NY State Senate Bill 2015-S1664

Senate Bill S1664

2015-2016 Legislative Session

Establishes business franchise and personal income tax credits for expenses of natural resources improvement projects on farmlands and forestlands

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Archive: Last Bill Status - Stricken

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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 20, 2016	recommit, enacting clause stricken
Jan 06, 2016	referred to investigations and government operations
Jan 13, 2015	referred to investigations and government operations

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2015-S1664 (ACTIVE) - Details

Law Section:: Tax Law
Laws Affected:: Amd §§208, 210-B, 606 & 612, Tax L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S6598
2013-2014: S4387

2015-S1664 (ACTIVE) - Summary

Establishes business franchise and personal income tax credits for expenses of natural resources improvement projects on farmlands and forestlands.

2015-S1664 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S1664

TITLE OF BILL:  An act to amend the tax law, in relation to
establishing a business franchise and personal income tax credit for
natural resources improvement projects upon farmlands and forestlands

PURPOSE: This bill provides business franchise and personal income tax
credits for expenses of natural resource improvement projects on
farmlands and forestlands.

SUMMARY OF PROVISIONS:

Section 1 adds a new paragraph (v) to subdivision 9, section 208 of
the tax law, to provide that any natural resource improvement credit
must be deducted from the taxpayer's total net income, or total gross
income, on their federal income tax return.

Section 2 through 4 amends the tax law to provide for the allowance of
a natural resource improvement credit after January 1, 2016 of 25% of
eligible expenditures, up to $50,000, to farmland entitled to an
agricultural assessment under article twenty-five-AA of the
agriculture and markets law or forestland entitled to a forest
assessment under section four hundred eighty-a of the real property
tax law during that taxable year.

Eligible expenditures include architectural, archeological, geological

and engineering services, the cost of developing plans and
specifications, consultation and legal services fees, forestland
improvements and expenditures defined in section 175(c)(1) of the
internal revenue code. Natural resource improvement projects are
defined as the restoration of farmland and forestland for the
production of agricultural perennial crops, including crops intended
for energy production purposes, provided the land has not been used in
agricultural production for at least two years prior to such
restoration or had a timber harvest within the past five years. The
credit would be refundable.

Section 5 amends paragraph 4 of section 612 (b) of the tax law to
provide that any natural resource improvement credit must be deducted
from the taxpayer's total net income, or total gross income, on their
federal income tax return.

REVIEW OF EXISTING LAW:  Current law does not contain any tax credits
specifically intended to encourage landowners to make natural resource
improvements necessary to restore land for the production of
agricultural perennial crops, including those intended for energy
production purposes.

In addition, current law does not contain any tax credits specifically
intended to encourage landowners to make necessary farmland and
forestland improvements. However, a taxpayer may be entitled to a
deduction for some of those expenses, if the taxpayer is using the
property for business purposes.

JUSTIFICATION: This proposal will provide a one-time State personal
income tax credit, up to $50,000, for 25 percent of the capital costs
for specified land improvements designed to restore farmland or


forest-land to active production of perennial crops, including those
intended for energy production, beginning in the 2016 tax year.

Much more extensive planting of perennial energy crops is necessary to
balance the opportunity that will be presented by next-generation
renewable energy production. New York State lands could be brought
into production for such purposes without impinging on either the
State's livestock industry or its food supply. In addition,
investments in cellulosic ethanol and other advanced green energy
technologies will go to other states if New York does not move to
encourage feedstock production. Failure to bring idle open land and
forest land back into production denies the potential for economic
development while continuing to promote the land's use for warehouses,
shopping centers, and low-density housing developments.

There as two million acres of open farm lands and more than seven
million acres of eligible forestland in New York State. Some of the
farmland owned by non-farmers is currently rented to farmers, but an
even larger share is found in the tens of thousands of parcels of
"exfarmland" which lie virtually neglected from a land management
perspective, gradually becoming second-growth forest. An effective
policy to deal with the loss of New York's agricultural base must
include incentives to keep in or return to production, under sound
long-term management practices, farmland that is not farmer-owned or
has become forestland.

The State Constitution charges the people of New York State with
encouraging the development and improvement of agricultural lands for
the production of food and other agricultural products, as well as
providing for the conservation of state soil and water resources.
Agricultural production has become an increasingly competitive
industry, which accounts for farms going out of business and land out
of production. A limited amount of funds are available for long term
agricultural land retention strategies such as purchase of development
rights. At the same time, many farmers are seeking land to supplement
their current land base. Due to competing interests for the land,
depressed farm incomes, and costs of improving the land to an
acceptable level of productivity, farmers are experiencing difficulty
in acquiring additional lands for their operations.

This legislation would potentially impact all available lands not
currently in agricultural production and forest stands that are too
young to produce a marketable crop. More forest owners will have an
incentive to develop management plans and potentially invest in
pre-commercial improvements to assure a future forest biomass crop,
while providing a feedstock to the biomass industry that is beginning
to grow in New York State. In addition, existing farmland can be
maintained and other lands can be restored to agricultural biomass
production.

This, in turn, will help protect the long-term agricultural base,
preserve the open space benefits, protect water quality and provide
economic development opportunities to economically depressed regions
of the state.

LEGISLATIVE HISTORY:  2013,2014: S.4387-A Referred to Investigations &
Government


           Operations 2012: S.6598-B/A.9425-8 Committed to Finance

FISCAL IMPLICATIONS: Undetermined.

EFFECTIVE DATE: Effective immediately.

2015-S1664 (ACTIVE) - Bill Text download pdf

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

                                  1664

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            January 13, 2015
                               ___________

Introduced by Sen. YOUNG -- (at request of the Legislative Commission on
  Rural  Resources)  -- 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 business
  franchise  and  personal  income  tax  credit  for  natural  resources
  improvement projects upon farmlands and forestlands

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 9 of section 208 of the tax law is  amended  by
adding a new paragraph (u) to read as follows:
  (U)  IN THE EVENT THE TAXPAYER CLAIMS THE NATURAL RESOURCE IMPROVEMENT
CREDIT FOR FARMLANDS AND FORESTLANDS ESTABLISHED PURSUANT TO SUBDIVISION
FORTY-NINE OF SECTION TWO HUNDRED TEN-B  OF  THIS  ARTICLE,  ENTIRE  NET
INCOME  SHALL  BE INCREASED BY THE AMOUNT OF ANY EXPENDITURES DEFINED IN
INTERNAL REVENUE CODE SECTION 175(C)(1) THAT THE TAXPAYER DEDUCTED  FROM
ITS TOTAL NET INCOME ON ITS FEDERAL TAX RETURN FOR THE TAX YEAR.
  S  2. Section 210-B of the tax law is amended by adding a new subdivi-
sion 49 to read as follows:
  49. NATURAL RESOURCE IMPROVEMENT CREDIT FOR FARMLANDS AND FORESTLANDS.
(A) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY
FIRST, TWO THOUSAND SIXTEEN,  A  TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT
AGAINST  THE  TAX  IMPOSED  BY  THIS  ARTICLE  IN  AN  AMOUNT  EQUAL  TO
TWENTY-FIVE PERCENT OF THE TAXPAYER'S ELIGIBLE EXPENDITURES  DURING  THE
TAX YEAR FOR A NATURAL RESOURCES IMPROVEMENT PROJECT. PROVIDED, HOWEVER,
THAT  THE  CREDIT  GRANTED  FOR ANY NATURAL RESOURCE IMPROVEMENT PROJECT
PURSUANT TO THIS SUBDIVISION SHALL NOT EXCEED FIFTY THOUSAND DOLLARS.
  (B) DEFINITIONS. FOR THE PURPOSES OF THIS SUBDIVISION,  THE  FOLLOWING
DEFINITIONS SHALL APPLY:
  (1) "ELIGIBLE EXPENDITURES" SHALL MEAN FEES FOR ARCHITECTURAL, ARCHEO-
LOGICAL,  GEOLOGICAL  AND  ENGINEERING SERVICES; THE COSTS OF DEVELOPING

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06118-01-5

S. 1664                             2

PLANS AND SPECIFICATIONS; FEES FOR CONSULTANT AND  LEGAL  SERVICES;  AND
ANY  EXPENDITURE  DEFINED  IN  INTERNAL  REVENUE CODE SECTION 175(C)(1),
INCLUDING EXPENDITURES RELATED TO THE APPLICATION OF LIME AND  FERTILIZ-
ER,  IMPROVEMENT  OF  DRAINAGE  IN THE CASE OF OPEN AREAS THAT HAVE BEEN
USED FOR AGRICULTURAL PURPOSES AT ANY TIME IN THE PAST, AND EXPENDITURES
RELATED TO THE DECONSTRUCTION AND REMOVAL OF  FENCES,  STREAM  CROSSINGS
AND  NECESSARY  RIPARIAN BUFFERS AND FORESTLAND IMPROVEMENTS AS REQUIRED
BY THE NATURAL RESOURCES IMPROVEMENT PROJECT.
  (2) "FARMLAND AND FORESTLAND" SHALL MEAN LAND WHICH, DURING THE  TAXA-
BLE YEAR IN WHICH THE CREDIT IS CLAIMED PURSUANT TO THIS SUBDIVISION, IS
ELIGIBLE   FOR   AN   AGRICULTURAL   ASSESSMENT   PURSUANT   TO  ARTICLE
TWENTY-FIVE-AA OF THE AGRICULTURE AND MARKETS  LAW  OR  ELIGIBLE  FOR  A
FOREST  ASSESSMENT UNDER SECTION FOUR HUNDRED EIGHTY-A OF THE REAL PROP-
ERTY TAX LAW.
  (3) "NATURAL RESOURCES IMPROVEMENT PROJECT" SHALL MEAN THE RESTORATION
OF FARMLAND AND FORESTLAND FOR THE PRODUCTION OF AGRICULTURAL  PERENNIAL
CROPS, INCLUDING THOSE CROPS INTENDED FOR ENERGY PRODUCTION PURPOSES, BY
IMPROVING  SUCH  LAND WHICH HAS NOT BEEN USED IN AGRICULTURAL PRODUCTION
FOR TWO OR MORE YEARS PRIOR TO THE INITIATION  OF  SUCH  RESTORATION  OR
FORESTLAND IMPROVEMENTS REQUIRED IN THE MANAGEMENT PLAN.
  (C)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH  YEAR  TO  LESS
THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE.   HOWEVER,  IF  THE  AMOUNT  OF
CREDIT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE
TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS  NOT  DEDUCTIBLE  IN  SUCH
TAXABLE  YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON.
  S  3. 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:
(XLI) NATURAL RESOURCE               AMOUNT OF CREDIT FOR ELIGIBLE
IMPROVEMENT CREDIT FOR               EXPENDITURES FOR A NATURAL
FARMLANDS AND                        RESOURCES IMPROVEMENT PROJECT
FORESTLANDS UNDER                    UNDER SUBDIVISION FORTY-NINE
SUBSECTION (CCC)                     OF SECTION TWO HUNDRED TEN-B
  S  4. Section 606 of the tax law is amended by adding a new subsection
(ccc) to read as follows:
  (CCC) NATURAL RESOURCE IMPROVEMENT CREDIT FOR  FARMLANDS  AND  FOREST-
LANDS.  (1) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS BEGINNING ON OR AFTER
JANUARY FIRST, TWO THOUSAND SIXTEEN, A TAXPAYER SHALL BE ALLOWED A CRED-
IT  AGAINST  THE TAX IMPOSED BY THIS ARTICLE IN AN AMOUNT EQUAL TO TWEN-
TY-FIVE PERCENT OF THE TAXPAYER'S ELIGIBLE EXPENDITURES DURING  THE  TAX
YEAR FOR A NATURAL RESOURCE IMPROVEMENT PROJECT. PROVIDED, HOWEVER, THAT
THE CREDIT GRANTED FOR ANY NATURAL RESOURCE IMPROVEMENT PROJECT PURSUANT
TO THIS SUBSECTION SHALL NOT EXCEED FIFTY THOUSAND DOLLARS.
  (2)  DEFINITIONS.  FOR  THE PURPOSES OF THIS SUBSECTION, THE FOLLOWING
DEFINITIONS SHALL APPLY:
  (A) "ELIGIBLE EXPENDITURES" SHALL MEAN FEES FOR ARCHITECTURAL, ARCHEO-
LOGICAL, GEOLOGICAL AND ENGINEERING SERVICES; THE  COSTS  OF  DEVELOPING
PLANS  AND  SPECIFICATIONS;  FEES FOR CONSULTANT AND LEGAL SERVICES; AND
ANY EXPENDITURE DEFINED IN  INTERNAL  REVENUE  CODE  SECTION  175(C)(1),
INCLUDING  EXPENDITURES RELATED TO THE APPLICATION OF LIME AND FERTILIZ-

S. 1664                             3

ER, IMPROVEMENT OF DRAINAGE IN THE CASE OF OPEN  AREAS  THAT  HAVE  BEEN
USED FOR AGRICULTURAL PURPOSES AT ANY TIME IN THE PAST, AND EXPENDITURES
RELATED  TO  THE  DECONSTRUCTION AND REMOVAL OF FENCES, STREAM CROSSINGS
AND  NECESSARY  RIPARIAN BUFFERS AND FORESTLAND IMPROVEMENTS AS REQUIRED
BY THE NATURAL RESOURCE IMPROVEMENT PROJECT.
  (B) "FARMLAND AND FORESTLAND" SHALL MEAN LAND WHICH, DURING THE  TAXA-
BLE  YEAR IN WHICH THE CREDIT IS CLAIMED PURSUANT TO THIS SUBSECTION, IS
ELIGIBLE  FOR   AN   AGRICULTURAL   ASSESSMENT   PURSUANT   TO   ARTICLE
TWENTY-FIVE-AA  OF  THE  AGRICULTURE  AND  MARKETS LAW OR ELIGIBLE FOR A
FOREST ASSESSMENT UNDER SECTION FOUR HUNDRED EIGHTY-A OF THE REAL  PROP-
ERTY TAX LAW.
  (C)  "NATURAL RESOURCE IMPROVEMENT PROJECT" SHALL MEAN THE RESTORATION
OF FARMLAND AND FORESTLAND FOR THE PRODUCTION OF AGRICULTURAL  PERENNIAL
CROPS, INCLUDING THOSE CROPS INTENDED FOR ENERGY PRODUCTION PURPOSES, BY
IMPROVING  SUCH  LAND WHICH HAS NOT BEEN USED IN AGRICULTURAL PRODUCTION
FOR TWO OR MORE YEARS PRIOR TO THE COMPLETION OF SUCH RESTORATION OR HAD
A COMMERCIAL TIMBER HARVEST WITHIN THE PAST FIVE YEARS.
  (3) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT  ALLOWED  UNDER
THIS  SUBSECTION  SHALL  EXCEED  THE  TAXPAYER'S  TAX FOR SUCH YEAR, THE
TAXPAYER MAY RECEIVE AND THE COMPTROLLER, SUBJECT TO  A  CERTIFICATE  OF
THE  COMMISSIONER,  SHALL  PAY  AS AN OVERPAYMENT, WITHOUT INTEREST, THE
AMOUNT OF SUCH EXCESS.
  S 5. Paragraph 4 of subsection (b) of section 612 of the tax  law,  as
amended  by  chapter  406  of  the  laws  of 1990, is amended to read as
follows:
  (4) Interest on indebtedness incurred  or  continued  to  purchase  or
carry obligations or securities the interest on which is exempt from tax
under  this  article,  to  the  extent deductible in determining federal
adjusted gross income; PROVIDED THAT IN THE EVENT  THE  TAXPAYER  CLAIMS
THE  NATURAL  RESOURCE  IMPROVEMENT CREDIT FOR FARMLANDS AND FORESTLANDS
ESTABLISHED PURSUANT TO SUBSECTION (CCC) OF SECTION SIX HUNDRED  SIX  OF
THIS ARTICLE, THE AMOUNT OF ANY EXPENDITURES DEFINED IN INTERNAL REVENUE
CODE SECTION 175(C)(1) THAT THE TAXPAYER DEDUCTED FROM HIS OR HER FEDER-
AL GROSS INCOME ON HIS OR HER FEDERAL TAX RETURN FOR THE TAX YEAR.
  S  6. This act shall take effect immediately and shall apply to resto-
ration projects initiated on or after such date.

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Senate Bill S1664

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