senate Bill S2762B

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

See Assembly Version of this Bill:
A4507B
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, A9543

Sponsor Memo

BILL NUMBER:S2762B

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

SUMMARY OF PROVISIONS:

This bill would create a new tax credit program to encourage the reha-
bilitation of distressed commercial property.

Section 1 - amends section 606 of the Tax Law by adding a new subsection
(ccc) 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 expendi-
tures 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.

(8) Any expenditure for which a credit is claimed under this subsection
shall not be eligible for any other credit under this chapter.

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

Section 3 - amends section 210 of the Tax law to add a new subdivision
50.

(1) For taxable years beginning after January 1, 2014, taxpayers shall
be allowed a credit equal to thirty percent of the qualified expendi-
tures 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.

(8) Any expenditure for which a credit is claimed under this subsection
shall not be eligible for any other credit under this chapter.

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 reha-
bilitation 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 bene-
fit 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--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:

  Section  1.  Section  606  of  the  tax law is amended by adding a new
subsection (ccc) to read as follows:
  (CCC) 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05241-06-4

S. 2762--B                          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 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.
  (8)  ANY  EXPENDITURE  FOR  WHICH  A  CREDIT  IS  CLAIMED  UNDER  THIS
SUBSECTION  SHALL  NOT BE ELIGIBLE FOR ANY OTHER CREDIT UNDER THIS CHAP-
TER.
  S 2. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax  law  is  amended  by  adding a new clause (xli) to read as
follows:

S. 2762--B                          3

(XLI) CREDIT FOR REHABILITATION       AMOUNT OF CREDIT UNDER
OF DISTRESSED COMMERCIAL PROPERTIES   SUBDIVISION FIFTY
UNDER SUBSECTION (CCC)                OF SECTION TWO HUNDRED TEN
  S 3. Section 210 of the tax law is amended by adding a new subdivision
50 to read as follows:
  50. 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

S. 2762--B                          4

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
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.
  (8) ANY EXPENDITURE FOR WHICH A CREDIT IS CLAIMED UNDER THIS  SUBDIVI-
SION SHALL NOT BE ELIGIBLE FOR ANY OTHER CREDIT UNDER THIS CHAPTER.
  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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