senate Bill S5884

Establishes the START-UP NY program

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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  • 18 / Jun / 2013
    • REFERRED TO RULES
  • 08 / Jan / 2014
    • REFERRED TO COMMERCE, ECONOMIC DEVELOPMENT AND SMALL BUSINESS

Summary

Establishes the START-UP NY program; establishes tax benefits for businesses located in tax free NY areas and employees of such businesses; provides penalties for fraud in such START-UP NY program; provides for START-UP NY program leases.

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Bill Details

Versions:
S5884
Legislative Cycle:
2013-2014
Current Committee:
Senate Commerce, Economic Development And Small Business
Law Section:
Economic Development Law
Laws Affected:
Add Art 21 §§430 - 440, amd §§353, 355, 354 & 359, Ec Dev L; amd Tax L, generally; amd §11-1712, NYC Ad Cd; amd §420-a, RPT L; amd §355, add §361, Ed L; amd §666, Exec L

Sponsor Memo

BILL NUMBER:S5884

TITLE OF BILL: An act to amend the economic development law, the tax
law, the administrative code of the city of New York, the real
property tax law and the education law, in relation to establishing
the START-UP NY program (Part A); to amend the executive law, in
relation to the mandate and regulatory relief council (Part B); and to
amend the economic development law and the tax law, in relation to
enhancing the excelsior jobs program act (Part C)

Purpose::

The SUNY Tax-free Areas to Revitalize and Transform UPstate NY
(START-UP NY) legislation will promote entrepreneurialism and job
creation by transforming public higher education through tax-free
communities across the state, particularly in upstate New York. The
State University of New York (SUNY) campus system will serve as the
framework of the START-UP NY program to attract high-tech and other
start-ups, venture capital, new business and investments from across
the world. As important, the START-UP NY program will help existing
companies, especially high-tech and start-ups, stay in New York and
grow.

This new program would enable campuses to serve as economic engines
for their communities by harnessing the world-class research and
innovation power of New York State's higher education sector while
providing transformative financial incentives to spur business
creation and expansion. Higher education communities under START-UP NY
will be 100 % tax free (e.g.. including no income tax for employees,
no sales, property or business tax) as a way to entice companies to
bring their ventures to these communities by offering new businesses
and expanding businesses that create net new jobs.

This program builds on the State's rich tradition of positioning
colleges and universities as centerpieces for upstate economic
development. As Governor Rockefeller said in 1973, reflecting on the
dramatic expansion of upstate SUNY campuses during his tenure:
"There's been a tremendous effect in terms of impact on the
communities in which they live, because all of a sudden these
communities had large student bodies, professors, faculty coming from
all over the country and around the world. It was a whole new force, a
whole new sense of optimism. And it has, I think, been an important
force in self-renewal."

The START-UP NY program will serve a similar catalytic function in the
21st Century: creating new businesses and new jobs for upstate New
York and other strategically-designated locations, and benefiting the
campus communities as well as their entire regions.

Summary of Provisions:

Part A:

This bill would create the START-UP NY Program. Section 1 of the bill
adds a new Article 21 to the Economic Development Law to create this
program. Under this program, public and private colleges and
universities in New York will be able to apply to have vacant space or


land designated as tax-free areas. Generally (but with some limited
exceptions), the space or land of a State university or community
college must be located outside of New York City. SUNY campuses and
community colleges can designate vacant land and vacant space on their
campus and any business incubator with a bona fide affiliation to the
campus, university or college to be part of a Tax-Free NY Area, and
SUNY campuses and community colleges located north of Westchester
County can also designate property not to exceed 200,000 square feet
located within one mile of the campus.

Five city university campuses, one in each borough, would also
qualify. The designated campus must be located in an economically
distressed community in that borough, and the tax-free area can
include vacant land and vacant space on the CUNY campus and any
business incubator with a bona fide affiliation to the campus,
university or college. The tax-free areas sponsored by public
universities and colleges must be approved by the Commissioner of
Economic Development in consultation with the Chancellor of the
applicable university system.

The program also provides 3 million square feet of tax-free areas
primarily dedicated to private colleges and universities on land north
of Westchester County, which will be allocated by the START-UP NY
Program Board (Board) (consisting of three members with significant
experience in academic-based entrepreneurship appointed by the
Governor, the Speaker of the Assembly and the Temporary President of
the Senate) in a manner that ensures regional balance and balance
among eligible rural, urban and suburban areas in the State. For
private colleges and universities north of Westchester County, the
tax-free areas can include vacant land and vacant space on- or
off-campus, as well as any business incubator with a bona fide
affiliation to the campus, university or college.

Of these 3 million square feet, 75,000 square feet will be allocated
for each of the following: Nassau County, Suffolk County, Westchester
County, Brooklyn, the Bronx, Manhattan, Queens and Staten Island.
Private colleges and universities in New York City and Westchester,
Suffolk and Nassau Counties, as well as SUNY and CUNY campuses that
are excluded from the general provisions described above, may apply to
sponsor these tax-free areas on college campuses. Once the 75,000
square foot cap is reached in these counties and boroughs, the Board
may designate up to an additional 75,000 square feet in each.
Therefore, a potential of 150,000 square feet of space would be made
available.

In addition, up to 20 strategic state assets on vacant State-owned
land, in closed State-owned buildings or on state-owned
strategically-located property slated for closure may be designated by
the START-UP NY program board as tax-free areas in affiliation with a
college or university. Each strategic State asset may include up to
200,000 square feet of vacant land or vacant building space.

For all properties designated as tax-free areas under this program,
the sponsoring universities and colleges must present a plan that
specifies the land or space that they want designated as a tax-free
area and demonstrates how the businesses that would locate in the
tax-free area would be aligned with or will further the academic


mission of the university or college, and how the businesses'
participation in the program would have positive community and
economic effects, including whether the businesses would compete with
businesses in the same community but located outside of the tax-free
areas, as well as set performance metrics including the creation of
net new jobs.

Any capital project undertaken by a business in a tax-free area on
property owned or leased by the State, a State university campus,
community college, or City University campus will be subject to
prevailing wage requirements under the Labor Law. In addition, any
capital project on property owned or leased by the state, a state
university campus or city university campus will be required to comply
with MWBE objectives.

In order to locate in a tax-free area, a business will be required to
be a new business in the State or an expanding business that creates
net new jobs. In New York City and Nassau; Suffolk and Westchester
Counties, a business must also be high-tech or a company in the
formative stage of development. The mission and activities of the
business must align with, or further the academic mission of the
university or college sponsoring the tax-free area in which the
business seeks to locate and the business's participation in the
program must have positive community arid economic effects. In order
to be eligible for the benefits under the START-UP NY Program,
business must apply by December 31, 2020, by which time the
Commissioner of Economic Development would prepare an evaluation of
the program's effectiveness in order to determine continued
eligibility for application submissions.

Businesses that locate within a tax-free area will be entitled to a
tax elimination credit to eliminate their taxes. In addition,
businesses would be exempted from other taxes such as the organization
tax, the Metropolitan Commuter Transportation District (MCTD) mobility
tax for those businesses located within the MCTD, and businesses would
receive refunds of the sales taxes paid on the businesses' purchases
of tangible personal property and services for their locations within
the tax-free areas. The tax benefits would extend for 10 years
provided the businesses continue to maintain net new jobs and the
employment numbers of the business and its related companies
throughout the state do not decrease and its activities continue to be
consistent with the program.

In the first five years of a business's 10-year tax benefit period,
the wages of the employees of a business located in a tax-free area
that are employed in the new jobs created by the business within these
areas will be exempt from all personal income taxes. In years 6-10;
$200,000 of the wages of single individuals, $250,000 of the wages of
individuals who are heads of household and $300,000 of the wages of
individuals who file as married would be exempt. The aggregate number
of net new jobs designated each year as eligible for personal income
tax benefits will not exceed 10,000 new jobs.

A business that does not meet its net new job creation performance
metrics will face sanctions subject to the contract established
between the business and the college or university, including
proportionate reduction of benefits, suspension and/or termination.


Certain types of businesses are prohibited from participating in this
program, including retail, real estate, and professional services type
businesses.

Sections 2 through 16 would amend the Tax Law and the New York City
Administrative Code to detail these tax benefits.

Section 3 includes tough penalties for fraud. In the case of a
business that acted fraudulently, the business would: (1) be
immediately terminated from such program; (2) be subject to applicable
criminal penalties, including the felony crime of offering a false
instrument for filing in the first degree; and (3) be required to pay
back all tax benefits that the company and it employees have received
(the "claw-back").

Section 17 would amend the Real Property Tax Law to allow private
universities and colleges to maintain tax-exempt status on property
that is currently tax-exempt and that they subsequently lease to
businesses participating in the START-UP NY program.

Sections 18 through 20 would amend the Education Law to allow SUNY
campuses to participate in this program.

Section 21 would establish the terms for SUNY, CUNY and community
college leases to participating businesses, which include provisions
to ensure that revenue from any lease or contract benefits the
students and faculty of the college or university.

Section 22 provides that the bill takes effect immediately and the tax
benefits apply to taxable years beginning on or after January 1, 2014,
calendar quarters beginning on or after January 1, 2014, sales lax
quarters beginning on or after March 1, 2014, or transactions
occurring on or after January 1, 2014, whichever is applicable.

Part B:

Part B amends the Mandate Relief Council to expand it and rename it
the Mandate Relief and Regulatory Relief Council to allow businesses
to request the Council review regulations.

Part C:

Part C makes changes that enhance the Excelsior Jobs Program. Section
1 amends section 353 of the Economic Development Law to reduce
generally by half the job creation requirements for participants in
the Excelsior Program. Thus, for example, instead of being required to
create 10 manufacturing jobs, a participant would only be required to
create 5 manufacturing jobs.

Section 2 increases the Excelsior investment tax credit from 2 percent
of a property's cost to 5 percent. Sections 3 and 5 provide that a
taxpayer that doesn't create all the required jobs but creates at
least 75 % of those jobs will be required to proportionally reduce its
tax credits. Section 4 would amend the cap of the Excelsior Program to
allow the Commissioner to carry over one half of the amount of
unallocated credits to the next year as a way to expand job growth in
the State of New York.


Existing Law:

Part A is a new proposal, but builds on and brings together on scale
the Governor's regional-based higher education driven public/private
sector partnerships including the Regional Economic Development
Councils, NYSUNY 2020, Innovation Hot Spots, Venture Capital Fund and
Next Generation Job Linkage program.

Part B continues the effort to reduce burdensome and unnecessary
regulations in the state.

Part C builds upon the 2011 effort to enhance the Excelsior Jobs
Program to create additional job growth opportunities.

Justification:

The New Economy is growing in higher education, and there is a
positive synergy between academia and entrepreneurial activity. New
York has a great asset in its public and private education system and
while generating jobs, but it cannot retain jobs given the perception
and reality of New York as a high-tax state. The START-UP NY program
will transform New York into a magnet for new jobs and businesses by
using our world class system of higher education. The START-UP NY
program complements and builds on the State's current economic
development agenda, which includes:

*A paradigm shift in higher education that builds closer linkages
between colleges and employers in order to prepare students for
next-generation jobs;

*A focus on entrepreneurial academics through tech transfer, including
R&D clusters, incubators and the newly enacted Innovation Hot Spots
and Venture Capital Fund; and

* A business-friendly environment through lower taxes, entrepreneurial
government and active partnerships with key industries.

Research shows that colleges and universities can strategically fill
two critical needs for employers: advancing innovation with new
technologies, new processes, new products, and new ideas that all fuel
knowledge creation; and providing knowledge transfer, an
innovation-based culture for employers and entrepreneurs; and access
to a skilled workforce.

Since their establishment, SUNY's campuses have improved the economic
vitality of their communities and entire regions - fostering new jobs
on- and off-campus and leading to the development. of new businesses
and ideas. SUNY's history of invention has spanned the decades, from
introducing the first implantable heart pacemaker at SUNY Buffalo, to
the groundbreaking research and job creation occurring right now at
SUNY's NanoCollege. In addition, SUNY campuses across the state offer
world-class programs in fields ranging from business to viticulture to
computer science to electrical engineering which translate into a
highly skilled workforce that can help companies and communities
thrive upstate.


Although New York has all of the ingredients needed and even some
noteworthy success stories, the "2010 Report by the Task Force on
Diversifying the New York State Economy through Industry-Higher
Education Partnerships" identified significant opportunities for
growth. The task force found that while New York was near the top
nationally in total research expenditures, it lagged significantly
behind other states in successfully commercializing those research
ideas. For example:

*New York universities rank second nationally in total research
spending with nearly $4 billion spent annually (California ranks first
with $6.5 billion), but only 4.6 % of that total is sponsored by
industry, ranking New York 22nd among states (North Carolina ranks
first with 13.6 %, the national average is 5.4%).

* New York attracts only 4 % of the nation's venture capital
investment (California attracts 47 percent).

*New York's colleges incubate fewer new companies, with 35 start-ups
launched in 2007 (California schools had 58 and Massachusetts schools,
60).

As important, the START-UP NY program will help keep existing New York
start-ups and other high-tech companies in the state. The state spends
billions on public higher education but we do not get an adequate
return on investment. For example, New York is second in the nation in
number high tech start-ups, but 75 % of these small firms leave the
state before five years. That is, they are either wooed away by other
states' incentives or they leave of their own accord to take advantage
of lower operating costs in lower taxed environments.

New York must create the jobs to keep college graduates in State. The
latest data show only a little more than three-fourths of college
grads in NY stay following graduation (76.4%). This places New York
10th nationally--not only well below California, Texas and Washington,
but also below New Mexico, New Jersey, Nevada, South Carolina and
Mississippi.

Thirty-five upstate counties lost population between 2010 and 2012. In
just those two years: every county that lost population is upstate.
In Central NY, Finger Lakes, Mid-Hudson, Mohawk Valley, the Southern
Tier and Western NY, thousands more people chose to move out than
moved in.

START-UP NY, along with the expansion of the Mandate and Regulatory
Relief Council and the enhanced Excelsior Jobs Program, will create
business climate of job creation for New Yorkers, as well as the
innovators from around the country and the works we are trying to have
join us in New York.

Legislative History:

This is a new proposal.

Budget Implication:


The bill will not have a fiscal impact in SFY 13-14. Beginning in SPY
14-15, there is a potential "loss" resulting from forecasted future
revenue growth. The bill does not impose any direct costs on the
State. For example, unlike other tax benefit programs, there are no
State reimbursements to local governments to account for local
property tax revenue loss.

Effective Date:

Part A takes effect immediately and the tax benefits apply to taxable
years beginning on or after January 1, 2014, calendar quarters
beginning on or after January 1, 2014, sales tax quarters beginning on
or after March 1, 2014, or transactions occurring on or after January
1, 2014, whichever is applicable. Part B takes effect immediately.
Part C takes effect in 60 days.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5884

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              June 18, 2013
                               ___________

Introduced  by  Sens.  LIBOUS, SKELOS -- (at request of the Governor) --
  read twice and ordered printed, and when printed to  be  committed  to
  the Committee on Rules

AN  ACT to amend the economic development law, the tax law, the adminis-
  trative code of the city of New York, the real property  tax  law  and
  the education law, in relation to establishing the START-UP NY program
  (Part  A);  to amend the executive law, in relation to the mandate and
  regulatory relief council (Part B); and to amend the economic develop-
  ment law and the tax law, in relation to enhancing the excelsior  jobs
  program act (Part C)

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. This act enacts into law major  components  of  legislation
for  the  2013 legislative session.   Each component is wholly contained
within a Part identified as Parts A through C. The  effective  date  for
each particular provision contained within such Part is set forth in the
last section of such Part. Any provision in any section contained within
a  Part,  including the effective date of the Part, which makes a refer-
ence to a section "of this act",  when  used  in  connection  with  that
particular  component,  shall  be deemed to mean and refer to the corre-
sponding section of the Part in which it is found. Section three of this
act sets forth the general effective date of this act.

                                 PART A

  Section 1. The economic development law is amended  by  adding  a  new
article 21 to read as follows:
                               ARTICLE 21
                           START-UP NY PROGRAM
SECTION 430. SHORT TITLE.
        431. DEFINITIONS.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD12063-01-3

S. 5884                             2

        432. ELIGIBILITY CRITERIA FOR UNIVERSITIES AND COLLEGES.
        433. ELIGIBILITY CRITERIA FOR BUSINESSES.
        434. TAX BENEFITS.
        435. APPROVAL OF TAX-FREE NY AREAS.
        436. BUSINESSES LOCATING IN TAX-FREE NY AREAS.
        437. MWBE AND PREVAILING WAGE REQUIREMENTS.
        438. DISCLOSURE AUTHORIZATION AND REPORTING REQUIREMENTS.
        439. CONFLICT OF INTEREST GUIDELINES.
        440. PROHIBITION OF ANTI-COMPETITIVE BEHAVIOR.
  S  430.  SHORT TITLE.  THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
THE "SUNY TAX-FREE AREAS TO REVITALIZE AND TRANSFORM  UPSTATE  NEW  YORK
PROGRAM," OR THE "START-UP NY PROGRAM".
  S 431. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE:
  1.  "STATE  UNIVERSITY  CAMPUS"  SHALL  MEAN  ANY  OF THE COLLEGES AND
UNIVERSITIES DESCRIBED IN SUBDIVISION THREE  OF  SECTION  THREE  HUNDRED
FIFTY-TWO OF THE EDUCATION LAW.
  2. "COMMUNITY COLLEGE" MEANS A COLLEGE ESTABLISHED AND OPERATED PURSU-
ANT TO THE PROVISIONS OF ARTICLE ONE HUNDRED TWENTY-SIX OF THE EDUCATION
LAW,  AND  PROVIDING  TWO-YEAR  OR  FOUR-YEAR POST SECONDARY PROGRAMS IN
GENERAL AND  TECHNICAL  EDUCATIONAL  SUBJECTS  AND  RECEIVING  FINANCIAL
ASSISTANCE  FROM  THE  STATE, OTHER THAN A COMMUNITY COLLEGE OF THE CITY
UNIVERSITY OF NEW YORK.
  3. "CITY UNIVERSITY CAMPUS" MEANS A CAMPUS OF THE CITY  UNIVERSITY  OF
NEW YORK, AS DEFINED IN SUBDIVISION TWO OF SECTION SIXTY-TWO HUNDRED TWO
OF THE EDUCATION LAW.
  4.  "PRIVATE COLLEGE OR UNIVERSITY" MEANS A NOT-FOR-PROFIT TWO OR FOUR
YEAR UNIVERSITY OR COLLEGE GIVEN THE POWER TO CONFER  ASSOCIATE,  BACCA-
LAUREATE  OR  HIGHER  DEGREES IN THIS STATE BY THE LEGISLATURE OR BY THE
REGENTS UNDER ARTICLE FIVE OF THE EDUCATION LAW.
  5. "NET NEW JOB" MEANS A JOB CREATED IN A TAX-FREE NY AREA THAT SATIS-
FIES ALL OF THE FOLLOWING CRITERIA:
  (A) IS NEW TO THE STATE;
  (B) HAS NOT BEEN TRANSFERRED FROM  EMPLOYMENT  WITH  ANOTHER  BUSINESS
LOCATED  IN THIS STATE, THROUGH AN ACQUISITION, MERGER, CONSOLIDATION OR
OTHER REORGANIZATION OF BUSINESSES  OR  THE  ACQUISITION  OF  ASSETS  OF
ANOTHER  BUSINESS, OR EXCEPT AS PROVIDED IN PARAGRAPH (D) OF SUBDIVISION
SIX OF THIS SECTION HAS NOT BEEN  TRANSFERRED  FROM  EMPLOYMENT  WITH  A
RELATED PERSON IN THIS STATE;
  (C)  IS  NOT  FILLED BY AN INDIVIDUAL EMPLOYED WITHIN THE STATE WITHIN
THE IMMEDIATELY PRECEDING SIXTY MONTHS BY A RELATED PERSON;
  (D) IS EITHER A FULL-TIME WAGE-PAYING JOB OR EQUIVALENT TO A FULL-TIME
WAGE-PAYING JOB REQUIRING AT LEAST THIRTY-FIVE HOURS PER WEEK; AND
  (E) IS FILLED FOR MORE THAN SIX MONTHS.
  6. "NEW BUSINESS" MEANS A BUSINESS THAT SATISFIES ALL OF THE FOLLOWING
TESTS:
  (A) THE BUSINESS MUST NOT BE OPERATING OR LOCATED WITHIN THE STATE  AT
THE  TIME  IT  SUBMITS ITS APPLICATION TO PARTICIPATE IN THE START-UP NY
PROGRAM;
  (B) THE BUSINESS MUST NOT BE MOVING EXISTING JOBS INTO THE TAX-FREE NY
AREA FROM ANOTHER AREA IN THE STATE;
  (C) THE BUSINESS IS NOT SUBSTANTIALLY  SIMILAR  IN  OPERATION  AND  IN
OWNERSHIP  TO  A  BUSINESS  ENTITY  (OR ENTITIES) TAXABLE, OR PREVIOUSLY
TAXABLE WITHIN THE LAST FIVE TAXABLE YEARS, UNDER  SECTION  ONE  HUNDRED
EIGHTY-THREE,  ONE  HUNDRED  EIGHTY-FOUR, ONE HUNDRED EIGHTY-FIVE OR ONE
HUNDRED EIGHTY-SIX OF THE TAX LAW, ARTICLE NINE-A, THIRTY-TWO  OR  THIR-
TY-THREE  OF  THE  TAX LAW, ARTICLE TWENTY-THREE OF THE TAX LAW OR WHICH

S. 5884                             3

WOULD HAVE BEEN SUBJECT TO TAX UNDER SUCH ARTICLE TWENTY-THREE (AS  SUCH
ARTICLE WAS IN EFFECT ON JANUARY FIRST, NINETEEN HUNDRED EIGHTY), OR THE
INCOME  (OR  LOSSES) OF WHICH IS (OR WAS) INCLUDABLE UNDER ARTICLE TWEN-
TY-TWO OF THE TAX LAW; AND
  (D)  THE  BUSINESS  MUST  NOT HAVE CAUSED INDIVIDUALS TO TRANSFER FROM
EXISTING EMPLOYMENT WITH A RELATED PERSON LOCATED IN THE STATE TO  SIMI-
LAR  EMPLOYMENT  WITH  THE  BUSINESS,  UNLESS SUCH BUSINESS HAS RECEIVED
APPROVAL FOR SUCH TRANSFERS FROM THE  COMMISSIONER  AFTER  DEMONSTRATING
THAT THE RELATED PERSON HAS NOT ELIMINATED THOSE EXISTING POSITIONS.
  7.  "TAX-FREE  NY AREA" MEANS THE LAND OR VACANT SPACE OF A UNIVERSITY
OR COLLEGE THAT MEETS THE ELIGIBILITY CRITERIA SPECIFIED IN SECTION FOUR
HUNDRED THIRTY-TWO OF THIS ARTICLE AND THAT HAS BEEN APPROVED AS A  TAX-
FREE  NY AREA PURSUANT TO THE PROVISIONS IN SECTION FOUR HUNDRED THIRTY-
FIVE OF THIS ARTICLE. IT ALSO MEANS A STRATEGIC  STATE  ASSET  THAT  HAS
BEEN  APPROVED  BY  THE  START-UP  NY  APPROVAL  BOARD  PURSUANT  TO THE
PROVISIONS OF SUBDIVISION FOUR OF SECTION FOUR  HUNDRED  THIRTY-FIVE  OF
THIS ARTICLE.
  8.  "RELATED PERSON" MEANS A "RELATED PERSON" PURSUANT TO SUBPARAGRAPH
(C) OF PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED  SIXTY-
FIVE OF THE INTERNAL REVENUE CODE.
  9. "STRATEGIC STATE ASSET" MEANS LAND OR A BUILDING OR GROUP OF BUILD-
INGS OWNED BY THE STATE OF NEW YORK, THAT IS: (A) CLOSED; (B) VACANT; OR
(C) FOR WHICH NOTICE OF CLOSURE HAS BEEN GIVEN PURSUANT TO ANY STATUTORY
NOTICE  REQUIREMENT OR WHICH IS OTHERWISE AUTHORIZED TO BE CLOSED PURSU-
ANT TO ANY CHAPTER OF THE LAWS OF NEW YORK.
  10. "START-UP NY APPROVAL BOARD" OR "BOARD" MEANS A  BOARD  CONSISTING
OF THREE MEMBERS, ONE EACH APPOINTED BY THE GOVERNOR, THE SPEAKER OF THE
ASSEMBLY  AND  THE TEMPORARY PRESIDENT OF THE SENATE. EACH MEMBER OF THE
START-UP NY APPROVAL BOARD MUST HAVE SIGNIFICANT EXPERTISE  AND  EXPERI-
ENCE  IN ACADEMIC BASED ECONOMIC DEVELOPMENT AND MAY NOT HAVE A PERSONAL
INTEREST IN ANY PROJECT THAT COMES BEFORE THE BOARD.
  11. "UNDERUTILIZED PROPERTY" MEANS VACANT OR ABANDONED LAND  OR  SPACE
IN  AN  EXISTING  INDUSTRIAL  PARK, MANUFACTURING FACILITY, A BROWNFIELD
SITE AS DEFINED IN ARTICLE TWENTY-SEVEN OF THE  ENVIRONMENTAL  CONSERVA-
TION  LAW,  OR A DISTRESSED OR ABANDONED PROPERTY, WHICH SHALL BE DETER-
MINED BY FACTORS INCLUDING POVERTY, IDENTIFIED  BY  THE  COUNTY  OR  THE
TOWN, VILLAGE OR CITY THAT CONTAINS SUCH DISTRESSED OR ABANDONED PROPER-
TY,  AS  OF  THE EFFECTIVE DATE OF THIS ARTICLE. A COLLEGE OR UNIVERSITY
SHALL WORK WITH LOCAL MUNICIPALITIES OR LOCAL ECONOMIC DEVELOPMENT ENTI-
TIES TO IDENTIFY UNDERUTILIZED PROPERTIES.
  12. "ELIGIBLE LAND" MEANS  LAND  ELIGIBLE  PURSUANT  TO  SECTION  FOUR
HUNDRED THIRTY-TWO OF THIS ARTICLE FOR APPROVAL AS A TAX-FREE NY AREA.
  13.  "SPONSORING  CAMPUS, UNIVERSITY OR COLLEGE" MEANS A UNIVERSITY OR
COLLEGE THAT HAS RECEIVED APPROVAL TO SPONSOR A TAX-FREE NY AREA  PURSU-
ANT TO SECTION FOUR HUNDRED THIRTY-FIVE OF THIS ARTICLE.
  S  432.  ELIGIBILITY CRITERIA FOR UNIVERSITIES AND COLLEGES.  1. STATE
UNIVERSITY CAMPUSES, COMMUNITY COLLEGES AND  CITY  UNIVERSITY  CAMPUSES.
(A) SUBJECT TO THE LIMITATIONS IN PARAGRAPH (C) OF THIS SUBDIVISION, THE
FOLLOWING  WILL  CONSTITUTE  THE  ELIGIBLE  LAND  OF  A STATE UNIVERSITY
CAMPUS, COMMUNITY COLLEGE, OR CITY UNIVERSITY CAMPUS:
  (I) ANY VACANT SPACE IN ANY BUILDING LOCATED ON A CAMPUS  OF  A  STATE
UNIVERSITY CAMPUS, COMMUNITY COLLEGE OR CITY UNIVERSITY CAMPUS;
  (II)  ANY VACANT LAND ON A CAMPUS OF A STATE UNIVERSITY CAMPUS, COMMU-
NITY COLLEGE OR CITY UNIVERSITY CAMPUS;
  (III) FOR A STATE UNIVERSITY CAMPUS OR COMMUNITY COLLEGE, A  TOTAL  OF
TWO HUNDRED THOUSAND SQUARE FEET OF VACANT LAND OR VACANT BUILDING SPACE

S. 5884                             4

THAT,  EXCEPT  AS  PROVIDED  UNDER PARAGRAPH (B) OF THIS SUBDIVISION, IS
LOCATED WITHIN ONE MILE OF A CAMPUS OF THE STATE  UNIVERSITY  CAMPUS  OR
COMMUNITY  COLLEGE; PROVIDED THAT THIS SUBPARAGRAPH SHALL NOT APPLY TO A
STATE  UNIVERSITY  CAMPUS OR COMMUNITY COLLEGE LOCATED IN NASSAU COUNTY,
SUFFOLK COUNTY OR WESTCHESTER COUNTY; AND
  (IV) A NEW YORK STATE INCUBATOR AS THE TERM  IS  USED  IN  SUBDIVISION
FOUR  OF  SECTION  FOUR HUNDRED THIRTY-THREE OF THIS ARTICLE WITH A BONA
FIDE AFFILIATION TO THE STATE UNIVERSITY CAMPUS,  COMMUNITY  COLLEGE  OR
CITY UNIVERSITY CAMPUS, WITH APPROVAL OF THE COMMISSIONER.  IN ORDER FOR
THERE TO BE A BONA FIDE AFFILIATION OF A NEW YORK STATE INCUBATOR WITH A
STATE  UNIVERSITY  CAMPUS,  COMMUNITY COLLEGE OR CITY UNIVERSITY CAMPUS,
THE INCUBATOR AND THE STATE UNIVERSITY CAMPUS, COMMUNITY COLLEGE OR CITY
UNIVERSITY CAMPUS MUST HAVE A  PARTNERSHIP  TO  PROVIDE  ASSISTANCE  AND
PHYSICAL  SPACE  TO  ELIGIBLE BUSINESSES, AS THE TERM IS USED IN SECTION
SIXTEEN-V OF THE URBAN DEVELOPMENT CORPORATION ACT;  THE  INCUBATOR  AND
THE STATE UNIVERSITY CAMPUS, COMMUNITY COLLEGE OR CITY UNIVERSITY CAMPUS
MUST  DIRECTLY WORK TOWARDS THE GOALS OF JOINTLY CREATING JOBS AND INCU-
BATING NEW STARTUP BUSINESSES; AND THE MISSION  AND  ACTIVITIES  OF  THE
INCUBATOR  MUST  ALIGN WITH OR FURTHER THE ACADEMIC MISSION OF THE STATE
UNIVERSITY CAMPUS, COMMUNITY COLLEGE OR CITY UNIVERSITY CAMPUS.
  (B) A STATE UNIVERSITY CAMPUS OR  COMMUNITY  COLLEGE  WHICH  QUALIFIES
UNDER  SUBPARAGRAPH (III) OF PARAGRAPH (A) OF THIS SUBDIVISION MAY APPLY
TO THE COMMISSIONER FOR A DETERMINATION THAT IDENTIFIED VACANT  LAND  OR
IDENTIFIED VACANT SPACE IN A BUILDING THAT IS LOCATED MORE THAN ONE MILE
FROM  ITS  CAMPUS,  AND IS NOT LOCATED IN NASSAU COUNTY, SUFFOLK COUNTY,
WESTCHESTER COUNTY OR NEW YORK CITY, IS ELIGIBLE LAND  FOR  PURPOSES  OF
THIS  PROGRAM.  THE  COMMISSIONER  SHALL  GIVE  CONSIDERATION TO FACTORS
INCLUDING RURAL, SUBURBAN AND URBAN GEOGRAPHIC  CONSIDERATIONS  AND  MAY
QUALIFY  THE  IDENTIFIED LAND OR SPACE IN A BUILDING AS ELIGIBLE LAND IF
THE COMMISSIONER, IN CONSULTATION WITH THE  CHANCELLOR  OR  HIS  OR  HER
DESIGNEE,  DETERMINES  THAT  THE  STATE  UNIVERSITY  CAMPUS OR COMMUNITY
COLLEGE HAS SHOWN THAT THE USE OF THE LAND OR SPACE WILL  BE  CONSISTENT
WITH  THE  REQUIREMENTS  OF  THIS  PROGRAM AND THE PLAN SUBMITTED BY THE
STATE UNIVERSITY CAMPUS OR COMMUNITY COLLEGE PURSUANT  TO  SECTION  FOUR
HUNDRED  THIRTY-FIVE  OF THIS ARTICLE. IN ADDITION, TWO HUNDRED THOUSAND
SQUARE FEET OF VACANT LAND OR VACANT BUILDING SPACE AFFILIATED  WITH  OR
IN  PARTNERSHIP WITH MARITIME COLLEGE SHALL BE ELIGIBLE UNDER THIS PARA-
GRAPH. THE AGGREGATE AMOUNT OF QUALIFIED LAND OR SPACE UNDER THIS  PARA-
GRAPH  AND  SUBPARAGRAPH  (III) OF PARAGRAPH (A) OF THIS SUBDIVISION MAY
NOT EXCEED TWO HUNDRED THOUSAND  SQUARE  FEET  FOR  A  STATE  UNIVERSITY
CAMPUS OR COMMUNITY COLLEGE.
  (C) THE PROVISIONS OF PARAGRAPHS (A) AND (B) OF THIS SUBDIVISION SHALL
APPLY ONLY TO:
  (I) A STATE UNIVERSITY CAMPUS OTHER THAN THE FOLLOWING: (A) ANY EMPIRE
STATE COLLEGE CAMPUS EXCEPT FOR THE EMPIRE STATE COLLEGE CAMPUS IN SARA-
TOGA  SPRINGS,  (B)  ANY PROPERTY OF DOWNSTATE MEDICAL CENTER LOCATED IN
NASSAU COUNTY, SUFFOLK COUNTY,  WESTCHESTER  COUNTY  OR  NEW  YORK  CITY
EXCEPT  FOR  PROPERTY  AFFILIATED  WITH  DOWNSTATE  MEDICAL  CENTER THAT
CONSTITUTES A NEW YORK STATE INCUBATOR AS THE TERM IS USED  IN  SUBDIVI-
SION  FOUR OF SECTION FOUR HUNDRED THIRTY-THREE OF THIS ARTICLE, AND (C)
ANY PROPERTY OF THE COLLEGE OF OPTOMETRY OR MARITIME COLLEGE LOCATED  IN
NASSAU COUNTY, SUFFOLK COUNTY, WESTCHESTER COUNTY OR NEW YORK CITY.
  (II)  A  COMMUNITY  COLLEGE, EXCEPT THAT FOR A COMMUNITY COLLEGE WHOSE
MAIN CAMPUS IS IN NEW YORK CITY, PARAGRAPHS (A) AND (B) OF THIS SUBDIVI-
SION SHALL NOT APPLY TO PROPERTY OF SUCH  COMMUNITY  COLLEGE  IN  NASSAU
COUNTY, SUFFOLK COUNTY, WESTCHESTER COUNTY OR NEW YORK CITY.

S. 5884                             5

  (III)  A  TOTAL  OF  FIVE  CITY  UNIVERSITY  CAMPUSES, ONE EACH IN THE
BOROUGHS OF MANHATTAN, BROOKLYN, BRONX, QUEENS AND STATEN ISLAND,  WHICH
WILL  BE  DESIGNATED  BY THE BOARD OF TRUSTEES OF THE CITY UNIVERSITY OF
NEW YORK. THE CAMPUS DESIGNATED IN EACH BOROUGH MUST BE  LOCATED  IN  AN
ECONOMICALLY  DISTRESSED  COMMUNITY.  THE COMMISSIONER SHALL ESTABLISH A
LIST OF ECONOMICALLY DISTRESSED COMMUNITIES  FOR  THE  PURPOSE  OF  THIS
DESIGNATION,  BASED ON CRITERIA INDICATIVE OF ECONOMIC DISTRESS, INCLUD-
ING POVERTY RATES, NUMBERS OF PERSONS RECEIVING PUBLIC ASSISTANCE, UNEM-
PLOYMENT RATES, AND SUCH OTHER  INDICATORS  AS  THE  COMMISSIONER  DEEMS
APPROPRIATE  TO  BE  IN  NEED OF ECONOMIC ASSISTANCE. IN ADDITION, PARA-
GRAPHS (A) AND (B) OF THIS SUBDIVISION SHALL APPLY TO  PROPERTY  OF  THE
CITY  UNIVERSITY LOCATED OUTSIDE OF NASSAU COUNTY, SUFFOLK COUNTY, WEST-
CHESTER COUNTY AND NEW YORK CITY.
  (D) THE ELIGIBLE LAND OF A STATE UNIVERSITY CAMPUS, COMMUNITY COLLEGE,
OR CITY UNIVERSITY CAMPUS WILL ALSO  INCLUDE  ELIGIBLE  LAND  DESIGNATED
UNDER PARAGRAPH (C) OF SUBDIVISION TWO OF THIS SECTION.
  2.  PRIVATE COLLEGES AND UNIVERSITIES AND CERTAIN OTHER CAMPUSES.  (A)
SUBJECT TO THE LIMITATIONS IN PARAGRAPH (C)  OF  THIS  SUBDIVISION,  THE
FOLLOWING  WILL  CONSTITUTE  THE  ELIGIBLE  LAND OF A PRIVATE COLLEGE OR
UNIVERSITY:
  (I) ANY VACANT SPACE IN ANY BUILDING LOCATED ON A CAMPUS OF A  PRIVATE
UNIVERSITY  OR  COLLEGE  OTHER  THAN A CAMPUS WHICH IS LOCATED IN NASSAU
COUNTY, SUFFOLK COUNTY, WESTCHESTER COUNTY OR NEW YORK CITY;
  (II) ANY VACANT LAND ON A CAMPUS OF A PRIVATE  UNIVERSITY  OR  COLLEGE
OTHER  THAN  A CAMPUS WHICH IS LOCATED IN NASSAU COUNTY, SUFFOLK COUNTY,
WESTCHESTER COUNTY OR NEW YORK CITY;
  (III) ANY VACANT LAND OR VACANT SPACE  IN  A  BUILDING  WHICH  IS  NOT
LOCATED IN NASSAU COUNTY, SUFFOLK COUNTY, WESTCHESTER COUNTY OR NEW YORK
CITY; AND
  (IV)  A  NEW  YORK  STATE INCUBATOR AS THE TERM IS USED IN SUBDIVISION
FOUR OF SECTION FOUR HUNDRED THIRTY-THREE OF THIS ARTICLE  WITH  A  BONA
FIDE  AFFILIATION TO THE PRIVATE UNIVERSITY OR COLLEGE, WITH APPROVAL OF
THE COMMISSIONER.  IN ORDER FOR THERE TO BE A BONA FIDE AFFILIATION OF A
NEW YORK STATE INCUBATOR WITH A PRIVATE UNIVERSITY OR COLLEGE, THE INCU-
BATOR AND THE PRIVATE UNIVERSITY OR COLLEGE MUST HAVE A  PARTNERSHIP  TO
PROVIDE ASSISTANCE AND PHYSICAL SPACE TO ELIGIBLE BUSINESSES AS THE TERM
IS  USED  IN SECTION SIXTEEN-V OF THE URBAN DEVELOPMENT CORPORATION ACT;
THE INCUBATOR AND THE PRIVATE UNIVERSITY OR COLLEGE MUST  DIRECTLY  WORK
TOWARDS  THE  GOALS  OF JOINTLY CREATING JOBS AND INCUBATING NEW STARTUP
BUSINESSES; AND THE MISSION AND ACTIVITIES OF THE INCUBATOR  MUST  ALIGN
WITH  OR  FURTHER  THE  ACADEMIC  MISSION  OF  THE PRIVATE UNIVERSITY OR
COLLEGE.
  (B) SUBJECT TO THE LIMITATIONS IN PARAGRAPH (C) OF  THIS  SUBDIVISION,
THREE MILLION SQUARE FEET IS THE MAXIMUM AGGREGATE AMOUNT OF TAX-FREE NY
AREAS OF PRIVATE UNIVERSITIES AND COLLEGES THAT MAY BE UTILIZED FOR THIS
PROGRAM,  WHICH  SHALL  BE  DESIGNATED IN A MANNER THAT ENSURES REGIONAL
BALANCE AND BALANCE AMONG ELIGIBLE RURAL, URBAN AND  SUBURBAN  AREAS  IN
THE  STATE.  THE COMMISSIONER SHALL MAINTAIN AN ACCOUNTING OF THE VACANT
LAND AND SPACE OF PRIVATE  UNIVERSITIES  AND  COLLEGES  THAT  HAVE  BEEN
APPROVED  AS TAX-FREE NY AREAS AND SHALL STOP ACCEPTING APPLICATIONS FOR
APPROVAL OF TAX-FREE NY AREAS WHEN THAT MAXIMUM AMOUNT HAS BEEN REACHED.
  (C) OF THE MAXIMUM AGGREGATE AMOUNT IN PARAGRAPH (B) OF THIS  SUBDIVI-
SION,  AN  INITIAL  AMOUNT OF SEVENTY-FIVE THOUSAND SQUARE FEET SHALL BE
DESIGNATED AS TAX-FREE NY AREAS IN EACH OF THE FOLLOWING: NASSAU COUNTY,
SUFFOLK COUNTY, WESTCHESTER COUNTY AND THE BOROUGHS OF BROOKLYN,  BRONX,
MANHATTAN,  QUEENS  AND STATEN ISLAND.  THE BOARD MAY APPROVE THE DESIG-

S. 5884                             6

NATION OF UP TO AN ADDITIONAL SEVENTY-FIVE THOUSAND SQUARE FEET FOR  ANY
COUNTY  OR BOROUGH THAT REACHES THE INITIAL SEVENTY-FIVE THOUSAND SQUARE
FOOT LIMIT, PROVIDED THAT SUCH ADDITIONAL SEVENTY-FIVE  THOUSAND  SQUARE
FEET SHALL NOT COUNT AGAINST THE SQUARE FOOTAGE LIMITATIONS IN PARAGRAPH
(B)  OF THIS SUBDIVISION.  VACANT LAND AND VACANT SPACE IN A BUILDING ON
THE CAMPUS OF THE FOLLOWING SHALL BE ELIGIBLE FOR DESIGNATION UNDER THIS
PARAGRAPH:
  (I) A PRIVATE UNIVERSITY OR COLLEGE WHICH CAMPUS IS LOCATED IN  NASSAU
COUNTY, SUFFOLK COUNTY, WESTCHESTER COUNTY OR NEW YORK CITY.
  (II)  A  STATE UNIVERSITY CAMPUS THAT MEETS THE CRITERIA OF CLAUSE (B)
OR (C) OF SUBPARAGRAPH (I) OF PARAGRAPH (C) OF SUBDIVISION ONE  OF  THIS
SECTION.
  (III) A COMMUNITY COLLEGE WHOSE MAIN CAMPUS IS IN NEW YORK CITY.
  (IV)  A  CITY  UNIVERSITY CAMPUS THAT IS NOT DESIGNATED UNDER SUBPARA-
GRAPH (III) OF PARAGRAPH (C) OF SUBDIVISION ONE OF THIS SECTION.
  (D) IN ADDITION, THE BOARD  MAY  APPROVE:  (I)  ONE  APPLICATION  THAT
INCLUDES  ELIGIBLE LAND OWNED OR LEASED BY A CITY UNIVERSITY CAMPUS THAT
IS DIRECTLY ADJACENT TO SUCH CAMPUS; (II) ONE APPLICATION THAT  INCLUDES
ELIGIBLE  LAND  OWNED  OR LEASED BY A STATE UNIVERSITY CAMPUS, COMMUNITY
COLLEGE, OR PRIVATE UNIVERSITY OR COLLEGE IN NASSAU  COUNTY  OR  SUFFOLK
COUNTY  THAT IS DIRECTLY ADJACENT TO SUCH CAMPUS, UNIVERSITY OR COLLEGE;
AND (III) ONE APPLICATION THAT INCLUDES ELIGIBLE LAND OWNED OR LEASED BY
A STATE UNIVERSITY CAMPUS, COMMUNITY COLLEGE, OR PRIVATE  UNIVERSITY  OR
COLLEGE  IN WESTCHESTER COUNTY THAT IS DIRECTLY ADJACENT TO SUCH CAMPUS,
UNIVERSITY OR COLLEGE.  THE BOARD MAY APPROVE AN ADDITIONAL APPLICATION,
FOR A STATE UNIVERSITY CAMPUS, COMMUNITY COLLEGE, OR PRIVATE  UNIVERSITY
OR COLLEGE IN THE COUNTY NOT PREVIOUSLY APPROVED UNDER SUBPARAGRAPH (II)
OF THIS PARAGRAPH, IN WHICH CASE IT SHALL ALSO APPROVE A SECOND APPLICA-
TION UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH.
  3.  PROHIBITION.  A STATE UNIVERSITY CAMPUS, COMMUNITY COLLEGE OR CITY
UNIVERSITY CAMPUS IS  PROHIBITED  FROM  RELOCATING  OR  ELIMINATING  ANY
ACADEMIC PROGRAMS, ANY ADMINISTRATIVE PROGRAMS, OFFICES, HOUSING FACILI-
TIES,  DINING  FACILITIES,  ATHLETIC  FACILITIES, OR ANY OTHER FACILITY,
SPACE OR PROGRAM THAT ACTIVELY SERVES  STUDENTS,  FACULTY  OR  STAFF  IN
ORDER  TO  CREATE  VACANT  LAND  OR SPACE TO BE UTILIZED FOR THE PROGRAM
AUTHORIZED BY THIS ARTICLE. IN ADDITION, NOTHING IN THIS  ARTICLE  SHALL
BE  DEEMED TO WAIVE OR IMPAIR ANY RIGHTS OR BENEFITS OF EMPLOYEES OF THE
STATE UNIVERSITY OF NEW YORK, A COMMUNITY COLLEGE OR THE CITY UNIVERSITY
OF NEW YORK THAT OTHERWISE WOULD BE AVAILABLE TO THEM  PURSUANT  TO  THE
TERMS  OF  AGREEMENTS  BETWEEN  THE  CERTIFIED  REPRESENTATIVES  OF SUCH
EMPLOYEES AND THEIR EMPLOYERS PURSUANT TO ARTICLE FOURTEEN OF THE  CIVIL
SERVICE LAW. NO SERVICES OR WORK CURRENTLY PERFORMED BY PUBLIC EMPLOYEES
OF  THE  STATE  UNIVERSITY OF NEW YORK, A COMMUNITY COLLEGE, OR THE CITY
UNIVERSITY OF NEW YORK OR FUTURE WORK  THAT  IS  SIMILAR  IN  SCOPE  AND
NATURE  TO  THE WORK BEING CURRENTLY PERFORMED BY PUBLIC EMPLOYEES SHALL
BE CONTRACTED OUT OR PRIVATIZED BY THE STATE UNIVERSITY OF NEW  YORK,  A
COMMUNITY COLLEGE OR THE CITY UNIVERSITY OF NEW YORK OR BY AN AFFILIATED
ENTITY  OR  ASSOCIATED  ENTITY  OF  THE  STATE UNIVERSITY OF NEW YORK, A
COMMUNITY COLLEGE OR THE CITY UNIVERSITY OF NEW YORK. FOR THE PURPOSE OF
THIS SECTION, AN  AFFILIATED  ENTITY  OR  ASSOCIATED  ENTITY  SHALL  NOT
INCLUDE A BUSINESS THAT IS PARTICIPATING IN THE START-UP NY PROGRAM.
  S 433. ELIGIBILITY CRITERIA FOR BUSINESSES. 1. IN ORDER TO PARTICIPATE
IN THE START-UP NY PROGRAM, A BUSINESS MUST SATISFY ALL OF THE FOLLOWING
CRITERIA.
  (A)  THE  MISSION  AND  ACTIVITIES  OF THE BUSINESS MUST ALIGN WITH OR
FURTHER THE ACADEMIC MISSION OF THE CAMPUS, COLLEGE OR UNIVERSITY  SPON-

S. 5884                             7

SORING  THE  TAX-FREE NY AREA IN WHICH IT SEEKS TO LOCATE, AND THE BUSI-
NESS'S PARTICIPATION IN THE  START-UP  NY  PROGRAM  MUST  HAVE  POSITIVE
COMMUNITY AND ECONOMIC BENEFITS.
  (B)  THE  BUSINESS MUST DEMONSTRATE THAT IT WILL, IN ITS FIRST YEAR OF
OPERATION, CREATE NET NEW JOBS.  AFTER ITS FIRST YEAR OF OPERATION,  THE
BUSINESS MUST MAINTAIN NET NEW JOBS.  IN ADDITION, THE AVERAGE NUMBER OF
EMPLOYEES  OF  THE  BUSINESS AND ITS RELATED PERSONS IN THE STATE DURING
THE YEAR MUST EQUAL OR EXCEED THE SUM OF:  (I)  THE  AVERAGE  NUMBER  OF
EMPLOYEES  OF  THE  BUSINESS AND ITS RELATED PERSONS IN THE STATE DURING
THE YEAR IMMEDIATELY PRECEDING THE YEAR IN WHICH  THE  BUSINESS  SUBMITS
ITS  APPLICATION  TO LOCATE IN A TAX-FREE NY AREA; AND (II) NET NEW JOBS
OF THE BUSINESS IN THE TAX-FREE NY AREA DURING THE YEAR.    THE  AVERAGE
NUMBER OF EMPLOYEES OF THE BUSINESS AND ITS RELATED PERSONS IN THE STATE
SHALL  BE DETERMINED BY ADDING TOGETHER THE TOTAL NUMBER OF EMPLOYEES OF
THE BUSINESS AND ITS RELATED PERSONS IN THE STATE ON MARCH THIRTY-FIRST,
JUNE THIRTIETH, SEPTEMBER THIRTIETH AND DECEMBER THIRTY-FIRST AND DIVID-
ING THE TOTAL BY THE NUMBER OF SUCH DATES OCCURRING WITHIN SUCH YEAR.
  (C) EXCEPT AS PROVIDED IN PARAGRAPHS (G) AND (H) OF THIS  SUBDIVISION,
AT  THE TIME IT SUBMITS ITS APPLICATION FOR THE START-UP NY PROGRAM, THE
BUSINESS MUST BE A NEW BUSINESS TO THE STATE.
  (D) THE BUSINESS MAY BE ORGANIZED AS  A  CORPORATION,  A  PARTNERSHIP,
LIMITED LIABILITY COMPANY OR A SOLE PROPRIETORSHIP.
  (E)  UPON  COMPLETION OF ITS FIRST YEAR IN THE START-UP NY PROGRAM AND
THEREAFTER, THE BUSINESS MUST COMPLETE AND TIMELY FILE THE ANNUAL REPORT
REQUIRED UNDER SECTION FOUR HUNDRED THIRTY-EIGHT OF THIS ARTICLE.
  (F) EXCEPT AS PROVIDED IN PARAGRAPHS (G) AND (H) OF THIS  SUBDIVISION,
THE BUSINESS MUST NOT BE ENGAGED IN A LINE OF BUSINESS THAT IS CURRENTLY
OR  WAS  PREVIOUSLY CONDUCTED BY THE BUSINESS OR A RELATED PERSON IN THE
LAST FIVE YEARS IN NEW YORK STATE.
  (G) IF A BUSINESS DOES NOT SATISFY THE ELIGIBILITY STANDARD SET  FORTH
IN  PARAGRAPH  (C)  OR  (F) OF THIS SUBDIVISION, BECAUSE AT ONE POINT IN
TIME IT OPERATED IN NEW YORK STATE BUT MOVED ITS OPERATIONS OUT  OF  NEW
YORK  STATE  ON OR BEFORE JUNE FIRST, TWO THOUSAND THIRTEEN, THE COMMIS-
SIONER SHALL GRANT THAT BUSINESS PERMISSION TO APPLY TO  PARTICIPATE  IN
THE START-UP NY PROGRAM IF THE COMMISSIONER DETERMINES THAT THE BUSINESS
HAS DEMONSTRATED THAT IT WILL SUBSTANTIALLY RESTORE THE JOBS IN NEW YORK
STATE THAT IT PREVIOUSLY HAD MOVED OUT OF STATE.
  (H)  IF  A BUSINESS SEEKS TO EXPAND ITS CURRENT OPERATIONS IN NEW YORK
STATE INTO A TAX-FREE NY AREA BUT THE BUSINESS DOES NOT QUALIFY AS A NEW
BUSINESS BECAUSE IT DOES NOT SATISFY THE CRITERIA IN  PARAGRAPH  (C)  OF
SUBDIVISION  SIX  OF  SECTION FOUR HUNDRED THIRTY-ONE OF THIS ARTICLE OR
THE BUSINESS DOES NOT SATISFY THE  ELIGIBILITY  STANDARD  SET  FORTH  IN
PARAGRAPH  (F)  OF  THIS  SUBDIVISION,  THE COMMISSIONER SHALL GRANT THE
BUSINESS PERMISSION TO APPLY TO PARTICIPATE IN THE START-UP  NY  PROGRAM
IF  THE  COMMISSIONER DETERMINES THAT THE BUSINESS HAS DEMONSTRATED THAT
IT WILL CREATE NET NEW JOBS IN THE TAX-FREE NY AREA AND THAT IT  OR  ANY
RELATED  PERSON  HAS  NOT ELIMINATED ANY JOBS IN THE STATE IN CONNECTION
WITH THIS EXPANSION.
  2. THE FOLLOWING TYPES OF BUSINESSES ARE PROHIBITED FROM PARTICIPATING
IN THE START-UP NY PROGRAM.
  (A) RETAIL AND WHOLESALE BUSINESSES;
  (B) RESTAURANTS;
  (C) REAL ESTATE BROKERS;
  (D) LAW FIRMS;
  (E) MEDICAL OR DENTAL PRACTICES;
  (F) REAL ESTATE MANAGEMENT COMPANIES;

S. 5884                             8

  (G) HOSPITALITY;
  (H) FINANCE AND FINANCIAL SERVICES;
  (I) BUSINESSES PROVIDING PERSONAL SERVICES;
  (J)  BUSINESSES PROVIDING BUSINESS ADMINISTRATIVE OR SUPPORT SERVICES,
UNLESS SUCH BUSINESS HAS RECEIVED PERMISSION FROM  THE  COMMISSIONER  TO
APPLY  TO PARTICIPATE IN THE START-UP NY PROGRAM UPON DEMONSTRATION THAT
THE BUSINESS WOULD CREATE NO FEWER THAN ONE HUNDRED NET NEW JOBS IN  THE
TAX-FREE NY AREA;
  (K) ACCOUNTING FIRMS;
  (L) BUSINESSES PROVIDING UTILITIES; AND
  (M)  BUSINESSES ENGAGED IN THE GENERATION OR DISTRIBUTION OF ELECTRIC-
ITY, THE DISTRIBUTION OF NATURAL GAS, OR THE PRODUCTION OF STEAM ASSOCI-
ATED WITH THE GENERATION OF ELECTRICITY.
  2-A. ADDITIONAL ELIGIBILITY REQUIREMENTS  IN  NASSAU  COUNTY,  SUFFOLK
COUNTY, WESTCHESTER COUNTY AND NEW YORK CITY. IN ORDER TO BE ELIGIBLE TO
PARTICIPATE IN THE START-UP NY PROGRAM IN NASSAU COUNTY, SUFFOLK COUNTY,
WESTCHESTER COUNTY OR NEW YORK CITY, A BUSINESS MUST BE:
  (A) IN THE FORMATIVE STAGE OF DEVELOPMENT; OR
  (B)  ENGAGED  IN  THE  DESIGN,  DEVELOPMENT,  AND  INTRODUCTION OF NEW
BIOTECHNOLOGY, INFORMATION TECHNOLOGY, REMANUFACTURING, ADVANCED MATERI-
ALS, PROCESSING, ENGINEERING OR ELECTRONIC  TECHNOLOGY  PRODUCTS  AND/OR
INNOVATIVE MANUFACTURING PROCESSES, AND MEET SUCH OTHER REQUIREMENTS FOR
A HIGH-TECH BUSINESS AS THE COMMISSIONER SHALL DEVELOP.
  3.  A  BUSINESS  MUST  BE IN COMPLIANCE WITH ALL WORKER PROTECTION AND
ENVIRONMENTAL LAWS AND REGULATIONS. IN ADDITION, A BUSINESS MAY NOT  OWE
PAST DUE FEDERAL OR STATE TAXES OR LOCAL PROPERTY TAXES.
  4.  ANY  BUSINESS  THAT  HAS SUCCESSFULLY COMPLETED RESIDENCY IN A NEW
YORK STATE INCUBATOR PURSUANT TO SECTION SIXTEEN-V  OF  SECTION  ONE  OF
CHAPTER  ONE HUNDRED SEVENTY-FOUR OF THE LAWS OF NINETEEN HUNDRED SIXTY-
EIGHT CONSTITUTING THE URBAN DEVELOPMENT  CORPORATION  ACT,  SUBJECT  TO
APPROVAL  OF  THE COMMISSIONER, MAY APPLY TO PARTICIPATE IN THE START-UP
NY PROGRAM PROVIDED THAT SUCH BUSINESS LOCATES IN A  TAX-FREE  NY  AREA,
NOTWITHSTANDING  THE  FACT  THAT  THE  BUSINESS MAY NOT CONSTITUTE A NEW
BUSINESS.
  S 434. TAX BENEFITS. 1. A BUSINESS THAT IS ACCEPTED INTO THE  START-UP
NY  PROGRAM AND LOCATES IN A TAX-FREE NY AREA OR THE OWNER OF A BUSINESS
THAT IS ACCEPTED INTO THE START-UP NY PROGRAM AND LOCATES IN A  TAX-FREE
NY   AREA  IS  ELIGIBLE  FOR  THE  TAX  BENEFITS  SPECIFIED  IN  SECTION
THIRTY-NINE OF THE TAX LAW. SUBJECT TO THE  LIMITATIONS  OF  SUBDIVISION
TWO OF THIS SECTION, EMPLOYEES OF SUCH BUSINESS SATISFYING THE ELIGIBIL-
ITY  REQUIREMENTS  SPECIFIED IN SECTION THIRTY-NINE OF THE TAX LAW SHALL
BE ELIGIBLE FOR THE PERSONAL  INCOME  TAX  BENEFITS  DESCRIBED  IN  SUCH
SECTION  IN  A MANNER TO BE DETERMINED BY THE DEPARTMENT OF TAXATION AND
FINANCE.
  2. THE AGGREGATE NUMBER OF NET NEW JOBS APPROVED FOR  PERSONAL  INCOME
TAX  BENEFITS  UNDER THIS ARTICLE SHALL NOT EXCEED TEN THOUSAND JOBS PER
YEAR DURING THE PERIOD IN WHICH APPLICATIONS ARE  ACCEPTED  PURSUANT  TO
SECTION FOUR HUNDRED THIRTY-SIX OF THIS ARTICLE.  THE COMMISSIONER SHALL
ALLOCATE  TO  EACH  BUSINESS  ACCEPTED TO LOCATE IN A TAX-FREE NY AREA A
MAXIMUM NUMBER OF NET NEW JOBS THAT SHALL BE ELIGIBLE FOR  THE  PERSONAL
INCOME  TAX BENEFITS DESCRIBED IN SUBDIVISION (E) OF SECTION THIRTY-NINE
OF THE TAX LAW BASED ON THE SCHEDULE OF JOB  CREATION  INCLUDED  IN  THE
APPLICATION  OF  SUCH BUSINESS.  AT SUCH TIME AS THE TOTAL NUMBER OF NET
NEW JOBS UNDER SUCH APPROVED APPLICATIONS REACHES THE APPLICABLE  ALLOW-
ABLE  TOTAL  OF  AGGREGATE NET NEW JOBS FOR TAX BENEFITS FOR THE YEAR IN
WHICH THE APPLICATION IS ACCEPTED, THE COMMISSIONER SHALL STOP  GRANTING

S. 5884                             9

ELIGIBILITY  FOR PERSONAL INCOME TAX BENEFITS FOR NET NEW JOBS UNTIL THE
NEXT YEAR. ANY BUSINESS NOT GRANTED SUCH PERSONAL  INCOME  TAX  BENEFITS
FOR  NET  NEW JOBS FOR SUCH REASON SHALL BE GRANTED SUCH BENEFITS IN THE
NEXT  YEAR PRIOR TO THE CONSIDERATION OF NEW APPLICANTS. IN ADDITION, IF
THE TOTAL NUMBER OF NET NEW JOBS APPROVED FOR TAX BENEFITS IN ANY  GIVEN
YEAR  IS  LESS  THAN  THE  MAXIMUM  ALLOWED  UNDER THIS SUBDIVISION, THE
DIFFERENCE SHALL BE CARRIED OVER TO THE NEXT YEAR. A BUSINESS MAY  AMEND
ITS  SCHEDULE  OF  JOB  CREATION  IN THE SAME MANNER THAT IT APPLIED FOR
PARTICIPATION IN THE START-UP NY PROGRAM, AND ANY INCREASE IN  ELIGIBIL-
ITY  FOR  PERSONAL  INCOME  TAX BENEFITS ON BEHALF OF ADDITIONAL NET NEW
JOBS SHALL BE SUBJECT TO THE LIMITATIONS OF  THIS  SUBDIVISION.  IF  THE
BUSINESS  ACCEPTED  TO LOCATE IN A TAX-FREE NY AREA CREATES MORE NET NEW
JOBS THAN FOR WHICH IT IS ALLOCATED PERSONAL INCOME  TAX  BENEFITS,  THE
PERSONAL  INCOME TAX BENEFITS IT IS ALLOCATED SHALL BE PROVIDED TO THOSE
INDIVIDUALS EMPLOYED IN THOSE NET NEW JOBS BASED ON THE EMPLOYEES' DATES
OF HIRING.
  S 435. APPROVAL OF TAX-FREE NY AREAS. 1. THE PRESIDENT OR CHIEF EXECU-
TIVE OFFICER OF ANY STATE UNIVERSITY CAMPUS, COMMUNITY COLLEGE  OR  CITY
UNIVERSITY CAMPUS SEEKING TO SPONSOR A TAX-FREE NY AREA AND HAVE SOME OF
ITS  ELIGIBLE  LAND  SPECIFIED  UNDER  SUBDIVISION  ONE  OF SECTION FOUR
HUNDRED THIRTY-TWO OF THIS ARTICLE BE DESIGNATED AS A TAX-FREE  NY  AREA
MUST  SUBMIT A PLAN TO THE COMMISSIONER THAT SPECIFIES THE LAND OR SPACE
THE CAMPUS OR COLLEGE WANTS TO INCLUDE, DESCRIBES THE TYPE  OF  BUSINESS
OR  BUSINESSES  THAT  MAY LOCATE ON THAT LAND OR IN THAT SPACE, EXPLAINS
HOW THOSE TYPES OF BUSINESSES ALIGN WITH OR FURTHER THE ACADEMIC MISSION
OF THE CAMPUS OR COLLEGE AND HOW PARTICIPATION BY THOSE TYPES  OF  BUSI-
NESSES  IN  THE  START-UP  NY  PROGRAM WOULD HAVE POSITIVE COMMUNITY AND
ECONOMIC BENEFITS, AND DESCRIBES THE PROCESS THE CAMPUS OR COLLEGE  WILL
FOLLOW TO SELECT PARTICIPATING BUSINESSES. AT LEAST THIRTY DAYS PRIOR TO
SUBMITTING  SUCH  PLAN,  THE  CAMPUS OR COLLEGE MUST PROVIDE THE MUNICI-
PALITY OR MUNICIPALITIES IN WHICH  THE  PROPOSED  TAX-FREE  NY  AREA  IS
LOCATED,  LOCAL  ECONOMIC DEVELOPMENT ENTITIES, THE APPLICABLE CAMPUS OR
COLLEGE FACULTY SENATE, UNION REPRESENTATIVES  AND  THE  CAMPUS  STUDENT
GOVERNMENT  WITH  A  COPY  OF  THE PLAN. IN ADDITION, IF THE PLAN OF THE
CAMPUS OR COLLEGE INCLUDES LAND OR SPACE LOCATED OUTSIDE OF  THE  CAMPUS
BOUNDARIES,  THE CAMPUS OR COLLEGE MUST CONSULT WITH THE MUNICIPALITY OR
MUNICIPALITIES IN WHICH SUCH LAND OR SPACE IS LOCATED PRIOR TO INCLUDING
SUCH SPACE OR LAND IN ITS PROPOSED TAX-FREE NY AREA AND SHALL GIVE PREF-
ERENCE TO UNDERUTILIZED PROPERTIES. BEFORE APPROVING  OR  REJECTING  THE
PLAN  SUBMITTED  BY A STATE UNIVERSITY CAMPUS, COMMUNITY COLLEGE OR CITY
UNIVERSITY CAMPUS, THE COMMISSIONER SHALL CONSULT WITH THE CHANCELLOR OF
THE APPLICABLE UNIVERSITY SYSTEM OR HIS OR HER DESIGNEE.
  2. THE PRESIDENT OR CHIEF EXECUTIVE OFFICER OF ANY PRIVATE COLLEGE  OR
UNIVERSITY  OR OF ANY STATE UNIVERSITY CAMPUS, COMMUNITY COLLEGE OR CITY
UNIVERSITY CAMPUS SEEKING TO SPONSOR A TAX-FREE NY AREA AND HAVE SOME OF
ITS ELIGIBLE LAND  SPECIFIED  UNDER  SUBDIVISION  TWO  OF  SECTION  FOUR
HUNDRED  THIRTY-TWO  OF THIS ARTICLE BE DESIGNATED AS A TAX-FREE NY AREA
MUST SUBMIT A PLAN TO THE COMMISSIONER THAT SPECIFIES THE LAND OR  SPACE
THE  COLLEGE OR UNIVERSITY WANTS TO INCLUDE, DESCRIBES THE TYPE OF BUSI-
NESS OR BUSINESSES THAT MAY LOCATE  ON  THAT  LAND  OR  IN  THAT  SPACE,
EXPLAINS HOW THOSE TYPES OF BUSINESSES ALIGN WITH OR FURTHER THE ACADEM-
IC  MISSION  OF THE COLLEGE OR UNIVERSITY AND HOW PARTICIPATION BY THOSE
TYPES OF BUSINESSES IN THE  START-UP  NY  PROGRAM  WOULD  HAVE  POSITIVE
COMMUNITY AND ECONOMIC BENEFITS, AND DESCRIBES THE PROCESS THE CAMPUS OR
COLLEGE WILL FOLLOW TO SELECT PARTICIPATING BUSINESSES.  IN ADDITION, IF
THE PLAN OF THE CAMPUS OR COLLEGE INCLUDES LAND OR SPACE LOCATED OUTSIDE

S. 5884                            10

OF  THE  CAMPUS  BOUNDARIES, THE CAMPUS OR COLLEGE MUST CONSULT WITH THE
MUNICIPALITY OR MUNICIPALITIES IN WHICH SUCH LAND OR  SPACE  IS  LOCATED
PRIOR  TO  INCLUDING SUCH SPACE OR LAND IN ITS PROPOSED TAX-FREE NY AREA
AND  SHALL NOTIFY LOCAL ECONOMIC DEVELOPMENT ENTITIES.  THE COMMISSIONER
SHALL FORWARD THE PLAN SUBMITTED UNDER THIS SUBDIVISION TO THE  START-UP
NY APPROVAL BOARD. IN EVALUATING SUCH PLANS, THE BOARD SHALL EXAMINE THE
MERITS  OF  EACH PROPOSAL, INCLUDING BUT NOT LIMITED TO, COMPLIANCE WITH
THE PROVISIONS OF THIS  ARTICLE,  REASONABLENESS  OF  THE  ECONOMIC  AND
FISCAL  ASSUMPTIONS  CONTAINED  IN THE APPLICATION AND IN ANY SUPPORTING
DOCUMENTATION AND POTENTIAL OF THE PROPOSED PROJECT TO CREATE NEW  JOBS,
AND,  EXCEPT  FOR PROPOSALS FOR DESIGNATION OF ELIGIBLE LAND UNDER PARA-
GRAPH (C) OF SUBDIVISION TWO OF SECTION FOUR HUNDRED THIRTY-TWO OF  THIS
ARTICLE, SHALL PRIORITIZE FOR ACCEPTANCE AND INCLUSION INTO THE START-UP
NY  PROGRAM  PLANS FOR TAX-FREE NY AREAS IN COUNTIES THAT CONTAIN A CITY
WITH A POPULATION OF ONE HUNDRED THOUSAND OR MORE WITHOUT  A  UNIVERSITY
CENTER AS DEFINED IN SUBDIVISION SEVEN OF SECTION THREE HUNDRED FIFTY OF
THE  EDUCATION LAW ON THE EFFECTIVE DATE OF THIS ARTICLE.  NO PREFERENCE
SHALL BE GIVEN BASED ON THE TIME OF SUBMISSION  OF  THE  PLAN,  PROVIDED
THAT  ANY  SUBMISSION  DEADLINES  ESTABLISHED  BY THE BOARD ARE MET.  IN
ADDITION, THE BOARD SHALL GIVE PREFERENCE TO PRIVATE COLLEGES OR UNIVER-
SITIES THAT INCLUDE UNDERUTILIZED PROPERTIES WITHIN THEIR PROPOSED  TAX-
FREE NY AREAS. THE BOARD BY A MAJORITY VOTE SHALL APPROVE OR REJECT EACH
PLAN FORWARDED TO IT BY THE COMMISSIONER.
  3.  A  CAMPUS,  UNIVERSITY  OR  COLLEGE  MAY  AMEND ITS APPROVED PLAN,
PROVIDED THAT THE CAMPUS, UNIVERSITY OR  COLLEGE  MAY  NOT  VIOLATE  THE
TERMS  OF  ANY LEASE WITH A BUSINESS LOCATED IN THE APPROVED TAX-FREE NY
AREA. IN ADDITION, IF A BUSINESS LOCATED IN A TAX-FREE NY AREA DOES  NOT
HAVE  A LEASE WITH A CAMPUS, UNIVERSITY OR COLLEGE, AND SUCH BUSINESS IS
TERMINATED FROM THE START-UP NY PROGRAM PURSUANT  TO  PARAGRAPH  (B)  OF
SUBDIVISION FOUR OF SECTION FOUR HUNDRED THIRTY-SIX OF THIS ARTICLE, AND
SUBSEQUENTLY  DOES  NOT  RELOCATE  OUTSIDE  OF  THE  TAX-FREE NY AREA, A
CAMPUS, UNIVERSITY OR COLLEGE MAY AMEND ITS APPROVED PLAN TO ALLOCATE AN
AMOUNT OF VACANT LAND OR SPACE EQUAL TO THE AMOUNT OF SPACE OCCUPIED  BY
THE  BUSINESS THAT IS TERMINATED.  THE AMENDMENT MUST BE APPROVED PURSU-
ANT TO THE PROCEDURES AND REQUIREMENTS SET FORTH IN SUBDIVISION  ONE  OR
TWO OF THIS SECTION, WHICHEVER IS APPLICABLE.
  4.  THE  START-UP NY APPROVAL BOARD, BY MAJORITY VOTE, SHALL DESIGNATE
UP TO TWENTY STRATEGIC STATE ASSETS AS TAX-FREE NY AREAS. EACH SHALL  BE
AFFILIATED  WITH  A  STATE  UNIVERSITY  CAMPUS,  CITY UNIVERSITY CAMPUS,
COMMUNITY COLLEGE, OR PRIVATE COLLEGE OR UNIVERSITY AND SUCH DESIGNATION
SHALL REQUIRE THE SUPPORT OF THE AFFILIATED CAMPUS, COLLEGE OR UNIVERSI-
TY.  EACH STRATEGIC STATE ASSET MAY NOT EXCEED A MAXIMUM OF TWO  HUNDRED
THOUSAND  SQUARE FEET OF VACANT LAND OR VACANT BUILDING SPACE DESIGNATED
AS A TAX-FREE NY  AREA.    DESIGNATION  OF  STRATEGIC  STATE  ASSETS  AS
TAX-FREE NY AREAS SHALL NOT COUNT AGAINST ANY SQUARE FOOTAGE LIMITATIONS
IN SECTION FOUR HUNDRED THIRTY-TWO OF THIS ARTICLE.
  5.  THE  COMMISSIONER  SHALL  PROMULGATE REGULATIONS TO EFFECTUATE THE
PURPOSES OF THIS SECTION, INCLUDING, BUT NOT  LIMITED  TO,  ESTABLISHING
THE  PROCESS FOR THE PLAN SUBMISSIONS AND APPROVALS OF TAX-FREE NY AREAS
AND THE ELIGIBILITY CRITERIA THAT WILL BE APPLIED  IN  EVALUATING  THOSE
PLANS.
  S 436. BUSINESSES LOCATING IN TAX-FREE NY AREAS.  1. A CAMPUS, UNIVER-
SITY  OR  COLLEGE  THAT  HAS SPONSORED A TAX-FREE NY AREA (INCLUDING ANY
STRATEGIC STATE ASSET AFFILIATED WITH THE CAMPUS, UNIVERSITY OR COLLEGE)
SHALL SOLICIT AND ACCEPT APPLICATIONS FROM BUSINESSES TO LOCATE IN  SUCH
AREA  THAT  ARE  CONSISTENT  WITH THE PLAN OF SUCH CAMPUS, UNIVERSITY OR

S. 5884                            11

COLLEGE OR STRATEGIC STATE ASSET THAT  HAS  BEEN  APPROVED  PURSUANT  TO
SECTION  FOUR  HUNDRED  THIRTY-FIVE  OF  THIS ARTICLE. ANY BUSINESS THAT
WANTS TO LOCATE IN A TAX-FREE NY AREA MUST SUBMIT AN APPLICATION TO  THE
CAMPUS,  UNIVERSITY  OR COLLEGE WHICH IS SPONSORING THE TAX-FREE NY AREA
BY DECEMBER THIRTY-FIRST, TWO THOUSAND TWENTY.  PRIOR TO SUCH DATE,  THE
COMMISSIONER  SHALL  PREPARE  AN  EVALUATION ON THE EFFECTIVENESS OF THE
START-UP NY PROGRAM AND DELIVER IT TO THE GOVERNOR AND  THE  LEGISLATURE
TO DETERMINE CONTINUED ELIGIBILITY FOR APPLICATION SUBMISSIONS.
  2.  (A) THE SPONSORING CAMPUS, UNIVERSITY OR COLLEGE SHALL PROVIDE THE
APPLICATION AND ALL SUPPORTING DOCUMENTATION OF ANY BUSINESS IT  DECIDES
TO ACCEPT INTO ITS TAX-FREE NY AREA TO THE COMMISSIONER FOR REVIEW. SUCH
APPLICATION  SHALL BE IN A FORM PRESCRIBED BY THE COMMISSIONER AND SHALL
CONTAIN ALL INFORMATION THE  COMMISSIONER  DETERMINES  IS  NECESSARY  TO
PROPERLY EVALUATE THE BUSINESS'S APPLICATION, INCLUDING, BUT NOT LIMITED
TO,  THE  NAME, ADDRESS, AND EMPLOYER IDENTIFICATION NUMBER OF THE BUSI-
NESS; A DESCRIPTION OF THE LAND OR SPACE  THE  BUSINESS  WILL  USE,  THE
TERMS  OF  THE  LEASE  AGREEMENT,  IF APPLICABLE, BETWEEN THE SPONSORING
CAMPUS, UNIVERSITY OR COLLEGE AND THE BUSINESS, AND WHETHER OR  NOT  THE
LAND  OR SPACE BEING USED BY THE BUSINESS IS BEING TRANSFERRED OR SUBLET
TO THE BUSINESS FROM SOME OTHER BUSINESS. THE APPLICATION MUST INCLUDE A
CERTIFICATION BY THE BUSINESS THAT IT  MEETS  THE  ELIGIBILITY  CRITERIA
SPECIFIED  IN SECTION FOUR HUNDRED THIRTY-THREE OF THIS ARTICLE AND WILL
ALIGN WITH OR FURTHER THE ACADEMIC MISSION  OF  THE  SPONSORING  CAMPUS,
COLLEGE  OR  UNIVERSITY,  AND  THAT  THE BUSINESS'S PARTICIPATION IN THE
START-UP NY PROGRAM WILL HAVE POSITIVE COMMUNITY AND ECONOMIC  BENEFITS.
THE  APPLICATION MUST ALSO DESCRIBE WHETHER OR NOT THE BUSINESS COMPETES
WITH OTHER BUSINESSES IN THE SAME COMMUNITY BUT OUTSIDE THE TAX-FREE  NY
AREA. IN ADDITION, THE APPLICATION MUST INCLUDE A DESCRIPTION OF HOW THE
BUSINESS PLANS TO RECRUIT EMPLOYEES FROM THE LOCAL WORKFORCE.
  (B)  THE  COMMISSIONER SHALL REVIEW SUCH APPLICATION AND DOCUMENTATION
WITHIN SIXTY DAYS AND MAY REJECT SUCH APPLICATION UPON  A  DETERMINATION
THAT THE BUSINESS DOES NOT MEET THE ELIGIBILITY CRITERIA IN SECTION FOUR
HUNDRED THIRTY-THREE OF THIS ARTICLE, HAS SUBMITTED AN INCOMPLETE APPLI-
CATION,  HAS FAILED TO COMPLY WITH SUBDIVISION THREE OF THIS SECTION, OR
HAS FAILED TO DEMONSTRATE  THAT  THE  BUSINESS'S  PARTICIPATION  IN  THE
START-UP  NY PROGRAM WILL HAVE POSITIVE COMMUNITY AND ECONOMIC BENEFITS,
WHICH SHALL BE EVALUATED BASED ON FACTORS INCLUDING BUT NOT  LIMITED  TO
WHETHER  OR  NOT THE BUSINESS COMPETES WITH OTHER BUSINESSES IN THE SAME
COMMUNITY BUT OUTSIDE THE TAX-FREE NY AREA AS PROHIBITED BY SECTION FOUR
HUNDRED FORTY OF THIS ARTICLE.  IF THE COMMISSIONER REJECTS SUCH  APPLI-
CATION,  IT  SHALL  PROVIDE  NOTICE  OF SUCH REJECTION TO THE SPONSORING
CAMPUS, UNIVERSITY OR COLLEGE AND BUSINESS. IF THE COMMISSIONER DOES NOT
REJECT SUCH APPLICATION WITHIN SIXTY DAYS, SUCH BUSINESS IS ACCEPTED  TO
LOCATE  IN  SUCH  TAX-FREE NY AREA, AND THE APPLICATION OF SUCH BUSINESS
SHALL CONSTITUTE A CONTRACT BETWEEN SUCH  BUSINESS  AND  THE  SPONSORING
CAMPUS,  UNIVERSITY  OR  COLLEGE.  THE  SPONSORING CAMPUS, UNIVERSITY OR
COLLEGE MUST PROVIDE ACCEPTED BUSINESSES  WITH  DOCUMENTATION  OF  THEIR
ACCEPTANCES  IN  SUCH FORM AS PRESCRIBED BY THE COMMISSIONER OF TAXATION
AND FINANCE WHICH WILL BE USED TO DEMONSTRATE SUCH BUSINESS'S  ELIGIBIL-
ITY  FOR  THE  TAX  BENEFITS SPECIFIED IN SECTION THIRTY-NINE OF THE TAX
LAW.
  (C) IF A STATE UNIVERSITY CAMPUS PROPOSES TO ENTER INTO A LEASE WITH A
BUSINESS FOR ELIGIBLE LAND IN A TAX-FREE NY AREA  WITH  A  TERM  GREATER
THAN  FORTY  YEARS, INCLUDING ANY OPTIONS TO RENEW, OR FOR ELIGIBLE LAND
IN A TAX-FREE NY AREA OF ONE MILLION OR  MORE  SQUARE  FEET,  THE  STATE
UNIVERSITY  CAMPUS,  AT  THE SAME TIME AS THE APPLICATION IS PROVIDED TO

S. 5884                            12

THE COMMISSIONER, ALSO MUST SUBMIT THE LEASE FOR REVIEW TO THE  START-UP
NY  APPROVAL  BOARD. IF THE BOARD DOES NOT DISAPPROVE OF THE LEASE TERMS
WITHIN THIRTY DAYS, THE LEASE IS DEEMED APPROVED.  IF THE  BOARD  DISAP-
PROVES THE LEASE TERMS, THE STATE UNIVERSITY CAMPUS MUST SUBMIT MODIFIED
LEASE TERMS TO THE COMMISSIONER FOR REVIEW. THE COMMISSIONER'S SIXTY DAY
REVIEW  PERIOD  IS  SUSPENDED WHILE THE BOARD IS REVIEWING THE LEASE AND
DURING THE TIME IT TAKES FOR THE STATE UNIVERSITY CAMPUS TO  MODIFY  THE
LEASE TERMS.
  (D) EXCEPT AS OTHERWISE PROVIDED IN THIS ARTICLE, PROPRIETARY INFORMA-
TION OR SUPPORTING DOCUMENTATION SUBMITTED BY A BUSINESS TO A SPONSORING
CAMPUS,  UNIVERSITY OR COLLEGE SHALL ONLY BE UTILIZED FOR THE PURPOSE OF
EVALUATING SUCH BUSINESS'S APPLICATION OR COMPLIANCE WITH THE PROVISIONS
OF THIS ARTICLE AND SHALL NOT BE OTHERWISE  DISCLOSED.  ANY  PERSON  WHO
WILLFULLY  DISCLOSES  SUCH  INFORMATION  TO  A THIRD PARTY FOR ANY OTHER
PURPOSE WHATSOEVER SHALL BE GUILTY OF A MISDEMEANOR.
  3. THE BUSINESS SUBMITTING THE APPLICATION, AS PART  OF  THE  APPLICA-
TION, MUST:
  (A) AGREE TO ALLOW THE DEPARTMENT OF TAXATION AND FINANCE TO SHARE ITS
TAX INFORMATION WITH THE DEPARTMENT AND THE SPONSORING CAMPUS, UNIVERSI-
TY OR COLLEGE;
  (B)  AGREE  TO  ALLOW  THE  DEPARTMENT  OF  LABOR TO SHARE ITS TAX AND
EMPLOYER INFORMATION WITH THE  DEPARTMENT  AND  THE  SPONSORING  CAMPUS,
UNIVERSITY OR COLLEGE;
  (C)  ALLOW  THE  DEPARTMENT  AND ITS AGENTS AND THE SPONSORING CAMPUS,
UNIVERSITY OR COLLEGE ACCESS TO  ANY  AND  ALL  BOOKS  AND  RECORDS  THE
DEPARTMENT  OR  SPONSORING  CAMPUS, UNIVERSITY OR COLLEGE MAY REQUIRE TO
MONITOR COMPLIANCE;
  (D) INCLUDE PERFORMANCE BENCHMARKS, INCLUDING THE NUMBER  OF  NET  NEW
JOBS  THAT  MUST  BE  CREATED, THE SCHEDULE FOR CREATING THOSE JOBS, AND
DETAILS ON JOB TITLES AND EXPECTED SALARIES.  THE APPLICATION MUST SPEC-
IFY THE CONSEQUENCES FOR FAILURE TO MEET SUCH BENCHMARKS, AS  DETERMINED
BY  THE  BUSINESS  AND THE SPONSORING CAMPUS, UNIVERSITY OR COLLEGE: (I)
SUSPENSION OF SUCH BUSINESS'S PARTICIPATION IN THE START-UP  NY  PROGRAM
FOR  ONE OR MORE TAX YEARS AS SPECIFIED IN SUCH APPLICATION; (II) TERMI-
NATION OF SUCH BUSINESS'S PARTICIPATION  IN  THE  START-UP  NY  PROGRAM;
AND/OR  (III)  PROPORTIONAL  RECOVERY  OF TAX BENEFITS AWARDED UNDER THE
START-UP NY PROGRAM AS SPECIFIED IN SECTION THIRTY-NINE OF THE TAX LAW;
  (E) PROVIDE THE FOLLOWING INFORMATION TO THE DEPARTMENT AND SPONSORING
CAMPUS, UNIVERSITY OR COLLEGE UPON REQUEST:
  (I) THE PRIOR THREE YEARS OF FEDERAL AND STATE INCOME OR FRANCHISE TAX
RETURNS, UNEMPLOYMENT INSURANCE QUARTERLY  RETURNS,  REAL  PROPERTY  TAX
BILLS AND AUDITED FINANCIAL STATEMENTS;
  (II)  THE  EMPLOYER  IDENTIFICATION OR SOCIAL SECURITY NUMBERS FOR ALL
RELATED PERSONS TO THE BUSINESS, INCLUDING THOSE OF  ANY  MEMBERS  OF  A
LIMITED LIABILITY COMPANY OR PARTNERS IN A PARTNERSHIP;
  (F)  PROVIDE  A CLEAR AND DETAILED PRESENTATION OF ALL RELATED PERSONS
TO THE BUSINESS TO ASSURE THE DEPARTMENT THAT JOBS ARE NOT BEING SHIFTED
WITHIN THE STATE; AND
  (G) CERTIFY, UNDER PENALTY OF  PERJURY,  THAT  IT  IS  IN  SUBSTANTIAL
COMPLIANCE  WITH ALL ENVIRONMENTAL, WORKER PROTECTION, AND LOCAL, STATE,
AND FEDERAL TAX LAWS, AND THAT IT SATISFIES ALL THE ELIGIBILITY REQUIRE-
MENTS TO PARTICIPATE IN THE START-UP NY PROGRAM.
  4. (A) AT THE CONCLUSION OF THE LEASE TERM OF A LEASE BY THE  SPONSOR-
ING  CAMPUS,  UNIVERSITY  OR COLLEGE TO A BUSINESS OF LAND OR SPACE IN A
TAX-FREE NY AREA OWNED BY THE SPONSORING CAMPUS, UNIVERSITY OR  COLLEGE,
THE  LEASED  LAND  OR SPACE AND ANY IMPROVEMENTS THEREON SHALL REVERT TO

S. 5884                            13

THE SPONSORING CAMPUS,  UNIVERSITY  OR  COLLEGE,  UNLESS  THE  LEASE  IS
RENEWED.
  (B)  IF,  AT ANY TIME, THE SPONSORING CAMPUS, UNIVERSITY OR COLLEGE OR
THE COMMISSIONER DETERMINES THAT A BUSINESS NO LONGER SATISFIES  ANY  OF
THE  ELIGIBILITY CRITERIA SPECIFIED IN SECTION FOUR HUNDRED THIRTY-THREE
OF THIS ARTICLE, THE SPONSORING  CAMPUS,  UNIVERSITY  OR  COLLEGE  SHALL
RECOMMEND  TO  THE  COMMISSIONER  THAT THE COMMISSIONER TERMINATE OR THE
COMMISSIONER ON HIS OR HER OWN INITIATIVE  SHALL  IMMEDIATELY  TERMINATE
SUCH BUSINESS'S PARTICIPATION IN THE START-UP NY PROGRAM.  SUCH BUSINESS
SHALL  BE  NOTIFIED  OF  SUCH  TERMINATION  BY A METHOD WHICH ALLOWS FOR
VERIFICATION OF RECEIPT OF SUCH  TERMINATION  NOTICE.  A  COPY  OF  SUCH
TERMINATION  NOTICE  SHALL  BE  SENT TO THE COMMISSIONER OF TAXATION AND
FINANCE. UPON SUCH TERMINATION, SUCH BUSINESS SHALL NOT BE ELIGIBLE  FOR
THE  TAX  BENEFITS  SPECIFIED  IN SECTION THIRTY-NINE OF THE TAX LAW FOR
THAT OR ANY FUTURE TAXABLE YEAR, CALENDAR QUARTER OR SALES TAX  QUARTER,
ALTHOUGH  EMPLOYEES OF SUCH BUSINESS MAY CONTINUE TO CLAIM THE TAX BENE-
FIT FOR THEIR WAGES DURING THE REMAINDER OF THAT TAXABLE YEAR.  FURTHER,
SUCH  LEASE  OR  CONTRACT  BETWEEN  THE SPONSORING CAMPUS, UNIVERSITY OR
COLLEGE AND SUCH BUSINESS SHALL BE RESCINDED, EFFECTIVE ON THE THIRTIETH
DAY AFTER THE COMMISSIONER MAILED SUCH TERMINATION NOTICE TO SUCH  BUSI-
NESS  AND THE LAND OR SPACE AND ANY IMPROVEMENTS THEREON SHALL REVERT TO
THE SPONSORING CAMPUS, UNIVERSITY OR COLLEGE.
  5. THE COMMISSIONER SHALL PROMULGATE  REGULATIONS  TO  EFFECTUATE  THE
PURPOSES  OF  THIS  SECTION, INCLUDING, BUT NOT LIMITED TO, ESTABLISHING
THE PROCESS FOR THE EVALUATION AND POSSIBLE REJECTION  OF  APPLICATIONS,
THE ELIGIBILITY CRITERIA THAT WILL BE APPLIED IN EVALUATING THOSE APPLI-
CATIONS,  AND  THE PROCESS FOR TERMINATIONS FROM THE START-UP NY PROGRAM
AND ADMINISTRATIVE APPEALS OF SUCH TERMINATIONS.
  S 437. MWBE AND PREVAILING WAGE REQUIREMENTS. 1. FOR  PREVAILING  WAGE
AND  MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES REQUIREMENTS APPLICA-
BLE TO TAX-FREE NY AREAS ON STATE UNIVERSITY CAMPUSES,  CITY  UNIVERSITY
CAMPUSES  AND COMMUNITY COLLEGES, SEE SECTION THREE HUNDRED SIXTY-ONE OF
THE EDUCATION LAW.
  2. ANY CONTRACT TO WHICH A BUSINESS ON A STRATEGIC STATE  ASSET  IN  A
TAX-FREE  NY  AREA  IS A PARTY, AND ANY CONTRACT ENTERED INTO BY A THIRD
PARTY ACTING IN PLACE OF, ON BEHALF OF AND FOR THE BENEFIT OF THE  BUSI-
NESS PURSUANT TO ANY LEASE, PERMIT OR OTHER AGREEMENT BETWEEN SUCH THIRD
PARTY  AND  THE  BUSINESS, FOR THE CONSTRUCTION, RECONSTRUCTION, DEMOLI-
TION, EXCAVATION, REHABILITATION,  REPAIR,  RENOVATION,  ALTERATION,  OR
IMPROVEMENT,  OF A PROJECT, SHALL BE SUBJECT TO ALL OF THE PROVISIONS OF
ARTICLE EIGHT OF THE LABOR LAW, INCLUDING THE ENFORCEMENT OF  PREVAILING
WAGE  REQUIREMENTS  BY  THE  FISCAL OFFICER AS DEFINED IN PARAGRAPH E OF
SUBDIVISION FIVE OF SECTION TWO HUNDRED TWENTY OF THE LABOR LAW  TO  THE
SAME  EXTENT  AS  A  CONTRACT OF THE STATE, AND SHALL BE DEEMED A PUBLIC
WORK FOR PURPOSES OF SUCH ARTICLE.
  3. ANY INDIVIDUAL, PUBLIC CORPORATION  OR  AUTHORITY,  PRIVATE  CORPO-
RATION,  LIMITED LIABILITY COMPANY OR PARTNERSHIP OR OTHER ENTITY ENTER-
ING INTO A CONTRACT, SUBCONTRACT, LEASE, GRANT, BOND, COVENANT OR  OTHER
AGREEMENT  FOR A PROJECT UNDERTAKEN ON A STRATEGIC STATE ASSET IN A TAX-
FREE NY AREA SHALL BE DEEMED A STATE AGENCY AS THAT TERM IS  DEFINED  IN
ARTICLE  FIFTEEN-A  OF  THE  EXECUTIVE  LAW  AND SUCH CONTRACTS SHALL BE
DEEMED STATE CONTRACTS WITHIN THE MEANING OF THAT TERM AS SET  FORTH  IN
SUCH ARTICLE.
  4.  A  BUSINESS  ON  A STRATEGIC STATE ASSET IN A TAX-FREE NY AREA MAY
REQUIRE A CONTRACTOR AWARDED  A  CONTRACT,  SUBCONTRACT,  LEASE,  GRANT,
BOND,  COVENANT OR OTHER AGREEMENT FOR A PROJECT TO ENTER INTO A PROJECT

S. 5884                            14

LABOR AGREEMENT PURSUANT TO SECTION TWO HUNDRED TWENTY-TWO OF THE  LABOR
LAW  DURING  AND  FOR  THE  WORK  INVOLVED  WITH  SUCH PROJECT WHEN SUCH
REQUIREMENT IS PART OF THE BUSINESS'S  REQUEST  FOR  PROPOSALS  FOR  THE
PROJECT  AND WHEN THE BUSINESS DETERMINES THAT THE RECORD SUPPORTING THE
DECISION TO ENTER INTO SUCH AN AGREEMENT ESTABLISHES THAT THE  INTERESTS
UNDERLYING  THE  COMPETITIVE  BIDDING  LAWS  ARE BEST MET BY REQUIRING A
PROJECT LABOR AGREEMENT INCLUDING: OBTAINING THE BEST WORK AT THE LOWEST
POSSIBLE PRICE; PREVENTING FAVORITISM, FRAUD AND CORRUPTION; THE  IMPACT
OF  DELAY;  THE  POSSIBILITY  OF  COST SAVINGS; AND ANY LOCAL HISTORY OF
LABOR UNREST.
  5. FOR THE PURPOSES OF  THIS  SECTION  "PROJECT"  SHALL  MEAN  CAPITAL
IMPROVEMENT  WORK ON A STRATEGIC STATE ASSET TO BE SUBJECT TO ANY LEASE,
TRANSFER OR CONVEYANCE, OTHER THAN CONVEYANCE OF TITLE.    SUCH  CAPITAL
IMPROVEMENT WORK SHALL INCLUDE THE DESIGN, CONSTRUCTION, RECONSTRUCTION,
DEMOLITION,  EXCAVATION,  REHABILITATION, REPAIR, RENOVATION, ALTERATION
OR IMPROVEMENT OF A STRATEGIC STATE ASSET.
  S 438. DISCLOSURE AUTHORIZATION AND  REPORTING  REQUIREMENTS.  1.  THE
COMMISSIONER  AND  THE  DEPARTMENT SHALL DISCLOSE PUBLICLY THE NAMES AND
ADDRESSES OF THE BUSINESSES LOCATED WITHIN A TAX-FREE NY AREA. IN  ADDI-
TION,  THE  COMMISSIONER  AND THE DEPARTMENT SHALL DISCLOSE PUBLICLY AND
INCLUDE IN THE ANNUAL REPORT REQUIRED  UNDER  SUBDIVISION  TWO  OF  THIS
SECTION  SUCH  OTHER  INFORMATION CONTAINED IN SUCH BUSINESSES' APPLICA-
TIONS AND ANNUAL REPORTS, INCLUDING THE PROJECTED NUMBER OF NET NEW JOBS
TO BE CREATED, AS THEY DETERMINE IS RELEVANT AND NECESSARY  TO  EVALUATE
THE SUCCESS OF THIS PROGRAM.
  2. (A) THE COMMISSIONER SHALL PREPARE AN ANNUAL REPORT TO THE GOVERNOR
AND  THE  LEGISLATURE.  SUCH REPORT SHALL INCLUDE THE NUMBER OF BUSINESS
APPLICANTS, NUMBER OF BUSINESSES APPROVED, THE NAMES  AND  ADDRESSES  OF
THE  BUSINESSES LOCATED WITHIN A TAX-FREE NY AREA, TOTAL AMOUNT OF BENE-
FITS DISTRIBUTED, BENEFITS RECEIVED PER BUSINESS, NUMBER OF NET NEW JOBS
CREATED, NET NEW JOBS CREATED PER BUSINESS, NEW INVESTMENT PER BUSINESS,
THE TYPES OF INDUSTRIES REPRESENTED AND SUCH OTHER  INFORMATION  AS  THE
COMMISSIONER  DETERMINES  IS  NECESSARY  TO EVALUATE THE PROGRESS OF THE
START-UP NY PROGRAM.
  (B) ANY BUSINESS LOCATED IN A TAX-FREE NY AREA MUST SUBMIT  AN  ANNUAL
REPORT  TO  THE  COMMISSIONER  IN  A FORM AND AT SUCH TIME AND WITH SUCH
INFORMATION AS PRESCRIBED BY THE COMMISSIONER IN CONSULTATION  WITH  THE
COMMISSIONER  OF  TAXATION AND FINANCE. SUCH INFORMATION SHALL BE SUFFI-
CIENT FOR THE COMMISSIONER AND THE COMMISSIONER OF TAXATION AND  FINANCE
TO:  (I)  MONITOR  THE  CONTINUED  ELIGIBILITY  OF  THE BUSINESS AND ITS
EMPLOYEES TO PARTICIPATE IN THE START-UP NY PROGRAM AND RECEIVE THE  TAX
BENEFITS  DESCRIBED IN SECTION THIRTY-NINE OF THE TAX LAW; (II) EVALUATE
THE PROGRESS OF THE START-UP NY PROGRAM; AND (III)  PREPARE  THE  ANNUAL
REPORT REQUIRED BY PARAGRAPH (A) OF THIS SUBDIVISION. SUCH ANNUAL REPORT
SHALL  ALSO INCLUDE INFORMATION REGARDING THE WAGES PAID DURING THE YEAR
TO ITS EMPLOYEES EMPLOYED IN THE NET NEW JOBS CREATED AND MAINTAINED  IN
THE TAX-FREE NY AREA.
  S  439. CONFLICT OF INTEREST GUIDELINES. 1. EACH CAMPUS, UNIVERSITY OR
COLLEGE PARTICIPATING IN THE START-UP NY PROGRAM SHALL ADOPT A  CONFLICT
OF  INTEREST POLICY.  SUCH CONFLICT OF INTEREST POLICY SHALL PROVIDE, AS
IT RELATES TO THE START-UP NY PROGRAM: (A) AS A GENERAL PRINCIPLE,  THAT
SERVICE AS AN OFFICIAL OF THE CAMPUS, UNIVERSITY OR COLLEGE SHALL NOT BE
USED  AS  A  MEANS  FOR PRIVATE BENEFIT OR INUREMENT FOR THE OFFICIAL, A
RELATIVE THEREOF, OR ANY ENTITY IN WHICH THE OFFICIAL, OR RELATIVE THER-
EOF, HAS A BUSINESS INTEREST; (B) NO OFFICIAL WHO IS A VENDOR OR EMPLOY-
EE OF A VENDOR OF  GOODS  OR  SERVICES  TO  THE  CAMPUS,  UNIVERSITY  OR

S. 5884                            15

COLLEGE,  OR  WHO HAS A BUSINESS INTEREST IN SUCH VENDOR, OR WHOSE RELA-
TIVE HAS A BUSINESS INTEREST IN SUCH VENDOR, SHALL VOTE ON,  OR  PARTIC-
IPATE IN THE ADMINISTRATION BY THE CAMPUS, UNIVERSITY OR COLLEGE, AS THE
CASE  MAY BE, OF ANY TRANSACTION WITH SUCH VENDOR; AND (C) UPON BECOMING
AWARE OF AN ACTUAL OR POTENTIAL CONFLICT OF INTEREST, AN OFFICIAL  SHALL
ADVISE THE PRESIDENT OR CHIEF EXECUTIVE OFFICER OF THE CAMPUS, UNIVERSI-
TY  OR  COLLEGE, AS THE CASE MAY BE, OF HIS OR HER OR A RELATIVE'S BUSI-
NESS INTEREST IN ANY SUCH EXISTING OR PROPOSED VENDOR WITH  THE  CAMPUS,
UNIVERSITY OR COLLEGE. EACH CAMPUS, UNIVERSITY OR COLLEGE SHALL MAINTAIN
A  WRITTEN RECORD OF ALL DISCLOSURES OF ACTUAL OR POTENTIAL CONFLICTS OF
INTEREST MADE PURSUANT TO PARAGRAPH (C) OF THIS SUBDIVISION,  AND  SHALL
REPORT   SUCH   DISCLOSURES,  ON  A  CALENDAR  YEAR  BASIS,  BY  JANUARY
THIRTY-FIRST OF EACH YEAR, TO THE AUDITOR FOR SUCH CAMPUS, UNIVERSITY OR
COLLEGE. THE AUDITOR SHALL FORWARD SUCH REPORTS TO THE COMMISSIONER, WHO
SHALL MAKE PUBLIC SUCH REPORTS.
  2. FOR PURPOSES OF SUCH CONFLICT OF INTEREST POLICIES: (A) AN OFFICIAL
OF A CAMPUS, UNIVERSITY OR COLLEGE HAS A "BUSINESS INTEREST" IN AN ENTI-
TY IF THE INDIVIDUAL:  (I) OWNS OR CONTROLS TEN PERCENT OR MORE  OF  THE
STOCK  OF  THE ENTITY (OR ONE PERCENT IN THE CASE OF AN ENTITY THE STOCK
OF WHICH IS REGULARLY TRADED ON AN ESTABLISHED SECURITIES EXCHANGE);  OR
(II)  SERVES  AS  AN  OFFICER,  DIRECTOR OR PARTNER OF THE ENTITY; (B) A
"RELATIVE" OF AN OFFICIAL OF A CAMPUS, UNIVERSITY OR COLLEGE SHALL  MEAN
ANY PERSON LIVING IN THE SAME HOUSEHOLD AS THE INDIVIDUAL AND ANY PERSON
WHO  IS  A  DIRECT  DESCENDANT  OF THAT INDIVIDUAL'S GRANDPARENTS OR THE
SPOUSE OF SUCH DESCENDANT; AND (C) AN "OFFICIAL" OF A CAMPUS, UNIVERSITY
OR COLLEGE SHALL MEAN AN EMPLOYEE AT THE LEVEL OF DEAN AND ABOVE AS WELL
AS ANY OTHER EMPLOYEE WITH DECISION-MAKING AUTHORITY OVER  THE  START-UP
NY PROGRAM.
  S  440. PROHIBITION OF ANTI-COMPETITIVE BEHAVIOR. A SPONSORING CAMPUS,
UNIVERSITY OR COLLEGE SHALL NOT ACCEPT ANY APPLICATION TO  LOCATE  IN  A
TAX-FREE   NY  AREA  UNDER  SUBDIVISION  ONE  OF  SECTION  FOUR  HUNDRED
THIRTY-SIX OF THIS ARTICLE FROM A BUSINESS THAT WOULD COMPETE WITH OTHER
BUSINESSES IN THE SAME COMMUNITY BUT OUTSIDE THE TAX-FREE NY  AREA,  AND
THE  COMMISSIONER  SHALL REJECT ANY APPLICATION UNDER SUBDIVISION TWO OF
SECTION FOUR HUNDRED THIRTY-SIX OF THIS ARTICLE  UPON  DETERMINING  THAT
THE  BUSINESS  WOULD COMPETE WITH OTHER BUSINESSES IN THE SAME COMMUNITY
BUT OUTSIDE THE TAX-FREE NY  AREA.  THE  COMMISSIONER  SHALL  ISSUE  AND
PROMULGATE SUCH RULES AND REGULATIONS AS ARE NECESSARY TO IMPLEMENT THIS
SECTION.
  S  2.  The  tax  law  is amended by adding a new section 39 to read as
follows:
  S 39. TAX BENEFITS FOR BUSINESSES LOCATED IN  TAX-FREE  NY  AREAS  AND
EMPLOYEES  OF  SUCH BUSINESSES. (A) (1) ANY BUSINESS OR OWNER OF A BUSI-
NESS IN THE CASE OF A BUSINESS TAXED AS A SOLE PROPRIETORSHIP,  PARTNER-
SHIP  OR  NEW  YORK S CORPORATION, THAT IS LOCATED IN A TAX-FREE NY AREA
APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC DEVELOPMENT  LAW
IS  ELIGIBLE  FOR  THE  TAX  BENEFITS  DESCRIBED IN THIS SECTION. UNLESS
OTHERWISE SPECIFIED, SUCH BUSINESS OR OWNER OF SUCH  BUSINESS  SHALL  BE
ELIGIBLE  FOR THESE TAX BENEFITS FOR A PERIOD OF TEN CONSECUTIVE TAXABLE
YEARS, COMMENCING WITH THE TAXABLE YEAR DURING WHICH IT LOCATES  IN  THE
TAX-FREE NY AREA.
  (2)  IN ORDER TO BE ELIGIBLE FOR THESE TAX BENEFITS DURING ANY TAXABLE
YEAR, CALENDAR QUARTER OR SALES  TAX  QUARTER,  SUCH  BUSINESS  MUST  BE
APPROVED  TO PARTICIPATE IN THE START-UP NY PROGRAM, MUST OPERATE AT THE
APPROVED LOCATION IN THE TAX-FREE NY AREA, AND MUST SATISFY  THE  ELIGI-

S. 5884                            16

BILITY CRITERIA SPECIFIED IN PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION
FOUR HUNDRED THIRTY-THREE OF THE ECONOMIC DEVELOPMENT LAW.
  (B) TAX-FREE NY AREA ELIMINATION CREDIT. SUCH BUSINESS OR THE OWNER OF
SUCH BUSINESS SHALL BE ELIGIBLE FOR THE TAX-FREE NY AREA TAX ELIMINATION
CREDIT DESCRIBED IN SECTION FORTY OF THIS ARTICLE.
  (C)  ORGANIZATION TAX AND LICENSE AND MAINTENANCE FEES. SUCH BUSINESS,
IF LOCATED EXCLUSIVELY IN A TAX-FREE NY AREA, SHALL BE EXEMPT  FROM  THE
ORGANIZATION  TAX IMPOSED UNDER SECTION ONE HUNDRED EIGHTY OF THIS CHAP-
TER OR THE LICENSE  AND  MAINTENANCE  FEES  IMPOSED  UNDER  SECTION  ONE
HUNDRED EIGHTY-ONE OF THIS CHAPTER, WHICHEVER IS APPLICABLE.
  (D) METROPOLITAN COMMUTER TRANSPORTATION DISTRICT MOBILITY TAX. IF THE
TAX-FREE  NY AREA AT WHICH SUCH BUSINESS IS LOCATED IS WITHIN THE METRO-
POLITAN COMMUTER TRANSPORTATION DISTRICT (MCTD), AND SUCH BUSINESS IS AN
EMPLOYER ENGAGED IN BUSINESS WITHIN THE MCTD,  THE  PAYROLL  EXPENSE  OF
SUCH  BUSINESS  AT  SUCH  LOCATION  WITHIN THE TAX-FREE NY AREA SHALL BE
EXEMPT FROM THE METROPOLITAN COMMUTER TRANSPORTATION  DISTRICT  MOBILITY
TAX IMPOSED UNDER ARTICLE TWENTY-THREE OF THIS CHAPTER FOR FORTY CONSEC-
UTIVE  CALENDAR  QUARTERS,  COMMENCING  WITH THE CALENDAR QUARTER DURING
WHICH THE EMPLOYER LOCATES IN THE TAX-FREE NY AREA WITHIN THE  MCTD.  IF
THE  TAX-FREE  NY  AREA  AT WHICH SUCH BUSINESS IS LOCATED IS WITHIN THE
MCTD AND THE OWNER OF SUCH BUSINESS IS AN INDIVIDUAL WHO HAS  NET  EARN-
INGS  FROM  SELF-EMPLOYMENT AT SUCH LOCATION, SUCH NET EARNINGS SHALL BE
EXEMPT FROM THE METROPOLITAN COMMUTER TRANSPORTATION  DISTRICT  MOBILITY
TAX  IMPOSED  UNDER ARTICLE TWENTY-THREE OF THIS CHAPTER FOR TEN CONSEC-
UTIVE TAXABLE YEARS COMMENCING WITH THE TAXABLE YEAR  DURING  WHICH  THE
BUSINESS LOCATES IN THE TAX-FREE NY AREA.
  (E)  TO  THE  EXTENT  SPECIFIED,  THE WAGES OF AN INDIVIDUAL WHO IS AN
EMPLOYEE OF SUCH BUSINESS LOCATED WITHIN A  TAX-FREE  NY  AREA  RECEIVED
FROM  SUCH  BUSINESS  FOR  EMPLOYMENT  IN SUCH TAX-FREE NY AREA SHALL BE
ELIGIBLE FOR THE BENEFITS AS PROVIDED  IN  ARTICLE  TWENTY-TWO  OF  THIS
CHAPTER,  THE  NEW  YORK CITY PERSONAL INCOME TAX AS PROVIDED IN ARTICLE
THIRTY OF THIS CHAPTER, THE YONKERS CITY INCOME TAX AS PROVIDED IN ARTI-
CLE THIRTY-A OF THIS CHAPTER, AND THE YONKERS EARNINGS TAX ON  NON-RESI-
DENTS  DURING THE TEN TAXABLE YEAR PERIOD FOR SUCH BUSINESS SPECIFIED IN
SUBDIVISION (A) OF THIS  SECTION,  PROVIDED  THE  REQUIREMENTS  OF  THIS
SUBDIVISION ARE SATISFIED.
  (I)  THE  INDIVIDUAL WHEN EMPLOYED BY SUCH BUSINESS MUST BE ENGAGED IN
WORK PERFORMED EXCLUSIVELY AT THE LOCATION WITHIN THE TAX-FREE  NY  AREA
DURING THE TAXABLE YEAR.
  (II)  THE INDIVIDUAL WHEN EMPLOYED BY SUCH BUSINESS MUST BE ENGAGED IN
WORK AT THE LOCATION OF SUCH BUSINESS WITHIN THE TAX-FREE NY AREA FOR AT
LEAST ONE-HALF OF THE TAXABLE YEAR.
  (III) SUCH BUSINESS MUST BE IN COMPLIANCE WITH  THE  REQUIREMENTS  SET
FORTH IN SUBDIVISION (A) OF THIS SECTION.
  (IV) THE INDIVIDUAL MUST BE EMPLOYED BY SUCH BUSINESS IN A NET NEW JOB
CREATED BY SUCH BUSINESS IN THE TAX-FREE NY AREA.
  (F) SALES AND USE TAX. SUCH BUSINESS SHALL BE ELIGIBLE FOR A CREDIT OR
REFUND  FOR  SALES  AND USE TAXES IMPOSED ON THE RETAIL SALE OF TANGIBLE
PERSONAL PROPERTY OR SERVICES UNDER SUBDIVISIONS (A), (B),  AND  (C)  OF
SECTION ELEVEN HUNDRED FIVE AND SECTION ELEVEN HUNDRED TEN OF THIS CHAP-
TER AND SIMILAR TAXES IMPOSED PURSUANT TO THE AUTHORITY OF ARTICLE TWEN-
TY-NINE  OF  THIS CHAPTER. THE CREDIT OR REFUND SHALL BE ALLOWED FOR ONE
HUNDRED TWENTY CONSECUTIVE MONTHS BEGINNING WITH THE MONTH DURING  WHICH
SUCH BUSINESS LOCATES IN THE TAX-FREE NY AREA.

S. 5884                            17

  (G) REAL ESTATE TRANSFER TAXES. ANY LEASE OF PROPERTY TO SUCH BUSINESS
SHALL BE EXEMPT FROM ANY STATE OR LOCAL REAL ESTATE TRANSFER TAX OR REAL
PROPERTY TRANSFER TAX.
  (H) (A) NOTWITHSTANDING ANY PROVISION OF THIS CHAPTER TO THE CONTRARY,
THE  COMMISSIONER,  TO THE EXTENT PRACTICABLE, MAY DISCLOSE PUBLICLY THE
NAMES AND ADDRESSES OF THE BUSINESSES RECEIVING ANY OF THE TAX  BENEFITS
SPECIFIED  IN  THIS  SECTION. IN ADDITION, THE COMMISSIONER MAY DISCLOSE
PUBLICLY THE AMOUNTS OF SUCH BENEFITS ALLOWED TO EACH SUCH BUSINESS, AND
WHETHER OR NOT A BUSINESS CREATED OR MAINTAINED NET NEW JOBS DURING  THE
TAXABLE  YEAR.  WITH  REGARD  TO  THE  INCOME TAX EXEMPTION SPECIFIED IN
SUBDIVISION (E) OF THIS SECTION, THE COMMISSIONER MAY PUBLICLY  DISCLOSE
THE  AGGREGATE  AMOUNTS  OF  SUCH TAX EXEMPTION ALLOWED TO EMPLOYEES. IN
ADDITION, THE COMMISSIONER MAY PUBLICLY DISCLOSE THE NUMBER OF  NET  NEW
JOBS  SUCH  BUSINESS  REPORTS  ON  ITS TAX RETURN OR REPORT OR ANY OTHER
INFORMATION NECESSARY FOR THE COMMISSIONER OF  ECONOMIC  DEVELOPMENT  OR
THE  CAMPUS,  COLLEGE  OR  UNIVERSITY  SPONSORING  THE  TAX-FREE NY AREA
APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC DEVELOPMENT  LAW
TO  MONITOR  AND  ENFORCE COMPLIANCE WITH THE LAW, RULES AND REGULATIONS
GOVERNING THE START-UP NY PROGRAM.
  (B) NOTWITHSTANDING ANY PROVISION OF THIS CHAPTER TO THE CONTRARY, THE
COMMISSIONER, IN DETERMINING WHETHER A BUSINESS OR ANY OF ITS OWNERS  IS
ENTITLED  TO THE TAX BENEFITS DESCRIBED IN THIS SECTION, MAY UTILIZE AND
IF NECESSARY, DISCLOSE TO  THE  COMMISSIONER  OF  ECONOMIC  DEVELOPMENT,
INFORMATION  DERIVED  FROM  THE  TAX RETURNS OF SUCH BUSINESS OR RELATED
PERSONS OF SUCH BUSINESS AND WAGE REPORTING INFORMATION RELATING TO  ANY
EMPLOYEES OF SUCH BUSINESS OR ITS RELATED PERSONS.
  (I)  SUCH  BUSINESS SHALL NOT BE ALLOWED TO CLAIM ANY OTHER TAX CREDIT
ALLOWED UNDER THIS CHAPTER WITH RESPECT TO ITS ACTIVITIES  OR  EMPLOYEES
IN SUCH TAX-FREE NY AREA.
  (J) IF THE APPLICATION OF A BUSINESS FOR PARTICIPATION IN THE START-UP
NY  PROGRAM  SPECIFIES  THAT  FAILURE TO MEET THE PERFORMANCE BENCHMARKS
SPECIFIED IN SUCH APPLICATION SHALL RESULT IN PROPORTIONAL  RECOVERY  OF
TAX  BENEFITS  AWARDED UNDER THE START-UP NY PROGRAM, THE BUSINESS SHALL
BE REQUIRED TO REDUCE THE TOTAL AMOUNT OF TAX BENEFITS DESCRIBED IN THIS
SECTION THAT THE BUSINESS OR ITS OWNERS CLAIMED OR RECEIVED  DURING  THE
TAXABLE YEAR BY THE PERCENTAGE REDUCTION IN NET NEW JOBS PROMISED BY THE
PERFORMANCE BENCHMARKS, AND IF THE TAX BENEFITS ARE REDUCED TO AN AMOUNT
LESS  THAN  ZERO, THOSE NEGATIVE AMOUNTS SHALL BE ADDED BACK AS TAX. THE
AMOUNT REQUIRED TO BE ADDED BACK SHALL BE REPORTED  ON  SUCH  BUSINESS'S
CORPORATE  FRANCHISE  TAX  REPORT  IF SUCH BUSINESS IS TAXED AS A CORPO-
RATION OR ON THE CORPORATE FRANCHISE TAX REPORTS OR PERSONAL INCOME  TAX
RETURNS  OF  THE  OWNERS OF SUCH BUSINESS IF SUCH BUSINESS IS TAXED AS A
SOLE PROPRIETORSHIP, PARTNERSHIP OR NEW YORK S CORPORATION.
  (K) CROSS-REFERENCES. FOR APPLICATION OF THE TAX BENEFITS PROVIDED FOR
IN THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
  (1) SECTION 40.
  (2) ARTICLE 9: SECTION 180, SUBDIVISION 3.
  (3) ARTICLE 9: SECTION 181, SUBDIVISION 3.
  (4) ARTICLE 9-A: SECTION 210, SUBDIVISION 47.
  (5) ARTICLE 22: SECTION 606, SUBSECTION (I), PARAGRAPH  (1),  SUBPARA-
GRAPH (B), CLAUSE (XXXVI).
  (6) ARTICLE 22: SECTION 606, SUBSECTION (WW).
  (7) ARTICLE 22: SECTION 612, SUBSECTION (C), PARAGRAPH (40).
  (8) ARTICLE 23: SECTION 803.
  (9) ARTICLE 28: SECTION 1119, SUBDIVISION (D).
  (10) ARTICLE 31: SECTION 1405, SUBDIVISION (B), PARAGRAPH 11.

S. 5884                            18

  S  3.  The  tax law is amended by adding a new section 39-a to read as
follows:
  S 39-A. PENALTIES FOR FRAUD IN THE START-UP NY PROGRAM. IF THE COMMIS-
SIONER  OF  ECONOMIC  DEVELOPMENT ON HIS OR HER OWN INITIATIVE OR ON THE
RECOMMENDATION OF A SPONSORING CAMPUS,  UNIVERSITY  OR  COLLEGE  FINALLY
DETERMINES  THAT  ANY  SUCH  BUSINESS  PARTICIPATING  IN THE START-UP NY
PROGRAM AUTHORIZED UNDER ARTICLE TWENTY-ONE OF THE ECONOMIC  DEVELOPMENT
LAW  HAS ACTED FRAUDULENTLY IN CONNECTION WITH ITS PARTICIPATION IN SUCH
PROGRAM, SUCH BUSINESS:
  (A) SHALL BE IMMEDIATELY TERMINATED FROM SUCH PROGRAM;
  (B) SHALL BE SUBJECT TO APPLICABLE CRIMINAL PENALTIES,  INCLUDING  BUT
NOT  LIMITED  TO  THE  FELONY  CRIME  OF OFFERING A FALSE INSTRUMENT FOR
FILING IN THE FIRST DEGREE PURSUANT TO SECTION 175.35 OF THE PENAL  LAW;
AND
  (C)  SHALL BE REQUIRED IN THAT YEAR TO ADD BACK TO TAX THE TOTAL VALUE
OF THE TAX BENEFITS DESCRIBED IN SECTION  THIRTY-NINE  OF  THIS  ARTICLE
THAT  SUCH BUSINESS HAS RECEIVED AND THAT THE EMPLOYEES OF SUCH BUSINESS
HAVE RECEIVED UP TO THE DATE OF SUCH FINDING. THE AMOUNT REQUIRED TO  BE
ADDED  BACK  SHALL  BE  REPORTED  ON SUCH BUSINESS'S CORPORATE FRANCHISE
REPORT IF SUCH BUSINESS IS TAXED AS A CORPORATION OR  ON  THE  CORPORATE
FRANCHISE  TAX  REPORTS  OR PERSONAL INCOME TAX RETURNS OF THE OWNERS OF
SUCH BUSINESS IF SUCH BUSINESS IS TAXED AS A SOLE PROPRIETORSHIP,  PART-
NERSHIP OR NEW YORK S CORPORATION.
  S  4.  The  tax  law  is amended by adding a new section 40 to read as
follows:
  S 40. THE TAX-FREE NY AREA TAX ELIMINATION CREDIT.  (A)  ALLOWANCE  OF
CREDIT. A TAXPAYER THAT IS A BUSINESS OR OWNER OF A BUSINESS IN THE CASE
OF  A BUSINESS TAXED AS A SOLE PROPRIETORSHIP, PARTNERSHIP OR NEW YORK S
CORPORATION, THAT IS LOCATED IN A TAX-FREE NY AREA APPROVED PURSUANT  TO
ARTICLE TWENTY-ONE OF THE ECONOMIC DEVELOPMENT LAW AND IS SUBJECT TO TAX
UNDER  ARTICLE NINE-A, OR TWENTY-TWO OF THIS CHAPTER, SHALL BE ALLOWED A
CREDIT AGAINST SUCH TAX, PURSUANT TO THE PROVISIONS REFERENCED IN SUBDI-
VISION (E) OF THIS SECTION, TO BE COMPUTED AS HEREINAFTER PROVIDED.
  (B) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL  BE  THE  PRODUCT
OF: (1) THE TAX-FREE AREA ALLOCATION FACTOR; AND (2) THE TAX FACTOR.
  (C)  TAX-FREE  AREA  ALLOCATION  FACTOR.  THE TAX-FREE AREA ALLOCATION
FACTOR SHALL BE THE  PERCENTAGE  REPRESENTING  THE  BUSINESS'S  ECONOMIC
PRESENCE  IN  THE TAX-FREE NY AREA IN WHICH THE BUSINESS WAS APPROVED TO
LOCATE PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC  DEVELOPMENT  LAW.
THIS PERCENTAGE SHALL BE COMPUTED BY:
  (1)  ASCERTAINING  THE  PERCENTAGE THAT THE AVERAGE VALUE OF THE BUSI-
NESS'S REAL AND TANGIBLE PERSONAL PROPERTY, WHETHER OWNED OR  RENTED  TO
IT, IN THE TAX-FREE NY AREA IN WHICH THE BUSINESS WAS LOCATED DURING THE
PERIOD  COVERED  BY THE TAXPAYER'S REPORT OR RETURN BEARS TO THE AVERAGE
VALUE OF THE BUSINESS'S REAL AND  TANGIBLE  PERSONAL  PROPERTY,  WHETHER
OWNED  OR  RENTED  TO  IT, WITHIN THE STATE DURING SUCH PERIOD; PROVIDED
THAT THE TERM "VALUE OF THE BUSINESS'S REAL AND TANGIBLE PERSONAL  PROP-
ERTY"  SHALL  HAVE THE SAME MEANING AS SUCH TERM HAS IN SUBPARAGRAPH ONE
OF PARAGRAPH (A) OF SUBDIVISION THREE OF SECTION TWO HUNDRED TEN OF THIS
CHAPTER; AND
  (2) ASCERTAINING THE PERCENTAGE THAT THE  TOTAL  WAGES,  SALARIES  AND
OTHER  PERSONAL  SERVICE  COMPENSATION,  SIMILARLY COMPUTED, DURING SUCH
PERIOD OF EMPLOYEES, EXCEPT GENERAL EXECUTIVE OFFICERS, EMPLOYED AT  THE
BUSINESS'S  LOCATION  IN THE TAX-FREE NY AREA, BEARS TO THE TOTAL WAGES,
SALARIES AND OTHER PERSONAL SERVICE  COMPENSATION,  SIMILARLY  COMPUTED,

S. 5884                            19

DURING  SUCH  PERIOD,  OF ALL THE BUSINESS'S EMPLOYEES WITHIN THE STATE,
EXCEPT GENERAL EXECUTIVE OFFICERS; AND
  (3)  ADDING  TOGETHER  THE  PERCENTAGES SO DETERMINED AND DIVIDING THE
RESULT BY TWO.
  FOR PURPOSES OF ARTICLE TWENTY-TWO OF THIS CHAPTER, REFERENCES IN THIS
SUBDIVISION TO PROPERTY, WAGES,  SALARIES  AND  OTHER  PERSONAL  SERVICE
COMPENSATION  SHALL  BE  DEEMED TO BE REFERENCES TO SUCH ITEMS CONNECTED
WITH THE CONDUCT OF A BUSINESS.
  (D) TAX FACTOR. (1) GENERAL. THE TAX FACTOR SHALL BE, IN THE  CASE  OF
ARTICLE NINE-A OF THIS CHAPTER, THE LARGEST OF THE AMOUNTS OF TAX DETER-
MINED  FOR THE TAXABLE YEAR UNDER PARAGRAPHS (A) THROUGH (D) OF SUBDIVI-
SION ONE OF SECTION TWO HUNDRED TEN OF SUCH ARTICLE AFTER THE  DEDUCTION
OF  ANY OTHER CREDITS ALLOWABLE UNDER SUCH ARTICLE. THE TAX FACTOR SHALL
BE, IN THE CASE OF ARTICLE TWENTY-TWO OF THIS CHAPTER,  THE  TAX  DETER-
MINED  FOR THE TAXABLE YEAR UNDER SUBSECTIONS (A) THROUGH (D) OF SECTION
SIX HUNDRED ONE OF SUCH ARTICLE AFTER THE DEDUCTION OF ANY OTHER CREDITS
ALLOWABLE UNDER SUCH ARTICLE.
  (2) SOLE PROPRIETORS, PARTNERS AND  S  CORPORATION  SHAREHOLDERS.  (A)
WHERE  THE TAXPAYER IS A SOLE PROPRIETOR OF A BUSINESS LOCATED IN A TAX-
FREE NY AREA, THE TAXPAYER'S TAX FACTOR SHALL BE  THAT  PORTION  OF  THE
AMOUNT DETERMINED IN PARAGRAPH ONE OF THIS SUBDIVISION THAT IS ATTRIBUT-
ABLE  TO  THE  INCOME OF THE BUSINESS AT ITS LOCATION IN THE TAX-FREE NY
AREA. SUCH ATTRIBUTION SHALL BE MADE IN ACCORDANCE WITH THE RATIO OF THE
TAXPAYER'S INCOME FROM SUCH BUSINESS ALLOCATED WITHIN THE STATE,  ENTER-
ING  INTO  NEW  YORK  ADJUSTED  GROSS INCOME, TO THE TAXPAYER'S NEW YORK
ADJUSTED GROSS INCOME, OR IN ACCORDANCE WITH SUCH OTHER METHODS  AS  THE
COMMISSIONER MAY PRESCRIBE AS PROVIDING AN APPORTIONMENT THAT REASONABLY
REFLECTS THE PORTION OF THE TAXPAYER'S TAX ATTRIBUTABLE TO THE INCOME OF
SUCH  BUSINESS.  IN NO EVENT MAY THE RATIO SO DETERMINED EXCEED 1.0. THE
INCOME FROM SUCH BUSINESS ALLOCATED WITHIN THE STATE SHALL BE DETERMINED
AS IF THE SOLE PROPRIETOR WAS A NON-RESIDENT.
  (B)(I) WHERE THE TAXPAYER IS A MEMBER OF A PARTNERSHIP THAT IS A BUSI-
NESS LOCATED IN A TAX-FREE NY AREA, THE TAXPAYER'S TAX FACTOR  SHALL  BE
THAT  PORTION OF THE AMOUNT DETERMINED IN PARAGRAPH ONE OF THIS SUBDIVI-
SION THAT IS ATTRIBUTABLE TO THE INCOME OF THE PARTNERSHIP. SUCH  ATTRI-
BUTION  SHALL  BE  MADE  IN  ACCORDANCE  WITH THE RATIO OF THE PARTNER'S
INCOME FROM THE PARTNERSHIP ALLOCATED WITHIN THE STATE TO THE  PARTNER'S
ENTIRE  INCOME,  OR IN ACCORDANCE WITH SUCH OTHER METHODS AS THE COMMIS-
SIONER MAY PRESCRIBE  AS  PROVIDING  AN  APPORTIONMENT  THAT  REASONABLY
REFLECTS  THE PORTION OF THE PARTNER'S TAX ATTRIBUTABLE TO THE INCOME OF
THE PARTNERSHIP. IN NO EVENT MAY THE RATIO SO DETERMINED EXCEED 1.0. THE
INCOME FROM THE PARTNERSHIP ALLOCATED WITHIN THE STATE SHALL  BE  DETER-
MINED AS IF ANY OF THE PARTNERS WAS A NON-RESIDENT.
  (II)  FOR  PURPOSES OF ARTICLE NINE-A OF THIS CHAPTER, THE TERM "PART-
NER'S INCOME FROM THE PARTNERSHIP" MEANS PARTNERSHIP  ITEMS  OF  INCOME,
GAIN,  LOSS  AND DEDUCTION, AND NEW YORK MODIFICATIONS THERETO, ENTERING
INTO ENTIRE NET INCOME OR MINIMUM TAXABLE INCOME AND THE TERM "PARTNER'S
ENTIRE INCOME" MEANS ENTIRE NET INCOME OR MINIMUM TAXABLE INCOME,  ALLO-
CATED WITHIN THE STATE. FOR PURPOSES OF ARTICLE TWENTY-TWO OF THIS CHAP-
TER,  THE TERM "PARTNER'S INCOME FROM THE PARTNERSHIP" MEANS PARTNERSHIP
ITEMS OF INCOME, GAIN, LOSS AND DEDUCTION, AND  NEW  YORK  MODIFICATIONS
THERETO,  ENTERING  INTO  NEW  YORK  ADJUSTED GROSS INCOME, AND THE TERM
"PARTNER'S ENTIRE INCOME" MEANS NEW YORK ADJUSTED GROSS INCOME.
  (C) WHERE THE TAXPAYER IS A SHAREHOLDER OF A NEW  YORK  S  CORPORATION
THAT  IS A BUSINESS LOCATED IN A TAX-FREE NY AREA, THE SHAREHOLDER'S TAX
FACTOR SHALL BE THAT PORTION OF THE AMOUNT DETERMINED IN  PARAGRAPH  ONE

S. 5884                            20

OF  THIS  SUBDIVISION THAT IS ATTRIBUTABLE TO THE INCOME OF THE S CORPO-
RATION. SUCH ATTRIBUTION SHALL BE MADE IN ACCORDANCE WITH THE  RATIO  OF
THE  SHAREHOLDER'S  INCOME  FROM  THE S CORPORATION ALLOCATED WITHIN THE
STATE,  ENTERING  INTO NEW YORK ADJUSTED GROSS INCOME, TO THE SHAREHOLD-
ER'S NEW YORK ADJUSTED GROSS INCOME, OR IN ACCORDANCE  WITH  SUCH  OTHER
METHODS  AS THE COMMISSIONER MAY PRESCRIBE AS PROVIDING AN APPORTIONMENT
THAT REASONABLY REFLECTS THE PORTION OF THE SHAREHOLDER'S TAX  ATTRIBUT-
ABLE  TO  THE  INCOME  OF SUCH BUSINESS. THE INCOME OF THE S CORPORATION
ALLOCATED WITHIN THE STATE SHALL BE DETERMINED BY MULTIPLYING THE INCOME
OF THE S CORPORATION BY THE BUSINESS ALLOCATION  FACTOR  COMPUTED  UNDER
PARAGRAPH  (A)  OF  SUBDIVISION THREE OF SECTION TWO HUNDRED TEN OF THIS
ARTICLE WITHOUT REGARD TO SUBPARAGRAPH TEN OF SUCH PARAGRAPH (A). IN  NO
EVENT MAY THE RATIO SO DETERMINED EXCEED 1.0.
  (3)  COMBINED RETURNS OR REPORTS. (A) WHERE THE TAXPAYER IS A BUSINESS
LOCATED IN A TAX-FREE NY AREA AND IS REQUIRED OR  PERMITTED  TO  MAKE  A
RETURN  OR REPORT ON A COMBINED BASIS UNDER ARTICLE NINE-A OF THIS CHAP-
TER, THE TAXPAYER'S TAX FACTOR SHALL BE THE AMOUNT DETERMINED  IN  PARA-
GRAPH ONE OF THIS SUBDIVISION THAT IS ATTRIBUTABLE TO THE INCOME OF SUCH
BUSINESS. SUCH ATTRIBUTION SHALL BE MADE IN ACCORDANCE WITH THE RATIO OF
THE BUSINESS'S INCOME ALLOCATED WITHIN THE STATE TO THE COMBINED GROUP'S
INCOME, OR IN ACCORDANCE WITH SUCH OTHER METHODS AS THE COMMISSIONER MAY
PRESCRIBE  AS  PROVIDING  AN  APPORTIONMENT THAT REASONABLY REFLECTS THE
PORTION OF THE COMBINED GROUP'S TAX ATTRIBUTABLE TO THE INCOME  OF  SUCH
BUSINESS. IN NO EVENT MAY THE RATIO SO DETERMINED EXCEED 1.0.
  (B)  THE  TERM  "INCOME OF THE BUSINESS LOCATED IN A TAX-FREE NY AREA"
MEANS ENTIRE NET INCOME OR MINIMUM TAXABLE INCOME CALCULATED AS  IF  THE
TAXPAYER  WAS  FILING  SEPARATELY AND THE TERM "COMBINED GROUP'S INCOME"
MEANS ENTIRE NET INCOME OR  MINIMUM  TAXABLE  INCOME  AS  SHOWN  ON  THE
COMBINED REPORT, ALLOCATED WITHIN THE STATE.
  (4)  IF  A  BUSINESS  IS GENERATING OR RECEIVING INCOME FROM A LINE OF
BUSINESS OR INTANGIBLE PROPERTY THAT WAS PREVIOUSLY  CONDUCTED,  CREATED
OR  DEVELOPED  BY  THE  BUSINESS  OR  A  RELATED PERSON, AS THAT TERM IS
DEFINED IN SECTION FOUR HUNDRED THIRTY-ONE OF THE  ECONOMIC  DEVELOPMENT
LAW,  THE  TAX FACTOR SPECIFIED IN THIS SUBDIVISION SHALL BE ADJUSTED TO
DISREGARD SUCH INCOME.
  (E) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT  PROVIDED  FOR  IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
  (1) ARTICLE 9-A: SECTION 210, SUBDIVISION 47.
  (2)  ARTICLE  22: SECTION 606, SUBSECTION (I), PARAGRAPH (1), SUBPARA-
GRAPH (B), CLAUSE (XXXVI).
  (3) ARTICLE 22: SECTION 606, SUBSECTION (WW).
  S 5. Section 180 of the tax law is amended by adding a new subdivision
3 to read as follows:
  3. A CORPORATION THAT IS LOCATED EXCLUSIVELY WITHIN  THE  STATE  IN  A
TAX-FREE NY AREA APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC
DEVELOPMENT LAW SHALL BE EXEMPT FROM THE TAX IMPOSED BY THIS SECTION.
  S 6. Section 181 of the tax law is amended by adding a new subdivision
3 to read as follows:
  3.  A CORPORATION THAT IS ACCEPTED TO LOCATE IN A TAX-FREE NY AREA AND
IS LOCATED EXCLUSIVELY WITHIN THE STATE IN A TAX-FREE NY  AREA  APPROVED
PURSUANT  TO ARTICLE TWENTY-ONE OF THE ECONOMIC DEVELOPMENT LAW SHALL BE
EXEMPT FROM:  (A) THE LICENSE FEE IMPOSED BY  SUBDIVISION  ONE  OF  THIS
SECTION;  AND  (B)  PROVIDED THAT THE CORPORATION SATISFIES THE REQUIRE-
MENTS IN SUBDIVISION (A) OF SECTION THIRTY-NINE  OF  THIS  CHAPTER,  THE
ANNUAL MAINTENANCE FEE IMPOSED BY SUBDIVISION TWO OF THIS SECTION.

S. 5884                            21

  S 7. Section 210 of the tax law is amended by adding a new subdivision
47 to read as follows:
  47.  THE  TAX-FREE NY AREA TAX ELIMINATION CREDIT. A TAXPAYER SHALL BE
ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN  SECTION  FORTY  OF  THIS
CHAPTER,  AGAINST  THE TAX IMPOSED BY THIS ARTICLE.  UNLESS THE TAXPAYER
HAS A TAX-FREE NY AREA ALLOCATION FACTOR OF  ONE  HUNDRED  PERCENT,  THE
CREDIT  ALLOWED  UNDER  THIS  SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT
REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE AMOUNT  PRESCRIBED  IN
PARAGRAPH (D) OF SUBDIVISION ONE OF THIS SECTION. HOWEVER, ANY AMOUNT OF
CREDIT  NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVER-
PAYMENT OF TAX TO  BE  CREDITED  OR  REFUNDED  IN  ACCORDANCE  WITH  THE
PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED,
HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHT-
Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THER-
EON.
  S  8. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a new  clause  (xxxvi)  to  read  as
follows:
(XXXVI) TAX-FREE NY AREA TAX        AMOUNT OF CREDIT UNDER
ELIMINATION CREDIT                  SUBDIVISION FORTY-SEVEN OF
                                    SECTION TWO HUNDRED TEN
  S  9. Section 606 of the tax law is amended by adding a new subsection
(ww) to read as follows:
  (WW) TAX-FREE NY AREA TAX ELIMINATION CREDIT. (1) ALLOWANCE OF CREDIT.
A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS  PROVIDED  UNDER
SECTION FORTY OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (2)  APPLICATION  OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
YEAR, THE EXCESS WILL BE TREATED AS AN OVERPAYMENT  TO  BE  CREDITED  OR
REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHT-
Y-SIX  OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST WILL BE PAID
THEREON.
  S 10. Subsection (c) of section 612 of  the  tax  law  is  amended  by
adding a new paragraph 40 to read as follows:
  (40)  ANY WAGES RECEIVED BY AN INDIVIDUAL AS AN EMPLOYEE OF A BUSINESS
LOCATED WITHIN A TAX-FREE NY AREA DURING THE FIRST FIVE  YEARS  OF  SUCH
BUSINESS'S  TEN  YEAR  TAXABLE  PERIOD  SPECIFIED  IN SUBDIVISION (A) OF
SECTION THIRTY-NINE OF THIS CHAPTER, TO THE EXTENT INCLUDED  IN  FEDERAL
ADJUSTED  GROSS  INCOME  AND  ALLOWED  UNDER SECTION THIRTY-NINE OF THIS
CHAPTER.  DURING THE SECOND FIVE YEARS OF SUCH BUSINESS'S TEN YEAR TAXA-
BLE PERIOD, THE FIRST TWO HUNDRED THOUSAND DOLLARS OF SUCH WAGES IN  THE
CASE  OF A TAXPAYER FILING AS A SINGLE INDIVIDUAL, THE FIRST TWO HUNDRED
FIFTY THOUSAND DOLLARS OF SUCH WAGES IN THE CASE OF A TAXPAYER FILING AS
A HEAD OF HOUSEHOLD, AND THREE HUNDRED THOUSAND DOLLARS OF SUCH WAGES IN
THE CASE OF A TAXPAYER FILING A JOINT RETURN, TO THE EXTENT INCLUDED  IN
FEDERAL  ADJUSTED  GROSS INCOME AND ALLOWED UNDER SECTION THIRTY-NINE OF
THIS CHAPTER.
  S 11. Section 803 of the tax law, as added by section 1 of part  C  of
chapter 25 of the laws of 2009, is amended to read as follows:
  S 803. Exemption override. [Any] (A) EXCEPT AS PROVIDED IN SUBDIVISION
(B)  OF  THIS SECTION, ANY exemption from tax specified in any other New
York state law will not apply to the tax imposed by this article.
  (B) IF A TAX-FREE NY AREA APPROVED PURSUANT TO THE PROVISIONS OF ARTI-
CLE TWENTY-ONE OF THE ECONOMIC DEVELOPMENT LAW  IS  LOCATED  WITHIN  THE
MCTD,  THE PAYROLL EXPENSE IN SUCH TAX-FREE NY AREA OF ANY EMPLOYER THAT
IS LOCATED IN SUCH AREA AND ACCEPTED INTO THE START-UP NY PROGRAM  SHALL

S. 5884                            22

BE  EXEMPT FROM THE TAX IMPOSED UNDER THIS ARTICLE. IN ADDITION, THE NET
EARNINGS FROM SELF-EMPLOYMENT OF AN INDIVIDUAL FROM A BUSINESS  IN  SUCH
TAX-FREE  NY AREA THAT IS ACCEPTED INTO THE START-UP NY PROGRAM SHALL BE
EXEMPT FROM THE TAX IMPOSED UNDER THIS ARTICLE.
  S 12. Paragraphs 1 and 2 of subdivision (d) of section 1119 of the tax
law,  paragraph 1 as amended by section 6 of part C of chapter 59 of the
laws of 2013 and paragraph 2 as added by section 31 of part S1 of  chap-
ter 57 of the laws of 2009, are amended to read as follows:
  (1)  Subject  to  the  conditions and limitations provided for in this
section, a refund or credit will be allowed for  taxes  imposed  on  the
retail  sale  of tangible personal property described in subdivision (a)
of section eleven hundred five of this article, and  on  every  sale  of
services  described  in  subdivisions  (b)  and (c) of such section, and
consideration given or contracted to be given for, or for  the  use  of,
such  tangible  personal  property  or  services,  where  such  tangible
personal property or services are sold to a qualified empire zone enter-
prise or to a qualified entity that is also a tenant in or part of a New
York state innovation hot spot as provided in  section  thirty-eight  of
this  chapter  OR  TO  A BUSINESS LOCATED IN A TAX-FREE NY AREA APPROVED
PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC DEVELOPMENT LAW, provided
that (A) such tangible personal property or tangible  personal  property
upon which such a service has been performed or such service (other than
a service described in subdivision (b) of section eleven hundred five of
this article) is directly and predominantly, or such a service described
in clause (A) or (D) of paragraph one of such subdivision (b) of section
eleven hundred five of this article is directly and exclusively, used or
consumed  by (i) such qualified empire zone enterprise in an area desig-
nated as an empire zone pursuant to article eighteen-B  of  the  general
municipal  law with respect to which such enterprise is certified pursu-
ant to such article eighteen-B, or (ii) such  qualified  entity  at  its
location in or as part of a New York state innovation hot spot, OR (III)
SUCH  BUSINESS  AT  ITS LOCATION IN SUCH TAX-FREE NY AREA, or (B) such a
service described in clause (B) or (C) of paragraph one  of  subdivision
(b)  of  section  eleven  hundred  five of this article is delivered and
billed to (i) such enterprise at an address in such empire zone or  (ii)
such  qualified  entity  at  its  location in or as part of the New York
state innovation hot spot, or (III) SUCH BUSINESS  AT  ITS  LOCATION  IN
SUCH  TAX-FREE  NY AREA, OR (C) the enterprise's place of primary use of
the service described in  paragraph  two  of  such  subdivision  (b)  of
section  eleven  hundred five is at an address in such empire zone or at
its location in or as part of a New York state innovation hot  spot,  OR
AT  ITS  LOCATION  IN SUCH TAX-FREE NY AREA; provided, further, that, in
order for a motor vehicle, as defined  in  subdivision  (c)  of  section
eleven  hundred seventeen of this article, or tangible personal property
related to such a motor vehicle to be found to be used predominantly  in
such a zone, at least fifty percent of such motor vehicle's use shall be
exclusively  within  such  zone  or at least fifty percent of such motor
vehicle's use shall be in activities originating or terminating in  such
zone,  or  both; and either or both such usages shall be computed either
on the basis of mileage or hours of  use,  at  the  discretion  of  such
enterprise. For purposes of this subdivision, tangible personal property
related  to  such  a motor vehicle shall include a battery, diesel motor
fuel, an engine, engine components, motor fuel,  a  muffler,  tires  and
similar tangible personal property used in or on such a motor vehicle.
  (2)  Subject  to  the  conditions and limitations provided for in this
section, a refund or credit will be allowed for  taxes  imposed  on  the

S. 5884                            23

retail  sale  of, and consideration given or contracted to be given for,
or for the use of, tangible personal  property  sold  to  a  contractor,
subcontractor or repairman for use in (A) erecting a structure or build-
ing  of  a  qualified  empire zone enterprise OR A BUSINESS LOCATED IN A
TAX-FREE NY AREA APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC
DEVELOPMENT LAW, (B) adding to, altering  or  improving  real  property,
property  or  land  of such an enterprise OR SUCH BUSINESS, or (C) main-
taining, servicing or repairing real property, property or land of  such
an  enterprise OR OF SUCH BUSINESS, as the terms real property, property
or land are defined in the real property tax law; provided, however,  no
credit or refund will be allowed under this paragraph unless such tangi-
ble  personal  property  is to become an integral component part of such
structure, building, real property, property or land located in an  area
designated  as  an  empire  zone  pursuant  to article eighteen-B of the
general municipal law in, and with respect to which such  enterprise  is
certified pursuant to such article eighteen-B, OR IN AN AREA APPROVED AS
A TAX-FREE NY AREA PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC DEVEL-
OPMENT LAW WHERE SUCH BUSINESS IS LOCATED.
  S  13.  Subdivision  (b)  of section 1405 of the tax law is amended by
adding a new paragraph 11 to read as follows:
  11. CONVEYANCES OF REAL PROPERTY LOCATED IN TAX-FREE NY AREAS APPROVED
PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC DEVELOPMENT LAW TO  BUSI-
NESSES  LOCATED  IN SUCH AREAS THAT ARE PARTICIPATING IN THE START-UP NY
PROGRAM PURSUANT TO SUCH ARTICLE TWENTY-ONE.
  S 14. The exemption described in paragraph 11 of  subdivision  (b)  of
section  1405  of the tax law, as added by section thirteen of this act,
shall also apply to any local real estate transfer  tax  or  local  real
property  transfer  tax  imposed by a county or municipality pursuant to
the authority of the tax law.
  S 15. Subdivision (c) of section 11-1712 of the administrative code of
the city of New York is amended by adding a new paragraph 36 to read  as
follows:
  (36)  ANY WAGES RECEIVED BY AN INDIVIDUAL AS AN EMPLOYEE OF A BUSINESS
LOCATED WITHIN A TAX-FREE NY AREA DURING THE FIRST FIVE  YEARS  OF  SUCH
BUSINESS'S  TEN  YEAR  TAXABLE  PERIOD  SPECIFIED  IN SUBDIVISION (A) OF
SECTION THIRTY-NINE OF THE TAX LAW TO THE  EXTENT  INCLUDED  IN  FEDERAL
ADJUSTED  GROSS  INCOME AND ALLOWED UNDER SECTION THIRTY-NINE OF THE TAX
LAW.  DURING THE SECOND FIVE YEARS OF SUCH BUSINESS'S TEN  YEAR  TAXABLE
PERIOD, THE FIRST TWO HUNDRED THOUSAND DOLLARS OF SUCH WAGES IN THE CASE
OF A TAXPAYER FILING AS A SINGLE INDIVIDUAL, THE FIRST TWO HUNDRED FIFTY
THOUSAND  DOLLARS  OF  SUCH  WAGES IN THE CASE OF A TAXPAYER FILING AS A
HEAD OF HOUSEHOLD, AND THREE HUNDRED THOUSAND DOLLARS OF SUCH  WAGES  IN
THE  CASE OF A TAXPAYER FILING A JOINT RETURN, TO THE EXTENT INCLUDED IN
FEDERAL ADJUSTED GROSS INCOME AND ALLOWED UNDER SECTION  THIRTY-NINE  OF
THE TAX LAW.
  S  16.  Section  1340  of  the  tax  law  is  amended  by adding a new
subsection (d) to read as follows:
  (D) ANY WAGES RECEIVED BY AN INDIVIDUAL AS AN EMPLOYEE OF  A  BUSINESS
LOCATED  IN  A  TAX-FREE  NY  AREA WITHIN THE CITY DURING THE FIRST FIVE
YEARS OF SUCH BUSINESS'S TEN YEAR TAXABLE PERIOD SPECIFIED  IN  SUBDIVI-
SION  (A)  OF  SECTION  THIRTY-NINE  OF  THIS CHAPTER AND EARNED AT SUCH
LOCATION SHALL BE EXEMPT FROM THE TAX AUTHORIZED TO BE IMPOSED  BY  THIS
ARTICLE  TO  THE  EXTENT  INCLUDED  IN FEDERAL ADJUSTED GROSS INCOME AND
ALLOWED UNDER SECTION THIRTY-NINE OF THIS  CHAPTER.  DURING  THE  SECOND
FIVE  YEARS  OF  SUCH  BUSINESS'S TEN YEAR TAXABLE PERIOD, THE FIRST TWO
HUNDRED THOUSAND DOLLARS OF SUCH WAGES IN THE CASE OF A TAXPAYER  FILING

S. 5884                            24

AS  A SINGLE INDIVIDUAL, THE FIRST TWO HUNDRED FIFTY THOUSAND DOLLARS OF
SUCH WAGES IN THE CASE OF A TAXPAYER FILING AS A HEAD OF HOUSEHOLD,  AND
THREE  HUNDRED  THOUSAND DOLLARS OF SUCH WAGES IN THE CASE OF A TAXPAYER
FILING  A JOINT RETURN, TO THE EXTENT INCLUDED IN FEDERAL ADJUSTED GROSS
INCOME AND ALLOWED UNDER SECTION THIRTY-NINE OF THIS CHAPTER.
  S 17. Subdivision 2 of section 420-a of the real property tax law,  as
amended  by  chapter  534  of  the  laws  of 2003, is amended to read as
follows:
  2. If any portion of such real property is not so used exclusively  to
carry out thereupon one or more of such purposes but is leased or other-
wise  used for other purposes, such portion shall be subject to taxation
and the remaining portion only shall be exempt; provided, however,  that
such  real property shall be fully exempt from taxation although it or a
portion thereof is used (a) for purposes which are  exempt  pursuant  to
this section or sections four hundred twenty-b, four hundred twenty-two,
four  hundred twenty-four, four hundred twenty-six, four hundred twenty-
eight, four hundred thirty or four hundred  fifty  of  this  chapter  by
another corporation which owns real property exempt from taxation pursu-
ant  to  such  sections  or whose real property if it owned any would be
exempt from taxation pursuant to such sections, (b) for  purposes  which
are  exempt pursuant to section four hundred six or section four hundred
eight of this chapter by a corporation which owns real  property  exempt
from  taxation  pursuant  to  such  section  or if it owned any would be
exempt from taxation pursuant to such section, (c)  for  purposes  which
are  exempt  pursuant to section four hundred sixteen of this chapter by
an organization which owns real property exempt from  taxation  pursuant
to  such  section or whose real property if it owned any would be exempt
from taxation pursuant to such section [or], (d) for  purposes  relating
to  civil  defense pursuant to the New York state defense emergency act,
including but not limited to activities in preparation  for  anticipated
attack,  during attack, or following attack or false warning thereof, or
in connection with drill or test ordered or directed  by  civil  defense
authorities,  OR  (E)  FOR  PURPOSES OF A TAX-FREE NY AREA THAT HAS BEEN
APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC DEVELOPMENT LAW,
SUBJECT TO THE CONDITIONS THAT THE REAL PROPERTY MUST HAVE BEEN OWNED BY
THE CORPORATION OR ASSOCIATION  ORGANIZED  EXCLUSIVELY  FOR  EDUCATIONAL
PURPOSES AND EXEMPT PURSUANT TO THIS SECTION ON JUNE FIRST, TWO THOUSAND
THIRTEEN, AND THAT THE EXEMPTION SHALL APPLY ONLY TO THE PORTION OF SUCH
REAL  PROPERTY THAT IS USED FOR PURPOSES OF THE START-UP NY PROGRAM; and
provided further that such real property shall be exempt  from  taxation
only  so long as it or a portion thereof, as the case may be, is devoted
to such exempt purposes and so long as any moneys paid for such  use  do
not  exceed  the  amount  of  the carrying, maintenance and depreciation
charges of the property or portion thereof, as the case may be.
  S 18. Paragraph a of subdivision 2 of section  355  of  the  education
law, as amended by section 1 of subpart A of part D of chapter 58 of the
laws of 2011, is amended to read as follows:
  a.  To  take, hold and administer on behalf of the state university or
any institution therein, real and  personal  property  or  any  interest
therein  and  the  income  thereof either absolutely or in trust for any
educational or other  purpose  within  the  jurisdiction  and  corporate
purposes  of the state university. The trustees may acquire property for
such purposes by purchase, appropriation or lease and by the  acceptance
of  gifts, grants, bequests and devises, and, within appropriations made
therefor, may equip and furnish buildings and otherwise improve property
owned, used or occupied by the state university or any institution ther-

S. 5884                            25

ein. The trustees may acquire property by the acceptance of  conditional
gifts,  grants, devises or bequests, the provisions of section eleven of
the state finance law notwithstanding. Where  real  property  is  to  be
acquired  by  purchase  or  appropriation,  such acquisition shall be in
accordance with the provisions of section three hundred  seven  of  this
chapter  except  that the powers and duties in said section mentioned to
be performed by the commissioner shall be performed by the state univer-
sity trustees. THE PROVISIONS OF SECTION THREE OF THE PUBLIC  LANDS  LAW
NOTWITHSTANDING,  THE  TRUSTEES MAY PROVIDE FOR THE LEASE OF STATE-OWNED
REAL PROPERTY UNDER THE JURISDICTION OF THE  STATE  UNIVERSITY  THAT  IS
PART  OF  A  TAX-FREE NY AREA APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF
THE ECONOMIC DEVELOPMENT LAW, IN SUCH MANNER AND UPON SUCH TERMS AS  THE
TRUSTEES  SHALL  DETERMINE,  PROVIDED  SUCH LEASE IS CONSISTENT WITH THE
APPROVED PLAN FOR SUCH TAX-FREE NY AREA.
  S 19. Paragraph s of subdivision 2 of section  355  of  the  education
law,  as  amended by chapter 552 of the laws of 1985, is amended to read
as follows:
  s. To lease or make available to  the  state  university  construction
fund,  the  dormitory authority or other public benefit corporation, the
New York state teachers' retirement system  [or],  the  New  York  state
employees'  retirement system, OR A BUSINESS THAT INTENDS TO LOCATE IN A
TAX-FREE NY AREA APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC
DEVELOPMENT LAW, a portion of the grounds or real property occupied by a
state-operated institution or statutory  or  contract  college  for  the
construction, acquisition, reconstruction, rehabilitation or improvement
of  academic buildings, dormitories or other facilities thereon pursuant
to article eight-A of this chapter and for the purpose  of  facilitating
such   construction,   acquisition,  reconstruction,  rehabilitation  or
improvement, to enter into leases and agreements for the use of any such
academic building, dormitory or other facility in  accordance  with  the
provisions  of  section  three  hundred  seventy-eight  of this chapter;
provided, however,  that  nothing  herein  contained  shall  affect  the
provisions  of  any  lease or agreement heretofore executed by the state
university with the dormitory authority. The state  university  trustees
may  also  enter  into agreements with the state university construction
fund, the dormitory authority or other public benefit  corporation,  the
New  York  state  teachers'  retirement  system [or], the New York state
employees' retirement system OR ANY BUSINESS THAT INTENDS TO LOCATE IN A
TAX-FREE NY AREA APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC
DEVELOPMENT LAW, to furnish heat from a central  heating  plant  to  any
academic  building,  dormitory or other facility erected by them or with
moneys supplied by them. Any such academic building, dormitory or  other
facility shall not be subject to taxation for any purpose.
  S  20. Subdivision 2 of section 355 of the education law is amended by
adding a new paragraph z to read as follows:
  Z. IN CONNECTION WITH BUSINESS/UNIVERSITY PARTNERSHIPS IN  SUPPORT  OF
THE  CORPORATE PURPOSES OF THE STATE UNIVERSITY, TO PARTICIPATE IN JOINT
AND COOPERATIVE ARRANGEMENTS WITH BUSINESSES  THAT  HAVE  LOCATED  IN  A
TAX-FREE NY AREA APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF THE ECONOMIC
DEVELOPMENT  LAW  PROVIDED  SUCH  ARRANGEMENTS  ARE  CONSISTENT WITH THE
APPROVED PLAN FOR SUCH TAX-FREE NY AREA.
  S 21. The education law is amended by adding a new section 361 to read
as follows:
  S 361. START-UP NY PROGRAM LEASES. 1. ANY LEASE OR CONTRACT BETWEEN  A
STATE  UNIVERSITY CAMPUS, CITY UNIVERSITY CAMPUS OR COMMUNITY COLLEGE AS
DEFINED IN SECTION FOUR HUNDRED THIRTY-ONE OF THE  ECONOMIC  DEVELOPMENT

S. 5884                            26

LAW  AND  A BUSINESS FOR THE USE OF VACANT LAND OR VACANT SPACE OWNED OR
LEASED BY SUCH  STATE  UNIVERSITY  CAMPUS,  COMMUNITY  COLLEGE  OR  CITY
UNIVERSITY  CAMPUS  IN  A  TAX-FREE NY AREA APPROVED PURSUANT TO ARTICLE
TWENTY-ONE OF THE ECONOMIC DEVELOPMENT LAW SHALL PROVIDE:
  (A) THE TERM OF THE LEASE OR CONTRACT.
  (B)  A REQUIREMENT THAT ANY CONTRACT TO WHICH A CAMPUS OR COLLEGE IS A
PARTY, AND ANY CONTRACT ENTERED INTO BY A THIRD PARTY  ACTING  IN  PLACE
OF,  ON  BEHALF  OF AND FOR THE BENEFIT OF THE CAMPUS OR COLLEGE THEREIN
PURSUANT TO ANY LEASE, PERMIT OR  OTHER  AGREEMENT  BETWEEN  SUCH  THIRD
PARTY  AND  THE  CAMPUS  OR COLLEGE FOR THE USE OF VACANT LAND OR VACANT
SPACE OWNED OR LEASED BY THE STATE UNIVERSITY CAMPUS, COMMUNITY  COLLEGE
OR  CITY UNIVERSITY CAMPUS FOR THE CONSTRUCTION, RECONSTRUCTION, DEMOLI-
TION, EXCAVATION,  REHABILITATION,  REPAIR,  RENOVATION,  ALTERATION  OR
IMPROVEMENT  OF  A  PROJECT SHALL BE SUBJECT TO ALL OF THE PROVISIONS OF
ARTICLE EIGHT OF THE LABOR LAW, INCLUDING THE ENFORCEMENT OF  PREVAILING
WAGE  REQUIREMENTS  BY  THE  FISCAL OFFICER AS DEFINED IN PARAGRAPH E OF
SUBDIVISION FIVE OF SECTION TWO HUNDRED TWENTY OF THE LABOR LAW  TO  THE
SAME  EXTENT  AS  A  CONTRACT OF THE STATE, AND SHALL BE DEEMED A PUBLIC
WORK FOR PURPOSES OF SUCH ARTICLE.
  (C) WHENEVER A PARTY TO ANY LEASE OR CONTRACT FOR PROJECTS  AUTHORIZED
PURSUANT TO THIS SECTION ON LANDS LEASED OR OWNED BY THE CITY UNIVERSITY
OF  NEW  YORK, ENTERS INTO A CONTRACT UNDER WHICH EMPLOYEES ARE EMPLOYED
TO PERFORM BUILDING SERVICE WORK, AS THAT TERM IS DEFINED IN SECTION TWO
HUNDRED THIRTY OF THE LABOR LAW, SUCH WORK SHALL BE SUBJECT  TO  ARTICLE
NINE  OF  THE  LABOR  LAW  TO  THE  SAME EXTENT AS BUILDING SERVICE WORK
PERFORMED PURSUANT TO A CONTRACT WITH A PUBLIC AGENCY.
  (D) A REQUIREMENT THAT FOR THE PURPOSES OF ARTICLE  FIFTEEN-A  OF  THE
EXECUTIVE  LAW, ANY INDIVIDUAL, PUBLIC CORPORATION OR AUTHORITY, PRIVATE
CORPORATION, LIMITED LIABILITY COMPANY OR PARTNERSHIP  OR  OTHER  ENTITY
ENTERING  INTO  A CONTRACT, SUBCONTRACT, LEASE, GRANT, BOND, COVENANT OR
OTHER AGREEMENT FOR A PROJECT UNDERTAKEN BY A BUSINESS AUTHORIZED PURSU-
ANT TO ARTICLE TWENTY-ONE OF  THE  ECONOMIC  DEVELOPMENT  LAW  SHALL  BE
DEEMED  A  STATE AGENCY AS THAT TERM IS DEFINED IN SUCH ARTICLE AND SUCH
CONTRACTS SHALL BE DEEMED STATE CONTRACTS WITHIN  THE  MEANING  OF  THAT
TERM  AS SET FORTH IN SUCH ARTICLE, EXCEPT THAT THIS PARAGRAPH SHALL NOT
APPLY TO ANY LEASE OR CONTRACT ENTERED INTO BY A  COMMUNITY  COLLEGE  OF
THE STATE UNIVERSITY OF NEW YORK OR CITY UNIVERSITY OF NEW YORK.
  (E)  THE  METES AND BOUNDS OR OTHER APPLICABLE DESCRIPTION THAT CAN BE
EASILY IDENTIFIED, SHARED AND VERIFIED BY AN INDEPENDENT THIRD PARTY  OF
THE VACANT LAND OR VACANT SPACE SUBJECT TO THE CONTRACT OR LEASE.
  (F)  A  REQUIREMENT  THAT ANY LEASE, CONTRACT OR OTHER AGREEMENT SHALL
INCLUDE AN INDEMNITY PROVISION WHEREBY THE LESSEE OR SUBLESSEE  PROMISES
TO  INDEMNIFY,  HOLD HARMLESS, AND DEFEND THE LESSOR AGAINST ALL CLAIMS,
SUITS, ACTIONS, AND LIABILITY TO ALL PERSONS  ON  THE  LEASED  PREMISES,
INCLUDING  TENANT, TENANT'S AGENTS, CONTRACTORS, SUBCONTRACTORS, EMPLOY-
EES, CUSTOMERS, GUESTS, LICENSEES, INVITEES, AND MEMBERS OF THE  PUBLIC,
FOR  DAMAGE  TO ANY SUCH PERSON'S PROPERTY, WHETHER REAL OR PERSONAL, OR
FOR PERSONAL INJURIES ARISING OUT OF TENANT'S USE OR OCCUPATION  OF  THE
DEMISED PREMISES.
  (G)  A  REQUIREMENT THAT UPON THE EXPIRATION OF THE LEASE OR AGREEMENT
COVERING PROPERTY OWNED BY THE CAMPUS OR COLLEGE  THE  DEMISED  PREMISES
AND  ANY  IMPROVEMENTS  THEREON  SHALL  REVERT TO THE CAMPUS OR COLLEGE,
UNLESS THE LEASE IS RENEWED.
  (H) A REQUIREMENT THAT IN THE EVENT THE DEMISED PREMISES  SHALL  CEASE
TO  BE USED FOR THE PURPOSES DESCRIBED IN THE LEASE OR CONTRACT COVERING
PROPERTY OWNED BY THE CAMPUS OR COLLEGE, THE  LEASE  OR  CONTRACT  SHALL

S. 5884                            27

TERMINATE  ON  THE  THIRTIETH  DAY  AFTER  NOTICE OF SUCH TERMINATION IS
MAILED TO THE BUSINESS, THE DEMISED PREMISES AND ANY IMPROVEMENTS THERE-
ON SHALL REVERT TO THE CAMPUS OR COLLEGE.
  (I)  A  REQUIREMENT THAT ANY AND ALL PROCEEDS RELATING TO THE LEASE OR
CONTRACT SHALL BE ALLOCATED BY THE BOARD OF TRUSTEES TO  THE  CAMPUS  OR
COLLEGE  FOR  WHICH  SUCH  CONTRACT  OR  LEASE APPLIES, DEPOSITED IN THE
GENERAL FUND OF SUCH CAMPUS OR COLLEGE, AND USED FOR PURPOSES  INCLUDING
BUT  NOT  LIMITED TO STUDENT FINANCIAL AID FOR STUDENTS WHO ARE ELIGIBLE
TO RECEIVE A TUITION ASSISTANCE AWARD OR SUPPLEMENTAL TUITION ASSISTANCE
PURSUANT TO SECTION SIX HUNDRED SIXTY-SEVEN OR SIX HUNDRED SIXTY-SEVEN-A
OF THE EDUCATION LAW AND TO SUPPORT ADDITIONAL FULL-TIME  FACULTY  POSI-
TIONS.
  2.  FOR THE PURPOSES OF THIS SECTION AND FOR THE PURPOSES OF ANY LEASE
OR CONTRACT AUTHORIZED PURSUANT TO THIS SECTION:  "PROJECT"  SHALL  MEAN
CAPITAL  IMPROVEMENT WORK ON REAL PROPERTY UNDER THE JURISDICTION OF THE
CAMPUS OR COLLEGE TO BE SUBJECT TO ANY LEASE,  TRANSFER  OR  CONVEYANCE,
OTHER  THAN  CONVEYANCE  OF  TITLE.  SUCH CAPITAL IMPROVEMENT WORK SHALL
INCLUDE THE  DESIGN,  CONSTRUCTION,  RECONSTRUCTION,  DEMOLITION,  EXCA-
VATION, REHABILITATION, REPAIR, RENOVATION, ALTERATION OR IMPROVEMENT OF
REAL PROPERTY UNDER THE JURISDICTION OF THE CAMPUS OR COLLEGE.
  3.  A  PARTY  TO  ANY  LEASE  OR  CONTRACT AUTHORIZED PURSUANT TO THIS
SECTION MAY REQUIRE A CONTRACTOR AWARDED A CONTRACT, SUBCONTRACT, LEASE,
GRANT, BOND, COVENANT OR OTHER AGREEMENT FOR A PROJECT TO ENTER  INTO  A
PROJECT  LABOR  AGREEMENT  PURSUANT TO SECTION TWO HUNDRED TWENTY-TWO OF
THE LABOR LAW DURING AND FOR THE WORK INVOLVED WITH  SUCH  PROJECT  WHEN
SUCH  REQUIREMENT  IS PART OF SUCH PARTY'S REQUEST FOR PROPOSALS FOR THE
PROJECT AND WHEN THE PARTY DETERMINES THAT  THE  RECORD  SUPPORTING  THE
DECISION  TO ENTER INTO SUCH AN AGREEMENT ESTABLISHES THAT THE INTERESTS
UNDERLYING THE COMPETITIVE BIDDING LAWS ARE  BEST  MET  BY  REQUIRING  A
PROJECT LABOR AGREEMENT INCLUDING: OBTAINING THE BEST WORK AT THE LOWEST
POSSIBLE  PRICE; PREVENTING FAVORITISM, FRAUD AND CORRUPTION; THE IMPACT
OF DELAY; THE POSSIBILITY OF COST SAVINGS;  AND  ANY  LOCAL  HISTORY  OF
LABOR UNREST.
  S  22. Severability clause. If any clause, sentence, paragraph, subdi-
vision, section or part of this act shall be adjudged by  any  court  of
competent  jurisdiction  to  be invalid, such judgment shall not affect,
impair, or invalidate the remainder thereof, but shall  be  confined  in
its  operation  to the clause, sentence, paragraph, subdivision, section
or part thereof directly involved in the controversy in which such judg-
ment shall have been rendered. It is hereby declared to be the intent of
the legislature that this act would  have  been  enacted  even  if  such
invalid provisions had not been included herein.
  S  23.  This  act shall take effect immediately; provided however that
the tax benefits specified in section 39 of the tax  law,  as  added  by
section  two  of  this  act shall apply to taxable years beginning on or
after January 1, 2014, calendar quarters beginning on or  after  January
1,  2014,  sales  tax  quarters  beginning on or after March 1, 2014, or
transactions occurring on or after January 1, 2014, whichever is  appli-
cable; provided, further, that the amendments to paragraph a of subdivi-
sion  2  of section 355 of the education law made by section eighteen of
this act shall not affect the expiration of such paragraph and shall  be
deemed to expire therewith.

                                 PART B

S. 5884                            28

  Section  1. Section 666 of the executive law, as added by section 2 of
subpart H of part C of chapter 97 of the laws of  2011,  is  amended  to
read as follows:
  S  666.  Mandate  AND  REGULATORY  relief  council. 1. Definitions. a.
"Mandate" means (I) any requirement that a local government  perform  or
administer  any  program,  project or activity, required or imposed by a
state law or state agency that requires a higher level of service for an
existing local government program, project  or  activity;  OR  (II)  ANY
REQUIREMENT  A BUSINESS MUST PERFORM IN ORDER TO DO BUSINESS IN NEW YORK
STATE.
  b. "Local government" means a  county,  city,  town,  village,  school
district, or special district.
  c.  "State  agency"  or  "agency"  means any state agency, department,
office, board, bureau, division, committee, council or office under  the
direction or control of the executive.
  D.  "BUSINESS"  MEANS  ANY  ENTITY  DOING BUSINESS IN OR AUTHORIZED TO
OPERATE IN THE STATE  OF  NEW  YORK,  INCLUDING,  BUT  NOT  LIMITED  TO,
FOR-PROFIT  AND NOT-FOR-PROFIT CORPORATIONS, SOLE PROPRIETORSHIPS, PART-
NERSHIPS, AND LIMITED LIABILITY COMPANIES.
  2. Mandate relief council. There is hereby created within  the  execu-
tive  department the mandate relief council, which shall be comprised of
eleven members as follows: the secretary  to  the  governor,  who  shall
chair  the  council,  the  counsel  to the governor, the director of the
division of the budget, the secretary of  state,  and  three  additional
members  to be appointed by the governor from among his or her executive
chamber staff, two members to be appointed by the temporary president of
the senate, and two members to be appointed by the speaker of the assem-
bly.
  a. Six members of the council, or their designees in the case  of  the
director of the division of the budget and the secretary of state, shall
constitute a quorum.
  b.  The council shall meet regularly upon the call of its chair and as
frequently as its business may require. The members of the council shall
serve without compensation but shall  receive  reimbursement  for  their
reasonable and necessary expenses.
  c.  The  council shall, upon request of a local government OR BUSINESS
or one of the members of the council, identify and review mandates  that
can  be  eliminated  or  reformed,  and  make  such  other  and  further
inquiries, reports and recommendations as the council may deem necessary
and prudent to effectuate its mission of mandate relief. In  identifying
and  determining whether such mandates are unsound, unduly burdensome or
costly, the council shall receive and consider public comment about them
and shall review them in light of cost-benefit principles and such other
and further factors as the council shall deem necessary and prudent. The
council shall not make a referral to the  governor  that  a  mandate  be
eliminated or reformed regarding any of the following mandates:
  (i)  those  which are required to comply with federal laws or rules or
to meet eligibility standards for federal entitlements;
  (ii) those which reapportion the costs of activities between boards of
education, counties, and municipalities;
  (iii) those which implement provisions of the state constitution; and
  (iv) those which the council determines are necessary for the  mainte-
nance of the public health or safety of the people of New York state.
  d.  All votes of the council, and all deliberations and reports of its
proceedings shall be open to the public pursuant to article seven of the
public officers law.

S. 5884                            29

  3. Council actions on regulatory mandates. Upon a determination that a
mandate in any regulation, rule or order of any state  agency  has  been
imposed  upon  any  local  government  OR BUSINESS in an unsound, unduly
burdensome or costly manner so as to necessitate that it  be  eliminated
or reformed, the council shall have the power to:
  a.  refer a request by a local government for a review of such regula-
tory mandate, for petition  by  such  local  government  for  a  waiver,
modification  or  repeal  of such regulatory mandate pursuant to section
two hundred four-a of the state administrative  procedure  act.  In  the
event  the  council  votes  to  make  such referral on behalf of a local
government, the state agency that is charged with reviewing the petition
shall provide the  technical  assistance  and  support  for  such  local
government  to  properly  prepare and submit such petition. In the event
that such state agency reviewing the petition of  the  local  government
pursuant  to  section  two  hundred  four-a  of the state administrative
procedure act does not provide the remedy sought by such  local  govern-
ment,  the  council may hear and consider an appeal of such decision and
grant such relief as it deems appropriate, including  the  making  of  a
referral to the governor for the waiving, modifying or repealing of such
regulatory mandate. The council shall adopt procedures by which it shall
consider,  decide and effectuate the remedies of such appeals consistent
with this section.
  b. upon a two-thirds vote, refer a  regulation  to  the  governor  for
repeal or modification, where the council has previously determined that
such  regulation  imposes  upon  any  local  government  a mandate in an
unsound, unduly burdensome or costly manner, so as to  necessitate  that
it be eliminated or reformed. Upon receipt of such referral by the coun-
cil,  the  governor  shall  within  sixty  days, direct the state agency
responsible for the promulgation, repeal or modification of  such  regu-
lation  to  effectuate  such  repeal  or  modification of the regulation
pursuant to the procedures that such agency would otherwise be  required
to  follow  under  the  law, had such agency on its own accord sought to
repeal or modify the regulation.
  4. Council actions on statutory mandates. The council may, upon a vote
of seven members, refer a statute to the governor for repeal or  modifi-
cation,  where  the  council has previously determined that such statute
imposes upon any local government OR BUSINESS a mandate in  an  unsound,
unduly  burdensome  or  costly  manner,  so as to necessitate that it be
eliminated or reformed. Upon receipt of the referral by the council, the
governor, within sixty days, shall have prepared  a  governor's  program
bill,  for introduction in both houses of the legislature, to effectuate
such repeal or modification of the statute.
  5. Local government request. A local government may, by resolution  of
its  governing body, ask the council to review a specific statute, regu-
lation, rule or order of state  government  to  determine  whether  such
statute,  regulation,  rule  or order of state government is an unfunded
mandate or is otherwise unsound, unduly burdensome or costly  so  as  to
require  that it be eliminated or reformed. No local government may make
more than three such requests in each calendar year. Upon  such  review,
the  council shall, by majority vote, determine whether such mandate has
been imposed upon such local government in an unsound, unduly burdensome
or costly manner,  so  as  to  necessitate  that  it  be  eliminated  or
reformed.  A  determination  of  the  council  shall resolve any dispute
regarding whether such a statute, regulation, rule or order  constitutes
such  an  unfunded  mandate, but shall not be deemed a judicial determi-
nation under the law.

S. 5884                            30

  6. Appeals. Upon an appeal of a petition previously decided by a state
agency pursuant to section two hundred four-a of the  state  administra-
tive  procedure  act, the council, upon request of the local government,
shall review the state agency's determination and may affirm, modify  or
reject  such  determination.  Such  appeal shall not preclude or limit a
local government or any other party  with  standing  from  pursuing  any
right it may have pursuant to a proceeding instituted in accordance with
the  provisions  of  article seventy-eight of the civil practice law and
rules or any other statute.
  7. Reports. The council shall  by  December  fifteenth  of  each  year
report  to  the  governor  and legislature regarding its activities, and
regarding the issues, statutes, regulations, rules and orders  which  it
reviewed, examined, proposed, referred, and/or considered. Such reports,
which  shall be adopted upon a majority vote of the members of the coun-
cil, or their designees in the case of the director of the  division  of
the  budget  or the secretary of state. All reports of the council shall
be posted on a publicly accessible website.
  8. Assistance of other agencies. To effectuate the  purposes  of  this
section,  any state agency shall, at the request of the council, provide
to the council such facilities, assistance and data as will  enable  the
council to properly carry out its responsibilities and duties.
  S  2. This act shall take effect immediately, provided that the amend-
ments to section 666 of the executive law made by section  one  of  this
act  shall  not  affect  the  repeal of such section and shall be deemed
repealed therewith.

                                 PART C

  Section 1. Subdivisions 3 and 4 of section 353 of the economic  devel-
opment  law, as amended by section 2 of part G of chapter 61 of the laws
of 2011, are amended to read as follows:
  3. For the purposes of this article, in order to  participate  in  the
excelsior  jobs  program,  a  business entity operating predominantly in
manufacturing must create at least [twenty-five] TEN  net  new  jobs;  a
business  entity  operating  predominately in agriculture must create at
least [ten] FIVE net new jobs; a business entity operating predominantly
as a financial service data center or financial services  customer  back
office  operation must create at least [one hundred] FIFTY net new jobs;
a business entity operating predominantly  in  scientific  research  and
development  must  create  at  least [ten] FIVE net new jobs; a business
entity operating predominantly in software development  must  create  at
least  [ten]  FIVE net new jobs; a business entity creating or expanding
back office operations MUST CREATE AT LEAST FIFTY NET  NEW  JOBS;  or  A
BUSINESS  ENTITY OPERATING PREDOMINANTLY AS a distribution center in the
state must create at least [one  hundred  fifty]  SEVENTY-FIVE  net  new
jobs,  notwithstanding  subdivision  five of this section; or a business
entity must be a regionally significant project as defined in this arti-
cle; or
  4. A business entity operating predominantly in one of the  industries
referenced  in  paragraphs  (a)  through  (h) of subdivision one of this
section but which does not meet  the  job  requirements  of  subdivision
three  of  this section must have at least [fifty] TWENTY-FIVE full-time
job equivalents UNLESS SUCH BUSINESS  IS  A  BUSINESS  ENTITY  OPERATING
PREDOMINANTLY  IN MANUFACTURING THEN IT MUST HAVE AT LEAST TEN FULL-TIME
JOB EQUIVALENTS and must demonstrate that its benefit-cost ratio  is  at
least ten to one.

S. 5884                            31

  S  2. Subdivision 2 of section 355 of the economic development law, as
amended by section 4 of part G of chapter 61 of the  laws  of  2011,  is
amended to read as follows:
  2.  Excelsior  investment  tax  credit component. A participant in the
excelsior jobs program shall be eligible to claim a credit on  qualified
investments. The credit shall be equal to [two] FIVE percent of the cost
or  other basis for federal income tax purposes of the qualified invest-
ment.  A participant may not claim both  the  excelsior  investment  tax
credit  component and the investment tax credit set forth in subdivision
twelve of section two hundred ten, subsection (a) of section six hundred
six, subsection (i) of section fourteen hundred fifty-six,  or  subdivi-
sion  (q)  of section fifteen hundred eleven of the tax law for the same
property in any taxable year, except that a participant may  claim  both
the  excelsior  investment  tax  credit component and the investment tax
credit for research and development property. In  addition,  a  taxpayer
who  or  which is qualified to claim the excelsior investment tax credit
component and is also qualified to claim the brownfield tangible proper-
ty credit component under section twenty-one of the tax  law  may  claim
either  the  excelsior  investment tax credit component or such tangible
property credit component, but not both  with  regard  to  a  particular
piece  of  property. A credit may not be claimed until a business enter-
prise has received a certificate of tax credit, provided that  qualified
investments  made  on or after the issuance of the certificate of eligi-
bility but before the issuance of the certificate of tax credit  to  the
business  enterprise, may be claimed in the first taxable year for which
the business  enterprise  is  allowed  to  claim  the  credit.  Expenses
incurred  prior to the date the certificate of eligibility is issued are
not eligible to be included in the calculation of the credit.
  S 3. Subdivision 5 of section 354 of the economic development law,  as
amended  by  section  3  of part G of chapter 61 of the laws of 2011, is
amended to read as follows:
  5. A participant may claim tax benefits commencing in the first  taxa-
ble  year  that  the  business  enterprise receives a certificate of tax
credit or the first taxable year listed on its preliminary  schedule  of
benefits,  whichever is later. A participant may claim such benefits for
the next nine consecutive taxable years, provided that  the  participant
demonstrates  to  the department that it continues to satisfy the eligi-
bility criteria specified in section three hundred fifty-three  of  this
article  and  subdivision  two  of this section in each of those taxable
years. IF, IN ANY GIVEN YEAR, A PARTICIPANT WHO HAS SATISFIED THE ELIGI-
BILITY CRITERIA SPECIFIED IN SECTION THREE HUNDRED FIFTY-THREE  OF  THIS
ARTICLE REALIZES JOB CREATION LESS THAN THE ESTIMATED AMOUNT, THE CREDIT
SHALL  BE  REDUCED BY THE PROPORTION OF ACTUAL JOB CREATION TO THE ESTI-
MATED AMOUNT, PROVIDED THE PROPORTION IS AT LEAST  SEVENTY-FIVE  PERCENT
OF THE JOBS ESTIMATED.
  S  4.  Section  359  of  the  economic  development law, as amended by
section 6 of part G of chapter 61 of the laws of  2011,  is  amended  to
read as follows:
  S  359.  Cap  on tax credit. The total amount of tax credits listed on
certificates of tax credit issued by the commissioner  for  any  taxable
year  may  not  exceed the limitations set forth in this section.  [Any]
ONE-HALF OF ANY amount of tax credits not awarded for a particular taxa-
ble year may [not] be used by the commissioner to award tax  credits  in
another taxable year.

Credit components in the aggregate           With respect to taxable

S. 5884                            32

shall not exceed:                            years beginning in:

          $ 50 million                               2011
          $ 100 million                              2012
          $ 150 million                              2013
          $ 200 million                              2014
          $ 250 million                              2015
          $ 200 million                              2016
          $ 200 million                              2017
          $ 200 million                              2018
          $ 200 million                              2019
          $ 200 million                              2020
          $ 200 million                              2021
          $ 150 million                              2022
          $ 100 million                              2023
          $ 50 million                               2024

  Twenty-five  percent  of  tax credits shall be allocated to businesses
accepted into the  program  under  subdivision  four  of  section  three
hundred  fifty-three  of  this  article  and seventy-five percent of tax
credits shall be allocated to businesses accepted into the program under
subdivision three of section three hundred fifty-three of this article.
  Provided, however, if by September thirtieth of a calendar  year,  the
department  has  not  allocated  the full amount of credits available in
that year to either: (i) businesses  accepted  into  the  program  under
subdivision four of section three hundred fifty-three of this article or
(ii)  businesses  accepted  into  the program under subdivision three of
section three hundred fifty-three of this article, the commissioner  may
allocate  any  remaining  tax  credits to businesses referenced in para-
graphs (i) and (ii) of this section as needed; provided,  however,  that
under no circumstances may the statutory cap be exceeded.
  S  5. Section 31 of the tax law, as amended by section 2 of part MM of
chapter 59 of the laws of 2010, is amended by adding a  new  subdivision
(f-1) to read as follows:
  (F-1)  CREDIT RECAPTURE FOR UNREALIZED JOB CREATION.  IF, IN ANY GIVEN
YEAR, A TAXPAYER WHO HAS SATISFIED THE ELIGIBILITY CRITERIA SPECIFIED IN
SECTION THREE HUNDRED FIFTY-THREE OF THE ECONOMIC DEVELOPMENT LAW  REAL-
IZES  JOB  CREATION LESS THAN THE ESTIMATED AMOUNT, THE CREDIT DESCRIBED
IN THIS SECTION ALLOWED IN THAT YEAR SHALL BE REDUCED BY THE  PROPORTION
OF  ACTUAL JOB CREATION TO THE ESTIMATED AMOUNT, PROVIDED THE PROPORTION
IS AT LEAST SEVENTY-FIVE PERCENT OF THE JOBS ESTIMATED.
  S 6. This act shall take effect on the sixtieth  day  after  it  shall
have become a law.
  S 2. Severability clause. If any clause, sentence, paragraph, subdivi-
sion,  section  or  part  of  this act shall be adjudged by any court of
competent jurisdiction to be invalid, such judgment  shall  not  affect,
impair,  or  invalidate  the remainder thereof, but shall be confined in
its operation to the clause, sentence, paragraph,  subdivision,  section
or part thereof directly involved in the controversy in which such judg-
ment shall have been rendered. It is hereby declared to be the intent of
the  legislature  that  this  act  would  have been enacted even if such
invalid provisions had not been included herein.
  S 3. This act shall take effect immediately; provided,  however,  that
the  applicable effective date of Parts A through C of this act shall be
as specifically set forth in the last section of such Parts.

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