S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4905
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 29, 2019
                                ___________
 
 Introduced  by Sens. RANZENHOFER, FELDER, FUNKE, RITCHIE, SERINO -- read
   twice and ordered printed, and when printed to  be  committed  to  the
   Committee on Budget and Revenue
 
 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 (jjj) to read as follows:
   (JJJ)  CREDIT  FOR REHABILITATION OF DISTRESSED COMMERCIAL PROPERTIES.
 (1) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND
 NINETEEN,  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 PROVIDED THAT
 THE TOTAL AMOUNT OF THE CREDIT APPLIED AGAINST THE TAXPAYER'S TAX FOR  A
 GIVEN YEAR 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10859-01-9

 S. 4905                             2
 
   (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 NINETEEN OR AFTER DECEMBER THIRTY-FIRST, TWO
 THOUSAND TWENTY-FOUR.
   (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.
   (8)  ANY  EXPENDITURE  FOR  WHICH  A  CREDIT  IS  CLAIMED  UNDER  THIS
 SUBSECTION SHALL NOT BE ELIGIBLE FOR ANY OTHER CREDIT UNDER  THIS  CHAP-
 TER.
   §  2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
 of the tax law is amended by adding a  new  clause  (xliv)  to  read  as
 follows:
 (XLIV) CREDIT FOR REHABILITATION      AMOUNT OF CREDIT UNDER
 OF DISTRESSED COMMERCIAL PROPERTIES   SUBDIVISION FIFTY-THREE
 UNDER SUBSECTION (JJJ)                OF SECTION TWO HUNDRED TEN-B
   §  3. Section 210-B of the tax law is amended by adding a new subdivi-
 sion 53 to read as follows:
   53. CREDIT FOR REHABILITATION OF DISTRESSED COMMERCIAL PROPERTIES. (1)
 FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND
 NINETEEN,  A TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED,

 S. 4905                             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 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.
   (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, PROVIDED THAT
 THE  TOTAL AMOUNT OF THE CREDIT APPLIED AGAINST THE TAXPAYER'S TAX FOR A
 GIVEN YEAR 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 NINETEEN OR AFTER DECEMBER THIRTY-FIRST, TWO
 THOUSAND TWENTY-FOUR.
   (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.

 S. 4905                             4
 
   (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.
   (8)  ANY EXPENDITURE FOR WHICH A CREDIT IS CLAIMED UNDER THIS SUBDIVI-
 SION SHALL NOT BE ELIGIBLE FOR ANY OTHER CREDIT UNDER THIS CHAPTER.
   § 4. This act shall take effect immediately and shall apply to taxable
 years beginning on or after January 1, 2019.