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

§ 22. Tax credit for remediated brownfields. (a) Definitions. As used

in this section the following terms shall have the following meanings:

(1) Certificate of completion. A "certificate of completion" issued by

the commissioner of environmental conservation pursuant to section

27-1419 of the environmental conservation law.

(2) Qualified site. For purposes of this section, a "qualified site"

is a site with respect to which a certificate of completion has been

issued by the commissioner of environmental conservation pursuant to

section 27-1419 of the environmental conservation law.

(3) Developer. (i) A "developer" is a taxpayer under article nine,

nine-A, twenty-two or thirty-three of this chapter who or which either

(I) has been issued a certificate of completion with respect to a

qualified site or (II) has purchased or in any other way has been

conveyed all or any portion of a qualified site from a taxpayer or any

other party who or which has been issued a certificate of completion

with respect to such site provided, such purchase or conveyance occurs

within seven years of the effective date of the certificate of

completion issued with respect to such qualified site. Provided further,

that the taxpayer who or which is purchasing all or any portion of a

qualified site and the taxpayer or any other party who or which has been

issued a certificate of completion with respect to such site may not be

related persons, as such term is defined in subparagraph (C) of

paragraph three of subsection (b) of section four hundred sixty-five of

the internal revenue code.

(ii) Where the entity to whom a certificate of completion has been

issued is a partnership, or where the entity which has purchased all or

any portion of a qualified site from a taxpayer who or which has been

issued a certificate of completion with respect to such site within the

applicable time limit is a partnership, any partner in such partnership

who or which is taxable under article nine, nine-A, twenty-two or

thirty-three of this chapter shall be a developer under this paragraph.

Where the entity to whom a certificate of completion has been issued is

a New York S corporation, or where the entity which has purchased all or

any portion of a qualified site from a taxpayer who or which has been

issued a certificate of completion with respect to such site within the

applicable time limit is a New York S corporation, any shareholder in

such New York S corporation shall be a developer under this paragraph.

(4) Cessation of status. A taxpayer shall cease to be a developer on

the first day of the taxable year during which revocation of its

certificate of completion under section 27-1419 of the environmental

conservation law is final and no longer subject to judicial review, and

the amount of any credit allowed by this section shall be added back in

the taxable year in which such determination is final and no longer

subject to judicial review.

(5) Environmental zones (EN-Zones). An "environmental zone" shall mean

an area designated as such by the commissioner of economic development.

Such areas so designated are areas which are census tracts and block

numbering areas which, as of the two thousand census, satisfy either of

the following criteria:

(A) areas that have both:

(i) a poverty rate of at least twenty percent for the year to which

the data relate;

(ii) an unemployment rate of at least one and one-quarter times the

statewide unemployment rate for the year to which the data relate, or;

(B) areas that have a poverty rate of at least two times the poverty

rate for the county in which the areas are located for the year to which

the data relate, provided, however, that a qualified site shall only be

deemed to be located in an environmental zone under this subparagraph

(B) if such site was the subject of a brownfield site cleanup agreement

pursuant to section 27-1409 of the environmental conservation law that

was entered into prior to September first, two thousand ten.

Such designation shall be made and a list of all such environmental

zones shall be established by the commissioner of economic development

no later than December thirty-first, two thousand four provided,

however, that a qualified site shall only be deemed to be located in an

environmental zone under subparagraph (B) of this paragraph if such site

was the subject of a brownfield site cleanup agreement pursuant to

section 27-1409 of the environmental conservation law that was entered

into prior to September first, two thousand ten.

(b) Remediated brownfield credit for real property taxes for qualified

sites. (1) Allowance of credit. A developer of a qualified site who or

which is subject to tax under article nine, nine-A, twenty-two or

thirty-three of this chapter, shall be allowed a credit against such

tax, pursuant to the provisions referenced in paragraph nine of this

subdivision, for eligible real property taxes imposed on such site.

(2) Amount of credit. The amount of the credit shall be twenty-five

percent of the product of (i) the benefit period factor, (ii) the

employment number factor, and (iii) the eligible real property taxes

paid or incurred by the developer of the qualified site during the

taxable year (or the pro rata share of such taxes in the case of a

partner in a partnership or a shareholder in a New York S corporation),

except that if the real property which is the subject of the credit

provided for under this section is attributed to a qualified site

located in an environmental zone as defined in paragraph five of

subdivision (a) of this section, the amount of the credit shall be the

product of the factors and taxes referred to in subparagraphs (i), (ii)

and (iii) of this paragraph. However, the amount of the credit may not

exceed the credit limitation set forth in paragraph seven of this

subdivision.

(3) Benefit period factor. The benefit period factor is a numerical

value corresponding with a benefit period of ten consecutive taxable

years commencing in the taxpayer's taxable year during which the

certificate of completion is issued for the qualified site or the

taxpayer's first taxable year commencing on or after April first, two

thousand five, whichever is later. The benefit period factors are set

forth in the following table:

Taxable year of benefit period: Benefit period factor:

1-10 1.0

(4) Employment number factor. (i) The employment number factors are

set forth in the following table:

Average number of full-time Employment number factor:

employees employed by the

developer of a qualified site, plus

the average number of full-time

employees employed by a lessee

or lessees

of a portion of such qualified

site, where such employees are

employed at such site

during the taxable year:

At least 25 but less than 50 .25

At least 50 but less than 75 .50

At least 75 but less than 100 .75

At least 100 1.00

(ii) For purposes of this paragraph, the average number of full-time

employees, excluding general executive officers, employed by a developer

and a lessee at a qualified site during a taxable year or other

applicable period, shall be computed by ascertaining the number of such

employees employed by the developer and such lessee on the thirty-first

day of March, the thirtieth day of June, the thirtieth day of September

and the thirty-first day of December during each taxable year or other

applicable period, by adding together the number of such individuals

ascertained on each of such dates and dividing the sum so obtained by

the number of such dates occurring within such taxable year or other

applicable period. Where the developer is a partner in a partnership or

a shareholder in a New York S corporation, the number of full-time

employees of the partnership or the New York S corporation respectively,

at such qualified site, shall be used for purposes of this calculation.

(5) Eligible real property taxes. The term "eligible real property

taxes" means taxes imposed on real property which consists of a

qualified site owned by the developer, provided such taxes become a lien

on the real property in a period during which the real property is a

qualified site. In addition, the term "eligible real property taxes"

includes payments in lieu of taxes by the developer, with respect to a

qualified site, to the state, a municipal corporation or a public

benefit corporation pursuant to a written agreement entered into between

the developer and the state, a municipal corporation or a public benefit

corporation. Provided, however, such a payment in lieu of taxes shall

not constitute eligible real property taxes in any taxable year to the

extent that such payment exceeds the product of (A) the greater of (i)

the basis for federal income tax purposes, determined on the date the

taxpayer becomes a developer as defined under this section, of real

property, including buildings and structural components of buildings,

owned by the developer and located on a qualified site with respect to

which the taxpayer is a developer, or (ii) the basis for federal income

tax purposes of such real property described in clause (i) of this

subparagraph on the last day of the taxable year, and (B) the estimated

effective full value tax rate within the county in which such property

is located, as most recently calculated by the commissioner. The

commissioner shall annually calculate estimated and effective full value

tax rates within each county for this purpose based upon the most

current information available to him or her in relation to county, city,

town, village and school district taxes. Provided further, where the

amount of the credit determined under paragraph two of this subdivision

is the total product of the factors and tax specified therein, the term

"eligible real property taxes" under this paragraph shall apply only to

taxes imposed on real property which is attributed to a qualified site

located in an environmental zone. Where the developer is a partner in a

partnership or a shareholder in a New York S corporation, such real

property shall be owned by the partnership or the New York S

corporation, respectively.

(6) Credit recapture. Where a developer's eligible real property taxes

which were the basis for the allowance of the credit provided for under

this subdivision are subsequently reduced as a result of a final order

in any proceeding under article seven of the real property tax law or

other provision of law, the taxpayer shall add back, in the taxable year

in which such final order is issued, the excess of (i) the amount of

credit originally allowed for a taxable year over (ii) the amount of

credit determined based upon the reduced eligible real property taxes.

If such final order reduces real property taxes for more than one year,

the taxpayer must determine how much of such reduction is attributable

to each year covered by such final order and calculate the amount of

credit which is required by this paragraph to be recaptured for each

year based on such reduction.

(7) Credit limitation. The credit limitation shall be the product of

(i) ten thousand dollars and (ii) the average number of full-time

employees employed by the developer of a qualified site and a lessee or

lessees of a portion of such qualified site during the taxable year, as

such average is computed under subparagraph (ii) of paragraph four of

this subdivision.

(8) Credit option. If the qualified site is located in whole or in

part in an area designated as an empire zone pursuant to article

eighteen-B of the general municipal law, and a taxpayer meets the

eligibility requirements for both the credit provided for under this

section and the QEZE credit for real property taxes provided for under

section fifteen of this article, with respect to all or part of such

site, such taxpayer shall not be allowed to claim both such credits. The

taxpayer shall be required, in the first taxable year such taxpayer is

allowed to claim a credit under this section, to elect whether to claim

the credit provided for under this section or the credit provided for

under section fifteen of this article. Such election shall be made with

the filing of the return or report required under article nine, nine-A,

twenty-two, thirty-two or thirty-three of this chapter, whichever is

applicable, for such taxable year. Such election shall apply to and be

binding in each subsequent taxable year applicable to the credit

provided for under either this section or section fifteen of this

article. A taxpayer who or which has been allowed a credit under section

fifteen of this article, in a taxable year preceding the first taxable

year such taxpayer is allowed to claim a credit under this section,

shall not be precluded from making the election provided for in this

paragraph.

(9) Cross-references. For application of the credit provided for in

this subdivision, see the following provisions of this chapter:

(i) Article 9: Section 187-h.

(ii) Article 9-A: Section 210-B: subdivision 18.

(iii) Article 22: Section 606: subsections (i) and (ee).

(iv) Article 33: Section 1511: subdivision (v).