Bill Text: NY A05394 | 2013-2014 | General Assembly | Introduced
Bill Title: Establishes the New York state cornerstone program and the New York state discovery program.
Spectrum: Partisan Bill (Republican 26-0)
Status: (Introduced - Dead) 2014-04-07 - held for consideration in ways and means [A05394 Detail]
Download: New_York-2013-A05394-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 5394 2013-2014 Regular Sessions I N A S S E M B L Y February 25, 2013 ___________ Introduced by M. of A. KOLB, BUTLER, REILICH, KATZ -- Multi-Sponsored by -- M. of A. BARCLAY, BLANKENBUSH, CERETTO, CROUCH, CURRAN, DUPREY, FINCH, FITZPATRICK, GIGLIO, GOODELL, GRAF, HAWLEY, JOHNS, JORDAN, LOSQUADRO, McKEVITT, McLAUGHLIN, MONTESANO, OAKS, PALMESANO, RABBITT, RAIA, SALADINO, TEDISCO, TENNEY -- read once and referred to the Committee on Ways and Means 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 S 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 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06260-01-3 A. 5394 2 1 investment, private business development and job creation. It should be 2 the public policy of the state to help promote the development of new 3 businesses, rather than deter them with punitive regulation and exces- 4 sive taxes. It is further found and declared that it is the public poli- 5 cy of the state to achieve these goals through the mutual cooperation of 6 all levels of state and local government, the business community and 7 academic institutions. 8 PART A 9 Section 1. Article 18-B of the general municipal law is REPEALED. 10 S 2. The general municipal law is amended by adding a new article 18-B 11 to read as follows: 12 ARTICLE 18-B 13 NEW YORK STATE CORNERSTONE PROGRAM 14 SECTION 955. NEW YORK CORNERSTONE PROGRAM ESTABLISHED. 15 956. RESPONSIBILITIES OF THE COMMISSIONER. 16 957. CORNERSTONE DEVELOPMENT BOARD. 17 958. REPORTING REQUIREMENTS. 18 S 955. NEW YORK CORNERSTONE PROGRAM ESTABLISHED. THERE IS HEREBY 19 ESTABLISHED THE NEW YORK CORNERSTONE PROGRAM. 20 S 956. RESPONSIBILITIES OF THE COMMISSIONER. 1. THE COMMISSIONER OF 21 ECONOMIC DEVELOPMENT SHALL, IN CONSULTATION WITH THE DIRECTOR OF THE 22 BUDGET, THE COMMISSIONER OF LABOR, AND THE COMMISSIONER OF TAXATION AND 23 FINANCE, PROMULGATE RULES AND REGULATIONS, WHICH, NOTWITHSTANDING ANY 24 PROVISIONS TO THE CONTRARY IN THE STATE ADMINISTRATIVE PROCEDURE ACT, 25 MAY BE ADOPTED ON AN EMERGENCY BASIS, RELATING TO: 26 (A) THE APPLICATION PROCESS; 27 (B) DEFINING TYPES OF BUSINESSES ELIGIBLE, INCLUDING BUT NOT LIMITED 28 TO MANUFACTURING, HIGH-TECH, BIO-TECH, CLEAN-TECH AND AGRI-BUSINESS; 29 (C) LIMITING BUSINESSES TO TEN YEARS OF PARTICIPATION; 30 (D) CERTIFICATION BY THE COMMISSIONER FOR ELIGIBILITY OF BUSINESS 31 ENTERPRISES FOR BENEFITS REFERRED TO IN THIS ARTICLE. CRITERIA FOR 32 CERTIFICATION SHALL INCLUDE, BUT NOT BE LIMITED TO: 33 (I) REQUIRING A BUSINESS TO HAVE BEEN OPERATIONAL IN NEW YORK STATE 34 FOR AT LEAST TEN CONSECUTIVE YEARS PRIOR TO APPLYING TO THE CORNERSTONE 35 PROGRAM; 36 (II) REQUIRING A BUSINESS TO SHOW PROOF THAT THEY WILL HAVE TO LOWER 37 EMPLOYMENT LEVELS WITHOUT CERTIFICATION IN THE PROGRAM; 38 (III) REQUIRING A BUSINESS TO COMMIT TO MAINTAINING OR INCREASING 39 CURRENT EMPLOYMENT LEVELS TO QUALIFY FOR TAX BENEFITS; 40 (IV) WHETHER CERTIFICATION WILL HAVE THE UNDESIRED EFFECT OF CAUSING 41 INDIVIDUALS TO TRANSFER FROM EXISTING EMPLOYMENT WITH ANOTHER BUSINESS 42 ENTERPRISE TO SIMILAR EMPLOYMENT WITH THE BUSINESS ENTERPRISE SO CERTI- 43 FIED, AND TRANSFERRING EXISTING EMPLOYMENT FROM ONE OR MORE OTHER MUNI- 44 CIPALITIES, TOWNS OR VILLAGES IN THE STATE; 45 (V) WHETHER SUCH ENTERPRISE IS LIKELY TO ENHANCE THE ECONOMIC CLIMATE 46 OF THE STATE; AND 47 (VI) WHETHER THE COMMISSIONER OF LABOR ESTABLISHES THAT SUCH BUSINESS 48 ENTERPRISE, DURING THE TEN YEARS PRECEDING THE SUBMISSION OF AN APPLICA- 49 TION FOR CERTIFICATION, HAS ENGAGED IN A SUBSTANTIAL VIOLATION OR A 50 PATTERN OF VIOLATIONS OF LAWS REGULATING UNEMPLOYMENT INSURANCE, WORKERS 51 COMPENSATION, PUBLIC WORK, CHILD LABOR, EMPLOYMENT OF MINORITIES AND 52 WOMEN, SAFETY AND HEALTH, OR OTHER LAWS FOR THE PROTECTION OF WORKERS AS 53 DETERMINED BY FINAL JUDGMENT OF A JUDICIAL OR ADMINISTRATIVE PROCEEDING. A. 5394 3 1 2. THE COMMISSIONER OF ECONOMIC DEVELOPMENT SHALL, IN CONSULTATION 2 WITH THE DIRECTOR OF THE BUDGET, THE COMMISSIONER OF LABOR, AND THE 3 COMMISSIONER OF TAXATION AND FINANCE, ESTABLISH A COST BENEFIT ANALYSIS. 4 3. THE COMMISSIONER OF ECONOMIC DEVELOPMENT SHALL, IN CONSULTATION 5 WITH THE DIRECTOR OF THE BUDGET, THE COMMISSIONER OF LABOR, AND THE 6 COMMISSIONER OF TAXATION AND FINANCE, ESTABLISH A PROGRAM AND PROPOSE 7 LEGISLATION GRANTING TAX EXEMPTIONS PREVIOUSLY APPLICABLE TO EMPIRE 8 ZONES FOR BUSINESS ENTERPRISES ELIGIBLE UNDER THE CORNERSTONE PROGRAM 9 ESTABLISHED PURSUANT TO THIS ARTICLE, TO THE GOVERNOR AND LEGISLATURE 10 WITHIN ONE HUNDRED EIGHTY DAYS FROM THE EFFECTIVE DATE OF THIS ARTICLE. 11 S 957. CORNERSTONE DEVELOPMENT BOARD. 1. THE CORNERSTONE DEVELOPMENT 12 BOARD IS HEREBY CREATED. 13 2. SUCH BOARD SHALL CONSIST OF THE COMMISSIONER OF TAXATION AND 14 FINANCE, THE DIRECTOR OF THE BUDGET, THE COMMISSIONER OF LABOR AND TWO 15 MEMBERS TO BE APPOINTED BY THE GOVERNOR; ONE MEMBER TO BE APPOINTED BY 16 THE TEMPORARY PRESIDENT OF THE SENATE; ONE MEMBER TO BE APPOINTED BY THE 17 SPEAKER OF THE ASSEMBLY; ONE MEMBER TO BE APPOINTED BY THE MINORITY 18 LEADER OF THE SENATE AND ONE MEMBER TO BE APPOINTED BY THE MINORITY 19 LEADER OF THE ASSEMBLY. 20 3. THE GOVERNOR SHALL DESIGNATE FROM AMONG THE VOTING MEMBERS THE 21 CHAIR OF THE BOARD. EACH MEMBER OF THE BOARD SHALL BE ENTITLED TO DESIG- 22 NATE A REPRESENTATIVE TO ATTEND MEETINGS OF THE BOARD IN HIS OR HER 23 PLACE, AND TO VOTE OR OTHERWISE ACT ON HIS OR HER BEHALF IN HIS OR HER 24 ABSENCE. 25 4. NOTICE OF SUCH DESIGNATION SHALL BE FURNISHED IN WRITING TO THE 26 BOARD BY THE DESIGNATING MEMBER. 27 5. A REPRESENTATIVE SHALL SERVE AT THE PLEASURE OF THE DESIGNATING 28 MEMBER. 29 6. A REPRESENTATIVE SHALL NOT BE AUTHORIZED TO DELEGATE ANY OF HIS OR 30 HER DUTIES OR FUNCTIONS TO ANY OTHER PERSON. 31 S 958. REPORTING REQUIREMENTS. 1. THE DEPARTMENT OF AUDIT AND 32 CONTROL, THE DEPARTMENT OF TAXATION AND FINANCE AND THE DEPARTMENT OF 33 ECONOMIC DEVELOPMENT SHALL PREPARE REPORTS ON THE MANAGEMENT AND THE 34 ECONOMIC AND FISCAL IMPACT OF THE CORNERSTONE PROGRAM. 35 2. THE ANALYSIS OF THE FISCAL AND ECONOMIC IMPACT OF THE PROGRAM SHALL 36 INCLUDE, BUT NOT BE LIMITED TO: A REVIEW OF THE COST OF PROVIDING THE 37 TAX BENEFITS REFERRED TO IN THIS ARTICLE; PROGRESS OF THE PROGRAM; 38 NUMBER OF TAX CREDITS CLAIMED BY EACH CERTIFIED BUSINESS; NUMBER OF JOBS 39 CREATED AND/OR RETAINED BY EACH BUSINESS AND ALL OTHER INFORMATION 40 REQUESTED AND NOT PROHIBITED BY LAW. 41 3. SUCH REPORTS SHALL BE TRANSMITTED TO THE GOVERNOR AND THE LEGISLA- 42 TURE BY SEPTEMBER FIRST, TWO THOUSAND THIRTEEN AND EVERY YEAR THEREAFTER 43 AND SHALL BE POSTED ONLINE FOR FULL PUBLIC DISCLOSURE. 44 S 3. This act shall take effect immediately; provided, however, that 45 any rules and regulations necessary to carry out the provisions of this 46 act shall be promulgated before such effective date. 47 PART B 48 Section 1. This act shall be known and may be cited as the "New York 49 state discovery act". 50 S 2. The general municipal law is amended by adding a new article 51 18-D to read as follows: 52 ARTICLE 18-D 53 NEW YORK STATE DISCOVERY PROGRAM 54 SECTION 972. NEW YORK STATE DISCOVERY PROGRAM. A. 5394 4 1 973. JOB DEVELOPMENT FUND. 2 S 972. NEW YORK STATE DISCOVERY PROGRAM. 1. THE NEW YORK STATE DISCOV- 3 ERY PROGRAM IS HEREBY ESTABLISHED. 4 2. THE COMMISSIONER OF ECONOMIC DEVELOPMENT SHALL, AFTER CONSULTATION 5 WITH THE DIRECTOR OF THE BUDGET, THE COMMISSIONER OF LABOR, AND THE 6 COMMISSIONER OF TAXATION AND FINANCE, PROMULGATE RULES AND REGULATIONS, 7 WHICH, NOTWITHSTANDING ANY PROVISIONS TO THE CONTRARY IN THE STATE 8 ADMINISTRATIVE PROCEDURE ACT, MAY BE ADOPTED ON AN EMERGENCY BASIS, 9 RELATING TO: 10 (A) THE APPLICATION PROCESS; 11 (B) DEFINING TYPES OF BUSINESSES ELIGIBLE, INCLUDING BUT NOT LIMITED 12 TO MANUFACTURING, HIGH-TECH, BIO-TECH, CLEAN-TECH AND AGRI-BUSINESS; 13 (C) LIMITING BUSINESSES TO TEN YEARS OF PARTICIPATION; 14 (D) CERTIFICATION BY THE COMMISSIONER OF ECONOMIC DEVELOPMENT AS TO 15 THE ELIGIBILITY OF BUSINESS ENTERPRISES FOR BENEFITS REFERRED TO IN THIS 16 SECTION, WHICH SHALL BE GOVERNED BY CRITERIA INCLUDING, BUT NOT LIMITED 17 TO: 18 (I) REQUIRING AN ELIGIBLE BUSINESS TO BE A START-UP BUSINESS, OR A 19 BUSINESS OPERATING IN THE STATE FOR TWO YEARS OR LESS; 20 (II) A BUSINESS MUST OFFER INTERNSHIPS TO LOCAL HIGH SCHOOL STUDENTS, 21 BOCES STUDENTS AND COLLEGE STUDENTS PER A PLAN DEVELOPED BY THE COMMIS- 22 SIONER OF ECONOMIC DEVELOPMENT; 23 (III) A BUSINESS MUST COMMIT TO INCREASING CURRENT EMPLOYMENT LEVELS 24 TO QUALIFY FOR TAX BENEFITS; 25 (IV) WHETHER CERTIFICATION WILL HAVE THE UNDESIRED EFFECT OF CAUSING 26 INDIVIDUALS TO TRANSFER FROM EXISTING EMPLOYMENT WITH ANOTHER BUSINESS 27 ENTERPRISE TO SIMILAR EMPLOYMENT WITH THE BUSINESS ENTERPRISE SO CERTI- 28 FIED, AND TRANSFERRING EXISTING EMPLOYMENT FROM ONE OR MORE OTHER MUNI- 29 CIPALITIES, TOWNS OR VILLAGES IN THE STATE; 30 (V) WHETHER SUCH ENTERPRISE IS LIKELY TO ENHANCE THE ECONOMIC CLIMATE 31 OF THE STATE; 32 (VI) WHETHER THE COMMISSIONER OF LABOR ESTABLISHES THAT SUCH BUSINESS 33 ENTERPRISE, DURING THE TWO YEARS PRECEDING THE SUBMISSION OF AN APPLICA- 34 TION FOR CERTIFICATION, HAS ENGAGED IN A SUBSTANTIAL VIOLATION OR A 35 PATTERN OF VIOLATIONS OF LAWS REGULATING UNEMPLOYMENT INSURANCE, WORKERS 36 COMPENSATION, PUBLIC WORK, CHILD LABOR, EMPLOYMENT OF MINORITIES AND 37 WOMEN, SAFETY AND HEALTH, OR OTHER LAWS FOR THE PROTECTION OF WORKERS AS 38 DETERMINED BY FINAL JUDGMENT OF A JUDICIAL OR ADMINISTRATIVE PROCEEDING; 39 AND 40 (VII) WHETHER SUCH BUSINESS MEETS THE REQUIREMENTS OF THE COST BENEFIT 41 ANALYSIS AS ESTABLISHED BY THE COMMISSIONER OF ECONOMIC DEVELOPMENT. 42 3. THE DEPARTMENT OF AUDIT AND CONTROL, THE DEPARTMENT OF TAXATION AND 43 FINANCE AND THE DEPARTMENT OF ECONOMIC DEVELOPMENT SHALL PREPARE REPORTS 44 ON THE MANAGEMENT AND THE ECONOMIC AND FISCAL IMPACT OF THE DISCOVERY 45 PROGRAM. THE ANALYSIS OF THE FISCAL AND ECONOMIC IMPACT OF THE PROGRAM 46 SHALL INCLUDE, BUT NOT BE LIMITED TO: A REVIEW OF THE COST OF PROVIDING 47 THE TAX BENEFITS REFERRED TO IN THIS ARTICLE; PROGRESS OF THE PROGRAM; 48 NUMBER OF TAX CREDITS CLAIMED BY EACH CERTIFIED BUSINESS; NUMBER OF JOBS 49 CREATED BY EACH BUSINESS AND ALL OTHER INFORMATION REQUESTED AND NOT 50 PROHIBITED BY LAW. SUCH REPORTS SHALL BE TRANSMITTED TO THE GOVERNOR AND 51 THE LEGISLATURE BY SEPTEMBER FIRST, TWO THOUSAND THIRTEEN AND EVERY YEAR 52 THEREAFTER AND SHALL BE POSTED ONLINE FOR FULL PUBLIC DISCLOSURE. 53 4. THE DEPARTMENT OF ECONOMIC DEVELOPMENT SHALL PROVIDE GRANTS OF UP 54 TO TWO THOUSAND DOLLARS FOR EVERY INTERNSHIP DEVELOPED UNDER THIS 55 PROGRAM, TO BE PAID FOR OUT OF THE JOB DEVELOPMENT FUND ESTABLISHED 56 PURSUANT TO THIS ARTICLE. SUCH GRANT ALLOCATIONS SHALL BE DIVIDED EVENLY A. 5394 5 1 BETWEEN THE CERTIFIED BUSINESS AND THE CORRESPONDING INSTITUTION OF 2 HIGHER EDUCATION TO COVER COSTS ASSOCIATED WITH THE DEVELOPMENT OF SUCH 3 INTERNSHIPS. 4 S 973. JOB DEVELOPMENT FUND. THERE IS HEREBY ESTABLISHED IN THE JOINT 5 CUSTODY OF THE COMMISSIONER OF TAXATION AND FINANCE AND THE STATE COMP- 6 TROLLER A FUND TO BE KNOWN AS THE "JOB DEVELOPMENT FUND". 7 2. THE FUND SHALL CONSIST OF MONIES APPROPRIATED FOR THE DIVISION OF 8 SCIENCE, TECHNOLOGY AND INNOVATION. 9 3. MONEYS OF THE FUND SHALL BE EXPENDED FOR THE PURPOSES OF CARRYING 10 OUT THE PROVISIONS OF SECTION NINE HUNDRED SEVENTY-TWO OF THIS ARTICLE. 11 MONEYS SHALL BE PAID OUT OF THE FUND ON THE AUDIT AND WARRANT OF THE 12 STATE COMPTROLLER ON VOUCHERS APPROVED BY THE DIVISION OF SCIENCE, TECH- 13 NOLOGY AND INNOVATION. ANY INTEREST RECEIVED BY THE COMPTROLLER ON 14 MONEYS ON DEPOSIT IN THE JOB DEVELOPMENT FUND SHALL BE RETAINED IN AND 15 BECOME PART OF SUCH FUND. 16 S 3. The tax law is amended by adding a new section 15-a to read as 17 follows: 18 S 15-A. DISCOVERY ZONE PROPERTY TAX CREDIT. FOR A BUSINESS ENTERPRISE 19 WHICH IS FIRST CERTIFIED UNDER SECTION NINE HUNDRED SEVENTY-TWO OF THE 20 GENERAL MUNICIPAL LAW ON OR AFTER JULY FIRST, TWO THOUSAND THIRTEEN, THE 21 CREDIT SHALL BE FOR A PERIOD OF TEN YEARS AND SHALL NOT EXCEED THIRTY 22 PERCENT OF THE ELIGIBLE REAL PROPERTY TAXES PAID IN THE CURRENT TAXABLE 23 YEAR OF ELIGIBILITY. 24 S 4. Section 210 of the tax law is amended by adding two new subdivi- 25 sions 46 and 47 to read as follows: 26 46. DISCOVERY INVESTMENT CREDIT. (A) A TAXPAYER SHALL BE ALLOWED A 27 CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED 28 BY THIS ARTICLE WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO 29 SECTION NINE HUNDRED SEVENTY-TWO OF THE GENERAL MUNICIPAL LAW. THE 30 AMOUNT OF SUCH CREDIT SHALL BE TWENTY PERCENT OF THE COST OR OTHER BASIS 31 FOR FEDERAL INCOME TAX PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER 32 TANGIBLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF 33 BUILDINGS, DESCRIBED IN PARAGRAPH (B) OF THIS SUBDIVISION, BUT ONLY IF 34 THE ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION OF SUCH PROP- 35 ERTY OCCURRED OR WAS COMMENCED ON OR AFTER THE DATE OF SUCH DESIGNATION 36 AND PRIOR TO THE EXPIRATION THEREOF. PROVIDED, HOWEVER, THAT IN THE CASE 37 OF AN ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION WHICH WAS 38 COMMENCED DURING SUCH PERIOD AND CONTINUED OR COMPLETED SUBSEQUENTLY, 39 THE CREDIT SHALL BE TWENTY PERCENT OF THE PORTION OF THE COST OR OTHER 40 BASIS FOR FEDERAL INCOME TAX PURPOSES ATTRIBUTABLE TO SUCH PERIOD, WHICH 41 PORTION SHALL BE ASCERTAINED BY MULTIPLYING SUCH COST OR BASIS BY A 42 FRACTION THE NUMERATOR OF WHICH SHALL BE THE EXPENDITURES PAID OR 43 INCURRED DURING SUCH PERIOD FOR SUCH PURPOSES AND THE DENOMINATOR OF 44 WHICH SHALL BE THE TOTAL OF ALL EXPENDITURES PAID OR INCURRED FOR SUCH 45 ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION. 46 (B) A CREDIT SHALL BE ALLOWED UNDER THIS SUBDIVISION WITH RESPECT TO 47 TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY, INCLUDING BUILD- 48 INGS AND STRUCTURAL COMPONENTS OF BUILDINGS WHICH: (1) ARE DEPRECIABLE 49 PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE 50 CODE, (2) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, (3) ARE ACQUIRED BY 51 PURCHASE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE 52 INTERNAL REVENUE CODE, AND (4) ARE (I) PRINCIPALLY USED BY THE TAXPAYER 53 IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROCESSING, ASSEMBLING, 54 REFINING, MINING, EXTRACTING, FARMING, AGRICULTURE, HORTICULTURE, FLORI- 55 CULTURE, VITICULTURE OR COMMERCIAL FISHING, (II) INDUSTRIAL WASTE TREAT- 56 MENT FACILITIES OR AIR POLLUTION CONTROL FACILITIES USED IN THE TAXPAY- A. 5394 6 1 ER'S TRADE OR BUSINESS, (III) RESEARCH AND DEVELOPMENT PROPERTY, (IV) 2 PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR BUSI- 3 NESS AS A BROKER OR DEALER IN CONNECTION WITH THE PURCHASE OR SALE 4 (WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO, 5 ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF STOCKS, 6 BONDS OR OTHER SECURITIES AS DEFINED IN SECTION FOUR HUNDRED 7 SEVENTY-FIVE (C)(2) OF THE INTERNAL REVENUE CODE, OR OF COMMODITIES AS 8 DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (E) OF THE INTERNAL REVENUE 9 CODE, OR (V) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S 10 TRADE OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES FOR A REGU- 11 LATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE 12 OF THE INTERNAL REVENUE CODE, OR LENDING, LOAN ARRANGEMENT OR LOAN ORIG- 13 INATION SERVICES TO CUSTOMERS IN CONNECTION WITH THE PURCHASE OR SALE 14 (WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO, 15 ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF SECURITIES 16 AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (C)(2) OF THE INTERNAL 17 REVENUE CODE. FOR PURPOSES OF CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH, 18 PROPERTY PURCHASED BY A TAXPAYER AFFILIATED WITH A REGULATED BROKER, 19 DEALER OR REGISTERED INVESTMENT ADVISER IS ALLOWED A CREDIT UNDER THIS 20 SUBDIVISION IF THE PROPERTY IS USED BY ITS AFFILIATED REGULATED BROKER, 21 DEALER OR REGISTERED INVESTMENT ADVISER IN ACCORDANCE WITH THIS SUBDIVI- 22 SION. FOR PURPOSES OF DETERMINING IF THE PROPERTY IS PRINCIPALLY USED IN 23 QUALIFYING USES, THE USES BY THE TAXPAYER DESCRIBED IN CLAUSES (IV) AND 24 (V) OF THIS SUBPARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE USES BY THE 25 TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED 26 INVESTMENT ADVISER UNDER EITHER OR BOTH OF THOSE CLAUSES MAY BE AGGRE- 27 GATED. PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED THE CREDIT 28 PROVIDED BY CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH UNLESS (I) EIGHTY 29 PERCENT OR MORE OF THE EMPLOYEES PERFORMING THE ADMINISTRATIVE AND 30 SUPPORT FUNCTIONS RESULTING FROM OR RELATED TO THE QUALIFYING USES OF 31 SUCH EQUIPMENT ARE LOCATED IN THIS STATE, OR (II) THE AVERAGE NUMBER OF 32 EMPLOYEES THAT PERFORM THE ADMINISTRATIVE AND SUPPORT FUNCTIONS RESULT- 33 ING FROM OR RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT AND ARE 34 LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS 35 CLAIMED IS EQUAL TO OR GREATER THAN NINETY-FIVE PERCENT OF THE AVERAGE 36 NUMBER OF EMPLOYEES THAT PERFORM THESE FUNCTIONS AND ARE LOCATED IN THIS 37 STATE DURING THE THIRTY-SIX MONTHS IMMEDIATELY PRECEDING THE YEAR FOR 38 WHICH THE CREDIT IS CLAIMED, OR (III) THE NUMBER OF EMPLOYEES LOCATED IN 39 THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS CLAIMED IS 40 EQUAL TO OR GREATER THAN NINETY PERCENT OF THE NUMBER OF EMPLOYEES 41 LOCATED IN THIS STATE ON DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINE- 42 TY-EIGHT OR, IF THE TAXPAYER WAS NOT A CALENDAR YEAR TAXPAYER IN NINE- 43 TEEN HUNDRED NINETY-EIGHT, THE LAST DAY OF ITS FIRST TAXABLE YEAR ENDING 44 AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT. IF THE 45 TAXPAYER BECOMES SUBJECT TO TAX IN THIS STATE AFTER THE TAXABLE YEAR 46 BEGINNING IN NINETEEN HUNDRED NINETY-EIGHT, THEN THE TAXPAYER IS NOT 47 REQUIRED TO SATISFY THE EMPLOYMENT TEST PROVIDED IN THE PRECEDING 48 SENTENCE OF THIS SUBPARAGRAPH FOR ITS FIRST TAXABLE YEAR. FOR PURPOSES 49 OF ITEM (III) OF THIS CLAUSE, THE EMPLOYMENT TEST WILL BE BASED ON THE 50 NUMBER OF EMPLOYEES LOCATED IN THIS STATE ON THE LAST DAY OF THE FIRST 51 TAXABLE YEAR THE TAXPAYER IS SUBJECT TO TAX IN THIS STATE. IF THE USES 52 OF THE PROPERTY MUST BE AGGREGATED TO DETERMINE WHETHER THE PROPERTY IS 53 PRINCIPALLY USED IN QUALIFYING USES, THEN EITHER EACH AFFILIATE USING 54 THE PROPERTY MUST SATISFY THIS EMPLOYMENT TEST OR THIS EMPLOYMENT TEST 55 MUST BE SATISFIED THROUGH THE AGGREGATION OF THE EMPLOYEES OF THE 56 TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED A. 5394 7 1 INVESTMENT ADVISER USING THE PROPERTY. FOR PURPOSES OF THIS SUBDIVISION, 2 THE TERM "GOODS" SHALL NOT INCLUDE ELECTRICITY. FOR PURPOSES OF THIS 3 PARAGRAPH, MANUFACTURING SHALL MEAN THE PROCESS OF WORKING RAW MATERIALS 4 INTO WARES SUITABLE FOR USE OR WHICH GIVES NEW SHAPES, NEW QUALITY OR 5 NEW COMBINATION TO MATTER WHICH ALREADY HAS GONE THROUGH SOME ARTIFICIAL 6 PROCESS BY THE USE OF MACHINERY, TOOLS, APPLIANCES AND OTHER SIMILAR 7 EQUIPMENT. PROPERTY USED IN THE PRODUCTION OF GOODS SHALL INCLUDE 8 MACHINERY, EQUIPMENT OR OTHER TANGIBLE PROPERTY WHICH IS PRINCIPALLY 9 USED IN THE REPAIR AND SERVICE OF OTHER MACHINERY, EQUIPMENT OR OTHER 10 TANGIBLE PROPERTY USED PRINCIPALLY IN THE PRODUCTION OF GOODS AND SHALL 11 INCLUDE ALL FACILITIES USED IN THE PRODUCTION OPERATION, INCLUDING STOR- 12 AGE OF MATERIAL TO BE USED IN PRODUCTION AND OF THE PRODUCTS THAT ARE 13 PRODUCED. FOR PURPOSES OF THIS PARAGRAPH, THE TERMS "INDUSTRIAL WASTE 14 TREATMENT FACILITIES", "AIR POLLUTION CONTROL FACILITIES" AND "RESEARCH 15 AND DEVELOPMENT PROPERTY" SHALL HAVE THE MEANINGS ASCRIBED THERETO BY 16 CLAUSES (II) AND (III), RESPECTIVELY, OF SUBPARAGRAPH FOUR OF THIS PARA- 17 GRAPH, AND THE PROVISIONS OF SUBPARAGRAPH THREE OF THIS PARAGRAPH SHALL 18 APPLY. 19 (C) A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBDIVISION 20 WITH RESPECT TO ANY TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROP- 21 ERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH 22 IT LEASES TO ANY OTHER PERSON OR CORPORATION EXCEPT WHERE A TAXPAYER 23 LEASES PROPERTY TO AN AFFILIATED REGULATED BROKER, DEALER, OR REGISTERED 24 INVESTMENT ADVISER THAT USES SUCH PROPERTY IN ACCORDANCE WITH CLAUSE 25 (IV) OR (V) OF SUBPARAGRAPH FOUR OF PARAGRAPH (B) OF THIS SUBDIVISION. 26 FOR PURPOSES OF THE PRECEDING SENTENCE, ANY CONTRACT OR AGREEMENT TO 27 LEASE OR RENT OR FOR A LICENSE TO USE SUCH PROPERTY SHALL BE CONSIDERED 28 A LEASE. PROVIDED, HOWEVER, IN DETERMINING WHETHER A TAXPAYER SHALL BE 29 ALLOWED A CREDIT UNDER THIS SUBDIVISION WITH RESPECT TO SUCH PROPERTY, 30 ANY ELECTION MADE WITH RESPECT TO SUCH PROPERTY PURSUANT TO THE 31 PROVISIONS OF PARAGRAPH EIGHT OF SUBSECTION (F) OF SECTION ONE HUNDRED 32 SIXTY-EIGHT OF THE INTERNAL REVENUE CODE, AS SUCH PARAGRAPH WAS IN 33 EFFECT FOR AGREEMENTS ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN 34 HUNDRED EIGHTY-FOUR, SHALL BE DISREGARDED. 35 (D) IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY 36 TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS 37 MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED 38 FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. ANY REFUND PAID PURSUANT 39 TO THIS PARAGRAPH SHALL BE DEEMED TO BE A REFUND OF AN OVERPAYMENT OF 40 TAX AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS CHAPTER, 41 PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON. 42 47. DISCOVERY WAGE TAX CREDIT. (A) A TAXPAYER SHALL BE ALLOWED A CRED- 43 IT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY 44 THIS ARTICLE, WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO SECTION 45 NINE HUNDRED SEVENTY-TWO OF THE GENERAL MUNICIPAL LAW. THE AMOUNT OF 46 SUCH CREDIT SHALL BE AS PRESCRIBED IN PARAGRAPH (C) OF THIS SUBDIVISION. 47 (B) "DISCOVERY WAGES" MEANS WAGES PAID BY THE TAXPAYER FOR FULL-TIME 48 EMPLOYMENT DURING A TAXABLE YEAR, PROVIDED THAT THOSE WAGES ARE PAID BY 49 A CERTIFIED BUSINESS AS DEFINED BY THE COMMISSIONER OF ECONOMIC DEVELOP- 50 MENT AS REQUIRED IN HIS OR HER RESPONSIBILITIES. 51 (C) THE CREDIT PROVIDED IN THIS SUBDIVISION SHALL BE EQUAL TO THE 52 PRODUCT OF THE GROSS WAGES PAID AND SIX AND EIGHTY-FIVE HUNDREDTHS 53 PERCENT FOR EACH NET NEW JOB CREATED DURING THE TAXABLE YEAR. 54 (D) "NET NEW JOB" SHALL BE DEFINED AS EACH JOB THAT EXCEEDS THE AVER- 55 AGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN THE 56 PREVIOUS TAXABLE YEAR. A. 5394 8 1 (E) IF THE AMOUNT OF THIS CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED 2 UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S 3 TAX FOR SUCH YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT OR 4 CARRYOVERS OF SUCH CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED FROM THE 5 TAX OTHERWISE DUE BY REASON OF PARAGRAPH (C) OF THIS SUBDIVISION, MAY BE 6 CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE 7 TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. 8 S 5. Section 606 of the tax law is amended by adding two new 9 subsections (j-2) and (j-3) to read as follows: 10 (J-2) DISCOVERY INVESTMENT CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A 11 CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED 12 BY THIS ARTICLE WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO 13 SECTION NINE HUNDRED SEVENTY-TWO OF THE GENERAL MUNICIPAL LAW. THE 14 AMOUNT OF SUCH CREDIT SHALL BE TWENTY PERCENT OF THE COST OR OTHER BASIS 15 FOR FEDERAL INCOME TAX PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER 16 TANGIBLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF 17 BUILDINGS, DESCRIBED IN PARAGRAPH TWO OF THIS SUBSECTION, BUT ONLY IF 18 THE ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION OF SUCH PROP- 19 ERTY OCCURRED OR WAS COMMENCED ON OR AFTER THE DATE OF SUCH DESIGNATION 20 AND PRIOR TO THE EXPIRATION THEREOF. PROVIDED, HOWEVER, THAT IN THE CASE 21 OF AN ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION WHICH WAS 22 COMMENCED DURING SUCH PERIOD AND CONTINUED OR COMPLETED SUBSEQUENTLY, 23 THE CREDIT SHALL BE TWENTY PERCENT OF THE PORTION OF THE COST OR OTHER 24 BASIS FOR FEDERAL INCOME TAX PURPOSES ATTRIBUTABLE TO SUCH PERIOD, WHICH 25 PORTION SHALL BE ASCERTAINED BY MULTIPLYING SUCH COST OR BASIS BY A 26 FRACTION THE NUMERATOR OF WHICH SHALL BE THE EXPENDITURES PAID OR 27 INCURRED DURING SUCH PERIOD FOR SUCH PURPOSES AND THE DENOMINATOR OF 28 WHICH SHALL BE THE TOTAL OF ALL EXPENDITURES PAID OR INCURRED FOR SUCH 29 ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION. 30 (2) A CREDIT SHALL BE ALLOWED UNDER THIS SUBSECTION WITH RESPECT TO 31 TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY, INCLUDING BUILD- 32 INGS AND STRUCTURAL COMPONENTS OF BUILDINGS WHICH: (A) ARE DEPRECIABLE 33 PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE 34 CODE, (B) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, (C) ARE ACQUIRED BY 35 PURCHASE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE 36 INTERNAL REVENUE CODE, AND (D) ARE (I) PRINCIPALLY USED BY THE TAXPAYER 37 IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROCESSING, ASSEMBLING, 38 REFINING, MINING, EXTRACTING, FARMING, AGRICULTURE, HORTICULTURE, FLORI- 39 CULTURE, VITICULTURE OR COMMERCIAL FISHING, (II) INDUSTRIAL WASTE TREAT- 40 MENT FACILITIES OR AIR POLLUTION CONTROL FACILITIES USED IN THE TAXPAY- 41 ER'S TRADE OR BUSINESS, (III) RESEARCH AND DEVELOPMENT PROPERTY, (IV) 42 PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR BUSI- 43 NESS AS A BROKER OR DEALER IN CONNECTION WITH THE PURCHASE OR SALE 44 (WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO, 45 ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF STOCKS, 46 BONDS OR OTHER SECURITIES AS DEFINED IN SECTION FOUR HUNDRED 47 SEVENTY-FIVE (C)(2) OF THE INTERNAL REVENUE CODE, OR OF COMMODITIES AS 48 DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (E) OF THE INTERNAL REVENUE 49 CODE, OR (V) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S 50 TRADE OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES FOR REGU- 51 LATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE 52 OF THE INTERNAL REVENUE CODE, OR LENDING, LOAN ARRANGEMENT OR LOAN ORIG- 53 INATION SERVICES TO CUSTOMERS 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 SECURITIES 56 AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE(C)(2) OF THE INTERNAL A. 5394 9 1 REVENUE CODE. FOR PURPOSES OF CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH, 2 PROPERTY PURCHASED BY A TAXPAYER AFFILIATED WITH A REGULATED BROKER, 3 DEALER OR REGISTERED INVESTMENT ADVISER IS ALLOWED A CREDIT UNDER THIS 4 SUBSECTION IF THE PROPERTY IS USED BY ITS AFFILIATED REGULATED BROKER, 5 DEALER OR REGISTERED INVESTMENT ADVISER IN ACCORDANCE WITH THIS 6 SUBSECTION. FOR PURPOSES OF DETERMINING IF THE PROPERTY IS PRINCIPALLY 7 USED IN QUALIFYING USES, THE USES BY THE TAXPAYER DESCRIBED IN CLAUSES 8 (IV) AND (V) OF THIS SUBPARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE 9 USES BY THE TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND 10 REGISTERED INVESTMENT ADVISER UNDER EITHER OR BOTH OF THOSE CLAUSES MAY 11 BE AGGREGATED. PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED THE 12 CREDIT PROVIDED BY CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH UNLESS (I) 13 EIGHTY PERCENT OR MORE OF THE EMPLOYEES PERFORMING THE ADMINISTRATIVE 14 AND SUPPORT FUNCTIONS RESULTING FROM OR RELATED TO THE QUALIFYING USES 15 OF SUCH EQUIPMENT ARE LOCATED IN THIS STATE, OR (II) THE AVERAGE NUMBER 16 OF EMPLOYEES THAT PERFORM THE ADMINISTRATIVE AND SUPPORT FUNCTIONS 17 RESULTING FROM OR RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT AND 18 ARE LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT 19 IS CLAIMED IS EQUAL TO OR GREATER THAN NINETY-FIVE PERCENT OF THE AVER- 20 AGE NUMBER OF EMPLOYEES THAT PERFORM THESE FUNCTIONS AND ARE LOCATED IN 21 THIS STATE DURING THE THIRTY-SIX MONTHS IMMEDIATELY PRECEDING THE YEAR 22 FOR WHICH THE CREDIT IS CLAIMED, OR (III) THE NUMBER OF EMPLOYEES 23 LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS 24 CLAIMED IS EQUAL TO OR GREATER THAN NINETY PERCENT OF THE NUMBER OF 25 EMPLOYEES LOCATED IN THIS STATE ON DECEMBER THIRTY-FIRST, NINETEEN 26 HUNDRED NINETY-EIGHT OR, IF THE TAXPAYER WAS NOT A CALENDAR YEAR TAXPAY- 27 ER IN NINETEEN HUNDRED NINETY-EIGHT, THE LAST DAY OF ITS FIRST TAXABLE 28 YEAR ENDING AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT. 29 IF THE TAXPAYER BECOMES SUBJECT TO TAX IN THIS STATE AFTER THE TAXABLE 30 YEAR BEGINNING IN NINETEEN HUNDRED NINETY-EIGHT, THEN THE TAXPAYER IS 31 NOT REQUIRED TO SATISFY THE EMPLOYMENT TEST PROVIDED IN THE PRECEDING 32 SENTENCE OF THIS SUBPARAGRAPH FOR ITS FIRST TAXABLE YEAR. FOR PURPOSES 33 OF ITEM (III) OF THIS CLAUSE, THE EMPLOYMENT TEST WILL BE BASED ON THE 34 NUMBER OF EMPLOYEES LOCATED IN THIS STATE ON THE LAST DAY OF THE FIRST 35 TAXABLE YEAR THE TAXPAYER IS SUBJECT TO TAX IN THIS STATE. IF THE USES 36 OF THE PROPERTY MUST BE AGGREGATED TO DETERMINE WHETHER THE PROPERTY IS 37 PRINCIPALLY USED IN QUALIFYING USES, THEN EITHER EACH AFFILIATE USING 38 THE PROPERTY MUST SATISFY THIS EMPLOYMENT TEST OR THIS EMPLOYMENT TEST 39 MUST BE SATISFIED THROUGH THE AGGREGATION OF THE EMPLOYEES OF THE 40 TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED 41 INVESTMENT ADVISOR USING THE PROPERTY. FOR PURPOSES OF THIS SUBSECTION, 42 THE TERM "GOODS" SHALL NOT INCLUDE ELECTRICITY. FOR PURPOSES OF THIS 43 PARAGRAPH, MANUFACTURING SHALL MEAN THE PROCESS OF WORKING RAW MATERIALS 44 INTO WARES SUITABLE FOR USE OR WHICH GIVES NEW SHAPES, NEW QUALITY OR 45 NEW COMBINATION TO MATTER WHICH ALREADY HAS GONE THROUGH SOME ARTIFICIAL 46 PROCESS BY THE USE OF MACHINERY, TOOLS, APPLIANCES AND OTHER SIMILAR 47 EQUIPMENT. PROPERTY USED IN THE PRODUCTION OF GOODS SHALL INCLUDE 48 MACHINERY, EQUIPMENT OR OTHER TANGIBLE PROPERTY WHICH IS PRINCIPALLY 49 USED IN THE REPAIR AND SERVICE OF OTHER MACHINERY, EQUIPMENT OR OTHER 50 TANGIBLE PROPERTY USED PRINCIPALLY IN THE PRODUCTION OF GOODS AND SHALL 51 INCLUDE ALL FACILITIES USED IN THE PRODUCTION OPERATION, INCLUDING STOR- 52 AGE OF MATERIAL TO BE USED IN PRODUCTION AND OF THE PRODUCTS THAT ARE 53 PRODUCED. FOR PURPOSES OF THIS PARAGRAPH, THE TERMS "INDUSTRIAL WASTE 54 TREATMENT FACILITIES", "AIR POLLUTION CONTROL FACILITIES" AND "RESEARCH 55 AND DEVELOPMENT PROPERTY" SHALL HAVE THE MEANINGS ASCRIBED THERETO BY A. 5394 10 1 CLAUSES (II) AND (III), RESPECTIVELY, OF SUBPARAGRAPH (D) OF THIS PARA- 2 GRAPH, AND THE PROVISIONS OF SUBPARAGRAPH (C) OF THIS PARAGRAPH. 3 (3) A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBSECTION 4 WITH RESPECT TO ANY TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROP- 5 ERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH 6 IT LEASES TO ANY OTHER PERSON OR CORPORATION EXCEPT WHERE A TAXPAYER 7 LEASES PROPERTY TO AN AFFILIATED REGULATED BROKER, DEALER, OR REGISTERED 8 INVESTMENT ADVISER THAT USES SUCH PROPERTY IN ACCORDANCE WITH CLAUSE 9 (IV) OR (V) OF SUBPARAGRAPH (D) OF PARAGRAPH TWO OF THIS SUBSECTION. FOR 10 PURPOSES OF THE PRECEDING SENTENCE, ANY CONTRACT OR AGREEMENT TO LEASE 11 OR RENT OR FOR A LICENSE TO USE SUCH PROPERTY SHALL BE CONSIDERED A 12 LEASE. PROVIDED, HOWEVER, IN DETERMINING WHETHER A TAXPAYER SHALL BE 13 ALLOWED A CREDIT UNDER THIS SUBSECTION WITH RESPECT TO SUCH PROPERTY, 14 ANY ELECTION MADE WITH RESPECT TO SUCH PROPERTY PURSUANT TO THE 15 PROVISIONS OF PARAGRAPH EIGHT OF SUBSECTION (F) OF SECTION ONE HUNDRED 16 SIXTY-EIGHT OF THE INTERNAL REVENUE CODE, AS SUCH PARAGRAPH WAS IN 17 EFFECT FOR AGREEMENTS ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN 18 HUNDRED EIGHTY-FOUR, SHALL BE DISREGARDED. 19 (4) IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY 20 TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS 21 MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED 22 FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. ANY REFUND PAID PURSU- 23 ANT TO THIS PARAGRAPH SHALL BE DEEMED TO BE A REFUND OF AN OVERPAYMENT 24 OF TAX AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS CHAPTER, 25 PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON. 26 (J-3) DISCOVERY WAGE TAX CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A 27 CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED 28 BY THIS ARTICLE, WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO 29 SECTION NINE HUNDRED SEVENTY-TWO OF THE GENERAL MUNICIPAL LAW. THE 30 AMOUNT OF SUCH CREDIT SHALL BE AS PRESCRIBED IN PARAGRAPH THREE OF THIS 31 SUBSECTION. 32 (2) "DISCOVERY WAGES" MEANS WAGES PAID BY THE TAXPAYER FOR FULL-TIME 33 EMPLOYMENT DURING A TAXABLE YEAR, PROVIDED THAT THOSE WAGES ARE PAID BY 34 A CERTIFIED BUSINESS AS DEFINED BY THE COMMISSIONER OF ECONOMIC DEVELOP- 35 MENT AS REQUIRED IN HIS OR HER RESPONSIBILITIES. 36 (3) THE CREDIT PROVIDED IN THIS SUBSECTION SHALL BE EQUAL TO THE PROD- 37 UCT OF THE GROSS WAGES PAID AND SIX AND EIGHTY-FIVE HUNDREDTHS PERCENT 38 FOR EACH NET NEW JOB CREATED DURING THE TAXABLE YEAR. 39 (4) "NET NEW JOB" SHALL BE DEFINED AS EACH JOB THAT EXCEEDS THE AVER- 40 AGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN THE 41 PREVIOUS TAXABLE YEAR. 42 (5) IF THE AMOUNT OF THIS CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED 43 UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S 44 TAX FOR SUCH YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT OR 45 CARRYOVERS OF SUCH CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED FROM THE 46 TAX OTHERWISE DUE BY REASON OF PARAGRAPH THREE OF THIS SUBSECTION, MAY 47 BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM 48 THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. 49 S 6. Section 1456 of the tax law is amended by adding two new 50 subsections (z) and (aa) to read as follows: 51 (Z) DISCOVERY INVESTMENT CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A 52 CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED 53 BY THIS ARTICLE WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO 54 SECTION NINE HUNDRED SEVENTY-TWO OF THE GENERAL MUNICIPAL LAW. THE 55 AMOUNT OF SUCH CREDIT SHALL BE TWENTY PERCENT OF THE COST OR OTHER BASIS 56 FOR FEDERAL INCOME TAX PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER A. 5394 11 1 TANGIBLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF 2 BUILDINGS, DESCRIBED IN PARAGRAPH TWO OF THIS SUBSECTION, BUT ONLY IF 3 THE ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION OF SUCH PROP- 4 ERTY OCCURRED OR WAS COMMENCED ON OR AFTER THE DATE OF SUCH DESIGNATION 5 AND PRIOR TO THE EXPIRATION THEREOF. PROVIDED, HOWEVER, THAT IN THE CASE 6 OF AN ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION WHICH WAS 7 COMMENCED DURING SUCH PERIOD AND CONTINUED OR COMPLETED SUBSEQUENTLY, 8 THE CREDIT SHALL BE TWENTY PERCENT OF THE PORTION OF THE COST OR OTHER 9 BASIS FOR FEDERAL INCOME TAX PURPOSES ATTRIBUTABLE TO SUCH PERIOD, WHICH 10 PORTION SHALL BE ASCERTAINED BY MULTIPLYING SUCH COST OR BASIS BY A 11 FRACTION THE NUMERATOR OF WHICH SHALL BE THE EXPENDITURES PAID OR 12 INCURRED DURING SUCH PERIOD FOR SUCH PURPOSES AND THE DENOMINATOR OF 13 WHICH SHALL BE THE TOTAL OF ALL EXPENDITURES PAID OR INCURRED FOR SUCH 14 ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION. 15 (2) A CREDIT SHALL BE ALLOWED UNDER THIS SUBSECTION WITH RESPECT TO 16 TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY, INCLUDING BUILD- 17 INGS AND STRUCTURAL COMPONENTS OF BUILDINGS WHICH: (A) ARE DEPRECIABLE 18 PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE 19 CODE, (B) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, (C) ARE ACQUIRED BY 20 PURCHASE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE 21 INTERNAL REVENUE CODE, AND (D) ARE (I) PRINCIPALLY USED BY THE TAXPAYER 22 IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROCESSING, ASSEMBLING, 23 REFINING, MINING, EXTRACTING, FARMING, AGRICULTURE, HORTICULTURE, FLORI- 24 CULTURE, VITICULTURE OR COMMERCIAL FISHING, (II) INDUSTRIAL WASTE TREAT- 25 MENT FACILITIES OR AIR POLLUTION CONTROL FACILITIES USED IN THE TAXPAY- 26 ER'S TRADE OR BUSINESS, (III) RESEARCH AND DEVELOPMENT PROPERTY, (IV) 27 PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR BUSI- 28 NESS AS A BROKER OR DEALER IN CONNECTION WITH THE PURCHASE OR SALE 29 (WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO, 30 ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF STOCKS, 31 BONDS OR OTHER SECURITIES AS DEFINED IN SECTION FOUR HUNDRED 32 SEVENTY-FIVE (C)(2) OF THE INTERNAL REVENUE CODE, OR OF COMMODITIES AS 33 DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (E) OF THE INTERNAL REVENUE 34 CODE, OR (V) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S 35 TRADE OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES FOR A REGU- 36 LATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE 37 OF THE INTERNAL REVENUE CODE, OR LENDING, LOAN ARRANGEMENT OR LOAN ORIG- 38 INATION SERVICES TO CUSTOMERS 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 SECURITIES 41 AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (C)(2) OF THE INTERNAL 42 REVENUE CODE. FOR PURPOSES OF CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH, 43 PROPERTY PURCHASED BY A TAXPAYER AFFILIATED WITH A REGULATED BROKER, 44 DEALER OR REGISTERED INVESTMENT ADVISER IS ALLOWED A CREDIT UNDER THIS 45 SUBSECTION IF THE PROPERTY IS USED BY ITS AFFILIATED REGULATED BROKER, 46 DEALER OR REGISTERED INVESTMENT ADVISER IN ACCORDANCE WITH THIS 47 SUBSECTION. FOR PURPOSES OF DETERMINING IF THE PROPERTY IS PRINCIPALLY 48 USED IN QUALIFYING USES, THE USES BY THE TAXPAYER DESCRIBED IN CLAUSES 49 (IV) AND (V) OF THIS SUBPARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE 50 USES BY THE TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND 51 REGISTERED INVESTMENT ADVISER UNDER EITHER OR BOTH OF THOSE CLAUSES MAY 52 BE AGGREGATED. PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED THE 53 CREDIT PROVIDED BY CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH UNLESS (I) 54 EIGHTY PERCENT OR MORE OF THE EMPLOYEES PERFORMING THE ADMINISTRATIVE 55 AND SUPPORT FUNCTIONS RESULTING FROM OR RELATED TO THE QUALIFYING USES 56 OF SUCH EQUIPMENT ARE LOCATED IN THIS STATE, OR (II) THE AVERAGE NUMBER A. 5394 12 1 OF EMPLOYEES THAT PERFORM THE ADMINISTRATIVE AND SUPPORT FUNCTIONS 2 RESULTING FROM OR RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT AND 3 ARE LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT 4 IS CLAIMED IS EQUAL TO OR GREATER THAN NINETY-FIVE PERCENT OF THE AVER- 5 AGE NUMBER OF EMPLOYEES THAT PERFORM THESE FUNCTIONS AND ARE LOCATED IN 6 THIS STATE DURING THE THIRTY-SIX MONTHS IMMEDIATELY PRECEDING THE YEAR 7 FOR WHICH THE CREDIT IS CLAIMED, OR (III) THE NUMBER OF EMPLOYEES 8 LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS 9 CLAIMED IS EQUAL TO OR GREATER THAN NINETY PERCENT OF THE NUMBER OF 10 EMPLOYEES LOCATED IN THIS STATE ON DECEMBER THIRTY-FIRST, NINETEEN 11 HUNDRED NINETY-EIGHT OR, IF THE TAXPAYER WAS NOT A CALENDAR YEAR TAXPAY- 12 ER IN NINETEEN HUNDRED NINETY-EIGHT, THE LAST DAY OF ITS FIRST TAXABLE 13 YEAR ENDING AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT. 14 IF THE TAXPAYER BECOMES SUBJECT TO TAX IN THIS STATE AFTER THE TAXABLE 15 YEAR BEGINNING IN NINETEEN HUNDRED NINETY-EIGHT, THEN THE TAXPAYER IS 16 NOT REQUIRED TO SATISFY THE EMPLOYMENT TEST PROVIDED IN THE PRECEDING 17 SENTENCE OF THIS SUBPARAGRAPH FOR ITS FIRST TAXABLE YEAR. FOR PURPOSES 18 OF ITEM (III) OF THIS CLAUSE, THE EMPLOYMENT TEST WILL BE BASED ON THE 19 NUMBER OF EMPLOYEES LOCATED IN THIS STATE ON THE LAST DAY OF THE FIRST 20 TAXABLE YEAR THE TAXPAYER IS SUBJECT TO TAX IN THIS STATE. IF THE USES 21 OF THE PROPERTY MUST BE AGGREGATED TO DETERMINE WHETHER THE PROPERTY IS 22 PRINCIPALLY USED IN QUALIFYING USES, THEN EITHER EACH AFFILIATE USING 23 THE PROPERTY MUST SATISFY THIS EMPLOYMENT TEST OR THIS EMPLOYMENT TEST 24 MUST BE SATISFIED THROUGH THE AGGREGATION OF THE EMPLOYEES OF THE 25 TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED 26 INVESTMENT ADVISER USING THE PROPERTY. FOR PURPOSES OF THIS SUBSECTION, 27 THE TERM "GOODS" SHALL NOT INCLUDE ELECTRICITY. FOR PURPOSES OF THIS 28 PARAGRAPH, MANUFACTURING SHALL MEAN THE PROCESS OF WORKING RAW MATERIALS 29 INTO WARES SUITABLE FOR USE OR WHICH GIVES NEW SHAPES, NEW QUALITY OR 30 NEW COMBINATION TO MATTER WHICH ALREADY HAS GONE THROUGH SOME ARTIFICIAL 31 PROCESS BY THE USE OF MACHINERY, TOOLS, APPLIANCES AND OTHER SIMILAR 32 EQUIPMENT. PROPERTY USED IN THE PRODUCTION OF GOODS SHALL INCLUDE 33 MACHINERY, EQUIPMENT OR OTHER TANGIBLE PROPERTY WHICH IS PRINCIPALLY 34 USED IN THE REPAIR AND SERVICE OF OTHER MACHINERY, EQUIPMENT OR OTHER 35 TANGIBLE PROPERTY USED PRINCIPALLY IN THE PRODUCTION OF GOODS AND SHALL 36 INCLUDE ALL FACILITIES USED IN THE PRODUCTION OPERATION, INCLUDING STOR- 37 AGE OF MATERIAL TO BE USED IN PRODUCTION AND OF THE PRODUCTS THAT ARE 38 PRODUCED. FOR PURPOSES OF THIS PARAGRAPH, THE TERMS "INDUSTRIAL WASTE 39 TREATMENT FACILITIES", AND "AIR POLLUTION CONTROL FACILITIES" AND 40 "RESEARCH AND DEVELOPMENT PROPERTY" SHALL HAVE THE MEANINGS ASCRIBED 41 THERETO BY CLAUSES (II) AND (III), RESPECTIVELY, OF SUBPARAGRAPH (D) OF 42 THIS PARAGRAPH, AND THE PROVISIONS OF SUBPARAGRAPH (C) OF THIS PARAGRAPH 43 SHALL APPLY. 44 (3) A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBSECTION 45 WITH RESPECT TO ANY TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROP- 46 ERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH 47 IT LEASES TO ANY OTHER PERSON OR CORPORATION EXCEPT WHERE A TAXPAYER 48 LEASES PROPERTY TO AN AFFILIATED REGULATED BROKER, DEALER, OR REGISTERED 49 INVESTMENT ADVISER THAT USES SUCH PROPERTY IN ACCORDANCE WITH CLAUSE 50 (IV) OR (V) OF SUBPARAGRAPH (D) OF PARAGRAPH TWO OF THIS SUBSECTION. FOR 51 PURPOSES OF THE PRECEDING SENTENCE, ANY CONTRACT OR AGREEMENT TO LEASE 52 OR RENT OR FOR A LICENSE TO USE SUCH PROPERTY SHALL BE CONSIDERED A 53 LEASE. PROVIDED, HOWEVER, IN DETERMINING WHETHER A TAXPAYER SHALL BE 54 ALLOWED A CREDIT UNDER THIS SUBSECTION WITH RESPECT TO SUCH PROPERTY, 55 ANY ELECTION MADE WITH RESPECT TO SUCH PROPERTY PURSUANT TO THE 56 PROVISIONS OF PARAGRAPH EIGHT OF SUBSECTION (F) OF SECTION ONE HUNDRED A. 5394 13 1 SIXTY-EIGHT OF THE INTERNAL REVENUE CODE, AS SUCH PARAGRAPH WAS IN 2 EFFECT FOR AGREEMENTS ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN 3 HUNDRED EIGHTY-FOUR, SHALL BE DISREGARDED. 4 (4) IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY 5 TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS 6 MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED 7 FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. ANY REFUND PAID PURSUANT 8 TO THIS PARAGRAPH SHALL BE DEEMED TO BE A REFUND OF AN OVERPAYMENT OF 9 TAX AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS CHAPTER, 10 PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON. 11 (AA) DISCOVERY WAGE TAX CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A 12 CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED 13 BY THIS ARTICLE, WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO 14 SECTION NINE HUNDRED SEVENTY-TWO OF THE GENERAL MUNICIPAL LAW. THE 15 AMOUNT OF SUCH CREDIT SHALL BE AS PRESCRIBED IN PARAGRAPH THREE OF THIS 16 SUBSECTION. 17 (2) "DISCOVERY WAGES" MEANS WAGES PAID BY THE TAXPAYER FOR FULL-TIME 18 EMPLOYMENT DURING A TAXABLE YEAR, PROVIDED THAT THOSE WAGES ARE PAID BY 19 A CERTIFIED BUSINESS AS DEFINED BY THE COMMISSIONER OF ECONOMIC DEVELOP- 20 MENT AS REQUIRED IN HIS OR HER RESPONSIBILITIES. 21 (3) THE CREDIT PROVIDED IN THIS SUBSECTION SHALL BE EQUAL TO THE PROD- 22 UCT OF THE GROSS WAGES PAID AND SIX AND EIGHTY-FIVE HUNDREDTHS PERCENT 23 FOR EACH NET NEW JOB CREATED DURING THE TAXABLE YEAR. 24 (4) "NET NEW JOB" SHALL BE DEFINED AS EACH JOB THAT EXCEEDS THE AVER- 25 AGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN THE 26 PREVIOUS TAXABLE YEAR. 27 (5) IF THE AMOUNT OF THIS CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED 28 UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S 29 TAX FOR SUCH YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT OR 30 CARRYOVERS OF SUCH CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED FROM THE 31 TAX OTHERWISE DUE BY REASON OF PARAGRAPH THREE OF THIS SUBSECTION, MAY 32 BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM 33 THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. 34 S 7. Section 1511 of the tax law is amended by adding two new subdivi- 35 sions (cc) and (dd) to read as follows: 36 (CC) DISCOVERY INVESTMENT CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A 37 CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED 38 BY THIS ARTICLE WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO 39 SECTION NINE HUNDRED SEVENTY-TWO OF THE GENERAL MUNICIPAL LAW. THE 40 AMOUNT OF SUCH CREDIT SHALL BE TWENTY PERCENT OF THE COST OR OTHER BASIS 41 FOR FEDERAL INCOME TAX PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER 42 TANGIBLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF 43 BUILDINGS, DESCRIBED IN PARAGRAPH TWO OF THIS SUBDIVISION, BUT ONLY IF 44 THE ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION OF SUCH PROP- 45 ERTY OCCURRED OR WAS COMMENCED ON OR AFTER THE DATE OF SUCH DESIGNATION 46 AND PRIOR TO THE EXPIRATION THEREOF. PROVIDED, HOWEVER, THAT IN THE CASE 47 OF AN ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION WHICH WAS 48 COMMENCED DURING SUCH PERIOD AND CONTINUED OR COMPLETED SUBSEQUENTLY, 49 THE CREDIT SHALL BE TWENTY PERCENT OF THE PORTION OF THE COST OR OTHER 50 BASIS FOR FEDERAL INCOME TAX PURPOSES ATTRIBUTABLE TO SUCH PERIOD, WHICH 51 PORTION SHALL BE ASCERTAINED BY MULTIPLYING SUCH COST OR BASIS BY A 52 FRACTION THE NUMERATOR OF WHICH SHALL BE THE EXPENDITURES PAID OR 53 INCURRED DURING SUCH PERIOD FOR SUCH PURPOSES AND THE DENOMINATOR OF 54 WHICH SHALL BE THE TOTAL OF ALL EXPENDITURES PAID OR INCURRED FOR SUCH 55 ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION. A. 5394 14 1 (2) A CREDIT SHALL BE ALLOWED UNDER THIS SUBDIVISION WITH RESPECT TO 2 TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY, INCLUDING BUILD- 3 INGS AND STRUCTURAL COMPONENTS OF BUILDINGS WHICH: (A) ARE DEPRECIABLE 4 PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE 5 CODE, (B) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, (C) ARE ACQUIRED BY 6 PURCHASE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE 7 INTERNAL REVENUE CODE, AND (D) ARE (I) PRINCIPALLY USED BY THE TAXPAYER 8 IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROCESSING, ASSEMBLING, 9 REFINING, MINING, EXTRACTING, FARMING, AGRICULTURE, HORTICULTURE, FLORI- 10 CULTURE, VITICULTURE OR COMMERCIAL FISHING, (II) INDUSTRIAL WASTE TREAT- 11 MENT FACILITIES OR AIR POLLUTION CONTROL FACILITIES USED IN THE TAXPAY- 12 ER'S TRADE OR BUSINESS, (III) RESEARCH AND DEVELOPMENT PROPERTY, (IV) 13 PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR BUSI- 14 NESS AS A BROKER OR DEALER IN CONNECTION WITH THE PURCHASE OR SALE 15 (WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO, 16 ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF STOCKS, 17 BONDS OR OTHER SECURITIES AS DEFINED IN SECTION FOUR HUNDRED 18 SEVENTY-FIVE(C)(2) OF THE INTERNAL REVENUE CODE, OR OF COMMODITIES AS 19 DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (E) OF THE INTERNAL REVENUE 20 CODE, OR (V) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S 21 TRADE OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES FOR A REGU- 22 LATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE 23 OF THE INTERNAL REVENUE CODE, OR LENDING, LOAN ARRANGEMENT OR LOAN ORIG- 24 INATION SERVICES TO CUSTOMERS IN CONNECTION WITH THE PURCHASE OR SALE 25 (WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO, 26 ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF SECURITIES 27 AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE(C)(2) OF THE INTERNAL 28 REVENUE CODE. FOR PURPOSES OF CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH, 29 PROPERTY PURCHASED BY A TAXPAYER AFFILIATED WITH A REGULATED BROKER, 30 DEALER OR REGISTERED INVESTMENT ADVISER IS ALLOWED A CREDIT UNDER THIS 31 SUBDIVISION IF THE PROPERTY IS USED BY ITS AFFILIATED REGULATED BROKER, 32 DEALER OR REGISTERED INVESTMENT ADVISER IN ACCORDANCE WITH THIS SUBDIVI- 33 SION. FOR PURPOSES OF DETERMINING IF THE PROPERTY IS PRINCIPALLY USED IN 34 QUALIFYING USES, THE USES BY THE TAXPAYER DESCRIBED IN CLAUSES (IV) AND 35 (V) OF THIS SUBPARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE USES BY THE 36 TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED 37 INVESTMENT ADVISER UNDER EITHER OR BOTH OF THOSE CLAUSES MAY BE AGGRE- 38 GATED. PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED THE CREDIT 39 PROVIDED BY CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH UNLESS (I) EIGHTY 40 PERCENT OR MORE OF THE EMPLOYEES PERFORMING THE ADMINISTRATIVE AND 41 SUPPORT FUNCTIONS RESULTING FROM OR RELATED TO THE QUALIFYING USES OF 42 SUCH EQUIPMENT ARE LOCATED IN THIS STATE, OR (II) THE AVERAGE NUMBER OF 43 EMPLOYEES THAT PERFORM THE ADMINISTRATIVE AND SUPPORT FUNCTIONS RESULT- 44 ING FROM OR RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT AND ARE 45 LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS 46 CLAIMED IS EQUAL TO OR GREATER THAN NINETY-FIVE PERCENT OF THE AVERAGE 47 NUMBER OF EMPLOYEES THAT PERFORM THESE FUNCTIONS AND ARE LOCATED IN THIS 48 STATE DURING THE THIRTY-SIX MONTHS IMMEDIATELY PRECEDING THE YEAR FOR 49 WHICH THE CREDIT IS CLAIMED, OR (III) THE NUMBER OF EMPLOYEES LOCATED IN 50 THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS CLAIMED IS 51 EQUAL TO OR GREATER THAN NINETY PERCENT OF THE NUMBER OF EMPLOYEES 52 LOCATED IN THIS STATE ON DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINE- 53 TY-EIGHT OR, IF THE TAXPAYER WAS NOT A CALENDAR YEAR TAXPAYER IN NINE- 54 TEEN HUNDRED NINETY-EIGHT, THE LAST DAY OF ITS FIRST TAXABLE YEAR ENDING 55 AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT. IF THE 56 TAXPAYER BECOMES SUBJECT TO TAX IN THIS STATE AFTER THE TAXABLE YEAR A. 5394 15 1 BEGINNING IN NINETEEN HUNDRED NINETY-EIGHT, THEN THE TAXPAYER IS NOT 2 REQUIRED TO SATISFY THE EMPLOYMENT TEST PROVIDED IN THE PRECEDING 3 SENTENCE OF THIS SUBPARAGRAPH FOR ITS FIRST TAXABLE YEAR. FOR PURPOSES 4 OF ITEM (III) OF THIS CLAUSE, THE EMPLOYMENT TEST WILL BE BASED ON THE 5 NUMBER OF EMPLOYEES LOCATED IN THIS STATE ON THE LAST DAY OF THE FIRST 6 TAXABLE YEAR THE TAXPAYER IS SUBJECT TO TAX IN THIS STATE. IF THE USES 7 OF THE PROPERTY MUST BE AGGREGATED TO DETERMINE WHETHER THE PROPERTY IS 8 PRINCIPALLY USED IN QUALIFYING USES, THEN EITHER EACH AFFILIATE USING 9 THE PROPERTY MUST SATISFY THIS EMPLOYMENT TEST OR THIS EMPLOYMENT TEST 10 MUST BE SATISFIED THROUGH THE AGGREGATION OF THE EMPLOYEES OF THE 11 TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED 12 INVESTMENT ADVISER USING THE PROPERTY. FOR PURPOSES OF THIS SUBDIVISION, 13 THE TERM "GOODS" SHALL NOT INCLUDE ELECTRICITY. FOR PURPOSES OF THIS 14 PARAGRAPH, MANUFACTURING SHALL MEAN THE PROCESS OF WORKING RAW MATERIALS 15 INTO WARES SUITABLE FOR USE OR WHICH GIVES NEW SHAPES, NEW QUALITY OR 16 NEW COMBINATION TO MATTER WHICH ALREADY HAS GONE THROUGH SOME ARTIFICIAL 17 PROCESS BY THE USE OF MACHINERY, TOOLS, APPLIANCES AND OTHER SIMILAR 18 EQUIPMENT. PROPERTY USED IN THE PRODUCTION OF GOODS SHALL INCLUDE 19 MACHINERY, EQUIPMENT OR OTHER TANGIBLE PROPERTY WHICH IS PRINCIPALLY 20 USED IN THE REPAIR AND SERVICE OF OTHER MACHINERY, EQUIPMENT OR OTHER 21 TANGIBLE PROPERTY USED PRINCIPALLY IN THE PRODUCTION OF GOODS AND SHALL 22 INCLUDE ALL FACILITIES USED IN THE PRODUCTION OPERATION, INCLUDING STOR- 23 AGE OF MATERIAL TO BE USED IN PRODUCTION AND OF THE PRODUCTS THAT ARE 24 PRODUCED. FOR PURPOSES OF THIS PARAGRAPH, THE TERMS "INDUSTRIAL WASTE 25 TREATMENT FACILITIES", "AIR POLLUTION CONTROL FACILITIES" AND "RESEARCH 26 AND DEVELOPMENT PROPERTY" SHALL HAVE THE MEANINGS ASCRIBED THERETO BY 27 CLAUSES (II) AND (III), RESPECTIVELY, OF SUBPARAGRAPH (D) OF THIS PARA- 28 GRAPH, AND THE PROVISIONS OF SUBPARAGRAPH (C) OF THIS PARAGRAPH SHALL 29 APPLY. 30 (3) A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBDIVISION 31 WITH RESPECT TO ANY TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROP- 32 ERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH 33 IT LEASES TO ANY OTHER PERSON OR CORPORATION EXCEPT WHERE A TAXPAYER 34 LEASES PROPERTY TO AN AFFILIATED REGULATED BROKER, DEALER, OR REGISTERED 35 INVESTMENT ADVISER THAT USES SUCH PROPERTY IN ACCORDANCE WITH CLAUSE 36 (IV) OR (V) OF SUBPARAGRAPH (D) OF PARAGRAPH TWO OF THIS SUBDIVISION. 37 FOR PURPOSES OF THE PRECEDING SENTENCE, ANY CONTRACT OR AGREEMENT TO 38 LEASE OR RENT OR FOR A LICENSE TO USE SUCH PROPERTY SHALL BE CONSIDERED 39 A LEASE. PROVIDED, HOWEVER, IN DETERMINING WHETHER A TAXPAYER SHALL BE 40 ALLOWED A CREDIT UNDER THIS SUBDIVISION WITH RESPECT TO SUCH PROPERTY, 41 ANY ELECTION MADE WITH RESPECT TO SUCH PROPERTY PURSUANT TO THE 42 PROVISIONS OF PARAGRAPH EIGHT OF SUBSECTION (F) OF SECTION ONE HUNDRED 43 SIXTY-EIGHT OF THE INTERNAL REVENUE CODE, AS SUCH PARAGRAPH WAS IN 44 EFFECT FOR AGREEMENTS ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN 45 HUNDRED EIGHTY-FOUR, SHALL BE DISREGARDED. 46 (4) IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY 47 TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS 48 MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED 49 FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. ANY REFUND PAID PURSUANT 50 TO THIS PARAGRAPH SHALL BE DEEMED TO BE A REFUND OF AN OVERPAYMENT OF 51 TAX AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS CHAPTER, 52 PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON. 53 (DD) DISCOVERY WAGE TAX CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A 54 CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED 55 BY THIS ARTICLE, WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO 56 SECTION NINE HUNDRED SEVENTY-TWO OF THE GENERAL MUNICIPAL LAW. THE A. 5394 16 1 AMOUNT OF SUCH CREDIT SHALL BE AS PRESCRIBED IN PARAGRAPH THREE OF THIS 2 SUBDIVISION. 3 (2) "DISCOVERY WAGES" MEANS WAGES PAID BY THE TAXPAYER FOR FULL-TIME 4 EMPLOYMENT DURING A TAXABLE YEAR, PROVIDED THAT THOSE WAGES ARE PAID BY 5 A CERTIFIED BUSINESS AS DEFINED BY THE COMMISSIONER OF ECONOMIC DEVELOP- 6 MENT AS REQUIRED IN HIS OR HER RESPONSIBILITIES. 7 (3) THE CREDIT PROVIDED IN THIS SUBDIVISION SHALL BE EQUAL TO THE 8 PRODUCT OF THE GROSS WAGES PAID AND SIX AND EIGHTY-FIVE HUNDREDTHS 9 PERCENT FOR EACH NET NEW JOB CREATED DURING THE TAXABLE YEAR. 10 (4) "NET NEW JOB" SHALL BE DEFINED AS EACH JOB THAT EXCEEDS THE AVER- 11 AGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN THE 12 PREVIOUS TAXABLE YEAR. 13 (5) IF THE AMOUNT OF THIS CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED 14 UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S 15 TAX FOR SUCH YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT OR 16 CARRYOVERS OF SUCH CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED FROM THE 17 TAX OTHERWISE DUE BY REASON OF PARAGRAPH THREE OF THIS SUBDIVISION, MAY 18 BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM 19 THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. 20 S 8. This act shall take effect immediately; provided, however, that 21 any rules and regulations necessary to carry out the provisions of this 22 act shall be promulgated by the commissioner of economic development 23 before such effective date. 24 PART C 25 Section 1. The opening paragraph and subparagraphs (iv) and (vi) of 26 paragraph (a) of subdivision 1 of section 210 of the tax law, the open- 27 ing paragraph and subparagraph (iv) as amended by section 2 of part N of 28 chapter 60 of the laws of 2007, subparagraph (vi) as amended by section 29 1 of part C of chapter 56 of the laws of 2011, are amended to read as 30 follows: 31 For taxable years beginning before July first, nineteen hundred nine- 32 ty-nine, the amount prescribed by this paragraph shall be computed at 33 the rate of nine percent of the taxpayer's entire net income base. For 34 taxable years beginning after June thirtieth, nineteen hundred ninety- 35 nine and before July first, two thousand, the amount prescribed by this 36 paragraph shall be computed at the rate of eight and one-half percent of 37 the taxpayer's entire net income base. For taxable years beginning after 38 June thirtieth, two thousand and before July first, two thousand one, 39 the amount prescribed by this paragraph shall be computed at the rate of 40 eight percent of the taxpayer's entire net income base. For taxable 41 years beginning after June thirtieth, two thousand one and before Janu- 42 ary first, two thousand seven, the amount prescribed by this paragraph 43 shall be computed at the rate of seven and one-half percent of the 44 taxpayer's entire net income base. For taxable years beginning [on or] 45 after January first, two thousand seven AND BEFORE JANUARY FIRST, TWO 46 THOUSAND THIRTEEN, the amount prescribed by this paragraph shall be 47 computed at the rate of seven and one-tenth percent of the taxpayer's 48 entire net income base. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 49 FIRST, TWO THOUSAND THIRTEEN, THE AMOUNT PRESCRIBED BY THIS PARAGRAPH 50 SHALL BE COMPUTED AT THE RATE OF SIX AND EIGHTY-FIVE ONE HUNDREDTH 51 PERCENT OF THE TAXPAYER'S ENTIRE NET INCOME BASE. The taxpayer's entire 52 net income base shall mean the portion of the taxpayer's entire net 53 income allocated within the state as hereinafter provided, subject to 54 any modification required by paragraphs (d) and (e) of subdivision three A. 5394 17 1 of this section. However, in the case of a small business taxpayer, as 2 defined in paragraph (f) of this subdivision, the amount prescribed by 3 this paragraph shall be computed pursuant to subparagraph (iv) of this 4 paragraph and in the case of a manufacturer, as defined in subparagraph 5 (vi) of this paragraph, the amount prescribed by this paragraph shall be 6 computed pursuant to subparagraph (vi) of this paragraph. 7 (iv) for taxable years beginning [on or] after January first, two 8 thousand seven AND BEFORE JANUARY FIRST, TWO THOUSAND THIRTEEN, if the 9 entire net income base is not more than two hundred ninety thousand 10 dollars the amount shall be six and one-half percent of the entire net 11 income base; if the entire net income base is more than two hundred 12 ninety thousand dollars but not over three hundred ninety thousand 13 dollars the amount shall be the sum of (1) eighteen thousand eight 14 hundred fifty dollars, (2) seven and one-tenth percent of the excess of 15 the entire net income base over two hundred ninety thousand dollars but 16 not over three hundred ninety thousand dollars and (3) four and thirty- 17 five hundredths percent of the excess of the entire net income base over 18 three hundred fifty thousand dollars but not over three hundred ninety 19 thousand dollars. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, 20 TWO THOUSAND THIRTEEN, IF THE ENTIRE NET INCOME IS NOT OVER THREE 21 HUNDRED NINETY THOUSAND DOLLARS THE AMOUNT SHALL BE SIX PERCENT OF THE 22 ENTIRE NET INCOME BASE; 23 (vi) for taxable years beginning [on or] after January thirty-first, 24 two thousand seven, AND BEFORE JANUARY FIRST, TWO THOUSAND TWELVE the 25 amount prescribed by this paragraph for a taxpayer which is a qualified 26 New York manufacturer, shall be computed at the rate of six and one-half 27 (6.5) percent of the taxpayer's entire net income base. For taxable 28 years beginning on or after January first, two thousand twelve and 29 before January first, two thousand [fifteen] THIRTEEN, the amount 30 prescribed by this paragraph for a taxpayer which is an eligible quali- 31 fied New York manufacturer shall be computed at the rate of three and 32 one-quarter (3.25) percent of the taxpayer's entire net income base. 33 FOR TAXABLE YEARS BEGINNING ON AND AFTER JANUARY FIRST, TWO THOUSAND 34 THIRTEEN, THE AMOUNT PRESCRIBED BY THIS PARAGRAPH SHALL BE COMPUTED AT 35 THE RATE OF SIX PERCENT OF THE TAXPAYER'S ENTIRE NET INCOME BASE. The 36 term "manufacturer" shall mean a taxpayer which during the taxable year 37 is principally engaged in the production of goods by manufacturing, 38 processing, assembling, refining, mining, extracting, farming, agricul- 39 ture, horticulture, floriculture, viticulture or commercial fishing. 40 However, the generation and distribution of electricity, the distrib- 41 ution of natural gas, and the production of steam associated with the 42 generation of electricity shall not be qualifying activities for a 43 manufacturer under this subparagraph. Moreover, the combined group shall 44 be considered a "manufacturer" for purposes of this subparagraph only if 45 the combined group during the taxable year is principally engaged in the 46 activities set forth in this paragraph, or any combination thereof. A 47 taxpayer or a combined group shall be "principally engaged" in activ- 48 ities described above if, during the taxable year, more than fifty 49 percent of the gross receipts of the taxpayer or combined group, respec- 50 tively, are derived from receipts from the sale of goods produced by 51 such activities. In computing a combined group's gross receipts, inter- 52 corporate receipts shall be eliminated. A "qualified New York manufac- 53 turer" is a manufacturer which has property in New York which is 54 described in clause (A) of subparagraph (i) of paragraph (b) of subdivi- 55 sion twelve of this section and either (I) the adjusted basis of such 56 property for federal income tax purposes at the close of the taxable A. 5394 18 1 year is at least one million dollars or (II) all of its real and 2 personal property is located in New York. In addition, a "qualified New 3 York manufacturer" means a taxpayer which is defined as a qualified 4 emerging technology company under paragraph (c) of subdivision one of 5 section thirty-one hundred two-e of the public authorities law regard- 6 less of the ten million dollar limitation expressed in subparagraph one 7 of such paragraph (c). The commissioner shall establish guidelines and 8 criteria that specify requirements by which a manufacturer may be clas- 9 sified as an eligible qualified New York manufacturer. Criteria may 10 include but not be limited to factors such as regional unemployment, the 11 economic impact that manufacturing has on the surrounding community, 12 population decline within the region and median income within the region 13 in which the manufacturer is located. In establishing these guidelines 14 and criteria, the commissioner shall endeavor that the total annual cost 15 of the lower rates shall not exceed twenty-five million dollars. 16 S 2. Subsection (a) of section 1455 of the tax law, as amended by 17 section 3 of part N of chapter 60 of the laws of 2007, is amended to 18 read as follows: 19 (a) Basic tax. For taxable years beginning before July first, two 20 thousand, nine percent of the taxpayer's entire net income, or the 21 portion thereof allocated to this state, for the taxable year, or part 22 thereof. For taxable years beginning after June thirtieth, two thousand 23 and before July first, two thousand one, eight and one-half percent of 24 the taxpayer's entire net income, or portion thereof allocated to this 25 state, for the taxable year, or part thereof. For taxable years begin- 26 ning after June thirtieth, two thousand one and before July first, two 27 thousand two, eight percent of the taxpayer's entire net income, or 28 portion thereof allocated to this state, for the taxable year, or part 29 thereof. For taxable years beginning after June thirtieth, two thousand 30 two and before January first, two thousand seven, seven and one-half 31 percent of the taxpayer's entire net income, or portion thereof allo- 32 cated to this state, for the taxable year, or part thereof. For taxable 33 years beginning on [or after] January first, two thousand seven, AND 34 BEFORE JANUARY FIRST, TWO THOUSAND THIRTEEN, seven and one-tenth percent 35 of the taxpayer's entire net income, or the portion thereof allocated to 36 this state, for the taxable year, or part thereof. FOR TAXABLE YEARS 37 BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND THIRTEEN, SIX AND 38 EIGHTY-FIVE ONE HUNDREDTH PERCENT OF THE TAXPAYER'S ENTIRE NET INCOME, 39 OR PORTION THEREOF ALLOCATED TO THIS STATE, FOR THE TAXABLE YEAR, OR 40 PART THEREOF. 41 S 3. Paragraph 1 of subdivision (a) of section 1502 of the tax law, as 42 amended by section 4 of part N of chapter 60 of the laws of 2007, is 43 amended to read as follows: 44 (1) for taxable years beginning before July first, two thousand, nine 45 percent of the taxpayer's entire net income, or portion thereof allo- 46 cated within this state, for the taxable year, or part thereof, except 47 that for taxable years beginning prior to January first, nineteen 48 hundred seventy-eight, the rate shall be four and five-tenths percent; 49 for taxable years beginning after June thirtieth, two thousand and 50 before July first, two thousand one, eight and one-half percent of the 51 taxpayer's entire net income, or portion thereof allocated within this 52 state, for the taxable year, or part thereof; for taxable years begin- 53 ning after June thirtieth, two thousand one and before July first, two 54 thousand two, eight percent of the taxpayer's entire net income, or 55 portion thereof allocated within this state, for the taxable year, or 56 part thereof; for taxable years beginning after June thirtieth, two A. 5394 19 1 thousand two and before January first, two thousand seven, seven and 2 one-half percent of the taxpayer's entire net income, or portion thereof 3 allocated within this state, for the taxable year, or part thereof; 4 [and] for taxable years beginning [on or] after January first, two thou- 5 sand seven AND BEFORE JANUARY FIRST, TWO THOUSAND THIRTEEN, seven and 6 one-tenth percent of the taxpayer's entire net income, or portion there- 7 of allocated within this state, for the taxable year, or part thereof; 8 AND FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND 9 THIRTEEN, SIX AND EIGHTY-FIVE ONE HUNDREDTH PERCENT OF THE TAXPAYER'S 10 ENTIRE NET INCOME, OR PORTION THEREOF ALLOCATED WITHIN THIS STATE, FOR 11 THE TAXABLE YEAR, OR PART THEREOF; or 12 S 4. Subparagraph 1 of paragraph (b) of subdivision 1 of section 186-a 13 of the tax law, as amended by section 4 of part Y of chapter 63 of the 14 laws of 2000, is amended to read as follows: 15 (1) two and five-tenths percent on and after January first, two thou- 16 sand through December thirty-first, two thousand, two and forty-five one 17 hundredths percent from January first, two thousand one through December 18 thirty-first, two thousand one, two and four-tenths percent from January 19 first, two thousand two through December thirty-first, two thousand two, 20 two and twenty-five one hundredths percent from January first, two thou- 21 sand three through December thirty-first, two thousand three, two and 22 one hundred twenty-five one thousandths percent from January first, two 23 thousand four through December thirty-first, two thousand four [and], 24 two percent commencing January first, two thousand five AND ONE AND 25 ONE-HALF PERCENT COMMENCING JANUARY FIRST, TWO THOUSAND THIRTEEN and 26 thereafter of that portion of its gross income derived from the trans- 27 portation, transmission or distribution of gas or electricity by means 28 of conduits, mains, pipes, wires, lines or the like and (2) two and 29 one-tenth percent from January first, two thousand through December 30 thirty-first, two thousand, two percent from January first, two thousand 31 one through December thirty-first, two thousand one, one and nine-tenths 32 percent from January first, two thousand two through December thirty- 33 first, two thousand two, eighty-five one hundredths of one percent from 34 January first, two thousand three through December thirty-first, two 35 thousand three, four-tenths of one percent from January first, two thou- 36 sand four through December thirty-first, two thousand four and zero 37 percent commencing January first, two thousand five of all of its other 38 gross income, is hereby imposed upon every utility not taxed under para- 39 graph (a) of this subdivision doing business in this state which is 40 subject to the supervision of the state department of public service 41 which has a gross income for the year ending December thirty-first in 42 excess of five hundred dollars, except motor carriers or brokers subject 43 to such supervision under the public service law; and 44 S 5. Paragraph (a) of subdivision 2 of section 186-e of the tax law, 45 as amended by section 4 of part S of chapter 85 of the laws of 2002, is 46 amended to read as follows: 47 (a) There is hereby imposed an excise tax on the sale of telecommuni- 48 cation services by any person which is a provider of telecommunication 49 services, to be paid by such person, at the rate of three and one-half 50 percent prior to October first, nineteen hundred ninety-eight, three and 51 one-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 AND 54 TWO PERCENT ON AND AFTER JANUARY FIRST, TWO THOUSAND THIRTEEN of gross 55 receipt from: (1) any intrastate telecommunication services, except any 56 telecommunication services the gross receipt from which is subject to A. 5394 20 1 tax under subparagraph four of this paragraph; (2) any interstate and 2 international telecommunication services (other than interstate and 3 international private telecommunication services and any telecommuni- 4 cation services the gross receipt from which is subject to tax under 5 subparagraph four of this paragraph) which originate or terminate in 6 this state and which telecommunication services are charged to a service 7 address in this state, regardless of where the amounts charged for such 8 services are billed or ultimately paid; (3) interstate and international 9 private telecommunication services, the gross receipt to which the tax 10 shall apply shall be determined as prescribed in subdivision three of 11 this section, except any telecommunication services the gross receipt 12 from which is subject to tax under subparagraph four of this paragraph; 13 and (4) mobile telecommunications service provided by a home service 14 provider where the mobile telecommunications customer's place of primary 15 use is within this state. 16 S 6. Subparagraph 1 of paragraph (g) of subdivision 1 of section 210 17 of the tax law, as amended by section 4 of part AA-1 of chapter 57 of 18 the laws of 2008, is amended to read as follows: 19 (1) General. The amount prescribed by this paragraph shall be, in the 20 case of each New York S corporation, (i) the higher of the amounts 21 prescribed in paragraphs (a) and (d) of this subdivision (other than the 22 amount prescribed in the final clause of subparagraph one of that para- 23 graph (d)) (ii) reduced by the article twenty-two tax equivalent; 24 provided, however, that the amount thus determined shall not be less 25 than the lowest of the amounts prescribed in subparagraph one of that 26 paragraph (d) (applying the provisions of subparagraph three of that 27 paragraph as necessary). Provided, however, notwithstanding any 28 provision of this paragraph, in taxable years beginning in two thousand 29 three and before two thousand eight, the amount prescribed by this para- 30 graph shall be the amount prescribed in subparagraph one of that para- 31 graph (d) (applying the provisions of subparagraph three of that para- 32 graph as necessary) and applying the calculation of that amount in the 33 case of a termination year as set forth in subparagraph four of this 34 paragraph as necessary. In taxable years beginning in two thousand eight 35 [and thereafter], the amount prescribed by this paragraph is the amount 36 prescribed in subparagraph four of that paragraph (d) (applying the 37 provisions of subparagraph three of that paragraph as necessary) and 38 applying the calculation of that amount in the case of a termination 39 year as set forth in subparagraph four of this paragraph as necessary. 40 PROVIDED, FURTHER, AND NOTWITHSTANDING ANY PROVISION OF THIS PARAGRAPH, 41 IN TAXABLE YEARS BEGINNING ON AND AFTER TWO THOUSAND THIRTEEN, THE 42 AMOUNT PRESCRIBED BY THIS PARAGRAPH SHALL EQUAL ZERO, BUT THE PROVISIONS 43 OF THIS PARAGRAPH SHALL HAVE NO EFFECT ON THE AMOUNT PRESCRIBED BY THE 44 ARTICLE TWENTY-TWO TAX EQUIVALENT. 45 S 7. This act shall take effect immediately and shall apply to taxable 46 years beginning on or after January 1, 2013, provided, however, that any 47 rules and regulations necessary to carry out the provisions of this act 48 shall be promulgated before such effective date. 49 S 2. Severability clause. If any clause, sentence, paragraph, subdivi- 50 sion, section or part of this act shall be adjudged by any court of 51 competent jurisdiction to be invalid, such judgment shall not affect, 52 impair, or invalidate the remainder thereof, but shall be confined in 53 its operation to the clause, sentence, paragraph, subdivision, section 54 or part thereof directly involved in the controversy in which such judg- 55 ment shall have been rendered. It is hereby declared to be the intent of A. 5394 21 1 the legislature that this act would have been enacted even if such 2 invalid provisions had not been included herein. 3 S 3. This act shall take effect immediately, provided, however, that 4 the applicable effective date of Parts A through C of this act shall be 5 as specifically set forth in the last section of such Parts.