A08559 Summary:

BILL NO    A08559D

SAME AS    SAME AS UNI. S06359-D

SPONSOR    Budget

COSPNSR    

MLTSPNSR   

Amd Various Laws, generally

Enacts into law major components of legislation necessary to implement the
state fiscal plan for the 2014-2015 state fiscal year; relates to the
reformation of the taxation on business corporations; allows direct payment of
STAR savings; extends fees for the establishment of oil and gas unit of
production value; modifies signature requirements on e-filed returns; extends
the non-custodial parent earned income tax credit for two years; closes the
resident trust loophole; repeals the additional minimum personal income tax;
establishes an enhanced real property tax circuit breaker; modifies delivery of
the family tax relief credit; extends the empire state commercial production
tax credit; authorizes additional credits for the low income housing credit;
establishes a twenty percent real property tax credit for manufacturers and
eliminates the net income tax on upstate manufacturers; repeals the franchise
tax on agriculture cooperatives; provides a refundable credit for
telecommunications excise taxes on START-UP NY; enhances the youth works tax
credit; extends the alternative fuels tax exemption; simplifies the
distribution of motor vehicle fee receipts; relates to comprehensive estate tax
reform; extends Monticello raceway video lottery terminal rates for one year;
extends certain tax rates and certain simulcasting provisions; extends VLG
vendors capital awards program; aligns mobility and personal income tax filings
for the self-employed; relates to commercial gaming; provides a two-year
property tax freeze through a refundable personal income tax credit; extends
certain New York city tax exemptions; relates to a musical theatrical
production credit; increases the sales tax exemption threshold amount for
vending machines; increases film production credit benefits for films produced
in certain counties; relates to the length of service awards; creates a third
region for the prepayment of motor fuel taxes; establishes the workers with
disabilities tax credit program; provides tax incentives to employers for
employing individuals with developmental disabilities; allows a STAR lookback
period for widows and widowers; relates to health insurance for jockeys.
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A08559 Actions:

BILL NO    A08559D

01/21/2014 referred to ways and means
02/12/2014 amend (t) and recommit to ways and means
02/12/2014 print number 8559a
02/21/2014 amend and recommit to ways and means
02/21/2014 print number 8559b
03/11/2014 amend and recommit to ways and means
03/11/2014 print number 8559c
03/28/2014 amend and recommit to ways and means
03/28/2014 print number 8559d
03/31/2014 reported referred to rules
03/31/2014 reported 
03/31/2014 rules report cal.34
03/31/2014 substituted by s6359d
           S06359  AMEND=D  BUDGET
           01/21/2014 REFERRED TO FINANCE
           02/12/2014 AMEND (T) AND RECOMMIT TO FINANCE
           02/12/2014 PRINT NUMBER 6359A
           02/21/2014 AMEND AND RECOMMIT TO FINANCE
           02/21/2014 PRINT NUMBER 6359B
           03/14/2014 AMEND AND RECOMMIT TO FINANCE
           03/14/2014 PRINT NUMBER 6359C
           03/28/2014 AMEND (T) AND RECOMMIT TO FINANCE
           03/28/2014 PRINT NUMBER 6359D
           03/31/2014 ORDERED TO THIRD READING CAL.376
           03/31/2014 PASSED SENATE
           03/31/2014 DELIVERED TO ASSEMBLY
           03/31/2014 referred to ways and means
           03/31/2014 substituted for a8559d
           03/31/2014 ordered to third reading rules cal.34
           03/31/2014 passed assembly
           03/31/2014 returned to senate
           03/31/2014 DELIVERED TO GOVERNOR
           03/31/2014 SIGNED CHAP.59
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A08559 Votes:

There are no votes for this bill in this legislative session.
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A08559 Memo:

BILL NUMBER:A8559D

TITLE OF BILL:  An act to amend the tax law, the general municipal
law, the urban development corporation act, the business corporation
law, and the general associations law, in relation to reforming
taxation of business corporations; and to repeal various provisions of
the tax law relating thereto (Part A); to amend the real property tax
law, in relation to the STAR registration program (Part B); to amend
chapter 540 of the laws of 1992, amending the real property tax law
relating to oil and gas charges, in relation to the effective date of
such chapter (Part C); intentionally omitted (Part D); to amend the
tax law, in relation to modifying the signature requirement on e-filed
returns prepared by tax professionals (Part E); intentionally omitted
(Part F); to amend part I of chapter 58 of the laws of 2006, amending
the tax law relating to providing an enhanced earned income tax
credit, in relation to the effectiveness thereof (Part G);
intentionally omitted (Part H); to amend the tax law and the
administrative code of the city of New York, in relation to taxing
residents who are grantors of exempt resident trusts that qualify as
non-grantor incomplete gift trusts on the income from such trusts and
taxing residents who are beneficiaries of all other exempt resident
trusts or nonresident trusts on the distributions of accumulated
income that they receive from such trusts (Part I); to amend the tax
law and the administrative code of the city of New York, in relation
to eliminating the personal income tax add-on minimum tax; and to
repeal certain provisions of such laws relating thereto (Part J); to
amend the tax law, in relation to establishing an enhanced real
property tax circuit breaker; and providing for the repeal of such
provisions upon expiration thereof (Part K); intentionally omitted
(Part L); to amend the tax law, in relation to the prepayment element
of the family tax relief credit (Part M); intentionally omitted (Part
N); to amend the tax law, in relation to extending the empire state
commercial production tax credit (Part O); to amend the public housing
law, in relation to extending the credit against income tax for
persons or entities investing in low-income housing (Part P);
intentionally omitted (Part Q); to amend the tax law, in relation to
providing a tax credit for real property taxes to New York
manufacturers; and providing for the repeal of certain provisions upon
expiration thereof (Part R); to amend the economic development law,
the tax law, the transportation law, the administrative code of the
city of New York and the New York state urban development corporation
act, in relation to repealing the franchise tax on farmers', fruit
growers', and other like agricultural corporations organized and
operated on a co-operative basis; and to repeal section 185 of the tax
law relating to franchise tax on farmers', fruit growers', and other
like agricultural corporations organized and operated on a
co-operative basis; to repeal sections 187-j, 187-k, 187-l, 187-m,
187-q, 187-r and 187-s of the tax law relating to certain tax credits;
to repeal paragraph 1 of subdivision (h) of section 15, paragraph 1 of
subdivision (g) of section 31, and certain other provisions of the tax
law, in relation to making conforming changes (Part S); to amend the
tax law, in relation to providing a credit for excise tax on
telecommunication services for businesses located in tax-free NY areas
and providing for the repeal of certain provisions upon expiration
thereof (Part T); to amend the tax law, in relation to reducing the
number of hours of part-time work needed by employees for employer
qualification for the New York youth works tax credit; and to amend


the labor law, in relation to the New York youth works tax credit
(Part U); to amend chapter 109 of the laws of 2006 amending the tax
law and other laws relating to providing exemptions, reimbursements
and credits from various taxes for certain alternative fuels, in
relation to extending the alternative fuels tax exemptions for two
years (Part V); to amend chapter 63 of the laws of 2000, amending the
tax law and other laws relating to modifying the distribution of funds
from the motor vehicle fuel excise tax and the vehicle and traffic
law, in relation to simplifying the methodology for distribution of
motor vehicle receipts (Part W); to amend the tax law, in relation to
the estate tax; to repeal section 2 of chapter 1013 of the laws of
1962, amending the tax law relating to imposing a tax on the transfer
of estates of decedents dying on or after April first, nineteen
hundred sixty-three, relating to an appendix of applicable internal
revenue code provisions, and to repeal article 26-B of the tax law,
relating to the generation skipping transfer tax (Part X);
intentionally omitted (Part Y); to amend the tax law, in relation to
vendor fees paid to vendor tracks (Part Z); to amend the racing,
pari-mutuel wagering and breeding law, in relation to licenses for
simulcast facilities, sums relating to track simulcast, simulcast of
out-of-state thoroughbred races, simulcasting of races run by
out-of-state harness tracks and distributions of wagers; to amend
chapter 281 of the laws of 1994 amending the racing, pari-mutuel
wagering and breeding law and other laws relating to simulcasting and
chapter 346 of the laws of 1990 amending the racing, pari-mutuel
wagering and breeding law and other laws relating to simulcasting and
the imposition of certain taxes, in relation to extending certain
provisions thereof; and to amend the racing, pari-mutuel wagering and
breeding law, in relation to extending certain provisions thereof
(Part AA); to amend the tax law, in relation to capital awards to
vendor tracks (Part BB); intentionally omitted (Part CC); to amend the
tax law, in relation to conforming the due dates for the metropolitan
commuter transportation mobility tax for taxpayers with income from
self-employment with the due dates for the personal income tax (Part
DD); to amend the state finance law, the upstate New York gaming
economic development act of 2013 and the tax law, in relation to
moneys appropriated or transferred from the commercial gaming revenue
fund (Part EE); to amend the tax law, the education law, the general
municipal law, and the real property tax law, in relation to a real
property tax freeze (Part FF); to amend the tax law, in relation to
the temporary exemption from sales and use taxes for premises used for
commercial office space in lower Manhattan; and to amend part C of
chapter 2 of the laws of 2005 amending the tax law relating to
exemptions from sales and use taxes, in relation to the effectiveness
thereof (Subpart A); to amend the real property tax law and the
administrative code of the city of New York, in relation to extending
a real property tax abatement program for certain commercial
properties in cities having a population of one million or more and in
relation to extending a special reduction under the commercial rent
tax in the city of New York (Subpart B); to amend the real property
tax law and the administrative code of the city of New York, in
relation to applications for tax abatements for industrial and
commercial construction work on properties in a city of one million or
more persons (Subpart C); to amend the general city law and the
administrative code of the city of New York, in relation to extending
the relocation and employment assistance program and the Lower
Manhattan relocation and employment assistance program (Subpart D); to


amend the general city law and the administrative code of the city of
New York, in relation to extending the special rebates and discounts
provided pursuant to the energy cost savings program and the Lower
Manhattan energy program (Subpart E); to amend the administrative code
of the city of New York, in relation to the amount of special
reduction allowed (Subpart F); and to amend the real  property tax law
and the administrative code of the city of New York, in relation to a
real estate tax abatement program for certain commercial, industrial
and manufacturing properties in a city of one million or more persons
(Subpart G) (Part GG); to amend the tax law, in relation to a musical
and theatrical production credit; and providing for the repeal of such
provisions upon expiration thereof (Part HH); to amend the tax law, in
relation to the sale of food and beverages through vending machines
(Part II); to amend the tax law, in relation to requiring that
services eligible for the empire state film production tax credit take
place in certain counties (Part JJ); to amend the tax law and the
administrative code of the city of New York, in relation to exempting
the proceeds from service award programs for volunteer firefighters
and ambulance workers from personal income taxes (Part KK); to amend
the tax law, in relation to the regions and rate of the prepaid sales
tax on fuels (Part LL); to amend the labor law and the tax law, in
relation to the creation of the workers with disabilities tax credit
program; and providing for the repeal of such provisions upon
expiration thereof (Part MM); to amend the real property tax law, in
relation to permitting senior citizens whose spouses are deceased to
substitute a more recent year's income for purposes of determining
eligibility for the enhanced exemption for school tax relief (Part
NN); and to amend the tax law and the racing, pari-mutuel wagering and
breeding law, in relation to health insurance for jockeys (Part OO)

Sponsor:

BUDGET

The Legislative Budget includes legislation with the following:

Part A

Summary:

Corporate tax reform with the merger of Banks into Article 9-a
(Corporate Franchise Tax). Reduction from 7.1 percent to 6.5 percent
of tax rate effective January 1, 2016.

Fiscal:

$205 million reduction in revenue in State Fiscal Year (SFY) 2015-16,
rising to a $501 million reduction in revenue in SFY 2018-19.

Part B

Summary:

Allow direct payment of STAR savings in certain cases.

Fiscal:


No fiscal impact.

Part C

Summary:

Extend fees for the establishment of oil and gas unit of production.

Fiscal:

Preserves current revenue.

Part E

Summary:

Modify signature requirements on returns prepared by tax
professionals.

Fiscal:

No fiscal impact.

Part G

Summary:

Extend the non-custodial Earned Income Tax Credit for two years.

Fiscal:

Loss of $4 million in each of SFYs 2016-17 and 2017-18.

Part I

Summary:

Closing of resident trusts loophole.

Fiscal:

Adds $68 million in SFY 2014-15 rising to $135 million in additional
revenue in SFY 2016-17.

Part J

Summary:

Repeal of the minimum PIT add-on tax.

Fiscal:

Minimal fiscal impact.

Part K

Summary:


Personal income tax credit for homeowners and renters in New York City
earning less than $200,000. Progressively declining percentage of any
property taxes or rent paid in excess of a certain income proportion
will be claimed as a credit.

Fiscal:

$85 million reduction in revenue in each of SFYs 2015-16 and 2016-17.

Part M

Summary:

Modify delivery of the Family Relief Tax Credit after Tax Year 2014.

Fiscal:

Adds $410 million in revenue in SFY 2015-16, $410 million reduction in
revenue in SFY 2017-18.

Part 0

Summary:

Extend by two years the commercial production credit. Also increases
the ability to access the upstate portion of the existing credit pool.

Fiscal:

$7 million reduction in revenues in each of SFYs 2016-17 and 2017-18.

Part P

Summary:

Authorize $8 million in additional low-income housing credits in each
of SFYs 2015-16 and 2016-17.

Fiscal:

$8 million reduction in revenues in SFY 2015-16, $16 million reduction
in revenues in SFY 2016-17 and thereafter.

Part R

Summary:

20 percent real property tax credit for manufacturers statewide
effective January 1, 2014.

Fiscal:

$100 million reduction in revenues in SFY 2015-16 and thereafter.

Summary:


Eliminates the business income tax on manufacturers statewide
effective January 1, 2014.

Fiscal:

$193 million reduction in revenues in SFYs 2014-15 and 2015-16, $198
million reduction in revenues thereafter.

Part S

Summary:

Repeal the franchise tax on agricultural cooperatives effective
January 1, 2018.

Fiscal:

Minimal fiscal impact.

Part T

Summary:

Refundable credit for the excise tax on telecommunication services
paid by START-UP NY companies.

Fiscal:

No fiscal impact.

Part U

Summary:

Enhance the Youth Works tax credit by allowing an additional $1,000 if
eligible employee is kept for one more year as well as enhancing
eligibility to full time high school students working at least 10
hours. Adds reporting requirements by the Department of Labor.

Fiscal:

$4 million reduction in revenues in each of SFY 2015-16 through SFY
2018-19.

Part V

Summary:

Extend the alternative fuels tax exemption for two years through
September 1, 2016.

Fiscal:

$8 million reduction in revenues in SFY 2014-15, $16 million reduction
in revenue in SFY 2015-16 and $8 million reduction in revenue in SFY
2016-17.


Part W

Summary:

Simplify the distribution of motor vehicle fees.

Fiscal:

No fiscal impact.

Part X

Summary:

Estate tax reform: raise the exclusion threshold from $1 million to
$5.25 million over four years, maintain the top tax rate at 16
percent, and index to inflation effective January 1, 2019.

Fiscal:

$25 million reduction in revenues in SFY 2014-15 rising to a $355
million reduction in revenues in SFY 2018-19.

Part Z

Summary:

Extend Monticello Raceway Video Lottery Terminal rates for one year.

Fiscal:

$3 million reduction in revenues in SFY 2014-15.

Part AA

Summary:

Extend certain pari-mutuel tax rates and simulcasting provisions for
one year.

Fiscal:

Preserves current revenue.

Part BB

Summary:

Extend Video Lottery Gaming vendor's capital award program for one
year.

Fiscal:

Preserves current revenue.

Part DD


Summary:

Align mobility and personal income tax filings for the self-employed.

Fiscal:

No fiscal impact.

Part EE

Summary:

Technical amendments to the commercial gaming law.

Fiscal:

No fiscal impact.

Part FF

Summary:

Provide a two-year freeze, through a refundable personal income tax
credit, to homeowners who reside in school and municipal jurisdictions
that abide by the property tax cap plus (in year two) submit an
efficiency plan that achieves savings via mergers, shared services and
cooperation agreements among jurisdictions inclusive of any such past
efficiencies achieved. Such efficiency plans will be targeted to
result in savings over the aggregate tax levies for fiscal year
2014-15 of participating localities or school districts of at least
one percent in each of the fiscal years 2016-17, 2017-18, 2018-19.

Fiscal:

$344 million reduction in revenues in SFY 2014-15, $810 million
reduction in revenues in SFY 2015-16, and $347 million reduction in
revenues in SFY 2016-17.

Part GG

Summary:

Two-year extension of certain New York City and Lower Manhattan tax
credits and abatements.

Fiscal:

No fiscal impact.

Part HH

Summary:

Musical and theatrical production tax credit for production tours
performing in-State.

Fiscal:


$4 million reduction in revenues in SFY 2016-17 and thereafter.

Part II

Summary:

Increase sales tax exemption threshold for sales through vending
machines from 75 cents to $1.50.

Fiscal:

$5 million reduction in revenues in SFY 2014-15 and $6 million
reduction in revenues thereafter.

Part JJ

Summary:

Expand the Empire film production credit by allowing Albany and
Schenectady counties to participate in the 10 percent additional
credit for upstate counties.

Fiscal:

No fiscal impact.

Part KK

Summary:

Length of service awards for volunteer firefighters and ambulance
workers: exempts from taxable income any distributions from length of
service defined contribution or benefit plans to volunteer
firefighters and ambulance workers over the age of 59 and a half.

Fiscal:

$1 million reduction in revenues in SFY 2014-15 and thereafter.

Part LL

Summary:

Increase pre-payment amounts to distributors of motor fuel.

Fiscal:

No fiscal impact.

Part MM

Summary:

Credit for the hiring of persons with developmental disabilities
through tax year 2019.

Fiscal:


$6 million reduction in revenues in SFY 2016-17 and for four years
thereafter.

Part NN

Summary:

Allow surviving spouses to utilize current income when applying for
Enhanced STAR benefits.

Fiscal:

$2 million reduction in revenues in SFY 2015-16 and no fiscal impact
thereafter.

Part 00

Summary:

Redirect 1.5 percent of purse enhancement monies for Jockey's health
care.

Fiscal:

No fiscal impact.
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A08559 Text:

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________

           S. 6359--D                                            A. 8559--D

                             S E N A T E - A S S E M B L Y

                                   January 21, 2014
                                      ___________

       IN  SENATE -- A BUDGET BILL, submitted by the Governor pursuant to arti-
         cle seven of the Constitution -- read twice and ordered  printed,  and
         when  printed to be committed to the Committee on Finance -- committee
         discharged, bill amended, ordered reprinted as amended and recommitted
         to said committee  --  committee  discharged,  bill  amended,  ordered
         reprinted  as  amended  and recommitted to said committee -- committee
         discharged, bill amended, ordered reprinted as amended and recommitted
         to said committee  --  committee  discharged,  bill  amended,  ordered
         reprinted as amended and recommitted to said committee

       IN  ASSEMBLY  --  A  BUDGET  BILL, submitted by the Governor pursuant to
         article seven of the Constitution -- read once  and  referred  to  the
         Committee  on  Ways  and  Means -- committee discharged, bill amended,
         ordered reprinted as amended and  recommitted  to  said  committee  --
         again  reported from said committee with amendments, ordered reprinted
         as amended and recommitted to said committee --  again  reported  from
         said  committee  with  amendments,  ordered  reprinted  as amended and
         recommitted to said committee -- again reported  from  said  committee
         with  amendments, ordered reprinted as amended and recommitted to said
         committee

       AN ACT to amend the tax law, the general municipal law, the urban devel-
         opment corporation act, the business corporation law, and the  general
         associations law, in relation to reforming taxation of business corpo-
         rations;  and  to  repeal  various  provisions of the tax law relating
         thereto (Part A); to amend the real property tax law, in  relation  to
         the  STAR  registration  program (Part B); to amend chapter 540 of the
         laws of 1992, amending the real property tax law relating to  oil  and
         gas  charges,  in relation to the effective date of such chapter (Part
         C); intentionally omitted (Part D); to amend the tax law, in  relation
         to  modifying the signature requirement on e-filed returns prepared by
         tax professionals (Part E); intentionally omitted (Part F);  to  amend
         part  I of chapter 58 of the laws of 2006, amending the tax law relat-
         ing to providing an enhanced earned income tax credit, in relation  to
         the effectiveness thereof (Part G); intentionally omitted (Part H); to
         amend the tax law and the administrative code of the city of New York,
         in  relation  to  taxing residents who are grantors of exempt resident
         trusts that qualify as  non-grantor  incomplete  gift  trusts  on  the

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD12674-07-4
       S. 6359--D                          2                         A. 8559--D

         income  from such trusts and taxing residents who are beneficiaries of
         all other exempt resident trusts or nonresident trusts on the distrib-
         utions of accumulated income that they receive from such trusts  (Part
         I);  to  amend  the tax law and the administrative code of the city of
         New York, in relation to eliminating the personal  income  tax  add-on
         minimum  tax;  and  to repeal certain provisions of such laws relating
         thereto (Part J); to amend the tax law, in relation to establishing an
         enhanced real property tax circuit  breaker;  and  providing  for  the
         repeal  of  such  provisions  upon expiration thereof (Part K); inten-
         tionally omitted (Part L); to amend the tax law, in  relation  to  the
         prepayment  element  of  the family tax relief credit (Part M); inten-
         tionally omitted (Part N); to  amend  the  tax  law,  in  relation  to
         extending  the empire state commercial production tax credit (Part O);
         to amend the public housing law, in relation to extending  the  credit
         against  income  tax  for  persons or entities investing in low-income
         housing (Part P); intentionally omitted (Part Q);  to  amend  the  tax
         law,  in relation to providing a tax credit for real property taxes to
         New York manufacturers;  and  providing  for  the  repeal  of  certain
         provisions  upon  expiration  thereof  (Part R); to amend the economic
         development law, the tax law, the transportation law, the  administra-
         tive  code of the city of New York and the New York state urban devel-
         opment corporation act, in relation to repealing the franchise tax  on
         farmers',  fruit  growers',  and  other like agricultural corporations
         organized and operated on a co-operative basis; and to repeal  section
         185  of the tax law relating to franchise tax on farmers', fruit grow-
         ers', and other like agricultural corporations organized and  operated
         on  a  co-operative  basis;  to  repeal  sections 187-j, 187-k, 187-l,
         187-m, 187-q, 187-r and 187-s of the tax law relating to  certain  tax
         credits; to repeal paragraph 1 of subdivision (h) of section 15, para-
         graph 1 of subdivision (g) of section 31, and certain other provisions
         of  the tax law, in relation to making conforming changes (Part S); to
         amend the tax law, in relation to providing a credit for excise tax on
         telecommunication services for businesses located in tax-free NY areas
         and providing for the repeal of  certain  provisions  upon  expiration
         thereof  (Part  T);  to amend the tax law, in relation to reducing the
         number of hours of part-time work needed  by  employees  for  employer
         qualification  for  the  New York youth works tax credit; and to amend
         the labor law, in relation to the New  York  youth  works  tax  credit
         (Part  U);  to  amend chapter 109 of the laws of 2006 amending the tax
         law and other laws relating to  providing  exemptions,  reimbursements
         and  credits  from  various  taxes  for  certain alternative fuels, in
         relation to extending the alternative fuels  tax  exemptions  for  two
         years  (Part V); to amend chapter 63 of the laws of 2000, amending the
         tax law and other laws relating to modifying the distribution of funds
         from the motor vehicle fuel excise tax and  the  vehicle  and  traffic
         law,  in  relation  to simplifying the methodology for distribution of
         motor vehicle receipts (Part W); to amend the tax law, in relation  to
         the  estate  tax;  to  repeal section 2 of chapter 1013 of the laws of
         1962, amending the tax law relating to imposing a tax on the  transfer
         of  estates  of  decedents  dying  on  or  after April first, nineteen
         hundred sixty-three, relating to an appendix  of  applicable  internal
         revenue  code  provisions,  and to repeal article 26-B of the tax law,
         relating to the generation skipping  transfer  tax  (Part  X);  inten-
         tionally omitted (Part Y); to amend the tax law, in relation to vendor
         fees  paid to vendor tracks (Part Z); to amend the racing, pari-mutuel
         wagering and breeding law,  in  relation  to  licenses  for  simulcast
       S. 6359--D                          3                         A. 8559--D

         facilities,  sums  relating  to  track simulcast, simulcast of out-of-
         state thoroughbred races, simulcasting of races  run  by  out-of-state
         harness  tracks  and  distributions of wagers; to amend chapter 281 of
         the  laws of 1994 amending the racing, pari-mutuel wagering and breed-
         ing law and other laws relating to simulcasting and chapter 346 of the
         laws of 1990 amending the racing, pari-mutuel  wagering  and  breeding
         law  and  other  laws  relating  to simulcasting and the imposition of
         certain taxes, in relation to extending  certain  provisions  thereof;
         and  to  amend  the  racing, pari-mutuel wagering and breeding law, in
         relation to extending certain provisions thereof (Part AA);  to  amend
         the tax law, in relation to capital awards to vendor tracks (Part BB);
         intentionally  omitted (Part CC); to amend the tax law, in relation to
         conforming the due dates for the metropolitan commuter  transportation
         mobility  tax  for taxpayers with income from self-employment with the
         due dates for the personal income tax (Part DD); to  amend  the  state
         finance  law,  the upstate New York gaming economic development act of
         2013 and the tax law, in relation to  moneys  appropriated  or  trans-
         ferred from the commercial gaming revenue fund (Part EE); to amend the
         tax  law,  the  education law, the general municipal law, and the real
         property tax law, in relation to a real property tax freeze (Part FF);
         to amend the tax law, in relation  to  the  temporary  exemption  from
         sales  and  use taxes for premises used for commercial office space in
         lower Manhattan; and to amend part C of chapter 2 of the laws of  2005
         amending  the tax law relating to exemptions from sales and use taxes,
         in relation to the effectiveness thereof (Subpart  A);  to  amend  the
         real  property  tax law and the administrative code of the city of New
         York, in relation to extending a real property tax  abatement  program
         for certain commercial properties in cities having a population of one
         million or more and in relation to extending a special reduction under
         the  commercial rent tax in the city of New York (Subpart B); to amend
         the real property tax law and the administrative code of the  city  of
         New  York,  in  relation to applications for tax abatements for indus-
         trial and commercial construction work on properties in a city of  one
         million or more persons (Subpart C); to amend the general city law and
         the  administrative  code  of  the  city  of  New York, in relation to
         extending the relocation and employment  assistance  program  and  the
         Lower  Manhattan relocation and employment assistance program (Subpart
         D); to amend the general city law and the administrative code  of  the
         city  of  New  York,  in relation to extending the special rebates and
         discounts provided pursuant to the energy cost savings program and the
         Lower Manhattan energy program (Subpart E); to amend  the  administra-
         tive  code  of  the  city  of  New  York, in relation to the amount of
         special reduction allowed (Subpart F); and to amend the real  property
         tax law and the administrative code  of  the  city  of  New  York,  in
         relation  to  a  real estate tax abatement program for certain commer-
         cial, industrial and manufacturing properties in a city of one million
         or more persons (Subpart G) (Part  GG);  to  amend  the  tax  law,  in
         relation  to a musical and theatrical production credit; and providing
         for the repeal of such provisions upon expiration thereof  (Part  HH);
         to  amend  the  tax law, in relation to the sale of food and beverages
         through vending machines (Part II); to amend the tax law, in  relation
         to  requiring  that  services  eligible  for  the  empire  state  film
         production tax credit take place in certain  counties  (Part  JJ);  to
         amend the tax law and the administrative code of the city of New York,
         in  relation to exempting the proceeds from service award programs for
         volunteer firefighters and  ambulance  workers  from  personal  income
       S. 6359--D                          4                         A. 8559--D

         taxes  (Part KK); to amend the tax law, in relation to the regions and
         rate of the prepaid sales tax on fuels (Part LL); to amend  the  labor
         law  and  the tax law, in relation to the creation of the workers with
         disabilities  tax credit program; and providing for the repeal of such
         provisions upon expiration thereof (Part MM); to amend the real  prop-
         erty  tax law, in relation to permitting senior citizens whose spouses
         are deceased to substitute a more recent year's income for purposes of
         determining eligibility for the  enhanced  exemption  for  school  tax
         relief (Part NN); and to amend the tax law and the racing, pari-mutuel
         wagering and breeding law, in relation to health insurance for jockeys
         (Part OO)

         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:

    1    Section 1. This act enacts into law major  components  of  legislation
    2  which are necessary to implement the state fiscal plan for the 2014-2015
    3  state  fiscal  year.  Each  component  is wholly contained within a Part
    4  identified as Parts A through OO. The effective date for each particular
    5  provision contained within such Part is set forth in the last section of
    6  such Part. Any provision in any section contained within a Part, includ-
    7  ing the effective date of the Part, which makes a reference to a section
    8  "of this act", when used in connection with that  particular  component,
    9  shall  be  deemed  to mean and refer to the corresponding section of the
   10  Part in which it is found. Section three of  this  act  sets  forth  the
   11  general effective date of this act.

   12                                   PART A

   13    Section 1. Article 32 of the tax law is REPEALED.
   14    S 2. Section 180 of the tax law is REPEALED.
   15    S 3. Section 181 of the tax law is REPEALED.
   16    S  4.  Section 208 of the tax law, as added by chapter 415 of the laws
   17  of 1944, subdivision 1 as amended by chapter 576 of the  laws  of  1994,
   18  subdivision  1-A as amended by chapter 166 of the laws of 1991, subdivi-
   19  sion 1-B as added by section 45 of part A and paragraph (k) of  subdivi-
   20  sion  9  as  added by section 46 of part A of chapter 389 of the laws of
   21  1997, subdivision 3, the opening paragraph, subparagraphs 6  and  11  of
   22  paragraph (b), and the opening paragraph of paragraph (g) of subdivision
   23  9  as  amended and subdivision 8-B and subparagraph 3-a of paragraph (b)
   24  of subdivision 9 as added by chapter 817 of the laws of  1987,  subdivi-
   25  sion  4  as  amended by section 1, subdivision 6 as amended by section 2
   26  and subparagraph 2 of paragraph (a)  of  subdivision  9  as  amended  by
   27  section  7  of part M of chapter 407 of the laws of 1999, subdivisions 5
   28  and 7, paragraph (a) of subdivision 8-B, subparagraph  10  of  paragraph
   29  (b)  and  paragraph  (j)  of  subdivision 9 as amended, paragraph (d) of
   30  subdivision 8-B and paragraph (c-1) of subdivision 9 as added and  para-
   31  graphs  (e)  and  (f) of subdivision 8-B as relettered by chapter 170 of
   32  the laws of 1994, subdivisions 8 and 10 as amended by chapter 133 of the
   33  laws of 1945, subdivision 8-A as added and subparagraph 1  of  paragraph
   34  (a)  of  subdivision  9  as  amended by chapter 778 of the laws of 1972,
   35  paragraph (b) of subdivision 8-A and paragraph (i) of subdivision  9  as
   36  amended  by chapter 779 of the laws of 1972, subdivision 9 as amended by
   37  chapter 713 of the laws of 1961,  paragraph  (a)  of  subdivision  9  as
   38  amended by chapter 203 of the laws of 1962, subparagraphs 5, 9 and 10 of
       S. 6359--D                          5                         A. 8559--D

    1  paragraph  (a) and subparagraphs 8 and 9 of paragraph (b) of subdivision
    2  9 as amended by chapter 61 of the laws of  1989  and  paragraph  (f)  of
    3  subdivision  9  as separately amended by sections 278 and 347 of chapter
    4  61 of the laws of 1989, clause (i) of subparagraph 5 of paragraph (a) of
    5  subdivision  9  as amended by section 2 and subparagraph 20 of paragraph
    6  (b) of subdivision 9 as added by section 3 of part C of  chapter  25  of
    7  the  laws  of  2009, subparagraph 6 of paragraph (a) of subdivision 9 as
    8  added by chapter 895 of the laws of 1975 and as  renumbered  by  chapter
    9  613  of the laws of 1976, subparagraph 7 of paragraph (a) of subdivision
   10  9 as added by chapter 33 of the laws of 1978, subparagraph  8  of  para-
   11  graph  (a)  and  subparagraph  7  of  paragraph  (b) of subdivision 9 as
   12  amended by chapter 639 of the laws of 1986, subparagraph 11 of paragraph
   13  (a) of subdivision 9 as added by chapter 15 of the laws of 1983, subpar-
   14  agraph 12 of paragraph  (a),  subparagraph  4-a  of  paragraph  (b)  and
   15  subparagraph 2 of paragraph (h) of subdivision 9 as amended and subpara-
   16  graph  13  of  paragraph (a) of subdivision 9 as added by chapter 760 of
   17  the laws of 1992, subparagraph 14 of paragraph (a) of subdivision  9  as
   18  added  by  section  101  and  paragraphs (l) and (m) of subdivision 9 as
   19  added by section 102 of part A of  chapter  56  of  the  laws  of  1998,
   20  subparagraph  15 of paragraph (a) of subdivision 9 as amended by section
   21  1 of part ZZ of chapter 63 of the laws of 2003, subparagraph 16 of para-
   22  graph (a) of subdivision 9 as added by section 1 of  part  K3,  subpara-
   23  graph 16 of paragraph (b) of subdivision 9 as added by section 2 of part
   24  K3,  subparagraph  17  of  paragraph  (b)  of  subdivision 9 as added by
   25  section 2 of part O3, and paragraphs (o), (p) and (q) of  subdivision  9
   26  as  added  by  section  3  of part O3 of chapter 62 of the laws of 2003,
   27  subparagraph 18 of paragraph (a) of subdivision 9 as added by section  3
   28  of  part C and paragraph (o) of subdivision 9 as amended by section 2 of
   29  part E of chapter 59 of the laws of 2013, subparagraph  3  of  paragraph
   30  (b)  of  subdivision  9  as  amended by chapter 895 of the laws of 1975,
   31  subparagraph 4 of paragraph (b) and subparagraph 4 of paragraph  (f)  of
   32  subdivision  9  as  amended by chapter 190 of the laws of 1990, subpara-
   33  graph 15 of paragraph (b) of subdivision 9 as added by  chapter  309  of
   34  the  laws  of 1996, subparagraph 18 of paragraph (b) of subdivision 9 as
   35  added by section 21 of part H of chapter 1 of the laws of 2003, subpara-
   36  graph 19 of paragraph (b) of subdivision 9 as added by section 1 of part
   37  HH1 of chapter 57 of the laws of 2008, paragraphs  (c-2)  and  (c-3)  of
   38  subdivision 9 as added by section 10 of part Y of chapter 63 of the laws
   39  of  2000,  paragraph (g) of subdivision 9 as added by chapter 178 of the
   40  laws of 1965, subparagraph 1 and clauses (B) and (C) of  subparagraph  3
   41  of  paragraph (g) of subdivision 9 as amended by chapter 613 of the laws
   42  of 1976, clause (A) of subparagraph 1 of paragraph (g) of subdivision  9
   43  as  separately  amended  by  chapters  675  and 836 of the laws of 1977,
   44  clause (B) of subparagraph 1, clause (A) of subparagraph  2  and  clause
   45  (A)  of  subparagraph  3 of paragraph (g) of subdivision 9 as amended by
   46  chapter 675 of the laws of 1977, item 1 of clause (B) of subparagraph  1
   47  of  paragraph (g) of subdivision 9 as amended by chapter 972 of the laws
   48  of 1984, clause (B) of subparagraph 2 of paragraph (g) of subdivision  9
   49  as  amended  by  chapter 365 of the laws of 1979, clause (C) of subpara-
   50  graph 2 of paragraph (g) of subdivision 9 as amended by chapter 1005  of
   51  the  laws  of 1970, paragraph (h) of subdivision 9 as amended by chapter
   52  606 of the laws of 1984, paragraph (n) of  subdivision  9  as  added  by
   53  section 1 of part O of chapter 85 of the laws of 2002, subdivision 12 as
   54  added  by  chapter  828  of the laws of 1977, subdivision 19 as added by
   55  chapter 681 of the laws of 1997, is amended to read as follows:
   56    S 208. Definitions. As used in this article:
       S. 6359--D                          6                         A. 8559--D

    1    1. The term "corporation" includes (a) an association within the mean-
    2  ing of paragraph  three  of  subsection  (a)  of  section  seventy-seven
    3  hundred  one of the internal revenue code (including a limited liability
    4  company), (b) a joint-stock company or association, (c) a publicly trad-
    5  ed  partnership  treated  as  a corporation for purposes of the internal
    6  revenue code pursuant to section seventy-seven hundred four thereof  and
    7  (d)  any business conducted by a trustee or trustees wherein interest or
    8  ownership is evidenced  by  certificate  or  other  written  instrument.
    9  "DISC"  and  "former DISC" mean any corporation which meets the require-
   10  ments of subsection (a) of section nine hundred ninety-two of the inter-
   11  nal revenue code[;].
   12    1-A. The term "New York S corporation"  means,  with  respect  to  any
   13  taxable  year, a corporation subject to tax under this article for which
   14  an election is in effect pursuant  to  subsection  (a)  of  section  six
   15  hundred  sixty  of  this  chapter  for such year, any such year shall be
   16  denominated a "New York S year", and such election shall be  denominated
   17  a  "New  York S election". The term "New York C corporation" means, with
   18  respect to any taxable year, a corporation subject  to  tax  under  this
   19  article  which  is not a New York S corporation, and any such year shall
   20  be denominated a "New York C year". The term  "termination  year"  means
   21  any  taxable  year of a corporation during which the New York S election
   22  terminates on a day other than the first day of such year.  The  portion
   23  of  the  taxable  year ending before the first day for which such termi-
   24  nation is effective shall be denominated the "S  short  year",  and  the
   25  portion  of  such  year beginning on such first day shall be denominated
   26  the "C short year". The term "New York S  termination  year"  means  any
   27  termination  year  which  is  not also an S termination year for federal
   28  purposes.
   29    1-B. The term "QSSS" means a corporation which is a qualified subchap-
   30  ter S subsidiary as defined in subparagraph (B) of  paragraph  three  of
   31  subsection  (b)  of  section  thirteen hundred sixty-one of the internal
   32  revenue code. The term "exempt QSSS" means a QSSS exempt from tax  under
   33  this  article  as  provided in paragraph (k) of subdivision nine of this
   34  section, or a QSSS described in subclause (i) of clause (B) of  subpara-
   35  graph  two of paragraph (k) of subdivision nine of this section, wherein
   36  the parent corporation of the QSSS is subject to tax under this article,
   37  and the assets, liabilities, income  and  deductions  of  the  QSSS  are
   38  treated  as the assets, liabilities, income and deductions of the parent
   39  corporation. Where a QSSS is an exempt QSSS, then for all purposes under
   40  this article:
   41    (a) the assets, liabilities, income,  deductions,  property,  payroll,
   42  receipts, capital, credits, and all other tax attributes and elements of
   43  economic  activity of the QSSS shall be deemed to be those of the parent
   44  corporation,
   45    (b) the stocks, bonds and other securities issued by, and any  indebt-
   46  edness  from, the QSSS shall not be [subsidiary,] investment or business
   47  capital of the parent corporation,
   48    (c) transactions between the parent corporation and the QSSS,  includ-
   49  ing  the  payment  of  interest  and  dividends, shall not be taken into
   50  account, and
   51    (d) general executive officers of the  QSSS  shall  be  deemed  to  be
   52  general executive officers of the parent corporation.
   53    2. The term "taxpayer" means any corporation subject to tax under this
   54  article[;].
   55    3.  The  term  "subsidiary"  means  a  corporation of which over fifty
   56  percent of the number of shares of stock entitling the  holders  thereof
       S. 6359--D                          7                         A. 8559--D

    1  to  vote  for  the  election  of  directors  or trustees is owned by the
    2  taxpayer[;].
    3    4.  The  term  ["subsidiary capital" means investments in the stock of
    4  subsidiaries  and  any  indebtedness  from  subsidiaries,  exclusive  of
    5  accounts receivable acquired in the ordinary course of trade or business
    6  for  services  rendered or for sales of property held primarily for sale
    7  to customers, whether or not evidenced by written instrument,  on  which
    8  interest  is  not claimed and deducted by the subsidiary for purposes of
    9  taxation under article nine-A, thirty-two or thirty-three of this  chap-
   10  ter,  provided,  however,  that,  in the discretion of the commissioner,
   11  there shall be deducted from subsidiary capital  any  liabilities  which
   12  are  directly  or indirectly attributable to subsidiary capital] "STOCK"
   13  MEANS AN INTEREST IN A CORPORATION THAT IS TREATED AS EQUITY FOR FEDERAL
   14  INCOME TAX PURPOSES.
   15    5. (A) The term "investment capital"  means  investments  in  stocks[,
   16  bonds  and  other securities, corporate and governmental,] THAT ARE HELD
   17  BY THE TAXPAYER FOR MORE THAN SIX CONSECUTIVE MONTHS BUT  ARE  not  held
   18  for  sale  to customers in the regular course of business, [exclusive of
   19  subsidiary capital] OR, IF THE TAXPAYER MAKES THE ELECTION PROVIDED  FOR
   20  IN  SUBPARAGRAPH ONE OF PARAGRAPH (A) OF SUBDIVISION FIVE OF SECTION TWO
   21  HUNDRED TEN-A OF THIS ARTICLE, ARE NOT QUALIFIED  FINANCIAL  INSTRUMENTS
   22  AS  DESCRIBED  IN  SUBDIVISION FIVE OF SECTION TWO HUNDRED TEN-A OF THIS
   23  ARTICLE. STOCK IN A CORPORATION THAT IS CONDUCTING  A  UNITARY  BUSINESS
   24  WITH THE TAXPAYER, STOCK IN A CORPORATION THAT IS INCLUDED IN A COMBINED
   25  REPORT  WITH  THE TAXPAYER PURSUANT TO THE COMMONLY OWNED GROUP ELECTION
   26  IN SUBDIVISION THREE OF SECTION TWO HUNDRED TEN-C OF THIS  ARTICLE,  and
   27  stock   issued  by  the  taxpayer[,  provided,  however,  that,  in  the
   28  discretion of the commissioner, there] SHALL NOT  CONSTITUTE  INVESTMENT
   29  CAPITAL.  FOR  PURPOSES  OF  THIS  SUBDIVISION,  IF THE TAXPAYER OWNS OR
   30  CONTROLS, DIRECTLY OR INDIRECTLY, LESS THAN TWENTY PERCENT OF THE VOTING
   31  POWER OF THE STOCK OF A CORPORATION, THAT CORPORATION WILL  BE  PRESUMED
   32  TO BE CONDUCTING A BUSINESS THAT IS NOT UNITARY WITH THE BUSINESS OF THE
   33  TAXPAYER.
   34    (B)  THERE  shall  be deducted from investment capital any liabilities
   35  which are directly or indirectly attributable  to  investment  capital[;
   36  and  provided, further, that investment]. IF THE AMOUNT OF THOSE LIABIL-
   37  ITIES EXCEEDS THE AMOUNT OF INVESTMENT CAPITAL, THE AMOUNT OF INVESTMENT
   38  CAPITAL WILL BE ZERO.
   39    (C) INVESTMENT capital shall not  include  any  such  investments  the
   40  income  from  which  is  excluded from entire net income pursuant to the
   41  provisions of paragraph (c-1) of subdivision nine of this  section,  and
   42  that  investment capital shall be computed without regard to liabilities
   43  directly or indirectly attributable to such investments, but only if air
   44  carriers organized in the United States and  operating  in  the  foreign
   45  country  or  countries in which the taxpayer has its major base of oper-
   46  ations and in which it is organized, resident or headquartered  (if  not
   47  in  the same country as its major base of operations) are not subject to
   48  any tax based on or measured by capital imposed by such foreign  country
   49  or  countries  or  any  political  subdivision thereof, or if taxed, are
   50  provided an exemption, equivalent to that provided for herein, from  any
   51  tax  based  on or measured by capital imposed by such foreign country or
   52  countries and from any such tax imposed  by  any  political  subdivision
   53  thereof[;].
   54    (D) IF A TAXPAYER ACQUIRES STOCK DURING THE SECOND HALF OF ITS TAXABLE
   55  YEAR AND OWNS THAT STOCK ON THE LAST DAY OF THE TAXABLE YEAR, IT WILL BE
   56  PRESUMED THAT THE TAXPAYER HELD THAT STOCK FOR MORE THAN SIX CONSECUTIVE
       S. 6359--D                          8                         A. 8559--D

    1  MONTHS  DURING  THE  TAXABLE  YEAR. HOWEVER, IF THE TAXPAYER DOES NOT IN
    2  FACT HOLD THAT STOCK FOR MORE THAN SIX CONSECUTIVE MONTHS, THE  TAXPAYER
    3  MUST  INCREASE  ITS TOTAL BUSINESS CAPITAL IN THE IMMEDIATELY SUCCEEDING
    4  TAXABLE  YEAR  BY  THE  AMOUNT  INCLUDED  IN INVESTMENT CAPITAL FOR THAT
    5  STOCK, NET OF ANY LIABILITIES ATTRIBUTABLE TO  THAT  STOCK  COMPUTED  AS
    6  PROVIDED  IN  PARAGRAPH  (B)  OF  THIS SUBDIVISION AND MUST INCREASE ITS
    7  BUSINESS INCOME IN THE IMMEDIATELY SUCCEEDING TAXABLE YEAR BY THE AMOUNT
    8  OF INCOME AND NET GAINS  (BUT  NOT  LESS  THAN  ZERO)  FROM  THAT  STOCK
    9  INCLUDED  IN INVESTMENT INCOME, LESS ANY INTEREST DEDUCTIONS DIRECTLY OR
   10  INDIRECTLY ATTRIBUTABLE TO THAT STOCK, AS PROVIDED IN SUBDIVISION SIX OF
   11  THIS SECTION.
   12    (E) WHEN INCOME OR GAIN FROM  A  DEBT  OBLIGATION  OR  OTHER  SECURITY
   13  CANNOT  BE  APPORTIONED  TO  THE  STATE  USING  THE  BUSINESS ALLOCATION
   14  PERCENTAGE AS A RESULT OF UNITED STATES CONSTITUTIONAL  PRINCIPLES,  THE
   15  DEBT  OBLIGATION  OR OTHER SECURITY WILL BE INCLUDED IN INVESTMENT CAPI-
   16  TAL.
   17    (F) FOR PURPOSES OF DETERMINING WHETHER A TAXPAYER HAS HELD A SECURITY
   18  FOR MORE THAN SIX CONSECUTIVE MONTHS, THE COMMISSIONER SHALL  TAKE  INTO
   19  ACCOUNT OFFSETTING POSITIONS THE TAXPAYER TAKES IN SUCH OR SIMILAR SECU-
   20  RITIES.
   21    6.  (A)  The  term "investment income" means income, including capital
   22  gains in excess of capital  losses,  from  investment  capital,  to  the
   23  extent  included  in computing entire net income, less, [(a)] (I) in the
   24  discretion of the commissioner, any  INTEREST  deductions  allowable  in
   25  computing  entire  net income which are directly or indirectly attribut-
   26  able to investment capital or investment income, and [(b)  such  portion
   27  of  any  net  operating loss deduction allowable in computing entire net
   28  income, as the investment income, before such deduction, bears to entire
   29  net income, before such deduction,] (II) THE TAXPAYER'S LOSS,  DEDUCTION
   30  AND/OR  EXPENSE  ATTRIBUTABLE  TO  ANY  TRANSACTION, OR SERIES OF TRANS-
   31  ACTIONS, ENTERED INTO TO MANAGE THE RISK OF PRICE  CHANGES  OR  CURRENCY
   32  FLUCTUATIONS WITH RESPECT TO ANY ITEM OF INVESTMENT CAPITAL THAT IS HELD
   33  OR  TO BE HELD BY THE TAXPAYER, OR THE AGGREGATE INVESTMENT CAPITAL THAT
   34  IS HELD OR TO BE HELD BY THE TAXPAYER, IF ALL OF THE RISK, OR ALL BUT  A
   35  DE  MINIMIS  AMOUNT  OF THE RISK, IS WITH RESPECT TO INVESTMENT CAPITAL,
   36  provided, however, that in no case shall investment income exceed entire
   37  net income[;]. IF  THE  AMOUNT  SUBTRACTED  UNDER  SUBPARAGRAPH  (I)  OR
   38  SUBPARAGRAPH (II) OF THIS PARAGRAPH OR UNDER BOTH OF THOSE SUBPARAGRAPHS
   39  EXCEEDS  INVESTMENT  INCOME,  THE  EXCESS OF SUCH AMOUNT OVER INVESTMENT
   40  INCOME MUST BE ADDED BACK TO ENTIRE NET INCOME.
   41    (B) IN LIEU OF SUBTRACTING FROM INVESTMENT INCOME THE AMOUNT OF  THOSE
   42  INTEREST  DEDUCTIONS, THE TAXPAYER MAY ELECT TO REDUCE ITS TOTAL INVEST-
   43  MENT INCOME BY FORTY PERCENT. IF THE TAXPAYER MAKES THIS  ELECTION,  THE
   44  TAXPAYER MUST ALSO MAKE THE ELECTIONS PROVIDED FOR IN PARAGRAPHS (B) AND
   45  (C) OF SUBDIVISION SIX-A OF THIS SECTION. A TAXPAYER WHICH DOES NOT MAKE
   46  THIS ELECTION BECAUSE IT HAS NO INVESTMENT CAPITAL WILL NOT BE PRECLUDED
   47  FROM MAKING THOSE OTHER ELECTIONS.
   48    (C)  INVESTMENT  INCOME  SHALL NOT INCLUDE ANY AMOUNT TREATED AS DIVI-
   49  DENDS PURSUANT TO SECTION SEVENTY-EIGHT OF THE INTERNAL REVENUE CODE.
   50    6-A. (A) THE TERM "OTHER EXEMPT INCOME" MEANS THE SUM  OF  EXEMPT  CFC
   51  INCOME AND EXEMPT UNITARY CORPORATION DIVIDENDS.
   52    (B)  "EXEMPT  CFC  INCOME" MEANS THE INCOME REQUIRED TO BE INCLUDED IN
   53  THE TAXPAYER'S FEDERAL  GROSS  INCOME  PURSUANT  TO  SUBSECTION  (A)  OF
   54  SECTION  951  OF  THE INTERNAL REVENUE CODE, RECEIVED FROM A CORPORATION
   55  THAT IS CONDUCTING A UNITARY BUSINESS  WITH  THE  TAXPAYER  BUT  IS  NOT
   56  INCLUDED IN A COMBINED REPORT WITH THE TAXPAYER, LESS, IN THE DISCRETION
       S. 6359--D                          9                         A. 8559--D

    1  OF  THE  COMMISSIONER,  ANY  INTEREST  DEDUCTIONS DIRECTLY OR INDIRECTLY
    2  ATTRIBUTABLE TO THAT INCOME.  IN LIEU OF SUBTRACTING FROM ITS EXEMPT CFC
    3  INCOME THE AMOUNT OF THOSE INTEREST DEDUCTIONS, THE TAXPAYER  MAY  ELECT
    4  TO  REDUCE ITS TOTAL EXEMPT CFC INCOME BY FORTY PERCENT. IF THE TAXPAYER
    5  MAKES THIS ELECTION, THE TAXPAYER MUST ALSO MAKE THE ELECTIONS  PROVIDED
    6  FOR  IN  PARAGRAPH  (B) OF SUBDIVISION SIX OF THIS SECTION AND PARAGRAPH
    7  (C) OF THIS SUBDIVISION.  A TAXPAYER WHICH DOES NOT MAKE  THIS  ELECTION
    8  BECAUSE  IT  HAS  NO EXEMPT CFC INCOME WILL NOT BE PRECLUDED FROM MAKING
    9  THOSE OTHER ELECTIONS.
   10    (C) "EXEMPT UNITARY CORPORATION DIVIDENDS" MEANS THOSE DIVIDENDS  FROM
   11  A  CORPORATION  THAT  IS CONDUCTING A UNITARY BUSINESS WITH THE TAXPAYER
   12  BUT IS NOT INCLUDED IN A COMBINED REPORT WITH THE TAXPAYER, LESS, IN THE
   13  DISCRETION OF THE COMMISSIONER,  ANY  INTEREST  DEDUCTIONS  DIRECTLY  OR
   14  INDIRECTLY  ATTRIBUTABLE  TO  SUCH  INCOME.   OTHER THAN DIVIDEND INCOME
   15  RECEIVED FROM CORPORATIONS  THAT  ARE  TAXABLE  UNDER  A  FRANCHISE  TAX
   16  IMPOSED BY ARTICLE NINE OR ARTICLE THIRTY-THREE OF THIS CHAPTER OR WOULD
   17  BE  TAXABLE  UNDER  A  FRANCHISE  TAX IMPOSED BY ARTICLE NINE OR ARTICLE
   18  THIRTY-THREE OF THIS CHAPTER IF SUBJECT TO TAX, IN LIEU  OF  SUBTRACTING
   19  FROM  THIS  DIVIDEND  INCOME THOSE INTEREST DEDUCTIONS, THE TAXPAYER MAY
   20  ELECT TO REDUCE THE TOTAL  AMOUNT  OF  THIS  DIVIDEND  INCOME  BY  FORTY
   21  PERCENT.  IF  THE  TAXPAYER  MAKES THIS ELECTION, THE TAXPAYER MUST ALSO
   22  MAKE THE ELECTIONS PROVIDED FOR IN PARAGRAPH (B) OF SUBDIVISION  SIX  OF
   23  THIS  SECTION  AND  PARAGRAPH  (B) OF THIS SUBDIVISION. A TAXPAYER WHICH
   24  DOES NOT MAKE THIS ELECTION BECAUSE  IT  HAS  NOT  RECEIVED  ANY  EXEMPT
   25  UNITARY  CORPORATION DIVIDENDS OR IS PRECLUDED FROM MAKING THIS ELECTION
   26  FOR DIVIDENDS RECEIVED FROM CORPORATIONS TAXABLE UNDER A  FRANCHISE  TAX
   27  IMPOSED BY ARTICLE NINE OR ARTICLE THIRTY-THREE OF THIS CHAPTER OR WOULD
   28  BE  TAXABLE  UNDER  A  FRANCHISE  TAX IMPOSED BY ARTICLE NINE OR ARTICLE
   29  THIRTY-THREE OF THIS CHAPTER IF SUBJECT TO TAX  WILL  NOT  BE  PRECLUDED
   30  FROM MAKING THOSE OTHER ELECTIONS.
   31    (D)  IF  THE  TAXPAYER  ATTRIBUTES INTEREST DEDUCTIONS TO OTHER EXEMPT
   32  INCOME AND THE AMOUNT SUBTRACTED EXCEEDS OTHER EXEMPT INCOME, THE EXCESS
   33  OF THE INTEREST DEDUCTIONS OVER OTHER EXEMPT INCOME MUST BE  ADDED  BACK
   34  TO ENTIRE NET INCOME. IN NO CASE SHALL OTHER EXEMPT INCOME EXCEED ENTIRE
   35  NET INCOME.
   36    (E)  OTHER EXEMPT INCOME SHALL NOT INCLUDE ANY AMOUNT TREATED AS DIVI-
   37  DENDS PURSUANT TO SECTION SEVENTY-EIGHT OF THE INTERNAL REVENUE CODE.
   38    7. (a) The term  "business  capital"  means  all  assets,  other  than
   39  [subsidiary capital,] investment capital and stock issued by the taxpay-
   40  er,  less liabilities not deducted from [subsidiary or] investment capi-
   41  tal [except that cash on hand and on deposit shall be treated as invest-
   42  ment capital  or  as  business  capital  as  the  taxpayer  may  elect].
   43  BUSINESS  CAPITAL  SHALL  INCLUDE  ONLY THOSE ASSETS THE INCOME, LOSS OR
   44  EXPENSE OF WHICH ARE PROPERLY REFLECTED (OR  WOULD  HAVE  BEEN  PROPERLY
   45  REFLECTED  IF  NOT  FULLY  DEPRECIATED  OR  EXPENSED  OR  DEPRECIATED OR
   46  EXPENSED TO A NOMINAL AMOUNT) IN THE COMPUTATION OF  ENTIRE  NET  INCOME
   47  FOR THE TAXABLE YEAR.
   48    (b)  Provided, however, "business capital" shall not include assets to
   49  the extent employed for  the  purpose  of  generating  income  which  is
   50  excluded  from entire net income pursuant to the provisions of paragraph
   51  (c-1) of subdivision nine of this section and shall be computed  without
   52  regard  to  liabilities  directly  or  indirectly  attributable  to such
   53  assets, but only if air carriers organized  in  the  United  States  and
   54  operating  in the foreign country or countries in which the taxpayer has
   55  its major base of operations and in which it is organized,  resident  or
   56  headquartered  (if  not  in  the same country as its major base of oper-
       S. 6359--D                         10                         A. 8559--D

    1  ations) are not subject to any tax  based  on  or  measured  by  capital
    2  imposed  by  such foreign country or countries or any political subdivi-
    3  sion thereof, or if taxed, are provided an exemption, equivalent to that
    4  provided  for  herein,  from  any  tax  based  on or measured by capital
    5  imposed by such foreign country or  countries  and  from  any  such  tax
    6  imposed by any political subdivision thereof[;].
    7    8. The term "business income" means entire net income minus investment
    8  income[;]  AND OTHER EXEMPT INCOME. IN NO EVENT SHALL THE SUM OF INVEST-
    9  MENT INCOME AND OTHER EXEMPT INCOME EXCEED ENTIRE  NET  INCOME.  IF  THE
   10  TAXPAYER  MAKES  THE  ELECTION PROVIDED FOR IN SUBPARAGRAPH ONE OF PARA-
   11  GRAPH (A) OF SUBDIVISION FIVE OF SECTION TWO HUNDRED TEN-A OF THIS ARTI-
   12  CLE, THEN ALL INCOME FROM QUALIFIED FINANCIAL INSTRUMENTS SHALL  CONSTI-
   13  TUTE BUSINESS INCOME.
   14    8-A.  Provided, however, that with respect to a DISC or a former DISC,
   15  the following provisions shall apply:
   16    (a) investments in the stocks, bonds or other securities of a DISC  or
   17  any  indebtedness from a DISC shall not be treated as [either subsidiary
   18  capital or] investment capital under [subdivisions four or]  SUBDIVISION
   19  five of this section,
   20    (b)  any amounts deemed distributed from a DISC or a former DISC which
   21  are taxable as dividends pursuant to  subsection  (b)  of  section  nine
   22  hundred  ninety-five  of  the  internal revenue code of nineteen hundred
   23  fifty-four shall be treated as business income, except any such  amounts
   24  from  a  former  DISC attributable to amounts includible in a taxpayer's
   25  entire net income for a prior taxable year  under  subparagraph  (B)  of
   26  paragraph (i) of subdivision nine of this section shall be excluded from
   27  entire net income,
   28    (c)  any gain recognized for federal income tax purposes on the dispo-
   29  sition of stock in a DISC, and any gain recognized on the disposition of
   30  stock in a former DISC, includible in gross income as a dividend  pursu-
   31  ant  to subsection (c) of section nine hundred ninety-five of the inter-
   32  nal revenue code of nineteen hundred fifty-four,  shall  be  treated  as
   33  business income, and
   34    (d)  except  as  provided in paragraph (i) of subdivision nine of this
   35  section, any actual distribution from a DISC or a former DISC  shall  be
   36  treated  as  business  income  except  an  actual distribution which for
   37  federal income tax purposes is treated as made out  of  "other  earnings
   38  and  profits"  under  section  nine  hundred  ninety-six of the internal
   39  revenue code of nineteen hundred fifty-four, in which case  such  actual
   40  distribution  shall  be treated as [either subsidiary income or] invest-
   41  ment income under this article.
   42    [8-B. (a) The term "minimum taxable income" shall mean the entire  net
   43  income of the taxpayer for the taxable year:
   44    (1) increased by the amount of the federal items of tax preference set
   45  forth  in  section  fifty-seven  of  the internal revenue code (with the
   46  modifications set forth in paragraph (b)  of  this  subdivision),  which
   47  items  of  tax preference shall have the same meaning and be computed in
   48  the same manner as under section fifty-seven  of  the  internal  revenue
   49  code,
   50    (2) determined with the federal adjustments described in paragraph (c)
   51  of  this  subdivision, which adjustments shall have the same meaning and
   52  be computed in the same manner as under sections  fifty-six  and  fifty-
   53  eight of the internal revenue code,
   54    (3)  increased  by  the net operating loss deduction otherwise allowed
   55  under paragraph (f) of subdivision nine of this section, and
       S. 6359--D                         11                         A. 8559--D

    1    (4) reduced, for taxable years beginning after nineteen hundred  nine-
    2  ty-three, by the alternative net operating loss deduction, as defined in
    3  paragraph (d) of this subdivision.
    4    (b)  The federal items of tax preference referred to hereinabove shall
    5  be modified by deducting "tax-exempt interest" and "accelerated depreci-
    6  ation or amortization on certain property placed in service before Janu-
    7  ary  1,  1987",  as  determined  under  paragraphs  five  and  seven  of
    8  subsection (a) of section fifty-seven of the internal revenue code.
    9    (c) The adjustments referred to hereinabove shall be:
   10    (1) "Depreciation" as determined under paragraph one of subsection (a)
   11  of  section fifty-six of the internal revenue code. For purposes of this
   12  subparagraph, the depreciation item  of  adjustment  provided  for  here
   13  shall  not include any amount attributable to property for which the tax
   14  benefits of the accelerated cost recovery system are not available under
   15  this article by reason of subparagraph ten of paragraph (b) of  subdivi-
   16  sion nine of this section;
   17    (2)  "Mining  exploration  and  development costs" as determined under
   18  paragraph two of subsection (a) of section  fifty-six  of  the  internal
   19  revenue code;
   20    (3)  "Treatment  of  certain  long-term contracts" as determined under
   21  paragraph three of subsection (a) of section fifty-six of  the  internal
   22  revenue code;
   23    (4)  "Installment sales of certain property" as determined under para-
   24  graph six of subsection (a) of section fifty-six of the internal revenue
   25  code;
   26    (5) "Circulation expenditures of personal holding companies" as deter-
   27  mined under subparagraph (C) of  paragraph  two  of  subsection  (b)  of
   28  section fifty-six of the internal revenue code;
   29    (6)  "Merchant  marine capital construction funds" as determined under
   30  paragraph two of subsection (c) of section  fifty-six  of  the  internal
   31  revenue code;
   32    (7)  "Disallowance  of  passive  activity  loss"  as  determined under
   33  subsection (b) of section fifty-eight of the internal revenue code; and
   34    (8) "Adjusted basis", as it appears in paragraph seven  of  subsection
   35  (a)  of  section  fifty-six  of  the  internal revenue code, but without
   36  taking  into  account  the  references  therein  to  paragraph  five  of
   37  subsection (a) of section fifty-six of the internal revenue code.
   38    (d)  The term "alternative net operating loss deduction" means the net
   39  operating loss deduction allowed for the taxable  year  under  paragraph
   40  (f) of subdivision nine of this section, except as provided herein.
   41    (1)(A)  The  net  operating loss for any year beginning after nineteen
   42  hundred eighty-nine which is  included  in  determining  such  deduction
   43  shall be determined with the adjustments provided in subparagraph two of
   44  paragraph  (a) of this subdivision, and shall be reduced by the items of
   45  tax preference determined under subparagraph one  of  paragraph  (a)  of
   46  this  subdivision,  attributable to such year. An item of tax preference
   47  shall be taken into account only to the extent such item  increased  the
   48  amount  of  the  net operating loss for the taxable year under paragraph
   49  (f) of subdivision nine of this section.
   50    (B) In the case of loss years beginning before nineteen hundred  nine-
   51  ty,  the  amount  of the net operating loss which may be carried over to
   52  taxable years beginning after  nineteen  hundred  eighty-nine  shall  be
   53  equal  to an amount which may be carried from the loss year to the first
   54  taxable year of the taxpayer beginning after  nineteen  hundred  eighty-
   55  nine.
       S. 6359--D                         12                         A. 8559--D

    1    (2)  In  determining  the amount of such deduction, loss carryforwards
    2  and carrybacks shall, subject to the provisions of subparagraph five  of
    3  paragraph  (f)  of  subdivision nine of this section, be computed in the
    4  manner set forth in paragraph two  of  subsection  (b)  of  section  one
    5  hundred  seventy-two  of the internal revenue code, except that, for the
    6  reference therein to taxable income,  there  shall  be  substituted  the
    7  phrase  "ninety  percent  of  minimum  taxable income determined without
    8  regard to the alternative net operating loss deduction".
    9    (3) The amount of such deduction shall not exceed  ninety  percent  of
   10  minimum  taxable  income  determined  without  regard to such deduction,
   11  provided, however, the term "ninety percent" shall be  read  as  "forty-
   12  five  percent"  with  respect  to  taxable  years  beginning in nineteen
   13  hundred ninety-four.
   14    (e) The tax commission may, whenever necessary in  order  to  properly
   15  reflect  the  minimum taxable income of any taxpayer, determine the year
   16  or period in which any item of income or deduction  shall  be  included,
   17  without regard to the method of accounting employed by the taxpayer.
   18    (f) If the period covered by a report under this article is other than
   19  the  period  covered by the report to the United States treasury depart-
   20  ment, the minimum taxable income shall be appropriately modified  pursu-
   21  ant to regulations promulgated by the tax commission.]
   22    9. The term "entire net income" means total net income from all sourc-
   23  es,  which  shall  be  presumably  the same as the entire taxable income
   24  [(but not alternative minimum taxable income)], WHICH, EXCEPT AS HEREIN-
   25  AFTER PROVIDED IN THIS SUBDIVISION,
   26    (i) [which] the taxpayer is required to report to  the  United  States
   27  treasury department, or
   28    (ii)  [which]  the  taxpayer would have been required to report to the
   29  United States treasury department if it had not made an  election  under
   30  subchapter s of chapter one of the internal revenue code, or
   31    (iii)  [which]  the  taxpayer,  in  the case of a corporation which is
   32  exempt from federal income tax (other than the tax on unrelated business
   33  taxable income imposed under section 511 of the internal  revenue  code)
   34  but which is subject to tax under this article, would have been required
   35  to  report  to  the  United  States  treasury  department  but  for such
   36  exemption, [except as hereinafter provided, and subject to any modifica-
   37  tion required by paragraphs (d) and (e) of subdivision three of  section
   38  two hundred ten of this article] OR
   39    (IV)  IN  THE CASE OF AN ALIEN CORPORATION THAT UNDER ANY PROVISION OF
   40  THE INTERNAL REVENUE CODE IS NOT TREATED AS A "DOMESTIC CORPORATION"  AS
   41  DEFINED  IN  SECTION  SEVEN  THOUSAND  SEVEN HUNDRED ONE OF SUCH CODE IS
   42  EFFECTIVELY CONNECTED WITH THE CONDUCT OF A TRADE OR BUSINESS WITHIN THE
   43  UNITED STATES AS DETERMINED UNDER SECTION 882 OF  THE  INTERNAL  REVENUE
   44  CODE.
   45    (a) Entire net income shall not include:
   46    [(1)  income,  gains  and  losses from subsidiary capital which do not
   47  include the amount of a recovery in respect of any war loss  except  for
   48  such  amounts  from  a  former DISC which are treated as business income
   49  under subdivision eight-A of this section,
   50    (2) fifty percent of dividends (A) other than from  subsidiaries,  and
   51  (B)  other  than  amounts  treated  as business income under subdivision
   52  eight-A of this section,  on  shares  of  stock  which  conform  to  the
   53  requirements  of  subsection (c) of section two hundred forty-six of the
   54  internal revenue code.]
   55    (3) bona fide gifts,
       S. 6359--D                         13                         A. 8559--D

    1    (4) income and deductions with respect to amounts received from school
    2  districts and from corporations and associations, organized and operated
    3  exclusively for religious, charitable or educational purposes,  no  part
    4  of the net earnings of which inures to the benefit of any private share-
    5  holder or individual, for the operation of school buses,
    6    (5)  (i)  any  refund  or  credit of a tax imposed under this article,
    7  article twenty-three, or FORMER article thirty-two of this chapter,  for
    8  which  tax  no  exclusion  or  deduction  was allowed in determining the
    9  taxpayer's entire net income under this article,  article  twenty-three,
   10  or  FORMER article thirty-two of this chapter for any prior year, (ii) a
   11  refund or credit of general corporation tax allowed by subdivision elev-
   12  en of section 11-604 of the administrative code of the city of New York,
   13  or (iii) any refund or credit  of  a  tax  imposed  under  sections  one
   14  hundred  eighty-three,  one  hundred eighty-three-a, one hundred eighty-
   15  four or one hundred eighty-four-a of this chapter, and
   16    (6) any amount treated as dividends pursuant to section  seventy-eight
   17  of the internal revenue code [and not otherwise deductible under subpar-
   18  agraphs one and two of this paragraph];
   19    (7)  that portion of wages and salaries paid or incurred for the taxa-
   20  ble year for which a deduction is not allowed pursuant to the provisions
   21  of section two hundred eighty-C of the internal revenue code.
   22    [(8) in the case of a taxpayer who is separately or as a partner of  a
   23  partnership  doing  an  insurance  business  as a member of the New York
   24  insurance exchange described in section six thousand two hundred one  of
   25  the  insurance  law, any item of income, gain, loss or deduction of such
   26  business which is the taxpayer's distributive  or  pro  rata  share  for
   27  federal  income  tax  purposes or which the taxpayer is required to take
   28  into account separately for federal income tax purposes.]
   29    (9) for taxable years beginning after December thirty-first,  nineteen
   30  hundred eighty-one, except with respect to property which is a qualified
   31  mass  commuting vehicle described in subparagraph (D) of paragraph eight
   32  of subsection (f) of section one hundred  sixty-eight  of  the  internal
   33  revenue code (relating to qualified mass commuting vehicles) and proper-
   34  ty  of  a taxpayer principally engaged in the conduct of aviation (other
   35  than air freight forwarders acting as principal and  like  indirect  air
   36  carriers)  which  is placed in service before taxable years beginning in
   37  nineteen hundred eighty-nine,  any  amount  which  is  included  in  the
   38  taxpayer's federal taxable income solely as a result of an election made
   39  pursuant  to  the provisions of such paragraph eight as it was in effect
   40  for agreements entered into prior to  January  first,  nineteen  hundred
   41  eighty-four;
   42    (10) for taxable years beginning after December thirty-first, nineteen
   43  hundred eighty-one, except with respect to property which is a qualified
   44  mass  commuting vehicle described in subparagraph (D) of paragraph eight
   45  of subsection (f) of section one hundred  sixty-eight  of  the  internal
   46  revenue code (relating to qualified mass commuting vehicles) and proper-
   47  ty  of  a taxpayer principally engaged in the conduct of aviation (other
   48  than air freight forwarders acting as principal and  like  indirect  air
   49  carriers)  which  is placed in service before taxable years beginning in
   50  nineteen hundred eighty-nine, any amount which the taxpayer  could  have
   51  excluded  from  federal  taxable  income  had  it  not made the election
   52  provided for in such paragraph eight as it was in effect for  agreements
   53  entered into prior to January first, nineteen hundred eighty-four;
   54    (11)  the amount deductible pursuant to paragraph (j) of this subdivi-
   55  sion; and
       S. 6359--D                         14                         A. 8559--D

    1    (12) upon the disposition of property to which paragraph (j)  of  this
    2  subdivision  applies,  the amount, if any, by which the aggregate of the
    3  amounts described in subparagraph ten of paragraph (b) of this  subdivi-
    4  sion  attributable to such property exceeds the aggregate of the amounts
    5  described  in  paragraph  (j)  of  this subdivision attributable to such
    6  property; and
    7    [(13) if the added tax provided for in either (i)  former  subdivision
    8  two  of section one hundred eighty-two of this chapter (relating to real
    9  estate corporations) or (ii) former subdivision  one-a  of  section  two
   10  hundred  nine of this chapter (relating to real estate corporations) has
   11  been imposed upon the taxpayer,  any  income  which  has  been  used  in
   12  computing such tax.]
   13    (14)   The  amount  deductible  pursuant  to  paragraph  (l)  of  this
   14  [subsection] SUBDIVISION.
   15    [(15) In the case of an attorney-in-fact,  with  respect  to  which  a
   16  mutual  insurance  company,  which  is  an  interinsurer or a reciprocal
   17  insurer and is subject to tax under subdivision (a) of  section  fifteen
   18  hundred  ten  of  this chapter, has made the election provided for under
   19  section eight hundred thirty-five  of  the  Internal  Revenue  Code,  an
   20  amount  equal  to the excess, if any, of the amounts paid or incurred by
   21  such interinsurer or reciprocal insurer  in  the  taxable  year  to  the
   22  attorney-in-fact  over  the  deduction  allowed  to such interinsurer or
   23  reciprocal insurer with respect to amounts paid or incurred in the taxa-
   24  ble year to the attorney-in-fact under subsection (b)  of  such  section
   25  eight hundred thirty-five of the Internal Revenue Code.]
   26    (16) In the case of a taxpayer subject to the modification provided by
   27  subparagraph  sixteen  of  paragraph (b) of this subdivision, the amount
   28  required to be recaptured pursuant to subsection (d) of section  179  of
   29  the  internal  revenue  code  with  respect  to property upon which such
   30  modification was based.
   31    (17) FOR TAXABLE YEARS  BEGINNING  AFTER  DECEMBER  THIRTY-FIRST,  TWO
   32  THOUSAND  TWO, THE AMOUNT DEDUCTIBLE PURSUANT TO PARAGRAPH (N-1) OF THIS
   33  SUBDIVISION.
   34    (18) the amount of income or gain included in federal  taxable  income
   35  of  a taxpayer that is a partner in a qualified entity or is a qualified
   36  entity that is located both within and without a New  York  state  inno-
   37  vation  hot  spot, to the extent that the income or gain is attributable
   38  to the operations of a qualified entity at or as part of  the  New  York
   39  state  innovation  hot  spot as provided in section thirty-eight of this
   40  chapter.
   41    (19) THE AMOUNT COMPUTED PURSUANT TO PARAGRAPH (R), (S) OR (T) OF THIS
   42  SUBDIVISION, BUT ONLY THE AMOUNT DETERMINED  PURSUANT  TO  ONE  OF  SUCH
   43  PARAGRAPHS.
   44    (b)  Entire  net  income  shall  be  determined without the exclusion,
   45  deduction or credit of:
   46    (1) [the amount of any specific exemption or credit allowed in any law
   47  of the United States imposing any tax on or measured by  the  income  of
   48  corporations,]  IN  THE  CASE  OF  AN  ALIEN  CORPORATION THAT UNDER ANY
   49  PROVISION OF THE INTERNAL REVENUE CODE IS NOT  TREATED  AS  A  "DOMESTIC
   50  CORPORATION"  AS  DEFINED IN SECTION SEVEN THOUSAND SEVEN HUNDRED ONE OF
   51  SUCH CODE, (I) ANY PART OF ANY INCOME FROM DIVIDENDS OR INTEREST ON  ANY
   52  KIND  OF  STOCK,  SECURITIES OR INDEBTEDNESS, BUT ONLY IF SUCH INCOME IS
   53  TREATED AS EFFECTIVELY CONNECTED WITH THE CONDUCT OF A TRADE OR BUSINESS
   54  IN THE UNITED STATES PURSUANT TO SECTION 864  OF  THE  INTERNAL  REVENUE
   55  CODE, (II) ANY INCOME EXEMPT FROM FEDERAL TAXABLE INCOME UNDER ANY TREA-
   56  TY  OBLIGATION  OF  THE  UNITED STATES, BUT ONLY IF SUCH INCOME WOULD BE
       S. 6359--D                         15                         A. 8559--D

    1  TREATED AS EFFECTIVELY CONNECTED IN ABSENCE OF SUCH  EXEMPTION  PROVIDED
    2  THAT  SUCH  TREATY  OBLIGATION  DOES  NOT  PRECLUDE THE TAXATION OF SUCH
    3  INCOME BY A STATE, OR (III) ANY INCOME WHICH WOULD BE TREATED AS  EFFEC-
    4  TIVELY  CONNECTED  IF  SUCH  INCOME  WERE NOT EXCLUDED FROM GROSS INCOME
    5  PURSUANT TO SUBSECTION (A) OF SECTION 103 OF THE INTERNAL REVENUE CODE;
    6    (2) any part of any income from dividends or interest on any  kind  of
    7  stock,  securities  or  indebtedness, [except as provided in clauses (1)
    8  and (2) of paragraph (a) hereof,]
    9    (3) taxes on or measured by profits or income paid or accrued  to  the
   10  United  States[,] OR any of its possessions [or to any foreign country],
   11  TERRITORIES OR COMMONWEALTHS, including taxes in  lieu  of  any  of  the
   12  foregoing  taxes  otherwise generally imposed by [any foreign country or
   13  by] any possession, TERRITORY OR COMMONWEALTH of the United States,
   14    (3-a) taxes on or measured by profits  or  income,  or  which  include
   15  profits  or  income  as a measure, paid or accrued to any other state of
   16  the United States, or any  political  subdivision  thereof,  or  to  the
   17  District  of  Columbia,  including taxes expressly in lieu of any of the
   18  foregoing taxes otherwise generally imposed by any other  state  of  the
   19  United  States, or any political subdivision thereof, or the District of
   20  Columbia;
   21    (4) taxes imposed under this article  and  article  thirty-two  AS  IN
   22  EFFECT  ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN and sections one
   23  hundred eighty-three, one hundred eighty-three-a,  one  hundred  eighty-
   24  four and one hundred eighty-four-a of this chapter,
   25    (4-a)(A) [the entire amount allowable as an exclusion or deduction for
   26  stock transfer taxes imposed by article twelve of this chapter in deter-
   27  mining  the  entire  taxable  income  which  the taxpayer is required to
   28  report to the United States treasury department but only to  the  extent
   29  that  such  taxes  are  incurred and paid in market making transactions,
   30  (B)] in those instances where a credit for the special additional  mort-
   31  gage  recording  tax credit is allowed under [paragraph (a) of] subdivi-
   32  sion [seventeen] NINE of section two hundred [ten] TEN-B of  this  arti-
   33  cle,  the  amount  allowed  as an exclusion or deduction for the special
   34  additional mortgage  recording  tax  imposed  by  subdivision  one-a  of
   35  section  two  hundred  fifty-three  of  this  chapter in determining the
   36  entire taxable income which the taxpayer is required to  report  to  the
   37  United  States  treasury  department,  and  [(C)]  (B) unless the credit
   38  allowed pursuant to subdivision [seventeen] NINE of section two  hundred
   39  [ten]  TEN-B of this article is reflected in the computation of the gain
   40  or loss so as to result in an increase in such gain or decrease of  such
   41  loss,  for  federal income tax purposes, from the sale or other disposi-
   42  tion of the property with respect to which the special additional  mort-
   43  gage  recording tax imposed pursuant to subdivision one-a of section two
   44  hundred fifty-three of this chapter was paid, the amount of the  special
   45  additional  mortgage  recording  tax  imposed  by  subdivision  one-a of
   46  section two hundred fifty-three of this chapter which was paid and which
   47  is reflected in the computation of the basis of the property  so  as  to
   48  result  in  a decrease in such gain or increase in such loss for federal
   49  income tax purposes from the sale or other disposition of  the  property
   50  with respect to which such tax was paid.
   51    (6)  [in  the discretion of the tax commission, any amount of interest
   52  directly or indirectly and  any  other  amount  directly  or  indirectly
   53  attributable  as a carrying charge or otherwise to subsidiary capital or
   54  to income, gains or losses from subsidiary capital] ANY  AMOUNT  ALLOWED
   55  AS  A  DEDUCTION  FOR THE TAXABLE YEAR UNDER SECTION 172 OF THE INTERNAL
       S. 6359--D                         16                         A. 8559--D

    1  REVENUE CODE, INCLUDING CARRYOVERS  OF  DEDUCTIONS  FROM  PRIOR  TAXABLE
    2  YEARS.
    3    [(7)  in the case of a taxpayer who is separately or as a partner of a
    4  partnership doing an insurance business as a  member  of  the  New  York
    5  insurance  exchange described in section six thousand two hundred one of
    6  the insurance law, such taxpayer's distributive or pro rata share of the
    7  allocated entire  net  income  of  such  business  as  determined  under
    8  sections fifteen hundred three and fifteen hundred four of this chapter,
    9  provided  however,  in  the  event such allocated entire net income is a
   10  loss, such taxpayer's distributive or pro rata share of such loss  shall
   11  not  be  subtracted  from federal taxable income in computing entire net
   12  income under this subdivision.]
   13    (8) for taxable years beginning after December thirty-first,  nineteen
   14  hundred eighty-one, except with respect to property which is a qualified
   15  mass  commuting vehicle described in subparagraph (D) of paragraph eight
   16  of subsection (f) of section one hundred  sixty-eight  of  the  internal
   17  revenue code (relating to qualified mass commuting vehicles) and proper-
   18  ty  of  a taxpayer principally engaged in the conduct of aviation (other
   19  than air freight forwarders acting as principal and  like  indirect  air
   20  carriers)  which  is placed in service before taxable years beginning in
   21  nineteen hundred eighty-nine, any amount which the taxpayer claimed as a
   22  deduction in computing its federal taxable income solely as a result  of
   23  an  election  made pursuant to the provisions of such paragraph eight as
   24  it was in effect for agreements entered into  prior  to  January  first,
   25  nineteen hundred eighty-four;
   26    (9)  for taxable years beginning after December thirty-first, nineteen
   27  hundred eighty-one, except with respect to property which is a qualified
   28  mass commuting vehicle described in subparagraph (D) of paragraph  eight
   29  of  subsection  (f)  of  section one hundred sixty-eight of the internal
   30  revenue code (relating to qualified mass commuting vehicles) and proper-
   31  ty of a taxpayer principally engaged in the conduct of  aviation  (other
   32  than  air  freight  forwarders acting as principal and like indirect air
   33  carriers) which is placed in service before taxable years  beginning  in
   34  nineteen  hundred  eighty-nine, any amount which the taxpayer would have
   35  been required to include in  the  computation  of  its  federal  taxable
   36  income had it not made the election permitted pursuant to such paragraph
   37  eight  as  it was in effect for agreements entered into prior to January
   38  first, nineteen hundred eighty-four;
   39    (10) in the case of property placed in service in taxable years begin-
   40  ning before nineteen hundred ninety-four, for  taxable  years  beginning
   41  after  December  thirty-first,  nineteen hundred eighty-one, except with
   42  respect to property subject to the provisions  of  section  two  hundred
   43  eighty-F   of  the  internal  revenue  code,  property  subject  to  the
   44  provisions of section one hundred sixty-eight of  the  internal  revenue
   45  code which is placed in service in this state in taxable years beginning
   46  after  December  thirty-first, nineteen hundred eighty-four and property
   47  of a taxpayer principally engaged in the conduct of aviation (other than
   48  air freight forwarders acting as principal and like indirect air  carri-
   49  ers)  which is placed in service before taxable years beginning in nine-
   50  teen  hundred  [eight-nine]  EIGHTY-NINE,  the  amount  allowable  as  a
   51  deduction determined under section one hundred sixty-eight of the inter-
   52  nal revenue code;
   53    (11)  upon  the disposition of property to which paragraph (j) of this
   54  subdivision applies, the amount, if any, by which the aggregate  of  the
   55  amounts  described  in  such paragraph (j) attributable to such property
       S. 6359--D                         17                         A. 8559--D

    1  exceeds the aggregate of the amounts described in  subparagraph  ten  of
    2  this paragraph attributable to such property.
    3    (15)  Real  property taxes paid on qualified agricultural property and
    4  deducted in determining federal taxable income, to  the  extent  of  the
    5  amount of the agricultural property tax credit allowed under subdivision
    6  [twenty-two] ELEVEN of section two hundred [ten] TEN-B of this article.
    7    (16)  In  the  case  of  a taxpayer which is not an eligible farmer as
    8  defined in paragraph (b) of subdivision [twenty-two] ELEVEN  of  section
    9  two  hundred  [ten]  TEN-B  of this article, the amount of any deduction
   10  claimed pursuant to section  179  of  the  internal  revenue  code  with
   11  respect  to  a sport utility vehicle which is not a passenger automobile
   12  as defined in paragraph 5 of subsection  (d)  of  section  280F  of  the
   13  internal revenue code.
   14    (17)  for  taxable  years  beginning  after December thirty-first, two
   15  thousand two, in the case of qualified property described  in  paragraph
   16  two  of  subsection k of section 168 of the internal revenue code, other
   17  than qualified resurgence zone property described in  paragraph  (q)  of
   18  this subdivision, and other than qualified New York Liberty Zone proper-
   19  ty  described  in  paragraph two of subsection b of section 1400L of the
   20  internal revenue code (without regard to clause (i) of subparagraph  (C)
   21  of  such paragraph), which was placed in service on or after June first,
   22  two thousand three, the amount allowable as a  deduction  under  section
   23  167 of the internal revenue code.
   24    (18) Premiums paid for environmental remediation insurance, as defined
   25  in  section  twenty-three  of  this chapter, and deducted in determining
   26  federal taxable income, to the extent of the amount of the environmental
   27  remediation insurance credit allowed under such section twenty-three and
   28  subdivision [thirty-five] NINETEEN of section two hundred [ten] TEN-B of
   29  this article.
   30    (19) The amount of any  deduction  allowed  pursuant  to  section  one
   31  hundred ninety-nine of the internal revenue code.
   32    (20) The amount of any federal deduction for taxes imposed under arti-
   33  cle twenty-three of this chapter.
   34    (20-A) THE AMOUNT OF ANY FEDERAL DEDUCTION FOR THE EXCISE TAX ON TELE-
   35  COMMUNICATION SERVICES TO THE EXTENT SUCH TAXES ARE USED AS THE BASIS OF
   36  THE  CALCULATION OF THE TAX-FREE NY AREA EXCISE TAX ON TELECOMMUNICATION
   37  SERVICES CREDIT ALLOWED UNDER  SUBDIVISION  FORTY-FOUR  OF  SECTION  TWO
   38  HUNDRED TEN-B OF THIS ARTICLE.
   39    (21)  THE  AMOUNT  OF ANY FEDERAL DEDUCTION FOR REAL PROPERTY TAXES TO
   40  THE EXTENT SUCH TAXES ARE USED AS THE BASIS OF THE  CALCULATION  OF  THE
   41  REAL  PROPERTY  TAX  CREDIT  FOR MANUFACTURERS ALLOWED UNDER SUBDIVISION
   42  FORTY-THREE OF SECTION TWO HUNDRED TEN-B OF THIS ARTICLE.
   43    [(c) Entire net income shall include income  within  and  without  the
   44  United States;]
   45    (c-1)(1)  Notwithstanding  any other provision of this article, in the
   46  case of a taxpayer which is a foreign air carrier holding a foreign  air
   47  carrier  permit issued by the United States department of transportation
   48  pursuant to section four hundred two of  the  federal  aviation  act  of
   49  nineteen  hundred  fifty-eight, as amended, and which is qualified under
   50  subparagraph two of this paragraph, entire net income shall not include,
   51  and shall be computed without the  deduction  of,  amounts  directly  or
   52  indirectly  attributable  to,  (i)  any income derived from the interna-
   53  tional operation  of  aircraft  as  described  in  and  subject  to  the
   54  provisions of section eight hundred eighty-three of the internal revenue
   55  code,  (ii)  income  without the United States which is derived from the
   56  operation of aircraft, and (iii) income without the United States  which
       S. 6359--D                         18                         A. 8559--D

    1  is  of  a  type  described  in  subdivision (a) of section eight hundred
    2  eighty-one of the internal revenue code except that it is  derived  from
    3  sources  without  the  United  States.  Entire  net income shall include
    4  income  described in clauses (i), (ii) and (iii) of this subparagraph in
    5  the case of taxpayers not described in the previous sentence.
    6    (2) A taxpayer is qualified under this subparagraph  if  air  carriers
    7  organized  in  the United States and operating in the foreign country or
    8  countries in which the taxpayer has its major base of operations and  in
    9  which  it  is  organized,  resident or headquartered (if not in the same
   10  country as its major base of operations) are not subject to  any  income
   11  tax  or  other tax based on or measured by income or receipts imposed by
   12  such foreign country or countries or any political subdivision  thereof,
   13  or  if  so  subject to such tax, are provided an exemption from such tax
   14  equivalent to that provided for herein.
   15    (c-2) Adjustments by qualified public utilities. (1) In the case of  a
   16  taxpayer which is a qualified public utility, entire net income shall be
   17  computed with the adjustments set forth in this paragraph.
   18    (2)  Definitions.  (A)  Qualified  public utility. The term "qualified
   19  public utility" means a taxpayer which: (i)  on  December  thirty-first,
   20  nineteen  hundred ninety-nine, was subject to the ratemaking supervision
   21  of the state department of public service, and (ii) for the year  ending
   22  on  December  thirty-first, nineteen hundred ninety-nine, was subject to
   23  tax under former section one hundred eighty-six of this chapter.
   24    (B) Transition property. The term "transition property" means property
   25  placed in service by the taxpayer before January  first,  two  thousand,
   26  for  which a depreciation deduction is allowed under section one hundred
   27  sixty-seven of the internal revenue code.
   28    (3) Federal depreciation disallowed. With respect to transition  prop-
   29  erty,  the  deduction  for  federal income tax purposes for depreciation
   30  shall not be allowed.
   31    (4) New York depreciation. With  respect  to  transition  property,  a
   32  deduction  shall  be  allowed  for the depreciation expense shown on the
   33  books and records of the taxpayer for the taxable year and determined in
   34  accordance with generally accepted accounting principles.
   35    (5) Regulatory assets. A deduction shall be allowed for amounts recog-
   36  nized as expense on the books and records of the taxpayer for the  taxa-
   37  ble  year,  which  amounts were recognized as expense for federal income
   38  tax purposes in a taxable year ending  on  or  before  December  thirty-
   39  first,  nineteen  hundred ninety-nine, where: (A) such amounts represent
   40  expenditures which, when made, were charged to a deferred debit  account
   41  or  similar  asset account on the books and records of the taxpayer, and
   42  where (B) the recognition of expense on the books  and  records  of  the
   43  taxpayer  is  matched by revenue stemming from a procedure or adjustment
   44  allowing the recovery of such expenditures, and where (C)  such  revenue
   45  is recognized for federal income tax purposes in the taxable year.
   46    (6)  Basis for gain or loss. (A) Recognition transactions. (i) General
   47  rule - book basis. Except as provided in subclause (ii) of this  clause,
   48  where  transition property is sold or otherwise disposed of in the taxa-
   49  ble year in a transaction of the type requiring recognition of  gain  or
   50  loss  for  federal  income  tax  purposes, the basis for determining the
   51  amount of such gain or loss under this article shall be the cost of  the
   52  property less the accumulated depreciation on the property determined on
   53  the  books  and  records  of  the  taxpayer in accordance with generally
   54  accepted accounting principles.
   55    (ii) Qualified gain - New York basis.  Where  a  sale  or  disposition
   56  described in subclause (i) of this clause results in recognition of gain
       S. 6359--D                         19                         A. 8559--D

    1  for  federal  income tax purposes, and where either (I) such recognition
    2  occurs in a taxable year ending after nineteen hundred  ninety-nine  and
    3  before  two  thousand ten, or (II) such recognition is with respect to a
    4  nuclear  electric  generating  facility,  the  basis for determining the
    5  amount of such gain under this article shall be the cost of the property
    6  less the aggregate of the New York depreciation deductions on the  prop-
    7  erty determined under subparagraph four of this paragraph.
    8    (iii)  No  conversion  of  gain  to  loss. In the event that the basis
    9  determined under subclause (ii) of this clause results in  determination
   10  of  a  loss  on the sale or disposition of the property, no gain or loss
   11  shall be recognized under this article with  respect  to  such  sale  or
   12  disposition.
   13    (B)  Nonrecognition transactions. (i) Carryover basis. (I) where tran-
   14  sition property is disposed of ("original disposition") in a transaction
   15  of a type requiring deferral of recognition of gain or loss for  federal
   16  income tax purposes, and where (II) there is a subsequent recognition of
   17  gain  or loss for federal income tax purposes ("clause B gain or loss"),
   18  the amount of which is determined by reference, in whole or in part,  to
   19  the  basis  of  such transition property ("underlying transition proper-
   20  ty"), then (III) the amount of such clause B gain  or  loss  under  this
   21  article shall be adjusted as provided in subclause (ii) or (iii) of this
   22  clause.
   23    (ii)  General  rule  -  book  basis  adjustment. Except as provided in
   24  subclause (iii) of this clause, the amount of clause  B  gain  shall  be
   25  reduced,  or  the  amount  of  clause B loss increased, by the amount by
   26  which the book basis of the underlying transition property on  the  date
   27  of  original  disposition  (determined using the provisions of subclause
   28  (i) of clause (A) of this subparagraph) exceeds the federal  income  tax
   29  basis of such property on such date.
   30    (iii)  Qualified gain - New York basis adjustment. Where clause B gain
   31  either (I) occurs in a taxable year ending after nineteen hundred  nine-
   32  ty-nine and before two thousand ten, or (II) is with respect to a nucle-
   33  ar  electric  generating  facility,  the  amount of such gain under this
   34  article shall be reduced, but not below zero, by the amount by which the
   35  New York basis of the underlying transition  property  on  the  date  of
   36  original  disposition (determined using the provisions of subclause (ii)
   37  of clause (A) of this subparagraph) exceeds the federal income tax basis
   38  of such property on such date.
   39    (iv) Application to replacement  property  and  transferee  taxpayers.
   40  This  clause  shall apply whether the clause B gain or loss: (I) is with
   41  respect to either transition property or depreciable property the  basis
   42  of  which  is determined by reference to transition property, or (II) is
   43  recognized by either a qualified public utility or by a  taxpayer  which
   44  is  a  transferee of transition property (whether or not such transferee
   45  is a qualified public utility, notwithstanding subparagraph one of  this
   46  paragraph).
   47    (c-3)  Depreciation adjustments by qualified power producers and pipe-
   48  line companies. (1) In the case of  a  qualified  taxpayer,  entire  net
   49  income  shall be computed with the depreciation adjustments set forth in
   50  this paragraph.
   51    (2) Definitions. (A) Qualified taxpayer. The term "qualified taxpayer"
   52  means a qualified power producer or a qualified pipeline.
   53    (B) Qualified power producer.  The  term  "qualified  power  producer"
   54  means  a  taxpayer which: (i) on December thirty-first, nineteen hundred
   55  ninety-nine, was not subject to the ratemaking supervision of the  state
   56  department  of  public service, and (ii) for the year ending on December
       S. 6359--D                         20                         A. 8559--D

    1  thirty-first, nineteen hundred ninety-nine, was  subject  to  tax  under
    2  former  section one hundred eighty-six of this chapter on account of its
    3  being principally engaged in the business of supplying electricity.
    4    (C) Qualified pipeline. The term "qualified pipeline" means a taxpayer
    5  which:  (i)  on December thirty-first, nineteen hundred ninety-nine, was
    6  subject to the ratemaking supervision of either the federal energy regu-
    7  latory commission or the state department of public  service,  and  (ii)
    8  for  the  year ending on December thirty-first, nineteen hundred ninety-
    9  nine, was subject to tax under sections one hundred eighty-three and one
   10  hundred eighty-four of this chapter on account of its being  principally
   11  engaged in the business of pipeline transmission.
   12    (D) Transition property. The term "transition property" means property
   13  placed  in  service  by  a  qualified taxpayer before January first, two
   14  thousand, for which a depreciation deduction is  allowed  under  section
   15  one hundred sixty-seven of the internal revenue code.
   16    (3)  Federal depreciation disallowed. With respect to transition prop-
   17  erty, the deduction for federal income  tax  purposes  for  depreciation
   18  shall not be allowed.
   19    (4)  New  York  depreciation.  With  respect to transition property, a
   20  deduction shall be allowed for  the  depreciation  expense  computed  as
   21  provided  in this subparagraph. (A) All transition property shown on the
   22  books and records of the taxpayer on January first, two  thousand  shall
   23  be  treated  as  a  single asset placed in service on such date. The New
   24  York basis for purposes of computing the depreciation deduction on  such
   25  single  asset  shall  be  the net book value of such transition property
   26  determined on the first day of the federal taxable year  ending  in  two
   27  thousand  (or  on  the  date  any such property is placed in service, if
   28  later) adjusted as provided in clause (B) of this subparagraph.
   29    (B) If transition property is sold or otherwise disposed of,  the  New
   30  York basis of the single asset shall be reduced on the date of such sale
   31  or  disposition  by the amount of the adjusted federal tax basis of such
   32  property on such date.
   33    (C) The New York depreciation deduction allowed for any  taxable  year
   34  with  respect to such single asset shall be computed using the straight-
   35  line method, a twenty-year life, and a salvage value of zero.
   36    (D) For purposes of this subparagraph, the term "net book value" means
   37  cost reduced by accumulated depreciation shown on the books and  records
   38  of the taxpayer and determined, in the case of a qualified power produc-
   39  er,  in accordance with generally accepted accounting principles; and in
   40  the case of a qualified pipeline,  in  accordance  with  the  taxpayer's
   41  regulatory  reports  filed with the federal energy regulatory commission
   42  or state department of public service.
   43    (d) The [tax commission] COMMISSIONER may, whenever necessary in order
   44  properly to reflect the entire net income of any taxpayer, determine the
   45  year or period in which  any  item  of  income  or  deduction  shall  be
   46  included,  without  regard  to  the method of accounting employed by the
   47  taxpayer[;].
   48    (e) The entire net income of any bridge commission created by  act  of
   49  congress  to  construct  a bridge across an international boundary means
   50  its gross income less the expense of maintaining and operating its prop-
   51  erties, the annual interest upon its bonds and  other  obligations,  and
   52  the  annual  charge  for  the retirement of such bonds or obligations at
   53  maturity[;].
   54    [(f) A net operating loss deduction shall be allowed  which  shall  be
   55  presumably  the  same  as the net operating loss deduction allowed under
   56  section one hundred seventy-two of the internal revenue code,  or  which
       S. 6359--D                         21                         A. 8559--D

    1  would  have  been allowed if the taxpayer had not made an election under
    2  subchapter s of chapter one of the internal revenue code, except that in
    3  every instance where such deduction is allowed under this article:
    4    (1)  any  net  operating  loss  included in determining such deduction
    5  shall be adjusted to reflect the inclusions and exclusions  from  entire
    6  net income required by paragraphs (a), (b) and (g) hereof,
    7    (2)  such deduction shall not include any net operating loss sustained
    8  during any taxable year  beginning  prior  to  January  first,  nineteen
    9  hundred  sixty-one, or during any taxable year in which the taxpayer was
   10  not subject to the tax imposed by this article,
   11    (3) such deduction shall not exceed the deduction for the taxable year
   12  allowed under section one hundred seventy-two of  the  internal  revenue
   13  code,  or  the  deduction  for  the  taxable  year which would have been
   14  allowed if the taxpayer had not made an election under subchapter  s  of
   15  chapter one of the internal revenue code,
   16    (4)  in the case of a New York S corporation, such deduction shall not
   17  include any net operating loss sustained during a New  York  C  year  or
   18  during a New York S year beginning prior to nineteen hundred ninety, and
   19  in  the  case  of  a  New  York  C corporation, such deduction shall not
   20  include any net operating loss sustained  during  a  New  York  S  year,
   21  provided,  however, a New York S year shall be treated as a taxable year
   22  for purposes of determining the number of taxable years to which  a  net
   23  operating loss may be carried back or carried forward, and
   24    (5) the net operating loss deduction allowed under section one hundred
   25  seventy-two  of  the  internal  revenue  code shall for purposes of this
   26  paragraph be determined as  if  the  taxpayer  had  elected  under  such
   27  section  to  relinquish  the entire carryback period with respect to net
   28  operating losses, except with respect to the first ten thousand  dollars
   29  of each of such losses, sustained during taxable years ending after June
   30  thirtieth, nineteen hundred eighty-nine.
   31    (g)  For  taxable  years  commencing  prior to January first, nineteen
   32  hundred eighty-seven, at the election of the taxpayer, a deduction shall
   33  be allowed for expenditures paid or incurred during the taxable year for
   34  the construction, reconstruction,  erection  or  improvement  of  either
   35  industrial  waste  treatment facilities or air pollution control facili-
   36  ties, or, with respect to taxable years beginning on  or  after  January
   37  first, nineteen hundred seventy-seven and before January first, nineteen
   38  hundred eighty-one, industrial waste treatment controlled process facil-
   39  ities or air pollution controlled process facilities.
   40    (1)  (A)  (1)  The  term "industrial waste treatment facilities" shall
   41  mean facilities for the treatment, neutralization  or  stabilization  of
   42  industrial  waste  and other wastes (as the terms "industrial waste" and
   43  "other wastes" are defined  in  section  17-0105  of  the  environmental
   44  conservation  law)  from a point immediately preceding the point of such
   45  treatment, neutralization or stabilization to  the  point  of  disposal,
   46  including the necessary pumping and transmitting facilities.
   47    (2)  The term "industrial waste treatment controlled process facility"
   48  shall mean such portion of the cost of an industrial production facility
   49  designed for the purpose of obviating  the  need  for  industrial  waste
   50  treatment  facilities  as  defined  in  item one of this clause as shall
   51  exceed the cost of an industrial production facility of equal production
   52  capacity which if constructed would require industrial  waste  treatment
   53  facilities  to meet emission standards in compliance with the provisions
   54  of the environmental conservation law and the codes, rules, regulations,
   55  permits or orders issued pursuant thereto but only to the extent of  the
   56  cost of such industrial waste treatment facilities.
       S. 6359--D                         22                         A. 8559--D

    1    (B) (1) The term "air pollution control facilities" shall mean facili-
    2  ties which remove, reduce, or render less noxious air contaminants emit-
    3  ted from an air contamination source (as the terms "air contaminant" and
    4  "air  contamination  source" are defined in section 19-0107 of the envi-
    5  ronmental conservation law) from a point immediately preceding the point
    6  of  such  removal,  reduction  or rendering to the point of discharge of
    7  air, meeting emission standards as  established  by  the  department  of
    8  environmental  conservation, but excluding such facilities installed for
    9  the primary purpose of salvaging materials which are usable in the manu-
   10  facturing process or are marketable and excluding those facilities which
   11  rely for their efficacy on dilution, dispersion or assimilation  of  air
   12  contaminants  in the ambient air after emission. Such term shall further
   13  include flue gas desulfurization equipment and attendant sludge disposal
   14  facilities, fluidized bed boilers, precombustion coal  cleaning  facili-
   15  ties  or  other  facilities that conform with this subdivision and which
   16  comply with the provisions of the state acid deposition control act  set
   17  forth  in  title nine of article nineteen of the environmental conserva-
   18  tion law.
   19    (2) The term "air pollution controlled process  facility"  shall  mean
   20  such  portion  of the cost of an industrial production facility designed
   21  for the purpose of obviating the need for air pollution control  facili-
   22  ties  as  defined in item one of this clause as shall exceed the cost of
   23  an industrial production facility of equal productive capacity which  if
   24  constructed  would  require  air  pollution  control facilities to inert
   25  emission standards as established pursuant to  title  three  of  article
   26  nineteen of the environmental conservation law but only to the extent of
   27  the cost of such air pollution control facilities.
   28    (2) However, such deduction shall be allowed only
   29    (A)  with  respect to tangible property which is depreciable, pursuant
   30  to section one hundred sixty-seven of the internal revenue code,  having
   31  a  situs in this state and used in the taxpayer's trade or business, the
   32  construction, reconstruction, erection or improvement of which,  in  the
   33  case  of industrial waste treatment facilities, is initiated on or after
   34  January first, nineteen hundred sixty-five or which, in the case of  air
   35  pollution  control  facilities,  is initiated on or after January first,
   36  nineteen hundred sixty-six, or which in the  case  of  industrial  waste
   37  treatment  controlled  process  facilities  or  air pollution controlled
   38  process facilities is initiated on and  after  January  first,  nineteen
   39  hundred seventy-seven, and
   40    (B) on condition that such facilities have been certified by the state
   41  commissioner  of  environmental conservation or his designated represen-
   42  tative, pursuant to section 19-0309 of  the  environmental  conservation
   43  law,  as  complying  with  applicable  provisions  of  the environmental
   44  conservation law, the public health law, the  state  sanitary  code  and
   45  codes,  rules,  regulations,  permits or orders issued pursuant thereto,
   46  and
   47    (C) on condition that entire net income for the taxable year  and  all
   48  succeeding  taxable  years  be  computed without any deductions for such
   49  expenditures or for depreciation or amortization of  the  same  property
   50  other  than  the deductions allowed by this paragraph (g), except to the
   51  extent that the basis of the property may  be  attributable  to  factors
   52  other than such expenditures, or in case a deduction is allowable pursu-
   53  ant to this paragraph for only a part of such expenditures, on condition
   54  that  any  deduction  allowed  for  federal income tax purposes for such
   55  expenditures or for depreciation or amortization of the same property be
       S. 6359--D                         23                         A. 8559--D

    1  proportionately reduced in computing entire net income for  the  taxable
    2  year and all succeeding taxable years, and
    3    (D)  where  the  election provided for in paragraph (d) of subdivision
    4  three of section two hundred ten of this chapter has not been  exercised
    5  in respect to the same property.
    6    (3)  (A)  If  expenditures in respect to an industrial waste treatment
    7  facility, an air pollution control facility, an industrial waste  treat-
    8  ment  controlled process facility or an air pollution controlled process
    9  facility have been deducted as provided herein and if within  ten  years
   10  from  the  end  of  the taxable year in which such deduction was allowed
   11  such property or any part thereof is used for  the  primary  purpose  of
   12  salvaging materials which are usable in the manufacturing process or are
   13  marketable,  the  taxpayer shall report such change of use in its report
   14  for the first taxable year during which it occurs, and the  tax  commis-
   15  sion  may  recompute  the  tax  for  the  year  or  years for which such
   16  deduction was allowed and any  carryback  or  carryover  year,  and  may
   17  assess  any  additional tax resulting from such recomputation within the
   18  time fixed by paragraph nine of subsection (c) of  section  ten  hundred
   19  eighty-three of this chapter.
   20    (B) If a deduction is allowed as herein provided for expenditures paid
   21  or  incurred during any taxable year on the basis of a temporary certif-
   22  icate of compliance issued pursuant to  the  environmental  conservation
   23  law  and  if  the  taxpayer  fails  to obtain a permanent certificate of
   24  compliance upon completion of the facilities with respect to which  such
   25  temporary certificate was issued, the taxpayer shall report such failure
   26  in  its  report  for  the  taxable year during which such facilities are
   27  completed, and the tax commission may recompute the tax for the year  or
   28  years  for  which such deduction was allowed and any carryback or carry-
   29  over year, and may assess any additional  tax  resulting  from  in  such
   30  recomputation  within the time fixed by paragraph nine of subsection (c)
   31  of section ten hundred eighty-three.
   32    (C) If a deduction is allowed as herein provided for expenditures paid
   33  or incurred during any taxable year  in  respect  to  an  air  pollution
   34  control  facility  on  the  basis  of a certificate of compliance issued
   35  pursuant to the environmental conservation law and  the  certificate  is
   36  revoked pursuant to subdivision three of section 19-0309 of the environ-
   37  mental  conservation  law,  the tax commission may recompute the tax for
   38  the year or years for which the facility is not or was not in compliance
   39  with the applicable provisions of the  environmental  conservation  law,
   40  the  state sanitary code or codes, rules, regulations, permits or orders
   41  promulgated pursuant thereto, and for which a deduction was allowed,  as
   42  well  as for any carryback or carryover year to which such deduction was
   43  carried, and may assess any additional tax resulting from such  recompu-
   44  tation  within  the  time  fixed  by paragraph nine of subsection (c) of
   45  section ten hundred eighty-three.
   46    (4) In any taxable year when property is sold  or  otherwise  disposed
   47  of,  with respect to which a deduction has been allowed pursuant to this
   48  paragraph, such deduction shall be  disregarded  in  computing  gain  or
   49  loss,  and  the  gain  or  loss on the sale or other disposition of such
   50  property shall be the gain or loss  entering  into  the  computation  of
   51  entire  taxable  income  which the taxpayer is required to report to the
   52  United States treasury department for such taxable year.]
   53    (h) If the period covered by a report under this article is other than
   54  the period covered by the report to the United States  treasury  depart-
   55  ment,
       S. 6359--D                         24                         A. 8559--D

    1    (1)  except  as provided in subparagraph two hereof, entire net income
    2  shall be determined by multiplying the taxable income reported  to  such
    3  department  (as  adjusted pursuant to the provisions of this article) by
    4  the number of calendar months or major  parts  thereof  covered  by  the
    5  report  under this article and dividing by the number of calendar months
    6  or major parts thereof covered by the report to such department.  If  it
    7  shall  appear that such method of determining entire net income does not
    8  properly reflect the taxpayer's income during the period covered by  the
    9  report  under  this  article, the [tax commission] COMMISSIONER shall be
   10  authorized in its discretion to determine such entire net income  solely
   11  on  the  basis of the taxpayer's income during the period covered by its
   12  report under this article[;].
   13    (2) [in] IN the case of a  New  York  S  termination  year,  an  equal
   14  portion of entire net income shall be assigned to each day of such year.
   15  The  portion  of  such entire net income thereby assigned to the S short
   16  year and the C short year shall be included in  the  respective  reports
   17  for  the  S short year and the C short year under this article. However,
   18  where paragraph three of subsection (s) of section six hundred twelve of
   19  this chapter applies, the portion of such entire net income assigned  to
   20  the  S  short year and the C short year shall be determined under normal
   21  tax accounting rules.
   22    (i) With respect to a DISC which during any taxable year or  reporting
   23  year  (1)  received  more  than five percent of its gross sales from the
   24  sale of inventory or other property which it purchased from  its  stock-
   25  holders,  (2)  received more than five percent of its gross rentals from
   26  the rental of property which it purchased or rented from its  stockhold-
   27  ers  or  (3) received more than five percent of its total receipts other
   28  than sales and rentals from its stockholders, the  following  provisions
   29  shall apply.
   30    (A)  For any taxable year in which sub-paragraph (B) of this paragraph
   31  is in effect and not rendered invalid, a DISC  meeting  the  above  test
   32  shall be exempt from all taxes imposed by this article.
   33    (B)  Supplemental to the provisions of subdivision five of section two
   34  hundred eleven of this article, any taxpayer required to compute  a  tax
   35  under  this  article, which during the taxable year being reported was a
   36  stockholder in any DISC meeting the test prescribed in  this  paragraph,
   37  shall  for any taxable year ending after December thirty-first, nineteen
   38  hundred seventy-one adjust each item of its receipts,  expenses,  assets
   39  and  liabilities,  as  otherwise  computed under this article, by adding
   40  thereto its attributable share of each such DISC's  receipts,  expenses,
   41  assets  and  liabilities  as  reportable by each such DISC to the United
   42  States Treasury Department for its annual reporting period ending during
   43  the current taxable year of such taxpayer; provided, however,  (1)  that
   44  all transactions between the taxpayer and each such DISC shall be elimi-
   45  nated  from  the  taxpayer's  adjusted  receipts,  expenses,  assets and
   46  liabilities; (2) that the taxpayer's  entire  net  income  as  otherwise
   47  computed  under this section, shall be reduced by subtracting the amount
   48  of the deemed distribution of current income, if  any,  from  each  such
   49  DISC  already  included  in  the  entire  net income of such taxpayer by
   50  virtue of having been included in its entire  taxable  income  for  that
   51  taxable  year  as reported to the United States Treasury Department; and
   52  (3) that in the event this paragraph should  be  rendered  invalid,  all
   53  DISC's  and  their stockholders taxable hereunder shall be taxed instead
   54  under the remaining portions of this article.
   55    (j) in the case of property placed in service in taxable years  begin-
   56  ning  before  nineteen  hundred ninety-four, for taxable years beginning
       S. 6359--D                         25                         A. 8559--D

    1  after December thirty-first, nineteen hundred  eighty-one,  except  with
    2  respect  to  property  subject  to the provisions of section two hundred
    3  eighty-F of the internal  revenue  code  and  property  subject  to  the
    4  provisions  of  section  one hundred sixty-eight of the internal revenue
    5  code which is placed in service in this state in taxable years beginning
    6  after December thirty-first, nineteen hundred eighty-four, and  provided
    7  a  deduction  has  not  been excluded from entire net income pursuant to
    8  subparagraph eight of paragraph (b)  of  this  subdivision,  a  taxpayer
    9  shall  be  allowed  with  respect  to  property  which is subject to the
   10  provisions of section one hundred sixty-eight of  the  internal  revenue
   11  code  the  depreciation  deduction  allowable  under section one hundred
   12  sixty-seven of the internal revenue code  as  such  section  would  have
   13  applied to property placed in service on December thirty-first, nineteen
   14  hundred eighty. This paragraph shall not apply to property of a taxpayer
   15  principally  engaged  in the conduct of aviation (other than air freight
   16  forwarders acting as principal and like indirect air carriers) which  is
   17  placed  in  service  before  taxable years beginning in nineteen hundred
   18  eighty-nine.
   19    (k) QSSS. (1) New York S corporation. In the case  of  a  New  York  S
   20  corporation  which  is the parent of a qualified subchapter S subsidiary
   21  (QSSS) with respect to a taxable year:
   22    (A) where the QSSS is not an excluded corporation,
   23    (i) in determining the entire net income of such  parent  corporation,
   24  all  assets,  liabilities,  income  and  deductions of the QSSS shall be
   25  treated as assets, liabilities, income  and  deductions  of  the  parent
   26  corporation, and
   27    (ii)  the QSSS shall be exempt from all taxes imposed by this article,
   28  and
   29    (B) where the QSSS is an excluded corporation, the entire  net  income
   30  of  the  parent  corporation  shall be determined as if the federal QSSS
   31  election had not been made.
   32    (2) New York C corporation. In the case of a New  York  C  corporation
   33  which is the parent of a QSSS with respect to a taxable year:
   34    (A) where the QSSS is a taxpayer,
   35    (i)  in  determining the entire net income of such parent corporation,
   36  all assets, liabilities, income and deductions  of  the  QSSS  shall  be
   37  treated  as  assets,  liabilities,  income  and deductions of the parent
   38  corporation, and
   39    (ii) the QSSS shall be exempt from all taxes imposed by this  article,
   40  and
   41    (B) where the QSSS is not a taxpayer,
   42    (i) if the QSSS is not an excluded corporation, the parent corporation
   43  may  make  a QSSS inclusion election to include all assets, liabilities,
   44  income and deductions of the QSSS as  assets,  liabilities,  income  and
   45  deductions of the parent corporation, and
   46    (ii) in the absence of such election, or where the QSSS is an excluded
   47  corporation,  the  entire  net income of the parent corporation shall be
   48  determined as if the federal QSSS election had not been made.
   49    (3) Non-New York S corporation not excluded.  In  the  case  of  an  S
   50  corporation which is not a taxpayer and not an excluded corporation, and
   51  which  is  the parent of a QSSS which is a taxpayer, the shareholders of
   52  the parent corporation shall be entitled to make the New York S election
   53  under subsection (a) of section six hundred sixty of this chapter.
   54    (A) For any taxable year for which such election  is  in  effect,  the
   55  parent  corporation  shall be subject to tax under this article as a New
       S. 6359--D                         26                         A. 8559--D

    1  York S corporation, and the provisions of clause (A) of subparagraph one
    2  of this paragraph shall apply.
    3    (B) For any taxable year for which such election is not in effect, the
    4  QSSS shall be a New York C corporation, and the entire net income of the
    5  QSSS  shall  be  determined as if the federal QSSS election had not been
    6  made. For purposes of such determination, the taxable year of the parent
    7  corporation shall constitute the taxable year of  the  QSSS,  excluding,
    8  however, any portion of such year during which the QSSS is not a taxpay-
    9  er.
   10    (4)  S  corporation excluded. In the case of an S corporation which is
   11  an excluded corporation and which is the parent of a  QSSS  which  is  a
   12  taxpayer,  the QSSS shall be a New York C corporation and the provisions
   13  of clause (B) of subparagraph three of this paragraph shall apply.
   14    (5) Excluded corporation. The  term  "excluded  corporation"  means  a
   15  corporation  subject  to  tax  under  sections  one hundred eighty-three
   16  through one hundred eighty-six, inclusive, or  article  [thirty-two  or]
   17  thirty-three  of  this  chapter, or a foreign corporation not taxable by
   18  this state which, if it were taxable, would be subject to tax under  any
   19  of such sections or [articles] ARTICLE.
   20    (6)  Taxpayer.  For  purposes  of  this paragraph, the term "taxpayer"
   21  means a parent corporation or QSSS subject to tax  under  this  article,
   22  determined without regard to the provisions of this paragraph.
   23    (7)  QSSS  inclusion  election.  The  election  under subclause (i) of
   24  clause (B) of subparagraph two of this paragraph shall be effective  for
   25  the  taxable year for which made and for all succeeding taxable years of
   26  the corporation until such election is terminated. An election or termi-
   27  nation shall be made on such form and in such manner as the commissioner
   28  may prescribe by regulation or instruction.
   29    (l) Emerging technology investment deferral. In the case of  any  sale
   30  of a qualified emerging technologies investment held for more than thir-
   31  ty-six months and with respect to which the taxpayer elects the applica-
   32  tion  of this paragraph, gain from such sale shall be recognized only to
   33  the extent that the amount realized on such sale exceeds the cost of any
   34  qualified emerging technologies investment  purchased  by  the  taxpayer
   35  during  the three hundred sixty-five-day period beginning on the date of
   36  such sale, reduced by any portion of such  cost  previously  taken  into
   37  account under this paragraph. For purposes of this paragraph the follow-
   38  ing shall apply:
   39    (1)  A  qualified investment is stock of a corporation or an interest,
   40  other than as a creditor, in a partnership or limited liability  company
   41  that was acquired by the taxpayer as provided in Internal Revenue Code S
   42  1202(c)(1)(B),  except  that  the  reference to the term "stock" in such
   43  section shall be read as "investment," or by the taxpayer from a  person
   44  who had acquired such stock or interest in such a manner.
   45    (2)  A qualified emerging technology investment is a qualified invest-
   46  ment, that was held by the taxpayer for at least thirty-six months, in a
   47  company defined in paragraph (c) of subdivision one of  section  thirty-
   48  one  hundred  two-e  of the public authorities law or an investment in a
   49  partnership or limited liability company that is taxed as a  partnership
   50  to the extent that such partnership or limited liability company invests
   51  in qualified emerging technology companies.
   52    (3)  For  purposes  of  determining whether the nonrecognition of gain
   53  under this subsection  applies  to  a  qualified  emerging  technologies
   54  investment  that is sold, the taxpayer's holding period for such invest-
   55  ment  and  the  qualified  emerging  technologies  investment  that   is
       S. 6359--D                         27                         A. 8559--D

    1  purchased  shall be determined without regard to Internal Revenue Code S
    2  1223.
    3    (m)  Amounts deferred. The amount deferred under paragraph (l) of this
    4  subdivision shall be added to entire net income when the reinvestment in
    5  the New York qualified emerging technology  company  which  qualified  a
    6  taxpayer for such deferral is sold.
    7    [(n) Qualified gas transportation contracts.
    8    (1) Any tax paid under this article allocable to receipts attributable
    9  to  a  "qualified  gas  transportation contract" shall be deemed to have
   10  been paid under article nine of this chapter for all purposes of law for
   11  taxable years commencing  on  or  after  January  first,  two  thousand,
   12  computed as hereinafter provided, if all of the following conditions are
   13  met:
   14    (i)  For  periods  ending  prior  to  January first, two thousand, the
   15  taxpayer paid the franchise tax due under section  one  hundred  eighty-
   16  four of this chapter.
   17    (ii)  For  the  taxable  year,  all  of the receipts from the pipeline
   18  transportation of natural gas attributable to the taxpayer and  included
   19  in  the  taxpayer's entire net income (without regard to this paragraph)
   20  are solely from the transportation of natural gas for wholesale  custom-
   21  ers and commercial retail customers.
   22    (iii)  The  taxpayer's  franchise tax liability under this article for
   23  the taxable year (computed without regard to this paragraph)  is  deter-
   24  mined  under paragraph (a) of subdivision one of section two hundred ten
   25  of this article, and such tax liability (without regard  to  this  para-
   26  graph)  is  greater  than the liability the taxpayer would have incurred
   27  under sections one hundred eighty-three and one hundred  eighty-four  of
   28  this  chapter  (as such sections existed on December thirty-first, nine-
   29  teen hundred ninety-nine) based on the same taxable period.
   30    (iv) The taxpayer is  a  party  to  a  "qualified  gas  transportation
   31  contract," as defined herein.
   32    (2)  The provisions of this paragraph shall apply only for the taxable
   33  years during which such qualified gas transportation contract is in full
   34  force and effect, and shall apply only to the receipts of  the  taxpayer
   35  less  any  expenses of the taxpayer (but not less than zero), during the
   36  taxable year, to the extent included in entire  net  income,  which  are
   37  attributable   to  any  such  qualified  gas  transportation  contracts.
   38  Provided, further, in any event, the  characterization  hereunder  shall
   39  expire  and be of no further force and effect for taxable years commenc-
   40  ing on or after January first, two thousand fifteen.
   41    (3) The term "qualified gas  transportation  contract"  shall  mean  a
   42  service  agreement for the transportation of natural gas for an end-user
   43  which is a qualified cogeneration facility with a rated capacity of  one
   44  thousand  megawatts  or  more, which (i) was entered into before January
   45  first, two thousand, and was in full force and effect and binding on the
   46  parties thereto as of such date, (ii) as originally executed, was for  a
   47  term of at least twenty years, and (iii) the terms of which prohibit the
   48  pass-through  to  such  customer of the franchise tax imposed under this
   49  article, while allowing the recovery of the gross earnings  tax  imposed
   50  under  section one hundred eighty-four of this chapter. A contract shall
   51  not qualify as a qualified gas transportation contract if there is:  (i)
   52  any  renewal  or  extension of an otherwise qualified gas transportation
   53  contract occurring on or after January first, two thousand, or (ii)  any
   54  material amendment to, or supplementation of, an otherwise qualified gas
   55  transportation  contract on or after such date. Such renewal, extension,
   56  or material amendment or supplementation shall have the same  force  and
       S. 6359--D                         28                         A. 8559--D

    1  effect  of terminating the characterization hereunder as if the qualify-
    2  ing contract had expired by its own terms.
    3    (o)]  (N-1)  For  taxable years beginning after December thirty-first,
    4  two thousand two, in the case of qualified property described  in  para-
    5  graph  two  of subsection k of section 168 of the internal revenue code,
    6  other than qualified resurgence zone property described in paragraph (q)
    7  of this subdivision, and other than  qualified  New  York  Liberty  Zone
    8  property  described in paragraph two of subsection b of section 1400L of
    9  the internal revenue code (without regard to clause (i) of  subparagraph
   10  (C)  of  such  paragraph),  which was placed in service on or after June
   11  first, two thousand three, a taxpayer shall be allowed with  respect  to
   12  such  property the depreciation deduction allowable under section 167 of
   13  the internal revenue code as such section would  have  applied  to  such
   14  property  had  it  been acquired by the taxpayer on September tenth, two
   15  thousand one.
   16    (o) Related members expense add back.  (1)  Definitions.  (A)  Related
   17  member.  "Related  member" means a related person as defined in subpara-
   18  graph (c) of paragraph three of subsection (b) of section  four  hundred
   19  sixty-five  of  the  internal  revenue code, except that "fifty percent"
   20  shall be substituted for "ten percent".
   21    (B) Effective rate of tax. "Effective rate of tax" means,  as  to  any
   22  state  or  U.S. possession, the maximum statutory rate of tax imposed by
   23  the state or possession on or measured by a related member's net  income
   24  multiplied  by  the  apportionment percentage, if any, applicable to the
   25  related member under the laws of said jurisdiction. For purposes of this
   26  definition, the effective rate of tax as to any state or U.S. possession
   27  is zero where the related member's net  income  tax  liability  in  said
   28  jurisdiction  is reported on a combined or consolidated return including
   29  both the taxpayer and the related member where the reported transactions
   30  between the taxpayer and the related member are  eliminated  or  offset.
   31  Also, for purposes of this definition, when computing the effective rate
   32  of  tax  for  a  jurisdiction  in which a related member's net income is
   33  eliminated or offset by a credit or similar adjustment that is dependent
   34  upon the related member either maintaining or managing intangible  prop-
   35  erty  or  collecting  interest  income in that jurisdiction, the maximum
   36  statutory rate of tax imposed by said jurisdiction shall be decreased to
   37  reflect the statutory rate of tax that applies to the related member  as
   38  effectively reduced by such credit or similar adjustment.
   39    (C) Royalty payments. Royalty payments are payments directly connected
   40  to  the  acquisition,  use,  maintenance or management, ownership, sale,
   41  exchange, or any other disposition of licenses, trademarks,  copyrights,
   42  trade  names,  trade  dress,  service  marks, mask works, trade secrets,
   43  patents and any other similar types of intangible assets  as  determined
   44  by   the   commissioner,  and  include  amounts  allowable  as  interest
   45  deductions under section one hundred sixty-three of the internal revenue
   46  code to the extent such amounts are directly or indirectly for,  related
   47  to  or  in  connection with the acquisition, use, maintenance or manage-
   48  ment, ownership,  sale,  exchange  or  disposition  of  such  intangible
   49  assets.
   50    (D)  Valid  Business  Purpose. A valid business purpose is one or more
   51  business purposes, other than the avoidance or  reduction  of  taxation,
   52  which alone or in combination constitute the primary motivation for some
   53  business  activity or transaction, which activity or transaction changes
   54  in a meaningful way, apart from tax effects, the  economic  position  of
   55  the taxpayer. The economic position of the taxpayer includes an increase
       S. 6359--D                         29                         A. 8559--D

    1  in  the  market share of the taxpayer, or the entry by the taxpayer into
    2  new business markets.
    3    (2) Royalty expense add backs. (A) Except where a taxpayer is included
    4  in a combined report with a related member pursuant to [subdivision four
    5  of]  section two hundred [eleven] TEN-C of this article, for the purpose
    6  of computing entire net income or  other  applicable  taxable  basis,  a
    7  taxpayer  must  add  back  royalty payments directly or indirectly paid,
    8  accrued, or incurred in connection with one or more direct  or  indirect
    9  transactions with one or more related members during the taxable year to
   10  the extent deductible in calculating federal taxable income.
   11    (B)  Exceptions.  (i)  The adjustment required in this paragraph shall
   12  not apply to the portion of the royalty payment that the taxpayer estab-
   13  lishes, by clear and convincing evidence of the type  and  in  the  form
   14  specified  by the commissioner, meets all of the following requirements:
   15  (I) the related member was subject to tax in this state or another state
   16  or possession of the United States or a foreign nation or some  combina-
   17  tion  thereof  on  a  tax  base  that included the royalty payment paid,
   18  accrued or incurred by the taxpayer; (II) the related member during  the
   19  same  taxable year directly or indirectly paid, accrued or incurred such
   20  portion to a person that is not a related member; and (III)  the  trans-
   21  action  giving  rise to the royalty payment between the taxpayer and the
   22  related member was undertaken for a valid business purpose.
   23    (ii) The adjustment required in this paragraph shall not apply if  the
   24  taxpayer  establishes,  by clear and convincing evidence of the type and
   25  in the form specified by the commissioner, that: (I) the related  member
   26  was  subject  to  tax  on or measured by its net income in this state or
   27  another state or possession of the United  States  or  some  combination
   28  thereof;  (II)  the  tax  base for said tax included the royalty payment
   29  paid, accrued or incurred by  the  taxpayer;  and  (III)  the  aggregate
   30  effective  rate  of tax applied to the related member in those jurisdic-
   31  tions is no less than eighty percent of the statutory rate of  tax  that
   32  applied  to  the  taxpayer under section two hundred ten of this article
   33  for the taxable year.
   34    (iii) The adjustment required in this paragraph shall not apply if the
   35  taxpayer establishes, by clear and convincing evidence of the  type  and
   36  in the form specified by the commissioner, that: (I) the royalty payment
   37  was  paid,  accrued  or incurred to a related member organized under the
   38  laws of a country  other  than  the  United  States;  (II)  the  related
   39  member's  income  from  the  transaction  was subject to a comprehensive
   40  income tax treaty between such country and the United States; (III)  the
   41  related member was subject to tax in a foreign nation on a tax base that
   42  included  the royalty payment paid, accrued or incurred by the taxpayer;
   43  (IV) the related member's income from the transaction was taxed in  such
   44  country  at  an  effective rate of tax at least equal to that imposed by
   45  this state; and (V) the royalty payment was paid,  accrued  or  incurred
   46  pursuant  to  a  transaction  that  was  undertaken for a valid business
   47  purpose and using terms that reflect an arm's length relationship.
   48    (iv) The adjustment required in this paragraph shall not apply if  the
   49  taxpayer and the commissioner agree in writing to the application or use
   50  of alternative adjustments or computations. The commissioner may, in his
   51  or  her  discretion,  agree  to  the  application  or use of alternative
   52  adjustments or computations when he or she concludes that in the absence
   53  of such agreement the income of  the  taxpayer  would  not  be  properly
   54  reflected.
   55    (p) For taxable years beginning after December thirty-first, two thou-
   56  sand  two,  upon  the  disposition  of property to which paragraph [(o)]
       S. 6359--D                         30                         A. 8559--D

    1  (N-1) of this subdivision applies, the amount of any gain or loss inclu-
    2  dible in entire net income shall be adjusted to reflect  the  inclusions
    3  and exclusions from entire net income pursuant to subparagraph seventeen
    4  of  paragraph  (a)  and  subparagraph seventeen of paragraph (b) of this
    5  subdivision attributable to such property.
    6    (q) For purposes of paragraphs [(o)] (N-1) and (p)  of  this  subdivi-
    7  sion,  qualified  resurgence zone property shall mean qualified property
    8  described in paragraph two of subsection k of section 168 of the  inter-
    9  nal  revenue code substantially all of the use of which is in the resur-
   10  gence zone, as defined below, and is in the active conduct of a trade or
   11  business by the taxpayer in such zone, and the original use of which  in
   12  the  resurgence  zone commences with the taxpayer after December thirty-
   13  first, two thousand two. The resurgence zone shall mean the area of  New
   14  York county bounded on the south by a line running from the intersection
   15  of  the Hudson River with the Holland Tunnel, and running thence east to
   16  Canal Street, then running along the centerline of Canal Street  to  the
   17  intersection  of the Bowery and Canal Street, running thence in a south-
   18  easterly direction diagonally across  Manhattan  Bridge  Plaza,  to  the
   19  Manhattan Bridge and thence along the centerline of the Manhattan Bridge
   20  to  the  point where the centerline of the Manhattan Bridge would inter-
   21  sect with the easterly bank of the East River, and bounded on the  north
   22  by  a  line  running  from the intersection of the Hudson River with the
   23  Holland Tunnel and running thence north along West Avenue to the  inter-
   24  section  of  Clarkson  Street  then running east along the centerline of
   25  Clarkson Street to the intersection of Washington Avenue,  then  running
   26  south  along  the centerline of Washington Avenue to the intersection of
   27  West Houston Street, then east along  the  centerline  of  West  Houston
   28  Street,  then at the intersection of the Avenue of the Americas continu-
   29  ing east along the centerline of East Houston  Street  to  the  easterly
   30  bank of the East River.
   31    (R)  SUBTRACTION  MODIFICATION  FOR QUALIFIED RESIDENTIAL LOAN PORTFO-
   32  LIOS. (1)(A) A TAXPAYER THAT IS EITHER A THRIFT INSTITUTION  AS  DEFINED
   33  IN SUBPARAGRAPH THREE OF THIS PARAGRAPH OR A QUALIFIED COMMUNITY BANK AS
   34  DEFINED  IN  SUBPARAGRAPH  TWO  OF PARAGRAPH (S) OF THIS SUBDIVISION AND
   35  MAINTAINS A QUALIFIED RESIDENTIAL LOAN PORTFOLIO AS DEFINED IN  SUBPARA-
   36  GRAPH TWO OF THIS PARAGRAPH SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING
   37  ENTIRE NET INCOME THE AMOUNT, IF ANY, BY WHICH (I) THIRTY-TWO PERCENT OF
   38  ITS  ENTIRE  NET  INCOME  DETERMINED  WITHOUT  REGARD  TO THIS PARAGRAPH
   39  EXCEEDS (II) THE AMOUNTS DEDUCTED BY THE TAXPAYER PURSUANT  TO  SECTIONS
   40  166  AND  585  OF THE INTERNAL REVENUE CODE LESS ANY AMOUNTS INCLUDED IN
   41  FEDERAL TAXABLE INCOME AS A RESULT OF A RECOVERY OF A LOAN.
   42    (B)(I) IF THE TAXPAYER IS IN  A  COMBINED  REPORT  UNDER  SECTION  TWO
   43  HUNDRED  TEN-C  OF  THIS  ARTICLE,  THIS DEDUCTION WILL BE COMPUTED ON A
   44  COMBINED BASIS. IN THAT INSTANCE, THE ENTIRE NET INCOME OF THE  COMBINED
   45  REPORTING  GROUP FOR PURPOSES OF THIS PARAGRAPH SHALL BE MULTIPLIED BY A
   46  FRACTION, THE NUMERATOR OF WHICH IS THE AVERAGE TOTAL ASSETS OF ALL  THE
   47  THRIFT  INSTITUTIONS  AND  QUALIFIED  COMMUNITY  BANKS  INCLUDED  IN THE
   48  COMBINED REPORT AND THE DENOMINATOR OF WHICH IS THE AVERAGE TOTAL ASSETS
   49  OF ALL THE CORPORATIONS INCLUDED IN THE COMBINED REPORT.
   50    (II) MEASUREMENT OF ASSETS. (I) TOTAL ASSETS ARE THOSE ASSETS THAT ARE
   51  PROPERLY REFLECTED ON A BALANCE SHEET, COMPUTED IN THE SAME MANNER AS IS
   52  REQUIRED BY THE BANKING REGULATOR  OF  THE  TAXPAYERS  INCLUDED  IN  THE
   53  COMBINED RETURN.
   54    (II)  ASSETS  WILL ONLY BE INCLUDED IF THE INCOME OR EXPENSES OF WHICH
   55  ARE PROPERLY REFLECTED (OR WOULD HAVE BEEN  PROPERLY  REFLECTED  IF  NOT
   56  FULLY  DEPRECIATED  OR EXPENSED, OR DEPRECIATED OR EXPENSED TO A NOMINAL
       S. 6359--D                         31                         A. 8559--D

    1  AMOUNT) IN THE COMPUTATION OF THE COMBINED GROUP'S ENTIRE NET INCOME FOR
    2  THE TAXABLE YEAR. ASSETS WILL NOT INCLUDE DEFERRED TAX ASSETS AND INTAN-
    3  GIBLE ASSETS IDENTIFIED AS "GOODWILL".
    4    (III)  TANGIBLE  REAL  AND PERSONAL PROPERTY, SUCH AS BUILDINGS, LAND,
    5  MACHINERY, AND EQUIPMENT SHALL BE VALUED AT COST. LEASED ASSETS WILL  BE
    6  VALUED AT THE ANNUAL LEASE PAYMENT MULTIPLIED BY EIGHT. INTANGIBLE PROP-
    7  ERTY,  SUCH  AS  LOANS  AND  INVESTMENTS,  SHALL BE VALUED AT BOOK VALUE
    8  EXCLUSIVE OF RESERVES.
    9    (IV)  INTERCORPORATE  STOCKHOLDINGS  AND  BILLS,  NOTES  AND  ACCOUNTS
   10  RECEIVABLE,  AND  OTHER  INTERCORPORATE  INDEBTEDNESS BETWEEN THE CORPO-
   11  RATIONS INCLUDED IN THE COMBINED REPORT SHALL BE ELIMINATED.
   12    (V) AVERAGE ASSETS ARE COMPUTED USING THE ASSETS MEASURED ON THE FIRST
   13  DAY OF THE TAXABLE YEAR, AND ON THE LAST DAY OF EACH SUBSEQUENT  QUARTER
   14  OF THE TAXABLE YEAR OR MONTH OR DAY DURING THE TAXABLE YEAR.
   15    (2)  QUALIFIED  RESIDENTIAL LOAN PORTFOLIO. (A) A TAXPAYER MAINTAINS A
   16  QUALIFIED RESIDENTIAL LOAN PORTFOLIO IF AT LEAST SIXTY  PERCENT  OF  THE
   17  AMOUNT  OF  THE  TOTAL  ASSETS  AT  THE CLOSE OF THE TAXABLE YEAR OF THE
   18  THRIFT INSTITUTION OR QUALIFIED COMMUNITY BANK CONSISTS  OF  THE  ASSETS
   19  DESCRIBED  IN  ITEMS (I) THROUGH (XII) OF THIS CLAUSE, WITH THE APPLICA-
   20  TION OF THE RULE IN ITEM (XIII). IF  THE  TAXPAYER  IS  A  MEMBER  OF  A
   21  COMBINED  GROUP, THE DETERMINATION OF WHETHER THERE IS A QUALIFIED RESI-
   22  DENTIAL LOAN PORTFOLIO WILL BE MADE BY AGGREGATING  THE  ASSETS  OF  THE
   23  THRIFT  INSTITUTIONS  AND  QUALIFIED COMMUNITY BANKS THAT ARE MEMBERS OF
   24  THE COMBINED GROUP.
   25    ASSETS:
   26    (I) CASH, WHICH INCLUDES CASH  AND  CASH  EQUIVALENTS  INCLUDING  CASH
   27  ITEMS  IN THE PROCESS OF COLLECTION, DEPOSIT WITH OTHER FINANCIAL INSTI-
   28  TUTIONS,  INCLUDING  CORPORATE  CREDIT  UNIONS,  BALANCES  WITH  FEDERAL
   29  RESERVE  BANKS AND FEDERAL HOME LOAN BANKS, FEDERAL FUNDS SOLD, AND CASH
   30  AND CASH EQUIVALENTS ON HAND. CASH SHALL NOT INCLUDE ANY BALANCES  SERV-
   31  ING AS COLLATERAL FOR SECURITIES LENDING TRANSACTIONS;
   32    (II)  OBLIGATIONS  OF  THE  UNITED  STATES  OR OF A STATE OR POLITICAL
   33  SUBDIVISION THEREOF, AND STOCK OR OBLIGATIONS OF A CORPORATION WHICH  IS
   34  AN  INSTRUMENTALITY  OR  A GOVERNMENT SPONSORED ENTERPRISE OF THE UNITED
   35  STATES OR OF A STATE OR POLITICAL SUBDIVISION THEREOF;
   36    (III) LOANS SECURED BY A DEPOSIT OR SHARE OF A MEMBER;
   37    (IV) LOANS SECURED BY AN INTEREST IN REAL PROPERTY WHICH IS  (OR  FROM
   38  THE PROCEEDS OF THE LOAN, WILL BECOME) RESIDENTIAL REAL PROPERTY OR REAL
   39  PROPERTY USED PRIMARILY FOR CHURCH PURPOSES, LOANS MADE FOR THE IMPROVE-
   40  MENT  OF  RESIDENTIAL  REAL PROPERTY OR REAL PROPERTY USED PRIMARILY FOR
   41  CHURCH PURPOSES, PROVIDED THAT FOR PURPOSES OF  THIS  ITEM,  RESIDENTIAL
   42  REAL PROPERTY SHALL INCLUDE SINGLE OR MULTI-FAMILY DWELLINGS, FACILITIES
   43  IN  RESIDENTIAL DEVELOPMENTS DEDICATED TO PUBLIC USE OR PROPERTY USED ON
   44  A NONPROFIT BASIS FOR RESIDENTS, AND MOBILE HOMES NOT USED  ON  A  TRAN-
   45  SIENT BASIS;
   46    (V)  PROPERTY  ACQUIRED  THROUGH  THE  LIQUIDATION  OF DEFAULTED LOANS
   47  DESCRIBED IN ITEM (IV) OF THIS CLAUSE;
   48    (VI) ANY REGULAR OR RESIDUAL INTEREST IN A  REMIC,  AS  SUCH  TERM  IS
   49  DEFINED  IN  SECTION  860D OF THE INTERNAL REVENUE CODE, BUT ONLY IN THE
   50  PROPORTION WHICH THE ASSETS OF SUCH REMIC CONSIST OF PROPERTY  DESCRIBED
   51  IN ANY OF THE PRECEDING ITEMS OF THIS CLAUSE, EXCEPT THAT IF NINETY-FIVE
   52  PERCENT  OR  MORE  OF  THE  ASSETS OF SUCH REMIC ARE ASSETS DESCRIBED IN
   53  ITEMS (I) THROUGH (V) OF THIS CLAUSE, THE ENTIRE INTEREST IN  THE  REMIC
   54  SHALL QUALIFY;
   55    (VII)  ANY  MORTGAGE-BACKED  SECURITY  WHICH REPRESENTS OWNERSHIP OF A
   56  FRACTIONAL UNDIVIDED INTEREST IN A TRUST, THE ASSETS  OF  WHICH  CONSIST
       S. 6359--D                         32                         A. 8559--D

    1  PRIMARILY  OF  MORTGAGE  LOANS,  PROVIDED  THAT  THE REAL PROPERTY WHICH
    2  SERVES AS SECURITY FOR THE LOANS IS (OR FROM THE PROCEEDS OF  THE  LOAN,
    3  WILL  BECOME) THE TYPE OF PROPERTY DESCRIBED IN ITEM (IV) OF THIS CLAUSE
    4  AND  ANY  COLLATERALIZED  MORTGAGE  OBLIGATION,  THE  SECURITY FOR WHICH
    5  CONSISTS PRIMARILY OF MORTGAGE LOANS THAT MAINTAIN AS SECURITY THE  TYPE
    6  OF PROPERTY DESCRIBED IN ITEM (IV) OF THIS CLAUSE;
    7    (VIII)  CERTIFICATES  OF  DEPOSIT IN, OR OBLIGATIONS OF, A CORPORATION
    8  ORGANIZED UNDER A STATE LAW WHICH SPECIFICALLY  AUTHORIZES  SUCH  CORPO-
    9  RATION TO INSURE THE DEPOSITS OR SHARE ACCOUNTS OF MEMBER ASSOCIATIONS;
   10    (IX)  LOANS  SECURED BY AN INTEREST IN EDUCATIONAL, HEALTH, OR WELFARE
   11  INSTITUTIONS OR FACILITIES, INCLUDING STRUCTURES DESIGNED OR USED PRIMA-
   12  RILY FOR RESIDENTIAL PURPOSES FOR STUDENTS, RESIDENTS, AND PERSONS UNDER
   13  CARE, EMPLOYEES, OR MEMBERS OF THE STAFF OF SUCH INSTITUTIONS OR FACILI-
   14  TIES;
   15    (X) LOANS MADE FOR THE PAYMENT OF EXPENSES OF  COLLEGE  OR  UNIVERSITY
   16  EDUCATION OR VOCATIONAL TRAINING;
   17    (XI)  PROPERTY  USED  BY  THE  TAXPAYER  IN  SUPPORT OF BUSINESS WHICH
   18  CONSISTS PRINCIPALLY OF ACQUIRING THE SAVINGS OF THE PUBLIC AND  INVEST-
   19  ING IN LOANS; AND
   20    (XII) LOANS FOR WHICH THE TAXPAYER IS THE CREDITOR AND WHICH ARE WHOL-
   21  LY SECURED BY LOANS DESCRIBED IN ITEM (IV) OF THIS CLAUSE.
   22    (XIII)  THE  VALUE OF ACCRUED INTEREST RECEIVABLE AND ANY LOSS-SHARING
   23  COMMITMENT OR OTHER LOAN GUARANTY  BY  A  GOVERNMENTAL  AGENCY  WILL  BE
   24  CONSIDERED  PART OF THE BASIS IN THE LOANS TO WHICH THE ACCRUED INTEREST
   25  OR LOSS PROTECTION APPLIES.
   26    (B) AT THE ELECTION OF  THE  TAXPAYER,  THE  PERCENTAGE  SPECIFIED  IN
   27  CLAUSE  (A)  OF  THIS  SUBPARAGRAPH SHALL BE APPLIED ON THE BASIS OF THE
   28  AVERAGE ASSETS OUTSTANDING DURING THE TAXABLE YEAR, IN LIEU OF THE CLOSE
   29  OF THE TAXABLE YEAR. THE TAXPAYER CAN ELECT TO COMPUTE AN AVERAGE  USING
   30  THE ASSETS MEASURED ON THE FIRST DAY OF THE TAXABLE YEAR AND ON THE LAST
   31  DAY OF EACH SUBSEQUENT QUARTER, OR MONTH OR DAY DURING THE TAXABLE YEAR.
   32  THIS ELECTION MAY BE MADE ANNUALLY.
   33    (C) FOR PURPOSES OF ITEM (IV) OF CLAUSE (A) OF THIS SUBPARAGRAPH, IF A
   34  MULTIFAMILY STRUCTURE SECURING A LOAN IS USED IN PART FOR NONRESIDENTIAL
   35  USE PURPOSES, THE ENTIRE LOAN IS DEEMED A RESIDENTIAL REAL PROPERTY LOAN
   36  IF  THE PLANNED RESIDENTIAL USE EXCEEDS EIGHTY PERCENT OF THE PROPERTY'S
   37  PLANNED USE (MEASURED, AT  THE  TAXPAYER'S  ELECTION,  BY  USING  SQUARE
   38  FOOTAGE  OR GROSS RENTAL REVENUE, AND DETERMINED AS OF THE TIME THE LOAN
   39  IS MADE).
   40    (D) FOR PURPOSES OF ITEM (IV) OF  CLAUSE  (A)  OF  THIS  SUBPARAGRAPH,
   41  LOANS  MADE  TO  FINANCE THE ACQUISITION OR DEVELOPMENT OF LAND SHALL BE
   42  DEEMED TO BE LOANS SECURED BY AN INTEREST IN RESIDENTIAL  REAL  PROPERTY
   43  IF  THERE  IS A REASONABLE ASSURANCE THAT THE PROPERTY WILL BECOME RESI-
   44  DENTIAL REAL PROPERTY WITHIN A PERIOD OF THREE YEARS FROM  THE  DATE  OF
   45  ACQUISITION  OF  SUCH  LAND;  BUT  THIS SENTENCE SHALL NOT APPLY FOR ANY
   46  TAXABLE YEAR UNLESS, WITHIN SUCH THREE YEAR PERIOD,  SUCH  LAND  BECOMES
   47  RESIDENTIAL  REAL  PROPERTY.  FOR  PURPOSES  OF  DETERMINING WHETHER ANY
   48  INTEREST IN A REMIC QUALIFIES UNDER ITEM (VI)  OF  CLAUSE  (A)  OF  THIS
   49  SUBPARAGRAPH,  ANY  REGULAR INTEREST IN ANOTHER REMIC HELD BY SUCH REMIC
   50  SHALL BE TREATED AS A LOAN DESCRIBED IN A PRECEDING ITEM  UNDER  PRINCI-
   51  PLES  SIMILAR  TO  THE  PRINCIPLE OF SUCH ITEM (VI), EXCEPT THAT IS SUCH
   52  REMICS ARE PART OF A TIERED STRUCTURE, THEY  SHALL  BE  TREATED  AS  ONE
   53  REMIC FOR PURPOSES OF SUCH ITEM (VI).
   54    (3)  FOR  PURPOSES  OF  THIS  PARAGRAPH,  A  "THRIFT INSTITUTION" IS A
   55  SAVINGS BANK, A SAVINGS AND LOAN ASSOCIATION, OR OTHER SAVINGS  INSTITU-
   56  TION CHARTERED AND SUPERVISED AS SUCH UNDER FEDERAL OR STATE LAW.
       S. 6359--D                         33                         A. 8559--D

    1    (S)  SUBTRACTION  MODIFICATION  FOR COMMUNITY BANKS AND SMALL THRIFTS.
    2  (1) A TAXPAYER THAT IS A QUALIFIED COMMUNITY BANK AS DEFINED IN SUBPARA-
    3  GRAPH TWO OF THIS PARAGRAPH OR A SMALL THRIFT INSTITUTION AS DEFINED  IN
    4  SUBPARAGRAPH  TWO-A  OF  THIS  PARAGRAPH SHALL BE ALLOWED A DEDUCTION IN
    5  COMPUTING  ENTIRE NET INCOME EQUAL TO THE AMOUNT COMPUTED UNDER SUBPARA-
    6  GRAPH THREE OF THIS PARAGRAPH.
    7    (2) TO BE A QUALIFIED COMMUNITY BANK,  A  TAXPAYER  MUST  SATISFY  THE
    8  FOLLOWING CONDITIONS.
    9    (A)  IT  IS  A BANK OR TRUST COMPANY ORGANIZED UNDER OR SUBJECT TO THE
   10  PROVISIONS OF ARTICLE THREE OF THE BANKING LAW OR A COMPARABLE PROVISION
   11  OF THE LAWS OF ANOTHER STATE, OR A NATIONAL BANKING ASSOCIATION.
   12    (B) THE AVERAGE VALUE DURING THE TAXABLE YEAR OF  THE  ASSETS  OF  THE
   13  TAXPAYER,  OR THE ASSETS OF THE COMBINED REPORTING GROUP OF THE TAXPAYER
   14  UNDER SECTION TWO HUNDRED TEN-C OF THIS ARTICLE, MUST NOT  EXCEED  EIGHT
   15  BILLION DOLLARS.
   16    (2-A)  TO  BE  A SMALL THRIFT INSTITUTION, A TAXPAYER MUST SATISFY THE
   17  FOLLOWING CONDITIONS.
   18    (A) IT IS A SAVINGS BANK, A SAVINGS AND  LOAN  ASSOCIATION,  OR  OTHER
   19  SAVINGS  INSTITUTION  CHARTERED  AND SUPERVISED AS SUCH UNDER FEDERAL OR
   20  STATE LAW.
   21    (B) THE AVERAGE VALUE DURING THE TAXABLE YEAR OF  THE  ASSETS  OF  THE
   22  TAXPAYER,  OR THE ASSETS OF THE COMBINED REPORTING GROUP OF THE TAXPAYER
   23  UNDER SECTION TWO HUNDRED TEN-C OF THIS ARTICLE, MUST NOT  EXCEED  EIGHT
   24  BILLION DOLLARS.
   25    (3)(A) THE SUBTRACTION MODIFICATION SHALL BE COMPUTED AS FOLLOWS:
   26    (I)  MULTIPLY THE TAXPAYER'S NET INTEREST INCOME FROM LOANS DURING THE
   27  TAXABLE YEAR BY A FRACTION, THE NUMERATOR OF WHICH IS THE GROSS INTEREST
   28  INCOME DURING THE TAXABLE YEAR FROM QUALIFYING LOANS AND THE DENOMINATOR
   29  OF WHICH IS THE GROSS INTEREST INCOME DURING THE TAXABLE YEAR  FROM  ALL
   30  LOANS.
   31    (II)  MULTIPLY  THE  AMOUNT DETERMINED IN CLAUSE (I) BY FIFTY PERCENT.
   32  THIS PRODUCT IS THE AMOUNT OF THE DEDUCTION  ALLOWED  UNDER  THIS  PARA-
   33  GRAPH.
   34    (B)(I) NET INTEREST INCOME FROM LOANS SHALL MEAN GROSS INTEREST INCOME
   35  FROM  LOANS  LESS  GROSS  INTEREST  EXPENSE  FROM  LOANS. GROSS INTEREST
   36  EXPENSE FROM LOANS IS DETERMINED BY MULTIPLYING GROSS  INTEREST  EXPENSE
   37  BY  A  FRACTION,  THE  NUMERATOR  OF WHICH IS THE AVERAGE TOTAL VALUE OF
   38  LOANS OWNED BY THE THRIFT INSTITUTION OR COMMUNITY BANK DURING THE TAXA-
   39  BLE YEAR AND THE DENOMINATOR OF WHICH IS THE AVERAGE TOTAL ASSETS OF THE
   40  THRIFT INSTITUTION OR COMMUNITY BANK DURING THE TAXABLE YEAR.
   41    (II) MEASUREMENT OF ASSETS. (I) TOTAL ASSETS ARE THOSE ASSETS THAT ARE
   42  PROPERLY REFLECTED ON A BALANCE SHEET, COMPUTED IN THE SAME MANNER AS IS
   43  REQUIRED BY THE BANKING REGULATOR  OF  THE  TAXPAYERS  INCLUDED  IN  THE
   44  COMBINED RETURN.
   45    (II)  ASSETS  WILL ONLY BE INCLUDED IF THE INCOME OR EXPENSES OF WHICH
   46  ARE PROPERLY REFLECTED (OR WOULD HAVE BEEN  PROPERLY  REFLECTED  IF  NOT
   47  FULLY  DEPRECIATED  OR EXPENSED, OR DEPRECIATED OR EXPENSED TO A NOMINAL
   48  AMOUNT) IN THE COMPUTATION OF THE TAXPAYER'S ENTIRE NET INCOME  FOR  THE
   49  TAXABLE YEAR. ASSETS WILL NOT INCLUDE DEFERRED TAX ASSETS AND INTANGIBLE
   50  ASSETS IDENTIFIED AS "GOODWILL".
   51    (III)  TANGIBLE  REAL  AND PERSONAL PROPERTY, SUCH AS BUILDINGS, LAND,
   52  MACHINERY, AND EQUIPMENT SHALL BE VALUED AT COST. LEASED ASSETS WILL  BE
   53  VALUED    AT  THE  ANNUAL  LEASE PAYMENT MULTIPLIED BY EIGHT. INTANGIBLE
   54  PROPERTY, SUCH AS LOANS AND INVESTMENTS, SHALL BE VALUED AT  BOOK  VALUE
   55  EXCLUSIVE OF RESERVES.
       S. 6359--D                         34                         A. 8559--D

    1    (IV)  AVERAGE  ASSETS  ARE  COMPUTED  USING THE ASSETS MEASURED ON THE
    2  FIRST DAY OF THE TAXABLE YEAR, AND ON THE LAST DAY  OF  EACH  SUBSEQUENT
    3  QUARTER OF THE TAXABLE YEAR OR MONTH OR DAY DURING THE TAXABLE YEAR.
    4    (C) A QUALIFYING LOAN IS A LOAN THAT MEETS THE CONDITIONS SPECIFIED IN
    5  SUBCLAUSE (I) OF THIS CLAUSE AND SUBCLAUSE (II) OF THIS CLAUSE.
    6    (I)  THE  LOAN  IS ORIGINATED BY THE QUALIFIED COMMUNITY BANK OR SMALL
    7  THRIFT INSTITUTION OR PURCHASED BY THE QUALIFIED COMMUNITY BANK OR SMALL
    8  THRIFT INSTITUTION IMMEDIATELY AFTER ITS ORIGINATION IN CONNECTION  WITH
    9  A COMMITMENT TO PURCHASE MADE BY THE BANK OR THRIFT INSTITUTION PRIOR TO
   10  THE LOAN'S ORIGINATION.
   11    (II) THE LOAN IS A SMALL BUSINESS LOAN OR A RESIDENTIAL MORTGAGE LOAN,
   12  THE  PRINCIPAL AMOUNT OF WHICH LOAN IS FIVE MILLION DOLLARS OR LESS, AND
   13  EITHER THE BORROWER IS LOCATED IN THIS STATE AS DETERMINED UNDER SECTION
   14  TWO HUNDRED TEN-A OF THIS ARTICLE AND THE LOAN IS NOT  SECURED  BY  REAL
   15  PROPERTY, OR THE LOAN IS SECURED BY REAL PROPERTY LOCATED IN NEW YORK.
   16    (III) A LOAN THAT MEETS THE DEFINITION OF A QUALIFYING LOAN IN A PRIOR
   17  TAXABLE  YEAR (INCLUDING YEARS PRIOR TO THE EFFECTIVE DATE OF THIS PARA-
   18  GRAPH) REMAINS A QUALIFYING LOAN IN TAXABLE YEARS DURING AND AFTER WHICH
   19  SUCH LOAN IS ACQUIRED BY ANOTHER CORPORATION IN THE TAXPAYER'S  COMBINED
   20  REPORTING GROUP UNDER SECTION TWO HUNDRED TEN-C OF THIS ARTICLE.
   21    (T)  A  SMALL  THRIFT  INSTITUTION  OR  A QUALIFIED COMMUNITY BANK, AS
   22  DEFINED IN PARAGRAPH (S) OF THIS SUBDIVISION, THAT MAINTAINED A  CAPTIVE
   23  REIT  ON  APRIL  FIRST,  TWO  THOUSAND  FOURTEEN  SHALL  UTILIZE  A REIT
   24  SUBTRACTION EQUAL TO ONE HUNDRED SIXTY PERCENT  OF  THE  DIVIDENDS  PAID
   25  DEDUCTIONS ALLOWED TO THAT CAPTIVE REIT FOR THE TAXABLE YEAR FOR FEDERAL
   26  INCOME  TAX PURPOSES AND SHALL NOT BE ALLOWED TO UTILIZE THE SUBTRACTION
   27  MODIFICATION FOR QUALIFIED RESIDENTIAL LOAN PORTFOLIOS  UNDER  PARAGRAPH
   28  (R)  OF  THIS  SUBDIVISION OR THE SUBTRACTION MODIFICATION FOR COMMUNITY
   29  BANKS AND SMALL THRIFTS UNDER PARAGRAPH (S) OF THIS SUBDIVISION  IN  ANY
   30  TAX  YEAR  IN  WHICH SUCH THRIFT INSTITUTION OR COMMUNITY BANK MAINTAINS
   31  THAT CAPTIVE REIT.
   32    10. The term "calendar year" means a period of twelve calendar  months
   33  (or  any  shorter  period  beginning  on  the  date the taxpayer becomes
   34  subject to the tax imposed by this article) ending on  the  thirty-first
   35  day  of  December, provided the taxpayer keeps its books on the basis of
   36  such period or on the basis of any period ending on any day  other  than
   37  the last day of a calendar month, or provided the taxpayer does not keep
   38  books,  and  includes,  in  case  the taxpayer changes the period on the
   39  basis of which it keeps its books from a fiscal year to a calendar year,
   40  the period from the close of its last old fiscal year up to and  includ-
   41  ing  the following December thirty-first. The term "fiscal year" means a
   42  period of twelve calendar months (or any shorter period beginning on the
   43  date the taxpayer becomes subject to the tax imposed  by  this  article)
   44  ending  on  the  last day of any month other than December, provided the
   45  taxpayer keeps its books on the basis of such period, and  includes,  in
   46  case  the  taxpayer changes the period on the basis of which it keeps it
   47  books from a calendar year to a fiscal year or from one fiscal  year  to
   48  another  fiscal year, the period from the close of its last old calendar
   49  or fiscal year up to the date designated as the close of its new  fiscal
   50  year.
   51    11.  The  term  "tangible  personal property" means corporeal personal
   52  property,  such  as  machinery,  tools,  implements,  goods,  wares  and
   53  merchandise,  and  does  not  mean  money,  deposits in banks, shares of
   54  stock, bonds, notes, credits or evidences of an interest in property and
   55  evidences of debt.
       S. 6359--D                         35                         A. 8559--D

    1    12. The term elected or appointed officer shall include the  chairman,
    2  president,  vice-president,  secretary,  assistant secretary, treasurer,
    3  assistant treasurer, comptroller, and also any other officer,  irrespec-
    4  tive  of  his title, who is charged with and performs any of the regular
    5  functions  of  any  such  officer, unless the total compensation of such
    6  officer is derived exclusively from the receipt of commissions. A direc-
    7  tor shall be considered an elected  or  appointed  officer  only  if  he
    8  performs duties ordinarily performed by an officer.
    9    [19.  The  term "fulfillment services" shall mean any of the following
   10  services performed by an entity on its premises on behalf of a  purchas-
   11  er:
   12    (a)  the  acceptance  of  orders electronically or by mail, telephone,
   13  telefax or internet;
   14    (b) responses to consumer correspondence or  inquiries  electronically
   15  or by mail, telephone, telefax or internet;
   16    (c) billing and collection activities; or
   17    (d)  the  shipment of orders from an inventory of products offered for
   18  sale by the purchaser.]
   19    S 5. Subdivisions 1, 2, 2-a, 4, 5, 6, 7 and 8 of section  209  of  the
   20  tax  law,  subdivisions 1 and 6 as amended by chapter 817 of the laws of
   21  1987, subdivision 2 as amended by chapter 75 of the laws of 1998, subdi-
   22  vision 2-a as added by chapter 340 of the laws of 1998, subdivision 4 as
   23  amended by section 27 of part S of this act, subdivisions  5  and  7  as
   24  amended by section 2 of part FF-1 of chapter 57 of the laws of 2008, and
   25  subdivision  8 as added by section 1 of part O of chapter 61 of the laws
   26  of 2006, are amended to read as follows:
   27    1. (A) For the privilege of exercising its corporate franchise, or  of
   28  doing business, or of employing capital, or of owning or leasing proper-
   29  ty in this state in a corporate or organized capacity, or of maintaining
   30  an  office  in this state, OR OF DERIVING RECEIPTS FROM ACTIVITY IN THIS
   31  STATE, for all or any part of each of  its  fiscal  or  calendar  years,
   32  every  domestic or foreign corporation, except corporations specified in
   33  subdivision four of this section, shall annually pay  a  franchise  tax,
   34  upon  the  basis  of its [entire net] BUSINESS income base, or upon such
   35  other basis as may be  applicable  as  hereinafter  provided,  for  such
   36  fiscal  or  calendar  year  or  part thereof, on a report which shall be
   37  filed, except as hereinafter provided, on or before the fifteenth day of
   38  March next succeeding the close of each such year, or, in the case of  a
   39  corporation  which reports on the basis of a fiscal year, within two and
   40  one-half months after the close of such fiscal year, and shall  be  paid
   41  as hereinafter provided.
   42    (B)  A CORPORATION IS DERIVING RECEIPTS FROM ACTIVITY IN THIS STATE IF
   43  IT HAS RECEIPTS WITHIN THIS STATE OF ONE MILLION DOLLARS OR MORE IN  THE
   44  TAXABLE  YEAR.  FOR  PURPOSES OF THIS SECTION, THE TERM "RECEIPTS" MEANS
   45  THE RECEIPTS THAT ARE SUBJECT TO THE APPORTIONMENT RULES  SET  FORTH  IN
   46  SECTION TWO HUNDRED TEN-A OF THIS ARTICLE, AND THE TERM "RECEIPTS WITHIN
   47  THIS  STATE"  MEANS THE RECEIPTS INCLUDED IN THE NUMERATOR OF THE APPOR-
   48  TIONMENT FACTOR DETERMINED UNDER SECTION TWO HUNDRED TEN-A OF THIS ARTI-
   49  CLE. FOR PURPOSES OF THIS PARAGRAPH,  RECEIPTS  FROM  PROCESSING  CREDIT
   50  CARD  TRANSACTIONS FOR MERCHANTS INCLUDE MERCHANT DISCOUNT FEES RECEIVED
   51  BY THE CORPORATION.
   52    (C) A CORPORATION IS DOING BUSINESS IN THIS STATE IF (I) IT HAS ISSUED
   53  CREDIT CARDS TO ONE THOUSAND  OR  MORE  CUSTOMERS  WHO  HAVE  A  MAILING
   54  ADDRESS  WITHIN  THIS STATE AS OF THE LAST DAY OF ITS TAXABLE YEAR, (II)
   55  IT HAS MERCHANT CUSTOMER CONTRACTS WITH MERCHANTS AND THE  TOTAL  NUMBER
   56  OF  LOCATIONS  COVERED  BY  THOSE  CONTRACTS EQUALS ONE THOUSAND OR MORE
       S. 6359--D                         36                         A. 8559--D

    1  LOCATIONS IN THIS STATE TO WHOM THE CORPORATION  REMITTED  PAYMENTS  FOR
    2  CREDIT  CARD  TRANSACTIONS  DURING THE TAXABLE YEAR, OR (III) THE SUM OF
    3  THE NUMBER OF CUSTOMERS DESCRIBED IN SUBPARAGRAPH (I) OF THIS  PARAGRAPH
    4  PLUS  THE  NUMBER  OF  LOCATIONS  COVERED  BY ITS CONTRACTS DESCRIBED IN
    5  SUBPARAGRAPH (II) OF THIS PARAGRAPH EQUALS ONE THOUSAND OR MORE. AS USED
    6  IN THIS SUBDIVISION, THE TERM "CREDIT CARD" INCLUDES BANK, CREDIT, TRAV-
    7  EL AND ENTERTAINMENT CARDS.
    8    (D)(I) A CORPORATION WITH LESS THAN ONE MILLION DOLLARS BUT  AT  LEAST
    9  TEN  THOUSAND  DOLLARS  OF  RECEIPTS WITHIN THIS STATE IN A TAXABLE YEAR
   10  THAT IS PART OF A COMBINED REPORTING GROUP  UNDER  SECTION  TWO  HUNDRED
   11  TEN-C  OF  THIS ARTICLE IS DERIVING RECEIPTS FROM ACTIVITY IN THIS STATE
   12  IF THE RECEIPTS WITHIN THIS STATE OF THE MEMBERS OF THE COMBINED REPORT-
   13  ING GROUP THAT HAVE AT LEAST TEN THOUSAND  DOLLARS  OF  RECEIPTS  WITHIN
   14  THIS  STATE  IN  THE AGGREGATE MEET THE THRESHOLD SET FORTH IN PARAGRAPH
   15  (B) OF THIS SUBDIVISION.
   16    (II) A CORPORATION THAT DOES NOT MEET ANY OF THE THRESHOLDS SET  FORTH
   17  IN  PARAGRAPH (C) OF THIS SUBDIVISION BUT HAS AT LEAST TEN CUSTOMERS, OR
   18  LOCATIONS, OR CUSTOMERS AND LOCATIONS, AS DESCRIBED IN PARAGRAPH (C)  OF
   19  THIS  SUBDIVISION,  AND  IS  PART  OF  A  COMBINED REPORTING GROUP UNDER
   20  SECTION TWO HUNDRED TEN-C OF THIS ARTICLE THAT IS DOING BUSINESS IN THIS
   21  STATE IF THE NUMBER OF CUSTOMERS, LOCATIONS, OR CUSTOMERS AND LOCATIONS,
   22  WITHIN THIS STATE OF THE MEMBERS OF THE COMBINED  REPORTING  GROUP  THAT
   23  HAVE  AT  LEAST  TEN  CUSTOMERS,  LOCATIONS, OR CUSTOMERS AND LOCATIONS,
   24  WITHIN THIS STATE IN THE AGGREGATE MEETS ANY OF THE THRESHOLDS SET FORTH
   25  IN PARAGRAPH (C) OF THIS SUBDIVISION.
   26    (E) AT THE END OF EACH YEAR, THE COMMISSIONER SHALL REVIEW THE CUMULA-
   27  TIVE PERCENTAGE CHANGE IN THE CONSUMER  PRICE  INDEX.  THE  COMMISSIONER
   28  SHALL ADJUST THE RECEIPT THRESHOLDS SET FORTH IN THIS SUBDIVISION IF THE
   29  CONSUMER  PRICE  INDEX  HAS CHANGED BY TEN PERCENT OR MORE SINCE JANUARY
   30  FIRST, TWO THOUSAND FIFTEEN, OR SINCE THE DATE THAT THE THRESHOLDS  WERE
   31  LAST  ADJUSTED  UNDER THIS SUBDIVISION. THE THRESHOLDS SHALL BE ADJUSTED
   32  TO REFLECT THAT CUMULATIVE  PERCENTAGE  CHANGE  IN  THE  CONSUMER  PRICE
   33  INDEX. THE ADJUSTED THRESHOLDS SHALL BE ROUNDED TO THE NEAREST ONE THOU-
   34  SAND  DOLLARS.  AS  USED IN THIS PARAGRAPH, "CONSUMER PRICE INDEX" MEANS
   35  THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS (CPI-U) AVAILABLE  FORM
   36  THE BUREAU OF LABOR STATISTICS OF THE UNITED STATES DEPARTMENT OF LABOR.
   37  ANY  ADJUSTMENT  SHALL APPLY TO TAX PERIODS THAT BEGIN AFTER THE ADJUST-
   38  MENT IS MADE.
   39    (F) IF A PARTNERSHIP IS DOING BUSINESS, EMPLOYING CAPITAL,  OWNING  OR
   40  LEASING  PROPERTY  IN THIS STATE, MAINTAINING AN OFFICE IN THE STATE, OR
   41  DERIVING RECEIPTS FROM ACTIVITY IN THIS STATE, ANY CORPORATION THAT IS A
   42  PARTNER IN SUCH PARTNERSHIP SHALL BE SUBJECT TO TAX UNDER  THIS  ARTICLE
   43  AS DESCRIBED IN THE REGULATIONS OF THE COMMISSIONER.
   44    2.  A  foreign  corporation  shall not be deemed to be doing business,
   45  employing capital, owning or leasing property, or maintaining an  office
   46  in this state, OR DERIVING RECEIPTS FROM ACTIVITY IN THIS STATE, for the
   47  purposes  of  this  article,  by  reason  of (a) the maintenance of cash
   48  balances with banks or trust companies in this state, or (b) the  owner-
   49  ship  of  shares of stock or securities kept in this state, if kept in a
   50  safe deposit box,  safe,  vault  or  other  receptacle  rented  for  the
   51  purpose,  or if pledged as collateral security, or if deposited with one
   52  or more banks or trust companies, or brokers who are members of a recog-
   53  nized security exchange, in safekeeping or custody accounts, or (c)  the
   54  taking  of any action by any such bank or trust company or broker, which
   55  is incidental to the rendering of safekeeping or  custodian  service  to
   56  such  corporation,  or (d) the maintenance of an office in this state by
       S. 6359--D                         37                         A. 8559--D

    1  one or more officers or directors of the corporation who are not employ-
    2  ees of the corporation if the corporation otherwise is not  doing  busi-
    3  ness in this state, and does not employ capital or own or lease property
    4  in  this  state, or (e) the keeping of books or records of a corporation
    5  in this state if such books or records are not kept by employees of such
    6  corporation and such corporation does not otherwise do business,  employ
    7  capital,  own  or lease property or maintain an office in this state, or
    8  (f) [the use of fulfillment services of a person other  than  an  affil-
    9  iated  person  and  the  ownership of property stored on the premises of
   10  such person in conjunction with such services, or (g)]  any  combination
   11  of  the foregoing activities. [For purposes of this subdivision, persons
   12  are affiliated persons with respect to each  other  where  one  of  such
   13  persons  has  an  ownership  interest of more than five percent, whether
   14  direct or indirect, in the other, or where an ownership interest of more
   15  than five percent, whether direct or indirect, is held in each  of  such
   16  persons  by  another  person  or  by  a group of other persons which are
   17  affiliated persons with respect to each other. The term "person" in  the
   18  preceding  sentence  and in paragraph (f) of this subdivision shall have
   19  the meaning ascribed  thereto  by  subdivision  (a)  of  section  eleven
   20  hundred one of this chapter.]
   21    2-a.  An  alien  corporation shall not be deemed to be doing business,
   22  employing capital, owning or leasing property, or maintaining an  office
   23  in  this  state,  for the purposes of this article, if its activities in
   24  this state are limited solely to (a) investing or trading in stocks  and
   25  securities  for  its  own  account  within the meaning of clause (ii) of
   26  subparagraph (A) of paragraph (2) of subsection  (b)  of  section  eight
   27  hundred  sixty-four  of  the  internal  revenue code or (b) investing or
   28  trading in commodities for its own account within the meaning of  clause
   29  (ii)  of  subparagraph (B) of paragraph (2) of subsection (b) of section
   30  eight hundred sixty-four of the internal revenue code or (c) any  combi-
   31  nation  of activities described in paragraphs (a) and (b) of this subdi-
   32  vision.  AN ALIEN CORPORATION THAT UNDER ANY PROVISION OF  THE  INTERNAL
   33  REVENUE  CODE  IS  NOT TREATED AS A "DOMESTIC CORPORATION" AS DEFINED IN
   34  SECTION SEVEN THOUSAND SEVEN HUNDRED ONE OF SUCH CODE AND HAS NO  EFFEC-
   35  TIVELY  CONNECTED INCOME FOR THE TAXABLE YEAR PURSUANT TO CLAUSE (IV) OF
   36  THE OPENING PARAGRAPH OF SUBDIVISION NINE OF SECTION TWO  HUNDRED  EIGHT
   37  OF  THIS ARTICLE SHALL NOT BE SUBJECT TO TAX UNDER THIS ARTICLE FOR THAT
   38  TAXABLE YEAR. For purposes  of  this  [subdivision]  ARTICLE,  an  alien
   39  corporation  is  a corporation organized under the laws of a country, or
   40  any political subdivision thereof, other  than  the  United  States,  OR
   41  ORGANIZED  UNDER  THE LAWS OF A POSSESSION, TERRITORY OR COMMONWEALTH OF
   42  THE UNITED STATES.
   43    4. Corporations liable to tax under sections one hundred  eighty-three
   44  to  one  hundred  eighty-four-a,  inclusive,  corporations taxable under
   45  [articles thirty-two and] ARTICLE  thirty-three  of  this  chapter,  any
   46  trust  company  organized  under a law of this state all of the stock of
   47  which is owned by not less than twenty savings banks organized  under  a
   48  law  of  this state, [bank holding companies filing a combined return in
   49  accordance with subsection (f) of section fourteen hundred sixty-two  of
   50  this  chapter,] a captive REIT or a captive RIC filing a combined return
   51  under [either subsection (f) of section fourteen hundred  sixty-two  or]
   52  subdivision  (f) of section fifteen hundred fifteen of this chapter, and
   53  housing companies organized and operating pursuant to the provisions  of
   54  article two or article five of the private housing finance law and hous-
   55  ing  development  fund companies organized pursuant to the provisions of
       S. 6359--D                         38                         A. 8559--D

    1  article eleven of the private housing finance law shall not  be  subject
    2  to tax under this article.
    3    5.  For  any taxable year of a real estate investment trust as defined
    4  in section eight hundred fifty-six of the internal revenue code in which
    5  such trust is subject to federal income  taxation  under  section  eight
    6  hundred  fifty-seven  of such code, such trust shall be subject to a tax
    7  computed under either paragraph (a) [, (c)] or (d) of subdivision one of
    8  section two  hundred  ten  of  this  chapter,  whichever  is  [greatest]
    9  GREATER,  and  shall not be subject to any tax under article [thirty-two
   10  or article] thirty-three of this  chapter  except  for  a  captive  REIT
   11  required  to  file  a  combined return under [subdivision (f) of section
   12  fourteen hundred  sixty-two  or]  subdivision  (f)  of  section  fifteen
   13  hundred  fifteen  of  this  chapter.  In  the case of such a real estate
   14  investment trust, including a captive REIT as defined in section two  of
   15  this chapter, the term "entire net income" means "real estate investment
   16  trust  taxable income" as defined in paragraph two of subdivision (b) of
   17  section eight hundred fifty-seven (as modified by section eight  hundred
   18  fifty-eight)  of the internal revenue code plus the amount taxable under
   19  paragraph three of subdivision (b) of section eight hundred  fifty-seven
   20  of  such  code,  subject to the [modification] MODIFICATIONS required by
   21  subdivision nine of section two hundred eight of  this  article  [(other
   22  than  the  modification  required  by  subparagraph two of paragraph (a)
   23  thereof) including the modifications required by paragraphs (d) and  (e)
   24  of subdivision three of section two hundred ten of this article].
   25    6. For any taxable year of a DISC, not exempt from tax under paragraph
   26  (i)  of  subdivision  nine of section two hundred eight of this article,
   27  the taxes imposed by subdivision one of this section shall  be  computed
   28  only under either paragraph (b) or (d) of subdivision one of section two
   29  hundred ten of this chapter, whichever is greater[, and paragraph (e) of
   30  such subdivision].
   31    7. For any taxable year, beginning on or after January first, nineteen
   32  hundred  eighty of a regulated investment company, as defined in section
   33  eight hundred fifty-one of the internal  revenue  code,  in  which  such
   34  company  is  subject  to  federal  income  taxation  under section eight
   35  hundred fifty-two of such code, such company shall be subject to  a  tax
   36  computed  under either paragraph (a)[, (c)] or (d) of subdivision one of
   37  section two  hundred  ten  of  this  chapter,  whichever  is  [greatest]
   38  GREATER,  and  shall not be subject to any tax under article [thirty-two
   39  or article] thirty-three of  this  chapter  except  for  a  captive  RIC
   40  required  to  file  a  combined return under [subdivision (f) of section
   41  fourteen hundred  sixty-two  or]  subdivision  (f)  of  section  fifteen
   42  hundred fifteen of this chapter. In the case of such a regulated invest-
   43  ment  company, including a captive RIC as defined in section two of this
   44  chapter, the term "entire net income" means "investment company  taxable
   45  income"  as defined in paragraph two of subdivision (b) of section eight
   46  hundred fifty-two, as modified by section eight hundred  fifty-five,  of
   47  the  internal revenue code plus the amount taxable under paragraph three
   48  of subdivision (b) of section  eight  hundred  fifty-two  of  such  code
   49  subject to the [modification] MODIFICATIONS required by subdivision nine
   50  of  section two hundred eight of this chapter[, other than the modifica-
   51  tion required by subparagraph two of paragraph (a) and by paragraph  (f)
   52  thereof,  including  the modification required by paragraphs (d) and (e)
   53  of subdivision three of section two hundred ten of this chapter].
   54    8. For any taxable year beginning on or after January first, two thou-
   55  sand six, a corporation that is  no  longer  doing  business,  employing
   56  capital, or owning or leasing property, OR DERIVING RECEIPTS FROM ACTIV-
       S. 6359--D                         39                         A. 8559--D

    1  ITY  in this state in a corporate or organized capacity that has filed a
    2  final tax return with the department for the last tax year it was  doing
    3  business  and has no outstanding tax liability for such final tax return
    4  or  any  tax  return  for prior tax years shall be exempt from all taxes
    5  imposed by paragraph (d) of subdivision one of section two  hundred  ten
    6  of  this  article for tax years following the last year such corporation
    7  was doing business.
    8    S 6. Section 209-A of the tax law is REPEALED.
    9    S 7. The section heading and subdivision 1 of section 209-B of the tax
   10  law, the section heading as amended by chapter 11 of the  laws  of  1983
   11  and subdivision 1 as amended by section 4 of part A of chapter 59 of the
   12  laws of 2013, are amended to read as follows:
   13    [Temporary  metropolitan]  METROPOLITAN  transportation  business  tax
   14  surcharge.  1. (A) For the privilege of exercising its  corporate  fran-
   15  chise,  or  of  doing business, or of employing capital, or of owning or
   16  leasing property in a corporate or organized capacity, or of maintaining
   17  an office, OR OF DERIVING RECEIPTS FROM  ACTIVITY  in  the  metropolitan
   18  commuter  transportation  district,  for  all or any part of its taxable
   19  year, there is hereby imposed on every corporation,  other  than  a  New
   20  York  S  corporation,  subject  to tax under section two hundred nine of
   21  this article, or any receiver, referee, trustee, assignee or other fidu-
   22  ciary, or any officer or agent appointed by any court, who conducts  the
   23  business  of  any such corporation, [for the taxable years commencing on
   24  or after January first, nineteen hundred eighty-two  but  ending  before
   25  December thirty-first, two thousand eighteen,] a tax surcharge, in addi-
   26  tion  to the tax imposed under section two hundred nine of this article,
   27  to be computed at the rate of [eighteen percent of the tax imposed under
   28  such section two hundred nine for such taxable years or any part of such
   29  taxable years ending  before  December  thirty-first,  nineteen  hundred
   30  eighty-three  after  the  deduction  of  any credits otherwise allowable
   31  under this article, and at the rate of] seventeen  percent  of  the  tax
   32  imposed  under  such  section for such taxable years or any part of such
   33  taxable years ending on or after December thirty-first, nineteen hundred
   34  eighty-three AND BEFORE JANUARY FIRST, TWO THOUSAND  FIFTEEN  after  the
   35  deduction  of  any  credits  otherwise  allowable  under  this article[;
   36  provided, however, that], AT THE  RATE  OF  TWENTY-FIVE  AND  SIX-TENTHS
   37  PERCENT  OF  THE TAX IMPOSED UNDER SUCH SECTION FOR TAXABLE YEARS BEGIN-
   38  NING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN AND BEFORE  JANUARY
   39  FIRST,  TWO  THOUSAND SIXTEEN BEFORE THE DEDUCTION OF ANY CREDITS OTHER-
   40  WISE ALLOWABLE UNDER THIS ARTICLE, AND AT THE  RATE  DETERMINED  BY  THE
   41  COMMISSIONER  PURSUANT  TO  PARAGRAPH (F) OF THIS SUBDIVISION OF THE TAX
   42  IMPOSED UNDER SUCH SECTION, FOR TAXABLE  YEARS  BEGINNING  ON  OR  AFTER
   43  JANUARY  FIRST, TWO THOUSAND SIXTEEN BEFORE THE DEDUCTION OF ANY CREDITS
   44  OTHERWISE ALLOWABLE UNDER THIS ARTICLE.  HOWEVER, such [rates]  RATE  of
   45  tax  surcharge  shall be applied only to that portion of the tax imposed
   46  under section two hundred  nine  of  this  article  [after]  BEFORE  the
   47  deduction of any credits otherwise allowable under this article which is
   48  attributable  to  the taxpayer's business activity carried on within the
   49  metropolitan commuter transportation district;  and  provided,  further,
   50  [that  the  tax  surcharge  imposed by this section shall not be imposed
   51  upon any taxpayer for more than four hundred thirty-two months. Provided
   52  however, that for taxable years commencing on or after July first, nine-
   53  teen hundred ninety-eight, such surcharge shall be calculated as if  the
   54  tax  imposed  under section two hundred ten of this article were imposed
   55  under the law in effect for taxable years commencing on  or  after  July
   56  first,  nineteen  hundred  ninety-seven  and before July first, nineteen
       S. 6359--D                         40                         A. 8559--D

    1  hundred ninety-eight. Provided however, that for taxable years  commenc-
    2  ing  on or after January first, two thousand seven, such surcharge shall
    3  be calculated using the highest of the tax  bases  imposed  pursuant  to
    4  paragraphs  (a),  (b),  (c)  or  (d)  of  subdivision one of section two
    5  hundred ten of this article and the amount imposed under  paragraph  (e)
    6  of  subdivision  one  of  such  section two hundred ten, for the taxable
    7  year; and, provided further that, if such highest amount is the tax base
    8  imposed under paragraph (a), (b) or (c) of such  subdivision,  then  the
    9  surcharge  shall  be  computed as if the tax rates and limitations under
   10  such paragraph were the tax rates and limitations under  such  paragraph
   11  in  effect for taxable years commencing on or after July first, nineteen
   12  hundred ninety-seven and before July  first,  nineteen  hundred  ninety-
   13  eight]  THE  SURCHARGE  COMPUTED  ON  A  COMBINED REPORT SHALL INCLUDE A
   14  SURCHARGE ON THE FIXED  DOLLAR  MINIMUM  TAX  FOR  EACH  MEMBER  OF  THE
   15  COMBINED GROUP SUBJECT TO THE SURCHARGE UNDER THIS SUBDIVISION.
   16    (B)  A CORPORATION IS DERIVING RECEIPTS FROM ACTIVITY IN THE METROPOL-
   17  ITAN COMMUTER TRANSPORTATION DISTRICT IF  IT  HAS  RECEIPTS  WITHIN  THE
   18  METROPOLITAN  COMMUTER TRANSPORTATION DISTRICT OF ONE MILLION DOLLARS OR
   19  MORE IN  A  TAXABLE  YEAR.  FOR  PURPOSES  OF  THIS  SECTION,  THE  TERM
   20  "RECEIPTS"  MEANS  THE  RECEIPTS  THAT  ARE SUBJECT TO THE APPORTIONMENT
   21  RULES SET FORTH IN SECTION TWO HUNDRED TEN-A OF THIS  ARTICLE,  AND  THE
   22  TERM "RECEIPTS WITHIN THE METROPOLITAN COMMUTER TRANSPORTATION DISTRICT"
   23  MEANS THE RECEIPTS INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FACTOR
   24  DETERMINED  UNDER  SUBDIVISION TWO OF THIS SECTION. FOR PURPOSES OF THIS
   25  PARAGRAPH,  RECEIPTS  FROM  PROCESSING  CREDIT  CARD  TRANSACTIONS   FOR
   26  MERCHANTS INCLUDE MERCHANT DISCOUNT FEES RECEIVED BY THE CORPORATION.
   27    (C)  A  CORPORATION  IS  DOING  BUSINESS  IN THE METROPOLITAN COMMUTER
   28  TRANSPORTATION DISTRICT IF (I) IT HAS ISSUED CREDIT CARDS TO  ONE  THOU-
   29  SAND  OR  MORE CUSTOMERS WHO HAVE A MAILING ADDRESS WITHIN THE METROPOL-
   30  ITAN COMMUTER TRANSPORTATION DISTRICT AS OF THE LAST DAY OF ITS  TAXABLE
   31  YEAR,  (II)  IT  HAS  MERCHANT CUSTOMER CONTRACTS WITH MERCHANTS AND THE
   32  TOTAL NUMBER OF LOCATIONS COVERED BY THOSE CONTRACTS EQUALS ONE THOUSAND
   33  OR MORE LOCATIONS IN THE METROPOLITAN COMMUTER  TRANSPORTATION  DISTRICT
   34  TO  WHOM  THE CORPORATION REMITTED PAYMENTS FOR CREDIT CARD TRANSACTIONS
   35  DURING THE TAXABLE YEAR, OR (III) THE SUM OF  THE  NUMBER  OF  CUSTOMERS
   36  DESCRIBED  IN  SUBPARAGRAPH  (I)  OF  THIS  PARAGRAPH PLUS THE NUMBER OF
   37  LOCATIONS COVERED BY ITS CONTRACTS DESCRIBED  IN  SUBPARAGRAPH  (II)  OF
   38  THIS  PARAGRAPH  EQUALS ONE THOUSAND OR MORE. AS USED IN THIS PARAGRAPH,
   39  THE TERM "CREDIT CARD" INCLUDES BANK, CREDIT, TRAVEL  AND  ENTERTAINMENT
   40  CARDS.
   41    (D)(I)  A  CORPORATION WITH LESS THAN ONE MILLION DOLLARS BUT AT LEAST
   42  TEN THOUSAND DOLLARS OF RECEIPTS WITHIN THE METROPOLITAN COMMUTER TRANS-
   43  PORTATION DISTRICT IN A TAXABLE YEAR THAT IS PART OF A COMBINED  REPORT-
   44  ING  GROUP  UNDER  SECTION TWO HUNDRED TEN-C OF THIS ARTICLE IS DERIVING
   45  RECEIPTS FROM  ACTIVITY  IN  THE  METROPOLITAN  COMMUTER  TRANSPORTATION
   46  DISTRICT IF THE RECEIPTS WITHIN THE METROPOLITAN COMMUTER TRANSPORTATION
   47  DISTRICT  OF  THE  MEMBERS  OF THE COMBINED REPORTING GROUP THAT HAVE AT
   48  LEAST TEN THOUSAND DOLLARS OF RECEIPTS WITHIN THE METROPOLITAN  COMMUTER
   49  TRANSPORTATION DISTRICT IN THE AGGREGATE MEET THE THRESHOLD SET FORTH IN
   50  PARAGRAPH (B) OF THIS SUBDIVISION.
   51    (II)  A CORPORATION THAT DOES NOT MEET ANY OF THE THRESHOLDS SET FORTH
   52  IN PARAGRAPH (C) OF THIS SUBDIVISION BUT HAS AT LEAST TEN CUSTOMERS,  OR
   53  LOCATIONS,  OR  CUSTOMERS  AND LOCATIONS, AS DESCRIBED IN PARAGRAPH (C),
   54  AND IS PART OF A COMBINED REPORTING  GROUP  UNDER  SECTION  TWO  HUNDRED
   55  TEN-C  OF THIS ARTICLE THAT IS DOING BUSINESS IN THE METROPOLITAN COMMU-
   56  TER TRANSPORTATION DISTRICT IF THE NUMBER OF  CUSTOMERS,  LOCATIONS,  OR
       S. 6359--D                         41                         A. 8559--D

    1  CUSTOMERS AND LOCATIONS, WITHIN THE METROPOLITAN COMMUTER TRANSPORTATION
    2  DISTRICT  OF  THE  MEMBERS  OF THE COMBINED REPORTING GROUP THAT HAVE AT
    3  LEAST TEN CUSTOMERS, LOCATIONS, OR CUSTOMERS AND LOCATIONS,  WITHIN  THE
    4  METROPOLITAN COMMUTER TRANSPORTATION DISTRICT IN THE AGGREGATE MEETS ANY
    5  OF THE THRESHOLDS SET FORTH IN PARAGRAPH (C) OF THIS SUBDIVISION.
    6    (E) AT THE END OF EACH YEAR, THE COMMISSIONER SHALL REVIEW THE CUMULA-
    7  TIVE  PERCENTAGE  CHANGE  IN  THE CONSUMER PRICE INDEX. THE COMMISSIONER
    8  SHALL ADJUST THE RECEIPT THRESHOLDS SET FORTH IN THIS SUBDIVISION IF THE
    9  CONSUMER PRICE INDEX HAS CHANGED BY TEN PERCENT OR MORE SINCE THE  JANU-
   10  ARY  FIRST,  TWO  THOUSAND FIFTEEN OR SINCE THE DATE THAT THE THRESHOLDS
   11  WERE LAST ADJUSTED UNDER  THIS  SUBDIVISION.  THE  THRESHOLDS  SHALL  BE
   12  ADJUSTED  TO  REFLECT  THAT CUMULATIVE PERCENTAGE CHANGE IN THE CONSUMER
   13  PRICE INDEX. THE ADJUSTED THRESHOLDS SHALL BE ROUNDED TO THE NEAREST ONE
   14  THOUSAND DOLLARS. AS USED IN  THIS  PARAGRAPH,  "CONSUMER  PRICE  INDEX"
   15  MEANS THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS (CPI-U) AVAILABLE
   16  FROM  THE  BUREAU OF LABOR STATISTICS OF THE UNITED STATES DEPARTMENT OF
   17  LABOR. ANY ADJUSTMENT SHALL APPLY TO TAX PERIODS THAT  BEGIN  AFTER  THE
   18  ADJUSTMENT IS MADE.
   19    (F) THE COMMISSIONER SHALL DETERMINE THE RATE OF TAX FOR TAXABLE YEARS
   20  BEGINNING  ON  OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN BY ADJUSTING
   21  THE RATE FOR TAXABLE YEARS BEGINNING ON  OR  AFTER  JANUARY  FIRST,  TWO
   22  THOUSAND  FIFTEEN  AND  BEFORE  JANUARY  FIRST,  TWO THOUSAND SIXTEEN AS
   23  NECESSARY TO ENSURE THAT THE RECEIPTS ATTRIBUTABLE TO SUCH SURCHARGE, AS
   24  IMPACTED BY THE CHAPTER OF THE LAWS OF TWO THOUSAND FOURTEEN WHICH ADDED
   25  THIS PARAGRAPH, WILL MEET AND NOT EXCEED THE FINANCIAL  PROJECTIONS  FOR
   26  STATE  FISCAL  YEAR  TWO  THOUSAND  SIXTEEN-TWO  THOUSAND  SEVENTEEN, AS
   27  REFLECTED IN STATE FISCAL YEAR TWO THOUSAND FIFTEEN-TWO THOUSAND SIXTEEN
   28  ENACTED BUDGET. THE COMMISSIONER SHALL ANNUALLY DETERMINE THE RATE THER-
   29  EAFTER USING THE FINANCIAL PROJECTIONS FOR THE STATE  FISCAL  YEAR  THAT
   30  COMMENCES  IN  THE  YEAR FOR WHICH THE RATE IS TO BE SET AS REFLECTED IN
   31  THE ENACTED BUDGET FOR THE FISCAL YEAR COMMENCING ON THE PREVIOUS  APRIL
   32  FIRST.
   33    S  8.  Subdivision  2  of  section 209-B of the tax law, as amended by
   34  chapter 11 of the laws of 1983, paragraph (a) as amended by chapter  760
   35  of  the  laws  of 1992 and subparagraph 2 of paragraph (b) as amended by
   36  section 3 of part K of chapter 63 of the laws of  2000,  is  amended  to
   37  read as follows:
   38    2.  The  portion of the taxpayer's business activity carried on within
   39  the metropolitan commuter transportation district shall be determined by
   40  multiplying the tax imposed under section two hundred nine of this arti-
   41  cle BEFORE THE DEDUCTION OF ANY CREDITS OTHERWISE ALLOWABLE  UNDER  THIS
   42  ARTICLE by a percentage to be determined as follows:
   43    (a) ascertaining the percentage which the average value of the taxpay-
   44  er's real and tangible personal property, whether owned or rented to it,
   45  within  the  metropolitan  commuter  transportation  district during the
   46  period covered by its report bears to  the  average  value  of  all  the
   47  taxpayer's  real and tangible personal property, whether owned or rented
   48  to it, within the state during  such  period;  provided  that  the  term
   49  "value  of  the  taxpayer's  real  and tangible personal property" shall
   50  [have the same meaning as is ascribed to that term by  subparagraph  one
   51  of  paragraph  (a) of subdivision three of section two hundred ten] MEAN
   52  THE ADJUSTED BASES OF SUCH PROPERTIES FOR FEDERAL  INCOME  TAX  PURPOSES
   53  (EXCEPT  THAT  IN  THE CASE OF RENTED PROPERTY SUCH VALUE SHALL MEAN THE
   54  PRODUCT OF (I) EIGHT AND (II) THE GROSS RENTS PAYABLE FOR THE RENTAL  OF
   55  SUCH  PROPERTY  DURING  THE  TAXABLE  YEAR); PROVIDED, HOWEVER, THAT THE
   56  TAXPAYER MAY MAKE A ONE-TIME, REVOCABLE  ELECTION  TO  USE  FAIR  MARKET
       S. 6359--D                         42                         A. 8559--D

    1  VALUE  AS  THE  VALUE OF ALL OF ITS REAL AND TANGIBLE PERSONAL PROPERTY,
    2  PROVIDED THAT SUCH ELECTION IS MADE ON OR BEFORE THE DUE DATE FOR FILING
    3  A REPORT UNDER SECTION TWO HUNDRED ELEVEN FOR THE TAXPAYER'S FIRST TAXA-
    4  BLE  YEAR COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN AND
    5  PROVIDED THAT SUCH ELECTION SHALL NOT APPLY TO  ANY  TAXABLE  YEAR  WITH
    6  RESPECT  TO  WHICH  THE TAXPAYER IS INCLUDED ON A COMBINED REPORT UNLESS
    7  EACH OF THE TAXPAYERS INCLUDED ON SUCH REPORT HAS MADE SUCH AN  ELECTION
    8  WHICH REMAINS IN EFFECT FOR SUCH YEAR;
    9    (b)  ascertaining  the percentage [which the receipts of the taxpayer,
   10  computed on the cash  or  accrual  basis  according  to  the  method  of
   11  accounting  used  in  the  computation of its entire net income, arising
   12  during such period from:
   13    (1) sales of its tangible personal property where shipments  are  made
   14  to points within the metropolitan commuter transportation district,
   15    (2) services performed within the metropolitan commuter transportation
   16  district,  provided, however, that (i) in the case of a taxpayer engaged
   17  in the business of publishing newspapers or periodicals, receipts  aris-
   18  ing  from  sales of advertising contained in such newspapers and period-
   19  icals shall be deemed to arise from services performed within the metro-
   20  politan  commuter  transportation  district  to  the  extent  that  such
   21  newspapers  and periodicals are delivered to points within the metropol-
   22  itan commuter transportation district, (ii) receipts from an  investment
   23  company  from  the  sale  of  management, administration or distribution
   24  services to such investment  company  shall  be  deemed  to  arise  from
   25  services  performed  within  the  metropolitan  commuter  transportation
   26  district to the extent set forth in subparagraph six of paragraph (a) of
   27  subdivision three of section two hundred ten  of  this  chapter  (except
   28  that  references  in such subparagraph six to the state shall be deemed,
   29  for purposes of application to this clause,  to  be  references  to  the
   30  metropolitan  commuter  transportation  district),  (iii) in the case of
   31  taxpayers principally engaged in the activity of air freight  forwarding
   32  acting as principal and like indirect air carriage receipts arising from
   33  such  activity  shall arise from services performed within the metropol-
   34  itan commuter transportation district as follows: one hundred percent of
   35  such receipts if both the  pickup  and  delivery  associated  with  such
   36  receipts  are  made in the metropolitan commuter transportation district
   37  and fifty percent of such receipts if  either  the  pickup  or  delivery
   38  associated  with  such  receipts  is  made  in the metropolitan commuter
   39  transportation district, and (iv) in the case of a taxpayer which  is  a
   40  registered  securities  or  commodities  broker  or dealer, the receipts
   41  specified in subparagraph nine of paragraph (a) of subdivision three  of
   42  section  two  hundred  ten of this article shall be deemed to arise from
   43  services  performed  within  the  metropolitan  commuter  transportation
   44  district  to the extent set forth in such subparagraph nine (except that
   45  references in such subparagraph nine to the state shall be  deemed,  for
   46  purposes  of  the  application  of  this clause, to be references to the
   47  metropolitan commuter transportation district),
   48    (3) rentals from property situated  and  royalties  from  the  use  of
   49  patents  or  copyrights  within the metropolitan commuter transportation
   50  district, and receipts from the sales of rights for  closed-circuit  and
   51  cable  television transmissions of an event (other than events occurring
   52  on a regularly scheduled basis) taking  place  within  the  metropolitan
   53  commuter  transportation  district  as  a  result  of  the  rendition of
   54  services by employees of the corporation, as athletes,  entertainers  or
   55  performing  artists,  but  only  to  the  extent  that such receipts are
       S. 6359--D                         43                         A. 8559--D

    1  attributable to such transmissions  received  or  exhibited  within  the
    2  metropolitan communter transportation district, and
    3    (4)  all other business receipts earned within the metropolitan commu-
    4  ter transportation district, bear to the total amount of the  taxpayer's
    5  receipts,  similarly computed, arising during such period from all sales
    6  of  its  tangible  personal  property,  services,  rentals,   royalties,
    7  receipts  from  the  sales  of rights for closed-circuit and cable tele-
    8  vision transmissions and all other  business  transactions,  within  the
    9  state;]  OF  THE  TAXPAYER'S  RECEIPTS  WITHIN THE METROPOLITAN COMMUTER
   10  TRANSPORTATION DISTRICT PURSUANT TO THE METHOD PRESCRIBED IN SECTION TWO
   11  HUNDRED TEN-A OF THIS ARTICLE, EXCEPT THAT
   12    (I) THE NUMERATOR OF THE APPORTIONMENT FRACTION UNDER SUCH SECTION TWO
   13  HUNDRED TEN-A SHALL BE THE DENOMINATOR  OF  THE  APPORTIONMENT  FRACTION
   14  UNDER THIS PARAGRAPH,
   15    (II)  THE NUMERATOR OF THE APPORTIONMENT FRACTION UNDER THIS PARAGRAPH
   16  SHALL BE DETERMINED BY APPLYING THE RULES IN SUCH  SECTION  TWO  HUNDRED
   17  TEN-A  RELATING  TO  THE  NUMERATOR  OF THE APPORTIONMENT FRACTION AS IF
   18  THOSE RULES REFERENCED THE METROPOLITAN COMMUTER TRANSPORTATION DISTRICT
   19  RATHER THAN THIS STATE,
   20    (III) TO THE EXTENT THAT A PROVISION IN SUCH SECTION TWO HUNDRED TEN-A
   21  PROVIDES THAT EIGHT PERCENT OF THE RECEIPTS SPECIFIED IN THAT  PROVISION
   22  SHOULD BE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION, NINE-
   23  TY  PERCENT  OF SUCH EIGHT PERCENT AMOUNT SHALL BE CONSIDERED WITHIN THE
   24  METROPOLITAN COMMUTER TRANSPORTATION DISTRICT AND ONE HUNDRED PERCENT OF
   25  SUCH EIGHT PERCENT AMOUNT SHALL BE CONSIDERED TO BE  WITHIN  THE  STATE,
   26  AND
   27    (IV)  TO THE EXTENT THAT A PROVISION IN SUCH SECTION TWO HUNDRED TEN-A
   28  OF THIS ARTICLE PROVIDES THAT THE RECEIPTS SPECIFIED IN  THAT  PROVISION
   29  SHALL  NOT  BE  INCLUDED  IN THE NUMERATOR OF THE APPORTIONMENT FRACTION
   30  UNDER SUCH SECTION  TWO  HUNDRED  TEN-A,  SUCH  RECEIPTS  SHALL  NOT  BE
   31  INCLUDED  IN DETERMINING THE PORTION OF THE TAXPAYER'S BUSINESS ACTIVITY
   32  CARRIED ON WITHIN THE METROPOLITAN COMMUTER TRANSPORTATION DISTRICT;
   33    (c) ascertaining the percentage of the total wages, salaries and other
   34  personal service compensation, similarly computed, during  such  period,
   35  of  employees  within the metropolitan commuter transportation district,
   36  except general executive officers, to  the  total  wages,  salaries  and
   37  other  personal  service  compensation,  similarly computed, during such
   38  period, of all the taxpayer's employees within the state, except general
   39  executive officers; and
   40    (d) adding together the percentages so  determined  and  dividing  the
   41  result by the number of percentages.
   42    S 9. Intentionally omitted.
   43    S  10.  Subdivisions  2-a  and 2-b of section 209-B of the tax law are
   44  REPEALED.
   45    S 11. Subdivisions 3 and 5 of section 209-B of the tax  law,  subdivi-
   46  sion 3 as amended by chapter 11 of the laws of 1983 and subdivision 5 as
   47  amended  by  chapter  166  of  the  laws of 1991, are amended to read as
   48  follows:
   49    3. A corporation shall not be deemed to be doing  business,  employing
   50  capital, owning or leasing property, or maintaining an office, OR DERIV-
   51  ING  RECEIPTS  FROM ACTIVITY in the metropolitan commuter transportation
   52  district, for the purposes of this section, by reason of (a) the mainte-
   53  nance of cash balances with banks or trust companies in the metropolitan
   54  commuter transportation district, or (b)  the  ownership  of  shares  of
   55  stock  or  securities  kept  in the metropolitan commuter transportation
   56  district, if kept in a safe deposit box, safe, vault or other receptacle
       S. 6359--D                         44                         A. 8559--D

    1  rented for the purpose, or if pledged  as  collateral  security,  or  if
    2  deposited  with one or more banks or trust companies, or brokers who are
    3  members of a recognized security exchange,  in  safekeeping  or  custody
    4  accounts,  or  (c)  the  taking  of any action by any such bank or trust
    5  company or broker, which is incidental to the rendering  of  safekeeping
    6  or  custodian  service to such corporation, or (d) the maintenance of an
    7  office in the metropolitan commuter transportation district  by  one  or
    8  more  officers  or directors of the corporation who are not employees of
    9  the corporation if the corporation otherwise is not  doing  business  in
   10  the  metropolitan  commuter transportation district, and does not employ
   11  capital or own or lease property in the metropolitan commuter  transpor-
   12  tation district, or (e) the keeping of books or records of a corporation
   13  in  the  metropolitan  commuter transportation district if such books or
   14  records are not kept by employees of such corporation  and  such  corpo-
   15  ration  does  not  otherwise  do  business, employ capital, own or lease
   16  property or maintain an office in the metropolitan commuter  transporta-
   17  tion district, or (f) any combination of the foregoing activities.
   18    5.  The  provisions  concerning  reports  under [section] SECTIONS TWO
   19  HUNDRED TEN-C AND  two  hundred  eleven  shall  be  applicable  to  this
   20  section,  except  that  for  purposes  of an automatic extension for six
   21  months for filing a report covering the tax surcharge  imposed  by  this
   22  section,  such  automatic  extension shall be allowed only if a taxpayer
   23  files with the commissioner an application for extension in such form as
   24  said commissioner may prescribe by regulation and pays on or before  the
   25  date of such filing in addition to any other amounts required under this
   26  article,  either  ninety percent of the entire tax surcharge required to
   27  be paid under this section for the applicable period, or not  less  than
   28  the tax surcharge shown on the taxpayer's return for the preceding taxa-
   29  ble  year,  if  such preceding taxable year was a taxable year of twelve
   30  months; provided, however, that in no event shall such  amount  be  less
   31  than  the  product of the following three amounts: (1) the tax surcharge
   32  rate in effect for the taxable year pursuant to subdivision one of  this
   33  section,  (2)  the  fixed  dollar minimum applicable to such taxpayer as
   34  determined under paragraph (d) of subdivision one of section two hundred
   35  ten of this chapter for the taxable year, and (3) the percentage  deter-
   36  mined  under  subdivision  two of this section for the preceding taxable
   37  year, unless the taxpayer was not subject to the tax  surcharge  imposed
   38  pursuant  to  this section with respect to such year, in which case such
   39  percentage shall be deemed to be one hundred percent. The tax  surcharge
   40  imposed  by this section shall be payable to the commissioner in full at
   41  the time the report is required to be filed, and such tax  surcharge  or
   42  the  balance  thereof,  imposed on any taxpayer which ceases to exercise
   43  its franchise or be subject to the tax surcharge imposed by this section
   44  shall be payable to the commissioner at the time the report is  required
   45  to be filed, provided such tax surcharge of a domestic corporation which
   46  continues to possess its franchise shall be subject to adjustment as the
   47  circumstances  may require; all other tax surcharges of any such taxpay-
   48  er, which pursuant to the foregoing provisions  of  this  section  would
   49  otherwise  be  payable subsequent to the time such report is required to
   50  be filed, shall nevertheless  be  payable  at  such  time.  All  of  the
   51  provisions  of  this  article presently applicable are applicable to the
   52  tax surcharge imposed by this section.
   53    S 12. Subdivision 1 of section 210 of the tax law, as added by chapter
   54  817 of the laws of 1987, the opening paragraph as amended by  section  1
   55  of part D and paragraph (g) as amended by section 2 of part A of chapter
   56  63 of the laws of 2000, paragraph (a) as amended by  section 2 of part N
       S. 6359--D                         45                         A. 8559--D

    1  of  chapter  60  of the laws of 2007, subparagraph 2 of paragraph (b) as
    2  amended by section 1 of part GG-1 of chapter 57 of  the  laws  of  2008,
    3  subparagraph 3 of paragraph (b) as added by section 2 of part Z of chap-
    4  ter  59  of  the  laws  of  2013,  subparagraph (ii) of paragraph (c) as
    5  amended by section 2 of part C and subparagraph 5 of  paragraph  (d)  as
    6  added by section 3 of part C of chapter 56 of the laws of 2011, subpara-
    7  graph (vi) of paragraph (a) as amended by section 1 of part C of chapter
    8  56 of the laws of 2011, subparagraph (vii) as added by section 1 of part
    9  Z of chapter 59 of the laws of 2013, subparagraph (iii) of paragraph (c)
   10  as  added  by  section  3  of  part Z of chapter 59 of the laws of 2013,
   11  subparagraph 6 of paragraph (d) as added by section 4 of part Z of chap-
   12  ter 59 of the laws of 2013, paragraph (b) as amended  by  section  1  of
   13  part  GG1,  subparagraph  3  of paragraph (d) as amended by section 3 of
   14  part AA1, subparagraph 4 of paragraph (d) as added by section 2 of  part
   15  AA1  and subparagraph 1 of paragraph (g) as amended by section 4 of part
   16  AA1 of chapter 57 of the laws of  2008,  paragraph  (c)  as  amended  by
   17  section  10  of part A and subparagraph 1 of paragraph (d) as amended by
   18  section 12 of part A of chapter 56 of the laws of 1998, paragraph (d) as
   19  amended by chapter 760 of the laws of 1992, paragraph (e) as amended  by
   20  section  1  of  part P of chapter 407 of the laws of 1999, and paragraph
   21  (f) as amended by section 2 of part E of chapter 61 of the laws of 2005,
   22  is amended to read as follows:
   23    1. The tax imposed by subdivision one of section two hundred  nine  of
   24  this chapter shall be: (A) in the case of each taxpayer other than a New
   25  York  S  corporation  or a qualified homeowners association, the [sum of
   26  (1) the] highest of the amounts prescribed in paragraphs (a), (b), [(c)]
   27  and (d) of this subdivision [and (2) the amount prescribed in  paragraph
   28  (e)  of  this  subdivision],  (B)  in the case of each New York S corpo-
   29  ration, the amount prescribed in paragraph [(g)] (D)  of  this  subdivi-
   30  sion,  and  (C)  in  the case of a qualified homeowners association, the
   31  [sum of (1) the] highest of the amounts prescribed in paragraphs  (a)[,]
   32  AND  (b) [and (c)] of this subdivision [and (2) the amount prescribed in
   33  paragraph (e) of this subdivision]. For purposes of this paragraph,  the
   34  term  "qualified homeowners association" means a homeowners association,
   35  as such term is defined in subsection (c) of section five hundred  twen-
   36  ty-eight of the internal revenue code without regard to subparagraph (E)
   37  of  paragraph  one of such subsection (relating to elections to be taxed
   38  pursuant to such section), which has no homeowners  association  taxable
   39  income,  as  such  term  is  defined  in subsection (d) of such section.
   40  Provided, however, that in the case of a small business taxpayer  (other
   41  than  a  New  York  S  corporation)  as defined in paragraph (f) of this
   42  subdivision, FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOU-
   43  SAND SIXTEEN, if the amount prescribed in such paragraph (b)  is  higher
   44  than the amount prescribed in such paragraph (a) solely by reason of the
   45  application  of  the  rate  applicable to small business taxpayers, then
   46  with respect to such taxpayer  the  tax  referred  to  in  the  previous
   47  sentence  shall  be  [the  sum of (1) the highest] HIGHER of the amounts
   48  prescribed in paragraphs (a)[, (c)] and (d) of this subdivision [and (2)
   49  the amount prescribed in paragraph (e) of this subdivision].
   50    (a) [Entire net] BUSINESS income base. [For  taxable  years  beginning
   51  before  July  first, nineteen hundred ninety-nine, the amount prescribed
   52  by this paragraph shall be computed at the rate of nine percent  of  the
   53  taxpayer's  entire  net  income  base. For taxable years beginning after
   54  June thirtieth, nineteen hundred ninety-nine and before July first,  two
   55  thousand,  the  amount prescribed by this paragraph shall be computed at
   56  the rate of eight and one-half percent  of  the  taxpayer's  entire  net
       S. 6359--D                         46                         A. 8559--D

    1  income base. For taxable years beginning after June thirtieth, two thou-
    2  sand  and  before July first, two thousand one, the amount prescribed by
    3  this paragraph shall be computed at the rate of  eight  percent  of  the
    4  taxpayer's  entire  net  income  base. For taxable years beginning after
    5  June thirtieth, two thousand one and before January first, two  thousand
    6  seven,  the amount prescribed by this paragraph shall be computed at the
    7  rate of seven and one-half percent of the taxpayer's entire  net  income
    8  base.]  For  taxable years beginning [on or after] BEFORE January first,
    9  two thousand [seven] SIXTEEN, the amount prescribed  by  this  paragraph
   10  shall  be  computed  at  the  rate of seven and one-tenth percent of the
   11  taxpayer's [entire net] BUSINESS income base. FOR TAXABLE  YEARS  BEGIN-
   12  NING  ON  OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND  SIXTEEN, THE AMOUNT
   13  PRESCRIBED BY THIS PARAGRAPH SHALL BE SIX AND ONE-HALF  PERCENT  OF  THE
   14  TAXPAYER'S  BUSINESS  INCOME  BASE. The taxpayer's [entire net] BUSINESS
   15  income base shall mean the portion of the taxpayer's [entire net]  BUSI-
   16  NESS income allocated within the state as hereinafter provided[, subject
   17  to  any  modification  required by paragraphs (d) and (e) of subdivision
   18  three of this section]. However, in the case of a small business taxpay-
   19  er, as  defined  in  paragraph  (f)  of  this  subdivision,  the  amount
   20  prescribed  by this paragraph shall be computed pursuant to subparagraph
   21  (iv) of this paragraph and in the case of a manufacturer, as defined  in
   22  subparagraph (vi) of this paragraph, the amount prescribed by this para-
   23  graph shall be computed pursuant to subparagraph (vi) of this paragraph.
   24    [(i)  if the entire net income base is not more than two hundred thou-
   25  sand dollars, (1) for taxable years beginning before July  first,  nine-
   26  teen  hundred  ninety-nine,  the  amount  shall  be eight percent of the
   27  entire net income base; (2) for taxable years beginning after June thir-
   28  tieth, nineteen hundred ninety-nine and before July first, two  thousand
   29  three,  the amount shall be seven and one-half percent of the entire net
   30  income base; and (3) for taxable years beginning after  June  thirtieth,
   31  two  thousand  three  and  before  January first, two thousand five, the
   32  amount shall be 6.85 percent of the entire net income base;
   33    (ii) if the entire net income base is more than two  hundred  thousand
   34  dollars  but not over two hundred ninety thousand dollars, (1) for taxa-
   35  ble years beginning before July first, nineteen hundred ninety-nine, the
   36  amount shall be the sum  of  (a)  sixteen  thousand  dollars,  (b)  nine
   37  percent  of  the  excess  of the entire net income base over two hundred
   38  thousand dollars and (c) five percent of the excess of  the  entire  net
   39  income  base  over  two  hundred fifty thousand dollars; (2) for taxable
   40  years beginning after June thirtieth, nineteen hundred  ninety-nine  and
   41  before  July  first,  two  thousand,  the amount shall be the sum of (a)
   42  fifteen thousand dollars, (b) eight and one-half percent of  the  excess
   43  of  the entire net income base over two hundred thousand dollars and (c)
   44  five percent of the excess of  the  entire  net  income  base  over  two
   45  hundred  fifty  thousand  dollars; (3) for taxable years beginning after
   46  June thirtieth, two thousand and before July first,  two  thousand  one,
   47  the  amount  shall be the sum of (a) fifteen thousand dollars, (b) eight
   48  percent of the excess of the entire net income  base  over  two  hundred
   49  thousand  dollars  and (c) two and one-half percent of the excess of the
   50  entire net income base over two hundred fifty thousand dollars; (4)  for
   51  taxable  years  beginning  after  June  thirtieth,  two thousand one and
   52  before July first, two thousand three, the amount  shall  be  seven  and
   53  one-half  percent  of  the  entire  net income base; and (5) for taxable
   54  years beginning after June thirtieth,  two  thousand  three  and  before
   55  January  first,  two  thousand  five, the amount shall be the sum of (a)
   56  thirteen thousand seven hundred dollars, (b) 7.5 percent of  the  excess
       S. 6359--D                         47                         A. 8559--D

    1  of  the entire net income base over two hundred thousand dollars and (c)
    2  3.25 percent of the excess of  the  entire  net  income  base  over  two
    3  hundred fifty thousand dollars;
    4    (iii) for taxable years beginning on or after January first, two thou-
    5  sand  five  and  ending before January first, two thousand seven, if the
    6  entire net income base is not more  than  two  hundred  ninety  thousand
    7  dollars  the  amount shall be six and one-half percent of the entire net
    8  income base; if the entire net income base  is  more  than  two  hundred
    9  ninety  thousand  dollars  but  not  over  three hundred ninety thousand
   10  dollars the amount shall be the  sum  of  (1)  eighteen  thousand  eight
   11  hundred  fifty  dollars, (2) seven and one-half percent of the excess of
   12  the entire net income base over two hundred ninety thousand dollars  but
   13  not  over  three  hundred ninety thousand dollars and (3) seven and one-
   14  quarter percent of the excess of the entire net income base  over  three
   15  hundred  fifty  thousand dollars but not over three hundred ninety thou-
   16  sand dollars;]
   17    (iv) for taxable years beginning [on or after] BEFORE  January  first,
   18  two  thousand  [seven] SIXTEEN, if the [entire net] BUSINESS income base
   19  is not more than two hundred ninety thousand dollars the amount shall be
   20  six and one-half percent of the [entire net] BUSINESS  income  base;  if
   21  the  [entire  net]  BUSINESS income base is more than two hundred ninety
   22  thousand dollars but not over three hundred ninety thousand dollars  the
   23  amount  shall  be  the  sum of (1) eighteen thousand eight hundred fifty
   24  dollars, (2) seven and one-tenth percent of the excess  of  the  [entire
   25  net]  BUSINESS  income base over two hundred ninety thousand dollars but
   26  not over three hundred ninety thousand dollars and (3) four and  thirty-
   27  five  hundredths  percent  of  the  excess  of the [entire net] BUSINESS
   28  income base over three hundred fifty thousand dollars but not over three
   29  hundred ninety thousand dollars;
   30    (v) if the taxable period to which [subparagraphs  (i),  (ii),  (iii),
   31  and]  SUBPARAGRAPH  (iv)  of this paragraph [apply] APPLIES is less than
   32  twelve months, the amount prescribed by this paragraph shall be computed
   33  as follows:
   34    (A) Multiply the [entire net] BUSINESS income base for  such  taxpayer
   35  by twelve;
   36    (B)  Divide  the result obtained in (A) by the number of months in the
   37  taxable year;
   38    (C) Compute an amount pursuant to [subparagraphs (i) and (ii)] SUBPAR-
   39  AGRAPH (IV) as if the result obtained in (B) were the taxpayer's [entire
   40  net] BUSINESS income base;
   41    (D) Multiply the result obtained in (C) by the number of months in the
   42  taxpayer's taxable year;
   43    (E) Divide the result obtained in (D) by twelve.
   44    (vi) for taxable years beginning on or  after  January  [thirty-first]
   45  FIRST,  two  thousand  [seven]  FOURTEEN,  the amount prescribed by this
   46  paragraph for a taxpayer which is a  qualified  New  York  manufacturer,
   47  shall  be  computed at the rate of [six and one-half (6.5)] ZERO percent
   48  of the taxpayer's [entire net] BUSINESS income base. [For taxable  years
   49  beginning  on  or  after  January  first, two thousand twelve and before
   50  January first, two thousand fifteen, the amount prescribed by this para-
   51  graph for a taxpayer which is an eligible qualified New York manufactur-
   52  er shall be computed at the rate of three and one-quarter (3.25) percent
   53  of the taxpayer's entire net income base.] The term "manufacturer" shall
   54  mean a taxpayer which during the taxable year is principally engaged  in
   55  the production of goods by manufacturing, processing, assembling, refin-
   56  ing,  mining,  extracting, farming, agriculture, horticulture, floricul-
       S. 6359--D                         48                         A. 8559--D

    1  ture, viticulture or commercial fishing.  However,  the  generation  and
    2  distribution  of  electricity,  the distribution of natural gas, and the
    3  production of steam associated with the generation of electricity  shall
    4  not be qualifying activities for a manufacturer under this subparagraph.
    5  Moreover,  the  combined  group shall be considered a "manufacturer" for
    6  purposes of this subparagraph only if  the  combined  group  during  the
    7  taxable  year is principally engaged in the activities set forth in this
    8  paragraph, or any combination thereof. A taxpayer or  a  combined  group
    9  shall  be "principally engaged" in activities described above if, during
   10  the taxable year, more than fifty percent of the gross receipts  of  the
   11  taxpayer or combined group, respectively, are derived from receipts from
   12  the  sale  of goods produced by such activities. In computing a combined
   13  group's gross receipts, intercorporate receipts shall be  eliminated.  A
   14  "qualified  New  York manufacturer" is a manufacturer which has property
   15  in New York which is described in [clause (A)  of  subparagraph  (i)  of
   16  paragraph  (b)  of]  subdivision [twelve of this section] ONE OF SECTION
   17  TWO HUNDRED TEN-B OF THIS ARTICLE and either (I) the adjusted  basis  of
   18  such  property for federal income tax purposes at the close of the taxa-
   19  ble year is at least one million dollars or (II) all  of  its  real  and
   20  personal property is located in New York. [In addition, a "qualified New
   21  York  manufacturer"  means  a  taxpayer  which is defined as a qualified
   22  emerging technology company under paragraph (c) of  subdivision  one  of
   23  section  thirty-one  hundred two-e of the public authorities law regard-
   24  less of the ten million dollar limitation expressed in subparagraph  one
   25  of  such  paragraph (c). The commissioner shall establish guidelines and
   26  criteria that specify requirements by which a manufacturer may be  clas-
   27  sified  as  an  eligible  qualified  New York manufacturer. Criteria may
   28  include but not be limited to factors such as regional unemployment, the
   29  economic impact that manufacturing has  on  the  surrounding  community,
   30  population decline within the region and median income within the region
   31  in  which  the manufacturer is located. In establishing these guidelines
   32  and criteria, the commissioner shall endeavor that the total annual cost
   33  of the lower rates shall not  exceed  twenty-five  million  dollars.]  A
   34  TAXPAYER  OR,  IN  THE CASE OF A COMBINED REPORT, A COMBINED GROUP, THAT
   35  DOES NOT SATISFY THE PRINCIPALLY ENGAGED TEST MAY  BE  A  QUALIFIED  NEW
   36  YORK  MANUFACTURER  IF THE TAXPAYER OR THE COMBINED GROUP EMPLOYS DURING
   37  THE TAXABLE YEAR AT LEAST TWO THOUSAND FIVE HUNDRED EMPLOYEES  IN  MANU-
   38  FACTURING IN NEW YORK AND THE TAXPAYER OR THE COMBINED GROUP HAS PROPER-
   39  TY  IN  THE STATE USED IN MANUFACTURING, THE ADJUSTED BASIS OF WHICH FOR
   40  FEDERAL INCOME TAX PURPOSES AT THE CLOSE OF THE TAXABLE YEAR IS AT LEAST
   41  ONE HUNDRED MILLION DOLLARS.
   42    (vii) For a TAXPAYER THAT IS DEFINED AS A qualified [New York manufac-
   43  turer, as defined in subparagraph  (vi)  of  this  paragraph,]  EMERGING
   44  TECHNOLOGY  COMPANY  UNDER  PARAGRAPH  (C) OF SUBDIVISION ONE OF SECTION
   45  THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW REGARDLESS OF THE
   46  TEN MILLION DOLLAR LIMITATION EXPRESSED  IN  SUBPARAGRAPH  ONE  OF  SUCH
   47  PARAGRAPH  (C) the rate at which the tax is computed in effect for taxa-
   48  ble years beginning on or after January first, two thousand thirteen and
   49  before January first, two thousand fourteen for SUCH qualified [New York
   50  manufacturers] EMERGING TECHNOLOGY COMPANIES shall be  reduced  by  nine
   51  and  two-tenths percent for taxable years commencing on or after January
   52  first, two thousand fourteen and  before  January  first,  two  thousand
   53  fifteen, twelve and three-tenths percent for taxable years commencing on
   54  or  after  January first, two thousand fifteen and before January first,
   55  two thousand sixteen, fifteen and four-tenths percent for taxable  years
   56  commencing  on  or  after January first, two thousand sixteen and before
       S. 6359--D                         49                         A. 8559--D

    1  January first, two thousand eighteen, and twenty-five percent for  taxa-
    2  ble years beginning on or after January first, two thousand eighteen.
    3    (VIII)  (A)  IN COMPUTING THE BUSINESS INCOME BASE, TAXPAYERS SHALL BE
    4  ALLOWED BOTH A PRIOR NET OPERATING  LOSS  CONVERSION  SUBTRACTION  UNDER
    5  THIS  SUBPARAGRAPH AND A NET OPERATING LOSS DEDUCTION UNDER SUBPARAGRAPH
    6  (IX)  OF  THIS  PARAGRAPH.  THE  PRIOR  NET  OPERATING  LOSS  CONVERSION
    7  SUBTRACTION  COMPUTED  UNDER  THIS SUBPARAGRAPH SHALL BE APPLIED AGAINST
    8  THE BUSINESS  INCOME  BASE  BEFORE  THE  NET  OPERATING  LOSS  DEDUCTION
    9  COMPUTED UNDER SUBPARAGRAPH (IX) OF THIS PARAGRAPH.
   10    (B) PRIOR NET OPERATING LOSS CONVERSION SUBTRACTION.
   11    (1) DEFINITIONS.
   12    (I)  "BASE  YEAR"  MEANS  THE  LAST TAXABLE YEAR BEGINNING ON OR AFTER
   13  JANUARY FIRST, TWO THOUSAND FOURTEEN AND BEFORE JANUARY FIRST, TWO THOU-
   14  SAND FIFTEEN.
   15    (II) "UNABSORBED NET OPERATING LOSS" MEANS THE UNABSORBED  PORTION  OF
   16  NET OPERATING LOSS AS CALCULATED UNDER PARAGRAPH (F) OF SUBDIVISION NINE
   17  OF  SECTION  TWO  HUNDRED  EIGHT  OF THIS ARTICLE OR SUBSECTION (K-1) OF
   18  SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS CHAPTER  AS  SUCH  SECTIONS
   19  WERE IN EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN, THAT WAS
   20  NOT  DEDUCTIBLE IN PREVIOUS TAXABLE YEARS AND WAS ELIGIBLE FOR CARRYOVER
   21  ON THE LAST DAY  OF  THE  BASE  YEAR  SUBJECT  TO  THE  LIMITATIONS  FOR
   22  DEDUCTION   UNDER  SUCH  SECTIONS,  INCLUDING  ANY  NET  OPERATING  LOSS
   23  SUSTAINED BY THE TAXPAYER DURING THE BASE YEAR.
   24    (III)  "BASE  YEAR  BAP"  MEANS  THE  TAXPAYER'S  BUSINESS  ALLOCATION
   25  PERCENTAGE  AS  CALCULATED  UNDER  PARAGRAPH (A) OF SUBDIVISION THREE OF
   26  THIS SECTION FOR THE BASE YEAR, OR THE TAXPAYER'S ALLOCATION  PERCENTAGE
   27  AS  CALCULATED UNDER SECTION FOURTEEN HUNDRED FIFTY-FOUR OF THIS CHAPTER
   28  FOR PURPOSES OF CALCULATING ENTIRE NET INCOME FOR THE BASE YEAR, AS SUCH
   29  SECTIONS WERE IN EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN.
   30    (IV) "BASE YEAR TAX RATE" MEANS THE TAXPAYER'S TAX RATE FOR  THE  BASE
   31  YEAR  AS  CALCULATED  UNDER  THIS PARAGRAPH OR SUBSECTION (A) OF SECTION
   32  FOURTEEN HUNDRED FIFTY-FIVE OF THIS CHAPTER, AS SUCH PROVISIONS WERE  IN
   33  EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN.
   34    (2)  THE  PRIOR  NET  OPERATING  LOSS  CONVERSION SUBTRACTION SHALL BE
   35  CALCULATED AS FOLLOWS:
   36    (I) THE TAXPAYER SHALL FIRST CALCULATE THE TAX VALUE OF ITS UNABSORBED
   37  NET OPERATING LOSS FOR THE BASE YEAR. THE VALUE IS EQUAL TO THE  PRODUCT
   38  OF  (I) THE AMOUNT OF THE TAXPAYER'S UNABSORBED NET OPERATING LOSS, (II)
   39  THE TAXPAYER'S BASE YEAR BAP, AND (III) THE  TAXPAYER'S  BASE  YEAR  TAX
   40  RATE.
   41    (II)  THE  PRODUCT DETERMINED UNDER ITEM (I) OF THIS SUBCLAUSE IS THEN
   42  DIVIDED BY SIX AND ONE-HALF PERCENT, OR IN THE CASE OF A  QUALIFIED  NEW
   43  YORK  MANUFACTURER,  FIVE  AND  SEVEN-TENTHS  PERCENT. THIS RESULT SHALL
   44  EQUAL THE TAXPAYER'S PRIOR NET  OPERATING  LOSS  CONVERSION  SUBTRACTION
   45  POOL.
   46    (III)  THE  TAXPAYER'S PRIOR NET OPERATING LOSS CONVERSION SUBTRACTION
   47  FOR THE TAXABLE YEAR SHALL EQUAL ONE-TENTH OF  ITS  NET  OPERATING  LOSS
   48  CONVERSION  SUBTRACTION POOL PLUS ANY AMOUNT OF UNUSED PRIOR NET OPERAT-
   49  ING LOSS CONVERSION SUBTRACTION FROM PRECEDING TAXABLE YEARS.  PROVIDED,
   50  HOWEVER, THE PRIOR NET OPERATING LOSS CONVERSION SUBTRACTION OF A  SMALL
   51  BUSINESS  CORPORATION,  AS DEFINED IN PARAGRAPH (F) OF THIS SUBDIVISION,
   52  AS OF THE LAST DAY OF THE  BASE  YEAR,  SHALL  NOT  BE  SUBJECT  TO  THE
   53  ONE-TENTH LIMITATION IN THE PREVIOUS SENTENCE.
   54    (IV)  IN  LIEU  OF  THE  SUBTRACTION  DESCRIBED  IN ITEM (III) OF THIS
   55  SUBCLAUSE, IF THE TAXPAYER SO ELECTS, THE TAXPAYER'S PRIOR NET OPERATING
   56  LOSS CONVERSION SUBTRACTION FOR THE TAX  YEARS  BEGINNING  ON  OR  AFTER
       S. 6359--D                         50                         A. 8559--D

    1  JANUARY  FIRST, TWO THOUSAND FIFTEEN AND BEFORE JANUARY FIRST, TWO THOU-
    2  SAND SEVENTEEN SHALL EQUAL IN EACH YEAR, NOT MORE THAN ONE-HALF  OF  ITS
    3  NET  OPERATING LOSS CONVERSION SUBTRACTION POOL. THE TAXPAYER SHALL MAKE
    4  SUCH ELECTION ON ITS RETURN FOR THE TAX YEAR BEGINNING ON OR AFTER JANU-
    5  ARY  FIRST,  TWO THOUSAND FIFTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND
    6  SIXTEEN BY THE DUE DATE FOR  SUCH  RETURN  (DETERMINED  WITH  REGARD  TO
    7  EXTENSIONS).
    8    (3)  COMBINED  GROUPS.  (I)  WHERE A TAXPAYER WAS PROPERLY INCLUDED OR
    9  REQUIRED TO BE INCLUDED IN A COMBINED REPORT FOR THE BASE YEAR  PURSUANT
   10  TO SECTION TWO HUNDRED ELEVEN OF THIS ARTICLE OR A COMBINED RETURN UNDER
   11  SECTION  FOURTEEN  HUNDRED  SIXTY-TWO  OF THIS CHAPTER, AS SUCH SECTIONS
   12  WERE IN EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN, AND  THE
   13  MEMBERS  OF  THE  COMBINED  GROUP  FOR THE BASE YEAR ARE THE SAME AS THE
   14  MEMBERS OF THE COMBINED GROUP FOR THE TAXABLE YEAR IMMEDIATELY  SUCCEED-
   15  ING  THE  BASE  YEAR,  THE  COMBINED GROUP SHALL CALCULATE ITS PRIOR NET
   16  OPERATING LOSS CONVERSION SUBTRACTION POOL USING  THE  COMBINED  GROUP'S
   17  TOTAL  UNABSORBED  NET  OPERATING LOSS, BASE YEAR BAP, AND BASE YEAR TAX
   18  RATE.
   19    (II) IF A COMBINED GROUP INCLUDES ADDITIONAL MEMBERS  IN  THE  TAXABLE
   20  YEAR  IMMEDIATELY SUCCEEDING THE BASE YEAR THAT WERE NOT INCLUDED IN THE
   21  COMBINED GROUP DURING THE BASE YEAR, EACH BASE YEAR COMBINED  GROUP  AND
   22  EACH  TAXPAYER THAT FILED SEPARATELY IN THE BASE YEAR BUT IS INCLUDED IN
   23  THE COMBINED GROUP IN THE TAXABLE YEAR SUCCEEDING THE  BASE  YEAR  SHALL
   24  CALCULATE  ITS PRIOR NET OPERATING LOSS CONVERSION SUBTRACTION POOL, AND
   25  THE SUM OF THE POOLS SHALL BE THE  COMBINED  PRIOR  NET  OPERATING  LOSS
   26  CONVERSION SUBTRACTION POOL OF THE COMBINED GROUP.
   27    (III) IF A TAXPAYER WAS PROPERLY INCLUDED IN A COMBINED REPORT FOR THE
   28  BASE YEAR AND FILES A SEPARATE REPORT IN A SUBSEQUENT TAXABLE YEAR, THEN
   29  THE  AMOUNT OF REMAINING PRIOR NET OPERATING LOSS CONVERSION SUBTRACTION
   30  ALLOWED TO THE TAXPAYER FILING SUCH SEPARATE  REPORT  SHALL  BE  PROPOR-
   31  TIONATE  TO  THE  AMOUNT THAT SUCH TAXPAYER CONTRIBUTED TO THE PRIOR NET
   32  OPERATING LOSS CONVERSION SUBTRACTION POOL ON A COMBINED BASIS, AND  THE
   33  REMAINING PRIOR NET OPERATING LOSS CONVERSION SUBTRACTION ALLOWED TO THE
   34  REMAINING MEMBERS OF THE COMBINED GROUP SHALL BE REDUCED ACCORDINGLY.
   35    (IV)  IF  A  TAXPAYER FILED A SEPARATE REPORT FOR THE BASE YEAR AND IS
   36  PROPERLY INCLUDED IN A COMBINED REPORT IN  A  SUBSEQUENT  TAXABLE  YEAR,
   37  THEN  THE  PRIOR  NET  OPERATING LOSS CONVERSION SUBTRACTION POOL OF THE
   38  COMBINED GROUP SHALL BE INCREASED BY THE AMOUNT  OF  THE  REMAINING  NET
   39  OPERATING  LOSS  CONVERSION  SUBTRACTION  ALLOWED TO THE TAXPAYER AT THE
   40  TIME THE TAXPAYER IS PROPERLY INCLUDED IN THE COMBINED GROUP.
   41    (4) THE PRIOR NET OPERATING LOSS CONVERSION SUBTRACTION MAY BE USED TO
   42  REDUCE THE TAXPAYER'S TAX ON ALLOCATED BUSINESS INCOME TO THE HIGHER  OF
   43  THE  TAX  ON THE CAPITAL BASE UNDER PARAGRAPH (B) OF THIS SUBDIVISION OR
   44  THE FIXED DOLLAR MINIMUM UNDER PARAGRAPH (D) OF  THIS  SUBDIVISION.  ANY
   45  AMOUNT  OF UNUSED SUBTRACTION SHALL BE CARRIED FORWARD TO SUBSEQUENT TAX
   46  YEAR OR YEARS UNTIL TAX YEARS BEGINNING ON OR AFTER JANUARY  FIRST,  TWO
   47  THOUSAND  THIRTY-SIX.   SUCH AMOUNT CARRIED FORWARD SHALL NOT BE SUBJECT
   48  TO THE ONE-TENTH LIMITATION FOR THE SUBSEQUENT TAX YEAR OR YEARS. HOWEV-
   49  ER, IF THE TAXPAYER ELECTS TO  COMPUTE  ITS  PRIOR  NET  OPERATING  LOSS
   50  CONVERSION  SUBTRACTION  PURSUANT  TO ITEM (IV) OF SUBCLAUSE TWO OF THIS
   51  CLAUSE, THE  TAXPAYER  SHALL  NOT  CARRY  FORWARD  ANY  AMOUNT  OF  SUCH
   52  SUBTRACTION BEYOND ITS TAX YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO
   53  THOUSAND SIXTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND SEVENTEEN.
   54    (IX)  NET  OPERATING LOSS DEDUCTION.  IN COMPUTING THE BUSINESS INCOME
   55  BASE, A NET OPERATING LOSS DEDUCTION SHALL BE ALLOWED. A  NET  OPERATING
   56  LOSS DEDUCTION IS THE AMOUNT OF NET OPERATING LOSS OR LOSSES FROM ONE OR
       S. 6359--D                         51                         A. 8559--D

    1  MORE TAXABLE YEARS THAT ARE CARRIED FORWARD TO A PARTICULAR INCOME YEAR.
    2  A  NET  OPERATING  LOSS  IS  THE AMOUNT OF A BUSINESS LOSS INCURRED IN A
    3  PARTICULAR TAX YEAR MULTIPLIED BY THE APPORTIONMENT FACTOR FOR THAT YEAR
    4  AS DETERMINED UNDER SECTION TWO HUNDRED TEN-A OF THIS ARTICLE. THE MAXI-
    5  MUM  NET  OPERATING  DEDUCTION  THAT IS ALLOWED IN A TAXABLE YEAR IS THE
    6  AMOUNT THAT REDUCES THE TAXPAYER'S TAX ON ALLOCATED BUSINESS  INCOME  TO
    7  THE  HIGHER  OF THE TAX ON THE CAPITAL BASE OR THE FIXED DOLLAR MINIMUM.
    8  SUCH DEDUCTION AND LOSS ARE DETERMINED IN ACCORDANCE WITH THE FOLLOWING:
    9    (1) SUCH NET OPERATING LOSS DEDUCTION IS NOT  LIMITED  TO  THE  AMOUNT
   10  ALLOWED  UNDER  SECTION  ONE HUNDRED SEVENTY-TWO OF THE INTERNAL REVENUE
   11  CODE OR THE AMOUNT THAT WOULD HAVE BEEN ALLOWED IF THE TAXPAYER HAD  NOT
   12  MADE  AN  ELECTION  UNDER  SUBCHAPTER  S  OF CHAPTER ONE OF THE INTERNAL
   13  REVENUE CODE.
   14    (2) SUCH NET OPERATING LOSS DEDUCTION SHALL NOT INCLUDE ANY NET  OPER-
   15  ATING  LOSS  INCURRED DURING ANY TAXABLE YEAR BEGINNING PRIOR TO JANUARY
   16  FIRST, TWO THOUSAND FIFTEEN, OR DURING ANY TAXABLE  YEAR  IN  WHICH  THE
   17  TAXPAYER WAS NOT SUBJECT TO THE TAX IMPOSED BY THIS ARTICLE.
   18    (3) A TAXPAYER THAT FILES AS PART OF A FEDERAL CONSOLIDATED RETURN BUT
   19  ON  A  SEPARATE  BASIS  FOR  PURPOSES  OF  THIS ARTICLE MUST COMPUTE ITS
   20  DEDUCTION AND LOSS AS IF IT WERE FILING ON A SEPARATE BASIS FOR  FEDERAL
   21  INCOME TAX PURPOSES.
   22    (4)  A NET OPERATING LOSS MAY BE CARRIED FORWARD TO EACH OF THE TWENTY
   23  TAXABLE YEARS FOLLOWING THE TAXABLE YEAR OF THE LOSS.  A  NET  OPERATING
   24  LOSS  MAY  BE  CARRIED BACK TO EACH OF THE THREE TAXABLE YEARS PRECEDING
   25  THE TAXABLE YEAR OF THE LOSS; PROVIDED, HOWEVER NO LOSS CAN  BE  CARRIED
   26  BACK  TO  A  TAX YEAR PRIOR TO A TAX YEAR BEGINNING ON OR AFTER JANUARY,
   27  FIRST, TWO THOUSAND FIFTEEN. A TAXPAYER MUST APPLY BOTH OF THESE LIMITA-
   28  TIONS IN COMPUTING SUCH NET OPERATING LOSS DEDUCTION.
   29    (5) SUCH NET OPERATING LOSS DEDUCTION SHALL NOT INCLUDE ANY NET  OPER-
   30  ATING  LOSS  INCURRED DURING A NEW YORK S YEAR; PROVIDED, HOWEVER, A NEW
   31  YORK S YEAR MUST BE TREATED AS A TAXABLE YEAR FOR PURPOSES OF  DETERMIN-
   32  ING  THE  NUMBER  OF  TAXABLE YEARS TO WHICH A NET OPERATING LOSS MAY BE
   33  CARRIED FORWARD.
   34    (6) WHERE THERE ARE TWO OR MORE ALLOCATED  NET  OPERATING  LOSSES,  OR
   35  PORTIONS  THEREOF,  CARRIED FORWARD TO BE DEDUCTED IN ONE PARTICULAR TAX
   36  YEAR  FROM  ALLOCATED  BUSINESS  INCOME,  THE  EARLIEST  ALLOCATED  LOSS
   37  INCURRED MUST BE APPLIED FIRST.
   38    (b)  Capital  base.  (1)  The [amount prescribed by this paragraph for
   39  taxable years beginning before January first, two thousand  eight  shall
   40  be  computed  at .178  percent  for  each dollar of the taxpayer's total
   41  business and investment capital, or the portion thereof allocated within
   42  the state as hereinafter provided. For taxable  years  beginning  on  or
   43  after  January first, two thousand eight, the] amount prescribed by this
   44  paragraph shall be computed  at .15  percent  for  each  dollar  of  the
   45  taxpayer's total business [and investment] capital, or the portion ther-
   46  eof allocated within the state as hereinafter provided FOR TAXABLE YEARS
   47  BEGINNING  BEFORE  JANUARY  FIRST, TWO THOUSAND SIXTEEN. However, in the
   48  case of a cooperative housing corporation as  defined  in  the  internal
   49  revenue  code,  the  applicable  rate shall be .04 percent UNTIL TAXABLE
   50  YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND  TWENTY.    THE
   51  RATE  OF  TAX FOR SUBSEQUENT TAX YEARS SHALL BE AS FOLLOWS: .125 PERCENT
   52  FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND
   53  SIXTEEN  AND  BEFORE JANUARY FIRST, TWO THOUSAND SEVENTEEN; .100 PERCENT
   54  FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND
   55  SEVENTEEN  AND BEFORE JANUARY FIRST, TWO THOUSAND EIGHTEEN; .075 PERCENT
   56  FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND
       S. 6359--D                         52                         A. 8559--D

    1  EIGHTEEN  AND  BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN; .050 PERCENT
    2  FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND
    3  NINETEEN AND BEFORE JANUARY FIRST, TWO THOUSAND TWENTY; .025 PERCENT FOR
    4  TAXABLE  YEARS  BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY
    5  AND BEFORE JANUARY FIRST, TWO THOUSAND TWENTY-ONE; AND ZERO PERCENT  FOR
    6  YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY-ONE.  THE
    7  RATE  OF  TAX FOR A QUALIFIED NEW YORK MANUFACTURER FOR TAX YEARS SUBSE-
    8  QUENT TO TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
    9  FIFTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND  SIXTEEN  SHALL  BE  .106
   10  PERCENT FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
   11  SAND  SIXTEEN  AND  BEFORE  JANUARY  FIRST, TWO THOUSAND SEVENTEEN, .085
   12  PERCENT FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
   13  SAND SEVENTEEN AND BEFORE JANUARY FIRST,  TWO  THOUSAND  EIGHTEEN;  .056
   14  PERCENT FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
   15  SAND  EIGHTEEN  AND  BEFORE  JANUARY  FIRST, TWO THOUSAND NINETEEN; .038
   16  PERCENT FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
   17  SAND NINETEEN AND BEFORE JANUARY FIRST, THOUSAND  TWENTY;  .019  PERCENT
   18  FOR  TAXABLE  YEARS  BEGINNING  ON  OR AFTER JANUARY FIRST, TWO THOUSAND
   19  TWENTY AND BEFORE JANUARY  FIRST,  TWO  THOUSAND  TWENTY-ONE;  AND  ZERO
   20  PERCENT  FOR  YEARS  BEGINNING  ON  OR AFTER JANUARY FIRST, TWO THOUSAND
   21  TWENTY-ONE. In no event shall the amount prescribed  by  this  paragraph
   22  exceed  three  hundred  fifty  thousand  dollars  for qualified New York
   23  manufacturers and for all other taxpayers  [ten]  FIVE  million  dollars
   24  [for  taxable  years  beginning  on or after January first, two thousand
   25  eight but before January first, two  thousand  eleven  and  one  million
   26  dollars for taxable years beginning on or after January first, two thou-
   27  sand eleven].
   28    (2)  For  purposes  of  subparagraph  one  of this paragraph, the term
   29  "manufacturer" shall mean a taxpayer which during the  taxable  year  is
   30  principally  engaged  in the production of goods by manufacturing, proc-
   31  essing, assembling, refining, mining, extracting, farming,  agriculture,
   32  horticulture, floriculture, viticulture or commercial fishing. Moreover,
   33  for  purposes  of  computing  the capital base in a combined report, the
   34  combined group shall be considered a "manufacturer" for purposes of this
   35  subparagraph only if the combined group during the taxable year is prin-
   36  cipally engaged in the activities set forth in this subparagraph, or any
   37  combination thereof. A taxpayer or a combined group shall be "principal-
   38  ly engaged" in activities described above if, during the  taxable  year,
   39  more  than  fifty  percent  of  the  gross  receipts  of the taxpayer or
   40  combined group, respectively, are derived from receipts from the sale of
   41  goods produced by such activities. In computing a combined group's gross
   42  receipts, intercorporate receipts shall be eliminated. A "qualified  New
   43  York  manufacturer" is a manufacturer that has property in New York that
   44  is described in [clause (A) of subparagraph (i)  of  paragraph  (b)  of]
   45  subdivision  [twelve of this section] ONE OF SECTION 210-B OF THIS ARTI-
   46  CLE and either (i) the adjusted  basis  of  that  property  for  federal
   47  income  tax  purposes  at  the close of the taxable year is at least one
   48  million dollars or (ii) all of its real and personal property is located
   49  in New York. In addition, a "qualified New York  manufacturer"  means  a
   50  taxpayer  that  is  defined  as  a qualified emerging technology company
   51  under paragraph (c) of subdivision one  of  section  thirty-one  hundred
   52  two-e of the public authorities law regardless of the ten million dollar
   53  limitation  expressed in subparagraph one of such paragraph.  A TAXPAYER
   54  OR, IN THE CASE OF A COMBINED REPORT, A COMBINED GROUP,  THAT  DOES  NOT
   55  SATISFY  THE  PRINCIPALLY  ENGAGED  TEST  MAY  BE  A  QUALIFIED NEW YORK
   56  MANUFACTURER IF THE TAXPAYER OR THE COMBINED GROUP  EMPLOYS  DURING  THE
       S. 6359--D                         53                         A. 8559--D

    1  TAXABLE YEAR AT LEAST TWO THOUSAND FIVE HUNDRED EMPLOYEES IN MANUFACTUR-
    2  ING  IN  NEW YORK AND THE TAXPAYER OR THE COMBINED GROUP HAS PROPERTY IN
    3  THE STATE USED IN MANUFACTURING, THE ADJUSTED BASIS OF WHICH FOR FEDERAL
    4  INCOME  TAX  PURPOSES  AT  THE CLOSE OF THE TAXABLE YEAR IS AT LEAST ONE
    5  HUNDRED MILLION DOLLARS.
    6    [(3) For a qualified New York manufacturer, as defined in subparagraph
    7  two of this paragraph, the rate at which the tax is computed  in  effect
    8  for  taxable  years  beginning  on  or after January first, two thousand
    9  thirteen and before  January  first,  two  thousand  fourteen  shall  be
   10  reduced  by  nine and two-tenths percent for taxable years commencing on
   11  or after January first, two thousand fourteen and before January  first,
   12  two  thousand fifteen, twelve and three-tenths percent for taxable years
   13  commencing on or after January first, two thousand  fifteen  and  before
   14  January first, two thousand sixteen, fifteen and four-tenths percent for
   15  taxable years commencing on or after January first, two thousand sixteen
   16  and before January first, two thousand eighteen, and twenty-five percent
   17  for  taxable  years  beginning  on  or after January first, two thousand
   18  eighteen.
   19    (c) Minimum taxable income bases.  (i)  For  taxable  years  beginning
   20  after  nineteen  hundred  eighty-six and before nineteen hundred eighty-
   21  nine, the amount prescribed by this paragraph shall be computed  at  the
   22  rate  of  three  and  one-half  percent  of  the taxpayer's pre-nineteen
   23  hundred ninety minimum taxable income base. For taxable years  beginning
   24  in nineteen hundred eighty-nine, the amount prescribed by this paragraph
   25  shall  be  computed  at  the rate of five percent of the taxpayer's pre-
   26  nineteen hundred ninety minimum taxable income base. A "taxpayer's  pre-
   27  nineteen  hundred  ninety  minimum  taxable  income base" shall mean the
   28  portion of the taxpayer's entire net income allocated within  the  state
   29  as  hereinafter  provided, subject to any modification required by para-
   30  graphs (d) and (e) of subdivision three of this section;
   31    (ii) (A) For taxable years beginning on or after  January  first,  two
   32  thousand  seven,  the  amount  prescribed  by  this  paragraph  shall be
   33  computed at the rate of one and one-half percent of the taxpayer's mini-
   34  mum taxable income base. The "taxpayer's minimum  taxable  income  base"
   35  shall  mean  the  portion of the taxpayer's minimum taxable income allo-
   36  cated within the state as hereinafter provided, subject to any modifica-
   37  tions required by paragraphs (d) and (e) of subdivision  three  of  this
   38  section.
   39    (B)  For  taxable years beginning on or after January first, two thou-
   40  sand twelve and before January first, two thousand fifteen,  the  amount
   41  prescribed by this paragraph for an eligible qualified New York manufac-
   42  turer  shall  be  computed  at the rate of seventy-five hundredths (.75)
   43  percent of the taxpayer's minimum taxable income base. For  purposes  of
   44  this  clause,  the term "eligible qualified New York manufacturer" shall
   45  have the same meaning as in subparagraph (vi) of paragraph (a)  of  this
   46  subdivision.
   47    (iii)  For  a  qualified New York manufacturer, as defined in subpara-
   48  graph (vi) of paragraph (a) of this subdivision, the rate at  which  the
   49  tax  is computed in effect for taxable years beginning on or after Janu-
   50  ary first, two thousand thirteen and before January first, two  thousand
   51  fourteen  for  qualified New York manufacturers shall be reduced by nine
   52  and two-tenths percent for taxable years commencing on or after  January
   53  first,  two  thousand  fourteen  and  before January first, two thousand
   54  fifteen, twelve and three-tenths percent for taxable years commencing on
   55  or after January first, two thousand fifteen and before  January  first,
   56  two  thousand sixteen, fifteen and four-tenths percent for taxable years
       S. 6359--D                         54                         A. 8559--D

    1  commencing on or after January first, two thousand  sixteen  and  before
    2  January  first, two thousand eighteen, and twenty-five percent for taxa-
    3  ble years beginning on or after January first, two thousand eighteen.]
    4    (d) Fixed dollar minimum. (1) The [amount prescribed by this paragraph
    5  shall be for a taxpayer which during the taxable year has:
    6    (A)  a gross payroll of six million two hundred fifty thousand dollars
    7  or more, one thousand five hundred dollars;
    8    (B) a gross payroll of less than six million two hundred  fifty  thou-
    9  sand dollars but more than one million dollars, four hundred twenty-five
   10  dollars;
   11    (C)  a gross payroll of no more than one million dollars but more than
   12  five hundred thousand dollars, three hundred twenty-five dollars;
   13    (D) a gross payroll of no more than five hundred thousand dollars  but
   14  more  than  two  hundred fifty thousand dollars, two hundred twenty-five
   15  dollars;
   16    (E) a gross payroll of two hundred  fifty  thousand  dollars  or  less
   17  (except  as  prescribed in clause (F) of this subparagraph), one hundred
   18  dollars;
   19    (F) a gross payroll of  one  thousand  dollars  or  less,  with  total
   20  receipts  within and without this state of one thousand dollars or less,
   21  and the average value of the assets of which are one thousand dollars or
   22  less, eight hundred dollars.
   23    (2) For purposes of this paragraph:
   24    (A) gross payroll shall be the same as the total wages,  salaries  and
   25  other  personal  service  compensation  of all the taxpayer's employees,
   26  within and without this state, as defined in subparagraph three of para-
   27  graph (a) of subdivision three of  this  section,  except  that  general
   28  executive officers shall not be excluded.
   29    (B)  total  receipts  shall be the same as receipts within and without
   30  this state as defined in subparagraph two of paragraph (a)  of  subdivi-
   31  sion three of this section.
   32    (C)  average  value  of  the assets shall be the same as prescribed by
   33  subdivision two of this section without reduction for liabilities.
   34    (3) If the taxable  year  is  less  than  twelve  months,  the  amount
   35  prescribed  by this paragraph shall be reduced by twenty-five percent if
   36  the period for which the taxpayer is subject to tax  is  more  than  six
   37  months  but not more than nine months and by fifty percent if the period
   38  for which the taxpayer is subject to tax is not more  than  six  months.
   39  Provided,  however,  that in determining the amount of gross payroll and
   40  total receipts for purposes of subparagraph one of this paragraph, where
   41  the taxable year is less than twelve months, the amount of each shall be
   42  determined by dividing the amount of each with respect  to  the  taxable
   43  year  by  the  number of months in such taxable year and multiplying the
   44  result by twelve. If the taxable year is less than  twelve  months,  the
   45  amount  of  New  York receipts for purposes of subparagraph four of this
   46  paragraph is determined by dividing the amount of the receipts  for  the
   47  taxable year by the number of months in the taxable year and multiplying
   48  the result by twelve.
   49    (4)  Notwithstanding  subparagraphs one and two of this paragraph, for
   50  taxable years beginning on or after January first, two  thousand  eight,
   51  the]  amount  prescribed  by  this paragraph for New York S corporations
   52  will be determined in accordance with the following table:

   53  If New York receipts are:                The fixed dollar minimum tax is:
   54   not more than $100,000                               $   25
   55   more than $100,000 but not over $250,000             $   50
       S. 6359--D                         55                         A. 8559--D

    1   more than $250,000 but not over $500,000             $  175
    2   more than $500,000 but not over $1,000,000           $  300
    3   more than $1,000,000 but not over $5,000,000         $1,000
    4   more than $5,000,000 but not over $25,000,000        $3,000
    5   Over $25,000,000                                     $4,500

    6  [Otherwise the amount prescribed by this paragraph will be determined in
    7  accordance with the following table:]
    8  PROVIDED  FURTHER,  THE AMOUNT PRESCRIBED BY THIS PARAGRAPH FOR A QUALI-
    9  FIED NEW YORK MANUFACTURER, AS DEFINED IN SUBPARAGRAPH (VI) OF PARAGRAPH
   10  (A) OF THIS SUBDIVISION, AND A  QUALIFIED  EMERGING  TECHNOLOGY  COMPANY
   11  UNDER  PARAGRAPH  (C)  OF  SUBDIVISION ONE OF SECTION THIRTY-ONE HUNDRED
   12  TWO-E OF THE PUBLIC AUTHORITIES LAW REGARDLESS OF THE TEN MILLION DOLLAR
   13  LIMITATION EXPRESSED IN SUBPARAGRAPH ONE OF SUCH PARAGRAPH (C)  WILL  BE
   14  DETERMINED IN ACCORDANCE WITH THE FOLLOWING TABLES:
   15  FOR  TAX  YEARS BEGINNING ON OR AFTER JANUARY 1, 2014 AND BEFORE JANUARY
   16  1, 2015:

   17  IF NEW YORK RECEIPTS ARE:                THE FIXED DOLLAR MINIMUM TAX IS:
   18   NOT MORE THAN $100,000                               $   23
   19   MORE THAN $100,000 BUT NOT OVER $250,000             $   68
   20   MORE THAN $250,000 BUT NOT OVER $500,000             $  159
   21   MORE THAN $500,000 BUT NOT OVER $1,000,000           $  454
   22   MORE THAN $1,000,000 BUT NOT OVER $5,000,000         $1,362
   23   MORE THAN $5,000,000 BUT NOT OVER $25,000,000        $3,178
   24   OVER $25,000,000                                     $4,500

   25  FOR TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 2015 AND  BEFORE  JANUARY
   26  1, 2016:

   27  IF NEW YORK RECEIPTS ARE:                THE FIXED DOLLAR MINIMUM TAX IS:
   28   NOT MORE THAN $100,000                               $   22
   29   MORE THAN $100,000 BUT NOT OVER $250,000             $   66
   30   MORE THAN $250,000 BUT NOT OVER $500,000             $  153
   31   MORE THAN $500,000 BUT NOT OVER $1,000,000           $  439
   32   MORE THAN $1,000,000 BUT NOT OVER $5,000,000         $1,316
   33   MORE THAN $5,000,000 BUT NOT OVER $25,000,000        $3,070
   34   OVER $25,000,000                                     $4,385

   35  FOR  TAX  YEARS BEGINNING ON OR AFTER JANUARY 1, 2016 AND BEFORE JANUARY
   36  1, 2018:

   37  IF NEW YORK RECEIPTS ARE:                THE FIXED DOLLAR MINIMUM TAX IS:
   38   NOT MORE THAN $100,000                               $   21
   39   MORE THAN $100,000 BUT NOT OVER $250,000             $   63
   40   MORE THAN $250,000 BUT NOT OVER $500,000             $  148
   41   MORE THAN $500,000 BUT NOT OVER $1,000,000           $  423
   42   MORE THAN $1,000,000 BUT NOT OVER $5,000,000         $1,269
   43   MORE THAN $5,000,000 BUT NOT OVER $25,000,000        $2,961
   44   OVER $25,000,000                                     $4,230

   45  FOR TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 2018:

   46  IF NEW YORK RECEIPTS ARE:                THE FIXED DOLLAR MINIMUM TAX IS:
   47   NOT MORE THAN $100,000                               $   19
   48   MORE THAN $100,000 BUT NOT OVER $250,000             $   56
       S. 6359--D                         56                         A. 8559--D

    1   MORE THAN $250,000 BUT NOT OVER $500,000             $  131
    2   MORE THAN $500,000 BUT NOT OVER $1,000,000           $  375
    3   MORE THAN $1,000,000 BUT NOT OVER $5,000,000         $1,125
    4   MORE THAN $5,000,000 BUT NOT OVER $25,000,000        $2,625
    5   OVER $25,000,000                                     $3,750

    6  OTHERWISE  THE AMOUNT PRESCRIBED BY THIS PARAGRAPH WILL BE DETERMINED IN
    7  ACCORDANCE WITH THE FOLLOWING TABLE:

    8  If New York receipts are:                The fixed dollar minimum tax is:
    9   not more than $100,000                               $   25
   10   more than $100,000 but not over $250,000             $   75
   11   more than $250,000 but not over $500,000             $  175
   12   more than $500,000 but not over $1,000,000           $  500
   13   more than $1,000,000 but not over $5,000,000         $1,500
   14   more than $5,000,000 but not over $25,000,000        $3,500
   15   [Over] MORE THAN $25,000,000
   16   BUT NOT OVER $50,000,000                             $5,000
   17   MORE THAN $50,000,000 BUT NOT OVER $100,000,000      $10,000
   18   MORE THAN $100,000,000 BUT NOT OVER $250,000,000     $20,000
   19   MORE THAN $250,000,000 BUT NOT OVER $500,000,000     $50,000
   20   MORE THAN $500,000,000 BUT NOT OVER $1,000,000,000   $100,000
   21   OVER $1,000,000,000                                  $200,000

   22  For purposes of this paragraph,  New  York  receipts  are  the  receipts
   23  [computed in accordance with subparagraph two of paragraph (a) of subdi-
   24  vision  three  of  this]  INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT
   25  FACTOR DETERMINED UNDER section TWO HUNDRED TEN-A for the taxable year.
   26    (2) IF THE TAXABLE YEAR IS LESS THAN TWELVE MONTHS, THE AMOUNT OF  NEW
   27  YORK  RECEIPTS  IS DETERMINED BY DIVIDING THE AMOUNT OF THE RECEIPTS FOR
   28  THE TAXABLE YEAR BY THE NUMBER OF MONTHS IN THE TAXABLE YEAR AND  MULTI-
   29  PLYING  THE RESULT BY TWELVE. IN THE CASE OF A TERMINATION YEAR OF A NEW
   30  YORK S CORPORATION, THE SUM OF THE TAX COMPUTED UNDER THIS PARAGRAPH FOR
   31  THE S SHORT YEAR AND FOR THE C SHORT YEAR SHALL NOT  BE  LESS  THAN  THE
   32  AMOUNT  COMPUTED  UNDER  THIS PARAGRAPH AS IF THE CORPORATION WERE A NEW
   33  YORK C CORPORATION FOR THE ENTIRE TAXABLE YEAR.
   34    [(5) For taxable years beginning on or after January first, two  thou-
   35  sand  twelve and before January first, two thousand fifteen, the amounts
   36  prescribed in subparagraphs one and four of this paragraph as the  fixed
   37  dollar minimum tax for an eligible qualified New York manufacturer shall
   38  be  one-half  of the amounts stated in those subparagraphs. For purposes
   39  of this subparagraph, the term "eligible qualified New York  manufactur-
   40  er" shall have the same meaning as in subparagraph (vi) of paragraph (a)
   41  of this subdivision.
   42    (6)  For a qualified New York manufacturer, as defined in subparagraph
   43  (vi) of paragraph (a) of this subdivision,  the  amounts  prescribed  in
   44  subparagraphs one and four of this paragraph in effect for taxable years
   45  beginning  on  or  after January first, two thousand thirteen and before
   46  January first, two thousand fourteen for qualified New York  manufactur-
   47  ers  shall  be  reduced by nine and two-tenths percent for taxable years
   48  commencing on or after January first, two thousand fourteen  and  before
   49  January first, two thousand fifteen, twelve and three-tenths percent for
   50  taxable years commencing on or after January first, two thousand fifteen
   51  and  before January first, two thousand sixteen, fifteen and four-tenths
   52  percent for taxable years commencing on  or  after  January  first,  two
   53  thousand  sixteen  and  before January first, two thousand eighteen, and
       S. 6359--D                         57                         A. 8559--D

    1  twenty-five percent for taxable years  beginning  on  or  after  January
    2  first, two thousand eighteen.
    3    (e)  Subsidiary  capital base. (1) The amount prescribed by this para-
    4  graph shall be computed at the rate of nine-tenths of a  mill  for  each
    5  dollar  of  the  portion  of the taxpayer's subsidiary capital allocated
    6  within the state as hereinafter provided.
    7    (2) For purposes of this paragraph,  the  amount  of  such  subsidiary
    8  capital,  prior  to  allocation,  shall  be  reduced  by  the applicable
    9  percentage of the taxpayer's (i) investments in the stock  of,  and  any
   10  indebtedness from, subsidiaries subject to tax under section one hundred
   11  eighty-six  of this chapter (but only to the extent such indebtedness is
   12  included in subsidiary capital), and (ii) investments in the  stock  of,
   13  and  any  indebtedness  from,  subsidiaries subject to tax under article
   14  thirty-two or thirty-three of this chapter (but only to the extent  such
   15  indebtedness  is included in subsidiary capital). For purposes of clause
   16  (i) of this subparagraph, the  applicable  percentage  shall  be  thirty
   17  percent  for  taxable  years  beginning in two thousand, and one hundred
   18  percent for taxable years beginning after two thousand. For purposes  of
   19  clause (ii) of this subparagraph, the applicable percentage shall be one
   20  hundred percent for taxable years beginning after nineteen hundred nine-
   21  ty-nine.]
   22    (f)  For  purposes of this section, the term "small business taxpayer"
   23  shall mean a taxpayer (i) which has an entire net  income  of  not  more
   24  than  three  hundred  ninety thousand dollars for the taxable year; (ii)
   25  [which constitutes a small business as defined in section 1244(c)(3)  of
   26  internal revenue code (without regard to the second sentence of subpara-
   27  graph (A) thereof) as of the last day of the taxable year] THE AGGREGATE
   28  AMOUNT  OF  MONEY  AND  OTHER  PROPERTY  RECEIVED BY THE CORPORATION FOR
   29  STOCK, AS A CONTRIBUTION TO CAPITAL, AND AS PAID-IN  SURPLUS,  DOES  NOT
   30  EXCEED  ONE  MILLION DOLLARS; [and] (iii) which is not part of an affil-
   31  iated group, as defined in section 1504 of the  internal  revenue  code,
   32  unless  such  group,  if  it  had filed a report under this article on a
   33  combined basis, would have itself qualified as a "small business taxpay-
   34  er" pursuant to this subdivision; AND (IV) WHICH HAS AN  AVERAGE  NUMBER
   35  OF INDIVIDUALS, EXCLUDING GENERAL EXECUTIVE OFFICERS, EMPLOYED FULL-TIME
   36  IN  THE  STATE  DURING THE TAXABLE YEAR OF ONE HUNDRED OR FEWER.  If the
   37  taxable period to which subparagraph (i) of this  paragraph  applies  is
   38  less than twelve months, entire net income under such subparagraph shall
   39  be  placed  on  an  annual basis by multiplying the entire net income by
   40  twelve and dividing the result by the number of months  in  the  period.
   41  FOR  PURPOSES  OF  SUBPARAGRAPH (II) OF THIS PARAGRAPH, THE AMOUNT TAKEN
   42  INTO ACCOUNT WITH RESPECT TO ANY PROPERTY OTHER THAN MONEY SHALL BE  THE
   43  AMOUNT  EQUAL  TO THE ADJUSTED BASIS TO THE CORPORATION OF SUCH PROPERTY
   44  FOR DETERMINING GAIN, REDUCED BY ANY LIABILITY TO WHICH THE PROPERTY WAS
   45  SUBJECT OR WHICH WAS ASSUMED BY THE CORPORATION. THE DETERMINATION UNDER
   46  THE PRECEDING SENTENCE SHALL BE MADE AS OF THE  TIME  THE  PROPERTY  WAS
   47  RECEIVED  BY THE CORPORATION. FOR PURPOSES OF SUBPARAGRAPH (III) OF THIS
   48  SECTION, "AVERAGE NUMBER OF  INDIVIDUALS,  EXCLUDING  GENERAL  EXECUTIVE
   49  OFFICERS,  EMPLOYED  FULL-TIME"  SHALL  BE  COMPUTED BY ASCERTAINING THE
   50  NUMBER OF SUCH INDIVIDUALS EMPLOYED BY THE TAXPAYER ON THE  THIRTY-FIRST
   51  DAY  OF MARCH, THE THIRTIETH DAY OF JUNE, THE THIRTIETH DAY OF SEPTEMBER
   52  AND THE THIRTY-FIRST DAY OF DECEMBER DURING EACH TAXABLE YEAR  OR  OTHER
   53  APPLICABLE  PERIOD,  BY  ADDING  TOGETHER THE NUMBER OF SUCH INDIVIDUALS
   54  ASCERTAINED ON EACH OF SUCH DATES AND DIVIDING THE SUM  SO  OBTAINED  BY
   55  THE  NUMBER  OF  SUCH  DATES OCCURRING WITHIN SUCH TAXABLE YEAR OR OTHER
   56  APPLICABLE PERIOD. AN INDIVIDUAL EMPLOYED FULL-TIME MEANS AN EMPLOYEE IN
       S. 6359--D                         58                         A. 8559--D

    1  A JOB CONSISTING OF AT LEAST THIRTY-FIVE HOURS PER WEEK, OR TWO OR  MORE
    2  EMPLOYEES  WHO  ARE IN JOBS THAT TOGETHER CONSTITUTE THE EQUIVALENT OF A
    3  JOB  AT  LEAST  THIRTY-FIVE  HOURS  PER  WEEK  (FULL-TIME   EQUIVALENT).
    4  FULL-TIME EQUIVALENT EMPLOYEES IN THE STATE INCLUDES ALL EMPLOYEES REGU-
    5  LARLY CONNECTED WITH OR WORKING OUT OF AN OFFICE OR PLACE OF BUSINESS OF
    6  THE TAXPAYER WITHIN THE STATE.
    7    [(g)  New  York S corporations.  (1) General. The amount prescribed by
    8  this paragraph shall be, in the case of each New York S corporation, (i)
    9  the higher of the amounts prescribed in paragraphs (a) and (d)  of  this
   10  subdivision  (other  than  the  amount prescribed in the final clause of
   11  subparagraph one of that paragraph (d))  (ii)  reduced  by  the  article
   12  twenty-two  tax  equivalent;  provided,  however,  that  the amount thus
   13  determined shall not be less than the lowest of the  amounts  prescribed
   14  in  subparagraph  one  of that paragraph (d) (applying the provisions of
   15  subparagraph three of that paragraph as necessary).  Provided,  however,
   16  notwithstanding any provision of this paragraph, in taxable years begin-
   17  ning  in  two  thousand  three and before two thousand eight, the amount
   18  prescribed by this paragraph shall be the amount prescribed in  subpara-
   19  graph one of that paragraph (d) (applying the provisions of subparagraph
   20  three  of  that  paragraph as necessary) and applying the calculation of
   21  that amount in the case of a termination year as set forth  in  subpara-
   22  graph four of this paragraph as necessary. In taxable years beginning in
   23  two  thousand  eight and thereafter, the amount prescribed by this para-
   24  graph is the amount prescribed in subparagraph four  of  that  paragraph
   25  (d)  (applying the provisions of subparagraph three of that paragraph as
   26  necessary) and applying the calculation of that amount in the case of  a
   27  termination  year as set forth in subparagraph four of this paragraph as
   28  necessary.
   29    (2) Article twenty-two tax equivalent.  For  taxable  years  beginning
   30  before  July first, nineteen hundred ninety-nine, the article twenty-two
   31  tax equivalent is the amount computed under paragraph (a) of this subdi-
   32  vision by substituting for the rate therein the rate of  7.875  percent.
   33  For taxable years beginning after June thirtieth, nineteen hundred nine-
   34  ty-nine  and before July first, two thousand, the article twenty-two tax
   35  equivalent is the amount computed under paragraph (a) of  this  subdivi-
   36  sion by substituting for the rate therein the rate of 7.525 percent. For
   37  taxable  years  beginning  after June thirtieth, two thousand and before
   38  July first, two thousand one, the article twenty-two tax  equivalent  is
   39  the  amount  computed under paragraph (a) of this subdivision by substi-
   40  tuting for the rate therein the rate of 7.175 percent. For taxable years
   41  beginning after June thirtieth, two thousand one and before July  first,
   42  two  thousand three, the article twenty-two tax equivalent is the amount
   43  computed under paragraph (a) of this subdivision by substituting for the
   44  rate therein the rate of 6.85 percent. For taxable years beginning after
   45  June thirtieth, two thousand three, the article  twenty-two  tax  equiv-
   46  alent  is the amount computed under paragraph (a) of this subdivision by
   47  substituting for the rate therein the rate of 7.1425 percent.
   48    (3)  Small  business  taxpayers.  Notwithstanding  the  provisions  of
   49  subparagraphs one and two of this paragraph, in the case of a New York S
   50  corporation  which is a small business taxpayer, as defined in paragraph
   51  (f) of this subdivision, the following provisions shall apply:
   52    (A) For taxable years beginning before July  first,  nineteen  hundred
   53  ninety-nine,  the  article  twenty-two  tax  equivalent  is  the  amount
   54  computed under paragraph (a) of this subdivision by substituting for the
   55  rate therein the rate of 7.875 percent.
       S. 6359--D                         59                         A. 8559--D

    1    (B) For taxable years beginning after June thirtieth, nineteen hundred
    2  ninety-nine and before  July  first,  two  thousand  three,  the  amount
    3  computed  under  paragraph  (a)  of  this subdivision, as referred to in
    4  subparagraph one of this paragraph, shall be  computed  by  substituting
    5  for the rate therein the rate of 7.5 percent, and the article twenty-two
    6  tax equivalent under paragraph (a) of this subdivision shall be computed
    7  as follows:
    8    (i)  if  the entire net income base is not more than two hundred thou-
    9  sand dollars, the  article  twenty-two  tax  equivalent  is  the  amount
   10  computed under paragraph (a) of this subdivision by substituting for the
   11  rate therein the rate of 7.45 percent;
   12    (ii)  if  the entire net income base is more than two hundred thousand
   13  dollars but not over two hundred ninety thousand  dollars,  the  article
   14  twenty-two  tax  equivalent shall be computed as the sum of (I) fourteen
   15  thousand nine hundred  dollars,  (II)  six  and  eighty-five  hundredths
   16  percent  of the first fifty thousand dollars in excess of the entire net
   17  income base over two hundred  thousand  dollars,  and  (III)  three  and
   18  eighty-five  hundredths percent of the excess, if any, of the entire net
   19  income base over two hundred fifty thousand dollars.
   20    (C) For taxable years beginning after  June  thirtieth,  two  thousand
   21  three,  the  amount computed under paragraph (a) of this subdivision, as
   22  referred to in subparagraph one of this paragraph, shall be computed  by
   23  substituting for the rate therein the rate of 7.5 percent, and the arti-
   24  cle  twenty-two  tax  equivalent under paragraph (a) of this subdivision
   25  shall be computed as follows:
   26    (i) if the entire net income base is not more than two  hundred  thou-
   27  sand  dollars,  the  article  twenty-two  tax  equivalent  is the amount
   28  computed under paragraph (a) of this subdivision by substituting for the
   29  rate therein the rate of 7.4725 percent;
   30    (ii) if the entire net income base is more than two  hundred  thousand
   31  dollars  but  not  over two hundred ninety thousand dollars, the article
   32  twenty-two tax equivalent shall be computed as the sum of  (I)  fourteen
   33  thousand  nine  hundred  forty-five  dollars, (II) 7.1425 percent of the
   34  first fifty thousand dollars in excess of the  entire  net  income  base
   35  over  two  hundred  thousand  dollars,  and  (III) 5.4925 percent of the
   36  excess, if any, of the entire net income base  over  two  hundred  fifty
   37  thousand dollars.
   38    (4)  Termination  year. In the case of a termination year, the tax for
   39  the S short year shall be computed under this paragraph  without  regard
   40  to  the  fixed  dollar  minimum  tax prescribed in paragraph (d) of this
   41  subdivision, and the tax for the C short year shall  be  computed  under
   42  the  opening  paragraph  of this subdivision without regard to the fixed
   43  dollar minimum tax prescribed under such paragraph (d), but in no  event
   44  shall  the  sum  of  the  tax for the S short year and the tax for the C
   45  short year be less than the fixed dollar minimum tax under paragraph (d)
   46  of this subdivision computed as if the corporation were  a  New  York  C
   47  corporation for the entire taxable year.]
   48    S  13.  Subdivision  1-c  of section 210 of the tax law, as amended by
   49  chapter 1043 of the laws of 1981, the opening  paragraph  and  paragraph
   50  (a)  as amended by chapter 817 of the laws of 1987, and paragraph (b) as
   51  amended by section 12 of part Y of chapter 63 of the laws  of  2000,  is
   52  amended to read as follows:
   53    1-c. The computations specified in paragraph (b) of subdivision one of
   54  this section shall not apply to the first two taxable years of a taxpay-
   55  er  which,  for  one or both such years, is a small business [concern. A
   56  small business concern:
       S. 6359--D                         60                         A. 8559--D

    1    (a) is a taxpayer which is a small business corporation as defined  in
    2  paragraph  three  of subsection (c) of section twelve hundred forty-four
    3  of the internal revenue code (without regard to the second  sentence  of
    4  subparagraph (A) thereof) as of the last day of the taxable year,
    5    (b) is not a corporation over fifty percent of the number of shares of
    6  stock of which entitling the holders thereof to vote for the election of
    7  directors or trustees is owned by a taxpayer which (1) is subject to tax
    8  under this article; section one hundred eighty-three, one hundred eight-
    9  y-four or one hundred eighty-five of article nine; article thirty-two or
   10  thirty-three  of this chapter, and (2) does not qualify as a small busi-
   11  ness corporation as defined in paragraph  three  of  subsection  (c)  of
   12  section  twelve hundred forty-four of the internal revenue code (without
   13  regard to the second sentence of subparagraph (A)  thereof)  as  of  the
   14  last  day  of its taxable year ending within or with the taxable year of
   15  the taxpayer,
   16    (c) is not a corporation which is substantially similar  in  operation
   17  and  in  ownership to a business entity (or entities) taxable, or previ-
   18  ously taxable, under this article; section one hundred eighty-three, one
   19  hundred eighty-four, one hundred eighty-five or one  hundred  eighty-six
   20  of  article  nine;  article  thirty-two or thirty-three of this chapter;
   21  article twenty-three of this chapter or which would have been subject to
   22  tax under such article twenty-three (as such article was  in  effect  on
   23  January  first,  nineteen  hundred  eighty) or the income (or losses) of
   24  which is (or was) includable under article twenty-two of  this  chapter,
   25  and
   26    (d)  at least ninety percent of the assets of such corporation (valued
   27  at original cost) were located and employed in  this  state  during  the
   28  taxable year and eighty percent of the employees of such corporation (as
   29  ascertained within the meaning and intent of subparagraph three of para-
   30  graph  (a)  of  subdivision  three  of  this  section)  were principally
   31  employed in this state during the taxable year] TAXPAYER AS  DEFINED  IN
   32  PARAGRAPH (F) OF SUBDIVISION ONE OF THIS SECTION.
   33    S 14. Subdivision 2 of section 210 of the tax law, as amended by chap-
   34  ter 760 of the laws of 1992, is amended to read as follows:
   35    2. The amount of [subsidiary capital,] investment capital and business
   36  capital  shall  each  be  determined  by taking the average value of the
   37  assets included therein (less liabilities deductible therefrom  pursuant
   38  to  the provisions of subdivisions [four,] five and seven of section two
   39  hundred eight), and, if the period covered by the report is other than a
   40  period of twelve calendar months,  by  multiplying  such  value  by  the
   41  number  of calendar months or major parts thereof included in such peri-
   42  od, and dividing the product thus obtained by twelve.  For  purposes  of
   43  this  subdivision,  real  property  and  marketable  securities shall be
   44  valued at fair market value and the value  of  personal  property  other
   45  than marketable securities shall be the value thereof shown on the books
   46  and  records  of  the  taxpayer  in  accordance  with generally accepted
   47  accounting principles.
   48    S 15. Subdivisions 3, 3-a, 4, 5, 6, 7, 8, 9, 10, 11, 12,  12-A,  12-B,
   49  12-C,  12-D, 12-E, 12-F, 12-G, 13, 14, 15, 16, 17, 18, 19, 20, 21, 21-a,
   50  22, 23, 23-a, 24, 25, 25-a, 26, 26-a, 27, 28, 30, 31, 32,  33,  34,  35,
   51  36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, and 47 of section 210 of the
   52  tax law are REPEALED.
   53    S 15-a. Section 210 of the tax law is amended by adding a new subdivi-
   54  sion 3 to read as follows:
   55    3.  A CORPORATION THAT IS A PARTNER IN A PARTNERSHIP SHALL COMPUTE TAX
   56  UNDER THIS ARTICLE USING THE AGGREGATE METHOD AS DEFINED  IN  THE  REGU-
       S. 6359--D                         61                         A. 8559--D

    1  LATIONS  OF  THE  COMMISSIONER, UNLESS ANOTHER METHOD FOR COMPUTING SUCH
    2  TAX IS REQUIRED OR ALLOWED BY  SUCH  REGULATIONS.  UNDER  THE  AGGREGATE
    3  METHOD,  A  CORPORATION  THAT IS A PARTNER IN A PARTNERSHIP IS VIEWED AS
    4  HAVING  AN  UNDIVIDED INTEREST IN THE PARTNERSHIP'S ASSETS, LIABILITIES,
    5  AND ITEMS OF RECEIPTS, INCOME,  GAIN,  LOSS  AND  DEDUCTION.  UNDER  THE
    6  AGGREGATE  METHOD, THE CORPORATION THAT IS A PARTNER IN A PARTNERSHIP IS
    7  TREATED AS PARTICIPATING IN THE PARTNERSHIP'S  TRANSACTIONS  AND  ACTIV-
    8  ITIES.
    9    S  16. The tax law is amended by adding a new section 210-A to read as
   10  follows:
   11    S 210-A. APPORTIONMENT. 1. GENERAL. BUSINESS INCOME AND CAPITAL  SHALL
   12  BE  APPORTIONED  TO  THE  STATE  BY  THE APPORTIONMENT FACTOR DETERMINED
   13  PURSUANT TO THIS SECTION. THE APPORTIONMENT FACTOR IS A FRACTION, DETER-
   14  MINED BY INCLUDING ONLY THOSE RECEIPTS, NET INCOME, NET GAINS, AND OTHER
   15  ITEMS DESCRIBED IN THIS SECTION THAT ARE INCLUDED IN THE COMPUTATION  OF
   16  THE  TAXPAYER'S  BUSINESS INCOME FOR THE TAXABLE YEAR.  THE NUMERATOR OF
   17  THE APPORTIONMENT FRACTION SHALL BE EQUAL TO THE SUM OF ALL THE  AMOUNTS
   18  REQUIRED  TO  BE INCLUDED IN THE NUMERATOR PURSUANT TO THE PROVISIONS OF
   19  THIS SECTION AND THE DENOMINATOR OF THE APPORTIONMENT FRACTION SHALL  BE
   20  EQUAL  TO  THE  SUM  OF  ALL  THE AMOUNTS REQUIRED TO BE INCLUDED IN THE
   21  DENOMINATOR PURSUANT TO THE PROVISIONS OF THIS SECTION.
   22    2. SALES OF TANGIBLE PERSONAL PROPERTY, ELECTRICITY, AND REAL  PROPER-
   23  TY.  (A)  RECEIPTS  FROM SALES OF TANGIBLE PERSONAL PROPERTY WHERE SHIP-
   24  MENTS ARE MADE TO POINTS WITHIN THE STATE  OR  THE  DESTINATION  OF  THE
   25  PROPERTY  IS  A POINT IN THE STATE SHALL BE INCLUDED IN THE NUMERATOR OF
   26  THE APPORTIONMENT FRACTION. RECEIPTS FROM  SALES  OF  TANGIBLE  PERSONAL
   27  PROPERTY WHERE SHIPMENTS ARE MADE TO POINTS WITHIN AND WITHOUT THE STATE
   28  OR  THE DESTINATION IS WITHIN AND WITHOUT THE STATE SHALL BE INCLUDED IN
   29  THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
   30    (B) RECEIPTS FROM SALES OF ELECTRICITY DELIVERED TO POINTS WITHIN  THE
   31  STATE  SHALL BE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION.
   32  RECEIPTS FROM SALES OF ELECTRICITY DELIVERED TO POINTS WITHIN AND  WITH-
   33  OUT  THE STATE SHALL BE INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT
   34  FRACTION.
   35    (C) RECEIPTS FROM SALES OF TANGIBLE PERSONAL PROPERTY AND  ELECTRICITY
   36  THAT ARE TRADED AS COMMODITIES AS DESCRIBED IN SECTION 475 OF THE INTER-
   37  NAL  REVENUE  CODE ARE INCLUDED IN THE APPORTIONMENT FRACTION IN ACCORD-
   38  ANCE WITH CLAUSE (I) OF SUBPARAGRAPH TWO OF PARAGRAPH (A) OF SUBDIVISION
   39  FIVE OF THIS SECTION.
   40    (D) NET GAINS (NOT LESS THAN ZERO) FROM THE  SALES  OF  REAL  PROPERTY
   41  LOCATED  WITHIN  THE  STATE  SHALL  BE  INCLUDED IN THE NUMERATOR OF THE
   42  APPORTIONMENT FRACTION. NET GAINS (NOT LESS THAN ZERO) FROM THE SALES OF
   43  REAL PROPERTY LOCATED WITHIN AND WITHOUT THE STATE SHALL BE INCLUDED  IN
   44  THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
   45    3. RENTALS AND ROYALTIES. (A) RECEIPTS FROM RENTALS OF REAL AND TANGI-
   46  BLE  PERSONAL  PROPERTY  LOCATED  WITHIN  THE  STATE ARE INCLUDED IN THE
   47  NUMERATOR OF THE APPORTIONMENT FRACTION. RECEIPTS FROM RENTALS  OF  REAL
   48  AND  TANGIBLE  PERSONAL  PROPERTY  LOCATED  WITHIN AND WITHOUT THE STATE
   49  SHALL BE INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
   50    (B) RECEIPTS OF ROYALTIES FROM THE USE OF PATENTS, COPYRIGHTS,  TRADE-
   51  MARKS,  AND  SIMILAR  INTANGIBLE  PERSONAL PROPERTY WITHIN THE STATE ARE
   52  INCLUDED IN THE NUMERATOR OF THE  APPORTIONMENT  FRACTION.  RECEIPTS  OF
   53  ROYALTIES  FROM  THE  USE OF PATENTS, COPYRIGHTS, TRADEMARKS AND SIMILAR
   54  INTANGIBLES WITHIN AND WITHOUT THE STATE ARE INCLUDED IN THE DENOMINATOR
   55  OF THE APPORTIONMENT FRACTION. A PATENT, COPYRIGHT, TRADEMARK OR SIMILAR
       S. 6359--D                         62                         A. 8559--D

    1  INTANGIBLE PROPERTY IS USED IN THE STATE TO THE EXTENT THAT  THE  ACTIV-
    2  ITIES THEREUNDER ARE CARRIED ON IN THE STATE.
    3    (C)  RECEIPTS  FROM  THE  SALES OF RIGHTS FOR CLOSED-CIRCUIT AND CABLE
    4  TELEVISION TRANSMISSIONS OF AN EVENT (OTHER THAN EVENTS OCCURRING  ON  A
    5  REGULARLY  SCHEDULED BASIS) TAKING PLACE WITHIN THE STATE AS A RESULT OF
    6  THE RENDITION OF SERVICES BY EMPLOYEES OF THE CORPORATION, AS  ATHLETES,
    7  ENTERTAINERS  OR PERFORMING ARTISTS ARE INCLUDED IN THE NUMERATOR OF THE
    8  APPORTIONMENT FRACTION TO THE EXTENT THAT SUCH RECEIPTS ARE ATTRIBUTABLE
    9  TO SUCH TRANSMISSIONS RECEIVED OR EXHIBITED WITHIN THE  STATE.  RECEIPTS
   10  FROM  ALL SALES OF RIGHTS FOR CLOSED-CIRCUIT AND CABLE TELEVISION TRANS-
   11  MISSIONS OF AN EVENT ARE INCLUDED IN THE DENOMINATOR OF  THE  APPORTION-
   12  MENT FRACTION.
   13    4. DIGITAL PRODUCTS. (A) FOR PURPOSES OF DETERMINING THE APPORTIONMENT
   14  FRACTION  UNDER THIS SECTION, THE TERM "DIGITAL PRODUCT" MEANS ANY PROP-
   15  ERTY OR SERVICE, OR COMBINATION THEREOF, OF WHATEVER NATURE DELIVERED TO
   16  THE PURCHASER THROUGH THE USE OF WIRE, CABLE, FIBER-OPTIC, LASER, MICRO-
   17  WAVE, RADIO WAVE, SATELLITE OR SIMILAR SUCCESSOR MEDIA, OR ANY  COMBINA-
   18  TION  THEREOF. DIGITAL PRODUCT INCLUDES, BUT IS NOT LIMITED TO, AN AUDIO
   19  WORK, AUDIOVISUAL WORK, VISUAL WORK,  BOOK  OR  LITERARY  WORK,  GRAPHIC
   20  WORK,  GAME,  INFORMATION  OR  ENTERTAINMENT SERVICE, STORAGE OF DIGITAL
   21  PRODUCTS AND COMPUTER SOFTWARE BY WHATEVER  MEANS  DELIVERED.  THE  TERM
   22  "DELIVERED  TO"  INCLUDES  FURNISHED  OR  PROVIDED  TO OR ACCESSED BY. A
   23  DIGITAL PRODUCT DOES NOT INCLUDE LEGAL, MEDICAL,  ACCOUNTING,  ARCHITEC-
   24  TURAL, RESEARCH, ANALYTICAL, ENGINEERING OR CONSULTING SERVICES PROVIDED
   25  BY THE TAXPAYER.
   26    (B)  RECEIPTS  FROM THE SALE OF, LICENCE TO USE, OR GRANTING OF REMOTE
   27  ACCESS TO DIGITAL PRODUCTS WITHIN THE STATE, DETERMINED ACCORDING TO THE
   28  HIERARCHY OF METHODS SET FORTH IN  SUBPARAGRAPHS  ONE  THROUGH  FOUR  OF
   29  PARAGRAPH (C) OF THIS SUBDIVISION, SHALL BE INCLUDED IN THE NUMERATOR OF
   30  THE  APPORTIONMENT  FRACTION. RECEIPTS FROM THE SALE OF, LICENSE TO USE,
   31  OR GRANTING OF REMOTE ACCESS TO DIGITAL PRODUCTS WITHIN AND WITHOUT  THE
   32  STATE  SHALL  BE  INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRAC-
   33  TION. THE  TAXPAYER  MUST  EXERCISE  DUE  DILIGENCE  UNDER  EACH  METHOD
   34  DESCRIBED  IN  PARAGRAPH (C) OF THIS SUBDIVISION BEFORE REJECTING IT AND
   35  PROCEEDING TO THE NEXT METHOD IN THE HIERARCHY, AND MUST BASE ITS DETER-
   36  MINATION ON INFORMATION KNOWN TO THE TAXPAYER OR INFORMATION THAT  WOULD
   37  BE  KNOWN TO THE TAXPAYER UPON REASONABLE INQUIRY.  IF THE RECEIPT FOR A
   38  DIGITAL PRODUCT IS COMPRISED OF A COMBINATION OF PROPERTY AND  SERVICES,
   39  IT  CANNOT  BE  DIVIDED INTO SEPARATE COMPONENTS AND IS CONSIDERED TO BE
   40  ONE RECEIPT REGARDLESS OF WHETHER IT IS SEPARATELY  STATED  FOR  BILLING
   41  PURPOSES. THE ENTIRE RECEIPT MUST BE ALLOCATED BY THIS HIERARCHY.
   42    (C)  HIERARCHY  OF  SOURCING  METHODS.  (1) THE CUSTOMER'S PRIMARY USE
   43  LOCATION OF THE DIGITAL PRODUCT;
   44    (2) THE LOCATION WHERE THE DIGITAL PRODUCT IS RECEIVED BY THE  CUSTOM-
   45  ER, OR IS RECEIVED BY A PERSON DESIGNATED FOR RECEIPT BY THE CUSTOMER;
   46    (3) THE APPORTIONMENT FRACTION DETERMINED PURSUANT TO THIS SUBDIVISION
   47  FOR THE PRECEDING TAXABLE YEAR FOR SUCH DIGITAL PRODUCT; OR
   48    (4)  THE  APPORTIONMENT FRACTION IN THE CURRENT TAXABLE YEAR FOR THOSE
   49  DIGITAL PRODUCTS THAT CAN BE SOURCED USING  THE  HIERARCHY  OF  SOURCING
   50  METHODS IN SUBPARAGRAPHS ONE AND TWO OF THIS PARAGRAPH.
   51    5.  FINANCIAL  TRANSACTIONS.  (A)  FINANCIAL  INSTRUMENTS. A FINANCIAL
   52  INSTRUMENT IS A "QUALIFIED FINANCIAL INSTRUMENT"  IF  IT  IS  MARKED  TO
   53  MARKET  UNDER  SECTION 475 OR SECTION 1256 OF THE INTERNAL REVENUE CODE,
   54  PROVIDED THAT LOANS SECURED BY REAL  PROPERTY  SHALL  NOT  BE  QUALIFIED
   55  FINANCIAL  INSTRUMENTS. A FINANCIAL INSTRUMENT IS A "NONQUALIFIED FINAN-
   56  CIAL INSTRUMENT" IF IT IS NOT A QUALIFIED FINANCIAL INSTRUMENT.
       S. 6359--D                         63                         A. 8559--D

    1    (1) FIXED PERCENTAGE METHOD FOR QUALIFIED  FINANCIAL  INSTRUMENTS.  IN
    2  DETERMINING  THE  INCLUSION  OF  RECEIPTS  AND  NET GAINS FROM QUALIFIED
    3  FINANCIAL INSTRUMENTS IN THE APPORTIONMENT FRACTION, TAXPAYERS MAY ELECT
    4  TO USE THE FIXED PERCENTAGE METHOD DESCRIBED IN  THIS  SUBPARAGRAPH  FOR
    5  QUALIFIED FINANCIAL INSTRUMENTS. THE ELECTION IS IRREVOCABLE, APPLIES TO
    6  ALL QUALIFIED FINANCIAL INSTRUMENTS, AND MUST BE MADE ON AN ANNUAL BASIS
    7  ON  THE TAXPAYER'S ORIGINAL, TIMELY FILED RETURN. IF THE TAXPAYER ELECTS
    8  THE FIXED PERCENTAGE METHOD, THEN ALL INCOME, GAIN OR LOSS, FROM  QUALI-
    9  FIED FINANCIAL INSTRUMENTS CONSTITUTES BUSINESS INCOME, GAIN OR LOSS. IF
   10  THE  TAXPAYER  DOES  NOT  ELECT TO USE THE FIXED PERCENTAGE METHOD, THEN
   11  RECEIPTS AND NET GAINS ARE INCLUDED IN  THE  APPORTIONMENT  FRACTION  IN
   12  ACCORDANCE  WITH  THE CUSTOMER SOURCING METHOD DESCRIBED IN SUBPARAGRAPH
   13  TWO OF THIS PARAGRAPH. UNDER THE FIXED PERCENTAGE METHOD, EIGHT  PERCENT
   14  OF  ALL NET INCOME (NOT LESS THAN ZERO) FROM QUALIFIED FINANCIAL INSTRU-
   15  MENTS IS INCLUDED IN THE NUMERATOR OF THE  APPORTIONMENT  FRACTION.  ALL
   16  NET  INCOME (NOT LESS THAN ZERO) FROM QUALIFIED FINANCIAL INSTRUMENTS IS
   17  INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
   18    (2) CUSTOMER SOURCING METHOD. RECEIPTS AND NET  GAINS  FROM  QUALIFIED
   19  FINANCIAL  INSTRUMENTS, IN CASES WHERE THE TAXPAYER DID NOT ELECT TO USE
   20  THE FIXED PERCENTAGE METHOD DESCRIBED IN SUBPARAGRAPH ONE OF THIS  PARA-
   21  GRAPH,  AND  FROM NONQUALIFIED FINANCIAL INSTRUMENTS ARE INCLUDED IN THE
   22  APPORTIONMENT  FRACTION  IN  ACCORDANCE  WITH  THIS  SUBPARAGRAPH.   FOR
   23  PURPOSES OF THIS PARAGRAPH, AN INDIVIDUAL IS DEEMED TO BE LOCATED IN THE
   24  STATE  IF  HIS OR HER BILLING ADDRESS IS IN THE STATE. A BUSINESS ENTITY
   25  IS DEEMED TO BE LOCATED IN THE  STATE  IF  ITS  COMMERCIAL  DOMICILE  IS
   26  LOCATED IN THE STATE.
   27    (A)  LOANS.  (I)  RECEIPTS CONSTITUTING INTEREST FROM LOANS SECURED BY
   28  REAL PROPERTY LOCATED WITHIN THE STATE SHALL BE INCLUDED IN THE  NUMERA-
   29  TOR  OF  THE APPORTIONMENT FRACTION. RECEIPTS CONSTITUTING INTEREST FROM
   30  LOANS SECURED BY REAL PROPERTY LOCATED  WITHIN  AND  WITHOUT  THE  STATE
   31  SHALL BE INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
   32    (II)  RECEIPTS  CONSTITUTING  INTEREST  FROM LOANS NOT SECURED BY REAL
   33  PROPERTY SHALL BE INCLUDED IN THE NUMERATOR OF THE  APPORTIONMENT  FRAC-
   34  TION  IF  THE  BORROWER  IS  LOCATED IN THE STATE. RECEIPTS CONSTITUTING
   35  INTEREST FROM LOANS NOT SECURED BY REAL PROPERTY, WHETHER  THE  BORROWER
   36  IS LOCATED WITHIN OR WITHOUT THE STATE, SHALL BE INCLUDED IN THE DENOMI-
   37  NATOR OF THE APPORTIONMENT FRACTION.
   38    (III)  NET  GAINS  (NOT LESS THAN ZERO) FROM SALES OF LOANS SECURED BY
   39  REAL PROPERTY ARE INCLUDED IN THE NUMERATOR OF THE  APPORTIONMENT  FRAC-
   40  TION  AS  PROVIDED  IN  THIS SUBCLAUSE. THE AMOUNT OF NET GAINS FROM THE
   41  SALE OF LOANS SECURED BY REAL PROPERTY INCLUDED IN THE NUMERATOR OF  THE
   42  APPORTIONMENT  FRACTION  IS DETERMINED BY MULTIPLYING THE NET GAINS BY A
   43  FRACTION THE NUMERATOR OF WHICH IS THE AMOUNT  OF  GROSS  PROCEEDS  FROM
   44  SALES OF LOANS SECURED BY REAL PROPERTY LOCATED WITHIN THE STATE AND THE
   45  DENOMINATOR  OF  WHICH IS THE GROSS PROCEEDS FROM SALES OF LOANS SECURED
   46  BY REAL PROPERTY WITHIN AND WITHOUT THE STATE. GROSS PROCEEDS  SHALL  BE
   47  DETERMINED AFTER THE DEDUCTION OF ANY COST INCURRED TO ACQUIRE THE LOANS
   48  BUT  SHALL  NOT  BE  LESS THAN ZERO. NET GAINS (NOT LESS THAN ZERO) FROM
   49  SALES OF LOANS SECURED BY REAL PROPERTY WITHIN AND WITHOUT THE STATE ARE
   50  INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
   51    (IV) NET GAINS (NOT LESS THAN ZERO) FROM SALES OF LOANS NOT SECURED BY
   52  REAL PROPERTY ARE INCLUDED IN THE NUMERATOR OF THE  APPORTIONMENT  FRAC-
   53  TION  AS  PROVIDED  IN  THIS SUBCLAUSE. THE AMOUNT OF NET GAINS FROM THE
   54  SALE OF LOANS NOT SECURED BY REAL PROPERTY INCLUDED IN THE NUMERATOR  OF
   55  THE APPORTIONMENT FRACTION IS DETERMINED BY MULTIPLYING THE NET GAINS BY
   56  A  FRACTION, THE NUMERATOR OF WHICH IS THE AMOUNT OF GROSS PROCEEDS FROM
       S. 6359--D                         64                         A. 8559--D

    1  SALES OF LOANS NOT SECURED BY REAL PROPERTY TO PURCHASERS LOCATED WITHIN
    2  THE STATE AND THE DENOMINATOR OF WHICH IS THE AMOUNT OF  GROSS  RECEIPTS
    3  FROM  SALES  OF LOANS NOT SECURED BY REAL PROPERTY TO PURCHASERS LOCATED
    4  WITHIN  AND  WITHOUT THE STATE. GROSS PROCEEDS SHALL BE DETERMINED AFTER
    5  THE DEDUCTION OF ANY COST INCURRED TO ACQUIRE THE LOANS BUT SHALL NOT BE
    6  LESS THAN ZERO.  NET GAINS (NOT LESS THAN ZERO) FROM SALES OF LOANS  NOT
    7  SECURED  BY  REAL PROPERTY ARE INCLUDED IN THE DENOMINATOR OF THE APPOR-
    8  TIONMENT FRACTION.
    9    (B) FEDERAL, STATE, AND MUNICIPAL DEBT. RECEIPTS CONSTITUTING INTEREST
   10  AND NET GAINS FROM SALES  OF  DEBT  INSTRUMENTS  ISSUED  BY  THE  UNITED
   11  STATES,  ANY  STATE,  OR  POLITICAL  SUBDIVISION OF A STATE SHALL NOT BE
   12  INCLUDED IN  THE  NUMERATOR  OF  THE  APPORTIONMENT  FRACTION.  RECEIPTS
   13  CONSTITUTING  INTEREST  AND NET GAINS (NOT LESS THAN ZERO) FROM SALES OF
   14  DEBT INSTRUMENTS ISSUED BY THE UNITED STATES AND THE STATE OF  NEW  YORK
   15  OR  ITS  POLITICAL  SUBDIVISIONS SHALL BE INCLUDED IN THE DENOMINATOR OF
   16  THE APPORTIONMENT FRACTION. FIFTY PERCENT OF THE  RECEIPTS  CONSTITUTING
   17  INTEREST  AND  NET GAINS (NOT LESS THAN ZERO) FROM SALES OF DEBT INSTRU-
   18  MENTS ISSUED BY OTHER STATES OR THEIR POLITICAL  SUBDIVISIONS  SHALL  BE
   19  INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
   20    (C)  ASSET  BACKED SECURITIES AND OTHER GOVERNMENT AGENCY DEBT.  EIGHT
   21  PERCENT OF THE INTEREST INCOME FROM ASSET  BACKED  SECURITIES  OR  OTHER
   22  SECURITIES  ISSUED  BY GOVERNMENT AGENCIES, INCLUDING BUT NOT LIMITED TO
   23  SECURITIES  ISSUED  BY  THE  GOVERNMENT  NATIONAL  MORTGAGE  ASSOCIATION
   24  (GNMA),  THE  FEDERAL  NATIONAL MORTGAGE ASSOCIATION (FNMA), THE FEDERAL
   25  HOME LOAN MORTGAGE CORPORATION (FHLMC), OR THE SMALL  BUSINESS  ADMINIS-
   26  TRATION,  OR  ASSET  BACKED SECURITIES ISSUED BY OTHER ENTITIES SHALL BE
   27  INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION.  EIGHT  PERCENT
   28  OF  THE  NET  GAINS  (NOT LESS THAN ZERO) FROM (I) SALES OF ASSET BACKED
   29  SECURITIES OR OTHER SECURITIES ISSUED BY GOVERNMENT AGENCIES,  INCLUDING
   30  BUT  NOT LIMITED TO SECURITIES ISSUED BY GNMA, FNMA, OR FHLMC, THE SMALL
   31  BUSINESS ADMINISTRATION, OR (II) SALES OF OTHER ASSET BACKED  SECURITIES
   32  THAT  ARE  SOLD  THROUGH  A  REGISTERED  SECURITIES  BROKER OR DEALER OR
   33  THROUGH A LICENSED EXCHANGE, SHALL BE INCLUDED IN THE NUMERATOR  OF  THE
   34  APPORTIONMENT  FRACTION.  THE  AMOUNT  OF NET GAINS (NOT LESS THAN ZERO)
   35  FROM SALES OF OTHER ASSET BACKED SECURITIES NOT REFERENCED IN  SUBCLAUSE
   36  (I)  OR  (II) OF THIS CLAUSE INCLUDED IN THE NUMERATOR OF THE APPORTION-
   37  MENT FRACTION IS DETERMINED BY MULTIPLYING SUCH NET GAINS BY A FRACTION,
   38  THE NUMERATOR OF WHICH IS THE AMOUNT OF GROSS PROCEEDS FROM  SUCH  SALES
   39  TO  PURCHASERS  LOCATED IN THE STATE AND THE DENOMINATOR OF WHICH IS THE
   40  AMOUNT OF GROSS PROCEEDS FROM SUCH SALES TO  PURCHASERS  LOCATED  WITHIN
   41  AND  WITHOUT THE STATE. RECEIPTS CONSTITUTING INTEREST FROM ASSET BACKED
   42  SECURITIES AND OTHER SECURITIES REFERENCED IN THIS CLAUSE AND NET  GAINS
   43  (NOT  LESS  THAN  ZERO)  FROM SALES OF ASSET BACKED SECURITIES AND OTHER
   44  SECURITIES REFERENCED IN THIS CLAUSE ARE INCLUDED IN THE DENOMINATOR  OF
   45  THE APPORTIONMENT FRACTION. GROSS PROCEEDS SHALL BE DETERMINED AFTER THE
   46  DEDUCTION  OF  ANY  COST TO ACQUIRE THE SECURITIES BUT SHALL NOT BE LESS
   47  THAN ZERO.
   48    (D) CORPORATE BONDS. RECEIPTS  CONSTITUTING  INTEREST  FROM  CORPORATE
   49  BONDS ARE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION IF THE
   50  COMMERCIAL  DOMICILE  OF THE ISSUING CORPORATION IS IN THE STATE.  EIGHT
   51  PERCENT OF THE NET GAINS (NOT LESS THAN ZERO) FROM  SALES  OF  CORPORATE
   52  BONDS SOLD THROUGH A REGISTERED SECURITIES BROKER OR DEALER OR THROUGH A
   53  LICENSED  EXCHANGE  IS  INCLUDED  IN  THE NUMERATOR OF THE APPORTIONMENT
   54  FRACTION. THE AMOUNT OF NET GAINS (NOT LESS THAN ZERO) FROM OTHER  SALES
   55  OF  CORPORATE BONDS INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRAC-
   56  TION IS DETERMINED BY MULTIPLYING SUCH NET  GAINS  BY  A  FRACTION,  THE
       S. 6359--D                         65                         A. 8559--D

    1  NUMERATOR  OF  WHICH  IS THE AMOUNT OF GROSS PROCEEDS FROM SUCH SALES TO
    2  PURCHASERS LOCATED IN THE STATE AND THE  DENOMINATOR  OF  WHICH  IS  THE
    3  AMOUNT  OF  GROSS  PROCEEDS  FROM SALES TO PURCHASERS LOCATED WITHIN AND
    4  WITHOUT  THE STATE. RECEIPTS CONSTITUTING INTEREST FROM CORPORATE BONDS,
    5  WHETHER THE ISSUING CORPORATION'S COMMERCIAL DOMICILE IS WITHIN OR WITH-
    6  OUT THE STATE, AND NET GAINS (NOT LESS THAN ZERO) FROM SALES  OF  CORPO-
    7  RATE  BONDS  TO  PURCHASERS WITHIN AND WITHOUT THE STATE ARE INCLUDED IN
    8  THE DENOMINATOR OF THE APPORTIONMENT FRACTION. GROSS PROCEEDS  SHALL  BE
    9  DETERMINED  AFTER  THE  DEDUCTION  OF  ANY COST TO ACQUIRE THE BONDS BUT
   10  SHALL NOT BE LESS THAN ZERO.
   11    (E) REVERSE REPURCHASE AGREEMENTS AND SECURITIES BORROWING AGREEMENTS.
   12  EIGHT PERCENT OF NET INTEREST INCOME (NOT LESS THAN ZERO)  FROM  REVERSE
   13  REPURCHASE  AGREEMENTS  AND  SECURITIES  BORROWING  AGREEMENTS  SHALL BE
   14  INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT  FRACTION.  NET  INTEREST
   15  INCOME (NOT LESS THAN ZERO) FROM REVERSE REPURCHASE AGREEMENTS AND SECU-
   16  RITIES BORROWING AGREEMENTS IS INCLUDED IN THE DENOMINATOR OF THE APPOR-
   17  TIONMENT  FRACTION.  NET  INTEREST INCOME FROM REVERSE REPURCHASE AGREE-
   18  MENTS AND SECURITIES BORROWING AGREEMENTS IS DETERMINED FOR PURPOSES  OF
   19  THIS  SUBDIVISION  AFTER  THE DEDUCTION OF THE INTEREST EXPENSE FROM THE
   20  TAXPAYER'S REPURCHASE AGREEMENTS AND SECURITIES LENDING  AGREEMENTS  BUT
   21  CANNOT  BE  LESS  THAN  ZERO.  FOR  THIS CALCULATION, THE AMOUNT OF SUCH
   22  INTEREST EXPENSE IS THE INTEREST EXPENSE ASSOCIATED WITH THE SUM OF  THE
   23  VALUE   OF   THE  TAXPAYER'S  REPURCHASE  AGREEMENTS  WHERE  IT  IS  THE
   24  SELLER/BORROWER PLUS THE VALUE  OF  THE  TAXPAYER'S  SECURITIES  LENDING
   25  AGREEMENTS  WHERE  IT  IS  THE  SECURITIES  LENDER, PROVIDED SUCH SUM IS
   26  LIMITED TO THE SUM OF THE VALUE OF  THE  TAXPAYER'S  REVERSE  REPURCHASE
   27  AGREEMENTS  WHERE  IT  IS  THE  PURCHASER/LENDER  PLUS  THE VALUE OF THE
   28  TAXPAYER'S SECURITIES LENDING AGREEMENTS  WHERE  IT  IS  THE  SECURITIES
   29  BORROWER.
   30    (F)  FEDERAL  FUNDS.  EIGHT PERCENT OF THE NET INTEREST (NOT LESS THAN
   31  ZERO) FROM FEDERAL FUNDS IS INCLUDED IN THE NUMERATOR OF THE  APPORTION-
   32  MENT  FRACTION. THE NET INTEREST (NOT LESS THAN ZERO) FROM FEDERAL FUNDS
   33  IS INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION. NET INTER-
   34  EST FROM FEDERAL FUNDS IS DETERMINED AFTER DEDUCTION OF INTEREST EXPENSE
   35  FROM FEDERAL FUNDS.
   36    (G) DIVIDENDS AND NET GAINS FROM SALES OF STOCK OR PARTNERSHIP  INTER-
   37  ESTS. DIVIDENDS FROM STOCK, NET GAINS (NOT LESS THAN ZERO) FROM SALES OF
   38  STOCK  AND  NET  GAINS (NOT LESS THAN ZERO) FROM THE SALE OF PARTNERSHIP
   39  INTERESTS ARE NOT INCLUDED IN EITHER THE NUMERATOR OR DENOMINATOR OF THE
   40  APPORTIONMENT FRACTION UNLESS THE COMMISSIONER  DETERMINES  PURSUANT  TO
   41  SUBDIVISION  ELEVEN OF THIS SECTION THAT INCLUSION OF SUCH DIVIDENDS AND
   42  NET GAINS (NOT LESS THAN ZERO) IS  NECESSARY  TO  PROPERLY  REFLECT  THE
   43  BUSINESS INCOME OR CAPITAL OF THE TAXPAYER.
   44    (H)  OTHER  FINANCIAL  INSTRUMENTS. (I) RECEIPTS CONSTITUTING INTEREST
   45  FROM OTHER FINANCIAL INSTRUMENTS SHALL BE INCLUDED IN THE  NUMERATOR  OF
   46  THE  APPORTIONMENT  FRACTION  IF  THE  PAYOR  IS  LOCATED  IN THE STATE.
   47  RECEIPTS CONSTITUTING INTEREST FROM OTHER FINANCIAL INSTRUMENTS, WHETHER
   48  THE PAYOR IS WITHIN OR WITHOUT THE STATE, ARE INCLUDED IN THE  DENOMINA-
   49  TOR OF THE APPORTIONMENT FRACTION.
   50    (II)  NET  GAINS  (NOT  LESS  THAN ZERO) FROM SALES OF OTHER FINANCIAL
   51  INSTRUMENTS AND OTHER INCOME (NOT LESS THAN ZERO) FROM  OTHER  FINANCIAL
   52  INSTRUMENTS  WHERE  THE  PURCHASER  OR PAYOR IS LOCATED IN THE STATE ARE
   53  INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION, PROVIDED  THAT,
   54  IF THE PURCHASER OR PAYOR IS A REGISTERED SECURITIES BROKER OR DEALER OR
   55  THE  TRANSACTION IS MADE THROUGH A LICENSED EXCHANGE, THEN EIGHT PERCENT
   56  OF THE NET GAINS (NOT LESS THAN ZERO) OR OTHER  INCOME  (NOT  LESS  THAN
       S. 6359--D                         66                         A. 8559--D

    1  ZERO)  IS  INCLUDED  IN THE NUMERATOR OF THE APPORTIONMENT FRACTION. NET
    2  GAINS (NOT LESS THAN ZERO) FROM SALES OF OTHER FINANCIAL INSTRUMENTS AND
    3  OTHER INCOME (NOT LESS THAN ZERO) FROM OTHER FINANCIAL  INSTRUMENTS  ARE
    4  INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
    5    (I)  PHYSICAL  COMMODITIES. NET INCOME (NOT LESS THAN ZERO) FROM SALES
    6  OF PHYSICAL COMMODITIES ARE INCLUDED IN THE NUMERATOR OF THE  APPORTION-
    7  MENT FRACTION AS PROVIDED IN THIS SUBPARAGRAPH. THE AMOUNT OF NET INCOME
    8  FROM  SALES  OF  PHYSICAL  COMMODITIES  INCLUDED IN THE NUMERATOR OF THE
    9  APPORTIONMENT FRACTION IS DETERMINED BY MULTIPLYING THE NET INCOME  FROM
   10  SALES  OF  PHYSICAL COMMODITIES BY A FRACTION, THE NUMERATOR OF WHICH IS
   11  THE AMOUNT OF RECEIPTS  FROM  SALES  OF  PHYSICAL  COMMODITIES  ACTUALLY
   12  DELIVERED  TO POINTS WITHIN THE STATE OR, IF THERE IS NO ACTUAL DELIVERY
   13  OF THE PHYSICAL COMMODITY, SOLD TO PURCHASERS LOCATED IN THE STATE,  AND
   14  THE  DENOMINATOR  OF WHICH IS THE AMOUNT OF RECEIPTS FROM SALES OF PHYS-
   15  ICAL COMMODITIES ACTUALLY DELIVERED TO POINTS  WITHIN  AND  WITHOUT  THE
   16  STATE  OR  SOLD  TO PURCHASERS LOCATED WITHIN AND WITHOUT THE STATE. NET
   17  INCOME (NOT LESS THAT  ZERO)  FROM  SALES  OF  PHYSICAL  COMMODITIES  IS
   18  INCLUDED  IN  THE  DENOMINATOR OF THE APPORTIONMENT FRACTION. NET INCOME
   19  (NOT LESS THAN ZERO) FROM SALES OF PHYSICAL  COMMODITIES  IS  DETERMINED
   20  AFTER  THE  DEDUCTION  OF  THE  COST  TO ACQUIRE OR PRODUCE THE PHYSICAL
   21  COMMODITIES.
   22    (B) OTHER RECEIPTS FROM BROKER OR DEALER  ACTIVITIES.  RECEIPTS  OF  A
   23  REGISTERED  SECURITIES  BROKER  OR DEALER FROM SECURITIES OR COMMODITIES
   24  BROKER OR DEALER ACTIVITIES DESCRIBED IN THIS PARAGRAPH SHALL BE  DEEMED
   25  TO  BE  GENERATED  WITHIN  THE  STATE  AS DESCRIBED IN SUBPARAGRAPHS ONE
   26  THROUGH EIGHT OF THIS PARAGRAPH. RECEIPTS FROM SUCH ACTIVITIES GENERATED
   27  WITHIN THE STATE SHALL BE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT
   28  FRACTION. RECEIPTS FROM SUCH ACTIVITIES GENERATED WITHIN AND WITHOUT THE
   29  STATE SHALL BE INCLUDED IN THE DENOMINATOR OF  THE  APPORTIONMENT  FRAC-
   30  TION.  FOR  THE  PURPOSES OF THIS PARAGRAPH, THE TERM "SECURITIES" SHALL
   31  HAVE THE SAME MEANING AS IN SECTION 475(C)(2) OF  THE  INTERNAL  REVENUE
   32  CODE  AND  THE  TERM  "COMMODITIES"  SHALL  HAVE  THE SAME MEANING AS IN
   33  SECTION 475(E)(2) OF THE INTERNAL REVENUE CODE.
   34    (1) RECEIPTS  CONSTITUTING  BROKERAGE  COMMISSIONS  DERIVED  FROM  THE
   35  EXECUTION  OF SECURITIES OR COMMODITIES PURCHASE OR SALES ORDERS FOR THE
   36  ACCOUNTS OF CUSTOMERS SHALL BE DEEMED TO BE GENERATED WITHIN  THE  STATE
   37  IF  THE  MAILING  ADDRESS IN THE RECORDS OF THE TAXPAYER OF THE CUSTOMER
   38  WHO IS RESPONSIBLE FOR PAYING SUCH COMMISSIONS IS WITHIN THE STATE.
   39    (2) RECEIPTS CONSTITUTING MARGIN INTEREST EARNED ON BEHALF OF  BROKER-
   40  AGE  ACCOUNTS  SHALL  BE  DEEMED TO BE GENERATED WITHIN THE STATE IF THE
   41  MAILING ADDRESS IN THE RECORDS OF THE TAXPAYER OF THE  CUSTOMER  WHO  IS
   42  RESPONSIBLE FOR PAYING SUCH MARGIN INTEREST IS WITHIN THE STATE.
   43    (3)(A)  RECEIPTS CONSTITUTING FEES EARNED BY THE TAXPAYER FOR ADVISORY
   44  SERVICES TO A CUSTOMER IN CONNECTION WITH THE UNDERWRITING OF SECURITIES
   45  FOR SUCH CUSTOMER (SUCH CUSTOMER BEING THE ENTITY THAT IS  CONTEMPLATING
   46  ISSUING  OR  IS  ISSUING  SECURITIES) OR FEES EARNED BY THE TAXPAYER FOR
   47  MANAGING AN UNDERWRITING SHALL BE DEEMED  TO  BE  GENERATED  WITHIN  THE
   48  STATE  IF  THE  MAILING  ADDRESS  IN THE RECORDS OF THE TAXPAYER OF SUCH
   49  CUSTOMER WHO IS RESPONSIBLE FOR PAYING SUCH FEES IS WITHIN THE STATE.
   50    (B) RECEIPTS CONSTITUTING THE PRIMARY  SPREAD  OF  SELLING  CONCESSION
   51  FROM  UNDERWRITTEN SECURITIES SHALL BE DEEMED TO BE GENERATED WITHIN THE
   52  STATE IF THE CUSTOMER IS LOCATED IN THE STATE.
   53    (C) THE TERM "PRIMARY SPREAD" MEANS THE DIFFERENCE BETWEEN  THE  PRICE
   54  PAID  BY THE TAXPAYER TO THE ISSUER OF THE SECURITIES BEING MARKETED AND
   55  THE PRICE RECEIVED FROM THE SUBSEQUENT SALE OF THE UNDERWRITTEN  SECURI-
   56  TIES  AT  THE INITIAL PUBLIC OFFERING PRICE, LESS ANY SELLING CONCESSION
       S. 6359--D                         67                         A. 8559--D

    1  AND ANY FEES PAID TO THE TAXPAYER FOR ADVISORY SERVICES OR ANY MANAGER'S
    2  FEES, IF SUCH FEES ARE NOT PAID BY THE CUSTOMER TO  THE  TAXPAYER  SEPA-
    3  RATELY.  THE TERM "PUBLIC OFFERING PRICE" MEANS THE PRICE AGREED UPON BY
    4  THE TAXPAYER AND THE ISSUER AT WHICH THE SECURITIES ARE TO BE OFFERED TO
    5  THE  PUBLIC.  THE TERM "SELLING CONCESSION" MEANS THE AMOUNT PAID TO THE
    6  TAXPAYER FOR PARTICIPATING IN THE UNDERWRITING OF A SECURITY  WHERE  THE
    7  TAXPAYER IS NOT THE LEAD UNDERWRITER.
    8    (4)  RECEIPTS CONSTITUTING ACCOUNT MAINTENANCE FEES SHALL BE DEEMED TO
    9  BE GENERATED WITHIN THE STATE IF THE MAILING ADDRESS IN  THE  RECORD  OF
   10  THE  TAXPAYER OF THE CUSTOMER WHO IS RESPONSIBLE FOR PAYING SUCH ACCOUNT
   11  MAINTENANCE FEES IS WITHIN THE STATE.
   12    (5) RECEIPTS CONSTITUTING FEES FOR MANAGEMENT  OR  ADVISORY  SERVICES,
   13  INCLUDING  FEES  FOR ADVISORY SERVICES IN RELATION TO MERGER OR ACQUISI-
   14  TION ACTIVITIES, BUT EXCLUDING FEES PAID FOR SERVICES DESCRIBED IN PARA-
   15  GRAPH (D) OF THIS SUBDIVISION, SHALL BE DEEMED TO  BE  GENERATED  WITHIN
   16  THE  STATE  IF THE MAILING ADDRESS IN THE RECORDS OF THE TAXPAYER OF THE
   17  CUSTOMER WHO IS RESPONSIBLE FOR PAYING SUCH FEES IS WITHIN THE STATE.
   18    (6) RECEIPTS CONSTITUTING INTEREST EARNED BY THE TAXPAYER ON LOANS AND
   19  ADVANCES MADE BY THE TAXPAYER  TO  A  CORPORATION  AFFILIATED  WITH  THE
   20  TAXPAYER  BUT  WITH  WHICH  THE TAXPAYER IS NOT PERMITTED OR REQUIRED TO
   21  FILE A COMBINED REPORT PURSUANT TO SECTION TWO  HUNDRED  TEN-C  OF  THIS
   22  ARTICLE  SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED AT THE PRINCI-
   23  PAL PLACE OF BUSINESS OF SUCH AFFILIATED CORPORATION.
   24    (7) IF THE TAXPAYER RECEIVES ANY OF THE RECEIPTS ENUMERATED IN SUBPAR-
   25  AGRAPHS ONE THROUGH FOUR OF THIS PARAGRAPH AS A RESULT OF  A  SECURITIES
   26  CORRESPONDENT  RELATIONSHIP  SUCH  TAXPAYER  HAS  WITH ANOTHER BROKER OR
   27  DEALER WITH THE TAXPAYER ACTING IN THIS  RELATIONSHIP  AS  THE  CLEARING
   28  FIRM,  SUCH RECEIPTS SHALL BE DEEMED TO BE GENERATED WITHIN THE STATE TO
   29  EXTENT SET FORTH IN EACH OF  SUCH  SUBPARAGRAPHS.  THE  AMOUNT  OF  SUCH
   30  RECEIPTS SHALL EXCLUDE THE AMOUNT THE TAXPAYER IS REQUIRED TO PAY TO THE
   31  CORRESPONDENT  FIRM FOR SUCH CORRESPONDENT RELATIONSHIP. IF THE TAXPAYER
   32  RECEIVES ANY OF THE RECEIPTS ENUMERATED  IN  SUBPARAGRAPHS  ONE  THROUGH
   33  FOUR  OF  THIS  PARAGRAPH  AS  AS  RESULT  OF A SECURITIES CORRESPONDENT
   34  RELATIONSHIP SUCH TAXPAYER HAS WITH ANOTHER BROKER OR  DEALER  WITH  THE
   35  TAXPAYER  ACTING  IN  THIS  RELATIONSHIP  AS  THE INTRODUCING FIRM, SUCH
   36  RECEIPTS SHALL BE DEEMED TO BE GENERATED WITHIN THE STATE TO THE  EXTENT
   37  SET FORTH IN EACH OF SUCH SUBPARAGRAPHS.
   38    (8) IF, FOR PURPOSES OF SUBPARAGRAPHS ONE, TWO, CLAUSE (A) OF SUBPARA-
   39  GRAPH THREE, FOUR, OR FIVE OF THIS PARAGRAPH THE TAXPAYER IS UNABLE FROM
   40  ITS  RECORDS  TO  DETERMINE  THE  MAILING ADDRESS OF THE CUSTOMER, EIGHT
   41  PERCENT OF THE RECEIPTS IS INCLUDED IN THE NUMERATOR OF  THE  APPORTION-
   42  MENT FRACTION.
   43    (C)  RECEIPTS FROM CREDIT CARD AND SIMILAR ACTIVITIES. RECEIPTS RELAT-
   44  ING TO THE  BANK,  CREDIT,  TRAVEL  AND  ENTERTAINMENT  CARD  ACTIVITIES
   45  DESCRIBED  IN  THIS PARAGRAPH SHALL BE DEEMED TO BE GENERATED WITHIN THE
   46  STATE AS DESCRIBED IN SUBPARAGRAPHS ONE THROUGH FOUR OF THIS  PARAGRAPH.
   47  RECEIPTS  FROM  SUCH  ACTIVITIES  GENERATED  WITHIN  THE  STATE SHALL BE
   48  INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION.  RECEIPTS  FROM
   49  SUCH ACTIVITIES GENERATED WITHIN AND WITHOUT THE STATE SHALL BE INCLUDED
   50  IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
   51    (1)  RECEIPTS  CONSTITUTING  INTEREST,  AND  FEES AND PENALTIES IN THE
   52  NATURE OF INTEREST, FROM BANK, CREDIT,  TRAVEL  AND  ENTERTAINMENT  CARD
   53  RECEIVABLES  SHALL  BE  DEEMED  TO  BE GENERATED WITHIN THE STATE IF THE
   54  MAILING ADDRESS OF THE CARD HOLDER IN THE RECORDS OF THE TAXPAYER IS  IN
   55  THE STATE;
       S. 6359--D                         68                         A. 8559--D

    1    (2)  RECEIPTS  FROM  SERVICE CHARGES AND FEES FROM SUCH CARDS SHALL BE
    2  DEEMED TO BE GENERATED WITHIN THE STATE IF THE MAILING  ADDRESS  OF  THE
    3  CARD HOLDER IN THE RECORDS OF THE TAXPAYER IS IN THE STATE; AND
    4    (3)  RECEIPTS  FROM MERCHANT DISCOUNTS SHALL BE DEEMED TO BE GENERATED
    5  WITHIN THE STATE IF THE MERCHANT IS LOCATED WITHIN  THE  STATE.  IN  THE
    6  CASE  OF  A  MERCHANT  WITH  LOCATIONS  BOTH WITHIN AND WITHOUT NEW YORK
    7  STATE, ONLY RECEIPTS FROM MERCHANT DISCOUNTS ATTRIBUTABLE TO SALES  MADE
    8  FROM LOCATIONS WITHIN NEW YORK STATE ARE ALLOCATED TO NEW YORK STATE. IT
    9  SHALL  BE  PRESUMED  THAT THE LOCATION OF THE MERCHANT IS THE ADDRESS OF
   10  THE MERCHANT SHOWN ON THE INVOICE  SUBMITTED  BY  THE  MERCHANT  TO  THE
   11  TAXPAYER.
   12    (4)  RECEIPTS  FROM CREDIT CARD AUTHORIZATION PROCESSING, AND CLEARING
   13  AND SETTLEMENT PROCESSING RECEIVED BY CREDIT CARD  PROCESSORS  SHALL  BE
   14  DEEMED TO BE GENERATED WITHIN THE STATE IF THE LOCATION WHERE THE CREDIT
   15  CARD  PROCESSOR'S  CUSTOMER ACCESSES THE CREDIT CARD PROCESSOR'S NETWORK
   16  IS LOCATED WITHIN THE STATE. THE AMOUNT OF ALL OTHER  RECEIPTS  RECEIVED
   17  BY CREDIT CARD PROCESSORS NOT SPECIFICALLY ADDRESSED IN SUBDIVISIONS ONE
   18  THROUGH  NINE  OF  THIS  SECTION DEEMED TO BE GENERATED WITHIN THE STATE
   19  SHALL BE DETERMINED BY  MULTIPLYING  THE  TOTAL  AMOUNT  OF  SUCH  OTHER
   20  RECEIPTS BY THE AVERAGE OF (I) EIGHT PERCENT AND (II) THE PERCENT OF ITS
   21  NEW  YORK  ACCESS  POINTS.  THE PERCENT OF NEW YORK ACCESS POINTS IS THE
   22  NUMBER OF LOCATIONS IN NEW YORK FROM WHICH THE CREDIT  CARD  PROCESSOR'S
   23  CUSTOMERS  ACCESS  THE  CREDIT  CARD  PROCESSOR'S NETWORK DIVIDED BY THE
   24  TOTAL NUMBER OF LOCATIONS IN THE UNITED STATES  WHERE  THE  CREDIT  CARD
   25  PROCESSOR'S CUSTOMERS ACCESS THE CREDIT CARD PROCESSOR'S NETWORK.
   26    (D)  RECEIPTS FROM CERTAIN SERVICES TO INVESTMENT COMPANIES.  RECEIPTS
   27  RECEIVED FROM AN INVESTMENT COMPANY ARISING FROM THE SALE OF MANAGEMENT,
   28  ADMINISTRATION OR DISTRIBUTION SERVICES TO SUCH INVESTMENT  COMPANY  ARE
   29  INCLUDED  IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.  THE PORTION
   30  OF SUCH RECEIPTS INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION
   31  (SUCH PORTION REFERRED TO HEREIN AS  THE  NEW  YORK  PORTION)  SHALL  BE
   32  DETERMINED AS PROVIDED IN THIS PARAGRAPH.
   33    (1)  THE  NEW  YORK  PORTION SHALL BE THE PRODUCT OF THE TOTAL OF SUCH
   34  RECEIPTS FROM THE SALE OF SUCH SERVICES AND A FRACTION. THE NUMERATOR OF
   35  THAT FRACTION IS THE SUM OF THE MONTHLY PERCENTAGES (AS DEFINED  HEREIN-
   36  AFTER)  DETERMINED  FOR  EACH  MONTH OF THE INVESTMENT COMPANY'S TAXABLE
   37  YEAR FOR FEDERAL INCOME TAX PURPOSES WHICH TAXABLE YEAR ENDS WITHIN  THE
   38  TAXABLE  YEAR  OF THE TAXPAYER (BUT EXCLUDING ANY MONTH DURING WHICH THE
   39  INVESTMENT COMPANY HAD NO OUTSTANDING SHARES).  THE  MONTHLY  PERCENTAGE
   40  FOR  EACH  SUCH  MONTH IS DETERMINED BY DIVIDING THE NUMBER OF SHARES IN
   41  THE INVESTMENT COMPANY THAT ARE OWNED ON THE LAST DAY OF  THE  MONTH  BY
   42  SHAREHOLDERS THAT ARE LOCATED IN THE STATE BY THE TOTAL NUMBER OF SHARES
   43  IN  THE INVESTMENT COMPANY OUTSTANDING ON THAT DATE.  THE DENOMINATOR OF
   44  THE FRACTION IS THE NUMBER OF SUCH MONTHLY PERCENTAGES.
   45    (2)(A) FOR PURPOSES OF THIS PARAGRAPH, AN INDIVIDUAL, ESTATE OR  TRUST
   46  IS  DEEMED TO BE LOCATED IN THE STATE IF HIS, HER OR ITS MAILING ADDRESS
   47  ON THE RECORDS OF THE INVESTMENT COMPANY IS IN  THE  STATE.  A  BUSINESS
   48  ENTITY  IS  DEEMED TO BE LOCATED IN THE STATE IF ITS COMMERCIAL DOMICILE
   49  IS LOCATED IN THE STATE.
   50    (B) FOR PURPOSES OF THIS  PARAGRAPH,  THE  TERM  "INVESTMENT  COMPANY"
   51  MEANS  A  REGULATED INVESTMENT COMPANY, AS DEFINED IN SECTION 851 OF THE
   52  INTERNAL REVENUE CODE, AND A PARTNERSHIP TO WHICH SECTION 7704(A) OF THE
   53  INTERNAL REVENUE CODE APPLIES (BY VIRTUE OF SECTION 7704(C)(3)  OF  SUCH
   54  CODE)  AND  THAT  MEETS THE REQUIREMENTS OF SECTION 851(B) OF SUCH CODE.
   55  THE PRECEDING SENTENCE SHALL BE APPLIED TO THE TAXABLE YEAR FOR  FEDERAL
   56  INCOME  TAX  PURPOSES OF THE BUSINESS ENTITY THAT IS ASSERTED TO CONSTI-
       S. 6359--D                         69                         A. 8559--D

    1  TUTE AN INVESTMENT COMPANY THAT ENDS WITHIN  THE  TAXABLE  YEAR  OF  THE
    2  TAXPAYER.
    3    (C)  FOR PURPOSES OF THIS PARAGRAPH THE TERM "RECEIPTS FROM AN INVEST-
    4  MENT COMPANY" INCLUDES AMOUNTS  RECEIVED  DIRECTLY  FROM  AN  INVESTMENT
    5  COMPANY  AS  WELL  AS  AMOUNTS  RECEIVED  FROM  THE SHAREHOLDERS IN SUCH
    6  INVESTMENT COMPANY, IN THEIR CAPACITY AS SUCH.
    7    (D) FOR PURPOSES OF THIS PARAGRAPH,  THE  TERM  "MANAGEMENT  SERVICES"
    8  MEANS  THE  RENDERING  OF  INVESTMENT  ADVICE  TO AN INVESTMENT COMPANY,
    9  MAKING DETERMINATIONS AS TO WHEN SALES AND PURCHASES OF  SECURITIES  ARE
   10  TO  BE  MADE  ON  BEHALF  OF  AN  INVESTMENT  COMPANY, OR THE SELLING OR
   11  PURCHASING OF SECURITIES CONSTITUTING ASSETS OF AN  INVESTMENT  COMPANY,
   12  AND  RELATED  ACTIVITIES, BUT ONLY WHERE SUCH ACTIVITY OR ACTIVITIES ARE
   13  PERFORMED PURSUANT TO A CONTRACT WITH  THE  INVESTMENT  COMPANY  ENTERED
   14  INTO  PURSUANT TO SECTION 15(A) OF THE FEDERAL INVESTMENT COMPANY ACT OF
   15  NINETEEN HUNDRED FORTY, AS AMENDED.
   16    (E) FOR PURPOSES OF THIS PARAGRAPH, THE TERM  "DISTRIBUTION  SERVICES"
   17  MEANS  THE SERVICES OF ADVERTISING, SERVICING INVESTOR ACCOUNTS (INCLUD-
   18  ING REDEMPTIONS), MARKETING SHARES OR SELLING SHARES  OF  AN  INVESTMENT
   19  COMPANY,  BUT,  IN  THE CASE OF ADVERTISING, SERVICING INVESTOR ACCOUNTS
   20  (INCLUDING REDEMPTIONS) OR MARKETING SHARES, ONLY WHERE SUCH SERVICE  IS
   21  PERFORMED BY A PERSON WHO IS (OR WAS, IN THE CASE OF A CLOSED END COMPA-
   22  NY)  ALSO  ENGAGED IN THE SERVICE OF SELLING SUCH SHARES. IN THE CASE OF
   23  AN OPEN END COMPANY, SUCH SERVICE OF SELLING SHARES  MUST  BE  PERFORMED
   24  PURSUANT  TO  A  CONTRACT  ENTERED INTO PURSUANT TO SECTION 15(B) OF THE
   25  FEDERAL INVESTMENT COMPANY ACT OF NINETEEN HUNDRED FORTY, AS AMENDED.
   26    (F) FOR PURPOSES OF THIS PARAGRAPH, THE TERM "ADMINISTRATION SERVICES"
   27  INCLUDES CLERICAL, ACCOUNTING, BOOKKEEPING,  DATA  PROCESSING,  INTERNAL
   28  AUDITING, LEGAL AND TAX SERVICES PERFORMED FOR AN INVESTMENT COMPANY BUT
   29  ONLY IF THE PROVIDER OF SUCH SERVICE OR SERVICES DURING THE TAXABLE YEAR
   30  IN  WHICH  SUCH  SERVICE  OR  SERVICES ARE SOLD ALSO SELLS MANAGEMENT OR
   31  DISTRIBUTION SERVICES, AS DEFINED HEREINABOVE, TO SUCH INVESTMENT COMPA-
   32  NY.
   33    (E) FOR PURPOSES OF THIS SUBDIVISION, A TAXPAYER SHALL USE THE FOLLOW-
   34  ING HIERARCHY TO DETERMINE THE COMMERCIAL DOMICILE OF A BUSINESS ENTITY,
   35  BASED ON THE INFORMATION KNOWN TO THE TAXPAYER OR INFORMATION THAT WOULD
   36  BE KNOWN UPON REASONABLE INQUIRY: (I) THE LOCATION OF THE TREASURY FUNC-
   37  TION OF THE BUSINESS ENTITY; (II) THE SEAT OF MANAGEMENT AND CONTROL  OF
   38  THE BUSINESS ENTITY; AND (III) THE BILLING ADDRESS OF THE BUSINESS ENTI-
   39  TY  IN THE TAXPAYER'S RECORDS.  THE TAXPAYER MUST EXERCISE DUE DILIGENCE
   40  BEFORE REJECTING A METHOD IN THIS HIERARCHY AND PROCEEDING TO  THE  NEXT
   41  METHOD.
   42    (F)  FOR PURPOSES OF THIS SUBDIVISION, THE TERM "REGISTERED SECURITIES
   43  BROKER OR DEALER" MEANS A BROKER OR DEALER REGISTERED  AS  SUCH  BY  THE
   44  SECURITIES  AND  EXCHANGE COMMISSION OR A BROKER OR DEALER REGISTERED AS
   45  SUCH BY THE COMMODITIES FUTURES TRADING COMMISSION, AND SHALL INCLUDE AN
   46  OTC DERIVATIVES DEALER AS DEFINED UNDER REGULATIONS  OF  THE  SECURITIES
   47  AND EXCHANGE COMMISSION AT TITLE 17, PART 240, SECTION 3B-12 OF THE CODE
   48  OF FEDERAL REGULATIONS (17 CFR 240.3B-12).
   49    6.  RECEIPTS  FROM  RAILROAD  AND TRUCKING BUSINESS. RECEIPTS FROM THE
   50  CONDUCT OF A RAILROAD BUSINESS (INCLUDING SURFACE RAILROAD,  WHETHER  OR
   51  NOT OPERATED BY STEAM, SUBWAY RAILROAD, ELEVATED RAILROAD, PALACE CAR OR
   52  SLEEPING CAR BUSINESS) OR A TRUCKING BUSINESS ARE INCLUDED IN THE NUMER-
   53  ATOR  OF  THE  APPORTIONMENT FRACTION AS FOLLOWS. THE AMOUNT OF RECEIPTS
   54  FROM THE CONDUCT OF A RAILROAD BUSINESS OR A TRUCKING BUSINESS  INCLUDED
   55  IN  THE  NUMERATOR OF THE APPORTIONMENT FRACTION IS DETERMINED BY MULTI-
   56  PLYING THE AMOUNT OF RECEIPTS FROM SUCH  BUSINESS  BY  A  FRACTION,  THE
       S. 6359--D                         70                         A. 8559--D

    1  NUMERATOR OF WHICH IS THE MILES IN SUCH BUSINESS WITHIN THE STATE DURING
    2  THE PERIOD COVERED BY THE TAXPAYER'S REPORT AND THE DENOMINATOR OF WHICH
    3  IS  THE  MILES IN SUCH BUSINESS WITHIN AND WITHOUT THE STATE DURING SUCH
    4  PERIOD.   RECEIPTS FROM THE CONDUCT OF THE RAILROAD BUSINESS OR A TRUCK-
    5  ING BUSINESS ARE INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT  FRAC-
    6  TION.
    7    7.  RECEIPTS  FROM  AVIATION  SERVICES.  (A)  AIR  FREIGHT FORWARDING.
    8  RECEIPTS OF A TAXPAYER FROM  THE  ACTIVITY  OF  AIR  FREIGHT  FORWARDING
    9  ACTING  AS PRINCIPAL AND LIKE INDIRECT AIR CARRIER RECEIPTS ARISING FROM
   10  SUCH ACTIVITY SHALL BE INCLUDED IN THE NUMERATOR  OF  THE  APPORTIONMENT
   11  FRACTION  AS  FOLLOWS:  ONE HUNDRED PERCENT OF SUCH RECEIPTS IF BOTH THE
   12  PICKUP AND DELIVERY ASSOCIATED WITH SUCH RECEIPTS ARE MADE IN THE  STATE
   13  AND  FIFTY  PERCENT  OF  SUCH  RECEIPTS IF EITHER THE PICKUP OR DELIVERY
   14  ASSOCIATED WITH SUCH RECEIPTS IS MADE IN THIS  STATE.    SUCH  RECEIPTS,
   15  WHETHER THE PICKUP OR DELIVERY ASSOCIATED WITH THE RECEIPTS IS WITHIN OR
   16  WITHOUT  THE  STATE,  SHALL BE INCLUDED IN THE DENOMINATOR OF THE APPOR-
   17  TIONMENT FRACTION.
   18    (B) OTHER AVIATION SERVICES. (1)(A)  THE  PORTION  OF  RECEIPTS  OF  A
   19  TAXPAYER  FROM AVIATION SERVICES (OTHER THAN SERVICES DESCRIBED IN PARA-
   20  GRAPH (A) OF THIS SUBDIVISION) TO BE INCLUDED IN THE  NUMERATOR  OF  THE
   21  APPORTIONMENT  FRACTION  SHALL BE DETERMINED BY MULTIPLYING ITS RECEIPTS
   22  FROM SUCH AVIATION SERVICES BY A PERCENTAGE WHICH IS EQUAL TO THE ARITH-
   23  METIC AVERAGE OF THE FOLLOWING THREE PERCENTAGES:
   24    (I) THE  PERCENTAGE  DETERMINED  BY  DIVIDING  SIXTY  PERCENT  OF  THE
   25  AIRCRAFT  ARRIVALS  AND  DEPARTURES  WITHIN  THIS  STATE BY THE TAXPAYER
   26  DURING THE PERIOD COVERED BY ITS REPORT BY THE TOTAL  AIRCRAFT  ARRIVALS
   27  AND  DEPARTURES  WITHIN  AND  WITHOUT  THIS  STATE  DURING  SUCH PERIOD;
   28  PROVIDED, HOWEVER, ARRIVALS AND DEPARTURES  SOLELY  FOR  MAINTENANCE  OR
   29  REPAIR,  REFUELING  (WHERE  NO  DEBARKATION  OR  EMBARKATION  OF TRAFFIC
   30  OCCURS), ARRIVALS AND DEPARTURES OF FERRY AND PERSONNEL TRAINING FLIGHTS
   31  OR ARRIVALS AND DEPARTURES IN THE EVENT OF  EMERGENCY  SITUATIONS  SHALL
   32  NOT  BE  INCLUDED  IN  COMPUTING  SUCH ARRIVAL AND DEPARTURE PERCENTAGE;
   33  PROVIDED, FURTHER, THE COMMISSIONER MAY ALSO EXEMPT FROM SUCH PERCENTAGE
   34  AIRCRAFT ARRIVALS AND DEPARTURES OF ALL  NON-REVENUE  FLIGHTS  INCLUDING
   35  FLIGHTS  INVOLVING THE TRANSPORTATION OF OFFICERS OR EMPLOYEES RECEIVING
   36  AIR TRANSPORTATION TO PERFORM MAINTENANCE OR REPAIR  SERVICES  OR  WHERE
   37  SUCH  OFFICERS OR EMPLOYEES ARE TRANSPORTED IN CONJUNCTION WITH AN EMER-
   38  GENCY SITUATION OR THE INVESTIGATION OF AN AIR DISASTER (OTHER THAN ON A
   39  SCHEDULED FLIGHT); PROVIDED, HOWEVER, THAT ARRIVALS  AND  DEPARTURES  OF
   40  FLIGHTS TRANSPORTING OFFICERS AND EMPLOYEES RECEIVING AIR TRANSPORTATION
   41  FOR PURPOSES OTHER THAN SPECIFIED ABOVE (WITHOUT REGARD TO REMUNERATION)
   42  SHALL BE INCLUDED IN COMPUTING SUCH ARRIVAL AND DEPARTURE PERCENTAGE;
   43    (II) THE PERCENTAGE DETERMINED BY DIVIDING SIXTY PERCENT OF THE REVEN-
   44  UE  TONS  HANDLED  BY  THE TAXPAYER AT AIRPORTS WITHIN THIS STATE DURING
   45  SUCH PERIOD BY THE TOTAL REVENUE TONS HANDLED BY IT AT  AIRPORTS  WITHIN
   46  AND WITHOUT THIS STATE DURING SUCH PERIOD; AND
   47    (III)  THE  PERCENTAGE  DETERMINED  BY  DIVIDING  SIXTY PERCENT OF THE
   48  TAXPAYER'S ORIGINATING REVENUE WITHIN THIS STATE FOR SUCH PERIOD BY  ITS
   49  TOTAL ORIGINATING REVENUE WITHIN AND WITHOUT THIS STATE FOR SUCH PERIOD.
   50    (B)  AS  USED HEREIN THE TERM "AIRCRAFT ARRIVALS AND DEPARTURES" MEANS
   51  THE NUMBER OF LANDINGS AND TAKEOFFS OF THE AIRCRAFT OF THE TAXPAYER  AND
   52  THE NUMBER OF AIR PICKUPS AND DELIVERIES BY THE AIRCRAFT OF SUCH TAXPAY-
   53  ER;  THE  TERM  "ORIGINATING REVENUE" MEANS REVENUE TO THE TAXPAYER FROM
   54  THE TRANSPORTATION OR REVENUE  PASSENGERS  AND  REVENUE  PROPERTY  FIRST
   55  RECEIVED  BY THE TAXPAYER EITHER AS ORIGINATING OR CONNECTING TRAFFIC AT
   56  AIRPORTS; AND THE  TERM  "REVENUE  TONS  HANDLED"  BY  THE  TAXPAYER  AT
       S. 6359--D                         71                         A. 8559--D

    1  AIRPORTS  MEANS THE WEIGHT IN TONS OF REVENUE PASSENGERS (AT TWO HUNDRED
    2  POUNDS PER PASSENGER) AND REVENUE CARGO FIRST RECEIVED EITHER AS  ORIGI-
    3  NATING  OR  CONNECTING  TRAFFIC OR FINALLY DISCHARGED BY THE TAXPAYER AT
    4  AIRPORTS;
    5    (2)  ALL  SUCH RECEIPTS OF A TAXPAYER FROM AVIATION SERVICES DESCRIBED
    6  IN THIS PARAGRAPH ARE INCLUDED IN THE DENOMINATOR OF  THE  APPORTIONMENT
    7  FRACTION.
    8    8. RECEIPTS FROM SALES OF ADVERTISING. (A) THE AMOUNT OF RECEIPTS FROM
    9  SALES OF ADVERTISING IN NEWSPAPERS OR PERIODICALS INCLUDED IN THE NUMER-
   10  ATOR  OF  THE  APPORTIONMENT  FRACTION  IS DETERMINED BY MULTIPLYING THE
   11  TOTAL OF SUCH RECEIPTS BY A FRACTION, THE  NUMERATOR  OF  WHICH  IS  THE
   12  NUMBER  OF  NEWSPAPERS  AND  PERIODICALS  DELIVERED TO POINTS WITHIN THE
   13  STATE AND THE DENOMINATOR OF WHICH IS THE NUMBER OF NEWSPAPERS AND PERI-
   14  ODICALS DELIVERED TO POINTS WITHIN AND WITHOUT THE STATE. THE  TOTAL  OF
   15  SUCH  RECEIPTS FROM SALES OF ADVERTISING IN NEWSPAPERS OR PERIODICALS IS
   16  INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
   17    (B) THE AMOUNT OF RECEIPTS FROM SALES OF ADVERTISING ON TELEVISION  OR
   18  RADIO  INCLUDED IN THE APPORTIONMENT FRACTION IS DETERMINED BY MULTIPLY-
   19  ING THE TOTAL OF SUCH RECEIPTS BY A FRACTION, THE NUMERATOR OF WHICH  IS
   20  THE  NUMBER OF VIEWERS OR LISTENERS WITHIN THE STATE AND THE DENOMINATOR
   21  OF WHICH IS THE NUMBER OF VIEWERS OR LISTENERS WITHIN  AND  WITHOUT  THE
   22  STATE.  THE  TOTAL  OF  SUCH RECEIPTS FROM SALES OF ADVERTISING ON TELE-
   23  VISION AND RADIO IS INCLUDED IN THE  DENOMINATOR  OF  THE  APPORTIONMENT
   24  FRACTION.
   25    (C)  THE AMOUNT OF RECEIPTS FROM SALES OF ADVERTISING NOT DESCRIBED IN
   26  PARAGRAPH (A) OR (B) OF THIS SUBDIVISION THAT IS FURNISHED, PROVIDED  OR
   27  DELIVERED  TO,  OR ACCESSED BY THE VIEWER OR LISTENER THROUGH THE USE OF
   28  WIRE, CABLE, FIBER-OPTIC, LASER, MICROWAVE,  RADIO  WAVE,  SATELLITE  OR
   29  SIMILAR  SUCCESSOR  MEDIA  OR  ANY  COMBINATION THEREOF, INCLUDED IN THE
   30  NUMERATOR OF THE APPORTIONMENT FRACTION IS DETERMINED BY MULTIPLYING THE
   31  TOTAL OF SUCH RECEIPTS BY A FRACTION, THE  NUMERATOR  OF  WHICH  IS  THE
   32  NUMBER  OF  VIEWERS OR LISTENERS WITHIN THE STATE AND THE DENOMINATOR OF
   33  WHICH IS THE NUMBER OF VIEWERS  OR  LISTENERS  WITHIN  AND  WITHOUT  THE
   34  STATE. THE TOTAL OF SUCH RECEIPTS FROM SALES OF ADVERTISING DESCRIBED IN
   35  THIS PARAGRAPH IS INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRAC-
   36  TION.
   37    9.  RECEIPTS FROM TRANSPORTATION OR TRANSMISSION OF GAS THROUGH PIPES.
   38  RECEIPTS FROM THE TRANSPORTATION OR TRANSMISSION OF  GAS  THROUGH  PIPES
   39  ARE  INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION AS FOLLOWS.
   40  THE AMOUNT OF RECEIPTS FROM THE TRANSPORTATION OR  TRANSMISSION  OF  GAS
   41  THROUGH PIPES INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION IS
   42  DETERMINED  BY  MULTIPLYING THE TOTAL AMOUNT OF SUCH RECEIPTS BY A FRAC-
   43  TION, THE NUMERATOR OF WHICH  IS  THE  TAXPAYER'S  TRANSPORTATION  UNITS
   44  WITHIN  THE  STATE AND THE DENOMINATOR OF WHICH IS THE TAXPAYER'S TRANS-
   45  PORTATION UNITS WITHIN AND WITHOUT THE STATE. A TRANSPORTATION  UNIT  IS
   46  THE TRANSPORTATION OF ONE CUBIC FOOT OF GAS OVER A DISTANCE OF ONE MILE.
   47  THE  TOTAL AMOUNT OF RECEIPTS FROM THE TRANSPORTATION OR TRANSMISSION OF
   48  GAS THROUGH PIPES IS INCLUDED IN THE DENOMINATOR  OF  THE  APPORTIONMENT
   49  FRACTION.
   50    10.  (A)  RECEIPTS  FROM  OTHER  SERVICES AND OTHER BUSINESS RECEIPTS.
   51  RECEIPTS FROM SERVICES NOT ADDRESSED IN SUBDIVISIONS ONE THROUGH NINE OF
   52  THIS SECTION AND OTHER BUSINESS RECEIPTS NOT ADDRESSED IN SUCH  SUBDIVI-
   53  SIONS  SHALL  BE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION
   54  IF THE LOCATION OF THE CUSTOMER IS WITHIN THE STATE. SUCH RECEIPTS  FROM
   55  CUSTOMERS  WITHIN  AND WITHOUT THE STATE ARE INCLUDED IN THE DENOMINATOR
   56  OF THE APPORTIONMENT FRACTION. WHETHER THE RECEIPTS ARE INCLUDED IN  THE
       S. 6359--D                         72                         A. 8559--D

    1  NUMERATOR  OF  THE APPORTIONMENT FRACTION IS DETERMINED ACCORDING TO THE
    2  HIERARCHY OF METHOD SET FORTH IN PARAGRAPH (B) OF THIS SUBDIVISION.  THE
    3  TAXPAYER MUST EXERCISE DUE DILIGENCE UNDER EACH METHOD DESCRIBED IN SUCH
    4  PARAGRAPH  (B)  BEFORE REJECTING IT AND PROCEEDING TO THE NEXT METHOD IN
    5  THE HIERARCHY, AND MUST BASE ITS DETERMINATION ON INFORMATION  KNOWN  TO
    6  THE  TAXPAYER  OR  INFORMATION  THAT WOULD BE KNOWN TO THE TAXPAYER UPON
    7  REASONABLE INQUIRY.
    8    (B) HIERARCHY OF METHODS. (1) THE BENEFIT IS RECEIVED IN THIS STATE;
    9    (2) DELIVERY DESTINATION;
   10    (3) THE APPORTIONMENT FRACTION FOR  SUCH  RECEIPTS  WITHIN  THE  STATE
   11  DETERMINED  PURSUANT TO THIS SUBDIVISION FOR THE PRECEDING TAXABLE YEAR;
   12  OR
   13    (4) THE APPORTIONMENT FRACTION IN THE CURRENT TAXABLE YEAR  DETERMINED
   14  PURSUANT  TO  THIS  SUBDIVISION  FOR  THOSE RECEIPTS THAT CAN BE SOURCED
   15  USING THE HIERARCHY OF SOURCING METHODS IN SUBPARAGRAPHS ONE AND TWO  OF
   16  THIS PARAGRAPH.
   17    11.  IF  IT  SHALL  APPEAR  THAT THE APPORTIONMENT FRACTION DETERMINED
   18  PURSUANT TO THIS SECTION DOES NOT RESULT IN A PROPER REFLECTION  OF  THE
   19  TAXPAYER'S BUSINESS INCOME OR CAPITAL WITHIN THE STATE, THE COMMISSIONER
   20  IS AUTHORIZED IN HIS OR HER DISCRETION TO ADJUST IT, OR THE TAXPAYER MAY
   21  REQUEST  THAT  THE  COMMISSIONER ADJUST IT, BY (A) EXCLUDING ONE OR MORE
   22  ITEMS IN SUCH DETERMINATION, (B) INCLUDING ONE OR MORE  OTHER  ITEMS  IN
   23  SUCH  DETERMINATION, OR (C) ANY OTHER SIMILAR OR DIFFERENT METHOD CALCU-
   24  LATED TO EFFECT A FAIR AND PROPER APPORTIONMENT OF THE  BUSINESS  INCOME
   25  AND  CAPITAL  REASONABLY ATTRIBUTED TO THE STATE.  THE PARTY SEEKING THE
   26  ADJUSTMENT SHALL BEAR THE BURDEN OF PROOF TO DEMONSTRATE THAT THE APPOR-
   27  TIONMENT FRACTION DETERMINED PURSUANT TO THIS SECTION DOES NOT RESULT IN
   28  A PROPER REFLECTION OF THE TAXPAYER'S BUSINESS INCOME OR CAPITAL  WITHIN
   29  THE STATE AND THAT THE PROPOSED ADJUSTMENT IS APPROPRIATE.
   30    S  17. The tax law is amended by adding a new section 210-B to read as
   31  follows:
   32    S 210-B. CREDITS. 1. INVESTMENT TAX CREDIT  (ITC).    (A)  A  TAXPAYER
   33  SHALL  BE  ALLOWED  A  CREDIT,  TO  BE COMPUTED AS HEREINAFTER PROVIDED,
   34  AGAINST THE TAX IMPOSED BY THIS ARTICLE. THE AMOUNT OF THE CREDIT  SHALL
   35  BE  THE  PERCENT PROVIDED FOR HEREINBELOW OF THE INVESTMENT CREDIT BASE.
   36  THE INVESTMENT CREDIT BASE IS THE COST OR OTHER BASIS FOR FEDERAL INCOME
   37  TAX PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE  PROPERTY,
   38  INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, DESCRIBED IN
   39  PARAGRAPH  (B)  OF THIS SUBDIVISION, LESS THE AMOUNT OF THE NONQUALIFIED
   40  NONRECOURSE FINANCING WITH RESPECT TO SUCH PROPERTY TO THE  EXTENT  SUCH
   41  FINANCING  WOULD  BE EXCLUDIBLE FROM THE CREDIT BASE PURSUANT TO SECTION
   42  46(C)(8) OF THE INTERNAL REVENUE CODE (TREATING SUCH PROPERTY AS SECTION
   43  THIRTY-EIGHT PROPERTY IRRESPECTIVE OF WHETHER OR NOT IT IN FACT  CONSTI-
   44  TUTES SECTION THIRTY-EIGHT PROPERTY). IF, AT THE CLOSE OF A TAXABLE YEAR
   45  FOLLOWING THE TAXABLE YEAR IN WHICH SUCH PROPERTY WAS PLACED IN SERVICE,
   46  THERE  IS  A  NET  DECREASE  IN  THE  AMOUNT OF NONQUALIFIED NONRECOURSE
   47  FINANCING WITH RESPECT TO SUCH PROPERTY,  SUCH  NET  DECREASE  SHALL  BE
   48  TREATED  AS  IF IT WERE THE COST OR OTHER BASIS OF PROPERTY DESCRIBED IN
   49  PARAGRAPH (B) OF THIS SUBDIVISION ACQUIRED,  CONSTRUCTED,  RECONSTRUCTED
   50  OR ERECTED DURING THE YEAR OF THE DECREASE IN THE AMOUNT OF NONQUALIFIED
   51  NONRECOURSE FINANCING. IN THE CASE OF A COMBINED REPORT THE TERM INVEST-
   52  MENT  CREDIT  BASE  SHALL  MEAN THE SUM OF THE INVESTMENT CREDIT BASE OF
   53  EACH CORPORATION INCLUDED ON SUCH REPORT. THE PERCENTAGE TO BE  USED  TO
   54  COMPUTE  THE  CREDIT  ALLOWED PURSUANT TO THIS SUBDIVISION SHALL BE FIVE
   55  PERCENT WITH RESPECT TO THE FIRST THREE HUNDRED FIFTY MILLION DOLLARS OF
   56  THE INVESTMENT CREDIT BASE, AND FOUR PERCENT WITH RESPECT TO THE INVEST-
       S. 6359--D                         73                         A. 8559--D

    1  MENT CREDIT BASE IN EXCESS  OF  THREE  HUNDRED  FIFTY  MILLION  DOLLARS,
    2  EXCEPT  THAT  IN  THE  CASE  OF RESEARCH AND DEVELOPMENT PROPERTY AT THE
    3  OPTION OF THE TAXPAYER THE APPLICABLE PERCENTAGE SHALL BE NINE.
    4    (B)  (I) A CREDIT SHALL BE ALLOWED UNDER THIS SUBDIVISION WITH RESPECT
    5  TO TANGIBLE PERSONAL PROPERTY AND  OTHER  TANGIBLE  PROPERTY,  INCLUDING
    6  BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH ARE: DEPRECIABLE
    7  PURSUANT  TO  SECTION  ONE  HUNDRED  SIXTY-SEVEN OF THE INTERNAL REVENUE
    8  CODE, HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, ARE ACQUIRED BY PURCHASE
    9  AS DEFINED IN SECTION ONE  HUNDRED  SEVENTY-NINE  (D)  OF  THE  INTERNAL
   10  REVENUE CODE, HAVE A SITUS IN THIS STATE AND ARE (A) PRINCIPALLY USED BY
   11  THE  TAXPAYER  IN  THE PRODUCTION OF GOODS BY MANUFACTURING, PROCESSING,
   12  ASSEMBLING, REFINING, MINING, EXTRACTING, FARMING,  AGRICULTURE,  HORTI-
   13  CULTURE, FLORICULTURE, VITICULTURE OR COMMERCIAL FISHING, (B) INDUSTRIAL
   14  WASTE  TREATMENT FACILITIES OR AIR POLLUTION CONTROL FACILITIES, USED IN
   15  THE TAXPAYER'S TRADE OR BUSINESS, (C) RESEARCH AND DEVELOPMENT PROPERTY,
   16  OR (D) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE  TAXPAYER'S  TRADE
   17  OR  BUSINESS  AS  A  BROKER OR DEALER IN CONNECTION WITH THE PURCHASE OR
   18  SALE (WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE  ISSUANCE,  ENTERING
   19  INTO,  ASSUMPTION,  OFFSET,  ASSIGNMENT,  TERMINATION,  OR  TRANSFER) OF
   20  STOCKS, BONDS OR OTHER SECURITIES AS DEFINED  IN  SECTION  FOUR  HUNDRED
   21  SEVENTY-FIVE  (C)(2)  OF THE INTERNAL REVENUE CODE, OR OF COMMODITIES AS
   22  DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (E) OF THE INTERNAL REVENUE
   23  CODE, (E) PRINCIPALLY USED IN THE  ORDINARY  COURSE  OF  THE  TAXPAYER'S
   24  TRADE  OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES FOR A REGU-
   25  LATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT  HUNDRED  FIFTY-ONE
   26  OF THE INTERNAL REVENUE CODE, OR LENDING, LOAN ARRANGEMENT OR LOAN ORIG-
   27  INATION  SERVICES  TO  CUSTOMERS IN CONNECTION WITH THE PURCHASE OR SALE
   28  (WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING  INTO,
   29  ASSUMPTION,  OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF SECURITIES
   30  AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (C)(2) OF  THE  INTERNAL
   31  REVENUE  CODE, (F) ORIGINALLY USED IN THE ORDINARY COURSE OF THE TAXPAY-
   32  ER'S BUSINESS  AS  AN  EXCHANGE  REGISTERED  AS  A  NATIONAL  SECURITIES
   33  EXCHANGE  WITHIN THE MEANING OF SECTIONS 3(A)(1) AND 6(A) OF THE SECURI-
   34  TIES EXCHANGE ACT OF 1934 OR A BOARD OF  TRADE  AS  DEFINED  IN  SECTION
   35  1410(A)(1) OF THE NEW YORK NOT-FOR-PROFIT CORPORATION LAW OR AS AN ENTI-
   36  TY  THAT  IS  WHOLLY  OWNED  BY  ONE  OR  MORE  SUCH NATIONAL SECURITIES
   37  EXCHANGES OR BOARDS OF TRADE AND THAT PROVIDES AUTOMATION  OR  TECHNICAL
   38  SERVICES THERETO, OR (G) PRINCIPALLY USED AS A QUALIFIED FILM PRODUCTION
   39  FACILITY  INCLUDING  QUALIFIED FILM PRODUCTION FACILITIES HAVING A SITUS
   40  IN AN EMPIRE ZONE DESIGNATED AS SUCH PURSUANT TO ARTICLE  EIGHTEEN-B  OF
   41  THE GENERAL MUNICIPAL LAW, WHERE THE TAXPAYER IS PROVIDING THREE OR MORE
   42  SERVICES  TO  ANY  QUALIFIED FILM PRODUCTION COMPANY USING THE FACILITY,
   43  INCLUDING SUCH SERVICES AS A STUDIO LIGHTING  GRID,  LIGHTING  AND  GRIP
   44  EQUIPMENT,  MULTI-LINE  PHONE  SERVICE, BROADBAND INFORMATION TECHNOLOGY
   45  ACCESS, INDUSTRIAL SCALE ELECTRICAL CAPACITY,  FOOD  SERVICES,  SECURITY
   46  SERVICES,  AND  HEATING,  VENTILATION  AND  AIR  CONDITIONING. PROVIDED,
   47  HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED THE CREDIT PROVIDED BY  CLAUSES
   48  (D),  (E) AND (F) OF THIS SUBPARAGRAPH UNLESS (I) EIGHTY PERCENT OR MORE
   49  OF THE EMPLOYEES PERFORMING THE  ADMINISTRATIVE  AND  SUPPORT  FUNCTIONS
   50  RESULTING  FROM  OR RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT ARE
   51  LOCATED IN THIS STATE OR (II)  THE  AVERAGE  NUMBER  OF  EMPLOYEES  THAT
   52  PERFORM  THE  ADMINISTRATIVE  AND  SUPPORT  FUNCTIONS  RESULTING FROM OR
   53  RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT AND ARE LOCATED IN THIS
   54  STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS CLAIMED  IS  EQUAL
   55  TO  OR GREATER THAN NINETY-FIVE PERCENT OF THE AVERAGE NUMBER OF EMPLOY-
   56  EES THAT PERFORM THESE FUNCTIONS AND ARE LOCATED IN  THIS  STATE  DURING
       S. 6359--D                         74                         A. 8559--D

    1  THE THIRTY-SIX MONTHS IMMEDIATELY PRECEDING THE YEAR FOR WHICH THE CRED-
    2  IT  IS  CLAIMED,  OR (III) THE NUMBER OF EMPLOYEES LOCATED IN THIS STATE
    3  DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS CLAIMED IS EQUAL  TO  OR
    4  GREATER  THAN  NINETY PERCENT OF THE NUMBER OF EMPLOYEES LOCATED IN THIS
    5  STATE ON DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT OR, IF THE
    6  TAXPAYER  WAS  NOT  A  CALENDAR  YEAR  TAXPAYER  IN   NINETEEN   HUNDRED
    7  NINETY-EIGHT, THE LAST DAY OF ITS FIRST TAXABLE YEAR ENDING AFTER DECEM-
    8  BER THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT. IF THE TAXPAYER BECOMES
    9  SUBJECT  TO  TAX IN THIS STATE AFTER THE TAXABLE YEAR BEGINNING IN NINE-
   10  TEEN HUNDRED NINETY-EIGHT, THEN THE TAXPAYER IS NOT REQUIRED TO  SATISFY
   11  THE  EMPLOYMENT TEST PROVIDED IN THE PRECEDING SENTENCE OF THIS SUBPARA-
   12  GRAPH FOR ITS FIRST TAXABLE YEAR. FOR PURPOSES OF CLAUSE (III)  OF  THIS
   13  SUBPARAGRAPH  THE EMPLOYMENT TEST WILL BE BASED ON THE NUMBER OF EMPLOY-
   14  EES LOCATED IN THIS STATE ON THE LAST DAY OF THE FIRST TAXABLE YEAR  THE
   15  TAXPAYER  IS  SUBJECT TO TAX IN THIS STATE.  IF THE USES OF THE PROPERTY
   16  MUST BE AGGREGATED TO DETERMINE WHETHER THE PROPERTY IS PRINCIPALLY USED
   17  IN QUALIFYING USES, THEN EITHER EACH AFFILIATE USING THE  PROPERTY  MUST
   18  SATISFY  THIS  EMPLOYMENT TEST OR THIS EMPLOYMENT TEST MUST BE SATISFIED
   19  THROUGH THE AGGREGATION OF THE EMPLOYEES OF THE TAXPAYER, ITS AFFILIATED
   20  REGULATED BROKER, DEALER, AND REGISTERED INVESTMENT  ADVISER  USING  THE
   21  PROPERTY.   FOR PURPOSES OF THIS SUBDIVISION, THE TERM "GOODS" SHALL NOT
   22  INCLUDE ELECTRICITY.
   23    (II) FOR PURPOSES OF THIS PARAGRAPH, THE FOLLOWING  DEFINITIONS  SHALL
   24  APPLY--
   25    (A) MANUFACTURING SHALL MEAN THE PROCESS OF WORKING RAW MATERIALS INTO
   26  WARES  SUITABLE  FOR  USE  OR WHICH GIVES NEW SHAPES, NEW QUALITY OR NEW
   27  COMBINATIONS TO MATTER WHICH ALREADY HAS GONE  THROUGH  SOME  ARTIFICIAL
   28  PROCESS  BY  THE  USE  OF MACHINERY, TOOLS, APPLIANCES AND OTHER SIMILAR
   29  EQUIPMENT. PROPERTY USED  IN  THE  PRODUCTION  OF  GOODS  SHALL  INCLUDE
   30  MACHINERY,  EQUIPMENT  OR  OTHER  TANGIBLE PROPERTY WHICH IS PRINCIPALLY
   31  USED IN THE REPAIR AND SERVICE OF OTHER MACHINERY,  EQUIPMENT  OR  OTHER
   32  TANGIBLE  PROPERTY USED PRINCIPALLY IN THE PRODUCTION OF GOODS AND SHALL
   33  INCLUDE ALL FACILITIES USED IN THE PRODUCTION OPERATION, INCLUDING STOR-
   34  AGE OF MATERIAL TO BE USED IN PRODUCTION AND OF THE  PRODUCTS  THAT  ARE
   35  PRODUCED.
   36    (B)  RESEARCH  AND  DEVELOPMENT  PROPERTY SHALL MEAN PROPERTY WHICH IS
   37  USED FOR PURPOSES OF RESEARCH AND DEVELOPMENT  IN  THE  EXPERIMENTAL  OR
   38  LABORATORY SENSE. SUCH PURPOSES SHALL NOT BE DEEMED TO INCLUDE THE ORDI-
   39  NARY TESTING OR INSPECTION OF MATERIALS OR PRODUCTS FOR QUALITY CONTROL,
   40  EFFICIENCY  SURVEYS,  MANAGEMENT STUDIES, CONSUMER SURVEYS, ADVERTISING,
   41  PROMOTIONS, OR RESEARCH IN CONNECTION WITH LITERARY, HISTORICAL OR SIMI-
   42  LAR PROJECTS.
   43    (C) INDUSTRIAL WASTE TREATMENT FACILITIES SHALL MEAN PROPERTY  CONSTI-
   44  TUTING  FACILITIES FOR THE TREATMENT, NEUTRALIZATION OR STABILIZATION OF
   45  INDUSTRIAL WASTE AND OTHER WASTES (AS THE TERMS "INDUSTRIAL  WASTE"  AND
   46  "OTHER  WASTES"  ARE  DEFINED  IN  SECTION  17-0105 OF THE ENVIRONMENTAL
   47  CONSERVATION LAW) FROM A POINT IMMEDIATELY PRECEDING THE POINT  OF  SUCH
   48  TREATMENT,  NEUTRALIZATION  OR  STABILIZATION  TO THE POINT OF DISPOSAL,
   49  INCLUDING THE NECESSARY PUMPING AND TRANSMITTING FACILITIES, BUT EXCLUD-
   50  ING SUCH FACILITIES INSTALLED FOR THE PRIMARY PURPOSE OF SALVAGING MATE-
   51  RIALS WHICH ARE USABLE IN THE MANUFACTURING PROCESS OR ARE MARKETABLE.
   52    (D) AIR POLLUTION CONTROL FACILITIES SHALL MEAN PROPERTY  CONSTITUTING
   53  FACILITIES WHICH REMOVE, REDUCE, OR RENDER LESS NOXIOUS AIR CONTAMINANTS
   54  EMITTED FROM AN AIR CONTAMINATION SOURCE (AS THE TERMS "AIR CONTAMINANT"
   55  AND  "AIR  CONTAMINATION  SOURCE"  ARE DEFINED IN SECTION 19-0107 OF THE
   56  ENVIRONMENTAL CONSERVATION LAW) FROM A POINT IMMEDIATELY  PRECEDING  THE
       S. 6359--D                         75                         A. 8559--D

    1  POINT  OF SUCH REMOVAL, REDUCTION OR RENDERING TO THE POINT OF DISCHARGE
    2  OF AIR, MEETING EMISSION STANDARDS AS ESTABLISHED BY THE  DEPARTMENT  OF
    3  ENVIRONMENTAL  CONSERVATION, BUT EXCLUDING SUCH FACILITIES INSTALLED FOR
    4  THE PRIMARY PURPOSE OF SALVAGING MATERIALS WHICH ARE USABLE IN THE MANU-
    5  FACTURING PROCESS OR ARE MARKETABLE AND EXCLUDING THOSE FACILITIES WHICH
    6  RELY  FOR  THEIR EFFICACY ON DILUTION, DISPERSION OR ASSIMILATION OF AIR
    7  CONTAMINANTS IN THE AMBIENT AIR AFTER EMISSION. SUCH TERM SHALL  FURTHER
    8  INCLUDE FLUE GAS DESULFURIZATION EQUIPMENT AND ATTENDANT SLUDGE DISPOSAL
    9  FACILITIES,  FLUIDIZED  BED BOILERS, PRECOMBUSTION COAL CLEANING FACILI-
   10  TIES OR OTHER FACILITIES THAT CONFORM WITH THIS  SUBDIVISION  AND  WHICH
   11  COMPLY  WITH THE PROVISIONS OF THE STATE ACID DEPOSITION CONTROL ACT SET
   12  FORTH IN TITLE NINE OF ARTICLE NINETEEN OF THE  ENVIRONMENTAL  CONSERVA-
   13  TION LAW.
   14    (E) THE TERMS "QUALIFIED FILM PRODUCTION FACILITY" AND "QUALIFIED FILM
   15  PRODUCTION   COMPANY"   SHALL  HAVE  THE  SAME  MEANING  AS  IN  SECTION
   16  TWENTY-FOUR OF THIS CHAPTER.
   17    (III) HOWEVER, SUCH CREDIT SHALL BE ALLOWED WITH RESPECT TO INDUSTRIAL
   18  WASTE TREATMENT FACILITIES AND AIR POLLUTION CONTROL FACILITIES ONLY  ON
   19  CONDITION  THAT SUCH FACILITIES HAVE BEEN CERTIFIED BY THE STATE COMMIS-
   20  SIONER OF ENVIRONMENTAL CONSERVATION OR HIS  DESIGNATED  REPRESENTATIVE,
   21  PURSUANT  TO  SUBDIVISION  ONE  OF SECTION 17-0707 OR SUBDIVISION ONE OF
   22  SECTION 19-0309 OF THE ENVIRONMENTAL CONSERVATION LAW, AS COMPLYING WITH
   23  APPLICABLE PROVISIONS OF THE ENVIRONMENTAL CONSERVATION LAW, THE  PUBLIC
   24  HEALTH  LAW,  THE  STATE  SANITARY  CODE  AND CODES, RULES, REGULATIONS,
   25  PERMITS OR ORDERS ISSUED PURSUANT THERETO.
   26    (C) A TAXPAYER SHALL NOT BE ALLOWED A CREDIT  UNDER  THIS  SUBDIVISION
   27  WITH  RESPECT TO TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY,
   28  INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS  OF  BUILDINGS,  WHICH  IT
   29  LEASES TO ANY OTHER PERSON OR CORPORATION EXCEPT WHERE A TAXPAYER LEASES
   30  PROPERTY  TO  AN AFFILIATED REGULATED BROKER, DEALER, REGISTERED INVEST-
   31  MENT ADVISER, NATIONAL SECURITIES EXCHANGE OR BOARD OF TRADE  (OR  OTHER
   32  ENTITY  DESCRIBED  IN CLAUSE (F) OF SUBPARAGRAPH (I) OF PARAGRAPH (B) OF
   33  THIS SUBDIVISION) THAT USES SUCH PROPERTY IN ACCORDANCE WITH CLAUSE (D),
   34  (E) OR (F) OF SUBPARAGRAPH (I) OF PARAGRAPH  (B)  OF  THIS  SUBDIVISION.
   35  FOR  PURPOSES  OF  THE  PRECEDING SENTENCE, ANY CONTRACT OR AGREEMENT TO
   36  LEASE OR RENT OR FOR A LICENSE TO USE SUCH PROPERTY SHALL BE  CONSIDERED
   37  A  LEASE.  PROVIDED, HOWEVER, IN DETERMINING WHETHER A TAXPAYER SHALL BE
   38  ALLOWED A CREDIT UNDER THIS SUBDIVISION WITH RESPECT TO  SUCH  PROPERTY,
   39  ANY  ELECTION  MADE  WITH  RESPECT  TO  SUCH  PROPERTY  PURSUANT  TO THE
   40  PROVISIONS OF PARAGRAPH EIGHT OF SUBSECTION (F) OF SECTION  ONE  HUNDRED
   41  SIXTY-EIGHT  OF  THE  INTERNAL  REVENUE  CODE,  AS SUCH PARAGRAPH WAS IN
   42  EFFECT FOR AGREEMENTS ENTERED INTO  PRIOR  TO  JANUARY  FIRST,  NINETEEN
   43  HUNDRED  EIGHTY-FOUR,  SHALL  BE DISREGARDED. FOR PURPOSES OF THIS PARA-
   44  GRAPH, THE USE OF A QUALIFIED FILM PRODUCTION FACILITY  BY  A  QUALIFIED
   45  FILM PRODUCTION COMPANY SHALL NOT BE CONSIDERED A LEASE OF SUCH FACILITY
   46  TO SUCH COMPANY.
   47    (D) EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH, THE CREDIT ALLOWED
   48  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE
   49  FOR SUCH YEAR TO LESS THAN THE HIGHER OF THE AMOUNTS PRESCRIBED IN PARA-
   50  GRAPHS  (C)  AND (D) OF SUBDIVISION ONE OF THIS SECTION. HOWEVER, IF THE
   51  AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY  TAXABLE  YEAR
   52  REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT ALLOWED FOR A TAXA-
   53  BLE YEAR COMMENCING PRIOR TO JANUARY FIRST, NINETEEN HUNDRED EIGHTY-SEV-
   54  EN  AND  NOT  DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE
   55  FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX  FOR
   56  SUCH  YEAR OR YEARS BUT IN NO EVENT SHALL SUCH CREDIT BE CARRIED OVER TO
       S. 6359--D                         76                         A. 8559--D

    1  TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST,  TWO  THOUSAND  TWO,
    2  AND  ANY  AMOUNT  OF  CREDIT ALLOWED FOR A TAXABLE YEAR COMMENCING ON OR
    3  AFTER JANUARY FIRST, NINETEEN HUNDRED EIGHTY-SEVEN AND NOT DEDUCTIBLE IN
    4  SUCH  YEAR MAY BE CARRIED OVER TO THE FIFTEEN TAXABLE YEARS NEXT FOLLOW-
    5  ING SUCH TAXABLE YEAR AND MAY BE DEDUCTED FROM THE  TAXPAYER'S  TAX  FOR
    6  SUCH  YEAR  OR YEARS. IN LIEU OF SUCH CARRYOVER, ANY SUCH TAXPAYER WHICH
    7  QUALIFIES AS A NEW BUSINESS UNDER PARAGRAPH (J) OF THIS SUBDIVISION  MAY
    8  ELECT  TO TREAT THE AMOUNT OF SUCH CARRYOVER AS AN OVERPAYMENT OF TAX TO
    9  BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION TEN
   10  HUNDRED EIGHTY-SIX OF THIS CHAPTER, PROVIDED, HOWEVER, THE PROVISIONS OF
   11  SUBSECTION (C) OF SECTION  TEN  HUNDRED  EIGHTY-EIGHT  OF  THIS  CHAPTER
   12  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   13    (E)  (1)  WITH  RESPECT  TO  PROPERTY WHICH IS DEPRECIABLE PURSUANT TO
   14  SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE CODE BUT IS  NOT
   15  SUBJECT  TO  THE  PROVISIONS  OF SECTION ONE HUNDRED SIXTY-EIGHT OF SUCH
   16  CODE AND WHICH IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR  TO
   17  THE  END  OF  THE  TAXABLE  YEAR IN WHICH THE CREDIT IS TO BE TAKEN, THE
   18  AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF THE CREDIT PROVIDED FOR IN
   19  THIS SUBDIVISION WHICH REPRESENTS THE RATIO WHICH THE MONTHS  OF  QUALI-
   20  FIED  USE BEAR TO THE MONTHS OF USEFUL LIFE. IF PROPERTY ON WHICH CREDIT
   21  HAS BEEN TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR  TO
   22  THE  END OF ITS USEFUL LIFE, THE DIFFERENCE BETWEEN THE CREDIT TAKEN AND
   23  THE CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED  BACK  IN  THE  YEAR  OF
   24  DISPOSITION. PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED OF OR CEAS-
   25  ES  TO  BE  IN QUALIFIED USE AFTER IT HAS BEEN IN QUALIFIED USE FOR MORE
   26  THAN TWELVE CONSECUTIVE YEARS, IT SHALL NOT BE NECESSARY TO ADD BACK THE
   27  CREDIT AS PROVIDED IN THIS SUBPARAGRAPH. THE AMOUNT  OF  CREDIT  ALLOWED
   28  FOR ACTUAL USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY
   29  THE RATIO WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE MONTHS OF USEFUL
   30  LIFE.  FOR  PURPOSES OF THIS SUBPARAGRAPH, USEFUL LIFE OF PROPERTY SHALL
   31  BE THE SAME AS THE TAXPAYER USES FOR DEPRECIATION PURPOSES WHEN  COMPUT-
   32  ING HIS FEDERAL INCOME TAX LIABILITY.
   33    (2) EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH SUBPARAGRAPH FOUR OF
   34  THIS  PARAGRAPH APPLIES, WITH RESPECT TO THREE-YEAR PROPERTY, AS DEFINED
   35  IN SUBSECTION (E) OF SECTION ONE HUNDRED  SIXTY-EIGHT  OF  THE  INTERNAL
   36  REVENUE  CODE,  WHICH  IS  DISPOSED  OF OR CEASES TO BE IN QUALIFIED USE
   37  PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT IS TO BE TAKEN,
   38  THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF  THE  CREDIT  PROVIDED
   39  FOR  IN  THIS SUBDIVISION WHICH REPRESENTS THE RATIO WHICH THE MONTHS OF
   40  QUALIFIED USE BEAR TO THIRTY-SIX. IF PROPERTY ON WHICH CREDIT  HAS  BEEN
   41  TAKEN  IS  DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO THE END
   42  OF THIRTY-SIX MONTHS, THE DIFFERENCE BETWEEN THE CREDIT  TAKEN  AND  THE
   43  CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE YEAR OF DISPOSI-
   44  TION. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL USE SHALL BE DETERMINED BY
   45  MULTIPLYING  THE ORIGINAL CREDIT BY THE RATIO WHICH THE MONTHS OF QUALI-
   46  FIED USE BEAR TO THIRTY-SIX.
   47    (3) EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH SUBPARAGRAPH FOUR OF
   48  THIS  PARAGRAPH  APPLIES,  WITH  RESPECT  TO  PROPERTY  SUBJECT  TO  THE
   49  PROVISIONS  OF  SECTION  ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL REVENUE
   50  CODE, OTHER THAN THREE-YEAR PROPERTY AS DEFINED  IN  SUBSECTION  (E)  OF
   51  SUCH  SECTION  ONE HUNDRED SIXTY-EIGHT WHICH IS DISPOSED OF OR CEASES TO
   52  BE IN QUALIFIED USE PRIOR TO THE END OF THE TAXABLE YEAR  IN  WHICH  THE
   53  CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF
   54  THE  CREDIT  PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS THE RATIO
   55  WHICH THE MONTHS OF QUALIFIED USE BEAR TO SIXTY. IF  PROPERTY  ON  WHICH
   56  CREDIT  HAS  BEEN  TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE
       S. 6359--D                         77                         A. 8559--D

    1  PRIOR TO THE END OF SIXTY MONTHS,  THE  DIFFERENCE  BETWEEN  THE  CREDIT
    2  TAKEN  AND  THE  CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE
    3  YEAR OF DISPOSITION. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL  USE  SHALL
    4  BE  DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO WHICH THE
    5  MONTHS OF QUALIFIED USE BEAR TO SIXTY.
    6    (4) WITH  RESPECT  TO  ANY  PROPERTY  TO  WHICH  SECTION  ONE  HUNDRED
    7  SIXTY-EIGHT OF THE INTERNAL REVENUE CODE APPLIES, WHICH IS A BUILDING OR
    8  A  STRUCTURAL COMPONENT OF A BUILDING AND WHICH IS DISPOSED OF OR CEASES
    9  TO BE IN QUALIFIED USE PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE
   10  CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF
   11  THE CREDIT PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS  THE  RATIO
   12  WHICH  THE  MONTHS  OF  QUALIFIED USE BEAR TO THE TOTAL NUMBER OF MONTHS
   13  OVER WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE  INTER-
   14  NAL REVENUE CODE. IF PROPERTY ON WHICH CREDIT HAS BEEN TAKEN IS DISPOSED
   15  OF  OR CEASES TO BE IN QUALIFIED USE PRIOR TO THE END OF THE PERIOD OVER
   16  WHICH THE TAXPAYER CHOOSES TO DEDUCT THE  PROPERTY  UNDER  THE  INTERNAL
   17  REVENUE  CODE,  THE  DIFFERENCE  BETWEEN THE CREDIT TAKEN AND THE CREDIT
   18  ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE  YEAR  OF  DISPOSITION.
   19  PROVIDED,  HOWEVER,  IF  SUCH PROPERTY IS DISPOSED OF OR CEASES TO BE IN
   20  QUALIFIED USE AFTER IT HAS BEEN IN QUALIFIED USE FOR  MORE  THAN  TWELVE
   21  CONSECUTIVE  YEARS,  IT SHALL NOT BE NECESSARY TO ADD BACK THE CREDIT AS
   22  PROVIDED IN THIS SUBPARAGRAPH. THE AMOUNT OF CREDIT ALLOWED  FOR  ACTUAL
   23  USE  SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO
   24  WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE  TOTAL  NUMBER  OF  MONTHS
   25  OVER  WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE INTER-
   26  NAL REVENUE CODE.
   27    (5) FOR PURPOSES OF THIS PARAGRAPH, PROPERTY (I) WHICH IS DESCRIBED IN
   28  SUBPARAGRAPH TWO, THREE OR FOUR OF THIS PARAGRAPH,  AND  (II)  WHICH  IS
   29  SUBJECT  TO SUBPARAGRAPH ELEVEN OF PARAGRAPH (A) OF SUBDIVISION NINE AND
   30  SUBPARAGRAPH TEN OF PARAGRAPH (B) OF SUBDIVISION  NINE  OF  SECTION  TWO
   31  HUNDRED  EIGHT  OF  THIS  CHAPTER, SHALL BE TREATED AS PROPERTY WHICH IS
   32  DEPRECIABLE PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE  INTERNAL
   33  REVENUE  CODE  BUT  IS NOT SUBJECT TO SECTION ONE HUNDRED SIXTY-EIGHT OF
   34  SUCH CODE.
   35    (6) FOR PURPOSES OF THIS PARAGRAPH, WHERE A  CREDIT  IS  ALLOWED  WITH
   36  RESPECT  TO  AN AIR POLLUTION CONTROL FACILITY ON THE BASIS OF A CERTIF-
   37  ICATE OF COMPLIANCE ISSUED PURSUANT TO  THE  ENVIRONMENTAL  CONSERVATION
   38  LAW  AND  THE  CERTIFICATE  IS  REVOKED PURSUANT TO SUBDIVISION THREE OF
   39  SECTION 19-0309 OF THE ENVIRONMENTAL CONSERVATION LAW,  SUCH  REVOCATION
   40  SHALL  CONSTITUTE  A DISPOSAL OR CESSATION OF QUALIFIED USE, UNLESS SUCH
   41  FACILITY IS DESCRIBED IN CLAUSE (A) OR (C) OF SUBPARAGRAPH (II) OF PARA-
   42  GRAPH (B) OF THIS SUBDIVISION. ALSO FOR PURPOSES OF  THIS  SUBPARAGRAPH,
   43  THE  USE  OF  AN  AIR  POLLUTION CONTROL FACILITY OR AN INDUSTRIAL WASTE
   44  TREATMENT FACILITY FOR THE PRIMARY PURPOSE OF SALVAGING MATERIALS  WHICH
   45  ARE  USABLE IN THE MANUFACTURING PROCESS OR ARE MARKETABLE SHALL CONSTI-
   46  TUTE A CESSATION OF QUALIFIED USE, UNLESS SUCH FACILITY IS DESCRIBED  IN
   47  CLAUSE (A) OR (C) OF SUBPARAGRAPH (II) OF PARAGRAPH (B) OF THIS SUBDIVI-
   48  SION.
   49    (7)  FOR  TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, NINETEEN
   50  HUNDRED EIGHTY-SEVEN, THE AMOUNT REQUIRED TO BE ADDED BACK  PURSUANT  TO
   51  THIS  PARAGRAPH  SHALL BE AUGMENTED BY AN AMOUNT EQUAL TO THE PRODUCT OF
   52  SUCH AMOUNT AND THE UNDERPAYMENT RATE OF  INTEREST  (WITHOUT  REGARD  TO
   53  COMPOUNDING),  SET  BY THE COMMISSIONER OF TAXATION AND FINANCE PURSUANT
   54  TO SUBSECTION (E) OF SECTION ONE THOUSAND NINETY-SIX, IN EFFECT  ON  THE
   55  LAST DAY OF THE TAXABLE YEAR.
       S. 6359--D                         78                         A. 8559--D

    1    (8)  IF,  AS OF THE CLOSE OF THE TAXABLE YEAR, THERE IS A NET INCREASE
    2  WITH RESPECT TO THE TAXPAYER IN THE AMOUNT OF  NONQUALIFIED  NONRECOURSE
    3  FINANCING  (WITHIN  THE  MEANING  OF  SECTION  46(C) (8) OF THE INTERNAL
    4  REVENUE CODE) WITH RESPECT TO ANY PROPERTY WITH  RESPECT  TO  WHICH  THE
    5  CREDIT UNDER THIS SUBDIVISION WAS LIMITED BASED ON ATTRIBUTABLE NONQUAL-
    6  IFIED  NONRECOURSE  FINANCING,  THEN  AN AMOUNT EQUAL TO THE DECREASE IN
    7  SUCH CREDIT WHICH WOULD HAVE RESULTED FROM REDUCING, BY  THE  AMOUNT  OF
    8  SUCH  NET  INCREASE,  THE  COST  OR  OTHER BASIS TAKEN INTO ACCOUNT WITH
    9  RESPECT TO SUCH PROPERTY MUST BE ADDED BACK IN SUCH  TAXABLE  YEAR.  THE
   10  AMOUNT  OF  NONQUALIFIED  NONRECOURSE  FINANCING SHALL NOT BE TREATED AS
   11  INCREASED BY REASON OF A TRANSFER OF  (OR  AGREEMENT  TO  TRANSFER)  ANY
   12  EVIDENCE  OF  AN INDEBTEDNESS IF SUCH TRANSFER OCCURS (OR SUCH AGREEMENT
   13  IS ENTERED INTO) MORE THAN ONE YEAR AFTER THE DATE SUCH INDEBTEDNESS WAS
   14  INCURRED.
   15    (9) (A) WHERE PROPERTY WITH RESPECT TO WHICH CREDIT HAS  BEEN  ALLOWED
   16  UNDER  THIS  SUBDIVISION IS DISPOSED OF BY TRANSFER TO THE TAXPAYER IN A
   17  QUALIFIED TRANSACTION, AND SUCH DISPOSITION REQUIRES, PURSUANT  TO  THIS
   18  PARAGRAPH  (WITHOUT  REGARD  TO  THIS  SUBPARAGRAPH) THAT SUCH CREDIT BE
   19  DECREASED (WHERE THE DISPOSITION OCCURS IN THE TAXABLE YEAR IN WHICH THE
   20  PROPERTY IS PLACED IN SERVICE BY THE TRANSFEROR) OR THAT  A  PORTION  OF
   21  SUCH  CREDIT  BE ADDED BACK BY THE TRANSFEROR, THEN CLAUSE (B) OR CLAUSE
   22  (C) OF THIS SUBPARAGRAPH SHALL APPLY.
   23    (B) IF THE TAXPAYER AND THE TRANSFEROR JOINTLY ELECT, AT SUCH TIME AND
   24  IN SUCH MANNER AS THE COMMISSIONER MAY PRESCRIBE,  THE  FOLLOWING  SHALL
   25  APPLY:
   26    (I)  SUCH  PORTION  SHALL  NOT  BE  REQUIRED  TO  BE ADDED BACK BY THE
   27  TRANSFEROR,
   28    (II) THE AMOUNT OF UNUSED CREDIT SHALL NOT BE DEDUCTED FROM TAX OTHER-
   29  WISE DUE BY THE TRANSFEROR ON ANY RETURN (INCLUDING AN AMENDED  RETURN),
   30  AND  SHALL  NOT  BE  SO  DEDUCTED AS PART OF ANY AUDIT ADJUSTMENT OR ANY
   31  OTHER DETERMINATION, AND
   32    (III) THE AMOUNT OF UNUSED CREDIT SHALL BE TREATED  AS  AN  AMOUNT  OF
   33  CREDIT  OF  THE  TAXPAYER  UNDER THIS SUBDIVISION CARRIED FORWARD BY THE
   34  TAXPAYER TO ITS TAXABLE YEAR IN WHICH SUCH TRANSFER OCCURRED, AS IF  THE
   35  CREDIT  ALLOWED  TO  THE  TRANSFEROR  WITH  RESPECT TO SUCH PROPERTY HAD
   36  ORIGINALLY BEEN ALLOWED TO THE TAXPAYER BOTH AS TO AMOUNT AND FIRST DATE
   37  OF QUALIFIED USE, AND AS IF THE PERIOD OF QUALIFIED USE BY THE  TRANSFE-
   38  ROR PRIOR TO THE TRANSFER HAD BEEN A PERIOD OF SUCH USE BY THE TAXPAYER.
   39  ANY  AMOUNT  OF  CREDIT  TREATED  AS CARRIED FORWARD TO THE TAXABLE YEAR
   40  PURSUANT TO THIS SUBPARAGRAPH SHALL BE APPLIED AS PROVIDED IN CLAUSE (H)
   41  OF THIS SUBPARAGRAPH.
   42    (C) IF THE TAXPAYER AND  THE  TRANSFEROR  DO  NOT  MAKE  THE  ELECTION
   43  DESCRIBED  IN CLAUSE (B) OF THIS SUBPARAGRAPH, THEN THE AMOUNT OF CREDIT
   44  REQUIRED PURSUANT TO THIS PARAGRAPH TO BE ADDED BACK BY  THE  TRANSFEROR
   45  SHALL  BE  TREATED  AS  AN  AMOUNT  OF CREDIT OF THE TAXPAYER UNDER THIS
   46  SUBDIVISION TO BE CARRIED FORWARD BY THE TAXPAYER TO ITS TAXABLE YEAR IN
   47  WHICH SUCH TRANSFER OCCURRED, AS IF THE CREDIT ALLOWED TO THE TRANSFEROR
   48  WITH RESPECT TO SUCH PROPERTY HAD ORIGINALLY BEEN ALLOWED TO THE TAXPAY-
   49  ER BOTH AS TO AMOUNT AND FIRST DATE OF QUALIFIED  USE,  AND  AS  IF  THE
   50  PERIOD OF QUALIFIED USE BY THE TRANSFEROR PRIOR TO THE TRANSFER HAD BEEN
   51  A  PERIOD  OF  SUCH USE BY THE TAXPAYER. ANY AMOUNT OF CREDIT TREATED AS
   52  CARRIED FORWARD TO THE TAXABLE YEAR PURSUANT TO THIS SUBPARAGRAPH  SHALL
   53  BE APPLIED AS PROVIDED IN CLAUSE (H) OF THIS SUBPARAGRAPH.
   54    (D) THE TERM "QUALIFIED TRANSACTION" SHALL MEAN A TRANSACTION WHICH IS
   55  A  REORGANIZATION  DESCRIBED  IN  SECTION  368(A)(1)(D)  OF THE INTERNAL
   56  REVENUE CODE, WHEREIN  (I)  SUBSTANTIALLY  ALL  OF  THE  ASSETS  OF  THE
       S. 6359--D                         79                         A. 8559--D

    1  TRANSFEROR  NECESSARY  TO  CONTINUE THE OPERATION OF A DIVISION OR DIVI-
    2  SIONS OF THE TRANSFEROR ARE TRANSFERRED TO THE TAXPAYER IN A TRANSACTION
    3  TO WHICH SECTION 351 OF SUCH CODE APPLIES, AND (II) STOCK OR  SECURITIES
    4  OF  THE  TAXPAYER  HELD  BY  THE  TRANSFEROR ARE DISTRIBUTED PURSUANT TO
    5  SECTION 355 OF SUCH CODE.
    6    (E) THE TERM "UNUSED CREDIT" SHALL MEAN THE AMOUNT OF CREDIT SHOWN  AS
    7  CARRIED  FORWARD  TO THE TRANSACTION YEAR ON THE TRANSFEROR'S TAX RETURN
    8  FOR ITS TAXABLE YEAR IMMEDIATELY PRECEDING  THE  TRANSACTION  YEAR  WITH
    9  RESPECT TO THE PROPERTY DESCRIBED IN CLAUSE (A) OF THIS SUBPARAGRAPH.
   10    (F)  THE  TERM  "TRANSACTION YEAR" MEANS THE TAXABLE YEAR IN WHICH THE
   11  QUALIFIED TRANSACTION OCCURS.
   12    (G) NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY, IN THE
   13  CASE OF ALLOWANCE OF CREDIT PURSUANT TO THIS SUBPARAGRAPH TO A  TAXPAYER
   14  THE  COMMISSIONER SHALL HAVE THE AUTHORITY TO REVEAL TO THE TAXPAYER ANY
   15  INFORMATION, WITH RESPECT TO THE CREDIT OF THE TRANSFEROR, WHICH IS  THE
   16  BASIS  FOR  THE DENIAL IN WHOLE OR IN PART OF THE CREDIT CLAIMED BY SUCH
   17  TAXPAYER.
   18    (H) WHERE A CREDIT IS ALLOWED TO A TAXPAYER PURSUANT TO THIS  SUBPARA-
   19  GRAPH,  THE  TAXPAYER MAY TREAT THE AMOUNT OF SUCH CREDIT AS AN OVERPAY-
   20  MENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS
   21  OF SECTION TEN HUNDRED EIGHTY-SIX OF THIS  CHAPTER,  PROVIDED,  HOWEVER,
   22  THE  PROVISIONS OF SUBSECTION (C) OF SECTION TEN HUNDRED EIGHTY-EIGHT OF
   23  THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE  PAID  THEREON.  SUCH
   24  CREDIT  SHALL  BE  ALLOWED  AGAINST THE TAX IMPOSED BY THIS ARTICLE WITH
   25  RESPECT TO THE SECOND SUCCEEDING TAXABLE YEAR NEXT FOLLOWING THE  TRANS-
   26  ACTION  YEAR,  PROVIDED  THAT  NOT MORE THAN ONE-FOURTH OF THE AMOUNT OF
   27  SUCH CREDIT MAY BE APPLIED BY THE TAXPAYER, WHETHER TO REDUCE TAX OTHER-
   28  WISE DUE OR TO BE TREATED AS AN OVERPAYMENT TO BE CREDITED OR  REFUNDED,
   29  WITH RESPECT TO SUCH SECOND SUCCEEDING TAXABLE YEAR AND EACH OF THE NEXT
   30  THREE TAXABLE YEARS FOLLOWING SUCH SECOND SUCCEEDING TAXABLE YEAR.
   31    (F)  FOR PURPOSES OF PARAGRAPH (D) OF THIS SUBDIVISION, A NEW BUSINESS
   32  SHALL INCLUDE ANY CORPORATION, EXCEPT A CORPORATION WHICH:
   33    (1) OVER FIFTY PERCENT OF THE NUMBER OF SHARES OF STOCK ENTITLING  THE
   34  HOLDERS  THEREOF  TO  VOTE  FOR THE ELECTION OF DIRECTORS OR TRUSTEES IS
   35  OWNED OR CONTROLLED,  EITHER  DIRECTLY  OR  INDIRECTLY,  BY  A  TAXPAYER
   36  SUBJECT TO TAX UNDER THIS ARTICLE; SECTION ONE HUNDRED EIGHTY-THREE, ONE
   37  HUNDRED EIGHTY-FOUR OR ONE HUNDRED EIGHTY-FIVE OF ARTICLE NINE; OR ARTI-
   38  CLE THIRTY-THREE OF THIS CHAPTER; OR
   39    (2)  IS SUBSTANTIALLY SIMILAR IN OPERATION AND IN OWNERSHIP TO A BUSI-
   40  NESS ENTITY (OR ENTITIES) TAXABLE, OR  PREVIOUSLY  TAXABLE,  UNDER  THIS
   41  ARTICLE;  SECTION  ONE  HUNDRED  EIGHTY-THREE,  ONE HUNDRED EIGHTY-FOUR,
   42  FORMER SECTION ONE HUNDRED EIGHTY-FIVE OR  FORMER  SECTION  ONE  HUNDRED
   43  EIGHTY-SIX  OF  ARTICLE NINE; ARTICLE THIRTY-TWO OF THIS CHAPTER AS SUCH
   44  ARTICLE WAS IN EFFECT ON DECEMBER THIRTY-FIRST, TWO  THOUSAND  FOURTEEN;
   45  ARTICLE THIRTY-THREE OF THIS CHAPTER; ARTICLE TWENTY-THREE OF THIS CHAP-
   46  TER  OR  WHICH  WOULD  HAVE  BEEN  SUBJECT  TO  TAX  UNDER  SUCH ARTICLE
   47  TWENTY-THREE (AS SUCH ARTICLE WAS IN EFFECT ON JANUARY  FIRST,  NINETEEN
   48  HUNDRED  EIGHTY) OR THE INCOME (OR LOSSES) OF WHICH IS (OR WAS) INCLUDA-
   49  BLE UNDER ARTICLE TWENTY-TWO OF THIS  CHAPTER  WHEREBY  THE  INTENT  AND
   50  PURPOSE  OF  THIS  PARAGRAPH  AND PARAGRAPH (D) OF THIS SUBDIVISION WITH
   51  RESPECT TO REFUNDING OF CREDIT TO NEW BUSINESS WOULD BE EVADED; OR
   52    (3) HAS BEEN SUBJECT TO TAX UNDER THIS ARTICLE OR FORMER ARTICLE THIR-
   53  TY-TWO OF THIS CHAPTER FOR MORE THAN FIVE TAXABLE YEARS (EXCLUDING SHORT
   54  TAXABLE YEARS).
   55    2. EMPLOYMENT INCENTIVE CREDIT (EIC). (A)(I)  APPLICATION  OF  CREDIT.
   56  WHERE  A  TAXPAYER  IS  ALLOWED  A  CREDIT UNDER SUBDIVISION ONE OF THIS
       S. 6359--D                         80                         A. 8559--D

    1  SECTION, OTHER THAN AT THE OPTIONAL  RATE  APPLICABLE  TO  RESEARCH  AND
    2  DEVELOPMENT PROPERTY, THE TAXPAYER SHALL BE ALLOWED A CREDIT FOR EACH OF
    3  THE  TWO  YEARS  NEXT  SUCCEEDING  THE TAXABLE YEAR FOR WHICH THE CREDIT
    4  UNDER  SUCH  SUBDIVISION  ONE  IS ALLOWED WITH RESPECT TO SUCH PROPERTY,
    5  WHETHER OR NOT DEDUCTIBLE IN SUCH TAXABLE YEAR OR IN SUBSEQUENT  TAXABLE
    6  YEARS  PURSUANT  TO  PARAGRAPH  (D)  OF  SUCH SUBDIVISION ONE. PROVIDED,
    7  HOWEVER, THAT THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY  TAXA-
    8  BLE YEAR SHALL BE ALLOWED ONLY IF THE AVERAGE NUMBER OF EMPLOYEES DURING
    9  SUCH  TAXABLE  YEAR  IS  AT LEAST ONE HUNDRED ONE PERCENT OF THE AVERAGE
   10  NUMBER OF EMPLOYEES DURING THE EMPLOYMENT BASE YEAR. THE EMPLOYMENT BASE
   11  YEAR SHALL BE THE TAXABLE YEAR IMMEDIATELY PRECEDING  THE  TAXABLE  YEAR
   12  FOR  WHICH  THE CREDIT UNDER SUCH SUBDIVISION ONE IS ALLOWED EXCEPT THAT
   13  IF THE TAXPAYER WAS NOT SUBJECT TO TAX AND DID NOT HAVE A  TAXABLE  YEAR
   14  IMMEDIATELY  PRECEDING  THE TAXABLE YEAR FOR WHICH THE CREDIT UNDER SUCH
   15  SUBDIVISION ONE OF THIS SECTION IS ALLOWED,  THE  EMPLOYMENT  BASE  YEAR
   16  SHALL BE THE TAXABLE YEAR IN WHICH THE CREDIT UNDER SUCH SUBDIVISION ONE
   17  IS ALLOWED.
   18    (II)  AMOUNT  OF  CREDIT.  THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS
   19  SUBDIVISION SHALL BE AS SET FORTH IN THE FOLLOWING TABLE:
   20  AVERAGE NUMBER OF EMPLOYEES DURING THE      CREDIT ALLOWED UNDER THIS
   21  TAXABLE YEAR EXPRESSED AS A PERCENTAGE      SUBDIVISION EXPRESSED AS A
   22  OF AVERAGE EMPLOYEES IN EMPLOYMENT          PERCENTAGE OF THE APPLICABLE
   23  BASE YEARS                                  INVESTMENT CREDIT BASIS
   24  LESS THAN 102%                              1.5%
   25  AT LEAST 102% AND LESS THAN 103%            2%
   26  AT LEAST 103%                               2.5%
   27    (B) AVERAGE NUMBER OF EMPLOYEES. THE AVERAGE NUMBER OF EMPLOYEES IN  A
   28  TAXABLE  YEAR  SHALL BE COMPUTED BY ASCERTAINING THE NUMBER OF EMPLOYEES
   29  WITHIN THE STATE, EXCEPT GENERAL EXECUTIVE  OFFICERS,  EMPLOYED  BY  THE
   30  TAXPAYER  ON  THE  THIRTY-FIRST DAY OF MARCH, THE THIRTIETH DAY OF JUNE,
   31  THE THIRTIETH DAY OF SEPTEMBER AND THE THIRTY-FIRST DAY OF  DECEMBER  IN
   32  THE TAXABLE YEAR, BY ADDING TOGETHER THE NUMBER OF EMPLOYEES ASCERTAINED
   33  ON  EACH OF SUCH DATES AND DIVIDING THE SUM SO OBTAINED BY THE NUMBER OF
   34  SUCH ABOVE MENTIONED DATES OCCURRING WITHIN THE TAXABLE  YEAR.  HOWEVER,
   35  WITH RESPECT TO THE EMPLOYMENT BASE YEAR, THERE SHALL BE EXCLUDED THERE-
   36  FROM  ANY  EMPLOYEE  WITH  RESPECT  TO  WHOM A CREDIT PROVIDED FOR UNDER
   37  SUBDIVISION SIX OF THIS SECTION IS CLAIMED, FOR THE TAXABLE YEAR,  BASED
   38  ON  EMPLOYMENT WITHIN A ZONE EQUIVALENT AREA DESIGNATED AS SUCH PURSUANT
   39  TO ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW.
   40    (C) CARRYOVER. IN NO EVENT SHALL THE CREDIT  HEREIN  PROVIDED  FOR  BE
   41  ALLOWED  IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN THE
   42  FIXED DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D)  OF  SUBDIVISION
   43  ONE  OF  SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT
   44  OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR  REDUCES
   45  THE  TAX  TO  SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON
   46  THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE  IN
   47  SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FIFTEEN TAXABLE YEARS IMME-
   48  DIATELY FOLLOWING SUCH TAXABLE YEAR AND MAY BE DEDUCTED FROM THE TAXPAY-
   49  ER'S TAX FOR SUCH YEAR OR YEARS.
   50    3. EMPIRE ZONE INVESTMENT TAX CREDIT (EZ-ITC). (A) A TAXPAYER SHALL BE
   51  ALLOWED  A  CREDIT,  TO  BE COMPUTED AS HEREIN PROVIDED, AGAINST THE TAX
   52  IMPOSED BY THIS ARTICLE IF THE TAXPAYER HAS BEEN CERTIFIED  PURSUANT  TO
   53  ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW. THE AMOUNT OF THE CRED-
   54  IT  SHALL  BE  TEN PERCENT OF THE COST OR OTHER BASIS FOR FEDERAL INCOME
   55  TAX PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE  PROPERTY,
   56  INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, DESCRIBED IN
       S. 6359--D                         81                         A. 8559--D

    1  PARAGRAPH  (B)  OF  THIS  SUBDIVISION, WHICH IS LOCATED WITHIN AN EMPIRE
    2  ZONE DESIGNATED AS SUCH PURSUANT TO ARTICLE EIGHTEEN-B OF SUCH LAW,  BUT
    3  ONLY  IF  THE  ACQUISITION,  CONSTRUCTION, RECONSTRUCTION OR ERECTION OF
    4  SUCH  PROPERTY  OCCURRED  OR  WAS COMMENCED ON OR AFTER THE DATE OF SUCH
    5  DESIGNATION AND PRIOR TO THE EXPIRATION THEREOF. PROVIDED, HOWEVER, THAT
    6  IN THE CASE OF AN ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR  ERECTION
    7  WHICH WAS COMMENCED DURING SUCH PERIOD AND CONTINUED OR COMPLETED SUBSE-
    8  QUENTLY,  SUCH CREDIT SHALL BE TEN PERCENT OF THE PORTION OF THE COST OR
    9  OTHER BASIS FOR FEDERAL INCOME TAX PURPOSES ATTRIBUTABLE TO SUCH PERIOD,
   10  WHICH PORTION SHALL BE ASCERTAINED BY MULTIPLYING SUCH COST OR BASIS  BY
   11  A  FRACTION  THE  NUMERATOR  OF  WHICH SHALL BE THE EXPENDITURES PAID OR
   12  INCURRED DURING SUCH PERIOD FOR SUCH PURPOSES  AND  THE  DENOMINATOR  OF
   13  WHICH  SHALL  BE THE TOTAL OF ALL EXPENDITURES PAID OR INCURRED FOR SUCH
   14  ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION.
   15    (B) QUALIFIED PROPERTY. A CREDIT SHALL BE ALLOWED UNDER THIS  SUBDIVI-
   16  SION WITH RESPECT TO TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROP-
   17  ERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH
   18    (I) ARE DEPRECIABLE PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE
   19  INTERNAL REVENUE CODE,
   20    (II) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE,
   21    (III)  ARE  ACQUIRED  BY  PURCHASE  AS  DEFINED IN SECTION ONE HUNDRED
   22  SEVENTY-NINE (D) OF THE INTERNAL REVENUE CODE,
   23    (IV) HAVE A SITUS IN AN EMPIRE ZONE DESIGNATED  AS  SUCH  PURSUANT  TO
   24  ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW, AND
   25    (V)  ARE  (A)  PRINCIPALLY  USED  BY THE TAXPAYER IN THE PRODUCTION OF
   26  GOODS  BY  MANUFACTURING,  PROCESSING,  ASSEMBLING,  REFINING,   MINING,
   27  EXTRACTING,  FARMING,  AGRICULTURE, HORTICULTURE, FLORICULTURE, VITICUL-
   28  TURE OR COMMERCIAL FISHING,
   29    (B) INDUSTRIAL WASTE TREATMENT FACILITIES  OR  AIR  POLLUTION  CONTROL
   30  FACILITIES USED IN THE TAXPAYER'S TRADE OR BUSINESS,
   31    (C) RESEARCH AND DEVELOPMENT PROPERTY,
   32    (D) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR
   33  BUSINESS  AS  A BROKER OR DEALER IN CONNECTION WITH THE PURCHASE OR SALE
   34  (WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING  INTO,
   35  ASSUMPTION,  OFFSET,  ASSIGNMENT,  TERMINATION,  OR TRANSFER) OF STOCKS,
   36  BONDS  OR  OTHER  SECURITIES  AS  DEFINED  IN   SECTION   FOUR   HUNDRED
   37  SEVENTY-FIVE  (C)(2)  OF THE INTERNAL REVENUE CODE, OR OF COMMODITIES AS
   38  DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (E) OF THE INTERNAL REVENUE
   39  CODE,
   40    (E) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR
   41  BUSINESS OF PROVIDING  INVESTMENT  ADVISORY  SERVICES  FOR  A  REGULATED
   42  INVESTMENT  COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE OF THE
   43  INTERNAL REVENUE CODE, OR LENDING, LOAN ARRANGEMENT, OR LOAN ORIGINATION
   44  SERVICES TO CUSTOMERS IN CONNECTION WITH THE  PURCHASE  OR  SALE  (WHICH
   45  SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO, ASSUMP-
   46  TION,  OFFSET,  ASSIGNMENT,  TERMINATION  OR  TRANSFER) OF SECURITIES AS
   47  DEFINED IN SECTION FOUR HUNDRED  SEVENTY-FIVE  (C)(2)  OF  THE  INTERNAL
   48  REVENUE CODE,
   49    (E-1)  PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE
   50  OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES OR THE SERVICE  OF
   51  MANAGING INVESTMENT PORTFOLIOS TO ACHIEVE SPECIFIC INVESTMENT OBJECTIVES
   52  FOR  ACCOUNTS  OVER ONE MILLION DOLLARS OF ACCREDITED INVESTORS (AS THAT
   53  TERM IS DEFINED IN RULE 501 OF REGULATION D OF  THE  SECURITIES  ACT  OF
   54  1933), IF THE TAXPAYER SATISFIES THE FOLLOWING CRITERIA:
   55    (I)  THE TAXPAYER IS A REGULATED BROKER OR DEALER OR AN AFFILIATE OF A
   56  REGULATED BROKER OR DEALER,
       S. 6359--D                         82                         A. 8559--D

    1    (II) THE TAXPAYER IS REGISTERED AS AN INVESTMENT ADVISER UNDER SECTION
    2  TWO HUNDRED THREE OF THE INVESTMENT ADVISERS ACT OF  1940,  AS  AMENDED,
    3  AND
    4    (III)  AT  LEAST  ONE CLIENT OF THE TAXPAYER IS A REGULATED INVESTMENT
    5  COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE  OF  THE  INTERNAL
    6  REVENUE CODE THAT HAS ASSETS OF ONE HUNDRED MILLION DOLLARS, OR
    7    (F) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S BUSINESS
    8  AS  AN  EXCHANGE REGISTERED AS A NATIONAL SECURITIES EXCHANGE WITHIN THE
    9  MEANING OF SECTIONS 3(A)(1) AND 6(A) OF THE SECURITIES EXCHANGE  ACT  OF
   10  1934  OR A BOARD OF TRADE AS DEFINED IN SUBDIVISION ONE OF PARAGRAPH (A)
   11  OF SECTION FOURTEEN HUNDRED TEN OF THE NOT-FOR-PROFIT CORPORATION LAW OR
   12  AS AN ENTITY THAT IS WHOLLY OWNED BY ONE OR MORE SUCH  NATIONAL  SECURI-
   13  TIES  EXCHANGES OR BOARDS OR TRADE AND THAT PROVIDES AUTOMATION OR TECH-
   14  NICAL SERVICES THERETO.
   15    (VI) FOR PURPOSES OF CLAUSES (D), (E), (E-1) AND (F)  OF  SUBPARAGRAPH
   16  (V)  OF THIS PARAGRAPH, PROPERTY PURCHASED BY A TAXPAYER AFFILIATED WITH
   17  A REGULATED BROKER,  DEALER,  REGISTERED  INVESTMENT  ADVISER,  NATIONAL
   18  SECURITIES  EXCHANGE  OR  BOARD  OF TRADE IS ALLOWED A CREDIT UNDER THIS
   19  SUBDIVISION IF THE PROPERTY IS USED BY ITS AFFILIATED REGULATED  BROKER,
   20  DEALER, REGISTERED INVESTMENT ADVISER OR NATIONAL SECURITIES EXCHANGE OR
   21  BOARD  OF  TRADE  IN  ACCORDANCE  WITH THIS SUBDIVISION. FOR PURPOSES OF
   22  DETERMINING IF THE PROPERTY IS PRINCIPALLY USED IN QUALIFYING USES,  THE
   23  USES BY THE TAXPAYER DESCRIBED IN CLAUSES (D), (E) AND (E-1) OF SUBPARA-
   24  GRAPH  (V) OF THIS PARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE USES BY
   25  THE TAXPAYER, ITS AFFILIATED REGULATED  BROKER,  DEALER  AND  REGISTERED
   26  INVESTMENT  ADVISER  UNDER  ANY  OF  THOSE  CLAUSES  MAY  BE AGGREGATED.
   27  PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED THE  CREDIT  PROVIDED
   28  BY CLAUSES (D), (E), (E-1) AND (F) OF SUBPARAGRAPH (V) OF THIS PARAGRAPH
   29  UNLESS
   30    (I) EIGHTY PERCENT OR MORE OF THE EMPLOYEES PERFORMING THE ADMINISTRA-
   31  TIVE  AND  SUPPORT FUNCTIONS RESULTING FROM OR RELATED TO THE QUALIFYING
   32  USES OF SUCH EQUIPMENT ARE LOCATED IN THIS STATE, OR
   33    (II) THE AVERAGE NUMBER OF EMPLOYEES THAT PERFORM  THE  ADMINISTRATIVE
   34  AND  SUPPORT  FUNCTIONS RESULTING FROM OR RELATED TO THE QUALIFYING USES
   35  OF SUCH EQUIPMENT AND ARE LOCATED IN THIS STATE DURING THE TAXABLE  YEAR
   36  FOR  WHICH THE CREDIT IS CLAIMED IS EQUAL TO OR GREATER THAN NINETY-FIVE
   37  PERCENT OF THE AVERAGE NUMBER OF EMPLOYEES THAT PERFORM THESE  FUNCTIONS
   38  AND  ARE  LOCATED IN THIS STATE DURING THE THIRTY-SIX MONTHS IMMEDIATELY
   39  PRECEDING THE YEAR FOR WHICH THE CREDIT IS CLAIMED, OR
   40    (III) THE NUMBER OF EMPLOYEES LOCATED IN THIS STATE DURING THE TAXABLE
   41  YEAR FOR WHICH THE CREDIT IS CLAIMED IS EQUAL TO OR GREATER THAN  NINETY
   42  PERCENT  OF  THE  NUMBER  OF EMPLOYEES LOCATED IN THIS STATE ON DECEMBER
   43  THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT OR, IF THE TAXPAYER WAS  NOT
   44  A  CALENDAR YEAR TAXPAYER IN NINETEEN HUNDRED NINETY-EIGHT, THE LAST DAY
   45  OF ITS FIRST TAXABLE YEAR ENDING AFTER DECEMBER  THIRTY-FIRST,  NINETEEN
   46  HUNDRED  NINETY-EIGHT.  IF  THE  TAXPAYER BECOMES SUBJECT TO TAX IN THIS
   47  STATE AFTER THE TAXABLE YEAR BEGINNING IN NINETEEN HUNDRED NINETY-EIGHT,
   48  THEN THE TAXPAYER  IS  NOT  REQUIRED  TO  SATISFY  THE  EMPLOYMENT  TEST
   49  PROVIDED  IN  THE  PRECEDING SENTENCE OF THIS SUBPARAGRAPH FOR ITS FIRST
   50  TAXABLE YEAR.
   51    (VII) FOR THE PURPOSES OF CLAUSE (III) OF SUBPARAGRAPH  (VI)  OF  THIS
   52  PARAGRAPH  THE  EMPLOYMENT TEST WILL BE BASED ON THE NUMBER OF EMPLOYEES
   53  LOCATED IN THIS STATE ON THE LAST DAY OF  THE  FIRST  TAXABLE  YEAR  THE
   54  TAXPAYER  IS  SUBJECT  TO TAX IN THIS STATE. IF THE USES OF THE PROPERTY
   55  MUST BE AGGREGATED TO DETERMINE WHETHER THE PROPERTY IS PRINCIPALLY USED
   56  IN QUALIFYING USES, THEN EITHER EACH AFFILIATE USING THE  PROPERTY  MUST
       S. 6359--D                         83                         A. 8559--D

    1  SATISFY  THIS  EMPLOYMENT TEST OR THIS EMPLOYMENT TEST MUST BE SATISFIED
    2  THROUGH THE AGGREGATION OF THE EMPLOYEES OF THE TAXPAYER, ITS AFFILIATED
    3  REGULATED BROKER, DEALER, AND REGISTERED INVESTMENT  ADVISER  USING  THE
    4  PROPERTY.
    5    (VIII) FOR THE PURPOSE OF THIS SUBDIVISION, THE TERM "GOODS" SHALL NOT
    6  INCLUDE ELECTRICITY.
    7    (IX)  FOR PURPOSES OF THIS SUBDIVISION, "MANUFACTURING" SHALL MEAN THE
    8  PROCESS OF WORKING RAW MATERIALS INTO WARES SUITABLE FOR  USE  OR  WHICH
    9  GIVES  NEW  SHAPES,  NEW  QUALITY  OR  NEW  COMBINATIONS TO MATTER WHICH
   10  ALREADY HAS GONE THROUGH SOME ARTIFICIAL PROCESS BY THE USE  OF  MACHIN-
   11  ERY, TOOLS, APPLIANCES AND OTHER SIMILAR EQUIPMENT. PROPERTY USED IN THE
   12  PRODUCTION OF GOODS SHALL INCLUDE MACHINERY, EQUIPMENT OR OTHER TANGIBLE
   13  PROPERTY  WHICH  IS  PRINCIPALLY USED IN THE REPAIR AND SERVICE OF OTHER
   14  MACHINERY, EQUIPMENT OR OTHER TANGIBLE PROPERTY USED PRINCIPALLY IN  THE
   15  PRODUCTION  OF  GOODS  AND  SHALL  INCLUDE  ALL  FACILITIES  USED IN THE
   16  PRODUCTION OPERATION, INCLUDING  STORAGE  OF  MATERIAL  TO  BE  USED  IN
   17  PRODUCTION  AND  OF THE PRODUCTS THAT ARE PRODUCED. FOR PURPOSES OF THIS
   18  SUBDIVISION, THE TERMS "RESEARCH AND DEVELOPMENT PROPERTY",  "INDUSTRIAL
   19  WASTE  TREATMENT  FACILITIES",  AND  "AIR  POLLUTION CONTROL FACILITIES"
   20  SHALL HAVE THE MEANINGS ASCRIBED THERETO BY CLAUSES (B),  (C)  AND  (D),
   21  RESPECTIVELY,  OF  SUBPARAGRAPH (IV) OF PARAGRAPH (B) OF SUBDIVISION ONE
   22  OF THIS SECTION, AND THE PROVISIONS OF SUBPARAGRAPH (V)  OF  SUCH  PARA-
   23  GRAPH (B) SHALL APPLY.
   24    (C)  NONQUALIFIED  PROPERTY.  A TAXPAYER SHALL NOT BE ALLOWED A CREDIT
   25  UNDER THIS SUBDIVISION WITH RESPECT TO ANY  TANGIBLE  PERSONAL  PROPERTY
   26  AND  OTHER  TANGIBLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPO-
   27  NENTS OF BUILDINGS, WHICH IT LEASES TO ANY OTHER PERSON  OR  CORPORATION
   28  EXCEPT  WHERE  A  TAXPAYER  LEASES  PROPERTY  TO AN AFFILIATED REGULATED
   29  BROKER,  DEALER,  REGISTERED  INVESTMENT  ADVISER,  NATIONAL  SECURITIES
   30  EXCHANGE  OR  BOARD  OF TRADE OR OTHER ENTITY DESCRIBED IN CLAUSE (F) OF
   31  SUBPARAGRAPH (V) OF PARAGRAPH (B) OF THIS  SUBDIVISION  THAT  USES  SUCH
   32  PROPERTY  IN  ACCORDANCE  WITH CLAUSE (D), (E), (E-1) OR (F) OF SUBPARA-
   33  GRAPH (V) OF PARAGRAPH (B) OF THIS  SUBDIVISION.  FOR  PURPOSES  OF  THE
   34  PRECEDING  SENTENCE, ANY CONTRACT OR AGREEMENT TO LEASE OR RENT OR FOR A
   35  LICENSE TO USE SUCH PROPERTY SHALL BE CONSIDERED  A  LEASE.    PROVIDED,
   36  HOWEVER,  IN  DETERMINING  WHETHER  A TAXPAYER SHALL BE ALLOWED A CREDIT
   37  UNDER THIS SUBDIVISION WITH RESPECT TO SUCH PROPERTY, ANY ELECTION  MADE
   38  WITH  RESPECT  TO  SUCH PROPERTY PURSUANT TO THE PROVISIONS OF PARAGRAPH
   39  EIGHT OF SUBSECTION (F) OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTER-
   40  NAL REVENUE CODE, AS SUCH PARAGRAPH WAS IN EFFECT FOR AGREEMENTS ENTERED
   41  INTO PRIOR TO JANUARY FIRST,  NINETEEN  HUNDRED  EIGHTY-FOUR,  SHALL  BE
   42  DISREGARDED.
   43    (D) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXA-
   44  BLE  YEAR  SHALL  NOT  REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE
   45  FIXED DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D)  OF  SUBDIVISION
   46  ONE  OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED, HOWEVER, THAT
   47  IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR  ANY  TAXABLE
   48  YEAR  REDUCES  THE  TAX TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS
   49  TAX BASED ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF  CREDIT  NOT
   50  DEDUCTIBLE  IN  SUCH  TAXABLE  YEAR MAY BE CARRIED OVER TO THE FOLLOWING
   51  YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH  YEAR
   52  OR  YEARS.  IN LIEU OF SUCH CARRYOVER, ANY SUCH TAXPAYER WHICH QUALIFIES
   53  AS A NEW BUSINESS UNDER PARAGRAPH (F) OF SUBDIVISION ONE OF THIS SECTION
   54  MAY ELECT, ON ITS REPORT FOR ITS TAXABLE YEAR WITH RESPECT TO WHICH SUCH
   55  CREDIT IS ALLOWED, TO TREAT FIFTY PERCENT OF THE AMOUNT OF  SUCH  CARRY-
   56  OVER  AS  AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE
       S. 6359--D                         84                         A. 8559--D

    1  WITH THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS  CHAPTER.
    2  IN  ADDITION, ANY TAXPAYER WHICH IS APPROVED AS THE OWNER OF A QUALIFIED
    3  INVESTMENT PROJECT OR A SIGNIFICANT CAPITAL INVESTMENT PROJECT  PURSUANT
    4  TO  SUBDIVISION  (W)  OF  SECTION NINE HUNDRED FIFTY-NINE OF THE GENERAL
    5  MUNICIPAL LAW, ON ITS REPORT FOR ITS TAXABLE YEAR WITH RESPECT TO  WHICH
    6  SUCH  CREDIT  IS  ALLOWED, IN LIEU OF SUCH CARRYOVER, MAY ELECT TO TREAT
    7  FIFTY PERCENT OF THE AMOUNT OF SUCH CARRYOVER WHICH IS  ATTRIBUTABLE  TO
    8  THE  CREDIT ALLOWED UNDER THIS SUBDIVISION FOR PROPERTY WHICH IS PART OF
    9  SUCH PROJECT AS AN OVERPAYMENT OF TAX TO  BE  CREDITED  OR  REFUNDED  IN
   10  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND EIGHTY-SIX OF
   11  THIS CHAPTER. PROVIDED, HOWEVER, SUCH OWNER SHALL BE ALLOWED SUCH REFUND
   12  FOR A MAXIMUM OF TEN  TAXABLE  YEARS  WITH  RESPECT  TO  SUCH  QUALIFIED
   13  INVESTMENT  PROJECT  AND  EACH  SIGNIFICANT  CAPITAL INVESTMENT PROJECT,
   14  STARTING WITH THE FIRST TAXABLE YEAR IN WHICH PROPERTY  COMPRISING  SUCH
   15  PROJECT IS PLACED IN SERVICE. PROVIDED, FURTHER, HOWEVER, THE PROVISIONS
   16  OF  SUBSECTION  (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
   17  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   18    (D-1) ANY CARRYOVER OF A CREDIT FROM PRIOR TAXABLE YEARS WILL  NOT  BE
   19  ALLOWED  IF  AN EMPIRE ZONE RETENTION CERTIFICATE IS NOT ISSUED PURSUANT
   20  TO SUBDIVISION (W) OF SECTION NINE HUNDRED  FIFTY-NINE  OF  THE  GENERAL
   21  MUNICIPAL  LAW  TO  THE EMPIRE ZONE ENTERPRISE WHICH IS THE BASIS OF THE
   22  CREDIT.
   23    (E) AT THE OPTION OF THE TAXPAYER, THE TAXPAYER MAY  CHOOSE  TO  CLAIM
   24  THE  CREDIT  DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION FOR PROPERTY
   25  WHICH ALSO QUALIFIES FOR THE CREDIT PROVIDED UNDER  SUBDIVISION  ONE  OF
   26  THIS SECTION. A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBDI-
   27  VISION  WITH  RESPECT TO ANY PROPERTY DESCRIBED IN PARAGRAPH (A) OF THIS
   28  SUBDIVISION IF A CREDIT IS TAKEN PURSUANT TO  SUBDIVISION  ONE  OF  THIS
   29  SECTION.
   30    (F)  RECAPTURE.  (I)  WITH  RESPECT  TO  PROPERTY WHICH IS DEPRECIABLE
   31  PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE CODE
   32  BUT IS NOT SUBJECT TO THE PROVISIONS OF SECTION ONE HUNDRED  SIXTY-EIGHT
   33  OF  SUCH  CODE AND WHICH IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE
   34  PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT IS TO BE TAKEN,
   35  THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF  THE  CREDIT  PROVIDED
   36  FOR  IN  THIS SUBDIVISION WHICH REPRESENTS THE RATIO WHICH THE MONTHS OF
   37  QUALIFIED USE BEAR TO THE MONTHS OF USEFUL LIFE. IF  PROPERTY  ON  WHICH
   38  CREDIT  HAS  BEEN  TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE
   39  PRIOR TO THE END OF ITS USEFUL LIFE, THE DIFFERENCE BETWEEN  THE  CREDIT
   40  TAKEN  AND  THE  CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE
   41  YEAR OF DISPOSITION. PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED  OF
   42  OR  CEASES TO BE IN QUALIFIED USE AFTER IT HAS BEEN IN QUALIFIED USE FOR
   43  MORE THAN TWELVE CONSECUTIVE YEARS, IT SHALL NOT  BE  NECESSARY  TO  ADD
   44  BACK  THE  CREDIT AS PROVIDED IN THIS SUBPARAGRAPH. THE AMOUNT OF CREDIT
   45  ALLOWED FOR ACTUAL USE SHALL BE DETERMINED BY MULTIPLYING  THE  ORIGINAL
   46  CREDIT BY THE RATIO WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE MONTHS
   47  OF  USEFUL LIFE. FOR PURPOSES OF THIS SUBPARAGRAPH, USEFUL LIFE OF PROP-
   48  ERTY SHALL BE THE SAME AS THE TAXPAYER USES  FOR  DEPRECIATION  PURPOSES
   49  WHEN COMPUTING HIS FEDERAL INCOME TAX LIABILITY.
   50    (II)  EXCEPT  WITH RESPECT TO THAT PROPERTY TO WHICH SUBPARAGRAPH (IV)
   51  OF THIS PARAGRAPH APPLIES,  WITH  RESPECT  TO  THREE-YEAR  PROPERTY,  AS
   52  DEFINED  IN  SUBSECTION  (E)  OF  SECTION ONE HUNDRED SIXTY-EIGHT OF THE
   53  INTERNAL REVENUE CODE, WHICH IS DISPOSED OF OR CEASES TO BE IN QUALIFIED
   54  USE PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT  IS  TO  BE
   55  TAKEN,  THE  AMOUNT  OF  THE  CREDIT SHALL BE THAT PORTION OF THE CREDIT
   56  PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS THE  RATIO  WHICH  THE
       S. 6359--D                         85                         A. 8559--D

    1  MONTHS  OF QUALIFIED USE BEAR TO THIRTY-SIX. IF PROPERTY ON WHICH CREDIT
    2  HAS BEEN TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR  TO
    3  THE  END  OF  THIRTY-SIX MONTHS, THE DIFFERENCE BETWEEN THE CREDIT TAKEN
    4  AND  THE CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE YEAR OF
    5  DISPOSITION. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL USE SHALL BE DETER-
    6  MINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO WHICH  THE  MONTHS
    7  OF QUALIFIED USE BEAR TO THIRTY-SIX.
    8    (III)  EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH SUBPARAGRAPH (IV)
    9  OF THIS PARAGRAPH APPLIES, WITH  RESPECT  TO  PROPERTY  SUBJECT  TO  THE
   10  PROVISIONS  OF  SECTION  ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL REVENUE
   11  CODE OTHER THAN THREE-YEAR PROPERTY AS DEFINED IN SUBSECTION (E) OF SUCH
   12  SECTION ONE HUNDRED SIXTY-EIGHT WHICH IS DISPOSED OF OR CEASES TO BE  IN
   13  QUALIFIED  USE  PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT
   14  IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT  PORTION  OF  THE
   15  CREDIT PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS THE RATIO WHICH
   16  THE  MONTHS  OF QUALIFIED USE BEAR TO SIXTY. IF PROPERTY ON WHICH CREDIT
   17  HAS BEEN TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR  TO
   18  THE END OF SIXTY MONTHS, THE DIFFERENCE BETWEEN THE CREDIT TAKEN AND THE
   19  CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE YEAR OF DISPOSI-
   20  TION. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL USE SHALL BE DETERMINED BY
   21  MULTIPLYING  THE ORIGINAL CREDIT BY THE RATIO WHICH THE MONTHS OF QUALI-
   22  FIED USE BEAR TO SIXTY.
   23    (IV) WITH RESPECT TO ANY PROPERTY TO WHICH SECTION ONE HUNDRED  SIXTY-
   24  EIGHT  OF  THE  INTERNAL  REVENUE CODE APPLIES, WHICH IS A BUILDING OR A
   25  STRUCTURAL COMPONENT OF A BUILDING AND WHICH IS DISPOSED OF OR CEASES TO
   26  BE IN QUALIFIED USE PRIOR TO THE END OF THE TAXABLE YEAR  IN  WHICH  THE
   27  CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF
   28  THE  CREDIT  PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS THE RATIO
   29  WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE  TOTAL  NUMBER  OF  MONTHS
   30  OVER  WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE INTER-
   31  NAL REVENUE CODE. IF PROPERTY ON WHICH CREDIT HAS BEEN TAKEN IS DISPOSED
   32  OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO THE END OF THE PERIOD  OVER
   33  WHICH  THE  TAXPAYER  CHOOSES  TO DEDUCT THE PROPERTY UNDER THE INTERNAL
   34  REVENUE CODE, THE DIFFERENCE BETWEEN THE CREDIT  TAKEN  AND  THE  CREDIT
   35  ALLOWED  FOR  ACTUAL  USE MUST BE ADDED BACK IN THE YEAR OF DISPOSITION.
   36  PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED OF OR CEASES  TO  BE  IN
   37  QUALIFIED  USE  AFTER  IT HAS BEEN IN QUALIFIED USE FOR MORE THAN TWELVE
   38  CONSECUTIVE YEARS, IT SHALL NOT BE NECESSARY TO ADD BACK THE  CREDIT  AS
   39  PROVIDED  IN  THIS SUBPARAGRAPH. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL
   40  USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE  RATIO
   41  WHICH  THE  MONTHS  OF  QUALIFIED USE BEAR TO THE TOTAL NUMBER OF MONTHS
   42  OVER WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE  INTER-
   43  NAL REVENUE CODE.
   44    (V) FOR PURPOSES OF THIS PARAGRAPH, DISPOSAL OR CESSATION OF QUALIFIED
   45  USE  SHALL NOT BE DEEMED TO HAVE OCCURRED SOLELY BY REASON OF THE TERMI-
   46  NATION OR EXPIRATION OF AN EMPIRE ZONE'S DESIGNATION AS SUCH.
   47    (VI)(A) FOR PURPOSES OF THIS PARAGRAPH, THE DECERTIFICATION OF A BUSI-
   48  NESS ENTERPRISE WITH RESPECT  TO  AN  EMPIRE  ZONE  SHALL  CONSTITUTE  A
   49  DISPOSAL  OR  CESSATION  OF  QUALIFIED  USE OF THE PROPERTY ON WHICH THE
   50  CREDIT WAS TAKEN WHICH IS LOCATED IN THE ZONE  TO  WHICH  THE  DECERTIF-
   51  ICATION APPLIES, ON THE EFFECTIVE DATE OF SUCH DECERTIFICATION.
   52    (B)  WHERE A BUSINESS ENTERPRISE HAS BEEN DECERTIFIED BASED ON A FIND-
   53  ING PURSUANT TO CLAUSE ONE, TWO, OR FIVE OF SUBDIVISION (A)  OF  SECTION
   54  NINE  HUNDRED  FIFTY-NINE  OF  THE  GENERAL  MUNICIPAL  LAW,  THE AMOUNT
   55  REQUIRED TO BE ADDED BACK BY REASON OF THIS PARAGRAPH SHALL BE  (I)  THE
   56  AMOUNT  OF  CREDIT, WITH RESPECT TO THE PROPERTY WHICH IS DISPOSED OF OR
       S. 6359--D                         86                         A. 8559--D

    1  CEASES TO BE IN QUALIFIED USE, WHICH WAS DEDUCTED  FROM  THE  TAXPAYER'S
    2  TAX  OTHERWISE  DUE  UNDER  THIS  ARTICLE  FOR  ALL PRIOR TAXABLE YEARS,
    3  REDUCED (BUT NOT BELOW ZERO) BY (II) THE CREDIT ALLOWED FOR ACTUAL  USE.
    4  FOR  PURPOSES OF THIS SUBPARAGRAPH, THE ATTRIBUTION TO SPECIFIC PROPERTY
    5  OF CREDIT AMOUNTS DEDUCTED FROM TAX SHALL BE ESTABLISHED  IN  ACCORDANCE
    6  WITH  THE  DATE  OF  PLACEMENT IN SERVICE OF SUCH PROPERTY IN THE EMPIRE
    7  ZONE.
    8    (C) IN NO EVENT SHALL THE AMOUNT OF THE  CREDIT  ALLOWED  PURSUANT  TO
    9  THIS  SUBDIVISION  BE  RENDERED,  SOLELY BY REASON OF CLAUSE (A) OF THIS
   10  SUBPARAGRAPH, LESS THAN THE AMOUNT OF THE CREDIT TO WHICH  THE  TAXPAYER
   11  WOULD OTHERWISE BE ENTITLED UNDER SUBDIVISION ONE OF THIS SECTION.
   12    (D)  NOTWITHSTANDING  ANY  OTHER PROVISION OF THIS SUBDIVISION, IN THE
   13  CASE OF A BUSINESS ENTERPRISE WHICH HAS BEEN DECERTIFIED, ANY AMOUNT  OF
   14  CREDIT  ALLOWED WITH RESPECT TO THE PROPERTY OF SUCH BUSINESS ENTERPRISE
   15  LOCATED IN THE ZONE  TO  WHICH  THE  DECERTIFICATION  APPLIES  WHICH  IS
   16  CARRIED  OVER PURSUANT TO PARAGRAPH (D) OF THIS SUBDIVISION SHALL NOT BE
   17  CARRIED OVER BEYOND THE SEVENTH TAXABLE YEAR NEXT FOLLOWING THE  TAXABLE
   18  YEAR  WITH  RESPECT TO WHICH THE CREDIT PROVIDED FOR IN THIS SUBDIVISION
   19  WAS ALLOWED.
   20    (VII) FOR PURPOSES OF THIS PARAGRAPH, WHERE A CREDIT IS  ALLOWED  WITH
   21  RESPECT  TO  AN AIR POLLUTION CONTROL FACILITY ON THE BASIS OF A CERTIF-
   22  ICATE OF COMPLIANCE ISSUED PURSUANT TO  THE  ENVIRONMENTAL  CONSERVATION
   23  LAW  AND  THE  CERTIFICATE  IS  REVOKED PURSUANT TO SUBDIVISION THREE OF
   24  SECTION 19-0309 OF THE ENVIRONMENTAL CONSERVATION LAW,  SUCH  REVOCATION
   25  SHALL  CONSTITUTE  A DISPOSAL OR CESSATION OF QUALIFIED USE, EXCEPT WITH
   26  RESPECT TO PROPERTY CONTAINED IN OR COMPRISING SUCH  FACILITY  WHICH  IS
   27  DESCRIBED  IN  CLAUSE  (A), (B), OR (C) OF SUBPARAGRAPH (V) OF PARAGRAPH
   28  (B) OF THIS SUBDIVISION OTHER THAN AS  PART  OF  OR  COMPRISING  AN  AIR
   29  POLLUTION CONTROL FACILITY. ALSO FOR PURPOSES OF THIS PARAGRAPH, THE USE
   30  OF  AN  AIR  POLLUTION CONTROL FACILITY OR AN INDUSTRIAL WASTE TREATMENT
   31  FACILITY FOR THE PRIMARY PURPOSE OF SALVAGING MATERIALS WHICH ARE USABLE
   32  IN THE MANUFACTURING PROCESS OR ARE MARKETABLE SHALL CONSTITUTE A CESSA-
   33  TION OF QUALIFIED USE, EXCEPT WITH RESPECT TO PROPERTY CONTAINED  IN  OR
   34  COMPRISING  SUCH  FACILITY  WHICH  IS  DESCRIBED IN CLAUSE (A) OR (C) OF
   35  SUBPARAGRAPH (V) OF PARAGRAPH (B) OF THIS SUBDIVISION.
   36    (VIII) EXCEPT AS PROVIDED IN THIS SUBPARAGRAPH, THIS  PARAGRAPH  SHALL
   37  NOT  APPLY TO A CREDIT ALLOWED BY THIS SUBDIVISION TO A TAXPAYER THAT IS
   38  A PARTNER IN A  PARTNERSHIP  IN  THE  CASE  OF  MANUFACTURING  PROPERTY;
   39  PROVIDED,  AT THE TIME SUCH PROPERTY WAS PLACED IN SERVICE BY SUCH PART-
   40  NERSHIP IN AN EMPIRE ZONE THE BASIS FOR FEDERAL INCOME TAX PURPOSES  FOR
   41  SUCH  PROPERTY  (OR  A  PROJECT  THAT INCLUDES SUCH PROPERTY) EQUALED OR
   42  EXCEEDED THREE HUNDRED MILLION DOLLARS AND SUCH PARTNER OWNED ITS  PART-
   43  NERSHIP  INTEREST  FOR  AT LEAST THREE YEARS FROM THE DATE SUCH PROPERTY
   44  WAS PLACED IN SERVICE. IF SUCH PROPERTY CEASES TO BE  IN  QUALIFIED  USE
   45  AFTER  IT IS PLACED IN SERVICE, THIS PARAGRAPH SHALL APPLY TO SUCH PART-
   46  NER IN THE YEAR SUCH PROPERTY CEASES TO BE IN QUALIFYING USE.
   47    (IX) IF A TAXPAYER, WHICH IS APPROVED BY THE COMMISSIONER OF  ECONOMIC
   48  DEVELOPMENT  AS THE OWNER OF A QUALIFIED INVESTMENT PROJECT OR A SIGNIF-
   49  ICANT CAPITAL INVESTMENT PROJECT PURSUANT TO SUBDIVISION (W) OF  SECTION
   50  NINE  HUNDRED  FIFTY-NINE  OF  THE  GENERAL  MUNICIPAL LAW, FAILS TO (A)
   51  CREATE AT LEAST THE MINIMUM NUMBER OF JOBS AT SUCH PROJECT  AS  REQUIRED
   52  BY  THE  PROVISIONS  OF  SUBDIVISION  (S) OR (T) OF SECTION NINE HUNDRED
   53  FIFTY-SEVEN AND SUBDIVISION (W) OF SECTION NINE  HUNDRED  FIFTY-NINE  OF
   54  THE  GENERAL  MUNICIPAL  LAW OR (B) PLACE IN SERVICE PROPERTY COMPRISING
   55  SUCH QUALIFIED INVESTMENT  PROJECT  OR  SIGNIFICANT  CAPITAL  INVESTMENT
   56  PROJECT WITH A BASIS FOR FEDERAL INCOME TAX PURPOSES EQUALING OR EXCEED-
       S. 6359--D                         87                         A. 8559--D

    1  ING  THE  APPLICABLE MINIMUM REQUIRED BASIS AS PROVIDED IN SUCH SUBDIVI-
    2  SION (S) OR (T), WHICHEVER IS RELEVANT, BY THE LAST  DAY  OF  THE  FIFTH
    3  TAXABLE  YEAR  FOLLOWING  THE  TAXABLE  YEAR  IN WHICH A CREDIT IS FIRST
    4  ALLOWED  UNDER  THIS  SUBDIVISION  FOR THE PROPERTY WHICH COMPRISES SUCH
    5  QUALIFIED INVESTMENT PROJECT  OR  SUCH  SIGNIFICANT  CAPITAL  INVESTMENT
    6  PROJECT,  THE  TOTAL AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBDIVISION
    7  FOR ALL TAXABLE YEARS WITH RESPECT TO THE PROPERTY WHICH COMPRISES  SUCH
    8  PROJECT  WHICH HAS BEEN REFUNDED TO SUCH TAXPAYER SHALL BE ADDED BACK IN
    9  SUCH TAXABLE YEAR.
   10    (G) NOTWITHSTANDING THE EXPIRATION OF THE EMPIRE ZONES  PROGRAM  UNDER
   11  ARTICLE  EIGHTEEN-B  OF  THE  GENERAL  MUNICIPAL LAW, A TAXPAYER THAT IS
   12  CERTIFIED AS A QUALIFIED INVESTMENT PROJECT  PURSUANT  TO  SUCH  ARTICLE
   13  EIGHT-B  ON  THE  DAY  IMMEDIATELY  PRECEDING  THE  DAY THE EMPIRE ZONES
   14  PROGRAM EXPIRED SHALL CONTINUE TO BE DEEMED CERTIFIED UNDER SUCH ARTICLE
   15  EIGHTEEN-B FOR PURPOSES OF THIS SUBDIVISION FOR  THE  REMAINDER  OF  THE
   16  TAXABLE  YEAR IN WHICH THE EXPIRATION OCCURRED AND FOR THE NEXT SUCCEED-
   17  ING NINE TAXABLE YEARS. IN ADDITION,  THE  AREAS  DESIGNATED  AS  EMPIRE
   18  ZONES  IN  WHICH  THE  TAXPAYER  IS  CERTIFIED AS A QUALIFIED INVESTMENT
   19  PROJECT ON THE DAY  IMMEDIATELY  PRECEDING  THE  DAY  THE  EMPIRE  ZONES
   20  PROGRAM EXPIRED SHALL CONTINUE TO BE DEEMED EMPIRE ZONES FOR PURPOSES OF
   21  THIS  SUBDIVISION  FOR  THE  REMAINDER  OF THE TAXABLE YEAR IN WHICH THE
   22  EXPIRATION OCCURRED AND FOR THE NEXT SUCCEEDING NINE TAXABLE YEARS.
   23    (H) NOTWITHSTANDING THE EXPIRATION OF THE EMPIRE ZONES  PROGRAM  UNDER
   24  ARTICLE  EIGHTEEN-B  OF THE GENERAL MUNICIPAL LAW AND EXCEPT AS PROVIDED
   25  IN PARAGRAPH (G) OF THIS SUBDIVISION, A TAXPAYER THAT IS CERTIFIED AS AN
   26  EMPIRE ZONE BUSINESS PURSUANT TO SUCH  ARTICLE  EIGHTEEN-B  ON  THE  DAY
   27  IMMEDIATELY  PRECEDING  THE  DAY  THE  EMPIRE ZONE PROGRAM EXPIRED SHALL
   28  CONTINUE TO BE  DEEMED  CERTIFIED  UNDER  SUCH  ARTICLE  EIGHTEEN-B  FOR
   29  PURPOSES  OF  THIS SUBDIVISION UNTIL APRIL FIRST, TWO THOUSAND FOURTEEN.
   30  IN ADDITION, THE AREAS DESIGNATED AS EMPIRE ZONES IN WHICH THE  TAXPAYER
   31  IS CERTIFIED AS AN EMPIRE ZONE BUSINESS ON THE DAY IMMEDIATELY PRECEDING
   32  THE  DAY  THE  EMPIRE  ZONES PROGRAM EXPIRED SHALL CONTINUE TO BE DEEMED
   33  EMPIRE ZONES FOR PURPOSES OF THIS SUBDIVISIONS UNTIL  APRIL  FIRST,  TWO
   34  THOUSAND FOURTEEN.
   35    4.  EMPIRE  ZONE EMPLOYMENT INCENTIVE CREDIT (EZ-EIC). (A) APPLICATION
   36  OF CREDIT. WHERE A TAXPAYER IS ALLOWED A CREDIT UNDER SUBDIVISION  THREE
   37  OF  THIS SECTION, THE TAXPAYER SHALL BE ALLOWED A CREDIT FOR EACH OF THE
   38  THREE YEARS NEXT SUCCEEDING THE TAXABLE YEAR FOR WHICH THE CREDIT  UNDER
   39  SUCH SUBDIVISION THREE IS ALLOWED, WITH RESPECT TO SUCH PROPERTY, WHETH-
   40  ER OR NOT DEDUCTIBLE IN SUCH TAXABLE YEAR OR IN SUBSEQUENT TAXABLE YEARS
   41  PURSUANT  TO  PARAGRAPH (D) OF SUCH SUBDIVISION THREE, OF THIRTY PERCENT
   42  OF THE CREDIT ALLOWABLE UNDER SUCH SUBDIVISION THREE; PROVIDED, HOWEVER,
   43  THAT THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR  ANY  TAXABLE  YEAR
   44  SHALL ONLY BE ALLOWED IF THE AVERAGE NUMBER OF EMPLOYEES EMPLOYED BY THE
   45  TAXPAYER  IN  THE EMPIRE ZONE, DESIGNATED PURSUANT TO ARTICLE EIGHTEEN-B
   46  OF THE GENERAL MUNICIPAL LAW, IN WHICH SUCH PROPERTY IS  LOCATED  DURING
   47  SUCH  TAXABLE  YEAR  IS  AT LEAST ONE HUNDRED ONE PERCENT OF THE AVERAGE
   48  NUMBER OF EMPLOYEES EMPLOYED BY THE TAXPAYER IN SUCH EMPIRE ZONE, DURING
   49  THE TAXABLE YEAR IMMEDIATELY PRECEDING THE TAXABLE YEAR  FOR  WHICH  THE
   50  CREDIT  UNDER  SUCH  SUBDIVISION THREE IS ALLOWED AND PROVIDED, FURTHER,
   51  THAT IF THE TAXPAYER WAS NOT SUBJECT TO TAX AND DID NOT HAVE  A  TAXABLE
   52  YEAR  IMMEDIATELY  PRECEDING THE TAXABLE YEAR FOR WHICH THE CREDIT UNDER
   53  SUBDIVISION THREE OF THIS SECTION IS ALLOWED, THE CREDIT ALLOWABLE UNDER
   54  THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL BE ALLOWED  IF  THE  AVERAGE
   55  NUMBER OF EMPLOYEES EMPLOYED IN SUCH EMPIRE ZONE IN SUCH TAXABLE YEAR IS
   56  AT LEAST ONE HUNDRED ONE PERCENT OF THE AVERAGE NUMBER OF SUCH EMPLOYEES
       S. 6359--D                         88                         A. 8559--D

    1  DURING THE TAXABLE YEAR IN WHICH THE CREDIT UNDER SUCH SUBDIVISION THREE
    2  IS ALLOWED.
    3    (B)  AVERAGE  NUMBER  OF  EMPLOYEES.  THE  AVERAGE NUMBER OF EMPLOYEES
    4  EMPLOYED IN AN EMPIRE ZONE IN A TAXABLE YEAR SHALL BE COMPUTED BY ASCER-
    5  TAINING THE NUMBER OF SUCH EMPLOYEES WITHIN  SUCH  ZONE  EXCEPT  GENERAL
    6  EXECUTIVE  OFFICERS, EMPLOYED BY THE TAXPAYER ON THE THIRTY-FIRST DAY OF
    7  MARCH, THE THIRTIETH DAY OF JUNE, THE THIRTIETH DAY OF SEPTEMBER AND THE
    8  THIRTY-FIRST DAY OF DECEMBER IN THE TAXABLE YEAR, BY ADDING TOGETHER THE
    9  NUMBER OF EMPLOYEES ASCERTAINED ON EACH OF SUCH DATES AND  DIVIDING  THE
   10  SUM  SO  OBTAINED  BY THE NUMBER OF SUCH ABOVE-MENTIONED DATES OCCURRING
   11  WITHIN THE TAXABLE YEAR.
   12    (C) CARRYOVER. IN NO EVENT SHALL THE CREDIT  HEREIN  PROVIDED  FOR  BE
   13  ALLOWED  IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN THE
   14  FIXED DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D)  OF  SUBDIVISION
   15  ONE  OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED, HOWEVER, THAT
   16  IF THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE
   17  YEAR REDUCES THE TAX TO SUCH AMOUNT OR IF THE  TAXPAYER  OTHERWISE  PAYS
   18  TAX  BASED  ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT NOT
   19  DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED  OVER  TO  THE  FOLLOWING
   20  YEAR  OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR
   21  OR YEARS. IN LIEU  OF  SUCH  CARRYOVER,  ANY  SUCH  TAXPAYER,  WHICH  IS
   22  APPROVED AS THE OWNER OF A QUALIFIED INVESTMENT PROJECT OR A SIGNIFICANT
   23  CAPITAL  INVESTMENT  PROJECT PURSUANT TO SUBDIVISION (V) OF SECTION NINE
   24  HUNDRED FIFTY-NINE OF THE GENERAL  MUNICIPAL  LAW,  MAY  ELECT,  ON  ITS
   25  REPORT  FOR  ITS  TAXABLE  YEAR  WITH  RESPECT  TO  WHICH SUCH CREDIT IS
   26  ALLOWED, TO TREAT FIFTY PERCENT OF THE AMOUNT OF SUCH  CARRYOVER  AS  AN
   27  OVERPAYMENT  OF  TAX  TO  BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE
   28  PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED,
   29  HOWEVER, IN THE CASE OF SUCH OWNER OF A QUALIFIED INVESTMENT PROJECT  OR
   30  A  SIGNIFICANT  CAPITAL  INVESTMENT  PROJECT,  ONLY FIFTY PERCENT OF THE
   31  AMOUNT OF SUCH CARRYOVER WHICH IS ATTRIBUTABLE  TO  THE  CREDIT  ALLOWED
   32  UNDER  THIS  SUBDIVISION  WITH RESPECT TO PROPERTY WHICH IS PART OF SUCH
   33  PROJECT SHALL BE ALLOWED TO BE CREDITED OR REFUNDED AND SUCH OWNER SHALL
   34  BE ALLOWED SUCH CREDIT OR REFUND ONLY FOR THOSE TAXABLE YEARS  IN  WHICH
   35  SUCH  OWNER  WOULD  BE  ALLOWED  A  CREDIT  OR REFUND OF THE EMPIRE ZONE
   36  INVESTMENT TAX CREDIT PURSUANT TO PARAGRAPH (D) OF SUBDIVISION THREE  OF
   37  THIS  SECTION.  PROVIDED, FURTHER, HOWEVER, THE PROVISIONS OF SUBSECTION
   38  (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS  CHAPTER  NOTWITHSTAND-
   39  ING, NO INTEREST SHALL BE PAID THEREON.
   40    (C-1)  ANY  CARRYOVER OF A CREDIT FROM PRIOR TAXABLE YEARS WILL NOT BE
   41  ALLOWED IF AN EMPIRE ZONE RETENTION CERTIFICATE IS NOT  ISSUED  PURSUANT
   42  TO  SUBDIVISION  (W)  OF  SECTION NINE HUNDRED FIFTY-NINE OF THE GENERAL
   43  MUNICIPAL LAW TO THE EMPIRE ZONE ENTERPRISE WHICH IS THE  BASIS  OF  THE
   44  CREDIT.
   45    (D)  NOTWITHSTANDING  THE EXPIRATION OF THE EMPIRE ZONES PROGRAM UNDER
   46  ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL  LAW,  A  TAXPAYER  THAT  IS
   47  CERTIFIED  AS  A  QUALIFIED  INVESTMENT PROJECT PURSUANT TO SUCH ARTICLE
   48  EIGHTEEN-B ON THE DAY IMMEDIATELY PRECEDING THE  DAY  THE  EMPIRE  ZONES
   49  PROGRAM EXPIRED SHALL CONTINUE TO BE DEEMED CERTIFIED UNDER SUCH ARTICLE
   50  EIGHTEEN-B  FOR  PURPOSES  OF  THIS SUBDIVISION FOR THE REMAINDER OF THE
   51  TAXABLE YEAR IN WHICH THE EXPIRATION OCCURRED AND FOR THE NEXT  SUCCEED-
   52  ING  NINE  TAXABLE  YEARS.  IN  ADDITION, THE AREAS DESIGNATED AS EMPIRE
   53  ZONES IN WHICH THE TAXPAYER  IS  CERTIFIED  AS  A  QUALIFIED  INVESTMENT
   54  PROJECT  ON  THE  DAY  IMMEDIATELY  PRECEDING  THE  DAY THE EMPIRE ZONES
   55  PROGRAM EXPIRED SHALL CONTINUE TO BE DEEMED EMPIRE ZONES FOR PURPOSES OF
       S. 6359--D                         89                         A. 8559--D

    1  THIS SUBDIVISION FOR THE REMAINDER OF THE  TAXABLE  YEAR  IN  WHICH  THE
    2  EXPIRATION OCCURRED AND FOR THE NEXT SUCCEEDING NINE TAXABLE YEARS.
    3    (E)  NOTWITHSTANDING  THE EXPIRATION OF THE EMPIRE ZONES PROGRAM UNDER
    4  ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW AND EXCEPT  AS  PROVIDED
    5  IN PARAGRAPH (D) OF THIS SUBDIVISION, A TAXPAYER THAT IS CERTIFIED AS AN
    6  EMPIRE  ZONE  BUSINESS  PURSUANT  TO  SUCH ARTICLE EIGHTEEN-B ON THE DAY
    7  IMMEDIATELY PRECEDING THE DAY THE EMPIRE  ZONES  PROGRAM  EXPIRED  SHALL
    8  CONTINUE  TO  BE  DEEMED  IN  THE  EMPIRE ZONE IN WHICH THE TAXPAYER WAS
    9  CERTIFIED AS AN EMPIRE ZONE BUSINESS ON THE  DAY  IMMEDIATELY  PRECEDING
   10  THE  DAY  THE  EMPIRE  ZONES PROGRAM EXPIRED FOR EACH OF THE THREE YEARS
   11  NEXT SUCCEEDING THE TAXABLE YEAR FOR WHICH THE CREDIT UNDER  SUBDIVISION
   12  THREE OF THIS SECTION IS ALLOWED.
   13    5.  QEZE  CREDIT  FOR  REAL PROPERTY TAXES. (A) ALLOWANCE OF CREDIT. A
   14  TAXPAYER WHICH IS A QUALIFIED EMPIRE ZONE ENTERPRISE SHALL BE ALLOWED  A
   15  CREDIT  FOR  ELIGIBLE REAL PROPERTY TAXES, TO BE COMPUTED AS PROVIDED IN
   16  SECTION FIFTEEN OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY  THIS  ARTI-
   17  CLE.
   18    (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
   19  FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
   20  THAN  THE  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
   21  SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER,  IF
   22  THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR
   23  REDUCES  THE  TAX  TO  SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX
   24  BASED ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS  NOT
   25  DEDUCTIBLE  IN  SUCH  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF
   26  TAX TO BE CREDITED OR REFUNDED IN  ACCORDANCE  WITH  THE  PROVISIONS  OF
   27  SECTION  ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE
   28  PROVISIONS OF SUBSECTION (C) OF SECTION  ONE  THOUSAND  EIGHTY-EIGHT  OF
   29  THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   30    6.  QEZE  TAX  REDUCTION  CREDIT.  (A) ALLOWANCE OF CREDIT. A TAXPAYER
   31  WHICH IS A QUALIFIED EMPIRE ZONE ENTERPRISE SHALL BE ALLOWED A QEZE  TAX
   32  REDUCTION  CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION SIXTEEN OF THIS
   33  CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   34    (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
   35  FOR  ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
   36  THAN THE FIXED DOLLAR MINIMUM AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF
   37  SUBDIVISION  ONE  OF  SECTION TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED,
   38  HOWEVER, THIS PARAGRAPH SHALL NOT APPLY TO A TAXPAYER WITH A ZONE  ALLO-
   39  CATION FACTOR OF ONE HUNDRED PERCENT.
   40    7. QUALIFIED EMERGING TECHNOLOGY COMPANY EMPLOYMENT CREDIT. (A) APPLI-
   41  CATION  OF  CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED
   42  AS HEREINAFTER PROVIDED,  AGAINST  THE  TAX  IMPOSED  BY  THIS  ARTICLE,
   43  PROVIDED:
   44    (I)  THE  TAXPAYER IS A QUALIFIED EMERGING TECHNOLOGY COMPANY PURSUANT
   45  TO THE PROVISIONS OF SECTION THIRTY-ONE  HUNDRED  TWO-E  OF  THE  PUBLIC
   46  AUTHORITIES LAW; AND
   47    (II)  THE  AVERAGE  NUMBER  OF  INDIVIDUALS  EMPLOYED FULL TIME BY THE
   48  TAXPAYER IN NEW YORK STATE DURING THE  TAXABLE  YEAR  IS  AT  LEAST  ONE
   49  HUNDRED  ONE  PERCENT  OF  THE  TAXPAYER'S BASE YEAR EMPLOYMENT. FOR THE
   50  PURPOSES OF THIS SUBDIVISION, "BASE YEAR EMPLOYMENT" MEANS  THE  AVERAGE
   51  NUMBER  OF  INDIVIDUALS  EMPLOYED FULL-TIME BY THE TAXPAYER IN THE STATE
   52  DURING THE THREE TAXABLE YEARS IMMEDIATELY PRECEDING THE  FIRST  TAXABLE
   53  YEAR  IN  WHICH  THE  CREDIT  IS  CLAIMED.  WHERE  THE TAXPAYER PROVIDED
   54  FULL-TIME EMPLOYMENT WITHIN THE STATE DURING  ONLY  A  PORTION  OF  SUCH
   55  THREE-YEAR PERIOD, THEN THE FIRST EFFECTIVE DATE FOR THE COMPANY TO TAKE
   56  ADVANTAGE OF THIS CREDIT SHALL BE THE NEXT YEAR FOLLOWING THE FIRST FULL
       S. 6359--D                         90                         A. 8559--D

    1  TAXABLE  YEAR  THAT  THE  COMPANY  HAD  FULL-TIME EMPLOYMENT IN NEW YORK
    2  STATE. FOR THE PURPOSES OF THIS PARAGRAPH THE TERM "THREE  YEARS"  SHALL
    3  BE  DEEMED  TO  REFER  INSTEAD  TO THE PRIOR YEAR'S FULL-TIME EMPLOYMENT
    4  AFTER  THE  FIRST  YEAR  AND  THE AVERAGE OF THE FIRST EIGHT QUARTERS OF
    5  EMPLOYMENT AFTER THE FIRST TWO TAXABLE YEARS IN NEW YORK STATE.
    6    (B) CREDIT LIMITATION. THE CREDIT SHALL BE ALLOWED ONLY IN  THE  FIRST
    7  TAXABLE  YEAR IN WHICH THE CREDIT IS CLAIMED AND IN EACH OF THE NEXT TWO
    8  TAXABLE YEARS, PROVIDED THAT THE CONDITIONS OF  PARAGRAPH  (A)  OF  THIS
    9  SUBDIVISION ARE SATISFIED IN EACH TAXABLE YEAR.
   10    (C) AVERAGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME. FOR THE PURPOSES
   11  OF  THIS  SUBDIVISION,  AVERAGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME
   12  SHALL BE COMPUTED BY ADDING THE NUMBER OF SUCH INDIVIDUALS  EMPLOYED  BY
   13  THE  TAXPAYER  AT  THE  END  OF EACH QUARTER DURING EACH TAXABLE YEAR OR
   14  OTHER APPLICABLE PERIOD AND DIVIDING THE SUM SO OBTAINED BY  THE  NUMBER
   15  OF  SUCH QUARTERS OCCURRING WITHIN SUCH TAXABLE YEAR OR OTHER APPLICABLE
   16  PERIOD; PROVIDED HOWEVER, EXCEPT THAT IN COMPUTING BASE YEAR EMPLOYMENT,
   17  THERE SHALL BE EXCLUDED THEREFROM ANY EMPLOYEE WITH RESPECT  TO  WHOM  A
   18  CREDIT PROVIDED FOR UNDER SUBDIVISION SIX OF THIS SECTION IS CLAIMED FOR
   19  THE TAXABLE YEAR.
   20    (D) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL EQUAL THE PRODUCT
   21  OF  ONE  THOUSAND  DOLLARS  TIMES  THE  NUMBER  OF  INDIVIDUALS EMPLOYED
   22  FULL-TIME BY THE TAXPAYER IN THE TAXABLE YEAR THAT ARE IN EXCESS OF  ONE
   23  HUNDRED PERCENT OF THE TAXPAYER'S BASE YEAR EMPLOYMENT.
   24    (E) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXA-
   25  BLE  YEAR  SHALL  NOT  REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE
   26  FIXED DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D)  OF  SUBDIVISION
   27  ONE  OF  SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT
   28  OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY  TAXABLE  YEAR  REDUCES
   29  THE  TAX  TO  SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON
   30  THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS  NOT  DEDUCT-
   31  IBLE  IN  SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO
   32  BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE
   33  THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER,  THE  PROVISIONS
   34  OF  SUBSECTION  (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
   35  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   36    8. QUALIFIED EMERGING  TECHNOLOGY  COMPANY  CAPITAL  TAX  CREDIT.  (A)
   37  AMOUNT  OF  CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX
   38  IMPOSED BY THIS ARTICLE. THE AMOUNT OF THE CREDIT SHALL BE EQUAL TO  ONE
   39  OF  THE FOLLOWING PERCENTAGES, PER EACH QUALIFIED INVESTMENT IN A QUALI-
   40  FIED EMERGING  TECHNOLOGY  COMPANY  AS  DEFINED  IN  SECTION  THIRTY-ONE
   41  HUNDRED  TWO-E  OF  THE  PUBLIC AUTHORITIES LAW, MADE DURING THE TAXABLE
   42  YEAR, AND CERTIFIED BY THE COMMISSIONER, EITHER:
   43    (1) TEN PERCENT OF QUALIFIED INVESTMENTS IN QUALIFIED  EMERGING  TECH-
   44  NOLOGY  COMPANIES,  EXCEPT  FOR  INVESTMENTS  MADE BY OR ON BEHALF OF AN
   45  OWNER OF THE BUSINESS, INCLUDING, BUT NOT  LIMITED  TO,  A  STOCKHOLDER,
   46  PARTNER OR SOLE PROPRIETOR, OR ANY RELATED PERSON, AS DEFINED IN SUBPAR-
   47  AGRAPH  (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED
   48  SIXTY-FIVE OF THE INTERNAL REVENUE CODE, AND PROVIDED, HOWEVER, THAT THE
   49  TAXPAYER CERTIFIES TO THE COMMISSIONER  THAT  THE  QUALIFIED  INVESTMENT
   50  WILL  NOT  BE  SOLD, TRANSFERRED, TRADED, OR DISPOSED OF DURING THE FOUR
   51  YEARS FOLLOWING THE YEAR IN WHICH THE CREDIT IS FIRST CLAIMED; OR
   52    (2) TWENTY PERCENT OF  QUALIFIED  INVESTMENTS  IN  QUALIFIED  EMERGING
   53  TECHNOLOGY  COMPANIES, EXCEPT FOR INVESTMENTS MADE BY OR ON BEHALF OF AN
   54  OWNER OF THE BUSINESS, INCLUDING, BUT NOT  LIMITED  TO,  A  STOCKHOLDER,
   55  PARTNER OR SOLE PROPRIETOR, OR ANY RELATED PERSON, AS DEFINED IN SUBPAR-
   56  AGRAPH  (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED
       S. 6359--D                         91                         A. 8559--D

    1  SIXTY-FIVE OF THE INTERNAL REVENUE CODE, AND PROVIDED, HOWEVER, THAT THE
    2  TAXPAYER CERTIFIES TO THE COMMISSIONER  THAT  THE  QUALIFIED  INVESTMENT
    3  WILL  NOT  BE  SOLD, TRANSFERRED, TRADED, OR DISPOSED OF DURING THE NINE
    4  YEARS FOLLOWING THE YEAR IN WHICH THE CREDIT IS FIRST CLAIMED.
    5    (B)  QUALIFIED  INVESTMENT.  "QUALIFIED INVESTMENT" MEANS THE CONTRIB-
    6  UTION OF PROPERTY TO A CORPORATION IN EXCHANGE FOR ORIGINAL ISSUE  CAPI-
    7  TAL STOCK OR OTHER OWNERSHIP INTEREST, THE CONTRIBUTION OF PROPERTY TO A
    8  PARTNERSHIP  IN EXCHANGE FOR AN INTEREST IN THE PARTNERSHIP, AND SIMILAR
    9  CONTRIBUTIONS IN THE CASE OF A BUSINESS ENTITY NOT IN CORPORATE OR PART-
   10  NERSHIP FORM IN EXCHANGE FOR AN OWNERSHIP INTEREST IN SUCH ENTITY.   THE
   11  TOTAL  AMOUNT OF CREDIT ALLOWABLE TO A TAXPAYER UNDER THIS PROVISION FOR
   12  ALL YEARS, TAKEN IN THE AGGREGATE, SHALL NOT EXCEED  ONE  HUNDRED  FIFTY
   13  THOUSAND  DOLLARS  IN  THE CASE OF INVESTMENTS MADE PURSUANT TO SUBPARA-
   14  GRAPH ONE OF PARAGRAPH (A) OF THIS  SUBDIVISION  AND  SHALL  NOT  EXCEED
   15  THREE  HUNDRED THOUSAND DOLLARS IN THE CASE OF INVESTMENTS MADE PURSUANT
   16  TO SUBPARAGRAPH TWO OF PARAGRAPH (A) OF THIS SUBDIVISION.
   17    (C) CARRYOVER. IN NO EVENT SHALL THE  CREDIT  AND  CARRYOVER  OF  SUCH
   18  CREDIT  ALLOWED  UNDER  THIS  SUBDIVISION  FOR  ANY TAXABLE YEAR, IN THE
   19  AGGREGATE, REDUCE THE TAX DUE FOR SUCH  YEAR  TO  LESS  THAN  THE  FIXED
   20  DOLLAR  MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF
   21  SECTION TWO HUNDRED TEN OF THIS CHAPTER. HOWEVER, IF THE AMOUNT OF CRED-
   22  IT OR CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWED UNDER THIS SUBDIVISION
   23  FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT OR IF  THE  TAXPAYER
   24  OTHERWISE  PAYS  TAX BASED ON THE FIXED DOLLAR MINIMUM AMOUNT, OR IF ANY
   25  PART OF THE CREDIT OR CARRYOVERS OF SUCH CREDIT MAY NOT BE DEDUCTED FROM
   26  THE TAX OTHERWISE DUE BY REASON OF THE FINAL SENTENCE OF THIS PARAGRAPH,
   27  ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT THUS NOT DEDUCTIBLE IN
   28  SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND
   29  MAY BE DEDUCTED FROM THE TAX FOR SUCH YEAR OR YEARS.  IN  ADDITION,  THE
   30  AMOUNT  OF  SUCH  CREDIT,  AND  CARRYOVERS OF SUCH CREDIT TO THE TAXABLE
   31  YEAR, DEDUCTED FROM THE TAX OTHERWISE DUE MAY  NOT,  IN  THE  AGGREGATE,
   32  EXCEED  FIFTY  PERCENT OF THE TAX IMPOSED UNDER SECTION TWO HUNDRED NINE
   33  OF THIS ARTICLE COMPUTED WITHOUT REGARD TO ANY CREDIT  PROVIDED  FOR  BY
   34  THIS SECTION.
   35    (D)  RECAPTURE.  (1)  WHERE  A  TAXPAYER SELLS, TRANSFERS OR OTHERWISE
   36  DISPOSES OF CORPORATE STOCK, A PARTNERSHIP INTEREST OR  OTHER  OWNERSHIP
   37  INTEREST ARISING FROM THE MAKING OF A QUALIFIED INVESTMENT WHICH WAS THE
   38  BASIS, IN WHOLE OR IN PART, FOR THE ALLOWANCE OF THE CREDIT PROVIDED FOR
   39  UNDER SUBPARAGRAPH ONE OF PARAGRAPH (A) OF THIS SUBDIVISION, OR WHERE AN
   40  INVESTMENT  WHICH  WAS  THE  BASIS FOR SUCH ALLOWANCE IS, IN WHOLE OR IN
   41  PART, RECOVERED BY SUCH  TAXPAYER,  AND  SUCH  DISPOSITION  OR  RECOVERY
   42  OCCURS  DURING  THE  TAXABLE  YEAR OR WITHIN FORTY-EIGHT MONTHS FROM THE
   43  CLOSE OF THE TAXABLE YEAR WITH RESPECT TO WHICH SUCH CREDIT IS  ALLOWED,
   44  THE  TAXPAYER  SHALL ADD BACK, WITH RESPECT TO THE TAXABLE YEAR IN WHICH
   45  THE DISPOSITION OR  RECOVERY  DESCRIBED  ABOVE  OCCURRED,  THE  REQUIRED
   46  PORTION OF THE CREDIT ORIGINALLY ALLOWED.
   47    (2)  WHERE A TAXPAYER SELLS, TRANSFERS OR OTHERWISE DISPOSES OF CORPO-
   48  RATE STOCK, A PARTNERSHIP INTEREST OR OTHER OWNERSHIP  INTEREST  ARISING
   49  FROM  THE MAKING OF A QUALIFIED INVESTMENT WHICH WAS THE BASIS, IN WHOLE
   50  OR IN PART, FOR THE ALLOWANCE OF THE CREDIT PROVIDED FOR UNDER  SUBPARA-
   51  GRAPH  TWO  OF PARAGRAPH (A) OF THIS SUBDIVISION, OR WHERE AN INVESTMENT
   52  WHICH WAS THE BASIS FOR SUCH ALLOWANCE IS IN ANY MANNER, IN WHOLE OR  IN
   53  PART,  RECOVERED  BY  SUCH  TAXPAYER,  AND  SUCH DISPOSITION OR RECOVERY
   54  OCCURS DURING THE TAXABLE YEAR OR WITHIN ONE HUNDRED EIGHT  MONTHS  FROM
   55  THE  CLOSE  OF  THE  TAXABLE  YEAR  WITH RESPECT TO WHICH SUCH CREDIT IS
   56  ALLOWED, THE TAXPAYER SHALL ADD BACK, WITH RESPECT TO THE  TAXABLE  YEAR
       S. 6359--D                         92                         A. 8559--D

    1  IN  WHICH  THE  DISPOSITION OR RECOVERY DESCRIBED IN SUBPARAGRAPH ONE OF
    2  THIS PARAGRAPH OCCURRED THE REQUIRED PORTION OF  THE  CREDIT  ORIGINALLY
    3  ALLOWED.
    4    (3) THE REQUIRED PORTION OF THE CREDIT ORIGINALLY ALLOWED SHALL BE THE
    5  PRODUCT  OF  (A) THE PORTION OF SUCH CREDIT ATTRIBUTABLE TO THE PROPERTY
    6  DISPOSED OF AND (B) THE APPLICABLE PERCENTAGE.
    7    (4) THE APPLICABLE PERCENTAGE SHALL BE:
    8    (A) FOR CREDITS ALLOWED PURSUANT TO SUBPARAGRAPH ONE OF PARAGRAPH  (A)
    9  OF THIS SUBDIVISION:
   10    (I)  ONE HUNDRED PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS WITHIN
   11  THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED  OR  WITHIN
   12  TWELVE MONTHS OF THE END OF SUCH TAXABLE YEAR,
   13    (II)  SEVENTY-FIVE PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS MORE
   14  THAN TWELVE BUT NOT MORE THAN TWENTY-FOUR MONTHS AFTER THE  END  OF  THE
   15  TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED,
   16    (III)  FIFTY  PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS MORE THAN
   17  TWENTY-FOUR MONTHS BUT NOT MORE THAN THIRTY-SIX MONTHS AFTER THE END  OF
   18  THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED, OR
   19    (IV)  TWENTY-FIVE  PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS MORE
   20  THAN THIRTY-SIX MONTHS BUT NOT MORE THAN FORTY-EIGHT  MONTHS  AFTER  THE
   21  END OF THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED; OR
   22    (B)  FOR CREDITS ALLOWED PURSUANT TO SUBPARAGRAPH TWO OF PARAGRAPH (A)
   23  OF THIS SUBDIVISION:
   24    (I) ONE HUNDRED PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS  WITHIN
   25  THE  TAXABLE  YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED OR WITHIN
   26  TWELVE MONTHS OF THE END OF SUCH TAXABLE YEAR,
   27    (II) EIGHTY PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS  MORE  THAN
   28  TWELVE BUT NOT MORE THAN FORTY-EIGHT MONTHS AFTER THE END OF THE TAXABLE
   29  YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED,
   30    (III)  SIXTY  PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS MORE THAN
   31  FORTY-EIGHT MONTHS BUT NOT MORE THAN SEVENTY-TWO MONTHS AFTER THE END OF
   32  THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED,
   33    (IV) FORTY PERCENT, IF THE DISPOSITION OR RECOVERY  OCCURS  MORE  THAN
   34  SEVENTY-TWO  MONTHS BUT NOT MORE THAN NINETY-SIX MONTHS AFTER THE END OF
   35  THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED, OR
   36    (V) TWENTY PERCENT, IF THE DISPOSITION OR RECOVERY  OCCURS  MORE  THAN
   37  NINETY-SIX  MONTHS  BUT NOT MORE THAN ONE HUNDRED EIGHT MONTHS AFTER THE
   38  END OF THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED.
   39    9. CREDIT FOR THE  SPECIAL  ADDITIONAL  MORTGAGE  RECORDING  TAX.  (A)
   40  APPLICATION OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE CRED-
   41  ITED AGAINST THE TAX IMPOSED BY THIS ARTICLE, EQUAL TO THE AMOUNT OF THE
   42  SPECIAL  ADDITIONAL MORTGAGE RECORDING TAX PAID BY THE TAXPAYER PURSUANT
   43  TO  THE  PROVISIONS  OF  SUBDIVISION  ONE-A  OF  SECTION   TWO   HUNDRED
   44  FIFTY-THREE OF THIS CHAPTER OR MORTGAGES RECORDED. PROVIDED, HOWEVER, NO
   45  CREDIT  SHALL  BE  ALLOWED  WITH  RESPECT TO A MORTGAGE OF REAL PROPERTY
   46  PRINCIPALLY IMPROVED OR  TO  BE  IMPROVED  BY  ONE  OR  MORE  STRUCTURES
   47  CONTAINING  IN  THE  AGGREGATE  NOT  MORE  THAN SIX RESIDENTIAL DWELLING
   48  UNITS, EACH DWELLING UNIT HAVING ITS OWN  SEPARATE  COOKING  FACILITIES,
   49  WHERE  THE  REAL  PROPERTY  IS  LOCATED  IN  ONE OR MORE OF THE COUNTIES
   50  COMPRISING  THE  METROPOLITAN  COMMUTER  TRANSPORTATION  AREA.  PROVIDED
   51  FURTHER,  HOWEVER, NO CREDIT SHALL BE ALLOWED WITH RESPECT TO A MORTGAGE
   52  OF REAL PROPERTY PRINCIPALLY IMPROVED OR TO BE IMPROVED BY ONE  OR  MORE
   53  STRUCTURES  CONTAINING  IN  THE  AGGREGATE NOT MORE THAN SIX RESIDENTIAL
   54  DWELLING UNITS, EACH DWELLING  UNIT  HAVING  ITS  OWN  SEPARATE  COOKING
   55  FACILITIES, WHERE THE REAL PROPERTY IS LOCATED IN THE COUNTY OF ERIE.
       S. 6359--D                         93                         A. 8559--D

    1    (B)  CARRYOVER.  IN  NO  EVENT SHALL THE CREDIT HEREIN PROVIDED FOR BE
    2  ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN  THE
    3  FIXED  DOLLAR  MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION
    4  ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. IF, HOWEVER, THE  AMOUNT
    5  OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR, INCLUD-
    6  ING  ANY  CREDIT CARRIED OVER FROM A PRIOR TAXABLE YEAR, REDUCES THE TAX
    7  TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE  FIXED
    8  DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXA-
    9  BLE  YEAR  MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE
   10  DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   11    10. CREDIT FOR SERVICING CERTAIN MORTGAGES. (A) GENERAL. EVERY TAXPAY-
   12  ER MEETING THE REQUIREMENTS OF THE STATE OF  NEW  YORK  MORTGAGE  AGENCY
   13  APPLICABLE  TO THE SERVICING OF MORTGAGES ACQUIRED BY SUCH AGENCY PURSU-
   14  ANT TO THE STATE OF NEW YORK  MORTGAGE  AGENCY  ACT,  WHICH  SHALL  HAVE
   15  ENTERED  INTO  A  CONTRACT WITH THE STATE OF NEW YORK MORTGAGE AGENCY TO
   16  SERVICE MORTGAGES ACQUIRED BY SUCH AGENCY PURSUANT TO THE STATE  OF  NEW
   17  YORK  MORTGAGE  AGENCY ACT, SHALL HAVE CREDITED TO IT ANNUALLY AN AMOUNT
   18  EQUAL TO TWO AND NINETY-THREE ONE HUNDREDTHS PER  CENTUM  OF  THE  TOTAL
   19  PRINCIPAL AND INTEREST COLLECTED BY THE TAXPAYER DURING ITS TAXABLE YEAR
   20  ON  EACH  SUCH  MORTGAGE  SECURED BY A LIEN ON REAL ESTATE IMPROVED BY A
   21  ONE-FAMILY TO FOUR-FAMILY RESIDENTIAL STRUCTURE AND AN AMOUNT  EQUAL  TO
   22  THE  INTEREST  COLLECTED BY THE TAXPAYER DURING ITS TAXABLE YEAR ON EACH
   23  SUCH MORTGAGE SECURED BY A LIEN ON REAL PROPERTY IMPROVED BY A STRUCTURE
   24  OCCUPIED AS THE RESIDENCE OF FIVE OR MORE FAMILIES LIVING  INDEPENDENTLY
   25  OF  EACH  OTHER, MULTIPLIED BY A FRACTION THE DENOMINATOR OF WHICH SHALL
   26  BE THE INTEREST RATE PAYABLE ON THE MORTGAGE (COMPUTED TO  FIVE  DECIMAL
   27  PLACES) AND THE NUMERATOR OF WHICH SHALL BE .00125 IN THE CASE OF SUCH A
   28  MORTGAGE  ACQUIRED BY SUCH AGENCY FOR LESS THAN ONE MILLION DOLLARS, AND
   29  .00100 IN THE CASE OF SUCH A MORTGAGE ACQUIRED BY SUCH  AGENCY  FOR  ONE
   30  MILLION DOLLARS OR MORE. IN NO EVENT SHALL THE CREDIT ALLOWED UNDER THIS
   31  SUBDIVISION  REDUCE THE TAX TO LESS THAN THE FIXED DOLLAR MINIMUM AMOUNT
   32  PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF  SECTION  TWO  HUNDRED
   33  TEN  OF  THIS ARTICLE. IN COMPUTING SUCH TAX CREDIT FOR THE SERVICING OF
   34  MORTGAGES ON  ONE-FAMILY  TO  FOUR-FAMILY  RESIDENTIAL  STRUCTURES,  THE
   35  TAXPAYER  SHALL NOT BE ENTITLED TO CREDIT FOR THE COLLECTION OF CURTAIL-
   36  MENT OR PAYMENTS IN DISCHARGE OF ANY SUCH MORTGAGE. FOR THE PURPOSES  OF
   37  THIS SUBDIVISION,
   38    (B)(I) A "CURTAILMENT" SHALL MEAN AMOUNTS PAID BY MORTGAGORS
   39    (A)  IN  EXCESS  OF  THE  MONTHLY  CONSTANT  DUE  DURING  THE MONTH OF
   40  COLLECTION AND
   41    (B) IN REDUCTION OF THE UNPAID PRINCIPAL BALANCE OF THE  MORTGAGE;  IN
   42  THE ABSENCE OF CLEAR EVIDENCE TO THE CONTRARY, AMOUNTS PAID IN EXCESS OF
   43  THE  MONTHLY CONSTANT DUE DURING THE MONTH OF COLLECTION SHALL BE DEEMED
   44  TO BE IN REDUCTION OF THE UNPAID PRINCIPAL BALANCE OF THE MORTGAGE; AND
   45    (II) "MONTHLY CONSTANT" SHALL MEAN THE AMOUNT OF PRINCIPAL AND  INTER-
   46  EST WHICH IS DUE AND PAYABLE ACCORDING TO THE MORTGAGE DOCUMENTS ON EACH
   47  PERIODIC PAYMENT DATE.
   48    11.  AGRICULTURAL  PROPERTY  TAX CREDIT. (A) GENERAL. IN THE CASE OF A
   49  TAXPAYER WHICH IS AN ELIGIBLE FARMER OR AN ELIGIBLE FARMER WHO HAS  PAID
   50  TAXES  PURSUANT  TO A LAND CONTRACT, THERE SHALL BE ALLOWED A CREDIT FOR
   51  THE ALLOWABLE SCHOOL DISTRICT PROPERTY TAXES. THE TERM "ALLOWABLE SCHOOL
   52  DISTRICT PROPERTY TAXES" MEANS THE SCHOOL DISTRICT PROPERTY  TAXES  PAID
   53  DURING  THE  TAXABLE YEAR ON QUALIFIED AGRICULTURAL PROPERTY, SUBJECT TO
   54  THE ACREAGE LIMITATION PROVIDED IN PARAGRAPH (E) OF THIS SUBDIVISION AND
   55  THE INCOME LIMITATION PROVIDED IN PARAGRAPH (F) OF THIS SUBDIVISION.
       S. 6359--D                         94                         A. 8559--D

    1    (B) ELIGIBLE FARMER.  FOR  PURPOSES  OF  THIS  SUBDIVISION,  THE  TERM
    2  "ELIGIBLE FARMER" MEANS A TAXPAYER WHOSE FEDERAL GROSS INCOME FROM FARM-
    3  ING  FOR THE TAXABLE YEAR IS AT LEAST TWO-THIRDS OF EXCESS FEDERAL GROSS
    4  INCOME. THE TERM "ELIGIBLE FARMER" ALSO  INCLUDES  A  CORPORATION  OTHER
    5  THAN  THE  TAXPAYER  OF RECORD FOR QUALIFIED AGRICULTURAL LAND WHICH HAS
    6  PAID THE SCHOOL DISTRICT PROPERTY TAXES  ON  SUCH  LAND  PURSUANT  TO  A
    7  CONTRACT FOR THE FUTURE PURCHASE OF SUCH LAND; PROVIDED THAT SUCH CORPO-
    8  RATION  HAS  A  FEDERAL  GROSS  INCOME FROM FARMING FOR THE TAXABLE YEAR
    9  WHICH IS AT  LEAST  TWO-THIRDS  OF  EXCESS  FEDERAL  GROSS  INCOME;  AND
   10  PROVIDED FURTHER THAT, IN DETERMINING SUCH INCOME ELIGIBILITY, A TAXPAY-
   11  ER  MAY,  FOR  ANY  TAXABLE  YEAR, USE THE AVERAGE OF SUCH FEDERAL GROSS
   12  INCOME FROM FARMING FOR THAT TAXABLE YEAR AND SUCH INCOME  FOR  THE  TWO
   13  CONSECUTIVE  TAXABLE  YEARS  IMMEDIATELY  PRECEDING  SUCH  TAXABLE YEAR.
   14  EXCESS FEDERAL GROSS INCOME MEANS THE AMOUNT  OF  FEDERAL  GROSS  INCOME
   15  FROM  ALL  SOURCES  FOR  THE  TAXABLE  YEAR IN EXCESS OF THIRTY THOUSAND
   16  DOLLARS. FOR THE PURPOSES OF THIS PARAGRAPH, PAYMENTS FROM  THE  STATE'S
   17  FARMLAND  PROTECTION PROGRAM, ADMINISTERED BY THE DEPARTMENT OF AGRICUL-
   18  TURE AND MARKETS, SHALL BE INCLUDED AS FEDERAL GROSS INCOME FROM FARMING
   19  FOR OTHERWISE ELIGIBLE FARMERS.
   20    (C) SCHOOL DISTRICT PROPERTY TAXES. FOR PURPOSES OF THIS  SUBDIVISION,
   21  THE  TERM  "SCHOOL  DISTRICT  PROPERTY  TAXES" MEANS ALL PROPERTY TAXES,
   22  SPECIAL AD VALOREM LEVIES AND SPECIAL ASSESSMENTS, EXCLUSIVE  OF  PENAL-
   23  TIES  AND INTEREST, LEVIED FOR SCHOOL DISTRICT PURPOSES ON THE QUALIFIED
   24  AGRICULTURAL PROPERTY OWNED BY THE TAXPAYER.
   25    (D) QUALIFIED AGRICULTURAL PROPERTY. FOR PURPOSES OF THIS SUBDIVISION,
   26  THE TERM "QUALIFIED AGRICULTURAL PROPERTY" MEANS LAND  LOCATED  IN  THIS
   27  STATE  WHICH  IS USED IN AGRICULTURAL PRODUCTION, AND LAND IMPROVEMENTS,
   28  STRUCTURES AND BUILDINGS (EXCLUDING BUILDINGS USED  FOR  THE  TAXPAYER'S
   29  RESIDENTIAL  PURPOSE) LOCATED ON SUCH LAND WHICH ARE USED OR OCCUPIED TO
   30  CARRY OUT SUCH PRODUCTION. QUALIFIED AGRICULTURAL PROPERTY ALSO INCLUDES
   31  LAND SET ASIDE OR RETIRED UNDER A  FEDERAL  SUPPLY  MANAGEMENT  OR  SOIL
   32  CONSERVATION  PROGRAM  OR  LAND THAT AT THE TIME IT BECOMES SUBJECT TO A
   33  CONSERVATION EASEMENT MET THE REQUIREMENTS UNDER THIS PARAGRAPH.
   34    (E) ACREAGE LIMITATION. (I) ELIGIBLE TAXES.  IN  THE  EVENT  THAT  THE
   35  QUALIFIED  AGRICULTURAL  PROPERTY OWNED BY THE TAXPAYER INCLUDES LAND IN
   36  EXCESS OF THE BASE ACREAGE AS PROVIDED IN THIS PARAGRAPH, THE AMOUNT  OF
   37  SCHOOL  DISTRICT  PROPERTY TAXES ELIGIBLE FOR CREDIT UNDER THIS SUBDIVI-
   38  SION SHALL BE THAT PORTION OF THE SCHOOL DISTRICT PROPERTY  TAXES  WHICH
   39  BEARS  THE  SAME  RATIO TO THE TOTAL SCHOOL DISTRICT PROPERTY TAXES PAID
   40  DURING THE TAXABLE YEAR, AS THE ACREAGE ALLOWABLE UNDER  THIS  PARAGRAPH
   41  BEARS TO THE ENTIRE ACREAGE OF SUCH LAND.
   42    (II)  ALLOWABLE  ACREAGE. THE ALLOWABLE ACREAGE IS THE SUM OF THE BASE
   43  ACREAGE SET FORTH BELOW AND FIFTY PERCENT OF  THE  INCREMENTAL  ACREAGE.
   44  THE INCREMENTAL ACREAGE IS THE EXCESS OF THE ENTIRE ACREAGE OF QUALIFIED
   45  AGRICULTURAL LAND OWNED BY THE TAXPAYER OVER THE BASE ACREAGE. EXCEPT AS
   46  PROVIDED  IN  SUBPARAGRAPH  (III) OF THIS PARAGRAPH, THE BASE ACREAGE IS
   47  THREE HUNDRED FIFTY ACRES.
   48  THE TOTAL BASE ACREAGE MAY BE  INCREASED  BY  ANY  ACREAGE  ENROLLED  OR
   49  PARTICIPATING DURING THE TAXABLE YEAR IN A FEDERAL ENVIRONMENTAL CONSER-
   50  VATION  ACREAGE  RESERVE  PROGRAM PURSUANT TO TITLE THREE OF THE FEDERAL
   51  AGRICULTURE IMPROVEMENT AND REFORM ACT OF NINETEEN HUNDRED NINETY-SIX.
   52    (III) BASE ACREAGE OF RELATED PERSONS. WHERE THE TAXPAYER AND  ONE  OR
   53  MORE  RELATED  PERSONS  EACH  OWN QUALIFIED AGRICULTURAL PROPERTY ON THE
   54  FIRST DAY OF MARCH OF ANY YEAR, THE BASE ACREAGE UNDER SUBPARAGRAPH (II)
   55  OF THIS PARAGRAPH SHALL  BE  DIVIDED  EQUALLY  AND  ALLOTTED  AMONG  THE
   56  TAXPAYER  AND  SUCH RELATED PERSONS, AND THE TAXPAYER'S BASE ACREAGE FOR
       S. 6359--D                         95                         A. 8559--D

    1  THE TAXABLE YEAR WHICH INCLUDES SUCH MARCH FIRST SHALL BE LIMITED TO ITS
    2  ALLOTTED SHARE. PROVIDED, HOWEVER, IF THE TAXPAYER AND ALL SUCH  RELATED
    3  PERSONS CONSENT (AT SUCH TIME AND IN SUCH MANNER AS THE COMMISSIONER MAY
    4  PRESCRIBE)  TO AN UNEQUAL DIVISION, THE TAXPAYER'S BASE ACREAGE FOR SUCH
    5  TAXABLE YEAR SHALL BE LIMITED TO ITS ALLOTTED SHARE UNDER  SUCH  UNEQUAL
    6  DIVISION.
    7    (IV)  RELATED  PERSONS. (A) FOR PURPOSES OF SUBPARAGRAPH (III) OF THIS
    8  PARAGRAPH, THE TERM "RELATED PERSON" MEANS:
    9    (I) A CORPORATION SUBJECT TO TAX UNDER THIS ARTICLE, WHERE THE TAXPAY-
   10  ER AND THE CORPORATION ARE MEMBERS OF  THE  SAME  CONTROLLED  GROUP,  AS
   11  DEFINED IN SECTION 267(F) OF THE INTERNAL REVENUE CODE;
   12    (II)  AN  INDIVIDUAL,  PARTNERSHIP,  ESTATE  OR TRUST, WHERE MORE THAN
   13  FIFTY PERCENT IN VALUE OF THE  OUTSTANDING  STOCK  OF  THE  TAXPAYER  IS
   14  OWNED,  DIRECTLY  OR INDIRECTLY, BY OR FOR SUCH INDIVIDUAL, PARTNERSHIP,
   15  ESTATE OR TRUST OR BY OR FOR THE GRANTOR OF SUCH TRUST;
   16    (III) A CORPORATION SUBJECT TO TAX UNDER THIS ARTICLE, OR  A  PARTNER-
   17  SHIP,  ESTATE  OR TRUST, IF THE SAME PERSON OWNS MORE THAN FIFTY PERCENT
   18  IN VALUE OF THE OUTSTANDING STOCK OF THE TAXPAYER AND  MORE  THAN  FIFTY
   19  PERCENT  IN  VALUE OF  THE OUTSTANDING STOCK OF THE CORPORATION, OR MORE
   20  THAN FIFTY PERCENT OF THE CAPITAL OR PROFITS INTEREST  IN  THE  PARTNER-
   21  SHIP,  OR  MORE  THAN  FIFTY  PERCENT  OF THE BENEFICIAL INTEREST IN THE
   22  ESTATE OR TRUST;
   23    (IV) A PARTNERSHIP, ESTATE  OR  TRUST  OF  WHICH  THE  TAXPAYER  OWNS,
   24  DIRECTLY  OR INDIRECTLY, MORE THAN FIFTY PERCENT OF THE CAPITAL, PROFITS
   25  OR BENEFICIAL INTEREST.
   26    (B) IN DETERMINING WHETHER A PERSON IS A  RELATED  PERSON  WITHIN  THE
   27  MEANING OF THIS SUBPARAGRAPH:
   28    (I)  STOCK  OWNED,  DIRECTLY  OR  INDIRECTLY, BY OR FOR A CORPORATION,
   29  PARTNERSHIP, ESTATE OR TRUST SHALL BE CONSIDERED AS BEING OWNED  PROPOR-
   30  TIONATELY BY OR FOR ITS SHAREHOLDERS, PARTNERS OR BENEFICIARIES;
   31    (II)  AN  INDIVIDUAL  SHALL  BE  CONSIDERED AS OWNING THE STOCK OWNED,
   32  DIRECTLY OR INDIRECTLY, BY OR FOR HIS SPOUSE;
   33    (III) STOCK CONSTRUCTIVELY OWNED BY A PERSON BY REASON OF THE APPLICA-
   34  TION OF ITEM (I) OF THIS CLAUSE SHALL, FOR THE PURPOSE OF APPLYING  ITEM
   35  (I) OR (II) OF THIS CLAUSE, BE TREATED AS ACTUALLY OWNED BY SUCH PERSON.
   36    (F)  INCOME  LIMITATION. (I) IN THE EVENT THAT THE MODIFIED ENTIRE NET
   37  INCOME OF THE TAXPAYER EXCEEDS TWO HUNDRED THOUSAND DOLLARS, THE  ALLOW-
   38  ABLE SCHOOL DISTRICT PROPERTY TAXES UNDER PARAGRAPH (A) OF THIS SUBDIVI-
   39  SION SHALL BE THE ELIGIBLE TAXES UNDER SUBPARAGRAPH (I) OF PARAGRAPH (E)
   40  OF  THIS SUBDIVISION REDUCED BY THE PRODUCT OF THE AMOUNT OF SUCH ELIGI-
   41  BLE TAXES AND A PERCENTAGE, SUCH PERCENTAGE TO BE DETERMINED  BY  MULTI-
   42  PLYING  ONE HUNDRED PERCENT BY A FRACTION, THE NUMERATOR OF WHICH IS THE
   43  LESSER OF ONE HUNDRED THOUSAND DOLLARS OR THE EXCESS OF  THE  TAXPAYER'S
   44  MODIFIED  ENTIRE  NET  INCOME  OVER TWO HUNDRED THOUSAND DOLLARS AND THE
   45  DENOMINATOR OF WHICH IS ONE HUNDRED THOUSAND DOLLARS.  FOR  PURPOSES  OF
   46  THE  PRECEDING  SENTENCE,  THE  TERM "ELIGIBLE TAXES", WHERE THE ACREAGE
   47  LIMITATION OF PARAGRAPH (E) OF THIS SUBDIVISION DOES  NOT  APPLY,  SHALL
   48  MEAN  THE  TOTAL  SCHOOL DISTRICT PROPERTY TAXES PAID DURING THE TAXABLE
   49  YEAR.
   50    (II) THE TERM "MODIFIED ENTIRE NET INCOME" MEANS THE ENTIRE NET INCOME
   51  FOR THE TAXABLE YEAR REDUCED BY THE AMOUNT OF  PRINCIPAL  PAID  ON  FARM
   52  INDEBTEDNESS DURING THE TAXABLE YEAR. THE TERM "FARM INDEBTEDNESS" MEANS
   53  DEBT INCURRED OR REFINANCED WHICH IS SECURED BY FARM PROPERTY, WHERE THE
   54  PROCEEDS  OF  THE  DEBT  ARE  DISBURSED FOR EXPENDITURES INCURRED IN THE
   55  BUSINESS OF FARMING.
       S. 6359--D                         96                         A. 8559--D

    1    (G) CARRYOVER. IN NO EVENT SHALL THE CREDIT PROVIDED HEREIN BE ALLOWED
    2  IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS  THAN  THE  FIXED
    3  DOLLAR  MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF
    4  SECTION TWO HUNDRED TEN OF THIS ARTICLE.  IF,  HOWEVER,  THE  AMOUNT  OF
    5  CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE
    6  TAX  TO  SUCH  AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE
    7  FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH
    8  TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND  MAY
    9  BE  DEDUCTED  FROM  THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. PROVIDED,
   10  HOWEVER, IN LIEU OF CARRYING OVER THE UNUSED PORTION OF SUCH CREDIT, THE
   11  TAXPAYER MAY ELECT TO TREAT SUCH UNUSED PORTION AS AN OVERPAYMENT OF TAX
   12  TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF  SECTION
   13  ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER EXCEPT THAT NO INTEREST SHALL BE
   14  PAID ON SUCH OVERPAYMENT.
   15    (H)  NONQUALIFIED  USE. (I) NO CREDIT IN CONVERSION YEAR. IN THE EVENT
   16  THAT QUALIFIED AGRICULTURAL PROPERTY IS CONVERTED  BY  THE  TAXPAYER  TO
   17  NONQUALIFIED  USE,  CREDIT  UNDER  THIS SUBDIVISION SHALL NOT BE ALLOWED
   18  WITH RESPECT TO SUCH PROPERTY FOR THE TAXABLE YEAR  OF  CONVERSION  (THE
   19  CONVERSION YEAR).
   20    (II)  CREDIT RECAPTURE. IF THE CONVERSION BY THE TAXPAYER OF QUALIFIED
   21  AGRICULTURAL PROPERTY TO NONQUALIFIED USE OCCURS DURING  THE  PERIOD  OF
   22  THE  TWO  TAXABLE  YEARS FOLLOWING THE TAXABLE YEAR FOR WHICH THE CREDIT
   23  UNDER THIS SUBDIVISION WAS FIRST CLAIMED WITH RESPECT TO SUCH  PROPERTY,
   24  THE  CREDIT  ALLOWED WITH RESPECT TO SUCH PROPERTY FOR THE TAXABLE YEARS
   25  PRIOR TO THE CONVERSION YEAR MUST BE ADDED BACK IN THE CONVERSION  YEAR.
   26  WHERE  THE PROPERTY CONVERTED INCLUDES LAND, AND WHERE THE CONVERSION IS
   27  OF ONLY A PORTION OF SUCH LAND, THE CREDIT ALLOWED WITH RESPECT  TO  THE
   28  PROPERTY  CONVERTED SHALL BE DETERMINED BY MULTIPLYING THE ENTIRE CREDIT
   29  UNDER THIS SUBDIVISION FOR THE TAXABLE YEARS  PRIOR  TO  THE  CONVERSION
   30  YEAR  BY A FRACTION, THE NUMERATOR OF WHICH IS THE ACREAGE CONVERTED AND
   31  THE DENOMINATOR OF WHICH IS THE ENTIRE ACREAGE OF SUCH LAND OWNED BY THE
   32  TAXPAYER IMMEDIATELY PRIOR TO THE CONVERSION.
   33    (III) EXCEPTION TO RECAPTURE.  SUBPARAGRAPH  (II)  OF  THIS  PARAGRAPH
   34  SHALL NOT APPLY TO THE CONVERSION OF PROPERTY WHERE THE CONVERSION IS BY
   35  REASON  OF  INVOLUNTARY  CONVERSION,  WITHIN  THE MEANING OF SECTION ONE
   36  THOUSAND THIRTY-THREE OF THE INTERNAL REVENUE CODE.
   37    (IV) CONVERSION TO NONQUALIFIED USE. FOR PURPOSES OF THIS PARAGRAPH, A
   38  SALE OR OTHER DISPOSITION OF QUALIFIED AGRICULTURAL PROPERTY ALONE SHALL
   39  NOT CONSTITUTE A CONVERSION TO A NONQUALIFIED USE.
   40    (I) SPECIAL RULES. FOR PURPOSES OF THIS SUBDIVISION, THE TERM "FEDERAL
   41  GROSS  INCOME  FROM  FARMING"  SHALL  INCLUDE  GROSS  INCOME  FROM   THE
   42  PRODUCTION OF MAPLE SYRUP, CIDER, CHRISTMAS TREES DERIVED FROM A MANAGED
   43  CHRISTMAS  TREE  OPERATION WHETHER DUG FOR TRANSPLANTING OR CUT FROM THE
   44  STUMP, OR FROM A COMMERCIAL  HORSE  BOARDING  OPERATION  AS  DEFINED  IN
   45  SUBDIVISION THIRTEEN OF SECTION THREE HUNDRED ONE OF THE AGRICULTURE AND
   46  MARKETS  LAW,  OR  FROM  THE SALE OF WINE FROM A LICENSED FARM WINERY AS
   47  PROVIDED FOR IN ARTICLE SIX OF THE ALCOHOLIC BEVERAGE  CONTROL  LAW,  OR
   48  FROM  THE  SALE  OF CIDER FROM A LICENSED FARM CIDERY AS PROVIDED FOR IN
   49  SECTION FIFTY-EIGHT-C OF THE ALCOHOLIC BEVERAGE CONTROL LAW.
   50    (J) ELECTION TO DEEM GROSS INCOME OF NEW YORK C CORPORATION TO  SHARE-
   51  HOLDERS.  FOR  PURPOSES  OF  THIS SUBDIVISION, FEDERAL GROSS INCOME FROM
   52  FARMING SHALL BE ZERO FOR ANY TAXABLE YEAR OF A NEW YORK  C  CORPORATION
   53  FOR WHICH THE ELECTION UNDER PARAGRAPH NINE OF SUBSECTION (N) OF SECTION
   54  SIX HUNDRED SIX OF THIS CHAPTER IS IN EFFECT.
   55    12.  CREDIT FOR EMPLOYMENT OF PERSONS WITH DISABILITIES. (A) ALLOWANCE
   56  OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS HERE-
       S. 6359--D                         97                         A. 8559--D

    1  INAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, FOR EMPLOYING
    2  WITHIN THE STATE A QUALIFIED EMPLOYEE.
    3    (B) QUALIFIED EMPLOYEE. A QUALIFIED EMPLOYEE IS AN INDIVIDUAL:
    4    (1) WHO IS CERTIFIED BY THE EDUCATION DEPARTMENT, OR IN THE CASE OF AN
    5  INDIVIDUAL  WHO  IS  BLIND  OR VISUALLY HANDICAPPED, BY THE STATE AGENCY
    6  RESPONSIBLE FOR PROVISION OF VOCATIONAL REHABILITATION SERVICES  TO  THE
    7  BLIND  AND VISUALLY HANDICAPPED: (I) AS A PERSON WITH A DISABILITY WHICH
    8  CONSTITUTES OR RESULTS IN A SUBSTANTIAL HANDICAP TO EMPLOYMENT AND  (II)
    9  AS  HAVING  COMPLETED  OR  AS RECEIVING SERVICES UNDER AN INDIVIDUALIZED
   10  WRITTEN REHABILITATION PLAN APPROVED  BY  THE  EDUCATION  DEPARTMENT  OR
   11  OTHER  STATE  AGENCY RESPONSIBLE FOR PROVIDING VOCATIONAL REHABILITATION
   12  SERVICES TO SUCH INDIVIDUAL; AND
   13    (2) WHO HAS WORKED ON A FULL-TIME BASIS FOR THE EMPLOYER WHO IS CLAIM-
   14  ING THE CREDIT FOR AT LEAST ONE HUNDRED  EIGHTY  DAYS  OR  FOUR  HUNDRED
   15  HOURS.
   16    (C)  AMOUNT  OF  CREDIT.  EXCEPT  AS PROVIDED IN PARAGRAPH (D) OF THIS
   17  SUBDIVISION, THE AMOUNT OF CREDIT SHALL BE THIRTY-FIVE  PERCENT  OF  THE
   18  FIRST  SIX THOUSAND DOLLARS IN QUALIFIED FIRST-YEAR WAGES EARNED BY EACH
   19  QUALIFIED EMPLOYEE. "QUALIFIED FIRST-YEAR WAGES"  MEANS  WAGES  PAID  OR
   20  INCURRED  BY THE TAXPAYER DURING THE TAXABLE YEAR TO QUALIFIED EMPLOYEES
   21  WHICH ARE ATTRIBUTABLE, WITH RESPECT TO ANY SUCH EMPLOYEE,  TO  SERVICES
   22  RENDERED  DURING THE ONE-YEAR PERIOD BEGINNING WITH THE DAY THE EMPLOYEE
   23  BEGINS WORK FOR THE TAXPAYER.
   24    (D) CREDIT WHERE FEDERAL WORK OPPORTUNITY  TAX  CREDIT  APPLIES.  WITH
   25  RESPECT TO ANY QUALIFIED EMPLOYEE WHOSE QUALIFIED FIRST-YEAR WAGES UNDER
   26  PARAGRAPH  (C)  OF THIS SUBDIVISION ALSO CONSTITUTE QUALIFIED FIRST-YEAR
   27  WAGES FOR PURPOSES OF THE WORK OPPORTUNITY  TAX  CREDIT  FOR  VOCATIONAL
   28  REHABILITATION REFERRALS UNDER SECTION FIFTY-ONE OF THE INTERNAL REVENUE
   29  CODE,  THE AMOUNT OF CREDIT UNDER  THIS SUBDIVISION SHALL BE THIRTY-FIVE
   30  PERCENT OF THE FIRST SIX THOUSAND DOLLARS IN QUALIFIED SECOND-YEAR WAGES
   31  EARNED BY EACH SUCH EMPLOYEE. "QUALIFIED SECOND-YEAR WAGES" MEANS  WAGES
   32  PAID  OR  INCURRED  BY THE TAXPAYER DURING THE TAXABLE YEAR TO QUALIFIED
   33  EMPLOYEES WHICH ARE ATTRIBUTABLE, WITH RESPECT TO ANY SUCH EMPLOYEE,  TO
   34  SERVICES  RENDERED  DURING  THE ONE-YEAR PERIOD BEGINNING ONE YEAR AFTER
   35  THE EMPLOYEE BEGINS WORK FOR THE TAXPAYER.
   36    (E) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXA-
   37  BLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR  TO  LESS  THAN  THE
   38  FIXED  DOLLAR  MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION
   39  ONE OF SECTION TWO HUNDRED TEN OF THIS CHAPTER. HOWEVER, IF  THE  AMOUNT
   40  OF  CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES
   41  THE TAX TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS  TAX  BASED  ON
   42  THE  FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN
   43  SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING  YEAR  OR  YEARS,
   44  AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   45    (F)  COORDINATION  WITH  FEDERAL  WORK  OPPORTUNITY  TAX  CREDIT.  THE
   46  PROVISIONS OF SECTION FIFTY-ONE AND FIFTY-TWO OF  THE  INTERNAL  REVENUE
   47  CODE,  AS SUCH SECTIONS APPLIED ON OCTOBER FIRST, NINETEEN HUNDRED NINE-
   48  TY-SIX, THAT APPLY TO THE FEDERAL WORK OPPORTUNITY TAX CREDIT FOR  VOCA-
   49  TIONAL  REHABILITATION  REFERRALS  SHALL  APPLY TO THE CREDIT UNDER THIS
   50  SUBDIVISION TO THE EXTENT THAT SUCH SECTIONS  ARE  CONSISTENT  WITH  THE
   51  SPECIFIC PROVISIONS OF THIS SUBDIVISION, PROVIDED THAT IN THE EVENT OF A
   52  CONFLICT THE PROVISIONS OF THIS SUBDIVISION SHALL CONTROL.
   53    13.  CREDIT  FOR  PURCHASE  OF  AN AUTOMATED EXTERNAL DEFIBRILLATOR. A
   54  TAXPAYER SHALL BE ALLOWED  A  CREDIT,  TO  BE  COMPUTED  AS  HEREINAFTER
   55  PROVIDED,  AGAINST  THE  TAX  IMPOSED BY THIS ARTICLE, FOR THE PURCHASE,
   56  OTHER THAN FOR RESALE, OF AN AUTOMATED EXTERNAL DEFIBRILLATOR,  AS  SUCH
       S. 6359--D                         98                         A. 8559--D

    1  TERM  IS  DEFINED  IN SECTION THREE THOUSAND-B OF THE PUBLIC HEALTH LAW.
    2  THE AMOUNT OF CREDIT SHALL BE THE COST  TO  THE  TAXPAYER  OF  AUTOMATED
    3  EXTERNAL  DEFIBRILLATORS  PURCHASED DURING THE TAXABLE YEAR, SUCH CREDIT
    4  NOT  TO EXCEED FIVE HUNDRED DOLLARS WITH RESPECT TO EACH UNIT PURCHASED.
    5  THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT
    6  REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE FIXED  DOLLAR  MINIMUM
    7  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO
    8  HUNDRED TEN OF THIS CHAPTER.
    9    14. CREDIT FOR PURCHASE OF LONG-TERM CARE INSURANCE.  (A)  GENERAL.  A
   10  TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTI-
   11  CLE  EQUAL TO TWENTY PERCENT OF THE PREMIUM PAID DURING THE TAXABLE YEAR
   12  FOR LONG-TERM CARE INSURANCE. IN ORDER TO QUALIFY FOR SUCH  CREDIT,  THE
   13  TAXPAYER'S PREMIUM PAYMENT MUST BE FOR THE PURCHASE OF OR FOR CONTINUING
   14  COVERAGE UNDER A LONG-TERM CARE INSURANCE POLICY THAT QUALIFIES FOR SUCH
   15  CREDIT  PURSUANT  TO  SECTION  ONE THOUSAND ONE HUNDRED SEVENTEEN OF THE
   16  INSURANCE LAW.
   17    (B) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY  YEAR
   18  SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE FIXED DOLLAR
   19  MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION
   20  TWO  HUNDRED  TEN  OF  THIS  ARTICLE.  IF, HOWEVER, THE AMOUNT OF CREDIT
   21  ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO
   22  SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX  BASED  ON  THE  FIXED
   23  DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXA-
   24  BLE  YEAR  MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE
   25  DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   26    15. LOW-INCOME HOUSING CREDIT. (A) ALLOWANCE  OF  CREDIT.  A  TAXPAYER
   27  SHALL  BE  ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE WITH
   28  RESPECT TO THE OWNERSHIP OF ELIGIBLE LOW-INCOME BUILDINGS,  COMPUTED  AS
   29  PROVIDED IN SECTION EIGHTEEN OF THIS CHAPTER.
   30    (B)  APPLICATION  OF  CREDIT. THE CREDIT AND CARRYOVERS OF SUCH CREDIT
   31  ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL  NOT,  IN  THE
   32  AGGREGATE,  REDUCE  THE  TAX  DUE  FOR  SUCH YEAR TO LESS THAN THE FIXED
   33  DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE  OF
   34  SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
   35  IT OR CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWED UNDER THIS SUBDIVISION
   36  FOR  ANY  TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT OR IF THE TAXPAYER
   37  OTHERWISE PAYS TAX BASED ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY  AMOUNT
   38  OF CREDIT OR CARRYOVERS OF SUCH CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXA-
   39  BLE  YEAR  MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE
   40  DEDUCTED FROM THE TAX FOR SUCH YEAR OR YEARS.
   41    (C) CREDIT RECAPTURE. FOR PROVISIONS REQUIRING  RECAPTURE  OF  CREDIT,
   42  SEE SUBDIVISION (B) OF SECTION EIGHTEEN OF THIS CHAPTER.
   43    16.  GREEN  BUILDING CREDIT. (A) ALLOWANCE OF CREDIT. A TAXPAYER SHALL
   44  BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION  NINETEEN  OF
   45  THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   46    (B) CARRYOVERS. THE CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED UNDER
   47  THIS  SUBDIVISION  FOR  ANY  TAXABLE  YEAR  SHALL NOT, IN THE AGGREGATE,
   48  REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE FIXED  DOLLAR  MINIMUM
   49  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO
   50  HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT OR  CARRY-
   51  OVERS  OF  SUCH  CREDIT, OR BOTH, ALLOWED UNDER THIS SUBDIVISION FOR ANY
   52  TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE
   53  PAYS TAX BASED ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF  CREDIT
   54  OR  CARRYOVERS  OF  SUCH CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR
   55  MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY  BE  DEDUCTED
   56  FROM THE TAX FOR SUCH YEAR OR YEARS.
       S. 6359--D                         99                         A. 8559--D

    1    17.  BROWNFIELD  REDEVELOPMENT  TAX CREDIT. (A) ALLOWANCE OF CREDIT. A
    2  TAXPAYER SHALL BE ALLOWED A  CREDIT,  TO  BE  COMPUTED  AS  PROVIDED  IN
    3  SECTION  TWENTY-ONE  OF  THIS  CHAPTER,  AGAINST THE TAX IMPOSED BY THIS
    4  ARTICLE.
    5    (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
    6  FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
    7  THAN  THE  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
    8  SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER,  IF
    9  THE  AMOUNT  OF  CREDITS  ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE
   10  YEAR REDUCES THE TAX TO SUCH AMOUNT OR IF THE  TAXPAYER  OTHERWISE  PAYS
   11  TAX  BASED ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS
   12  NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREATED AS  AN  OVERPAYMENT
   13  OF  TAX  TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF
   14  SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER,  THE
   15  PROVISIONS  OF  SUBSECTION  (C)  OF SECTION ONE THOUSAND EIGHTY-EIGHT OF
   16  THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   17    18. REMEDIATED BROWNFIELD CREDIT FOR REAL PROPERTY TAXES FOR QUALIFIED
   18  SITES. (A) ALLOWANCE OF CREDIT. A TAXPAYER WHICH IS  A  DEVELOPER  OF  A
   19  QUALIFIED  SITE  SHALL  BE  ALLOWED  A CREDIT FOR ELIGIBLE REAL PROPERTY
   20  TAXES, TO BE COMPUTED AS PROVIDED IN SUBDIVISION (B) OF SECTION  TWENTY-
   21  TWO  OF  THIS  CHAPTER,  AGAINST  THE  TAX  IMPOSED BY THIS ARTICLE. FOR
   22  PURPOSES OF THIS SUBDIVISION, THE TERMS "QUALIFIED SITE" AND "DEVELOPER"
   23  SHALL HAVE THE SAME MEANING AS SET FORTH IN PARAGRAPHS  TWO  AND  THREE,
   24  RESPECTIVELY, OF SUBDIVISION (A) OF SECTION TWENTY-TWO OF THIS CHAPTER.
   25    (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
   26  FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
   27  THAN  THE  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
   28  SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER,  IF
   29  THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR
   30  REDUCES  THE  TAX  TO  SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX
   31  BASED ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS  NOT
   32  DEDUCTIBLE  IN  SUCH  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF
   33  TAX TO BE CREDITED OR REFUNDED IN  ACCORDANCE  WITH  THE  PROVISIONS  OF
   34  SECTION  ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE
   35  PROVISIONS OF SUBSECTION (C) OF SECTION  ONE  THOUSAND  EIGHTY-EIGHT  OF
   36  THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   37    19. ENVIRONMENTAL REMEDIATION INSURANCE CREDIT. (A) ALLOWANCE OF CRED-
   38  IT.  A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN
   39  SECTION  TWENTY-THREE  OF  THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS
   40  ARTICLE.
   41    (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
   42  FOR  ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
   43  THAN THE FIXED DOLLAR MINIMUM AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF
   44  SUBDIVISION  ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF
   45  THE AMOUNT OF CREDITS ALLOWED UNDER THIS  SUBDIVISION  FOR  ANY  TAXABLE
   46  YEAR  REDUCES  THE  TAX TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS
   47  TAX BASED ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT  THUS
   48  NOT  DEDUCTIBLE  IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT
   49  OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE  PROVISIONS  OF
   50  SECTION  ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE
   51  PROVISIONS OF SUBSECTION (C) OF SECTION  ONE  THOUSAND  EIGHTY-EIGHT  OF
   52  THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   53    20.  EMPIRE  STATE  FILM PRODUCTION CREDIT. (A) ALLOWANCE OF CREDIT. A
   54  TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION TWENTY-FOUR OF THIS CHAPTER
   55  SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS  PROVIDED  IN  SUCH  SECTION
   56  TWENTY-FOUR AGAINST THE TAX IMPOSED BY THIS ARTICLE.
       S. 6359--D                         100                        A. 8559--D

    1    (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
    2  FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
    3  THAN  THE  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
    4  SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF  THIS  ARTICLE.  PROVIDED,
    5  HOWEVER,  THAT IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVI-
    6  SION FOR ANY TAXABLE YEAR REDUCES THE TAX  TO  SUCH  AMOUNT  OR  IF  THE
    7  TAXPAYER  OTHERWISE  PAYS  TAX BASED ON THE FIXED DOLLAR MINIMUM AMOUNT,
    8  THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE  CREDITED  OR
    9  REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
   10  EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
   11  SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
   12  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   13    21. SECURITY TRAINING TAX CREDIT. (A) ALLOWANCE OF CREDIT. A  TAXPAYER
   14  SHALL  BE  ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION TWEN-
   15  TY-SIX OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   16    (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
   17  FOR  ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
   18  THAN THE FIXED DOLLAR MINIMUM AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF
   19  SUBDIVISION  ONE OF SECTION TWO HUNDRED TEN OF THIS CHAPTER. HOWEVER, IF
   20  THE AMOUNT OF CREDITS ALLOWED UNDER THIS  SUBDIVISION  FOR  ANY  TAXABLE
   21  YEAR  REDUCES  THE  TAX TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS
   22  TAX BASED ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT  THUS
   23  NOT  DEDUCTIBLE  IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT
   24  OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE  PROVISIONS  OF
   25  SECTION  ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE
   26  PROVISIONS OF SUBSECTION (C) OF SECTION  ONE  THOUSAND  EIGHTY-EIGHT  OF
   27  THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   28    22.  CONSERVATION EASEMENT TAX CREDIT. (A) CREDIT ALLOWED. IN THE CASE
   29  OF A TAXPAYER WHO OWNS LAND THAT IS SUBJECT TO A  CONSERVATION  EASEMENT
   30  HELD  BY A PUBLIC OR PRIVATE CONSERVATION AGENCY, THERE SHALL BE ALLOWED
   31  A CREDIT FOR TWENTY-FIVE PERCENT OF THE ALLOWABLE SCHOOL DISTRICT, COUN-
   32  TY AND TOWN REAL PROPERTY TAXES ON SUCH LAND. IN NO SUCH CASE SHALL  THE
   33  CREDIT  ALLOWED  UNDER  THIS  SUBDIVISION  IN COMBINATION WITH ANY OTHER
   34  CREDIT FOR SUCH SCHOOL DISTRICT, COUNTY AND  TOWN  REAL  PROPERTY  TAXES
   35  UNDER THIS SECTION EXCEED SUCH TAXES.
   36    (B)  CONSERVATION EASEMENT. FOR PURPOSES OF THIS SUBDIVISION, THE TERM
   37  "CONSERVATION EASEMENT" MEANS A  PERPETUAL  AND  PERMANENT  CONSERVATION
   38  EASEMENT AS DEFINED IN ARTICLE FORTY-NINE OF THE ENVIRONMENTAL CONSERVA-
   39  TION  LAW  THAT SERVES TO PROTECT OPEN SPACE, SCENIC, NATURAL RESOURCES,
   40  BIODIVERSITY,  AGRICULTURAL,  WATERSHED  AND/OR  HISTORIC   PRESERVATION
   41  RESOURCES.  ANY  CONSERVATION EASEMENT FOR WHICH A TAX CREDIT IS CLAIMED
   42  UNDER THIS SUBDIVISION SHALL BE FILED WITH THE  DEPARTMENT  OF  ENVIRON-
   43  MENTAL  CONSERVATION, AS PROVIDED FOR IN ARTICLE FORTY-NINE OF THE ENVI-
   44  RONMENTAL CONSERVATION LAW AND SUCH CONSERVATION EASEMENT  SHALL  COMPLY
   45  WITH  THE  PROVISIONS OF TITLE THREE OF SUCH ARTICLE, AND THE PROVISIONS
   46  OF SUBDIVISION (H) OF SECTION 170 OF THE INTERNAL  REVENUE  CODE.  DEDI-
   47  CATIONS  OF  LAND  FOR  OPEN SPACE THROUGH THE EXECUTION OF CONSERVATION
   48  EASEMENTS FOR THE PURPOSE OF FULFILLING DENSITY REQUIREMENTS  TO  OBTAIN
   49  SUBDIVISION  OR  BUILDING PERMITS SHALL NOT BE CONSIDERED A CONSERVATION
   50  EASEMENT UNDER THIS SUBDIVISION.
   51    (C) LAND. FOR PURPOSES OF THIS SUBDIVISION, THE TERM  "LAND"  MEANS  A
   52  FEE SIMPLE TITLE TO REAL PROPERTY LOCATED IN THIS STATE, WITH OR WITHOUT
   53  IMPROVEMENTS  THEREON;  RIGHTS  OF WAY; WATER AND RIPARIAN RIGHTS; EASE-
   54  MENTS; PRIVILEGES AND ALL OTHER RIGHTS  OR  INTERESTS  OF  ANY  LAND  OR
   55  DESCRIPTION  IN,  RELATING TO OR CONNECTED WITH REAL PROPERTY, EXCLUDING
   56  BUILDINGS, STRUCTURES, OR IMPROVEMENTS.
       S. 6359--D                         101                        A. 8559--D

    1    (D) PUBLIC OR PRIVATE CONSERVATION AGENCY. FOR PURPOSES OF THIS SUBDI-
    2  VISION, THE TERM "PUBLIC  OR  PRIVATE  CONSERVATION  AGENCY"  MEANS  ANY
    3  STATE,  LOCAL, OR FEDERAL GOVERNMENTAL BODY; OR ANY PRIVATE NOT-FOR-PRO-
    4  FIT CHARITABLE CORPORATION OR TRUST WHICH IS AUTHORIZED TO  DO  BUSINESS
    5  IN  THE STATE OF NEW YORK, IS ORGANIZED AND OPERATED TO PROTECT LAND FOR
    6  NATURAL RESOURCES, CONSERVATION OR HISTORIC  PRESERVATION  PURPOSES,  IS
    7  EXEMPT  FROM  FEDERAL  INCOME  TAXATION  UNDER  SECTION 501(C)(3) OF THE
    8  INTERNAL REVENUE CODE, AND HAS THE POWER TO ACQUIRE, HOLD  AND  MAINTAIN
    9  LAND AND/OR INTERESTS IN LAND FOR SUCH PURPOSES.
   10    (E) CREDIT LIMITATION. THE AMOUNT OF THE CREDIT THAT MAY BE CLAIMED BY
   11  A  TAXPAYER  PURSUANT  TO THIS SUBSECTION SHALL NOT EXCEED FIVE THOUSAND
   12  DOLLARS IN ANY GIVEN YEAR.
   13    (F) APPLICATION OF THE CREDIT. THE CREDIT ALLOWED UNDER THIS  SUBDIVI-
   14  SION  FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO
   15  LESS THAN THE FIXED DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
   16  SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER,  IF
   17  THE  AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE
   18  YEAR REDUCES THE TAX TO SUCH AMOUNT OR IF THE  TAXPAYER  OTHERWISE  PAYS
   19  TAX  BASED  ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF THE CREDIT
   20  THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAY-
   21  MENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS
   22  OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS  CHAPTER,
   23  EXCEPT THAT, NO INTEREST SHALL BE PAID THEREON.
   24    23.  EMPIRE STATE COMMERCIAL PRODUCTION CREDIT. (A) ALLOWANCE OF CRED-
   25  IT.  A TAXPAYER THAT IS ELIGIBLE PURSUANT TO PROVISIONS OF SECTION TWEN-
   26  TY-EIGHT OF THIS CHAPTER SHALL BE ALLOWED A CREDIT  TO  BE  COMPUTED  AS
   27  PROVIDED IN SUCH SECTION AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   28    (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
   29  FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
   30  THAN  THE  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
   31  SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF  THIS  ARTICLE.  PROVIDED,
   32  HOWEVER,  THAT IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVI-
   33  SION FOR ANY TAXABLE YEAR REDUCES THE TAX  TO  SUCH  AMOUNT  OR  IF  THE
   34  TAXPAYER  OTHERWISE  PAYS  TAX BASED ON THE FIXED DOLLAR MINIMUM AMOUNT,
   35  FIFTY PERCENT OF THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO
   36  BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE
   37  THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER,  THE  PROVISIONS
   38  OF  SUBSECTION  (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
   39  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON. THE BALANCE OF  SUCH
   40  CREDIT NOT CREDITED OR REFUNDED IN SUCH TAXABLE YEAR MAY BE CARRIED OVER
   41  TO  THE IMMEDIATELY SUCCEEDING TAXABLE YEAR AND MAY BE DEDUCTED FROM THE
   42  TAXPAYER'S TAX FOR SUCH YEAR. THE EXCESS, IF ANY, OF THE AMOUNT OF CRED-
   43  IT OVER THE TAX FOR SUCH SUCCEEDING YEAR SHALL BE TREATED AS AN OVERPAY-
   44  MENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS
   45  OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER.  PROVIDED,  HOWEVER,
   46  THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF
   47  THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   48    (C)  EXPIRATION  OF  CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
   49  SHALL NOT BE APPLICABLE TO TAXABLE YEARS BEGINNING ON OR AFTER  DECEMBER
   50  THIRTY-FIRST, TWO THOUSAND SEVENTEEN.
   51    24.  BIOFUEL  PRODUCTION  CREDIT.  (A)  GENERAL.  A  TAXPAYER SHALL BE
   52  ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION TWENTY-EIGHT  OF
   53  THIS  CHAPTER  ADDED  AS  PART X OF CHAPTER SIXTY-TWO OF THE LAWS OF TWO
   54  THOUSAND SIX, AGAINST THE  TAX  IMPOSED  BY  THIS  ARTICLE.  THE  CREDIT
   55  ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE
   56  TAX  DUE  FOR  SUCH  YEAR  TO  LESS THAN THE FIXED DOLLAR MINIMUM AMOUNT
       S. 6359--D                         102                        A. 8559--D

    1  PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF  SECTION  TWO  HUNDRED
    2  TEN  OF  THIS  ARTICLE.   HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER
    3  THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT  OR
    4  IF  THE  TAXPAYER  OTHERWISE  PAYS TAX BASED ON THE FIXED DOLLAR MINIMUM
    5  AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN  SUCH  TAXABLE  YEAR
    6  SHALL  BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN
    7  ACCORDANCE WITH THE PROVISIONS OF SECTION  ONE  THOUSAND  EIGHTY-SIX  OF
    8  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE PROVISIONS OF SUBSECTION (C) OF
    9  SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS  CHAPTER  NOTWITHSTANDING,  NO
   10  INTEREST  SHALL BE PAID THEREON. THE TAX CREDIT ALLOWED PURSUANT TO THIS
   11  SECTION SHALL APPLY TO TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO
   12  THOUSAND TWENTY.
   13    25. CLEAN HEATING FUEL  CREDIT.  (A)  GENERAL.  A  TAXPAYER  SHALL  BE
   14  ALLOWED  A  CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE. SUCH CREDIT,
   15  TO BE COMPUTED AS HEREINAFTER PROVIDED, SHALL BE  ALLOWED  FOR  BIOHEAT,
   16  USED  FOR SPACE HEATING OR HOT WATER PRODUCTION FOR RESIDENTIAL PURPOSES
   17  WITHIN THIS STATE PURCHASED BEFORE JANUARY FIRST,  TWO  THOUSAND  SEVEN-
   18  TEEN.  SUCH CREDIT SHALL BE $0.01 PER PERCENT OF BIODIESEL PER GALLON OF
   19  BIOHEAT, NOT TO EXCEED  TWENTY  CENTS  PER  GALLON,  PURCHASED  BY  SUCH
   20  TAXPAYER.
   21    (B) DEFINITIONS. FOR PURPOSES OF THIS SUBDIVISION, THE FOLLOWING DEFI-
   22  NITIONS SHALL APPLY:
   23    (I)  "BIODIESEL" SHALL MEAN A FUEL COMPRISED EXCLUSIVELY OF MONO-ALKYL
   24  ESTERS OF LONG CHAIN FATTY ACIDS DERIVED FROM VEGETABLE OILS  OR  ANIMAL
   25  FATS, DESIGNATED B100, WHICH MEETS THE SPECIFICATIONS OF AMERICAN SOCIE-
   26  TY OF TESTING AND MATERIALS DESIGNATION D 6751.
   27    (II)  "BIOHEAT"  SHALL MEAN A FUEL COMPRISED OF BIODIESEL BLENDED WITH
   28  CONVENTIONAL HOME HEATING OIL, WHICH MEETS  THE  SPECIFICATIONS  OF  THE
   29  AMERICAN SOCIETY OF TESTING AND MATERIALS DESIGNATION D 396 OR D 975.
   30    (C)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
   31  FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
   32  THAN  THE  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
   33  SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER,  IF
   34  THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR
   35  REDUCES  THE  TAX  TO  SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX
   36  BASED ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS  NOT
   37  DEDUCTIBLE  IN  SUCH  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF
   38  TAX TO BE CREDITED OR REFUNDED IN  ACCORDANCE  WITH  THE  PROVISIONS  OF
   39  SECTION  ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE
   40  PROVISIONS OF SUBSECTION (C) OF SECTION  ONE  THOUSAND  EIGHTY-EIGHT  OF
   41  THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   42    26.  CREDIT FOR REHABILITATION OF HISTORIC PROPERTIES. (A) APPLICATION
   43  OF CREDIT. (I) FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,
   44  TWO  THOUSAND  TEN,  AND  BEFORE  JANUARY  FIRST, TWO THOUSAND TWENTY, A
   45  TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED, AGAINST  THE
   46  TAX  IMPOSED  BY THIS ARTICLE, IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT
   47  OF THE AMOUNT OF CREDIT ALLOWED THE TAXPAYER FOR THE SAME  TAXABLE  YEAR
   48  WITH  RESPECT  TO A CERTIFIED HISTORIC STRUCTURE UNDER SUBSECTION (C)(2)
   49  OF SECTION 47 OF THE INTERNAL REVENUE CODE WITH RESPECT TO  A  CERTIFIED
   50  HISTORIC  STRUCTURE  LOCATED  WITHIN  THE  STATE. PROVIDED, HOWEVER, THE
   51  CREDIT SHALL NOT EXCEED FIVE MILLION DOLLARS.
   52    (II) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOU-
   53  SAND  TWENTY,  A  TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT AS HEREINAFTER
   54  PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT EQUAL TO
   55  THIRTY PERCENT OF THE AMOUNT OF CREDIT ALLOWED THE TAXPAYER FOR THE SAME
   56  TAXABLE YEAR WITH  RESPECT  TO  A  CERTIFIED  HISTORIC  STRUCTURE  UNDER
       S. 6359--D                         103                        A. 8559--D

    1  SUBSECTION  (C)(3)  OF  SECTION  47  OF  THE  INTERNAL REVENUE CODE WITH
    2  RESPECT TO A CERTIFIED HISTORIC  STRUCTURE  LOCATED  WITHIN  THE  STATE.
    3  PROVIDED,  HOWEVER,  THE  CREDIT  SHALL  NOT EXCEED ONE HUNDRED THOUSAND
    4  DOLLARS.
    5    (B)  IF THE TAXPAYER IS A PARTNER IN A PARTNERSHIP OR A SHAREHOLDER IN
    6  A NEW YORK S CORPORATION, THEN THE CREDIT CAPS IMPOSED  IN  SUBPARAGRAPH
    7  (A)  OF THIS PARAGRAPH SHALL BE APPLIED AT THE ENTITY LEVEL, SO THAT THE
    8  AGGREGATE CREDIT ALLOWED TO ALL THE PARTNERS  OR  SHAREHOLDERS  OF  EACH
    9  SUCH  ENTITY  IN THE TAXABLE YEAR DOES NOT EXCEED THE CREDIT CAP THAT IS
   10  APPLICABLE IN THAT TAXABLE YEAR.
   11    (B) TAX CREDITS ALLOWED PURSUANT TO THIS SUBDIVISION SHALL BE  ALLOWED
   12  IN  THE  TAXABLE  YEAR  THAT  THE  QUALIFIED REHABILITATION IS PLACED IN
   13  SERVICE UNDER SECTION 167 OF THE FEDERAL INTERNAL REVENUE CODE.
   14    (C) IF THE CREDIT ALLOWED THE TAXPAYER PURSUANT TO SECTION 47  OF  THE
   15  INTERNAL  REVENUE  CODE  WITH  RESPECT  TO A QUALIFIED REHABILITATION IS
   16  RECAPTURED PURSUANT TO SUBSECTION (A) OF  SECTION  50  OF  THE  INTERNAL
   17  REVENUE CODE, A PORTION OF THE CREDIT ALLOWED UNDER THIS SUBSECTION MUST
   18  BE ADDED BACK IN THE SAME TAXABLE YEAR AND IN THE SAME PROPORTION AS THE
   19  FEDERAL CREDIT.
   20    (D)  THE  CREDIT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR
   21  SHALL NOT REDUCE THE TAX DUE FOR SUCH  YEAR  TO  LESS  THAN  THE  AMOUNT
   22  PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO HUNDRED
   23  TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF THE CREDIT ALLOWED  UNDER
   24  THIS  SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT OR
   25  IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON  THE  FIXED  DOLLAR  MINIMUM
   26  AMOUNT,  ANY  AMOUNT  OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR
   27  SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE RECREDITED  OR  REFUNDED
   28  IN  ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF
   29  THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS  OF  SUBSECTION  (C)  OF
   30  SECTION  ONE  THOUSAND  EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO
   31  INTEREST SHALL BE PAID THEREON.
   32    (E) TO BE ELIGIBLE FOR THE CREDIT ALLOWABLE  UNDER  THIS  SUBDIVISION,
   33  THE REHABILITATION PROJECT SHALL BE IN WHOLE OR IN PART LOCATED WITHIN A
   34  CENSUS  TRACT  WHICH  IS  IDENTIFIED  AS  BEING  AT OR BELOW ONE HUNDRED
   35  PERCENT OF THE STATE MEDIAN FAMILY INCOME AS CALCULATED  AS  OF  JANUARY
   36  FIRST  OF  EACH  YEAR  USING THE MOST RECENT FIVE YEAR ESTIMATE FROM THE
   37  AMERICAN COMMUNITY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU.
   38    27. CREDITS OF NEW YORK S CORPORATIONS. (A)  GENERAL.  NOTWITHSTANDING
   39  THE  PROVISIONS  OF  THIS SECTION, NO CARRYOVER OF CREDIT ALLOWABLE IN A
   40  NEW YORK C YEAR SHALL BE DEDUCTED FROM THE TAX OTHERWISE DUE UNDER  THIS
   41  ARTICLE  IN  A  NEW YORK S YEAR, AND NO CREDIT ALLOWABLE IN A NEW YORK S
   42  YEAR, OR CARRYOVER OF SUCH  CREDIT,  SHALL  BE  DEDUCTED  FROM  THE  TAX
   43  IMPOSED BY THIS ARTICLE.  HOWEVER, A NEW YORK S YEAR SHALL BE TREATED AS
   44  A  TAXABLE  YEAR FOR PURPOSES OF DETERMINING THE NUMBER OF TAXABLE YEARS
   45  TO WHICH A CREDIT MAY BE CARRIED OVER UNDER THIS SECTION.  NOTWITHSTAND-
   46  ING  THE FIRST SENTENCE OF THIS SUBDIVISION, HOWEVER, THE CREDIT FOR THE
   47  SPECIAL ADDITIONAL MORTGAGE RECORDING TAX SHALL BE ALLOWED  AS  PROVIDED
   48  IN  SUBDIVISION  FIFTEEN  OF THIS SECTION, AND THE CARRYOVER OF ANY SUCH
   49  CREDIT SHALL BE DETERMINED WITHOUT  REGARD  TO  WHETHER  THE  CREDIT  IS
   50  CARRIED FROM A NEW YORK C YEAR TO A NEW YORK S YEAR OR VICE-VERSA.
   51    29.  HIRE  A  VET  CREDIT.  (A) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS
   52  BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND  FIFTEEN  AND  BEFORE
   53  JANUARY  FIRST,  TWO  THOUSAND  SEVENTEEN, A TAXPAYER SHALL BE ALLOWED A
   54  CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBDIVISION, AGAINST THE  TAX
   55  IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE
   56  YEAR  AND  FOR  NOT  LESS  THAN THIRTY-FIVE HOURS EACH WEEK, A QUALIFIED
       S. 6359--D                         104                        A. 8559--D

    1  VETERAN WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE  YEAR
    2  IN  WHICH  THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT BY THE
    3  TAXPAYER. IF THE TAXPAYER CLAIMS THE CREDIT ALLOWED UNDER THIS  SUBDIVI-
    4  SION, THE TAXPAYER MAY NOT USE THE HIRING OF A QUALIFIED VETERAN THAT IS
    5  THE BASIS FOR THIS CREDIT IN THE BASIS OF ANY OTHER CREDIT ALLOWED UNDER
    6  THIS ARTICLE.
    7    (B) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL:
    8    (1)  WHO  SERVED  ON  ACTIVE DUTY IN THE UNITED STATES ARMY, NAVY, AIR
    9  FORCE, MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO  SERVED
   10  IN  ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE ARMY
   11  NATIONAL GUARD, AIR NATIONAL GUARD, NEW YORK GUARD  OR  NEW  YORK  NAVAL
   12  MILITIA;  WHO  WAS  RELEASED  FROM  ACTIVE  DUTY BY GENERAL OR HONORABLE
   13  DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE;
   14    (2) WHO COMMENCES EMPLOYMENT BY THE QUALIFIED  TAXPAYER  ON  OR  AFTER
   15  JANUARY  FIRST,  TWO  THOUSAND  FOURTEEN,  AND BEFORE JANUARY FIRST, TWO
   16  THOUSAND SIXTEEN; AND
   17    (3) WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY,  THAT
   18  HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY
   19  WEEK  IN  THE  ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR TO HIS OR
   20  HER EMPLOYMENT BY THE TAXPAYER.
   21    (C) EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN  EMPLOYEE
   22  AND  HIRE  A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF QUALIFYING FOR
   23  THIS CREDIT.
   24    (D) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF
   25  THE TOTAL AMOUNT OF WAGES PAID  TO  THE  QUALIFIED  VETERAN  DURING  THE
   26  VETERAN'S FIRST FULL YEAR OF EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE
   27  QUALIFIED  VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B) OF
   28  SUBDIVISION ONE OF SECTION EIGHTY-FIVE OF THE  CIVIL  SERVICE  LAW,  THE
   29  AMOUNT  OF  THE  CREDIT  SHALL BE FIFTEEN PERCENT OF THE TOTAL AMOUNT OF
   30  WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR
   31  OF EMPLOYMENT. THE CREDIT ALLOWED PURSUANT TO THIS SUBDIVISION SHALL NOT
   32  EXCEED IN ANY TAXABLE YEAR, FIVE  THOUSAND  DOLLARS  FOR  ANY  QUALIFIED
   33  VETERAN  AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS A
   34  DISABLED VETERAN.
   35    (E) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXA-
   36  BLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR  TO  LESS  THAN  THE
   37  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO
   38  HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT  ALLOWABLE
   39  UNDER  THIS  SUBDIVISION  FOR  ANY  TAXABLE YEAR REDUCES THE TAX TO SUCH
   40  AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE  FIXED  DOLLAR
   41  MINIMUM AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR
   42  MAY  BE  CARRIED  OVER  TO THE FOLLOWING THREE YEARS AND MAY BE DEDUCTED
   43  FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   44    30. ALTERNATIVE FUELS AND ELECTRIC VEHICLE RECHARGING PROPERTY CREDIT.
   45  (A) GENERAL. A TAXPAYER SHALL BE ALLOWED A CREDIT,  TO  BE  COMPUTED  AS
   46  HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR ALTER-
   47  NATIVE  FUEL  VEHICLE REFUELING AND ELECTRIC VEHICLE RECHARGING PROPERTY
   48  PLACED IN SERVICE DURING THE TAXABLE YEAR.
   49    (B) ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY AND  ELECTRIC  VEHICLE
   50  RECHARGING  PROPERTY.  THE CREDIT UNDER THIS SUBDIVISION FOR ALTERNATIVE
   51  FUEL VEHICLE REFUELING PROPERTY AND ELECTRIC VEHICLE RECHARGING PROPERTY
   52  SHALL EQUAL FOR EACH INSTALLATION OF PROPERTY THE LESSER OF  FIVE  THOU-
   53  SAND DOLLARS OR FIFTY PERCENT OF THE COST OF ANY SUCH PROPERTY:
   54    (I) WHICH IS LOCATED IN THIS STATE;
   55    (II)  WHICH CONSTITUTES ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY OR
   56  ELECTRIC VEHICLE RECHARGING PROPERTY; AND
       S. 6359--D                         105                        A. 8559--D

    1    (III) FOR WHICH NONE OF THE COST HAS BEEN PAID FOR FROM  THE  PROCEEDS
    2  OF  GRANTS, INCLUDING GRANTS FROM THE NEW YORK STATE ENERGY RESEARCH AND
    3  DEVELOPMENT AUTHORITY OR THE NEW YORK POWER AUTHORITY.
    4    (C)  DEFINITIONS.  (I)  THE  TERM  "ALTERNATIVE FUEL VEHICLE REFUELING
    5  PROPERTY" MEANS ALL OF THE EQUIPMENT NEEDED  TO  DISPENSE  ANY  FUEL  AT
    6  LEAST EIGHTY-FIVE PERCENT OF THE VOLUME OF WHICH CONSISTS OF ONE OR MORE
    7  OF THE FOLLOWING: NATURAL GAS, LIQUIFIED NATURAL GAS, LIQUIFIED PETROLE-
    8  UM, OR HYDROGEN.
    9    (II)  THE TERM "ELECTRIC VEHICLE RECHARGING PROPERTY" MEANS ALL OF THE
   10  EQUIPMENT NEEDED TO CONVEY ELECTRIC POWER  FROM  THE  ELECTRIC  GRID  OR
   11  ANOTHER POWER SOURCE TO AN ONBOARD VEHICLE ENERGY STORAGE SYSTEM.
   12    (D) CARRYOVERS. IN NO EVENT SHALL THE CREDIT UNDER THIS SUBDIVISION BE
   13  ALLOWED  IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN THE
   14  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION  ONE  OF  SECTION  TWO
   15  HUNDRED  TEN  OF  THIS ARTICLE. PROVIDED, HOWEVER, THAT IF THE AMOUNT OF
   16  CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE
   17  TAX TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX  BASED  ON  THE
   18  FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH
   19  TAXABLE  YEAR MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY
   20  BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   21    (E) CREDIT RECAPTURE. IF, AT ANY TIME BEFORE THE END OF  ITS  RECOVERY
   22  PERIOD,  ALTERNATIVE FUEL VEHICLE REFUELING OR ELECTRIC VEHICLE RECHARG-
   23  ING PROPERTY CEASES TO BE QUALIFIED, A RECAPTURE AMOUNT  MUST  BE  ADDED
   24  BACK IN THE YEAR IN WHICH SUCH CESSATION OCCURS.
   25    (I)  ALTERNATIVE  FUEL  VEHICLE REFUELING PROPERTY OR ELECTRIC VEHICLE
   26  RECHARGING PROPERTY CEASES TO BE QUALIFIED IF:
   27    (I) THE PROPERTY NO LONGER QUALIFIES AS ALTERNATIVE FUEL VEHICLE REFU-
   28  ELING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY; OR
   29    (II) FIFTY PERCENT OR MORE OF THE USE OF THE  PROPERTY  IN  A  TAXABLE
   30  YEAR IS OTHER THAN IN A TRADE OR BUSINESS IN THIS STATE; OR
   31    (III)  THE  TAXPAYER RECEIVING THE CREDIT UNDER THIS SUBDIVISION SELLS
   32  OR DISPOSES OF THE PROPERTY AND KNOWS OR HAS REASON  TO  KNOW  THAT  THE
   33  PROPERTY  WILL  BE USED IN A MANNER DESCRIBED IN CLAUSES (I) AND (II) OF
   34  THIS SUBPARAGRAPH.
   35    (II) RECAPTURE AMOUNT. THE RECAPTURE AMOUNT IS  EQUAL  TO  THE  CREDIT
   36  ALLOWABLE UNDER THIS SUBDIVISION MULTIPLIED BY A FRACTION, THE NUMERATOR
   37  OF  WHICH IS THE TOTAL RECOVERY PERIOD FOR THE PROPERTY MINUS THE NUMBER
   38  OF RECOVERY YEARS PRIOR TO, BUT NOT INCLUDING, THE RECAPTURE  YEAR,  AND
   39  THE DENOMINATOR OF WHICH IS THE TOTAL RECOVERY PERIOD.
   40    (F)  TERMINATION. THE CREDIT ALLOWED BY PARAGRAPH (B) OF THIS SUBDIVI-
   41  SION  SHALL  NOT  APPLY  IN  TAXABLE  YEARS  BEGINNING  AFTER   DECEMBER
   42  THIRTY-FIRST, TWO THOUSAND SEVENTEEN.
   43    31. EXCELSIOR JOBS PROGRAM CREDIT. (A) ALLOWANCE OF CREDIT. A TAXPAYER
   44  WILL  BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION THIRTY-
   45  ONE OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   46    (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
   47  FOR  ANY  TAXABLE  YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
   48  THAN THE AMOUNT PRESCRIBED  IN  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF
   49  SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
   50  IT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX
   51  TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE  FIXED
   52  DOLLAR  MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH
   53  TAXABLE YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED  OR
   54  REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
   55  EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
       S. 6359--D                         106                        A. 8559--D

    1  SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
    2  NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON.
    3    32. EMPIRE STATE FILM POST PRODUCTION CREDIT. (A) ALLOWANCE OF CREDIT.
    4  A  TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION THIRTY-ONE OF THIS CHAP-
    5  TER SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN SUCH SECTION
    6  THIRTY-ONE AGAINST THE TAX IMPOSED BY THIS ARTICLE.
    7    (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
    8  FOR  ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
    9  THAN THE AMOUNT PRESCRIBED  IN  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF
   10  SECTION  TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED, HOWEVER, THAT IF THE
   11  AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION  FOR  ANY  TAXABLE
   12  YEAR  REDUCES  THE  TAX TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS
   13  TAX BASED ON THE FIXED DOLLAR  MINIMUM  AMOUNT,  FIFTY  PERCENT  OF  THE
   14  EXCESS  SHALL  BE  TREATED  AS  AN  OVERPAYMENT OF TAX TO BE CREDITED OR
   15  REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
   16  EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
   17  SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
   18  NOTWITHSTANDING,  NO INTEREST SHALL BE PAID THEREON. THE BALANCE OF SUCH
   19  CREDIT NOT CREDITED OR REFUNDED IN SUCH TAXABLE YEAR MAY BE A  CARRYOVER
   20  TO  THE IMMEDIATELY SUCCEEDING TAXABLE YEAR AND MAY BE DEDUCTED FROM THE
   21  TAXPAYER'S TAX FOR SUCH YEAR. THE EXCESS, IF ANY, OF THE AMOUNT  OF  THE
   22  CREDIT  OVER  THE  TAX  FOR  SUCH SUCCEEDING YEAR SHALL BE TREATED AS AN
   23  OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED  IN  ACCORDANCE  WITH  THE
   24  PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED,
   25  HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHT-
   26  Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THER-
   27  EON.
   28    33.  TEMPORARY  DEFERRAL NONREFUNDABLE PAYOUT CREDIT. (A) ALLOWANCE OF
   29  CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
   30  IN SUBDIVISION ONE OF SECTION THIRTY-FOUR OF THIS CHAPTER,  AGAINST  THE
   31  TAX IMPOSED BY THIS ARTICLE.
   32    (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
   33  FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR THAT YEAR TO  LESS
   34  THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
   35  SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
   36  IT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES  THE  TAX
   37  TO  SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE FIXED
   38  DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN  SUCH
   39  TAXABLE  YEAR MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY
   40  BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   41    34. TEMPORARY DEFERRAL REFUNDABLE  PAYOUT  CREDIT.  (A)  ALLOWANCE  OF
   42  CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
   43  IN  SUBDIVISION  TWO OF SECTION THIRTY-FOUR OF THIS CHAPTER, AGAINST THE
   44  TAX IMPOSED BY THIS ARTICLE.
   45    (B) APPLICATION OF CREDIT. IN NO EVENT SHALL  THE  CREDIT  UNDER  THIS
   46  SUBDIVISION  BE  ALLOWED  IN AN AMOUNT WHICH WILL REDUCE THE TAX TO LESS
   47  THAN THE AMOUNT PRESCRIBED  IN  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF
   48  SECTION  TWO  HUNDRED  TEN  OF  THIS ARTICLE. IF, HOWEVER, THE AMOUNT OF
   49  CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR  REDUCES  THE
   50  TAX  TO  SUCH  AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE
   51  FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH
   52  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE REFUNDED IN
   53  ACCORDANCE WITH THE PROVISIONS OF SECTION  ONE  THOUSAND  EIGHTY-SIX  OF
   54  THIS CHAPTER, PROVIDED HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
   55    35.  ECONOMIC  TRANSFORMATION  AND  FACILITY REDEVELOPMENT PROGRAM TAX
   56  CREDIT. (A) ALLOWANCE OF CREDIT. A TAXPAYER SHALL BE ALLOWED  A  CREDIT,
       S. 6359--D                         107                        A. 8559--D

    1  TO  BE  COMPUTED  AS  PROVIDED  IN  SECTION THIRTY-FIVE OF THIS CHAPTER,
    2  AGAINST THE TAX IMPOSED BY THIS ARTICLE.
    3    (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
    4  FOR ANY TAXABLE YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH  YEAR  TO  LESS
    5  THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
    6  SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
    7  IT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES  THE  TAX
    8  TO  SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE FIXED
    9  DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN  SUCH
   10  TAXABLE  YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
   11  REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
   12  EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
   13  SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
   14  NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON.
   15    36.  NEW  YORK  YOUTH  WORKS  TAX CREDIT. (A) A TAXPAYER THAT HAS BEEN
   16  CERTIFIED BY THE COMMISSIONER OF LABOR AS A QUALIFIED EMPLOYER  PURSUANT
   17  TO  SECTION  TWENTY-FIVE-A  OF  THE  LABOR LAW SHALL BE ALLOWED A CREDIT
   18  AGAINST THE TAX IMPOSED BY  THIS  ARTICLE  EQUAL  TO  (I)  FIVE  HUNDRED
   19  DOLLARS  PER  MONTH FOR UP TO SIX MONTHS FOR EACH QUALIFIED EMPLOYEE THE
   20  EMPLOYER EMPLOYS IN A FULL-TIME JOB OR TWO  HUNDRED  FIFTY  DOLLARS  PER
   21  MONTH  FOR  UP  TO  SIX  MONTHS FOR EACH QUALIFIED EMPLOYEE THE EMPLOYER
   22  EMPLOYS IN A PART-TIME JOB OF AT LEAST TWENTY  HOURS  PER  WEEK  OR  TEN
   23  HOURS  PER  WEEK  WHEN THE QUALIFIED EMPLOYEE IS ENROLLED IN HIGH SCHOOL
   24  FULL-TIME, (II) ONE THOUSAND DOLLARS FOR EACH QUALIFIED EMPLOYEE WHO  IS
   25  EMPLOYED FOR AT LEAST AN ADDITIONAL SIX MONTHS BY THE QUALIFIED EMPLOYER
   26  IN  A  FULL-TIME JOB OR FIVE HUNDRED DOLLARS FOR EACH QUALIFIED EMPLOYEE
   27  WHO IS EMPLOYED FOR AT LEAST AN ADDITIONAL SIX MONTHS BY  THE  QUALIFIED
   28  EMPLOYER  IN  A  PART-TIME  JOB OF AT LEAST TWENTY HOURS PER WEEK OR TEN
   29  HOURS PER WEEK WHEN THE QUALIFIED EMPLOYEE IS ENROLLED  IN  HIGH  SCHOOL
   30  FULL-TIME,  AND (III) AN ADDITIONAL ONE THOUSAND DOLLARS FOR EACH QUALI-
   31  FIED EMPLOYEE WHO IS EMPLOYED FOR AT LEAST AN ADDITIONAL YEAR AFTER  THE
   32  FIRST  YEAR  OF THE EMPLOYEE'S EMPLOYMENT BY THE QUALIFIED EMPLOYER IN A
   33  FULL-TIME JOB OR FIVE HUNDRED DOLLARS FOR EACH QUALIFIED EMPLOYEE WHO IS
   34  EMPLOYED FOR AT LEAST AN ADDITIONAL YEAR AFTER THE  FIRST  YEAR  OF  THE
   35  EMPLOYEE'S EMPLOYMENT BY THE QUALIFIED EMPLOYER IN A PART-TIME JOB OF AT
   36  LEAST  TWENTY  HOURS  PER  WEEK OR TEN HOURS PER WEEK WHEN THE QUALIFIED
   37  EMPLOYEE IS ENROLLED IN HIGH SCHOOL  FULL-TIME.  FOR  PURPOSES  OF  THIS
   38  SUBDIVISION,  THE  TERM "QUALIFIED EMPLOYEE" SHALL HAVE THE SAME MEANING
   39  AS SET FORTH IN SUBDIVISION (B) OF SECTION TWENTY-FIVE-A  OF  THE  LABOR
   40  LAW.  THE  PORTION  OF  THE CREDIT DESCRIBED IN SUBPARAGRAPH (I) OF THIS
   41  PARAGRAPH SHALL BE ALLOWED FOR THE TAXABLE YEAR IN WHICH THE  WAGES  ARE
   42  PAID  TO THE QUALIFIED EMPLOYEE, AND THE PORTION OF THE CREDIT DESCRIBED
   43  IN SUBPARAGRAPH (II) OF THIS PARAGRAPH SHALL BE ALLOWED IN  THE  TAXABLE
   44  YEAR IN WHICH THE ADDITIONAL SIX MONTH PERIOD ENDS.
   45    (B) THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR MAY
   46  NOT  REDUCE THE TAX DUE FOR THAT YEAR TO LESS THAN THE AMOUNT PRESCRIBED
   47  IN PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION TWO HUNDRED TEN  OF  THIS
   48  ARTICLE.  HOWEVER, IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBDI-
   49  VISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO THAT  AMOUNT  OR  IF  THE
   50  TAXPAYER  OTHERWISE  PAYS  TAX BASED ON THE FIXED DOLLAR MINIMUM AMOUNT,
   51  ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN THAT TAXABLE YEAR WILL BE TREATED
   52  AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN  ACCORDANCE  WITH
   53  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND  EIGHTY-SIX OF THIS CHAPTER.
   54  PROVIDED, HOWEVER, NO INTEREST WILL BE PAID THEREON.
   55    (C) THE TAXPAYER MAY BE REQUIRED TO  ATTACH  TO  ITS  TAX  RETURN  ITS
   56  CERTIFICATE  OF ELIGIBILITY ISSUED BY THE COMMISSIONER OF LABOR PURSUANT
       S. 6359--D                         108                        A. 8559--D

    1  TO SECTION TWENTY-FIVE-A OF THE LABOR LAW. IN NO EVENT SHALL THE TAXPAY-
    2  ER BE ALLOWED A CREDIT GREATER THAN THE AMOUNT OF THE CREDIT  LISTED  ON
    3  THE  CERTIFICATE  OF  ELIGIBILITY. NOTWITHSTANDING ANY PROVISION OF THIS
    4  CHAPTER  TO THE CONTRARY, THE COMMISSIONER AND THE COMMISSIONER'S DESIG-
    5  NEES MAY RELEASE THE NAMES AND ADDRESSES OF ANY TAXPAYER  CLAIMING  THIS
    6  CREDIT  AND  THE AMOUNT OF THE CREDIT EARNED BY THE TAXPAYER.  PROVIDED,
    7  HOWEVER, IF A TAXPAYER CLAIMS THIS CREDIT BECAUSE IT IS A  MEMBER  OF  A
    8  LIMITED LIABILITY COMPANY OR A PARTNER IN A PARTNERSHIP, ONLY THE AMOUNT
    9  OF  CREDIT  EARNED BY THE ENTITY AND NOT THE AMOUNT OF CREDIT CLAIMED BY
   10  THE TAXPAYER MAY BE RELEASED.
   11    37. EMPIRE STATE JOBS RETENTION PROGRAM CREDIT. (A) ALLOWANCE OF CRED-
   12  IT.  A TAXPAYER WILL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED  IN
   13  SECTION  THIRTY-SIX  OF  THIS CHAPTER, AGAINST THE TAXES IMPOSED BY THIS
   14  ARTICLE.
   15    (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
   16  FOR  ANY  TAXABLE YEAR WILL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
   17  THAN THE AMOUNT PRESCRIBED  IN  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF
   18  SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
   19  IT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX
   20  TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE  FIXED
   21  DOLLAR  MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH
   22  TAXABLE YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED  OR
   23  REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
   24  EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
   25  SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
   26  NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON.
   27    38. CREDIT FOR COMPANIES WHO  PROVIDE  TRANSPORTATION  TO  INDIVIDUALS
   28  WITH  DISABILITIES.  (A) ALLOWANCE AND AMOUNT OF CREDIT. A TAXPAYER, WHO
   29  PROVIDES  A  TAXICAB  SERVICE  AS  DEFINED  IN   SECTION   ONE   HUNDRED
   30  FORTY-EIGHT-A  OF  THE  VEHICLE  AND TRAFFIC LAW, OR A LIVERY SERVICE AS
   31  DEFINED IN SECTION ONE HUNDRED TWENTY-ONE-E OF THE VEHICLE  AND  TRAFFIC
   32  LAW,  SHALL  BE  ALLOWED  A  CREDIT,  TO BE COMPUTED AS PROVIDED IN THIS
   33  SUBDIVISION, AGAINST THE TAX IMPOSED BY THIS ARTICLE. THE AMOUNT OF  THE
   34  CREDIT  SHALL BE EQUAL TO THE INCREMENTAL COST ASSOCIATED WITH UPGRADING
   35  A VEHICLE SO THAT IT IS ACCESSIBLE BY INDIVIDUALS WITH  DISABILITIES  AS
   36  DEFINED  IN  PARAGRAPH  (B) OF THIS SUBDIVISION. PROVIDED, HOWEVER, THAT
   37  SUCH CREDIT SHALL NOT EXCEED  TEN  THOUSAND  DOLLARS  PER  VEHICLE.  FOR
   38  PURPOSES  OF  THIS  SUBDIVISION,  PURCHASES  OF  NEW  VEHICLES  THAT ARE
   39  INITIALLY MANUFACTURED TO BE ACCESSIBLE FOR INDIVIDUALS  WITH  DISABILI-
   40  TIES  AND  FOR WHICH THERE IS NO COMPARABLE MAKE AND MODEL THAT DOES NOT
   41  INCLUDE THE EQUIPMENT NECESSARY TO PROVIDE ACCESSIBILITY TO  INDIVIDUALS
   42  WITH DISABILITIES, THE CREDIT SHALL BE TEN THOUSAND DOLLARS PER VEHICLE.
   43    (B) DEFINITION. THE TERM "ACCESSIBLE BY INDIVIDUALS WITH DISABILITIES"
   44  SHALL,  FOR  THE  PURPOSES  OF THIS SUBDIVISION, REFER TO A VEHICLE THAT
   45  COMPLIES WITH FEDERAL REGULATIONS PROMULGATED PURSUANT TO THE  AMERICANS
   46  WITH  DISABILITIES  ACT  APPLICABLE  TO  VANS  UNDER  TWENTY-TWO FEET IN
   47  LENGTH, BY THE FEDERAL DEPARTMENT OF TRANSPORTATION, IN CODE OF  FEDERAL
   48  REGULATIONS,  TITLE 49, PARTS 37 AND 38, AND BY THE FEDERAL ARCHITECTURE
   49  AND TRANSPORTATION BARRIERS COMPLIANCE BOARD, IN CODE OF  FEDERAL  REGU-
   50  LATIONS, TITLE 36, SECTION 1192.23, AND THE FEDERAL MOTOR VEHICLE SAFETY
   51  STANDARDS, CODE OF FEDERAL REGULATIONS, TITLE 49, PART 57.
   52    (C)  APPLICATION OF CREDIT. IN NO EVENT SHALL THE CREDIT ALLOWED UNDER
   53  THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCE THE TAX DUE FOR  SUCH  YEAR
   54  TO  LESS  THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE
   55  OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF  THE  AMOUNT  OF
   56  CREDIT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE
       S. 6359--D                         109                        A. 8559--D

    1  TAX TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX  BASED  ON  THE
    2  FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN
    3  SUCH  TAXABLE YEAR SHALL BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS,
    4  AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
    5    39.  BEER  PRODUCTION CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO
    6  BE COMPUTED AS PROVIDED IN SECTION THIRTY-SEVEN OF THIS CHAPTER, AGAINST
    7  THE TAX IMPOSED BY THIS ARTICLE. IN NO EVENT SHALL  THE  CREDIT  ALLOWED
    8  UNDER  THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCE THE TAX DUE FOR SUCH
    9  YEAR TO LESS THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF  SUBDIVISION
   10  ONE  OF  SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT
   11  OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY  TAXABLE  YEAR  REDUCES
   12  THE  TAX  TO  SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON
   13  THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS  NOT  DEDUCT-
   14  IBLE  IN  SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO
   15  BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE
   16  THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER,  THE  PROVISIONS
   17  OF  SUBSECTION  (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
   18  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   19    40. MINIMUM WAGE REIMBURSEMENT CREDIT.  (A)  ALLOWANCE  OF  CREDIT.  A
   20  TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT,  TO  BE COMPUTED AS PROVIDED IN
   21  SECTION THIRTY-EIGHT OF THIS CHAPTER, AGAINST THE TAX  IMPOSED  BY  THIS
   22  ARTICLE.
   23    (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
   24  FOR ANY TAXABLE YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH  YEAR  TO  LESS
   25  THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
   26  SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
   27  IT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES  THE  TAX
   28  TO  SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE FIXED
   29  DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN  SUCH
   30  TAXABLE  YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
   31  REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
   32  EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
   33  SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
   34  NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON.
   35    41.  THE  TAX-FREE NY AREA TAX ELIMINATION CREDIT. A TAXPAYER SHALL BE
   36  ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN  SECTION  FORTY  OF  THIS
   37  CHAPTER,  AGAINST  THE  TAX IMPOSED BY THIS ARTICLE. UNLESS THE TAXPAYER
   38  HAS A TAX-FREE NY AREA ALLOCATION FACTOR OF  ONE  HUNDRED  PERCENT,  THE
   39  CREDIT  ALLOWED  UNDER  THIS  SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT
   40  REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE AMOUNT  PRESCRIBED  IN
   41  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF SECTION TWO HUNDRED TEN OF THIS
   42  ARTICLE. HOWEVER, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE  IN  SUCH  TAXABLE
   43  YEAR  SHALL  BE  TREATED  AS  AN  OVERPAYMENT  OF  TAX TO BE CREDITED OR
   44  REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
   45  EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
   46  SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
   47  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   48    42.  ALTERNATIVE  BASE CREDIT. (A) IF THE TAX IMPOSED ON A TAXPAYER BY
   49  SUBDIVISION ONE OF SECTION TWO HUNDRED  NINE  OF  THIS  ARTICLE  IS  THE
   50  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (B) OF SUBDIVISION ONE OF SECTION TWO
   51  HUNDRED TEN OF THIS ARTICLE, THE TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT
   52  AGAINST  THE  TAX  IMPOSED UNDER THIS ARTICLE EQUAL TO THE AMOUNT OF TAX
   53  PAID TO ANOTHER STATE COMPUTED ON A TAX BASE IDENTICAL TO THE  TAX  BASE
   54  PRESCRIBED  IN  SUCH  PARAGRAPH (B). IF THE TAX IMPOSED ON A TAXPAYER BY
   55  SUBDIVISION ONE OF SECTION TWO HUNDRED  NINE  OF  THIS  ARTICLE  IS  THE
   56  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO
       S. 6359--D                         110                        A. 8559--D

    1  HUNDRED TEN OF THIS ARTICLE, THE TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT
    2  AGAINST  THE  TAX  IMPOSED UNDER THIS ARTICLE EQUAL TO THE AMOUNT OF TAX
    3  PAID TO ANOTHER STATE COMPUTED ON A TAX BASE IDENTICAL TO THE  TAX  BASE
    4  PRESCRIBED IN SUCH PARAGRAPH (D).
    5    (B)  IN  NO  EVENT SHALL THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR
    6  ANY TAXABLE YEAR REDUCE THE TAX DUE FOR  SUCH  YEAR  TO  LESS  THAN  THE
    7  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO
    8  HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT  OF  CREDIT  ALLOWED
    9  UNDER  THIS  SUBDIVISION  FOR  ANY  TAXABLE YEAR REDUCES THE TAX TO SUCH
   10  AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE  FIXED  DOLLAR
   11  MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE
   12  YEAR  SHALL  BE  CARRIED OVER TO THE FOLLOWING YEAR OR YEARS, AND MAY BE
   13  DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   14    43. REAL PROPERTY TAX CREDIT FOR MANUFACTURERS. (A)  A  QUALIFIED  NEW
   15  YORK  MANUFACTURER,  AS DEFINED IN SUBPARAGRAPH (VI) OF PARAGRAPH (A) OF
   16  SUBDIVISION ONE OF SECTION TWO HUNDRED TEN  OF  THIS  ARTICLE,  WILL  BE
   17  ALLOWED  A  CREDIT  EQUAL  TO TWENTY PERCENT OF THE REAL PROPERTY TAX IT
   18  PAID DURING THE TAXABLE YEAR FOR REAL PROPERTY OWNED BY SUCH MANUFACTUR-
   19  ER IN NEW YORK WHICH WAS PRINCIPALLY USED DURING THE  TAXABLE  YEAR  FOR
   20  MANUFACTURING  TO  THE  EXTENT  NOT DEDUCTED IN DETERMINING   ENTIRE NET
   21  INCOME. THIS CREDIT WILL NOT BE ALLOWED IF THE REAL PROPERTY TAXES  THAT
   22  ARE THE BASIS FOR THIS CREDIT ARE INCLUDED IN THE CALCULATION OF ANOTHER
   23  CREDIT CLAIMED BY THE TAXPAYER.
   24    (B)  (1)  FOR PURPOSES OF THIS SUBDIVISION, THE TERM REAL PROPERTY TAX
   25  MEANS A CHARGE IMPOSED UPON REAL PROPERTY BY OR ON BEHALF OF  A  COUNTY,
   26  CITY,  TOWN, VILLAGE OR SCHOOL DISTRICT FOR MUNICIPAL OR SCHOOL DISTRICT
   27  PURPOSES, PROVIDED THAT THE CHARGE IS  LEVIED  FOR  THE  GENERAL  PUBLIC
   28  WELFARE  BY  THE  PROPER  TAXING  AUTHORITIES AT A LIKE RATE AGAINST ALL
   29  PROPERTY OVER WHICH SUCH AUTHORITIES  HAVE  JURISDICTION,  AND  PROVIDED
   30  THAT  WHERE TAXES ARE LEVIED PURSUANT TO ARTICLE EIGHTEEN OR NINETEEN OF
   31  THE REAL PROPERTY TAX LAW, THE PROPERTY MUST HAVE BEEN TAXED AT THE RATE
   32  DETERMINED FOR THE CLASS IN WHICH IT IS CONTAINED, AS PROVIDED  BY  SUCH
   33  ARTICLE  EIGHTEEN  OR  NINETEEN,  WHICHEVER IS APPLICABLE. THE TERM REAL
   34  PROPERTY TAX DOES NOT INCLUDE A CHARGE FOR LOCAL BENEFITS, INCLUDING ANY
   35  PORTION OF THAT CHARGE THAT IS PROPERLY ALLOCATED TO THE COSTS ATTRIBUT-
   36  ABLE TO MAINTENANCE OR INTEREST, WHEN (I) THE PROPERTY  SUBJECT  TO  THE
   37  CHARGE IS LIMITED TO THE PROPERTY THAT BENEFITS FROM THE CHARGE, OR (II)
   38  THE  AMOUNT  OF  THE CHARGE IS DETERMINED BY THE BENEFIT TO THE PROPERTY
   39  ASSESSED, OR (III) THE IMPROVEMENT FOR  WHICH  THE  CHARGE  IS  ASSESSED
   40  TENDS TO INCREASE THE PROPERTY VALUE.
   41    (2) IN ADDITION, THE TERM REAL PROPERTY TAX INCLUDES TAXES PAID BY THE
   42  TAXPAYER  UPON REAL PROPERTY PRINCIPALLY USED DURING THE TAXABLE YEAR BY
   43  THE TAXPAYER IN MANUFACTURING WHERE THE TAXPAYER LEASES SUCH REAL  PROP-
   44  ERTY  FROM  AN  UNRELATED  THIRD  PARTY  IF THE FOLLOWING CONDITIONS ARE
   45  SATISFIED: (I) THE TAX MUST BE PAID BY THE TAXPAYER AS  LESSEE  PURSUANT
   46  TO  EXPLICIT  REQUIREMENTS  IN A WRITTEN LEASE, AND (II) THE TAXPAYER AS
   47  LESSEE HAS PAID SUCH TAXES DIRECTLY TO  THE  TAXING  AUTHORITY  AND  HAS
   48  RECEIVED A WRITTEN RECEIPT FOR PAYMENT OF TAXES FROM THE TAXING AUTHORI-
   49  TY.  IN  THE  CASE  OF A COMBINED GROUP THAT CONSTITUTES A QUALIFIED NEW
   50  YORK MANUFACTURER, THE CONDITIONS IN THE PRECEDING SENTENCE  ARE  SATIS-
   51  FIED  IF ONE CORPORATION IN THE COMBINED GROUP IS THE LESSEE AND ANOTHER
   52  CORPORATION IN THE COMBINED GROUP  MAKES  THE  PAYMENTS  TO  THE  TAXING
   53  AUTHORITY.
   54    (3)  THE TERM REAL PROPERTY TAX DOES NOT INCLUDE A PAYMENT MADE BY THE
   55  TAXPAYER IN CONNECTION WITH AN AGREEMENT FOR  THE  PAYMENT  IN  LIEU  OF
       S. 6359--D                         111                        A. 8559--D

    1  TAXES  ON REAL PROPERTY, WHETHER SUCH PROPERTY IS OWNED OR LEASED BY THE
    2  TAXPAYER.
    3    (4)  THE  REAL PROPERTY TAXES MUST BE PAID BY THE TAXPAYER IN THE YEAR
    4  SUCH TAXES BECOME A LIEN ON THE REAL PROPERTY.
    5    (C) CREDIT RECAPTURE. WHERE A QUALIFIED NEW YORK  MANUFACTURER'S  REAL
    6  PROPERTY  TAXES  WHICH  WERE  THE  BASIS FOR THE ALLOWANCE OF THE CREDIT
    7  PROVIDED FOR UNDER THIS SUBDIVISION ARE SUBSEQUENTLY REDUCED AS A RESULT
    8  OF A FINAL ORDER IN ANY PROCEEDING UNDER ARTICLE SEVEN OF THE REAL PROP-
    9  ERTY TAX LAW OR OTHER PROVISION OF LAW, THE TAXPAYER SHALL ADD BACK,  IN
   10  THE  TAXABLE YEAR IN WHICH SUCH FINAL ORDER IS ISSUED, THE EXCESS OF (1)
   11  THE AMOUNT OF CREDIT ORIGINALLY ALLOWED FOR A TAXABLE YEAR OVER (2)  THE
   12  AMOUNT  OF CREDIT DETERMINED BASED UPON THE REDUCED REAL PROPERTY TAXES.
   13  IF SUCH FINAL ORDER REDUCES REAL PROPERTY TAXES FOR MORE THAN ONE  YEAR,
   14  THE  TAXPAYER  MUST DETERMINE HOW MUCH OF SUCH REDUCTION IS ATTRIBUTABLE
   15  TO EACH YEAR COVERED BY SUCH FINAL ORDER AND  CALCULATE  THE  AMOUNT  OF
   16  CREDIT  WHICH  IS REQUIRED BY THIS SUBDIVISION TO BE RECAPTURED FOR EACH
   17  YEAR BASED ON SUCH REDUCTION.
   18    (D) THE CREDIT ALLOWED UNDER THIS SUBDIVISION  FOR  ANY  TAXABLE  YEAR
   19  SHALL  NOT  REDUCE  THE  TAX  DUE FOR SUCH YEAR TO LESS THAN TWENTY-FIVE
   20  DOLLARS.
   21    44. THE TAX-FREE NY AREA  EXCISE  TAX  ON  TELECOMMUNICATION  SERVICES
   22  CREDIT.  A  TAXPAYER  THAT  IS A BUSINESS OR OWNER OF A BUSINESS THAT IS
   23  LOCATED IN A TAX-FREE NY AREA APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF
   24  THE ECONOMIC DEVELOPMENT LAW SHALL BE ALLOWED  A  CREDIT  EQUAL  TO  THE
   25  EXCISE  TAX ON TELECOMMUNICATION SERVICES IMPOSED BY SECTION ONE HUNDRED
   26  EIGHTY-SIX-E OF THIS CHAPTER AND PASSED THROUGH TO SUCH BUSINESS  DURING
   27  THE  TAXABLE  YEAR  TO  THE  EXTENT  NOT OTHERWISE DEDUCTED IN COMPUTING
   28  ENTIRE NET INCOME UNDER THIS ARTICLE. HOWEVER, ANY AMOUNT OF CREDIT  NOT
   29  DEDUCTIBLE  IN  SUCH  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF
   30  TAX TO BE CREDITED OR REFUNDED IN  ACCORDANCE  WITH  THE  PROVISIONS  OF
   31  SECTION  ONE  THOUSAND  EIGHTY-SIX  OF  THIS CHAPTER. THIS CREDIT MAY BE
   32  CLAIMED  ONLY  WHERE  ANY  TAX  IMPOSED  BY  SUCH  SECTION  ONE  HUNDRED
   33  EIGHTY-SIX-E  HAS  BEEN SEPARATELY STATED ON A BILL FROM THE PROVIDER OF
   34  TELECOMMUNICATION SERVICES AND PAID BY SUCH  BUSINESS  WITH  RESPECT  TO
   35  SUCH  SERVICES  RENDERED  WITHIN  A  TAX-FREE NY AREA DURING THE TAXABLE
   36  YEAR. UNLESS THE TAXPAYER HAS A TAX-FREE NY AREA  ALLOCATION  FACTOR  OF
   37  ONE  HUNDRED  PERCENT, THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY
   38  TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE
   39  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION  ONE  OF  SECTION  TWO
   40  HUNDRED  TEN  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE PROVISIONS OF
   41  SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
   42  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   43    45.  ORDER  OF CREDITS. (A) CREDITS ALLOWABLE UNDER THIS ARTICLE WHICH
   44  CANNOT BE CARRIED OVER AND WHICH ARE NOT REFUNDABLE  SHALL  BE  DEDUCTED
   45  FIRST.  THE CREDIT ALLOWABLE UNDER SUBDIVISION SIX OF THIS SECTION SHALL
   46  BE DEDUCTED IMMEDIATELY AFTER THE DEDUCTION  OF  ALL  CREDITS  ALLOWABLE
   47  UNDER  THIS  ARTICLE  WHICH  CANNOT  BE  CARRIED  OVER AND WHICH ARE NOT
   48  REFUNDABLE, WHETHER OR NOT A  PORTION  OF  SUCH  CREDIT  IS  REFUNDABLE.
   49  CREDITS  ALLOWABLE  UNDER  THIS  ARTICLE  WHICH CAN BE CARRIED OVER, AND
   50  CARRYOVERS OF SUCH CREDITS, SHALL BE DEDUCTED NEXT AFTER  THE  DEDUCTION
   51  OF THE CREDIT ALLOWABLE UNDER SUBDIVISION SIX OF THIS SECTION, AND AMONG
   52  SUCH  CREDITS,  THOSE  WHOSE  CARRYOVER  IS OF LIMITED DURATION SHALL BE
   53  DEDUCTED BEFORE THOSE WHOSE CARRYOVER IS OF UNLIMITED DURATION.  CREDITS
   54  ALLOWABLE UNDER THIS ARTICLE WHICH ARE REFUNDABLE (OTHER THAN THE CREDIT
   55  ALLOWABLE UNDER SUBDIVISION SIX OF THIS SECTION) SHALL BE DEDUCTED LAST.
       S. 6359--D                         112                        A. 8559--D

    1    46.  NOTWITHSTANDING  THE REPEAL OF THE CREDIT PROVISIONS CONTAINED IN
    2  SECTION TWO HUNDRED TEN OF THIS ARTICLE OR IN ARTICLE THIRTY-TWO OF THIS
    3  CHAPTER AND THE ENACTMENT OF THIS SECTION BY A CHAPTER OF  THE  LAWS  OF
    4  TWO THOUSAND FOURTEEN:
    5    (A) A TAXPAYER SHALL BE ALLOWED TO UTILIZE ANY CARRYFORWARD AMOUNTS OF
    6  CREDITS  TO WHICH THE TAXPAYER WAS ENTITLED AS OF THE CLOSE OF THE TAXA-
    7  BLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN  AND
    8  BEFORE  JANUARY FIRST, TWO THOUSAND FIFTEEN, OTHER THAN THE CARRYFORWARD
    9  AMOUNT OF THE MINIMUM TAX CREDIT PROVIDED UNDER SUBDIVISION THIRTEEN  OF
   10  SECTION  TWO  HUNDRED TEN, AS THAT SUBDIVISION WAS IN EFFECT ON DECEMBER
   11  THIRTY-FIRST, TWO THOUSAND FOURTEEN.
   12    (B) A TAXPAYER SHALL BE REQUIRED IN A TAXABLE  YEAR  BEGINNING  ON  OR
   13  AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN, TO RECAPTURE ALL OR A PORTION
   14  OF  A CREDIT ALLOWED UNDER A CREDIT PROVISION IN SECTION TWO HUNDRED TEN
   15  OR ARTICLE THIRTY-TWO OF THIS CHAPTER FOR A TAXABLE YEAR BEGINNING PRIOR
   16  TO JANUARY FIRST, TWO THOUSAND FIFTEEN  IF  RECAPTURE  WOULD  HAVE  BEEN
   17  REQUIRED UNDER SUCH CREDIT PROVISION.
   18    S  18. The tax law is amended by adding a new section 210-C to read as
   19  follows:
   20    S 210-C. COMBINED REPORTS. 1. TAX. THE TAX ON A COMBINED REPORT  SHALL
   21  BE  THE  HIGHEST  OF (I) THE COMBINED BUSINESS INCOME BASE MULTIPLIED BY
   22  THE TAX RATE SPECIFIED IN PARAGRAPH (A) OF SUBDIVISION  ONE  OF  SECTION
   23  TWO  HUNDRED  TEN OF THIS ARTICLE; (II) THE COMBINED CAPITAL BASE MULTI-
   24  PLIED BY THE TAX RATE SPECIFIED IN PARAGRAPH (B) OF SUBDIVISION  ONE  OF
   25  SECTION  TWO  HUNDRED TEN OF THIS ARTICLE, BUT NOT EXCEEDING THE LIMITA-
   26  TION PROVIDED FOR IN THAT PARAGRAPH (B); OR (III) THE FIXED DOLLAR MINI-
   27  MUM THAT IS ATTRIBUTABLE TO THE DESIGNATED AGENT OF THE COMBINED  GROUP.
   28  IN ADDITION, THE TAX ON A COMBINED REPORT SHALL INCLUDE THE FIXED DOLLAR
   29  MINIMUM TAX SPECIFIED IN PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION TWO
   30  HUNDRED TEN OF THIS ARTICLE FOR EACH MEMBER OF THE COMBINED GROUP, OTHER
   31  THAN THE DESIGNATED AGENT, THAT IS A TAXPAYER.
   32    (B)  THE  COMBINED  BUSINESS INCOME BASE IS THE AMOUNT OF THE COMBINED
   33  BUSINESS INCOME OF THE COMBINED GROUP THAT IS APPORTIONED TO THE  STATE,
   34  REDUCED BY ANY NET OPERATING LOSS DEDUCTION FOR THE COMBINED GROUP.  THE
   35  COMBINED  CAPITAL  BASE  IS  THE  AMOUNT  OF THE COMBINED CAPITAL OF THE
   36  COMBINED GROUP THAT IS APPORTIONED TO THE STATE.
   37    2. COMBINED REPORTS REQUIRED. (A) EXCEPT AS PROVIDED IN PARAGRAPH  (C)
   38  OF  THIS  SUBDIVISION,  ANY  TAXPAYER  (I) WHICH OWNS OR CONTROLS EITHER
   39  DIRECTLY OR INDIRECTLY MORE THAN FIFTY PERCENT OF THE  VOTING  POWER  OF
   40  THE  CAPITAL  STOCK OF ONE OR MORE OTHER CORPORATIONS, OR (II) MORE THAN
   41  FIFTY PERCENT OF THE VOTING POWER OF THE CAPITAL STOCK OF WHICH IS OWNED
   42  OR CONTROLLED EITHER DIRECTLY OR INDIRECTLY BY ONE OR MORE OTHER  CORPO-
   43  RATIONS,  OR  (III)  MORE  THAN FIFTY PERCENT OF THE VOTING POWER OF THE
   44  CAPITAL STOCK OF WHICH AND THE CAPITAL STOCK OF ONE OR MORE OTHER CORPO-
   45  RATIONS, IS OWNED OR CONTROLLED, DIRECTLY OR  INDIRECTLY,  BY  THE  SAME
   46  INTERESTS,  AND  (IV)  THAT  IS ENGAGED IN A UNITARY BUSINESS WITH THOSE
   47  CORPORATIONS (HEREINAFTER REFERRED TO AS "RELATED CORPORATIONS"),  SHALL
   48  MAKE A COMBINED REPORT WITH THOSE OTHER CORPORATIONS.
   49    (B)  A CORPORATION REQUIRED TO MAKE A COMBINED REPORT WITHIN THE MEAN-
   50  ING OF THIS SECTION SHALL ALSO INCLUDE (I) A CAPTIVE REIT AND A  CAPTIVE
   51  RIC IF THE CAPTIVE REIT OR CAPTIVE RIC IS NOT REQUIRED TO BE INCLUDED IN
   52  A  COMBINED  REPORT  UNDER  ARTICLE THIRTY-THREE OF THIS CHAPTER; (II) A
   53  COMBINABLE CAPTIVE INSURANCE COMPANY; AND  (III)  AN  ALIEN  CORPORATION
   54  THAT  SATISFIES  THE  CONDITIONS IN PARAGRAPH (A) OF THIS SUBDIVISION IF
   55  (I) UNDER ANY PROVISION OF THE INTERNAL REVENUE CODE,  THAT  CORPORATION
   56  IS TREATED AS A "DOMESTIC CORPORATION" AS DEFINED IN SECTION SEVEN THOU-
       S. 6359--D                         113                        A. 8559--D

    1  SAND  SEVEN  HUNDRED  ONE  OF  THE INTERNAL REVENUE CODE, OR (II) IT HAS
    2  EFFECTIVELY CONNECTED INCOME FOR THE TAXABLE  YEAR  PURSUANT  TO  CLAUSE
    3  (IV) OF THE OPENING PARAGRAPH OF SUBDIVISION NINE OF SECTION TWO HUNDRED
    4  EIGHT OF THIS ARTICLE.
    5    (C)  A  CORPORATION  REQUIRED  OR  PERMITTED TO MAKE A COMBINED REPORT
    6  UNDER THIS SECTION DOES NOT INCLUDE (I) A CORPORATION  THAT  IS  TAXABLE
    7  UNDER A FRANCHISE TAX IMPOSED BY ARTICLE NINE OR ARTICLE THIRTY-THREE OF
    8  THIS  CHAPTER OR WOULD BE TAXABLE UNDER A FRANCHISE TAX IMPOSED BY ARTI-
    9  CLE NINE OR THIRTY-THREE OF THIS CHAPTER IF SUBJECT TO TAX; (II) A  REIT
   10  THAT IS NOT A CAPTIVE REIT, AND A RIC THAT IS NOT A CAPTIVE RIC; (III) A
   11  NEW  YORK  S  CORPORATION;  OR  (IV) AN ALIEN CORPORATION THAT UNDER ANY
   12  PROVISION OF THE INTERNAL REVENUE CODE IS NOT  TREATED  AS  A  "DOMESTIC
   13  CORPORATION"  AS  DEFINED IN SECTION SEVEN THOUSAND SEVEN HUNDRED ONE OF
   14  SUCH CODE AND HAS NO EFFECTIVELY CONNECTED INCOME FOR THE  TAXABLE  YEAR
   15  PURSUANT  TO CLAUSE (IV) OF THE OPENING PARAGRAPH OF SUBDIVISION NINE OF
   16  SECTION TWO HUNDRED EIGHT OF THIS ARTICLE.  IF A CORPORATION IS  SUBJECT
   17  TO  TAX  UNDER  THIS  ARTICLE  SOLELY  AS A RESULT OF ITS OWNERSHIP OF A
   18  LIMITED PARTNER INTEREST IN A LIMITED PARTNERSHIP THAT  IS  DOING  BUSI-
   19  NESS,  EMPLOYING  CAPITAL,  OWNING  OR  LEASING PROPERTY, MAINTAINING AN
   20  OFFICE IN THIS STATE, OR DERIVING RECEIPTS FROM ACTIVITY IN THIS  STATE,
   21  AND  NONE  OF  THE CORPORATION'S RELATED CORPORATIONS ARE SUBJECT TO TAX
   22  UNDER THIS ARTICLE, SUCH CORPORATION SHALL NOT BE REQUIRED OR  PERMITTED
   23  TO  FILE  A  COMBINED REPORT UNDER THIS SECTION WITH SUCH RELATED CORPO-
   24  RATIONS.
   25    (D) A COMBINED REPORT SHALL BE FILED BY THE DESIGNATED  AGENT  OF  THE
   26  COMBINED GROUP AS DETERMINED UNDER SUBDIVISION SEVEN OF THIS SECTION.
   27    3.  COMMONLY  OWNED  GROUP  ELECTION. (A) SUBJECT TO THE PROVISIONS OF
   28  PARAGRAPH (C) OF SUBDIVISION TWO OF THIS SECTION, A TAXPAYER  MAY  ELECT
   29  TO  TREAT AS ITS COMBINED GROUP ALL CORPORATIONS THAT MEET THE OWNERSHIP
   30  REQUIREMENTS DESCRIBED IN PARAGRAPH  (A)  OF  SUBDIVISION  TWO  OF  THIS
   31  SECTION  (SUCH CORPORATIONS COLLECTIVELY REFERRED TO IN THIS SUBDIVISION
   32  AS THE "COMMONLY OWNED GROUP"). IF THAT ELECTION IS MADE,  THE  COMMONLY
   33  OWNED GROUP SHALL CALCULATE THE COMBINED BUSINESS INCOME, COMBINED CAPI-
   34  TAL,  AND  FIXED  DOLLAR  MINIMUM  BASES  OF ALL MEMBERS OF THE GROUP IN
   35  ACCORDANCE WITH PARAGRAPH FOUR OF THIS SUBDIVISION, WHETHER OR NOT  THAT
   36  BUSINESS INCOME OR BUSINESS CAPITAL IS FROM A SINGLE UNITARY BUSINESS.
   37    (B)  THE ELECTION UNDER THIS SUBDIVISION SHALL BE MADE ON AN ORIGINAL,
   38  TIMELY FILED RETURN OF THE COMBINED GROUP. ANY  CORPORATION  ENTERING  A
   39  COMMONLY  OWNED  GROUP  SUBSEQUENT  TO  THE  YEAR  OF  ELECTION SHALL BE
   40  INCLUDED IN THE COMBINED GROUP AND IS  CONSIDERED  TO  HAVE  WAIVED  ANY
   41  OBJECTION TO ITS INCLUSION IN THE COMBINED GROUP.
   42    (C)  THE ELECTION SHALL BE IRREVOCABLE, AND BINDING FOR AND APPLICABLE
   43  TO THE TAXABLE YEAR FOR WHICH IT IS MADE AND FOR THE  NEXT  SIX  TAXABLE
   44  YEARS.  THE  ELECTION  WILL  AUTOMATICALLY  BE RENEWED FOR ANOTHER SEVEN
   45  TAXABLE YEARS AFTER IT HAS BEEN IN EFFECT FOR SEVEN TAXABLE YEARS UNLESS
   46  IT IS  AFFIRMATIVELY  REVOKED.  THE  REVOCATION  SHALL  BE  MADE  ON  AN
   47  ORIGINAL,  TIMELY  FILED  RETURN  FOR  THE  FIRST TAXABLE YEAR AFTER THE
   48  COMPLETION OF A SEVEN YEAR PERIOD  FOR  WHICH  AN  ELECTION  UNDER  THIS
   49  SUBDIVISION  WAS  IN  PLACE. IN THE CASE OF A REVOCATION, A NEW ELECTION
   50  UNDER THIS SUBDIVISION SHALL NOT BE PERMITTED IN ANY OF THE  IMMEDIATELY
   51  FOLLOWING  THREE  TAXABLE YEARS. IN DETERMINING THE SEVEN AND THREE YEAR
   52  PERIODS DESCRIBED IN THIS PARAGRAPH, SHORT TAXABLE YEARS  SHALL  NOT  BE
   53  CONSIDERED OR COUNTED.
   54    4. COMPUTATION OF TAX BASES ON A COMBINED REPORT. (A) IN COMPUTING THE
   55  TAX  BASES  FOR A COMBINED REPORT, THE COMBINED GROUP SHALL GENERALLY BE
   56  TREATED AS A SINGLE  CORPORATION,  EXCEPT  AS  OTHERWISE  PROVIDED,  AND
       S. 6359--D                         114                        A. 8559--D

    1  SUBJECT TO ANY REGULATIONS OR GUIDANCE ISSUED BY THE COMMISSIONER OR THE
    2  DEPARTMENT.
    3    (B)(I) IN COMPUTING COMBINED BUSINESS INCOME, ALL INTERCORPORATE DIVI-
    4  DENDS  SHALL  BE  ELIMINATED,  AND ALL OTHER INTERCORPORATE TRANSACTIONS
    5  SHALL BE DEFERRED IN A MANNER SIMILAR  TO  THE  UNITED  STATES  TREASURY
    6  REGULATIONS  RELATING TO INTERCOMPANY TRANSACTIONS UNDER SECTION FIFTEEN
    7  HUNDRED TWO OF THE INTERNAL REVENUE CODE.
    8    (II) IN COMPUTING COMBINED CAPITAL, ALL INTERCORPORATE  STOCKHOLDINGS,
    9  INTERCORPORATE  BILLS,  INTERCORPORATE  NOTES  RECEIVABLE  AND  PAYABLE,
   10  INTERCORPORATE ACCOUNTS RECEIVABLE AND PAYABLE, AND OTHER INTERCORPORATE
   11  INDEBTEDNESS, SHALL BE ELIMINATED.
   12    (C) QUALIFICATION FOR  CREDITS,  INCLUDING  ANY  LIMITATIONS  THEREON,
   13  SHALL  BE  DETERMINED SEPARATELY FOR EACH OF THE MEMBERS OF THE COMBINED
   14  GROUP, AND SHALL NOT BE DETERMINED ON A COMBINED GROUP BASIS, EXCEPT  AS
   15  OTHERWISE  PROVIDED.  HOWEVER,  THE CREDITS SHALL BE APPLIED AGAINST THE
   16  COMBINED TAX OF THE GROUP. TO THE EXTENT THAT A PROVISION OF SECTION TWO
   17  HUNDRED TEN-B OF THIS ARTICLE LIMITS A CREDIT TO THE FIXED DOLLAR  MINI-
   18  MUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION TWO
   19  HUNDRED  TEN  OF THIS ARTICLE, SUCH FIXED DOLLAR MINIMUM AMOUNT SHALL BE
   20  THE FIXED DOLLAR MINIMUM AMOUNT THAT IS ATTRIBUTABLE TO  THE  DESIGNATED
   21  AGENT OF THE COMBINED GROUP.
   22    (D)(I)  A  NET  OPERATING  LOSS  DEDUCTION IS ALLOWED IN COMPUTING THE
   23  COMBINED BUSINESS INCOME BASE. SUCH DEDUCTION MAY REDUCE THE TAX ON  THE
   24  COMBINED  BUSINESS  INCOME BASE TO THE HIGHER OF THE TAX ON THE COMBINED
   25  CAPITAL BASE OR THE FIXED DOLLAR MINIMUM AMOUNT THAT IS ATTRIBUTABLE  TO
   26  THE  DESIGNATED  AGENT  OF THE COMBINED GROUP.  A COMBINED NET OPERATING
   27  LOSS DEDUCTION IS EQUAL TO THE AMOUNT OF COMBINED NET OPERATING LOSS  OR
   28  LOSSES  FROM  ONE  OR  MORE  TAXABLE YEARS THAT ARE CARRIED FORWARD TO A
   29  PARTICULAR INCOME YEAR. A COMBINED NET OPERATING LOSS  IS  THE  COMBINED
   30  BUSINESS  LOSS  INCURRED  IN A PARTICULAR TAXABLE YEAR MULTIPLIED BY THE
   31  COMBINED APPORTIONMENT FACTOR FOR THAT YEAR DETERMINED  AS  PROVIDED  IN
   32  SUBDIVISION FIVE OF THIS SECTION.
   33    (II)  THE COMBINED NET OPERATING LOSS DEDUCTION AND COMBINED NET OPER-
   34  ATING LOSS ARE ALSO SUBJECT TO THE PROVISIONS CONTAINED IN  CLAUSES  ONE
   35  THROUGH  SIX OF SUBPARAGRAPH (IX) OF PARAGRAPH (A) OF SUBDIVISION ONE OF
   36  SECTION TWO HUNDRED TEN OF THIS ARTICLE.
   37    (III) IN THE CASE OF A  CORPORATION  THAT  FILES  A  COMBINED  REPORT,
   38  EITHER  IN THE YEAR THE NET OPERATING LOSS IS INCURRED OR IN THE YEAR IN
   39  WHICH A DEDUCTION IS CLAIMED ON ACCOUNT OF THE LOSS,  THE  COMBINED  NET
   40  OPERATING  LOSS  DEDUCTION  IS  DETERMINED AS IF THE COMBINED GROUP IS A
   41  SINGLE CORPORATION AND, TO THE EXTENT POSSIBLE AND NOT OTHERWISE  INCON-
   42  SISTENT  WITH  THIS SUBDIVISION, IS SUBJECT TO THE SAME LIMITATIONS THAT
   43  WOULD APPLY FOR FEDERAL INCOME TAX PURPOSES UNDER THE  INTERNAL  REVENUE
   44  CODE  AND  THE  CODE  OF  FEDERAL REGULATIONS AS IF SUCH CORPORATION HAD
   45  FILED FOR SUCH TAXABLE YEAR A CONSOLIDATED  FEDERAL  INCOME  TAX  RETURN
   46  WITH  THE SAME CORPORATIONS INCLUDED IN THE COMBINED REPORT. IF A CORPO-
   47  RATION FILES A COMBINED REPORT, REGARDLESS OF WHETHER IT FILED  A  SEPA-
   48  RATE  RETURN OR CONSOLIDATED RETURN FOR FEDERAL INCOME TAX PURPOSES, THE
   49  NET OPERATING LOSS AND NET OPERATING LOSS  DEDUCTION  FOR  THE  COMBINED
   50  GROUP  MUST  BE  COMPUTED AS IF THE CORPORATION HAD FILED A CONSOLIDATED
   51  RETURN FOR THE SAME CORPORATIONS FOR FEDERAL INCOME TAX PURPOSES.
   52    (IV) IN GENERAL, ANY NET OPERATING LOSS CARRYOVER FROM A YEAR IN WHICH
   53  A COMBINED REPORT WAS FILED SHALL BE BASED ON THE COMBINED NET OPERATING
   54  LOSS OF THE GROUP OF CORPORATIONS FILING SUCH REPORT. THE PORTION OF THE
   55  COMBINED LOSS ATTRIBUTABLE TO ANY MEMBER OF THE GROUP THAT FILES A SEPA-
   56  RATE REPORT FOR A SUCCEEDING TAXABLE YEAR WILL BE AN AMOUNT BEARING  THE
       S. 6359--D                         115                        A. 8559--D

    1  SAME  RELATION  TO  THE  COMBINED LOSS AS THE NET OPERATING LOSS OF SUCH
    2  CORPORATION BEARS TO THE TOTAL NET OPERATING LOSS OF ALL MEMBERS OF  THE
    3  GROUP  HAVING SUCH LOSSES TO THE EXTENT THAT THEY ARE TAKEN INTO ACCOUNT
    4  IN COMPUTING THE COMBINED NET OPERATING LOSS.
    5    (D-1)  A  NET  OPERATING  LOSS  CONVERSION  SUBTRACTION  IS ALLOWED IN
    6  COMPUTING THE COMBINED BUSINESS INCOME BASE, AS PROVIDED IN SUBPARAGRAPH
    7  (VIII) OF PARAGRAPH (A) OF SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF
    8  THIS ARTICLE. SUCH SUBTRACTION MAY REDUCE THE TAX ON THE COMBINED  BUSI-
    9  NESS  INCOME  BASE TO THE HIGHER OF THE TAX ON THE COMBINED CAPITAL BASE
   10  OR THE FIXED DOLLAR MINIMUM AMOUNT THAT IS ATTRIBUTABLE  TO  THE  DESIG-
   11  NATED AGENT OF THE COMBINED GROUP.
   12    (E)  ANY  ELECTION  MADE PURSUANT TO PARAGRAPH (B) OF SUBDIVISION SIX,
   13  AND PARAGRAPHS (B) AND (C) OF SUBDIVISION SIX-A OF SECTION  TWO  HUNDRED
   14  EIGHT OF THIS ARTICLE SHALL APPLY TO ALL MEMBERS OF THE COMBINED GROUP.
   15    (F)(I)  IN  THE  CASE  OF A CAPTIVE REIT OR CAPTIVE RIC REQUIRED UNDER
   16  THIS SECTION TO BE INCLUDED IN A  COMBINED  REPORT,  ENTIRE  NET  INCOME
   17  SHALL  BE  COMPUTED AS REQUIRED UNDER SUBDIVISION FIVE (IN THE CASE OF A
   18  CAPTIVE REIT) OR SUBDIVISION SEVEN (IN THE CASE OF  A  CAPTIVE  RIC)  OF
   19  SECTION  TWO  HUNDRED NINE OF THIS ARTICLE. HOWEVER, THE DEDUCTION UNDER
   20  THE INTERNAL REVENUE CODE FOR DIVIDENDS PAID  BY  THE  CAPTIVE  REIT  OR
   21  CAPTIVE  RIC  TO  ANY  MEMBER  OF THE AFFILIATED GROUP THAT INCLUDES THE
   22  CORPORATION THAT DIRECTLY OR INDIRECTLY OWNS OVER FIFTY PERCENT  OF  THE
   23  VOTING  STOCK  OF  THE CAPTIVE REIT OR CAPTIVE RIC SHALL NOT BE ALLOWED.
   24  FOR PURPOSES OF THIS SUBPARAGRAPH, THE  TERM  "AFFILIATED  GROUP"  MEANS
   25  "AFFILIATED  GROUP"  AS  DEFINED  IN SECTION FIFTEEN HUNDRED FOUR OF THE
   26  INTERNAL REVENUE CODE, BUT WITHOUT REGARD TO THE EXCEPTIONS PROVIDED FOR
   27  IN SUBSECTION (B) OF THAT SECTION.
   28    (II) IN THE CASE OF A COMBINABLE CAPTIVE  INSURANCE  COMPANY  REQUIRED
   29  UNDER  THIS  SECTION  TO  BE  INCLUDED  IN A COMBINED REPORT, ENTIRE NET
   30  INCOME SHALL BE COMPUTED AS REQUIRED BY SUBDIVISION NINE OF SECTION  TWO
   31  HUNDRED EIGHT OF THIS ARTICLE.
   32    (G) IF MORE THAN ONE MEMBER OF A COMBINED GROUP IS ELIGIBLE FOR ANY OF
   33  THE  MODIFICATIONS  DESCRIBED IN PARAGRAPHS (R), (S) AND (T) OF SUBDIVI-
   34  SION NINE OF SECTION TWO HUNDRED EIGHT OF THIS ARTICLE, ALL SUCH MEMBERS
   35  MUST UTILIZE THE SAME MODIFICATION.
   36    5. APPORTIONMENT ON A COMBINED REPORT. (A) IN DETERMINING  THE  APPOR-
   37  TIONMENT  FACTOR  FOR  A  COMBINED REPORT, THE RECEIPTS, NET INCOME, NET
   38  GAINS AND OTHER ITEMS OF ALL MEMBERS OF THE COMBINED GROUP,  WHETHER  OR
   39  NOT  THEY  ARE  A  TAXPAYER,  ARE  INCLUDED AND INTERCORPORATE RECEIPTS,
   40  INCOME AND GAINS ARE ELIMINATED. RECEIPTS, NET  INCOME,  NET  GAINS  AND
   41  OTHER  ITEMS  ARE  SOURCED, AND THE AMOUNTS ALLOWED IN THE APPORTIONMENT
   42  FACTOR ARE DETERMINED, AS PROVIDED IN SECTION TWO HUNDRED TEN-A OF  THIS
   43  ARTICLE.
   44    (B)  AN  ELECTION  MADE  TO APPORTION INCOME AND GAINS FROM QUALIFYING
   45  FINANCIAL INSTRUMENTS PURSUANT TO SUBPARAGRAPH ONE OF PARAGRAPH  (A)  OF
   46  SUBDIVISION  FIVE  OF  SECTION  TWO  HUNDRED TEN-A OF THIS ARTICLE SHALL
   47  APPLY TO ALL MEMBERS OF THE COMBINED GROUP.
   48    6. LIABILITY OF COMBINED GROUP MEMBERS. EVERY MEMBER OF  THE  COMBINED
   49  GROUP  THAT  IS  SUBJECT  TO TAX UNDER THIS ARTICLE SHALL BE JOINTLY AND
   50  SEVERALLY LIABLE FOR THE TAX DUE PURSUANT TO A COMBINED REPORT.
   51    7. DESIGNATED AGENT. EACH COMBINED GROUP  SHALL  HAVE  ONE  DESIGNATED
   52  AGENT,  WHICH  SHALL  BE  A TAXPAYER. THE DESIGNATED AGENT IS THE PARENT
   53  CORPORATION OF THE COMBINED GROUP. IF THERE IS  NO  SUCH  PARENT  CORPO-
   54  RATION, OR THE PARENT CORPORATION IS NOT A TAXPAYER, THEN ANOTHER MEMBER
   55  OF  THE COMBINED GROUP THAT IS A TAXPAYER MAY BE APPOINTED AS THE DESIG-
       S. 6359--D                         116                        A. 8559--D

    1  NATED AGENT. ONLY THE DESIGNATED AGENT MAY ACT ON BEHALF OF THE  MEMBERS
    2  OF THE COMBINED GROUP FOR MATTERS RELATING TO THE COMBINED REPORT.
    3    S  19.  Subdivisions  2-a,  3,  4 and 5 of section 211 of the tax law,
    4  subdivision 2-a as added and subdivision 5 as amended by chapter 817  of
    5  the laws of 1987, subdivision 3 as amended by chapter 770 of the laws of
    6  1992,  subdivision 4 as amended by section 2 of part T of chapter 407 of
    7  the laws of 1999, the opening  paragraph  and  the  second  undesignated
    8  paragraph  of  paragraph  (a)  of subdivision 4 as amended by section 1,
    9  subparagraph 4 of paragraph (a) of subdivision 4 as amended  by  section
   10  2,  and  subparagraph  5 of paragraph (a) of subdivision 4 as amended by
   11  section 3 of part J of chapter 60 of the laws of 2007, subparagraph 6 of
   12  paragraph (a) of subdivision 4 as added by section  3  of  part  FF1  of
   13  chapter  57  of  the  laws  of  2008, subparagraph 7 of paragraph (a) of
   14  subdivision 4 as added by section 2 and subparagraph 1 of paragraph  (b)
   15  of subdivision 4 as amended by section 3 of part E1 of chapter 57 of the
   16  laws of 2009, are amended to read as follows:
   17    2-a.  The  [tax commission] COMMISSIONER may prescribe regulations and
   18  instructions requiring returns of information to be made  and  filed  in
   19  conjunction  with  the reports required to be filed pursuant to [section
   20  two hundred eleven] THIS ARTICLE, relating to payments  made  to  share-
   21  holders  owning,  directly  or indirectly, individually or in the aggre-
   22  gate, more than fifty percent of the issued capital stock of the taxpay-
   23  er, where such payments are treated  as  payments  of  interest  in  the
   24  computation of entire net income [or minimum taxable income] reported on
   25  such reports.
   26    3.  If  the  amount  of taxable income [or alternative minimum taxable
   27  income] for any year of any taxpayer (including any taxpayer  which  has
   28  elected  to  be  taxed under subchapter s of chapter one of the internal
   29  revenue code), as returned to the United States treasury  department  is
   30  changed  or  corrected  by the commissioner of internal revenue or other
   31  officer of the United States or other competent authority,  or  where  a
   32  renegotiation  of  a  contract  or  subcontract  with  the United States
   33  results in a change in taxable income [or  alternative  minimum  taxable
   34  income],  such  taxpayer  shall report such changed or corrected taxable
   35  income [or alternative minimum taxable income], or the results  of  such
   36  renegotiation,  within  ninety  days (or one hundred twenty days, in the
   37  case of a taxpayer making a combined report under this article for  such
   38  year)  after  the  final  determination  of such change or correction or
   39  renegotiation, or as required by the commissioner, and shall concede the
   40  accuracy of such determination or state wherein  it  is  erroneous.  The
   41  allowance of a tentative carryback adjustment based upon a net operating
   42  loss  carryback or net capital loss carryback pursuant to section sixty-
   43  four hundred eleven of the internal revenue code, as amended,  shall  be
   44  treated  as  a final determination for purposes of this subdivision. Any
   45  taxpayer filing an amended return with such department shall  also  file
   46  within ninety days (OR ONE HUNDRED TWENTY DAYS, IN THE CASE OF A TAXPAY-
   47  ER MAKING A COMBINED REPORT UNDER THIS ARTICLE FOR SUCH YEAR) thereafter
   48  an amended report with the commissioner.
   49    4.  [(a)  Combined  reports permitted or required. Any taxpayer, which
   50  owns or controls either directly or  indirectly  substantially  all  the
   51  capital  stock  of  one or more other corporations, or substantially all
   52  the capital stock of which is owned or  controlled  either  directly  or
   53  indirectly  by  one or more other corporations or by interests which own
   54  or control either directly or indirectly substantially all  the  capital
   55  stock  of  one  or  more other corporations, (hereinafter referred to in
   56  this paragraph as "related corporations"), shall make a combined  report
       S. 6359--D                         117                        A. 8559--D

    1  covering  any  related corporations if there are substantial intercorpo-
    2  rate transactions among the  related  corporations,  regardless  of  the
    3  transfer price for such intercorporate transactions. It is not necessary
    4  that  there  be  substantial intercorporate transactions between any one
    5  corporation and every other related corporation. It is necessary, howev-
    6  er, that there be substantial intercorporate  transactions  between  the
    7  taxpayer  and  a  related  corporation  or collectively, a group of such
    8  related corporations. The report shall set forth such information as the
    9  commissioner may require, subject to the provisions of subparagraphs one
   10  through five of this paragraph.
   11    In determining whether there  are  substantial  intercorporate  trans-
   12  actions, the commissioner shall consider and evaluate all activities and
   13  transactions  of  the  taxpayer and its related corporations. Activities
   14  and transactions that will be considered include, but  are  not  limited
   15  to:  (i)  manufacturing,  acquiring  goods  or  property,  or performing
   16  services, for related corporations; (ii)  selling  goods  acquired  from
   17  related  corporations;  (iii)  financing  sales of related corporations;
   18  (iv) performing related customer services using  common  facilities  and
   19  employees for related corporations; (v) incurring expenses that benefit,
   20  directly  or  indirectly,  one  or  more  related corporations, and (vi)
   21  transferring assets,  including  such  assets  as  accounts  receivable,
   22  patents or trademarks from one or more related corporations.
   23    (1)  Any  corporation  which owns or controls either directly or indi-
   24  rectly substantially all the capital stock of a DISC not exempt from tax
   25  under paragraph (i) of subdivision nine of section two hundred eight  of
   26  this  article  shall be allowed, at the election of such corporation, to
   27  make a report on a combined basis covering such DISC, but the failure of
   28  such corporation to make such election shall not  prohibit  the  commis-
   29  sioner  from  requiring  a combined report covering such corporation and
   30  such DISC.
   31    (2)(i) No taxpayer may be permitted to make a  report  on  a  combined
   32  basis  covering  any  such other corporations where such taxpayer or any
   33  such other corporation  allocates  in  accordance  with  clause  (A)  of
   34  subparagraph  seven of paragraph (a) of subdivision three of section two
   35  hundred ten of this article (relating to aviation corporations) and such
   36  taxpayer or any such other corporation does not so allocate, unless such
   37  taxpayer or such other corporation is a qualified air freight  forwarder
   38  with  respect  to such other corporation or such taxpayer, respectively,
   39  and all taxpayers included on such combined report elect, by filing such
   40  combined report,  to  have  such  qualified  air  freight  forwarder  so
   41  included.
   42    (ii)  A  corporation is a qualified air freight forwarder with respect
   43  to another corporation:
   44    (A) if it owns or controls either directly or indirectly  all  of  the
   45  capital  stock of such other corporation, or if all of its capital stock
   46  is owned or controlled either  directly  or  indirectly  by  such  other
   47  corporation,  or  if  all  of  the capital stock of both corporations is
   48  owned or controlled either directly or indirectly by the same interests,
   49    (B) if it is principally  engaged  in  the  business  of  air  freight
   50  forwarding, and
   51    (C)  if  its air freight forwarding business is carried on principally
   52  with the airline or airlines operated by such other corporation.
   53    (3) No taxpayer may be permitted to make a report on a combined  basis
   54  covering  any  such  other  corporations where such taxpayer or any such
   55  other corporation allocates in accordance  with  subparagraph  eight  of
   56  paragraph  (a)  of  subdivision three of section two hundred ten of this
       S. 6359--D                         118                        A. 8559--D

    1  article (relating  to  railroad  and  trucking  corporations)  and  such
    2  taxpayer or any such other corporation does not so allocate.
    3    (4)  Except  as  provided  in the first undesignated paragraph of this
    4  paragraph, no combined report covering any corporation shall be required
    5  unless the commissioner  deems  such  a  report  necessary,  because  of
    6  inter-company transactions or some agreement, understanding, arrangement
    7  or transaction referred to in subdivision five of this section, in order
    8  properly to reflect the tax liability under this article.
    9    (5) A corporation organized under the laws of a country other than the
   10  United  States  shall not be required or permitted to make a report on a
   11  combined basis.
   12    (6) (i) For purposes of this subparagraph, the term "closest  control-
   13  ling stockholder" means the corporation that indirectly owns or controls
   14  over fifty percent of the voting stock of a captive REIT or captive RIC,
   15  is subject to tax under this article, article thirty-two or thirty-three
   16  of  this  chapter  or  otherwise  required  to be included in a combined
   17  return or report under this article, article thirty-two or  thirty-three
   18  of  this  chapter,  and  is the fewest tiers of corporations away in the
   19  ownership structure from the captive REIT or captive RIC.   The  commis-
   20  sioner  is  authorized  to prescribe by regulation or published guidance
   21  the criteria for determining the closest controlling stockholder.
   22    (ii) A captive REIT or a captive RIC must be included  in  a  combined
   23  report  with  the  corporation that directly owns or controls over fifty
   24  percent of the voting stock of the captive REIT or captive RIC  if  that
   25  corporation  is  subject to tax or required to be included in a combined
   26  report under this article.
   27    (iii) If over fifty percent of the voting stock of a captive  REIT  or
   28  captive RIC is not directly owned or controlled by a corporation that is
   29  subject  to  tax  or  required to be included in a combined report under
   30  this article, then the captive REIT or captive RIC must be included in a
   31  combined return or report with  the  corporation  that  is  the  closest
   32  controlling stockholder of the captive REIT or captive RIC. If the clos-
   33  est  controlling  stockholder  of  the  captive  REIT  or captive RIC is
   34  subject to tax or otherwise required to be included in a combined report
   35  under this article, then  the  captive  REIT  or  captive  RIC  must  be
   36  included in a combined report under this article.
   37    (iv)  If  the  corporation  that  directly owns or controls the voting
   38  stock of the captive REIT or captive RIC is  described  in  subparagraph
   39  two,  three  or five of this paragraph as a corporation not permitted to
   40  make a combined report, then the provisions  in  clause  (iii)  of  this
   41  subparagraph  must  be  applied  to  determine  the corporation in whose
   42  combined return or report the captive REIT  or  captive  RIC  should  be
   43  included.  If,  under clause (iii) of this subparagraph, the corporation
   44  that is the closest controlling  stockholder  of  the  captive  REIT  or
   45  captive  RIC  is  described  in  subparagraph two, three or five of this
   46  paragraph as a corporation not permitted to make a combined return, then
   47  that corporation is deemed to not be in the ownership structure  of  the
   48  captive  REIT  or  captive  RIC, and the closest controlling stockholder
   49  will be determined without regard to that corporation.
   50    (v) If a captive REIT owns the stock of a  qualified  REIT  subsidiary
   51  (as  defined in paragraph two of subsection (i) of section eight hundred
   52  fifty-six of the internal revenue code), then the qualified REIT subsid-
   53  iary must be included in a combined report with the captive REIT.
   54    (vi) If a captive REIT or a captive RIC is required under this subpar-
   55  agraph to be included in a combined report with another corporation, and
   56  that other corporation is also required to be  included  in  a  combined
       S. 6359--D                         119                        A. 8559--D

    1  report with another related corporation or corporations under this para-
    2  graph, then the captive REIT or the captive RIC must be included in that
    3  combined report with those corporations.
    4    (vii)  If  a  captive  REIT  or  a  captive  RIC is not required to be
    5  included in a combined report with another corporation under clause (ii)
    6  or (iii) of this  subparagraph,  or  in  a  combined  return  under  the
    7  provisions of either subparagraph (v) of paragraph two of subsection (f)
    8  of  section  fourteen hundred sixty-two or paragraph four of subdivision
    9  (f) of section fifteen hundred fifteen of this chapter, then the captive
   10  REIT or captive RIC is subject to the opening provisions of  this  para-
   11  graph  and  the  provisions  of subparagraph four of this paragraph. The
   12  captive REIT or captive RIC must be included in a combined report  under
   13  this  article  with another corporation if either the substantial inter-
   14  corporate transactions requirement in the  opening  provisions  of  this
   15  paragraph or the inter-company transactions or agreement, understanding,
   16  arrangement  or  transaction  requirement  of  subparagraph four of this
   17  paragraph is satisfied and more than fifty percent of the  voting  stock
   18  of  the  captive  REIT  or  the captive RIC and substantially all of the
   19  capital stock of  that  other  corporation  are  owned  and  controlled,
   20  directly or indirectly, by the same corporation.
   21    (7)  (i) For purposes of this subparagraph, the term "closest control-
   22  ling stockholder" means the corporation that indirectly owns or controls
   23  over fifty percent of the voting stock  of  an  overcapitalized  captive
   24  insurance company; is subject to tax under this article or article thir-
   25  ty-two  of  this  chapter,  or is otherwise required to be included in a
   26  combined return or report under this article or  article  thirty-two  of
   27  this chapter; and is the fewest tiers of corporations away in the owner-
   28  ship  structure from the overcapitalized captive insurance company.  The
   29  commissioner is authorized to prescribe by regulation or published guid-
   30  ance the criteria for determining the closest controlling stockholder.
   31    (ii) An overcapitalized captive insurance company must be included  in
   32  a  combined  report  with the corporation that directly owns or controls
   33  over fifty percent of the voting stock of  the  overcapitalized  captive
   34  insurance  company  if that corporation is subject to tax or required to
   35  be included in a combined report under this article.
   36    (iii) If over fifty percent of the voting stock of an  overcapitalized
   37  captive  insurance  company  is  not  directly  owned or controlled by a
   38  corporation that is subject to tax or  required  to  be  included  in  a
   39  combined  report  under  this  article, then the overcapitalized captive
   40  insurance company must be included in a combined return or  report  with
   41  the corporation that is the closest controlling stockholder of the over-
   42  capitalized captive insurance company. If the closest controlling stock-
   43  holder  of  the  overcapitalized captive insurance company is subject to
   44  tax or otherwise required to be included in a combined report under this
   45  article, then the overcapitalized  captive  insurance  company  must  be
   46  included in a combined report under this article.
   47    (iv)  If  the  corporation  that  directly owns or controls the voting
   48  stock of the overcapitalized captive insurance company is  described  in
   49  subparagraph  two, three, or five of this paragraph as a corporation not
   50  permitted to make a combined report, then the provisions in clause (iii)
   51  of this subparagraph must be applied to  determine  the  corporation  in
   52  whose  combined  return  or report the overcapitalized captive insurance
   53  company should be included. If, under clause (iii) of this subparagraph,
   54  the corporation that is the closest controlling stockholder of the over-
   55  capitalized captive insurance company is described in subparagraph  two,
   56  three or five of this paragraph as a corporation not permitted to make a
       S. 6359--D                         120                        A. 8559--D

    1  combined return, then that corporation is deemed not to be in the owner-
    2  ship structure of the overcapitalized captive insurance company, and the
    3  closest  controlling  stockholder  will  be determined without regard to
    4  that corporation.
    5    (v)  If an overcapitalized captive insurance company is required under
    6  this subparagraph to be included  in  a  combined  report  with  another
    7  corporation,  and that other corporation is also required to be included
    8  in a combined report with another related  corporation  or  corporations
    9  under this paragraph, then the overcapitalized captive insurance company
   10  must be included in that combined report with those corporations.
   11    (vi)  If  an overcapitalized captive insurance company is not required
   12  to be included in a  combined  report  with  another  corporation  under
   13  clause (ii) or (iii) of this subparagraph, or in a combined return under
   14  the provisions of subparagraph (v) of paragraph two of subsection (f) of
   15  section  fourteen  hundred sixty-two of this chapter, then the overcapi-
   16  talized captive insurance company is subject to the  opening  provisions
   17  of  this paragraph and the provisions of subparagraph four of this para-
   18  graph. The overcapitalized captive insurance company must be included in
   19  a combined report under this article with another corporation if  either
   20  the  substantial  intercorporate transactions requirement in the opening
   21  provisions of this paragraph or the inter-company transactions or agree-
   22  ment, understanding, arrangement or transaction requirement of  subpara-
   23  graph  four  of  this  paragraph  is satisfied, and both more than fifty
   24  percent of the voting stock of  the  overcapitalized  captive  insurance
   25  company  and substantially all of the capital stock of that other corpo-
   26  ration are owned and controlled, directly or  indirectly,  by  the  same
   27  corporation.
   28    (b) Computation. (1) Tax. (i) In the case of a combined report the tax
   29  shall  be  measured  by the combined entire net income, combined minimum
   30  taxable income, combined pre-nineteen  hundred  ninety  minimum  taxable
   31  income  or  combined  capital,  of  all the corporations included in the
   32  report, including any  captive  REIT,  captive  RIC  or  overcapitalized
   33  captive  insurance company; provided, however, in no event shall the tax
   34  measured by combined capital exceed the limitation provided for in para-
   35  graph (b) of subdivision one of section two hundred ten of this article.
   36    (ii) In the case of a captive REIT or captive RIC required under  this
   37  subdivision  to be included in a combined report, entire net income must
   38  be computed as required under subdivision five (in the case of a captive
   39  REIT) or subdivision seven (in the case of a captive RIC) of section two
   40  hundred nine of this article. However, the deduction under the  internal
   41  revenue  code  for  dividends paid by the captive REIT or captive RIC to
   42  any member of the affiliated group that includes  the  corporation  that
   43  directly  or  indirectly  owns over fifty percent of the voting stock of
   44  the captive REIT or captive RIC shall not be allowed for  taxable  years
   45  beginning  on  or  after  January  first,  two  thousand eight. The term
   46  "affiliated group"  means  "affiliated  group"  as  defined  in  section
   47  fifteen hundred four of the internal revenue code, but without regard to
   48  the exceptions provided for in subsection (b) of that section.
   49    (iii)  In  the  case  of  an overcapitalized captive insurance company
   50  required under this subdivision to be included  in  a  combined  report,
   51  entire  net  income  must be computed as required by subdivision nine of
   52  section two hundred eight of this article.
   53    (2) Tax bases. In computing combined entire net income, combined mini-
   54  mum taxable income or combined pre-nineteen hundred ninety minimum taxa-
   55  ble income intercorporate dividends shall be  eliminated,  in  computing
   56  combined  business  and  investment capital intercorporate stockholdings
       S. 6359--D                         121                        A. 8559--D

    1  and intercorporate bills, notes and accounts receivable and payable  and
    2  other  intercorporate  indebtedness shall be eliminated and in computing
    3  combined subsidiary capital intercorporate stockholdings shall be elimi-
    4  nated, provided, however, that intercorporate dividends from a DISC or a
    5  former  DISC not exempt from tax under paragraph (i) of subdivision nine
    6  of section two hundred eight of this article which are taxable as  busi-
    7  ness income under this article shall not be eliminated.
    8    (3)  Air freight forwarders: allocation. Notwithstanding any provision
    9  of law to the contrary, where a combined report includes a qualified air
   10  freight forwarder and a corporation described in subparagraph  seven  of
   11  paragraph  (a)  of  subdivision three of section two hundred ten of this
   12  chapter (relating to aviation corporations), in computing  the  combined
   13  business  allocation percentage such subparagraph seven shall be applied
   14  with respect to such qualified air  freight  forwarder]  FOR  PROVISIONS
   15  RELATING  TO  COMBINED  REPORTS,  SEE  SECTION TWO HUNDRED TEN-C OF THIS
   16  ARTICLE.
   17    5. In case it shall appear to the [tax commission]  COMMISSIONER  that
   18  any  agreement, understanding or arrangement exists between the taxpayer
   19  and any other corporation or any person or firm, whereby  the  activity,
   20  business,  income or capital of the taxpayer within the state is improp-
   21  erly or inaccurately reflected, the  [tax  commission]  COMMISSIONER  is
   22  authorized  and empowered, in [its] THE COMMISSIONER'S discretion and in
   23  such manner as [it] THE COMMISSIONER may determine, to adjust  items  of
   24  income, deductions and capital, and to eliminate assets in computing any
   25  [allocation]  APPORTIONMENT  percentage  provided  only  that any income
   26  directly traceable thereto be also  excluded  from  entire  net  income,
   27  [minimum  taxable  income or pre-nineteen hundred ninety minimum taxable
   28  income,] so as equitably to determine the tax. Where  (a)  any  taxpayer
   29  conducts  its  activity  or business under any agreement, arrangement or
   30  understanding in such manner as either directly or indirectly to benefit
   31  its members or stockholders, or any of them, or any  person  or  persons
   32  directly  or  indirectly  interested  in  such  activity or business, by
   33  entering into any transaction at more or less than a fair  price  which,
   34  but  for  such  agreement, arrangement or understanding, might have been
   35  paid or received therefor, or (b) any taxpayer, a substantial portion of
   36  whose capital stock is owned either directly or  indirectly  by  another
   37  corporation,  enters into any transaction with such other corporation on
   38  such terms as to create an improper loss or net income, the [tax commis-
   39  sion] COMMISSIONER may include in the entire net income[, minimum  taxa-
   40  ble income or pre-nineteen hundred ninety minimum taxable income] of the
   41  taxpayer  the fair profits which, but for such agreement, arrangement or
   42  understanding, the taxpayer might have derived  from  such  transaction.
   43  WHERE ANY TAXPAYER OWNS, DIRECTLY OR INDIRECTLY, MORE THAN FIFTY PERCENT
   44  OF THE CAPITAL STOCK OF ANOTHER CORPORATION SUBJECT TO TAX UNDER SECTION
   45  FIFTEEN HUNDRED TWO-A OF THIS CHAPTER AND FIFTY PERCENT OR LESS OF WHOSE
   46  GROSS RECEIPTS FOR THE TAXABLE YEAR CONSIST OF PREMIUMS, THE COMMISSION-
   47  ER  MAY  INCLUDE  IN  THE ENTIRE NET INCOME OF THE TAXPAYER, AS A DEEMED
   48  DISTRIBUTION, THE AMOUNT OF THE NET INCOME OF THE OTHER CORPORATION THAT
   49  IS IN EXCESS OF ITS NET PREMIUM INCOME.
   50    S 19-a. Subdivision 13 of section 211 of the tax law is REPEALED.
   51    S 20.  Subdivision 11 of section 2 of the tax law, as added by section
   52  1 of part E-1 of chapter 57 of the laws of 2009, is amended to  read  as
   53  follows:
   54    11.  The term "[overcapitalized] COMBINABLE captive insurance company"
   55  means an entity that is treated as an association taxable  as  a  corpo-
   56  ration  under  the  internal revenue code (a) more than fifty percent of
       S. 6359--D                         122                        A. 8559--D

    1  the voting stock of which is owned or controlled, directly or  indirect-
    2  ly,  by  a  single entity that is treated as an association taxable as a
    3  corporation under the internal revenue code and not exempt from  federal
    4  income  tax;  (b)  that is licensed as a captive insurance company under
    5  the laws of this state  or  another  jurisdiction;  (c)  whose  business
    6  includes  providing,  directly  and indirectly, insurance or reinsurance
    7  covering the risks of its parent and/or members of its affiliated group;
    8  and (d) fifty percent or less of whose gross receipts  for  the  taxable
    9  year consist of premiums FROM ARRANGEMENTS THAT CONSTITUTE INSURANCE FOR
   10  FEDERAL  INCOME  TAX PURPOSES. For purposes of this subdivision, "affil-
   11  iated group" has the same meaning as that term is given in section  1504
   12  of the internal revenue code, except that the term "common parent corpo-
   13  ration"  in  that  section  is  deemed to mean any person, as defined in
   14  section 7701 of the internal revenue code[;] AND references to "at least
   15  eighty percent" in section 1504 of the internal revenue code are  to  be
   16  read  as  "fifty  percent or more;" section 1504 of the internal revenue
   17  code is to be read without regard to  the  exclusions  provided  for  in
   18  subsection  (b) of that section; "premiums" has the same meaning as that
   19  term is given in paragraph one of subdivision  (c)  of  section  fifteen
   20  hundred  ten  of this chapter, except that it includes consideration for
   21  annuity contracts and excludes any part of the consideration for  insur-
   22  ance,  reinsurance  or  annuity  contracts that do not provide bona fide
   23  insurance,  reinsurance  or  annuity  benefits;  and  "gross   receipts"
   24  includes  the amounts included in gross receipts for purposes of section
   25  501(c) (15) of the internal revenue code, except that those amounts also
   26  include all premiums as defined in this subdivision.
   27    S 21. Subdivision (a) of section 1500 of the tax  law,  as  separately
   28  amended by section 1 of part B-1 and section 8 of part E-1 of chapter 57
   29  of the laws of 2009, is amended to read as follows:
   30    (a)  The  term "insurance corporation" includes a corporation, associ-
   31  ation, joint stock company or association, person, society,  aggregation
   32  or  partnership,  by  whatever  name known, doing an insurance business,
   33  and, notwithstanding the provisions of section fifteen hundred twelve of
   34  this article, shall include (1) a risk retention  group  as  defined  in
   35  subsection  (n)  of section five thousand nine hundred two of the insur-
   36  ance law, (2) the state insurance fund and (3)  a  corporation,  associ-
   37  ation,  joint stock company or association, person, society, aggregation
   38  or partnership doing an insurance business as a member of the  New  York
   39  insurance  exchange described in section six thousand two hundred one of
   40  the  insurance  law.  The  definition  of  the  "state  insurance  fund"
   41  contained  in  this  subdivision  shall  be limited in its effect to the
   42  provisions of this article and the related provisions  of  this  chapter
   43  and  shall  have  no  force  and  effect other than with respect to such
   44  provisions. The  term  "insurance  corporation"  shall  also  include  a
   45  captive insurance company doing a captive insurance business, as defined
   46  in  subsections (c) and (b), respectively, of section seven thousand two
   47  of the insurance law; provided, however, "insurance  corporation"  shall
   48  not include the metropolitan transportation authority, or a public bene-
   49  fit  corporation  or  not-for-profit corporation formed by a city with a
   50  population of one million or more pursuant to subsection (a) of  section
   51  seven  thousand  five  of  the insurance law, each of which is expressly
   52  exempt from the payment of fees, taxes or assessments, whether state  or
   53  local; and provided further "insurance corporation" does not include any
   54  [overcapitalized] COMBINABLE captive insurance company. The term "insur-
   55  ance  corporation"  shall also include an unauthorized insurer operating
   56  from  an  office  within  the  state,  pursuant  to  paragraph  five  of
       S. 6359--D                         123                        A. 8559--D

    1  subsection  (b)  of  section one thousand one hundred one and subsection
    2  (i) of section two thousand one hundred seventeen of the insurance  law.
    3  The  term  "insurance  corporation"  also  includes a health maintenance
    4  organization required to obtain a certificate of authority under article
    5  forty-four of the public health law.
    6    S  22. Subdivision (a) of section 1502-b of the tax law, as amended by
    7  section 9 of part E-1 of chapter 57 of the laws of 2009 and  as  further
    8  amended  by  section 104 of part A of chapter 62 of the laws of 2011, is
    9  amended to read as follows:
   10    (a) In lieu of the taxes and tax surcharge imposed by sections fifteen
   11  hundred one, fifteen hundred two-a, fifteen hundred five-a, and  fifteen
   12  hundred ten of this article, every captive insurance company licensed by
   13  the  superintendent  of financial services pursuant to the provisions of
   14  article seventy of the insurance law, other than the metropolitan trans-
   15  portation authority and a public benefit corporation  or  not-for-profit
   16  corporation  formed  by  a city with a population of one million or more
   17  pursuant to subsection (a) of section seven thousand five of the  insur-
   18  ance  law,  each  of which is expressly exempt from the payment of fees,
   19  taxes or assessments whether state or local, and other than [an overcap-
   20  italized] COMBINABLE captive insurance company, shall, for the privilege
   21  of exercising its corporate franchise, pay a tax on (1) all gross direct
   22  premiums, less return premiums thereon,  written  on  risks  located  or
   23  resident  in  this  state and (2) all assumed reinsurance premiums, less
   24  return premiums thereon, written on risks located or  resident  in  this
   25  state.  The  rate  of  the tax imposed on gross direct premiums shall be
   26  four-tenths of one percent on all  or  any  part  of  the  first  twenty
   27  million  dollars  of premiums, three-tenths of one percent on all or any
   28  part of the second twenty million dollars of premiums, two-tenths of one
   29  percent on all or any part of the third twenty million dollars of premi-
   30  ums, and seventy-five thousandths of  one  percent  on  each  dollar  of
   31  premiums thereafter. The rate of the tax on assumed reinsurance premiums
   32  shall  be  two  hundred twenty-five thousandths of one percent on all or
   33  any part of the first twenty million dollars of  premiums,  one  hundred
   34  and  fifty  thousandths  of one percent on all or any part of the second
   35  twenty million dollars of premiums, fifty thousandths of one percent  on
   36  all  or  any  part  of  the third twenty million dollars of premiums and
   37  twenty-five thousandths of one percent on each dollar of premiums there-
   38  after. The tax imposed by this section shall be equal to the greater  of
   39  (i)  the  sum  of  the  tax imposed on gross direct premiums and the tax
   40  imposed on assumed reinsurance premiums or (ii) five thousand dollars.
   41    S 23. Paragraph 4 of subdivision (f) of section 1515 of the  tax  law,
   42  as amended by section 16 of part FF-1 of chapter 57 of the laws of 2008,
   43  is amended to read as follows:
   44    (4)(i)  For  purposes of this paragraph, the term "closest controlling
   45  stockholder" means the corporation that indirectly owns or controls over
   46  fifty percent of the voting stock of a captive REIT or captive  RIC,  is
   47  subject  to  tax under section fifteen hundred one of this article[,] OR
   48  article nine-A [or article thirty-two] of this chapter or required to be
   49  included in a combined return or report under this article[,] OR article
   50  nine-A [or article thirty-two] of this chapter, and is the fewest  tiers
   51  of corporations away in the ownership structure from the captive REIT or
   52  captive  RIC.  The commissioner is authorized to prescribe by regulation
   53  or published guidance the criteria for determining the closest  control-
   54  ling stockholder.
   55    (ii)  A  captive  REIT or a captive RIC must be included in a combined
   56  return with the corporation that directly owns or  controls  over  fifty
       S. 6359--D                         124                        A. 8559--D

    1  percent  of  the voting stock of the captive REIT or captive RIC if that
    2  corporation is a life insurance corporation and is  subject  to  tax  or
    3  required to be included in a combined return under this article.
    4    (iii)  If  over fifty percent of the voting stock of a captive REIT or
    5  captive RIC is not directly owned or  controlled  by  a  life  insurance
    6  corporation  that  is  subject  to  tax  or required to be included in a
    7  combined return under this article, [then the captive  REIT  or  captive
    8  RIC must be included in a combined report or return with the corporation
    9  that  is  the  closest  controlling  stockholder  of the captive REIT or
   10  captive RIC. If] AND the closest controlling stockholder of the  captive
   11  REIT  or  captive RIC is a life insurance corporation that is subject to
   12  tax or required to be included in a combined return under this  article,
   13  then  the  captive  REIT  or  captive RIC must be included in a combined
   14  return WITH THE CLOSEST CONTROLLING STOCKHOLDER under this article.
   15    (iv) If a captive REIT owns the stock of a qualified  REIT  subsidiary
   16  (as  defined in paragraph two of subsection (i) of section eight hundred
   17  fifty-six of the internal revenue code) AND THE CAPTIVE REIT IS REQUIRED
   18  TO BE INCLUDED IN A COMBINED RETURN UNDER SUBPARAGRAPHS (II) OR (III) OF
   19  THIS PARAGRAPH, then the qualified REIT subsidiary must be  included  in
   20  any  combined  return  required to be made by the captive REIT that owns
   21  the stock of the qualified REIT subsidiary.
   22    (v) If a captive REIT or a captive RIC is required  under  this  para-
   23  graph  to be included in a combined return with another corporation, and
   24  that other corporation is required to be included in a  combined  return
   25  with  another  [related]  corporation  under  this subdivision, then the
   26  captive REIT or the captive RIC must be included in that combined return
   27  with the other [related] corporation.
   28    S 24. Subdivisions (a), (b) and (c) of section 12 of the tax  law,  as
   29  added  by  chapter  615  of  the  laws  of  1998, are amended to read as
   30  follows:
   31    (a) For purposes of subdivision (b) of this section, the term "person"
   32  shall mean a corporation, joint stock company or association,  insurance
   33  corporation,  or  banking  corporation,  as  such  terms  are defined in
   34  section one  hundred  eighty-three,  one  hundred  eighty-four,  or  one
   35  hundred  eighty-six,  or in article nine-A[, thirty-two] or thirty-three
   36  of this chapter, imposing tax on such entities.
   37    (b) No person shall be subject to the taxes imposed under section  one
   38  hundred eighty-three, one hundred eighty-four or one hundred eighty-six,
   39  or  article nine-A[, thirty-two] or thirty-three of this chapter, solely
   40  by reason of (1)  having its advertising stored on  a  server  or  other
   41  computer  equipment  located in this state (other than a server or other
   42  computer equipment owned or leased by such person), or  (2)  having  its
   43  advertising  disseminated  or displayed on the Internet by an individual
   44  or entity subject to tax under section  one  hundred  eighty-three,  one
   45  hundred  eighty-four or one hundred eighty-six, or article nine-A, twen-
   46  ty-two[, thirty-two] or thirty-three of this chapter.
   47    (c) A person, as such term is defined in subdivision  (a)  of  section
   48  eleven  hundred one of this chapter, shall not be deemed to be a vendor,
   49  for purposes of article twenty-eight of this chapter, solely  by  reason
   50  of  (1)    having  its  advertising stored on a server or other computer
   51  equipment located in this state (other than a server or  other  computer
   52  equipment owned or leased by such person), or (2) having its advertising
   53  disseminated  or  displayed  on  the Internet by an individual or entity
   54  subject to tax under  section  one  hundred  eighty-three,  one  hundred
   55  eighty-four  or  one hundred eighty-six, or article nine-A, twenty-two[,
   56  thirty-two] or thirty-three of this chapter.
       S. 6359--D                         125                        A. 8559--D

    1    S 25. Paragraph 1 of subdivision (a) of section 14 of the tax law,  as
    2  amended  by  section 3 of part V1 of chapter 109 of the laws of 2006, is
    3  amended to read as follows:
    4    (1)  except as provided in paragraphs one-a and one-b of this subdivi-
    5  sion, for purposes of section one hundred  eighty-seven-j  and  articles
    6  nine-A,  twenty-two[,  thirty-two] and thirty-three of this chapter, for
    7  each of the taxable years within  the  "business  tax  benefit  period,"
    8  which  period  shall consist of (A) in the case of a business enterprise
    9  with a test date occurring on or before December thirty-first, two thou-
   10  sand one, the first fifteen taxable years beginning on or after  January
   11  first, two thousand one, (B) in the case of a business enterprise with a
   12  test  date  occurring  on  or after January first, two thousand two, but
   13  prior to April first, two thousand five, the fifteen taxable years  next
   14  following  the business enterprise's test year, and (C) in the case of a
   15  business enterprise which is first certified under article eighteen-B of
   16  the general municipal law on or after April first,  two  thousand  five,
   17  the  ten taxable years starting with the taxable year in which the busi-
   18  ness enterprise's first date of certification under  article  eighteen-B
   19  of  the  general  municipal law occurs, but only with respect to each of
   20  such business tax benefit period years for which the employment test  is
   21  met,
   22    S  26.  Subdivision  (f)  of  section 14 of the tax law, as amended by
   23  section 10 of part CC of chapter 85 of the laws of 2002, is  amended  to
   24  read as follows:
   25    (f)  Taxable  year.  The term "taxable year" means the taxable year of
   26  the business enterprise under  section  one  hundred  eighty-three,  one
   27  hundred  eighty-four,  one  hundred  eighty-five  or  former section one
   28  hundred eighty-six of article nine, or  under  article  nine-A,  twenty-
   29  two[,  thirty-two] or thirty-three of this chapter. If a business enter-
   30  prise does not have a taxable year because it is exempt from taxation or
   31  otherwise not required to file a return under any of  such  sections  of
   32  article  nine or under article nine-A, twenty-two[, thirty-two] or thir-
   33  ty-three, then the term "taxable year" means  (i)  the  business  enter-
   34  prise's federal taxable year, or, (ii) if the enterprise does not have a
   35  federal taxable year, the calendar year.
   36    S  27. Paragraph 1 of subdivision (i) of section 14 of the tax law, as
   37  amended by section 5 of part A of chapter 63 of the  laws  of  2005,  is
   38  amended to read as follows:
   39    (1)  for  purposes  of  section  one hundred eighty-seven-j of article
   40  nine, and articles nine-A, twenty-two[, thirty-two] and thirty-three  of
   41  this  chapter, on the first day of the taxable year during which revoca-
   42  tion of its certification under article eighteen-B of the general munic-
   43  ipal law occurs, and
   44    S 28. Paragraphs 1 and 2 of subdivision (j) of section 14 of  the  tax
   45  law,  as  amended  by section 10 of part CC of chapter 85 of the laws of
   46  2002, are amended to read as follows:
   47    (1) A new business shall include any corporation, except a corporation
   48  which is substantially similar in operation and in ownership to a  busi-
   49  ness  entity (or entities) taxable, or previously taxable, under section
   50  one hundred eighty-three, one hundred eighty-four, one  hundred  eighty-
   51  five or one hundred eighty-six of article nine; article nine-A[, article
   52  thirty-two]  or  thirty-three  of  this chapter; article twenty-three of
   53  this chapter or which would have been subject to tax under such  article
   54  twenty-three  (as  such article was in effect on January first, nineteen
   55  hundred eighty), ARTICLE THIRTY-TWO OF THIS CHAPTER OR WHICH WOULD  HAVE
   56  BEEN  SUBJECT  TO TAX UNDER SUCH ARTICLE THIRTY-TWO (AS SUCH ARTICLE WAS
       S. 6359--D                         126                        A. 8559--D

    1  IN EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN) or the income
    2  (or losses) of which is (or was) includable under article twenty-two  of
    3  this chapter.
    4    (2)  For purposes of article twenty-two of this chapter, an individual
    5  who is either a sole proprietor or a member of a partnership shall qual-
    6  ify as an owner of a new business unless the business of which the indi-
    7  vidual is an owner is substantially similar in operation and  in  owner-
    8  ship  to a business entity taxable, or previously taxable, under section
    9  one hundred eighty-three, one hundred eighty-four, one  hundred  eighty-
   10  five  or  one hundred eighty-six of article nine; article nine-A[, thir-
   11  ty-two] or ARTICLE thirty-three of this chapter; article twenty-three of
   12  this chapter or which would have been subject to tax under such  article
   13  twenty-three  (as  such article was in effect on January first, nineteen
   14  hundred eighty); ARTICLE THIRTY-TWO OF THIS CHAPTER OR WHICH WOULD  HAVE
   15  BEEN SUBJECT TO TAX UNDER SUCH ARTICLE THIRTY-TWO AS SUCH ARTICLE WAS IN
   16  EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN or the income (or
   17  losses) of which is (or was) includable under article twenty-two.
   18    S  29.  Clauses  (i)  and  (ii)  of subparagraph (A) of paragraph 4 of
   19  subdivision (j) of section 14 of the tax law, as added by section  5  of
   20  part  A  of  chapter  63  of  the  laws  of 2005, are amended to read as
   21  follows:
   22    (i) Notwithstanding paragraphs one and two of this subdivision, a  new
   23  business  shall  include any corporation which is identical in operation
   24  and ownership to a business entity (or entities) taxable  under  section
   25  one  hundred eighty-three, one hundred eighty-four or one hundred eight-
   26  y-five of article nine; article nine-A[, article thirty-two] or  thirty-
   27  three  of  this chapter or the income (or losses) of which is includable
   28  under article twenty-two of this chapter, provided such corporation  and
   29  such  business entity or entities are operating in different counties in
   30  the state.
   31    (ii) Notwithstanding paragraphs one and two of  this  subdivision,  an
   32  individual  who is either a sole proprietor or a member of a partnership
   33  shall qualify as an owner of a new business if the business of which the
   34  individual is an owner is identical in operation and in ownership  to  a
   35  business  entity (or entities) taxable under section one hundred eighty-
   36  three, one hundred eighty-four or one  hundred  eighty-five  of  article
   37  nine; article nine-A[, article thirty-two] or thirty-three of this chap-
   38  ter or the income (or losses) of which is includable under article twen-
   39  ty-two  of this chapter, provided such business and such business entity
   40  or entities are operating in different counties in the state.
   41    S 30. Subparagraph (B) of paragraph 4 of subdivision (j) of section 14
   42  of the tax law, as amended by chapter  161  of  the  laws  of  2005,  is
   43  amended to read as follows:
   44    (B) Notwithstanding any provisions of this subdivision to the contrary
   45  and  notwithstanding  subdivision  c  of  section eighteen of part CC of
   46  chapter eighty-five of the laws of two thousand two,  a  corporation  or
   47  partnership,  which  was first certified under article eighteen-B of the
   48  general municipal law before August first, two thousand two, has a  base
   49  period  of  zero  years  or  zero employment for its base period, and is
   50  similar in operation and in ownership to a business entity  or  entities
   51  taxable,  or  previously  taxable, under sections specified in paragraph
   52  one or two of this subdivision or which would have been subject  to  tax
   53  under  article  twenty-three  of  this  chapter  (as such article was in
   54  effect on January first, nineteen hundred eighty) OR  WHICH  WOULD  HAVE
   55  BEEN  SUBJECT  TO  TAX UNDER ARTICLE THIRTY-TWO OF THIS CHAPTER (AS SUCH
   56  ARTICLE WAS IN EFFECT ON DECEMBER THIRTY-FIRST, TWO  THOUSAND  FOURTEEN)
       S. 6359--D                         127                        A. 8559--D

    1  or  the  income  or  losses  of which is or was includable under article
    2  twenty-two of this chapter shall not be deemed a new business if it  was
    3  not  formed  for  a  valid  business purpose, as such term is defined in
    4  clause  (D)  of subparagraph one of paragraph (o) of subdivision nine of
    5  section two hundred eight of this chapter and was formed solely to  gain
    6  empire zone benefits.
    7    S  31.  Subdivision  (k)  of  section 14 of the tax law, as amended by
    8  section 5 of part A of chapter 63 of the laws of  2005,  is  amended  to
    9  read as follows:
   10    (k)  If  the  designation of an area as an empire zone is no longer in
   11  effect because section nine hundred sixty-nine of the general  municipal
   12  law  was not amended to extend the effective date of such designation so
   13  that the designations of all empire zones pursuant to article eighteen-B
   14  of the general municipal law have expired, a  business  enterprise  that
   15  was  certified  pursuant  to article eighteen-B of the general municipal
   16  law on the day immediately preceding the day on which  such  designation
   17  expired  shall  be deemed to continue to be certified under such article
   18  eighteen-B for purposes of this section, and sections fifteen,  sixteen,
   19  section one hundred eighty-seven-j, subdivisions [twenty-seven] FIVE and
   20  [twenty-eight]  SIX of section two hundred [ten] TEN-B, subsections (bb)
   21  and (cc) of section six hundred six, subdivision (z) of  section  eleven
   22  hundred  fifteen[,  subsections  (o) and (p) of section fourteen hundred
   23  fifty-six,] and subdivisions (r) and  (s)  of  section  fifteen  hundred
   24  eleven of this chapter. In addition, if the designation of an area as an
   25  empire  zone  is no longer in effect because section nine hundred sixty-
   26  nine of the general municipal law was not amended to extend  the  effec-
   27  tive  date  of  such  designation so that the designations of all empire
   28  zones pursuant to article eighteen-B of the general municipal  law  have
   29  expired,  all references to empire zones in the provisions of this chap-
   30  ter listed in the previous sentence  shall  be  read  as  meaning  areas
   31  designated  as  empire zones on the day immediately preceding the day on
   32  which such designation expired.
   33    S 32. Subdivisions (a) and (h) of  section  15  of  the  tax  law,  as
   34  amended  by  section  5 of part A of chapter 63 of the laws of 2005, are
   35  amended to read as follows:
   36    (a) Allowance of credit. A taxpayer which is a qualified  empire  zone
   37  enterprise  (QEZE),  or which is a sole proprietor of a QEZE or a member
   38  of a partnership which is a QEZE, and which  is  subject  to  tax  under
   39  article  nine-A,  twenty-two[, thirty-two] or thirty-three of this chap-
   40  ter, shall be allowed  a  credit  against  such  tax,  pursuant  to  the
   41  provisions  referenced  in subdivision (h) of this section, for eligible
   42  real property taxes.
   43    (h) Definitions and cross-references. For definitions of terms used in
   44  this section see section fourteen of this article.  For  application  of
   45  the credit provided for in this section, see the following provisions of
   46  this chapter:
   47    (1) Article 9: Section 187-j.
   48    (2) Article 9-A: Section [210] 210-B: subdivision [27] 5.
   49    (3) Article 22: Section 606: subsections (i) and (bb).
   50    (4) [Article 32: Section 1456: subsection (o).
   51    (5)] Article 33: Section 1511: subdivision (r).
   52    S  33.  Subdivision  (a)  of  section  16  of the tax law, as added by
   53  section 2 of part GG of chapter 63 of the laws of 2000,  is  amended  to
   54  read as follows:
   55    (a)  Allowance  of credit. A taxpayer which is a qualified empire zone
   56  enterprise (QEZE), or which is a sole proprietor of a QEZE or  a  member
       S. 6359--D                         128                        A. 8559--D

    1  of  a  partnership  which  is  a QEZE, and which is subject to tax under
    2  article nine-A, twenty-two[, thirty-two] or thirty-three of  this  chap-
    3  ter,  shall  be  allowed  a  credit  against  such  tax, pursuant to the
    4  provisions referenced in subdivision (g) of this section, to be computed
    5  as hereinafter provided.
    6    S 34. Paragraph 1, clause (ii) of subparagraph (B) of paragraph 2, and
    7  subparagraph  (A) of paragraph 3 of subdivision (f) of section 16 of the
    8  tax law, as amended by section 14 of part CC of chapter 85 of  the  laws
    9  of 2002, are amended to read as follows:
   10    (1) General. The tax factor shall be, in the case of article nine-A of
   11  this  chapter,  the [larger of the amounts] AMOUNT of tax determined for
   12  the taxable year under [paragraphs] PARAGRAPH (a) [and (c)] of  subdivi-
   13  sion  one  of  section  two  hundred ten of such article. The tax factor
   14  shall be, in the case of article twenty-two of  this  chapter,  the  tax
   15  determined  for  the  taxable  year under subsections (a) through (d) of
   16  section six hundred one of such article. [The tax factor  shall  be,  in
   17  the  case  of  article  thirty-two  of  this  chapter, the larger of the
   18  amounts of tax determined for the taxable year under subsection (a)  and
   19  paragraph  two  of subsection (b) of section fourteen hundred fifty-five
   20  of such article.] The tax factor shall be, in the case of article  thir-
   21  ty-three  of  this  chapter, the larger of the amounts of tax determined
   22  for the taxable year under paragraphs one and three of  subdivision  (a)
   23  of section fifteen hundred two of such article.
   24    (ii)  For  purposes of article nine-A[, thirty-two or thirty-three] of
   25  this chapter, the term "partner's income  from  the  partnership"  means
   26  partnership  items  of  income,  gain,  loss and deduction, and New York
   27  modifications thereto, entering  into  [entire  net]  BUSINESS  income[,
   28  minimum  taxable  income,  alternative  entire  net income or entire net
   29  income plus compensation] and the term "partner's entire  income"  means
   30  [entire  net]  BUSINESS  income[,  minimum  taxable  income, alternative
   31  entire net income or entire net  income  plus  compensation,]  allocated
   32  within the state.  FOR PURPOSES OF ARTICLE THIRTY-THREE OF THIS CHAPTER,
   33  THE TERM "PARTNER'S INCOME FROM THE PARTNERSHIP" MEANS PARTNERSHIP ITEMS
   34  OF INCOME, GAIN, LOSS AND DEDUCTION, AND NEW YORK MODIFICATIONS THERETO,
   35  ENTERING  INTO  ENTIRE NET INCOME OR ENTIRE NET INCOME PLUS COMPENSATION
   36  AND THE TERM "PARTNER'S ENTIRE  INCOME"  MEANS  ENTIRE  NET  INCOME,  OR
   37  ENTIRE  NET  INCOME  PLUS  COMPENSATION, ALLOCATED WITHIN THE STATE. For
   38  purposes of article twenty-two of  this  chapter,  the  term  "partner's
   39  income  from  the  partnership" means partnership items of income, gain,
   40  loss and deduction, and New York modifications  thereto,  entering  into
   41  New  York  adjusted gross income, and the term "partner's entire income"
   42  means New York adjusted gross income.
   43    (A) Where the taxpayer is a qualified empire zone  enterprise  and  is
   44  required  or  permitted  to  make a return or report on a combined basis
   45  under article nine-A[, thirty-two] or ARTICLE thirty-three of this chap-
   46  ter, the taxpayer's tax factor shall be the amount determined  in  para-
   47  graph one of this subdivision which is attributable to the income of the
   48  qualified  empire  zone  enterprise.   Such attribution shall be made in
   49  accordance with the ratio of  the  qualified  empire  zone  enterprise's
   50  income  allocated within the state to the combined group's income, or in
   51  accordance with such other methods as the commissioner may prescribe  as
   52  providing  an apportionment which reasonably reflects the portion of the
   53  combined group's tax attributable to the income of the qualified  empire
   54  zone enterprise. In no event may the ratio so determined exceed 1.0.
       S. 6359--D                         129                        A. 8559--D

    1    S  35.  Subdivision  (g)  of  section  16  of the tax law, as added by
    2  section 2 of part GG of chapter 63 of the laws of 2000,  is  amended  to
    3  read as follows:
    4    (g) Definitions and cross-references. For definitions of terms used in
    5  this  section  see  sections  fourteen  and fifteen of this article. For
    6  application of the credit provided for in this section, see the  follow-
    7  ing provisions of this chapter:
    8    (1) Article 9-A: Section [210] 210-B:  subdivision [28]6.
    9    (2) Article 22: Section 606: subsections (i) and (cc).
   10    (3) [Article 32: Section 1456: subsection (p).
   11    (4)] Article 33: Section 1511: subdivision (s).
   12    S  36. Paragraph 1 of subdivision (b) of section 17 of the tax law, as
   13  added by section 43 of part S1 of chapter 57 of the  laws  of  2009,  is
   14  amended to read as follows:
   15    (1)  The  empire  zones tax benefits report must contain the following
   16  information about the empire zone tax  credits  claimed  under  articles
   17  nine,  nine-A, twenty-two[, thirty-two] and thirty-three of this chapter
   18  during the previous calendar year:
   19    (A) the name of each taxpayer claiming a credit; and
   20    (B) the amount of each credit earned by each taxpayer.
   21    S 37. Subdivisions (a) and (d) of section 18 of the tax law, as  added
   22  by  section  2 of part CC of chapter 63 of the laws of 2000, are amended
   23  to read as follows:
   24    (a) Allowance of credit. A  taxpayer  subject  to  tax  under  article
   25  nine-A,  twenty-two[,  thirty-two] or thirty-three of this chapter shall
   26  be allowed a credit against such tax, pursuant to the provisions  refer-
   27  enced  in subdivision (d) of this section, with respect to the ownership
   28  of eligible low-income buildings for which an eligibility statement  has
   29  been  issued  by  the commissioner of housing and community renewal. The
   30  amount of the credit shall be the credit amount for each  such  building
   31  allocated  by  such  commissioner  as  provided  in article two-A of the
   32  public housing law. The credit amount shall be allowed for each  of  the
   33  ten  taxable years in the credit period, and any reduction in first-year
   34  credit as provided in subdivision two of section twenty-two of such  law
   35  shall be allowed in the eleventh taxable year.
   36    (d)  Cross-references.  For  application of the credit provided for in
   37  this section, see the following provisions of this chapter:
   38    (1) Article 9-A: Section [210] 210-B:  subdivision [30] 15,
   39    (2) Article 22: Section 606: subsections (i) and (x),
   40    (3) [Article 32: Section 1456: subsection (l),
   41    (4)] Article 33: Section 1511: subdivision (n).
   42    S 38. Subparagraph (A) of paragraph 1 of subdivision (a) and  subdivi-
   43  sion  (f) of section 19 of the tax law, as added by section 2 of part II
   44  of chapter 63 of the laws of 2000, are amended to read as follows:
   45    (A) Green building credit. A taxpayer subject  to  tax  under  article
   46  nine,  nine-A,  twenty-two[, thirty-two] or thirty-three of this chapter
   47  shall be allowed a green building credit against such tax,  pursuant  to
   48  the  provisions referenced in subdivision (f) of this section. Provided,
   49  however, no credit shall  be  allowed  under  this  section  unless  the
   50  taxpayer  has complied with the applicable requirements of paragraph two
   51  of subdivision (d) of this section (relating to  reports  to  DEC).  The
   52  amount of the credit shall be the sum of the credit components specified
   53  in  paragraphs two through seven of this subdivision. Provided, however,
   54  the amount of each such credit component shall not exceed the limit  set
   55  forth  in  the initial credit component certificate obtained pursuant to
   56  subdivision (c) of this section. In the  determination  of  such  credit
       S. 6359--D                         130                        A. 8559--D

    1  components,  no cost paid or incurred by the taxpayer shall be the basis
    2  for more than one such component.
    3    (f)  Cross-references.  For  application of the credit provided for in
    4  this section, see the following provisions of this chapter:
    5    (1) Article nine: Section one hundred eighty-seven-d;
    6    (2) Article nine-A: Subdivision [thirty-one] SIXTEEN  of  section  two
    7  hundred [ten] TEN-B;
    8    (3) Article twenty-two: Subsections (i) and (y) of section six hundred
    9  six;
   10    (4)  [Article  thirty-two:  Subsection (m) of section fourteen hundred
   11  fifty-six;
   12    (5)] Article thirty-three: Subdivision (o) of section fifteen  hundred
   13  eleven.
   14    S  39.  Paragraphs 1 and 5 of subdivision (a) of section 21 of the tax
   15  law, as amended by section 1 of part H of chapter 577  of  the  laws  of
   16  2004, are amended to read as follows:
   17    (1)  General.  A  taxpayer  subject to tax under article nine, nine-A,
   18  twenty-two[, thirty-two]  or  thirty-three  of  this  chapter  shall  be
   19  allowed a credit against such tax, pursuant to the provisions referenced
   20  in  subdivision  (f)  of this section. Such credit shall be allowed with
   21  respect to a qualified site, as such term is defined in paragraph one of
   22  subdivision (b) of this section. The amount of the credit in  a  taxable
   23  year  shall  be the sum of the credit components specified in paragraphs
   24  two, three and four of this subdivision applicable in such year.
   25    (5) Applicable percentage. For purposes of paragraphs two,  three  and
   26  four  of  this  subdivision,  the  applicable percentage shall be twelve
   27  percent in the case of credits  claimed  under  article  nine,  nine-A[,
   28  thirty-two] or thirty-three of this chapter, and ten percent in the case
   29  of credits claimed under article twenty-two of this chapter, except that
   30  where  at least fifty percent of the area of the qualified site relating
   31  to the credit provided for in this section is  located  in  an  environ-
   32  mental  zone  as  defined  in  paragraph  six of subdivision (b) of this
   33  section, the applicable percentage shall be increased by  an  additional
   34  eight  percent. Provided, however, as afforded in section 27-1419 of the
   35  environmental conservation law, if the certificate of  completion  indi-
   36  cates  that  the  qualified  site has been remediated to Track 1 as that
   37  term is described in subdivision four of section 27-1415 of the environ-
   38  mental conservation law, the applicable  percentage  set  forth  in  the
   39  first sentence of this paragraph shall be increased by an additional two
   40  percent.
   41    S  39-a.  Subdivisions  (c)  and  (f) of section 21 of the tax law, as
   42  added by section 1 of part H of chapter 1  of  the  laws  of  2003,  are
   43  amended to read as follows:
   44    (c)  Qualifying  property.  Property  which  qualifies  for the credit
   45  provided for under this section and also for a credit provided  for  (1)
   46  under either subdivision [twelve] ONE or subdivision [twelve-B] THREE of
   47  section  two  hundred  [ten]  TEN-B  of  this  chapter,  or both, OR (2)
   48  subsection (a) or subsection (j) of section  six  hundred  six  of  this
   49  chapter,  or  both[, (3) the credit provided for under subsection (i) of
   50  section fourteen hundred fifty-six of this chapter, or  (4)  the  credit
   51  provided under subdivision (q) of section fifteen hundred eleven of this
   52  chapter]  may be the basis for either the credit provided for under this
   53  section or one of the credits enumerated in paragraph  one[,]  OR  two[,
   54  three or four] of this subdivision, but not both.
   55    (f)  Cross-references.  For  application of the credit provided for in
   56  this section, see the following provisions of this chapter:
       S. 6359--D                         131                        A. 8559--D

    1    (1) Article 9: Section 187-g
    2    (2) Article 9-A: Section [210] 210-B, subdivision [33] 17
    3    (3) Article 22: Section 606, subsections (i) and (dd)
    4    (4) [Article 32: Section 1456, subsection (q)
    5    (5)] Article 33: Section 1511, subdivision (u).
    6    S  40. Paragraph 3 of subdivision (a) and paragraphs 1 and 9 of subdi-
    7  vision (b) of section 22 of the tax law, as amended by section 4 of part
    8  H of chapter 577 of the laws of 2004, are amended to read as follows:
    9    (3) Developer. (i) A "developer" is a  taxpayer  under  article  nine,
   10  nine-A,  twenty-two[, thirty-two] or thirty-three of this chapter who or
   11  which either (I) has  been  issued  a  certificate  of  completion  with
   12  respect  to  a  qualified site or (II) has purchased or in any other way
   13  has been conveyed all or any portion of a qualified site from a taxpayer
   14  or any other party who  or  which  has  been  issued  a  certificate  of
   15  completion  with respect to such site provided, such purchase or convey-
   16  ance occurs within seven years of the effective date of the  certificate
   17  of  completion  issued  with  respect to such qualified site.   Provided
   18  further, that the taxpayer who or which is purchasing all or any portion
   19  of a qualified site and the taxpayer or any other party who or which has
   20  been issued a certificate of completion with respect to  such  site  may
   21  not  be  related persons, as such term is defined in subparagraph (C) of
   22  paragraph three of subsection (b) of section four hundred sixty-five  of
   23  the internal revenue code.
   24    (ii)  Where  the  entity  to whom a certificate of completion has been
   25  issued is a partnership, or where the entity which has purchased all  or
   26  any  portion  of  a qualified site from a taxpayer who or which has been
   27  issued a certificate of completion with respect to such site within  the
   28  applicable  time limit is a partnership, any partner in such partnership
   29  who or which is taxable under article nine, nine-A,  twenty-two[,  thir-
   30  ty-two]  or thirty-three of this chapter shall be a developer under this
   31  paragraph. Where the entity to whom a certificate of completion has been
   32  issued is a New York S  corporation,  or  where  the  entity  which  has
   33  purchased  all or any portion of a qualified site from a taxpayer who or
   34  which has been issued a certificate of completion with respect  to  such
   35  site  within  the applicable time limit is a New York S corporation, any
   36  shareholder in such New York S corporation shall be  a  developer  under
   37  this paragraph.
   38    (1)  Allowance of credit. A developer of a qualified site who or which
   39  is subject to tax under article nine, nine-A,  twenty-two[,  thirty-two]
   40  or  thirty-three of this chapter, shall be allowed a credit against such
   41  tax, pursuant to the provisions referenced in  paragraph  nine  of  this
   42  subdivision, for eligible real property taxes imposed on such site.
   43    (9)  Cross-references.  For  application of the credit provided for in
   44  this subdivision, see the following provisions of this chapter:
   45    (i) Article 9: Section 187-h.
   46    (ii) Article 9-A: Section [210] 210-B:  subdivision [34] 18.
   47    (iii) Article 22: Section 606: subsections (i) and (ee).
   48    (iv) [Article 32: Section 1456: subsection (r).
   49    (v)] Article 33: Section 1511: subdivision (v).
   50    S 41. Subdivision (a) of section 23 of the  tax  law,  as  amended  by
   51  section 10 of part H chapter 577 of the laws of 2004, is amended to read
   52  as follows:
   53    (a)  Allowance  of  credit.  General.  A taxpayer subject to tax under
   54  article nine, nine-A, twenty-two[, thirty-two] or thirty-three  of  this
   55  chapter  shall  be  allowed  a  credit against such tax, pursuant to the
   56  provisions referenced in subdivision (e) of this section. The amount  of
       S. 6359--D                         132                        A. 8559--D

    1  such  credit  shall be equal to the lesser of thirty thousand dollars or
    2  fifty percent of the premiums paid on or after the date  of  the  brown-
    3  field site cleanup agreement executed by the taxpayer and the department
    4  of  environmental  conservation pursuant to section 27-1409 of the envi-
    5  ronmental conservation law by the taxpayer for environmental remediation
    6  insurance issued with respect to a qualified site.
    7    S 42. Subdivision (e) of section 23  of  the  tax  law,  as  added  by
    8  section  19  of  part  H of chapter 1 of the laws of 2003, is amended to
    9  read as follows:
   10    (e) Cross-references. For application of the credit  provided  for  in
   11  this section, see the following provisions of this chapter:
   12    (1) Article 9: Section 187-i
   13    (2) Article 9-A: Section [210] 210-B, subdivision [35] 19
   14    (3) Article 22: Section 606, subsections (i) and (ff)
   15    (4) [Article 32: Section 1456, subsection (s)
   16    (5)] Article 33: Section 1511, subdivision (w).
   17    S 43. Paragraphs 1 and 2 of subdivision (a) and clause (i) of subpara-
   18  graph  (D)  of  paragraph  1 of subdivision (b) of section 25 of the tax
   19  law, as added by section 1 of part N of chapter 61 of the laws of  2005,
   20  are amended to read as follows:
   21    (1)  Every  taxpayer,  or  person as defined in section seven thousand
   22  seven hundred one of the internal  revenue  code,  required  to  file  a
   23  disclosure  statement  with  the  internal  revenue  service pursuant to
   24  section six thousand eleven of the internal revenue code, or  the  regu-
   25  lations promulgated thereunder, related to a reportable transaction or a
   26  listed  transaction, as those terms are defined in such section or regu-
   27  lations, must attach a duplicate of such  disclosure  statement  to  the
   28  return or report required to be filed by such taxpayer or person for the
   29  taxable  year  under  article  nine, nine-A, twenty-two[, thirty-two] or
   30  thirty-three of this chapter, and provide such other information related
   31  to such disclosure as prescribed by the  commissioner.  Such  disclosure
   32  shall be made notwithstanding that one member of an affiliated group, as
   33  defined  by  section  fifteen hundred four of the internal revenue code,
   34  may file such disclosure statement with the internal revenue service  on
   35  behalf of its affiliates including such taxpayer or person.
   36    (2)  Every  taxpayer  or  such  person  who participates in a New York
   37  reportable transaction for a taxable year  must  disclose  such  partic-
   38  ipation  with  its  return  or report required to be filed under article
   39  nine, nine-A, twenty-two[, thirty-two] or thirty-three of  this  chapter
   40  for  the  taxable  year  in  a  form prescribed by the commissioner, and
   41  provide such other information related to such transaction as prescribed
   42  by the commissioner. A New York reportable transaction is a  transaction
   43  that  has  the potential to be a tax avoidance transaction as determined
   44  by the commissioner.
   45    (i) the list required to be maintained  by  such  person  pursuant  to
   46  section  six  thousand  one  hundred twelve of the internal revenue code
   47  identifies or is required to identify a taxpayer subject  to  tax  under
   48  article  nine,  nine-A, twenty-two[, thirty-two] or thirty-three of this
   49  chapter, and
   50    S 44. Subdivisions (a) and (f) of section 26 of the tax law, as  added
   51  by chapter 537 of the laws of 2005, are amended to read as follows:
   52    (a)  Allowance  of  credit.  A taxpayer, which is subject to tax under
   53  article nine, nine-A, twenty-two[, thirty-two] or thirty-three  of  this
   54  chapter  and  which  is  a  qualified building owner, shall be allowed a
   55  credit against such tax.  The amount of the credit  allowed  under  this
   56  section shall equal the sum of the number of qualified security officers
       S. 6359--D                         133                        A. 8559--D

    1  providing  protection  to  a building or buildings owned by the taxpayer
    2  multiplied by three thousand dollars. Provided,  however,  that  in  the
    3  case  of  a worker not so employed for a full year, such amount shall be
    4  prorated  to  reflect the length of such employment under regulations of
    5  the commissioner.
    6    (f) Cross-references. For application of the credit  provided  for  in
    7  this section, see the following provisions of this chapter:
    8    (1) article 9: section 187-n.
    9    (2) article 9-A: section [210] 210-B:  subdivision [37] 21.
   10    (3) article 22: section 606: subsection (ii).
   11    (4) [article 32: section 1456: subsection (t).
   12    (5)] article 33: section 1511: subdivision (x).
   13    S 45. Paragraph 3 of subdivision (a) and subdivision (c) of section 28
   14  of  the  tax  law,  as added by section 2 of part V of chapter 62 of the
   15  laws of 2006, are amended to read as follows:
   16    (3) No qualified production costs used by a  taxpayer  either  as  the
   17  basis for the allowance of the credit provided for under this section or
   18  used  in  the  calculation of the credit provided for under this section
   19  shall be used by such taxpayer to claim any other credit allowed  pursu-
   20  ant to this chapter.
   21    Notwithstanding  any  provisions  of  this  section to the contrary, a
   22  corporation or partnership, which otherwise  qualifies  as  a  qualified
   23  commercial production company, and is similar in operation and in owner-
   24  ship  to  a  business entity or entities taxable, or previously taxable,
   25  under section one hundred eighty-three, one hundred eighty-four  or  one
   26  hundred  eighty-five  of  article nine; article nine-A[, article thirty-
   27  two] or thirty-three of this chapter or which would have been subject to
   28  tax under article twenty-three of this chapter (as such article  was  in
   29  effect  on  January  first, nineteen hundred eighty) OR WHICH WOULD HAVE
   30  BEEN SUBJECT TO TAX UNDER ARTICLE THIRTY-TWO OF THIS  CHAPTER  (AS  SUCH
   31  ARTICLE  WAS  IN EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN)
   32  or the income or losses of which is  or  was  includable  under  article
   33  twenty-two  of  this chapter shall not be deemed a new or separate busi-
   34  ness, and therefore shall not be eligible for  empire  state  commercial
   35  production  benefits, if it was not formed for a valid business purpose,
   36  as such term is defined in clause (D) of subparagraph one  of  paragraph
   37  (o) of subdivision nine of section two hundred eight of this chapter and
   38  was  formed  solely  to  gain  empire state commercial production credit
   39  benefits.
   40    (c) Cross-references. For application of the credit  provided  for  in
   41  this section, see the following provision of this chapter:
   42    (1) article 9-A: section [210] 210-B:  subdivision [38] 23.
   43    (2) article 22: section 606: subsection (jj).
   44    S  46.  Subdivision  (d)  of  section  28  of the tax law, as added by
   45  section 1 of part X of chapter 62 of the laws of  2006,  is  amended  to
   46  read as follows:
   47    (d)  Cross-references.  For  application of the credit provided for in
   48  this section, see the following provisions of this chapter:
   49    (1) Article 9: Section 187-c.
   50    (2) Article 9-A: Section [210] 210-B, subdivision [38] 24.
   51    (3) Article 22: Section 606, subsections (i) and (jj).
   52    S 47. The opening paragraph of subdivision (a)  and  subdivisions  (c)
   53  and  (g) of section 31 of the tax law, the opening paragraph of subdivi-
   54  sion (a) and subdivision (g) as amended by section 7 of part G of  chap-
   55  ter  61  of  the  laws of 2011, subdivision (c) as added by section 2 of
       S. 6359--D                         134                        A. 8559--D

    1  part MM of chapter 59 of the laws  of  2010,  are  amended  to  read  as
    2  follows:
    3    General.  A  taxpayer subject to tax under section one hundred eighty-
    4  five, article nine-A, twenty-two[, thirty-two] or thirty-three  of  this
    5  chapter  shall  be  allowed  a  credit against such tax, pursuant to the
    6  provisions referenced in subdivision (g) of this section. The amount  of
    7  the  credit,  allowable  for up to ten consecutive taxable years, is the
    8  sum of the following four credit components:
    9    (c) Election of credit. A taxpayer who or which is qualified to  claim
   10  the  excelsior  investment tax credit component and is also qualified to
   11  claim the investment tax credit provided for under subdivision  [twelve]
   12  ONE of section two hundred [ten,] TEN-B OR subsection (a) of section six
   13  hundred  six[,  or subsection (i) of section fourteen hundred fifty-six]
   14  of this chapter, may claim either the excelsior  investment  tax  credit
   15  component  or  the  investment tax credit, but not both with regard to a
   16  particular piece of property. In addition, a taxpayer who  or  which  is
   17  qualified  to claim the excelsior investment tax credit component and is
   18  also qualified to claim the brownfield tangible property  credit  compo-
   19  nent  under  section twenty-one of this article, as added by chapter one
   20  of the laws of two  thousand  three,  may  claim  either  the  excelsior
   21  investment  tax credit component or such tangible property credit compo-
   22  nent, but not both with regard to a particular piece  of  property.  The
   23  election  to  claim  the  excelsior investment tax credit component, the
   24  investment tax credit or the brownfield tangible property credit  compo-
   25  nent, with regard to the same property, is irrevocable.
   26    (g)  Cross-references.  For  application of the credit provided for in
   27  this section, see the following provisions of this chapter:
   28    (1) article 9: section 187-q.
   29    (2) article 9-A: section [210] 210-B: subdivision [41] 31.
   30    (3) article 22: section 606: subsection (qq).
   31    (4) [article 32: section 1456: subsection (u).
   32    (5)] article 33: section 1511: subdivision (y).
   33    S 48. Subdivision (d) of section 31  of  the  tax  law,  as  added  by
   34  section  12  of  part Q of chapter 57 of the laws of 2010, is amended to
   35  read as follows:
   36    (d) Cross-references. For application of the credit  provided  for  in
   37  this section, see the following provisions of this chapter:
   38    (1) article 9-A: section [210] 210-B: subdivision [41] 32.
   39    (2) article 22: section 606: subsection (qq).
   40    S  49. Subdivision 3 of section 34 of the tax law, as added by section
   41  2 of part Y of chapter 57 of the laws of 2010, is  amended  to  read  as
   42  follows:
   43    3.  (a) For application of the temporary deferral nonrefundable payout
   44  credit, see the following provisions of this chapter:
   45    (1) Article 9: section [187-0] 187-O
   46    (2) Article 9-A: section [210(41)] 210-B(33)
   47    (3) Article 22: section 606(qq)
   48    (4) [Article 32: section 1456(v)
   49    (5)] Article 33: section 1511(y)
   50    (b) For application of the temporary deferral refundable payout  cred-
   51  it, see the following provisions of this chapter:
   52    (1) Article 9: section 187-p
   53    (2) Article 9-A: section [210(42)] 210-B(34)
   54    (3) Article 22: section 606(rr)
   55    (4) [Article 32: section 1456(w)
   56    (5)] Article 33: section 1511(z)
       S. 6359--D                         135                        A. 8559--D

    1    S  50.  The  opening paragraph of subdivision (a), subparagraph (C) of
    2  paragraph 2 of subdivision (e), and subdivision (f) of section 35 of the
    3  tax law, as added by section 3 of part V of chapter 61 of  the  laws  of
    4  2011, are amended to read as follows:
    5    A taxpayer which is a participant or the owner of a participant in the
    6  economic transformation and facility redevelopment program under article
    7  eighteen  of  the  economic development law that is subject to tax under
    8  section one hundred eighty-five of  article  nine,  or  article  nine-A,
    9  twenty-two[,  thirty-two]  or  thirty-three  of  this  chapter  shall be
   10  allowed the sum of following components against such  tax,  pursuant  to
   11  the provisions referenced in subdivision (f) of this section.
   12    (C) the business entity must not be substantially similar in ownership
   13  and  operation  to  another taxpayer taxable or previously taxable under
   14  section one hundred eighty-three, one hundred eighty-four or one hundred
   15  eighty-five of article nine, former section one  hundred  eighty-six  of
   16  this chapter or article nine-A, twenty-two[, thirty-two] or thirty-three
   17  of  this  chapter  OR  FORMER  ARTICLE THIRTY-TWO OF THIS CHAPTER or the
   18  income or losses of which is or was includable under article  twenty-two
   19  of this chapter;
   20    (f)  Cross-references.  For application of the credits provided for in
   21  this section, see the following provisions of this chapter:
   22    (1) section 185: section 187-r.
   23    (2) article 9-A: section [210(43)] 210-B(35).
   24    (3) article 22: section 606 (ss).
   25    (4) [article 32: section 1456(x).
   26    (5)] article 33: section 1511 (aa).
   27    S 51. Subdivisions (a) and (e) of section 36 of the tax law, as  added
   28  by section 2 of part E of chapter 56 of the laws of 2011, are amended to
   29  read as follows:
   30    (a)  Allowance  of  credit.  A  taxpayer  subject to tax under article
   31  nine-A, twenty-two[, thirty-two] or thirty-three of this  chapter  shall
   32  be  allowed a credit against such tax, pursuant to the provisions refer-
   33  enced in subdivision (e) of this section.  The  amount  of  the  credit,
   34  allowable  for  ten consecutive tax years, is equal to the amount deter-
   35  mined pursuant to section  four  hundred  twenty-five  of  the  economic
   36  development law.
   37    (e)  Cross-references.  For  application of the credit provided for in
   38  this section, see the following provisions of this chapter:
   39    (1) article 9-A: section [210] 210-B, subdivision [44] 37;
   40    (2) article 22: section 606, subsection (tt);
   41    (3) [article 32: section 1456, subsection (y);
   42    (4)] article 33, section 1511, subdivision (bb).
   43    S 52. Subdivision (c) of section 37 of the tax law, as added by  chap-
   44  ter 109 of the laws of 2012, is amended to read as follows:
   45    (c)  Cross-references.  For  application of the credit provided for in
   46  this section, see the following provisions of this chapter:
   47    (1) Article 9-A: Section [210] 210-B, subdivision [45] 39.
   48    (2) Article 22: Section 606, subsections (i) and (uu).
   49    S 52-a. Subdivision (c) of section 39 of the tax law is REPEALED.
   50    S 53. Paragraphs 2, 3 and 4 of subdivision (k) of section  39  of  the
   51  tax  law,  paragraphs 2 and 3 as added by section 2 of part A of chapter
   52  68 of the laws of 2013, paragraph 4 as added by section 2 of part  A  of
   53  chapter 68 of the laws of 2013, are amended to read as follows:
   54    [(2) Article 9: section 180, subdivision 3.
   55    (3) Article 9: section 181, subdivision 3.]
       S. 6359--D                         136                        A. 8559--D

    1    (4) Article 9-A: section [210] 210-B, subdivision [47] 41 AND SUBDIVI-
    2  SION 44.
    3    S  54.  Subdivision  1  of section 171-a of the tax law, as amended by
    4  section 1 of part R of chapter 60 of the laws of  2004,  is  amended  to
    5  read as follows:
    6    1.  All  taxes,  interest, penalties and fees collected or received by
    7  the commissioner or the commissioner's duly authorized agent under arti-
    8  cles nine (except section one hundred eighty-two-a thereof and except as
    9  otherwise  provided  in  section  two  hundred  five  thereof),  nine-A,
   10  twelve-A  (except  as  otherwise provided in section two hundred eighty-
   11  four-d thereof), thirteen, thirteen-A (except as otherwise  provided  in
   12  section  three  hundred  twelve  thereof),  eighteen,  nineteen,  twenty
   13  (except as otherwise provided in section four hundred eighty-two  there-
   14  of),  twenty-one,  twenty-two,  twenty-six,  twenty-six-B,  twenty-eight
   15  (except as otherwise provided in section eleven hundred  two  or  eleven
   16  hundred  three thereof), twenty-eight-A, thirty-one (except as otherwise
   17  provided in section fourteen hundred twenty-one thereof),  [thirty-two,]
   18  thirty-three and thirty-three-A of this chapter shall be deposited daily
   19  in  one  account  with  such  responsible banks, banking houses or trust
   20  companies as may be designated by the comptroller, to the credit of  the
   21  comptroller.  Such  an account may be established in one or more of such
   22  depositories. Such deposits shall be kept separate and  apart  from  all
   23  other  money in the possession of the comptroller. The comptroller shall
   24  require adequate security from  all  such  depositories.  Of  the  total
   25  revenue  collected  or received under such articles of this chapter, the
   26  comptroller shall retain in the comptroller's hands such amount  as  the
   27  commissioner may determine to be necessary for refunds or reimbursements
   28  under  such  articles  of  this chapter [and article ten thereof] out of
   29  which amount the comptroller shall pay any refunds or reimbursements  to
   30  which  taxpayers shall be entitled under the provisions of such articles
   31  of this chapter [and article ten  thereof].  The  commissioner  and  the
   32  comptroller  shall  maintain  a system of accounts showing the amount of
   33  revenue collected or received from each of the  taxes  imposed  by  such
   34  articles.  The  comptroller,  after  reserving  the  amount  to pay such
   35  refunds or reimbursements, shall, on or before the  tenth  day  of  each
   36  month, pay into the state treasury to the credit of the general fund all
   37  revenue deposited under this section during the preceding calendar month
   38  and  remaining  to  the  comptroller's  credit  on  the last day of such
   39  preceding month, (i) except that the comptroller shall pay to the  state
   40  department of social services that amount of overpayments of tax imposed
   41  by  article  twenty-two  of this chapter and the interest on such amount
   42  which is certified to the comptroller by the commissioner as the  amount
   43  to  be  credited against past-due support pursuant to subdivision six of
   44  section one hundred seventy-one-c of this [chapter]  ARTICLE,  (ii)  and
   45  except  that  the  comptroller  shall  pay  to the New York state higher
   46  education services corporation and the state university of New  York  or
   47  the city university of New York respectively that amount of overpayments
   48  of tax imposed by article twenty-two of this chapter and the interest on
   49  such amount which is certified to the comptroller by the commissioner as
   50  the amount to be credited against the amount of defaults in repayment of
   51  guaranteed  student  loans and state university loans or city university
   52  loans pursuant to subdivision five of section one hundred  seventy-one-d
   53  and  subdivision six of section one hundred seventy-one-e of this [chap-
   54  ter] ARTICLE, (iii) and except further that,  notwithstanding  any  law,
   55  the  comptroller shall credit to the revenue arrearage account, pursuant
   56  to section ninety-one-a of the state finance law, that amount  of  over-
       S. 6359--D                         137                        A. 8559--D

    1  payment  of  tax  imposed  by  article nine, nine-A, twenty-two, thirty,
    2  thirty-A, thirty-B[, thirty-two] or thirty-three of  this  chapter,  and
    3  any  interest  thereon,  which  is  certified  to the comptroller by the
    4  commissioner  as  the  amount  to be credited against a past-due legally
    5  enforceable debt owed to a state agency pursuant  to  paragraph  (a)  of
    6  subdivision  six  of  section one hundred seventy-one-f of this article,
    7  provided, however, he shall  credit  to  the  special  offset  fiduciary
    8  account,  pursuant to section ninety-one-c of the state finance law, any
    9  such amount creditable as a liability as set forth in paragraph  (b)  of
   10  subdivision  six  of  section one hundred seventy-one-f of this article,
   11  (iv) and except further that the comptroller shall pay to  the  city  of
   12  New  York  that  amount  of  overpayment of tax imposed by article nine,
   13  nine-A, twenty-two, thirty, thirty-A, thirty-B[, thirty-two,]  or  thir-
   14  ty-three  of  this chapter and any interest thereon that is certified to
   15  the comptroller by the commissioner as the amount to be credited against
   16  city of New York tax warrant  judgment  debt  pursuant  to  section  one
   17  hundred  seventy-one-l  of this article, (v) and except further that the
   18  comptroller shall pay to a non-obligated spouse that amount of  overpay-
   19  ment of tax imposed by article twenty-two of this chapter and the inter-
   20  est  on  such  amount  which  has  been credited pursuant to section one
   21  hundred seventy-one-c, one hundred seventy-one-d, one  hundred  seventy-
   22  one-e,  one  hundred  seventy-one-f or one hundred seventy-one-l of this
   23  article and which is certified to the comptroller by the commissioner as
   24  the amount due such non-obligated spouse pursuant to  paragraph  six  of
   25  subsection  (b)  of  section  six hundred fifty-one of this chapter; and
   26  (vi) the comptroller shall deduct a like amount  which  the  comptroller
   27  shall  pay  into  the  treasury  to  the credit of the general fund from
   28  amounts subsequently payable to the department of social  services,  the
   29  state  university  of  New York, the city university of New York, or the
   30  higher education services corporation, or the revenue arrearage  account
   31  or  special offset fiduciary account pursuant to section ninety-one-a or
   32  ninety-one-c of the state finance law, as the case may be, whichever had
   33  been credited the amount originally withheld from such overpayment,  and
   34  (vii)  with respect to amounts originally withheld from such overpayment
   35  pursuant to section one hundred seventy-one-l of this article  and  paid
   36  to  the  city  of  New York, the comptroller shall collect a like amount
   37  from the city of New York.
   38    S 55. Subdivision 2 of section 171-a of the tax  law,  as  amended  by
   39  chapter 57 of the laws of 1993, is amended to read as follows:
   40    2.  Notwithstanding  subdivision  one  of  this  section  or any other
   41  provision of law to the contrary, the taxes imposed pursuant to sections
   42  one hundred eighty-three-a,  one  hundred  eighty-four-a,  [one  hundred
   43  eighty-six-b,]  one  hundred  eighty-six-c, [one hundred eighty-nine-a,]
   44  two hundred nine-B[, fourteen hundred fifty-five-b] and fifteen  hundred
   45  five-a  of  this chapter, reduced by an amount for administrative costs,
   46  shall be deposited to the credit of the metropolitan mass transportation
   47  operating  assistance  account  in  the  mass  transportation  operating
   48  assistance fund, created pursuant to section eighty-eight-a of the state
   49  finance  law,  as such taxes are received. The amount for administrative
   50  costs shall be determined by the commissioner  to  represent  reasonable
   51  costs  of  the  department  of  taxation  and  finance in administering,
   52  collecting, determining and distributing such taxes. Of the total reven-
   53  ue collected or received under such sections of this chapter, the  comp-
   54  troller  shall  retain  in his hands such amount as the commissioner may
   55  determine to be necessary  for  refunds  or  reimbursements  under  such
   56  sections  of  this chapter out of which amount the comptroller shall pay
       S. 6359--D                         138                        A. 8559--D

    1  any refunds or reimbursements to which taxpayers shall be entitled under
    2  provisions of such sections. The tax commissioner  and  the  comptroller
    3  shall  maintain  a  system  of  accounts  showing  the amount of revenue
    4  collected or received from each of the taxes imposed by such sections.
    5    S  56. Paragraphs (b) and (c) of subdivision 1 of section 171-f of the
    6  tax law, as amended by chapter 81 of the laws of 1995,  are  amended  to
    7  read as follows:
    8    (b)  "taxpayer"  shall mean a corporation, association, company, part-
    9  nership, estate, trust, liquidator, fiduciary or other entity  or  indi-
   10  vidual who or which is liable for any tax or other imposition imposed by
   11  or pursuant to article nine, nine-A, twenty-two, thirty, thirty-A, thir-
   12  ty-B[,  thirty-two,] or thirty-three of this chapter or article two-E of
   13  the general city law, which tax or other imposition is  administered  by
   14  the  commissioner  of  taxation  and finance, or who or which is under a
   15  duty to perform an act under or pursuant  to  such  tax  or  imposition,
   16  excluding  a  state agency, a municipal corporation or a district corpo-
   17  ration; and (c) "overpayment" shall mean an overpayment which  has  been
   18  requested  or determined to be refunded, a refund or a reimbursement, of
   19  a tax or other imposition  imposed  by  or  pursuant  to  article  nine,
   20  nine-A,  twenty-two,  thirty, thirty-A, thirty-B[, thirty-two,] or thir-
   21  ty-three of this chapter or article two-E of the general city law, which
   22  is administered by the commissioner of taxation and finance.
   23    S 57. Subdivision 2 of section 171-f of the tax law, as added by chap-
   24  ter 55 of the laws of 1992, is amended to read as follows:
   25    (2) The commissioner of taxation and finance, upon agreement with  the
   26  state  comptroller  and  acting  as  an agent for the state comptroller,
   27  shall set forth the  procedures  for  crediting  any  overpayment  by  a
   28  taxpayer  of  any tax or other imposition imposed by or authorized to be
   29  imposed pursuant to article nine, nine-A, twenty-two, thirty,  thirty-A,
   30  thirty-B[, thirty-two,] or thirty-three of this chapter or article two-E
   31  of  the  general  city law, which is administered by the commissioner of
   32  taxation and finance, and the interest on any such overpayments, against
   33  the amount of a past-due legally enforceable debt owed by such  taxpayer
   34  to  a  state  agency.  An  implementation plan shall be developed by the
   35  division of the budget and the department of taxation and finance  which
   36  shall  provide,  but not be limited to, guidance with respect to coordi-
   37  nation of debt collection pursuant to this section and subdivision twen-
   38  ty-seventh of section one hundred  seventy-one  of  this  article.  This
   39  section  shall  not be deemed to abrogate or limit in any way the powers
   40  and authority of the state comptroller to set off debts owed  the  state
   41  against  payments from the state, under the constitution of the state or
   42  any other law.
   43    S 58. Paragraphs (a) and (b) of subdivision 1 of section 171-l of  the
   44  tax  law,  as  added by section 6 of part R of chapter 60 of the laws of
   45  2004, are amended to read as follows:
   46    (a) "taxpayer" shall mean a corporation, association,  company,  part-
   47  nership,  estate,  trust, liquidator, fiduciary or other entity or indi-
   48  vidual who or which is liable for any tax or other imposition imposed by
   49  or pursuant to article nine, nine-A, twenty-two, thirty, thirty-A, thir-
   50  ty-B[, thirty-two,] or thirty-three of this chapter, which tax or  other
   51  imposition  is administered by the commissioner of taxation and finance,
   52  or who or which is under a duty to perform an act under or  pursuant  to
   53  such  tax  or  imposition,  excluding a state agency, a municipal corpo-
   54  ration or a district corporation;
   55    (b) "overpayment" shall mean an overpayment which has  been  requested
   56  or  determined  to be refunded, a refund or a reimbursement, of a tax or
       S. 6359--D                         139                        A. 8559--D

    1  other imposition imposed by or pursuant to article nine,  nine-A,  twen-
    2  ty-two,  thirty,  thirty-A,  thirty-B[,  thirty-two,] or thirty-three of
    3  this chapter, which is administered by the commissioner of taxation  and
    4  finance; and
    5    S 59. Paragraph (b) of subdivision 1 of section 183 of the tax law, as
    6  amended  by  section  1  of part Y of chapter 63 of the laws of 2000, is
    7  amended to read as follows:
    8    (b) For the privilege of exercising its  corporate  franchise,  or  of
    9  doing business, or of employing capital, or of owning or leasing proper-
   10  ty in this state in a corporate or organized capacity, or of maintaining
   11  an office in this state, every domestic corporation, joint-stock company
   12  or  association  formed  for  or  principally  engaged in the conduct of
   13  canal, steamboat, ferry (except a ferry company operating between any of
   14  the boroughs of the city of New York under a lease granted by the city),
   15  express, navigation, pipe  line,  transfer,  baggage  express,  omnibus,
   16  taxicab,  telegraph, or telephone business, or formed for or principally
   17  engaged in the conduct of two or more  of  such  businesses,  and  every
   18  domestic  corporation,  joint-stock company or association formed for or
   19  principally engaged in the conduct of a railroad, palace  car,  sleeping
   20  car  or  trucking  business  or formed for or principally engaged in the
   21  conduct of two or more of such businesses and which has made an election
   22  pursuant to subdivision ten of this section, and  every  other  domestic
   23  corporation,  joint-stock  company or association principally engaged in
   24  the conduct of a  transportation  or  transmission  business,  except  a
   25  corporation, joint-stock company or association formed for or principal-
   26  ly  engaged  in  the  conduct of a railroad, palace car, sleeping car or
   27  trucking business or formed for or principally engaged in the conduct of
   28  two or more of such businesses and  which  has  not  made  the  election
   29  provided  for  in  subdivision  ten of this section, and except a corpo-
   30  ration, joint-stock company or association principally  engaged  in  the
   31  conduct  of aviation (including air freight forwarders acting as princi-
   32  pal and like indirect air carriers) and except a corporation principally
   33  engaged in providing telecommunication  services  between  aircraft  and
   34  dispatcher,  aircraft  and  air  traffic  control  or ground station and
   35  ground station (or any combination of the foregoing),  at  least  ninety
   36  percent  of  the voting stock of which corporation is owned, directly or
   37  indirectly, by air carriers and which corporation's  principal  function
   38  is  to  fulfill  the  requirements  of (i) the federal aviation adminis-
   39  tration (or the successor  thereto)  or  (ii)  the  international  civil
   40  aviation organization (or the successor thereto), relating to the exist-
   41  ence of a communication system between aircraft and dispatcher, aircraft
   42  and  air  traffic  control  or ground station and ground station (or any
   43  combination of the foregoing) for the purposes of air safety and naviga-
   44  tion [and except  a  corporation,  joint-stock  company  or  association
   45  subject  to  taxation  under  article thirty-two of this chapter,] shall
   46  pay, in advance, an annual tax to be computed  upon  the  basis  of  the
   47  amount of its capital stock within this state during the preceding year,
   48  and  upon  each dollar of such amount. Provided, however, a corporation,
   49  joint-stock company or association formed for or principally engaged  in
   50  the  transportation, transmission or distribution of gas, electricity or
   51  steam shall not be subject to tax under  this  section  or  section  one
   52  hundred eighty-four of this article.
   53    S  60. Subdivision 10 of section 183 of the tax law, as added by chap-
   54  ter 309 of the laws of 1996, is amended to read as follows:
   55    10. Election. [With respect to taxable years beginning after  nineteen
   56  hundred  ninety-seven,  every] EVERY corporation, joint-stock company or
       S. 6359--D                         140                        A. 8559--D

    1  association formed for or principally engaged in the conduct of a  rail-
    2  road  (including  surface  railroad,  whether  or not operated by steam,
    3  subway railroad or elevated  railroad),  palace  car,  sleeping  car  or
    4  trucking business or formed for or principally engaged in the conduct of
    5  two or more of such businesses, which would be subject to article nine-A
    6  [or  thirty-two] of this chapter if the election provided for under this
    7  subdivision were not made, may elect to be subject to the provisions  of
    8  this section and, as applicable, section one hundred eighty-four of this
    9  article,  rather  than the provisions of such article nine-A [or thirty-
   10  two]. [In the case of such a corporation, joint-stock company or associ-
   11  ation subject to the tax imposed under this section and, as  applicable,
   12  section  one  hundred  eighty-four of this article, for the taxable year
   13  ending December thirty-first, nineteen hundred ninety-seven, such corpo-
   14  ration, joint-stock company or association must make such election on or
   15  before March fifteenth, nineteen hundred ninety-eight, and such election
   16  shall apply to the taxable year ending on December  thirty-first,  nine-
   17  teen  hundred  ninety-eight  and  to  succeeding  taxable  years,  until
   18  revoked. In the case of such a corporation, joint-stock company or asso-
   19  ciation which is not subject to the tax imposed under this section  and,
   20  as  applicable,  section one hundred eighty-four of this article for the
   21  taxable year ending December thirty-first, nineteen hundred  ninety-sev-
   22  en,  but  thereafter would be subject to article nine-A or thirty-two of
   23  this chapter if the election provided for under  this  subdivision  were
   24  not  made,  such]  SUCH  corporation, joint-stock company or association
   25  must make such election by the first  day  on  which  such  corporation,
   26  joint-stock company or association would be required to file a return or
   27  report  (without regard to extensions) under this section or section one
   28  hundred eighty-four of this article,  or  section  one  hundred  eighty-
   29  three-a  or  one  hundred[-]eighty-four-a  of  this  article, or article
   30  nine-A [or thirty-two] of this chapter. An  election  made  pursuant  to
   31  this  subdivision  shall  continue  to be in effect until revoked by the
   32  taxpayer. A revocation of the election to be  subject  to  this  section
   33  and,  as  applicable,  section  one hundred eighty-four of this article,
   34  shall be irrevocable. Such election, and a revocation thereof, shall  be
   35  made in the manner prescribed by the commissioner, whether by regulation
   36  or otherwise. Such revocation shall apply as of the first day of January
   37  next  following  the  end  of  a  taxable year with respect to which the
   38  taxpayer had been subject to this section and,  as  applicable,  section
   39  one  hundred  eighty-four of this article, by reason of an election made
   40  pursuant to this subdivision.
   41    S 61. The section heading and subdivisions 1 and 5 of section 183-a of
   42  the tax law, the section heading as added by chapter 931 of the laws  of
   43  1982,  subdivision  1 as amended by section 1 of part A of chapter 59 of
   44  the laws of 2013 and subdivision 5 as amended by chapter 945 of the laws
   45  of 1990, are amended to read as follows:
   46    [Temporary  metropolitan]  METROPOLITAN  transportation  business  tax
   47  surcharge  on  transportation  and transmission corporations and associ-
   48  ations.  1. The term "corporation" as used in this section shall include
   49  an association, within the meaning of paragraph three of subsection  (a)
   50  of  section  seventy-seven  hundred  one  of  the  internal revenue code
   51  (including a limited liability company), a publicly  traded  partnership
   52  treated  as  a  corporation  for  purposes  of the internal revenue code
   53  pursuant to section seventy-seven hundred four thereof and any  business
   54  conducted  by  a  trustee  or  trustees wherein interest or ownership is
   55  evidenced by certificates or other  written  instruments.  Every  corpo-
   56  ration,  joint-stock  company  or  association formed for or principally
       S. 6359--D                         141                        A. 8559--D

    1  engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
    2  ny operating between any of the boroughs of the city of New York under a
    3  lease granted by the city), express, navigation,  pipe  line,  transfer,
    4  baggage  express, omnibus, taxicab, telegraph, or telephone business, or
    5  formed for or principally engaged in the conduct of  two  or  more  such
    6  businesses,  and  every  corporation, joint-stock company or association
    7  formed for or principally engaged in the conduct of a  railroad,  palace
    8  car,  sleeping  car  or  trucking  business or formed for or principally
    9  engaged in the conduct of two or more of such businesses and  which  has
   10  made  an  election  pursuant  to  subdivision ten of section one hundred
   11  eighty-three of this article, and every other  corporation,  joint-stock
   12  company or association principally engaged in the conduct of a transpor-
   13  tation  or  transmission  business,  except  a  corporation, joint-stock
   14  company or association formed for or principally engaged in the  conduct
   15  of  a  railroad, palace car, sleeping car or trucking business or formed
   16  for or principally engaged in the conduct of two or more of  such  busi-
   17  nesses  and  which has not made the election provided for in subdivision
   18  ten of section one hundred eighty-three of this article,  and  except  a
   19  corporation,  joint-stock  company or association principally engaged in
   20  the conduct of aviation (including  air  freight  forwarders  acting  as
   21  principal and like indirect air carriers) and except a corporation prin-
   22  cipally engaged in providing telecommunication services between aircraft
   23  and  dispatcher,  aircraft and air traffic control or ground station and
   24  ground station (or any combination of the foregoing),  at  least  ninety
   25  percent  of  the voting stock of which corporation is owned, directly or
   26  indirectly, by air carriers and which corporation's  principal  function
   27  is  to  fulfill  the  requirements  of (i) the federal aviation adminis-
   28  tration (or the successor  thereto)  or  (ii)  the  international  civil
   29  aviation organization (or the successor thereto), relating to the exist-
   30  ence of a communication system between aircraft and dispatcher, aircraft
   31  and  air  traffic  control  or ground station and ground station (or any
   32  combination of the foregoing) for the purposes of air safety and naviga-
   33  tion [and except a corporation, joint-stock company or association which
   34  is liable to taxation under article thirty-two of this  chapter],  shall
   35  pay for the privilege of exercising its corporate franchise, or of doing
   36  business,  or  of employing capital, or of owning or leasing property in
   37  the metropolitan commuter transportation district in such  corporate  or
   38  organized  capacity, or of maintaining an office in such district, a tax
   39  surcharge [for all or any part of its years commencing on or after Janu-
   40  ary first, nineteen hundred eighty-two but ending before December  thir-
   41  ty-first,  two  thousand  eighteen], which tax surcharge, in addition to
   42  the tax imposed by section one hundred  eighty-three  of  this  article,
   43  shall  be  computed  at the rate of [eighteen percent of the tax imposed
   44  under such section one hundred eighty-three for such years or  any  part
   45  of  such  years  ending  before  December thirty-first, nineteen hundred
   46  eighty-three after the deduction  of  any  credits  otherwise  allowable
   47  under  this  article,  and  at the rate of] seventeen percent of the tax
   48  imposed under such section for such years or  any  part  of  such  years
   49  [ending  on  or  after  December  thirty-first, nineteen hundred eighty-
   50  three] after the deduction of any credits otherwise allowable under this
   51  article; provided, however, that such rates of tax  surcharge  shall  be
   52  applied  only  to  that  portion  of  the  tax imposed under section one
   53  hundred eighty-three of this article after the deduction of any  credits
   54  otherwise  allowable  under  this  article  which is attributable to the
   55  taxpayer's business activity carried on within the metropolitan commuter
   56  transportation district as so determined in the manner prescribed by the
       S. 6359--D                         142                        A. 8559--D

    1  rules and regulations promulgated by the  commissioner[;  and  provided,
    2  further,  that  the  tax  surcharge imposed by this section shall not be
    3  imposed upon any taxpayer for more than four hundred thirty-two months].
    4    5.  [The  report  covering  the tax surcharge which must be calculated
    5  pursuant to this section based upon the tax reportable on the report due
    6  by March  fifteenth,  nineteen  hundred  eighty-two  under  section  one
    7  hundred  eighty-three  of this article shall be filed on or before March
    8  fifteenth, nineteen hundred eighty-three. The report  covering  the  tax
    9  surcharge  which  must be calculated pursuant to this section based upon
   10  the tax reportable on  the  report  due  by  March  fifteenth,  nineteen
   11  hundred  eighty-three  under  section  one  hundred eighty-three of this
   12  article shall be filed on or before March  fifteenth,  nineteen  hundred
   13  eighty-four.  The report covering the tax surcharge which must be calcu-
   14  lated pursuant to this section based upon  the  tax  reportable  on  the
   15  report  due  by  March  fifteenth,  nineteen  hundred  eighty-four under
   16  section one hundred eighty-three of this article shall be  filed  on  or
   17  before  March fifteenth, nineteen hundred eighty-five. The report cover-
   18  ing the tax surcharge which must be calculated pursuant to this  section
   19  based  upon  the  tax  reportable  on the report due by March fifteenth,
   20  nineteen hundred eighty-five under section one hundred  eighty-three  of
   21  this  article  shall  be  filed  on  or before March fifteenth, nineteen
   22  hundred eighty-six. The report covering the tax surcharge which must  be
   23  calculated pursuant to this section based upon the tax reportable on the
   24  report due by March fifteenth, nineteen hundred eighty-six under section
   25  one  hundred  eighty-three  of  this article shall be filed on or before
   26  March fifteenth, nineteen hundred eighty-seven. The report covering  the
   27  tax  surcharge  which  must be calculated pursuant to this section based
   28  upon the tax reportable on the report due by March  fifteenth,  nineteen
   29  hundred  eighty-seven  under  section  one  hundred eighty-three of this
   30  article shall be filed on or before March  fifteenth,  nineteen  hundred
   31  eighty-eight. The report covering the tax surcharge which must be calcu-
   32  lated  pursuant  to  this  section  based upon the tax reportable on the
   33  report due by  March  fifteenth,  nineteen  hundred  eighty-eight  under
   34  section  one  hundred  eighty-three of this article shall be filed on or
   35  before March fifteenth, nineteen hundred eighty-nine. The report  cover-
   36  ing  the tax surcharge which must be calculated pursuant to this section
   37  based upon the tax reportable on the  report  due  by  March  fifteenth,
   38  nineteen  hundred  eighty-nine under section one hundred eighty-three of
   39  this article shall be filed  on  or  before  March  fifteenth,  nineteen
   40  hundred  ninety.]  The  report  covering the tax surcharge which must be
   41  calculated pursuant to this section based upon the tax reportable on the
   42  report due by March  fifteenth  of  any  year  [subsequent  to  nineteen
   43  hundred  eighty-nine]  under  section  one  hundred eighty-three of this
   44  article shall be filed on or before March fifteenth  of  the  year  next
   45  succeeding such year. An extension pursuant to section one hundred nine-
   46  ty-three  OF THIS ARTICLE shall be allowed only if a taxpayer files with
   47  the commissioner an application for  extension  in  such  form  as  said
   48  commissioner  may prescribe by regulation and pays on or before the date
   49  of such filing in addition to any  other  amounts  required  under  this
   50  article,  either  ninety percent of the entire tax surcharge required to
   51  be paid under this section for the applicable period, or not  less  than
   52  the tax surcharge shown on the taxpayer's report for the preceding year,
   53  if  such  preceding  year  consisted of twelve months. The tax surcharge
   54  imposed by this section shall be payable to the commissioner in full  at
   55  the  time  the report is required to be filed, and such tax surcharge or
   56  the balance thereof, imposed on any taxpayer which  ceases  to  exercise
       S. 6359--D                         143                        A. 8559--D

    1  its franchise or be subject to the tax surcharge imposed by this section
    2  shall  be payable to the commissioner at the time the report is required
    3  to be filed, provided such tax surcharge of a domestic corporation which
    4  continues to possess its franchise shall be subject to adjustment as the
    5  circumstances  may require; all other tax surcharges of any such taxpay-
    6  er, which pursuant to the foregoing provisions  of  this  section  would
    7  otherwise  be  payable subsequent to the time such report is required to
    8  be filed, shall nevertheless  be  payable  at  such  time.  All  of  the
    9  provisions  of  this article presently applicable to section one hundred
   10  eighty-three of this article are applicable to the tax surcharge imposed
   11  by this section except for section one hundred ninety-two of this  arti-
   12  cle.
   13    S  62.  Subdivision  1  of  section  184 of the tax law, as amended by
   14  section 2 of part Y of chapter 63 of the laws of  2000,  is  amended  to
   15  read as follows:
   16    1.  The  term  "corporation"  as used in this section shall include an
   17  association, within the meaning of paragraph three of subsection (a)  of
   18  section  seventy-seven hundred one of the internal revenue code (includ-
   19  ing a limited liability company), a publicly traded partnership  treated
   20  as  a  corporation for purposes of the internal revenue code pursuant to
   21  section seventy-seven hundred four thereof.
   22    Every corporation, joint-stock company or association  formed  for  or
   23  principally  engaged in the conduct of canal, steamboat, ferry (except a
   24  ferry company operating between any of the boroughs of the city  of  New
   25  York under a lease granted by the city), express, navigation, pipe line,
   26  transfer,  baggage  express,  omnibus, taxicab, telegraph or local tele-
   27  phone business, or formed for or principally engaged in the  conduct  of
   28  two  or  more  of  such  businesses,  and every corporation, joint-stock
   29  company or association formed for or principally engaged in the  conduct
   30  of  surface railroad, whether or not operated by steam, subway railroad,
   31  elevated railroad, palace car, sleeping  car  or  trucking  business  or
   32  formed  for  or  principally  engaged in the conduct of two or more such
   33  businesses and which has made an election pursuant to subdivision ten of
   34  section one hundred eighty-three of this article, and every other corpo-
   35  ration, joint-stock company or association  formed  for  or  principally
   36  engaged  in  the  conduct  of  a transportation or transmission business
   37  (other than a telephone business),  except  a  corporation,  joint-stock
   38  company  or association formed for or principally engaged in the conduct
   39  of a surface railroad, whether or not operated by  steam,  subway  rail-
   40  road,  elevated  railroad, palace car, sleeping car or trucking business
   41  or formed for or principally engaged in the conduct of two  or  more  of
   42  such  businesses  and  which  has  not made the election provided for in
   43  subdivision ten of section one hundred  eighty-three  of  this  article,
   44  and, except a corporation, joint-stock company or association principal-
   45  ly  engaged in the conduct of aviation (including air freight forwarders
   46  acting as principal and like indirect air carriers) and except a  corpo-
   47  ration  principally  engaged  in  providing  telecommunication  services
   48  between aircraft and dispatcher, aircraft and  air  traffic  control  or
   49  ground station and ground station (or any combination of the foregoing),
   50  at  least  ninety  percent  of  the voting stock of which corporation is
   51  owned, directly or indirectly, by air carriers and  which  corporation's
   52  principal  function  is  to  fulfill the requirements of (i) the federal
   53  aviation administration (or the successor thereto) or (ii) the  interna-
   54  tional  civil aviation organization (or the successor thereto), relating
   55  to  the  existence  of  a  communication  system  between  aircraft  and
   56  dispatcher,  aircraft  and  air  traffic  control  or ground station and
       S. 6359--D                         144                        A. 8559--D

    1  ground station (or any combination of the foregoing) for the purposes of
    2  air safety and navigation and [except a corporation, joint-stock company
    3  or association which is liable to taxation under article  thirty-two  of
    4  this  chapter,] for the privilege of exercising its corporate franchise,
    5  or of doing business, or of employing capital, or of owning  or  leasing
    6  property  in  this  state in a corporate or organized capacity, or main-
    7  taining an office in this state, shall pay a franchise tax  which  shall
    8  be  equal to [(i) three-quarters of one percent for taxable years ending
    9  before two thousand one, provided that for a taxable year ending in  two
   10  thousand  the  rate  shall  be  reduced  to three-eighths of one percent
   11  effective July first, two thousand with the result that for purposes  of
   12  implementation  of  such  change  in rate the applicable rate for such a
   13  year shall be nine-sixteenths of one percent, and (ii)] three-eighths of
   14  one percent for taxable years commencing after two  thousand,  upon  its
   15  gross  earnings  from  all  sources within this state; except that, [for
   16  taxable years commencing on or after  January  first,  nineteen  hundred
   17  eighty-five  and  ending  on  or  before December thirty-first, nineteen
   18  hundred eighty-nine, every corporation, joint-stock company  or  associ-
   19  ation  formed  for or principally engaged in the conduct of telephone or
   20  telegraph business shall pay a franchise tax which  shall  be  equal  to
   21  three-tenths  of one per centum upon its gross earnings from all sources
   22  within this state and,] for taxable years commencing on or after January
   23  first, nineteen hundred ninety, every corporation,  joint-stock  company
   24  or association formed for or principally engaged in the conduct of local
   25  telephone  business,  or  telegraph  business  shall pay a franchise tax
   26  which shall be equal to [(i) three-quarters of one percent  for  taxable
   27  years  ending  before two thousand one, provided that for a taxable year
   28  ending in two thousand the rate shall be reduced to three-eighths of one
   29  percent effective July first, two thousand  with  the  result  that  for
   30  purposes  of  implementation  of such change in rate the applicable rate
   31  for such a year shall be  nine-sixteenths  of  one  percent,  and  (ii)]
   32  three-eighths  of  one  percent  for  taxable years commencing after two
   33  thousand, upon its gross earnings from all sources  within  this  state,
   34  except that a corporation, joint-stock company or association formed for
   35  or  principally  engaged  in  the  conduct of a local telephone business
   36  shall exclude the following earnings (but  not  in  any  event  earnings
   37  derived  by such taxpayer from the provision of carrier access services)
   38  derived by such taxpayer from sales for ultimate consumption of telecom-
   39  munications service to its customers (i) thirty  percent  of  separately
   40  charged  intra-LATA  toll  service (which shall also include interregion
   41  regional calling plan service) and (ii) one hundred percent of separate-
   42  ly charged inter-LATA, interstate  or  international  telecommunications
   43  service; and except that [corporations, joint-stock companies or associ-
   44  ations formed for or principally engaged in the conduct of surface rail-
   45  road,  whether or not operated by steam, subway railroad, elevated rail-
   46  road, palace car or sleeping car,  business  or  any  other  corporation
   47  formed for or principally engaged in the conduct of a railroad business,
   48  for  taxable  years  prior to nineteen hundred ninety-seven, and] corpo-
   49  rations, joint-stock companies or associations formed for or principally
   50  engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
   51  ny operating between any of the boroughs of the city of New York under a
   52  lease granted by the city), navigation or any corporation formed for  or
   53  principally  engaged  in the operation of vessels, shall pay a franchise
   54  tax which shall be equal to three-quarters of one per  centum  upon  its
   55  gross  earnings  from  all sources within this state, excluding earnings
   56  derived from business of an interstate or foreign character; except that
       S. 6359--D                         145                        A. 8559--D

    1  for taxable years beginning in nineteen hundred ninety-seven  or  there-
    2  after,  in the case of a corporation, joint-stock company or association
    3  which, with respect to taxable years beginning  after  nineteen  hundred
    4  ninety-seven,  has  made  an  election  pursuant  to  subdivision ten of
    5  section one hundred eighty-three of this article and which is formed for
    6  or principally engaged in the conduct of surface  railroad,  whether  or
    7  not  operated  by steam, subway railroad, elevated railroad, palace car,
    8  sleeping car or trucking business or formed for or  principally  engaged
    9  in  the  conduct  of  two  or more of such businesses, such corporation,
   10  joint-stock company or association shall pay a franchise tax which shall
   11  be equal to [(i) six-tenths of one  percent  for  taxable  years  ending
   12  before  two thousand one, provided that for a taxable year ending in two
   13  thousand the rate shall be  reduced  to  three-eighths  of  one  percent
   14  effective  July first, two thousand with the result that for purposes of
   15  implementation of such change in rate the applicable  rate  for  such  a
   16  year  shall  be  thirty-nine eightieths of one percent, and (ii)] three-
   17  eighths of one percent for taxable years commencing after two  thousand,
   18  upon  its  gross  earnings  from all sources within this state, provided
   19  that in the case of a corporation, joint-stock  company  or  association
   20  formed  for  or  principally engaged in the conduct of surface railroad,
   21  whether or not operated by steam, subway  railroad,  elevated  railroad,
   22  palace  car  or  sleeping  car  business,  or  formed for or principally
   23  engaged in the conduct of two or more of  such  businesses,  such  gross
   24  earnings  shall  not include earnings derived from business of an inter-
   25  state or foreign character.
   26    Provided, however, with respect to railroad, elevated railroad, palace
   27  car or sleeping car business or any  other  corporation  formed  for  or
   28  principally  engaged  in  the  conduct of a railroad business and canal,
   29  steamboat, ferry (except a ferry company operating between  any  of  the
   30  boroughs  of  the  city  of New York under a lease granted by the city),
   31  navigation or any corporation formed for or principally engaged  in  the
   32  operation  of  vessels where the gross earnings from such transportation
   33  business both originating and terminating within this state and travers-
   34  ing both this state and another state or  states  or  country  shall  be
   35  subject  to the franchise tax imposed by this section (except where such
   36  corporation, joint-stock company or association is formed for or princi-
   37  pally engaged in the conduct of a railroad (including surface  railroad,
   38  whether or not operated by steam, subway railroad or elevated railroad),
   39  palace car or sleeping car business or formed for or principally engaged
   40  in  the  conduct of two or more of such businesses, and has not made the
   41  election provided for under  subdivision  ten  of  section  one  hundred
   42  eighty-three  of  this  article) and such earnings shall be allocated to
   43  this state in the same ratio that the mileage within the state bears  to
   44  the  total  mileage  of such business. Provided, further, a corporation,
   45  joint-stock company or association formed for or principally engaged  in
   46  the  transportation, transmission or distribution of gas, electricity or
   47  steam shall not be subject to tax under  this  section  or  section  one
   48  hundred eighty-three of this article.
   49    The  term "local telephone business" means the provision or furnishing
   50  of telecommunication services for hire wherein the service furnished  by
   51  the  provider  thereof consists of carrier access service or the service
   52  originates and terminates within the same  local  access  and  transport
   53  area  ("LATA"),  a local access and transport area being that geographic
   54  area as established and approved, and as so set and in existence on July
   55  first, nineteen hundred ninety-four, pursuant  to  the  modification  of
   56  final  judgment  in  United  States  v.  Western Electric Company (civil
       S. 6359--D                         146                        A. 8559--D

    1  action no. 82-0192) in the United States district court for the District
    2  of Columbia or within the LATA-like Rochester non-associated independent
    3  area.
    4    The  term "telecommunication services" shall have the meaning ascribed
    5  to such term in section one hundred eighty-six-e of this article.
    6    S 63. The section heading and the opening paragraph of  subdivision  1
    7  of section 184-a of the tax law, the section heading as added by chapter
    8  931  of  the  laws of 1982 and the opening paragraph of subdivision 1 as
    9  amended by section 2 of part A of chapter 59 of the laws  of  2013,  are
   10  amended to read as follows:
   11    Additional   [temporary]   metropolitan  transportation  business  tax
   12  surcharge on transportation and transmission  corporations  and  associ-
   13  ations services.
   14    The  term "corporation" as used in this section shall include an asso-
   15  ciation, within the meaning of paragraph  three  of  subsection  (a)  of
   16  section  seventy-seven hundred one of the internal revenue code (includ-
   17  ing a limited liability company),  and  a  publicly  traded  partnership
   18  treated  as  a  corporation  for  purposes  of the internal revenue code
   19  pursuant to section seventy-seven hundred four thereof.    Every  corpo-
   20  ration,  joint-stock  company  or  association formed for or principally
   21  engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
   22  ny operating between any of the boroughs of the city of New York under a
   23  lease granted by the city), express, navigation,  pipe  line,  transfer,
   24  baggage  express,  omnibus,  taxicab, telegraph or local telephone busi-
   25  ness, or formed for or principally engaged in the conduct of two or more
   26  such businesses, and every corporation, joint-stock company  or  associ-
   27  ation  formed  for  or  principally  engaged in the conduct of a surface
   28  railroad, whether or not operated by steam,  subway  railroad,  elevated
   29  railroad,  palace  car, sleeping car or trucking business or principally
   30  engaged in the conduct of two or more such businesses and which has made
   31  an election pursuant to subdivision ten of section one  hundred  eighty-
   32  three  of this article, and every other corporation, joint-stock company
   33  or association formed for or principally engaged in  the  conduct  of  a
   34  transportation  or  transmission  business (other than a telephone busi-
   35  ness) except a corporation, joint-stock company  or  association  formed
   36  for or principally engaged in the conduct of a surface railroad, whether
   37  or  not  operated  by  steam, subway railroad, elevated railroad, palace
   38  car, sleeping car or trucking business or  principally  engaged  in  the
   39  conduct  of  two  or  more  such  businesses  and which has not made the
   40  election provided for in subdivision ten of section one hundred  eighty-
   41  three  of this article, and except a corporation, joint-stock company or
   42  association principally engaged in the conduct  of  aviation  (including
   43  air  freight forwarders acting as principal and like indirect air carri-
   44  ers) and except a corporation principally engaged in providing  telecom-
   45  munication  services  between  aircraft and dispatcher, aircraft and air
   46  traffic control or ground station and ground station (or any combination
   47  of the foregoing), at least ninety percent of the voting stock of  which
   48  corporation  is owned, directly or indirectly, by air carriers and which
   49  corporation's principal function is to fulfill the requirements  of  (i)
   50  the  federal  aviation administration (or the successor thereto) or (ii)
   51  the international civil aviation organization (or the  successor  there-
   52  to),  relating  to  the  existence  of  a  communication  system between
   53  aircraft and dispatcher, aircraft and  air  traffic  control  or  ground
   54  station and ground station (or any combination of the foregoing) for the
   55  purposes  of air safety and navigation [and except a corporation, joint-
   56  stock company or association which is liable to taxation  under  article
       S. 6359--D                         147                        A. 8559--D

    1  thirty-two  of  this chapter], shall pay for the privilege of exercising
    2  its corporate franchise, or of doing business, or of employing  capital,
    3  or  of owning or leasing property in the metropolitan commuter transpor-
    4  tation district in such corporate or organized capacity, or of maintain-
    5  ing  an office in such district, a tax surcharge [for all or any part of
    6  its taxable years commencing on or after January first, nineteen hundred
    7  eighty-two, but ending before December thirty-first, two thousand  eigh-
    8  teen],  which  tax  surcharge, in addition to the tax imposed by section
    9  one hundred eighty-four of this article, shall be computed at  the  rate
   10  of  [eighteen  percent of the tax imposed under such section one hundred
   11  eighty-four for such taxable years or any part  of  such  taxable  years
   12  ending before December thirty-first, nineteen hundred eighty-three after
   13  the deduction of any credits otherwise allowable under this article, and
   14  at  the rate of] seventeen percent of the tax imposed under such section
   15  for such taxable years or any part of such taxable years [ending  on  or
   16  after  December  thirty-first,  nineteen hundred eighty-three] after the
   17  deduction  of  any  credits  otherwise  allowable  under  this  article;
   18  provided,  however,  that  such  rates of tax surcharge shall be applied
   19  only to that portion of the tax imposed under section one hundred eight-
   20  y-four of this article after the  deduction  of  any  credits  otherwise
   21  allowable  under  this  article  which is attributable to the taxpayer's
   22  business activity carried on within the metropolitan commuter  transpor-
   23  tation  district[; and provided, further, that the tax surcharge imposed
   24  by this section on corporations, joint-stock companies and  associations
   25  formed  for  or principally engaged in the conduct of telephone or tele-
   26  graph business shall be computed in accordance with this subdivision and
   27  paragraph (c) of subdivision two of this section as if  the  three-quar-
   28  ters  of  one  percent  rate  of  tax provided for in subdivision one of
   29  section one hundred eighty-four of this article were applicable to  such
   30  telephone  and  telegraph  businesses for taxable years commencing on or
   31  after January first, nineteen  hundred  eighty-five  and  ending  on  or
   32  before   December   thirty-first,   nineteen  hundred  eighty-nine;  and
   33  provided, further, that the tax surcharge imposed by this section  shall
   34  not  be  imposed upon any taxpayer for more than four hundred thirty-two
   35  months].  Provided, however, that for taxable  years  beginning  in  two
   36  thousand  and  thereafter,  for  purposes  of  this  subdivision the tax
   37  imposed under section one hundred eighty-four of this article  shall  be
   38  deemed  to  have  been  imposed  at  the  rate  of three-quarters of one
   39  percent, except that in the case of a corporation,  joint-stock  company
   40  or association which has made an election pursuant to subdivision ten of
   41  section  one  hundred eighty-three of this article, for purposes of this
   42  subdivision the tax imposed under section  one  hundred  eighty-four  of
   43  this  article  shall  be deemed to have been imposed at the rate of six-
   44  tenths of one percent.
   45    S 64. Subdivision 8 of section 186-a of the tax law is REPEALED.
   46    S 65.  The section heading and subdivision 1 of section 186-c  of  the
   47  tax  law,  the  section  heading  as amended by chapter 2 of the laws of
   48  1995, subdivision 1 as amended by section 3 of part II-1 of  chapter  57
   49  of the laws of 2008, subparagraph 1 of paragraph (a) of subdivision 1 as
   50  amended  by  section  3 of part A of chapter 59 of the laws of 2013, are
   51  amended to read as follows:
   52    [Temporary  metropolitan]  METROPOLITAN  transportation  business  tax
   53  surcharge  on  utility  services  and excise tax on sale of telecommuni-
   54  cation services.  1. (a) (1) Every utility doing business in the  metro-
   55  politan  commuter  transportation district shall pay a tax surcharge, in
   56  addition to the tax imposed by section one hundred eighty-six-a of  this
       S. 6359--D                         148                        A. 8559--D

    1  article[,  for  all  or  any parts of its taxable years commencing on or
    2  after January first,  nineteen  hundred  eighty-two  but  ending  before
    3  December  thirty-first,  two  thousand eighteen], to be computed [at the
    4  rate  of  eighteen  percent of the tax imposed under section one hundred
    5  eighty-six-a of this article for such taxable years or any part of  such
    6  taxable  years  ending  before  December  thirty-first, nineteen hundred
    7  eighty-three after the deduction  of  any  credits  otherwise  allowable
    8  under  this  article,  and]  at the rate of seventeen percent of the tax
    9  imposed under such section [for such taxable years or any part  of  such
   10  taxable years ending on or after December thirty-first, nineteen hundred
   11  eighty-three]  after  the deduction of credits otherwise allowable under
   12  this article except any utility credit provided  for  by  article  thir-
   13  teen-A  of  this  chapter;  provided,  however,  that  such rates of tax
   14  surcharge shall be applied only to that portion of the tax imposed under
   15  section one hundred eighty-six-a of this article after the deduction  of
   16  credits otherwise allowable under this article, except any utility cred-
   17  it  provided for by article thirteen-A of this chapter, which is attrib-
   18  utable to the taxpayer's gross income or  gross  operating  income  from
   19  business  activity carried on within the metropolitan commuter transpor-
   20  tation district[; and provided, further, that the tax surcharge  imposed
   21  by  this  section  shall  not be imposed upon any taxpayer for more than
   22  four hundred thirty-two months].
   23    (2) Provided however, that [commencing January first,  two  thousand,]
   24  in the case of the tax imposed under paragraph (a) of subdivision one of
   25  section  one hundred eighty-six-a of this article (relating to providers
   26  of telecommunications services) such tax surcharge shall  be  calculated
   27  as  if  the  tax  imposed under section one hundred eighty-six-a of this
   28  article were imposed at a rate of three and one-half percent.
   29    (b) In addition to the surcharge imposed  by  paragraph  (a)  of  this
   30  subdivision,  there  is hereby imposed a surcharge on the gross receipts
   31  from telecommunication services relating to  the  metropolitan  commuter
   32  transportation  district  at  the rate of seventeen percent of the state
   33  tax rate under section one hundred eighty-six-e of this article [for all
   34  or part of taxable years commencing on and after January first, nineteen
   35  hundred ninety-five but ending before December thirty-first,  two  thou-
   36  sand  thirteen]. All the definitions and other provisions of section one
   37  hundred eighty-six-e of this article shall apply to the tax  imposed  by
   38  this paragraph with such modification and limitation as may be necessary
   39  (including  substituting the words "metropolitan commuter transportation
   40  district" for "state" where appropriate) in order to adapt the  language
   41  of  such  section  one  hundred  eighty-six-e  of  this  article  to the
   42  surcharge imposed by this paragraph within  such  metropolitan  commuter
   43  transportation district so as to include (1) any intra-district telecom-
   44  munication  services,  except  any  telecommunication services the gross
   45  receipts from which are subject to tax under subparagraph four  of  this
   46  paragraph, (2) any inter-district telecommunication services which orig-
   47  inate or terminate in such district and are charged to a service address
   48  therein  regardless  of  where the amounts charged for such services are
   49  billed or ultimately paid, except any  telecommunications  services  the
   50  gross  receipts from which are subject to tax under subparagraph four of
   51  this paragraph, (3) as apportioned to such district, private  telecommu-
   52  nication  services,  except  any  telecommunication  services  the gross
   53  receipts from which are subject to tax under subparagraph four  of  this
   54  paragraph,  and (4) mobile telecommunications service provided by a home
   55  service provider where the place of primary use is within such metropol-
   56  itan commuter transportation  district.  Provided  however,  [commencing
       S. 6359--D                         149                        A. 8559--D

    1  October  first,  nineteen hundred ninety-eight] such tax surcharge shall
    2  be calculated as if the tax imposed under section  one  hundred  eighty-
    3  six-e  of  this  article  were  imposed  at a rate of three and one-half
    4  percent.
    5    S  66.  Clause  (iii) of subparagraph (D) of paragraph 3 of subsection
    6  (b) of section 605 of the tax law, as added by chapter 658 of  the  laws
    7  of 2003, is amended to read as follows:
    8    (iii)  Provided  further,  that for the purposes of item (I) of clause
    9  (i) of this subparagraph, a trustee which is a  banking  corporation  as
   10  defined  in subsection (a) of section fourteen hundred fifty-two of this
   11  chapter, AS SUCH SECTION WAS IN EFFECT  ON  DECEMBER  THIRTY-FIRST,  TWO
   12  THOUSAND  FOURTEEN, and which is domiciled outside the state of New York
   13  at the time it becomes a trustee of the trust shall be deemed to contin-
   14  ue to be a trustee domiciled outside the state of New York notwithstand-
   15  ing that it thereafter otherwise becomes  a  trustee  domiciled  in  the
   16  state  of New York by virtue of being acquired by, or becoming an office
   17  or branch of, a corporate trustee domiciled  within  the  state  of  New
   18  York.
   19    S  67.  Subparagraph  (A) of paragraph 10 of subsection (a) of section
   20  606 of the tax law, as amended by section 3 of part CC of chapter 85  of
   21  the laws of 2002, is amended to read as follows:
   22    (A)  the business of which the individual is an owner is substantially
   23  similar in operation and in ownership to a business entity  taxable,  or
   24  previously  taxable, under section one hundred eighty-three, one hundred
   25  eighty-four[,] OR one hundred eighty-five [or one hundred eighty-six] of
   26  article nine; article nine-A[, thirty-two] or thirty-three of this chap-
   27  ter; article twenty-three of this  chapter  or  which  would  have  been
   28  subject  to  tax under such article twenty-three (as such article was in
   29  effect on January first, nineteen hundred eighty), ARTICLE THIRTY-TWO OF
   30  THIS CHAPTER OR WHICH WOULD HAVE BEEN SUBJECT TO TAX UNDER SUCH  ARTICLE
   31  THIRTY-TWO  (AS SUCH ARTICLE WAS IN EFFECT ON DECEMBER THIRTY-FIRST, TWO
   32  THOUSAND FOURTEEN) or the income  (or  losses)  of  which  is  (or  was)
   33  includable  under  article twenty-two of this chapter whereby the intent
   34  and purpose of this paragraph and paragraph five of this subsection with
   35  respect to refunding of credit to new business would be evaded; or
   36    S 68. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
   37  of the tax law, as amended by section 7 of part C-1 of chapter 57 of the
   38  laws of 2009, clause (ix) as amended by section 4 of part G  of  chapter
   39  59  of  the laws of 2013, clause (xxxi) as added by section 5 of part MM
   40  of chapter 59 of the laws of 2010, clause (xxxi) as added by section  14
   41  of  part Q of chapter 57 of the laws of 2010, clause (xxxii) as added by
   42  section 6 of part V of chapter 61 of the laws of 2011,  clause  (xxxiii)
   43  as  added  by  section  4  of  part D of chapter 56 of the laws of 2011,
   44  clause (xxxiii) as added by section 5 of part E of  chapter  56  of  the
   45  laws  of  2011,  clause  (xxxiii) as added by chapter 604 of the laws of
   46  2011, clause (xxxiv) as added by chapter 109 of the laws of 2012, clause
   47  (xxxv) as added by section 2 of part AA of chapter 59  of  the  laws  of
   48  2013,  clause  (xxxv)  as added by section 4 of part EE of chapter 59 of
   49  the laws of 2013, and clause (xxxvi) as added by section 8 of part A  of
   50  chapter 68 of the laws of 2013, is amended to read as follows:
   51    (B)  shall  be  treated as the owner of a new business with respect to
   52  such share if the corporation qualifies as a new  business  pursuant  to
   53  paragraph  [(j)]  (F) of subdivision [twelve] ONE of section two hundred
   54  [ten] TEN-B of this chapter.

   55  With respect to the following        The corporation's credit base under
       S. 6359--D                         150                        A. 8559--D

    1  credit under this section:           section two hundred [ten or section
    2                                       fourteen hundred fifty-six] TEN-B
    3                                       of this chapter is:

    4  (i) Investment tax credit under      Investment credit base or qualified
    5  subsection (a)                       rehabilitation expenditures under
    6                                       subdivision [twelve] ONE of section
    7                                       two hundred [ten] TEN-B

    8  (ii) Empire zone investment          Cost or other basis under
    9  tax credit under subsection (j)      subdivision [twelve-B] THREE
   10                                       of section two hundred [ten] TEN-B

   11  [(iii) Empire zone wage tax credit   Eligible wages under subdivision
   12  under subsection (k)                 nineteen of section two hundred
   13                                       ten or subsection (e) of section
   14                                       fourteen hundred fifty-six

   15  (iv) Empire zone capital tax         Qualified investments and
   16  credit under subsection (l)          contributions under subdivision
   17                                       twenty of section two hundred ten
   18                                       or subsection (d) of section
   19                                       fourteen hundred fifty-six]

   20  (v) Agricultural property tax        Allowable school district property
   21  credit under subsection (n)          taxes under subdivision
   22                                       [twenty-two] ELEVEN of
   23                                       section two hundred [ten]
   24                                       TEN-B

   25  (vi) Credit for employment of        Qualified first-year wages or
   26  persons with disabilities            qualified second-year wages under
   27  under subsection (o)                 subdivision [twenty-three] TWELVE
   28                                       of section two hundred [ten or
   29                                       subsection (f) of section
   30                                       fourteen hundred fifty-six] TEN-B

   31  (vii) Employment incentive credit    Applicable investment credit base
   32  under subsection (a-1)               under subdivision [twelve-D] TWO
   33                                       of section two hundred [ten]
   34                                       TEN-B

   35  (viii) Empire zone employment        Applicable investment credit
   36  incentive credit under subsection    under subdivision [twelve-C]
   37  (j-1)                                FOUR of section
   38                                       two hundred [ten] TEN-B

   39  (ix) Alternative fuels               Amount of credit under subdivision
   40  and electric vehicle                 [twenty-four] THIRTY of section
   41  recharging property                  two hundred [ten] TEN-B
   42  credit under subsection (p)

   43  (x) Qualified emerging technology    Applicable credit base under
   44  company employment credit under      subdivision [twelve-E] SEVEN
   45  subsection (q)                       of section two hundred [ten] TEN-B
       S. 6359--D                         151                        A. 8559--D

    1  (xi) Qualified emerging technology   Qualified investments under
    2  company capital tax credit under     subdivision [twelve-F] EIGHT
    3  subsection (r)                       of section two hundred [ten] TEN-B

    4  (xii) Credit for purchase of an      Cost of an automated external
    5  automated external defibrillator     defibrillator under subdivision
    6  under subsection (s)                 [twenty-five] THIRTEEN of section
    7                                       two hundred [ten or subsection
    8                                       (j) of section fourteen hundred
    9                                       fifty-six] TEN-B

   10  (xiii) Low-income housing credit     Credit amount under subdivision
   11  under subsection (x)                 [thirty] FIFTEEN of section
   12                                       two hundred [ten or subsection
   13                                       (l) of section fourteen
   14                                       hundred fifty-six] TEN-B

   15  [(xiv) Credit for transportation     For taxable years beginning
   16  improvement contributions under      before January first, two thousand
   17  subsection (z)                       nine, amount of credit under
   18                                       subdivision thirty-two of
   19                                       section two hundred ten
   20                                       or subsection (n) of section
   21                                       fourteen hundred fifty-six]

   22  (xv) QEZE credit for real property   Amount of credit under subdivision
   23  taxes under subsection (bb)          [twenty-seven] FIVE of
   24                                       section two hundred [ten
   25                                       or subsection (o) of section
   26                                       fourteen hundred fifty-six]
   27                                       TEN-B

   28  (xvi) QEZE tax reduction credit      Amount of benefit period factor,
   29  under subsection (cc)                employment increase factor and zone
   30                                       allocation factor (without regard
   31                                       to pro ration) under subdivision
   32                                       [twenty-eight] SIX of
   33                                       section two hundred [ten
   34                                       or subsection (p) of section
   35                                       fourteen hundred fifty-six]
   36                                       TEN-B and amount
   37                                       of tax factor as determined under
   38                                       subdivision (f) of section sixteen

   39  (xvii) Green building credit under   Amount of green building credit
   40  subsection (y)                       under subdivision [thirty-one]
   41                                       SIXTEEN of section two
   42                                       hundred [ten or subsection (m)
   43                                       of section fourteen hundred
   44                                       fifty-six] TEN-B

   45  (xviii) Credit for long-term care    Qualified costs under subdivision
   46  insurance premiums under subsection  [twenty-five-a] FOURTEEN
   47  (aa)                                 of section two hundred [ten
   48                                       or subsection (k) of
   49                                       section fourteen hundred fifty-six]
       S. 6359--D                         152                        A. 8559--D

    1                                       TEN-B

    2  (xix) Brownfield redevelopment       Amount of credit under subdivision
    3  credit under subsection (dd)         [thirty-three] SEVENTEEN
    4                                       of section two hundred
    5                                       [ten or subsection (q) of section
    6                                       fourteen hundred fifty-six]
    7                                       TEN-B

    8  (xx) Remediated brownfield credit    Amount of credit under subdivision
    9  for real property taxes for          [thirty-four] EIGHTEEN
   10  qualified sites under subsection     of section two hundred
   11  (ee)                                 [ten of subsection (r) of section
   12                                       fourteen hundred fifty-six]
   13                                       TEN-B

   14  (xxi) Environmental remediation      Amount of credit under subdivision
   15  insurance credit under subsection    [thirty-five] NINETEEN
   16  (ff)                                 of section two hundred
   17                                       [ten or subsection (s) of section
   18                                       fourteen hundred fifty-six]
   19                                       TEN-B

   20  (xxii) Empire state film             Amount of credit for qualified
   21  production credit under              production costs in production of a
   22  subsection (gg)                      qualified film under subdivision
   23                                       [thirty-six] TWENTY of
   24                                       section two hundred [ten] TEN-B

   25  [(xxiii) Qualified emerging          Qualifying expenditures and
   26  technology company facilities,       development activities under
   27  operations and training credit       subdivision twelve-G of section two
   28  under subsection (nn)                hundred ten]

   29  (xxiv) Security training tax credit  Amount of credit under subdivision
   30  under subsection (ii)                [thirty-seven] TWENTY-ONE
   31                                       of section two hundred
   32                                       [ten or under subsection (t) of
   33                                       section fourteen hundred fifty-six]
   34                                       TEN-B

   35  [(xxv) Credit for qualified fuel     For taxable years beginning before
   36  cell electric generating             January first, two thousand nine,
   37  equipment expenditures               amount of credit under subdivision
   38  under subsection (g-2)               thirty-seven of section two hundred
   39                                       ten or subsection (t) of section
   40                                       fourteen hundred fifty-six]

   41  (xxvi) Empire state commercial       Amount of credit for qualified
   42  production credit under subsection   production costs in production of
   43  (jj)                                 a qualified commercial under
   44                                       subdivision [thirty-eight]
   45                                       TWENTY-THREE of
   46                                       section two hundred [ten]
   47                                       TEN-B
       S. 6359--D                         153                        A. 8559--D

    1  (xxvii) Biofuel production tax       Amount of credit under subdivision
    2  credit under subsection (jj)         [thirty-eight] TWENTY-FOUR
    3                                       of section two hundred [ten]
    4                                       TEN-B

    5  (xxviii) Clean heating fuel credit   Amount of credit under subdivision
    6  under subsection (mm)                [thirty-nine] TWENTY-FIVE of
    7                                       section two hundred [ten]
    8                                       TEN-B

    9  (xxix) Credit for rehabilitation     Amount of credit under subdivision
   10  of historic properties under         [forty] TWENTY-SIX of
   11  subsection (oo)                      section two hundred [ten]
   12                                       TEN-B

   13   (xxxi) Excelsior jobs program tax   Amount of credit under subdivision
   14  credit under subsection (qq)         [forty-one] THIRTY-ONE of
   15                                       section two hundred [ten
   16                                       or under subdivision (u) of
   17                                       section fourteen hundred fifty-six]
   18                                       TEN-B

   19  (xxxi) Empire state film             Amount of credit for
   20  post production credit under         qualified post production
   21  subsection (qq)                      costs of a qualified film
   22                                       under subdivision [forty-one]
   23                                       THIRTY-TWO of section
   24                                       two hundred [ten] TEN-B

   25   (xxxii) Economic transformation     Amount of credit under subdivision
   26  and facility redevelopment credit    [forty-three] THIRTY-FIVE
   27                                       of section [210 or under
   28                                       subsection (x) of section fourteen
   29                                       hundred fifty-six] TWO HUNDRED
   30                                       TEN-B

   31   (xxxiii) New York youth works       Amount of credit under
   32  tax credit                           subdivision [forty-four] THIRTY-SIX
   33                                       of section two hundred [ten]
   34                                       TEN-B

   35   (xxxiii) Empire state jobs          Amount of credit under
   36  retention program credit             subdivision [forty-four]
   37                                       THIRTY-SEVEN of section
   38                                       two hundred [ten or under
   39                                       subsection (y) of section
   40                                       fourteen hundred fifty-six]
   41                                       TEN-B

   42  (xxxiii) Credit for companies who    Amount of credit under
   43  provide transportation to            subdivision [forty-four]
   44  individuals with disabilities        THIRTY-EIGHT of section
   45  under subsection (tt)                two hundred [ten] TEN-B

   46  (xxxiv) Beer production credit       Amount of credit under
   47  under subsection (uu)                [subdivision] subdivision
       S. 6359--D                         154                        A. 8559--D

    1                                       [forty-five] THIRTY-NINE of
    2                                       section two hundred [ten]
    3                                       TEN-B

    4  (xxxv) Hire a vet credit             Amount of credit under subdivision
    5  under subsection (a-2)               [twenty-three-a] TWENTY-NINE
    6                                       of section two hundred [ten
    7                                       or subsection (e-1) of
    8                                       of section fourteen hundred
    9                                       fifty-six] TEN-B

   10  (xxxv) Minimum wage reimbursement    Amount of credit under subdivision
   11  credit under subsection (aaa)        [forty-six] FORTY
   12                                       of section two hundred
   13                                       [ten or subsection (z) of
   14                                       section fourteen hundred
   15                                       fifty-six] TEN-B

   16  (xxxvi) Tax-free NY area tax         Amount of credit under
   17  elimination credit                   subdivision [forty-seven] FORTY-ONE
   18                                       of section two hundred [ten]
   19                                       TEN-B

   20  (XXXVII) REAL PROPERTY TAX           AMOUNT OF CREDIT UNDER
   21  CREDIT FOR MANUFACTURERS             SUBDIVISION
   22  UNDER SUBSECTION (XX)                FORTY-THREE OF SECTION
   23                                       TWO HUNDRED TEN-B

   24  (XXXVIII) TAX-FREE NY AREA           AMOUNT OF CREDIT UNDER
   25  EXCISE TAX ON                        SUBDIVISION
   26  TELECOMMUNICATIONS SERVICES          FORTY-FOUR OF SECTION
   27  CREDIT UNDER SUBSECTION (YY)         TWO HUNDRED TEN-B

   28    S  69.  Subparagraphs  (A) and (B) of paragraph 3 of subsection (i) of
   29  section 606 of the tax law, as added by chapter 170 of the laws of 1994,
   30  are amended to read as follows:
   31    (A) Credit carryover. Any excess  credit  under  subparagraph  (A)  of
   32  paragraph  one of this subsection, as it was in effect for taxable years
   33  beginning before nineteen hundred ninety-four, may be  carried  over  to
   34  the  shareholder's following year or years and may be deducted from such
   35  shareholder's tax for such year or years, except that any excess  credit
   36  attributable  to  subdivision  [twelve] ONE of section two hundred [ten]
   37  TEN-B of this chapter shall in no event be carried over beyond  the  ten
   38  taxable years next following the taxable year of origin.
   39    (B)  Credit  recapture. Any redetermination of credit required by this
   40  subsection as it was in effect for taxable years beginning before  nine-
   41  teen hundred ninety-four, upon disposition or cessation of qualified use
   42  of property pursuant to paragraph [(g)] (E) of subdivision [twelve] ONE,
   43  OR  paragraph  (f) of subdivision [twelve-B or paragraph (f) of subdivi-
   44  sion eighteen] THREE of section two hundred [ten] TEN-B of this  chapter
   45  shall  be  attributed  in  pro  rata shares to the shareholders who were
   46  allowed credit under this subsection with respect to such property,  and
   47  the  reduction  of a shareholder's proportionate stock interest shall be
   48  treated as a disposition of property  for  which  a  redetermination  of
   49  credit under such paragraphs is required with respect to such sharehold-
   50  er.
       S. 6359--D                         155                        A. 8559--D

    1    S  70.  Subparagraph (B) of paragraph 3 and paragraph 21 of subsection
    2  (b) and paragraph 21 of subsection (c) of section 612 of  the  tax  law,
    3  subparagraph  (B) of paragraph 3 of subsection (b) as amended by section
    4  57, paragraph 21 of subsection (b) as amended by section  59  and  para-
    5  graph 21 of subsection (c) as amended by section 60 of part A of chapter
    6  389 of the laws of 1997, are amended to read as follows:
    7    (B) Shareholders of S corporations. In the case of a shareholder of an
    8  S  corporation,  with  respect  to  taxes imposed upon or payable by the
    9  corporation, the term "income taxes" in subparagraph (A) of  this  para-
   10  graph  shall  also  include  the  taxes imposed under [articles] ARTICLE
   11  nine-A [and thirty-two] of this chapter, regardless of  the  measure  of
   12  such  tax,  but shall not otherwise include taxes imposed by this or any
   13  other state of the United States, or any political subdivision  of  this
   14  or any other state, or the District of Columbia.
   15    (21)  In  relation  to  the  disposition of stock or indebtedness of a
   16  corporation which elected under subchapter  s  of  chapter  one  of  the
   17  internal  revenue  code  for any taxable year of such corporation begin-
   18  ning, in the case of a corporation taxable under article nine-A of  this
   19  chapter,  after  December thirty-first, nineteen hundred eighty, [and in
   20  the case of a corporation taxable under article thirty-two of this chap-
   21  ter, after December  thirty-first,  nineteen  hundred  ninety-six,]  the
   22  amount required to be added to federal adjusted gross income pursuant to
   23  subsection (n) of this section.
   24    (21)  In  relation  to  the  disposition of stock or indebtedness of a
   25  corporation which elected under subchapter  s  of  chapter  one  of  the
   26  internal  revenue  code  for any taxable year of such corporation begin-
   27  ning, in the case of a corporation taxable under article nine-A of  this
   28  chapter,  after  December thirty-first, nineteen hundred eighty, [and in
   29  the case of a corporation taxable under article thirty-two of this chap-
   30  ter, after December  thirty-first,  nineteen  hundred  ninety-six,]  the
   31  amounts  required  to  be  subtracted from federal adjusted gross income
   32  pursuant to subsection (n) of this section.
   33    S 71. Paragraph 2 of subsection (a) of section 632 of the tax law,  as
   34  amended  by  section  2  of part C of chapter 57 of the laws of 2010, is
   35  amended to read as follows:
   36    (2) In determining New York source income of a nonresident shareholder
   37  of an S corporation where the election provided for in subsection (a) of
   38  section six hundred sixty of this article is in effect, there  shall  be
   39  included only the portion derived from or connected with New York sourc-
   40  es  of  such  shareholder's  pro  rata  share  of items of S corporation
   41  income, loss and deduction entering  into  his  federal  adjusted  gross
   42  income,  increased  by  reductions for taxes described in paragraphs two
   43  and three of subsection (f) of section thirteen hundred sixty-six of the
   44  internal revenue code, as such portion shall be determined  under  regu-
   45  lations  of  the commissioner consistent with the applicable methods and
   46  rules for allocation under article nine-A [or thirty-two] of this  chap-
   47  ter,  regardless of whether or not such item or reduction is included in
   48  entire net income under article nine-A [or thirty-two] for the tax year.
   49  If a nonresident is a shareholder in an S corporation where the election
   50  provided for in subsection (a) of section  six  hundred  sixty  of  this
   51  article  is in effect, and the S corporation has distributed an install-
   52  ment obligation under section 453(h)(1)(A) of the Internal Revenue Code,
   53  then any gain recognized on the receipt of payments from the installment
   54  obligation for federal income tax purposes will be treated as  New  York
   55  source income allocated in a manner consistent with the applicable meth-
   56  ods  and  rules  for  allocation under article nine-A [or thirty-two] of
       S. 6359--D                         156                        A. 8559--D

    1  this chapter in the year that the assets were sold. In addition, if  the
    2  shareholders  of  the  S corporation have made an election under section
    3  338(h)(10) of the Internal Revenue Code, then any gain recognized on the
    4  deemed asset sale for federal income tax purposes will be treated as New
    5  York  source income allocated in a manner consistent with the applicable
    6  methods and rules for allocation under article nine-A [or thirty-two] of
    7  this  chapter  in  the  year  that  the  shareholder  made  the  section
    8  338(h)(10) election. For purposes of a section 338(h)(10) election, when
    9  a  nonresident  shareholder  exchanges his or her S corporation stock as
   10  part of the deemed liquidation, any gain or  loss  recognized  shall  be
   11  treated  as the disposition of an intangible asset and will not increase
   12  or offset any gain recognized on the deemed assets sale as a  result  of
   13  the section 338(h)(10) election.
   14    S 72. Subparagraph (A) of paragraph 4 of subsection (c) of section 658
   15  of the tax law, as amended by section 1 of part DD of chapter 686 of the
   16  laws of 2003, is amended to read as follows:
   17    (A) General. Every entity which is a partnership, other than a public-
   18  ly traded partnership as defined in section 7704 of the federal Internal
   19  Revenue Code, subchapter K limited liability company or an S corporation
   20  for  which  the  election  provided for in subsection (a) of section six
   21  hundred sixty of this [article] PART is in effect, which  has  partners,
   22  members  or  shareholders  who  are  nonresident individuals, as defined
   23  under subsection (b) of section six hundred five of this article,  or  C
   24  corporations,  and  which  has any income derived from New York sources,
   25  determined in accordance  with  the  applicable  rules  of  section  six
   26  hundred thirty-one of this article as in the case of a nonresident indi-
   27  vidual,  shall  pay estimated tax on such income on behalf of such part-
   28  ners, members or shareholders in the manner and at the times  prescribed
   29  by  subsection  (c)  of section six hundred eighty-five of this article.
   30  For purposes of this paragraph, the term "estimated tax"  shall  mean  a
   31  partner's,  member's  or  shareholder's  distributive  share or pro rata
   32  share of the entity income derived from New York sources, multiplied  by
   33  the  highest  rate  of tax prescribed by section six hundred one of this
   34  article for the taxable year of any partner, member or  shareholder  who
   35  is  an  individual  taxpayer,  or  paragraph  (a)  of subdivision one of
   36  section two hundred ten of this chapter for  the  taxable  year  of  any
   37  partner,  member or shareholder which is a C corporation, whether or not
   38  such C corporation is subject to tax under article nine, nine-A[,  thir-
   39  ty-two,]  or  thirty-three of this chapter, and reduced by the distribu-
   40  tive share or pro rata share of any credits determined under section one
   41  hundred eighty-seven, one  hundred  eighty-seven-a,  six  hundred  six[,
   42  fourteen  hundred  fifty-six] or fifteen hundred eleven of this chapter,
   43  whichever is applicable, derived from the entity.
   44    S 73. Subsections  (a)  and  (h)  of  section  660  of  the  tax  law,
   45  subsection (a) as amended by section 50 and subsection (h) as amended by
   46  section  66 of part A of chapter 389 of the laws of 1997, are amended to
   47  read as follows:
   48    (a) Election. If a corporation  is  an  eligible  S  corporation,  the
   49  shareholders  of  the  corporation  may elect in the manner set forth in
   50  subsection (b) of this section to  take  into  account,  to  the  extent
   51  provided for in this article (or in article thirteen of this chapter, in
   52  the case of a shareholder which is a taxpayer under such article), the S
   53  corporation  items  of  income, loss, deduction and reductions for taxes
   54  described in paragraphs two and three of subsection (f) of section thir-
   55  teen hundred sixty-six of the internal revenue code which are taken into
   56  account for federal  income  tax  purposes  for  the  taxable  year.  No
       S. 6359--D                         157                        A. 8559--D

    1  election  under this subsection shall be effective unless all sharehold-
    2  ers of the corporation have so elected. An eligible S corporation is (i)
    3  an S corporation which is subject to tax under article nine-A [or  thir-
    4  ty-two] of this chapter, OR (ii) an S corporation which is the parent of
    5  a qualified subchapter S subsidiary subject to tax under article nine-A,
    6  where  the  shareholders of such parent corporation are entitled to make
    7  the election under this subsection by reason of  subparagraph  three  of
    8  paragraph  (k)  of subdivision nine of section two hundred eight of this
    9  chapter[; or (iii) an S corporation which is the parent of  a  qualified
   10  subchapter  S corporation subject to tax under article thirty-two, where
   11  the shareholders of such parent are entitled to make the election  under
   12  this  subsection  by  reason  of  paragraph  three  of subsection (o) of
   13  section fourteen hundred fifty-three of this chapter].
   14    (h) Cross reference. For definitions relating to S  corporations,  see
   15  subdivision  one-A of section two hundred eight [and subsections (f) and
   16  (g) of section fourteen hundred fifty] of this chapter.
   17    S 74. Paragraph 1 of subsection (i) of section 660 of the tax law,  as
   18  added  by  section  1  of  part  L of chapter 60 of the laws of 2007, is
   19  amended to read as follows:
   20    (1) Notwithstanding the provisions in subsection (a) of this  section,
   21  in  the  case  of an eligible S corporation for which the election under
   22  subsection (a) of this section is not in effect for the current  taxable
   23  year,  the  shareholders of an eligible S corporation are deemed to have
   24  made that election effective for the  eligible  S  corporation's  entire
   25  current  taxable year, if the eligible S corporation's investment income
   26  for the current taxable year is more than fifty percent of  its  federal
   27  gross  income  for  such  year  [provided that this subsection shall not
   28  apply to an eligible S corporation that is subject to tax under  article
   29  thirty-two  of this chapter]. IN DETERMINING AN ELIGIBLE S CORPORATION'S
   30  INVESTMENT INCOME, THE INVESTMENT INCOME OF  A  QUALIFIED  SUBCHAPTER  S
   31  SUBSIDIARY  OWNED  DIRECTLY  OR INDIRECTLY BY THE ELIGIBLE S CORPORATION
   32  SHALL BE INCLUDED.
   33    S 75. Paragraph 3 of subsection (c) of section 1085 of the tax law, as
   34  amended by section 15 of part Y of chapter 63 of the laws  of  2000,  is
   35  amended to read as follows:
   36    (3)  The  provisions of this subsection and subsections (d) and (e) of
   37  this section shall apply to the failure of a taxpayer to file a declara-
   38  tion of estimated tax surcharge or the failure to pay all or any part of
   39  an amount which is applied as an installment against such estimated  tax
   40  surcharge  pursuant  to sections one hundred ninety-seven-a, one hundred
   41  ninety-seven-b, two hundred thirteen-a, two hundred  thirteen-b,  [four-
   42  teen  hundred  sixty, fourteen hundred sixty-one,] fifteen hundred thir-
   43  teen and fifteen hundred fourteen  of  this  chapter.  For  purposes  of
   44  applying this section and subsections (d) and (e) of this section to the
   45  estimated  tax surcharge, where appropriate the term "tax" shall be read
   46  to mean "tax surcharge," and the terms "amount  required  to  be  paid,"
   47  "amount  which  would  be  required to be paid," and "amount which would
   48  have been required to be paid" shall be computed as the product  of  (1)
   49  such  amount computed without regard to the tax surcharges imposed under
   50  sections  one  hundred  eighty-four-a,  one  hundred  eighty-six-c,  one
   51  hundred  eighty-eight, two hundred nine-A, two hundred nine-B, [fourteen
   52  hundred fifty-five-A, fourteen hundred  fifty-five-B,]  fifteen  hundred
   53  five-a,  and  fifteen  hundred  twenty  of this chapter, and (2) the MTA
   54  percentage. The term "MTA percentage" shall mean the product of (A)  the
   55  tax rate applicable under such sections imposing such surcharges and (B)
   56  the  percentage  utilized  in  determining the portion of the taxpayer's
       S. 6359--D                         158                        A. 8559--D

    1  business activity carried on within the metropolitan commuter  transpor-
    2  tation district under such sections.
    3    S  76.  The  opening  paragraph  of subparagraph (A) of paragraph 3 of
    4  subsection (d) of section 1085 of the tax law, as amended by chapter 170
    5  of the laws of 1994, is amended to read as follows:
    6    An amount equal to ninety-one percent of the tax for the taxable  year
    7  computed  on all items entering into the computation of the tax or taxes
    8  of the taxpayer for the taxable year under article nine, nine-A[,  thir-
    9  ty-two]  or  thirty-three of this chapter. For purposes of computing the
   10  tax, all items of receipts, income and expenses shall be  placed  on  an
   11  annualized basis--
   12    S  77. Clause (i) of subparagraph (A) of paragraph 4 of subsection (d)
   13  of section 1085 of the tax law, as amended by chapter 57 of the laws  of
   14  1993, is amended to read as follows:
   15    (i)  take  the items entering into the computation of the tax or taxes
   16  of the taxpayer for the taxable year under article nine, nine-A[,  thir-
   17  ty-two] or thirty-three of this chapter, for all months during the taxa-
   18  ble year preceding the filing month,
   19    S 78. Paragraph 5 of subsection (d) of section 1085 of the tax law, as
   20  added by chapter 61 of the laws of 1989, is amended to read as follows:
   21    (5)  In the case of any declaration installment, any reduction in such
   22  installment resulting from the application of paragraph three or four of
   23  this subsection shall be recaptured by increasing the amount of the next
   24  installment determined under paragraph one or two of this subsection  or
   25  paragraph  one  of  subsection (c) of this section by the amount of such
   26  reduction (and by increasing subsequent installments to the extent  that
   27  the  reduction has not previously been recaptured under this paragraph).
   28  For purposes of the preceding sentence, a declaration installment  means
   29  any installment of estimated tax other than the mandatory first install-
   30  ment  required  under  paragraph  (a)  of subdivision one of section one
   31  hundred ninety-seven-b, subdivision (a) of  section  two  hundred  thir-
   32  teen-b[, subsection (a) of section fourteen hundred sixty-one] or subdi-
   33  vision (a) of section fifteen hundred fourteen of this chapter.
   34    S 79. Paragraph 1 of subsection (e) of section 1085 of the tax law, as
   35  amended  by  section 28-p of part H-3 of chapter 62 of the laws of 2003,
   36  is amended to read as follows:
   37    (1) Paragraphs (1) and (2) of subsection (d) of this section shall not
   38  apply in the case of any corporation (or  any  predecessor  corporation)
   39  which had [entire net] BUSINESS income, or the portion thereof allocated
   40  within  the  state,  of one million dollars or more for any taxable year
   41  during the three taxable years immediately preceding  the  taxable  year
   42  involved;  provided,  however, that in the case of a corporation subject
   43  to tax under section fifteen hundred two-a of this  chapter,  paragraphs
   44  (1)  and  (2)  of subsection (d) of this section shall not apply if such
   45  corporation had entire net income,  or  the  portion  thereof  allocated
   46  within  the  state,  of one million dollars or more for any of the three
   47  taxable years immediately preceding the taxable year involved, or if the
   48  direct premiums subject to tax under section fifteen  hundred  two-a  of
   49  this  chapter of the corporation for any of such three preceding taxable
   50  years beginning on or after January first, two thousand three equals  or
   51  exceeds three million seven hundred fifty thousand dollars.
   52    S  80.  Subsections  (m)  and  (o)  of section 1085 of the tax law are
   53  REPEALED.
   54    S 81. Clause (ii) of subparagraph (B) of  paragraph  2  of  subsection
   55  (q),  paragraph  3  of subsection (s) and the closing paragraph of para-
   56  graph 1 of subsection (t) of section 1085 of the tax law,  as  added  by
       S. 6359--D                         159                        A. 8559--D

    1  section  10  of part N of chapter 61 of the laws of 2005, are amended to
    2  read as follows:
    3    (ii)  fifty percent of the gross income that the organizer or material
    4  advisor derived with respect to activities that were the basis  for  the
    5  requirement to file, disclose or provide information pursuant to section
    6  six  thousand  eleven  of  the internal revenue code, to the extent such
    7  gross income is attributable to the avoidance of any tax  imposed  under
    8  article nine, nine-A[, thirty-two,] or thirty-three of this chapter.
    9    (3)  For  purposes  of  this  subsection,  the term "understatement of
   10  liability" means any understatement  of  the  net  amount  payable  with
   11  respect  to any tax imposed under article nine, nine-A[, thirty-two,] or
   12  thirty-three of this chapter or any  overstatement  of  the  net  amount
   13  creditable or refundable with respect to any such tax.
   14  shall  pay,  with respect to each activity described in subparagraph (A)
   15  of this paragraph, a penalty equal to one thousand dollars  or,  if  the
   16  person  establishes  that it is lesser, one hundred percent of the gross
   17  income derived (or to be derived) by such person from such  activity  to
   18  the  extent  such gross income is attributed to the avoidance of any tax
   19  imposed under articles nine, nine-A[,  thirty-two]  or  thirty-three  of
   20  this  chapter;  provided,  however,  that if an activity with respect to
   21  which a penalty imposed  under  this  subsection  involves  a  statement
   22  described  in  clause  (i)  of subparagraph (B) of paragraph one of this
   23  subsection, the penalty shall be equal to fifty  percent  of  the  gross
   24  income derived (or to be derived) from that activity within the state by
   25  the  person on which the penalty is imposed. For purposes of the preced-
   26  ing sentence, activities described in clause (i) of subparagraph (A)  of
   27  this  paragraph  with  respect  to  each  entity or arrangement shall be
   28  treated as a separate activity and participation in each sale  described
   29  in  clause (ii) of subparagraph (A) of this paragraph shall be so treat-
   30  ed.
   31    S 82. The opening paragraph of subsection (c) of section 1087  of  the
   32  tax  law,  as  separately amended by chapters 760 and 770 of the laws of
   33  1992, is amended to read as follows:
   34    If a taxpayer is required by subdivision three of section two  hundred
   35  eleven[,  subsection (e) of section fourteen hundred sixty-two] or para-
   36  graph one of subdivision (e) of section fifteen hundred fifteen OF  THIS
   37  CHAPTER, to file a report or amended return in respect of (i) a decrease
   38  or  increase  in  federal  taxable income or federal alternative minimum
   39  taxable income or federal tax, or (ii) a federal change or correction or
   40  renegotiation, or computation or recomputation of tax, which is  treated
   41  in  the  same manner as if it were an overpayment for federal income tax
   42  purposes, claim for credit or refund of any resulting overpayment of tax
   43  shall be filed by the taxpayer within  two  years  from  the  time  such
   44  report  or amended return was required to be filed with the commissioner
   45  [of taxation and finance]. If the report or amended return  required  by
   46  any  such provision of law is not filed within the period therein speci-
   47  fied, no interest shall be payable on any claim for credit or refund  of
   48  the  overpayment  attributable  to the federal change or correction. The
   49  amount of such credit or refund--
   50    S 83. Subsection (g) of section 1088 of the tax  law,  as  amended  by
   51  chapter  61 of the laws of 1989 and relettered by chapter 55 of the laws
   52  of 1992, is amended to read as follows:
   53    (g) Cross-reference.--For provision with  respect  to  interest  after
   54  failure  to  file  a report or amended return under subdivision three of
   55  section two hundred eleven[, subsection (e) of section fourteen  hundred
   56  sixty-two]  or  paragraph  one  of  subdivision  (e)  of section fifteen
       S. 6359--D                         160                        A. 8559--D

    1  hundred fifteen, see subsection (c) of section one thousand  eighty-sev-
    2  en.
    3    S 84. Paragraph 2 of subsection (b) of section 1096 of the tax law, as
    4  amended  by  chapter  411  of  the  laws  of 1986, is amended to read as
    5  follows:
    6    (2) The [tax commission] COMMISSIONER may take any action under  para-
    7  graph  one  of  this  subdivision  to  inquire into the commission of an
    8  offense connected with the administration or enforcement of this article
    9  or article nine, [nine-a] NINE-A,  thirteen,  [thirteen-a,  thirty-two,]
   10  THIRTEEN-A  or  thirty-three  of  this  chapter, provided, however, that
   11  notwithstanding the provisions of section one  hundred  seventy-four  of
   12  this  chapter  no  such  action  shall  be  taken when a referral by the
   13  department or the [tax commission] COMMISSIONER to the attorney general,
   14  a district attorney or any other  prosecutorial  agency  is  in  effect.
   15  Provided,  however,  the [tax commission] COMMISSIONER shall have power,
   16  during the period when such referral is in  effect,  to  examine  or  to
   17  cause  to have examined, by any agent or representative designated by it
   18  for that purpose, any books, papers, records or memoranda  bearing  upon
   19  the  matters  required  to  be included in the return, where such books,
   20  papers, records or memoranda are in its possession, or where such books,
   21  papers, records or memoranda are  in  the  possession  of  the  attorney
   22  general,  district  attorney or other prosecutorial agency to which such
   23  referral is made.
   24    S 85. Paragraph 1 of subsection (e) of section 1096 of the tax law, as
   25  amended by section 8 of subpart D of part V1 of chapter 57 of  the  laws
   26  of 2009, is amended to read as follows:
   27    (1)  Authority to set interest rates.---The commissioner shall set the
   28  overpayment and underpayment rates of interest to be  paid  pursuant  to
   29  sections  two  hundred  thirteen,  two  hundred  thirteen-b, two hundred
   30  fifty-eight, two hundred sixty-three, two hundred ninety-four, one thou-
   31  sand eighty-four, one thousand eighty-five[,] AND one  thousand  eighty-
   32  eight[,  fourteen hundred sixty-one and fourteen hundred sixty-three] of
   33  this chapter, but if no such rate or rates of  interest  are  set,  such
   34  overpayment  rate shall be deemed to be set at six percent per annum and
   35  such underpayment rate shall be deemed to be set at seven  and  one-half
   36  percent  per annum. Such overpayment and underpayment rates shall be the
   37  rates prescribed in paragraph two of this subsection, but the  underpay-
   38  ment  rate  shall not be less than seven and one-half percent per annum.
   39  Any such rates set by the commissioner shall  apply  to  taxes,  or  any
   40  portion  thereof, which remain or become due or overpaid on or after the
   41  date on which such rates become effective  and  shall  apply  only  with
   42  respect  to  interest  computed or computable for periods or portions of
   43  periods occurring in the period during which such rates are in effect.
   44    S 86. Subdivision (b) of section 1201-a of the tax law, as amended  by
   45  section  5  of  part  Y of chapter 62 of the laws of 2006, is amended to
   46  read as follows:
   47    (b) Empire state film production credit. Any city in this state having
   48  a population of one million or more, acting through its  local  legisla-
   49  tive body, is hereby authorized to adopt and amend local laws to allow a
   50  credit  against the general corporation tax and the unincorporated busi-
   51  ness tax imposed pursuant to the  authority  of  chapter  seven  hundred
   52  seventy-two  of  the  laws  of nineteen hundred sixty-six which shall be
   53  substantially identical to the credit allowed under section  twenty-four
   54  of  this chapter, except that (A) the percentage of qualified production
   55  costs used to calculate such credit shall be five percent, (B)  whenever
   56  such  section twenty-four references the state, such words shall be read
       S. 6359--D                         161                        A. 8559--D

    1  as referencing the city, (C) such credit shall  be  allowed  only  to  a
    2  taxpayer  which  is  a  qualified  film  production company, and (D) the
    3  effective date of such credit shall be July  first,  two  thousand  six.
    4  Such  credit  shall  be  applied  in a manner consistent with the credit
    5  allowed under subdivision [thirty-six] TWENTY  of  section  two  hundred
    6  [ten]  TEN-B  of  this  chapter  except as may be necessary to take into
    7  account differences between the general corporation tax and the unincor-
    8  porated business tax.
    9    S 87. Subdivision (c) of section 1201-a of the tax law, as amended  by
   10  chapter 300 of the laws of 2007, is amended to read as follows:
   11    (c)  Empire state commercial production credit. Any city in this state
   12  having a population of one million or more,  acting  through  its  local
   13  legislative  body, is hereby authorized to adopt and amend local laws to
   14  allow a credit against the general corporation tax and the unincorporat-
   15  ed business tax imposed pursuant  to  the  authority  of  chapter  seven
   16  hundred  seventy-two  of  the  laws  of nineteen hundred sixty-six which
   17  shall be  substantially  identical  to  the  credit  allowed  under  the
   18  provisions  of section twenty-eight of this chapter, except that (A) the
   19  percentage of qualified production costs used to calculate  such  credit
   20  shall be five percent, (B) whenever such section twenty-eight references
   21  the  state,  such  words shall be read as referencing the city, (C) such
   22  credit shall be allowed only to a taxpayer that is a  qualified  commer-
   23  cial production company, and (D) the effective date of such credit shall
   24  be  as  provided in local laws. Such credit shall be applied in a manner
   25  consistent with the  credit  allowed  under  subdivision  [thirty-eight]
   26  TWENTY-THREE  of  section two hundred [ten] TEN-B of this chapter except
   27  as may be necessary to take into account differences between the general
   28  corporation tax and unincorporated business tax.
   29    S 88. The section heading and paragraphs 1 and 3 of subdivision (a) of
   30  section 1505-a of the tax law, the section heading as added  by  chapter
   31  11  of  the  laws  of  1983 and paragraphs 1 and 3 of subdivision (a) as
   32  amended by section 6 of part A of chapter 59 of the laws  of  2013,  are
   33  amended to read as follows:
   34    [Temporary  metropolitan]  METROPOLITAN  transportation  business  tax
   35  surcharge on insurance corporations.
   36    (1) Every domestic insurance corporation and every  foreign  or  alien
   37  insurance corporation, and every life insurance corporation described in
   38  subdivision  (b) of section fifteen hundred one of this article, for the
   39  privilege of exercising its corporate franchise, or of  doing  business,
   40  or  of employing capital, or of owning or leasing property in the metro-
   41  politan commuter transportation district in  a  corporate  or  organized
   42  capacity,  or  of  maintaining  an  office  in the metropolitan commuter
   43  transportation district, [for all or  any  part  of  its  taxable  years
   44  commencing  on  or after January first, nineteen hundred eighty-two, but
   45  ending before December  thirty-first,  two  thousand  eighteen,]  except
   46  corporations  specified  in  subdivision  (c) of section fifteen hundred
   47  twelve of this article, shall annually pay, in  addition  to  the  taxes
   48  otherwise  imposed by this article, a tax surcharge on the taxes imposed
   49  under this article after the deduction of any credits  otherwise  allow-
   50  able  under this article as allocated to such district. Such taxes shall
   51  be allocated to  such  district  for  purposes  of  computing  such  tax
   52  surcharge upon taxpayers subject to tax under subdivision (b) of section
   53  fifteen  hundred ten of this article by applying the methodology, proce-
   54  dures and computations set forth in subdivisions (a) and (b) of  section
   55  fifteen  hundred  four  of this article, except that references to terms
   56  denoting New York premiums, and total wages, salaries, personal  service
       S. 6359--D                         162                        A. 8559--D

    1  compensation  and  commissions within New York shall be read as denoting
    2  within the  metropolitan  commuter  transportation  district  and  terms
    3  denoting  total  premiums  and  total  wages, salaries, personal service
    4  compensation and commissions shall be read as denoting within the state.
    5  If it shall appear to the commissioner that the application of the meth-
    6  odology,  procedures and computations set forth in such subdivisions (a)
    7  and (b) does not properly reflect the activity, business or income of  a
    8  taxpayer  within the metropolitan commuter transportation district, then
    9  the commissioner shall be authorized, in the commissioner's  discretion,
   10  to  adjust such methodology, procedures and computations for the purpose
   11  of allocating such taxes by:
   12    (A) excluding one or more factors therein;
   13    (B) including one or more other factors  therein,  such  as  expenses,
   14  purchases,  receipts  other  than  premiums,  real  property or tangible
   15  personal property; or
   16    (C) any other similar or different method which allocates  such  taxes
   17  by  attributing a fair and proper portion of such taxes to the metropol-
   18  itan commuter transportation district. The  commissioner  from  time  to
   19  time  shall  publish all rulings of general public interest with respect
   20  to any application of the provisions  of  the  preceding  sentence.  The
   21  commissioner  may  promulgate rules and regulations to further implement
   22  the provisions of this section.
   23    (3) Such tax surcharge shall be computed  at  the  rate  of  [eighteen
   24  percent  of  the  taxes  imposed  under sections fifteen hundred one and
   25  fifteen hundred ten of  this  article  as  limited  by  section  fifteen
   26  hundred  five  of  this article, as allocated to such district, for such
   27  taxable years or any part of such taxable years ending  before  December
   28  thirty-first,  nineteen  hundred eighty-three after the deduction of any
   29  credits otherwise allowable under this article, at the rate of seventeen
   30  percent of the taxes imposed under such sections as limited  by  section
   31  fifteen hundred five of this article, as allocated to such district, for
   32  such  taxable years or any part of such taxable years ending on or after
   33  December thirty-first, nineteen hundred eighty-three and before  January
   34  first,  two  thousand three after the deduction of any credits otherwise
   35  allowable under this article, and at the rate of] seventeen  percent  of
   36  the  taxes  imposed  under sections fifteen hundred one, fifteen hundred
   37  two-a, and fifteen hundred ten of this article, as limited or  otherwise
   38  determined  by subdivision (a) or (b) of section fifteen hundred five of
   39  this article, as allocated to such district, [for such taxable years  or
   40  any  part  of such taxable years ending after December thirty-first, two
   41  thousand two] after the deduction of  any  credits  otherwise  allowable
   42  under  this  article[; provided, however, that the tax surcharge imposed
   43  by this section shall not be imposed upon any  taxpayer  for  more  than
   44  four  hundred  thirty-two  months].  Provided  however, that for taxable
   45  years commencing on or after July first, two thousand, and in  the  case
   46  of  taxpayers subject to tax under section fifteen hundred two-a of this
   47  article, for taxable years of such taxpayers beginning on or after  July
   48  first,  two  thousand and before January first, two thousand three, such
   49  surcharge shall be calculated as if (i) the rate  of  the  tax  computed
   50  under paragraph one of subdivision (a) of section fifteen hundred two of
   51  this article was nine percent and (ii) the rate of the limitation on tax
   52  set  forth in section fifteen hundred five of this article for domestic,
   53  foreign and alien insurance corporations except  life  insurance  corpo-
   54  rations was two and six-tenths percent.
   55    S  89.  Section 1825 of the tax law, as amended by section 2 of part E
   56  of chapter 25 of the laws of 2009, is amended to read as follows:
       S. 6359--D                         163                        A. 8559--D

    1    S 1825. Violation of secrecy provisions of the  tax  law.--Any  person
    2  who  violates  the  provisions of subdivision (b) of section twenty-one,
    3  subdivision one of section two hundred two, subdivision eight of section
    4  two hundred eleven, subdivision (a) of section three  hundred  fourteen,
    5  subdivision  one  or  two  of section four hundred thirty-seven, section
    6  four hundred eighty-seven,  subdivision  one  or  two  of  section  five
    7  hundred  fourteen,  subsection  (e) of section six hundred ninety-seven,
    8  subsection (a) of section nine hundred ninety-four, subdivision  (a)  of
    9  section  eleven  hundred forty-six, section twelve hundred eighty-seven,
   10  subdivision (a) of section fourteen hundred eighteen, [subsection (a) of
   11  section  fourteen  hundred  sixty-seven,]  subdivision  (a)  of  section
   12  fifteen  hundred  eighteen,  subdivision  (a) of section fifteen hundred
   13  fifty-five of this chapter, and subdivision (e) of  section  11-1797  of
   14  the  administrative  code  of  the city of New York shall be guilty of a
   15  misdemeanor.
   16    S 90. Subdivisions (s) and (t) of section 957 of the general municipal
   17  law, as amended by section 1 of part S1 of chapter 57  of  the  laws  of
   18  2009, are amended to read as follows:
   19    (s)  "Qualified  investment  project" shall mean a project (i) located
   20  within an empire zone, (ii) at which five hundred or more jobs  will  be
   21  created,  provided such jobs are new to the state and are in addition to
   22  any other jobs previously created by the owner of such  project  in  the
   23  state,  and  (iii)  which will consist of tangible personal property and
   24  other tangible property, including buildings and  structural  components
   25  of  buildings,  described  in  subparagraphs  (i), (ii), (iii), (iv) and
   26  clause (A) or (C) of subparagraph (v) of paragraph  (b)  of  subdivision
   27  [twelve-B]  THREE of section two hundred [ten] TEN-B of the tax law, the
   28  basis of which for federal income tax  purposes  will  equal  or  exceed
   29  seven hundred fifty million dollars. Provided however, the owner of such
   30  project  does  not  employ more than two hundred persons in the state at
   31  the time such project is commenced.
   32    (t) "Significant capital investment project" shall mean a project  (i)
   33  located  within  an  empire  zone,  (ii)  which  will  be either a newly
   34  constructed facility or a newly constructed addition to or expansion  of
   35  a qualified investment project, consisting of tangible personal property
   36  and  other  tangible property, including buildings and structural compo-
   37  nents of buildings, described in subparagraphs (i),  (ii),  (iii),  (iv)
   38  and  clause  (A) or (C) of subparagraph (v) of paragraph (b) of subdivi-
   39  sion [twelve-B] THREE of section two hundred [ten] TEN-B of the tax law,
   40  the basis of which for federal income tax purposes will equal or  exceed
   41  seven  hundred  fifty  million dollars, (iii) which is constructed after
   42  the basis for federal income tax purposes  of  the  property  comprising
   43  such  qualified investment project equals or exceeds seven hundred fifty
   44  million dollars, and (iv) at which five hundred or  more  jobs  will  be
   45  created,  provided such jobs are new to the state and are in addition to
   46  any other jobs previously created by the owner of such  project  in  the
   47  state.
   48    S 91. Intentionally omitted.
   49    S 92. Intentionally omitted.
   50    S 93. Intentionally omitted.
   51    S 94. Intentionally omitted.
   52    S 95. Intentionally omitted.
   53    S 96. Intentionally omitted.
   54    S 97. Intentionally omitted.
   55    S 98. Intentionally omitted.
       S. 6359--D                         164                        A. 8559--D

    1    S  99.  Notwithstanding  any  provisions  of  law  to the contrary and
    2  notwithstanding the repeal of article 32 of the tax law by  section  one
    3  of  this act, the repeal of section 180 of the tax law by section two of
    4  this act and the repeal of section 181 of the tax law by  section  three
    5  of  this  act,  all  provisions  of  such  article and such sections, in
    6  respect to the imposition, exemption, assessment, payment, payment over,
    7  determination, collection, and credit or refund  of  tax,  interest  and
    8  penalty imposed thereunder, the filing of forms and returns, the preser-
    9  vation  of records for the purposes of such tax, the secrecy of returns,
   10  the disposition of revenues, and the civil and criminal penalties appli-
   11  cable to the violation of the provisions of such  article  32  and  such
   12  sections  180  and  181,  shall  continue  in full force and effect with
   13  respect to all such tax accrued for taxable years beginning before Janu-
   14  ary 1, 2015;  and  all  actions  and  proceedings,  civil  or  criminal,
   15  commenced  or  authorized  to  be  commenced  under  or by virtue of any
   16  provision of such article 32 or by  virtue  of  any  provision  of  such
   17  section  180  or  181  so  repealed, and pending or able to be commenced
   18  immediately prior to the taking effect of such repeal, may be commenced,
   19  prosecuted and defended to final effect in the same manner as they might
   20  if such provisions were not so repealed.
   21    S 100. Subdivision 1 of section 187 of the  tax  law,  as  amended  by
   22  chapter 2 of the laws of 1995, is amended to read as follows:
   23    1.  A  taxpayer  shall be allowed a credit, to be credited against the
   24  taxes imposed by this article, other than the taxes and fees imposed  by
   25  sections  [one  hundred  eighty,  one  hundred  eighty-one,] one hundred
   26  eighty-six-a and one hundred eighty-six-e of this chapter. The amount of
   27  the credit shall be  the  amount  of  the  special  additional  mortgage
   28  recording  tax paid by the taxpayer pursuant to the provisions of subdi-
   29  vision one-a of section two hundred fifty-three of this chapter on mort-
   30  gages recorded on and after January  first,  nineteen  hundred  seventy-
   31  nine.  Provided,  however,  that  the  amount  of  such credit allowable
   32  against the tax imposed by section one hundred eighty-four of this chap-
   33  ter shall be the excess of the amount of such special  additional  mort-
   34  gage  recording  tax  paid over the amount of any credit allowed by this
   35  section against the tax imposed by section one hundred  eighty-three  of
   36  this chapter. Provided further, however, no credit shall be allowed with
   37  respect  to  a  mortgage  of real property principally improved or to be
   38  improved by one or more structures containing in the aggregate not  more
   39  than  six  residential dwelling units, each dwelling unit having its own
   40  separate cooking facilities, where the real property is located  in  one
   41  or more of the counties comprising the metropolitan commuter transporta-
   42  tion  district and where the mortgage is recorded on or after May first,
   43  nineteen hundred eighty-seven.  Provided  further,  however,  no  credit
   44  shall be allowed with respect to a mortgage of real property principally
   45  improved  or  to be improved by one or more structures containing in the
   46  aggregate not more than six residential dwelling  units,  each  dwelling
   47  unit having its own separate cooking facilities, where the real property
   48  is  located  in the county of Erie and where the mortgage is recorded on
   49  or after May first, nineteen hundred eighty-seven.
   50    S 101. Subdivision 1 of section 187-a of the  tax  law,  as  added  by
   51  chapter 142 of the laws of 1997, is amended to read as follows:
   52    1.    Allowance of credit. A taxpayer shall be allowed a credit, to be
   53  computed as hereinafter provided, against  the  taxes  imposed  by  this
   54  article,  other  than the taxes imposed by sections [one hundred eighty,
   55  one hundred eighty-one,] one hundred eighty-six-a, one  hundred  eighty-
   56  six-e  and one hundred eighty-nine of this article, for employing within
       S. 6359--D                         165                        A. 8559--D

    1  the state a qualified employee. Provided, however, the amount of  credit
    2  allowed  by  this section against the tax imposed by section one hundred
    3  eighty-four of this article shall be the excess of the  credit  computed
    4  under  this  section  over  the amount of credit allowed by this section
    5  against the tax imposed by section  one  hundred  eighty-three  of  this
    6  article.
    7    S  102.  Subdivision  1  of  section 190 of the tax law, as amended by
    8  section 17 of part B of chapter 58 of the laws of 2004,  is  amended  to
    9  read as follows:
   10    1.  General.  A  taxpayer  shall  be  allowed a credit against the tax
   11  imposed by this article[, other than  the  taxes  and  fees  imposed  by
   12  sections one hundred eighty and one hundred eighty-one of this article,]
   13  equal  to twenty percent of the premium paid during the taxable year for
   14  long-term care insurance. In order  to  qualify  for  such  credit,  the
   15  taxpayer's premium payment must be for the purchase of or for continuing
   16  coverage under a long-term care insurance policy that qualifies for such
   17  credit  pursuant  to  section  one thousand one hundred seventeen of the
   18  insurance law.
   19    S 103. Subdivision 5 of section 192 of the tax law is REPEALED.
   20    S 104. Clauses 1 and 2 of subparagraph (A)  and  subparagraph  (B)  of
   21  paragraph (iii) of subdivision 9 of section 16-v of section 1 of chapter
   22  174  of  the laws of 1968 constituting the urban development corporation
   23  act, as added by section 1 of part C of chapter 59 of the laws of  2013,
   24  is amended to read as follows:
   25    (1)  over fifty percent of the number of shares of stock entitling the
   26  holders thereof to vote for the election of  directors  or  trustees  is
   27  owned  or  controlled,  either  directly  or  indirectly,  by a taxpayer
   28  subject to tax under the following provisions of the  tax  law:  article
   29  nine-A; section one hundred eighty-three, OR one hundred eighty-four [or
   30  one  hundred eighty-five] of article nine; [article thirty-two] or arti-
   31  cle thirty-three; or
   32    (2) is substantially similar in operation and in ownership to a  busi-
   33  ness  entity  (or  entities)  taxable  or  previously  taxable under the
   34  following provisions of the tax law: article nine-A; section one hundred
   35  eighty-three, one hundred eighty-four, FORMER SECTION one hundred eight-
   36  y-five or former section one hundred eighty-six of article nine;  FORMER
   37  article thirty-two; article thirty-three; article twenty-three, or would
   38  have  been subject to tax under such article twenty-three (as such arti-
   39  cle was in effect on January first,  nineteen  hundred  eighty)  or  the
   40  income  (or  losses) of which is (or was) includable under article twen-
   41  ty-two; or
   42    (B) a sole proprietorship, partnership, limited  partnership,  limited
   43  liability  company,  or  New  York  subchapter S corporation that is not
   44  substantially similar in operation and in ownership to a business entity
   45  (or entities) taxable, or previously taxable, under  article  nine-A  of
   46  the  tax law, section one hundred eighty-three, one hundred eighty-four,
   47  FORMER SECTION one hundred eighty-five or  former  section  one  hundred
   48  eighty-six  of article nine of the tax law, FORMER article thirty-two or
   49  ARTICLE thirty-three of the tax law, article twenty-three of the tax law
   50  or which would have been subject to tax under such article  twenty-three
   51  (as  such  article  was  in  effect  on  January first, nineteen hundred
   52  eighty) or the income (or losses) of which is (or was) includable  under
   53  article twenty-two of the tax law; and
   54    S  105. Section 206 of the tax law, as added by chapter 69 of the laws
   55  of 1978, is amended to read as follows:
       S. 6359--D                         166                        A. 8559--D

    1    S 206.   Deposit and disposition of  revenue.    The  [license  fees,]
    2  taxes,  percentage,  interest  and other charges imposed by this article
    3  shall be collected and deposited and receipts  therefor  issued  by  the
    4  [tax  commission,  except  that  such  license  fees, taxes, percentage,
    5  interest and other charges imposed by section one hundred eighty of this
    6  chapter shall be collected and deposited and receipts therefor issued by
    7  the  proper  state officer in accordance with the provisions of subdivi-
    8  sion two of section one hundred eighty of  this  chapter,]  COMMISSIONER
    9  and  all  revenues  so  collected  or  received  shall  be deposited and
   10  disposed of pursuant to the provisions of section one  hundred  seventy-
   11  one-a of this chapter.
   12    S  106.  Subsection  (a)  of  section 1080 of the tax law, as added by
   13  chapter 188 of the laws of 1964, is amended to read as follows:
   14    (a) General.--- The provisions of this  article  shall  apply  to  the
   15  administration  of  and the procedures with respect to the taxes imposed
   16  by articles nine [(except section one  hundred  eighty)],  AND  nine-a[,
   17  nine-b  and  nine-c] of this chapter for taxable years or periods ending
   18  on or after December thirty-first, nineteen hundred sixty-four.
   19    S 107. Subdivisions (a) and (c) of section 1809 of  the  tax  law,  as
   20  added  by  section 1 of subpart A of part S of chapter 57 of the laws of
   21  2010, are amended to read as follows:
   22    (a) Any person who, with intent to evade payment of  any  tax  imposed
   23  under  article nine [(other than under section one hundred eighty or one
   24  hundred eighty-one)], nine-A, thirteen,  [thirty-two,]  thirty-three  or
   25  thirty-three-A  of  this  chapter,  fails to file a return or report for
   26  three consecutive taxable years shall be guilty of  a  class  E  felony,
   27  provided  that such person had an unpaid tax liability, in excess of the
   28  threshold amount with respect to each of the three  consecutive  taxable
   29  years.  The threshold amount in the case of a taxable year under article
   30  nine-A of this chapter ending after  June  thirtieth,  nineteen  hundred
   31  eighty-nine  is  the  applicable  fixed  dollar minimum prescribed under
   32  paragraph (d) of subdivision one of section  two  hundred  ten  of  this
   33  chapter. In the event such fixed dollar minimum is less than two hundred
   34  fifty  dollars, the threshold amount in the case of such taxable year is
   35  two hundred fifty dollars. In all other cases the  threshold  amount  is
   36  two hundred fifty dollars.
   37    (c)  As  used  in  this section, the terms "return" and "report" shall
   38  mean a return or report required under section one  hundred  ninety-two,
   39  two  hundred  eleven,  two hundred ninety-four, [fourteen hundred sixty-
   40  two,] fifteen hundred fifteen or  fifteen  hundred  fifty-four  of  this
   41  chapter.    It  shall  not  include  any return or report referred to in
   42  section one hundred ninety-seven-a, two  hundred  thirteen-a,  [fourteen
   43  hundred sixty] or fifteen hundred thirteen of this chapter.
   44    S  108.  Paragraphs (d), (e), (g), (h) and (q) of section 104-A of the
   45  business corporation law, subdivisions (d), (e) and (q)  as  amended  by
   46  chapter 166 of the laws of 1991, subdivision (g) as added by chapter 591
   47  of  the  laws  of 1982, and subdivision (h) as amended by chapter 117 of
   48  the laws of 1986, are amended to read as follows:
   49    (d) For filing a certificate of incorporation pursuant to section four
   50  hundred two of this chapter, one hundred twenty-five dollars  [plus  the
   51  tax on shares prescribed by section one hundred eighty of the tax law].
   52    (e)  For  filing  a certificate of amendment pursuant to section eight
   53  hundred five of this chapter, sixty dollars  [plus  the  tax  on  shares
   54  prescribed  by section one hundred eighty of the tax law if such certif-
   55  icate shows a change of shares].
       S. 6359--D                         167                        A. 8559--D

    1    (g) For filing a restated certificate  of  incorporation  pursuant  to
    2  section eight hundred seven of this chapter, sixty dollars [plus the tax
    3  on  shares  prescribed  by  section one hundred eighty of the tax law if
    4  such certificate shows a change of shares].
    5    (h)  For  filing  a certificate of merger or consolidation pursuant to
    6  section nine hundred four of this chapter, or a certificate of  exchange
    7  pursuant  to  section nine hundred thirteen (other than paragraph (g) of
    8  section nine hundred thirteen) of this chapter, sixty dollars [plus  the
    9  tax on shares prescribed by section one hundred eighty of the tax law if
   10  such certificate shows a change of shares].
   11    (q)  For  filing  a  certificate  of  incorporation  by a professional
   12  service corporation pursuant to section fifteen hundred  three  of  this
   13  chapter,  one  hundred  twenty-five  dollars  [plus  the  tax  on shares
   14  prescribed by section one hundred eighty of the tax law].
   15    S 109. Subdivision 8 of section 7-a of the general  associations  law,
   16  as  added  by  chapter  575  of  the laws of 1964, is amended to read as
   17  follows:
   18    8. The provisions of section ninety-six of the executive law prescrib-
   19  ing the fee to be collected by the department  of  state  for  filing  a
   20  certificate  of  incorporation  under the business corporation law shall
   21  apply to the certificate of incorporation to be filed pursuant  to  this
   22  section[,  and  the  organization  tax payable under section one hundred
   23  eighty of the tax law in respect of a corporation formed under the busi-
   24  ness corporation law shall be paid before the department of state  shall
   25  file such certificate of incorporation].
   26    S  110. Paragraphs 1 and 2 of subdivision (l) of section 11-640 of the
   27  administrative code of the city of New York, as amended by section 3  of
   28  part R of chapter 59 of the laws of 2012, is amended to read as follows:
   29    (1) Notwithstanding anything to the contrary contained in this section
   30  other  than  subdivision  (m) of this section, a corporation that was in
   31  existence before January first, two thousand [twelve] FOURTEEN  and  was
   32  subject to tax under subchapter two of this chapter for its last taxable
   33  year  beginning  before  January  first, two thousand [twelve] FOURTEEN,
   34  shall continue to be taxable under such subchapter for all taxable years
   35  beginning on or after January first, two thousand [twelve] FOURTEEN  and
   36  before  January  first, two thousand [fifteen] SEVENTEEN.  The preceding
   37  sentence shall not apply to any taxable year during  which  such  corpo-
   38  ration  is  a  banking  corporation  described in paragraphs one through
   39  eight of subdivision (a) of this section.   Notwithstanding anything  to
   40  the  contrary  contained  in  this section other than subdivision (m) of
   41  this section, a banking corporation or corporation that was in existence
   42  before January first, two thousand [twelve] FOURTEEN and was subject  to
   43  tax  under  this  subchapter  for its last taxable year beginning before
   44  January first, two thousand [twelve]  FOURTEEN,  shall  continue  to  be
   45  taxable  under  this  subchapter  for  all taxable years beginning on or
   46  after January first, two thousand [twelve] FOURTEEN and  before  January
   47  first,  two  thousand  [fifteen]  SEVENTEEN only if the corporation is a
   48  banking corporation as defined in subdivision (a) of this section or the
   49  corporation satisfies the requirements for a corporation to elect to  be
   50  taxable  under  this  subchapter. Provided further, that nothing in this
   51  subdivision shall prohibit a corporation that elected pursuant to subdi-
   52  vision (d) of this section to be taxable under subchapter  two  of  this
   53  chapter  from  revoking that election in accordance with subdivision (d)
   54  of this section. For purposes of this paragraph, a corporation shall  be
   55  considered to be subject to tax under subchapter two of this chapter for
   56  a  taxable  year if such corporation was not a taxpayer but was properly
       S. 6359--D                         168                        A. 8559--D

    1  included in a combined report filed  pursuant  to  subdivision  four  of
    2  section  11-605  of this chapter for such taxable year and a corporation
    3  shall be considered to be subject to tax under  this  subchapter  for  a
    4  taxable  year  if  such  corporation was not a taxpayer but was properly
    5  included in a combined report filed pursuant to subdivision (f)  or  (g)
    6  of section 11-646 of this part for such taxable year. A corporation that
    7  was  in  existence  before January first, two thousand [twelve] FOURTEEN
    8  but first becomes a taxpayer in a taxable year  beginning  on  or  after
    9  January  first, two thousand [twelve] FOURTEEN and before January first,
   10  two thousand [fifteen] SEVENTEEN, shall be considered  for  purposes  of
   11  this  paragraph to have been subject to tax under subchapter two of this
   12  chapter for its last taxable year beginning before  January  first,  two
   13  thousand  [twelve]  FOURTEEN if such corporation would have been subject
   14  to tax under such subchapter for such taxable year  if  it  had  been  a
   15  taxpayer  during  such taxable year. A corporation that was in existence
   16  before January first, two thousand [twelve] FOURTEEN but first becomes a
   17  taxpayer in a taxable year beginning on  or  after  January  first,  two
   18  thousand  [twelve]  FOURTEEN  and  before  January  first,  two thousand
   19  [fifteen] SEVENTEEN, shall be considered for purposes of this  paragraph
   20  to  have  been subject to tax under this subchapter for its last taxable
   21  year beginning before January first, two thousand [twelve]  FOURTEEN  if
   22  such  corporation  would  have been subject to tax under this subchapter
   23  for such taxable year if it had been  a  taxpayer  during  such  taxable
   24  year.
   25    (2) Notwithstanding anything to the contrary contained in this section
   26  other  than  subdivision (m) of this section, a corporation formed on or
   27  after January first, two thousand [twelve] FOURTEEN and  before  January
   28  first,  two  thousand [fifteen] SEVENTEEN may elect to be subject to tax
   29  under this subchapter or under subchapter two of this  chapter  for  its
   30  first  taxable  year  beginning  on or after January first, two thousand
   31  [twelve] FOURTEEN and  before  January  first,  two  thousand  [fifteen]
   32  SEVENTEEN  in  which either (i) sixty-five percent or more of its voting
   33  stock is owned or controlled, directly  or  indirectly  by  a  financial
   34  holding company, provided the corporation whose voting stock is so owned
   35  or controlled is principally engaged in activities that are described in
   36  section  4(k)(4)  or  4(k)(5) of the federal bank holding company act of
   37  nineteen hundred fifty-six, as amended and the  regulations  promulgated
   38  pursuant  to  the  authority  of  such section or (ii) it is a financial
   39  subsidiary. An election under this paragraph may not be made by a corpo-
   40  ration described in paragraphs one through eight of subdivision  (a)  of
   41  this  section  or  in  subdivision  (e) of this section. In addition, an
   42  election under this paragraph may not be made by a corporation that is a
   43  party to a reorganization, as defined in subsection (a) of  section  368
   44  of  the  internal  revenue  code  of  1986, as amended, of a corporation
   45  described in paragraph one of this subdivision if both corporations were
   46  sixty-five percent or more owned or controlled, directly  or  indirectly
   47  by the same interests at the time of the reorganization.
   48    An  election  under  this paragraph must be made by the taxpayer on or
   49  before the due date for filing its return  (determined  with  regard  to
   50  extensions  of  time  for  filing)  for the applicable taxable year. The
   51  election to be taxed under subchapter two of this chapter shall be  made
   52  by  the  taxpayer  by filing the return required pursuant to subdivision
   53  one of section 11-605 of this chapter and the election to be taxed under
   54  this subchapter shall be made by  the  taxpayer  by  filing  the  return
   55  required pursuant to subdivision (a) of section 11-646 of this part. Any
   56  election  made pursuant to this paragraph shall be irrevocable and shall
       S. 6359--D                         169                        A. 8559--D

    1  apply to each subsequent taxable year  beginning  on  or  after  January
    2  first,  two  thousand  [twelve]  FOURTEEN  and before January first, two
    3  thousand [fifteen] SEVENTEEN, provided  that  the  stock  ownership  and
    4  activities  requirements described in subparagraph (i) of this paragraph
    5  are met or such corporation described in subparagraph (ii) of this para-
    6  graph continues as a financial subsidiary.
    7    S 111. Subparagraph (iv) of paragraph 2 of subdivision (f) of  section
    8  11-646 of the administrative code of the city of New York, as amended by
    9  section  4  of  part  R of chapter 59 of the laws of 2012, is amended to
   10  read as follows:
   11    (iv) (A) Notwithstanding any provision of  this  paragraph,  any  bank
   12  holding  company exercising its corporate franchise or doing business in
   13  the city may make a return on  a  combined  basis  without  seeking  the
   14  permission  of  the commissioner with any banking corporation exercising
   15  its corporate franchise or doing business in the city in a corporate  or
   16  organized  capacity  sixty-five percent or more of whose voting stock is
   17  owned or controlled, directly or indirectly, by such bank holding compa-
   18  ny, for the first taxable year beginning on or after January first,  two
   19  thousand  and  before  January  first,  two thousand [fifteen] SEVENTEEN
   20  during which such bank holding company  registers  for  the  first  time
   21  under  the federal bank holding company act, as amended, and also elects
   22  to be a financial holding company.  In  addition,  for  each  subsequent
   23  taxable  year  beginning  after  January  first, two thousand and before
   24  January first, two thousand [fifteen] SEVENTEEN, any such  bank  holding
   25  company  may  file on a combined basis without seeking the permission of
   26  the commissioner with any banking corporation  that  is  exercising  its
   27  corporate franchise or doing business in the city and sixty-five percent
   28  or  more of whose voting stock is owned or controlled, directly or indi-
   29  rectly, by such bank holding company if either such banking  corporation
   30  is exercising its corporate franchise or doing business in the city in a
   31  corporate  or  organized  capacity for the first time during such subse-
   32  quent taxable year, or sixty-five percent or more of the voting stock of
   33  such banking corporation is owned or controlled, directly or indirectly,
   34  by such bank holding company for the first time during  such  subsequent
   35  taxable year.  Provided however, for each subsequent taxable year begin-
   36  ning  after  January  first,  two thousand and before January first, two
   37  thousand [fifteen] SEVENTEEN, a banking corporation described in  either
   38  of  the two preceding sentences which filed on a combined basis with any
   39  such bank holding company in a previous taxable year, must  continue  to
   40  file  on a combined basis with such bank holding company if such banking
   41  corporation, during such subsequent taxable year, continues to  exercise
   42  its  corporate  franchise  or  do business in the city in a corporate or
   43  organized capacity and sixty-five percent or more of such banking corpo-
   44  ration's voting stock continues to be owned or controlled,  directly  or
   45  indirectly,  by  such bank holding company, unless the permission of the
   46  commissioner has been obtained to file on  a  separate  basis  for  such
   47  subsequent  taxable year. Provided further, however, for each subsequent
   48  taxable year beginning after January  first,  two  thousand  and  before
   49  January  first,  two thousand [fifteen] SEVENTEEN, a banking corporation
   50  described in either of the first two sentences of this clause which  did
   51  not  file  on  a  combined basis with any such bank holding company in a
   52  previous taxable year, may not file on a combined basis with  such  bank
   53  holding  company  during  any  such  subsequent  taxable year unless the
   54  permission of the commissioner has been obtained to file on  a  combined
   55  basis for such subsequent taxable year.
       S. 6359--D                         170                        A. 8559--D

    1    (B)  Notwithstanding any provision of this paragraph other than clause
    2  (A) of this subparagraph, the commissioner may not require a bank  hold-
    3  ing  company  which, during a taxable year beginning on or after January
    4  first, two thousand and before January  first,  two  thousand  [fifteen]
    5  SEVENTEEN,  registers  for the first time during such taxable year under
    6  the federal bank holding company act, as amended, and also elects to  be
    7  a  financial  holding  company, to make a return on a combined basis for
    8  any taxable year beginning on or after January first, two  thousand  and
    9  before  January  first,  two thousand [fifteen] SEVENTEEN with a banking
   10  corporation sixty-five percent or more of whose voting stock is owned or
   11  controlled, directly or indirectly, by such bank holding company.
   12    S 112. Severability. If any provision of this act shall for any reason
   13  be finally adjudged by any court of competent jurisdiction to be  inval-
   14  id,  such judgment shall not affect, impair, or invalidate the remainder
   15  of this act, but shall be confined in its  operation  to  the  provision
   16  directly  involved  in the controversy in which such judgment shall have
   17  been rendered. It is hereby declared to be in the intent of the legisla-
   18  ture that this  act  would  have  been  enacted  even  if  such  invalid
   19  provision  had  not  been  included  in this act. Provided further, if a
   20  court of final, competent jurisdiction adjudges the tax rates imposed on
   21  qualified New York manufacturers  to  be  invalid,  qualified  New  York
   22  manufacturers  shall  be  subject  to  the  same  tax rates as all other
   23  taxpayers subject to tax under article 9-A  of  the  tax  law.  Provided
   24  further,  if  a  court of final, competent jurisdiction adjudges the tax
   25  rate of the metropolitan transportation business tax  surcharge  imposed
   26  under  section  209-B  of  the  tax  law to be invalid, the rate of such
   27  surcharge shall be twenty-seven and one tenth percent. Provided further,
   28  if a court of final, competent jurisdiction adjudges that any of the tax
   29  credits provided by this act to be invalid, such credit or credits shall
   30  be deemed repealed and shall be of no force and effect as to any taxpay-
   31  ers.
   32    S 113. This act shall take effect January 1, 2015 and shall  apply  to
   33  taxable years commencing on or after such date; provided that the amend-
   34  ments  to  section 25 of the tax law made by section forty-three of this
   35  act shall not affect the repeal of such  section  and  shall  be  deemed
   36  repealed  therewith; provided, further, that the amendments to the open-
   37  ing paragraph of subdivision (a), subparagraph (C)  of  paragraph  2  of
   38  subdivision (e) and subdivision (f) of section 35 of the tax law made by
   39  section fifty of this act shall not affect the repeal of such provisions
   40  and  shall  be  deemed  repealed  therewith; provided, further, that the
   41  amendments to clause (xxxii) of  subparagraph  (B)  of  paragraph  1  of
   42  subsection (i) of section 606 of the tax law made by section sixty-eight
   43  of  this  act  shall  not  affect the repeal of such clause and shall be
   44  deemed repealed therewith; provided, further,  that  the  amendments  to
   45  clause  (xxxiii) of subparagraph (B) of paragraph 1 of subsection (i) of
   46  section 606 of the tax law made by section sixty-eight of this act shall
   47  not affect the repeal of such clause and shall be deemed repealed there-
   48  with; and provided, further, that  the  amendments  to  clause  (ii)  of
   49  subparagraph  (B)  of  paragraph  2  of  subsection  (q), paragraph 3 of
   50  subsection (s) and the closing paragraph of paragraph  1  of  subsection
   51  (t)  of  section  1085 of the tax law made by section eighty-one of this
   52  act shall not affect the repeal of such provisions and shall  be  deemed
   53  repealed therewith.

   54                                   PART B
       S. 6359--D                         171                        A. 8559--D

    1    Section  1.  Subparagraph  (iii) of paragraph (a) of subdivision 14 of
    2  section 425 of the real property tax law, as added by section 1 of  part
    3  J of chapter 57 of the laws of 2013, is amended to read as follows:
    4    (iii)  An  owner who fails to register by the registration deadline so
    5  established shall be permitted to file a petition with the  commissioner
    6  requesting  that  the commissioner excuse such failure and accept a late
    7  registration, provided that such petition shall explain why such failure
    8  occurred and shall be filed no later than one year after such  deadline,
    9  AND  PROVIDED  FURTHER THAT IF THE COMMISSIONER ACCEPTS A LATE REGISTRA-
   10  TION AFTER HAVING DIRECTED THE REMOVAL OF THE BASIC STAR EXEMPTION  FROM
   11  THE PROPERTY TO WHICH THE REGISTRATION PERTAINS, THEN IN LIEU OF DIRECT-
   12  ING  THE EXEMPTION TO BE RESTORED, THE COMMISSIONER IS AUTHORIZED IN HIS
   13  OR HER DISCRETION TO REMIT DIRECTLY TO THE PROPERTY OWNER OR OWNERS  THE
   14  TAX  SAVINGS  THAT  THE  EXEMPTION  WOULD  HAVE  YIELDED HAD IT NOT BEEN
   15  REMOVED, AND TO FURTHER DIRECT THE ASSESSOR TO RESTORE THE EXEMPTION  ON
   16  A  PROSPECTIVE  BASIS  WITHOUT A NEW APPLICATION UNLESS THE ASSESSOR HAS
   17  REASON TO BELIEVE THAT THE PROPERTY OWNER  IS  NO  LONGER  ELIGIBLE  FOR
   18  REASONS OTHER THAN A FAILURE TO REGISTER;
   19    S  2.  This  act  shall take effect immediately and shall be deemed to
   20  have been in full force and effect on and after April 1, 2014.

   21                                   PART C

   22    Section 1. Section 2 of chapter 540 of the laws of 1992, amending  the
   23  real  property  tax  law  relating to oil and gas charges, as amended by
   24  section 1 of part A of chapter 59 of the laws of  2012,  is  amended  to
   25  read as follows:
   26    S  2.  This  act  shall take effect immediately and shall be deemed to
   27  have been in full force and effect on and after April 1, 1992; provided,
   28  however that any charges imposed by section 593 of the real property tax
   29  law as added by section one of this act shall first be  due  for  values
   30  for assessment rolls with tentative completion dates after July 1, 1992,
   31  and  provided  further,  that  this  act  shall remain in full force and
   32  effect until March 31, [2015] 2018, at which time  section  593  of  the
   33  real  property  tax  law  as  added  by section one of this act shall be
   34  repealed.
   35    S 2. This act shall take effect immediately.

   36                                   PART D

   37                            Intentionally Omitted

   38                                   PART E

   39    Section 1. Subsection (a) of section 653 of the tax law, as amended by
   40  chapter 65 of the laws of 1985, is amended to read as follows:
   41    (a) General. (1) Any return, statement or other document  required  to
   42  be  made  pursuant  to  this  article shall be signed in accordance with
   43  regulations or instructions prescribed by the [tax  commission]  COMMIS-
   44  SIONER.    The  fact  that  an  individual's name is signed to a return,
   45  statement, or other document, shall be  prima  facie  evidence  for  all
   46  purposes  that  the  return,  statement  or  other document was actually
   47  signed by him OR HER.
   48    (2) IN THE CASE  OF  AN  ELECTRONICALLY  FILED  INDIVIDUAL'S  PERSONAL
   49  INCOME  TAX  RETURN PREPARED BY A TAX PREPARER, AN AUTHORIZATION TO FILE
       S. 6359--D                         172                        A. 8559--D

    1  ANY RETURN, STATEMENT OR OTHER DOCUMENT REQUIRED TO BE MADE PURSUANT  TO
    2  THIS  ARTICLE  SIGNED BY THE TAXPAYER IN ACCORDANCE WITH THE REGULATIONS
    3  OR INSTRUCTIONS PRESCRIBED BY THE COMMISSIONER  AND  RECEIVED  ELECTRON-
    4  ICALLY  BY  THE  TAX  PREPARER  SHALL SATISFY THE SIGNATURE REQUIREMENTS
    5  UNDER THIS ARTICLE.
    6    S 2. This act shall take effect immediately and shall apply to returns
    7  filed for taxable years beginning on or after January 1, 2014.

    8                                   PART F

    9                            Intentionally Omitted

   10                                   PART G

   11    Section 1. Section 2 of part I of chapter 58  of  the  laws  of  2006,
   12  relating  to  providing an enhanced earned income tax credit, as amended
   13  by section 1 of part L of chapter 59 of the laws of 2012, is amended  to
   14  read as follows:
   15    S 2. This act shall take effect immediately and shall apply to taxable
   16  years beginning on or after January 1, 2006 and before January 1, [2015]
   17  2017.
   18    S 2. This act shall take effect immediately.

   19                                   PART H

   20                            Intentionally Omitted

   21                                   PART I

   22    Section  1. Subsection (b) of section 612 of the tax law is amended by
   23  adding a new paragraph 40 to read as follows:
   24    (40) IN THE CASE OF A BENEFICIARY OF A TRUST THAT,  IN  ANY  TAX  YEAR
   25  AFTER  ITS CREATION INCLUDING ITS FIRST TAX YEAR, WAS NOT SUBJECT TO TAX
   26  PURSUANT TO SUBPARAGRAPH (D) OF PARAGRAPH THREE  OF  SUBSECTION  (B)  OF
   27  SECTION  SIX HUNDRED FIVE OF THIS ARTICLE (EXCEPT FOR AN INCOMPLETE GIFT
   28  NON-GRANTOR  TRUST,  AS  DEFINED  BY   PARAGRAPH   FORTY-ONE   OF   THIS
   29  SUBSECTION),  THE  AMOUNT DESCRIBED IN THE FIRST SENTENCE OF SECTION SIX
   30  HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE CODE FOR THE TAX YEAR TO THE
   31  EXTENT NOT ALREADY INCLUDED IN FEDERAL GROSS INCOME FOR  THE  TAX  YEAR,
   32  EXCEPT  THAT,  IN COMPUTING THE AMOUNT TO BE ADDED UNDER THIS PARAGRAPH,
   33  SUCH BENEFICIARY SHALL DISREGARD  (I)  SUBSECTION  (C)  OF  SECTION  SIX
   34  HUNDRED  SIXTY-FIVE OF THE INTERNAL REVENUE CODE; (II) THE INCOME EARNED
   35  BY SUCH TRUST IN ANY TAX YEAR IN WHICH THE  TRUST  WAS  SUBJECT  TO  TAX
   36  UNDER THIS ARTICLE; AND (III) THE INCOME EARNED BY SUCH TRUST IN A TAXA-
   37  BLE  YEAR  PRIOR  TO WHEN THE BENEFICIARY FIRST BECAME A RESIDENT OF THE
   38  STATE OR IN ANY TAXABLE YEAR STARTING BEFORE JANUARY FIRST, TWO THOUSAND
   39  FOURTEEN.  EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH,  ALL  OF  THE
   40  PROVISIONS  OF  THE INTERNAL REVENUE CODE THAT ARE RELEVANT TO COMPUTING
   41  THE AMOUNT DESCRIBED IN THE FIRST SENTENCE OF SUBSECTION (A) OF  SECTION
   42  SIX  HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE CODE SHALL APPLY TO THE
   43  PROVISIONS OF THIS PARAGRAPH WITH THE SAME FORCE AND EFFECT  AS  IF  THE
   44  LANGUAGE OF THOSE INTERNAL REVENUE CODE PROVISIONS HAD BEEN INCORPORATED
   45  IN  FULL  INTO  THIS  PARAGRAPH,  EXCEPT  TO  THE  EXTENT  THAT ANY SUCH
   46  PROVISION IS EITHER INCONSISTENT WITH OR NOT RELEVANT TO THIS PARAGRAPH.
       S. 6359--D                         173                        A. 8559--D

    1    S 2. Subsection (b) of section 612 of the tax law is amended by adding
    2  a new paragraph 41 to read as follows:
    3    (41)  IN  THE CASE OF A TAXPAYER WHO TRANSFERRED PROPERTY TO AN INCOM-
    4  PLETE GIFT  NON-GRANTOR  TRUST,  THE  INCOME  OF  THE  TRUST,  LESS  ANY
    5  DEDUCTIONS  OF  THE  TRUST,  TO THE EXTENT SUCH INCOME AND DEDUCTIONS OF
    6  SUCH TRUST WOULD BE TAKEN  INTO  ACCOUNT  IN  COMPUTING  THE  TAXPAYER'S
    7  FEDERAL  TAXABLE  INCOME IF SUCH TRUST IN ITS ENTIRETY WERE TREATED AS A
    8  GRANTOR TRUST FOR FEDERAL TAX PURPOSES. FOR PURPOSES OF THIS  PARAGRAPH,
    9  AN "INCOMPLETE GIFT NON-GRANTOR TRUST" MEANS A RESIDENT TRUST THAT MEETS
   10  THE  FOLLOWING  CONDITIONS:  (I) THE TRUST DOES NOT QUALIFY AS A GRANTOR
   11  TRUST UNDER SECTION SIX HUNDRED SEVENTY-ONE THROUGH SIX  HUNDRED  SEVEN-
   12  TY-NINE  OF THE INTERNAL REVENUE CODE, AND (2) THE GRANTOR'S TRANSFER OF
   13  ASSETS TO THE TRUST IS TREATED AS AN INCOMPLETE GIFT UNDER SECTION TWEN-
   14  TY-FIVE HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE, AND THE REGULATIONS
   15  THEREUNDER.
   16    S 3. Section 621 of the tax law, as added by chapter 272 of  the  laws
   17  of  1963  and  subsection  (a)  as amended by chapter 267 of the laws of
   18  1987, is amended to read as follows:
   19    S 621. [Credit] CREDITS to trust  beneficiary  receiving  accumulation
   20  distribution.   (a) General. A resident beneficiary of a trust whose New
   21  York adjusted gross income includes  all  or  part  of  an  accumulation
   22  distribution by such trust, as defined in section six hundred sixty-five
   23  of the internal revenue code, INCLUDING A BENEFICIARY WHO IS REQUIRED TO
   24  MAKE  THE  MODIFICATION REQUIRED BY PARAGRAPH FORTY OF SUBSECTION (B) OF
   25  SECTION SIX HUNDRED TWELVE OF THIS PART, shall be allowed (1)  a  credit
   26  against  the  tax  otherwise due under this article for all or a propor-
   27  tionate part of any tax paid by the trust under this  article  or  under
   28  FORMER article sixteen of this chapter (as such article was in effect on
   29  or before December thirtieth, nineteen hundred sixty), for any preceding
   30  taxable  year which would not have been payable if the trust had in fact
   31  made distributions to its beneficiaries at the times and in the  amounts
   32  specified in section six hundred sixty-six of the internal revenue code;
   33  AND (2) A CREDIT AGAINST THE TAXES IMPOSED BY THIS ARTICLE FOR THE TAXA-
   34  BLE YEAR FOR ANY INCOME TAX IMPOSED ON THE TRUST FOR THE TAXABLE YEAR OR
   35  ANY  PRIOR  TAXABLE  YEAR BY ANOTHER STATE OF THE UNITED STATES, A POLI-
   36  TICAL SUBDIVISION THEREOF, OR THE DISTRICT OF COLUMBIA, UPON INCOME BOTH
   37  DERIVED THEREFROM AND SUBJECT TO TAX UNDER THIS ARTICLE,  PROVIDED  THAT
   38  THE  AMOUNT  OF  THE  CREDIT  SHALL NOT EXCEED THE PERCENTAGE OF THE TAX
   39  OTHERWISE DUE UNDER THIS ARTICLE DETERMINED BY DIVIDING THE  PORTION  OF
   40  THE  INCOME THAT IS BOTH TAXABLE TO THE TRUST IN SUCH OTHER JURISDICTION
   41  AND TAXABLE TO THE BENEFICIARY UNDER THIS ARTICLE BY THE TOTAL AMOUNT OF
   42  THE BENEFICIARY'S NEW YORK INCOME.
   43    (b) Limitation. The [credit] CREDITS  under  this  section  shall  not
   44  reduce  the tax otherwise due from the beneficiary under this article to
   45  an amount less than would have been due if the accumulation distribution
   46  or his part thereof were excluded  from  his  New  York  adjusted  gross
   47  income.
   48    S  4. Section 658 of the tax law is amended by adding a new subsection
   49  (f) to read as follows:
   50     (F) (1) EVERY TRUST DESCRIBED BY SUBPARAGRAPH (D) OF PARAGRAPH  THREE
   51  OF SUBSECTION (B) OF SECTION SIX HUNDRED FIVE OF THIS ARTICLE SHALL MAKE
   52  A RETURN FOR ANY TAXABLE YEAR IN WHICH IT MAKES AN ACCUMULATION DISTRIB-
   53  UTION  WITHIN  THE  MEANING  OF  SUBDIVISION  (B) OF SECTION SIX HUNDRED
   54  SIXTY-FIVE OF THE INTERNAL REVENUE CODE TO A BENEFICIARY WHO IS A  RESI-
   55  DENT,  WHICH RETURN SHALL INCLUDE (I) INFORMATION IDENTIFYING SUCH RESI-
   56  DENT, (II) THE AMOUNT OF SUCH ACCUMULATION DISTRIBUTION, AND (III)  SUCH
       S. 6359--D                         174                        A. 8559--D

    1  OTHER  INFORMATION  AS  THE  COMMISSIONER  MAY REQUIRE.   IN DETERMINING
    2  WHETHER THERE HAS BEEN AN ACCUMULATION DISTRIBUTION FOR PURPOSES OF THIS
    3  PARAGRAPH, SUCH TRUST SHALL EXCLUDE DISTRIBUTIONS FROM INCOME EARNED  BY
    4  THE TRUST PRIOR TO THE BENEFICIARY'S BIRTH OR ATTAINING THE AGE OF TWEN-
    5  TY-ONE.
    6    (2)  EVERY  RESIDENT  TRUST  THAT DOES NOT FILE THE RETURN REQUIRED BY
    7  SECTION SIX HUNDRED FIFTY-ONE OF THIS PART ON THE GROUND THAT IT IS  NOT
    8  SUBJECT  TO  TAX  PURSUANT  TO  SUBPARAGRAPH  (D)  OF PARAGRAPH THREE OF
    9  SUBSECTION (B) OF SECTION SIX HUNDRED FIVE OF THIS ARTICLE FOR THE TAXA-
   10  BLE YEAR SHALL MAKE A RETURN FOR SUCH TAXABLE  YEAR  SUBSTANTIATING  ITS
   11  ENTITLEMENT  TO  THAT  EXEMPTION AND PROVIDING SUCH OTHER INFORMATION AS
   12  THE COMMISSIONER MAY REQUIRE.
   13    (3) THE RETURNS REQUIRED BY THIS  SUBSECTION  SHALL  BE  FILED  ON  OR
   14  BEFORE THE FIFTEENTH DAY OF THE FOURTH MONTH FOLLOWING THE CLOSE OF EACH
   15  TAXABLE  YEAR.  FOR  PURPOSES  OF THIS PARAGRAPH, "TAXABLE YEAR" MEANS A
   16  YEAR OR A PERIOD WHICH WOULD BE A TAXABLE YEAR OF THE TRUST IF  IT  WERE
   17  SUBJECT TO TAX UNDER THIS ARTICLE.
   18    S  5.  Paragraph 2 of subsection (h) of section 685 of the tax law, as
   19  amended by chapter 190 of the laws  of  1990,  is  amended  to  read  as
   20  follows:
   21    (2)  If any partnership [or], S corporation, OR TRUST required to file
   22  a return or report under subsection (c) OR SUBSECTION (F) of section six
   23  hundred fifty-eight or under section  six  hundred  fifty-nine  OF  THIS
   24  ARTICLE  for any taxable year fails to file such return or report at the
   25  time prescribed therefor (determined with regard  to  any  extension  of
   26  time  for  filing),  or files a return or report which fails to show the
   27  information required under such subsection (c) or  section  six  hundred
   28  fifty-nine  OF THIS ARTICLE, unless it is shown that such failure is due
   29  to reasonable cause and not due to willful neglect,  there  shall,  upon
   30  notice  and demand by the commissioner and in the same manner as tax, be
   31  paid by the partnership or S corporation a penalty for  each  month  (or
   32  fraction thereof) during which such failure continues (but not to exceed
   33  five months). The amount of such penalty for any month is the product of
   34  fifty  dollars,  multiplied by the number of partners in the partnership
   35  or shareholders in the S corporation during any part of the taxable year
   36  who were subject to tax under this article during any part of such taxa-
   37  ble year, EXCEPT THAT, IN THE CASE OF A  TRUST,  THE  PENALTY  SHALL  BE
   38  EQUAL  TO  ONE  HUNDRED FIFTY DOLLARS A MONTH UP TO A MAXIMUM OF FIFTEEN
   39  HUNDRED DOLLARS PER TAXABLE YEAR.
   40    S 6. Subdivision (b) of section 11-1712 of the administrative code  of
   41  the  city of New York is amended by adding a new paragraph 36 to read as
   42  follows:
   43    (36) IN THE CASE OF A BENEFICIARY OF A TRUST THAT,  IN  ANY  TAX  YEAR
   44  AFTER  ITS CREATION INCLUDING ITS FIRST TAX YEAR, WAS NOT SUBJECT TO TAX
   45  PURSUANT TO SUBPARAGRAPH (D) OF PARAGRAPH THREE  OF  SUBSECTION  (B)  OF
   46  SECTION 11-1705 OF THIS CHAPTER (EXCEPT FOR AN INCOMPLETE GIFT NON-GRAN-
   47  TOR  TRUST,  AS  DEFINED BY PARAGRAPH THIRTY-SEVEN OF THIS SUBDIVISION),
   48  THE AMOUNT DESCRIBED IN  THE  FIRST  SENTENCE  OF  SECTION  SIX  HUNDRED
   49  SIXTY-SEVEN  OF THE INTERNAL REVENUE CODE FOR THE TAX YEAR TO THE EXTENT
   50  NOT ALREADY INCLUDED IN FEDERAL GROSS INCOME FOR THE  TAX  YEAR,  EXCEPT
   51  THAT,  IN  COMPUTING  THE  AMOUNT TO BE ADDED UNDER THIS PARAGRAPH, SUCH
   52  BENEFICIARY SHALL DISREGARD (I) SUBSECTION (C) OF  SECTION  SIX  HUNDRED
   53  SIXTY-FIVE  OF THE INTERNAL REVENUE CODE; (II) THE INCOME EARNED BY SUCH
   54  TRUST IN ANY TAX YEAR IN WHICH THE TRUST WAS SUBJECT TO TAX  UNDER  THIS
   55  ARTICLE;  AND  (III)  THE  INCOME EARNED BY SUCH TRUST IN A TAXABLE YEAR
   56  PRIOR TO WHEN THE BENEFICIARY FIRST BECAME A RESIDENT OF THE CITY OR  IN
       S. 6359--D                         175                        A. 8559--D

    1  ANY  TAXABLE  YEAR STARTING BEFORE JANUARY FIRST, TWO THOUSAND FOURTEEN.
    2  EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH, ALL OF THE PROVISIONS OF
    3  THE INTERNAL REVENUE CODE THAT ARE  RELEVANT  TO  COMPUTING  THE  AMOUNT
    4  DESCRIBED IN THE FIRST SENTENCE OF SUBSECTION (A) OF SECTION SIX HUNDRED
    5  SIXTY-SEVEN  OF  THE INTERNAL REVENUE CODE SHALL APPLY TO THE PROVISIONS
    6  OF THIS PARAGRAPH WITH THE SAME FORCE AND EFFECT AS IF THE  LANGUAGE  OF
    7  THOSE  INTERNAL  REVENUE  CODE  PROVISIONS HAD BEEN INCORPORATED IN FULL
    8  INTO THIS PARAGRAPH, EXCEPT TO THE EXTENT THAT  ANY  SUCH  PROVISION  IS
    9  EITHER INCONSISTENT WITH OR NOT RELEVANT TO THIS PARAGRAPH.
   10    S  7. Subdivision (b) of section 11-1712 of the administrative code of
   11  the city of New York is amended by adding a new paragraph 37 to read  as
   12  follows:
   13    (37)  IN  THE CASE OF A TAXPAYER WHO TRANSFERRED PROPERTY TO AN INCOM-
   14  PLETE GIFT  NON-GRANTOR  TRUST,  THE  INCOME  OF  THE  TRUST,  LESS  ANY
   15  DEDUCTIONS  OF  SUCH  TRUST, TO THE EXTENT SUCH INCOME AND DEDUCTIONS OF
   16  SUCH TRUST WOULD BE TAKEN  INTO  ACCOUNT  IN  COMPUTING  THE  TAXPAYER'S
   17  FEDERAL  TAXABLE  INCOME IF SUCH TRUST IN ITS ENTIRETY WERE TREATED AS A
   18  GRANTOR TRUST FOR FEDERAL TAX PURPOSES. FOR PURPOSES OF THIS  PARAGRAPH,
   19  AN "INCOMPLETE GIFT NON-GRANTOR TRUST" MEANS A RESIDENT TRUST THAT MEETS
   20  THE  FOLLOWING  CONDITIONS:  (I) THE TRUST DOES NOT QUALIFY AS A GRANTOR
   21  TRUST UNDER SECTION SIX HUNDRED SEVENTY-ONE THROUGH SIX  HUNDRED  SEVEN-
   22  TY-NINE  OF THE INTERNAL REVENUE CODE, AND (2) THE GRANTOR'S TRANSFER OF
   23  ASSETS TO THE TRUST IS TREATED AS AN INCOMPLETE GIFT UNDER SECTION TWEN-
   24  TY FIVE HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE, AND THE REGULATIONS
   25  THEREUNDER.
   26    S 8. Section 11-1721 of the administrative code of  the  city  of  New
   27  York, subdivisions (a) and (b) as amended by section 72 and such section
   28  as  renumbered  by  section  43  of  chapter 639 of the laws of 1986, is
   29  amended to read as follows:
   30    S 11-1721 [Credit] CREDITS to trust beneficiary receiving accumulation
   31  distribution. (a) General. A city resident beneficiary of a trust  whose
   32  city  adjusted  gross  income  includes  all  or part of an accumulation
   33  distribution by such trust, as defined in section six hundred sixty-five
   34  of the internal revenue code, INCLUDING A BENEFICIARY WHO IS REQUIRED TO
   35  MAKE THE MODIFICATION REQUIRED BY PARAGRAPH  THIRTY-SIX  OF  SUBDIVISION
   36  (B) OF SECTION 11-1712 OF THIS SUBCHAPTER, shall be allowed (1) a credit
   37  against  the  tax  otherwise due under this chapter for all or a propor-
   38  tionate part of any tax paid by the trust under this  chapter  or  under
   39  FORMER  title  T  of chapter forty-six of this code, as it was in effect
   40  prior to September first, nineteen hundred eighty-six, for any preceding
   41  taxable year which would not have been payable if the trust had in  fact
   42  made  distributions to its beneficiaries at the times and in the amounts
   43  specified in section six hundred sixty-six of the internal revenue code;
   44  AND (2) A CREDIT AGAINST THE TAXES IMPOSED BY THIS CHAPTER FOR THE TAXA-
   45  BLE YEAR FOR ANY INCOME TAX IMPOSED FOR THE TAXABLE YEAR  OR  ANY  PRIOR
   46  TAXABLE YEAR BY ANOTHER STATE OF THE UNITED STATES, A POLITICAL SUBDIVI-
   47  SION  THEREOF,  OR  THE  DISTRICT  OF COLUMBIA, UPON INCOME BOTH DERIVED
   48  THEREFROM AND SUBJECT TO TAX  UNDER  THIS  CHAPTER,  PROVIDED  THAT  THE
   49  AMOUNT  OF  THE CREDIT SHALL NOT EXCEED THE PERCENTAGE OF THE TAX OTHER-
   50  WISE DUE UNDER THIS CHAPTER DETERMINED BY DIVIDING THE  PORTION  OF  THE
   51  INCOME  THAT IS BOTH TAXABLE TO THE TRUST IN SUCH OTHER JURISDICTION AND
   52  TAXABLE TO THE BENEFICIARY UNDER THIS CHAPTER BY THE TOTAL AMOUNT OF THE
   53  BENEFICIARY'S NEW YORK CITY INCOME.
   54    (b) Limitation. The [credit] CREDITS  under  this  section  shall  not
   55  reduce  the tax otherwise due from the beneficiary under this chapter to
   56  an amount less than would have been due if the accumulation distribution
       S. 6359--D                         176                        A. 8559--D

    1  or his or her part thereof were excluded from his or her  city  adjusted
    2  gross income.
    3    S 9. This act shall take effect immediately and shall apply to taxable
    4  years  beginning on or after January 1, 2014, provided that sections one
    5  and six of this act shall not apply to income of a nonresident trust  or
    6  an  exempt resident trust paid to a beneficiary before June 1, 2014, and
    7  sections two and seven of this act shall not  apply  to  income  from  a
    8  trust that is liquidated before June 1, 2014.

    9                                   PART J

   10    Section 1. Section 602 of the tax law is REPEALED.
   11    S  2.  Paragraph 4 of subsection (c) and paragraph 4 of subsection (d)
   12  of section 606 of the tax law, paragraph 4 of subsection (c) as added by
   13  chapter 309 of the laws of 1996 and paragraph 4  of  subsection  (d)  as
   14  amended  by  chapter  2  of  the  laws  of  1995, are amended to read as
   15  follows:
   16    (4) Part-year residents. In the case of a part-year resident taxpayer,
   17  the credit under this subsection shall be allowed against the tax deter-
   18  mined under subsections (a) through  (d)  of  section  six  hundred  one
   19  reduced  by  the  credit permitted under subsection (b) of this section,
   20  and any excess credit after such application shall  be  allowed  against
   21  the  [taxes]  TAX  imposed by [sections six hundred two and] SECTION six
   22  hundred three. Any remaining excess, after such  application,  shall  be
   23  refunded  as  provided  in paragraph two hereof, provided, however, that
   24  any overpayment under such paragraph shall be limited to the  amount  of
   25  the remaining excess multiplied by a fraction, the numerator of which is
   26  federal  adjusted  gross income for the period of residence, computed as
   27  if the taxable year for federal income tax purposes were limited to  the
   28  period  of  residence,  and the denominator of which is federal adjusted
   29  gross income for the taxable year.
   30    (4) Part-year residents. In the case of a part-year resident taxpayer,
   31  the credit under this subsection shall be allowed against the tax deter-
   32  mined under subsections (a) through  (d)  of  section  six  hundred  one
   33  reduced  by  the credits permitted under subsections (b), (c) and (m) of
   34  this section, and any excess credit  after  such  application  shall  be
   35  allowed  against  the  [taxes]  TAX imposed by [sections six hundred two
   36  and] SECTION six hundred three. Any remaining excess, after such  appli-
   37  cation, shall be refunded as provided in paragraph two hereof, provided,
   38  however,  that  any overpayment under such paragraph shall be limited to
   39  the amount of the remaining excess multiplied by a fraction, the numera-
   40  tor of which is federal adjusted gross income for the  period  of  resi-
   41  dence,  computed  as if the taxable year for federal income tax purposes
   42  were limited to the period of residence, and the denominator of which is
   43  federal adjusted gross income for the taxable year.
   44    S 3. Section 622 of the tax law is REPEALED.
   45    S 4. Section 636 of the tax law is REPEALED.
   46    S 5. Subsections (a), (b) and (c) of section 639 of the  tax  law,  as
   47  added  by  chapter  170  of  the  laws  of  1994, are amended to read as
   48  follows:
   49    (a) If an individual changes status from resident  to  nonresident  he
   50  shall,  regardless  of his method of accounting, accrue to the period of
   51  residence any items of income, gain,  loss,  deduction,  [items  of  tax
   52  preference] or ordinary income portion of a lump sum distribution accru-
   53  ing prior to the change of status, with the applicable modifications and
   54  adjustments  to federal adjusted gross income[,] AND itemized deductions
       S. 6359--D                         177                        A. 8559--D

    1  [and items of tax preference] under sections six hundred  twelve[,]  AND
    2  six hundred fifteen [and six hundred twenty-two], if not otherwise prop-
    3  erly  includible  or allowable for New York income tax purposes for such
    4  period or a prior taxable year under his method of accounting.
    5    (b)  If  an  individual changes status from nonresident to resident he
    6  shall, regardless of his method of accounting, accrue to the  period  of
    7  nonresidence any items of income, gain, loss or deduction, [items of tax
    8  preference] or ordinary income portion of a lump sum distribution accru-
    9  ing prior to the change of status, with the applicable modifications and
   10  adjustments  to federal adjusted gross income[,] AND itemized deductions
   11  [and items of tax preference] under sections six hundred  twelve[,]  AND
   12  six  hundred  fifteen  [and  six  hundred  twenty-two], other than items
   13  derived from or connected with New York sources, if not otherwise  prop-
   14  erly  includible  or allowable for New York income tax purposes for such
   15  period or for a prior taxable year under his method of accounting.
   16    (c) No item of income, gain, loss, deduction,  [item  of  tax  prefer-
   17  ence,]  ordinary  income portion of a lump sum distribution or modifica-
   18  tion or adjustment which is accrued under this section  shall  be  taken
   19  into  account  in  determining the tax under this article for any subse-
   20  quent taxable year.
   21    S 6. Paragraphs 1, 2, 3 and 4 of subsection (a) of section 651 of  the
   22  tax  law,  paragraph  1  as  amended by chapter 333 of the laws of 1987,
   23  paragraph 2 as amended by chapter 28 of the laws of 1987, and paragraphs
   24  3 and 4 as amended by chapter 170 of the laws of 1994,  are  amended  to
   25  read as follows:
   26    (1)  every  resident  individual (A) required to file a federal income
   27  tax return for the taxable year, or (B) having  federal  adjusted  gross
   28  income  for  the  taxable  year,  increased  by  the modifications under
   29  subsection (b) of section six hundred twelve, in excess of four thousand
   30  dollars, or in excess of his New York standard deduction, if  lower,  or
   31  (C)  [subject  to  tax  under  section  six  hundred two, or (D)] having
   32  received during the taxable year a lump sum distribution any portion  of
   33  which is subject to tax under section six hundred three;
   34    (2)  every  resident estate or trust required to file a federal income
   35  tax return for the taxable year, or having any New York  taxable  income
   36  for the taxable year, determined under section six hundred eighteen, [or
   37  subject to tax under section six hundred two,] or having received during
   38  the taxable year a lump sum distribution any portion of which is subject
   39  to tax under section six hundred three;
   40    (3) every nonresident or part-year resident individual having New York
   41  source  income  for  the taxable year, determined under part III of this
   42  article, and having New York adjusted gross income for the taxable year,
   43  determined under part II of this article, in excess  of  the  taxpayer's
   44  New  York  standard  deduction,  [or  subject  to  tax under section six
   45  hundred two,] or having received during the  taxable  year  a  lump  sum
   46  distribution  any  portion  of which is subject to tax under section six
   47  hundred three; and
   48    (4) every nonresident estate or  trust  or  part-year  resident  trust
   49  having  New  York  source  income for the taxable year, determined under
   50  part III of this article, and having New York adjusted gross income  for
   51  the  taxable  year, determined under paragraph four of subsection (e) of
   52  section six hundred one, [or subject to tax under  section  six  hundred
   53  two,] or having received during the taxable year a lump sum distribution
   54  any portion of which is subject to tax under section six hundred three.
       S. 6359--D                         178                        A. 8559--D

    1    S  7.  Paragraph 6 of subsection (b) of section 654 of the tax law, as
    2  added by section 5 of part Q of chapter 407 of  the  laws  of  1999,  is
    3  amended to read as follows:
    4    (6) In subparagraph (B) of paragraph two of subsection (d), the phrase
    5  "section  1  or  55"  shall  be read as "section six hundred one [or six
    6  hundred two] of this article".
    7    S 8. Section 659 of the tax law, as amended by chapter 577 of the laws
    8  of 1997, is amended to read as follows:
    9    S 659.  Report of federal changes, corrections or disallowances.    If
   10  the amount of a taxpayer's federal taxable income, [federal items of tax
   11  preference,]  total  taxable amount or ordinary income portion of a lump
   12  sum distribution or includible gain of a trust reported on  his  federal
   13  income  tax  return  for any taxable year, or the amount of a taxpayer's
   14  earned income credit or credit for employment-related expenses set forth
   15  on such return, or the amount of any federal foreign tax credit  affect-
   16  ing  the  calculation  of the credit for Canadian provincial taxes under
   17  section six hundred twenty or six hundred twenty-A of this  article,  or
   18  the  amount of any claim of right adjustment, is changed or corrected by
   19  the United States internal revenue service or other competent  authority
   20  or  as  the  result of a renegotiation of a contract or subcontract with
   21  the United States, or the amount an employer is required to  deduct  and
   22  withhold  from  wages  for  federal  income  tax withholding purposes is
   23  changed or corrected by such service or authority  or  if  a  taxpayer's
   24  claim  for credit or refund of federal income tax is disallowed in whole
   25  or in part, the  taxpayer  or  employer  shall  report  such  change  or
   26  correction  or  disallowance within ninety days after the final determi-
   27  nation of such change, correction, renegotiation or disallowance, or  as
   28  otherwise  required  by the commissioner, and shall concede the accuracy
   29  of such determination or state wherein it is erroneous.   The  allowance
   30  of  a  tentative  carryback  adjustment  based upon a net operating loss
   31  carryback pursuant to section sixty-four hundred eleven of the  internal
   32  revenue  code  shall be treated as a final determination for purposes of
   33  this section.  Any taxpayer filing an amended federal income tax  return
   34  and any employer filing an amended federal return of income tax withheld
   35  shall  also  file  within ninety days thereafter an amended return under
   36  this article, and shall give such information as  the  commissioner  may
   37  require.    The commissioner may by regulation prescribe such exceptions
   38  to the requirements of this section as he or she deems appropriate.  For
   39  purposes of this section, (i) the term "taxpayer" shall include a  part-
   40  nership  having a resident partner or having any income derived from New
   41  York sources, and a corporation with respect to which the  taxable  year
   42  of  such  change,  correction,  disallowance or amendment is a year with
   43  respect to which the election provided for in subsection (a) of  section
   44  six  hundred  sixty  of  this  article  is  in effect, and (ii) the term
   45  "federal income tax return" shall include the returns of income required
   46  under sections six thousand thirty-one and six thousand thirty-seven  of
   47  the  internal  revenue  code.    In the case of such a corporation, such
   48  report shall  also  include  any  change  or  correction  of  the  taxes
   49  described in paragraphs two and three of subsection (f) of section thir-
   50  teen hundred sixty-six of the internal revenue code.  Reports made under
   51  this  section by a partnership or corporation shall indicate the portion
   52  of the change in each item of income, gain, loss or deduction  (and,  in
   53  the case of a corporation, of each change in, or disallowance of a claim
   54  for  credit  or  refund of, a tax referred to in the preceding sentence)
   55  allocable to each partner or shareholder and shall set forth such  iden-
       S. 6359--D                         179                        A. 8559--D

    1  tifying  information  with respect to such partner or shareholder as may
    2  be prescribed by the commissioner.
    3    S 9. Subsection (d) of section 683 of the tax law, as amended by chap-
    4  ter 170 of the laws of 1994, is amended to read as follows:
    5    (d) Omission of income, [item of tax preference,] total taxable amount
    6  or  ordinary  income  portion of a lump sum distribution on return.--The
    7  tax may be assessed at any time within six years after  the  return  was
    8  filed if--
    9    (1)  an individual omits from his New York adjusted gross income, [the
   10  sum of his items of tax preference,] or  the  total  taxable  amount  or
   11  ordinary  income  portion  of a lump sum distribution an amount properly
   12  includible therein which is in excess  of  twenty-five  percent  of  the
   13  amount  of  New York adjusted gross income, [the sum of the items of tax
   14  preference,] or the total taxable amount or ordinary income portion of a
   15  lump sum distribution stated in the return, or
   16    (2) an estate or trust omits from its New York adjusted gross  income,
   17  [the sum of its items of tax preference,] or the total taxable amount or
   18  ordinary  income  portion  of a lump sum distribution an amount properly
   19  includible therein which is in excess  of  twenty-five  percent  of  the
   20  amount stated in the return of New York adjusted gross income determined
   21  in  accordance  with  paragraph  four  of  subsection (e) of section six
   22  hundred one, [or the sum of the items of tax preference,] or  the  total
   23  taxable  amount  or  ordinary income portion of a lump sum distribution,
   24  respectively. For purposes of this subsection there shall not  be  taken
   25  into account any amount which is omitted in the return if such amount is
   26  disclosed  in the return, or in a statement attached to the return, in a
   27  manner adequate to apprise the commissioner of the nature and amount  of
   28  the  item  of income, [tax preference,] total taxable amount or ordinary
   29  income portion of a lump sum distribution.
   30    S 10. Subparagraph (B) of paragraph 4 of subsection (c) of section 685
   31  of the tax law, as amended by chapter 28 of the laws of 1987, is amended
   32  to read as follows:
   33    (B) Determination of annualized income installment.--In  the  case  of
   34  any  required  installment,  the  annualized  income  installment is the
   35  excess, if any, of an amount equal to the applicable percentage  of  the
   36  tax  for the taxable year computed by placing on an annualized basis the
   37  taxable income [and minimum taxable income] for months  in  the  taxable
   38  year  ending before the due date for the installment, over the aggregate
   39  amount of any prior required installments  for  the  taxable  year.  The
   40  applicable  percentage  of  the  tax  shall  be  twenty-two and one-half
   41  percent in the case of the first installment, forty-five percent in  the
   42  case  of the second installment, sixty-seven and one-half percent in the
   43  case of the third installment and ninety percent  in  the  case  of  the
   44  fourth installment, and shall be computed without regard to any increase
   45  in  the  rates  applicable  to the taxable year unless such increase was
   46  enacted at least thirty days prior to the due date of the installment.
   47    S 11. Paragraphs 2 and 3 of subsection (a) of section 1301 of the  tax
   48  law,  as amended by chapter 209 of the laws of 2011, are amended to read
   49  as follows:
   50    (2) [for taxable years beginning before two thousand fifteen,  a  city
   51  minimum income tax on such residents, and
   52    (3)] for taxable years beginning after nineteen hundred seventy-six, a
   53  separate tax on the ordinary income portion of lump sum distributions of
   54  such  residents,  at  the  rates  provided  for herein, such taxes to be
   55  administered, collected and distributed by the commissioner as  provided
   56  for in this article.
       S. 6359--D                         180                        A. 8559--D

    1    S 12. Section 1301-A of the tax law is REPEALED.
    2    S  13.  Subsection  (a)  of section 1302 of the tax law, as amended by
    3  chapter 333 of the laws of 1987, is amended to read as follows:
    4    (a) Imposition of tax. The city personal income tax  (other  than  the
    5  [city  minimum  income  tax  and  the] city separate tax on the ordinary
    6  income portion of  lump  sum  distributions)  imposed  pursuant  to  the
    7  authority  of this article shall be imposed for each taxable year on the
    8  city taxable income of every city resident individual, estate and trust.
    9  A taxpayer's taxable year for purposes of a tax imposed pursuant to  the
   10  authority  of  this  article shall be the same as his taxable year under
   11  article twenty-two of this chapter.
   12    S 14. The opening paragraph of subsection (a) of section 1304  of  the
   13  tax  law, as amended by section 134 of part A of chapter 389 of the laws
   14  of 1997, is amended to read as follows:
   15    A tax (other than the [city minimum income tax, the] city separate tax
   16  relating to qualified higher education funds and the city  separate  tax
   17  on the ordinary income portion of lump sum distributions) imposed pursu-
   18  ant  to  the  authority  of section thirteen hundred one of this article
   19  shall be determined as follows:
   20    S 15. Subsection (c) of section 1307 of the tax  law,  as  amended  by
   21  chapter 712 of the laws of 2004, is amended to read as follows:
   22    (c)  When  an individual changes his status from city resident to city
   23  nonresident, or from  city  nonresident  to  city  resident,  he  shall,
   24  regardless  of  his  method  of  accounting, accrue any items of income,
   25  gain, loss, deduction[, items of  tax  preference]  or  ordinary  income
   26  portion  of  a  lump  sum  distribution  accruing prior to the change of
   27  status, with the applicable modifications  and  adjustments  to  federal
   28  adjusted gross income[,] AND itemized deductions [and items of tax pref-
   29  erence]  under  sections  six  hundred twelve[,] AND six hundred fifteen
   30  [and six hundred twenty-two], if not otherwise  properly  includible  or
   31  allowable  for  New  York income tax purposes for such period or a prior
   32  taxable year under his method of accounting. Such accruals shall be made
   33  as provided in section six hundred thirty-nine of this chapter.
   34    S 16. Subsection (a) of section 1306 of the tax  law,  as  amended  by
   35  chapter 333 of the laws of 1987, is amended to read as follows:
   36    (a)  General.  On  or  before  the  fifteenth  day of the fourth month
   37  following the close of a taxable year, an income tax return under a city
   38  tax imposed pursuant to the authority of this article shall be made  and
   39  filed by or for every city resident individual, estate or trust required
   40  to  file  a  New  York  state  personal income tax (including [a minimum
   41  income tax and] a city separate tax on the ordinary  income  portion  of
   42  lump sum distributions) return for the taxable year.
   43    S  17.  Section  11-1702 of the administrative code of the city of New
   44  York is REPEALED.
   45    S 18. Subdivision (a) of section 11-1704 of the administrative code of
   46  the city of New York, as amended by chapter 17 of the laws of  1997,  is
   47  amended to read as follows:
   48    (a)  In  addition  to the taxes imposed by sections 11-1701[, 11-1702]
   49  and 11-1703, there is hereby imposed for  each  taxable  year  beginning
   50  after  nineteen  hundred eighty-nine but before nineteen hundred ninety-
   51  nine, a tax surcharge on the city taxable income of every city  resident
   52  individual, estate and trust.
   53    S 19. Subdivision (c) of section 11-1704 of the administrative code of
   54  the  city of New York, as amended by chapter 271 of the laws of 1991, is
   55  amended to read as follows:
       S. 6359--D                         181                        A. 8559--D

    1    (c) The tax surcharge imposed pursuant to this section shall be admin-
    2  istered, collected and distributed by the commissioner of  taxation  and
    3  finance  in  the  same  manner as the taxes imposed pursuant to sections
    4  11-1701[, 11-1702] and 11-1703, and all of the provisions of this  chap-
    5  ter, including sections 11-1706, 11-1721 and 11-1773, shall apply to the
    6  tax surcharge imposed by this section.
    7    S  20.  Section  11-1722 of the administrative code of the city of New
    8  York is REPEALED.
    9    S 21. Subdivision (a) of section 11-1751 of the administrative code of
   10  the city of New York, as amended by chapter 333 of the laws of 1987,  is
   11  amended to read as follows:
   12    (a)  General.  On  or  before  the  fifteenth  day of the fourth month
   13  following the close of a taxable year, an income tax return  under  this
   14  chapter  shall  be made and filed by or for every city resident individ-
   15  ual, estate or trust required to file a New York state  personal  income
   16  tax  (including  a [minimum income tax and] separate tax on the ordinary
   17  income portion of lump sum distributions) return for the taxable year.
   18    S 22. Subdivision (b) of section 11-1754 of the administrative code of
   19  the city of New York, as amended by chapter 712 of the laws of 2004,  is
   20  amended to read as follows:
   21    (b)  City  taxable  income  [and  city minimum taxable income] as city
   22  resident. The city taxable income [and city minimum taxable income]  for
   23  the  portion of the year during which he or she is a city resident shall
   24  be determined, except as provided in subdivision (c), as if his  or  her
   25  taxable  year for federal income tax purposes were limited to the period
   26  of his or her city resident status.
   27    S 23. Paragraph 6 of subdivision (b) of section 11-1755 of the  admin-
   28  istrative code of the city of New York, as added by section 17 of part Q
   29  of chapter 407 of the laws of 1999, is amended to read as follows:
   30    (6) In subparagraph (B) of paragraph two of subsection (d), the phrase
   31  "section 1 or 55" shall be read as "section 11-1701 [or 11-1702] of this
   32  chapter".
   33    S  24.  Section  11-1759 of the administrative code of the city of New
   34  York, as amended by chapter 577 of the laws of 1997, is amended to  read
   35  as follows:
   36    S  11-1759 Report of federal changes, corrections or disallowances. If
   37  the amount of a taxpayer's federal taxable income, [federal items of tax
   38  preference,] total taxable amount or ordinary income portion of  a  lump
   39  sum  distribution  or includible gain of a trust reported on his federal
   40  income tax return for any taxable year, or the amount of  any  claim  of
   41  right  adjustment, is changed or corrected by the United States internal
   42  revenue service or other competent authority, or  as  the  result  of  a
   43  renegotiation of a contract or subcontract with the United States or the
   44  amount  an  employer  is  required to deduct and withhold from wages for
   45  federal income tax withholding purposes is changed or corrected by  such
   46  service  or  authority  or if a taxpayer's claim for credit or refund of
   47  federal income tax is disallowed in whole or in part,  the  taxpayer  or
   48  employer  shall  report such change or correction or disallowance within
   49  ninety days after the final determination of  such  change,  correction,
   50  renegotiation,  or disallowance, or as otherwise required by the commis-
   51  sioner, and shall concede the accuracy of such  determination  or  state
   52  wherein  it is erroneous. The allowance of a tentative carryback adjust-
   53  ment based upon a net  operating  loss  carryback  pursuant  to  section
   54  sixty-four  hundred eleven of the internal revenue code shall be treated
   55  as a final determination for purposes  of  this  section.  Any  taxpayer
   56  filing  an  amended federal income tax return and any employer filing an
       S. 6359--D                         182                        A. 8559--D

    1  amended federal return of income tax withheld  shall  also  file  within
    2  ninety  days  thereafter an amended return under this chapter, and shall
    3  give such information as the commissioner may require. The  commissioner
    4  may  by regulation prescribe such exceptions to the requirements of this
    5  section as he or she deems appropriate. For purposes  of  this  section,
    6  (i)  the  term  "taxpayer" shall include a partnership having a resident
    7  partner or having any income derived from New York sources, and a corpo-
    8  ration  with  respect  to  which  the  taxable  year  of  such   change,
    9  correction,  disallowance  or  amendment is a year with respect to which
   10  the election provided for in subsection (a) of section six hundred sixty
   11  of the tax law is in effect, and  (ii)  the  term  "federal  income  tax
   12  return"  shall include the returns of income required under sections six
   13  thousand thirty-one and six thousand thirty-seven of the internal reven-
   14  ue code. In the case of such  a  corporation,  such  report  shall  also
   15  include  any  change  or correction of the taxes described in paragraphs
   16  two and three of subsection (f) of section thirteen hundred sixty-six of
   17  the internal revenue code. Reports made under this section by a partner-
   18  ship or corporation shall indicate the portion of  the  change  in  each
   19  item  of  income,  gain, loss or deduction (and, in the case of a corpo-
   20  ration, of each change in, or disallowance of  a  claim  for  credit  or
   21  refund  of,  a  tax  referred to in the preceding sentence) allocable to
   22  each partner or shareholder and shall set forth such identifying  infor-
   23  mation  with respect to such partner or shareholder as may be prescribed
   24  by the commissioner.
   25    S 25. Subdivision (d) of section 11-1783 of the administrative code of
   26  the city of New York, as amended by chapter 170 of the laws of 1994,  is
   27  amended to read as follows:
   28    (d) Omission of income, [item of tax preference,] total taxable amount
   29  or ordinary income portion of a lump sum distribution on return. The tax
   30  may  be assessed at any time within six years after the return was filed
   31  if:
   32    (1) an individual omits from his city adjusted gross income[, the  sum
   33  of his items of tax preference, or] the total taxable amount or ordinary
   34  income  portion of a lump sum distribution an amount properly includible
   35  therein which is in excess of twenty-five percent of the amount of  city
   36  adjusted  gross  income[, the sum of the items of tax preference] or the
   37  total taxable amount or ordinary income portion of a lump  sum  distrib-
   38  ution stated in the return, or
   39    (2) an estate or trust omits from its city adjusted gross income, [the
   40  sum  of  its  items  of  tax preference,] or the total taxable amount or
   41  ordinary income portion of a lump sum distribution  an  amount  properly
   42  includible  therein  which  is  in  excess of twenty-five percent of the
   43  amount stated in the return of city adjusted gross income, [or  the  sum
   44  of the items of tax preference,] or the total taxable amount or ordinary
   45  income portion of a lump sum distribution, respectively. For purposes of
   46  this paragraph, city adjusted gross income means New York adjusted gross
   47  income  as  determined under paragraph four of subsection (e) of section
   48  six hundred one of the tax law.
   49    For purposes of this subdivision there shall not be taken into account
   50  any amount which is omitted in the return if such amount is disclosed in
   51  the return, or in a statement  attached  to  the  return,  in  a  manner
   52  adequate  to  apprise  the  commissioner of the nature and amount of the
   53  item of income, [tax preference,] the total taxable amount  or  ordinary
   54  income portion of a lump sum distribution.
       S. 6359--D                         183                        A. 8559--D

    1    S  26.  Subparagraph  (B) of paragraph 4 of subdivision (c) of section
    2  11-1785 of the administrative code of the city of New York,  as  amended
    3  by chapter 333 of the laws of 1987, is amended to read as follows:
    4    (B) Determination of annualized income installment. In the case of any
    5  required  installment,  the annualized income installment is the excess,
    6  if any, of an amount equal to the applicable percentage of the  tax  for
    7  the  taxable year computed by placing on an annualized basis the taxable
    8  income [and minimum taxable income]  for  months  in  the  taxable  year
    9  ending  before  the  due  date  for  the installment, over the aggregate
   10  amount of any prior required installments  for  the  taxable  year.  The
   11  applicable  percentage  of  the  tax  shall  be  twenty-two and one-half
   12  percent in the case of the first installment, forty-five percent in  the
   13  case  of the second installment, sixty-seven and one-half percent in the
   14  case of the third installment and ninety percent  in  the  case  of  the
   15  fourth installment, and shall be computed without regard to any increase
   16  in  the  rates  applicable  to the taxable year unless such increase was
   17  enacted at least thirty days prior to the due date of the installment.
   18    S 27. This act shall take effect  immediately  and  apply  to  taxable
   19  years beginning on or after January 1, 2014.

   20                                   PART K

   21    Section  1.  Subsection  (e-1) of section 606 of the tax law is relet-
   22  tered subsection (e-2).
   23    S 2. Section 606 of the tax law is amended by adding a new  subsection
   24  (e-1) to read as follows:
   25    (E-1)  ENHANCED  REAL  PROPERTY  TAX  CIRCUIT  BREAKER CREDIT. (1) FOR
   26  PURPOSES OF THIS SUBSECTION:
   27    (A) "QUALIFIED TAXPAYER" MEANS A RESIDENT INDIVIDUAL OF THE STATE, WHO
   28  (I) IS A RESIDENT OF A CITY WITH A POPULATION OVER ONE MILLION, (II) HAS
   29  OCCUPIED THE SAME RESIDENCE FOR SIX MONTHS OR MORE OF THE TAXABLE  YEAR,
   30  AND (III) IS REQUIRED OR CHOOSES TO FILE A RETURN UNDER THIS ARTICLE.
   31    (B)  "HOUSEHOLD"  OR  "MEMBERS  OF  THE  HOUSEHOLD"  MEANS A QUALIFIED
   32  TAXPAYER AND ALL OTHER PERSONS, NOT NECESSARILY RELATED,  WHO  HAVE  THE
   33  SAME RESIDENCE AND SHARE ITS FURNISHINGS, FACILITIES AND ACCOMMODATIONS.
   34  SUCH  TERMS SHALL NOT INCLUDE A TENANT, SUBTENANT, ROOMER OR BOARDER WHO
   35  IS NOT RELATED TO THE QUALIFIED TAXPAYER  IN  ANY  DEGREE  SPECIFIED  IN
   36  PARAGRAPHS  ONE  THROUGH  EIGHT OF SUBSECTION (A) OF SECTION ONE HUNDRED
   37  FIFTY-TWO OF THE INTERNAL REVENUE CODE.   PROVIDED, HOWEVER,  NO  PERSON
   38  MAY BE A MEMBER OF MORE THAN ONE HOUSEHOLD AT ONE TIME.
   39    (C) "HOUSEHOLD GROSS INCOME" MEANS THE AGGREGATE ADJUSTED GROSS INCOME
   40  OF  ALL  MEMBERS  OF  THE HOUSEHOLD FOR THE TAXABLE YEAR AS REPORTED FOR
   41  FEDERAL INCOME TAX PURPOSES, OR WHICH  WOULD  BE  REPORTED  AS  ADJUSTED
   42  GROSS  INCOME  IF A FEDERAL INCOME TAX RETURN WERE REQUIRED TO BE FILED,
   43  WITH THE MODIFICATIONS IN SUBSECTION (B) OF SECTION SIX  HUNDRED  TWELVE
   44  OF  THIS ARTICLE BUT WITHOUT THE MODIFICATIONS IN SUBSECTION (C) OF SUCH
   45  SECTION, PLUS ANY PORTION OF THE GAIN FROM THE SALE OR EXCHANGE OF PROP-
   46  ERTY OTHERWISE EXCLUDED FROM SUCH AMOUNT;  EARNED  INCOME  FROM  SOURCES
   47  WITHOUT  THE  UNITED  STATES  EXCLUDABLE  FROM  FEDERAL  GROSS INCOME BY
   48  SECTION NINE HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE; SUPPORT  MONEY
   49  NOT  INCLUDED  IN  ADJUSTED  GROSS  INCOME;  NONTAXABLE STRIKE BENEFITS;
   50  SUPPLEMENTAL SECURITY INCOME PAYMENTS; THE GROSS AMOUNT OF  ANY  PENSION
   51  OR  ANNUITY  BENEFITS  TO THE EXTENT NOT INCLUDED IN SUCH ADJUSTED GROSS
   52  INCOME (INCLUDING, BUT NOT LIMITED TO, RAILROAD RETIREMENT BENEFITS  AND
   53  ALL  PAYMENTS  RECEIVED UNDER THE FEDERAL SOCIAL SECURITY ACT AND VETER-
   54  ANS' DISABILITY PENSIONS); NONTAXABLE INTEREST RECEIVED FROM  THE  STATE
       S. 6359--D                         184                        A. 8559--D

    1  OF  NEW  YORK,  ITS AGENCIES, INSTRUMENTALITIES, PUBLIC CORPORATIONS, OR
    2  POLITICAL SUBDIVISIONS (INCLUDING A PUBLIC CORPORATION CREATED  PURSUANT
    3  TO  AGREEMENT OR COMPACT WITH ANOTHER STATE OR CANADA); WORKERS' COMPEN-
    4  SATION;  THE GROSS AMOUNT OF "LOSS-OF-TIME" INSURANCE; AND THE AMOUNT OF
    5  CASH PUBLIC ASSISTANCE AND RELIEF, OTHER THAN MEDICAL ASSISTANCE FOR THE
    6  NEEDY, PAID TO OR FOR THE BENEFIT OF THE QUALIFIED TAXPAYER  OR  MEMBERS
    7  OF  HIS  OR  HER  HOUSEHOLD.  HOUSEHOLD  GROSS  INCOME SHALL NOT INCLUDE
    8  SURPLUS FOODS OR OTHER RELIEF IN KIND OR PAYMENTS  MADE  TO  INDIVIDUALS
    9  BECAUSE  OF  THEIR  STATUS  AS VICTIMS OF NAZI PERSECUTION AS DEFINED IN
   10  P.L. 103-286. PROVIDED,  FURTHER,  HOUSEHOLD  GROSS  INCOME  SHALL  ONLY
   11  INCLUDE  ALL  SUCH INCOME RECEIVED BY ALL MEMBERS OF THE HOUSEHOLD WHILE
   12  MEMBERS OF SUCH HOUSEHOLD. IN COMPUTING HOUSEHOLD GROSS INCOME, THE  NET
   13  AMOUNT  OF  LOSS  REPORTED  ON  FEDERAL SCHEDULE C, D, E, OR F SHALL NOT
   14  EXCEED THREE THOUSAND DOLLARS PER SCHEDULE. IN ADDITION, THE NET  AMOUNT
   15  OF  ANY  OTHER SEPARATE CATEGORY OF LOSS SHALL NOT EXCEED THREE THOUSAND
   16  DOLLARS. THE AGGREGATE AMOUNT OF ALL LOSSES INCLUDED IN COMPUTING HOUSE-
   17  HOLD GROSS INCOME SHALL NOT EXCEED FIFTEEN THOUSAND DOLLARS.
   18    (D) "RESIDENCE" MEANS A DWELLING IN THIS STATE OWNED OR RENTED BY  THE
   19  TAXPAYER,  AND  SO MUCH OF THE LAND ABUTTING IT, NOT EXCEEDING ONE ACRE,
   20  AS IS REASONABLY NECESSARY FOR USE OF THE DWELLING AS A  HOME,  AND  MAY
   21  CONSIST  OF A PART OF A MULTI-DWELLING OR MULTI-PURPOSE BUILDING INCLUD-
   22  ING A COOPERATIVE OR CONDOMINIUM,  AND  RENTAL  UNITS  WITHIN  A  SINGLE
   23  DWELLING.  RESIDENCE INCLUDES A TRAILER OR MOBILE HOME, USED EXCLUSIVELY
   24  FOR  RESIDENTIAL PURPOSES AND DEFINED AS REAL PROPERTY PURSUANT TO PARA-
   25  GRAPH (G) OF SUBDIVISION TWELVE OF SECTION ONE HUNDRED TWO OF  THE  REAL
   26  PROPERTY TAX LAW.
   27    (E)  "QUALIFYING  REAL  PROPERTY TAXES" MEANS ALL REAL PROPERTY TAXES,
   28  SPECIAL AD VALOREM LEVIES AND SPECIAL ASSESSMENTS, EXCLUSIVE  OF  PENAL-
   29  TIES  AND  INTEREST, LEVIED ON THE RESIDENCE OF A QUALIFIED TAXPAYER AND
   30  PAID DURING THE TAXABLE YEAR. A QUALIFIED TAXPAYER MAY ELECT TO  INCLUDE
   31  ANY  ADDITIONAL  AMOUNT THAT WOULD HAVE BEEN LEVIED IN THE ABSENCE OF AN
   32  EXEMPTION FROM REAL PROPERTY TAXATION PURSUANT TO SECTION  FOUR  HUNDRED
   33  SIXTY-SEVEN  OF  THE  REAL PROPERTY TAX LAW. IF TENANT-STOCKHOLDERS IN A
   34  COOPERATIVE HOUSING CORPORATION HAVE MET THE REQUIREMENTS OF SECTION TWO
   35  HUNDRED SIXTEEN OF THE INTERNAL REVENUE CODE BY WHICH THEY ARE ALLOWED A
   36  DEDUCTION FOR REAL ESTATE TAXES, THE AMOUNT OF TAXES  SO  ALLOWABLE,  OR
   37  WHICH  WOULD  BE  ALLOWABLE  IF THE TAXPAYER HAD FILED RETURNS ON A CASH
   38  BASIS, SHALL BE QUALIFYING REAL PROPERTY TAXES. IF A RESIDENCE IS  OWNED
   39  BY  TWO  OR  MORE INDIVIDUALS AS JOINT TENANTS OR TENANTS IN COMMON, AND
   40  ONE OR MORE THAN ONE INDIVIDUAL IS NOT A MEMBER OF THE HOUSEHOLD, QUALI-
   41  FYING REAL PROPERTY TAXES IS THAT PART OF SUCH TAXES  ON  THE  RESIDENCE
   42  WHICH  REFLECTS  THE  OWNERSHIP PERCENTAGE OF THE QUALIFIED TAXPAYER AND
   43  MEMBERS OF HIS OR HER HOUSEHOLD. IF A RESIDENCE IS AN INTEGRAL PART OF A
   44  LARGER UNIT, QUALIFYING REAL PROPERTY TAXES SHALL  BE  LIMITED  TO  THAT
   45  AMOUNT OF SUCH TAXES PAID AS MAY BE REASONABLY APPORTIONED TO SUCH RESI-
   46  DENCE.  IF  A  HOUSEHOLD OWNS AND OCCUPIES TWO OR MORE RESIDENCES DURING
   47  DIFFERENT PERIODS IN THE SAME TAXABLE  YEAR,  QUALIFYING  REAL  PROPERTY
   48  TAXES  SHALL  BE  THE SUM OF THE PRORATED QUALIFYING REAL PROPERTY TAXES
   49  ATTRIBUTABLE TO THE HOUSEHOLD DURING THE PERIODS SUCH HOUSEHOLD OCCUPIES
   50  EACH OF SUCH RESIDENCES. IF THE HOUSEHOLD OWNS AND OCCUPIES A  RESIDENCE
   51  FOR  PART OF THE TAXABLE YEAR AND RENTS A RESIDENCE FOR PART OF THE SAME
   52  TAXABLE YEAR, IT MAY INCLUDE THE PRORATION OF QUALIFYING  REAL  PROPERTY
   53  TAXES  ON  THE RESIDENCE OWNED.   PROVIDED, HOWEVER, FOR PURPOSES OF THE
   54  CREDIT ALLOWED UNDER THIS SUBSECTION, QUALIFYING REAL PROPERTY TAXES MAY
   55  BE INCLUDED BY A QUALIFIED TAXPAYER ONLY TO THE EXTENT THAT SUCH TAXPAY-
   56  ER OR THE SPOUSE OF SUCH TAXPAYER,  OCCUPYING  SUCH  RESIDENCE  FOR  ONE
       S. 6359--D                         185                        A. 8559--D

    1  HUNDRED EIGHTY-THREE DAYS OR MORE OF THE TAXABLE YEAR, OWNS OR HAS OWNED
    2  THE RESIDENCE AND PAID SUCH TAXES.
    3    (F)  "REAL  PROPERTY  TAX EQUIVALENT" MEANS FIFTEEN AND THREE-QUARTERS
    4  PERCENT OF THE ADJUSTED RENT ACTUALLY PAID IN  THE  TAXABLE  YEAR  BY  A
    5  HOUSEHOLD  SOLELY  FOR  THE RIGHT OF OCCUPANCY OF ITS NEW YORK RESIDENCE
    6  FOR THE TAXABLE YEAR. IF (I) A RESIDENCE IS RENTED TO TWO OR MORE  INDI-
    7  VIDUALS  AS  COTENANTS,  OR  SUCH  INDIVIDUALS SHARE IN THE PAYMENT OF A
    8  SINGLE RENT FOR THE RIGHT OF OCCUPANCY OF SUCH RESIDENCE, AND (II)  EACH
    9  OF SUCH INDIVIDUALS IS A MEMBER OF A DIFFERENT HOUSEHOLD, ONE OR MORE OF
   10  WHICH INDIVIDUALS SHARES SUCH RESIDENCE, REAL PROPERTY TAX EQUIVALENT IS
   11  THAT  PORTION OF FIFTEEN AND THREE-QUARTERS PERCENT OF THE ADJUSTED RENT
   12  PAID IN THE TAXABLE YEAR WHICH REFLECTS THAT PORTION OF THE RENT ATTRIB-
   13  UTABLE TO THE QUALIFIED TAXPAYER AND THE MEMBERS OF HIS  OR  HER  HOUSE-
   14  HOLD.
   15    (G)  "ADJUSTED RENT" MEANS RENTAL PAID FOR THE RIGHT OF OCCUPANCY OF A
   16  RESIDENCE, EXCLUDING CHARGES FOR HEAT, GAS, ELECTRICITY, FURNISHINGS AND
   17  BOARD.  WHERE CHARGES FOR HEAT, GAS, ELECTRICITY, FURNISHINGS  OR  BOARD
   18  ARE INCLUDED IN RENTAL BUT WHERE SUCH CHARGES AND THE AMOUNT THEREOF ARE
   19  NOT  SEPARATELY SET FORTH IN A WRITTEN RENTAL AGREEMENT, FOR PURPOSES OF
   20  DETERMINING ADJUSTED RENT THE QUALIFIED  TAXPAYER  SHALL  REDUCE  RENTAL
   21  PAID AS FOLLOWS:
   22    (I) FOR HEAT, OR HEAT AND GAS, DEDUCT SIX PERCENT OF RENTAL PAID.
   23    (II)  FOR  HEAT,  GAS  AND ELECTRICITY, DEDUCT EIGHT PERCENT OF RENTAL
   24  PAID.
   25    (III) FOR HEAT, GAS, ELECTRICITY AND FURNISHINGS, DEDUCT  TEN  PERCENT
   26  OF RENTAL PAID.
   27    (IV)  FOR HEAT, GAS, ELECTRICITY, FURNISHINGS AND BOARD, DEDUCT TWENTY
   28  PERCENT OF RENTAL PAID.
   29    IF THE COMMISSIONER DETERMINES THAT THE ADJUSTED  RENT  SHOWN  ON  THE
   30  RETURN IS EXCESSIVE, THE COMMISSIONER MAY REDUCE SUCH RENT, FOR PURPOSES
   31  OF  THE COMPUTATION OF THE CREDIT, TO AN AMOUNT SUBSTANTIALLY EQUIVALENT
   32  TO RENT FOR A COMPARABLE ACCOMMODATION.
   33    (2) A QUALIFIED TAXPAYER SHALL BE ALLOWED  A  CREDIT  AS  PROVIDED  IN
   34  PARAGRAPH  THREE  OF  THIS  SUBSECTION AGAINST THE TAXES IMPOSED BY THIS
   35  ARTICLE REDUCED BY THE CREDITS PERMITTED BY THIS ARTICLE. IF THE  CREDIT
   36  EXCEEDS  THE  TAX  AS  SO  REDUCED FOR SUCH YEAR UNDER THIS ARTICLE, THE
   37  EXCESS SHALL BE TREATED AS AN OVERPAYMENT, TO BE CREDITED  OR  REFUNDED,
   38  WITHOUT  INTEREST.  IF  A  QUALIFIED  TAXPAYER IS NOT REQUIRED TO FILE A
   39  RETURN PURSUANT TO SECTION SIX HUNDRED  FIFTY-ONE  OF  THIS  ARTICLE,  A
   40  QUALIFIED TAXPAYER MAY NEVERTHELESS RECEIVE THE FULL AMOUNT OF THE CRED-
   41  IT TO BE CREDITED OR REPAID AS AN OVERPAYMENT, WITHOUT INTEREST.
   42    (3)  DETERMINATION  OF  CREDIT.   FOR TAXABLE YEARS AFTER TWO THOUSAND
   43  THIRTEEN AND PRIOR TO TWO THOUSAND SIXTEEN, THE  AMOUNT  OF  THE  CREDIT
   44  ALLOWABLE UNDER THIS SUBSECTION SHALL BE DETERMINED AS FOLLOWS:
   45  IF HOUSEHOLD GROSS INCOME    EXCESS REAL PROPERTY    THE CREDIT AMOUNT IS
   46  FOR THE TAXABLE YEAR IS:     TAXES ARE THE EXCESS    THE FOLLOWING
   47                               OF REAL PROPERTY TAX    PERCENTAGE OF EXCESS
   48                               EQUIVALENT OR THE       PROPERTY TAXES:
   49                               EXCESS OF QUALIFYING
   50                               REAL PROPERTY TAXES
   51                               OVER THE FOLLOWING
   52                               PERCENTAGE OF
   53                               HOUSEHOLD GROSS
   54                               INCOME:
   55  LESS THAN $100,000                   4                    4.5
   56  $100,000 TO LESS THAN                5                    3.0
       S. 6359--D                         186                        A. 8559--D

    1  $150,000
    2  $150,000 TO LESS THAN                6                    1.5
    3  $200,000
    4    NOTWITHSTANDING  THE  FOREGOING  PROVISIONS, THE MAXIMUM CREDIT DETER-
    5  MINED UNDER THIS SUBPARAGRAPH MAY NOT EXCEED FIVE HUNDRED DOLLARS.
    6    (4) IF A QUALIFIED TAXPAYER OCCUPIES A RESIDENCE FOR A PERIOD OF  LESS
    7  THAN TWELVE MONTHS DURING THE TAXABLE YEAR OR OCCUPIES TWO OR MORE RESI-
    8  DENCES DURING DIFFERENT PERIODS IN SUCH TAXABLE YEAR, THE CREDIT ALLOWED
    9  PURSUANT  TO  THIS  SUBSECTION  SHALL  BE COMPUTED IN SUCH MANNER AS THE
   10  COMMISSIONER MAY, BY REGULATION, PRESCRIBE IN ORDER TO PROPERLY  REFLECT
   11  THE  CREDIT  OR  PORTION THEREOF ATTRIBUTABLE TO SUCH RESIDENCE OR RESI-
   12  DENCES AND SUCH PERIOD OR PERIODS.
   13    (5)  THE  COMMISSIONER  MAY  PRESCRIBE  THAT  THE  CREDIT  UNDER  THIS
   14  SUBSECTION  SHALL BE DETERMINED IN WHOLE OR IN PART BY THE USE OF TABLES
   15  PRESCRIBED BY SUCH COMMISSIONER. SUCH TABLES SHALL SET FORTH THE  CREDIT
   16  TO THE NEAREST DOLLAR.
   17    (6)  ONLY ONE CREDIT PER HOUSEHOLD AND PER QUALIFIED TAXPAYER SHALL BE
   18  ALLOWED PER TAXABLE YEAR UNDER THIS SUBSECTION. WHEN TWO OR MORE MEMBERS
   19  OF A HOUSEHOLD ARE ABLE TO  MEET  THE  QUALIFICATIONS  FOR  A  QUALIFIED
   20  TAXPAYER,  THE  CREDIT  SHALL  BE  EQUALLY DIVIDED BETWEEN OR AMONG SUCH
   21  INDIVIDUALS UNLESS SUCH INDIVIDUALS FILE WITH THE COMMISSIONER A WRITTEN
   22  AGREEMENT AMONG SUCH INDIVIDUALS SETTING FORTH A DIFFERENT DIVISION.
   23    (A) PROVIDED, HOWEVER, WHERE A JOINT INCOME TAX RETURN HAS BEEN  FILED
   24  PURSUANT  TO  THE  PROVISIONS  OF  SECTION SIX HUNDRED FIFTY-ONE OF THIS
   25  ARTICLE BY A QUALIFIED TAXPAYER AND HIS OR HER  SPOUSE  (OR  WHERE  BOTH
   26  SPOUSES  ARE  QUALIFIED TAXPAYERS AND HAVE FILED SUCH JOINT RETURN), THE
   27  CREDIT, OR THE PORTION OF THE CREDIT IF DIVIDED, TO  WHICH  THE  SPOUSES
   28  ARE  ENTITLED  SHALL  BE APPLIED AGAINST THE TAX OF BOTH SPOUSES AND ANY
   29  OVERPAYMENT SHALL BE MADE TO BOTH SPOUSES.
   30    (B) WHERE ANY RETURN REQUIRED TO BE FILED PURSUANT TO  THE  PROVISIONS
   31  OF  SECTION  SIX  HUNDRED FIFTY-ONE OF THIS ARTICLE IS COMBINED WITH ANY
   32  RETURN OF TAX IMPOSED PURSUANT TO THE AUTHORITY OF THIS CHAPTER  OR  ANY
   33  OTHER LAW IF SUCH TAX IS ADMINISTERED BY THE COMMISSIONER, THE CREDIT OR
   34  THE  PORTION OF THE CREDIT IF DIVIDED, ALLOWED TO THE QUALIFIED TAXPAYER
   35  MAY BE APPLIED BY THE COMMISSIONER TOWARD ANY LIABILITY FOR  THE  AFORE-
   36  MENTIONED TAXES.
   37    (7) NO CREDIT SHALL BE GRANTED UNDER THIS SUBSECTION:
   38    (A)  IF  HOUSEHOLD GROSS INCOME FOR THE TAXABLE YEAR EQUALS OR EXCEEDS
   39  TWO HUNDRED THOUSAND DOLLARS.
   40    (B) TO A PROPERTY OWNER UNLESS: (I) THE PROPERTY IS USED FOR  RESIDEN-
   41  TIAL  PURPOSES,  (II) NOT MORE THAN TWENTY PERCENT OF THE RENTAL INCOME,
   42  IF ANY, FROM THE PROPERTY IS FROM RENTAL FOR NONRESIDENTIAL PURPOSES AND
   43  (III) THE PROPERTY IS OCCUPIED AS A RESIDENCE IN WHOLE OR IN PART BY ONE
   44  OR MORE OF THE OWNERS OF THE PROPERTY.
   45    (C) TO AN INDIVIDUAL WITH RESPECT TO WHOM A DEDUCTION UNDER SUBSECTION
   46  (C) OF SECTION ONE HUNDRED FIFTY-ONE OF THE  INTERNAL  REVENUE  CODE  IS
   47  ALLOWABLE TO ANOTHER TAXPAYER FOR THE TAXABLE YEAR.
   48    (D)  WITH  RESPECT  TO  A  RESIDENCE THAT IS WHOLLY EXEMPTED FROM REAL
   49  PROPERTY TAXATION.
   50    (E) TO AN INDIVIDUAL WHO IS NOT A RESIDENT INDIVIDUAL OF A CITY, WITH-
   51  IN THE STATE, WITH A POPULATION OVER ONE MILLION, FOR THE ENTIRE TAXABLE
   52  YEAR.
   53    (8) THE RIGHT TO CLAIM A CREDIT OR THE PORTION OF A CREDIT, WHERE SUCH
   54  CREDIT HAS BEEN DIVIDED UNDER THIS SUBSECTION, SHALL BE PERSONAL TO  THE
   55  QUALIFIED  TAXPAYER  AND  SHALL  NOT  SURVIVE HIS OR HER DEATH, BUT SUCH
       S. 6359--D                         187                        A. 8559--D

    1  RIGHT MAY BE EXERCISED ON BEHALF OF A CLAIMANT BY HIS OR HER LEGAL GUAR-
    2  DIAN OR ATTORNEY IN FACT DURING HIS OR HER LIFETIME.
    3    (9)  RETURNS. IF A QUALIFIED TAXPAYER IS NOT REQUIRED TO FILE A RETURN
    4  PURSUANT TO SECTION SIX HUNDRED FIFTY-ONE OF THIS ARTICLE, A CLAIM FOR A
    5  CREDIT MAY BE TAKEN ON A RETURN FILED WITH THE COMMISSIONER WITHIN THREE
    6  YEARS FROM THE TIME IT WOULD HAVE BEEN REQUIRED THAT A RETURN  BE  FILED
    7  PURSUANT  TO  SUCH SECTION HAD THE QUALIFIED TAXPAYER HAD A TAXABLE YEAR
    8  ENDING ON DECEMBER THIRTY-FIRST.  RETURNS UNDER THIS PARAGRAPH SHALL  BE
    9  IN  SUCH  FORM  AS  SHALL BE PRESCRIBED BY THE COMMISSIONER, WHICH SHALL
   10  MAKE AVAILABLE SUCH FORMS AND INSTRUCTIONS FOR FILING SUCH RETURNS.
   11    (10) PROOF OF CLAIM. THE COMMISSIONER MAY REQUIRE A QUALIFIED TAXPAYER
   12  TO FURNISH THE FOLLOWING INFORMATION IN SUPPORT OF HIS CLAIM FOR  CREDIT
   13  UNDER  THIS  SUBSECTION:  HOUSEHOLD  GROSS  INCOME,  REAL PROPERTY TAXES
   14  LEVIED OR THAT WOULD HAVE BEEN LEVIED IN THE  ABSENCE  OF  AN  EXEMPTION
   15  FROM  REAL  PROPERTY TAX PURSUANT TO SECTION FOUR HUNDRED SIXTY-SEVEN OF
   16  THE REAL PROPERTY TAX LAW, THE NAMES OF MEMBERS  OF  THE  HOUSEHOLD  AND
   17  OTHER  QUALIFYING TAXPAYERS OCCUPYING THE SAME RESIDENCE AND THEIR IDEN-
   18  TIFYING NUMBERS  INCLUDING  SOCIAL  SECURITY  NUMBERS,  HOUSEHOLD  GROSS
   19  INCOME,  SIZE  AND NATURE OF PROPERTY CLAIMED AS RESIDENCE AND ALL OTHER
   20  INFORMATION WHICH MAY BE REQUIRED BY THE COMMISSIONER TO  DETERMINE  THE
   21  CREDIT.
   22    (11)  ADMINISTRATION.  THE  PROVISIONS  OF THIS ARTICLE, INCLUDING THE
   23  PROVISIONS OF SECTIONS SIX HUNDRED FIFTY-THREE, SIX HUNDRED FIFTY-EIGHT,
   24  AND SIX HUNDRED FIFTY-NINE OF THIS ARTICLE AND THE  PROVISIONS  OF  PART
   25  SIX  OF THIS ARTICLE RELATING TO PROCEDURE AND ADMINISTRATION, INCLUDING
   26  THE JUDICIAL REVIEW OF THE DECISIONS OF THE COMMISSIONER, EXCEPT SO MUCH
   27  OF SECTION SIX HUNDRED EIGHTY-SEVEN OF  THIS  ARTICLE  WHICH  PERMITS  A
   28  CLAIM  FOR CREDIT OR REFUND TO BE FILED AFTER THE PERIOD PROVIDED FOR IN
   29  PARAGRAPH NINE OF  THIS  SUBSECTION  AND  EXCEPT  SECTIONS  SIX  HUNDRED
   30  FIFTY-SEVEN, SIX HUNDRED EIGHTY-EIGHT AND SIX HUNDRED NINETY-SIX OF THIS
   31  ARTICLE,  SHALL  APPLY  TO THE PROVISIONS OF THIS SUBSECTION IN THE SAME
   32  MANNER AND WITH THE SAME FORCE AND EFFECT AS IF THE  LANGUAGE  OF  THOSE
   33  PROVISIONS  HAD  BEEN  INCORPORATED IN FULL INTO THIS SUBSECTION AND HAD
   34  EXPRESSLY REFERRED TO THE CREDIT ALLOWED OR  RETURNS  FILED  UNDER  THIS
   35  SUBSECTION,  EXCEPT  TO  THE  EXTENT  THAT  ANY SUCH PROVISION IS EITHER
   36  INCONSISTENT WITH A PROVISION OF THIS SUBSECTION OR IS NOT  RELEVANT  TO
   37  THIS  SUBSECTION.  AS  USED  IN  SUCH  SECTIONS  AND SUCH PART, THE TERM
   38  "TAXPAYER" SHALL INCLUDE A QUALIFIED TAXPAYER UNDER THIS SUBSECTION AND,
   39  NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (E) OF SECTION SIX  HUNDRED
   40  NINETY-SEVEN  OF  THIS ARTICLE, WHERE A QUALIFIED TAXPAYER HAS PROTESTED
   41  THE DENIAL OF A CLAIM FOR CREDIT UNDER THIS SUBSECTION AND THE  TIME  TO
   42  FILE  A  PETITION  FOR REDETERMINATION OF A DEFICIENCY OR FOR REFUND HAS
   43  NOT EXPIRED, HE SHALL, SUBJECT TO SUCH CONDITIONS AS MAY BE SET  BY  THE
   44  COMMISSIONER,  RECEIVE  SUCH  INFORMATION  (A) WHICH IS CONTAINED IN ANY
   45  RETURN FILED UNDER THIS ARTICLE BY A MEMBER OF HIS OR HER HOUSEHOLD  FOR
   46  THE  TAXABLE  YEAR  FOR  WHICH  THE CREDIT IS CLAIMED, AND (B) WHICH THE
   47  COMMISSIONER FINDS IS RELEVANT AND MATERIAL TO THE ISSUE OF WHETHER SUCH
   48  CLAIM WAS PROPERLY DENIED.
   49    (12) NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTICLE,  THE  CREDIT
   50  ALLOWED  UNDER  THIS  SUBSECTION  SHALL BE DETERMINED AFTER THE DETERMI-
   51  NATION  AND  APPLICATION  OF  ANY  OTHER  CREDITS  PERMITTED  UNDER  THE
   52  PROVISIONS OF THIS ARTICLE.
   53    (13)  THE  COMMISSIONER  SHALL PREPARE A WRITTEN REPORT AFTER DECEMBER
   54  THIRTY-FIRST OF EACH CALENDAR  YEAR,  WHICH  SHALL  CONTAIN  STATISTICAL
   55  INFORMATION  REGARDING THE CREDITS GRANTED ON OR BEFORE SUCH DATES UNDER
   56  THIS SUBSECTION DURING SUCH CALENDAR YEAR. COPIES OF THE REPORT SHALL BE
       S. 6359--D                         188                        A. 8559--D

    1  SUBMITTED BY THE COMMISSIONER TO THE GOVERNOR, THE  TEMPORARY  PRESIDENT
    2  OF  THE  SENATE, THE SPEAKER OF THE ASSEMBLY, THE CHAIRMAN OF THE SENATE
    3  FINANCE COMMITTEE AND THE  CHAIRMAN  OF  THE  ASSEMBLY  WAYS  AND  MEANS
    4  COMMITTEE  WITHIN  FORTY-FIVE DAYS OF DECEMBER THIRTY-FIRST. SUCH REPORT
    5  SHALL CONTAIN, BUT NEED NOT BE LIMITED TO, THE NUMBER OF CREDITS AND THE
    6  AVERAGE AMOUNT OF SUCH CREDITS ALLOWED; AND  OF  THOSE,  THE  NUMBER  OF
    7  CREDITS  AND  THE  AVERAGE  AMOUNT  OF SUCH CREDITS ALLOWED TO QUALIFIED
    8  TAXPAYERS IN EACH COUNTY; AND OF THOSE, THE NUMBER OF  CREDITS  AND  THE
    9  AVERAGE  AMOUNT  OF  SUCH  CREDITS  ALLOWED TO QUALIFIED TAXPAYERS WHOSE
   10  HOUSEHOLD GROSS INCOME FALLS WITHIN EACH OF THE HOUSEHOLD  GROSS  INCOME
   11  RANGES SET FORTH IN PARAGRAPH THREE OF THIS SUBSECTION.
   12    S 3. This act shall take effect immediately and shall apply to taxable
   13  years  beginning  on  or  after  January 1, 2014 and shall expire and be
   14  deemed repealed January 1, 2016.

   15                                   PART L

   16                            Intentionally Omitted

   17                                   PART M

   18    Section 1. Paragraphs 2, 4 and 5 of subsection (vv) of section 606  of
   19  the  tax law, as added by section 1 of part CC of chapter 59 of the laws
   20  of 2013, are amended to read as follows:
   21    2. To be eligible for the credit, the taxpayer  (or  taxpayers  filing
   22  joint  returns)  on the personal income tax return filed for the taxable
   23  year [two years prior], must  [have]  (a)  [been]  BE  a  resident,  (b)
   24  [claimed] CLAIM one or more dependent children who were under the age of
   25  seventeen  on  the last day of the taxable year, (c) [had] HAVE New York
   26  adjusted gross income of at least forty thousand dollars but no  greater
   27  than  three hundred thousand dollars, and (d) [had] HAVE a tax liability
   28  as determined under paragraph three of this subsection of  greater  than
   29  or equal to zero.
   30    4.  [For  each  year  this  credit  is  allowed,  on or before October
   31  fifteenth of such year, the commissioner shall determine the  taxpayer's
   32  eligibility  for  this credit utilizing the information available to the
   33  commissioner on the taxpayer's personal income tax return filed for  the
   34  taxable  year two years prior to the taxable year in which the credit is
   35  allowed. For those taxpayers whom the commissioner has determined eligi-
   36  ble for this credit, the commissioner shall advance a payment  of  three
   37  hundred  fifty  dollars. When a taxpayer files his or her return for the
   38  taxable year, such taxpayer shall properly reconcile that payment on his
   39  or her return.
   40    5.] If the amount of the credit allowed under  this  subsection  shall
   41  exceed  the  taxpayer's  tax  for  the taxable year, the excess shall be
   42  treated as an overpayment of tax to be credited or refunded  in  accord-
   43  ance with the provisions of SECTION six hundred eighty-six of this arti-
   44  cle, provided, however, that no interest shall be paid thereon.
   45    S 2. This act shall take effect immediately and apply to taxable years
   46  beginning on or after January 1, 2015.

   47                                   PART N

   48                            Intentionally Omitted
       S. 6359--D                         189                        A. 8559--D

    1                                   PART O

    2    Section  1.  Paragraph  1  of subdivision (a) of section 28 of the tax
    3  law, as amended by section 1 of part I of chapter  59  of  the  laws  of
    4  2012, is amended to read as follows:
    5    (1)  A taxpayer which is a qualified commercial production company, or
    6  which is a sole proprietor of a qualified commercial production company,
    7  and which is subject to tax under article nine-A or twenty-two  of  this
    8  chapter,  shall  be  allowed  a credit against such tax, pursuant to the
    9  provisions referenced in subdivision (c) of this section, to be computed
   10  as provided in this section. Provided, however, to be eligible for  such
   11  credit, at least seventy-five percent of the production costs (excluding
   12  post  production  costs)  paid or incurred directly and predominantly in
   13  the actual filming or recording of  the  qualified  commercial  must  be
   14  costs  incurred  in  New  York state. The tax credit allowed pursuant to
   15  this section shall apply  to  taxable  years  beginning  before  January
   16  first, two thousand [fifteen] SEVENTEEN.
   17    S  2.  Subparagraph (iii) of paragraph 2 of subdivision (a) of section
   18  28 of the tax law, as amended by section 2 of part I of  chapter  59  of
   19  the laws of 2012, is amended to read as follows:
   20    (iii)  The  state  annually  will  disburse three million of the total
   21  seven million in tax credits to all eligible  production  companies  who
   22  film or record a qualified commercial outside of the metropolitan commu-
   23  ter  transportation district as defined in section twelve hundred sixty-
   24  two of the public authorities law; provided,  however,  that  if,  after
   25  JULY  THIRTY-FIRST  the  state  reviews  all  applications from eligible
   26  production companies who film or record a qualified  commercial  outside
   27  of  the  metropolitan  commuter  district  for a given year, tax credits
   28  remain unallocated under  this  subparagraph,  those  credits  shall  be
   29  allotted  to the credits set forth in subparagraph (i) of this paragraph
   30  for use consistent with the purposes of such subparagraph. The amount of
   31  the credit shall be the product (or pro rata share of  the  product,  in
   32  the  case of a member of a partnership) of five percent of the qualified
   33  production costs paid or incurred  in  the  production  of  a  qualified
   34  commercial,  provided  that  the  qualified  production  costs  paid  or
   35  incurred are attributable  to  the  use  of  tangible  property  or  the
   36  performance of services within the state in the production of such qual-
   37  ified  commercial.  To  be  eligible for said credit the total qualified
   38  production costs of a qualified production company must be greater  than
   39  [two]  ONE hundred thousand dollars in the aggregate during the calendar
   40  year. Such credit will be applied to qualified production costs  exceed-
   41  ing [two] ONE hundred thousand dollars in a calendar year.
   42    S  3.   Paragraph (a) of subdivision 38 of section 210 of the tax law,
   43  as amended by section 3 of part I of chapter 59 of the laws of 2012,  is
   44  amended to read as follows:
   45    (a)  Allowance  of  credit.  A  taxpayer  that is eligible pursuant to
   46  provisions of section twenty-eight of this chapter shall  be  allowed  a
   47  credit  to  be  computed  as  provided  in  such section against the tax
   48  imposed by this article. The tax credit allowed pursuant to this section
   49  shall apply to taxable years beginning before January first,  two  thou-
   50  sand [fifteen] SEVENTEEN.
   51    S  4. Paragraph 1 of subsection (jj) of section 606 of the tax law, as
   52  amended by section 4 of part I of chapter 59 of the  laws  of  2012,  is
   53  amended to read as follows:
   54    (1)  Allowance  of credit. A taxpayer that is eligible pursuant to the
   55  provisions of section twenty-eight of this chapter shall  be  allowed  a
       S. 6359--D                         190                        A. 8559--D

    1  credit  to  be  computed  as  provided  in  such section against the tax
    2  imposed by this article. The tax credit allowed pursuant to this section
    3  shall apply to taxable years beginning before January first,  two  thou-
    4  sand [fifteen] SEVENTEEN.
    5    S 5. This act shall take effect immediately.

    6                                   PART P

    7    Section  1.  Subdivision 4 of section 22 of the public housing law, as
    8  amended by section 2 of part J of chapter 59 of the  laws  of  2012,  is
    9  amended to read as follows:
   10    4.  Statewide  limitation. The aggregate dollar amount of credit which
   11  the commissioner may allocate to  eligible  low-income  buildings  under
   12  this article shall be [forty-eight] FIFTY-SIX million dollars. The limi-
   13  tation  provided  by  this subdivision applies only to allocation of the
   14  aggregate dollar amount of credit by  the  commissioner,  and  does  not
   15  apply to allowance to a taxpayer of the credit with respect to an eligi-
   16  ble low-income building for each year of the credit period.
   17    S 2. Subdivision 4 of section 22 of the public housing law, as amended
   18  by section one of this act, is amended to read as follows:
   19    4.  Statewide  limitation. The aggregate dollar amount of credit which
   20  the commissioner may allocate to  eligible  low-income  buildings  under
   21  this  article shall be [fifty-six] SIXTY-FOUR million dollars. The limi-
   22  tation provided by this subdivision applies only to  allocation  of  the
   23  aggregate  dollar  amount  of  credit  by the commissioner, and does not
   24  apply to allowance to a taxpayer of the credit with respect to an eligi-
   25  ble low-income building for each year of the credit period.
   26    S 3. This act shall take effect immediately; provided,  however,  that
   27  section two of this act shall take effect April 1, 2015.

   28                                   PART Q

   29                            Intentionally Omitted

   30                                   PART R

   31    Section  1.    Section  210  of the tax law is amended by adding a new
   32  subdivision 48 to read as follows:
   33    48. REAL PROPERTY TAX CREDIT FOR MANUFACTURERS. (A)  A  QUALIFIED  NEW
   34  YORK  MANUFACTURER,  AS DEFINED IN SUBPARAGRAPH (VI) OF PARAGRAPH (A) OF
   35  SUBDIVISION ONE OF THIS SECTION, WILL BE ALLOWED A CREDIT EQUAL TO TWEN-
   36  TY PERCENT OF THE REAL PROPERTY TAX IT PAID DURING THE TAXABLE YEAR  FOR
   37  REAL  PROPERTY  OWNED BY SUCH MANUFACTURER IN NEW YORK WHICH WAS PRINCI-
   38  PALLY USED DURING THE TAXABLE YEAR FOR MANUFACTURING TO THE  EXTENT  NOT
   39  DEDUCTED  IN  DETERMINING  ENTIRE  NET  INCOME.  THIS CREDIT WILL NOT BE
   40  ALLOWED IF THE REAL PROPERTY TAXES THAT ARE THE BASIS  FOR  THIS  CREDIT
   41  ARE INCLUDED IN THE CALCULATION OF ANOTHER CREDIT CLAIMED BY THE TAXPAY-
   42  ER.
   43    (B)  (1)  FOR PURPOSES OF THIS SUBDIVISION, THE TERM REAL PROPERTY TAX
   44  MEANS A CHARGE IMPOSED UPON REAL PROPERTY BY OR ON BEHALF OF  A  COUNTY,
   45  CITY,  TOWN, VILLAGE OR SCHOOL DISTRICT FOR MUNICIPAL OR SCHOOL DISTRICT
   46  PURPOSES, PROVIDED THAT THE CHARGE IS  LEVIED  FOR  THE  GENERAL  PUBLIC
   47  WELFARE  BY  THE  PROPER  TAXING  AUTHORITIES AT A LIKE RATE AGAINST ALL
   48  PROPERTY OVER WHICH SUCH AUTHORITIES  HAVE  JURISDICTION,  AND  PROVIDED
   49  THAT  WHERE TAXES ARE LEVIED PURSUANT TO ARTICLE EIGHTEEN OR NINETEEN OF
       S. 6359--D                         191                        A. 8559--D

    1  THE REAL PROPERTY TAX LAW, THE PROPERTY MUST HAVE BEEN TAXED AT THE RATE
    2  DETERMINED FOR THE CLASS IN WHICH IT IS CONTAINED, AS PROVIDED  BY  SUCH
    3  ARTICLE  EIGHTEEN  OR  NINETEEN,  WHICHEVER IS APPLICABLE. THE TERM REAL
    4  PROPERTY TAX DOES NOT INCLUDE A CHARGE FOR LOCAL BENEFITS, INCLUDING ANY
    5  PORTION OF THAT CHARGE THAT IS PROPERLY ALLOCATED TO THE COSTS ATTRIBUT-
    6  ABLE  TO  MAINTENANCE  OR INTEREST, WHEN (I) THE PROPERTY SUBJECT TO THE
    7  CHARGE IS LIMITED TO THE PROPERTY THAT BENEFITS FROM THE CHARGE, OR (II)
    8  THE AMOUNT OF THE CHARGE IS DETERMINED BY THE BENEFIT  TO  THE  PROPERTY
    9  ASSESSED,  OR  (III)  THE  IMPROVEMENT  FOR WHICH THE CHARGE IS ASSESSED
   10  TENDS TO INCREASE THE PROPERTY VALUE.
   11    (2) IN ADDITION, THE TERM REAL PROPERTY TAX INCLUDES TAXES PAID BY THE
   12  TAXPAYER UPON REAL PROPERTY PRINCIPALLY USED DURING THE TAXABLE YEAR  BY
   13  THE  TAXPAYER IN MANUFACTURING WHERE THE TAXPAYER LEASES SUCH REAL PROP-
   14  ERTY FROM AN UNRELATED THIRD  PARTY  IF  THE  FOLLOWING  CONDITIONS  ARE
   15  SATISFIED:  (I)  THE TAX MUST BE PAID BY THE TAXPAYER AS LESSEE PURSUANT
   16  TO EXPLICIT REQUIREMENTS IN A WRITTEN LEASE, AND (II)  THE  TAXPAYER  AS
   17  LESSEE  HAS  PAID  SUCH  TAXES  DIRECTLY TO THE TAXING AUTHORITY AND HAS
   18  RECEIVED A WRITTEN RECEIPT FOR PAYMENT OF TAXES FROM THE TAXING AUTHORI-
   19  TY. IN THE CASE OF A COMBINED GROUP THAT  CONSTITUTES  A  QUALIFIED  NEW
   20  YORK  MANUFACTURER,  THE CONDITIONS IN THE PRECEDING SENTENCE ARE SATIS-
   21  FIED IF ONE CORPORATION IN THE COMBINED GROUP IS THE LESSEE AND  ANOTHER
   22  CORPORATION  IN  THE  COMBINED  GROUP  MAKES  THE PAYMENTS TO THE TAXING
   23  AUTHORITY.
   24    (3) THE TERM REAL PROPERTY TAX DOES NOT INCLUDE A PAYMENT MADE BY  THE
   25  TAXPAYER  IN  CONNECTION  WITH  AN  AGREEMENT FOR THE PAYMENT IN LIEU OF
   26  TAXES ON REAL PROPERTY, WHETHER SUCH PROPERTY IS OWNED OR LEASED BY  THE
   27  TAXPAYER.
   28    (4)  THE  REAL PROPERTY TAXES MUST BE PAID BY THE TAXPAYER IN THE YEAR
   29  SUCH TAXES BECOME A LIEN ON THE REAL PROPERTY.
   30    (C) CREDIT RECAPTURE. WHERE A QUALIFIED NEW YORK  MANUFACTURER'S  REAL
   31  PROPERTY  TAXES  WHICH  WERE  THE  BASIS FOR THE ALLOWANCE OF THE CREDIT
   32  PROVIDED FOR UNDER THIS SUBDIVISION ARE SUBSEQUENTLY REDUCED AS A RESULT
   33  OF A FINAL ORDER IN ANY PROCEEDING UNDER ARTICLE SEVEN OF THE REAL PROP-
   34  ERTY TAX LAW OR OTHER PROVISION OF LAW, THE TAXPAYER SHALL ADD BACK,  IN
   35  THE  TAXABLE YEAR IN WHICH SUCH FINAL ORDER IS ISSUED, THE EXCESS OF (1)
   36  THE AMOUNT OF CREDIT ORIGINALLY ALLOWED FOR A TAXABLE YEAR OVER (2)  THE
   37  AMOUNT  OF CREDIT DETERMINED BASED UPON THE REDUCED REAL PROPERTY TAXES.
   38  IF SUCH FINAL ORDER REDUCES REAL PROPERTY TAXES FOR MORE THAN ONE  YEAR,
   39  THE  TAXPAYER  MUST DETERMINE HOW MUCH OF SUCH REDUCTION IS ATTRIBUTABLE
   40  TO EACH YEAR COVERED BY SUCH FINAL ORDER AND  CALCULATE  THE  AMOUNT  OF
   41  CREDIT  WHICH  IS REQUIRED BY THIS SUBDIVISION TO BE RECAPTURED FOR EACH
   42  YEAR BASED ON SUCH REDUCTION.
   43    (D) THE CREDIT ALLOWED UNDER THIS SUBDIVISION  FOR  ANY  TAXABLE  YEAR
   44  SHALL  NOT  REDUCE  THE  TAX  DUE FOR SUCH YEAR TO LESS THAN TWENTY-FIVE
   45  DOLLARS.
   46    S 2. Paragraph (b) of subdivision 9 of section 208 of the tax  law  is
   47  amended by adding a new subparagraph 21 to read as follows:
   48    (21)  THE  AMOUNT  OF ANY FEDERAL DEDUCTION FOR REAL PROPERTY TAXES TO
   49  THE EXTENT SUCH TAXES ARE USED AS THE BASIS OF THE  CALCULATION  OF  THE
   50  REAL  PROPERTY  TAX  CREDIT  FOR MANUFACTURERS ALLOWED UNDER SUBDIVISION
   51  FORTY-EIGHT OF SECTION TWO HUNDRED TEN OF THIS ARTICLE.
   52    S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
   53  of  the  tax  law is amended by adding a new clause (xxxviii) to read as
   54  follows:

   55  (XXXVIII) REAL PROPERTY TAX           AMOUNT OF CREDIT UNDER
       S. 6359--D                         192                        A. 8559--D

    1  CREDIT FOR MANUFACTURERS UNDER        SUBDIVISION FORTY-EIGHT OF
    2  SUBSECTION (XX)                       SECTION TWO HUNDRED TEN

    3    S  4.  Subsections  (yy)  and  (zz)  of section 606 of the tax law, as
    4  relettered by section 5 of part H of chapter 1 of the laws of 2003,  are
    5  relettered  subsections  (yyy)  and  (zzz)  and a new subsection (xx) is
    6  added to read as follows:
    7    (XX) REAL PROPERTY TAX CREDIT FOR MANUFACTURERS. (1) A  QUALIFIED  NEW
    8  YORK  MANUFACTURER  WILL  BE ALLOWED A CREDIT EQUAL TO TWENTY PERCENT OF
    9  THE REAL PROPERTY TAX IT PAID DURING THE TAXABLE YEAR FOR REAL  PROPERTY
   10  OWNED BY SUCH MANUFACTURER IN NEW YORK WHICH WAS PRINCIPALLY USED DURING
   11  THE TAXABLE YEAR FOR MANUFACTURING TO THE EXTENT NOT DEDUCTED IN COMPUT-
   12  ING  FEDERAL  ADJUSTED  GROSS INCOME. THIS CREDIT WILL NOT BE ALLOWED IF
   13  THE REAL PROPERTY TAXES THAT ARE THE BASIS FOR THIS CREDIT ARE  INCLUDED
   14  IN THE CALCULATION OF ANOTHER CREDIT CLAIMED BY THE TAXPAYER.
   15    (2)(A)  THE  TERM QUALIFIED NEW YORK MANUFACTURER HAS THE SAME MEANING
   16  AS UNDER SUBPARAGRAPH (VI)  OF  PARAGRAPH  (A)  OF  SUBDIVISION  ONE  OF
   17  SECTION TWO HUNDRED TEN OF THIS CHAPTER.
   18    (B)  (I)  THE  TERM REAL PROPERTY TAX MEANS A CHARGE IMPOSED UPON REAL
   19  PROPERTY BY OR ON BEHALF OF A COUNTY,  CITY,  TOWN,  VILLAGE  OR  SCHOOL
   20  DISTRICT  FOR  MUNICIPAL  OR SCHOOL DISTRICT PURPOSES, PROVIDED THAT THE
   21  CHARGE IS LEVIED FOR THE GENERAL PUBLIC WELFARE  BY  THE  PROPER  TAXING
   22  AUTHORITIES AT A LIKE RATE AGAINST ALL PROPERTY OVER WHICH SUCH AUTHORI-
   23  TIES  HAVE JURISDICTION, AND PROVIDED THAT WHERE TAXES ARE LEVIED PURSU-
   24  ANT TO ARTICLE EIGHTEEN OR NINETEEN OF THE REAL PROPERTY  TAX  LAW,  THE
   25  PROPERTY  MUST  HAVE  BEEN TAXED AT THE RATE DETERMINED FOR THE CLASS IN
   26  WHICH IT IS CONTAINED, AS PROVIDED BY SUCH ARTICLE EIGHTEEN OR NINETEEN,
   27  WHICHEVER IS APPLICABLE. THE TERM REAL PROPERTY TAX DOES NOT  INCLUDE  A
   28  CHARGE  FOR LOCAL BENEFITS, INCLUDING ANY PORTION OF THAT CHARGE THAT IS
   29  PROPERLY ALLOCATED TO THE COSTS ATTRIBUTABLE TO MAINTENANCE OR INTEREST,
   30  WHEN (I) THE PROPERTY SUBJECT TO THE CHARGE IS LIMITED TO  THE  PROPERTY
   31  THAT  BENEFITS  FROM  THE  CHARGE,  OR  (II) THE AMOUNT OF THE CHARGE IS
   32  DETERMINED BY THE  BENEFIT  TO  THE  PROPERTY  ASSESSED,  OR  (III)  THE
   33  IMPROVEMENT FOR WHICH THE CHARGE IS ASSESSED TENDS TO INCREASE THE PROP-
   34  ERTY VALUE.
   35    (II)  IN  ADDITION,  THE TERM REAL PROPERTY TAX INCLUDES TAXES PAID BY
   36  THE TAXPAYER UPON REAL PROPERTY PRINCIPALLY USED DURING THE TAXABLE YEAR
   37  BY THE TAXPAYER IN MANUFACTURING WHERE THE  TAXPAYER  LEASES  SUCH  REAL
   38  PROPERTY  FROM  AN UNRELATED THIRD PARTY IF THE FOLLOWING CONDITIONS ARE
   39  SATISFIED: (I) THE TAX MUST BE PAID BY THE TAXPAYER AS  LESSEE  PURSUANT
   40  TO  EXPLICIT  REQUIREMENTS  IN A WRITTEN LEASE, AND (II) THE TAXPAYER AS
   41  LESSEE HAS PAID SUCH TAXES DIRECTLY TO  THE  TAXING  AUTHORITY  AND  HAS
   42  RECEIVED A WRITTEN RECEIPT FOR PAYMENT OF TAXES FROM THE TAXING AUTHORI-
   43  TY.  IN  THE  CASE  OF A COMBINED GROUP THAT CONSTITUTES A QUALIFIED NEW
   44  YORK MANUFACTURER, THE CONDITIONS IN THE PRECEDING SENTENCE  ARE  SATIS-
   45  FIED  IF ONE CORPORATION IN THE COMBINED GROUP IS THE LESSEE AND ANOTHER
   46  CORPORATION IN THE COMBINED GROUP  MAKES  THE  PAYMENTS  TO  THE  TAXING
   47  AUTHORITY.
   48    (III)  THE  TERM  REAL PROPERTY TAX DOES NOT INCLUDE A PAYMENT MADE BY
   49  THE TAXPAYER IN CONNECTION WITH AN AGREEMENT FOR THE PAYMENT IN LIEU  OF
   50  TAXES  ON REAL PROPERTY, WHETHER SUCH PROPERTY IS OWNED OR LEASED BY THE
   51  TAXPAYER.
   52    (IV) THE REAL PROPERTY TAXES MUST BE PAID BY THE TAXPAYER IN THE  YEAR
   53  SUCH TAXES BECOME A LIEN ON THE REAL PROPERTY.
   54    (3)  CREDIT  RECAPTURE. WHERE A QUALIFIED NEW YORK MANUFACTURER'S REAL
   55  PROPERTY TAXES WHICH WERE THE BASIS FOR  THE  ALLOWANCE  OF  THE  CREDIT
       S. 6359--D                         193                        A. 8559--D

    1  PROVIDED FOR UNDER THIS SUBDIVISION ARE SUBSEQUENTLY REDUCED AS A RESULT
    2  OF A FINAL ORDER IN ANY PROCEEDING UNDER ARTICLE SEVEN OF THE REAL PROP-
    3  ERTY  TAX LAW OR OTHER PROVISION OF LAW, THE TAXPAYER SHALL ADD BACK, IN
    4  THE  TAXABLE YEAR IN WHICH SUCH FINAL ORDER IS ISSUED, THE EXCESS OF (I)
    5  THE AMOUNT OF CREDIT ORIGINALLY ALLOWED FOR A TAXABLE YEAR OVER (II) THE
    6  AMOUNT OF CREDIT DETERMINED BASED UPON THE REDUCED REAL PROPERTY  TAXES.
    7  IF  SUCH FINAL ORDER REDUCES REAL PROPERTY TAXES FOR MORE THAN ONE YEAR,
    8  THE TAXPAYER MUST DETERMINE HOW MUCH OF SUCH REDUCTION  IS  ATTRIBUTABLE
    9  TO  EACH  YEAR  COVERED  BY SUCH FINAL ORDER AND CALCULATE THE AMOUNT OF
   10  CREDIT WHICH IS REQUIRED BY THIS SUBDIVISION TO BE RECAPTURED  FOR  EACH
   11  YEAR BASED ON SUCH REDUCTION.
   12    (4)  IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY
   13  TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH YEAR, THE  EXCESS  WILL
   14  BE  TREATED  AS  AN OVERPAYMENT TO BE CREDITED OR REFUNDED IN ACCORDANCE
   15  WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF  THIS  ARTICLE,
   16  PROVIDED HOWEVER, NO INTEREST WILL BE PAID THEREON.
   17    S  4-a.  Subsection  (b)  of  section 612 of the tax law is amended by
   18  adding a new paragraph 40 to read as follows:
   19    (40) THE AMOUNT OF ANY FEDERAL DEDUCTION FOR REAL  PROPERTY  TAXES  TO
   20  THE  EXTENT  SUCH  TAXES ARE USED AS THE BASIS OF THE CALCULATION OF THE
   21  REAL PROPERTY TAX CREDIT FOR MANUFACTURERS ALLOWED UNDER SUBSECTION (XX)
   22  OF SECTION SIX HUNDRED SIX OF THIS ARTICLE.
   23    S 5. Subparagraphs (vi) and (vii) of paragraph (a) of subdivision 1 of
   24  section 210 of the tax law, subparagraph (vi) as amended by section 1 of
   25  part C of chapter 56 of the laws of 2011 and subparagraph (vii) as added
   26  by section 1 of part Z of chapter 59 of the laws of 2013, are amended to
   27  read as follows:
   28    (vi) for taxable years beginning on or  after  January  [thirty-first]
   29  FIRST,  two  thousand  [seven]  FOURTEEN,  the amount prescribed by this
   30  paragraph for a taxpayer which is a  qualified  New  York  manufacturer,
   31  shall  be  computed at the rate of [six and one-half (6.5)] ZERO percent
   32  of the taxpayer's entire net income base. For taxable years beginning on
   33  or after January first, two thousand twelve and  before  January  first,
   34  two  thousand  fifteen,  the  amount  prescribed by this paragraph for a
   35  taxpayer which is an eligible qualified New York manufacturer  shall  be
   36  computed  at  the  rate  of  three and one-quarter (3.25) percent of the
   37  taxpayer's entire net income base.  The term "manufacturer" shall mean a
   38  taxpayer which during the taxable year is  principally  engaged  in  the
   39  production  of goods by manufacturing, processing, assembling, refining,
   40  mining, extracting, farming,  agriculture,  horticulture,  floriculture,
   41  viticulture  or commercial fishing. However, the generation and distrib-
   42  ution  of  electricity,  the  distribution  of  natural  gas,  and   the
   43  production  of steam associated with the generation of electricity shall
   44  not be qualifying activities for a manufacturer under this subparagraph.
   45  Moreover, the combined group shall be considered  a  "manufacturer"  for
   46  purposes  of  this  subparagraph  only  if the combined group during the
   47  taxable year is principally engaged in the activities set forth in  this
   48  paragraph,  or  any  combination thereof. A taxpayer or a combined group
   49  shall be "principally engaged" in activities described above if,  during
   50  the  taxable  year, more than fifty percent of the gross receipts of the
   51  taxpayer or combined group, respectively, are derived from receipts from
   52  the sale of goods produced by such activities. In computing  a  combined
   53  group's  gross  receipts, intercorporate receipts shall be eliminated. A
   54  "qualified New York manufacturer" is a manufacturer which  has  property
   55  in  New  York  which  is  described in clause (A) of subparagraph (i) of
   56  paragraph (b) of subdivision twelve of this section and either  (I)  the
       S. 6359--D                         194                        A. 8559--D

    1  adjusted  basis  of such property for federal income tax purposes at the
    2  close of the taxable year is at least one million dollars or (II) all of
    3  its real and personal property is located in New York. [In  addition,  a
    4  "qualified  New York manufacturer" means a taxpayer which is defined as]
    5  A TAXPAYER OR, IN THE CASE OF A COMBINED REPORT, A COMBINED GROUP,  THAT
    6  DOES  NOT  SATISFY  THE  PRINCIPALLY ENGAGED TEST MAY BE A QUALIFIED NEW
    7  YORK MANUFACTURER IF THE TAXPAYER OR THE COMBINED GROUP  EMPLOYS  DURING
    8  THE  TAXABLE  YEAR AT LEAST TWO THOUSAND FIVE HUNDRED EMPLOYEES IN MANU-
    9  FACTURING IN NEW YORK AND THE TAXPAYER OR THE COMBINED GROUP HAS PROPER-
   10  TY IN THE STATE USED IN MANUFACTURING, THE ADJUSTED BASIS OF  WHICH  FOR
   11  FEDERAL INCOME TAX PURPOSES AT THE CLOSE OF THE TAXABLE YEAR IS AT LEAST
   12  ONE HUNDRED MILLION DOLLARS. THE AMOUNT PRESCRIBED BY THIS PARAGRAPH FOR
   13  A  TAXPAYER  THAT IS a qualified emerging technology company under para-
   14  graph (c) of subdivision one of section thirty-one hundred two-e of  the
   15  public  authorities  law regardless of the ten million dollar limitation
   16  expressed in subparagraph one of such paragraph (c) SHALL BE COMPUTED AT
   17  THE RATE OF FIVE AND NINE-TENTHS PERCENT OF THE  TAXPAYER'S  ENTIRE  NET
   18  INCOME  BASE.  The  commissioner shall establish guidelines and criteria
   19  that specify requirements by which a manufacturer may be  classified  as
   20  an  eligible  qualified  New York manufacturer. Criteria may include but
   21  not be limited to factors such as regional  unemployment,  the  economic
   22  impact  that  manufacturing has on the surrounding community, population
   23  decline within the region and median income within the region  in  which
   24  the manufacturer is located. In establishing these guidelines and crite-
   25  ria,  the  commissioner shall endeavor that the total annual cost of the
   26  lower rates shall not exceed twenty-five million dollars.
   27    [(vii) For a qualified New York manufacturer, as defined  in  subpara-
   28  graph  (vi)  of this paragraph, the rate at which the tax is computed in
   29  effect for taxable years beginning on or after January first, two  thou-
   30  sand thirteen and before January first, two thousand fourteen for quali-
   31  fied  New  York  manufacturers  shall  be reduced by nine and two-tenths
   32  percent for taxable years commencing on  or  after  January  first,  two
   33  thousand fourteen and before January first, two thousand fifteen, twelve
   34  and  three-tenths percent for taxable years commencing on or after Janu-
   35  ary first, two thousand fifteen and before January first,  two  thousand
   36  sixteen, fifteen and four-tenths percent for taxable years commencing on
   37  or  after  January first, two thousand sixteen and before January first,
   38  two thousand eighteen, and twenty-five percent for taxable years  begin-
   39  ning on or after January first, two thousand eighteen.]
   40    S  6.  Subparagraph 2 of paragraph (b) of subdivision 1 of section 210
   41  of the tax law, as amended by section 1 of part GG-1 of  chapter  57  of
   42  the laws of 2008, is amended to read as follows:
   43    (2)  For  purposes  of  subparagraph  one  of this paragraph, the term
   44  "manufacturer" shall mean a taxpayer which during the  taxable  year  is
   45  principally  engaged  in the production of goods by manufacturing, proc-
   46  essing, assembling, refining, mining, extracting, farming,  agriculture,
   47  horticulture, floriculture, viticulture or commercial fishing. Moreover,
   48  for  purposes  of  computing  the capital base in a combined report, the
   49  combined group shall be considered a "manufacturer" for purposes of this
   50  subparagraph only if the combined group during the taxable year is prin-
   51  cipally engaged in the activities set forth in this subparagraph, or any
   52  combination thereof. A taxpayer or a combined group shall be "principal-
   53  ly engaged" in activities described above if, during the  taxable  year,
   54  more  than  fifty  percent  of  the  gross  receipts  of the taxpayer or
   55  combined group, respectively, are derived from receipts from the sale of
   56  goods produced by such activities. In computing a combined group's gross
       S. 6359--D                         195                        A. 8559--D

    1  receipts, intercorporate receipts shall be eliminated. A "qualified  New
    2  York  manufacturer" is a manufacturer that has property in New York that
    3  is described in clause (A) of  subparagraph  (i)  of  paragraph  (b)  of
    4  subdivision  twelve of this section and either (i) the adjusted basis of
    5  that property for federal income tax purposes at the close of the  taxa-
    6  ble  year  is  at  least one million dollars or (ii) all of its real and
    7  personal property is located in New York. In addition, a "qualified  New
    8  York  manufacturer"  means  a  taxpayer  that  is defined as a qualified
    9  emerging technology company under paragraph (c) of  subdivision  one  of
   10  section  thirty-one  hundred two-e of the public authorities law regard-
   11  less of the ten million dollar limitation expressed in subparagraph  one
   12  of  such paragraph.   A TAXPAYER OR, IN THE CASE OF A COMBINED REPORT, A
   13  COMBINED GROUP, THAT DOES NOT SATISFY THE PRINCIPALLY ENGAGED  TEST  MAY
   14  BE  A  QUALIFIED  NEW  YORK MANUFACTURER IF THE TAXPAYER OR THE COMBINED
   15  GROUP EMPLOYS DURING THE TAXABLE YEAR AT LEAST TWO THOUSAND FIVE HUNDRED
   16  EMPLOYEES IN MANUFACTURING IN NEW YORK AND THE TAXPAYER OR THE  COMBINED
   17  GROUP  HAS  PROPERTY  IN  THE  STATE USED IN MANUFACTURING, THE ADJUSTED
   18  BASIS OF WHICH FOR FEDERAL INCOME TAX PURPOSES AT THE CLOSE OF THE TAXA-
   19  BLE YEAR IS AT LEAST ONE HUNDRED MILLION DOLLARS.
   20    S 7. Subparagraph (iii) of paragraph (c) of subdivision 1  of  section
   21  210 of the tax law, as added by section 3 of part Z of chapter 59 of the
   22  laws of 2013, is amended to read as follows:
   23    (iii)  For  a  qualified New York manufacturer, as defined in subpara-
   24  graph (vi) of paragraph (a) of this subdivision AND A QUALIFIED EMERGING
   25  TECHNOLOGY COMPANY UNDER PARAGRAPH (C) OF  SUBDIVISION  ONE  OF  SECTION
   26  THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW REGARDLESS OF THE
   27  TEN  MILLION  DOLLAR  LIMITATION  EXPRESSED  IN SUBPARAGRAPH ONE OF SUCH
   28  PARAGRAPH (C), the rate at which the tax is computed in effect for taxa-
   29  ble years beginning on or after January first, two thousand thirteen and
   30  before January first, two  thousand  fourteen  for  qualified  New  York
   31  manufacturers  shall be reduced by nine and two-tenths percent for taxa-
   32  ble years commencing on or after January first,  two  thousand  fourteen
   33  and  before January first, two thousand fifteen, twelve and three-tenths
   34  percent for taxable years commencing on  or  after  January  first,  two
   35  thousand fifteen and before January first, two thousand sixteen, fifteen
   36  and four-tenths percent for taxable years commencing on or after January
   37  first, two thousand sixteen and before January first, two thousand eigh-
   38  teen,  and  twenty-five  percent for taxable years beginning on or after
   39  January first, two thousand eighteen.
   40    S 8. Subparagraph 6 of paragraph (d) of subdivision 1 of  section  210
   41  of  the  tax  law,  as added by section 4 of part Z of chapter 59 of the
   42  laws of 2013, is amended to read as follows:
   43    (6) For a qualified New York manufacturer, as defined in  subparagraph
   44  (vi)  of  paragraph  (a)  of  this subdivision, AND A QUALIFIED EMERGING
   45  TECHNOLOGY COMPANY UNDER PARAGRAPH (C) OF  SUBDIVISION  ONE  OF  SECTION
   46  THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW REGARDLESS OF THE
   47  TEN  MILLION  DOLLAR  LIMITATION  EXPRESSED  IN SUBPARAGRAPH ONE OF SUCH
   48  PARAGRAPH (C), the amounts prescribed in subparagraphs one and  four  of
   49  this paragraph in effect for taxable years beginning on or after January
   50  first,  two  thousand  thirteen  and  before January first, two thousand
   51  fourteen for qualified New York manufacturers shall be reduced  by  nine
   52  and  two-tenths percent for taxable years commencing on or after January
   53  first, two thousand fourteen and  before  January  first,  two  thousand
   54  fifteen, twelve and three-tenths percent for taxable years commencing on
   55  or  after  January first, two thousand fifteen and before January first,
   56  two thousand sixteen, fifteen and four-tenths percent for taxable  years
       S. 6359--D                         196                        A. 8559--D

    1  commencing  on  or  after January first, two thousand sixteen and before
    2  January first, two thousand eighteen, and twenty-five percent for  taxa-
    3  ble years beginning on or after January first, two thousand eighteen.
    4    S  9.  Severability.  The  legislature  intends by this act to provide
    5  needed tax relief to New York manufacturers.  However,  if  a  court  of
    6  final,  competent  jurisdiction adjudges the tax rates imposed on quali-
    7  fied New York manufacturers to be invalid, qualified New  York  manufac-
    8  turers  shall  be  subject  to the same tax rates as all other taxpayers
    9  subject to tax under article 9-A of the tax law. Provided further, if  a
   10  court  of  final,  competent  jurisdiction adjudges that the tax credits
   11  provided by this act to qualified New York manufacturers to be  invalid,
   12  such  credits  shall  be  deemed  repealed  and shall be of no force and
   13  effect as to any taxpayers.
   14    S 10. This act shall take effect immediately and shall apply to  taxa-
   15  ble  years  beginning on or after January 1, 2014 provided that sections
   16  one, two, three, five, six, seven, eight and  nine  of  this  act  shall
   17  expire  December  31,  2014 when upon such date such provisions shall be
   18  deemed repealed.

   19                                   PART S

   20    Section 1. Sections 185, 187-j, 187-k, 187-l, 187-m, 187-q, 187-r  and
   21  187-s of the tax law are REPEALED.
   22    S  2.  Paragraph  (c)  of subdivision 9 of section 400 of the economic
   23  development law, as added by section 2 of part V of chapter  61  of  the
   24  laws of 2011, is amended to read as follows:
   25    (c) the business entity must not be substantially similar in ownership
   26  and  operation  to  another taxpayer taxable or previously taxable under
   27  section one hundred eighty-three[,] OR one hundred eighty-four or FORMER
   28  SECTION one hundred eighty-five of  article  nine,  former  section  one
   29  hundred  eighty-six or article nine-A, twenty-two, thirty-two or thirty-
   30  three of the tax law or the income or losses of which is or was includa-
   31  ble under article twenty-two of the tax law;
   32    S 3. Paragraph (c) of subdivision 6 of section  431  of  the  economic
   33  development  law,  as  added by section 1 of part A of chapter 68 of the
   34  laws of 2013, is amended to read as follows:
   35    (c) the business is not substantially  similar  in  operation  and  in
   36  ownership  to  a  business  entity  (or entities) taxable, or previously
   37  taxable within the last five taxable years, under  section  one  hundred
   38  eighty-three[,]  OR  one hundred eighty-four, FORMER SECTION one hundred
   39  eighty-five or FORMER SECTION one hundred eighty-six  of  the  tax  law,
   40  article nine-A, thirty-two or thirty-three of the tax law, article twen-
   41  ty-three  of  the  tax law or which would have been subject to tax under
   42  such article twenty-three (as such article  was  in  effect  on  January
   43  first,  nineteen  hundred eighty), or the income (or losses) of which is
   44  (or was) includable under article twenty-two of the tax law; and
   45    S 4. Paragraph 1 of subdivision (a), subdivision (f), paragraph  1  of
   46  subdivision  (i)  and  subdivisions (j) and (k) of section 14 of the tax
   47  law, paragraph 1 of subdivision (a) as amended by section 3 of  part  V1
   48  of  chapter 109 of the laws of 2006, subdivisions (f) and (j) as amended
   49  by section 10 of part CC of chapter 85 of the laws of 2002, paragraph  1
   50  of  subdivision  (i)  and  subdivision (k) as amended and paragraph 4 of
   51  subdivision (j) as added by section 5 of part A of  chapter  63  of  the
   52  laws  of  2005,  subparagraph  (B)  of paragraph 4 of subdivision (j) as
   53  amended by chapter 161 of the laws of 2005 and paragraph 5  of  subdivi-
       S. 6359--D                         197                        A. 8559--D

    1  sion  (j)  as amended by section 4 of part V1 of chapter 109 of the laws
    2  of 2006, are amended to read as follows:
    3    (1)  except as provided in paragraphs one-a and one-b of this subdivi-
    4  sion, for purposes of [section one hundred eighty-seven-j and]  articles
    5  nine-A,  twenty-two,  thirty-two  and  thirty-three of this chapter, for
    6  each of the taxable years within  the  "business  tax  benefit  period,"
    7  which  period  shall consist of (A) in the case of a business enterprise
    8  with a test date occurring on or before December thirty-first, two thou-
    9  sand one, the first fifteen taxable years beginning on or after  January
   10  first, two thousand one, (B) in the case of a business enterprise with a
   11  test  date  occurring  on  or after January first, two thousand two, but
   12  prior to April first, two thousand five, the fifteen taxable years  next
   13  following  the business enterprise's test year, and (C) in the case of a
   14  business enterprise which is first certified under article eighteen-B of
   15  the general municipal law on or after April first,  two  thousand  five,
   16  the  ten taxable years starting with the taxable year in which the busi-
   17  ness enterprise's first date of certification under  article  eighteen-B
   18  of  the  general  municipal law occurs, but only with respect to each of
   19  such business tax benefit period years for which the employment test  is
   20  met,
   21    (f)  Taxable  year.  The term "taxable year" means the taxable year of
   22  the business enterprise under section one hundred eighty-three[,] OR one
   23  hundred eighty-four[, one hundred eighty-five]  or  former  section  one
   24  hundred eighty-six of article nine, or under article nine-A, twenty-two,
   25  thirty-two  or  thirty-three  of  this chapter. If a business enterprise
   26  does not have a taxable year because  it  is  exempt  from  taxation  or
   27  otherwise  not  required  to file a return under any of such sections of
   28  article nine or under article nine-A, twenty-two, thirty-two or  thirty-
   29  three,  then the term "taxable year" means (i) the business enterprise's
   30  federal taxable year, or, (ii) if the enterprise does not have a federal
   31  taxable year, the calendar year.
   32    (1) for purposes of [section one  hundred  eighty-seven-j  of  article
   33  nine,  and]  articles nine-A, twenty-two, thirty-two and thirty-three of
   34  this chapter, on the first day of the taxable year during which  revoca-
   35  tion of its certification under article eighteen-B of the general munic-
   36  ipal law occurs, and
   37    (j)  New  business.  (1) A new business shall include any corporation,
   38  except a corporation which is substantially similar in operation and  in
   39  ownership  to  a  business  entity  (or entities) taxable, or previously
   40  taxable, under section one hundred  eighty-three,  one  hundred  eighty-
   41  four,  FORMER  SECTION  one  hundred  eighty-five  or FORMER SECTION one
   42  hundred eighty-six of article nine; article nine-A,  article  thirty-two
   43  or thirty-three of this chapter; article twenty-three of this chapter or
   44  which would have been subject to tax under such article twenty-three (as
   45  such article was in effect on January first, nineteen hundred eighty) or
   46  the  income  (or  losses)  of which is (or was) includable under article
   47  twenty-two of this chapter.
   48    (2) For purposes of article twenty-two of this chapter, an  individual
   49  who is either a sole proprietor or a member of a partnership shall qual-
   50  ify as an owner of a new business unless the business of which the indi-
   51  vidual  is  an owner is substantially similar in operation and in owner-
   52  ship to a business entity taxable, or previously taxable, under  section
   53  one  hundred  eighty-three,  one hundred eighty-four, FORMER SECTION one
   54  hundred eighty-five or FORMER SECTION one hundred eighty-six of  article
   55  nine;  article nine-A, thirty-two or thirty-three of this chapter; arti-
   56  cle twenty-three of this chapter or which would have been subject to tax
       S. 6359--D                         198                        A. 8559--D

    1  under such article twenty-three (as such article was in effect on  Janu-
    2  ary  first,  nineteen hundred eighty) or the income (or losses) of which
    3  is (or was) includable under article twenty-two.
    4    (3)  For purposes of article twenty-two of this chapter, a shareholder
    5  of a New York S corporation shall be treated as the owner of a new busi-
    6  ness with respect to such share if the corporation qualifies  as  a  new
    7  business pursuant to paragraph one of this subdivision.
    8    (4) (A)(i) Notwithstanding paragraphs one and two of this subdivision,
    9  a new business shall include any corporation which is identical in oper-
   10  ation  and  ownership  to  a business entity (or entities) taxable under
   11  section one hundred eighty-three[,] OR one hundred eighty-four or FORMER
   12  SECTION one hundred eighty-five of article nine; article nine-A, article
   13  thirty-two or thirty-three of this chapter or the income (or losses)  of
   14  which  is  includable under article twenty-two of this chapter, provided
   15  such corporation and such business entity or entities are  operating  in
   16  different counties in the state.
   17    (ii)  Notwithstanding  paragraphs  one and two of this subdivision, an
   18  individual who is either a sole proprietor or a member of a  partnership
   19  shall qualify as an owner of a new business if the business of which the
   20  individual  is  an owner is identical in operation and in ownership to a
   21  business entity (or entities) taxable under section one hundred  eighty-
   22  three[,] OR one hundred eighty-four or FORMER SECTION one hundred eight-
   23  y-five  of  article  nine; article nine-A, article thirty-two or thirty-
   24  three of this chapter or the income (or losses) of which  is  includable
   25  under  article  twenty-two  of  this chapter, provided such business and
   26  such business entity or entities are operating in different counties  in
   27  the state.
   28    (iii)  Any  corporation qualifying as a new business or any individual
   29  qualifying as an owner of a new business as a result of  the  provisions
   30  of this subparagraph shall have the same business tax benefit period and
   31  sales  and  use tax benefit period as the business entity to which it is
   32  identical in operation and in ownership.
   33    (B) Notwithstanding any provisions of this subdivision to the contrary
   34  and notwithstanding subdivision c of section  eighteen  of  part  CC  of
   35  chapter  eighty-five  of  the laws of two thousand two, a corporation or
   36  partnership, which was first certified under article eighteen-B  of  the
   37  general  municipal law before August first, two thousand two, has a base
   38  period of zero years or zero employment for  its  base  period,  and  is
   39  similar  in  operation and in ownership to a business entity or entities
   40  taxable, or previously taxable, under sections  specified  in  paragraph
   41  one  or  two of this subdivision or which would have been subject to tax
   42  under article twenty-three of this  chapter  (as  such  article  was  in
   43  effect on January first, nineteen hundred eighty) or the income or loss-
   44  es  of which is or was includable under article twenty-two of this chap-
   45  ter shall not be deemed a new business if it was not formed for a  valid
   46  business  purpose, as such term is defined in clause (D) of subparagraph
   47  one of paragraph (o) of subdivision nine of section two hundred eight of
   48  this chapter and was formed solely to gain empire zone benefits.
   49    (5) Notwithstanding any other provision of this  section,  a  business
   50  enterprise which is approved by the commissioner of economic development
   51  as  the owner of a qualified investment project or a significant capital
   52  investment project pursuant to subdivision (w) of section  nine  hundred
   53  fifty-nine of the general municipal law, has a base period of zero years
   54  and  places in service property (or a project that includes such proper-
   55  ty) which comprises such qualified investment project  or  such  signif-
   56  icant  capital  investment project[,], shall be deemed to be a new busi-
       S. 6359--D                         199                        A. 8559--D

    1  ness under this section. Provided, however, to be deemed a new  business
    2  under  this  paragraph,  such  business  enterprise  shall have received
    3  certification under article eighteen-B of the general  business  law  by
    4  December thirty-first, two thousand seven.
    5    (k)  If  the  designation of an area as an empire zone is no longer in
    6  effect because section nine hundred sixty-nine of the general  municipal
    7  law  was not amended to extend the effective date of such designation so
    8  that the designations of all empire zones pursuant to article eighteen-B
    9  of the general municipal law have expired, a  business  enterprise  that
   10  was  certified  pursuant  to article eighteen-B of the general municipal
   11  law on the day immediately preceding the day on which  such  designation
   12  expired  shall  be deemed to continue to be certified under such article
   13  eighteen-B for purposes of this section, and sections fifteen,  sixteen,
   14  [section  one  hundred  eighty-seven-j,]  subdivisions  twenty-seven and
   15  twenty-eight of section two hundred ten, subsections (bb)  and  (cc)  of
   16  section six hundred six, subdivision [(z)] (D) of section eleven hundred
   17  [fifteen]  NINETEEN, subsections (o) and (p) of section fourteen hundred
   18  fifty-six, and subdivisions (r) and (s) of section fifteen hundred elev-
   19  en of this chapter. In addition, if the designation of  an  area  as  an
   20  empire  zone  is no longer in effect because section nine hundred sixty-
   21  nine of the general municipal law was not amended to extend  the  effec-
   22  tive  date  of  such  designation so that the designations of all empire
   23  zones pursuant to article eighteen-B of the general municipal  law  have
   24  expired,  all references to empire zones in the provisions of this chap-
   25  ter listed in the previous sentence  shall  be  read  as  meaning  areas
   26  designated  as  empire zones on the day immediately preceding the day on
   27  which such designation expired.
   28    S 5. Paragraph 1 of subdivision (h) of section 15 of the  tax  law  is
   29  REPEALED.
   30    S 6. The closing paragraph of subdivision (a) of section 28 of the tax
   31  law,  as added by section 2 of part V of chapter 62 of the laws of 2006,
   32  is amended to read as follows:
   33    (4) Notwithstanding any provisions of this section to the contrary,  a
   34  corporation  or  partnership,  which  otherwise qualifies as a qualified
   35  commercial production company, and is similar in operation and in owner-
   36  ship to a business entity or entities taxable,  or  previously  taxable,
   37  under  section one hundred eighty-three[,] OR one hundred eighty-four or
   38  FORMER SECTION one hundred eighty-five of article nine; article  nine-A,
   39  article  thirty-two  or thirty-three of this chapter or which would have
   40  been subject to tax under article twenty-three of this chapter (as  such
   41  article  was in effect on January first, nineteen hundred eighty) or the
   42  income or losses of which is or was includable under article  twenty-two
   43  of  this  chapter  shall  not  be deemed a new or separate business, and
   44  therefore shall not be eligible for empire state  commercial  production
   45  benefits,  if  it  was  not formed for a valid business purpose, as such
   46  term is defined in clause (D) of subparagraph one of  paragraph  (o)  of
   47  subdivision  nine  of  section two hundred eight of this chapter and was
   48  formed solely to gain empire state commercial  production  credit  bene-
   49  fits.
   50    S  7.  Subdivision  (a)  of  section  31 of the tax law, as amended by
   51  section 7 of part G of chapter 61 of the laws of  2011,  is  amended  to
   52  read as follows:
   53    (a)  General.  A  taxpayer  subject  to tax under [section one hundred
   54  eighty-five,] article nine-A, twenty-two, thirty-two or thirty-three  of
   55  this chapter shall be allowed a credit against such tax, pursuant to the
   56  provisions  referenced in subdivision (g) of this section. The amount of
       S. 6359--D                         200                        A. 8559--D

    1  the credit, allowable for up to ten consecutive taxable  years,  is  the
    2  sum of the following four credit components:
    3    (1) the excelsior jobs tax credit component;
    4    (2) the excelsior investment tax credit component;
    5    (3) the excelsior research and development tax credit component; and
    6    (4) the excelsior real property tax credit component.
    7    S  8.  Paragraph  1 of subdivision (g) of section 31 of the tax law is
    8  REPEALED.
    9    S 9. The opening paragraph of  paragraph  1  of  subdivision  (a)  and
   10  subparagraph  (C) of paragraph 2 of subdivision (e) of section 35 of the
   11  tax law, as added by section 3 of part V of chapter 61 of  the  laws  of
   12  2011, are amended to read as follows:
   13    A taxpayer which is a participant or the owner of a participant in the
   14  economic transformation and facility redevelopment program under article
   15  eighteen  of  the  economic development law that is subject to tax under
   16  [section one hundred eighty-five of article nine,  or]  article  nine-A,
   17  twenty-two,  thirty-two or thirty-three of this chapter shall be allowed
   18  the sum of following  components  against  such  tax,  pursuant  to  the
   19  provisions referenced in subdivision (f) of this section.
   20    (C) the business entity must not be substantially similar in ownership
   21  and  operation  to  another taxpayer taxable or previously taxable under
   22  section one hundred eighty-three[,] OR one hundred eighty-four or FORMER
   23  SECTION one hundred eighty-five of  article  nine,  former  section  one
   24  hundred  eighty-six of this chapter or article nine-A, twenty-two, thir-
   25  ty-two or thirty-three of this chapter or the income or losses of  which
   26  is or was includable under article twenty-two of this chapter;
   27    S  10. Paragraph 1 of subdivision (f) of section 35 of the tax law, as
   28  added by section 3 of part V of chapter 61  of  the  laws  of  2011,  is
   29  REPEALED.
   30    S  11. Paragraph 1 of subdivision (e) of section 38 of the tax law, as
   31  added by section 1 of part EE of chapter 59 of  the  laws  of  2013,  is
   32  REPEALED.
   33    S 12. Subdivision 2 of section 187 of the tax law, as added by chapter
   34  788 of the laws of 1978, is amended to read as follows:
   35    2.  In  no event shall the credit herein provided for be allowed in an
   36  amount which will reduce the tax payable to  less  than  the  applicable
   37  minimum  tax  fixed  by  section  one hundred eighty-three[, one hundred
   38  eighty-five] or FORMER SECTION one hundred eighty-six. If, however,  the
   39  amount  of  credit  allowable  under  this  section for any taxable year
   40  reduces the tax to such amount, any amount of credit not  deductible  in
   41  such taxable year may be carried over to the following year or years and
   42  may be deducted from the taxpayer's tax for such year or years.
   43    S 13. Subdivision 5 of section 187-a of the tax law, as added by chap-
   44  ter 142 of the laws of 1997, is amended to read as follows:
   45    5.  Carryover.  In  no  event  shall  the credit under this section be
   46  allowed in an amount which will reduce the tax payable to less than  the
   47  applicable  minimum  tax fixed by section one hundred eighty-three[, one
   48  hundred eighty-five] or FORMER SECTION one hundred  eighty-six  of  this
   49  article.  If, however, the amount of credit allowable under this section
   50  for any taxable year reduces the tax to such amount, any amount of cred-
   51  it  not  deductible  in  such  taxable  year  may be carried over to the
   52  following year or years and may be deducted from the taxpayer's tax  for
   53  such year or years.
   54    S 14. Subdivisions 1 and 4 of section 187-b of the tax law, as amended
   55  by section 1 of part G of chapter 59 of the laws of 2013, are amended to
   56  read as follows:
       S. 6359--D                         201                        A. 8559--D

    1    1.  General.  A  taxpayer  shall  be  allowed a credit, to be credited
    2  against the taxes imposed under sections one hundred eighty-three[,] AND
    3  one hundred eighty-four[, and one hundred eighty-five] of this  article.
    4  Such  credit,  to  be computed as hereinafter provided, shall be allowed
    5  for  alternative  fuel vehicle refueling and electric vehicle recharging
    6  property placed in service during the taxable year.  Provided,  however,
    7  that  the  amount  of  such  credit allowable against the tax imposed by
    8  section one hundred eighty-four of this article shall be the  excess  of
    9  the credit allowed by this section over the amount of such credit allow-
   10  able against the tax imposed by section one hundred eighty-three of this
   11  article.
   12    4.  Carryovers.  In  no  event  shall the credit under this section be
   13  allowed in an amount which will reduce the tax payable to less than  the
   14  applicable minimum tax fixed by section one hundred eighty-three [or one
   15  hundred  eighty-five] of this article. If, however, the amount of credit
   16  allowable under this section for any taxable year  reduces  the  tax  to
   17  such  amount,  any  amount of credit not deductible in such taxable year
   18  may be carried over to the following year or years and may  be  deducted
   19  from the taxpayer's tax for such year or years.
   20    S  15. Section 187-c of the tax law, as amended by section 2 of part K
   21  of chapter 59 of the laws of 2012, is amended to read as follows:
   22    S 187-c. Biofuel production credit. A  taxpayer  shall  be  allowed  a
   23  credit  to be computed as provided in section twenty-eight of this chap-
   24  ter, as added by part X of chapter sixty-two of the laws of two thousand
   25  six, against the tax imposed by this article.  Provided,  however,  that
   26  the amount of such credit allowed against the tax imposed by section one
   27  hundred eighty-four of this article shall be the excess of the amount of
   28  such  credit  over  the  amount  of  any  credit allowed by this section
   29  against the tax imposed by section  one  hundred  eighty-three  of  this
   30  article.  In  no event shall the credit under this section be allowed in
   31  an amount which will reduce the tax payable to less than the  applicable
   32  minimum  tax  fixed  by section one hundred eighty-three [or one hundred
   33  eighty-five] of this article. If, however,  the  amount  of  the  credit
   34  allowed  under this section for any taxable year reduces the tax to such
   35  amount, the excess shall be treated as an overpayment of tax to be cred-
   36  ited or refunded in  accordance  with  the  provisions  of  section  six
   37  hundred eighty-six of this chapter. Provided, however, the provisions of
   38  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
   39  notwithstanding, no interest shall  be  paid  thereon.  The  tax  credit
   40  allowed  pursuant to this section shall apply to taxable years beginning
   41  before January first, two thousand twenty.
   42    S 16. Section 187-d of the tax law, as added by section 3 of  part  II
   43  of chapter 63 of the laws of 2000, is amended to read as follows:
   44    S  187-d.  Green  building  credit. 1. Allowance of credit. A taxpayer
   45  shall be allowed a credit, to be computed as provided in  section  nine-
   46  teen  of this chapter, against the taxes imposed by sections one hundred
   47  eighty-three, one hundred eighty-four[,  one  hundred  eighty-five]  and
   48  FORMER  SECTION one hundred eighty-six of this article. Provided, howev-
   49  er, that the amount of such credit allowable against the tax imposed  by
   50  section  one  hundred eighty-four of this article shall be the excess of
   51  the amount of such credit over the amount of any credit allowed by  this
   52  section  against  the tax imposed by section one hundred eighty-three of
   53  this article.
   54    2. Carryovers. In no event shall the  credit  under  this  section  be
   55  allowed  in an amount which will reduce the tax payable to less than the
   56  applicable minimum tax fixed by section one hundred  eighty-three[,  one
       S. 6359--D                         202                        A. 8559--D

    1  hundred  eighty-five]  or  FORMER SECTION one hundred eighty-six of this
    2  article. If, however, the amount of credit allowable under this  section
    3  for any taxable year reduces the tax to such amount, any amount of cred-
    4  it  not  deductible  in  such  taxable  year  may be carried over to the
    5  following year or years and may be deducted from the taxpayer's tax  for
    6  such year or years.
    7    S  17.  Subdivisions 1 and 2 of section 187-e of the tax law, as added
    8  by section 2 of part I of chapter 63 of the laws of 2000, are amended to
    9  read as follows:
   10    1. Allowance of credit. A taxpayer shall be allowed a  credit,  to  be
   11  computed  as  provided  in  section  twenty of this chapter, against the
   12  taxes imposed by sections one hundred eighty-three, one hundred  eighty-
   13  four[,  one  hundred eighty-five] and FORMER SECTION one hundred eighty-
   14  six of this article. Provided, however, that the amount of  such  credit
   15  allowable  against the tax imposed by section one hundred eighty-four of
   16  this article shall be the excess of the amount of such credit  over  the
   17  amount  of any credit allowed by this section against the tax imposed by
   18  section one hundred eighty-three of this article.
   19    2. Application of credit. In no event  shall  the  credit  under  this
   20  section  be  allowed  in  an amount which will reduce the tax payable to
   21  less than the applicable minimum tax fixed by section one hundred eight-
   22  y-three[, one hundred eighty-five] or FORMER SECTION one hundred  eight-
   23  y-six of this article. If, however, the amount of credit allowable under
   24  this  section  for  any taxable year reduces the tax to such amount, any
   25  amount of credit not thus deductible  in  such  taxable  year  shall  be
   26  treated  as  an overpayment of tax to be credited or refunded in accord-
   27  ance with the provisions of section ten hundred eighty-six of this chap-
   28  ter. Provided, however, the provisions of subsection (c) of section  ten
   29  hundred  eighty-eight of this chapter notwithstanding, no interest shall
   30  be paid thereon.
   31    S 18. Section 187-g of the tax law, as added by section 2 of part H of
   32  chapter 1 of the laws of 2003, is amended to read as follows:
   33    S 187-g. Brownfield redevelopment tax credit. 1. Allowance of  credit.
   34  A  taxpayer  shall  be  allowed  a credit, to be computed as provided in
   35  section twenty-one  of  this  chapter,  against  the  taxes  imposed  by
   36  sections  one  hundred  eighty-three[,] AND one hundred eighty-four [and
   37  one hundred eighty-five] of this article. Provided,  however,  that  the
   38  amount  of  such credit allowable against the tax imposed by section one
   39  hundred eighty-four of this article shall be the excess of the amount of
   40  such credit over the amount  of  any  credit  allowed  by  this  section
   41  against  the  tax  imposed  by  section one hundred eighty-three of this
   42  article.
   43    2. Application of credit. In no event  shall  the  credit  under  this
   44  section  be  allowed  in  an amount which will reduce the tax payable to
   45  less than the applicable minimum tax fixed by section one hundred eight-
   46  y-three [or one hundred eighty-five] of this article. If,  however,  the
   47  amount  of  credit  allowable  under  this  section for any taxable year
   48  reduces the tax to such amount, any amount of credit not  deductible  in
   49  such  taxable  year  shall  be  treated  as  an overpayment of tax to be
   50  refunded in accordance with the provisions of section ten hundred eight-
   51  y-six of this chapter. Provided, however, the provisions  of  subsection
   52  (c) of section ten hundred eighty-eight of this chapter notwithstanding,
   53  no interest shall be paid thereon.
   54    S  19.  Section 187-h of the tax law, as added by section 13 of part H
   55  of chapter 1 of the laws of 2003, subdivision 1 as amended by section  5
       S. 6359--D                         203                        A. 8559--D

    1  of  part  H  of  chapter  577 of the laws of 2004, is amended to read as
    2  follows:
    3    S  187-h.  Remediated  brownfield  credit  for real property taxes for
    4  qualified sites. 1. Allowance of credit. A taxpayer shall be  allowed  a
    5  credit,  to  be computed as provided in subdivision (b) of section twen-
    6  ty-two of this chapter,  against  the  taxes  imposed  by  sections  one
    7  hundred  eighty-three[,]  AND  one  hundred eighty-four [and one hundred
    8  eighty-five] of this article. Provided, however, that the amount of such
    9  credit allowed against the tax imposed by section  one  hundred  eighty-
   10  four  of  this  article shall be the excess of the amount of such credit
   11  over the amount of any credit allowed by this section  against  the  tax
   12  imposed by section one hundred eighty-three of this article.
   13    2.  Application  of  credit.  In  no event shall the credit under this
   14  section be allowed in an amount which will reduce  the  tax  payable  to
   15  less than the applicable minimum tax fixed by section one hundred eight-
   16  y-three  [or  one hundred eighty-five] of this article. If, however, the
   17  amount of credit allowed under this section for any taxable year reduces
   18  the tax to such amount, any amount of credit not thus deductible in such
   19  taxable year shall be treated as an overpayment of tax to be credited or
   20  refunded in accordance with the provisions of section ten hundred eight-
   21  y-six of this chapter. Provided, however, the provisions  of  subsection
   22  (c) of section ten hundred eighty-eight of this chapter notwithstanding,
   23  no interest shall be paid thereon.
   24    S  20.  Section 187-i of the tax law, as added by section 20 of part H
   25  of chapter 1 of the laws of 2003, is amended to read as follows:
   26    S 187-i. Environmental remediation insurance credit. 1.  Allowance  of
   27  credit. A taxpayer shall be allowed a credit, to be computed as provided
   28  in  section  twenty-three  of this chapter, against the taxes imposed by
   29  sections one hundred eighty-three[,] AND one  hundred  eighty-four  [and
   30  one  hundred  eighty-five]  of this article. Provided, however, that the
   31  amount of such credit allowable against the tax imposed by  section  one
   32  hundred eighty-four of this article shall be the excess of the amount of
   33  such  credit  over  the  amount  of  any  credit allowed by this section
   34  against the tax imposed by section  one  hundred  eighty-three  of  this
   35  article.
   36    2.  Application  of  credit.  In  no event shall the credit under this
   37  section be allowed in an amount which will reduce  the  tax  payable  to
   38  less  than  the  applicable  minimum  tax  fixed  by section one hundred
   39  eighty-three [or one hundred eighty-five] of this article. If,  however,
   40  the  amount  of credit allowable under this section for any taxable year
   41  reduces the tax to such amount, any amount of credit not  deductible  in
   42  such  taxable  year  shall  be  treated  as  an overpayment of tax to be
   43  refunded in accordance with  the  provisions  of  section  one  thousand
   44  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
   45  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
   46  notwithstanding, no interest shall be paid thereon.
   47    S  21.  Subdivision  2  of  section  187-n of the tax law, as added by
   48  chapter 537 of the laws of 2005, is amended to read as follows:
   49    2. Application of credit. In no event  shall  the  credit  under  this
   50  section  be  allowed  in  an amount which will reduce the tax payable to
   51  less than the applicable  minimum  tax  fixed  by  section  one  hundred
   52  eighty-three  [or one hundred eighty-five] of this article. If, however,
   53  the amount of credit allowable under this section for any  taxable  year
   54  reduces  the  tax to such amount, any amount of credit not deductible in
   55  such taxable year shall be treated  as  an  overpayment  of  tax  to  be
   56  refunded  in  accordance  with  the  provisions  of section one thousand
       S. 6359--D                         204                        A. 8559--D

    1  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    2  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
    3  notwithstanding, no interest shall be paid thereon.
    4    S  22.  Subdivisions 1 and 3 of section 187-n of the tax law, subdivi-
    5  sion 1 as amended by section 1 of part C1 of chapter 57 of the  laws  of
    6  2009  and subdivision 3 as added by chapter 446 of the laws of 2005, are
    7  amended to read as follows:
    8    (1) Allowance of credit. For taxable years  beginning  before  January
    9  first, two thousand nine, a taxpayer whose business is not substantially
   10  engaged  in  the  commercial  generation, distribution, transmission, or
   11  servicing of energy or energy products shall be allowed a credit against
   12  the taxes imposed  by  sections  one  hundred  eighty-three[,]  AND  one
   13  hundred eighty-four [and one hundred eighty-five] of this article, equal
   14  to  its  qualified fuel cell electric generating equipment expenditures.
   15  Provided, however, that the amount of such credit allowable against  the
   16  tax  imposed by section one hundred eighty-four of this article shall be
   17  the excess of the amount of such credit over the amount  of  any  credit
   18  allowed  by  this section against the tax imposed by section one hundred
   19  eighty-three of this article. This credit shall not exceed one  thousand
   20  five  hundred  dollars  per  generating unit with respect to any taxable
   21  year. The credit provided for herein shall be allowed  with  respect  to
   22  the taxable year in which the fuel cell electric generating equipment is
   23  placed in service.
   24    (3)  Application  of  credit.  In no event shall the credit under this
   25  section be allowed in an amount which will reduce  the  tax  payable  to
   26  less than the applicable minimum tax fixed by section one hundred eight-
   27  y-three  [or  one hundred eighty-five] of this article. If, however, the
   28  amount of credit allowable under  this  section  for  any  taxable  year
   29  reduces  the  tax to such amount, any amount of credit not deductible in
   30  such taxable year may be carried over to the following year or years and
   31  may be deducted from the taxpayer's tax for such year or years.
   32    S 23. Section 187-o of the tax law, as added by section 3 of part Y of
   33  chapter 57 of the laws of 2010, is amended to read as follows:
   34    S 187-o. Temporary deferral nonrefundable payout credit. 1.  Allowance
   35  of  credit.  A  taxpayer  shall  be  allowed a credit, to be computed as
   36  provided in subdivision one of  section  thirty-four  of  this  chapter,
   37  against either the taxes imposed by sections one hundred eighty-three[,]
   38  AND  one  hundred eighty-four, [and one hundred eighty-five,] or the tax
   39  imposed by section one hundred eighty-six-a of  this  article.  However,
   40  the amount of such credit against the tax imposed by section one hundred
   41  eighty-four  of  this  article shall be the excess of the amount of that
   42  credit over the amount of any credit allowed by this section against the
   43  tax imposed by section one hundred eighty-three of this article.
   44    2. Application of credit. In no event  shall  the  credit  under  this
   45  section  be  allowed in an amount which will reduce the tax to less than
   46  the applicable minimum tax fixed by section one hundred eighty-three [or
   47  one hundred eighty-five] of this article. If,  however,  the  amount  of
   48  credit  allowed  under this section for any taxable year reduces the tax
   49  to such amount, any amount of credit not deductible in such taxable year
   50  may be carried over to the following year or years and may  be  deducted
   51  from the taxpayer's tax for such year or years.
   52    S 24. Section 187-p of the tax law, as added by section 3 of part Y of
   53  chapter 57 of the laws of 2010, is amended to read as follows:
   54    S  187-p. Temporary deferral refundable payout credit. 1. Allowance of
   55  credit. A taxpayer shall be allowed a credit, to be computed as provided
   56  in subdivision two of section thirty-four of this chapter,  against  the
       S. 6359--D                         205                        A. 8559--D

    1  taxes  imposed  by  sections one hundred eighty-three[,] AND one hundred
    2  eighty-four [and one hundred eighty-five] of this article,  or  the  tax
    3  imposed  by  section  one hundred eighty-six-a of this article. However,
    4  the amount of such credit against the tax imposed by section one hundred
    5  eighty-four  of  this  article shall be the excess of the amount of that
    6  credit over the amount of any credit allowed by this section against the
    7  tax imposed by section one hundred eighty-three of this article.
    8    2. Application of credit. In no event  shall  the  credit  under  this
    9  section  be  allowed in an amount which will reduce the tax to less than
   10  the applicable minimum tax fixed by section one hundred eighty-three [or
   11  one hundred eighty-five] of this article. If,  however,  the  amount  of
   12  credit  allowed  under this section for any taxable year reduces the tax
   13  to such amount, any amount of credit not deductible in such taxable year
   14  shall be treated as an overpayment of tax to be refunded  in  accordance
   15  with  the provisions of section one thousand eighty-six of this chapter,
   16  provided however, that no interest shall be paid thereon.
   17    S 25. Subdivisions 2 and 3 of section 190 of the tax law, as added  by
   18  section  1  of  part E of chapter 63 of the laws of 2000, are amended to
   19  read as follows:
   20    2. Computation. The credit allowed by  this  section  shall  first  be
   21  deducted  from  the  taxes imposed by section one hundred eighty-three[,
   22  one hundred eighty-five] or FORMER SECTION  one  hundred  eighty-six  of
   23  this  article.  The  amount  of  any such credit remaining shall next be
   24  deducted from the taxes imposed by section one  hundred  eighty-four  of
   25  this article.
   26    3.  Carryover.  In  no  event shall the amount of credit allowed under
   27  this section reduce the tax payable to less than the minimum  tax  fixed
   28  by section one hundred eighty-three[, one hundred eighty-five] or FORMER
   29  SECTION  one hundred eighty-six of this article. If, however, the amount
   30  of credit allowable under this section for any taxable year reduces  the
   31  tax  to such amount, any amount of credit not deductible in such taxable
   32  year may be carried over to the following  year  or  years  and  may  be
   33  deducted from the taxpayer's tax for such year or years.
   34    S 26. Subdivision 1 of section 192 of the tax law, as amended by chap-
   35  ter 96 of the laws of 1976, is amended to read as follows:
   36    1.  Corporations  paying franchise tax. Every corporation, association
   37  or joint-stock company liable to pay a tax  under  section  one  hundred
   38  eighty-three  [or  one hundred eighty-five] of this chapter shall, on or
   39  before March fifteenth in each year, make a written report  to  the  tax
   40  commission  of its condition at the close of its business on the preced-
   41  ing December thirty-first, stating the amount of its authorized  capital
   42  stock, the amount of stock paid in, the date and rate per centum of each
   43  dividend  paid  by  it  during the year ending with such day, the entire
   44  amount of the capital of such corporation, and the capital  employed  by
   45  it in this state during such year.
   46    S  27.  Subdivision  4  of  section  209 of the tax law, as amended by
   47  section 2 of part FF1 of chapter 57 of the laws of 2008, is  amended  to
   48  read as follows:
   49    4.  Corporations liable to tax under sections one hundred eighty-three
   50  to one  hundred  [eighty-five]  EIGHTY-FOUR-A,  inclusive,  corporations
   51  taxable  under articles thirty-two and thirty-three of this chapter, any
   52  trust company organized under a law of this state all of  the  stock  of
   53  which  is  owned by not less than twenty savings banks organized under a
   54  law of this state, bank holding companies filing a  combined  return  in
   55  accordance with [subdivision] SUBSECTION (f) of section fourteen hundred
   56  sixty-two  of  this  chapter,  a  captive REIT or a captive RIC filing a
       S. 6359--D                         206                        A. 8559--D

    1  combined return under either [subdivision]  SUBSECTION  (f)  of  section
    2  fourteen hundred sixty-two or subdivision (f) of section fifteen hundred
    3  fifteen  of  this chapter, and housing companies organized and operating
    4  pursuant to the provisions of article two or article five of the private
    5  housing  finance  law  and  housing development fund companies organized
    6  pursuant to the provisions of article  eleven  of  the  private  housing
    7  finance law shall not be subject to tax under this article.
    8    S  28.  Section 209 of the tax law is amended by adding a new subdivi-
    9  sion 12 to read as follows:
   10    12. ALL FARMERS', FRUIT GROWERS' AND OTHER  LIKE  AGRICULTURAL  CORPO-
   11  RATIONS  ORGANIZED AND OPERATED ON A CO-OPERATIVE BASIS FOR THE PURPOSES
   12  EXPRESSED IN AND AS PROVIDED UNDER THE CO-OPERATIVE CORPORATIONS LAW  OF
   13  THE  STATE  OF  NEW  YORK, WHETHER OR NOT SUCH CORPORATIONS HAVE CAPITAL
   14  STOCK, SHALL BE EXEMPT FROM TAXATION UNDER THE PROVISIONS OF THIS  ARTI-
   15  CLE.
   16    S 29. Paragraphs (b) and (c) of subdivision 1-c, clause (i) of subpar-
   17  agraph 1 of paragraph (b) of subdivision 3, and subparagraphs 1 and 2 of
   18  paragraph (j) of subdivision 12 of section 210 of the tax law, paragraph
   19  (b)  of subdivision 1-c as amended by section 12 of part Y of chapter 63
   20  of the laws of 2000, paragraph (c) of subdivision 1-c and subparagraph 2
   21  of paragraph (j) of subdivision 12 as amended by  chapter  1043  of  the
   22  laws  of 1981, clause (i) of subparagraph 1 of paragraph (b) of subdivi-
   23  sion 3 as amended by chapter 61 of the laws of 1989 and  subparagraph  1
   24  of paragraph (j) of subdivision 12 as amended by section 14 of part Y of
   25  chapter 63 of the laws of 2000, are amended to read as follows:
   26    (b) is not a corporation over fifty percent of the number of shares of
   27  stock of which entitling the holders thereof to vote for the election of
   28  directors or trustees is owned by a taxpayer which (1) is subject to tax
   29  under  this  article; section one hundred eighty-three[,] OR SECTION one
   30  hundred eighty-four or FORMER SECTION one hundred eighty-five of article
   31  nine; article thirty-two or thirty-three of this chapter, and  (2)  does
   32  not  qualify  as  a  small  business corporation as defined in paragraph
   33  three of subsection (c) of section  twelve  hundred  forty-four  of  the
   34  internal revenue code (without regard to the second sentence of subpara-
   35  graph  (A) thereof) as of the last day of its taxable year ending within
   36  or with the taxable year of the taxpayer,
   37    (c) is not a corporation which is substantially similar  in  operation
   38  and  in  ownership to a business entity (or entities) taxable, or previ-
   39  ously taxable, under this article; section one hundred eighty-three, one
   40  hundred eighty-four, OR FORMER SECTION one hundred eighty-five or FORMER
   41  SECTION one hundred eighty-six of article nine;  article  thirty-two  or
   42  thirty-three  of  this  chapter; article twenty-three of this chapter or
   43  which would have been subject to tax under such article twenty-three (as
   44  such article was in effect on January first, nineteen hundred eighty) or
   45  the income (or losses) of which is (or  was)  includable  under  article
   46  twenty-two of this chapter, and
   47    (i)  In  the case of an issuer or obligor subject to tax under section
   48  one hundred eighty-three[, one hundred eighty-five]  or  FORMER  SECTION
   49  one  hundred eighty-six of this chapter or under this article or article
   50  thirty-three of this chapter (except for  savings  and  insurance  banks
   51  described  in  subdivision  (b) of section fifteen hundred of this chap-
   52  ter), the issuer's allocation percentage shall be the percentage of  the
   53  appropriate  measure  (as  defined  hereinafter) which is required to be
   54  allocated within the state on the report, if any, required of the issuer
   55  or obligor under this chapter for the preceding  year.  The  appropriate
   56  measure  referred  to in the preceding sentence shall be: in the case of
       S. 6359--D                         207                        A. 8559--D

    1  an issuer or obligor subject to section one hundred eighty-three of this
    2  chapter, issued capital stock; in the  case  of  an  issuer  or  obligor
    3  [subject  to  section  one  hundred  eighty-five]  EXEMPT FROM TAX UNDER
    4  SUBDIVISION  TWELVE  OF  SECTION  TWO  HUNDRED  NINE  of  this [chapter]
    5  ARTICLE, issued capital stock; in the  case  of  an  issuer  or  obligor
    6  subject  to FORMER section one hundred eighty-six of this chapter, gross
    7  earnings; in the case of an issuer or obligor subject to  this  article,
    8  entire capital; and in the case of an issuer or obligor subject to arti-
    9  cle thirty-three of this chapter, gross direct premiums.
   10    (1)  over fifty percent of the number of shares of stock entitling the
   11  holders thereof to vote for the election of  directors  or  trustees  is
   12  owned  or  controlled,  either  directly  or  indirectly,  by a taxpayer
   13  subject to tax under this article; section one hundred eighty-three, one
   14  hundred eighty-four or FORMER SECTION one hundred eighty-five of article
   15  nine; article thirty-two or thirty-three of this chapter; or
   16    (2) is substantially similar in operation and in ownership to a  busi-
   17  ness  entity  (or  entities)  taxable, or previously taxable, under this
   18  article; section one  hundred  eighty-three,  one  hundred  eighty-four,
   19  FORMER  SECTION  one  hundred  eighty-five or FORMER SECTION one hundred
   20  eighty-six of article nine; article thirty-two or thirty-three  of  this
   21  chapter;  article  twenty-three of this chapter or which would have been
   22  subject to tax under such article twenty-three (as such article  was  in
   23  effect  on  January  first,  nineteen  hundred eighty) or the income (or
   24  losses) of which is (or was) includable under article twenty-two of this
   25  chapter whereby the intent and purpose of this paragraph  and  paragraph
   26  (e) of this subdivision with respect to refunding of credit to new busi-
   27  ness would be evaded; or
   28    S  30.  Subparagraph  (A) of paragraph 10 of subsection (a) of section
   29  606 of the tax law, as amended by section 3 of part CC of chapter 85  of
   30  the laws of 2002, is amended to read as follows:
   31    (A)  the business of which the individual is an owner is substantially
   32  similar in operation and in ownership to a business entity  taxable,  or
   33  previously  taxable, under section one hundred eighty-three, one hundred
   34  eighty-four, FORMER SECTION one hundred eighty-five  or  FORMER  SECTION
   35  one  hundred  eighty-six  of article nine; article nine-A, thirty-two or
   36  thirty-three of this chapter; article twenty-three of  this  chapter  or
   37  which would have been subject to tax under such article twenty-three (as
   38  such article was in effect on January first, nineteen hundred eighty) or
   39  the  income  (or  losses)  of which is (or was) includable under article
   40  twenty-two of this chapter whereby the intent and purpose of this  para-
   41  graph and paragraph five of this subsection with respect to refunding of
   42  credit to new business would be evaded; or
   43    S  31.  Subparagraphs  (A) and (B) of paragraph 8 of subsection (i) of
   44  section 1456 of the tax law, as added by section 27 of part A of chapter
   45  56 of the laws of 1998, are amended to read as follows:
   46    (A) over fifty percent of the number of shares of stock entitling  the
   47  holders  thereof  to  vote  for the election of directors or trustees is
   48  owned or controlled,  either  directly  or  indirectly,  by  a  taxpayer
   49  subject to tax under this article; section one hundred eighty-three, one
   50  hundred  eighty-four,  FORMER  SECTION one hundred eighty-five or FORMER
   51  SECTION one hundred eighty-six of article nine; article nine-A or  arti-
   52  cle thirty-three of this chapter; or
   53    (B)  is substantially similar in operation and in ownership to a busi-
   54  ness entity (or entities) taxable, or  previously  taxable,  under  this
   55  article;  section  one  hundred  eighty-three,  one hundred eighty-four,
   56  FORMER SECTION one hundred eighty-five or  FORMER  SECTION  one  hundred
       S. 6359--D                         208                        A. 8559--D

    1  eighty-six  of  article  nine; article nine-A or article thirty-three of
    2  this chapter; article twenty-three of this chapter or which  would  have
    3  been subject to tax under such article twenty-three (as such article was
    4  in  effect  on January first, nineteen hundred eighty) or the income (or
    5  losses) of which is (or was) includable under article twenty-two of this
    6  chapter whereby the intent and purpose of this paragraph  and  paragraph
    7  five of this subsection with respect to refunding of credit to new busi-
    8  ness would be evaded; or
    9    S  32.  Subparagraph  (A) of paragraph 7 of subdivision (q) of section
   10  1511 of the tax law, as added by section 1 of part L of  chapter  63  of
   11  the laws of 2000, is amended to read as follows:
   12    (A)  over fifty percent of the number of shares of stock entitling the
   13  holders thereof to vote for the election of  directors  or  trustees  is
   14  owned  or  controlled,  either  directly  or  indirectly,  by a taxpayer
   15  subject to tax under this article; section one hundred eighty-three, one
   16  hundred eighty-four, FORMER SECTION one hundred  eighty-five  or  FORMER
   17  SECTION  one hundred eighty-six of article nine; article nine-A or arti-
   18  cle thirty-two of this chapter; or
   19    S 33. Subdivision 13 of section 171  of  the  transportation  law,  as
   20  added by chapter 478 of the laws of 1991, is amended to read as follows:
   21    13.  The  transportation for compensation performed by an agricultural
   22  cooperative corporation[, which corporation  is  subject  to  tax  under
   23  section one hundred eighty-five of the tax law,] for non-members who are
   24  not  farmers  or  cooperative  corporations  when such transportation is
   25  limited to that which is  incidental  to  the  agricultural  cooperative
   26  corporation's  primary transportation operation and is necessary for its
   27  effective performance. Such transportation shall be provided only  after
   28  the  agricultural  cooperative  corporation notifies the commissioner in
   29  writing of its intent to provide the transportation  and  it  shall  not
   30  exceed twenty-five percent of the agricultural cooperative corporation's
   31  total transportation services in each calendar year measured in terms of
   32  tonnage.  The  commissioner may prescribe the records to be kept and the
   33  information to be furnished by all agricultural cooperative corporations
   34  performing transportation pursuant to this subdivision.
   35    S 34. Subclause 2 of clause (v) of subparagraph (B) of paragraph 1  of
   36  subdivision  (o)  of  section  11-1712 of the administrative code of the
   37  city of New York, such subdivision as relettered by chapter 639  of  the
   38  laws of 1986, is amended to read as follows:
   39    (2)  A  new  business  does not include: (i) any new business of which
   40  twenty-five percent or more of the number of shares of stock that  enti-
   41  tle  the  holders thereof to vote for the election of directors or trus-
   42  tees is owned, directly or indirectly, by  a  taxpayer  subject  to  tax
   43  under  section one hundred eighty-three, one hundred eighty-four, FORMER
   44  SECTION one hundred eighty-five or FORMER SECTION one hundred eighty-six
   45  of article nine of the tax law, or under article [nine-a] NINE-A,  thir-
   46  ty-two  or thirty-three of the tax law or (ii) any new business substan-
   47  tially similar in operation and in ownership, directly or indirectly, to
   48  a business entity (or entities) taxable, or  previously  taxable,  under
   49  such section, such article, article twenty-three of the tax law or which
   50  would  have been subject to tax under such article twenty-three (as such
   51  article was in effect on January first, nineteen hundred eighty) or  the
   52  income  (or  losses) of which is (or was) includible under article twen-
   53  ty-two of such tax law whereby the intent and purpose  of  this  section
   54  would be evaded.
   55    S 35. Paragraph (iii) of subdivision 9 of section 16-v of section 1 of
   56  chapter  174  of the laws of 1968, constituting the New York state urban
       S. 6359--D                         209                        A. 8559--D

    1  development corporation act, as added by section 1 of part C of  chapter
    2  59 of the laws of 2013, is amended to read as follows:
    3    (iii) either: (A) any corporation, except a corporation which:
    4    (1)  over fifty percent of the number of shares of stock entitling the
    5  holders thereof to vote for the election of  directors  or  trustees  is
    6  owned  or  controlled,  either  directly  or  indirectly,  by a taxpayer
    7  subject to tax under the following provisions of the  tax  law:  article
    8  nine-A;  section  one hundred eighty-three[,] OR one hundred eighty-four
    9  or FORMER SECTION one hundred eighty-five of article nine; article thir-
   10  ty-two or article thirty-three; or
   11    (2) is substantially similar in operation and in ownership to a  busi-
   12  ness  entity  (or  entities)  taxable  or  previously  taxable under the
   13  following provisions of the tax law: article nine-A; section one hundred
   14  eighty-three, one hundred eighty-four, FORMER SECTION one hundred eight-
   15  y-five or former section one hundred eighty-six of article nine; article
   16  thirty-two; article thirty-three; article twenty-three,  or  would  have
   17  been subject to tax under such article twenty-three (as such article was
   18  in  effect  on January first, nineteen hundred eighty) or the income (or
   19  losses) of which is (or was) includable under article twenty-two; or
   20    (B) a sole proprietorship, partnership, limited  partnership,  limited
   21  liability  company,  or  New  York  subchapter S corporation that is not
   22  substantially similar in operation and in ownership to a business entity
   23  (or entities) taxable, or previously taxable, under  article  nine-A  of
   24  the  tax law, section one hundred eighty-three, one hundred eighty-four,
   25  FORMER SECTION one hundred eighty-five or  former  section  one  hundred
   26  eighty-six  of  article nine of the tax law, article thirty-two or thir-
   27  ty-three of the tax law, article twenty-three of the tax  law  or  which
   28  would  have been subject to tax under such article twenty-three (as such
   29  article was in effect on January first, nineteen hundred eighty) or  the
   30  income  (or  losses) of which is (or was) includable under article twen-
   31  ty-two of the tax law; and
   32    S 36. Notwithstanding the repeal of section 185  of  the  tax  law  by
   33  section  one of this act, all provisions of such section 185, in respect
   34  to the imposition, exemption, assessment, payment, payment over,  deter-
   35  mination,  collection,  and  credit or refund of tax imposed thereunder,
   36  the filing of forms and returns, the preservation  of  records  for  the
   37  purposes  of such tax, the secrecy of returns, the disposition of reven-
   38  ues, and the civil and criminal penalties applicable to the violation of
   39  the provisions of such section 185, shall continue  in  full  force  and
   40  effect with respect to all such tax accrued up to December 31, 2017; all
   41  actions  and  proceedings, civil or criminal, commenced or authorized to
   42  be commenced under or by virtue of any provision of such section 185  so
   43  repealed,  and pending or able to commence prior to the taking effect of
   44  such repeal, may be commenced, prosecuted and defended to  final  effect
   45  in  the  same  manner  as  they  might  if  such  provisions were not so
   46  repealed.
   47    S 37. This act shall take effect January 1, 2018 and  shall  apply  to
   48  taxable  years  beginning on or after January 1, 2018; provided, however
   49  that:
   50    a. the amendments to subdivision 9 of  section  400  of  the  economic
   51  development  law  made  by  section two of this act shall not affect the
   52  repeal of such section and shall be deemed repealed therewith; and
   53    b. the amendments to subdivisions (a) and (e) of section 35 of the tax
   54  law made by section nine of this act shall not affect the repeal of such
   55  section and shall be deemed repealed therewith.
       S. 6359--D                         210                        A. 8559--D

    1                                   PART T

    2    Section 1. Section 39 of the tax law is amended by adding a new subdi-
    3  vision (c-1) to read as follows:
    4    (C-1) EXCISE TAX ON TELECOMMUNICATION SERVICES. SUCH BUSINESS OR OWNER
    5  OF  A BUSINESS SHALL BE ELIGIBLE FOR A CREDIT OF THE EXCISE TAX ON TELE-
    6  COMMUNICATION SERVICES IMPOSED BY SECTION ONE  HUNDRED  EIGHTY-SIX-E  OF
    7  THIS  CHAPTER  THAT  IS PASSED THROUGH TO SUCH BUSINESS, PURSUANT TO THE
    8  PROVISIONS REFERENCED IN SUBDIVISION (K) OF THIS SECTION.
    9    S 2. Paragraph 4 of subdivision (k) of section 39 of the tax  law,  as
   10  added  by  section  2  of  part  A of chapter 68 of the laws of 2013, is
   11  amended to read as follows:
   12    (4) Article 9-A: section 210, subdivision 47 AND SUBDIVISION 49.
   13    S 2-a. Paragraph 6 of subdivision (k) of section 39 of the tax law, as
   14  added by section 2 of part A of chapter 68  of  the  laws  of  2013,  is
   15  amended to read as follows:
   16    (6) Article 22: section 606, subsection (ww) AND SUBSECTION (YY).
   17    S 2-b. Paragraph (b) of subdivision 9 of section 208 of the tax law is
   18  amended by adding a new subparagraph 20-a to read as follows:
   19    (20-A) THE AMOUNT OF ANY FEDERAL DEDUCTION FOR THE EXCISE TAX ON TELE-
   20  COMMUNICATION SERVICES TO THE EXTENT SUCH TAXES ARE USED AS THE BASIS OF
   21  THE  CALCULATION OF THE TAX-FREE NY AREA EXCISE TAX ON TELECOMMUNICATION
   22  SERVICES CREDIT ALLOWED UNDER  SUBDIVISION  FORTY-NINE  OF  SECTION  TWO
   23  HUNDRED TEN OF THIS ARTICLE.
   24    S 3. Section 210 of the tax law is amended by adding a new subdivision
   25  49 to read as follows:
   26    49.  THE  TAX-FREE  NY  AREA  EXCISE TAX ON TELECOMMUNICATION SERVICES
   27  CREDIT. A TAXPAYER THAT IS A BUSINESS OR OWNER OF  A  BUSINESS  THAT  IS
   28  LOCATED IN A TAX-FREE NY AREA APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF
   29  THE  ECONOMIC  DEVELOPMENT  LAW  SHALL  BE ALLOWED A CREDIT EQUAL TO THE
   30  EXCISE TAX ON TELECOMMUNICATION SERVICES IMPOSED BY SECTION ONE  HUNDRED
   31  EIGHTY-SIX-E  OF THIS CHAPTER AND PASSED THROUGH TO SUCH BUSINESS DURING
   32  THE TAXABLE YEAR TO THE  EXTENT  NOT  OTHERWISE  DEDUCTED  IN  COMPUTING
   33  ENTIRE  NET INCOME. HOWEVER, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH
   34  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
   35  REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
   36  EIGHTY-SIX  OF  THIS  CHAPTER. THIS CREDIT MAY BE CLAIMED ONLY WHERE ANY
   37  TAX IMPOSED BY SUCH SECTION ONE HUNDRED EIGHTY-SIX-E HAS BEEN SEPARATELY
   38  STATED ON A BILL FROM THE PROVIDER  OF  TELECOMMUNICATION  SERVICES  AND
   39  PAID  BY  SUCH  BUSINESS WITH RESPECT TO SUCH SERVICES RENDERED WITHIN A
   40  TAX-FREE NY AREA DURING THE TAXABLE YEAR.  UNLESS  THE  TAXPAYER  HAS  A
   41  TAX-FREE  NY  AREA  ALLOCATION FACTOR OF ONE HUNDRED PERCENT, THE CREDIT
   42  ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE
   43  TAX DUE FOR SUCH YEAR TO LESS THAN THE AMOUNT  PRESCRIBED  IN  PARAGRAPH
   44  (D)   OF  SUBDIVISION  ONE  OF  THIS  SECTION.  PROVIDED,  HOWEVER,  THE
   45  PROVISIONS OF SUBSECTION (C) OF SECTION  ONE  THOUSAND  EIGHTY-EIGHT  OF
   46  THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   47    S  4. Section 606 of the tax law is amended by adding a new subsection
   48  (yy) to read as follows:
   49    (YY) THE TAX-FREE NY AREA EXCISE  TAX  ON  TELECOMMUNICATION  SERVICES
   50  CREDIT.  A  TAXPAYER  THAT  IS A BUSINESS OR OWNER OF A BUSINESS THAT IS
   51  LOCATED IN A TAX-FREE NY AREA APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF
   52  THE ECONOMIC DEVELOPMENT LAW SHALL BE ALLOWED  A  CREDIT  EQUAL  TO  THE
   53  EXCISE  TAX ON TELECOMMUNICATION SERVICES IMPOSED BY SECTION ONE HUNDRED
   54  EIGHTY-SIX-E OF THIS CHAPTER AND PASSED THROUGH TO SUCH BUSINESS  DURING
   55  THE  TAXABLE  YEAR  TO  THE  EXTENT  NOT OTHERWISE DEDUCTED IN COMPUTING
       S. 6359--D                         211                        A. 8559--D

    1  FEDERAL ADJUSTED GROSS INCOME.  THIS CREDIT MAY BE  CLAIMED  ONLY  WHERE
    2  ANY  TAX IMPOSED BY SUCH SECTION ONE HUNDRED EIGHTY-SIX-E HAS BEEN SEPA-
    3  RATELY STATED ON A BILL FROM THE PROVIDER OF TELECOMMUNICATION  SERVICES
    4  AND  PAID BY SUCH TAXPAYER WITH RESPECT TO SUCH SERVICES RENDERED WITHIN
    5  A TAX-FREE NY AREA DURING THE TAXABLE YEAR. IF THE AMOUNT OF THE  CREDIT
    6  ALLOWED  UNDER  THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAY-
    7  ER'S TAX FOR SUCH YEAR, THE EXCESS WILL BE TREATED AS AN OVERPAYMENT  TO
    8  BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX
    9  HUNDRED  EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST
   10  WILL BE PAID THEREON.
   11    S 5. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
   12  of  the  tax  law is amended by adding a new clause (xxxviii) to read as
   13  follows:
   14  (XXXVIII) TAX FREE NY AREA EXCISE       AMOUNT OF CREDIT UNDER
   15  TAX ON TELECOMMUNICATION SERVICES       SUBDIVISION FORTY-NINE
   16  CREDIT UNDER SUBSECTION (YY)            OF SECTION TWO HUNDRED TEN
   17    S 5-a. Subsection (b) of section 612 of the  tax  law  is  amended  by
   18  adding a new paragraph 39-a to read as follows:
   19    (39-A) THE AMOUNT OF ANY FEDERAL DEDUCTION FOR THE EXCISE TAX ON TELE-
   20  COMMUNICATION SERVICES TO THE EXTENT SUCH TAXES ARE USED AS THE BASIS OF
   21  THE  CALCULATION  OF  TAX-FREE  NY  AREA EXCISE TAX ON TELECOMMUNICATION
   22  SERVICES CREDIT ALLOWED UNDER SUBSECTION (YY) OF SECTION SIX HUNDRED SIX
   23  OF THIS ARTICLE.
   24    S 6. This act shall take effect immediately and shall apply to taxable
   25  years beginning on or after January 1, 2014; provided that sections two,
   26  two-b, three and five of this act shall expire December  31,  2014  when
   27  upon such date such provisions shall be deemed repealed.

   28                                   PART U

   29    Section  1.  Paragraph (a) of subdivision 44 of section 210 of the tax
   30  law, as amended by section 2 of part T of chapter  59  of  the  laws  of
   31  2012, is amended to read as follows:
   32    (a) A taxpayer that has been certified by the commissioner of labor as
   33  a  qualified employer pursuant to section twenty-five-a of the labor law
   34  shall be allowed a credit against the tax imposed by this article  equal
   35  to  (i)  five  hundred  dollars  per month for up to six months for each
   36  qualified employee the employer  employs  in  a  full-time  job  or  two
   37  hundred  fifty dollars per month for up to six months for each qualified
   38  employee the employer employs in a part-time  job  of  at  least  twenty
   39  hours  per  week  OR  TEN  HOURS PER WEEK WHEN THE QUALIFIED EMPLOYEE IS
   40  ENROLLED IN HIGH SCHOOL FULL-TIME, and (ii)  one  thousand  dollars  for
   41  each  qualified  employee who is employed for at least an additional six
   42  months by the qualified employer in a  full-time  job  or  five  hundred
   43  dollars  for  each  qualified  employee  who is employed for at least an
   44  additional six months by the qualified employer in a part-time job of at
   45  least twenty hours per week OR TEN HOURS PER  WEEK  WHEN  THE  QUALIFIED
   46  EMPLOYEE  IS  ENROLLED IN HIGH SCHOOL FULL-TIME, AND (III) AN ADDITIONAL
   47  ONE THOUSAND DOLLARS FOR EACH QUALIFIED EMPLOYEE WHO IS EMPLOYED FOR  AT
   48  LEAST  AN ADDITIONAL YEAR AFTER THE FIRST YEAR OF THE EMPLOYEE'S EMPLOY-
   49  MENT BY THE QUALIFIED EMPLOYER  IN  A  FULL-TIME  JOB  OR  FIVE  HUNDRED
   50  DOLLARS  FOR  EACH  QUALIFIED  EMPLOYEE  WHO IS EMPLOYED FOR AT LEAST AN
   51  ADDITIONAL YEAR AFTER THE FIRST YEAR OF THE EMPLOYEE'S EMPLOYMENT BY THE
   52  QUALIFIED EMPLOYER IN A PART-TIME JOB OF AT LEAST TWENTY HOURS PER  WEEK
   53  OR  TEN  HOURS  PER WEEK WHEN THE QUALIFIED EMPLOYEE IS ENROLLED IN HIGH
   54  SCHOOL FULL-TIME.  For purposes of this subdivision, the term "qualified
       S. 6359--D                         212                        A. 8559--D

    1  employee" shall have the same meaning as set forth in subdivision (b) of
    2  section twenty-five-a of the  labor  law.  The  portion  of  the  credit
    3  described in subparagraph (i) of this paragraph shall be allowed for the
    4  taxable  year in which the wages are paid to the qualified employee, and
    5  the portion of the credit described in subparagraph (ii) of  this  para-
    6  graph  shall  be allowed in the taxable year in which the additional six
    7  month period ends.
    8    S 2. Paragraph 1 of subsection (tt) of section 606 of the tax law,  as
    9  amended  by  section  3  of part T of chapter 59 of the laws of 2012, is
   10  amended to read as follows:
   11    (1) A taxpayer that has been certified by the commissioner of labor as
   12  a qualified employer pursuant to section twenty-five-a of the labor  law
   13  shall  be allowed a credit against the tax imposed by this article equal
   14  to (A) five hundred dollars per month for up  to  six  months  for  each
   15  qualified  employee  the  employer  employs  in  a  full-time job or two
   16  hundred fifty dollars per month for up to six months for each  qualified
   17  employee  the  employer  employs  in  a part-time job of at least twenty
   18  hours per week OR TEN HOURS PER WEEK  WHEN  THE  QUALIFIED  EMPLOYEE  IS
   19  ENROLLED IN HIGH SCHOOL FULL-TIME, and (B) one thousand dollars for each
   20  qualified employee who is employed for at least an additional six months
   21  by the qualified employer in a full-time job or five hundred dollars for
   22  each  qualified  employee who is employed for at least an additional six
   23  months by the qualified employer in a part-time job of at  least  twenty
   24  hours  per  week  OR  TEN  HOURS PER WEEK WHEN THE QUALIFIED EMPLOYEE IS
   25  ENROLLED IN HIGH SCHOOL FULL-TIME, AND (C) AN  ADDITIONAL  ONE  THOUSAND
   26  DOLLARS  FOR  EACH  QUALIFIED  EMPLOYEE  WHO IS EMPLOYED FOR AT LEAST AN
   27  ADDITIONAL YEAR AFTER THE FIRST YEAR OF THE EMPLOYEE'S EMPLOYMENT BY THE
   28  QUALIFIED EMPLOYER IN A FULL-TIME JOB OR FIVE HUNDRED DOLLARS  FOR  EACH
   29  QUALIFIED EMPLOYEE WHO IS EMPLOYED FOR AT LEAST AN ADDITIONAL YEAR AFTER
   30  THE FIRST YEAR OF THE EMPLOYEE'S EMPLOYMENT BY THE QUALIFIED EMPLOYER IN
   31  A  PART-TIME JOB OF AT LEAST TWENTY HOURS PER WEEK OR TEN HOURS PER WEEK
   32  WHEN THE QUALIFIED EMPLOYEE IS ENROLLED IN HIGH  SCHOOL  FULL-TIME.    A
   33  taxpayer that is a partner in a partnership, member of a limited liabil-
   34  ity  company  or shareholder in an S corporation that has been certified
   35  by the commissioner of labor as a qualified employer pursuant to section
   36  twenty-five-a of the labor law shall be allowed its pro  rata  share  of
   37  the  credit  earned  by  the partnership, limited liability company or S
   38  corporation. For  purposes  of  this  subsection,  the  term  "qualified
   39  employee" shall have the same meaning as set forth in subdivision (b) of
   40  section  twenty-five-a  of  the  labor  law.  The  portion of the credit
   41  described in subparagraph (A) of this paragraph shall be allowed for the
   42  taxable year in which the wages are paid to the qualified employee,  and
   43  the  portion  of  the credit described in subparagraph (B) of this para-
   44  graph shall be allowed in the taxable year in which the  additional  six
   45  month period ends.
   46    S  3.  Subdivision (a) of section 25-a of the labor law, as amended by
   47  section 2 of part DD of chapter 59 of the laws of 2013,  is  amended  to
   48  read as follows:
   49    (a) The commissioner is authorized to establish and administer the New
   50  York youth works tax credit program to provide tax incentives to employ-
   51  ers  for  employing  at risk youth in part-time and full-time positions.
   52  There will be five distinct pools of tax incentives.  Program  one  will
   53  cover  tax incentives allocated for two thousand twelve and two thousand
   54  thirteen. Program two will cover tax incentives allocated in  two  thou-
   55  sand  fourteen to be used in two thousand fourteen and fifteen.  Program
   56  three will cover tax incentives allocated in two thousand fifteen to  be
       S. 6359--D                         213                        A. 8559--D

    1  used  in  two  thousand fifteen and sixteen. Program four will cover tax
    2  incentives allocated in two thousand sixteen to be used in two  thousand
    3  sixteen  and seventeen. Program five will cover tax incentives allocated
    4  in two thousand seventeen to be used in two thousand seventeen and eigh-
    5  teen.  The  commissioner  is  authorized  to  allocate up to twenty-five
    6  million dollars of tax credits under  program  one,  [six]  TEN  million
    7  dollars  of  tax credits under program two, [six] TEN million dollars of
    8  tax credits under program three, [and six] TEN million  dollars  of  tax
    9  credits under program four, and [six] TEN million dollars of tax credits
   10  under program five.
   11    S  4.  Subdivision (c) of section 25-a of the labor law, as amended by
   12  chapter 536 of the laws of 2013, is amended to read as follows:
   13    (c) A qualified employer shall be entitled to a tax  credit  equal  to
   14  (1)  five hundred dollars per month for up to six months for each quali-
   15  fied employee the employer employs in a full-time  job  or  two  hundred
   16  fifty dollars per month for up to six months for each qualified employee
   17  the  employer  employs  in  a part-time job of at least twenty hours per
   18  week or ten hours per week when the qualified employee  is  enrolled  in
   19  high school full-time, [and] (2) one thousand dollars for each qualified
   20  employee  who  is  employed for at least an additional six months by the
   21  qualified employer in a full-time job or five hundred dollars  for  each
   22  qualified employee who is employed for at least an additional six months
   23  by  the  qualified  employer in a part-time job of at least twenty hours
   24  per week or ten hours per week when the qualified employee  is  enrolled
   25  in high school full-time, AND (3) AN ADDITIONAL ONE THOUSAND DOLLARS FOR
   26  EACH  QUALIFIED EMPLOYEE WHO IS EMPLOYED FOR AT LEAST AN ADDITIONAL YEAR
   27  AFTER THE FIRST YEAR OF  THE  EMPLOYEE'S  EMPLOYMENT  BY  THE  QUALIFIED
   28  EMPLOYER  IN  A FULL-TIME JOB OR FIVE HUNDRED DOLLARS FOR EACH QUALIFIED
   29  EMPLOYEE WHO IS EMPLOYED FOR AT LEAST AN ADDITIONAL YEAR AFTER THE FIRST
   30  YEAR OF THE  EMPLOYEE'S  EMPLOYMENT  BY  THE  QUALIFIED  EMPLOYER  IN  A
   31  PART-TIME  JOB  OF  AT LEAST TWENTY HOURS PER WEEK OR TEN HOURS PER WEEK
   32  WHEN THE QUALIFIED EMPLOYEE IS ENROLLED IN HIGH SCHOOL  FULL  TIME.  The
   33  tax  credits  shall be claimed by the qualified employer as specified in
   34  subdivision forty-four of section two hundred ten and subsection (tt) of
   35  section six hundred six of the tax law.
   36    S 5. Section 25-a of the labor law is amended by adding a new subdivi-
   37  sion (f) to read as follows:
   38    (F) THE COMMISSIONER SHALL ANNUALLY PUBLISH A REPORT. SUCH REPORT MUST
   39  CONTAIN THE NAMES AND ADDRESSES OF ANY EMPLOYER ISSUED A CERTIFICATE  OF
   40  ELIGIBILITY UNDER THIS SECTION, AND THE MAXIMUM AMOUNT OF NEW YORK YOUTH
   41  WORKS  TAX  CREDIT  ALLOWED TO THE EMPLOYER AS SPECIFIED ON SUCH CERTIF-
   42  ICATE OF ELIGIBILITY.
   43    S 6. This  act  shall  take  effect  immediately;  provided,  however,
   44  sections  one and two of this act shall apply to taxable years beginning
   45  on or after January 1, 2014.

   46                                   PART V

   47    Section 1. Section 19 of Part W-1 of chapter 109 of the laws  of  2006
   48  amending  the  tax  law and other laws relating to providing exemptions,
   49  reimbursements and credits from various taxes  for  certain  alternative
   50  fuels,  as  amended  by section 1 of part D of chapter 59 of the laws of
   51  2012, is amended to read as follows:
   52    S 19. This act shall take effect immediately; provided, however,  that
   53  sections one through thirteen of this act shall take effect September 1,
   54  2006  and  shall be deemed repealed on September 1, [2014] 2016 and such
       S. 6359--D                         214                        A. 8559--D

    1  repeal shall  apply  in  accordance  with  the  applicable  transitional
    2  provisions  of sections 1106 and 1217 of the tax law, and shall apply to
    3  sales made, fuel compounded or manufactured, and uses  occurring  on  or
    4  after  such  date,  and with respect to sections seven through eleven of
    5  this act, in  accordance  with  applicable  transitional  provisions  of
    6  sections  1106  and  1217  of  the  tax law; provided, however, that the
    7  commissioner of taxation and finance shall be authorized  on  and  after
    8  the  date  this act shall have become a law to adopt and amend any rules
    9  or regulations  and  to  take  any  steps  necessary  to  implement  the
   10  provisions  of this act; provided further that sections fourteen through
   11  sixteen of this act shall take effect immediately  and  shall  apply  to
   12  taxable years beginning on or after January 1, 2006.
   13    S 2. This act shall take effect immediately.

   14                                   PART W

   15    Section  1.  Section  11 of part EE of chapter 63 of the laws of 2000,
   16  amending the tax law and other laws relating to modifying  the  distrib-
   17  ution  of  funds  from  the motor vehicle fuel excise tax, as amended by
   18  section 1 of part M of chapter 61 of the laws of  2011,  is  amended  to
   19  read as follows:
   20    S 11. Notwithstanding any other law, rule or regulation to the contra-
   21  ry,  the  comptroller  is  hereby  authorized and directed to deposit in
   22  equal monthly installments and distribute pursuant to the provisions  of
   23  subdivision  (d) of section 301-j of the tax law amounts listed below to
   24  the credit of the dedicated highway and bridge trust fund and the  dedi-
   25  cated mass transportation trust fund from all motor vehicle receipts now
   26  deposited  into  the  general fund pursuant to provisions of the vehicle
   27  and traffic law:   twenty-eight million four  hundred  thousand  dollars
   28  from  April  1,  2002  through  March 31, 2003, sixty-seven million nine
   29  hundred thousand dollars from April 1, 2003 through March 31, 2004,  one
   30  hundred  seventy million one hundred thousand dollars from April 1, 2004
   31  through March 31, 2005, and one hundred percent  of  all  motor  vehicle
   32  receipts  pursuant to provisions of the vehicle and traffic law that are
   33  not otherwise directed to be deposited in a fund other than the  general
   34  fund from April 1, 2005 through March 31, 2006, and the same amount each
   35  year  thereafter  UNTIL MARCH 31, 2014. FROM APRIL 1, 2014 THROUGH MARCH
   36  31, 2015, AND EACH YEAR THEREAFTER, THE COMPTROLLER SHALL, ON A QUARTER-
   37  LY BASIS, CERTIFY AND TRANSFER SIXTEEN MILLION FOUR HUNDRED NINETY-EIGHT
   38  THOUSAND TWO HUNDRED FIFTY-FIVE DOLLARS TO  THE  DEDICATED  HIGHWAY  AND
   39  BRIDGE  TRUST  FUND  AND FIFTEEN MILLION SIX HUNDRED SIXTY-FIVE THOUSAND
   40  TWO HUNDRED FORTY-FIVE DOLLARS  TO  THE  DEDICATED  MASS  TRANSPORTATION
   41  TRUST FUND.
   42    S  2. Paragraph (f) of subdivision 4 of section 503 of the vehicle and
   43  traffic law, as added by section 1 of part W of chapter 59 of  the  laws
   44  of 2006, is amended to read as follows:
   45    (f)  Notwithstanding  any  other  provision  of  law  to the contrary,
   46  commencing April first, two thousand six and ending March  thirty-first,
   47  two  thousand  [seven]  FOURTEEN,  IN EACH YEAR, the first forty million
   48  seven hundred thousand dollars of fees collected pursuant to this subdi-
   49  vision and section eleven hundred ninety-nine of this  chapter,  in  the
   50  aggregate, shall be paid to the state comptroller who shall deposit such
   51  money  in  the state treasury pursuant to section one hundred twenty-one
   52  of the state finance law to the credit of the  general  fund.  Any  such
   53  fees  collected  in excess of such amount shall be paid to the credit of
   54  the comptroller on account of the dedicated  highway  and  bridge  trust
       S. 6359--D                         215                        A. 8559--D

    1  fund  established pursuant to section eighty-nine-b of the state finance
    2  law. [Commencing April first, two thousand seven and ending March  thir-
    3  ty-first,  two thousand eight, and for each such fiscal year thereafter,
    4  the first forty million seven hundred thousand dollars of fees collected
    5  pursuant  to  this subdivision and section eleven hundred ninety-nine of
    6  this chapter, in the aggregate, shall be paid to the  state  comptroller
    7  who  shall  deposit such money in the state treasury pursuant to section
    8  one hundred twenty-one of the state finance law to  the  credit  of  the
    9  general  fund. Any such fees collected in excess of such amount for each
   10  such state fiscal year, shall be paid to the credit of  the  comptroller
   11  on  account  of  the dedicated highway and bridge trust fund established
   12  pursuant to section eighty-nine-b of the state finance law.]  COMMENCING
   13  APRIL  FIRST, TWO THOUSAND FOURTEEN AND FOR EACH SUCH FISCAL YEAR THERE-
   14  AFTER, ANY SUCH FEES COLLECTED PURSUANT TO THIS SUBDIVISION AND  SECTION
   15  ELEVEN  HUNDRED  NINETY-NINE OF THIS CHAPTER SHALL BE PAID TO THE CREDIT
   16  OF THE COMPTROLLER ON ACCOUNT OF THE DEDICATED HIGHWAY AND BRIDGE  TRUST
   17  FUND  ESTABLISHED PURSUANT TO SECTION EIGHTY-NINE-B OF THE STATE FINANCE
   18  LAW.
   19    S 3. This act shall take effect immediately and  shall  be  deemed  to
   20  have been in full force and effect on and after April 1, 2014.

   21                                   PART X

   22    Section 1. Section 951 of the tax law, as amended by chapter 67 of the
   23  laws  of 1978, subsection (a) as amended by section 1 of part T of chap-
   24  ter 57 of the laws of 2010, subsection (b) as amended by  section  5  of
   25  part A of chapter 389 of the laws of 1997 and subsection (c) as added by
   26  chapter 538 of the laws of 2013, is amended to read as follows:
   27    S  951.  Applicable  internal  revenue code provisions.-- (a) [Dates]
   28  GENERAL.  For purposes of this article, any reference  to  the  internal
   29  revenue code means the United States Internal Revenue Code of 1986, with
   30  all  amendments  enacted  on  or  before  [July  twenty-second, nineteen
   31  hundred ninety-eight,] JANUARY FIRST, TWO THOUSAND FOURTEEN and,  unless
   32  specifically provided otherwise in this article, any reference to Decem-
   33  ber  thirty-first,  nineteen hundred seventy-six or January first, nine-
   34  teen hundred seventy-seven contained in  the  provisions  of  such  code
   35  which  are  applicable  to  the determination of the tax imposed by this
   36  article shall be read as a reference to June thirtieth, nineteen hundred
   37  seventy-eight or July first, nineteen hundred seventy-eight, respective-
   38  ly. [Notwithstanding the  foregoing,  the  unified  credit  against  the
   39  estate  tax provided in section two thousand ten of the internal revenue
   40  code shall, for purposes of this article, be the amount allowable as  if
   41  the federal applicable exclusion amount were one million dollars.]
   42    (b)  [Applicable  generation-skipping  transfer tax provisions.--Where
   43  any reference is made in this article  (or  in  the  provisions  of  the
   44  internal  revenue  code  which  are  made  applicable by section two, as
   45  amended, of chapter one  thousand  thirteen  of  the  laws  of  nineteen
   46  hundred sixty-two, to the determination of the tax imposed by this arti-
   47  cle  and  appended  thereto)  to provisions of the internal revenue code
   48  contained in section one thousand  twenty-five  of  this  chapter,  such
   49  internal  revenue code provisions contained in such section one thousand
   50  twenty-five shall apply to the provisions of this article  in  the  same
   51  manner  and  with  the  same force and effect as if the language of such
   52  provisions of the internal revenue code had been  incorporated  in  full
   53  into this article except to the extent that any such provision is either
       S. 6359--D                         216                        A. 8559--D

    1  inconsistent  with a provision of this article or is not relevant there-
    2  to.
    3    (c)]  Disposition to surviving spouse who is not a United States citi-
    4  zen. In the case of an estate where a federal estate tax return  is  not
    5  required  for  federal estate tax purposes, a disposition to a surviving
    6  spouse that would qualify for the federal estate tax  marital  deduction
    7  under  section  2056 of the internal revenue code if not for the limita-
    8  tion imposed by subsection (d)(1) of such section shall  nonetheless  be
    9  treated  as  qualifying for the federal estate tax marital deduction for
   10  purposes of computing the tax imposed by section nine hundred  fifty-two
   11  of  this  part,  without  requiring  that  such  disposition pass to the
   12  surviving spouse in a qualified domestic trust as required  for  federal
   13  purposes by internal revenue code section 2056(d)(2).
   14    S  2.  Section  952 of the tax law, as added by section 9 of part A of
   15  chapter 389 of the laws of 1997, subsection (b) as amended by section  3
   16  of  part  I  of  chapter  60  of the laws of 2004, is amended to read as
   17  follows:
   18    S 952. Tax imposed. (a) A tax is hereby imposed on the transfer of the
   19  New York estate by every deceased individual who at his or her death was
   20  a resident of New York state. [The tax imposed by this subsection  shall
   21  be  an  amount equal to the maximum amount allowable against the federal
   22  estate tax as a credit for state death taxes under section two  thousand
   23  eleven of the internal revenue code.]
   24    (b)  [If the transfer of any part of the estate of a deceased resident
   25  includes real or tangible  personal  property  having  an  actual  situs
   26  outside  New  York  state,  the  tax  imposed  by subsection (a) of this
   27  section shall be reduced by an  amount  determined  by  multiplying  the
   28  maximum  amount  of  the federal credit for state death taxes by a frac-
   29  tion, the numerator of which is  the  decedent's  federal  gross  estate
   30  reduced by his or her New York gross estate and the denominator of which
   31  is his or her federal gross estate.] COMPUTATION OF TAX. THE TAX IMPOSED
   32  BY  THIS  SECTION  SHALL BE COMPUTED ON THE DECEASED RESIDENT'S NEW YORK
   33  TAXABLE ESTATE AS FOLLOWS:
   34  IN THE CASE OF DECEDENTS DYING ON OR AFTER  APRIL  1,  2014  AND  BEFORE
   35  APRIL 1, 2015
   36  IF THE NEW YORK TAXABLE ESTATE IS:      THE TAX IS:
   37  NOT OVER $500,000                       3.06% OF TAXABLE ESTATE
   38  OVER $500,000 BUT NOT OVER $1,000,000   $15,300 PLUS 5.0% OF EXCESS OVER
   39                                          $500,000
   40  OVER $1,000,000 BUT NOT OVER $1,500,000 $40,300 PLUS 5.5% OF EXCESS OVER
   41                                          $1,000,000
   42  OVER $1,500,000 BUT NOT OVER $2,100,000 $67,800 PLUS 6.5% OF EXCESS OVER
   43                                          $1,500,000
   44  OVER $2,100,000 BUT NOT OVER $2,600,000 $106,800 PLUS 8.0% OF EXCESS
   45                                          OVER $2,100,000
   46  OVER $2,600,000 BUT NOT OVER $3,100,000 $146,800 PLUS 8.8% OF EXCESS OVER
   47                                          $2,600,000
   48  OVER $3,100,000 BUT NOT OVER $3,600,000 $190,800 PLUS 9.6% OF EXCESS OVER
   49                                          $3,100,000
   50  OVER $3,600,000 BUT NOT OVER $4,100,000 $238,800 PLUS 10.4% OF EXCESS
   51                                          OVER $3,600,000
   52  OVER $4,100,000 BUT NOT OVER $5,100,000 $290,800 PLUS 11.2% OF EXCESS
   53                                          OVER $4,100,000
   54  OVER $5,100,000 BUT NOT OVER $6,100,000 $402,800 PLUS 12.0% OF EXCESS
   55                                          OVER $5,100,000
   56  OVER $6,100,000 BUT NOT OVER $7,100,000 $522,800 PLUS 12.8% OF EXCESS
       S. 6359--D                         217                        A. 8559--D

    1                                          OVER $6,100,000
    2  OVER $7,100,000 BUT NOT OVER $8,100,000 $650,800 PLUS 13.6% OF EXCESS
    3                                          OVER $7,100,000
    4  OVER $8,100,000 BUT NOT OVER $9,100,000 $786,800 PLUS 14.4% OF EXCESS
    5                                          OVER $8,100,000
    6  OVER $9,100,000 BUT NOT OVER            $930,800 PLUS 15.2% OF EXCESS OVE
    7  $10,100,000                             $9,100,000
    8  OVER $10,100,000                        $1,082,800 PLUS 16.0% OF EXCESS
    9                                          OVER $10,100,000
   10    (C)  APPLICABLE  CREDIT  AMOUNT. (1) A CREDIT OF THE APPLICABLE CREDIT
   11  AMOUNT SHALL BE ALLOWED AGAINST THE  TAX  IMPOSED  BY  THIS  SECTION  AS
   12  PROVIDED  IN  THIS  SUBSECTION. IN THE CASE OF A DECEDENT WHOSE NEW YORK
   13  TAXABLE ESTATE IS LESS THAN OR EQUAL TO THE BASIC EXCLUSION AMOUNT,  THE
   14  APPLICABLE  CREDIT  AMOUNT  SHALL BE THE AMOUNT OF TAX THAT WOULD BE DUE
   15  UNDER SUBSECTION (B) OF THIS SECTION ON SUCH DECEDENT'S NEW YORK TAXABLE
   16  ESTATE. IN THE CASE OF A DECEDENT WHOSE NEW YORK TAXABLE ESTATE  EXCEEDS
   17  THE  BASIC  EXCLUSION  AMOUNT BY AN AMOUNT THAT IS LESS THAN OR EQUAL TO
   18  FIVE PERCENT OF SUCH AMOUNT, THE APPLICABLE CREDIT AMOUNT SHALL  BE  THE
   19  AMOUNT  OF TAX THAT WOULD BE DUE UNDER SUBSECTION (B) OF THIS SECTION IF
   20  THE AMOUNT ON WHICH THE TAX IS TO BE COMPUTED WERE EQUAL  TO  THE  BASIC
   21  EXCLUSION  AMOUNT  MULTIPLIED  BY ONE MINUS A FRACTION, THE NUMERATOR OF
   22  WHICH IS THE DECEDENT'S NEW YORK TAXABLE ESTATE MINUS THE  BASIC  EXCLU-
   23  SION  AMOUNT,  AND THE DENOMINATOR OF WHICH IS FIVE PERCENT OF THE BASIC
   24  EXCLUSION AMOUNT.  PROVIDED, HOWEVER, THAT THE CREDIT  ALLOWED  BY  THIS
   25  SUBSECTION  SHALL  NOT  EXCEED  THE  TAX IMPOSED BY THIS SECTION, AND NO
   26  CREDIT SHALL BE ALLOWED TO THE ESTATE OF ANY  DECEDENT  WHOSE  NEW  YORK
   27  TAXABLE  ESTATE  EXCEEDS ONE HUNDRED FIVE PERCENT OF THE BASIC EXCLUSION
   28  AMOUNT.
   29    (2) (A) FOR PURPOSES OF THIS SECTION, THE BASIC EXCLUSION AMOUNT SHALL
   30  BE AS FOLLOWS:
   31  IN THE CASE OF DECEDENTS DYING ON OR AFTER: THE BASIC  EXCLUSION  AMOUNT
   32  IS:
   33  APRIL 1, 2014 AND BEFORE APRIL 1, 2015       $ 2,062,500
   34  APRIL 1, 2015 AND BEFORE APRIL 1, 2016       3,125,000
   35  APRIL 1, 2016 AND BEFORE APRIL 1, 2017       4,187,500
   36  APRIL 1, 2017 AND BEFORE JANUARY 1, 2019     5,250,000
   37    (B)  IN THE CASE OF ANY DECEDENT DYING IN A CALENDAR YEAR BEGINNING ON
   38  OR AFTER JANUARY FIRST,  TWO  THOUSAND  NINETEEN,  THE  BASIC  EXCLUSION
   39  AMOUNT SHALL BE EQUAL TO:
   40    (I) FIVE MILLION DOLLARS, MULTIPLIED BY
   41    (II)  ONE  PLUS  THE  COST-OF-LIVING  ADJUSTMENT,  WHICH  SHALL BE THE
   42  PERCENTAGE BY WHICH THE CONSUMER PRICE INDEX FOR THE PRECEDING  CALENDAR
   43  YEAR  EXCEEDS  THE  CONSUMER  PRICE INDEX FOR CALENDAR YEAR TWO THOUSAND
   44  TEN.
   45    (C) (I) FOR PURPOSES OF THIS PARAGRAPH, "CONSUMER PRICE  INDEX"  MEANS
   46  THE  MOST  RECENT CONSUMER PRICE INDEX FOR ALL-URBAN CONSUMERS PUBLISHED
   47  BY THE UNITED STATES DEPARTMENT OF LABOR.
   48    (II) FOR PURPOSES OF CLAUSE (II) OF SUBPARAGRAPH  (B)  OF  THIS  PARA-
   49  GRAPH, THE CONSUMER PRICE INDEX FOR ANY CALENDAR YEAR SHALL BE THE AVER-
   50  AGE  OF  THE  CONSUMER  PRICE  INDEX AS OF THE CLOSE OF THE TWELVE-MONTH
   51  PERIOD ENDING ON AUGUST THIRTY-FIRST OF SUCH CALENDAR YEAR.
   52    (III) IF ANY AMOUNT ADJUSTED UNDER THIS PARAGRAPH IS NOT A MULTIPLE OF
   53  TEN THOUSAND DOLLARS, SUCH AMOUNT SHALL BE ROUNDED TO THE NEAREST MULTI-
   54  PLE OF TEN THOUSAND DOLLARS.
   55    S 3. Section 954 of the tax law, as amended by chapter 67 of the  laws
   56  of  1978,  paragraph  1  of  subsection (a) as amended by section 10 and
       S. 6359--D                         218                        A. 8559--D

    1  subsection (b) as amended by section 11 of part A of chapter 389 of  the
    2  laws  of  1997,  subsection (c) as amended by chapter 916 of the laws of
    3  1982, paragraph 1 of subsection (c) as amended by section 3 of part A of
    4  chapter 407 of the laws of 1999 and such subsection (c) as relettered by
    5  section  12  of part A of chapter 389 of the laws of 1997, is amended to
    6  read as follows:
    7    S 954. Resident's New York gross estate. (a) General.-- The  New  York
    8  gross  estate  of  a  deceased  resident  means his OR HER federal gross
    9  estate as defined in the internal revenue code (whether or not a federal
   10  estate tax return is required to be filed) modified as follows:
   11    (1) Reduced by the value of real or tangible personal property  having
   12  an actual situs outside New York state.
   13    (2)  Increased  by  the  amount  determined under section nine hundred
   14  fifty-seven OF THIS PART (relating  to  limited  powers  of  appointment
   15  created prior to September first, nineteen hundred thirty).
   16    (3)  INCREASED BY THE AMOUNT OF ANY TAXABLE GIFT UNDER SECTION 2503 OF
   17  THE INTERNAL REVENUE CODE  NOT  OTHERWISE  INCLUDED  IN  THE  DECEDENT'S
   18  FEDERAL  GROSS  ESTATE,  MADE DURING THE THREE YEAR PERIOD ENDING ON THE
   19  DECEDENT'S DATE OF DEATH, BUT NOT INCLUDING ANY GIFT MADE: (1) WHEN  THE
   20  DECEDENT  WAS  NOT A RESIDENT OF NEW YORK STATE; (2) BEFORE APRIL FIRST,
   21  TWO THOUSAND FOURTEEN; OR (3) ON OR AFTER JANUARY  FIRST,  TWO  THOUSAND
   22  NINETEEN.
   23    (b)  Valuation. -- (1) The New York gross estate shall be valued as of
   24  the TIME OF THE DECEDENT'S DEATH, EXCEPT THAT IF A  FEDERAL  ESTATE  TAX
   25  RETURN  IS  FILED  AND THE ALTERNATE VALUATION UNDER SECTION 2032 OF THE
   26  INTERNAL REVENUE CODE IS ELECTED FOR FEDERAL ESTATE  TAX  PURPOSES,  THE
   27  NEW YORK GROSS ESTATE SHALL BE VALUED AS OF THE applicable federal valu-
   28  ation date or dates. Any real property qualified under section two thou-
   29  sand thirty-two-A of the internal revenue code shall have the same value
   30  for  purposes  of the New York gross estate as it has for federal estate
   31  tax purposes.
   32    (2) IF SUCH ALTERNATE VALUATION COULD HAVE BEEN  ELECTED  PURSUANT  TO
   33  PARAGRAPH  ONE  OF  THIS  SUBSECTION,  BUT  FOR THE ABSENCE OF AN ESTATE
   34  SUFFICIENT TO REQUIRE THE FILING OF A FEDERAL RETURN, THE NEW YORK GROSS
   35  ESTATE MAY, UPON THE ELECTION OF THE  EXECUTOR,  BE  VALUED  AS  OF  THE
   36  FEDERAL  VALUATION  DATE  OR DATES WHICH WOULD HAVE APPLIED IF A FEDERAL
   37  RETURN HAD BEEN FILED. HOWEVER, NO ELECTION MAY BE MADE UNDER THIS PARA-
   38  GRAPH UNLESS SUCH ELECTION WILL DECREASE THE VALUE OF THE NEW YORK GROSS
   39  ESTATE AND THE AMOUNT OF TAX IMPOSED BY THIS ARTICLE (REDUCED BY CREDITS
   40  ALLOWABLE AGAINST SUCH TAX). ANY  ELECTION  MADE  UNDER  THIS  PARAGRAPH
   41  SHALL  BE  IRREVOCABLE.  THE ELECTION ALLOWED BY THIS PARAGRAPH SHALL BE
   42  MADE NO LATER THAN THE DATE PRESCRIBED FOR  THE  FILING  OF  THE  RETURN
   43  UNDER  THIS ARTICLE (INCLUDING EXTENSIONS) OR ANY TIME THEREAFTER AS THE
   44  COMMISSIONER MAY PRESCRIBE.
   45    (c) Cross references.-- (1) For provisions  of  the  internal  revenue
   46  code defining the federal gross estate, see:
   47    Sec. 2031. Definition of gross estate.
   48    Sec. 2032. Alternate valuation.
   49    Sec. 2032A. Valuation of certain farm, etc., real property.
   50    Sec. 2033. Property in which the decedent had an interest.
   51    Sec. 2034. Dower or curtesy interest.
   52    Sec. 2035. Adjustments for gifts made within three years of decedent's
   53  death.
   54    Sec. 2036. Transfers with retained life estate.
   55    Sec. 2037. Transfers taking effect at death.
   56    Sec. 2038. Revocable transfers.
       S. 6359--D                         219                        A. 8559--D

    1    Sec. 2039. Annuities.
    2    Sec. 2040. Joint interests.
    3    Sec. 2041. Powers of appointment.
    4    Sec. 2042. Proceeds of life insurance.
    5    Sec. 2043. Transfers for insufficient consideration.
    6    Sec. 2044. Certain property for which marital deduction was previously
    7  allowed.
    8    Sec. 2045. Prior interests.
    9    Sec. 2046. Disclaimers.
   10    (2)  FOR  PROVISIONS OF THE INTERNAL REVENUE CODE WHICH, EXCEPT TO THE
   11  EXTENT THEY ARE INCONSISTENT WITH THE PROVISIONS OF  THIS  ARTICLE,  ARE
   12  PERTINENT  TO  THE  COMPUTATION  OF TAXABLE GIFTS AND THE TAX UNDER THIS
   13  ARTICLE, SEE:
   14    SEC. 2503. TAXABLE GIFTS.
   15    SEC. 2511. TRANSFERS IN GENERAL.
   16    SEC. 2512. VALUATION OF GIFTS.
   17    SEC. 2513. GIFT BY HUSBAND OR WIFE TO THIRD PARTY.
   18    SEC. 2514. POWERS OF APPOINTMENT.
   19    SEC. 2516. CERTAIN PROPERTY SETTLEMENTS.
   20    SEC. 2518. DISCLAIMERS.
   21    SEC. 2519. DISPOSITIONS OF CERTAIN LIFE ESTATES.
   22    SEC. 2522. CHARITABLE AND SIMILAR GIFTS.
   23    SEC. 2523. GIFT TO SPOUSE.
   24    SEC. 2524. EXTENT OF DEDUCTIONS.
   25    SEC. 2701. SPECIAL VALUATION RULES IN CASE  OF  TRANSFERS  OF  CERTAIN
   26  INTERESTS IN CORPORATIONS OR PARTNERSHIPS.
   27    SEC.  2702.  SPECIAL VALUATION RULES IN CASE OF TRANSFERS OF INTERESTS
   28  IN TRUSTS.
   29    SEC. 2703. CERTAIN RIGHTS AND RESTRICTIONS DISREGARDED.
   30    SEC. 2704. TREATMENT OF CERTAIN LAPSING RIGHTS AND RESTRICTIONS.
   31    SEC. 7872. TREATMENT OF LOANS WITH BELOW-MARKET INTEREST RATES.
   32    (3) For effect of federal estate tax determinations, see section  nine
   33  hundred sixty-one of this article.
   34    S  4.  The  tax  law is amended by adding a new section 955 to read as
   35  follows:
   36    S 955. RESIDENT'S NEW YORK TAXABLE ESTATE.  (A) GENERAL.--THE  TAXABLE
   37  ESTATE OF A NEW YORK RESIDENT SHALL BE HIS OR HER NEW YORK GROSS ESTATE,
   38  MINUS  THE DEDUCTIONS ALLOWABLE FOR DETERMINING HIS OR HER FEDERAL TAXA-
   39  BLE ESTATE UNDER THE INTERNAL REVENUE CODE (WHETHER  OR  NOT  A  FEDERAL
   40  ESTATE  TAX  RETURN  IS REQUIRED TO BE FILED), EXCEPT TO THE EXTENT THAT
   41  SUCH DEDUCTIONS RELATE TO REAL OR  TANGIBLE  PERSONAL  PROPERTY  SITUSED
   42  OUTSIDE NEW YORK STATE.
   43    (B)  WAIVER  OF  DEDUCTIONS.-- IF THE RIGHT TO ANY DEDUCTION OTHERWISE
   44  ALLOWABLE IS WAIVED FOR FEDERAL ESTATE TAX PURPOSES, IT SHALL BE CONSID-
   45  ERED WAIVED FOR NEW YORK ESTATE TAX PURPOSES.
   46    (C) QUALIFIED  TERMINABLE  INTEREST  PROPERTY  ELECTION.--  EXCEPT  AS
   47  OTHERWISE PROVIDED IN THIS SUBSECTION, THE ELECTION REFERRED TO IN PARA-
   48  GRAPH (7) OF SUBSECTION (B) OF SECTION 2056 OF THE INTERNAL REVENUE CODE
   49  SHALL  NOT  BE  ALLOWED UNDER THIS ARTICLE UNLESS SUCH ELECTION WAS MADE
   50  WITH RESPECT TO THE FEDERAL ESTATE TAX RETURN REQUIRED TO BE FILED UNDER
   51  THE PROVISIONS OF THE INTERNAL REVENUE CODE. IF SUCH ELECTION  WAS  MADE
   52  FOR THE PURPOSES OF THE FEDERAL ESTATE TAX, THEN SUCH ELECTION MUST ALSO
   53  BE  MADE  BY THE EXECUTOR ON THE RETURN OF THE TAX IMPOSED BY THIS ARTI-
   54  CLE. WHERE NO FEDERAL ESTATE TAX RETURN IS REQUIRED  TO  BE  FILED,  THE
   55  EXECUTOR  MAY  MAKE  THE ELECTION REFERRED TO IN SUCH PARAGRAPH (7) WITH
   56  RESPECT TO THE TAX IMPOSED BY THIS ARTICLE ON  THE  RETURN  OF  THE  TAX
       S. 6359--D                         220                        A. 8559--D

    1  IMPOSED  BY  THIS ARTICLE. ANY ELECTION MADE UNDER THIS SUBSECTION SHALL
    2  BE IRREVOCABLE.
    3    (D)  CROSS  REFERENCES.--  FOR PROVISIONS OF THE INTERNAL REVENUE CODE
    4  SPECIFYING THE DEDUCTIONS ALLOWABLE FOR  FEDERAL  ESTATE  TAX  PURPOSES,
    5  SEE:
    6    SEC.2032(B). ALTERNATE VALUATION--SPECIAL RULE FOR DEDUCTIONS.
    7    SEC.2046. DISCLAIMERS.
    8    SEC.2053. EXPENSES, INDEBTEDNESS, AND TAXES.
    9    SEC.2054. LOSSES.
   10    SEC.2055. TRANSFERS FOR PUBLIC, CHARITABLE, AND RELIGIOUS USES.
   11    SEC.2056. BEQUESTS, ETC., TO SURVIVING SPOUSE.
   12    S 5. Subsections (b) and (d) of section 960 of the tax law, subsection
   13  (b)  as amended by section 4 of part I of chapter 60 of the laws of 2004
   14  and subsection (d) as added by section 190  of  the  laws  of  1980  and
   15  relettered  by  section 15 of part A of chapter 389 of the laws of 1997,
   16  are amended to read as follows:
   17    (b) Computation of tax.--The tax imposed under subsection (a) shall be
   18  the same as the tax that would be due, if the decedent had died a  resi-
   19  dent,  under  subsection  (a)  of section nine hundred fifty-two, except
   20  that for purposes of [allocating] COMPUTING the tax under subsection (b)
   21  of section nine hundred fifty-two, "New York [gross]  TAXABLE  estate"[,
   22  in  the  numerator in subsection (b) of section nine hundred fifty-two,]
   23  shall not include the value of any intangible personal  property  other-
   24  wise  includible in the deceased individual's New York gross estate, AND
   25  SHALL NOT INCLUDE THE AMOUNT OF ANY GIFT UNLESS SUCH  GIFT  CONSISTS  OF
   26  REAL  OR  TANGIBLE  PERSONAL PROPERTY HAVING AN ACTUAL SITUS IN NEW YORK
   27  STATE OR INTANGIBLE PERSONAL PROPERTY EMPLOYED IN A BUSINESS,  TRADE  OR
   28  PROFESSION CARRIED ON IN THIS STATE.
   29    (d)  Works  of art on loan for exhibition. Notwithstanding the forego-
   30  ing, the tax imposed under subsection (a) OF THIS SECTION on the  trans-
   31  fer,  from  any  deceased  individual  who at his OR HER death was not a
   32  resident of the state of New York, of works  of  art  having  an  actual
   33  situs  in  the state of New York and either (i) includible in his OR HER
   34  federal gross estate or (ii) which would be includible in his OR HER New
   35  York gross estate pursuant to section nine hundred fifty-seven (relating
   36  to certain limited powers of appointment) if he OR SHE were  a  resident
   37  of  the  state  of  New  York, shall [be an amount equal to the transfer
   38  taxes or death taxes of every character in respect of personal  property
   39  which  would  be  imposed  on  such transfer or such works of art if the
   40  actual situs of such works of art were the state  or  territory  of  the
   41  United States of residence of such individual] NOT BE SUBJECT TO THE TAX
   42  IMPOSED  BY THIS SECTION if such works of art are [sited in the state of
   43  New York solely for exhibition purposes,] loaned [for such] TO A  PUBLIC
   44  GALLERY  LOCATED  WITHIN  THE  STATE  OF  NEW YORK SOLELY FOR EXHIBITION
   45  purposes [to a public gallery or museum (] BUT ONLY IF no  part  of  the
   46  net earnings of [which] SUCH PUBLIC GALLERY OR MUSEUM inure to the bene-
   47  fit of any private stockholder or individual[)], and [(], at the time of
   48  the  death  of such individual[)] SUCH WORKS OF ART ARE on exhibition or
   49  en route to or from exhibition in  such  a  public  gallery  or  museum.
   50  [Provided  however,  that if the state or territory of the United States
   51  of residence of such individual imposes transfer taxes or death taxes on
   52  such works of art which are sited in the  state  of  New  York  for  the
   53  purposes  herein  specified, then such works of art shall not be subject
   54  to the tax imposed by this section.]
       S. 6359--D                         221                        A. 8559--D

    1    S 6. Subsection (a) of section 971 of the tax law, as added by section
    2  17 of part A of chapter 389 of the laws of 1997, is amended to  read  as
    3  follows:
    4    (a)  Returns  by executor. (1) Residents. In the case of the estate of
    5  every individual dying on or after [February first, two thousand]  APRIL
    6  FIRST,  TWO THOUSAND FOURTEEN, who at his or her death was a resident of
    7  New York state, [if] his or her executor [is required to file  a  return
    8  with  respect to the federal estate tax (determined as if the limitation
    9  contained in subsection (a) of section nine hundred  fifty-one  of  this
   10  article were applicable in determining whether such executor is required
   11  to  file  such  federal  return), the executor] shall make a return with
   12  respect to the estate tax imposed by section nine hundred  fifty-two  of
   13  this  article  IF  THE DECEDENT'S FEDERAL GROSS ESTATE, INCREASED BY THE
   14  AMOUNT OF ANY GIFT INCLUDIBLE IN HIS  OR  HER  NEW  YORK  GROSS  ESTATE,
   15  EXCEEDS  THE BASIC EXCLUSION AMOUNT APPLICABLE TO THE DECEDENT'S DATE OF
   16  DEATH IN PARAGRAPH TWO OF SUBSECTION (C) OF SECTION NINE HUNDRED  FIFTY-
   17  TWO OF THIS ARTICLE.
   18    (2)  Nonresidents. In the case of the estate of every individual DYING
   19  ON OR AFTER APRIL FIRST, TWO THOUSAND FOURTEEN, who at his or her  death
   20  was  not  a  resident  of  New  York  state,  [if his or her executor is
   21  required to file a return with respect to the federal estate tax (deter-
   22  mined as if the limitation contained in subsection (a) of  section  nine
   23  hundred fifty-one of this article were applicable in determining whether
   24  such  executor  is  required  to  file such federal return) and] if such
   25  individual's federal gross estate includes  real  or  tangible  personal
   26  property  having  an  actual situs in New York state, the executor shall
   27  make a return with respect to the estate tax  imposed  by  section  nine
   28  hundred  sixty  of  this article IF THE DECEDENT'S FEDERAL GROSS ESTATE,
   29  INCREASED BY THE AMOUNT OF ANY GIFT INCLUDIBLE IN HIS OR  HER  NEW  YORK
   30  GROSS  ESTATE,  EXCEEDS  THE  BASIC  EXCLUSION  AMOUNT APPLICABLE TO THE
   31  DECEDENT'S DATE OF DEATH IN PARAGRAPH TWO OF SUBSECTION (C)  OF  SECTION
   32  NINE HUNDRED FIFTY-TWO OF THIS ARTICLE.
   33    S  7.  Subsection  (a)  of  section  997 of the tax law, as amended by
   34  section 27 of part A of chapter 389 of the laws of 1997, is  amended  to
   35  read as follows:
   36    (a)  The  phrase  "adjusted  gross  estate" shall be read as "adjusted
   37  federal gross estate determined  without  reference  to  paragraphs  (1)
   38  [and], (2) AND (3) of subsection (a) of section nine hundred fifty-four"
   39  of this article.
   40    S 8. Article 26-B of the tax law is REPEALED.
   41    S  9.  Section  2 of chapter 1013 of the laws of 1962 amending the tax
   42  law relating to imposing a tax on the transfer of estates  of  decedents
   43  dying on or after April first, nineteen hundred sixty-three is REPEALED.
   44    S  10. The tax law is amended by adding a new section 999-a to read as
   45  follows:
   46    S 999-A. APPENDIX TO ARTICLE TWENTY-SIX.  THE FOLLOWING PROVISIONS  OF
   47  THE  UNITED  STATES  INTERNAL  REVENUE CODE OF 1986, WITH ALL AMENDMENTS
   48  ENACTED ON OR BEFORE JANUARY FIRST, TWO THOUSAND FOURTEEN,  SHALL  APPLY
   49  TO  THE  TAX  IMPOSED  BY  THIS ARTICLE, TO THE EXTENT SPECIFIED IN THIS
   50  ARTICLE.
   51    S 2031. DEFINITION OF GROSS ESTATE.
   52    (A) GENERAL.--THE VALUE OF THE GROSS ESTATE OF THE DECEDENT  SHALL  BE
   53  DETERMINED  BY  INCLUDING  TO  THE EXTENT PROVIDED FOR IN THIS PART, THE
   54  VALUE AT THE TIME OF HIS DEATH OF ALL PROPERTY, REAL OR PERSONAL, TANGI-
   55  BLE OR INTANGIBLE, WHEREVER SITUATED.
       S. 6359--D                         222                        A. 8559--D

    1    (B) VALUATION OF UNLISTED STOCK AND SECURITIES.--IN THE CASE OF  STOCK
    2  AND  SECURITIES  OF A CORPORATION THE VALUE OF WHICH, BY REASON OF THEIR
    3  NOT BEING LISTED ON AN EXCHANGE AND BY REASON OF THE  ABSENCE  OF  SALES
    4  THEREOF,  CANNOT BE DETERMINED WITH REFERENCE TO BID AND ASKED PRICES OR
    5  WITH REFERENCE TO SALES PRICES, THE VALUE THEREOF SHALL BE DETERMINED BY
    6  TAKING  INTO  CONSIDERATION, IN ADDITION TO ALL OTHER FACTORS, THE VALUE
    7  OF STOCK OR SECURITIES OF CORPORATIONS ENGAGED IN THE SAME OR A  SIMILAR
    8  LINE OF BUSINESS WHICH ARE LISTED ON AN EXCHANGE.
    9    (C)  ESTATE  TAX WITH RESPECT TO LAND SUBJECT TO A QUALIFIED CONSERVA-
   10  TION EASEMENT.--
   11    (1) IN GENERAL.--IF THE EXECUTOR MAKES THE ELECTION DESCRIBED IN PARA-
   12  GRAPH (6), THEN, EXCEPT AS OTHERWISE PROVIDED IN THIS SUBSECTION,  THERE
   13  SHALL BE EXCLUDED FROM THE GROSS ESTATE THE LESSER OF--
   14    (A) THE APPLICABLE PERCENTAGE OF THE VALUE OF LAND SUBJECT TO A QUALI-
   15  FIED CONSERVATION EASEMENT, REDUCED BY THE AMOUNT OF ANY DEDUCTION UNDER
   16  SECTION 2055(F) WITH RESPECT TO SUCH LAND, OR
   17    (B) THE EXCLUSION LIMITATION.
   18    (2)  APPLICABLE  PERCENTAGE.--FOR  PURPOSES OF PARAGRAPH (1), THE TERM
   19  "APPLICABLE PERCENTAGE" MEANS 40 PERCENT REDUCED (BUT NOT BELOW ZERO) BY
   20  2 PERCENTAGE POINTS FOR EACH PERCENTAGE POINT (OR FRACTION  THEREOF)  BY
   21  WHICH  THE  VALUE OF THE QUALIFIED CONSERVATION EASEMENT IS LESS THAN 30
   22  PERCENT OF THE VALUE OF THE LAND (DETERMINED WITHOUT REGARD TO THE VALUE
   23  OF SUCH EASEMENT AND REDUCED BY THE VALUE OF  ANY  RETAINED  DEVELOPMENT
   24  RIGHT (AS DEFINED IN PARAGRAPH (5)). THE VALUES TAKEN INTO ACCOUNT UNDER
   25  THE  PRECEDING  SENTENCE  SHALL  BE  SUCH  VALUES  AS OF THE DATE OF THE
   26  CONTRIBUTION REFERRED TO IN PARAGRAPH (8)(B).
   27    (3) EXCLUSION LIMITATION.--FOR PURPOSES OF PARAGRAPH (1),  THE  EXCLU-
   28  SION  LIMITATION  IS  THE  LIMITATION  DETERMINED IN ACCORDANCE WITH THE
   29  FOLLOWING TABLE:
   30  IN THE CASE OF ESTATES OF DECEDENTS DYING THE EXCLUSION LIMITATION
   31  DURING:                                   IS:
   32  1998..................................... 100,000
   33  1999..................................... 200,000
   34  2000..................................... 300,000
   35  2001..................................... 400,000
   36  2002 OR THEREAFTER....................... 500,000
   37    (4) TREATMENT OF CERTAIN INDEBTEDNESS.--
   38    (A) IN GENERAL.--THE EXCLUSION PROVIDED IN  PARAGRAPH  (1)  SHALL  NOT
   39  APPLY TO THE EXTENT THAT THE LAND IS DEBT-FINANCED PROPERTY.
   40    (B) DEFINITIONS.--FOR PURPOSES OF THIS PARAGRAPH--
   41    (I)  DEBT-FINANCED  PROPERTY.--THE TERM "DEBT-FINANCED PROPERTY" MEANS
   42  ANY PROPERTY WITH RESPECT TO WHICH THERE IS AN ACQUISITION  INDEBTEDNESS
   43  (AS DEFINED IN CLAUSE (II)) ON THE DATE OF THE DECEDENT'S DEATH.
   44    (II)  ACQUISITION  INDEBTEDNESS.--THE  TERM "ACQUISITION INDEBTEDNESS"
   45  MEANS, WITH RESPECT TO DEBT-FINANCED PROPERTY, THE UNPAID AMOUNT OF--
   46    (I) THE INDEBTEDNESS INCURRED BY THE DONOR IN ACQUIRING SUCH PROPERTY,
   47    (II) THE INDEBTEDNESS INCURRED BEFORE THE ACQUISITION OF SUCH PROPERTY
   48  IF SUCH INDEBTEDNESS WOULD NOT HAVE BEEN INCURRED BUT FOR SUCH  ACQUISI-
   49  TION,
   50    (III) THE INDEBTEDNESS INCURRED AFTER THE ACQUISITION OF SUCH PROPERTY
   51  IF  SUCH INDEBTEDNESS WOULD NOT HAVE BEEN INCURRED BUT FOR SUCH ACQUISI-
   52  TION AND THE INCURRENCE OF SUCH INDEBTEDNESS WAS REASONABLY  FORESEEABLE
   53  AT THE TIME OF SUCH ACQUISITION, AND
   54    (IV)  THE EXTENSION, RENEWAL, OR REFINANCING OF AN ACQUISITION INDEBT-
   55  EDNESS.
   56    (5) TREATMENT OF RETAINED DEVELOPMENT RIGHT.--
       S. 6359--D                         223                        A. 8559--D

    1    (A) IN GENERAL.--PARAGRAPH (1) SHALL NOT APPLY TO  THE  VALUE  OF  ANY
    2  DEVELOPMENT RIGHT RETAINED BY THE DONOR IN THE CONVEYANCE OF A QUALIFIED
    3  CONSERVATION EASEMENT.
    4    (B)  TERMINATION  OF  RETAINED  DEVELOPMENT RIGHT.--IF EVERY PERSON IN
    5  BEING WHO HAS AN INTEREST (WHETHER OR NOT IN  POSSESSION)  IN  THE  LAND
    6  EXECUTES  AN  AGREEMENT  TO  EXTINGUISH  PERMANENTLY  SOME OR ALL OF ANY
    7  DEVELOPMENT RIGHTS (AS DEFINED IN  SUBPARAGRAPH  (D))  RETAINED  BY  THE
    8  DONOR  ON OR BEFORE THE DATE FOR FILING THE RETURN OF THE TAX IMPOSED BY
    9  SECTION 2001, THEN ANY TAX IMPOSED BY  SECTION  2001  SHALL  BE  REDUCED
   10  ACCORDINGLY.  SUCH  AGREEMENT  SHALL BE FILED WITH THE RETURN OF THE TAX
   11  IMPOSED BY SECTION 2001. THE AGREEMENT SHALL BE  IN  SUCH  FORM  AS  THE
   12  SECRETARY SHALL PRESCRIBE.
   13    (C)  ADDITIONAL TAX.--ANY FAILURE TO IMPLEMENT THE AGREEMENT DESCRIBED
   14  IN SUBPARAGRAPH (B) NOT LATER THAN THE EARLIER OF--
   15    (I) THE DATE WHICH IS 2 YEARS AFTER THE DATE OF THE DECEDENT'S  DEATH,
   16  OR
   17    (II)  THE  DATE  OF  THE  SALE  OF  SUCH LAND SUBJECT TO THE QUALIFIED
   18  CONSERVATION EASEMENT,
   19    SHALL RESULT IN THE IMPOSITION OF AN ADDITIONAL TAX IN THE  AMOUNT  OF
   20  THE  TAX  WHICH  WOULD  HAVE BEEN DUE ON THE RETAINED DEVELOPMENT RIGHTS
   21  SUBJECT TO SUCH AGREEMENT. SUCH ADDITIONAL TAX SHALL BE DUE AND  PAYABLE
   22  ON THE LAST DAY OF THE 6TH MONTH FOLLOWING SUCH DATE.
   23    (D)  DEVELOPMENT  RIGHT  DEFINED.--FOR PURPOSES OF THIS PARAGRAPH, THE
   24  TERM "DEVELOPMENT RIGHT" MEANS ANY RIGHT TO USE THE LAND SUBJECT TO  THE
   25  QUALIFIED  CONSERVATION EASEMENT IN WHICH SUCH RIGHT IS RETAINED FOR ANY
   26  COMMERCIAL PURPOSE WHICH IS NOT SUBORDINATE TO AND  DIRECTLY  SUPPORTIVE
   27  OF THE USE OF SUCH LAND AS A FARM FOR FARMING PURPOSES (WITHIN THE MEAN-
   28  ING OF SECTION 2032A(E)(5)).
   29    (6)  ELECTION.--THE ELECTION UNDER THIS SUBSECTION SHALL BE MADE ON OR
   30  BEFORE THE DUE DATE (INCLUDING EXTENSIONS) FOR FILING THE RETURN OF  TAX
   31  IMPOSED  BY  SECTION  2001  AND  SHALL  BE  MADE ON SUCH RETURN. SUCH AN
   32  ELECTION, ONCE MADE, SHALL BE IRREVOCABLE.
   33    (7) CALCULATION OF ESTATE TAX DUE.--AN EXECUTOR  MAKING  THE  ELECTION
   34  DESCRIBED IN PARAGRAPH (6) SHALL, FOR PURPOSES OF CALCULATING THE AMOUNT
   35  OF  TAX  IMPOSED  BY  SECTION 2001, INCLUDE THE VALUE OF ANY DEVELOPMENT
   36  RIGHT (AS DEFINED IN PARAGRAPH (5)) RETAINED BY THE DONOR IN THE CONVEY-
   37  ANCE OF SUCH QUALIFIED CONSERVATION EASEMENT. THE COMPUTATION OF TAX  ON
   38  ANY  RETAINED  DEVELOPMENT  RIGHT  PRESCRIBED IN THIS PARAGRAPH SHALL BE
   39  DONE IN SUCH MANNER AND ON SUCH FORMS AS THE SECRETARY SHALL PRESCRIBE.
   40    (8) DEFINITIONS.--FOR PURPOSES OF THIS SUBSECTION--
   41    (A) LAND SUBJECT TO A QUALIFIED CONSERVATION EASEMENT.--THE TERM "LAND
   42  SUBJECT TO A QUALIFIED CONSERVATION EASEMENT" MEANS LAND--
   43    (I) WHICH IS LOCATED IN THE UNITED STATES OR  ANY  POSSESSION  OF  THE
   44  UNITED STATES,
   45    (II)  WHICH  WAS  OWNED  BY THE DECEDENT OR A MEMBER OF THE DECEDENT'S
   46  FAMILY AT ALL TIMES DURING THE 3-YEAR PERIOD ENDING ON THE DATE  OF  THE
   47  DECEDENT'S DEATH, AND
   48    (III) WITH RESPECT TO WHICH A QUALIFIED CONSERVATION EASEMENT HAS BEEN
   49  MADE  BY  AN INDIVIDUAL DESCRIBED IN SUBPARAGRAPH (C), AS OF THE DATE OF
   50  THE ELECTION DESCRIBED IN PARAGRAPH (6).
   51    (B) QUALIFIED CONSERVATION EASEMENT.--THE TERM "QUALIFIED CONSERVATION
   52  EASEMENT" MEANS A QUALIFIED CONSERVATION  CONTRIBUTION  (AS  DEFINED  IN
   53  SECTION  170(H)(1)) OF A QUALIFIED REAL PROPERTY INTEREST (AS DEFINED IN
   54  SECTION 170(H)(2)(C)), EXCEPT THAT CLAUSE (IV) OF  SECTION  170(H)(4)(A)
   55  SHALL  NOT  APPLY,  AND  THE  RESTRICTION  ON  THE  USE OF SUCH INTEREST
       S. 6359--D                         224                        A. 8559--D

    1  DESCRIBED IN SECTION 170(H)(2)(C) SHALL INCLUDE A  PROHIBITION  ON  MORE
    2  THAN A DE MINIMIS USE FOR A COMMERCIAL RECREATIONAL ACTIVITY.
    3    (C) INDIVIDUAL DESCRIBED.--AN INDIVIDUAL IS DESCRIBED IN THIS SUBPARA-
    4  GRAPH IF SUCH INDIVIDUAL IS--
    5    (I) THE DECEDENT,
    6    (II) A MEMBER OF THE DECEDENT'S FAMILY,
    7    (III) THE EXECUTOR OF THE DECEDENT'S ESTATE, OR
    8    (IV)  THE  TRUSTEE OF A TRUST THE CORPUS OF WHICH INCLUDES THE LAND TO
    9  BE SUBJECT TO THE QUALIFIED CONSERVATION EASEMENT.
   10    (D) MEMBER OF FAMILY.--THE TERM  "MEMBER  OF  THE  DECEDENT'S  FAMILY"
   11  MEANS  ANY  MEMBER  OF THE FAMILY (AS DEFINED IN SECTION 2032A(E)(2)) OF
   12  THE DECEDENT.
   13    (9) TREATMENT OF EASEMENTS GRANTED AFTER DEATH.--IN ANY CASE IN  WHICH
   14  THE  QUALIFIED  CONSERVATION  EASEMENT  IS GRANTED AFTER THE DATE OF THE
   15  DECEDENT'S DEATH AND ON OR BEFORE THE DUE  DATE  (INCLUDING  EXTENSIONS)
   16  FOR  FILING  THE  RETURN  OF  TAX IMPOSED BY SECTION 2001, THE DEDUCTION
   17  UNDER SECTION 2055(F) WITH RESPECT TO SUCH EASEMENT SHALL BE ALLOWED  TO
   18  THE  ESTATE BUT ONLY IF NO CHARITABLE DEDUCTION IS ALLOWED UNDER CHAPTER
   19  1 TO ANY PERSON WITH RESPECT TO THE GRANT OF SUCH EASEMENT.
   20    (10) APPLICATION OF THIS SECTION TO INTERESTS IN PARTNERSHIPS,  CORPO-
   21  RATIONS, AND TRUSTS.--THIS SECTION SHALL APPLY TO AN INTEREST IN A PART-
   22  NERSHIP,  CORPORATION,  OR TRUST IF AT LEAST 30 PERCENT OF THE ENTITY IS
   23  OWNED (DIRECTLY OR INDIRECTLY) BY THE DECEDENT, AS DETERMINED UNDER  THE
   24  RULES DESCRIBED IN SECTION 2057(E)(3).
   25    (D) CROSS REFERENCE.--
   26    FOR  EXECUTOR'S RIGHT TO BE FURNISHED ON REQUEST A STATEMENT REGARDING
   27  ANY VALUATION MADE BY THE SECRETARY WITHIN THE GROSS ESTATE, SEE SECTION
   28  7517.
   29    S 2032. ALTERNATE VALUATION.
   30    (A) GENERAL.--THE VALUE OF THE GROSS ESTATE MAY BE DETERMINED, IF  THE
   31  EXECUTOR  SO  ELECTS,  BY VALUING ALL THE PROPERTY INCLUDED IN THE GROSS
   32  ESTATE AS FOLLOWS:
   33    (1) IN THE CASE OF PROPERTY DISTRIBUTED, SOLD, EXCHANGED, OR OTHERWISE
   34  DISPOSED OF, WITHIN 6 MONTHS AFTER THE DECEDENT'S  DEATH  SUCH  PROPERTY
   35  SHALL BE VALUED AS OF THE DATE OF DISTRIBUTION, SALE, EXCHANGE, OR OTHER
   36  DISPOSITION.
   37    (2)  IN  THE  CASE  OF  PROPERTY  NOT DISTRIBUTED, SOLD, EXCHANGED, OR
   38  OTHERWISE DISPOSED OF, WITHIN 6 MONTHS AFTER THE DECEDENT'S  DEATH  SUCH
   39  PROPERTY  SHALL  BE  VALUED AS OF THE DATE 6 MONTHS AFTER THE DECEDENT'S
   40  DEATH.
   41    (3) ANY INTEREST OR ESTATE WHICH IS AFFECTED BY  MERE  LAPSE  OF  TIME
   42  SHALL  BE  INCLUDED AT ITS VALUE AS OF THE TIME OF DEATH (INSTEAD OF THE
   43  LATER DATE) WITH ADJUSTMENT FOR ANY DIFFERENCE IN ITS VALUE  AS  OF  THE
   44  LATER DATE NOT DUE TO MERE LAPSE OF TIME.
   45    (B)  SPECIAL RULES.--NO DEDUCTION UNDER THIS CHAPTER OF ANY ITEM SHALL
   46  BE ALLOWED IF ALLOWANCE FOR SUCH ITEMS IS IN EFFECT GIVEN BY THE  ALTER-
   47  NATE   VALUATION  PROVIDED  BY  THIS  SECTION.  WHEREVER  IN  ANY  OTHER
   48  SUBSECTION OR SECTION OF THIS CHAPTER REFERENCE IS MADE TO THE VALUE  OF
   49  PROPERTY  AT  THE  TIME OF THE DECEDENT'S DEATH, SUCH REFERENCE SHALL BE
   50  DEEMED TO REFER TO THE VALUE OF SUCH PROPERTY USED  IN  DETERMINING  THE
   51  VALUE  OF  THE GROSS ESTATE. IN CASE OF AN ELECTION MADE BY THE EXECUTOR
   52  UNDER THIS SECTION, THEN--
   53    (1) FOR PURPOSES OF THE CHARITABLE DEDUCTION  UNDER  SECTION  2055  OR
   54  2106(A)(2), ANY BEQUEST, LEGACY, DEVISE, OR TRANSFER ENUMERATED THEREIN,
   55  AND
       S. 6359--D                         225                        A. 8559--D

    1    (2)  FOR  THE PURPOSE OF THE MARITAL DEDUCTION UNDER SECTION 2056, ANY
    2  INTEREST IN PROPERTY PASSING TO THE SURVIVING SPOUSE,
    3    SHALL BE VALUED AS OF THE DATE OF THE DECEDENT'S DEATH WITH ADJUSTMENT
    4  FOR ANY DIFFERENCE IN VALUE (NOT DUE TO MERE LAPSE OF TIME OR THE OCCUR-
    5  RENCE  OR NONOCCURRENCE OF A CONTINGENCY) OF THE PROPERTY AS OF THE DATE
    6  6 MONTHS AFTER THE DECEDENT'S DEATH (SUBSTITUTING, IN THE CASE OF  PROP-
    7  ERTY  DISTRIBUTED  BY  THE  EXECUTOR  OR TRUSTEE, OR SOLD, EXCHANGED, OR
    8  OTHERWISE DISPOSED OF, DURING SUCH 6-MONTH PERIOD, THE DATE THEREOF).
    9    (C) ELECTION MUST DECREASE GROSS ESTATE AND ESTATE  TAX.--NO  ELECTION
   10  MAY  BE  MADE  UNDER  THIS SECTION WITH RESPECT TO AN ESTATE UNLESS SUCH
   11  ELECTION WILL DECREASE--
   12    (1) THE VALUE OF THE GROSS ESTATE, AND
   13    (2) THE SUM OF THE TAX IMPOSED BY THIS CHAPTER AND THE TAX IMPOSED  BY
   14  CHAPTER  13  WITH RESPECT TO PROPERTY INCLUDIBLE IN THE DECEDENT'S GROSS
   15  ESTATE (REDUCED BY CREDITS ALLOWABLE AGAINST SUCH TAXES).
   16    (D) ELECTION.--
   17    (1) IN GENERAL.--THE ELECTION PROVIDED FOR IN THIS  SECTION  SHALL  BE
   18  MADE  BY  THE EXECUTOR ON THE RETURN OF THE TAX IMPOSED BY THIS CHAPTER.
   19  SUCH ELECTION, ONCE MADE, SHALL BE IRREVOCABLE.
   20    (2) EXCEPTION.--NO ELECTION MAY BE MADE UNDER  THIS  SECTION  IF  SUCH
   21  RETURN  IS  FILED  MORE  THAN  1  YEAR  AFTER THE TIME PRESCRIBED BY LAW
   22  (INCLUDING EXTENSIONS) FOR FILING SUCH RETURN.
   23    S 2032A. VALUATION OF CERTAIN FARM, ETC., REAL PROPERTY.
   24    (A) VALUE BASED ON USE UNDER WHICH PROPERTY QUALIFIES.--
   25    (1) GENERAL RULE.--IF--
   26    (A) THE DECEDENT WAS (AT THE TIME OF HIS DEATH) A CITIZEN OR  RESIDENT
   27  OF THE UNITED STATES, AND
   28    (B)  THE EXECUTOR ELECTS THE APPLICATION OF THIS SECTION AND FILES THE
   29  AGREEMENT REFERRED TO IN SUBSECTION (D)(2),
   30    THEN, FOR PURPOSES OF THIS CHAPTER, THE VALUE OF QUALIFIED REAL  PROP-
   31  ERTY  SHALL  BE  ITS  VALUE  FOR THE USE UNDER WHICH IT QUALIFIES, UNDER
   32  SUBSECTION (B), AS QUALIFIED REAL PROPERTY.
   33    (2) LIMITATION ON  AGGREGATE  REDUCTION  IN  FAIR  MARKET  VALUE.--THE
   34  AGGREGATE  DECREASE  IN  THE VALUE OF QUALIFIED REAL PROPERTY TAKEN INTO
   35  ACCOUNT FOR PURPOSES OF THIS CHAPTER WHICH RESULTS FROM THE  APPLICATION
   36  OF PARAGRAPH (1) WITH RESPECT TO ANY DECEDENT SHALL NOT EXCEED $750,000.
   37    (3)  INFLATION  ADJUSTMENT.--IN THE CASE OF ESTATES OF DECEDENTS DYING
   38  IN A CALENDAR YEAR AFTER 1998, THE $750,000 AMOUNT  CONTAINED  IN  PARA-
   39  GRAPH (2) SHALL BE INCREASED BY AN AMOUNT EQUAL TO--
   40    (A) $750,000, MULTIPLIED BY
   41    (B) THE COST-OF-LIVING ADJUSTMENT DETERMINED UNDER SECTION 1(F)(3) FOR
   42  SUCH  CALENDAR  YEAR  BY SUBSTITUTING "CALENDAR YEAR 1997" FOR "CALENDAR
   43  YEAR 1992" IN SUBPARAGRAPH (B) THEREOF.
   44    IF ANY AMOUNT AS ADJUSTED UNDER THE PRECEDING SENTENCE IS NOT A MULTI-
   45  PLE OF $10,000, SUCH AMOUNT SHALL BE ROUNDED TO THE NEXT LOWEST MULTIPLE
   46  OF $10,000.
   47    (B) QUALIFIED REAL PROPERTY.--
   48    (1) IN GENERAL.--FOR PURPOSES OF THIS  SECTION,  THE  TERM  "QUALIFIED
   49  REAL  PROPERTY"  MEANS  REAL PROPERTY LOCATED IN THE UNITED STATES WHICH
   50  WAS ACQUIRED FROM OR PASSED FROM THE DECEDENT TO A QUALIFIED HEIR OF THE
   51  DECEDENT AND WHICH, ON THE DATE OF THE DECEDENT'S DEATH, WAS BEING  USED
   52  FOR  A QUALIFIED USE BY THE DECEDENT OR A MEMBER OF THE DECEDENT'S FAMI-
   53  LY, BUT ONLY IF--
   54    (A) 50 PERCENT OR MORE OF THE  ADJUSTED  VALUE  OF  THE  GROSS  ESTATE
   55  CONSISTS OF THE ADJUSTED VALUE OF REAL OR PERSONAL PROPERTY WHICH--
       S. 6359--D                         226                        A. 8559--D

    1    (I)  ON  THE DATE OF THE DECEDENT'S DEATH, WAS BEING USED FOR A QUALI-
    2  FIED USE BY THE DECEDENT OR A MEMBER OF THE DECEDENT'S FAMILY, AND
    3    (II) WAS ACQUIRED FROM OR PASSED FROM THE DECEDENT TO A QUALIFIED HEIR
    4  OF THE DECEDENT.
    5    (B)  25  PERCENT  OR  MORE  OF  THE ADJUSTED VALUE OF THE GROSS ESTATE
    6  CONSISTS OF THE ADJUSTED VALUE OF REAL PROPERTY WHICH MEETS THE REQUIRE-
    7  MENTS OF SUBPARAGRAPHS (A)(II) AND (C),
    8    (C) DURING THE 8-YEAR PERIOD ENDING ON  THE  DATE  OF  THE  DECEDENT'S
    9  DEATH THERE HAVE BEEN PERIODS AGGREGATING 5 YEARS OR MORE DURING WHICH--
   10    (I)  SUCH  REAL  PROPERTY WAS OWNED BY THE DECEDENT OR A MEMBER OF THE
   11  DECEDENT'S FAMILY AND USED FOR A QUALIFIED USE  BY  THE  DECEDENT  OR  A
   12  MEMBER OF THE DECEDENT'S FAMILY, AND
   13    (II)  THERE  WAS MATERIAL PARTICIPATION BY THE DECEDENT OR A MEMBER OF
   14  THE DECEDENT'S FAMILY IN THE OPERATION OF THE FARM  OR  OTHER  BUSINESS,
   15  AND
   16    (D)  SUCH  REAL PROPERTY IS DESIGNATED IN THE AGREEMENT REFERRED TO IN
   17  SUBSECTION (D)(2).
   18    (2) QUALIFIED USE.--FOR PURPOSES OF THIS SECTION, THE TERM  "QUALIFIED
   19  USE" MEANS THE DEVOTION OF THE PROPERTY TO ANY OF THE FOLLOWING:
   20    (A) USE AS A FARM FOR FARMING PURPOSES, OR
   21    (B)  USE  IN  A  TRADE OR BUSINESS OTHER THAN THE TRADE OR BUSINESS OF
   22  FARMING.
   23    (3) ADJUSTED VALUE.--FOR PURPOSES OF PARAGRAPH (1), THE TERM "ADJUSTED
   24  VALUE" MEANS--
   25    (A) IN THE CASE OF THE GROSS ESTATE, THE VALUE OF THE GROSS ESTATE FOR
   26  PURPOSES OF THIS CHAPTER (DETERMINED WITHOUT REGARD  TO  THIS  SECTION),
   27  REDUCED  BY  ANY AMOUNTS ALLOWABLE AS A DEDUCTION UNDER PARAGRAPH (4) OF
   28  SECTION 2053(A), OR
   29    (B) IN THE CASE OF ANY REAL OR PERSONAL PROPERTY, THE  VALUE  OF  SUCH
   30  PROPERTY FOR PURPOSES OF THIS CHAPTER (DETERMINED WITHOUT REGARD TO THIS
   31  SECTION),  REDUCED BY ANY AMOUNTS ALLOWABLE AS A DEDUCTION IN RESPECT OF
   32  SUCH PROPERTY UNDER PARAGRAPH (4) OF SECTION 2053(A).
   33    (4) DECEDENTS WHO ARE RETIRED OR DISABLED.--
   34    (A) IN GENERAL.--IF, ON THE DATE OF THE DECEDENT'S DEATH, THE REQUIRE-
   35  MENTS OF PARAGRAPH (1)(C)(II) WITH RESPECT TO THE DECEDENT FOR ANY PROP-
   36  ERTY ARE NOT MET, AND THE DECEDENT--
   37    (I) WAS RECEIVING OLD-AGE BENEFITS UNDER TITLE II OF THE SOCIAL  SECU-
   38  RITY ACT FOR A CONTINUOUS PERIOD ENDING ON SUCH DATE, OR
   39    (II) WAS DISABLED FOR A CONTINUOUS PERIOD ENDING ON SUCH DATE,
   40    THEN  PARAGRAPH (1)(C)(II) SHALL BE APPLIED WITH RESPECT TO SUCH PROP-
   41  ERTY BY SUBSTITUTING "THE DATE ON WHICH THE LONGER  OF  SUCH  CONTINUOUS
   42  PERIODS  BEGAN"  FOR  "THE  DATE  OF  THE DECEDENT'S DEATH" IN PARAGRAPH
   43  (1)(C).
   44    (B) DISABLED DEFINED.--FOR PURPOSES OF SUBPARAGRAPH (A), AN INDIVIDUAL
   45  SHALL BE DISABLED IF SUCH INDIVIDUAL HAS A MENTAL OR PHYSICAL IMPAIRMENT
   46  WHICH RENDERS HIM UNABLE TO MATERIALLY PARTICIPATE IN THE  OPERATION  OF
   47  THE FARM OR OTHER BUSINESS.
   48    (C)   COORDINATION   WITH   RECAPTURE.--FOR   PURPOSES  OF  SUBSECTION
   49  (C)(6)(B)(I), IF THE REQUIREMENTS OF PARAGRAPH (1)(C)(II) ARE  MET  WITH
   50  RESPECT TO ANY DECEDENT BY REASON OF SUBPARAGRAPH (A), THE PERIOD ENDING
   51  ON  THE  DATE  ON  WHICH  THE CONTINUOUS PERIOD TAKEN INTO ACCOUNT UNDER
   52  SUBPARAGRAPH (A) BEGAN SHALL BE TREATED AS THE PERIOD IMMEDIATELY BEFORE
   53  THE DECEDENT'S DEATH.
   54    (5) SPECIAL RULES FOR SURVIVING SPOUSES.--
   55    (A) IN GENERAL.--IF PROPERTY IS QUALIFIED REAL PROPERTY  WITH  RESPECT
   56  TO  A  DECEDENT (HEREINAFTER IN THIS PARAGRAPH REFERRED TO AS THE "FIRST
       S. 6359--D                         227                        A. 8559--D

    1  DECEDENT") AND SUCH PROPERTY WAS ACQUIRED FROM OR PASSED FROM THE  FIRST
    2  DECEDENT  TO THE SURVIVING SPOUSE OF THE FIRST DECEDENT, FOR PURPOSES OF
    3  APPLYING THIS SUBSECTION AND SUBSECTION (C) IN THE CASE OF THE ESTATE OF
    4  SUCH  SURVIVING  SPOUSE, ACTIVE MANAGEMENT OF THE FARM OR OTHER BUSINESS
    5  BY THE SURVIVING SPOUSE SHALL BE TREATED AS  MATERIAL  PARTICIPATION  BY
    6  SUCH SURVIVING SPOUSE IN THE OPERATION OF SUCH FARM OR BUSINESS.
    7    (B)  SPECIAL RULE.--FOR THE PURPOSES OF SUBPARAGRAPH (A), THE DETERMI-
    8  NATION OF WHETHER PROPERTY IS QUALIFIED REAL PROPERTY  WITH  RESPECT  TO
    9  THE  FIRST  DECEDENT SHALL BE MADE WITHOUT REGARD TO SUBPARAGRAPH (D) OF
   10  PARAGRAPH (1) AND WITHOUT REGARD  TO  WHETHER  AN  ELECTION  UNDER  THIS
   11  SECTION WAS MADE.
   12    (C)  COORDINATION  WITH  PARAGRAPH (4).--IN ANY CASE IN WHICH TO DO SO
   13  WILL ENABLE THE REQUIREMENTS OF PARAGRAPH  (1)(C)(II)  TO  BE  MET  WITH
   14  RESPECT  TO  THE  SURVIVING  SPOUSE,  THIS SUBSECTION AND SUBSECTION (C)
   15  SHALL BE APPLIED BY TAKING INTO ACCOUNT  ANY  APPLICATION  OF  PARAGRAPH
   16  (4).
   17    (C)  TAX  TREATMENT  OF DISPOSITIONS AND FAILURES TO USE FOR QUALIFIED
   18  USE.--
   19    (1) IMPOSITION OF ADDITIONAL ESTATE TAX.--IF, WITHIN  10  YEARS  AFTER
   20  THE DECEDENT'S DEATH AND BEFORE THE DEATH OF THE QUALIFIED HEIR--
   21    (A)  THE  QUALIFIED  HEIR  DISPOSES  OF ANY INTEREST IN QUALIFIED REAL
   22  PROPERTY (OTHER THAN BY A DISPOSITION TO A MEMBER OF HIS FAMILY), OR
   23    (B) THE QUALIFIED HEIR CEASES TO USE FOR THE QUALIFIED USE THE  QUALI-
   24  FIED REAL PROPERTY WHICH WAS ACQUIRED (OR PASSED) FROM THE DECEDENT,
   25    THEN, THERE IS HEREBY IMPOSED AN ADDITIONAL ESTATE TAX.
   26    (2) AMOUNT OF ADDITIONAL TAX.--
   27    (A) IN GENERAL.--THE AMOUNT OF THE ADDITIONAL TAX IMPOSED BY PARAGRAPH
   28  (1) WITH RESPECT TO ANY INTEREST SHALL BE THE AMOUNT EQUAL TO THE LESSER
   29  OF--
   30    (I) THE ADJUSTED TAX DIFFERENCE ATTRIBUTABLE TO SUCH INTEREST, OR
   31    (II)  THE  EXCESS  OF THE AMOUNT REALIZED WITH RESPECT TO THE INTEREST
   32  (OR, IN ANY CASE OTHER THAN A SALE OR EXCHANGE AT ARM'S LENGTH, THE FAIR
   33  MARKET VALUE OF THE INTEREST) OVER THE VALUE OF THE INTEREST  DETERMINED
   34  UNDER SUBSECTION (A).
   35    (B) ADJUSTED TAX DIFFERENCE ATTRIBUTABLE TO INTEREST.--FOR PURPOSES OF
   36  SUBPARAGRAPH  (A), THE ADJUSTED TAX DIFFERENCE ATTRIBUTABLE TO AN INTER-
   37  EST IS THE AMOUNT WHICH BEARS THE SAME RATIO TO THE ADJUSTED TAX DIFFER-
   38  ENCE WITH RESPECT TO THE ESTATE (DETERMINED UNDER SUBPARAGRAPH (C)) AS--
   39    (I) THE EXCESS OF THE VALUE OF SUCH  INTEREST  FOR  PURPOSES  OF  THIS
   40  CHAPTER  (DETERMINED WITHOUT REGARD TO SUBSECTION (A)) OVER THE VALUE OF
   41  SUCH INTEREST DETERMINED UNDER SUBSECTION (A), BEARS TO
   42    (II) A SIMILAR EXCESS DETERMINED FOR ALL QUALIFIED REAL PROPERTY.
   43    (C) ADJUSTED TAX DIFFERENCE WITH RESPECT TO THE ESTATE.--FOR  PURPOSES
   44  OF  SUBPARAGRAPH  (B), THE TERM "ADJUSTED TAX DIFFERENCE WITH RESPECT TO
   45  THE ESTATE" MEANS THE EXCESS OF WHAT WOULD  HAVE  BEEN  THE  ESTATE  TAX
   46  LIABILITY  BUT  FOR  SUBSECTION  (A)  OVER THE ESTATE TAX LIABILITY. FOR
   47  PURPOSES OF THIS SUBPARAGRAPH, THE TERM "ESTATE TAX LIABILITY" MEANS THE
   48  TAX IMPOSED BY SECTION 2001 REDUCED BY  THE  CREDITS  ALLOWABLE  AGAINST
   49  SUCH TAX.
   50    (D)  PARTIAL  DISPOSITIONS.--FOR PURPOSES OF THIS PARAGRAPH, WHERE THE
   51  QUALIFIED HEIR DISPOSES OF A PORTION OF THE  INTEREST  ACQUIRED  BY  (OR
   52  PASSING  TO)  SUCH  HEIR (OR A PREDECESSOR QUALIFIED HEIR) OR THERE IS A
   53  CESSATION OF USE OF SUCH A PORTION--
   54    (I) THE VALUE DETERMINED UNDER SUBSECTION (A) TAKEN INTO ACCOUNT UNDER
   55  SUBPARAGRAPH (A)(II) WITH RESPECT TO SUCH PORTION SHALL BE ITS PRO  RATA
   56  SHARE OF SUCH VALUE OF SUCH INTEREST, AND
       S. 6359--D                         228                        A. 8559--D

    1    (II)  THE  ADJUSTED  TAX DIFFERENCE ATTRIBUTABLE TO THE INTEREST TAKEN
    2  INTO ACCOUNT WITH RESPECT TO THE TRANSACTION INVOLVING THE SECOND OR ANY
    3  SUCCEEDING PORTION SHALL BE REDUCED BY THE AMOUNT OF THE TAX IMPOSED  BY
    4  THIS  SUBSECTION  WITH  RESPECT  TO  ALL  PRIOR  TRANSACTIONS  INVOLVING
    5  PORTIONS OF SUCH INTEREST.
    6    (E)  SPECIAL RULE FOR DISPOSITION OF TIMBER.--IN THE CASE OF QUALIFIED
    7  WOODLAND TO WHICH AN ELECTION UNDER SUBSECTION  (E)(13)(A)  APPLIES,  IF
    8  THE  QUALIFIED  HEIR DISPOSES OF (OR SEVERS) ANY STANDING TIMBER ON SUCH
    9  QUALIFIED WOODLAND--
   10    (I) SUCH DISPOSITION (OR SEVERANCE) SHALL BE TREATED AS A  DISPOSITION
   11  OF A PORTION OF THE INTEREST OF THE QUALIFIED HEIR IN SUCH PROPERTY, AND
   12    (II)  THE  AMOUNT  OF THE ADDITIONAL TAX IMPOSED BY PARAGRAPH (1) WITH
   13  RESPECT TO SUCH DISPOSITION SHALL BE AN AMOUNT EQUAL TO THE LESSER OF--
   14    (I) THE AMOUNT REALIZED ON SUCH DISPOSITION (OR,  IN  ANY  CASE  OTHER
   15  THAN  A  SALE  OR EXCHANGE AT ARM'S LENGTH, THE FAIR MARKET VALUE OF THE
   16  PORTION OF THE INTEREST DISPOSED OR SEVERED), OR
   17    (II) THE AMOUNT OF ADDITIONAL  TAX  DETERMINED  UNDER  THIS  PARAGRAPH
   18  (WITHOUT  REGARD  TO  THIS  SUBPARAGRAPH)  IF THE ENTIRE INTEREST OF THE
   19  QUALIFIED HEIR IN THE QUALIFIED WOODLAND HAD BEEN DISPOSED OF, LESS  THE
   20  SUM  OF  THE  AMOUNT  OF  THE ADDITIONAL TAX IMPOSED WITH RESPECT TO ALL
   21  PRIOR TRANSACTIONS INVOLVING SUCH WOODLAND TO  WHICH  THIS  SUBPARAGRAPH
   22  APPLIED.
   23    FOR  PURPOSES OF THE PRECEDING SENTENCE, THE DISPOSITION OF A RIGHT TO
   24  SEVER SHALL BE TREATED AS THE DISPOSITION OF THE  STANDING  TIMBER.  THE
   25  AMOUNT  OF  ADDITIONAL  TAX  IMPOSED  UNDER PARAGRAPH (1) IN ANY CASE IN
   26  WHICH A QUALIFIED HEIR DISPOSES OF HIS ENTIRE INTEREST IN THE  QUALIFIED
   27  WOODLAND  SHALL  BE REDUCED BY ANY AMOUNT DETERMINED UNDER THIS SUBPARA-
   28  GRAPH WITH RESPECT TO SUCH WOODLAND.
   29    (3) ONLY 1 ADDITIONAL TAX IMPOSED WITH RESPECT TO ANY  1  PORTION.--IN
   30  THE CASE OF AN INTEREST ACQUIRED FROM (OR PASSING FROM) ANY DECEDENT, IF
   31  SUBPARAGRAPH  (A)  OR  (B) OF PARAGRAPH (1) APPLIES TO ANY PORTION OF AN
   32  INTEREST, SUBPARAGRAPH (B) OR (A), AS THE CASE MAY BE, OF PARAGRAPH  (1)
   33  SHALL NOT APPLY WITH RESPECT TO THE SAME PORTION OF SUCH INTEREST.
   34    (4)  DUE  DATE.--THE  ADDITIONAL  TAX IMPOSED BY THIS SUBSECTION SHALL
   35  BECOME DUE AND PAYABLE ON THE DAY WHICH IS 6 MONTHS AFTER  THE  DATE  OF
   36  THE DISPOSITION OR CESSATION REFERRED TO IN PARAGRAPH (1).
   37    (5)  LIABILITY  FOR TAX; FURNISHING OF BOND.--THE QUALIFIED HEIR SHALL
   38  BE PERSONALLY LIABLE FOR THE ADDITIONAL TAX IMPOSED BY  THIS  SUBSECTION
   39  WITH  RESPECT  TO  HIS INTEREST UNLESS THE HEIR HAS FURNISHED BOND WHICH
   40  MEETS THE REQUIREMENTS OF SUBSECTION (E)(11).
   41    (6) CESSATION OF QUALIFIED USE.--FOR  PURPOSES  OF  PARAGRAPH  (1)(B),
   42  REAL PROPERTY SHALL CEASE TO BE USED FOR THE QUALIFIED USE IF--
   43    (A) SUCH PROPERTY CEASES TO BE USED FOR THE QUALIFIED USE SET FORTH IN
   44  SUBPARAGRAPH  (A)  OR  (B) OF SUBSECTION (B)(2) UNDER WHICH THE PROPERTY
   45  QUALIFIED UNDER SUBSECTION (B), OR
   46    (B) DURING ANY PERIOD  OF  8  YEARS  ENDING  AFTER  THE  DATE  OF  THE
   47  DECEDENT'S DEATH AND BEFORE THE DATE OF THE DEATH OF THE QUALIFIED HEIR,
   48  THERE HAD BEEN PERIODS AGGREGATING MORE THAN 3 YEARS DURING WHICH--
   49    (I)  IN  THE CASE OF PERIODS DURING WHICH THE PROPERTY WAS HELD BY THE
   50  DECEDENT, THERE WAS NO MATERIAL PARTICIPATION BY  THE  DECEDENT  OR  ANY
   51  MEMBER OF HIS FAMILY IN THE OPERATION OF THE FARM OR OTHER BUSINESS, AND
   52    (II)  IN THE CASE OF PERIODS DURING WHICH THE PROPERTY WAS HELD BY ANY
   53  QUALIFIED HEIR, THERE WAS NO MATERIAL PARTICIPATION  BY  SUCH  QUALIFIED
   54  HEIR  OR  ANY MEMBER OF HIS FAMILY IN THE OPERATION OF THE FARM OR OTHER
   55  BUSINESS.
   56    (7) SPECIAL RULES.--
       S. 6359--D                         229                        A. 8559--D

    1    (A) NO TAX IF USE BEGINS WITHIN 2 YEARS.--IF THE  DATE  ON  WHICH  THE
    2  QUALIFIED HEIR BEGINS TO USE THE QUALIFIED REAL PROPERTY (HEREINAFTER IN
    3  THIS  SUBPARAGRAPH  REFERRED  TO AS THE COMMENCEMENT DATE) IS BEFORE THE
    4  DATE 2 YEARS AFTER THE DECEDENT'S DEATH--
    5    (I) NO TAX SHALL BE IMPOSED UNDER PARAGRAPH (1) BY REASON OF THE FAIL-
    6  URE  BY  THE QUALIFIED HEIR TO SO USE SUCH PROPERTY BEFORE THE COMMENCE-
    7  MENT DATE, AND
    8    (II) THE 10-YEAR PERIOD UNDER PARAGRAPH (1) SHALL BE EXTENDED  BY  THE
    9  PERIOD AFTER THE DECEDENT'S DEATH AND BEFORE THE COMMENCEMENT DATE.
   10    (B)  ACTIVE  MANAGEMENT BY ELIGIBLE QUALIFIED HEIR TREATED AS MATERIAL
   11  PARTICIPATION.--FOR PURPOSES OF PARAGRAPH (6)(B)(II), THE ACTIVE MANAGE-
   12  MENT OF A FARM OR OTHER BUSINESS BY--
   13    (I) AN ELIGIBLE QUALIFIED HEIR, OR
   14    (II) A FIDUCIARY OF AN ELIGIBLE QUALIFIED  HEIR  DESCRIBED  IN  CLAUSE
   15  (II) OR (III) OF SUBPARAGRAPH (C),
   16    SHALL  BE TREATED AS MATERIAL PARTICIPATION BY SUCH ELIGIBLE QUALIFIED
   17  HEIR IN THE OPERATION OF SUCH FARM OR BUSINESS. IN THE CASE OF AN ELIGI-
   18  BLE QUALIFIED HEIR DESCRIBED IN CLAUSE (II), (III), OR (IV) OF  SUBPARA-
   19  GRAPH (C), THE PRECEDING SENTENCE SHALL APPLY ONLY DURING PERIODS DURING
   20  WHICH SUCH HEIR MEETS THE REQUIREMENTS OF SUCH CLAUSE.
   21    (C) ELIGIBLE QUALIFIED HEIR.--FOR PURPOSES OF THIS PARAGRAPH, THE TERM
   22  "ELIGIBLE QUALIFIED HEIR" MEANS A QUALIFIED HEIR WHO--
   23    (I) IS THE SURVIVING SPOUSE OF THE DECEDENT,
   24    (II) HAS NOT ATTAINED THE AGE OF 21,
   25    (III) IS DISABLED (WITHIN THE MEANING OF SUBSECTION (B)(4)(B)), OR
   26    (IV) IS A STUDENT.
   27    (D) STUDENT.--FOR PURPOSES OF SUBPARAGRAPH (C), AN INDIVIDUAL SHALL BE
   28  TREATED AS A STUDENT WITH RESPECT TO PERIODS DURING ANY CALENDAR YEAR IF
   29  (AND  ONLY  IF)  SUCH  INDIVIDUAL  IS  A  STUDENT (WITHIN THE MEANING OF
   30  SECTION 152(F)(2)) FOR SUCH CALENDAR YEAR.
   31    (E) CERTAIN RENTS TREATED AS  QUALIFIED  USE.--FOR  PURPOSES  OF  THIS
   32  SUBSECTION,  A  SURVIVING  SPOUSE  OR  LINEAL DESCENDANT OF THE DECEDENT
   33  SHALL NOT BE TREATED AS FAILING TO USE  QUALIFIED  REAL  PROPERTY  IN  A
   34  QUALIFIED  USE SOLELY BECAUSE SUCH SPOUSE OR DESCENDANT RENTS SUCH PROP-
   35  ERTY TO A MEMBER OF THE FAMILY OF SUCH SPOUSE OR  DESCENDANT  ON  A  NET
   36  CASH  BASIS.  FOR  PURPOSES OF THE PRECEDING SENTENCE, A LEGALLY ADOPTED
   37  CHILD OF AN INDIVIDUAL SHALL BE TREATED AS THE CHILD OF SUCH  INDIVIDUAL
   38  BY BLOOD.
   39    (8) QUALIFIED CONSERVATION CONTRIBUTION IS NOT A DISPOSITION.--A QUAL-
   40  IFIED  CONSERVATION  CONTRIBUTION (AS DEFINED IN SECTION 170(H)) BY GIFT
   41  OR  OTHERWISE  SHALL  NOT  BE  DEEMED  A  DISPOSITION  UNDER  SUBSECTION
   42  (C)(1)(A).
   43    (D) ELECTION; AGREEMENT.--
   44    (1)  ELECTION.--THE  ELECTION  UNDER THIS SECTION SHALL BE MADE ON THE
   45  RETURN OF THE TAX IMPOSED BY SECTION 2001. SUCH ELECTION SHALL  BE  MADE
   46  IN  SUCH MANNER AS THE SECRETARY SHALL BY REGULATIONS PRESCRIBE. SUCH AN
   47  ELECTION, ONCE MADE, SHALL BE IRREVOCABLE.
   48    (2) AGREEMENT.--THE AGREEMENT REFERRED TO IN THIS PARAGRAPH IS A WRIT-
   49  TEN AGREEMENT SIGNED BY EACH PERSON IN BEING WHO HAS AN INTEREST (WHETH-
   50  ER OR NOT IN POSSESSION) IN ANY PROPERTY DESIGNATED  IN  SUCH  AGREEMENT
   51  CONSENTING  TO  THE  APPLICATION  OF SUBSECTION (C) WITH RESPECT TO SUCH
   52  PROPERTY.
   53    (3) MODIFICATION OF  ELECTION  AND  AGREEMENT  TO  BE  PERMITTED.--THE
   54  SECRETARY  SHALL  PRESCRIBE PROCEDURES WHICH PROVIDE THAT IN ANY CASE IN
   55  WHICH THE EXECUTOR MAKES AN ELECTION UNDER PARAGRAPH  (1)  (AND  SUBMITS
       S. 6359--D                         230                        A. 8559--D

    1  THE  AGREEMENT  REFERRED TO IN PARAGRAPH (2)) WITHIN THE TIME PRESCRIBED
    2  THEREFOR, BUT--
    3    (A)  THE  NOTICE  OF ELECTION, AS FILED, DOES NOT CONTAIN ALL REQUIRED
    4  INFORMATION, OR
    5    (B) SIGNATURES OF 1 OR MORE PERSONS REQUIRED TO ENTER INTO THE  AGREE-
    6  MENT  DESCRIBED  IN  PARAGRAPH  (2) ARE NOT INCLUDED ON THE AGREEMENT AS
    7  FILED, OR THE AGREEMENT DOES NOT CONTAIN ALL REQUIRED INFORMATION,
    8    THE EXECUTOR WILL HAVE A REASONABLE PERIOD OF TIME (NOT  EXCEEDING  90
    9  DAYS) AFTER NOTIFICATION OF SUCH FAILURES TO PROVIDE SUCH INFORMATION OR
   10  SIGNATURES.
   11    (E) DEFINITIONS; SPECIAL RULES.--FOR PURPOSES OF THIS SECTION--
   12    (1)  QUALIFIED HEIR.--THE TERM "QUALIFIED HEIR" MEANS, WITH RESPECT TO
   13  ANY PROPERTY, A MEMBER OF THE DECEDENT'S FAMILY WHO ACQUIRED SUCH  PROP-
   14  ERTY (OR TO WHOM SUCH PROPERTY PASSED) FROM THE DECEDENT. IF A QUALIFIED
   15  HEIR  DISPOSES  OF ANY INTEREST IN QUALIFIED REAL PROPERTY TO ANY MEMBER
   16  OF HIS FAMILY, SUCH MEMBER SHALL THEREAFTER BE TREATED AS THE  QUALIFIED
   17  HEIR WITH RESPECT TO SUCH INTEREST.
   18    (2)  MEMBER  OF  FAMILY.--THE  TERM "MEMBER OF THE FAMILY" MEANS, WITH
   19  RESPECT TO ANY INDIVIDUAL, ONLY--
   20    (A) AN ANCESTOR OF SUCH INDIVIDUAL,
   21    (B) THE SPOUSE OF SUCH INDIVIDUAL,
   22    (C) A LINEAL DESCENDANT  OF  SUCH  INDIVIDUAL,  OF  SUCH  INDIVIDUAL'S
   23  SPOUSE, OR OF A PARENT OF SUCH INDIVIDUAL, OR
   24    (D) THE SPOUSE OF ANY LINEAL DESCENDANT DESCRIBED IN SUBPARAGRAPH (C).
   25    FOR  PURPOSES OF THE PRECEDING SENTENCE, A LEGALLY ADOPTED CHILD OF AN
   26  INDIVIDUAL SHALL BE TREATED AS THE CHILD OF SUCH INDIVIDUAL BY BLOOD.
   27    (3) CERTAIN REAL PROPERTY INCLUDED.--IN  THE  CASE  OF  REAL  PROPERTY
   28  WHICH  MEETS  THE REQUIREMENTS OF SUBPARAGRAPH (C) OF SUBSECTION (B)(1),
   29  RESIDENTIAL BUILDINGS AND RELATED IMPROVEMENTS  ON  SUCH  REAL  PROPERTY
   30  OCCUPIED ON A REGULAR BASIS BY THE OWNER OR LESSEE OF SUCH REAL PROPERTY
   31  OR  BY PERSONS EMPLOYED BY SUCH OWNER OR LESSEE FOR THE PURPOSE OF OPER-
   32  ATING OR MAINTAINING SUCH REAL PROPERTY, AND ROADS, BUILDINGS, AND OTHER
   33  STRUCTURES AND IMPROVEMENTS FUNCTIONALLY RELATED TO  THE  QUALIFIED  USE
   34  SHALL BE TREATED AS REAL PROPERTY DEVOTED TO THE QUALIFIED USE.
   35    (4)  FARM.--THE  TERM  "FARM"  INCLUDES  STOCK, DAIRY, POULTRY, FRUIT,
   36  FURBEARING ANIMAL, AND TRUCK  FARMS,  PLANTATIONS,  RANCHES,  NURSERIES,
   37  RANGES,  GREENHOUSES  OR OTHER SIMILAR STRUCTURES USED PRIMARILY FOR THE
   38  RAISING OF AGRICULTURAL OR HORTICULTURAL COMMODITIES, AND  ORCHARDS  AND
   39  WOODLANDS.
   40    (5) FARMING PURPOSES.--THE TERM "FARMING PURPOSES" MEANS-
   41    (A)  CULTIVATING THE SOIL OR RAISING OR HARVESTING ANY AGRICULTURAL OR
   42  HORTICULTURAL  COMMODITY  (INCLUDING  THE  RAISING,  SHEARING,  FEEDING,
   43  CARING FOR, TRAINING, AND MANAGEMENT OF ANIMALS) ON A FARM;
   44    (B) HANDLING, DRYING, PACKING, GRADING, OR STORING ON A FARM ANY AGRI-
   45  CULTURAL  OR  HORTICULTURAL  COMMODITY  IN ITS UNMANUFACTURED STATE, BUT
   46  ONLY IF THE OWNER, TENANT, OR OPERATOR OF THE  FARM  REGULARLY  PRODUCES
   47  MORE THAN ONE-HALF OF THE COMMODITY SO TREATED; AND
   48    (C)(I) THE PLANTING, CULTIVATING, CARING FOR, OR CUTTING OF TREES, OR
   49    (II) THE PREPARATION (OTHER THAN MILLING) OF TREES FOR MARKET.
   50    (6)  MATERIAL  PARTICIPATION.--MATERIAL  PARTICIPATION SHALL BE DETER-
   51  MINED IN A MANNER SIMILAR TO THE MANNER USED FOR PURPOSES  OF  PARAGRAPH
   52  (1) OF SECTION 1402(A) (RELATING TO NET EARNINGS FROM SELF-EMPLOYMENT).
   53    (7) METHOD OF VALUING FARMS.--
   54    (A)  IN GENERAL.--EXCEPT AS PROVIDED IN SUBPARAGRAPH (B), THE VALUE OF
   55  A FARM FOR FARMING PURPOSES SHALL BE DETERMINED BY DIVIDING--
       S. 6359--D                         231                        A. 8559--D

    1    (I) THE EXCESS OF THE AVERAGE ANNUAL GROSS CASH RENTAL FOR  COMPARABLE
    2  LAND  USED FOR FARMING PURPOSES AND LOCATED IN THE LOCALITY OF SUCH FARM
    3  OVER THE AVERAGE ANNUAL STATE AND  LOCAL  REAL  ESTATE  TAXES  FOR  SUCH
    4  COMPARABLE LAND, BY
    5    (II)  THE  AVERAGE  ANNUAL EFFECTIVE INTEREST RATE FOR ALL NEW FEDERAL
    6  LAND BANK LOANS.
    7    FOR PURPOSES OF THE PRECEDING SENTENCE, EACH AVERAGE  ANNUAL  COMPUTA-
    8  TION  SHALL  BE  MADE  ON  THE BASIS OF THE 5 MOST RECENT CALENDAR YEARS
    9  ENDING BEFORE THE DATE OF THE DECEDENT'S DEATH.
   10    (B) VALUE BASED ON NET SHARE RENTAL IN CERTAIN CASES.--
   11    (I) IN GENERAL.--IF THERE IS NO COMPARABLE LAND FROM WHICH THE AVERAGE
   12  ANNUAL GROSS CASH RENTAL MAY BE DETERMINED BUT THERE IS COMPARABLE  LAND
   13  FROM  WHICH THE AVERAGE NET SHARE RENTAL MAY BE DETERMINED, SUBPARAGRAPH
   14  (A)(I) SHALL BE  APPLIED  BY  SUBSTITUTING  "AVERAGE  ANNUAL  NET  SHARE
   15  RENTAL" FOR "AVERAGE ANNUAL GROSS CASH RENTAL".
   16    (II)  NET SHARE RENTAL.--FOR PURPOSES OF THIS PARAGRAPH, THE TERM "NET
   17  SHARE RENTAL" MEANS THE EXCESS OF--
   18    (I) THE VALUE OF THE PRODUCE RECEIVED BY THE LESSOR  OF  THE  LAND  ON
   19  WHICH SUCH PRODUCE IS GROWN, OVER
   20    (II)  THE CASH OPERATING EXPENSES OF GROWING SUCH PRODUCE WHICH, UNDER
   21  THE LEASE, ARE PAID BY THE LESSOR.
   22    (C) EXCEPTION.--THE FORMULA PROVIDED BY SUBPARAGRAPH (A) SHALL NOT  BE
   23  USED--
   24    (I)  WHERE  IT  IS  ESTABLISHED  THAT THERE IS NO COMPARABLE LAND FROM
   25  WHICH THE AVERAGE ANNUAL GROSS CASH RENTAL MAY BE DETERMINED, OR
   26    (II) WHERE THE EXECUTOR ELECTS TO HAVE THE VALUE OF THE FARM FOR FARM-
   27  ING PURPOSES DETERMINED AND THAT THERE IS NO COMPARABLE LAND FROM  WHICH
   28  THE AVERAGE NET SHARE RENTAL MAY BE DETERMINED UNDER PARAGRAPH (8).
   29    (8)  METHOD  OF  VALUING CLOSELY HELD BUSINESS INTERESTS, ETC.--IN ANY
   30  CASE TO WHICH PARAGRAPH (7)(A) DOES NOT  APPLY,  THE  FOLLOWING  FACTORS
   31  SHALL APPLY IN DETERMINING THE VALUE OF ANY QUALIFIED REAL PROPERTY:
   32    (A) THE CAPITALIZATION OF INCOME WHICH THE PROPERTY CAN BE EXPECTED TO
   33  YIELD  FOR  FARMING  OR CLOSELY HELD BUSINESS PURPOSES OVER A REASONABLE
   34  PERIOD OF TIME  UNDER  PRUDENT  MANAGEMENT  USING  TRADITIONAL  CROPPING
   35  PATTERNS  FOR  THE  AREA,  TAKING  INTO  ACCOUNT  SOIL CAPACITY, TERRAIN
   36  CONFIGURATION, AND SIMILAR FACTORS,
   37    (B) THE CAPITALIZATION OF THE FAIR RENTAL VALUE OF THE LAND FOR  FARM-
   38  LAND OR CLOSELY HELD BUSINESS PURPOSES,
   39    (C)  ASSESSED  LAND VALUES IN A STATE WHICH PROVIDES A DIFFERENTIAL OR
   40  USE VALUE ASSESSMENT LAW FOR FARMLAND OR CLOSELY HELD BUSINESS,
   41    (D) COMPARABLE SALES OF OTHER FARM OR CLOSELY HELD  BUSINESS  LAND  IN
   42  THE  SAME  GEOGRAPHICAL  AREA  FAR ENOUGH REMOVED FROM A METROPOLITAN OR
   43  RESORT AREA SO THAT NONAGRICULTURAL USE IS NOT A SIGNIFICANT  FACTOR  IN
   44  THE SALES PRICE, AND
   45    (E)  ANY  OTHER  FACTOR  WHICH  FAIRLY VALUES THE FARM OR CLOSELY HELD
   46  BUSINESS VALUE OF THE PROPERTY.
   47    (9) PROPERTY ACQUIRED FROM DECEDENT.--PROPERTY SHALL BE CONSIDERED  TO
   48  HAVE BEEN ACQUIRED FROM OR TO HAVE PASSED FROM THE DECEDENT IF--
   49    (A)  SUCH PROPERTY IS SO CONSIDERED UNDER SECTION 1014(B) (RELATING TO
   50  BASIS OF PROPERTY ACQUIRED FROM A DECEDENT),
   51    (B) SUCH PROPERTY IS ACQUIRED BY ANY PERSON FROM THE ESTATE, OR
   52    (C) SUCH PROPERTY IS ACQUIRED BY ANY  PERSON  FROM  A  TRUST  (TO  THE
   53  EXTENT SUCH PROPERTY IS INCLUDIBLE IN THE GROSS ESTATE OF THE DECEDENT).
   54    (10)  COMMUNITY PROPERTY.--IF THE DECEDENT AND HIS SURVIVING SPOUSE AT
   55  ANY TIME HELD QUALIFIED REAL PROPERTY AS COMMUNITY PROPERTY, THE  INTER-
   56  EST OF THE SURVIVING SPOUSE IN SUCH PROPERTY SHALL BE TAKEN INTO ACCOUNT
       S. 6359--D                         232                        A. 8559--D

    1  UNDER  THIS  SECTION  TO  THE EXTENT NECESSARY TO PROVIDE A RESULT UNDER
    2  THIS SECTION WITH RESPECT TO SUCH PROPERTY WHICH IS CONSISTENT WITH  THE
    3  RESULT WHICH WOULD HAVE OBTAINED UNDER THIS SECTION IF SUCH PROPERTY HAD
    4  NOT BEEN COMMUNITY PROPERTY.
    5    (11)  BOND IN LIEU OF PERSONAL LIABILITY.--IF THE QUALIFIED HEIR MAKES
    6  WRITTEN APPLICATION TO THE SECRETARY FOR DETERMINATION  OF  THE  MAXIMUM
    7  AMOUNT OF THE ADDITIONAL TAX WHICH MAY BE IMPOSED BY SUBSECTION (C) WITH
    8  RESPECT  TO  THE  QUALIFIED  HEIR'S  INTEREST, THE SECRETARY (AS SOON AS
    9  POSSIBLE, AND IN ANY EVENT WITHIN 1 YEAR AFTER THE MAKING OF SUCH APPLI-
   10  CATION) SHALL NOTIFY THE HEIR OF  SUCH  MAXIMUM  AMOUNT.  THE  QUALIFIED
   11  HEIR,  ON FURNISHING A BOND IN SUCH AMOUNT AND FOR SUCH PERIOD AS MAY BE
   12  REQUIRED, SHALL BE DISCHARGED FROM PERSONAL LIABILITY FOR ANY ADDITIONAL
   13  TAX IMPOSED BY SUBSECTION (C) AND SHALL BE  ENTITLED  TO  A  RECEIPT  OR
   14  WRITING SHOWING SUCH DISCHARGE.
   15    (12) ACTIVE MANAGEMENT.--THE TERM "ACTIVE MANAGEMENT" MEANS THE MAKING
   16  OF  THE MANAGEMENT DECISIONS OF A BUSINESS (OTHER THAN THE DAILY OPERAT-
   17  ING DECISIONS).
   18    (13) SPECIAL RULES FOR WOODLANDS.--
   19    (A) IN GENERAL.--IN THE CASE OF ANY QUALIFIED WOODLAND WITH RESPECT TO
   20  WHICH THE EXECUTOR ELECTS TO HAVE THIS SUBPARAGRAPH APPLY, TREES GROWING
   21  ON SUCH WOODLAND SHALL NOT BE TREATED AS A CROP.
   22    (B) QUALIFIED WOODLAND.--THE TERM "QUALIFIED WOODLAND" MEANS ANY  REAL
   23  PROPERTY WHICH--
   24    (I) IS USED IN TIMBER OPERATIONS, AND
   25    (II) IS AN IDENTIFIABLE AREA OF LAND SUCH AS AN ACRE OR OTHER AREA FOR
   26  WHICH RECORDS ARE NORMALLY MAINTAINED IN CONDUCTING TIMBER OPERATIONS.
   27    (C) TIMBER OPERATIONS.--THE TERM "TIMBER OPERATIONS" MEANS--
   28    (I) THE PLANTING, CULTIVATING, CARING FOR, OR CUTTING OF TREES, OR
   29    (II) THE PREPARATION (OTHER THAN MILLING) OF TREES FOR MARKET.
   30    (D) ELECTION.--AN ELECTION UNDER SUBPARAGRAPH (A) SHALL BE MADE ON THE
   31  RETURN  OF  THE TAX IMPOSED BY SECTION 2001. SUCH ELECTION SHALL BE MADE
   32  IN SUCH MANNER AS THE SECRETARY SHALL BY REGULATIONS PRESCRIBE. SUCH  AN
   33  ELECTION, ONCE MADE, SHALL BE IRREVOCABLE.
   34    (14)  TREATMENT  OF  REPLACEMENT  PROPERTY ACQUIRED IN SECTION 1031 OR
   35  1033 TRANSACTIONS.--
   36    (A) IN GENERAL.--IN THE CASE OF ANY  QUALIFIED  REPLACEMENT  PROPERTY,
   37  ANY  PERIOD DURING WHICH THERE WAS OWNERSHIP, QUALIFIED USE, OR MATERIAL
   38  PARTICIPATION WITH RESPECT TO THE REPLACED PROPERTY BY THE  DECEDENT  OR
   39  ANY MEMBER OF HIS FAMILY SHALL BE TREATED AS A PERIOD DURING WHICH THERE
   40  WAS  SUCH OWNERSHIP, USE, OR MATERIAL PARTICIPATION (AS THE CASE MAY BE)
   41  WITH RESPECT TO THE QUALIFIED REPLACEMENT PROPERTY.
   42    (B) LIMITATION.--SUBPARAGRAPH (A) SHALL NOT APPLY TO THE  EXTENT  THAT
   43  THE  FAIR  MARKET VALUE OF THE QUALIFIED REPLACEMENT PROPERTY (AS OF THE
   44  DATE OF ITS ACQUISITION) EXCEEDS THE FAIR MARKET VALUE OF  THE  REPLACED
   45  PROPERTY (AS OF THE DATE OF ITS DISPOSITION).
   46    (C) DEFINITIONS.--FOR PURPOSES OF THIS PARAGRAPH--
   47    (I)  QUALIFIED  REPLACEMENT PROPERTY.--THE TERM "QUALIFIED REPLACEMENT
   48  PROPERTY" MEANS ANY REAL PROPERTY WHICH IS--
   49    (I) ACQUIRED IN AN EXCHANGE WHICH QUALIFIES UNDER SECTION 1031, OR
   50    (II) THE ACQUISITION OF WHICH RESULTS IN THE  NONRECOGNITION  OF  GAIN
   51  UNDER SECTION 1033.
   52    SUCH TERM SHALL ONLY INCLUDE PROPERTY WHICH IS USED FOR THE SAME QUAL-
   53  IFIED USE AS THE REPLACED PROPERTY WAS BEING USED BEFORE THE EXCHANGE.
   54    (II) REPLACED PROPERTY.--THE TERM "REPLACED PROPERTY" MEANS--
   55    (I)  THE  PROPERTY  TRANSFERRED  IN THE EXCHANGE WHICH QUALIFIES UNDER
   56  SECTION 1031, OR
       S. 6359--D                         233                        A. 8559--D

    1    (II) THE PROPERTY COMPULSORILY OR INVOLUNTARILY CONVERTED (WITHIN  THE
    2  MEANING OF SECTION 1033).
    3    (F) STATUTE OF LIMITATIONS.--IF QUALIFIED REAL PROPERTY IS DISPOSED OF
    4  OR CEASES TO BE USED FOR A QUALIFIED USE, THEN--
    5    (1)  THE  STATUTORY  PERIOD  FOR  THE ASSESSMENT OF ANY ADDITIONAL TAX
    6  UNDER SUBSECTION (C) ATTRIBUTABLE TO SUCH DISPOSITION OR CESSATION SHALL
    7  NOT EXPIRE BEFORE THE EXPIRATION OF 3 YEARS FROM THE DATE THE  SECRETARY
    8  IS  NOTIFIED  (IN  SUCH  MANNER  AS  THE  SECRETARY  MAY  BY REGULATIONS
    9  PRESCRIBE) OF SUCH DISPOSITION OR CESSATION (OR IF LATER IN THE CASE  OF
   10  AN  INVOLUNTARY  CONVERSION  OR  EXCHANGE TO WHICH SUBSECTION (H) OR (I)
   11  APPLIES, 3 YEARS FROM THE DATE THE SECRETARY IS NOTIFIED OF THE REPLACE-
   12  MENT OF THE CONVERTED PROPERTY OR OF AN INTENTION NOT TO REPLACE  OR  OF
   13  THE EXCHANGE OF PROPERTY), AND
   14    (2)  SUCH ADDITIONAL TAX MAY BE ASSESSED BEFORE THE EXPIRATION OF SUCH
   15  3-YEAR PERIOD NOTWITHSTANDING THE PROVISIONS OF ANY OTHER LAW OR RULE OF
   16  LAW WHICH WOULD OTHERWISE PREVENT SUCH ASSESSMENT.
   17    (G) APPLICATION OF THIS SECTION AND  SECTION  6324B  TO  INTERESTS  IN
   18  PARTNERSHIPS,  CORPORATIONS,  AND TRUSTS.--THE SECRETARY SHALL PRESCRIBE
   19  REGULATIONS SETTING FORTH THE APPLICATION OF THIS  SECTION  AND  SECTION
   20  6324B IN THE CASE OF AN INTEREST IN A PARTNERSHIP, CORPORATION, OR TRUST
   21  WHICH,  WITH  RESPECT  TO THE DECEDENT, IS AN INTEREST IN A CLOSELY HELD
   22  BUSINESS (WITHIN THE MEANING OF PARAGRAPH (1) OF SECTION  6166(B)).  FOR
   23  PURPOSES OF THE PRECEDING SENTENCE, AN INTEREST IN A DISCRETIONARY TRUST
   24  ALL THE BENEFICIARIES OF WHICH ARE QUALIFIED HEIRS SHALL BE TREATED AS A
   25  PRESENT INTEREST.
   26    (H)  SPECIAL RULES FOR INVOLUNTARY CONVERSIONS OF QUALIFIED REAL PROP-
   27  ERTY.--
   28    (1) TREATMENT OF CONVERTED PROPERTY.--
   29    (A) IN GENERAL.--IF THERE IS AN INVOLUNTARY CONVERSION OF AN  INTEREST
   30  IN QUALIFIED REAL PROPERTY--
   31    (I)  NO  TAX  SHALL BE IMPOSED BY SUBSECTION (C) ON SUCH CONVERSION IF
   32  THE COST OF THE QUALIFIED REPLACEMENT PROPERTY  EQUALS  OR  EXCEEDS  THE
   33  AMOUNT REALIZED ON SUCH CONVERSION, OR
   34    (II)  IF  CLAUSE  (I) DOES NOT APPLY, THE AMOUNT OF THE TAX IMPOSED BY
   35  SUBSECTION (C) ON SUCH CONVERSION SHALL BE THE AMOUNT  DETERMINED  UNDER
   36  SUBPARAGRAPH (B).
   37    (B)  AMOUNT  OF  TAX  WHERE  THERE  IS NOT COMPLETE REINVESTMENT.--THE
   38  AMOUNT DETERMINED UNDER THIS SUBPARAGRAPH WITH RESPECT TO  ANY  INVOLUN-
   39  TARY CONVERSION IS THE AMOUNT OF THE TAX WHICH (BUT FOR THIS SUBSECTION)
   40  WOULD HAVE BEEN IMPOSED ON SUCH CONVERSION REDUCED BY AN AMOUNT WHICH--
   41    (I) BEARS THE SAME RATIO TO SUCH TAX, AS
   42    (II)  THE  COST  OF  THE  QUALIFIED  REPLACEMENT PROPERTY BEARS TO THE
   43  AMOUNT REALIZED ON THE CONVERSION.
   44    (2) TREATMENT OF REPLACEMENT  PROPERTY.--FOR  PURPOSES  OF  SUBSECTION
   45  (C)--
   46    (A)  ANY  QUALIFIED  REPLACEMENT PROPERTY SHALL BE TREATED IN THE SAME
   47  MANNER AS IF IT WERE A PORTION OF THE INTEREST IN QUALIFIED REAL PROPER-
   48  TY WHICH WAS INVOLUNTARILY CONVERTED; EXCEPT THAT WITH RESPECT  TO  SUCH
   49  QUALIFIED REPLACEMENT PROPERTY THE 10-YEAR PERIOD UNDER PARAGRAPH (1) OF
   50  SUBSECTION (C) SHALL BE EXTENDED BY ANY PERIOD, BEYOND THE 2-YEAR PERIOD
   51  REFERRED TO IN SECTION 1033(A)(2)(B)(I), DURING WHICH THE QUALIFIED HEIR
   52  WAS ALLOWED TO REPLACE THE QUALIFIED REAL PROPERTY,
   53    (B)  ANY  TAX  IMPOSED BY SUBSECTION (C) ON THE INVOLUNTARY CONVERSION
   54  SHALL BE TREATED AS A TAX IMPOSED ON A PARTIAL DISPOSITION, AND
   55    (C) PARAGRAPH (6) OF SUBSECTION (C) SHALL BE APPLIED--
       S. 6359--D                         234                        A. 8559--D

    1    (I) BY NOT TAKING INTO ACCOUNT PERIODS AFTER THE  INVOLUNTARY  CONVER-
    2  SION  AND  BEFORE THE ACQUISITION OF THE QUALIFIED REPLACEMENT PROPERTY,
    3  AND
    4    (II)  BY TREATING MATERIAL PARTICIPATION WITH RESPECT TO THE CONVERTED
    5  PROPERTY  AS  MATERIAL  PARTICIPATION  WITH  RESPECT  TO  THE  QUALIFIED
    6  REPLACEMENT PROPERTY.
    7    (3) DEFINITIONS AND SPECIAL RULES.--FOR PURPOSES OF THIS SUBSECTION--
    8    (A) INVOLUNTARY CONVERSION.--THE TERM "INVOLUNTARY CONVERSION" MEANS A
    9  COMPULSORY OR INVOLUNTARY CONVERSION WITHIN THE MEANING OF SECTION 1033.
   10    (B)  QUALIFIED  REPLACEMENT PROPERTY.--THE TERM "QUALIFIED REPLACEMENT
   11  PROPERTY" MEANS--
   12    (I) IN THE CASE OF AN  INVOLUNTARY  CONVERSION  DESCRIBED  IN  SECTION
   13  1033(A)(1),  ANY REAL PROPERTY INTO WHICH THE QUALIFIED REAL PROPERTY IS
   14  CONVERTED, OR
   15    (II) IN THE CASE OF AN INVOLUNTARY  CONVERSION  DESCRIBED  IN  SECTION
   16  1033(A)(2), ANY REAL PROPERTY PURCHASED BY THE QUALIFIED HEIR DURING THE
   17  PERIOD  SPECIFIED IN SECTION 1033(A)(2)(B) FOR PURPOSES OF REPLACING THE
   18  QUALIFIED REAL PROPERTY.
   19    SUCH TERM ONLY INCLUDES PROPERTY WHICH IS TO BE USED FOR THE QUALIFIED
   20  USE SET FORTH IN SUBPARAGRAPH (A) OR  (B)  OF  SUBSECTION  (B)(2)  UNDER
   21  WHICH THE QUALIFIED REAL PROPERTY QUALIFIED UNDER SUBSECTION (A).
   22    (4)  CERTAIN RULES MADE APPLICABLE.--THE RULES OF THE LAST SENTENCE OF
   23  SECTION 1033(A)(2)(A) SHALL APPLY FOR PURPOSES OF PARAGRAPH (3)(B)(II).
   24    (I) EXCHANGES OF QUALIFIED REAL PROPERTY.--
   25    (1) TREATMENT OF PROPERTY EXCHANGED.--
   26    (A) EXCHANGES SOLELY FOR QUALIFIED EXCHANGE PROPERTY.--IF AN  INTEREST
   27  IN QUALIFIED REAL PROPERTY IS EXCHANGED SOLELY FOR AN INTEREST IN QUALI-
   28  FIED  EXCHANGE  PROPERTY  IN A TRANSACTION WHICH QUALIFIES UNDER SECTION
   29  1031, NO TAX SHALL BE IMPOSED  BY  SUBSECTION  (C)  BY  REASON  OF  SUCH
   30  EXCHANGE.
   31    (B) EXCHANGES WHERE OTHER PROPERTY RECEIVED.--IF AN INTEREST IN QUALI-
   32  FIED  REAL  PROPERTY  IS EXCHANGED FOR AN INTEREST IN QUALIFIED EXCHANGE
   33  PROPERTY AND OTHER PROPERTY  IN  A  TRANSACTION  WHICH  QUALIFIES  UNDER
   34  SECTION  1031, THE AMOUNT OF THE TAX IMPOSED BY SUBSECTION (C) BY REASON
   35  OF SUCH EXCHANGE SHALL BE THE AMOUNT OF TAX WHICH (BUT FOR THIS SUBPARA-
   36  GRAPH) WOULD HAVE BEEN IMPOSED ON SUCH EXCHANGE UNDER SUBSECTION (C)(1),
   37  REDUCED BY AN AMOUNT WHICH--
   38    (I) BEARS THE SAME RATIO TO SUCH TAX, AS
   39    (II) THE FAIR MARKET VALUE OF THE QUALIFIED EXCHANGE PROPERTY BEARS TO
   40  THE FAIR MARKET VALUE OF THE QUALIFIED REAL PROPERTY EXCHANGED.
   41    FOR PURPOSES OF CLAUSE (II) OF THE  PRECEDING  SENTENCE,  FAIR  MARKET
   42  VALUE SHALL BE DETERMINED AS OF THE TIME OF THE EXCHANGE.
   43    (2)   TREATMENT  OF  QUALIFIED  EXCHANGE  PROPERTY.--FOR  PURPOSES  OF
   44  SUBSECTION (C)--
   45    (A) ANY INTEREST IN QUALIFIED EXCHANGE PROPERTY SHALL  BE  TREATED  IN
   46  THE  SAME  MANNER  AS  IF IT WERE A PORTION OF THE INTEREST IN QUALIFIED
   47  REAL PROPERTY WHICH WAS EXCHANGED,
   48    (B) ANY TAX IMPOSED BY SUBSECTION (C) BY REASON OF THE EXCHANGE  SHALL
   49  BE TREATED AS A TAX IMPOSED ON A PARTIAL DISPOSITION, AND
   50    (C) PARAGRAPH (6) OF SUBSECTION (C) SHALL BE APPLIED BY TREATING MATE-
   51  RIAL  PARTICIPATION  WITH  RESPECT TO THE EXCHANGED PROPERTY AS MATERIAL
   52  PARTICIPATION WITH RESPECT TO THE QUALIFIED EXCHANGE PROPERTY.
   53    (3) QUALIFIED EXCHANGE PROPERTY.--FOR PURPOSES OF THIS SUBSECTION, THE
   54  TERM "QUALIFIED EXCHANGE PROPERTY" MEANS REAL PROPERTY WHICH  IS  TO  BE
   55  USED  FOR  THE  QUALIFIED  USE  SET  FORTH IN SUBPARAGRAPH (A) OR (B) OF
       S. 6359--D                         235                        A. 8559--D

    1  SUBSECTION (B)(2) UNDER  WHICH  THE  REAL  PROPERTY  EXCHANGED  THEREFOR
    2  ORIGINALLY QUALIFIED UNDER SUBSECTION (A).
    3    S  2033.  PROPERTY IN WHICH THE DECEDENT HAD AN INTEREST. THE VALUE OF
    4  THE GROSS ESTATE SHALL INCLUDE THE VALUE OF ALL PROPERTY TO  THE  EXTENT
    5  OF THE INTEREST THEREIN OF THE DECEDENT AT THE TIME OF HIS DEATH.
    6    S  2034.  DOWER  OR  CURTESY  INTERESTS. THE VALUE OF THE GROSS ESTATE
    7  SHALL INCLUDE THE VALUE OF ALL PROPERTY TO THE EXTENT  OF  ANY  INTEREST
    8  THEREIN  OF THE SURVIVING SPOUSE, EXISTING AT THE TIME OF THE DECEDENT'S
    9  DEATH AS DOWER OR CURTESY, OR BY VIRTUE OF A STATUTE CREATING AN  ESTATE
   10  IN LIEU OF DOWER OR CURTESY.
   11    S  2035.  ADJUSTMENTS  FOR  CERTAIN  GIFTS  MADE WITHIN THREE YEARS OF
   12  DECEDENT'S  DEATH.  (A)  INCLUSION  OF   CERTAIN   PROPERTY   IN   GROSS
   13  ESTATE.--IF--
   14    (1)  THE DECEDENT MADE A TRANSFER (BY TRUST OR OTHERWISE) OF AN INTER-
   15  EST IN ANY PROPERTY, OR RELINQUISHED A POWER WITH RESPECT TO ANY PROPER-
   16  TY, DURING THE 3-YEAR PERIOD ENDING ON THE DATE OF THE DECEDENT'S DEATH,
   17  AND
   18    (2) THE VALUE OF SUCH PROPERTY (OR AN  INTEREST  THEREIN)  WOULD  HAVE
   19  BEEN  INCLUDED  IN THE DECEDENT'S GROSS ESTATE UNDER SECTION 2036, 2037,
   20  2038, OR 2042 IF SUCH TRANSFERRED INTEREST  OR  RELINQUISHED  POWER  HAD
   21  BEEN RETAINED BY THE DECEDENT ON THE DATE OF HIS DEATH,
   22    THE  VALUE OF THE GROSS ESTATE SHALL INCLUDE THE VALUE OF ANY PROPERTY
   23  (OR INTEREST THEREIN) WHICH WOULD HAVE BEEN SO INCLUDED.
   24    (B) INCLUSION OF  GIFT  TAX  ON  GIFTS  MADE  DURING  3  YEARS  BEFORE
   25  DECEDENT'S  DEATH.--THE  AMOUNT  OF THE GROSS ESTATE (DETERMINED WITHOUT
   26  REGARD TO THIS SUBSECTION) SHALL BE INCREASED BY THE AMOUNT OF  ANY  TAX
   27  PAID  UNDER CHAPTER 12 BY THE DECEDENT OR HIS ESTATE ON ANY GIFT MADE BY
   28  THE DECEDENT OR HIS SPOUSE DURING THE 3-YEAR PERIOD ENDING ON  THE  DATE
   29  OF THE DECEDENT'S DEATH.
   30    (C) OTHER RULES RELATING TO TRANSFERS WITHIN 3 YEARS OF DEATH.--
   31    (1) IN GENERAL.--FOR PURPOSES OF--
   32    (A)  SECTION  303(B) (RELATING TO DISTRIBUTIONS IN REDEMPTION OF STOCK
   33  TO PAY DEATH TAXES),
   34    (B) SECTION 2032A (RELATING TO SPECIAL  VALUATION  OF  CERTAIN  FARMS,
   35  ETC., REAL PROPERTY), AND
   36    (C) SUBCHAPTER C OF CHAPTER 64 (RELATING TO LIEN FOR TAXES),
   37    THE  VALUE OF THE GROSS ESTATE SHALL INCLUDE THE VALUE OF ALL PROPERTY
   38  TO THE EXTENT OF ANY INTEREST THEREIN OF WHICH THE DECEDENT HAS  AT  ANY
   39  TIME  MADE  A  TRANSFER, BY TRUST OR OTHERWISE, DURING THE 3-YEAR PERIOD
   40  ENDING ON THE DATE OF THE DECEDENT'S DEATH.
   41    (2) COORDINATION WITH SECTION 6166.--AN ESTATE  SHALL  BE  TREATED  AS
   42  MEETING  THE  35 PERCENT OF ADJUSTED GROSS ESTATE REQUIREMENT OF SECTION
   43  6166(A)(1) ONLY IF THE ESTATE MEETS SUCH REQUIREMENT BOTH WITH AND WITH-
   44  OUT THE APPLICATION OF SUBSECTION (A).
   45    (3) MARITAL AND SMALL TRANSFERS.--PARAGRAPH (1) SHALL NOT APPLY TO ANY
   46  TRANSFER (OTHER THAN A TRANSFER WITH RESPECT TO A LIFE INSURANCE POLICY)
   47  MADE DURING A CALENDAR YEAR  TO  ANY  DONEE  IF  THE  DECEDENT  WAS  NOT
   48  REQUIRED  BY  SECTION  6019 (OTHER THAN BY REASON OF SECTION 6019(2)) TO
   49  FILE ANY GIFT TAX RETURN FOR SUCH YEAR WITH RESPECT TO TRANSFERS TO SUCH
   50  DONEE.
   51    (D) EXCEPTION.--SUBSECTION (A) AND PARAGRAPH  (1)  OF  SUBSECTION  (C)
   52  SHALL NOT APPLY TO ANY BONA FIDE SALE FOR AN ADEQUATE AND FULL CONSIDER-
   53  ATION IN MONEY OR MONEY'S WORTH.
   54    (E)   TREATMENT  OF  CERTAIN  TRANSFERS  FROM  REVOCABLE  TRUSTS.--FOR
   55  PURPOSES OF THIS SECTION AND SECTION 2038, ANY TRANSFER FROM ANY PORTION
   56  OF A TRUST DURING ANY PERIOD THAT SUCH PORTION WAS TREATED UNDER SECTION
       S. 6359--D                         236                        A. 8559--D

    1  676 AS OWNED BY THE DECEDENT BY REASON OF A POWER IN THE GRANTOR (DETER-
    2  MINED WITHOUT REGARD TO SECTION 672(E)) SHALL BE TREATED AS  A  TRANSFER
    3  MADE DIRECTLY BY THE DECEDENT.
    4    S  2036.  TRANSFERS  WITH RETAINED LIFE ESTATE. (A) GENERAL RULE.--THE
    5  VALUE OF THE GROSS ESTATE SHALL INCLUDE THE VALUE OF ALL PROPERTY TO THE
    6  EXTENT OF ANY INTEREST THEREIN OF WHICH THE DECEDENT  HAS  AT  ANY  TIME
    7  MADE  A TRANSFER (EXCEPT IN CASE OF A BONA FIDE SALE FOR AN ADEQUATE AND
    8  FULL CONSIDERATION IN MONEY OR MONEY'S WORTH), BY  TRUST  OR  OTHERWISE,
    9  UNDER  WHICH  HE  HAS RETAINED FOR HIS LIFE OR FOR ANY PERIOD NOT ASCER-
   10  TAINABLE WITHOUT REFERENCE TO HIS DEATH OR FOR ANY PERIOD WHICH DOES NOT
   11  IN FACT END BEFORE HIS DEATH--
   12    (1) THE POSSESSION OR ENJOYMENT OF, OR THE RIGHT TO THE  INCOME  FROM,
   13  THE PROPERTY, OR
   14    (2)  THE  RIGHT,  EITHER  ALONE  OR IN CONJUNCTION WITH ANY PERSON, TO
   15  DESIGNATE THE PERSONS WHO SHALL POSSESS OR ENJOY  THE  PROPERTY  OR  THE
   16  INCOME THEREFROM.
   17    (B) VOTING RIGHTS.--
   18    (1)  IN  GENERAL.--FOR PURPOSES OF SUBSECTION (A)(1), THE RETENTION OF
   19  THE RIGHT TO  VOTE  (DIRECTLY  OR  INDIRECTLY)  SHARES  OF  STOCK  OF  A
   20  CONTROLLED  CORPORATION  SHALL  BE  CONSIDERED  TO BE A RETENTION OF THE
   21  ENJOYMENT OF TRANSFERRED PROPERTY.
   22    (2) CONTROLLED CORPORATION.--FOR PURPOSES OF PARAGRAPH (1),  A  CORPO-
   23  RATION  SHALL  BE  TREATED  AS  A CONTROLLED CORPORATION IF, AT ANY TIME
   24  AFTER THE TRANSFER OF THE PROPERTY AND DURING THE 3-YEAR  PERIOD  ENDING
   25  ON THE DATE OF THE DECEDENT'S DEATH, THE DECEDENT OWNED (WITH THE APPLI-
   26  CATION OF SECTION 318), OR HAD THE RIGHT (EITHER ALONE OR IN CONJUNCTION
   27  WITH  ANY  PERSON)  TO VOTE, STOCK POSSESSING AT LEAST 20 PERCENT OF THE
   28  TOTAL COMBINED VOTING POWER OF ALL CLASSES OF STOCK.
   29    (3) COORDINATION WITH SECTION 2035.--FOR PURPOSES OF APPLYING  SECTION
   30  2035  WITH  RESPECT TO PARAGRAPH (1), THE RELINQUISHMENT OR CESSATION OF
   31  VOTING RIGHTS SHALL BE TREATED AS A TRANSFER OF  PROPERTY  MADE  BY  THE
   32  DECEDENT.
   33    (C) LIMITATION ON APPLICATION OF GENERAL RULE.--THIS SECTION SHALL NOT
   34  APPLY  TO  A  TRANSFER MADE BEFORE MARCH 4, 1931; NOR TO A TRANSFER MADE
   35  AFTER MARCH 3, 1931, AND BEFORE JUNE 7, 1932, UNLESS THE PROPERTY TRANS-
   36  FERRED WOULD HAVE BEEN INCLUDIBLE IN  THE  DECEDENT'S  GROSS  ESTATE  BY
   37  REASON  OF  THE  AMENDATORY LANGUAGE OF THE JOINT RESOLUTION OF MARCH 3,
   38  1931 (46 STAT. 1516).
   39    S 2037. TRANSFERS TAKING EFFECT AT DEATH. (A) GENERAL RULE.--THE VALUE
   40  OF THE GROSS ESTATE SHALL INCLUDE THE  VALUE  OF  ALL  PROPERTY  TO  THE
   41  EXTENT  OF  ANY  INTEREST  THEREIN OF WHICH THE DECEDENT HAS AT ANY TIME
   42  AFTER SEPTEMBER 7, 1916, MADE A TRANSFER (EXCEPT IN CASE OF A BONA  FIDE
   43  SALE  FOR AN ADEQUATE AND FULL CONSIDERATION IN MONEY OR MONEY'S WORTH),
   44  BY TRUST OR OTHERWISE, IF--
   45    (1) POSSESSION OR ENJOYMENT OF THE PROPERTY CAN, THROUGH OWNERSHIP  OF
   46  SUCH INTEREST, BE OBTAINED ONLY BY SURVIVING THE DECEDENT, AND
   47    (2)  THE DECEDENT HAS RETAINED A REVERSIONARY INTEREST IN THE PROPERTY
   48  (BUT IN THE CASE OF A TRANSFER MADE BEFORE OCTOBER 8, 1949, ONLY IF SUCH
   49  REVERSIONARY INTEREST AROSE BY THE EXPRESS TERMS OF  THE  INSTRUMENT  OF
   50  TRANSFER),  AND  THE  VALUE  OF  SUCH  REVERSIONARY INTEREST IMMEDIATELY
   51  BEFORE THE DEATH OF THE DECEDENT EXCEEDS 5 PERCENT OF THE VALUE OF  SUCH
   52  PROPERTY.
   53    (B) SPECIAL RULES.--FOR PURPOSES OF THIS SECTION, THE TERM "REVERSION-
   54  ARY  INTEREST"  INCLUDES  A POSSIBILITY THAT PROPERTY TRANSFERRED BY THE
   55  DECEDENT--
   56    (1) MAY RETURN TO HIM OR HIS ESTATE, OR
       S. 6359--D                         237                        A. 8559--D

    1    (2) MAY BE SUBJECT TO A POWER OF DISPOSITION BY HIM,
    2    BUT  SUCH  TERM  DOES  NOT INCLUDE A POSSIBILITY THAT THE INCOME ALONE
    3  FROM SUCH PROPERTY MAY RETURN TO HIM OR BECOME SUBJECT  TO  A  POWER  OF
    4  DISPOSITION  BY  HIM.  THE  VALUE OF A REVERSIONARY INTEREST IMMEDIATELY
    5  BEFORE THE DEATH OF THE DECEDENT SHALL BE DETERMINED (WITHOUT REGARD  TO
    6  THE FACT OF THE DECEDENT'S DEATH) BY USUAL METHODS OF VALUATION, INCLUD-
    7  ING THE USE OF TABLES OF MORTALITY AND ACTUARIAL PRINCIPLES, UNDER REGU-
    8  LATIONS  PRESCRIBED  BY  THE  SECRETARY.  IN  DETERMINING THE VALUE OF A
    9  POSSIBILITY THAT PROPERTY MAY BE SUBJECT TO A POWER  OF  DISPOSITION  BY
   10  THE DECEDENT, SUCH POSSIBILITY SHALL BE VALUED AS IF IT WERE A POSSIBIL-
   11  ITY  THAT  SUCH  PROPERTY  MAY  RETURN  TO  THE  DECEDENT OR HIS ESTATE.
   12  NOTWITHSTANDING THE FOREGOING, AN INTEREST SO TRANSFERRED SHALL  NOT  BE
   13  INCLUDED IN THE DECEDENT'S GROSS ESTATE UNDER THIS SECTION IF POSSESSION
   14  OR ENJOYMENT OF THE PROPERTY COULD HAVE BEEN OBTAINED BY ANY BENEFICIARY
   15  DURING  THE  DECEDENT'S  LIFE THROUGH THE EXERCISE OF A GENERAL POWER OF
   16  APPOINTMENT (AS DEFINED IN SECTION 2041) WHICH IN FACT  WAS  EXERCISABLE
   17  IMMEDIATELY BEFORE THE DECEDENT'S DEATH.
   18    S  2038.  REVOCABLE TRANSFERS. (A) IN GENERAL.--THE VALUE OF THE GROSS
   19  ESTATE SHALL INCLUDE THE VALUE OF ALL PROPERTY--
   20    (1) TRANSFERS AFTER JUNE 22, 1936.--TO  THE  EXTENT  OF  ANY  INTEREST
   21  THEREIN OF WHICH THE DECEDENT HAS AT ANY TIME MADE A TRANSFER (EXCEPT IN
   22  CASE OF A BONA FIDE SALE FOR AN ADEQUATE AND FULL CONSIDERATION IN MONEY
   23  OR  MONEY'S  WORTH),  BY TRUST OR OTHERWISE, WHERE THE ENJOYMENT THEREOF
   24  WAS SUBJECT AT THE DATE OF HIS DEATH TO ANY CHANGE THROUGH THE  EXERCISE
   25  OF  A  POWER (IN WHATEVER CAPACITY EXERCISABLE) BY THE DECEDENT ALONE OR
   26  BY THE DECEDENT IN CONJUNCTION WITH ANY OTHER PERSON (WITHOUT REGARD  TO
   27  WHEN  OR  FROM  WHAT SOURCE THE DECEDENT ACQUIRED SUCH POWER), TO ALTER,
   28  AMEND, REVOKE, OR TERMINATE, OR WHERE ANY  SUCH  POWER  IS  RELINQUISHED
   29  DURING THE 3-YEAR PERIOD ENDING ON THE DATE OF THE DECEDENT'S DEATH.
   30    (2) TRANSFERS ON OR BEFORE JUNE 22, 1936.--TO THE EXTENT OF ANY INTER-
   31  EST  THEREIN  OF  WHICH  THE  DECEDENT  HAS  AT ANY TIME MADE A TRANSFER
   32  (EXCEPT IN CASE OF A BONA FIDE SALE FOR AN ADEQUATE AND  FULL  CONSIDER-
   33  ATION  IN  MONEY  OR  MONEY'S  WORTH),  BY TRUST OR OTHERWISE, WHERE THE
   34  ENJOYMENT THEREOF WAS SUBJECT AT THE DATE OF HIS  DEATH  TO  ANY  CHANGE
   35  THROUGH  THE  EXERCISE  OF  A  POWER, EITHER BY THE DECEDENT ALONE OR IN
   36  CONJUNCTION WITH ANY PERSON, TO ALTER, AMEND, OR REVOKE,  OR  WHERE  THE
   37  DECEDENT  RELINQUISHED ANY SUCH POWER DURING THE 3-YEAR PERIOD ENDING ON
   38  THE DATE OF THE DECEDENT'S DEATH. EXCEPT IN THE CASE OF  TRANSFERS  MADE
   39  AFTER  JUNE 22, 1936, NO INTEREST OF THE DECEDENT OF WHICH HE HAS MADE A
   40  TRANSFER SHALL BE INCLUDED IN  THE  GROSS  ESTATE  UNDER  PARAGRAPH  (1)
   41  UNLESS IT IS INCLUDIBLE UNDER THIS PARAGRAPH.
   42    (B)  DATE  OF  EXISTENCE  OF POWER.--FOR PURPOSES OF THIS SECTION, THE
   43  POWER TO ALTER, AMEND, REVOKE, OR TERMINATE SHALL BE CONSIDERED TO EXIST
   44  ON THE DATE OF THE DECEDENT'S DEATH EVEN  THOUGH  THE  EXERCISE  OF  THE
   45  POWER  IS  SUBJECT  TO  A  PRECEDENT GIVING OF NOTICE OR EVEN THOUGH THE
   46  ALTERATION, AMENDMENT, REVOCATION, OR TERMINATION TAKES EFFECT  ONLY  ON
   47  THE  EXPIRATION  OF  A  STATED  PERIOD  AFTER THE EXERCISE OF THE POWER,
   48  WHETHER OR NOT ON OR BEFORE THE DATE OF THE DECEDENT'S DEATH NOTICE  HAS
   49  BEEN GIVEN OR THE POWER HAS BEEN EXERCISED. IN SUCH CASES PROPER ADJUST-
   50  MENT  SHALL  BE  MADE  REPRESENTING  THE INTERESTS WHICH WOULD HAVE BEEN
   51  EXCLUDED FROM THE POWER IF THE DECEDENT HAD LIVED, AND FOR SUCH PURPOSE,
   52  IF THE NOTICE HAS NOT BEEN GIVEN OR THE POWER HAS NOT BEEN EXERCISED  ON
   53  OR BEFORE THE DATE OF HIS DEATH, SUCH NOTICE SHALL BE CONSIDERED TO HAVE
   54  BEEN GIVEN, OR THE POWER EXERCISED, ON THE DATE OF HIS DEATH.
   55    S  2039.  ANNUITIES.  (A) GENERAL.--THE GROSS ESTATE SHALL INCLUDE THE
   56  VALUE OF AN ANNUITY OR OTHER PAYMENT RECEIVABLE BY  ANY  BENEFICIARY  BY
       S. 6359--D                         238                        A. 8559--D

    1  REASON OF SURVIVING THE DECEDENT UNDER ANY FORM OF CONTRACT OR AGREEMENT
    2  ENTERED INTO AFTER MARCH 3, 1931 (OTHER THAN AS INSURANCE UNDER POLICIES
    3  ON  THE  LIFE OF THE DECEDENT), IF, UNDER SUCH CONTRACT OR AGREEMENT, AN
    4  ANNUITY  OR  OTHER  PAYMENT WAS PAYABLE TO THE DECEDENT, OR THE DECEDENT
    5  POSSESSED THE RIGHT TO RECEIVE SUCH ANNUITY OR PAYMENT, EITHER ALONE  OR
    6  IN  CONJUNCTION  WITH  ANOTHER FOR HIS LIFE OR FOR ANY PERIOD NOT ASCER-
    7  TAINABLE WITHOUT REFERENCE TO HIS DEATH OR FOR ANY PERIOD WHICH DOES NOT
    8  IN FACT END BEFORE HIS DEATH.
    9    (B) AMOUNT INCLUDIBLE.--SUBSECTION (A) SHALL APPLY TO ONLY  SUCH  PART
   10  OF  THE  VALUE  OF  THE  ANNUITY  OR OTHER PAYMENT RECEIVABLE UNDER SUCH
   11  CONTRACT OR AGREEMENT AS IS PROPORTIONATE TO THAT PART OF  THE  PURCHASE
   12  PRICE  THEREFOR  CONTRIBUTED  BY  THE  DECEDENT.  FOR  PURPOSES  OF THIS
   13  SECTION, ANY CONTRIBUTION BY THE DECEDENT'S EMPLOYER OR FORMER  EMPLOYER
   14  TO  THE  PURCHASE PRICE OF SUCH CONTRACT OR AGREEMENT (WHETHER OR NOT TO
   15  AN EMPLOYEE'S TRUST OR FUND FORMING PART OF A PENSION, ANNUITY,  RETIRE-
   16  MENT,  BONUS  OR PROFIT SHARING PLAN) SHALL BE CONSIDERED TO BE CONTRIB-
   17  UTED BY THE DECEDENT IF MADE BY REASON OF HIS EMPLOYMENT.
   18    S 2040. JOINT INTERESTS. (A) GENERAL RULE.--THE  VALUE  OF  THE  GROSS
   19  ESTATE  SHALL  INCLUDE  THE  VALUE  OF ALL PROPERTY TO THE EXTENT OF THE
   20  INTEREST THEREIN HELD AS JOINT TENANTS WITH RIGHT OF SURVIVORSHIP BY THE
   21  DECEDENT AND ANY OTHER PERSON, OR AS TENANTS  BY  THE  ENTIRETY  BY  THE
   22  DECEDENT AND SPOUSE, OR DEPOSITED, WITH ANY PERSON CARRYING ON THE BANK-
   23  ING  BUSINESS,  IN THEIR JOINT NAMES AND PAYABLE TO EITHER OR THE SURVI-
   24  VOR, EXCEPT SUCH PART  THEREOF  AS  MAY  BE  SHOWN  TO  HAVE  ORIGINALLY
   25  BELONGED  TO  SUCH  OTHER  PERSON  AND  NEVER  TO  HAVE BEEN RECEIVED OR
   26  ACQUIRED BY THE LATTER FROM THE DECEDENT FOR LESS THAN AN  ADEQUATE  AND
   27  FULL  CONSIDERATION IN MONEY OR MONEY'S WORTH: PROVIDED, THAT WHERE SUCH
   28  PROPERTY OR ANY PART THEREOF, OR PART OF THE  CONSIDERATION  WITH  WHICH
   29  SUCH  PROPERTY  WAS ACQUIRED, IS SHOWN TO HAVE BEEN AT ANY TIME ACQUIRED
   30  BY SUCH OTHER PERSON FROM THE DECEDENT FOR LESS  THAN  AN  ADEQUATE  AND
   31  FULL  CONSIDERATION  IN  MONEY OR MONEY'S WORTH, THERE SHALL BE EXCEPTED
   32  ONLY SUCH PART OF THE VALUE OF SUCH PROPERTY AS IS PROPORTIONATE TO  THE
   33  CONSIDERATION  FURNISHED  BY  SUCH  OTHER PERSON: PROVIDED FURTHER, THAT
   34  WHERE ANY PROPERTY HAS BEEN ACQUIRED BY GIFT, BEQUEST, DEVISE, OR INHER-
   35  ITANCE, AS A TENANCY BY THE ENTIRETY BY THE DECEDENT AND SPOUSE, THEN TO
   36  THE EXTENT OF ONE-HALF OF THE VALUE THEREOF, OR, WHERE  SO  ACQUIRED  BY
   37  THE  DECEDENT AND ANY OTHER PERSON AS JOINT TENANTS WITH RIGHT OF SURVI-
   38  VORSHIP AND THEIR INTERESTS ARE NOT OTHERWISE SPECIFIED OR FIXED BY LAW,
   39  THEN TO THE EXTENT OF THE VALUE OF A FRACTIONAL PART TO BE DETERMINED BY
   40  DIVIDING THE VALUE OF THE PROPERTY BY THE NUMBER OF JOINT  TENANTS  WITH
   41  RIGHT OF SURVIVORSHIP.
   42    (B) CERTAIN JOINT INTERESTS OF HUSBAND AND WIFE.--
   43    (1)  INTERESTS  OF SPOUSE EXCLUDED FROM GROSS ESTATE.--NOTWITHSTANDING
   44  SUBSECTION (A), IN THE CASE OF ANY QUALIFIED JOINT INTEREST,  THE  VALUE
   45  INCLUDED  IN THE GROSS ESTATE WITH RESPECT TO SUCH INTEREST BY REASON OF
   46  THIS SECTION IS ONE-HALF OF THE VALUE OF SUCH QUALIFIED JOINT INTEREST.
   47    (2) QUALIFIED JOINT INTEREST DEFINED.--FOR PURPOSES OF PARAGRAPH  (1),
   48  THE  TERM "QUALIFIED JOINT INTEREST" MEANS ANY INTEREST IN PROPERTY HELD
   49  BY THE DECEDENT AND THE DECEDENT'S SPOUSE AS--
   50    (A) TENANTS BY THE ENTIRETY, OR
   51    (B) JOINT TENANTS WITH RIGHT OF SURVIVORSHIP, BUT ONLY IF THE DECEDENT
   52  AND THE SPOUSE OF THE DECEDENT ARE THE ONLY JOINT TENANTS.
   53    S 2041. POWERS OF APPOINTMENT. (A) IN GENERAL.--THE VALUE OF THE GROSS
   54  ESTATE SHALL INCLUDE THE VALUE OF ALL PROPERTY--
   55    (1) POWERS OF APPOINTMENT CREATED ON OR BEFORE OCTOBER  21,  1942.--TO
   56  THE  EXTENT  OF  ANY  PROPERTY  WITH RESPECT TO WHICH A GENERAL POWER OF
       S. 6359--D                         239                        A. 8559--D

    1  APPOINTMENT CREATED ON OR BEFORE OCTOBER 21, 1942, IS EXERCISED  BY  THE
    2  DECEDENT--
    3    (A) BY WILL, OR
    4    (B)  BY A DISPOSITION WHICH IS OF SUCH NATURE THAT IF IT WERE A TRANS-
    5  FER OF PROPERTY OWNED BY THE DECEDENT, SUCH PROPERTY WOULD BE INCLUDIBLE
    6  IN THE DECEDENT'S GROSS ESTATE UNDER SECTIONS 2035 TO 2038, INCLUSIVE;
    7    BUT THE FAILURE TO EXERCISE SUCH A POWER OR THE  COMPLETE  RELEASE  OF
    8  SUCH A POWER SHALL NOT BE DEEMED AN EXERCISE THEREOF. IF A GENERAL POWER
    9  OF APPOINTMENT CREATED ON OR BEFORE OCTOBER 21, 1942, HAS BEEN PARTIALLY
   10  RELEASED  SO  THAT  IT  IS NO LONGER A GENERAL POWER OF APPOINTMENT, THE
   11  EXERCISE OF SUCH POWER SHALL NOT BE DEEMED  TO  BE  THE  EXERCISE  OF  A
   12  GENERAL POWER OF APPOINTMENT IF--
   13    (I) SUCH PARTIAL RELEASE OCCURRED BEFORE NOVEMBER 1, 1951, OR
   14    (II)  THE  DONEE OF SUCH POWER WAS UNDER A LEGAL DISABILITY TO RELEASE
   15  SUCH POWER ON OCTOBER 21, 1942, AND SUCH PARTIAL  RELEASE  OCCURRED  NOT
   16  LATER THAN 6 MONTHS AFTER THE TERMINATION OF SUCH LEGAL DISABILITY.
   17    (2) POWERS CREATED AFTER OCTOBER 21, 1942.--TO THE EXTENT OF ANY PROP-
   18  ERTY  WITH  RESPECT TO WHICH THE DECEDENT HAS AT THE TIME OF HIS DEATH A
   19  GENERAL POWER OF APPOINTMENT CREATED AFTER OCTOBER  21,  1942,  OR  WITH
   20  RESPECT TO WHICH THE DECEDENT HAS AT ANY TIME EXERCISED OR RELEASED SUCH
   21  A  POWER OF APPOINTMENT BY A DISPOSITION WHICH IS OF SUCH NATURE THAT IF
   22  IT WERE A TRANSFER OF PROPERTY OWNED  BY  THE  DECEDENT,  SUCH  PROPERTY
   23  WOULD  BE  INCLUDIBLE IN THE DECEDENT'S GROSS ESTATE UNDER SECTIONS 2035
   24  TO 2038, INCLUSIVE. FOR PURPOSES OF THIS PARAGRAPH  (2),  THE  POWER  OF
   25  APPOINTMENT  SHALL  BE CONSIDERED TO EXIST ON THE DATE OF THE DECEDENT'S
   26  DEATH EVEN THOUGH THE EXERCISE OF THE POWER IS SUBJECT  TO  A  PRECEDENT
   27  GIVING  OF  NOTICE OR EVEN THOUGH THE EXERCISE OF THE POWER TAKES EFFECT
   28  ONLY ON THE EXPIRATION OF A STATED PERIOD AFTER ITS EXERCISE, WHETHER OR
   29  NOT ON OR BEFORE THE DATE OF THE DECEDENT'S DEATH NOTICE HAS BEEN  GIVEN
   30  OR THE POWER HAS BEEN EXERCISED.
   31    (3)  CREATION OF ANOTHER POWER IN CERTAIN CASES.--TO THE EXTENT OF ANY
   32  PROPERTY WITH RESPECT TO WHICH THE DECEDENT--
   33    (A) BY WILL, OR
   34    (B) BY A DISPOSITION WHICH IS OF SUCH NATURE THAT IF IT WERE A  TRANS-
   35  FER  OF PROPERTY OWNED BY THE DECEDENT SUCH PROPERTY WOULD BE INCLUDIBLE
   36  IN THE DECEDENT'S GROSS ESTATE UNDER SECTION 2035, 2036, OR 2037,
   37    EXERCISES A POWER OF APPOINTMENT CREATED AFTER OCTOBER  21,  1942,  BY
   38  CREATING  ANOTHER  POWER OF APPOINTMENT WHICH UNDER THE APPLICABLE LOCAL
   39  LAW CAN BE VALIDLY EXERCISED SO AS TO POSTPONE THE VESTING OF ANY ESTATE
   40  OR INTEREST IN SUCH PROPERTY, OR SUSPEND THE ABSOLUTE OWNERSHIP OR POWER
   41  OF ALIENATION OF SUCH  PROPERTY,  FOR  A  PERIOD  ASCERTAINABLE  WITHOUT
   42  REGARD TO THE DATE OF THE CREATION OF THE FIRST POWER.
   43    (B) DEFINITIONS.--FOR PURPOSES OF SUBSECTION (A)--
   44    (1) GENERAL POWER OF APPOINTMENT.--THE TERM "GENERAL POWER OF APPOINT-
   45  MENT"  MEANS  A POWER WHICH IS EXERCISABLE IN FAVOR OF THE DECEDENT, HIS
   46  ESTATE, HIS CREDITORS, OR THE CREDITORS OF HIS ESTATE; EXCEPT THAT--
   47    (A) A POWER TO CONSUME, INVADE, OR APPROPRIATE PROPERTY FOR THE  BENE-
   48  FIT OF THE DECEDENT WHICH IS LIMITED BY AN ASCERTAINABLE STANDARD RELAT-
   49  ING  TO  THE  HEALTH, EDUCATION, SUPPORT, OR MAINTENANCE OF THE DECEDENT
   50  SHALL NOT BE DEEMED A GENERAL POWER OF APPOINTMENT.
   51    (B) A POWER OF APPOINTMENT CREATED ON  OR  BEFORE  OCTOBER  21,  1942,
   52  WHICH  IS  EXERCISABLE  BY THE DECEDENT ONLY IN CONJUNCTION WITH ANOTHER
   53  PERSON SHALL NOT BE DEEMED A GENERAL POWER OF APPOINTMENT.
   54    (C) IN THE CASE OF A POWER OF APPOINTMENT CREATED  AFTER  OCTOBER  21,
   55  1942,  WHICH  IS  EXERCISABLE  BY  THE DECEDENT ONLY IN CONJUNCTION WITH
   56  ANOTHER PERSON--
       S. 6359--D                         240                        A. 8559--D

    1    (I) IF THE POWER IS NOT EXERCISABLE BY THE DECEDENT EXCEPT IN CONJUNC-
    2  TION WITH THE CREATOR OF THE POWER--SUCH POWER SHALL  NOT  BE  DEEMED  A
    3  GENERAL POWER OF APPOINTMENT.
    4    (II)  IF  THE  POWER  IS  NOT  EXERCISABLE  BY  THE DECEDENT EXCEPT IN
    5  CONJUNCTION WITH A PERSON HAVING A SUBSTANTIAL INTEREST IN THE PROPERTY,
    6  SUBJECT TO THE POWER, WHICH IS ADVERSE TO EXERCISE OF THE POWER IN FAVOR
    7  OF THE DECEDENT--SUCH POWER SHALL NOT  BE  DEEMED  A  GENERAL  POWER  OF
    8  APPOINTMENT.  FOR  THE  PURPOSES  OF THIS CLAUSE A PERSON WHO, AFTER THE
    9  DEATH OF THE DECEDENT, MAY BE POSSESSED OF A POWER OF APPOINTMENT  (WITH
   10  RESPECT  TO  THE  PROPERTY SUBJECT TO THE DECEDENT'S POWER) WHICH HE MAY
   11  EXERCISE IN HIS OWN FAVOR SHALL BE DEEMED AS HAVING AN INTEREST  IN  THE
   12  PROPERTY  AND  SUCH INTEREST SHALL BE DEEMED ADVERSE TO SUCH EXERCISE OF
   13  THE DECEDENT'S POWER.
   14    (III) IF (AFTER THE APPLICATION OF CLAUSES (I) AND (II)) THE POWER  IS
   15  A GENERAL POWER OF APPOINTMENT AND IS EXERCISABLE IN FAVOR OF SUCH OTHER
   16  PERSON--SUCH  POWER  SHALL BE DEEMED A GENERAL POWER OF APPOINTMENT ONLY
   17  IN RESPECT OF A FRACTIONAL PART OF THE PROPERTY SUBJECT TO  SUCH  POWER,
   18  SUCH PART TO BE DETERMINED BY DIVIDING THE VALUE OF SUCH PROPERTY BY THE
   19  NUMBER  OF  SUCH  PERSONS (INCLUDING THE DECEDENT) IN FAVOR OF WHOM SUCH
   20  POWER IS EXERCISABLE.
   21    FOR PURPOSES OF CLAUSES (II) AND (III), A POWER SHALL BE DEEMED TO  BE
   22  EXERCISABLE  IN  FAVOR OF A PERSON IF IT IS EXERCISABLE IN FAVOR OF SUCH
   23  PERSON, HIS ESTATE, HIS CREDITORS, OR THE CREDITORS OF HIS ESTATE.
   24    (2) LAPSE OF POWER.--THE LAPSE OF A POWER OF APPOINTMENT CREATED AFTER
   25  OCTOBER 21, 1942, DURING THE LIFE OF THE INDIVIDUAL POSSESSING THE POWER
   26  SHALL BE CONSIDERED A RELEASE OF  SUCH  POWER.  THE  PRECEDING  SENTENCE
   27  SHALL APPLY WITH RESPECT TO THE LAPSE OF POWERS DURING ANY CALENDAR YEAR
   28  ONLY TO THE EXTENT THAT THE PROPERTY, WHICH COULD HAVE BEEN APPOINTED BY
   29  EXERCISE  OF  SUCH LAPSED POWERS, EXCEEDED IN VALUE, AT THE TIME OF SUCH
   30  LAPSE, THE GREATER OF THE FOLLOWING AMOUNTS:
   31    (A) $5,000, OR
   32    (B) 5 PERCENT OF THE AGGREGATE VALUE, AT THE TIME OF  SUCH  LAPSE,  OF
   33  THE  ASSETS  OUT OF WHICH, OR THE PROCEEDS OF WHICH, THE EXERCISE OF THE
   34  LAPSED POWERS COULD HAVE BEEN SATISFIED.
   35    (3) DATE OF CREATION OF POWER.--FOR PURPOSES OF THIS SECTION, A  POWER
   36  OF APPOINTMENT CREATED BY A WILL EXECUTED ON OR BEFORE OCTOBER 21, 1942,
   37  SHALL BE CONSIDERED A POWER CREATED ON OR BEFORE SUCH DATE IF THE PERSON
   38  EXECUTING SUCH WILL DIES BEFORE JULY 1, 1949, WITHOUT HAVING REPUBLISHED
   39  SUCH WILL, BY CODICIL OR OTHERWISE, AFTER OCTOBER 21, 1942.
   40    S  2042.  PROCEEDS  OF  LIFE  INSURANCE. THE VALUE OF THE GROSS ESTATE
   41  SHALL INCLUDE THE VALUE OF ALL PROPERTY--
   42    (1) RECEIVABLE BY THE EXECUTOR.--TO THE EXTENT OF THE  AMOUNT  RECEIV-
   43  ABLE  BY  THE  EXECUTOR  AS  INSURANCE UNDER POLICIES ON THE LIFE OF THE
   44  DECEDENT.
   45    (2) RECEIVABLE BY OTHER BENEFICIARIES.--TO THE EXTENT  OF  THE  AMOUNT
   46  RECEIVABLE BY ALL OTHER BENEFICIARIES AS INSURANCE UNDER POLICIES ON THE
   47  LIFE OF THE DECEDENT WITH RESPECT TO WHICH THE DECEDENT POSSESSED AT HIS
   48  DEATH  ANY OF THE INCIDENTS OF OWNERSHIP, EXERCISABLE EITHER ALONE OR IN
   49  CONJUNCTION WITH  ANY  OTHER  PERSON.  FOR  PURPOSES  OF  THE  PRECEDING
   50  SENTENCE,  THE  TERM  "INCIDENT  OF  OWNERSHIP"  INCLUDES A REVERSIONARY
   51  INTEREST (WHETHER ARISING BY THE EXPRESS TERMS OF THE  POLICY  OR  OTHER
   52  INSTRUMENT  OR BY OPERATION OF LAW) ONLY IF THE VALUE OF SUCH REVERSION-
   53  ARY INTEREST EXCEEDED 5 PERCENT OF THE VALUE OF THE  POLICY  IMMEDIATELY
   54  BEFORE  THE  DEATH  OF THE DECEDENT. AS USED IN THIS PARAGRAPH, THE TERM
   55  "REVERSIONARY INTEREST" INCLUDES A POSSIBILITY THAT THE POLICY,  OR  THE
   56  PROCEEDS OF THE POLICY, MAY RETURN TO THE DECEDENT OR HIS ESTATE, OR MAY
       S. 6359--D                         241                        A. 8559--D

    1  BE SUBJECT TO A POWER OF DISPOSITION BY HIM. THE VALUE OF A REVERSIONARY
    2  INTEREST  AT ANY TIME SHALL BE DETERMINED (WITHOUT REGARD TO THE FACT OF
    3  THE DECEDENT'S DEATH) BY USUAL METHODS OF VALUATION, INCLUDING  THE  USE
    4  OF TABLES OF MORTALITY AND ACTUARIAL PRINCIPLES, PURSUANT TO REGULATIONS
    5  PRESCRIBED  BY  THE SECRETARY. IN DETERMINING THE VALUE OF A POSSIBILITY
    6  THAT THE POLICY OR PROCEEDS THEREOF MAY BE SUBJECT TO A POWER OF  DISPO-
    7  SITION BY THE DECEDENT, SUCH POSSIBILITY SHALL BE VALUED AS IF IT WERE A
    8  POSSIBILITY  THAT  SUCH POLICY OR PROCEEDS MAY RETURN TO THE DECEDENT OR
    9  HIS ESTATE.
   10    S 2043. TRANSFERS FOR INSUFFICIENT CONSIDERATION. (A) IN  GENERAL.--IF
   11  ANY  ONE  OF THE TRANSFERS, TRUSTS, INTERESTS, RIGHTS, OR POWERS ENUMER-
   12  ATED AND DESCRIBED IN SECTIONS 2035 TO 2038, INCLUSIVE, AND SECTION 2041
   13  IS MADE, CREATED, EXERCISED, OR  RELINQUISHED  FOR  A  CONSIDERATION  IN
   14  MONEY  OR MONEY'S WORTH, BUT IS NOT A BONA FIDE SALE FOR AN ADEQUATE AND
   15  FULL CONSIDERATION IN MONEY OR MONEY'S WORTH, THERE SHALL BE INCLUDED IN
   16  THE GROSS ESTATE ONLY THE EXCESS OF THE FAIR MARKET VALUE AT THE TIME OF
   17  DEATH OF THE PROPERTY OTHERWISE TO BE INCLUDED ON ACCOUNT OF SUCH TRANS-
   18  ACTION, OVER THE VALUE OF THE CONSIDERATION  RECEIVED  THEREFOR  BY  THE
   19  DECEDENT.
   20    (B) MARITAL RIGHTS NOT TREATED AS CONSIDERATION.--
   21    (1)  IN  GENERAL.--FOR  PURPOSES  OF THIS CHAPTER, A RELINQUISHMENT OR
   22  PROMISED RELINQUISHMENT OF DOWER OR CURTESY, OR OF  A  STATUTORY  ESTATE
   23  CREATED  IN  LIEU OF DOWER OR CURTESY, OR OF OTHER MARITAL RIGHTS IN THE
   24  DECEDENT'S PROPERTY OR ESTATE, SHALL NOT BE CONSIDERED TO ANY  EXTENT  A
   25  CONSIDERATION "IN MONEY OR MONEY'S WORTH".
   26    (2)  EXCEPTION.--FOR  PURPOSES  OF SECTION 2053 (RELATING TO EXPENSES,
   27  INDEBTEDNESS, AND TAXES), A TRANSFER OF  PROPERTY  WHICH  SATISFIES  THE
   28  REQUIREMENTS OF PARAGRAPH (1) OF SECTION 2516 (RELATING TO CERTAIN PROP-
   29  ERTY  SETTLEMENTS)  SHALL  BE  CONSIDERED TO BE MADE FOR AN ADEQUATE AND
   30  FULL CONSIDERATION IN MONEY OR MONEY'S WORTH.
   31    S 2044. CERTAIN PROPERTY FOR WHICH MARITAL  DEDUCTION  WAS  PREVIOUSLY
   32  ALLOWED.  (A) GENERAL RULE.--THE VALUE OF THE GROSS ESTATE SHALL INCLUDE
   33  THE VALUE OF ANY PROPERTY TO WHICH THIS SECTION  APPLIES  IN  WHICH  THE
   34  DECEDENT HAD A QUALIFYING INCOME INTEREST FOR LIFE.
   35    (B)  PROPERTY  TO WHICH THIS SECTION APPLIES.--THIS SECTION APPLIES TO
   36  ANY PROPERTY IF--
   37    (1) A DEDUCTION WAS ALLOWED WITH RESPECT TO THE TRANSFER OF SUCH PROP-
   38  ERTY TO THE DECEDENT--
   39    (A) UNDER SECTION 2056 BY REASON OF SUBSECTION (B)(7) THEREOF, OR
   40    (B) UNDER SECTION 2523 BY REASON OF SUBSECTION (F) THEREOF, AND
   41    (2) SECTION 2519 (RELATING TO DISPOSITIONS OF  CERTAIN  LIFE  ESTATES)
   42  DID  NOT  APPLY WITH RESPECT TO A DISPOSITION BY THE DECEDENT OF PART OR
   43  ALL OF SUCH PROPERTY.
   44    (C) PROPERTY TREATED AS HAVING PASSED FROM DECEDENT.--FOR PURPOSES  OF
   45  THIS  CHAPTER AND CHAPTER 13, PROPERTY INCLUDIBLE IN THE GROSS ESTATE OF
   46  THE DECEDENT UNDER SUBSECTION (A) SHALL BE TREATED AS  PROPERTY  PASSING
   47  FROM THE DECEDENT.
   48    S  2045. PRIOR INTERESTS. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED BY
   49  LAW, SECTIONS 2034 TO 2042, INCLUSIVE, SHALL  APPLY  TO  THE  TRANSFERS,
   50  TRUSTS,  ESTATES,  INTERESTS,  RIGHTS,  POWERS,  AND  RELINQUISHMENT  OF
   51  POWERS, AS SEVERALLY ENUMERATED AND DESCRIBED  THEREIN,  WHENEVER  MADE,
   52  CREATED, ARISING, EXISTING, EXERCISED, OR RELINQUISHED.
   53    S 2046. DISCLAIMERS. FOR PROVISIONS RELATING TO THE EFFECT OF A QUALI-
   54  FIED DISCLAIMER FOR PURPOSES OF THIS CHAPTER, SEE SECTION 2518.
   55    S  2053.  EXPENSES,  INDEBTEDNESS,  AND  TAXES. (A) GENERAL RULE.--FOR
   56  PURPOSES OF THE TAX IMPOSED BY SECTION 2001, THE VALUE  OF  THE  TAXABLE
       S. 6359--D                         242                        A. 8559--D

    1  ESTATE  SHALL  BE  DETERMINED  BY  DEDUCTING FROM THE VALUE OF THE GROSS
    2  ESTATE SUCH AMOUNTS--
    3    (1) FOR FUNERAL EXPENSES,
    4    (2) FOR ADMINISTRATION EXPENSES,
    5    (3) FOR CLAIMS AGAINST THE ESTATE, AND
    6    (4)  FOR UNPAID MORTGAGES ON, OR ANY INDEBTEDNESS IN RESPECT OF, PROP-
    7  ERTY WHERE THE VALUE OF THE DECEDENT'S INTEREST THEREIN, UNDIMINISHED BY
    8  SUCH MORTGAGE OR INDEBTEDNESS, IS INCLUDED IN THE  VALUE  OF  THE  GROSS
    9  ESTATE,
   10    AS  ARE  ALLOWABLE  BY THE LAWS OF THE JURISDICTION, WHETHER WITHIN OR
   11  WITHOUT THE UNITED STATES, UNDER WHICH THE ESTATE IS BEING ADMINISTERED.
   12    (B) OTHER ADMINISTRATION  EXPENSES.--SUBJECT  TO  THE  LIMITATIONS  IN
   13  PARAGRAPH  (1) OF SUBSECTION (C), THERE SHALL BE DEDUCTED IN DETERMINING
   14  THE TAXABLE ESTATE AMOUNTS REPRESENTING EXPENSES INCURRED IN ADMINISTER-
   15  ING PROPERTY NOT SUBJECT TO CLAIMS WHICH IS INCLUDED IN THE GROSS ESTATE
   16  TO THE SAME EXTENT SUCH AMOUNTS WOULD BE ALLOWABLE AS A DEDUCTION  UNDER
   17  SUBSECTION (A) IF SUCH PROPERTY WERE SUBJECT TO CLAIMS, AND SUCH AMOUNTS
   18  ARE  PAID  BEFORE THE EXPIRATION OF THE PERIOD OF LIMITATION FOR ASSESS-
   19  MENT PROVIDED IN SECTION 6501.
   20    (C) LIMITATIONS.--
   21    (1) LIMITATIONS APPLICABLE TO SUBSECTIONS (A) AND (B).--
   22    (A) CONSIDERATION FOR CLAIMS.--THE DEDUCTION ALLOWED BY  THIS  SECTION
   23  IN  THE  CASE  OF  CLAIMS  AGAINST  THE ESTATE, UNPAID MORTGAGES, OR ANY
   24  INDEBTEDNESS SHALL, WHEN FOUNDED ON A PROMISE OR AGREEMENT,  BE  LIMITED
   25  TO  THE  EXTENT  THAT THEY WERE CONTRACTED BONA FIDE AND FOR AN ADEQUATE
   26  AND FULL CONSIDERATION IN MONEY OR MONEY'S WORTH;  EXCEPT  THAT  IN  ANY
   27  CASE IN WHICH ANY SUCH CLAIM IS FOUNDED ON A PROMISE OR AGREEMENT OF THE
   28  DECEDENT  TO  MAKE A CONTRIBUTION OR GIFT TO OR FOR THE USE OF ANY DONEE
   29  DESCRIBED IN SECTION  2055  FOR  THE  PURPOSES  SPECIFIED  THEREIN,  THE
   30  DEDUCTION  FOR SUCH CLAIMS SHALL NOT BE SO LIMITED, BUT SHALL BE LIMITED
   31  TO THE EXTENT THAT IT WOULD BE ALLOWABLE AS A  DEDUCTION  UNDER  SECTION
   32  2055 IF SUCH PROMISE OR AGREEMENT CONSTITUTED A BEQUEST.
   33    (B)  CERTAIN  TAXES.--ANY  INCOME  TAXES  ON INCOME RECEIVED AFTER THE
   34  DEATH OF THE DECEDENT, OR PROPERTY TAXES NOT ACCRUED BEFORE  HIS  DEATH,
   35  OR  ANY  ESTATE,  SUCCESSION, LEGACY, OR INHERITANCE TAXES, SHALL NOT BE
   36  DEDUCTIBLE UNDER THIS SECTION.
   37    (C) CERTAIN CLAIMS BY REMAINDERMEN.--NO  DEDUCTION  SHALL  BE  ALLOWED
   38  UNDER  THIS  SECTION  FOR  A  CLAIM AGAINST THE ESTATE BY A REMAINDERMAN
   39  RELATING TO ANY PROPERTY DESCRIBED IN SECTION 2044.
   40    (D) SECTION 6166 INTEREST.--NO DEDUCTION SHALL BE ALLOWED  UNDER  THIS
   41  SECTION  FOR  ANY  INTEREST  PAYABLE  UNDER  SECTION  6601 ON ANY UNPAID
   42  PORTION OF THE TAX IMPOSED BY SECTION 2001 FOR THE PERIOD  DURING  WHICH
   43  AN  EXTENSION OF TIME FOR PAYMENT OF SUCH TAX IS IN EFFECT UNDER SECTION
   44  6166.
   45    (2) LIMITATIONS APPLICABLE ONLY TO SUBSECTION (A).--IN THE CASE OF THE
   46  AMOUNTS DESCRIBED IN SUBSECTION  (A),  THERE  SHALL  BE  DISALLOWED  THE
   47  AMOUNT  BY  WHICH  THE DEDUCTIONS SPECIFIED THEREIN EXCEED THE VALUE, AT
   48  THE TIME OF THE DECEDENT'S DEATH, OF PROPERTY SUBJECT TO CLAIMS,  EXCEPT
   49  TO  THE  EXTENT  THAT  SUCH DEDUCTIONS REPRESENT AMOUNTS PAID BEFORE THE
   50  DATE PRESCRIBED FOR THE FILING OF THE ESTATE TAX RETURN. FOR PURPOSES OF
   51  THIS SECTION, THE TERM  "PROPE