Bill Text: NY S07648 | 2017-2018 | General Assembly | Amended
Bill Title: Relates to removing dependence on federal law to receive the historic properties tax credit in New York state.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2018-06-07 - PRINT NUMBER 7648A [S07648 Detail]
Download: New_York-2017-S07648-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 7648--A IN SENATE February 2, 2018 ___________ Introduced by Sens. VALESKY, KENNEDY, O'MARA, YOUNG -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee AN ACT to amend the tax law and the parks, recreation and historic pres- ervation law, in relation to the tax credit for rehabilitation of historic properties The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subsection (oo) of section 606 of the tax law, as amended 2 by chapter 239 of the laws of 2009, paragraph 1 as amended by chapter 3 472 of the laws of 2010, subparagraph (A) of paragraph 1 and paragraphs 4 3 and 5 as amended by section 1 of part RR of chapter 59 of the laws of 5 2018, paragraph 4 as amended by section 1 of part F of chapter 59 of the 6 laws of 2013, is amended to read as follows: 7 (oo) Credit for rehabilitation of historic properties. (1) (A) For 8 taxable years beginning on or after January first, two thousand ten and 9 before January first, two thousand twenty-five, a taxpayer shall be 10 allowed a credit as hereinafter provided, against the tax imposed by 11 this article, in an amount equal to [one hundred percent of the amount12of credit allowed the taxpayer with respect to a certified historic13structure under internal revenue code section 47(c)(3), determined with-14out regard to ratably allocating the credit over a five year period as15required by subsection (a) of such section 47,] twenty percent of the 16 qualified rehabilitation expenditures with respect to a certified 17 historic structure located within the state. Provided, however, the 18 credit shall not exceed five million dollars. For taxable years begin- 19 ning on or after January first, two thousand twenty-five, a taxpayer 20 shall be allowed a credit as hereinafter provided, against the tax 21 imposed by this article, in an amount equal to thirty percent of [the22amount of credit allowed the taxpayer with respect to a certified23historic structure under internal revenue code section 47(c)(3), deter-24mined without regard to ratably allocating the credit over a five yearEXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD14636-03-8S. 7648--A 2 1period as required by subsection (a) of such section 47,] qualified 2 rehabilitation expenditures with respect to a certified historic struc- 3 ture located within the state; provided, however, the credit shall not 4 exceed one hundred thousand dollars. For purposes of this subsection the 5 term "qualified rehabilitation expenditure" means any amount properly 6 chargeable to capital account in connection with the certified rehabili- 7 tation of a qualified historic structure, and for property for which 8 depreciation would be allowable under section 168 of the internal reven- 9 ue code and which is (i) nonresidential real property, (ii) residential 10 rental property, or (iii) an addition or improvement to nonresidential 11 real property or residential rental property. 12 (B) If the taxpayer is a partner in a partnership or a shareholder of 13 a New York S corporation, then the credit cap imposed in subparagraph 14 (A) of this paragraph shall be applied at the entity level, so that the 15 aggregate credit allowed to all the partners or shareholders of each 16 such entity in the taxable year does not exceed the credit cap that is 17 applicable in that taxable year. 18 (2) (A) Tax credits allowed pursuant to this subsection shall be 19 allowed in the taxable year [that the qualified rehabilitation is placed20in service under section 167 of the federal internal revenue code] in 21 which the final certification step of the certified rehabilitation is 22 completed as provided in subparagraph (C) of this paragraph. 23 (B) For purposes of this subsection the term "certified rehabili- 24 tation" means any rehabilitation of a certified historic structure which 25 has been approved and certified as being consistent with the standards 26 established by the commissioner of parks, recreation and historic pres- 27 ervation for rehabilitation by the office of parks, recreation and 28 historic preservation, a local government certified pursuant to section 29 101(c)(1) of the national historic preservation act or a local landmark 30 commission established pursuant to section ninety-six-a, as added by 31 chapter five hundred thirteen of the laws of nineteen hundred sixty- 32 eight, or one hundred nineteen-dd of the general municipal law. 33 (C) A certified rehabilitation shall require: 34 (i) an initial certification that the structure meets the definition 35 of the term "certified historic structure"; 36 (ii) a second certification, to be issued prior to construction, 37 certifying that the proposed rehabilitation work is consistent with 38 standards established by the commissioner of parks, recreation and 39 historic preservation for rehabilitation; and 40 (iii) a final certification issued when construction is completed, 41 certifying that the work was completed as proposed and that the costs 42 are consistent with the work completed. Such final certification shall 43 be acceptable as proof that the expenditures related to such 44 construction qualify as qualified rehabilitation expenditures for 45 purposes of the credit allowed under either subparagraph (A) or (B) of 46 paragraph one of this subsection. 47 (D) For purposes of this subsection the term "qualified historic 48 structure" means a certified historic structure located within New York 49 state which has been substantially rehabilitated. A certified historic 50 structure shall be considered substantially rehabilitated if the quali- 51 fied rehabilitation expenditures in relation to such structure total 52 five thousand dollars or more. 53 (E) For purposes of this subsection the term "certified historic 54 structure" means any building and its structural components which: 55 (i) is listed in the state or national register of historic places, orS. 7648--A 3 1 (ii) is located in a state or national registered historic district 2 and is certified as being of historic significance in the district. 3 (3) [If the taxpayer is allowed a credit pursuant to section 47 of the4internal revenue code with respect to a qualified rehabilitation that is5also the subject of the credit allowed by this subsection and that cred-6it pursuant to such section 47 is recaptured pursuant to subsection (a)7of section 50 of the internal revenue code, a portion of the credit8allowed under this subsection must be added back in the same taxable9year and in the same proportion as the federal recapture.] (A) If, 10 before the end of the two-year period beginning on the date of the final 11 certification referred to in subparagraph (C) of paragraph two of this 12 subsection, the taxpayer disposes of such taxpayer's interest in a 13 certified historic structure, or such certified historic structure 14 otherwise ceases to be eligible for the credit allowed under this 15 subsection, the taxpayer's tax imposed by this article for the taxable 16 year in which such disposition occurs shall be increased by the recap- 17 ture portion of the credit allowed under this subsection for all prior 18 taxable years with respect to such rehabilitation. 19 (B) For purposes of subparagraph (A) of this paragraph, the recapture 20 portion shall be the product of the amount of credit claimed by the 21 taxpayer or transferee multiplied by a fraction, the numerator of which 22 is equal to twenty-four less the number of months before the disposition 23 or cessation of the structure occurred. Only the taxpayer that initially 24 received the credit, and no subsequent good faith transferee, shall be 25 responsible in the event of a recapture, reduction, disallowance, or 26 other failure related to such credit. 27 (4) If the amount of the credit allowed under this subsection for any 28 taxable year shall exceed the taxpayer's tax for such year, the excess 29 shall be treated as an overpayment of tax to be credited or refunded in 30 accordance with the provisions of section six hundred eighty-six of this 31 article, provided, however, that no interest shall be paid thereon. 32 (5) To be eligible for the credit allowable under this subsection the 33 rehabilitation project shall be in whole or in part located within a 34 census tract which is identified as being at or below one hundred 35 percent of the state median family income as calculated as of April 36 first of each year using the most recent five year estimate from the 37 American community survey published by the United States Census bureau. 38 If there is a change in the most recent five year estimate, a census 39 tract that qualified for eligibility under this [program] subsection 40 before information about the change was released [will] shall remain 41 eligible for a credit under this subsection for an additional [two42calendar years] eighteen months. 43 (6) Nothing contained in this subsection shall be construed to impose 44 a duty on a local landmark commission established pursuant to section 45 ninety-six-a, as added by chapter five hundred thirteen of the laws of 46 nineteen hundred sixty-eight, or one hundred nineteen-dd of the general 47 municipal law or a local government certified pursuant to section 48 101(c)(1) of the national historic preservation act to undertake any 49 review or approval of an application for the certification of the reha- 50 bilitation of historic structures and of rehabilitation expenditures 51 provided for in this subsection. 52 (7)(A)(i) Any taxpayer, eligible for the credit allowed pursuant to 53 this subsection may transfer such credit, in whole or in part, to any 54 individual or entity, without the requirement of transferring any owner- 55 ship interest in the certified historic structure or any interest in the 56 entity which owns the certified historic structure. Transferees areS. 7648--A 4 1 entitled to apply the credits against the tax with the same effect as if 2 the transferee had incurred the qualified rehabilitation expenditures. 3 Such credit may be transferred only on or after the final certification 4 step of the certified rehabilitation is completed as provided in subpar- 5 agraph (C) of paragraph two of this subsection. 6 (ii) A transferee shall use such credit in the year it is transferred. 7 A transferee may subsequently transfer such credit, however, in no case, 8 may a credit be transferred more than one time after the initial trans- 9 fer. A secondary transferee shall use such credit in the year it is 10 transferred to the secondary transferee. If the credit allowable for any 11 tax year exceeds the transferee's tax liability for that year, the 12 transferee may carry forward and apply in a subsequent taxable year, the 13 portion, as reduced from year to year, of the credit which exceeds such 14 tax for the taxable year; provided, however, that the carryover period 15 cannot exceed five taxable years after the close of the taxable year in 16 which the final certification step of the certified rehabilitation is 17 completed as provided in subparagraph (C) of paragraph two of this 18 subsection. 19 (iii) The provisions of paragraph three of this subsection relating to 20 the recapture of the credit allowed pursuant to this subsection shall 21 not apply to the transfer of such credit as provided for in this para- 22 graph. 23 (B) The commissioner of parks, recreation and historic preservation, 24 in consultation with the department, shall promulgate a form of transfer 25 statement to be filed by the transferor of the credit allowed pursuant 26 to this subsection. The transfer statement shall be in addition to the 27 transfer contract provided in subparagraph (C) of this paragraph. Trans- 28 fer statement forms may be obtained from the commissioner. The transfe- 29 ror shall file a transfer statement and a copy of the proposed transfer 30 contract with the department prior to the transfer and shall further 31 file with the department the executed transfer contract within thirty 32 days after the completed transfer. The transfer statement shall provide 33 the name and federal taxpayer identification number of each transferor 34 and transferee. Further, such statement shall indicate the amount of the 35 credit transferred to each transferee. The statement shall also contain 36 such other information as the department or the commission may from time 37 to time require. 38 (C) Any taxpayer transferring his or her credit allowed pursuant to 39 this subsection shall enter into a transfer contract with the transfer- 40 ee. The transfer contract shall specify the following: 41 (i) a description and address for the certified historic structure or 42 structures which qualified the taxpayer for such credit; 43 (ii) the date in which the final certification step of the certified 44 rehabilitation is completed as provided in subparagraph (C) of paragraph 45 two of this subsection; 46 (iii) the schedule of years during which the credit may be taken and 47 the amount of credit previously taken for the certified historic struc- 48 ture including all previous transferees; and 49 (iv) the amount of credit being transferred. 50 (D) Any taxpayer who is a transferee of the credit allowed pursuant to 51 this subsection may, provided all transfer and other requirements or 52 limitations are met, apply such credit to the tax imposed under this 53 article. 54 § 2. Subdivision 26 of section 210-B of the tax law, as added by 55 section 17 of part A of chapter 59 of the laws of 2014, paragraphs (a),S. 7648--A 5 1 (c) and (e) as amended by section 2 of part RR of chapter 59 of the laws 2 of 2018, is amended to read as follows: 3 26. Credit for rehabilitation of historic properties. (a) Application 4 of credit. (i) For taxable years beginning on or after January first, 5 two thousand ten, and before January first, two thousand twenty-five, a 6 taxpayer shall be allowed a credit as hereinafter provided, against the 7 tax imposed by this article, in an amount equal to [one hundred percent8of the amount of credit allowed the taxpayer for the same taxable year9with respect to a certified historic structure under internal revenue10code section 47(c)(3), determined without regard to ratably allocating11the credit over a five year period as required by subsection (a) of such12section 47,] twenty percent of the qualified rehabilitation expenditures 13 with respect to a certified historic structure located within the state. 14 Provided, however, the credit shall not exceed five million dollars. 15 (ii) For taxable years beginning on or after January first, two thou- 16 sand twenty-five, a taxpayer shall be allowed a credit as hereinafter 17 provided, against the tax imposed by this article, in an amount equal to 18 thirty percent of the [amount of credit allowed the taxpayer for the19same taxable year determined without regard to ratably allocating the20credit over a five year period as required by subsection (a) of section2147 of the internal revenue code,] qualified rehabilitation expenditures 22 with respect to a certified historic structure under subsection (c)(3) 23 of section 47 of the internal revenue code with respect to a certified 24 historic structure located within the state. Provided, however, the 25 credit shall not exceed one hundred thousand dollars. 26 [(B)] (b) If the taxpayer is a partner in a partnership or a share- 27 holder in a New York S corporation, then the credit caps imposed in 28 [subparagraph (A)] paragraph (a) of this [paragraph] subdivision shall 29 be applied at the entity level, so that the aggregate credit allowed to 30 all the partners or shareholders of each such entity in the taxable year 31 does not exceed the credit cap that is applicable in that taxable year. 32 [(b)] (c) Tax credits allowed pursuant to this subdivision shall be 33 allowed in the taxable year [that the qualified rehabilitation is placed34in service under section 167 of the federal internal revenue code] in 35 which the final certification step of the certified rehabilitation is 36 completed pursuant to subparagraph (C) of paragraph two of subsection 37 (oo) of section six hundred six of this chapter. 38 [(c) If the taxpayer is allowed a credit pursuant to section 47 of the39internal revenue code with respect to a qualified rehabilitation that is40also the subject of the credit allowed by this subdivision and that41credit pursuant to such section 47 is recaptured pursuant to subsection42(a) of section 50 of the internal revenue code, a portion of the credit43allowed under this subdivision must be added back in the same taxable44year and in the same proportion as the federal credit] (d)(i) If, before 45 the end of the two-year period beginning on the date of the final 46 certification referred to in paragraph (b) of this subdivision, the 47 taxpayer disposes of such taxpayer's interest in a certified structure, 48 or such certified historic structure otherwise ceases to be eligible for 49 the credit allowed under this subdivision, the taxpayer's tax imposed by 50 this article for the taxable year in which such disposition occurs shall 51 be increased by the recapture portion of the credit allowed under this 52 paragraph for all prior taxable years with respect to such rehabili- 53 tation. 54 (ii) For purposes of subparagraph (i) of this paragraph, the recapture 55 portion shall be the product of the amount of credit claimed by the 56 taxpayer multiplied by a fraction, the numerator of which is equal toS. 7648--A 6 1 twenty-four less the number of months before the disposition or cessa- 2 tion of the structure occurred. 3 [(d)] (e) The credit allowed under this subdivision for any taxable 4 year shall not reduce the tax due for such year to less than the amount 5 prescribed in paragraph (d) of subdivision one of section two hundred 6 ten of this article. However, if the amount of the credit allowed under 7 this subdivision for any taxable year reduces the tax to such amount or 8 if the taxpayer otherwise pays tax based on the fixed dollar minimum 9 amount, any amount of credit thus not deductible in such taxable year 10 shall be treated as an overpayment of tax to be recredited or refunded 11 in accordance with the provisions of section one thousand eighty-six of 12 this chapter. Provided, however, the provisions of subsection (c) of 13 section one thousand eighty-eight of this chapter notwithstanding, no 14 interest shall be paid thereon. 15 [(e)] (f) To be eligible for the credit allowable under this subdivi- 16 sion, the rehabilitation project shall be in whole or in part located 17 within a census tract which is identified as being at or below one 18 hundred percent of the state median family income as calculated as of 19 April first of each year using the most recent five year estimate from 20 the American community survey published by the United States Census 21 bureau. If there is a change in the most recent five year estimate, a 22 census tract that qualified for eligibility under this program before 23 information about the change was released will remain eligible for a 24 credit under this subdivision for an additional two calendar years. 25 § 3. Paragraphs 1, 2 and 3 of subdivision (y) of section 1511 of the 26 tax law, as added by chapter 472 of the laws of 2010, subparagraph (A) 27 of paragraph 1 and paragraph 3 as amended by section 3 of part RR of 28 chapter 59 of the laws of 2018, are amended to read as follows: 29 (1) (A) For taxable years beginning on or after January first, two 30 thousand ten and before January first, two thousand twenty-five, a 31 taxpayer shall be allowed a credit as hereinafter provided, against the 32 tax imposed by this article, in an amount equal to [one hundred percent33of the amount of credit allowed the taxpayer with respect to a certified34historic structure under internal revenue code section 47(c)(3), deter-35mined without regard to ratably allocating the credit over a five year36period as required by subsection (a) of such section 47,] twenty percent 37 of the qualified rehabilitation expenditures with respect to a certified 38 historic structure located within the state. Provided, however, the 39 credit shall not exceed five million dollars. For taxable years begin- 40 ning on or after January first, two thousand twenty-five, a taxpayer 41 shall be allowed a credit as hereinafter provided, against the tax 42 imposed by this article, in an amount equal to thirty percent of the 43 [amount of credit allowed the taxpayer with respect to a certified44historic structure under internal revenue code section 47(c)(3), deter-45mined without regard to ratably allocating the credit over a five year46period as required by subsection (a) of such section 47] qualified reha- 47 bilitation expenditure with respect to a certified historic structure 48 located within the state. Provided, however, the credit shall not 49 exceed one hundred thousand dollars. 50 (B) If the taxpayer is a partner in a partnership, then the cap 51 imposed in subparagraph (A) of this paragraph shall be applied at the 52 entity level, so that the aggregate credit allowed to all the partners 53 of such partnership in the taxable year does not exceed the credit cap 54 that is applicable in that taxable year. 55 (2) Tax credits allowed pursuant to this subsection shall be allowed 56 in the taxable year [that the qualified rehabilitation is placed inS. 7648--A 7 1service under section 167 of the federal internal revenue code] in which 2 the final certification step of the certified rehabilitation is 3 completed pursuant to subparagraph (C) of paragraph two of subsection 4 (oo) of section six hundred six of this chapter. 5 (3) [If the taxpayer is allowed a credit pursuant to section 47 of the6internal revenue code with respect to a qualified rehabilitation that is7also the subject of the credit allowed by this subdivision and that8credit pursuant to such section 47 is recaptured pursuant to subsection9(a) of section 50 of the internal revenue code, a portion of the credit10allowed under this subdivision in the taxable year the credit was11claimed must be added back in the same taxable year and in the same12proportion as the federal recapture.] (A) If, before the end of the 13 two-year period beginning on the date of the final certification 14 referred to in paragraph two of this subdivision, the taxpayer disposes 15 of such taxpayer's interest in a certified structure, or such certified 16 historic structure otherwise ceases to be eligible for the credit 17 allowed under this subdivision, the taxpayer's tax imposed by this arti- 18 cle for the taxable year in which such disposition occurs shall be 19 increased by the recapture portion of the credit allowed under this 20 paragraph for all prior taxable years with respect to such rehabili- 21 tation. 22 (B) For purposes of subparagraph (A) of this paragraph, the recapture 23 portion shall be the product of the amount of credit claimed by the 24 taxpayer multiplied by a fraction, the numerator of which is equal to 25 twenty-four less the number of months before the disposition or cessa- 26 tion of the structure occurred. 27 § 4. Subdivision 6 of section 13.15 of the parks, recreation and 28 historic preservation law, as added by chapter 547 of the laws of 2006, 29 is amended to read as follows: 30 6. The office may establish a fee or fees for its processing and 31 review of applications for the certification of the rehabilitation of 32 historic buildings and the approval of rehabilitation expenditures and 33 related work pursuant to [subsection] subsections (oo) and (pp) of 34 section six hundred six of the tax law. All revenues from these fees 35 shall be deposited by the comptroller in the miscellaneous special 36 revenue fund to be credited to the agency's patron services account and 37 shall be used to support the office's historic preservation program. 38 Nothing in this subdivision shall be construed to limit the ability of a 39 local landmark commission established pursuant to section ninety-six-a, 40 as added by chapter five hundred thirteen of the laws of nineteen 41 hundred sixty-eight, or one hundred nineteen-dd of the general municipal 42 law or a local government certified pursuant to section 101(c)(1) of the 43 national historic preservation act to establish and charge fees for its 44 processing and review of applications for the certification of the reha- 45 bilitation of historic buildings and the approval of rehabilitation 46 expenditures. 47 § 5. This act shall take effect immediately and shall apply to taxable 48 years beginning on and after January 1, 2018.