The Massachusetts Department of Revenue (the “Department”) promulgated 830 CMR 63.38Q.1: Massachusetts Brownfields Tax Credit on July 23, 2021. During the comment period, the LSPA provided a letter of comments along with proposed edits to the regulations.  The Department committed to soliciting feedback on the regulation and the process for claiming the credit after the regulation had been in effect for two years. That time has come! 

The LSPA is collecting comments for compiling a response to the Department. Please send any comments you have to Wendy Rundle, LSPA Executive Director, at [email protected] by September 22, 2023. Also, feel free to send any comments, concerns or suggestions directly to [email protected] by September 29, 2023. 

New Legislative Session Begins

The General Court of the Commonwealth of Massachusetts, aka the Massachusetts State Legislature, began a new two-year session in early 2023. Committee leadership has been appointed, and hearings have begun. The LSPA recently submitted two letters of written testimony.

We wrote a letter of support for S. 1765 and H. 2913 “An Act to extend the Brownfields tax credit” to the Joint Committee on Revenue.  These two identical bills propose to extend the Massachusetts Brownfields Tax Credit program for five years, thereby ensuring liability relief and financial incentives to clean up and redevelop contaminated properties. 

Notes from BWSC Advisory Committee

MassDEP’s Bureau of Waste Site Cleanup Advisory Committee met on October 27, 2022 for several hours. Typically, MassDEP posts the slides and recordings of Advisory Committee meetings here. At this time, these have not yet been posted.

A brief summary of meeting highlights is provided below.

• Scope of Review on Appeal – For partial appeals, DOR will review only the denied portion of an application; the approved portion of an application will only be reviewed if there was a material misrepresentation or omission.
• Denial Explanation – DOR will provide an explanation for each credit denial.
• Asbestos Eligibility – DOR will deem asbestos removal costs to be generally eligible as long as the soil immediately under the building is contaminated and the building’s demolition was required in order to achieve a permanent solution.
• Multiple Releases – For purposes of determining whether an applicant’s costs equal or exceed 15% of the assessed value of the property (as is required to become eligible for the credit), an applicant may aggregate net response and removal costs over a 3-year period when there are multiple contaminated sites on one property.
• Effective Date of Regulation – By its terms, the regulation will go into effect when it is made public on July 9, 2021.

• Intake Timeline – When an application is submitted, DOR will contact the applicant within 30 days to notify them of which examiner has been assigned to the case and to outline the application review process.
• Intake Narrative – To accelerate DOR’s initial review, applicants will be directed to provide a narrative explaining why submitted costs are eligible.
• Review Process Updates – Applicants will receive a status update from the examiner assigned to their case every 60 days.
• Expedited Timeline – An expedited process will be established for lower-dollar, less complex BTC projects¾those worth $250K or less. Such applicants will be contacted within 7 days and will receive updates every 30 days.
• Appeals Timeline – DOR has established a timeframe for the processing of appeals. The stages of the process are as follows:
1. Appeal is initiated. This occurs when the Office of Appeals receives the appeal.
2. Initial Scheduling Letter sent. Within 30 days of Stage 1.
3. Complete Appeal filed by Applicant. Within 60 days of Stage 1.
4. Opening Conference held. Within 90 days of Stage 1.
5. Information and Document Requests (IDRs) issued and answered. These are to be issued by the Appeals Officer within 60 days of the Opening Conference (Stage 4) and are to be answered by the Applicant within 30 days after they were issued.
6. Formal Scheduling Letter sent (if no settlement has been reached). Within 60 days after all IDRs have been answered.
7. Formal Hearing held. No later than 60 days after the Formal Scheduling Letter has been issued.
8. Formal Letter of Determination issued. 60 days after the Formal Hearing. If the appeal is complex, this stage may be extended by an additional 90 days.

• Staffing – DOR will hire a dedicated environmental engineer and is also hiring and training 3 additional audit staff members.

• Revisit Regulation in 2 Years – DOR will solicit stakeholder feedback on the regulation two years from the date of final promulgation.