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STATE OF NEW YORK ________________________________________________________________________ 3237 2017-2018 Regular Sessions IN SENATE January 20, 2017 ___________ Introduced by Sens. RANZENHOFER, ORTT -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations AN ACT to amend the tax law, in relation to the creation of a biotech- nology research and development investment tax credit The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The tax law is amended by adding a new section 24-b to read 2 as follows: 3 § 24-b. Bioscience and medical technology (Bio/Med) research and 4 development tax credit. (a) Definitions. As used in this section, the 5 following terms shall have the following meanings: 6 (1) "Qualified Bio/Med research and development costs" means qualified 7 research expenses and basic research payments as defined in sections 41 8 (b) and (e) of the internal revenue code, except it does not include 9 expenses incurred for qualified research or basic research conducted 10 outside of New York state, for purposes of developing a product or phar- 11 maceutical, instrument, apparatus, machine, contrivance, implant or 12 other similar or related article, including a component part or accesso- 13 ry that are applicable to the prevention, treatment or cure of a disease 14 or condition of human beings. 15 (2) "Qualified Bio/Med company" is a corporation, partnership, limited 16 partnership or other entity which is engaged in the production of a 17 product or pharmaceutical, instrument, apparatus, machine, contrivance, 18 implant or other similar or related article, including a component part 19 or accessory that are applicable to the prevention, treatment or cure of 20 a disease or condition of human beings. 21 (b) (1) Allowance of credit. A taxpayer which is a qualified Bio/Med 22 company, sole proprietor or a member of a partnership, and which is 23 subject to tax under articles nine-A or twenty-two of this chapter, 24 shall be allowed a credit against such tax, pursuant to the provisions EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06143-01-7S. 3237 2 1 referenced in subdivision (d) of this section, to be computed as herein- 2 after provided. 3 (2) The amount of the credit shall be the product (or pro rata share 4 of the product, in the case of a member of a partnership) of fifteen 5 percent and the qualified Bio/Med research and development costs paid or 6 incurred in the state. The credit shall be allowed for the taxable year 7 in which the qualified Bio/Med research and development activity occurs. 8 If the amount of the credit is at least one million dollars but less 9 than five million dollars, the credit shall be claimed over a two year 10 period beginning in the first taxable year in which the credit may be 11 claimed and in the next succeeding taxable year, with one-half of the 12 amount of credit allowed being claimed in each year. If the amount of 13 the credit is at least five million dollars, the credit shall be claimed 14 over a three year period beginning in the first taxable year in which 15 the credit may be claimed and in the next two succeeding taxable years, 16 with one-third of the amount of the credit allowed being claimed in each 17 year. 18 (3) No qualified Bio/Med research and development costs used by a 19 taxpayer either as the basis for the allowance of the credit provided 20 for under this section or used in the calculation of the credit provided 21 for under this section shall be used by such taxpayer to claim any other 22 credit allowed pursuant to this chapter. 23 (c) Cross-references. For application of the credit provided for in 24 this section, see the following provisions of this chapter: 25 (1) article 9-A: section 210-B: subdivision 49. 26 (2) article 22: section 606: subsection (ccc). 27 (d) Allocation of credit. (1) The aggregate amount of tax credits 28 allowed under this section, subdivision forty-nine of section two 29 hundred ten-B and subsection (ccc) of section six hundred six of this 30 chapter in any calendar year shall be fifty million dollars in two thou- 31 sand seventeen, and each succeeding year up to and including two thou- 32 sand twenty. 33 (2) For the period two thousand eighteen through two thousand twenty- 34 one, in addition to the amount of credit established in paragraph one of 35 this subdivision, a taxpayer shall be allowed a credit equal to the 36 product (or pro rata share of the product, in the case of a member of a 37 partnership) of five percent and the amount of the qualified Bio/Med 38 research and development costs by a qualified Bio/Med company in one of 39 the counties specified in this paragraph. For purposes of this addi- 40 tional credit, the services must be performed or the personal property 41 must be installed in one or more of the following counties: Albany, 42 Allegany, Broome, Cattaraugus, Cayuga, Chautauqua, Chemung, Chenango, 43 Clinton, Columbia, Cortland, Delaware, Dutchess, Erie, Essex, Franklin, 44 Fulton, Genesee, Greene, Hamilton, Herkimer, Jefferson, Lewis, Living- 45 ston, Madison, Monroe, Montgomery, Niagara, Oneida, Onondaga, Ontario, 46 Orleans, Oswego, Otsego, Rensselaer, Saratoga, Schenectady, Schoharie, 47 Schuyler, Seneca, St. Lawrence, Steuben, Sullivan, Tioga, Tompkins, 48 Ulster, Warren, Washington, Wayne, Wyoming, or Yates. The aggregate 49 amount of tax credits allowed pursuant to the authority of this para- 50 graph shall be ten million dollars each year during the period two thou- 51 sand eighteen through two thousand twenty-one of the annual allocation 52 made available to the program pursuant to this subdivision. If the total 53 amount of allocated credits applied for under this paragraph in any year 54 exceeds the aggregate amount of tax credits allowed for such year under 55 this paragraph, such excess shall be treated as having been applied for 56 on the first day of the next year. If the total amount of allocated taxS. 3237 3 1 credits applied for under this paragraph at the conclusion of any year 2 is less than ten million dollars, the remainder shall be treated as part 3 of the annual allocation made available to the program pursuant to 4 subdivision (d) of this section. However, in no event may the total of 5 the credits allocated under this paragraph exceed ten million dollars in 6 any year during the period two thousand eighteen through two thousand 7 twenty-one. 8 § 2. Section 210-B of the tax law is amended by adding a new subdivi- 9 sion 49 to read as follows: 10 49. Bio/Med research and development investment credit. A taxpayer 11 shall be allowed a credit, to be computed as provided in section twen- 12 ty-four-b of this chapter, against the tax imposed by this article. In 13 no event shall the credit allowed under this subdivision for any taxable 14 year reduce the tax due for such year to less than the amount prescribed 15 in paragraph (d) of subdivision one of section two hundred ten of this 16 article. However, if the amount of credit allowed under this subdivision 17 for any taxable year reduces the tax to such amount or if the taxpayer 18 otherwise pays tax based on the fixed dollar minimum amount, any amount 19 of credit thus not deductible in such taxable year shall be treated as 20 an overpayment of tax to be credited in accordance with the provisions 21 of section one thousand eighty-six of this chapter. Provided, however, 22 the provisions of subsection (c) of section one thousand eighty-eight of 23 this chapter notwithstanding, no interest shall be paid thereon. 24 § 3. Section 606 of the tax law is amended by adding a new subsection 25 (ccc) to read as follows: 26 (ccc) Bio/Med research and development investment credit. A taxpayer 27 shall be allowed a credit, to be computed as provided in section twen- 28 ty-four-b of this chapter, against the tax imposed by this article. If 29 the amount of the credit allowed under this subsection for any taxable 30 year shall exceed the taxpayer's tax for such year, the excess shall be 31 treated as an overpayment of tax to be credited or refunded in accord- 32 ance with the provisions of section six hundred eighty-six of this arti- 33 cle, provided, however, that no interest shall be paid thereon. 34 § 4. This act shall take effect immediately.