S T A T E O F N E W Y O R K ________________________________________________________________________ 7696 2009-2010 Regular Sessions I N A S S E M B L Y April 22, 2009 ___________ Introduced by M. of A. HAYES, BACALLES, FINCH, HAWLEY, REILICH, TEDISCO, TOBACCO, WALKER -- Multi-Sponsored by -- M. of A. ALFANO, BARCLAY, BARRA, BURLING, BUTLER, CALHOUN, CONTE, CORWIN, CROUCH, DUPREY, ERRI- GO, GIGLIO, JORDAN, KOLB, P. LOPEZ, McDONOUGH, MILLER, MOLINARO, OAKS, O'MARA, QUINN, RAIA, SALADINO, SAYWARD, THIELE, TOWNSEND -- read once and referred to the Committee on Insurance AN ACT to amend the insurance law and the tax law, in relation to providing a tax credit for the purchase of health insurance by quali- fied small employers THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. The insurance law is amended by adding a new section 215 to 2 read as follows: 3 S 215. REPORT ON QUALIFIED SMALL EMPLOYER TAX CREDIT. THE SUPERINTEN- 4 DENT SHALL ORDER A STUDY OF THE IMPACT OF SECTION FOUR THOUSAND THREE 5 HUNDRED TWENTY-SIX OF THIS CHAPTER, SUBDIVISION FORTY-ONE OF SECTION TWO 6 HUNDRED TEN OF THE TAX LAW, SUBDIVISION (Y) OF SECTION FIFTEEN HUNDRED 7 ELEVEN OF THE TAX LAW, AND SUBSECTION (F-1) OF SECTION ONE THOUSAND FOUR 8 HUNDRED FIFTY-SIX OF THE TAX LAW. SUCH STUDY SHALL EXAMINE THE NUMBER OF 9 PERSONS COVERED BY GROUP HEALTH INSURANCE OFFERED BY THEIR EMPLOYER 10 PRIOR TO, AND AFTER, IMPLEMENTATION OF SUCH PROVISIONS OF SUCH SECTIONS, 11 AND SHALL DETERMINE THE EFFECT OF SUCH PROVISIONS OF SUCH SECTIONS ON 12 EMPLOYEE HEALTH INSURANCE COVERAGE. THE STUDY SHALL BE COMPLETED AND A 13 REPORT SUBMITTED BY SEPTEMBER FIRST, TWO THOUSAND ELEVEN TO THE GOVER- 14 NOR, THE TEMPORARY PRESIDENT OF THE SENATE AND THE SPEAKER OF THE ASSEM- 15 BLY. 16 S 2. Section 210 of the tax law is amended by adding a new subdivision 17 41 to read as follows: 18 41. (A) A TAXPAYER WHO IS A QUALIFIED SMALL EMPLOYER, INCLUDING A 19 SMALL EMPLOYER PRINCIPALLY ENGAGED IN FARMING, SHALL BE ALLOWED A CREDIT 20 AGAINST THE TAX IMPOSED BY THIS ARTICLE EQUAL TO FIFTEEN PERCENT OF THE EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06843-02-9 A. 7696 2 1 PREMIUM PAID DURING THE TAXABLE YEAR FOR HEALTH INSURANCE BY SUCH 2 EMPLOYER. 3 (B) THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY YEAR SHALL NOT 4 REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE HIGHER OF THE AMOUNTS 5 PRESCRIBED IN PARAGRAPHS (C) AND (D) OF SUBDIVISION ONE OF THIS SECTION. 6 IF, HOWEVER, THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR 7 ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT 8 NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING 9 YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR 10 OR YEARS. 11 (C) FOR THE PURPOSES OF THIS SUBDIVISION "QUALIFIED SMALL EMPLOYER" 12 SHALL MEAN AN INDIVIDUAL PROPRIETOR WHO IS THE SOLE EMPLOYEE OF THE 13 BUSINESS OR AN EMPLOYER WITH NOT MORE THAN FIFTY EMPLOYEES: WHO IS A 14 "SMALL BUSINESS TAXPAYER" AS DEFINED IN PARAGRAPH (F) OF SUBDIVISION ONE 15 OF THIS SECTION. 16 (D) FOR THE PURPOSES OF THIS SUBDIVISION, THE TERM "HEALTH INSURANCE" 17 MEANS AN ACCIDENT AND HEALTH INSURANCE POLICY SUBJECT TO THE PROVISIONS 18 OF SECTION THREE THOUSAND TWO HUNDRED SIXTEEN, THREE THOUSAND TWO 19 HUNDRED TWENTY-ONE, FOUR THOUSAND THREE HUNDRED THREE OR FOUR THOUSAND 20 EIGHT HUNDRED ONE OF THE INSURANCE LAW, AND ARTICLE FORTY-THREE OF THE 21 PUBLIC HEALTH LAW. 22 S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 23 of the tax law, as amended by section 2 of part ZZ-1 of chapter 57 of 24 the laws of 2008, is amended to read as follows: 25 (B) shall be treated as the owner of a new business with respect to 26 such share if the corporation qualifies as a new business pursuant to 27 paragraph (j) of subdivision twelve of section two hundred ten of this 28 chapter. 29 The corporation's credit base under 30 section two hundred ten or section 31 With respect to the following fourteen hundred fifty-six of this 32 credit under this section: chapter is: 33 (I) Investment tax credit Investment credit base 34 under subsection (a) or qualified 35 rehabilitation 36 expenditures under 37 subdivision twelve of 38 section two hundred ten 39 (II) Empire zone Cost or other basis 40 investment tax credit under subdivision 41 under subsection (j) twelve-B 42 of section two hundred 43 ten 44 (III) Empire zone Eligible wages under 45 wage tax credit subdivision nineteen of 46 under subsection (k) section two hundred ten 47 or subsection (e) of 48 section fourteen hundred 49 fifty-six A. 7696 3 1 (IV) Empire zone Qualified investments 2 capital tax credit and contributions under 3 under subsection (l) subdivision twenty of 4 section two hundred ten 5 or subsection (d) of 6 section fourteen hundred 7 fifty-six 8 (V) Agricultural property tax Allowable school 9 credit under subsection (n) district property taxes under 10 subdivision twenty-two of 11 section two hundred ten 12 (VI) Credit for employment Qualified first-year wages or 13 of persons with dis- qualified second-year wages 14 abilities under under subdivision 15 subsection (o) twenty-three of section 16 two hundred ten 17 or subsection (f) 18 of section fourteen 19 hundred fifty-six 20 (VII) Employment incentive Applicable investment credit 21 credit under subsec- base under subdivision 22 tion (a-1) twelve-D of section two 23 hundred ten 24 (VIII) Empire zone Applicable investment 25 employment credit under sub- 26 incentive credit under division twelve-C 27 subsection (j-1) of section two hundred ten 28 (IX) Alternative fuels credit Cost under subdivision 29 under subsection (p) twenty-four of section two 30 hundred ten 31 (X) Qualified emerging Applicable credit base 32 technology company under subdivision twelve-E 33 employment credit of section two hundred ten 34 under subsection (q) 35 (XI) Qualified emerging Qualified investments under 36 technology company subdivision twelve-F of 37 capital tax credit section two hundred ten 38 under subsection (r) 39 (XII) Credit for purchase of an Cost of an automated 40 automated external defibrillator external defibrillator under 41 under subsection (s) subdivision twenty-five of 42 section two hundred ten 43 or subsection (j) of section 44 fourteen hundred fifty-six 45 (XIII) Low-income housing Credit amount under 46 credit under subsection (x) subdivision thirty 47 of section two hundred ten or A. 7696 4 1 subsection (l) of section 2 fourteen hundred fifty-six 3 (XIV) Credit for transportation Amount of credit under 4 improvement contributions subdivision thirty-two of section 5 under subsection (z) two hundred ten or subsection 6 (n) of section fourteen 7 hundred fifty-six 8 (XV) QEZE credit for real property Amount of credit under 9 taxes under subsection (bb) subdivision twenty-seven of 10 section two hundred ten or 11 subsection (o) of section 12 fourteen hundred fifty-six 13 (XVI) QEZE tax reduction credit Amount of benefit period 14 under subsection (cc) factor, employment increase factor 15 and zone allocation 16 factor (without regard 17 to pro ration) under 18 subdivision twenty-eight of 19 section two hundred ten or 20 subsection (p) of section 21 fourteen hundred fifty-six 22 and amount of tax factor 23 as determined under 24 subdivision (f) of section sixteen 25 (XVII) Green building credit Amount of green building 26 under subsection (y) credit under subdivision thirty-one 27 of section two hundred ten 28 or subsection (m) of section 29 fourteen hundred fifty-six 30 (XVIII) Credit for long-term Qualified costs under 31 care insurance premiums subdivision twenty-five-a of 32 under subsection (aa) section two hundred ten 33 or subsection (k) of section 34 fourteen hundred fifty-six 35 (XIX) Brownfield redevelopment Amount of credit 36 credit under subsection under subdivision 37 (dd) thirty-three of section 38 two hundred ten 39 or subsection (q) of 40 section fourteen hundred 41 fifty-six 42 (XX) Remediated brownfield Amount of credit under 43 credit for real property subdivision thirty-four 44 taxes for qualified of section two hundred 45 sites under subsection ten or subsection (r) of 46 (ee) section fourteen hundred 47 fifty-six A. 7696 5 1 (XXI) Environmental Amount of credit under 2 remediation subdivision thirty-five of 3 insurance credit under section two hundred 4 subsection (ff) ten or subsection 5 (s) of section 6 fourteen hundred 7 fifty-six 8 (XXII) Empire state film production Amount of credit for 9 credit under subsection (gg) qualified production costs in produc 10 of a qualified film under 11 subdivision thirty-six of 12 section two hundred ten 13 (XXIII) Qualified emerging Qualifying expenditures and 14 technology company facilities, development activities under 15 operations and training credit subdivision twelve-G of section 16 under subsection (nn) two hundred ten 17 (XXIV) Security training tax Amount of credit 18 credit under under subdivision thirty-seven 19 subsection (ii) of section two hundred ten or 20 under subsection (t) of 21 section fourteen hundred fifty-six 22 (XXV) Credit for qualified fuel Amount of credit under 23 cell electric generating equipment subdivision thirty-seven 24 expenditures under subsection (g-2) of section two hundred ten 25 or subsection (t) of 26 section fourteen hundred 27 fifty-six 28 (XXVI) Empire state commercial Amount of 29 production credit under credit for qualified production 30 subsection (jj) costs in production of a 31 qualified commercial under 32 subdivision thirty-eight of sec- 33 tion two hundred ten 34 (XXVII) Biofuel production Amount of credit 35 tax credit under under subdivision 36 subsection (jj) thirty-eight of 37 section two hundred ten 38 (XXVIII) Clean heating fuel credit Amount of credit 39 under subsection (mm) under subdivision thirty-nine of 40 section two hundred ten 41 (XXIX) Credit for rehabilitation Amount of credit under 42 of historic properties subdivision forty of 43 under subsection (oo) [subsection] SECTION two hundred 44 ten 45 (XXX) Credit for companies who Amount of credit under 46 provide transportation subdivision forty of 47 to individuals section two hundred ten A. 7696 6 1 with disabilities 2 under subsection (oo) 3 (XXXI) SMALL EMPLOYER HEALTH CARE CREDIT UNDER SUBDIVISION 4 CREDIT UNDER SUBSECTION (GG) FORTY-ONE OF SECTION TWO 5 HUNDRED TEN 6 S 4. Section 606 of the tax law is amended by adding a new subsection 7 (qq) to read as follows: 8 (QQ) SMALL EMPLOYER HEALTH CARE INSURANCE CREDIT. (1) A TAXPAYER WHO 9 IS A QUALIFIED SMALL EMPLOYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX 10 IMPOSED BY THIS ARTICLE EQUAL TO FIFTEEN PERCENT OF THE PREMIUM PAID BY 11 SUCH EMPLOYER FOR HEALTH INSURANCE DURING THE TAXABLE YEAR. PROVIDED, 12 HOWEVER, FOR THOSE QUALIFIED SMALL EMPLOYERS THAT ARE REQUIRED TO FILE 13 SCHEDULE F WITH THEIR ANNUAL RETURNS, SUCH CREDIT SHALL EQUAL FIFTEEN 14 PERCENT OF THE PREMIUM PAID FOR SUCH HEALTH INSURANCE. IF THE AMOUNT OF 15 THE CREDIT ALLOWABLE UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL 16 EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS MAY BE CARRIED OVER 17 TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S 18 TAX FOR SUCH YEAR OR YEARS. 19 (2) FOR THE PURPOSES OF THIS SUBSECTION "QUALIFIED SMALL EMPLOYER" 20 SHALL MEAN AN INDIVIDUAL PROPRIETOR WHO IS THE SOLE EMPLOYEE OF THE 21 BUSINESS OR AN EMPLOYER WITH NOT MORE THAN FIFTY EMPLOYEES: WHO IS A 22 "SMALL BUSINESS TAXPAYER" AS DEFINED IN PARAGRAPH (F) OF SUBDIVISION ONE 23 OF SECTION TWO HUNDRED TEN OF THIS CHAPTER. 24 (3) FOR THE PURPOSES OF THIS SUBSECTION, THE TERM "HEALTH INSURANCE" 25 MEANS AN ACCIDENT AND HEALTH INSURANCE POLICY SUBJECT TO THE PROVISIONS 26 OF SECTION THREE THOUSAND TWO HUNDRED SIXTEEN, THREE THOUSAND TWO 27 HUNDRED TWENTY-ONE, FOUR THOUSAND THREE HUNDRED THREE OR FOUR THOUSAND 28 EIGHT HUNDRED ONE OF THE INSURANCE LAW, AND ARTICLE FORTY-THREE OF THE 29 PUBLIC HEALTH LAW. 30 S 5. Section 1456 of the tax law is amended by adding a new subsection 31 (f-1) to read as follows: 32 (F-1) (1) A TAXPAYER WHO IS A QUALIFIED SMALL EMPLOYER SHALL BE 33 ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE EQUAL TO 34 FIFTEEN PERCENT OF THE PREMIUM PAID DURING THE TAXABLE YEAR FOR HEALTH 35 INSURANCE BY SUCH EMPLOYER. 36 (2) IN NO EVENT SHALL THE CREDIT HEREIN PROVIDED FOR, AND CARRYOVERS 37 OF SUCH CREDIT, BE ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYA- 38 BLE TO LESS THAN THE DOLLAR AMOUNT FIXED AS A MINIMUM TAX BY SUBSECTION 39 (B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. IF, HOWEVER, 40 THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWABLE 41 UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH 42 AMOUNT, ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT THUS NOT 43 DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING 44 YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR 45 OR YEARS. 46 (3) FOR THE PURPOSES OF THIS SECTION THE TERM "QUALIFIED SMALL EMPLOY- 47 ER" SHALL MEAN AN INDIVIDUAL PROPRIETOR WHO IS THE SOLE EMPLOYEE OF THE 48 BUSINESS OR AN EMPLOYER WITH NOT MORE THAN FIFTY EMPLOYEES: WHO IS A 49 "SMALL BUSINESS TAXPAYER" AS DEFINED IN PARAGRAPH (F) OF SUBDIVISION ONE 50 OF SECTION TWO HUNDRED TEN OF THIS CHAPTER. 51 (4) FOR THE PURPOSES OF THIS SUBSECTION, THE TERM "HEALTH INSURANCE" 52 MEANS AN ACCIDENT AND HEALTH INSURANCE POLICY SUBJECT TO THE PROVISIONS 53 OF SECTION THREE THOUSAND TWO HUNDRED SIXTEEN, THREE THOUSAND TWO 54 HUNDRED TWENTY-ONE, FOUR THOUSAND THREE HUNDRED THREE OR FOUR THOUSAND A. 7696 7 1 EIGHT HUNDRED ONE OF THE INSURANCE LAW, AND ARTICLE FORTY-THREE OF THE 2 PUBLIC HEALTH LAW. 3 S 6. Section 1511 of the tax law is amended by adding a new subdivi- 4 sion (y) to read as follows: 5 (Y) (1) A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED 6 BY THIS ARTICLE EQUAL TO FIFTEEN PERCENT OF THE PREMIUM PAID DURING THE 7 TAXABLE YEAR FOR HEALTH INSURANCE BY SUCH EMPLOYER. 8 (2) IN NO EVENT SHALL THE CREDIT HEREIN PROVIDED FOR BE ALLOWED IN AN 9 AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN THE MINIMUM FIXED 10 BY SUBDIVISION (A) OF SECTION FIFTEEN HUNDRED TWO OF THIS ARTICLE. IF, 11 HOWEVER, THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY 12 TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT 13 DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING 14 YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR 15 OR YEARS. 16 (3) FOR THE PURPOSES OF THIS SUBDIVISION THE TERM "QUALIFIED SMALL 17 EMPLOYER" SHALL MEAN AN INDIVIDUAL PROPRIETOR WHO IS THE SOLE EMPLOYEE 18 OF THE BUSINESS OR AN EMPLOYER WITH NOT MORE THAN FIFTY EMPLOYEES: WHO 19 IS A "SMALL BUSINESS TAXPAYER" AS DEFINED IN PARAGRAPH (F) OF SUBDIVI- 20 SION ONE OF SECTION TWO HUNDRED TEN OF THIS CHAPTER. 21 (4) FOR THE PURPOSES OF THIS SUBDIVISION, THE TERM "HEALTH INSURANCE" 22 MEANS AN ACCIDENT AND HEALTH INSURANCE POLICY SUBJECT TO THE PROVISIONS 23 OF SECTION THREE THOUSAND TWO HUNDRED SIXTEEN, THREE THOUSAND TWO 24 HUNDRED TWENTY-ONE, FOUR THOUSAND THREE HUNDRED THREE OR FOUR THOUSAND 25 EIGHT HUNDRED ONE OF THE INSURANCE LAW, AND ARTICLE FORTY-THREE OF THE 26 PUBLIC HEALTH LAW. 27 S 7. This act shall take effect July 1, 2010 and shall apply to taxa- 28 ble years commencing on and after such date; provided, however that the 29 empire state film production credit under subsection (gg), the empire 30 state commercial production credit under subsection (jj) and the credit 31 for companies who provide transportation to individuals with disabili- 32 ties under subsection (oo) of section 606 of the tax law contained in 33 section three of this act shall expire on the same date as provided in 34 section 9 of part P of chapter 60 of the laws of 2004, as amended, 35 section 10 of part V of chapter 62 of the laws of 2006, as amended, and 36 section 5 of chapter 522 of the laws of 2006, as amended, respectively.