NY State Senate Bill 2023-S9071

Senate Bill S9071

2023-2024 Legislative Session

Authorizes the pass-through or transfer of the credits for rehabilitation of historic properties

download bill text pdf

Current Bill Status - In Assembly 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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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 06, 2024	referred to ways and means delivered to assembly passed senate
May 30, 2024	ordered to third reading cal.1589 committee discharged and committed to rules
Apr 16, 2024	referred to budget and revenue

Votes

- Jun 6, 2024 - Floor Vote
  S9071
  
  61
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  1
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 6, 2024
      
      aye (61)
      
      Addabbo Jr.
      
      Ashby
      
      Bailey
      
      Borrello
      
      Breslin
      
      Brisport
      
      Brouk
      
      Canzoneri-Fitzpatrick
      
      Chu
      
      Cleare
      
      Comrie
      
      Cooney
      
      Felder
      
      Fernandez
      
      Gallivan
      
      Gianaris
      
      Gonzalez
      
      Gounardes
      
      Griffo
      
      Harckham
      
      Helming
      
      Hinchey
      
      Hoylman-Sigal
      
      Jackson
      
      Kavanagh
      
      Krueger
      
      Lanza
      
      Liu
      
      Mannion
      
      Martinez
      
      Martins
      
      Mattera
      
      May
      
      Mayer
      
      Murray
      
      Myrie
      
      O'Mara
      
      Oberacker
      
      Ortt
      
      Palumbo
      
      Parker
      
      Persaud
      
      Ramos
      
      Rhoads
      
      Rivera
      
      Rolison
      
      Ryan
      
      Salazar
      
      Sanders Jr.
      
      Scarcella-Spanton
      
      Sepúlveda
      
      Serrano
      
      Skoufis
      
      Stavisky
      
      Stec
      
      Stewart-Cousins
      
      Tedisco
      
      Thomas
      
      Webb
      
      Weber
      
      Weik
      
      excused (1)
      
      Walczyk
  May 30, 2024 - Rules Committee Vote
  S9071
  
  13
  
  Aye
  
  0
  
  Nay
  
  7
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: May 30, 2024
      
      aye (13)
      
      Addabbo Jr.
      
      Bailey
      
      Breslin
      
      Comrie
      
      Fernandez
      
      Gianaris
      
      Krueger
      
      Liu
      
      Mayer
      
      Parker
      
      Sepúlveda
      
      Stewart-Cousins
      
      Thomas
      
      aye wr (7)
      
      Gallivan
      
      Griffo
      
      Helming
      
      Lanza
      
      O'Mara
      
      Ortt
      
      Stec

co-Sponsors

2023-S9071 (ACTIVE) - Details

See Assembly Version of this Bill:: A9722
Current Committee:: Assembly Ways And Means
Law Section:: Tax Law
Laws Affected:: Amd §§210-B, 606 & 1511, Tax L; add Art 14-A §§14.15 - 14.18, Pks & Rec L

2023-S9071 (ACTIVE) - Summary

Authorizes the pass-through or transfer of the credits for rehabilitation of historic properties; authorizes the allocation of the credit in a separate manner from any federal certified historic tax credit.

2023-S9071 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9071

SPONSOR: KAVANAGH
 
TITLE OF BILL:

An act to amend the tax law and the parks, recreation and historic pres-
ervation law, in relation to authorizing the pass-through or transfer of
the credits for rehabilitation of historic properties

 
PURPOSE OF BILL:

To allow for greater allocation of the New York State Historic Tax Cred-
it to parties or investors currently ineligible to receive this credit,
and to permit non-profit entities to serve as a Historic Tax Credit
conduit to reduce the state capital needed to generate affordable hous-
ing.

 
SUMMARY OF PROVISIONS:

Sections one through three of this bill amend three separate provisions
of the New York Tax Law by adding the same language to each provision,
respectively.

Section one of the bill amends subdivision 26 of section 210-B of the
tax law by adding new paragraphs (g) and (h). Subsection (i) of para-
graph (g) permits bifurcation of the federal rehabilitation credit and
New York State historic rehabilitation tax credit (HTC), as it author-
izes the allocation of HTC with respect to a federally certified histor-
ic structure to investors and pass-through entities other than those to
which the federal tax credit has been allocated on said property.

Subsection (ii) of paragraph (g) permits tenants of certified historic
structures subject to a lease arrangement to receive a transfer of the
HTC from a landlord. Where the landlord of a certified historic struc-
ture under a lease arrangement elects to pass the federal rehabilitation
credit through to the tenant taxpayer, the landlord may opt to either
retain the HTC or to also pass it down to the tenant taxpayer.
Subsection (ii) also defines the term "landlord" for purposes of this
subdivision.  Subsection (iii) of paragraph (g) identifies article 14-A
of the parks, recreation and historic preservation law as setting forth
the parameters for transferring the HTC.

Paragraph (h) directs the commissioner to annually report on the aggre-
gate amount of credits claimed pursuant to this subdivision on returns
filed during the preceding calendar year and to make such report public-
ly available on the department's website.

Section two of the bill amends subsection (oo) of section 606 of the tax
law by adding new paragraphs 7 and 8 with the same language as in

Section one.

Section three of the bill amends subsection (y) of section 1511 of the
tax law by adding new paragraphs 7 and 8 with the same language as in

Section one.



Section four of the bill amends the parks, recreation and historic pres-
ervation law by adding new Article 14-A, Historic Rehabilitation Tax
Credit Transfer Program.

Section 14.15 of Article 14-A defines key terms, including "federal
rehabilitation credit," "pass-through entity," "qualified rehabilitation
expenditures," "regulations," "rehabilitation credit," "transferee," and
"non-profit transferee."

Section 14.16 of Article 14-A authorizes a single transfer of the HTC,
in whole or in part, from one taxpayer, or from a pass-through entity
that may report the rehabilitation credit or otherwise elect to pass the
federal rehabilitation tax credit through to a tenant taxpayer, to
another taxpayer, provided that a transfer conducted through a non-pro-
fit conduit to another taxpayer shall be deemed to satisfy the single-
transfer limit. A partial transfer of the HTC may be for no less than
twenty-five percent of the full HTC claimed by the taxpayer, and a
transferee shall use or report the rehabilitation credit in the year it
is allowed.

Section 14.17 of Article 14-A directs the taxpayer, or a pass-through
entity that may report the credit or otherwise elect to pass the federal
rehabilitation credit through to a tenant taxpayer in accordance with
applicable federal law, to provide an information statement to the
commissioner which includes specified threshold information.

Section 14.18 of Article 14-A authorizes the commissioner to promulgate
rules and regulations.

Section five of the bill sets forth the effective date.

 
JUSTIFICATION:

The Federal Historic Rehabilitation Tax Credit provides for a 20% feder-
al income tax credit to support substantial rehabilitation of buildings
that are on the National Register of Historic Places, if the project is
approved by the National Park Service. The New York State Historic Tax
Credit (HTC) is similarly designed to subsidize rehabilitation of
historic income-producing properties, providing a credit for 20% of
qualified expenditures under $5 million, or 30% of qualified expendi-
tures under $2.5 million. The Legislature and the Governor extended the
State program for five additional years in the State budget enacted in
May 2023.

Current State law requires the NYS HTC to be allocated in the same
manner and to the same parties as the federal credit, such that projects
may get a total credit of 40% for projects with expenditures under $5
million or 50% for projects with expenditures under $2.5 million. Howev-
er, when both the federal and state HTC are allocated to the same inves-
tor, the pricing of the credits is typically less than if the NYS HTC
could be allocated and sold separately from the federal HTC, because
there is a smaller number of investors willing to competitively purchase
both. This problem is compounded in affordable housing historic rehabil-
itation projects, where the federal and NYS HTC are combined with the
federal Low-Income Housing Tax Credit (LIHTC). In these cases, the same
credit investor must take the federal HTC, the NYS HTC, and the federal
LIHTC together. This depresses the pricing of all three credits, as the

investor pool for such projects, especially in those areas most in need
of housing investment, is extremely limited.

As federal LIHTC is one of the largest sources of funding for affordable
housing projects, the inability for New York to attract different inves-
tors for federal and state HTC hurts affordable housing development in
historic buildings statewide and creates funding gaps in such projects
because of the depressed pricing across all credits. State taxpayers end
up picking up the tab for these funding gaps, as the state housing agen-
cy, New York State Homes and Community Renewal (HCR), must then fill
these gaps with limited state capital money. And with limited available
capital, some projects competing for resources may not happen, meaning
affordable units do not get developed and buildings would not be
preserved. The bifurcation of federal and NYS HTC investments is there-
fore critical to the generation of affordable housing in New York.

This legislation also increases the value of the HTC by allowing a non-
profit entity like a non-profit affordable developer or a historic pres-
ervation organization to sell the credits on behalf of the project. As
non-profit entities are tax exempt, this means that the credit sale will
be exempt from federal tax, resulting in more capital for the project,
which in turn lowers the need for any HCR subsidies to fully finance a
historic preservation and affordable housing project.

 
LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
beginning on and after January 1, 2025.

2023-S9071 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9071
 
                             I N  S E N A T E
 
                              April 16, 2024
                                ___________
 
 Introduced  by Sen. KAVANAGH -- 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 and the parks, recreation and historic pres-
   ervation law, in relation to authorizing the pass-through or  transfer
   of the credits for rehabilitation of historic properties

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 26 of section 210-B of the tax law  is  amended
 by adding two new paragraphs (g) and (h) to read as follows:
   (G)  (I)  THE ALLOCATION OF THE CREDIT ESTABLISHED BY THIS SUBDIVISION
 MAY BE MADE WITHOUT REGARD TO AND IN A SEPARATE MANNER FROM ANY  FEDERAL
 REHABILITATION  CREDIT THAT MAY BE ALLOCATED WITH RESPECT TO A CERTIFIED
 HISTORIC STRUCTURE UNDER SECTION FORTY-SEVEN  OF  THE  INTERNAL  REVENUE
 CODE  BY  WRITTEN  AGREEMENT OF THE TAXPAYER OTHERWISE ENTITLED TO CLAIM
 SUCH CREDIT OR BY WRITTEN AGREEMENT OF A PASS-THROUGH  ENTITY  THAT  MAY
 REPORT SUCH CREDIT OR OTHERWISE ELECT TO PASS THE FEDERAL REHABILITATION
 TAX  CREDIT  THROUGH  TO A TENANT TAXPAYER IN ACCORDANCE WITH APPLICABLE
 FEDERAL LAW.
   (II) WITH RESPECT TO CERTIFIED HISTORIC STRUCTURES THAT ARE SUBJECT TO
 A LEASE ARRANGEMENT WHEREBY THE LANDLORD  ELECTS  TO  PASS  THE  FEDERAL
 REHABILITATION  CREDIT  THROUGH TO THE TENANT TAXPAYER, NOT ONLY MAY THE
 NEW YORK STATE REHABILITATION  CREDIT  BE  PASSED  DOWN  TO  THE  TENANT
 TAXPAYER  AND  THEN ALLOCATED WITHOUT REGARD TO AND IN A SEPARATE MANNER
 FROM ANY FEDERAL REHABILITATION CREDIT THAT MAY BE  ALLOCATED,  BUT  THE
 LANDLORD  MAY ALSO OPT TO RETAIN THE NEW YORK STATE REHABILITATION CRED-
 IT. FOR PURPOSES OF THIS SECTION, A "LANDLORD" MEANS THE  OWNER  OF  THE
 CERTIFIED HISTORIC STRUCTURE FOR FEDERAL TAX PURPOSES.
   (III)  THE  NEW YORK STATE REHABILITATION CREDIT MAY BE TRANSFERRED AS
 PROVIDED FOR IN ARTICLE FOURTEEN-A OF THE PARKS, RECREATION AND HISTORIC
 PRESERVATION LAW.
   (H) THE COMMISSIONER SHALL REPORT ANNUALLY, ON OR BEFORE THE FIRST DAY
 OF NOVEMBER, ON THE AGGREGATE AMOUNT OF CREDITS CLAIMED PURSUANT TO THIS
 SUBDIVISION ON RETURNS FILED DURING THE PRECEDING  CALENDAR  YEAR.  SUCH
 REPORT  SHALL  BE  PROVIDED  TO THE GOVERNOR, TEMPORARY PRESIDENT OF THE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10411-05-4
 S. 9071                             2

 SENATE, SPEAKER OF THE ASSEMBLY, CHAIRS  OF  THE  SENATE  COMMITTEES  ON
 FINANCE  AND  ON  HOUSING,  CONSTRUCTION  AND COMMUNITY DEVELOPMENT, AND
 CHAIRS OF THE ASSEMBLY COMMITTEES ON WAYS AND MEANS AND ON HOUSING   AND
 SHALL BE MADE PUBLICLY AVAILABLE ON THE DEPARTMENT'S WEBSITE.
   §  2.  Subsection  (oo)  of  section  606 of the tax law is amended by
 adding two new paragraphs 7 and 8 to read as follows:
   (7) (A) THE ALLOCATION OF THE CREDIT ESTABLISHED  BY  THIS  SUBSECTION
 MAY  BE MADE WITHOUT REGARD TO AND IN A SEPARATE MANNER FROM ANY FEDERAL
 REHABILITATION CREDIT THAT MAY BE ALLOCATED WITH RESPECT TO A  CERTIFIED
 HISTORIC  STRUCTURE  UNDER  SECTION  FORTY-SEVEN OF THE INTERNAL REVENUE
 CODE BY WRITTEN AGREEMENT OF THE TAXPAYER OTHERWISE  ENTITLED  TO  CLAIM
 SUCH  CREDIT  OR  BY WRITTEN AGREEMENT OF A PASS-THROUGH ENTITY THAT MAY
 REPORT SUCH CREDIT OR OTHERWISE ELECT TO PASS THE FEDERAL REHABILITATION
 TAX CREDIT THROUGH TO A TENANT TAXPAYER IN  ACCORDANCE  WITH  APPLICABLE
 FEDERAL LAW.
   (B)  WITH RESPECT TO CERTIFIED HISTORIC STRUCTURES THAT ARE SUBJECT TO
 A LEASE ARRANGEMENT WHEREBY THE LANDLORD  ELECTS  TO  PASS  THE  FEDERAL
 REHABILITATION  CREDIT  THROUGH TO THE TENANT TAXPAYER, NOT ONLY MAY THE
 NEW YORK STATE REHABILITATION  CREDIT  BE  PASSED  DOWN  TO  THE  TENANT
 TAXPAYER  AND  THEN ALLOCATED WITHOUT REGARD TO AND IN A SEPARATE MANNER
 FROM ANY FEDERAL REHABILITATION CREDIT THAT MAY BE  ALLOCATED,  BUT  THE
 LANDLORD  MAY ALSO OPT TO RETAIN THE NEW YORK STATE REHABILITATION CRED-
 IT. FOR PURPOSES OF THIS SECTION, A "LANDLORD" MEANS THE  OWNER  OF  THE
 CERTIFIED HISTORIC STRUCTURE FOR FEDERAL TAX PURPOSES.
   (C)  THE  NEW  YORK  STATE REHABILITATION CREDIT MAY BE TRANSFERRED AS
 PROVIDED FOR IN ARTICLE FOURTEEN-A OF THE PARKS, RECREATION AND HISTORIC
 PRESERVATION LAW.
   (8) THE COMMISSIONER SHALL REPORT ANNUALLY, ON OR BEFORE THE FIRST DAY
 OF NOVEMBER, ON THE AGGREGATE AMOUNT OF CREDITS CLAIMED PURSUANT TO THIS
 SUBSECTION ON RETURNS FILED DURING THE PRECEDING CALENDAR  YEAR.    SUCH
 REPORT  SHALL  BE  PROVIDED  TO THE GOVERNOR, TEMPORARY PRESIDENT OF THE
 SENATE, SPEAKER OF THE ASSEMBLY, CHAIRS  OF  THE  SENATE  COMMITTEES  ON
 FINANCE  AND  ON  HOUSING,  CONSTRUCTION  AND COMMUNITY DEVELOPMENT, AND
 CHAIRS OF THE ASSEMBLY COMMITTEES ON WAYS AND MEANS AND ON  HOUSING  AND
 SHALL BE MADE PUBLICLY AVAILABLE ON THE DEPARTMENT'S WEBSITE.
   § 3. Subdivision (y) of section 1511 of the tax law, as added by chap-
 ter  472  of the laws of 2010, is amended by adding two new paragraphs 7
 and 8 to read as follows:
   (7) (A) THE ALLOCATION OF THE CREDIT ESTABLISHED BY  THIS  SUBDIVISION
 MAY  BE MADE WITHOUT REGARD TO AND IN A SEPARATE MANNER FROM ANY FEDERAL
 REHABILITATION CREDIT THAT MAY BE ALLOCATED WITH RESPECT TO A  CERTIFIED
 HISTORIC  STRUCTURE  UNDER  SECTION  FORTY-SEVEN OF THE INTERNAL REVENUE
 CODE BY WRITTEN AGREEMENT OF THE TAXPAYER OTHERWISE  ENTITLED  TO  CLAIM
 SUCH  CREDIT  OR  BY WRITTEN AGREEMENT OF A PASS-THROUGH ENTITY THAT MAY
 REPORT SUCH CREDIT OR OTHERWISE ELECT TO PASS THE FEDERAL REHABILITATION
 TAX CREDIT THROUGH TO A TENANT TAXPAYER IN  ACCORDANCE  WITH  APPLICABLE
 FEDERAL LAW.
   (B)  WITH RESPECT TO CERTIFIED HISTORIC STRUCTURES THAT ARE SUBJECT TO
 A LEASE ARRANGEMENT WHEREBY THE LANDLORD  ELECTS  TO  PASS  THE  FEDERAL
 REHABILITATION  CREDIT  THROUGH TO THE TENANT TAXPAYER, NOT ONLY MAY THE
 NEW YORK STATE REHABILITATION  CREDIT  BE  PASSED  DOWN  TO  THE  TENANT
 TAXPAYER  AND  THEN ALLOCATED WITHOUT REGARD TO AND IN A SEPARATE MANNER
 FROM ANY FEDERAL REHABILITATION CREDIT THAT MAY BE  ALLOCATED,  BUT  THE
 LANDLORD  MAY ALSO OPT TO RETAIN THE NEW YORK STATE REHABILITATION CRED-
 IT. FOR PURPOSES OF THIS SECTION, A "LANDLORD" MEANS THE  OWNER  OF  THE
 CERTIFIED HISTORIC STRUCTURE FOR FEDERAL TAX PURPOSES.
 S. 9071                             3
 
   (C)  THE  NEW  YORK  STATE REHABILITATION CREDIT MAY BE TRANSFERRED AS
 PROVIDED FOR IN ARTICLE FOURTEEN-A OF THE PARKS, RECREATION AND HISTORIC
 PRESERVATION LAW.
   (8) THE COMMISSIONER SHALL REPORT ANNUALLY, ON OR BEFORE THE FIRST DAY
 OF    NOVEMBER,  ON  THE AGGREGATE AMOUNT OF CREDITS CLAIMED PURSUANT TO
 THIS SUBDIVISION ON RETURNS FILED DURING THE  PRECEDING  CALENDAR  YEAR.
 SUCH  REPORT  SHALL  BE PROVIDED TO THE GOVERNOR, TEMPORARY PRESIDENT OF
 THE SENATE, SPEAKER OF THE ASSEMBLY, CHAIRS OF THE SENATE COMMITTEES  ON
 FINANCE  AND  ON  HOUSING,  CONSTRUCTION  AND COMMUNITY DEVELOPMENT, AND
 CHAIRS OF THE ASSEMBLY COMMITTEES ON WAYS AND MEANS AND ON  HOUSING  AND
 SHALL BE MADE PUBLICLY AVAILABLE ON THE DEPARTMENT'S WEBSITE.
   § 4. The parks, recreation and historic preservation law is amended by
 adding a new article 14-A to read as follows:
                                ARTICLE 14-A
            HISTORIC REHABILITATION TAX CREDIT TRANSFER PROGRAM
 SECTION 14.15 DEFINITIONS.
         14.16 TRANSFER OF REHABILITATION CREDIT.
         14.17 REPORTING.
         14.18  REGULATIONS,  COORDINATION  WITH  FEDERAL  REHABILITATION
                 CREDIT PROVISIONS.
   § 14.15 DEFINITIONS. AS USED IN  THIS  ARTICLE,  THE  FOLLOWING  TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   1.  "FEDERAL  REHABILITATION CREDIT" MEANS THE FEDERAL CREDIT THAT MAY
 BE ALLOCATED WITH  RESPECT  TO  A  CERTIFIED  HISTORIC  STRUCTURE  UNDER
 SECTION  FORTY-SEVEN  OF  THE  INTERNAL REVENUE CODE. REFERENCES IN THIS
 ARTICLE TO SECTION FORTY-SEVEN OF THE INTERNAL REVENUE CODE  SHALL  MEAN
 SUCH SECTION AS AMENDED FROM TIME TO TIME.
   2.  "PASS-THROUGH ENTITY" MEANS AN ENTITY THAT IS NOT A TAXPAYER UNDER
 FEDERAL OR STATE TAX LAW, SUCH AS A LIMITED LIABILITY COMPANY,  A  PART-
 NERSHIP,  AN  S  CORPORATION,   OR ANY OTHER ENTITY AS DETERMINED BY THE
 COMMISSIONER OF TAXATION AND FINANCE WHICH IS DEEMED TO BE  A  REPORTING
 ENTITY  FOR  INCOME  TAX  PURPOSES AND FILES ANNUAL  INFORMATION RETURNS
 PASSING THROUGH ITEMS OF INCOME, LOSS, CREDITS  AND  CERTAIN  OTHER  TAX
 ATTRIBUTES TO EACH PARTNER, MEMBER OR SHAREHOLDER AS APPLICABLE.
   3. "QUALIFIED REHABILITATION EXPENDITURES" SHALL HAVE THE SAME MEANING
 AS IN SECTION FORTY-SEVEN OF THE INTERNAL REVENUE CODE.
   4.  "REGULATIONS"  MEANS  REGULATIONS  ADOPTED BY THE COMMISSIONER, IN
 CONSULTATION WITH THE COMMISSIONER OF THE  DEPARTMENT  OF  TAXATION  AND
 FINANCE, PURSUANT TO SECTION 14.18 OF THIS ARTICLE.
   5.  "REHABILITATION CREDIT" MEANS THE CREDIT PROVIDED FOR UNDER SUBDI-
 VISION TWENTY-SIX OF SECTION  TWO  HUNDRED  TEN-B,  SUBSECTION  (OO)  OF
 SECTION  SIX  HUNDRED  SIX OR SUBDIVISION (Y) OF SECTION FIFTEEN HUNDRED
 ELEVEN OF THE TAX LAW.
   6. "TRANSFEREE"  MEANS  A  TAXPAYER  OR  A  PASS-THROUGH  ENTITY  THAT
 RECEIVES  A TRANSFER OF THE REHABILITATION CREDIT. A TRANSFEREE NEED NOT
 OWN AN INTEREST IN THE CERTIFIED HISTORIC STRUCTURE OR IN AN ENTITY WITH
 AN OWNERSHIP INTEREST IN THE CERTIFIED HISTORIC STRUCTURE TO  RECEIVE  A
 TRANSFER OF A REHABILITATION CREDIT.
   7.  "NON-PROFIT  TRANSFEREE" MEANS A NON-PROFIT ENTITY THAT RECEIVES A
 TRANSFER OF THE REHABILITATION CREDIT.
   § 14.16 TRANSFER OF REHABILITATION CREDIT. EITHER  A  1.  TAXPAYER  OR
 PASS-THROUGH  ENTITY THAT MAY REPORT THE REHABILITATION CREDIT OR OTHER-
 WISE ELECT TO PASS THE FEDERAL REHABILITATION CREDIT THROUGH TO A TENANT
 TAXPAYER IN ACCORDANCE WITH APPLICABLE FEDERAL LAW  OR  2.    NON-PROFIT
 TRANSFEREE  MAY,  WITH  PRIOR NOTICE IN ACCORDANCE WITH THE REGULATIONS,
 TRANSFER THE REHABILITATION CREDIT, IN WHOLE OR IN PART, TO  ANY  TRANS-
 S. 9071                             4
 
 FEREE OR NON-PROFIT TRANSFEREE WITH THE SAME EFFECT AS IF THE TRANSFEREE
 OR  NON-PROFIT  TRANSFEREE  HAD  INCURRED  THE  QUALIFIED REHABILITATION
 EXPENDITURES ITSELF; PROVIDED THAT NO PARTIAL TRANSFER OF THE  REHABILI-
 TATION CREDIT MAY BE FOR LESS THAN TWENTY-FIVE PERCENT OF THE FULL REHA-
 BILITATION  CREDIT  CLAIMED  BY  THE TAXPAYER. A TRANSFEREE SHALL USE OR
 REPORT THE REHABILITATION CREDIT IN THE YEAR IT IS ALLOWED AND  MAY  NOT
 TRANSFER  THE  REHABILITATION  CREDIT  ON  TO  YET ANOTHER TRANSFEREE. A
 TRANSFER OF REHABILITATION CREDIT TO A NON-PROFIT TRANSFEREE, WHERE  THE
 NON-PROFIT TRANSFEREE IS SOLELY ACTING AS A GO-BETWEEN TO FURTHER TRANS-
 FER  THE  REHABILITATION  CREDIT TO A TRANSFEREE, SHALL NOT CONSTITUTE A
 TRANSFER FOR PURPOSES OF DETERMINING THE SINGLE TRANSFER  LIMITATION  OF
 THIS SECTION.
   §  14.17  REPORTING.  IF  A TAXPAYER OR A PASS-THROUGH ENTITY THAT MAY
 REPORT THE CREDIT OR OTHERWISE ELECT TO PASS THE FEDERAL  REHABILITATION
 CREDIT THROUGH TO A TENANT TAXPAYER IN ACCORDANCE WITH APPLICABLE FEDER-
 AL LAW ELECTS TO TRANSFER THE CREDIT AS PROVIDED FOR IN SECTION 14.16 OF
 THIS  ARTICLE,  PRIOR  TO  FILING ANY TAX RETURNS CLAIMING THE REHABILI-
 TATION CREDIT, A TAXPAYER OR A PASS-THROUGH ENTITY THAT MAY  REPORT  THE
 REHABILITATION  CREDIT  OR OTHERWISE ELECT TO PASS THE FEDERAL REHABILI-
 TATION CREDIT THROUGH TO A TENANT TAXPAYER IN ACCORDANCE WITH APPLICABLE
 FEDERAL LAW SHALL PROVIDE AN INFORMATION STATEMENT TO  THE  COMMISSIONER
 IN ACCORDANCE WITH THE DEPARTMENT'S REGULATIONS. SUCH INFORMATION STATE-
 MENT  SHALL  INCLUDE,  BUT  MAY  NOT BE LIMITED TO, THE IDENTITY AND TAX
 IDENTIFICATION INFORMATION OF ANY NON-PROFIT TRANSFEREE AND THE IDENTITY
 AND TAX IDENTIFICATION INFORMATION OF ANY TRANSFEREE THAT WILL CLAIM THE
 CREDIT.
   § 14.18 REGULATIONS, COORDINATION WITH FEDERAL  REHABILITATION  CREDIT
 PROVISIONS.  THE  COMMISSIONER, IN CONSULTATION WITH THE COMMISSIONER OF
 THE DEPARTMENT OF TAXATION AND FINANCE, SHALL PROMULGATE RULES AND REGU-
 LATIONS NECESSARY TO ADMINISTER THE PROVISIONS OF THIS ARTICLE.
   § 5. This act shall take effect immediately and shall apply to taxable
 years beginning on and after January 1, 2025.

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Senate Bill S9071

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Brian Kavanagh