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SECTION 21
Brownfield redevelopment tax credit
Tax (TAX) CHAPTER 60, ARTICLE 1
* § 21. Brownfield redevelopment tax credit. (a) Allowance of credit.
(1) General. A taxpayer subject to tax under article nine, nine-A,
twenty-two or thirty-three of this chapter shall be allowed a credit
against such tax, pursuant to the provisions referenced in subdivision
(f) of this section. Such credit shall be allowed with respect to a
qualified site, as such term is defined in paragraph one of subdivision
(b) of this section. The amount of the credit in a taxable year shall be
the sum of the credit components specified in paragraphs two, three and
four of this subdivision applicable in such year.

(2) Site preparation credit component. The site preparation credit
component shall be equal to the applicable percentage of the site
preparation costs paid or incurred by the taxpayer with respect to a
qualified site. The credit component amount so determined with respect
to a site's qualification for a certificate of completion shall be
allowed for the taxable year in which the effective date of the
certificate of completion occurs. The credit component amount determined
other than with respect to such qualification shall be allowed for the
taxable year in which the improvement to which the applicable costs
apply is placed in service for up to five taxable years after the
issuance of such certificate of completion.

(3) Tangible property credit component.

(i) The tangible property credit component shall be equal to the
applicable percentage of the cost or other basis for federal income tax
purposes of tangible personal property and other tangible property,
including buildings and structural components of buildings, which
constitute qualified tangible property and may include any related party
service fee paid; provided that in determining the cost or other basis
of such property, the taxpayer shall exclude the acquisition cost of any
item of property with respect to which a credit under this section was
allowable to another taxpayer. A related party service fee shall be
allowed only in the calculation of the tangible property credit
component and shall not be allowed in the calculation of the site
preparation credit component or the on-site groundwater remediation
credit component. The portion of the tangible property credit component
which is attributable to related party service fees shall be allowed
only as follows: (A) in the taxable year in which the qualified tangible
property described in subparagraph (iii) of this paragraph is placed in
service, for that portion of the related party service fees which have
been earned and actually paid to the related party on or before the last
day of such taxable year; and (B) with respect to any other taxable year
for which the tangible property credit component may be claimed under
this subparagraph and in which the amount of any additional related
party service fees are actually paid by the taxpayer to the related
party, the tangible property credit component for such amount shall be
allowed in such taxable year. The credit component amount so determined
shall be allowed for the taxable year in which such qualified tangible
property is first placed in service on a qualified site with respect to
which a certificate of completion has been issued to the taxpayer, or
for the taxable year in which the certificate of completion is issued if
the qualified tangible property is placed in service prior to the
issuance of the certificate of completion. This credit component shall
only be allowed for up to one hundred twenty months after the date of
the issuance of such certificate of completion, provided, however, that
for qualified sites to which a certificate of completion is issued on or
after March twentieth, two thousand ten, but prior to January first, two
thousand twelve, the commissioner may extend the credit component for up
to one hundred forty-four months after the date of such issuance, if the
commissioner, in consultation with the commissioner of environmental
conservation, determines that the requirements for the credit would have
been met if not for the restrictions related to the state disaster
emergency declared pursuant to executive order 202 of 2020 or any
extension thereof or subsequent executive order issued in response to
the novel coronavirus (COVID-19) pandemic.

(ii) The tangible property credit component shall be allowed with
respect to property leased to a second party only if such second party
is either (A) not a party responsible for the disposal of hazardous
waste or the discharge of petroleum at the site according to applicable
principles of statutory or common law liability, or (B) a party
responsible according to applicable principles of statutory or common
law liability if such party's liability arises solely from operation of
the site subsequent to the disposal of hazardous waste or the discharge
of petroleum, and is so certified by the commissioner of environmental
conservation at the request of the taxpayer, pursuant to section 27-1419
of the environmental conservation law. Notwithstanding any other
provision of law to the contrary, in the case of allowance of credit
under this section to such a lessor, the commissioner shall have the
authority to reveal to such lessor any information, with respect to the
issue of qualified use of property by the lessee, which is the basis for
the denial in whole or in part, or for the recapture, of the credit
claimed by such lessor. For purposes of the tangible property credit
component allowed under this section the taxpayer to whom the
certificate of completion is issued, as provided for under subdivision
five of section 27-1419 of the environmental conservation law, may
transfer the benefits and burdens of the certificate of completion,
which run with the land and to the applicant's successors or assigns
upon transfer or sale of all or any portion of an interest or estate in
the qualified site. However, the taxpayer to whom certificate's benefits
and burdens are transferred shall not include the cost of acquiring all
or any portion of an interest or estate in the site and the amounts
included in the cost or other basis for federal income tax purposes of
qualified tangible property already claimed by the previous taxpayer
pursuant to this section.

(iii) The term "related party service fee" shall mean any fee or other
monetary compensation earned by a related party and calculated as a
percentage of project and/or acquisition costs, in consideration of
services rendered to or for the benefit of the taxpayer placing
qualified tangible property in service in connection with the
acquisition and development of such property. For purposes of this
subparagraph, "related party" shall have the same meaning as related
person as defined in subparagraph (c) of paragraph three of subdivision
(b) of section four hundred sixty-five of the internal revenue code.

(iv) Eligible costs for the tangible property credit component are
limited to costs for tangible property that has a depreciable life for
federal income tax purposes of fifteen years or more, costs associated
with demolition and excavation on the site and the foundation of any
buildings constructed as part of the site cover that are not properly
included in the site preparation component and costs associated with
non-portable equipment, machinery and associated fixtures and
appurtenances used exclusively on the site, whether or not such property
has a depreciable life for federal income tax purposes of fifteen years
or more.

(v) With respect to any qualified site for which the department of
environmental conservation has issued a notice to the taxpayer on or
after July first, two thousand fifteen or the date of publication in the
state register of proposed regulations defining "underutilized" as
provided in subdivision thirty of section 27-1405 of the environmental
conservation law, whichever shall be later, that its request for
participation has been accepted under subdivision six of section 27-1407
of the environmental conservation law, and the site is eligible for the
tangible property credit component because it is an affordable housing
project pursuant to subdivision one-a of section 27-1407 of the
environmental conservation law, the portion of eligible costs to be
included in the calculation of the tangible property credit component
will be determined by multiplying the total costs qualified for the
tangible property credit component by a fraction, the numerator of which
shall be the square footage of space of the affordable housing units
dedicated to residential occupancy and the denominator of which shall be
the total square footage of the building.

(3-a) (A) Notwithstanding any other provision of law to the contrary,
the tangible property credit component available for any qualified site
pursuant to paragraph three of this subdivision shall not exceed
thirty-five million dollars or three times the sum of the costs included
in the calculation of the site preparation credit component and the
on-site groundwater remediation credit component under paragraphs two
and four, respectively, of this subdivision, and the costs that would
have been included in the calculation of such components if not treated
as an expense and deducted pursuant to section one hundred ninety-eight
of the internal revenue code, whichever is less; provided, however,
that: (1) in the case of a qualified site to be used primarily for
manufacturing activities, the tangible property credit component
available for any qualified site pursuant to paragraph three of this
subdivision shall not exceed forty-five million dollars or six times the
sum of the costs included in the calculation of the site preparation
credit component and the on-site groundwater remediation credit
component under paragraphs two and four, respectively, of this
subdivision, and the costs that would have been included in the
calculation of such components if not treated as an expense and deducted
pursuant to section one hundred ninety-eight of the internal revenue
code, whichever is less; and (2) the provisions of this paragraph shall
not apply to any qualified site for which the department of
environmental conservation has issued a notice to the taxpayer before
June twenty-third, two thousand eight that its request for participation
has been accepted under subdivision six of section 27-1407 of the
environmental conservation law.

(B) For the purposes of this paragraph, the term "manufacturing
activities" means the production of goods by manufacturing, processing,
assembling, refining, mining, extracting, farming, agriculture,
horticulture, floriculture, viticulture or commercial fishing; provided
however, that the generation and distribution of electricity, the
distribution of natural gas, and the production of steam associated with
the generation of electricity, shall not constitute manufacturing
activities.

(C) In order to properly administer the credits set forth in this
subdivision, the department may disclose information about the
calculation and the amounts of the credits claimed under this
subdivision on a taxpayer's return to the department of environmental
conservation and other taxpayers claiming tax credits under this section
with respect to the same qualifying site.

(D) With respect to any qualified site for which the department of
environmental conservation has issued a notice to the taxpayer before
July first, two thousand fifteen or the date of publication in the state
register of proposed regulations defining "underutilized" as provided in
subdivision thirty of section 27-1405 of the environmental conservation
law, whichever shall be later, that its request for participation has
been accepted under subdivision six of section 27-1407 of the
environmental conservation law, or where the taxpayer has either been
issued or received a certificate of completion from another taxpayer
under section 27-1419 of the environmental conservation law before July
first, two thousand fifteen or the date of publication in the state
register of proposed regulations defining "underutilized" as provided in
subdivision thirty of section 27-1405 of the environmental conservation
law, whichever shall be later, if the qualifying site is located in a
brownfield opportunity area and is developed in conformance with the
goals and priorities established for that applicable brownfield
opportunity area as designated pursuant to section nine hundred
seventy-r of the general municipal law, the applicable percentage of the
tangible property credit component will be increased by two percent.

(4) On-site groundwater remediation credit component. The on-site
groundwater remediation credit component shall be equal to the
applicable percentage of the on-site groundwater remediation costs paid
or incurred by the taxpayer with respect to a qualified site (to the
extent that such groundwater remediation costs are not included in the
determination of the site preparation credit or the cost or other basis
included in the determination of the tangible property credit). The
credit component so determined for costs incurred and paid with respect
to and prior to the issuance of a certificate of completion shall be
allowed for the taxable year in which the effective date of the issuance
of a certificate of completion occurs. The credit component amount
determined in taxable years after the effective date of the issuance of
a certificate of completion shall be allowed in the taxable year such
qualified costs are incurred and paid for up to five taxable years after
the issuance of such certificate of completion.

(5) Applicable percentage. (A) For purposes of computing the site
preparation and on-site groundwater remediation credit components
pursuant to paragraphs two and four of this subdivision, with respect to
such qualified sites for which the department of environmental
conservation has issued a notice to the taxpayer before June
twenty-third, two thousand eight that its request for participation has
been accepted under subdivision six of section 27-1407 of the
environmental conservation law, or where the taxpayer has either been
issued or received a certificate of completion from another taxpayer
under section 27-1419 of the environmental conservation law for such a
site, and, for purposes of computing the tangible property component
pursuant to paragraph three of this subdivision with respect to such
qualified sites for which the department of environmental conservation
has issued a notice to the taxpayer before July first, two thousand
fifteen or the date of publication in the state register of proposed
regulations defining "underutilized" as provided in subdivision thirty
of section 27-1405 of the environmental conservation law, whichever
shall be later, that its request for participation has been accepted
under subdivision six of section 27-1407 of the environmental
conservation law, or where the taxpayer has either been issued or
received a certificate of completion from another taxpayer under section
27-1419 of the environmental conservation law for such a site, the
applicable percentage shall be twelve percent in the case of credits
claimed under article nine, nine-A or thirty-three of this chapter, and
ten percent in the case of credits claimed under article twenty-two of
this chapter, except that where at least fifty percent of the area of
the qualified site relating to the credit provided for in this section
is located in an environmental zone as defined in paragraph six of
subdivision (b) of this section, the applicable percentage shall be
increased by an additional eight percent. Provided, however, as afforded
in section 27-1419 of the environmental conservation law, if the
certificate of completion indicates that the qualified site has been
remediated to Track 1 as that term is described in subdivision four of
section 27-1415 of the environmental conservation law, the applicable
percentage set forth in the first sentence of this paragraph shall be
increased by an additional two percent.

(B) With respect to such qualified site for which the department of
environmental conservation has issued a notice to the taxpayer on or
after July first, two thousand fifteen or the date of publication in the
state register of proposed regulations defining "underutilized" as
provided in subdivision thirty of section 27-1405 of the environmental
conservation law, whichever shall be later, that its request for
participation has been accepted under subdivision six of section 27-1407
of the environmental conservation law, the applicable percentage for the
tangible property credit component of the brownfield redevelopment tax
credit pursuant to paragraph three of subdivision (a) of this section
shall be the sum of ten percent and the following additional
percentages, provided that if the sum is greater than twenty-four
percent, the total percentage of the tangible property credit component
shall be twenty-four percent and is otherwise subject to the limitations
set forth in paragraphs three and three-a of subdivision (a) of this
section:

(i) five percent for a site within an environmental zone;

(ii) five percent for a site located within a designated brownfield
opportunity area and is developed in conformance with the goals and
priorities established for that applicable brownfield opportunity area;

(iii) five percent for a site developed as affordable housing, as
defined in section 27-1405 of the environmental conservation law;

(iv) five percent for a site to be used primarily for manufacturing
activities as such term is defined in subparagraph (B) of paragraph
three-a of this subdivision; and

(v) five percent for sites remediated to Track 1 as that term is
defined in subdivision four of section 27-1415 of the environmental
conservation law.

(C) The taxpayer shall submit, in the manner prescribed by the
commissioner, information sufficient to demonstrate that the site
qualifies for any credit components available under subparagraph (B) of
this paragraph. If the site is receiving the credit component authorized
pursuant to clause (ii) of subparagraph (B) of this paragraph for being
located within a designated brownfield opportunity area, the taxpayer
shall submit a certification from the secretary of state that the
development is in conformance with such brownfield opportunity area plan
pursuant to section nine hundred seventy-r of the general municipal law.

(6) Site preparation costs and on-site groundwater remediation costs
paid or incurred by the taxpayer with respect to a qualified site and
the cost or other basis for federal income tax purposes of tangible
personal property and other tangible property, including buildings and
structural components of buildings, which constitute qualified tangible
property shall only include costs paid or incurred by the taxpayer on or
after the date of the brownfield site cleanup agreement executed by the
taxpayer and the department of environmental conservation pursuant to
section 27-1409 of the environmental conservation law.

(7) The amount of any grant received from the federal, state or a
local government or an instrumentality or public benefit corporation
thereof received by the taxpayer and used to pay for any of the costs
described in paragraphs two, three and four of this subdivision, which
was not included in the federal gross income of the taxpayer, shall be
subtracted in computing the credit components under this section.

(b) Definitions. As used in this section, the following terms shall
have the following meanings:

(1) Qualified site. A "qualified site" is a site with respect to which
a certificate of completion has been issued to the taxpayer by the
commissioner of environmental conservation pursuant to section 27-1419
of the environmental conservation law.

(2) Site preparation costs. The term "site preparation costs" shall
mean all amounts properly chargeable to a capital account, which are
paid or incurred which are necessary to implement a site's
investigation, remediation, or qualification for a certificate of
completion, and shall include costs of: excavation; demolition;
activities undertaken under the oversight of the department of labor or
in accordance with standards established by the department of health to
remediate and dispose of regulated materials including asbestos, lead or
polychlorinated biphenyls; environmental consulting; engineering; legal
costs; transportation, disposal, treatment or containment of
contaminated soil; remediation measures taken to address contaminated
soil vapor; cover systems consistent with applicable regulations;
physical support of excavation; dewatering and other work to facilitate
or enable remediation activities; sheeting, shoring, and other
engineering controls required to prevent off-site migration of
contamination from the qualified site or migrating onto the qualified
site; and the costs of fencing, temporary electric wiring, scaffolding,
and security facilities until such time as the certificate of completion
has been issued. Site preparation shall include all costs paid or
incurred within sixty months after the last day of the tax year in which
the certificate of completion is issued that are necessary for
compliance with the certificate of completion or subsequent
modifications thereof, or the remedial program defined in such
certificate of completion including but not limited to institutional
controls, engineering controls, an approved site management plan, and an
environmental easement with respect to the qualified site. Site
preparation cost shall not include the costs of foundation systems that
exceed the cover system requirements in the regulations applicable to
the qualified site.

(3) Qualified tangible property. "Qualified tangible property" is
property described in either subparagraph (A) or (B) of this paragraph
which:

(A) (i) is depreciable pursuant to section one hundred sixty-seven of
the internal revenue code,

(ii) has a useful life of four years or more,

(iii) has been acquired by purchase as defined in section one hundred
seventy-nine (d) of the internal revenue code,

(iv) has a situs on a qualified site in this state, and

(v) is principally used by the taxpayer for industrial, commercial,
recreational or environmental conservation purposes (including the
commercial development of residential housing); or

(B) (i) is, or when occupied becomes, part of a dwelling whose primary
ownership structure is covered under either article nine-B of the real
property law or meets the requirements of section 216 (b)(1) of the
Internal Revenue Code or is part of an affordable housing project as
defined in subdivision twenty-nine of section 27-1405 of the
environmental conservation law, where units are sold as single family
homes or multiple family dwellings;

(ii) has been acquired by purchase (as defined in section one hundred
seventy-nine (d) of the Internal Revenue Code);

(iii) has a situs on a qualified site in this state; and

(iv) for purposes of this subparagraph only, and notwithstanding any
other section of law to the contrary, property qualifying under this
subparagraph shall be deemed to be qualified tangible property for the
purposes of paragraph one of subdivision (d) of this section; and in
addition, for the purposes of this subdivision only, property qualifying
under this subparagraph shall be deemed to have been placed in service
for the purposes of paragraph three of subdivision (a) of this section
when a certificate of occupancy is issued for such property.

(4) On-site groundwater remediation costs. The term "on-site
groundwater remediation costs" shall mean all amounts properly
chargeable to a capital account, which are paid or incurred which are
necessary to implement a site's groundwater investigation, remediation,
or qualification for a certificate of completion not already covered
under site preparation costs, and shall include costs of: environmental
consulting; engineering; legal costs; transportation, disposal,
treatment or containment of contaminated groundwater; sheeting, shoring,
and other engineering controls required to prevent off-site migration of
groundwater contamination from the qualified site or migrating onto the
qualified site; and the costs of fencing, temporary electric wiring and
security facilities until such time as the certificate of completion is
issued. On-site groundwater remediation costs shall include all costs
paid or incurred within sixty months after the last day of the tax year
in which the certificate of completion is issued that are necessary for
compliance with the certificate of completion or subsequent
modifications thereof, or the groundwater remedial program defined in
such certificate of completion including but not limited to
institutional controls, engineering controls, an approved site
management plan specific to on-site groundwater remediation, and an
environmental easement with respect to the qualified site.

(5) Certificate of completion. A "certificate of completion" issued by
the commissioner of environmental conservation pursuant to section
27-1419 of the environmental conservation law.

(6) Environmental zones (EN-Zones). An "environmental zone" shall mean
an area designated as such by the commissioner of labor. Such areas
shall be census tracts that satisfy either of the following criteria:

(A) areas that have both:

(i) a poverty rate of at least twenty percent based on the most recent
five year American Community Survey; and

(ii) an unemployment rate of at least one and one-quarter times the
statewide unemployment rate based on the most recent five year American
Community Survey, or;

(B) areas that have a poverty rate of at least two times the poverty
rate for the county in which the areas are located based on the most
recent five year American Community Survey.

Such designation shall be made and a list of all such environmental
zones shall be established by the commissioner of labor based on the two
thousand nine through two thousand thirteen American Community Survey
estimate. Upon request of the commissioner of environmental
conservation, the commissioner of labor shall update such designation
based on the most recent American Community Survey, or its successor.

The determination of whether a site is located in an environmental
zone shall be based on the date the department of environmental
conservation issued a notice to the taxpayer that its request for
participation in the brownfield cleanup program has been deemed complete
pursuant to subdivision three of section 27-1407 of the environmental
conservation law.

(c) Qualifying property. Property which qualifies for the credit
provided for under this section and also for a credit provided for (1)
under either subdivision one or subdivision three of section two hundred
ten-B of this chapter, or both, or (2) subsection (a) or subsection (j)
of section six hundred six of this chapter, or both may be the basis for
either the credit provided for under this section or one of the credits
enumerated in paragraph one or two of this subdivision, but not both.

(d) Depreciable property. (1) With respect to qualified tangible
property which is depreciable pursuant to section one hundred
sixty-seven of the internal revenue code but is not subject to the
provisions of section one hundred sixty-eight of such code and which
ceases to be in qualified use prior to the end of the taxable year in
which the credit is to be taken, the amount of the credit shall be that
portion of the credit provided for in this subdivision which represents
the ratio which the months of qualified use bear to the months of useful
life. If property on which credit has been taken ceases to be in
qualified use prior to the end of its useful life, the difference
between the credit taken and the credit allowed for actual use must be
added back in the year in which the property ceased to be in qualified
use. Provided, however, if such property ceases to be in qualified use
after it has been in qualified use for more than twelve consecutive
years, it shall not be necessary to add back the credit as provided in
this paragraph. The amount of credit allowed for actual use shall be
determined by multiplying the original credit by the ratio which the
months of qualified use bear to the months of useful life. For purposes
of this paragraph, the useful life of property shall be the same as the
taxpayer uses for depreciation purposes when computing its federal
income tax liability.

(2) Except with respect to that property to which paragraph four of
this subdivision applies, with respect to qualified tangible property
which is three-year property, as defined in subsection (e) of section
one hundred sixty-eight of the internal revenue code, which ceases to be
in qualified use prior to the end of the taxable year in which the
credit is to be taken, the amount of the credit shall be that portion of
the credit provided for in this section which represents the ratio which
the months of qualified use bear to thirty-six. If property on which
credit has been taken ceases to be in qualified use prior to the end of
thirty-six months, the difference between the credit taken and the
credit allowed for actual use must be added back in the year in which
the property ceased to be in qualified use. The amount of credit allowed
for actual use shall be determined by multiplying the original credit by
the ratio which the months of qualified use bear to thirty-six.

(3) Except with respect to that property to which paragraph four of
this subdivision applies, with respect to qualified tangible property
which is subject to the provisions of section one hundred sixty-eight of
the internal revenue code other than three-year property as defined in
subsection (e) of such section one hundred sixty-eight which ceases to
be in qualified use prior to the end of the taxable year in which the
credit is to be taken, the amount of the credit shall be that portion of
the credit provided for in this section which represents the ratio which
the months of qualified use bear to sixty. If property on which credit
has been taken ceases to be in qualified use prior to the end of sixty
months, the difference between the credit taken and the credit allowed
for actual use must be added back in the year in which the property
ceased to be in qualified use. The amount of credit allowed for actual
use shall be determined by multiplying the original credit by the ratio
which the months of qualified use bear to sixty.

(4) With respect to any qualified tangible property to which section
one hundred sixty-eight of the internal revenue code applies, which is a
building or a structural component of a building and which ceases to be
in qualified use prior to the end of the taxable year in which the
credit is to be taken, the amount of the credit shall be that portion of
the credit provided for in this section which represents the ratio which
the months of qualified use bear to the total number of months over
which the taxpayer chooses to deduct the property under the internal
revenue code. If property on which credit has been taken ceases to be in
qualified use prior to the end of the period over which the taxpayer
chooses to deduct the property under the internal revenue code, the
difference between the credit taken and the credit allowed for actual
use must be added back in the year in which the property ceased to be in
qualified use. Provided, however, if such property ceases to be in
qualified use after it has been in qualified use for more than twelve
consecutive years, it shall not be necessary to add back the credit as
provided in this paragraph. The amount of credit allowed for actual use
shall be determined by multiplying the original credit by the ratio
which the months of qualified use bear to the total number of months
over which the taxpayer chooses to deduct the property under the
internal revenue code.

(e) If the certificate of completion issued to the taxpayer with
respect to a qualified site is revoked by a determination issued
pursuant to section 27-1419 of the environmental conservation law, the
amount of any credit allowed by this section shall be added back in the
taxable year in which such determination is final and no longer subject
to judicial review.

(f) Cross-references. For application of the credit provided for in
this section, see the following provisions of this chapter:

(1) Article 9: Section 187-g

(2) Article 9-A: Section 210-B, subdivision 17

(3) Article 22: Section 606, subsections (i) and (dd)

(4) Article 33: Section 1511, subdivision (u).

* NB There are 2 § 21's