A large factor in determining the success of any brownfield redevelopment is attaining adequate funding.  While this can be challenging, the Kentucky Brownfield Program is here to help you find funding sources for your site.  Below are some options available to both the public and private sectors.  The Brownfield Program realizes that each brownfield project is unique and we encourage you to contact us in determining what funding sources are available to you. 

Free Targeted Brownfield Assessments (TBAs)

The commonwealth of Kentucky can provide TBAs to municipalities and nonprofit agencies free of charge.  The brownfield program is currently looking for projects.  A candidate site should have redevelopment potential, be publicly owned or abandoned, and suffer from the stigma of potential environmental liability.  Kentucky is limited in the number of TBAs it can perform each year, so sites are considered on a first-come, first-served basis.    

Grants

Grants for cleanup projects are available to communities and nonprofits from a variety of sources.  Grant eligibility varies depending on the type of project and planned end use of the property.  Many of the grants available can be found on the Environmental Protection Agency (EPA) Web site.

http://www.epa.gov/swerosps/bf/cleanup_grants.htm

This is not a complete list of available grants.  The brownfield program staff can help you find grant and loan opportunities that match your project.

Loans

Revolving loan funds are another resource option. You can apply for an EPA grant to establish your own revolving loan fund for brownfield redevelopment.  Check out the EPA's Revolving Loan Fund page for more information. 

The Kentucky Infrastructure Authority administers the Clean Water State Revolving Loan Fund. To be eligible for the Clean Water State Revolving Loan Fund, the money must be used to address brownfields that have a current or potential impact upon surface or ground water. 

Tax Increment Financing (TIF)

Tax increment financing is a tool that uses future gains in taxes to finance the current improvement projects that will create those gains.  When a project such as a road, a school or hazardous waste cleanup is carried out, there is an increase in value of the surrounding real estate.  This is often followed by new development.  This creates more taxable property, thus creating more tax revenues.  Those revenues are dedicated to finance debt issued to pay for the project.  TIF creates funding for distressed areas where redevelopment might otherwise not occur and funding for projects that are unaffordable for municipalities.  Development areas can be created in blighted, distressed areas if they meet two or more of the following criteria:

• Substantial loss of residential, commercial or industrial activity or use.
• Forty percent or more of the households are low-income households.
• More than 50 percent of the residential, commercial or industrial structures are deteriorating or have deteriorated.
• Substantial abandonment of residential, commercial or industrial structures.
• Substantial presence of environmentally contaminated land.
• Inadequate public improvements or substantial deterioration in public infrastructure.
• Any combination of factors that substantially impairs or arrests the growth and economic development of the city or county; impedes the provision of adequate housing; impedes the development of commercial or industrial property or adversely affects the public health, safety or general welfare due to the development area's present condition and use. 

The commonwealth of Kentucky offers tax incentives and credits to individuals or businesses that complete a cabinet-approved cleanup on a qualified property.  A qualified property means the cabinet has made the determination that:

• All releases of hazardous substances, pollutants, contaminants, petroleum or petroleum products on the property occurred prior to the property owner's acquisition of the property.
• The property owner made all appropriate inquiries into previous ownership and uses of the property in accordance with generally accepted practices.
• The property owner or a responsible party have provided all legally required notices with respect to the contaminants found at the property.
• The property owner is in compliance with all land use restrictions and does not impede the effectiveness or integrity of any institutional control.
• The property owner complied with any information request or administrative subpoena under KRS 224.
• The property owner is not affiliated with any person who is potentially liable for the release of the contamination through direct or indirect family relation, any contractual or corporate, or financial relationship or reorganization of a business that was potentially liable.  

For qualified parties, the state and local property tax rates on a remediated brownfield property are reduced.  For three years following the cleanup, the property will not be subject to local ad valorem property taxes.  The state ad valorem property tax rate will be reduced from 31.5 cents per $100 of assessed value to 1.5 cents per $100 of assessed value.     

Qualified parties can also receive up to $150,000 worth of income tax credits for expenditures made in order to meet the requirements of the cabinet-approved cleanup.  The allowable credit for any taxable year is a maximum of 25 percent of the credit authorized.  The credit may be carried forward for 10 successive years. 

The Cabinet for Economic Development offers incentives for companies that relocate or expand in Kentucky.  Please visit the cabinet's Web site to see what assistance is available to companies wishing to make Kentucky their home.

There are host of federal tax incentives that can be linked to brownfield redevelopment. Incentives include, but are not limited to rehabilitation tax credits, low income housing credits, new market credits, brownfields cleanup tax expensing and the Federal Brownfield Cleanup Incentive (a.k.a. brownfield expensing tax credit).  This incentive expired on Dec. 31, 2007.  However, Congress is exploring extending this incentive.