N.Y. Tax Law § 22 — Tax credit for remediated brownfields

§ 22. Tax credit for remediated brownfields. (a) Definitions. As used\nin this section the following terms shall have the following meanings:\n (1) Certificate of completion. A "certificate of completion" issued by\nthe commissioner of environmental conservation pursuant to section\n27-1419 of the environmental conservation law.\n (2) Qualified site. For purposes of this section, a "qualified site"\nis a site with respect to which a certificate of completion has been\nissued by the commissioner of environmental conservation pursuant to\nsection 27-1419 of the environmental conservation law.\n (3) Developer. (i) A "developer" is a taxpayer under article nine,\nnine-A, twenty-two or thirty-three of this chapter who or which either\n(I) has been issued a certificate of completion with respect to a\nqualified site or (II) has purchased or in any other way has been\nconveyed all or any portion of a qualified site from a taxpayer or any\nother party who or which has been issued a certificate of completion\nwith respect to such site provided, such purchase or conveyance occurs\nwithin seven years of the effective date of the certificate of\ncompletion issued with respect to such qualified site. Provided further,\nthat the taxpayer who or which is purchasing all or any portion of a\nqualified site and the taxpayer or any other party who or which has been\nissued a certificate of completion with respect to such site may not be\nrelated persons, as such term is defined in subparagraph (C) of\nparagraph three of subsection (b) of section four hundred sixty-five of\nthe internal revenue code.\n (ii) Where the entity to whom a certificate of completion has been\nissued is a partnership, or where the entity which has purchased all or\nany portion of a qualified site from a taxpayer who or which has been\nissued a certificate of completion with respect to such site within the\napplicable time limit is a partnership, any partner in such partnership\nwho or which is taxable under article nine, nine-A, twenty-two or\nthirty-three of this chapter shall be a developer under this paragraph.\nWhere the entity to whom a certificate of completion has been issued is\na New York S corporation, or where the entity which has purchased all or\nany portion of a qualified site from a taxpayer who or which has been\nissued a certificate of completion with respect to such site within the\napplicable time limit is a New York S corporation, any shareholder in\nsuch New York S corporation shall be a developer under this paragraph.\n (4) Cessation of status. A taxpayer shall cease to be a developer on\nthe first day of the taxable year during which revocation of its\ncertificate of completion under section 27-1419 of the environmental\nconservation law is final and no longer subject to judicial review, and\nthe amount of any credit allowed by this section shall be added back in\nthe taxable year in which such determination is final and no longer\nsubject to judicial review.\n (5) Environmental zones (EN-Zones). An "environmental zone" shall mean\nan area designated as such by the commissioner of economic development.\nSuch areas so designated are areas which are census tracts and block\nnumbering areas which, as of the two thousand census, satisfy either of\nthe following criteria:\n (A) areas that have both:\n (i) a poverty rate of at least twenty percent for the year to which\nthe data relate;\n (ii) an unemployment rate of at least one and one-quarter times the\nstatewide unemployment rate for the year to which the data relate, or;\n (B) areas that have a poverty rate of at least two times the poverty\nrate for the county in which the areas are located for the year to which\nthe data relate, provided, however, that a qualified site shall only be\ndeemed to be located in an environmental zone under this subparagraph\n(B) if such site was the subject of a brownfield site cleanup agreement\npursuant to section 27-1409 of the environmental conservation law that\nwas entered into prior to September first, two thousand ten.\n Such designation shall be made and a list of all such environmental\nzones shall be established by the commissioner of economic development\nno later than December thirty-first, two thousand four provided,\nhowever, that a qualified site shall only be deemed to be located in an\nenvironmental zone under subparagraph (B) of this paragraph if such site\nwas the subject of a brownfield site cleanup agreement pursuant to\nsection 27-1409 of the environmental conservation law that was entered\ninto prior to September first, two thousand ten.\n (b) Remediated brownfield credit for real property taxes for qualified\nsites. (1) Allowance of credit. A developer of a qualified site who or\nwhich is subject to tax under article nine, nine-A, twenty-two or\nthirty-three of this chapter, shall be allowed a credit against such\ntax, pursuant to the provisions referenced in paragraph nine of this\nsubdivision, for eligible real property taxes imposed on such site.\n (2) Amount of credit. The amount of the credit shall be twenty-five\npercent of the product of (i) the benefit period factor, (ii) the\nemployment number factor, and (iii) the eligible real property taxes\npaid or incurred by the developer of the qualified site during the\ntaxable year (or the pro rata share of such taxes in the case of a\npartner in a partnership or a shareholder in a New York S corporation),\nexcept that if the real property which is the subject of the credit\nprovided for under this section is attributed to a qualified site\nlocated in an environmental zone as defined in paragraph five of\nsubdivision (a) of this section, the amount of the credit shall be the\nproduct of the factors and taxes referred to in subparagraphs (i), (ii)\nand (iii) of this paragraph. However, the amount of the credit may not\nexceed the credit limitation set forth in paragraph seven of this\nsubdivision.\n (3) Benefit period factor. The benefit period factor is a numerical\nvalue corresponding with a benefit period of ten consecutive taxable\nyears commencing in the taxpayer's taxable year during which the\ncertificate of completion is issued for the qualified site or the\ntaxpayer's first taxable year commencing on or after April first, two\nthousand five, whichever is later. The benefit period factors are set\nforth in the following table:\nTaxable year of benefit period: Benefit period factor:\n1-10 1.0\n (4) Employment number factor. (i) The employment number factors are\nset forth in the following table:\nAverage number of full-time Employment number factor:\nemployees employed by the\ndeveloper of a qualified site, plus\nthe average number of full-time\nemployees employed by a lessee\nor lessees\nof a portion of such qualified\nsite, where such employees are\nemployed at such site\nduring the taxable year:\nAt least 25 but less than 50 .25\nAt least 50 but less than 75 .50\nAt least 75 but less than 100 .75\nAt least 100 1.00\n (ii) For purposes of this paragraph, the average number of full-time\nemployees, excluding general executive officers, employed by a developer\nand a lessee at a qualified site during a taxable year or other\napplicable period, shall be computed by ascertaining the number of such\nemployees employed by the developer and such lessee on the thirty-first\nday of March, the thirtieth day of June, the thirtieth day of September\nand the thirty-first day of December during each taxable year or other\napplicable period, by adding together the number of such individuals\nascertained on each of such dates and dividing the sum so obtained by\nthe number of such dates occurring within such taxable year or other\napplicable period. Where the developer is a partner in a partnership or\na shareholder in a New York S corporation, the number of full-time\nemployees of the partnership or the New York S corporation respectively,\nat such qualified site, shall be used for purposes of this calculation.\n (5) Eligible real property taxes. The term "eligible real property\ntaxes" means taxes imposed on real property which consists of a\nqualified site owned by the developer, provided such taxes become a lien\non the real property in a period during which the real property is a\nqualified site. In addition, the term "eligible real property taxes"\nincludes payments in lieu of taxes by the developer, with respect to a\nqualified site, to the state, a municipal corporation or a public\nbenefit corporation pursuant to a written agreement entered into between\nthe developer and the state, a municipal corporation or a public benefit\ncorporation. Provided, however, such a payment in lieu of taxes shall\nnot constitute eligible real property taxes in any taxable year to the\nextent that such payment exceeds the product of (A) the greater of (i)\nthe basis for federal income tax purposes, determined on the date the\ntaxpayer becomes a developer as defined under this section, of real\nproperty, including buildings and structural components of buildings,\nowned by the developer and located on a qualified site with respect to\nwhich the taxpayer is a developer, or (ii) the basis for federal income\ntax purposes of such real property described in clause (i) of this\nsubparagraph on the last day of the taxable year, and (B) the estimated\neffective full value tax rate within the county in which such property\nis located, as most recently calculated by the commissioner. The\ncommissioner shall annually calculate estimated and effective full value\ntax rates within each county for this purpose based upon the most\ncurrent information available to him or her in relation to county, city,\ntown, village and school district taxes. Provided further, where the\namount of the credit determined under paragraph two of this subdivision\nis the total product of the factors and tax specified therein, the term\n"eligible real property taxes" under this paragraph shall apply only to\ntaxes imposed on real property which is attributed to a qualified site\nlocated in an environmental zone. Where the developer is a partner in a\npartnership or a shareholder in a New York S corporation, such real\nproperty shall be owned by the partnership or the New York S\ncorporation, respectively.\n (6) Credit recapture. Where a developer's eligible real property taxes\nwhich were the basis for the allowance of the credit provided for under\nthis subdivision are subsequently reduced as a result of a final order\nin any proceeding under article seven of the real property tax law or\nother provision of law, the taxpayer shall add back, in the taxable year\nin which such final order is issued, the excess of (i) the amount of\ncredit originally allowed for a taxable year over (ii) the amount of\ncredit determined based upon the reduced eligible real property taxes.\nIf such final order reduces real property taxes for more than one year,\nthe taxpayer must determine how much of such reduction is attributable\nto each year covered by such final order and calculate the amount of\ncredit which is required by this paragraph to be recaptured for each\nyear based on such reduction.\n (7) Credit limitation. The credit limitation shall be the product of\n(i) ten thousand dollars and (ii) the average number of full-time\nemployees employed by the developer of a qualified site and a lessee or\nlessees of a portion of such qualified site during the taxable year, as\nsuch average is computed under subparagraph (ii) of paragraph four of\nthis subdivision.\n (8) Credit option. If the qualified site is located in whole or in\npart in an area designated as an empire zone pursuant to article\neighteen-B of the general municipal law, and a taxpayer meets the\neligibility requirements for both the credit provided for under this\nsection and the QEZE credit for real property taxes provided for under\nsection fifteen of this article, with respect to all or part of such\nsite, such taxpayer shall not be allowed to claim both such credits. The\ntaxpayer shall be required, in the first taxable year such taxpayer is\nallowed to claim a credit under this section, to elect whether to claim\nthe credit provided for under this section or the credit provided for\nunder section fifteen of this article. Such election shall be made with\nthe filing of the return or report required under article nine, nine-A,\ntwenty-two, thirty-two or thirty-three of this chapter, whichever is\napplicable, for such taxable year. Such election shall apply to and be\nbinding in each subsequent taxable year applicable to the credit\nprovided for under either this section or section fifteen of this\narticle. A taxpayer who or which has been allowed a credit under section\nfifteen of this article, in a taxable year preceding the first taxable\nyear such taxpayer is allowed to claim a credit under this section,\nshall not be precluded from making the election provided for in this\nparagraph.\n (9) Cross-references. For application of the credit provided for in\nthis subdivision, see the following provisions of this chapter:\n (i) Article 9: Section 187-h.\n (ii) Article 9-A: Section 210-B: subdivision 18.\n (iii) Article 22: Section 606: subsections (i) and (ee).\n (iv) Article 33: Section 1511: subdivision (v).\n