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

                                  6516

                            I N  S E N A T E

                            February 21, 2012
                               ___________

Introduced  by  Sens.  RANZENHOFER,  JOHNSON,  ZELDIN  -- 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  commercial
  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 COMMERCIAL 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 COMMERCIAL 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 COMMERCIAL 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-

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

                                                           LBD14336-02-2

S. 6516                             2

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
SUBSECTION, ANY REHABILITATION  OF  A  CERTIFIED  DISTRESSED  COMMERCIAL
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 SUBSECTION.
  (6) (A) THE TERM "QUALIFIED DISTRESSED COMMERCIAL PROPERTY" MEANS, FOR
PURPOSES OF THIS SUBSECTION, A DISTRESSED  COMMERCIAL  PROPERTY  LOCATED
WITHIN NEW YORK STATE:
  (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED,
  (II) WHICH IS OWNED BY THE TAXPAYER, AND
  (III) WHICH IS LOCATED WITHIN A DISTRESSED COMMERCIAL AREA, AS IDENTI-
FIED  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 COMMERCIAL PROPERTY  IS  RENTAL  PROPERTY,  SUCH
PROPERTY  SHALL  HAVE  BEEN  MORE  THAN THIRTY PERCENT VACANT FOR TWELVE
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 COMMERCIAL PROPERTY, OR SUCH PROPERTY CEASES TO BE
USED AS A COMMERCIAL 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  COMMERCIAL
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 UNDER
OF DISTRESSED COMMERCIAL PROPERTIES   SUBDIVISION FORTY-FIVE
UNDER SUBSECTION (UU)                 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 COMMERCIAL 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 COMMERCIAL 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.

S. 6516                             3

  (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
COMMERCIAL 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 COMMERCIAL
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 DISTRESSED COMMERCIAL PROPERTY" MEANS, FOR
PURPOSES  OF  THIS SUBDIVISION, A DISTRESSED COMMERCIAL PROPERTY LOCATED
WITHIN NEW YORK STATE:
  (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED,
  (II) WHICH IS OWNED BY THE TAXPAYER, AND
  (III) WHICH IS LOCATED WITHIN A DISTRESSED COMMERCIAL AREA, AS IDENTI-
FIED 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  COMMERCIAL PROPERTY IS RENTAL PROPERTY, SUCH
PROPERTY SHALL HAVE BEEN MORE THAN  THIRTY  PERCENT  VACANT  FOR  TWELVE
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 COMMERCIAL PROPERTY, OR SUCH PROPERTY CEASES TO  BE
USED  AS  A  COMMERCIAL  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
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 COMMERCIAL
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.