BILL NUMBER: S4174
SPONSOR: KENNEDY
 
TITLE OF BILL:
An act to amend the tax law and the parks, recreation and historic pres-
ervation law, in relation to establishing the large projects historic
rehabilitation tax credit and the "white elephant" housing historic
rehabilitation projects tax credit program
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill extends the NY State Historic Rehabilitation Tax Credit to
large "white elephant" projects and creates the "white elephant" housing
historic rehabilitation projects tax credit program for large rehabili-
tation projects that also qualify for a low income housing project tax
credit under article 2-A of the public housing law.
 
SUMMARY OF PROVISIONS:
Section 1: Amends paragraph (1) of subsection (oo) of section 606 of the
tax law to extend the availability of the credit for rehabilitation of
historic properties to taxable years beginning before January 1, 2035
and adds a new credit for one hundred percent of the amount of credit
allowed a taxpayer with respect to a certified historic structure that
is a white elephant project under internal revenue code § 47(c)(3). The
credit for a qualified white elephant project shall be ratably allocated
over a five year period as required by internal revenue code § 47(a) and
shall not exceed fifteen million dollars, provided that the commissioner
of parks, recreation and historic preservation may determine that a
subsequent application for a white elephant project received from the
same applicant be deemed a "Phase II" application where the subsequent
application is determined reasonably related to the original and is
submitted within five years of the previous application for an eligible
white elephant project having seventy-five million dollars or less of
qualified rehabilitation expenditures. In addition, for taxable years
beginning on or after January 1, 2035, the credit for a white elephant
project shall not exceed three hundred thousan d dollars. Paragraph (5)
is amended to exempt a qualified white elephant rehabilitation project
that is also a qualified low-income housing project under article two-A
of the public housing law from the requirement that the project be in
whole or in part located within a qualified census tract. Adds paragraph
(6) to define "white elephant project" and "phase II housing project".
Paragraph (7) is added to permit the credit to be allocated without
regard to and in a separate manner from any federal rehabilitation cred-
it that may be allocated with respect to a qualified white elephant
project. Paragraph (8) is added to require the commissioner of taxation
and finance to report annually on the aggregate amount of historic reha-
bilitation credits claimed and awarded during the preceding calendar
year, and such report shall be provided to the governor, temporary pres-
ident of the senate, speaker of the assembly, chair of the senate
finance committee and chair of the assembly ways and means committee and
shall be made publicly available on the department's website.
§2: Amends subdivision (26) of section 2108 of the tax law to extend the
availability of the credit for rehabilitation of historic properties to
taxable years beginning before January 1, 2035 and adds a new NYS credit
for one hundred percent of the amount of credit allowed a takpayeròwith
respect to a certified historic structure that is a white elephant
project under internal revenue code § 47(c)(3). The credit for a quali-
fied white elephant project shall be ratably allocated over a five year
period as required by internal revenue code § 47(a) and shall not exceed
fifteen million dollars, provided that the commissioner of parks, recre-
ation and historic preservation may determine that a subsequent applica-
tion for a white elephant project received from the same applicant be
deemed a "Phase II" application where the subsequent application is
determined reasonably related to the original and is submitted within
five years of the previous application for an eligible white elephant
project having seventy-five million dollars or less of qualified reha-
bilitation expenditures. In addition, for taxable years beginning on or
after January 1, 2035, the credit for a white elephant project shall not
exceed three hundred thousand dollars. Paragra ph (e) is amended to
exempt a qualified white elephant rehabilitation project that is also a
qualified low-income housing project under article two-A of the public
housing law from the requirement that the project be in whole or in part
located within a qualified census tract. Paragraph (f) is added to
define "white elephant project" and "phase II housing project". Para-
graph (g) is added to permit the credit to be allocated without regard
to and in a separate manner from any federal rehabilitation credit that
may be allocated with respect to a qualified white elephant project.
Paragraph (h) is added to require the commissioner of taxation and
finance to report annually on the aggregate amount of historic rehabili-
tation credits claimed and awarded during the preceding calendar year,
and such report shall be provided to the governor, temporary president
of the senate, speaker of the assembly, chair of the senate finance
committee and chair of the assembly ways and means committee and shall
be made publicly available on the department's website.
§ 3: Amends paragraph (1) of subsection (y) of section 1511 of the tax
law to extend the availability of the credit for rehabilitation of
historic properties to taxable years beginning before January 1, 2035
and adds a new NYS credit for one hundred percent of the amount of cred-
it allowed a taxpayer with respect to a certified historic structure
that is a white elephant project under internal revenue code § 47(c)(3).
The credit for a qualified white elephant project shall be ratably allo-
cated over a five year period as required by internal revenue code §
47(a) and shall not exceed fifteen million dollars, provided that the
commissioner of parks, recreation and historic preservation may deter-
mine that a subsequent application for a white elephant project received
from the same applicant be deemed a "Phase II" application where the
subsequent application is determined reasonably related to the original
and is submitted within five years of the previous application for an
eligible white elephant project having seventy-five million dollars or
less of qualified rehabilitation expenditures. In addition, for taxable
years beginning on or after January 1, 2035, the credit for a white
elephant project shall not exceed three hundred thousand dollars. Para-
graph (5) is amended to exempt a qualified white elephant rehabilitation
project that is also a qualified low-income housing project under arti-
cle two-A of the public housing law from the requirement that the
project be in whole or in part located within a qualified census tract.
Adds paragraph (6) to define "white elephant project" and "phase II
housing project". Paragraph (7) is added to permit the credit to be
allocated without regard to and in a separate manner from any federal
rehabilitation credit that may be allocated with respect to a qualified
white elephant project. Paragraph (8) is added to require the commis-
sioner of taxation and finance to report annually on the aggregate
amount of historic rehabilitation credits claimed and awarded during the
preceding calendar year, and such report shall be provided to the gover-
nor, temporary president of the senate, speaker of the assembly, chair
of the senate finance committee and chair of the assembly ways and means
committee and shall be made publicly available on the department's
website.
§ 4: Amends the parks, recreation and historic preservation law by
adding a new article 14-A. Section 14.15 of Article 14-A defines key
terms. Section 14.16 provides for an allowance of credit for eligible
white elephant housing projects and sets the amount and limitations.
Section 14.17 authorizes the commissioner to establish such procedures
deemed necessary for monitoring compliance of an eligible white elephant
housing project with the provisions of article 14-A and for notifying
the commissioner of taxation and finance of noncompliance. Section 14.18
authorizes the commissioner to promulgate rules and regulations and
permits allocation of the credit established by article 14-A without
regard to and in a separate manner from any federal rehabilitation cred-
it for an eligible white elephant housing project.
§ 5: Amends paragraph 2 of subsection (pp) of section 606 of the tax law
to extend the credit for rehabilitation of historic homeownership from
two thousand twenty-five to two thousand thirty-five; and to add new
paragraph 13 to direct the commissioner of taxation to report annually
on the amount of credits claimed and awarded.
§ 6: Amends section 14.05 of the parks, recreation and historic preser-
vation law by adding a new subdivision (5) to require the commissioner
to report annually on the historic rehabilitation tax credit projects
applied for under sections 210-B, 606, and 1511 of the tax law and to
detail the information to be reported.
§ 7: Establishes the effective date.
 
JUSTIFICATION:
Across the state the landscape is dotted with behemoth "white elephant"
projects, like the Central Warehouse in Albany, the mill in Victory
Mills, the Richardson Complex and the Central Terminal in Buffalo, the
Massey-Ferguson Complex in Batavia, and the NY Central Power Plant in
Yonkers. These buildings have long sat vacant as they slowly deteriorate
from neglect. Too expensive to demolish and too expensive to rehab. This
bill seeks to provide a tool to breath new life into these buildings
whose presence is part of the history of New York and of their communi-
ties, and further to encourage their rehabilitation as new and afforda-
ble housing.
This extension of the existing Historic Preservation Tax credit is a 20%
credit for projects with a minimum of $50 million in qualified rehabili-
tation expenditures, capped at fifteen million dollars. According to
the State Historic Preservation Office, there are 35 buildings that
would be of sufficient size to make use of this new extended credit. Due
to its size, this credit would need to be claimed over a five-year peri-
od, at 20% per year, resulting in a maximum fiscal impact of $3m million
per project per year for each of five years.
If the "white elephant" project is also a housing project that qualifies
for low-income housing tax credits, then the historic rehabilitation
credits will provide additional flexibilities to further aid in the
financing of the project: credits would be transferable (one-time) to
taxpayers not associated with the project and the requirement that the
project be located in a qualifying census tract would be lifted.
The chart below outlines the existing Federal and State Rehabilitation
Tax Credits for commercial buildings and adds for comparison the
extended credit proposed in this legislation.
FEDERAL STATE STATE "SMALL STATE "LARGE
COMMERCIAL COMMERCIAL PROJECTS" TAX PROJECTS" TAX
TAX CREDIT - TAX CREDIT - CREDIT - 30% CREDIT - 20%-
20% 20%
Building Type Commercial Same as Same as Same as
(includes federal federal federal
residental program program program
retals)
National Must be Same as Same as Same as
Register listed within federal federal federal
Listing 30 months of program program program
Requirements the building
being placed
in service
Census Trace None Must be Must be None
Requirement located in located in
qualifying qualifying
census tract census tract
Expenditure Qualified Same as Qualified Qualified
Requirement Rehab federal Rehab Rehan
expeditures program Expenditures Expeditures
must exeed cannot exceed must exceed
adjusted $2.5m %50m
bais (AB)
_________
Value of
Property -
Value of Land
=AB
Credit Cap None $5,000,000 $750,000 $15,000,000
Credit carry may be For buildings For buildings For buildings
over or carried over placed in placed in placed in
Refund 1 year before service in or service in or service in or
or 20 years after 2015, after 2015, after 2015
after the unused credit unused credit unused credit
credit is may be taken may be taken may be taken
received as a refund as a refund as a refund
How is the Must be Can be Can be Must be
Credit claimed over claimed in a claimed in a claimed over
claimed? 5 years (20% single year single year 5 years(20%
of total of total
credit value credit value
per year per year)
Length of 5 years 5 years 5 years 5 years
time the
owner must
hold the
building
* For additional information on existing rehabilitation credit programs,
 
PLEASE SEE HTTPS://PARKS.NY.GOV/SHPO/.
 
PRIOR LEGISLATIVE HISTORY:
None
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
TBD
 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
beginning on or after January 1, 2024.

Statutes affected:
S4174: 14.05 parks recreation and historic preservation law