Bill Text: NY S08524 | 2017-2018 | General Assembly | Introduced
Bill Title: 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.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-05-09 - REFERRED TO LOCAL GOVERNMENT [S08524 Detail]
Download: New_York-2017-S08524-Introduced.html
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. LBD08139-01-7S. 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 programS. 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 stateS. 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 similarS. 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 beS. 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 thisS. 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 taxpayerS. 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 wasS. 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 forS. 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 deductedS. 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 thanS. 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.