Relates to the tax credit for rehabilitation of historic properties; removes references to the federal rehabilitation tax credit and adds provisions and definitions; increases maximum awards available under such credit.
STATE OF NEW YORK
________________________________________________________________________
9842
IN ASSEMBLY
February 14, 2018
___________
Introduced by M. of A. WOERNER -- read once and referred to the Commit-
tee on Ways and Means
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 seven million dollars in state fiscal year two thousand nineteen--two
17 thousand twenty, nine million dollars in state fiscal year two thousand
18 twenty--two thousand twenty-one and twelve million dollars in state
19 fiscal year two thousand twenty-one--two thousand twenty-two. For taxa-
20 ble years beginning on or after January first, two thousand [twenty]
21 twenty-five, a taxpayer shall be allowed a credit as hereinafter
22 provided, against the tax imposed by this article, in an amount equal to
23 thirty percent of the [amount of credit allowed the taxpayer with
24 respect to a certified historic structure under subsection (a)(2) of
25 section 47 of the federal internal revenue code] qualified rehabili-
26 tation expenditures with respect to a certified historic structure
27 located within the state; provided, however, the credit shall not exceed
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14626-03-8
A. 9842 2
1 one hundred thousand dollars. For purposes of this subsection the term
2 "qualified rehabilitation expenditure" means any amount properly charge-
3 able to capital account in connection with the certified rehabilitation
4 of a qualified historic structure, and for property for which depreci-
5 ation would be allowable under section 168 of the internal revenue code
6 and which is (i) nonresidential real property, (ii) residential rental
7 property, or (iii) an addition or improvement to nonresidential real
8 property or residential rental property.
9 (B) If the taxpayer is a partner in a partnership or a shareholder of
10 a New York S corporation, then the credit cap imposed in subparagraph
11 (A) of this paragraph shall be applied at the entity level, so that the
12 aggregate credit allowed to all the partners or shareholders of each
13 such entity in the taxable year does not exceed the credit cap that is
14 applicable in that taxable year.
15 (2) (A) Tax credits allowed pursuant to this subsection shall be
16 allowed in the taxable year [that the qualified rehabilitation is placed
17 in service under section 167 of the federal internal revenue code] in
18 which the final certification step of the certified rehabilitation is
19 completed as provided in subparagraph (C) of this paragraph.
20 (B) For purposes of this subsection the term "certified rehabili-
21 tation" means any rehabilitation of a certified historic structure which
22 has been approved and certified as being consistent with the standards
23 established by the commissioner of parks, recreation and historic pres-
24 ervation for rehabilitation by the office of parks, recreation and
25 historic preservation, a local government certified pursuant to section
26 101(c)(1) of the national historic preservation act or a local landmark
27 commission established pursuant to section ninety-six-a or one hundred
28 nineteen-dd of the general municipal law.
29 (C) A certified rehabilitation shall require:
30 (i) an initial certification that the structure meets the definition
31 of the term "certified historic structure";
32 (ii) a second certification, to be issued prior to construction,
33 certifying that the proposed rehabilitation work is consistent with
34 standards established by the commissioner of parks, recreation and
35 historic preservation for rehabilitation; and
36 (iii) a final certification issued when construction is completed,
37 certifying that the work was completed as proposed and that the costs
38 are consistent with the work completed. Such final certification shall
39 be acceptable as proof that the expenditures related to such
40 construction qualify as qualified rehabilitation expenditures for
41 purposes of the credit allowed under either subparagraph (A) or (B) of
42 paragraph one of this subsection.
43 (D) For purposes of this subsection the term "qualified historic
44 structure" means a certified historic structure located within New York
45 state which has been substantially rehabilitated. A certified historic
46 structure shall be considered substantially rehabilitated if the quali-
47 fied rehabilitation expenditures in relation to such structure total
48 five thousand dollars or more.
49 (E) For purposes of this subsection the term "certified historic
50 structure" means any building and its structural components which:
51 (i) is listed in the state or national register of historic places, or
52 (ii) is located in a state or national registered historic district
53 and is certified as being of historic significance in the district.
54 (3) [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
A. 9842 3
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 recapture] (A) If, before the end of the two-year period begin-
4 ning on the date of the final certification referred to in subparagraph
5 (C) of paragraph two of this subsection, the taxpayer disposes of such
6 taxpayer's interest in a certified historic structure, or such certified
7 historic structure otherwise ceases to be eligible for the credit
8 allowed under this subsection, the taxpayer's tax imposed by this arti-
9 cle for the taxable year in which such disposition occurs shall be
10 increased by the recapture portion of the credit allowed under this
11 subsection for all prior taxable years with respect to such rehabili-
12 tation.
13 (B) For purposes of subparagraph (A) of this paragraph, the recapture
14 portion shall be the product of the amount of credit claimed by the
15 taxpayer multiplied by a fraction, the numerator of which is equal to
16 twenty-four less the number of months before the disposition or cessa-
17 tion of the structure occurred.
18 (4) If the amount of the credit allowed under this subsection for any
19 taxable year shall exceed the taxpayer's tax for such year, the [excess
20 shall be treated as an overpayment of tax to be credited or refunded in
21 accordance with the provisions of section six hundred eighty-six of this
22 article, provided, however, that no interest shall be paid thereon]
23 taxpayer may carry over and apply such excess to the tax imposed by this
24 article in any of the succeeding five taxable years, the portion, as
25 reduced from year to year, of the credit which exceeds such tax for the
26 taxable year. The carryover period, for any taxpayer, shall not exceed
27 five taxable years after the close of the taxable year in which the
28 final certification step of the certified rehabilitation is completed as
29 provided in subparagraph (C) of paragraph two of this subsection.
30 (5) To be eligible for the credit allowable under this subsection the
31 rehabilitation project shall be in whole or in part located within a
32 census tract which is identified as being at or below one hundred
33 percent of the state median family income as calculated as of [January]
34 April first of each year using the most recent five year estimate from
35 the American community survey published by the United States Census
36 bureau. If there is a change in the most recent five year estimate, a
37 census tract that qualified for eligibility under this program before
38 information about the change was released shall remain eligible for a
39 credit under this subsection for an additional eighteen months.
40 (6) Nothing contained in this subsection shall be construed to impose
41 a duty on a local landmark commission established pursuant to section
42 ninety-six-a or one hundred nineteen-dd of the general municipal law or
43 a local government certified pursuant to section 101(c)(1) of the
44 national historic preservation act to undertake any review or approval
45 of an application for the certification of the rehabilitation of histor-
46 ic structures and of rehabilitation expenditures provided for in this
47 subsection.
48 (7)(A)(i) Any taxpayer, eligible for the credit allowed pursuant to
49 this subsection may transfer such credit, in whole or in part, to any
50 individual or entity, without the requirement of transferring any owner-
51 ship interest in the certified historic structure or any interest in the
52 entity which owns the certified historic structure. Transferees are
53 entitled to apply the credits against the tax with the same effect as if
54 the transferee had incurred the qualified rehabilitation expenditures.
55 Such credit may be transferred only on or after the final certification
A. 9842 4
1 step of the certified rehabilitation is completed as provided in subpar-
2 agraph (C) of paragraph two of this subsection.
3 (ii) A transferee shall use such credit in the year it is transferred.
4 If the credit allowable for any tax year exceeds the transferee's tax
5 liability for that year, the transferee may carry forward and apply in a
6 subsequent taxable year, the portion, as reduced from year to year, of
7 the credit which exceeds such tax for the taxable year; provided, howev-
8 er, that the carryover period cannot exceed five taxable years after the
9 close of the taxable year in which the final certification step of the
10 certified rehabilitation is completed as provided in subparagraph (C) of
11 paragraph two of this subsection.
12 (iii) The provisions of paragraph three of this subsection relating to
13 the recapture of the credit allowed pursuant to this subsection shall
14 also apply to the transfer of such credit as provided for in this para-
15 graph.
16 (B) The commission, in consultation with the department, shall promul-
17 gate a form of transfer statement to be filed by the transferor of the
18 credit allowed pursuant to this subsection. The transfer statement shall
19 be in addition to the transfer contract provided in subparagraph (C) of
20 this paragraph. Transfer statement forms may be obtained from the
21 commission. The transferor shall file a transfer statement and a copy of
22 the proposed transfer contract with the department prior to the transfer
23 and shall further file with the department the executed transfer
24 contract within thirty days after the completed transfer. The transfer
25 statement shall provide the name and federal taxpayer identification
26 number of each transferor and transferee. Further, such statement shall
27 indicate the amount of the credit transferred to each transferee. The
28 statement shall also contain such other information as the department or
29 the commission may from time to time require.
30 (C) Any taxpayer transferring his or her credit allowed pursuant to
31 this subsection shall enter into a transfer contract with the transfer-
32 ee. The transfer contract shall specify the following:
33 (i) a description and address for the certified historic structure or
34 structures which qualified the taxpayer for such credit;
35 (ii) the date in which the final certification step of the certified
36 rehabilitation is completed as provided in subparagraph (C) of paragraph
37 two of this subsection;
38 (iii) the schedule of years during which the credit may be taken and
39 the amount of credit previously taken for the certified historic struc-
40 ture including all previous transferees; and
41 (iv) the amount of credit being transferred.
42 (D) Any taxpayer who is a transferee of the credit allowed pursuant to
43 this subsection may, provided all transfer and other requirements or
44 limitations are met, apply such credit to the tax imposed under this
45 article.
46 § 2. Paragraph 2 of subsection (pp) of section 606 of the tax law, as
47 added by chapter 547 of the laws of 2006, subparagraphs (A) and (B) as
48 amended by section 1 of part V of chapter 59 of the laws of 2013, is
49 amended to read as follows:
50 (2) (A) With respect to any particular residence of a taxpayer, the
51 credit allowed under paragraph one of this subsection shall not exceed
52 fifty thousand dollars for taxable years beginning on or after January
53 first, two thousand ten and before January first, two thousand [twenty]
54 twenty-five and twenty-five thousand dollars for taxable years beginning
55 on or after January first, two thousand [twenty] twenty-five. In the
56 case of a husband and wife, the amount of the credit shall be divided
A. 9842 5
1 between them equally or in such other manner as they may both elect. If
2 a taxpayer incurs qualified rehabilitation expenditures in relation to
3 more than one residence in the same year, the total amount of credit
4 allowed under paragraph one of this subsection for all such expenditures
5 shall not exceed fifty thousand dollars for taxable years beginning on
6 or after January first, two thousand ten and before January first, two
7 thousand [twenty] twenty-five and twenty-five thousand dollars for taxa-
8 ble years beginning on or after January first, two thousand [twenty]
9 twenty-five.
10 (B) For taxable years beginning on or after January first, two thou-
11 sand ten and before January first, two thousand [twenty] twenty-five, if
12 the amount of credit allowable under this subsection shall exceed the
13 taxpayer's tax for such year, and the taxpayer's New York adjusted gross
14 income for such year does not exceed sixty thousand dollars, the excess
15 shall be treated as an overpayment of tax to be credited or refunded in
16 accordance with the provisions of section six hundred eighty-six of this
17 article, provided, however, that no interest shall be paid thereon. If
18 the taxpayer's New York adjusted gross income for such year exceeds
19 sixty thousand dollars, the excess credit that may be carried over to
20 the following year or years and may be deducted from the taxpayer's tax
21 for such year or years. For taxable years beginning on or after January
22 first, two thousand [twenty] twenty-five, if the amount of credit allow-
23 able under this subsection shall exceed the taxpayer's tax for such
24 year, the excess may be carried over to the following year or years and
25 may be deducted from the taxpayer's tax for such year or years.
26 § 3. Subdivision 26 of section 210-B of the tax law, as added by
27 section 17 of part A of chapter 59 of the laws of 2014, is amended to
28 read as follows:
29 26. Credit for rehabilitation of historic properties. (a) Application
30 of credit. (i) For taxable years beginning on or after January first,
31 two thousand ten, and before January first, two thousand [twenty] twen-
32 ty-five, a taxpayer shall be allowed a credit as hereinafter provided,
33 against the tax imposed by this article, in an amount equal to [one
34 hundred percent of the amount of credit allowed the taxpayer for the
35 same taxable year with respect to a certified historic structure under
36 subsection (c)(2) of section 47 of the internal revenue code] twenty
37 percent of the qualified rehabilitation expenditures with respect to a
38 certified historic structure located within the state. Provided, howev-
39 er, the credit shall not exceed [five] seven million dollars in state
40 fiscal year two thousand nineteen--two thousand twenty, nine million
41 dollars in state fiscal year two thousand twenty--two thousand twenty-
42 one and twelve million dollars in state fiscal year two thousand twen-
43 ty-one--two thousand twenty-two.
44 (ii) For taxable years beginning on or after January first, two thou-
45 sand [twenty] twenty-five, a taxpayer shall be allowed a credit as here-
46 inafter provided, against the tax imposed by this article, in an amount
47 equal to thirty percent of the [amount of credit allowed the taxpayer
48 for the same taxable year with respect to a certified historic structure
49 under subsection (c)(3) of section 47 of the internal revenue code]
50 qualified rehabilitation expenditures with respect to a certified
51 historic structure located within the state. Provided, however, the
52 credit shall not exceed one hundred thousand dollars.
53 [(B)] (b) If the taxpayer is a partner in a partnership or a share-
54 holder in a New York S corporation, then the credit caps imposed in
55 [subparagraph (A)] paragraph (a) of this [paragraph] subdivision shall
56 be applied at the entity level, so that the aggregate credit allowed to
A. 9842 6
1 all the partners or shareholders of each such entity in the taxable year
2 does not exceed the credit cap that is applicable in that taxable year.
3 [(b)] (c) Tax credits allowed pursuant to this subdivision shall be
4 allowed in the taxable year [that the qualified rehabilitation is placed
5 in service under section 167 of the federal internal revenue code] in
6 which the final certification step of the certified rehabilitation is
7 completed pursuant to subparagraph (C) of paragraph two of subsection
8 (oo) of section six hundred six of this chapter.
9 [(c) If the credit allowed the taxpayer pursuant to section 47 of the
10 internal revenue code with respect to a qualified rehabilitation is
11 recaptured pursuant to subsection (a) of section 50 of the internal
12 revenue code, a portion of the credit allowed under this subsection must
13 be added back in the same taxable year and in the same proportion as the
14 federal credit] (d)(i) If, before the end of the two-year period begin-
15 ning on the date of the final certification referred to in paragraph (b)
16 of this subdivision, the taxpayer disposes of such taxpayer's interest
17 in a certified structure, or such certified historic structure otherwise
18 ceases to be eligible for the credit allowed under this subdivision, the
19 taxpayer's tax imposed by this article for the taxable year in which
20 such disposition occurs shall be increased by the recapture portion of
21 the credit allowed under this paragraph for all prior taxable years with
22 respect to such rehabilitation.
23 (ii) For purposes of subparagraph (i) of this paragraph, the recapture
24 portion shall be the product of the amount of credit claimed by the
25 taxpayer multiplied by a fraction, the numerator of which is equal to
26 twenty-four less the number of months before the disposition or cessa-
27 tion of the structure occurred.
28 [(d)] (e) The credit allowed under this subdivision for any taxable
29 year shall not reduce the tax due for such year to less than the amount
30 prescribed in paragraph (d) of subdivision one of section two hundred
31 ten of this article. However, if the amount of the credit allowed under
32 this subdivision for any taxable year reduces the tax to such amount or
33 if the taxpayer otherwise pays tax based on the fixed dollar minimum
34 amount, any amount of credit thus not deductible in such taxable year
35 shall be treated as an overpayment of tax to be recredited or refunded
36 in accordance with the provisions of section one thousand eighty-six of
37 this chapter. Provided, however, the provisions of subsection (c) of
38 section one thousand eighty-eight of this chapter notwithstanding, no
39 interest shall be paid thereon.
40 [(e)] (f) To be eligible for the credit allowable under this subdivi-
41 sion, the rehabilitation project shall be in whole or in part located
42 within a census tract which is identified as being at or below one
43 hundred percent of the state median family income as calculated as of
44 January first of each year using the most recent five year estimate from
45 the American community survey published by the United States Census
46 bureau.
47 § 4. Paragraphs 1, 2 and 3 of subdivision (y) of section 1511 of the
48 tax law, as added by chapter 472 of the laws of 2010, subparagraph (A)
49 of paragraph 1 as amended by section 4 of part F of chapter 59 of the
50 laws of 2013, are amended to read as follows:
51 (1) (A) For taxable years beginning on or after January first, two
52 thousand ten and before January first, two thousand [twenty]
53 twenty-five, a taxpayer shall be allowed a credit as hereinafter
54 provided, against the tax imposed by this article, in an amount equal to
55 [one hundred percent of the amount of credit allowed the taxpayer with
56 respect to a certified historic structure under subsection (a)(2) of
A. 9842 7
1 section 47 of the federal internal revenue code] twenty percent of the
2 qualified rehabilitation expenditures with respect to a certified
3 historic structure located within the state. Provided, however, the
4 credit shall not exceed [five] seven million dollars in state fiscal
5 year two thousand nineteen--two thousand twenty, nine million dollars in
6 state fiscal year two thousand twenty--two thousand twenty-one and
7 twelve million dollars in state fiscal year two thousand twenty-one--two
8 thousand twenty-two. For taxable years beginning on or after January
9 first, two thousand [twenty] twenty-five, a taxpayer shall be allowed a
10 credit as hereinafter provided, against the tax imposed by this article,
11 in an amount equal to thirty percent of the [amount of credit allowed
12 the taxpayer with respect to a certified historic structure under
13 subsection (a)(2) of section 47 of the federal internal revenue code]
14 qualified rehabilitation expenditure with respect to a certified histor-
15 ic structure located within the state. Provided, however, the credit
16 shall not exceed one hundred thousand dollars.
17 (B) If the taxpayer is a partner in a partnership, then the cap
18 imposed in subparagraph (A) of this paragraph shall be applied at the
19 entity level, so that the aggregate credit allowed to all the partners
20 of such partnership in the taxable year does not exceed the credit cap
21 that is applicable in that taxable year.
22 (2) Tax credits allowed pursuant to this subsection shall be allowed
23 in the taxable year [that the qualified rehabilitation is placed in
24 service under section 167 of the federal internal revenue code] in which
25 the final certification step of the certified rehabilitation is
26 completed pursuant to subparagraph (C) of paragraph two of subsection
27 (oo) of section six hundred six of this chapter.
28 (3) [If the credit allowed the taxpayer pursuant to section 47 of the
29 internal revenue code with respect to a qualified rehabilitation is
30 recaptured pursuant to subsection (a) of section 50 of the internal
31 revenue code, a portion of the credit allowed under this subsection in
32 the taxable year the credit was claimed must be added back in the same
33 taxable year and in the same proportion as the federal recapture] (A)
34 If, before the end of the two-year period beginning on the date of the
35 final certification referred to in paragraph two of this subdivision,
36 the taxpayer disposes of such taxpayer's interest in a certified struc-
37 ture, or such certified historic structure otherwise ceases to be eligi-
38 ble for the credit allowed under this subdivision, the taxpayer's tax
39 imposed by this article for the taxable year in which such disposition
40 occurs shall be increased by the recapture portion of the credit allowed
41 under this paragraph for all prior taxable years with respect to such
42 rehabilitation.
43 (B) For purposes of subparagraph (A) of this paragraph, the recapture
44 portion shall be the product of the amount of credit claimed by the
45 taxpayer multiplied by a fraction, the numerator of which is equal to
46 twenty-four less the number of months before the disposition or cessa-
47 tion of the structure occurred.
48 § 5. Subdivision 6 of section 13.15 of the parks, recreation and
49 historic preservation law, as added by chapter 547 of the laws of 2006,
50 is amended to read as follows:
51 6. The office may establish a fee or fees for its processing and
52 review of applications for the certification of the rehabilitation of
53 historic buildings and the approval of rehabilitation expenditures and
54 related work pursuant to [subsection] subsections (oo) and (pp) of
55 section six hundred six of the tax law. All revenues from these fees
56 shall be deposited by the comptroller in the miscellaneous special
A. 9842 8
1 revenue fund to be credited to the agency's patron services account and
2 shall be used to support the office's historic preservation program.
3 Nothing in this subdivision shall be construed to limit the ability of a
4 local landmark commission established pursuant to section ninety-six-a
5 or one hundred nineteen-dd of the general municipal law or a local
6 government certified pursuant to section 101(c)(1) of the national
7 historic preservation act to establish and charge fees for its process-
8 ing and review of applications for the certification of the rehabili-
9 tation of historic buildings and the approval of rehabilitation expendi-
10 tures.
11 § 6. This act shall take effect immediately and shall apply to taxable
12 years beginning on and after January 1, 2018.