S T A T E O F N E W Y O R K
________________________________________________________________________
7774--A
2013-2014 Regular Sessions
I N A S S E M B L Y
June 4, 2013
___________
Introduced by M. of A. SANTABARBARA -- read once and referred to the
Committee on Ways and Means -- recommitted to the Committee on Ways
and Means in accordance with Assembly Rule 3, sec. 2 -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the tax law, in relation to establishing business fran-
chise and personal income tax credits for downtown revitalization zone
investments; and providing for the repeal of certain provisions upon
expiration thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 210 of the tax law is amended by adding a new
subdivision 50 to read as follows:
50. DOWNTOWN REVITALIZATION ZONE INVESTMENT TAX CREDIT. (A) A TAXPAYER
SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED,
AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR THE DEVELOPMENT TO EXISTING
DOWNTOWN ZONES INCLUDING, BUT NOT LIMITED TO, THE QUALIFIED PURCHASE OF
BUILDINGS AND QUALIFIED REHABILITATION EXPENDITURES OF BUILDINGS IN SUCH
DOWNTOWN REVITALIZATION ZONES. THE AMOUNT OF THE CREDIT SHALL BE TWENTY
PERCENT OF THE QUALIFIED PURCHASE AND QUALIFIED REHABILITATION EXPENDI-
TURES OF ANY BUILDINGS AND REHABILITATIONS WITH SUCH CREDIT NOT EXCEED-
ING THE AMOUNT SET FORTH IN PARAGRAPH (D) OF THIS SUBDIVISION.
(B) FOR THE PURPOSE OF THIS SUBDIVISION, THE TERM "QUALIFIED PURCHASE"
SHALL MEAN THE COST OR OTHER BASIS FOR FEDERAL INCOME TAX PURPOSES OF
ACQUISITION COST OF BUILDING. THE TERM "QUALIFIED REHABILITATION EXPEND-
ITURES" SHALL MEAN QUALIFIED EXPENDITURES AS DEFINED IN SECTION 47
(C)(2)(A) OF THE INTERNAL REVENUE CODE WITHOUT REGARD TO CLAUSE (II) IN
SUCH SECTION 47(C)(2)(A).
(C) FOR THE PURPOSE OF THIS SUBDIVISION, THE TERM "DOWNTOWN REVITALI-
ZATION ZONE" SHALL MEAN AN AREA: (1) THAT HAS EXPERIENCED SUSTAINED
PHYSICAL DETERIORATION, DECAY, NEGLECT OR DISINVESTMENT; (2) THAT HAS A
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11142-02-4
A. 7774--A 2
NUMBER OF SUBSTANDARD BUILDINGS OR VACANT RESIDENTIAL COMMERCIAL UNITS;
OR (3) IN WHICH MORE THAN FIFTY PERCENT OF THE RESIDENTS ARE PERSONS
WHOSE INCOME DOES NOT EXCEED NINETY PERCENT OF THE AREA MEDIAN INCOME
FOR THE COUNTY OR METROPOLITAN STATISTICAL AREA IN WHICH THE PROJECT IS
LOCATED OR WHICH IS DESIGNATED BY A STATE OR FEDERAL AGENCY TO BE ELIGI-
BLE FOR A COMMUNITY ECONOMIC DEVELOPMENT PROGRAM.
(D) THE SUM OF ALL TAX CREDITS GRANTED PURSUANT TO THE PROVISIONS OF
THIS SUBDIVISION SHALL NOT EXCEED FIVE HUNDRED THOUSAND DOLLARS FOR ANY
ONE TAXPAYER INCLUDING SUCH PARTY'S AFFILIATES AND RELATED ENTITIES.
(E) MAXIMUM AMOUNT OF CREDITS. (1) THE AGGREGATE AMOUNT OF TAX CREDITS
ALLOWED UNDER THIS SUBDIVISION, IN ANY TAXABLE YEAR SHALL BE TEN MILLION
DOLLARS. SUCH AGGREGATE AMOUNT OF CREDITS SHALL BE ALLOCATED BY THE
DEPARTMENT AMONG TAXPAYERS IN ORDER OF PRIORITY BASED UPON THE DATE OF
FILING AN APPLICATION FOR ALLOCATION OF DOWNTOWN REVITALIZATION ZONE
INVESTMENT TAX CREDITS WITH SUCH DEPARTMENT. IF THE TOTAL AMOUNT OF
ALLOCATED CREDITS APPLIED FOR IN ANY PARTICULAR YEAR EXCEEDS THE AGGRE-
GATE AMOUNT OF TAX CREDITS ALLOWED FOR SUCH YEAR UNDER THIS SECTION,
SUCH EXCESS SHALL BE TREATED AS HAVING BEEN APPLIED FOR ON THE FIRST DAY
OF THE SUBSEQUENT YEAR.
(2) THE COMMISSIONER SHALL PROMULGATE REGULATIONS BY DECEMBER THIRTY-
FIRST, TWO THOUSAND FOURTEEN TO ESTABLISH PROCEDURES FOR THE ALLOCATION
OF TAX CREDITS AS REQUIRED. SUCH RULES AND REGULATIONS SHALL INCLUDE
PROVISIONS DESCRIBING THE APPLICATION PROCESS, THE DUE DATES FOR SUCH
APPLICATIONS, THE STANDARDS WHICH SHALL BE USED TO EVALUATE THE APPLICA-
TIONS, THE DOCUMENTATION THAT WILL BE PROVIDED TO TAXPAYERS TO SUBSTAN-
TIATE TO THE DEPARTMENT THE AMOUNT OF TAX CREDITS ALLOCATED TO SUCH
TAXPAYERS, AND SUCH OTHER PROVISIONS AS DEEMED NECESSARY AND APPROPRI-
ATE. NOTWITHSTANDING ANY OTHER PROVISIONS TO THE CONTRARY IN THE STATE
ADMINISTRATIVE PROCEDURE ACT, SUCH RULES AND REGULATIONS MAY BE ADOPTED
ON AN EMERGENCY BASIS IF NECESSARY TO MEET SUCH DECEMBER THIRTY-FIRST,
TWO THOUSAND FOURTEEN DEADLINE.
(F) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF THIS
SECTION. PROVIDED, HOWEVER, THAT IF THE AMOUNT OF THE CREDIT ALLOWABLE
UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH
AMOUNT, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CRED-
ITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOU-
SAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED FURTHER, THE PROVISIONS OF
SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
S 2. Section 210-B of the tax law is amended by adding a new subdivi-
sion 49 to read as follows:
49. DOWNTOWN REVITALIZATION ZONE INVESTMENT TAX CREDIT. (A) A TAXPAYER
SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED,
AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR THE DEVELOPMENT TO EXISTING
DOWNTOWN ZONES INCLUDING, BUT NOT LIMITED TO, THE QUALIFIED PURCHASE OF
BUILDINGS AND QUALIFIED REHABILITATION EXPENDITURES OF BUILDINGS IN SUCH
DOWNTOWN REVITALIZATION ZONES. THE AMOUNT OF THE CREDIT SHALL BE TWENTY
PERCENT OF THE QUALIFIED PURCHASE AND QUALIFIED REHABILITATION EXPENDI-
TURES OF ANY BUILDINGS AND REHABILITATIONS WITH SUCH CREDIT NOT EXCEED-
ING THE AMOUNT SET FORTH IN PARAGRAPH (D) OF THIS SUBDIVISION.
(B) FOR THE PURPOSE OF THIS SUBDIVISION, THE TERM "QUALIFIED PURCHASE"
SHALL MEAN THE COST OR OTHER BASIS FOR FEDERAL INCOME TAX PURPOSES OF
ACQUISITION COST OF BUILDING. THE TERM "QUALIFIED REHABILITATION EXPEND-
ITURES" SHALL MEAN QUALIFIED EXPENDITURES AS DEFINED IN SECTION
A. 7774--A 3
47(C)(2)(A) OF THE INTERNAL REVENUE CODE WITHOUT REGARD TO CLAUSE (II)
IN SUCH SECTION 47(C)(2)(A).
(C) FOR THE PURPOSE OF THIS SUBDIVISION, THE TERM "DOWNTOWN REVITALI-
ZATION ZONE" SHALL MEAN AN AREA: (1) THAT HAS EXPERIENCED SUSTAINED
PHYSICAL DETERIORATION, DECAY, NEGLECT OR DISINVESTMENT; (2) THAT HAS A
NUMBER OF SUBSTANDARD BUILDINGS OR VACANT RESIDENTIAL COMMERCIAL UNITS;
OR (3) IN WHICH MORE THAN FIFTY PERCENT OF THE RESIDENTS ARE PERSONS
WHOSE INCOME DOES NOT EXCEED NINETY PERCENT OF THE AREA MEDIAN INCOME
FOR THE COUNTY OR METROPOLITAN STATISTICAL AREA IN WHICH THE PROJECT IS
LOCATED OR WHICH IS DESIGNATED BY A STATE OR FEDERAL AGENCY TO BE ELIGI-
BLE FOR A COMMUNITY ECONOMIC DEVELOPMENT PROGRAM.
(D) THE SUM OF ALL TAX CREDITS GRANTED PURSUANT TO THE PROVISIONS OF
THIS SUBDIVISION SHALL NOT EXCEED FIVE HUNDRED THOUSAND DOLLARS FOR ANY
ONE TAXPAYER INCLUDING SUCH PARTY'S AFFILIATES AND RELATED ENTITIES.
(E) MAXIMUM AMOUNT OF CREDITS. (1) THE AGGREGATE AMOUNT OF TAX CREDITS
ALLOWED UNDER THIS SUBDIVISION, IN ANY TAXABLE YEAR SHALL BE TEN MILLION
DOLLARS. SUCH AGGREGATE AMOUNT OF CREDITS SHALL BE ALLOCATED BY THE
DEPARTMENT AMONG TAXPAYERS IN ORDER OF PRIORITY BASED UPON THE DATE OF
FILING AN APPLICATION FOR ALLOCATION OF DOWNTOWN REVITALIZATION ZONE
INVESTMENT TAX CREDITS WITH SUCH DEPARTMENT. IF THE TOTAL AMOUNT OF
ALLOCATED CREDITS APPLIED FOR IN ANY PARTICULAR YEAR EXCEEDS THE AGGRE-
GATE AMOUNT OF TAX CREDITS ALLOWED FOR SUCH YEAR UNDER THIS SECTION,
SUCH EXCESS SHALL BE TREATED AS HAVING BEEN APPLIED FOR ON THE FIRST DAY
OF THE SUBSEQUENT YEAR.
(2) THE COMMISSIONER SHALL PROMULGATE REGULATIONS BY DECEMBER THIRTY-
FIRST, TWO THOUSAND FOURTEEN TO ESTABLISH PROCEDURES FOR THE ALLOCATION
OF TAX CREDITS AS REQUIRED. SUCH RULES AND REGULATIONS SHALL INCLUDE
PROVISIONS DESCRIBING THE APPLICATION PROCESS, THE DUE DATES FOR SUCH
APPLICATIONS, THE STANDARDS WHICH SHALL BE USED TO EVALUATE THE APPLICA-
TIONS, THE DOCUMENTATION THAT WILL BE PROVIDED TO TAXPAYERS TO SUBSTAN-
TIATE TO THE DEPARTMENT THE AMOUNT OF TAX CREDITS ALLOCATED TO SUCH
TAXPAYERS, AND SUCH OTHER PROVISIONS AS DEEMED NECESSARY AND APPROPRI-
ATE. NOTWITHSTANDING ANY OTHER PROVISIONS TO THE CONTRARY IN THE STATE
ADMINISTRATIVE PROCEDURE ACT, SUCH RULES AND REGULATIONS MAY BE ADOPTED
ON AN EMERGENCY BASIS IF NECESSARY TO MEET SUCH DECEMBER THIRTY-FIRST,
TWO THOUSAND FOURTEEN DEADLINE.
(F) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS CHAPTER. PROVIDED, HOWEVER, THAT IF THE
AMOUNT OF THE CREDIT ALLOWABLE UNDER SUBDIVISION ONE OF SECTION TWO
HUNDRED TEN FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, THE
EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND
EIGHTY-SIX OF THIS CHAPTER. PROVIDED FURTHER, THE PROVISIONS OF
SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
S 3. Section 606 of the tax law is amended by adding a new subsection
(ccc) to read as follows:
(CCC) DOWNTOWN REVITALIZATION ZONE INVESTMENT TAX CREDIT. (1) A
TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS HEREINAFTER
PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR THE DEVELOPMENT TO
EXISTING DOWNTOWN ZONES INCLUDING, BUT NOT LIMITED TO, THE QUALIFIED
PURCHASE OF BUILDINGS AND QUALIFIED REHABILITATION EXPENDITURES OF
BUILDINGS IN SUCH DOWNTOWN REVITALIZATION ZONES. THE AMOUNT OF THE CRED-
IT SHALL BE TWENTY PERCENT OF THE QUALIFIED PURCHASE AND QUALIFIED REHA-
A. 7774--A 4
BILITATION EXPENDITURES OF ANY BUILDINGS AND REHABILITATIONS WITH SUCH
CREDIT NOT EXCEEDING THE AMOUNT SET FORTH IN PARAGRAPH FOUR OF THIS
SUBSECTION.
(2) FOR THE PURPOSE OF THIS SUBSECTION, THE TERM "QUALIFIED PURCHASE"
SHALL MEAN THE COST OR OTHER BASIS FOR FEDERAL INCOME TAX PURPOSES OF
ACQUISITION COST OF BUILDING. THE TERM, "QUALIFIED REHABILITATION
EXPENDITURES" SHALL MEAN QUALIFIED EXPENDITURES AS DEFINED IN SECTION
47(C)(2)(A) OF THE INTERNAL REVENUE CODE WITHOUT REGARD TO CLAUSE (II)
IN SUCH SECTION 47(C)(2)(A).
(3) FOR THE PURPOSE OF THIS SUBSECTION, THE TERM "DOWNTOWN REVITALIZA-
TION ZONE" SHALL MEAN AN AREA: (A) THAT HAS EXPERIENCED SUSTAINED PHYS-
ICAL DETERIORATION, DECAY, NEGLECT OR DISINVESTMENT; (B) THAT HAS A
NUMBER OF SUBSTANDARD BUILDINGS OR VACANT RESIDENTIAL COMMERCIAL UNITS;
OR (C) IN WHICH MORE THAN FIFTY PERCENT OF THE RESIDENTS ARE PERSONS
WHOSE INCOME DOES NOT EXCEED NINETY PERCENT OF THE AREA MEDIAN INCOME
FOR THE COUNTY OR METROPOLITAN STATISTICAL AREA IN WHICH THE PROJECT IS
LOCATED OR WHICH IS DESIGNATED BY A STATE OR FEDERAL AGENCY TO BE ELIGI-
BLE FOR A COMMUNITY ECONOMIC DEVELOPMENT PROGRAM.
(4) THE SUM OF ALL TAX CREDITS GRANTED PURSUANT TO THE PROVISIONS OF
THIS SUBSECTION SHALL NOT EXCEED FIVE HUNDRED THOUSAND DOLLARS FOR ANY
ONE TAXPAYER INCLUDING SUCH PARTY'S AFFILIATES AND RELATED ENTITIES.
(5) MAXIMUM AMOUNT OF CREDITS. (A) THE AGGREGATE AMOUNT OF TAX CREDITS
ALLOWED UNDER THIS SUBSECTION IN ANY TAXABLE YEAR SHALL BE TEN MILLION
DOLLARS. SUCH AGGREGATE AMOUNT OF CREDITS SHALL BE ALLOCATED BY THE
DEPARTMENT AMONG TAXPAYERS IN ORDER OF PRIORITY BASED UPON THE DATE OF
FILING AN APPLICATION OF DOWNTOWN REVITALIZATION ZONE INVESTMENT TAX
CREDITS WITH SUCH DEPARTMENT. IF THE TOTAL AMOUNT OF ALLOCATED CREDITS
APPLIED FOR IN ANY PARTICULAR YEAR EXCEEDS THE AGGREGATE AMOUNT OF TAX
CREDITS ALLOWED FOR SUCH YEAR UNDER THIS SECTION, SUCH EXCESS SHALL BE
TREATED AS HAVING BEEN APPLIED FOR ON THE FIRST DAY OF THE SUBSEQUENT
YEAR.
(B) THE COMMISSIONER SHALL PROMULGATE REGULATIONS BY DECEMBER THIRTY-
FIRST, TWO THOUSAND FOURTEEN TO ESTABLISH PROCEDURES FOR THE ALLOCATION
OF TAX CREDITS AS REQUIRED. SUCH RULES AND REGULATIONS SHALL INCLUDE
PROVISIONS DESCRIBING THE APPLICATION PROCESS, THE DUE DATES FOR SUCH
APPLICATIONS, THE STANDARDS WHICH SHALL BE USED TO EVALUATE THE APPLICA-
TIONS, THE DOCUMENTATION THAT WILL BE PROVIDED TO TAXPAYERS TO SUBSTAN-
TIATE TO THE DEPARTMENT THE AMOUNT OF TAX CREDITS ALLOCATED TO SUCH
TAXPAYERS, AND SUCH OTHER PROVISIONS AS DEEMED NECESSARY AND APPROPRI-
ATE. NOTWITHSTANDING ANY OTHER PROVISIONS TO THE CONTRARY IN THE STATE
ADMINISTRATIVE PROCEDURE ACT, SUCH RULES AND REGULATIONS MAY BE ADOPTED
ON AN EMERGENCY BASIS IF NECESSARY TO MEET SUCH DECEMBER THIRTY-FIRST,
TWO THOUSAND FOURTEEN DEADLINE.
(6) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER
THIS SUBSECTION EXCEEDS THE TAXPAYER'S TAX FOR THE TAXABLE YEAR, ANY
AMOUNT OF CREDIT NOT DEDUCTIBLE IN THAT TAXABLE YEAR WILL 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, NO INTEREST WILL BE PAID THEREON. A TAXPAYER THAT IS A PARTNER
IN A PARTNERSHIP, MEMBER OF A LIMITED LIABILITY COMPANY OR A SHAREHOLDER
OF S CORPORATION SHALL ONLY BE ALLOWED ITS PRO RATA SHARE OF THE CREDIT
EARNED BY SUCH AN ENTITY.
S 4. 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:
(XLI) DOWNTOWN REVITALIZATION AMOUNT OF THE CREDIT UNDER
A. 7774--A 5
ZONE INVESTMENT TAX CREDIT UNDER SUBDIVISION FIFTY OF SECTION
SUBSECTION (CCC) TWO HUNDRED TEN
S 5. 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:
(XLI) DOWNTOWN REVITALIZATION AMOUNT OF THE CREDIT UNDER
ZONE INVESTMENT TAX CREDIT SUBDIVISION FORTY-NINE OF SECTION
UNDER SUBSECTION (CCC) TWO HUNDRED TEN-B
S 6. This act shall take effect immediately; provided, however, that:
(a) sections one, three, and four of this act shall take effect on the
one hundred eightieth day after this act shall have become a law;
(b) sections one and four of this act shall expire and be deemed
repealed upon the effective date of section 17 of part A of chapter 59
of the laws of 2014, when upon such date sections two and five of this
act shall take effect; and
(c) the commissioner of taxation and finance shall promulgate any
rules and regulations necessary for the timely implementation of this
act on or before the effective date of sections one, three and four of
this act.