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S07648 Summary:

BILL NOS07648
 
SAME ASSAME AS A09882
 
SPONSORVALESKY
 
COSPNSRKENNEDY, O'MARA, YOUNG
 
MLTSPNSR
 
Amd 606, 210-B & 1511, Tax L; amd 13.15, Pks & Rec L
 
Relates to removing dependence on federal law to receive the historic properties tax credit in New York state.
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S07648 Memo:

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S07648 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          7648
 
                    IN SENATE
 
                                    February 2, 2018
                                       ___________
 
        Introduced  by  Sen. VALESKY -- read twice and ordered printed, and when
          printed to be committed to the Committee on Investigations and Govern-
          ment Operations
 
        AN ACT to amend the tax law and the parks, recreation and historic pres-
          ervation law, in relation to the  tax  credit  for  rehabilitation  of
          historic properties

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subsection (oo) of section 606 of the tax law,  as  amended
     2  by  chapter  239  of the laws of 2009, paragraph 1 as amended by chapter
     3  472 of the laws of 2010, subparagraph (A) of paragraph 1 and  paragraphs
     4  4  and  5 as amended by section 1 of part F of chapter 59 of the laws of
     5  2013, is amended to read as follows:
     6    (oo) Credit for rehabilitation of historic  properties.  (1)  (A)  For
     7  taxable  years beginning on or after January first, two thousand ten and
     8  before January first, two  thousand  [twenty]  twenty-five,  a  taxpayer
     9  shall  be  allowed  a  credit  as  hereinafter provided, against the tax
    10  imposed by this article, in an amount equal to [one hundred  percent  of
    11  the  amount  of  credit allowed the taxpayer with respect to a certified
    12  historic structure under subsection (a) (2) of section 47 of the federal
    13  internal revenue code] twenty percent of  the  qualified  rehabilitation
    14  expenditures  with  respect  to  a  certified historic structure located
    15  within the state. Provided, however, the credit shall  not  exceed  five
    16  million dollars.  For taxable years beginning on or after January first,
    17  two  thousand [twenty] twenty-five, a taxpayer shall be allowed a credit
    18  as hereinafter provided, against the tax imposed by this article, in  an
    19  amount  equal  to  thirty  percent  of the [amount of credit allowed the
    20  taxpayer with respect to a certified historic structure under subsection
    21  (a)(2) of section 47 of the federal  internal  revenue  code]  qualified
    22  rehabilitation  expenditures with respect to a certified historic struc-
    23  ture located within the state; provided, however, the credit  shall  not
    24  exceed one hundred thousand dollars. For purposes of this subsection the
    25  term  "qualified  rehabilitation  expenditure" means any amount properly
    26  chargeable to capital account in connection with the certified rehabili-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14636-02-8

        S. 7648                             2

     1  tation of a qualified historic structure, and  for  property  for  which
     2  depreciation would be allowable under section 168 of the internal reven-
     3  ue  code and which is (i) nonresidential real property, (ii) residential
     4  rental  property,  or (iii) an addition or improvement to nonresidential
     5  real property or residential rental property.
     6    (B) If the taxpayer is a partner in a partnership or a shareholder  of
     7  a  New  York  S corporation, then the credit cap imposed in subparagraph
     8  (A) of this paragraph shall be applied at the entity level, so that  the
     9  aggregate  credit  allowed  to  all the partners or shareholders of each
    10  such entity in the taxable year does not exceed the credit cap  that  is
    11  applicable in that taxable year.
    12    (2)  (A)  Tax  credits  allowed  pursuant  to this subsection shall be
    13  allowed in the taxable year [that the qualified rehabilitation is placed
    14  in service under section 167 of the federal internal  revenue  code]  in
    15  which  the  final  certification step of the certified rehabilitation is
    16  completed as provided in subparagraph (C) of this paragraph.
    17    (B) For purposes of this  subsection  the  term  "certified  rehabili-
    18  tation" means any rehabilitation of a certified historic structure which
    19  has  been  approved and certified as being consistent with the standards
    20  established by the commissioner of parks, recreation and historic  pres-
    21  ervation  for  rehabilitation  by  the  office  of parks, recreation and
    22  historic preservation, a local government certified pursuant to  section
    23  101(c)(1)  of the national historic preservation act or a local landmark
    24  commission established pursuant to section ninety-six-a or  one  hundred
    25  nineteen-dd of the general municipal law.
    26    (C) A certified rehabilitation shall require:
    27    (i)  an  initial certification that the structure meets the definition
    28  of the term "certified historic structure";
    29    (ii) a second certification,  to  be  issued  prior  to  construction,
    30  certifying  that  the  proposed  rehabilitation  work is consistent with
    31  standards established by  the  commissioner  of  parks,  recreation  and
    32  historic preservation for rehabilitation; and
    33    (iii)  a  final  certification  issued when construction is completed,
    34  certifying that the work was completed as proposed and  that  the  costs
    35  are  consistent with the work completed.  Such final certification shall
    36  be  acceptable  as  proof  that  the  expenditures   related   to   such
    37  construction   qualify  as  qualified  rehabilitation  expenditures  for
    38  purposes of the credit allowed under either subparagraph (A) or  (B)  of
    39  paragraph one of this subsection.
    40    (D)  For  purposes  of  this  subsection  the term "qualified historic
    41  structure" means a certified historic structure located within New  York
    42  state  which  has been substantially rehabilitated. A certified historic
    43  structure shall be considered substantially rehabilitated if the  quali-
    44  fied  rehabilitation  expenditures  in  relation to such structure total
    45  five thousand dollars or more.
    46    (E) For purposes of  this  subsection  the  term  "certified  historic
    47  structure" means any building and its structural components which:
    48    (i) is listed in the state or national register of historic places, or
    49    (ii)  is  located  in a state or national registered historic district
    50  and is certified as being of historic significance in the district.
    51    (3) [If the credit allowed the taxpayer pursuant to section 47 of  the
    52  internal  revenue  code  with  respect  to a qualified rehabilitation is
    53  recaptured pursuant to subsection (a) of  section  50  of  the  internal
    54  revenue code, a portion of the credit allowed under this subsection must
    55  be added back in the same taxable year and in the same proportion as the
    56  federal recapture]  (A) If, before the end of the two-year period begin-

        S. 7648                             3
 
     1  ning  on the date of the final certification referred to in subparagraph
     2  (C) of paragraph two of this subsection, the taxpayer disposes  of  such
     3  taxpayer's interest in a certified historic structure, or such certified
     4  historic  structure  otherwise  ceases  to  be  eligible  for the credit
     5  allowed under this subsection, the taxpayer's tax imposed by this  arti-
     6  cle  for  the  taxable  year  in  which such disposition occurs shall be
     7  increased by the recapture portion of  the  credit  allowed  under  this
     8  subsection  for  all  prior taxable years with respect to such rehabili-
     9  tation.
    10    (B) For purposes of subparagraph (A) of this paragraph, the  recapture
    11  portion  shall  be  the  product  of the amount of credit claimed by the
    12  taxpayer multiplied by a fraction, the numerator of which  is  equal  to
    13  twenty-four  less  the number of months before the disposition or cessa-
    14  tion of the structure occurred.
    15    (4) If the amount of the credit allowed under this subsection for  any
    16  taxable  year  shall exceed the taxpayer's tax for such year, the excess
    17  shall be treated as an overpayment of tax to be credited or refunded  in
    18  accordance with the provisions of section six hundred eighty-six of this
    19  article, provided, however, that no interest shall be paid thereon.
    20    (5)  To be eligible for the credit allowable under this subsection the
    21  rehabilitation project shall be in whole or in  part  located  within  a
    22  census  tract  which  is  identified  as  being  at or below one hundred
    23  percent of the state median family income as calculated as of  [January]
    24  April  first  of each year using the most recent five year estimate from
    25  the American community survey published  by  the  United  States  Census
    26  bureau.  If  there  is a change in the most recent five year estimate, a
    27  census tract that qualified for eligibility under this subsection before
    28  information about the change was released shall remain  eligible  for  a
    29  credit under this subsection for an additional eighteen months.
    30    (6)  Nothing contained in this subsection shall be construed to impose
    31  a duty on a local landmark commission established  pursuant  to  section
    32  ninety-six-a  or one hundred nineteen-dd of the general municipal law or
    33  a local government  certified  pursuant  to  section  101(c)(1)  of  the
    34  national  historic  preservation act to undertake any review or approval
    35  of an application for the certification of the rehabilitation of histor-
    36  ic structures and of rehabilitation expenditures provided  for  in  this
    37  subsection.
    38    §  2. Paragraph 2 of subsection (pp) of section 606 of the tax law, as
    39  added by chapter 547 of the laws of 2006, subparagraphs (A) and  (B)  as
    40  amended  by  section  1  of part V of chapter 59 of the laws of 2013, is
    41  amended to read as follows:
    42    (2) (A) With respect to any particular residence of  a  taxpayer,  the
    43  credit  allowed  under paragraph one of this subsection shall not exceed
    44  fifty thousand dollars for taxable years beginning on or  after  January
    45  first,  two thousand ten and before January first, two thousand [twenty]
    46  twenty-five and twenty-five thousand dollars for taxable years beginning
    47  on or after January first, two thousand [twenty] twenty-five.    In  the
    48  case  of  a  husband and wife, the amount of the credit shall be divided
    49  between them equally or in such other manner as they may both elect.  If
    50  a  taxpayer  incurs qualified rehabilitation expenditures in relation to
    51  more than one residence in the same year, the  total  amount  of  credit
    52  allowed under paragraph one of this subsection for all such expenditures
    53  shall  not  exceed fifty thousand dollars for taxable years beginning on
    54  or after January first, two thousand ten and before January  first,  two
    55  thousand [twenty] twenty-five and twenty-five thousand dollars for taxa-

        S. 7648                             4
 
     1  ble  years  beginning  on  or after January first, two thousand [twenty]
     2  twenty-five.
     3    (B)  For  taxable years beginning on or after January first, two thou-
     4  sand ten and before January first, two thousand [twenty] twenty-five, if
     5  the amount of credit allowable under this subsection  shall  exceed  the
     6  taxpayer's tax for such year, and the taxpayer's New York adjusted gross
     7  income  for such year does not exceed sixty thousand dollars, the excess
     8  shall be treated as an overpayment of tax to be credited or refunded  in
     9  accordance with the provisions of section six hundred eighty-six of this
    10  article,  provided,  however, that no interest shall be paid thereon. If
    11  the taxpayer's New York adjusted gross  income  for  such  year  exceeds
    12  sixty  thousand  dollars,  the excess credit that may be carried over to
    13  the following year or years and may be deducted from the taxpayer's  tax
    14  for  such year or years. For taxable years beginning on or after January
    15  first, two thousand [twenty] twenty-five, if the amount of credit allow-
    16  able under this subsection shall exceed  the  taxpayer's  tax  for  such
    17  year,  the excess may be carried over to the following year or years and
    18  may be deducted from the taxpayer's tax for such year or years.
    19    § 3. Subdivision 26 of section 210-B of  the  tax  law,  as  added  by
    20  section  17  of  part A of chapter 59 of the laws of 2014, is amended to
    21  read as follows:
    22    26. Credit for rehabilitation of historic properties. (a)  Application
    23  of  credit.  (i)  For taxable years beginning on or after January first,
    24  two thousand ten, and before January first, two thousand [twenty]  twen-
    25  ty-five,  a  taxpayer shall be allowed a credit as hereinafter provided,
    26  against the tax imposed by this article, in  an  amount  equal  to  [one
    27  hundred  percent  of  the  amount of credit allowed the taxpayer for the
    28  same taxable year with respect to a certified historic  structure  under
    29  subsection  (c)(2)  of  section  47 of the internal revenue code] twenty
    30  percent of the qualified rehabilitation expenditures with respect  to  a
    31  certified  historic structure located within the state. Provided, howev-
    32  er, the credit shall not exceed five million dollars.
    33    (ii) For taxable years beginning on or after January first, two  thou-
    34  sand [twenty] twenty-five, a taxpayer shall be allowed a credit as here-
    35  inafter  provided, against the tax imposed by this article, in an amount
    36  equal to thirty percent of the [amount of credit  allowed  the  taxpayer
    37  for the same taxable year with respect to a certified historic structure
    38  under  subsection  (c)(3)  of  section  47 of the internal revenue code]
    39  qualified  rehabilitation  expenditures  with  respect  to  a  certified
    40  historic  structure  located  within the state.   Provided, however, the
    41  credit shall not exceed one hundred thousand dollars.
    42    [(B)] (b) If the taxpayer is a partner in a partnership  or  a  share-
    43  holder  in  a  New  York  S corporation, then the credit caps imposed in
    44  [subparagraph (A)] paragraph (a) of this [paragraph]  subdivision  shall
    45  be  applied at the entity level, so that the aggregate credit allowed to
    46  all the partners or shareholders of each such entity in the taxable year
    47  does not exceed the credit cap that is applicable in that taxable year.
    48    [(b)] (c) Tax credits allowed pursuant to this  subdivision  shall  be
    49  allowed in the taxable year [that the qualified rehabilitation is placed
    50  in  service  under section 167 of the federal internal revenue code]  in
    51  which the final certification step of the  certified  rehabilitation  is
    52  completed  pursuant  to  subparagraph (C) of paragraph two of subsection
    53  (oo) of section six hundred six of this chapter.
    54    [(c) If the credit allowed the taxpayer pursuant to section 47 of  the
    55  internal  revenue  code  with  respect  to a qualified rehabilitation is
    56  recaptured pursuant to subsection (a) of  section  50  of  the  internal

        S. 7648                             5

     1  revenue code, a portion of the credit allowed under this subsection must
     2  be added back in the same taxable year and in the same proportion as the
     3  federal  credit] (d)(i) If, before the end of the two-year period begin-
     4  ning on the date of the final certification referred to in paragraph (b)
     5  of  this  subdivision, the taxpayer disposes of such taxpayer's interest
     6  in a certified structure, or such certified historic structure otherwise
     7  ceases to be eligible for the credit allowed under this subdivision, the
     8  taxpayer's tax imposed by this article for the  taxable  year  in  which
     9  such  disposition  occurs shall be increased by the recapture portion of
    10  the credit allowed under this paragraph for all prior taxable years with
    11  respect to such rehabilitation.
    12    (ii) For purposes of subparagraph (i) of this paragraph, the recapture
    13  portion shall be the product of the amount  of  credit  claimed  by  the
    14  taxpayer  multiplied  by  a fraction, the numerator of which is equal to
    15  twenty-four less the number of months before the disposition  or  cessa-
    16  tion of the structure occurred.
    17    [(d)]  (e)  The  credit allowed under this subdivision for any taxable
    18  year shall not reduce the tax due for such year to less than the  amount
    19  prescribed  in  paragraph  (d) of subdivision one of section two hundred
    20  ten of this article. However, if the amount of the credit allowed  under
    21  this  subdivision for any taxable year reduces the tax to such amount or
    22  if the taxpayer otherwise pays tax based on  the  fixed  dollar  minimum
    23  amount,  any  amount  of credit thus not deductible in such taxable year
    24  shall be treated as an overpayment of tax to be recredited  or  refunded
    25  in  accordance with the provisions of section one thousand eighty-six of
    26  this chapter. Provided, however, the provisions  of  subsection  (c)  of
    27  section  one  thousand  eighty-eight of this chapter notwithstanding, no
    28  interest shall be paid thereon.
    29    [(e)] (f) To be eligible for the credit allowable under this  subdivi-
    30  sion,  the  rehabilitation  project shall be in whole or in part located
    31  within a census tract which is identified  as  being  at  or  below  one
    32  hundred  percent  of  the state median family income as calculated as of
    33  January first of each year using the most recent five year estimate from
    34  the American community survey published  by  the  United  States  Census
    35  bureau.
    36    §  4.  Paragraphs 1, 2 and 3 of subdivision (y) of section 1511 of the
    37  tax law, as added by chapter 472 of the laws of 2010,  subparagraph  (A)
    38  of  paragraph  1  as amended by section 4 of part F of chapter 59 of the
    39  laws of 2013, are amended to read as follows:
    40    (1) (A) For taxable years beginning on or  after  January  first,  two
    41  thousand   ten   and   before   January  first,  two  thousand  [twenty]
    42  twenty-five, a  taxpayer  shall  be  allowed  a  credit  as  hereinafter
    43  provided, against the tax imposed by this article, in an amount equal to
    44  [one  hundred  percent of the amount of credit allowed the taxpayer with
    45  respect to a certified historic structure  under  subsection  (a)(2)  of
    46  section  47  of the federal internal revenue code] twenty percent of the
    47  qualified  rehabilitation  expenditures  with  respect  to  a  certified
    48  historic  structure  located  within  the  state. Provided, however, the
    49  credit shall not exceed five million dollars.  For taxable years  begin-
    50  ning  on  or  after  January first, two thousand [twenty] twenty-five, a
    51  taxpayer shall be allowed a credit as hereinafter provided, against  the
    52  tax imposed by this article, in an amount equal to thirty percent of the
    53  [amount  of  credit  allowed  the  taxpayer  with respect to a certified
    54  historic structure under subsection (a)(2) of section 47 of the  federal
    55  internal revenue code] qualified rehabilitation expenditure with respect

        S. 7648                             6
 
     1  to  a  certified  historic structure located within the state. Provided,
     2  however, the credit shall not exceed one hundred thousand dollars.
     3    (B)  If  the  taxpayer  is  a  partner  in a partnership, then the cap
     4  imposed in subparagraph (A) of this paragraph shall be  applied  at  the
     5  entity  level,  so that the aggregate credit allowed to all the partners
     6  of such partnership in the taxable year does not exceed the  credit  cap
     7  that is applicable in that taxable year.
     8    (2)  Tax  credits allowed pursuant to this subsection shall be allowed
     9  in the taxable year [that the  qualified  rehabilitation  is  placed  in
    10  service under section 167 of the federal internal revenue code] in which
    11  the   final  certification  step  of  the  certified  rehabilitation  is
    12  completed pursuant to subparagraph (C) of paragraph  two  of  subsection
    13  (oo) of section six hundred six of this chapter.
    14    (3)  [If the credit allowed the taxpayer pursuant to section 47 of the
    15  internal revenue code with respect  to  a  qualified  rehabilitation  is
    16  recaptured  pursuant  to  subsection  (a)  of section 50 of the internal
    17  revenue code, a portion of the credit allowed under this  subsection  in
    18  the  taxable  year the credit was claimed must be added back in the same
    19  taxable year and in the same proportion as the  federal  recapture]  (A)
    20  If,  before  the end of the two-year period beginning on the date of the
    21  final certification referred to in paragraph two  of  this  subdivision,
    22  the  taxpayer disposes of such taxpayer's interest in a certified struc-
    23  ture, or such certified historic structure otherwise ceases to be eligi-
    24  ble for the credit allowed under this subdivision,  the  taxpayer's  tax
    25  imposed  by  this article for the taxable year in which such disposition
    26  occurs shall be increased by the recapture portion of the credit allowed
    27  under this paragraph for all prior taxable years with  respect  to  such
    28  rehabilitation.
    29    (B)  For purposes of subparagraph (A) of this paragraph, the recapture
    30  portion shall be the product of the amount  of  credit  claimed  by  the
    31  taxpayer  multiplied  by  a fraction, the numerator of which is equal to
    32  twenty-four less the number of months before the disposition  or  cessa-
    33  tion of the structure occurred.
    34    §  5.  Subdivision  6  of  section  13.15 of the parks, recreation and
    35  historic preservation law, as added by chapter 547 of the laws of  2006,
    36  is amended to read as follows:
    37    6.  The  office  may  establish  a  fee or fees for its processing and
    38  review of applications for the certification of  the  rehabilitation  of
    39  historic  buildings  and the approval of rehabilitation expenditures and
    40  related work pursuant to  [subsection]  subsections  (oo)  and  (pp)  of
    41  section  six  hundred  six  of the tax law. All revenues from these fees
    42  shall be deposited by  the  comptroller  in  the  miscellaneous  special
    43  revenue  fund to be credited to the agency's patron services account and
    44  shall be used to support the  office's  historic  preservation  program.
    45  Nothing in this subdivision shall be construed to limit the ability of a
    46  local  landmark  commission established pursuant to section ninety-six-a
    47  or one hundred nineteen-dd of the  general  municipal  law  or  a  local
    48  government  certified  pursuant  to  section  101(c)(1)  of the national
    49  historic preservation act to establish and charge fees for its  process-
    50  ing  and  review  of applications for the certification of the rehabili-
    51  tation of historic buildings and the approval of rehabilitation expendi-
    52  tures.
    53    § 6. This act shall take effect immediately and shall apply to taxable
    54  years beginning on and after January 1, 2018.
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