners and prospective developers and redevelopers of brownfields, local governments in which brownfields are located, and federal and state government agencies should be encouraged to provide capital and labor to improve brownfields so that the property can be determined to be safe or made safe for appropriate future use.

(d) The reduction of public health and environmental hazards on existing brownfield sites is essential to creating a better quality of life for the citizens of this state.

(e) Section 49-35-27, Mississippi Code of 1972, requires the Department of Environmental Quality to conduct a survey of incentive programs in other states for cleanup of contaminated sites by January 1, 1999. The department has conducted its survey and filed its report showing incentives provided in other states.

SECTION 3. The following shall be codified as Section 27-7-22.16, Mississippi Code of 1972:

27-7-22.16. (1) (a) Except as otherwise provided under this subsection, the words and phrases used in this section shall have the meanings ascribed to them in Section 49-35-5, Mississippi Code of 1972.

(b) "Remediation costs" means reasonable costs paid for the assessment, investigation, remediation, monitoring and related activities at a brownfield agreement site which are consistent with the remedy selected for the site and costs paid to the Department of Environmental Quality for the processing of a brownfield agreement application and administration of a brownfield agreement. Remediation costs shall not include (i) costs incurred before June 26, 1999; (ii) costs incurred after the issuance of a No Further Action letter under Section 49-35-15, Mississippi Code of 1972; (iii) costs incurred before the acceptance of a brownfield agreement site into the Mississippi Brownfields Voluntary Cleanup and Redevelopment program; (iv) costs incurred for any legal services or litigation costs; and (v) any funds provided by any federal, state or local governmental agency or political subdivision.

(2) Subject to the limitations provided in subsection (4) of this section, upon submission to the State Tax Commission of information provided for in subsection (5) of this section and any other documentation as the State Tax Commission may require, any brownfield party who (a) has conducted remediation at a brownfield agreement site in accordance with Sections 49-35-1 through 49-35-25 and (b) has incurred remediation costs for activities under Sections 49-35-1 through 49-35-25, as approved by the Department of Environmental Quality, shall be allowed a credit in an amount equal to twenty-five percent (25%) of the remediation costs at the brownfield agreement site as approved by the department, against the taxes imposed under this chapter for the tax year in which the costs are incurred.

(3) (a) Before applying for the tax credit authorized in this section, a brownfield party shall submit an application for review of remediation costs to the Department of Environmental Quality. The application shall be on forms prescribed by the Commission on Environmental Quality and provided by the department. The application shall include the following:

(i) A section identifying the brownfield party, the brownfield agreement site, the date the brownfield agreement was executed and the tax year for which the credit is sought;

(ii) An itemization and documentation of the remediation costs incurred;

(iii) A demonstration that the costs incurred are remediation costs;

(iv) A demonstration that the remediation costs submitted for review were incurred by the brownfield party; and

(v) Any other information which the Commission on Environmental Quality or the State Tax Commission deems appropriate.

(b) The department shall review to determine whether the costs submitted are remediation costs and whether the costs incurred are reasonable.

(c) Within sixty (60) days after receipt of a completed application by the department, the department shall approve, disapprove or approve with modification the remediation costs submitted in the application. The department shall notify the brownfield party in writing of its decision. If the department approves the remediation costs submitted in the application, the department shall state the amount of remediation costs to be applied toward the tax credit under this section for the given tax year. If the department approves with modification or disapproves the remediation costs contained in the application, the department shall state the reasons for disapproval or approval with modification and shall state the amount of remediation costs, if any, to be applied toward the tax credit under this section for the given tax year.

(d) Within thirty (30) days after receipt of the department's decision, the brownfield party may request a hearing before the commission regarding the decision of the department to approve with modification or disapprove the remediation costs contained in the application in the form specified under Section 49-17-35. An appeal of the commission's decision may be taken as provided under Section 49-17-41.

(e) The department's review of the application for review of remediation costs under this section shall be considered a part of the administration of the brownfield agreement.

(4) (a) The annual credit provided for in this section shall not exceed the lesser of Forty Thousand Dollars ($40,000.00) or the amount of the income tax imposed upon the brownfield party at the brownfield agreement site for the taxable year as reduced by the sum of all other credits allowable to the brownfield party under this chapter, except for credit for tax payments made by or on behalf of the brownfield party. Any unused portion of the credit may be carried forward for the succeeding five (5) tax years.

(b) The maximum total credit under this section for a brownfield agreement site is One Hundred Fifty Thousand Dollars ($150,000.00).

(5) To be eligible for the tax credit, the brownfield party must submit a copy of the letter from the department stating the amount of remediation costs approved by the department for the given tax year.

SECTION 4. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the income tax laws before the date on which this act becomes effective or are begun thereafter. The provisions of the income tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.

SECTION 5. This act shall take effect and be in force from and after January 1, 2006.