S T A T E O F N E W Y O R K
________________________________________________________________________
2762--B
Cal. No. 1066
2013-2014 Regular Sessions
I N S E N A T E
January 23, 2013
___________
Introduced by Sens. RANZENHOFER, FELDER, LANZA, LARKIN, LATIMER, VALESKY
-- read twice and ordered printed, and when printed to be committed to
the Committee on Investigations and Government Operations -- recommit-
ted to the Committee on Investigations and Government Operations in
accordance with Senate Rule 6, sec. 8 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee -- reported favorably from said committee and committed to the
Committee on Finance -- reported favorably from said committee,
ordered to first and second report, amended on second report, ordered
to a third reading, and to be reprinted as amended, retaining its
place in the order of third reading
AN ACT to amend the tax law, in relation to establishing a credit
against income tax for the rehabilitation of distressed commercial
properties
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Section 606 of the tax law is amended by adding a new
2 subsection (ccc) to read as follows:
3 (CCC) CREDIT FOR REHABILITATION OF DISTRESSED COMMERCIAL PROPERTIES.
4 (1) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
5 FOURTEEN, A TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED,
6 AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT EQUAL TO THIRTY
7 PERCENT OF THE QUALIFIED REHABILITATION EXPENDITURES MADE BY THE TAXPAY-
8 ER WITH RESPECT TO A QUALIFIED DISTRESSED COMMERCIAL PROPERTY. PROVIDED,
9 HOWEVER, THE CREDIT SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS.
10 (2) TAX CREDITS ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE ALLOWED
11 IN THE TAXABLE YEAR IN WHICH THE PROPERTY IS DEEMED A CERTIFIED REHABIL-
12 ITATION.
13 (3) IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBSECTION FOR
14 ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE
15 EXCESS MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS, AND MAY BE
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05241-06-4
S. 2762--B 2
1 APPLIED AGAINST THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS, BUT SHALL NOT
2 EXCEED TWENTY-FIVE THOUSAND DOLLARS.
3 (4) (A) THE TERM "QUALIFIED REHABILITATION EXPENDITURE" MEANS, FOR
4 PURPOSES OF THIS SUBSECTION, ANY AMOUNT PROPERLY CHARGEABLE TO A CAPITAL
5 ACCOUNT:
6 (I) IN CONNECTION WITH THE CERTIFIED REHABILITATION OF A QUALIFIED
7 DISTRESSED COMMERCIAL PROPERTY, AND
8 (II) FOR PROPERTY FOR WHICH DEPRECIATION WOULD BE ALLOWABLE UNDER
9 SECTION 168 OF THE INTERNAL REVENUE CODE.
10 (B) SUCH TERM SHALL NOT INCLUDE (I) THE COST OF ACQUIRING ANY BUILDING
11 OR INTEREST THEREIN, (II) ANY EXPENDITURE ATTRIBUTABLE TO THE ENLARGE-
12 MENT OF AN EXISTING BUILDING, OR (III) ANY EXPENDITURE MADE PRIOR TO
13 JANUARY FIRST, TWO THOUSAND FOURTEEN OR AFTER DECEMBER THIRTY-FIRST, TWO
14 THOUSAND NINETEEN.
15 (5) THE TERM "CERTIFIED REHABILITATION" MEANS, FOR PURPOSES OF THIS
16 SUBSECTION, ANY REHABILITATION OF A CERTIFIED DISTRESSED COMMERCIAL
17 PROPERTY WHICH HAS BEEN APPROVED AND CERTIFIED BY A LOCAL GOVERNMENT AS
18 BEING COMPLETED, WITH A CERTIFICATE OF OCCUPANCY ISSUED, AND THAT THE
19 COSTS ARE CONSISTENT WITH THE WORK COMPLETED. SUCH CERTIFICATION SHALL
20 BE ACCEPTABLE AS PROOF THAT THE EXPENDITURES RELATED TO SUCH REHABILI-
21 TATION QUALIFY AS QUALIFIED REHABILITATION EXPENDITURES FOR PURPOSES OF
22 THE CREDIT ALLOWED UNDER PARAGRAPH ONE OF THIS SUBSECTION.
23 (6) (A) THE TERM "QUALIFIED DISTRESSED COMMERCIAL PROPERTY" MEANS, FOR
24 PURPOSES OF THIS SUBSECTION, A DISTRESSED COMMERCIAL PROPERTY LOCATED
25 WITHIN NEW YORK STATE:
26 (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED,
27 (II) WHICH IS OWNED BY THE TAXPAYER, AND
28 (III) WHICH IS LOCATED WITHIN A DISTRESSED COMMERCIAL AREA, AS IDENTI-
29 FIED BY EACH LOCALITY THROUGH LOCAL LAW, THAT IS DEEMED AN AREA IN NEED
30 OF COMMUNITY RENEWAL DUE TO DILAPIDATION AND VACANCIES.
31 (B) IF THE DISTRESSED COMMERCIAL PROPERTY IS RENTAL PROPERTY, SUCH
32 PROPERTY SHALL HAVE BEEN MORE THAN THIRTY PERCENT VACANT FOR TWELVE
33 MONTHS WHILE ACTIVELY MARKETED FOR LEASE.
34 (C) A BUILDING SHALL BE TREATED AS HAVING BEEN "SUBSTANTIALLY REHABIL-
35 ITATED" IF THE QUALIFIED REHABILITATION EXPENDITURES IN RELATION TO SUCH
36 BUILDING TOTAL TEN THOUSAND DOLLARS OR MORE.
37 (7) (A) IF THE TAXPAYER DISPOSES OF SUCH TAXPAYER'S INTEREST IN THE
38 QUALIFIED DISTRESSED COMMERCIAL PROPERTY, OR SUCH PROPERTY CEASES TO BE
39 USED AS A COMMERCIAL PROPERTY OF THE TAXPAYER WITHIN FIVE YEARS OF
40 RECEIVING THE CREDIT UNDER THIS SUBSECTION, THE TAXPAYER'S TAX IMPOSED
41 BY THIS ARTICLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR CESSA-
42 TION OCCURS SHALL BE INCREASED BY THE RECAPTURE PORTION OF THE CREDIT
43 ALLOWED UNDER THIS SUBSECTION FOR ALL PRIOR TAXABLE YEARS WITH RESPECT
44 TO SUCH REHABILITATION.
45 (B) FOR PURPOSES OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE RECAPTURE
46 PORTION SHALL BE THE PRODUCT OF THE AMOUNT OF CREDIT CLAIMED BY THE
47 TAXPAYER MULTIPLIED BY A RATIO, THE NUMERATOR OF WHICH IS EQUAL TO SIXTY
48 LESS THE NUMBER OF MONTHS THE BUILDING IS OWNED OR USED AS COMMERCIAL
49 PROPERTY BY THE TAXPAYER AND THE DENOMINATOR OF WHICH IS SIXTY.
50 (8) ANY EXPENDITURE FOR WHICH A CREDIT IS CLAIMED UNDER THIS
51 SUBSECTION SHALL NOT BE ELIGIBLE FOR ANY OTHER CREDIT UNDER THIS CHAP-
52 TER.
53 S 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
54 of the tax law is amended by adding a new clause (xli) to read as
55 follows:
S. 2762--B 3
1 (XLI) CREDIT FOR REHABILITATION AMOUNT OF CREDIT UNDER
2 OF DISTRESSED COMMERCIAL PROPERTIES SUBDIVISION FIFTY
3 UNDER SUBSECTION (CCC) OF SECTION TWO HUNDRED TEN
4 S 3. Section 210 of the tax law is amended by adding a new subdivision
5 50 to read as follows:
6 50. CREDIT FOR REHABILITATION OF DISTRESSED COMMERCIAL PROPERTIES. (1)
7 FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
8 FOURTEEN, A TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED,
9 AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT EQUAL TO THIRTY
10 PERCENT OF THE QUALIFIED REHABILITATION EXPENDITURES MADE BY THE TAXPAY-
11 ER WITH RESPECT TO A QUALIFIED DISTRESSED COMMERCIAL PROPERTY. PROVIDED,
12 HOWEVER, THE CREDIT SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS.
13 (2) TAX CREDITS ALLOWED PURSUANT TO THIS SUBDIVISION SHALL BE ALLOWED
14 IN THE TAXABLE YEAR IN WHICH THE PROPERTY IS DEEMED A CERTIFIED REHABIL-
15 ITATION.
16 (3) IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR
17 ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE
18 EXCESS MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS, AND MAY BE
19 APPLIED AGAINST THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS, BUT SHALL NOT
20 EXCEED TWENTY-FIVE THOUSAND DOLLARS.
21 (4) (A) THE TERM "QUALIFIED REHABILITATION EXPENDITURE" MEANS, FOR
22 PURPOSES OF THIS SUBDIVISION, ANY AMOUNT PROPERLY CHARGEABLE TO A CAPI-
23 TAL ACCOUNT:
24 (I) IN CONNECTION WITH THE CERTIFIED REHABILITATION OF A QUALIFIED
25 COMMERCIAL PROPERTY, AND
26 (II) FOR PROPERTY FOR WHICH DEPRECIATION WOULD BE ALLOWABLE UNDER
27 SECTION 168 OF THE INTERNAL REVENUE CODE.
28 (B) SUCH TERM SHALL NOT INCLUDE (I) THE COST OF ACQUIRING ANY BUILDING
29 OR INTEREST THEREIN, (II) ANY EXPENDITURE ATTRIBUTABLE TO THE ENLARGE-
30 MENT OF AN EXISTING BUILDING, OR (III) ANY EXPENDITURE MADE PRIOR TO
31 JANUARY FIRST, TWO THOUSAND FOURTEEN OR AFTER DECEMBER THIRTY-FIRST, TWO
32 THOUSAND NINETEEN.
33 (5) THE TERM "CERTIFIED REHABILITATION" MEANS, FOR PURPOSES OF THIS
34 SUBDIVISION, ANY REHABILITATION OF A CERTIFIED DISTRESSED COMMERCIAL
35 PROPERTY WHICH HAS BEEN APPROVED AND CERTIFIED BY A LOCAL GOVERNMENT AS
36 BEING COMPLETED, WITH A CERTIFICATE OF OCCUPANCY ISSUED, AND THAT THE
37 COSTS ARE CONSISTENT WITH THE WORK COMPLETED. SUCH CERTIFICATION SHALL
38 BE ACCEPTABLE AS PROOF THAT THE EXPENDITURES RELATED TO SUCH REHABILI-
39 TATION QUALIFY AS QUALIFIED REHABILITATION EXPENDITURES FOR PURPOSES OF
40 THE CREDIT ALLOWED UNDER PARAGRAPH ONE OF THIS SUBDIVISION.
41 (6) (A) THE TERM "QUALIFIED DISTRESSED COMMERCIAL PROPERTY" MEANS, FOR
42 PURPOSES OF THIS SUBDIVISION, A DISTRESSED COMMERCIAL PROPERTY LOCATED
43 WITHIN NEW YORK STATE:
44 (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED,
45 (II) WHICH IS OWNED BY THE TAXPAYER, AND
46 (III) WHICH IS LOCATED WITHIN A DISTRESSED COMMERCIAL AREA, AS IDENTI-
47 FIED BY EACH LOCALITY THROUGH LOCAL LAW, THAT IS DEEMED AN AREA IN NEED
48 OF COMMUNITY RENEWAL DUE TO DILAPIDATION AND VACANCIES.
49 (B) IF THE DISTRESSED COMMERCIAL PROPERTY IS RENTAL PROPERTY, SUCH
50 PROPERTY SHALL HAVE BEEN MORE THAN THIRTY PERCENT VACANT FOR TWELVE
51 MONTHS WHILE ACTIVELY MARKETED FOR LEASE.
52 (C) A BUILDING SHALL BE TREATED AS HAVING BEEN "SUBSTANTIALLY REHABIL-
53 ITATED" IF THE QUALIFIED REHABILITATION EXPENDITURES IN RELATION TO SUCH
54 BUILDING TOTAL TEN THOUSAND DOLLARS OR MORE.
55 (7) (A) IF THE TAXPAYER DISPOSES OF SUCH TAXPAYER'S INTEREST IN THE
56 QUALIFIED DISTRESSED COMMERCIAL PROPERTY, OR SUCH PROPERTY CEASES TO BE
S. 2762--B 4
1 USED AS A COMMERCIAL PROPERTY OF THE TAXPAYER WITHIN FIVE YEARS OF
2 RECEIVING THE CREDIT UNDER THIS SUBDIVISION, THE TAXPAYER'S TAX IMPOSED
3 BY THIS ARTICLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR CESSA-
4 TION OCCURS SHALL BE INCREASED BY THE RECAPTURE PORTION OF THE CREDIT
5 ALLOWED UNDER THIS SUBDIVISION FOR ALL PRIOR TAXABLE YEARS WITH RESPECT
6 TO SUCH REHABILITATION.
7 (B) FOR PURPOSES OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE RECAPTURE
8 PORTION SHALL BE THE PRODUCT OF THE AMOUNT OF CREDIT CLAIMED BY THE
9 TAXPAYER MULTIPLIED BY A RATIO, THE NUMERATOR OF WHICH IS EQUAL TO SIXTY
10 LESS THE NUMBER OF MONTHS THE BUILDING IS OWNED OR USED AS COMMERCIAL
11 PROPERTY BY THE TAXPAYER AND THE DENOMINATOR OF WHICH IS SIXTY.
12 (8) ANY EXPENDITURE FOR WHICH A CREDIT IS CLAIMED UNDER THIS SUBDIVI-
13 SION SHALL NOT BE ELIGIBLE FOR ANY OTHER CREDIT UNDER THIS CHAPTER.
14 S 4. This act shall take effect immediately and shall apply to taxable
15 years beginning on or after January 1, 2014.