Bill Text: NY S02643 | 2017-2018 | General Assembly | Amended


Bill Title: Establishes a credit against income tax for the rehabilitation of distressed commercial properties; allows for 30% of the qualified rehabilitation expenditures up to $100,000; requires that to be eligible, the commercial property is located within a distressed commercial area, as identified by each locality through local law, that is deemed an area in need of community renewal due to dilapidation and vacancies; provides that the property which has been substantially rehabilitated is where the qualified rehabilitation expenditures in relation to such building total ten thousand dollars or more.

Spectrum: Moderate Partisan Bill (Republican 5-1)

Status: (Engrossed - Dead) 2018-06-20 - COMMITTED TO RULES [S02643 Detail]

Download: New_York-2017-S02643-Amended.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                         2643--C
            Cal. No. 1338
                               2017-2018 Regular Sessions
                    IN SENATE
                                    January 13, 2017
                                       ___________
        Introduced  by Sens. RANZENHOFER, FELDER, FUNKE, LARKIN, RITCHIE, SERINO
          -- read twice and ordered printed, and when printed to be committed to
          the Committee on Investigations and Government Operations --  reported
          favorably  from  said  committee  and  committed  to  the Committee on
          Finance -- reported favorably from said committee,  ordered  to  first
          and  second  report,  ordered  to a third reading, amended and ordered
          reprinted, retaining its place in the order of third reading -- recom-
          mitted to the Committee on Investigations and Government Operations in
          accordance with Senate Rule 6, sec. 8 --  committee  discharged,  bill
          amended,  ordered reprinted as amended and recommitted to said commit-
          tee -- reported favorably from said committee  and  committed  to  the
          Committee  on  Finance  --  reported  favorably  from  said committee,
          ordered to first report, amended on first report, ordered to a  second
          report  and  ordered  reprinted,  retaining  its place in the order of
          second report
        AN ACT to amend the tax  law,  in  relation  to  establishing  a  credit
          against  income  tax  for  the rehabilitation of distressed commercial
          properties
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1.  Section  606  of  the  tax law is amended by adding a new
     2  subsection (jjj) to read as follows:
     3    (jjj) Credit for rehabilitation of distressed  commercial  properties.
     4  (1)  For taxable years beginning on or after January first, two thousand
     5  eighteen, a taxpayer shall be allowed a credit as hereinafter  provided,
     6  against  the  tax  imposed by this article, in an amount equal to thirty
     7  percent of the qualified rehabilitation expenditures made by the taxpay-
     8  er with respect to a qualified distressed commercial property. Provided,
     9  however, the credit shall not exceed one hundred thousand dollars.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06136-06-8

        S. 2643--C                          2
     1    (2) Tax credits allowed pursuant to this subsection shall  be  allowed
     2  in the taxable year in which the property is deemed a certified rehabil-
     3  itation.
     4    (3)  If  the  amount of the credit allowable under this subsection for
     5  any taxable year shall exceed the taxpayer's  tax  for  such  year,  the
     6  excess  may  be  carried over to the following year or years, and may be
     7  applied against the taxpayer's tax for such year or years provided  that
     8  the  total amount of the credit applied against the taxpayer's tax for a
     9  given year shall not exceed twenty-five thousand dollars.
    10    (4) (A) The term "qualified  rehabilitation  expenditure"  means,  for
    11  purposes of this subsection, any amount properly chargeable to a capital
    12  account:
    13    (i)  in  connection  with  the certified rehabilitation of a qualified
    14  distressed commercial property, and
    15    (ii) for property for which  depreciation  would  be  allowable  under
    16  section 168 of the internal revenue code.
    17    (B) Such term shall not include (i) the cost of acquiring any building
    18  or  interest  therein, (ii) any expenditure attributable to the enlarge-
    19  ment of an existing building, or (iii) any  expenditure  made  prior  to
    20  January first, two thousand eighteen or after December thirty-first, two
    21  thousand twenty-three.
    22    (5)  The  term  "certified rehabilitation" means, for purposes of this
    23  subsection, any rehabilitation  of  a  certified  distressed  commercial
    24  property  which has been approved and certified by a local government as
    25  being completed, with a certificate of occupancy issued,  and  that  the
    26  costs  are  consistent with the work completed. Such certification shall
    27  be acceptable as proof that the expenditures related to  such  rehabili-
    28  tation  qualify as qualified rehabilitation expenditures for purposes of
    29  the credit allowed under paragraph one of this subsection.
    30    (6) (A) The term "qualified distressed commercial property" means, for
    31  purposes of this subsection, a distressed  commercial  property  located
    32  within New York state:
    33    (i) which has been substantially rehabilitated,
    34    (ii) which is owned by the taxpayer, and
    35    (iii) which is located within a distressed commercial area, as identi-
    36  fied  by each locality through local law, that is deemed an area in need
    37  of community renewal due to dilapidation and vacancies.
    38    (B) If the distressed commercial property  is  rental  property,  such
    39  property  shall  have  been  more  than thirty percent vacant for twelve
    40  months while actively marketed for lease.
    41    (C) A building shall be treated as having been "substantially rehabil-
    42  itated" if the qualified rehabilitation expenditures in relation to such
    43  building total ten thousand dollars or more.
    44    (7) (A) If the taxpayer disposes of such taxpayer's  interest  in  the
    45  qualified  distressed commercial property, or such property ceases to be
    46  used as a commercial property of  the  taxpayer  within  five  years  of
    47  receiving  the  credit under this subsection, the taxpayer's tax imposed
    48  by this article for the taxable year in which such disposition or cessa-
    49  tion occurs shall be increased by the recapture portion  of  the  credit
    50  allowed  under  this subsection for all prior taxable years with respect
    51  to such rehabilitation.
    52    (B) For purposes of subparagraph (A) of this paragraph, the  recapture
    53  portion  shall  be  the  product  of the amount of credit claimed by the
    54  taxpayer multiplied by a ratio, the numerator of which is equal to sixty
    55  less the number of months the building is owned or  used  as  commercial
    56  property by the taxpayer and the denominator of which is sixty.

        S. 2643--C                          3
     1    (8)  Any  expenditure  for  which  a  credit  is  claimed  under  this
     2  subsection shall not be eligible for any other credit under  this  chap-
     3  ter.
     4    §  2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
     5  of the tax law is amended by adding a  new  clause  (xliv)  to  read  as
     6  follows:
     7  (xliv) Credit for rehabilitation      Amount of credit under
     8  of distressed commercial properties   subdivision fifty-three
     9  under subsection (jjj)                of section two hundred ten-B
    10    §  3. Section 210-B of the tax law is amended by adding a new subdivi-
    11  sion 53 to read as follows:
    12    53. Credit for rehabilitation of distressed commercial properties. (1)
    13  For taxable years beginning on or  after  January  first,  two  thousand
    14  eighteen,  a taxpayer shall be allowed a credit as hereinafter provided,
    15  against the tax imposed by this article, in an amount  equal  to  thirty
    16  percent of the qualified rehabilitation expenditures made by the taxpay-
    17  er with respect to a qualified distressed commercial property. Provided,
    18  however, the credit shall not exceed one hundred thousand dollars.
    19    (2)  Tax credits allowed pursuant to this subdivision shall be allowed
    20  in the taxable year in which the property is deemed a certified rehabil-
    21  itation.
    22    (3) If the amount of the credit allowable under this  subdivision  for
    23  any  taxable  year  shall  exceed  the taxpayer's tax for such year, the
    24  excess may be carried over to the following year or years,  and  may  be
    25  applied against the taxpayer's tax for such year or years, provided that
    26  the  total amount of the credit applied against the taxpayer's tax for a
    27  given year shall not exceed twenty-five thousand dollars.
    28    (4) (A) The term "qualified  rehabilitation  expenditure"  means,  for
    29  purposes  of this subdivision, any amount properly chargeable to a capi-
    30  tal account:
    31    (i) in connection with the certified  rehabilitation  of  a  qualified
    32  commercial property, and
    33    (ii)  for  property  for  which  depreciation would be allowable under
    34  section 168 of the internal revenue code.
    35    (B) Such term shall not include (i) the cost of acquiring any building
    36  or interest therein, (ii) any expenditure attributable to  the  enlarge-
    37  ment  of  an  existing  building, or (iii) any expenditure made prior to
    38  January first, two thousand eighteen or after December thirty-first, two
    39  thousand twenty-three.
    40    (5) The term "certified rehabilitation" means, for  purposes  of  this
    41  subdivision,  any  rehabilitation  of  a certified distressed commercial
    42  property which has been approved and certified by a local government  as
    43  being  completed,  with  a certificate of occupancy issued, and that the
    44  costs are consistent with the work completed. Such  certification  shall
    45  be  acceptable  as proof that the expenditures related to such rehabili-
    46  tation qualify as qualified rehabilitation expenditures for purposes  of
    47  the credit allowed under paragraph one of this subdivision.
    48    (6) (A) The term "qualified distressed commercial property" means, for
    49  purposes  of  this subdivision, a distressed commercial property located
    50  within New York state:
    51    (i) which has been substantially rehabilitated,
    52    (ii) which is owned by the taxpayer, and
    53    (iii) which is located within a distressed commercial area, as identi-
    54  fied by each locality through local law, that is deemed an area in  need
    55  of community renewal due to dilapidation and vacancies.

        S. 2643--C                          4
     1    (B)  If  the  distressed  commercial property is rental property, such
     2  property shall have been more than  thirty  percent  vacant  for  twelve
     3  months while actively marketed for lease.
     4    (C) A building shall be treated as having been "substantially rehabil-
     5  itated" if the qualified rehabilitation expenditures in relation to such
     6  building total ten thousand dollars or more.
     7    (7)  (A)  If  the taxpayer disposes of such taxpayer's interest in the
     8  qualified distressed commercial property, or such property ceases to  be
     9  used  as  a  commercial  property  of  the taxpayer within five years of
    10  receiving the credit under this subdivision, the taxpayer's tax  imposed
    11  by this article for the taxable year in which such disposition or cessa-
    12  tion  occurs  shall  be increased by the recapture portion of the credit
    13  allowed under this subdivision for all prior taxable years with  respect
    14  to such rehabilitation.
    15    (B)  For purposes of subparagraph (A) of this paragraph, the recapture
    16  portion shall be the product of the amount  of  credit  claimed  by  the
    17  taxpayer multiplied by a ratio, the numerator of which is equal to sixty
    18  less  the  number  of months the building is owned or used as commercial
    19  property by the taxpayer and the denominator of which is sixty.
    20    (8) Any expenditure for which a credit is claimed under this  subdivi-
    21  sion shall not be eligible for any other credit under this chapter.
    22    § 4. This act shall take effect immediately and shall apply to taxable
    23  years beginning on or after January 1, 2018.
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