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

                                 1293--A

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                             January 9, 2015
                               ___________

Introduced  by  Sens.  RANZENHOFER,  FUNKE, LARKIN, PANEPINTO, SERINO --
  read twice and ordered printed, and when printed to  be  committed  to
  the Committee on Investigations and Government Operations -- recommit-
  ted  to  the  Committee on Investigations and Government Operations in
  accordance with Senate Rule 6, sec. 8 --  committee  discharged,  bill
  amended,  ordered reprinted as amended and recommitted to said commit-
  tee

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 (ccc) to read as follows:
  (CCC) CREDIT FOR REHABILITATION OF DISTRESSED RESIDENTIAL  PROPERTIES.
(1)  FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
SIXTEEN, 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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02086-02-6

              

S. 1293--A                          2

  (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.
  (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 SIXTEEN OR AFTER DECEMBER THIRTY-FIRST, TWO
THOUSAND TWENTY-ONE.
  (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.
  (8)  ANY  EXPENDITURE  FOR  WHICH  A  CREDIT  IS  CLAIMED  UNDER  THIS
SUBSECTION SHALL NOT BE ELIGIBLE FOR ANY OTHER CREDIT UNDER  THIS  CHAP-
TER.
  S  2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding  a  new  clause  (xli)  to  read  as
follows:

S. 1293--A                          3

(XLI) CREDIT FOR REHABILITATION      AMOUNT OF CREDIT
OF DISTRESSED RESIDENTIAL            UNDER SUBDIVISION FORTY-NINE
PROPERTIES UNDER SUBSECTION (CCC)    OF SECTION TWO HUNDRED TEN-B

  S  3. Section 210-B of the tax law is amended by adding a new subdivi-
sion 49 to read as follows:
  49. CREDIT FOR REHABILITATION OF  DISTRESSED  RESIDENTIAL  PROPERTIES.
(1)  FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
SIXTEEN, 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 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 SIXTEEN OR AFTER DECEMBER THIRTY-FIRST,  TWO
THOUSAND TWENTY-ONE.
  (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.

S. 1293--A                          4

  (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
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.
  (8)  ANY EXPENDITURE FOR WHICH A CREDIT IS CLAIMED UNDER THIS SUBDIVI-
SION SHALL NOT BE ELIGIBLE FOR ANY OTHER CREDIT UNDER THIS CHAPTER.
  S 4. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2016.