Grants tax credit to business firms for contributions of real property made to not-for-profit housing companies

3 Co-sponsors

• William A. Barclay
• Andrew Raia
• Joseph Saladino

2 Multi-sponsors

• Thomas McKevitt
• Marcus Molinaro

BILL NUMBER:A10650

Title of bill

An act to amend the private housing finance law and the tax law, in relation to granting tax credit to business firms for contributions of real property made to not-for-profit housing companies

Purpose or general idea of bill

To provide an incentive for business firms to donate real property to not-for-profit housing companies by providing them with a credit against state taxes.

Summary of specific provisions

This bill adds a new Section 1134 to the Private Housing Finance Law to authorize the Commissioner of Housing and Community Renewal to establish a system of tax credit vouchers for busi- ness firms making contributions of real property to any not-for-pro-fit housing company that develops, sponsors, or manages any housing project or program which benefits low and moderate income persons or families. The voucher could be used as a credit against any of the taxes to which the firm is subject while the amount of the voucher would be equal to one-half the amount of the fair market value of the real property. The bill further authorizes the Commissioner of Taxation and Finance to grant a credit against any tax due under the provisions of Articles 9-A, 32, and 33 of the Tax Law in an amount equal to the amount specified in the tax credit voucher. The bill further provides that the sum of all tax credits could not exceed $250,000 annually per business firm and no tax credit could be granted to any firm for activities that are a part of its ordinary course of business. In addition, the total amount of tax credits under this program could not exceed $5 million in any one fiscal year and any tax credit not used during the period within which the contribution was made could be carried forward or backward for the five succeeding or preceding fiscal or calendar years. Also, no not-for-pro- fit housing company Would be allowed to receive real property with an aggregate value in excess of $500,000 for any fiscal year.

Effects of present law which this bill would alter

This bill adds a new Section 1134 to the Private Housing Finance Law and a new subsection (qq) to Section 606 of the Tax Law.

Justification

While conducting its hearings throughout the State, the Assembly Task Force on Affordable Housing received testimony from many housing suppliers who complained about the increased cost of real prop- erty to develop affordable housing. These increased costs particularly hurt not-for-profit housing companies who have limited resources. This bill attempts to provide an incentive for business firms, especially banks and other mortgage lenders, to donate real property to these hous- ing companies in order to help them bring down the cost of constructing or rehabilitating affordable housing by providing such firms with a tax credit equal to one-half the fair market value of the real property.

Prior legislative history

A10045 of 1992; A3572 of 1996; A5161 of 2004; A8627 of 2006; A5691 of 2008; A3650 of 2009

Fiscal implications for state and local governments

Up to $5 million in state tax credits.

Effective date

One hundred twenty (120) days after enactment into law.