Bill Text: NY A05922 | 2017-2018 | General Assembly | Introduced
Bill Title: Fosters economic development by establishing the New York state cornerstone program (focused on job retention) and the New York state discovery program (focused on job creation); provides a series of tax cuts to businesses.
Spectrum: Partisan Bill (Republican 18-0)
Status: (Introduced - Dead) 2018-06-14 - held for consideration in ways and means [A05922 Detail]
Download: New_York-2017-A05922-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5922 2017-2018 Regular Sessions IN ASSEMBLY February 17, 2017 ___________ Introduced by M. of A. KOLB, BUTLER, STEC, DiPIETRO -- Multi-Sponsored by -- M. of A. BARCLAY, BLANKENBUSH, CROUCH, CURRAN, FINCH, FITZPA- TRICK, GIGLIO, GOODELL, GRAF, HAWLEY, JOHNS, McKEVITT, McLAUGHLIN, MONTESANO, OAKS, PALMESANO, RAIA -- read once and referred to the Committee on Ways and Means AN ACT to amend the general municipal law, in relation to establishing the New York state cornerstone program; and to repeal article 18-B of such law relating thereto (Part A); to amend the general municipal law and the tax law, in relation to establishing the New York state discovery program (Part B); and to amend the tax law, in relation to net income base and in relation to certain taxes (Part C) The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act enacts into law components of legislation relating 2 to the "New York state cornerstone program and the New York state 3 discovery program". Each component is wholly contained within a Part 4 identified as Parts A through C. The effective date for each particular 5 provision contained within such Part is set forth in the last section of 6 such Part. Any provision in any section contained within a Part, includ- 7 ing the effective date of the Part, which makes reference to a section 8 "of this act", when used in connection with that particular component, 9 shall be deemed to mean and refer to the corresponding section of the 10 Part in which it is found. Section three of this act sets forth the 11 general effective date of this act. 12 § 1-a. Statement of legislative findings and declaration. It is here- 13 by found and declared that there exists within the state high unemploy- 14 ment, limited new job creation, a dependence on public assistance 15 income, insufficient support for industrial and commercial businesses, 16 and unnecessarily high taxes. These severe conditions require state 17 government to target certain industries in order to stimulate private 18 investment, private business development and job creation. It should be EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD08139-01-7A. 5922 2 1 the public policy of the state to help promote the development of new 2 businesses, rather than deter them with punitive regulation and exces- 3 sive taxes. It is further found and declared that it is the public poli- 4 cy of the state to achieve these goals through the mutual cooperation of 5 all levels of state and local government, the business community and 6 academic institutions. 7 PART A 8 Section 1. Article 18-B of the general municipal law is REPEALED. 9 § 2. The general municipal law is amended by adding a new article 18-B 10 to read as follows: 11 ARTICLE 18-B 12 NEW YORK STATE CORNERSTONE PROGRAM 13 Section 955. New York cornerstone program established. 14 956. Responsibilities of the commissioner. 15 957. Cornerstone development board. 16 958. Reporting requirements. 17 § 955. New York cornerstone program established. There is hereby 18 established the New York cornerstone program. 19 § 956. Responsibilities of the commissioner. 1. The commissioner of 20 economic development shall, in consultation with the director of the 21 budget, the commissioner of labor, and the commissioner of taxation and 22 finance, promulgate rules and regulations, which, notwithstanding any 23 provisions to the contrary in the state administrative procedure act, 24 may be adopted on an emergency basis, relating to: 25 (a) the application process; 26 (b) defining types of businesses eligible, including but not limited 27 to manufacturing, high-tech, bio-tech, clean-tech and agri-business; 28 (c) limiting businesses to ten years of participation; 29 (d) certification by the commissioner for eligibility of business 30 enterprises for benefits referred to in this article. Criteria for 31 certification shall include, but not be limited to: 32 (i) requiring a business to have been operational in New York state 33 for at least ten consecutive years prior to applying to the cornerstone 34 program; 35 (ii) requiring a business to show proof that they will have to lower 36 employment levels without certification in the program; 37 (iii) requiring a business to commit to maintaining or increasing 38 current employment levels to qualify for tax benefits; 39 (iv) whether certification will have the undesired effect of causing 40 individuals to transfer from existing employment with another business 41 enterprise to similar employment with the business enterprise so certi- 42 fied, and transferring existing employment from one or more other muni- 43 cipalities, towns or villages in the state; 44 (v) whether such enterprise is likely to enhance the economic climate 45 of the state; and 46 (vi) whether the commissioner of labor establishes that such business 47 enterprise, during the ten years preceding the submission of an applica- 48 tion for certification, has engaged in a substantial violation or a 49 pattern of violations of laws regulating unemployment insurance, work- 50 ers' compensation, public work, child labor, employment of minorities 51 and women, safety and health, or other laws for the protection of work- 52 ers as determined by final judgment of a judicial or administrative 53 proceeding.A. 5922 3 1 2. The commissioner of economic development shall, in consultation 2 with the director of the budget, the commissioner of labor, and the 3 commissioner of taxation and finance, establish a cost benefit analysis. 4 3. The commissioner of economic development shall, in consultation 5 with the director of the budget, the commissioner of labor, and the 6 commissioner of taxation and finance, establish a program and propose 7 legislation granting tax exemptions previously applicable to empire 8 zones for business enterprises eligible under the cornerstone program 9 established pursuant to this article, to the governor and legislature 10 within one hundred eighty days from the effective date of this article. 11 § 957. Cornerstone development board. 1. The cornerstone development 12 board is hereby created. 13 2. Such board shall consist of the commissioner of taxation and 14 finance, the director of the budget, the commissioner of labor and two 15 members to be appointed by the governor; one member to be appointed by 16 the temporary president of the senate; one member to be appointed by the 17 speaker of the assembly; one member to be appointed by the minority 18 leader of the senate and one member to be appointed by the minority 19 leader of the assembly. 20 3. The governor shall designate from among the voting members the 21 chair of the board. Each member of the board shall be entitled to desig- 22 nate a representative to attend meetings of the board in his or her 23 place, and to vote or otherwise act on his or her behalf in his or her 24 absence. 25 4. Notice of such designation shall be furnished in writing to the 26 board by the designating member. 27 5. A representative shall serve at the pleasure of the designating 28 member. 29 6. A representative shall not be authorized to delegate any of his or 30 her duties or functions to any other person. 31 § 958. Reporting requirements. 1. The department of audit and 32 control, the department of taxation and finance and the department of 33 economic development shall prepare reports on the management and the 34 economic and fiscal impact of the cornerstone program. 35 2. The analysis of the fiscal and economic impact of the program shall 36 include, but not be limited to: a review of the cost of providing the 37 tax benefits referred to in this article; progress of the program; 38 number of tax credits claimed by each certified business; number of jobs 39 created and/or retained by each business and all other information 40 requested and not prohibited by law. 41 3. Such reports shall be transmitted to the governor and the legisla- 42 ture by September first, two thousand eighteen and every year thereafter 43 and shall be posted online for full public disclosure. 44 § 3. This act shall take effect immediately; provided, however, that 45 any rules and regulations necessary to carry out the provisions of this 46 act shall be promulgated before such effective date. 47 PART B 48 Section 1. This act shall be known and may be cited as the "New York 49 state discovery act". 50 § 2. The general municipal law is amended by adding a new article 51 18-D to read as follows: 52 ARTICLE 18-D 53 NEW YORK STATE DISCOVERY PROGRAM 54 Section 972. New York state discovery program.A. 5922 4 1 973. Job development fund. 2 § 972. New York state discovery program. 1. The New York state discov- 3 ery program is hereby established. 4 2. The commissioner of economic development shall, after consultation 5 with the director of the budget, the commissioner of labor, and the 6 commissioner of taxation and finance, promulgate rules and regulations, 7 which, notwithstanding any provisions to the contrary in the state 8 administrative procedure act, may be adopted on an emergency basis, 9 relating to: 10 (a) the application process; 11 (b) defining types of businesses eligible, including but not limited 12 to manufacturing, high-tech, bio-tech, clean-tech and agri-business; 13 (c) limiting businesses to ten years of participation; 14 (d) certification by the commissioner of economic development as to 15 the eligibility of business enterprises for benefits referred to in this 16 section, which shall be governed by criteria including, but not limited 17 to: 18 (i) requiring an eligible business to be a start-up business, or a 19 business operating in the state for two years or less; 20 (ii) a business must offer internships to local high school students, 21 BOCES students and college students per a plan developed by the commis- 22 sioner of economic development; 23 (iii) a business must commit to increasing current employment levels 24 to qualify for tax benefits; 25 (iv) whether certification will have the undesired effect of causing 26 individuals to transfer from existing employment with another business 27 enterprise to similar employment with the business enterprise so certi- 28 fied, and transferring existing employment from one or more other muni- 29 cipalities, towns or villages in the state; 30 (v) whether such enterprise is likely to enhance the economic climate 31 of the state; 32 (vi) whether the commissioner of labor establishes that such business 33 enterprise, during the two years preceding the submission of an applica- 34 tion for certification, has engaged in a substantial violation or a 35 pattern of violations of laws regulating unemployment insurance, work- 36 ers' compensation, public work, child labor, employment of minorities 37 and women, safety and health, or other laws for the protection of work- 38 ers as determined by final judgment of a judicial or administrative 39 proceeding; and 40 (vii) whether such business meets the requirements of the cost benefit 41 analysis as established by the commissioner of economic development. 42 3. The department of audit and control, the department of taxation and 43 finance and the department of economic development shall prepare reports 44 on the management and the economic and fiscal impact of the discovery 45 program. The analysis of the fiscal and economic impact of the program 46 shall include, but not be limited to: a review of the cost of providing 47 the tax benefits referred to in this article; progress of the program; 48 number of tax credits claimed by each certified business; number of jobs 49 created by each business and all other information requested and not 50 prohibited by law. Such reports shall be transmitted to the governor and 51 the legislature by September first, two thousand nineteen and every year 52 thereafter and shall be posted online for full public disclosure. 53 4. The department of economic development shall provide grants of up 54 to two thousand dollars for every internship developed under this 55 program, to be paid for out of the job development fund established 56 pursuant to this article. Such grant allocations shall be divided evenlyA. 5922 5 1 between the certified business and the corresponding institution of 2 higher education to cover costs associated with the development of such 3 internships. 4 § 973. Job development fund. 1. There is hereby established in the 5 joint custody of the commissioner of taxation and finance and the state 6 comptroller a fund to be known as the "job development fund". 7 2. The fund shall consist of monies appropriated for the division of 8 science, technology and innovation. 9 3. Moneys of the fund shall be expended for the purposes of carrying 10 out the provisions of section nine hundred seventy-two of this article. 11 Moneys shall be paid out of the fund on the audit and warrant of the 12 state comptroller on vouchers approved by the division of science, tech- 13 nology and innovation. Any interest received by the comptroller on 14 moneys on deposit in the job development fund shall be retained in and 15 become part of such fund. 16 § 3. The tax law is amended by adding a new section 15-a to read as 17 follows: 18 § 15-a. Discovery zone property tax credit. For a business enterprise 19 which is first certified under section nine hundred seventy-two of the 20 general municipal law on or after July first, two thousand eighteen, the 21 credit shall be for a period of ten years and shall not exceed thirty 22 percent of the eligible real property taxes paid in the current taxable 23 year of eligibility. 24 § 4. Section 210-B of the tax law is amended by adding two new subdi- 25 visions 52 and 53 to read as follows: 26 52. Discovery investment credit. (a) A taxpayer shall be allowed a 27 credit, to be computed as hereinafter provided, against the tax imposed 28 by this article where the taxpayer has been certified pursuant to 29 section nine hundred seventy-two of the general municipal law. The 30 amount of such credit shall be twenty percent of the cost or other basis 31 for federal income tax purposes of tangible personal property and other 32 tangible property, including buildings and structural components of 33 buildings, described in paragraph (b) of this subdivision, but only if 34 the acquisition, construction, reconstruction or erection of such prop- 35 erty occurred or was commenced on or after the date of such designation 36 and prior to the expiration thereof. Provided, however, that in the case 37 of an acquisition, construction, reconstruction or erection which was 38 commenced during such period and continued or completed subsequently, 39 the credit shall be twenty percent of the portion of the cost or other 40 basis for federal income tax purposes attributable to such period, which 41 portion shall be ascertained by multiplying such cost or basis by a 42 fraction the numerator of which shall be the expenditures paid or 43 incurred during such period for such purposes and the denominator of 44 which shall be the total of all expenditures paid or incurred for such 45 acquisition, construction, reconstruction or erection. 46 (b) A credit shall be allowed under this subdivision with respect to 47 tangible personal property and other tangible property, including build- 48 ings and structural components of buildings which: (1) are depreciable 49 pursuant to section one hundred sixty-seven of the Internal Revenue 50 Code, (2) have a useful life of four years or more, (3) are acquired by 51 purchase as defined in section one hundred seventy-nine (d) of the 52 Internal Revenue Code, and (4) are (i) principally used by the taxpayer 53 in the production of goods by manufacturing, processing, assembling, 54 refining, mining, extracting, farming, agriculture, horticulture, flori- 55 culture, viticulture or commercial fishing, (ii) industrial waste treat- 56 ment facilities or air pollution control facilities used in the taxpay-A. 5922 6 1 er's trade or business, (iii) research and development property, (iv) 2 principally used in the ordinary course of the taxpayer's trade or busi- 3 ness as a broker or dealer in connection with the purchase or sale 4 (which shall include but not be limited to the issuance, entering into, 5 assumption, offset, assignment, termination, or transfer) of stocks, 6 bonds or other securities as defined in section four hundred seventy- 7 five (c)(2) of the Internal Revenue Code, or of commodities as defined 8 in section four hundred seventy-five (e) of the Internal Revenue Code, 9 or (v) principally used in the ordinary course of the taxpayer's trade 10 or business of providing investment advisory services for a regulated 11 investment company as defined in section eight hundred fifty-one of the 12 Internal Revenue Code, or lending, loan arrangement or loan origination 13 services to customers in connection with the purchase or sale (which 14 shall include but not be limited to the issuance, entering into, assump- 15 tion, offset, assignment, termination, or transfer) of securities as 16 defined in section four hundred seventy-five (c)(2) of the Internal 17 Revenue Code. For purposes of clauses (iv) and (v) of this subparagraph, 18 property purchased by a taxpayer affiliated with a regulated broker, 19 dealer or registered investment adviser is allowed a credit under this 20 subdivision if the property is used by its affiliated regulated broker, 21 dealer or registered investment adviser in accordance with this subdivi- 22 sion. For purposes of determining if the property is principally used in 23 qualifying uses, the uses by the taxpayer described in clauses (iv) and 24 (v) of this subparagraph may be aggregated. In addition, the uses by the 25 taxpayer, its affiliated regulated broker, dealer, and registered 26 investment adviser under either or both of those clauses may be aggre- 27 gated. Provided, however, a taxpayer shall not be allowed the credit 28 provided by clauses (iv) and (v) of this subparagraph unless (I) eighty 29 percent or more of the employees performing the administrative and 30 support functions resulting from or related to the qualifying uses of 31 such equipment are located in this state, or (II) the average number of 32 employees that perform the administrative and support functions result- 33 ing from or related to the qualifying uses of such equipment and are 34 located in this state during the taxable year for which the credit is 35 claimed is equal to or greater than ninety-five percent of the average 36 number of employees that perform these functions and are located in this 37 state during the thirty-six months immediately preceding the year for 38 which the credit is claimed, or (III) the number of employees located in 39 this state during the taxable year for which the credit is claimed is 40 equal to or greater than ninety percent of the number of employees 41 located in this state on December thirty-first, nineteen hundred nine- 42 ty-eight or, if the taxpayer was not a calendar year taxpayer in nine- 43 teen hundred ninety-eight, the last day of its first taxable year ending 44 after December thirty-first, nineteen hundred ninety-eight. If the 45 taxpayer becomes subject to tax in this state after the taxable year 46 beginning in nineteen hundred ninety-eight, then the taxpayer is not 47 required to satisfy the employment test provided in the preceding 48 sentence of this subparagraph for its first taxable year. For purposes 49 of item (III) of this clause, the employment test will be based on the 50 number of employees located in this state on the last day of the first 51 taxable year the taxpayer is subject to tax in this state. If the uses 52 of the property must be aggregated to determine whether the property is 53 principally used in qualifying uses, then either each affiliate using 54 the property must satisfy this employment test or this employment test 55 must be satisfied through the aggregation of the employees of the 56 taxpayer, its affiliated regulated broker, dealer, and registeredA. 5922 7 1 investment adviser using the property. For purposes of this subdivision, 2 the term "goods" shall not include electricity. For purposes of this 3 paragraph, manufacturing shall mean the process of working raw materials 4 into wares suitable for use or which gives new shapes, new quality or 5 new combination to matter which already has gone through some artificial 6 process by the use of machinery, tools, appliances and other similar 7 equipment. Property used in the production of goods shall include 8 machinery, equipment or other tangible property which is principally 9 used in the repair and service of other machinery, equipment or other 10 tangible property used principally in the production of goods and shall 11 include all facilities used in the production operation, including stor- 12 age of material to be used in production and of the products that are 13 produced. For purposes of this paragraph, the terms "industrial waste 14 treatment facilities", "air pollution control facilities" and "research 15 and development property" shall have the meanings ascribed thereto by 16 clauses (ii) and (iii), respectively, of subparagraph four of this para- 17 graph, and the provisions of subparagraph three of this paragraph shall 18 apply. 19 (c) A taxpayer shall not be allowed a credit under this subdivision 20 with respect to any tangible personal property and other tangible prop- 21 erty, including buildings and structural components of buildings, which 22 it leases to any other person or corporation except where a taxpayer 23 leases property to an affiliated regulated broker, dealer, or registered 24 investment adviser that uses such property in accordance with clause 25 (iv) or (v) of subparagraph four of paragraph (b) of this subdivision. 26 For purposes of the preceding sentence, any contract or agreement to 27 lease or rent or for a license to use such property shall be considered 28 a lease. Provided, however, in determining whether a taxpayer shall be 29 allowed a credit under this subdivision with respect to such property, 30 any election made with respect to such property pursuant to the 31 provisions of paragraph eight of subsection (f) of section one hundred 32 sixty-eight of the Internal Revenue Code, as such paragraph was in 33 effect for agreements entered into prior to January first, nineteen 34 hundred eighty-four, shall be disregarded. 35 (d) If the amount of credit allowed under this subdivision for any 36 taxable year shall exceed the taxpayer's tax for such year, the excess 37 may be carried over to the following year or years and may be deducted 38 from the taxpayer's tax for such year or years. Any refund paid pursuant 39 to this paragraph shall be deemed to be a refund of an overpayment of 40 tax as provided in section six hundred eighty-six of this chapter, 41 provided, however, that no interest shall be paid thereon. 42 53. Discovery wage tax credit. (a) A taxpayer shall be allowed a cred- 43 it, to be computed as hereinafter provided, against the tax imposed by 44 this article, where the taxpayer has been certified pursuant to section 45 nine hundred seventy-two of the general municipal law. The amount of 46 such credit shall be as prescribed in paragraph (c) of this subdivision. 47 (b) "Discovery wages" means wages paid by the taxpayer for full-time 48 employment during a taxable year, provided that those wages are paid by 49 a certified business as defined by the commissioner of economic develop- 50 ment as required in his or her responsibilities. 51 (c) The credit provided in this subdivision shall be equal to the 52 product of the gross wages paid and six and eighty-five hundredths 53 percent for each net new job created during the taxable year. 54 (d) "Net new job" shall be defined as each job that exceeds the aver- 55 age number of individuals employed full-time by the taxpayer in the 56 previous taxable year.A. 5922 8 1 (e) If the amount of this credit and carryovers of such credit allowed 2 under this subdivision for any taxable year shall exceed the taxpayer's 3 tax for such year, the excess, as well as any part of the credit or 4 carryovers of such credit, or both, which may not be deducted from the 5 tax otherwise due by reason of paragraph (c) of this subdivision, may be 6 carried over to the following year or years and may be deducted from the 7 taxpayer's tax for such year or years. 8 § 5. Section 606 of the tax law is amended by adding two new 9 subsections (j-2) and (j-3) to read as follows: 10 (j-2) Discovery investment credit. (1) A taxpayer shall be allowed a 11 credit, to be computed as hereinafter provided, against the tax imposed 12 by this article where the taxpayer has been certified pursuant to 13 section nine hundred seventy-two of the general municipal law. The 14 amount of such credit shall be twenty percent of the cost or other basis 15 for federal income tax purposes of tangible personal property and other 16 tangible property, including buildings and structural components of 17 buildings, described in paragraph two of this subsection, but only if 18 the acquisition, construction, reconstruction or erection of such prop- 19 erty occurred or was commenced on or after the date of such designation 20 and prior to the expiration thereof. Provided, however, that in the case 21 of an acquisition, construction, reconstruction or erection which was 22 commenced during such period and continued or completed subsequently, 23 the credit shall be twenty percent of the portion of the cost or other 24 basis for federal income tax purposes attributable to such period, which 25 portion shall be ascertained by multiplying such cost or basis by a 26 fraction the numerator of which shall be the expenditures paid or 27 incurred during such period for such purposes and the denominator of 28 which shall be the total of all expenditures paid or incurred for such 29 acquisition, construction, reconstruction or erection. 30 (2) A credit shall be allowed under this subsection with respect to 31 tangible personal property and other tangible property, including build- 32 ings and structural components of buildings which: (A) are depreciable 33 pursuant to section one hundred sixty-seven of the Internal Revenue 34 Code, (B) have a useful life of four years or more, (C) are acquired by 35 purchase as defined in section one hundred seventy-nine (d) of the 36 Internal Revenue Code, and (D) are (i) principally used by the taxpayer 37 in the production of goods by manufacturing, processing, assembling, 38 refining, mining, extracting, farming, agriculture, horticulture, flori- 39 culture, viticulture or commercial fishing, (ii) industrial waste treat- 40 ment facilities or air pollution control facilities used in the taxpay- 41 er's trade or business, (iii) research and development property, (iv) 42 principally used in the ordinary course of the taxpayer's trade or busi- 43 ness as a broker or dealer in connection with the purchase or sale 44 (which shall include but not be limited to the issuance, entering into, 45 assumption, offset, assignment, termination, or transfer) of stocks, 46 bonds or other securities as defined in section four hundred seventy- 47 five (c)(2) of the Internal Revenue Code, or of commodities as defined 48 in section four hundred seventy-five (e) of the Internal Revenue Code, 49 or (v) principally used in the ordinary course of the taxpayer's trade 50 or business of providing investment advisory services for regulated 51 investment company as defined in section eight hundred fifty-one of the 52 Internal Revenue Code, or lending, loan arrangement or loan origination 53 services to customers in connection with the purchase or sale (which 54 shall include but not be limited to the issuance, entering into, assump- 55 tion, offset, assignment, termination, or transfer) of securities as 56 defined in section four hundred seventy-five(c)(2) of the InternalA. 5922 9 1 Revenue Code. For purposes of clauses (iv) and (v) of this subparagraph, 2 property purchased by a taxpayer affiliated with a regulated broker, 3 dealer or registered investment adviser is allowed a credit under this 4 subsection if the property is used by its affiliated regulated broker, 5 dealer or registered investment adviser in accordance with this 6 subsection. For purposes of determining if the property is principally 7 used in qualifying uses, the uses by the taxpayer described in clauses 8 (iv) and (v) of this subparagraph may be aggregated. In addition, the 9 uses by the taxpayer, its affiliated regulated broker, dealer, and 10 registered investment adviser under either or both of those clauses may 11 be aggregated. Provided, however, a taxpayer shall not be allowed the 12 credit provided by clauses (iv) and (v) of this subparagraph unless (I) 13 eighty percent or more of the employees performing the administrative 14 and support functions resulting from or related to the qualifying uses 15 of such equipment are located in this state, or (II) the average number 16 of employees that perform the administrative and support functions 17 resulting from or related to the qualifying uses of such equipment and 18 are located in this state during the taxable year for which the credit 19 is claimed is equal to or greater than ninety-five percent of the aver- 20 age number of employees that perform these functions and are located in 21 this state during the thirty-six months immediately preceding the year 22 for which the credit is claimed, or (III) the number of employees 23 located in this state during the taxable year for which the credit is 24 claimed is equal to or greater than ninety percent of the number of 25 employees located in this state on December thirty-first, nineteen 26 hundred ninety-eight or, if the taxpayer was not a calendar year taxpay- 27 er in nineteen hundred ninety-eight, the last day of its first taxable 28 year ending after December thirty-first, nineteen hundred ninety-eight. 29 If the taxpayer becomes subject to tax in this state after the taxable 30 year beginning in nineteen hundred ninety-eight, then the taxpayer is 31 not required to satisfy the employment test provided in the preceding 32 sentence of this subparagraph for its first taxable year. For purposes 33 of item (III) of this clause, the employment test will be based on the 34 number of employees located in this state on the last day of the first 35 taxable year the taxpayer is subject to tax in this state. If the uses 36 of the property must be aggregated to determine whether the property is 37 principally used in qualifying uses, then either each affiliate using 38 the property must satisfy this employment test or this employment test 39 must be satisfied through the aggregation of the employees of the 40 taxpayer, its affiliated regulated broker, dealer, and registered 41 investment advisor using the property. For purposes of this subsection, 42 the term "goods" shall not include electricity. For purposes of this 43 paragraph, manufacturing shall mean the process of working raw materials 44 into wares suitable for use or which gives new shapes, new quality or 45 new combination to matter which already has gone through some artificial 46 process by the use of machinery, tools, appliances and other similar 47 equipment. Property used in the production of goods shall include 48 machinery, equipment or other tangible property which is principally 49 used in the repair and service of other machinery, equipment or other 50 tangible property used principally in the production of goods and shall 51 include all facilities used in the production operation, including stor- 52 age of material to be used in production and of the products that are 53 produced. For purposes of this paragraph, the terms "industrial waste 54 treatment facilities", "air pollution control facilities" and "research 55 and development property" shall have the meanings ascribed thereto byA. 5922 10 1 clauses (ii) and (iii), respectively, of subparagraph (D) of this para- 2 graph, and the provisions of subparagraph (C) of this paragraph. 3 (3) A taxpayer shall not be allowed a credit under this subsection 4 with respect to any tangible personal property and other tangible prop- 5 erty, including buildings and structural components of buildings, which 6 it leases to any other person or corporation except where a taxpayer 7 leases property to an affiliated regulated broker, dealer, or registered 8 investment adviser that uses such property in accordance with clause 9 (iv) or (v) of subparagraph (D) of paragraph two of this subsection. For 10 purposes of the preceding sentence, any contract or agreement to lease 11 or rent or for a license to use such property shall be considered a 12 lease. Provided, however, in determining whether a taxpayer shall be 13 allowed a credit under this subsection with respect to such property, 14 any election made with respect to such property pursuant to the 15 provisions of paragraph eight of subsection (f) of section one hundred 16 sixty-eight of the Internal Revenue Code, as such paragraph was in 17 effect for agreements entered into prior to January first, nineteen 18 hundred eighty-four, shall be disregarded. 19 (4) If the amount of credit allowed under this subsection for any 20 taxable year shall exceed the taxpayer's tax for such year, the excess 21 may be carried over to the following year or years and may be deducted 22 from the taxpayer's tax for such year or years. Any refund paid pursu- 23 ant to this paragraph shall be deemed to be a refund of an overpayment 24 of tax as provided in section six hundred eighty-six of this chapter, 25 provided, however, that no interest shall be paid thereon. 26 (j-3) Discovery wage tax credit. (1) A taxpayer shall be allowed a 27 credit, to be computed as hereinafter provided, against the tax imposed 28 by this article, where the taxpayer has been certified pursuant to 29 section nine hundred seventy-two of the general municipal law. The 30 amount of such credit shall be as prescribed in paragraph three of this 31 subsection. 32 (2) "Discovery wages" means wages paid by the taxpayer for full-time 33 employment during a taxable year, provided that those wages are paid by 34 a certified business as defined by the commissioner of economic develop- 35 ment as required in his or her responsibilities. 36 (3) The credit provided in this subsection shall be equal to the prod- 37 uct of the gross wages paid and six and eighty-five hundredths percent 38 for each net new job created during the taxable year. 39 (4) "Net new job" shall be defined as each job that exceeds the aver- 40 age number of individuals employed full-time by the taxpayer in the 41 previous taxable year. 42 (5) If the amount of this credit and carryovers of such credit allowed 43 under this subsection for any taxable year shall exceed the taxpayer's 44 tax for such year, the excess, as well as any part of the credit or 45 carryovers of such credit, or both, which may not be deducted from the 46 tax otherwise due by reason of paragraph three of this subsection, may 47 be carried over to the following year or years and may be deducted from 48 the taxpayer's tax for such year or years. 49 § 6. Section 1511 of the tax law is amended by adding two new subdivi- 50 sions (dd) and (ee) to read as follows: 51 (dd) Discovery investment credit. (1) A taxpayer shall be allowed a 52 credit, to be computed as hereinafter provided, against the tax imposed 53 by this article where the taxpayer has been certified pursuant to 54 section nine hundred seventy-two of the general municipal law. The 55 amount of such credit shall be twenty percent of the cost or other basis 56 for federal income tax purposes of tangible personal property and otherA. 5922 11 1 tangible property, including buildings and structural components of 2 buildings, described in paragraph two of this subdivision, but only if 3 the acquisition, construction, reconstruction or erection of such prop- 4 erty occurred or was commenced on or after the date of such designation 5 and prior to the expiration thereof. Provided, however, that in the case 6 of an acquisition, construction, reconstruction or erection which was 7 commenced during such period and continued or completed subsequently, 8 the credit shall be twenty percent of the portion of the cost or other 9 basis for federal income tax purposes attributable to such period, which 10 portion shall be ascertained by multiplying such cost or basis by a 11 fraction the numerator of which shall be the expenditures paid or 12 incurred during such period for such purposes and the denominator of 13 which shall be the total of all expenditures paid or incurred for such 14 acquisition, construction, reconstruction or erection. 15 (2) A credit shall be allowed under this subdivision with respect to 16 tangible personal property and other tangible property, including build- 17 ings and structural components of buildings which: (A) are depreciable 18 pursuant to section one hundred sixty-seven of the Internal Revenue 19 Code, (B) have a useful life of four years or more, (C) are acquired by 20 purchase as defined in section one hundred seventy-nine (d) of the 21 Internal Revenue Code, and (D) are (i) principally used by the taxpayer 22 in the production of goods by manufacturing, processing, assembling, 23 refining, mining, extracting, farming, agriculture, horticulture, flori- 24 culture, viticulture or commercial fishing, (ii) industrial waste treat- 25 ment facilities or air pollution control facilities used in the taxpay- 26 er's trade or business, (iii) research and development property, (iv) 27 principally used in the ordinary course of the taxpayer's trade or busi- 28 ness as a broker or dealer in connection with the purchase or sale 29 (which shall include but not be limited to the issuance, entering into, 30 assumption, offset, assignment, termination, or transfer) of stocks, 31 bonds or other securities as defined in section four hundred 32 seventy-five(c)(2) of the Internal Revenue Code, or of commodities as 33 defined in section four hundred seventy-five (e) of the Internal Revenue 34 Code, or (v) principally used in the ordinary course of the taxpayer's 35 trade or business of providing investment advisory services for a regu- 36 lated investment company as defined in section eight hundred fifty-one 37 of the Internal Revenue Code, or lending, loan arrangement or loan orig- 38 ination services to customers in connection with the purchase or sale 39 (which shall include but not be limited to the issuance, entering into, 40 assumption, offset, assignment, termination, or transfer) of securities 41 as defined in section four hundred seventy-five(c)(2) of the Internal 42 Revenue Code. For purposes of clauses (iv) and (v) of this subparagraph, 43 property purchased by a taxpayer affiliated with a regulated broker, 44 dealer or registered investment adviser is allowed a credit under this 45 subdivision if the property is used by its affiliated regulated broker, 46 dealer or registered investment adviser in accordance with this subdivi- 47 sion. For purposes of determining if the property is principally used in 48 qualifying uses, the uses by the taxpayer described in clauses (iv) and 49 (v) of this subparagraph may be aggregated. In addition, the uses by the 50 taxpayer, its affiliated regulated broker, dealer, and registered 51 investment adviser under either or both of those clauses may be aggre- 52 gated. Provided, however, a taxpayer shall not be allowed the credit 53 provided by clauses (iv) and (v) of this subparagraph unless (I) eighty 54 percent or more of the employees performing the administrative and 55 support functions resulting from or related to the qualifying uses of 56 such equipment are located in this state, or (II) the average number ofA. 5922 12 1 employees that perform the administrative and support functions result- 2 ing from or related to the qualifying uses of such equipment and are 3 located in this state during the taxable year for which the credit is 4 claimed is equal to or greater than ninety-five percent of the average 5 number of employees that perform these functions and are located in this 6 state during the thirty-six months immediately preceding the year for 7 which the credit is claimed, or (III) the number of employees located in 8 this state during the taxable year for which the credit is claimed is 9 equal to or greater than ninety percent of the number of employees 10 located in this state on December thirty-first, nineteen hundred nine- 11 ty-eight or, if the taxpayer was not a calendar year taxpayer in nine- 12 teen hundred ninety-eight, the last day of its first taxable year ending 13 after December thirty-first, nineteen hundred ninety-eight. If the 14 taxpayer becomes subject to tax in this state after the taxable year 15 beginning in nineteen hundred ninety-eight, then the taxpayer is not 16 required to satisfy the employment test provided in the preceding 17 sentence of this subparagraph for its first taxable year. For purposes 18 of item (III) of this clause, the employment test will be based on the 19 number of employees located in this state on the last day of the first 20 taxable year the taxpayer is subject to tax in this state. If the uses 21 of the property must be aggregated to determine whether the property is 22 principally used in qualifying uses, then either each affiliate using 23 the property must satisfy this employment test or this employment test 24 must be satisfied through the aggregation of the employees of the 25 taxpayer, its affiliated regulated broker, dealer, and registered 26 investment adviser using the property. For purposes of this subdivision, 27 the term "goods" shall not include electricity. For purposes of this 28 paragraph, manufacturing shall mean the process of working raw materials 29 into wares suitable for use or which gives new shapes, new quality or 30 new combination to matter which already has gone through some artificial 31 process by the use of machinery, tools, appliances and other similar 32 equipment. Property used in the production of goods shall include 33 machinery, equipment or other tangible property which is principally 34 used in the repair and service of other machinery, equipment or other 35 tangible property used principally in the production of goods and shall 36 include all facilities used in the production operation, including stor- 37 age of material to be used in production and of the products that are 38 produced. For purposes of this paragraph, the terms "industrial waste 39 treatment facilities", "air pollution control facilities" and "research 40 and development property" shall have the meanings ascribed thereto by 41 clauses (ii) and (iii), respectively, of subparagraph (D) of this para- 42 graph, and the provisions of subparagraph (C) of this paragraph shall 43 apply. 44 (3) A taxpayer shall not be allowed a credit under this subdivision 45 with respect to any tangible personal property and other tangible prop- 46 erty, including buildings and structural components of buildings, which 47 it leases to any other person or corporation except where a taxpayer 48 leases property to an affiliated regulated broker, dealer, or registered 49 investment adviser that uses such property in accordance with clause 50 (iv) or (v) of subparagraph (D) of paragraph two of this subdivision. 51 For purposes of the preceding sentence, any contract or agreement to 52 lease or rent or for a license to use such property shall be considered 53 a lease. Provided, however, in determining whether a taxpayer shall be 54 allowed a credit under this subdivision with respect to such property, 55 any election made with respect to such property pursuant to the 56 provisions of paragraph eight of subsection (f) of section one hundredA. 5922 13 1 sixty-eight of the Internal Revenue Code, as such paragraph was in 2 effect for agreements entered into prior to January first, nineteen 3 hundred eighty-four, shall be disregarded. 4 (4) If the amount of credit allowed under this subdivision for any 5 taxable year shall exceed the taxpayer's tax for such year, the excess 6 may be carried over to the following year or years and may be deducted 7 from the taxpayer's tax for such year or years. Any refund paid pursuant 8 to this paragraph shall be deemed to be a refund of an overpayment of 9 tax as provided in section six hundred eighty-six of this chapter, 10 provided, however, that no interest shall be paid thereon. 11 (ee) Discovery wage tax credit. (1) A taxpayer shall be allowed a 12 credit, to be computed as hereinafter provided, against the tax imposed 13 by this article, where the taxpayer has been certified pursuant to 14 section nine hundred seventy-two of the general municipal law. The 15 amount of such credit shall be as prescribed in paragraph three of this 16 subdivision. 17 (2) "Discovery wages" means wages paid by the taxpayer for full-time 18 employment during a taxable year, provided that those wages are paid by 19 a certified business as defined by the commissioner of economic develop- 20 ment as required in his or her responsibilities. 21 (3) The credit provided in this subdivision shall be equal to the 22 product of the gross wages paid and six and eighty-five hundredths 23 percent for each net new job created during the taxable year. 24 (4) "Net new job" shall be defined as each job that exceeds the aver- 25 age number of individuals employed full-time by the taxpayer in the 26 previous taxable year. 27 (5) If the amount of this credit and carryovers of such credit allowed 28 under this subdivision for any taxable year shall exceed the taxpayer's 29 tax for such year, the excess, as well as any part of the credit or 30 carryovers of such credit, or both, which may not be deducted from the 31 tax otherwise due by reason of paragraph three of this subdivision, may 32 be carried over to the following year or years and may be deducted from 33 the taxpayer's tax for such year or years. 34 § 7. This act shall take effect immediately; provided, however, that 35 any rules and regulations necessary to carry out the provisions of this 36 act shall be promulgated by the commissioner of economic development 37 before such effective date. 38 PART C 39 Section 1. The opening paragraph of paragraph (a) of subdivision 1 of 40 section 210 of the tax law, as amended by section 10 of part T of chap- 41 ter 59 of the laws of 2015, is amended to read as follows: 42 For taxable years beginning before January first, two thousand 43 sixteen, the amount prescribed by this paragraph shall be computed at 44 the rate of seven and one-tenth percent of the taxpayer's business 45 income base. For taxable years beginning on or after January first, two 46 thousand [sixteen] seventeen, the amount prescribed by this paragraph 47 shall be [six and one-half] five and nine hundredths percent of the 48 taxpayer's business income base. The taxpayer's business income base 49 shall mean the portion of the taxpayer's business income apportioned 50 within the state as hereinafter provided. However, in the case of a 51 small business taxpayer, as defined in paragraph (f) of this subdivi- 52 sion, the amount prescribed by this paragraph shall be computed pursuant 53 to subparagraph (iv) of this paragraph and in the case of a manufactur- 54 er, as defined in subparagraph (vi) of this paragraph, the amountA. 5922 14 1 prescribed by this paragraph shall be computed pursuant to subparagraph 2 (vi) of this paragraph, and, in the case of a qualified emerging tech- 3 nology company, as defined in subparagraph (vii) of this paragraph, the 4 amount prescribed by this paragraph shall be computed pursuant to 5 subparagraph (vii) of this paragraph. 6 § 2. Subparagraph (iv) of paragraph (a) of subdivision 1 of section 7 210 of the tax law, as amended by section 12 of part A of chapter 59 of 8 the laws of 2014, is amended to read as follows: 9 (iv) (A) for taxable years beginning before January first, two thou- 10 sand sixteen, if the business income base is not more than two hundred 11 ninety thousand dollars the amount shall be six and one-half percent of 12 the business income base; if the business income base is more than two 13 hundred ninety thousand dollars but not over three hundred ninety thou- 14 sand dollars the amount shall be the sum of (1) eighteen thousand eight 15 hundred fifty dollars, (2) seven and one-tenth percent of the excess of 16 the business income base over two hundred ninety thousand dollars but 17 not over three hundred ninety thousand dollars and (3) four and thirty- 18 five hundredths percent of the excess of the business income base over 19 three hundred fifty thousand dollars but not over three hundred ninety 20 thousand dollars; 21 (B) for taxable years beginning on or after January first, two thou- 22 sand seventeen and before January first, two thousand eighteen, if the 23 business income base is not more than five hundred thousand dollars the 24 amount shall be three and one-quarter percent of the business income 25 base; if the business income base is more than five hundred thousand 26 dollars but not over six hundred thousand dollars the amount shall be 27 the sum of (1) sixteen thousand two hundred fifty dollars, (2) six and 28 one-half percent of the excess of the business income base over five 29 hundred thousand dollars but not over six hundred thousand dollars and 30 (3) thirty-two and one-half percent of the excess of the business income 31 base over five hundred fifty thousand dollars but not over six hundred 32 thousand dollars; 33 (C) for taxable years beginning on or after January first, two thou- 34 sand eighteen and before January first, two thousand nineteen, if the 35 business income base is not more than five hundred thousand dollars the 36 amount shall be two and nine-tenths percent of the business income base; 37 if the business income base is more than five hundred thousand dollars 38 but not over six hundred thousand dollars the amount shall be the sum of 39 (1) fourteen thousand five hundred dollars, (2) six and one-half percent 40 of the excess of the business income base over five hundred thousand 41 dollars but not over six hundred thousand dollars and (3) thirty-six 42 percent of the excess of the business income base over five hundred 43 fifty thousand dollars but not over six hundred thousand dollars; 44 (D) for taxable years beginning on or after January first, two thou- 45 sand nineteen and before January first, two thousand twenty, if the 46 business income base is not more than five hundred thousand dollars the 47 amount shall be two and one-half percent of the business income base; if 48 the business income base is more than five hundred thousand dollars but 49 not over six hundred thousand dollars the amount shall be the sum of (1) 50 twelve thousand five hundred dollars, (2) six and one-half percent of 51 the excess of the business income base over five hundred thousand 52 dollars but not over six hundred thousand dollars and (3) forty percent 53 of the excess of the business income base over five hundred fifty thou- 54 sand dollars but not over six hundred thousand dollars; andA. 5922 15 1 (E) for taxable years beginning on or after January first, two thou- 2 sand twenty, if the business income base is not more than six hundred 3 thousand dollars the amount shall be zero percent. 4 § 3. Paragraph 1 of subdivision (a) of section 1502 of the tax law, as 5 amended by section 4 of part N of chapter 60 of the laws of 2007, is 6 amended to read as follows: 7 (1) for taxable years beginning before July first, two thousand, nine 8 percent of the taxpayer's entire net income, or portion thereof allo- 9 cated within this state, for the taxable year, or part thereof, except 10 that for taxable years beginning prior to January first, nineteen 11 hundred seventy-eight, the rate shall be four and five-tenths percent; 12 for taxable years beginning after June thirtieth, two thousand and 13 before July first, two thousand one, eight and one-half percent of the 14 taxpayer's entire net income, or portion thereof allocated within this 15 state, for the taxable year, or part thereof; for taxable years begin- 16 ning after June thirtieth, two thousand one and before July first, two 17 thousand two, eight percent of the taxpayer's entire net income, or 18 portion thereof allocated within this state, for the taxable year, or 19 part thereof; for taxable years beginning after June thirtieth, two 20 thousand two and before January first, two thousand seven, seven and 21 one-half percent of the taxpayer's entire net income, or portion thereof 22 allocated within this state, for the taxable year, or part thereof; 23 [and] for taxable years beginning [on or] after January first, two thou- 24 sand seven and before January first, two thousand seventeen, seven and 25 one-tenth percent of the taxpayer's entire net income, or portion there- 26 of allocated within this state, for the taxable year, or part thereof; 27 and for taxable years beginning on or after January first, two thousand 28 seventeen, six and eighty-five one hundredths percent of the taxpayer's 29 entire net income, or portion thereof allocated within this state, for 30 the taxable year, or part thereof; or 31 § 4. Subparagraph 1 of paragraph (b) of subdivision 1 of section 186-a 32 of the tax law, as amended by section 4 of part Y of chapter 63 of the 33 laws of 2000, is amended to read as follows: 34 (1) two and five-tenths percent on and after January first, two thou- 35 sand through December thirty-first, two thousand, two and forty-five one 36 hundredths percent from January first, two thousand one through December 37 thirty-first, two thousand one, two and four-tenths percent from January 38 first, two thousand two through December thirty-first, two thousand two, 39 two and twenty-five one hundredths percent from January first, two thou- 40 sand three through December thirty-first, two thousand three, two and 41 one hundred twenty-five one thousandths percent from January first, two 42 thousand four through December thirty-first, two thousand four [and], 43 two percent commencing January first, two thousand five and one and 44 one-half percent commencing January first, two thousand seventeen and 45 thereafter of that portion of its gross income derived from the trans- 46 portation, transmission or distribution of gas or electricity by means 47 of conduits, mains, pipes, wires, lines or the like and 48 § 5. Subparagraph 1 of paragraph (a) of subdivision 2 of section 186-e 49 of the tax law, as amended by section 2 of part P of chapter 59 of the 50 laws of 2015, is amended to read as follows: 51 (1) There is hereby imposed an excise tax on the sale of telecommuni- 52 cation services, except for the sale of mobile telecommunication 53 services that are subject to tax under subparagraph two of this para- 54 graph, by any person which is a provider of telecommunication services, 55 to be paid by such person, at the rate of three and one-half percent 56 prior to October first, nineteen hundred ninety-eight, three and one-A. 5922 16 1 quarter percent from October first, nineteen hundred ninety-eight 2 through December thirty-first, nineteen hundred ninety-nine, [and] two 3 and one-half percent [on and] after January first, two thousand five, 4 and two percent on and after January first, two thousand seventeen of 5 gross receipt from: (i) any intrastate telecommunication services; (ii) 6 any interstate and international telecommunication services (other than 7 interstate and international private telecommunication services) which 8 originate or terminate in this state and which telecommunication 9 services are charged to a service address in this state, regardless of 10 where the amounts charged for such services are billed or ultimately 11 paid; and (iii) interstate and international private telecommunication 12 services, the gross receipt to which the tax shall apply shall be deter- 13 mined as prescribed in subdivision three of this section. 14 § 6. This act shall take effect immediately and shall apply to taxable 15 years beginning on or after January 1, 2018, provided, however, that any 16 rules and regulations necessary to carry out the provisions of this act 17 shall be promulgated before such effective date. 18 § 2. Severability clause. If any clause, sentence, paragraph, subdivi- 19 sion, section or part of this act shall be adjudged by any court of 20 competent jurisdiction to be invalid, such judgment shall not affect, 21 impair, or invalidate the remainder thereof, but shall be confined in 22 its operation to the clause, sentence, paragraph, subdivision, section 23 or part thereof directly involved in the controversy in which such judg- 24 ment shall have been rendered. It is hereby declared to be the intent of 25 the legislature that this act would have been enacted even if such 26 invalid provisions had not been included herein. 27 § 3. This act shall take effect immediately, provided, however, that 28 the applicable effective date of Parts A through C of this act shall be 29 as specifically set forth in the last section of such Parts.
