Senate Bill S6598B

2011-2012 Legislative Session

Establishes business franchise and personal income tax credits for expenses of soil improvement projects on farmlands

download bill text pdf

Archive: Last Bill Status - In Senate Committee Finance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 05, 2012	print number 6598b
Jun 05, 2012	amend and recommit to finance
May 31, 2012	reported and committed to finance
May 16, 2012	print number 6598a
May 16, 2012	amend and recommit to investigations and government operations
Mar 01, 2012	referred to investigations and government operations

Votes

- May 31, 2012 - Investigations And Government Operations Committee Vote
  S6598B
  
  Aye
  
  5
  
  Nay
  
  0
  
  Aye with Reservations
  
  2
  
  Absent
  
  0
  
  Excused
  
  1
  
  Abstained
  
  0
  - - Investigations And Government Operations Committee Vote: May 31, 2012
      
      aye (5)
      
      Alesi
      
      Golden
      
      Marcellino
      
      Nozzolio
      
      Zeldin
      
      aye wr (2)
      
      Peralta
      
      Squadron
      
      excused (1)
      
      Diaz

Bill Amendments

Original

B (Active)

co-Sponsors

2011-S6598 - Details

See Assembly Version of this Bill:: A9425
Current Committee:: Senate Finance
Law Section:: Tax Law
Laws Affected:: Amd §§208, 210, 606 & 612, Tax L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S4387
2015-2016: S1664

2011-S6598 - Summary

Establishes business franchise and personal income tax credits for expenses of soil improvement projects on farmlands.

2011-S6598 - Sponsor Memo

                                BILL NUMBER:S6598

TITLE OF BILL:
An act to amend the tax law, in relation to establishing a business
franchise and personal income tax credit for soil improvement projects
upon farmlands

PURPOSE:
This bill provides business franchise and personal income tax credits
for expenses of soil improvement projects on farmlands.

SUMMARY OF PROVISIONS:
Sections 1 adds a new subparagraph 5 to section 208.

Section 2 through 4 amends the tax law to provide for the allowance of
a soil improvement credit after January 1, 2012 of 25% of eligible
expenditures, up to $50,000, to farmland entitled to an agricultural
assessment under article twenty-five-AA of the agriculture and markets
law during that taxable year.

Section 5 - section 612(b) of the tax law is amended to provide that
any soil improvement credit must be deducted from the taxpayer's total
net income, or total gross income, on their federal income tax return.
Eligible expenditures include architectural, archeological, geological
and engineering services, the cost of developing plans and
specifications, consultation and legal services fees, and expenditures

included in section 175(1) (c) of the internal revenue code. Soil
improvement projects are defined as the restoration of farmland for
the production of agricultural perennial crops, including crops
intended for energy production purposes, provided the land has not
been used in agricultural production for at least two years prior to
the completion of the soil improvement project. The credit would be
refundable.

REVIEW OF EXISTING LAW:
Current law does not contain any tax credits specifically intended to
encourage landowners to make soil improvements necessary to restore
land for the production of agricultural perennial crops, including
those intended for energy production purposes. In addition, current
law does not contain any tax credits specifically intended to
encourage landowners to make necessary farmland improvements.
However, a taxpayer may be entitled to a deduction for some of those
expenses, if the taxpayer is using the property for business purposes.

JUSTIFICATION:
This proposal will provide a one-time State personal income tax
credit, up to $50,000, for 25 percent of the capital costs for
specified land improvements designed to restore farmland to active
production of perennial crops, including those intended for energy
beginning in the 2012 tax year.  production, beginning in the 2012 tax
year.

Much more extensive planting of perennial energy crops is necessary to
balance the opportunity that will be presented by next-generation
renewable energy production. New York State lands could be brought
into production for such purposes without impinging on either the


State's livestock industry or its food supply. In addition,
investments in cellulosic ethanol and other advanced green energy
technologies will go to other states if New York does not move to
encourage feedstock production. Failure to bring idle open land back
into production denies the potential for economic development while
continuing to promote the land's use for warehouses, shopping centers,
and low-density housing developments.

There are several million acres of open "farmland" in New York State
that are owned by non-farmers or not actively farmed by farmer owners.
Demographic trends suggest that the non-farmer owned area will
continue to grow at the expense of owner-operated farms. Some of the
land owned by non-farmers is currently rented to farmers, but an even
larger share is found in the tens of thousands of parcels of
"exfarmland" which lie virtually neglected from a land management
perspective, gradually growing up to second-growth forest. An
effective policy to deal with the loss of New York's agricultural base
must include incentives to keep in or return to production, under
sound long-term management practices, farmland that is not
farmer-owned.

The State Constitution charges the people of New York State with
encouraging the development and improvement of agricultural lands for
the production of food and other agricultural products, as well as
providing for the conservation of state soil and water resources.
Agricultural production has become an increasingly competitive
industry, which accounts for farms going out of business and land out
of production. A limited amount of funds are available for long term
agricultural land retention strategies such as purchase of development
rights. At the same time, many farmers are seeking land to supplement
their current land base. Due to competing interests for the land,
depressed farm incomes, and costs of improving the land to an
acceptable level of productivity, farmers are experiencing difficulty
in acquiring additional lands for their operations. This legislation
will provide tax incentives to maintain existing farmland and restore
other land to agricultural biomass production. This, in turn, will
help protect the long-term agricultural base, preserve the open space
benefits, protect water quality and provide economic development
opportunities to economically depressed regions of the state.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:
None to the state.

EFFECTIVE DATE:
Effective immediately.

2011-S6598 - Bill Text download pdf

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

    S. 6598                                                  A. 9425

                      S E N A T E - A S S E M B L Y

                              March 1, 2012
                               ___________

IN  SENATE -- Introduced by Sens. YOUNG, O'MARA, RITCHIE, VALESKY -- (at
  request of the Legislative Commission  on  Rural  Resources)  --  read
  twice  and  ordered  printed,  and when printed to be committed to the
  Committee on Investigations and Government Operations

IN ASSEMBLY -- Introduced by M. of A. GUNTHER -- Multi-Sponsored  by  --
  M.  of  A. BURLING, LIFTON, PALMESANO -- read once and referred to the
  Committee on Ways and Means

AN ACT to amend the tax law, in  relation  to  establishing  a  business
  franchise and personal income tax credit for soil improvement projects
  upon farmlands

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

  Section 1. Subparagraphs 3 and 4 of paragraph (a) of  subdivision  8-B
of  section 208 of the tax law, as amended by chapter 170 of the laws of
1994, are amended, and a new subparagraph 5 is added to read as follows:
  (3) increased by the net operating loss  deduction  otherwise  allowed
under paragraph (f) of subdivision nine of this section, [and]
  (4)  reduced, for taxable years beginning after nineteen hundred nine-
ty-three, by the alternative net operating loss deduction, as defined in
paragraph (d) of this subdivision[.], AND
  (5) IN THE EVENT THE TAXPAYER CLAIMS THE SOIL IMPROVEMENT  CREDIT  FOR
FARMLANDS  ESTABLISHED PURSUANT TO SUBDIVISION FORTY-FIVE OF SECTION TWO
HUNDRED TEN OF THIS ARTICLE, INCREASED BY THE AMOUNT OF ANY EXPENDITURES
SPECIFIED IN INTERNAL REVENUE CODE SECTION 175(1)(C) THAT  THE  TAXPAYER
DEDUCTED FROM ITS TOTAL NET INCOME ON ITS FEDERAL TAX RETURN FOR THE TAX
YEAR.
  S 2. Section 210 of the tax law is amended by adding a new subdivision
45 to read as follows:
  45.  SOIL  IMPROVEMENT  CREDIT FOR FARMLANDS. (A) ALLOWANCE OF CREDIT.
FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND
TWELVE,  A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY
THIS ARTICLE IN AN AMOUNT EQUAL TO TWENTY-FIVE PERCENT OF THE TAXPAYER'S
ELIGIBLE EXPENDITURES  DURING  THE  TAX  YEAR  FOR  A  SOIL  IMPROVEMENT

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

                                                           LBD13593-03-2

S. 6598                             2                            A. 9425

PROJECT.  PROVIDED,  HOWEVER,  THAT  THE  CREDIT  GRANTED  FOR  ANY SOIL
IMPROVEMENT PROJECT PURSUANT TO THIS SUBDIVISION SHALL NOT EXCEED  FIFTY
THOUSAND DOLLARS.
  (B)  DEFINITIONS.  FOR THE PURPOSES OF THIS SUBDIVISION, THE FOLLOWING
DEFINITIONS SHALL APPLY:
  (1) "ELIGIBLE EXPENDITURES" SHALL MEAN FEES FOR ARCHITECTURAL, ARCHEO-
LOGICAL, GEOLOGICAL AND ENGINEERING SERVICES; THE  COSTS  OF  DEVELOPING
PLANS AND SPECIFICATION; FEES FOR CONSULTANT AND LEGAL SERVICES; AND ANY
EXPENDITURE  SPECIFIED  IN  INTERNAL  REVENUE  CODE  SECTION  175(1)(C),
INCLUDING EXPENDITURES RELATED TO THE APPLICATION OF LIME AND  FERTILIZ-
ER,  IMPROVEMENT  OF  DRAINAGE  IN THE CASE OF OPEN AREAS THAT HAVE BEEN
USED FOR AGRICULTURAL PURPOSES AT ANY TIME IN THE PAST, AND EXPENDITURES
RELATED TO THE DECONSTRUCTION AND REMOVAL OF  FENCES,  STREAM  CROSSINGS
AND  NECESSARY  RIPARIAN  BUFFERS  AS  REQUIRED  BY THE SOIL IMPROVEMENT
PROJECT.
  (2) "FARMLAND" SHALL MEAN LAND WHICH, DURING THE TAXABLE YEAR IN WHICH
THE CREDIT IS CLAIMED PURSUANT TO THIS SUBDIVISION, IS ELIGIBLE  FOR  AN
AGRICULTURAL  ASSESSMENT PURSUANT TO ARTICLE TWENTY-FIVE-AA OF THE AGRI-
CULTURE AND MARKETS LAW.
  (3) "SOIL IMPROVEMENT PROJECT" SHALL MEAN THE RESTORATION OF  FARMLAND
FOR  THE  PRODUCTION  OF  AGRICULTURAL  PERENNIAL CROPS, INCLUDING THOSE
CROPS INTENDED FOR ENERGY PRODUCTION PURPOSES, BY  IMPROVING  SUCH  LAND
WHICH HAS NOT BEEN USED IN AGRICULTURAL PRODUCTION FOR TWO OR MORE YEARS
PRIOR TO THE COMPLETION OF SUCH RESTORATION.
  (C)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR A TAXABLE YEAR SHALL REDUCE THE TAX DUE FOR SUCH  YEAR  PURSUANT  TO
THIS ARTICLE, AS REDUCED BY ALL OTHER CREDITS THE TAXPAYER IS AUTHORIZED
TO  DEDUCT  PURSUANT  TO  THIS ARTICLE. IF THE CREDIT ALLOWED UNDER THIS
SUBDIVISION EXCEEDS THE TAX AS SO REDUCED, THE TAXPAYER MAY RECEIVE  AND
THE COMPTROLLER, SUBJECT TO A CERTIFICATE OF THE COMMISSIONER, SHALL PAY
AS AN OVERPAYMENT, WITHOUT INTEREST, THE AMOUNT OF SUCH EXCESS.
  S  3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a new  clause  (xxxiv)  to  read  as
follows:
  (XXXIV) SOIL IMPROVEMENT           AMOUNT OF CREDIT FOR ELIGIBLE
CREDIT FOR FARMLANDS UNDER           EXPENDITURES FOR A SOIL IMPROVEMENT
SUBSECTION (UU)                      PROJECT UNDER SUBDIVISION
                                     FORTY-FIVE OF SECTION
                                     TWO HUNDRED TEN
  S  4. Section 606 of the tax law is amended by adding a new subsection
(uu) to read as follows:
  (UU) SOIL IMPROVEMENT CREDIT FOR FARMLANDS. (1) ALLOWANCE  OF  CREDIT.
FOR  TAXABLE  YEARS  BEGINNING  ON  OR AFTER JANUARY FIRST, TWO THOUSAND
TWELVE, A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED  BY
THIS ARTICLE IN AN AMOUNT EQUAL TO TWENTY-FIVE PERCENT OF THE TAXPAYER'S
ELIGIBLE  EXPENDITURES  DURING  THE  TAX  YEAR  FOR  A  SOIL IMPROVEMENT
PROJECT. PROVIDED,  HOWEVER,  THAT  THE  CREDIT  GRANTED  FOR  ANY  SOIL
IMPROVEMENT  PROJECT  PURSUANT TO THIS SUBSECTION SHALL NOT EXCEED FIFTY
THOUSAND DOLLARS.
  (2) DEFINITIONS. FOR THE PURPOSES OF THIS  SUBSECTION,  THE  FOLLOWING
DEFINITIONS SHALL APPLY:
  (A) "ELIGIBLE EXPENDITURES" SHALL MEAN FEES FOR ARCHITECTURAL, ARCHEO-
LOGICAL,  GEOLOGICAL  AND  ENGINEERING SERVICES; THE COSTS OF DEVELOPING
PLANS AND SPECIFICATIONS; FEES FOR CONSULTANT AND  LEGAL  SERVICES;  AND
ANY  EXPENDITURE  SPECIFIED IN INTERNAL REVENUE CODE SECTION 175 (1)(C),
INCLUDING EXPENDITURES RELATED TO THE APPLICATION OF LIME AND  FERTILIZ-

S. 6598                             3                            A. 9425

ER,  IMPROVEMENT  OF  DRAINAGE  IN THE CASE OF OPEN AREAS THAT HAVE BEEN
USED FOR AGRICULTURAL PURPOSES AT ANY TIME IN THE PAST, AND EXPENDITURES
RELATED TO THE DECONSTRUCTION AND REMOVAL OF  FENCES,  STREAM  CROSSINGS
AND  NECESSARY  RIPARIAN  BUFFERS  AS  REQUIRED  BY THE SOIL IMPROVEMENT
PROJECT.
  (B) "FARMLAND" SHALL MEAN LAND WHICH, DURING THE TAXABLE YEAR IN WHICH
THE CREDIT IS CLAIMED PURSUANT TO THIS SUBSECTION, IS  ELIGIBLE  FOR  AN
AGRICULTURAL  ASSESSMENT PURSUANT TO ARTICLE TWENTY-FIVE-AA OF THE AGRI-
CULTURE AND MARKETS LAW.
  (C) "SOIL IMPROVEMENT PROJECT" SHALL MEAN THE RESTORATION OF  FARMLAND
FOR  THE  PRODUCTION  OF  AGRICULTURAL  PERENNIAL CROPS, INCLUDING THOSE
CROPS INTENDED FOR ENERGY PRODUCTION PURPOSES, BY  IMPROVING  SUCH  LAND
WHICH HAS NOT BEEN USED IN AGRICULTURAL PRODUCTION FOR TWO OR MORE YEARS
PRIOR TO THE COMPLETION OF SUCH RESTORATION.
  (3)  APPLICATION  OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER
THIS SUBSECTION SHALL EXCEED THE  TAXPAYER'S  TAX  FOR  SUCH  YEAR,  THE
TAXPAYER  MAY  RECEIVE  AND THE COMPTROLLER, SUBJECT TO A CERTIFICATE OF
THE COMMISSIONER, SHALL PAY AS AN  OVERPAYMENT,  WITHOUT  INTEREST,  THE
AMOUNT OF SUCH EXCESS.
  S 5. Subsection (b) of section 612 of the tax law is amended by adding
a new paragraph 40 to read as follows:
  (40)  IN THE EVENT THE TAXPAYER CLAIMS THE SOIL IMPROVEMENT CREDIT FOR
FARMLANDS ESTABLISHED PURSUANT TO SUBSECTION (UU) OF SECTION SIX HUNDRED
SIX OF THIS ARTICLE, THE AMOUNT OF ANY EXPENDITURES SPECIFIED IN  INTER-
NAL  REVENUE  CODE SECTION 175(1)(C) THAT THE TAXPAYER DEDUCTED FROM HIS
OR HER FEDERAL GROSS INCOME ON HIS OR HER FEDERAL TAX RETURN FOR THE TAX
YEAR.
  S 6. This act shall take effect immediately.

co-Sponsors

2011-S6598A - Details

See Assembly Version of this Bill:: A9425
Current Committee:: Senate Finance
Law Section:: Tax Law
Laws Affected:: Amd §§208, 210, 606 & 612, Tax L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S4387
2015-2016: S1664

2011-S6598A - Summary

Establishes business franchise and personal income tax credits for expenses of soil improvement projects on farmlands.

2011-S6598A - Sponsor Memo

                                BILL NUMBER:S6598A

TITLE OF BILL:
An act
to amend the tax law, in relation to establishing a business franchise
and personal income tax credit for soil improvement projects upon
farmlands

PURPOSE:
This bill provides business franchise and personal income tax credits
for expenses of soil improvement projects on farmlands.

SUMMARY OF PROVISIONS:
Sections 1 and 5 adds a new subparagraph 5 to section 208, and section
612 (b) of the tax law is amended to provide that any soil
improvement credit must be deducted from the taxpayer's total net
income, or total gross income, on their federal income tax return.

Section 2 through 4 amends the tax law to provide for the allowance of
a soil improvement credit after January 1, 2012 of 25% of eligible
expenditures, up to $50,000, to farmland entitled to an agricultural
assessment under article twenty-five-AA of the agriculture and
markets law during that taxable year.

Eligible expenditures include architectural, archeological, geological
and engineering services, the cost of developing plans and

specifications, consultation and legal services fees, and
expenditures defined in section 175(c) (1) of the internal revenue
code. Soil improvement projects are defined as the restoration of
farmland for the production of agricultural perennial crops,
including crops intended for energy production purposes, provided the
land has not been used in agricultural production for at least two
years prior to the completion of the soil improvement project. The
credit would be refundable.

REVIEW OF EXISTING LAW:
Current law does not contain any tax credits specifically intended to
encourage landowners to make soil improvements necessary to restore
land for the production of agricultural perennial crops, including
those intended for energy production purposes. In addition, current
law does not contain any tax credits specifically intended to
encourage landowners to make necessary farmland improvements.
However, a taxpayer may be entitled to a deduction for some of those
expenses, if the taxpayer is using the property for business purposes.

JUSTIFICATION:
This proposal will provide a one-time State personal income tax
credit, up to $ 50,000, for 25 percent of the capital costs for
specified land improvements designed to restore farmland to active
production of perennial crops, including those intended for energy
production, beginning in the 2012 tax year.

Much more extensive planting of perennial energy crops is necessary to
balance the opportunity that will be presented by next-generation
renewable energy production. New York State lands could be brought
into production for such purposes without impinging on either the


State's livestock industry or its food supply. In addition,
investments in cellulosic ethanol and other advanced green energy
technologies will go to other states if New York does not move to
encourage feedstock production. Failure to bring idle open land back
into production denies the potential for economic development while
continuing to promote the land's use for warehouses, shopping
centers, and low-density housing developments.

There are several million acres of open "farmland" in New York State
that are owned by non-farmers or not actively farmed by farmer owners.
Demographic trends suggest that the non-farmer owned area will
continue to grow at the expense of owner-operated farms. Some of the
land owned by non-farmers is currently rented to farmers, but an even
larger share is found in the tens of thousands of parcels of
"exfarmland" which lie virtually neglected from a land management
perspective, gradually growing up to second-growth forest. An
effective policy to deal with the loss of New York's agricultural
base must include incentives to keep in or return to production,
under sound long-term management practices, farmland that is not
farmer-owned.

The State Constitution charges the people of New York State with
encouraging the development and improvement of agricultural lands for
the production of food and other agricultural products, as well as
providing for the conservation of state soil and water resources.
Agricultural production has become an increasingly competitive
industry, which accounts for farms going out of business and land out
of production. A limited amount of funds are available for long term
agricultural land retention strategies such as purchase of
development rights. At the same time, many farmers are seeking land
to supplement their current land base. Due to competing interests for
the land, depressed farm incomes, and costs of improving the land to
an acceptable level of productivity, farmers are experiencing
difficulty in acquiring additional lands for their operations. This
legislation will provide tax incentives to maintain existing farmland
and restore other land to agricultural biomass production. This, in
turn, will help protect the long-term agricultural base, preserve the
open space benefits, protect water quality and provide economic
development opportunities to economically depressed regions of the
state.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:
None to the State.

EFFECTIVE DATE:
Effective immediately.

2011-S6598A - Bill Text download pdf

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

    S. 6598--A                                            A. 9425--A

                      S E N A T E - A S S E M B L Y

                              March 1, 2012
                               ___________

IN  SENATE -- Introduced by Sens. YOUNG, O'MARA, RITCHIE, VALESKY -- (at
  request of the Legislative Commission  on  Rural  Resources)  --  read
  twice  and  ordered  printed,  and when printed to be committed to the
  Committee on Investigations and  Government  Operations  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

IN  ASSEMBLY  -- Introduced by M. of A. GUNTHER -- Multi-Sponsored by --
  M. of A. BURLING, LIFTON, PALMESANO -- read once and referred  to  the
  Committee  on  Ways  and  Means -- committee discharged, bill amended,
  ordered reprinted as amended and recommitted to said committee

AN ACT to amend the tax law, in  relation  to  establishing  a  business
  franchise and personal income tax credit for soil improvement projects
  upon farmlands

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

  Section 1. Subparagraphs 3 and 4 of paragraph (a) of  subdivision  8-B
of  section 208 of the tax law, as amended by chapter 170 of the laws of
1994, are amended, and a new subparagraph 5 is added to read as follows:
  (3) increased by the net operating loss  deduction  otherwise  allowed
under paragraph (f) of subdivision nine of this section, [and]
  (4)  reduced, for taxable years beginning after nineteen hundred nine-
ty-three, by the alternative net operating loss deduction, as defined in
paragraph (d) of this subdivision[.], AND
  (5) IN THE EVENT THE TAXPAYER CLAIMS THE SOIL IMPROVEMENT  CREDIT  FOR
FARMLANDS  ESTABLISHED PURSUANT TO SUBDIVISION FORTY-FIVE OF SECTION TWO
HUNDRED TEN OF THIS ARTICLE, INCREASED BY THE AMOUNT OF ANY EXPENDITURES
DEFINED IN INTERNAL REVENUE CODE SECTION  175(C)(1)  THAT  THE  TAXPAYER
DEDUCTED FROM ITS TOTAL NET INCOME ON ITS FEDERAL TAX RETURN FOR THE TAX
YEAR.
  S 2. Section 210 of the tax law is amended by adding a new subdivision
45 to read as follows:
  45.  SOIL  IMPROVEMENT  CREDIT FOR FARMLANDS. (A) ALLOWANCE OF CREDIT.
FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND

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

                                                           LBD13593-05-2

S. 6598--A                          2                         A. 9425--A

TWELVE,  A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY
THIS ARTICLE IN AN AMOUNT EQUAL TO TWENTY-FIVE PERCENT OF THE TAXPAYER'S
ELIGIBLE EXPENDITURES  DURING  THE  TAX  YEAR  FOR  A  SOIL  IMPROVEMENT
PROJECT.  PROVIDED,  HOWEVER,  THAT  THE  CREDIT  GRANTED  FOR  ANY SOIL
IMPROVEMENT PROJECT PURSUANT TO THIS SUBDIVISION SHALL NOT EXCEED  FIFTY
THOUSAND DOLLARS.
  (B)  DEFINITIONS.  FOR THE PURPOSES OF THIS SUBDIVISION, THE FOLLOWING
DEFINITIONS SHALL APPLY:
  (1) "ELIGIBLE EXPENDITURES" SHALL MEAN FEES FOR ARCHITECTURAL, ARCHEO-
LOGICAL, GEOLOGICAL AND ENGINEERING SERVICES; THE  COSTS  OF  DEVELOPING
PLANS AND SPECIFICATION; FEES FOR CONSULTANT AND LEGAL SERVICES; AND ANY
EXPENDITURE  DEFINED IN INTERNAL REVENUE CODE SECTION 175(C)(1), INCLUD-
ING EXPENDITURES RELATED TO THE  APPLICATION  OF  LIME  AND  FERTILIZER,
IMPROVEMENT  OF  DRAINAGE  IN THE CASE OF OPEN AREAS THAT HAVE BEEN USED
FOR AGRICULTURAL PURPOSES AT ANY TIME  IN  THE  PAST,  AND  EXPENDITURES
RELATED  TO  THE  DECONSTRUCTION AND REMOVAL OF FENCES, STREAM CROSSINGS
AND NECESSARY RIPARIAN BUFFERS  AS  REQUIRED  BY  THE  SOIL  IMPROVEMENT
PROJECT.
  (2) "FARMLAND" SHALL MEAN LAND WHICH, DURING THE TAXABLE YEAR IN WHICH
THE  CREDIT  IS CLAIMED PURSUANT TO THIS SUBDIVISION, IS ELIGIBLE FOR AN
AGRICULTURAL ASSESSMENT PURSUANT TO ARTICLE TWENTY-FIVE-AA OF THE  AGRI-
CULTURE AND MARKETS LAW.
  (3)  "SOIL IMPROVEMENT PROJECT" SHALL MEAN THE RESTORATION OF FARMLAND
FOR THE PRODUCTION OF  AGRICULTURAL  PERENNIAL  CROPS,  INCLUDING  THOSE
CROPS  INTENDED  FOR  ENERGY PRODUCTION PURPOSES, BY IMPROVING SUCH LAND
WHICH HAS NOT BEEN USED IN AGRICULTURAL PRODUCTION FOR TWO OR MORE YEARS
PRIOR TO THE COMPLETION OF SUCH RESTORATION.
  (C) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
FOR  ANY  TAXABLE  YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE  OF  THIS
SECTION. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CRED-
IT  THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR WILL BE TREATED AS AN OVER-
PAYMENT OF TAX TO  BE  CREDITED  OR  REFUNDED  IN  ACCORDANCE  WITH  THE
PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED,
HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHT-
Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST WILL BE PAID THERE-
ON.
  S  3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a new  clause  (xxxiv)  to  read  as
follows:
  (XXXIV) SOIL IMPROVEMENT           AMOUNT OF CREDIT FOR ELIGIBLE
CREDIT FOR FARMLANDS UNDER           EXPENDITURES FOR A SOIL IMPROVEMENT
SUBSECTION (UU)                      PROJECT UNDER SUBDIVISION
                                     FORTY-FIVE OF SECTION
                                     TWO HUNDRED TEN
  S  4. Section 606 of the tax law is amended by adding a new subsection
(uu) to read as follows:
  (UU) SOIL IMPROVEMENT CREDIT FOR FARMLANDS. (1) ALLOWANCE  OF  CREDIT.
FOR  TAXABLE  YEARS  BEGINNING  ON  OR AFTER JANUARY FIRST, TWO THOUSAND
TWELVE, A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED  BY
THIS ARTICLE IN AN AMOUNT EQUAL TO TWENTY-FIVE PERCENT OF THE TAXPAYER'S
ELIGIBLE  EXPENDITURES  DURING  THE  TAX  YEAR  FOR  A  SOIL IMPROVEMENT
PROJECT. PROVIDED,  HOWEVER,  THAT  THE  CREDIT  GRANTED  FOR  ANY  SOIL
IMPROVEMENT  PROJECT  PURSUANT TO THIS SUBSECTION SHALL NOT EXCEED FIFTY
THOUSAND DOLLARS.

S. 6598--A                          3                         A. 9425--A

  (2) DEFINITIONS. FOR THE PURPOSES OF THIS  SUBSECTION,  THE  FOLLOWING
DEFINITIONS SHALL APPLY:
  (A) "ELIGIBLE EXPENDITURES" SHALL MEAN FEES FOR ARCHITECTURAL, ARCHEO-
LOGICAL,  GEOLOGICAL  AND  ENGINEERING SERVICES; THE COSTS OF DEVELOPING
PLANS AND SPECIFICATIONS; FEES FOR CONSULTANT AND  LEGAL  SERVICES;  AND
ANY  EXPENDITURE  DEFINED  IN  INTERNAL  REVENUE CODE SECTION 175(C)(1),
INCLUDING EXPENDITURES RELATED TO THE APPLICATION OF LIME AND  FERTILIZ-
ER,  IMPROVEMENT  OF  DRAINAGE  IN THE CASE OF OPEN AREAS THAT HAVE BEEN
USED FOR AGRICULTURAL PURPOSES AT ANY TIME IN THE PAST, AND EXPENDITURES
RELATED TO THE DECONSTRUCTION AND REMOVAL OF  FENCES,  STREAM  CROSSINGS
AND  NECESSARY  RIPARIAN  BUFFERS  AS  REQUIRED  BY THE SOIL IMPROVEMENT
PROJECT.
  (B) "FARMLAND" SHALL MEAN LAND WHICH, DURING THE TAXABLE YEAR IN WHICH
THE CREDIT IS CLAIMED PURSUANT TO THIS SUBSECTION, IS  ELIGIBLE  FOR  AN
AGRICULTURAL  ASSESSMENT PURSUANT TO ARTICLE TWENTY-FIVE-AA OF THE AGRI-
CULTURE AND MARKETS LAW.
  (C) "SOIL IMPROVEMENT PROJECT" SHALL MEAN THE RESTORATION OF  FARMLAND
FOR  THE  PRODUCTION  OF  AGRICULTURAL  PERENNIAL CROPS, INCLUDING THOSE
CROPS INTENDED FOR ENERGY PRODUCTION PURPOSES, BY  IMPROVING  SUCH  LAND
WHICH HAS NOT BEEN USED IN AGRICULTURAL PRODUCTION FOR TWO OR MORE YEARS
PRIOR TO THE COMPLETION OF SUCH RESTORATION.
  (3)  APPLICATION  OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER
THIS SUBSECTION SHALL EXCEED THE  TAXPAYER'S  TAX  FOR  SUCH  YEAR,  THE
TAXPAYER  MAY  RECEIVE  AND THE COMPTROLLER, SUBJECT TO A CERTIFICATE OF
THE COMMISSIONER, SHALL PAY AS AN  OVERPAYMENT,  WITHOUT  INTEREST,  THE
AMOUNT OF SUCH EXCESS.
  S 5. Subsection (c) of section 615 of the tax law is amended by adding
a new paragraph 9 to read as follows:
  (9)  IN  THE EVENT THE TAXPAYER CLAIMS THE SOIL IMPROVEMENT CREDIT FOR
FARMLANDS ESTABLISHED PURSUANT TO SUBSECTION (UU) OF SECTION SIX HUNDRED
SIX OF THIS ARTICLE, THE AMOUNT OF ANY EXPENDITURES DEFINED IN  INTERNAL
REVENUE  CODE  SECTION  175(C)(1) THAT THE TAXPAYER DEDUCTED FROM HIS OR
HER FEDERAL GROSS INCOME ON HIS OR HER FEDERAL TAX RETURN  FOR  THE  TAX
YEAR.
  S 6. This act shall take effect immediately.

co-Sponsors

2011-S6598B (ACTIVE) - Details

See Assembly Version of this Bill:: A9425
Current Committee:: Senate Finance
Law Section:: Tax Law
Laws Affected:: Amd §§208, 210, 606 & 612, Tax L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S4387
2015-2016: S1664

2011-S6598B (ACTIVE) - Summary

Establishes business franchise and personal income tax credits for expenses of soil improvement projects on farmlands.

2011-S6598B (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S6598B

TITLE OF BILL:
An act
to amend the tax law, in relation to establishing a business franchise
and personal income tax credit for soil improvement projects upon
farmlands

PURPOSE:
This bill provides business franchise and personal income tax credits
for expenses of soil improvement projects on farmlands.

SUMMARY OF PROVISIONS:
Section 1 adds a new paragraph (r) to subdivision 9, section 208 of
the tax law, and section 612 (b) of the tax law is amended to provide
that any soil improvement credit must be deducted from the taxpayer's
total net income, or total gross income, on their federal income tax
return.

Section 2 through 4 amends the tax law to provide for the allowance of
a soil improvement credit after January 1, 2012 of 25% of eligible
expenditures, up to $50,000, to farmland entitled to an agricultural
assessment under article twenty-five-AA of the agriculture and
markets law during that taxable year.

Eligible expenditures include architectural, archeological, geological

and engineering services, the cost of developing plans and
specifications, consultation and legal services fees, and expenditures
defined in section 175(c) (1) of the internal revenue code. Soil
improvement projects are defined as the restoration of farmland for
the production of agricultural perennial crops, including crops
intended for energy production purposes, provided the land has not
been used in agricultural production for at least two years prior to
the initiation of soil improvement project. The credit would be
refundable.

REVIEW OF EXISTING LAW:
Current law does not contain any tax credits specifically intended to
encourage landowners to make soil improvements necessary to restore
land for the production of agricultural perennial crops, including
those intended for energy production purposes. In addition, current
law does not contain any tax credits specifically intended to
encourage landowners to make necessary farmland improvements.
However, a taxpayer may be entitled to a deduction for some of those
expenses, if the taxpayer is using the property for business purposes.

JUSTIFICATION:
This proposal will provide a one-time State personal income tax
credit, up to $50,000, for 25 percent of the capital costs for
specified land improvements designed to restore farmland to active
production of

perennial crops, including those intended for energy production,
beginning in the 2012 tax year.

Much more extensive planting of perennial energy crops is necessary to
balance the opportunity that will be presented by next-generation
renewable energy production. New York State lands could be brought
into production for such purposes without impinging on either the
State's livestock industry or its food supply. In addition,
investments in cellulosic ethanol and other advanced green energy
technologies will go to other states if New York does not move to
encourage feedstock production. Failure to bring idle open land back
into production denies the potential for economic development while
continuing to promote the land's use for warehouses, shopping
centers, and low-density housing developments.

There are several million acres of open "farmland" in New York State
that are owned by non-farmers or not actively farmed by farmer owners.
Demographic trends suggest that the non-farmer owned area will
continue to grow at the expense of owner-operated farms. Some of the
land owned by non-farmers is currently rented to farmers, but an even
larger share is found in the tens of thousands of parcels of
"exfarmland" which lie virtually neglected from a land management
perspective, gradually growing up to second-growth forest. An
effective policy to deal with the loss of New York's agricultural
base must include incentives to keep in or return to production,
under sound long-term management practices, farmland that is not
farmer-owned.

The State Constitution charges the people of New York State with
encouraging the development and improvement of agricultural lands for
the production of food and other agricultural products, as well as
providing for the conservation of state soil and water resources.
Agricultural production has become an increasingly competitive
industry, which accounts for farms going out of business and land out
of production. A limited amount of funds are available for long term
agricultural land retention strategies such as purchase of
development rights. At the same time, many farmers are seeking land
to supplement their current land base. Due to competing interests for
the land, depressed farm incomes, and costs of improving the land to
an acceptable level of productivity, farmers are experiencing
difficulty in acquiring additional lands for their operations. This
legislation will provide tax incentives to maintain existing farmland
and restore other land to agricultural biomass production. This, in
turn, will help protect the long-term agricultural base, preserve the
open space benefits, protect water quality and provide economic
development opportunities to economically depressed regions of the
state.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:

None to the State.

EFFECTIVE DATE:
Effective immediately.

2011-S6598B (ACTIVE) - Bill Text download pdf

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

    S. 6598--B                                            A. 9425--B

                      S E N A T E - A S S E M B L Y

                              March 1, 2012
                               ___________

IN  SENATE -- Introduced by Sens. YOUNG, O'MARA, RITCHIE, VALESKY -- (at
  request of the Legislative Commission  on  Rural  Resources)  --  read
  twice  and  ordered  printed,  and when printed to be committed to the
  Committee on Investigations and  Government  Operations  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to  said  committee  --  reported  favorably  from  said committee and
  committed to the Committee on Finance --  committee  discharged,  bill
  amended,  ordered reprinted as amended and recommitted to said commit-
  tee

IN ASSEMBLY -- Introduced by M. of A. GUNTHER -- Multi-Sponsored  by  --
  M.  of  A. BURLING, LIFTON, PALMESANO -- read once and referred to the
  Committee on Ways and Means --  committee  discharged,  bill  amended,
  ordered  reprinted  as  amended  and  recommitted to said committee --
  again reported from said committee with amendments, ordered  reprinted
  as amended and recommitted to said committee

AN  ACT  to  amend  the  tax law, in relation to establishing a business
  franchise and personal income tax credit for soil improvement projects
  upon farmlands

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

  Section  1.  Subdivision 9 of section 208 of the tax law is amended by
adding a new paragraph (r) to read as follows:
  (R) IN THE EVENT THE TAXPAYER CLAIMS THE SOIL IMPROVEMENT  CREDIT  FOR
FARMLANDS  ESTABLISHED PURSUANT TO SUBDIVISION FORTY-FIVE OF SECTION TWO
HUNDRED TEN OF THIS ARTICLE, ENTIRE NET INCOME SHALL BE INCREASED BY THE
AMOUNT OF ANY EXPENDITURES DEFINED  IN  INTERNAL  REVENUE  CODE  SECTION
175(C)(1)  THAT  THE  TAXPAYER DEDUCTED FROM ITS TOTAL NET INCOME ON ITS
FEDERAL TAX RETURN FOR THE TAX YEAR.
  S 2. Section 210 of the tax law is amended by adding a new subdivision
45 to read as follows:
  45. SOIL IMPROVEMENT CREDIT FOR FARMLANDS. (A)  ALLOWANCE  OF  CREDIT.
FOR  TAXABLE  YEARS  BEGINNING  ON  OR AFTER JANUARY FIRST, TWO THOUSAND
TWELVE, A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED  BY

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

                                                           LBD13593-06-2

S. 6598--B                          2                         A. 9425--B

THIS ARTICLE IN AN AMOUNT EQUAL TO TWENTY-FIVE PERCENT OF THE TAXPAYER'S
ELIGIBLE  EXPENDITURES  DURING  THE  TAX  YEAR  FOR  A  SOIL IMPROVEMENT
PROJECT. PROVIDED,  HOWEVER,  THAT  THE  CREDIT  GRANTED  FOR  ANY  SOIL
IMPROVEMENT  PROJECT PURSUANT TO THIS SUBDIVISION SHALL NOT EXCEED FIFTY
THOUSAND DOLLARS.
  (B) DEFINITIONS. FOR THE PURPOSES OF THIS SUBDIVISION,  THE  FOLLOWING
DEFINITIONS SHALL APPLY:
  (1) "ELIGIBLE EXPENDITURES" SHALL MEAN FEES FOR ARCHITECTURAL, ARCHEO-
LOGICAL,  GEOLOGICAL  AND  ENGINEERING SERVICES; THE COSTS OF DEVELOPING
PLANS AND SPECIFICATION; FEES FOR CONSULTANT AND LEGAL SERVICES; AND ANY
EXPENDITURE DEFINED IN INTERNAL REVENUE CODE SECTION 175(C)(1),  INCLUD-
ING  EXPENDITURES  RELATED  TO  THE  APPLICATION OF LIME AND FERTILIZER,
IMPROVEMENT OF DRAINAGE IN THE CASE OF OPEN AREAS THAT  HAVE  BEEN  USED
FOR  AGRICULTURAL  PURPOSES  AT  ANY  TIME IN THE PAST, AND EXPENDITURES
RELATED TO THE DECONSTRUCTION AND REMOVAL OF  FENCES,  STREAM  CROSSINGS
AND  NECESSARY  RIPARIAN  BUFFERS  AS  REQUIRED  BY THE SOIL IMPROVEMENT
PROJECT.
  (2) "FARMLAND" SHALL MEAN LAND WHICH, DURING THE TAXABLE YEAR IN WHICH
THE CREDIT IS CLAIMED PURSUANT TO THIS SUBDIVISION, IS ELIGIBLE  FOR  AN
AGRICULTURAL  ASSESSMENT PURSUANT TO ARTICLE TWENTY-FIVE-AA OF THE AGRI-
CULTURE AND MARKETS LAW.
  (3) "SOIL IMPROVEMENT PROJECT" SHALL MEAN THE RESTORATION OF  FARMLAND
FOR  THE  PRODUCTION  OF  AGRICULTURAL  PERENNIAL CROPS, INCLUDING THOSE
CROPS INTENDED FOR ENERGY PRODUCTION PURPOSES, BY  IMPROVING  SUCH  LAND
WHICH HAS NOT BEEN USED IN AGRICULTURAL PRODUCTION FOR TWO OR MORE YEARS
PRIOR TO THE INITIATION OF SUCH RESTORATION.
  (C)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH  YEAR  TO  LESS
THAN  THE  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF THIS
SECTION. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CRED-
IT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR WILL BE TREATED AS AN  OVER-
PAYMENT  OF  TAX  TO  BE  CREDITED  OR  REFUNDED  IN ACCORDANCE WITH THE
PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED,
HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHT-
Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST WILL BE PAID THERE-
ON.
  S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax  law  is  amended by adding a new clause (xxxiv) to read as
follows:
  (XXXIV) SOIL IMPROVEMENT           AMOUNT OF CREDIT FOR ELIGIBLE
CREDIT FOR FARMLANDS UNDER           EXPENDITURES FOR A SOIL IMPROVEMENT
SUBSECTION (UU)                      PROJECT UNDER SUBDIVISION
                                     FORTY-FIVE OF SECTION
                                     TWO HUNDRED TEN
  S 4. Section 606 of the tax law is amended by adding a new  subsection
(uu) to read as follows:
  (UU)  SOIL  IMPROVEMENT CREDIT FOR FARMLANDS. (1) ALLOWANCE OF CREDIT.
FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND
TWELVE,  A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY
THIS ARTICLE IN AN AMOUNT EQUAL TO TWENTY-FIVE PERCENT OF THE TAXPAYER'S
ELIGIBLE EXPENDITURES  DURING  THE  TAX  YEAR  FOR  A  SOIL  IMPROVEMENT
PROJECT.  PROVIDED,  HOWEVER,  THAT  THE  CREDIT  GRANTED  FOR  ANY SOIL
IMPROVEMENT PROJECT PURSUANT TO THIS SUBSECTION SHALL NOT  EXCEED  FIFTY
THOUSAND DOLLARS.

S. 6598--B                          3                         A. 9425--B

  (2)  DEFINITIONS.  FOR  THE PURPOSES OF THIS SUBSECTION, THE FOLLOWING
DEFINITIONS SHALL APPLY:
  (A) "ELIGIBLE EXPENDITURES" SHALL MEAN FEES FOR ARCHITECTURAL, ARCHEO-
LOGICAL,  GEOLOGICAL  AND  ENGINEERING SERVICES; THE COSTS OF DEVELOPING
PLANS AND SPECIFICATIONS; FEES FOR CONSULTANT AND  LEGAL  SERVICES;  AND
ANY  EXPENDITURE  DEFINED  IN  INTERNAL  REVENUE CODE SECTION 175(C)(1),
INCLUDING EXPENDITURES RELATED TO THE APPLICATION OF LIME AND  FERTILIZ-
ER,  IMPROVEMENT  OF  DRAINAGE  IN THE CASE OF OPEN AREAS THAT HAVE BEEN
USED FOR AGRICULTURAL PURPOSES AT ANY TIME IN THE PAST, AND EXPENDITURES
RELATED TO THE DECONSTRUCTION AND REMOVAL OF  FENCES,  STREAM  CROSSINGS
AND  NECESSARY  RIPARIAN  BUFFERS  AS  REQUIRED  BY THE SOIL IMPROVEMENT
PROJECT.
  (B) "FARMLAND" SHALL MEAN LAND WHICH, DURING THE TAXABLE YEAR IN WHICH
THE CREDIT IS CLAIMED PURSUANT TO THIS SUBSECTION, IS  ELIGIBLE  FOR  AN
AGRICULTURAL  ASSESSMENT PURSUANT TO ARTICLE TWENTY-FIVE-AA OF THE AGRI-
CULTURE AND MARKETS LAW.
  (C) "SOIL IMPROVEMENT PROJECT" SHALL MEAN THE RESTORATION OF  FARMLAND
FOR  THE  PRODUCTION  OF  AGRICULTURAL  PERENNIAL CROPS, INCLUDING THOSE
CROPS INTENDED FOR ENERGY PRODUCTION PURPOSES, BY  IMPROVING  SUCH  LAND
WHICH HAS NOT BEEN USED IN AGRICULTURAL PRODUCTION FOR TWO OR MORE YEARS
PRIOR TO THE COMPLETION OF SUCH RESTORATION.
  (3)  APPLICATION  OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER
THIS SUBSECTION SHALL EXCEED THE  TAXPAYER'S  TAX  FOR  SUCH  YEAR,  THE
TAXPAYER  MAY  RECEIVE  AND THE COMPTROLLER, SUBJECT TO A CERTIFICATE OF
THE COMMISSIONER, SHALL PAY AS AN  OVERPAYMENT,  WITHOUT  INTEREST,  THE
AMOUNT OF SUCH EXCESS.
  S  5.  Paragraph 4 of subsection (b) of section 612 of the tax law, as
amended by chapter 406 of the laws  of  1990,  is  amended  to  read  as
follows:
  (4)  Interest  on  indebtedness  incurred  or continued to purchase or
carry obligations or securities the interest on which is exempt from tax
under this article, to the  extent  deductible  in  determining  federal
adjusted  gross  income;  PROVIDED THAT IN THE EVENT THE TAXPAYER CLAIMS
THE SOIL  IMPROVEMENT  CREDIT  FOR  FARMLANDS  ESTABLISHED  PURSUANT  TO
SUBSECTION  (UU)  OF SECTION SIX HUNDRED SIX OF THIS ARTICLE, THE AMOUNT
OF ANY EXPENDITURES DEFINED IN INTERNAL REVENUE CODE  SECTION  175(C)(1)
THAT  THE  TAXPAYER DEDUCTED FROM HIS OR HER FEDERAL GROSS INCOME ON HIS
OR HER FEDERAL TAX RETURN FOR THE TAX YEAR.
  S 6. This act shall take effect immediately and shall apply to  resto-
ration projects initiated on or after such date.

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