Agenda - 05-18-2010 - 8b - Laserfiche WebLink

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applicable only to properties that meet specified land use, geographic, and contamination requirements. To be eligible, the property must be held by the party which receives the tax incentive and hazardous materials must be present, or potentially present. In order to receive the tax credits, the property must be located within an EPA Brownfields Pilot Area (a census tract with at least 20 percent of its residents living below poverty, or a census tract of 2,000 residents or less which is zoned for at least 75 percent industrial use). State Brownfields Tax Incentive: State of North Carolina The Brownfields Property Reuse Act of 1997 enacted legislation that encourages the removal of impediments to the redevelopment of contaminated properties. In order to expedite the redevelopment of these sites, the Department of Environment and Natural Resources (DENR) offers a covenant- not -to-sue to the prospective developer if they agree to properly secure the property for reuse. It is important to note that while these defined liability benefits are extended to the prospective developer, the Brownfields Program does not change legal liability for responsible parties on -site. Additionally, the Voluntary Cleanup Program (VCP) allows parties responsible for the contamination of a site to assist in the cleanup of that site in a timely and cost - effective mariner. The VCP allows firms to hire a Registered Enviromnental Consultant who will oversee and certify site cleanup activities on behalf of the state, satisf},ing DENR regulations on a private - sector timeline. Tax Incentive for Brownfields Redevelopment: State of North Carolina This amendment to NC General Statutes creates a partial tax exemption for the value of qualifying improvements to a brownfields site during the project's first five (5) taxable years. In year one, 90 percent of the appraised value for qualified improvements is excluded; in year two, 75 percent; year three, 50 percent; year four, 30 percent; and in year five, 10 percent will be excluded. In order to qualify, prospective developers must show that they have not caused or contributed to the contamination of the site. Projects must also emphasize redevelopment, and they must have public benefit commensurate with the relief provided. Federal Historic Property Investment Incentive: United States Government The federal government offers a 20 percent tax credit for the rehabilitation of certified historic structures. A 10 percent tax credit is also offered for the renovation of non - historic, non-residential structures which were built before 1936. For both credits, the rehabilitation involved must be substantial, and the building must be depreciable. These credits are not applicable to exclusively owner - occupied structures. The owner must hold the building for five full years after the renovation has been completed, or the credit must be repaid. This repayment amount is pro -rated based upon the number of years since the credit was originally taken. State Historic Property Investment Incentive: State of North Carolina A 20 percent state tax credit for the rehabilitation of income - producing historic buildings and properties is available for firms investing in these structures, as well as a 30 percent state tax credit for qualifying rehabilitation of non- income producing historic structures, including owner - occupied personal residences. Eligible buildings are listed on the National Register of Historic Places, or are listed as a contributing building in a National Register Historic District. In addition, the rehabilitation of the property must be substantial; for income- producing properties, expenses must exceed either the adjusted basis of the building or $5,000 within a 24 month period. For non - income producing properties, the rehabilitation expense must exceed $25,000 within a 24 month period. All work on income - producing property must meet the Secretary of the Interior's Standards for Rehabilitation, and work on all other properties, must be approved by the North Carolina Historic Preservation Office. 431Page