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

                                  1097

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by  M.  of A. RABBITT, THIELE, KOLB, FINCH, McDONOUGH, RAIA,
  WALKER, BALL, McKEVITT -- Multi-Sponsored by --  M.  of  A.  BACALLES,
  BARCLAY,  MOLINARO  -- read once and referred to the Committee on Ways
  and Means

AN ACT to amend the tax law, in relation to providing a  credit  against
  income tax in the form of a mortgage credit certificate for first-time
  home buyers

  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 (qq) to read as follows:
  (QQ)  MORTGAGE  CREDIT  CERTIFICATE. (1) A TAXPAYER SHALL BE ALLOWED A
CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX  IMPOSED
BY  THIS ARTICLE. THE AMOUNT OF THE CREDIT SHALL BE EQUAL TO TWENTY-FIVE
PERCENT OF A QUALIFIED MORTGAGE CREDIT CERTIFICATE  NOT  TO  EXCEED  TWO
THOUSAND DOLLARS PER YEAR.
  (2) IF THE CREDIT ALLOWABLE UNDER PARAGRAPH ONE OF THIS SUBSECTION FOR
ANY  TAXABLE  YEAR  EXCEEDS THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS
CREDIT MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR  YEARS  AND  MAY  BE
DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  (3) (A) A TAXPAYER WHO IS A FIRST-TIME HOME BUYER SHALL BE ENTITLED TO
A  QUALIFIED  MORTGAGE  CREDIT CERTIFICATE FROM A PRIVATE LENDER FOR THE
ANNUAL AMOUNT OF INTEREST TO BE PAID TO FINANCE THE COST OF THE ACQUISI-
TION OF A PRINCIPAL RESIDENCE.
  (B) A MORTGAGE CREDIT CERTIFICATE  MAY  ONLY  BE  TRANSFERRED  BY  THE
TAXPAYER TO A LENDING INSTITUTION INCLUDING A NON-DEPOSITORY INSTITUTION
IN CONNECTION WITH A LOAN:
  (I)  THAT  IS SECURED BY THE PRINCIPAL RESIDENCE WITH RESPECT TO WHICH
THE CREDIT RELATES, AND

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02783-02-9
              

A. 1097                             2

  (II) THE PROCEEDS OF WHICH MAY NOT BE USED FOR ANY PURPOSE OTHER  THAN
THE ACQUISITION OF SUCH PRINCIPAL RESIDENCE.
  (C)  IN  EXCHANGE  FOR  WHICH  SUCH  LENDING  INSTITUTION PROVIDES THE
TAXPAYER, (I) A REDUCTION DETERMINED AS PROVIDED IN SUCH REGULATIONS  IN
THE RATE OF INTEREST ON THE LOAN; OR (II) IF THE TAXPAYER SO ELECTS WITH
RESPECT  TO  A SPECIFIED AMOUNT OF THE FACE AMOUNT OF SUCH A CERTIFICATE
RELATING TO A BUILDING:
  A. WHICH IS A TARGETED AREA RESIDENCE (WITHIN THE MEANING  OF  SECTION
143(J)(1) OF THE INTERNAL REVENUE CODE), OR
  B.  WHICH IS LOCATED IN A FEDERAL ENTERPRISE OR EMPOWERMENT ZONE OR AN
EMPIRE ZONE, A PAYMENT WHICH IS SUBSTANTIALLY EQUIVALENT TO SUCH  SPECI-
FIED  AMOUNT  TO BE USED TO REDUCE THE TAXPAYER'S COST OF PURCHASING THE
BUILDING (AND ONLY THE REMAINDER OF SUCH FACE AMOUNT SHALL BE TAKEN INTO
ACCOUNT UNDER CLAUSE (I) OF THIS SUBPARAGRAPH).
  THE AMOUNT OF THE CREDIT SPECIFIED IN THE CERTIFICATE SHALL BE ALLOWED
TO THE LENDER ONLY TO OFFSET THE  TAX  OF  SUCH  LENDER  DUE  UNDER  THE
PROVISIONS  OF ARTICLE NINE-A OR THIRTY-TWO OF THIS CHAPTER.  THE LENDER
MAY  CARRY  FORWARD  ALL  UNUSED  AMOUNTS  UNDER  THIS  PARAGRAPH  UNTIL
EXHAUSTED.
  (D) FOR PURPOSES OF THIS PARAGRAPH, THE TERM "QUALIFIED MORTGAGE CRED-
IT CERTIFICATE" MEANS A CERTIFICATE:
  (I)  ISSUED  TO THE TAXPAYER, IN ACCORDANCE WITH PROCEDURES PRESCRIBED
BY THE COMMISSIONER,
  (II) THE FACE AMOUNT OF WHICH SHALL BE EQUAL  TO  THE  AMOUNT  OF  THE
ANNUAL INTEREST TO BE PAID ON A LOAN OR LOANS TO FINANCE THE COST OF THE
ACQUISITION OF A PRINCIPAL RESIDENCE BY A FIRST-TIME HOME BUYER,
  (III)  WHICH  MAY  ONLY  BE  USED BY THE TAXPAYER IN CONNECTION WITH A
LOAN:
  A. THAT IS SECURED BY THE RESIDENCE WITH RESPECT TO WHICH  THE  CREDIT
RELATES, AND
  B.  THE  PROCEEDS  OF WHICH MAY NOT BE USED FOR ANY PURPOSE OTHER THAN
THE ACQUISITION OF SUCH RESIDENCE.
  (E) THE TERM "FIRST-TIME HOME BUYER" INCLUDES ANY TAXPAYER WHO HAS NOT
OWNED HIS OR HER PRINCIPAL RESIDENCE WITHIN THE PRECEDING FIVE YEARS AND
WHO MEETS THE ELIGIBILITY REQUIREMENTS IMPOSED BY THE STATE OF NEW  YORK
MORTGAGE  AGENCY  FOR  ITS  FORWARD  COMMITMENT LOAN PROGRAM PURSUANT TO
ARTICLE EIGHT OF THE PUBLIC AUTHORITIES LAW.
  (F) THE TERM "PRINCIPAL RESIDENCE" MEANS A DWELLING IN THE STATE OWNED
AS A HOME AND SO MUCH OF THE LAND ABUTTING IT, NOT EXCEEDING  ONE  ACRE,
AS  IS  REASONABLY  NECESSARY FOR USE OF THE DWELLING AS A HOME, AND MAY
CONSIST OF PART OF A MULTIPLE DWELLING OR MULTI-PURPOSE BUILDING INCLUD-
ING A COOPERATIVE OR A CONDOMINIUM.
  (G) IF THE TAXPAYER HOLDS STOCK AS A TENANT-SHAREHOLDER IN  A  COOPER-
ATIVE  HOUSING  CORPORATION  SUCH SHAREHOLDER SHALL BE TREATED AS OWNING
THE HOUSE OR APARTMENT WHICH THE TAXPAYER IS ENTITLED TO OCCUPY AS  SUCH
SHAREHOLDER.
  (4)  (A)  IF,  BEFORE THE END OF THE FIVE-YEAR PERIOD BEGINNING ON THE
DATE OF PURCHASE OF SUCH RESIDENCE BY THE TAXPAYER:
  (I) THE TAXPAYER DISPOSES OF SUCH TAXPAYER'S INTEREST  IN  SUCH  RESI-
DENCE, OR
  (II)  SUCH  RESIDENCE  CEASES TO BE USED AS THE PRINCIPAL RESIDENCE OF
THE TAXPAYER,
THE TAXPAYER'S TAX IMPOSED BY THIS ARTICLE FOR THE TAXABLE YEAR IN WHICH
SUCH DISPOSITION OR CESSATION OCCURS SHALL BE INCREASED BY THE RECAPTURE
PERCENTAGE OF THE CREDIT ALLOWED UNDER THIS  SUBSECTION  FOR  ALL  PRIOR
TAXABLE YEARS WITH RESPECT TO SUCH CREDIT.

A. 1097                             3

  (B)  FOR PURPOSES OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE RECAPTURE
PERCENTAGE SHALL BE DETERMINED IN ACCORDANCE WITH REGULATIONS ADOPTED BY
THE COMMISSIONER.
  (5)  THE  COMMISSIONER IN CONJUNCTION WITH THE SUPERINTENDENT OF BANKS
SHALL PRESCRIBE SUCH REGULATIONS AS MAY BE APPROPRIATE TO CARRY OUT  THE
PURPOSES  OF  THIS SUBSECTION, INCLUDING REGULATIONS WHERE LESS THAN ALL
OF A BUILDING IS USED AS A PRINCIPAL RESIDENCE AND WHERE MORE  THAN  ONE
TAXPAYER USE THE SAME DWELLING UNIT AS THEIR PRINCIPAL RESIDENCE.
  S  2. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a  law  and  shall  apply  to
taxable  years  commencing  on  and  after  such date; provided that the
commissioners of taxation and finance and housing and community  renewal
and the superintendent of banks are authorized to promulgate any and all
rules and regulations and take any other measures necessary to implement
this act on its effective date on or before such date.