senate Bill S2739A

Amended

Establishes a credit against income tax for the rehabilitation of distressed residential properties

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 23 / Jan / 2013
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 21 / May / 2013
    • REPORTED AND COMMITTED TO FINANCE
  • 08 / Jan / 2014
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 22 / Jan / 2014
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 22 / Jan / 2014
    • PRINT NUMBER 2739A
  • 28 / May / 2014
    • REPORTED AND COMMITTED TO FINANCE
  • 04 / Jun / 2014
    • AMEND AND RECOMMIT TO FINANCE
  • 04 / Jun / 2014
    • PRINT NUMBER 2739B
  • 11 / Jun / 2014
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 11 / Jun / 2014
    • ORDERED TO THIRD READING CAL.1317
  • 12 / Jun / 2014
    • PASSED SENATE
  • 12 / Jun / 2014
    • DELIVERED TO ASSEMBLY
  • 12 / Jun / 2014
    • REFERRED TO WAYS AND MEANS

Summary

Establishes a credit against income tax for the rehabilitation of distressed residential properties; allows a credit equal to thirty percent of the qualified rehabilitation expenditures made by the taxpayer with respect to a qualified distressed residential property; requires property that qualifies must be constructed prior to January 1, 1962 in a distressed residential or mixed-use neighborhood.

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Bill Details

See Assembly Version of this Bill:
A4163A
Versions:
S2739
S2739A
S2739B
Legislative Cycle:
2013-2014
Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd ยงยง606 & 210, Tax L
Versions Introduced in 2011-2012 Legislative Cycle:
S6979, A9993

Votes

8
0
8
Aye
0
Nay
1
aye with reservations
0
absent
0
excused
0
abstained
show Investigations and Government Operations committee vote details

Sponsor Memo

BILL NUMBER:S2739A

TITLE OF BILL: An act to amend the tax law, in relation to
establishing a credit against income tax for the rehabilitation of
distressed residential properties

SUMMARY OF PROVISIONS:

This bill would create a new tax credit program to encourage the
rehabilitation of distressed residential property.

Section 1 - amends section 606 of the Tax Law by adding a new
subsection (xx) which creates a tax credit for the rehabilitation of
distressed residential property.

(1) For taxable years beginning after January 1, 2014, taxpayers shall
be allowed a credit equal to thirty percent of the qualified
expenditures made by the taxpayer with respect to a qualified
distressed residential property.

(2) The credit shall not exceed $100,000. Credits are allowed in the
taxable year in which the property is deemed a certified
rehabilitation.

(3) Credits may be carried forward, but not more than $25,000 in any
year.

(4) Defines qualified rehabilitation expenditure. Expenditures must be
made after January 1, 2014 and before December 31, 2019.

(5) Defines certified rehabilitation.

(6) Defines qualified distressed residential property.

(7) Provides for recapture of tax credits in the event the
rehabilitated distressed residential property is disposed of within
five years after receiving the credit.

Section 2 - amends subparagraph (B) of paragraph 1 of subsection (i)
of section 606 by adding a new clause (xxxvii) enumerating the new
credit for rehabilitation of distressed residential property.

Section 3 - amends section 210 of the Tax law to add a new subdivision
45.

(1) For taxable years beginning after January 1, 2014, taxpayers shall
be allowed a credit equal to thirty percent of the qualified
expenditures made by the taxpayer with respect to a qualified
distressed residential property.

(2) The credit shall not exceed $100,000. Credits are allowed in the
taxable year in which the property is deemed a certified
rehabilitation.

(3) Credits may be carried forward, but not more than $25,000 in any
year.


(4) Defines qualified rehabilitation expenditure. Expenditures must be
made after January 1, 2014 and before December 31, 2019.

(5) Defines certified rehabilitation.

(6) Defines qualified distressed commercial property.

(7) Provides for recapture of tax credits in the event the
rehabilitated distressed residential property is disposed of within
five years after receiving the credit.

Section 4 - provides that this act shall take effect immediately and
shall apply to taxable years on or after January 1, 2014.

PURPOSE AND JUSTIFICATION:

In many communities across New York State, whether towns, villages,
suburbs or cities, there are areas of rundown and dilapidated
residential buildings. These residential buildings may have not have
received any significant updating for years, and they are now vacant
or underperforming properties that give their whole neighborhoods a
rundown appearance and at best are not attractive places to live.
Rehabilitating these properties will benefit communities, make these
areas economically attractive for new and existing residents and help
to revive the economy of our state. Under this legislation, it will
be up to local communities to identify, by local law, areas that are
dilapidated and in need of rehabilitation, and to confirm that
rehabilitation work is completed to the satisfaction of their building
departments and certificates of occupancy were issued for the work
done. Residents and communities, as well as the state as a whole, will
be rewarded with rejuvenated neighborhoods.

EXISTING LAW:

Various tax credits are offered to encourage activities that will
benefit the state.

PRIOR LEGISLATIVE HISTORY:

2012 - S.6979/A.9993 - INVESTIGATIONS/ Ways & Means 2013 -
S.2739/A.4163 - FINANCE/Ways & Means

FISCAL IMPLICATIONS:

To be determined.

EFFECTIVE DATE:

This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2014.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 2739--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 23, 2013
                               ___________

Introduced by Sens. RANZENHOFER, LANZA, LARKIN, LATIMER, VALESKY -- read
  twice  and  ordered  printed,  and when printed to be committed to the
  Committee on Investigations and Government Operations  --  recommitted
  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

AN ACT to amend the tax  law,  in  relation  to  establishing  a  credit
  against  income  tax  for the rehabilitation of distressed residential
  properties

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subsections (yy) and (zz) of section 606 of the tax law, as
relettered  by section 5 of part H of chapter 1 of the laws of 2003, are
relettered subsections (yyy) and (zzz) and  a  new  subsection  (xx)  is
added to read as follows:
  (XX)  CREDIT  FOR REHABILITATION OF DISTRESSED RESIDENTIAL PROPERTIES.
(1) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND
FOURTEEN,  A TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED,
AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT  EQUAL  TO  THIRTY
PERCENT OF THE QUALIFIED REHABILITATION EXPENDITURES MADE BY THE TAXPAY-
ER   WITH  RESPECT  TO  A  QUALIFIED  DISTRESSED  RESIDENTIAL  PROPERTY.
PROVIDED, HOWEVER, THE CREDIT SHALL  NOT  EXCEED  ONE  HUNDRED  THOUSAND
DOLLARS.
  (2)  TAX  CREDITS ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE ALLOWED
IN THE TAXABLE YEAR IN WHICH THE PROPERTY IS DEEMED A CERTIFIED REHABIL-
ITATION.
  (3) IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER  THIS  SUBSECTION  FOR
ANY  TAXABLE  YEAR  SHALL  EXCEED  THE TAXPAYER'S TAX FOR SUCH YEAR, THE
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.
                                                           LBD05245-04-4

S. 2739--A                          2

APPLIED AGAINST THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS, BUT SHALL NOT
EXCEED TWENTY-FIVE THOUSAND DOLLARS.
  (4)  (A)  THE  TERM  "QUALIFIED REHABILITATION EXPENDITURE" MEANS, FOR
PURPOSES OF THIS SUBSECTION, ANY AMOUNT PROPERLY CHARGEABLE TO A CAPITAL
ACCOUNT:
  (I) IN CONNECTION WITH THE CERTIFIED  REHABILITATION  OF  A  QUALIFIED
DISTRESSED RESIDENTIAL PROPERTY, AND
  (II)  FOR  PROPERTY  FOR  WHICH  DEPRECIATION WOULD BE ALLOWABLE UNDER
SECTION 168 OF THE INTERNAL REVENUE CODE.
  (B) SUCH TERM SHALL NOT INCLUDE (I) THE COST OF ACQUIRING ANY BUILDING
OR INTEREST THEREIN, (II) ANY EXPENDITURE ATTRIBUTABLE TO  THE  ENLARGE-
MENT  OF  AN  EXISTING  BUILDING, OR (III) ANY EXPENDITURE MADE PRIOR TO
JANUARY FIRST, TWO THOUSAND FOURTEEN OR AFTER DECEMBER THIRTY-FIRST, TWO
THOUSAND NINETEEN.
  (5)  THE  TERM  "CERTIFIED  REHABILITATION"  MEANS,  FOR  PURPOSES  OF
DISTRESSED  RESIDENTIAL  PROPERTY IN THIS SUBSECTION, ANY REHABILITATION
OF A CERTIFIED DISTRESSED RESIDENTIAL PROPERTY WHICH HAS  BEEN  APPROVED
AND  CERTIFIED  BY A LOCAL GOVERNMENT AS BEING COMPLETED, WITH A CERTIF-
ICATE OF OCCUPANCY ISSUED, AND THAT THE COSTS ARE  CONSISTENT  WITH  THE
WORK COMPLETED. SUCH CERTIFICATION SHALL BE ACCEPTABLE AS PROOF THAT THE
EXPENDITURES  RELATED  TO SUCH REHABILITATION QUALIFY AS QUALIFIED REHA-
BILITATION EXPENDITURES FOR PURPOSES OF THE CREDIT ALLOWED  UNDER  PARA-
GRAPH ONE OF THIS SUBSECTION.
  (6)  (A) THE TERM "QUALIFIED RESIDENTIAL PROPERTY" MEANS, FOR PURPOSES
OF THIS SUBSECTION, A DISTRESSED RESIDENTIAL PROPERTY LOCATED WITHIN NEW
YORK STATE:
  (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED,
  (II) WHICH WAS CONSTRUCTED PRIOR TO JANUARY  FIRST,  NINETEEN  HUNDRED
SIXTY-TWO,
  (III) WHICH IS OWNED BY THE TAXPAYER, AND
  (IV)  WHICH  IS  LOCATED  WITHIN A DISTRESSED RESIDENTIAL OR MIXED-USE
AREA, AS IDENTIFIED BY EACH LOCALITY THROUGH LOCAL LAW, THAT  IS  DEEMED
AN AREA IN NEED OF COMMUNITY RENEWAL DUE TO DILAPIDATION AND VACANCIES.
  (B)  IF  THE  DISTRESSED RESIDENTIAL PROPERTY IS RENTAL PROPERTY, SUCH
PROPERTY SHALL HAVE BEEN VACANT FOR AT LEAST SIX MONTHS  WHILE  ACTIVELY
MARKETED FOR LEASE.
  (C) A BUILDING SHALL BE TREATED AS HAVING BEEN "SUBSTANTIALLY REHABIL-
ITATED" IF THE QUALIFIED REHABILITATION EXPENDITURES IN RELATION TO SUCH
BUILDING TOTAL TEN THOUSAND DOLLARS OR MORE.
  (7)  (A)  IF  THE TAXPAYER DISPOSES OF SUCH TAXPAYER'S INTEREST IN THE
QUALIFIED DISTRESSED RESIDENTIAL PROPERTY, OR SUCH PROPERTY CEASES TO BE
USED AS A RESIDENTIAL PROPERTY OF THE  TAXPAYER  WITHIN  FIVE  YEARS  OF
RECEIVING  THE  CREDIT UNDER THIS SUBSECTION, THE TAXPAYER'S TAX IMPOSED
BY THIS ARTICLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR CESSA-
TION OCCURS SHALL BE INCREASED BY THE RECAPTURE PORTION  OF  THE  CREDIT
ALLOWED  UNDER  THIS SUBSECTION FOR ALL PRIOR TAXABLE YEARS WITH RESPECT
TO SUCH REHABILITATION.
  (B) FOR PURPOSES OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE  RECAPTURE
PORTION  SHALL  BE  THE  PRODUCT  OF THE AMOUNT OF CREDIT CLAIMED BY THE
TAXPAYER MULTIPLIED BY A RATIO, THE NUMERATOR OF WHICH IS EQUAL TO SIXTY
LESS THE NUMBER OF MONTHS THE BUILDING IS OWNED OR USED  AS  RESIDENTIAL
PROPERTY BY THE TAXPAYER AND THE DENOMINATOR OF WHICH IS SIXTY.
  S  2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a new clause  (xxxvii)  to  read  as
follows:

S. 2739--A                          3

(XXXVII) CREDIT FOR REHABILITATION   AMOUNT OF CREDIT
OF DISTRESSED RESIDENTIAL            UNDER SUBDIVISION FORTY-EIGHT
PROPERTIES UNDER SUBSECTION (XX)     OF SECTION TWO HUNDRED TEN

  S 3. Section 210 of the tax law is amended by adding a new subdivision
48 to read as follows:
  48.  CREDIT  FOR  REHABILITATION OF DISTRESSED RESIDENTIAL PROPERTIES.
(1) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND
FOURTEEN,  A TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED,
AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT  EQUAL  TO  THIRTY
PERCENT OF THE QUALIFIED REHABILITATION EXPENDITURES MADE BY THE TAXPAY-
ER   WITH  RESPECT  TO  A  QUALIFIED  DISTRESSED  RESIDENTIAL  PROPERTY.
PROVIDED, HOWEVER, THE CREDIT SHALL  NOT  EXCEED  ONE  HUNDRED  THOUSAND
DOLLARS.
  (2)  TAX CREDITS ALLOWED PURSUANT TO THIS SUBDIVISION SHALL BE ALLOWED
IN THE TAXABLE YEAR IN WHICH THE PROPERTY IS DEEMED A CERTIFIED REHABIL-
ITATION.
  (3) IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS  SUBDIVISION  FOR
ANY  TAXABLE  YEAR  SHALL  EXCEED  THE TAXPAYER'S TAX FOR SUCH YEAR, THE
EXCESS MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS,  AND  MAY  BE
APPLIED AGAINST THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS, BUT SHALL NOT
EXCEED TWENTY-FIVE THOUSAND DOLLARS.
  (4)  (A)  THE  TERM  "QUALIFIED REHABILITATION EXPENDITURE" MEANS, FOR
PURPOSES OF THIS SUBDIVISION, ANY AMOUNT PROPERLY CHARGEABLE TO A  CAPI-
TAL ACCOUNT:
  (I)  IN  CONNECTION  WITH  THE CERTIFIED REHABILITATION OF A QUALIFIED
RESIDENTIAL PROPERTY, AND
  (II) FOR PROPERTY FOR WHICH  DEPRECIATION  WOULD  BE  ALLOWABLE  UNDER
SECTION 168 OF THE INTERNAL REVENUE CODE.
  (B) SUCH TERM SHALL NOT INCLUDE (I) THE COST OF ACQUIRING ANY BUILDING
OR  INTEREST  THEREIN, (II) ANY EXPENDITURE ATTRIBUTABLE TO THE ENLARGE-
MENT OF AN EXISTING BUILDING, OR (III) ANY  EXPENDITURE  MADE  PRIOR  TO
JANUARY FIRST, TWO THOUSAND FOURTEEN OR AFTER DECEMBER THIRTY-FIRST, TWO
THOUSAND NINETEEN.
  (5)  THE  TERM  "CERTIFIED REHABILITATION" MEANS, FOR PURPOSES OF THIS
SUBDIVISION, ANY REHABILITATION OF A  CERTIFIED  DISTRESSED  RESIDENTIAL
PROPERTY  WHICH HAS BEEN APPROVED AND CERTIFIED BY A LOCAL GOVERNMENT AS
BEING COMPLETED, WITH A CERTIFICATE OF OCCUPANCY ISSUED,  AND  THAT  THE
COSTS  ARE  CONSISTENT WITH THE WORK COMPLETED. SUCH CERTIFICATION SHALL
BE ACCEPTABLE AS PROOF THAT THE EXPENDITURES RELATED TO  SUCH  REHABILI-
TATION  QUALIFY AS QUALIFIED REHABILITATION EXPENDITURES FOR PURPOSES OF
THE CREDIT ALLOWED UNDER PARAGRAPH ONE OF THIS SUBDIVISION.
  (6) (A) THE TERM "QUALIFIED RESIDENTIAL PROPERTY" MEANS, FOR  PURPOSES
OF  THIS  SUBDIVISION,  A DISTRESSED RESIDENTIAL PROPERTY LOCATED WITHIN
NEW YORK STATE:
  (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED,
  (II) WHICH WAS CONSTRUCTED PRIOR TO JANUARY  FIRST,  NINETEEN  HUNDRED
SIXTY-TWO,
  (III) WHICH IS OWNED BY THE TAXPAYER, AND
  (IV)  WHICH  IS  LOCATED  WITHIN A DISTRESSED RESIDENTIAL OR MIXED-USE
AREA, AS IDENTIFIED BY EACH LOCALITY THROUGH LOCAL LAW, THAT  IS  DEEMED
AN AREA IN NEED OF COMMUNITY RENEWAL DUE TO DILAPIDATION AND VACANCIES.
  (B)  IF  THE  DISTRESSED RESIDENTIAL PROPERTY IS RENTAL PROPERTY, SUCH
PROPERTY SHALL HAVE BEEN VACANT FOR AT LEAST SIX MONTHS  WHILE  ACTIVELY
MARKETED FOR LEASE.

S. 2739--A                          4

  (C) A BUILDING SHALL BE TREATED AS HAVING BEEN "SUBSTANTIALLY REHABIL-
ITATED" IF THE QUALIFIED REHABILITATION EXPENDITURES IN RELATION TO SUCH
BUILDING TOTAL TEN THOUSAND DOLLARS OR MORE.
  (7)  (A)  IF  THE TAXPAYER DISPOSES OF SUCH TAXPAYER'S INTEREST IN THE
QUALIFIED DISTRESSED RESIDENTIAL PROPERTY, OR SUCH PROPERTY CEASES TO BE
USED AS A RESIDENTIAL PROPERTY OF THE  TAXPAYER  WITHIN  FIVE  YEARS  OF
RECEIVING  THE CREDIT UNDER THIS SUBDIVISION, THE TAXPAYER'S TAX IMPOSED
BY THIS ARTICLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR CESSA-
TION OCCURS SHALL BE INCREASED BY THE RECAPTURE PORTION  OF  THE  CREDIT
ALLOWED  UNDER THIS SUBDIVISION FOR ALL PRIOR TAXABLE YEARS WITH RESPECT
TO SUCH REHABILITATION.
  (B) FOR PURPOSES OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE  RECAPTURE
PORTION  SHALL  BE  THE  PRODUCT  OF THE AMOUNT OF CREDIT CLAIMED BY THE
TAXPAYER MULTIPLIED BY A RATIO, THE NUMERATOR OF WHICH IS EQUAL TO SIXTY
LESS THE NUMBER OF MONTHS THE BUILDING IS OWNED OR USED  AS  RESIDENTIAL
PROPERTY BY THE TAXPAYER AND THE DENOMINATOR OF WHICH IS SIXTY.
  S 4. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2014.

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