Funding Sources and Incentives New Jersey has developed a variety of programs that provide funding or other incentives for the redevelopment of brownfields, which includes the following: Hazardous Discharge Site Remediation Fund The Hazardous Discharge Site Remediation Fund (HDSRF) is the primary funding source for brownfield remediation in New Jersey, providing grants and low-interest loans to businesses, municipalities, and private property owners for environmental investigation and remediation of brownfields. HDSRF monies are distributed under two programs, one for municipalities and one for private property owners. The HDSRF is administered jointly by the NJDEP and the New Jersey Economic Development Authority. Municipal Assistance. HDRF assistance is available to municipalities to fund environmental studies of municipally owned brownfield sites. This aid is provided as a 100 percent grant for preliminary assessments. The New Jersey Redevelopment Authority Act, P.L. 1996, c. 62 (N.J.S.A. 55:19-20 et seq.) extended the funding eligibility of the program to permit municipalities to receive grants for site investigations. In addition, HDSRF funding may be used for low-interest loans for remediation actions. To be eligible, a municipality must adopt a development or redevelopment plan or be able to demonstrate that there is a "realistic opportunity" that the site will be redeveloped. At a minimum, a municipality must hold a tax sale certificate in order to undertake the initial investigation of a site. It must actually own the property to be eligible to perform further investigation or remediation. Loans for remediation are two points below the federal discount rate with a three percent floor. Private Assistance. HDSRF assistance also is available to fund the remediation of privately-owned properties. This assistance includes Innocent Party Grants providing 50 percent of the cost of a cleanup. These grants are available to property owners who acquired land prior to December 1983, on which there has been a discharge of a hazardous substance. The contamination cannot be the result of actions taken by the new owner of the site, or any person with permission from the applicant to use the site. Also available are 25 percent matching grants for up to $100,000. These grants are available for businesses or individuals with a net worth of less than $2 million who propose using approved innovative technology for site remediation, and where the remediation results in a cleanup of the property to either unrestricted or limited-restricted use standards. In addition, private parties may seek loans through the HDSRF, which are available at the federal discount rate with a five percent floor. Urban Site Acquisition Program The Urban Site Acquisition Program (USA) provides low-interest, short-term loans to facilitate acquisition and site assembly of properties within the 68 eligible municipalities identified by the state Urban Coordinating Council (UCC). The list of eligible UCC municipalities can be found at UCC website (link to http://www.state.nj.us/njra/urbcouncil.html). To participate in the program, there must be a redevelopment plan for the site that has a realistic chance of attracting a redeveloper. Predevelopment costs, including the preparation of a redevelopment plan, are eligible. Funds available through the USA Program are intended as "bridge" funding to get redevelopment projects to the construction stage. Funding from other sources must be available. To be eligible, municipalities must use these monies to leverage funds from other public and private sources, such as UEZ funds or dedicated payments in lieu of taxes (PILOTs). Once the developer has permanent financing in place, the USA Program loans must be repaid, although the loan can be forgiven under special circumstances. Landfill Reclamation and Improvement Districts Municipalities are permitted to establish landfill reclamation and improvement districts under the Large Site Landfill Reclamation And Improvement Law, P.L. 1995, c. 173 (N.J.S.A.40A:12A-50 et seq), which was enacted to foster the redevelopment of former municipal landfill sites. A landfill reclamation and improvement district is established by municipal ordinance as part of a redevelopment area. Once a district is created, a municipality may offer tax abatements to property owners in the area, in accordance with the Long Term Tax Abatement and Exemption Law, P.L. 1991, c. 431 (N.J.S.A. 40A:20-1 et seq.). A municipality also may collect special assessments in accordance with the Special Improvement District Act, P.L.1972, c.134 (N.J.S.A.40:56-71). Monies collected by special assessments may be used to secure revenue bonds issued by the New Jersey Economic Development Authority, either through application by the governing body or an authorized redevelopment entity. Revenues from payments in lieu of taxes (PILOTs) and special assessments may be used to fund the closure, remediation, and redevelopment of a municipal landfill, and also the construction of infrastructure improvements. To use its authority granted under the law, however, a municipality must designate the landfill in need of redevelopment and adopt a redevelopment plan for the district. Redevelopment Area Bond Financing Law The Redevelopment Area Bond Financing Law, P.L. 2001, c. 310 (N.J.S.A.40A:12A-64 et seq.), commonly known as the RAF, includes many of the financing options provided under the Large Site Landfill Reclamation and Improvement Law and is applicable to all redevelopment areas. The RAF permits any municipality that has designated an area in need of redevelopment pursuant to the Local Redevelopment and Housing Law to issue tax-exempt bonds to fund redevelopment activities and related public improvements, either directly or through application to the New Jersey Economic Development Authority or New Jersey Redevelopment Authority. Municipalities may repay the bonds by pledging payments in lieu of taxes from the redevelopment project or by levying a "special assessment" on the project similar to a special improvement district (SID) or business improvement district (BID). This protects the bondholders against the redeveloper declaring bankruptcy and defaulting on the payments under a tax-exemption agreement. The RAF may be used to fund the redevelopment of smaller brownfield sites as part of an adopted redevelopment plan. However, the RAF does not include a provision for levying franchise assessments, as is permitted in the Large Site Landfill Reclamation and Improvement Law. Under the RAF, Law a municipality must obtain the approval of NJDCA's Local Finance Board prior to enacting the bond ordinance for the project. Environmental Opportunity Zones A municipality with identified brownfield sites may adopt an ordinance establishing an Environmental Opportunity Zone pursuant to the Environmental Opportunity Zone Act, P.L. 1995, c.413. The EOZ offers a developer the opportunity to exchange up to 15 years of tax abatement for the cost of remediating the property to the applicable ISRA standards. The municipality receives incremental Payments in Lieu of Taxes (PILOT) based on the assessed value of the property prior to remediation assessment.