S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5142
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 25, 2021
                                ___________
 
 Introduced  by  Sen.  RATH  --  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 (kkk) to read as follows:
   (KKK) CREDIT FOR REHABILITATION OF DISTRESSED  COMMERCIAL  PROPERTIES.
 (1)  FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
 TWENTY-ONE,  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
 TAXPAYER 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.
              

                                                            LBD10020-01-1

 S. 5142                             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 TWENTY-ONE OR AFTER DECEMBER THIRTY-FIRST,
 TWO THOUSAND TWENTY-SIX.
   (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 (xlvi) to read as
 follows:
 (XLVI) CREDIT FOR REHABILITATION      AMOUNT OF CREDIT UNDER
 OF DISTRESSED COMMERCIAL PROPERTIES   SUBDIVISION FIFTY-FIVE
 UNDER SUBSECTION (KKK)                OF SECTION TWO HUNDRED TEN-B
   § 3. Section 210-B of the tax law is amended by adding a new  subdivi-
 sion 55 to read as follows:
   55. CREDIT FOR REHABILITATION OF DISTRESSED COMMERCIAL PROPERTIES. (1)
 FOR  TAXABLE  YEARS  BEGINNING  ON  OR AFTER JANUARY FIRST, TWO THOUSAND
 TWENTY-ONE,  A  TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT  AS  HEREINAFTER

 S. 5142                             3
 
 PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT EQUAL TO
 THIRTY  PERCENT OF THE QUALIFIED REHABILITATION EXPENDITURES MADE BY THE
 TAXPAYER 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 TWENTY-ONE OR AFTER DECEMBER THIRTY-FIRST,
 TWO THOUSAND TWENTY-SIX.
   (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. 5142                             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, 2021.