STATE OF NEW YORK
________________________________________________________________________
7648--A
IN SENATE
February 2, 2018
___________
Introduced by Sens. VALESKY, KENNEDY, O'MARA, YOUNG -- read twice and
ordered printed, and when printed to be committed to the Committee on
Investigations and Government Operations -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
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 3 and 5 as amended by section 1 of part RR of chapter 59 of the laws of
5 2018, paragraph 4 as amended by section 1 of part F of chapter 59 of the
6 laws of 2013, is amended to read as follows:
7 (oo) Credit for rehabilitation of historic properties. (1) (A) For
8 taxable years beginning on or after January first, two thousand ten and
9 before January first, two thousand twenty-five, a taxpayer shall be
10 allowed a credit as hereinafter provided, against the tax imposed by
11 this article, in an amount equal to [one hundred percent of the amount
12 of credit allowed the taxpayer with respect to a certified historic
13 structure under internal revenue code section 47(c)(3), determined with-
14 out regard to ratably allocating the credit over a five year period as
15 required by subsection (a) of such section 47,] twenty percent of the
16 qualified rehabilitation expenditures with respect to a certified
17 historic structure located within the state. Provided, however, the
18 credit shall not exceed five million dollars. For taxable years begin-
19 ning on or after January first, two thousand twenty-five, a taxpayer
20 shall be allowed a credit as hereinafter provided, against the tax
21 imposed by this article, in an amount equal to thirty percent of [the
22 amount of credit allowed the taxpayer with respect to a certified
23 historic structure under internal revenue code section 47(c)(3), deter-
24 mined without regard to ratably allocating the credit over a five year
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14636-03-8
S. 7648--A 2
1 period as required by subsection (a) of such section 47,] qualified
2 rehabilitation expenditures with respect to a certified historic struc-
3 ture located within the state; provided, however, the credit shall not
4 exceed one hundred thousand dollars. For purposes of this subsection the
5 term "qualified rehabilitation expenditure" means any amount properly
6 chargeable to capital account in connection with the certified rehabili-
7 tation of a qualified historic structure, and for property for which
8 depreciation would be allowable under section 168 of the internal reven-
9 ue code and which is (i) nonresidential real property, (ii) residential
10 rental property, or (iii) an addition or improvement to nonresidential
11 real property or residential rental property.
12 (B) If the taxpayer is a partner in a partnership or a shareholder of
13 a New York S corporation, then the credit cap imposed in subparagraph
14 (A) of this paragraph shall be applied at the entity level, so that the
15 aggregate credit allowed to all the partners or shareholders of each
16 such entity in the taxable year does not exceed the credit cap that is
17 applicable in that taxable year.
18 (2) (A) Tax credits allowed pursuant to this subsection shall be
19 allowed in the taxable year [that the qualified rehabilitation is placed
20 in service under section 167 of the federal internal revenue code] in
21 which the final certification step of the certified rehabilitation is
22 completed as provided in subparagraph (C) of this paragraph.
23 (B) For purposes of this subsection the term "certified rehabili-
24 tation" means any rehabilitation of a certified historic structure which
25 has been approved and certified as being consistent with the standards
26 established by the commissioner of parks, recreation and historic pres-
27 ervation for rehabilitation by the office of parks, recreation and
28 historic preservation, a local government certified pursuant to section
29 101(c)(1) of the national historic preservation act or a local landmark
30 commission established pursuant to section ninety-six-a, as added by
31 chapter five hundred thirteen of the laws of nineteen hundred sixty-
32 eight, or one hundred nineteen-dd of the general municipal law.
33 (C) A certified rehabilitation shall require:
34 (i) an initial certification that the structure meets the definition
35 of the term "certified historic structure";
36 (ii) a second certification, to be issued prior to construction,
37 certifying that the proposed rehabilitation work is consistent with
38 standards established by the commissioner of parks, recreation and
39 historic preservation for rehabilitation; and
40 (iii) a final certification issued when construction is completed,
41 certifying that the work was completed as proposed and that the costs
42 are consistent with the work completed. Such final certification shall
43 be acceptable as proof that the expenditures related to such
44 construction qualify as qualified rehabilitation expenditures for
45 purposes of the credit allowed under either subparagraph (A) or (B) of
46 paragraph one of this subsection.
47 (D) For purposes of this subsection the term "qualified historic
48 structure" means a certified historic structure located within New York
49 state which has been substantially rehabilitated. A certified historic
50 structure shall be considered substantially rehabilitated if the quali-
51 fied rehabilitation expenditures in relation to such structure total
52 five thousand dollars or more.
53 (E) For purposes of this subsection the term "certified historic
54 structure" means any building and its structural components which:
55 (i) is listed in the state or national register of historic places, or
S. 7648--A 3
1 (ii) is located in a state or national registered historic district
2 and is certified as being of historic significance in the district.
3 (3) [If the taxpayer is allowed a credit pursuant to section 47 of the
4 internal revenue code with respect to a qualified rehabilitation that is
5 also the subject of the credit allowed by this subsection and that cred-
6 it pursuant to such section 47 is recaptured pursuant to subsection (a)
7 of section 50 of the internal revenue code, a portion of the credit
8 allowed under this subsection must be added back in the same taxable
9 year and in the same proportion as the federal recapture.] (A) If,
10 before the end of the two-year period beginning on the date of the final
11 certification referred to in subparagraph (C) of paragraph two of this
12 subsection, the taxpayer disposes of such taxpayer's interest in a
13 certified historic structure, or such certified historic structure
14 otherwise ceases to be eligible for the credit allowed under this
15 subsection, the taxpayer's tax imposed by this article for the taxable
16 year in which such disposition occurs shall be increased by the recap-
17 ture portion of the credit allowed under this subsection for all prior
18 taxable years with respect to such rehabilitation.
19 (B) For purposes of subparagraph (A) of this paragraph, the recapture
20 portion shall be the product of the amount of credit claimed by the
21 taxpayer or transferee multiplied by a fraction, the numerator of which
22 is equal to twenty-four less the number of months before the disposition
23 or cessation of the structure occurred. Only the taxpayer that initially
24 received the credit, and no subsequent good faith transferee, shall be
25 responsible in the event of a recapture, reduction, disallowance, or
26 other failure related to such credit.
27 (4) If the amount of the credit allowed under this subsection for any
28 taxable year shall exceed the taxpayer's tax for such year, the excess
29 shall be treated as an overpayment of tax to be credited or refunded in
30 accordance with the provisions of section six hundred eighty-six of this
31 article, provided, however, that no interest shall be paid thereon.
32 (5) To be eligible for the credit allowable under this subsection the
33 rehabilitation project shall be in whole or in part located within a
34 census tract which is identified as being at or below one hundred
35 percent of the state median family income as calculated as of April
36 first of each year using the most recent five year estimate from the
37 American community survey published by the United States Census bureau.
38 If there is a change in the most recent five year estimate, a census
39 tract that qualified for eligibility under this [program] subsection
40 before information about the change was released [will] shall remain
41 eligible for a credit under this subsection for an additional [two
42 calendar years] eighteen months.
43 (6) Nothing contained in this subsection shall be construed to impose
44 a duty on a local landmark commission established pursuant to section
45 ninety-six-a, as added by chapter five hundred thirteen of the laws of
46 nineteen hundred sixty-eight, or one hundred nineteen-dd of the general
47 municipal law or a local government certified pursuant to section
48 101(c)(1) of the national historic preservation act to undertake any
49 review or approval of an application for the certification of the reha-
50 bilitation of historic structures and of rehabilitation expenditures
51 provided for in this subsection.
52 (7)(A)(i) Any taxpayer, eligible for the credit allowed pursuant to
53 this subsection may transfer such credit, in whole or in part, to any
54 individual or entity, without the requirement of transferring any owner-
55 ship interest in the certified historic structure or any interest in the
56 entity which owns the certified historic structure. Transferees are
S. 7648--A 4
1 entitled to apply the credits against the tax with the same effect as if
2 the transferee had incurred the qualified rehabilitation expenditures.
3 Such credit may be transferred only on or after the final certification
4 step of the certified rehabilitation is completed as provided in subpar-
5 agraph (C) of paragraph two of this subsection.
6 (ii) A transferee shall use such credit in the year it is transferred.
7 A transferee may subsequently transfer such credit, however, in no case,
8 may a credit be transferred more than one time after the initial trans-
9 fer. A secondary transferee shall use such credit in the year it is
10 transferred to the secondary transferee. If the credit allowable for any
11 tax year exceeds the transferee's tax liability for that year, the
12 transferee may carry forward and apply in a subsequent taxable year, the
13 portion, as reduced from year to year, of the credit which exceeds such
14 tax for the taxable year; provided, however, that the carryover period
15 cannot exceed five taxable years after the close of the taxable year in
16 which the final certification step of the certified rehabilitation is
17 completed as provided in subparagraph (C) of paragraph two of this
18 subsection.
19 (iii) The provisions of paragraph three of this subsection relating to
20 the recapture of the credit allowed pursuant to this subsection shall
21 not apply to the transfer of such credit as provided for in this para-
22 graph.
23 (B) The commissioner of parks, recreation and historic preservation,
24 in consultation with the department, shall promulgate a form of transfer
25 statement to be filed by the transferor of the credit allowed pursuant
26 to this subsection. The transfer statement shall be in addition to the
27 transfer contract provided in subparagraph (C) of this paragraph. Trans-
28 fer statement forms may be obtained from the commissioner. The transfe-
29 ror shall file a transfer statement and a copy of the proposed transfer
30 contract with the department prior to the transfer and shall further
31 file with the department the executed transfer contract within thirty
32 days after the completed transfer. The transfer statement shall provide
33 the name and federal taxpayer identification number of each transferor
34 and transferee. Further, such statement shall indicate the amount of the
35 credit transferred to each transferee. The statement shall also contain
36 such other information as the department or the commission may from time
37 to time require.
38 (C) Any taxpayer transferring his or her credit allowed pursuant to
39 this subsection shall enter into a transfer contract with the transfer-
40 ee. The transfer contract shall specify the following:
41 (i) a description and address for the certified historic structure or
42 structures which qualified the taxpayer for such credit;
43 (ii) the date in which the final certification step of the certified
44 rehabilitation is completed as provided in subparagraph (C) of paragraph
45 two of this subsection;
46 (iii) the schedule of years during which the credit may be taken and
47 the amount of credit previously taken for the certified historic struc-
48 ture including all previous transferees; and
49 (iv) the amount of credit being transferred.
50 (D) Any taxpayer who is a transferee of the credit allowed pursuant to
51 this subsection may, provided all transfer and other requirements or
52 limitations are met, apply such credit to the tax imposed under this
53 article.
54 § 2. Subdivision 26 of section 210-B of the tax law, as added by
55 section 17 of part A of chapter 59 of the laws of 2014, paragraphs (a),
S. 7648--A 5
1 (c) and (e) as amended by section 2 of part RR of chapter 59 of the laws
2 of 2018, is amended to read as follows:
3 26. Credit for rehabilitation of historic properties. (a) Application
4 of credit. (i) For taxable years beginning on or after January first,
5 two thousand ten, and before January first, two thousand twenty-five, a
6 taxpayer shall be allowed a credit as hereinafter provided, against the
7 tax imposed by this article, in an amount equal to [one hundred percent
8 of the amount of credit allowed the taxpayer for the same taxable year
9 with respect to a certified historic structure under internal revenue
10 code section 47(c)(3), determined without regard to ratably allocating
11 the credit over a five year period as required by subsection (a) of such
12 section 47,] twenty percent of the qualified rehabilitation expenditures
13 with respect to a certified historic structure located within the state.
14 Provided, however, the credit shall not exceed five million dollars.
15 (ii) For taxable years beginning on or after January first, two thou-
16 sand twenty-five, a taxpayer shall be allowed a credit as hereinafter
17 provided, against the tax imposed by this article, in an amount equal to
18 thirty percent of the [amount of credit allowed the taxpayer for the
19 same taxable year determined without regard to ratably allocating the
20 credit over a five year period as required by subsection (a) of section
21 47 of the internal revenue code,] qualified rehabilitation expenditures
22 with respect to a certified historic structure under subsection (c)(3)
23 of section 47 of the internal revenue code with respect to a certified
24 historic structure located within the state. Provided, however, the
25 credit shall not exceed one hundred thousand dollars.
26 [(B)] (b) If the taxpayer is a partner in a partnership or a share-
27 holder in a New York S corporation, then the credit caps imposed in
28 [subparagraph (A)] paragraph (a) of this [paragraph] subdivision shall
29 be applied at the entity level, so that the aggregate credit allowed to
30 all the partners or shareholders of each such entity in the taxable year
31 does not exceed the credit cap that is applicable in that taxable year.
32 [(b)] (c) Tax credits allowed pursuant to this subdivision shall be
33 allowed in the taxable year [that the qualified rehabilitation is placed
34 in service under section 167 of the federal internal revenue code] in
35 which the final certification step of the certified rehabilitation is
36 completed pursuant to subparagraph (C) of paragraph two of subsection
37 (oo) of section six hundred six of this chapter.
38 [(c) If the taxpayer is allowed a credit pursuant to section 47 of the
39 internal revenue code with respect to a qualified rehabilitation that is
40 also the subject of the credit allowed by this subdivision and that
41 credit pursuant to such section 47 is recaptured pursuant to subsection
42 (a) of section 50 of the internal revenue code, a portion of the credit
43 allowed under this subdivision must be added back in the same taxable
44 year and in the same proportion as the federal credit] (d)(i) If, before
45 the end of the two-year period beginning on the date of the final
46 certification referred to in paragraph (b) of this subdivision, the
47 taxpayer disposes of such taxpayer's interest in a certified structure,
48 or such certified historic structure otherwise ceases to be eligible for
49 the credit allowed under this subdivision, the taxpayer's tax imposed by
50 this article for the taxable year in which such disposition occurs shall
51 be increased by the recapture portion of the credit allowed under this
52 paragraph for all prior taxable years with respect to such rehabili-
53 tation.
54 (ii) For purposes of subparagraph (i) of this paragraph, the recapture
55 portion shall be the product of the amount of credit claimed by the
56 taxpayer multiplied by a fraction, the numerator of which is equal to
S. 7648--A 6
1 twenty-four less the number of months before the disposition or cessa-
2 tion of the structure occurred.
3 [(d)] (e) The credit allowed under this subdivision for any taxable
4 year shall not reduce the tax due for such year to less than the amount
5 prescribed in paragraph (d) of subdivision one of section two hundred
6 ten of this article. However, if the amount of the credit allowed under
7 this subdivision for any taxable year reduces the tax to such amount or
8 if the taxpayer otherwise pays tax based on the fixed dollar minimum
9 amount, any amount of credit thus not deductible in such taxable year
10 shall be treated as an overpayment of tax to be recredited or refunded
11 in accordance with the provisions of section one thousand eighty-six of
12 this chapter. Provided, however, the provisions of subsection (c) of
13 section one thousand eighty-eight of this chapter notwithstanding, no
14 interest shall be paid thereon.
15 [(e)] (f) To be eligible for the credit allowable under this subdivi-
16 sion, the rehabilitation project shall be in whole or in part located
17 within a census tract which is identified as being at or below one
18 hundred percent of the state median family income as calculated as of
19 April first of each year using the most recent five year estimate from
20 the American community survey published by the United States Census
21 bureau. If there is a change in the most recent five year estimate, a
22 census tract that qualified for eligibility under this program before
23 information about the change was released will remain eligible for a
24 credit under this subdivision for an additional two calendar years.
25 § 3. Paragraphs 1, 2 and 3 of subdivision (y) of section 1511 of the
26 tax law, as added by chapter 472 of the laws of 2010, subparagraph (A)
27 of paragraph 1 and paragraph 3 as amended by section 3 of part RR of
28 chapter 59 of the laws of 2018, are amended to read as follows:
29 (1) (A) For taxable years beginning on or after January first, two
30 thousand ten and before January first, two thousand twenty-five, a
31 taxpayer shall be allowed a credit as hereinafter provided, against the
32 tax imposed by this article, in an amount equal to [one hundred percent
33 of the amount of credit allowed the taxpayer with respect to a certified
34 historic structure under internal revenue code section 47(c)(3), deter-
35 mined without regard to ratably allocating the credit over a five year
36 period as required by subsection (a) of such section 47,] twenty percent
37 of the qualified rehabilitation expenditures with respect to a certified
38 historic structure located within the state. Provided, however, the
39 credit shall not exceed five million dollars. For taxable years begin-
40 ning on or after January first, two thousand twenty-five, a taxpayer
41 shall be allowed a credit as hereinafter provided, against the tax
42 imposed by this article, in an amount equal to thirty percent of the
43 [amount of credit allowed the taxpayer with respect to a certified
44 historic structure under internal revenue code section 47(c)(3), deter-
45 mined without regard to ratably allocating the credit over a five year
46 period as required by subsection (a) of such section 47] qualified reha-
47 bilitation expenditure with respect to a certified historic structure
48 located within the state. Provided, however, the credit shall not
49 exceed one hundred thousand dollars.
50 (B) If the taxpayer is a partner in a partnership, then the cap
51 imposed in subparagraph (A) of this paragraph shall be applied at the
52 entity level, so that the aggregate credit allowed to all the partners
53 of such partnership in the taxable year does not exceed the credit cap
54 that is applicable in that taxable year.
55 (2) Tax credits allowed pursuant to this subsection shall be allowed
56 in the taxable year [that the qualified rehabilitation is placed in
S. 7648--A 7
1 service under section 167 of the federal internal revenue code] in which
2 the final certification step of the certified rehabilitation is
3 completed pursuant to subparagraph (C) of paragraph two of subsection
4 (oo) of section six hundred six of this chapter.
5 (3) [If the taxpayer is allowed a credit pursuant to section 47 of the
6 internal revenue code with respect to a qualified rehabilitation that is
7 also the subject of the credit allowed by this subdivision and that
8 credit pursuant to such section 47 is recaptured pursuant to subsection
9 (a) of section 50 of the internal revenue code, a portion of the credit
10 allowed under this subdivision in the taxable year the credit was
11 claimed must be added back in the same taxable year and in the same
12 proportion as the federal recapture.] (A) If, before the end of the
13 two-year period beginning on the date of the final certification
14 referred to in paragraph two of this subdivision, the taxpayer disposes
15 of such taxpayer's interest in a certified structure, or such certified
16 historic structure otherwise ceases to be eligible for the credit
17 allowed under this subdivision, the taxpayer's tax imposed by this arti-
18 cle for the taxable year in which such disposition occurs shall be
19 increased by the recapture portion of the credit allowed under this
20 paragraph for all prior taxable years with respect to such rehabili-
21 tation.
22 (B) For purposes of subparagraph (A) of this paragraph, the recapture
23 portion shall be the product of the amount of credit claimed by the
24 taxpayer multiplied by a fraction, the numerator of which is equal to
25 twenty-four less the number of months before the disposition or cessa-
26 tion of the structure occurred.
27 § 4. Subdivision 6 of section 13.15 of the parks, recreation and
28 historic preservation law, as added by chapter 547 of the laws of 2006,
29 is amended to read as follows:
30 6. The office may establish a fee or fees for its processing and
31 review of applications for the certification of the rehabilitation of
32 historic buildings and the approval of rehabilitation expenditures and
33 related work pursuant to [subsection] subsections (oo) and (pp) of
34 section six hundred six of the tax law. All revenues from these fees
35 shall be deposited by the comptroller in the miscellaneous special
36 revenue fund to be credited to the agency's patron services account and
37 shall be used to support the office's historic preservation program.
38 Nothing in this subdivision shall be construed to limit the ability of a
39 local landmark commission established pursuant to section ninety-six-a,
40 as added by chapter five hundred thirteen of the laws of nineteen
41 hundred sixty-eight, or one hundred nineteen-dd of the general municipal
42 law or a local government certified pursuant to section 101(c)(1) of the
43 national historic preservation act to establish and charge fees for its
44 processing and review of applications for the certification of the reha-
45 bilitation of historic buildings and the approval of rehabilitation
46 expenditures.
47 § 5. This act shall take effect immediately and shall apply to taxable
48 years beginning on and after January 1, 2018.
