Bill Text: NY A03009 | 2013-2014 | General Assembly | Amended
Bill Title: Enacts into law major components of legislation necessary to implement the state fiscal plan for the 2013-2014 state fiscal year; relates to the temporary metropolitan transportation business tax surcharge; relates to the empire state film production credit and to the empire state film post production credit; relates to reports; establishes the New York business incubator and innovation hot spot support act; relates to extending for three years the charitable contributions deduction limitation; relates to the exclusion of certain royalty payments from the entire net income or other taxable basis of corporations, banking corporations, and insurance corporations, from the unrelated business income of corporations, and from the adjusted gross income of individual taxpayers; relates to the historic preservation tax credit; provides a tax credit for electric vehicle recharging property; relates to extending provisions relating to mandatory electronic filing of tax documents and improving sales tax compliance; relates to restrictions on funds of the industrial development agency and relates to industrial development agencies and authorities; relates to expanding the exemption of CNG in the sales tax to include natural gas purchased and used to produce CNG for use exclusively and directly in the engine of a motor vehicle; relates to allowing voluntary ambulance services, fire companies, fire departments and rescue squads to claim reimbursement of the petroleum business tax for fuel used in their vehicles; relates to increasing the penalty for the possession of unstamped and unlawfully stamped cigarettes; relates to the suspension of drivers' licenses of persons who are delinquent in the payment of past-due tax liabilities; relates to serving an income execution with respect to individual tax debtors without filing a warrant; relates to vendor fees paid to vendor tracks; relates to licenses for simulcasting facilities, sums relating to track simulcast, simulcast of out-of-state thoroughbred races, simulcasting of races run by out-of-state harness tracks and distributions of wagers; extends certain provisions of law; relates to the credit for the rehabilitation of historic homes; relates to allowing certain tax-free interdistributor sales of highway diesel motor fuel; relates to updating the farming exemption in the highway use tax to reflect current industry practice; relates to providing a subtraction from income for small businesses and small farms; relates to providing tax cuts to manufacturers; relates to adding a hire a vet credit; relates to extending the temporary state energy and utility conservation assessment; relates to a credit for middle income taxpayers with children; relates to the New York youth works tax credit program; relates to adding a minimum wage reimbursement credit; relates to personal income tax rates; relates to the gift for New York state teen health education fund; relates to establishing the New York state teen health education fund; relates to eligible businesses participating in the excelsior linked deposit program; relates to small business loan funds for business enterprises that are minority- and women-owned; and relates to establishing a New York state innovation capital fund.
Spectrum: Committee Bill
Status: (Introduced - Dead) 2013-03-28 - substituted by s2609d [A03009 Detail]
Download: New_York-2013-A03009-Amended.html
S T A T E O F N E W Y O R K ________________________________________________________________________ S. 2609--D A. 3009--D S E N A T E - A S S E M B L Y January 22, 2013 ___________ IN SENATE -- A BUDGET BILL, submitted by the Governor pursuant to arti- cle seven of the Constitution -- read twice and ordered printed, and when printed to be committed to the Committee on Finance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee IN ASSEMBLY -- A BUDGET BILL, submitted by the Governor pursuant to article seven of the Constitution -- read once and referred to the Committee on Ways and Means -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- again reported from said committee with amendments, ordered reprinted as amended and recommitted to said committee -- again reported from said committee with amendments, ordered reprinted as amended and recommitted to said committee -- again reported from said committee with amendments, ordered reprinted as amended and recommitted to said committee AN ACT to amend the tax law, in relation to the temporary metropolitan transportation business tax surcharge (Part A); to amend the tax law, in relation to the empire state film production credit and the empire state film post production credit; and to amend part Y-1 of chapter 57 of the laws of 2009 amending the tax law relating to the empire state film production credit, in relation to reports (Part B); to amend the urban development corporation act, the tax law and the administrative code of the city of New York, in relation to establishing the New York business incubator and innovation hot spot support act (Part C); to amend the tax law and the administrative code of the city of New York, in relation to extending for three years the charitable contributions deduction limitation (Part D); to amend the tax law and the adminis- trative code of the city of New York, in relation to the exclusion of certain royalty payments from the entire net income or other taxable basis of corporations, banking corporations, and insurance corpo- rations, from the unrelated business income of corporations, and from the adjusted gross income of individual taxpayers; and to repeal EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD12574-06-3 S. 2609--D 2 A. 3009--D certain provisions of the tax law relating thereto (Part E); to amend the tax law, in relation to the historic preservation tax credit (Part F); to amend the tax law, in relation to providing a tax credit for electric vehicle recharging property (Part G); to amend chapter 61 of the laws of 2011 amending the real property tax law and other laws relating to establishing standards for electronic real property tax administration, in relation to extending provisions relating to manda- tory electronic filing of tax documents and improving sales tax compliance (Part H); intentionally omitted (Part I); to amend the general municipal law, in relation to restrictions on funds of the industrial development agency and to amend the general municipal law and the public authorities law, in relation to industrial development agencies and authorities (Part J); to amend the tax law, in relation to expanding the exemption of CNG in the sales tax to include natural gas purchased and used to produce CNG for use exclusively and directly in the engine of a motor vehicle (Part K); to amend the tax law, in relation to allowing voluntary ambulance services, fire companies, fire departments and rescue squads to claim reimbursement of the petroleum business tax for fuel used in their vehicles (Part L); intentionally omitted (Part M); intentionally omitted (Part N); to amend the tax law, in relation to increasing the penalty for the possession of unstamped and unlawfully stamped cigarettes (Part O); to amend the tax law and the vehicle and traffic law, in relation to the suspension of drivers' licenses of persons who are delinquent in the payment of past-due tax liabilities (Part P); to amend the tax law, in relation to serving an income execution with respect to individual tax debtors without filing a warrant; and providing for the repeal of such provisions upon the expiration thereof (Part Q); intentionally omitted (Part R); intentionally omitted (Part S); to amend the tax law, in relation to vendor fees paid to vendor tracks (Part T); to amend the racing, pari-mutuel wagering and breeding law, in relation to licenses for simulcast facilities, sums relating to track simul- cast, simulcast of out-of-state thoroughbred races, simulcasting of races run by out-of-state harness tracks and distributions of wagers; to amend chapter 281 of the laws of 1994 amending the racing, pari-mu- tuel wagering and breeding law and other laws relating to simulcasting and chapter 346 of the laws of 1990 amending the racing, pari-mutuel wagering and breeding law and other laws relating to simulcasting and the imposition of certain taxes, in relation to extending certain provisions thereof; and to amend the racing, pari-mutuel wagering and breeding law, in relation to extending certain provisions thereof (Part U); to amend the tax law, in relation to the credit for the rehabilitation of historic homes (Part V); to amend the tax law, in relation to allowing certain tax-free interdistributor sales of high- way diesel motor fuel (Part W); to amend the tax law, in relation to updating the farming exemption in the highway use tax to reflect current industry practice (Part X); to amend the tax law and the administrative code of the city of New York, in relation to providing a subtraction from income for small businesses and small farms (Part Y); to amend the tax law, in relation to providing tax cuts to manufacturers (Part Z); to amend the tax law, in relation to adding a hire a vet credit (Part AA); to amend the public service law, in relation to extending the temporary state energy and utility conserva- tion assessment; and to amend section 6 of part NN of chapter 59 of the laws of 2009 amending the public service law relating to financing the operations of the department of public service, the public service S. 2609--D 3 A. 3009--D commission, department support and energy management services provided by other state agencies, increasing the utility assessment cap and the minimum threshold for collection thereunder, and establishing a tempo- rary state energy and utility service conservation assessment and providing for the collection thereof, in relation to extending the effectiveness thereof (Part BB); to amend the tax law, in relation to a credit for middle income taxpayers with children (Part CC); to amend the labor law, in relation to the New York youth works tax credit program (Part DD); to amend the tax law, in relation to adding a mini- mum wage reimbursement credit (Part EE); to amend the tax law, in relation to personal income tax rates; to amend section 11 of part A of chapter 56 of the laws of 2011, relating to the tax rates and exclusions under the metropolitan commuter transportation mobility tax, relating to withholding tables and methods for certain tax years; and to amend the administrative code of the city of New York, relating to the amounts of standard deductions (Part FF); to amend the tax law, in relation to the gift for New York state teen health education fund; and to amend the state finance law, in relation to establishing the New York state teen health education fund (Part GG); to amend the state finance law, in relation to eligible businesses participating in the excelsior linked deposit program (Part HH); to amend the New York state urban development corporation act, in relation to small business loan funds for business enterprises that are minority- and women-owned (Part II); and in relation to establishing a New York state innovation capital fund (Part JJ) THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. This act enacts into law major components of legislation 2 which are necessary to implement the state fiscal plan for the 2013-2014 3 state fiscal year. Each component is wholly contained within a Part 4 identified as Parts A through JJ. The effective date for each particular 5 provision contained within such Part is set forth in the last section of 6 such Part. Any provision in any section contained within a Part, includ- 7 ing the effective date of the Part, which makes a reference to a section 8 "of this act", when used in connection with that particular component, 9 shall be deemed to mean and refer to the corresponding section of the 10 Part in which it is found. Section three of this act sets forth the 11 general effective date of this act. 12 PART A 13 Section 1. Subdivision 1 of section 183-a of the tax law, as amended 14 by section 1 of part II-1 of chapter 57 of the laws of 2008, is amended 15 to read as follows: 16 1. The term "corporation" as used in this section shall include an 17 association, within the meaning of paragraph three of subsection (a) of 18 section seventy-seven hundred one of the internal revenue code (includ- 19 ing a limited liability company), a publicly traded partnership treated 20 as a corporation for purposes of the internal revenue code pursuant to 21 section seventy-seven hundred four thereof and any business conducted by 22 a trustee or trustees wherein interest or ownership is evidenced by 23 certificates or other written instruments. Every corporation, joint- 24 stock company or association formed for or principally engaged in the S. 2609--D 4 A. 3009--D 1 conduct of canal, steamboat, ferry (except a ferry company operating 2 between any of the boroughs of the city of New York under a lease grant- 3 ed by the city), express, navigation, pipe line, transfer, baggage 4 express, omnibus, taxicab, telegraph, or telephone business, or formed 5 for or principally engaged in the conduct of two or more such busi- 6 nesses, and every corporation, joint-stock company or association formed 7 for or principally engaged in the conduct of a railroad, palace car, 8 sleeping car or trucking business or formed for or principally engaged 9 in the conduct of two or more of such businesses and which has made an 10 election pursuant to subdivision ten of section one hundred eighty-three 11 of this article, and every other corporation, joint-stock company or 12 association principally engaged in the conduct of a transportation or 13 transmission business, except a corporation, joint-stock company or 14 association formed for or principally engaged in the conduct of a rail- 15 road, palace car, sleeping car or trucking business or formed for or 16 principally engaged in the conduct of two or more of such businesses and 17 which has not made the election provided for in subdivision ten of 18 section one hundred eighty-three of this article, and except a corpo- 19 ration, joint-stock company or association principally engaged in the 20 conduct of aviation (including air freight forwarders acting as princi- 21 pal and like indirect air carriers) and except a corporation principally 22 engaged in providing telecommunication services between aircraft and 23 dispatcher, aircraft and air traffic control or ground station and 24 ground station (or any combination of the foregoing), at least ninety 25 percent of the voting stock of which corporation is owned, directly or 26 indirectly, by air carriers and which corporation's principal function 27 is to fulfill the requirements of (i) the federal aviation adminis- 28 tration (or the successor thereto) or (ii) the international civil 29 aviation organization (or the successor thereto), relating to the exist- 30 ence of a communication system between aircraft and dispatcher, aircraft 31 and air traffic control or ground station and ground station (or any 32 combination of the foregoing) for the purposes of air safety and naviga- 33 tion and except a corporation, joint-stock company or association which 34 is liable to taxation under article thirty-two of this chapter, shall 35 pay for the privilege of exercising its corporate franchise, or of doing 36 business, or of employing capital, or of owning or leasing property in 37 the metropolitan commuter transportation district in such corporate or 38 organized capacity, or of maintaining an office in such district, a tax 39 surcharge for all or any part of its years commencing on or after Janu- 40 ary first, nineteen hundred eighty-two but ending before December thir- 41 ty-first, two thousand [thirteen] EIGHTEEN, which tax surcharge, in 42 addition to the tax imposed by section one hundred eighty-three of this 43 article, shall be computed at the rate of eighteen percent of the tax 44 imposed under such section one hundred eighty-three for such years or 45 any part of such years ending before December thirty-first, nineteen 46 hundred eighty-three after the deduction of any credits otherwise allow- 47 able under this article, and at the rate of seventeen percent of the tax 48 imposed under such section for such years or any part of such years 49 ending on or after December thirty-first, nineteen hundred eighty-three 50 after the deduction of any credits otherwise allowable under this arti- 51 cle; provided, however, that such rates of tax surcharge shall be 52 applied only to that portion of the tax imposed under section one 53 hundred eighty-three of this article after the deduction of any credits 54 otherwise allowable under this article which is attributable to the 55 taxpayer's business activity carried on within the metropolitan commuter 56 transportation district as so determined in the manner prescribed by the S. 2609--D 5 A. 3009--D 1 rules and regulations promulgated by the commissioner; and provided, 2 further, that the tax surcharge imposed by this section shall not be 3 imposed upon any taxpayer for more than [three] FOUR hundred [seventy- 4 two] THIRTY-TWO months. 5 S 2. The opening paragraph of subdivision 1 of section 184-a of the 6 tax law, as amended by section 2 of part II-1 of chapter 57 of the laws 7 of 2008, is amended to read as follows: 8 The term "corporation" as used in this section shall include an asso- 9 ciation, within the meaning of paragraph three of subsection (a) of 10 section seventy-seven hundred one of the internal revenue code (includ- 11 ing a limited liability company), and a publicly traded partnership 12 treated as a corporation for purposes of the internal revenue code 13 pursuant to section seventy-seven hundred four thereof. Every corpo- 14 ration, joint-stock company or association formed for or principally 15 engaged in the conduct of canal, steamboat, ferry (except a ferry compa- 16 ny operating between any of the boroughs of the city of New York under a 17 lease granted by the city), express, navigation, pipe line, transfer, 18 baggage express, omnibus, taxicab, telegraph or local telephone busi- 19 ness, or formed for or principally engaged in the conduct of two or more 20 such businesses, and every corporation, joint-stock company or associ- 21 ation formed for or principally engaged in the conduct of a surface 22 railroad, whether or not operated by steam, subway railroad, elevated 23 railroad, palace car, sleeping car or trucking business or principally 24 engaged in the conduct of two or more such businesses and which has made 25 an election pursuant to subdivision ten of section one hundred eighty- 26 three of this article, and every other corporation, joint-stock company 27 or association formed for or principally engaged in the conduct of a 28 transportation or transmission business (other than a telephone busi- 29 ness) except a corporation, joint-stock company or association formed 30 for or principally engaged in the conduct of a surface railroad, whether 31 or not operated by steam, subway railroad, elevated railroad, palace 32 car, sleeping car or trucking business or principally engaged in the 33 conduct of two or more such businesses and which has not made the 34 election provided for in subdivision ten of section one hundred eighty- 35 three of this article, and except a corporation, joint-stock company or 36 association principally engaged in the conduct of aviation (including 37 air freight forwarders acting as principal and like indirect air carri- 38 ers) and except a corporation principally engaged in providing telecom- 39 munication services between aircraft and dispatcher, aircraft and air 40 traffic control or ground station and ground station (or any combination 41 of the foregoing), at least ninety percent of the voting stock of which 42 corporation is owned, directly or indirectly, by air carriers and which 43 corporation's principal function is to fulfill the requirements of (i) 44 the federal aviation administration (or the successor thereto) or (ii) 45 the international civil aviation organization (or the successor there- 46 to), relating to the existence of a communication system between 47 aircraft and dispatcher, aircraft and air traffic control or ground 48 station and ground station (or any combination of the foregoing) for the 49 purposes of air safety and navigation and except a corporation, joint- 50 stock company or association which is liable to taxation under article 51 thirty-two of this chapter, shall pay for the privilege of exercising 52 its corporate franchise, or of doing business, or of employing capital, 53 or of owning or leasing property in the metropolitan commuter transpor- 54 tation district in such corporate or organized capacity, or of maintain- 55 ing an office in such district, a tax surcharge for all or any part of 56 its taxable years commencing on or after January first, nineteen hundred S. 2609--D 6 A. 3009--D 1 eighty-two, but ending before December thirty-first, two thousand [thir- 2 teen] EIGHTEEN, which tax surcharge, in addition to the tax imposed by 3 section one hundred eighty-four of this article, shall be computed at 4 the rate of eighteen percent of the tax imposed under such section one 5 hundred eighty-four for such taxable years or any part of such taxable 6 years ending before December thirty-first, nineteen hundred eighty-three 7 after the deduction of any credits otherwise allowable under this arti- 8 cle, and at the rate of seventeen percent of the tax imposed under such 9 section for such taxable years or any part of such taxable years ending 10 on or after December thirty-first, nineteen hundred eighty-three after 11 the deduction of any credits otherwise allowable under this article; 12 provided, however, that such rates of tax surcharge shall be applied 13 only to that portion of the tax imposed under section one hundred eight- 14 y-four of this article after the deduction of any credits otherwise 15 allowable under this article which is attributable to the taxpayer's 16 business activity carried on within the metropolitan commuter transpor- 17 tation district; and provided, further, that the tax surcharge imposed 18 by this section on corporations, joint-stock companies and associations 19 formed for or principally engaged in the conduct of telephone or tele- 20 graph business shall be computed in accordance with this subdivision and 21 paragraph (c) of subdivision two of this section as if the three-quar- 22 ters of one percent rate of tax provided for in subdivision one of 23 section one hundred eighty-four of this article were applicable to such 24 telephone and telegraph businesses for taxable years commencing on or 25 after January first, nineteen hundred eighty-five and ending on or 26 before December thirty-first, nineteen hundred eighty-nine; and 27 provided, further, that the tax surcharge imposed by this section shall 28 not be imposed upon any taxpayer for more than [three] FOUR hundred 29 [seventy-two] THIRTY-TWO months. Provided, however, that for taxable 30 years beginning in two thousand and thereafter, for purposes of this 31 subdivision the tax imposed under section one hundred eighty-four of 32 this article shall be deemed to have been imposed at the rate of three- 33 quarters of one percent, except that in the case of a corporation, 34 joint-stock company or association which has made an election pursuant 35 to subdivision ten of section one hundred eighty-three of this article, 36 for purposes of this subdivision the tax imposed under section one 37 hundred eighty-four of this article shall be deemed to have been imposed 38 at the rate of six-tenths of one percent. 39 S 3. Subparagraph 1 of paragraph (a) of subdivision 1 of section 186-c 40 of the tax law, as amended by section 3 of part II-1 of chapter 57 of 41 the laws of 2008, is amended to read as follows: 42 (1) Every utility doing business in the metropolitan commuter trans- 43 portation district shall pay a tax surcharge, in addition to the tax 44 imposed by section one hundred eighty-six-a of this article, for all or 45 any parts of its taxable years commencing on or after January first, 46 nineteen hundred eighty-two but ending before December thirty-first, two 47 thousand [thirteen] EIGHTEEN, to be computed at the rate of eighteen 48 percent of the tax imposed under section one hundred eighty-six-a of 49 this article for such taxable years or any part of such taxable years 50 ending before December thirty-first, nineteen hundred eighty-three after 51 the deduction of any credits otherwise allowable under this article, and 52 at the rate of seventeen percent of the tax imposed under such section 53 for such taxable years or any part of such taxable years ending on or 54 after December thirty-first, nineteen hundred eighty-three after the 55 deduction of credits otherwise allowable under this article except any 56 utility credit provided for by article thirteen-A of this chapter; S. 2609--D 7 A. 3009--D 1 provided, however, that such rates of tax surcharge shall be applied 2 only to that portion of the tax imposed under section one hundred eight- 3 y-six-a of this article after the deduction of credits otherwise allow- 4 able under this article, except any utility credit provided for by arti- 5 cle thirteen-A of this chapter, which is attributable to the taxpayer's 6 gross income or gross operating income from business activity carried on 7 within the metropolitan commuter transportation district; and provided, 8 further, that the tax surcharge imposed by this section shall not be 9 imposed upon any taxpayer for more than [three] FOUR hundred [seventy- 10 two] THIRTY-TWO months. 11 S 4. Subdivision 1 of section 209-B of the tax law, as amended by 12 section 4 of part II-1 of chapter 57 of the laws of 2008, is amended to 13 read as follows: 14 1. For the privilege of exercising its corporate franchise, or of 15 doing business, or of employing capital, or of owning or leasing proper- 16 ty in a corporate or organized capacity, or of maintaining an office in 17 the metropolitan commuter transportation district, for all or any part 18 of its taxable year, there is hereby imposed on every corporation, other 19 than a New York S corporation, subject to tax under section two hundred 20 nine of this article, or any receiver, referee, trustee, assignee or 21 other fiduciary, or any officer or agent appointed by any court, who 22 conducts the business of any such corporation, for the taxable years 23 commencing on or after January first, nineteen hundred eighty-two but 24 ending before December thirty-first, two thousand [thirteen] EIGHTEEN, a 25 tax surcharge, in addition to the tax imposed under section two hundred 26 nine of this article, to be computed at the rate of eighteen percent of 27 the tax imposed under such section two hundred nine for such taxable 28 years or any part of such taxable years ending before December thirty- 29 first, nineteen hundred eighty-three after the deduction of any credits 30 otherwise allowable under this article, and at the rate of seventeen 31 percent of the tax imposed under such section for such taxable years or 32 any part of such taxable years ending on or after December thirty-first, 33 nineteen hundred eighty-three after the deduction of any credits other- 34 wise allowable under this article; provided, however, that such rates of 35 tax surcharge shall be applied only to that portion of the tax imposed 36 under section two hundred nine of this article after the deduction of 37 any credits otherwise allowable under this article which is attributable 38 to the taxpayer's business activity carried on within the metropolitan 39 commuter transportation district; and provided, further, that the tax 40 surcharge imposed by this section shall not be imposed upon any taxpayer 41 for more than [three] FOUR hundred [seventy-two] THIRTY-TWO months. 42 Provided however, that for taxable years commencing on or after July 43 first, nineteen hundred ninety-eight, such surcharge shall be calculated 44 as if the tax imposed under section two hundred ten of this article were 45 imposed under the law in effect for taxable years commencing on or after 46 July first, nineteen hundred ninety-seven and before July first, nine- 47 teen hundred ninety-eight. Provided however, that for taxable years 48 commencing on or after January first, two thousand seven, such surcharge 49 shall be calculated using the highest of the tax bases imposed pursuant 50 to paragraphs (a), (b), (c) or (d) of subdivision one of section two 51 hundred ten of this article and the amount imposed under paragraph (e) 52 of subdivision one of such section two hundred ten, for the taxable 53 year; and, provided further that, if such highest amount is the tax base 54 imposed under paragraph (a), (b) or (c) of such subdivision, then the 55 surcharge shall be computed as if the tax rates and limitations under 56 such paragraph were the tax rates and limitations under such paragraph S. 2609--D 8 A. 3009--D 1 in effect for taxable years commencing on or after July first, nineteen 2 hundred ninety-seven and before July first, nineteen hundred ninety- 3 eight. 4 S 5. Subsection 1 of section 1455-B of the tax law, as amended by 5 section 5 of part II-1 of chapter 57 of the laws of 2008, is amended to 6 read as follows: 7 1. For the privilege of exercising its franchise or doing business in 8 the metropolitan commuter transportation district in a corporate or 9 organized capacity, there is hereby imposed on every taxpayer subject to 10 tax under this article, other than a New York S corporation, for the 11 taxable years commencing on or after January first, nineteen hundred 12 eighty-two but ending before December thirty-first, two thousand [thir- 13 teen] EIGHTEEN, a tax surcharge, in addition to the tax imposed under 14 section fourteen hundred fifty-one of this article, at the rate of eigh- 15 teen percent of the tax imposed under such section fourteen hundred 16 fifty-one of this article, for such taxable years or any part of such 17 taxable years ending before December thirty-first, nineteen hundred 18 eighty-three after the deduction of any credits otherwise allowable 19 under this article, and at the rate of seventeen percent of the tax 20 imposed under such section for such taxable years or any part of such 21 taxable years ending on or after December thirty-first, nineteen hundred 22 eighty-three after the deduction of any credits otherwise allowable 23 under this article; provided however, that such rates of tax surcharge 24 shall be applied only to that portion of the tax imposed under section 25 fourteen hundred fifty-one of this article after the deduction of any 26 credits otherwise allowable under this article which is attributable to 27 the taxpayer's business activity carried on within the metropolitan 28 commuter transportation district; and provided, further, that the tax 29 surcharge imposed by this section shall not be imposed upon any taxpayer 30 for more than [three] FOUR hundred [seventy-two] THIRTY-TWO months. 31 Provided however, that for taxable years commencing on or after July 32 first, two thousand, such surcharge shall be calculated as if the rate 33 of the basic tax computed under subsection (a) of section fourteen 34 hundred fifty-five of this article was nine percent. 35 S 6. Paragraphs 1 and 3 of subdivision (a) of section 1505-a of the 36 tax law, as amended by section 6 of part II-1 of chapter 57 of the laws 37 of 2008, are amended to read as follows: 38 (1) Every domestic insurance corporation and every foreign or alien 39 insurance corporation, and every life insurance corporation described in 40 subdivision (b) of section fifteen hundred one of this article, for the 41 privilege of exercising its corporate franchise, or of doing business, 42 or of employing capital, or of owning or leasing property in the metro- 43 politan commuter transportation district in a corporate or organized 44 capacity, or of maintaining an office in the metropolitan commuter 45 transportation district, for all or any part of its taxable years 46 commencing on or after January first, nineteen hundred eighty-two, but 47 ending before December thirty-first, two thousand [thirteen] EIGHTEEN, 48 except corporations specified in subdivision (c) of section fifteen 49 hundred twelve of this article, shall annually pay, in addition to the 50 taxes otherwise imposed by this article, a tax surcharge on the taxes 51 imposed under this article after the deduction of any credits otherwise 52 allowable under this article as allocated to such district. Such taxes 53 shall be allocated to such district for purposes of computing such tax 54 surcharge upon taxpayers subject to tax under subdivision (b) of section 55 fifteen hundred ten of this article by applying the methodology, proce- 56 dures and computations set forth in subdivisions (a) and (b) of section S. 2609--D 9 A. 3009--D 1 fifteen hundred four of this article, except that references to terms 2 denoting New York premiums, and total wages, salaries, personal service 3 compensation and commissions within New York shall be read as denoting 4 within the metropolitan commuter transportation district and terms 5 denoting total premiums and total wages, salaries, personal service 6 compensation and commissions shall be read as denoting within the state. 7 If it shall appear to the commissioner that the application of the meth- 8 odology, procedures and computations set forth in such subdivisions (a) 9 and (b) does not properly reflect the activity, business or income of a 10 taxpayer within the metropolitan commuter transportation district, then 11 the commissioner shall be authorized, in the commissioner's discretion, 12 to adjust such methodology, procedures and computations for the purpose 13 of allocating such taxes by: 14 (A) excluding one or more factors therein; 15 (B) including one or more other factors therein, such as expenses, 16 purchases, receipts other than premiums, real property or tangible 17 personal property; or 18 (C) any other similar or different method which allocates such taxes 19 by attributing a fair and proper portion of such taxes to the metropol- 20 itan commuter transportation district. The commissioner from time to 21 time shall publish all rulings of general public interest with respect 22 to any application of the provisions of the preceding sentence. The 23 commissioner may promulgate rules and regulations to further implement 24 the provisions of this section. 25 (3) Such tax surcharge shall be computed at the rate of eighteen 26 percent of the taxes imposed under sections fifteen hundred one and 27 fifteen hundred ten of this article as limited by section fifteen 28 hundred five of this article, as allocated to such district, for such 29 taxable years or any part of such taxable years ending before December 30 thirty-first, nineteen hundred eighty-three after the deduction of any 31 credits otherwise allowable under this article, at the rate of seventeen 32 percent of the taxes imposed under such sections as limited by section 33 fifteen hundred five of this article, as allocated to such district, for 34 such taxable years or any part of such taxable years ending on or after 35 December thirty-first, nineteen hundred eighty-three and before January 36 first, two thousand three after the deduction of any credits otherwise 37 allowable under this article, and at the rate of seventeen percent of 38 the taxes imposed under sections fifteen hundred one, fifteen hundred 39 two-a, and fifteen hundred ten of this article, as limited or otherwise 40 determined by subdivision (a) or (b) of section fifteen hundred five of 41 this article, as allocated to such district, for such taxable years or 42 any part of such taxable years ending after December thirty-first, two 43 thousand two after the deduction of any credits otherwise allowable 44 under this article; provided, however, that the tax surcharge imposed by 45 this section shall not be imposed upon any taxpayer for more than 46 [three] FOUR hundred [seventy-two] THIRTY-TWO months. Provided however, 47 that for taxable years commencing on or after July first, two thousand, 48 and in the case of taxpayers subject to tax under section fifteen 49 hundred two-a of this article, for taxable years of such taxpayers 50 beginning on or after July first, two thousand and before January first, 51 two thousand three, such surcharge shall be calculated as if (i) the 52 rate of the tax computed under paragraph one of subdivision (a) of 53 section fifteen hundred two of this article was nine percent and (ii) 54 the rate of the limitation on tax set forth in section fifteen hundred 55 five of this article for domestic, foreign and alien insurance corpo- S. 2609--D 10 A. 3009--D 1 rations except life insurance corporations was two and six-tenths 2 percent. 3 S 7. This act shall take effect immediately. 4 PART B 5 Section 1. Paragraph 3 of subdivision (b) of section 24 of the tax 6 law, as added by section 1 of part P of chapter 60 of the laws of 2004, 7 is amended to read as follows: 8 (3) "Qualified film" means a feature-length film, television film, 9 RELOCATED TELEVISION PRODUCTION, television pilot and/or each episode of 10 a television series, regardless of the medium by means of which the 11 film, pilot or episode is created or conveyed. "Qualified film" shall 12 not include (i) a documentary film, news or current affairs program, 13 interview or talk program, "how-to" (i.e., instructional) film or 14 program, film or program consisting primarily of stock footage, sporting 15 event or sporting program, game show, award ceremony, film or program 16 intended primarily for industrial, corporate or institutional end-users, 17 fundraising film or program, daytime drama (i.e., daytime "soap opera"), 18 commercials, music videos or "reality" program, or (ii) a production for 19 which records are required under section 2257 of title 18, United States 20 code, to be maintained with respect to any performer in such production 21 (reporting of books, films, etc. with respect to sexually explicit 22 conduct). 23 S 2. Subdivision (b) of section 24 of the tax law is amended by adding 24 a new paragraph 8 to read as follows: 25 (8) "RELOCATED TELEVISION PRODUCTION" SHALL MEAN, NOTWITHSTANDING THE 26 LIMITATIONS IN SUBPARAGRAPH (I) OF PARAGRAPH THREE OF THIS SUBDIVISION, 27 A TELEVISION PRODUCTION THAT IS A TALK OR VARIETY PROGRAM THAT FILMED AT 28 LEAST FIVE SEASONS OUTSIDE THE STATE PRIOR TO ITS FIRST RELOCATED SEASON 29 IN NEW YORK, THE EPISODES ARE FILMED BEFORE A STUDIO AUDIENCE OF TWO 30 HUNDRED OR MORE, AND THE RELOCATED TELEVISION PRODUCTION INCURS (I) AT 31 LEAST THIRTY MILLION DOLLARS IN ANNUAL PRODUCTION COSTS IN THE STATE, OR 32 (II) AT LEAST TEN MILLION DOLLARS IN CAPITAL EXPENDITURES AT A QUALIFIED 33 PRODUCTION FACILITY IN THE STATE. 34 S 3. Paragraph 4 of subdivision (e) of section 24 of the tax law, as 35 added by chapter 268 of the laws of 2012, is amended to read as follows: 36 (4) Additional pool 2 - The aggregate amount of tax credits allowed in 37 subdivision (a) of this section shall be increased by an [addition] 38 ADDITIONAL four hundred twenty million dollars in EACH YEAR STARTING IN 39 two thousand ten[, four hundred twenty million dollars in two thousand 40 eleven, four hundred twenty million dollars in two thousand twelve, four 41 hundred twenty million dollars in two thousand thirteen and four hundred 42 twenty million dollars in two thousand fourteen] THROUGH TWO THOUSAND 43 NINETEEN provided however, seven million dollars of the annual allo- 44 cation shall be available for the empire state film post production 45 credit pursuant to section thirty-one of this [chapter] ARTICLE IN TWO 46 THOUSAND THIRTEEN AND TWO THOUSAND FOURTEEN AND TWENTY-FIVE MILLION 47 DOLLARS OF THE ANNUAL ALLOCATION SHALL BE AVAILABLE FOR THE EMPIRE STATE 48 FILM POST PRODUCTION CREDIT PURSUANT TO SECTION THIRTY-ONE OF THIS ARTI- 49 CLE IN EACH YEAR STARTING IN TWO THOUSAND FIFTEEN THROUGH TWO THOUSAND 50 NINETEEN. This amount shall be allocated by the governor's office for 51 motion picture and television development among taxpayers in accordance 52 with subdivision (a) of this section. If the [director of the governor's 53 office for motion picture and television development] COMMISSIONER OF 54 ECONOMIC DEVELOPMENT determines that the aggregate amount of tax credits S. 2609--D 11 A. 3009--D 1 available from additional pool 2 for the empire state film production 2 tax credit have been previously allocated, and determines that the pend- 3 ing applications from eligible applicants for the EMPIRE STATE FILM post 4 production tax credit pursuant to section thirty-one of this [chapter] 5 ARTICLE is insufficient to utilize the balance of unallocated EMPIRE 6 STATE FILM post production tax credits from such pool, the remainder, 7 after such pending applications are considered, shall be made available 8 for allocation in the empire state film tax credit pursuant to this 9 section, subdivision thirty-six of section two hundred ten and 10 subsection (gg) of section six hundred six of this chapter. ALSO, IF 11 THE COMMISSIONER OF ECONOMIC DEVELOPMENT DETERMINES THAT THE AGGREGATE 12 AMOUNT OF TAX CREDITS AVAILABLE FROM ADDITIONAL POOL 2 FOR THE EMPIRE 13 STATE FILM POST PRODUCTION TAX CREDIT HAVE BEEN PREVIOUSLY ALLOCATED, 14 AND DETERMINES THAT THE PENDING APPLICATIONS FROM ELIGIBLE APPLICANTS 15 FOR THE EMPIRE STATE FILM PRODUCTION TAX CREDIT PURSUANT TO THIS SECTION 16 IS INSUFFICIENT TO UTILIZE THE BALANCE OF UNALLOCATED FILM PRODUCTION 17 TAX CREDITS FROM SUCH POOL, THEN ALL OR PART OF THE REMAINDER, AFTER 18 SUCH PENDING APPLICATIONS ARE CONSIDERED, SHALL BE MADE AVAILABLE FOR 19 ALLOCATION FOR THE EMPIRE STATE FILM POST PRODUCTION CREDIT PURSUANT TO 20 THIS SECTION, SUBDIVISION FORTY-ONE OF SECTION TWO HUNDRED TEN AND 21 SUBSECTION (GG) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER. The gover- 22 nor's office for motion picture and television development must notify 23 taxpayers of their allocation year and include the allocation year on 24 the certificate of tax credit. Taxpayers eligible to claim a credit 25 must report the allocation year directly on their empire state film 26 production credit tax form for each year a credit is claimed and include 27 a copy of the certificate with their tax return. In the case of a quali- 28 fied film that receives funds from additional pool 2, no empire state 29 film production credit shall be claimed before the later of the taxable 30 year the production of the qualified film is complete, or the taxable 31 year immediately following the allocation year for which the film has 32 been allocated credit by the governor's office for motion picture and 33 television development. 34 S 4. Paragraph 1 of subdivision (b) of section 24 of the tax law, as 35 amended by section 6 of part Q of chapter 57 of the laws of 2010, is 36 amended to read as follows: 37 (1) "Qualified production costs" means production costs only to the 38 extent such costs are attributable to the use of tangible property or 39 the performance of services within the state directly and predominantly 40 in the production (including pre-production and post production) of a 41 qualified film[, provided, however, that qualified production costs 42 shall not include post production costs unless the portion of the post 43 production costs paid or incurred that is attributable to the use of 44 tangible property or the performance of services in New York in the 45 production of such qualified film equals or exceeds seventy-five percent 46 of the total post production costs spent within and without New York in 47 the production of such qualified film]. 48 S 5. Paragraph 3 of subdivision (a) of section 31 of the tax law, as 49 added by section 12 of part Q of chapter 57 of the laws of 2010, is 50 amended to read as follows: 51 (3) (I) A taxpayer shall not be eligible for the credit established by 52 this section FOR QUALIFIED POST PRODUCTION COSTS, EXCLUDING THE COSTS 53 FOR VISUAL EFFECTS AND ANIMATION, unless the qualified post production 54 costs, EXCLUDING THE COSTS FOR VISUAL EFFECTS AND ANIMATION, at a quali- 55 fied post production facility meet or exceed seventy-five percent of the 56 total post production costs, EXCLUDING THE COSTS FOR VISUAL EFFECTS AND S. 2609--D 12 A. 3009--D 1 ANIMATION, paid or incurred in the post production of the qualified film 2 at any post production facility. (II) A TAXPAYER SHALL NOT BE ELIGIBLE 3 FOR THE CREDIT ESTABLISHED BY THIS SECTION FOR QUALIFIED POST PRODUCTION 4 COSTS WHICH ARE COSTS FOR VISUAL EFFECTS OR ANIMATION UNLESS THE QUALI- 5 FIED POST PRODUCTION COSTS FOR VISUAL EFFECTS OR ANIMATION AT A QUALI- 6 FIED POST PRODUCTION FACILITY MEET OR EXCEED THREE MILLION DOLLARS OR 7 TWENTY PERCENT OF THE TOTAL POST PRODUCTION COSTS FOR VISUAL EFFECTS OR 8 ANIMATION PAID OR INCURRED IN THE POST PRODUCTION OF A QUALIFIED FILM AT 9 ANY POST PRODUCTION FACILITY, WHICHEVER IS LESS. (III) A TAXPAYER MAY 10 CLAIM A CREDIT FOR QUALIFIED POST PRODUCTION COSTS EXCLUDING THE COSTS 11 FOR VISUAL EFFECTS AND ANIMATION, AND FOR QUALIFIED POST PRODUCTION 12 COSTS OF VISUAL EFFECTS AND ANIMATION, PROVIDED THAT THE CRITERIA IN 13 SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH ARE BOTH SATISFIED. The 14 credit shall be allowed for the taxable year in which the production of 15 such qualified film is completed. 16 S 5-a. Subdivision (a) of section 31 of the tax law, as added by 17 section 12 of part Q of chapter 57 of the laws of 2010, is amended by 18 adding a new paragraph 5 to read as follows: 19 (5) IF THE AMOUNT OF THE CREDIT IS AT LEAST ONE MILLION DOLLARS BUT 20 LESS THAN FIVE MILLION DOLLARS, THE CREDIT SHALL BE CLAIMED OVER A TWO 21 YEAR PERIOD BEGINNING IN THE FIRST TAXABLE YEAR IN WHICH THE CREDIT MAY 22 BE CLAIMED AND IN THE NEXT SUCCEEDING TAXABLE YEAR, WITH ONE-HALF OF THE 23 AMOUNT OF CREDIT ALLOWED BEING CLAIMED IN EACH YEAR. IF THE AMOUNT OF 24 THE CREDIT IS AT LEAST FIVE MILLION DOLLARS, THE CREDIT SHALL BE CLAIMED 25 OVER A THREE YEAR PERIOD BEGINNING IN THE FIRST TAXABLE YEAR IN WHICH 26 THE CREDIT MAY BE CLAIMED AND IN THE NEXT TWO SUCCEEDING TAXABLE YEARS, 27 WITH ONE-THIRD OF THE AMOUNT OF THE CREDIT ALLOWED BEING CLAIMED IN EACH 28 YEAR. 29 S 6. Section 3 of part Y-1 of chapter 57 of the laws of 2009, amending 30 the tax law relating to the empire state film production credit, is 31 amended to read as follows: 32 S 3. A. The governor's office of motion picture and television devel- 33 opment shall file a report on a quarterly basis with the director of the 34 division of the budget and the chairmen of the assembly ways and means 35 committee and senate finance committee. The report shall be filed within 36 fifteen days after the close of the calendar quarter. The first report 37 shall cover the calendar quarter that begins April 1, 2009. The report 38 must contain the following information for the calendar quarter: 39 (1) the total dollar amount of credits allocated during each month of 40 the calendar quarter, broken down by month; 41 (2) the number of film projects which have been allocated tax credits 42 of less than $1 million per project and the total dollar amount of cred- 43 its allocated to those projects; 44 (3) the number of film projects which have been allocated tax credits 45 of $1 million or more but less than $5 million per project and the total 46 dollar amount of credits allocated to those projects; 47 (4) the number of film projects which have been allocated tax credits 48 of $5 million or more per project and the total dollar amount of credits 49 allocated to those projects; [and] 50 (5) a list of each film project which has been allocated a tax credit 51 and for each of those projects (a) the estimated number of employees 52 associated with the project, (b) the estimated qualified costs for the 53 project, [and] (c) the estimated total costs of the project, (D) THE 54 CREDIT-ELIGIBLE MAN HOURS FOR EACH PROJECT; AND (E) TOTAL WAGES FOR SUCH 55 CREDIT-ELIGIBLE MAN HOURS FOR EACH PROJECT; AND S. 2609--D 13 A. 3009--D 1 (6)(A) THE NAME OF EACH TAXPAYER ALLOCATED A TAX CREDIT FOR EACH 2 PROJECT AND THE COUNTY OF RESIDENCE OR INCORPORATION OF SUCH TAXPAYER 3 OR, IF THE TAXPAYER DOES NOT RESIDE OR IS NOT INCORPORATED IN NEW YORK, 4 THEN THE STATE OF RESIDENCE OR INCORPORATION; PROVIDED HOWEVER, IF THE 5 TAXPAYER CLAIMS A TAX CREDIT BECAUSE THE TAXPAYER IS A MEMBER OF A 6 LIMITED LIABILITY COMPANY, A PARTNER IN A PARTNERSHIP OR A SHAREHOLDER 7 IN A SUBCHAPTER S CORPORATION, THE NAME OF EACH LIMITED LIABILITY COMPA- 8 NY, PARTNERSHIP OR SUBCHAPTER S CORPORATION EARNING ANY OF THOSE TAX 9 CREDITS MUST BE INCLUDED IN THE REPORT INSTEAD OF INFORMATION ABOUT THE 10 TAXPAYER CLAIMING THE TAX CREDIT, (B) THE AMOUNT OF TAX CREDIT ALLOCATED 11 TO EACH TAXPAYER; PROVIDED HOWEVER, IF THE TAXPAYER CLAIMS A TAX CREDIT 12 BECAUSE THE TAXPAYER IS A MEMBER OF A LIMITED LIABILITY COMPANY, A PART- 13 NER IN A PARTNERSHIP OR A SHAREHOLDER IN A SUBCHAPTER S CORPORATION, THE 14 AMOUNT OF TAX CREDIT EARNED BY EACH ENTITY MUST BE INCLUDED IN THE 15 REPORT INSTEAD OF INFORMATION ABOUT THE TAXPAYER CLAIMING THE TAX CRED- 16 IT, AND (C) INFORMATION IDENTIFYING THE PROJECT ASSOCIATED WITH EACH 17 TAXPAYER FOR WHICH A TAX CREDIT WAS CLAIMED UNDER SECTION 24 OR SECTION 18 31, AS ADDED BY CHAPTER 57 OF THE LAWS OF 2010, OF THE TAX LAW, INCLUD- 19 ING THE NAME OF THE FILM AND COUNTY IN WHICH THE PROJECT IS LOCATED; AND 20 B. THE GOVERNOR'S OFFICE OF MOTION PICTURE AND TELEVISION DEVELOPMENT 21 SHALL FILE A REPORT ON A BIENNIAL BASIS WITH THE DIRECTOR OF THE DIVI- 22 SION OF THE BUDGET AND THE CHAIRS OF THE ASSEMBLY WAYS AND MEANS COMMIT- 23 TEE AND SENATE FINANCE COMMITTEE. THE REPORT SHALL BE FILED WITHIN 24 FIFTEEN DAYS AFTER THE CLOSE OF THE CALENDAR YEAR. THE FIRST REPORT 25 SHALL COVER A TWO YEAR PERIOD THAT BEGINS ON JANUARY FIRST, TWO THOUSAND 26 THIRTEEN. THE REPORT MUST BE PREPARED BY AN INDEPENDENT THIRD PARTY 27 AUDITOR AND INCLUDE: (1) INFORMATION REGARDING THE EMPIRE STATE FILM 28 PRODUCTION CREDIT AND POST PRODUCTION CREDIT PROGRAMS INCLUDING THE 29 EFFICIENCY OF OPERATIONS, RELIABILITY OF FINANCIAL REPORTING, COMPLIANCE 30 WITH LAWS AND REGULATIONS AND DISTRIBUTION OF ASSETS AND FUNDS; (2) AN 31 ECONOMIC IMPACT STUDY PREPARED BY AN INDEPENDENT THIRD PARTY OF THE FILM 32 CREDIT PROGRAMS; AND (3) ANY OTHER INFORMATION AND/OR OTHER STATISTICAL 33 INFORMATION THAT THE COMMISSIONER OF ECONOMIC DEVELOPMENT DEEMS TO BE 34 USEFUL IN ANALYZING THE EFFECTS OF THE PROGRAM. 35 S 7. Subdivision (a) of section 24 of the tax law is amended by adding 36 a new paragraph 5 to read as follows: 37 (5) FOR THE PERIOD TWO THOUSAND FIFTEEN THROUGH TWO THOUSAND NINETEEN, 38 IN ADDITION TO THE AMOUNT OF CREDIT ESTABLISHED IN PARAGRAPH TWO OF THIS 39 SUBDIVISION, A TAXPAYER SHALL BE ALLOWED A CREDIT EQUAL TO THE PRODUCT 40 (OR PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF A MEMBER OF A PARTNER- 41 SHIP) OF TEN PERCENT AND THE AMOUNT OF WAGES OR SALARIES PAID TO INDI- 42 VIDUALS DIRECTLY EMPLOYED (EXCLUDING THOSE EMPLOYED AS WRITERS, DIREC- 43 TORS, MUSIC DIRECTORS, PRODUCERS AND PERFORMERS, INCLUDING BACKGROUND 44 ACTORS WITH NO SCRIPTED LINES) BY A QUALIFIED FILM PRODUCTION COMPANY OR 45 A QUALIFIED INDEPENDENT FILM PRODUCTION COMPANY FOR SERVICES PERFORMED 46 BY THOSE INDIVIDUALS IN ONE OF THE COUNTIES SPECIFIED IN THIS PARAGRAPH 47 IN CONNECTION WITH A QUALIFIED FILM WITH A MINIMUM BUDGET OF FIVE 48 HUNDRED THOUSAND DOLLARS. FOR PURPOSES OF THIS ADDITIONAL CREDIT, THE 49 SERVICES MUST BE PERFORMED IN ONE OR MORE OF THE FOLLOWING COUNTIES: 50 ALLEGANY, BROOME, CATTARAUGUS, CAYUGA, CHAUTAUQUA, CHEMUNG, CHENANGO, 51 CLINTON, CORTLAND, DELAWARE, ERIE, ESSEX, FRANKLIN, FULTON, GENESEE, 52 HAMILTON, HERKIMER, JEFFERSON, LEWIS, LIVINGSTON, MADISON, MONROE, MONT- 53 GOMERY, NIAGARA, ONEIDA, ONONDAGA, ONTARIO, ORLEANS, OSWEGO, OTSEGO, 54 SCHOHARIE, SCHUYLER, SENECA, ST. LAWRENCE, STEUBEN, TIOGA, TOMPKINS, 55 WAYNE, WYOMING, OR YATES. THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED 56 PURSUANT TO THE AUTHORITY OF THIS PARAGRAPH SHALL BE FIVE MILLION S. 2609--D 14 A. 3009--D 1 DOLLARS EACH YEAR DURING THE PERIOD TWO THOUSAND FIFTEEN THROUGH TWO 2 THOUSAND NINETEEN OF THE ANNUAL ALLOCATION MADE AVAILABLE TO THE PROGRAM 3 PURSUANT TO PARAGRAPH FOUR OF SUBDIVISION (E) OF THIS SECTION. SUCH 4 AGGREGATE AMOUNT OF CREDITS SHALL BE ALLOCATED BY THE GOVERNOR'S OFFICE 5 FOR MOTION PICTURE AND TELEVISION DEVELOPMENT AMONG TAXPAYERS IN ORDER 6 OF PRIORITY BASED UPON THE DATE OF FILING AN APPLICATION FOR ALLOCATION 7 OF FILM PRODUCTION CREDIT WITH SUCH OFFICE. IF THE TOTAL AMOUNT OF ALLO- 8 CATED CREDITS APPLIED FOR UNDER THIS PARAGRAPH IN ANY YEAR EXCEEDS THE 9 AGGREGATE AMOUNT OF TAX CREDITS ALLOWED FOR SUCH YEAR UNDER THIS PARA- 10 GRAPH, SUCH EXCESS SHALL BE TREATED AS HAVING BEEN APPLIED FOR ON THE 11 FIRST DAY OF THE NEXT YEAR. IF THE TOTAL AMOUNT OF ALLOCATED TAX CRED- 12 ITS APPLIED FOR UNDER THIS PARAGRAPH AT THE CONCLUSION OF ANY YEAR IS 13 LESS THAN FIVE MILLION DOLLARS, THE REMAINDER SHALL BE TREATED AS PART 14 OF THE ANNUAL ALLOCATION MADE AVAILABLE TO THE PROGRAM PURSUANT TO PARA- 15 GRAPH FOUR OF SUBDIVISION (E) OF THIS SECTION. HOWEVER, IN NO EVENT MAY 16 THE TOTAL OF THE CREDITS ALLOCATED UNDER THIS PARAGRAPH AND THE CREDITS 17 ALLOCATED UNDER PARAGRAPH FIVE OF SUBDIVISION (A) OF SECTION THIRTY-ONE 18 OF THIS ARTICLE EXCEED FIVE MILLION DOLLARS IN ANY YEAR DURING THE PERI- 19 OD TWO THOUSAND FIFTEEN THROUGH TWO THOUSAND NINETEEN. 20 S 8. Subdivision (a) of section 31 of the tax law, as added by section 21 12 of Part Q of chapter 57 of the laws of 2010, is amended by adding a 22 new paragraph 5 to read as follows: 23 (5) FOR THE PERIOD TWO THOUSAND FIFTEEN THROUGH TWO THOUSAND NINETEEN, 24 IN ADDITION TO THE AMOUNT OF CREDIT ESTABLISHED IN PARAGRAPH TWO OF 25 SUBDIVISION (A) OF THIS SECTION, A TAXPAYER SHALL BE ALLOWED A CREDIT 26 EQUAL TO THE PRODUCT (OR PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF A 27 MEMBER OF A PARTNERSHIP) OF TEN PERCENT AND THE AMOUNT OF WAGES OR SALA- 28 RIES PAID TO INDIVIDUALS DIRECTLY EMPLOYED (EXCLUDING THOSE EMPLOYED AS 29 WRITERS, DIRECTORS, MUSIC DIRECTORS, PRODUCERS AND PERFORMERS, INCLUDING 30 BACKGROUND ACTORS WITH NO SCRIPTED LINES) FOR SERVICES PERFORMED BY 31 THOSE INDIVIDUALS IN ONE OF THE COUNTIES SPECIFIED IN THIS PARAGRAPH IN 32 CONNECTION WITH THE POST PRODUCTION WORK ON A QUALIFIED FILM WITH A 33 MINIMUM BUDGET OF FIVE HUNDRED THOUSAND DOLLARS AT A QUALIFIED POST 34 PRODUCTION FACILITY IN ONE OF THE COUNTIES LISTED IN THIS PARAGRAPH. FOR 35 PURPOSES OF THIS ADDITIONAL CREDIT, THE SERVICES MUST BE PERFORMED IN 36 ONE OR MORE OF THE FOLLOWING COUNTIES: ALLEGANY, BROOME, CATTARAUGUS, 37 CAYUGA, CHAUTAUQUA, CHEMUNG, CHENANGO, CLINTON, CORTLAND, DELAWARE, 38 ERIE, ESSEX, FRANKLIN, FULTON, GENESEE, HAMILTON, HERKIMER, JEFFERSON, 39 LEWIS, LIVINGSTON, MADISON, MONROE, MONTGOMERY, NIAGARA, ONEIDA, ONONDA- 40 GA, ONTARIO, ORLEANS, OSWEGO, OTSEGO, SCHOHARIE, SCHUYLER, SENECA, ST. 41 LAWRENCE, STEUBEN, TIOGA, TOMPKINS, WAYNE, WYOMING, OR YATES. THE AGGRE- 42 GATE AMOUNT OF TAX CREDITS ALLOWED PURSUANT TO THE AUTHORITY OF THIS 43 PARAGRAPH SHALL BE FIVE MILLION DOLLARS EACH YEAR DURING THE PERIOD TWO 44 THOUSAND FIFTEEN THROUGH TWO THOUSAND NINETEEN OF THE ANNUAL ALLOCATION 45 MADE AVAILABLE TO THE EMPIRE STATE FILM POST PRODUCTION CREDIT PURSUANT 46 TO PARAGRAPH FOUR OF SUBDIVISION (E) OF SECTION TWENTY-FOUR OF THIS 47 ARTICLE. SUCH AGGREGATE AMOUNT OF CREDITS SHALL BE ALLOCATED BY THE 48 GOVERNOR'S OFFICE FOR MOTION PICTURE AND TELEVISION DEVELOPMENT AMONG 49 TAXPAYERS IN ORDER OF PRIORITY BASED UPON THE DATE OF FILING AN APPLICA- 50 TION FOR ALLOCATION OF POST PRODUCTION CREDIT WITH SUCH OFFICE. IF THE 51 TOTAL AMOUNT OF ALLOCATED CREDITS APPLIED FOR UNDER THIS PARAGRAPH IN 52 ANY YEAR EXCEEDS THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED FOR SUCH 53 YEAR UNDER THIS PARAGRAPH, SUCH EXCESS SHALL BE TREATED AS HAVING BEEN 54 APPLIED FOR ON THE FIRST DAY OF THE NEXT YEAR. IF THE TOTAL AMOUNT OF 55 ALLOCATED TAX CREDITS APPLIED FOR UNDER THIS PARAGRAPH AT THE CONCLUSION 56 OF ANY YEAR IS LESS THAN FIVE MILLION DOLLARS, THE REMAINDER SHALL BE S. 2609--D 15 A. 3009--D 1 TREATED AS PART OF THE ANNUAL ALLOCATION FOR TWO THOUSAND SEVENTEEN MADE 2 AVAILABLE TO THE EMPIRE STATE FILM POST PRODUCTION CREDIT PURSUANT TO 3 PARAGRAPH FOUR OF SUBDIVISION (E) OF SECTION TWENTY FOUR OF THIS ARTI- 4 CLE. HOWEVER, IN NO EVENT MAY THE TOTAL OF THE CREDITS ALLOCATED UNDER 5 THIS PARAGRAPH AND THE CREDITS ALLOCATED UNDER PARAGRAPH FIVE OF SUBDI- 6 VISION (A) OF SECTION TWENTY-FOUR OF THIS ARTICLE EXCEED FIVE MILLION 7 DOLLARS IN ANY YEAR DURING THE PERIOD TWO THOUSAND FIFTEEN THROUGH TWO 8 THOUSAND NINETEEN. 9 S 9. This act shall take effect immediately, provided, however, that 10 sections four and five of this act shall apply to (a) taxpayers submit- 11 ting initial applications to the governor's office of motion picture and 12 television development on or after the date this act shall have become a 13 law, and (b) to taxpayers who filed an initial application before this 14 act shall have become a law but who have not yet submitted a final 15 application to the governor's office of motion picture and television 16 development on or before the date this act shall have become a law, 17 provided such taxpayers agree to have the amendments made to section 3 18 of part Y-1 of chapter 57 of the laws of 2009, amending the tax law 19 relating to the empire state film production credit, which added a new 20 paragraph 6 to subdivision (a) of such section 3 apply to them; and the 21 amendments made to section 3 of part Y-1 of chapter 57 of the laws of 22 2009, amending the tax law relating to the empire state film production 23 credit, with the exception of subdivision b of such section, shall only 24 apply to taxpayers submitting initial applications to the governor's 25 office of motion picture and television development on or after the date 26 this act shall become a law. 27 PART C 28 Section 1. Section 1 of chapter 174 of the laws of 1968 constituting 29 the urban development corporation act is amended by adding a new section 30 16-v to read as follows: 31 S 16-V. NEW YORK STATE BUSINESS INCUBATOR AND INNOVATION HOT SPOT 32 SUPPORT ACT. 1. (A) THE CORPORATION IS AUTHORIZED, WITHIN AVAILABLE 33 APPROPRIATIONS, TO ISSUE REQUESTS FOR PROPOSALS ONCE PER FISCAL YEAR TO 34 PROVIDE GRANTS PURSUANT TO SUBDIVISIONS FIVE AND SIX OF THIS SECTION FOR 35 THE PURPOSES ESTABLISHED UNDER THIS ACT. THE CORPORATION MAY DESIGNATE 36 ENTITIES, WHICH UPON APPLICATION MEET THE REQUIREMENTS OF SUBDIVISION 37 TWO OF THIS SECTION AS NEW YORK STATE INCUBATORS, AND MAY PROVIDE GRANTS 38 AND ASSISTANCE AS PROVIDED UNDER SUBDIVISIONS FIVE AND SIX OF THIS 39 SECTION TO SUCH DESIGNATED ENTITIES. "NEW YORK STATE INCUBATOR" SHALL 40 MEAN A BUSINESS INCUBATION PROGRAM WHICH ALSO PROVIDES PHYSICAL SPACE OR 41 WHICH IS A VIRTUAL INCUBATION PROGRAM THAT HAS BEEN DESIGNATED UPON 42 APPLICATION BY THE CORPORATION AS A NEW YORK STATE INCUBATOR PURSUANT TO 43 SUBDIVISIONS TWO AND THREE OF THIS SECTION AND WHICH THEREBY BECOMES 44 ELIGIBLE FOR BENEFITS, SUPPORT, SERVICES, AND PROGRAMS AVAILABLE PURSU- 45 ANT TO SUCH DESIGNATION. PROVIDED HOWEVER, THAT VIRTUAL INCUBATORS WHICH 46 PROVIDE ASSISTANCE TO ELIGIBLE BUSINESSES NOT IN RESIDENCE IN ONE PHYS- 47 ICAL LOCATION, SHALL SUBMIT A PLAN OF OPERATION WHICH SETS FORTH THE 48 MAXIMUM NUMBER OF ELIGIBLE BUSINESSES TO BE SERVED AND THEIR GEOGRAPHIC 49 DISTRIBUTION. 50 (B) FROM AMONG THE QUALIFIED "NEW YORK STATE INCUBATORS", THE CORPO- 51 RATION IS FURTHER AUTHORIZED, WITHIN AVAILABLE APPROPRIATIONS, TO DESIG- 52 NATE APPLICANTS AS "NEW YORK STATE INNOVATION HOT SPOTS." AN INCUBATOR 53 RECEIVING A "NEW YORK STATE INNOVATION HOT SPOT" DESIGNATION SHALL BE 54 ELIGIBLE FOR THE BENEFITS UNDER SECTION THIRTY-EIGHT OF THE TAX LAW, S. 2609--D 16 A. 3009--D 1 SUBPARAGRAPH EIGHTEEN OF PARAGRAPH (A) OF SUBDIVISION NINE OF SECTION 2 TWO HUNDRED EIGHT OF THE TAX LAW, SUBDIVISION ELEVEN OF SECTION TWO 3 HUNDRED NINE OF THE TAX LAW, PARAGRAPH THIRTY-NINE OF SUBSECTION (C) OF 4 SECTION SIX HUNDRED TWELVE OF THE TAX LAW, PARAGRAPH ONE OF SUBDIVISION 5 (D) OF SECTION ONE THOUSAND ONE HUNDRED NINETEEN OF THE TAX LAW, AND 6 PARAGRAPH THIRTY-FIVE OF SUBDIVISION (C) OF SECTION 11-1712 OF THE 7 ADMINISTRATIVE CODE OF THE CITY OF NEW YORK. 8 2. REQUIREMENTS FOR DESIGNATION. (A) AN ENTITY WISHING TO BE DESIG- 9 NATED AS A NEW YORK STATE INNOVATION HOT SPOT OR AS A NEW YORK STATE 10 INCUBATOR PURSUANT TO THIS SECTION SHALL BE LOCATED IN NEW YORK STATE 11 AND SHALL HAVE BEEN IN EXISTENCE OR OTHERWISE IN OPERATION FOR A PERIOD 12 OF AT LEAST THREE FISCAL YEARS PRIOR TO THE CURRENT FISCAL YEAR, OR 13 DEMONSTRATE CONTINUITY OF STAFFING, PROGRAM, AND PURPOSE SHOWING CONTIN- 14 UATION THROUGH ANOTHER AUSPICE OR GOVERNING ENTITY, AND SHALL HAVE 15 DEMONSTRATED A CONNECTION TO REGIONAL SOURCES OF INNOVATION AND EXPER- 16 TISE, AND THAT IT MEETS THE GOALS OF CREATING JOBS AND INCUBATING BUSI- 17 NESSES WITH SURVIVAL RATES IN EXCESS OF AVERAGE STARTUPS, AND THAT THE 18 PROGRAM HAS A STRATEGIC PLAN TO CONTINUE TO MEET SUCH GOALS FOR THE 19 THREE YEARS SUCCEEDING DESIGNATION AND THAT COMMITS THE PROGRAM TO 20 IMPLEMENTING BEST PRACTICES. SUCH DEMONSTRATION SHALL INCLUDE A COMMIT- 21 MENT BY THE SPONSOR TO CONTINUE TO MAINTAIN THE PROGRAM FOR AT LEAST 22 THREE YEARS AFTER SUCH DESIGNATION, AND TO PROVIDE ANY REPORTING INFOR- 23 MATION THAT THE CORPORATION SHALL REQUIRE. 24 (B) IN DETERMINING WHETHER AN ENTITY SHALL BE DESIGNATED AS A NEW YORK 25 STATE INNOVATION HOT SPOT OR NEW YORK STATE INCUBATOR, THE CORPORATION 26 SHALL REQUIRE THAT THE ENTITY MEET THE REQUIREMENTS OF SUBPARAGRAPHS (I) 27 AND (II) OF THIS PARAGRAPH AND MAY CONSIDER WHETHER THE ENTITY HAS 28 DEVELOPED THE PROGRAMS, SERVICES, AND ATTRIBUTES IN SUBPARAGRAPHS (III) 29 THROUGH (XVI) OF THIS PARAGRAPH: 30 (I) INSTITUTIONAL STABILITY AND LONG TERM VIABILITY, INDICATED BY: 31 THE SPONSOR'S COMMITMENT TO FINANCIALLY AND PROGRAMMATICALLY MAINTAINING 32 THE INCUBATOR FOR AT LEAST TWO YEARS IN ADDITION TO THE CURRENT FISCAL 33 YEAR; RECEIPT OF NON-STATE PUBLIC AND PRIVATE GRANT AND/OR OTHER REVENUE 34 SOURCES INCLUDING PROPERTY RENTALS AND PROGRAM FEES THAT ARE OR HAVE 35 PROVEN TO BE PREDICTABLE AND RELIABLE; AND MANAGEABLE DEBT SERVICE; 36 (II) A STRATEGIC PLAN THAT DESCRIBES THE IMPACT ON THE REGIONAL ENTRE- 37 PRENEURIAL ENVIRONMENT THAT THE INCUBATOR IS INTENDED TO HAVE AND 38 COMMITS THE INCUBATOR TO BEST INCUBATION PRACTICES AND DESCRIBES A 39 DEFINED PROCESS THAT ACCELERATES COMMERCIALIZATION AND DEVELOPMENT FOR A 40 CLIENT COMPANY OR ENTITY THROUGH PROVISION OF TECHNICAL ASSISTANCE, 41 DIRECT MENTORSHIP, ENTREPRENEURIAL EDUCATION, AND BUSINESS DEVELOPMENT 42 SERVICES, INCLUDING DEVELOPMENT OF A BUSINESS PLAN AND MARKETS, AID IN 43 DEVELOPMENT OF THE MANAGEMENT TEAM, PRODUCT, CUSTOMERS, AND LOCAL OR 44 REGIONAL SUPPLY CHAIN PARTNERS, ACCESS TO INVESTMENT, AND LAUNCHING OF A 45 SUCCESSFUL BUSINESS WHICH WILL EMPLOY NEW YORKERS; 46 (III) AN INTEGRATED ARRAY OF SERVICES WHICH INCLUDES MANAGEMENT GUID- 47 ANCE, TECHNICAL ASSISTANCE, CONSULTING, MENTORING, BUSINESS PLAN DEVEL- 48 OPMENT, AID IN CREATION OF THE BUSINESS ENTITY, AND ONGOING COUNSELING; 49 (IV) OPPORTUNITIES FOR CLIENTS TO NETWORK, COLLABORATE WITH OTHER 50 BUSINESS PROGRAMS, AND GAIN ACCESS TO SERVICES, INCLUDING THROUGH SUCH 51 PROGRAMS AS THE SMALL BUSINESS DEVELOPMENT CENTER, THE LOCAL OR AREA 52 CHAMBER OF COMMERCE OR OTHER BUSINESS ASSOCIATION, PROGRAMS OF THE SMALL 53 BUSINESS ADMINISTRATION, AND/OR OTHER SIMILAR BUSINESS ORGANIZATIONS, 54 ASSOCIATIONS, AND PROGRAMS; 55 (V) ACCESS TO CAPITAL VIA REFERRAL OR OTHER ARRANGEMENTS WITH FINAN- 56 CIAL INSTITUTIONS, VENTURE CAPITALISTS, ANGEL INVESTORS, INVESTMENT S. 2609--D 17 A. 3009--D 1 FUNDS MANAGED OR FINANCED BY PRIVATE ENTITIES OR STATE OR LOCAL ECONOMIC 2 DEVELOPMENT ORGANIZATIONS, OR OTHER SIMILAR OR EQUIVALENT CAPITAL SOURC- 3 ES, EVIDENCED BY WRITTEN AGREEMENTS, MEMORANDUMS OF UNDERSTANDING, 4 LETTERS OF INTENT, OR OTHER ENDORSEMENTS ACCEPTABLE TO THE CORPORATION, 5 AND INCLUDING READYING CLIENTS FOR FINANCIAL MEETINGS AND INTERVIEWS; 6 (VI) AID IN ACCESSING MARKETS, VIA BID ASSISTANCE OR ACCESS PROGRAMS 7 THAT MAY INCLUDE BUT ARE NOT LIMITED TO LITERATURE REVIEW, ESTABLISHMENT 8 OF A RESOURCE DOCUMENTS ROOM (PHYSICAL OR VIRTUAL), OPPORTUNITY NOTIFI- 9 CATION OF LOCAL, STATE, AND FEDERAL GOVERNMENTAL AND PRIVATE OPPORTU- 10 NITIES, AND IDENTIFICATION OF AND INTRODUCTIONS TO POTENTIAL FIRST 11 CUSTOMERS; 12 (VII) PHYSICAL OFFICE SPACE AND/OR LABORATORY SPACE AND/OR MANUFACTUR- 13 ING SPACE UNDER A WRITTEN AGREEMENT FOR A PERIOD NOT TO EXCEED FIVE 14 YEARS FOR ANY INDIVIDUAL INCUBATOR CLIENT; 15 (VIII) POLICIES REQUIRING PARTICIPATION BY CLIENTS IN THE INCUBATOR 16 PROGRAM, INCLUDING DISQUALIFICATION OR SUSPENSION FROM THE PROGRAM FOR 17 FAILURE TO PARTICIPATE; 18 (IX) CRITERIA FOR ACCEPTANCE AND GRADUATION FROM THE PROGRAM OR PHYS- 19 ICAL SPACE, AND TERMS AND CONDITIONS FOR ONGOING RELATIONSHIPS, IF ANY, 20 BETWEEN THE INCUBATOR AND THE CLIENT; 21 (X) AT LEAST FIFTY PERCENT OF THE TOTAL INCUBATOR BUDGET PROVIDED FROM 22 SOURCES OTHER THAN TENANT RENTS AND FEES AND IN-KIND SUPPORT FROM THE 23 SPONSORING ENTITY, AND MUST BE FROM SOURCES OTHER THAN NEW YORK STATE 24 GOVERNMENT AGENCIES; 25 (XI) AN INDEPENDENT ADVISORY COUNCIL OR SIMILAR BODY THAT INCLUDES ONE 26 OR MORE EXECUTIVE OFFICERS OF FIRMS THAT HAVE GRADUATED FROM THE INCUBA- 27 TOR, LOCAL ECONOMIC DEVELOPMENT PROFESSIONALS, AND INDIVIDUALS WITH 28 BUSINESS AND TECHNOLOGY EXPERTISE IN AREAS APPROPRIATE TO THE SECTOR OR 29 CONCENTRATION OF CLIENTS, AND THE MISSION AND GOAL OF THE INCUBATOR; 30 (XII) A PROFESSIONAL MANAGEMENT AND SERVICE DELIVERY TEAM WITH EXPERI- 31 ENCE, EXPERTISE, OR CREDENTIALS IN MANAGEMENT, ENTREPRENEURSHIP, BUSI- 32 NESS DEVELOPMENT, OR OTHER EQUIVALENT AREAS; 33 (XIII) ACCESS BY CLIENTS TO MENTORING, ADVISORY, OR EDUCATIONAL 34 SERVICES, INCLUDING CLASSROOM TEACHING, FROM INDIVIDUALS WHO HAVE 35 SUCCESSFULLY CREATED, GROWN OR MANAGED BUSINESSES OR ARE LAWYERS, 36 PROFESSIONAL ACCOUNTANTS, OR INDIVIDUALS WHO HAVE BEEN IN BUSINESS AT AN 37 EXECUTIVE LEVEL FOR AT LEAST FIVE YEARS; 38 (XIV) EVIDENCE THAT THE INCUBATOR IS A CENTER OF ENTREPRENEURIAL 39 ACTIVITIES OF A CITY, REGION, OR DISTRESSED PORTION THEREOF, AS DOCU- 40 MENTED BY PROGRAMS AND ACTIVITIES COORDINATED WITH COUNTY OR LOCAL 41 ECONOMIC DEVELOPMENT ORGANIZATIONS, INVESTOR AND FINANCIAL CLUBS OR 42 INSTITUTIONS, OR STUDENT OR YOUTH-ORIENTED ENTREPRENEURIAL ACTIVITIES; 43 (XV) A PARTNERSHIP WITH OTHER INCUBATORS IN THE REGION TO OFFER 44 SERVICES AND OPPORTUNITIES FOR ENTREPRENEURS AND LEVERAGE REGIONAL 45 ECONOMIC DEVELOPMENT ASSETS; AND 46 (XVI) A PLAN TO RECRUIT MINORITY- AND WOMEN-OWNED BUSINESSES FOR 47 LOCATION AND PARTICIPATION WITH THE INCUBATOR PROGRAM. 48 (C) THE CORPORATION, SUBJECT TO APPROPRIATIONS PROVIDED FOR THIS 49 PURPOSE, MAY APPROVE AND DESIGNATE FIVE NEW YORK STATE INCUBATOR HOT 50 SPOTS IN FISCAL YEAR TWO THOUSAND THIRTEEN-TWO THOUSAND FOURTEEN AND 51 FIVE ADDITIONAL NEW YORK STATE INNOVATION HOT SPOTS IN FISCAL YEAR TWO 52 THOUSAND FOURTEEN-TWO THOUSAND FIFTEEN. SUCH DESIGNEES WILL BE REQUIRED 53 TO DEMONSTRATE AN AFFILIATION WITH AND THE APPLICATION SUPPORT OF AT 54 LEAST ONE COLLEGE, UNIVERSITY OR INDEPENDENT RESEARCH INSTITUTION, AND 55 THAT ITS PROGRAMS AND PURPOSES ARE CONSISTENT WITH REGIONAL ECONOMIC 56 DEVELOPMENT STRATEGIES. S. 2609--D 18 A. 3009--D 1 3. DESIGNATION. (A) THE CORPORATION MAY DESIGNATE APPLICANTS THAT MEET 2 THE REQUIREMENTS OF SUBDIVISION TWO OF THIS SECTION AS NEW YORK STATE 3 INNOVATION HOT SPOTS OR AS NEW YORK STATE INCUBATORS. 4 (B) AS A CONDITION OF MAINTAINING DESIGNATION, EACH INCUBATOR SHALL 5 ANNUALLY SUBMIT TO THE CORPORATION IN A MANNER AND ACCORDING TO A SCHED- 6 ULE ESTABLISHED BY THE CORPORATION: 7 (I) UPDATED INFORMATION REQUESTED BY THE CORPORATION PURSUANT TO 8 SUBPARAGRAPH (III) OF PARAGRAPH (A) OF SUBDIVISION TWO OF THIS SECTION; 9 (II) ITS STRATEGIC PLAN, AS UPDATED ALONG WITH A BRIEF DESCRIPTION OF 10 ITS SUCCESS IN MEETING THE GOALS OF ITS STRATEGIC PLAN; 11 (III) A STATEMENT THAT THE ITEMS LISTED IN PARAGRAPH (B) OF SUBDIVI- 12 SION TWO OF THIS SECTION AND, IN THE CASE OF NEW YORK STATE INNOVATION 13 HOT SPOTS, PARAGRAPH (C) OF SUBDIVISION TWO OF THIS SECTION ARE STILL 14 APPLICABLE TO THE OPERATIONS OF THE INCUBATOR, OR ANY CHANGE IN APPLICA- 15 BILITY; 16 (IV) A LIST OF BUSINESS ENTERPRISES SERVED BY THE INCUBATOR, AND IN 17 THE CASE OF NEW YORK STATE INNOVATION HOT SPOTS, THOSE CLIENTS CERTIFIED 18 AS A "QUALIFIED ENTITY" ELIGIBLE FOR TAX INCENTIVES UNDER SECTION THIR- 19 TY-EIGHT OF THE TAX LAW; AND 20 (V) SUCH ADDITIONAL INFORMATION AS THE CORPORATION MAY REQUIRE. 21 (C) THE CORPORATION SHALL DESIGN SIMPLIFIED FORMS TO AID IN THE 22 SUBMISSION OF THE DATA REQUIRED IN THIS SUBDIVISION, WHICH MAY BE 23 SUBMITTED ELECTRONICALLY. SUCH FORMS SHALL STATE THE PURPOSES OF THE 24 REQUIRED DATA SUBMISSIONS. 25 (D) THE CORPORATION SHALL EVALUATE THE OPERATIONS OF THE NEW YORK 26 STATE INNOVATION HOT SPOT OR THE NEW YORK STATE INCUBATOR USING METHODS 27 INCLUDING BUT NOT LIMITED TO SITE VISITS, REPORTS PURSUANT TO SPECIFIED 28 INFORMATION, AND REVIEW EVALUATIONS. IF THE CORPORATION IS UNSATISFIED 29 WITH THE PROGRESS OF A NEW YORK STATE INNOVATION HOT SPOT OR A NEW YORK 30 STATE INCUBATOR, THE CORPORATION SHALL NOTIFY SUCH INCUBATOR OF THE 31 RESULTS OF ITS EVALUATIONS AND THE FINDINGS OF DEFICIENCIES IN THE 32 INCUBATOR'S OPERATIONS AND SHALL ALLOW SUCH INCUBATOR TO REMEDY SUCH 33 FINDINGS IN A TIMELY MANNER. FOR NEW YORK STATE INNOVATION HOT SPOTS OR 34 NEW YORK STATE INCUBATORS THAT RECEIVE OPERATING GRANTS PURSUANT TO 35 PARAGRAPH (A) OF SUBDIVISION FIVE OF THIS SECTION, SUCH EVALUATIONS 36 SHALL INCLUDE INDEPENDENT PEER REVIEW AND SHALL TAKE PLACE NO LESS THAN 37 ONCE EVERY THREE YEARS OR MORE FREQUENTLY AT THE DISCRETION OF THE 38 CORPORATION. SUCH INDEPENDENT PEER REVIEW SHALL RESULT IN A WRITTEN 39 REPORT THAT INCLUDES PROGRAMMATIC AND FISCAL EVALUATION OF THE INCU- 40 BATION PROGRAM AND RECOMMENDATIONS FOR IMPROVEMENT. 41 4. AUDIT. THE CORPORATION SHALL HAVE THE AUTHORITY TO AUDIT NEW YORK 42 INNOVATION HOT SPOTS, NEW YORK STATE INCUBATORS AND CLIENTS DESIGNATED 43 BY SUCH HOT SPOTS AS QUALIFIED ENTITIES. 44 5. GRANTS. (A) OPERATING GRANTS. A PROGRAM DESIGNATED AS A NEW YORK 45 STATE INNOVATION HOT SPOT OR AS A NEW YORK STATE INCUBATOR SHALL BE 46 ELIGIBLE FOR AN OPERATING GRANT IN AN AMOUNT TO BE DETERMINED BY THE 47 CORPORATION FROM FUNDS APPROPRIATED TO THE CORPORATION FOR SUCH PURPOSE, 48 PROVIDED HOWEVER THAT: 49 (I) ANY SUCH GRANT SHALL BE MATCHED ON A TWO-TO-ONE BASIS BY THE 50 INSTITUTION RECEIVING THE FUNDS AND COLLABORATIVE PARTNERS IN THE FORM 51 OF CASH OR IN-KIND PERSONNEL, EQUIPMENT, MATERIAL DONATIONS, AND OTHER 52 FACILITY AND OPERATIONS EXPENDITURES, PROVIDED THAT NO MORE THAN FIFTY 53 PERCENT OF SUCH MATCH SHALL BE IN-KIND; 54 (II) A PROGRAM APPLYING FOR A GRANT SHALL DEMONSTRATE FINANCIAL 55 STABILITY AND LONG TERM VIABILITY, AS PROVIDED IN SUBPARAGRAPH (I) OF 56 PARAGRAPH (B) OF SUBDIVISION TWO OF THIS SECTION; S. 2609--D 19 A. 3009--D 1 (III) A GRANT RECIPIENT SHALL AGREE TO PROVIDE DATA AS REQUIRED TO THE 2 CORPORATION AND SHALL AGREE TO CONFORM TO BEST PRACTICES AS OUTLINED BY 3 STATE AND/OR NATIONAL BUSINESS INCUBATOR ASSOCIATIONS; 4 (IV) FAILURE TO ABIDE BY THE REQUIREMENTS OF THIS SUBDIVISION OR TO 5 CURE A DEFAULT AFTER REVIEW AND AGREEMENT WITH THE CORPORATION SHALL 6 RESULT IN LOSS OF THE GRANT AND DISQUALIFICATION OF THE DESIGNEE AS A 7 NEW YORK STATE INNOVATION HOT SPOT OR AS A NEW YORK STATE INCUBATOR; AND 8 (V) PROVIDED THAT A PORTION OF THE GRANTS SHALL BE AWARDED TO THE NEW 9 YORK STATE INNOVATION HOT SPOTS AND THE NEW YORK STATE INCUBATORS. 10 (B) THE CORPORATION SHALL MAKE ENTITIES DESIGNATED AS NEW YORK STATE 11 INNOVATION HOT SPOTS OR AS NEW YORK STATE INCUBATORS AWARE OF OPPORTU- 12 NITIES FOR FUNDING OR GRANTS BY OR THROUGH THE CORPORATION OR THE 13 DEPARTMENT OF ECONOMIC DEVELOPMENT. 14 (C) NO DEDUCTION. IN ADDITION TO THE FOREGOING REQUIREMENTS, AN INCU- 15 BATOR SPONSOR SHALL AGREE TO DEDICATE ALL FUNDS FROM ANY GRANTS OR 16 SUPPORT RECEIVED PURSUANT TO THIS SUBDIVISION TO THE OPERATIONS OF THE 17 INCUBATOR WITHOUT DEDUCTIONS FOR OVERHEAD, INDIRECT COSTS, OR FACILITIES 18 AND ADMINISTRATION CHARGES OF SUCH SPONSOR. 19 6. OTHER ASSISTANCE. THE CORPORATION SHALL MAKE SUCH OTHER AID, 20 ASSISTANCE, AND RESOURCES AVAILABLE TO NEW YORK STATE INNOVATION HOT 21 SPOTS AND NEW YORK STATE INCUBATORS AND THEIR CLIENTS AS IT SHALL DEEM 22 USEFUL AND APPROPRIATE FOR THE FURTHERANCE OF THE PURPOSES OF THIS ACT, 23 INCLUDING WITHOUT LIMITATION TECHNICAL ASSISTANCE, AID IN MARKETING, AID 24 IN REACHING AND PROVIDING ENTREPRENEURSHIP TRAINING OPPORTUNITIES TO 25 SUCH MARGINALIZED GROUPS AS THOSE COMPOSED OF INDIVIDUALS WHO ARE MINOR- 26 ITY, FEMALE, DISABLED, OR POOR, AND OTHERS, CURRICULUM DEVELOPMENT, AND 27 OTHER SERVICES AND RESOURCES. THE CORPORATION SHALL ALSO SEEK ASSISTANCE 28 FROM OTHER STATE AGENCIES IN THE DEVELOPMENT OF PROCUREMENT AND MARKET- 29 ING RESOURCES AND TRAINING OPPORTUNITIES FOR NEW YORK STATE INNOVATION 30 HOT SPOTS AND NEW YORK STATE INCUBATORS AND THEIR CLIENTS. 31 7. ASSOCIATION OF INCUBATORS. THE CORPORATION MAY CONSULT WITH A 32 STATEWIDE ENTITY WHICH IS A MEMBERSHIP ASSOCIATION OF INCUBATORS AND 33 OTHERS AND WHICH HAS EXPERTISE IN PROVIDING SERVICES TO INCUBATORS FOR 34 THE PURPOSE OF PROVIDING SERVICES TO ENTITIES DESIGNATED AS NEW YORK 35 STATE INNOVATION HOT SPOTS AND NEW YORK STATE INCUBATORS AND TO ENTITIES 36 SEEKING TO APPLY OR APPLYING TO BECOME NEW YORK STATE INNOVATION HOT 37 SPOTS AND NEW YORK STATE INCUBATORS OR WHICH OTHERWISE ARE INCLUDED AS 38 RECIPIENTS OF SERVICES PURSUANT TO THIS SECTION. SUCH SERVICES SHALL 39 INCLUDE ADVISING CONCERNING BEST PRACTICES OF INCUBATION AND DEVELOPMENT 40 OF PLANS TO INCORPORATE AND INTEGRATE SUCH PRACTICES, DEVELOPMENT OF 41 DATA CONCERNING INCUBATION IN THIS STATE AND RECOMMENDATIONS FOR 42 IMPROVEMENT, AID IN MARKETING AND EVENT SPONSORSHIP, AND SUCH OTHER 43 SERVICES AS THE CORPORATION SHALL DEEM NECESSARY AND APPROPRIATE TO THE 44 STRENGTHENING OF BUSINESS INCUBATION IN THIS STATE. 45 8. NEW YORK STATE INNOVATION HOT SPOTS MAY CERTIFY CLIENTS WHICH MEET 46 THE REQUIREMENTS OF SUBDIVISION NINE OF THIS SECTION AS QUALIFIED ENTI- 47 TIES ELIGIBLE FOR NEW YORK STATE INNOVATION HOT SPOT PROGRAM TAX BENE- 48 FITS PURSUANT TO SECTION THIRTY-EIGHT OF THE TAX LAW. UNDER NO CIRCUM- 49 STANCE MAY BUSINESS ENTERPRISES OF INCUBATORS DESIGNATED AS NEW YORK 50 STATE INCUBATORS UNDER PARAGRAPH (B) OF SUBDIVISION ONE OF THIS SECTION 51 BE ELIGIBLE FOR TAX BENEFITS UNDER SECTION THIRTY-EIGHT OF THE TAX LAW. 52 9. "QUALIFIED ENTITY" SHALL MEAN A BUSINESS ENTERPRISE THAT IS: 53 (I) IN THE FORMATIVE STAGE OF DEVELOPMENT; 54 (II) LOCATED IN NEW YORK STATE; 55 (III) EITHER: (A) ANY CORPORATION, EXCEPT A CORPORATION WHICH: S. 2609--D 20 A. 3009--D 1 (1) OVER FIFTY PERCENT OF THE NUMBER OF SHARES OF STOCK ENTITLING THE 2 HOLDERS THEREOF TO VOTE FOR THE ELECTION OF DIRECTORS OR TRUSTEES IS 3 OWNED OR CONTROLLED, EITHER DIRECTLY OR INDIRECTLY, BY A TAXPAYER 4 SUBJECT TO TAX UNDER THE FOLLOWING PROVISIONS OF THE TAX LAW: ARTICLE 5 NINE-A; SECTION ONE HUNDRED EIGHTY-THREE, ONE HUNDRED EIGHTY-FOUR OR ONE 6 HUNDRED EIGHTY-FIVE OF ARTICLE NINE; ARTICLE THIRTY-TWO OR ARTICLE THIR- 7 TY-THREE; OR 8 (2) IS SUBSTANTIALLY SIMILAR IN OPERATION AND IN OWNERSHIP TO A BUSI- 9 NESS ENTITY (OR ENTITIES) TAXABLE OR PREVIOUSLY TAXABLE UNDER THE 10 FOLLOWING PROVISIONS OF THE TAX LAW: ARTICLE NINE-A; SECTION ONE 11 HUNDRED EIGHTY-THREE, ONE HUNDRED EIGHTY-FOUR, ONE HUNDRED EIGHTY-FIVE 12 OR FORMER SECTION ONE HUNDRED EIGHTY-SIX OF ARTICLE NINE; ARTICLE THIR- 13 TY-TWO; ARTICLE THIRTY-THREE; ARTICLE TWENTY-THREE, OR WOULD HAVE BEEN 14 SUBJECT TO TAX UNDER SUCH ARTICLE TWENTY-THREE (AS SUCH ARTICLE WAS IN 15 EFFECT ON JANUARY FIRST, NINETEEN HUNDRED EIGHTY) OR THE INCOME (OR 16 LOSSES) OF WHICH IS (OR WAS) INCLUDABLE UNDER ARTICLE TWENTY-TWO; OR 17 (B) A SOLE PROPRIETORSHIP, PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED 18 LIABILITY COMPANY, OR NEW YORK SUBCHAPTER S CORPORATION THAT IS NOT 19 SUBSTANTIALLY SIMILAR IN OPERATION AND IN OWNERSHIP TO A BUSINESS ENTITY 20 (OR ENTITIES) TAXABLE, OR PREVIOUSLY TAXABLE, UNDER ARTICLE NINE-A OF 21 THE TAX LAW, SECTION ONE HUNDRED EIGHTY-THREE, ONE HUNDRED EIGHTY-FOUR, 22 ONE HUNDRED EIGHTY-FIVE OR FORMER SECTION ONE HUNDRED EIGHTY-SIX OF 23 ARTICLE NINE OF THE TAX LAW, ARTICLE THIRTY-TWO OR THIRTY-THREE OF THE 24 TAX LAW, ARTICLE TWENTY-THREE OF THE TAX LAW OR WHICH WOULD HAVE BEEN 25 SUBJECT TO TAX UNDER SUCH ARTICLE TWENTY-THREE (AS SUCH ARTICLE WAS IN 26 EFFECT ON JANUARY FIRST, NINETEEN HUNDRED EIGHTY) OR THE INCOME (OR 27 LOSSES) OF WHICH IS (OR WAS) INCLUDABLE UNDER ARTICLE TWENTY-TWO OF THE 28 TAX LAW; AND 29 (IV) IS CERTIFIED BY A NEW YORK STATE INNOVATION HOT SPOT AS BEING 30 APPROVED TO LOCATE IN, OR BE PART OF A VIRTUAL INCUBATION PROGRAM OPER- 31 ATED BY, SUCH NEW YORK INNOVATION HOT SPOT. 32 10. THE CORPORATION MAY ESTABLISH GUIDELINES CONCERNING THIS PROGRAM 33 TO IMPLEMENT THE PURPOSES OF THIS ACT. 34 S 2. The tax law is amended by adding a new section 38 to read as 35 follows: 36 S 38. NEW YORK INNOVATION HOT SPOT PROGRAM TAX BENEFITS. (A) AS USED 37 IN THIS CHAPTER, THE TERMS "NEW YORK STATE INNOVATION HOT SPOT" AND 38 "QUALIFIED ENTITY" SHALL HAVE THE SAME MEANING AS UNDER SECTION 39 SIXTEEN-V OF THE NEW YORK STATE URBAN DEVELOPMENT CORPORATION ACT. 40 (B) A TAXPAYER UNDER ARTICLE NINE-A OF THIS CHAPTER THAT IS A QUALI- 41 FIED ENTITY OF A NEW YORK STATE INNOVATION HOT SPOT SHALL BE SUBJECT 42 ONLY TO THE FIXED DOLLAR MINIMUM TAX, IMPOSED UNDER PARAGRAPH (D) OF 43 SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS CHAPTER, FOR FIVE 44 TAXABLE YEARS, BEGINNING WITH THE FIRST TAXABLE YEAR DURING WHICH THE 45 QUALIFIED ENTITY BECOMES A TENANT IN OR PART OF AN INNOVATION HOT SPOT. 46 A TAXPAYER UNDER ARTICLE NINE-A OF THIS CHAPTER THAT IS A CORPORATE 47 PARTNER IN A QUALIFIED ENTITY, OR IS A QUALIFIED ENTITY THAT IS LOCATED 48 BOTH WITHIN AND WITHOUT AN INNOVATION HOT SPOT, SHALL BE ALLOWED ONLY A 49 DEDUCTION FOR THE AMOUNT OF INCOME OR GAIN INCLUDED IN ITS FEDERAL TAXA- 50 BLE INCOME TO THE EXTENT THAT THE INCOME OR GAIN IS ATTRIBUTABLE TO THE 51 OPERATIONS AT OR AS PART OF THE INNOVATION HOT SPOT. THE DEDUCTION IS 52 ALLOWED FOR FIVE TAXABLE YEARS, BEGINNING WITH THE FIRST TAXABLE YEAR 53 DURING WHICH THE QUALIFIED ENTITY BECOMES A TENANT IN OR PART OF AN 54 INNOVATION HOT SPOT. 55 (C) AN INDIVIDUAL WHO IS THE SOLE PROPRIETOR OF A QUALIFIED ENTITY OR 56 A MEMBER OF A LIMITED LIABILITY COMPANY, A PARTNER IN A PARTNERSHIP OR A S. 2609--D 21 A. 3009--D 1 SHAREHOLDER IN A NEW YORK SUBCHAPTER S CORPORATION WHERE THE LIMITED 2 LIABILITY COMPANY, PARTNERSHIP, OR S CORPORATION IS A QUALIFIED ENTITY, 3 THAT IS TAXABLE UNDER ARTICLE TWENTY-TWO OF THIS CHAPTER SHALL BE 4 ALLOWED A DEDUCTION FOR THE AMOUNT OF INCOME OR GAIN INCLUDED IN ITS 5 FEDERAL ADJUSTED GROSS INCOME TO THE EXTENT THAT THE INCOME OR GAIN IS 6 ATTRIBUTABLE TO THE OPERATIONS OF A QUALIFIED ENTITY AT OR AS A PART OF 7 A NEW YORK STATE INNOVATION HOT SPOT. THE DEDUCTION IS ALLOWED FOR FIVE 8 TAXABLE YEARS, BEGINNING WITH THE FIRST TAXABLE YEAR DURING WHICH THE 9 QUALIFIED ENTITY BECOMES A TENANT IN OR PART OF AN INNOVATION HOT SPOT. 10 (D) A QUALIFIED ENTITY THAT IS A TENANT IN OR PART OF A NEW YORK STATE 11 INNOVATION HOT SPOT SHALL BE ELIGIBLE FOR A CREDIT OR REFUND FOR SALES 12 AND USE TAXES IMPOSED ON THE RETAIL SALE OF TANGIBLE PERSONAL PROPERTY 13 OR SERVICES UNDER SUBDIVISIONS (A), (B), AND (C) OF SECTION ELEVEN 14 HUNDRED FIVE AND SECTION ELEVEN HUNDRED TEN OF THIS CHAPTER. THE CREDIT 15 OR REFUND SHALL BE ALLOWED FOR SIXTY MONTHS BEGINNING WITH THE FIRST 16 FULL MONTH AFTER THE QUALIFIED ENTITY BECOMES A TENANT IN AN INCUBATOR 17 HOT SPOT. 18 (E) A TAXPAYER WHO CLAIMS ANY OF THE TAX BENEFITS DESCRIBED IN THIS 19 SECTION IS NO LONGER ELIGIBLE FOR ANY OTHER NEW YORK STATE EXEMPTIONS, 20 DEDUCTIONS, OR CREDIT OR REFUNDS UNDER THIS CHAPTER TO THE EXTENT THAT 21 ANY SUCH EXEMPTION, DEDUCTION, CREDIT OR REFUND IS ATTRIBUTABLE TO THE 22 BUSINESS OPERATIONS OF A TENANT IN OR AS PART OF THE NEW YORK STATE 23 INNOVATION HOT SPOT. THE ELECTION TO CLAIM THE TAX BENEFITS DESCRIBED IN 24 THIS SECTION IS NOT REVOCABLE. 25 (F) CROSS-REFERENCES. FOR APPLICATION OF THE TAX BENEFITS PROVIDED FOR 26 IN THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER: 27 (I) ARTICLE 9-A, SECTION 208, SUBDIVISION (9), PARAGRAPH (A), SUBPARA- 28 GRAPH (18). 29 (II) ARTICLE 9-A, SECTION 209, SUBDIVISION 11. 30 (III) ARTICLE 22, SECTION 612, SUBSECTION (C), PARAGRAPH (39). 31 (IV) ARTICLE 28, SECTION 1119, SUBDIVISION (D). 32 S 3. Paragraph (a) of subdivision 9 of section 208 of the tax law is 33 amended by adding a new subparagraph 18 to read as follows: 34 (18) THE AMOUNT OF INCOME OR GAIN INCLUDED IN FEDERAL TAXABLE INCOME 35 OF A TAXPAYER THAT IS A PARTNER IN A QUALIFIED ENTITY OR IS A QUALIFIED 36 ENTITY THAT IS LOCATED BOTH WITHIN AND WITHOUT A NEW YORK STATE INNO- 37 VATION HOT SPOT, TO THE EXTENT THAT THE INCOME OR GAIN IS ATTRIBUTABLE 38 TO THE OPERATIONS OF A QUALIFIED ENTITY AT OR AS PART OF THE NEW YORK 39 STATE INNOVATION HOT SPOT AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS 40 CHAPTER. 41 S 4. Section 209 of the tax law is amended by adding a new subdivision 42 11 to read as follows: 43 11. EXCEPT AS PROVIDED IN SUBPARAGRAPH EIGHTEEN OF PARAGRAPH (A) OF 44 SUBDIVISION NINE OF SECTION TWO HUNDRED EIGHT OF THIS ARTICLE, A CORPO- 45 RATION THAT IS A QUALIFIED ENTITY OF A NEW YORK STATE INNOVATION HOT 46 SPOT SHALL BE SUBJECT ONLY TO THE FIXED DOLLAR MINIMUM TAX UNDER PARA- 47 GRAPH (D) OF SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE, 48 AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS CHAPTER. 49 S 5. Subsection (c) of section 612 of the tax law is amended by adding 50 a new paragraph 39 to read as follows: 51 (39) ANY INCOME OR GAIN, TO THE EXTENT IT IS INCLUDED IN FEDERAL 52 ADJUSTED GROSS INCOME OF AN INDIVIDUAL WHO IS THE SOLE PROPRIETOR OF A 53 QUALIFIED ENTITY OR A MEMBER OF A LIMITED LIABILITY COMPANY, A PARTNER 54 IN A PARTNERSHIP OR A SHAREHOLDER IN A NEW YORK SUBCHAPTER S CORPORATION 55 THAT IS A QUALIFIED ENTITY, ATTRIBUTABLE TO THE OPERATIONS OF A QUALI- S. 2609--D 22 A. 3009--D 1 FIED ENTITY AT ITS LOCATION IN OR AS PART OF A NEW YORK STATE INNOVATION 2 HOT SPOT, AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS CHAPTER. 3 S 6. Paragraph 1 of subdivision (d) of section 1119 of the tax law, as 4 added by section 31 of part S-1 of chapter 57 of the laws of 2009, is 5 amended to read as follows: 6 (1) Subject to the conditions and limitations provided for in this 7 section, a refund or credit will be allowed for taxes imposed on the 8 retail sale of tangible personal property described in subdivision (a) 9 of section eleven hundred five of this article, and on every sale of 10 services described in subdivisions (b) and (c) of such section, and 11 consideration given or contracted to be given for, or for the use of, 12 such tangible personal property or services, where such tangible 13 personal property or services are sold to a qualified empire zone enter- 14 prise OR TO A QUALIFIED ENTITY THAT IS ALSO A TENANT IN OR PART OF A NEW 15 YORK STATE INNOVATION HOT SPOT AS PROVIDED IN SECTION THIRTY-EIGHT OF 16 THIS CHAPTER, provided that (A) such tangible personal property or 17 tangible personal property upon which such a service has been performed 18 or such service (other than a service described in subdivision (b) of 19 section eleven hundred five of this article) is directly and predomi- 20 nantly, or such a service described in clause (A) or (D) of paragraph 21 one of such subdivision (b) of section eleven hundred five of this arti- 22 cle is directly and exclusively, used or consumed by (I) such QUALIFIED 23 EMPIRE ZONE enterprise in an area designated as an empire zone pursuant 24 to article eighteen-B of the general municipal law with respect to which 25 such enterprise is certified pursuant to such article eighteen-B, OR 26 (II) SUCH QUALIFIED ENTITY AT ITS LOCATION IN OR AS PART OF A NEW YORK 27 STATE INNOVATION HOT SPOT or (B) such a service described in clause (B) 28 or (C) of paragraph one of subdivision (b) of section eleven hundred 29 five of this article is delivered and billed to (I) such enterprise at 30 an address in such empire zone OR (II) SUCH QUALIFIED ENTITY AT ITS 31 LOCATION IN OR AS PART OF THE NEW YORK STATE INNOVATION HOT SPOT, or (C) 32 the enterprise's place of primary use of the service described in para- 33 graph two of such subdivision (b) of section eleven hundred five is at 34 an address in such empire zone OR AT ITS LOCATION IN OR AS PART OF A NEW 35 YORK STATE INNOVATION HOT SPOT; provided, further, that, in order for a 36 motor vehicle, as defined in subdivision (c) of section eleven hundred 37 seventeen of this article, or tangible personal property related to such 38 a motor vehicle to be found to be used predominantly in such a zone, at 39 least fifty percent of such motor vehicle's use shall be exclusively 40 within such zone or at least fifty percent of such motor vehicle's use 41 shall be in activities originating or terminating in such zone, or both; 42 and either or both such usages shall be computed either on the basis of 43 mileage or hours of use, at the discretion of such enterprise. For 44 purposes of this subdivision, tangible personal property related to such 45 a motor vehicle shall include a battery, diesel motor fuel, an engine, 46 engine components, motor fuel, a muffler, tires and similar tangible 47 personal property used in or on such a motor vehicle. 48 S 7. Subdivision (c) of section 11-1712 of the administrative code of 49 the city of New York is amended by adding a new paragraph 35 to read as 50 follows: 51 (35) AS PROVIDED IN SECTION THIRTY-EIGHT OF THE TAX LAW, ANY INCOME OR 52 GAIN, TO THE EXTENT IT IS INCLUDED IN FEDERAL ADJUSTED GROSS INCOME OF 53 AN INDIVIDUAL WHO IS THE SOLE PROPRIETOR OF A QUALIFIED ENTITY OR A 54 MEMBER OF A LIMITED LIABILITY COMPANY, A PARTNER IN A PARTNERSHIP OR A 55 SHAREHOLDER IN A NEW YORK SUBCHAPTER S CORPORATION THAT IS A QUALIFIED 56 ENTITY AS DEFINED IN SECTION SIXTEEN-V OF THE NEW YORK STATE URBAN S. 2609--D 23 A. 3009--D 1 DEVELOPMENT CORPORATION ACT ATTRIBUTABLE TO THE OPERATIONS OF SUCH QUAL- 2 IFIED ENTITY AT ITS LOCATION IN OR AS PART OF A NEW YORK STATE INNO- 3 VATION HOT SPOT, AS DEFINED IN PARAGRAPH (A) OF SUBDIVISION ONE OF 4 SECTION SIXTEEN-V OF THE NEW YORK STATE URBAN DEVELOPMENT CORPORATION 5 ACT. 6 S 8. This act shall take effect immediately. 7 PART D 8 Section 1. Subsection (g) of section 615 of the tax law, as added by 9 section 3 of part HH of chapter 57 of the laws of 2010, is amended to 10 read as follows: 11 (g)(1) With respect to an individual whose New York adjusted gross 12 income is over one million dollars and no more than ten million dollars, 13 the New York itemized deduction shall be an amount equal to fifty 14 percent of any charitable contribution deduction allowed under section 15 one hundred seventy of the internal revenue code for taxable years 16 beginning after two thousand nine and before two thousand [thirteen] 17 SIXTEEN. With respect to an individual whose New York adjusted gross 18 income is over one million dollars, the New York itemized deduction 19 shall be an amount equal to fifty percent of any charitable contribution 20 deduction allowed under section one hundred seventy of the internal 21 revenue code for taxable years beginning in two thousand nine or after 22 two thousand [twelve] FIFTEEN. 23 (2) With respect to an individual whose New York adjusted gross income 24 is over ten million dollars, the New York itemized deduction shall be an 25 amount equal to twenty-five percent of any charitable contribution 26 deduction allowed under section one hundred seventy of the internal 27 revenue code for taxable years beginning after two thousand nine and 28 ending before two thousand [thirteen] SIXTEEN. 29 S 2. Subdivision (g) of section 11-1715 of the administrative code of 30 the city of New York, as added by section 7 of part HH of chapter 57 of 31 the laws of 2010, is amended to read as follows: 32 (g) (1) With respect to an individual whose New York adjusted gross 33 income is over one million dollars but no more than ten million dollars, 34 the New York itemized deduction shall be an amount equal to fifty 35 percent of any charitable contribution deduction allowed under section 36 one hundred seventy of the internal revenue code for taxable years 37 beginning after two thousand nine and before two thousand [thirteen] 38 SIXTEEN. With respect to an individual whose New York adjusted gross 39 income is over one million dollars, the New York itemized deduction 40 shall be an amount equal to fifty percent of any charitable contribution 41 deduction allowed under section one hundred seventy of the internal 42 revenue code for taxable years beginning in two thousand nine or after 43 two thousand [twelve] FIFTEEN. 44 (2) With respect to an individual whose New York adjusted gross income 45 is over ten million dollars, the New York itemized deduction shall be an 46 amount equal to twenty-five percent of any charitable contribution 47 deduction allowed under section one hundred seventy of the internal 48 revenue code for taxable years beginning after two thousand nine AND 49 ENDING BEFORE TWO THOUSAND SIXTEEN. 50 S 3. This act shall take effect immediately. 51 PART E S. 2609--D 24 A. 3009--D 1 Section 1. Subparagraph 17 of paragraph (a) of subdivision 9 of 2 section 208 of the tax law is REPEALED. 3 S 2. Paragraph (o) of subdivision 9 of section 208 of the tax law, as 4 amended by section 1 of part M of chapter 686 of the laws of 2003, 5 clause (A) of subparagraph 2 as amended by section 4 of part J of chap- 6 ter 60 of the laws of 2007, is amended to read as follows: 7 (o) Related members expense add back [and income exclusion]. (1) Defi- 8 nitions. (A) Related member [or members. For purposes of this paragraph, 9 the term related member or members means a person, corporation, or other 10 entity, including an entity that is treated as a partnership or other 11 pass-through vehicle for purposes of federal taxation, whether such 12 person, corporation or entity is a taxpayer or not, where one such 13 person, corporation, or entity, or set of related persons, corporations 14 or entities, directly or indirectly owns or controls a controlling 15 interest in another entity. Such entity or entities may include all 16 taxpayers under articles nine, nine-A, thirteen, twenty-two, thirty-two, 17 thirty-three or thirty-three-A of this chapter]. "RELATED MEMBER" MEANS 18 A RELATED PERSON AS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF 19 SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVEN- 20 UE CODE, EXCEPT THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN 21 PERCENT". 22 (B) [Controlling interest. A controlling interest shall mean (i) in 23 the case of a corporation, either thirty percent or more of the total 24 combined voting power of all classes of stock of such corporation, or 25 thirty percent or more of the capital, profits or beneficial interest in 26 such voting stock of such corporation, and (ii) in the case of a part- 27 nership, association, trust or other entity, thirty percent or more of 28 the capital, profits or beneficial interest in such partnership, associ- 29 ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF 30 TAX" MEANS, AS TO ANY STATE OR U.S. POSSESSION, THE MAXIMUM STATUTORY 31 RATE OF TAX IMPOSED BY THE STATE OR POSSESSION ON OR MEASURED BY A 32 RELATED MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT PERCENTAGE, 33 IF ANY, APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF SAID JURIS- 34 DICTION. FOR PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF TAX AS 35 TO ANY STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED MEMBER'S NET 36 INCOME TAX LIABILITY IN SAID JURISDICTION IS REPORTED ON A COMBINED OR 37 CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE RELATED MEMBER 38 WHERE THE REPORTED TRANSACTIONS BETWEEN THE TAXPAYER AND THE RELATED 39 MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS DEFINITION, 40 WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN WHICH A 41 RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI- 42 LAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED MEMBER EITHER MAIN- 43 TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN 44 THAT JURISDICTION, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID 45 JURISDICTION SHALL BE DECREASED TO REFLECT THE STATUTORY RATE OF TAX 46 THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT 47 OR SIMILAR ADJUSTMENT. 48 (C) Royalty payments. Royalty payments are payments directly connected 49 to the acquisition, use, maintenance or management, ownership, sale, 50 exchange, or any other disposition of licenses, trademarks, copyrights, 51 trade names, trade dress, service marks, mask works, trade secrets, 52 patents and any other similar types of intangible assets as determined 53 by the commissioner, and [includes] INCLUDE amounts allowable as inter- 54 est deductions under section one hundred sixty-three of the internal 55 revenue code to the extent such amounts are directly or indirectly for, 56 related to or in connection with the acquisition, use, maintenance or S. 2609--D 25 A. 3009--D 1 management, ownership, sale, exchange or disposition of such intangible 2 assets. 3 (D) Valid Business Purpose. A valid business purpose is one or more 4 business purposes, other than the avoidance or reduction of taxation, 5 which alone or in combination constitute the primary motivation for some 6 business activity or transaction, which activity or transaction changes 7 in a meaningful way, apart from tax effects, the economic position of 8 the taxpayer. The economic position of the taxpayer includes an increase 9 in the market share of the taxpayer, or the entry by the taxpayer into 10 new business markets. 11 (2) Royalty expense add backs. (A) Except where a taxpayer is included 12 in a combined report with a related member pursuant to subdivision four 13 of section two hundred eleven of this article, for the purpose of 14 computing entire net income or other applicable taxable basis, a taxpay- 15 er must add back royalty payments [to a] DIRECTLY OR INDIRECTLY PAID, 16 ACCRUED, OR INCURRED IN CONNECTION WITH ONE OR MORE DIRECT OR INDIRECT 17 TRANSACTIONS WITH ONE OR MORE related [member] MEMBERS during the taxa- 18 ble year to the extent deductible in calculating federal taxable income. 19 (B) [The add back of royalty payments shall not be required if and to 20 the extent that such payments meet either of the following conditions: 21 (i) the related member during the same taxable year directly or indi- 22 rectly paid or incurred the amount to a person or entity that is not a 23 related member, and such transaction was done for a valid business 24 purpose and the payments are made at arm's length; 25 (ii) the royalty payments are paid or incurred to a related member 26 organized under the laws of a country other than the United States, are 27 subject to a comprehensive income tax treaty between such country and 28 the United States, and are taxed in such country at a tax rate at least 29 equal to that imposed by this state. 30 (3) Royalty income exclusions. For the purpose of computing entire net 31 income or other taxable basis, a taxpayer shall be allowed to deduct 32 royalty payments directly or indirectly received from a related member 33 during the taxable year to the extent included in the taxpayer's federal 34 taxable income unless such royalty payments would not be required to be 35 added back under subparagraph two of this paragraph or other similar 36 provision in this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN 37 THIS PARAGRAPH SHALL NOT APPLY TO THE PORTION OF THE ROYALTY PAYMENT 38 THAT THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE 39 TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER, MEETS ALL OF THE 40 FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX IN 41 THIS STATE OR ANOTHER STATE OR POSSESSION OF THE UNITED STATES OR A 42 FOREIGN NATION OR SOME COMBINATION THEREOF ON A TAX BASE THAT INCLUDED 43 THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE 44 RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, 45 ACCRUED OR INCURRED SUCH PORTION TO A PERSON THAT IS NOT A RELATED 46 MEMBER; AND (III) THE TRANSACTION GIVING RISE TO THE ROYALTY PAYMENT 47 BETWEEN THE TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID 48 BUSINESS PURPOSE. 49 (II) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 50 TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND 51 IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE RELATED MEMBER 52 WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN THIS STATE OR 53 ANOTHER STATE OR POSSESSION OF THE UNITED STATES OR SOME COMBINATION 54 THEREOF; (II) THE TAX BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT 55 PAID, ACCRUED OR INCURRED BY THE TAXPAYER; AND (III) THE AGGREGATE 56 EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC- S. 2609--D 26 A. 3009--D 1 TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT 2 APPLIED TO THE TAXPAYER UNDER SECTION TWO HUNDRED TEN OF THIS ARTICLE 3 FOR THE TAXABLE YEAR. 4 (III) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 5 TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND 6 IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE ROYALTY PAYMENT 7 WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGANIZED UNDER THE 8 LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE RELATED 9 MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHENSIVE 10 INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III) THE 11 RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE THAT 12 INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; 13 (IV) THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS TAXED IN SUCH 14 COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT IMPOSED BY 15 THIS STATE; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED 16 PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSINESS 17 PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP. 18 (IV) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 19 TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE 20 OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS 21 OR HER DISCRETION, AGREE TO THE APPLICATION OR USE OF ALTERNATIVE 22 ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE 23 OF SUCH AGREEMENT THE INCOME OF THE TAXPAYER WOULD NOT BE PROPERLY 24 REFLECTED. 25 S 3. Paragraph 6 of subdivision (a) of section 292 of the tax law, as 26 amended by section 15 of part M of chapter 686 of the laws of 2003, is 27 amended to read as follows: 28 (6) Related members expense add back [and income exclusion]. (A) 29 Definitions. (i) Related member [or members. For purposes of this para- 30 graph, the term related member or members means a person, corporation, 31 or other entity, including an entity that is treated as a partnership or 32 other pass-through vehicle for purposes of federal taxation, whether 33 such person, corporation or entity is a taxpayer or not, where one such 34 person, corporation, or entity, or set of related persons, corporations 35 or entities, directly or indirectly owns or controls a controlling 36 interest in another entity. Such entity or entities may include all 37 taxpayers under article nine, nine-A, thirteen, twenty-two, thirty-two, 38 thirty-three or thirty-three-A of this chapter]. "RELATED MEMBER" MEANS 39 A RELATED PERSON AS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF 40 SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVEN- 41 UE CODE, EXCEPT THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN 42 PERCENT". 43 (ii) [Controlling interest. A controlling interest shall mean (I) in 44 the case of a corporation, either thirty percent or more of the total 45 combined voting power of all classes of stock of such corporation, or 46 thirty percent or more of the capital, profits or beneficial interest in 47 such voting stock of such corporation, and (II) in the case of a part- 48 nership, association, trust or other entity, thirty percent or more of 49 the capital, profits or beneficial interest in such partnership, associ- 50 ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF 51 TAX" MEANS, AS TO ANY STATE OR U.S. POSSESSION, THE MAXIMUM STATUTORY 52 RATE OF TAX IMPOSED BY THE STATE OR POSSESSION ON OR MEASURED BY A 53 RELATED MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT PERCENTAGE, 54 IF ANY, APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF SAID JURIS- 55 DICTION. FOR PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF TAX AS 56 TO ANY STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED MEMBER'S NET S. 2609--D 27 A. 3009--D 1 INCOME TAX LIABILITY IN SAID JURISDICTION IS REPORTED ON A COMBINED OR 2 CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE RELATED MEMBER 3 WHERE THE REPORTED TRANSACTIONS BETWEEN THE TAXPAYER AND THE RELATED 4 MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS DEFINITION, 5 WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN WHICH A 6 RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI- 7 LAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED MEMBER EITHER MAIN- 8 TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN 9 THAT JURISDICTION, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID 10 JURISDICTION SHALL BE DECREASED TO REFLECT THE STATUTORY RATE OF TAX 11 THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT 12 OR SIMILAR ADJUSTMENT. 13 (iii) Royalty payments. Royalty payments are payments directly 14 connected to the acquisition, use, maintenance or management, ownership, 15 sale, exchange, or any other disposition of licenses, trademarks, copy- 16 rights, trade names, trade dress, service marks, mask works, trade 17 secrets, patents and any other similar types of intangible assets as 18 determined by the commissioner, and [includes] INCLUDE amounts allowable 19 as interest deductions under section one hundred sixty-three of the 20 internal revenue code to the extent such amounts are directly or indi- 21 rectly for, related to or in connection with the acquisition, use, main- 22 tenance or management, ownership, sale, exchange or disposition of such 23 intangible assets. 24 (iv) Valid business purpose. A valid business purpose is one or more 25 business purposes other than the avoidance or reduction of taxation 26 which alone or in combination constitute the primary motivation for some 27 business activity or transaction, which activity or transaction changes 28 in a meaningful way, apart from tax effects, the economic position of 29 the taxpayer. The economic position of the taxpayer includes an increase 30 in the market share of the taxpayer, or the entry by the taxpayer into 31 new business markets. 32 (B) Royalty expense add backs. (i) For the purpose of computing New 33 York unrelated business taxable income, a taxpayer must add back royalty 34 payments [to a] DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN 35 CONNECTION WITH ONE OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE OR 36 MORE related [member] MEMBERS during the taxable year to the extent 37 deductible in calculating federal unrelated business taxable income; 38 (ii) [The add back of royalty payments shall not be required if and to 39 the extent that such payments meet either of the following conditions: 40 (I) the related member during the same taxable year directly or indi- 41 rectly paid or incurred the amount to a person or entity that is not a 42 related member, and such transaction was done for a valid business and 43 the payments are made at arm's length; 44 (II) the royalty payments are paid or incurred to a related member 45 organized under the laws of a country other than the United States, are 46 subject to a comprehensive income tax treaty between such country and 47 the United States, and are taxed in such country at a tax rate at least 48 equal to that imposed by this state. 49 (C) Royalty income exclusions. For the purpose of computing New York 50 unrelated business taxable income, a taxpayer shall be allowed to deduct 51 royalty payments directly or indirectly received from a related member 52 during the taxable year to the extent included in the taxpayer's federal 53 taxable income unless such royalty payments would not be required to be 54 added back under subparagraph (B) of this paragraph or other similar 55 provision in this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN 56 THIS PARAGRAPH SHALL NOT APPLY TO THE PORTION OF THE ROYALTY PAYMENT S. 2609--D 28 A. 3009--D 1 THAT THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE 2 TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER, MEETS ALL OF THE 3 FOLLOWING REQUIREMENTS: (A) THE RELATED MEMBER WAS SUBJECT TO TAX IN 4 THIS STATE OR ANOTHER STATE OR POSSESSION OF THE UNITED STATES OR A 5 FOREIGN NATION OR SOME COMBINATION THEREOF ON A TAX BASE THAT INCLUDED 6 THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; (B) THE 7 RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, 8 ACCRUED OR INCURRED SUCH PORTION TO A PERSON THAT IS NOT A RELATED 9 MEMBER; AND (C) THE TRANSACTION GIVING RISE TO THE ROYALTY PAYMENT 10 BETWEEN THE TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID 11 BUSINESS PURPOSE. 12 (II) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 13 TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND 14 IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (A) THE RELATED MEMBER 15 WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN THIS STATE OR 16 ANOTHER STATE OR POSSESSION OF THE UNITED STATES OR SOME COMBINATION 17 THEREOF; (B) THE TAX BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT 18 PAID, ACCRUED OR INCURRED BY THE TAXPAYER; AND (C) THE AGGREGATE EFFEC- 19 TIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDICTIONS IS 20 NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT APPLIED TO 21 THE TAXPAYER UNDER SECTION TWO HUNDRED NINETY OF THIS ARTICLE FOR THE 22 TAXABLE YEAR. 23 (III) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 24 TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND 25 IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (A) THE ROYALTY PAYMENT 26 WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGANIZED UNDER THE 27 LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (B) THE RELATED MEMBER'S 28 INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHENSIVE INCOME TAX 29 TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (C) THE RELATED 30 MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE THAT 31 INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; 32 (D) THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS TAXED IN SUCH 33 COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT IMPOSED BY 34 THIS STATE; AND (E) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED 35 PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSINESS 36 PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP. 37 (IV) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 38 TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE 39 OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS 40 OR HER DISCRETION, AGREE TO THE APPLICATION OR USE OF ALTERNATIVE 41 ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE 42 OF SUCH AGREEMENT THE INCOME OF THE TAXPAYER WOULD NOT BE PROPERLY 43 REFLECTED. 44 S 4. Paragraph 19 of subsection (c) of section 612 of the tax law is 45 REPEALED. 46 S 5. Subsection (r) of section 612 of the tax law, as amended by 47 section 3 of part M of chapter 686 of the laws of 2003, is amended to 48 read as follows: 49 (r) Related members expense add back [and income exclusion]. (1) 50 Definitions. (A) Related member [or members. For purposes of this 51 subsection, the term related member or members means a person, corpo- 52 ration, or other entity, including an entity that is treated as a part- 53 nership or other pass-through vehicle for purposes of federal taxation, 54 whether such person, corporation or entity is a taxpayer or not, where 55 one such person, corporation, or entity, or set of related persons, 56 corporations or entities, directly or indirectly owns or controls a S. 2609--D 29 A. 3009--D 1 controlling interest in another entity. Such entity or entities may 2 include all taxpayers under article nine, nine-A, thirteen, twenty-two, 3 thirty-two, thirty-three or thirty-three-A of this chapter]. "RELATED 4 MEMBER" MEANS A RELATED PERSON AS DEFINED IN SUBPARAGRAPH (C) OF PARA- 5 GRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE 6 INTERNAL REVENUE CODE, EXCEPT THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED 7 FOR "TEN PERCENT". 8 (B) [Controlling interest. A controlling interest shall mean (i) in 9 the case of a corporation, either thirty percent or more of the total 10 combined voting power of all classes of stock of such corporation, or 11 thirty percent or more of the capital, profits or beneficial interest in 12 such voting stock of such corporation, and (ii) in the case of a part- 13 nership, association, trust or other entity, thirty percent or more of 14 the capital, profits or beneficial interest in such partnership, associ- 15 ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE 16 OF TAX" MEANS, AS TO ANY STATE OR U.S. POSSESSION, THE MAXIMUM STATUTORY 17 RATE OF TAX IMPOSED BY THE STATE OR POSSESSION ON OR MEASURED BY A 18 RELATED MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT PERCENTAGE, 19 IF ANY, APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF SAID JURIS- 20 DICTION. FOR PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF TAX AS 21 TO ANY STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED MEMBER'S NET 22 INCOME TAX LIABILITY IN SAID JURISDICTION IS REPORTED ON A COMBINED OR 23 CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE RELATED MEMBER 24 WHERE THE REPORTED TRANSACTIONS BETWEEN THE TAXPAYER AND THE RELATED 25 MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS DEFINITION, 26 WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN WHICH A 27 RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI- 28 LAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED MEMBER EITHER MAIN- 29 TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN 30 THAT JURISDICTION, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID 31 JURISDICTION SHALL BE DECREASED TO REFLECT THE STATUTORY RATE OF TAX 32 THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT 33 OR SIMILAR ADJUSTMENT. 34 (C) Royalty payments. Royalty payments are payments directly connected 35 to the acquisition, use, maintenance or management, ownership, sale, 36 exchange, or any other disposition of licenses, trademarks, copyrights, 37 trade names, trade dress, service marks, mask works, trade secrets, 38 patents and any other similar types of intangible assets as determined 39 by the commissioner, and [includes] INCLUDE amounts allowable as inter- 40 est deductions under section one hundred sixty-three of the internal 41 revenue code to the extent such amounts are directly or indirectly for, 42 related to or in connection with the acquisition, use, maintenance or 43 management, ownership, sale, exchange or disposition of such intangible 44 assets. 45 (D) Valid business purpose. A valid business purpose is one or more 46 business purposes, other than the avoidance or reduction of taxation, 47 which alone or in combination constitute the primary motivation for some 48 business activity or transaction, which activity or transaction changes 49 in a meaningful way, apart from tax effects, the economic position of 50 the taxpayer. The economic position of the taxpayer includes an increase 51 in the market share of the taxpayer, or the entry by the taxpayer into 52 new business markets. 53 (2) Royalty expense add backs. (A) For the purpose of computing New 54 York adjusted gross income, a taxpayer must add back royalty payments 55 [to a] DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION 56 WITH ONE OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE OR MORE S. 2609--D 30 A. 3009--D 1 related [member] MEMBERS during the taxable year to the extent deduct- 2 ible in calculating federal taxable income. 3 (B) [The add back of royalty payments shall not be required if and to 4 the extent that such payments meet either of the following conditions: 5 (i) the related member during the same taxable year directly or indi- 6 rectly paid or incurred the amount to a person or entity that is not a 7 related member, and such transaction was done for a valid business and 8 the payments are made at arm's length; 9 (ii) the royalty payments are paid or incurred to a related member 10 organized under the laws of a country other than the United States, are 11 subject to a comprehensive income tax treaty between such country and 12 the United States, and are taxed in such country at a tax rate at least 13 equal to that imposed by this state. 14 (3) Royalty income exclusions. For the purpose of computing New York 15 adjusted gross income, a taxpayer shall be allowed to deduct royalty 16 payments directly or indirectly received from a related member during 17 the taxable year to the extent included in the taxpayer's federal taxa- 18 ble income unless such royalty payments would not be required to be 19 added back under paragraph two of this subsection or other similar 20 provision in this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN 21 THIS SUBSECTION SHALL NOT APPLY TO THE PORTION OF THE ROYALTY PAYMENT 22 THAT THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE 23 TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER, MEETS ALL OF THE 24 FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX IN 25 THIS STATE OR ANOTHER STATE OR POSSESSION OF THE UNITED STATES OR A 26 FOREIGN NATION OR SOME COMBINATION THEREOF ON A TAX BASE THAT INCLUDED 27 THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE 28 RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, 29 ACCRUED OR INCURRED SUCH PORTION TO A PERSON THAT IS NOT A RELATED 30 MEMBER; AND (III) THE TRANSACTION GIVING RISE TO THE ROYALTY PAYMENT 31 BETWEEN THE TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID 32 BUSINESS PURPOSE. 33 (II) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE 34 TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND 35 IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE RELATED MEMBER 36 WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN THIS STATE OR 37 ANOTHER STATE OR POSSESSION OF THE UNITED STATES OR SOME COMBINATION 38 THEREOF; (II) THE TAX BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT 39 PAID, ACCRUED OR INCURRED BY THE TAXPAYER; AND (III) THE AGGREGATE 40 EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC- 41 TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT 42 APPLIED TO THE TAXPAYER UNDER SECTION SIX HUNDRED ONE OF THIS ARTICLE 43 FOR THE TAXABLE YEAR. 44 (III) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF 45 THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE 46 AND IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE ROYALTY 47 PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGANIZED 48 UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE 49 RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN- 50 SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III) 51 THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE 52 THAT INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE 53 TAXPAYER; (IV) THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS 54 TAXED IN SUCH COUNTRY AT AN EFFECTIVE TAX RATE AT LEAST EQUAL TO THAT 55 IMPOSED BY THIS STATE; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR S. 2609--D 31 A. 3009--D 1 INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI- 2 NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP. 3 (IV) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE 4 TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE 5 OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN 6 HIS OR HER DISCRETION, AGREE TO THE APPLICATION OR USE OF ALTERNATIVE 7 ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE 8 OF SUCH AGREEMENT THE INCOME OF THE TAXPAYER WOULD NOT BE PROPERLY 9 REFLECTED. 10 S 6. Paragraph 17 of subsection (e) of section 1453 of the tax law is 11 REPEALED. 12 S 7. Subsection (r) of section 1453 of the tax law, as amended by 13 section 5 of part M of chapter 686 of the laws of 2003, subparagraph (A) 14 of paragraph 2 as amended by section 5 of part J of chapter 60 of the 15 laws of 2007, is amended to read as follows: 16 (r) Related members expense add back [and income exclusion]. (1) 17 Definitions. (A) Related member [or members. For purposes of this 18 subsection, the term related member or members means a person, corpo- 19 ration, or other entity, including an entity that is treated as a part- 20 nership or other pass-through vehicle for purposes of federal taxation, 21 whether such person, corporation or entity is a taxpayer or not, where 22 one such person, corporation, or entity, or set of related persons, 23 corporations or entities, directly or indirectly owns or controls a 24 controlling interest in another entity. Such entity or entities may 25 include all taxpayers under article nine, nine-A, thirteen, twenty-two, 26 thirty-two, thirty-three or thirty-three-A of this chapter]. "RELATED 27 MEMBER" MEANS A RELATED PERSON AS DEFINED IN SUBPARAGRAPH (C) OF PARA- 28 GRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE 29 INTERNAL REVENUE CODE, EXCEPT THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED 30 FOR "TEN PERCENT". 31 (B) [Controlling interest. A controlling interest shall mean (i) in 32 the case of a corporation, either thirty percent or more of the total 33 combined voting power of all classes of stock of such corporation, or 34 thirty percent or more of the capital, profits or beneficial interest in 35 such voting stock of such corporation, and (ii) in the case of a part- 36 nership, association, trust or other entity, thirty percent or more of 37 the capital, profits or beneficial interest in such partnership, associ- 38 ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF 39 TAX" MEANS, AS TO ANY STATE OR U.S. POSSESSION, THE MAXIMUM STATUTORY 40 RATE OF TAX IMPOSED BY THE STATE OR POSSESSION ON OR MEASURED BY A 41 RELATED MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT PERCENTAGE, 42 IF ANY, APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF SAID JURIS- 43 DICTION. FOR PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF TAX AS 44 TO ANY STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED MEMBER'S NET 45 INCOME TAX LIABILITY IN SAID JURISDICTION IS REPORTED ON A COMBINED OR 46 CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE RELATED MEMBER 47 WHERE THE REPORTED TRANSACTIONS BETWEEN THE TAXPAYER AND THE RELATED 48 MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS DEFINITION, 49 WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN WHICH A 50 RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI- 51 LAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED MEMBER EITHER MAIN- 52 TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN 53 THAT JURISDICTION, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID 54 JURISDICTION SHALL BE DECREASED TO REFLECT THE STATUTORY RATE OF TAX 55 THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT 56 OR SIMILAR ADJUSTMENT. S. 2609--D 32 A. 3009--D 1 (C) Royalty payments. Royalty payments are payments directly connected 2 to the acquisition, use, maintenance or management, ownership, sale, 3 exchange, or any other disposition of licenses, trademarks, copyrights, 4 trade names, trade dress, service marks, mask works, trade secrets, 5 patents and any other similar types of intangible assets as determined 6 by the commissioner, and [includes] INCLUDE amounts allowable as inter- 7 est deductions under section one hundred sixty-three of the internal 8 revenue code to the extent such amounts are directly or indirectly for, 9 related to or in connection with the acquisition, use, maintenance or 10 management, ownership, sale, exchange or disposition of such intangible 11 assets. 12 (D) Valid business purpose. A valid business purpose is one or more 13 business purposes, other than the avoidance or reduction of taxation, 14 which alone or in combination constitute the primary motivation for some 15 business activity or transaction, which activity or transaction changes 16 in a meaningful way, apart from tax effects, the economic position of 17 the taxpayer. The economic position of the taxpayer includes an increase 18 in the market share of the taxpayer, or the entry by the taxpayer into 19 new business markets. 20 (2) Royalty expense add backs. (A) Except where a taxpayer is included 21 in a combined return with a related member pursuant to subsection (f) of 22 section fourteen hundred sixty-two of this article, for the purpose of 23 computing entire net income, a taxpayer must add back royalty payments 24 [to a] DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION 25 WITH ONE OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE OR MORE 26 related [member] MEMBERS during the taxable year to the extent deduct- 27 ible in calculating federal taxable income. 28 (B) [The add back of royalty payments shall not be required if and to 29 the extent that such payments meet either of the following conditions: 30 (i) the related member during the same taxable year directly or indi- 31 rectly paid or incurred the amount to a person or entity that is not a 32 related member, and such transaction was done for a valid business and 33 the payments are made at arm's length; 34 (ii) the royalty payments are paid or incurred to a related member 35 organized under the laws of a country other than the United States, are 36 subject to a comprehensive income tax treaty between such country and 37 the United States, and are taxed in such country at a tax rate at least 38 equal to that imposed by this state. 39 (3) Royalty income exclusions. For the purpose of computing entire net 40 income, a taxpayer shall be allowed to deduct royalty payments directly 41 or indirectly received from a related member during the taxable year to 42 the extent included in the taxpayer's federal taxable income unless such 43 royalty payments would not be required to be added back under paragraph 44 two of this subsection or other similar provision in this chapter.] 45 EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT 46 APPLY TO THE PORTION OF THE ROYALTY PAYMENT THAT THE TAXPAYER ESTAB- 47 LISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND IN THE FORM 48 SPECIFIED BY THE COMMISSIONER, MEETS ALL OF THE FOLLOWING REQUIREMENTS: 49 (I) THE RELATED MEMBER WAS SUBJECT TO TAX IN THIS STATE OR ANOTHER STATE 50 OR POSSESSION OF THE UNITED STATES OR A FOREIGN NATION OR SOME COMBINA- 51 TION THEREOF ON A TAX BASE THAT INCLUDED THE ROYALTY PAYMENT PAID, 52 ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE RELATED MEMBER DURING THE 53 SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, ACCRUED OR INCURRED SUCH 54 PORTION TO A PERSON THAT IS NOT A RELATED MEMBER; AND (III) THE TRANS- 55 ACTION GIVING RISE TO THE ROYALTY PAYMENT BETWEEN THE TAXPAYER AND THE 56 RELATED MEMBER WAS UNDERTAKEN FOR A VALID BUSINESS PURPOSE. S. 2609--D 33 A. 3009--D 1 (II) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE 2 TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND 3 IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE RELATED MEMBER 4 WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN THIS STATE OR 5 ANOTHER STATE OR POSSESSION OF THE UNITED STATES OR SOME COMBINATION 6 THEREOF; (II) THE TAX BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT 7 PAID, ACCRUED OR INCURRED BY THE TAXPAYER; AND (III) THE AGGREGATE 8 EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC- 9 TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT 10 APPLIED TO THE TAXPAYER UNDER SECTION FOURTEEN HUNDRED FIFTY-FIVE OF 11 THIS ARTICLE FOR THE TAXABLE YEAR. 12 (III) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF 13 THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE 14 AND IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE ROYALTY 15 PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGANIZED 16 UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE 17 RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN- 18 SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III) 19 THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE 20 THAT INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE 21 TAXPAYER; (IV) THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS 22 TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT 23 IMPOSED BY THIS STATE; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR 24 INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI- 25 NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP. 26 (IV) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE 27 TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE 28 OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS 29 OR HER DISCRETION, AGREE TO THE APPLICATION OR USE OF ALTERNATIVE 30 ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE 31 OF SUCH AGREEMENT THE INCOME OF THE TAXPAYER WOULD NOT BE PROPERLY 32 REFLECTED. 33 S 8. Paragraph 14 of subdivision (b) of section 1503 of the tax law, 34 as amended by section 7 of part M of chapter 686 of the laws of 2003, 35 clause (i) of subparagraph (B) as amended by section 6 of part J of 36 chapter 60 of the laws of 2007, is amended to read as follows: 37 (14) Related members expense add back [and income exclusion]. (A) 38 Definitions. (i) Related member [or members. For purposes of this para- 39 graph, the term related member or members means a person, corporation, 40 or other entity, including an entity that is treated as a partnership or 41 other pass-through vehicle for purposes of federal taxation, whether 42 such person, corporation or entity is a taxpayer or not, where one such 43 person, corporation, or entity, or set of related persons, corporations 44 or entities, directly or indirectly owns or controls a controlling 45 interest in another entity. Such entity or entities may include all 46 taxpayers under article nine, nine-A, thirteen, twenty-two, thirty-two, 47 thirty-three or thirty-three-A of this chapter]. "RELATED MEMBER" MEANS 48 A RELATED PERSON AS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF 49 SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVEN- 50 UE CODE, EXCEPT THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN 51 PERCENT". 52 (ii) [Controlling interest. A controlling interest shall mean (I) in 53 the case of a corporation, either thirty percent or more of the total 54 combined voting power of all classes of stock of such corporation, or 55 thirty percent or more of the capital, profits or beneficial interest in 56 such voting stock of such corporation, and (II) in the case of a part- S. 2609--D 34 A. 3009--D 1 nership, association, trust or other entity, thirty percent or more of 2 the capital, profits or beneficial interest in such partnership, associ- 3 ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF 4 TAX" MEANS, AS TO ANY STATE OR U.S. POSSESSION, THE MAXIMUM STATUTORY 5 RATE OF TAX IMPOSED BY THE STATE OR POSSESSION ON OR MEASURED BY A 6 RELATED MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT PERCENTAGE, 7 IF ANY, APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF SAID JURIS- 8 DICTION. FOR PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF TAX AS 9 TO ANY STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED MEMBER'S NET 10 INCOME TAX LIABILITY IN SAID JURISDICTION IS REPORTED ON A COMBINED OR 11 CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE RELATED MEMBER 12 WHERE THE REPORTED TRANSACTIONS BETWEEN THE TAXPAYER AND THE RELATED 13 MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS DEFINITION, 14 WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN WHICH A 15 RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI- 16 LAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED MEMBER EITHER MAIN- 17 TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME 18 IN THAT JURISDICTION, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID 19 JURISDICTION SHALL BE DECREASED TO REFLECT THE STATUTORY RATE OF TAX 20 THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT 21 OR SIMILAR ADJUSTMENT. 22 (iii) Royalty payments. Royalty payments are payments directly 23 connected to the acquisition, use, maintenance or management, ownership, 24 sale, exchange, or any other disposition of licenses, trademarks, copy- 25 rights, trade names, trade dress, service marks, mask works, trade 26 secrets, patents and any other similar types of intangible assets as 27 determined by the commissioner, and [includes] INCLUDE amounts allowable 28 as interest deductions under section one hundred sixty-three of the 29 internal revenue code to the extent such amounts are directly or indi- 30 rectly for, related to or in connection with the acquisition, use, main- 31 tenance or management, ownership, sale, exchange or disposition of such 32 intangible assets. 33 (iv) Valid business purpose. A valid business purpose is one or more 34 business purposes, other than the avoidance or reduction of taxation, 35 which alone or in combination constitute the primary motivation for some 36 business activity or transaction, which activity or transaction changes 37 in a meaningful way, apart from tax effects, the economic position of 38 the taxpayer. The economic position of the taxpayer includes an increase 39 in the market share of the taxpayer, or the entry by the taxpayer into 40 new business markets. 41 (B) Royalty expense add backs. (i) Except where a taxpayer is included 42 in a combined return with a related member pursuant to subdivision (f) 43 of section fifteen hundred fifteen of this article, for the purpose of 44 computing entire net income, a taxpayer must add back royalty payments 45 [to a] DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION 46 WITH ONE OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE OR MORE 47 related [member] MEMBERS during the taxable year to the extent deduct- 48 ible in calculating federal taxable income. 49 (ii) [The add back of royalty payments shall not be required if and to 50 the extent that such payments meet either of the following conditions: 51 (I) the related member during the same taxable year directly or indi- 52 rectly paid or incurred the amount to a person or entity that is not a 53 related member, and such transaction was done for a valid business and 54 the payments are made at arm's length; 55 (II) the royalty payments are paid or incurred to a related member 56 organized under the laws of a country other than the United States, are S. 2609--D 35 A. 3009--D 1 subject to a comprehensive income tax treaty between such country and 2 the United States, and are taxed in such country at a tax rate at least 3 equal to that imposed by this state. 4 (C) Royalty income exclusions. For the purpose of computing entire net 5 income, a taxpayer shall be allowed to deduct royalty payments directly 6 or indirectly received from a related member during the taxable year to 7 the extent included in the taxpayer's federal taxable income unless such 8 royalty payments would not be required to be added back under subpara- 9 graph (B) of this paragraph or other similar provision in this chapter.] 10 EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT 11 APPLY TO THE PORTION OF THE ROYALTY PAYMENT THAT THE TAXPAYER ESTAB- 12 LISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND IN THE FORM 13 SPECIFIED BY THE COMMISSIONER, MEETS ALL OF THE FOLLOWING REQUIREMENTS: 14 (A) THE RELATED MEMBER WAS SUBJECT TO TAX IN THIS STATE OR ANOTHER STATE 15 OR POSSESSION OF THE UNITED STATES OR A FOREIGN NATION OR SOME COMBINA- 16 TION THEREOF ON A TAX BASE THAT INCLUDED THE ROYALTY PAYMENT PAID, 17 ACCRUED OR INCURRED BY THE TAXPAYER; (B) THE RELATED MEMBER DURING THE 18 SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, ACCRUED OR INCURRED SUCH 19 PORTION TO A PERSON THAT IS NOT A RELATED MEMBER; AND (C) THE TRANS- 20 ACTION GIVING RISE TO THE ROYALTY PAYMENT BETWEEN THE TAXPAYER AND THE 21 RELATED MEMBER WAS UNDERTAKEN FOR A VALID BUSINESS PURPOSE. 22 (II) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 23 TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND 24 IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (A) THE RELATED MEMBER 25 WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN THIS STATE OR 26 ANOTHER STATE OR POSSESSION OF THE UNITED STATES OR SOME COMBINATION 27 THEREOF; (B) THE TAX BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT 28 PAID, ACCRUED OR INCURRED BY THE TAXPAYER; AND (C) THE AGGREGATE EFFEC- 29 TIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDICTIONS IS 30 NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT APPLIED TO 31 THE TAXPAYER UNDER SECTION FIFTEEN HUNDRED TWO, FIFTEEN HUNDRED TWO-A, 32 OR FIFTEEN HUNDRED TWO-B OF THIS ARTICLE FOR THE TAXABLE YEAR. 33 (III) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 34 TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND 35 IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (A) THE ROYALTY PAYMENT 36 WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGANIZED UNDER THE 37 LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (B) THE RELATED MEMBER'S 38 INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHENSIVE INCOME TAX 39 TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (C) THE RELATED 40 MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE THAT 41 INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; 42 (D) THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS TAXED IN SUCH 43 COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT IMPOSED BY 44 THIS STATE; AND (E) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED 45 PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSINESS 46 PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP. 47 (IV) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 48 TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE 49 OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS 50 OR HER DISCRETION, AGREE TO THE APPLICATION OR USE OF ALTERNATIVE 51 ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE 52 OF SUCH AGREEMENT THE INCOME OF THE TAXPAYER WOULD NOT BE PROPERLY 53 REFLECTED. 54 S 9. Subdivision (e) of section 11-506 of the administrative code of 55 the city of New York, as added by section 17 of part M of chapter 686 of S. 2609--D 36 A. 3009--D 1 the laws of 2003 and as relettered by chapter 633 of the laws of 2005, 2 is amended to read as follows: 3 (e) Related members expense add back [and income exclusion]. (1) 4 Definitions. (A) Related member [or members. For purposes of this subdi- 5 vision, the term related member or members means a person, corporation, 6 or other entity, including an entity that is treated as a partnership or 7 other pass-through vehicle for purposes of federal taxation, whether 8 such person, corporation or entity is a taxpayer or not, where one such 9 person, corporation, or entity, or set of related persons, corporations 10 or entities, directly or indirectly owns or controls a controlling 11 interest in another entity. Such entity or entities may include all 12 taxpayers under this title]. "RELATED MEMBER" MEANS A RELATED PERSON AS 13 DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF 14 SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVENUE CODE, EXCEPT 15 THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT". 16 (B) [Controlling interest. A controlling interest shall mean (i) in 17 the case of a corporation, either thirty percent or more of the total 18 combined voting power of all classes of stock of such corporation, or 19 thirty percent or more of the capital, profits or beneficial interest in 20 such voting stock of such corporation, and (ii) in the case of a part- 21 nership, association, trust or other entity, thirty percent or more of 22 the capital, profits or beneficial interest in such partnership, associ- 23 ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF 24 TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY 25 THE CITY ON OR MEASURED BY A RELATED MEMBER'S NET INCOME MULTIPLIED BY 26 THE APPORTIONMENT PERCENTAGE, IF ANY, APPLICABLE TO THE RELATED MEMBER 27 UNDER THE LAWS OF SAID JURISDICTION. FOR PURPOSES OF THIS DEFINITION, 28 THE EFFECTIVE RATE OF TAX AS TO ANY CITY IS ZERO WHERE THE RELATED 29 MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON A COMBINED 30 OR CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE RELATED 31 MEMBER WHERE THE REPORTED TRANSACTIONS BETWEEN THE TAXPAYER AND THE 32 RELATED MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS 33 DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH 34 A RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR 35 SIMILAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED MEMBER EITHER 36 MAINTAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST 37 INCOME IN THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID 38 CITY SHALL BE DECREASED TO REFLECT THE STATUTORY RATE OF TAX THAT 39 APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT OR 40 SIMILAR ADJUSTMENT. 41 (C) Royalty payments. Royalty payments are payments directly connected 42 to the acquisition, use, maintenance or management, ownership, sale, 43 exchange, or any other disposition of licenses, trademarks, copyrights, 44 trade names, trade dress, service marks, mask works, trade secrets, 45 patents and any other similar types of intangible assets as determined 46 by the commissioner of finance, and [includes] INCLUDE amounts allowable 47 as interest deductions under section one hundred sixty-three of the 48 internal revenue code to the extent such amounts are directly or indi- 49 rectly for, related to or in connection with the acquisition, use, main- 50 tenance or management, ownership, sale, exchange or disposition of such 51 intangible assets. 52 (D) Valid business purpose. A valid business purpose is one or more 53 business purposes, other than the avoidance or reduction of taxation, 54 which alone or in combination constitute the primary motivation for some 55 business activity or transaction, which activity or transaction changes 56 in a meaningful way, apart from tax effects, the economic position of S. 2609--D 37 A. 3009--D 1 the taxpayer. The economic position of the taxpayer includes an increase 2 in the market share of the taxpayer, or the entry by the taxpayer into 3 new business markets. 4 (2) Royalty expense add backs. (A) For the purpose of computing unin- 5 corporated business entire net income, a taxpayer must add back royalty 6 payments [to a] DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN 7 CONNECTION WITH ONE OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE OR 8 MORE related [member] MEMBERS during the taxable year to the extent 9 deductible in calculating federal taxable income. 10 (B) [The add back of royalty payments shall not be required if and to 11 the extent that such payments meet either of the following conditions: 12 (i) the related member during the same taxable year directly or indi- 13 rectly paid or incurred the amount to a person or entity that is not a 14 related member, and such transaction was done for a valid business and 15 the payments are made at arm's length; 16 (ii) the royalty payments are paid or incurred to a related member 17 organized under the laws of a country other than the United States, are 18 subject to a comprehensive income tax treaty between such country and 19 the United States, and are taxed in such country at a tax rate at least 20 equal to that imposed by this state. 21 (3) Royalty income exclusions. For the purpose of computing unincorpo- 22 rated business entire net income, a taxpayer shall be allowed to deduct 23 royalty payments directly or indirectly received from a related member 24 during the taxable year to the extent included in the taxpayer's federal 25 taxable income unless such royalty payments would not be required to be 26 added back under paragraph two of this subdivision or other similar 27 provision in this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN 28 THIS SUBDIVISION SHALL NOT APPLY TO THE PORTION OF THE ROYALTY PAYMENT 29 THAT THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE 30 TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, MEETS ALL 31 OF THE FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX 32 IN THIS CITY OR ANOTHER CITY WITHIN THE UNITED STATES OR A FOREIGN 33 NATION OR SOME COMBINATION THEREOF ON A TAX BASE THAT INCLUDED THE 34 ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE 35 RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, 36 ACCRUED OR INCURRED SUCH PORTION TO A PERSON THAT IS NOT A RELATED 37 MEMBER; AND (III) THE TRANSACTION GIVING RISE TO THE ROYALTY PAYMENT 38 BETWEEN THE TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID 39 BUSINESS PURPOSE. 40 (II) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF 41 THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE 42 AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE 43 RELATED MEMBER WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN 44 THIS CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME COMBINATION 45 THEREOF; (II) THE TAX BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT 46 PAID, ACCRUED OR INCURRED BY THE TAXPAYER; AND (III) THE AGGREGATE 47 EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC- 48 TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT 49 APPLIED TO THE TAXPAYER UNDER SECTION 11-503 OF THIS CHAPTER FOR THE 50 TAXABLE YEAR. 51 (III) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF 52 THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE 53 AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE 54 ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN- 55 IZED UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE 56 RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN- S. 2609--D 38 A. 3009--D 1 SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III) 2 THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE 3 THAT INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE 4 TAXPAYER; (IV) THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS 5 TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT 6 IMPOSED BY THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR 7 INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI- 8 NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP. 9 (IV) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF 10 THE TAXPAYER AND THE COMMISSIONER OF FINANCE AGREE IN WRITING TO THE 11 APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE 12 COMMISSIONER OF FINANCE MAY, IN HIS OR HER DISCRETION, AGREE TO THE 13 APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN HE OR 14 SHE CONCLUDES THAT IN THE ABSENCE OF SUCH AGREEMENT THE INCOME OF THE 15 TAXPAYER WOULD NOT BE PROPERLY REFLECTED. 16 S 10. Paragraph (n) of subdivision 8 of section 11-602 of the adminis- 17 trative code of the city of New York, as amended by section 19 of part M 18 of chapter 686 of the laws of 2003, is amended to read as follows: 19 (n) Related members expense add back [and income exclusion]. (1) 20 Definitions. (A) Related member [or members. For purposes of this para- 21 graph, the term related member or members means a person, corporation, 22 or other entity, including an entity that is treated as a partnership or 23 other pass-through vehicle for purposes of federal taxation, whether 24 such person, corporation or entity is a taxpayer or not, where one such 25 person, corporation, or entity, or set of related persons, corporations 26 or entities, directly or indirectly owns or controls a controlling 27 interest in another entity. Such entity or entities may include all 28 taxpayers under this title]. "RELATED MEMBER" MEANS A RELATED PERSON AS 29 DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF 30 SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVENUE CODE, EXCEPT 31 THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT". 32 (B) [Controlling interest. A controlling interest shall mean (i) in 33 the case of a corporation, either thirty percent or more of the total 34 combined voting power of all classes of stock of such corporation, or 35 thirty percent or more of the capital, profits or beneficial interest in 36 such voting stock of such corporation, and (ii) in the case of a part- 37 nership, association, trust or other entity, thirty percent or more of 38 the capital, profits or beneficial interest in such partnership, associ- 39 ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF 40 TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY 41 THE CITY ON OR MEASURED BY A RELATED MEMBER'S NET INCOME MULTIPLIED BY 42 THE APPORTIONMENT PERCENTAGE, IF ANY, APPLICABLE TO THE RELATED MEMBER 43 UNDER THE LAWS OF SAID JURISDICTION. FOR PURPOSES OF THIS DEFINITION, 44 THE EFFECTIVE RATE OF TAX AS TO ANY CITY IS ZERO WHERE THE RELATED 45 MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON A COMBINED 46 OR CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE RELATED 47 MEMBER WHERE THE REPORTED TRANSACTIONS BETWEEN THE TAXPAYER AND THE 48 RELATED MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS 49 DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH 50 A RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR 51 SIMILAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED MEMBER EITHER 52 MAINTAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST 53 INCOME IN THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID 54 CITY SHALL BE DECREASED TO REFLECT THE STATUTORY RATE OF TAX THAT 55 APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT OR 56 SIMILAR ADJUSTMENT. S. 2609--D 39 A. 3009--D 1 (C) Royalty payments. Royalty payments are payments directly connected 2 to the acquisition, use, maintenance or management, ownership, sale, 3 exchange, or any other disposition of licenses, trademarks, copyrights, 4 trade names, trade dress, service marks, mask works, trade secrets, 5 patents and any other similar types of intangible assets as determined 6 by the commissioner of finance, and [includes] INCLUDE amounts allowable 7 as interest deductions under section one hundred sixty-three of the 8 internal revenue code to the extent such amounts are directly or indi- 9 rectly for, related to or in connection with the acquisition, use, main- 10 tenance or management, ownership, sale, exchange or disposition of such 11 intangible assets. 12 (D) Valid business purpose. A valid business purpose is one or more 13 business purposes, other than the avoidance or reduction of taxation, 14 which alone or in combination constitute the primary motivation for some 15 business activity or transaction, which activity or transaction changes 16 in a meaningful way, apart from tax effects, the economic position of 17 the taxpayer. The economic position of the taxpayer includes an increase 18 in the market share of the taxpayer, or the entry by the taxpayer into 19 new business markets. 20 (2) Royalty expense add backs. (A) For the purpose of computing entire 21 net income or other applicable taxable basis, a taxpayer must add back 22 royalty payments [to a] DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR 23 INCURRED IN CONNECTION WITH ONE OR MORE DIRECT OR INDIRECT TRANSACTIONS 24 WITH ONE OR MORE related [member] MEMBERS during the taxable year to the 25 extent deductible in calculating federal taxable income. 26 (B) [The add back of royalty payments shall not be required if and to 27 the extent that such payments meet either of the following conditions: 28 (i) the related member during the same taxable year directly or indi- 29 rectly paid or incurred the amount to a person or entity that is not a 30 related member, and such transaction was done for a valid business 31 purpose and the payments are made at arm's length; 32 (ii) the royalty payments are paid or incurred to a related member 33 organized under the laws of a country other than the United States, are 34 subject to a comprehensive income tax treaty between such country and 35 the United States, and are taxed in such country at a tax rate at least 36 equal to that imposed by this state. 37 (3) Royalty income exclusions. For the purpose of computing entire net 38 income or other taxable basis, a taxpayer shall be allowed to deduct 39 royalty payments directly or indirectly received from a related member 40 during the taxable year to the extent included in the taxpayer's federal 41 taxable income unless such royalty payments would not be required to be 42 added back under subparagraph two of this paragraph or other similar 43 provision in this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN 44 THIS PARAGRAPH SHALL NOT APPLY TO THE PORTION OF THE ROYALTY PAYMENT 45 THAT THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE 46 TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, MEETS ALL 47 OF THE FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX 48 IN THIS CITY OR ANOTHER CITY WITHIN THE UNITED STATES OR A FOREIGN 49 NATION OR SOME COMBINATION THEREOF ON A TAX BASE THAT INCLUDED THE 50 ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE 51 RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, 52 ACCRUED OR INCURRED SUCH PORTION TO A PERSON THAT IS NOT A RELATED 53 MEMBER; AND (III) THE TRANSACTION GIVING RISE TO THE ROYALTY PAYMENT 54 BETWEEN THE TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID 55 BUSINESS PURPOSE. S. 2609--D 40 A. 3009--D 1 (II) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 2 TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND 3 IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE 4 RELATED MEMBER WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN 5 THIS CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME COMBINATION 6 THEREOF; (II) THE TAX BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT 7 PAID, ACCRUED OR INCURRED BY THE TAXPAYER; AND (III) THE AGGREGATE 8 EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC- 9 TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT 10 APPLIED TO THE TAXPAYER UNDER SECTION 11-604 OF THIS SUBCHAPTER FOR THE 11 TAXABLE YEAR. 12 (III) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 13 TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND 14 IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE 15 ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN- 16 IZED UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE 17 RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN- 18 SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III) 19 THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE 20 THAT INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE 21 TAXPAYER; (IV) THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS 22 TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT 23 IMPOSED BY THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR 24 INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI- 25 NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP. 26 (IV) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE 27 TAXPAYER AND THE COMMISSIONER OF FINANCE AGREE IN WRITING TO THE APPLI- 28 CATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMIS- 29 SIONER OF FINANCE MAY, IN HIS OR HER DISCRETION, AGREE TO THE APPLICA- 30 TION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE 31 CONCLUDES THAT IN THE ABSENCE OF SUCH AGREEMENT THE INCOME OF THE 32 TAXPAYER WOULD NOT BE PROPERLY REFLECTED. 33 S 11. Subdivision (q) of section 11-641 of the administrative code of 34 the city of New York, as added by section 21 of part M of chapter 686 of 35 the laws of 2003, is amended to read as follows: 36 (q) Related members expense add back [and income exclusion]. (1) 37 Definitions. (A) Related member [or members. For purposes of this subdi- 38 vision, the term related member or members means a person, corporation, 39 or other entity, including an entity that is treated as a partnership or 40 other pass-through vehicle for purposes of federal taxation, whether 41 such person, corporation or entity is a taxpayer or not, where one such 42 person, corporation, or entity, or set of related persons, corporations 43 or entities, directly or indirectly owns or controls a controlling 44 interest in another entity. Such entity or entities may include all 45 taxpayers under this title]. "RELATED MEMBER" MEANS A RELATED PERSON AS 46 DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF 47 SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVENUE CODE, EXCEPT 48 THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT". 49 (B) [Controlling interest. A controlling interest shall mean (i) in 50 the case of a corporation, either thirty percent or more of the total 51 combined voting power of all classes of stock of such corporation, or 52 thirty percent or more of the capital, profits or beneficial interest in 53 such voting stock of such corporation, and (ii) in the case of a part- 54 nership, association, trust or other entity, thirty percent or more of 55 the capital, profits or beneficial interest in such partnership, associ- 56 ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE S. 2609--D 41 A. 3009--D 1 OF TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED 2 BY THE CITY ON OR MEASURED BY A RELATED MEMBER'S NET INCOME MULTIPLIED 3 BY THE APPORTIONMENT PERCENTAGE, IF ANY, APPLICABLE TO THE RELATED 4 MEMBER UNDER THE LAWS OF SAID JURISDICTION. FOR PURPOSES OF THIS DEFI- 5 NITION, THE EFFECTIVE RATE OF TAX AS TO ANY CITY IS ZERO WHERE THE 6 RELATED MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON A 7 COMBINED OR CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE 8 RELATED MEMBER WHERE THE REPORTED TRANSACTIONS BETWEEN THE TAXPAYER AND 9 THE RELATED MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS 10 DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH 11 A RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR 12 SIMILAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED MEMBER EITHER 13 MAINTAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST 14 INCOME IN THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID 15 CITY SHALL BE DECREASED TO REFLECT THE STATUTORY RATE OF TAX THAT 16 APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT OR 17 SIMILAR ADJUSTMENT. 18 (C) Royalty payments. Royalty payments are payments directly connected 19 to the acquisition, use, maintenance or management, ownership, sale, 20 exchange, or any other disposition of licenses, trademarks, copyrights, 21 trade names, trade dress, service marks, mask works, trade secrets, 22 patents and any other similar types of intangible assets as determined 23 by the commissioner of finance, and [includes] INCLUDE amounts allowable 24 as interest deductions under section one hundred sixty-three of the 25 internal revenue code to the extent such amounts are directly or indi- 26 rectly for, related to or in connection with the acquisition, use, main- 27 tenance or management, ownership, sale, exchange or disposition of such 28 intangible assets. 29 (D) Valid business purpose. A valid business purpose is one or more 30 business purposes, other than the avoidance or reduction of taxation, 31 which alone or in combination constitute the primary motivation for some 32 business activity or transaction, which activity or transaction changes 33 in a meaningful way, apart from tax effects, the economic position of 34 the taxpayer. The economic position of the taxpayer includes an increase 35 in the market share of the taxpayer, or the entry by the taxpayer into 36 new business markets. 37 (2) Royalty expense add backs. (A) For the purpose of computing entire 38 net income, a taxpayer must add back royalty payments [to a] DIRECTLY OR 39 INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION WITH ONE OR MORE 40 DIRECT OR INDIRECT TRANSACTIONS WITH ONE OR MORE related [member] 41 MEMBERS during the taxable year to the extent deductible in calculating 42 federal taxable income. 43 (B) [The add back of royalty payments shall not be required if and to 44 the extent that such payments meet either of the following conditions: 45 (i) the related member during the same taxable year directly or indi- 46 rectly paid or incurred the amount to a person or entity that is not a 47 related member, and such transaction was done for a valid business and 48 the payments are made at arm's length; 49 (ii) the royalty payments are paid or incurred to a related member 50 organized under the laws of a country other than the United States, are 51 subject to a comprehensive income tax treaty between such country and 52 the United States, and are taxed in such country at a tax rate at least 53 equal to that imposed by this state. 54 (3) Royalty income exclusions. For the purpose of computing entire net 55 income, a taxpayer shall be allowed to deduct royalty payments directly 56 or indirectly received from a related member during the taxable year to S. 2609--D 42 A. 3009--D 1 the extent included in the taxpayer's federal taxable income unless such 2 royalty payments would not be required to be added back under paragraph 3 two of this subdivision or other similar provision in this chapter.] 4 EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT 5 APPLY TO THE PORTION OF THE ROYALTY PAYMENT THAT THE TAXPAYER ESTAB- 6 LISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND IN THE FORM 7 SPECIFIED BY THE COMMISSIONER OF FINANCE, MEETS ALL OF THE FOLLOWING 8 REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX IN THIS CITY OR 9 ANOTHER CITY WITHIN THE UNITED STATES OR A FOREIGN NATION OR SOME COMBI- 10 NATION THEREOF ON A TAX BASE THAT INCLUDED THE ROYALTY PAYMENT PAID, 11 ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE RELATED MEMBER DURING THE 12 SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, ACCRUED OR INCURRED SUCH 13 PORTION TO A PERSON THAT IS NOT A RELATED MEMBER; AND (III) THE TRANS- 14 ACTION GIVING RISE TO THE ROYALTY PAYMENT BETWEEN THE TAXPAYER AND THE 15 RELATED MEMBER WAS UNDERTAKEN FOR A VALID BUSINESS PURPOSE. 16 (II) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF 17 THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE 18 AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE 19 RELATED MEMBER WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN 20 THIS CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME COMBINATION 21 THEREOF; (II) THE TAX BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT 22 PAID, ACCRUED OR INCURRED BY THE TAXPAYER; AND (III) THE AGGREGATE 23 EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC- 24 TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT 25 APPLIED TO THE TAXPAYER UNDER SECTION 11-643.5 OF THIS PART FOR THE 26 TAXABLE YEAR. 27 (III) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF 28 THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE 29 AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE 30 ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN- 31 IZED UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE 32 RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN- 33 SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III) 34 THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE 35 THAT INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE 36 TAXPAYER; (IV) THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS 37 TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT 38 IMPOSED BY THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR 39 INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI- 40 NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP. 41 (IV) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF 42 THE TAXPAYER AND THE COMMISSIONER OF FINANCE AGREE IN WRITING TO THE 43 APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE 44 COMMISSIONER OF FINANCE MAY, IN HIS OR HER DISCRETION, AGREE TO THE 45 APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN HE OR 46 SHE CONCLUDES THAT IN THE ABSENCE OF SUCH AGREEMENT THE INCOME OF THE 47 TAXPAYER WOULD NOT BE PROPERLY REFLECTED. 48 S 12. Subdivision (t) of section 11-1712 of the administrative code of 49 the city of New York, as added by section 26 of part M of chapter 686 of 50 the laws of 2003, is amended to read as follows: 51 (t) Related members expense add back [and income exclusion]. (1) 52 Definitions. (A) Related member [or members. For purposes of this subdi- 53 vision, the term related member or members means a person, corporation, 54 or other entity, including an entity that is treated as a partnership or 55 other pass-through vehicle for purposes of federal taxation, whether 56 such person, corporation or entity is a taxpayer or not, where one such S. 2609--D 43 A. 3009--D 1 person, corporation or entity, or set of related persons, corporations 2 or entities, directly or indirectly owns or controls a controlling 3 interest in another entity. Such entity or entities may include all 4 taxpayers under this title]. "RELATED MEMBER" MEANS A RELATED PERSON AS 5 DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF 6 SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVENUE CODE, EXCEPT 7 THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT". 8 (B) [Controlling interest. A controlling interest shall mean (i) in 9 the case of a corporation, either thirty percent or more of the total 10 combined voting power of all classes of stock of such corporation, or 11 thirty percent or more of the capital, profits or beneficial interest in 12 such voting stock of such corporation, and (ii) in the case of a part- 13 nership, association, trust or other entity, thirty percent or more of 14 the capital, profits or beneficial interest in such partnership, associ- 15 ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF 16 TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY 17 THE CITY ON OR MEASURED BY A RELATED MEMBER'S NET INCOME MULTIPLIED BY 18 THE APPORTIONMENT PERCENTAGE, IF ANY, APPLICABLE TO THE RELATED MEMBER 19 UNDER THE LAWS OF SAID JURISDICTION. FOR PURPOSES OF THIS DEFINITION, 20 THE EFFECTIVE RATE OF TAX AS TO ANY CITY IS ZERO WHERE THE RELATED 21 MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON A COMBINED 22 OR CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE RELATED 23 MEMBER WHERE THE REPORTED TRANSACTIONS BETWEEN THE TAXPAYER AND THE 24 RELATED MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS 25 DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH 26 A RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR 27 SIMILAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED MEMBER EITHER 28 MAINTAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST 29 INCOME IN THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID 30 CITY SHALL BE DECREASED TO REFLECT THE STATUTORY RATE OF TAX THAT 31 APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT OR 32 SIMILAR ADJUSTMENT. 33 (C) Royalty payments. Royalty payments are payments directly connected 34 to the acquisition, use, maintenance or management, ownership, sale, 35 exchange, or any other disposition of licenses, trademarks, copyrights, 36 trade names, trade dress, service marks, mask works, trade secrets, 37 patents and any other similar types of intangible assets as determined 38 by the state commissioner of taxation and finance, and [includes] 39 INCLUDE amounts allowable as interest deductions under section one 40 hundred sixty-three of the internal revenue code to the extent such 41 amounts are directly or indirectly for, related to or in connection with 42 the acquisition, use, maintenance or management, ownership, sale, 43 exchange or disposition of such intangible assets. 44 (D) Valid business purpose. A valid business purpose is one or more 45 business purposes, other than the avoidance or reduction of taxation, 46 which alone or in combination constitute the primary motivation for some 47 business activity or transaction, which activity or transaction changes 48 in a meaningful way, apart from tax effects, the economic position of 49 the taxpayer. The economic position of the taxpayer includes an increase 50 in the market share of the taxpayer, or the entry by the taxpayer into 51 new business markets. 52 (2) Royalty expense add backs. (A) For the purpose of computing city 53 adjusted gross income, a taxpayer must add back royalty payments [to a] 54 DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION WITH ONE 55 OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE OR MORE related S. 2609--D 44 A. 3009--D 1 [member] MEMBERS during the taxable year to the extent deductible in 2 calculating federal taxable income. 3 (B) [The add back of royalty payments shall not be required if and to 4 the extent that such payments meet either of the following conditions: 5 (i) the related member during the same taxable year directly or indi- 6 rectly paid or incurred the amount to a person or entity that is not a 7 related member, and such transaction was done for a valid business and 8 the payments are made at arm's length; 9 (ii) the royalty payments are paid or incurred to a related member 10 organized under the laws of a country other than the United States, are 11 subject to a comprehensive income tax treaty between such country and 12 the United States, and are taxed in such country at a tax rate at least 13 equal to that imposed by this state. 14 (3) Royalty income exclusions. (A) For the purpose of computing city 15 adjusted gross income, a taxpayer shall be allowed to deduct royalty 16 payments directly or indirectly received from a related member during 17 the taxable year to the extent included in the taxpayer's federal taxa- 18 ble income unless such royalty payments would not be required to be 19 added back under paragraph two of this subdivision or other similar 20 provision in this title.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN 21 THIS SUBDIVISION SHALL NOT APPLY TO THE PORTION OF THE ROYALTY PAYMENT 22 THAT THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE 23 TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, MEETS ALL 24 OF THE FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX 25 IN THIS CITY OR ANOTHER CITY WITHIN THE UNITED STATES OR A FOREIGN 26 NATION OR SOME COMBINATION THEREOF ON A TAX BASE THAT INCLUDED THE 27 ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE 28 RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, 29 ACCRUED OR INCURRED SUCH PORTION TO A PERSON THAT IS NOT A RELATED 30 MEMBER; AND (III) THE TRANSACTION GIVING RISE TO THE ROYALTY PAYMENT 31 BETWEEN THE TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID 32 BUSINESS PURPOSE. 33 (II) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF 34 THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE 35 AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE 36 RELATED MEMBER WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN 37 THIS CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME COMBINATION 38 THEREOF; (II) THE TAX BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT 39 PAID, ACCRUED OR INCURRED BY THE TAXPAYER; AND (III) THE AGGREGATE 40 EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC- 41 TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT 42 APPLIED TO THE TAXPAYER UNDER SECTION 11-1701 OF THIS CHAPTER FOR THE 43 TAXABLE YEAR. 44 (III) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF 45 THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE 46 AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE 47 ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN- 48 IZED UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE 49 RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN- 50 SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III) 51 THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE 52 THAT INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE 53 TAXPAYER; (IV) THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS 54 TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT 55 IMPOSED BY THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR S. 2609--D 45 A. 3009--D 1 INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI- 2 NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP. 3 (IV) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF 4 THE TAXPAYER AND THE COMMISSIONER OF FINANCE AGREE IN WRITING TO THE 5 APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE 6 COMMISSIONER OF FINANCE MAY, IN HIS OR HER DISCRETION, AGREE TO THE 7 APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN HE OR 8 SHE CONCLUDES THAT IN THE ABSENCE OF SUCH AGREEMENT THE INCOME OF THE 9 TAXPAYER WOULD NOT BE PROPERLY REFLECTED. 10 S 13. This act shall take effect immediately and shall apply to taxa- 11 ble years beginning on or after January 1, 2013. 12 PART F 13 Section 1. Subparagraph (A) of paragraph 1, and paragraphs 4 and 5 of 14 subsection (oo) of section 606 of the tax law, subparagraph (A) of para- 15 graph 1 as amended by chapter 472 of the laws of 2010 and paragraph 4 as 16 amended and paragraph 5 as added by chapter 239 of the laws of 2009, are 17 amended to read as follows: 18 (A) For taxable years beginning on or after January first, two thou- 19 sand ten and before January first, two thousand [fifteen] TWENTY, a 20 taxpayer shall be allowed a credit as hereinafter provided, against the 21 tax imposed by this article, in an amount equal to one hundred percent 22 of the amount of credit allowed the taxpayer with respect to a certified 23 historic structure under subsection (a) (2) of section 47 of the federal 24 internal revenue code with respect to a certified historic structure 25 located within the state. Provided, however, the credit shall not exceed 26 five million dollars. For taxable years beginning on or after January 27 first, two thousand [fifteen] TWENTY, a taxpayer shall be allowed a 28 credit as hereinafter provided, against the tax imposed by this article, 29 in an amount equal to thirty percent of the amount of credit allowed the 30 taxpayer with respect to a certified historic structure under subsection 31 (a)(2) of section 47 of the federal internal revenue code with respect 32 to a certified historic structure located within the state; provided, 33 however, the credit shall not exceed one hundred thousand dollars. 34 (4) If the amount of the credit [allowable under this subsection for 35 any taxable year shall exceed the taxpayer's tax for such year, the 36 excess may be carried over to the following year or years, and may be 37 applied against the taxpayer's tax for such year or years] ALLOWED UNDER 38 THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR 39 SUCH YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE 40 CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX 41 HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST 42 SHALL BE PAID THEREON. 43 (5) To be eligible for the credit allowable under this subsection the 44 rehabilitation project shall be in whole or in part [a targeted area 45 residence within the meaning of section 143(j) of the internal revenue 46 code or] located within a census tract which is identified as being at 47 or below one hundred percent of the state median family income [in the 48 most recent federal census] AS CALCULATED AS OF JANUARY FIRST OF EACH 49 YEAR USING THE MOST RECENT FIVE YEAR ESTIMATE FROM THE AMERICAN COMMUNI- 50 TY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU. 51 S 2. Subparagraph (A) of paragraph 1, and paragraphs 4 and 5 of subdi- 52 vision 40 of section 210 of the tax law, subparagraph (A) of paragraph 1 53 and paragraph 4 as amended and paragraph 5 as added by chapter 472 of 54 the laws of 2010, are amended to read as follows: S. 2609--D 46 A. 3009--D 1 (A) For taxable years beginning on or after January first, two thou- 2 sand ten and before January first, two thousand [fifteen] TWENTY, a 3 taxpayer shall be allowed a credit as hereinafter provided, against the 4 tax imposed by this article, in an amount equal to one hundred percent 5 of the amount of credit allowed the taxpayer with respect to a certified 6 historic structure under subsection (a) (2) of section 47 of the federal 7 internal revenue code with respect to a certified historic structure 8 located within the state. Provided, however, the credit shall not exceed 9 five million dollars. For taxable years beginning on or after January 10 first, two thousand [fifteen] TWENTY, a taxpayer shall be allowed a 11 credit as hereinafter provided, against the tax imposed by this article, 12 in an amount equal to thirty percent of the amount of credit allowed the 13 taxpayer with respect to a certified historic structure under subsection 14 (a)(2) of section 47 of the federal internal revenue code with respect 15 to a certified historic structure located within the state. Provided, 16 however, the credit shall not exceed one hundred thousand dollars. 17 (4) The credit allowed under this subdivision for any taxable year 18 shall not reduce the tax due for such year to less than the higher of 19 the amounts prescribed in paragraphs (c) and (d) of subdivision one of 20 this section. However, if the amount of the credit [allowable under this 21 subdivision for any taxable year shall exceed the taxpayer's tax for 22 such year, the excess may be carried over to the following year or 23 years, and may be deducted from the taxpayer's tax for such year or 24 years] ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE 25 TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH 26 TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR 27 REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND 28 EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF 29 SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER 30 NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON. 31 (5) To be eligible for the credit allowable under this subdivision, 32 the rehabilitation project shall be in whole or in part [a targeted area 33 residence within the meaning of section 143(j) of the internal revenue 34 code or] located within a census tract which is identified as being at 35 or below one hundred percent of the state median family income [in the 36 most recent federal census] AS CALCULATED AS OF JANUARY FIRST OF EACH 37 YEAR USING THE MOST RECENT FIVE YEAR ESTIMATE FROM THE AMERICAN COMMUNI- 38 TY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU. 39 S 3. Subparagraph (A) of paragraph 1, and paragraphs 4 and 5 of 40 subsection (u) of section 1456 of the tax law, as added by chapter 472 41 of the laws of 2010, are amended to read as follows: 42 (A) For taxable years beginning on or after January first, two thou- 43 sand ten and before January first, two thousand [fifteen] TWENTY, a 44 taxpayer shall be allowed a credit as hereinafter provided, against the 45 tax imposed by this article, in an amount equal to one hundred percent 46 of the amount of credit allowed the taxpayer with respect to a certified 47 historic structure under subsection (a)(2) of section 47 of the federal 48 internal revenue code with respect to a certified historic structure 49 located within the state. Provided, however, the credit shall not exceed 50 five million dollars. For taxable years beginning on or after January 51 first, two thousand [fifteen] TWENTY, a taxpayer shall be allowed a 52 credit as hereinafter provided, against the tax imposed by this article, 53 in an amount equal to thirty percent of the amount of credit allowed the 54 taxpayer with respect to a certified historic structure under subsection 55 (a)(2) of section 47 of the federal internal revenue code with respect S. 2609--D 47 A. 3009--D 1 to a certified historic structure located within the state. Provided, 2 however, the credit shall not exceed one hundred thousand dollars. 3 (4) The credit allowed under this subsection for any taxable year 4 shall not reduce the tax to less than the dollar amount fixed as a mini- 5 mum tax by subsection (b) of section fourteen hundred fifty-five of this 6 article. [If the amount of credit allowable under this subsection for 7 any taxable year reduces the tax to such amount, the excess may be 8 carried over to the following year or years, and may be deducted from 9 the taxpayer's tax for such year or years.] HOWEVER, IF THE AMOUNT OF 10 CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE 11 TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH 12 TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR 13 REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND 14 EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF 15 SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER 16 NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON. 17 (5) To be eligible for the credit allowable under this subsection the 18 rehabilitation project shall be in whole or in part [a targeted area 19 residence within the meaning of section 143(j) of the internal revenue 20 code or] located within a census tract which is identified as being at 21 or below one hundred percent of the state median family income [in the 22 most recent federal census] AS CALCULATED AS OF JANUARY FIRST OF EACH 23 YEAR USING THE MOST RECENT FIVE YEAR ESTIMATE FROM THE AMERICAN COMMUNI- 24 TY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU. 25 S 4. Subparagraph (A) of paragraph 1, and paragraphs 4 and 5 of subdi- 26 vision (y) of section 1511 of the tax law, as added by chapter 472 of 27 the laws of 2010, are amended to read as follows: 28 (A) For taxable years beginning on or after January first, two thou- 29 sand ten and before January first, two thousand [fifteen] TWENTY, a 30 taxpayer shall be allowed a credit as hereinafter provided, against the 31 tax imposed by this article, in an amount equal to one hundred percent 32 of the amount of credit allowed the taxpayer with respect to a certified 33 historic structure under subsection (a)(2) of section 47 of the federal 34 internal revenue code with respect to a certified historic structure 35 located within the state. Provided, however, the credit shall not exceed 36 five million dollars. For taxable years beginning on or after January 37 first, two thousand [fifteen] TWENTY, a taxpayer shall be allowed a 38 credit as hereinafter provided, against the tax imposed by this article, 39 in an amount equal to thirty percent of the amount of credit allowed the 40 taxpayer with respect to a certified historic structure under subsection 41 (a)(2) of section 47 of the federal internal revenue code with respect 42 to a certified historic structure located within the state. Provided, 43 however, the credit shall not exceed one hundred thousand dollars. 44 (4) The credit allowed under this subdivision for any taxable year 45 shall not reduce the tax due for such year to less than the minimum 46 fixed by paragraph four of subdivision (a) of section fifteen hundred 47 two or section fifteen hundred two-a of this article, whichever is 48 applicable. [If the amount of the credit allowable under this subdivi- 49 sion for any taxable year reduces the tax to such amount, the excess may 50 be carried over to the following year or years, and may be deducted from 51 the taxpayer's tax for such year or years.] HOWEVER, IF THE AMOUNT OF 52 CREDITS ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE 53 TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH 54 TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR 55 REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND 56 EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF S. 2609--D 48 A. 3009--D 1 SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER 2 NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON. 3 (5) To be eligible for the credit allowable under this subdivision, 4 the rehabilitation project shall be in whole or in part [a targeted area 5 residence within the meaning of section 143(j) of the internal revenue 6 code or] located within a census tract which is identified as being at 7 or below one hundred percent of the state median family income [in the 8 most recent federal census] AS CALCULATED AS OF JANUARY FIRST OF EACH 9 YEAR USING THE MOST RECENT FIVE YEAR ESTIMATE FROM THE AMERICAN COMMUNI- 10 TY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU. 11 S 5. This act shall take effect immediately and shall apply to taxable 12 years beginning on and after January 1, 2013; provided however the 13 amendments to paragraph 4 of subsection (oo) of section 606 of the tax 14 law made by section one of this act, the amendments to paragraph 4 of 15 subdivision 40 of section 210 of the tax law made by section two of this 16 act, the amendments to paragraph 4 of subsection (u) of section 1456 of 17 the tax law made by section three of this act and the amendments to 18 paragraph 4 of subdivision (y) of section 1511 of the tax law made by 19 section four of this act shall take effect January 1, 2015 and shall 20 apply to taxable years beginning on and after January 1, 2015 for quali- 21 fied rehabilitation placed in service on or after January 1, 2015. 22 PART G 23 Section 1. Section 187-b of the tax law, as amended by section 14 of 24 part W-1 of chapter 109 of the laws of 2006, is amended to read as 25 follows: 26 S 187-b. Alternative fuels [credit] AND ELECTRIC VEHICLE RECHARGING 27 PROPERTY CREDIT. 1. General. A taxpayer shall be allowed a credit, to be 28 credited against the taxes imposed under sections one hundred eighty- 29 three, one hundred eighty-four, and one hundred eighty-five of this 30 article. Such credit, to be computed as hereinafter provided, shall be 31 allowed for alternative fuel vehicle refueling AND ELECTRIC VEHICLE 32 RECHARGING property placed in service during the taxable year. Provided, 33 however, that the amount of such credit allowable against the tax 34 imposed by section one hundred eighty-four of this article shall be the 35 excess of the credit allowed by this section over the amount of such 36 credit allowable against the tax imposed by section one hundred eighty- 37 three of this article. 38 2. Alternative fuel vehicle refueling property AND ELECTRIC VEHICLE 39 RECHARGING PROPERTY. The credit under this section for alternative fuel 40 vehicle refueling AND ELECTRIC VEHICLE RECHARGING property shall equal 41 FOR EACH INSTALLATION OF PROPERTY THE LESSER OF FIVE THOUSAND DOLLARS OR 42 fifty percent of the cost of any such property: 43 (a) which is located in this state; [and] 44 (b) [for which a credit is allowed under section thirty C of the 45 internal revenue code but not including alternative fuel vehicle refuel- 46 ing property relating to a qualified hybrid vehicle as such vehicle is 47 defined in subparagraph (B) of paragraph three of subsection (p) of 48 section six hundred six of this chapter] WHICH CONSTITUTES ALTERNATIVE 49 FUEL VEHICLE REFUELING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY; 50 AND 51 (C) FOR WHICH NONE OF THE COST HAS BEEN PAID FOR FROM THE PROCEEDS OF 52 GRANTS, INCLUDING GRANTS FROM THE NEW YORK STATE ENERGY RESEARCH AND 53 DEVELOPMENT AUTHORITY OR THE NEW YORK POWER AUTHORITY. S. 2609--D 49 A. 3009--D 1 3. Definitions. (a) The term "alternative fuel vehicle refueling prop- 2 erty" MEANS ALL OF THE EQUIPMENT NEEDED TO DISPENSE ANY FUEL AT LEAST 3 EIGHTY-FIVE PERCENT OF THE VOLUME OF WHICH CONSISTS OF ONE OR MORE OF 4 THE FOLLOWING: NATURAL GAS, LIQUIFIED NATURAL GAS, LIQUIFIED PETROLEUM, 5 OR HYDROGEN. 6 (B) THE TERM "ELECTRIC VEHICLE RECHARGING PROPERTY" means [any such 7 property which is qualified within the meaning of section thirty C of 8 the internal revenue code, but shall not include alternative fuel vehi- 9 cle refueling property relating to a qualified hybrid vehicle as such 10 vehicle is defined in subparagraph (B) of paragraph three of subsection 11 (p) of section six hundred six of this chapter] ALL THE EQUIPMENT NEEDED 12 TO CONVEY ELECTRIC POWER FROM THE ELECTRIC GRID OR ANOTHER POWER SOURCE 13 TO AN ONBOARD VEHICLE ENERGY STORAGE SYSTEM. 14 [(b) The term "qualified hybrid vehicle" shall have the same meaning 15 as provided for under subparagraph (B) of paragraph three of subsection 16 (p) of section six hundred six of this chapter.] 17 4. Carryovers. In no event shall the credit under this section be 18 allowed in an amount which will reduce the tax payable to less than the 19 applicable minimum tax fixed by section one hundred eighty-three or one 20 hundred eighty-five of this article. If, however, the amount of credit 21 allowable under this section for any taxable year reduces the tax to 22 such amount, any amount of credit not deductible in such taxable year 23 may be carried over to the following year or years and may be deducted 24 from the taxpayer's tax for such year or years. 25 5. Credit recapture[; Alternative fuel vehicle refueling property]. 26 If, at any time before the end of its recovery period, alternative fuel 27 vehicle refueling OR ELECTRIC VEHICLE RECHARGING property ceases to be 28 qualified, a recapture amount must be added back in the year in which 29 such cessation occurs. 30 (i) Cessation of qualification. Alternative fuel vehicle refueling 31 property OR ELECTRIC VEHICLE RECHARGING PROPERTY ceases to be qualified 32 if: 33 (I) the property no longer qualifies as [property described in section 34 thirty C of the internal revenue code] ALTERNATIVE FUEL VEHICLE REFUEL- 35 ING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY; or 36 (II) fifty percent or more of the use of the property in a taxable 37 year is other than a trade or business in this state; or 38 (III) the taxpayer receiving the credit under this section sells or 39 disposes of the property and knows or has reason to know that the prop- 40 erty will be used in a manner described in this subparagraph. 41 (ii) Recapture amount. The recapture amount is equal to the credit 42 allowable under this section multiplied by a fraction, the numerator of 43 which is the total recovery period for the property minus the number of 44 recovery years prior to, but not including, the recapture year, and the 45 denominator of which is the total recovery period. 46 6. Termination. The credit allowed by subdivision two of this section 47 shall not apply in taxable years beginning after December thirty-first, 48 two thousand [ten] SEVENTEEN. 49 S 2. Subdivision 24 of section 210 of the tax law, as amended by 50 section 15 of part W-1 of chapter 109 of the laws of 2006, is amended to 51 read as follows: 52 24. Alternative fuels AND ELECTRIC VEHICLE RECHARGING PROPERTY credit. 53 (a) General. A taxpayer shall be allowed a credit, to be computed as 54 hereinafter provided, against the tax imposed by this article for alter- 55 native fuel vehicle refueling AND ELECTRIC VEHICLE RECHARGING property 56 placed in service during the taxable year. S. 2609--D 50 A. 3009--D 1 (b) Alternative fuel vehicle refueling property AND ELECTRIC VEHICLE 2 RECHARGING PROPERTY. The credit under this subdivision for alternative 3 fuel vehicle refueling AND ELECTRIC VEHICLE RECHARGING property shall 4 equal FOR EACH INSTALLATION OF PROPERTY THE LESSER OF FIVE THOUSAND 5 DOLLARS OR fifty percent of the cost of any such property: 6 (i) which is located in this state; [and] 7 (ii) [for which a credit is allowed under section thirty C of the 8 internal revenue code but not including alternative fuel refueling prop- 9 erty relating to a qualified hybrid vehicle as such vehicle is defined 10 in subparagraph (B) of paragraph three of subsection (p) of section six 11 hundred six of this chapter] WHICH CONSTITUTES ALTERNATIVE FUEL VEHICLE 12 REFUELING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY; AND 13 (III) FOR WHICH NONE OF THE COST HAS BEEN PAID FOR FROM THE PROCEEDS 14 OF GRANTS, INCLUDING GRANTS FROM THE NEW YORK STATE ENERGY RESEARCH AND 15 DEVELOPMENT AUTHORITY OR THE NEW YORK POWER AUTHORITY. 16 (c) Definitions. (I) The term "alternative fuel vehicle refueling 17 property" MEANS ALL OF THE EQUIPMENT NEEDED TO DISPENSE ANY FUEL AT 18 LEAST EIGHTY-FIVE PERCENT OF THE VOLUME OF WHICH CONSISTS OF ONE OR MORE 19 OF THE FOLLOWING: NATURAL GAS, LIQUIFIED NATURAL GAS, LIQUIFIED PETROLE- 20 UM, OR HYDROGEN. 21 (II) THE TERM "ELECTRIC VEHICLE RECHARGING PROPERTY" means [any such 22 property which is qualified within the meaning of section thirty C of 23 the internal revenue code but shall not include alternative fuel vehicle 24 refueling property relating to a qualified hybrid vehicle as such vehi- 25 cle is defined in subparagraph (B) of paragraph three of subsection (p) 26 of section six hundred six of this chapter] ALL OF THE EQUIPMENT NEEDED 27 TO CONVEY ELECTRIC POWER FROM THE ELECTRIC GRID OR ANOTHER POWER SOURCE 28 TO AN ONBOARD VEHICLE ENERGY STORAGE SYSTEM. 29 (d) Carryovers. In no event shall the credit under this subdivision be 30 allowed in an amount which will reduce the tax payable to less than the 31 higher of the amounts prescribed in paragraphs (c) and (d) of subdivi- 32 sion one of this section. Provided, however, that if the amount of cred- 33 it allowable under this subdivision for any taxable year reduces the tax 34 to such amount, any amount of credit not deductible in such taxable year 35 may be carried over to the following year or years and may be deducted 36 from the taxpayer's tax for such year or years. 37 (e) Credit recapture. [(i) Alternative fuel vehicle refueling proper- 38 ty.] If, at any time before the end of its recovery period, alternative 39 fuel vehicle refueling OR ELECTRIC VEHICLE RECHARGING property ceases to 40 be qualified, a recapture amount must be added back in the year in which 41 such cessation occurs. 42 (A) Alternative fuel vehicle refueling OR ELECTRIC VEHICLE RECHARGING 43 property ceases to be qualified if: 44 (1) the property no longer qualifies as [property described in section 45 thirty C of the internal revenue code] ALTERNATIVE FUEL VEHICLE REFUEL- 46 ING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY; or 47 (2) fifty percent or more of the use of the property in a taxable year 48 is other than in a trade or business in this state; or 49 (3) the taxpayer receiving the credit under this subdivision sells or 50 disposes of the property and knows or has reason to know that the prop- 51 erty will be used in a manner described in clauses one and two of this 52 subparagraph. 53 (B) Recapture amount. The recapture amount is equal to the credit 54 allowable under this subdivision multiplied by a fraction, the numerator 55 of which is the total recovery period for the property minus the number S. 2609--D 51 A. 3009--D 1 of recovery years prior to, but not including, the recapture year, and 2 the denominator of which is the total recovery period. 3 (f) [Affiliates. (i) If a credit under this subdivision is allowed to 4 a taxpayer with respect to a taxable year, the action taken by such 5 taxpayer which resulted in such credit being allowed thereto may, at the 6 election of the taxpayer and an affiliate thereof, be ascribed to such 7 affiliate. Where such affiliate, based on such ascription, is allowed 8 such credit and deducts from the tax otherwise due the amount of such 9 credit, such credit shall be deemed in all respects to have been allowed 10 to such affiliate, provided that any action or inaction by the taxpayer 11 which constitutes an event of recapture described in paragraph (e) of 12 this subdivision shall be ascribed to the affiliate and shall constitute 13 an event of recapture with respect to the credit allowed to the affil- 14 iate pursuant to this subdivision. 15 (ii) Notwithstanding any other provision of law to the contrary, in 16 the case of the credit provided for under this subdivision being allowed 17 to, or asserted to be allowed to, an affiliate, pursuant to subparagraph 18 (i) of this paragraph, the commissioner shall have the same powers with 19 respect to examining the books and records of the taxpayer, and have 20 such other powers of investigation with respect to the taxpayer, as are 21 afforded under this chapter with respect to a taxpayer which has 22 deducted the credit allowed under this section from tax otherwise due, 23 as if it were the taxpayer which had deducted such credit from tax 24 otherwise due. 25 (iii) The term "affiliate" shall mean a corporation substantially all 26 the capital stock of which is owned or controlled either directly or 27 indirectly by the taxpayer, or which owns or controls either directly or 28 indirectly substantially all the capital stock of the taxpayer, or 29 substantially all the capital stock of which is owned or controlled 30 either directly or indirectly by interests which own or control either 31 directly or indirectly substantially all the capital stock of the 32 taxpayer. 33 (g)] Termination. The credit allowed by paragraph (b) of this subdivi- 34 sion shall not apply in taxable years beginning after December thirty- 35 first, two thousand [ten] SEVENTEEN. 36 S 3. Subsection (p) of section 606 of the tax law, as amended by 37 section 16 of part W-1 of chapter 109 of the laws of 2006, is amended to 38 read as follows: 39 (p) Alternative fuels AND ELECTRIC VEHICLE RECHARGING PROPERTY credit. 40 (1) General. A taxpayer shall be allowed a credit, to be computed as 41 hereinafter provided, against the tax imposed by this article, for 42 alternative fuel vehicle refueling AND ELECTRIC VEHICLE RECHARGING prop- 43 erty placed in service during the taxable year. 44 (2) Alternative fuel vehicle refueling property AND ELECTRIC VEHICLE 45 RECHARGING PROPERTY. The credit under this subsection for [clean-fuel 46 vehicle refueling] ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY OR ELEC- 47 TRIC VEHICLE RECHARGING property shall equal FOR EACH INSTALLATION OF 48 PROPERTY THE LESSER OF FIVE THOUSAND DOLLARS OR fifty percent of the 49 cost of any such property 50 (A) which is located in this state [and]; 51 (B) [for which a credit is allowed under section thirty C of the 52 internal revenue code but not including alternative fuel vehicle refuel- 53 ing property relating to a qualified hybrid vehicle as such vehicle is 54 defined in subparagraph (B) of paragraph three of this subsection] WHICH 55 CONSTITUTES ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY OR ELECTRIC 56 VEHICLE RECHARGING PROPERTY; AND S. 2609--D 52 A. 3009--D 1 (C) FOR WHICH NONE OF THE COST HAS BEEN PAID FOR FROM THE PROCEEDS OF 2 GRANTS, INCLUDING GRANTS FROM THE NEW YORK STATE ENERGY RESEARCH AND 3 DEVELOPMENT AUTHORITY OR THE NEW YORK POWER AUTHORITY. 4 (3) Definitions. (A) The term "alternative fuel vehicle refueling 5 property" MEANS ALL OF THE EQUIPMENT NEEDED TO DISPENSE ANY FUEL AT 6 LEAST EIGHTY-FIVE PERCENT OF THE VOLUME OF WHICH CONSISTS OF ONE OR MORE 7 OF THE FOLLOWING: NATURAL GAS, LIQUIFIED NATURAL GAS, LIQUIFIED PETROLE- 8 UM, OR HYDROGEN; AND 9 (B) THE TERM "ELECTRIC VEHICLE RECHARGING PROPERTY" means [any such 10 property which is qualified within the meaning of section thirty C of 11 the internal revenue code, but such term shall not include alternative 12 fuel vehicle refueling property relating to a qualified hybrid vehicle 13 as such vehicle is defined in subparagraph (B) of this paragraph] ALL 14 THE EQUIPMENT NEEDED TO CONVEY ELECTRIC POWER FROM THE ELECTRIC GRID OR 15 ANOTHER POWER SOURCE TO AN ONBOARD VEHICLE ENERGY STORAGE SYSTEM. 16 [(B) The term "qualified hybrid vehicle" means a motor vehicle, as 17 defined in section one hundred twenty-five of the vehicle and traffic 18 law,, that: 19 (i) draws propulsion energy from both 20 (a) an internal combustion engine (or heat engine that uses combusti- 21 ble fuel); and 22 (b) an energy storage device; and 23 (ii) employs a regenerative vehicle braking system that recovers waste 24 energy to charge such energy storage device.] 25 (4) Carryovers. If the amount of credit allowable under this 26 subsection shall exceed the taxpayer's tax for such year, the excess may 27 be carried over to the following year or years and may be deducted from 28 the taxpayer's tax for such year or years. 29 (5) Credit recapture. (A) [Vehicles. 30 (i) If, within three full years from the date a qualified hybrid vehi- 31 cle or a vehicle of which alternative fuel vehicle property is a part is 32 placed in service, such qualified hybrid vehicle or vehicle of which 33 alternative fuel vehicle property is a part] IF, AT ANY TIME BEFORE THE 34 END OF ITS RECOVERY PERIOD, ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 35 OR ELECTRIC VEHICLE RECHARGING PROPERTY ceases to be qualified, a recap- 36 ture amount must be added back in the tax year in which such cessation 37 occurs. 38 [(ii)] (B) Cessation of qualification. [(I) A qualified hybrid vehicle 39 ceases to be qualified if 40 (a) it is modified by the taxpayer so that it no longer meets the 41 requirements of a qualified hybrid vehicle as defined in subparagraph 42 (B) of paragraph three of this subsection. 43 (b) the taxpayer receiving the credit under this subsection sells or 44 disposes of the vehicle and knows or has reason to know that the vehicle 45 will be so modified. 46 (B) Alternative fuel vehicle refueling property. (i) If, at any time 47 before the end of its recovery period, alternative fuel vehicle refuel- 48 ing property ceases to be qualified, a recapture amount must be added 49 back in the year in which such cessation occurs. 50 (ii) Cessation of qualification. Clean-fuel vehicle refueling] ALTER- 51 NATIVE FUEL VEHICLE REFUELING PROPERTY OR ELECTRIC VEHICLE RECHARGING 52 property ceases to be qualified if: 53 [(I)] (I) the property no longer qualifies as [property described in 54 section thirty C of the internal revenue code] ALTERNATIVE FUEL VEHICLE 55 REFUELING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY, or S. 2609--D 53 A. 3009--D 1 [(II)] (II) fifty percent or more of the use of the property in a 2 taxable year is other than in a trade or business in this state, or 3 [(III)] (III) the taxpayer receiving the credit under this subsection 4 sells or disposes of the property and knows or has reason to know that 5 the property will be used in a manner described in [item (I)] CLAUSE (I) 6 or [(II)] (II) of this [clause] SUBPARAGRAPH. 7 [(iii)] (C) Recapture amount. The recapture amount is equal to the 8 credit allowable under this subsection multiplied by a fraction, the 9 numerator of which is the total recovery period for the property minus 10 the number of recovery years prior to, but not including, the recapture 11 year, and the denominator of which is the total recovery period. 12 (6) Termination. The credit allowed by [paragraph two of] this 13 subsection shall not apply in taxable years beginning after December 14 thirty-first, two thousand [ten] SEVENTEEN. 15 S 4. Clause (ix) of subparagraph (B) of paragraph 1 of subsection (i) 16 of section 606 of the tax law, as amended by section 7 of part C-1 of 17 chapter 57 of the laws of 2009, is amended to read as follows: 18 (ix) Alternative fuels [Cost] AMOUNT OF CREDIT 19 AND ELECTRIC VEHICLE under subdivision twenty-four 20 RECHARGING PROPERTY of section two hundred ten 21 credit under subsection (p) 22 S 5. This act shall take effect immediately and shall apply to taxable 23 years beginning on or after January 1, 2013 for property placed in 24 service on or after such date. 25 PART H 26 Section 1. Section 23 of part U of chapter 61 of the laws of 2011 27 amending the real property tax law and other laws relating to establish- 28 ing standards for electronic real property tax administration, as 29 amended by section 1 of part G of chapter 59 of the laws of 2012, is 30 amended to read as follows: 31 S 23. This act shall take effect immediately; provided, however, that: 32 (a) the amendments to section 29 of the tax law made by section thir- 33 teen of this act shall apply to tax documents filed or required to be 34 filed on or after the sixtieth day after which this act shall have 35 become a law and shall expire and be deemed repealed December 31, [2013] 36 2016, provided however that the amendments to paragraph 4 of subdivision 37 (a) of section 29 of the tax law and paragraph 2 of subdivision (e) of 38 section 29 of the tax law made by section thirteen of this act with 39 regard to individual taxpayers shall take effect September 15, 2011 but 40 only if the commissioner of taxation and finance has reported in the 41 report required by section seventeen-b of this act that the percentage 42 of individual taxpayers electronically filing their 2010 income tax 43 returns is less than eighty-five percent; provided that the commissioner 44 of taxation and finance shall notify the legislative bill drafting 45 commission of the date of the issuance of such report in order that the 46 commission may maintain an accurate and timely effective data base of 47 the official text of the laws of the state of New York in furtherance of 48 effectuating the provisions of section 44 of the legislative law and 49 section 70-b of the public officers law; 50 (b) sections fourteen, fifteen, sixteen and seventeen of this act 51 shall take effect September 15, 2011 but only if the commissioner of 52 taxation and finance has reported in the report required by section S. 2609--D 54 A. 3009--D 1 seventeen-b of this act that the percentage of individual taxpayers 2 electronically filing their 2010 income tax returns is less than eight- 3 y-five percent; 4 (c) sections fourteen-a and fifteen-a of this act shall take effect 5 September 15, 2011 and expire and be deemed repealed December 31, 2012 6 but shall take effect only if the commissioner of taxation and finance 7 has reported in the report required by section seventeen-b of this act 8 that the percentage of individual taxpayers electronically filing their 9 2010 income tax returns is eighty-five percent or greater; 10 (d) sections fourteen-b, fifteen-b, sixteen-a and seventeen-a of this 11 act shall take effect January 1, [2014] 2017 but only if the commission- 12 er of taxation and finance has reported in the report required by 13 section seventeen-b of this act that the percentage of individual 14 taxpayers electronically filing their 2010 income tax returns is less 15 than eighty-five percent; and 16 (e) sections twenty-one and twenty-one-a of this act shall expire and 17 be deemed repealed December 31, [2013] 2016. 18 S 2. This act shall take effect immediately. 19 PART I 20 Intentionally omitted 21 PART J 22 Section 1. Section 862 of the general municipal law, as added by chap- 23 ter 1030 of the laws of 1969, is amended to read as follows: 24 S 862. Restrictions on funds of the agency. (1) No funds of the agency 25 shall be used in respect of any project if the completion thereof would 26 result in the removal of an industrial or manufacturing plant of the 27 project occupant from one area of the state to another area of the state 28 or in the abandonment of one or more plants or facilities of the project 29 occupant located within the state, provided, however, that neither 30 restriction shall apply if the agency shall determine on the basis of 31 the application before it that the project is reasonably necessary to 32 discourage the project occupant from removing such other plant or facil- 33 ity to a location outside the state or is reasonably necessary to 34 preserve the competitive position of the project occupant in its respec- 35 tive industry. 36 (2) (A) EXCEPT AS PROVIDED IN PARAGRAPH (B) OF THIS SUBDIVISION, NO 37 FINANCIAL ASSISTANCE OF THE AGENCY SHALL BE PROVIDED IN RESPECT OF ANY 38 PROJECT WHERE FACILITIES OR PROPERTY THAT ARE PRIMARILY USED IN MAKING 39 RETAIL SALES TO CUSTOMERS WHO PERSONALLY VISIT SUCH FACILITIES CONSTI- 40 TUTE MORE THAN ONE-THIRD OF THE TOTAL PROJECT COST. FOR THE PURPOSES OF 41 THIS ARTICLE, "RETAIL SALES" SHALL MEAN: (I) SALES BY A REGISTERED 42 VENDOR UNDER ARTICLE TWENTY-EIGHT OF THE TAX LAW PRIMARILY ENGAGED IN 43 THE RETAIL SALE OF TANGIBLE PERSONAL PROPERTY, AS DEFINED IN SUBPARA- 44 GRAPH (I) OF PARAGRAPH FOUR OF SUBDIVISION (B) OF SECTION ELEVEN HUNDRED 45 ONE OF THE TAX LAW; OR (II) SALES OF A SERVICE TO SUCH CUSTOMERS. 46 EXCEPT, HOWEVER, THAT TOURISM DESTINATION PROJECTS SHALL NOT BE PROHIB- 47 ITED BY THIS SUBDIVISION. FOR THE PURPOSE OF THIS PARAGRAPH, "TOURISM 48 DESTINATION" SHALL MEAN A LOCATION OR FACILITY WHICH IS LIKELY TO 49 ATTRACT A SIGNIFICANT NUMBER OF VISITORS FROM OUTSIDE THE ECONOMIC 50 DEVELOPMENT REGION AS ESTABLISHED BY SECTION TWO HUNDRED THIRTY OF THE 51 ECONOMIC DEVELOPMENT LAW, IN WHICH THE PROJECT IS LOCATED. S. 2609--D 55 A. 3009--D 1 (B) NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH (A) OF THIS SUBDIVI- 2 SION, FINANCIAL ASSISTANCE MAY, HOWEVER, BE PROVIDED TO A PROJECT WHERE 3 FACILITIES OR PROPERTY THAT ARE PRIMARILY USED IN MAKING RETAIL SALES OF 4 GOODS OR SERVICES TO CUSTOMERS WHO PERSONALLY VISIT SUCH FACILITIES TO 5 OBTAIN SUCH GOODS OR SERVICES CONSTITUTE MORE THAN ONE-THIRD OF THE 6 TOTAL PROJECT COST, WHERE: (I) THE PREDOMINANT PURPOSE OF THE PROJECT 7 WOULD BE TO MAKE AVAILABLE GOODS OR SERVICES WHICH WOULD NOT, BUT FOR 8 THE PROJECT, BE REASONABLY ACCESSIBLE TO THE RESIDENTS OF THE CITY, 9 TOWN, OR VILLAGE WITHIN WHICH THE PROPOSED PROJECT WOULD BE LOCATED 10 BECAUSE OF A LACK OF REASONABLY ACCESSIBLE RETAIL TRADE FACILITIES 11 OFFERING SUCH GOODS OR SERVICES; OR (II) THE PROJECT IS LOCATED IN A 12 HIGHLY DISTRESSED AREA. 13 (C) WITH RESPECT TO PROJECTS AUTHORIZED PURSUANT TO PARAGRAPH (B) OF 14 THIS SUBDIVISION, NO PROJECT SHALL BE APPROVED UNLESS THE AGENCY SHALL 15 FIND AFTER THE PUBLIC HEARING REQUIRED BY SECTION EIGHT HUNDRED 16 FIFTY-NINE-A OF THIS TITLE THAT UNDERTAKING THE PROJECT WILL SERVE THE 17 PUBLIC PURPOSES OF THIS ARTICLE BY PRESERVING PERMANENT, PRIVATE SECTOR 18 JOBS OR INCREASING THE OVERALL NUMBER OF PERMANENT, PRIVATE SECTOR JOBS 19 IN THE STATE. WHERE THE AGENCY MAKES SUCH A FINDING, PRIOR TO PROVIDING 20 FINANCIAL ASSISTANCE TO THE PROJECT BY THE AGENCY, THE CHIEF EXECUTIVE 21 OFFICER OF THE MUNICIPALITY FOR WHOSE BENEFIT THE AGENCY WAS CREATED 22 SHALL CONFIRM THE PROPOSED ACTION OF THE AGENCY. 23 S 2. The general municipal law is amended by adding a new section 875 24 to read as follows: 25 S 875. SPECIAL PROVISIONS APPLICABLE TO STATE SALES AND COMPENSATING 26 USE TAXES AND CERTAIN TYPES OF FACILITIES. 1. FOR PURPOSES OF THIS 27 SECTION: "STATE SALES AND USE TAXES" MEANS SALES AND COMPENSATING USE 28 TAXES AND FEES IMPOSED BY ARTICLE TWENTY-EIGHT OR TWENTY-EIGHT-A OF THE 29 TAX LAW BUT EXCLUDING SUCH TAXES IMPOSED IN A CITY BY SECTION ELEVEN 30 HUNDRED SEVEN OR ELEVEN HUNDRED EIGHT OF SUCH ARTICLE TWENTY-EIGHT. 31 "IDA" MEANS AN INDUSTRIAL DEVELOPMENT AGENCY ESTABLISHED BY THIS ARTICLE 32 OR AN INDUSTRIAL DEVELOPMENT AUTHORITY CREATED BY THE PUBLIC AUTHORITIES 33 LAW. "COMMISSIONER" MEANS THE COMMISSIONER OF TAXATION AND FINANCE. 34 2. AN IDA SHALL KEEP RECORDS OF THE AMOUNT OF STATE AND LOCAL SALES 35 AND USE TAX EXEMPTION BENEFITS PROVIDED TO EACH PROJECT AND EACH AGENT 36 OR PROJECT OPERATOR AND SHALL MAKE SUCH RECORDS AVAILABLE TO THE COMMIS- 37 SIONER UPON REQUEST. SUCH IDA SHALL ALSO, WITHIN THIRTY DAYS OF PROVID- 38 ING FINANCIAL ASSISTANCE TO A PROJECT THAT INCLUDES ANY AMOUNT OF STATE 39 SALES AND USE TAX EXEMPTION BENEFITS, REPORT TO THE COMMISSIONER THE 40 AMOUNT OF SUCH BENEFITS FOR SUCH PROJECT, THE PROJECT TO WHICH THEY ARE 41 BEING PROVIDED, TOGETHER WITH SUCH OTHER INFORMATION AND SUCH SPECIFICI- 42 TY AND DETAIL AS THE COMMISSIONER MAY PRESCRIBE. THIS REPORT MAY BE 43 MADE IN CONJUNCTION WITH THE STATEMENT REQUIRED BY SUBDIVISION NINE OF 44 SECTION EIGHT HUNDRED SEVENTY-FOUR OF THIS TITLE OR IT MAY BE MADE AS A 45 SEPARATE REPORT, AT THE DISCRETION OF THE COMMISSIONER. AN IDA THAT 46 FAILS TO MAKE SUCH RECORDS AVAILABLE TO THE COMMISSIONER OR TO FILE SUCH 47 REPORTS SHALL BE PROHIBITED FROM PROVIDING STATE SALES AND USE TAX 48 EXEMPTION BENEFITS FOR ANY PROJECT UNLESS AND UNTIL SUCH IDA COMES INTO 49 COMPLIANCE WITH ALL SUCH REQUIREMENTS. 50 3. (A) AN IDA SHALL INCLUDE WITHIN ITS RESOLUTIONS AND PROJECT DOCU- 51 MENTS ESTABLISHING ANY PROJECT OR APPOINTING AN AGENT OR PROJECT OPERA- 52 TOR FOR ANY PROJECT THE TERMS AND CONDITIONS IN THIS SUBDIVISION, AND 53 EVERY AGENT, PROJECT OPERATOR OR OTHER PERSON OR ENTITY THAT SHALL ENJOY 54 STATE SALES AND USE TAX EXEMPTION BENEFITS PROVIDED BY AN IDA SHALL 55 AGREE TO SUCH TERMS AS A CONDITION PRECEDENT TO RECEIVING OR BENEFITING 56 FROM SUCH STATE SALES AND USE EXEMPTIONS BENEFITS. S. 2609--D 56 A. 3009--D 1 (B) THE IDA SHALL RECOVER, RECAPTURE, RECEIVE, OR OTHERWISE OBTAIN 2 FROM AN AGENT, PROJECT OPERATOR OR OTHER PERSON OR ENTITY STATE SALES 3 AND USE EXEMPTIONS BENEFITS TAKEN OR PURPORTED TO BE TAKEN BY ANY SUCH 4 PERSON TO WHICH THE PERSON IS NOT ENTITLED OR WHICH ARE IN EXCESS OF THE 5 AMOUNTS AUTHORIZED OR WHICH ARE FOR PROPERTY OR SERVICES NOT AUTHORIZED 6 OR TAKEN IN CASES WHERE SUCH AGENT OR PROJECT OPERATOR, OR OTHER PERSON 7 OR ENTITY FAILED TO COMPLY WITH A MATERIAL TERM OR CONDITION TO USE 8 PROPERTY OR SERVICES IN THE MANNER REQUIRED BY THE PERSON'S AGREEMENT 9 WITH THE IDA. SUCH AGENT OR PROJECT OPERATOR, OR OTHER PERSON OR ENTITY 10 SHALL COOPERATE WITH THE IDA IN ITS EFFORTS TO RECOVER, RECAPTURE, 11 RECEIVE, OR OTHERWISE OBTAIN SUCH STATE SALES AND USE EXEMPTIONS BENE- 12 FITS AND SHALL PROMPTLY PAY OVER ANY SUCH AMOUNTS TO THE IDA THAT IT 13 REQUESTS. THE FAILURE TO PAY OVER SUCH AMOUNTS TO THE IDA SHALL BE 14 GROUNDS FOR THE COMMISSIONER TO ASSESS AND DETERMINE STATE SALES AND USE 15 TAXES DUE FROM THE PERSON UNDER ARTICLE TWENTY-EIGHT OF THE TAX LAW, 16 TOGETHER WITH ANY RELEVANT PENALTIES AND INTEREST DUE ON SUCH AMOUNTS. 17 (C) IF AN IDA RECOVERS, RECAPTURES, RECEIVES, OR OTHERWISE OBTAINS, 18 ANY AMOUNT OF STATE SALES AND USE TAX EXEMPTION BENEFITS FROM AN AGENT, 19 PROJECT OPERATOR OR OTHER PERSON OR ENTITY, THE IDA SHALL, WITHIN THIRTY 20 DAYS OF COMING INTO POSSESSION OF SUCH AMOUNT, REMIT IT TO THE COMMIS- 21 SIONER, TOGETHER WITH SUCH INFORMATION AND REPORT THAT THE COMMISSIONER 22 DEEMS NECESSARY TO ADMINISTER PAYMENT OVER OF SUCH AMOUNT. AN IDA SHALL 23 JOIN THE COMMISSIONER AS A PARTY IN ANY ACTION OR PROCEEDING THAT THE 24 IDA COMMENCES TO RECOVER, RECAPTURE, OBTAIN, OR OTHERWISE SEEK THE 25 RETURN OF, STATE SALES AND USE TAX EXEMPTION BENEFITS FROM AN AGENT, 26 PROJECT OPERATOR OR OTHER PERSON OR ENTITY. 27 (D) AN IDA SHALL PREPARE AN ANNUAL COMPLIANCE REPORT DETAILING ITS 28 TERMS AND CONDITIONS DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION AND 29 ITS ACTIVITIES AND EFFORTS TO RECOVER, RECAPTURE, RECEIVE, OR OTHERWISE 30 OBTAIN STATE SALES AND USE EXEMPTIONS BENEFITS DESCRIBED IN PARAGRAPH 31 (B) OF THIS SUBDIVISION, TOGETHER WITH SUCH OTHER INFORMATION AS THE 32 COMMISSIONER AND THE COMMISSIONER OF ECONOMIC DEVELOPMENT MAY REQUIRE. 33 THE REPORT REQUIRED BY THIS SUBDIVISION SHALL BE FILED WITH THE COMMIS- 34 SIONER, THE DIRECTOR OF THE DIVISION OF THE BUDGET, THE COMMISSIONER OF 35 ECONOMIC DEVELOPMENT, THE STATE COMPTROLLER, THE GOVERNING BODY OF THE 36 MUNICIPALITY FOR WHOSE BENEFIT THE AGENCY WAS CREATED, AND MAY BE 37 INCLUDED WITH THE ANNUAL FINANCIAL STATEMENT REQUIRED BY PARAGRAPH (B) 38 OF SUBDIVISION ONE OF SECTION EIGHT HUNDRED FIFTY-NINE OF THIS TITLE. 39 SUCH REPORT REQUIRED BY THIS SUBDIVISION SHALL BE FILED REGARDLESS OF 40 WHETHER THE IDA IS REQUIRED TO FILE SUCH FINANCIAL STATEMENT DESCRIBED 41 BY SUCH PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION EIGHT HUNDRED 42 FIFTY-NINE. THE FAILURE TO FILE OR SUBSTANTIALLY COMPLETE THE REPORT 43 REQUIRED BY THIS SUBDIVISION SHALL BE DEEMED TO BE THE FAILURE TO FILE 44 OR SUBSTANTIALLY COMPLETE THE STATEMENT REQUIRED BY SUCH PARAGRAPH (B) 45 OF SUBDIVISION ONE OF SUCH SECTION EIGHT HUNDRED FIFTY-NINE, AND THE 46 CONSEQUENCES SHALL BE THE SAME AS PROVIDED IN PARAGRAPH (E) OF SUBDIVI- 47 SION ONE OF SUCH SECTION EIGHT HUNDRED FIFTY-NINE. 48 (E) THIS SUBDIVISION SHALL APPLY TO ANY AMOUNTS OF STATE SALES AND USE 49 TAX EXEMPTION BENEFITS THAT AN IDA RECOVERS, RECAPTURES, RECEIVES, OR 50 OTHERWISE OBTAINS, REGARDLESS OF WHETHER THE IDA OR THE AGENT, PROJECT 51 OPERATOR OR OTHER PERSON OR ENTITY CHARACTERIZES SUCH BENEFITS RECOV- 52 ERED, RECAPTURED, RECEIVED, OR OTHERWISE OBTAINED, AS A PENALTY OR 53 LIQUIDATED OR CONTRACT DAMAGES OR OTHERWISE. THE PROVISIONS OF THIS 54 SUBDIVISION SHALL ALSO APPLY TO ANY INTEREST OR PENALTY THAT THE IDA 55 IMPOSES ON ANY SUCH AMOUNTS OR THAT ARE IMPOSED ON SUCH AMOUNTS BY 56 OPERATION OF LAW OR BY JUDICIAL ORDER OR OTHERWISE. ANY SUCH AMOUNTS OR S. 2609--D 57 A. 3009--D 1 PAYMENTS THAT AN IDA RECOVERS, RECAPTURES, RECEIVES, OR OTHERWISE 2 OBTAINS, TOGETHER WITH ANY INTEREST OR PENALTIES THEREON, SHALL BE 3 DEEMED TO BE STATE SALES AND USE TAXES AND THE IDA SHALL RECEIVE ANY 4 SUCH AMOUNTS OR PAYMENTS, WHETHER AS A RESULT OF COURT ACTION OR OTHER- 5 WISE, AS TRUSTEE FOR AND ON ACCOUNT OF THE STATE. 6 4. THE COMMISSIONER SHALL DEPOSIT AND DISPOSE OF ANY AMOUNT OF ANY 7 PAYMENTS OR MONEYS RECEIVED FROM OR PAID OVER BY AN IDA OR FROM OR BY 8 ANY PERSON OR ENTITY, OR RECEIVED PURSUANT TO AN ACTION OR PROCEEDING 9 COMMENCED BY AN IDA, TOGETHER WITH ANY INTEREST OR PENALTIES THEREON, 10 PURSUANT TO SUBDIVISION THREE OF THIS SECTION, AS STATE SALES AND USE 11 TAXES IN ACCORD WITH THE PROVISIONS OF ARTICLE TWENTY-EIGHT OF THE TAX 12 LAW. THE AMOUNT OF ANY SUCH PAYMENTS OR MONEYS, TOGETHER WITH ANY 13 INTEREST OR PENALTIES THEREON, SHALL BE ATTRIBUTED TO THE TAXES IMPOSED 14 BY SECTIONS ELEVEN HUNDRED FIVE AND ELEVEN HUNDRED TEN, ON THE ONE HAND, 15 AND SECTION ELEVEN HUNDRED NINE OF THE TAX LAW, ON THE OTHER HAND, OR TO 16 ANY LIKE TAXES OR FEES IMPOSED BY SUCH ARTICLE, BASED ON THE PROPORTION 17 THAT THE RATES OF SUCH TAXES OR FEES BEAR TO EACH OTHER, UNLESS THERE IS 18 EVIDENCE TO SHOW THAT ONLY ONE OR THE OTHER OF SUCH TAXES OR FEES WAS 19 IMPOSED OR RECEIVED OR PAID OVER. 20 5. THE STATEMENT THAT AN IDA IS REQUIRED BY SUBDIVISION NINE OF 21 SECTION EIGHT HUNDRED SEVENTY-FOUR OF THIS ARTICLE TO FILE WITH THE 22 COMMISSIONER SHALL NOT BE CONSIDERED AN EXEMPTION OR OTHER CERTIFICATE 23 OR DOCUMENT UNDER ARTICLE TWENTY-EIGHT OR TWENTY-NINE OF THE TAX LAW. 24 THE IDA SHALL NOT REPRESENT TO ANY AGENT, PROJECT OPERATOR, OR OTHER 25 PERSON OR ENTITY THAT A COPY OF SUCH STATEMENT MAY SERVE AS A SALES OR 26 USE TAX EXEMPTION CERTIFICATE OR DOCUMENT. NO AGENT OR PROJECT OPERATOR 27 MAY TENDER A COPY OF SUCH STATEMENT TO ANY PERSON REQUIRED TO COLLECT 28 SALES OR USE TAXES AS THE BASIS TO MAKE ANY PURCHASE EXEMPT FROM TAX. NO 29 SUCH PERSON REQUIRED TO COLLECT SALES OR USE TAXES MAY ACCEPT SUCH A 30 STATEMENT IN LIEU OF COLLECTING ANY TAX REQUIRED TO BE COLLECTED. THE 31 CIVIL AND CRIMINAL PENALTIES FOR MISUSE OF A COPY OF SUCH STATEMENT AS 32 AN EXEMPTION CERTIFICATE OR DOCUMENT OR FOR FAILURE TO PAY OR COLLECT 33 TAX SHALL BE AS PROVIDED IN THE TAX LAW. IN ADDITION, THE USE BY AN IDA 34 OR AGENT, PROJECT OPERATOR, OR OTHER PERSON OR ENTITY OF SUCH STATEMENT, 35 OR THE IDA'S RECOMMENDATION OF THE USE OR TENDERING OF SUCH STATEMENT, 36 AS SUCH AN EXEMPTION CERTIFICATE OR DOCUMENT SHALL BE DEEMED TO BE, 37 UNDER ARTICLES TWENTY-EIGHT AND THIRTY-SEVEN OF THE TAX LAW, THE ISSU- 38 ANCE OF A FALSE OR FRAUDULENT EXEMPTION CERTIFICATE OR DOCUMENT WITH 39 INTENT TO EVADE TAX. 40 6. THE COMMISSIONER IS HEREBY AUTHORIZED TO AUDIT THE RECORDS, 41 ACTIONS, AND PROCEEDINGS OF AN IDA AND OF ITS AGENTS AND PROJECT OPERA- 42 TORS TO ENSURE THAT THE IDA AND ITS AGENTS AND PROJECT OPERATORS COMPLY 43 WITH ALL THE REQUIREMENTS OF THIS SECTION. ANY INFORMATION THE COMMIS- 44 SIONER FINDS IN THE COURSE OF SUCH AUDIT MAY BE USED BY THE COMMISSIONER 45 TO ASSESS AND DETERMINE STATE AND LOCAL TAXES OF THE IDA'S AGENT OR 46 PROJECT OPERATOR. 47 7. IN ADDITION TO ANY OTHER REPORTING OR FILING REQUIREMENTS AN IDA 48 HAS UNDER THIS ARTICLE OR OTHER LAW, AN IDA SHALL ALSO REPORT AND MAKE 49 AVAILABLE ON THE INTERNET, WITHOUT CHARGE, COPIES OF ITS RESOLUTIONS AND 50 AGREEMENTS APPOINTING AN AGENT OR PROJECT OPERATOR OR OTHERWISE RELATED 51 TO ANY PROJECT IT ESTABLISHES. IT SHALL ALSO PROVIDE, WITHOUT CHARGE, 52 COPIES OF ALL SUCH REPORTS AND INFORMATION TO A PERSON WHO ASKS FOR IT 53 IN WRITING OR IN PERSON. THE IDA MAY, AT THE REQUEST OF ITS AGENT OR 54 PROJECT OPERATOR DELETE FROM ANY SUCH COPIES POSTED ON THE INTERNET OR 55 PROVIDED TO A PERSON DESCRIBED IN THE PRIOR SENTENCE PORTIONS OF ITS S. 2609--D 58 A. 3009--D 1 RECORDS THAT ARE SPECIFICALLY EXEMPTED FROM DISCLOSURE UNDER ARTICLE SIX 2 OF THE PUBLIC OFFICERS LAW. 3 8. IN CONSULTATION WITH THE COMMISSIONER OF ECONOMIC DEVELOPMENT, THE 4 COMMISSIONER OF TAXATION AND FINANCE IS HEREBY AUTHORIZED TO ADOPT RULES 5 AND REGULATIONS AND TO ISSUE PUBLICATIONS AND OTHER GUIDANCE IMPLEMENT- 6 ING THE PROVISIONS OF THIS SECTION AND OF THE OTHER SECTIONS OF THIS 7 ARTICLE RELATING TO ANY STATE OR LOCAL TAX OR FEE, OR EXEMPTION OR 8 EXCLUSION THEREFROM, THAT THE COMMISSIONER ADMINISTERS AND THAT MAY BE 9 AFFECTED BY ANY PROVISION OF THIS ARTICLE, AND ANY SUCH RULES AND REGU- 10 LATIONS OF THE COMMISSIONER SHALL HAVE THE SAME FORCE AND EFFECT WITH 11 RESPECT TO SUCH TAXES AND FEES, OR AMOUNTS MEASURED IN RESPECT OF THEM, 12 AS IF THEY HAD BEEN ADOPTED BY THE COMMISSIONER PURSUANT TO THE AUTHORI- 13 TY OF THE TAX LAW. 14 9. TO THE EXTENT THAT A PROVISION OF THIS SECTION CONFLICTS WITH A 15 PROVISION OF ANY OTHER SECTION OF THIS ARTICLE, THE PROVISIONS OF THIS 16 SECTION SHALL CONTROL. 17 S 3. The public authorities law is amended by adding a new section 18 1963-b to read as follows: 19 S 1963-B. SPECIAL PROVISIONS APPLICABLE TO STATE SALES AND COMPENSAT- 20 ING USE TAXES AND CERTAIN TYPES OF FACILITIES. THE PROVISIONS OF SECTION 21 EIGHT HUNDRED SEVENTY-FIVE OF THE GENERAL MUNICIPAL LAW SHALL APPLY TO 22 THE PROVISIONS OF THIS TITLE AND TO THE AUTHORITY CREATED BY THIS TITLE 23 WITH THE SAME FORCE AND EFFECT AS IF THE PROVISIONS OF SUCH SECTION 24 EIGHT HUNDRED SEVENTY-FIVE HAD BEEN INCORPORATED IN FULL INTO THIS TITLE 25 AND HAD EXPRESSLY REFERRED TO THE PROVISIONS OF THIS TITLE AND TO SUCH 26 AUTHORITY, WITH SUCH CHANGES TO SUCH SECTION AS ARE NECESSARY TO REFER 27 TO THE PROVISIONS OF THIS TITLE AND TO THE AUTHORITY CREATED BY THIS 28 TITLE. 29 S 4. The public authorities law is amended by adding a new section 30 2326-a to read as follows: 31 S 2326-A. SPECIAL PROVISIONS APPLICABLE TO STATE SALES AND COMPENSAT- 32 ING USE TAXES AND CERTAIN TYPES OF FACILITIES. THE PROVISIONS OF SECTION 33 EIGHT HUNDRED SEVENTY-FIVE OF THE GENERAL MUNICIPAL LAW SHALL APPLY TO 34 THE PROVISIONS OF THIS TITLE AND TO THE AUTHORITY CREATED BY THIS TITLE 35 WITH THE SAME FORCE AND EFFECT AS IF THE PROVISIONS OF SUCH SECTION 36 EIGHT HUNDRED SEVENTY-FIVE HAD BEEN INCORPORATED IN FULL INTO THIS TITLE 37 AND HAD EXPRESSLY REFERRED TO THE PROVISIONS OF THIS TITLE AND TO SUCH 38 AUTHORITY, WITH SUCH CHANGES TO SUCH SECTION AS ARE NECESSARY TO REFER 39 TO THE PROVISIONS OF THIS TITLE AND TO THE AUTHORITY CREATED BY THIS 40 TITLE. 41 S 5. Subdivision 3 of section 810 of the general municipal law, as 42 amended by chapter 356 of the laws of 1993, is amended to read as 43 follows: 44 3. The term "local officer or employee" shall mean the heads (other 45 than local elected officials) of any agency, department, division, coun- 46 cil, board, commission, or bureau of a political subdivision and their 47 deputies and assistants, and the officers and employees of such agen- 48 cies, departments, divisions, boards, bureaus, commissions or councils 49 who hold policy-making positions, as annually determined by the appoint- 50 ing authority and set forth in a written instrument which shall be filed 51 with the appropriate body during the month of February; except that the 52 term "local officer or employee" shall not mean a judge, justice, offi- 53 cer or employee of the unified court system. Members, officers, and 54 employees of each industrial development agency and authority ESTAB- 55 LISHED BY THIS CHAPTER OR CREATED BY THE PUBLIC AUTHORITIES LAW shall be S. 2609--D 59 A. 3009--D 1 deemed officers or employees of the county, city, village, or town for 2 whose benefit such agency or authority is established OR CREATED. 3 S 6. Subdivision 4 of section 854 of the general municipal law, as 4 amended by chapter 478 of the laws of 2011, is amended to read as 5 follows: 6 (4) "Project" - shall mean any land, any building or other improve- 7 ment, and all real and personal properties located within the state of 8 New York and within or outside or partially within and partially outside 9 the municipality for whose benefit the agency was created, including, 10 but not limited to, machinery, equipment and other facilities deemed 11 necessary or desirable in connection therewith, or incidental thereto, 12 whether or not now in existence or under construction, which shall be 13 suitable for manufacturing, warehousing, research, commercial or indus- 14 trial purposes or other economically sound purposes identified and 15 called for to implement a state designated urban cultural park manage- 16 ment plan as provided in title G of the parks, recreation and historic 17 preservation law and which may include or mean an industrial pollution 18 control facility, a recreation facility, educational or cultural facili- 19 ty, a horse racing facility, a railroad facility or an automobile racing 20 facility, provided, however, no agency shall use its funds OR PROVIDE 21 FINANCIAL ASSISTANCE in respect of any project wholly or partially 22 outside the municipality for whose benefit the agency was created with- 23 out the prior consent thereto by the governing body or bodies of all the 24 other municipalities in which a part or parts of the project is, or is 25 to be, located, AND SUCH PORTION OF THE PROJECT LOCATED OUTSIDE SUCH 26 MUNICIPALITY FOR WHOSE BENEFIT THE AGENCY WAS CREATED SHALL BE CONTIG- 27 UOUS WITH THE PORTION OF THE PROJECT INSIDE SUCH MUNICIPALITY. 28 S 7. Section 883 of the general municipal law, as added by chapter 356 29 of the laws of 1993, is amended to read as follows: 30 S 883. Conflicts of interest. All members, officers, and employees of 31 an agency or INDUSTRIAL DEVELOPMENT authority ESTABLISHED BY THIS CHAP- 32 TER OR CREATED BY THE PUBLIC AUTHORITIES LAW shall be subject to the 33 provisions of article eighteen of this chapter. 34 S 8. Subdivision 9 of section 874 of the general municipal law, as 35 added by section 1 of subpart C of part S of chapter 57 of the laws of 36 2010, is amended to read as follows: 37 (9) (A) Within thirty days of the date that the agency designates a 38 project operator or other person to act as agent of the agency for 39 purposes of providing financial assistance consisting of any sales and 40 compensating use tax exemption to such person, the agency shall file a 41 statement with the department of taxation and finance relating thereto, 42 on a form and in such manner as is prescribed by the commissioner of 43 taxation and finance, identifying each such agent so named by the agen- 44 cy, setting forth the taxpayer identification number of each such agent, 45 giving a brief description of the property and/or services intended to 46 be exempted from such taxes as a result of such appointment as agent, 47 indicating the agency's rough estimate of the value of the property 48 and/or services to which such appointment as agent relates, indicating 49 the date when such designation as agent became effective and indicating 50 the date upon which such designation as agent shall cease. 51 (B) WITHIN THIRTY DAYS OF THE DATE THAT THE AGENCY'S DESIGNATION 52 DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION HAS BEEN AMENDED, TERMI- 53 NATED, BEEN REVOKED, OR BECOME INVALID OR INEFFECTIVE FOR ANY REASON, 54 THE AGENCY SHALL FILE A STATEMENT WITH THE DEPARTMENT OF TAXATION AND 55 FINANCE RELATING THERETO, ON A FORM AND IN SUCH MANNER AS IS PRESCRIBED 56 BY THE COMMISSIONER OF TAXATION AND FINANCE, IDENTIFYING EACH SUCH AGENT S. 2609--D 60 A. 3009--D 1 SO NAMED BY THE AGENCY IN THE ORIGINAL DESIGNATION AND SETTING FORTH THE 2 TAXPAYER IDENTIFICATION NUMBER AND OTHER IDENTIFYING INFORMATION OF EACH 3 SUCH AGENT, THE DATE AS OF WHICH THE ORIGINAL DESIGNATION WAS AMENDED, 4 TERMINATED, REVOKED, OR BECAME INVALID OR INEFFECTIVE AND THE REASON 5 THEREFOR, TOGETHER WITH A COPY OF THE ORIGINAL DESIGNATION. 6 S 9. Subdivision 4 of section 1963 of the public authorities law, as 7 added by section 2 of subpart C of part S of chapter 57 of the laws of 8 2010, is amended to read as follows; 9 4. (A) Within thirty days of the date that the authority designates a 10 project operator or other person to act as agent of the authority for 11 purposes of providing financial assistance consisting of any sales and 12 compensating use tax exemption to such person, the agency shall file a 13 statement with the department of taxation and finance relating thereto, 14 on a form and in such manner as is prescribed by the commissioner of 15 taxation and finance, identifying each such agent so named by the 16 authority, setting forth the taxpayer identification number of each such 17 agent, giving a brief description of the property and/or services 18 intended to be exempted from such taxes as a result of such appointment 19 as agent, indicating the authority's rough estimate of the value of the 20 property and/or services to which such appointment as agent relates, 21 indicating the date when such designation as agent became effective and 22 indicating the date upon which such designation as agent shall cease. 23 (B) WITHIN THIRTY DAYS OF THE DATE THAT THE AUTHORITY'S DESIGNATION 24 DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION HAS BEEN AMENDED, TERMI- 25 NATED, BEEN REVOKED, OR BECOME INVALID OR INEFFECTIVE FOR ANY REASON, 26 THE AUTHORITY SHALL FILE A STATEMENT WITH THE DEPARTMENT OF TAXATION AND 27 FINANCE RELATING THERETO, ON A FORM AND IN SUCH MANNER AS IS PRESCRIBED 28 BY THE COMMISSIONER OF TAXATION AND FINANCE, IDENTIFYING EACH SUCH AGENT 29 SO NAMED BY THE AUTHORITY IN THE ORIGINAL DESIGNATION AND SETTING FORTH 30 THE TAXPAYER IDENTIFICATION NUMBER AND OTHER IDENTIFYING INFORMATION OF 31 EACH SUCH AGENT, THE DATE AS OF WHICH THE ORIGINAL DESIGNATION WAS 32 AMENDED, TERMINATED, REVOKED, OR BECAME INVALID OR INEFFECTIVE AND THE 33 REASON THEREFOR, TOGETHER WITH A COPY OF THE ORIGINAL DESIGNATION. 34 S 10. Subdivision 4 of section 2326 of the public authorities law, as 35 added by section 3 of subpart C of part S of chapter 57 of the laws of 36 2010, is amended to read as follows: 37 4. (A) Within thirty days of the date that the authority designates a 38 project operator or other person to act as agent of the authority for 39 purposes of providing financial assistance consisting of any sales and 40 compensating use tax exemption to such person, the agency shall file a 41 statement with the department of taxation and finance relating thereto, 42 on a form and in such manner as is prescribed by the commissioner of 43 taxation and finance, identifying each such agent so named by the 44 authority, setting forth the taxpayer identification number of each such 45 agent, giving a brief description of the property and/or services 46 intended to be exempted from such taxes as a result of such appointment 47 as agent, indicating the authority's rough estimate of the value of the 48 property and/or services to which such appointment as agent relates, 49 indicating the date when such designation as agent became effective and 50 indicating the date upon which such designation as agent shall cease. 51 (B) WITHIN THIRTY DAYS OF THE DATE THAT THE AUTHORITY'S DESIGNATION 52 DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION HAS BEEN AMENDED, TERMI- 53 NATED, BEEN REVOKED, OR BECOME INVALID OR INEFFECTIVE FOR ANY REASON, 54 THE AUTHORITY SHALL FILE A STATEMENT WITH THE DEPARTMENT OF TAXATION AND 55 FINANCE RELATING THERETO, ON A FORM AND IN SUCH MANNER AS IS PRESCRIBED 56 BY THE COMMISSIONER OF TAXATION AND FINANCE, IDENTIFYING EACH SUCH AGENT S. 2609--D 61 A. 3009--D 1 SO NAMED BY THE AUTHORITY IN THE ORIGINAL DESIGNATION AND SETTING FORTH 2 THE TAXPAYER IDENTIFICATION NUMBER AND OTHER IDENTIFYING INFORMATION OF 3 EACH SUCH AGENT, THE DATE AS OF WHICH THE ORIGINAL DESIGNATION WAS 4 AMENDED, TERMINATED, REVOKED, OR BECAME INVALID OR INEFFECTIVE AND THE 5 REASON THEREFOR, TOGETHER WITH A COPY OF THE ORIGINAL DESIGNATION. 6 S 11. Severability. If any provision of this act shall for any reason 7 be finally adjudged by any court of competent jurisdiction to be inval- 8 id, such judgment shall not affect, impair, or invalidate the remainder 9 of this act, but shall be confined in its operation to the provision 10 directly involved in the controversy in which such judgment shall have 11 been rendered. It is hereby declared to be the intent of the legislature 12 that this act would have been enacted even if such invalid provision had 13 not been included in this act. 14 S 12. This act shall take effect immediately and shall apply to (a) 15 any project established, agent or project operator appointed on or after 16 the date this act shall have become a law and any financial assistance 17 or agreement regarding payments in lieu of taxes provided thereto, (b) 18 any amendment or revision involving additional funds or benefits made on 19 or after the date this act shall have become a law to any project estab- 20 lished, agent or project operator appointed, financial assistance 21 provided, or payment in lieu of taxes entered into, prior to that date, 22 and (c) any state sales and compensating use tax exemption benefits and 23 any payments in lieu of state sales and compensating use taxes recov- 24 ered, recaptured, received, or otherwise obtained by an industrial 25 development agency established by the general municipal law or an indus- 26 trial development authority created by title 11 or title 15 of article 8 27 of the public authorities law on or after such date. 28 PART K 29 Section 1. Paragraph 42 of subdivision (a) of section 1115 of the tax 30 law, as added by section 11 of part W-1 of chapter 109 of the laws of 31 2006, is amended to read as follows: 32 (42) E85, CNG or hydrogen, for use or consumption directly and exclu- 33 sively in the engine of a motor vehicle AND NATURAL GAS PURCHASED AND 34 CONVERTED INTO CNG, FOR USE OR FOR SALE FOR USE OR CONSUMPTION DIRECTLY 35 AND EXCLUSIVELY IN THE ENGINE OF A MOTOR VEHICLE. 36 S 2. This act shall take effect on the first day of a sales tax quar- 37 terly period, as described in subdivision (b) of section 1136 of the tax 38 law, next commencing after this act shall have become a law and shall 39 apply in accordance with the applicable transitional provisions in 40 sections 1106 and 1217 of the tax law; provided, however, that the 41 amendments to paragraph 42 of subdivision (a) of section 1115 of the tax 42 law made by section one of this act shall not affect the repeal of such 43 paragraph and shall be deemed repealed therewith. 44 PART L 45 Section 1. Section 301-c of the tax law is amended by adding a new 46 subdivision (p) to read as follows: 47 (P) REIMBURSEMENT FOR MOTOR FUEL AND DIESEL MOTOR FUEL USED BY A 48 VOLUNTARY AMBULANCE SERVICE, AS DEFINED IN SECTION THREE THOUSAND ONE OF 49 THE PUBLIC HEALTH LAW, A FIRE COMPANY OR A FIRE DEPARTMENT, AS DEFINED 50 IN SECTION THREE OF THE VOLUNTEER FIREFIGHTERS' BENEFIT LAW, OR A VOLUN- 51 TEER RESCUE SQUAD SUPPORTED IN WHOLE OR IN PART BY TAX MONIES, WHERE ANY 52 SUCH ENTITY IS THE PURCHASER, USER OR CONSUMER OF MOTOR FUEL OR DIESEL S. 2609--D 62 A. 3009--D 1 MOTOR FUEL IN A VEHICLE OWNED AND OPERATED BY SUCH ENTITY AND USED 2 EXCLUSIVELY FOR SUCH ENTITY'S PURPOSES. A PURCHASER SHALL BE ELIGIBLE 3 FOR REIMBURSEMENT OF THE TAX IMPOSED PURSUANT TO THIS ARTICLE IF (1) ANY 4 TAX IMPOSED PURSUANT TO THIS ARTICLE HAS BEEN PAID WITH RESPECT TO SUCH 5 GALLONAGE AND THE ENTIRE AMOUNT OF SUCH TAX HAS BEEN ABSORBED BY SUCH 6 PURCHASER, AND (2) SUCH PURCHASER POSSESSES DOCUMENTARY PROOF SATISFAC- 7 TORY TO THE COMMISSIONER EVIDENCING THE ABSORPTION BY SUCH PURCHASER OF 8 THE ENTIRE AMOUNT OF SUCH TAX. PROVIDED, THAT THE COMMISSIONER SHALL 9 REQUIRE SUCH DOCUMENTARY PROOF TO QUALIFY FOR ANY REIMBURSEMENT PROVIDED 10 HEREUNDER AS THE COMMISSIONER DEEMS APPROPRIATE. 11 S 2. This act shall take effect on the first day of the first month 12 next succeeding the sixtieth day after it shall have become a law. 13 PART M 14 Intentionally omitted 15 PART N 16 Intentionally omitted 17 PART O 18 Section 1. Subparagraph (i) of paragraph (b) of subdivision 1 of 19 section 481 of the tax law, as amended by chapter 604 of the laws of 20 2008, is amended to read as follows: 21 (i) In addition to any other penalty imposed by this article, the 22 commissioner may (A) impose a penalty of not more than [one] SIX hundred 23 [fifty] dollars for each two hundred cigarettes, or fraction thereof, in 24 excess of one thousand cigarettes in unstamped or unlawfully stamped 25 packages in the possession or under the control of any person or (B) 26 impose a penalty of not more than two hundred dollars for each ten unaf- 27 fixed false, altered or counterfeit cigarette tax stamps, imprints or 28 impressions, or fraction thereof, in the possession or under the control 29 of any person. In addition, the commissioner may impose a penalty of not 30 more than seventy-five dollars for each fifty cigars or one pound of 31 tobacco, or fraction thereof, in excess of two hundred fifty cigars or 32 five pounds of tobacco in the possession or under the control of any 33 person and a penalty of not more than one hundred fifty dollars for each 34 fifty cigars or pound of tobacco, or fraction thereof, in excess of five 35 hundred cigars or ten pounds of tobacco in the possession or under the 36 control of any person, with respect to which the tobacco products tax 37 has not been paid or assumed by a distributor or tobacco products deal- 38 er; provided, however, that any such penalty imposed shall not exceed 39 seven thousand five hundred dollars in the aggregate. The commissioner 40 may impose a penalty of not more than seventy-five dollars for each 41 fifty cigars or one pound of tobacco, or fraction thereof, in excess of 42 fifty cigars or one pound of tobacco in the possession or under the 43 control of any tobacco products dealer or distributor appointed by the 44 commissioner, and a penalty of not more than one hundred fifty dollars 45 for each fifty cigars or pound of tobacco, or fraction thereof, in 46 excess of two hundred fifty cigars or five pounds of tobacco in the 47 possession or under the control of any such dealer or distributor, with 48 respect to which the tobacco products tax has not been paid or assumed 49 by a distributor or a tobacco products dealer; provided, however, that S. 2609--D 63 A. 3009--D 1 any such penalty imposed shall not exceed fifteen thousand dollars in 2 the aggregate. 3 S 2. This act shall take effect June 1, 2013. 4 PART P 5 Section 1. The tax law is amended by adding a new section 171-v to 6 read as follows: 7 S 171-V. ENFORCEMENT OF DELINQUENT TAX LIABILITIES THROUGH THE SUSPEN- 8 SION OF DRIVERS' LICENSES. (1) THE COMMISSIONER SHALL ENTER INTO A WRIT- 9 TEN AGREEMENT WITH THE COMMISSIONER OF MOTOR VEHICLES, WHICH SHALL SET 10 FORTH THE PROCEDURES FOR THE TWO DEPARTMENTS TO COOPERATE IN A PROGRAM 11 TO IMPROVE TAX COLLECTION THROUGH THE SUSPENSION OF DRIVERS' LICENSES OF 12 TAXPAYERS WITH PAST-DUE TAX LIABILITIES EQUAL TO OR IN EXCESS OF TEN 13 THOUSAND DOLLARS. FOR THE PURPOSES OF THIS SECTION, THE TERM "TAX 14 LIABILITIES" SHALL MEAN ANY TAX, SURCHARGE, OR FEE ADMINISTERED BY THE 15 COMMISSIONER, OR ANY PENALTY OR INTEREST DUE ON THESE AMOUNTS OWED BY AN 16 INDIVIDUAL WITH A NEW YORK DRIVER'S LICENSE, THE TERM "DRIVER'S LICENSE" 17 MEANS ANY LICENSE ISSUED BY THE DEPARTMENT OF MOTOR VEHICLES, EXCEPT FOR 18 A COMMERCIAL DRIVER'S LICENSE AS DEFINED IN SECTION FIVE HUNDRED ONE-A 19 OF THE VEHICLE AND TRAFFIC LAW, AND THE TERM "PAST-DUE TAX LIABILITIES" 20 MEANS ANY TAX LIABILITY OR LIABILITIES WHICH HAVE BECOME FIXED AND FINAL 21 SUCH THAT THE TAXPAYER NO LONGER HAS ANY RIGHT TO ADMINISTRATIVE OR 22 JUDICIAL REVIEW. 23 (2) THE AGREEMENT SHALL INCLUDE THE FOLLOWING PROVISIONS: 24 (A) THE PROCEDURES BY WHICH THE DEPARTMENT SHALL NOTIFY THE COMMIS- 25 SIONER OF MOTOR VEHICLES OF TAXPAYERS WITH PAST-DUE TAX LIABILITIES, 26 INCLUDING THE PROCEDURES BY WHICH THE DEPARTMENT AND THE DEPARTMENT OF 27 MOTOR VEHICLES SHALL SHARE THE INFORMATION NECESSARY TO IDENTIFY INDI- 28 VIDUALS WITH PAST-DUE TAX LIABILITIES, WHICH SHALL INCLUDE A TAXPAYER'S 29 NAME, SOCIAL SECURITY NUMBER, AND ANY OTHER INFORMATION NECESSARY TO 30 ENSURE THE PROPER IDENTIFICATION OF THE TAXPAYER; 31 (B) THE PROCEDURES BY WHICH THE COMMISSIONER SHALL NOTIFY THE DEPART- 32 MENT OF MOTOR VEHICLES THAT A TAXPAYER HAS SATISFIED HIS OR HER PAST-DUE 33 TAX LIABILITIES, OR HAS ENTERED INTO AN INSTALLMENT PAYMENT AGREEMENT OR 34 HAS OTHERWISE MADE PAYMENT ARRANGEMENTS SATISFACTORY TO THE COMMISSION- 35 ER, SO THAT THE SUSPENSION OF THE TAXPAYER'S DRIVER'S LICENSE MAY BE 36 LIFTED; AND 37 (C) ANY OTHER MATTER THE DEPARTMENT AND THE DEPARTMENT OF MOTOR VEHI- 38 CLES SHALL DEEM NECESSARY TO CARRY OUT THE PROVISIONS OF THIS SECTION. 39 (3) THE DEPARTMENT SHALL PROVIDE NOTICE TO THE TAXPAYER OF HIS OR HER 40 INCLUSION IN THE LICENSE SUSPENSION PROGRAM NO LATER THAN SIXTY DAYS 41 PRIOR TO THE DATE THE DEPARTMENT INTENDS TO INFORM THE COMMISSIONER OF 42 MOTOR VEHICLES OF THE TAXPAYER'S INCLUSION. HOWEVER, NO SUCH NOTICE 43 SHALL BE ISSUED TO A TAXPAYER WHOSE WAGES ARE BEING GARNISHED BY THE 44 DEPARTMENT FOR THE PAYMENT OF PAST-DUE TAX LIABILITIES OR PAST-DUE CHILD 45 SUPPORT OR COMBINED CHILD AND SPOUSAL SUPPORT ARREARS. NOTICE SHALL BE 46 PROVIDED BY FIRST CLASS MAIL TO THE TAXPAYER'S LAST KNOWN ADDRESS AS 47 SUCH ADDRESS APPEARS IN THE ELECTRONIC SYSTEMS OR RECORDS OF THE DEPART- 48 MENT. SUCH NOTICE SHALL INCLUDE: 49 (A) A CLEAR STATEMENT OF THE PAST-DUE TAX LIABILITIES ALONG WITH A 50 STATEMENT THAT THE DEPARTMENT SHALL PROVIDE TO THE DEPARTMENT OF MOTOR 51 VEHICLES THE TAXPAYER'S NAME, SOCIAL SECURITY NUMBER AND ANY OTHER IDEN- 52 TIFYING INFORMATION NECESSARY FOR THE PURPOSE OF SUSPENDING HIS OR HER 53 DRIVER'S LICENSE PURSUANT TO THIS SECTION AND SUBDIVISION FOUR-F OF S. 2609--D 64 A. 3009--D 1 SECTION FIVE HUNDRED TEN OF THE VEHICLE AND TRAFFIC LAW SIXTY DAYS AFTER 2 THE MAILING OR SENDING OF SUCH NOTICE TO THE TAXPAYER; 3 (B) A STATEMENT THAT THE TAXPAYER MAY AVOID SUSPENSION OF HIS OR HER 4 LICENSE BY FULLY SATISFYING THE PAST-DUE TAX LIABILITIES OR BY MAKING 5 PAYMENT ARRANGEMENTS SATISFACTORY TO THE COMMISSIONER, AND INFORMATION 6 AS TO HOW THE TAXPAYER CAN PAY THE PAST-DUE TAX LIABILITIES TO THE 7 DEPARTMENT, ENTER INTO A PAYMENT ARRANGEMENT OR REQUEST ADDITIONAL 8 INFORMATION; 9 (C) A STATEMENT THAT THE TAXPAYER'S RIGHT TO PROTEST THE NOTICE IS 10 LIMITED TO RAISING ISSUES SET FORTH IN SUBDIVISION FIVE OF THIS SECTION; 11 (D) A STATEMENT THAT THE SUSPENSION OF THE TAXPAYER'S DRIVER'S LICENSE 12 SHALL CONTINUE UNTIL THE PAST-DUE TAX LIABILITIES ARE FULLY PAID OR THE 13 TAXPAYER MAKES PAYMENT ARRANGEMENTS SATISFACTORY TO THE COMMISSIONER; 14 AND 15 (E) ANY OTHER INFORMATION THAT THE COMMISSIONER DEEMS NECESSARY. 16 (4) AFTER THE EXPIRATION OF THE SIXTY DAY PERIOD, IF THE TAXPAYER HAS 17 NOT CHALLENGED THE NOTICE PURSUANT TO SUBDIVISION FIVE OF THIS SECTION 18 AND THE TAXPAYER HAS FAILED TO SATISFY THE PAST-DUE TAX LIABILITIES OR 19 MAKE PAYMENT ARRANGEMENTS SATISFACTORY TO THE COMMISSIONER, THE DEPART- 20 MENT SHALL NOTIFY THE DEPARTMENT OF MOTOR VEHICLES, IN THE MANNER AGREED 21 UPON BY THE TWO AGENCIES, THAT THE TAXPAYER'S DRIVER'S LICENSE SHALL BE 22 SUSPENDED PURSUANT TO SUBDIVISION FOUR-F OF SECTION FIVE HUNDRED TEN OF 23 THE VEHICLE AND TRAFFIC LAW; PROVIDED, HOWEVER, IN ANY CASE WHERE A 24 TAXPAYER FAILS TO COMPLY WITH THE TERMS OF A CURRENT PAYMENT ARRANGEMENT 25 MORE THAN ONCE WITHIN A TWELVE MONTH PERIOD, THE COMMISSIONER SHALL 26 IMMEDIATELY NOTIFY THE DEPARTMENT OF MOTOR VEHICLES THAT THE TAXPAYER'S 27 DRIVER'S LICENSE SHALL BE SUSPENDED. 28 (5) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, AND EXCEPT AS SPECIF- 29 ICALLY PROVIDED HEREIN, THE TAXPAYER SHALL HAVE NO RIGHT TO COMMENCE A 30 COURT ACTION OR PROCEEDING OR TO ANY OTHER LEGAL RECOURSE AGAINST THE 31 DEPARTMENT OR THE DEPARTMENT OF MOTOR VEHICLES REGARDING A NOTICE ISSUED 32 BY THE DEPARTMENT PURSUANT TO THIS SECTION AND THE REFERRAL BY THE 33 DEPARTMENT OF ANY TAXPAYER WITH PAST-DUE TAX LIABILITIES TO THE DEPART- 34 MENT OF MOTOR VEHICLES PURSUANT TO THIS SECTION FOR THE PURPOSE OF 35 SUSPENDING THE TAXPAYER'S DRIVER'S LICENSE. A TAXPAYER MAY ONLY CHAL- 36 LENGE SUCH SUSPENSION OR REFERRAL ON THE GROUNDS THAT (I) THE INDIVIDUAL 37 TO WHOM THE NOTICE WAS PROVIDED IS NOT THE TAXPAYER AT ISSUE; (II) THE 38 PAST-DUE TAX LIABILITIES WERE SATISFIED; (III) THE TAXPAYER'S WAGES ARE 39 BEING GARNISHED BY THE DEPARTMENT FOR THE PAYMENT OF THE PAST-DUE TAX 40 LIABILITIES AT ISSUE OR FOR PAST-DUE CHILD SUPPORT OR COMBINED CHILD AND 41 SPOUSAL SUPPORT ARREARS; (IV) THE TAXPAYER'S WAGES ARE BEING GARNISHED 42 FOR THE PAYMENT OF PAST-DUE CHILD SUPPORT OR COMBINED CHILD AND SPOUSAL 43 SUPPORT ARREARS PURSUANT TO AN INCOME EXECUTION ISSUED PURSUANT TO 44 SECTION FIVE THOUSAND TWO HUNDRED FORTY-ONE OF THE CIVIL PRACTICE LAW 45 AND RULES; (V) THE TAXPAYER'S DRIVER'S LICENSE IS A COMMERCIAL DRIVER'S 46 LICENSE AS DEFINED IN SECTION FIVE HUNDRED ONE-A OF THE VEHICLE AND 47 TRAFFIC LAW; OR (VI) THE DEPARTMENT INCORRECTLY FOUND THAT THE TAXPAYER 48 HAS FAILED TO COMPLY WITH THE TERMS OF A PAYMENT ARRANGEMENT MADE WITH 49 THE COMMISSIONER MORE THAN ONCE WITHIN A TWELVE MONTH PERIOD FOR THE 50 PURPOSES OF SUBDIVISION THREE OF THIS SECTION. 51 HOWEVER, NOTHING IN THIS SUBDIVISION IS INTENDED TO LIMIT A TAXPAYER 52 FROM SEEKING RELIEF FROM JOINT AND SEVERAL LIABILITY PURSUANT TO SECTION 53 SIX HUNDRED FIFTY-FOUR OF THIS CHAPTER, TO THE EXTENT THAT HE OR SHE IS 54 ELIGIBLE PURSUANT TO THAT SUBDIVISION, OR ESTABLISHING TO THE DEPARTMENT 55 THAT THE ENFORCEMENT OF THE UNDERLYING TAX LIABILITIES HAS BEEN STAYED S. 2609--D 65 A. 3009--D 1 BY THE FILING OF A PETITION PURSUANT TO THE BANKRUPTCY CODE OF 1978 2 (TITLE ELEVEN OF THE UNITED STATES CODE). 3 (6) NOTWITHSTANDING ANY PROVISION OF THIS CHAPTER TO THE CONTRARY, THE 4 DEPARTMENT MAY DISCLOSE TO THE DEPARTMENT OF MOTOR VEHICLES THE INFORMA- 5 TION DESCRIBED IN THIS SECTION THAT, IN THE DISCRETION OF THE COMMIS- 6 SIONER, IS NECESSARY FOR THE PROPER IDENTIFICATION OF A TAXPAYER 7 REFERRED TO THE DEPARTMENT OF MOTOR VEHICLES FOR THE PURPOSE OF SUSPEND- 8 ING THE TAXPAYER'S DRIVER'S LICENSE PURSUANT TO THIS SECTION AND SUBDI- 9 VISION FOUR-F OF SECTION FIVE HUNDRED TEN OF THE VEHICLE AND TRAFFIC 10 LAW. THE DEPARTMENT OF MOTOR VEHICLES MAY NOT REDISCLOSE THIS INFORMA- 11 TION TO ANY OTHER ENTITY OR PERSON, OTHER THAN FOR THE PURPOSE OF 12 INFORMING THE TAXPAYER THAT HIS OR HER DRIVER'S LICENSE HAS BEEN 13 SUSPENDED. 14 (7) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE ACTIVITIES TO 15 COLLECT PAST-DUE TAX LIABILITIES UNDERTAKEN BY THE DEPARTMENT PURSUANT 16 TO THIS SECTION SHALL NOT IN ANY WAY LIMIT, RESTRICT OR IMPAIR THE 17 DEPARTMENT FROM EXERCISING ANY OTHER AUTHORITY TO COLLECT OR ENFORCE TAX 18 LIABILITIES UNDER ANY OTHER APPLICABLE PROVISION OF LAW. 19 S 2. Section 510 of the vehicle and traffic law is amended by adding a 20 new subdivision 4-f to read as follows: 21 4-F. SUSPENSION FOR FAILURE TO PAY PAST-DUE TAX LIABILITIES. (1) THE 22 COMMISSIONER SHALL ENTER INTO A WRITTEN AGREEMENT WITH THE COMMISSIONER 23 OF TAXATION AND FINANCE, AS PROVIDED IN SECTION ONE HUNDRED 24 SEVENTY-ONE-V OF THE TAX LAW, WHICH SHALL SET FORTH THE PROCEDURES FOR 25 SUSPENDING THE DRIVERS' LICENSES OF INDIVIDUALS WHO HAVE FAILED TO 26 SATISFY PAST-DUE TAX LIABILITIES AS SUCH TERMS ARE DEFINED IN SUCH 27 SECTION. 28 (2) UPON RECEIPT OF NOTIFICATION FROM THE DEPARTMENT OF TAXATION AND 29 FINANCE THAT AN INDIVIDUAL HAS FAILED TO SATISFY PAST-DUE TAX LIABIL- 30 ITIES, OR TO OTHERWISE MAKE PAYMENT ARRANGEMENTS SATISFACTORY TO THE 31 COMMISSIONER OF TAXATION AND FINANCE, OR HAS FAILED TO COMPLY WITH THE 32 TERMS OF SUCH PAYMENT ARRANGEMENTS MORE THAN ONCE WITHIN A TWELVE MONTH 33 PERIOD, THE COMMISSIONER OR HIS OR HER AGENT SHALL SUSPEND THE LICENSE 34 OF SUCH PERSON TO OPERATE A MOTOR VEHICLE. IN THE EVENT SUCH PERSON IS 35 UNLICENSED, SUCH PERSON'S PRIVILEGE OF OBTAINING A LICENSE SHALL BE 36 SUSPENDED. SUCH SUSPENSION SHALL TAKE EFFECT NO LATER THAN FIFTEEN DAYS 37 FROM THE DATE OF THE NOTICE THEREOF PROVIDED TO THE PERSON WHOSE LICENSE 38 OR PRIVILEGE OF OBTAINING A LICENSE IS TO BE SUSPENDED, AND SHALL REMAIN 39 IN EFFECT UNTIL SUCH TIME AS THE COMMISSIONER IS ADVISED THAT THE PERSON 40 HAS SATISFIED HIS OR HER PAST-DUE TAX LIABILITIES, OR HAS OTHERWISE MADE 41 PAYMENT ARRANGEMENTS SATISFACTORY TO THE COMMISSIONER OF TAXATION AND 42 FINANCE. 43 (3) FROM THE TIME THE COMMISSIONER IS NOTIFIED BY THE DEPARTMENT OF 44 TAXATION AND FINANCE UNDER THIS SECTION, THE COMMISSIONER SHALL BE 45 RELIEVED FROM ALL LIABILITY TO SUCH PERSON WHICH MAY OTHERWISE ARISE 46 UNDER THIS SECTION, AND SUCH PERSON SHALL HAVE NO RIGHT TO COMMENCE A 47 COURT ACTION OR PROCEEDING OR TO ANY OTHER LEGAL RECOURSE AGAINST THE 48 COMMISSIONER TO RECOVER SUCH DRIVING PRIVILEGES AS AUTHORIZED BY THIS 49 SECTION. IN ADDITION, NOTWITHSTANDING ANY OTHER PROVISION OF LAW, SUCH 50 PERSON SHALL HAVE NO RIGHT TO A HEARING OR APPEAL PURSUANT TO THIS CHAP- 51 TER WITH RESPECT TO A SUSPENSION OF DRIVING PRIVILEGES AS AUTHORIZED BY 52 THIS SECTION. 53 (4) NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, THE DEPART- 54 MENT SHALL FURNISH THE DEPARTMENT OF TAXATION AND FINANCE WITH THE 55 INFORMATION NECESSARY FOR THE PROPER IDENTIFICATION OF AN INDIVIDUAL 56 REFERRED TO THE DEPARTMENT FOR THE PURPOSE OF DRIVER'S LICENSE SUSPEN- S. 2609--D 66 A. 3009--D 1 SION PURSUANT TO THIS SECTION AND SECTION ONE HUNDRED SEVENTY-ONE-V OF 2 THE TAX LAW. THIS SHALL INCLUDE THE INDIVIDUAL'S NAME, SOCIAL SECURITY 3 NUMBER AND ANY OTHER INFORMATION THE COMMISSIONER OF MOTOR VEHICLES 4 DEEMS NECESSARY. 5 (5) ANY PERSON WHOSE DRIVER'S LICENSE IS SUSPENDED PURSUANT TO PARA- 6 GRAPH TWO OF THIS SUBDIVISION MAY APPLY FOR THE ISSUANCE OF A RESTRICTED 7 USE LICENSE AS PROVIDED IN SECTION FIVE HUNDRED THIRTY OF THIS TITLE. 8 S 3. Subdivision 7 of section 511 of the vehicle and traffic law, as 9 added by chapter 81 of the laws of 1995, is amended to read as follows: 10 7. Exceptions. When a person is convicted of a violation of subdivi- 11 sion one [of] OR two of this section, and the suspension was issued 12 pursuant to (A) subdivision four-e of section five hundred ten of this 13 article due to a support arrears, OR (B) SUBDIVISION FOUR-F OF SECTION 14 FIVE HUNDRED TEN OF THE ARTICLE DUE TO PAST-DUE TAX LIABILITIES, the 15 mandatory penalties set forth in subdivision one or two of this section 16 shall not be applicable if, on or before the return date or subsequent 17 adjourned date, such person presents proof that such support arrears OR 18 PAST-DUE TAX LIABILITIES have been satisfied as shown by certified 19 check, notice issued by the court ordering the suspension, or notice 20 from a support collection unit OR DEPARTMENT OF TAXATION AND FINANCE AS 21 APPLICABLE. The sentencing court shall take the satisfaction of arrears 22 OR THE PAYMENT OF THE PAST-DUE TAX LIABILITIES into account when impos- 23 ing a sentence for any such conviction. FOR LICENSES SUSPENDED FOR NON- 24 PAYMENT OF PAST-DUE TAX LIABILITIES, THE COURT SHALL ALSO TAKE INTO 25 CONSIDERATION PROOF, IN THE FORM OF A NOTICE FROM THE DEPARTMENT OF 26 TAXATION AND FINANCE, THAT SUCH PERSON HAS MADE PAYMENT ARRANGEMENTS 27 THAT ARE SATISFACTORY TO THE COMMISSIONER OF TAXATION AND FINANCE. 28 S 4. Section 530 of the vehicle and traffic law is amended by adding a 29 new subdivision 5-b to read as follows: 30 (5-B) ISSUANCE OF A RESTRICTED LICENSE SHALL NOT BE DENIED TO ANY 31 PERSON WHOSE LICENSE IS SUSPENDED PURSUANT TO SUBDIVISION FOUR-F OF 32 SECTION FIVE HUNDRED TEN OF THIS TITLE FOR ANY REASON OTHER THAN SUCH 33 PERSON'S FAILURE TO OTHERWISE HAVE A VALID OR RENEWABLE DRIVER'S 34 LICENSE. THE RESTRICTIONS ON THE TYPES OF VEHICLES WHICH MAY BE OPERATED 35 WITH A RESTRICTED LICENSE CONTAINED IN SUCH SUBDIVISION FIVE OF THIS 36 SECTION SHALL NOT BE APPLICABLE TO A RESTRICTED LICENSE ISSUED TO A 37 PERSON PURSUANT TO SUBDIVISION FOUR-F OF SECTION FIVE HUNDRED TEN OF 38 THIS TITLE. THE ISSUANCE OF A RESTRICTED LICENSE ISSUED AS A RESULT OF A 39 SUSPENSION UNDER SUBDIVISION FOUR-F OF SECTION FIVE HUNDRED TEN OF THIS 40 TITLE SHALL NOT IN ANY WAY AFFECT A PERSON'S ELIGIBILITY FOR A 41 RESTRICTED LICENSE AT SOME FUTURE TIME. 42 S 5. This act shall take effect immediately; provided, however, that 43 the department of taxation and finance and the department of motor vehi- 44 cles shall have up to six months after this act shall have become a law 45 to execute the written agreement and implement the necessary procedures 46 as described in sections one and two of this act. 47 PART Q 48 Section 1. The tax law is amended by adding a new section 174-c to 49 read as follows: 50 S 174-C. SERVICE OF INCOME EXECUTION WITHOUT FILING A WARRANT. 1. 51 NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, IF ANY INDIVIDUAL 52 LIABLE FOR THE PAYMENT OF ANY TAX OR OTHER IMPOSITION ADMINISTERED BY 53 THE COMMISSIONER, INCLUDING ANY ADDITIONS TO TAX, PENALTIES AND INTEREST 54 IN CONNECTION THEREWITH, FAILS TO PAY OR TO COLLECT OR PAY OVER THE SAME S. 2609--D 67 A. 3009--D 1 WITHIN TWENTY-ONE CALENDAR DAYS AFTER NOTICE AND DEMAND THEREFOR IS 2 GIVEN TO SUCH INDIVIDUAL (TEN BUSINESS DAYS IF THE AMOUNT FOR WHICH SUCH 3 NOTICE AND DEMAND IS MADE EQUALS OR EXCEEDS ONE HUNDRED THOUSAND 4 DOLLARS), THE COMMISSIONER IS AUTHORIZED TO SERVE AN INCOME EXECUTION ON 5 THE INDIVIDUAL OR ON THE PERSON FROM WHOM THE INDIVIDUAL IS RECEIVING, 6 OR WILL RECEIVE, MONEY, WITHOUT FILING A WARRANT IN THE OFFICE OF THE 7 CLERK OF THE APPROPRIATE COUNTY OR IN THE DEPARTMENT OF STATE AS 8 PROVIDED FOR IN THIS CHAPTER. FOR PURPOSES OF SERVING AN INCOME 9 EXECUTION PURSUANT TO THIS SECTION, THE COMMISSIONER SHALL, IN THE RIGHT 10 OF THE PEOPLE OF THE STATE OF NEW YORK, BE DEEMED TO HAVE OBTAINED JUDG- 11 MENT AGAINST THE INDIVIDUAL FOR THE TAX OR OTHER IMPOSITION, AND THE 12 ADDITIONS TO TAX, PENALTIES AND INTEREST IN CONNECTION THEREOF, AND 13 THERE SHALL BE A LIEN ON THE AMOUNT OF THE INDIVIDUAL'S INCOME THAT MAY 14 BE GARNISHED. IF THE COMMISSIONER CHOOSES TO SERVE AN INCOME EXECUTION 15 WITHOUT FILING A WARRANT PURSUANT TO THIS SECTION, THE COMMISSIONER MUST 16 SERVE THE INCOME EXECUTION WITHIN SIX YEARS AFTER THE FIRST DATE A 17 WARRANT COULD BE FILED PURSUANT TO SECTION ONE HUNDRED SEVENTY-FOUR-B OF 18 THIS ARTICLE. WHEN SERVING AN INCOME EXECUTION WITHOUT THE FILING OF A 19 WARRANT, THE COMMISSIONER SHALL FOLLOW THE PROCEDURES SET FORTH IN 20 SECTION FIVE THOUSAND TWO HUNDRED THIRTY-ONE OF THE CIVIL PRACTICE LAW 21 AND RULES, WITH THE REFERENCES IN SUCH SECTION TO "SHERIFF" TO BE READ 22 AS REFERRING TO THE COMMISSIONER OR THE DEPARTMENT. THE INCOME 23 EXECUTION SHALL SPECIFY THE NAME AND ADDRESS OF THE PERSON FROM WHOM THE 24 TAXPAYER IS RECEIVING OR WILL RECEIVE MONEY; THE AMOUNT OF MONEY, THE 25 FREQUENCY OF ITS PAYMENT AND THE AMOUNT OF THE INSTALLMENTS TO BE 26 COLLECTED THEREFROM; AND SHALL CONTAIN A NOTICE TO THE TAXPAYER THAT THE 27 TAXPAYER SHALL COMMENCE PAYMENT OF THE INSTALLMENTS SPECIFIED IN THE 28 NOTICE WITHIN A SPECIFIED PERIOD OF TIME THAT IS NO LESS THAN TWENTY-ONE 29 DAYS AFTER THE NOTICE IS MAILED TO THE TAXPAYER, AND THAT, UPON THE 30 TAXPAYER'S DEFAULT, THE EXECUTION WILL BE SERVED UPON THE PERSON FROM 31 WHOM THE TAXPAYER IS RECEIVING OR WILL RECEIVE MONEY. SUCH INCOME 32 EXECUTION SHALL CONTINUE TO BE IN EFFECT UNTIL SUCH LIABILITY IS SATIS- 33 FIED OR UNTIL TWENTY YEARS FROM THE FIRST DATE A WARRANT COULD BE FILED 34 BY THE COMMISSIONER PURSUANT TO SECTION ONE HUNDRED SEVENTY-FOUR-B OF 35 THIS ARTICLE, WHETHER OR NOT A WARRANT IS FILED FOR THAT LIABILITY. 36 2. THE PROVISIONS OF THIS SECTION SHALL BE IN ADDITION TO THE PROCE- 37 DURES RELATING TO COLLECTION OR ADMINISTRATION PROVIDED WITH RESPECT TO 38 ANY TAX OR OTHER IMPOSITION ADMINISTERED BY THE COMMISSIONER. WHERE A 39 PROVISION OF THIS SECTION IS INCONSISTENT WITH ANY SUCH PROVISION WITH 40 RESPECT TO SUCH TAX OR OTHER IMPOSITION, THE PROVISIONS OF THIS SECTION 41 WILL APPLY. NOTHING IN THIS SECTION SHALL PREVENT THE COMMISSIONER FROM 42 TIMELY FILING A WARRANT IN ORDER TO PURSUE ANY OF THE COLLECTION METHODS 43 AUTHORIZED UNDER ARTICLE FIFTY-TWO OF THE CIVIL PRACTICE LAW AND RULES. 44 3. THE COMMISSIONER SHALL PERIODICALLY, BUT NO LESS FREQUENTLY THAN 45 QUARTERLY, ELECTRONICALLY FILE WITH THE DEPARTMENT OF STATE A LIST OF 46 THE NAMES OF THE TAXPAYERS WHO HAVE BEEN SERVED WITH INCOME EXECUTIONS 47 UNDER THE AUTHORITY OF THIS SECTION DURING THAT PERIOD. THE COMMISSIONER 48 SHALL ALSO INCLUDE IN THIS LIST THE NAMES OF TAXPAYERS WHOSE INCOME 49 EXECUTIONS ARE CANCELLED OR DISCHARGED DURING THAT PERIOD. THE DEPART- 50 MENT OF STATE SHALL UPON RECEIPT POST SUCH A LIST TO THEIR WEBSITE. 51 S 2. This act shall take effect immediately and shall expire and be 52 deemed repealed on and after April 1, 2015. 53 PART R 54 Intentionally omitted S. 2609--D 68 A. 3009--D 1 PART S 2 Intentionally omitted 3 PART T 4 Section 1. Clause (F) of subparagraph (ii) of paragraph 1 of subdivi- 5 sion b of section 1612 of the tax law, as amended by section 6 of part K 6 of chapter 57 of the laws of 2010, is amended to read as follows: 7 (F) notwithstanding clauses (A), (B), (C), (D) and (E) of this subpar- 8 agraph, when a vendor track, is located in Sullivan county and within 9 sixty miles from any gaming facility in a contiguous state such vendor 10 fee shall, for a period of [five] SIX years commencing April first, two 11 thousand eight, be at a rate of forty-one percent of the total revenue 12 wagered at the vendor track after payout for prizes pursuant to this 13 chapter, after which time such rate shall be as for all tracks in clause 14 (C) of this subparagraph. 15 S 2. This act shall take effect immediately and shall be deemed to 16 have been in full force and effect on and after April 1, 2013. 17 PART U 18 Section 1. Paragraph (a) of subdivision 1 of section 1003 of the 19 racing, pari-mutuel wagering and breeding law, as amended by section 1 20 of part O of chapter 59 of the laws of 2012, is amended to read as 21 follows: 22 (a) Any racing association or corporation or regional off-track 23 betting corporation, authorized to conduct pari-mutuel wagering under 24 this chapter, desiring to display the simulcast of horse races on which 25 pari-mutuel betting shall be permitted in the manner and subject to the 26 conditions provided for in this article may apply to the board for a 27 license so to do. Applications for licenses shall be in such form as may 28 be prescribed by the board and shall contain such information or other 29 material or evidence as the board may require. No license shall be 30 issued by the board authorizing the simulcast transmission of thorough- 31 bred races from a track located in Suffolk county. The fee for such 32 licenses shall be five hundred dollars per simulcast facility per year 33 payable by the licensee to the board for deposit into the general fund. 34 Except as provided herein, the board shall not approve any application 35 to conduct simulcasting into individual or group residences, homes or 36 other areas for the purposes of or in connection with pari-mutuel wager- 37 ing. The board may approve simulcasting into residences, homes or other 38 areas to be conducted jointly by one or more regional off-track betting 39 corporations and one or more of the following: a franchised corporation, 40 thoroughbred racing corporation or a harness racing corporation or asso- 41 ciation; provided (i) the simulcasting consists only of those races on 42 which pari-mutuel betting is authorized by this chapter at one or more 43 simulcast facilities for each of the contracting off-track betting 44 corporations which shall include wagers made in accordance with section 45 one thousand fifteen, one thousand sixteen and one thousand seventeen of 46 this article; provided further that the contract provisions or other 47 simulcast arrangements for such simulcast facility shall be no less 48 favorable than those in effect on January first, two thousand five; (ii) 49 that each off-track betting corporation having within its geographic 50 boundaries such residences, homes or other areas technically capable of 51 receiving the simulcast signal shall be a contracting party; (iii) the S. 2609--D 69 A. 3009--D 1 distribution of revenues shall be subject to contractual agreement of 2 the parties except that statutory payments to non-contracting parties, 3 if any, may not be reduced; provided, however, that nothing herein to 4 the contrary shall prevent a track from televising its races on an 5 irregular basis primarily for promotional or marketing purposes as found 6 by the board. For purposes of this paragraph, the provisions of section 7 one thousand thirteen of this article shall not apply. Any agreement 8 authorizing an in-home simulcasting experiment commencing prior to May 9 fifteenth, nineteen hundred ninety-five, may, and all its terms, be 10 extended until June thirtieth, two thousand [thirteen] FOURTEEN; 11 provided, however, that any party to such agreement may elect to termi- 12 nate such agreement upon conveying written notice to all other parties 13 of such agreement at least forty-five days prior to the effective date 14 of the termination, via registered mail. Any party to an agreement 15 receiving such notice of an intent to terminate, may request the board 16 to mediate between the parties new terms and conditions in a replacement 17 agreement between the parties as will permit continuation of an in-home 18 experiment until June thirtieth, two thousand [thirteen] FOURTEEN; and 19 (iv) no in-home simulcasting in the thoroughbred special betting 20 district shall occur without the approval of the regional thoroughbred 21 track. 22 S 2. Subparagraph (iii) of paragraph d of subdivision 3 of section 23 1007 of the racing, pari-mutuel wagering and breeding law, as amended by 24 section 2 of part O of chapter 59 of the laws of 2012, is amended to 25 read as follows: 26 (iii) Of the sums retained by a receiving track located in Westchester 27 county on races received from a franchised corporation, for the period 28 commencing January first, two thousand eight and continuing through June 29 thirtieth, two thousand [thirteen] FOURTEEN, the amount used exclusively 30 for purses to be awarded at races conducted by such receiving track 31 shall be computed as follows: of the sums so retained, two and one-half 32 percent of the total pools. Such amount shall be increased or decreased 33 in the amount of fifty percent of the difference in total commissions 34 determined by comparing the total commissions available after July twen- 35 ty-first, nineteen hundred ninety-five to the total commissions that 36 would have been available to such track prior to July twenty-first, 37 nineteen hundred ninety-five. 38 S 3. The opening paragraph of subdivision 1 of section 1014 of the 39 racing, pari-mutuel wagering and breeding law, as amended by section 3 40 of part O of chapter 59 of the laws of 2012, is amended to read as 41 follows: 42 The provisions of this section shall govern the simulcasting of races 43 conducted at thoroughbred tracks located in another state or country on 44 any day during which a franchised corporation is conducting a race meet- 45 ing in Saratoga county at Saratoga thoroughbred racetrack until June 46 thirtieth, two thousand [thirteen] FOURTEEN and on any day regardless of 47 whether or not a franchised corporation is conducting a race meeting in 48 Saratoga county at Saratoga thoroughbred racetrack after June thirtieth, 49 two thousand [thirteen] FOURTEEN. On any day on which a franchised 50 corporation has not scheduled a racing program but a thoroughbred racing 51 corporation located within the state is conducting racing, every off- 52 track betting corporation branch office and every simulcasting facility 53 licensed in accordance with section one thousand seven (that have 54 entered into a written agreement with such facility's representative 55 horsemen's organization, as approved by the board), one thousand eight, 56 or one thousand nine of this article shall be authorized to accept S. 2609--D 70 A. 3009--D 1 wagers and display the live simulcast signal from thoroughbred tracks 2 located in another state or foreign country subject to the following 3 provisions: 4 S 4. Subdivision 1 of section 1015 of the racing, pari-mutuel wagering 5 and breeding law, as amended by section 4 of part O of chapter 59 of the 6 laws of 2012, is amended to read as follows: 7 1. The provisions of this section shall govern the simulcasting of 8 races conducted at harness tracks located in another state or country 9 during the period July first, nineteen hundred ninety-four through June 10 thirtieth, two thousand [thirteen] FOURTEEN. This section shall super- 11 sede all inconsistent provisions of this chapter. 12 S 5. The opening paragraph of subdivision 1 of section 1016 of the 13 racing, pari-mutuel wagering and breeding law, as amended by section 5 14 of part O of chapter 59 of the laws of 2012, is amended to read as 15 follows: 16 The provisions of this section shall govern the simulcasting of races 17 conducted at thoroughbred tracks located in another state or country on 18 any day during which a franchised corporation is not conducting a race 19 meeting in Saratoga county at Saratoga thoroughbred racetrack until June 20 thirtieth, two thousand [thirteen] FOURTEEN. Every off-track betting 21 corporation branch office and every simulcasting facility licensed in 22 accordance with section one thousand seven that have entered into a 23 written agreement with such facility's representative horsemen's organ- 24 ization as approved by the board, one thousand eight or one thousand 25 nine of this article shall be authorized to accept wagers and display 26 the live full-card simulcast signal of thoroughbred tracks (which may 27 include quarter horse or mixed meetings provided that all such wagering 28 on such races shall be construed to be thoroughbred races) located in 29 another state or foreign country, subject to the following provisions; 30 provided, however, no such written agreement shall be required of a 31 franchised corporation licensed in accordance with section one thousand 32 seven of this article: 33 S 6. The opening paragraph of section 1018 of the racing, pari-mutuel 34 wagering and breeding law, as amended by section 6 of part O of chapter 35 59 of the laws of 2012, is amended to read as follows: 36 Notwithstanding any other provision of this chapter, for the period 37 July twenty-fifth, two thousand one through September eighth, two thou- 38 sand [twelve] THIRTEEN, when a franchised corporation is conducting a 39 race meeting within the state at Saratoga Race Course, every off-track 40 betting corporation branch office and every simulcasting facility 41 licensed in accordance with section one thousand seven (that has entered 42 into a written agreement with such facility's representative horsemen's 43 organization as approved by the board), one thousand eight or one thou- 44 sand nine of this article shall be authorized to accept wagers and 45 display the live simulcast signal from thoroughbred tracks located in 46 another state, provided that such facility shall accept wagers on races 47 run at all in-state thoroughbred tracks which are conducting racing 48 programs subject to the following provisions; provided, however, no such 49 written agreement shall be required of a franchised corporation licensed 50 in accordance with section one thousand seven of this article. 51 S 7. Section 32 of chapter 281 of the laws of 1994, amending the 52 racing, pari-mutuel wagering and breeding law and other laws relating 53 to simulcasting, as amended by section 7 of part O of chapter 59 of the 54 laws of 2012, is amended to read as follows: 55 S 32. This act shall take effect immediately and the pari-mutuel tax 56 reductions in section six of this act shall expire and be deemed S. 2609--D 71 A. 3009--D 1 repealed on July 1, [2013] 2014; provided, however, that nothing 2 contained herein shall be deemed to affect the application, qualifica- 3 tion, expiration, or repeal of any provision of law amended by any 4 section of this act, and such provisions shall be applied or qualified 5 or shall expire or be deemed repealed in the same manner, to the same 6 extent and on the same date as the case may be as otherwise provided by 7 law; provided further, however, that sections twenty-three and twenty- 8 five of this act shall remain in full force and effect only until May 1, 9 1997 and at such time shall be deemed to be repealed. 10 S 8. Section 54 of chapter 346 of the laws of 1990, amending the 11 racing, pari-mutuel wagering and breeding law and other laws relating to 12 simulcasting and the imposition of certain taxes, as amended by section 13 8 of part O of chapter 59 of the laws of 2012, is amended to read as 14 follows: 15 S 54. This act shall take effect immediately; provided, however, 16 sections three through twelve of this act shall take effect on January 17 1, 1991, and section 1013 of the racing, pari-mutuel wagering and breed- 18 ing law, as added by section thirty-eight of this act, shall expire and 19 be deemed repealed on July 1, [2013] 2014; and section eighteen of this 20 act shall take effect on July 1, 2008 and sections fifty-one and fifty- 21 two of this act shall take effect as of the same date as chapter 772 of 22 the laws of 1989 took effect. 23 S 9. Paragraph (a) of subdivision 1 of section 238 of the racing, 24 pari-mutuel wagering and breeding law, as amended by section 9 of part O 25 of chapter 59 of the laws of 2012, is amended to read as follows: 26 (a) The franchised corporation authorized under this chapter to 27 conduct pari-mutuel betting at a race meeting or races run thereat shall 28 distribute all sums deposited in any pari-mutuel pool to the holders of 29 winning tickets therein, provided such tickets be presented for payment 30 before April first of the year following the year of their purchase, 31 less an amount which shall be established and retained by such fran- 32 chised corporation of between twelve to seventeen per centum of the 33 total deposits in pools resulting from on-track regular bets, and four- 34 teen to twenty-one per centum of the total deposits in pools resulting 35 from on-track multiple bets and fifteen to twenty-five per centum of the 36 total deposits in pools resulting from on-track exotic bets and fifteen 37 to thirty-six per centum of the total deposits in pools resulting from 38 on-track super exotic bets, plus the breaks. The retention rate to be 39 established is subject to the prior approval of the racing and wagering 40 board. Such rate may not be changed more than once per calendar quarter 41 to be effective on the first day of the calendar quarter. "Exotic bets" 42 and "multiple bets" shall have the meanings set forth in section five 43 hundred nineteen of this chapter. "Super exotic bets" shall have the 44 meaning set forth in section three hundred one of this chapter. For 45 purposes of this section, a "pick six bet" shall mean a single bet or 46 wager on the outcomes of six races. The breaks are hereby defined as the 47 odd cents over any multiple of five for payoffs greater than one dollar 48 five cents but less than five dollars, over any multiple of ten for 49 payoffs greater than five dollars but less than twenty-five dollars, 50 over any multiple of twenty-five for payoffs greater than twenty-five 51 dollars but less than two hundred fifty dollars, or over any multiple of 52 fifty for payoffs over two hundred fifty dollars. Out of the amount so 53 retained there shall be paid by such franchised corporation to the 54 commissioner of taxation and finance, as a reasonable tax by the state 55 for the privilege of conducting pari-mutuel betting on the races run at 56 the race meetings held by such franchised corporation, the following S. 2609--D 72 A. 3009--D 1 percentages of the total pool for regular and multiple bets five per 2 centum of regular bets and four per centum of multiple bets plus twenty 3 per centum of the breaks; for exotic wagers seven and one-half per 4 centum plus twenty per centum of the breaks, and for super exotic bets 5 seven and one-half per centum plus fifty per centum of the breaks. For 6 the period June first, nineteen hundred ninety-five through September 7 ninth, nineteen hundred ninety-nine, such tax on regular wagers shall be 8 three per centum and such tax on multiple wagers shall be two and one- 9 half per centum, plus twenty per centum of the breaks. For the period 10 September tenth, nineteen hundred ninety-nine through March thirty- 11 first, two thousand one, such tax on all wagers shall be two and six- 12 tenths per centum and for the period April first, two thousand one 13 through December thirty-first, two thousand [thirteen] FOURTEEN, such 14 tax on all wagers shall be one and six-tenths per centum, plus, in each 15 such period, twenty per centum of the breaks. Payment to the New York 16 state thoroughbred breeding and development fund by such franchised 17 corporation shall be one-half of one per centum of total daily on-track 18 pari-mutuel pools resulting from regular, multiple and exotic bets and 19 three per centum of super exotic bets provided, however, that for the 20 period September tenth, nineteen hundred ninety-nine through March thir- 21 ty-first, two thousand one, such payment shall be six-tenths of one per 22 centum of regular, multiple and exotic pools and for the period April 23 first, two thousand one through December thirty-first, two thousand 24 [thirteen] FOURTEEN, such payment shall be seven-tenths of one per 25 centum of such pools. 26 S 10. Subdivision 5 of section 1012 of the racing, pari-mutuel wager- 27 ing and breeding law, as amended by section 10 of part O of chapter 59 28 of the laws of 2012, is amended to read as follows: 29 5. The provisions of this section shall expire and be of no further 30 force and effect after June thirtieth, two thousand [thirteen] FOURTEEN. 31 S 11. This act shall take effect immediately. 32 PART V 33 Section 1. Subparagraphs (A) and (B) of paragraph 2 of subsection (pp) 34 of section 606 of the tax law, as amended by chapter 472 of the laws of 35 2010, are amended to read as follows: 36 (A) With respect to any particular residence of a taxpayer, the credit 37 allowed under paragraph one of this subsection shall not exceed fifty 38 thousand dollars for taxable years beginning on or after January first, 39 two thousand ten and before January first, two thousand [fifteen] TWENTY 40 and twenty-five thousand dollars for taxable years beginning on or after 41 January first, two thousand [fifteen] TWENTY. In the case of a husband 42 and wife, the amount of the credit shall be divided between them equally 43 or in such other manner as they may both elect. If a taxpayer incurs 44 qualified rehabilitation expenditures in relation to more than one resi- 45 dence in the same year, the total amount of credit allowed under para- 46 graph one of this subsection for all such expenditures shall not exceed 47 fifty thousand dollars for taxable years beginning on or after January 48 first, two thousand ten and before January first, two thousand [fifteen] 49 TWENTY and twenty-five thousand dollars for taxable years beginning on 50 or after January first, two thousand [fifteen] TWENTY. 51 (B) For taxable years beginning on or after January first, two thou- 52 sand ten and before January first, two thousand [fifteen] TWENTY, if the 53 amount of credit allowable under this subsection shall exceed the 54 taxpayer's tax for such year, and the taxpayer's New York adjusted gross S. 2609--D 73 A. 3009--D 1 income for such year does not exceed sixty thousand dollars, the excess 2 shall be treated as an overpayment of tax to be credited or refunded in 3 accordance with the provisions of section six hundred eighty-six of this 4 article, provided, however, that no interest shall be paid thereon. If 5 the taxpayer's New York adjusted gross income for such year exceeds 6 sixty thousand dollars, the excess credit that may be carried over to 7 the following year or years and may be deducted from the taxpayer's tax 8 for such year or years. For taxable years beginning on or after January 9 first, two thousand [fifteen] TWENTY, if the amount of credit allowable 10 under this subsection shall exceed the taxpayer's tax for such year, the 11 excess may be carried over to the following year or years and may be 12 deducted from the taxpayer's tax for such year or years. 13 S 2. This act shall take effect immediately. 14 PART W 15 Section 1. Subdivision 13 of section 282 of the tax law, as added by 16 chapter 276 of the laws of 1986, is amended to read as follows: 17 13. "Terminal" means a motor fuel OR DIESEL MOTOR FUEL storage facili- 18 ty with a storage capacity of fifty thousand gallons or more excluding 19 such facility at which motor fuel OR DIESEL MOTOR FUEL is stored solely 20 for its retail sale at such facility. "Terminal operator" means any 21 person who or which has the use of or control over, or the right to so 22 use or control, a terminal. 23 S 2. Subdivision 1 of section 282-a of the tax law, as amended by 24 chapter 2 of the laws of 1995, is amended to read as follows: 25 1. There is hereby levied and imposed with respect to Diesel motor 26 fuel an excise tax of four cents per gallon upon the sale or use of 27 Diesel motor fuel in this state. 28 The excise tax is imposed on the first sale or use of Diesel motor 29 fuel to occur which is not exempt from tax under this article. Provided, 30 however, if the tax has not been imposed prior thereto, it shall be 31 imposed on THE REMOVAL OF HIGHWAY DIESEL MOTOR FUEL FROM A TERMINAL, 32 OTHER THAN BY PIPELINE, BARGE, TANKER OR OTHER VESSEL, OR the delivery 33 of Diesel motor fuel to a filling station or into the fuel tank connect- 34 ing with the engine of a motor vehicle for use in the operation thereof 35 whichever event shall be first to occur. The tax shall be computed based 36 upon the number of gallons of Diesel motor fuel sold, REMOVED or used or 37 the number of gallons of Diesel fuel delivered into the fuel tank of a 38 motor vehicle, as the case may be. Nothing in this article shall be 39 construed to require the payment of such excise tax more than once upon 40 the same Diesel motor fuel. Nor shall the collection of such tax be made 41 applicable to the sale or use of Diesel motor fuel under circumstances 42 which preclude the collection of such tax by reason of the United States 43 constitution and of laws of the United States enacted pursuant thereto. 44 Provided, further, no Diesel motor fuel shall be included in the measure 45 of the tax unless it shall have previously come to rest within the mean- 46 ing of federal decisional law interpreting the United States constitu- 47 tion. All tax for the period for which a return is required to be filed 48 shall be due on the date limited for the filing of the return for such 49 period, regardless of whether a return is filed as required by this 50 article or whether the return which is filed correctly shows the amount 51 of tax due. 52 S 3. Paragraph (b) of subdivision 3 of section 282-a of the tax law, 53 as amended by section 2 of part E of chapter 59 of the laws of 2012, is 54 amended to read as follows: S. 2609--D 74 A. 3009--D 1 (b) The tax on the incidence of sale or use imposed by subdivision one 2 of this section shall not apply to: (i) the sale or use of non-highway 3 Diesel motor fuel, but only if all of such fuel is consumed other than 4 on the public highways of this state (except for the use of the public 5 highway by farmers to reach adjacent farmlands); provided, however, this 6 exemption shall in no event apply to a sale of non-highway Diesel motor 7 fuel which involves a delivery at a filling station or into a repository 8 which is equipped with a hose or other apparatus by which such fuel can 9 be dispensed into the fuel tank of a motor vehicle (except for delivery 10 at a farm site which qualifies for the exemption under subdivision (g) 11 of section three hundred one-b of this chapter); or (ii) a sale to the 12 consumer consisting of not more than twenty gallons of water-white kero- 13 sene to be used and consumed exclusively for heating purposes; or (iii) 14 the sale to or delivery at a filling station or other retail vendor of 15 water-white kerosene provided such filling station or other retail 16 vendor only sells such water-white kerosene exclusively for heating 17 purposes in containers of no more than twenty gallons; or (iv) a sale of 18 kero-jet fuel to an airline for use in its airplanes or a use of kero- 19 jet fuel by an airline in its airplanes; or (v) a sale of kero-jet fuel 20 by a registered distributor of Diesel motor fuel to a fixed base opera- 21 tor registered under this article as a distributor of kero-jet fuel only 22 where such fixed base operator is engaged solely in making or offering 23 to make retail sales not in bulk of kero-jet fuel directly into the fuel 24 tank of an airplane for the purpose of operating such airplane; OR (vi) 25 a retail sale not in bulk of kero-jet fuel by a fixed base operator 26 registered under this article as a distributor of kero-jet fuel only 27 where such fuel is delivered directly into the fuel tank of an airplane 28 for use in the operation of such airplane; or (vii) the sale of previ- 29 ously untaxed qualified biodiesel to a person registered under this 30 article as a distributor of Diesel motor fuel other than (A) a retail 31 sale to such person or (B) a sale to such person which involves a deliv- 32 ery at a filling station or into a repository which is equipped with a 33 hose or other apparatus by which such qualified biodiesel can be 34 dispensed into the fuel tank of a motor vehicle; OR (VIII) THE SALE OF 35 PREVIOUSLY UNTAXED HIGHWAY DIESEL MOTOR FUEL BY A PERSON REGISTERED 36 UNDER THIS ARTICLE AS A DISTRIBUTOR OF DIESEL MOTOR FUEL TO A PERSON 37 REGISTERED UNDER THIS ARTICLE AS A DISTRIBUTOR OF DIESEL MOTOR FUEL 38 WHERE THE HIGHWAY DIESEL MOTOR FUEL IS EITHER: (A) BEING DELIVERED BY 39 PIPELINE, RAILCAR, BARGE, TANKER OR OTHER VESSEL TO A TERMINAL, THE 40 OPERATOR OF WHICH TERMINAL IS REGISTERED UNDER SECTION TWO HUNDRED 41 EIGHTY-THREE-B OF THIS ARTICLE, OR (B) WITHIN SUCH A TERMINAL WHERE IT 42 HAS BEEN SO DELIVERED. PROVIDED, HOWEVER, THAT THE EXEMPTION SET FORTH 43 IN THIS SUBPARAGRAPH SHALL NOT APPLY TO ANY HIGHWAY DIESEL MOTOR FUEL IF 44 IT IS REMOVED FROM A TERMINAL, OTHER THAN BY PIPELINE, BARGE, TANKER OR 45 OTHER VESSEL. 46 S 4. Subdivision 5 of section 282-a of the tax law, as amended by 47 section 5 of part K of chapter 61 of the laws of 2011, is amended to 48 read as follows: 49 5. All the provisions of this article relating to the administration 50 and collection of the taxes on motor fuel, except [sections] SECTION two 51 hundred eighty-three-a [and two hundred eighty-three-b] of this article, 52 shall be applicable to the tax imposed by this section with such limita- 53 tion as specifically provided for in this article with respect to Diesel 54 motor fuel and with such modification as may be necessary to adapt the 55 language of such provisions to the tax imposed by this section. With 56 respect to the bond or other security required by subdivision three of S. 2609--D 75 A. 3009--D 1 section two hundred eighty-three of this article, the commissioner, in 2 determining the amount of bond or other security required for the 3 purpose of securing tax payments, shall take into account the volume of 4 non-highway Diesel motor fuel and other Diesel motor fuel sold for 5 exempt purposes by a distributor of Diesel motor fuel during prior peri- 6 ods as a factor reducing potential tax liability along with any other 7 relevant factors in determining the amount of security required. With 8 respect to the bond required to be filed prior to registration as a 9 Diesel motor fuel distributor, no bond shall be required of an applicant 10 upon a finding of the applicant's fiscal responsibility, as reflected by 11 such factors as net worth, current assets and liabilities, and tax 12 reporting and payment history, and the department shall not provide for 13 a minimum bond of every applicant. 14 S 5. Section 300 of the tax law is amended by adding a new subdivision 15 (s) to read as follows: 16 (S) THE TERM "TERMINAL" SHALL HAVE THE SAME MEANING AS IN SUBDIVISION 17 THIRTEEN OF SECTION TWO HUNDRED EIGHTY-TWO OF THIS CHAPTER. 18 S 6. Subparagraph (A) of paragraph 1 of subdivision (c) of section 19 301-a of the tax law, as amended by section 19 of part K of chapter 61 20 of the laws of 2011, is amended to read as follows: 21 (A) The highway diesel motor fuel component shall be determined by 22 multiplying the motor fuel and highway diesel motor fuel rate times (1) 23 the number of gallons of highway diesel motor fuel sold or used by a 24 petroleum business in this state during the month covered by the return 25 under this article and (2) with respect to any gallonage which prior 26 thereto has not been included in the measure of the tax imposed by this 27 article, times the number of gallons of highway diesel motor fuel 28 [delivered] (i) REMOVED FROM A TERMINAL, OTHER THAN BY PIPELINE, BARGE, 29 TANKER OR OTHER VESSEL, (II) DELIVERED to a filling station or [(ii)], 30 (III) DELIVERED into the fuel tank connecting with the engine of a motor 31 vehicle for use in the operation thereof, whichever of the latter [two] 32 THREE events shall be the first to occur. Provided, however, that no 33 highway diesel motor fuel shall be included in the measure of the tax 34 unless it shall have previously come to rest within the meaning of 35 federal decisional law interpreting the United States constitution, nor 36 decisional law, nor shall any highway diesel motor fuel be included in 37 the measure of the tax imposed by this article more than once. 38 S 7. Subdivision (e) of section 301-b of the tax law, as amended by 39 section 4 of part E of chapter 59 of the laws of 2012, is amended to 40 read as follows: 41 (e) Sales of HIGHWAY DIESEL MOTOR FUEL, qualified biodiesel, non-high- 42 way diesel motor fuel and residual petroleum product to registered 43 distributors of diesel motor fuel and registered residual petroleum 44 product businesses. 45 (1) THE SALE OF PREVIOUSLY UNTAXED HIGHWAY DIESEL MOTOR FUEL BY A 46 PERSON REGISTERED UNDER ARTICLE TWELVE-A OF THIS CHAPTER AS A DISTRIBU- 47 TOR OF DIESEL MOTOR FUEL TO A PERSON REGISTERED UNDER SUCH ARTICLE 48 TWELVE-A AS A DISTRIBUTOR OF DIESEL MOTOR FUEL WHERE THE HIGHWAY DIESEL 49 MOTOR FUEL IS EITHER: (A) BEING DELIVERED BY PIPELINE, RAILCAR, BARGE, 50 TANKER OR OTHER VESSEL TO A TERMINAL, THE OPERATOR OF WHICH TERMINAL IS 51 REGISTERED UNDER SECTION TWO HUNDRED EIGHTY-THREE-B OF THIS CHAPTER, OR 52 (B) WITHIN SUCH A TERMINAL WHERE IT HAS BEEN SO DELIVERED. PROVIDED, 53 HOWEVER, THAT THE EXEMPTION SET FORTH IN THIS PARAGRAPH SHALL NOT APPLY 54 TO ANY HIGHWAY DIESEL MOTOR FUEL IF IT IS REMOVED FROM A TERMINAL, OTHER 55 THAN BY PIPELINE, BARGE, TANKER OR OTHER VESSEL. S. 2609--D 76 A. 3009--D 1 (2) Qualified biodiesel and non-highway [Diesel] DIESEL motor fuel 2 sold by a person registered under article twelve-A of this chapter as a 3 distributor of diesel motor fuel to a person registered under such arti- 4 cle twelve-A as a distributor of diesel motor fuel where such sale is 5 not a retail sale or a sale that involves a delivery at a filling 6 station or into a repository equipped with a hose or other apparatus by 7 which such qualified biodiesel or non-highway [Diesel] DIESEL motor fuel 8 can be dispensed into the fuel tank of a motor vehicle. 9 [(2)] (3) Residual petroleum product sold by a person registered under 10 this article as a residual petroleum product business to a person regis- 11 tered under this article as a residual petroleum product business where 12 such sale is not a retail sale. Provided, however, that the commissioner 13 may require such documentary proof to qualify for any exemption provided 14 in this section as the commissioner deems appropriate, including the 15 expansion of any certifications required pursuant to section two hundred 16 eighty-five-a or two hundred eighty-five-b of this chapter to cover the 17 taxes imposed by this article. 18 [(3)] (4) "Qualified biodiesel" means such term as defined in subdivi- 19 sion twenty-three of section two hundred eighty-two of this chapter. 20 S 8. Clause (D) of subparagraph (ii) of paragraph 4 of subdivision (b) 21 of section 1101 of the tax law, as added by chapter 261 of the laws of 22 1988, is amended to read as follows: 23 (D) The terms "filling station", "TERMINAL" and "owner" shall have the 24 same meaning as they have for the purposes of article twelve-A of this 25 chapter. 26 S 9. Paragraph 2 of subdivision (a) of section 1102 of the tax law, as 27 amended by section 5 of part E of chapter 59 of the laws of 2012, is 28 amended to read as follows: 29 (2) Every distributor of diesel motor fuel shall pay, as a prepayment 30 on account of the taxes imposed by this article and pursuant to the 31 authority of article twenty-nine of this chapter, a tax upon the sale or 32 use of diesel motor fuel in this state. The tax shall be computed based 33 upon the number of gallons of diesel motor fuel sold or used. Provided, 34 however, if the tax has not been imposed prior thereto, it shall be 35 imposed on THE REMOVAL OF HIGHWAY DIESEL MOTOR FUEL FROM A TERMINAL, 36 OTHER THAN BY PIPELINE, BARGE, TANKER OR OTHER VESSEL, OR the delivery 37 of diesel motor fuel to a retail service station. The collection of such 38 tax shall not be made applicable to the sale or use of diesel motor fuel 39 under circumstances which preclude the collection of such tax by reason 40 of the United States constitution and of laws of the United States 41 enacted pursuant thereto. The prepaid tax on diesel motor fuel shall not 42 apply to (i) the sale of [previously untaxed] non-highway Diesel motor 43 fuel to a person registered as a distributor of Diesel motor fuel other 44 than a sale to such person which involves a delivery at a filling 45 station or into a repository which is equipped with a hose or other 46 apparatus by which such fuel can be dispensed into the fuel tank of a 47 motor vehicle[,]; (ii) the sale to or delivery at a filling station or 48 other retail vendor of water-white kerosene provided such filling 49 station or other retail vendor only sells such water-white kerosene 50 exclusively for heating purposes in containers of no more than twenty 51 gallons or to the sale of CNG or hydrogen; [or] (iii) the sale of previ- 52 ously untaxed qualified biodiesel, AS DEFINED IN SUBDIVISION 53 TWENTY-THREE OF SECTION TWO HUNDRED EIGHTY-TWO OF THIS CHAPTER, to a 54 person registered under article twelve-A of this chapter as a distribu- 55 tor of Diesel motor fuel other than (A) a retail sale to such person or 56 (B) a sale to such person which involves a delivery at a filling station S. 2609--D 77 A. 3009--D 1 or into a repository which is equipped with a hose or other apparatus by 2 which such qualified biodiesel can be dispensed into the fuel tank of a 3 motor vehicle[. "Qualified biodiesel" means such term as defined in 4 subdivision twenty-three of section two hundred eighty-two of this chap- 5 ter]; OR (IV) THE SALE OF PREVIOUSLY UNTAXED HIGHWAY DIESEL MOTOR FUEL 6 BY A PERSON REGISTERED UNDER ARTICLE TWELVE-A OF THIS CHAPTER AS A 7 DISTRIBUTOR OF DIESEL MOTOR FUEL TO A PERSON REGISTERED UNDER SUCH ARTI- 8 CLE TWELVE-A AS A DISTRIBUTOR OF DIESEL MOTOR FUEL WHERE THE HIGHWAY 9 DIESEL MOTOR FUEL IS EITHER: (A) BEING DELIVERED BY PIPELINE, RAILCAR, 10 BARGE, TANKER OR OTHER VESSEL TO A TERMINAL, THE OPERATOR OF WHICH 11 TERMINAL IS REGISTERED UNDER SECTION TWO HUNDRED EIGHTY-THREE-B OF THIS 12 CHAPTER, OR (B) WITHIN SUCH A TERMINAL WHERE IT HAS BEEN SO DELIVERED. 13 PROVIDED, HOWEVER, THAT THE EXEMPTION SET FORTH IN THIS SUBPARAGRAPH 14 SHALL NOT APPLY TO ANY HIGHWAY DIESEL MOTOR FUEL IF IT IS REMOVED FROM A 15 TERMINAL, OTHER THAN BY PIPELINE, BARGE, TANKER OR OTHER VESSEL. 16 S 10. Paragraph 2 of subdivision (a) of section 1102 of the tax law, 17 as amended by section 6 of part E of chapter 59 of the laws of 2012, is 18 amended to read as follows: 19 (2) Every distributor of diesel motor fuel shall pay, as a prepayment 20 on account of the taxes imposed by this article and pursuant to the 21 authority of article twenty-nine of this chapter, a tax upon the sale or 22 use of diesel motor fuel in this state. The tax shall be computed based 23 upon the number of gallons of diesel motor fuel sold or used. Provided, 24 however, if the tax has not been imposed prior thereto, it shall be 25 imposed on THE REMOVAL OF HIGHWAY DIESEL MOTOR FUEL FROM A TERMINAL, 26 OTHER THAN BY PIPELINE, BARGE, TANKER OR OTHER VESSEL, OR the delivery 27 of diesel motor fuel to a retail service station. The collection of such 28 tax shall not be made applicable to the sale or use of diesel motor fuel 29 under circumstances which preclude the collection of such tax by reason 30 of the United States constitution and of laws of the United States 31 enacted pursuant thereto. The prepaid tax on diesel motor fuel shall not 32 apply to (i) the sale of non-highway Diesel motor fuel to a person 33 registered as a distributor of Diesel motor fuel other than a sale to 34 such person which involves a delivery at a filling station or into a 35 repository which is equipped with a hose or other apparatus by which 36 such fuel can be dispensed into the fuel tank of a motor vehicle[,]; 37 (ii) the sale to or delivery at a filling station or other retail vendor 38 of water-white kerosene provided such filling station or other retail 39 vendor only sells such water-white kerosene exclusively for heating 40 purposes in containers of no more than twenty gallons; [or] (iii) the 41 sale of previously untaxed qualified biodiesel, AS DEFINED IN SUBDIVI- 42 SION TWENTY-THREE OF SECTION TWO HUNDRED EIGHTY-TWO OF THIS CHAPTER to a 43 person registered under article twelve-A of this chapter as a distribu- 44 tor of Diesel motor fuel other than (A) a retail sale to such person or 45 (B) a sale to such person which involves a delivery at a filling station 46 or into a repository which is equipped with a hose or other apparatus by 47 which such qualified biodiesel can be dispensed into the fuel tank of a 48 motor vehicle[. "Qualified biodiesel" means such term as defined in 49 subdivision twenty-three of section two hundred eighty-two of this chap- 50 ter]; OR (IV) THE SALE OF PREVIOUSLY UNTAXED HIGHWAY DIESEL MOTOR FUEL 51 BY A PERSON REGISTERED UNDER ARTICLE TWELVE-A OF THIS CHAPTER AS A 52 DISTRIBUTOR OF DIESEL MOTOR FUEL TO A PERSON REGISTERED UNDER SUCH ARTI- 53 CLE TWELVE-A AS A DISTRIBUTOR OF DIESEL MOTOR FUEL WHERE THE HIGHWAY 54 DIESEL MOTOR FUEL IS EITHER: (A) BEING DELIVERED BY PIPELINE, RAILCAR, 55 BARGE, TANKER OR OTHER VESSEL TO A TERMINAL, THE OPERATOR OF WHICH 56 TERMINAL IS REGISTERED UNDER SECTION TWO HUNDRED EIGHTY-THREE-B OF THIS S. 2609--D 78 A. 3009--D 1 CHAPTER, OR (B) WITHIN SUCH A TERMINAL WHERE IT HAS BEEN SO DELIVERED. 2 PROVIDED, HOWEVER, THAT THE EXEMPTION SET FORTH IN THIS SUBPARAGRAPH 3 SHALL NOT APPLY TO ANY HIGHWAY DIESEL MOTOR FUEL ONCE IT IS REMOVED FROM 4 A TERMINAL, OTHER THAN BY PIPELINE, BARGE, TANKER OR OTHER VESSEL. 5 S 11. Section 1812-c of the tax law, as added by chapter 276 of the 6 laws of 1986, is amended to read as follows: 7 S 1812-c. Person not licensed as terminal operator. Any person who, 8 while not licensed as such pursuant to the provisions of article 9 twelve-A of this chapter, operates as a terminal operator as defined in 10 subdivision thirteen of section two hundred eighty-two of this chapter, 11 except where all of the motor fuel OR DIESEL MOTOR FUEL stored in the 12 storage facility is solely for such person's own use and consumption, 13 shall be guilty of a class E felony. 14 S 12. This act shall take effect August 1, 2013; provided, however, 15 that the amendments made to paragraph 2 of subdivision (a) of section 16 1102 of the tax law made by section nine of this act shall be subject to 17 the expiration and reversion of such paragraph pursuant to section 19 of 18 part W-1 of chapter 109 of the laws of 2006, as amended, when upon such 19 date the provisions of section ten of this act shall take effect. 20 PART X 21 Section 1. Subdivision 3 of section 504 of the tax law, as amended by 22 chapter 194 of the laws of 1963, is amended to read as follows: 23 3. [Owned and operated] (A) OPERATED by a farmer OR BY A PERSON THAT 24 BEARS THE RELATIONSHIP TO SUCH FARMER DESCRIBED IN PARAGRAPH (B) OF THIS 25 SUBDIVISION and used exclusively by such farmer OR SUCH PERSON in trans- 26 porting [his] SUCH FARMER'S own agricultural commodities and products, 27 pulpwood or livestock, including the packed, processed, or manufactured 28 products thereof, that were originally grown or raised on [his] SUCH 29 FARMER'S farm, lands or orchard, or when used to transport supplies and 30 equipment to [his] SUCH FARMER'S farm or orchard that are consumed and 31 used thereon or when operated by [a] SUCH farmer OR SUCH PERSON in 32 transporting farm products from a farm contiguous to [his own] SUCH 33 FARMER'S FARM. 34 (B) THE RELATIONSHIP TO SUCH FARMER AS REFERENCED IN PARAGRAPH (A) OF 35 THIS SUBDIVISION, SHALL INCLUDE: 36 (I) MEMBERS OF A FAMILY, INCLUDING SPOUSES, ANCESTORS, LINEAL DESCEND- 37 ANTS, BROTHERS AND SISTERS (WHETHER BY THE WHOLE OR HALF BLOOD), AND 38 ENTITIES RELATED TO SUCH A FAMILY MEMBER AS DESCRIBED IN SUBPARAGRAPHS 39 (II) THROUGH (IV) OF THIS PARAGRAPH; 40 (II) A SHAREHOLDER AND A CORPORATION MORE THAN FIFTY PERCENT OF THE 41 VALUE OF THE OUTSTANDING STOCK OF WHICH IS OWNED OR CONTROLLED DIRECTLY 42 OR INDIRECTLY BY SUCH SHAREHOLDER; 43 (III) A PARTNER AND A PARTNERSHIP MORE THAN FIFTY PERCENT OF THE CAPI- 44 TAL OR PROFITS INTEREST IN WHICH IS OWNED OR CONTROLLED DIRECTLY OR 45 INDIRECTLY BY SUCH PARTNER; 46 (IV) A BENEFICIARY AND A TRUST MORE THAN FIFTY PERCENT OF THE BENEFI- 47 CIAL INTEREST IN WHICH IS OWNED OR CONTROLLED DIRECTLY OR INDIRECTLY BY 48 SUCH BENEFICIARY; 49 (V) TWO OR MORE CORPORATIONS, PARTNERSHIPS, ASSOCIATIONS, OR TRUSTS, 50 OR ANY COMBINATION THEREOF, WHICH ARE OWNED OR CONTROLLED, EITHER 51 DIRECTLY OR INDIRECTLY, BY THE SAME PERSON, CORPORATION OR OTHER ENTITY, 52 OR INTERESTS; AND 53 (VI) A GRANTOR OF A TRUST AND SUCH TRUST. S. 2609--D 79 A. 3009--D 1 S 2. This act shall take effect on the first day of the first month 2 next occurring 60 days after this act shall have become a law. 3 PART Y 4 Section 1. Subsection (c) of section 612 of the tax law is amended by 5 adding a new paragraph 39 to read as follows: 6 (39) IN THE CASE OF A TAXPAYER WHO IS A SMALL BUSINESS WHO HAS BUSI- 7 NESS INCOME AND/OR FARM INCOME AS DEFINED IN THE LAWS OF THE UNITED 8 STATES, AN AMOUNT EQUAL TO THREE PERCENT OF THE NET ITEMS OF INCOME, 9 GAIN, LOSS AND DEDUCTION ATTRIBUTABLE TO SUCH BUSINESS OR FARM ENTERING 10 INTO FEDERAL ADJUSTED GROSS INCOME, BUT NOT LESS THAN ZERO, FOR TAXABLE 11 YEARS BEGINNING AFTER TWO THOUSAND THIRTEEN, AN AMOUNT EQUAL TO THREE 12 AND THREE-QUARTERS PERCENT OF THE NET ITEMS OF INCOME, GAIN, LOSS AND 13 DEDUCTION ATTRIBUTABLE TO SUCH BUSINESS OR FARM ENTERING INTO FEDERAL 14 ADJUSTED GROSS INCOME, BUT NOT LESS THAN ZERO, FOR TAXABLE YEARS BEGIN- 15 NING AFTER TWO THOUSAND FOURTEEN, AND AN AMOUNT EQUAL TO FIVE PERCENT OF 16 THE NET ITEMS OF INCOME, GAIN, LOSS AND DEDUCTION ATTRIBUTABLE TO SUCH 17 BUSINESS OR FARM ENTERING INTO FEDERAL ADJUSTED GROSS INCOME, BUT NOT 18 LESS THAN ZERO, FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND FIFTEEN. 19 FOR THE PURPOSES OF THIS PARAGRAPH, THE TERM SMALL BUSINESS SHALL MEAN A 20 SOLE PROPRIETOR OR A FARM BUSINESS WHO EMPLOYS ONE OR MORE PERSONS 21 DURING THE TAXABLE YEAR AND WHO HAS NET BUSINESS INCOME OR NET FARM 22 INCOME OF LESS THAN TWO HUNDRED FIFTY THOUSAND DOLLARS. 23 S 2. Subdivision (c) of section 11-1712 of the administrative code of 24 the city of New York is amended by adding new paragraph 35 to read as 25 follows: 26 (35) IN THE CASE OF A TAXPAYER WHO IS A SMALL BUSINESS WHO HAS BUSI- 27 NESS INCOME AND/OR FARM INCOME AS DEFINED IN THE LAWS OF THE UNITED 28 STATES, AN AMOUNT EQUAL TO THREE PERCENT OF THE NET ITEMS OF INCOME, 29 GAIN, LOSS AND DEDUCTION ATTRIBUTABLE TO SUCH BUSINESS OR FARM ENTERING 30 INTO FEDERAL ADJUSTED GROSS INCOME, BUT NOT LESS THAN ZERO, FOR TAXABLE 31 YEARS BEGINNING AFTER TWO THOUSAND THIRTEEN, AN AMOUNT EQUAL TO THREE 32 AND THREE-QUARTERS PERCENT OF THE NET ITEMS OF INCOME, GAIN, LOSS AND 33 DEDUCTION ATTRIBUTABLE TO SUCH BUSINESS OR FARM ENTERING INTO FEDERAL 34 ADJUSTED GROSS INCOME, BUT NOT LESS THAN ZERO, FOR TAXABLE YEARS BEGIN- 35 NING AFTER TWO THOUSAND FOURTEEN, AND AN AMOUNT EQUAL TO FIVE PERCENT OF 36 THE NET ITEMS OF INCOME, GAIN, LOSS AND DEDUCTION ATTRIBUTABLE TO SUCH 37 BUSINESS OR FARM ENTERING INTO FEDERAL ADJUSTED GROSS INCOME, BUT NOT 38 LESS THAN ZERO, FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND FIFTEEN. 39 FOR THE PURPOSES OF THIS PARAGRAPH, THE TERM SMALL BUSINESS SHALL MEAN A 40 SOLE PROPRIETOR OR A FARM BUSINESS WHO EMPLOYS ONE OR MORE PERSONS 41 DURING THE TAXABLE YEAR AND WHO HAS NET BUSINESS INCOME OR NET FARM 42 INCOME OF LESS THAN TWO HUNDRED FIFTY THOUSAND DOLLARS. 43 S 3. This act shall take effect immediately. 44 PART Z 45 Section 1. Paragraph (a) of subdivision 1 of section 210 of the tax 46 law is amended by adding a new subparagraph (vii) to read as follows: 47 (VII) FOR A QUALIFIED NEW YORK MANUFACTURER, AS DEFINED IN SUBPARA- 48 GRAPH (VI) OF THIS PARAGRAPH, THE RATE AT WHICH THE TAX IS COMPUTED IN 49 EFFECT FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU- 50 SAND THIRTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND FOURTEEN FOR QUALI- 51 FIED NEW YORK MANUFACTURERS SHALL BE REDUCED BY NINE AND TWO-TENTHS 52 PERCENT FOR TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO S. 2609--D 80 A. 3009--D 1 THOUSAND FOURTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND FIFTEEN, TWELVE 2 AND THREE-TENTHS PERCENT FOR TAXABLE YEARS COMMENCING ON OR AFTER JANU- 3 ARY FIRST, TWO THOUSAND FIFTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND 4 SIXTEEN, FIFTEEN AND FOUR-TENTHS PERCENT FOR TAXABLE YEARS COMMENCING ON 5 OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN AND BEFORE JANUARY FIRST, 6 TWO THOUSAND EIGHTEEN, AND TWENTY-FIVE PERCENT FOR TAXABLE YEARS BEGIN- 7 NING ON OR AFTER JANUARY FIRST, TWO THOUSAND EIGHTEEN. 8 S 2. Paragraph (b) of subdivision 1 of section 210 of the tax law is 9 amended by adding a new subparagraph 3 to read as follows: 10 (3) FOR A QUALIFIED NEW YORK MANUFACTURER, AS DEFINED IN SUBPARAGRAPH 11 TWO OF THIS PARAGRAPH, THE RATE AT WHICH THE TAX IS COMPUTED IN EFFECT 12 FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND 13 THIRTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND FOURTEEN SHALL BE 14 REDUCED BY NINE AND TWO-TENTHS PERCENT FOR TAXABLE YEARS COMMENCING ON 15 OR AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN AND BEFORE JANUARY FIRST, 16 TWO THOUSAND FIFTEEN, TWELVE AND THREE-TENTHS PERCENT FOR TAXABLE YEARS 17 COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN AND BEFORE 18 JANUARY FIRST, TWO THOUSAND SIXTEEN, FIFTEEN AND FOUR-TENTHS PERCENT FOR 19 TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN 20 AND BEFORE JANUARY FIRST, TWO THOUSAND EIGHTEEN, AND TWENTY-FIVE PERCENT 21 FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND 22 EIGHTEEN. 23 S 3. Paragraph (c) of subdivision 1 of section 210 of the tax law is 24 amended by adding a new subparagraph (iii) to read as follows: 25 (III) FOR A QUALIFIED NEW YORK MANUFACTURER, AS DEFINED IN SUBPARA- 26 GRAPH (VI) OF PARAGRAPH (A) OF THIS SUBDIVISION, THE RATE AT WHICH THE 27 TAX IS COMPUTED IN EFFECT FOR TAXABLE YEARS BEGINNING ON OR AFTER JANU- 28 ARY FIRST, TWO THOUSAND THIRTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND 29 FOURTEEN FOR QUALIFIED NEW YORK MANUFACTURERS SHALL BE REDUCED BY NINE 30 AND TWO-TENTHS PERCENT FOR TAXABLE YEARS COMMENCING ON OR AFTER JANUARY 31 FIRST, TWO THOUSAND FOURTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND 32 FIFTEEN, TWELVE AND THREE-TENTHS PERCENT FOR TAXABLE YEARS COMMENCING ON 33 OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN AND BEFORE JANUARY FIRST, 34 TWO THOUSAND SIXTEEN, FIFTEEN AND FOUR-TENTHS PERCENT FOR TAXABLE YEARS 35 COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN AND BEFORE 36 JANUARY FIRST, TWO THOUSAND EIGHTEEN, AND TWENTY-FIVE PERCENT FOR TAXA- 37 BLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND EIGHTEEN. 38 S 4. Paragraph (d) of subdivision 1 of section 210 of the tax law is 39 amended by adding a new subparagraph 6 to read as follows: 40 (6) FOR A QUALIFIED NEW YORK MANUFACTURER, AS DEFINED IN SUBPARAGRAPH 41 (VI) OF PARAGRAPH (A) OF THIS SUBDIVISION, THE AMOUNTS PRESCRIBED IN 42 SUBPARAGRAPHS ONE AND FOUR OF THIS PARAGRAPH IN EFFECT FOR TAXABLE YEARS 43 BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND THIRTEEN AND BEFORE 44 JANUARY FIRST, TWO THOUSAND FOURTEEN FOR QUALIFIED NEW YORK MANUFACTUR- 45 ERS SHALL BE REDUCED BY NINE AND TWO-TENTHS PERCENT FOR TAXABLE YEARS 46 COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN AND BEFORE 47 JANUARY FIRST, TWO THOUSAND FIFTEEN, TWELVE AND THREE-TENTHS PERCENT FOR 48 TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN 49 AND BEFORE JANUARY FIRST, TWO THOUSAND SIXTEEN, FIFTEEN AND FOUR-TENTHS 50 PERCENT FOR TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO 51 THOUSAND SIXTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND EIGHTEEN, AND 52 TWENTY-FIVE PERCENT FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 53 FIRST, TWO THOUSAND EIGHTEEN. 54 S 5. This act shall take effect immediately. 55 PART AA S. 2609--D 81 A. 3009--D 1 Section 1. Section 210 of the tax law is amended by adding a new 2 subdivision 23-a to read as follows: 3 23-A. HIRE A VET CREDIT. (A) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS 4 BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN AND BEFORE 5 JANUARY FIRST, TWO THOUSAND SEVENTEEN, A TAXPAYER SHALL BE ALLOWED A 6 CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBDIVISION, AGAINST THE TAX 7 IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE 8 YEAR AND FOR NOT LESS THAN THIRTY-FIVE HOURS EACH WEEK, A QUALIFIED 9 VETERAN WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE YEAR 10 IN WHICH THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT BY THE 11 TAXPAYER. IF THE TAXPAYER CLAIMS THE CREDIT ALLOWED UNDER THIS SUBDIVI- 12 SION, THE TAXPAYER MAY NOT USE THE HIRING OF A QUALIFIED VETERAN THAT IS 13 THE BASIS FOR THIS CREDIT IN THE BASIS OF ANY OTHER CREDIT ALLOWED UNDER 14 THIS ARTICLE. 15 (B) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL: 16 (1) WHO SERVED ON ACTIVE DUTY IN THE UNITED STATES ARMY, NAVY, AIR 17 FORCE, MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO SERVED 18 IN ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE ARMY 19 NATIONAL GUARD, AIR NATIONAL GUARD, NEW YORK GUARD OR NEW YORK NAVAL 20 MILITIA; WHO WAS RELEASED FROM ACTIVE DUTY BY GENERAL OR HONORABLE 21 DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE; 22 (2) WHO COMMENCES EMPLOYMENT BY THE QUALIFIED TAXPAYER ON OR AFTER 23 JANUARY FIRST, TWO THOUSAND FOURTEEN, AND BEFORE JANUARY FIRST, TWO 24 THOUSAND SIXTEEN; AND 25 (3) WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY, THAT 26 HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY 27 WEEK IN THE ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR TO HIS OR 28 HER EMPLOYMENT BY THE TAXPAYER. 29 (C) EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN EMPLOYEE 30 AND HIRE A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF QUALIFYING FOR 31 THIS CREDIT. 32 (D) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF 33 THE TOTAL AMOUNT OF WAGES PAID TO THE QUALIFIED VETERAN DURING THE 34 VETERAN'S FIRST FULL YEAR OF EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE 35 QUALIFIED VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B) OF 36 SUBDIVISION ONE OF SECTION EIGHTY-FIVE OF THE CIVIL SERVICE LAW, THE 37 AMOUNT OF THE CREDIT SHALL BE FIFTEEN PERCENT OF THE TOTAL AMOUNT OF 38 WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR 39 OF EMPLOYMENT. THE CREDIT ALLOWED PURSUANT TO THIS SUBDIVISION SHALL NOT 40 EXCEED IN ANY TAXABLE YEAR, FIVE THOUSAND DOLLARS FOR ANY QUALIFIED 41 VETERAN AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS A 42 DISABLED VETERAN. 43 (E) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXA- 44 BLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE 45 AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF THIS SECTION. 46 HOWEVER, IF THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR 47 ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT 48 NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING 49 THREE YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR 50 YEARS. 51 S 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 52 of the tax law is amended by adding a new clause (xxxv) to read as 53 follows: 54 (XXXV) HIRE A VET CREDIT AMOUNT OF CREDIT UNDER SUBDIVISION 55 UNDER SUBSECTION (A-2) TWENTY-THREE-A OF SECTION TWO 56 HUNDRED TEN OR SUBSECTION (E-1) S. 2609--D 82 A. 3009--D 1 OF SECTION FOURTEEN HUNDRED 2 FIFTY-SIX 3 S 3. Section 606 of the tax law is amended by adding a new subsection 4 (a-2) to read as follows: 5 (A-2) HIRE A VET CREDIT. (1) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS 6 BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN AND BEFORE 7 JANUARY FIRST, TWO THOUSAND SEVENTEEN, A TAXPAYER SHALL BE ALLOWED A 8 CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBSECTION, AGAINST THE TAX 9 IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE 10 YEAR AND FOR NOT LESS THAN THIRTY-FIVE HOURS EACH WEEK, A QUALIFIED 11 VETERAN WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE YEAR 12 IN WHICH THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT BY THE 13 TAXPAYER. IF THE TAXPAYER CLAIMS THE CREDIT ALLOWED UNDER THIS 14 SUBSECTION, THE TAXPAYER MAY NOT USE THE HIRING OF A QUALIFIED VETERAN 15 THAT IS THE BASIS FOR THIS CREDIT IN THE BASIS OF ANY OTHER CREDIT 16 ALLOWED UNDER THIS ARTICLE. 17 (2) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL: 18 (A) WHO SERVED ON ACTIVE DUTY IN THE UNITED STATES ARMY, NAVY, AIR 19 FORCE, MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO SERVED 20 IN ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE ARMY 21 NATIONAL GUARD, AIR NATIONAL GUARD, NEW YORK GUARD OR NEW YORK NAVAL 22 MILITIA; WHO WAS RELEASED FROM ACTIVE DUTY BY GENERAL OR HONORABLE 23 DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE; 24 (B) WHO COMMENCES EMPLOYMENT BY THE QUALIFIED TAXPAYER ON OR AFTER 25 JANUARY FIRST, TWO THOUSAND FOURTEEN, AND BEFORE JANUARY FIRST, TWO 26 THOUSAND SIXTEEN; AND 27 (C) WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY, THAT 28 HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY 29 WEEK IN THE ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR TO HIS OR 30 HER EMPLOYMENT BY THE TAXPAYER. 31 (3) EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN EMPLOYEE 32 AND HIRE A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF QUALIFYING FOR 33 THIS CREDIT. 34 (4) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF 35 THE TOTAL AMOUNT OF WAGES PAID TO HE QUALIFIED VETERAN DURING THE VETER- 36 AN'S FIRST FULL YEAR OF EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE 37 QUALIFIED VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B) OF 38 SUBDIVISION ONE OF SECTION EIGHTY-FIVE OF THE CIVIL SERVICE LAW, THE 39 AMOUNT OF THE CREDIT SHALL BE FIFTEEN PERCENT OF THE TOTAL AMOUNT OF 40 WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR 41 OF EMPLOYMENT. THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION SHALL NOT 42 EXCEED IN ANY TAXABLE YEAR, FIVE THOUSAND DOLLARS FOR ANY QUALIFIED 43 VETERAN AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS A 44 DISABLED VETERAN. 45 (5) CARRYOVER. IF THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBSECTION 46 FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH YEAR, ANY 47 AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER 48 TO THE FOLLOWING THREE YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX 49 FOR SUCH YEAR OR YEARS. 50 S 4. Section 1456 of the tax law is amended by adding a new subsection 51 (e-1) to read as follows: 52 (E-1) HIRE A VET CREDIT. (1) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS 53 BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN AND BEFORE 54 JANUARY FIRST, TWO THOUSAND SEVENTEEN, A TAXPAYER SHALL BE ALLOWED A 55 CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBSECTION, AGAINST THE TAX 56 IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE S. 2609--D 83 A. 3009--D 1 YEAR AND FOR NOT LESS THAN THIRTY-FIVE HOURS EACH WEEK, A QUALIFIED 2 VETERAN WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE YEAR 3 IN WHICH THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT BY THE 4 TAXPAYER. IF THE TAXPAYER CLAIMS THE CREDIT ALLOWED UNDER THIS 5 SUBSECTION, THE TAXPAYER MAY NOT USE THE HIRING OF A QUALIFIED VETERAN 6 THAT IS THE BASIS FOR THIS CREDIT IN THE BASIS OF ANY OTHER CREDIT 7 ALLOWED IN THIS ARTICLE. 8 (2) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL: 9 (A) WHO SERVED ON ACTIVE DUTY IN THE UNITED STATES ARMY, NAVY, AIR 10 FORCE, MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO SERVED 11 IN ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE ARMY 12 NATIONAL GUARD, AIR NATIONAL GUARD, NEW YORK GUARD OR NEW YORK NAVAL 13 MILITIA; WHO WAS RELEASED FROM ACTIVE DUTY BY GENERAL OR HONORABLE 14 DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE; 15 (B) WHO COMMENCES EMPLOYMENT BY THE QUALIFIED TAXPAYER ON OR AFTER 16 JANUARY FIRST, TWO THOUSAND FOURTEEN, AND BEFORE JANUARY FIRST, TWO 17 THOUSAND SIXTEEN; AND 18 (C) WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY, THAT 19 HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY 20 WEEK IN THE ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR TO HIS OR 21 HER EMPLOYMENT BY THE TAXPAYER. 22 (3) EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN EMPLOYEE 23 AND HIRE A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF QUALIFYING FOR 24 THIS CREDIT. 25 (4) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF 26 THE TOTAL AMOUNT OF WAGES PAID TO THE QUALIFIED VETERAN DURING THE 27 VETERAN'S FIRST FULL YEAR OF EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE 28 QUALIFIED VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B) OF 29 SUBDIVISION ONE OF SECTION EIGHTY-FIVE OF THE CIVIL SERVICE LAW, THE 30 AMOUNT OF THE CREDIT SHALL BE FIFTEEN PERCENT OF THE TOTAL AMOUNT OF 31 WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR 32 OF EMPLOYMENT. THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION SHALL NOT 33 EXCEED IN ANY TAXABLE YEAR, FIVE THOUSAND DOLLARS FOR ANY QUALIFIED 34 VETERAN AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS A 35 DISABLED VETERAN. 36 (5) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXA- 37 BLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE 38 AMOUNT PRESCRIBED IN PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR- 39 TEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED- 40 IT ALLOWABLE UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX 41 TO SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR 42 MAY BE CARRIED OVER TO THE FOLLOWING THREE YEARS AND MAY BE DEDUCTED 43 FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. 44 S 5. Section 1511 of the tax law is amended by adding a new subdivi- 45 sion (g-1) to read as follows: 46 (G-1) HIRE A VET CREDIT. (1) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS 47 BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN AND BEFORE 48 JANUARY FIRST, TWO THOUSAND SEVENTEEN, A TAXPAYER SHALL BE ALLOWED A 49 CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBDIVISION, AGAINST THE TAX 50 IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE 51 YEAR AND FOR NOT LESS THAN THIRTY-FIVE HOURS EACH WEEK, A QUALIFIED 52 VETERAN WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE YEAR 53 IN WHICH THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT BY THE 54 TAXPAYER. IF THE TAXPAYER CLAIMS THE CREDIT ALLOWED UNDER THIS SUBDIVI- 55 SION, THE TAXPAYER MAY NOT USE THE HIRING OF A QUALIFIED VETERAN THAT IS S. 2609--D 84 A. 3009--D 1 THE BASIS FOR THIS CREDIT IN THE BASIS OF ANY OTHER CREDIT ALLOWED UNDER 2 THIS ARTICLE. 3 (2) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL: 4 (A) WHO SERVED ON ACTIVE DUTY IN THE UNITED STATES ARMY, NAVY, AIR 5 FORCE, MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO SERVED 6 IN ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE ARMY 7 NATIONAL GUARD, AIR NATIONAL GUARD, NEW YORK GUARD OR NEW YORK NAVAL 8 MILITIA; WHO WAS RELEASED FROM ACTIVE DUTY BY GENERAL OR HONORABLE 9 DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE; 10 (B) WHO COMMENCES EMPLOYMENT BY THE QUALIFIED TAXPAYER ON OR AFTER 11 JANUARY FIRST, TWO THOUSAND FOURTEEN, AND BEFORE JANUARY FIRST, TWO 12 THOUSAND SIXTEEN; AND 13 (C) WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY, THAT 14 HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY 15 WEEK IN THE ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR TO HIS OR 16 HER EMPLOYMENT BY THE TAXPAYER. 17 (3) EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN EMPLOYEE 18 AND HIRE A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF QUALIFYING FOR 19 THIS CREDIT. 20 (4) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF 21 THE TOTAL AMOUNT OF WAGES PAID TO THE QUALIFIED VETERAN DURING THE 22 VETERAN'S FIRST FULL YEAR OF EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE 23 QUALIFIED VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B) OF 24 SUBDIVISION ONE OF SECTION EIGHTY-FIVE OF THE CIVIL SERVICE LAW, THE 25 AMOUNT OF THE CREDIT SHALL BE FIFTEEN PERCENT OF THE TOTAL AMOUNT OF 26 WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR 27 OF EMPLOYMENT. THE CREDIT ALLOWED PURSUANT TO THIS SUBDIVISION SHALL 28 NOT EXCEED IN ANY TAXABLE YEAR, FIVE THOUSAND DOLLARS FOR ANY QUALIFIED 29 VETERAN AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS A 30 DISABLED VETERAN. 31 (5) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXA- 32 BLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE 33 AMOUNT PRESCRIBED IN PARAGRAPH FOUR OF SUBDIVISION (A) OF SECTION 34 FIFTEEN HUNDRED TWO OF THIS ARTICLE OR THE MINIMUM TAX PRESCRIBED IN 35 SECTION FIFTEEN HUNDRED TWO-A OF THIS ARTICLE, WHICHEVER IS APPLICABLE. 36 HOWEVER, IF THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR 37 ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT 38 NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING 39 THREE YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR 40 YEARS. 41 S 6. This act shall take effect immediately. 42 PART BB 43 Section 1. Paragraphs (a) and (b) of subdivision 6 of section 18-a of 44 the public service law, as added by section 4 of part NN of chapter 59 45 of the laws of 2009, are amended to read as follows: 46 (a) Notwithstanding any provision of law to the contrary, and subject 47 to the exceptions provided for in paragraph (b) of this subdivision, for 48 the state fiscal year beginning on April first, two thousand nine and 49 [four] EIGHT state fiscal years thereafter, a temporary annual assess- 50 ment (hereinafter "temporary state energy and utility service conserva- 51 tion assessment") is hereby imposed on public utility companies (includ- 52 ing for the purposes of this subdivision municipalities other than 53 municipalities as defined in section eighty-nine-l of this chapter), 54 corporations (including for purposes of this subdivision the Long Island S. 2609--D 85 A. 3009--D 1 power authority), and persons subject to the commission's regulation 2 (hereinafter such public utility companies, corporations, and persons 3 are referred to collectively as the "utility entities") to encourage the 4 conservation of energy and other resources provided through utility 5 entities, to be assessed in the manner provided in this subdivision; 6 provided, however, that such assessment shall not be imposed upon tele- 7 phone corporations as defined in subdivision seventeen of section two of 8 this article. 9 (b) The temporary state energy and utility service conservation 10 assessment shall be [equal to two] BASED UPON THE FOLLOWING percentum of 11 the utility entity's gross operating revenues derived from intrastate 12 utility operations in the last preceding calendar year, minus the 13 amount, if any, that such utility entity is assessed pursuant to subdi- 14 visions one and two of this section for the corresponding state fiscal 15 year period: (1) TWO PERCENTUM FOR THE STATE FISCAL YEAR BEGINNING APRIL 16 FIRST, TWO THOUSAND THIRTEEN AND THE STATE FISCAL YEAR BEGINNING APRIL 17 FIRST, TWO THOUSAND FOURTEEN; (2) ONE AND THREE-QUARTERS PERCENTUM FOR 18 THE STATE FISCAL YEAR BEGINNING APRIL FIRST, TWO THOUSAND FIFTEEN; AND 19 (3) ONE AND ONE-HALF PERCENTUM FOR THE STATE FISCAL YEAR BEGINNING APRIL 20 FIRST, TWO THOUSAND SIXTEEN. WITH RESPECT TO THE TEMPORARY STATE ENERGY 21 AND UTILITY SERVICE CONSERVATION ASSESSMENT TO BE PAID FOR THE STATE 22 FISCAL YEAR BEGINNING APRIL FIRST, TWO THOUSAND SEVENTEEN AND NOTWITH- 23 STANDING CLAUSE (I) OF PARAGRAPH (D) OF THIS SUBDIVISION, ON OR BEFORE 24 MARCH TENTH, TWO THOUSAND SEVENTEEN, UTILITY ENTITIES SHALL MAKE A 25 PAYMENT EQUAL TO ONE-HALF OF THE ASSESSMENT PAID BY SUCH ENTITIES PURSU- 26 ANT TO THIS PARAGRAPH FOR THE STATE FISCAL YEAR BEGINNING ON APRIL 27 FIRST, TWO THOUSAND SIXTEEN. With respect to the Long Island power 28 authority, the temporary state energy and utility service conservation 29 assessment shall be [equal to one] BASED UPON THE FOLLOWING percentum of 30 such authority's gross operating revenues derived from intrastate utili- 31 ty operations in the last preceding calendar year: (1) ONE PERCENTUM FOR 32 THE STATE FISCAL YEAR BEGINNING APRIL FIRST, TWO THOUSAND THIRTEEN AND 33 THE STATE FISCAL YEAR BEGINNING APRIL FIRST, TWO THOUSAND FOURTEEN; (2) 34 THREE-QUARTERS OF ONE PERCENTUM FOR THE STATE FISCAL YEAR BEGINNING 35 APRIL FIRST, TWO THOUSAND FIFTEEN; AND (3) ONE-HALF PERCENTUM FOR THE 36 STATE FISCAL YEAR BEGINNING APRIL FIRST, TWO THOUSAND SIXTEEN. WITH 37 RESPECT TO THE TEMPORARY STATE ENERGY AND UTILITY SERVICE CONSERVATION 38 ASSESSMENT TO BE PAID FOR THE STATE FISCAL YEAR BEGINNING APRIL FIRST, 39 TWO THOUSAND SEVENTEEN AND NOTWITHSTANDING CLAUSE (I) OF PARAGRAPH (D) 40 OF THIS SUBDIVISION, ON OR BEFORE MARCH TENTH, TWO THOUSAND SEVENTEEN, 41 THE LONG ISLAND POWER AUTHORITY SHALL MAKE A PAYMENT EQUAL TO ONE-HALF 42 OF THE ASSESSMENT IT PAID FOR THE STATE FISCAL YEAR BEGINNING ON APRIL 43 FIRST, TWO THOUSAND SIXTEEN. No corporation or person subject to the 44 jurisdiction of the commission only with respect to safety, or the power 45 authority of the state of New York, shall be subject to the temporary 46 state energy and utility service conservation assessment provided for 47 under this subdivision. Utility entities whose gross operating revenues 48 from intrastate utility operations are five hundred thousand dollars or 49 less in the preceding calendar year shall not be subject to the tempo- 50 rary state energy and utility service conservation assessment. The mini- 51 mum temporary state energy and utility service conservation assessment 52 to be billed to any utility entity whose gross revenues from intrastate 53 utility operations are in excess of five hundred thousand dollars in the 54 preceding calendar year shall be two hundred dollars. 55 S 2. Section 6 of part NN of chapter 59 of the laws of 2009, amending 56 the public service law relating to financing the operations of the S. 2609--D 86 A. 3009--D 1 department of public service, the public service commission, department 2 support and energy management services provided by other state agencies, 3 increasing the utility assessment cap and the minimum threshold for 4 collection thereunder, and establishing a temporary state energy and 5 utility service conservation assessment and providing for the collection 6 thereof, is amended to read as follows: 7 S 6. This act shall take effect immediately; provided, however, that 8 subdivision 6 of section 18-a of the public service law, as added by 9 section four of this act shall take effect April 1, 2009 and shall 10 expire and be deemed repealed March 31, [2014] 2017; [and] provided, 11 [further,] that if section four of this act shall become law after April 12 1, 2009, it shall take effect immediately and shall be deemed to have 13 been in full force and effect on and after April 1, 2009; AND PROVIDED, 14 FURTHER, THAT THE PROVISIONS OF SUBDIVISION 6 OF SECTION 18-A OF THE 15 PUBLIC SERVICE LAW SHALL CONTINUE IN EFFECT WITH REGARD TO ALL SUCH 16 ASSESSMENTS INCURRED PRIOR TO REPEAL OF THIS SECTION. 17 S 3. This act shall take effect immediately and shall be deemed to 18 have been in full force and effect on and after April 1, 2013; provided, 19 however, that the amendments to subdivision 6 of section 18-a of the 20 public service law made by section one of this act shall not affect the 21 repeal of such subdivision and shall be deemed to be repealed therewith. 22 PART CC 23 Section 1. Section 606 of the tax law is amended by adding a new 24 subsection (vv) to read as follows: 25 (VV) FAMILY TAX RELIEF CREDIT. 1. AN INDIVIDUAL TAXPAYER WHO MEETS THE 26 ELIGIBILITY STANDARDS IN PARAGRAPH TWO OF THIS SUBSECTION SHALL BE 27 ALLOWED A CREDIT AGAINST THE TAXES IMPOSED BY THIS ARTICLE OF THREE 28 HUNDRED FIFTY DOLLARS PER RETURN FOR TAX YEARS TWO THOUSAND FOURTEEN, 29 TWO THOUSAND FIFTEEN, AND TWO THOUSAND SIXTEEN. 30 2. TO BE ELIGIBLE FOR THE CREDIT, THE TAXPAYER (OR TAXPAYERS FILING 31 JOINT RETURNS) ON THE PERSONAL INCOME TAX RETURN FILED FOR THE TAXABLE 32 YEAR TWO YEARS PRIOR, MUST HAVE (A) BEEN A RESIDENT, (B) CLAIMED ONE OR 33 MORE DEPENDENT CHILDREN WHO WERE UNDER THE AGE OF SEVENTEEN ON THE LAST 34 DAY OF THE TAXABLE YEAR, (C) HAD NEW YORK ADJUSTED GROSS INCOME OF AT 35 LEAST FORTY THOUSAND DOLLARS BUT NO GREATER THAN THREE HUNDRED THOUSAND 36 DOLLARS, AND (D) HAD A TAX LIABILITY AS DETERMINED UNDER PARAGRAPH THREE 37 OF THIS SUBSECTION OF GREATER THAN OR EQUAL TO ZERO. 38 3. FOR PURPOSES OF THIS SUBSECTION, TAX LIABILITY SHALL BE DETERMINED 39 BY APPLYING THE TAX RATE CALCULATIONS IN SECTIONS SIX HUNDRED ONE AND 40 SIX HUNDRED ONE-A OF THIS PART TO THE TAXPAYER'S TAXABLE INCOME AND THEN 41 SUBTRACTING FROM THAT AMOUNT ANY OTHER TAX CREDITS ALLOWED UNDER THIS 42 SECTION OR SECTION SIX HUNDRED TWENTY OF THIS ARTICLE. 43 4. FOR EACH YEAR THIS CREDIT IS ALLOWED, ON OR BEFORE OCTOBER 44 FIFTEENTH OF SUCH YEAR, THE COMMISSIONER SHALL DETERMINE THE TAXPAYER'S 45 ELIGIBILITY FOR THIS CREDIT UTILIZING THE INFORMATION AVAILABLE TO THE 46 COMMISSIONER ON THE TAXPAYER'S PERSONAL INCOME TAX RETURN FILED FOR THE 47 TAXABLE YEAR TWO YEARS PRIOR TO THE TAXABLE YEAR IN WHICH THE CREDIT IS 48 ALLOWED. FOR THOSE TAXPAYERS WHOM THE COMMISSIONER HAS DETERMINED ELIGI- 49 BLE FOR THIS CREDIT, THE COMMISSIONER SHALL ADVANCE A PAYMENT OF THREE 50 HUNDRED FIFTY DOLLARS. WHEN A TAXPAYER FILES HIS OR HER RETURN FOR THE 51 TAXABLE YEAR, SUCH TAXPAYER SHALL PROPERLY RECONCILE THAT PAYMENT ON HIS 52 OR HER RETURN. 53 5. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBSECTION SHALL 54 EXCEED THE TAXPAYER'S TAX FOR THE TAXABLE YEAR, THE EXCESS SHALL BE S. 2609--D 87 A. 3009--D 1 TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORD- 2 ANCE WITH THE PROVISIONS OF SIX HUNDRED EIGHTY-SIX OF THIS ARTICLE, 3 PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON. 4 S 2. This act shall take effect immediately. 5 PART DD 6 Section 1. Subdivision (b) of section 25-a of the labor law, as added 7 by section 1 of part D of chapter 56 of the laws of 2011, is amended to 8 read as follows: 9 (b) Definitions. (1) The term "qualified employer" means an employer 10 that has been certified by the commissioner to participate in the New 11 York youth works tax credit program and that employs one or more quali- 12 fied employees. 13 (2) The term "qualified employee" means an individual: 14 (i) who is between the age of sixteen and twenty-four; 15 (ii) who resides in a city with a population of [sixty-two] FIFTY-FIVE 16 thousand or more or a town with a population of four hundred eighty 17 thousand or more; 18 (iii) who is low-income or at-risk, as those terms are defined by the 19 commissioner; 20 (iv) who is unemployed prior to being hired by the qualified employer; 21 and 22 (v) who will be working for the qualified employer in a full-time or 23 part-time position that pays wages that are equivalent to the wages paid 24 for similar jobs, with appropriate adjustments for experience and train- 25 ing, and for which no other employee has been terminated, or where the 26 employer has not otherwise reduced its workforce by involuntary termi- 27 nations with the intention of filling the vacancy by creating a new 28 hire. 29 S 2. Subdivisions (a) and (d) of section 25-a of the labor law, subdi- 30 vision (a) as added by section 1 of part D of chapter 56 of the laws of 31 2011 and subdivision (d) as amended by section 1 of part T of chapter 59 32 of the laws of 2012, are amended to read as follows: 33 (a) The commissioner is authorized to establish and administer the New 34 York youth works tax credit program to provide tax incentives to employ- 35 ers for employing at risk youth in part-time and full-time positions 36 [in]. THERE WILL BE FIVE DISTINCT POOLS OF TAX INCENTIVES. PROGRAM ONE 37 WILL COVER TAX INCENTIVES ALLOCATED FOR two thousand twelve and two 38 thousand thirteen. PROGRAM TWO WILL COVER TAX INCENTIVES ALLOCATED IN 39 TWO THOUSAND FOURTEEN TO BE USED IN TWO THOUSAND FOURTEEN AND FIFTEEN. 40 PROGRAM THREE WILL COVER TAX INCENTIVES ALLOCATED IN TWO THOUSAND 41 FIFTEEN TO BE USED IN TWO THOUSAND FIFTEEN AND SIXTEEN. PROGRAM FOUR 42 WILL COVER TAX INCENTIVES ALLOCATED IN TWO THOUSAND SIXTEEN TO BE USED 43 IN TWO THOUSAND SIXTEEN AND SEVENTEEN. PROGRAM FIVE WILL COVER TAX 44 INCENTIVES ALLOCATED IN TWO THOUSAND SEVENTEEN TO BE USED IN TWO THOU- 45 SAND SEVENTEEN AND EIGHTEEN. The commissioner is authorized to allocate 46 up to twenty-five million dollars of tax credits under [this] program 47 ONE, SIX MILLION DOLLARS OF TAX CREDITS UNDER PROGRAM TWO, SIX MILLION 48 DOLLARS OF TAX CREDITS UNDER PROGRAM THREE, AND SIX MILLION DOLLARS OF 49 TAX CREDITS UNDER PROGRAM FOUR, AND SIX MILLION DOLLARS OF TAX CREDITS 50 UNDER PROGRAM FIVE. 51 (d) To participate in the New York youth works tax credit program, an 52 employer must submit an application (in a form prescribed by the commis- 53 sioner) to the commissioner after January first, two thousand twelve but 54 no later than November thirtieth, two thousand twelve FOR PROGRAM ONE, S. 2609--D 88 A. 3009--D 1 AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN BUT NO LATER THAN NOVEMBER 2 THIRTIETH, TWO THOUSAND FOURTEEN FOR PROGRAM TWO, AFTER JANUARY FIRST, 3 TWO THOUSAND FIFTEEN BUT NO LATER THAN NOVEMBER THIRTIETH, TWO THOUSAND 4 FIFTEEN FOR PROGRAM THREE, AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN BUT 5 NO LATER THAN NOVEMBER THIRTIETH, TWO THOUSAND SIXTEEN FOR PROGRAM FOUR, 6 AND AFTER JANUARY FIRST, TWO THOUSAND SEVENTEEN BUT NO LATER THAN NOVEM- 7 BER THIRTIETH, TWO THOUSAND SEVENTEEN FOR PROGRAM FIVE. The qualified 8 employees must start their employment on or after January first, two 9 thousand twelve but no later than December thirty-first, two thousand 10 twelve FOR PROGRAM ONE, ON OR AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN 11 BUT NO LATER THAN DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN FOR 12 PROGRAM TWO, ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN BUT NO 13 LATER THAN DECEMBER THIRTY-FIRST, TWO THOUSAND FIFTEEN FOR PROGRAM 14 THREE, ON OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN BUT NO LATER THAN 15 DECEMBER THIRTY-FIRST, TWO THOUSAND SIXTEEN FOR PROGRAM FOUR, AND ON OR 16 AFTER JANUARY FIRST, TWO THOUSAND SEVENTEEN BUT NO LATER THAN DECEMBER 17 THIRTY-FIRST, TWO THOUSAND SEVENTEEN FOR PROGRAM FIVE. The commissioner 18 shall establish guidelines and criteria that specify requirements for 19 employers to participate in the program including criteria for certify- 20 ing qualified employees. Any regulations that the commissioner deter- 21 mines are necessary may be adopted on an emergency basis notwithstanding 22 anything to the contrary in section two hundred two of the state admin- 23 istrative procedure act. Such requirements may include the types of 24 industries that the employers are engaged in. The commissioner may give 25 preference to employers that are engaged in demand occupations or indus- 26 tries, or in regional growth sectors, including those identified by the 27 regional economic development councils, such as clean energy, health- 28 care, advanced manufacturing and conservation. In addition, the commis- 29 sioner shall give preference to employers who offer advancement and 30 employee benefit packages to the qualified individuals. 31 S 3. This act shall take effect immediately. 32 PART EE 33 Section 1. The tax law is amended by adding a new section 38 to read 34 as follows: 35 S 38. MINIMUM WAGE REIMBURSEMENT CREDIT. (A) A TAXPAYER THAT IS AN 36 ELIGIBLE EMPLOYER OR AN OWNER OF AN ELIGIBLE EMPLOYER AS DEFINED IN 37 SUBDIVISION (B) OF THIS SECTION SHALL BE ELIGIBLE FOR A CREDIT AGAINST 38 THE TAX IMPOSED UNDER ARTICLE NINE, NINE-A, TWENTY-TWO, THIRTY-TWO OR 39 THIRTY-THREE OF THIS ARTICLE, PURSUANT TO THE PROVISIONS REFERENCED IN 40 SUBDIVISION (E) OF THIS SECTION. 41 (B) AN ELIGIBLE EMPLOYER IS A CORPORATION (INCLUDING A NEW YORK S 42 CORPORATION), A SOLE PROPRIETORSHIP, A LIMITED LIABILITY COMPANY OR A 43 PARTNERSHIP. AN ELIGIBLE EMPLOYEE IS AN INDIVIDUAL WHO IS (I) EMPLOYED 44 BY AN ELIGIBLE EMPLOYER IN NEW YORK STATE, (II) PAID AT THE MINIMUM WAGE 45 RATE AS DEFINED IN ARTICLE NINETEEN OF THE LABOR LAW DURING THE TAXABLE 46 YEAR BY THE ELIGIBLE EMPLOYER, (III) BETWEEN THE AGES OF SIXTEEN AND 47 NINETEEN DURING THE PERIOD IN WHICH HE OR SHE IS PAID AT SUCH MINIMUM 48 WAGE RATE BY THE ELIGIBLE EMPLOYER, AND (IV) A STUDENT DURING THE PERIOD 49 IN WHICH HE OR SHE IS PAID AT SUCH MINIMUM WAGE RATE BY THE TAXPAYER. 50 (C) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU- 51 SAND FOURTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND FIFTEEN, THE AMOUNT 52 OF THE CREDIT ALLOWED UNDER THIS SECTION SHALL BE EQUAL TO THE PRODUCT 53 OF THE TOTAL NUMBER OF HOURS WORKED DURING THE TAXABLE YEAR BY ELIGIBLE 54 EMPLOYEES FOR WHICH THEY WERE PAID AT THE MINIMUM WAGE RATE AS DEFINED S. 2609--D 89 A. 3009--D 1 IN ARTICLE NINETEEN OF THE LABOR LAW AND SEVENTY FIVE CENTS. FOR TAXA- 2 BLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN AND 3 BEFORE JANUARY FIRST, TWO THOUSAND SIXTEEN, THE AMOUNT OF THE CREDIT 4 ALLOWED UNDER THIS SECTION SHALL BE EQUAL TO THE PRODUCT OF THE TOTAL 5 NUMBER OF HOURS DURING THE TAXABLE YEAR WORKED BY ELIGIBLE EMPLOYEES FOR 6 WHICH THEY WERE PAID AT SUCH MINIMUM WAGE RATE AND ONE DOLLAR AND THIR- 7 TY-ONE CENTS. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, 8 TWO THOUSAND SIXTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN, 9 THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SECTION SHALL BE EQUAL TO 10 THE PRODUCT OF THE TOTAL NUMBER OF HOURS DURING THE TAXABLE YEAR WORKED 11 BY ELIGIBLE EMPLOYEES FOR WHICH THEY WERE PAID AT SUCH MINIMUM WAGE RATE 12 AND ONE DOLLAR AND THIRTY-FIVE CENTS. PROVIDED, HOWEVER, IF THE FEDERAL 13 MINIMUM WAGE ESTABLISHED BY FEDERAL LAW PURSUANT TO 29 U.S.C. SECTION 14 206 OR ITS SUCCESSORS IS INCREASED ABOVE EIGHTY-FIVE PERCENT OF THE 15 MINIMUM WAGE IN ARTICLE NINETEEN OF THE LABOR LAW, THE DOLLAR AMOUNTS IN 16 THIS SUBDIVISION SHALL BE REDUCED TO THE DIFFERENCE BETWEEN THE MINIMUM 17 WAGE IN ARTICLE NINETEEN OF THE LABOR LAW AND THE FEDERAL MINIMUM WAGE. 18 SUCH REDUCTION WOULD TAKE EFFECT ON THE DATE THAT EMPLOYERS ARE REQUIRED 19 TO PAY SUCH FEDERAL MINIMUM WAGE. 20 (D) EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN EMPLOYEE 21 AND HIRE AN ELIGIBLE EMPLOYEE SOLELY FOR THE PURPOSE OF QUALIFYING FOR 22 THIS CREDIT. AN ELIGIBLE EMPLOYEE WHO IS USED AS THE BASIS FOR THIS 23 CREDIT MAY NOT BE USED AS THE BASIS OF ANY OTHER CREDIT ALLOWED UNDER 24 THIS CHAPTER. 25 (E) CROSS REFERENCES: FOR APPLICATION OF THE CREDIT PROVIDED IN THIS 26 SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER: 27 (1) ARTICLE 9: SECTION 187-S. 28 (2) ARTICLE 9-A: SECTION 210, SUBDIVISION 46. 29 (3) ARTICLE 22: SECTION 606, SUBSECTION (AAA). 30 (4) ARTICLE 32: SECTION 1456, SUBSECTION (Z). 31 (5) ARTICLE 33: SECTION 1511, SUBDIVISION (CC). 32 S 2. The tax law is amended by adding a new section 187-s to read as 33 follows: 34 S 187-S MINIMUM WAGE REIMBURSEMENT CREDIT. (A) ALLOWANCE OF CREDIT. A 35 TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN 36 SECTION THIRTY-EIGHT OF THIS CHAPTER AGAINST THE TAX IMPOSED BY SECTION 37 ONE HUNDRED EIGHTY-FIVE OF THIS ARTICLE. 38 (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SECTION FOR 39 ANY TAXABLE YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN 40 THE MINIMUM TAX PRESCRIBED IN SUBDIVISION TWO OF SECTION ONE HUNDRED 41 EIGHTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED 42 UNDER THIS SECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, 43 ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR WILL BE 44 TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORD- 45 ANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS 46 CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION 47 ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST 48 WILL BE PAID THEREON. 49 S 3. Section 210 of the tax law is amended by adding a new subdivision 50 46 to read as follows: 51 46. MINIMUM WAGE REIMBURSEMENT CREDIT. (A) ALLOWANCE OF CREDIT. A 52 TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN 53 SECTION THIRTY-EIGHT OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS 54 ARTICLE. 55 (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION 56 FOR ANY TAXABLE YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS S. 2609--D 90 A. 3009--D 1 THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF THIS 2 SECTION. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION 3 FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CRED- 4 IT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR WILL BE TREATED AS AN OVER- 5 PAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE 6 PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, 7 HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHT- 8 Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST WILL BE PAID THERE- 9 ON. 10 S 4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 11 of the tax law is amended by adding a new clause (xxxv) to read as 12 follows: 13 (XXXV) MINIMUM WAGE REIMBURSEMENT AMOUNT OF CREDIT UNDER SUBDIVISION 14 CREDIT UNDER SUBSECTION (AAA) FORTY-SIX OF SECTION TWO HUNDRED 15 TEN OR SUBSECTION (Z) OF 16 SECTION FOURTEEN HUNDRED 17 FIFTY-SIX 18 S 5. Section 606 of the tax law is amended by adding a new subsection 19 (aaa) to read as follows: 20 (AAA) MINIMUM WAGE REIMBURSEMENT CREDIT. (1) A TAXPAYER SHALL BE 21 ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION THIRTY-EIGHT OF 22 THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE. 23 (2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER 24 THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH 25 YEAR, THE EXCESS WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED 26 OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED 27 EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST WILL BE 28 PAID THEREON. 29 S 6. Section 1456 of the tax law is amended by adding a new subsection 30 (z) to read as follows: 31 (Z) MINIMUM WAGE REIMBURSEMENT CREDIT. (1) ALLOWANCE OF CREDIT. A 32 TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED UNDER 33 SECTION THIRTY-EIGHT OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS 34 ARTICLE. 35 (2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION 36 FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE THE TAX DUE FOR 37 SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED BY SUBSECTION (B) OF 38 SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE 39 AMOUNT OF CREDIT OF SUCH CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY 40 TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, THEN ANY AMOUNT OF CREDIT 41 THUS NOT DEDUCTIBLE SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE 42 CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE 43 THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS 44 OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER 45 NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON. 46 S 7. Section 1511 of the tax law is amended by adding a new subdivi- 47 sion (cc) to read as follows: 48 (CC) MINIMUM WAGE REIMBURSEMENT CREDIT. (1) ALLOWANCE OF CREDIT. A 49 TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED UNDER 50 SECTION THIRTY-EIGHT OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS 51 ARTICLE. 52 (2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION 53 FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS 54 THAN THE MINIMUM TAX FIXED BY PARAGRAPH FOUR OF SUBDIVISION (A) OF 55 SECTION FIFTEEN HUNDRED TWO OF THIS ARTICLE OR BY SECTION FIFTEEN 56 HUNDRED TWO-A OF THIS ARTICLE, WHICHEVER IS APPLICABLE. HOWEVER, IF THE S. 2609--D 91 A. 3009--D 1 AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR 2 REDUCES THE TAX TO SUCH AMOUNT, THEN ANY AMOUNT OF CREDIT THUS NOT 3 DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF 4 TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF 5 SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE 6 PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF 7 THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON. 8 S 8. This act shall take effect immediately. 9 PART FF 10 Section 1. Paragraph 1 of subsection (a) of section 601 of the tax law 11 as added by section 1 of part A of chapter 56 of the laws of 2011, is 12 amended to read as follows: 13 (1) (A) For taxable years beginning after two thousand eleven and 14 before two thousand [fifteen] EIGHTEEN: 15 If the New York taxable income is: The tax is: 16 Not over $16,000 4% of taxable income 17 Over $16,000 but not over $22,000 $640 plus 4.5% of excess over 18 $16,000 19 Over $22,000 but not over $26,000 $910 plus 5.25% of excess over 20 $22,000 21 Over $26,000 but not over $40,000 $1,120 plus 5.90% of excess over 22 $26,000 23 Over $40,000 but not over $150,000 $1,946 plus 6.45% of excess over 24 $40,000 25 Over $150,000 but not over $300,000 $9,041 plus 6.65% of excess over 26 $150,000 27 Over $300,000 but not over $2,000,000 $19,016 plus 6.85% of excess over 28 $300,000 29 Over $2,000,000 $135,466 plus 8.82% of excess over 30 $2,000,000 31 (B) For taxable years beginning after two thousand [fourteen] SEVEN- 32 TEEN, the following brackets and dollar amounts shall apply, as adjusted 33 by the cost of living adjustment prescribed in section six hundred one-a 34 of this part for tax years two thousand thirteen [and two thousand four- 35 teen] THROUGH TWO THOUSAND SEVENTEEN: 36 If the New York taxable income is: The tax is: 37 Not over $16,000 4% of taxable income 38 Over $16,000 but not over $22,000 $640 plus 4.5% of excess over 39 $16,000 40 Over $22,000 but not over $26,000 $910 plus 5.25% of excess over 41 $22,000 42 Over $26,000 but not over $40,000 $1,120 plus 5.90% of excess over 43 $26,000 44 Over $40,000 $1,946 plus 6.85% of excess over 45 $40,000 46 S 2. Paragraph 1 of subsection (b) of section 601 of the tax law as 47 added by section 3 of part A of chapter 56 of the laws of 2011, is 48 amended to read as follows: 49 (1) (A) For taxable years beginning after two thousand eleven and 50 before two thousand [fifteen] EIGHTEEN: S. 2609--D 92 A. 3009--D 1 If the New York taxable income is: The tax is: 2 Not over $12,000 4% of taxable income 3 Over $12,000 but not over $16,500 $480 plus 4.5% of excess over 4 $12,000 5 Over $16,500 but not over $19,500 $683 plus 5.25% of excess over 6 $16,500 7 Over $19,500 but not over $30,000 $840 plus 5.90% of excess over 8 $19,500 9 Over $30,000 but not over $100,000 $1,460 plus 6.45% of excess over 10 $30,000 11 Over $100,000 but not over $250,000 $5,975 plus 6.65% of excess over 12 $100,000 13 Over $250,000 but not over $1,500,000 $15,950 plus 6.85% of excess over 14 $250,000 15 Over $1,500,000 $101,575 plus 8.82% of excess over 16 $1,500,000 17 (B) For taxable years beginning after two thousand [fourteen] SEVEN- 18 TEEN, the following brackets and dollars amounts shall apply, as 19 adjusted by the cost of living adjustment prescribed in section six 20 hundred one-a of this part for tax years two thousand thirteen [and two 21 thousand fourteen] THROUGH TWO THOUSAND SEVENTEEN: 22 If the New York taxable income is: The tax is: 23 Not over $12,000 4% of taxable income 24 Over $12,000 but not over $16,500 $480 plus 4.5% of excess over 25 $12,000 26 Over $16,500 but not over $19,500 $683 plus 5.25% of excess over 27 $16,500 28 Over $19,500 but not over $30,000 $840 plus 5.90% of excess over 29 $19,500 30 Over $30,000 $1,460 plus 6.85% of excess over 31 $30,000 32 S 3. Paragraph 1 of subsection (c) of section 601 of the tax law as 33 added by section 5 of part A of chapter 56 of the laws of 2011, is 34 amended to read as follows: 35 (1) (A) For taxable years beginning after two thousand eleven and 36 before two thousand [fifteen] EIGHTEEN: 37 If the New York taxable income is: The tax is: 38 Not over $8,000 4% of taxable income 39 Over $8,000 but not over $11,000 $320 plus 4.5% of excess over 40 $8,000 41 Over $11,000 but not over $13,000 $455 plus 5.25% of excess over 42 $11,000 43 Over $13,000 but not over $20,000 $560 plus 5.90% of excess over 44 $13,000 45 Over $20,000 but not over $75,000 $973 plus 6.45% of excess over 46 $20,000 47 Over $75,000 but not over $200,000 $4,521 plus 6.65% of excess over 48 $75,000 49 Over $200,000 but not over $1,000,000 $12,833 plus 6.85% of excess over 50 $200,000 51 Over $1,000,000 $67,633 plus 8.82% of excess over S. 2609--D 93 A. 3009--D 1 $1,000,000 2 (B) For taxable years beginning after two thousand [fourteen] SEVEN- 3 TEEN, the following brackets and dollars amounts shall apply, as 4 adjusted by the cost of living adjustment prescribed in section six 5 hundred one-a of this part for tax years two thousand thirteen [and two 6 thousand fourteen] THROUGH TWO THOUSAND SEVENTEEN: 7 If the New York taxable income is: The tax is: 8 Not over $8,000 4% of taxable income 9 Over $8,000 but not over $11,000 $320 plus 4.5% of excess over 10 $8,000 11 Over $11,000 but not over $13,000 $455 plus 5.25% of excess over 12 $11,000 13 Over $13,000 but not over $20,000 $560 plus 5.90% of excess over 14 $13,000 15 Over $20,000 $973 plus 6.85% of excess over 16 $20,000 17 S 4. The opening paragraph of subsection (d-1) of section 601 of the 18 tax law as added by section 7 of part A of chapter 56 of the laws of 19 2011, is amended to read as follows: 20 Alternative tax table benefit recapture. Notwithstanding the 21 provisions of subsection (d) of this section, for taxable years begin- 22 ning after two thousand eleven and before two thousand [fifteen] EIGH- 23 TEEN, there is hereby imposed a supplemental tax in addition to the tax 24 imposed under subsections (a), (b) and (c) of this section for the 25 purpose of recapturing the benefit of the tax tables contained in such 26 subsections. During these taxable years, any reference in this chapter 27 to subsection (d) of this section shall be read as a reference to this 28 subsection. 29 S 5. Subparagraph (D) of paragraph 1 of subsection (d-1) of section 30 601 of the tax law, as added by section 7 of part A of chapter 56 of the 31 laws of 2011, is amended to read as follows: 32 (D) The tax table benefit is the difference between (i) the amount of 33 taxable income set forth in the tax table in paragraph one of subsection 34 (a) of this section not subject to the 8.82 percent rate of tax for the 35 taxable year multiplied by such rate and (ii) the dollar denominated tax 36 for such amount of taxable income set forth in the tax table applicable 37 to the taxable year in paragraph one of subsection (a) of this section 38 less the sum of the tax table benefits in subparagraphs (A), (B) and (C) 39 of this paragraph. The fraction for this subparagraph is computed as 40 follows: the numerator is the lesser of fifty thousand dollars or the 41 excess of New York adjusted gross income for the taxable year over two 42 million dollars and the denominator is fifty thousand dollars. This 43 subparagraph shall apply only to taxable years beginning on or after 44 January first, two thousand twelve and before January first, two thou- 45 sand [fifteen] EIGHTEEN. 46 S 6. Subparagraph (C) of paragraph 2 of subsection (d-1) of section 47 601 of the tax law, as added by section 7 of part A of chapter 56 of the 48 laws of 2011, is amended to read as follows: 49 (C) The tax table benefit is the difference between (i) the amount of 50 taxable income set forth in the tax table in paragraph one of subsection 51 (b) of this section not subject to the 8.82 percent rate of tax for the 52 taxable year multiplied by such rate and (ii) the dollar denominated tax 53 for such amount of taxable income set forth in the tax table applicable S. 2609--D 94 A. 3009--D 1 to the taxable year in paragraph one of subsection (b) of this section 2 less the sum of the tax table benefits in subparagraphs (A) and (B) of 3 this paragraph. The fraction for this subparagraph is computed as 4 follows: the numerator is the lesser of fifty thousand dollars or the 5 excess of New York adjusted gross income for the taxable year over one 6 million five hundred thousand dollars and the denominator is fifty thou- 7 sand dollars. This subparagraph shall apply only to taxable years begin- 8 ning on or after January first, two thousand twelve and before January 9 first, two thousand [fifteen] EIGHTEEN. 10 S 7. Subparagraph (C) of paragraph 3 of subsection (d-1) of section 11 601 of the tax law, as added by section 7 of part A of chapter 56 of the 12 laws of 2011, is amended to read as follows: 13 (C) The tax table benefit is the difference between (i) the amount of 14 taxable income set forth in the tax table in paragraph one of subsection 15 (b) of this section not subject to the 8.82 percent rate of tax for the 16 taxable year multiplied by such rate and (ii) the dollar denominated tax 17 for such amount of taxable income set forth in the tax table applicable 18 to the taxable year in paragraph one of subsection (b) of this section 19 less the sum of the tax table benefits in subparagraphs (A) and (B) of 20 this paragraph. The fraction for this subparagraph is computed as 21 follows: the numerator is the lesser of fifty thousand dollars or the 22 excess of New York adjusted gross income for the taxable year over one 23 million five hundred thousand dollars and the denominator is fifty thou- 24 sand dollars. This subparagraph shall apply only to taxable years begin- 25 ning on or after January first, two thousand twelve and before January 26 first, two thousand [fifteen] EIGHTEEN. 27 S 8. The opening paragraph of subsection (d-2) of section 601 of the 28 tax law, as added by section 8 of part A of chapter 56 of the laws of 29 2011, is amended to read as follows: 30 Tax table benefit recapture for tax years after two thousand [four- 31 teen] SEVENTEEN. For taxable years beginning after two thousand [four- 32 teen] SEVENTEEN, there is hereby imposed a supplemental tax in addition 33 to the tax imposed under subsections (a), (b) and (c) of this section 34 for the purpose of recapturing the benefit of the tax tables contained 35 in such subsections. The supplemental tax shall be an amount equal to 36 the table benefit in paragraph one of this subsection multiplied by the 37 fraction in such paragraph. [Any] DURING THESE TAXABLE YEARS, ANY refer- 38 ence in this chapter to subsection (d) of this section shall be read as 39 a reference to this subsection. 40 S 9. Subparagraph (B) of paragraph 1 of subsection (d-2) of section 41 601 of the tax law, as added by section 8 of part A of chapter 56 of 42 the laws of 2011, is amended to read as follows: 43 (B) The fraction is computed as follows: the numerator is the lesser 44 of fifty thousand dollars or the excess of New York adjusted gross 45 income for the taxable year over one hundred thousand dollars (as such 46 amount is adjusted by the cost of living adjustment prescribed in 47 section six hundred one-a of this part for tax years two thousand thir- 48 teen [and] THROUGH two thousand [fourteen] SEVENTEEN) and the denomina- 49 tor is fifty thousand dollars. 50 S 10. Subsection (a) of section 601-a of the tax law, as added by 51 section 9 of part A of chapter 56 of the laws of 2011, is amended to 52 read as follows: 53 (a) For tax year two thousand thirteen, the commissioner, not later 54 than September first, two thousand twelve, shall multiply the amounts 55 specified in subsection (b) of this section for tax year two thousand 56 twelve by one plus the cost of living adjustment described in subsection S. 2609--D 95 A. 3009--D 1 (c) of this section. For tax year two thousand fourteen, the commission- 2 er, not later than September first, two thousand thirteen, shall multi- 3 ply the amounts specified in subsection (b) of this section for tax year 4 two thousand thirteen by one plus the cost of living adjustment. FOR 5 EACH SUCCEEDING TAX YEAR AFTER TAX YEAR TWO THOUSAND FOURTEEN AND BEFORE 6 TAX YEAR TWO THOUSAND EIGHTEEN, THE COMMISSIONER, NOT LATER THAN SEPTEM- 7 BER FIRST OF SUCH TAX YEAR, SHALL MULTIPLY THE AMOUNTS SPECIFIED IN 8 SUBSECTION (B) OF THIS SECTION FOR SUCH TAX YEAR BY ONE PLUS THE COST OF 9 LIVING ADJUSTMENT DESCRIBED IN SUBSECTION (C) OF THIS SECTION FOR SUCH 10 TAX YEAR. 11 S 11. Subsection (f) of section 614 of the tax law, as added by 12 section 10 of part A of chapter 56 of the laws of 2011, is amended to 13 read as follows: 14 (f) Adjusted standard deduction. For taxable years beginning after two 15 thousand [fourteen] SEVENTEEN, the standard deductions set forth in this 16 section shall be THE AMOUNTS SET FORTH IN THIS SECTION adjusted by the 17 cost of living adjustment prescribed in section six hundred one-a of 18 this part for tax years two thousand thirteen [and two thousand four- 19 teen] THROUGH TWO THOUSAND SEVENTEEN. 20 S 12. Section 11 of part A of chapter 56 of the laws of 2011 is 21 amended to read as follows: 22 S 11. Notwithstanding any provision of law to the contrary, the method 23 of determining the amount to be deducted and withheld from wages on 24 account of taxes imposed by or pursuant to the authority of article 22 25 of the tax law in connection with the implementation of the provisions 26 of this act shall be prescribed by regulations of the commissioner of 27 taxation and finance with due consideration to the effect such withhold- 28 ing tables and methods would have on the receipt and amount of revenue. 29 The commissioner of taxation and finance shall adjust such withholding 30 tables and methods in regard to taxable years beginning in 2012 and 31 after in such manner as to result, so far as practicable, in withholding 32 from an employee's wages an amount substantially equivalent to the tax 33 reasonably estimated to be due for such taxable years as a result of the 34 provisions of this act. Any such regulations to implement a change in 35 withholding tables and methods for tax year 2012 shall be adopted and 36 effective as soon as practicable and the commissioner of taxation and 37 finance may adopt such regulations on an emergency basis notwithstanding 38 anything to the contrary in section 202 of the state administrative 39 procedure act. The commissioner of taxation and finance, in carrying out 40 the duties and responsibilities under this section, may accompany such a 41 rule making procedure with a similar procedure with respect to the taxes 42 required to be deducted and withheld by local laws imposing taxes pursu- 43 ant to the authority of articles 30, 30-A and 30-B of the tax law, the 44 provisions of any other law in relation to such a procedure to the 45 contrary notwithstanding. The withholding tables and methods for tax 46 years 2013 [and 2014] THROUGH 2017 shall not be prescribed by regu- 47 lation, notwithstanding any provision of the state administrative proce- 48 dure act to the contrary. 49 S 13. Section 11-1714 of the administrative code of the city of New 50 York is amended by adding a new subdivision (f) to read as follows: 51 (F) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU- 52 SAND THIRTEEN, THE AMOUNTS OF STANDARD DEDUCTIONS SET FORTH IN THIS 53 SECTION SHALL BE ADJUSTED IN THE SAME MANNER AS THE AMOUNTS OF STANDARD 54 DEDUCTIONS SET FORTH IN SECTION SIX HUNDRED FOURTEEN OF THE TAX LAW. 55 S 14. This act shall take effect immediately. S. 2609--D 96 A. 3009--D 1 PART GG 2 Section 1. The tax law is amended by adding a new section 630-c to 3 read as follows: 4 S 630-C. GIFT FOR NEW YORK STATE TEEN HEALTH EDUCATION FUND. AN INDI- 5 VIDUAL IN ANY TAXABLE YEAR MAY ELECT TO CONTRIBUTE TO THE TEEN HEALTH 6 EDUCATION FUND FOR EDUCATIONAL PROGRAMS IN SCHOOLS RELATED TO HEALTH. 7 THE CONTRIBUTION SHALL BE IN ANY WHOLE DOLLAR AMOUNT AND SHALL NOT 8 REDUCE THE AMOUNT OF STATE TAX OWED BY SUCH INDIVIDUAL. THE COMMISSIONER 9 SHALL INCLUDE SPACE ON THE PERSONAL INCOME TAX RETURN TO ENABLE A 10 TAXPAYER TO MAKE SUCH CONTRIBUTION. NOTWITHSTANDING ANY OTHER PROVISION 11 OF LAW ALL REVENUES COLLECTED PURSUANT TO THIS SECTION SHALL BE CREDITED 12 TO THE NEW YORK STATE TEEN HEALTH EDUCATION FUND AND USED ONLY FOR THOSE 13 PURPOSES ENUMERATED IN SECTION NINETY-NINE-U OF THE STATE FINANCE LAW. 14 S 2. The state finance law is amended by adding a new section 99-u to 15 read as follows: 16 S 99-U. NEW YORK STATE TEEN HEALTH EDUCATION FUND. 1. THERE IS HEREBY 17 ESTABLISHED IN THE CUSTODY OF THE COMMISSIONER OF TAXATION AND FINANCE A 18 SPECIAL ACCOUNT TO BE KNOWN AS THE "NEW YORK STATE TEEN HEALTH EDUCATION 19 FUND". 20 2. SUCH FUND SHALL CONSIST OF ALL REVENUES RECEIVED BY THE DEPARTMENT 21 OF TAXATION AND FINANCE, PURSUANT TO THE PROVISIONS OF SECTION SIX 22 HUNDRED THIRTY-C OF THE TAX LAW AND ALL OTHER MONEYS APPROPRIATED THERE- 23 TO FROM ANY OTHER FUND OR SOURCE PURSUANT TO LAW. NOTHING CONTAINED IN 24 THIS SECTION SHALL PREVENT THE STATE FROM RECEIVING GRANTS, GIFTS OR 25 BEQUESTS FOR THE PURPOSES OF THE FUND AS DEFINED IN THIS SECTION AND 26 DEPOSITING THEM INTO THE FUND ACCORDING TO LAW. 27 3. THE MONEYS IN SAID ACCOUNT SHALL BE RETAINED BY THE FUND AND SHALL 28 BE RELEASED BY THE COMMISSIONER OF TAXATION AND FINANCE ONLY UPON 29 CERTIFICATES SIGNED BY THE COMMISSIONER OF EDUCATION OR HIS OR HER 30 DESIGNEE AND ONLY FOR THE PURPOSES SET FORTH IN THIS SECTION. 31 4. THE MONEYS IN SUCH FUND SHALL BE EXPENDED FOR THE PURPOSE OF 32 SUPPLEMENTING EDUCATIONAL PROGRAMS IN SCHOOLS FOR HEALTH AND AWARENESS 33 OF ISSUES FACING TEENS TODAY WHEN IT COMES TO THEIR HEALTH. ELIGIBLE 34 HEALTH PROGRAMS ARE THOSE WITH AN ESTABLISHED CURRICULUM PROVIDING 35 INSTRUCTION ON ALCOHOL, TOBACCO AND OTHER DRUG ABUSE PREVENTION, THE 36 CAUSES AND PROBLEMS ASSOCIATED WITH TEEN OBESITY, AND FOR AWARENESS OF 37 THE SYMPTOMS OF TEEN ENDOMETRIOSIS. 38 S 3. This act shall take effect immediately. 39 PART HH 40 Section 1. Subdivision 11 of section 213 of the state finance law is 41 amended by adding a new paragraph (g) to read as follows: 42 (G) A QUALIFYING TECHNOLOGY OR INNOVATION BUSINESS WHICH BUSINESS 43 EMPLOYS ONE HUNDRED OR FEWER EMPLOYEES WITHIN THE STATE ON A FULL-TIME 44 BASIS AND ENGAGES IN: 45 (1) BIOTECHNOLOGIES, WHICH SHALL BE DEFINED AS TECHNOLOGIES INVOLVING 46 THE SCIENTIFIC MANIPULATION OF LIVING ORGANISMS, ESPECIALLY AT THE 47 MOLECULAR AND/OR THE SUB-MOLECULAR GENETIC LEVEL, TO PRODUCE PRODUCTS 48 CONDUCIVE TO IMPROVING THE LIVES AND HEALTH OF PLANTS, ANIMALS, AND 49 HUMANS; AND THE ASSOCIATED SCIENTIFIC RESEARCH, PHARMACOLOGICAL, MECHAN- 50 ICAL, AND COMPUTATIONAL APPLICATIONS AND SERVICES CONNECTED WITH THESE 51 IMPROVEMENTS; S. 2609--D 97 A. 3009--D 1 (2) INFORMATION AND COMMUNICATION TECHNOLOGIES, EQUIPMENT AND SYSTEMS 2 THAT INVOLVE ADVANCED COMPUTER SOFTWARE AND HARDWARE, VISUALIZATION 3 TECHNOLOGIES, AND HUMAN INTERFACE TECHNOLOGIES; 4 (3) ADVANCED MATERIALS AND PROCESSING TECHNOLOGIES THAT INVOLVE THE 5 DEVELOPMENT, MODIFICATION, OR IMPROVEMENT OF ONE OR MORE MATERIALS OR 6 METHODS TO PRODUCE DEVICES AND STRUCTURES WITH IMPROVED PERFORMANCE 7 CHARACTERISTICS OR SPECIAL FUNCTIONAL ATTRIBUTES, OR TO ACTIVATE, SPEED 8 UP, OR OTHERWISE ALTER CHEMICAL, BIOCHEMICAL, OR MEDICAL PROCESSES; 9 (4) ELECTRONIC AND PHOTONIC DEVICES AND COMPONENTS FOR USE IN PRODUC- 10 ING ELECTRONIC, OPTOELECTRONIC, MECHANICAL EQUIPMENT AND PRODUCTS OF 11 ELECTRONIC DISTRIBUTION WITH INTERACTIVE MEDIA CONTENT; 12 (5) ENERGY EFFICIENCY, RENEWABLE ENERGY AND ENVIRONMENTAL TECHNOLO- 13 GIES, PRODUCTS, DEVICES AND SERVICES; OR 14 (6) SMALL SCALE SYSTEMS INTEGRATION AND PACKAGING. 15 S 2. Paragraph (a) of subdivision 16 of section 213 of the state 16 finance law, as amended by chapter 424 of the laws of 2009, is amended 17 to read as follows: 18 (a) for a linked deposit made in connection with a linked loan to a 19 certified business in an empire zone or to an eligible business located 20 in a highly distressed area or to an eligible business that is defined 21 in paragraph (b-1) of subdivision eleven of this section that is located 22 in a renewal community or defined in paragraph (b-2) of such subdivision 23 that is located in an empowerment zone or defined in paragraph (b-3) of 24 such subdivision that is located in an enterprise community, OR A QUALI- 25 FYING TECHNOLOGY OR INNOVATION BUSINESS AS DEFINED IN PARAGRAPH (G) OF 26 SUBDIVISION ELEVEN OF THIS SECTION, respectively for eligible projects 27 defined in paragraph (c) of subdivision twelve of this section or a 28 certified minority- or women-owned business enterprise for an eligible 29 project defined in paragraph (e) of subdivision twelve of this section 30 or to a defense industry manufacturer for a project defined in paragraph 31 (d) of subdivision twelve of this section, a fixed rate of interest 32 which is three hundred basis points below the lender's posted four year 33 certificate of deposit rate or, if the lender does not offer a four year 34 certificate of deposit, is three hundred basis points below the average 35 statewide rate for four year certificates of deposit as determined by 36 the commissioner of economic development; 37 S 3. This act shall take effect immediately. 38 PART II 39 Section 1. Section 16-t of section 1 of chapter 168 of the laws of 40 1974, constituting the New York state urban development corporation act, 41 as added by section 1 of part N of chapter 59 of the laws of 2010, is 42 amended to read as follows: 43 S 16-t. Small business revolving loan fund. 1. The small business 44 revolving loan fund program is hereby created. The corporation is 45 authorized, within available appropriations, to provide low interest 46 loans to community development financial institutions, in order to 47 provide funding for those lending organizations' loans to small busi- 48 nesses, located within New York state, that generate economic growth and 49 job creation within New York state but that are unable to obtain 50 adequate credit or adequate terms for such credit. If in the discretion 51 of the corporation the use of a community development financial institu- 52 tion is not practicable based upon the application of rules and regu- 53 lations developed by the corporation, including, but not limited to, 54 assessments of geographic and administrative capacity, then the corpo- S. 2609--D 98 A. 3009--D 1 ration is authorized, within available appropriations, to provide low 2 interest loans to the following other local community based lending 3 organizations: small business lending consortia, certified development 4 companies, providers of United States department of agriculture business 5 and industrial guaranteed loans, United States small business adminis- 6 tration loan providers, credit unions and community banks. As used in 7 this section "small business" means a business that is resident in New 8 York state, independently owned and operated, not dominant in its field, 9 and employs one hundred or fewer persons. 10 2. In order for a lending organization to be eligible to receive 11 program funds, it must have established sufficient expertise to analyze 12 small business applications for program loans, evaluate the creditwor- 13 thiness of small businesses, and regularly monitor program loans. The 14 lending organization shall review every program loan application in 15 order to determine, among other things, the feasibility of the proposed 16 use of the requested financing by the small business applicant, the 17 likelihood of repayment and the potential that the loan will generate 18 economic development and jobs within New York state. The corporation 19 shall identify eligible lending organizations through one or more 20 competitive statewide or local solicitations. 21 3. Program loans to small businesses shall be targeted and marketed to 22 minority and women-owned enterprises and other small businesses that are 23 having difficulty accessing traditional credit markets. Program loans to 24 small businesses shall be used for the creation and retention of jobs, 25 as defined by the corporation, including: (a) working capital; (b) the 26 acquisition and/or improvement of real property; (c) the acquisition of 27 machinery and equipment, property or improvement; or (d) the refinancing 28 of debt obligations. There shall be two categories of loans to small 29 businesses: a micro loan that shall have a principal amount that is less 30 than twenty-five thousand dollars and a regular loan that shall have a 31 principal amount not less than twenty-five thousand dollars. Prior to 32 receiving program funds, the lending organization must certify to the 33 corporation that such loan complies with this section and rules and 34 regulations promulgated for the program and that the lending organiza- 35 tion has performed its obligations pursuant to and is in compliance with 36 this section, the program rules and regulations and all agreements 37 entered into between the corporation and the lending organization. The 38 program funds amount used by the lending organization to fund a program 39 applicant loan shall not be more than fifty percent of the principal 40 amount of such loan. The program funds amount used by the lending organ- 41 ization to fund a program applicant loan shall not be greater than one 42 hundred and twenty-five thousand dollars. MINORITY- AND WOMEN-OWNED 43 BUSINESS ENTERPRISES AND OTHER SMALL BUSINESSES WHO ACCESS SUCH PROGRAM 44 LOANS UNDER THIS SUBDIVISION SHALL NOT BE PRECLUDED FROM ACCESSING SUCH 45 SHORT-TERM FINANCING LOANS PROVIDED UNDER SUBDIVISION ELEVEN OF THIS 46 SECTION. 47 4. Program funds shall not be used for: (a) projects that would result 48 in the relocation of any business operation from one municipality within 49 the state to another, except under one of the following conditions: (i) 50 when a business is relocating within a municipality with a population of 51 at least one million where the governing body of such municipality 52 approves such relocation; or (ii) the lending organization notifies each 53 municipality from which such business operation will be relocated and 54 each municipality agrees to such relocation; (b) projects of newspapers, 55 broadcasting or other news media; medical facilities, libraries, commu- 56 nity or civic centers; or public infrastructure improvements; and (c) S. 2609--D 99 A. 3009--D 1 providing funds, directly or indirectly, for payment, distribution, or 2 as a loan, to owners, members, partners or shareholders of the applicant 3 business, except as ordinary income for services rendered. 4 5. With respect to its program loans, the lending organization may 5 charge application, commitment and loan guarantee fees pursuant to a 6 schedule of fees adopted by the lending organization and approved by the 7 corporation. 8 6. Program funds shall be disbursed to a lending organization by the 9 corporation in the form of a loan to the lending organization. The term 10 of the loan shall commence upon disbursement of the program funds by the 11 corporation to the lending organization. The loan shall carry a low 12 interest rate determined by the corporation based on then prevailing 13 interest rates and the circumstances of the lending organization. 14 Notwithstanding the performance of the loans made by the lending organ- 15 ization using program funds, the lending organization shall remain 16 liable to the corporation with respect to any unpaid amounts due from 17 the lending organization pursuant to the terms of the corporation's 18 loans to the lending organization. In addition, a portion of program 19 funds may be disbursed to a lending organization in the form of a grant 20 or forgivable loan, provided those funds are used by the lending organ- 21 ization for administrative expenses associated with the fund, loan-loss 22 reserves, or other eligible expenses as determined by the corporation. 23 7. Notwithstanding anything to the contrary in this section, the 24 corporation shall provide at least five hundred thousand dollars in 25 program funds pursuant to this section to lending organizations for the 26 purpose of making loans to small business located in Niagara county. 27 8. Notwithstanding anything to the contrary in this section, the 28 corporation shall provide at least five hundred thousand dollars in 29 program funds pursuant to this section to lending organizations for the 30 purpose of making loans to small business located in St. Lawrence coun- 31 ty. 32 9. Notwithstanding anything to the contrary in this section, the 33 corporation shall provide at least five hundred thousand dollars in 34 program funds pursuant to this section to lending organizations for the 35 purpose of making loans to small business located in Erie county. 36 10. Notwithstanding anything to the contrary in this section, the 37 corporation shall provide at least five hundred thousand dollars in 38 program funds pursuant to this section to lending organizations for the 39 purpose of making loans to small business located in Jefferson county. 40 11. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION, THE 41 CORPORATION MAY PROVIDE AT LEAST FIVE HUNDRED THOUSAND DOLLARS IN 42 PROGRAM FUNDS PURSUANT TO THIS SECTION TO LENDING ORGANIZATIONS FOR THE 43 PURPOSE OF MAKING SHORT-TERM FINANCING AVAILABLE TO MINORITY- AND 44 WOMEN-OWNED BUSINESS ENTERPRISES AND OTHER SMALL BUSINESSES PERFORMING 45 CONTRACTS TO PROVIDE CONSTRUCTION OR PROFESSIONAL SERVICES FOR STATE 46 PROCUREMENT PURPOSES. SUCH LOANS SHALL BE USED TO UNDERWRITE THE COST OF 47 LABOR, MATERIALS, AND EQUIPMENT DIRECTLY ASSOCIATED WITH (1) THE 48 CONTRACT BEING FINANCED OR (2) A CONTRACT THAT HAS BEEN SATISFIED FOR 49 WHICH THE BUSINESS IS AWAITING PAYMENT FROM THE STATE. THE PROGRAM FUNDS 50 AMOUNT USED BY THE LENDING ORGANIZATION TO FUND A PROGRAM APPLICANT LOAN 51 SHALL NOT BE MORE THAN EIGHTY PERCENT OF THE PRINCIPAL AMOUNT OF SUCH 52 LOAN. THE PROGRAM FUNDS AMOUNT USED BY THE LENDING ORGANIZATION TO FUND 53 A PROGRAM APPLICANT LOAN SHALL NOT BE GREATER THAN ONE HUNDRED 54 TWENTY-FIVE THOUSAND DOLLARS. MINORITY- AND WOMEN-OWNED BUSINESS ENTER- 55 PRISES AND OTHER SMALL BUSINESSES WHO ACCESS SUCH SHORT-TERM FINANCING S. 2609--D 100 A. 3009--D 1 LOANS UNDER THIS SUBDIVISION SHALL NOT BE PRECLUDED FROM ACCESSING SUCH 2 PROGRAM LOANS PROVIDED UNDER SUBDIVISION THREE OF THIS SECTION. 3 12. Notwithstanding any provision of law to the contrary, the corpo- 4 ration may establish a program fund for program use and pay into such 5 fund any funds available to the corporation from any source that are 6 eligible for program use, including moneys appropriated by the state. 7 [12.] 13. With respect to a lending organization program loan appli- 8 cants, no person who is a member of the board or other governing body, 9 officer, employee, or member of a loan committee, or a family member of 10 any such lending organization shall participate in any decision on such 11 application if such person is a party to or has a financial or personal 12 interest in such loan. Any person who cannot participate in a loan 13 application decision for such reasons shall not be counted as a member 14 of the loan committee, board or other governing body for purposes of 15 determining the number of members required for approval of such applica- 16 tion. 17 [13.] 14. The lending organization shall submit to the corporation 18 annual reports stating: the number of program loans made; the amount of 19 program funding used for loans; the use of loan proceeds by the borrow- 20 er; the number of jobs created or retained; a description of the econom- 21 ic development generated; the status of each outstanding program loan; 22 and such other information as the corporation may require. 23 [14.] 15. The corporation may conduct audits of the lending organiza- 24 tion in order to ensure compliance with the provisions of this section, 25 any regulations promulgated with respect thereto and agreements between 26 the lending organization and the corporation of all aspects of the use 27 of program funds and program loan transactions. In the event that the 28 corporation finds substantive noncompliance, the corporation may termi- 29 nate the lending organization's participation in the program. 30 [15.] 16. Upon termination of a lending organization's participation 31 in the program, the lending organization shall return to the corpo- 32 ration, promptly after its demand therefor, all program fund proceeds 33 held by the lending organization; and provide to the corporation, 34 promptly after its demand therefor, an accounting of all program funds 35 received by the lending organization, including all currently outstand- 36 ing loans that were made using program funds. Notwithstanding such 37 termination, the lending organization shall remain liable to the corpo- 38 ration with respect to any unpaid amounts due from the lending organiza- 39 tion pursuant to the terms of the corporation's loans to the lending 40 organization. 41 S 2. This act shall take effect immediately. 42 PART JJ 43 Section 1. Legislative findings and purposes. It is hereby found that 44 there exists in the state a need to attract private sector investment in 45 new research and in the translation of the products of that research 46 into marketable products. 47 It is hereby further found that the need for this investment is demon- 48 strated by the fact that, while New York state universities rank second 49 nationally in total research spending, the state attracts a dispropor- 50 tionately low share of the nation's venture capital investment. 51 S 2. The New York state innovation venture capital fund. In order to 52 strengthen the university/industry connection and prepare New York busi- 53 nesses to compete for private-sector venture investment, the New York 54 state urban development corporation shall have the power to establish S. 2609--D 101 A. 3009--D 1 and administer the New York state innovation venture capital fund to 2 provide critical seed and early-stage funding to incentivize new busi- 3 ness formation and growth in New York state and to facilitate the tran- 4 sition from ideas and research to marketable products. Funds will be 5 expended by the innovation venture capital fund pursuant to a plan 6 developed by the urban development corporation and submitted to the 7 director of the division of the budget, the temporary president of the 8 senate, the speaker of the assembly, the minority leader of the senate 9 and the minority leader of the assembly. No funds shall be transferred 10 to the New York state urban development corporation for the New York 11 state innovation venture capital fund until such plan has been submit- 12 ted. 13 S 3. Eligible applicants. Eligible applicants for the New York state 14 innovation venture capital fund may include business enterprises in the 15 formative stage of development, regional and local economic development 16 organizations, technology development organizations, research universi- 17 ties, and investment funds that make seed, early-stage and venture 18 investments. In order to be eligible for funds from the New York state 19 innovation venture capital fund, a beneficiary company must: (a) be, or 20 agree in writing to be, located in New York state; (b) be in the seed, 21 early-stage or venture stage of development, as defined by the corpo- 22 ration; and (c) have the potential to generate additional economic 23 activity in New York State. 24 S 4. Investment professionals. The New York state urban development 25 corporation shall have the power to engage or retain the services of one 26 or more investment professionals or firms, through direct hire or by 27 contract after a competitive solicitation or otherwise as permitted by 28 law, with demonstrated knowledge and expertise to advise the corporation 29 with respect to the innovation venture capital fund and to provide such 30 other investment advisory services as may be necessary or advisable. 31 S 5. Evaluation of applicants. The New York state urban development 32 corporation shall establish a process by rule or regulation for the 33 evaluation of applicants for funds from the New York state innovation 34 venture capital fund; provided however that the corporation shall not 35 issue such rules or regulations pursuant to the emergency rule making 36 authority provided for in the state administrative procedure act. 37 S 6. Report. The New York state urban development corporation shall 38 submit a report annually on December 31 to the director of the division 39 of the budget, the temporary president of the senate, the speaker of the 40 assembly, the minority leader of the senate and the minority leader of 41 the assembly detailing: (a) the total amount of funds committed to each 42 applicant that receives funds and, if applicable, the amount of such 43 funds that has been invested by each such applicant; (b) the amount of 44 New York State innovation venture capital funds invested and the recipi- 45 ents of such funds; (c) the location of each beneficiary company; (d) 46 the number of jobs projected to be created or retained; and (e) such 47 other information as the corporation deems necessary. 48 S 7. Rules and regulations. The New York state urban development 49 corporation is hereby authorized to promulgate rules and regulations in 50 accordance with the state administrative procedure act as are necessary 51 to fulfill the purposes of this act, including with respect to reason- 52 able management fees, promotes, share of return and other fees and 53 charges of applicants that receive funds, and to provide for the repay- 54 ment of funds received by the beneficiary company if the beneficiary 55 company leaves New York state within a period of time to be established 56 by the corporation. In accordance with such rules and regulations, the S. 2609--D 102 A. 3009--D 1 corporation may impose fees, establish repayment terms and provide for 2 equity participation by the corporation in connection with investments 3 from the New York state innovation venture capital fund. Provided howev- 4 er that no rules or regulations issued pursuant to this section shall be 5 issued utilizing the emergency rule making authority provided for in the 6 state administrative procedure act. 7 S 8. This act shall take effect immediately. 8 S 2. Severability clause. If any clause, sentence, paragraph, subdivi- 9 sion, section or part of this act shall be adjudged by any court of 10 competent jurisdiction to be invalid, such judgment shall not affect, 11 impair, or invalidate the remainder thereof, but shall be confined in 12 its operation to the clause, sentence, paragraph, subdivision, section 13 or part thereof directly involved in the controversy in which such judg- 14 ment shall have been rendered. It is hereby declared to be the intent of 15 the legislature that this act would have been enacted even if such 16 invalid provisions had not been included herein. 17 S 3. This act shall take effect immediately provided, however, that 18 the applicable effective date of Parts A through JJ of this act shall be 19 as specifically set forth in the last section of such Parts.