Senate Bill S2878

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

                                  2878

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            February 2, 2011
                               ___________

Introduced  by Sen. GRISANTI -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the tax law,  in  relation  to  enacting  the  "city  of
  Buffalo historic preservation tax credit act"

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

  Section 1. Short title. This act shall be known and may  be  cited  as
the "city of Buffalo historic preservation tax credit act".
  S  2. Section 606 of the tax law is amended by adding a new subsection
(ss) to read as follows:
  (SS) CITY OF BUFFALO HISTORIC STRUCTURE REHABILITATION CREDIT.  (1)  A
TAXPAYER  SHALL  BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN THIS
SUBSECTION, AGAINST THE TAX IMPOSED BY THIS ARTICLE. THE AMOUNT  OF  THE
CREDIT  SHALL BE EQUAL TO THIRTY PERCENT OF THE QUALIFIED REHABILITATION
EXPENDITURES MADE BY THE TAXPAYER WITH RESPECT TO A  QUALIFIED  HISTORIC
STRUCTURE  AND  MAY ONLY BE TAKEN BY THE TAXPAYER UPON COMPLETION OF THE
REHABILITATION WORK AND APPROVAL OF SUCH WORK BY THE  OFFICE  OF  PARKS,
RECREATION  AND HISTORIC PRESERVATION OR BY A LOCAL GOVERNMENT CERTIFIED
PURSUANT TO SECTION 101 (C)(1) OF  THE  NATIONAL  HISTORIC  PRESERVATION
ACT.  APPROVAL IS NECESSARY OF EXTERIOR WORK AND INTERIOR WORK AFFECTING
PRIMARY SIGNIFICANT HISTORIC SPACES. INTERIOR WORK MAY ALSO QUALIFY  FOR
THE  CREDIT  SO  LONG  AS  NO MORE THAN NINETY-FIVE PERCENT OF THE TOTAL
EXPENDITURES MADE IN THE REHABILITATION PROCESS  ARE  ALLOWABLE  TO  THE
REHABILITATION  OF  THE  INTERIOR. WORK WILL BE REVIEWED PURSUANT TO THE
STANDARDS ESTABLISHED BY  THE  COMMISSIONER  OF  PARKS,  RECREATION  AND
HISTORIC PRESERVATION.
  (2)  TAX CREDITS ALLOWED PURSUANT TO THIS ARTICLE SHALL BE ALLOWED FOR
THE TAXABLE YEAR IN WHICH SUCH QUALIFIED HISTORIC STRUCTURE OR AN  IDEN-
TIFIABLE PORTION OF THE STRUCTURE IS PLACED IN SERVICE PROVIDED THAT THE
SUBSTANTIAL REHABILITATION TEST IS MET FOR SUCH YEAR.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07934-01-1
              

S. 2878                             2

  (3)  IF  THE AMOUNT OF THE TAX CREDIT EXCEEDS THE TAXPAYER'S TOTAL TAX
LIABILITY FOR THE YEAR IN WHICH THE SUBSTANTIALLY REHABILITATED PROPERTY
IS PLACED IN SERVICE, THE EXCESS SHALL BE TREATED AS AN  OVERPAYMENT  OF
TAX  TO  BE  CREDITED  OR  REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION  SIX  HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED HOWEVER, THAT
NO INTEREST SHALL BE PAID THEREON.
  (4) FOR PURPOSES OF THIS SUBSECTION:
  (A)(I) THE  TERM  "QUALIFIED  REHABILITATION  EXPENDITURE"  MEANS  ANY
AMOUNT  PROPERLY  CHARGEABLE  TO  CAPITAL ACCOUNT IN CONNECTION WITH THE
CERTIFIED REHABILITATION OF A CERTIFIED HISTORIC STRUCTURE FOR  PROPERTY
EITHER:
  1.  FOR WHICH DEPRECIATION WOULD BE ALLOWABLE UNDER SECTION 168 OF THE
INTERNAL REVENUE CODE; OR
  2. MADE WITH RESPECT TO PROPERTY HELD FOR SALE BY THE OWNER.
  (II) SUCH TERM SHALL NOT INCLUDE:
  1. THE COST OF ACQUIRING ANY BUILDING OR INTEREST THEREON;
  2. ANY EXPENDITURE IN CONNECTION WITH THE REHABILITATION OF A BUILDING
UNLESS AT LEAST FIVE PERCENT OF THE TOTAL EXPENDITURES MADE IN THE REHA-
BILITATION PROCESS ARE ALLOCABLE TO THE REHABILITATION OF  THE  EXTERIOR
OF SUCH BUILDING; OR
  3.  ANY  EXPENDITURES EXCLUDED UNDER CLAUSES (II) AND (III) OF SECTION
47(C)(2)(B) OF THE INTERNAL REVENUE CODE.
  (B)(I) THE TERM "CERTIFIED REHABILITATION" SHALL  MEAN  ANY  REHABILI-
TATION  OF  A  CERTIFIED  HISTORIC STRUCTURE WHICH HAS BEEN APPROVED AND
CERTIFIED AS BEING CONSISTENT WITH  THE  STANDARDS  ESTABLISHED  BY  THE
COMMISSIONER OF PARKS, RECREATION AND HISTORIC PRESERVATION, THE CITY OF
BUFFALO,  IF  CERTIFIED  BY  THE  COMMISSIONER  OF PARKS, RECREATION AND
HISTORIC PRESERVATION, OR A LOCAL LANDMARK COMMISSION ESTABLISHED PURSU-
ANT TO SECTION NINETY-SIX-A, AS ADDED BY CHAPTER FIVE  HUNDRED  THIRTEEN
OF  THE LAWS OF NINETEEN HUNDRED SIXTY-EIGHT, OR ONE HUNDRED NINETEEN-DD
OF THE GENERAL MUNICIPAL LAW.
  (II) A CERTIFIED REHABILITATION EXPENDITURE SHALL REQUIRE:
  1. AN INITIAL CERTIFICATION THAT THE STRUCTURE MEETS THE DEFINITION OF
"CERTIFIED HISTORIC STRUCTURE";
  2. A SECOND CERTIFICATION, TO BE ISSUED PRIOR TO CONSTRUCTION,  CERTI-
FYING THAT THE PROPOSED REHABILITATION WORK IS CONSISTENT WITH THE STAN-
DARDS  ESTABLISHED BY THE COMMISSIONER OF PARKS, RECREATION AND HISTORIC
PRESERVATION FOR REHABILITATION; AND
  3. A FINAL  CERTIFICATION,  ISSUED  WHEN  CONSTRUCTION  IS  COMPLETED,
CERTIFYING  THAT  THE  WORK WAS COMPLETED AS PROPOSED AND THAT THE COSTS
ARE CONSISTENT WITH THE WORK COMPLETED. SUCH FINAL  CERTIFICATION  SHALL
BE   ACCEPTABLE   AS   PROOF  THAT  THE  EXPENDITURES  RELATED  TO  SUCH
CONSTRUCTION  QUALIFY  AS  QUALIFIED  REHABILITATION  EXPENDITURES   FOR
PURPOSES OF THE CREDIT ALLOWED UNDER PARAGRAPH ONE OF THIS SUBSECTION.
  (C)  THE  TERM "CERTIFIED HISTORIC STRUCTURE" SHALL MEAN ANY BUILDING,
AND ITS STRUCTURAL COMPONENTS LOCATED IN THE CITY OF BUFFALO WHICH:
  (I) IS LISTED ON THE STATE OR NATIONAL REGISTER OF HISTORIC PLACES; OR
  (II) IS LOCATED IN A REGISTERED HISTORIC DISTRICT AND IS CERTIFIED  AS
BEING  OF  HISTORICAL  SIGNIFICANCE TO SUCH DISTRICT BY SUCH DISTRICT OR
THE COMMISSIONER OF PARKS, RECREATION AND HISTORIC PRESERVATION; OR
  (III) IS LOCATED IN A LOCAL HISTORIC  DISTRICT  AND  IS  CERTIFIED  AS
BEING OF HISTORICAL SIGNIFICANCE TO SUCH DISTRICT OR BY THE COMMISSIONER
OF PARKS, RECREATION AND HISTORIC PRESERVATION; AND
  (IV) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED; AND
  (V) WHICH OR ANY PORTION OF WHICH IS OWNED, IN WHOLE OR IN PART BY THE
TAXPAYER.

S. 2878                             3

  (D) A BUILDING SHALL BE TREATED AS HAVING BEEN "SUBSTANTIALLY REHABIL-
ITATED" IF THE QUALIFIED REHABILITATION EXPENDITURES IN RELATION TO SUCH
BUILDING  DURING  THE  TWENTY-FOUR MONTH PERIOD SELECTED BY THE TAXPAYER
ENDING WITH OR WITHIN THE TAXABLE  YEAR  EXCEED  FIFTY  PERCENT  OF  THE
ADJUSTED  BASIS IN SUCH BUILDING AND ITS STRUCTURAL COMPONENTS AS OF THE
BEGINNING OF SUCH PERIOD. IN THE CASE OF ANY REHABILITATION,  WHICH  MAY
REASONABLY  BE EXPECTED TO BE COMPLETED IN PHASES SET FORTH IN ARCHITEC-
TURAL PLANS  AND  SPECIFICATIONS  COMPLETED  BEFORE  THE  REHABILITATION
BEGINS,  THIS  DEFINITION  SHALL BE APPLIED BY SUBSTITUTING "SIXTY MONTH
PERIOD" FOR "TWENTY-FOUR MONTH PERIOD".
  (E) A REHABILITATION SHALL NOT BE TREATED AS COMPLETE BEFORE THE  DATE
OF THE CERTIFICATION REFERRED TO IN THIS SUBSECTION.
  (F)   QUALIFIED  REHABILITATION  EXPENDITURES  SHALL  BE  TREATED  FOR
PURPOSES OF THIS SUBSECTION AS MADE:
  (I) ON THE DATE THE REHABILITATION IS COMPLETED; OR
  (II) TO THE EXTENT PROVIDED BY THE COMMISSIONER  BY  REGULATION,  WHEN
SUCH  EXPENDITURES  ARE  PROPERLY  CHARGEABLE  TO CAPITAL ACCOUNT. REGU-
LATIONS UNDER THIS SUBPARAGRAPH SHALL INCLUDE A RULE SIMILAR TO THE RULE
UNDER SECTION 50 (A) (2) OF THE INTERNAL REVENUE CODE RELATING TO RECAP-
TURE IF PROPERTY CEASES TO QUALIFY FOR PROGRESS EXPENDITURES.
  (5) THE COMMISSIONER IN  CONJUNCTION  WITH  THE  COMMISSIONER  OF  THE
OFFICE  OF  PARKS,  RECREATION AND HISTORIC PRESERVATION SHALL PRESCRIBE
SUCH REGULATIONS AS MAY BE APPROPRIATE TO CARRY OUT THE PURPOSES OF THIS
SUBSECTION. SUCH REGULATIONS MAY ALSO INCLUDE THE IMPOSITION  OF  A  FEE
FOR  THE  PROCESSING  OF APPLICATIONS FOR CERTIFICATION OF ANY REHABILI-
TATION UNDER THIS SUBSECTION PROVIDED THAT THE AMOUNT  OF  SUCH  FEE  IS
USED  ONLY  TO  DEFRAY  EXPENSES  ASSOCIATED WITH THE PROCESSING OF SUCH
APPLICATIONS.
  S 3. 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  effective  date;  provided,
however, that prior to the effective date of this act, the commissioners
of  taxation and finance and parks, recreation and historic preservation
may promulgate any regulations necessary to implement and facilitate the
implementation of this act.