§6021. Brownfields Investor Tax Credit
A.(1) Purpose. The primary objective of this Section is to stimulate environmental economic development in Louisiana by encouraging the cleanup, redevelopment, and productive reuse of brownfields sites in the state. The legislature hereby finds and declares that unknown environmental liabilities are preventing communities, developers, and investors from restoring brownfields properties to productive use and revitalizing impacted neighborhoods. Brownfields sites languish because developers, both public and private, face a daunting challenge in the form of exorbitant environmental site assessment study costs, followed by potentially even more expensive cleanup costs. Banks and other traditional financing sources have been and remain reluctant to finance the costs involved in the initial assessment of brownfields sites. These sites may have significant contamination but nonetheless retain strong development or redevelopment potential. Properties that were once used for industrial, manufacturing, or commercial uses are lying abandoned or under used due to the suspicion or actual knowledge of hazardous substance contamination.
(2) In furtherance of that purpose, there is hereby established a tax structure which encourages private investment. This structure will provide for state participation in the form of tax credits to encourage investment in state-certified brownfields site redevelopment.
B. Definitions. The following terms shall have the following meanings for the purposes of this Section:
(1) "Brownfields site" or "state-certified site" means an identified area of immovable property in the state for which a voluntary remediation action or a voluntary remedial investigation concerning the presence or potential presence of a hazardous substance or pollutant is authorized by the secretary pursuant to Part II of Chapter 12 of Subtitle II of Title 30 of the Louisiana Revised Statutes of 1950.
(2) "Investment" shall mean the expenditure for the voluntary remedial investigation or voluntary remediation of a brownfields site by any entity or individual.
(3) "Responsible person" means responsible person or responsible landowner as those terms are defined in R.S. 30:2285.2.
(4) "Voluntary remedial investigation" means the determination of the nature and extent of potential threats to human health and the environment through data collection and site characterization and the development of remedial action goals, all as authorized and approved by the secretary pursuant to Part II of Chapter 12 of Subtitle II of Title 30 of the Louisiana Revised Statutes of 1950.
(5) "Voluntary remediation action" means risk-based cleanup of a voluntary remediation site performed in accordance with a voluntary remedial action plan approved by the secretary pursuant to Part II of Chapter 12 of Subtitle II of Title 30 of the Louisiana Revised Statutes of 1950.
C. Investor tax credit; specific projects. (1)(a) There is hereby authorized a credit against state income tax for the investment by a taxpayer in a voluntary remediation action or a voluntary remedial investigation as provided for in this Section by any person who is not a responsible person, as follows:
Except as provided for in Paragraph (2) of this Subsection:
(i) Any person who is the holder of investor tax credits shall be allowed a tax credit of fifteen percent of the total investment made in a voluntary remedial investigation at a state-certified site as provided for in this Section.
(ii) Any person who is the holder of investor tax credits shall be allowed a tax credit of fifty percent of the total investment made in a voluntary remediation action at a state certified site as provided for in this Section.
(b) A tax credit shall be earned by investors at the time the expenditures are made by a party in either a voluntary remedial investigation or voluntary remediation action. However, credits cannot be applied against a tax until the expenditures are certified by the secretary of the Department of Environmental Quality as provided for in Items (D)(2)(a)(ii) and (D)(2)(b)(ii) of this Section.
(c) No credit shall be allowed under this Section for any expenditures for which a taxpayer receives a credit, rebate, or other tax incentive granted by the state under any other provision of law.
(2) Tax credits associated with a state-certified site shall never exceed the total investment in such site.
(3) The credit shall be allowed against the income tax for the taxable period in which the credit is earned as provided for in Paragraph (1) of this Subsection. If the tax credit allowed pursuant to this Section exceeds the amount of such taxes due, then any unused credit may be carried forward as a credit against subsequent tax liability for a period not to exceed ten years. In no event shall the amount of the tax credit applied by a taxpayer in a taxable period exceed the amount of such taxes due from the taxpayer for that taxable period.
D. Review of applications; certification and administration. (1) Any voluntary remedial investigation application and voluntary remediation application for such tax credit shall be submitted to the Department of Environmental Quality. Such applications shall be provided by the Department of Environmental Quality pursuant to the provisions of Part II of Chapter 12 of Subtitle II of Title 30 of the Louisiana Revised Statutes of 1950, and regulations adopted pursuant thereto, and shall include a requirement that the applicant provide a statement of the projected economic development benefits to the community in which the project is located. Upon receipt of such application, the Department of Environmental Quality shall issue a site specific identification number. Such site identification number shall then be forwarded to the Department of Revenue. The Department of Environmental Quality shall determine whether the information furnished by the applicant is true and correct.
(2)(a)(i) Upon approval by the secretary of the Department of Environmental Quality of a voluntary remedial investigation tax credit application, the applicant may proceed with his voluntary remedial investigation. Any such investigation shall be conducted according to Department of Environmental Quality oversight.
(ii) After a satisfactory demonstration that the voluntary remedial investigation is complete, the Department of Environmental Quality shall approve the remedial investigation report and shall issue a certificate of completion to the taxpayer-applicant and forward it to the secretary of the Department of Revenue.
(b)(i) Upon approval by the secretary of the Department of Environmental Quality of a voluntary remediation tax credit application, the applicant may proceed with his voluntary remediation action.
(ii) After satisfactory demonstration that the voluntary remedial action has been accomplished and the Department of Environmental Quality approves the voluntary remediation action report, the department shall issue a certificate of completion to the taxpayer-applicant and shall forward the same to the secretary of the Department of Revenue.
(3) The secretary of the Department of Environmental Quality shall notify the secretary of the Department of Revenue within fifteen days after notice from a taxpayer-applicant where either a voluntary remedial investigation or a voluntary remediation has been terminated. No further tax credit shall be allowed if either a voluntary remedial investigation or a voluntary remediation is terminated.
E. Application of the credit. (1)(a) All entities taxed as corporations for Louisiana income tax purposes shall claim any credit allowed under this Section on their corporation income tax return.
(b) Individuals, estates, and trusts shall claim any credit allowed under this Section on their income tax returns.
(2) Entities not taxed as corporations shall claim any credit allowed under this Section on the returns of the partners or members as follows:
(a) Corporate partners or members shall claim their share of the credit on their corporate income tax returns.
(b) Individual partners or members shall claim their share of the credit on their individual income tax returns.
(c) Partners or members that are estates or trusts shall claim their share of the credit on their fiduciary income tax returns.
(3) Certification of completion shall be remitted with any income tax return on which a credit is claimed.
(4) The secretary of the Department of Environmental Quality shall be responsible for the submission of the initial certification of a voluntary remedial investigation and the final certification of completion of voluntary remediation on a state-certified brownfields site together with the year of completion; taxpayer identification number; type of credit, either voluntary remedial investigation or voluntary remediation; and the certified total expenditures to the secretary of the Department of Revenue.
(5) The Department of Environmental Quality and the Department of Revenue shall promulgate such rules and regulations as are necessary to carry out the intent and purposes of this Section in accordance with the general guidelines provided herein.
F. Recapture of credits. If the secretary of the Department of Environmental Quality or the secretary of the Department of Revenue find that funds for which a taxpayer received credits according to this Section are not invested in and expended with respect to a state-certified assessment or remediation then the investor's state income tax for such taxable period shall be increased by such amount necessary for the recapture of credit provided by this Section. Any taxpayer applying for the credit shall be required to reimburse the Department of Environmental Quality for audits or recapture of credits.
G. Recovery of credits by the Department of Revenue. (1) Credits previously granted to a taxpayer may be recovered by the secretary of the Department of Revenue through any collection remedy authorized by R.S. 47:1561.
(2) The only interest that may be assessed and collected on recovered credits is interest at a rate three percentage points above the rate provided in R.S. 9:3500(B)(1), which shall be computed from the original due date of the return on which the credit was taken.
H. Ineligible participants. No corporation or partnership including any company owned, affiliated, or controlled, in whole or in part, by any company or person that is a responsible person or is in default on a loan made by the state or a loan guaranteed by the state, or any company or person who has ever declared bankruptcy under which an obligation of the company or person to pay or repay public funds or monies was discharged as a part of such bankruptcy shall be eligible to receive any tax incentive authorized under this Section. In addition, no responsible person shall be eligible to receive any tax incentive pursuant to this Section.
I. Transferability of the credit. Any tax credits provided for in this Section not previously claimed by any taxpayer against its income tax may be transferred or sold to another Louisiana taxpayer, subject to the following conditions:
(1) A single transfer or sale may involve one or more transferees. The transferee of the tax credits may transfer or sell such tax credits subject to the conditions of this Subsection.
(2) Transferors and transferees shall submit to the Department of Revenue, in writing, a notification of any transfer or sale of tax credits within ten business days after the transfer or sale of such tax credits. The notification shall include the transferor's tax credit balance prior to transfer, a copy of any tax credit certification letter issued by the Department of Environmental Quality, the name of the state-certified site, the transferor's remaining tax credit balance after transfer, all tax identification numbers for both transferor and transferee, the date of transfer, the amount transferred, a copy of the credit certificate, price paid by the transferee to the transferor for the tax credits, and any other information required by the Department of Revenue. For the purpose of reporting transfer prices, the term "transfer" shall include allocations pursuant to R.S. 47:6007(C)(3) as provided by rule.
(3) Failure to comply with this Paragraph will result in the disallowance of the tax credit until the taxpayers are in full compliance.
(4) The transfer or sale of this credit does not extend the time in which the credit can be used. The carry forward period for credit that is transferred or sold begins on the date on which the credit was originally earned.
(5) To the extent that the transferor did not have rights to claim or use the credit at the time of the transfer, the Department of Revenue shall either disallow the credit claimed by the transferee or recapture the credit from the transferee through any collection method authorized by R.S. 47:1561. The transferee's recourse is against the transferor.
(6) The transferee shall apply such credits in the same manner and against the same taxes as the taxpayer originally awarded the credit.
J. No tax credits shall be granted or allowed after December 31, 2009. However, the transferability provisions of Subsection (I) of this Section shall continue to be effective after December 31, 2009 for tax credits authorized prior to such date.
Acts 2005, No. 156, §1, eff. July 1, 2005; Acts 2007, No. 392, §1; Acts 2013, No. 418, §1, eff. June 21, 2013.