S T A T E O F N E W Y O R K
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2518--A
2015-2016 Regular Sessions
I N A S S E M B L Y
January 16, 2015
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Introduced by M. of A. SANTABARBARA -- 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 business fran-
chise and personal income tax credits for upstate reinvestment zones;
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-B of the tax law is amended by adding a new
subdivision 51 to read as follows:
51. UPSTATE REINVESTMENT ZONE 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 UPSTATE
ZONES INCLUDING, BUT NOT LIMITED TO, THE QUALIFIED PURCHASE OF BUILDINGS
AND QUALIFIED REHABILITATION EXPENDITURES OF BUILDINGS IN SUCH UPSTATE
REINVESTMENT ZONES WHERE AT LEAST FIFTY PERCENT OF THE SQUARE FOOTAGE OF
SUCH BUILDINGS, AT THE TIME OF PURCHASE OR REHABILITATION, IS VACANT OR
OTHERWISE UNUSED. THE AMOUNT OF THE CREDIT SHALL BE TWENTY PERCENT OF
THE QUALIFIED PURCHASE AND QUALIFIED REHABILITATION EXPENDITURES OF ANY
BUILDINGS AND REHABILITATIONS WITH SUCH CREDIT NOT EXCEEDING 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 "UPSTATE REINVEST-
MENT ZONE" SHALL MEAN AN AREA: (1) THAT, ACCORDING TO THE MOST RECENT
AMERICAN COMMUNITY SURVEY BY THE UNITED STATES CENSUS BUREAU, LIES WITH-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01636-02-5
A. 2518--A 2
IN A CENSUS TRACT WITH A POVERTY RATE EQUAL TO OR GREATER THAN TWENTY
PERCENT OR AN EMPLOYMENT RATE THAT IS EQUAL TO OR GREATER THAN ONE AND
ONE-HALF PERCENT TIMES THE NATIONAL AVERAGE UNEMPLOYMENT RATE AND (2) IS
WITHIN THE INCORPORATED BOUNDARIES OF A VILLAGE, TOWN OR CITY HAVING A
POPULATION OF LESS THAN ONE MILLION.
(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 UPSTATE REINVESTMENT ZONE 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.
(2) THE COMMISSIONER SHALL PROMULGATE REGULATIONS BY DECEMBER THIRTY-
FIRST, TWO THOUSAND SIXTEEN 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 SIXTEEN 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 ARTICLE. 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 2. Section 606 of the tax law is amended by adding a new subsection
(ccc) to read as follows:
(CCC) UPSTATE REINVESTMENT ZONE 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 UPSTATE
ZONES INCLUDING, BUT NOT LIMITED TO, THE QUALIFIED PURCHASE OF BUILDINGS
AND QUALIFIED REHABILITATION EXPENDITURES OF BUILDINGS IN SUCH UPSTATE
REINVESTMENT ZONES. THE AMOUNT OF THE CREDIT SHALL BE TWENTY PERCENT OF
THE QUALIFIED PURCHASE AND QUALIFIED REHABILITATION 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
A. 2518--A 3
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 "UPSTATE REINVESTMENT
ZONE" SHALL MEAN AN AREA: (A) THAT, ACCORDING TO THE MOST RECENT AMERI-
CAN COMMUNITY SURVEY BY THE UNITED STATES CENSUS BUREAU, LIES WITHIN A
CENSUS TRACT WITH A POVERTY RATE EQUAL TO OR GREATER THAN TWENTY PERCENT
OR AN EMPLOYMENT RATE THAT IS EQUAL TO OR GREATER THAN ONE AND ONE-HALF
PERCENT TIMES THE NATIONAL AVERAGE UNEMPLOYMENT RATE AND (B) IS WITHIN
THE INCORPORATED BOUNDARIES OF A VILLAGE, TOWN OR CITY HAVING A POPU-
LATION OF LESS THAN ONE MILLION.
(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 UPSTATE REINVESTMENT ZONE 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 SIXTEEN 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 SIXTEEN 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 3. 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) UPSTATE REINVESTMENT AMOUNT OF THE CREDIT UNDER
ZONE TAX CREDIT SUBDIVISION FIFTY-ONE OF SECTION
UNDER SUBSECTION (CCC) TWO HUNDRED TEN-B
S 4. This act shall take effect immediately; provided, however, that:
(a) section two of this act shall take effect on the one hundred
eightieth day after this act shall have become a law; and
(b) 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 section two of this act.