NY State Senate Bill 2019-S8977

Archive: Last Bill Status - In Senate Committee Rules 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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Sep 14, 2020	referred to rules

2019-S8977 (ACTIVE) - Details

Current Committee:: Senate Rules
Law Section:: Tax Law
Laws Affected:: Add §45, Tax L; add §171, Exec L
Versions Introduced in 2021-2022 Legislative Session:: S2139

2019-S8977 (ACTIVE) - Summary

Establishes the opportunity zone reporting and reform act requiring qualified opportunity funds to file annual returns including information on the investors in the fund, the size of the fund and the use of the funds; establishes penalties for failure to file such returns; requires the comptroller to provide an annual report on the effectiveness of opportunity zones and compliance with the reporting requirements.

2019-S8977 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8977

SPONSOR: RAMOS
 
TITLE OF BILL:

An act to amend the tax law, in relation to establishing the opportunity
zone reporting and reform act; and to amend the executive law, in
relation to requiring the comptroller to prepare a report on the effec-
tiveness of opportunity zones

 
PURPOSE OR GENERAL IDEA OF BILL:

Ensures opportunity zone funds and investors and the comptroller report
on opportunity zone investments and their impact on the community.

 
SUMMARY OF PROVISIONS:

Section 1: Amends the tax law by adding Section 45, which requires qual-
ified opportunity funds to report on the impact of their investments in
different qualified opportunity zones.

Section 2: Amends the executive law by adding Section 171, which
requires the comptroller to submit an annual report on the effectiveness
of opportunity zones and compliance with the reporting requirements in
section 45 of the tax law.

Section 3: This act shall take effect on January 1st, succeeding the
date upon which it shall have become a law.

 
JUSTIFICATION:

Opportunity Zones were created by the 2017 Trump Tax Cut and Jobs Act to
"revitalize economically distressed communities" using private invest-
ment. Opportunity Zones work by offering investors a deferment and even-
tually, a tax break on their original capital gains income, if they
reinvest their money into an opportunity zone. Although the program is
federal, NY has decided to conform their tax laws to federal laws ( most
other states have as well). Not only do investors see a tax reduction on
their federal income tax, but also their state income tax.

Still there is next to no data on the effectiveness of the program.  The
New York Times in the past year reported wealthy investors building
luxury apartments and condos with little benefits for the communities
the program is supposed to help. Also, the Citizens Budget Commission
has suggested that New York may lose as much as $63 million annually in
tax revenues over the next 10 years, and significantly more revenue will
be lost after the 10 year mark.

Our bill mandates reporting requirements for opportunity zone funds.
For example, opportunity zone Funds are required to provide information
on the value of all properties held in their fund, the identity of
corporations that manage certain funds, and Funds must provide an impact
assessment of how their investments are impacting the greater community.
Also, our bill mandates the New York State Comptroller to provide an
annual report on the effectiveness of opportunity zones and whether
opportunity zone investors are complying with the law.

 
LEGISLATIVE HISTORY:

New Bill

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None

 
EFFECTIVE DATE:
This act shall take effect at the beginning of the year after this
legislation is signed into law.

2019-S8977 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8977
 
                             I N  S E N A T E
 
                            September 14, 2020
                                ___________
 
 Introduced  by  Sen.  RAMOS  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the tax law, in relation to establishing the opportunity
   zone reporting and reform act; and to  amend  the  executive  law,  in
   relation  to  requiring  the  comptroller  to  prepare a report on the
   effectiveness of opportunity zones

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The tax law is amended by adding a new section 45 to read
 as follows:
   § 45. SHORT TITLE. (A) THIS SECTION MAY BE KNOWN AND SHALL BE CITED AS
 THE "OPPORTUNITY ZONE REPORTING AND REFORM ACT".
   (B) REPORTING REQUIREMENTS ON QUALIFIED OPPORTUNITY FUNDS.  (1)  EVERY
 QUALIFIED  OPPORTUNITY FUND SHALL FILE AN ANNUAL RETURN WITH THE COMMIS-
 SIONER (AT SUCH  TIME  AND  IN  SUCH  MANNER  AS  THE  COMMISSIONER  MAY
 PRESCRIBE) CONTAINING THE INFORMATION DESCRIBED IN PARAGRAPH TWO OF THIS
 SUBDIVISION.
   (2) THE INFORMATION REQUIRED TO BE INCLUDED IN ANNUAL RETURNS REQUIRED
 PURSUANT TO PARAGRAPH ONE OF THIS SUBDIVISION IS:
   (A) THE NAME, ADDRESS, AND TAXPAYER IDENTIFICATION NUMBER OF THE QUAL-
 IFIED  OPPORTUNITY FUND AND THE UNIFORM RESOURCE LOCATOR FOR THE WEBSITE
 FOR SUCH FUND;
   (B) THE VALUE OF ALL PROPERTY  HELD  BY  THE  FUND  AS  OF  EACH  DATE
 DESCRIBED IN SECTION 1400Z-2(D)(1) OF THE INTERNAL REVENUE CODE;
   (C) THE VALUE OF:
   (I)  QUALIFIED  OPPORTUNITY  ZONE  STOCK HELD BY THE FUND ON EACH SUCH
 DATE;
   (II) QUALIFIED OPPORTUNITY ZONE PARTNERSHIP INTERESTS HELD BY THE FUND
 ON EACH SUCH DATE;
   (III) QUALIFIED OPPORTUNITY ZONE BUSINESS PROPERTY HELD BY THE FUND ON
 EACH SUCH DATE;
   (IV) TANGIBLE PROPERTY NOT DESCRIBED IN CLAUSE (I), (II), OR (III)  OF
 THIS SUBPARAGRAPH AND HELD BY THE FUND ON EACH SUCH DATE; AND
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD15647-02-0

 S. 8977                             2
 
   (V)  INTANGIBLE  PROPERTY  (INCLUDING  CASH  AND CASH EQUIVALENTS) NOT
 DESCRIBED IN CLAUSE (I), (II), OR (III) OF THIS SUBPARAGRAPH AND HELD BY
 THE FUND ON EACH SUCH DATE;
   (D) THE NAME, ADDRESS, AND TAXPAYER IDENTIFICATION NUMBER OF:
   (I)  EACH  CORPORATION  IN  WHICH  THE QUALIFIED OPPORTUNITY FUND OWNS
 STOCK; AND
   (II) EACH PARTNERSHIP IN WHICH THE QUALIFIED OPPORTUNITY FUND  OWNS  A
 CAPITAL OR PROFITS INTEREST;
   (E)  WITH RESPECT TO EACH QUALIFIED OPPORTUNITY ZONE BUSINESS WHICH IS
 CONDUCTED BY THE QUALIFIED OPPORTUNITY FUND, BY A CORPORATION  IN  WHICH
 THE  QUALIFIED OPPORTUNITY FUND OWNS STOCK, OR BY A PARTNERSHIP IN WHICH
 THE QUALIFIED OPPORTUNITY FUND OWNS A CAPITAL OR PROFITS INTEREST:
   (I) THE IDENTITY OF THE ENTITY CONDUCTING  THE  QUALIFIED  OPPORTUNITY
 ZONE BUSINESS; AND
   (II)  EACH NORTH AMERICAN INDUSTRY CLASSIFICATION CODE THAT APPLIES TO
 SUCH TRADE OR BUSINESS;
   (III) THE PERCENTAGE OF SUCH BUSINESSES WHICH ARE WOMEN  OR  MINORITY-
 OWNED BUSINESS ENTERPRISES; AND
   (IV)  THE  PERCENTAGE OF SUCH BUSINESSES WHICH ARE OWNED BY FIRST-TIME
 BUSINESS OWNERS;
   (F) WITH RESPECT TO EACH QUALIFIED OPPORTUNITY ZONE BUSINESS WHICH  IS
 CONDUCTED BY THE QUALIFIED OPPORTUNITY FUND OR BY A CORPORATION OR PART-
 NERSHIP CONTROLLED BY THE QUALIFIED OPPORTUNITY FUND:
   (I)  THE  VALUE (AS OF EACH DATE DESCRIBED IN SECTION 1400Z-2(D)(1) OF
 THE INTERNAL REVENUE CODE) OF:
   (I) THE TANGIBLE PROPERTY OF SUCH BUSINESS; AND
   (II) THE INTANGIBLE PROPERTY (INCLUDING CASH AND CASH EQUIVALENTS)  OF
 SUCH  BUSINESS,  SPECIFYING  THE NUMBER OF UNION JOBS WHICH WERE CREATED
 AND THE WAGES ASSOCIATED WITH SUCH JOBS; AND
   (II) THE AVERAGE MONTHLY NUMBER OF FULL-TIME EQUIVALENT  EMPLOYEES  OF
 SUCH  BUSINESS DURING THE REPORTING PERIOD, INCLUDING INFORMATION ON THE
 NUMBER OF EMPLOYEES FROM LOW AND MIDDLE INCOME COMMUNITIES;
   (III) THE NUMBER OF NEW FULL-TIME JOBS WHICH WERE CREATED;
   (IV) THE PERCENTAGE OF SUCH BUSINESSES WHICH ARE  WOMEN  OR  MINORITY-
 OWNED BUSINESS ENTERPRISES; AND
   (V)  THE  PERCENTAGE  OF SUCH BUSINESSES WHICH ARE OWNED BY FIRST-TIME
 BUSINESS OWNERS;
   (G) WITH RESPECT TO EACH QUALIFIED OPPORTUNITY ZONE BUSINESS  PROPERTY
 HELD  BY  THE  FUND OR BY A CORPORATION OR PARTNERSHIP CONTROLLED BY THE
 QUALIFIED OPPORTUNITY FUND:
   (I) THE QUALIFIED OPPORTUNITY ZONE WITH RESPECT TO THE PROPERTY;
   (II) THE DATE THE PROPERTY WAS ACQUIRED; AND
   (III) IN THE CASE OF REAL PROPERTY:
   (I) THE SQUARE FOOTAGE OF SUCH PROPERTY, SPECIFYING THE SQUARE FOOTAGE
 OF SUCH PROPERTY WHICH IS  ZONED  FOR  COMMERCIAL  USE  AND  THE  SQUARE
 FOOTAGE OF SUCH PROPERTY WHICH IS ZONED FOR RESIDENTIAL USE;
   (II) THE NUMBER (IF ANY) OF RESIDENTIAL UNITS ON THE PROPERTY, INCLUD-
 ING:
   1.  MANDATE  THE  REPORTING  OF  RENTAL PRICES, SALES PRICES, AND FEES
 ASSOCIATED WITH THE HOUSING THEY PRODUCE;
   2. REPORTING THE PERCENTAGE OF THE HOUSING STOCK  THAT  IS  UNDER  ANY
 REGULATORY FRAMEWORK AND THE TYPE OF SUCH REGULATORY FRAMEWORK; AND
   (III)  THE  AGGREGATE  COSTS  INCURRED  WITH  RESPECT TO SUCH PROPERTY
 RELATED TO:
   1. LAND ACQUISITION;
   2. NEW CONSTRUCTION; AND

 S. 8977                             3
 
   3. REHABILITATION;
   (H)  WITH  RESPECT TO EACH PERSON WHO HAS INVESTMENTS IN THE QUALIFIED
 OPPORTUNITY FUND DURING THE REPORTING PERIOD:
   (I) THE NAME AND TAXPAYER IDENTIFICATION NUMBER OF SUCH PERSON;
   (II) THE DATE OR DATES ON WHICH SUCH INVESTMENTS WERE MADE;
   (III) THE TOTAL AMOUNT OF SUCH INVESTMENTS; AND
   (IV) SUCH OTHER INFORMATION AS THE COMMISSIONER MAY REQUIRE; AND
   (I) INFORMATION PERTAINING TO EACH INDIVIDUAL TRANSACTION, INCLUDING:
   (I) THE PURPOSE OF THE INVESTMENT;
   (II) THE SIZE OF THE INVESTMENT;
   (III) THE LOCATION OF THE QUALIFYING PROPERTY; AND
   (IV) THE TYPE OF QUALIFYING PROPERTY.
   (3) EVERY QUALIFIED OPPORTUNITY FUND SHALL  INTEGRATE  THE  INVESTMENT
 STRATEGIES EMPLOYED BY SUCH FUND WITH THE NEEDS OF LOCAL COMMUNITIES AND
 SHALL ENGAGE THE COMMUNITY BY:
   (A) CREATING A COMMUNITY NEEDS ASSESSMENT;
   (B) REPORTING ON NON-GOVERNMENTAL ORGANIZATION PARTNERSHIPS; AND
   (C) GIVING PUBLIC NOTICE OF DEVELOPMENT.
   (4)  DEFINITIONS.  FOR  PURPOSES  OF THIS SECTION, THE FOLLOWING TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   (A) ANY TERM USED IN THIS SECTION WHICH IS ALSO USED IN  SUBCHAPTER  Z
 OF  CHAPTER  1  OF THE INTERNAL REVENUE CODE SHALL HAVE THE SAME MEANING
 GIVEN SUCH TERM UNDER SUCH SUBCHAPTER.
   (B) THE TERM "CONTROL" SHALL HAVE THE SAME  MEANING  GIVEN  SUCH  TERM
 UNDER SECTION 954(D)(3) OF THE INTERNAL REVENUE CODE.
   (C)  THE  TERM "FULL-TIME EQUIVALENT EMPLOYEES" MEANS, WITH RESPECT TO
 ANY MONTH, THE SUM OF:
   (I)  THE  NUMBER  OF  FULL-TIME  EMPLOYEES  (AS  DEFINED  IN   SECTION
 4980H(C)(4) OF THE INTERNAL REVENUE CODE) FOR THE MONTH, PLUS
   (II)  THE  NUMBER  OF EMPLOYEES DETERMINED (UNDER RULES SIMILAR TO THE
 RULES OF SECTION 4980H(C)(2)(E) OF THE INTERNAL REVENUE CODE) BY  DIVID-
 ING  THE  AGGREGATE  NUMBER OF HOURS OF SERVICE OF EMPLOYEES WHO ARE NOT
 FULL-TIME EMPLOYEES FOR THE MONTH BY ONE HUNDRED TWENTY.
   (5) EACH QUALIFIED OPPORTUNITY FUND SHALL MAKE THE RETURN FILED PURSU-
 ANT TO THIS SECTION PUBLICLY  AVAILABLE  ON  THE  QUALIFIED  OPPORTUNITY
 FUND'S  WEBSITE;  PROVIDED,  HOWEVER,  THAT  INFORMATION INCLUDED IN THE
 RETURN PURSUANT TO SUBPARAGRAPH (H) OF PARAGRAPH TWO OF THIS SUBDIVISION
 SHALL BE EXCLUDED FROM SUCH PUBLICLY AVAILABLE REPORT.
   (C) INFORMATION ON PERSONS INVESTING IN QUALIFIED  OPPORTUNITY  FUNDS.
 (1)  EVERY  TAXPAYER  WHO MAKES AN INVESTMENT IN A QUALIFIED OPPORTUNITY
 FUND SHALL PROVIDE AN ANNUAL STATEMENT TO THE COMMISSIONER (AT SUCH TIME
 AND IN SUCH MANNER AS THE COMMISSIONER  MAY  PRESCRIBE)  CONTAINING  THE
 INFORMATION DESCRIBED IN PARAGRAPH TWO OF THIS SUBDIVISION.
   (2)  THE  INFORMATION  REQUIRED  TO  BE  INCLUDED IN ANNUAL STATEMENTS
 REQUIRED PURSUANT TO PARAGRAPH ONE OF THIS SUBDIVISION IS:
   (A) THE NAME, ADDRESS,  AND  TAXPAYER  IDENTIFICATION  NUMBER  OF  THE
 TAXPAYER;
   (B)  THE  NAME  AND  TAXPAYER  IDENTIFICATION  NUMBER OF THE QUALIFIED
 OPPORTUNITY FUND IN WHICH THE INVESTMENT WAS MADE;
   (C) THE DATE SUCH INVESTMENT WAS MADE IN A QUALIFIED OPPORTUNITY  FUND
 AND THE AMOUNT OF SUCH INVESTMENT, INCLUDING A SEPARATE STATEMENT OF THE
 AMOUNT  OF ANY SUCH INVESTMENTS WHICH ARE GAIN FOR WHICH AN ELECTION WAS
 MADE UNDER SECTION 1400Z-2(A)(1) OF THE INTERNAL REVENUE CODE;
   (D) THE DATE OF THE DISPOSITION OF THE INVESTMENT; AND
   (E) SUCH OTHER INFORMATION AS THE COMMISSIONER MAY REQUIRE.

 S. 8977                             4
 
   (D) PENALTIES. (1) IN THE CASE OF A FAILURE TO MAKE A REPORT OR STATE-
 MENT REQUIRED UNDER SUBDIVISION (B) OR (C) OF THIS SECTION THAT CONTAINS
 THE INFORMATION REQUIRED BY SUCH SUBDIVISIONS  ON  THE  DATE  PRESCRIBED
 THEREFOR, OR FOR FAILURE TO MEET THE REQUIREMENTS SPECIFIED IN PARAGRAPH
 TWO  OF  SUCH SUBDIVISION, THERE SHALL BE A FINE IN AN AMOUNT EQUAL TO A
 PERCENTAGE OF THE AMOUNT ALLOCATED UNDER SUBDIVISION (B) OR (C) OF  THIS
 SECTION, AS FOLLOWS:
   (A) FOR THE FIRST FAILURE, A PENALTY OF ONE-HALF OF ONE PERCENT.
   (B) FOR THE SECOND FAILURE, A PENALTY OF ONE PERCENT.
   (C) FOR THE THIRD FAILURE, A PENALTY OF ONE AND ONE-HALF PERCENT.
   (D) FOR THE FOURTH FAILURE, A PENALTY OF TWO PERCENT.
   (E) FOR THE FIFTH FAILURE, A PENALTY OF TWO AND ONE-HALF PERCENT.
   (F)  AFTER  THE  FIFTH FAILURE, ANY SUBSEQUENT FAILURE SHALL RESULT IN
 REVOCATION OF THE QUALIFIED OPPORTUNITY ZONE FUND ALLOCATION.
   (2) IN THE CASE OF A FAILURE TO MAKE A RETURN OR STATEMENT AS REQUIRED
 UNDER SUBDIVISION (B) OR (C) OF THIS SECTION ON OR BEFORE THE  DUE  DATE
 OF  THE  RETURN  OR  STATEMENT,  A PENALTY OF TEN PERCENT OF THE CAPITAL
 GAINS REQUIRED TO BE INCLUDED ON A RETURN PURSUANT TO THIS CHAPTER.
   § 2. The executive law is amended by adding a new section 171 to  read
 as follows:
   § 171. REPORT ON OPPORTUNITY ZONES. 1. THE COMPTROLLER SHALL SUBMIT AN
 ANNUAL  REPORT  ON THE EFFECTIVENESS OF OPPORTUNITY ZONES AND COMPLIANCE
 WITH THE REPORTING REQUIREMENTS ESTABLISHED PURSUANT TO  SECTION  FORTY-
 FIVE OF THE TAX LAW.
   2.  THE  REPORT  SUBMITTED UNDER SUBDIVISION ONE OF THIS SECTION SHALL
 INCLUDE AN ANALYSIS OF:
   (A) THE DISTRIBUTION OF INVESTMENTS  OF  QUALIFIED  OPPORTUNITY  FUNDS
 AMONG QUALIFIED OPPORTUNITY ZONES;
   (B)  THE  DISTRIBUTION OF SUCH INVESTMENTS ACROSS DIFFERENT INDUSTRIES
 OR INVESTMENT PURPOSES;
   (C) THE IMPACT OF THE DESIGNATION OF AN AREA AS A  QUALIFIED  OPPORTU-
 NITY ZONE ON:
   (I) ECONOMIC INDICATORS, INCLUDING EMPLOYMENT, NEW BUSINESS START-UPS,
 AND POVERTY REDUCTION;
   (II) HOUSING COSTS; AND
   (III) INCOME DISTRIBUTION AMONG RESIDENTS OF SUCH ZONES;
   (D)  THE  ECONOMIC  BENEFITS PROVIDED BY SUCH DESIGNATIONS COMPARED TO
 ECONOMIC COSTS; AND
   (E) TO THE  EXTENT  PRACTICABLE,  THE  IMPACT  OF  THE  PROVISIONS  OF
 SUBCHAPTER  Z  OF  CHAPTER  1 OF THE INTERNAL REVENUE CODE ON LOW-INCOME
 COMMUNITIES THAT HAVE  NOT  BEEN  DESIGNATED  AS  QUALIFIED  OPPORTUNITY
 ZONES.
   3.  THE  COMPTROLLER SHALL SUBMIT AN ANNUAL REPORT OF HIS OR HER FIND-
 INGS AND RECOMMENDATIONS TO THE  GOVERNOR  AND  THE  LEGISLATURE  ON  OR
 BEFORE DECEMBER THIRTY-FIRST OF EACH YEAR.
   §  3. This act shall take effect on the first of January next succeed-
 ing the date upon which it shall have become a law.

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Senate Bill S8977

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

2019-S8977 (ACTIVE) - Details

2019-S8977 (ACTIVE) - Summary

2019-S8977 (ACTIVE) - Sponsor Memo

2019-S8977 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S8977

Share this bill

Sponsored By

Jessica Ramos

Archive: Last Bill Status - In Senate Committee Rules Committee

2019-S8977 (ACTIVE) - Details

2019-S8977 (ACTIVE) - Summary

2019-S8977 (ACTIVE) - Sponsor Memo

2019-S8977 (ACTIVE) - Bill Text download pdf

Comments