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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 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
            S. 2609--D                                            A. 3009--D
 
                SENATE - ASSEMBLY
 
                                    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    §  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    § 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    §  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    §  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    § 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    § 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    § 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    §  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    §  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    § 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    §  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    § 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    § 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    § 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    § 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    §  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    § 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    § 2. The tax law is amended by adding a new  section  38  to  read  as
    35  follows:
    36    §  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    §  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    § 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    § 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    § 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    § 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    § 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    § 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    § 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    §  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    § 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    § 4. Paragraph 19 of subsection (c) of section 612 of the tax  law  is
    45  REPEALED.
    46    §  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    § 6. Paragraph 17 of subsection (e) of section 1453 of the tax law  is
    11  REPEALED.
    12    §  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    § 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    §  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    § 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    § 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    § 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    § 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    § 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    § 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    § 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    § 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    §  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    § 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    §  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    §  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    § 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    § 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    § 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    § 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  fifty-
    16  nine-a  of this title that undertaking the project will serve the public
    17  purposes of this article by preserving permanent, private sector jobs or
    18  increasing the overall number of permanent, private sector jobs  in  the
    19  state.  Where the agency makes such a finding, prior to providing finan-
    20  cial assistance to the project by the agency, the chief executive  offi-

    21  cer  of  the municipality for whose benefit the agency was created shall
    22  confirm the proposed action of the agency.
    23    § 2. The general municipal law is amended by adding a new section  875
    24  to read as follows:
    25    §  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    §  3.  The  public  authorities law is amended by adding a new section
    18  1963-b to read as follows:
    19    § 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    §  4.  The  public  authorities law is amended by adding a new section
    30  2326-a to read as follows:
    31    § 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    §  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    §  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    § 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    § 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    §  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    § 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    § 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    § 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    §  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    § 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    § 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    § 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    § 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    § 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    § 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    § 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    §  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    §  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    §  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    §  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    § 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    §  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    § 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    §  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    §  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    § 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    §  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    §  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    § 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    § 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    § 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    § 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    § 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    §  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    §  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    §  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    § 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    § 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    §  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    § 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    § 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 twenty-

    53  three of section two hundred eighty-two of this  chapter,  to  a  person
    54  registered  under  article  twelve-A of this chapter as a distributor of
    55  Diesel motor fuel other than (A) a retail sale to such person or  (B)  a
    56  sale  to  such  person which involves a delivery at a filling station or

        S. 2609--D                         77                         A. 3009--D
 
     1  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    §  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    §  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    § 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    § 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    § 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    § 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    § 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    §  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    §  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    §  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    § 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    §  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    §  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    § 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    § 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    § 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    §  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    § 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    § 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    § 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    § 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    § 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    § 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    § 2. The tax law is amended by adding a new section 187-s to  read  as
    33  follows:
    34    §  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    § 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    §  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    §  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    § 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    §  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    § 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    §  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    §  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    §  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    §  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    § 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    § 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    § 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    § 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    § 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    § 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    §  12.  Section  11  of  part  A  of chapter 56 of the laws of 2011 is
    21  amended to read as follows:
    22    § 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    § 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    § 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    § 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    § 2. The state finance law is amended by adding a new section 99-u  to
    15  read as follows:
    16    §  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    § 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    § 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    § 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    §  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  twenty-
    54  five  thousand  dollars.  Minority- and women-owned business enterprises
    55  and other small businesses who access such  short-term  financing  loans

        S. 2609--D                         100                        A. 3009--D
 
     1  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    § 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    §  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    §  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    §  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    §  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    § 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    § 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    § 8. This act shall take effect immediately.
     8    § 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    § 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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