Bill Text: NY A01373 | 2019-2020 | General Assembly | Introduced


Bill Title: Provides tax credits for upstate reinvestment zones, for qualified purchases of buildings and qualified rehabilitation expenditures of buildings in such zones; sets credit at 20%.

Spectrum: Slight Partisan Bill (Democrat 2-1)

Status: (Introduced) 2019-01-15 - referred to ways and means [A01373 Detail]

Download: New_York-2019-A01373-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          1373
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    January 15, 2019
                                       ___________
        Introduced  by  M.  of A. SANTABARBARA, FAHY, PALMESANO -- read once and
          referred to the Committee on Ways and Means
        AN ACT to amend the  economic  development  law  and  the  tax  law,  in
          relation to tax credits for upstate reinvestment zones
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. The economic development law is amended  by  adding  a  new
     2  article 23 to read as follows:
     3                                 ARTICLE 23
     4                         UPSTATE REINVESTMENT ZONES
     5  Section 460. Power  to  administer  the  upstate  reinvestment zones tax
     6                 credit.
     7    § 460. Power to administer the upstate reinvestment zones tax  credit.
     8  (a)  The  commissioner is authorized to administer the upstate reinvest-
     9  ment zones tax credit program to provide tax  incentives  to  businesses
    10  for the qualified purchase of a building or buildings or qualified reha-
    11  bilitation  expenditures in such zone. The commissioner is authorized to
    12  allocate up to ten million dollars of tax credits under this program per
    13  year.  The amount of credit shall be twenty  percent  of  the  qualified
    14  purchase  and  qualified  rehabilitation  expenditures  of buildings and
    15  rehabilitations, as such amount is computed pursuant to  section  forty-
    16  four of the tax law.
    17    (b)  Definitions.  (1) The term "upstate reinvestment zone" shall mean
    18  an area:   (i) that, according to the  most  recent  American  community
    19  survey  by  the  United States census bureau, lies within a census tract
    20  with a poverty rate equal to or greater than twenty percent or an  unem-
    21  ployment  rate that is equal to or greater than one and one-half percent
    22  times the national average unemployment rate  and  (ii)  is  within  the
    23  incorporated  boundaries  of a village, town or city having a population
    24  of less than one million.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06290-01-9

        A. 1373                             2
     1    (2) The term "qualified purchase" shall mean the cost or  other  basis
     2  for  federal  income  tax  purposes  of acquisition cost of building for
     3  which depreciation is allowed under section one hundred  sixty-eight  of
     4  the internal revenue code and which is (i) nonresidential property, (ii)
     5  residential  property,  or  (iii) an addition or improvement to property
     6  described in subparagraph (i) or (ii) of this paragraph.
     7    (3) The term "qualified rehabilitation expenditures" shall mean quali-
     8  fied expenditures as defined in  paragraph  (2)  of  subsection  (c)  of
     9  section  forty-seven  of the internal revenue code other than the quali-
    10  fied purchase made in paragraph two of this subdivision.
    11    (c) Allocation of credits. (1) The aggregate  amount  of  tax  credits
    12  allowed  under this subdivision in any taxable year shall be ten million
    13  dollars. Such aggregate amount of credits  shall  be  allocated  by  the
    14  commissioner  among  taxpayers  in  the  order in which applications are
    15  received. If the total amount of allocated credits applied  for  in  any
    16  particular  year exceeds the aggregate amount of tax credits allowed for
    17  such year under this section, such excess shall  be  treated  as  having
    18  been applied for on the first day of the subsequent year.
    19    (2)  The commissioner shall promulgate regulations by December thirty-
    20  first, two thousand twenty to establish procedures for the allocation of
    21  tax credits as  required.  Such  rules  and  regulations  shall  include
    22  provisions  describing  the  application process, the due dates for such
    23  applications, the standards which shall be used to evaluate the applica-
    24  tions, the documentation that will be provided to taxpayers to  substan-
    25  tiate  to  the  commissioner the amount of tax credits allocated to such
    26  taxpayers, and such other provisions as deemed necessary  and  appropri-
    27  ate.   Notwithstanding any other provisions to the contrary in the state
    28  administrative procedure act, such rules and regulations may be  adopted
    29  on  an  emergency basis if necessary to meet such December thirty-first,
    30  two thousand twenty deadline.
    31    (d) In order to be eligible for  the  tax  credits,  a  taxpayer  must
    32  submit  an application (in a form prescribed by the commissioner) to the
    33  commissioner. The commissioner shall establish guidelines  and  criteria
    34  for a designation of upstate reinvestment zones.
    35    (e) If, after reviewing the application submitted by the taxpayer, the
    36  commissioner  determines that such qualified purchase of the building or
    37  qualified rehabilitation expenditures were made in an upstate  reinvest-
    38  ment  zone, then the commissioner shall issue the taxpayer a certificate
    39  of eligibility that establishes the taxpayer as a qualified taxpayer.
    40    § 2. The tax law is amended by adding a new  section  44  to  read  as
    41  follows:
    42    §  44.  Upstate reinvestment zones tax credit. (a) A taxpayer shall be
    43  allowed a credit, to be computed as hereinafter  provided,  against  the
    44  tax  imposed  by  articles nine-A and twenty-two of this chapter for the
    45  development to upstate reinvestment zones including, but not limited to,
    46  the qualified purchase of buildings and qualified rehabilitation expend-
    47  itures of buildings in such zones where at least fifty  percent  of  the
    48  square  footage  of such buildings, at the time of purchase or rehabili-
    49  tation, is vacant or otherwise unused. The amount of the credit shall be
    50  twenty percent of the qualified purchase  and  qualified  rehabilitation
    51  expenditures  of  buildings  and rehabilitations in such zones with such
    52  credit subject to restrictions set forth  in  subdivision  (d)  of  this
    53  section.    This credit will not be allowed if the qualified purchase of
    54  buildings and qualified rehabilitation expenditures  of  buildings  that
    55  are the basis for this credit are included in the calculation of another
    56  credit claimed by the taxpayer under this chapter.

        A. 1373                             3
     1    (b)  For  the  purpose  of this section, the term "qualified purchase"
     2  shall mean the cost or other basis for federal income  tax  purposes  of
     3  acquisition  cost  of  building  for which depreciation is allowed under
     4  section one hundred sixty-eight of the internal revenue code  and  which
     5  is  (1)  nonresidential  property,  (2)  residential property, or (3) an
     6  addition or improvement to property described in paragraph (1) or (2) of
     7  this subdivision.   The  term  "qualified  rehabilitation  expenditures"
     8  shall  mean  qualified  expenditures  as  defined  in  paragraph  (2) of
     9  subsection (c) of section forty-seven of the internal revenue code.
    10    (c) For the purpose of this section, the  term  "upstate  reinvestment
    11  zones" shall mean an area:  (i) that, according to the most recent Amer-
    12  ican  community survey by the United States census bureau, lies within a
    13  census tract with a poverty rate equal to or greater than twenty percent
    14  or an unemployment rate that is equal to or greater than  one  and  one-
    15  half  percent  times  the national average unemployment rate and (ii) is
    16  within the incorporated boundaries of a village, town or city  having  a
    17  population of less than one million.
    18    (d)  The  sum of all tax credits granted pursuant to the provisions of
    19  this section shall not exceed five hundred thousand dollars for any  one
    20  taxpayer  including  such  party's affiliates and related entities for a
    21  taxable year.  If the taxpayer is a partner in a partnership, member  of
    22  a  limited liability company or shareholder of a New York S corporation,
    23  then the annual limit by the preceding sentence shall be applied at  the
    24  entity  level, so that the aggregate credit allowed to all the partners,
    25  members or shareholders of each such entity in the taxable year does not
    26  exceed the five hundred thousand dollar annual limit.
    27    (e) (1) The  aggregate  amount  of  tax  credits  allowed  under  this
    28  section,  in  any taxable year shall be ten million dollars. Such aggre-
    29  gate amount of credits shall be allocated by the commissioner of econom-
    30  ic development among taxpayers in the order in  which  applications  are
    31  received.  If  the  total amount of allocated credits applied for in any
    32  particular year exceeds the aggregate amount of tax credits allowed  for
    33  such  year  under  this  section, such excess shall be treated as having
    34  been applied for on the first day of the subsequent year.
    35    (2) The commissioner of the department of economic  development  shall
    36  promulgate  regulations by December thirty-first, two thousand twenty to
    37  establish procedures for the  allocation  of  tax  credits  as  required
    38  pursuant  to section four hundred sixty of the economic development law.
    39  Such rules and  regulations  shall  include  provisions  describing  the
    40  application  process, the due dates for such applications, the standards
    41  which shall be used to evaluate the applications, the documentation that
    42  will be provided to taxpayers to  substantiate  to  the  department  the
    43  amount  of  tax  credits  allocated  to  such  taxpayers, and such other
    44  provisions as deemed necessary and appropriate.
    45    (f) The credit allowed under this section for any taxable  year  shall
    46  not  reduce the tax due for such year to less than the amount prescribed
    47  in paragraph (d) of subdivision one of section two hundred ten  of  this
    48  chapter.   Provided, however, that if the amount of the credit allowable
    49  under this section for any taxable year reduces the tax to such  amount,
    50  the  excess  shall be treated as an overpayment of tax to be credited or
    51  refunded in accordance with  the  provisions  of  section  one  thousand
    52  eighty-six   of  this  chapter.  Provided  further,  the  provisions  of
    53  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
    54  notwithstanding, no interest shall be paid thereon.
    55    (g)  The  taxpayer  may  be  required  to attach to its tax return its
    56  certificate of eligibility issued by the commissioner of economic devel-

        A. 1373                             4
     1  opment pursuant to section four hundred sixty of the  economic  develop-
     2  ment law.
     3    (h)  Where  the  building which was the basis for the allowance of the
     4  credit provided for under this section is sold before the close  of  the
     5  recapture  period,  the  taxpayer shall add back, in the taxable year in
     6  which such building was sold, the credit recapture  amount.  The  credit
     7  recapture  amount  is  the  product of the credit amount claimed and the
     8  recapture percentage in accordance with the following table.
     9  If the building is sold within               The recapture percentage
    10  (i) One full year after placed in                      100
    11  service
    12  (ii) One full year after the close of the              80
    13  period described in paragraph (i)
    14  (iii) One full year after the close of the             60
    15  period described in paragraph (ii)
    16  (iv) One full year after the close of the              40
    17  period described in paragraph (iii)
    18  (v) One full year after the close of the               20
    19  period described in paragraph (iv)
    20    (i) Cross-references. For application of the credit  provided  for  in
    21  this section, see the following provisions of this chapter:
    22    (1) Article 9A: section 210-B, subdivision 53.
    23    (2)  Article  22: section 606, subsection (i), paragraph (1), subpara-
    24  graph (B), clause (xliv).
    25    (3) Article 22: section 606, subsection (jjj).
    26    § 3. Section 210-B of the tax law is amended by adding a new  subdivi-
    27  sion 53 to read as follows:
    28    53.  Upstate reinvestment zones tax credit. (a) Allowance of credit. A
    29  taxpayer shall be allowed a  credit,  to  be  computed  as  provided  in
    30  section  forty-four  of  this  chapter,  against the tax imposed by this
    31  article.
    32    (b) Application of credit. The credit allowed under  this  subdivision
    33  for  any  taxable  year may not reduce the tax due for such year to less
    34  than the amount prescribed  in  paragraph  (d)  of  subdivision  one  of
    35  section two hundred ten of this article. However, if the amount of cred-
    36  it  allowed  under this subdivision for any taxable year reduces the tax
    37  to such amount, any amount of credit thus not deductible in such taxable
    38  year will be treated as an overpayment of tax to be credited or refunded
    39  in accordance with the provisions of section one thousand eighty-six  of
    40  this  chapter.  Provided,  however,  the provisions of subsection (c) of
    41  section one thousand eighty-six  of  this  chapter  notwithstanding,  no
    42  interest will be paid thereon.
    43    §  4. Section 606 of the tax law is amended by adding a new subsection
    44  (jjj) to read as follows:
    45    (jjj) Upstate reinvestment zones tax credit. (a) Allowance of  credit.
    46  A  taxpayer  shall  be  allowed  a credit, to be computed as provided in
    47  section forty-four of this chapter, against  the  tax  imposed  by  this
    48  article.
    49    (b)  Application  of credit. If the amount of the credit allowed under
    50  this subsection exceeds the taxpayer's tax for  the  taxable  year,  any
    51  amount  of credit not deductible in that taxable year will be treated as
    52  an overpayment of tax to be credited or refunded in accordance with  the
    53  provisions  of section six hundred eighty-six of this article. Provided,
    54  however, no interest will be paid thereon.

        A. 1373                             5
     1    § 5. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
     2  of  the  tax  law  is  amended  by adding a new clause (xliv) to read as
     3  follows:
     4  (xliv) Upstate reinvestment          Amount of the credit under
     5  zones credit under                   subdivision fifty-three of section
     6  subsection (jjj)                     two hundred ten-B
     7    § 6. This act shall take effect immediately and apply to taxable years
     8  beginning  on or after January 1, 2021. The commissioner of taxation and
     9  finance is authorized to issue regulations  and  guidance  necessary  to
    10  implement this act on or before the effective date.
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