senate Bill S2762A

Amended

Establishes a credit against income tax for the rehabilitation of distressed commercial 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
  • 28 / Jan / 2014
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 28 / Jan / 2014
    • PRINT NUMBER 2762A
  • 13 / May / 2014
    • REPORTED AND COMMITTED TO FINANCE
  • 02 / Jun / 2014
    • 1ST REPORT CAL.1066
  • 03 / Jun / 2014
    • 2ND REPORT CAL.
  • 09 / Jun / 2014
    • AMENDED 2762B
  • 09 / Jun / 2014
    • ADVANCED TO THIRD READING
  • 18 / Jun / 2014
    • PASSED SENATE
  • 18 / Jun / 2014
    • DELIVERED TO ASSEMBLY
  • 18 / Jun / 2014
    • REFERRED TO WAYS AND MEANS

Summary

Establishes a credit against income tax for the rehabilitation of distressed commercial properties; allows for 30% of the qualified rehabilitation expenditures up to $100,000; requires that to be eligible, the commercial property is located within a distressed commercial area, as identified by each locality through local law, that is deemed an area in need of community renewal due to dilapidated vacancies; provides that the property shall be substantially rehabilitated which is where the qualified rehabilitation expenditures in relation to such building total ten thousand dollars.

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Bill Details

Versions:
S2762
S2762A
S2762B
Legislative Cycle:
2013-2014
Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd ยงยง606 & 210, Tax L
Versions Introduced in 2011-2012 Legislative Cycle:
S6516

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:S2762A REVISED MEMO 01/29/2014

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

SUMMARY OF PROVISIONS:

This bill would create a new tax credit program to encourage the
rehabilitation of distressed commercial 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 commercial 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 commercial 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, 2018.

(5) Defines certified rehabilitation.

(6) Defines qualified distressed commercial property.

(7) Provides for recapture of tax credits in the event the
rehabilitated distressed commercial 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 commercial property.

Section 3 - amends section 210 of the Tax law to add a new subdivision
48.

(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 commercial 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, 2018.

(5) Defines certified rehabilitation.

(6) Defines qualified distressed commercial property.

(7) Provides for recapture of tax credits in the event the
rehabilitated distressed commercial 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 tired and outdated commercial
buildings. On older commercial streets, these areas may include long
stretches of outdated commercial buildings that may have been built
from the 1930's through the 1980's. These commercial buildings have
not received any significant updating for years, and they are now
vacant or underperforming properties that give their whole
neighborhoods a rundown appearance. Rehabilitating these properties
will benefit communities, make these areas economically attractive for
new and existing businesses 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. We will all 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.6516/A.9543 INVESTIGATIONS/Ways & Means;
2013: S.2762/A.4507 - 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
________________________________________________________________________

                                 2762--A

                       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

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:

  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 COMMERCIAL 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 COMMERCIAL 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
APPLIED AGAINST THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS, BUT SHALL NOT
EXCEED TWENTY-FIVE THOUSAND DOLLARS.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05241-04-4

S. 2762--A                          2

  (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 COMMERCIAL 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
SUBSECTION, ANY REHABILITATION  OF  A  CERTIFIED  DISTRESSED  COMMERCIAL
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 SUBSECTION.
  (6) (A) THE TERM "QUALIFIED DISTRESSED COMMERCIAL PROPERTY" MEANS, FOR
PURPOSES OF THIS SUBSECTION, A DISTRESSED  COMMERCIAL  PROPERTY  LOCATED
WITHIN NEW YORK STATE:
  (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED,
  (II) WHICH IS OWNED BY THE TAXPAYER, AND
  (III) WHICH IS LOCATED WITHIN A DISTRESSED COMMERCIAL AREA, AS IDENTI-
FIED  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 COMMERCIAL PROPERTY  IS  RENTAL  PROPERTY,  SUCH
PROPERTY  SHALL  HAVE  BEEN  MORE  THAN THIRTY PERCENT VACANT FOR TWELVE
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 COMMERCIAL PROPERTY, OR SUCH PROPERTY CEASES TO BE
USED AS A COMMERCIAL 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  COMMERCIAL
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:
(XXXVII) CREDIT FOR REHABILITATION    AMOUNT OF CREDIT UNDER
OF DISTRESSED COMMERCIAL PROPERTIES   SUBDIVISION FORTY-EIGHT
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:

S. 2762--A                          3

  48. CREDIT FOR REHABILITATION OF DISTRESSED COMMERCIAL 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 COMMERCIAL 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
COMMERCIAL 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  COMMERCIAL
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 DISTRESSED COMMERCIAL PROPERTY" MEANS, FOR
PURPOSES OF THIS SUBDIVISION, A DISTRESSED COMMERCIAL  PROPERTY  LOCATED
WITHIN NEW YORK STATE:
  (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED,
  (II) WHICH IS OWNED BY THE TAXPAYER, AND
  (III) WHICH IS LOCATED WITHIN A DISTRESSED COMMERCIAL AREA, AS IDENTI-
FIED  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 COMMERCIAL PROPERTY  IS  RENTAL  PROPERTY,  SUCH
PROPERTY  SHALL  HAVE  BEEN  MORE  THAN THIRTY PERCENT VACANT FOR TWELVE
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 COMMERCIAL PROPERTY, OR SUCH PROPERTY CEASES TO BE
USED AS A COMMERCIAL 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

S. 2762--A                          4

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 COMMERCIAL
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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