Proposed Affordable Housing Legislation Alert

Proposed Affordable Housing Legislation Would Expand the Low-Income Housing Tax Credit Proposed affordable housing legislation in the United States Senate would expand the Low Income Housing Tax Credit (LIHTC), America’s main tool for creating and preserving affordable rental housing.

America is facing what many believe is a housing affordability crisis, leaving lower-income households in every state struggling to afford stable places to live. At the same time, many federal, state and local affordable housing resources remain stagnate or are in decline.

The proposed legislation introduced by Sen. Maria Cantwell (D-WA) and Senate Finance Committee Chairman Orrin Hatch (R-UT), as well as Sen. Ron Wyden,( D-OR), and Sen. Charles Schumer (D-NY), the Affordable Housing Credit Improvement Act of 2016 would gradually expand the LIHTC by 50 percent; create a new income-averaging option to help developments maintain financial feasibility; and establish a permanent four percent credit rate floor for acquisition and bond-financed projects, among other changes.

The legislation also includes a provision to change the name of the LIHTC to the “Affordable Housing Tax Credit.” For more information, please contact Anthony P. Marshall at 315-214-2033 / amarshall@harrisbeach.com, Steven A. Marshall at 315-214-2029 /smarshall@harrisbeach.com, or the Harris Beach attorney with whom you usually work.

This legal alert does not purport to be a substitute for advice of counsel on specific matters. Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, Melville, New York City, Rochester, Saratoga Springs, Syracuse, Uniondale and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.

Legislative_Alert_Affordable_Housing_Credit_2016

14TH PROPOSAL OF GOVERNOR CUOMO’S 2016 AGENDA: INCREASE OPPORTUNITY FOR MINORITY AND WOMEN-OWNED BUSINESSES

14TH PROPOSAL OF GOVERNOR CUOMO’S 2016 AGENDA: INCREASE OPPORTUNITY FOR MINORITY AND WOMEN-OWNED BUSINESSES

Governor pushes to apply 30 percent MWBE goal to all state-funded contracts – not just those issued by agencies and authorities – making additional $65 billion in state funds subject to nation’s highest MWBE goal

Governor Andrew M. Cuomo today unveiled the 14th signature proposal of his 2016 agenda: increase opportunity for minority- and women-owned business enterprises across New York State.

In 2014, Governor Cuomo established a goal of 30 percent for New York’s MWBE state contract utilization – the highest goal of any state in the nation. However, under state law, that goal only applies to contracts issued by state agencies and authorities; it does not apply to state funding given to localities such as cities, counties, towns, villages and school districts, which amounts to approximately $65 billion annually. This year, the Governor will advance legislation addressing this disconnect by expanding the MWBE goal setting to localities and entities that subcontract with those localities. Doing so will leverage the largest pool of state funding in history to combat systemic discrimination and create new opportunities for MWBE participation.

“We must extend our MWBE program to all state dollars in order to ensure fairness in economic opportunity,”said Governor Cuomo. “This proposal will help minority and women-owned businesses compete for another $65 billion in state contracts. This is about continuing New York’s legacy as a national leader on economic justice, and I am proud to be leading the fight again this year.”

Since taking office in 2011, Governor Cuomo has transformed the state’s MWBE program and increased access to valuable contracting opportunities. That same year, during his first State of the State address, Governor Cuomo raised the statewide MWBE goal from 10 to 20 percent and signed an executive order establishing a statewide MWBE Team to explore ways to eliminate barriers and expand the participation of these enterprises in state contracting.

By 2014, a number of key initiatives that the MWBE Team pushed forward, including an improved online reporting system, a streamlined certification process, increased outreach initiatives, and a State-sponsored bonding program, helped increase MWBE utilization beyond the 20 percent goal that the Governor set in in 2011.

After surpassing his earlier 20 percent MWBE goal, the Governor once again raised the bar and set a new statewide goal of 30 percent utilization.

Under the Governor’s leadership, more than 4,300 MWBEs have been certified, more than 3,600 have been recertified, and more than $6.3 billion in state contracts have been secured by women or minority-owned businesses. As a result, MWBE certification and utilization on state contracts has more than doubled in just five years.

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Additional news available at www.governor.ny.gov
New York State | Executive Chamber |press.office@exec.ny.gov | 518.474.8418

15-year Qualified leasehold Improvement Depreciation Permanent!

Protecting Americans from Tax Hikes (PATH) Act of 2015 makes 15-year qualified leasehold improvement depreciation permanent!

In addition to leasehold improvement, the bill also includes these significant provisions:

  • Section 179 small business expensing – The bill permanently extends small business expensing limitations and phase-out amounts, and makes permanent the rules allowing for certain qualified leasehold improvements to be eligible for expensing.  It increases the expensing limit to $500,000 (with a phase-out at $2 million) and indexes for inflation.
  • Five-year extension for bonus depreciation – Extends bonus depreciation for property acquired and placed in service during 2015 through 2019. The bonus depreciation percentage is 50 percent for property placed in service during 2015, 2016 and 2017 and is reduced thereafter, to 40 percent in 2018, and 30 percent in 2019.  Applies to qualified property with a recovery period of 20 years or less.
  • Five-year extension for new markets tax credits – Authorizes the allocation of $3.5 billion of New Markets Tax Credits for each year from 2015 through 2019.
  • Two-year extension for the energy-efficient commercial buildings deduction – Extends the deduction for energy efficiency improvements for 2015 and through 2016, and updates the standards used to the ASHRAE 2007 code.
  • Reforms the Foreign Interest in Real Property Tax Act (FIRPTA) – Increases the stake that a foreign investor can take in a real estate investment trust without triggering tax liability, and exempts qualified foreign pension funds from FIRPTA taxation.

Brownfields Program Extended

Legislators Agree To Extend Brownfields Program

By Scott Waldman

4:17 p.m. | Mar. 31, 2015

ALBANY—Reforms to a key pollution mitigation program will make it harder for properties in New York City to qualify and will target redevelopment to poor neighborhoods.

The state Legislature largely agreed to Governor Andrew Cuomo’s suggested reforms to the Brownfields program, which was to expire this year and has been abused by developers for years. Critics have said the state has spent more than $1 billion to clean up fewer than 200 sites.

The deal reached by the Legislature refocuses the program on upstate properties, where state incentives are needed more to encourage the cleanup and redevelopment of property polluted by industry, and extends it for a decade. Lightly polluted sites will get through the program more quickly under the deal.

New York City properties must meet a set of conditions to qualify for redevelopment reimbursements under the reformed program. Properties must be “upside-down,” or worth less than 75 percent of their cleanup cost. They must be located in economically challenged areas, underutilized and include affordable housing as well. Developers will receive remediation credit based only on the polluted property they actually clean up, not the overall scope of the project.

Those restrictions will not apply to upstate projects, which will automatically qualify for remediation and redevelopment credits. Upstate legislators said Cuomo’s original proposal, which carried the same restrictions for upstate properties, would have disqualified many properties and rendered the program unworkable in some of the regions where it has worked well, including Buffalo.

Last year, lawmakers could not reach an agreement on the Brownfields reforms and extended the program temporarily. Cuomo has pushed for an overhaul of the program, and for an increase in the Superfund program that is also used to clean up polluted properties.

Under the budget deal released Wednesday, the Superfund program will be extended for a decade. It will receive $100 million in the first year and is expected to receive that amount every year, for a total of $1 billion.