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A03607 Summary:

BILL NOA03607
 
SAME ASNo Same As
 
SPONSORPretlow
 
COSPNSR
 
MLTSPNSR
 
Amd §21, Tax L
 
Relates to the brownfield redevelopment tax credit; provides that in the event that the qualified site is owned by, or was acquired by a taxpayer from, a municipality and such municipality is a volunteer under the brownfield site clean-up agreement with respect to such qualified site, then the amount of the credit shall be reduced; defines "infrastructure work"; makes related amendments.
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A03607 Actions:

BILL NOA03607
 
02/03/2023referred to ways and means
01/03/2024referred to ways and means
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A03607 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A3607
 
SPONSOR: Pretlow
  TITLE OF BILL: An act to amend the tax law, in relation to brownfield redevelopment tax credit   PURPOSE: This bill would provide an alternative funding mechanism to munici- palities to encourage the cleanup of brown fields throughout the state.   SUMMARY OF PROVISIONS: Section 1: subdivision (a) of section 21 of the tax law, as amended by section 1 of part H of chapter. 577 of the laws of 2004, paragraph 1 as amended by section 39 of part A of chapter 59 of the laws of 2014, Section 2: Paragraph 3 of subdivisions (b)of section 21 of the tax law, as amended by chapter 420 of the laws of 2006 Section 3: Effective date:   JUSTIFICATION: New York State enacted the brownfield redevelopment program to encourage the cleanup and development of environmentally contaminated sites throughout the state,. To provide an incentive for developers to partic- ipate, a brownfield redevelopment tax credit was provided which consists of the following 3 components - site preparation costs, costs of tangi- ble personal property, and on-site groundwater remediation costs. As participation in the program increases, there may be circumstance in which a municipality may incur certain costs relation to preparation and remediation. Under current law, these costs would be borne directly by the locality. This proposal would provide. an incentive to a munici- pality, if they choose to participate, to qualify for a reimbursement of the specified costs they may incur in brownfield redevelopment. This legislation would encourage localities throughout the State to increase their investment in cleaning up and developing environmentally contam- inated sites.   LEGISLATIVE HISTORY: A1892 2021-2022 referred to ways & means A2666 2019-2020 referred to ways & means A1780 2017/2018 referred to ways and means A 3618 2013-14 referred to ways & means new bill. 01/07/15 referred to ways and means 01/06/16 referred to ways and means   FISCAL IMPLICATIONS: Because the reimbursement is offset directly by a reduction in the tax credit, this bill would have no impact on the financial plan.   EFFECTIVE DATE: This act shall take effect immediately, and shall apply to all qualified sites from the date on which the brownfield site clean-up agreement with respect to such qualified site was entered into, including without limi- tation those brownfield site clean-up agreements entered into prior to the date hereof.
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A03607 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          3607
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 3, 2023
                                       ___________
 
        Introduced  by M. of A. PRETLOW -- read once and referred to the Commit-
          tee on Ways and Means
 
        AN ACT to amend the tax law, in relation to brownfield redevelopment tax
          credit
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Paragraphs 1, 2, 4, 6 and 7 of subdivision (a) of section
     2  21 of the tax law, paragraph 1 as amended by section 39  of  part  A  of
     3  chapter 59 of the laws of 2014, paragraph 2 as amended by section 4  and
     4  paragraph 4 as amended by section 5 of part LL of chapter 58 of the laws
     5  of  2022  and  paragraphs  6  and 7 as amended by section 1 of part H of
     6  chapter 577 of the laws of 2004, are amended to read as follows:
     7    (1) General. A taxpayer subject to tax  under  article  nine,  nine-A,
     8  twenty-two  or  thirty-three  of  this chapter shall be allowed a credit
     9  against such tax, pursuant to the provisions referenced  in  subdivision
    10  (f)  of  this  section.  Such  credit shall be allowed with respect to a
    11  qualified site, as such term is defined in paragraph one of  subdivision
    12  (b) of this section. The amount of the credit in a taxable year shall be
    13  the  sum of the credit components specified in paragraphs two, three and
    14  four of this subdivision applicable in such year.   Notwithstanding  the
    15  foregoing,  in  the  event  that  the qualified site is owned by, or was
    16  acquired by a taxpayer from, a municipality, as such term is defined  in
    17  subdivision twenty-one of section 27-1405 of the environmental conserva-
    18  tion  law,  the  credit shall be reduced by the following amounts to the
    19  extent that they were incurred after the date  of  the  brownfield  site
    20  cleanup  agreement  executed by the taxpayer and the department of envi-
    21  ronmental conservation pursuant to section 27-1409 of the  environmental
    22  conservation  law  (A)  the  amount  of  all  site preparation costs and
    23  on-site groundwater remediation costs undertaken  specifically  on  such
    24  qualified  site by or at the expense of such municipality (or any affil-
    25  iated municipality thereof), (B) the amount of all costs of all  infras-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08373-01-3

        A. 3607                             2
 
     1  tructure  work,  as defined below, undertaken specifically on the quali-
     2  fied site by or at the expense of such municipality (or  any  affiliated
     3  municipality  thereof), and (C) the amount of all costs for improvements
     4  undertaken  by  or at the expense of the municipality (or any affiliated
     5  municipality thereof), specifically on any portion of the qualified site
     6  which will be available to the general public free of  charge  or  which
     7  improvements  are made for environmental conservation purposes; and such
     8  amount of all costs under subparagraphs (A), (B) and (C) of  this  para-
     9  graph  shall  instead be paid by the tax department to such municipality
    10  (or  any  affiliated  municipality  designated  by  such  municipality);
    11  provided,  however,  that  such  municipality may waive its right to any
    12  such payment, in whole or in part, by  filing  written  notice  of  such
    13  waiver  with the commissioner on or before the date the taxpayer files a
    14  return claiming the credit described in this section, and the amount  of
    15  any  such  payment so waived shall not be a reduction against the credit
    16  available to the taxpayer  hereunder.  For  purposes  of  this  section,
    17  "infrastructure  work"  means  all  improvements  which  are customarily
    18  constructed or installed by a municipality and are  generally  necessary
    19  for  a  site to be developed, including without limitation roads, curbs,
    20  sidewalks,  sewers,  utilities,  bulkheading,  drainage  facilities  and
    21  related earthwork and landscaping.
    22    (2)  Site  preparation  credit  component. The site preparation credit
    23  component shall be equal to the applicable percentage of the site prepa-
    24  ration costs paid or incurred by the taxpayer or  the  municipality  (or
    25  any  affiliated  municipality thereof) entitled to a payment pursuant to
    26  paragraph one of this subdivision with respect to a qualified site.  The
    27  credit  component  amount  so determined with respect to a site's quali-
    28  fication for a certificate of completion shall be allowed for the  taxa-
    29  ble  year  in  which the effective date of the certificate of completion
    30  occurs. The credit component amount determined other than  with  respect
    31  to such qualification shall be allowed for the taxable year in which the
    32  improvement to which the applicable costs apply is placed in service for
    33  up  to  five  taxable  years  after  the issuance of such certificate of
    34  completion; provided, however, that for any qualified site  to  which  a
    35  certificate of completion is issued on or after July first, two thousand
    36  fifteen  but  on  or before June twenty-fourth, two thousand twenty-one,
    37  the site preparation credit component for such costs  shall  be  allowed
    38  for  up to seven taxable years after the issuance of such certificate of
    39  completion.
    40    (4) On-site groundwater  remediation  credit  component.  The  on-site
    41  groundwater  remediation credit component shall be equal to the applica-
    42  ble percentage of the on-site  groundwater  remediation  costs  paid  or
    43  incurred  by the taxpayer or the municipality (or any affiliated munici-
    44  pality thereof) entitled to a payment pursuant to paragraph one of  this
    45  subdivision  with  respect  to a qualified site (to the extent that such
    46  groundwater remediation costs are not included in the  determination  of
    47  the  site  preparation credit or the cost or other basis included in the
    48  determination of the tangible property credit). The credit component  so
    49  determined  for costs incurred and paid with respect to and prior to the
    50  issuance of a certificate of completion shall be allowed for the taxable
    51  year in which the effective date of the issuance  of  a  certificate  of
    52  completion  occurs.  The  credit  component amount determined in taxable
    53  years after the effective date of  the  issuance  of  a  certificate  of
    54  completion shall be allowed in the taxable year such qualified costs are
    55  incurred  and  paid  for  up to five taxable years after the issuance of
    56  such certificate of completion; provided, however, that with respect  to

        A. 3607                             3
 
     1  any qualified site for which a certificate of completion has been issued
     2  on or after July first, two thousand fifteen but on or before June twen-
     3  ty-fourth,  two  thousand twenty-one, the credit component amount deter-
     4  mined  in  taxable  years  after the effective date of the issuance of a
     5  certificate of completion shall be allowed  in  the  taxable  year  such
     6  qualified  costs  are  incurred  and  paid for up to seven taxable years
     7  after the issuance of such certificate of completion.
     8    (6) Site preparation costs and on-site groundwater  remediation  costs
     9  paid  or incurred by the taxpayer or the municipality (or any affiliated
    10  municipality thereof) entitled to a payment pursuant to paragraph one of
    11  this subdivision with respect to a qualified site and the cost or  other
    12  basis  for federal income tax purposes of tangible personal property and
    13  other tangible property, including buildings and  structural  components
    14  of  buildings,  which  constitute qualified tangible property shall only
    15  include costs paid or incurred by the taxpayer or the  municipality  (or
    16  any  affiliated  municipality thereof) entitled to a payment pursuant to
    17  paragraph one of this subdivision on or after the date of the brownfield
    18  site cleanup agreement executed by the taxpayer and  the  department  of
    19  environmental  conservation  pursuant to section 27-1409 of the environ-
    20  mental conservation law.
    21    (7) The amount of any grant received from  the  federal,  state  or  a
    22  local  government  or  an  instrumentality or public benefit corporation
    23  thereof received by the taxpayer and used to pay for any  of  the  costs
    24  described  in  paragraphs two, three and four of this subdivision, which
    25  was not included in the federal gross income of the taxpayer,  shall  be
    26  subtracted  in  computing  the  credit  components  under  this section;
    27  provided that the foregoing shall not apply to any amounts the source of
    28  which are payments pursuant to paragraph one of this subdivision.
    29    § 2. Paragraph 3 of subdivision (b) of section 21 of the tax  law,  as
    30  amended  by  chapter 420 of the laws of 2006, clause (i) of subparagraph
    31  (B) as amended by section 22 of part BB of chapter 56  of  the  laws  of
    32  2015, is amended to read as follows:
    33    (3)  Qualified  tangible  property.  "Qualified  tangible property" is
    34  property described in either subparagraph (A) or (B) of  this  paragraph
    35  which:
    36    (A)  (i) is depreciable pursuant to section one hundred sixty-seven of
    37  the internal revenue code,
    38    (ii) has a useful life of four years or more,
    39    (iii) has been acquired by purchase as defined in section one  hundred
    40  seventy-nine  (d)  of  the  internal revenue code by the taxpayer or the
    41  municipality (or any affiliated  municipality  thereof)  entitled  to  a
    42  payment pursuant to paragraph one of subdivision (a) of this section,
    43    (iv) has a situs on a qualified site in this state, and
    44    (v)  is  principally  used by the taxpayer for industrial, commercial,
    45  recreational  or  environmental  conservation  purposes  (including  the
    46  commercial development of residential housing); or
    47    (B) (i) is, or when occupied becomes, part of a dwelling whose primary
    48  ownership  structure  is covered under either article nine-B of the real
    49  property law or meets the requirements of  section  216  (b)(1)  of  the
    50  Internal  Revenue  Code  or  is part of an affordable housing project as
    51  defined in subdivision twenty-nine of section 27-1405  of  the  environ-
    52  mental  conservation law, where units are sold as single family homes or
    53  multiple family dwellings;
    54    (ii) has been acquired by purchase (as defined in section one  hundred
    55  seventy-nine  (d)  of  the Internal Revenue Code) by the taxpayer or the

        A. 3607                             4
 
     1  municipality (or any affiliated  municipality  thereof)  entitled  to  a
     2  payment pursuant to paragraph one of subdivision (a) of this section;
     3    (iii) has a situs on a qualified site in this state; and
     4    (iv)  for  purposes of this subparagraph only, and notwithstanding any
     5  other section of law to the contrary,  property  qualifying  under  this
     6  subparagraph  shall  be deemed to be qualified tangible property for the
     7  purposes of paragraph one of subdivision (d) of  this  section;  and  in
     8  addition, for the purposes of this subdivision only, property qualifying
     9  under  this  subparagraph shall be deemed to have been placed in service
    10  for the purposes of paragraph three of subdivision (a) of  this  section
    11  when a certificate of occupancy is issued for such property.
    12    §  3.  This  act  shall take effect immediately and shall apply to all
    13  qualified sites from the date on  which  the  brownfield  site  clean-up
    14  agreement  with respect to such qualified site was entered into, includ-
    15  ing without limitation such brownfield site clean-up agreements  entered
    16  into prior to such effective date.
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