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Brownfields Exclusion

A "brownfields site" is an abandoned, idled or underused property where the threat of environmental contamination has hindered its redevelopment.  Common examples are auto salvage yards and service stations contaminated by petroleum products, and laundry sites contaminated by improperly disposed dry cleaning solvents . 

As an incentive for cleaning up and/or rehabilitating these sites, North Carolina enacted a provision under General Statute 105 to exclude a portion of the appraised value from ad valorem taxation.  This exclusion is for properties which are under an active, filed "Brownfields Agreement" with the NC Department of Environment and Natural Resources.  These agreements must also be filed with the Register of Deeds within the respective counties where the properties reside.  The Brownfields Agreement specifies what contaminants are on the property, what structures – improvements - can be built, and any necessary actions to rehabilitate the property for the intended use.  Improvements under this agreement must be 100% complete as of January 1st of the year in which an owner is filing an application for exclusion. If the owner files a timely brownfields exclusion application, with a copy of their Brownfields Agreement, the owner will receive an exclusion of assessed value on a sliding scale for 5 years, beginning with the year in which the application is made. 
Such exclusions are not retroactive.  When a property has been approved for the exclusion, the exclusion remains in effect on the sliding scale for 5 years, even if ownership changes.  Once a brownfields exclusion has been applied to an improvement on the property, it cannot be excluded again following expiration of the original agreement.

NC General Statute - Brownfields Exclusion

§ 105 277.13.  Taxation of improvements on brownfields.
a) Qualifying improvements on brownfields properties are designated a special class of property under Article V, Sec. 2(2) of the North Carolina Constitution and shall be appraised, assessed, and taxed in accordance with this section. An owner of land is entitled
b) to the partial exclusion provided by this section for the first five taxable years beginning after completion of qualifying improvements made after the later of July 1, 2000, or the date of the brownfields agreement. After property has qualified for the exclusion provided by this section, the assessor for the county in which the property is located shall annually appraise the improvements made to the property during the period of time that the owner is entitled to the exclusion.
c) For the purposes of this section, the terms "qualifying improvements on brownfields properties" and "qualifying improvements" mean improvements made to real property that is subject to a brownfields agreement entered into by the Department of Environment and Natural Resources and the owner pursuant to G.S. 130A 310.32.  The following table establishes the percentage of the appraised value of the qualified improvements that is excluded based on the taxable year:

 Year                                                  Appraised Value Excluded
Year 1                                                                       90%
Year 2                                                                       75%
Year 3                                                                       50%
Year 4                                                                       30%
Year 5                                                                       10%.

Property owners who have received brownfields agreements with NC Department of Environment and Natural Resources, and have completed improvements by January 1, 2013, can file for the exclusion only during the listing period, January 1 - 31, 2013.

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