NY State Senate Bill 2011-S6979

Senate Bill S6979

2011-2012 Legislative Session

Establishes a credit against income tax for the rehabilitation of distressed residential properties

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Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 19, 2012	referred to investigations and government operations

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2011-S6979 (ACTIVE) - Details

See Assembly Version of this Bill:: A9993
Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §§606 & 210, Tax L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S2739, A4163
2015-2016: S1293, A4398
2017-2018: S2642, A4415
2019-2020: S4906
2021-2022: S5143

2011-S6979 (ACTIVE) - Summary

Establishes a credit against income tax for the rehabilitation of distressed residential properties; allows a credit equal to thirty percent of the qualified rehabilitation expenditures made by the taxpayer with respect to a qualified distressed residential property; requires property that qualifies must be constructed prior to January 1, 1962 in a distressed residential or mixed-use neighborhood.

2011-S6979 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S6979

TITLE OF BILL:
An act to amend the tax law, in relation to establishing a credit
against income tax for the rehabilitation of distressed residential
properties

SUMMARY OF PROVISIONS:
This bill would create a new tax credit program to encourage the reha-
bilitation of distressed residential property.

Section 1 - amends section 606 of the Tax Law by adding a new subsection
(uu) which creates a tax credit for the rehabilitation of distressed
residential property.

(1) For taxable years beginning after January 1, 2012, taxpayers shall
be allowed a credit equal to thirty percent of the qualified
expenditures made by the taxpayer with respect to a qualified
distressed residential property.
(2) The credit shall not exceed $100,000. Credits are allowed in the
taxable year in which the property is deemed a certified
rehabilitation.
(3) Credits may be carried forward, but not more than $25,000 in any
year.
(4) Defines qualified rehabilitation expenditure. Expenditures must be
made after January 1, 2012 and before December 31, 2017.

(5) Defines certified rehabilitation.
(6) Defines qualified distressed residential property.
(7) Provides for recapture of tax credits in the event the
rehabilitated distressed residential property is disposed of within
five years after receiving the credit.

Section 2 - amends subparagraph (B) of paragraph 1 of subsection (i)
of section 606 by adding a new clause (xxxiv) enumerating the new
credit for rehabilitation of distressed residential property.

Section 3 - amends section 210 of the Tax law to add a new subdivision
45.

(1) For taxable years beginning after January 1, 2012, taxpayers shall
be allowed a credit equal to thirty percent of the qualified
expenditures made by the taxpayer with respect to a qualified
distressed residential property.
(2) The credit shall not exceed $100,000. Credits are allowed in the
taxable year in which the property is deemed a certified
rehabilitation.
(3) Credits may be carried forward, but not more than $25,000 in any
year.
(4) Defines qualified rehabilitation expenditure. Expenditures must be
made after January 1, 2012 and before December 31, 2017.
(5) Defines certified rehabilitation.

(6) Defines qualified distressed commercial property.
(7) Provides for recapture of tax credits in the event the
rehabilitated distressed residential property is disposed of within
five years after receiving the credit.

Section 4 - provides that this act shall take effect immediately and
shall apply to taxable years on or after January 1, 2012.

PURPOSE AND JUSTIFICATION:
In many communities across New York State,
whether towns, villages, suburbs or cities, there are areas of
rundown and dilapidated residential buildings. These residential
buildings may have not have received any significant updating for
years, and they are now vacant or under performing properties that
give their whole neighborhoods a rundown appearance and at best are
not attractive places to live. Rehabilitating these properties will
benefit communities, make these areas economically attractive for new
and existing residents and help to revive the economy of our state.
Under this legislation, it will be up to local communities to
identify, by local law , areas that are dilapidated and in need of
rehabilitation, and to confirm that rehabilitation work is completed
to the satisfaction of their building departments and certificates of
occupancy were issued for the work done. Residents and communities,
as well as the state as a whole, will be rewarded with rejuvenated
neighborhoods.

EXISTING LAW:
Various tax credits are offered to encourage activities
that will benefit the state.

PRIOR LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
This act shall take effect immediately.

2011-S6979 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6979

                            I N  S E N A T E

                             April 19, 2012
                               ___________

Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
  when printed to be committed to the Committee  on  Investigations  and
  Government Operations

AN  ACT  to  amend  the  tax  law,  in relation to establishing a credit
  against income tax for the rehabilitation  of  distressed  residential
  properties

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 606 of the tax law  is  amended  by  adding  a  new
subsection (uu) to read as follows:
  (UU)  CREDIT  FOR REHABILITATION OF DISTRESSED RESIDENTIAL PROPERTIES.
(1) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND
TWELVE,  A  TAXPAYER  SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED,
AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT  EQUAL  TO  THIRTY
PERCENT OF THE QUALIFIED REHABILITATION EXPENDITURES MADE BY THE TAXPAY-
ER   WITH  RESPECT  TO  A  QUALIFIED  DISTRESSED  RESIDENTIAL  PROPERTY.
PROVIDED, HOWEVER, THE CREDIT SHALL  NOT  EXCEED  ONE  HUNDRED  THOUSAND
DOLLARS.
  (2)  TAX  CREDITS ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE ALLOWED
IN THE TAXABLE YEAR IN WHICH THE PROPERTY IS DEEMED A CERTIFIED REHABIL-
ITATION.
  (3) IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER  THIS  SUBSECTION  FOR
ANY  TAXABLE  YEAR  SHALL  EXCEED  THE TAXPAYER'S TAX FOR SUCH YEAR, THE
EXCESS MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS,  AND  MAY  BE
APPLIED AGAINST THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS, BUT SHALL NOT
EXCEED TWENTY-FIVE THOUSAND DOLLARS.
  (4)  (A)  THE  TERM  "QUALIFIED REHABILITATION EXPENDITURE" MEANS, FOR
PURPOSES OF THIS SUBSECTION, ANY AMOUNT PROPERLY CHARGEABLE TO A CAPITAL
ACCOUNT:
  (I) IN CONNECTION WITH THE CERTIFIED  REHABILITATION  OF  A  QUALIFIED
DISTRESSED RESIDENTIAL PROPERTY, AND
  (II)  FOR  PROPERTY  FOR  WHICH  DEPRECIATION WOULD BE ALLOWABLE UNDER
SECTION 168 OF THE INTERNAL REVENUE CODE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15277-01-2

S. 6979                             2

  (B) SUCH TERM SHALL NOT INCLUDE (I) THE COST OF ACQUIRING ANY BUILDING
OR INTEREST THEREIN, (II) ANY EXPENDITURE ATTRIBUTABLE TO  THE  ENLARGE-
MENT  OF  AN  EXISTING  BUILDING, OR (III) ANY EXPENDITURE MADE PRIOR TO
JANUARY FIRST, TWO THOUSAND TWELVE OR AFTER DECEMBER  THIRTY-FIRST,  TWO
THOUSAND SEVENTEEN.
  (5)  THE  TERM  "CERTIFIED  REHABILITATION"  MEANS,  FOR  PURPOSES  OF
DISTRESSED RESIDENTIAL PROPERTY IN THIS SUBSECTION,  ANY  REHABILITATION
OF  A  CERTIFIED DISTRESSED RESIDENTIAL PROPERTY WHICH HAS BEEN APPROVED
AND CERTIFIED BY A LOCAL GOVERNMENT AS BEING COMPLETED, WITH  A  CERTIF-
ICATE  OF  OCCUPANCY  ISSUED, AND THAT THE COSTS ARE CONSISTENT WITH THE
WORK COMPLETED. SUCH CERTIFICATION SHALL BE ACCEPTABLE AS PROOF THAT THE
EXPENDITURES RELATED TO SUCH REHABILITATION QUALIFY AS  QUALIFIED  REHA-
BILITATION  EXPENDITURES  FOR PURPOSES OF THE CREDIT ALLOWED UNDER PARA-
GRAPH ONE OF THIS SUBSECTION.
  (6) (A) THE TERM "QUALIFIED RESIDENTIAL PROPERTY" MEANS, FOR  PURPOSES
OF THIS SUBSECTION, A DISTRESSED RESIDENTIAL PROPERTY LOCATED WITHIN NEW
YORK STATE:
  (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED,
  (II)  WHICH  WAS  CONSTRUCTED PRIOR TO JANUARY FIRST, NINETEEN HUNDRED
SIXTY-TWO,
  (III) WHICH IS OWNED BY THE TAXPAYER, AND
  (IV) WHICH IS LOCATED WITHIN A  DISTRESSED  RESIDENTIAL  OR  MIXED-USE
AREA,  AS  IDENTIFIED BY EACH LOCALITY THROUGH LOCAL LAW, THAT IS DEEMED
AN AREA IN NEED OF COMMUNITY RENEWAL DUE TO DILAPIDATION AND VACANCIES.
  (B) IF THE DISTRESSED RESIDENTIAL PROPERTY IS  RENTAL  PROPERTY,  SUCH
PROPERTY  SHALL  HAVE BEEN VACANT FOR AT LEAST SIX MONTHS WHILE ACTIVELY
MARKETED FOR LEASE.
  (C) A BUILDING SHALL BE TREATED AS HAVING BEEN "SUBSTANTIALLY REHABIL-
ITATED" IF THE QUALIFIED REHABILITATION EXPENDITURES IN RELATION TO SUCH
BUILDING TOTAL TEN THOUSAND DOLLARS OR MORE.
  (7) (A) IF THE TAXPAYER DISPOSES OF SUCH TAXPAYER'S  INTEREST  IN  THE
QUALIFIED DISTRESSED RESIDENTIAL PROPERTY, OR SUCH PROPERTY CEASES TO BE
USED  AS  A  RESIDENTIAL  PROPERTY  OF THE TAXPAYER WITHIN FIVE YEARS OF
RECEIVING THE CREDIT UNDER THIS SUBSECTION, THE TAXPAYER'S  TAX  IMPOSED
BY THIS ARTICLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR CESSA-
TION  OCCURS  SHALL  BE INCREASED BY THE RECAPTURE PORTION OF THE CREDIT
ALLOWED UNDER THIS SUBSECTION FOR ALL PRIOR TAXABLE YEARS  WITH  RESPECT
TO SUCH REHABILITATION.
  (B)  FOR PURPOSES OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE RECAPTURE
PORTION SHALL BE THE PRODUCT OF THE AMOUNT  OF  CREDIT  CLAIMED  BY  THE
TAXPAYER MULTIPLIED BY A RATIO, THE NUMERATOR OF WHICH IS EQUAL TO SIXTY
LESS  THE  NUMBER OF MONTHS THE BUILDING IS OWNED OR USED AS RESIDENTIAL
PROPERTY BY THE TAXPAYER AND THE DENOMINATOR OF WHICH IS SIXTY.
  S 2. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax  law  is  amended by adding a new clause (xxxiv) to read as
follows:

(XXXIV) CREDIT FOR REHABILITATION    AMOUNT OF CREDIT
OF DISTRESSED RESIDENTIAL            UNDER SUBDIVISION FORTY-
PROPERTIES UNDER SUBSECTION (UU)     FIVE OF SECTION TWO HUNDRED TEN

  S 3. Section 210 of the tax law is amended by adding a new subdivision
45 to read as follows:
  45. CREDIT FOR REHABILITATION OF  DISTRESSED  RESIDENTIAL  PROPERTIES.
(1)  FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
TWELVE, A TAXPAYER SHALL BE ALLOWED A CREDIT  AS  HEREINAFTER  PROVIDED,

S. 6979                             3

AGAINST  THE  TAX  IMPOSED BY THIS ARTICLE, IN AN AMOUNT EQUAL TO THIRTY
PERCENT OF THE QUALIFIED REHABILITATION EXPENDITURES MADE BY THE TAXPAY-
ER  WITH  RESPECT  TO  A  QUALIFIED  DISTRESSED  RESIDENTIAL   PROPERTY.
PROVIDED,  HOWEVER,  THE  CREDIT  SHALL  NOT EXCEED ONE HUNDRED THOUSAND
DOLLARS.
  (2) TAX CREDITS ALLOWED PURSUANT TO THIS SUBDIVISION SHALL BE  ALLOWED
IN THE TAXABLE YEAR IN WHICH THE PROPERTY IS DEEMED A CERTIFIED REHABIL-
ITATION.
  (3)  IF  THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR
ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S  TAX  FOR  SUCH  YEAR,  THE
EXCESS  MAY  BE  CARRIED OVER TO THE FOLLOWING YEAR OR YEARS, AND MAY BE
APPLIED AGAINST THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS, BUT SHALL NOT
EXCEED TWENTY-FIVE THOUSAND DOLLARS.
  (4) (A) THE TERM "QUALIFIED  REHABILITATION  EXPENDITURE"  MEANS,  FOR
PURPOSES  OF THIS SUBDIVISION, ANY AMOUNT PROPERLY CHARGEABLE TO A CAPI-
TAL ACCOUNT:
  (I) IN CONNECTION WITH THE CERTIFIED  REHABILITATION  OF  A  QUALIFIED
RESIDENTIAL PROPERTY, AND
  (II)  FOR  PROPERTY  FOR  WHICH  DEPRECIATION WOULD BE ALLOWABLE UNDER
SECTION 168 OF THE INTERNAL REVENUE CODE.
  (B) SUCH TERM SHALL NOT INCLUDE (I) THE COST OF ACQUIRING ANY BUILDING
OR INTEREST THEREIN, (II) ANY EXPENDITURE ATTRIBUTABLE TO  THE  ENLARGE-
MENT  OF  AN  EXISTING  BUILDING, OR (III) ANY EXPENDITURE MADE PRIOR TO
JANUARY FIRST, TWO THOUSAND TWELVE OR AFTER DECEMBER  THIRTY-FIRST,  TWO
THOUSAND SEVENTEEN.
  (5)  THE  TERM  "CERTIFIED REHABILITATION" MEANS, FOR PURPOSES OF THIS
SUBDIVISION, ANY REHABILITATION OF A  CERTIFIED  DISTRESSED  RESIDENTIAL
PROPERTY  WHICH HAS BEEN APPROVED AND CERTIFIED BY A LOCAL GOVERNMENT AS
BEING COMPLETED, WITH A CERTIFICATE OF OCCUPANCY ISSUED,  AND  THAT  THE
COSTS  ARE  CONSISTENT WITH THE WORK COMPLETED. SUCH CERTIFICATION SHALL
BE ACCEPTABLE AS PROOF THAT THE EXPENDITURES RELATED TO  SUCH  REHABILI-
TATION  QUALIFY AS QUALIFIED REHABILITATION EXPENDITURES FOR PURPOSES OF
THE CREDIT ALLOWED UNDER PARAGRAPH ONE OF THIS SUBDIVISION.
  (6) (A) THE TERM "QUALIFIED RESIDENTIAL PROPERTY" MEANS, FOR  PURPOSES
OF  THIS  SUBDIVISION,  A DISTRESSED RESIDENTIAL PROPERTY LOCATED WITHIN
NEW YORK STATE:
  (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED,
  (II) WHICH WAS CONSTRUCTED PRIOR TO JANUARY  FIRST,  NINETEEN  HUNDRED
SIXTY-TWO,
  (III) WHICH IS OWNED BY THE TAXPAYER, AND
  (IV)  WHICH  IS  LOCATED  WITHIN A DISTRESSED RESIDENTIAL OR MIXED-USE
AREA, AS IDENTIFIED BY EACH LOCALITY THROUGH LOCAL LAW, THAT  IS  DEEMED
AN AREA IN NEED OF COMMUNITY RENEWAL DUE TO DILAPIDATION AND VACANCIES.
  (B)  IF  THE  DISTRESSED RESIDENTIAL PROPERTY IS RENTAL PROPERTY, SUCH
PROPERTY SHALL HAVE BEEN VACANT FOR AT LEAST SIX MONTHS  WHILE  ACTIVELY
MARKETED FOR LEASE.
  (C) A BUILDING SHALL BE TREATED AS HAVING BEEN "SUBSTANTIALLY REHABIL-
ITATED" IF THE QUALIFIED REHABILITATION EXPENDITURES IN RELATION TO SUCH
BUILDING TOTAL TEN THOUSAND DOLLARS OR MORE.
  (7)  (A)  IF  THE TAXPAYER DISPOSES OF SUCH TAXPAYER'S INTEREST IN THE
QUALIFIED DISTRESSED RESIDENTIAL PROPERTY, OR SUCH PROPERTY CEASES TO BE
USED AS A RESIDENTIAL PROPERTY OF THE  TAXPAYER  WITHIN  FIVE  YEARS  OF
RECEIVING  THE CREDIT UNDER THIS SUBDIVISION, THE TAXPAYER'S TAX IMPOSED
BY THIS ARTICLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR CESSA-
TION OCCURS SHALL BE INCREASED BY THE RECAPTURE PORTION  OF  THE  CREDIT

S. 6979                             4

ALLOWED  UNDER THIS SUBDIVISION FOR ALL PRIOR TAXABLE YEARS WITH RESPECT
TO SUCH REHABILITATION.
  (B)  FOR PURPOSES OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE RECAPTURE
PORTION SHALL BE THE PRODUCT OF THE AMOUNT  OF  CREDIT  CLAIMED  BY  THE
TAXPAYER MULTIPLIED BY A RATIO, THE NUMERATOR OF WHICH IS EQUAL TO SIXTY
LESS  THE  NUMBER OF MONTHS THE BUILDING IS OWNED OR USED AS RESIDENTIAL
PROPERTY BY THE TAXPAYER AND THE DENOMINATOR OF WHICH IS SIXTY.
  S 4. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2012.

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Senate Bill S6979

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Sponsored By

Michael H. Ranzenhofer