Rpld Art 18-B, add Art 18-B §§955 - 958, Art 18-D §§972 & 973, Gen Muni L; add §15-a, amd §§210, 210-B, 606,
1511, 1502, 186-a & 186-e, Tax L
 
Fosters economic development by establishing the New York state cornerstone program (focused on job retention) and the New York state discovery program (focused on job creation); provides a series of tax cuts to businesses.
STATE OF NEW YORK
________________________________________________________________________
8524
IN SENATE
May 9, 2018
___________
Introduced by Sen. BOYLE -- read twice and ordered printed, and when
printed to be committed to the Committee on Local Government
AN ACT to amend the general municipal law, in relation to establishing
the New York state cornerstone program; and to repeal article 18-B of
such law relating thereto (Part A); to amend the general municipal law
and the tax law, in relation to establishing the New York state
discovery program (Part B); and to amend the tax law, in relation to
net income base and in relation to certain taxes (Part C)
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 components of legislation relating
2 to the "New York state cornerstone program and the New York state
3 discovery program". Each component is wholly contained within a Part
4 identified as Parts A through C. 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 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 § 1-a. Statement of legislative findings and declaration. It is here-
13 by found and declared that there exists within the state high unemploy-
14 ment, limited new job creation, a dependence on public assistance
15 income, insufficient support for industrial and commercial businesses,
16 and unnecessarily high taxes. These severe conditions require state
17 government to target certain industries in order to stimulate private
18 investment, private business development and job creation. It should be
19 the public policy of the state to help promote the development of new
20 businesses, rather than deter them with punitive regulation and exces-
21 sive taxes. It is further found and declared that it is the public poli-
22 cy of the state to achieve these goals through the mutual cooperation of
23 all levels of state and local government, the business community and
24 academic institutions.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08139-01-7
S. 8524 2
1 PART A
2 Section 1. Article 18-B of the general municipal law is REPEALED.
3 § 2. The general municipal law is amended by adding a new article 18-B
4 to read as follows:
5 ARTICLE 18-B
6 NEW YORK STATE CORNERSTONE PROGRAM
7 Section 955. New York cornerstone program established.
8 956. Responsibilities of the commissioner.
9 957. Cornerstone development board.
10 958. Reporting requirements.
11 § 955. New York cornerstone program established. There is hereby
12 established the New York cornerstone program.
13 § 956. Responsibilities of the commissioner. 1. The commissioner of
14 economic development shall, in consultation with the director of the
15 budget, the commissioner of labor, and the commissioner of taxation and
16 finance, promulgate rules and regulations, which, notwithstanding any
17 provisions to the contrary in the state administrative procedure act,
18 may be adopted on an emergency basis, relating to:
19 (a) the application process;
20 (b) defining types of businesses eligible, including but not limited
21 to manufacturing, high-tech, bio-tech, clean-tech and agri-business;
22 (c) limiting businesses to ten years of participation;
23 (d) certification by the commissioner for eligibility of business
24 enterprises for benefits referred to in this article. Criteria for
25 certification shall include, but not be limited to:
26 (i) requiring a business to have been operational in New York state
27 for at least ten consecutive years prior to applying to the cornerstone
28 program;
29 (ii) requiring a business to show proof that they will have to lower
30 employment levels without certification in the program;
31 (iii) requiring a business to commit to maintaining or increasing
32 current employment levels to qualify for tax benefits;
33 (iv) whether certification will have the undesired effect of causing
34 individuals to transfer from existing employment with another business
35 enterprise to similar employment with the business enterprise so certi-
36 fied, and transferring existing employment from one or more other muni-
37 cipalities, towns or villages in the state;
38 (v) whether such enterprise is likely to enhance the economic climate
39 of the state; and
40 (vi) whether the commissioner of labor establishes that such business
41 enterprise, during the ten years preceding the submission of an applica-
42 tion for certification, has engaged in a substantial violation or a
43 pattern of violations of laws regulating unemployment insurance, work-
44 ers' compensation, public work, child labor, employment of minorities
45 and women, safety and health, or other laws for the protection of work-
46 ers as determined by final judgment of a judicial or administrative
47 proceeding.
48 2. The commissioner of economic development shall, in consultation
49 with the director of the budget, the commissioner of labor, and the
50 commissioner of taxation and finance, establish a cost benefit analysis.
51 3. The commissioner of economic development shall, in consultation
52 with the director of the budget, the commissioner of labor, and the
53 commissioner of taxation and finance, establish a program and propose
54 legislation granting tax exemptions previously applicable to empire
55 zones for business enterprises eligible under the cornerstone program
S. 8524 3
1 established pursuant to this article, to the governor and legislature
2 within one hundred eighty days from the effective date of this article.
3 § 957. Cornerstone development board. 1. The cornerstone development
4 board is hereby created.
5 2. Such board shall consist of the commissioner of taxation and
6 finance, the director of the budget, the commissioner of labor and two
7 members to be appointed by the governor; one member to be appointed by
8 the temporary president of the senate; one member to be appointed by the
9 speaker of the assembly; one member to be appointed by the minority
10 leader of the senate and one member to be appointed by the minority
11 leader of the assembly.
12 3. The governor shall designate from among the voting members the
13 chair of the board. Each member of the board shall be entitled to desig-
14 nate a representative to attend meetings of the board in his or her
15 place, and to vote or otherwise act on his or her behalf in his or her
16 absence.
17 4. Notice of such designation shall be furnished in writing to the
18 board by the designating member.
19 5. A representative shall serve at the pleasure of the designating
20 member.
21 6. A representative shall not be authorized to delegate any of his or
22 her duties or functions to any other person.
23 § 958. Reporting requirements. 1. The department of audit and
24 control, the department of taxation and finance and the department of
25 economic development shall prepare reports on the management and the
26 economic and fiscal impact of the cornerstone program.
27 2. The analysis of the fiscal and economic impact of the program shall
28 include, but not be limited to: a review of the cost of providing the
29 tax benefits referred to in this article; progress of the program;
30 number of tax credits claimed by each certified business; number of jobs
31 created and/or retained by each business and all other information
32 requested and not prohibited by law.
33 3. Such reports shall be transmitted to the governor and the legisla-
34 ture by September first, two thousand eighteen and every year thereafter
35 and shall be posted online for full public disclosure.
36 § 3. This act shall take effect immediately; provided, however, that
37 any rules and regulations necessary to carry out the provisions of this
38 act shall be promulgated before such effective date.
39 PART B
40 Section 1. This act shall be known and may be cited as the "New York
41 state discovery act".
42 § 2. The general municipal law is amended by adding a new article
43 18-D to read as follows:
44 ARTICLE 18-D
45 NEW YORK STATE DISCOVERY PROGRAM
46 Section 972. New York state discovery program.
47 973. Job development fund.
48 § 972. New York state discovery program. 1. The New York state discov-
49 ery program is hereby established.
50 2. The commissioner of economic development shall, after consultation
51 with the director of the budget, the commissioner of labor, and the
52 commissioner of taxation and finance, promulgate rules and regulations,
53 which, notwithstanding any provisions to the contrary in the state
S. 8524 4
1 administrative procedure act, may be adopted on an emergency basis,
2 relating to:
3 (a) the application process;
4 (b) defining types of businesses eligible, including but not limited
5 to manufacturing, high-tech, bio-tech, clean-tech and agri-business;
6 (c) limiting businesses to ten years of participation;
7 (d) certification by the commissioner of economic development as to
8 the eligibility of business enterprises for benefits referred to in this
9 section, which shall be governed by criteria including, but not limited
10 to:
11 (i) requiring an eligible business to be a start-up business, or a
12 business operating in the state for two years or less;
13 (ii) a business must offer internships to local high school students,
14 BOCES students and college students per a plan developed by the commis-
15 sioner of economic development;
16 (iii) a business must commit to increasing current employment levels
17 to qualify for tax benefits;
18 (iv) whether certification will have the undesired effect of causing
19 individuals to transfer from existing employment with another business
20 enterprise to similar employment with the business enterprise so certi-
21 fied, and transferring existing employment from one or more other muni-
22 cipalities, towns or villages in the state;
23 (v) whether such enterprise is likely to enhance the economic climate
24 of the state;
25 (vi) whether the commissioner of labor establishes that such business
26 enterprise, during the two years preceding the submission of an applica-
27 tion for certification, has engaged in a substantial violation or a
28 pattern of violations of laws regulating unemployment insurance, work-
29 ers' compensation, public work, child labor, employment of minorities
30 and women, safety and health, or other laws for the protection of work-
31 ers as determined by final judgment of a judicial or administrative
32 proceeding; and
33 (vii) whether such business meets the requirements of the cost benefit
34 analysis as established by the commissioner of economic development.
35 3. The department of audit and control, the department of taxation and
36 finance and the department of economic development shall prepare reports
37 on the management and the economic and fiscal impact of the discovery
38 program. The analysis of the fiscal and economic impact of the program
39 shall include, but not be limited to: a review of the cost of providing
40 the tax benefits referred to in this article; progress of the program;
41 number of tax credits claimed by each certified business; number of jobs
42 created by each business and all other information requested and not
43 prohibited by law. Such reports shall be transmitted to the governor and
44 the legislature by September first, two thousand nineteen and every year
45 thereafter and shall be posted online for full public disclosure.
46 4. The department of economic development shall provide grants of up
47 to two thousand dollars for every internship developed under this
48 program, to be paid for out of the job development fund established
49 pursuant to this article. Such grant allocations shall be divided evenly
50 between the certified business and the corresponding institution of
51 higher education to cover costs associated with the development of such
52 internships.
53 § 973. Job development fund. 1. There is hereby established in the
54 joint custody of the commissioner of taxation and finance and the state
55 comptroller a fund to be known as the "job development fund".
S. 8524 5
1 2. The fund shall consist of monies appropriated for the division of
2 science, technology and innovation.
3 3. Moneys of the fund shall be expended for the purposes of carrying
4 out the provisions of section nine hundred seventy-two of this article.
5 Moneys shall be paid out of the fund on the audit and warrant of the
6 state comptroller on vouchers approved by the division of science, tech-
7 nology and innovation. Any interest received by the comptroller on
8 moneys on deposit in the job development fund shall be retained in and
9 become part of such fund.
10 § 3. The tax law is amended by adding a new section 15-a to read as
11 follows:
12 § 15-a. Discovery zone property tax credit. For a business enterprise
13 which is first certified under section nine hundred seventy-two of the
14 general municipal law on or after July first, two thousand eighteen, the
15 credit shall be for a period of ten years and shall not exceed thirty
16 percent of the eligible real property taxes paid in the current taxable
17 year of eligibility.
18 § 4. Section 210-B of the tax law is amended by adding two new subdi-
19 visions 52 and 53 to read as follows:
20 52. Discovery investment credit. (a) A taxpayer shall be allowed a
21 credit, to be computed as hereinafter provided, against the tax imposed
22 by this article where the taxpayer has been certified pursuant to
23 section nine hundred seventy-two of the general municipal law. The
24 amount of such credit shall be twenty percent of the cost or other basis
25 for federal income tax purposes of tangible personal property and other
26 tangible property, including buildings and structural components of
27 buildings, described in paragraph (b) of this subdivision, but only if
28 the acquisition, construction, reconstruction or erection of such prop-
29 erty occurred or was commenced on or after the date of such designation
30 and prior to the expiration thereof. Provided, however, that in the case
31 of an acquisition, construction, reconstruction or erection which was
32 commenced during such period and continued or completed subsequently,
33 the credit shall be twenty percent of the portion of the cost or other
34 basis for federal income tax purposes attributable to such period, which
35 portion shall be ascertained by multiplying such cost or basis by a
36 fraction the numerator of which shall be the expenditures paid or
37 incurred during such period for such purposes and the denominator of
38 which shall be the total of all expenditures paid or incurred for such
39 acquisition, construction, reconstruction or erection.
40 (b) A credit shall be allowed under this subdivision with respect to
41 tangible personal property and other tangible property, including build-
42 ings and structural components of buildings which: (1) are depreciable
43 pursuant to section one hundred sixty-seven of the Internal Revenue
44 Code, (2) have a useful life of four years or more, (3) are acquired by
45 purchase as defined in section one hundred seventy-nine (d) of the
46 Internal Revenue Code, and (4) are (i) principally used by the taxpayer
47 in the production of goods by manufacturing, processing, assembling,
48 refining, mining, extracting, farming, agriculture, horticulture, flori-
49 culture, viticulture or commercial fishing, (ii) industrial waste treat-
50 ment facilities or air pollution control facilities used in the taxpay-
51 er's trade or business, (iii) research and development property, (iv)
52 principally used in the ordinary course of the taxpayer's trade or busi-
53 ness as a broker or dealer in connection with the purchase or sale
54 (which shall include but not be limited to the issuance, entering into,
55 assumption, offset, assignment, termination, or transfer) of stocks,
56 bonds or other securities as defined in section four hundred seventy-
S. 8524 6
1 five (c)(2) of the Internal Revenue Code, or of commodities as defined
2 in section four hundred seventy-five (e) of the Internal Revenue Code,
3 or (v) principally used in the ordinary course of the taxpayer's trade
4 or business of providing investment advisory services for a regulated
5 investment company as defined in section eight hundred fifty-one of the
6 Internal Revenue Code, or lending, loan arrangement or loan origination
7 services to customers in connection with the purchase or sale (which
8 shall include but not be limited to the issuance, entering into, assump-
9 tion, offset, assignment, termination, or transfer) of securities as
10 defined in section four hundred seventy-five (c)(2) of the Internal
11 Revenue Code. For purposes of clauses (iv) and (v) of this subparagraph,
12 property purchased by a taxpayer affiliated with a regulated broker,
13 dealer or registered investment adviser is allowed a credit under this
14 subdivision if the property is used by its affiliated regulated broker,
15 dealer or registered investment adviser in accordance with this subdivi-
16 sion. For purposes of determining if the property is principally used in
17 qualifying uses, the uses by the taxpayer described in clauses (iv) and
18 (v) of this subparagraph may be aggregated. In addition, the uses by the
19 taxpayer, its affiliated regulated broker, dealer, and registered
20 investment adviser under either or both of those clauses may be aggre-
21 gated. Provided, however, a taxpayer shall not be allowed the credit
22 provided by clauses (iv) and (v) of this subparagraph unless (I) eighty
23 percent or more of the employees performing the administrative and
24 support functions resulting from or related to the qualifying uses of
25 such equipment are located in this state, or (II) the average number of
26 employees that perform the administrative and support functions result-
27 ing from or related to the qualifying uses of such equipment and are
28 located in this state during the taxable year for which the credit is
29 claimed is equal to or greater than ninety-five percent of the average
30 number of employees that perform these functions and are located in this
31 state during the thirty-six months immediately preceding the year for
32 which the credit is claimed, or (III) the number of employees located in
33 this state during the taxable year for which the credit is claimed is
34 equal to or greater than ninety percent of the number of employees
35 located in this state on December thirty-first, nineteen hundred nine-
36 ty-eight or, if the taxpayer was not a calendar year taxpayer in nine-
37 teen hundred ninety-eight, the last day of its first taxable year ending
38 after December thirty-first, nineteen hundred ninety-eight. If the
39 taxpayer becomes subject to tax in this state after the taxable year
40 beginning in nineteen hundred ninety-eight, then the taxpayer is not
41 required to satisfy the employment test provided in the preceding
42 sentence of this subparagraph for its first taxable year. For purposes
43 of item (III) of this clause, the employment test will be based on the
44 number of employees located in this state on the last day of the first
45 taxable year the taxpayer is subject to tax in this state. If the uses
46 of the property must be aggregated to determine whether the property is
47 principally used in qualifying uses, then either each affiliate using
48 the property must satisfy this employment test or this employment test
49 must be satisfied through the aggregation of the employees of the
50 taxpayer, its affiliated regulated broker, dealer, and registered
51 investment adviser using the property. For purposes of this subdivision,
52 the term "goods" shall not include electricity. For purposes of this
53 paragraph, manufacturing shall mean the process of working raw materials
54 into wares suitable for use or which gives new shapes, new quality or
55 new combination to matter which already has gone through some artificial
56 process by the use of machinery, tools, appliances and other similar
S. 8524 7
1 equipment. Property used in the production of goods shall include
2 machinery, equipment or other tangible property which is principally
3 used in the repair and service of other machinery, equipment or other
4 tangible property used principally in the production of goods and shall
5 include all facilities used in the production operation, including stor-
6 age of material to be used in production and of the products that are
7 produced. For purposes of this paragraph, the terms "industrial waste
8 treatment facilities", "air pollution control facilities" and "research
9 and development property" shall have the meanings ascribed thereto by
10 clauses (ii) and (iii), respectively, of subparagraph four of this para-
11 graph, and the provisions of subparagraph three of this paragraph shall
12 apply.
13 (c) A taxpayer shall not be allowed a credit under this subdivision
14 with respect to any tangible personal property and other tangible prop-
15 erty, including buildings and structural components of buildings, which
16 it leases to any other person or corporation except where a taxpayer
17 leases property to an affiliated regulated broker, dealer, or registered
18 investment adviser that uses such property in accordance with clause
19 (iv) or (v) of subparagraph four of paragraph (b) of this subdivision.
20 For purposes of the preceding sentence, any contract or agreement to
21 lease or rent or for a license to use such property shall be considered
22 a lease. Provided, however, in determining whether a taxpayer shall be
23 allowed a credit under this subdivision with respect to such property,
24 any election made with respect to such property pursuant to the
25 provisions of paragraph eight of subsection (f) of section one hundred
26 sixty-eight of the Internal Revenue Code, as such paragraph was in
27 effect for agreements entered into prior to January first, nineteen
28 hundred eighty-four, shall be disregarded.
29 (d) If the amount of credit allowed under this subdivision for any
30 taxable year shall exceed the taxpayer's tax for such year, the excess
31 may be carried over to the following year or years and may be deducted
32 from the taxpayer's tax for such year or years. Any refund paid pursuant
33 to this paragraph shall be deemed to be a refund of an overpayment of
34 tax as provided in section six hundred eighty-six of this chapter,
35 provided, however, that no interest shall be paid thereon.
36 53. Discovery wage tax credit. (a) A taxpayer shall be allowed a cred-
37 it, to be computed as hereinafter provided, against the tax imposed by
38 this article, where the taxpayer has been certified pursuant to section
39 nine hundred seventy-two of the general municipal law. The amount of
40 such credit shall be as prescribed in paragraph (c) of this subdivision.
41 (b) "Discovery wages" means wages paid by the taxpayer for full-time
42 employment during a taxable year, provided that those wages are paid by
43 a certified business as defined by the commissioner of economic develop-
44 ment as required in his or her responsibilities.
45 (c) The credit provided in this subdivision shall be equal to the
46 product of the gross wages paid and six and eighty-five hundredths
47 percent for each net new job created during the taxable year.
48 (d) "Net new job" shall be defined as each job that exceeds the aver-
49 age number of individuals employed full-time by the taxpayer in the
50 previous taxable year.
51 (e) If the amount of this credit and carryovers of such credit allowed
52 under this subdivision for any taxable year shall exceed the taxpayer's
53 tax for such year, the excess, as well as any part of the credit or
54 carryovers of such credit, or both, which may not be deducted from the
55 tax otherwise due by reason of paragraph (c) of this subdivision, may be
S. 8524 8
1 carried over to the following year or years and may be deducted from the
2 taxpayer's tax for such year or years.
3 § 5. Section 606 of the tax law is amended by adding two new
4 subsections (j-2) and (j-3) to read as follows:
5 (j-2) Discovery investment credit. (1) A taxpayer shall be allowed a
6 credit, to be computed as hereinafter provided, against the tax imposed
7 by this article where the taxpayer has been certified pursuant to
8 section nine hundred seventy-two of the general municipal law. The
9 amount of such credit shall be twenty percent of the cost or other basis
10 for federal income tax purposes of tangible personal property and other
11 tangible property, including buildings and structural components of
12 buildings, described in paragraph two of this subsection, but only if
13 the acquisition, construction, reconstruction or erection of such prop-
14 erty occurred or was commenced on or after the date of such designation
15 and prior to the expiration thereof. Provided, however, that in the case
16 of an acquisition, construction, reconstruction or erection which was
17 commenced during such period and continued or completed subsequently,
18 the credit shall be twenty percent of the portion of the cost or other
19 basis for federal income tax purposes attributable to such period, which
20 portion shall be ascertained by multiplying such cost or basis by a
21 fraction the numerator of which shall be the expenditures paid or
22 incurred during such period for such purposes and the denominator of
23 which shall be the total of all expenditures paid or incurred for such
24 acquisition, construction, reconstruction or erection.
25 (2) A credit shall be allowed under this subsection with respect to
26 tangible personal property and other tangible property, including build-
27 ings and structural components of buildings which: (A) are depreciable
28 pursuant to section one hundred sixty-seven of the Internal Revenue
29 Code, (B) have a useful life of four years or more, (C) are acquired by
30 purchase as defined in section one hundred seventy-nine (d) of the
31 Internal Revenue Code, and (D) are (i) principally used by the taxpayer
32 in the production of goods by manufacturing, processing, assembling,
33 refining, mining, extracting, farming, agriculture, horticulture, flori-
34 culture, viticulture or commercial fishing, (ii) industrial waste treat-
35 ment facilities or air pollution control facilities used in the taxpay-
36 er's trade or business, (iii) research and development property, (iv)
37 principally used in the ordinary course of the taxpayer's trade or busi-
38 ness as a broker or dealer in connection with the purchase or sale
39 (which shall include but not be limited to the issuance, entering into,
40 assumption, offset, assignment, termination, or transfer) of stocks,
41 bonds or other securities as defined in section four hundred seventy-
42 five (c)(2) of the Internal Revenue Code, or of commodities as defined
43 in section four hundred seventy-five (e) of the Internal Revenue Code,
44 or (v) principally used in the ordinary course of the taxpayer's trade
45 or business of providing investment advisory services for regulated
46 investment company as defined in section eight hundred fifty-one of the
47 Internal Revenue Code, or lending, loan arrangement or loan origination
48 services to customers in connection with the purchase or sale (which
49 shall include but not be limited to the issuance, entering into, assump-
50 tion, offset, assignment, termination, or transfer) of securities as
51 defined in section four hundred seventy-five(c)(2) of the Internal
52 Revenue Code. For purposes of clauses (iv) and (v) of this subparagraph,
53 property purchased by a taxpayer affiliated with a regulated broker,
54 dealer or registered investment adviser is allowed a credit under this
55 subsection if the property is used by its affiliated regulated broker,
56 dealer or registered investment adviser in accordance with this
S. 8524 9
1 subsection. For purposes of determining if the property is principally
2 used in qualifying uses, the uses by the taxpayer described in clauses
3 (iv) and (v) of this subparagraph may be aggregated. In addition, the
4 uses by the taxpayer, its affiliated regulated broker, dealer, and
5 registered investment adviser under either or both of those clauses may
6 be aggregated. Provided, however, a taxpayer shall not be allowed the
7 credit provided by clauses (iv) and (v) of this subparagraph unless (I)
8 eighty percent or more of the employees performing the administrative
9 and support functions resulting from or related to the qualifying uses
10 of such equipment are located in this state, or (II) the average number
11 of employees that perform the administrative and support functions
12 resulting from or related to the qualifying uses of such equipment and
13 are located in this state during the taxable year for which the credit
14 is claimed is equal to or greater than ninety-five percent of the aver-
15 age number of employees that perform these functions and are located in
16 this state during the thirty-six months immediately preceding the year
17 for which the credit is claimed, or (III) the number of employees
18 located in this state during the taxable year for which the credit is
19 claimed is equal to or greater than ninety percent of the number of
20 employees located in this state on December thirty-first, nineteen
21 hundred ninety-eight or, if the taxpayer was not a calendar year taxpay-
22 er in nineteen hundred ninety-eight, the last day of its first taxable
23 year ending after December thirty-first, nineteen hundred ninety-eight.
24 If the taxpayer becomes subject to tax in this state after the taxable
25 year beginning in nineteen hundred ninety-eight, then the taxpayer is
26 not required to satisfy the employment test provided in the preceding
27 sentence of this subparagraph for its first taxable year. For purposes
28 of item (III) of this clause, the employment test will be based on the
29 number of employees located in this state on the last day of the first
30 taxable year the taxpayer is subject to tax in this state. If the uses
31 of the property must be aggregated to determine whether the property is
32 principally used in qualifying uses, then either each affiliate using
33 the property must satisfy this employment test or this employment test
34 must be satisfied through the aggregation of the employees of the
35 taxpayer, its affiliated regulated broker, dealer, and registered
36 investment advisor using the property. For purposes of this subsection,
37 the term "goods" shall not include electricity. For purposes of this
38 paragraph, manufacturing shall mean the process of working raw materials
39 into wares suitable for use or which gives new shapes, new quality or
40 new combination to matter which already has gone through some artificial
41 process by the use of machinery, tools, appliances and other similar
42 equipment. Property used in the production of goods shall include
43 machinery, equipment or other tangible property which is principally
44 used in the repair and service of other machinery, equipment or other
45 tangible property used principally in the production of goods and shall
46 include all facilities used in the production operation, including stor-
47 age of material to be used in production and of the products that are
48 produced. For purposes of this paragraph, the terms "industrial waste
49 treatment facilities", "air pollution control facilities" and "research
50 and development property" shall have the meanings ascribed thereto by
51 clauses (ii) and (iii), respectively, of subparagraph (D) of this para-
52 graph, and the provisions of subparagraph (C) of this paragraph.
53 (3) A taxpayer shall not be allowed a credit under this subsection
54 with respect to any tangible personal property and other tangible prop-
55 erty, including buildings and structural components of buildings, which
56 it leases to any other person or corporation except where a taxpayer
S. 8524 10
1 leases property to an affiliated regulated broker, dealer, or registered
2 investment adviser that uses such property in accordance with clause
3 (iv) or (v) of subparagraph (D) of paragraph two of this subsection. For
4 purposes of the preceding sentence, any contract or agreement to lease
5 or rent or for a license to use such property shall be considered a
6 lease. Provided, however, in determining whether a taxpayer shall be
7 allowed a credit under this subsection with respect to such property,
8 any election made with respect to such property pursuant to the
9 provisions of paragraph eight of subsection (f) of section one hundred
10 sixty-eight of the Internal Revenue Code, as such paragraph was in
11 effect for agreements entered into prior to January first, nineteen
12 hundred eighty-four, shall be disregarded.
13 (4) If the amount of credit allowed under this subsection for any
14 taxable year shall exceed the taxpayer's tax for such year, the excess
15 may be carried over to the following year or years and may be deducted
16 from the taxpayer's tax for such year or years. Any refund paid pursu-
17 ant to this paragraph shall be deemed to be a refund of an overpayment
18 of tax as provided in section six hundred eighty-six of this chapter,
19 provided, however, that no interest shall be paid thereon.
20 (j-3) Discovery wage tax credit. (1) A taxpayer shall be allowed a
21 credit, to be computed as hereinafter provided, against the tax imposed
22 by this article, where the taxpayer has been certified pursuant to
23 section nine hundred seventy-two of the general municipal law. The
24 amount of such credit shall be as prescribed in paragraph three of this
25 subsection.
26 (2) "Discovery wages" means wages paid by the taxpayer for full-time
27 employment during a taxable year, provided that those wages are paid by
28 a certified business as defined by the commissioner of economic develop-
29 ment as required in his or her responsibilities.
30 (3) The credit provided in this subsection shall be equal to the prod-
31 uct of the gross wages paid and six and eighty-five hundredths percent
32 for each net new job created during the taxable year.
33 (4) "Net new job" shall be defined as each job that exceeds the aver-
34 age number of individuals employed full-time by the taxpayer in the
35 previous taxable year.
36 (5) If the amount of this credit and carryovers of such credit allowed
37 under this subsection for any taxable year shall exceed the taxpayer's
38 tax for such year, the excess, as well as any part of the credit or
39 carryovers of such credit, or both, which may not be deducted from the
40 tax otherwise due by reason of paragraph three of this subsection, may
41 be carried over to the following year or years and may be deducted from
42 the taxpayer's tax for such year or years.
43 § 6. Section 1511 of the tax law is amended by adding two new subdivi-
44 sions (dd) and (ee) to read as follows:
45 (dd) Discovery investment credit. (1) A taxpayer shall be allowed a
46 credit, to be computed as hereinafter provided, against the tax imposed
47 by this article where the taxpayer has been certified pursuant to
48 section nine hundred seventy-two of the general municipal law. The
49 amount of such credit shall be twenty percent of the cost or other basis
50 for federal income tax purposes of tangible personal property and other
51 tangible property, including buildings and structural components of
52 buildings, described in paragraph two of this subdivision, but only if
53 the acquisition, construction, reconstruction or erection of such prop-
54 erty occurred or was commenced on or after the date of such designation
55 and prior to the expiration thereof. Provided, however, that in the case
56 of an acquisition, construction, reconstruction or erection which was
S. 8524 11
1 commenced during such period and continued or completed subsequently,
2 the credit shall be twenty percent of the portion of the cost or other
3 basis for federal income tax purposes attributable to such period, which
4 portion shall be ascertained by multiplying such cost or basis by a
5 fraction the numerator of which shall be the expenditures paid or
6 incurred during such period for such purposes and the denominator of
7 which shall be the total of all expenditures paid or incurred for such
8 acquisition, construction, reconstruction or erection.
9 (2) A credit shall be allowed under this subdivision with respect to
10 tangible personal property and other tangible property, including build-
11 ings and structural components of buildings which: (A) are depreciable
12 pursuant to section one hundred sixty-seven of the Internal Revenue
13 Code, (B) have a useful life of four years or more, (C) are acquired by
14 purchase as defined in section one hundred seventy-nine (d) of the
15 Internal Revenue Code, and (D) are (i) principally used by the taxpayer
16 in the production of goods by manufacturing, processing, assembling,
17 refining, mining, extracting, farming, agriculture, horticulture, flori-
18 culture, viticulture or commercial fishing, (ii) industrial waste treat-
19 ment facilities or air pollution control facilities used in the taxpay-
20 er's trade or business, (iii) research and development property, (iv)
21 principally used in the ordinary course of the taxpayer's trade or busi-
22 ness as a broker or dealer in connection with the purchase or sale
23 (which shall include but not be limited to the issuance, entering into,
24 assumption, offset, assignment, termination, or transfer) of stocks,
25 bonds or other securities as defined in section four hundred
26 seventy-five(c)(2) of the Internal Revenue Code, or of commodities as
27 defined in section four hundred seventy-five (e) of the Internal Revenue
28 Code, or (v) principally used in the ordinary course of the taxpayer's
29 trade or business of providing investment advisory services for a regu-
30 lated investment company as defined in section eight hundred fifty-one
31 of the Internal Revenue Code, or lending, loan arrangement or loan orig-
32 ination services to customers in connection with the purchase or sale
33 (which shall include but not be limited to the issuance, entering into,
34 assumption, offset, assignment, termination, or transfer) of securities
35 as defined in section four hundred seventy-five(c)(2) of the Internal
36 Revenue Code. For purposes of clauses (iv) and (v) of this subparagraph,
37 property purchased by a taxpayer affiliated with a regulated broker,
38 dealer or registered investment adviser is allowed a credit under this
39 subdivision if the property is used by its affiliated regulated broker,
40 dealer or registered investment adviser in accordance with this subdivi-
41 sion. For purposes of determining if the property is principally used in
42 qualifying uses, the uses by the taxpayer described in clauses (iv) and
43 (v) of this subparagraph may be aggregated. In addition, the uses by the
44 taxpayer, its affiliated regulated broker, dealer, and registered
45 investment adviser under either or both of those clauses may be aggre-
46 gated. Provided, however, a taxpayer shall not be allowed the credit
47 provided by clauses (iv) and (v) of this subparagraph unless (I) eighty
48 percent or more of the employees performing the administrative and
49 support functions resulting from or related to the qualifying uses of
50 such equipment are located in this state, or (II) the average number of
51 employees that perform the administrative and support functions result-
52 ing from or related to the qualifying uses of such equipment and are
53 located in this state during the taxable year for which the credit is
54 claimed is equal to or greater than ninety-five percent of the average
55 number of employees that perform these functions and are located in this
56 state during the thirty-six months immediately preceding the year for
S. 8524 12
1 which the credit is claimed, or (III) the number of employees located in
2 this state during the taxable year for which the credit is claimed is
3 equal to or greater than ninety percent of the number of employees
4 located in this state on December thirty-first, nineteen hundred nine-
5 ty-eight or, if the taxpayer was not a calendar year taxpayer in nine-
6 teen hundred ninety-eight, the last day of its first taxable year ending
7 after December thirty-first, nineteen hundred ninety-eight. If the
8 taxpayer becomes subject to tax in this state after the taxable year
9 beginning in nineteen hundred ninety-eight, then the taxpayer is not
10 required to satisfy the employment test provided in the preceding
11 sentence of this subparagraph for its first taxable year. For purposes
12 of item (III) of this clause, the employment test will be based on the
13 number of employees located in this state on the last day of the first
14 taxable year the taxpayer is subject to tax in this state. If the uses
15 of the property must be aggregated to determine whether the property is
16 principally used in qualifying uses, then either each affiliate using
17 the property must satisfy this employment test or this employment test
18 must be satisfied through the aggregation of the employees of the
19 taxpayer, its affiliated regulated broker, dealer, and registered
20 investment adviser using the property. For purposes of this subdivision,
21 the term "goods" shall not include electricity. For purposes of this
22 paragraph, manufacturing shall mean the process of working raw materials
23 into wares suitable for use or which gives new shapes, new quality or
24 new combination to matter which already has gone through some artificial
25 process by the use of machinery, tools, appliances and other similar
26 equipment. Property used in the production of goods shall include
27 machinery, equipment or other tangible property which is principally
28 used in the repair and service of other machinery, equipment or other
29 tangible property used principally in the production of goods and shall
30 include all facilities used in the production operation, including stor-
31 age of material to be used in production and of the products that are
32 produced. For purposes of this paragraph, the terms "industrial waste
33 treatment facilities", "air pollution control facilities" and "research
34 and development property" shall have the meanings ascribed thereto by
35 clauses (ii) and (iii), respectively, of subparagraph (D) of this para-
36 graph, and the provisions of subparagraph (C) of this paragraph shall
37 apply.
38 (3) A taxpayer shall not be allowed a credit under this subdivision
39 with respect to any tangible personal property and other tangible prop-
40 erty, including buildings and structural components of buildings, which
41 it leases to any other person or corporation except where a taxpayer
42 leases property to an affiliated regulated broker, dealer, or registered
43 investment adviser that uses such property in accordance with clause
44 (iv) or (v) of subparagraph (D) of paragraph two of this subdivision.
45 For purposes of the preceding sentence, any contract or agreement to
46 lease or rent or for a license to use such property shall be considered
47 a lease. Provided, however, in determining whether a taxpayer shall be
48 allowed a credit under this subdivision with respect to such property,
49 any election made with respect to such property pursuant to the
50 provisions of paragraph eight of subsection (f) of section one hundred
51 sixty-eight of the Internal Revenue Code, as such paragraph was in
52 effect for agreements entered into prior to January first, nineteen
53 hundred eighty-four, shall be disregarded.
54 (4) If the amount of credit allowed under this subdivision for any
55 taxable year shall exceed the taxpayer's tax for such year, the excess
56 may be carried over to the following year or years and may be deducted
S. 8524 13
1 from the taxpayer's tax for such year or years. Any refund paid pursuant
2 to this paragraph shall be deemed to be a refund of an overpayment of
3 tax as provided in section six hundred eighty-six of this chapter,
4 provided, however, that no interest shall be paid thereon.
5 (ee) Discovery wage tax credit. (1) A taxpayer shall be allowed a
6 credit, to be computed as hereinafter provided, against the tax imposed
7 by this article, where the taxpayer has been certified pursuant to
8 section nine hundred seventy-two of the general municipal law. The
9 amount of such credit shall be as prescribed in paragraph three of this
10 subdivision.
11 (2) "Discovery wages" means wages paid by the taxpayer for full-time
12 employment during a taxable year, provided that those wages are paid by
13 a certified business as defined by the commissioner of economic develop-
14 ment as required in his or her responsibilities.
15 (3) The credit provided in this subdivision shall be equal to the
16 product of the gross wages paid and six and eighty-five hundredths
17 percent for each net new job created during the taxable year.
18 (4) "Net new job" shall be defined as each job that exceeds the aver-
19 age number of individuals employed full-time by the taxpayer in the
20 previous taxable year.
21 (5) If the amount of this credit and carryovers of such credit allowed
22 under this subdivision for any taxable year shall exceed the taxpayer's
23 tax for such year, the excess, as well as any part of the credit or
24 carryovers of such credit, or both, which may not be deducted from the
25 tax otherwise due by reason of paragraph three of this subdivision, may
26 be carried over to the following year or years and may be deducted from
27 the taxpayer's tax for such year or years.
28 § 7. This act shall take effect immediately; provided, however, that
29 any rules and regulations necessary to carry out the provisions of this
30 act shall be promulgated by the commissioner of economic development
31 before such effective date.
32 PART C
33 Section 1. The opening paragraph of paragraph (a) of subdivision 1 of
34 section 210 of the tax law, as amended by section 10 of part T of chap-
35 ter 59 of the laws of 2015, is amended to read as follows:
36 For taxable years beginning before January first, two thousand
37 sixteen, the amount prescribed by this paragraph shall be computed at
38 the rate of seven and one-tenth percent of the taxpayer's business
39 income base. For taxable years beginning on or after January first, two
40 thousand [sixteen] seventeen, the amount prescribed by this paragraph
41 shall be [six and one-half] five and nine hundredths percent of the
42 taxpayer's business income base. The taxpayer's business income base
43 shall mean the portion of the taxpayer's business income apportioned
44 within the state as hereinafter provided. However, in the case of a
45 small business taxpayer, as defined in paragraph (f) of this subdivi-
46 sion, the amount prescribed by this paragraph shall be computed pursuant
47 to subparagraph (iv) of this paragraph and in the case of a manufactur-
48 er, as defined in subparagraph (vi) of this paragraph, the amount
49 prescribed by this paragraph shall be computed pursuant to subparagraph
50 (vi) of this paragraph, and, in the case of a qualified emerging tech-
51 nology company, as defined in subparagraph (vii) of this paragraph, the
52 amount prescribed by this paragraph shall be computed pursuant to
53 subparagraph (vii) of this paragraph.
S. 8524 14
1 § 2. Subparagraph (iv) of paragraph (a) of subdivision 1 of section
2 210 of the tax law, as amended by section 12 of part A of chapter 59 of
3 the laws of 2014, is amended to read as follows:
4 (iv) (A) for taxable years beginning before January first, two thou-
5 sand sixteen, if the business income base is not more than two hundred
6 ninety thousand dollars the amount shall be six and one-half percent of
7 the business income base; if the business income base is more than two
8 hundred ninety thousand dollars but not over three hundred ninety thou-
9 sand dollars the amount shall be the sum of (1) eighteen thousand eight
10 hundred fifty dollars, (2) seven and one-tenth percent of the excess of
11 the business income base over two hundred ninety thousand dollars but
12 not over three hundred ninety thousand dollars and (3) four and thirty-
13 five hundredths percent of the excess of the business income base over
14 three hundred fifty thousand dollars but not over three hundred ninety
15 thousand dollars;
16 (B) for taxable years beginning on or after January first, two thou-
17 sand seventeen and before January first, two thousand eighteen, if the
18 business income base is not more than five hundred thousand dollars the
19 amount shall be three and one-quarter percent of the business income
20 base; if the business income base is more than five hundred thousand
21 dollars but not over six hundred thousand dollars the amount shall be
22 the sum of (1) sixteen thousand two hundred fifty dollars, (2) six and
23 one-half percent of the excess of the business income base over five
24 hundred thousand dollars but not over six hundred thousand dollars and
25 (3) thirty-two and one-half percent of the excess of the business income
26 base over five hundred fifty thousand dollars but not over six hundred
27 thousand dollars;
28 (C) for taxable years beginning on or after January first, two thou-
29 sand eighteen and before January first, two thousand nineteen, if the
30 business income base is not more than five hundred thousand dollars the
31 amount shall be two and nine-tenths percent of the business income base;
32 if the business income base is more than five hundred thousand dollars
33 but not over six hundred thousand dollars the amount shall be the sum of
34 (1) fourteen thousand five hundred dollars, (2) six and one-half percent
35 of the excess of the business income base over five hundred thousand
36 dollars but not over six hundred thousand dollars and (3) thirty-six
37 percent of the excess of the business income base over five hundred
38 fifty thousand dollars but not over six hundred thousand dollars;
39 (D) for taxable years beginning on or after January first, two thou-
40 sand nineteen and before January first, two thousand twenty, if the
41 business income base is not more than five hundred thousand dollars the
42 amount shall be two and one-half percent of the business income base; if
43 the business income base is more than five hundred thousand dollars but
44 not over six hundred thousand dollars the amount shall be the sum of (1)
45 twelve thousand five hundred dollars, (2) six and one-half percent of
46 the excess of the business income base over five hundred thousand
47 dollars but not over six hundred thousand dollars and (3) forty percent
48 of the excess of the business income base over five hundred fifty thou-
49 sand dollars but not over six hundred thousand dollars; and
50 (E) for taxable years beginning on or after January first, two thou-
51 sand twenty, if the business income base is not more than six hundred
52 thousand dollars the amount shall be zero percent.
53 § 3. Paragraph 1 of subdivision (a) of section 1502 of the tax law, as
54 amended by section 4 of part N of chapter 60 of the laws of 2007, is
55 amended to read as follows:
S. 8524 15
1 (1) for taxable years beginning before July first, two thousand, nine
2 percent of the taxpayer's entire net income, or portion thereof allo-
3 cated within this state, for the taxable year, or part thereof, except
4 that for taxable years beginning prior to January first, nineteen
5 hundred seventy-eight, the rate shall be four and five-tenths percent;
6 for taxable years beginning after June thirtieth, two thousand and
7 before July first, two thousand one, eight and one-half percent of the
8 taxpayer's entire net income, or portion thereof allocated within this
9 state, for the taxable year, or part thereof; for taxable years begin-
10 ning after June thirtieth, two thousand one and before July first, two
11 thousand two, eight percent of the taxpayer's entire net income, or
12 portion thereof allocated within this state, for the taxable year, or
13 part thereof; for taxable years beginning after June thirtieth, two
14 thousand two and before January first, two thousand seven, seven and
15 one-half percent of the taxpayer's entire net income, or portion thereof
16 allocated within this state, for the taxable year, or part thereof;
17 [and] for taxable years beginning [on or] after January first, two thou-
18 sand seven and before January first, two thousand seventeen, seven and
19 one-tenth percent of the taxpayer's entire net income, or portion there-
20 of allocated within this state, for the taxable year, or part thereof;
21 and for taxable years beginning on or after January first, two thousand
22 seventeen, six and eighty-five one hundredths percent of the taxpayer's
23 entire net income, or portion thereof allocated within this state, for
24 the taxable year, or part thereof; or
25 § 4. Subparagraph 1 of paragraph (b) of subdivision 1 of section 186-a
26 of the tax law, as amended by section 4 of part Y of chapter 63 of the
27 laws of 2000, is amended to read as follows:
28 (1) two and five-tenths percent on and after January first, two thou-
29 sand through December thirty-first, two thousand, two and forty-five one
30 hundredths percent from January first, two thousand one through December
31 thirty-first, two thousand one, two and four-tenths percent from January
32 first, two thousand two through December thirty-first, two thousand two,
33 two and twenty-five one hundredths percent from January first, two thou-
34 sand three through December thirty-first, two thousand three, two and
35 one hundred twenty-five one thousandths percent from January first, two
36 thousand four through December thirty-first, two thousand four [and],
37 two percent commencing January first, two thousand five and one and
38 one-half percent commencing January first, two thousand seventeen and
39 thereafter of that portion of its gross income derived from the trans-
40 portation, transmission or distribution of gas or electricity by means
41 of conduits, mains, pipes, wires, lines or the like and
42 § 5. Subparagraph 1 of paragraph (a) of subdivision 2 of section 186-e
43 of the tax law, as amended by section 2 of part P of chapter 59 of the
44 laws of 2015, is amended to read as follows:
45 (1) There is hereby imposed an excise tax on the sale of telecommuni-
46 cation services, except for the sale of mobile telecommunication
47 services that are subject to tax under subparagraph two of this para-
48 graph, by any person which is a provider of telecommunication services,
49 to be paid by such person, at the rate of three and one-half percent
50 prior to October first, nineteen hundred ninety-eight, three and one-
51 quarter percent from October first, nineteen hundred ninety-eight
52 through December thirty-first, nineteen hundred ninety-nine, [and] two
53 and one-half percent [on and] after January first, two thousand five,
54 and two percent on and after January first, two thousand seventeen of
55 gross receipt from: (i) any intrastate telecommunication services; (ii)
56 any interstate and international telecommunication services (other than
S. 8524 16
1 interstate and international private telecommunication services) which
2 originate or terminate in this state and which telecommunication
3 services are charged to a service address in this state, regardless of
4 where the amounts charged for such services are billed or ultimately
5 paid; and (iii) interstate and international private telecommunication
6 services, the gross receipt to which the tax shall apply shall be deter-
7 mined as prescribed in subdivision three of this section.
8 § 6. This act shall take effect immediately and shall apply to taxable
9 years beginning on or after January 1, 2018, provided, however, that any
10 rules and regulations necessary to carry out the provisions of this act
11 shall be promulgated before such effective date.
12 § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
13 sion, section or part of this act shall be adjudged by any court of
14 competent jurisdiction to be invalid, such judgment shall not affect,
15 impair, or invalidate the remainder thereof, but shall be confined in
16 its operation to the clause, sentence, paragraph, subdivision, section
17 or part thereof directly involved in the controversy in which such judg-
18 ment shall have been rendered. It is hereby declared to be the intent of
19 the legislature that this act would have been enacted even if such
20 invalid provisions had not been included herein.
21 § 3. This act shall take effect immediately, provided, however, that
22 the applicable effective date of Parts A through C of this act shall be
23 as specifically set forth in the last section of such Parts.