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S02609 Summary:

BILL NO    S02609D

SAME AS    SAME AS UNI. A03009-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 2013-2014 state fiscal year; relates to the temporary
metropolitan transportation business tax surcharge; relates to the empire state
film production credit and to the empire state film post production credit;
relates to reports; establishes the New York business incubator and innovation
hot spot support act; relates to extending for three years the charitable
contributions deduction limitation; relates to the exclusion of certain royalty
payments from the entire net income or other taxable basis of corporations,
banking corporations, and insurance corporations, from the unrelated business
income of corporations, and from the adjusted gross income of individual
taxpayers; relates to the historic preservation tax credit; provides a tax
credit for electric vehicle recharging property; relates to extending
provisions relating to mandatory electronic filing of tax documents and
improving sales tax compliance; relates to restrictions on funds of the
industrial development agency and relates to industrial development agencies
and authorities; relates to expanding the exemption of CNG in the sales tax to
include natural gas purchased and used to produce CNG for use exclusively and
directly in the engine of a motor vehicle; relates to allowing voluntary
ambulance services, fire companies, fire departments and rescue squads to claim
reimbursement of the petroleum business tax for fuel used in their vehicles;
relates to increasing the penalty for the possession of unstamped and
unlawfully stamped cigarettes; relates to the suspension of drivers' licenses
of persons who are delinquent in the payment of past-due tax liabilities;
relates to serving an income execution with respect to individual tax debtors
without filing a warrant; relates to vendor fees paid to vendor tracks; relates
to licenses for simulcasting 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; extends certain
provisions of law; relates to the credit for the rehabilitation of historic
homes; relates to allowing certain tax-free interdistributor sales of highway
diesel motor fuel; relates to updating the farming exemption in the highway use
tax to reflect current industry practice; relates to providing a subtraction
from income for small businesses and small farms; relates to providing tax cuts
to manufacturers; relates to adding a hire a vet credit; relates to extending
the temporary state energy and utility conservation assessment; relates to a
credit for middle income taxpayers with children; relates to the New York youth
works tax credit program; relates to adding a minimum wage reimbursement
credit; relates to personal income tax rates; relates to the gift for New York
state teen health education fund; relates to establishing the New York state
teen health education fund; relates to eligible businesses participating in the
excelsior linked deposit program; relates to small business loan funds for
business enterprises that are minority- and women-owned; and relates to
establishing a New York state innovation capital fund.
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S02609 Actions:

BILL NO    S02609D

01/22/2013 REFERRED TO FINANCE
02/13/2013 AMEND (T) AND RECOMMIT TO FINANCE
02/13/2013 PRINT NUMBER 2609A
02/22/2013 AMEND (T) AND RECOMMIT TO FINANCE
02/22/2013 PRINT NUMBER 2609B
03/11/2013 AMEND (T) AND RECOMMIT TO FINANCE
03/11/2013 PRINT NUMBER 2609C
03/24/2013 AMEND (T) AND RECOMMIT TO FINANCE
03/24/2013 PRINT NUMBER 2609D
03/26/2013 ORDERED TO THIRD READING CAL.278
03/27/2013 PASSED SENATE
03/27/2013 DELIVERED TO ASSEMBLY
03/27/2013 referred to ways and means
03/28/2013 substituted for a3009d
03/28/2013 ordered to third reading rules cal.48
03/28/2013 motion to amend lost
03/28/2013 motion to amend lost
03/28/2013 motion to amend lost
03/28/2013 ruling of chair on point of order
03/28/2013 ruling of chair on point of order
03/28/2013 passed assembly
03/28/2013 returned to senate
03/28/2013 DELIVERED TO GOVERNOR
03/28/2013 SIGNED CHAP.59
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S02609 Memo:

Memo not available
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S02609 Text:

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

           S. 2609--D                                            A. 3009--D

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

                                   January 22, 2013
                                      ___________

       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, in relation to the  temporary  metropolitan
         transportation  business tax surcharge (Part A); to amend the tax law,
         in relation to the empire state film production credit and the  empire
         state film post production credit; and to amend part Y-1 of chapter 57
         of  the laws of 2009 amending the tax law relating to the empire state
         film production credit, in relation to reports (Part B); to amend  the
         urban  development corporation act, the tax law and the administrative
         code of the city of New York, in relation to establishing the New York
         business incubator and innovation hot spot support act  (Part  C);  to
         amend the tax law and the administrative code of the city of New York,
         in  relation to extending for three years the charitable contributions
         deduction limitation (Part D); to amend the tax law and  the  adminis-
         trative  code of the city of New York, in relation to the exclusion of
         certain royalty payments from the entire net income or  other  taxable
         basis  of  corporations,  banking  corporations,  and insurance corpo-
         rations, from the unrelated business income of corporations, and  from
         the  adjusted  gross  income  of  individual  taxpayers; and to repeal

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD12574-06-3
       S. 2609--D                          2                         A. 3009--D

         certain provisions of the tax law relating thereto (Part E); to  amend
         the tax law, in relation to the historic preservation tax credit (Part
         F);  to  amend  the tax law, in relation to providing a tax credit for
         electric  vehicle recharging property (Part G); to amend chapter 61 of
         the laws of 2011 amending the real property tax  law  and  other  laws
         relating  to  establishing  standards for electronic real property tax
         administration, in relation to extending provisions relating to manda-
         tory electronic filing  of  tax  documents  and  improving  sales  tax
         compliance  (Part  H);  intentionally  omitted  (Part I); to amend the
         general municipal law, in relation to restrictions  on  funds  of  the
         industrial  development  agency and to amend the general municipal law
         and the public authorities law, in relation to industrial  development
         agencies  and  authorities (Part J); to amend the tax law, in relation
         to expanding the exemption of CNG in the sales tax to include  natural
         gas purchased and used to produce CNG for use exclusively and directly
         in  the  engine  of a motor vehicle (Part K); to amend the tax law, in
         relation to allowing voluntary  ambulance  services,  fire  companies,
         fire  departments  and  rescue  squads  to  claim reimbursement of the
         petroleum business tax for fuel  used  in  their  vehicles  (Part  L);
         intentionally  omitted  (Part  M);  intentionally omitted (Part N); to
         amend the tax law, in relation  to  increasing  the  penalty  for  the
         possession of unstamped and unlawfully stamped cigarettes (Part O); to
         amend  the tax law and the vehicle and traffic law, in relation to the
         suspension of drivers' licenses of persons who are delinquent  in  the
         payment  of  past-due tax liabilities  (Part P); to amend the tax law,
         in relation to serving an income execution with respect to  individual
         tax  debtors without filing a warrant; and providing for the repeal of
         such provisions upon the expiration thereof  (Part  Q);  intentionally
         omitted  (Part  R);  intentionally  omitted (Part S); to amend the tax
         law, in relation to vendor fees paid to vendor  tracks  (Part  T);  to
         amend  the  racing, pari-mutuel wagering and breeding law, in relation
         to licenses for simulcast facilities, sums relating  to  track  simul-
         cast,  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-mu-
         tuel 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 U); to amend the tax law, in relation  to  the  credit  for  the
         rehabilitation  of  historic  homes (Part V); to amend the tax law, in
         relation to allowing certain tax-free interdistributor sales of  high-
         way  diesel  motor fuel (Part W); to amend the tax law, in relation to
         updating the farming exemption in  the  highway  use  tax  to  reflect
         current  industry  practice  (Part  X);  to  amend the tax law and the
         administrative code of the city of New York, in relation to  providing
         a  subtraction  from income for small businesses and small farms (Part
         Y); to amend the tax  law,  in  relation  to  providing  tax  cuts  to
         manufacturers  (Part Z); to amend the tax law, in relation to adding a
         hire a vet credit (Part AA); to  amend  the  public  service  law,  in
         relation to extending the temporary state energy and utility conserva-
         tion  assessment;  and  to amend section 6 of part NN of chapter 59 of
         the laws of 2009 amending the public service law relating to financing
         the operations of the department of public service, the public service
       S. 2609--D                          3                         A. 3009--D

         commission, department support and energy management services provided
         by other state agencies, increasing the utility assessment cap and the
         minimum threshold for collection thereunder, and establishing a tempo-
         rary  state  energy  and  utility  service conservation assessment and
         providing for the collection thereof, in  relation  to  extending  the
         effectiveness  thereof (Part BB); to amend the tax law, in relation to
         a credit for middle income taxpayers with children (Part CC); to amend
         the labor law, in relation to the New  York  youth  works  tax  credit
         program (Part DD); to amend the tax law, in relation to adding a mini-
         mum  wage  reimbursement  credit  (Part  EE); to amend the tax law, in
         relation to personal income tax rates; to amend section 11 of  part  A
         of  chapter  56  of  the  laws  of 2011, relating to the tax rates and
         exclusions under the  metropolitan  commuter  transportation  mobility
         tax, relating to withholding tables and methods for certain tax years;
         and to amend the administrative code of the city of New York, relating
         to the amounts of standard deductions (Part FF); to amend the tax law,
         in relation to the gift for New York state teen health education fund;
         and  to  amend  the state finance law, in relation to establishing the
         New York state teen health education fund  (Part  GG);  to  amend  the
         state finance law, in relation to eligible businesses participating in
         the  excelsior linked deposit program (Part HH); to amend the New York
         state urban development corporation act, in relation to small business
         loan funds for business enterprises that are minority- and women-owned
         (Part II); and in relation to establishing a New York state innovation
         capital fund (Part JJ)

         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 2013-2014
    3  state fiscal year. Each component is  wholly  contained  within  a  Part
    4  identified as Parts A through JJ. 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. Subdivision 1 of section 183-a of the tax law,  as  amended
   14  by  section 1 of part II-1 of chapter 57 of the laws of 2008, is amended
   15  to 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 and any business conducted by
   22  a  trustee  or  trustees  wherein  interest or ownership is evidenced by
   23  certificates or other written  instruments.  Every  corporation,  joint-
   24  stock  company  or  association formed for or principally engaged in the
       S. 2609--D                          4                         A. 3009--D

    1  conduct of canal, steamboat, ferry (except  a  ferry  company  operating
    2  between any of the boroughs of the city of New York under a lease grant-
    3  ed  by  the  city),  express,  navigation,  pipe line, transfer, baggage
    4  express,  omnibus,  taxicab, telegraph, or telephone business, or formed
    5  for or principally engaged in the conduct of  two  or  more  such  busi-
    6  nesses, and every corporation, joint-stock company or association formed
    7  for  or  principally  engaged  in the conduct of a 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 and which has made an
   10  election pursuant to subdivision ten of section one hundred eighty-three
   11  of this article, and every other  corporation,  joint-stock  company  or
   12  association  principally  engaged  in the conduct of a transportation or
   13  transmission business, except  a  corporation,  joint-stock  company  or
   14  association  formed for or principally engaged in the conduct of a rail-
   15  road, palace car, sleeping car or trucking business  or  formed  for  or
   16  principally engaged in the conduct of two or more of such businesses and
   17  which  has  not  made  the  election  provided for in subdivision ten of
   18  section one hundred eighty-three of this article, and  except  a  corpo-
   19  ration,  joint-stock  company  or association principally engaged in the
   20  conduct of aviation (including air freight forwarders acting as  princi-
   21  pal and like indirect air carriers) and except a corporation principally
   22  engaged  in  providing  telecommunication  services between aircraft and
   23  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 [thirteen]  EIGHTEEN,  which  tax  surcharge,  in
   42  addition  to the tax imposed by section one hundred eighty-three of this
   43  article, shall be computed at the rate of eighteen percent  of  the  tax
   44  imposed  under  such  section one hundred eighty-three for such years or
   45  any part of such years ending  before  December  thirty-first,  nineteen
   46  hundred eighty-three after the deduction of any credits otherwise allow-
   47  able 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-three
   50  after  the deduction of any credits otherwise allowable under this arti-
   51  cle; 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. 2609--D                          5                         A. 3009--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 [three] FOUR  hundred  [seventy-
    4  two] THIRTY-TWO months.
    5    S  2.  The  opening paragraph of subdivision 1 of section 184-a of the
    6  tax law, as amended by section 2 of part II-1 of chapter 57 of the  laws
    7  of 2008, is amended to read as follows:
    8    The  term "corporation" as used in this section shall include an asso-
    9  ciation, within the meaning of paragraph  three  of  subsection  (a)  of
   10  section  seventy-seven hundred one of the internal revenue code (includ-
   11  ing a limited liability company),  and  a  publicly  traded  partnership
   12  treated  as  a  corporation  for  purposes  of the internal revenue code
   13  pursuant to section seventy-seven hundred four thereof.    Every  corpo-
   14  ration,  joint-stock  company  or  association formed for or principally
   15  engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
   16  ny operating between any of the boroughs of the city of New York under a
   17  lease granted by the city), express, navigation,  pipe  line,  transfer,
   18  baggage  express,  omnibus,  taxicab, telegraph or local telephone busi-
   19  ness, or formed for or principally engaged in the conduct of two or more
   20  such businesses, and every corporation, joint-stock company  or  associ-
   21  ation  formed  for  or  principally  engaged in the conduct of a surface
   22  railroad, whether or not operated by steam,  subway  railroad,  elevated
   23  railroad,  palace  car, sleeping car or trucking business or principally
   24  engaged in the conduct of two or more such businesses and which has made
   25  an election pursuant to subdivision ten of section one  hundred  eighty-
   26  three  of this article, and every other corporation, joint-stock company
   27  or association formed for or principally engaged in  the  conduct  of  a
   28  transportation  or  transmission  business (other than a telephone busi-
   29  ness) except a corporation, joint-stock company  or  association  formed
   30  for or principally engaged in the conduct of a surface railroad, whether
   31  or  not  operated  by  steam, subway railroad, elevated railroad, palace
   32  car, sleeping car or trucking business or  principally  engaged  in  the
   33  conduct  of  two  or  more  such  businesses  and which has not made the
   34  election provided for in subdivision ten of section one hundred  eighty-
   35  three  of this article, and except a corporation, joint-stock company or
   36  association principally engaged in the conduct  of  aviation  (including
   37  air  freight forwarders acting as principal and like indirect air carri-
   38  ers) and except a corporation principally engaged in providing  telecom-
   39  munication  services  between  aircraft and dispatcher, aircraft and air
   40  traffic control or ground station and ground station (or any combination
   41  of the foregoing), at least ninety percent of the voting stock of  which
   42  corporation  is owned, directly or indirectly, by air carriers and which
   43  corporation's principal function is to fulfill the requirements  of  (i)
   44  the  federal  aviation administration (or the successor thereto) or (ii)
   45  the international civil aviation organization (or the  successor  there-
   46  to),  relating  to  the  existence  of  a  communication  system between
   47  aircraft and dispatcher, aircraft and  air  traffic  control  or  ground
   48  station and ground station (or any combination of the foregoing) for the
   49  purposes  of  air safety and navigation and except a corporation, joint-
   50  stock company or association which is liable to taxation  under  article
   51  thirty-two  of  this  chapter, shall pay for the privilege of exercising
   52  its corporate franchise, or of doing business, or of employing  capital,
   53  or  of owning or leasing property in the metropolitan commuter transpor-
   54  tation district in such corporate or organized capacity, or of maintain-
   55  ing an office in such district, a tax surcharge for all or any  part  of
   56  its taxable years commencing on or after January first, nineteen hundred
       S. 2609--D                          6                         A. 3009--D

    1  eighty-two, but ending before December thirty-first, two thousand [thir-
    2  teen]  EIGHTEEN,  which tax surcharge, in addition to the tax imposed by
    3  section one hundred eighty-four of this article, shall  be  computed  at
    4  the  rate  of eighteen percent of the tax imposed under such section one
    5  hundred eighty-four for such taxable years or any part of  such  taxable
    6  years ending before December thirty-first, nineteen hundred eighty-three
    7  after  the deduction of any credits otherwise allowable under this arti-
    8  cle, and at the rate of seventeen percent of the tax imposed under  such
    9  section  for such taxable years or any part of such taxable years ending
   10  on or after December thirty-first, nineteen hundred  eighty-three  after
   11  the  deduction  of  any  credits otherwise allowable under this article;
   12  provided, however, that such rates of tax  surcharge  shall  be  applied
   13  only to that portion of the tax imposed under section one hundred eight-
   14  y-four  of  this  article  after  the deduction of any credits otherwise
   15  allowable under this article which is  attributable  to  the  taxpayer's
   16  business  activity carried on within the metropolitan commuter transpor-
   17  tation district; and provided, further, that the tax  surcharge  imposed
   18  by  this section on corporations, joint-stock companies and associations
   19  formed for or principally engaged in the conduct of telephone  or  tele-
   20  graph business shall be computed in accordance with this subdivision and
   21  paragraph  (c)  of subdivision two of this section as if the three-quar-
   22  ters of one percent rate of tax  provided  for  in  subdivision  one  of
   23  section  one hundred eighty-four of this article were applicable to such
   24  telephone and telegraph businesses for taxable years  commencing  on  or
   25  after  January  first,  nineteen  hundred  eighty-five  and ending on or
   26  before  December  thirty-first,  nineteen   hundred   eighty-nine;   and
   27  provided,  further, that the tax surcharge imposed by this section shall
   28  not be imposed upon any taxpayer for  more  than  [three]  FOUR  hundred
   29  [seventy-two]  THIRTY-TWO  months.  Provided,  however, that for taxable
   30  years beginning in two thousand and thereafter,  for  purposes  of  this
   31  subdivision  the  tax  imposed  under section one hundred eighty-four of
   32  this article shall be deemed to have been imposed at the rate of  three-
   33  quarters  of  one  percent,  except  that  in the case of a corporation,
   34  joint-stock company or association which has made an  election  pursuant
   35  to  subdivision ten of section one hundred eighty-three of this article,
   36  for purposes of this subdivision  the  tax  imposed  under  section  one
   37  hundred eighty-four of this article shall be deemed to have been imposed
   38  at the rate of six-tenths of one percent.
   39    S 3. Subparagraph 1 of paragraph (a) of subdivision 1 of section 186-c
   40  of  the  tax  law, as amended by section 3 of part II-1 of chapter 57 of
   41  the laws of 2008, is amended to read as follows:
   42    (1) Every utility doing business in the metropolitan  commuter  trans-
   43  portation  district  shall  pay  a tax surcharge, in addition to the tax
   44  imposed by section one hundred eighty-six-a of this article, for all  or
   45  any  parts  of  its  taxable years commencing on or after January first,
   46  nineteen hundred eighty-two but ending before December thirty-first, two
   47  thousand [thirteen] EIGHTEEN, to be computed at  the  rate  of  eighteen
   48  percent  of  the  tax  imposed under section one hundred eighty-six-a of
   49  this article for such taxable years or any part of  such  taxable  years
   50  ending before December thirty-first, nineteen hundred eighty-three after
   51  the deduction of any credits otherwise allowable under this article, and
   52  at  the  rate of seventeen percent of the tax imposed under such section
   53  for such taxable years or any part of such taxable years  ending  on  or
   54  after  December  thirty-first,  nineteen  hundred eighty-three after the
   55  deduction of credits otherwise allowable under this article  except  any
   56  utility  credit  provided  for  by  article  thirteen-A of this chapter;
       S. 2609--D                          7                         A. 3009--D

    1  provided, however, that such rates of tax  surcharge  shall  be  applied
    2  only to that portion of the tax imposed under section one hundred eight-
    3  y-six-a  of this article after the deduction of credits otherwise allow-
    4  able under this article, except any utility credit provided for by arti-
    5  cle  thirteen-A of this chapter, which is attributable to the taxpayer's
    6  gross income or gross operating income from business activity carried on
    7  within the metropolitan commuter transportation district; and  provided,
    8  further,  that  the  tax  surcharge imposed by this section shall not be
    9  imposed upon any taxpayer for more than [three] FOUR  hundred  [seventy-
   10  two] THIRTY-TWO months.
   11    S  4.  Subdivision  1  of  section 209-B of the tax law, as amended by
   12  section 4 of part II-1 of chapter 57 of the laws of 2008, is amended  to
   13  read as follows:
   14    1.  For  the  privilege  of  exercising its corporate franchise, or of
   15  doing business, or of employing capital, or of owning or leasing proper-
   16  ty in a corporate or organized capacity, or of maintaining an office  in
   17  the  metropolitan  commuter transportation district, for all or any part
   18  of its taxable year, there is hereby imposed on every corporation, other
   19  than a New York S corporation, subject to tax under section two  hundred
   20  nine  of  this  article,  or any receiver, referee, trustee, assignee or
   21  other fiduciary, or any officer or agent appointed  by  any  court,  who
   22  conducts  the  business  of  any such corporation, for the taxable years
   23  commencing on or after January first, nineteen  hundred  eighty-two  but
   24  ending before December thirty-first, two thousand [thirteen] EIGHTEEN, a
   25  tax  surcharge, in addition to the tax imposed under section two hundred
   26  nine of this article, to be computed at the rate of eighteen percent  of
   27  the  tax  imposed  under  such section two hundred nine for such taxable
   28  years or any part of such taxable years ending before  December  thirty-
   29  first,  nineteen hundred eighty-three after the deduction of any credits
   30  otherwise allowable under this article, and at  the  rate  of  seventeen
   31  percent  of the tax imposed under such section for such taxable years or
   32  any part of such taxable years ending on or after December thirty-first,
   33  nineteen hundred eighty-three after the deduction of any credits  other-
   34  wise allowable under this article; provided, however, that such rates of
   35  tax  surcharge  shall be applied only to that portion of the tax imposed
   36  under section two hundred nine of this article after  the  deduction  of
   37  any credits otherwise allowable under this article which is attributable
   38  to  the  taxpayer's business activity carried on within the metropolitan
   39  commuter transportation district; and provided, further,  that  the  tax
   40  surcharge imposed by this section shall not be imposed upon any taxpayer
   41  for  more  than  [three]  FOUR  hundred [seventy-two] THIRTY-TWO months.
   42  Provided however, that for taxable years commencing  on  or  after  July
   43  first, nineteen hundred ninety-eight, such surcharge shall be calculated
   44  as if the tax imposed under section two hundred ten of this article were
   45  imposed under the law in effect for taxable years commencing on or after
   46  July  first,  nineteen hundred ninety-seven and before July first, nine-
   47  teen hundred ninety-eight. Provided  however,  that  for  taxable  years
   48  commencing on or after January first, two thousand seven, such surcharge
   49  shall  be calculated using the highest of the tax bases imposed pursuant
   50  to paragraphs (a), (b), (c) or (d) of subdivision  one  of  section  two
   51  hundred  ten  of this article and the amount imposed under paragraph (e)
   52  of subdivision one of such section two  hundred  ten,  for  the  taxable
   53  year; and, provided further that, if such highest amount is the tax base
   54  imposed  under  paragraph  (a), (b) or (c) of such subdivision, then the
   55  surcharge shall be computed as if the tax rates  and  limitations  under
   56  such  paragraph  were the tax rates and limitations under such paragraph
       S. 2609--D                          8                         A. 3009--D

    1  in effect for taxable years commencing on or after July first,  nineteen
    2  hundred  ninety-seven  and  before  July first, nineteen hundred ninety-
    3  eight.
    4    S  5.  Subsection  1  of  section 1455-B of the tax law, as amended by
    5  section 5 of part II-1 of chapter 57 of the laws of 2008, is amended  to
    6  read as follows:
    7    1.  For the privilege of exercising its franchise or doing business in
    8  the metropolitan commuter transportation  district  in  a  corporate  or
    9  organized capacity, there is hereby imposed on every taxpayer subject to
   10  tax  under  this  article,  other than a New York S corporation, for the
   11  taxable years commencing on or after  January  first,  nineteen  hundred
   12  eighty-two  but ending before December thirty-first, two thousand [thir-
   13  teen] EIGHTEEN, a tax surcharge, in addition to the  tax  imposed  under
   14  section fourteen hundred fifty-one of this article, at the rate of eigh-
   15  teen  percent  of  the  tax  imposed under such section fourteen hundred
   16  fifty-one of this article, for such taxable years or any  part  of  such
   17  taxable  years  ending  before  December  thirty-first, nineteen hundred
   18  eighty-three after the deduction  of  any  credits  otherwise  allowable
   19  under  this  article,  and  at  the rate of seventeen percent of the tax
   20  imposed under such section for such taxable years or any  part  of  such
   21  taxable years ending on or after December thirty-first, nineteen hundred
   22  eighty-three  after  the  deduction  of  any credits otherwise allowable
   23  under this article; provided however, that such rates of  tax  surcharge
   24  shall  be  applied only to that portion of the tax imposed under section
   25  fourteen hundred fifty-one of this article after the  deduction  of  any
   26  credits  otherwise allowable under this article which is attributable to
   27  the taxpayer's business activity  carried  on  within  the  metropolitan
   28  commuter  transportation  district;  and provided, further, that the tax
   29  surcharge imposed by this section shall not be imposed upon any taxpayer
   30  for more than [three]  FOUR  hundred  [seventy-two]  THIRTY-TWO  months.
   31  Provided  however,  that  for  taxable years commencing on or after July
   32  first, two thousand, such surcharge shall be calculated as if  the  rate
   33  of  the  basic  tax  computed  under  subsection (a) of section fourteen
   34  hundred fifty-five of this article was nine percent.
   35    S 6. Paragraphs 1 and 3 of subdivision (a) of section  1505-a  of  the
   36  tax  law, as amended by section 6 of part II-1 of chapter 57 of the laws
   37  of 2008, are amended to read as follows:
   38    (1) Every domestic insurance corporation and every  foreign  or  alien
   39  insurance corporation, and every life insurance corporation described in
   40  subdivision  (b) of section fifteen hundred one of this article, for the
   41  privilege of exercising its corporate franchise, or of  doing  business,
   42  or  of employing capital, or of owning or leasing property in the metro-
   43  politan commuter transportation district in  a  corporate  or  organized
   44  capacity,  or  of  maintaining  an  office  in the metropolitan commuter
   45  transportation district, for all  or  any  part  of  its  taxable  years
   46  commencing  on  or after January first, nineteen hundred eighty-two, but
   47  ending before December thirty-first, two thousand  [thirteen]  EIGHTEEN,
   48  except  corporations  specified  in  subdivision  (c) of section fifteen
   49  hundred twelve of this article, shall annually pay, in addition  to  the
   50  taxes  otherwise  imposed  by this article, a tax surcharge on the taxes
   51  imposed under this article after the deduction of any credits  otherwise
   52  allowable  under  this article as allocated to such district. Such taxes
   53  shall be allocated to such district for purposes of computing  such  tax
   54  surcharge upon taxpayers subject to tax under subdivision (b) of section
   55  fifteen  hundred ten of this article by applying the methodology, proce-
   56  dures and computations set forth in subdivisions (a) and (b) of  section
       S. 2609--D                          9                         A. 3009--D

    1  fifteen  hundred  four  of this article, except that references to terms
    2  denoting New York premiums, and total wages, salaries, personal  service
    3  compensation  and  commissions within New York shall be read as denoting
    4  within  the  metropolitan  commuter  transportation  district  and terms
    5  denoting total premiums and  total  wages,  salaries,  personal  service
    6  compensation and commissions shall be read as denoting within the state.
    7  If it shall appear to the commissioner that the application of the meth-
    8  odology,  procedures and computations set forth in such subdivisions (a)
    9  and (b) does not properly reflect the activity, business or income of  a
   10  taxpayer  within the metropolitan commuter transportation district, then
   11  the commissioner shall be authorized, in the commissioner's  discretion,
   12  to  adjust such methodology, procedures and computations for the purpose
   13  of allocating such taxes by:
   14    (A) excluding one or more factors therein;
   15    (B) including one or more other factors  therein,  such  as  expenses,
   16  purchases,  receipts  other  than  premiums,  real  property or tangible
   17  personal property; or
   18    (C) any other similar or different method which allocates  such  taxes
   19  by  attributing a fair and proper portion of such taxes to the metropol-
   20  itan commuter transportation district. The  commissioner  from  time  to
   21  time  shall  publish all rulings of general public interest with respect
   22  to any application of the provisions  of  the  preceding  sentence.  The
   23  commissioner  may  promulgate rules and regulations to further implement
   24  the provisions of this section.
   25    (3) Such tax surcharge shall be  computed  at  the  rate  of  eighteen
   26  percent  of  the  taxes  imposed  under sections fifteen hundred one and
   27  fifteen hundred ten of  this  article  as  limited  by  section  fifteen
   28  hundred  five  of  this article, as allocated to such district, for such
   29  taxable years or any part of such taxable years ending  before  December
   30  thirty-first,  nineteen  hundred eighty-three after the deduction of any
   31  credits otherwise allowable under this article, at the rate of seventeen
   32  percent of the taxes imposed under such sections as limited  by  section
   33  fifteen hundred five of this article, as allocated to such district, for
   34  such  taxable years or any part of such taxable years ending on or after
   35  December thirty-first, nineteen hundred eighty-three and before  January
   36  first,  two  thousand three after the deduction of any credits otherwise
   37  allowable under this article, and at the rate of  seventeen  percent  of
   38  the  taxes  imposed  under sections fifteen hundred one, fifteen hundred
   39  two-a, and fifteen hundred ten of this article, as limited or  otherwise
   40  determined  by subdivision (a) or (b) of section fifteen hundred five of
   41  this article, as allocated to such district, for such taxable  years  or
   42  any  part  of such taxable years ending after December thirty-first, two
   43  thousand two after the deduction  of  any  credits  otherwise  allowable
   44  under this article; provided, however, that the tax surcharge imposed by
   45  this  section  shall  not  be  imposed  upon  any taxpayer for more than
   46  [three] FOUR hundred [seventy-two] THIRTY-TWO months. Provided  however,
   47  that  for taxable years commencing on or after July first, two thousand,
   48  and in the case of  taxpayers  subject  to  tax  under  section  fifteen
   49  hundred  two-a  of  this  article,  for  taxable years of such taxpayers
   50  beginning on or after July first, two thousand and before January first,
   51  two thousand three, such surcharge shall be calculated  as  if  (i)  the
   52  rate  of  the  tax  computed  under  paragraph one of subdivision (a) of
   53  section fifteen hundred two of this article was nine  percent  and  (ii)
   54  the  rate  of the limitation on tax set forth in section fifteen hundred
   55  five of this article for domestic, foreign and  alien  insurance  corpo-
       S. 2609--D                         10                         A. 3009--D

    1  rations  except  life  insurance  corporations  was  two  and six-tenths
    2  percent.
    3    S 7. This act shall take effect immediately.

    4                                   PART B

    5    Section  1.    Paragraph 3 of subdivision (b) of section 24 of the tax
    6  law, as added by section 1 of part P of chapter 60 of the laws of  2004,
    7  is amended to read as follows:
    8    (3)  "Qualified  film"  means  a feature-length film, television film,
    9  RELOCATED TELEVISION PRODUCTION, television pilot and/or each episode of
   10  a television series, regardless of the medium  by  means  of  which  the
   11  film,  pilot  or  episode is created or conveyed. "Qualified film" shall
   12  not include (i) a documentary film, news  or  current  affairs  program,
   13  interview  or  talk  program,  "how-to"  (i.e.,  instructional)  film or
   14  program, film or program consisting primarily of stock footage, sporting
   15  event or sporting program, game show, award ceremony,  film  or  program
   16  intended primarily for industrial, corporate or institutional end-users,
   17  fundraising film or program, daytime drama (i.e., daytime "soap opera"),
   18  commercials, music videos or "reality" program, or (ii) a production for
   19  which records are required under section 2257 of title 18, United States
   20  code,  to be maintained with respect to any performer in such production
   21  (reporting of books, films,  etc.  with  respect  to  sexually  explicit
   22  conduct).
   23    S 2. Subdivision (b) of section 24 of the tax law is amended by adding
   24  a new paragraph 8 to read as follows:
   25    (8)  "RELOCATED TELEVISION PRODUCTION" SHALL MEAN, NOTWITHSTANDING THE
   26  LIMITATIONS IN SUBPARAGRAPH (I) OF PARAGRAPH THREE OF THIS  SUBDIVISION,
   27  A TELEVISION PRODUCTION THAT IS A TALK OR VARIETY PROGRAM THAT FILMED AT
   28  LEAST FIVE SEASONS OUTSIDE THE STATE PRIOR TO ITS FIRST RELOCATED SEASON
   29  IN  NEW  YORK,  THE  EPISODES ARE FILMED BEFORE A STUDIO AUDIENCE OF TWO
   30  HUNDRED OR MORE, AND THE RELOCATED TELEVISION PRODUCTION INCURS  (I)  AT
   31  LEAST THIRTY MILLION DOLLARS IN ANNUAL PRODUCTION COSTS IN THE STATE, OR
   32  (II) AT LEAST TEN MILLION DOLLARS IN CAPITAL EXPENDITURES AT A QUALIFIED
   33  PRODUCTION FACILITY IN THE STATE.
   34    S  3.  Paragraph 4 of subdivision (e) of section 24 of the tax law, as
   35  added by chapter 268 of the laws of 2012, is amended to read as follows:
   36    (4) Additional pool 2 - The aggregate amount of tax credits allowed in
   37  subdivision (a) of this section shall  be  increased  by  an  [addition]
   38  ADDITIONAL  four hundred twenty million dollars in EACH YEAR STARTING IN
   39  two thousand ten[, four hundred twenty million dollars in  two  thousand
   40  eleven, four hundred twenty million dollars in two thousand twelve, four
   41  hundred twenty million dollars in two thousand thirteen and four hundred
   42  twenty  million  dollars  in two thousand fourteen] THROUGH TWO THOUSAND
   43  NINETEEN provided however, seven million dollars  of  the  annual  allo-
   44  cation  shall  be  available  for  the empire state film post production
   45  credit pursuant to section thirty-one of this [chapter] ARTICLE  IN  TWO
   46  THOUSAND  THIRTEEN  AND  TWO  THOUSAND  FOURTEEN AND TWENTY-FIVE MILLION
   47  DOLLARS OF THE ANNUAL ALLOCATION SHALL BE AVAILABLE FOR THE EMPIRE STATE
   48  FILM POST PRODUCTION CREDIT PURSUANT TO SECTION THIRTY-ONE OF THIS ARTI-
   49  CLE IN EACH YEAR STARTING IN TWO THOUSAND FIFTEEN THROUGH  TWO  THOUSAND
   50  NINETEEN.    This amount shall be allocated by the governor's office for
   51  motion picture and television development among taxpayers in  accordance
   52  with subdivision (a) of this section. If the [director of the governor's
   53  office  for  motion  picture and television development] COMMISSIONER OF
   54  ECONOMIC DEVELOPMENT determines that the aggregate amount of tax credits
       S. 2609--D                         11                         A. 3009--D

    1  available from additional pool 2 for the empire  state  film  production
    2  tax credit have been previously allocated, and determines that the pend-
    3  ing applications from eligible applicants for the EMPIRE STATE FILM post
    4  production  tax  credit pursuant to section thirty-one of this [chapter]
    5  ARTICLE is insufficient to utilize the  balance  of  unallocated  EMPIRE
    6  STATE  FILM  post  production tax credits from such pool, the remainder,
    7  after such pending applications are considered, shall be made  available
    8  for  allocation  in  the  empire  state film tax credit pursuant to this
    9  section,  subdivision  thirty-six  of  section  two  hundred   ten   and
   10  subsection  (gg)  of  section six hundred six of this chapter.  ALSO, IF
   11  THE COMMISSIONER OF ECONOMIC DEVELOPMENT DETERMINES THAT  THE  AGGREGATE
   12  AMOUNT  OF  TAX  CREDITS AVAILABLE FROM ADDITIONAL POOL 2 FOR THE EMPIRE
   13  STATE FILM POST PRODUCTION TAX CREDIT HAVE  BEEN  PREVIOUSLY  ALLOCATED,
   14  AND  DETERMINES  THAT  THE PENDING APPLICATIONS FROM ELIGIBLE APPLICANTS
   15  FOR THE EMPIRE STATE FILM PRODUCTION TAX CREDIT PURSUANT TO THIS SECTION
   16  IS INSUFFICIENT TO UTILIZE THE BALANCE OF  UNALLOCATED  FILM  PRODUCTION
   17  TAX  CREDITS  FROM  SUCH  POOL, THEN ALL OR PART OF THE REMAINDER, AFTER
   18  SUCH PENDING APPLICATIONS ARE CONSIDERED, SHALL BE  MADE  AVAILABLE  FOR
   19  ALLOCATION  FOR THE EMPIRE STATE FILM POST PRODUCTION CREDIT PURSUANT TO
   20  THIS SECTION, SUBDIVISION FORTY-ONE  OF  SECTION  TWO  HUNDRED  TEN  AND
   21  SUBSECTION  (GG)  OF SECTION SIX HUNDRED SIX OF THIS CHAPTER. The gover-
   22  nor's office for motion picture and television development  must  notify
   23  taxpayers  of  their  allocation year and include the allocation year on
   24  the certificate of tax credit.   Taxpayers eligible to  claim  a  credit
   25  must  report  the  allocation  year  directly on their empire state film
   26  production credit tax form for each year a credit is claimed and include
   27  a copy of the certificate with their tax return. In the case of a quali-
   28  fied film that receives funds from additional pool 2,  no  empire  state
   29  film  production credit shall be claimed before the later of the taxable
   30  year the production of the qualified film is complete,  or  the  taxable
   31  year  immediately  following  the allocation year for which the film has
   32  been allocated credit by the governor's office for  motion  picture  and
   33  television development.
   34    S  4.  Paragraph 1 of subdivision (b) of section 24 of the tax law, as
   35  amended by section 6 of part Q of chapter 57 of the  laws  of  2010,  is
   36  amended to read as follows:
   37    (1)  "Qualified  production  costs" means production costs only to the
   38  extent such costs are attributable to the use of  tangible  property  or
   39  the  performance of services within the state directly and predominantly
   40  in the production (including pre-production and post  production)  of  a
   41  qualified  film[,  provided,  however,  that  qualified production costs
   42  shall not include post production costs unless the portion of  the  post
   43  production  costs  paid  or  incurred that is attributable to the use of
   44  tangible property or the performance of services  in  New  York  in  the
   45  production of such qualified film equals or exceeds seventy-five percent
   46  of  the total post production costs spent within and without New York in
   47  the production of such qualified film].
   48    S 5. Paragraph 3 of subdivision (a) of section 31 of the tax  law,  as
   49  added  by  section  12  of  part Q of chapter 57 of the laws of 2010, is
   50  amended to read as follows:
   51    (3) (I) A taxpayer shall not be eligible for the credit established by
   52  this section FOR QUALIFIED POST PRODUCTION COSTS,  EXCLUDING  THE  COSTS
   53  FOR  VISUAL  EFFECTS AND ANIMATION, unless the qualified post production
   54  costs, EXCLUDING THE COSTS FOR VISUAL EFFECTS AND ANIMATION, at a quali-
   55  fied post production facility meet or exceed seventy-five percent of the
   56  total post production costs, EXCLUDING THE COSTS FOR VISUAL EFFECTS  AND
       S. 2609--D                         12                         A. 3009--D

    1  ANIMATION, paid or incurred in the post production of the qualified film
    2  at  any post production facility.  (II) A TAXPAYER SHALL NOT BE ELIGIBLE
    3  FOR THE CREDIT ESTABLISHED BY THIS SECTION FOR QUALIFIED POST PRODUCTION
    4  COSTS  WHICH ARE COSTS FOR VISUAL EFFECTS OR ANIMATION UNLESS THE QUALI-
    5  FIED POST PRODUCTION COSTS FOR VISUAL EFFECTS OR ANIMATION AT  A  QUALI-
    6  FIED  POST  PRODUCTION  FACILITY MEET OR EXCEED THREE MILLION DOLLARS OR
    7  TWENTY PERCENT OF THE TOTAL POST PRODUCTION COSTS FOR VISUAL EFFECTS  OR
    8  ANIMATION PAID OR INCURRED IN THE POST PRODUCTION OF A QUALIFIED FILM AT
    9  ANY  POST  PRODUCTION  FACILITY, WHICHEVER IS LESS. (III) A TAXPAYER MAY
   10  CLAIM A CREDIT FOR QUALIFIED POST PRODUCTION COSTS EXCLUDING  THE  COSTS
   11  FOR  VISUAL  EFFECTS  AND  ANIMATION,  AND FOR QUALIFIED POST PRODUCTION
   12  COSTS OF VISUAL EFFECTS AND ANIMATION, PROVIDED  THAT  THE  CRITERIA  IN
   13  SUBPARAGRAPHS  (I)  AND  (II)  OF THIS PARAGRAPH ARE BOTH SATISFIED. The
   14  credit shall be allowed for the taxable year in which the production  of
   15  such qualified film is completed.
   16    S  5-a.  Subdivision  (a)  of  section  31 of the tax law, as added by
   17  section 12 of part Q of chapter 57 of the laws of 2010,  is  amended  by
   18  adding a new paragraph 5 to read as follows:
   19    (5)  IF  THE  AMOUNT OF THE CREDIT IS AT LEAST ONE MILLION DOLLARS BUT
   20  LESS THAN FIVE MILLION DOLLARS, THE CREDIT SHALL BE CLAIMED OVER  A  TWO
   21  YEAR  PERIOD BEGINNING IN THE FIRST TAXABLE YEAR IN WHICH THE CREDIT MAY
   22  BE CLAIMED AND IN THE NEXT SUCCEEDING TAXABLE YEAR, WITH ONE-HALF OF THE
   23  AMOUNT OF CREDIT ALLOWED BEING CLAIMED IN EACH YEAR. IF  THE  AMOUNT  OF
   24  THE CREDIT IS AT LEAST FIVE MILLION DOLLARS, THE CREDIT SHALL BE CLAIMED
   25  OVER  A  THREE  YEAR PERIOD BEGINNING IN THE FIRST TAXABLE YEAR IN WHICH
   26  THE CREDIT MAY BE CLAIMED AND IN THE NEXT TWO SUCCEEDING TAXABLE  YEARS,
   27  WITH ONE-THIRD OF THE AMOUNT OF THE CREDIT ALLOWED BEING CLAIMED IN EACH
   28  YEAR.
   29    S 6. Section 3 of part Y-1 of chapter 57 of the laws of 2009, amending
   30  the  tax  law  relating  to  the empire state film production credit, is
   31  amended to read as follows:
   32    S 3. A. The governor's office of motion picture and television  devel-
   33  opment shall file a report on a quarterly basis with the director of the
   34  division  of  the budget and the chairmen of the assembly ways and means
   35  committee and senate finance committee. The report shall be filed within
   36  fifteen days after the close of the calendar quarter. The  first  report
   37  shall  cover  the calendar quarter that begins April 1, 2009. The report
   38  must contain the following information for the calendar quarter:
   39    (1) the total dollar amount of credits allocated during each month  of
   40  the calendar quarter, broken down by month;
   41    (2)  the number of film projects which have been allocated tax credits
   42  of less than $1 million per project and the total dollar amount of cred-
   43  its allocated to those projects;
   44    (3) the number of film projects which have been allocated tax  credits
   45  of $1 million or more but less than $5 million per project and the total
   46  dollar amount of credits allocated to those projects;
   47    (4)  the number of film projects which have been allocated tax credits
   48  of $5 million or more per project and the total dollar amount of credits
   49  allocated to those projects; [and]
   50    (5)  a list of each film project which has been allocated a tax credit
   51  and for each of those projects (a) the  estimated  number  of  employees
   52  associated  with  the project, (b) the estimated qualified costs for the
   53  project, [and] (c) the estimated total costs of  the  project,  (D)  THE
   54  CREDIT-ELIGIBLE MAN HOURS FOR EACH PROJECT; AND (E) TOTAL WAGES FOR SUCH
   55  CREDIT-ELIGIBLE MAN HOURS FOR EACH PROJECT; AND
       S. 2609--D                         13                         A. 3009--D

    1    (6)(A)  THE  NAME  OF  EACH  TAXPAYER  ALLOCATED A TAX CREDIT FOR EACH
    2  PROJECT AND THE COUNTY OF RESIDENCE OR INCORPORATION  OF  SUCH  TAXPAYER
    3  OR,  IF THE TAXPAYER DOES NOT RESIDE OR IS NOT INCORPORATED IN NEW YORK,
    4  THEN THE STATE OF RESIDENCE OR INCORPORATION; PROVIDED HOWEVER,  IF  THE
    5  TAXPAYER  CLAIMS  A  TAX  CREDIT  BECAUSE  THE TAXPAYER IS A MEMBER OF A
    6  LIMITED LIABILITY COMPANY, A PARTNER IN A PARTNERSHIP OR  A  SHAREHOLDER
    7  IN A SUBCHAPTER S CORPORATION, THE NAME OF EACH LIMITED LIABILITY COMPA-
    8  NY,  PARTNERSHIP  OR  SUBCHAPTER  S CORPORATION EARNING ANY OF THOSE TAX
    9  CREDITS MUST BE INCLUDED IN THE REPORT INSTEAD OF INFORMATION ABOUT  THE
   10  TAXPAYER CLAIMING THE TAX CREDIT, (B) THE AMOUNT OF TAX CREDIT ALLOCATED
   11  TO  EACH TAXPAYER; PROVIDED HOWEVER, IF THE TAXPAYER CLAIMS A TAX CREDIT
   12  BECAUSE THE TAXPAYER IS A MEMBER OF A LIMITED LIABILITY COMPANY, A PART-
   13  NER IN A PARTNERSHIP OR A SHAREHOLDER IN A SUBCHAPTER S CORPORATION, THE
   14  AMOUNT OF TAX CREDIT EARNED BY EACH  ENTITY  MUST  BE  INCLUDED  IN  THE
   15  REPORT  INSTEAD OF INFORMATION ABOUT THE TAXPAYER CLAIMING THE TAX CRED-
   16  IT, AND (C) INFORMATION IDENTIFYING THE  PROJECT  ASSOCIATED  WITH  EACH
   17  TAXPAYER  FOR WHICH A TAX CREDIT WAS CLAIMED UNDER SECTION 24 OR SECTION
   18  31, AS ADDED BY CHAPTER 57 OF THE LAWS OF 2010, OF THE TAX LAW,  INCLUD-
   19  ING THE NAME OF THE FILM AND COUNTY IN WHICH THE PROJECT IS LOCATED; AND
   20    B.  THE GOVERNOR'S OFFICE OF MOTION PICTURE AND TELEVISION DEVELOPMENT
   21  SHALL FILE A REPORT ON A BIENNIAL BASIS WITH THE DIRECTOR OF  THE  DIVI-
   22  SION OF THE BUDGET AND THE CHAIRS OF THE ASSEMBLY WAYS AND MEANS COMMIT-
   23  TEE  AND  SENATE  FINANCE  COMMITTEE.  THE  REPORT SHALL BE FILED WITHIN
   24  FIFTEEN DAYS AFTER THE CLOSE OF THE  CALENDAR  YEAR.  THE  FIRST  REPORT
   25  SHALL COVER A TWO YEAR PERIOD THAT BEGINS ON JANUARY FIRST, TWO THOUSAND
   26  THIRTEEN.  THE  REPORT  MUST  BE  PREPARED BY AN INDEPENDENT THIRD PARTY
   27  AUDITOR AND INCLUDE: (1) INFORMATION REGARDING  THE  EMPIRE  STATE  FILM
   28  PRODUCTION  CREDIT  AND  POST  PRODUCTION  CREDIT PROGRAMS INCLUDING THE
   29  EFFICIENCY OF OPERATIONS, RELIABILITY OF FINANCIAL REPORTING, COMPLIANCE
   30  WITH LAWS AND REGULATIONS AND DISTRIBUTION OF ASSETS AND FUNDS;  (2)  AN
   31  ECONOMIC IMPACT STUDY PREPARED BY AN INDEPENDENT THIRD PARTY OF THE FILM
   32  CREDIT  PROGRAMS; AND (3) ANY OTHER INFORMATION AND/OR OTHER STATISTICAL
   33  INFORMATION THAT THE COMMISSIONER OF ECONOMIC DEVELOPMENT  DEEMS  TO  BE
   34  USEFUL IN ANALYZING THE EFFECTS OF THE PROGRAM.
   35    S 7. Subdivision (a) of section 24 of the tax law is amended by adding
   36  a new paragraph 5 to read as follows:
   37    (5) FOR THE PERIOD TWO THOUSAND FIFTEEN THROUGH TWO THOUSAND NINETEEN,
   38  IN ADDITION TO THE AMOUNT OF CREDIT ESTABLISHED IN PARAGRAPH TWO OF THIS
   39  SUBDIVISION,  A  TAXPAYER SHALL BE ALLOWED A CREDIT EQUAL TO THE PRODUCT
   40  (OR PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF A MEMBER OF A PARTNER-
   41  SHIP) OF TEN PERCENT AND THE AMOUNT OF WAGES OR SALARIES PAID  TO  INDI-
   42  VIDUALS  DIRECTLY  EMPLOYED (EXCLUDING THOSE EMPLOYED AS WRITERS, DIREC-
   43  TORS, MUSIC DIRECTORS, PRODUCERS AND  PERFORMERS,  INCLUDING  BACKGROUND
   44  ACTORS WITH NO SCRIPTED LINES) BY A QUALIFIED FILM PRODUCTION COMPANY OR
   45  A  QUALIFIED  INDEPENDENT FILM PRODUCTION COMPANY FOR SERVICES PERFORMED
   46  BY THOSE INDIVIDUALS IN ONE OF THE COUNTIES SPECIFIED IN THIS  PARAGRAPH
   47  IN  CONNECTION  WITH  A  QUALIFIED  FILM  WITH  A MINIMUM BUDGET OF FIVE
   48  HUNDRED THOUSAND DOLLARS. FOR PURPOSES OF THIS  ADDITIONAL  CREDIT,  THE
   49  SERVICES  MUST  BE  PERFORMED  IN ONE OR MORE OF THE FOLLOWING COUNTIES:
   50  ALLEGANY, BROOME, CATTARAUGUS, CAYUGA,  CHAUTAUQUA,  CHEMUNG,  CHENANGO,
   51  CLINTON,  CORTLAND,  DELAWARE,  ERIE,  ESSEX, FRANKLIN, FULTON, GENESEE,
   52  HAMILTON, HERKIMER, JEFFERSON, LEWIS, LIVINGSTON, MADISON, MONROE, MONT-
   53  GOMERY, NIAGARA, ONEIDA, ONONDAGA,  ONTARIO,  ORLEANS,  OSWEGO,  OTSEGO,
   54  SCHOHARIE,  SCHUYLER,  SENECA,  ST.  LAWRENCE, STEUBEN, TIOGA, TOMPKINS,
   55  WAYNE, WYOMING, OR YATES. THE AGGREGATE AMOUNT OF  TAX  CREDITS  ALLOWED
   56  PURSUANT  TO  THE  AUTHORITY  OF  THIS  PARAGRAPH  SHALL BE FIVE MILLION
       S. 2609--D                         14                         A. 3009--D

    1  DOLLARS EACH YEAR DURING THE PERIOD TWO  THOUSAND  FIFTEEN  THROUGH  TWO
    2  THOUSAND NINETEEN OF THE ANNUAL ALLOCATION MADE AVAILABLE TO THE PROGRAM
    3  PURSUANT  TO  PARAGRAPH  FOUR  OF SUBDIVISION (E) OF THIS SECTION.  SUCH
    4  AGGREGATE  AMOUNT OF CREDITS SHALL BE ALLOCATED BY THE GOVERNOR'S OFFICE
    5  FOR MOTION PICTURE AND TELEVISION DEVELOPMENT AMONG TAXPAYERS  IN  ORDER
    6  OF  PRIORITY BASED UPON THE DATE OF FILING AN APPLICATION FOR ALLOCATION
    7  OF FILM PRODUCTION CREDIT WITH SUCH OFFICE. IF THE TOTAL AMOUNT OF ALLO-
    8  CATED CREDITS APPLIED FOR UNDER THIS PARAGRAPH IN ANY YEAR  EXCEEDS  THE
    9  AGGREGATE  AMOUNT  OF TAX CREDITS ALLOWED FOR SUCH YEAR UNDER THIS PARA-
   10  GRAPH, SUCH EXCESS SHALL BE TREATED AS HAVING BEEN APPLIED  FOR  ON  THE
   11  FIRST  DAY OF THE NEXT YEAR.  IF THE TOTAL AMOUNT OF ALLOCATED TAX CRED-
   12  ITS APPLIED FOR UNDER THIS PARAGRAPH AT THE CONCLUSION OF  ANY  YEAR  IS
   13  LESS  THAN  FIVE MILLION DOLLARS, THE REMAINDER SHALL BE TREATED AS PART
   14  OF THE ANNUAL ALLOCATION MADE AVAILABLE TO THE PROGRAM PURSUANT TO PARA-
   15  GRAPH FOUR OF SUBDIVISION (E) OF THIS SECTION. HOWEVER, IN NO EVENT  MAY
   16  THE  TOTAL OF THE CREDITS ALLOCATED UNDER THIS PARAGRAPH AND THE CREDITS
   17  ALLOCATED UNDER PARAGRAPH FIVE OF SUBDIVISION (A) OF SECTION  THIRTY-ONE
   18  OF THIS ARTICLE EXCEED FIVE MILLION DOLLARS IN ANY YEAR DURING THE PERI-
   19  OD TWO THOUSAND FIFTEEN THROUGH TWO THOUSAND NINETEEN.
   20    S 8. Subdivision (a) of section 31 of the tax law, as added by section
   21  12  of  Part Q of chapter 57 of the laws of 2010, is amended by adding a
   22  new paragraph 5 to read as follows:
   23    (5) FOR THE PERIOD TWO THOUSAND FIFTEEN THROUGH TWO THOUSAND NINETEEN,
   24  IN ADDITION TO THE AMOUNT OF CREDIT  ESTABLISHED  IN  PARAGRAPH  TWO  OF
   25  SUBDIVISION  (A)  OF  THIS SECTION, A TAXPAYER SHALL BE ALLOWED A CREDIT
   26  EQUAL TO THE PRODUCT (OR PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF A
   27  MEMBER OF A PARTNERSHIP) OF TEN PERCENT AND THE AMOUNT OF WAGES OR SALA-
   28  RIES PAID TO INDIVIDUALS DIRECTLY EMPLOYED (EXCLUDING THOSE EMPLOYED  AS
   29  WRITERS, DIRECTORS, MUSIC DIRECTORS, PRODUCERS AND PERFORMERS, INCLUDING
   30  BACKGROUND  ACTORS  WITH  NO  SCRIPTED  LINES) FOR SERVICES PERFORMED BY
   31  THOSE INDIVIDUALS IN ONE OF THE COUNTIES SPECIFIED IN THIS PARAGRAPH  IN
   32  CONNECTION  WITH  THE  POST  PRODUCTION  WORK ON A QUALIFIED FILM WITH A
   33  MINIMUM BUDGET OF FIVE HUNDRED THOUSAND  DOLLARS  AT  A  QUALIFIED  POST
   34  PRODUCTION FACILITY IN ONE OF THE COUNTIES LISTED IN THIS PARAGRAPH. FOR
   35  PURPOSES  OF  THIS  ADDITIONAL CREDIT, THE SERVICES MUST BE PERFORMED IN
   36  ONE OR MORE OF THE FOLLOWING COUNTIES:   ALLEGANY, BROOME,  CATTARAUGUS,
   37  CAYUGA,  CHAUTAUQUA,  CHEMUNG,  CHENANGO,  CLINTON,  CORTLAND, DELAWARE,
   38  ERIE, ESSEX, FRANKLIN, FULTON, GENESEE, HAMILTON,  HERKIMER,  JEFFERSON,
   39  LEWIS, LIVINGSTON, MADISON, MONROE, MONTGOMERY, NIAGARA, ONEIDA, ONONDA-
   40  GA,  ONTARIO,  ORLEANS, OSWEGO, OTSEGO, SCHOHARIE, SCHUYLER, SENECA, ST.
   41  LAWRENCE, STEUBEN, TIOGA, TOMPKINS, WAYNE, WYOMING, OR YATES. THE AGGRE-
   42  GATE AMOUNT OF TAX CREDITS ALLOWED PURSUANT TO  THE  AUTHORITY  OF  THIS
   43  PARAGRAPH  SHALL BE FIVE MILLION DOLLARS EACH YEAR DURING THE PERIOD TWO
   44  THOUSAND FIFTEEN THROUGH TWO THOUSAND NINETEEN OF THE ANNUAL  ALLOCATION
   45  MADE  AVAILABLE TO THE EMPIRE STATE FILM POST PRODUCTION CREDIT PURSUANT
   46  TO PARAGRAPH FOUR OF SUBDIVISION (E)  OF  SECTION  TWENTY-FOUR  OF  THIS
   47  ARTICLE.  SUCH  AGGREGATE  AMOUNT  OF  CREDITS SHALL BE ALLOCATED BY THE
   48  GOVERNOR'S OFFICE FOR MOTION PICTURE AND  TELEVISION  DEVELOPMENT  AMONG
   49  TAXPAYERS IN ORDER OF PRIORITY BASED UPON THE DATE OF FILING AN APPLICA-
   50  TION  FOR  ALLOCATION OF POST PRODUCTION CREDIT WITH SUCH OFFICE. IF THE
   51  TOTAL AMOUNT OF ALLOCATED CREDITS APPLIED FOR UNDER  THIS  PARAGRAPH  IN
   52  ANY  YEAR  EXCEEDS  THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED FOR SUCH
   53  YEAR UNDER THIS PARAGRAPH, SUCH EXCESS SHALL BE TREATED AS  HAVING  BEEN
   54  APPLIED  FOR  ON THE FIRST DAY OF THE NEXT YEAR.  IF THE TOTAL AMOUNT OF
   55  ALLOCATED TAX CREDITS APPLIED FOR UNDER THIS PARAGRAPH AT THE CONCLUSION
   56  OF ANY YEAR IS LESS THAN FIVE MILLION DOLLARS, THE  REMAINDER  SHALL  BE
       S. 2609--D                         15                         A. 3009--D

    1  TREATED AS PART OF THE ANNUAL ALLOCATION FOR TWO THOUSAND SEVENTEEN MADE
    2  AVAILABLE  TO  THE  EMPIRE STATE FILM POST PRODUCTION CREDIT PURSUANT TO
    3  PARAGRAPH FOUR OF SUBDIVISION (E) OF SECTION TWENTY FOUR OF  THIS  ARTI-
    4  CLE.  HOWEVER,  IN NO EVENT MAY THE TOTAL OF THE CREDITS ALLOCATED UNDER
    5  THIS PARAGRAPH AND THE CREDITS ALLOCATED UNDER PARAGRAPH FIVE OF  SUBDI-
    6  VISION  (A)  OF  SECTION TWENTY-FOUR OF THIS ARTICLE EXCEED FIVE MILLION
    7  DOLLARS IN ANY YEAR DURING THE PERIOD TWO THOUSAND FIFTEEN  THROUGH  TWO
    8  THOUSAND NINETEEN.
    9    S  9.  This act shall take effect immediately, provided, however, that
   10  sections four and five of this act shall apply to (a) taxpayers  submit-
   11  ting initial applications to the governor's office of motion picture and
   12  television development on or after the date this act shall have become a
   13  law,  and  (b) to taxpayers who filed an initial application before this
   14  act shall have become a law but who  have  not  yet  submitted  a  final
   15  application  to  the  governor's office of motion picture and television
   16  development on or before the date this act  shall  have  become  a  law,
   17  provided  such  taxpayers agree to have the amendments made to section 3
   18  of part Y-1 of chapter 57 of the laws of  2009,  amending  the  tax  law
   19  relating  to  the empire state film production credit, which added a new
   20  paragraph 6 to subdivision (a) of such section 3 apply to them; and  the
   21  amendments  made  to  section 3 of part Y-1 of chapter 57 of the laws of
   22  2009, amending the tax law relating to the empire state film  production
   23  credit,  with the exception of subdivision b of such section, shall only
   24  apply to taxpayers submitting initial  applications  to  the  governor's
   25  office of motion picture and television development on or after the date
   26  this act shall become a law.

   27                                   PART C

   28    Section  1.  Section 1 of chapter 174 of the laws of 1968 constituting
   29  the urban development corporation act is amended by adding a new section
   30  16-v to read as follows:
   31    S 16-V. NEW YORK STATE BUSINESS  INCUBATOR  AND  INNOVATION  HOT  SPOT
   32  SUPPORT  ACT.  1.  (A)  THE  CORPORATION IS AUTHORIZED, WITHIN AVAILABLE
   33  APPROPRIATIONS, TO ISSUE REQUESTS FOR PROPOSALS ONCE PER FISCAL YEAR  TO
   34  PROVIDE GRANTS PURSUANT TO SUBDIVISIONS FIVE AND SIX OF THIS SECTION FOR
   35  THE  PURPOSES  ESTABLISHED UNDER THIS ACT. THE CORPORATION MAY DESIGNATE
   36  ENTITIES, WHICH UPON APPLICATION MEET THE  REQUIREMENTS  OF  SUBDIVISION
   37  TWO OF THIS SECTION AS NEW YORK STATE INCUBATORS, AND MAY PROVIDE GRANTS
   38  AND  ASSISTANCE  AS  PROVIDED  UNDER  SUBDIVISIONS  FIVE AND SIX OF THIS
   39  SECTION TO SUCH DESIGNATED ENTITIES. "NEW YORK  STATE  INCUBATOR"  SHALL
   40  MEAN A BUSINESS INCUBATION PROGRAM WHICH ALSO PROVIDES PHYSICAL SPACE OR
   41  WHICH  IS  A  VIRTUAL  INCUBATION  PROGRAM THAT HAS BEEN DESIGNATED UPON
   42  APPLICATION BY THE CORPORATION AS A NEW YORK STATE INCUBATOR PURSUANT TO
   43  SUBDIVISIONS TWO AND THREE OF THIS SECTION  AND  WHICH  THEREBY  BECOMES
   44  ELIGIBLE  FOR BENEFITS, SUPPORT, SERVICES, AND PROGRAMS AVAILABLE PURSU-
   45  ANT TO SUCH DESIGNATION. PROVIDED HOWEVER, THAT VIRTUAL INCUBATORS WHICH
   46  PROVIDE ASSISTANCE TO ELIGIBLE BUSINESSES NOT IN RESIDENCE IN ONE  PHYS-
   47  ICAL  LOCATION,  SHALL  SUBMIT  A PLAN OF OPERATION WHICH SETS FORTH THE
   48  MAXIMUM NUMBER OF ELIGIBLE BUSINESSES TO BE SERVED AND THEIR  GEOGRAPHIC
   49  DISTRIBUTION.
   50    (B)  FROM  AMONG THE QUALIFIED "NEW YORK STATE INCUBATORS", THE CORPO-
   51  RATION IS FURTHER AUTHORIZED, WITHIN AVAILABLE APPROPRIATIONS, TO DESIG-
   52  NATE APPLICANTS AS "NEW YORK STATE INNOVATION HOT SPOTS."  AN  INCUBATOR
   53  RECEIVING  A  "NEW  YORK STATE INNOVATION HOT SPOT" DESIGNATION SHALL BE
   54  ELIGIBLE FOR THE BENEFITS UNDER SECTION THIRTY-EIGHT  OF  THE  TAX  LAW,
       S. 2609--D                         16                         A. 3009--D

    1  SUBPARAGRAPH  EIGHTEEN  OF  PARAGRAPH (A) OF SUBDIVISION NINE OF SECTION
    2  TWO HUNDRED EIGHT OF THE TAX LAW,  SUBDIVISION  ELEVEN  OF  SECTION  TWO
    3  HUNDRED  NINE OF THE TAX LAW, PARAGRAPH THIRTY-NINE OF SUBSECTION (C) OF
    4  SECTION  SIX HUNDRED TWELVE OF THE TAX LAW, PARAGRAPH ONE OF SUBDIVISION
    5  (D) OF SECTION ONE THOUSAND ONE HUNDRED NINETEEN OF  THE  TAX  LAW,  AND
    6  PARAGRAPH  THIRTY-FIVE  OF  SUBDIVISION  (C)  OF  SECTION 11-1712 OF THE
    7  ADMINISTRATIVE CODE OF THE CITY OF NEW YORK.
    8    2. REQUIREMENTS FOR DESIGNATION. (A) AN ENTITY WISHING  TO  BE  DESIG-
    9  NATED  AS  A  NEW  YORK STATE INNOVATION HOT SPOT OR AS A NEW YORK STATE
   10  INCUBATOR PURSUANT TO THIS SECTION SHALL BE LOCATED IN  NEW  YORK  STATE
   11  AND  SHALL HAVE BEEN IN EXISTENCE OR OTHERWISE IN OPERATION FOR A PERIOD
   12  OF AT LEAST THREE FISCAL YEARS PRIOR TO  THE  CURRENT  FISCAL  YEAR,  OR
   13  DEMONSTRATE CONTINUITY OF STAFFING, PROGRAM, AND PURPOSE SHOWING CONTIN-
   14  UATION  THROUGH  ANOTHER  AUSPICE  OR  GOVERNING  ENTITY, AND SHALL HAVE
   15  DEMONSTRATED A CONNECTION TO REGIONAL SOURCES OF INNOVATION  AND  EXPER-
   16  TISE,  AND THAT IT MEETS THE GOALS OF CREATING JOBS AND INCUBATING BUSI-
   17  NESSES WITH SURVIVAL RATES IN EXCESS OF AVERAGE STARTUPS, AND  THAT  THE
   18  PROGRAM  HAS  A  STRATEGIC  PLAN  TO CONTINUE TO MEET SUCH GOALS FOR THE
   19  THREE YEARS SUCCEEDING DESIGNATION  AND  THAT  COMMITS  THE  PROGRAM  TO
   20  IMPLEMENTING  BEST PRACTICES. SUCH DEMONSTRATION SHALL INCLUDE A COMMIT-
   21  MENT BY THE SPONSOR TO CONTINUE TO MAINTAIN THE  PROGRAM  FOR  AT  LEAST
   22  THREE  YEARS AFTER SUCH DESIGNATION, AND TO PROVIDE ANY REPORTING INFOR-
   23  MATION THAT THE CORPORATION SHALL REQUIRE.
   24    (B) IN DETERMINING WHETHER AN ENTITY SHALL BE DESIGNATED AS A NEW YORK
   25  STATE INNOVATION HOT SPOT OR NEW YORK STATE INCUBATOR,  THE  CORPORATION
   26  SHALL REQUIRE THAT THE ENTITY MEET THE REQUIREMENTS OF SUBPARAGRAPHS (I)
   27  AND  (II)  OF  THIS  PARAGRAPH  AND  MAY CONSIDER WHETHER THE ENTITY HAS
   28  DEVELOPED THE PROGRAMS, SERVICES, AND ATTRIBUTES IN SUBPARAGRAPHS  (III)
   29  THROUGH (XVI) OF THIS PARAGRAPH:
   30    (I)  INSTITUTIONAL  STABILITY  AND  LONG TERM VIABILITY, INDICATED BY:
   31  THE SPONSOR'S COMMITMENT TO FINANCIALLY AND PROGRAMMATICALLY MAINTAINING
   32  THE INCUBATOR FOR AT LEAST TWO YEARS IN ADDITION TO THE  CURRENT  FISCAL
   33  YEAR; RECEIPT OF NON-STATE PUBLIC AND PRIVATE GRANT AND/OR OTHER REVENUE
   34  SOURCES  INCLUDING  PROPERTY  RENTALS  AND PROGRAM FEES THAT ARE OR HAVE
   35  PROVEN TO BE PREDICTABLE AND RELIABLE; AND MANAGEABLE DEBT SERVICE;
   36    (II) A STRATEGIC PLAN THAT DESCRIBES THE IMPACT ON THE REGIONAL ENTRE-
   37  PRENEURIAL ENVIRONMENT THAT  THE  INCUBATOR  IS  INTENDED  TO  HAVE  AND
   38  COMMITS  THE  INCUBATOR  TO  BEST  INCUBATION  PRACTICES AND DESCRIBES A
   39  DEFINED PROCESS THAT ACCELERATES COMMERCIALIZATION AND DEVELOPMENT FOR A
   40  CLIENT COMPANY OR ENTITY  THROUGH  PROVISION  OF  TECHNICAL  ASSISTANCE,
   41  DIRECT  MENTORSHIP,  ENTREPRENEURIAL EDUCATION, AND BUSINESS DEVELOPMENT
   42  SERVICES, INCLUDING DEVELOPMENT OF A BUSINESS PLAN AND MARKETS,  AID  IN
   43  DEVELOPMENT  OF  THE  MANAGEMENT  TEAM, PRODUCT, CUSTOMERS, AND LOCAL OR
   44  REGIONAL SUPPLY CHAIN PARTNERS, ACCESS TO INVESTMENT, AND LAUNCHING OF A
   45  SUCCESSFUL BUSINESS WHICH WILL EMPLOY NEW YORKERS;
   46    (III) AN INTEGRATED ARRAY OF SERVICES WHICH INCLUDES MANAGEMENT  GUID-
   47  ANCE,  TECHNICAL ASSISTANCE, CONSULTING, MENTORING, BUSINESS PLAN DEVEL-
   48  OPMENT, AID IN CREATION OF THE BUSINESS ENTITY, AND ONGOING COUNSELING;
   49    (IV) OPPORTUNITIES FOR CLIENTS  TO  NETWORK,  COLLABORATE  WITH  OTHER
   50  BUSINESS  PROGRAMS,  AND GAIN ACCESS TO SERVICES, INCLUDING THROUGH SUCH
   51  PROGRAMS AS THE SMALL BUSINESS DEVELOPMENT CENTER,  THE  LOCAL  OR  AREA
   52  CHAMBER OF COMMERCE OR OTHER BUSINESS ASSOCIATION, PROGRAMS OF THE SMALL
   53  BUSINESS  ADMINISTRATION,  AND/OR  OTHER SIMILAR BUSINESS ORGANIZATIONS,
   54  ASSOCIATIONS, AND PROGRAMS;
   55    (V) ACCESS TO CAPITAL VIA REFERRAL OR OTHER ARRANGEMENTS  WITH  FINAN-
   56  CIAL  INSTITUTIONS,  VENTURE  CAPITALISTS,  ANGEL  INVESTORS, INVESTMENT
       S. 2609--D                         17                         A. 3009--D

    1  FUNDS MANAGED OR FINANCED BY PRIVATE ENTITIES OR STATE OR LOCAL ECONOMIC
    2  DEVELOPMENT ORGANIZATIONS, OR OTHER SIMILAR OR EQUIVALENT CAPITAL SOURC-
    3  ES, EVIDENCED  BY  WRITTEN  AGREEMENTS,  MEMORANDUMS  OF  UNDERSTANDING,
    4  LETTERS  OF INTENT, OR OTHER ENDORSEMENTS ACCEPTABLE TO THE CORPORATION,
    5  AND INCLUDING READYING CLIENTS FOR FINANCIAL MEETINGS AND INTERVIEWS;
    6    (VI) AID IN ACCESSING MARKETS, VIA BID ASSISTANCE OR  ACCESS  PROGRAMS
    7  THAT MAY INCLUDE BUT ARE NOT LIMITED TO LITERATURE REVIEW, ESTABLISHMENT
    8  OF  A RESOURCE DOCUMENTS ROOM (PHYSICAL OR VIRTUAL), OPPORTUNITY NOTIFI-
    9  CATION OF LOCAL, STATE, AND FEDERAL GOVERNMENTAL  AND  PRIVATE  OPPORTU-
   10  NITIES,  AND  IDENTIFICATION  OF  AND  INTRODUCTIONS  TO POTENTIAL FIRST
   11  CUSTOMERS;
   12    (VII) PHYSICAL OFFICE SPACE AND/OR LABORATORY SPACE AND/OR MANUFACTUR-
   13  ING SPACE UNDER A WRITTEN AGREEMENT FOR A  PERIOD  NOT  TO  EXCEED  FIVE
   14  YEARS FOR ANY INDIVIDUAL INCUBATOR CLIENT;
   15    (VIII)  POLICIES  REQUIRING  PARTICIPATION BY CLIENTS IN THE INCUBATOR
   16  PROGRAM, INCLUDING DISQUALIFICATION OR SUSPENSION FROM THE  PROGRAM  FOR
   17  FAILURE TO PARTICIPATE;
   18    (IX)  CRITERIA FOR ACCEPTANCE AND GRADUATION FROM THE PROGRAM OR PHYS-
   19  ICAL SPACE, AND TERMS AND CONDITIONS FOR ONGOING RELATIONSHIPS, IF  ANY,
   20  BETWEEN THE INCUBATOR AND THE CLIENT;
   21    (X) AT LEAST FIFTY PERCENT OF THE TOTAL INCUBATOR BUDGET PROVIDED FROM
   22  SOURCES  OTHER  THAN  TENANT RENTS AND FEES AND IN-KIND SUPPORT FROM THE
   23  SPONSORING ENTITY, AND MUST BE FROM SOURCES OTHER THAN  NEW  YORK  STATE
   24  GOVERNMENT AGENCIES;
   25    (XI) AN INDEPENDENT ADVISORY COUNCIL OR SIMILAR BODY THAT INCLUDES ONE
   26  OR MORE EXECUTIVE OFFICERS OF FIRMS THAT HAVE GRADUATED FROM THE INCUBA-
   27  TOR,  LOCAL  ECONOMIC  DEVELOPMENT  PROFESSIONALS,  AND INDIVIDUALS WITH
   28  BUSINESS AND TECHNOLOGY EXPERTISE IN AREAS APPROPRIATE TO THE SECTOR  OR
   29  CONCENTRATION OF CLIENTS, AND THE MISSION AND GOAL OF THE INCUBATOR;
   30    (XII) A PROFESSIONAL MANAGEMENT AND SERVICE DELIVERY TEAM WITH EXPERI-
   31  ENCE,  EXPERTISE,  OR CREDENTIALS IN MANAGEMENT, ENTREPRENEURSHIP, BUSI-
   32  NESS DEVELOPMENT, OR OTHER EQUIVALENT AREAS;
   33    (XIII) ACCESS  BY  CLIENTS  TO  MENTORING,  ADVISORY,  OR  EDUCATIONAL
   34  SERVICES,  INCLUDING  CLASSROOM  TEACHING,  FROM  INDIVIDUALS  WHO  HAVE
   35  SUCCESSFULLY CREATED,  GROWN  OR  MANAGED  BUSINESSES  OR  ARE  LAWYERS,
   36  PROFESSIONAL ACCOUNTANTS, OR INDIVIDUALS WHO HAVE BEEN IN BUSINESS AT AN
   37  EXECUTIVE LEVEL FOR AT LEAST FIVE YEARS;
   38    (XIV)  EVIDENCE  THAT  THE  INCUBATOR  IS  A CENTER OF ENTREPRENEURIAL
   39  ACTIVITIES OF A CITY, REGION, OR DISTRESSED PORTION  THEREOF,  AS  DOCU-
   40  MENTED  BY  PROGRAMS  AND  ACTIVITIES  COORDINATED  WITH COUNTY OR LOCAL
   41  ECONOMIC DEVELOPMENT ORGANIZATIONS,  INVESTOR  AND  FINANCIAL  CLUBS  OR
   42  INSTITUTIONS, OR STUDENT OR YOUTH-ORIENTED ENTREPRENEURIAL ACTIVITIES;
   43    (XV)  A  PARTNERSHIP  WITH  OTHER  INCUBATORS  IN  THE REGION TO OFFER
   44  SERVICES AND  OPPORTUNITIES  FOR  ENTREPRENEURS  AND  LEVERAGE  REGIONAL
   45  ECONOMIC DEVELOPMENT ASSETS; AND
   46    (XVI)  A  PLAN  TO  RECRUIT  MINORITY-  AND WOMEN-OWNED BUSINESSES FOR
   47  LOCATION AND PARTICIPATION WITH THE INCUBATOR PROGRAM.
   48    (C) THE CORPORATION,  SUBJECT  TO  APPROPRIATIONS  PROVIDED  FOR  THIS
   49  PURPOSE,  MAY  APPROVE  AND  DESIGNATE FIVE NEW YORK STATE INCUBATOR HOT
   50  SPOTS IN FISCAL YEAR TWO THOUSAND  THIRTEEN-TWO  THOUSAND  FOURTEEN  AND
   51  FIVE  ADDITIONAL  NEW YORK STATE INNOVATION HOT SPOTS IN FISCAL YEAR TWO
   52  THOUSAND FOURTEEN-TWO THOUSAND FIFTEEN. SUCH DESIGNEES WILL BE  REQUIRED
   53  TO  DEMONSTRATE  AN  AFFILIATION  WITH AND THE APPLICATION SUPPORT OF AT
   54  LEAST ONE COLLEGE, UNIVERSITY OR INDEPENDENT RESEARCH  INSTITUTION,  AND
   55  THAT  ITS  PROGRAMS  AND  PURPOSES ARE CONSISTENT WITH REGIONAL ECONOMIC
   56  DEVELOPMENT STRATEGIES.
       S. 2609--D                         18                         A. 3009--D

    1    3. DESIGNATION. (A) THE CORPORATION MAY DESIGNATE APPLICANTS THAT MEET
    2  THE REQUIREMENTS OF SUBDIVISION TWO OF THIS SECTION AS  NEW  YORK  STATE
    3  INNOVATION HOT SPOTS OR AS NEW YORK STATE INCUBATORS.
    4    (B)  AS  A  CONDITION OF MAINTAINING DESIGNATION, EACH INCUBATOR SHALL
    5  ANNUALLY SUBMIT TO THE CORPORATION IN A MANNER AND ACCORDING TO A SCHED-
    6  ULE ESTABLISHED BY THE CORPORATION:
    7    (I) UPDATED INFORMATION  REQUESTED  BY  THE  CORPORATION  PURSUANT  TO
    8  SUBPARAGRAPH (III) OF PARAGRAPH (A) OF SUBDIVISION TWO OF THIS SECTION;
    9    (II)  ITS STRATEGIC PLAN, AS UPDATED ALONG WITH A BRIEF DESCRIPTION OF
   10  ITS SUCCESS IN MEETING THE GOALS OF ITS STRATEGIC PLAN;
   11    (III) A STATEMENT THAT THE ITEMS LISTED IN PARAGRAPH (B)  OF  SUBDIVI-
   12  SION  TWO  OF THIS SECTION AND, IN THE CASE OF NEW YORK STATE INNOVATION
   13  HOT SPOTS, PARAGRAPH (C) OF SUBDIVISION TWO OF THIS  SECTION  ARE  STILL
   14  APPLICABLE TO THE OPERATIONS OF THE INCUBATOR, OR ANY CHANGE IN APPLICA-
   15  BILITY;
   16    (IV)  A  LIST  OF BUSINESS ENTERPRISES SERVED BY THE INCUBATOR, AND IN
   17  THE CASE OF NEW YORK STATE INNOVATION HOT SPOTS, THOSE CLIENTS CERTIFIED
   18  AS A "QUALIFIED ENTITY" ELIGIBLE FOR TAX INCENTIVES UNDER SECTION  THIR-
   19  TY-EIGHT OF THE TAX LAW; AND
   20    (V) SUCH ADDITIONAL INFORMATION AS THE CORPORATION MAY REQUIRE.
   21    (C)  THE  CORPORATION  SHALL  DESIGN  SIMPLIFIED  FORMS  TO AID IN THE
   22  SUBMISSION OF THE DATA  REQUIRED  IN  THIS  SUBDIVISION,  WHICH  MAY  BE
   23  SUBMITTED  ELECTRONICALLY.  SUCH  FORMS  SHALL STATE THE PURPOSES OF THE
   24  REQUIRED DATA SUBMISSIONS.
   25    (D) THE CORPORATION SHALL EVALUATE THE  OPERATIONS  OF  THE  NEW  YORK
   26  STATE  INNOVATION HOT SPOT OR THE NEW YORK STATE INCUBATOR USING METHODS
   27  INCLUDING BUT NOT LIMITED TO SITE VISITS, REPORTS PURSUANT TO  SPECIFIED
   28  INFORMATION,  AND  REVIEW EVALUATIONS. IF THE CORPORATION IS UNSATISFIED
   29  WITH THE PROGRESS OF A NEW YORK STATE INNOVATION HOT SPOT OR A NEW  YORK
   30  STATE  INCUBATOR,  THE  CORPORATION  SHALL  NOTIFY SUCH INCUBATOR OF THE
   31  RESULTS OF ITS EVALUATIONS AND  THE  FINDINGS  OF  DEFICIENCIES  IN  THE
   32  INCUBATOR'S  OPERATIONS  AND  SHALL  ALLOW SUCH INCUBATOR TO REMEDY SUCH
   33  FINDINGS IN A TIMELY MANNER. FOR NEW YORK STATE INNOVATION HOT SPOTS  OR
   34  NEW  YORK  STATE  INCUBATORS  THAT  RECEIVE OPERATING GRANTS PURSUANT TO
   35  PARAGRAPH (A) OF SUBDIVISION FIVE  OF  THIS  SECTION,  SUCH  EVALUATIONS
   36  SHALL  INCLUDE INDEPENDENT PEER REVIEW AND SHALL TAKE PLACE NO LESS THAN
   37  ONCE EVERY THREE YEARS OR MORE  FREQUENTLY  AT  THE  DISCRETION  OF  THE
   38  CORPORATION.  SUCH  INDEPENDENT  PEER  REVIEW  SHALL RESULT IN A WRITTEN
   39  REPORT THAT INCLUDES PROGRAMMATIC AND FISCAL  EVALUATION  OF  THE  INCU-
   40  BATION PROGRAM AND RECOMMENDATIONS FOR IMPROVEMENT.
   41    4.  AUDIT.  THE CORPORATION SHALL HAVE THE AUTHORITY TO AUDIT NEW YORK
   42  INNOVATION HOT SPOTS, NEW YORK STATE INCUBATORS AND  CLIENTS  DESIGNATED
   43  BY SUCH HOT SPOTS AS QUALIFIED ENTITIES.
   44    5.  GRANTS.  (A)  OPERATING GRANTS. A PROGRAM DESIGNATED AS A NEW YORK
   45  STATE INNOVATION HOT SPOT OR AS A NEW  YORK  STATE  INCUBATOR  SHALL  BE
   46  ELIGIBLE  FOR  AN  OPERATING  GRANT IN AN AMOUNT TO BE DETERMINED BY THE
   47  CORPORATION FROM FUNDS APPROPRIATED TO THE CORPORATION FOR SUCH PURPOSE,
   48  PROVIDED HOWEVER THAT:
   49    (I) ANY SUCH GRANT SHALL BE MATCHED  ON  A  TWO-TO-ONE  BASIS  BY  THE
   50  INSTITUTION  RECEIVING  THE FUNDS AND COLLABORATIVE PARTNERS IN THE FORM
   51  OF CASH OR IN-KIND PERSONNEL, EQUIPMENT, MATERIAL DONATIONS,  AND  OTHER
   52  FACILITY  AND  OPERATIONS EXPENDITURES, PROVIDED THAT NO MORE THAN FIFTY
   53  PERCENT OF SUCH MATCH SHALL BE IN-KIND;
   54    (II) A PROGRAM  APPLYING  FOR  A  GRANT  SHALL  DEMONSTRATE  FINANCIAL
   55  STABILITY  AND  LONG  TERM VIABILITY, AS PROVIDED IN SUBPARAGRAPH (I) OF
   56  PARAGRAPH (B) OF SUBDIVISION TWO OF THIS SECTION;
       S. 2609--D                         19                         A. 3009--D

    1    (III) A GRANT RECIPIENT SHALL AGREE TO PROVIDE DATA AS REQUIRED TO THE
    2  CORPORATION AND SHALL AGREE TO CONFORM TO BEST PRACTICES AS OUTLINED  BY
    3  STATE AND/OR NATIONAL BUSINESS INCUBATOR ASSOCIATIONS;
    4    (IV)  FAILURE  TO  ABIDE BY THE REQUIREMENTS OF THIS SUBDIVISION OR TO
    5  CURE A DEFAULT AFTER REVIEW AND AGREEMENT  WITH  THE  CORPORATION  SHALL
    6  RESULT  IN  LOSS  OF THE GRANT AND DISQUALIFICATION OF THE DESIGNEE AS A
    7  NEW YORK STATE INNOVATION HOT SPOT OR AS A NEW YORK STATE INCUBATOR; AND
    8    (V) PROVIDED THAT A PORTION OF THE GRANTS SHALL BE AWARDED TO THE  NEW
    9  YORK STATE INNOVATION HOT SPOTS AND THE NEW YORK STATE INCUBATORS.
   10    (B)  THE  CORPORATION SHALL MAKE ENTITIES DESIGNATED AS NEW YORK STATE
   11  INNOVATION HOT SPOTS OR AS NEW YORK STATE INCUBATORS AWARE  OF  OPPORTU-
   12  NITIES  FOR  FUNDING  OR  GRANTS  BY  OR  THROUGH THE CORPORATION OR THE
   13  DEPARTMENT OF ECONOMIC DEVELOPMENT.
   14    (C) NO DEDUCTION. IN ADDITION TO THE FOREGOING REQUIREMENTS, AN  INCU-
   15  BATOR  SPONSOR  SHALL  AGREE  TO  DEDICATE  ALL FUNDS FROM ANY GRANTS OR
   16  SUPPORT RECEIVED PURSUANT TO THIS SUBDIVISION TO THE OPERATIONS  OF  THE
   17  INCUBATOR WITHOUT DEDUCTIONS FOR OVERHEAD, INDIRECT COSTS, OR FACILITIES
   18  AND ADMINISTRATION CHARGES OF SUCH SPONSOR.
   19    6.  OTHER  ASSISTANCE.  THE  CORPORATION  SHALL  MAKE  SUCH OTHER AID,
   20  ASSISTANCE, AND RESOURCES AVAILABLE TO NEW  YORK  STATE  INNOVATION  HOT
   21  SPOTS  AND  NEW YORK STATE INCUBATORS AND THEIR CLIENTS AS IT SHALL DEEM
   22  USEFUL AND APPROPRIATE FOR THE FURTHERANCE OF THE PURPOSES OF THIS  ACT,
   23  INCLUDING WITHOUT LIMITATION TECHNICAL ASSISTANCE, AID IN MARKETING, AID
   24  IN  REACHING  AND  PROVIDING  ENTREPRENEURSHIP TRAINING OPPORTUNITIES TO
   25  SUCH MARGINALIZED GROUPS AS THOSE COMPOSED OF INDIVIDUALS WHO ARE MINOR-
   26  ITY, FEMALE, DISABLED, OR POOR, AND OTHERS, CURRICULUM DEVELOPMENT,  AND
   27  OTHER SERVICES AND RESOURCES. THE CORPORATION SHALL ALSO SEEK ASSISTANCE
   28  FROM  OTHER STATE AGENCIES IN THE DEVELOPMENT OF PROCUREMENT AND MARKET-
   29  ING RESOURCES AND TRAINING OPPORTUNITIES FOR NEW YORK  STATE  INNOVATION
   30  HOT SPOTS AND NEW YORK STATE INCUBATORS AND THEIR CLIENTS.
   31    7.  ASSOCIATION  OF  INCUBATORS.    THE CORPORATION MAY CONSULT WITH A
   32  STATEWIDE ENTITY WHICH IS A MEMBERSHIP  ASSOCIATION  OF  INCUBATORS  AND
   33  OTHERS  AND  WHICH HAS EXPERTISE IN PROVIDING SERVICES TO INCUBATORS FOR
   34  THE PURPOSE OF PROVIDING SERVICES TO ENTITIES  DESIGNATED  AS  NEW  YORK
   35  STATE INNOVATION HOT SPOTS AND NEW YORK STATE INCUBATORS AND TO ENTITIES
   36  SEEKING  TO  APPLY  OR  APPLYING TO BECOME NEW YORK STATE INNOVATION HOT
   37  SPOTS AND NEW YORK STATE INCUBATORS OR WHICH OTHERWISE ARE  INCLUDED  AS
   38  RECIPIENTS  OF  SERVICES  PURSUANT  TO THIS SECTION. SUCH SERVICES SHALL
   39  INCLUDE ADVISING CONCERNING BEST PRACTICES OF INCUBATION AND DEVELOPMENT
   40  OF PLANS TO INCORPORATE AND INTEGRATE  SUCH  PRACTICES,  DEVELOPMENT  OF
   41  DATA  CONCERNING  INCUBATION  IN  THIS  STATE  AND  RECOMMENDATIONS  FOR
   42  IMPROVEMENT, AID IN MARKETING AND  EVENT  SPONSORSHIP,  AND  SUCH  OTHER
   43  SERVICES  AS THE CORPORATION SHALL DEEM NECESSARY AND APPROPRIATE TO THE
   44  STRENGTHENING OF BUSINESS INCUBATION IN THIS STATE.
   45    8. NEW YORK STATE INNOVATION HOT SPOTS MAY CERTIFY CLIENTS WHICH  MEET
   46  THE  REQUIREMENTS OF SUBDIVISION NINE OF THIS SECTION AS QUALIFIED ENTI-
   47  TIES ELIGIBLE FOR NEW YORK STATE INNOVATION HOT SPOT PROGRAM  TAX  BENE-
   48  FITS  PURSUANT  TO SECTION THIRTY-EIGHT OF THE TAX LAW. UNDER NO CIRCUM-
   49  STANCE MAY BUSINESS ENTERPRISES OF INCUBATORS  DESIGNATED  AS  NEW  YORK
   50  STATE  INCUBATORS UNDER PARAGRAPH (B) OF SUBDIVISION ONE OF THIS SECTION
   51  BE ELIGIBLE FOR TAX BENEFITS UNDER SECTION THIRTY-EIGHT OF THE TAX LAW.
   52    9. "QUALIFIED ENTITY" SHALL MEAN A BUSINESS ENTERPRISE THAT IS:
   53    (I) IN THE FORMATIVE STAGE OF DEVELOPMENT;
   54    (II) LOCATED IN NEW YORK STATE;
   55    (III) EITHER: (A) ANY CORPORATION, EXCEPT A CORPORATION WHICH:
       S. 2609--D                         20                         A. 3009--D

    1    (1) OVER FIFTY PERCENT OF THE NUMBER OF SHARES OF STOCK ENTITLING  THE
    2  HOLDERS  THEREOF  TO  VOTE  FOR THE ELECTION OF DIRECTORS OR TRUSTEES IS
    3  OWNED OR CONTROLLED,  EITHER  DIRECTLY  OR  INDIRECTLY,  BY  A  TAXPAYER
    4  SUBJECT  TO  TAX  UNDER THE FOLLOWING PROVISIONS OF THE TAX LAW: ARTICLE
    5  NINE-A; SECTION ONE HUNDRED EIGHTY-THREE, ONE HUNDRED EIGHTY-FOUR OR ONE
    6  HUNDRED EIGHTY-FIVE OF ARTICLE NINE; ARTICLE THIRTY-TWO OR ARTICLE THIR-
    7  TY-THREE; OR
    8    (2)  IS SUBSTANTIALLY SIMILAR IN OPERATION AND IN OWNERSHIP TO A BUSI-
    9  NESS ENTITY (OR  ENTITIES)  TAXABLE  OR  PREVIOUSLY  TAXABLE  UNDER  THE
   10  FOLLOWING  PROVISIONS  OF  THE  TAX  LAW:    ARTICLE NINE-A; SECTION ONE
   11  HUNDRED EIGHTY-THREE, ONE HUNDRED EIGHTY-FOUR, ONE  HUNDRED  EIGHTY-FIVE
   12  OR  FORMER SECTION ONE HUNDRED EIGHTY-SIX OF ARTICLE NINE; ARTICLE THIR-
   13  TY-TWO; ARTICLE THIRTY-THREE; ARTICLE TWENTY-THREE, OR WOULD  HAVE  BEEN
   14  SUBJECT  TO  TAX UNDER SUCH ARTICLE TWENTY-THREE (AS SUCH ARTICLE WAS IN
   15  EFFECT ON JANUARY FIRST, NINETEEN HUNDRED  EIGHTY)  OR  THE  INCOME  (OR
   16  LOSSES) OF WHICH IS (OR WAS) INCLUDABLE UNDER ARTICLE TWENTY-TWO; OR
   17    (B)  A  SOLE PROPRIETORSHIP, PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED
   18  LIABILITY COMPANY, OR NEW YORK SUBCHAPTER  S  CORPORATION  THAT  IS  NOT
   19  SUBSTANTIALLY SIMILAR IN OPERATION AND IN OWNERSHIP TO A BUSINESS ENTITY
   20  (OR  ENTITIES)  TAXABLE,  OR PREVIOUSLY TAXABLE, UNDER ARTICLE NINE-A OF
   21  THE TAX LAW, SECTION ONE HUNDRED EIGHTY-THREE, ONE HUNDRED  EIGHTY-FOUR,
   22  ONE  HUNDRED  EIGHTY-FIVE  OR  FORMER  SECTION ONE HUNDRED EIGHTY-SIX OF
   23  ARTICLE NINE OF THE TAX LAW, ARTICLE THIRTY-TWO OR THIRTY-THREE  OF  THE
   24  TAX  LAW,  ARTICLE  TWENTY-THREE OF THE TAX LAW OR WHICH WOULD HAVE BEEN
   25  SUBJECT TO TAX UNDER SUCH ARTICLE TWENTY-THREE (AS SUCH ARTICLE  WAS  IN
   26  EFFECT  ON  JANUARY  FIRST,  NINETEEN  HUNDRED EIGHTY) OR THE INCOME (OR
   27  LOSSES) OF WHICH IS (OR WAS) INCLUDABLE UNDER ARTICLE TWENTY-TWO OF  THE
   28  TAX LAW; AND
   29    (IV)  IS  CERTIFIED  BY  A NEW YORK STATE INNOVATION HOT SPOT AS BEING
   30  APPROVED TO LOCATE IN, OR BE PART OF A VIRTUAL INCUBATION PROGRAM  OPER-
   31  ATED BY, SUCH NEW YORK INNOVATION HOT SPOT.
   32    10.  THE  CORPORATION MAY ESTABLISH GUIDELINES CONCERNING THIS PROGRAM
   33  TO IMPLEMENT THE PURPOSES OF THIS ACT.
   34    S 2. The tax law is amended by adding a new  section  38  to  read  as
   35  follows:
   36    S  38.  NEW YORK INNOVATION HOT SPOT PROGRAM TAX BENEFITS. (A) AS USED
   37  IN THIS CHAPTER, THE TERMS "NEW YORK  STATE  INNOVATION  HOT  SPOT"  AND
   38  "QUALIFIED  ENTITY"  SHALL  HAVE  THE  SAME  MEANING  AS  UNDER  SECTION
   39  SIXTEEN-V OF THE NEW YORK STATE URBAN DEVELOPMENT CORPORATION ACT.
   40    (B) A TAXPAYER UNDER ARTICLE NINE-A OF THIS CHAPTER THAT IS  A  QUALI-
   41  FIED  ENTITY  OF  A  NEW YORK STATE INNOVATION HOT SPOT SHALL BE SUBJECT
   42  ONLY TO THE FIXED DOLLAR MINIMUM TAX, IMPOSED  UNDER  PARAGRAPH  (D)  OF
   43  SUBDIVISION  ONE  OF  SECTION  TWO HUNDRED TEN OF THIS CHAPTER, FOR FIVE
   44  TAXABLE YEARS, BEGINNING WITH THE FIRST TAXABLE YEAR  DURING  WHICH  THE
   45  QUALIFIED  ENTITY BECOMES A TENANT IN OR PART OF AN INNOVATION HOT SPOT.
   46  A TAXPAYER UNDER ARTICLE NINE-A OF THIS  CHAPTER  THAT  IS  A  CORPORATE
   47  PARTNER  IN A QUALIFIED ENTITY, OR IS A QUALIFIED ENTITY THAT IS LOCATED
   48  BOTH WITHIN AND WITHOUT AN INNOVATION HOT SPOT, SHALL BE ALLOWED ONLY  A
   49  DEDUCTION FOR THE AMOUNT OF INCOME OR GAIN INCLUDED IN ITS FEDERAL TAXA-
   50  BLE  INCOME TO THE EXTENT THAT THE INCOME OR GAIN IS ATTRIBUTABLE TO THE
   51  OPERATIONS AT OR AS PART OF THE INNOVATION HOT SPOT.  THE  DEDUCTION  IS
   52  ALLOWED  FOR  FIVE  TAXABLE YEARS, BEGINNING WITH THE FIRST TAXABLE YEAR
   53  DURING WHICH THE QUALIFIED ENTITY BECOMES A TENANT  IN  OR  PART  OF  AN
   54  INNOVATION HOT SPOT.
   55    (C)  AN INDIVIDUAL WHO IS THE SOLE PROPRIETOR OF A QUALIFIED ENTITY OR
   56  A MEMBER OF A LIMITED LIABILITY COMPANY, A PARTNER IN A PARTNERSHIP OR A
       S. 2609--D                         21                         A. 3009--D

    1  SHAREHOLDER IN A NEW YORK SUBCHAPTER S  CORPORATION  WHERE  THE  LIMITED
    2  LIABILITY  COMPANY, PARTNERSHIP, OR S CORPORATION IS A QUALIFIED ENTITY,
    3  THAT IS TAXABLE UNDER  ARTICLE  TWENTY-TWO  OF  THIS  CHAPTER  SHALL  BE
    4  ALLOWED  A  DEDUCTION  FOR  THE AMOUNT OF INCOME OR GAIN INCLUDED IN ITS
    5  FEDERAL ADJUSTED GROSS INCOME TO THE EXTENT THAT THE INCOME OR  GAIN  IS
    6  ATTRIBUTABLE  TO THE OPERATIONS OF A QUALIFIED ENTITY AT OR AS A PART OF
    7  A NEW YORK STATE INNOVATION HOT SPOT. THE DEDUCTION IS ALLOWED FOR  FIVE
    8  TAXABLE  YEARS,  BEGINNING  WITH THE FIRST TAXABLE YEAR DURING WHICH THE
    9  QUALIFIED ENTITY BECOMES A TENANT IN OR PART OF AN INNOVATION HOT SPOT.
   10    (D) A QUALIFIED ENTITY THAT IS A TENANT IN OR PART OF A NEW YORK STATE
   11  INNOVATION HOT SPOT SHALL BE ELIGIBLE FOR A CREDIT OR REFUND  FOR  SALES
   12  AND  USE  TAXES IMPOSED ON THE RETAIL SALE OF TANGIBLE PERSONAL PROPERTY
   13  OR SERVICES UNDER SUBDIVISIONS (A),  (B),  AND  (C)  OF  SECTION  ELEVEN
   14  HUNDRED  FIVE AND SECTION ELEVEN HUNDRED TEN OF THIS CHAPTER. THE CREDIT
   15  OR REFUND SHALL BE ALLOWED FOR SIXTY MONTHS  BEGINNING  WITH  THE  FIRST
   16  FULL  MONTH  AFTER THE QUALIFIED ENTITY BECOMES A TENANT IN AN INCUBATOR
   17  HOT SPOT.
   18    (E) A TAXPAYER WHO CLAIMS ANY OF THE TAX BENEFITS  DESCRIBED  IN  THIS
   19  SECTION  IS  NO LONGER ELIGIBLE FOR ANY OTHER NEW YORK STATE EXEMPTIONS,
   20  DEDUCTIONS, OR CREDIT OR REFUNDS UNDER THIS CHAPTER TO THE  EXTENT  THAT
   21  ANY  SUCH  EXEMPTION, DEDUCTION, CREDIT OR REFUND IS ATTRIBUTABLE TO THE
   22  BUSINESS OPERATIONS OF A TENANT IN OR AS PART  OF  THE  NEW  YORK  STATE
   23  INNOVATION HOT SPOT. THE ELECTION TO CLAIM THE TAX BENEFITS DESCRIBED IN
   24  THIS SECTION IS NOT REVOCABLE.
   25    (F) CROSS-REFERENCES. FOR APPLICATION OF THE TAX BENEFITS PROVIDED FOR
   26  IN THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
   27    (I) ARTICLE 9-A, SECTION 208, SUBDIVISION (9), PARAGRAPH (A), SUBPARA-
   28  GRAPH (18).
   29    (II) ARTICLE 9-A, SECTION 209, SUBDIVISION 11.
   30    (III) ARTICLE 22, SECTION 612, SUBSECTION (C), PARAGRAPH (39).
   31    (IV) ARTICLE 28, SECTION 1119, SUBDIVISION (D).
   32    S  3.  Paragraph (a) of subdivision 9 of section 208 of the tax law is
   33  amended by adding a new subparagraph 18 to read as follows:
   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    S 4. Section 209 of the tax law is amended by adding a new subdivision
   42  11 to read as follows:
   43    11. EXCEPT AS PROVIDED IN SUBPARAGRAPH EIGHTEEN OF  PARAGRAPH  (A)  OF
   44  SUBDIVISION  NINE OF SECTION TWO HUNDRED EIGHT OF THIS ARTICLE, A CORPO-
   45  RATION THAT IS A QUALIFIED ENTITY OF A NEW  YORK  STATE  INNOVATION  HOT
   46  SPOT  SHALL  BE SUBJECT ONLY TO THE FIXED DOLLAR MINIMUM TAX UNDER PARA-
   47  GRAPH (D) OF SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE,
   48  AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS CHAPTER.
   49    S 5. Subsection (c) of section 612 of the tax law is amended by adding
   50  a new paragraph 39 to read as follows:
   51    (39) ANY INCOME OR GAIN, TO THE  EXTENT  IT  IS  INCLUDED  IN  FEDERAL
   52  ADJUSTED  GROSS  INCOME OF AN INDIVIDUAL WHO IS THE SOLE PROPRIETOR OF A
   53  QUALIFIED ENTITY OR A MEMBER OF A LIMITED LIABILITY COMPANY,  A  PARTNER
   54  IN A PARTNERSHIP OR A SHAREHOLDER IN A NEW YORK SUBCHAPTER S CORPORATION
   55  THAT  IS  A QUALIFIED ENTITY, ATTRIBUTABLE TO THE OPERATIONS OF A QUALI-
       S. 2609--D                         22                         A. 3009--D

    1  FIED ENTITY AT ITS LOCATION IN OR AS PART OF A NEW YORK STATE INNOVATION
    2  HOT SPOT, AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS CHAPTER.
    3    S 6. Paragraph 1 of subdivision (d) of section 1119 of the tax law, as
    4  added  by  section  31 of part S-1 of chapter 57 of the laws of 2009, is
    5  amended to read as follows:
    6    (1) Subject to the conditions and limitations  provided  for  in  this
    7  section,  a  refund  or  credit will be allowed for taxes imposed on the
    8  retail sale of tangible personal property described in  subdivision  (a)
    9  of  section  eleven  hundred  five of this article, and on every sale of
   10  services described in subdivisions (b) and  (c)  of  such  section,  and
   11  consideration  given  or  contracted to be given for, or for the use of,
   12  such  tangible  personal  property  or  services,  where  such  tangible
   13  personal property or services are sold to a qualified empire zone enter-
   14  prise OR TO A QUALIFIED ENTITY THAT IS ALSO A TENANT IN OR PART OF A NEW
   15  YORK  STATE  INNOVATION  HOT SPOT AS PROVIDED IN SECTION THIRTY-EIGHT OF
   16  THIS CHAPTER, provided that  (A)  such  tangible  personal  property  or
   17  tangible  personal property upon which such a service has been performed
   18  or such service (other than a service described in  subdivision  (b)  of
   19  section  eleven  hundred  five of this article) is directly and predomi-
   20  nantly, or such a service described in clause (A) or  (D)  of  paragraph
   21  one of such subdivision (b) of section eleven hundred five of this arti-
   22  cle  is directly and exclusively, used or consumed by (I) such QUALIFIED
   23  EMPIRE ZONE enterprise in an area designated as an empire zone  pursuant
   24  to article eighteen-B of the general municipal law with respect to which
   25  such  enterprise  is  certified  pursuant to such article eighteen-B, OR
   26  (II) SUCH QUALIFIED ENTITY AT ITS LOCATION IN OR AS PART OF A  NEW  YORK
   27  STATE  INNOVATION HOT SPOT or (B) such a service described in clause (B)
   28  or (C) of paragraph one of subdivision (b)  of  section  eleven  hundred
   29  five  of  this article is delivered and billed to (I) such enterprise at
   30  an address in such empire zone OR (II)  SUCH  QUALIFIED  ENTITY  AT  ITS
   31  LOCATION IN OR AS PART OF THE NEW YORK STATE INNOVATION HOT SPOT, or (C)
   32  the  enterprise's place of primary use of the service described in para-
   33  graph two of such subdivision (b) of section eleven hundred five  is  at
   34  an address in such empire zone OR AT ITS LOCATION IN OR AS PART OF A NEW
   35  YORK  STATE INNOVATION HOT SPOT; provided, further, that, in order for a
   36  motor vehicle, as defined in subdivision (c) of section  eleven  hundred
   37  seventeen of this article, or tangible personal property related to such
   38  a  motor vehicle to be found to be used predominantly in such a zone, at
   39  least fifty percent of such motor vehicle's  use  shall  be  exclusively
   40  within  such  zone or at least fifty percent of such motor vehicle's use
   41  shall be in activities originating or terminating in such zone, or both;
   42  and either or both such usages shall be computed either on the basis  of
   43  mileage  or  hours  of  use,  at  the discretion of such enterprise. For
   44  purposes of this subdivision, tangible personal property related to such
   45  a motor vehicle shall include a battery, diesel motor fuel,  an  engine,
   46  engine  components,  motor  fuel,  a muffler, tires and similar tangible
   47  personal property used in or on such a motor vehicle.
   48    S 7. Subdivision (c) of section 11-1712 of the administrative code  of
   49  the  city of New York is amended by adding a new paragraph 35 to read as
   50  follows:
   51    (35) AS PROVIDED IN SECTION THIRTY-EIGHT OF THE TAX LAW, ANY INCOME OR
   52  GAIN, TO THE EXTENT IT IS INCLUDED IN FEDERAL ADJUSTED GROSS  INCOME  OF
   53  AN  INDIVIDUAL  WHO  IS  THE  SOLE PROPRIETOR OF A QUALIFIED ENTITY OR A
   54  MEMBER OF A LIMITED LIABILITY COMPANY, A PARTNER IN A PARTNERSHIP  OR  A
   55  SHAREHOLDER  IN  A NEW YORK SUBCHAPTER S CORPORATION THAT IS A QUALIFIED
   56  ENTITY AS DEFINED IN SECTION SIXTEEN-V  OF  THE  NEW  YORK  STATE  URBAN
       S. 2609--D                         23                         A. 3009--D

    1  DEVELOPMENT CORPORATION ACT ATTRIBUTABLE TO THE OPERATIONS OF SUCH QUAL-
    2  IFIED  ENTITY  AT  ITS  LOCATION IN OR AS PART OF A NEW YORK STATE INNO-
    3  VATION HOT SPOT, AS DEFINED IN  PARAGRAPH  (A)  OF  SUBDIVISION  ONE  OF
    4  SECTION  SIXTEEN-V  OF  THE NEW YORK STATE URBAN DEVELOPMENT CORPORATION
    5  ACT.
    6    S 8. This act shall take effect immediately.

    7                                   PART D

    8    Section 1. Subsection (g) of section 615 of the tax law, as  added  by
    9  section  3  of  part HH of chapter 57 of the laws of 2010, is amended to
   10  read as follows:
   11    (g)(1) With respect to an individual whose  New  York  adjusted  gross
   12  income is over one million dollars and no more than ten million dollars,
   13  the  New  York  itemized  deduction  shall  be  an amount equal to fifty
   14  percent of any charitable contribution deduction allowed  under  section
   15  one  hundred  seventy  of  the  internal  revenue code for taxable years
   16  beginning after two thousand nine and  before  two  thousand  [thirteen]
   17  SIXTEEN.  With  respect  to  an individual whose New York adjusted gross
   18  income is over one million dollars,  the  New  York  itemized  deduction
   19  shall be an amount equal to fifty percent of any charitable contribution
   20  deduction  allowed  under  section  one  hundred seventy of the internal
   21  revenue code for taxable years beginning in two thousand nine  or  after
   22  two thousand [twelve] FIFTEEN.
   23    (2) With respect to an individual whose New York adjusted gross income
   24  is over ten million dollars, the New York itemized deduction shall be an
   25  amount  equal  to  twenty-five  percent  of  any charitable contribution
   26  deduction allowed under section one  hundred  seventy  of  the  internal
   27  revenue  code  for  taxable  years beginning after two thousand nine and
   28  ending before two thousand [thirteen] SIXTEEN.
   29    S 2. Subdivision (g) of section 11-1715 of the administrative code  of
   30  the  city of New York, as added by section 7 of part HH of chapter 57 of
   31  the laws of 2010, is amended to read as follows:
   32    (g) (1) With respect to an individual whose New  York  adjusted  gross
   33  income is over one million dollars but no more than ten million dollars,
   34  the  New  York  itemized  deduction  shall  be  an amount equal to fifty
   35  percent of any charitable contribution deduction allowed  under  section
   36  one  hundred  seventy  of  the  internal  revenue code for taxable years
   37  beginning after two thousand nine and  before  two  thousand  [thirteen]
   38  SIXTEEN.  With  respect  to  an individual whose New York adjusted gross
   39  income is over one million dollars,  the  New  York  itemized  deduction
   40  shall be an amount equal to fifty percent of any charitable contribution
   41  deduction  allowed  under  section  one  hundred seventy of the internal
   42  revenue code for taxable years beginning in two thousand nine  or  after
   43  two thousand [twelve] FIFTEEN.
   44    (2) With respect to an individual whose New York adjusted gross income
   45  is over ten million dollars, the New York itemized deduction shall be an
   46  amount  equal  to  twenty-five  percent  of  any charitable contribution
   47  deduction allowed under section one  hundred  seventy  of  the  internal
   48  revenue  code  for  taxable  years beginning after two thousand nine AND
   49  ENDING BEFORE TWO THOUSAND SIXTEEN.
   50    S 3. This act shall take effect immediately.

   51                                   PART E
       S. 2609--D                         24                         A. 3009--D

    1    Section 1. Subparagraph 17  of  paragraph  (a)  of  subdivision  9  of
    2  section 208 of the tax law is REPEALED.
    3    S  2. Paragraph (o) of subdivision 9 of section 208 of the tax law, as
    4  amended by section 1 of part M of chapter  686  of  the  laws  of  2003,
    5  clause  (A) of subparagraph 2 as amended by section 4 of part J of chap-
    6  ter 60 of the laws of 2007, is amended to read as follows:
    7    (o) Related members expense add back [and income exclusion]. (1) Defi-
    8  nitions. (A) Related member [or members. For purposes of this paragraph,
    9  the term related member or members means a person, corporation, or other
   10  entity, including an entity that is treated as a  partnership  or  other
   11  pass-through  vehicle  for  purposes  of  federal taxation, whether such
   12  person, corporation or entity is a  taxpayer  or  not,  where  one  such
   13  person,  corporation, or entity, or set of related persons, corporations
   14  or entities, directly or  indirectly  owns  or  controls  a  controlling
   15  interest  in  another  entity.  Such  entity or entities may include all
   16  taxpayers under articles nine, nine-A, thirteen, twenty-two, thirty-two,
   17  thirty-three or thirty-three-A of this chapter]. "RELATED MEMBER"  MEANS
   18  A  RELATED  PERSON  AS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF
   19  SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVEN-
   20  UE CODE, EXCEPT THAT "FIFTY  PERCENT"  SHALL  BE  SUBSTITUTED  FOR  "TEN
   21  PERCENT".
   22    (B)  [Controlling  interest.  A controlling interest shall mean (i) in
   23  the case of a corporation, either thirty percent or more  of  the  total
   24  combined  voting  power  of all classes of stock of such corporation, or
   25  thirty percent or more of the capital, profits or beneficial interest in
   26  such voting stock of such corporation, and (ii) in the case of  a  part-
   27  nership,  association,  trust or other entity, thirty percent or more of
   28  the capital, profits or beneficial interest in such partnership, associ-
   29  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   30  TAX" MEANS, AS TO ANY STATE OR U.S.  POSSESSION, THE  MAXIMUM  STATUTORY
   31  RATE  OF  TAX  IMPOSED  BY  THE  STATE OR POSSESSION ON OR MEASURED BY A
   32  RELATED MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT  PERCENTAGE,
   33  IF  ANY,  APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF SAID JURIS-
   34  DICTION. FOR PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF  TAX  AS
   35  TO  ANY  STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED MEMBER'S NET
   36  INCOME TAX LIABILITY IN SAID JURISDICTION IS REPORTED ON A  COMBINED  OR
   37  CONSOLIDATED  RETURN  INCLUDING BOTH THE TAXPAYER AND THE RELATED MEMBER
   38  WHERE THE REPORTED TRANSACTIONS BETWEEN THE  TAXPAYER  AND  THE  RELATED
   39  MEMBER  ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS DEFINITION,
   40  WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN  WHICH  A
   41  RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI-
   42  LAR  ADJUSTMENT  THAT  IS DEPENDENT UPON THE RELATED MEMBER EITHER MAIN-
   43  TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN
   44  THAT JURISDICTION, THE MAXIMUM STATUTORY RATE OF  TAX  IMPOSED  BY  SAID
   45  JURISDICTION  SHALL  BE  DECREASED  TO REFLECT THE STATUTORY RATE OF TAX
   46  THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT
   47  OR SIMILAR ADJUSTMENT.
   48    (C) Royalty payments. Royalty payments are payments directly connected
   49  to the acquisition, use, maintenance  or  management,  ownership,  sale,
   50  exchange,  or any other disposition of licenses, trademarks, copyrights,
   51  trade names, trade dress, service  marks,  mask  works,  trade  secrets,
   52  patents  and  any other similar types of intangible assets as determined
   53  by the commissioner, and [includes] INCLUDE amounts allowable as  inter-
   54  est  deductions  under  section  one hundred sixty-three of the internal
   55  revenue code to the extent such amounts are directly or indirectly  for,
   56  related  to  or  in connection with the acquisition, use, maintenance or
       S. 2609--D                         25                         A. 3009--D

    1  management, ownership, sale, exchange or disposition of such  intangible
    2  assets.
    3    (D)  Valid  Business  Purpose. A valid business purpose is one or more
    4  business purposes, other than the avoidance or  reduction  of  taxation,
    5  which alone or in combination constitute the primary motivation for some
    6  business  activity or transaction, which activity or transaction changes
    7  in a meaningful way, apart from tax effects, the  economic  position  of
    8  the taxpayer. The economic position of the taxpayer includes an increase
    9  in  the  market share of the taxpayer, or the entry by the taxpayer into
   10  new business markets.
   11    (2) Royalty expense add backs. (A) Except where a taxpayer is included
   12  in a combined report with a related member pursuant to subdivision  four
   13  of  section  two  hundred  eleven  of  this  article, for the purpose of
   14  computing entire net income or other applicable taxable basis, a taxpay-
   15  er must add back royalty payments [to a] DIRECTLY  OR  INDIRECTLY  PAID,
   16  ACCRUED,  OR  INCURRED IN CONNECTION WITH ONE OR MORE DIRECT OR INDIRECT
   17  TRANSACTIONS WITH ONE OR MORE related [member] MEMBERS during the  taxa-
   18  ble year to the extent deductible in calculating federal taxable income.
   19    (B)  [The add back of royalty payments shall not be required if and to
   20  the extent that such payments meet either of the following conditions:
   21    (i) the related member during the same taxable year directly or  indi-
   22  rectly  paid  or incurred the amount to a person or entity that is not a
   23  related member, and such transaction  was  done  for  a  valid  business
   24  purpose and the payments are made at arm's length;
   25    (ii)  the  royalty  payments  are paid or incurred to a related member
   26  organized under the laws of a country other than the United States,  are
   27  subject  to  a  comprehensive income tax treaty between such country and
   28  the United States, and are taxed in such country at a tax rate at  least
   29  equal to that imposed by this state.
   30    (3) Royalty income exclusions. For the purpose of computing entire net
   31  income  or  other  taxable  basis, a taxpayer shall be allowed to deduct
   32  royalty payments directly or indirectly received from a  related  member
   33  during the taxable year to the extent included in the taxpayer's federal
   34  taxable  income unless such royalty payments would not be required to be
   35  added back under subparagraph two of this  paragraph  or  other  similar
   36  provision  in  this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN
   37  THIS PARAGRAPH SHALL NOT APPLY TO THE PORTION  OF  THE  ROYALTY  PAYMENT
   38  THAT  THE  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE
   39  TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER,  MEETS  ALL  OF  THE
   40  FOLLOWING  REQUIREMENTS:  (I)  THE  RELATED MEMBER WAS SUBJECT TO TAX IN
   41  THIS STATE OR ANOTHER STATE OR POSSESSION OF  THE  UNITED  STATES  OR  A
   42  FOREIGN  NATION  OR SOME COMBINATION THEREOF ON A TAX BASE THAT INCLUDED
   43  THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; (II)  THE
   44  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
   45  ACCRUED  OR  INCURRED  SUCH  PORTION  TO  A PERSON THAT IS NOT A RELATED
   46  MEMBER; AND (III) THE TRANSACTION GIVING RISE  TO  THE  ROYALTY  PAYMENT
   47  BETWEEN  THE  TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID
   48  BUSINESS PURPOSE.
   49    (II) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF  THE
   50  TAXPAYER  ESTABLISHES,  BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
   51  IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE RELATED  MEMBER
   52  WAS  SUBJECT  TO  TAX  ON OR MEASURED BY ITS NET INCOME IN THIS STATE OR
   53  ANOTHER STATE OR POSSESSION OF THE UNITED  STATES  OR  SOME  COMBINATION
   54  THEREOF;  (II)  THE  TAX  BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT
   55  PAID, ACCRUED OR INCURRED BY  THE  TAXPAYER;  AND  (III)  THE  AGGREGATE
   56  EFFECTIVE  RATE  OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC-
       S. 2609--D                         26                         A. 3009--D

    1  TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF  TAX  THAT
    2  APPLIED  TO  THE  TAXPAYER UNDER SECTION TWO HUNDRED TEN OF THIS ARTICLE
    3  FOR THE TAXABLE YEAR.
    4    (III) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
    5  TAXPAYER  ESTABLISHES,  BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
    6  IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE ROYALTY PAYMENT
    7  WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER  ORGANIZED  UNDER  THE
    8  LAWS  OF  A  COUNTRY  OTHER  THAN  THE  UNITED  STATES; (II) THE RELATED
    9  MEMBER'S INCOME FROM THE TRANSACTION  WAS  SUBJECT  TO  A  COMPREHENSIVE
   10  INCOME  TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III) THE
   11  RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE THAT
   12  INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE  TAXPAYER;
   13  (IV)  THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS TAXED IN SUCH
   14  COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO  THAT  IMPOSED  BY
   15  THIS  STATE;  AND  (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED
   16  PURSUANT TO A TRANSACTION THAT  WAS  UNDERTAKEN  FOR  A  VALID  BUSINESS
   17  PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   18    (IV)  THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   19  TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
   20  OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS
   21  OR HER DISCRETION, AGREE  TO  THE  APPLICATION  OR  USE  OF  ALTERNATIVE
   22  ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
   23  OF  SUCH  AGREEMENT  THE  INCOME  OF  THE TAXPAYER WOULD NOT BE PROPERLY
   24  REFLECTED.
   25    S 3. Paragraph 6 of subdivision (a) of section 292 of the tax law,  as
   26  amended  by  section 15 of part M of chapter 686 of the laws of 2003, is
   27  amended to read as follows:
   28    (6) Related members expense add back  [and  income  exclusion].    (A)
   29  Definitions.  (i) Related member [or members. For purposes of this para-
   30  graph, the term related member or members means a  person,  corporation,
   31  or other entity, including an entity that is treated as a partnership or
   32  other  pass-through  vehicle  for  purposes of federal taxation, whether
   33  such person, corporation or entity is a taxpayer or not, where one  such
   34  person,  corporation, or entity, or set of related persons, corporations
   35  or entities, directly or  indirectly  owns  or  controls  a  controlling
   36  interest  in  another  entity.  Such  entity or entities may include all
   37  taxpayers under article nine, nine-A, thirteen, twenty-two,  thirty-two,
   38  thirty-three or thirty-three-A of this chapter].  "RELATED MEMBER" MEANS
   39  A  RELATED  PERSON  AS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF
   40  SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVEN-
   41  UE CODE, EXCEPT THAT "FIFTY  PERCENT"  SHALL  BE  SUBSTITUTED  FOR  "TEN
   42  PERCENT".
   43    (ii)  [Controlling  interest. A controlling interest shall mean (I) in
   44  the case of a corporation, either thirty percent or more  of  the  total
   45  combined  voting  power  of all classes of stock of such corporation, or
   46  thirty percent or more of the capital, profits or beneficial interest in
   47  such voting stock of such corporation, and (II) in the case of  a  part-
   48  nership,  association,  trust or other entity, thirty percent or more of
   49  the capital, profits or beneficial interest in such partnership, associ-
   50  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   51  TAX" MEANS, AS TO ANY STATE OR U.S. POSSESSION,  THE  MAXIMUM  STATUTORY
   52  RATE  OF  TAX  IMPOSED  BY  THE  STATE OR POSSESSION ON OR MEASURED BY A
   53  RELATED MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT  PERCENTAGE,
   54  IF  ANY,  APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF SAID JURIS-
   55  DICTION. FOR PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF  TAX  AS
   56  TO  ANY  STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED MEMBER'S NET
       S. 2609--D                         27                         A. 3009--D

    1  INCOME TAX LIABILITY IN SAID JURISDICTION IS REPORTED ON A  COMBINED  OR
    2  CONSOLIDATED  RETURN  INCLUDING BOTH THE TAXPAYER AND THE RELATED MEMBER
    3  WHERE THE REPORTED TRANSACTIONS BETWEEN THE  TAXPAYER  AND  THE  RELATED
    4  MEMBER ARE ELIMINATED OR OFFSET.  ALSO, FOR PURPOSES OF THIS DEFINITION,
    5  WHEN  COMPUTING  THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN WHICH A
    6  RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI-
    7  LAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED  MEMBER  EITHER  MAIN-
    8  TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN
    9  THAT  JURISDICTION,  THE  MAXIMUM  STATUTORY RATE OF TAX IMPOSED BY SAID
   10  JURISDICTION SHALL BE DECREASED TO REFLECT THE  STATUTORY  RATE  OF  TAX
   11  THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT
   12  OR SIMILAR ADJUSTMENT.
   13    (iii)   Royalty  payments.  Royalty  payments  are  payments  directly
   14  connected to the acquisition, use, maintenance or management, ownership,
   15  sale, exchange, or any other disposition of licenses, trademarks,  copy-
   16  rights,  trade  names,  trade  dress,  service  marks, mask works, trade
   17  secrets, patents and any other similar types  of  intangible  assets  as
   18  determined by the commissioner, and [includes] INCLUDE amounts allowable
   19  as  interest  deductions  under  section  one hundred sixty-three of the
   20  internal revenue code to the extent such amounts are directly  or  indi-
   21  rectly for, related to or in connection with the acquisition, use, main-
   22  tenance  or management, ownership, sale, exchange or disposition of such
   23  intangible assets.
   24    (iv) Valid business purpose. A valid business purpose is one  or  more
   25  business  purposes  other  than  the  avoidance or reduction of taxation
   26  which alone or in combination constitute the primary motivation for some
   27  business activity or transaction, which activity or transaction  changes
   28  in  a  meaningful  way, apart from tax effects, the economic position of
   29  the taxpayer. The economic position of the taxpayer includes an increase
   30  in the market share of the taxpayer, or the entry by the  taxpayer  into
   31  new business markets.
   32    (B)  Royalty  expense  add backs. (i) For the purpose of computing New
   33  York unrelated business taxable income, a taxpayer must add back royalty
   34  payments [to a] DIRECTLY OR INDIRECTLY PAID,  ACCRUED,  OR  INCURRED  IN
   35  CONNECTION  WITH ONE OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE OR
   36  MORE related [member] MEMBERS during the  taxable  year  to  the  extent
   37  deductible in calculating federal unrelated business taxable income;
   38    (ii) [The add back of royalty payments shall not be required if and to
   39  the extent that such payments meet either of the following conditions:
   40    (I)  the related member during the same taxable year directly or indi-
   41  rectly paid or incurred the amount to a person or entity that is  not  a
   42  related  member,  and such transaction was done for a valid business and
   43  the payments are made at arm's length;
   44    (II) the royalty payments are paid or incurred  to  a  related  member
   45  organized  under the laws of a country other than the United States, are
   46  subject to a comprehensive income tax treaty between  such  country  and
   47  the  United States, and are taxed in such country at a tax rate at least
   48  equal to that imposed by this state.
   49    (C) Royalty income exclusions. For the purpose of computing  New  York
   50  unrelated business taxable income, a taxpayer shall be allowed to deduct
   51  royalty  payments  directly or indirectly received from a related member
   52  during the taxable year to the extent included in the taxpayer's federal
   53  taxable income unless such royalty payments would not be required to  be
   54  added  back  under  subparagraph  (B) of this paragraph or other similar
   55  provision in this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT  REQUIRED  IN
   56  THIS  PARAGRAPH  SHALL  NOT  APPLY TO THE PORTION OF THE ROYALTY PAYMENT
       S. 2609--D                         28                         A. 3009--D

    1  THAT THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE  OF  THE
    2  TYPE  AND  IN  THE  FORM SPECIFIED BY THE COMMISSIONER, MEETS ALL OF THE
    3  FOLLOWING REQUIREMENTS: (A) THE RELATED MEMBER WAS  SUBJECT  TO  TAX  IN
    4  THIS  STATE  OR  ANOTHER  STATE  OR POSSESSION OF THE UNITED STATES OR A
    5  FOREIGN NATION OR SOME COMBINATION THEREOF ON A TAX BASE  THAT  INCLUDED
    6  THE  ROYALTY  PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; (B) THE
    7  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
    8  ACCRUED OR INCURRED SUCH PORTION TO A  PERSON  THAT  IS  NOT  A  RELATED
    9  MEMBER;  AND  (C)  THE  TRANSACTION  GIVING  RISE TO THE ROYALTY PAYMENT
   10  BETWEEN THE TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR  A  VALID
   11  BUSINESS PURPOSE.
   12    (II)  THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   13  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE  TYPE  AND
   14  IN  THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (A) THE RELATED MEMBER
   15  WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME  IN  THIS  STATE  OR
   16  ANOTHER  STATE  OR  POSSESSION  OF THE UNITED STATES OR SOME COMBINATION
   17  THEREOF; (B) THE TAX BASE FOR SAID  TAX  INCLUDED  THE  ROYALTY  PAYMENT
   18  PAID,  ACCRUED OR INCURRED BY THE TAXPAYER; AND (C) THE AGGREGATE EFFEC-
   19  TIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDICTIONS IS
   20  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT APPLIED TO
   21  THE TAXPAYER UNDER SECTION TWO HUNDRED NINETY OF THIS  ARTICLE  FOR  THE
   22  TAXABLE YEAR.
   23    (III) 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: (A) THE ROYALTY PAYMENT
   26  WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER  ORGANIZED  UNDER  THE
   27  LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (B) THE RELATED MEMBER'S
   28  INCOME  FROM  THE  TRANSACTION WAS SUBJECT TO A COMPREHENSIVE INCOME TAX
   29  TREATY BETWEEN SUCH COUNTRY AND  THE  UNITED  STATES;  (C)  THE  RELATED
   30  MEMBER  WAS  SUBJECT  TO  TAX  IN  A  FOREIGN  NATION ON A TAX BASE THAT
   31  INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE  TAXPAYER;
   32  (D)  THE  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS TAXED IN SUCH
   33  COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO  THAT  IMPOSED  BY
   34  THIS  STATE;  AND  (E) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED
   35  PURSUANT TO A TRANSACTION THAT  WAS  UNDERTAKEN  FOR  A  VALID  BUSINESS
   36  PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   37    (IV)  THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   38  TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
   39  OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS
   40  OR HER DISCRETION, AGREE  TO  THE  APPLICATION  OR  USE  OF  ALTERNATIVE
   41  ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
   42  OF  SUCH  AGREEMENT  THE  INCOME  OF  THE TAXPAYER WOULD NOT BE PROPERLY
   43  REFLECTED.
   44    S 4. Paragraph 19 of subsection (c) of section 612 of the tax  law  is
   45  REPEALED.
   46    S  5.  Subsection  (r)  of  section  612 of the tax law, as amended by
   47  section 3 of part M of chapter 686 of the laws of 2003,  is  amended  to
   48  read as follows:
   49    (r)  Related  members  expense  add back [and income exclusion].   (1)
   50  Definitions. (A) Related  member  [or  members.  For  purposes  of  this
   51  subsection,  the  term  related member or members means a person, corpo-
   52  ration, or other entity, including an entity that is treated as a  part-
   53  nership  or other pass-through vehicle for purposes of federal taxation,
   54  whether such person, corporation or entity is a taxpayer or  not,  where
   55  one  such  person,  corporation,  or  entity, or set of related persons,
   56  corporations or entities, directly or  indirectly  owns  or  controls  a
       S. 2609--D                         29                         A. 3009--D

    1  controlling  interest  in  another  entity.  Such entity or entities may
    2  include all taxpayers under article nine, nine-A, thirteen,  twenty-two,
    3  thirty-two,  thirty-three  or thirty-three-A of this chapter].  "RELATED
    4  MEMBER"  MEANS  A RELATED PERSON AS DEFINED IN SUBPARAGRAPH (C) OF PARA-
    5  GRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF  THE
    6  INTERNAL  REVENUE CODE, EXCEPT THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED
    7  FOR "TEN PERCENT".
    8    (B) [Controlling interest. A controlling interest shall  mean  (i)  in
    9  the  case  of  a corporation, either thirty percent or more of the total
   10  combined voting power of all classes of stock of  such  corporation,  or
   11  thirty percent or more of the capital, profits or beneficial interest in
   12  such  voting  stock of such corporation, and (ii) in the case of a part-
   13  nership, association, trust or other entity, thirty percent or  more  of
   14  the capital, profits or beneficial interest in such partnership, associ-
   15  ation,  trust  or other entity.] EFFECTIVE RATE OF TAX.  "EFFECTIVE RATE
   16  OF TAX" MEANS, AS TO ANY STATE OR U.S. POSSESSION, THE MAXIMUM STATUTORY
   17  RATE OF TAX IMPOSED BY THE STATE OR  POSSESSION  ON  OR  MEASURED  BY  A
   18  RELATED  MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT PERCENTAGE,
   19  IF ANY, APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF  SAID  JURIS-
   20  DICTION.  FOR  PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF TAX AS
   21  TO ANY STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED  MEMBER'S  NET
   22  INCOME  TAX  LIABILITY IN SAID JURISDICTION IS REPORTED ON A COMBINED OR
   23  CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE  RELATED  MEMBER
   24  WHERE  THE  REPORTED  TRANSACTIONS  BETWEEN THE TAXPAYER AND THE RELATED
   25  MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS  DEFINITION,
   26  WHEN  COMPUTING  THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN WHICH A
   27  RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI-
   28  LAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED  MEMBER  EITHER  MAIN-
   29  TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN
   30  THAT  JURISDICTION,  THE  MAXIMUM  STATUTORY RATE OF TAX IMPOSED BY SAID
   31  JURISDICTION SHALL BE DECREASED TO REFLECT THE  STATUTORY  RATE  OF  TAX
   32  THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT
   33  OR SIMILAR ADJUSTMENT.
   34    (C) Royalty payments. Royalty payments are payments directly connected
   35  to  the  acquisition,  use,  maintenance or management, ownership, sale,
   36  exchange, or any other disposition of licenses, trademarks,  copyrights,
   37  trade  names,  trade  dress,  service  marks, mask works, trade secrets,
   38  patents and any other similar types of intangible assets  as  determined
   39  by  the commissioner, and [includes] INCLUDE amounts allowable as inter-
   40  est deductions under section one hundred  sixty-three  of  the  internal
   41  revenue  code to the extent such amounts are directly or indirectly for,
   42  related to or in connection with the acquisition,  use,  maintenance  or
   43  management,  ownership, sale, exchange or disposition of such intangible
   44  assets.
   45    (D) Valid business purpose. A valid business purpose is  one  or  more
   46  business  purposes,  other  than the avoidance or reduction of taxation,
   47  which alone or in combination constitute the primary motivation for some
   48  business activity or transaction, which activity or transaction  changes
   49  in  a  meaningful  way, apart from tax effects, the economic position of
   50  the taxpayer. The economic position of the taxpayer includes an increase
   51  in the market share of the taxpayer, or the entry by the  taxpayer  into
   52  new business markets.
   53    (2)  Royalty  expense  add backs. (A) For the purpose of computing New
   54  York adjusted gross income, a taxpayer must add  back  royalty  payments
   55  [to  a]  DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION
   56  WITH ONE OR MORE DIRECT  OR  INDIRECT  TRANSACTIONS  WITH  ONE  OR  MORE
       S. 2609--D                         30                         A. 3009--D

    1  related  [member]  MEMBERS during the taxable year to the extent deduct-
    2  ible in calculating federal taxable income.
    3    (B)  [The add back of royalty payments shall not be required if and to
    4  the extent that such payments meet either of the following conditions:
    5    (i) the related member during the same taxable year directly or  indi-
    6  rectly  paid  or incurred the amount to a person or entity that is not a
    7  related member, and such transaction was done for a valid  business  and
    8  the payments are made at arm's length;
    9    (ii)  the  royalty  payments  are paid or incurred to a related member
   10  organized under the laws of a country other than the United States,  are
   11  subject  to  a  comprehensive income tax treaty between such country and
   12  the United States, and are taxed in such country at a tax rate at  least
   13  equal to that imposed by this state.
   14    (3)  Royalty  income exclusions. For the purpose of computing New York
   15  adjusted gross income, a taxpayer shall be  allowed  to  deduct  royalty
   16  payments  directly  or  indirectly received from a related member during
   17  the taxable year to the extent included in the taxpayer's federal  taxa-
   18  ble  income  unless  such  royalty  payments would not be required to be
   19  added back under paragraph two  of  this  subsection  or  other  similar
   20  provision  in  this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN
   21  THIS SUBSECTION SHALL NOT APPLY TO THE PORTION OF  THE  ROYALTY  PAYMENT
   22  THAT  THE  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE
   23  TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER,  MEETS  ALL  OF  THE
   24  FOLLOWING  REQUIREMENTS:  (I)  THE  RELATED MEMBER WAS SUBJECT TO TAX IN
   25  THIS STATE OR ANOTHER STATE OR POSSESSION OF  THE  UNITED  STATES  OR  A
   26  FOREIGN  NATION  OR SOME COMBINATION THEREOF ON A TAX BASE THAT INCLUDED
   27  THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; (II)  THE
   28  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
   29  ACCRUED  OR  INCURRED  SUCH  PORTION  TO  A PERSON THAT IS NOT A RELATED
   30  MEMBER; AND (III) THE TRANSACTION GIVING RISE  TO  THE  ROYALTY  PAYMENT
   31  BETWEEN  THE  TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID
   32  BUSINESS PURPOSE.
   33    (II) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
   34  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE  TYPE  AND
   35  IN  THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE RELATED MEMBER
   36  WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME  IN  THIS  STATE  OR
   37  ANOTHER  STATE  OR  POSSESSION  OF THE UNITED STATES OR SOME COMBINATION
   38  THEREOF; (II) THE TAX BASE FOR SAID TAX   INCLUDED THE  ROYALTY  PAYMENT
   39  PAID,  ACCRUED  OR  INCURRED  BY  THE  TAXPAYER; AND (III) THE AGGREGATE
   40  EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN  THOSE  JURISDIC-
   41  TIONS  IS  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
   42  APPLIED TO THE TAXPAYER UNDER SECTION SIX HUNDRED ONE  OF  THIS  ARTICLE
   43  FOR THE TAXABLE YEAR.
   44    (III)  THE  ADJUSTMENT  REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF
   45  THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF  THE  TYPE
   46  AND  IN  THE  FORM  SPECIFIED BY THE COMMISSIONER, THAT: (I) THE ROYALTY
   47  PAYMENT WAS PAID, ACCRUED OR INCURRED  TO  A  RELATED  MEMBER  ORGANIZED
   48  UNDER  THE  LAWS  OF  A  COUNTRY  OTHER THAN THE UNITED STATES; (II) THE
   49  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
   50  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
   51  THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX  BASE
   52  THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,  ACCRUED OR INCURRED BY THE
   53  TAXPAYER; (IV) THE RELATED MEMBER'S  INCOME  FROM  THE  TRANSACTION  WAS
   54  TAXED  IN  SUCH  COUNTRY AT AN EFFECTIVE TAX RATE AT LEAST EQUAL TO THAT
   55  IMPOSED BY THIS STATE; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED  OR
       S. 2609--D                         31                         A. 3009--D

    1  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
    2  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
    3    (IV) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
    4  TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
    5  OF  ALTERNATIVE  ADJUSTMENTS OR COMPUTATIONS.   THE COMMISSIONER MAY, IN
    6  HIS OR HER DISCRETION, AGREE TO THE APPLICATION OR  USE  OF  ALTERNATIVE
    7  ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
    8  OF  SUCH  AGREEMENT  THE  INCOME  OF  THE TAXPAYER WOULD NOT BE PROPERLY
    9  REFLECTED.
   10    S 6. Paragraph 17 of subsection (e) of section 1453 of the tax law  is
   11  REPEALED.
   12    S  7.  Subsection  (r)  of  section 1453 of the tax law, as amended by
   13  section 5 of part M of chapter 686 of the laws of 2003, subparagraph (A)
   14  of paragraph 2 as amended by section 5 of part J of chapter  60  of  the
   15  laws of 2007, is amended to read as follows:
   16    (r)  Related  members  expense  add back [and income exclusion].   (1)
   17  Definitions. (A) Related  member  [or  members.  For  purposes  of  this
   18  subsection,  the  term  related member or members means a person, corpo-
   19  ration, or other entity, including an entity that is treated as a  part-
   20  nership  or other pass-through vehicle for purposes of federal taxation,
   21  whether such person, corporation or entity is a taxpayer or  not,  where
   22  one  such  person,  corporation,  or  entity, or set of related persons,
   23  corporations or entities, directly or  indirectly  owns  or  controls  a
   24  controlling  interest  in  another  entity.  Such entity or entities may
   25  include all taxpayers under article nine, nine-A, thirteen,  twenty-two,
   26  thirty-two,  thirty-three  or thirty-three-A of this chapter].  "RELATED
   27  MEMBER" MEANS A RELATED PERSON AS DEFINED IN SUBPARAGRAPH (C)  OF  PARA-
   28  GRAPH  THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE
   29  INTERNAL REVENUE CODE, EXCEPT THAT "FIFTY PERCENT" SHALL BE  SUBSTITUTED
   30  FOR "TEN PERCENT".
   31    (B)  [Controlling  interest.  A controlling interest shall mean (i) in
   32  the case of a corporation, either thirty percent or more  of  the  total
   33  combined  voting  power  of all classes of stock of such corporation, or
   34  thirty percent or more of the capital, profits or beneficial interest in
   35  such voting stock of such corporation, and (ii) in the case of  a  part-
   36  nership,  association,  trust or other entity, thirty percent or more of
   37  the capital, profits or beneficial interest in such partnership, associ-
   38  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   39  TAX" MEANS, AS TO ANY STATE OR U.S.  POSSESSION, THE  MAXIMUM  STATUTORY
   40  RATE  OF  TAX  IMPOSED  BY  THE  STATE OR POSSESSION ON OR MEASURED BY A
   41  RELATED MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT  PERCENTAGE,
   42  IF  ANY,  APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF SAID JURIS-
   43  DICTION. FOR PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF  TAX  AS
   44  TO  ANY  STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED MEMBER'S NET
   45  INCOME TAX LIABILITY IN SAID JURISDICTION IS REPORTED ON A  COMBINED  OR
   46  CONSOLIDATED  RETURN  INCLUDING BOTH THE TAXPAYER AND THE RELATED MEMBER
   47  WHERE THE REPORTED TRANSACTIONS BETWEEN THE  TAXPAYER  AND  THE  RELATED
   48  MEMBER  ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS DEFINITION,
   49  WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN  WHICH  A
   50  RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI-
   51  LAR  ADJUSTMENT  THAT  IS DEPENDENT UPON THE RELATED MEMBER EITHER MAIN-
   52  TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN
   53  THAT JURISDICTION, THE MAXIMUM STATUTORY RATE OF  TAX  IMPOSED  BY  SAID
   54  JURISDICTION  SHALL  BE  DECREASED  TO REFLECT THE STATUTORY RATE OF TAX
   55  THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT
   56  OR SIMILAR ADJUSTMENT.
       S. 2609--D                         32                         A. 3009--D

    1    (C) Royalty payments. Royalty payments are payments directly connected
    2  to the acquisition, use, maintenance  or  management,  ownership,  sale,
    3  exchange,  or any other disposition of licenses, trademarks, copyrights,
    4  trade names, trade dress, service  marks,  mask  works,  trade  secrets,
    5  patents  and  any other similar types of intangible assets as determined
    6  by the commissioner, and [includes] INCLUDE amounts allowable as  inter-
    7  est  deductions  under  section  one hundred sixty-three of the internal
    8  revenue code to the extent such amounts are directly or indirectly  for,
    9  related  to  or  in connection with the acquisition, use, maintenance or
   10  management, ownership, sale, exchange or disposition of such  intangible
   11  assets.
   12    (D)  Valid  business  purpose. A valid business purpose is one or more
   13  business purposes, other than the avoidance or  reduction  of  taxation,
   14  which alone or in combination constitute the primary motivation for some
   15  business  activity or transaction, which activity or transaction changes
   16  in a meaningful way, apart from tax effects, the  economic  position  of
   17  the taxpayer. The economic position of the taxpayer includes an increase
   18  in  the  market share of the taxpayer, or the entry by the taxpayer into
   19  new business markets.
   20    (2) Royalty expense add backs. (A) Except where a taxpayer is included
   21  in a combined return with a related member pursuant to subsection (f) of
   22  section fourteen hundred sixty-two of this article, for the  purpose  of
   23  computing  entire  net income, a taxpayer must add back royalty payments
   24  [to a] DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED  IN  CONNECTION
   25  WITH  ONE  OR  MORE  DIRECT  OR  INDIRECT  TRANSACTIONS WITH ONE OR MORE
   26  related [member] MEMBERS during the taxable year to the  extent  deduct-
   27  ible in calculating federal taxable income.
   28    (B)  [The add back of royalty payments shall not be required if and to
   29  the extent that such payments meet either of the following conditions:
   30    (i) the related member during the same taxable year directly or  indi-
   31  rectly  paid  or incurred the amount to a person or entity that is not a
   32  related member, and such transaction was done for a valid  business  and
   33  the payments are made at arm's length;
   34    (ii)  the  royalty  payments  are paid or incurred to a related member
   35  organized under the laws of a country other than the United States,  are
   36  subject  to  a  comprehensive income tax treaty between such country and
   37  the United States, and are taxed in such country at a tax rate at  least
   38  equal to that imposed by this state.
   39    (3) Royalty income exclusions. For the purpose of computing entire net
   40  income,  a taxpayer shall be allowed to deduct royalty payments directly
   41  or indirectly received from a related member during the taxable year  to
   42  the extent included in the taxpayer's federal taxable income unless such
   43  royalty  payments would not be required to be added back under paragraph
   44  two of this subsection or other  similar  provision  in  this  chapter.]
   45  EXCEPTIONS.  (I)  THE  ADJUSTMENT  REQUIRED IN THIS SUBSECTION SHALL NOT
   46  APPLY TO THE PORTION OF THE ROYALTY PAYMENT  THAT  THE  TAXPAYER  ESTAB-
   47  LISHES,  BY  CLEAR  AND  CONVINCING EVIDENCE OF THE TYPE AND IN THE FORM
   48  SPECIFIED BY THE COMMISSIONER, MEETS ALL OF THE FOLLOWING  REQUIREMENTS:
   49  (I) THE RELATED MEMBER WAS SUBJECT TO TAX IN THIS STATE OR ANOTHER STATE
   50  OR  POSSESSION OF THE UNITED STATES OR A FOREIGN NATION OR SOME COMBINA-
   51  TION THEREOF ON A TAX BASE  THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,
   52  ACCRUED  OR INCURRED BY THE TAXPAYER; (II) THE RELATED MEMBER DURING THE
   53  SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, ACCRUED OR INCURRED  SUCH
   54  PORTION  TO  A PERSON THAT IS NOT A RELATED MEMBER; AND (III) THE TRANS-
   55  ACTION GIVING RISE TO THE ROYALTY PAYMENT BETWEEN THE TAXPAYER  AND  THE
   56  RELATED MEMBER WAS UNDERTAKEN FOR A VALID BUSINESS PURPOSE.
       S. 2609--D                         33                         A. 3009--D

    1    (II) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
    2  TAXPAYER  ESTABLISHES,  BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
    3  IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE RELATED  MEMBER
    4  WAS  SUBJECT  TO  TAX  ON OR MEASURED BY ITS NET INCOME IN THIS STATE OR
    5  ANOTHER  STATE  OR  POSSESSION  OF THE UNITED STATES OR SOME COMBINATION
    6  THEREOF; (II) THE TAX BASE FOR SAID TAX  INCLUDED  THE  ROYALTY  PAYMENT
    7  PAID,  ACCRUED  OR  INCURRED  BY  THE  TAXPAYER; AND (III) THE AGGREGATE
    8  EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN  THOSE  JURISDIC-
    9  TIONS  IS  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
   10  APPLIED TO THE TAXPAYER UNDER SECTION  FOURTEEN  HUNDRED  FIFTY-FIVE  OF
   11  THIS ARTICLE FOR THE TAXABLE YEAR.
   12    (III)  THE  ADJUSTMENT  REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF
   13  THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF  THE  TYPE
   14  AND  IN  THE  FORM  SPECIFIED BY THE COMMISSIONER, THAT: (I) THE ROYALTY
   15  PAYMENT WAS PAID, ACCRUED OR INCURRED  TO  A  RELATED  MEMBER  ORGANIZED
   16  UNDER  THE  LAWS  OF  A  COUNTRY  OTHER THAN THE UNITED STATES; (II) THE
   17  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
   18  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
   19  THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX  BASE
   20  THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,  ACCRUED OR INCURRED BY THE
   21  TAXPAYER; (IV) THE RELATED MEMBER'S  INCOME  FROM  THE  TRANSACTION  WAS
   22  TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT
   23  IMPOSED  BY THIS STATE; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR
   24  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
   25  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   26    (IV) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
   27  TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
   28  OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS
   29  OR HER DISCRETION, AGREE  TO  THE  APPLICATION  OR  USE  OF  ALTERNATIVE
   30  ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
   31  OF  SUCH  AGREEMENT  THE  INCOME  OF  THE TAXPAYER WOULD NOT BE PROPERLY
   32  REFLECTED.
   33    S 8. Paragraph 14 of subdivision (b) of section 1503 of the  tax  law,
   34  as  amended  by  section 7 of part M of chapter 686 of the laws of 2003,
   35  clause (i) of subparagraph (B) as amended by section  6  of  part  J  of
   36  chapter 60 of the laws of 2007, is amended to read as follows:
   37    (14)  Related  members  expense  add back [and income exclusion].  (A)
   38  Definitions. (i) Related member [or members. For purposes of this  para-
   39  graph,  the  term related member or members means a person, corporation,
   40  or other entity, including an entity that is treated as a partnership or
   41  other pass-through vehicle for purposes  of  federal  taxation,  whether
   42  such  person, corporation or entity is a taxpayer or not, where one such
   43  person, corporation, or entity, or set of related persons,  corporations
   44  or  entities,  directly  or  indirectly  owns  or controls a controlling
   45  interest in another entity. Such entity  or  entities  may  include  all
   46  taxpayers  under article nine, nine-A, thirteen, twenty-two, thirty-two,
   47  thirty-three or thirty-three-A of this chapter]. "RELATED MEMBER"  MEANS
   48  A  RELATED  PERSON  AS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF
   49  SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVEN-
   50  UE CODE, EXCEPT THAT "FIFTY  PERCENT"  SHALL  BE  SUBSTITUTED  FOR  "TEN
   51  PERCENT".
   52    (ii)  [Controlling  interest. A controlling interest shall mean (I) in
   53  the case of a corporation, either thirty percent or more  of  the  total
   54  combined  voting  power  of all classes of stock of such corporation, or
   55  thirty percent or more of the capital, profits or beneficial interest in
   56  such voting stock of such corporation, and (II) in the case of  a  part-
       S. 2609--D                         34                         A. 3009--D

    1  nership,  association,  trust or other entity, thirty percent or more of
    2  the capital, profits or beneficial interest in such partnership, associ-
    3  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
    4  TAX"  MEANS,  AS  TO ANY STATE OR U.S. POSSESSION, THE MAXIMUM STATUTORY
    5  RATE OF TAX IMPOSED BY THE STATE OR  POSSESSION  ON  OR  MEASURED  BY  A
    6  RELATED  MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT PERCENTAGE,
    7  IF ANY, APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF  SAID  JURIS-
    8  DICTION.  FOR  PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF TAX AS
    9  TO ANY STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED  MEMBER'S  NET
   10  INCOME  TAX  LIABILITY IN SAID JURISDICTION IS REPORTED ON A COMBINED OR
   11  CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE  RELATED  MEMBER
   12  WHERE  THE  REPORTED  TRANSACTIONS  BETWEEN THE TAXPAYER AND THE RELATED
   13  MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS  DEFINITION,
   14  WHEN  COMPUTING  THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN WHICH A
   15  RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI-
   16  LAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED  MEMBER  EITHER  MAIN-
   17  TAINING  OR MANAGING   INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME
   18  IN THAT JURISDICTION, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY  SAID
   19  JURISDICTION  SHALL  BE  DECREASED  TO REFLECT THE STATUTORY RATE OF TAX
   20  THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT
   21  OR SIMILAR ADJUSTMENT.
   22    (iii)  Royalty  payments.  Royalty  payments  are  payments   directly
   23  connected to the acquisition, use, maintenance or management, ownership,
   24  sale,  exchange, or any other disposition of licenses, trademarks, copy-
   25  rights, trade names, trade  dress,  service  marks,  mask  works,  trade
   26  secrets,  patents  and  any  other similar types of intangible assets as
   27  determined by the commissioner, and [includes] INCLUDE amounts allowable
   28  as interest deductions under section  one  hundred  sixty-three  of  the
   29  internal  revenue  code to the extent such amounts are directly or indi-
   30  rectly for, related to or in connection with the acquisition, use, main-
   31  tenance or management, ownership, sale, exchange or disposition of  such
   32  intangible assets.
   33    (iv)  Valid  business purpose. A valid business purpose is one or more
   34  business purposes, other than the avoidance or  reduction  of  taxation,
   35  which alone or in combination constitute the primary motivation for some
   36  business  activity or transaction, which activity or transaction changes
   37  in a meaningful way, apart from tax effects, the  economic  position  of
   38  the taxpayer. The economic position of the taxpayer includes an increase
   39  in  the  market share of the taxpayer, or the entry by the taxpayer into
   40  new business markets.
   41    (B) Royalty expense add backs. (i) Except where a taxpayer is included
   42  in a combined return with a related member pursuant to  subdivision  (f)
   43  of  section  fifteen hundred fifteen of this article, for the purpose of
   44  computing entire net income, a taxpayer must add back  royalty  payments
   45  [to  a]  DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION
   46  WITH ONE OR MORE DIRECT  OR  INDIRECT  TRANSACTIONS  WITH  ONE  OR  MORE
   47  related  [member]  MEMBERS during the taxable year to the extent deduct-
   48  ible in calculating federal taxable income.
   49    (ii) [The add back of royalty payments shall not be required if and to
   50  the extent that such payments meet either of the following conditions:
   51    (I) the related member during the same taxable year directly or  indi-
   52  rectly  paid  or incurred the amount to a person or entity that is not a
   53  related member, and such transaction was done for a valid  business  and
   54  the payments are made at arm's length;
   55    (II)  the  royalty  payments  are paid or incurred to a related member
   56  organized under the laws of a country other than the United States,  are
       S. 2609--D                         35                         A. 3009--D

    1  subject  to  a  comprehensive income tax treaty between such country and
    2  the United States, and are taxed in such country at a tax rate at  least
    3  equal to that imposed by this state.
    4    (C) Royalty income exclusions. For the purpose of computing entire net
    5  income,  a taxpayer shall be allowed to deduct royalty payments directly
    6  or indirectly received from a related member during the taxable year  to
    7  the extent included in the taxpayer's federal taxable income unless such
    8  royalty  payments  would not be required to be added back under subpara-
    9  graph (B) of this paragraph or other similar provision in this chapter.]
   10  EXCEPTIONS.  (I) THE ADJUSTMENT REQUIRED IN  THIS  PARAGRAPH  SHALL  NOT
   11  APPLY  TO  THE  PORTION  OF THE ROYALTY PAYMENT THAT THE TAXPAYER ESTAB-
   12  LISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE  AND  IN  THE  FORM
   13  SPECIFIED  BY THE COMMISSIONER, MEETS ALL OF THE FOLLOWING REQUIREMENTS:
   14  (A) THE RELATED MEMBER WAS SUBJECT TO TAX IN THIS STATE OR ANOTHER STATE
   15  OR POSSESSION OF THE UNITED STATES OR A FOREIGN NATION OR SOME  COMBINA-
   16  TION  THEREOF  ON  A  TAX  BASE  THAT INCLUDED THE ROYALTY PAYMENT PAID,
   17  ACCRUED OR INCURRED BY THE TAXPAYER; (B) THE RELATED MEMBER  DURING  THE
   18  SAME  TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, ACCRUED OR INCURRED SUCH
   19  PORTION TO A PERSON THAT IS NOT A RELATED MEMBER;  AND  (C)  THE  TRANS-
   20  ACTION  GIVING  RISE TO THE ROYALTY PAYMENT BETWEEN THE TAXPAYER AND THE
   21  RELATED MEMBER WAS UNDERTAKEN FOR A VALID BUSINESS PURPOSE.
   22    (II) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF  THE
   23  TAXPAYER  ESTABLISHES,  BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
   24  IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (A) THE RELATED  MEMBER
   25  WAS  SUBJECT  TO  TAX  ON OR MEASURED BY ITS NET INCOME IN THIS STATE OR
   26  ANOTHER STATE OR POSSESSION OF THE UNITED  STATES  OR  SOME  COMBINATION
   27  THEREOF;  (B)  THE  TAX  BASE  FOR SAID TAX INCLUDED THE ROYALTY PAYMENT
   28  PAID, ACCRUED OR INCURRED BY THE TAXPAYER; AND (C) THE AGGREGATE  EFFEC-
   29  TIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDICTIONS IS
   30  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT APPLIED TO
   31  THE  TAXPAYER  UNDER SECTION FIFTEEN HUNDRED TWO, FIFTEEN HUNDRED TWO-A,
   32  OR FIFTEEN HUNDRED TWO-B OF THIS ARTICLE FOR THE TAXABLE YEAR.
   33    (III) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   34  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE  TYPE  AND
   35  IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (A) THE ROYALTY PAYMENT
   36  WAS  PAID,  ACCRUED  OR INCURRED TO A RELATED MEMBER ORGANIZED UNDER THE
   37  LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (B) THE RELATED MEMBER'S
   38  INCOME FROM THE TRANSACTION WAS SUBJECT TO A  COMPREHENSIVE  INCOME  TAX
   39  TREATY  BETWEEN  SUCH  COUNTRY  AND  THE  UNITED STATES; (C) THE RELATED
   40  MEMBER WAS SUBJECT TO TAX IN  A  FOREIGN  NATION  ON  A  TAX  BASE  THAT
   41  INCLUDED  THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER;
   42  (D) THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS TAXED  IN  SUCH
   43  COUNTRY  AT  AN  EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT IMPOSED BY
   44  THIS STATE; AND (E) THE ROYALTY PAYMENT WAS PAID,  ACCRUED  OR  INCURRED
   45  PURSUANT  TO  A  TRANSACTION  THAT  WAS  UNDERTAKEN FOR A VALID BUSINESS
   46  PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   47    (IV) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF  THE
   48  TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
   49  OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS
   50  OR  HER  DISCRETION,  AGREE  TO  THE  APPLICATION  OR USE OF ALTERNATIVE
   51  ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
   52  OF SUCH AGREEMENT THE INCOME OF  THE  TAXPAYER  WOULD  NOT  BE  PROPERLY
   53  REFLECTED.
   54    S  9.  Subdivision (e) of section 11-506 of the administrative code of
   55  the city of New York, as added by section 17 of part M of chapter 686 of
       S. 2609--D                         36                         A. 3009--D

    1  the laws of 2003 and as relettered by chapter 633 of the laws  of  2005,
    2  is amended to read as follows:
    3    (e)  Related  members  expense  add back [and income exclusion].   (1)
    4  Definitions. (A) Related member [or members. For purposes of this subdi-
    5  vision, the term related member or members means a person,  corporation,
    6  or other entity, including an entity that is treated as a partnership or
    7  other  pass-through  vehicle  for  purposes of federal taxation, whether
    8  such person, corporation or entity is a taxpayer or not, where one  such
    9  person,  corporation, or entity, or set of related persons, corporations
   10  or entities, directly or  indirectly  owns  or  controls  a  controlling
   11  interest  in  another  entity.  Such  entity or entities may include all
   12  taxpayers under this title]. "RELATED MEMBER" MEANS A RELATED PERSON  AS
   13  DEFINED  IN  SUBPARAGRAPH  (C)  OF  PARAGRAPH THREE OF SUBSECTION (B) OF
   14  SECTION FOUR HUNDRED SIXTY-FIVE OF THE  INTERNAL  REVENUE  CODE,  EXCEPT
   15  THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT".
   16    (B)  [Controlling  interest.  A controlling interest shall mean (i) in
   17  the case of a corporation, either thirty percent or more  of  the  total
   18  combined  voting  power  of all classes of stock of such corporation, or
   19  thirty percent or more of the capital, profits or beneficial interest in
   20  such voting stock of such corporation, and (ii) in the case of  a  part-
   21  nership,  association,  trust or other entity, thirty percent or more of
   22  the capital, profits or beneficial interest in such partnership, associ-
   23  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   24  TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY
   25  THE CITY ON OR MEASURED BY A RELATED MEMBER'S NET INCOME  MULTIPLIED  BY
   26  THE  APPORTIONMENT  PERCENTAGE, IF ANY, APPLICABLE TO THE RELATED MEMBER
   27  UNDER THE LAWS OF SAID JURISDICTION. FOR PURPOSES  OF  THIS  DEFINITION,
   28  THE  EFFECTIVE  RATE  OF  TAX  AS  TO ANY CITY IS ZERO WHERE THE RELATED
   29  MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON A COMBINED
   30  OR CONSOLIDATED RETURN INCLUDING  BOTH  THE  TAXPAYER  AND  THE  RELATED
   31  MEMBER  WHERE  THE  REPORTED  TRANSACTIONS  BETWEEN THE TAXPAYER AND THE
   32  RELATED MEMBER ARE ELIMINATED OR OFFSET.  ALSO,  FOR  PURPOSES  OF  THIS
   33  DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH
   34  A  RELATED  MEMBER'S  NET  INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR
   35  SIMILAR ADJUSTMENT THAT IS DEPENDENT  UPON  THE  RELATED  MEMBER  EITHER
   36  MAINTAINING  OR  MANAGING  INTANGIBLE  PROPERTY  OR  COLLECTING INTEREST
   37  INCOME IN THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED  BY  SAID
   38  CITY  SHALL  BE  DECREASED  TO  REFLECT  THE  STATUTORY RATE OF TAX THAT
   39  APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH  CREDIT  OR
   40  SIMILAR ADJUSTMENT.
   41    (C) Royalty payments. Royalty payments are payments directly connected
   42  to  the  acquisition,  use,  maintenance or management, ownership, sale,
   43  exchange, or any other disposition of licenses, trademarks,  copyrights,
   44  trade  names,  trade  dress,  service  marks, mask works, trade secrets,
   45  patents and any other similar types of intangible assets  as  determined
   46  by the commissioner of finance, and [includes] INCLUDE amounts allowable
   47  as  interest  deductions  under  section  one hundred sixty-three of the
   48  internal revenue code to the extent such amounts are directly  or  indi-
   49  rectly for, related to or in connection with the acquisition, use, main-
   50  tenance  or management, ownership, sale, exchange or disposition of such
   51  intangible assets.
   52    (D) Valid business purpose. A valid business purpose is  one  or  more
   53  business  purposes,  other  than the avoidance or reduction of taxation,
   54  which alone or in combination constitute the primary motivation for some
   55  business activity or transaction, which activity or transaction  changes
   56  in  a  meaningful  way, apart from tax effects, the economic position of
       S. 2609--D                         37                         A. 3009--D

    1  the taxpayer. The economic position of the taxpayer includes an increase
    2  in the market share of the taxpayer, or the entry by the  taxpayer  into
    3  new business markets.
    4    (2)  Royalty expense add backs. (A) For the purpose of computing unin-
    5  corporated business entire net income, a taxpayer must add back  royalty
    6  payments  [to  a]  DIRECTLY  OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN
    7  CONNECTION WITH ONE OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE  OR
    8  MORE  related  [member]  MEMBERS  during  the taxable year to the extent
    9  deductible in calculating federal taxable income.
   10    (B) [The add back of royalty payments shall not be required if and  to
   11  the extent that such payments meet either of the following conditions:
   12    (i)  the related member during the same taxable year directly or indi-
   13  rectly paid or incurred the amount to a person or entity that is  not  a
   14  related  member,  and such transaction was done for a valid business and
   15  the payments are made at arm's length;
   16    (ii) the royalty payments are paid or incurred  to  a  related  member
   17  organized  under the laws of a country other than the United States, are
   18  subject to a comprehensive income tax treaty between  such  country  and
   19  the  United States, and are taxed in such country at a tax rate at least
   20  equal to that imposed by this state.
   21    (3) Royalty income exclusions. For the purpose of computing unincorpo-
   22  rated business entire net income, a taxpayer shall be allowed to  deduct
   23  royalty  payments  directly or indirectly received from a related member
   24  during the taxable year to the extent included in the taxpayer's federal
   25  taxable income unless such royalty payments would not be required to  be
   26  added  back  under  paragraph  two  of this subdivision or other similar
   27  provision in this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT  REQUIRED  IN
   28  THIS  SUBDIVISION  SHALL NOT APPLY TO THE PORTION OF THE ROYALTY PAYMENT
   29  THAT THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE  OF  THE
   30  TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, MEETS ALL
   31  OF THE FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX
   32  IN  THIS  CITY  OR  ANOTHER  CITY  WITHIN THE UNITED STATES OR A FOREIGN
   33  NATION OR SOME COMBINATION THEREOF ON  A  TAX  BASE  THAT  INCLUDED  THE
   34  ROYALTY  PAYMENT  PAID,  ACCRUED  OR  INCURRED BY THE TAXPAYER; (II) THE
   35  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
   36  ACCRUED OR INCURRED SUCH PORTION TO A  PERSON  THAT  IS  NOT  A  RELATED
   37  MEMBER;  AND  (III)  THE  TRANSACTION GIVING RISE TO THE ROYALTY PAYMENT
   38  BETWEEN THE TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR  A  VALID
   39  BUSINESS PURPOSE.
   40    (II)  THE  ADJUSTMENT  REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF
   41  THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF  THE  TYPE
   42  AND  IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE
   43  RELATED MEMBER WAS SUBJECT TO TAX ON OR MEASURED BY ITS  NET  INCOME  IN
   44  THIS  CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME COMBINATION
   45  THEREOF; (II) THE TAX BASE FOR SAID TAX  INCLUDED  THE  ROYALTY  PAYMENT
   46  PAID,  ACCRUED  OR  INCURRED  BY  THE  TAXPAYER; AND (III) THE AGGREGATE
   47  EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN  THOSE  JURISDIC-
   48  TIONS  IS  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
   49  APPLIED TO THE TAXPAYER UNDER SECTION 11-503 OF  THIS  CHAPTER  FOR  THE
   50  TAXABLE YEAR.
   51    (III)  THE  ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF
   52  THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF  THE  TYPE
   53  AND  IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE
   54  ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN-
   55  IZED UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II)  THE
   56  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
       S. 2609--D                         38                         A. 3009--D

    1  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
    2  THE  RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE
    3  THAT INCLUDED THE ROYALTY PAYMENT  PAID,  ACCRUED  OR  INCURRED  BY  THE
    4  TAXPAYER;  (IV)  THE  RELATED  MEMBER'S  INCOME FROM THE TRANSACTION WAS
    5  TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT
    6  IMPOSED BY THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID,  ACCRUED  OR
    7  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
    8  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
    9    (IV)  THE  ADJUSTMENT  REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF
   10  THE TAXPAYER AND THE COMMISSIONER OF FINANCE AGREE  IN  WRITING  TO  THE
   11  APPLICATION  OR  USE  OF  ALTERNATIVE  ADJUSTMENTS  OR COMPUTATIONS. THE
   12  COMMISSIONER OF FINANCE MAY, IN HIS OR  HER  DISCRETION,  AGREE  TO  THE
   13  APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN HE OR
   14  SHE  CONCLUDES  THAT  IN THE ABSENCE OF SUCH AGREEMENT THE INCOME OF THE
   15  TAXPAYER WOULD NOT BE PROPERLY REFLECTED.
   16    S 10. Paragraph (n) of subdivision 8 of section 11-602 of the adminis-
   17  trative code of the city of New York, as amended by section 19 of part M
   18  of chapter 686 of the laws of 2003, is amended to read as follows:
   19    (n) Related members expense add back  [and  income  exclusion].    (1)
   20  Definitions.  (A) Related member [or members. For purposes of this para-
   21  graph, the term related member or members means a  person,  corporation,
   22  or other entity, including an entity that is treated as a partnership or
   23  other  pass-through  vehicle  for  purposes of federal taxation, whether
   24  such person, corporation or entity is a taxpayer or not, where one  such
   25  person,  corporation, or entity, or set of related persons, corporations
   26  or entities, directly or  indirectly  owns  or  controls  a  controlling
   27  interest  in  another  entity.  Such  entity or entities may include all
   28  taxpayers under this title]. "RELATED MEMBER" MEANS A RELATED PERSON  AS
   29  DEFINED  IN  SUBPARAGRAPH  (C)  OF  PARAGRAPH THREE OF SUBSECTION (B) OF
   30  SECTION FOUR HUNDRED SIXTY-FIVE OF THE  INTERNAL  REVENUE  CODE,  EXCEPT
   31  THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT".
   32    (B)  [Controlling  interest.  A controlling interest shall mean (i) in
   33  the case of a corporation, either thirty percent or more  of  the  total
   34  combined  voting  power  of all classes of stock of such corporation, or
   35  thirty percent or more of the capital, profits or beneficial interest in
   36  such voting stock of such corporation, and (ii) in the case of  a  part-
   37  nership,  association,  trust or other entity, thirty percent or more of
   38  the capital, profits or beneficial interest in such partnership, associ-
   39  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   40  TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY
   41  THE CITY ON OR MEASURED BY A RELATED MEMBER'S NET INCOME  MULTIPLIED  BY
   42  THE  APPORTIONMENT  PERCENTAGE, IF ANY, APPLICABLE TO THE RELATED MEMBER
   43  UNDER THE LAWS OF SAID JURISDICTION. FOR PURPOSES  OF  THIS  DEFINITION,
   44  THE  EFFECTIVE  RATE  OF  TAX  AS  TO ANY CITY IS ZERO WHERE THE RELATED
   45  MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON A COMBINED
   46  OR CONSOLIDATED RETURN INCLUDING  BOTH  THE  TAXPAYER  AND  THE  RELATED
   47  MEMBER  WHERE  THE  REPORTED  TRANSACTIONS  BETWEEN THE TAXPAYER AND THE
   48  RELATED MEMBER ARE ELIMINATED OR OFFSET.  ALSO,  FOR  PURPOSES  OF  THIS
   49  DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH
   50  A  RELATED  MEMBER'S  NET  INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR
   51  SIMILAR ADJUSTMENT THAT IS DEPENDENT  UPON  THE  RELATED  MEMBER  EITHER
   52  MAINTAINING  OR  MANAGING  INTANGIBLE  PROPERTY  OR  COLLECTING INTEREST
   53  INCOME IN THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED  BY  SAID
   54  CITY  SHALL  BE  DECREASED  TO  REFLECT  THE  STATUTORY RATE OF TAX THAT
   55  APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH  CREDIT  OR
   56  SIMILAR ADJUSTMENT.
       S. 2609--D                         39                         A. 3009--D

    1    (C) Royalty payments. Royalty payments are payments directly connected
    2  to  the  acquisition,  use,  maintenance or management, ownership, sale,
    3  exchange, or any other disposition of licenses, trademarks,  copyrights,
    4  trade  names,  trade  dress,  service  marks, mask works, trade secrets,
    5  patents  and  any other similar types of intangible assets as determined
    6  by the commissioner of finance, and [includes] INCLUDE amounts allowable
    7  as interest deductions under section  one  hundred  sixty-three  of  the
    8  internal  revenue  code to the extent such amounts are directly or indi-
    9  rectly for, related to or in connection with the acquisition, use, main-
   10  tenance or management, ownership, sale, exchange or disposition of  such
   11  intangible assets.
   12    (D)  Valid  business  purpose. A valid business purpose is one or more
   13  business purposes, other than the avoidance or  reduction  of  taxation,
   14  which alone or in combination constitute the primary motivation for some
   15  business  activity or transaction, which activity or transaction changes
   16  in a meaningful way, apart from tax effects, the  economic  position  of
   17  the taxpayer. The economic position of the taxpayer includes an increase
   18  in  the  market share of the taxpayer, or the entry by the taxpayer into
   19  new business markets.
   20    (2) Royalty expense add backs. (A) For the purpose of computing entire
   21  net income or other applicable taxable basis, a taxpayer must  add  back
   22  royalty  payments  [to  a]  DIRECTLY  OR  INDIRECTLY  PAID,  ACCRUED, OR
   23  INCURRED IN CONNECTION WITH ONE OR MORE DIRECT OR INDIRECT  TRANSACTIONS
   24  WITH ONE OR MORE related [member] MEMBERS during the taxable year to the
   25  extent deductible in calculating federal taxable income.
   26    (B)  [The add back of royalty payments shall not be required if and to
   27  the extent that such payments meet either of the following conditions:
   28    (i) the related member during the same taxable year directly or  indi-
   29  rectly  paid  or incurred the amount to a person or entity that is not a
   30  related member, and such transaction  was  done  for  a  valid  business
   31  purpose and the payments are made at arm's length;
   32    (ii)  the  royalty  payments  are paid or incurred to a related member
   33  organized under the laws of a country other than the United States,  are
   34  subject  to  a  comprehensive income tax treaty between such country and
   35  the United States, and are taxed in such country at a tax rate at  least
   36  equal to that imposed by this state.
   37    (3) Royalty income exclusions. For the purpose of computing entire net
   38  income  or  other  taxable  basis, a taxpayer shall be allowed to deduct
   39  royalty payments directly or indirectly received from a  related  member
   40  during the taxable year to the extent included in the taxpayer's federal
   41  taxable  income unless such royalty payments would not be required to be
   42  added back under subparagraph two of this  paragraph  or  other  similar
   43  provision  in  this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN
   44  THIS PARAGRAPH SHALL NOT APPLY TO THE PORTION  OF  THE  ROYALTY  PAYMENT
   45  THAT  THE  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE
   46  TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, MEETS ALL
   47  OF THE FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX
   48  IN THIS CITY OR ANOTHER CITY WITHIN  THE  UNITED  STATES  OR  A  FOREIGN
   49  NATION  OR  SOME  COMBINATION  THEREOF  ON  A TAX BASE THAT INCLUDED THE
   50  ROYALTY PAYMENT PAID, ACCRUED OR INCURRED  BY  THE  TAXPAYER;  (II)  THE
   51  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
   52  ACCRUED  OR  INCURRED  SUCH  PORTION  TO  A PERSON THAT IS NOT A RELATED
   53  MEMBER; AND (III) THE TRANSACTION GIVING RISE  TO  THE  ROYALTY  PAYMENT
   54  BETWEEN  THE  TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID
   55  BUSINESS PURPOSE.
       S. 2609--D                         40                         A. 3009--D

    1    (II) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF  THE
    2  TAXPAYER  ESTABLISHES,  BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
    3  IN THE FORM SPECIFIED BY THE COMMISSIONER  OF  FINANCE,  THAT:  (I)  THE
    4  RELATED  MEMBER  WAS  SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN
    5  THIS  CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME COMBINATION
    6  THEREOF; (II) THE TAX BASE FOR SAID TAX  INCLUDED  THE  ROYALTY  PAYMENT
    7  PAID,  ACCRUED  OR  INCURRED  BY  THE  TAXPAYER; AND (III) THE AGGREGATE
    8  EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN  THOSE  JURISDIC-
    9  TIONS  IS  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
   10  APPLIED TO THE TAXPAYER UNDER SECTION 11-604 OF THIS SUBCHAPTER FOR  THE
   11  TAXABLE YEAR.
   12    (III) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   13  TAXPAYER  ESTABLISHES,  BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
   14  IN THE FORM SPECIFIED BY THE COMMISSIONER  OF  FINANCE,  THAT:  (I)  THE
   15  ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN-
   16  IZED  UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE
   17  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
   18  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
   19  THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX  BASE
   20  THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,  ACCRUED OR INCURRED BY THE
   21  TAXPAYER; (IV) THE RELATED MEMBER'S  INCOME  FROM  THE  TRANSACTION  WAS
   22  TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT
   23  IMPOSED  BY  THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR
   24  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
   25  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   26    (IV) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF  THE
   27  TAXPAYER  AND THE COMMISSIONER OF FINANCE AGREE IN WRITING TO THE APPLI-
   28  CATION OR USE OF ALTERNATIVE ADJUSTMENTS OR  COMPUTATIONS.  THE  COMMIS-
   29  SIONER  OF  FINANCE MAY, IN HIS OR HER DISCRETION, AGREE TO THE APPLICA-
   30  TION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN  HE  OR  SHE
   31  CONCLUDES  THAT  IN  THE  ABSENCE  OF  SUCH  AGREEMENT THE INCOME OF THE
   32  TAXPAYER WOULD NOT BE PROPERLY REFLECTED.
   33    S 11. Subdivision (q) of section 11-641 of the administrative code  of
   34  the city of New York, as added by section 21 of part M of chapter 686 of
   35  the laws of 2003, is amended to read as follows:
   36    (q)  Related  members  expense  add back [and income exclusion].   (1)
   37  Definitions. (A) Related member [or members. For purposes of this subdi-
   38  vision, the term related member or members means a person,  corporation,
   39  or other entity, including an entity that is treated as a partnership or
   40  other  pass-through  vehicle  for  purposes of federal taxation, whether
   41  such person, corporation or entity is a taxpayer or not, where one  such
   42  person,  corporation, or entity, or set of related persons, corporations
   43  or entities, directly or  indirectly  owns  or  controls  a  controlling
   44  interest  in  another  entity.  Such  entity or entities may include all
   45  taxpayers under this title].  "RELATED MEMBER" MEANS A RELATED PERSON AS
   46  DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH  THREE  OF  SUBSECTION  (B)  OF
   47  SECTION  FOUR  HUNDRED  SIXTY-FIVE  OF THE INTERNAL REVENUE CODE, EXCEPT
   48  THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT".
   49    (B) [Controlling interest. A controlling interest shall  mean  (i)  in
   50  the  case  of  a corporation, either thirty percent or more of the total
   51  combined voting power of all classes of stock of  such  corporation,  or
   52  thirty percent or more of the capital, profits or beneficial interest in
   53  such  voting  stock of such corporation, and (ii) in the case of a part-
   54  nership, association, trust or other entity, thirty percent or  more  of
   55  the capital, profits or beneficial interest in such partnership, associ-
   56  ation,  trust  or other entity.] EFFECTIVE RATE OF TAX.  "EFFECTIVE RATE
       S. 2609--D                         41                         A. 3009--D

    1  OF TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED
    2  BY THE CITY ON OR MEASURED BY A RELATED MEMBER'S NET  INCOME  MULTIPLIED
    3  BY  THE  APPORTIONMENT  PERCENTAGE,  IF  ANY,  APPLICABLE TO THE RELATED
    4  MEMBER  UNDER  THE LAWS OF SAID JURISDICTION. FOR PURPOSES OF THIS DEFI-
    5  NITION, THE EFFECTIVE RATE OF TAX AS TO  ANY  CITY  IS  ZERO  WHERE  THE
    6  RELATED  MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON A
    7  COMBINED OR CONSOLIDATED RETURN INCLUDING  BOTH  THE  TAXPAYER  AND  THE
    8  RELATED  MEMBER WHERE THE REPORTED TRANSACTIONS BETWEEN THE TAXPAYER AND
    9  THE RELATED MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF  THIS
   10  DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH
   11  A  RELATED  MEMBER'S  NET  INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR
   12  SIMILAR ADJUSTMENT THAT IS DEPENDENT  UPON  THE  RELATED  MEMBER  EITHER
   13  MAINTAINING  OR  MANAGING  INTANGIBLE  PROPERTY  OR  COLLECTING INTEREST
   14  INCOME IN THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED  BY  SAID
   15  CITY  SHALL  BE  DECREASED  TO  REFLECT  THE  STATUTORY RATE OF TAX THAT
   16  APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH  CREDIT  OR
   17  SIMILAR ADJUSTMENT.
   18    (C) Royalty payments. Royalty payments are payments directly connected
   19  to  the  acquisition,  use,  maintenance or management, ownership, sale,
   20  exchange, or any other disposition of licenses, trademarks,  copyrights,
   21  trade  names,  trade  dress,  service  marks, mask works, trade secrets,
   22  patents and any other similar types of intangible assets  as  determined
   23  by the commissioner of finance, and [includes] INCLUDE amounts allowable
   24  as  interest  deductions  under  section  one hundred sixty-three of the
   25  internal revenue code to the extent such amounts are directly  or  indi-
   26  rectly for, related to or in connection with the acquisition, use, main-
   27  tenance  or management, ownership, sale, exchange or disposition of such
   28  intangible assets.
   29    (D) Valid business purpose. A valid business purpose is  one  or  more
   30  business  purposes,  other  than the avoidance or reduction of taxation,
   31  which alone or in combination constitute the primary motivation for some
   32  business activity or transaction, which activity or transaction  changes
   33  in  a  meaningful  way, apart from tax effects, the economic position of
   34  the taxpayer. The economic position of the taxpayer includes an increase
   35  in the market share of the taxpayer, or the entry by the  taxpayer  into
   36  new business markets.
   37    (2) Royalty expense add backs. (A) For the purpose of computing entire
   38  net income, a taxpayer must add back royalty payments [to a] DIRECTLY OR
   39  INDIRECTLY  PAID,  ACCRUED,  OR  INCURRED IN CONNECTION WITH ONE OR MORE
   40  DIRECT OR INDIRECT  TRANSACTIONS  WITH  ONE  OR  MORE  related  [member]
   41  MEMBERS  during the taxable year to the extent deductible in calculating
   42  federal taxable income.
   43    (B) [The add back of royalty payments shall not be required if and  to
   44  the extent that such payments meet either of the following conditions:
   45    (i)  the related member during the same taxable year directly or indi-
   46  rectly paid or incurred the amount to a person or entity that is  not  a
   47  related  member,  and such transaction was done for a valid business and
   48  the payments are made at arm's length;
   49    (ii) the royalty payments are paid or incurred  to  a  related  member
   50  organized  under the laws of a country other than the United States, are
   51  subject to a comprehensive income tax treaty between  such  country  and
   52  the  United States, and are taxed in such country at a tax rate at least
   53  equal to that imposed by this state.
   54    (3) Royalty income exclusions. For the purpose of computing entire net
   55  income, a taxpayer shall be allowed to deduct royalty payments  directly
   56  or  indirectly received from a related member during the taxable year to
       S. 2609--D                         42                         A. 3009--D

    1  the extent included in the taxpayer's federal taxable income unless such
    2  royalty payments would not be required to be added back under  paragraph
    3  two  of  this  subdivision  or other similar provision in this chapter.]
    4  EXCEPTIONS.  (I)  THE  ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT
    5  APPLY TO THE PORTION OF THE ROYALTY PAYMENT  THAT  THE  TAXPAYER  ESTAB-
    6  LISHES,  BY  CLEAR  AND  CONVINCING EVIDENCE OF THE TYPE AND IN THE FORM
    7  SPECIFIED BY THE COMMISSIONER OF FINANCE, MEETS  ALL  OF  THE  FOLLOWING
    8  REQUIREMENTS:  (I) THE RELATED MEMBER WAS SUBJECT TO TAX IN THIS CITY OR
    9  ANOTHER CITY WITHIN THE UNITED STATES OR A FOREIGN NATION OR SOME COMBI-
   10  NATION THEREOF ON A TAX BASE THAT INCLUDED  THE  ROYALTY  PAYMENT  PAID,
   11  ACCRUED  OR INCURRED BY THE TAXPAYER; (II) THE RELATED MEMBER DURING THE
   12  SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, ACCRUED OR INCURRED  SUCH
   13  PORTION  TO  A PERSON THAT IS NOT A RELATED MEMBER; AND (III) THE TRANS-
   14  ACTION GIVING RISE TO THE ROYALTY PAYMENT BETWEEN THE TAXPAYER  AND  THE
   15  RELATED MEMBER WAS UNDERTAKEN FOR A VALID BUSINESS PURPOSE.
   16    (II)  THE  ADJUSTMENT  REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF
   17  THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF  THE  TYPE
   18  AND  IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE
   19  RELATED MEMBER WAS SUBJECT TO TAX ON OR MEASURED BY ITS  NET  INCOME  IN
   20  THIS  CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME COMBINATION
   21  THEREOF; (II) THE TAX BASE FOR SAID TAX  INCLUDED  THE  ROYALTY  PAYMENT
   22  PAID,  ACCRUED  OR  INCURRED  BY  THE  TAXPAYER; AND (III) THE AGGREGATE
   23  EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN  THOSE  JURISDIC-
   24  TIONS  IS  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
   25  APPLIED TO THE TAXPAYER UNDER SECTION 11-643.5  OF  THIS  PART  FOR  THE
   26  TAXABLE YEAR.
   27    (III)  THE  ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF
   28  THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF  THE  TYPE
   29  AND  IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE
   30  ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN-
   31  IZED UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II)  THE
   32  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
   33  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
   34  THE  RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE
   35  THAT INCLUDED THE ROYALTY PAYMENT  PAID,  ACCRUED  OR  INCURRED  BY  THE
   36  TAXPAYER;  (IV)  THE  RELATED  MEMBER'S  INCOME FROM THE TRANSACTION WAS
   37  TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT
   38  IMPOSED BY THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID,  ACCRUED  OR
   39  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
   40  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   41    (IV)  THE  ADJUSTMENT  REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF
   42  THE TAXPAYER AND THE COMMISSIONER OF FINANCE AGREE  IN  WRITING  TO  THE
   43  APPLICATION  OR  USE  OF  ALTERNATIVE  ADJUSTMENTS  OR COMPUTATIONS. THE
   44  COMMISSIONER OF FINANCE MAY, IN HIS OR  HER  DISCRETION,  AGREE  TO  THE
   45  APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN HE OR
   46  SHE  CONCLUDES  THAT  IN THE ABSENCE OF SUCH AGREEMENT THE INCOME OF THE
   47  TAXPAYER WOULD NOT BE PROPERLY REFLECTED.
   48    S 12. Subdivision (t) of section 11-1712 of the administrative code of
   49  the city of New York, as added by section 26 of part M of chapter 686 of
   50  the laws of 2003, is amended to read as follows:
   51    (t) Related members expense add back  [and  income  exclusion].    (1)
   52  Definitions. (A) Related member [or members. For purposes of this subdi-
   53  vision,  the term related member or members means a person, corporation,
   54  or other entity, including an entity that is treated as a partnership or
   55  other pass-through vehicle for purposes  of  federal  taxation,  whether
   56  such  person, corporation or entity is a taxpayer or not, where one such
       S. 2609--D                         43                         A. 3009--D

    1  person, corporation or entity, or set of related  persons,  corporations
    2  or  entities,  directly  or  indirectly  owns  or controls a controlling
    3  interest in another entity. Such entity  or  entities  may  include  all
    4  taxpayers under this title].  "RELATED MEMBER" MEANS A RELATED PERSON AS
    5  DEFINED  IN  SUBPARAGRAPH  (C)  OF  PARAGRAPH THREE OF SUBSECTION (B) OF
    6  SECTION FOUR HUNDRED SIXTY-FIVE OF THE  INTERNAL  REVENUE  CODE,  EXCEPT
    7  THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT".
    8    (B)  [Controlling  interest.  A controlling interest shall mean (i) in
    9  the case of a corporation, either thirty percent or more  of  the  total
   10  combined  voting  power  of all classes of stock of such corporation, or
   11  thirty percent or more of the capital, profits or beneficial interest in
   12  such voting stock of such corporation, and (ii) in the case of  a  part-
   13  nership,  association,  trust or other entity, thirty percent or more of
   14  the capital, profits or beneficial interest in such partnership, associ-
   15  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   16  TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY
   17  THE CITY ON OR MEASURED BY A RELATED MEMBER'S NET INCOME  MULTIPLIED  BY
   18  THE  APPORTIONMENT  PERCENTAGE, IF ANY, APPLICABLE TO THE RELATED MEMBER
   19  UNDER THE LAWS OF SAID JURISDICTION. FOR PURPOSES  OF  THIS  DEFINITION,
   20  THE  EFFECTIVE  RATE  OF  TAX  AS  TO ANY CITY IS ZERO WHERE THE RELATED
   21  MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON A COMBINED
   22  OR CONSOLIDATED RETURN INCLUDING  BOTH  THE  TAXPAYER  AND  THE  RELATED
   23  MEMBER  WHERE  THE  REPORTED  TRANSACTIONS  BETWEEN THE TAXPAYER AND THE
   24  RELATED MEMBER ARE ELIMINATED OR OFFSET.  ALSO,  FOR  PURPOSES  OF  THIS
   25  DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH
   26  A  RELATED  MEMBER'S  NET  INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR
   27  SIMILAR ADJUSTMENT THAT IS DEPENDENT  UPON  THE  RELATED  MEMBER  EITHER
   28  MAINTAINING  OR  MANAGING  INTANGIBLE  PROPERTY  OR  COLLECTING INTEREST
   29  INCOME IN THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED  BY  SAID
   30  CITY  SHALL  BE  DECREASED  TO  REFLECT  THE  STATUTORY RATE OF TAX THAT
   31  APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH  CREDIT  OR
   32  SIMILAR ADJUSTMENT.
   33    (C) Royalty payments. Royalty payments are payments directly connected
   34  to  the  acquisition,  use,  maintenance or management, ownership, sale,
   35  exchange, or any other disposition of licenses, trademarks,  copyrights,
   36  trade  names,  trade  dress,  service  marks, mask works, trade secrets,
   37  patents and any other similar types of intangible assets  as  determined
   38  by  the  state  commissioner  of  taxation  and  finance, and [includes]
   39  INCLUDE amounts allowable  as  interest  deductions  under  section  one
   40  hundred  sixty-three  of  the  internal  revenue code to the extent such
   41  amounts are directly or indirectly for, related to or in connection with
   42  the  acquisition,  use,  maintenance  or  management,  ownership,  sale,
   43  exchange or disposition of such intangible assets.
   44    (D)  Valid  business  purpose. A valid business purpose is one or more
   45  business purposes, other than the avoidance or  reduction  of  taxation,
   46  which alone or in combination constitute the primary motivation for some
   47  business  activity or transaction, which activity or transaction changes
   48  in a meaningful way, apart from tax effects, the  economic  position  of
   49  the taxpayer. The economic position of the taxpayer includes an increase
   50  in  the  market share of the taxpayer, or the entry by the taxpayer into
   51  new business markets.
   52    (2) Royalty expense add backs. (A) For the purpose of  computing  city
   53  adjusted  gross income, a taxpayer must add back royalty payments [to a]
   54  DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION WITH ONE
   55  OR MORE DIRECT  OR  INDIRECT  TRANSACTIONS  WITH  ONE  OR  MORE  related
       S. 2609--D                         44                         A. 3009--D

    1  [member]  MEMBERS  during  the  taxable year to the extent deductible in
    2  calculating federal taxable income.
    3    (B)  [The add back of royalty payments shall not be required if and to
    4  the extent that such payments meet either of the following conditions:
    5    (i) the related member during the same taxable year directly or  indi-
    6  rectly  paid  or incurred the amount to a person or entity that is not a
    7  related member, and such transaction was done for a valid  business  and
    8  the payments are made at arm's length;
    9    (ii)  the  royalty  payments  are paid or incurred to a related member
   10  organized under the laws of a country other than the United States,  are
   11  subject  to  a  comprehensive income tax treaty between such country and
   12  the United States, and are taxed in such country at a tax rate at  least
   13  equal to that imposed by this state.
   14    (3)  Royalty  income exclusions. (A) For the purpose of computing city
   15  adjusted gross income, a taxpayer shall be  allowed  to  deduct  royalty
   16  payments  directly  or  indirectly received from a related member during
   17  the taxable year to the extent included in the taxpayer's federal  taxa-
   18  ble  income  unless  such  royalty  payments would not be required to be
   19  added back under paragraph two of  this  subdivision  or  other  similar
   20  provision  in  this title.] EXCEPTIONS.   (I) THE ADJUSTMENT REQUIRED IN
   21  THIS SUBDIVISION SHALL NOT APPLY TO THE PORTION OF THE  ROYALTY  PAYMENT
   22  THAT  THE  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE
   23  TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, MEETS ALL
   24  OF THE FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX
   25  IN THIS CITY OR ANOTHER CITY WITHIN  THE  UNITED  STATES  OR  A  FOREIGN
   26  NATION  OR  SOME  COMBINATION  THEREOF  ON  A TAX BASE THAT INCLUDED THE
   27  ROYALTY PAYMENT PAID, ACCRUED OR INCURRED  BY  THE  TAXPAYER;  (II)  THE
   28  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
   29  ACCRUED  OR  INCURRED  SUCH  PORTION  TO  A PERSON THAT IS NOT A RELATED
   30  MEMBER; AND (III) THE TRANSACTION GIVING RISE  TO  THE  ROYALTY  PAYMENT
   31  BETWEEN  THE  TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID
   32  BUSINESS PURPOSE.
   33    (II) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL  NOT  APPLY  IF
   34  THE  TAXPAYER  ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE
   35  AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I)  THE
   36  RELATED  MEMBER  WAS  SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN
   37  THIS CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME  COMBINATION
   38  THEREOF;  (II)  THE  TAX BASE FOR SAID TAX  INCLUDED THE ROYALTY PAYMENT
   39  PAID, ACCRUED OR INCURRED BY  THE  TAXPAYER;  AND  (III)  THE  AGGREGATE
   40  EFFECTIVE  RATE  OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC-
   41  TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF  TAX  THAT
   42  APPLIED  TO  THE  TAXPAYER UNDER SECTION 11-1701 OF THIS CHAPTER FOR THE
   43  TAXABLE YEAR.
   44    (III) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT  APPLY  IF
   45  THE  TAXPAYER  ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE
   46  AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I)  THE
   47  ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN-
   48  IZED  UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE
   49  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
   50  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
   51  THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX  BASE
   52  THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,  ACCRUED OR INCURRED BY THE
   53  TAXPAYER; (IV) THE RELATED MEMBER'S  INCOME  FROM  THE  TRANSACTION  WAS
   54  TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT
   55  IMPOSED  BY  THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR
       S. 2609--D                         45                         A. 3009--D

    1  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
    2  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
    3    (IV)  THE  ADJUSTMENT  REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF
    4  THE TAXPAYER AND THE COMMISSIONER OF FINANCE AGREE  IN  WRITING  TO  THE
    5  APPLICATION  OR  USE  OF  ALTERNATIVE  ADJUSTMENTS  OR COMPUTATIONS. THE
    6  COMMISSIONER OF FINANCE MAY, IN HIS OR  HER  DISCRETION,  AGREE  TO  THE
    7  APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN HE OR
    8  SHE  CONCLUDES  THAT  IN THE ABSENCE OF SUCH AGREEMENT THE INCOME OF THE
    9  TAXPAYER WOULD NOT BE PROPERLY REFLECTED.
   10    S 13. This act shall take effect immediately and shall apply to  taxa-
   11  ble years beginning on or after January 1, 2013.

   12                                   PART F

   13    Section 1. Subparagraph (A) of paragraph 1,  and paragraphs 4 and 5 of
   14  subsection (oo) of section 606 of the tax law, subparagraph (A) of para-
   15  graph 1 as amended by chapter 472 of the laws of 2010 and paragraph 4 as
   16  amended and paragraph 5 as added by chapter 239 of the laws of 2009, are
   17  amended to read as follows:
   18    (A)  For  taxable years beginning on or after January first, two thou-
   19  sand ten and before January first,  two  thousand  [fifteen]  TWENTY,  a
   20  taxpayer  shall be allowed a credit as hereinafter provided, against the
   21  tax imposed by this article, in an amount equal to one  hundred  percent
   22  of the amount of credit allowed the taxpayer with respect to a certified
   23  historic structure under subsection (a) (2) of section 47 of the federal
   24  internal  revenue  code  with  respect to a certified historic structure
   25  located within the state. Provided, however, the credit shall not exceed
   26  five million dollars. For taxable years beginning on  or  after  January
   27  first,  two  thousand  [fifteen]  TWENTY,  a taxpayer shall be allowed a
   28  credit as hereinafter provided, against the tax imposed by this article,
   29  in an amount equal to thirty percent of the amount of credit allowed the
   30  taxpayer with respect to a certified historic structure under subsection
   31  (a)(2) of section 47 of the federal internal revenue code  with  respect
   32  to  a  certified  historic structure located within the state; provided,
   33  however, the credit shall not exceed one hundred thousand dollars.
   34    (4) If the amount of the credit [allowable under this  subsection  for
   35  any  taxable  year  shall  exceed  the taxpayer's tax for such year, the
   36  excess may be carried over to the following year or years,  and  may  be
   37  applied against the taxpayer's tax for such year or years] ALLOWED UNDER
   38  THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR
   39  SUCH  YEAR,  THE  EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE
   40  CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS  OF  SECTION  SIX
   41  HUNDRED  EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST
   42  SHALL BE PAID THEREON.
   43    (5) To be eligible for the credit allowable under this subsection  the
   44  rehabilitation  project  shall  be  in whole or in part [a targeted area
   45  residence within the meaning of section 143(j) of the  internal  revenue
   46  code  or]  located within a census tract which is identified as being at
   47  or below one hundred percent of the state median family income  [in  the
   48  most  recent  federal  census] AS CALCULATED AS OF JANUARY FIRST OF EACH
   49  YEAR USING THE MOST RECENT FIVE YEAR ESTIMATE FROM THE AMERICAN COMMUNI-
   50  TY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU.
   51    S 2. Subparagraph (A) of paragraph 1, and paragraphs 4 and 5 of subdi-
   52  vision 40 of section 210 of the tax law, subparagraph (A) of paragraph 1
   53  and paragraph 4 as amended and paragraph 5 as added by  chapter  472  of
   54  the laws of 2010, are amended to read as follows:
       S. 2609--D                         46                         A. 3009--D

    1    (A)  For  taxable years beginning on or after January first, two thou-
    2  sand ten and before January first,  two  thousand  [fifteen]  TWENTY,  a
    3  taxpayer  shall be allowed a credit as hereinafter provided, against the
    4  tax imposed by this article, in an amount equal to one  hundred  percent
    5  of the amount of credit allowed the taxpayer with respect to a certified
    6  historic structure under subsection (a) (2) of section 47 of the federal
    7  internal  revenue  code  with  respect to a certified historic structure
    8  located within the state. Provided, however, the credit shall not exceed
    9  five million dollars. For taxable years beginning on  or  after  January
   10  first,  two  thousand  [fifteen]  TWENTY,  a taxpayer shall be allowed a
   11  credit as hereinafter provided, against the tax imposed by this article,
   12  in an amount equal to thirty percent of the amount of credit allowed the
   13  taxpayer with respect to a certified historic structure under subsection
   14  (a)(2) of section 47 of the federal internal revenue code  with  respect
   15  to  a  certified  historic structure located within the state. Provided,
   16  however, the credit shall not exceed one hundred thousand dollars.
   17    (4) The credit allowed under this subdivision  for  any  taxable  year
   18  shall  not  reduce  the tax due for such year to less than the higher of
   19  the amounts prescribed in paragraphs (c) and (d) of subdivision  one  of
   20  this section. However, if the amount of the credit [allowable under this
   21  subdivision  for  any  taxable  year shall exceed the taxpayer's tax for
   22  such year, the excess may be carried  over  to  the  following  year  or
   23  years,  and  may  be  deducted  from the taxpayer's tax for such year or
   24  years] ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR  REDUCES  THE
   25  TAX  TO  SUCH  AMOUNT,  ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH
   26  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
   27  REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
   28  EIGHTY-SIX  OF  THIS  CHAPTER.    PROVIDED,  HOWEVER,  THE PROVISIONS OF
   29  SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
   30  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   31    (5)  To  be  eligible for the credit allowable under this subdivision,
   32  the rehabilitation project shall be in whole or in part [a targeted area
   33  residence within the meaning of section 143(j) of the  internal  revenue
   34  code  or]  located within a census tract which is identified as being at
   35  or below one hundred percent of the state median family income  [in  the
   36  most  recent  federal  census] AS CALCULATED AS OF JANUARY FIRST OF EACH
   37  YEAR USING THE MOST RECENT FIVE YEAR ESTIMATE FROM THE AMERICAN COMMUNI-
   38  TY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU.
   39    S 3. Subparagraph (A) of paragraph  1,  and  paragraphs  4  and  5  of
   40  subsection  (u)  of section 1456 of the tax law, as added by chapter 472
   41  of the laws of 2010, are amended to read as follows:
   42    (A) For taxable years beginning on or after January first,  two  thou-
   43  sand  ten  and  before  January  first, two thousand [fifteen] TWENTY, a
   44  taxpayer shall be allowed a credit as hereinafter provided, against  the
   45  tax  imposed  by this article, in an amount equal to one hundred percent
   46  of the amount of credit allowed the taxpayer with respect to a certified
   47  historic structure under subsection (a)(2) of section 47 of the  federal
   48  internal  revenue  code  with  respect to a certified historic structure
   49  located within the state. Provided, however, the credit shall not exceed
   50  five million dollars. For taxable years beginning on  or  after  January
   51  first,  two  thousand  [fifteen]  TWENTY,  a taxpayer shall be allowed a
   52  credit as hereinafter provided, against the tax imposed by this article,
   53  in an amount equal to thirty percent of the amount of credit allowed the
   54  taxpayer with respect to a certified historic structure under subsection
   55  (a)(2) of section 47 of the federal internal revenue code  with  respect
       S. 2609--D                         47                         A. 3009--D

    1  to  a  certified  historic structure located within the state. Provided,
    2  however, the credit shall not exceed one hundred thousand dollars.
    3    (4)  The  credit  allowed  under  this subsection for any taxable year
    4  shall not reduce the tax to less than the dollar amount fixed as a mini-
    5  mum tax by subsection (b) of section fourteen hundred fifty-five of this
    6  article. [If the amount of credit allowable under  this  subsection  for
    7  any  taxable  year  reduces  the  tax  to such amount, the excess may be
    8  carried over to the following year or years, and may  be  deducted  from
    9  the  taxpayer's  tax  for such year or years.] HOWEVER, IF THE AMOUNT OF
   10  CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE  YEAR  REDUCES  THE
   11  TAX  TO  SUCH  AMOUNT,  ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH
   12  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
   13  REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
   14  EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
   15  SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
   16  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   17    (5)  To be eligible for the credit allowable under this subsection the
   18  rehabilitation project shall be in whole or in  part  [a  targeted  area
   19  residence  within  the meaning of section 143(j) of the internal revenue
   20  code or] located within a census tract which is identified as  being  at
   21  or  below  one hundred percent of the state median family income [in the
   22  most recent federal census] AS CALCULATED AS OF JANUARY  FIRST  OF  EACH
   23  YEAR USING THE MOST RECENT FIVE YEAR ESTIMATE FROM THE AMERICAN COMMUNI-
   24  TY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU.
   25    S 4. Subparagraph (A) of paragraph 1, and paragraphs 4 and 5 of subdi-
   26  vision  (y)  of  section 1511 of the tax law, as added by chapter 472 of
   27  the laws of 2010, are amended to read as follows:
   28    (A) For taxable years beginning on or after January first,  two  thou-
   29  sand  ten  and  before  January  first, two thousand [fifteen] TWENTY, a
   30  taxpayer shall be allowed a credit as hereinafter provided, against  the
   31  tax  imposed  by this article, in an amount equal to one hundred percent
   32  of the amount of credit allowed the taxpayer with respect to a certified
   33  historic structure under subsection (a)(2) of section 47 of the  federal
   34  internal  revenue  code  with  respect to a certified historic structure
   35  located within the state. Provided, however, the credit shall not exceed
   36  five million dollars. For taxable years beginning on  or  after  January
   37  first,  two  thousand  [fifteen]  TWENTY,  a taxpayer shall be allowed a
   38  credit as hereinafter provided, against the tax imposed by this article,
   39  in an amount equal to thirty percent of the amount of credit allowed the
   40  taxpayer with respect to a certified historic structure under subsection
   41  (a)(2) of section 47 of the federal internal revenue code  with  respect
   42  to  a  certified  historic structure located within the state. Provided,
   43  however, the credit shall not exceed one hundred thousand dollars.
   44    (4) The credit allowed under this subdivision  for  any  taxable  year
   45  shall  not  reduce  the  tax  due for such year to less than the minimum
   46  fixed by paragraph four of subdivision (a) of  section  fifteen  hundred
   47  two  or  section  fifteen  hundred  two-a  of this article, whichever is
   48  applicable.  [If the amount of the credit allowable under this  subdivi-
   49  sion for any taxable year reduces the tax to such amount, the excess may
   50  be carried over to the following year or years, and may be deducted from
   51  the  taxpayer's  tax  for such year or years.] HOWEVER, IF THE AMOUNT OF
   52  CREDITS ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES  THE
   53  TAX  TO  SUCH  AMOUNT,  ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH
   54  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
   55  REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
   56  EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
       S. 2609--D                         48                         A. 3009--D

    1  SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
    2  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
    3    (5)  To  be  eligible for the credit allowable under this subdivision,
    4  the rehabilitation project shall be in whole or in part [a targeted area
    5  residence within the meaning of section 143(j) of the  internal  revenue
    6  code  or]  located within a census tract which is identified as being at
    7  or below one hundred percent of the state median family income  [in  the
    8  most  recent  federal  census] AS CALCULATED AS OF JANUARY FIRST OF EACH
    9  YEAR USING THE MOST RECENT FIVE YEAR ESTIMATE FROM THE AMERICAN COMMUNI-
   10  TY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU.
   11    S 5. This act shall take effect immediately and shall apply to taxable
   12  years beginning on and after  January  1,  2013;  provided  however  the
   13  amendments  to  paragraph 4 of subsection (oo) of section 606 of the tax
   14  law made by section one of this act, the amendments to  paragraph  4  of
   15  subdivision 40 of section 210 of the tax law made by section two of this
   16  act,  the amendments to paragraph 4 of subsection (u) of section 1456 of
   17  the tax law made by section three of this  act  and  the  amendments  to
   18  paragraph  4  of  subdivision (y) of section 1511 of the tax law made by
   19  section four of this act shall take effect January  1,  2015  and  shall
   20  apply to taxable years beginning on and after January 1, 2015 for quali-
   21  fied rehabilitation placed in service on or after January 1, 2015.

   22                                   PART G

   23    Section  1.  Section 187-b of the tax law, as amended by section 14 of
   24  part W-1 of chapter 109 of the laws of  2006,  is  amended  to  read  as
   25  follows:
   26    S  187-b.  Alternative  fuels [credit] AND ELECTRIC VEHICLE RECHARGING
   27  PROPERTY CREDIT. 1. General. A taxpayer shall be allowed a credit, to be
   28  credited against the taxes imposed under sections  one  hundred  eighty-
   29  three,  one  hundred  eighty-four,  and  one hundred eighty-five of this
   30  article. Such credit, to be computed as hereinafter provided,  shall  be
   31  allowed  for  alternative  fuel  vehicle  refueling AND ELECTRIC VEHICLE
   32  RECHARGING property placed in service during the taxable year. Provided,
   33  however, that the amount  of  such  credit  allowable  against  the  tax
   34  imposed  by section one hundred eighty-four of this article shall be the
   35  excess of the credit allowed by this section over  the  amount  of  such
   36  credit  allowable against the tax imposed by section one hundred eighty-
   37  three of this article.
   38    2. Alternative fuel vehicle refueling property  AND  ELECTRIC  VEHICLE
   39  RECHARGING PROPERTY.  The credit under this section for alternative fuel
   40  vehicle  refueling  AND ELECTRIC VEHICLE RECHARGING property shall equal
   41  FOR EACH INSTALLATION OF PROPERTY THE LESSER OF FIVE THOUSAND DOLLARS OR
   42  fifty percent of the cost of any such property:
   43    (a) which is located in this state; [and]
   44    (b) [for which a credit is allowed  under  section  thirty  C  of  the
   45  internal revenue code but not including alternative fuel vehicle refuel-
   46  ing  property  relating to a qualified hybrid vehicle as such vehicle is
   47  defined in subparagraph (B) of paragraph  three  of  subsection  (p)  of
   48  section  six  hundred six of this chapter] WHICH CONSTITUTES ALTERNATIVE
   49  FUEL VEHICLE REFUELING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY;
   50  AND
   51    (C) FOR WHICH NONE OF THE COST HAS BEEN PAID FOR FROM THE PROCEEDS  OF
   52  GRANTS,  INCLUDING  GRANTS  FROM  THE NEW YORK STATE ENERGY RESEARCH AND
   53  DEVELOPMENT AUTHORITY OR THE NEW YORK POWER AUTHORITY.
       S. 2609--D                         49                         A. 3009--D

    1    3. Definitions. (a) The term "alternative fuel vehicle refueling prop-
    2  erty" MEANS ALL OF THE EQUIPMENT NEEDED TO DISPENSE ANY  FUEL  AT  LEAST
    3  EIGHTY-FIVE  PERCENT  OF  THE VOLUME OF WHICH CONSISTS OF ONE OR MORE OF
    4  THE FOLLOWING: NATURAL GAS, LIQUIFIED NATURAL GAS, LIQUIFIED  PETROLEUM,
    5  OR HYDROGEN.
    6    (B)  THE  TERM  "ELECTRIC VEHICLE RECHARGING PROPERTY" means [any such
    7  property which is qualified within the meaning of section  thirty  C  of
    8  the  internal revenue code, but shall not include alternative fuel vehi-
    9  cle refueling property relating to a qualified hybrid  vehicle  as  such
   10  vehicle  is defined in subparagraph (B) of paragraph three of subsection
   11  (p) of section six hundred six of this chapter] ALL THE EQUIPMENT NEEDED
   12  TO CONVEY ELECTRIC POWER FROM THE ELECTRIC GRID OR ANOTHER POWER  SOURCE
   13  TO AN ONBOARD VEHICLE ENERGY STORAGE SYSTEM.
   14    [(b)  The  term "qualified hybrid vehicle" shall have the same meaning
   15  as provided for under subparagraph (B) of paragraph three of  subsection
   16  (p) of section six hundred six of this chapter.]
   17    4.  Carryovers.  In  no  event  shall the credit under this section be
   18  allowed in an amount which will reduce the tax payable to less than  the
   19  applicable  minimum tax fixed by section one hundred eighty-three or one
   20  hundred eighty-five of this article. If, however, the amount  of  credit
   21  allowable  under  this  section  for any taxable year reduces the tax to
   22  such amount, any amount of credit not deductible in  such  taxable  year
   23  may  be  carried over to the following year or years and may be deducted
   24  from the taxpayer's tax for such year or years.
   25    5. Credit recapture[; Alternative fuel  vehicle  refueling  property].
   26  If,  at any time before the end of its recovery period, alternative fuel
   27  vehicle refueling OR ELECTRIC VEHICLE RECHARGING property ceases  to  be
   28  qualified,  a  recapture  amount must be added back in the year in which
   29  such cessation occurs.
   30    (i) Cessation of qualification.  Alternative  fuel  vehicle  refueling
   31  property  OR ELECTRIC VEHICLE RECHARGING PROPERTY ceases to be qualified
   32  if:
   33    (I) the property no longer qualifies as [property described in section
   34  thirty C of the internal revenue code] ALTERNATIVE FUEL VEHICLE  REFUEL-
   35  ING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY; or
   36    (II)  fifty  percent  or  more of the use of the property in a taxable
   37  year is other than a trade or business in this state; or
   38    (III) the taxpayer receiving the credit under this  section  sells  or
   39  disposes  of the property and knows or has reason to know that the prop-
   40  erty will be used in a manner described in this subparagraph.
   41    (ii) Recapture amount. The recapture amount is  equal  to  the  credit
   42  allowable  under this section multiplied by a fraction, the numerator of
   43  which is the total recovery period for the property minus the number  of
   44  recovery  years prior to, but not including, the recapture year, and the
   45  denominator of which is the total recovery period.
   46    6. Termination. The credit allowed by subdivision two of this  section
   47  shall  not apply in taxable years beginning after December thirty-first,
   48  two thousand [ten] SEVENTEEN.
   49    S 2. Subdivision 24 of section 210 of  the  tax  law,  as  amended  by
   50  section 15 of part W-1 of chapter 109 of the laws of 2006, is amended to
   51  read as follows:
   52    24. Alternative fuels AND ELECTRIC VEHICLE RECHARGING PROPERTY credit.
   53  (a)  General.  A  taxpayer  shall be allowed a credit, to be computed as
   54  hereinafter provided, against the tax imposed by this article for alter-
   55  native fuel vehicle refueling AND ELECTRIC VEHICLE  RECHARGING  property
   56  placed in service during the taxable year.
       S. 2609--D                         50                         A. 3009--D

    1    (b)  Alternative  fuel vehicle refueling property AND ELECTRIC VEHICLE
    2  RECHARGING PROPERTY.  The credit under this subdivision for  alternative
    3  fuel  vehicle  refueling  AND ELECTRIC VEHICLE RECHARGING property shall
    4  equal FOR EACH INSTALLATION OF PROPERTY  THE  LESSER  OF  FIVE  THOUSAND
    5  DOLLARS OR fifty percent of the cost of any such property:
    6    (i) which is located in this state; [and]
    7    (ii)  [for  which  a  credit  is allowed under section thirty C of the
    8  internal revenue code but not including alternative fuel refueling prop-
    9  erty relating to a qualified hybrid vehicle as such vehicle  is  defined
   10  in  subparagraph (B) of paragraph three of subsection (p) of section six
   11  hundred six of this chapter] WHICH CONSTITUTES ALTERNATIVE FUEL  VEHICLE
   12  REFUELING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY; AND
   13    (III)  FOR  WHICH NONE OF THE COST HAS BEEN PAID FOR FROM THE PROCEEDS
   14  OF GRANTS, INCLUDING GRANTS FROM THE NEW YORK STATE ENERGY RESEARCH  AND
   15  DEVELOPMENT AUTHORITY OR THE NEW YORK POWER AUTHORITY.
   16    (c)  Definitions.  (I)  The  term  "alternative fuel vehicle refueling
   17  property" MEANS ALL OF THE EQUIPMENT NEEDED  TO  DISPENSE  ANY  FUEL  AT
   18  LEAST EIGHTY-FIVE PERCENT OF THE VOLUME OF WHICH CONSISTS OF ONE OR MORE
   19  OF THE FOLLOWING: NATURAL GAS, LIQUIFIED NATURAL GAS, LIQUIFIED PETROLE-
   20  UM, OR HYDROGEN.
   21    (II)  THE  TERM "ELECTRIC VEHICLE RECHARGING PROPERTY" means [any such
   22  property which is qualified within the meaning of section  thirty  C  of
   23  the internal revenue code but shall not include alternative fuel vehicle
   24  refueling  property relating to a qualified hybrid vehicle as such vehi-
   25  cle is defined in subparagraph (B) of paragraph three of subsection  (p)
   26  of  section six hundred six of this chapter] ALL OF THE EQUIPMENT NEEDED
   27  TO CONVEY ELECTRIC POWER FROM THE ELECTRIC GRID OR ANOTHER POWER  SOURCE
   28  TO AN ONBOARD VEHICLE ENERGY STORAGE SYSTEM.
   29    (d) Carryovers. In no event shall the credit under this subdivision be
   30  allowed  in an amount which will reduce the tax payable to less than the
   31  higher of the amounts prescribed in paragraphs (c) and (d)  of  subdivi-
   32  sion one of this section. Provided, however, that if the amount of cred-
   33  it allowable under this subdivision for any taxable year reduces the tax
   34  to such amount, any amount of credit not deductible in such taxable year
   35  may  be  carried over to the following year or years and may be deducted
   36  from the taxpayer's tax for such year or years.
   37    (e) Credit recapture. [(i) Alternative fuel vehicle refueling  proper-
   38  ty.]  If, at any time before the end of its recovery period, alternative
   39  fuel vehicle refueling OR ELECTRIC VEHICLE RECHARGING property ceases to
   40  be qualified, a recapture amount must be added back in the year in which
   41  such cessation occurs.
   42    (A) Alternative fuel vehicle refueling OR ELECTRIC VEHICLE  RECHARGING
   43  property ceases to be qualified if:
   44    (1) the property no longer qualifies as [property described in section
   45  thirty  C of the internal revenue code] ALTERNATIVE FUEL VEHICLE REFUEL-
   46  ING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY; or
   47    (2) fifty percent or more of the use of the property in a taxable year
   48  is other than in a trade or business in this state; or
   49    (3) the taxpayer receiving the credit under this subdivision sells  or
   50  disposes  of the property and knows or has reason to know that the prop-
   51  erty will be used in a manner described in clauses one and two  of  this
   52  subparagraph.
   53    (B)  Recapture  amount.  The  recapture  amount is equal to the credit
   54  allowable under this subdivision multiplied by a fraction, the numerator
   55  of which is the total recovery period for the property minus the  number
       S. 2609--D                         51                         A. 3009--D

    1  of  recovery  years prior to, but not including, the recapture year, and
    2  the denominator of which is the total recovery period.
    3    (f)  [Affiliates. (i) If a credit under this subdivision is allowed to
    4  a taxpayer with respect to a taxable year,  the  action  taken  by  such
    5  taxpayer which resulted in such credit being allowed thereto may, at the
    6  election  of  the taxpayer and an affiliate thereof, be ascribed to such
    7  affiliate. Where such affiliate, based on such  ascription,  is  allowed
    8  such  credit  and  deducts from the tax otherwise due the amount of such
    9  credit, such credit shall be deemed in all respects to have been allowed
   10  to such affiliate, provided that any action or inaction by the  taxpayer
   11  which  constitutes  an  event of recapture described in paragraph (e) of
   12  this subdivision shall be ascribed to the affiliate and shall constitute
   13  an event of recapture with respect to the credit allowed to  the  affil-
   14  iate pursuant to this subdivision.
   15    (ii)  Notwithstanding  any  other provision of law to the contrary, in
   16  the case of the credit provided for under this subdivision being allowed
   17  to, or asserted to be allowed to, an affiliate, pursuant to subparagraph
   18  (i) of this paragraph, the commissioner shall have the same powers  with
   19  respect  to  examining  the  books and records of the taxpayer, and have
   20  such other powers of investigation with respect to the taxpayer, as  are
   21  afforded  under  this  chapter  with  respect  to  a  taxpayer which has
   22  deducted the credit allowed under this section from tax  otherwise  due,
   23  as  if  it  were  the  taxpayer  which had deducted such credit from tax
   24  otherwise due.
   25    (iii) The term "affiliate" shall mean a corporation substantially  all
   26  the  capital  stock  of  which is owned or controlled either directly or
   27  indirectly by the taxpayer, or which owns or controls either directly or
   28  indirectly substantially all the  capital  stock  of  the  taxpayer,  or
   29  substantially  all  the  capital  stock  of which is owned or controlled
   30  either directly or indirectly by interests which own or  control  either
   31  directly  or  indirectly  substantially  all  the  capital  stock of the
   32  taxpayer.
   33    (g)] Termination. The credit allowed by paragraph (b) of this subdivi-
   34  sion shall not apply in taxable years beginning after  December  thirty-
   35  first, two thousand [ten] SEVENTEEN.
   36    S  3.  Subsection  (p)  of  section  606 of the tax law, as amended by
   37  section 16 of part W-1 of chapter 109 of the laws of 2006, is amended to
   38  read as follows:
   39    (p) Alternative fuels AND ELECTRIC VEHICLE RECHARGING PROPERTY credit.
   40  (1) General. A taxpayer shall be allowed a credit,  to  be  computed  as
   41  hereinafter  provided,  against  the  tax  imposed  by this article, for
   42  alternative fuel vehicle refueling AND ELECTRIC VEHICLE RECHARGING prop-
   43  erty placed in service during the taxable year.
   44    (2) Alternative fuel vehicle refueling property AND  ELECTRIC  VEHICLE
   45  RECHARGING  PROPERTY.   The credit under this subsection for [clean-fuel
   46  vehicle refueling] ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY OR  ELEC-
   47  TRIC  VEHICLE  RECHARGING  property shall equal FOR EACH INSTALLATION OF
   48  PROPERTY THE LESSER OF FIVE THOUSAND DOLLARS OR  fifty  percent  of  the
   49  cost of any such property
   50    (A) which is located in this state [and];
   51    (B)  [for  which  a  credit  is  allowed under section thirty C of the
   52  internal revenue code but not including alternative fuel vehicle refuel-
   53  ing property relating to a qualified hybrid vehicle as such  vehicle  is
   54  defined in subparagraph (B) of paragraph three of this subsection] WHICH
   55  CONSTITUTES  ALTERNATIVE  FUEL  VEHICLE  REFUELING  PROPERTY OR ELECTRIC
   56  VEHICLE RECHARGING PROPERTY; AND
       S. 2609--D                         52                         A. 3009--D

    1    (C) FOR WHICH NONE OF THE COST HAS BEEN PAID FOR FROM THE PROCEEDS  OF
    2  GRANTS,  INCLUDING  GRANTS  FROM  THE NEW YORK STATE ENERGY RESEARCH AND
    3  DEVELOPMENT AUTHORITY OR THE NEW YORK POWER AUTHORITY.
    4    (3)  Definitions.  (A)  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; AND
    9    (B)  THE  TERM  "ELECTRIC VEHICLE RECHARGING PROPERTY" means [any such
   10  property which is qualified within the meaning of section  thirty  C  of
   11  the  internal  revenue code, but such term shall not include alternative
   12  fuel vehicle refueling property relating to a qualified  hybrid  vehicle
   13  as  such  vehicle  is defined in subparagraph (B) of this paragraph] ALL
   14  THE EQUIPMENT NEEDED TO CONVEY ELECTRIC POWER FROM THE ELECTRIC GRID  OR
   15  ANOTHER POWER SOURCE TO AN ONBOARD VEHICLE ENERGY STORAGE SYSTEM.
   16    [(B)  The  term  "qualified  hybrid vehicle" means a motor vehicle, as
   17  defined in section one hundred twenty-five of the  vehicle  and  traffic
   18  law,, that:
   19    (i) draws propulsion energy from both
   20    (a)  an internal combustion engine (or heat engine that uses combusti-
   21  ble fuel); and
   22    (b) an energy storage device; and
   23    (ii) employs a regenerative vehicle braking system that recovers waste
   24  energy to charge such energy storage device.]
   25    (4)  Carryovers.  If  the  amount  of  credit  allowable  under   this
   26  subsection shall exceed the taxpayer's tax for such year, the excess may
   27  be  carried over to the following year or years and may be deducted from
   28  the taxpayer's tax for such year or years.
   29    (5) Credit recapture. (A) [Vehicles.
   30    (i) If, within three full years from the date a qualified hybrid vehi-
   31  cle or a vehicle of which alternative fuel vehicle property is a part is
   32  placed in service, such qualified hybrid vehicle  or  vehicle  of  which
   33  alternative  fuel vehicle property is a part] IF, AT ANY TIME BEFORE THE
   34  END OF ITS RECOVERY PERIOD, ALTERNATIVE FUEL VEHICLE REFUELING  PROPERTY
   35  OR ELECTRIC VEHICLE RECHARGING PROPERTY ceases to be qualified, a recap-
   36  ture  amount  must be added back in the tax year in which such cessation
   37  occurs.
   38    [(ii)] (B) Cessation of qualification. [(I) A qualified hybrid vehicle
   39  ceases to be qualified if
   40    (a) it is modified by the taxpayer so that  it  no  longer  meets  the
   41  requirements  of  a  qualified hybrid vehicle as defined in subparagraph
   42  (B) of paragraph three of this subsection.
   43    (b) the taxpayer receiving the credit under this subsection  sells  or
   44  disposes of the vehicle and knows or has reason to know that the vehicle
   45  will be so modified.
   46    (B)  Alternative  fuel vehicle refueling property. (i) If, at any time
   47  before the end of its recovery period, alternative fuel vehicle  refuel-
   48  ing  property  ceases  to be qualified, a recapture amount must be added
   49  back in the year in which such cessation occurs.
   50    (ii) Cessation of qualification. Clean-fuel vehicle refueling]  ALTER-
   51  NATIVE  FUEL  VEHICLE  REFUELING PROPERTY OR ELECTRIC VEHICLE RECHARGING
   52  property ceases to be qualified if:
   53    [(I)] (I) the property no longer qualifies as [property  described  in
   54  section  thirty C of the internal revenue code] ALTERNATIVE FUEL VEHICLE
   55  REFUELING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY, or
       S. 2609--D                         53                         A. 3009--D

    1    [(II)] (II) fifty percent or more of the use  of  the  property  in  a
    2  taxable year is other than in a trade or business in this state, or
    3    [(III)]  (III) the taxpayer receiving the credit under this subsection
    4  sells or disposes of the property and knows or has reason to  know  that
    5  the property will be used in a manner described in [item (I)] CLAUSE (I)
    6  or [(II)] (II) of this [clause] SUBPARAGRAPH.
    7    [(iii)]  (C)  Recapture  amount.  The recapture amount is equal to the
    8  credit allowable under this subsection multiplied  by  a  fraction,  the
    9  numerator  of  which is the total recovery period for the property minus
   10  the number of recovery years prior to, but not including, the  recapture
   11  year, and the denominator of which is the total recovery period.
   12    (6)  Termination.  The  credit  allowed  by  [paragraph  two  of] this
   13  subsection shall not apply in taxable  years  beginning  after  December
   14  thirty-first, two thousand [ten] SEVENTEEN.
   15    S  4. Clause (ix) of subparagraph (B) of paragraph 1 of subsection (i)
   16  of section 606 of the tax law, as amended by section 7 of  part  C-1  of
   17  chapter 57 of the laws of 2009, is amended to read as follows:

   18  (ix) Alternative fuels               [Cost] AMOUNT OF CREDIT
   19  AND ELECTRIC VEHICLE                 under subdivision twenty-four
   20  RECHARGING PROPERTY                  of section two hundred ten
   21  credit under subsection (p)

   22    S 5. This act shall take effect immediately and shall apply to taxable
   23  years  beginning  on  or  after  January  1, 2013 for property placed in
   24  service on or after such date.

   25                                   PART H

   26    Section 1. Section 23 of part U of chapter 61  of  the  laws  of  2011
   27  amending the real property tax law and other laws relating to establish-
   28  ing  standards  for  electronic  real  property  tax  administration, as
   29  amended by section 1 of part G of chapter 59 of the  laws  of  2012,  is
   30  amended to read as follows:
   31    S 23. This act shall take effect immediately; provided, however, that:
   32    (a)  the amendments to section 29 of the tax law made by section thir-
   33  teen of this act shall apply to tax documents filed or  required  to  be
   34  filed  on  or  after  the  sixtieth  day after which this act shall have
   35  become a law and shall expire and be deemed repealed December 31, [2013]
   36  2016, provided however that the amendments to paragraph 4 of subdivision
   37  (a) of section 29 of the tax law and paragraph 2 of subdivision  (e)  of
   38  section  29  of  the  tax  law made by section thirteen of this act with
   39  regard to individual taxpayers shall take effect September 15, 2011  but
   40  only  if  the  commissioner  of taxation and finance has reported in the
   41  report required by section seventeen-b of this act that  the  percentage
   42  of  individual  taxpayers  electronically  filing  their 2010 income tax
   43  returns is less than eighty-five percent; provided that the commissioner
   44  of taxation and finance  shall  notify  the  legislative  bill  drafting
   45  commission  of the date of the issuance of such report in order that the
   46  commission may maintain an accurate and timely effective  data  base  of
   47  the official text of the laws of the state of New York in furtherance of
   48  effectuating  the  provisions  of  section 44 of the legislative law and
   49  section 70-b of the public officers law;
   50    (b) sections fourteen, fifteen, sixteen  and  seventeen  of  this  act
   51  shall  take  effect  September  15, 2011 but only if the commissioner of
   52  taxation and finance has reported in  the  report  required  by  section
       S. 2609--D                         54                         A. 3009--D

    1  seventeen-b  of  this  act  that  the percentage of individual taxpayers
    2  electronically filing their 2010 income tax returns is less than  eight-
    3  y-five percent;
    4    (c)  sections  fourteen-a  and fifteen-a of this act shall take effect
    5  September 15, 2011 and expire and be deemed repealed December  31,  2012
    6  but  shall  take effect only if the commissioner of taxation and finance
    7  has reported in the report required by section seventeen-b of  this  act
    8  that  the percentage of individual taxpayers electronically filing their
    9  2010 income tax returns is eighty-five percent or greater;
   10    (d) sections fourteen-b, fifteen-b, sixteen-a and seventeen-a of  this
   11  act shall take effect January 1, [2014] 2017 but only if the commission-
   12  er  of  taxation  and  finance  has  reported  in the report required by
   13  section seventeen-b of  this  act  that  the  percentage  of  individual
   14  taxpayers  electronically  filing  their 2010 income tax returns is less
   15  than eighty-five percent; and
   16    (e) sections twenty-one and twenty-one-a of this act shall expire  and
   17  be deemed repealed December 31, [2013] 2016.
   18    S 2. This act shall take effect immediately.

   19                                   PART I

   20    Intentionally omitted

   21                                   PART J

   22    Section 1. Section 862 of the general municipal law, as added by chap-
   23  ter 1030 of the laws of 1969, is amended to read as follows:
   24    S 862. Restrictions on funds of the agency. (1) No funds of the agency
   25  shall  be used in respect of any project if the completion thereof would
   26  result in the removal of an industrial or  manufacturing  plant  of  the
   27  project occupant from one area of the state to another area of the state
   28  or in the abandonment of one or more plants or facilities of the project
   29  occupant  located  within  the  state,  provided,  however, that neither
   30  restriction shall apply if the agency shall determine on  the  basis  of
   31  the  application  before  it that the project is reasonably necessary to
   32  discourage the project occupant from removing such other plant or facil-
   33  ity to a location outside  the  state  or  is  reasonably  necessary  to
   34  preserve the competitive position of the project occupant in its respec-
   35  tive industry.
   36    (2)  (A)  EXCEPT  AS PROVIDED IN PARAGRAPH (B) OF THIS SUBDIVISION, NO
   37  FINANCIAL ASSISTANCE OF THE AGENCY SHALL BE PROVIDED IN RESPECT  OF  ANY
   38  PROJECT  WHERE  FACILITIES OR PROPERTY THAT ARE PRIMARILY USED IN MAKING
   39  RETAIL SALES TO CUSTOMERS WHO PERSONALLY VISIT SUCH  FACILITIES  CONSTI-
   40  TUTE  MORE THAN ONE-THIRD OF THE TOTAL PROJECT COST. FOR THE PURPOSES OF
   41  THIS ARTICLE, "RETAIL SALES" SHALL  MEAN:  (I)  SALES  BY  A  REGISTERED
   42  VENDOR  UNDER  ARTICLE  TWENTY-EIGHT OF THE TAX LAW PRIMARILY ENGAGED IN
   43  THE RETAIL SALE OF TANGIBLE PERSONAL PROPERTY, AS  DEFINED  IN  SUBPARA-
   44  GRAPH (I) OF PARAGRAPH FOUR OF SUBDIVISION (B) OF SECTION ELEVEN HUNDRED
   45  ONE  OF  THE  TAX  LAW;  OR  (II)  SALES OF A SERVICE TO SUCH CUSTOMERS.
   46  EXCEPT, HOWEVER, THAT TOURISM DESTINATION PROJECTS SHALL NOT BE  PROHIB-
   47  ITED  BY  THIS  SUBDIVISION. FOR THE PURPOSE OF THIS PARAGRAPH, "TOURISM
   48  DESTINATION" SHALL MEAN A  LOCATION  OR  FACILITY  WHICH  IS  LIKELY  TO
   49  ATTRACT  A  SIGNIFICANT  NUMBER  OF  VISITORS  FROM OUTSIDE THE ECONOMIC
   50  DEVELOPMENT REGION AS ESTABLISHED BY SECTION TWO HUNDRED THIRTY  OF  THE
   51  ECONOMIC DEVELOPMENT LAW, IN WHICH THE PROJECT IS LOCATED.
       S. 2609--D                         55                         A. 3009--D

    1    (B)  NOTWITHSTANDING  THE PROVISIONS OF PARAGRAPH (A) OF THIS SUBDIVI-
    2  SION, FINANCIAL ASSISTANCE MAY, HOWEVER, BE PROVIDED TO A PROJECT  WHERE
    3  FACILITIES OR PROPERTY THAT ARE PRIMARILY USED IN MAKING RETAIL SALES OF
    4  GOODS  OR  SERVICES TO CUSTOMERS WHO PERSONALLY VISIT SUCH FACILITIES TO
    5  OBTAIN  SUCH  GOODS  OR  SERVICES  CONSTITUTE MORE THAN ONE-THIRD OF THE
    6  TOTAL PROJECT COST, WHERE:  (I) THE PREDOMINANT PURPOSE OF  THE  PROJECT
    7  WOULD  BE  TO  MAKE AVAILABLE GOODS OR SERVICES WHICH WOULD NOT, BUT FOR
    8  THE PROJECT, BE REASONABLY ACCESSIBLE TO  THE  RESIDENTS  OF  THE  CITY,
    9  TOWN,  OR  VILLAGE  WITHIN  WHICH  THE PROPOSED PROJECT WOULD BE LOCATED
   10  BECAUSE OF A LACK  OF  REASONABLY  ACCESSIBLE  RETAIL  TRADE  FACILITIES
   11  OFFERING  SUCH  GOODS  OR  SERVICES; OR (II) THE PROJECT IS LOCATED IN A
   12  HIGHLY DISTRESSED AREA.
   13    (C) WITH RESPECT TO PROJECTS AUTHORIZED PURSUANT TO PARAGRAPH  (B)  OF
   14  THIS  SUBDIVISION,  NO PROJECT SHALL BE APPROVED UNLESS THE AGENCY SHALL
   15  FIND  AFTER  THE  PUBLIC  HEARING  REQUIRED  BY  SECTION  EIGHT  HUNDRED
   16  FIFTY-NINE-A  OF  THIS TITLE THAT UNDERTAKING THE PROJECT WILL SERVE THE
   17  PUBLIC PURPOSES OF THIS ARTICLE BY PRESERVING PERMANENT, PRIVATE  SECTOR
   18  JOBS  OR INCREASING THE OVERALL NUMBER OF PERMANENT, PRIVATE SECTOR JOBS
   19  IN THE STATE. WHERE THE AGENCY MAKES SUCH A FINDING, PRIOR TO  PROVIDING
   20  FINANCIAL  ASSISTANCE  TO THE PROJECT BY THE AGENCY, THE CHIEF EXECUTIVE
   21  OFFICER OF THE MUNICIPALITY FOR WHOSE BENEFIT  THE  AGENCY  WAS  CREATED
   22  SHALL CONFIRM THE PROPOSED ACTION OF THE AGENCY.
   23    S  2. The general municipal law is amended by adding a new section 875
   24  to read as follows:
   25    S 875. SPECIAL PROVISIONS APPLICABLE TO STATE SALES  AND  COMPENSATING
   26  USE  TAXES  AND  CERTAIN  TYPES  OF  FACILITIES. 1. FOR PURPOSES OF THIS
   27  SECTION: "STATE SALES AND USE TAXES" MEANS SALES  AND  COMPENSATING  USE
   28  TAXES  AND FEES IMPOSED BY ARTICLE TWENTY-EIGHT OR TWENTY-EIGHT-A OF THE
   29  TAX LAW BUT EXCLUDING SUCH TAXES IMPOSED IN A  CITY  BY  SECTION  ELEVEN
   30  HUNDRED  SEVEN  OR  ELEVEN  HUNDRED  EIGHT OF SUCH ARTICLE TWENTY-EIGHT.
   31  "IDA" MEANS AN INDUSTRIAL DEVELOPMENT AGENCY ESTABLISHED BY THIS ARTICLE
   32  OR AN INDUSTRIAL DEVELOPMENT AUTHORITY CREATED BY THE PUBLIC AUTHORITIES
   33  LAW. "COMMISSIONER" MEANS THE COMMISSIONER OF TAXATION AND FINANCE.
   34    2. AN IDA SHALL KEEP RECORDS OF THE AMOUNT OF STATE  AND  LOCAL  SALES
   35  AND  USE  TAX EXEMPTION BENEFITS PROVIDED TO EACH PROJECT AND EACH AGENT
   36  OR PROJECT OPERATOR AND SHALL MAKE SUCH RECORDS AVAILABLE TO THE COMMIS-
   37  SIONER UPON REQUEST. SUCH IDA SHALL ALSO, WITHIN THIRTY DAYS OF  PROVID-
   38  ING  FINANCIAL ASSISTANCE TO A PROJECT THAT INCLUDES ANY AMOUNT OF STATE
   39  SALES AND USE TAX EXEMPTION BENEFITS, REPORT  TO  THE  COMMISSIONER  THE
   40  AMOUNT  OF SUCH BENEFITS FOR SUCH PROJECT, THE PROJECT TO WHICH THEY ARE
   41  BEING PROVIDED, TOGETHER WITH SUCH OTHER INFORMATION AND SUCH SPECIFICI-
   42  TY AND DETAIL AS THE COMMISSIONER MAY PRESCRIBE.   THIS  REPORT  MAY  BE
   43  MADE  IN  CONJUNCTION WITH THE STATEMENT REQUIRED BY SUBDIVISION NINE OF
   44  SECTION EIGHT HUNDRED SEVENTY-FOUR OF THIS TITLE OR IT MAY BE MADE AS  A
   45  SEPARATE  REPORT,  AT  THE  DISCRETION OF THE COMMISSIONER.  AN IDA THAT
   46  FAILS TO MAKE SUCH RECORDS AVAILABLE TO THE COMMISSIONER OR TO FILE SUCH
   47  REPORTS SHALL BE PROHIBITED FROM  PROVIDING  STATE  SALES  AND  USE  TAX
   48  EXEMPTION  BENEFITS FOR ANY PROJECT UNLESS AND UNTIL SUCH IDA COMES INTO
   49  COMPLIANCE WITH ALL SUCH REQUIREMENTS.
   50    3. (A) AN IDA SHALL INCLUDE WITHIN ITS RESOLUTIONS AND  PROJECT  DOCU-
   51  MENTS  ESTABLISHING ANY PROJECT OR APPOINTING AN AGENT OR PROJECT OPERA-
   52  TOR FOR ANY PROJECT THE TERMS AND CONDITIONS IN  THIS  SUBDIVISION,  AND
   53  EVERY AGENT, PROJECT OPERATOR OR OTHER PERSON OR ENTITY THAT SHALL ENJOY
   54  STATE  SALES  AND  USE  TAX  EXEMPTION BENEFITS PROVIDED BY AN IDA SHALL
   55  AGREE TO SUCH TERMS AS A CONDITION PRECEDENT TO RECEIVING OR  BENEFITING
   56  FROM SUCH STATE SALES AND USE EXEMPTIONS BENEFITS.
       S. 2609--D                         56                         A. 3009--D

    1    (B)  THE  IDA  SHALL  RECOVER, RECAPTURE, RECEIVE, OR OTHERWISE OBTAIN
    2  FROM AN AGENT, PROJECT OPERATOR OR OTHER PERSON OR  ENTITY  STATE  SALES
    3  AND  USE  EXEMPTIONS BENEFITS TAKEN OR PURPORTED TO BE TAKEN BY ANY SUCH
    4  PERSON TO WHICH THE PERSON IS NOT ENTITLED OR WHICH ARE IN EXCESS OF THE
    5  AMOUNTS  AUTHORIZED OR WHICH ARE FOR PROPERTY OR SERVICES NOT AUTHORIZED
    6  OR TAKEN IN CASES WHERE SUCH AGENT OR PROJECT OPERATOR, OR OTHER  PERSON
    7  OR  ENTITY  FAILED  TO  COMPLY  WITH A MATERIAL TERM OR CONDITION TO USE
    8  PROPERTY OR SERVICES IN THE MANNER REQUIRED BY  THE  PERSON'S  AGREEMENT
    9  WITH  THE IDA. SUCH AGENT OR PROJECT OPERATOR, OR OTHER PERSON OR ENTITY
   10  SHALL COOPERATE WITH THE IDA  IN  ITS  EFFORTS  TO  RECOVER,  RECAPTURE,
   11  RECEIVE,  OR  OTHERWISE OBTAIN SUCH STATE SALES AND USE EXEMPTIONS BENE-
   12  FITS AND SHALL PROMPTLY PAY OVER ANY SUCH AMOUNTS TO  THE  IDA  THAT  IT
   13  REQUESTS.    THE  FAILURE  TO  PAY OVER SUCH AMOUNTS TO THE IDA SHALL BE
   14  GROUNDS FOR THE COMMISSIONER TO ASSESS AND DETERMINE STATE SALES AND USE
   15  TAXES DUE FROM THE PERSON UNDER ARTICLE TWENTY-EIGHT  OF  THE  TAX  LAW,
   16  TOGETHER WITH ANY RELEVANT PENALTIES AND INTEREST DUE ON SUCH AMOUNTS.
   17    (C)  IF  AN  IDA RECOVERS, RECAPTURES, RECEIVES, OR OTHERWISE OBTAINS,
   18  ANY AMOUNT OF STATE SALES AND USE TAX EXEMPTION BENEFITS FROM AN  AGENT,
   19  PROJECT OPERATOR OR OTHER PERSON OR ENTITY, THE IDA SHALL, WITHIN THIRTY
   20  DAYS  OF  COMING INTO POSSESSION OF SUCH AMOUNT, REMIT IT TO THE COMMIS-
   21  SIONER, TOGETHER WITH SUCH INFORMATION AND REPORT THAT THE  COMMISSIONER
   22  DEEMS  NECESSARY TO ADMINISTER PAYMENT OVER OF SUCH AMOUNT. AN IDA SHALL
   23  JOIN THE COMMISSIONER AS A PARTY IN ANY ACTION OR  PROCEEDING  THAT  THE
   24  IDA  COMMENCES  TO  RECOVER,  RECAPTURE,  OBTAIN,  OR OTHERWISE SEEK THE
   25  RETURN OF, STATE SALES AND USE TAX EXEMPTION  BENEFITS  FROM  AN  AGENT,
   26  PROJECT OPERATOR OR OTHER PERSON OR ENTITY.
   27    (D)  AN  IDA  SHALL  PREPARE AN ANNUAL COMPLIANCE REPORT DETAILING ITS
   28  TERMS AND CONDITIONS DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION  AND
   29  ITS  ACTIVITIES AND EFFORTS TO RECOVER, RECAPTURE, RECEIVE, OR OTHERWISE
   30  OBTAIN STATE SALES AND USE EXEMPTIONS BENEFITS  DESCRIBED  IN  PARAGRAPH
   31  (B)  OF  THIS  SUBDIVISION,  TOGETHER WITH SUCH OTHER INFORMATION AS THE
   32  COMMISSIONER AND THE COMMISSIONER OF ECONOMIC DEVELOPMENT  MAY  REQUIRE.
   33  THE  REPORT REQUIRED BY THIS SUBDIVISION SHALL BE FILED WITH THE COMMIS-
   34  SIONER, THE DIRECTOR OF THE DIVISION OF THE BUDGET, THE COMMISSIONER  OF
   35  ECONOMIC  DEVELOPMENT,  THE STATE COMPTROLLER, THE GOVERNING BODY OF THE
   36  MUNICIPALITY FOR WHOSE BENEFIT  THE  AGENCY  WAS  CREATED,  AND  MAY  BE
   37  INCLUDED  WITH  THE ANNUAL FINANCIAL STATEMENT REQUIRED BY PARAGRAPH (B)
   38  OF SUBDIVISION ONE OF SECTION EIGHT HUNDRED FIFTY-NINE  OF  THIS  TITLE.
   39  SUCH  REPORT  REQUIRED  BY THIS SUBDIVISION SHALL BE FILED REGARDLESS OF
   40  WHETHER THE IDA IS REQUIRED TO FILE SUCH FINANCIAL  STATEMENT  DESCRIBED
   41  BY  SUCH  PARAGRAPH  (B)  OF  SUBDIVISION  ONE  OF SECTION EIGHT HUNDRED
   42  FIFTY-NINE. THE FAILURE TO FILE OR  SUBSTANTIALLY  COMPLETE  THE  REPORT
   43  REQUIRED  BY  THIS SUBDIVISION SHALL BE DEEMED TO BE THE FAILURE TO FILE
   44  OR SUBSTANTIALLY COMPLETE THE STATEMENT REQUIRED BY SUCH  PARAGRAPH  (B)
   45  OF  SUBDIVISION  ONE  OF  SUCH SECTION EIGHT HUNDRED FIFTY-NINE, AND THE
   46  CONSEQUENCES SHALL BE THE SAME AS PROVIDED IN PARAGRAPH (E) OF  SUBDIVI-
   47  SION ONE OF SUCH SECTION EIGHT HUNDRED FIFTY-NINE.
   48    (E) THIS SUBDIVISION SHALL APPLY TO ANY AMOUNTS OF STATE SALES AND USE
   49  TAX  EXEMPTION  BENEFITS  THAT AN IDA RECOVERS, RECAPTURES, RECEIVES, OR
   50  OTHERWISE OBTAINS, REGARDLESS OF WHETHER THE IDA OR THE  AGENT,  PROJECT
   51  OPERATOR  OR  OTHER  PERSON OR ENTITY CHARACTERIZES SUCH BENEFITS RECOV-
   52  ERED, RECAPTURED, RECEIVED, OR  OTHERWISE  OBTAINED,  AS  A  PENALTY  OR
   53  LIQUIDATED  OR  CONTRACT  DAMAGES  OR  OTHERWISE. THE PROVISIONS OF THIS
   54  SUBDIVISION SHALL ALSO APPLY TO ANY INTEREST OR  PENALTY  THAT  THE  IDA
   55  IMPOSES  ON  ANY  SUCH  AMOUNTS OR THAT ARE   IMPOSED ON SUCH AMOUNTS BY
   56  OPERATION OF LAW OR BY JUDICIAL ORDER OR OTHERWISE. ANY SUCH AMOUNTS  OR
       S. 2609--D                         57                         A. 3009--D

    1  PAYMENTS  THAT  AN  IDA  RECOVERS,  RECAPTURES,  RECEIVES,  OR OTHERWISE
    2  OBTAINS, TOGETHER WITH ANY  INTEREST  OR  PENALTIES  THEREON,  SHALL  BE
    3  DEEMED  TO  BE  STATE  SALES AND USE TAXES AND THE IDA SHALL RECEIVE ANY
    4  SUCH  AMOUNTS OR PAYMENTS, WHETHER AS A RESULT OF COURT ACTION OR OTHER-
    5  WISE, AS TRUSTEE FOR AND ON ACCOUNT OF THE STATE.
    6    4. THE COMMISSIONER SHALL DEPOSIT AND DISPOSE OF  ANY  AMOUNT  OF  ANY
    7  PAYMENTS  OR  MONEYS  RECEIVED FROM OR PAID OVER BY AN IDA OR FROM OR BY
    8  ANY PERSON OR ENTITY, OR RECEIVED PURSUANT TO AN  ACTION  OR  PROCEEDING
    9  COMMENCED  BY  AN  IDA, TOGETHER WITH ANY INTEREST OR PENALTIES THEREON,
   10  PURSUANT TO SUBDIVISION THREE OF THIS SECTION, AS STATE  SALES  AND  USE
   11  TAXES  IN  ACCORD WITH THE PROVISIONS OF ARTICLE TWENTY-EIGHT OF THE TAX
   12  LAW.   THE AMOUNT OF ANY SUCH PAYMENTS  OR  MONEYS,  TOGETHER  WITH  ANY
   13  INTEREST  OR PENALTIES THEREON, SHALL BE ATTRIBUTED TO THE TAXES IMPOSED
   14  BY SECTIONS ELEVEN HUNDRED FIVE AND ELEVEN HUNDRED TEN, ON THE ONE HAND,
   15  AND SECTION ELEVEN HUNDRED NINE OF THE TAX LAW, ON THE OTHER HAND, OR TO
   16  ANY LIKE TAXES OR FEES IMPOSED BY SUCH ARTICLE, BASED ON THE  PROPORTION
   17  THAT THE RATES OF SUCH TAXES OR FEES BEAR TO EACH OTHER, UNLESS THERE IS
   18  EVIDENCE  TO  SHOW  THAT ONLY ONE OR THE OTHER OF SUCH TAXES OR FEES WAS
   19  IMPOSED OR RECEIVED OR PAID OVER.
   20    5. THE STATEMENT THAT AN  IDA  IS  REQUIRED  BY  SUBDIVISION  NINE  OF
   21  SECTION  EIGHT  HUNDRED  SEVENTY-FOUR  OF  THIS ARTICLE TO FILE WITH THE
   22  COMMISSIONER SHALL NOT BE CONSIDERED AN EXEMPTION OR  OTHER  CERTIFICATE
   23  OR  DOCUMENT  UNDER  ARTICLE TWENTY-EIGHT OR TWENTY-NINE OF THE TAX LAW.
   24  THE IDA SHALL NOT REPRESENT TO ANY AGENT,  PROJECT  OPERATOR,  OR  OTHER
   25  PERSON  OR  ENTITY THAT A COPY OF SUCH STATEMENT MAY SERVE AS A SALES OR
   26  USE TAX EXEMPTION CERTIFICATE OR DOCUMENT. NO AGENT OR PROJECT  OPERATOR
   27  MAY  TENDER  A  COPY OF SUCH STATEMENT TO ANY PERSON REQUIRED TO COLLECT
   28  SALES OR USE TAXES AS THE BASIS TO MAKE ANY PURCHASE EXEMPT FROM TAX. NO
   29  SUCH PERSON REQUIRED TO COLLECT SALES OR USE TAXES  MAY  ACCEPT  SUCH  A
   30  STATEMENT  IN  LIEU  OF COLLECTING ANY TAX REQUIRED TO BE COLLECTED. THE
   31  CIVIL AND CRIMINAL PENALTIES FOR MISUSE OF A COPY OF SUCH  STATEMENT  AS
   32  AN  EXEMPTION  CERTIFICATE  OR DOCUMENT OR FOR FAILURE TO PAY OR COLLECT
   33  TAX SHALL BE AS PROVIDED IN THE TAX LAW. IN ADDITION, THE USE BY AN  IDA
   34  OR AGENT, PROJECT OPERATOR, OR OTHER PERSON OR ENTITY OF SUCH STATEMENT,
   35  OR  THE  IDA'S RECOMMENDATION OF THE USE OR TENDERING OF SUCH STATEMENT,
   36  AS SUCH AN EXEMPTION CERTIFICATE OR DOCUMENT  SHALL  BE  DEEMED  TO  BE,
   37  UNDER  ARTICLES  TWENTY-EIGHT AND THIRTY-SEVEN OF THE TAX LAW, THE ISSU-
   38  ANCE OF A FALSE OR FRAUDULENT EXEMPTION  CERTIFICATE  OR  DOCUMENT  WITH
   39  INTENT TO EVADE TAX.
   40    6.  THE  COMMISSIONER  IS  HEREBY  AUTHORIZED  TO  AUDIT  THE RECORDS,
   41  ACTIONS, AND PROCEEDINGS OF AN IDA AND OF ITS AGENTS AND PROJECT  OPERA-
   42  TORS  TO ENSURE THAT THE IDA AND ITS AGENTS AND PROJECT OPERATORS COMPLY
   43  WITH ALL THE REQUIREMENTS OF THIS SECTION. ANY INFORMATION  THE  COMMIS-
   44  SIONER FINDS IN THE COURSE OF SUCH AUDIT MAY BE USED BY THE COMMISSIONER
   45  TO  ASSESS  AND  DETERMINE  STATE  AND LOCAL TAXES OF THE IDA'S AGENT OR
   46  PROJECT OPERATOR.
   47    7. IN ADDITION TO ANY OTHER REPORTING OR FILING  REQUIREMENTS  AN  IDA
   48  HAS  UNDER  THIS ARTICLE OR OTHER LAW, AN IDA SHALL ALSO REPORT AND MAKE
   49  AVAILABLE ON THE INTERNET, WITHOUT CHARGE, COPIES OF ITS RESOLUTIONS AND
   50  AGREEMENTS APPOINTING AN AGENT OR PROJECT OPERATOR OR OTHERWISE  RELATED
   51  TO  ANY  PROJECT  IT ESTABLISHES. IT SHALL ALSO PROVIDE, WITHOUT CHARGE,
   52  COPIES OF ALL SUCH REPORTS AND INFORMATION TO A PERSON WHO ASKS  FOR  IT
   53  IN  WRITING  OR  IN  PERSON. THE IDA MAY, AT THE REQUEST OF ITS AGENT OR
   54  PROJECT OPERATOR DELETE FROM ANY SUCH COPIES POSTED ON THE  INTERNET  OR
   55  PROVIDED  TO  A  PERSON  DESCRIBED IN THE PRIOR SENTENCE PORTIONS OF ITS
       S. 2609--D                         58                         A. 3009--D

    1  RECORDS THAT ARE SPECIFICALLY EXEMPTED FROM DISCLOSURE UNDER ARTICLE SIX
    2  OF THE PUBLIC OFFICERS LAW.
    3    8.  IN CONSULTATION WITH THE COMMISSIONER OF ECONOMIC DEVELOPMENT, THE
    4  COMMISSIONER OF TAXATION AND FINANCE IS HEREBY AUTHORIZED TO ADOPT RULES
    5  AND REGULATIONS AND TO ISSUE PUBLICATIONS AND OTHER GUIDANCE  IMPLEMENT-
    6  ING  THE  PROVISIONS  OF  THIS SECTION AND OF THE OTHER SECTIONS OF THIS
    7  ARTICLE RELATING TO ANY STATE OR LOCAL  TAX  OR  FEE,  OR  EXEMPTION  OR
    8  EXCLUSION  THEREFROM,  THAT THE COMMISSIONER ADMINISTERS AND THAT MAY BE
    9  AFFECTED BY ANY PROVISION OF THIS ARTICLE, AND ANY SUCH RULES AND  REGU-
   10  LATIONS  OF  THE  COMMISSIONER SHALL HAVE THE SAME FORCE AND EFFECT WITH
   11  RESPECT TO SUCH TAXES AND FEES, OR AMOUNTS MEASURED IN RESPECT OF  THEM,
   12  AS IF THEY HAD BEEN ADOPTED BY THE COMMISSIONER PURSUANT TO THE AUTHORI-
   13  TY OF THE TAX LAW.
   14    9.  TO  THE  EXTENT  THAT A PROVISION OF THIS SECTION CONFLICTS WITH A
   15  PROVISION OF ANY OTHER SECTION OF THIS ARTICLE, THE PROVISIONS  OF  THIS
   16  SECTION SHALL CONTROL.
   17    S  3.  The  public  authorities law is amended by adding a new section
   18  1963-b to read as follows:
   19    S 1963-B. SPECIAL PROVISIONS APPLICABLE TO STATE SALES AND  COMPENSAT-
   20  ING USE TAXES AND CERTAIN TYPES OF FACILITIES. THE PROVISIONS OF SECTION
   21  EIGHT  HUNDRED  SEVENTY-FIVE OF THE GENERAL MUNICIPAL LAW SHALL APPLY TO
   22  THE PROVISIONS OF THIS TITLE AND TO THE AUTHORITY CREATED BY THIS  TITLE
   23  WITH  THE  SAME  FORCE  AND  EFFECT AS IF THE PROVISIONS OF SUCH SECTION
   24  EIGHT HUNDRED SEVENTY-FIVE HAD BEEN INCORPORATED IN FULL INTO THIS TITLE
   25  AND HAD EXPRESSLY REFERRED TO THE PROVISIONS OF THIS TITLE AND  TO  SUCH
   26  AUTHORITY,  WITH  SUCH CHANGES TO SUCH SECTION AS ARE NECESSARY TO REFER
   27  TO THE PROVISIONS OF THIS TITLE AND TO THE  AUTHORITY  CREATED  BY  THIS
   28  TITLE.
   29    S  4.  The  public  authorities law is amended by adding a new section
   30  2326-a to read as follows:
   31    S 2326-A. SPECIAL PROVISIONS APPLICABLE TO STATE SALES AND  COMPENSAT-
   32  ING USE TAXES AND CERTAIN TYPES OF FACILITIES. THE PROVISIONS OF SECTION
   33  EIGHT  HUNDRED  SEVENTY-FIVE OF THE GENERAL MUNICIPAL LAW SHALL APPLY TO
   34  THE PROVISIONS OF THIS TITLE AND TO THE AUTHORITY CREATED BY THIS  TITLE
   35  WITH  THE  SAME  FORCE  AND  EFFECT AS IF THE PROVISIONS OF SUCH SECTION
   36  EIGHT HUNDRED SEVENTY-FIVE HAD BEEN INCORPORATED IN FULL INTO THIS TITLE
   37  AND HAD EXPRESSLY REFERRED TO THE PROVISIONS OF THIS TITLE AND  TO  SUCH
   38  AUTHORITY,  WITH  SUCH CHANGES TO SUCH SECTION AS ARE NECESSARY TO REFER
   39  TO THE PROVISIONS OF THIS TITLE AND TO THE  AUTHORITY  CREATED  BY  THIS
   40  TITLE.
   41    S  5.  Subdivision  3  of section 810 of the general municipal law, as
   42  amended by chapter 356 of the laws  of  1993,  is  amended  to  read  as
   43  follows:
   44    3.  The  term  "local officer or employee" shall mean the heads (other
   45  than local elected officials) of any agency, department, division, coun-
   46  cil, board, commission, or bureau of a political subdivision  and  their
   47  deputies  and  assistants,  and the officers and employees of such agen-
   48  cies, departments, divisions, boards, bureaus, commissions  or  councils
   49  who hold policy-making positions, as annually determined by the appoint-
   50  ing authority and set forth in a written instrument which shall be filed
   51  with  the appropriate body during the month of February; except that the
   52  term "local officer or employee" shall not mean a judge, justice,  offi-
   53  cer  or  employee  of  the  unified court system. Members, officers, and
   54  employees of each industrial development  agency  and  authority  ESTAB-
   55  LISHED BY THIS CHAPTER OR CREATED BY THE PUBLIC AUTHORITIES LAW shall be
       S. 2609--D                         59                         A. 3009--D

    1  deemed  officers  or employees of the county, city, village, or town for
    2  whose benefit such agency or authority is established OR CREATED.
    3    S  6.  Subdivision  4  of section 854 of the general municipal law, as
    4  amended by chapter 478 of the laws  of  2011,  is  amended  to  read  as
    5  follows:
    6    (4)  "Project"  -  shall mean any land, any building or other improve-
    7  ment, and all real and personal properties located within the  state  of
    8  New York and within or outside or partially within and partially outside
    9  the  municipality  for  whose benefit the agency was created, including,
   10  but not limited to, machinery, equipment  and  other  facilities  deemed
   11  necessary  or  desirable in connection therewith, or incidental thereto,
   12  whether or not now in existence or under construction,  which  shall  be
   13  suitable  for manufacturing, warehousing, research, commercial or indus-
   14  trial purposes or  other  economically  sound  purposes  identified  and
   15  called  for  to implement a state designated urban cultural park manage-
   16  ment plan as provided in title G of the parks, recreation  and  historic
   17  preservation  law  and which may include or mean an industrial pollution
   18  control facility, a recreation facility, educational or cultural facili-
   19  ty, a horse racing facility, a railroad facility or an automobile racing
   20  facility, provided, however, no agency shall use its  funds  OR  PROVIDE
   21  FINANCIAL  ASSISTANCE  in  respect  of  any  project wholly or partially
   22  outside the municipality for whose benefit the agency was created  with-
   23  out the prior consent thereto by the governing body or bodies of all the
   24  other  municipalities  in which a part or parts of the project is, or is
   25  to be, located, AND SUCH PORTION OF THE  PROJECT  LOCATED  OUTSIDE  SUCH
   26  MUNICIPALITY  FOR  WHOSE BENEFIT THE AGENCY WAS CREATED SHALL BE CONTIG-
   27  UOUS WITH THE PORTION OF THE PROJECT INSIDE SUCH MUNICIPALITY.
   28    S 7. Section 883 of the general municipal law, as added by chapter 356
   29  of the laws of 1993, is amended to read as follows:
   30    S 883. Conflicts of interest. All members, officers, and employees  of
   31  an  agency or INDUSTRIAL DEVELOPMENT authority ESTABLISHED BY THIS CHAP-
   32  TER OR CREATED BY THE PUBLIC AUTHORITIES LAW shall  be  subject  to  the
   33  provisions of article eighteen of this chapter.
   34    S  8.  Subdivision  9  of section 874 of the general municipal law, as
   35  added by section 1 of subpart C of part S of chapter 57 of the  laws  of
   36  2010, is amended to read as follows:
   37    (9)  (A)  Within  thirty days of the date that the agency designates a
   38  project operator or other person to act  as  agent  of  the  agency  for
   39  purposes  of  providing financial assistance consisting of any sales and
   40  compensating use tax exemption to such person, the agency shall  file  a
   41  statement  with the department of taxation and finance relating thereto,
   42  on a form and in such manner as is prescribed  by  the  commissioner  of
   43  taxation  and finance, identifying each such agent so named by the agen-
   44  cy, setting forth the taxpayer identification number of each such agent,
   45  giving a brief description of the property and/or services  intended  to
   46  be  exempted  from  such taxes as a result of such appointment as agent,
   47  indicating the agency's rough estimate of  the  value  of  the  property
   48  and/or  services  to which such appointment as agent relates, indicating
   49  the date when such designation as agent became effective and  indicating
   50  the date upon which such designation as agent shall cease.
   51    (B)  WITHIN  THIRTY  DAYS  OF  THE  DATE THAT THE AGENCY'S DESIGNATION
   52  DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION HAS BEEN AMENDED,  TERMI-
   53  NATED,  BEEN  REVOKED,  OR BECOME INVALID OR INEFFECTIVE FOR ANY REASON,
   54  THE AGENCY SHALL FILE A STATEMENT WITH THE DEPARTMENT  OF  TAXATION  AND
   55  FINANCE  RELATING THERETO, ON A FORM AND IN SUCH MANNER AS IS PRESCRIBED
   56  BY THE COMMISSIONER OF TAXATION AND FINANCE, IDENTIFYING EACH SUCH AGENT
       S. 2609--D                         60                         A. 3009--D

    1  SO NAMED BY THE AGENCY IN THE ORIGINAL DESIGNATION AND SETTING FORTH THE
    2  TAXPAYER IDENTIFICATION NUMBER AND OTHER IDENTIFYING INFORMATION OF EACH
    3  SUCH AGENT, THE DATE AS OF WHICH THE ORIGINAL DESIGNATION  WAS  AMENDED,
    4  TERMINATED,  REVOKED,  OR  BECAME  INVALID OR INEFFECTIVE AND THE REASON
    5  THEREFOR, TOGETHER WITH A COPY OF THE ORIGINAL DESIGNATION.
    6    S 9. Subdivision 4 of section 1963 of the public authorities  law,  as
    7  added  by  section 2 of subpart C of part S of chapter 57 of the laws of
    8  2010, is amended to read as follows;
    9    4. (A) Within thirty days of the date that the authority designates  a
   10  project  operator  or  other person to act as agent of the authority for
   11  purposes of providing financial assistance consisting of any  sales  and
   12  compensating  use  tax exemption to such person, the agency shall file a
   13  statement with the department of taxation and finance relating  thereto,
   14  on  a  form  and  in such manner as is prescribed by the commissioner of
   15  taxation and finance, identifying  each  such  agent  so  named  by  the
   16  authority, setting forth the taxpayer identification number of each such
   17  agent,  giving  a  brief  description  of  the  property and/or services
   18  intended to be exempted from such taxes as a result of such  appointment
   19  as  agent, indicating the authority's rough estimate of the value of the
   20  property and/or services to which such  appointment  as  agent  relates,
   21  indicating  the date when such designation as agent became effective and
   22  indicating the date upon which such designation as agent shall cease.
   23    (B) WITHIN THIRTY DAYS OF THE DATE THAT  THE  AUTHORITY'S  DESIGNATION
   24  DESCRIBED  IN PARAGRAPH (A) OF THIS SUBDIVISION HAS BEEN AMENDED, TERMI-
   25  NATED, BEEN REVOKED, OR BECOME INVALID OR INEFFECTIVE  FOR  ANY  REASON,
   26  THE AUTHORITY SHALL FILE A STATEMENT WITH THE DEPARTMENT OF TAXATION AND
   27  FINANCE  RELATING THERETO, ON A FORM AND IN SUCH MANNER AS IS PRESCRIBED
   28  BY THE COMMISSIONER OF TAXATION AND FINANCE, IDENTIFYING EACH SUCH AGENT
   29  SO NAMED BY THE AUTHORITY IN THE ORIGINAL DESIGNATION AND SETTING  FORTH
   30  THE  TAXPAYER IDENTIFICATION NUMBER AND OTHER IDENTIFYING INFORMATION OF
   31  EACH SUCH AGENT, THE DATE AS  OF  WHICH  THE  ORIGINAL  DESIGNATION  WAS
   32  AMENDED,  TERMINATED,  REVOKED, OR BECAME INVALID OR INEFFECTIVE AND THE
   33  REASON THEREFOR, TOGETHER WITH A COPY OF THE ORIGINAL DESIGNATION.
   34    S 10. Subdivision 4 of section 2326 of the public authorities law,  as
   35  added  by  section 3 of subpart C of part S of chapter 57 of the laws of
   36  2010, is amended to read as follows:
   37    4. (A) Within thirty days of the date that the authority designates  a
   38  project  operator  or  other person to act as agent of the authority for
   39  purposes of providing financial assistance consisting of any  sales  and
   40  compensating  use  tax exemption to such person, the agency shall file a
   41  statement with the department of taxation and finance relating  thereto,
   42  on  a  form  and  in such manner as is prescribed by the commissioner of
   43  taxation and finance, identifying  each  such  agent  so  named  by  the
   44  authority, setting forth the taxpayer identification number of each such
   45  agent,  giving  a  brief  description  of  the  property and/or services
   46  intended to be exempted from such taxes as a result of such  appointment
   47  as  agent, indicating the authority's rough estimate of the value of the
   48  property and/or services to which such  appointment  as  agent  relates,
   49  indicating  the date when such designation as agent became effective and
   50  indicating the date upon which such designation as agent shall cease.
   51    (B) WITHIN THIRTY DAYS OF THE DATE THAT  THE  AUTHORITY'S  DESIGNATION
   52  DESCRIBED  IN PARAGRAPH (A) OF THIS SUBDIVISION HAS BEEN AMENDED, TERMI-
   53  NATED, BEEN REVOKED, OR BECOME INVALID OR INEFFECTIVE  FOR  ANY  REASON,
   54  THE AUTHORITY SHALL FILE A STATEMENT WITH THE DEPARTMENT OF TAXATION AND
   55  FINANCE  RELATING THERETO, ON A FORM AND IN SUCH MANNER AS IS PRESCRIBED
   56  BY THE COMMISSIONER OF TAXATION AND FINANCE, IDENTIFYING EACH SUCH AGENT
       S. 2609--D                         61                         A. 3009--D

    1  SO NAMED BY THE AUTHORITY IN THE ORIGINAL DESIGNATION AND SETTING  FORTH
    2  THE  TAXPAYER IDENTIFICATION NUMBER AND OTHER IDENTIFYING INFORMATION OF
    3  EACH SUCH AGENT, THE DATE AS  OF  WHICH  THE  ORIGINAL  DESIGNATION  WAS
    4  AMENDED,  TERMINATED,  REVOKED, OR BECAME INVALID OR INEFFECTIVE AND THE
    5  REASON THEREFOR, TOGETHER WITH A COPY OF THE ORIGINAL DESIGNATION.
    6    S 11. Severability. If any provision of this act shall for any  reason
    7  be  finally adjudged by any court of competent jurisdiction to be inval-
    8  id, such judgment shall not affect, impair, or invalidate the  remainder
    9  of  this  act,  but  shall be confined in its operation to the provision
   10  directly involved in the controversy in which such judgment  shall  have
   11  been rendered. It is hereby declared to be the intent of the legislature
   12  that this act would have been enacted even if such invalid provision had
   13  not been included in this act.
   14    S  12.  This  act shall take effect immediately and shall apply to (a)
   15  any project established, agent or project operator appointed on or after
   16  the date this act shall have become a law and any  financial  assistance
   17  or  agreement  regarding payments in lieu of taxes provided thereto, (b)
   18  any amendment or revision involving additional funds or benefits made on
   19  or after the date this act shall have become a law to any project estab-
   20  lished,  agent  or  project  operator  appointed,  financial  assistance
   21  provided,  or payment in lieu of taxes entered into, prior to that date,
   22  and (c) any state sales and compensating use tax exemption benefits  and
   23  any  payments  in  lieu of state sales and compensating use taxes recov-
   24  ered, recaptured, received,  or  otherwise  obtained  by  an  industrial
   25  development agency established by the general municipal law or an indus-
   26  trial development authority created by title 11 or title 15 of article 8
   27  of the public authorities law on or after such date.

   28                                   PART K

   29    Section  1. Paragraph 42 of subdivision (a) of section 1115 of the tax
   30  law, as added by section 11 of part W-1 of chapter 109 of  the  laws  of
   31  2006, is amended to read as follows:
   32    (42)  E85, CNG or hydrogen, for use or consumption directly and exclu-
   33  sively in the engine of a motor vehicle AND NATURAL  GAS  PURCHASED  AND
   34  CONVERTED  INTO CNG, FOR USE OR FOR SALE FOR USE OR CONSUMPTION DIRECTLY
   35  AND EXCLUSIVELY IN THE ENGINE OF A MOTOR VEHICLE.
   36    S 2. This act shall take effect on the first day of a sales tax  quar-
   37  terly period, as described in subdivision (b) of section 1136 of the tax
   38  law,  next  commencing  after this act shall have become a law and shall
   39  apply in accordance  with  the  applicable  transitional  provisions  in
   40  sections  1106  and  1217  of  the  tax law; provided, however, that the
   41  amendments to paragraph 42 of subdivision (a) of section 1115 of the tax
   42  law made by section one of this act shall not affect the repeal of  such
   43  paragraph and shall be deemed repealed therewith.

   44                                   PART L

   45    Section  1.  Section  301-c  of the tax law is amended by adding a new
   46  subdivision (p) to read as follows:
   47    (P) REIMBURSEMENT FOR MOTOR FUEL AND  DIESEL  MOTOR  FUEL  USED  BY  A
   48  VOLUNTARY AMBULANCE SERVICE, AS DEFINED IN SECTION THREE THOUSAND ONE OF
   49  THE  PUBLIC  HEALTH LAW, A FIRE COMPANY OR A FIRE DEPARTMENT, AS DEFINED
   50  IN SECTION THREE OF THE VOLUNTEER FIREFIGHTERS' BENEFIT LAW, OR A VOLUN-
   51  TEER RESCUE SQUAD SUPPORTED IN WHOLE OR IN PART BY TAX MONIES, WHERE ANY
   52  SUCH ENTITY IS THE PURCHASER, USER OR CONSUMER OF MOTOR FUEL  OR  DIESEL
       S. 2609--D                         62                         A. 3009--D

    1  MOTOR  FUEL  IN  A  VEHICLE  OWNED  AND OPERATED BY SUCH ENTITY AND USED
    2  EXCLUSIVELY FOR SUCH ENTITY'S PURPOSES. A PURCHASER  SHALL  BE  ELIGIBLE
    3  FOR REIMBURSEMENT OF THE TAX IMPOSED PURSUANT TO THIS ARTICLE IF (1) ANY
    4  TAX  IMPOSED PURSUANT TO THIS ARTICLE HAS BEEN PAID WITH RESPECT TO SUCH
    5  GALLONAGE AND THE ENTIRE AMOUNT OF SUCH TAX HAS BEEN  ABSORBED  BY  SUCH
    6  PURCHASER,  AND (2) SUCH PURCHASER POSSESSES DOCUMENTARY PROOF SATISFAC-
    7  TORY TO THE COMMISSIONER EVIDENCING THE ABSORPTION BY SUCH PURCHASER  OF
    8  THE  ENTIRE  AMOUNT  OF  SUCH TAX. PROVIDED, THAT THE COMMISSIONER SHALL
    9  REQUIRE SUCH DOCUMENTARY PROOF TO QUALIFY FOR ANY REIMBURSEMENT PROVIDED
   10  HEREUNDER AS THE COMMISSIONER DEEMS APPROPRIATE.
   11    S 2. This act shall take effect on the first day of  the  first  month
   12  next succeeding the sixtieth day after it shall have become a law.

   13                                   PART M

   14    Intentionally omitted

   15                                   PART N

   16    Intentionally omitted

   17                                   PART O

   18    Section  1.  Subparagraph  (i)  of  paragraph  (b) of subdivision 1 of
   19  section 481 of the tax law, as amended by chapter 604  of  the  laws  of
   20  2008, is amended to read as follows:
   21    (i)  In  addition  to  any  other penalty imposed by this article, the
   22  commissioner may (A) impose a penalty of not more than [one] SIX hundred
   23  [fifty] dollars for each two hundred cigarettes, or fraction thereof, in
   24  excess of one thousand cigarettes in  unstamped  or  unlawfully  stamped
   25  packages  in  the  possession  or under the control of any person or (B)
   26  impose a penalty of not more than two hundred dollars for each ten unaf-
   27  fixed false, altered or counterfeit cigarette tax  stamps,  imprints  or
   28  impressions, or fraction thereof, in the possession or under the control
   29  of any person. In addition, the commissioner may impose a penalty of not
   30  more  than  seventy-five  dollars  for each fifty cigars or one pound of
   31  tobacco, or fraction thereof, in excess of two hundred fifty  cigars  or
   32  five  pounds  of  tobacco  in the possession or under the control of any
   33  person and a penalty of not more than one hundred fifty dollars for each
   34  fifty cigars or pound of tobacco, or fraction thereof, in excess of five
   35  hundred cigars or ten pounds of tobacco in the possession or  under  the
   36  control  of  any  person, with respect to which the tobacco products tax
   37  has not been paid or assumed by a distributor or tobacco products  deal-
   38  er;  provided,  however,  that any such penalty imposed shall not exceed
   39  seven thousand five hundred dollars in the aggregate.  The  commissioner
   40  may  impose  a  penalty  of  not more than seventy-five dollars for each
   41  fifty cigars or one pound of tobacco, or fraction thereof, in excess  of
   42  fifty  cigars  or  one  pound  of tobacco in the possession or under the
   43  control of any tobacco products dealer or distributor appointed  by  the
   44  commissioner,  and  a penalty of not more than one hundred fifty dollars
   45  for each fifty cigars or pound  of  tobacco,  or  fraction  thereof,  in
   46  excess  of  two  hundred  fifty  cigars or five pounds of tobacco in the
   47  possession or under the control of any such dealer or distributor,  with
   48  respect  to  which the tobacco products tax has not been paid or assumed
   49  by a distributor or a tobacco products dealer; provided,  however,  that
       S. 2609--D                         63                         A. 3009--D

    1  any  such  penalty  imposed shall not exceed fifteen thousand dollars in
    2  the aggregate.
    3    S 2. This act shall take effect June 1, 2013.

    4                                   PART P

    5    Section  1.  The  tax  law is amended by adding a new section 171-v to
    6  read as follows:
    7    S 171-V. ENFORCEMENT OF DELINQUENT TAX LIABILITIES THROUGH THE SUSPEN-
    8  SION OF DRIVERS' LICENSES. (1) THE COMMISSIONER SHALL ENTER INTO A WRIT-
    9  TEN AGREEMENT WITH THE COMMISSIONER OF MOTOR VEHICLES, WHICH  SHALL  SET
   10  FORTH  THE  PROCEDURES FOR THE TWO DEPARTMENTS TO COOPERATE IN A PROGRAM
   11  TO IMPROVE TAX COLLECTION THROUGH THE SUSPENSION OF DRIVERS' LICENSES OF
   12  TAXPAYERS WITH PAST-DUE TAX LIABILITIES EQUAL TO OR  IN  EXCESS  OF  TEN
   13  THOUSAND  DOLLARS.    FOR  THE  PURPOSES  OF THIS SECTION, THE TERM "TAX
   14  LIABILITIES" SHALL MEAN ANY TAX, SURCHARGE, OR FEE ADMINISTERED  BY  THE
   15  COMMISSIONER, OR ANY PENALTY OR INTEREST DUE ON THESE AMOUNTS OWED BY AN
   16  INDIVIDUAL WITH A NEW YORK DRIVER'S LICENSE, THE TERM "DRIVER'S LICENSE"
   17  MEANS ANY LICENSE ISSUED BY THE DEPARTMENT OF MOTOR VEHICLES, EXCEPT FOR
   18  A  COMMERCIAL  DRIVER'S LICENSE AS DEFINED IN SECTION FIVE HUNDRED ONE-A
   19  OF THE VEHICLE AND TRAFFIC LAW, AND THE TERM "PAST-DUE TAX  LIABILITIES"
   20  MEANS ANY TAX LIABILITY OR LIABILITIES WHICH HAVE BECOME FIXED AND FINAL
   21  SUCH  THAT  THE  TAXPAYER  NO  LONGER HAS ANY RIGHT TO ADMINISTRATIVE OR
   22  JUDICIAL REVIEW.
   23    (2) THE AGREEMENT SHALL INCLUDE THE FOLLOWING PROVISIONS:
   24    (A) THE PROCEDURES BY WHICH THE DEPARTMENT SHALL  NOTIFY  THE  COMMIS-
   25  SIONER  OF  MOTOR  VEHICLES  OF TAXPAYERS WITH PAST-DUE TAX LIABILITIES,
   26  INCLUDING THE PROCEDURES BY WHICH THE DEPARTMENT AND THE  DEPARTMENT  OF
   27  MOTOR  VEHICLES  SHALL SHARE THE INFORMATION NECESSARY TO IDENTIFY INDI-
   28  VIDUALS WITH PAST-DUE TAX LIABILITIES, WHICH SHALL INCLUDE A  TAXPAYER'S
   29  NAME,  SOCIAL  SECURITY  NUMBER,  AND ANY OTHER INFORMATION NECESSARY TO
   30  ENSURE THE PROPER IDENTIFICATION OF THE TAXPAYER;
   31    (B) THE PROCEDURES BY WHICH THE COMMISSIONER SHALL NOTIFY THE  DEPART-
   32  MENT OF MOTOR VEHICLES THAT A TAXPAYER HAS SATISFIED HIS OR HER PAST-DUE
   33  TAX LIABILITIES, OR HAS ENTERED INTO AN INSTALLMENT PAYMENT AGREEMENT OR
   34  HAS  OTHERWISE MADE PAYMENT ARRANGEMENTS SATISFACTORY TO THE COMMISSION-
   35  ER, SO THAT THE SUSPENSION OF THE TAXPAYER'S  DRIVER'S  LICENSE  MAY  BE
   36  LIFTED; AND
   37    (C)  ANY OTHER MATTER THE DEPARTMENT AND THE DEPARTMENT OF MOTOR VEHI-
   38  CLES SHALL DEEM NECESSARY TO CARRY OUT THE PROVISIONS OF THIS SECTION.
   39    (3) THE DEPARTMENT SHALL PROVIDE NOTICE TO THE TAXPAYER OF HIS OR  HER
   40  INCLUSION  IN  THE  LICENSE  SUSPENSION PROGRAM NO LATER THAN SIXTY DAYS
   41  PRIOR TO THE DATE THE DEPARTMENT INTENDS TO INFORM THE  COMMISSIONER  OF
   42  MOTOR  VEHICLES  OF  THE  TAXPAYER'S  INCLUSION. HOWEVER, NO SUCH NOTICE
   43  SHALL BE ISSUED TO A TAXPAYER WHOSE WAGES ARE  BEING  GARNISHED  BY  THE
   44  DEPARTMENT FOR THE PAYMENT OF PAST-DUE TAX LIABILITIES OR PAST-DUE CHILD
   45  SUPPORT  OR COMBINED CHILD AND SPOUSAL SUPPORT ARREARS.  NOTICE SHALL BE
   46  PROVIDED BY FIRST CLASS MAIL TO THE TAXPAYER'S  LAST  KNOWN  ADDRESS  AS
   47  SUCH ADDRESS APPEARS IN THE ELECTRONIC SYSTEMS OR RECORDS OF THE DEPART-
   48  MENT. SUCH NOTICE SHALL INCLUDE:
   49    (A)  A  CLEAR  STATEMENT  OF THE PAST-DUE TAX LIABILITIES ALONG WITH A
   50  STATEMENT THAT THE DEPARTMENT SHALL PROVIDE TO THE DEPARTMENT  OF  MOTOR
   51  VEHICLES THE TAXPAYER'S NAME, SOCIAL SECURITY NUMBER AND ANY OTHER IDEN-
   52  TIFYING  INFORMATION  NECESSARY FOR THE PURPOSE OF SUSPENDING HIS OR HER
   53  DRIVER'S LICENSE PURSUANT TO THIS  SECTION  AND  SUBDIVISION  FOUR-F  OF
       S. 2609--D                         64                         A. 3009--D

    1  SECTION FIVE HUNDRED TEN OF THE VEHICLE AND TRAFFIC LAW SIXTY DAYS AFTER
    2  THE MAILING OR SENDING OF SUCH NOTICE TO THE TAXPAYER;
    3    (B)  A  STATEMENT THAT THE TAXPAYER MAY AVOID SUSPENSION OF HIS OR HER
    4  LICENSE BY FULLY SATISFYING THE PAST-DUE TAX LIABILITIES  OR  BY  MAKING
    5  PAYMENT  ARRANGEMENTS  SATISFACTORY TO THE COMMISSIONER, AND INFORMATION
    6  AS TO HOW THE TAXPAYER CAN PAY  THE  PAST-DUE  TAX  LIABILITIES  TO  THE
    7  DEPARTMENT,  ENTER  INTO  A  PAYMENT  ARRANGEMENT  OR REQUEST ADDITIONAL
    8  INFORMATION;
    9    (C) A STATEMENT THAT THE TAXPAYER'S RIGHT TO  PROTEST  THE  NOTICE  IS
   10  LIMITED TO RAISING ISSUES SET FORTH IN SUBDIVISION FIVE OF THIS SECTION;
   11    (D) A STATEMENT THAT THE SUSPENSION OF THE TAXPAYER'S DRIVER'S LICENSE
   12  SHALL  CONTINUE UNTIL THE PAST-DUE TAX LIABILITIES ARE FULLY PAID OR THE
   13  TAXPAYER MAKES PAYMENT ARRANGEMENTS SATISFACTORY  TO  THE  COMMISSIONER;
   14  AND
   15    (E) ANY OTHER INFORMATION THAT THE COMMISSIONER DEEMS NECESSARY.
   16    (4)  AFTER THE EXPIRATION OF THE SIXTY DAY PERIOD, IF THE TAXPAYER HAS
   17  NOT CHALLENGED THE NOTICE PURSUANT TO SUBDIVISION FIVE OF  THIS  SECTION
   18  AND  THE  TAXPAYER HAS FAILED TO SATISFY THE PAST-DUE TAX LIABILITIES OR
   19  MAKE PAYMENT ARRANGEMENTS SATISFACTORY TO THE COMMISSIONER, THE  DEPART-
   20  MENT SHALL NOTIFY THE DEPARTMENT OF MOTOR VEHICLES, IN THE MANNER AGREED
   21  UPON  BY THE TWO AGENCIES, THAT THE TAXPAYER'S DRIVER'S LICENSE SHALL BE
   22  SUSPENDED PURSUANT TO SUBDIVISION FOUR-F OF SECTION FIVE HUNDRED TEN  OF
   23  THE  VEHICLE  AND  TRAFFIC  LAW;  PROVIDED, HOWEVER, IN ANY CASE WHERE A
   24  TAXPAYER FAILS TO COMPLY WITH THE TERMS OF A CURRENT PAYMENT ARRANGEMENT
   25  MORE THAN ONCE WITHIN A TWELVE  MONTH  PERIOD,  THE  COMMISSIONER  SHALL
   26  IMMEDIATELY  NOTIFY THE DEPARTMENT OF MOTOR VEHICLES THAT THE TAXPAYER'S
   27  DRIVER'S LICENSE SHALL BE SUSPENDED.
   28    (5) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, AND EXCEPT AS  SPECIF-
   29  ICALLY  PROVIDED  HEREIN, THE TAXPAYER SHALL HAVE NO RIGHT TO COMMENCE A
   30  COURT ACTION OR PROCEEDING OR TO ANY OTHER LEGAL  RECOURSE  AGAINST  THE
   31  DEPARTMENT OR THE DEPARTMENT OF MOTOR VEHICLES REGARDING A NOTICE ISSUED
   32  BY  THE  DEPARTMENT  PURSUANT  TO  THIS  SECTION AND THE REFERRAL BY THE
   33  DEPARTMENT OF ANY TAXPAYER WITH PAST-DUE TAX LIABILITIES TO THE  DEPART-
   34  MENT  OF  MOTOR  VEHICLES  PURSUANT  TO  THIS SECTION FOR THE PURPOSE OF
   35  SUSPENDING THE TAXPAYER'S DRIVER'S LICENSE. A TAXPAYER  MAY  ONLY  CHAL-
   36  LENGE SUCH SUSPENSION OR REFERRAL ON THE GROUNDS THAT (I) THE INDIVIDUAL
   37  TO  WHOM  THE NOTICE WAS PROVIDED IS NOT THE TAXPAYER AT ISSUE; (II) THE
   38  PAST-DUE TAX LIABILITIES WERE SATISFIED; (III) THE TAXPAYER'S WAGES  ARE
   39  BEING  GARNISHED  BY  THE DEPARTMENT FOR THE PAYMENT OF THE PAST-DUE TAX
   40  LIABILITIES AT ISSUE OR FOR PAST-DUE CHILD SUPPORT OR COMBINED CHILD AND
   41  SPOUSAL SUPPORT ARREARS; (IV) THE TAXPAYER'S WAGES ARE  BEING  GARNISHED
   42  FOR  THE PAYMENT OF PAST-DUE CHILD SUPPORT OR COMBINED CHILD AND SPOUSAL
   43  SUPPORT ARREARS PURSUANT TO  AN  INCOME  EXECUTION  ISSUED  PURSUANT  TO
   44  SECTION  FIVE  THOUSAND  TWO HUNDRED FORTY-ONE OF THE CIVIL PRACTICE LAW
   45  AND RULES; (V) THE TAXPAYER'S DRIVER'S LICENSE IS A COMMERCIAL  DRIVER'S
   46  LICENSE  AS  DEFINED  IN  SECTION  FIVE HUNDRED ONE-A OF THE VEHICLE AND
   47  TRAFFIC LAW; OR (VI) THE DEPARTMENT INCORRECTLY FOUND THAT THE  TAXPAYER
   48  HAS  FAILED  TO COMPLY WITH THE TERMS OF A PAYMENT ARRANGEMENT MADE WITH
   49  THE COMMISSIONER MORE THAN ONCE WITHIN A TWELVE  MONTH  PERIOD  FOR  THE
   50  PURPOSES OF SUBDIVISION THREE OF THIS SECTION.
   51    HOWEVER,  NOTHING  IN THIS SUBDIVISION IS INTENDED TO LIMIT A TAXPAYER
   52  FROM SEEKING RELIEF FROM JOINT AND SEVERAL LIABILITY PURSUANT TO SECTION
   53  SIX HUNDRED FIFTY-FOUR OF THIS CHAPTER, TO THE EXTENT THAT HE OR SHE  IS
   54  ELIGIBLE PURSUANT TO THAT SUBDIVISION, OR ESTABLISHING TO THE DEPARTMENT
   55  THAT  THE  ENFORCEMENT OF THE UNDERLYING TAX LIABILITIES HAS BEEN STAYED
       S. 2609--D                         65                         A. 3009--D

    1  BY THE FILING OF A PETITION PURSUANT TO  THE  BANKRUPTCY  CODE  OF  1978
    2  (TITLE ELEVEN OF THE UNITED STATES CODE).
    3    (6) NOTWITHSTANDING ANY PROVISION OF THIS CHAPTER TO THE CONTRARY, THE
    4  DEPARTMENT MAY DISCLOSE TO THE DEPARTMENT OF MOTOR VEHICLES THE INFORMA-
    5  TION  DESCRIBED  IN  THIS SECTION THAT, IN THE DISCRETION OF THE COMMIS-
    6  SIONER, IS  NECESSARY  FOR  THE  PROPER  IDENTIFICATION  OF  A  TAXPAYER
    7  REFERRED TO THE DEPARTMENT OF MOTOR VEHICLES FOR THE PURPOSE OF SUSPEND-
    8  ING  THE TAXPAYER'S DRIVER'S LICENSE PURSUANT TO THIS SECTION AND SUBDI-
    9  VISION FOUR-F OF SECTION FIVE HUNDRED TEN OF  THE  VEHICLE  AND  TRAFFIC
   10  LAW.  THE  DEPARTMENT OF MOTOR VEHICLES MAY NOT REDISCLOSE THIS INFORMA-
   11  TION TO ANY OTHER ENTITY OR  PERSON,  OTHER  THAN  FOR  THE  PURPOSE  OF
   12  INFORMING  THE  TAXPAYER  THAT  HIS  OR  HER  DRIVER'S  LICENSE HAS BEEN
   13  SUSPENDED.
   14    (7) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION,  THE  ACTIVITIES  TO
   15  COLLECT  PAST-DUE  TAX LIABILITIES UNDERTAKEN BY THE DEPARTMENT PURSUANT
   16  TO THIS SECTION SHALL NOT IN ANY  WAY  LIMIT,  RESTRICT  OR  IMPAIR  THE
   17  DEPARTMENT FROM EXERCISING ANY OTHER AUTHORITY TO COLLECT OR ENFORCE TAX
   18  LIABILITIES UNDER ANY OTHER APPLICABLE PROVISION OF LAW.
   19    S 2. Section 510 of the vehicle and traffic law is amended by adding a
   20  new subdivision 4-f to read as follows:
   21    4-F.  SUSPENSION  FOR FAILURE TO PAY PAST-DUE TAX LIABILITIES. (1) THE
   22  COMMISSIONER SHALL ENTER INTO A WRITTEN AGREEMENT WITH THE  COMMISSIONER
   23  OF   TAXATION   AND   FINANCE,   AS  PROVIDED  IN  SECTION  ONE  HUNDRED
   24  SEVENTY-ONE-V OF THE TAX LAW, WHICH SHALL SET FORTH THE  PROCEDURES  FOR
   25  SUSPENDING  THE  DRIVERS'  LICENSES  OF  INDIVIDUALS  WHO HAVE FAILED TO
   26  SATISFY PAST-DUE TAX LIABILITIES AS  SUCH  TERMS  ARE  DEFINED  IN  SUCH
   27  SECTION.
   28    (2)  UPON  RECEIPT OF NOTIFICATION FROM THE DEPARTMENT OF TAXATION AND
   29  FINANCE THAT AN INDIVIDUAL HAS FAILED TO SATISFY  PAST-DUE  TAX  LIABIL-
   30  ITIES,  OR  TO  OTHERWISE  MAKE PAYMENT ARRANGEMENTS SATISFACTORY TO THE
   31  COMMISSIONER OF TAXATION AND FINANCE, OR HAS FAILED TO COMPLY  WITH  THE
   32  TERMS  OF SUCH PAYMENT ARRANGEMENTS MORE THAN ONCE WITHIN A TWELVE MONTH
   33  PERIOD, THE COMMISSIONER OR HIS OR HER AGENT SHALL SUSPEND  THE  LICENSE
   34  OF  SUCH  PERSON TO OPERATE A MOTOR VEHICLE. IN THE EVENT SUCH PERSON IS
   35  UNLICENSED, SUCH PERSON'S PRIVILEGE OF  OBTAINING  A  LICENSE  SHALL  BE
   36  SUSPENDED.  SUCH SUSPENSION SHALL TAKE EFFECT NO LATER THAN FIFTEEN DAYS
   37  FROM THE DATE OF THE NOTICE THEREOF PROVIDED TO THE PERSON WHOSE LICENSE
   38  OR PRIVILEGE OF OBTAINING A LICENSE IS TO BE SUSPENDED, AND SHALL REMAIN
   39  IN EFFECT UNTIL SUCH TIME AS THE COMMISSIONER IS ADVISED THAT THE PERSON
   40  HAS SATISFIED HIS OR HER PAST-DUE TAX LIABILITIES, OR HAS OTHERWISE MADE
   41  PAYMENT ARRANGEMENTS SATISFACTORY TO THE COMMISSIONER  OF  TAXATION  AND
   42  FINANCE.
   43    (3)  FROM  THE  TIME THE COMMISSIONER IS NOTIFIED BY THE DEPARTMENT OF
   44  TAXATION AND FINANCE UNDER  THIS  SECTION,  THE  COMMISSIONER  SHALL  BE
   45  RELIEVED  FROM  ALL  LIABILITY  TO SUCH PERSON WHICH MAY OTHERWISE ARISE
   46  UNDER THIS SECTION, AND SUCH PERSON SHALL HAVE NO RIGHT  TO  COMMENCE  A
   47  COURT  ACTION  OR  PROCEEDING OR TO ANY OTHER LEGAL RECOURSE AGAINST THE
   48  COMMISSIONER TO RECOVER SUCH DRIVING PRIVILEGES AS  AUTHORIZED  BY  THIS
   49  SECTION.  IN  ADDITION, NOTWITHSTANDING ANY OTHER PROVISION OF LAW, SUCH
   50  PERSON SHALL HAVE NO RIGHT TO A HEARING OR APPEAL PURSUANT TO THIS CHAP-
   51  TER WITH RESPECT TO A SUSPENSION OF DRIVING PRIVILEGES AS AUTHORIZED  BY
   52  THIS SECTION.
   53    (4)  NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, THE DEPART-
   54  MENT SHALL FURNISH THE DEPARTMENT  OF  TAXATION  AND  FINANCE  WITH  THE
   55  INFORMATION  NECESSARY  FOR  THE  PROPER IDENTIFICATION OF AN INDIVIDUAL
   56  REFERRED TO THE DEPARTMENT FOR THE PURPOSE OF DRIVER'S  LICENSE  SUSPEN-
       S. 2609--D                         66                         A. 3009--D

    1  SION  PURSUANT  TO THIS SECTION AND SECTION ONE HUNDRED SEVENTY-ONE-V OF
    2  THE TAX LAW. THIS SHALL INCLUDE THE INDIVIDUAL'S NAME,  SOCIAL  SECURITY
    3  NUMBER  AND  ANY  OTHER  INFORMATION  THE COMMISSIONER OF MOTOR VEHICLES
    4  DEEMS NECESSARY.
    5    (5)  ANY  PERSON WHOSE DRIVER'S LICENSE IS SUSPENDED PURSUANT TO PARA-
    6  GRAPH TWO OF THIS SUBDIVISION MAY APPLY FOR THE ISSUANCE OF A RESTRICTED
    7  USE LICENSE AS PROVIDED IN SECTION FIVE HUNDRED THIRTY OF THIS TITLE.
    8    S 3. Subdivision 7 of section 511 of the vehicle and traffic  law,  as
    9  added by chapter 81 of the laws of 1995, is amended to read as follows:
   10    7.  Exceptions.  When a person is convicted of a violation of subdivi-
   11  sion one [of] OR two of this section,  and  the  suspension  was  issued
   12  pursuant  to  (A) subdivision four-e of section five hundred ten of this
   13  article due to a support arrears, OR (B) SUBDIVISION FOUR-F  OF  SECTION
   14  FIVE  HUNDRED  TEN  OF  THE ARTICLE DUE TO PAST-DUE TAX LIABILITIES, the
   15  mandatory penalties set forth in subdivision one or two of this  section
   16  shall  not  be applicable if, on or before the return date or subsequent
   17  adjourned date, such person presents proof that such support arrears  OR
   18  PAST-DUE  TAX  LIABILITIES  have  been  satisfied  as shown by certified
   19  check, notice issued by the court ordering  the  suspension,  or  notice
   20  from  a support collection unit OR DEPARTMENT OF TAXATION AND FINANCE AS
   21  APPLICABLE. The sentencing court shall take the satisfaction of  arrears
   22  OR  THE PAYMENT OF THE PAST-DUE TAX LIABILITIES into account when impos-
   23  ing a sentence for any such conviction. FOR LICENSES SUSPENDED FOR  NON-
   24  PAYMENT  OF  PAST-DUE  TAX  LIABILITIES,  THE COURT SHALL ALSO TAKE INTO
   25  CONSIDERATION PROOF, IN THE FORM OF A  NOTICE  FROM  THE  DEPARTMENT  OF
   26  TAXATION  AND  FINANCE,  THAT  SUCH PERSON HAS MADE PAYMENT ARRANGEMENTS
   27  THAT ARE SATISFACTORY TO THE COMMISSIONER OF TAXATION AND FINANCE.
   28    S 4. Section 530 of the vehicle and traffic law is amended by adding a
   29  new subdivision 5-b to read as follows:
   30    (5-B) ISSUANCE OF A RESTRICTED LICENSE SHALL  NOT  BE  DENIED  TO  ANY
   31  PERSON  WHOSE  LICENSE  IS  SUSPENDED  PURSUANT TO SUBDIVISION FOUR-F OF
   32  SECTION FIVE HUNDRED TEN OF THIS TITLE FOR ANY REASON  OTHER  THAN  SUCH
   33  PERSON'S  FAILURE  TO  OTHERWISE  HAVE  A  VALID  OR  RENEWABLE DRIVER'S
   34  LICENSE. THE RESTRICTIONS ON THE TYPES OF VEHICLES WHICH MAY BE OPERATED
   35  WITH A RESTRICTED LICENSE CONTAINED IN SUCH  SUBDIVISION  FIVE  OF  THIS
   36  SECTION  SHALL  NOT  BE  APPLICABLE  TO A RESTRICTED LICENSE ISSUED TO A
   37  PERSON PURSUANT TO SUBDIVISION FOUR-F OF SECTION  FIVE  HUNDRED  TEN  OF
   38  THIS TITLE. THE ISSUANCE OF A RESTRICTED LICENSE ISSUED AS A RESULT OF A
   39  SUSPENSION  UNDER SUBDIVISION FOUR-F OF SECTION FIVE HUNDRED TEN OF THIS
   40  TITLE SHALL  NOT  IN  ANY  WAY  AFFECT  A  PERSON'S  ELIGIBILITY  FOR  A
   41  RESTRICTED LICENSE AT SOME FUTURE TIME.
   42    S  5.  This act shall take effect immediately; provided, however, that
   43  the department of taxation and finance and the department of motor vehi-
   44  cles shall have up to six months after this act shall have become a  law
   45  to  execute the written agreement and implement the necessary procedures
   46  as described in sections one and two of this act.

   47                                   PART Q

   48    Section 1. The tax law is amended by adding a  new  section  174-c  to
   49  read as follows:
   50    S  174-C.  SERVICE  OF  INCOME EXECUTION WITHOUT FILING A WARRANT.  1.
   51  NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, IF ANY  INDIVIDUAL
   52  LIABLE  FOR  THE  PAYMENT OF ANY TAX OR OTHER IMPOSITION ADMINISTERED BY
   53  THE COMMISSIONER, INCLUDING ANY ADDITIONS TO TAX, PENALTIES AND INTEREST
   54  IN CONNECTION THEREWITH, FAILS TO PAY OR TO COLLECT OR PAY OVER THE SAME
       S. 2609--D                         67                         A. 3009--D

    1  WITHIN TWENTY-ONE CALENDAR DAYS AFTER  NOTICE  AND  DEMAND  THEREFOR  IS
    2  GIVEN TO SUCH INDIVIDUAL (TEN BUSINESS DAYS IF THE AMOUNT FOR WHICH SUCH
    3  NOTICE  AND  DEMAND  IS  MADE  EQUALS  OR  EXCEEDS  ONE HUNDRED THOUSAND
    4  DOLLARS), THE COMMISSIONER IS AUTHORIZED TO SERVE AN INCOME EXECUTION ON
    5  THE  INDIVIDUAL  OR ON THE PERSON FROM WHOM THE INDIVIDUAL IS RECEIVING,
    6  OR WILL RECEIVE, MONEY, WITHOUT FILING A WARRANT IN THE  OFFICE  OF  THE
    7  CLERK  OF  THE  APPROPRIATE  COUNTY  OR  IN  THE  DEPARTMENT OF STATE AS
    8  PROVIDED FOR  IN  THIS  CHAPTER.  FOR  PURPOSES  OF  SERVING  AN  INCOME
    9  EXECUTION PURSUANT TO THIS SECTION, THE COMMISSIONER SHALL, IN THE RIGHT
   10  OF THE PEOPLE OF THE STATE OF NEW YORK, BE DEEMED TO HAVE OBTAINED JUDG-
   11  MENT  AGAINST  THE  INDIVIDUAL  FOR THE TAX OR OTHER IMPOSITION, AND THE
   12  ADDITIONS TO TAX, PENALTIES AND  INTEREST  IN  CONNECTION  THEREOF,  AND
   13  THERE  SHALL BE A LIEN ON THE AMOUNT OF THE INDIVIDUAL'S INCOME THAT MAY
   14  BE GARNISHED. IF THE COMMISSIONER CHOOSES TO SERVE AN  INCOME  EXECUTION
   15  WITHOUT FILING A WARRANT PURSUANT TO THIS SECTION, THE COMMISSIONER MUST
   16  SERVE  THE  INCOME  EXECUTION  WITHIN  SIX  YEARS AFTER THE FIRST DATE A
   17  WARRANT COULD BE FILED PURSUANT TO SECTION ONE HUNDRED SEVENTY-FOUR-B OF
   18  THIS ARTICLE. WHEN SERVING AN INCOME EXECUTION WITHOUT THE FILING  OF  A
   19  WARRANT,  THE  COMMISSIONER  SHALL  FOLLOW  THE  PROCEDURES SET FORTH IN
   20  SECTION FIVE THOUSAND TWO HUNDRED THIRTY-ONE OF THE CIVIL  PRACTICE  LAW
   21  AND  RULES,  WITH THE REFERENCES IN SUCH SECTION TO "SHERIFF" TO BE READ
   22  AS REFERRING  TO  THE  COMMISSIONER  OR  THE  DEPARTMENT.    THE  INCOME
   23  EXECUTION SHALL SPECIFY THE NAME AND ADDRESS OF THE PERSON FROM WHOM THE
   24  TAXPAYER  IS  RECEIVING  OR WILL RECEIVE MONEY; THE AMOUNT OF MONEY, THE
   25  FREQUENCY OF ITS PAYMENT AND  THE  AMOUNT  OF  THE  INSTALLMENTS  TO  BE
   26  COLLECTED THEREFROM; AND SHALL CONTAIN A NOTICE TO THE TAXPAYER THAT THE
   27  TAXPAYER  SHALL  COMMENCE  PAYMENT  OF THE INSTALLMENTS SPECIFIED IN THE
   28  NOTICE WITHIN A SPECIFIED PERIOD OF TIME THAT IS NO LESS THAN TWENTY-ONE
   29  DAYS AFTER THE NOTICE IS MAILED TO THE  TAXPAYER,  AND  THAT,  UPON  THE
   30  TAXPAYER'S  DEFAULT,  THE  EXECUTION WILL BE SERVED UPON THE PERSON FROM
   31  WHOM THE TAXPAYER IS RECEIVING OR  WILL  RECEIVE  MONEY.    SUCH  INCOME
   32  EXECUTION  SHALL CONTINUE TO BE IN EFFECT UNTIL SUCH LIABILITY IS SATIS-
   33  FIED OR UNTIL TWENTY YEARS FROM THE FIRST DATE A WARRANT COULD BE  FILED
   34  BY  THE  COMMISSIONER  PURSUANT TO SECTION ONE HUNDRED SEVENTY-FOUR-B OF
   35  THIS ARTICLE, WHETHER OR NOT A WARRANT IS FILED FOR THAT LIABILITY.
   36    2. THE PROVISIONS OF THIS SECTION SHALL BE IN ADDITION TO  THE  PROCE-
   37  DURES  RELATING TO COLLECTION OR ADMINISTRATION PROVIDED WITH RESPECT TO
   38  ANY TAX OR OTHER IMPOSITION ADMINISTERED BY THE  COMMISSIONER.  WHERE  A
   39  PROVISION  OF  THIS SECTION IS INCONSISTENT WITH ANY SUCH PROVISION WITH
   40  RESPECT TO SUCH TAX OR OTHER IMPOSITION, THE PROVISIONS OF THIS  SECTION
   41  WILL  APPLY. NOTHING IN THIS SECTION SHALL PREVENT THE COMMISSIONER FROM
   42  TIMELY FILING A WARRANT IN ORDER TO PURSUE ANY OF THE COLLECTION METHODS
   43  AUTHORIZED UNDER ARTICLE FIFTY-TWO OF THE CIVIL PRACTICE LAW AND RULES.
   44    3. THE COMMISSIONER SHALL PERIODICALLY, BUT NO  LESS  FREQUENTLY  THAN
   45  QUARTERLY,  ELECTRONICALLY  FILE  WITH THE DEPARTMENT OF STATE A LIST OF
   46  THE NAMES OF THE TAXPAYERS WHO HAVE BEEN SERVED WITH  INCOME  EXECUTIONS
   47  UNDER THE AUTHORITY OF THIS SECTION DURING THAT PERIOD. THE COMMISSIONER
   48  SHALL  ALSO  INCLUDE  IN  THIS  LIST THE NAMES OF TAXPAYERS WHOSE INCOME
   49  EXECUTIONS ARE CANCELLED OR DISCHARGED DURING THAT PERIOD.  THE  DEPART-
   50  MENT OF STATE SHALL UPON RECEIPT POST SUCH A LIST TO THEIR WEBSITE.
   51    S  2.  This  act shall take effect immediately and shall expire and be
   52  deemed repealed on and after April 1, 2015.

   53                                   PART R

   54    Intentionally omitted
       S. 2609--D                         68                         A. 3009--D

    1                                   PART S

    2    Intentionally omitted

    3                                   PART T

    4    Section  1. Clause (F) of subparagraph (ii) of paragraph 1 of subdivi-
    5  sion b of section 1612 of the tax law, as amended by section 6 of part K
    6  of chapter 57 of the laws of 2010, is amended to read as follows:
    7    (F) notwithstanding clauses (A), (B), (C), (D) and (E) of this subpar-
    8  agraph, when a vendor track, is located in Sullivan  county  and  within
    9  sixty  miles  from any gaming facility in a contiguous state such vendor
   10  fee shall, for a period of [five] SIX years commencing April first,  two
   11  thousand  eight,  be at a rate of forty-one percent of the total revenue
   12  wagered at the vendor track after payout for  prizes  pursuant  to  this
   13  chapter, after which time such rate shall be as for all tracks in clause
   14  (C) of this subparagraph.
   15    S  2.  This  act  shall take effect immediately and shall be deemed to
   16  have been in full force and effect on and after April 1, 2013.

   17                                   PART U

   18    Section 1. Paragraph (a) of subdivision  1  of  section  1003  of  the
   19  racing,  pari-mutuel  wagering and breeding law, as amended by section 1
   20  of part O of chapter 59 of the laws of  2012,  is  amended  to  read  as
   21  follows:
   22    (a)  Any  racing  association  or  corporation  or  regional off-track
   23  betting corporation, authorized to conduct  pari-mutuel  wagering  under
   24  this  chapter, desiring to display the simulcast of horse races on which
   25  pari-mutuel betting shall be permitted in the manner and subject to  the
   26  conditions  provided  for  in  this article may apply to the board for a
   27  license so to do. Applications for licenses shall be in such form as may
   28  be prescribed by the board and shall contain such information  or  other
   29  material  or  evidence  as  the  board  may require. No license shall be
   30  issued by the board authorizing the simulcast transmission of  thorough-
   31  bred  races  from  a  track  located in Suffolk county. The fee for such
   32  licenses shall be five hundred dollars per simulcast facility  per  year
   33  payable  by the licensee to the board for deposit into the general fund.
   34  Except as provided herein, the board shall not approve  any  application
   35  to  conduct  simulcasting  into individual or group residences, homes or
   36  other areas for the purposes of or in connection with pari-mutuel wager-
   37  ing. The board may approve simulcasting into residences, homes or  other
   38  areas  to be conducted jointly by one or more regional off-track betting
   39  corporations and one or more of the following: a franchised corporation,
   40  thoroughbred racing corporation or a harness racing corporation or asso-
   41  ciation; provided (i) the simulcasting consists only of those  races  on
   42  which  pari-mutuel  betting is authorized by this chapter at one or more
   43  simulcast facilities for  each  of  the  contracting  off-track  betting
   44  corporations  which shall include wagers made in accordance with section
   45  one thousand fifteen, one thousand sixteen and one thousand seventeen of
   46  this article; provided further that the  contract  provisions  or  other
   47  simulcast  arrangements  for  such  simulcast  facility shall be no less
   48  favorable than those in effect on January first, two thousand five; (ii)
   49  that each off-track betting corporation  having  within  its  geographic
   50  boundaries  such residences, homes or other areas technically capable of
   51  receiving the simulcast signal shall be a contracting party;  (iii)  the
       S. 2609--D                         69                         A. 3009--D

    1  distribution  of  revenues  shall be subject to contractual agreement of
    2  the parties except that statutory payments to  non-contracting  parties,
    3  if  any,  may  not be reduced; provided, however, that nothing herein to
    4  the  contrary  shall  prevent  a  track  from televising its races on an
    5  irregular basis primarily for promotional or marketing purposes as found
    6  by the board. For purposes of this paragraph, the provisions of  section
    7  one  thousand  thirteen  of  this article shall not apply. Any agreement
    8  authorizing an in-home simulcasting experiment commencing prior  to  May
    9  fifteenth,  nineteen  hundred  ninety-five,  may,  and all its terms, be
   10  extended  until  June  thirtieth,  two  thousand  [thirteen]   FOURTEEN;
   11  provided,  however, that any party to such agreement may elect to termi-
   12  nate such agreement upon conveying written notice to all  other  parties
   13  of  such  agreement at least forty-five days prior to the effective date
   14  of the termination, via registered  mail.  Any  party  to  an  agreement
   15  receiving  such  notice of an intent to terminate, may request the board
   16  to mediate between the parties new terms and conditions in a replacement
   17  agreement between the parties as will permit continuation of an  in-home
   18  experiment  until  June thirtieth, two thousand [thirteen] FOURTEEN; and
   19  (iv)  no  in-home  simulcasting  in  the  thoroughbred  special  betting
   20  district  shall  occur without the approval of the regional thoroughbred
   21  track.
   22    S 2. Subparagraph (iii) of paragraph d of  subdivision  3  of  section
   23  1007 of the racing, pari-mutuel wagering and breeding law, as amended by
   24  section  2  of  part  O of chapter 59 of the laws of 2012, is amended to
   25  read as follows:
   26    (iii) Of the sums retained by a receiving track located in Westchester
   27  county on races received from a franchised corporation, for  the  period
   28  commencing January first, two thousand eight and continuing through June
   29  thirtieth, two thousand [thirteen] FOURTEEN, the amount used exclusively
   30  for  purses  to  be  awarded  at races conducted by such receiving track
   31  shall be computed as follows: of the sums so retained, two and  one-half
   32  percent  of the total pools. Such amount shall be increased or decreased
   33  in the amount of fifty percent of the difference  in  total  commissions
   34  determined by comparing the total commissions available after July twen-
   35  ty-first,  nineteen  hundred  ninety-five  to the total commissions that
   36  would have been available to such  track  prior  to  July  twenty-first,
   37  nineteen hundred ninety-five.
   38    S  3.  The  opening  paragraph of subdivision 1 of section 1014 of the
   39  racing, pari-mutuel wagering and breeding law, as amended by  section  3
   40  of  part  O  of  chapter  59  of the laws of 2012, is amended to read as
   41  follows:
   42    The provisions of this section shall govern the simulcasting of  races
   43  conducted  at thoroughbred tracks located in another state or country on
   44  any day during which a franchised corporation is conducting a race meet-
   45  ing in Saratoga county at Saratoga  thoroughbred  racetrack  until  June
   46  thirtieth, two thousand [thirteen] FOURTEEN and on any day regardless of
   47  whether  or not a franchised corporation is conducting a race meeting in
   48  Saratoga county at Saratoga thoroughbred racetrack after June thirtieth,
   49  two thousand [thirteen] FOURTEEN.   On any day  on  which  a  franchised
   50  corporation has not scheduled a racing program but a thoroughbred racing
   51  corporation  located  within  the state is conducting racing, every off-
   52  track betting corporation branch office and every simulcasting  facility
   53  licensed  in  accordance  with  section  one  thousand  seven (that have
   54  entered into a written agreement  with  such  facility's  representative
   55  horsemen's  organization, as approved by the board), one thousand eight,
   56  or one thousand nine of this  article  shall  be  authorized  to  accept
       S. 2609--D                         70                         A. 3009--D

    1  wagers  and  display  the live simulcast signal from thoroughbred tracks
    2  located in another state or foreign country  subject  to  the  following
    3  provisions:
    4    S 4. Subdivision 1 of section 1015 of the racing, pari-mutuel wagering
    5  and breeding law, as amended by section 4 of part O of chapter 59 of the
    6  laws of 2012, is amended to read as follows:
    7    1.  The  provisions  of  this section shall govern the simulcasting of
    8  races conducted at harness tracks located in another  state  or  country
    9  during  the period July first, nineteen hundred ninety-four through June
   10  thirtieth, two thousand [thirteen] FOURTEEN.  This section shall  super-
   11  sede all inconsistent provisions of this chapter.
   12    S  5.  The  opening  paragraph of subdivision 1 of section 1016 of the
   13  racing, pari-mutuel wagering and breeding law, as amended by  section  5
   14  of  part  O  of  chapter  59  of the laws of 2012, is amended to read as
   15  follows:
   16    The provisions of this section shall govern the simulcasting of  races
   17  conducted  at thoroughbred tracks located in another state or country on
   18  any day during which a franchised corporation is not conducting  a  race
   19  meeting in Saratoga county at Saratoga thoroughbred racetrack until June
   20  thirtieth,  two  thousand [thirteen] FOURTEEN.   Every off-track betting
   21  corporation branch office and every simulcasting  facility  licensed  in
   22  accordance  with  section  one  thousand  seven that have entered into a
   23  written agreement with such facility's representative horsemen's  organ-
   24  ization  as  approved  by  the board, one thousand eight or one thousand
   25  nine of this article shall be authorized to accept  wagers  and  display
   26  the  live  full-card  simulcast signal of thoroughbred tracks (which may
   27  include quarter horse or mixed meetings provided that all such  wagering
   28  on  such  races  shall be construed to be thoroughbred races) located in
   29  another state or foreign country, subject to the  following  provisions;
   30  provided,  however,  no  such  written  agreement shall be required of a
   31  franchised corporation licensed in accordance with section one  thousand
   32  seven of this article:
   33    S  6. The opening paragraph of section 1018 of the racing, pari-mutuel
   34  wagering and breeding law, as amended by section 6 of part O of  chapter
   35  59 of the laws of 2012, is amended to read as follows:
   36    Notwithstanding  any  other  provision of this chapter, for the period
   37  July twenty-fifth, two thousand one through September eighth, two  thou-
   38  sand  [twelve]  THIRTEEN,  when a franchised corporation is conducting a
   39  race meeting within the state at Saratoga Race Course,  every  off-track
   40  betting  corporation  branch  office  and  every  simulcasting  facility
   41  licensed in accordance with section one thousand seven (that has entered
   42  into a written agreement with such facility's representative  horsemen's
   43  organization  as approved by the board), one thousand eight or one thou-
   44  sand nine of this article shall  be  authorized  to  accept  wagers  and
   45  display  the  live  simulcast signal from thoroughbred tracks located in
   46  another state, provided that such facility shall accept wagers on  races
   47  run  at  all  in-state  thoroughbred  tracks which are conducting racing
   48  programs subject to the following provisions; provided, however, no such
   49  written agreement shall be required of a franchised corporation licensed
   50  in accordance with section one thousand seven of this article.
   51    S 7. Section 32 of chapter 281 of  the  laws  of  1994,  amending  the
   52  racing,  pari-mutuel  wagering and breeding law  and other laws relating
   53  to simulcasting, as amended by section 7 of part O of chapter 59 of  the
   54  laws of 2012, is amended to read as follows:
   55    S  32.  This act shall take effect immediately and the pari-mutuel tax
   56  reductions in section six  of  this  act  shall  expire  and  be  deemed
       S. 2609--D                         71                         A. 3009--D

    1  repealed  on  July  1,  [2013]  2014;  provided,  however,  that nothing
    2  contained herein shall be deemed to affect the  application,  qualifica-
    3  tion,  expiration,  or  repeal  of  any  provision of law amended by any
    4  section  of  this act, and such provisions shall be applied or qualified
    5  or shall expire or be deemed repealed in the same manner,  to  the  same
    6  extent  and on the same date as the case may be as otherwise provided by
    7  law; provided further, however, that sections twenty-three  and  twenty-
    8  five of this act shall remain in full force and effect only until May 1,
    9  1997 and at such time shall be deemed to be repealed.
   10    S  8.  Section  54  of  chapter  346 of the laws of 1990, amending the
   11  racing, pari-mutuel wagering and breeding law and other laws relating to
   12  simulcasting and the imposition of certain taxes, as amended by  section
   13  8  of  part  O  of chapter 59 of the laws of 2012, is amended to read as
   14  follows:
   15    S 54. This act  shall  take  effect  immediately;  provided,  however,
   16  sections  three  through twelve of this act shall take effect on January
   17  1, 1991, and section 1013 of the racing, pari-mutuel wagering and breed-
   18  ing law, as added by section thirty-eight of this act, shall expire  and
   19  be  deemed repealed on July 1, [2013] 2014; and section eighteen of this
   20  act shall take effect on July 1, 2008 and sections fifty-one and  fifty-
   21  two  of this act shall take effect as of the same date as chapter 772 of
   22  the laws of 1989 took effect.
   23    S 9. Paragraph (a) of subdivision 1 of  section  238  of  the  racing,
   24  pari-mutuel wagering and breeding law, as amended by section 9 of part O
   25  of chapter 59 of the laws of 2012, is amended to read as follows:
   26    (a)  The  franchised  corporation  authorized  under  this  chapter to
   27  conduct pari-mutuel betting at a race meeting or races run thereat shall
   28  distribute all sums deposited in any pari-mutuel pool to the holders  of
   29  winning  tickets therein, provided such tickets be presented for payment
   30  before April first of the year following the  year  of  their  purchase,
   31  less  an  amount  which  shall be established and retained by such fran-
   32  chised corporation of between twelve to  seventeen  per  centum  of  the
   33  total  deposits in pools resulting from on-track regular bets, and four-
   34  teen to twenty-one per centum of the total deposits in  pools  resulting
   35  from on-track multiple bets and fifteen to twenty-five per centum of the
   36  total  deposits in pools resulting from on-track exotic bets and fifteen
   37  to thirty-six per centum of the total deposits in pools  resulting  from
   38  on-track  super  exotic  bets, plus the breaks. The retention rate to be
   39  established is subject to the prior approval of the racing and  wagering
   40  board.  Such rate may not be changed more than once per calendar quarter
   41  to be effective on the first day of the calendar quarter. "Exotic  bets"
   42  and  "multiple  bets"  shall have the meanings set forth in section five
   43  hundred nineteen of this chapter.  "Super exotic bets"  shall  have  the
   44  meaning  set  forth  in  section  three hundred one of this chapter. For
   45  purposes of this section, a "pick six bet" shall mean a  single  bet  or
   46  wager on the outcomes of six races. The breaks are hereby defined as the
   47  odd  cents over any multiple of five for payoffs greater than one dollar
   48  five cents but less than five dollars, over  any  multiple  of  ten  for
   49  payoffs  greater  than  five  dollars but less than twenty-five dollars,
   50  over any multiple of twenty-five for payoffs  greater  than  twenty-five
   51  dollars but less than two hundred fifty dollars, or over any multiple of
   52  fifty  for  payoffs over two hundred fifty dollars. Out of the amount so
   53  retained there shall be paid  by  such  franchised  corporation  to  the
   54  commissioner  of  taxation and finance, as a reasonable tax by the state
   55  for the privilege of conducting pari-mutuel betting on the races run  at
   56  the  race  meetings  held  by such franchised corporation, the following
       S. 2609--D                         72                         A. 3009--D

    1  percentages of the total pool for regular and  multiple  bets  five  per
    2  centum  of regular bets and four per centum of multiple bets plus twenty
    3  per centum of the breaks; for  exotic  wagers  seven  and  one-half  per
    4  centum  plus  twenty per centum of the breaks, and for super exotic bets
    5  seven and one-half per centum plus fifty per centum of the  breaks.  For
    6  the  period  June  first, nineteen hundred ninety-five through September
    7  ninth, nineteen hundred ninety-nine, such tax on regular wagers shall be
    8  three per centum and such tax on multiple wagers shall be two  and  one-
    9  half  per  centum,  plus twenty per centum of the breaks. For the period
   10  September tenth, nineteen  hundred  ninety-nine  through  March  thirty-
   11  first,  two  thousand  one, such tax on all wagers shall be two and six-
   12  tenths per centum and for the  period  April  first,  two  thousand  one
   13  through  December  thirty-first,  two thousand [thirteen] FOURTEEN, such
   14  tax on all wagers shall be one and six-tenths per centum, plus, in  each
   15  such  period,  twenty  per centum of the breaks. Payment to the New York
   16  state thoroughbred breeding and  development  fund  by  such  franchised
   17  corporation  shall be one-half of one per centum of total daily on-track
   18  pari-mutuel pools resulting from regular, multiple and exotic  bets  and
   19  three  per  centum  of super exotic bets provided, however, that for the
   20  period September tenth, nineteen hundred ninety-nine through March thir-
   21  ty-first, two thousand one, such payment shall be six-tenths of one  per
   22  centum  of  regular,  multiple and exotic pools and for the period April
   23  first, two thousand one  through  December  thirty-first,  two  thousand
   24  [thirteen]  FOURTEEN,  such  payment  shall  be  seven-tenths of one per
   25  centum of such pools.
   26    S 10. Subdivision 5 of section 1012 of the racing, pari-mutuel  wager-
   27  ing  and  breeding law, as amended by section 10 of part O of chapter 59
   28  of the laws of 2012, is amended to read as follows:
   29    5. The provisions of this section shall expire and be  of  no  further
   30  force and effect after June thirtieth, two thousand [thirteen] FOURTEEN.
   31    S 11. This act shall take effect immediately.

   32                                   PART V

   33    Section 1. Subparagraphs (A) and (B) of paragraph 2 of subsection (pp)
   34  of  section 606 of the tax law, as amended by chapter 472 of the laws of
   35  2010, are amended to read as follows:
   36    (A) With respect to any particular residence of a taxpayer, the credit
   37  allowed under paragraph one of this subsection shall  not  exceed  fifty
   38  thousand  dollars for taxable years beginning on or after January first,
   39  two thousand ten and before January first, two thousand [fifteen] TWENTY
   40  and twenty-five thousand dollars for taxable years beginning on or after
   41  January first, two thousand [fifteen] TWENTY.  In the case of a  husband
   42  and wife, the amount of the credit shall be divided between them equally
   43  or  in  such  other  manner as they may both elect. If a taxpayer incurs
   44  qualified rehabilitation expenditures in relation to more than one resi-
   45  dence in the same year, the total amount of credit allowed  under  para-
   46  graph  one of this subsection for all such expenditures shall not exceed
   47  fifty thousand dollars for taxable years beginning on or  after  January
   48  first, two thousand ten and before January first, two thousand [fifteen]
   49  TWENTY  and  twenty-five thousand dollars for taxable years beginning on
   50  or after January first, two thousand [fifteen] TWENTY.
   51    (B) For taxable years beginning on or after January first,  two  thou-
   52  sand ten and before January first, two thousand [fifteen] TWENTY, if the
   53  amount  of  credit  allowable  under  this  subsection  shall exceed the
   54  taxpayer's tax for such year, and the taxpayer's New York adjusted gross
       S. 2609--D                         73                         A. 3009--D

    1  income for such year does not exceed sixty thousand dollars, the  excess
    2  shall  be treated as an overpayment of tax to be credited or refunded in
    3  accordance with the provisions of section six hundred eighty-six of this
    4  article,  provided,  however, that no interest shall be paid thereon. If
    5  the taxpayer's New York adjusted gross  income  for  such  year  exceeds
    6  sixty  thousand  dollars,  the excess credit that may be carried over to
    7  the following year or years and may be deducted from the taxpayer's  tax
    8  for  such year or years. For taxable years beginning on or after January
    9  first, two thousand [fifteen] TWENTY, if the amount of credit  allowable
   10  under this subsection shall exceed the taxpayer's tax for such year, the
   11  excess  may  be  carried  over to the following year or years and may be
   12  deducted from the taxpayer's tax for such year or years.
   13    S 2. This act shall take effect immediately.

   14                                   PART W

   15    Section 1. Subdivision 13 of section 282 of the tax law, as  added  by
   16  chapter 276 of the laws of 1986, is amended to read as follows:
   17    13. "Terminal" means a motor fuel OR DIESEL MOTOR FUEL storage facili-
   18  ty  with  a storage capacity of fifty thousand gallons or more excluding
   19  such facility at which motor fuel OR DIESEL MOTOR FUEL is stored  solely
   20  for  its  retail  sale at such facility.   "Terminal operator" means any
   21  person who or which has the use of or control over, or the right  to  so
   22  use or control, a terminal.
   23    S  2.  Subdivision  1  of  section 282-a of the tax law, as amended by
   24  chapter 2 of the laws of 1995, is amended to read as follows:
   25    1. There is hereby levied and imposed with  respect  to  Diesel  motor
   26  fuel  an  excise  tax  of  four cents per gallon upon the sale or use of
   27  Diesel motor fuel in this state.
   28    The excise tax is imposed on the first sale or  use  of  Diesel  motor
   29  fuel to occur which is not exempt from tax under this article. Provided,
   30  however,  if  the  tax  has  not been imposed prior thereto, it shall be
   31  imposed on THE REMOVAL OF HIGHWAY DIESEL MOTOR  FUEL  FROM  A  TERMINAL,
   32  OTHER  THAN  BY PIPELINE, BARGE, TANKER OR OTHER VESSEL, OR the delivery
   33  of Diesel motor fuel to a filling station or into the fuel tank connect-
   34  ing with the engine of a motor vehicle for use in the operation  thereof
   35  whichever event shall be first to occur. The tax shall be computed based
   36  upon the number of gallons of Diesel motor fuel sold, REMOVED or used or
   37  the  number  of gallons of Diesel fuel delivered into the fuel tank of a
   38  motor vehicle, as the case may be. Nothing  in  this  article  shall  be
   39  construed  to require the payment of such excise tax more than once upon
   40  the same Diesel motor fuel. Nor shall the collection of such tax be made
   41  applicable to the sale or use of Diesel motor fuel  under  circumstances
   42  which preclude the collection of such tax by reason of the United States
   43  constitution  and of laws of the United States enacted pursuant thereto.
   44  Provided, further, no Diesel motor fuel shall be included in the measure
   45  of the tax unless it shall have previously come to rest within the mean-
   46  ing of federal decisional law interpreting the United  States  constitu-
   47  tion.  All tax for the period for which a return is required to be filed
   48  shall be due on the date limited for the filing of the return  for  such
   49  period,  regardless  of  whether  a  return is filed as required by this
   50  article or whether the return which is filed correctly shows the  amount
   51  of tax due.
   52    S  3.  Paragraph (b) of subdivision 3 of section 282-a of the tax law,
   53  as amended by section 2 of part E of chapter 59 of the laws of 2012,  is
   54  amended to read as follows:
       S. 2609--D                         74                         A. 3009--D

    1    (b) The tax on the incidence of sale or use imposed by subdivision one
    2  of  this  section shall not apply to: (i) the sale or use of non-highway
    3  Diesel motor fuel, but only if all of such fuel is consumed  other  than
    4  on  the  public highways of this state (except for the use of the public
    5  highway by farmers to reach adjacent farmlands); provided, however, this
    6  exemption  shall in no event apply to a sale of non-highway Diesel motor
    7  fuel which involves a delivery at a filling station or into a repository
    8  which is equipped with a hose or other apparatus by which such fuel  can
    9  be  dispensed into the fuel tank of a motor vehicle (except for delivery
   10  at a farm site which qualifies for the exemption under  subdivision  (g)
   11  of  section  three hundred one-b of this chapter); or (ii) a sale to the
   12  consumer consisting of not more than twenty gallons of water-white kero-
   13  sene to be used and consumed exclusively for heating purposes; or  (iii)
   14  the  sale  to or delivery at a filling station or other retail vendor of
   15  water-white kerosene provided  such  filling  station  or  other  retail
   16  vendor  only  sells  such  water-white  kerosene exclusively for heating
   17  purposes in containers of no more than twenty gallons; or (iv) a sale of
   18  kero-jet fuel to an airline for use in its airplanes or a use  of  kero-
   19  jet  fuel by an airline in its airplanes; or (v) a sale of kero-jet fuel
   20  by a registered distributor of Diesel motor fuel to a fixed base  opera-
   21  tor registered under this article as a distributor of kero-jet fuel only
   22  where  such  fixed base operator is engaged solely in making or offering
   23  to make retail sales not in bulk of kero-jet fuel directly into the fuel
   24  tank of an airplane for the purpose of operating such airplane; OR  (vi)
   25  a  retail  sale  not  in  bulk of kero-jet fuel by a fixed base operator
   26  registered under this article as a distributor  of  kero-jet  fuel  only
   27  where  such fuel is delivered directly into the fuel tank of an airplane
   28  for use in the operation of such airplane; or (vii) the sale  of  previ-
   29  ously  untaxed  qualified  biodiesel  to  a person registered under this
   30  article as a distributor of Diesel motor fuel other than  (A)  a  retail
   31  sale to such person or (B) a sale to such person which involves a deliv-
   32  ery  at  a filling station or into a repository which is equipped with a
   33  hose or other  apparatus  by  which  such  qualified  biodiesel  can  be
   34  dispensed  into  the fuel tank of a motor vehicle; OR (VIII) THE SALE OF
   35  PREVIOUSLY UNTAXED HIGHWAY DIESEL MOTOR  FUEL  BY  A  PERSON  REGISTERED
   36  UNDER  THIS  ARTICLE  AS  A DISTRIBUTOR OF DIESEL MOTOR FUEL TO A PERSON
   37  REGISTERED UNDER THIS ARTICLE AS A  DISTRIBUTOR  OF  DIESEL  MOTOR  FUEL
   38  WHERE  THE  HIGHWAY  DIESEL MOTOR FUEL IS EITHER: (A) BEING DELIVERED BY
   39  PIPELINE, RAILCAR, BARGE, TANKER OR OTHER  VESSEL  TO  A  TERMINAL,  THE
   40  OPERATOR  OF  WHICH  TERMINAL  IS  REGISTERED  UNDER SECTION TWO HUNDRED
   41  EIGHTY-THREE-B OF THIS ARTICLE, OR (B) WITHIN SUCH A TERMINAL  WHERE  IT
   42  HAS  BEEN SO DELIVERED.  PROVIDED, HOWEVER, THAT THE EXEMPTION SET FORTH
   43  IN THIS SUBPARAGRAPH SHALL NOT APPLY TO ANY HIGHWAY DIESEL MOTOR FUEL IF
   44  IT IS REMOVED FROM A TERMINAL, OTHER THAN BY PIPELINE, BARGE, TANKER  OR
   45  OTHER VESSEL.
   46    S  4.  Subdivision  5  of  section 282-a of the tax law, as amended by
   47  section 5 of part K of chapter 61 of the laws of  2011,  is  amended  to
   48  read as follows:
   49    5.  All  the provisions of this article relating to the administration
   50  and collection of the taxes on motor fuel, except [sections] SECTION two
   51  hundred eighty-three-a [and two hundred eighty-three-b] of this article,
   52  shall be applicable to the tax imposed by this section with such limita-
   53  tion as specifically provided for in this article with respect to Diesel
   54  motor fuel and with such modification as may be necessary to  adapt  the
   55  language  of  such  provisions  to the tax imposed by this section. With
   56  respect to the bond or other security required by subdivision  three  of
       S. 2609--D                         75                         A. 3009--D

    1  section  two  hundred eighty-three of this article, the commissioner, in
    2  determining the amount of  bond  or  other  security  required  for  the
    3  purpose  of securing tax payments, shall take into account the volume of
    4  non-highway  Diesel  motor  fuel  and  other  Diesel motor fuel sold for
    5  exempt purposes by a distributor of Diesel motor fuel during prior peri-
    6  ods as a factor reducing potential tax liability along  with  any  other
    7  relevant  factors  in determining the amount of security required.  With
    8  respect to the bond required to be filed  prior  to  registration  as  a
    9  Diesel motor fuel distributor, no bond shall be required of an applicant
   10  upon a finding of the applicant's fiscal responsibility, as reflected by
   11  such  factors  as  net  worth,  current  assets and liabilities, and tax
   12  reporting and payment history, and the department shall not provide  for
   13  a minimum bond of every applicant.
   14    S 5. Section 300 of the tax law is amended by adding a new subdivision
   15  (s) to read as follows:
   16    (S)  THE TERM "TERMINAL" SHALL HAVE THE SAME MEANING AS IN SUBDIVISION
   17  THIRTEEN OF SECTION TWO HUNDRED EIGHTY-TWO OF THIS CHAPTER.
   18    S 6. Subparagraph (A) of paragraph 1 of  subdivision  (c)  of  section
   19  301-a  of  the tax law, as amended by section 19 of part K of chapter 61
   20  of the laws of 2011, is amended to read as follows:
   21    (A) The highway diesel motor fuel component  shall  be  determined  by
   22  multiplying  the motor fuel and highway diesel motor fuel rate times (1)
   23  the number of gallons of highway diesel motor fuel sold  or  used  by  a
   24  petroleum  business in this state during the month covered by the return
   25  under this article and (2) with respect to  any  gallonage  which  prior
   26  thereto  has not been included in the measure of the tax imposed by this
   27  article, times the number  of  gallons  of  highway  diesel  motor  fuel
   28  [delivered]  (i) REMOVED FROM A TERMINAL, OTHER THAN BY PIPELINE, BARGE,
   29  TANKER OR OTHER VESSEL, (II) DELIVERED to a filling station  or  [(ii)],
   30  (III) DELIVERED into the fuel tank connecting with the engine of a motor
   31  vehicle  for use in the operation thereof, whichever of the latter [two]
   32  THREE events shall be the first to occur.  Provided,  however,  that  no
   33  highway  diesel  motor  fuel shall be included in the measure of the tax
   34  unless it shall have previously come  to  rest  within  the  meaning  of
   35  federal  decisional law interpreting the United States constitution, nor
   36  decisional law, nor shall any highway diesel motor fuel be  included  in
   37  the measure of the tax imposed by this article more than once.
   38    S  7.  Subdivision  (e) of section 301-b of the tax law, as amended by
   39  section 4 of part E of chapter 59 of the laws of  2012,  is  amended  to
   40  read as follows:
   41    (e) Sales of HIGHWAY DIESEL MOTOR FUEL, qualified biodiesel, non-high-
   42  way  diesel  motor  fuel  and  residual  petroleum product to registered
   43  distributors of diesel motor  fuel  and  registered  residual  petroleum
   44  product businesses.
   45    (1)  THE  SALE  OF  PREVIOUSLY  UNTAXED HIGHWAY DIESEL MOTOR FUEL BY A
   46  PERSON REGISTERED UNDER ARTICLE TWELVE-A OF THIS CHAPTER AS A  DISTRIBU-
   47  TOR  OF  DIESEL  MOTOR  FUEL  TO  A PERSON REGISTERED UNDER SUCH ARTICLE
   48  TWELVE-A AS A DISTRIBUTOR OF DIESEL MOTOR FUEL WHERE THE HIGHWAY  DIESEL
   49  MOTOR  FUEL  IS EITHER: (A) BEING DELIVERED BY PIPELINE, RAILCAR, BARGE,
   50  TANKER OR OTHER VESSEL TO A TERMINAL, THE OPERATOR OF WHICH TERMINAL  IS
   51  REGISTERED  UNDER SECTION TWO HUNDRED EIGHTY-THREE-B OF THIS CHAPTER, OR
   52  (B) WITHIN SUCH A TERMINAL WHERE IT HAS  BEEN  SO  DELIVERED.  PROVIDED,
   53  HOWEVER,  THAT THE EXEMPTION SET FORTH IN THIS PARAGRAPH SHALL NOT APPLY
   54  TO ANY HIGHWAY DIESEL MOTOR FUEL IF IT IS REMOVED FROM A TERMINAL, OTHER
   55  THAN BY PIPELINE, BARGE, TANKER OR OTHER VESSEL.
       S. 2609--D                         76                         A. 3009--D

    1    (2) Qualified biodiesel and non-highway  [Diesel]  DIESEL  motor  fuel
    2  sold  by a person registered under article twelve-A of this chapter as a
    3  distributor of diesel motor fuel to a person registered under such arti-
    4  cle twelve-A as a distributor of diesel motor fuel where  such  sale  is
    5  not  a  retail  sale  or  a  sale  that involves a delivery at a filling
    6  station or into a repository equipped with a hose or other apparatus  by
    7  which such qualified biodiesel or non-highway [Diesel] DIESEL motor fuel
    8  can be dispensed into the fuel tank of a motor vehicle.
    9    [(2)] (3) Residual petroleum product sold by a person registered under
   10  this article as a residual petroleum product business to a person regis-
   11  tered  under this article as a residual petroleum product business where
   12  such sale is not a retail sale. Provided, however, that the commissioner
   13  may require such documentary proof to qualify for any exemption provided
   14  in this section as the commissioner  deems  appropriate,  including  the
   15  expansion of any certifications required pursuant to section two hundred
   16  eighty-five-a  or two hundred eighty-five-b of this chapter to cover the
   17  taxes imposed by this article.
   18    [(3)] (4) "Qualified biodiesel" means such term as defined in subdivi-
   19  sion twenty-three of section two hundred eighty-two of this chapter.
   20    S 8. Clause (D) of subparagraph (ii) of paragraph 4 of subdivision (b)
   21  of section 1101 of the tax law, as added by chapter 261 of the  laws  of
   22  1988, is amended to read as follows:
   23    (D) The terms "filling station", "TERMINAL" and "owner" shall have the
   24  same  meaning  as they have for the purposes of article twelve-A of this
   25  chapter.
   26    S 9. Paragraph 2 of subdivision (a) of section 1102 of the tax law, as
   27  amended by section 5 of part E of chapter 59 of the  laws  of  2012,  is
   28  amended to read as follows:
   29    (2)  Every distributor of diesel motor fuel shall pay, as a prepayment
   30  on account of the taxes imposed by this  article  and  pursuant  to  the
   31  authority of article twenty-nine of this chapter, a tax upon the sale or
   32  use  of diesel motor fuel in this state. The tax shall be computed based
   33  upon the number of gallons of diesel motor fuel sold or used.  Provided,
   34  however,  if  the  tax  has  not been imposed prior thereto, it shall be
   35  imposed on THE REMOVAL OF HIGHWAY DIESEL MOTOR  FUEL  FROM  A  TERMINAL,
   36  OTHER  THAN  BY PIPELINE, BARGE, TANKER OR OTHER VESSEL, OR the delivery
   37  of diesel motor fuel to a retail service station. The collection of such
   38  tax shall not be made applicable to the sale or use of diesel motor fuel
   39  under circumstances which preclude the collection of such tax by  reason
   40  of  the  United  States  constitution  and  of laws of the United States
   41  enacted pursuant thereto. The prepaid tax on diesel motor fuel shall not
   42  apply to (i) the sale of [previously untaxed] non-highway  Diesel  motor
   43  fuel  to a person registered as a distributor of Diesel motor fuel other
   44  than a sale to such person  which  involves  a  delivery  at  a  filling
   45  station  or  into  a  repository  which is equipped with a hose or other
   46  apparatus by which such fuel can be dispensed into the fuel  tank  of  a
   47  motor  vehicle[,];  (ii) the sale to or delivery at a filling station or
   48  other retail  vendor  of  water-white  kerosene  provided  such  filling
   49  station  or  other  retail  vendor  only sells such water-white kerosene
   50  exclusively for heating purposes in containers of no  more  than  twenty
   51  gallons or to the sale of CNG or hydrogen; [or] (iii) the sale of previ-
   52  ously   untaxed   qualified   biodiesel,   AS   DEFINED  IN  SUBDIVISION
   53  TWENTY-THREE OF SECTION TWO HUNDRED EIGHTY-TWO OF  THIS  CHAPTER,  to  a
   54  person  registered under article twelve-A of this chapter as a distribu-
   55  tor of Diesel motor fuel other than (A) a retail sale to such person  or
   56  (B) a sale to such person which involves a delivery at a filling station
       S. 2609--D                         77                         A. 3009--D

    1  or into a repository which is equipped with a hose or other apparatus by
    2  which  such qualified biodiesel can be dispensed into the fuel tank of a
    3  motor vehicle[. "Qualified biodiesel" means  such  term  as  defined  in
    4  subdivision twenty-three of section two hundred eighty-two of this chap-
    5  ter];  OR  (IV) THE SALE OF PREVIOUSLY UNTAXED HIGHWAY DIESEL MOTOR FUEL
    6  BY A PERSON REGISTERED UNDER ARTICLE  TWELVE-A  OF  THIS  CHAPTER  AS  A
    7  DISTRIBUTOR OF DIESEL MOTOR FUEL TO A PERSON REGISTERED UNDER SUCH ARTI-
    8  CLE  TWELVE-A  AS  A  DISTRIBUTOR OF DIESEL MOTOR FUEL WHERE THE HIGHWAY
    9  DIESEL MOTOR FUEL IS EITHER: (A) BEING DELIVERED BY  PIPELINE,  RAILCAR,
   10  BARGE,  TANKER  OR  OTHER  VESSEL  TO  A TERMINAL, THE OPERATOR OF WHICH
   11  TERMINAL IS REGISTERED UNDER SECTION TWO HUNDRED EIGHTY-THREE-B OF  THIS
   12  CHAPTER,  OR  (B) WITHIN SUCH A TERMINAL WHERE IT HAS BEEN SO DELIVERED.
   13  PROVIDED, HOWEVER, THAT THE EXEMPTION SET  FORTH  IN  THIS  SUBPARAGRAPH
   14  SHALL NOT APPLY TO ANY HIGHWAY DIESEL MOTOR FUEL IF IT IS REMOVED FROM A
   15  TERMINAL, OTHER THAN BY PIPELINE, BARGE, TANKER OR OTHER VESSEL.
   16    S  10.  Paragraph 2 of subdivision (a) of section 1102 of the tax law,
   17  as amended by section 6 of part E of chapter 59 of the laws of 2012,  is
   18  amended to read as follows:
   19    (2)  Every distributor of diesel motor fuel shall pay, as a prepayment
   20  on account of the taxes imposed by this  article  and  pursuant  to  the
   21  authority of article twenty-nine of this chapter, a tax upon the sale or
   22  use  of diesel motor fuel in this state. The tax shall be computed based
   23  upon the number of gallons of diesel motor fuel sold or used.  Provided,
   24  however,  if  the  tax  has  not been imposed prior thereto, it shall be
   25  imposed on THE REMOVAL OF HIGHWAY DIESEL MOTOR  FUEL  FROM  A  TERMINAL,
   26  OTHER  THAN  BY PIPELINE, BARGE, TANKER OR OTHER VESSEL, OR the delivery
   27  of diesel motor fuel to a retail service station. The collection of such
   28  tax shall not be made applicable to the sale or use of diesel motor fuel
   29  under circumstances which preclude the collection of such tax by  reason
   30  of  the  United  States  constitution  and  of laws of the United States
   31  enacted pursuant thereto. The prepaid tax on diesel motor fuel shall not
   32  apply to (i) the sale of non-highway  Diesel  motor  fuel  to  a  person
   33  registered  as  a  distributor of Diesel motor fuel other than a sale to
   34  such person which involves a delivery at a filling  station  or  into  a
   35  repository  which  is  equipped  with a hose or other apparatus by which
   36  such fuel can be dispensed into the fuel tank  of  a  motor  vehicle[,];
   37  (ii) the sale to or delivery at a filling station or other retail vendor
   38  of  water-white  kerosene  provided such filling station or other retail
   39  vendor only sells such  water-white  kerosene  exclusively  for  heating
   40  purposes  in  containers  of no more than twenty gallons; [or] (iii) the
   41  sale of previously untaxed qualified biodiesel, AS DEFINED  IN  SUBDIVI-
   42  SION TWENTY-THREE OF SECTION TWO HUNDRED EIGHTY-TWO OF THIS CHAPTER to a
   43  person  registered under article twelve-A of this chapter as a distribu-
   44  tor of Diesel motor fuel other than (A) a retail sale to such person  or
   45  (B) a sale to such person which involves a delivery at a filling station
   46  or into a repository which is equipped with a hose or other apparatus by
   47  which  such qualified biodiesel can be dispensed into the fuel tank of a
   48  motor vehicle[. "Qualified biodiesel" means  such  term  as  defined  in
   49  subdivision twenty-three of section two hundred eighty-two of this chap-
   50  ter];  OR  (IV) THE SALE OF PREVIOUSLY UNTAXED HIGHWAY DIESEL MOTOR FUEL
   51  BY A PERSON REGISTERED UNDER ARTICLE  TWELVE-A  OF  THIS  CHAPTER  AS  A
   52  DISTRIBUTOR OF DIESEL MOTOR FUEL TO A PERSON REGISTERED UNDER SUCH ARTI-
   53  CLE  TWELVE-A  AS  A  DISTRIBUTOR OF DIESEL MOTOR FUEL WHERE THE HIGHWAY
   54  DIESEL MOTOR FUEL IS EITHER:  (A) BEING DELIVERED BY PIPELINE,  RAILCAR,
   55  BARGE,  TANKER  OR  OTHER  VESSEL  TO  A TERMINAL, THE OPERATOR OF WHICH
   56  TERMINAL IS REGISTERED UNDER SECTION TWO HUNDRED EIGHTY-THREE-B OF  THIS
       S. 2609--D                         78                         A. 3009--D

    1  CHAPTER,  OR  (B) WITHIN SUCH A TERMINAL WHERE IT HAS BEEN SO DELIVERED.
    2  PROVIDED, HOWEVER, THAT THE EXEMPTION SET  FORTH  IN  THIS  SUBPARAGRAPH
    3  SHALL NOT APPLY TO ANY HIGHWAY DIESEL MOTOR FUEL ONCE IT IS REMOVED FROM
    4  A TERMINAL, OTHER THAN BY PIPELINE, BARGE, TANKER OR OTHER VESSEL.
    5    S  11.  Section  1812-c of the tax law, as added by chapter 276 of the
    6  laws of 1986, is amended to read as follows:
    7    S 1812-c. Person not licensed as terminal operator.  Any  person  who,
    8  while  not  licensed  as  such  pursuant  to  the  provisions of article
    9  twelve-A of this chapter, operates as a terminal operator as defined  in
   10  subdivision  thirteen of section two hundred eighty-two of this chapter,
   11  except where all of the motor fuel OR DIESEL MOTOR FUEL  stored  in  the
   12  storage  facility  is  solely for such person's own use and consumption,
   13  shall be guilty of a class E felony.
   14    S 12. This act shall take effect August 1,  2013;  provided,  however,
   15  that  the  amendments  made to paragraph 2 of subdivision (a) of section
   16  1102 of the tax law made by section nine of this act shall be subject to
   17  the expiration and reversion of such paragraph pursuant to section 19 of
   18  part W-1 of chapter 109 of the laws of 2006, as amended, when upon  such
   19  date the provisions of section ten of this act shall take effect.

   20                                   PART X

   21    Section  1. Subdivision 3 of section 504 of the tax law, as amended by
   22  chapter 194 of the laws of 1963, is amended to read as follows:
   23    3. [Owned and operated] (A) OPERATED by a farmer OR BY A  PERSON  THAT
   24  BEARS THE RELATIONSHIP TO SUCH FARMER DESCRIBED IN PARAGRAPH (B) OF THIS
   25  SUBDIVISION and used exclusively by such farmer OR SUCH PERSON in trans-
   26  porting  [his]  SUCH FARMER'S own agricultural commodities and products,
   27  pulpwood or livestock, including the packed, processed, or  manufactured
   28  products  thereof,  that  were  originally grown or raised on [his] SUCH
   29  FARMER'S farm, lands or orchard, or when used to transport supplies  and
   30  equipment  to  [his] SUCH FARMER'S farm or orchard that are consumed and
   31  used thereon or when operated by [a]  SUCH  farmer  OR  SUCH  PERSON  in
   32  transporting  farm  products  from  a  farm contiguous to [his own] SUCH
   33  FARMER'S FARM.
   34    (B) THE RELATIONSHIP TO SUCH FARMER AS REFERENCED IN PARAGRAPH (A)  OF
   35  THIS SUBDIVISION, SHALL INCLUDE:
   36    (I) MEMBERS OF A FAMILY, INCLUDING SPOUSES, ANCESTORS, LINEAL DESCEND-
   37  ANTS,  BROTHERS  AND  SISTERS  (WHETHER BY THE WHOLE OR HALF BLOOD), AND
   38  ENTITIES RELATED TO SUCH A FAMILY MEMBER AS DESCRIBED  IN  SUBPARAGRAPHS
   39  (II) THROUGH (IV) OF THIS PARAGRAPH;
   40    (II)  A  SHAREHOLDER  AND A CORPORATION MORE THAN FIFTY PERCENT OF THE
   41  VALUE OF THE OUTSTANDING STOCK OF WHICH IS OWNED OR CONTROLLED  DIRECTLY
   42  OR INDIRECTLY BY SUCH SHAREHOLDER;
   43    (III) A PARTNER AND A PARTNERSHIP MORE THAN FIFTY PERCENT OF THE CAPI-
   44  TAL  OR  PROFITS  INTEREST  IN  WHICH IS OWNED OR CONTROLLED DIRECTLY OR
   45  INDIRECTLY BY SUCH PARTNER;
   46    (IV) A BENEFICIARY AND A TRUST MORE THAN FIFTY PERCENT OF THE  BENEFI-
   47  CIAL  INTEREST IN WHICH IS OWNED OR CONTROLLED DIRECTLY OR INDIRECTLY BY
   48  SUCH BENEFICIARY;
   49    (V) TWO OR MORE CORPORATIONS, PARTNERSHIPS, ASSOCIATIONS,  OR  TRUSTS,
   50  OR  ANY  COMBINATION  THEREOF,  WHICH  ARE  OWNED  OR CONTROLLED, EITHER
   51  DIRECTLY OR INDIRECTLY, BY THE SAME PERSON, CORPORATION OR OTHER ENTITY,
   52  OR INTERESTS; AND
   53    (VI) A GRANTOR OF A TRUST AND SUCH TRUST.
       S. 2609--D                         79                         A. 3009--D

    1    S 2. This act shall take effect on the first day of  the  first  month
    2  next occurring 60 days after this act shall have become a law.

    3                                   PART Y

    4    Section  1. Subsection (c) of section 612 of the tax law is amended by
    5  adding a new paragraph 39 to read as follows:
    6    (39) IN THE CASE OF A TAXPAYER WHO IS A SMALL BUSINESS WHO  HAS  BUSI-
    7  NESS  INCOME  AND/OR  FARM  INCOME  AS DEFINED IN THE LAWS OF THE UNITED
    8  STATES, AN AMOUNT EQUAL TO THREE PERCENT OF THE  NET  ITEMS  OF  INCOME,
    9  GAIN,  LOSS AND DEDUCTION ATTRIBUTABLE TO SUCH BUSINESS OR FARM ENTERING
   10  INTO FEDERAL ADJUSTED GROSS INCOME, BUT NOT LESS THAN ZERO, FOR  TAXABLE
   11  YEARS  BEGINNING  AFTER  TWO THOUSAND THIRTEEN, AN AMOUNT EQUAL TO THREE
   12  AND THREE-QUARTERS PERCENT OF THE NET ITEMS OF INCOME,  GAIN,  LOSS  AND
   13  DEDUCTION  ATTRIBUTABLE  TO  SUCH BUSINESS OR FARM ENTERING INTO FEDERAL
   14  ADJUSTED GROSS INCOME, BUT NOT LESS THAN ZERO, FOR TAXABLE YEARS  BEGIN-
   15  NING AFTER TWO THOUSAND FOURTEEN, AND AN AMOUNT EQUAL TO FIVE PERCENT OF
   16  THE  NET  ITEMS OF INCOME, GAIN, LOSS AND DEDUCTION ATTRIBUTABLE TO SUCH
   17  BUSINESS OR FARM ENTERING INTO FEDERAL ADJUSTED GROSS  INCOME,  BUT  NOT
   18  LESS  THAN ZERO, FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND FIFTEEN.
   19  FOR THE PURPOSES OF THIS PARAGRAPH, THE TERM SMALL BUSINESS SHALL MEAN A
   20  SOLE PROPRIETOR OR A FARM BUSINESS  WHO  EMPLOYS  ONE  OR  MORE  PERSONS
   21  DURING  THE  TAXABLE  YEAR  AND  WHO HAS NET BUSINESS INCOME OR NET FARM
   22  INCOME OF LESS THAN TWO HUNDRED FIFTY THOUSAND DOLLARS.
   23    S 2. Subdivision (c) of section 11-1712 of the administrative code  of
   24  the  city  of  New York is amended by adding new paragraph 35 to read as
   25  follows:
   26    (35) IN THE CASE OF A TAXPAYER WHO IS A SMALL BUSINESS WHO  HAS  BUSI-
   27  NESS  INCOME  AND/OR  FARM  INCOME  AS DEFINED IN THE LAWS OF THE UNITED
   28  STATES, AN AMOUNT EQUAL TO THREE PERCENT OF THE  NET  ITEMS  OF  INCOME,
   29  GAIN,  LOSS AND DEDUCTION ATTRIBUTABLE TO SUCH BUSINESS OR FARM ENTERING
   30  INTO FEDERAL ADJUSTED GROSS INCOME, BUT NOT LESS THAN ZERO, FOR  TAXABLE
   31  YEARS  BEGINNING  AFTER  TWO THOUSAND THIRTEEN, AN AMOUNT EQUAL TO THREE
   32  AND THREE-QUARTERS PERCENT OF THE NET ITEMS OF INCOME,  GAIN,  LOSS  AND
   33  DEDUCTION  ATTRIBUTABLE  TO  SUCH BUSINESS OR FARM ENTERING INTO FEDERAL
   34  ADJUSTED GROSS INCOME, BUT NOT LESS THAN ZERO, FOR TAXABLE YEARS  BEGIN-
   35  NING AFTER TWO THOUSAND FOURTEEN, AND AN AMOUNT EQUAL TO FIVE PERCENT OF
   36  THE  NET  ITEMS OF INCOME, GAIN, LOSS AND DEDUCTION ATTRIBUTABLE TO SUCH
   37  BUSINESS OR FARM ENTERING INTO FEDERAL ADJUSTED GROSS  INCOME,  BUT  NOT
   38  LESS  THAN ZERO, FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND FIFTEEN.
   39  FOR THE PURPOSES OF THIS PARAGRAPH, THE TERM SMALL BUSINESS SHALL MEAN A
   40  SOLE PROPRIETOR OR A FARM BUSINESS  WHO  EMPLOYS  ONE  OR  MORE  PERSONS
   41  DURING  THE  TAXABLE  YEAR  AND  WHO HAS NET BUSINESS INCOME OR NET FARM
   42  INCOME OF LESS THAN TWO HUNDRED FIFTY THOUSAND DOLLARS.
   43    S 3. This act shall take effect immediately.

   44                                   PART Z

   45    Section 1. Paragraph (a) of subdivision 1 of section 210  of  the  tax
   46  law is amended by adding a new subparagraph (vii) to read as follows:
   47    (VII)  FOR  A  QUALIFIED NEW YORK MANUFACTURER, AS DEFINED IN SUBPARA-
   48  GRAPH (VI) OF THIS PARAGRAPH, THE RATE AT WHICH THE TAX IS  COMPUTED  IN
   49  EFFECT  FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
   50  SAND THIRTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND FOURTEEN FOR QUALI-
   51  FIED NEW YORK MANUFACTURERS SHALL BE  REDUCED  BY  NINE  AND  TWO-TENTHS
   52  PERCENT  FOR  TAXABLE  YEARS  COMMENCING  ON OR AFTER JANUARY FIRST, TWO
       S. 2609--D                         80                         A. 3009--D

    1  THOUSAND FOURTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND FIFTEEN, TWELVE
    2  AND THREE-TENTHS PERCENT FOR TAXABLE YEARS COMMENCING ON OR AFTER  JANU-
    3  ARY  FIRST,  TWO THOUSAND FIFTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND
    4  SIXTEEN, FIFTEEN AND FOUR-TENTHS PERCENT FOR TAXABLE YEARS COMMENCING ON
    5  OR  AFTER  JANUARY FIRST, TWO THOUSAND SIXTEEN AND BEFORE JANUARY FIRST,
    6  TWO THOUSAND EIGHTEEN, AND TWENTY-FIVE PERCENT FOR TAXABLE YEARS  BEGIN-
    7  NING ON OR AFTER JANUARY FIRST, TWO THOUSAND EIGHTEEN.
    8    S  2.  Paragraph (b) of subdivision 1 of section 210 of the tax law is
    9  amended by adding a new subparagraph 3 to read as follows:
   10    (3) FOR A QUALIFIED NEW YORK MANUFACTURER, AS DEFINED IN  SUBPARAGRAPH
   11  TWO  OF  THIS PARAGRAPH, THE RATE AT WHICH THE TAX IS COMPUTED IN EFFECT
   12  FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND
   13  THIRTEEN  AND  BEFORE  JANUARY  FIRST,  TWO  THOUSAND  FOURTEEN SHALL BE
   14  REDUCED BY NINE AND TWO-TENTHS PERCENT FOR TAXABLE YEARS  COMMENCING  ON
   15  OR  AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN AND BEFORE JANUARY FIRST,
   16  TWO THOUSAND FIFTEEN, TWELVE AND THREE-TENTHS PERCENT FOR TAXABLE  YEARS
   17  COMMENCING  ON  OR  AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN AND BEFORE
   18  JANUARY FIRST, TWO THOUSAND SIXTEEN, FIFTEEN AND FOUR-TENTHS PERCENT FOR
   19  TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN
   20  AND BEFORE JANUARY FIRST, TWO THOUSAND EIGHTEEN, AND TWENTY-FIVE PERCENT
   21  FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND
   22  EIGHTEEN.
   23    S  3.  Paragraph (c) of subdivision 1 of section 210 of the tax law is
   24  amended by adding a new subparagraph (iii) to read as follows:
   25    (III) FOR A QUALIFIED NEW YORK MANUFACTURER, AS  DEFINED  IN  SUBPARA-
   26  GRAPH  (VI)  OF PARAGRAPH (A) OF THIS SUBDIVISION, THE RATE AT WHICH THE
   27  TAX IS COMPUTED IN EFFECT FOR TAXABLE YEARS BEGINNING ON OR AFTER  JANU-
   28  ARY  FIRST, TWO THOUSAND THIRTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND
   29  FOURTEEN FOR QUALIFIED NEW YORK MANUFACTURERS SHALL BE REDUCED  BY  NINE
   30  AND  TWO-TENTHS PERCENT FOR TAXABLE YEARS COMMENCING ON OR AFTER JANUARY
   31  FIRST, TWO THOUSAND FOURTEEN AND  BEFORE  JANUARY  FIRST,  TWO  THOUSAND
   32  FIFTEEN, TWELVE AND THREE-TENTHS PERCENT FOR TAXABLE YEARS COMMENCING ON
   33  OR  AFTER  JANUARY FIRST, TWO THOUSAND FIFTEEN AND BEFORE JANUARY FIRST,
   34  TWO THOUSAND SIXTEEN, FIFTEEN AND FOUR-TENTHS PERCENT FOR TAXABLE  YEARS
   35  COMMENCING  ON  OR  AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN AND BEFORE
   36  JANUARY FIRST, TWO THOUSAND EIGHTEEN, AND TWENTY-FIVE PERCENT FOR  TAXA-
   37  BLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND EIGHTEEN.
   38    S  4.  Paragraph (d) of subdivision 1 of section 210 of the tax law is
   39  amended by adding a new subparagraph 6 to read as follows:
   40    (6) FOR A QUALIFIED NEW YORK MANUFACTURER, AS DEFINED IN  SUBPARAGRAPH
   41  (VI)  OF  PARAGRAPH  (A)  OF THIS SUBDIVISION, THE AMOUNTS PRESCRIBED IN
   42  SUBPARAGRAPHS ONE AND FOUR OF THIS PARAGRAPH IN EFFECT FOR TAXABLE YEARS
   43  BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND  THIRTEEN  AND  BEFORE
   44  JANUARY  FIRST, TWO THOUSAND FOURTEEN FOR QUALIFIED NEW YORK MANUFACTUR-
   45  ERS SHALL BE REDUCED BY NINE AND TWO-TENTHS PERCENT  FOR  TAXABLE  YEARS
   46  COMMENCING  ON  OR AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN AND BEFORE
   47  JANUARY FIRST, TWO THOUSAND FIFTEEN, TWELVE AND THREE-TENTHS PERCENT FOR
   48  TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN
   49  AND BEFORE JANUARY FIRST, TWO THOUSAND SIXTEEN, FIFTEEN AND  FOUR-TENTHS
   50  PERCENT  FOR  TAXABLE  YEARS  COMMENCING  ON OR AFTER JANUARY FIRST, TWO
   51  THOUSAND SIXTEEN AND BEFORE JANUARY FIRST, TWO  THOUSAND  EIGHTEEN,  AND
   52  TWENTY-FIVE  PERCENT  FOR  TAXABLE  YEARS  BEGINNING ON OR AFTER JANUARY
   53  FIRST, TWO THOUSAND EIGHTEEN.
   54    S 5. This act shall take effect immediately.

   55                                   PART AA
       S. 2609--D                         81                         A. 3009--D

    1    Section 1. Section 210 of the tax law  is  amended  by  adding  a  new
    2  subdivision 23-a to read as follows:
    3    23-A.  HIRE  A  VET CREDIT. (A) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS
    4  BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND  FIFTEEN  AND  BEFORE
    5  JANUARY  FIRST,  TWO  THOUSAND  SEVENTEEN, A TAXPAYER SHALL BE ALLOWED A
    6  CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBDIVISION, AGAINST THE  TAX
    7  IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE
    8  YEAR  AND  FOR  NOT  LESS  THAN THIRTY-FIVE HOURS EACH WEEK, A QUALIFIED
    9  VETERAN WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE  YEAR
   10  IN  WHICH  THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT BY THE
   11  TAXPAYER.  IF THE TAXPAYER CLAIMS THE CREDIT ALLOWED UNDER THIS SUBDIVI-
   12  SION, THE TAXPAYER MAY NOT USE THE HIRING OF A QUALIFIED VETERAN THAT IS
   13  THE BASIS FOR THIS CREDIT IN THE BASIS OF ANY OTHER CREDIT ALLOWED UNDER
   14  THIS ARTICLE.
   15    (B) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL:
   16    (1) WHO SERVED ON ACTIVE DUTY IN THE UNITED  STATES  ARMY,  NAVY,  AIR
   17  FORCE,  MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO SERVED
   18  IN ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE  ARMY
   19  NATIONAL  GUARD,  AIR  NATIONAL  GUARD, NEW YORK GUARD OR NEW YORK NAVAL
   20  MILITIA; WHO WAS RELEASED FROM  ACTIVE  DUTY  BY  GENERAL  OR  HONORABLE
   21  DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE;
   22    (2)  WHO  COMMENCES  EMPLOYMENT  BY THE QUALIFIED TAXPAYER ON OR AFTER
   23  JANUARY FIRST, TWO THOUSAND FOURTEEN,  AND  BEFORE  JANUARY  FIRST,  TWO
   24  THOUSAND SIXTEEN; AND
   25    (3)  WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY, THAT
   26  HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY
   27  WEEK IN THE ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR  TO  HIS  OR
   28  HER EMPLOYMENT BY THE TAXPAYER.
   29    (C)  EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN EMPLOYEE
   30  AND HIRE A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF  QUALIFYING  FOR
   31  THIS CREDIT.
   32    (D) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF
   33  THE  TOTAL  AMOUNT  OF  WAGES  PAID  TO THE QUALIFIED VETERAN DURING THE
   34  VETERAN'S FIRST FULL YEAR OF EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE
   35  QUALIFIED VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B)  OF
   36  SUBDIVISION  ONE  OF  SECTION  EIGHTY-FIVE OF THE CIVIL SERVICE LAW, THE
   37  AMOUNT OF THE CREDIT SHALL BE FIFTEEN PERCENT OF  THE  TOTAL  AMOUNT  OF
   38  WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR
   39  OF EMPLOYMENT. THE CREDIT ALLOWED PURSUANT TO THIS SUBDIVISION SHALL NOT
   40  EXCEED  IN  ANY  TAXABLE  YEAR,  FIVE THOUSAND DOLLARS FOR ANY QUALIFIED
   41  VETERAN AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS  A
   42  DISABLED VETERAN.
   43    (E) 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  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF  THIS  SECTION.
   46  HOWEVER,  IF  THE  AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR
   47  ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY  AMOUNT  OF  CREDIT
   48  NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING
   49  THREE YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR
   50  YEARS.
   51    S  2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
   52  of the tax law is amended by adding a  new  clause  (xxxv)  to  read  as
   53  follows:
   54  (XXXV) HIRE A VET CREDIT           AMOUNT OF CREDIT UNDER SUBDIVISION
   55  UNDER SUBSECTION (A-2)             TWENTY-THREE-A OF SECTION TWO
   56                                     HUNDRED TEN OR SUBSECTION (E-1)
       S. 2609--D                         82                         A. 3009--D

    1                                     OF SECTION FOURTEEN HUNDRED
    2                                     FIFTY-SIX
    3    S  3. Section 606 of the tax law is amended by adding a new subsection
    4  (a-2) to read as follows:
    5    (A-2) HIRE A VET CREDIT. (1) ALLOWANCE OF CREDIT.  FOR  TAXABLE  YEARS
    6  BEGINNING  ON  OR  AFTER  JANUARY FIRST, TWO THOUSAND FIFTEEN AND BEFORE
    7  JANUARY FIRST, TWO THOUSAND SEVENTEEN, A TAXPAYER  SHALL  BE  ALLOWED  A
    8  CREDIT,  TO  BE COMPUTED AS PROVIDED IN THIS SUBSECTION, AGAINST THE TAX
    9  IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE
   10  YEAR AND FOR NOT LESS THAN THIRTY-FIVE  HOURS  EACH  WEEK,  A  QUALIFIED
   11  VETERAN  WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE YEAR
   12  IN WHICH THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT  BY  THE
   13  TAXPAYER.    IF  THE  TAXPAYER  CLAIMS  THE  CREDIT  ALLOWED  UNDER THIS
   14  SUBSECTION, THE TAXPAYER MAY NOT USE THE HIRING OF A  QUALIFIED  VETERAN
   15  THAT  IS  THE  BASIS  FOR  THIS  CREDIT IN THE BASIS OF ANY OTHER CREDIT
   16  ALLOWED UNDER THIS ARTICLE.
   17    (2) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL:
   18    (A) WHO SERVED ON ACTIVE DUTY IN THE UNITED  STATES  ARMY,  NAVY,  AIR
   19  FORCE,  MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO SERVED
   20  IN ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE  ARMY
   21  NATIONAL  GUARD,  AIR  NATIONAL  GUARD, NEW YORK GUARD OR NEW YORK NAVAL
   22  MILITIA; WHO WAS RELEASED FROM  ACTIVE  DUTY  BY  GENERAL  OR  HONORABLE
   23  DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE;
   24    (B)  WHO  COMMENCES  EMPLOYMENT  BY THE QUALIFIED TAXPAYER ON OR AFTER
   25  JANUARY FIRST, TWO THOUSAND FOURTEEN,  AND  BEFORE  JANUARY  FIRST,  TWO
   26  THOUSAND SIXTEEN; AND
   27    (C)  WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY, THAT
   28  HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY
   29  WEEK IN THE ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR  TO  HIS  OR
   30  HER EMPLOYMENT BY THE TAXPAYER.
   31    (3)  EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN EMPLOYEE
   32  AND HIRE A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF  QUALIFYING  FOR
   33  THIS CREDIT.
   34    (4) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF
   35  THE TOTAL AMOUNT OF WAGES PAID TO HE QUALIFIED VETERAN DURING THE VETER-
   36  AN'S  FIRST  FULL  YEAR  OF  EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE
   37  QUALIFIED VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B)  OF
   38  SUBDIVISION  ONE  OF  SECTION  EIGHTY-FIVE OF THE CIVIL SERVICE LAW, THE
   39  AMOUNT OF THE CREDIT SHALL BE FIFTEEN PERCENT OF  THE  TOTAL  AMOUNT  OF
   40  WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR
   41  OF  EMPLOYMENT. THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION SHALL NOT
   42  EXCEED IN ANY TAXABLE YEAR, FIVE  THOUSAND  DOLLARS  FOR  ANY  QUALIFIED
   43  VETERAN  AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS A
   44  DISABLED VETERAN.
   45    (5) CARRYOVER. IF THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBSECTION
   46  FOR ANY TAXABLE YEAR EXCEEDS THE  TAXPAYER'S  TAX  FOR  SUCH  YEAR,  ANY
   47  AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER
   48  TO THE FOLLOWING THREE YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX
   49  FOR SUCH YEAR OR YEARS.
   50    S 4. Section 1456 of the tax law is amended by adding a new subsection
   51  (e-1) to read as follows:
   52    (E-1)  HIRE  A  VET CREDIT. (1) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS
   53  BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND  FIFTEEN  AND  BEFORE
   54  JANUARY  FIRST,  TWO  THOUSAND  SEVENTEEN, A TAXPAYER SHALL BE ALLOWED A
   55  CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBSECTION, AGAINST  THE  TAX
   56  IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE
       S. 2609--D                         83                         A. 3009--D

    1  YEAR  AND  FOR  NOT  LESS  THAN THIRTY-FIVE HOURS EACH WEEK, A QUALIFIED
    2  VETERAN WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE  YEAR
    3  IN  WHICH  THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT BY THE
    4  TAXPAYER.    IF  THE  TAXPAYER  CLAIMS  THE  CREDIT  ALLOWED  UNDER THIS
    5  SUBSECTION, THE TAXPAYER MAY NOT USE THE HIRING OF A  QUALIFIED  VETERAN
    6  THAT  IS  THE  BASIS  FOR  THIS  CREDIT IN THE BASIS OF ANY OTHER CREDIT
    7  ALLOWED IN THIS ARTICLE.
    8    (2) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL:
    9    (A) WHO SERVED ON ACTIVE DUTY IN THE UNITED  STATES  ARMY,  NAVY,  AIR
   10  FORCE,  MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO SERVED
   11  IN ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE  ARMY
   12  NATIONAL  GUARD,  AIR  NATIONAL  GUARD, NEW YORK GUARD OR NEW YORK NAVAL
   13  MILITIA; WHO WAS RELEASED FROM  ACTIVE  DUTY  BY  GENERAL  OR  HONORABLE
   14  DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE;
   15    (B)  WHO  COMMENCES  EMPLOYMENT  BY THE QUALIFIED TAXPAYER ON OR AFTER
   16  JANUARY FIRST, TWO THOUSAND FOURTEEN,  AND  BEFORE  JANUARY  FIRST,  TWO
   17  THOUSAND SIXTEEN; AND
   18    (C)  WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY, THAT
   19  HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY
   20  WEEK IN THE ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR  TO  HIS  OR
   21  HER EMPLOYMENT BY THE TAXPAYER.
   22    (3)  EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN EMPLOYEE
   23  AND HIRE A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF  QUALIFYING  FOR
   24  THIS CREDIT.
   25    (4) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF
   26  THE  TOTAL  AMOUNT  OF  WAGES  PAID  TO THE QUALIFIED VETERAN DURING THE
   27  VETERAN'S FIRST FULL YEAR OF EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE
   28  QUALIFIED VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B)  OF
   29  SUBDIVISION  ONE  OF  SECTION  EIGHTY-FIVE OF THE CIVIL SERVICE LAW, THE
   30  AMOUNT OF THE CREDIT SHALL BE FIFTEEN PERCENT OF  THE  TOTAL  AMOUNT  OF
   31  WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR
   32  OF EMPLOYMENT.  THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION SHALL NOT
   33  EXCEED  IN  ANY  TAXABLE  YEAR,  FIVE THOUSAND DOLLARS FOR ANY QUALIFIED
   34  VETERAN AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS  A
   35  DISABLED VETERAN.
   36    (5)  CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXA-
   37  BLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR  TO  LESS  THAN  THE
   38  AMOUNT  PRESCRIBED IN PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR-
   39  TEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
   40  IT ALLOWABLE UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE  TAX
   41  TO SUCH 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    S 5. Section 1511 of the tax law is amended by adding a  new  subdivi-
   45  sion (g-1) to read as follows:
   46    (G-1)  HIRE  A  VET CREDIT. (1) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS
   47  BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND  FIFTEEN  AND  BEFORE
   48  JANUARY  FIRST,  TWO  THOUSAND  SEVENTEEN, A TAXPAYER SHALL BE ALLOWED A
   49  CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBDIVISION, AGAINST THE  TAX
   50  IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE
   51  YEAR  AND  FOR  NOT  LESS  THAN THIRTY-FIVE HOURS EACH WEEK, A QUALIFIED
   52  VETERAN WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE  YEAR
   53  IN  WHICH  THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT BY THE
   54  TAXPAYER.  IF THE TAXPAYER CLAIMS THE CREDIT ALLOWED UNDER THIS SUBDIVI-
   55  SION, THE TAXPAYER MAY NOT USE THE HIRING OF A QUALIFIED VETERAN THAT IS
       S. 2609--D                         84                         A. 3009--D

    1  THE BASIS FOR THIS CREDIT IN THE BASIS OF ANY OTHER CREDIT ALLOWED UNDER
    2  THIS ARTICLE.
    3    (2) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL:
    4    (A)  WHO  SERVED  ON  ACTIVE DUTY IN THE UNITED STATES ARMY, NAVY, AIR
    5  FORCE, MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO  SERVED
    6  IN  ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE ARMY
    7  NATIONAL GUARD, AIR NATIONAL GUARD, NEW YORK GUARD  OR  NEW  YORK  NAVAL
    8  MILITIA;  WHO  WAS  RELEASED  FROM  ACTIVE  DUTY BY GENERAL OR HONORABLE
    9  DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE;
   10    (B) WHO COMMENCES EMPLOYMENT BY THE QUALIFIED  TAXPAYER  ON  OR  AFTER
   11  JANUARY  FIRST,  TWO  THOUSAND  FOURTEEN,  AND BEFORE JANUARY FIRST, TWO
   12  THOUSAND SIXTEEN; AND
   13    (C) WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY,  THAT
   14  HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY
   15  WEEK  IN  THE  ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR TO HIS OR
   16  HER EMPLOYMENT BY THE TAXPAYER.
   17    (3) EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN  EMPLOYEE
   18  AND  HIRE  A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF QUALIFYING FOR
   19  THIS CREDIT.
   20    (4) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF
   21  THE TOTAL AMOUNT OF WAGES PAID  TO  THE  QUALIFIED  VETERAN  DURING  THE
   22  VETERAN'S FIRST FULL YEAR OF EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE
   23  QUALIFIED  VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B) OF
   24  SUBDIVISION ONE OF SECTION EIGHTY-FIVE OF THE  CIVIL  SERVICE  LAW,  THE
   25  AMOUNT  OF  THE  CREDIT  SHALL BE FIFTEEN PERCENT OF THE TOTAL AMOUNT OF
   26  WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR
   27  OF EMPLOYMENT.  THE CREDIT ALLOWED PURSUANT TO  THIS  SUBDIVISION  SHALL
   28  NOT  EXCEED IN ANY TAXABLE YEAR, FIVE THOUSAND DOLLARS FOR ANY QUALIFIED
   29  VETERAN AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS  A
   30  DISABLED VETERAN.
   31    (5) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXA-
   32  BLE  YEAR  SHALL  NOT  REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE
   33  AMOUNT PRESCRIBED IN  PARAGRAPH  FOUR  OF  SUBDIVISION  (A)  OF  SECTION
   34  FIFTEEN  HUNDRED  TWO  OF  THIS ARTICLE OR THE MINIMUM TAX PRESCRIBED IN
   35  SECTION FIFTEEN HUNDRED TWO-A OF THIS ARTICLE, WHICHEVER IS  APPLICABLE.
   36  HOWEVER,  IF  THE  AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR
   37  ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY  AMOUNT  OF  CREDIT
   38  NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING
   39  THREE YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR
   40  YEARS.
   41    S 6. This act shall take effect immediately.

   42                                   PART BB

   43    Section  1. Paragraphs (a) and (b) of subdivision 6 of section 18-a of
   44  the public service law, as added by section 4 of part NN of  chapter  59
   45  of the laws of 2009, are amended to read as follows:
   46    (a)  Notwithstanding any provision of law to the contrary, and subject
   47  to the exceptions provided for in paragraph (b) of this subdivision, for
   48  the state fiscal year beginning on April first, two  thousand  nine  and
   49  [four]  EIGHT  state fiscal years thereafter, a temporary annual assess-
   50  ment (hereinafter "temporary state energy and utility service  conserva-
   51  tion assessment") is hereby imposed on public utility companies (includ-
   52  ing  for  the  purposes  of  this  subdivision municipalities other than
   53  municipalities as defined in section  eighty-nine-l  of  this  chapter),
   54  corporations (including for purposes of this subdivision the Long Island
       S. 2609--D                         85                         A. 3009--D

    1  power  authority),  and  persons  subject to the commission's regulation
    2  (hereinafter such public utility companies,  corporations,  and  persons
    3  are referred to collectively as the "utility entities") to encourage the
    4  conservation  of  energy  and  other  resources provided through utility
    5  entities, to be assessed in the manner  provided  in  this  subdivision;
    6  provided,  however, that such assessment shall not be imposed upon tele-
    7  phone corporations as defined in subdivision seventeen of section two of
    8  this article.
    9    (b) The  temporary  state  energy  and  utility  service  conservation
   10  assessment shall be [equal to two] BASED UPON THE FOLLOWING percentum of
   11  the  utility  entity's  gross operating revenues derived from intrastate
   12  utility operations in  the  last  preceding  calendar  year,  minus  the
   13  amount,  if any, that such utility entity is assessed pursuant to subdi-
   14  visions one and two of this section for the corresponding  state  fiscal
   15  year period: (1) TWO PERCENTUM FOR THE STATE FISCAL YEAR BEGINNING APRIL
   16  FIRST,  TWO  THOUSAND THIRTEEN AND THE STATE FISCAL YEAR BEGINNING APRIL
   17  FIRST, TWO THOUSAND FOURTEEN; (2) ONE AND THREE-QUARTERS  PERCENTUM  FOR
   18  THE  STATE  FISCAL YEAR BEGINNING APRIL FIRST, TWO THOUSAND FIFTEEN; AND
   19  (3) ONE AND ONE-HALF PERCENTUM FOR THE STATE FISCAL YEAR BEGINNING APRIL
   20  FIRST, TWO THOUSAND SIXTEEN. WITH RESPECT TO THE TEMPORARY STATE  ENERGY
   21  AND  UTILITY  SERVICE  CONSERVATION  ASSESSMENT TO BE PAID FOR THE STATE
   22  FISCAL YEAR BEGINNING APRIL FIRST, TWO THOUSAND SEVENTEEN  AND  NOTWITH-
   23  STANDING  CLAUSE  (I) OF PARAGRAPH (D) OF THIS SUBDIVISION, ON OR BEFORE
   24  MARCH TENTH, TWO THOUSAND  SEVENTEEN,  UTILITY  ENTITIES  SHALL  MAKE  A
   25  PAYMENT EQUAL TO ONE-HALF OF THE ASSESSMENT PAID BY SUCH ENTITIES PURSU-
   26  ANT  TO  THIS  PARAGRAPH  FOR  THE  STATE FISCAL YEAR BEGINNING ON APRIL
   27  FIRST, TWO THOUSAND SIXTEEN. With  respect  to  the  Long  Island  power
   28  authority,  the  temporary state energy and utility service conservation
   29  assessment shall be [equal to one] BASED UPON THE FOLLOWING percentum of
   30  such authority's gross operating revenues derived from intrastate utili-
   31  ty operations in the last preceding calendar year: (1) ONE PERCENTUM FOR
   32  THE STATE FISCAL YEAR BEGINNING APRIL FIRST, TWO THOUSAND  THIRTEEN  AND
   33  THE  STATE FISCAL YEAR BEGINNING APRIL FIRST, TWO THOUSAND FOURTEEN; (2)
   34  THREE-QUARTERS OF ONE PERCENTUM FOR  THE  STATE  FISCAL  YEAR  BEGINNING
   35  APRIL  FIRST,  TWO  THOUSAND FIFTEEN; AND (3) ONE-HALF PERCENTUM FOR THE
   36  STATE FISCAL YEAR BEGINNING APRIL  FIRST,  TWO  THOUSAND  SIXTEEN.  WITH
   37  RESPECT  TO  THE TEMPORARY STATE ENERGY AND UTILITY SERVICE CONSERVATION
   38  ASSESSMENT TO BE PAID FOR THE STATE FISCAL YEAR BEGINNING  APRIL  FIRST,
   39  TWO  THOUSAND  SEVENTEEN AND NOTWITHSTANDING CLAUSE (I) OF PARAGRAPH (D)
   40  OF THIS SUBDIVISION, ON OR BEFORE MARCH TENTH, TWO  THOUSAND  SEVENTEEN,
   41  THE  LONG  ISLAND POWER AUTHORITY SHALL MAKE A PAYMENT EQUAL TO ONE-HALF
   42  OF THE ASSESSMENT IT PAID FOR THE STATE FISCAL YEAR BEGINNING  ON  APRIL
   43  FIRST,  TWO  THOUSAND  SIXTEEN.  No corporation or person subject to the
   44  jurisdiction of the commission only with respect to safety, or the power
   45  authority of the state of New York, shall be subject  to  the  temporary
   46  state  energy  and  utility service conservation assessment provided for
   47  under this subdivision. Utility entities whose gross operating  revenues
   48  from  intrastate utility operations are five hundred thousand dollars or
   49  less in the preceding calendar year shall not be subject to  the  tempo-
   50  rary state energy and utility service conservation assessment. The mini-
   51  mum  temporary  state energy and utility service conservation assessment
   52  to be billed to any utility entity whose gross revenues from  intrastate
   53  utility operations are in excess of five hundred thousand dollars in the
   54  preceding calendar year shall be two hundred dollars.
   55    S  2. Section 6 of part NN of chapter 59 of the laws of 2009, amending
   56  the public service law relating  to  financing  the  operations  of  the
       S. 2609--D                         86                         A. 3009--D

    1  department  of public service, the public service commission, department
    2  support and energy management services provided by other state agencies,
    3  increasing the utility assessment cap  and  the  minimum  threshold  for
    4  collection  thereunder,  and  establishing  a temporary state energy and
    5  utility service conservation assessment and providing for the collection
    6  thereof, is amended to read as follows:
    7    S 6. This act shall take effect immediately; provided,  however,  that
    8  subdivision  6  of  section  18-a of the public service law, as added by
    9  section four of this act shall take  effect  April  1,  2009  and  shall
   10  expire  and  be  deemed  repealed March 31, [2014] 2017; [and] provided,
   11  [further,] that if section four of this act shall become law after April
   12  1, 2009, it shall take effect immediately and shall be  deemed  to  have
   13  been  in full force and effect on and after April 1, 2009; AND PROVIDED,
   14  FURTHER, THAT THE PROVISIONS OF SUBDIVISION 6 OF  SECTION  18-A  OF  THE
   15  PUBLIC  SERVICE  LAW  SHALL  CONTINUE  IN EFFECT WITH REGARD TO ALL SUCH
   16  ASSESSMENTS INCURRED PRIOR TO REPEAL OF THIS SECTION.
   17    S 3. This act shall take effect immediately and  shall  be  deemed  to
   18  have been in full force and effect on and after April 1, 2013; provided,
   19  however,  that  the  amendments  to subdivision 6 of section 18-a of the
   20  public service law made by section one of this act shall not affect  the
   21  repeal of such subdivision and shall be deemed to be repealed therewith.

   22                                   PART CC

   23    Section  1.  Section  606  of  the  tax law is amended by adding a new
   24  subsection (vv) to read as follows:
   25    (VV) FAMILY TAX RELIEF CREDIT. 1. AN INDIVIDUAL TAXPAYER WHO MEETS THE
   26  ELIGIBILITY STANDARDS IN PARAGRAPH  TWO  OF  THIS  SUBSECTION  SHALL  BE
   27  ALLOWED  A  CREDIT  AGAINST  THE  TAXES IMPOSED BY THIS ARTICLE OF THREE
   28  HUNDRED FIFTY DOLLARS PER RETURN FOR TAX YEARS  TWO  THOUSAND  FOURTEEN,
   29  TWO THOUSAND FIFTEEN, AND TWO THOUSAND SIXTEEN.
   30    2.  TO  BE  ELIGIBLE FOR THE CREDIT, THE TAXPAYER (OR TAXPAYERS FILING
   31  JOINT RETURNS) ON THE PERSONAL INCOME TAX RETURN FILED FOR  THE  TAXABLE
   32  YEAR  TWO YEARS PRIOR, MUST HAVE (A) BEEN A RESIDENT, (B) CLAIMED ONE OR
   33  MORE DEPENDENT CHILDREN WHO WERE UNDER THE AGE OF SEVENTEEN ON THE  LAST
   34  DAY  OF  THE  TAXABLE YEAR, (C) HAD NEW YORK ADJUSTED GROSS INCOME OF AT
   35  LEAST FORTY THOUSAND DOLLARS BUT NO GREATER THAN THREE HUNDRED  THOUSAND
   36  DOLLARS, AND (D) HAD A TAX LIABILITY AS DETERMINED UNDER PARAGRAPH THREE
   37  OF THIS SUBSECTION OF GREATER THAN OR EQUAL TO ZERO.
   38    3.  FOR PURPOSES OF THIS SUBSECTION, TAX LIABILITY SHALL BE DETERMINED
   39  BY APPLYING THE TAX RATE CALCULATIONS IN SECTIONS SIX  HUNDRED  ONE  AND
   40  SIX HUNDRED ONE-A OF THIS PART TO THE TAXPAYER'S TAXABLE INCOME AND THEN
   41  SUBTRACTING  FROM  THAT  AMOUNT ANY OTHER TAX CREDITS ALLOWED UNDER THIS
   42  SECTION OR SECTION SIX HUNDRED TWENTY OF THIS ARTICLE.
   43    4. FOR EACH  YEAR  THIS  CREDIT  IS  ALLOWED,  ON  OR  BEFORE  OCTOBER
   44  FIFTEENTH  OF SUCH YEAR, THE COMMISSIONER SHALL DETERMINE THE TAXPAYER'S
   45  ELIGIBILITY FOR THIS CREDIT UTILIZING THE INFORMATION AVAILABLE  TO  THE
   46  COMMISSIONER  ON THE TAXPAYER'S PERSONAL INCOME TAX RETURN FILED FOR THE
   47  TAXABLE YEAR TWO YEARS PRIOR TO THE TAXABLE YEAR IN WHICH THE CREDIT  IS
   48  ALLOWED. FOR THOSE TAXPAYERS WHOM THE COMMISSIONER HAS DETERMINED ELIGI-
   49  BLE  FOR  THIS CREDIT, THE COMMISSIONER SHALL ADVANCE A PAYMENT OF THREE
   50  HUNDRED FIFTY DOLLARS. WHEN A TAXPAYER FILES HIS OR HER RETURN  FOR  THE
   51  TAXABLE YEAR, SUCH TAXPAYER SHALL PROPERLY RECONCILE THAT PAYMENT ON HIS
   52  OR HER RETURN.
   53    5.  IF  THE  AMOUNT  OF THE CREDIT ALLOWED UNDER THIS SUBSECTION SHALL
   54  EXCEED THE TAXPAYER'S TAX FOR THE TAXABLE  YEAR,  THE  EXCESS  SHALL  BE
       S. 2609--D                         87                         A. 3009--D

    1  TREATED  AS  AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORD-
    2  ANCE WITH THE PROVISIONS OF SIX  HUNDRED  EIGHTY-SIX  OF  THIS  ARTICLE,
    3  PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
    4    S 2. This act shall take effect immediately.

    5                                   PART DD

    6    Section  1. Subdivision (b) of section 25-a of the labor law, as added
    7  by section 1 of part D of chapter 56 of the laws of 2011, is amended  to
    8  read as follows:
    9    (b)  Definitions.  (1) The term "qualified employer" means an employer
   10  that has been certified by the commissioner to participate  in  the  New
   11  York  youth works tax credit program and that employs one or more quali-
   12  fied employees.
   13    (2) The term "qualified employee" means an individual:
   14    (i) who is between the age of sixteen and twenty-four;
   15    (ii) who resides in a city with a population of [sixty-two] FIFTY-FIVE
   16  thousand or more or a town with a  population  of  four  hundred  eighty
   17  thousand or more;
   18    (iii)  who is low-income or at-risk, as those terms are defined by the
   19  commissioner;
   20    (iv) who is unemployed prior to being hired by the qualified employer;
   21  and
   22    (v) who will be working for the qualified employer in a  full-time  or
   23  part-time position that pays wages that are equivalent to the wages paid
   24  for similar jobs, with appropriate adjustments for experience and train-
   25  ing,  and  for which no other employee has been terminated, or where the
   26  employer has not otherwise reduced its workforce by  involuntary  termi-
   27  nations  with  the  intention  of  filling the vacancy by creating a new
   28  hire.
   29    S 2. Subdivisions (a) and (d) of section 25-a of the labor law, subdi-
   30  vision (a) as added by section 1 of part D of chapter 56 of the laws  of
   31  2011 and subdivision (d) as amended by section 1 of part T of chapter 59
   32  of the laws of 2012, are amended to read as follows:
   33    (a) The commissioner is authorized to establish and administer the New
   34  York youth works tax credit program to provide tax incentives to employ-
   35  ers  for  employing  at  risk youth in part-time and full-time positions
   36  [in]. THERE WILL BE FIVE DISTINCT POOLS OF TAX INCENTIVES.  PROGRAM  ONE
   37  WILL  COVER  TAX  INCENTIVES  ALLOCATED  FOR two thousand twelve and two
   38  thousand thirteen.  PROGRAM TWO WILL COVER TAX INCENTIVES  ALLOCATED  IN
   39  TWO  THOUSAND  FOURTEEN TO BE USED IN TWO THOUSAND FOURTEEN AND FIFTEEN.
   40  PROGRAM THREE WILL  COVER  TAX  INCENTIVES  ALLOCATED  IN  TWO  THOUSAND
   41  FIFTEEN  TO  BE  USED  IN TWO THOUSAND FIFTEEN AND SIXTEEN. PROGRAM FOUR
   42  WILL COVER TAX INCENTIVES ALLOCATED IN TWO THOUSAND SIXTEEN TO  BE  USED
   43  IN  TWO  THOUSAND  SIXTEEN  AND SEVENTEEN.   PROGRAM FIVE WILL COVER TAX
   44  INCENTIVES ALLOCATED IN TWO THOUSAND SEVENTEEN TO BE USED IN  TWO  THOU-
   45  SAND  SEVENTEEN AND EIGHTEEN. The commissioner is authorized to allocate
   46  up to twenty-five million dollars of tax credits  under  [this]  program
   47  ONE,  SIX MILLION DOLLARS OF  TAX CREDITS UNDER PROGRAM TWO, SIX MILLION
   48  DOLLARS OF TAX CREDITS UNDER PROGRAM THREE, AND SIX MILLION  DOLLARS  OF
   49  TAX  CREDITS  UNDER PROGRAM FOUR, AND SIX MILLION DOLLARS OF TAX CREDITS
   50  UNDER PROGRAM FIVE.
   51    (d) To participate in the New York youth works tax credit program,  an
   52  employer must submit an application (in a form prescribed by the commis-
   53  sioner) to the commissioner after January first, two thousand twelve but
   54  no  later  than November thirtieth, two thousand twelve FOR PROGRAM ONE,
       S. 2609--D                         88                         A. 3009--D

    1  AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN BUT NO  LATER  THAN  NOVEMBER
    2  THIRTIETH,  TWO  THOUSAND FOURTEEN FOR PROGRAM TWO, AFTER JANUARY FIRST,
    3  TWO THOUSAND FIFTEEN BUT NO LATER THAN NOVEMBER THIRTIETH, TWO  THOUSAND
    4  FIFTEEN FOR PROGRAM THREE, AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN BUT
    5  NO LATER THAN NOVEMBER THIRTIETH, TWO THOUSAND SIXTEEN FOR PROGRAM FOUR,
    6  AND AFTER JANUARY FIRST, TWO THOUSAND SEVENTEEN BUT NO LATER THAN NOVEM-
    7  BER  THIRTIETH,  TWO  THOUSAND SEVENTEEN FOR PROGRAM FIVE. The qualified
    8  employees must start their employment on or  after  January  first,  two
    9  thousand  twelve  but  no later than December thirty-first, two thousand
   10  twelve FOR PROGRAM ONE, ON OR AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN
   11  BUT NO LATER THAN  DECEMBER  THIRTY-FIRST,  TWO  THOUSAND  FOURTEEN  FOR
   12  PROGRAM  TWO,  ON  OR  AFTER  JANUARY FIRST, TWO THOUSAND FIFTEEN BUT NO
   13  LATER THAN DECEMBER  THIRTY-FIRST,  TWO  THOUSAND  FIFTEEN  FOR  PROGRAM
   14  THREE, ON OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN BUT NO LATER THAN
   15  DECEMBER  THIRTY-FIRST, TWO THOUSAND SIXTEEN FOR PROGRAM FOUR, AND ON OR
   16  AFTER JANUARY FIRST, TWO THOUSAND SEVENTEEN BUT NO LATER  THAN  DECEMBER
   17  THIRTY-FIRST, TWO THOUSAND SEVENTEEN FOR PROGRAM FIVE.  The commissioner
   18  shall  establish  guidelines  and criteria that specify requirements for
   19  employers to participate in the program including criteria for  certify-
   20  ing  qualified  employees.  Any regulations that the commissioner deter-
   21  mines are necessary may be adopted on an emergency basis notwithstanding
   22  anything to the contrary in section two hundred two of the state  admin-
   23  istrative  procedure  act.    Such requirements may include the types of
   24  industries that the employers are engaged in. The commissioner may  give
   25  preference to employers that are engaged in demand occupations or indus-
   26  tries,  or in regional growth sectors, including those identified by the
   27  regional economic development councils, such as  clean  energy,  health-
   28  care,  advanced manufacturing and conservation. In addition, the commis-
   29  sioner shall give preference to  employers  who  offer  advancement  and
   30  employee benefit packages to the qualified individuals.
   31    S 3. This act shall take effect immediately.

   32                                   PART EE

   33    Section  1.  The tax law is amended by adding a new section 38 to read
   34  as follows:
   35    S 38. MINIMUM WAGE REIMBURSEMENT CREDIT. (A) A  TAXPAYER  THAT  IS  AN
   36  ELIGIBLE  EMPLOYER  OR  AN  OWNER  OF AN ELIGIBLE EMPLOYER AS DEFINED IN
   37  SUBDIVISION (B) OF THIS SECTION SHALL BE ELIGIBLE FOR A  CREDIT  AGAINST
   38  THE  TAX  IMPOSED  UNDER ARTICLE NINE, NINE-A, TWENTY-TWO, THIRTY-TWO OR
   39  THIRTY-THREE OF THIS ARTICLE, PURSUANT TO THE PROVISIONS  REFERENCED  IN
   40  SUBDIVISION (E) OF THIS SECTION.
   41    (B)  AN  ELIGIBLE  EMPLOYER  IS  A CORPORATION (INCLUDING A NEW YORK S
   42  CORPORATION), A SOLE PROPRIETORSHIP, A LIMITED LIABILITY  COMPANY  OR  A
   43  PARTNERSHIP.  AN  ELIGIBLE EMPLOYEE IS AN INDIVIDUAL WHO IS (I) EMPLOYED
   44  BY AN ELIGIBLE EMPLOYER IN NEW YORK STATE, (II) PAID AT THE MINIMUM WAGE
   45  RATE AS DEFINED IN ARTICLE NINETEEN OF THE LABOR LAW DURING THE  TAXABLE
   46  YEAR  BY  THE  ELIGIBLE  EMPLOYER, (III) BETWEEN THE AGES OF SIXTEEN AND
   47  NINETEEN DURING THE PERIOD IN WHICH HE OR SHE IS PAID  AT  SUCH  MINIMUM
   48  WAGE RATE BY THE ELIGIBLE EMPLOYER, AND (IV) A STUDENT DURING THE PERIOD
   49  IN WHICH HE OR SHE IS PAID AT SUCH MINIMUM WAGE RATE BY THE TAXPAYER.
   50    (C)  FOR  TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
   51  SAND FOURTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND FIFTEEN, THE AMOUNT
   52  OF THE CREDIT ALLOWED UNDER THIS SECTION SHALL BE EQUAL TO  THE  PRODUCT
   53  OF  THE TOTAL NUMBER OF HOURS WORKED DURING THE TAXABLE YEAR BY ELIGIBLE
   54  EMPLOYEES FOR WHICH THEY WERE PAID AT THE MINIMUM WAGE RATE  AS  DEFINED
       S. 2609--D                         89                         A. 3009--D

    1  IN  ARTICLE NINETEEN OF THE LABOR LAW AND SEVENTY FIVE CENTS.  FOR TAXA-
    2  BLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN  AND
    3  BEFORE  JANUARY  FIRST,  TWO  THOUSAND SIXTEEN, THE AMOUNT OF THE CREDIT
    4  ALLOWED  UNDER  THIS  SECTION SHALL BE EQUAL TO THE PRODUCT OF THE TOTAL
    5  NUMBER OF HOURS DURING THE TAXABLE YEAR WORKED BY ELIGIBLE EMPLOYEES FOR
    6  WHICH THEY WERE PAID AT SUCH MINIMUM WAGE RATE AND ONE DOLLAR AND  THIR-
    7  TY-ONE  CENTS.    FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST,
    8  TWO THOUSAND SIXTEEN AND BEFORE JANUARY FIRST,  TWO  THOUSAND  NINETEEN,
    9  THE  AMOUNT  OF  THE CREDIT ALLOWED UNDER THIS SECTION SHALL BE EQUAL TO
   10  THE PRODUCT OF THE TOTAL NUMBER OF HOURS DURING THE TAXABLE YEAR  WORKED
   11  BY ELIGIBLE EMPLOYEES FOR WHICH THEY WERE PAID AT SUCH MINIMUM WAGE RATE
   12  AND ONE DOLLAR AND THIRTY-FIVE CENTS.  PROVIDED, HOWEVER, IF THE FEDERAL
   13  MINIMUM  WAGE  ESTABLISHED  BY FEDERAL LAW PURSUANT TO 29 U.S.C. SECTION
   14  206 OR ITS SUCCESSORS IS INCREASED  ABOVE  EIGHTY-FIVE  PERCENT  OF  THE
   15  MINIMUM WAGE IN ARTICLE NINETEEN OF THE LABOR LAW, THE DOLLAR AMOUNTS IN
   16  THIS  SUBDIVISION SHALL BE REDUCED TO THE DIFFERENCE BETWEEN THE MINIMUM
   17  WAGE IN ARTICLE NINETEEN OF THE LABOR LAW AND THE FEDERAL MINIMUM  WAGE.
   18  SUCH REDUCTION WOULD TAKE EFFECT ON THE DATE THAT EMPLOYERS ARE REQUIRED
   19  TO PAY SUCH FEDERAL MINIMUM WAGE.
   20    (D)  EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN EMPLOYEE
   21  AND HIRE AN ELIGIBLE EMPLOYEE SOLELY FOR THE PURPOSE OF  QUALIFYING  FOR
   22  THIS  CREDIT.    AN  ELIGIBLE EMPLOYEE WHO IS USED AS THE BASIS FOR THIS
   23  CREDIT MAY NOT BE USED AS THE BASIS OF ANY OTHER  CREDIT  ALLOWED  UNDER
   24  THIS CHAPTER.
   25    (E)  CROSS  REFERENCES: FOR APPLICATION OF THE CREDIT PROVIDED IN THIS
   26  SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
   27    (1) ARTICLE 9: SECTION 187-S.
   28    (2) ARTICLE 9-A: SECTION 210, SUBDIVISION 46.
   29    (3) ARTICLE 22: SECTION 606, SUBSECTION (AAA).
   30    (4) ARTICLE 32: SECTION 1456, SUBSECTION (Z).
   31    (5) ARTICLE 33: SECTION 1511, SUBDIVISION (CC).
   32    S 2. The tax law is amended by adding a new section 187-s to  read  as
   33  follows:
   34    S  187-S MINIMUM WAGE REIMBURSEMENT CREDIT. (A) ALLOWANCE OF CREDIT. A
   35  TAXPAYER SHALL BE ALLOWED A  CREDIT,  TO  BE  COMPUTED  AS  PROVIDED  IN
   36  SECTION  THIRTY-EIGHT OF THIS CHAPTER AGAINST THE TAX IMPOSED BY SECTION
   37  ONE HUNDRED EIGHTY-FIVE OF THIS ARTICLE.
   38    (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS  SECTION  FOR
   39  ANY  TAXABLE  YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN
   40  THE MINIMUM TAX PRESCRIBED IN SUBDIVISION TWO  OF  SECTION  ONE  HUNDRED
   41  EIGHTY-FIVE  OF  THIS ARTICLE.  HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED
   42  UNDER THIS SECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH  AMOUNT,
   43  ANY  AMOUNT  OF  CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR WILL BE
   44  TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED  IN  ACCORD-
   45  ANCE  WITH  THE  PROVISIONS  OF  SECTION ONE THOUSAND EIGHTY-SIX OF THIS
   46  CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF  SECTION
   47  ONE  THOUSAND  EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST
   48  WILL BE PAID THEREON.
   49    S 3. Section 210 of the tax law is amended by adding a new subdivision
   50  46 to read as follows:
   51    46. MINIMUM WAGE REIMBURSEMENT CREDIT.  (A)  ALLOWANCE  OF  CREDIT.  A
   52  TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT,  TO  BE COMPUTED AS PROVIDED IN
   53  SECTION THIRTY-EIGHT OF THIS CHAPTER, AGAINST THE TAX  IMPOSED  BY  THIS
   54  ARTICLE.
   55    (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
   56  FOR ANY TAXABLE YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH  YEAR  TO  LESS
       S. 2609--D                         90                         A. 3009--D

    1  THAN  THE  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF THIS
    2  SECTION. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION
    3  FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CRED-
    4  IT  THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR WILL BE TREATED AS AN OVER-
    5  PAYMENT OF TAX TO  BE  CREDITED  OR  REFUNDED  IN  ACCORDANCE  WITH  THE
    6  PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED,
    7  HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHT-
    8  Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST WILL BE PAID THERE-
    9  ON.
   10    S  4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
   11  of the tax law is amended by adding a  new  clause  (xxxv)  to  read  as
   12  follows:
   13  (XXXV) MINIMUM WAGE REIMBURSEMENT    AMOUNT OF CREDIT UNDER SUBDIVISION
   14  CREDIT UNDER SUBSECTION (AAA)        FORTY-SIX OF SECTION TWO HUNDRED
   15                                       TEN OR SUBSECTION (Z) OF
   16                                       SECTION FOURTEEN HUNDRED
   17                                       FIFTY-SIX
   18    S  5. Section 606 of the tax law is amended by adding a new subsection
   19  (aaa) to read as follows:
   20    (AAA) MINIMUM WAGE REIMBURSEMENT  CREDIT.  (1)  A  TAXPAYER  SHALL  BE
   21  ALLOWED  A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION THIRTY-EIGHT OF
   22  THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   23    (2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT  ALLOWED  UNDER
   24  THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
   25  YEAR, THE EXCESS WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED
   26  OR  REFUNDED  IN  ACCORDANCE  WITH THE PROVISIONS OF SECTION SIX HUNDRED
   27  EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST WILL  BE
   28  PAID THEREON.
   29    S 6. Section 1456 of the tax law is amended by adding a new subsection
   30  (z) to read as follows:
   31    (Z)  MINIMUM  WAGE  REIMBURSEMENT  CREDIT.  (1) ALLOWANCE OF CREDIT. A
   32  TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE  COMPUTED  AS  PROVIDED  UNDER
   33  SECTION  THIRTY-EIGHT  OF  THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS
   34  ARTICLE.
   35    (2) APPLICATION OF CREDIT. THE CREDIT ALLOWED  UNDER  THIS  SUBSECTION
   36  FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE THE TAX DUE FOR
   37  SUCH  YEAR  TO  LESS  THAN  THE  MINIMUM  TAX FIXED BY SUBSECTION (B) OF
   38  SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS  ARTICLE.  HOWEVER,  IF  THE
   39  AMOUNT  OF  CREDIT  OF SUCH CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY
   40  TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, THEN ANY AMOUNT  OF  CREDIT
   41  THUS  NOT  DEDUCTIBLE  SHALL  BE  TREATED AS AN OVERPAYMENT OF TAX TO BE
   42  CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS  OF  SECTION  ONE
   43  THOUSAND  EIGHTY-SIX  OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS
   44  OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF  THIS  CHAPTER
   45  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   46    S  7.  Section 1511 of the tax law is amended by adding a new subdivi-
   47  sion (cc) to read as follows:
   48    (CC) MINIMUM WAGE REIMBURSEMENT CREDIT. (1) ALLOWANCE OF  CREDIT.    A
   49  TAXPAYER  SHALL  BE  ALLOWED  A CREDIT, TO BE COMPUTED AS PROVIDED UNDER
   50  SECTION THIRTY-EIGHT OF THIS CHAPTER, AGAINST THE TAX  IMPOSED  BY  THIS
   51  ARTICLE.
   52    (2)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
   53  FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
   54  THAN  THE  MINIMUM  TAX  FIXED  BY  PARAGRAPH FOUR OF SUBDIVISION (A) OF
   55  SECTION FIFTEEN HUNDRED TWO  OF  THIS  ARTICLE  OR  BY  SECTION  FIFTEEN
   56  HUNDRED  TWO-A OF THIS ARTICLE, WHICHEVER IS APPLICABLE. HOWEVER, IF THE
       S. 2609--D                         91                         A. 3009--D

    1  AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION  FOR  ANY  TAXABLE  YEAR
    2  REDUCES  THE  TAX  TO  SUCH  AMOUNT,  THEN ANY AMOUNT OF CREDIT THUS NOT
    3  DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREATED AS  AN  OVERPAYMENT  OF
    4  TAX  TO  BE  CREDITED  OR  REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF
    5  SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER,  THE
    6  PROVISIONS  OF  SUBSECTION  (C)  OF SECTION ONE THOUSAND EIGHTY-EIGHT OF
    7  THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
    8    S 8. This act shall take effect immediately.

    9                                   PART FF

   10    Section 1. Paragraph 1 of subsection (a) of section 601 of the tax law
   11  as added by section 1 of part A of chapter 56 of the laws  of  2011,  is
   12  amended to read as follows:
   13    (1)  (A)  For  taxable  years  beginning after two thousand eleven and
   14  before two thousand [fifteen] EIGHTEEN:

   15  If the New York taxable income is:    The tax is:
   16  Not over $16,000                      4% of taxable income
   17  Over $16,000 but not over $22,000     $640 plus 4.5% of excess over
   18                                        $16,000
   19  Over $22,000 but not over $26,000     $910 plus 5.25% of excess over
   20                                        $22,000
   21  Over $26,000 but not over $40,000     $1,120 plus 5.90% of excess over
   22                                        $26,000
   23  Over $40,000 but not over $150,000    $1,946 plus 6.45% of excess over
   24                                        $40,000
   25  Over $150,000 but not over $300,000   $9,041 plus 6.65% of excess over
   26                                        $150,000
   27  Over $300,000 but not over $2,000,000 $19,016 plus 6.85% of excess over
   28                                        $300,000
   29  Over $2,000,000                       $135,466 plus 8.82% of excess over
   30                                        $2,000,000

   31    (B) For taxable years beginning after two thousand  [fourteen]  SEVEN-
   32  TEEN, the following brackets and dollar amounts shall apply, as adjusted
   33  by the cost of living adjustment prescribed in section six hundred one-a
   34  of this part for tax years two thousand thirteen [and two thousand four-
   35  teen] THROUGH TWO THOUSAND SEVENTEEN:

   36  If the New York taxable income is:    The tax is:
   37  Not over $16,000                      4% of taxable income
   38  Over $16,000 but not over $22,000     $640 plus 4.5% of excess over
   39                                        $16,000
   40  Over $22,000 but not over $26,000     $910 plus 5.25% of excess over
   41                                        $22,000
   42  Over $26,000 but not over $40,000     $1,120 plus 5.90% of excess over
   43                                        $26,000
   44  Over $40,000                          $1,946 plus 6.85% of excess over
   45                                        $40,000

   46    S  2.  Paragraph  1 of subsection (b) of section 601 of the tax law as
   47  added by section 3 of part A of chapter 56  of  the  laws  of  2011,  is
   48  amended to read as follows:
   49    (1)  (A)  For  taxable  years  beginning after two thousand eleven and
   50  before two thousand [fifteen] EIGHTEEN:
       S. 2609--D                         92                         A. 3009--D

    1  If the New York taxable income is:    The tax is:

    2  Not over $12,000                      4% of taxable income
    3  Over $12,000 but not over $16,500     $480 plus 4.5% of excess over
    4                                        $12,000
    5  Over $16,500 but not over $19,500     $683 plus 5.25% of excess over
    6                                        $16,500
    7  Over $19,500 but not over $30,000     $840 plus 5.90% of excess over
    8                                        $19,500
    9  Over $30,000 but not over $100,000    $1,460 plus 6.45% of excess over
   10                                        $30,000
   11  Over $100,000 but not over $250,000   $5,975 plus 6.65% of excess over
   12                                        $100,000
   13  Over $250,000 but not over $1,500,000 $15,950 plus 6.85% of excess over
   14                                        $250,000
   15  Over $1,500,000                       $101,575 plus 8.82% of excess over
   16                                        $1,500,000

   17    (B)  For  taxable years beginning after two thousand [fourteen] SEVEN-
   18  TEEN, the  following  brackets  and  dollars  amounts  shall  apply,  as
   19  adjusted  by  the  cost  of  living adjustment prescribed in section six
   20  hundred one-a of this part for tax years two thousand thirteen [and  two
   21  thousand fourteen] THROUGH TWO THOUSAND SEVENTEEN:

   22  If the New York taxable income is:    The tax is:
   23  Not over $12,000                      4% of taxable income
   24  Over $12,000 but not over $16,500     $480 plus 4.5% of excess over
   25                                        $12,000
   26  Over $16,500 but not over $19,500     $683 plus 5.25% of excess over
   27                                        $16,500
   28  Over $19,500 but not over $30,000     $840 plus 5.90% of excess over
   29                                        $19,500
   30  Over $30,000                          $1,460 plus 6.85% of excess over
   31                                        $30,000

   32    S  3.  Paragraph  1 of subsection (c) of section 601 of the tax law as
   33  added by section 5 of part A of chapter 56  of  the  laws  of  2011,  is
   34  amended to read as follows:
   35    (1)  (A)  For  taxable  years  beginning after two thousand eleven and
   36  before two thousand [fifteen] EIGHTEEN:

   37  If the New York taxable income is:    The tax is:
   38  Not over $8,000                       4% of taxable income
   39  Over $8,000 but not over $11,000      $320 plus 4.5% of excess over
   40                                        $8,000
   41  Over $11,000 but not over $13,000     $455 plus 5.25% of excess over
   42                                        $11,000
   43  Over $13,000 but not over $20,000     $560 plus 5.90% of excess over
   44                                        $13,000
   45  Over $20,000 but not over $75,000     $973 plus 6.45% of excess over
   46                                        $20,000
   47  Over $75,000 but not over $200,000    $4,521 plus 6.65% of excess over
   48                                        $75,000
   49  Over $200,000 but not over $1,000,000 $12,833 plus 6.85% of excess over
   50                                        $200,000
   51  Over $1,000,000                       $67,633 plus 8.82% of excess over
       S. 2609--D                         93                         A. 3009--D

    1                                        $1,000,000

    2    (B)  For  taxable years beginning after two thousand [fourteen] SEVEN-
    3  TEEN, the  following  brackets  and  dollars  amounts  shall  apply,  as
    4  adjusted  by  the  cost  of  living adjustment prescribed in section six
    5  hundred one-a of this part for tax years two thousand thirteen [and  two
    6  thousand fourteen] THROUGH TWO THOUSAND SEVENTEEN:

    7  If the New York taxable income is:    The tax is:
    8  Not over $8,000                       4% of taxable income
    9  Over $8,000 but not over $11,000      $320 plus 4.5% of excess over
   10                                        $8,000
   11  Over $11,000 but not over $13,000     $455 plus 5.25% of excess over
   12                                        $11,000
   13  Over $13,000 but not over $20,000     $560 plus 5.90% of excess over
   14                                        $13,000
   15  Over $20,000                          $973 plus 6.85% of excess over
   16                                        $20,000

   17    S  4.  The opening paragraph of subsection (d-1) of section 601 of the
   18  tax law as added by section 7 of part A of chapter 56  of  the  laws  of
   19  2011, is amended to read as follows:
   20    Alternative   tax   table   benefit   recapture.  Notwithstanding  the
   21  provisions of subsection (d) of this section, for taxable  years  begin-
   22  ning  after  two thousand eleven and before two thousand [fifteen] EIGH-
   23  TEEN, there is hereby imposed a supplemental tax in addition to the  tax
   24  imposed  under  subsections  (a),  (b)  and  (c) of this section for the
   25  purpose of recapturing the benefit of the tax tables contained  in  such
   26  subsections.  During  these taxable years, any reference in this chapter
   27  to subsection (d) of this section shall be read as a reference  to  this
   28  subsection.
   29    S  5.   Subparagraph (D) of paragraph 1 of subsection (d-1) of section
   30  601 of the tax law, as added by section 7 of part A of chapter 56 of the
   31  laws of 2011, is amended to read as follows:
   32    (D) The tax table benefit is the difference between (i) the amount  of
   33  taxable income set forth in the tax table in paragraph one of subsection
   34  (a)  of this section not subject to the 8.82 percent rate of tax for the
   35  taxable year multiplied by such rate and (ii) the dollar denominated tax
   36  for such amount of taxable income set forth in the tax table  applicable
   37  to  the  taxable year in paragraph one of subsection (a) of this section
   38  less the sum of the tax table benefits in subparagraphs (A), (B) and (C)
   39  of this paragraph. The fraction for this  subparagraph  is  computed  as
   40  follows:  the  numerator  is the lesser of fifty thousand dollars or the
   41  excess of New York adjusted gross income for the taxable year  over  two
   42  million  dollars  and  the  denominator  is fifty thousand dollars. This
   43  subparagraph shall apply only to taxable years  beginning  on  or  after
   44  January  first,  two thousand twelve and before January first, two thou-
   45  sand [fifteen] EIGHTEEN.
   46    S 6.  Subparagraph (C) of paragraph 2 of subsection (d-1)  of  section
   47  601 of the tax law, as added by section 7 of part A of chapter 56 of the
   48  laws of 2011, is amended to read as follows:
   49    (C)  The tax table benefit is the difference between (i) the amount of
   50  taxable income set forth in the tax table in paragraph one of subsection
   51  (b) of this section not subject to the 8.82 percent rate of tax for  the
   52  taxable year multiplied by such rate and (ii) the dollar denominated tax
   53  for  such amount of taxable income set forth in the tax table applicable
       S. 2609--D                         94                         A. 3009--D

    1  to the taxable year in paragraph one of subsection (b) of  this  section
    2  less  the  sum of the tax table benefits in subparagraphs (A) and (B) of
    3  this paragraph. The  fraction  for  this  subparagraph  is  computed  as
    4  follows:  the  numerator  is the lesser of fifty thousand dollars or the
    5  excess of New York adjusted gross income for the taxable year  over  one
    6  million five hundred thousand dollars and the denominator is fifty thou-
    7  sand dollars. This subparagraph shall apply only to taxable years begin-
    8  ning  on  or after January first, two thousand twelve and before January
    9  first, two thousand [fifteen] EIGHTEEN.
   10    S 7. Subparagraph (C) of paragraph 3 of subsection  (d-1)  of  section
   11  601 of the tax law, as added by section 7 of part A of chapter 56 of the
   12  laws of 2011, is amended to read as follows:
   13    (C)  The tax table benefit is the difference between (i) the amount of
   14  taxable income set forth in the tax table in paragraph one of subsection
   15  (b) of this section not subject to the 8.82 percent rate of tax for  the
   16  taxable year multiplied by such rate and (ii) the dollar denominated tax
   17  for  such amount of taxable income set forth in the tax table applicable
   18  to the taxable year in paragraph one of subsection (b) of  this  section
   19  less  the  sum of the tax table benefits in subparagraphs (A) and (B) of
   20  this paragraph. The  fraction  for  this  subparagraph  is  computed  as
   21  follows:  the  numerator  is the lesser of fifty thousand dollars or the
   22  excess of New York adjusted gross income for the taxable year  over  one
   23  million five hundred thousand dollars and the denominator is fifty thou-
   24  sand dollars. This subparagraph shall apply only to taxable years begin-
   25  ning  on  or after January first, two thousand twelve and before January
   26  first, two thousand [fifteen] EIGHTEEN.
   27    S 8.  The opening paragraph of subsection (d-2) of section 601 of  the
   28  tax  law,  as  added by section 8 of part A of chapter 56 of the laws of
   29  2011, is amended to read as follows:
   30    Tax table benefit recapture for tax years after  two  thousand  [four-
   31  teen]  SEVENTEEN.  For taxable years beginning after two thousand [four-
   32  teen] SEVENTEEN, there is hereby imposed a supplemental tax in  addition
   33  to  the  tax  imposed under subsections (a), (b) and (c) of this section
   34  for the purpose of recapturing the benefit of the tax  tables  contained
   35  in  such subsections.   The supplemental tax shall be an amount equal to
   36  the table benefit in paragraph one of this subsection multiplied by  the
   37  fraction in such paragraph. [Any] DURING THESE TAXABLE YEARS, ANY refer-
   38  ence  in this chapter to subsection (d) of this section shall be read as
   39  a reference to this subsection.
   40    S 9.  Subparagraph (B) of paragraph 1 of subsection (d-2)  of  section
   41  601  of  the  tax law, as added by section 8 of  part A of chapter 56 of
   42  the laws of 2011, is amended to read as follows:
   43    (B) The fraction is computed as follows: the numerator is  the  lesser
   44  of  fifty  thousand  dollars  or  the  excess of New York adjusted gross
   45  income for the taxable year over one hundred thousand dollars  (as  such
   46  amount  is  adjusted  by  the  cost  of  living adjustment prescribed in
   47  section six hundred one-a of this part for tax years two thousand  thir-
   48  teen  [and] THROUGH two thousand [fourteen] SEVENTEEN) and the denomina-
   49  tor is fifty thousand dollars.
   50    S 10.  Subsection (a) of section 601-a of the tax  law,  as  added  by
   51  section  9  of  part  A of chapter 56 of the laws of 2011, is amended to
   52  read as follows:
   53    (a) For tax year two thousand thirteen, the  commissioner,  not  later
   54  than  September  first,  two thousand twelve, shall multiply the amounts
   55  specified in subsection (b) of this section for tax  year  two  thousand
   56  twelve by one plus the cost of living adjustment described in subsection
       S. 2609--D                         95                         A. 3009--D

    1  (c) of this section. For tax year two thousand fourteen, the commission-
    2  er,  not later than September first, two thousand thirteen, shall multi-
    3  ply the amounts specified in subsection (b) of this section for tax year
    4  two  thousand  thirteen  by one plus the cost of living adjustment.  FOR
    5  EACH SUCCEEDING TAX YEAR AFTER TAX YEAR TWO THOUSAND FOURTEEN AND BEFORE
    6  TAX YEAR TWO THOUSAND EIGHTEEN, THE COMMISSIONER, NOT LATER THAN SEPTEM-
    7  BER FIRST OF SUCH TAX YEAR, SHALL  MULTIPLY  THE  AMOUNTS  SPECIFIED  IN
    8  SUBSECTION (B) OF THIS SECTION FOR SUCH TAX YEAR BY ONE PLUS THE COST OF
    9  LIVING  ADJUSTMENT  DESCRIBED IN SUBSECTION (C) OF THIS SECTION FOR SUCH
   10  TAX YEAR.
   11    S 11. Subsection (f) of section 614  of  the  tax  law,  as  added  by
   12  section  10  of  part A of chapter 56 of the laws of 2011, is amended to
   13  read as follows:
   14    (f) Adjusted standard deduction. For taxable years beginning after two
   15  thousand [fourteen] SEVENTEEN, the standard deductions set forth in this
   16  section shall be THE AMOUNTS SET FORTH IN THIS SECTION adjusted  by  the
   17  cost  of  living  adjustment  prescribed in section six hundred one-a of
   18  this part for tax years two thousand thirteen [and  two  thousand  four-
   19  teen] THROUGH TWO THOUSAND SEVENTEEN.
   20    S  12.  Section  11  of  part  A  of chapter 56 of the laws of 2011 is
   21  amended to read as follows:
   22    S 11. Notwithstanding any provision of law to the contrary, the method
   23  of determining the amount to be deducted  and  withheld  from  wages  on
   24  account  of  taxes imposed by or pursuant to the authority of article 22
   25  of the tax law in connection with the implementation of  the  provisions
   26  of  this  act  shall be prescribed by regulations of the commissioner of
   27  taxation and finance with due consideration to the effect such withhold-
   28  ing tables and methods would have on the receipt and amount of  revenue.
   29  The  commissioner  of taxation and finance shall adjust such withholding
   30  tables and methods in regard to taxable  years  beginning  in  2012  and
   31  after in such manner as to result, so far as practicable, in withholding
   32  from  an  employee's wages an amount substantially equivalent to the tax
   33  reasonably estimated to be due for such taxable years as a result of the
   34  provisions of this act. Any such regulations to implement  a  change  in
   35  withholding  tables  and  methods for tax year 2012 shall be adopted and
   36  effective as soon as practicable and the commissioner  of  taxation  and
   37  finance may adopt such regulations on an emergency basis notwithstanding
   38  anything  to  the  contrary  in  section 202 of the state administrative
   39  procedure act. The commissioner of taxation and finance, in carrying out
   40  the duties and responsibilities under this section, may accompany such a
   41  rule making procedure with a similar procedure with respect to the taxes
   42  required to be deducted and withheld by local laws imposing taxes pursu-
   43  ant to the authority of articles 30, 30-A and 30-B of the tax  law,  the
   44  provisions  of  any  other  law  in  relation to such a procedure to the
   45  contrary notwithstanding. The withholding tables  and  methods  for  tax
   46  years  2013  [and  2014]  THROUGH  2017 shall not be prescribed by regu-
   47  lation, notwithstanding any provision of the state administrative proce-
   48  dure act to the contrary.
   49    S 13. Section 11-1714 of the administrative code of the  city  of  New
   50  York is amended by adding a new subdivision (f) to read as follows:
   51    (F)  FOR  TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
   52  SAND THIRTEEN, THE AMOUNTS OF STANDARD  DEDUCTIONS  SET  FORTH  IN  THIS
   53  SECTION  SHALL BE ADJUSTED IN THE SAME MANNER AS THE AMOUNTS OF STANDARD
   54  DEDUCTIONS SET FORTH IN SECTION SIX HUNDRED FOURTEEN OF THE TAX LAW.
   55    S 14. This act shall take effect immediately.
       S. 2609--D                         96                         A. 3009--D

    1                                   PART GG

    2    Section  1.  The  tax  law is amended by adding a new section 630-c to
    3  read as follows:
    4    S 630-C. GIFT FOR NEW YORK STATE TEEN HEALTH EDUCATION FUND. AN  INDI-
    5  VIDUAL  IN  ANY  TAXABLE YEAR MAY ELECT TO CONTRIBUTE TO THE TEEN HEALTH
    6  EDUCATION FUND FOR EDUCATIONAL PROGRAMS IN SCHOOLS  RELATED  TO  HEALTH.
    7  THE  CONTRIBUTION  SHALL  BE  IN  ANY  WHOLE DOLLAR AMOUNT AND SHALL NOT
    8  REDUCE THE AMOUNT OF STATE TAX OWED BY SUCH INDIVIDUAL. THE COMMISSIONER
    9  SHALL INCLUDE SPACE ON THE  PERSONAL  INCOME  TAX  RETURN  TO  ENABLE  A
   10  TAXPAYER  TO MAKE SUCH CONTRIBUTION. NOTWITHSTANDING ANY OTHER PROVISION
   11  OF LAW ALL REVENUES COLLECTED PURSUANT TO THIS SECTION SHALL BE CREDITED
   12  TO THE NEW YORK STATE TEEN HEALTH EDUCATION FUND AND USED ONLY FOR THOSE
   13  PURPOSES ENUMERATED IN SECTION NINETY-NINE-U OF THE STATE FINANCE LAW.
   14    S 2. The state finance law is amended by adding a new section 99-u  to
   15  read as follows:
   16    S  99-U. NEW YORK STATE TEEN HEALTH EDUCATION FUND. 1. THERE IS HEREBY
   17  ESTABLISHED IN THE CUSTODY OF THE COMMISSIONER OF TAXATION AND FINANCE A
   18  SPECIAL ACCOUNT TO BE KNOWN AS THE "NEW YORK STATE TEEN HEALTH EDUCATION
   19  FUND".
   20    2. SUCH FUND SHALL CONSIST OF ALL REVENUES RECEIVED BY THE  DEPARTMENT
   21  OF  TAXATION  AND  FINANCE,  PURSUANT  TO  THE PROVISIONS OF SECTION SIX
   22  HUNDRED THIRTY-C OF THE TAX LAW AND ALL OTHER MONEYS APPROPRIATED THERE-
   23  TO FROM ANY OTHER FUND OR SOURCE PURSUANT TO LAW. NOTHING  CONTAINED  IN
   24  THIS  SECTION  SHALL  PREVENT  THE STATE FROM RECEIVING GRANTS, GIFTS OR
   25  BEQUESTS FOR THE PURPOSES OF THE FUND AS DEFINED  IN  THIS  SECTION  AND
   26  DEPOSITING THEM INTO THE FUND ACCORDING TO LAW.
   27    3.  THE MONEYS IN SAID ACCOUNT SHALL BE RETAINED BY THE FUND AND SHALL
   28  BE RELEASED BY THE  COMMISSIONER  OF  TAXATION  AND  FINANCE  ONLY  UPON
   29  CERTIFICATES  SIGNED  BY  THE  COMMISSIONER  OF  EDUCATION OR HIS OR HER
   30  DESIGNEE AND ONLY FOR THE PURPOSES SET FORTH IN THIS SECTION.
   31    4. THE MONEYS IN SUCH FUND  SHALL  BE  EXPENDED  FOR  THE  PURPOSE  OF
   32  SUPPLEMENTING  EDUCATIONAL  PROGRAMS IN SCHOOLS FOR HEALTH AND AWARENESS
   33  OF ISSUES FACING TEENS TODAY WHEN IT COMES TO THEIR  HEALTH.    ELIGIBLE
   34  HEALTH  PROGRAMS  ARE  THOSE  WITH  AN  ESTABLISHED CURRICULUM PROVIDING
   35  INSTRUCTION ON ALCOHOL, TOBACCO AND OTHER  DRUG  ABUSE  PREVENTION,  THE
   36  CAUSES  AND  PROBLEMS ASSOCIATED WITH TEEN OBESITY, AND FOR AWARENESS OF
   37  THE SYMPTOMS OF TEEN ENDOMETRIOSIS.
   38    S 3. This act shall take effect immediately.

   39                                   PART HH

   40    Section 1. Subdivision 11 of section 213 of the state finance  law  is
   41  amended by adding a new paragraph (g) to read as follows:
   42    (G)  A  QUALIFYING  TECHNOLOGY  OR  INNOVATION BUSINESS WHICH BUSINESS
   43  EMPLOYS ONE HUNDRED OR FEWER EMPLOYEES WITHIN THE STATE ON  A  FULL-TIME
   44  BASIS AND ENGAGES IN:
   45    (1)  BIOTECHNOLOGIES, WHICH SHALL BE DEFINED AS TECHNOLOGIES INVOLVING
   46  THE SCIENTIFIC MANIPULATION  OF  LIVING  ORGANISMS,  ESPECIALLY  AT  THE
   47  MOLECULAR  AND/OR  THE  SUB-MOLECULAR GENETIC LEVEL, TO PRODUCE PRODUCTS
   48  CONDUCIVE TO IMPROVING THE LIVES AND  HEALTH  OF  PLANTS,  ANIMALS,  AND
   49  HUMANS; AND THE ASSOCIATED SCIENTIFIC RESEARCH, PHARMACOLOGICAL, MECHAN-
   50  ICAL,  AND  COMPUTATIONAL APPLICATIONS AND SERVICES CONNECTED WITH THESE
   51  IMPROVEMENTS;
       S. 2609--D                         97                         A. 3009--D

    1    (2) INFORMATION AND COMMUNICATION TECHNOLOGIES, EQUIPMENT AND  SYSTEMS
    2  THAT  INVOLVE  ADVANCED  COMPUTER  SOFTWARE  AND HARDWARE, VISUALIZATION
    3  TECHNOLOGIES, AND HUMAN INTERFACE TECHNOLOGIES;
    4    (3)  ADVANCED  MATERIALS  AND PROCESSING TECHNOLOGIES THAT INVOLVE THE
    5  DEVELOPMENT, MODIFICATION, OR IMPROVEMENT OF ONE OR  MORE  MATERIALS  OR
    6  METHODS  TO  PRODUCE  DEVICES  AND  STRUCTURES WITH IMPROVED PERFORMANCE
    7  CHARACTERISTICS OR SPECIAL FUNCTIONAL ATTRIBUTES, OR TO ACTIVATE,  SPEED
    8  UP, OR OTHERWISE ALTER CHEMICAL, BIOCHEMICAL, OR MEDICAL PROCESSES;
    9    (4)  ELECTRONIC AND PHOTONIC DEVICES AND COMPONENTS FOR USE IN PRODUC-
   10  ING ELECTRONIC, OPTOELECTRONIC, MECHANICAL  EQUIPMENT  AND  PRODUCTS  OF
   11  ELECTRONIC DISTRIBUTION WITH INTERACTIVE MEDIA CONTENT;
   12    (5)  ENERGY  EFFICIENCY,  RENEWABLE ENERGY AND ENVIRONMENTAL TECHNOLO-
   13  GIES, PRODUCTS, DEVICES AND SERVICES; OR
   14    (6) SMALL SCALE SYSTEMS INTEGRATION AND PACKAGING.
   15    S 2. Paragraph (a) of subdivision 16  of  section  213  of  the  state
   16  finance  law,  as amended by chapter 424 of the laws of 2009, is amended
   17  to read as follows:
   18    (a) for a linked deposit made in connection with a linked  loan  to  a
   19  certified  business in an empire zone or to an eligible business located
   20  in a highly distressed area or to an eligible business that  is  defined
   21  in paragraph (b-1) of subdivision eleven of this section that is located
   22  in a renewal community or defined in paragraph (b-2) of such subdivision
   23  that  is located in an empowerment zone or defined in paragraph (b-3) of
   24  such subdivision that is located in an enterprise community, OR A QUALI-
   25  FYING TECHNOLOGY OR INNOVATION BUSINESS AS DEFINED IN PARAGRAPH  (G)  OF
   26  SUBDIVISION  ELEVEN  OF THIS SECTION, respectively for eligible projects
   27  defined in paragraph (c) of subdivision twelve  of  this  section  or  a
   28  certified  minority-  or women-owned business enterprise for an eligible
   29  project defined in paragraph (e) of subdivision twelve of  this  section
   30  or to a defense industry manufacturer for a project defined in paragraph
   31  (d)  of  subdivision  twelve  of  this section, a fixed rate of interest
   32  which is three hundred basis points below the lender's posted four  year
   33  certificate of deposit rate or, if the lender does not offer a four year
   34  certificate  of deposit, is three hundred basis points below the average
   35  statewide rate for four year certificates of deposit  as  determined  by
   36  the commissioner of economic development;
   37    S 3. This act shall take effect immediately.

   38                                   PART II

   39    Section  1.  Section  16-t  of section 1 of chapter 168 of the laws of
   40  1974, constituting the New York state urban development corporation act,
   41  as added by section 1 of part N of chapter 59 of the laws  of  2010,  is
   42  amended to read as follows:
   43    S  16-t.  Small  business  revolving  loan fund. 1. The small business
   44  revolving loan fund  program  is  hereby  created.  The  corporation  is
   45  authorized,  within  available  appropriations,  to provide low interest
   46  loans to community  development  financial  institutions,  in  order  to
   47  provide  funding  for  those lending organizations' loans to small busi-
   48  nesses, located within New York state, that generate economic growth and
   49  job creation within New  York  state  but  that  are  unable  to  obtain
   50  adequate  credit or adequate terms for such credit. If in the discretion
   51  of the corporation the use of a community development financial institu-
   52  tion is not practicable based upon the application of  rules  and  regu-
   53  lations  developed  by  the  corporation, including, but not limited to,
   54  assessments of geographic and administrative capacity, then  the  corpo-
       S. 2609--D                         98                         A. 3009--D

    1  ration  is  authorized,  within available appropriations, to provide low
    2  interest loans to the following  other  local  community  based  lending
    3  organizations:  small  business lending consortia, certified development
    4  companies, providers of United States department of agriculture business
    5  and  industrial  guaranteed loans, United States small business adminis-
    6  tration loan providers, credit unions and community banks.  As  used  in
    7  this  section  "small business" means a business that is resident in New
    8  York state, independently owned and operated, not dominant in its field,
    9  and employs one hundred or fewer persons.
   10    2. In order for a lending  organization  to  be  eligible  to  receive
   11  program  funds, it must have established sufficient expertise to analyze
   12  small business applications for program loans, evaluate  the  creditwor-
   13  thiness  of  small  businesses, and regularly monitor program loans. The
   14  lending organization shall review  every  program  loan  application  in
   15  order  to determine, among other things, the feasibility of the proposed
   16  use of the requested financing by  the  small  business  applicant,  the
   17  likelihood  of  repayment  and the potential that the loan will generate
   18  economic development and jobs within New  York  state.  The  corporation
   19  shall  identify  eligible  lending  organizations  through  one  or more
   20  competitive statewide or local solicitations.
   21    3. Program loans to small businesses shall be targeted and marketed to
   22  minority and women-owned enterprises and other small businesses that are
   23  having difficulty accessing traditional credit markets. Program loans to
   24  small businesses shall be used for the creation and retention  of  jobs,
   25  as  defined  by the corporation, including: (a) working capital; (b) the
   26  acquisition and/or improvement of real property; (c) the acquisition  of
   27  machinery and equipment, property or improvement; or (d) the refinancing
   28  of  debt  obligations.  There  shall be two categories of loans to small
   29  businesses: a micro loan that shall have a principal amount that is less
   30  than twenty-five thousand dollars and a regular loan that shall  have  a
   31  principal  amount  not  less than twenty-five thousand dollars. Prior to
   32  receiving program funds, the lending organization must  certify  to  the
   33  corporation  that  such  loan  complies  with this section and rules and
   34  regulations promulgated for the program and that the  lending  organiza-
   35  tion has performed its obligations pursuant to and is in compliance with
   36  this  section,  the  program  rules  and  regulations and all agreements
   37  entered into between the corporation and the lending  organization.  The
   38  program  funds amount used by the lending organization to fund a program
   39  applicant loan shall not be more than fifty  percent  of  the  principal
   40  amount of such loan. The program funds amount used by the lending organ-
   41  ization  to  fund a program applicant loan shall not be greater than one
   42  hundred and twenty-five thousand dollars.    MINORITY-  AND  WOMEN-OWNED
   43  BUSINESS  ENTERPRISES AND OTHER SMALL BUSINESSES WHO ACCESS SUCH PROGRAM
   44  LOANS UNDER THIS SUBDIVISION SHALL NOT BE PRECLUDED FROM ACCESSING  SUCH
   45  SHORT-TERM  FINANCING  LOANS  PROVIDED  UNDER SUBDIVISION ELEVEN OF THIS
   46  SECTION.
   47    4. Program funds shall not be used for: (a) projects that would result
   48  in the relocation of any business operation from one municipality within
   49  the state to another, except under one of the following conditions:  (i)
   50  when a business is relocating within a municipality with a population of
   51  at  least  one  million  where  the  governing body of such municipality
   52  approves such relocation; or (ii) the lending organization notifies each
   53  municipality from which such business operation will  be  relocated  and
   54  each municipality agrees to such relocation; (b) projects of newspapers,
   55  broadcasting  or other news media; medical facilities, libraries, commu-
   56  nity or civic centers; or public infrastructure  improvements;  and  (c)
       S. 2609--D                         99                         A. 3009--D

    1  providing  funds,  directly or indirectly, for payment, distribution, or
    2  as a loan, to owners, members, partners or shareholders of the applicant
    3  business, except as ordinary income for services rendered.
    4    5.  With  respect  to  its program loans, the lending organization may
    5  charge application, commitment and loan guarantee  fees  pursuant  to  a
    6  schedule of fees adopted by the lending organization and approved by the
    7  corporation.
    8    6.  Program  funds shall be disbursed to a lending organization by the
    9  corporation in the form of a loan to the lending organization. The  term
   10  of the loan shall commence upon disbursement of the program funds by the
   11  corporation  to  the  lending  organization.  The loan shall carry a low
   12  interest rate determined by the corporation  based  on  then  prevailing
   13  interest  rates  and  the  circumstances  of  the  lending organization.
   14  Notwithstanding the performance of the loans made by the lending  organ-
   15  ization  using  program  funds,  the  lending  organization shall remain
   16  liable to the corporation with respect to any unpaid  amounts  due  from
   17  the  lending  organization  pursuant  to  the terms of the corporation's
   18  loans to the lending organization. In addition,  a  portion  of  program
   19  funds  may be disbursed to a lending organization in the form of a grant
   20  or forgivable loan, provided those funds are used by the lending  organ-
   21  ization  for administrative expenses associated with the fund, loan-loss
   22  reserves, or other eligible expenses as determined by the corporation.
   23    7. Notwithstanding anything to  the  contrary  in  this  section,  the
   24  corporation  shall  provide  at  least  five hundred thousand dollars in
   25  program funds pursuant to this section to lending organizations for  the
   26  purpose of making loans to small business located in Niagara county.
   27    8.  Notwithstanding  anything  to  the  contrary  in this section, the
   28  corporation shall provide at least  five  hundred  thousand  dollars  in
   29  program  funds pursuant to this section to lending organizations for the
   30  purpose of making loans to small business located in St. Lawrence  coun-
   31  ty.
   32    9.  Notwithstanding  anything  to  the  contrary  in this section, the
   33  corporation shall provide at least  five  hundred  thousand  dollars  in
   34  program  funds pursuant to this section to lending organizations for the
   35  purpose of making loans to small business located in Erie county.
   36    10. Notwithstanding anything to the  contrary  in  this  section,  the
   37  corporation  shall  provide  at  least  five hundred thousand dollars in
   38  program funds pursuant to this section to lending organizations for  the
   39  purpose of making loans to small business located in Jefferson county.
   40    11.    NOTWITHSTANDING  ANYTHING  TO THE CONTRARY IN THIS SECTION, THE
   41  CORPORATION MAY PROVIDE  AT  LEAST  FIVE  HUNDRED  THOUSAND  DOLLARS  IN
   42  PROGRAM  FUNDS PURSUANT TO THIS SECTION TO LENDING ORGANIZATIONS FOR THE
   43  PURPOSE OF  MAKING  SHORT-TERM  FINANCING  AVAILABLE  TO  MINORITY-  AND
   44  WOMEN-OWNED  BUSINESS  ENTERPRISES AND OTHER SMALL BUSINESSES PERFORMING
   45  CONTRACTS TO PROVIDE CONSTRUCTION OR  PROFESSIONAL  SERVICES  FOR  STATE
   46  PROCUREMENT PURPOSES. SUCH LOANS SHALL BE USED TO UNDERWRITE THE COST OF
   47  LABOR,  MATERIALS,  AND  EQUIPMENT  DIRECTLY  ASSOCIATED  WITH  (1)  THE
   48  CONTRACT BEING FINANCED OR (2) A CONTRACT THAT HAS  BEEN  SATISFIED  FOR
   49  WHICH THE BUSINESS IS AWAITING PAYMENT FROM THE STATE. THE PROGRAM FUNDS
   50  AMOUNT USED BY THE LENDING ORGANIZATION TO FUND A PROGRAM APPLICANT LOAN
   51  SHALL  NOT  BE  MORE THAN EIGHTY PERCENT OF THE PRINCIPAL AMOUNT OF SUCH
   52  LOAN.  THE PROGRAM FUNDS AMOUNT USED BY THE LENDING ORGANIZATION TO FUND
   53  A  PROGRAM  APPLICANT  LOAN  SHALL  NOT  BE  GREATER  THAN  ONE  HUNDRED
   54  TWENTY-FIVE  THOUSAND DOLLARS. MINORITY- AND WOMEN-OWNED BUSINESS ENTER-
   55  PRISES AND OTHER SMALL BUSINESSES WHO ACCESS SUCH  SHORT-TERM  FINANCING
       S. 2609--D                         100                        A. 3009--D

    1  LOANS  UNDER THIS SUBDIVISION SHALL NOT BE PRECLUDED FROM ACCESSING SUCH
    2  PROGRAM LOANS PROVIDED UNDER SUBDIVISION THREE OF THIS SECTION.
    3    12.  Notwithstanding  any provision of law to the contrary, the corpo-
    4  ration may establish a program fund for program use and  pay  into  such
    5  fund  any  funds  available  to the corporation from any source that are
    6  eligible for program use, including moneys appropriated by the state.
    7    [12.] 13. With respect to a lending organization program  loan  appli-
    8  cants,  no  person who is a member of the board or other governing body,
    9  officer, employee, or member of a loan committee, or a family member  of
   10  any  such lending organization shall participate in any decision on such
   11  application if such person is a party to or has a financial or  personal
   12  interest  in  such  loan.  Any  person  who cannot participate in a loan
   13  application decision for such reasons shall not be counted as  a  member
   14  of  the  loan  committee,  board or other governing body for purposes of
   15  determining the number of members required for approval of such applica-
   16  tion.
   17    [13.] 14. The lending organization shall  submit  to  the  corporation
   18  annual  reports stating: the number of program loans made; the amount of
   19  program funding used for loans; the use of loan proceeds by the  borrow-
   20  er; the number of jobs created or retained; a description of the econom-
   21  ic  development  generated; the status of each outstanding program loan;
   22  and such other information as the corporation may require.
   23    [14.] 15. The corporation may conduct audits of the lending  organiza-
   24  tion  in order to ensure compliance with the provisions of this section,
   25  any regulations promulgated with respect thereto and agreements  between
   26  the  lending  organization and the corporation of all aspects of the use
   27  of program funds and program loan transactions. In the  event  that  the
   28  corporation  finds substantive noncompliance, the corporation may termi-
   29  nate the lending organization's participation in the program.
   30    [15.] 16. Upon termination of a lending  organization's  participation
   31  in  the  program,  the  lending  organization shall return to the corpo-
   32  ration, promptly after its demand therefor, all  program  fund  proceeds
   33  held  by  the  lending  organization;  and  provide  to the corporation,
   34  promptly after its demand therefor, an accounting of all  program  funds
   35  received  by the lending organization, including all currently outstand-
   36  ing loans that were  made  using  program  funds.  Notwithstanding  such
   37  termination,  the lending organization shall remain liable to the corpo-
   38  ration with respect to any unpaid amounts due from the lending organiza-
   39  tion pursuant to the terms of the corporation's  loans  to  the  lending
   40  organization.
   41    S 2. This act shall take effect immediately.

   42                                   PART JJ

   43    Section  1. Legislative findings and purposes. It is hereby found that
   44  there exists in the state a need to attract private sector investment in
   45  new research and in the translation of the  products  of  that  research
   46  into marketable products.
   47    It is hereby further found that the need for this investment is demon-
   48  strated  by the fact that, while New York state universities rank second
   49  nationally in total research spending, the state attracts  a  dispropor-
   50  tionately low share of the nation's venture capital investment.
   51    S  2.  The New York state innovation venture capital fund. In order to
   52  strengthen the university/industry connection and prepare New York busi-
   53  nesses to compete for private-sector venture investment,  the  New  York
   54  state  urban  development  corporation shall have the power to establish
       S. 2609--D                         101                        A. 3009--D

    1  and administer the New York state innovation  venture  capital  fund  to
    2  provide  critical  seed and early-stage funding to incentivize new busi-
    3  ness formation and growth in New York state and to facilitate the  tran-
    4  sition  from  ideas  and  research to marketable products. Funds will be
    5  expended by the innovation venture  capital  fund  pursuant  to  a  plan
    6  developed  by  the  urban  development  corporation and submitted to the
    7  director of the division of the budget, the temporary president  of  the
    8  senate,  the  speaker of the assembly, the minority leader of the senate
    9  and the minority leader of the assembly.  No funds shall be  transferred
   10  to  the  New  York  state urban development corporation for the New York
   11  state innovation venture capital fund until such plan has  been  submit-
   12  ted.
   13    S  3. Eligible applicants.  Eligible applicants for the New York state
   14  innovation venture capital fund may include business enterprises in  the
   15  formative  stage of development, regional and local economic development
   16  organizations, technology development organizations, research  universi-
   17  ties,  and  investment  funds  that  make  seed, early-stage and venture
   18  investments. In order to be eligible for funds from the New  York  state
   19  innovation  venture capital fund, a beneficiary company must: (a) be, or
   20  agree in writing to be, located in New York state; (b) be in  the  seed,
   21  early-stage  or  venture  stage of development, as defined by the corpo-
   22  ration; and (c) have  the  potential  to  generate  additional  economic
   23  activity in New York State.
   24    S  4.  Investment professionals.  The New York state urban development
   25  corporation shall have the power to engage or retain the services of one
   26  or more investment professionals or firms, through  direct  hire  or  by
   27  contract  after  a competitive solicitation or otherwise as permitted by
   28  law, with demonstrated knowledge and expertise to advise the corporation
   29  with respect to the innovation venture capital fund and to provide  such
   30  other investment advisory services as may be necessary or advisable.
   31    S  5.  Evaluation of applicants.  The New York state urban development
   32  corporation shall establish a process by  rule  or  regulation  for  the
   33  evaluation  of  applicants  for funds from the New York state innovation
   34  venture capital fund; provided however that the  corporation  shall  not
   35  issue  such  rules  or regulations pursuant to the emergency rule making
   36  authority provided for in the state administrative procedure act.
   37    S 6. Report.  The New York state urban development  corporation  shall
   38  submit  a report annually on December 31 to the director of the division
   39  of the budget, the temporary president of the senate, the speaker of the
   40  assembly, the minority leader of the senate and the minority  leader  of
   41  the  assembly detailing: (a) the total amount of funds committed to each
   42  applicant that receives funds and, if applicable,  the  amount  of  such
   43  funds  that  has been invested by each such applicant; (b) the amount of
   44  New York State innovation venture capital funds invested and the recipi-
   45  ents of such funds; (c) the location of each  beneficiary  company;  (d)
   46  the  number  of  jobs  projected to be created or retained; and (e) such
   47  other information as the corporation deems necessary.
   48    S 7. Rules and regulations.   The New  York  state  urban  development
   49  corporation  is hereby authorized to promulgate rules and regulations in
   50  accordance with the state administrative procedure act as are  necessary
   51  to  fulfill  the purposes of this act, including with respect to reason-
   52  able management fees, promotes, share  of  return  and  other  fees  and
   53  charges  of applicants that receive funds, and to provide for the repay-
   54  ment of funds received by the beneficiary  company  if  the  beneficiary
   55  company  leaves New York state within a period of time to be established
   56  by the corporation. In accordance with such rules and  regulations,  the
       S. 2609--D                         102                        A. 3009--D

    1  corporation  may  impose fees, establish repayment terms and provide for
    2  equity participation by the corporation in connection  with  investments
    3  from the New York state innovation venture capital fund. Provided howev-
    4  er that no rules or regulations issued pursuant to this section shall be
    5  issued utilizing the emergency rule making authority provided for in the
    6  state administrative procedure act.
    7    S 8. This act shall take effect immediately.
    8    S 2. Severability clause. If any clause, sentence, paragraph, subdivi-
    9  sion,  section  or  part  of  this act shall be adjudged by any court of
   10  competent jurisdiction to be invalid, such judgment  shall  not  affect,
   11  impair,  or  invalidate  the remainder thereof, but shall be confined in
   12  its operation to the clause, sentence, paragraph,  subdivision,  section
   13  or part thereof directly involved in the controversy in which such judg-
   14  ment shall have been rendered. It is hereby declared to be the intent of
   15  the  legislature  that  this  act  would  have been enacted even if such
   16  invalid provisions had not been included herein.
   17    S 3. This act shall take effect immediately  provided,  however,  that
   18  the applicable effective date of Parts A through JJ of this act shall be
   19  as specifically set forth in the last section of such Parts.
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